1 Jeanie O’Laughlin
Mayor
Nick Lessenevitch
Mayor Pro Tem
Jim Creighton
Councilmember
Kelly Kulikoff
Councilmember
Karen Macedonio
Councilmember
AGENDA
CITY OF CALIFORNIA
CITY COUNCIL/HOUSING AUTHORITY/SUCESSOR AGENCY
TUESDAY, AUGUST 9, 2022
REGULAR MEETING @ 6:00 PM
COUNCIL CHAMBERS & VIA ZOOM
21000 HACIENDA BLVD., CALIFORNIA CITY, CA 93505
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REGULAR MEETING 6:00 PM
CALL TO ORDER
PLEDGE OF ALLEGIANCE/INVOCATION
ROLL CALL
Councilmembers: Creighton, Kulikoff, Macedonio, Mayor Pro Tem Lessenevitch, Mayor O’Laughlin
ADOPT AGENDA
CITY CLERK REPORTS/LATE COMMINICATIONS
• Correspondence from J.M. Powers dated March 31, 2022, April 01, 2022, and April 04, 2022
DEPARTMENTAL REPORTS
• Finance
• OHV
• Parks & Recreation
• Planning
CIVIC/COMMUNITY/ORGANIZATION ANNOUNCEMENTS
PUBLIC BUSINESS FROM THE FLOOR
The portion of the meeting is reserved for public who desire to address the City Council on any matter not on this agenda and over which the City Council has jurisdiction. Please state your name for the record and limit your comments to (3) three minutes.
CONSENT CALENDAR
All items on the consent calendar are considered routine, non-controversial and will be approved by (1) one motion if no member of the council, staff, or public wishes to comment or ask questions. Public comments to be limited to (3) three minutes. Roll call vote required.
CC 1. Approve City Check Register dated 07/22/2022 through 08/04/2022 CC 2. Approve Three (3) Dump Trailers for Public Works Department- Amador Meza, Chief Water Operator CC 3. Adoption of Resolution No. 05-22-2921, a Resolution of the City Council Ratifying the Proclamation of State of Emergency by Governor Newsom on March 4, 2020, and Making the Legally Required Findings to Continue to Authorize the Conduct of Remote “Telephonic” Meetings During the State of Emergency for the Period from August 9, 2022, through September 8, 2022– by Doug Dunford, City Manager
NEW BUSINESS
NB 1. FY 2019-20 Financial Audit Report prepared by Bryant L. Jolley – by Kenny Cooper, Finance Manager Recommendation:
City Council receive and file report.
NB 2. Council to Consider Adopting a Resolution Establishing a 1 Cent Sales Tax in the City of California City and Placing the Ordinance on the November 8, 2022, Ballot for Voter Approval Pursuant to Revenue and Taxation Code 7285.9– by Doug Dunford, City Manager
Recommendation:
Staff recommends that the Council adopt the resolution attached hereto. In adopting the resolution, the Council will be l) Giving Notice of The Submission to the Qualified Voters for the City of California City of one Ordinance Imposing 1.0 Percent General Purpose Retail Transactions and Use Tax Pursuant to Revenue And Taxation Code Section 7285.9; 2) Requesting that the Board of Supervisors of the County of Kern Grant the City’s Request for Consolidation of Said General Municipal Election with the November 8, 2022, Statewide General Election Administered By the Registrar Recorder/County Clerk (“County Clerk”) of The County Of Kern; 3) Requesting that the County Clerk Provide Specific Election Administration Services in Connection with the City’s General Municipal Election; and (4) Setting Rules and Deadlines for Arguments and Rebuttals For and Against the Ordinance.
NB 3. Engineering Fees for CDBG Balsitis Project– by Theresa Oaks, Parks & Recreation Supervisor Recommendation:
Staff recommends accepting the proposal, allowing staff to move forward with improvements to Balsitis Park.
COUNCILMEMBER COMMENTS, AGENDA REQUESTS, AND AB1234 REPORTS This portion of the meeting is reserved for council members to present information, announcements, and items that have come to their attention. The Brown Act precludes Council, staff or public discussion. Short staff responses are appropriate. The Council will take no formal action. A Council member may request the City Clerk to calendar an item for consideration at a future meeting or refer an item to staff.
ADJOURNMENT
AFFIDAVIT OF POSTING: This agenda was posted on all official City bulletin boards and the City website at least 72 hours prior to the Council Meeting. Deputy City Clerk
ITEM NO. DEPARTMENT REPORT
COUNCIL AGENDA ITEM
August 9, 2022
PREPARED BY: Inge Elmes, OHV Manager
SUBJECT: OHV Monthly Department Report
Events
Staff is preparing for the riding season and for the Labor Day Holiday weekend.
Operations
Interviews are being held for the part time Park Aide position. Training will take place to be ready for the first holiday weekend. Ground crew continues to maintain campground, amenities, and riding areas.
Manager Updates
Per Capita Grant/Playground Equipment Project information:
• Reimbursement of $142,945.00 received on June 30, 2022, to Revenue GL 10-3691. • Balance of $35,747.00 due to Revenue GL 10-3691.
Staff continues to prepare for the FY 22/23 budget.
Finance Report
For the month of July, OHV sales totaled $2,776.00. These numbers are actuals and reflect only amounts received within each month. Please refer to Monthly Permit Sales report for FY totals. *Not all proceeds are deposited in the same month.
**OHV sales are deposited to specific OHV Permit Program GL revenue codes #29-3992 through #29- 3998. Please refer to financial statement for details.
***Some merchandise was purchased by staff at a discounted rate. All sales for merchandise are allocated to GL revenue code 29-3691.
JULY 2022 MONTHLY OHV PROGRAM SALES FY 22/23
SALES QTY CASH CHECK CREDIT CARD PAYPAL TOTALS YTD TOTALS Single Permits (Prorated) $10
Single Permits $15 58 $600 $135 $135 $870 870.00
Small Family (Prorated) $40
Small Family $60 11 $120 $60 $360 $120 $660 660.00
Large Family (Prorated) $80
Large Family $100 1 $100 $100 100.00
OHV 4 Pack (Prorated) $35
OHV 4 Pack $50 4 $200 $200 200
RV Pass (Prorated) $15
RV Pass $30 12 $150 $150 $60 $360 360.00
Single Dump Pass $5 1 $5 $5 5
Single Water Pass $5
Additional Permits (Prorated) $5
Additional Permits $10 2 $20 $20 20.00
Free Free 6 $0 0
Residents Permits Free $0 0
Paypal Fees - $4 $4 9 $36 $36 $36
Holiday Week Day - Power $25
Holiday Week Day - Water $15
Non-Holiday Weekday-Power $15 2 $30 $30 30.00
Non-Holiday Weekday-Water $10 2 $20 $20 20.00
Holiday Weekend - Power $40
Holiday Weekend - Water $20
Non-Holiday Weekend-Power $25 3 $25 $50 $75 75.00
Non-Holiay Weekend-Water $15 3 $15 $30 $45 45
Shower Tokens $0.50 288 $119 $25 $144 144.00
Transient Lodging $150
Vendor Fees $1
Special Event Fees $5
Map Sales $3 2 $6 $6 6
Donations $1
Hoodies $40
Short Sleeve Shirts $20 1 $10 $10 10.00
Long Sleeve Shirts $30 1 $30 $30 30.00
Caps $20 5 $20 $70 $90 90.00
Bucket Hats $20 4 $60 $60 60.00
Visors $15 1 $15 $15 15.00
Beenies $15
MONTHLY TOTALS $1,119 $60 $1,146 $451 $2,776 $2,776.00
ITEM NO. DEPARTMENT REPORT
CITY COUNCIL
AUGUST 9, 2022
Prepared by: Theresa Oaks, Parks & Recreation Supervisor Subject: Department Report for the Months of June and July EVENTS
Staff and volunteers are now planning for a fall event as well as parade/tree lighting and Holiday Village. Staff will be hosting outdoor movie night on Saturday, August 6 at 8 PM. The 4th of July event hosted by staff was very successful, in part due to the watchful eye of one of Cal City’s finest, Officer Brian Hansen.
OPERATIONS
During the months of June and July, our staff have been focused on summer camp, as well as working with We Got Next (WGN) Sports hosting basketball, football, and cheer. There were approximately 30-40 kids registered for summer camp, with a waiting list of about 20 more. There were approximately 50 kids registered for sports through WGN. Staff are also working on adding volleyball, and a partnership with AYSO for soccer. Adult aerobics and adult walking clubs were on hold during summer camp, but will resume as of Tuesday, August 9th. The Strata Center also continues to be open with game room activities and open gym. The Parks free art classes are every Wednesday afternoon from 2:30- 4 pm. According to our sign in sheets we have had an average daily attendance of approximately 20 people using the Strata.
Unfortunately, due to lifeguard certification issues, staff were unable to open the pool this season. However, staff will be recruiting for potential lifeguards through the high school as early as October so they may take advantage of lifeguarding courses offered through Tehachapi’s aquatics department.
PROGRAMMING
Programming will continue to include the adult aerobics, adult walking club, and various activities on Wednesday evenings. Staff will also continue working with We Got Next Sports and bringing more sports including basketball, football, cheer, and hopefully soccer and volleyball. Staff continues to partner with the Art Commission and hosting art classes for kids of all ages.
The welding classes held at Central Park were successful, and we will be hosting them again in December.
Staff are also working on setting up a town hall to create a 5-year plan, as well as updating the Master plan.
FUTURE PROGRAMMING
Staff are planning for ABC Learning (preschool program) to begin again in September. Staff and volunteers are also looking at possibly bringing a ceramics class to Central Park. In September, staff will be at Balsitis 1-2 days a week, with basketballs to play with kids in the community.
August 2022 Planning Staff Report
ITEM NO. DEPARTMENT REPORT
COUNCIL AGENDA ITEM
August 9, 2022
PREPARED BY: PLANNING STAFF
SUBJECT: MONTHLY PLANNING DEPARTMENTAL COUNCIL REPORT
Staff
1-Planning Clerk (Sonia Tapia)
1-Planning Admin (Marie Stowers)
1-City Planner (Open Position)
1-Consulting Company (Interwest)
Projects/Applications
This report includes the following items:
• A summary of projects and revenue for the month of July 2022 • A list of approved, new, and open projects for July 2022 8 Minute Solar EIR Review
City review of 8 Minute Solar’sKudu project is located on both City lands and unincorporated County lands. Kudu is located in the northwest portion of California City in general proximity to the California City Municipal Airport.
The Kudu project has been approved by Kern County and the County has certified the project Environmental Impact Report (EIR). This project is scheduled for a Planning Commission hearing on August 16, 2022.
SB9 Housing Regulations
Staff has initiated SB9 municipal code updates and it is anticipated the ordinance to implement these new regulations will be presented to the Planning Commission in September and to the City Council in October.
Progress on SPR Backlog
With the resolution of industrial development standards staff has begun making greater progress on clearing the backlog of pending SPR applications. It is anticipated that two Director’s Hearing will be held each month and the three to five projects will be considered at each hearing.
Thank You
PROJECT TYPE JULY TOTAL FY TOTAL
CUP: NA
LOT LINE ADJUSTMENTS: NA
LOT MERGERS: NA
SPR: 6 NA
SPR MINOR: 3 NA
TENATIVE PARCEL MAPS: NA
VARIANCE: NA
ZONE CHANGE & GPA: NA
ZONE TEXT AMENDMENTS: NA
PROJECT TYPE JULY TOTAL FY TOTAL
CUP:
LOT LINE ADJUSTMENTS:
LOT MERGERS:
SPR M: 2
SPR:
TENATIVE PARCEL MAPS:
VARIANCE:
ZONE CHANGE & GPA:
ZONE TEXT AMENDMENTS:
PROJECT TYPE JULY TOTAL
CUP: 1 NA
LOT LINE ADJUSTMENTS: 1 NA
LOT MERGERS: 9 NA
SPR M: 1 NA
SPR: 58 NA
TENATIVE PARCEL MAPS: 7 NA
TENTATIVE TRACT MAPS: 1 NA
VARIANCE: 3 NA
ZONE CHANGE & GPA: 5 NA
PROJECT TYPE JULY TOTAL FY TOTAL
CUP:
LOT LINE ADJUSTMENTS:
LOT MERGERS: 375.00 $ 375.00 $
SPR: 8,210.00 $ 8,210.00 $
TENATIVE PARCEL MAPS: 842.50 $ 842.50 $
TENATIVE TRACT MAPS:
VARIANCE:
ZONE CHANGE & GPA:
Other:
TOTALS $ 9,427.50 $ 9,427.50
BHT Invoices Paid by City $ 89,732.10
BHT Invoice Reimbursed to City 62,714.05 $
Difference (outstanding to collect) 27,018.05 $
Planning
Covers Period July 1- July 31, 2022
Note: some of the invoices maybe city projects.
REVENUE (Non Reimbursable)
The FY Total includes July Total
NEW PROJECTS
APPROVED / COMPLETED PROJECTS
The FY Total includes July
OPEN PROJECTS
Cannabis (C)
Non-Cannabis (NC)
TYPE PROJECT APPLICANT/APN PLANNING PROJECT STATUS CEQA TYPE APP DATE ACTIVITY DATE STAFF NC SPR M 22-21 Will's Boxing / 9072 CCB Suite B APPROVED 5/26/2022 7/6/2022 PlanningNC SPR M 22-27 DNR Auto Reg / 8201 CCB APPROVED 06/29/22 07/11/22 Planning Cannabis (C)
Non-Cannabis (NC)
TYPE PROJECT APPLICANT/APN PLANNING PROJECT STATUS CEQA TYPE APP DATE ACTIVITY DATE STAFF C SPR 22-20 Vardan Nalbandyan / APN 216-150-41 4/25/2022 Interwest NC SPR M 22-21 Will's Boxing / 9072 CCB Suite B APPROVED 5/26/2022 7/6/2022 Planning C SPR 22-22 Hovanes / APN 206-042-02 06/07/22 Interwest NC SPR 22-23 RV Dump / APN 227-010-03 06/20/22 Interwest C SPR 22-24 Nestle PM / APN 206-031-27 & 28 InterwestC SPR 22-25 HR Cali / APN 206-042-14 & 15 06/27/22 Interwest NC SPR M 22-26 Lee's 2nd Hand / 7101 CCB APPROVED 06/29/22 07/25/22 PlanningNC SPR M 22-27 DNR Auto Reg / 8201 CCB APPROVED 06/29/22 07/11/22 PlanningNC SPR 22-28 GCC Transition LLC / APN 210-203-14 06/23/22 Interwest
PLANNING PROJECT LIST
Tuesday, August 9, 2022
Planning Review Completed - PROJECTS JUNE 2022NEW PROJECTS JUNE 2022 NOTE: NEXT MEETING THE PROJECTS LISTED ABOVE WILL BE MOVED TO ASSOCIATED PROJECT TYPE ON THE FOLLOWING PAGES AND NEW PROJECTS WILL BE LISTED ABOVE. **ALL PROJECTS ON FOLLOWING PAGES ARE SEPARATED BY PROJECT TYPE
Cannabis (C)
Non-Cannabis (NC)
TYPE PROJECT APPLICANT/APN PLANNING PROJECT STATUS CEQA TYPE APP DATE ACTIVITY DATE STAFF NC CUP 19-04 8 Minute Solar - Kudu Processing - PC in July 2022 EIR 08/06/19 06/07/22 Interwest Cannabis (C)
Non-Cannabis (NC)
TYPE PROJECT APPLICANT/APN PLANNING PROJECT STATUS CEQA TYPE APP DATE ACTIVITY DATE STAFF Unknown LLA 22-01 George Mamayan/APN 302-273-31,32 and 33 Surveyor has submitted correction to applicant N/A 1/12/2022 2/27/2022 Interwest Cannabis (C)
Non-Cannabis (NC)
TYPE PROJECT APPLICANT/APN PLANNING PROJECT STATUS CEQA TYPE APP DATE ACTIVITY DATE STAFF Unknown LM 19-02 Leland Krelle/APN's 299-263-01 & 08 Waiting for Resubmittal - Applicant to provide redundant deed & title guarantee N/A 03/27/19 02/01/22 Planning C LM 19-03 Leland Krelle/APN's 299-263-04 & 05 Waiting for Resubmittal - Applicant to provide redundant deed & title guarantee N/A 03/27/19 02/01/22 Planning Unknown LM 19-04 Leland Krelle/APN's 261-111-05, 06, 09 & 10 Waiting for Resubmittal - Applicant to provide matching deed & title N/A 09/23/19 02/01/22 Planning C LM 21-02 Arvin Bagdsaryan/APN's 216-010-14 & 30 Under Review - Revised submittal received on 12-7-21 N/A 02/19/21 02/01/22 Planning Unknown LM 21-06 Jason VanCuren/APN's 206-032-20 & 21 Waiting for Resubmittal - Applicant to provide info requested on 07/23/2021 & 09/07/2021 N/A 03/29/21 02/01/22 PlanningUnknown LM 21-07 Patrick Henderson/APN 302-271-01 & 39 Under Review - Sent to Engineer on 10/19/2021 N/A 10/07/21 02/01/22 Planning C LM 22-01 APN 299-263-01 & 08 Waiting on client corrections N/A 02/22/22 04/06/22 Planning NC LM 22-02 APN 203-420-02 & 30 Planning Review N/A 03/15/22 04/24/22 PlanningNC LM 22-03 APN 225-221-02 & 03 Planning Review N/A 04/07/22 Planning Cannabis (C)
Non-Cannabis (NC)
TYPE PROJECT APPLICANT/APN PLANNING PROJECT STATUS CEQA TYPE APP DATE ACTIVITY DATE STAFF NC SPR M 22-29 Broymar LLC DBA Majestix NA Planning
Cannabis (C)
Non-Cannabis (NC)
TYPE PROJECT APPLICANT/APN PLANNING PROJECT STATUS CEQA TYPE APP DATE ACTIVITY DATE STAFF C SPR 18-38 APN 203-062-03 Sunepoint MND public review completed, waiting on updates from agency comments IS/MND 12/4/2019 5/2/2022 InterwestC SPR 20-02 APN 302-077-15 Altanova Planning Review IS/MND 01/23/20 05/02/22 Interwest C SPR 20-11 APN 216-162-06 Green Canna Awaiting payment prior to review of the project. IS/MND 04/22/20 03/29/22 InterwestC SPR 20-13 APN 302-310-16 Cannaplex Update Circulated internally for comments. N/A 10/19/20 05/31/22 InterwestC SPR 20-14 CoreCivic Planning Review (applicant non-communicative) EIR 05/15/20 05/02/22 InterwestC SPR 20-16 Urban Leaf APN 302-271-37 Urban Leaf Circulated internally for comments. NOE 07/09/20 04/06/22 InterwestC SPR 20-24 Complex Greens APN 216-140-06 Circulated internally for comments. IS/MND 11/18/20 04/06/22 InterwestC SPR 20-30 APN 302-271-37 Planning Review IS/MND 08/26/20 05/02/22 Interwest C SPR 20-32 Cantebury/APN 206-041-44 & 206-041-07 Planning Review IS/MND 08/25/20 05/02/22 Interwest C SPR 20-43 Herban Collective LLC APN 216-150-04 Circulated internally for comments. Site plan changed. Trying to contact applicant. IS/MND 02/22/21 06/06/22 InterwestC SPR 20-44 Leland Krelle APN 216-120-04 Awaiting payment prior to review of the project. IS/MND 10/30/19 01/13/22 Interwest CONDITIONAL USE PERMITSLOT LINE ADJUSTMENTLOT MERGERSITE PLAN REVIEW (MINOR)SITE PLAN REVIEW - Under Review & Verification of Project Status
C SPR 20-45 APN 216-113-08, 09 and 10 Awaiting payment prior to review of the project. IS/MND NA 01/10/22 Interwest C SPR 21-04 Soft Gold APN 216-010-04 Planning Review IS/MND 02/05/21 04/06/22 Interwest C SPR 21-17 Padron APN 210-263-14 Planning Review IS/MND 03/18/21 04/06/22 Interwest C SPR 21-20 Naughty Panda APN 302-273-30
Waiting on applicant to agree to COAs, then NOE/DH, pending TPM (6/7). Preparing SPR/MND staff report for 7/28/22 Director Hearing approval. NOE 04/05/21 06/07/22 Interwest C SPR 21-21 Gary Allen Shaw APN 206-042-36 Waiting for Resubmittal - Applicant to provide site plan and additional documents IS/MND 04/06/21 01/10/22 InterwestC SPR 21-24 Goodfellas APN 216-010-18 MND complete, applicant has received COAs, schedule DH IS/MND 03/30/21 06/07/22 InterwestC SPR 21-25 Level Up APN 206-031-14 MND complete, applicant has received COAs, schedule DH IS/MND 03/31/21 06/07/22 InterwestC SPR 21-32 APN 206-031-19 Circulated interally for comments. IS/MND 04/05/21 06/07/22 InterwestC SPR 21-36 La Canada LLC/APN 206-032-22 Planning Review IS/MND 12/15/21 05/02/22 Interwest C SPR 21-39 Apo Jan, APN 299-263-01 & 08 Pending LM 22-01, applicant working on additional engineering NOE 08/31/21 06/07/22 Interwest NC SPR 21-40 Mariscos La Perla/APN 213-500-14 applicant reviewing engineering COAs, then schedule DH NOE 10/25/21 06/07/22 Interwest C SPR 21-41 Gentle Greens/APN 206-031-29 Applicant has COAs and is working on updates NOE 09/09/21 06/07/22 InterwestC SPR 21-42 Mr. Saadatkandi/APN 216-180-18 Waiting for Resbumittal - Applicant to revise site plan and complete application NOE 10/25/21 01/15/22 InterwestC SPR 21-43 Artur Grigoryan/APN 216-120-16 Circulated internally for comments. NOE 10/07/21 06/07/22 InterwestC SPR 21-44 Lana Karapetyan/APN 216-120-15 Circulated internally for comments. IS/MND 10/07/21 06/07/22 Interwest SPR 21-45
C SPR 21-47 Mohammad R Saadatmandi/APN 216-180-18 Awaiting payment prior to review of the project. IS/MND 10/21/21 10/21/21 InterwestC SPR 21-48 Willow Wellness Awaiting payment prior to review of the project. IS/MND NA 03/02/22 InterwestC SPR 21-49 E. Hernandez/APN 213-232-05 Incomplete application, awaiting for resubmittal IS/MND 10/31/21 01/20/22 InterwestC SPR 21-52 Green Farmhouse Applicant has COAs and is working on updates NOE 07/09/21 04/06/22 InterwestC SPR 21-48 Willow Wellness IS/MND 03/02/22 Interwest NC SPR 21-49 Dan Auto Install-Audio-Tint / APN 213-232-05 IS/MND 10/31/21 01/20/22 Interwest C SPR 21-52 Green Farmhouse NOE 07/09/21 04/06/22 Interwest NC SPR 21-53 Arrow Engineering/APN 225-221-02 &03 MND being corrected by consultant, circualted for comments internally IS/MND 11/08/21 05/02/22 Interwest C SPR 21-56 Mr.Calderon/APN 212-320-36 Incomplete application, awaiting for resubmittal IS/MND 12/14/21 01/14/22 InterwestC SPR 21-57 Natural Green Empire/299-263-02 Applicant has COAs and is working on updates NOE 11/23/21 06/07/22 InterwestC SPR 21-58 Canniland/APN 350-140-10 Applicant has COAs and is working on updates. SPR/MND approved by Director on 7/21/22. IS/MND 12/22/21 06/07/22 InterwestC SPR 22-01 760 Line/APN 216-010-16 CEQA is done, applicant is working on updates per COAs IS/MND 01/24/22 06/07/22 InterwestC SPR 22-02 California Jungle/APN 206-041-42 Planning Review - need to be circulated internally IS/MND 01/18/22 05/20/22 InterwestC SPR 22-03 Vass Green/APN 216-130-01 Planning Review - need to be circulated internally IS/MND 01/18/22 05/20/22 InterwestC SPR 22-04 Exotica Nursery Gardens/APN 206-042-07 Planning Review - need to be circulated internally IS/MND 01/18/22 05/20/22 InterwestC SPR 22-05 7 Leaves/APN 216-150-19 Planning Review - need to be circulated internally IS/MND 01/20/22 05/20/22 InterwestC SPR R 22-07 El Patron/APN 216-170-05 Planning Review - need to be circulated internally NOE 01/27/22 05/20/22 InterwestC SPR 22-08 Mr.Jensen/Traditional Ranch/APN 457-020-
05,11,12 and 26 Planning Review - need to be circulated internally IS/MND 02/09/22 05/20/22 Interwest C SPR 22-10 GG Wholesales/APN 206-032-25 Planning Review - need to be circulated internally IS/MND 02/18/22 05/20/22 Interwest
C SPR 22-11 Allay Essence/APN 299-264-02 Planning Review - need to be circulated internally IS/MND 02/22/22 05/20/22 Interwest C SPR 22-12 APN 302-273-03 Planning Review - need to be circulated internally IS/MND 03/03/22 05/20/22 InterwestC SPR 22-13 APN 302-271-07 Planning Review - need to be circulated internally IS/MND 03/15/22 05/20/22 Interwest NC SPR 22-14 Oasis AG/APN 225-092-13
Fire comments received, waiting on engineering comments, MND in IW review. SPR/MND approved by Director on 7/21/22. IS/MND 03/14/22 06/05/22 Interwest
C SPR 22-18 Accurate Green / APN 206-041-04 04/05/22 InterwestC SPR 22-20 Mr. Vardan / APN 216-150-41 04/29/22 InterwestC SPR 22-22 Hovanes / APN 206-042-02 06/07/22 InterwestC SPR 22-24 Nestle PM / APN 206-031-27 & 28 InterwestC SPR 22-25 HR Cali / APN 206-042-14 & 15 06/27/22 Interwest NC SPR 22-28 GCC Transition LLC / APN 210-203-14 07/12/22 Interwest C SPR 22-30 CPG / APN InterwestC SPR 22-31 GOK Unlimited / APN 206-042-43 07/18/22 Interwest Cannabis (C)
Non-Cannabis (NC)
TYPE PROJECT APPLICANT/APN PLANNING PROJECT STATUS CEQA TYPE APP DATE ACTIVITY DATE STAFF Unknown TPM 12223 APN 302-271-38 PC approved TPM, now in Final Map Review TBD 4/14/2021 Interwest Unknown TPM 12324 APN 216-114-01 PC approval 12-2019, in Final Map Review, needs updated COAs IS/MND Interwest NC TPM 12374 V. Lungari/APN 350-031-02 Correctional Facility - EIR in public review period IS/MND 11/10/2020 02/04/22 Interwest C TPM 12401 A. Tsaturiyan/APN 302-273-30 PC on 6/7 IS/MND 4/13/2021 06/07/22 InterwestC TPM 12407 APN 302-271-19 PC on 6/7 IS/MND 4/12/2021 06/07/22 InterwestC TPM 12417 APN 302-271-15 PC on 6/7 IS/MND NA 06/07/22 InterwestC TPM 12450 APN 229-010-37 Need to route to surveyors IS/MND 12/16/2021 2/27/2022 Interwest Cannabis (C)
Non-Cannabis (NC)
TYPE PROJECT APPLICANT/APN PLANNING PROJECT STATUS CEQA TYPE APP DATE ACTIVITY DATE STAFF TTM 22-01 APN 302-274-01, 02, 03, 04 & 05 3/22/2022 Interwest Cannabis (C)
Non-Cannabis (NC)
TYPE PROJECT APPLICANT/APN PLANNING PROJECT STATUS CEQA TYPE APP DATE ACTIVITY DATE STAFF NC VAR 20-03 Shell/APN 225-061-12 601 Cal City Blvd Waiting for resubmittal - Email sent to applicant on 07/06/2021 NOE TBD Pending InterwestNC VAR M 21-02 M.Ellison/9532 Rea Ave/10' instead of 8' Planning Review - Documents received on ___________ N/A 04/21/21 Pending InterwestNC VAR M 21-03 J. Heller/9800 Joshua Bld. Block Wall Waiting for Resubmittal email sent on 04/21/2021 N/A 3/1/2021 Pending City Cannabis (C)
Non-Cannabis (NC)
TYPE PROJECT APPLICANT/APN PLANNING PROJECT STATUS CEQA TYPE APP DATE ACTIVITY DATE STAFF C ZC 21-05 Arias/299-173-02, 03, 04 City Council consideration of the Appeal on 11-9-21 - Appeal withdrawn NA 04/12/21 NA InterwestC ZC 21-06 M. Ellison/APN 299-173-02, 03, 04 PC July 2022 IS/MND 4/6/2021 06/07/22 Interwest ZC 21-07 R. Milner/APN 225-201-12 PC July 2022 IS/MND 10/18/2021 06/07/22 Interwest C ZC 22-01 Mr. Leaf/APN 302-020-22 PC July 2022 IS/MND 3/16/2022 06/07/22 InterwestC ZC 22-02 Olivia Davidson / APN 302-391-19 3/30/2022 Interwest
TENATIVE PARCEL MAPSTENATIVE TRACT MAPSVARIANCESZONE CHANGES
*LEGEND ABBREVIATIONS **CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) LEGEND ABBREVIATIONS
CUP CEDH MLLA MNDLM EIRNASDRSPRSPR MSPR ETPMTBDVARZCZT
DIRECTOR'S HEARINGLOT LINE ADJUSTMENTSLOT MERGERSNOT APPLICABLESTAFF DEVELOPMENT REVIEWSITE PLAN REVIEWSITE PLAN REVIEW MINORSITE PLAN REVIEW E (BUSINESS - EXISTING BLDG.)TENATIVE PARCEL MAPSTO BE DETERMINEDVARIANCEZONE CHANGEZONE TEXT AMENDMENTS FOOTNOTE:Red text indicates payment still needed. No approval will be given without full payment of fees.
CONDITIONAL USE PERMIT
ITEM NO. CC 2
COUNCIL AGENDA ITEM
AUGUST 9, 2022
Prepared By: Amador Meza, Chief Water Operator
Subject: Dump Trailers for Public Works Departments
BACKGROUND/ DISCUSSION
Public Works (PW) is requesting to purchase (3) three new 7 X 12 dump trailers for Streets, Water and Clean-up funds that are currently in need of dump trailers. The 3 trailers have been budgeted.
The new trailers with the dump feature would make it easier and more efficient to transport the materials we use and work with ie; cold mix, gravel, base, asphalt, water materials, etc. in addition to being able to pick up weeds, trash and more of the larger refuse items at one time. This efficiency would result in less trips, less labor time and faster completion of tasks.
Of the attached quotes, Carson Trailer is a little cheaper however, they do not have the trailers in stock and require a minimum 3-month lead time for a build. Golden West Trailer Sales is too expensive. Trailer Super Store has them in stock and available.
FISCAL IMPACT
G/L Breakdown
1. Starting Balance - Street # 27-4411-740 $100,000.00
Current Balance $ 23,544.28
Amount Requested $ 12,486.91
Amount Remaining $ 11,057.37
2. Starting Balance – Water # 51-5115-740 $677,000.00
Current Balance $617,707.58
Amount Requested $ 12,486.91
Amount Remaining $605,220.67
3. Starting Balance – Clean-Up Crew # 27-4413-740 $ 58,000.00 Current Balance $ 58,000.00
Amount Requested $ 12,486.91
Amount Remaining $ 45,513.09
COUNCIL OPTIONS
1. Council can approve the request
2. Council can deny the request
3. Council can take no action
RECOMMENDATION
Staff recommends the City Council authorize the City Manager to purchase trailers from Trailer Super Store.
ATTACHMENTS
1. Trailer Super Store quote
2. Carson Trailer quote
3. Golden West Trailer Sales quote
Kari lee
From:
Sent:
To:
[email protected]
Wednesday, August 3, 2022 4:25 PM
Kari Lee
Subject: Carson Trailer Inc.- Dump trailer 7x12 quote
Hello,
This is an updated quote for a 2023 Carson Dump Trailer 7'x12' w/ 2' sides, 9995Ib GVW
Trailer price: $11,148.00
Doc Fee: $65.00
Tax: $812.94
Ca Tire Fee: $7.00
License: $43.00
TOTAL: $12,075.94
Carson requires at least half deposit to order. Estimated build times will be about 3 months.
Any further questions please call us at (661)945-2267.
Thank you,
Marc Tekala- Manager
Carson Trailer Inc.
45320 23rd St West
Lancaster, Ca 93536
(661)945-2267
1
ITEM NO. CC 3
CITY COUNCIL AGENDA
August 9, 2022
Presented By: Doug Dunford, City Manager
Subject: Adoption of Resolution No. 05-22-2921, a Resolution of the City Council Ratifying the Proclamation of State of Emergency by Governor Newsom on March 4, 2020, and Making the Legally Required Findings to Continue to Authorize the Conduct of Remote “Telephonic” Meetings During the State of Emergency for the Period from August 9, 2022, through September 8, 2022
_____________________________________________________________________________________
BACKGROUND
Since March 12, 2020, Executive Orders from the Governor have relaxed various Brown Act meeting requirements to allow remote meetings and to temporarily suspend the Brown Act provisions requiring the physical presence of Councilmembers at public meetings. Those authorizations expired on September 30, 2021.
On September 16, 2021, the Governor signed AB 361. AB 361 allows local agencies to continue to conduct remote (“Zoom”) meetings during a declared State of Emergency, provided local agencies make specified findings by Resolution. Absent this legislation, local agencies would have had to return to traditional meetings beginning on October 1, 2021, and traditional methods of remote participation by Councilmembers including the requirements of Government code 54953(b)(3).
Government Code 54953(b)(3) provides:
(3) If the legislative body of a local agency elects to use teleconferencing, it shall post agendas at all teleconference locations and conduct teleconference meetings in a manner that protects the statutory and constitutional rights of the parties or the public appearing before the legislative body of a local agency. Each teleconference location shall be identified in the notice and agenda of the meeting or proceeding, and each teleconference location shall be accessible to the public. During the teleconference, at least a quorum of the members of the legislative body shall participate from locations within the boundaries of the territory over which the local agency exercises jurisdiction, except as provided in subdivisions (d) and (e). The agenda shall provide an opportunity for members of the public to address the legislative body directly pursuant to Section 54954.3 at each teleconference location.
To utilize the exemption of AB 361 there must be a Proclamation from the Governor of a State of Emergency. On March 4, 2020, the Governor declared a State of Emergency which continues to this date.
In addition, to utilize AB 361, one of the following must also be true:
1) “[S]tate or local officials have imposed or recommended measures to promote social distancing”1; or
1 It is important to distinguish social distancing recommendations (e.g., stay 6 feet apart) from other safety protocols such as masking and vaccines.
2) The legislative body is holding a meeting for the purpose of determining “whether as a result of the emergency, meeting in person would present imminent risks to the health or safety of attendees.” That is, the legislative body will be determining whether there is such risk; or 3) By “majority vote”2the legislative body determined that “as a result of the emergency, meeting in person would present imminent risks to the health or safety of attendees.” That is, the legislative body already determined there is such risk.
State officials continue to impose and recommend social distancing and indoor masking measures supporting an appropriate finding. The Kern County Public Health Services news release from March 8, 2022, outlined the latest COVID-19 facts and guidelines, including referencing the State’s continued recommendation for indoor masking.
The Council has the option to either return to the traditional Brown Act provisions or continue to pass the required AB 361 Resolution and avail themselves of the modified Brown Act provisions. So long as the declared State of Emergency by Governor Newsom remains in place, along with the local recommendations by Kern County, the Council will have the necessary findings to continue holding meetings under the modified Brown Act rules made available under AB 361. While the Council is not obligated to pass the attached resolution, failure to do so will require the Council, along with all Boards and Commissions of the City to return to traditional Brown Act requirements.
At the July 12, 2022, City Council Meeting, the Council approved Resolution No. 05-22-2921 that made the findings to authorize the conduct of remote “telephonic” meetings during the State of Emergency.
However, the findings only last for a period of thirty days. To continue this exemption, the Council must adopt a new resolution making such findings every thirty days to continue to utilize the exemptions of AB 361. Given that Resolution Number 05-22-2921 expires on August 11, 2022, staff recommends the City Council adopt the attached resolution to avoid any lapse.
RECOMMENDATION
Staff recommends that the City Council adopt Resolution No. 08-22-2939 reaffirming that the aforementioned conditions continue to be true and extend the exemption from the requirements of the Government Code Section 54953(b)(3) for an additional thirty days.
ENVIRONMENTAL REVIEW
This Action is exempt pursuant to Section 15061(b)(3) of Title 14 of the California Code of Regulations.
ATTACHMENTS:
• Attachment A- Resolution No. 08-22-2939
2 This would include a majority of a quorum. If, for example, there are 5 members of a legislative body, but only 3 are in attendance at a meeting, then 2 would constitute a majority of those in attendance, and therefore may vote to conduct the meeting remotely.
1 RESOLUTION NO. 08-22-2939
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CALIFORNIA CITY, RATIFYING THE PROCLAMATION OF STATE OF EMERGENCY BY GOVERNOR NEWSOM ON MARCH 4, 2020, AND
MAKING THE LEGALLY REQUIRED FINDINGS TO CONTINUE TO
AUTHORIZE THE CONDUCT OF REMOTE “TELEPHONIC”
MEETINGS DURING THE STATE OF EMERGENCY, FOR THE PERIOD
FROM AUGUST 9, 2022, THROUGH SEPTEMBER 8, 2022
WHEREAS, Coronavirus, also known as COVID-19, was first reported in China in December 2019, it has now spread throughout the state of California, including throughout the City of California City (“City”);
WHEREAS, on March 4, 2020, California Governor Gavin Newsom declared a State of Emergency in response to the rising cases of COVID-19 throughout the state of California, which continues to this date;
WHEREAS, on March 13, 2020, the President of the United States declared a National Emergency due to the continued spread and the effects of COVID-19; WHEREAS, on March 16, 2020, a local emergency related to the Coronavirus, was declared by the Kern County Administrative Office, this declaration was subsequently ratified by the Kern County Board of Supervisors on March 17, 2020; WHEREAS, on March 17, 2020, Governor Newsom issued Executive Order N-29-20, which allowed local governments meet remotely without adherence to the traditional teleconferencing rules set forth in the Ralph M. Brown Act (“Brown Act”), this waiver was extended through September 30, 2021, by Executive Order N-08-21; WHEREAS, on September 16, 2021, Governor Newsom signed AB 361, which went into immediate effect as urgency legislation;
WHEREAS, AB 361 added subsection (e) to Section 54953 authorizing legislative bodies to telephonically participate in meetings without compliance with the requirements of Government Code section 54953(b)(3) provided the legislative body makes specified findings; WHEREAS, a required condition is that a State of Emergency is declared by the Governor pursuant to Government Code section 8625, proclaiming the existence of conditions of disaster or of extreme peril to the safety of persons and property within the State caused by conditions as described in Government Code section 8558;
WHEREAS, a further condition of AB 361 if one of the following is true:
1) “[S]tate or local officials have imposed or recommended measures to promote social distancing”; or
2 2) The legislative body is holding a meeting for the purpose of determining “whether as a result of the emergency, meeting in person would present imminent risks to the health or safety of attendees”; or
3) By “majority vote” the legislative body determined that “as a result of the emergency, meeting in person would present imminent risks to the health or safety of attendees.” That is, the legislative body already determined there is such risk.
WHEREAS, the Kern County Public Health Services news release from March 8, 2022, outlined the latest COVID-19 facts and guidelines as well as current State recommendations that public indoor masking for unvaccinated individuals is no longer required, but continues to be strongly recommended;
WHEREAS, within the last 30 days, on July 12, 2022, the City Council of the City of California City adopted a Resolution finding that the circumstances of the State of Emergency declared by the Governor and (1) the State of Emergency directly impacts the ability of the members of this legislative body to meet safely in person; and (2) State or local officials continue to impose or recommend measures to promote social distancing; WHEREAS, the City Council, by this Resolution herein authorizes, for an additional thirty (30) days, exemption from the requirements of Government code section 54953(b)(3) for telephonic participation by Councilmembers in Council meetings from August 9, 2022, through September 8, 2022.
NOW, THEREFORE, IT IS RESOLVED by the City Council of the City of California City as follows:
1. The Recitals set forth above are true and correct and are incorporated into this Resolution by this reference.
2. The City Council finds that local officials, specifically, the Kern County Public Health Services, continues to reference State recommendations regarding recommended masking measures to ensure the safety of residents.
3. The City Council hereby ratifies the Governor of the State of California’s Proclamation of State of Emergency, effective as of its issuance date of March 4, 2020.
4. The City Manager or designee and legislative bodies of the City are hereby authorized and directed to take all actions necessary to carry out the intent and purpose of this Resolution including, continuing to conduct open and public meetings in accordance with Government Code section 54953(e) and other applicable provisions of the Brown Act.
5. This Resolution shall take effect immediately upon its adoption and shall be effective starting August 9, 2022, until the earlier September 8, 2022, or such time as the City Council adopts a subsequent Resolution in accordance with Government Code section 54953(e)(3) to extend the time during which the legislative bodies of the City of California
3 City may continue to teleconference without compliance with paragraph (3) of subdivision (b) of section 54953.
6. All portions of this Resolution are severable. If any section, subsection, sentence, clause, phrase or portion of this Resolution is for any reason held invalid or unconstitutional, such decision shall not affect the validity of the remaining portions of this Resolution.
7. The acting City Clerk shall attest and certify to the passage and adoption of this Resolution and enter it into the book of original resolutions, and it shall become effective immediately upon its approval.
PASSED, APPROVED AND ADOPTED this 9
th day of August 2022 by the following roll
call vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
Jeanie O’Laughlin, Mayor
ATTEST:
_______________________________
Marie Stowers, Acting City Clerk
4 STATE OF CALIFORNIA )
COUNTY OF KERN ) SS
CITY OF CALIFORNIA CITY )
I, Marie Stowers do hereby certify that I am the duly appointed acting City Clerk of the City of California City, and that the foregoing Resolution was duly adopted at a regular meeting of the Mayor and City Council of the City of California City held on the 9 th day of August 2022.
_______________________________
Marie Stowers, Acting City Clerk
APPROVED AS TO FORM
________________________
Victor Ponto, City Attorney
ITEM NO. NB 1
COUNCIL AGENDA ITEM
August 9, 2022
PREPARED BY: Kenny Cooper, Finance Manager
SUBJECT: Presentation of FY 2019-20 Financial Audit Report Prepared by Bryant L. Jolley, Certified Public Accountants
BACKGROUND/ DISCUSSION
Presentation by Bryant L. Jolley CPAs on City of California City’s Financial Statements Year Ended 6/30/2020.
Audit Purpose:
The fundamental audit purpose is to provide independent assurances that management has presented financial statements that are a “true and fair” view of a company’s financial performance and position.
Audit Opinions:
In accordance with the US GAAP, auditors must release an opinion of the overall financial statements in the auditor's report. In other words, this is sometimes referred to as a report card. An unmodified opinion can be interpreted as an “A”, whereas an adverse opinion can be interpreted as an “F”. There are generally four types of audit opinions that auditors may render on the financial statements which are:
Unmodified Opinion (Letter Grade “A”) - When expressing an unmodified opinion on financial statements, the auditor’s opinion should state that the financial statements present fairly, in all material respects, the financial position of the entity as of the balance sheet date and the results of its operations and its cash flows for the period then ended, in accordance with the applicable financial reporting framework.
Qualified Opinion (Letter Grade “C”) – a. The auditor, having obtained sufficient appropriate audit evidence, concludes that misstatements, individually or in the aggregate, are material but not pervasive to the financial statements or b. The auditor is unable to obtain sufficient appropriate audit evidence on which to base the opinion, but the auditor concludes that the possible effects on the financial statements of undetected misstatements, if any, could be material but not pervasive.
Adverse Opinion (Letter Grade “F”) ¬ - The auditor should express an adverse opinion when the auditor, having obtained sufficient appropriate audit evidence, concludes that misstatements, individually or in the aggregate, are both material and pervasive to the financial statements.
Disclaimer (No letter Grade) – The auditor should disclaim an opinion when the auditor is unable to obtain sufficient appropriate audit evidence on which to base the opinion, and the auditor concludes that the possible effects on the financial statements, if any, could be both material and pervasive.
Audit Opinion Results:
The City of California City’s auditors rendered an Unmodified Opinion on the overall financial statements of the city (Letter Grade “A”).
Audit Findings & Recommendations:
As part of the FY 2019-20 audit, the auditing firm identified two (2) areas of our internal control structure that were concerning & required improvement (See attached Single Audit Report). It is important to note that during this period the city went through significant staffing changes in the Finance Department. Additionally, Price Paige & Company was contracted as consultants to assist the City in the year-end close of its financial records. Here is the status of the (2) findings:
• 2020-001 Accounting Oversight (significant deficiency) – Finance has implemented timely monthly reconciliations of its daily banking activity, as well as moving toward quarterly reconciliation of all investment activity, accounts receivable, and accounts payable in preparation of the audit.
• 2020-002 Cash Reconciliation (significant deficiency) - Due to a lack of personnel in the Finance Dept, the city contracted with a CPA firm to revamp and reconcile bank statements.
Overall, the Finance Department has addressed these findings and expect even better results in forthcoming audits. Please note that an audit representative from Bryant L.
Jolley will explain the audit results in more detail. They will also be able to answer any questions that the City Council and/or public may have.
FISCAL IMPACT
None
COUNCIL OPTIONS
RECOMMENDATION
Staff recommends that Council receive and discuss the Audit Report from Bryant Jolley CPA’s.
ATTACHMENTS
1. California City Financial Statement 2020
2. California City Single Audit 2020
CITY OF CALIFORNIA CITY
CALIFORNIA
FINANCIAL STATEMENTS
FOR THE YEAR ENDED
JUNE 30, 2020
CITY OF CALIFORNIA CITY
FINANCIAL STATEMENTS
JUNE 30, 2020
TABLE OF CONTENTS
Page
INDEPENDENT AUDITOR’S REPORT .......................................................................................................1
BASIC FINANCIAL STATEMENTS
Government-Wide Financial Statements:
Statement of Net Position .................................................................................................................5 Statement of Activities ......................................................................................................................6 Fund Financial Statements:
Governmental Funds Financial Statements:
Balance Sheet – Governmental Funds .............................................................................................7 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position .....................................................................................................8 Statement of Revenues, Expenditures and Changes in
Fund Balances – Governmental Funds ..........................................................................................9 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities ........................................10 Proprietary Fund Financial Statements:
Statement of Net Position – Proprietary Funds ..............................................................................11 Statement of Revenues, Expenses and Changes in
Net Position – Proprietary Funds ..................................................................................................12 Statement of Cash Flows – Proprietary Funds ...............................................................................13 Fiduciary Fund Financial Statements:
Statement of Net Position – Fiduciary Funds .................................................................................14 Statement of Changes in Net Position – Fiduciary Funds ..............................................................15 Notes to the Basic Financial Statements ..............................................................................................16
REQUIRED SUPPLEMENTARY INFORMATION
Cost-Sharing Defined Pension Plan:
Proportionate Share of Net Pension Liability ..................................................................................49 Schedule of Contributions...............................................................................................................50 Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual:
General Fund ...................................................................................................................................51 Special Revenue Funds:
Street Maintenance Fund ..........................................................................................................52 Subdivision Deferred Improvement Fund ..................................................................................53 Public Safety Services Fund ......................................................................................................54 OHV Grants Special Revenue Fund ..........................................................................................55
CITY OF CALIFORNIA CITY
FINANCIAL STATEMENTS
JUNE 30, 2020
TABLE OF CONTENTS
(Continued)
Page
SUPPLEMENTARY INFORMATION
Combining and Individual Nonmajor Governmental Funds Statements:
Combining Balance Sheet – Nonmajor Funds ...............................................................................57 Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Nonmajor Governmental Funds .......................................................................59
BRYANT L. JOLLEY
CERTIFIED PUBLIC ACCOUNTANTS Bryant L. Jolley C.P.A.
Ryan P. Jolley C.P.A.
Darryl L. Smith C.P.A.
Luis A. Perez C.P.A.
Lan T. Kimoto
901 “N” STREET, SUITE 104 FIREBAUGH, CALIFORNIA 93622 PHONE 559.659.3045 FAX 559.659.0615 INDEPENDENT AUDITOR’S REPORT
To the City Council of the
City of California City
California City, California
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of California City, California (the “City”) as of and for the year ended June 30, 2020, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.
Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the City’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
2 Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City, as of June 30, 2020, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Other Matters
Required Supplementary Information
Management has omitted the Management’s Discussion and Analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information.
Accounting principles generally accepted in the United States of America require that the Proportionate Share of Net Pension Liability on page 49, Schedule of Contributions on page 50, and the budgetary comparison information on pages 51-55 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The combining nonmajor fund financial statements are presented for purposes of additional analysis and are not a required part of the basic financial statements.
The combining nonmajor fund financial statements are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary information listed above is fairly stated in all material respects in relation to the basic financial statements as a whole.
3 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated June 30, 2022, 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 the City’s 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.
June 30, 2022
4 THIS PAGE IS LEFT BLANK INTENTIONALLY.
The accompanying notes are an integral part of these financial statements. 5 CITY OF CALIFORNIA CITY
STATEMENT OF NET POSITION
JUNE 30, 2020
Governmental Business-Type
Activities Activities Total
ASSETS
Cash and investments $ 11,842,349 2,959,318 $ 14,801,667 $ Receivables:
Interest 6,003 23,942 29,945
Accounts 413,619 655,488 1,069,107
Due from other governments 2,928,887 1,071,792 4,000,679 Inventory - 41,122 41,122
Prepaid expenses 15,478 2,115 17,593
Internal balances 1,823,376 (1,823,376) -
Due from Successor Agency 21,195,991 - 21,195,991
Allowance: Due from Successor Agency Trust Fund (20,684,224) - (20,684,224) Advances to the Successor Agency 985,000 - 985,000
Restricted assets:
Cash and investments 89,584,835 - 89,584,835
Interest receivable 398,433 - 398,433
Capital assets:
Nondepreciable 2,728,577 1,019,612 3,748,189
Depreciable, net of accumulated depreciation 11,904,022 24,045,507 35,949,529 Total assets 24,737,066 126,400,800 151,137,866
DEFERRED OUTFLOWS OF RESOURCES
Pension deferrals 3,539,040 926,968 4,466,008
Total deferred outflows of resources 3,539,040 926,968 4,466,008
LIABILITIES
Accounts payable 275,711 237,819 513,530
Accrued liabilities 539,200 - 539,200
Accrued interest 1,032 7,948 8,980
Unearned revenue 95,005 - 95,005
Deposits payable 160,679 186,750 347,429
Noncurrent liabilities:
Due within one year 810,353 211,438 1,021,791
Due in more than one year 530,899 1,361,474 1,892,373
Net pension liability 3,273,801 12,198,467 15,472,268
Total liabilities 14,611,346 5,279,230 19,890,576
DEFERRED INFLOWS OF RESOURCES
Pension deferrals 249,470 801,908 1,051,378
Total deferred inflows of resources 249,470 801,908 1,051,378
NET POSITION
Net investment in capital assets 26,152,141 11,580,737 37,732,878 Restricted for:
Public safety 803,793 - 803,793
Parks and recreation 12,691 - 12,691
Subdivision infrastructure 89,983,268 - 89,983,268
Community development 1,695,773 - 1,695,773
Unrestricted 8,554,597 (4,121,080) 4,433,517
Total net position $ 114,526,586 20,135,334 $ 134,661,920 $ Primary Government
The accompanying notes are an integral part of these financial statements. 6 CITY OF CALIFORNIA CITY
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2020
Operating Capital
Charges for Contributions Contributions Governmental Business-Type Expenses Services and Grants and Grants Activities Activities Total Governmental activities:
General government 2,617,275 $ 848,629 $ 4,879 $ - $ (1,763,767) $ - $ (1,763,767) $ Public safety 8,827,287 93,816 713,151 2,960 (8,017,360) - (8,017,360) Parks and recreation 1,694,301 262,564 5,216 (4,675) (1,431,196) - (1,431,196) Public works 3,047,494 631 1,548,657 47,569 (1,450,637) - (1,450,637) Community development 632,296 347,553 125 - (284,618) - (284,618) Total governmental activities 1,553,193 16,818,653 2,272,028 45,854 (12,947,578) - (12,947,578) Business-type activities:
Water 5,376,355 6,791,215 - - - 1,414,860 1,414,860
Sewer 1,469,025 1,991,746 - - - 522,721 522,721
Airport 608,757 150,415 81,660 - - (376,682) (376,682)
Dial-a-Ride 18,476 357,991 351,968 - - 12,453 12,453
Total business-type activities 7,812,128 8,951,852 433,628 - - 1,573,352 1,573,352 Total $ 10,505,045 24,630,781 $ 2,705,656 $ 45,854 $ (12,947,578) 1,573,352 (11,374,226) General Revenues:
Taxes:
Property 2,307,601 - 2,307,601
Sales 7,754,950 - 7,754,950
Franchises 403,451 - 403,451
Transient occupancy 75,942 - 75,942
Other taxes 496,064 - 496,064
Business licenses 16,523 - 16,523
Motor vehicle in lieu 11,872 - 11,872
Use of money and property 2,095,198 277,097 2,372,295
Miscellaneous 198,507 1,070 199,577
Total general revenues and transfers 13,360,108 278,167 13,638,275 Change in net position 1,851,519 412,530 2,264,049
Net position - beginning (restated) 18,283,815 114,114,056 132,397,871 Net position - ending $ 20,135,334 114,526,586 $ 134,661,920 $ Net (Expense) and
FUNCTIONS/PROGRAMS:
Program Revenues Changes in Net Position
The accompanying notes are an integral part of these financial statements. 7 CITY OF CALIFORNIA CITY
BALANCE SHEET – GOVERNMENTAL FUNDS
JUNE 30, 2020
Subdivision Public Nonmajor Total
Street Deferred Safety OHV Governmental Governmental
General Maintenance Improvement Services Grant Funds Funds ASSETS
Cash and investments 1,450,515 $ 1,018 $ - $ - $ 356 $ 1,507,429 $ 2,959,318 $ Receivables:
Interest 5,152 536 - 11 - 304 6,003
Accounts 373,132 - - 40,487 - - 413,619
Intergovernmental 124,849 2,389,359 - - 334,490 80,189 2,928,887 Due from other funds 4,180,013 - - - - - 4,180,013
Due from Successor Agency 511,767 - 20,684,224 - - - 21,195,991 Allowance - due from Successor Agency - - (20,684,224) - - - (20,684,224) Prepaid expenses - - - 15,478 - - 15,478
Advances to the Successor Agency - - - - - 985,000 985,000 Restricted assets:
Cash and investments - - 89,584,835 - - - 89,584,835
Interest receivable - - 398,433 - - - 398,433
Total assets 6,645,428 $ 2,390,913 $ 89,983,268 $ 55,976 $ 334,846 $ 2,572,922 $ 101,983,353 $
LIABILITIES
Accounts payable $ 23,626 148,329 $ - $ 90,163 $ 5,431 $ 8,162 $ 275,711 $ Accrued liabilities - 539,200 - - - - 539,200
Unearned revenue - 95,005 - - - - 95,005
Deposits payable - 112,794 - - - 47,885 160,679
Due to other funds 123,349 - - 1,578,360 504,462 150,466 2,356,637 Total liabilities 146,975 895,328 - 1,668,523 509,893 206,513 3,427,232
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues 2,314,254 - - - 300,329 56,727 2,671,310 Total deferred inflows of resources - 2,314,254 - - 300,329 56,727 2,671,310
FUND BALANCES
Nonspendable:
Prepaid expenses - - - 15,478 - - 15,478
Restricted for:
Public safety - - - - - 747,066 747,066
Parks and recreation - - - - - 12,691 12,691
Subdivision infrastructure - - 89,983,268 - - - 89,983,268 Community development - - - - - 1,695,773 1,695,773
Assigned for:
Community development - - - - - 4,618 4,618
Parsac insurance 100,000 - - - - 100,000 -
Unassigned 5,650,100 (70,316) - (1,628,025) (475,376) (150,466) 3,325,917 Total fund balances (deficits) 5,750,100 (70,316) 89,983,268 (1,612,547) (475,376) 2,309,682 95,884,811 Total liabilities, deferred inflows of resources,
and fund balances (deficits) 6,645,428 $ 2,390,913 $ 89,983,268 $ 55,976 $ 334,846 $ 2,572,922 $ 101,983,353 $ Special Revenue Funds
The accompanying notes are an integral part of these financial statements. 8 CITY OF CALIFORNIA CITY
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF NET POSITION
JUNE 30, 2020
Total fund balances - governmental funds 95,884,811 $
26,774,084
2,671,310
Deferred outflows of resources 3,539,040
Deferred inflows of resources (801,908)
Capital leases (621,943)
Compensated absences (719,309)
Net pension liability (12,198,467)
(1,032)
Net position of governmental activities $ 114,526,586
Accrued interest payable for the current portion of interest due on bonds has not been reported in the governmental funds.
Amounts reported for governmental activities in the statement of net position are different because:
Capital assets used in governmental activities are not current financial resources and, therefore, are not reported in governmental funds.
Under the modified accrual basis of accounting used in
governmental funds, revenues are not recognized for transactions that do not represent available financial resources. In the statement of net position and statement of activities, however, revenues are reported regardless of when the financial resources are available.
In governmental funds, deferred outflows and inflows of resources relating to pensions 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 are reported.
Only current liabilities are recorded in the governmental funds balance sheet. In the statement of net position, all liabilities, including long-term liabilities, are reported. Long-term liabilities relating to governmental activities consist of:
The accompanying notes are an integral part of these financial statements. 9 CITY OF CALIFORNIA CITY
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2020
Special Revenue Funds
Subdivision Public Nonmajor Total
Street Deferred Safety OHV Governmental Governmental
General Maintenance Improvement Services Grant Funds Funds
REVENUES
Taxes 3,081,539 $ - $ - $ 7,133,744 $ - $ 192,945 $ 10,408,228 $ Licenses and permits 719,596 - - 11,980 - - 731,576
Intergovernmental 682,751 643,628 - 96 915,707 100,000 2,342,182 Charges for services 413,930 - - 43,145 - 347,243 804,318 Fines and forfeitures 11,324 - - 28,800 - - 40,124
Use of money and property 72,300 6,204 2,010,276 112 - 6,306 2,095,198 Miscellaneous - 124,032 - 65,140 - 18,112 207,284
Total revenues 5,105,472 649,832 2,010,276 7,283,017 915,707 664,606 16,628,910
EXPENDITURES
Current:
General government 2,386,419 - - - - - 2,386,419
Public safety - - - 7,468,339 442,992 84,985 7,996,316
Parks and recreation 1,604,026 - - - - 5,340 1,609,366
Public works 1,199,796 943,733 27,694 - - - 2,171,223
Community development - - - - - 501,848 501,848
Capital outlay 10,106 368,038 - 946,747 - 25,332 1,350,223 Debt service:
Principal 40,256 41,379 - 441,105 - - 522,740
Interest 2,673 7,275 - 1,765 - - 11,713
Total expenditures 5,243,276 1,360,425 27,694 8,857,956 442,992 617,505 16,549,848 (710,593) (137,804) 1,982,582 (1,574,939) 472,715 47,101 79,062
OTHER FINANCING SOURCES (USES)
Proceeds from loans 226,118 - - 793,895 - - 1,020,013
Total other financing sources (uses) - 226,118 - 793,895 - - 1,020,013 Net change in fund balances (484,475) (137,804) 1,982,582 (781,044) 472,715 47,101 1,099,075 Fund balances (deficits) - beginning (restated) 5,887,904 414,159 88,000,686 (831,503) (948,091) 2,262,581 94,785,736 Fund balances (deficits) - ending 5,750,100 $ (70,316) $ 89,983,268 $ (1,612,547) $ (475,376) $ 2,309,682 $ 95,884,811 $ Excess (deficiency) of revenues over
(under) expenditures
The accompanying notes are an integral part of these financial statements. 10 CITY OF CALIFORNIA CITY
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2020
Amounts reported for governmental activities in the statement of activities are different because:
Net change in fund balances - total governmental funds 1,099,075 $ Capital outlay 1,306,283
Depreciation expense (1,507,998)
Gains and/or losses on disposals (56,762)
602,274
Capital leases (1,020,013)
Capital leases 522,740
(432)
(4,719)
(527,918)
Change in net position of governmental activities $ 412,530 In governmental funds, pension costs are recognized when employer contributions are made. In the statement of activities, pension costs are recognized on the accrual basis.
Governmental funds report capital outlays as expenditures. However, in the statement of activities, the costs of those capital assets are allocated over their estimated useful lives as depreciation expense. Additionally, the net effect of various transactions is not reported in the governmental funds.
Certain revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the governmental funds.
Proceeds from the issuance of long-term debt provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the statement of net position.
Repayment of long-term debt is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net position.
Accrued interest for long-term liabilities. This is the net change in accrued interest for the current period.
Compensated absence expenditures reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in a government fund.
The accompanying notes are an integral part of these financial statements. 11 CITY OF CALIFORNIA CITY
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
JUNE 30, 2020
Water Sewer Airport Dial-a-Ride Total
ASSETS
Current:
Cash and investments 8,657,987 $ 3,184,362 $ - $ - $ 11,842,349 $ Receivables:
Interest 18,531 5,411 - - 23,942
Accounts 481,027 148,073 26,348 40 655,488
Intergovernmental - - 29,654 1,042,138 1,071,792
Inventory - - 41,122 - 41,122
Prepaid expenses - 2,115 - - 2,115
Total current assets 3,339,961 9,157,545 97,124 1,042,178 13,636,808 Noncurrent:
Capital assets:
Nondepreciable 669,501 17,826 332,285 - 1,019,612
Depreciable, net of accumulated depreciation 6,167,642 1,729,336 3,973,778 33,266 11,904,022 Total noncurrent assets 1,747,162 6,837,143 4,306,063 33,266 12,923,634 Total assets 5,087,123 15,994,688 4,403,187 1,075,444 26,560,442
DEFERRED OUTFLOWS OF RESOURCES
Pension deferrals 530,571 192,003 84,125 120,269 926,968 Total deferred outflows of resources 192,003 530,571 84,125 120,269 926,968
LIABILITIES
Current liabilities:
Accounts payable 99,373 122,672 14,339 1,435 237,819
Accrued interest 7,657 291 - - 7,948
Deposits payable - 186,750 - - 186,750
Due to other funds - - 1,113,534 709,842 1,823,376
Current portion of compensated absences 20,084 62,555 13,100 18,354 114,093 Current portion of long-term debt 32,434 64,911 - - 97,345 Total current liabilities 404,702 192,025 1,140,973 729,631 2,467,331 Noncurrent:
Compensated absences 61,908 38,529 3,300 12,185 115,922 Long-term debt 37,838 1,207,714 - - 1,245,552
Net pension liability 1,883,732 681,078 287,903 421,088 3,273,801 Total noncurrent liabilities 1,927,321 1,983,478 291,203 433,273 4,635,275 Total liabilities 2,119,346 2,388,180 1,432,176 1,162,904 7,102,606
DEFERRED INFLOWS OF RESOURCES
Pension deferrals 138,796 52,442 25,169 33,063 249,470
Total deferred inflows of resources 52,442 138,796 25,169 33,063 249,470
NET POSITION
Net investment in capital assets 6,766,871 474,537 4,306,063 33,266 11,580,737 Unrestricted 2,632,801 7,231,412 (1,276,096) (33,520) 8,554,597 Total net position $ 3,107,338 13,998,283 $ 3,029,967 $ (254) $ 20,135,334 $ Business-Type Activities - Enterprise Funds
The accompanying notes are an integral part of these financial statements. 12 CITY OF CALIFORNIA CITY
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2020
Water Sewer Airport Dial-a-Ride Total
Operating Revenues:
Sales and service charges $ 1,991,746 6,791,225 $ 150,415 $ 18,476 $ 8,951,862 $ Miscellaneous - 1,070 - - 1,070
Total operating revenues 6,792,295 1,991,746 150,415 18,476 8,952,932 Operating Expenses:
Administration and general 76,608 917,358 306,767 353,963 1,654,696 Transmission/collection - 3,590,146 - - 3,590,146
Treatment 1,076,971 - - - 1,076,971
Depreciation expense 177,264 395,049 301,329 2,821 876,463 Bad debt 98,773 321,521 - - 420,294
Total operating expenses 5,224,074 1,429,616 608,096 356,784 7,618,570 Operating income (loss) 1,568,221 562,130 (457,681) (338,308) 1,334,362 Nonoperating Revenues (Expenses):
Intergovernmental - - 81,660 351,968 433,628
Interest revenue 226,698 50,389 - - 277,087
Interest expense (39,409) (149,778) - - (189,187)
Gain (loss) on disposal of capital assets - (2,504) (661) (1,207) (4,372) Total nonoperating revenues (expenses) 74,416 10,980 80,999 350,761 517,156 Changes in net position 1,642,637 573,110 (376,682) 12,453 1,851,518 Net position - beginning (restated) 2,534,228 12,355,646 3,406,649 (12,707) 18,283,816 Net position - ending (deficit) $ 3,107,338 13,998,283 $ 3,029,967 $ (254) $ 20,135,334 $ Business-Type Activities - Enterprise Funds
The accompanying notes are an integral part of these financial statements. 13 CITY OF CALIFORNIA CITY
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2020
Water Sewer Airport Dial-a-Ride Total
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers and users 6,683,997 $ 1,953,082 $ 145,613 $ 18,505 $ 8,801,197 $ Payments to suppliers 8,115,534 11,707,750 12,459,591 12,412,687 44,695,562 Payments to or on behalf of employees for services (12,354,146) (12,673,435) (12,811,448) (12,735,698) (50,574,727) Cash received from other operating revenues 1,070 - - - 1,070 Net cash provided by (used for) operating activities 987,397 2,446,455 (206,244) (304,506) 2,923,102
CASH FLOWS FROM NONCAPITAL FINANCING
ACTIVITIES
Grants received - - 81,660 - 81,660
(Loans) repayments to/from other funds - - 185,482 316,106 501,588 Net cash provided by (used for) by noncapital financing activ - - 267,142 316,106 583,248
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Grants received 110,697 - 901 - 111,598
Acquisition of capital assets (235,386) (202,835) (57,785) (11,600) (507,606) Proceeds from debt issuance 98,632 - - - 98,632
Principal paid on capital debt (4,272,304) (65,930) - - (4,338,234) Interest paid on capital debt (209,610) (47,181) (4,014) - (260,805) Net cash provided by (used for) by capital and related
financing activities (4,507,971) (315,946) (60,898) (11,600) (4,896,415)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received 256,349 55,823 - - 312,172
Net cash provided by (used for) by investing activities 256,349 55,823 - - 312,172 Net increase (decrease) in cash and cash equivalents (1,805,167) 727,274 - - (1,077,893) Cash and cash equivalents, July 1 (restated) 10,463,154 2,457,088 - - 12,920,242 Cash and cash equivalents, June 30 8,657,987 $ 3,184,362 $ - $ - $ 11,842,349 $ Reconciliation of Operating Income (Loss) to net cash
Provided by (used for) by Operating Activities
Operating income (loss) 1,568,221 $ 562,130 $ (457,681) $ (338,308) $ 1,334,362 $ Adjustments to reconcile operating income (loss) to
net cash provided by (used for) by operating activities Depreciation 395,049 177,264 301,329 2,821 876,463
Changes in assets and liabilities:
(Increase) decrease in accounts receivable 197,702 60,109 (4,802) 29 253,038 (Increase) decrease in inventories - - (1,071) - (1,071) (Increase) decrease in prepaid expense 2,958 11,970 10,858 26 25,812 (Increase) decrease in deferred outflows for pensions (60,835) (553) 32,799 8,134 (20,455) Increase (decrease) in accounts payable (151,116) 78,163 (14,625) (4,572) (92,150) Increase (decrease) in deposits payable 16,591 - - - 16,591 Increase (decrease) in compensated absences 39,470 21,153 2,890 2,904 66,417 Increase (decrease) in deferred inflows for pensions 427,790 77,618 (69,590) 26,166 461,984 Increase (decrease) in net pension liability 10,625 (457) (6,351) (1,706) 2,111 Net cash provided by (used for) by operating activities 2,446,455 $ 987,397 $ (206,244) $ (304,506) $ 2,923,102 $ Business-Type Activities - Enterprise Funds
The accompanying notes are an integral part of these financial statements. 14 CITY OF CALIFORNIA CITY
STATEMENT OF NET POSITION
FIDUCIARY FUNDS
JUNE 30, 2020
California City
Redevelopment
Successor Agency
Private Purpose
Trust Fund Custodial Fund
ASSETS
Cash $ 781,928 1,277,286 $
Restricted investments with fiscal agents - 23
Notes receivable - 173,000
Allowance -notes receivable - (173,000)
Land held for resale - 6,245,414
Total assets 7,522,723 781,928
DEFERRED OUTFLOWS
Deferred loss on refunding - 185,322
LIABILITIES
Due to other governments 125,000 781,928
Due to the General Fund 511,767 -
Interest payable 103,204 -
Unearned revenue 4,000 -
Advance from the Housing Authority 985,000 -
Noncurrent liabilities:
Long-term debt, due within one year - 465,332
Long-term debt, due in more than one year - 28,127,766
Total liabilities 781,928 30,322,069
NET POSITION (DEFICIT)
$ - (22,614,024) $
Net position held in trust for the retirement of
obligations of the California City Successor Agency
to the former California City Redevelopment Agency
The accompanying notes are an integral part of these financial statements. 15 CITY OF CALIFORNIA CITY
STATEMENT OF CHANGES IN NET POSITION
FIDUCIARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2020
California City
Redevelopment
Successor Agency
Private Purpose
Trust Fund Custodial Fund
ADDITIONS
Tax increment $ - 840,225 $
Investment earnings:
Rental income 48,040 -
Net investment earnings 48,040 -
Collections on behalf of other governments:
Impact fees - 371,431
Total collections on behalf of other governments - 371,431 Total additions 888,265 371,431
DEDUCTIONS
Administrative costs - 199,848
Interest on long-term debt - 329,590
Payments to other governments 371,431 -
Total deductions 529,438 371,431
Change in net position 358,827 -
Net position - beginning (22,972,851) -
Net position - ending (22,614,024) $ - $
CITY OF CALIFORNIA CITY
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
16 NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Description of the Reporting Entity
The City of California City (the “City”) was incorporated in December 1965, under the laws of the State of California and enjoys all the rights and privileges applicable to a general law City. As required by accounting principles generally accepted in the United States of America, these financial statements present the City of California (the primary government) and its component units. The blended component units discussed below are included in the City’s reporting entity because of the significance of their operational or financial relationship to the City.
Blended Component Units
The California City Community Services District is a subsidiary of California City and a detached area within City boundaries from the County service area. As a subsidiary district, the City Council of the City of California City now serves as the District’s governing board of directors. Separate financial statements are not prepared for the District.
The Industrial Development Authority was established for the purpose of issuing debt. Separate financial statements are not prepared by the Authority.
The California City Financing Authority was created for the purpose of assisting in the financing and refinancing of certain redevelopment activities of the Authority and certain public programs and projects of the City and for the purpose of aiding in the financing and refinancing of public capital improvements.
Separate financial statements are not prepared for the Authority.
The California City Housing Authority was created for the purpose of managing the housing assets of the former California City Redevelopment Agency after its dissolution on February 1, 2012 due to ABx1 26.
Separate financial statements are not prepared for the Authority.
Although these component units are legally separate from the City of California City, they are reported as if they were part of the primary government because the governing boards of these component units are the same as the primary government. Furthermore, the purpose of these component units is to provide a safe and more efficient service for the residents of California City.
B. Government-Wide and Fund Financial Statements
The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the non-fiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from the business-type activities, which rely to a significant extent on fees and charges for support.
The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include: 1) charges to customers or applicants who purchase, use or directly benefit from goods, services or privileges provided by a given function or segment, and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues.
Separate financial statements are provided for governmental funds, proprietary funds and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds are reported as separate columns in the fund financial statements.
CITY OF CALIFORNIA CITY
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
17 NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Measurement Focus, Basis of Accounting and Financial Statement Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Most revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers non-grant related revenues to be available if they are collected within 60 days of the end of the current fiscal period. However, grant revenues are recognized when measurable regardless of availability.
Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when the payment is due.
The City’s fiduciary fund financial statements only report private-purpose trust funds. Trust funds are to account for the funds of the Successor Agency of the California City Redevelopment Agency. Private-purpose trust funds use the full accrual method of accounting and the economic resources measurement focus.
Property taxes, franchise taxes, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the government.
The City reports the following major governmental funds:
The General Fund is the government’s primary operating fund. It is used to account for all financial resources of the general government, except those required to be accounted for in another fund. The Street Maintenance Fund is used to account for the general upkeep and repair of street pavement and street related capital projects within the City.
The Subdivision Deferred Improvement Fund is used to account for funds dedicated to water and street infrastructure within certain land tracts.
The Public Safety Services Fund accounts for voter approved special tax (Measure A). The Measure A or Special Tax of $150 per year, per property parcel would pay for salaries, equipment and other needs for both the Police and Fire departments for six years beginning July 1, 2012. The OHV Grant Fund is used to account for the Off-Highway Division Grants Program, which is an annual program that provides for well managed off-highway vehicle (OHV) recreation in the State of California through financial assistance to develop, maintain, operate, expand, support, and contribute to well-managed high-quality OHV recreation areas, roads, trails, and amenities.
CITY OF CALIFORNIA CITY
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
18 NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Measurement Focus, Basis of Accounting and Financial Statement Presentation (Continued) The City reports the following major proprietary funds:
The Water Fund is used to account for the operations of the City’s water utility, a self-supporting activity which is entirely financed through user charges. The costs of providing these services to the general public on a continuing basis are financed or recovered primarily through user charges. The Sewer Fund is used to account for the operations of the City’s sewer distribution lines, which are operated in a manner similar to a private enterprise. The costs of providing these services to the general public on a continuing basis are financed or recovered primarily through user charges. The Airport Fund is used to account for the operations of maintaining and operating the California City Airport. The costs of providing these services to the users of the airport are through user charges, rental fees, and grants provided by the Federal Aviation Administration. The Dial-a-Ride Fund is used to account for the operations of the City’s transit service which provides transit services to the Citizens of the City. The costs for providing these services are financed partially by user fees, but primarily through grant revenue, Transportation Development Act revenue, and subsidies provided by the General Fund.
Additionally, the City reports the following fiduciary funds:
The California City Redevelopment Successor Agency Private Purpose Trust Fund is used to account for assets and liabilities of the former redevelopment agency until they are distributed to other units of state and local governments as a result of the dissolution of the redevelopment agency. The Custodial Fund is used to account for assets held by the City as a custodian for the collection and distribution of impact fees on behalf of Mojave Unified School District and the Antelope Valley-East Kern Water Agency.
As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this rule are charges between the government’s proprietary fund’s function and various other functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned.
Amounts reported as program revenues include: 1) charges to customers or applicants for goods, services or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes.
Proprietary funds distinguish operating revenues and expenses from nonoperating 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 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 nonoperating revenues and expenses.
When both restricted and unrestricted resources are available for use, it is the government’s policy to use restricted resources first, then unrestricted resources as they are needed.
CITY OF CALIFORNIA CITY
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
19 NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities, Deferred Outflows/Inflows, and Net Position/Fund Balance Cash and Investments
The City’s cash and cash equivalents are considered to be cash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition.
Investments for the City, as well as for its component units, are recorded at fair value. The City’s policy is generally to hold investments until maturity or until market values equal or exceed cost. The State Treasurer’s Investment Pool operates in accordance with appropriate state laws and regulations. The reported value of the pool is the same as the fair value of the pool shares.
Receivables and Payables
Activities between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either “due to/from other funds” (i.e., the current portion of interfund loans) or “advances to/from other funds” (i.e., the noncurrent portion of interfund loans).
Property Tax Calendar
Property tax revenue is recognized in the fiscal year for which the taxes have been levied providing they become available. Available means when due or past due and receivable within the current period and collected within the current period or expected to be collected soon enough thereafter (not to exceed 60 days), to be used to pay liabilities of the current period. The County of Kern collects property taxes for the City. Tax liens attach annually as of 12:01 AM on the first day in January proceeding the fiscal year for which the taxes are levied. The tax levy covers the fiscal period July 1 to June 30. All secured personal property taxes and one half of the taxes on real property are due November 1: the second installment is due March 1. All taxes are delinquent, if unpaid, on December 10 and April 10, respectively. Unsecured personal property taxes become due on January 1 each year and are delinquent on August 31.
Prepaid Expenses
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements.
Capital Assets
Capital assets, which include property, plant, equipment, intangible and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items) are reported in the governmental activities column in the government-wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of more than $5,000 (amount not rounded) and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair value at the date of the donation.
In accordance with GASB Statement No. 34, the City has reported general infrastructure assets and, as permitted under GASB Statement No. 34, the City will not report any infrastructure assets retroactively.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized.
Major outlays for capital assets and improvements are capitalized as projects are constructed.
CITY OF CALIFORNIA CITY
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
20 NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities, Deferred Outflows/Inflows, and Net Position/Fund Balance (Continued) Capital Assets (Continued)
Property, plant and equipment of the City are depreciated using the straight-line method over the following estimated useful lives:
Assets Years
Buildings and structures 20-50
Improvements other than buildings 10-100
Machinery and equipment 3-10
Water rights 50
Furniture and fixtures 3-20
Source of supply 20-50
Transmissions 25
Water treatment 10
Compensated Absences
The City’s policy permits employees to accumulate earned but unused vacation and sick pay benefits. The total amount of liability for unused vacation and sick pay benefits is accrued when incurred in the government-wide financial statements. The unused reimbursable leave still outstanding following an employee’s resignation or retirement is reflected as a current liability in the General Fund since it is expected to be paid with expendable available financial resources.
For proprietary funds, the liability for compensated absences is segregated between short-term and long-term in the fund from which the liability will be paid.
Vacation pay is payable to employees at the time a vacation is taken or upon termination of employment. Sick leave is payable when an employee is unable to work because of illness. Upon termination an employee will be paid for one-half of any unused sick leave. The vested portion of these compensated absences is accrued at June 30, 2020.
Unearned Revenue
Under both the accrual and modified accrual basis of accounting, revenues are recognized only when earned.
Assets recognized before the earning process is complete are offset by a corresponding liability as unearned revenue. Under the modified accrual basis of accounting, revenue is recognized when earned and susceptible to accrual. Revenues are considered susceptible to accrual if they are measurable and available to finance expenditures of the current period. Thus, governmental funds also defer revenue recognition for revenues not considered available to liquidate liabilities of the current period.
Unavailable Revenue
In the fund financial statements, unavailable revenue is recorded when transactions have not yet met the revenue recognition criteria based on the modified accrual basis of accounting. The City records unavailable revenue for transactions for which revenues have been earned, but for which funds are not available to meet current financial obligations. Transactions for which unavailable revenue is recorded include non-grant related governmental revenues that are measureable but are not collected within 60 days of the end of the fiscal year.
CITY OF CALIFORNIA CITY
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
21 NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities, Deferred Outflows/Inflows, and Net Position/Fund Balance (Continued) Long-Term Obligations
In the government-wide financial statements, long-term debt and other long-term obligations are reported as liabilities in the governmental activities statement of net position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as expenditures in the current period.
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 issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.
Fund Balance/Net Position
In the fund financial statements with the implementation of GASB Statement No. 54, governmental funds report fund balance as either nonspendable fund balance, restricted fund balance, committed fund balance, assigned fund balance, or unassigned fund balance. The following is a description of each type of fund balance classification:
Nonspendable includes amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact.
Restricted includes amounts that are constrained on the use of resources by either (a) external creditors, grantors, contributors, or laws or regulations of other governments or (b) by law through constitutional provisions or enabling legislation.
Committed includes amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the City Council. The formal action that is required to be taken to establish, modify, or rescind a fund balance commitment is a Council’s resolution or ordinance.
Assigned includes amounts that are constrained by the government’s intent to be used for specific purposes but are neither restricted nor committed.
Unassigned includes the residual amounts that have not been restricted, committed, or assigned to specific purposes.
An individual governmental fund could include nonspendable resources and amounts that are restricted or committed, assigned, or unassigned or any combination of those classifications. Restricted amounts are to be considered spent when an expenditure is incurred for purposes for which restricted fund balance is available and committed, assigned, then unassigned amounts are considered to have been spent when an expenditure is incurred for purposes for which amounts in any of those unrestricted fund balance classifications can be used.
CITY OF CALIFORNIA CITY
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
22 NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities, Deferred Outflows/Inflows, and Net Position/Fund Balance (Continued) Fund Balance/Net Position (Continued)
In the government-wide financial statements, proprietary fund financial statements, and private-purpose trust fund financial statements, net position is classified as either net investment in capital assets, restricted, or unrestricted.
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 debit issued to finance these assets.
Restricted net position describes the portion of net position which is restricted as to use by the terms and conditions of agreements with outside parties, governmental regulations, laws, or other restrictions, and which the City cannot unilaterally alter. These principally include debt service requirements, capital projects, and deferred improvement funds restricted to low and moderate income housing purposes. Unrestricted net position describes the portion of net position which is not restricted as to use.
When both restricted and unrestricted net position are available, restricted resources are depleted first before the unrestricted resources are used.
E. Pensions
In government-wide financial statements, pensions are recognized and disclosed using the accrual basis of accounting (see Note 7 and the RSI section immediately following the notes to the financial statements), regardless of the amount recognized as pension expenditures on the modified accrual basis of accounting. The City recognizes a net pension liability of the qualified pension plan in which it participates, which represents the excess of the total pension liability over the fiduciary net position of the qualified pension plan, measured as of the City’s fiscal year-end or the City’s proportionate share thereof in the case of a cost-sharing multipleemployer plan.
Changes in the net pension liability during the period are recorded as pension expense, or as deferred inflows of resources or deferred outflows of resources depending on the nature of the change, in the period incurred.
Those changes in net pension liability that are recorded as deferred inflows of resources or deferred outflows of resources that arise from changes in actuarial assumptions or other inputs and differences between expected or actual experience are amortized over the weighted average remaining service life of all participants including retirees, in the respective qualified pension plan and recorded as a component of pension expense beginning with the period in which they arose.
Projected earnings on qualified pension plan investments are recognized as a component of pension expense.
Differences between projected and actual investment earnings are reported as deferred inflows of resources or deferred outflows of resources and amortized as a component of pension expense on a closed basis over a five-year period beginning with the period in which the difference occurred.
For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the City of California City California Public Employees’ Retirement System (CalPERS) plan (Plan) and additions to/deductions from the Plan’s fiduciary net position have been determined on the same basis as they are reported by CalPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.
CITY OF CALIFORNIA CITY
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
23 NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) F. Grant Revenues
Certain grant revenues are recognized when specific related expenditures have been incurred. In other grant programs, monies are virtually unrestricted as to purpose of expenditure and are only revocable for failure to comply with prescribed compliance requirements. These revenues are recognized at the time of receipt, or earlier if susceptible to accrual criteria are met. Cash received prior to incurrence of the related expenditure is recorded as unearned revenue.
G. Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
NOTE 2 – STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
A. Budgetary Data
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 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 Finance Director, City Manager, and the City Council. In most cases expenditures may not exceed appropriations at the function level.
At fiscal year-end all operating budget appropriations lapse.
Encumbrances
The City does not utilize encumbrance accounting.
CITY OF CALIFORNIA CITY
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
24 NOTE 2 – STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY (Continued) B. Expenditures Over Appropriations
Governmental Funds Expenditures Appropriations Excess
Major Funds:
General Fund:
Current:
General government 2,386,419 $ 2,242,161 $ (144,258) $
Parks and recreation 1,604,026 1,341,265 (262,761)
Public works 1,199,796 1,157,808 (41,988)
Debt service:
Principal 40,256 - (40,256)
Interest 2,673 - (2,673)
Street Maintenance Fund
Current:
Public works 943,733 $ 708,849 $ (234,884) $
Capital outlay 368,038 20,000 (348,038)
Debt service:
Principal 41,379 - (41,379)
Interest 7,275 - (7,275)
Public Safety Services Fund:
Current:
Public safety 7,468,339 $ 7,287,920 $ (180,419) $
Capital outlay 946,747 - (946,747)
Debt service:
Principal 441,105 244,396 (196,709)
Interest 1,765 - (1,765)
C. Deficit Fund Balances
Amount
Governmental Funds
Major Funds:
Street Maintenance Special Revenue Fund 70,316 $
Public Safety Services Special Revenue Fund 1,612,547
OHV Grant Fund 475,376
Nonmajor Funds:
COPS Recovery Fund 150,466
The City expects to eliminate these deficits through future revenues and/or transfers from the General Fund.
CITY OF CALIFORNIA CITY
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
25 NOTE 3 – CASH AND INVESTMENTS
The City maintains a cash and investment pool for all funds. Certain restricted funds, which are held and invested by independent outside custodians through contractual agreements, are not pooled. Cash and investments as of June 30, 2020 are classified in the accompanying financial statements as follows:
Statement of Net Position:
Cash and investments 14,801,667 $
Restricted cash and investments 89,584,835
Statement of Net Position - Fiduciary Funds:
Cash 2,059,214
Restricted investments with fiscal agents 23
Total 106,445,739 $
Cash and investments as of June 30, 2020 consist of the following:
Cash on hand 850 $
Deposits with financial institutions 4,830,317
Investments 101,614,572
Total $ 106,445,739
Investments Authorized by the California Government Code and the City’s Investment Policy The following table identifies the investment types that are authorized for the City by the California Government Code (or the City’s investment policy, where more restrictive). The table also identifies certain provisions of the California Government Code (or the City’s investment policy, where more restrictive) that address interest rate risk, credit risk, and concentration of credit risk.
This table does not address investments of debt proceeds held by bond trustee 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.
The investment policy seeks to generate consistent returns by focusing on preservation of capital and risk management. It seeks to achieve above-benchmark returns consistently throughout market cycles with low volatility relative to its benchmark (5-year treasury note). This strategy focuses on active duration management, sector selection, and term structure positioning.
CITY OF CALIFORNIA CITY
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
26 NOTE 3 – CASH AND INVESTMENTS (Continued)
Investments Authorized by the California Government Code and the City’s Investment Policy (Continued) Maximum Maximum
Authorized Maximum Percentage Investment
Investment Type Maturity of Portfolio in One Issuer
Local Agency Bonds 5 Years None 5%
U.S. Treasury Obligations 5 years None None
State Obligations 5 years None 5%
CA Local Agency Obligations 5 years None None
US Agency Obligations 5 years None None
Bankers Acceptances 180 days 30% 5%
Negotiable Certificates of Deposit 5 years 30% 5%
Non-negotiable Certificates of Deposit 5 years None 5%
Repurchase Agreements 1 Year None 5%
Reverse Repurchase Agreement and Securities
Lending Agreements 92 days
20% of base value of
the portfolio None
Medium-Term Notes 5 years 30% 5%
Mutual Funds and Money Market Mutual Funds N/A 20% 5%
Collateralized Bank Deposits 5 years None 5%
Mortgage Pass-Through Securities 5 years 20% 5%
Time Deposits 5 years None 5%
County Pooled Investment Funds N/A None None
Local Agency Investment Fund (LAIF) N/A None None
Investments Authorized by Debt Agreements
Investments 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 trustee. The table also identifies certain provisions of these debt agreements that address interest rate risk, credit risk, and concentration of credit risk.
Minimum
Authorized Maximum Credit
Investment Type Maturity Quality
U.S. Agency Obligations None None
U.S. Agency Sponsored Obligations None None
Banker's Acceptance Notes 360 days A-1
Certificates of Deposits 360 days A-1
Commercial Paper 270 days A-1
Money Market Funds N/A AAAm
Municipal Obligations None AAAm
State Obligations None A
Investment Agreements None A
Local Agency Investment Fund N/A None
CITY OF CALIFORNIA CITY
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
27 NOTE 3 – CASH AND INVESTMENTS (Continued)
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 short-term and long-term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturing evenly over time as necessary to provide the cash flows 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 13-24 25-36 37-48 49-60
Investment Type Totals or Less Months Months Months Months State Investment Pool 7,242,997 $ 7,242,997 $ - $ - $ - $ - $ Kern County Investment Pool 4,278,681 4,278,681 - - - - Money Market Funds 34,327,844 34,327,844 - - - -
Certificates of Deposit 481,053 1,259,573 - 256,589 259,837 262,094 U.S. Government Agency Issues 54,505,477 54,505,477 - - - - Total 101,614,572 $ 100,836,052 $ - $ 256,589 $ 259,837 $ 262,094 $ Investments with Fair Values Highly Sensitive to Interest Rate Fluctuations The City has no investments (including investments held by bond trustee) that are highly sensitive to interest rate fluctuations (to a greater degree than already indicated in the information provided above).
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 as of the fiscal year-end and for each investment type.
Maximum
Legal Not
Investment Type Amount Rating AA+ Rated
State Investment Pool 7,242,997 $ N/A - $ 7,242,997 $
Kern County Investment Pool 4,278,681 N/A - 4,278,681
Money Market Funds 34,327,844 N/A - 34,327,844
Certificates of Deposit 1,259,573 N/A - 1,259,573
U.S. Government Agency Issues 54,505,477 N/A - 54,505,477 Total $ 101,614,572 54,505,477 $ 47,109,095 $
CITY OF CALIFORNIA CITY
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
28 NOTE 3 – CASH AND INVESTMENTS (Continued)
Concentration of Credit Risk
Concentration of credit risk is the risk that the failure of any one issuer would place an undue financial burden on the City. The investment policy of the City has stipulations that limit the investment in any one issuer 5% for total investments. However, an exception to this policy has been made for investments in U.S. Treasuries and U.S. Agency Obligations, which have no limits place on the amount that can be invested in one issuer. As of June 30, 2020, the City did not have any investments in one issuer other than those noted as being exceptions to the policy that exceeded 5% of the City total investments.
Custodial Credit Risk
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., broker-dealer) 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 governmental 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, 2020, none of the City’s deposits with financial institutions in excess of federal depository insurance limits were held in non-collateralized 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. 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 balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded at fair market value.
Investment in County Investment Pool
The City is a voluntary participant in the County of Kern Investment Pool (CKIP) that is regulated by the California Government Code under the oversight of the Treasurer of the County of Kern. 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 CKIP for the entire CKIP portfolio. The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded at fair market value.
CITY OF CALIFORNIA CITY
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
29 NOTE 3 – CASH AND INVESTMENTS (Continued)
Fair Value Hierarchy
Investments, including derivative instruments that are not hedging derivatives, are measured at fair value on a recurring basis. Recurring fair value measurements are those that Government Accounting Standards Board (GASB) statements require or permit in the statement of net position at the end of each reporting period. Fair value measurements are categorized based on the valuation inputs used to measure an asset’s fair value:
Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; and Level 3 inputs are significant unobservable inputs. The City has the following recurring fair value measurements as of June 30, 2020:
Level 2
Investments by Fair Value Level Amount Inputs
Certificates of Deposit 1,259,573 $ 1,259,573 $
U.S. Government Agency Issues 54,505,477 54,505,477
55,765,050 $ 55,765,050
Money Market Fund 34,327,844
State Investment Pool 7,242,997
Kern County Investment Pool 4,278,681
45,849,522
Total Investments $ 101,614,572
Unclassified Investments
Certificates of deposits are valued based on the rates currently offered for deposits of similar remaining maturities. U.S. Government Agency Issues are valued using a matrix pricing technique that values securities based on their relationship to benchmark quoted prices.
CITY OF CALIFORNIA CITY
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
30 NOTE 4 – CAPITAL ASSETS
Capital assets activity of the governmental activities for the year ended June 30, 2020 as follows:
Balance at Balance at
Governmental Activities: June 30, 2019 Increases Decreases Transfers June 30, 2020 Capital assets not being depreciated:
Land 2,380,797 $ - $ - $ - $ 2,380,797 $
Construction in progress 134,042 226,098 (12,360) - 347,780 Total 2,606,895 134,042 (12,360) - 2,728,577
Depreciable capital assets:
Buildings and structures 13,615,856 - (38,459) - 13,577,397 Improvements other than buildings 22,517,003 - (115,913) - 22,401,090 Equipment and vehicles 5,785,898 1,184,601 (1,293,060) 29,424 5,706,863 Furniture and fixtures - 29,155 (29,155) - -
Total 41,947,912 1,184,601 (1,476,587) 29,424 41,685,350 Less accumulated depreciation for:
Buildings and structures (4,907,134) (345,366) 22,784 - (5,229,716) Improvements other than buildings (7,982,099) (824,630) 98,508 - (8,708,221) Equipment and vehicles (4,606,138) (337,768) 1,271,424 (29,424) (3,701,906) Furniture and fixtures (234) (26,875) 27,109 - -
Total (1,507,998) (17,522,246) 1,419,825 (29,424) (17,639,843) Total capital assets being
depreciated, net 24,425,666 (323,397) (56,762) - 24,045,507 Governmental activities capital assets, net $ 27,032,561 (189,355) $ (69,122) $ - $ 26,774,084 $ Depreciation expense was charged to functions/programs of the governmental activities as follows:
Governmental Activities:
General government 184,106 $
Public safety 329,080
Parks and recreation 125,612
Public works 764,084
Community development 105,116
Total depreciation expense - governmental activities 1,507,998 $
CITY OF CALIFORNIA CITY
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
31 NOTE 4 – CAPITAL ASSETS (Continued)
Capital assets activity of the business-type activities for the year ending June 30, 2020 is as follows:
Balance at
June 30, 2019 Balance at
Business-Type Activities: (Restated) Increases Decreases Transfers June 30, 2020 Capital assets not being depreciated:
Land 516,028 $ - $ - $ - $ 516,028 $
Construction in progress 366,413 177,919 (280,220) - 264,112 Water Rights 239,472 - - - 239,472
Total 1,121,913 177,919 (280,220) - 1,019,612
Depreciable capital assets:
Buildings and structures 1,166,230 - (15,840) - 1,150,390 Improvements other than buildings 29,939,928 28,220 (19,295) - 29,948,853 Equipment and vehicles 3,596,813 301,467 (166,977) (29,424) 3,701,879 Furniture and fixtures 12,808 - (12,808) - -
Source of supply 2,557,857 280,220 - - 2,838,077
Transmission 9,769,215 - (4,353) - 9,764,862
Water treatment 16,623 - - - 16,623
Total 47,059,474 609,907 (219,273) (29,424) 47,420,684
Less accumulated depreciation for:
Buildings and structures (1,132,225) (4,318) 12,996 - (1,123,547) Improvements other than buildings (18,944,016) (736,415) 19,294 - (19,661,137) Equipment and vehicles (3,004,690) (88,991) 166,658 29,424 (2,897,599) Furniture and fixtures (11,427) (174) 11,601 - -
Source of supply (2,127,267) (39,748) - - (2,167,015)
Transmission (9,648,277) (6,817) 4,353 - (9,650,741)
Water treatment (16,623) - - - (16,623)
Total (34,884,525) (876,463) 214,902 29,424 (35,516,662) Total capital assets, being
depreciated, net 12,174,949 (266,556) (4,371) - 11,904,022 Business-type activities capital assets, net 13,296,862 $ (88,637) $ (284,591) $ - $ 12,923,634 $ Depreciation expense was charged to business-type functions as follows:
Business-Type Activities:
Water $ 395,049
Sewer 177,264
Airport 301,329
Dial-a-Ride 2,821
Total depreciation expense - business-type activities 876,463 $
CITY OF CALIFORNIA CITY
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
32 NOTE 5 – INTERFUND ACTIVITY
Interfund balances for the purpose of the government-wide statements have been eliminated. The composition of interfund balances in the fund level statements as of June 30, 2020 is as follows:
A. Current Interfund Receivables/Payables
Current interfund balances are generally short-term loans to cover temporary cash deficits in various funds and are expected to be repaid shortly after the end of the fiscal year. The City’s interfund receivables and payables consisted of the following at June 30, 2020:
Due from
Other Funds
Due to
Other Funds
Governmental Funds
Major Funds:
General Fund $ - 4,691,780 $
Street Maintenance Fund 123,349 -
Public Safety Services Fund 1,578,360 -
OHV Grant Fund 504,462 -
Nonmajor Funds:
COPS Recovery Fund 150,466 -
Enterprise Funds
Nonmajor Funds:
Airport Fund 1,113,534 -
Dial-a-Ride Fund 709,842 -
Fiduciary Funds
Private-Purpose Trust Funds 511,767 -
Total $ 4,691,780 4,691,780 $
B. Long-Term Interfund Advances
Long-term advances are advances to other funds that are not expected to be repaid in one year or less. The City’s long-term interfund advances consisted of the following at June 30, 2020:
Advances to
Other Funds
Advances From
Other Funds
Governmental Funds
Nonmajor Funds:
Housing Fund 985,000 $ - $
Fiduciary Funds
Private-Purpose Trust Fund 985,000 -
Total $ 985,000 985,000 $
During the 2010-2011 fiscal year, the City’s Housing Authority loaned the City’s former redevelopment agency $985,000 to assist in the payment of its SERAF obligation in a prior year. The Successor Agency is planning on repaying the loan through tax increment revenue received by the City’s Successor Agency to the former redevelopment agency.
CITY OF CALIFORNIA CITY
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
33 NOTE 6 – LONG-TERM OBLIGATIONS
A. Governmental Activities Long-Term Debt
The following is a summary of long-term liability transactions of the City for governmental activities for the year ended June 30, 2020:
Balance Balance Due Within
July 1, 2019 Additions Repayments June 30, 2020 One Year Governmental Activities:
Direct Borrowings
Capital Leases - Vehicles 44,159 $ 793,894 $ (441,105) $ 396,948 $ 198,474 $ Capital Leases - Equipment 226,118 80,512 (81,635) 224,995 112,879 Total Direct Borrowings 1,020,012 124,671 (522,740) 621,943 311,353 Compensated Absences 552,634 714,591 (547,916) 719,309 499,000 Total $ 1,572,646 839,262 $ (1,070,656) $ 1,341,252 $ 810,353 $ Capital Leases – Vehicles
The City entered various leases for vehicles which are classified as capital leases: one fire truck and two sport utility vehicles. Interest rates range from 0% to 4% and maturity dates in June 2022. The original value of the vehicles was $967,267. The outstanding lease obligations at June 30, 2020 were $396,948. There is a provision whereby if the City is unable to make payment or does not comply with the covenants established in the lease agreement, the lender may declare the remaining principal and interest outstanding immediately due and payable or demand the return of the leased equipment.
The following is a schedule of future estimated minimum payments related for the capital leases described above:
Year Ending
June 30, Principal Interest Total
2021 198,474 $ - $ 198,474 $
2022 198,474 - 198,474
Total 396,948 $ - $ 396,948 $
Capital Leases - Vehicles
CITY OF CALIFORNIA CITY
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
34 NOTE 6 – LONG-TERM OBLIGATIONS (Continued)
A. Governmental Activities Long-Term Debt (Continued)
Capital Leases – Equipment
The City entered into various leases for equipment which are classified as capital leases: one grader and 40 golf carts. Interest rates range from 1.69% to 7.10% and maturity dates range from March 2022 to November 2022. The original value of the equipment was $387,142. The outstanding lease obligations at June 30, 2020 were $224,995.
There is a provision whereby if the City is unable to make payment or does not comply with the covenants established in the lease agreement, the lender may declare the remaining principal and interest outstanding immediately due and payable or demand the return of the leased equipment.
The following is a schedule of future estimated minimum payments related for the capital leases described above:
Year Ending
June 30, Principal Interest Total
2021 112,879 $ 13,457 $ 126,336 $
2022 77,950 5,456 83,406
2023 34,166 586 34,752
Total 224,995 $ 19,499 $ 244,494 $
Capital Leases - Equipment
B. Business-Type Activities Long-Term Debt
The following is a summary of long-term liability transactions of the City for business-type activities for the yearended June 30, 2020:
Balance Balance Due Within
July 1, 2019 Additions Repayments June 30, 2020 One Year Business-Type Activities:
Direct Borrowings
2015 Sewer Note 1,338,555 $ - $ (65,930) $ 1,272,625 $ 64,911 $ USDA Loan 4,243,944 - (4,243,944) - -
Capital Leases - Equipment 98,632 - (28,360) 70,272 32,434 Total Direct Borrowings 98,632 5,582,499 (4,338,234) 1,342,897 97,345 Compensated Absences 149,664 160,589 (80,238) 230,015 114,093 Total $ 248,296 5,743,088 $ (4,418,472) $ 1,572,912 $ 211,438 $
CITY OF CALIFORNIA CITY
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
35 NOTE 6 – LONG-TERM OBLIGATIONS (Continued)
B. Business-Type Activities Long-Term Debt (Continued)
2015 Sewer Note
On April 1, 2015, the City entered into a loan agreement with TPB Investments, Inc., a wholly owned subsidiary of Western Alliance Bank for $1,579,771, bearing interest of 3.16% and payable semi-annually on November 1 and May 1, maturing November 1, 2033. The loan proceeds were used to advance refund the 2003 lease revenue bonds which had been used to reimburse the City for costs incurred in connection with the expansion of the City’s wastewater treatment plan and related facilities. The loan is secured by a pledge and lien on net revenues of the Sewer Fund. The outstanding principal balance of the 2015 Sewer note at June 30, 2020 was $1,272,625. There is a provision whereby if the City is unable to make payment or does not comply with the covenants established in the loan agreement, the lender may declare the remaining principal and interest outstanding immediately due and payable.
The following is a schedule of future estimated minimum payments related for the 2015 Sewer Note described above:
Year Ending
June 30, Principal Interest Total
2021 64,911 $ 44,809 $ 109,720 $
2022 68,740 42,385 111,125
2023 72,350 39,825 112,175
2024 75,802 37,137 112,939
2025 79,920 34,326 114,246
2026-2030 458,675 124,411 583,086
2031-2034 33,801 452,227 486,028
Totals $ 356,694 1,272,625 $ 1,629,319 $
2015 Sewer Note
USDA Loan
During 2007-2008 fiscal year, the City drew down on a $5,000,000 loan approved by the United States Department of Agriculture to improve the City’s water distribution system. The loan, which was paid off early during the year ended June 30, 2020, bore interest of 4.25% per annum. The loan was secured by a first lien and pledge on all water system revenues, including standby fees.
CITY OF CALIFORNIA CITY
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
36 NOTE 6 – LONG-TERM OBLIGATIONS (Continued)
B. Business-Type Activities Long-Term Debt (Continued)
Capital Leases – Equipment
In August 2019, the City entered into a lease agreement for a backhoe that is classified as a capital lease. The original value of the equipment was $98,632 and includes an interest rate of 7.10% with a maturity date in July 2022.
The outstanding lease obligation at June 30, 2020 was $70,272. There is a provision whereby if the City is unable to make payment or does not comply with the covenants established in the lease agreement, the lender may declare the remaining principal and interest outstanding immediately due and payable or demand the return of the leased equipment.
The following is a schedule of future estimated minimum payments related for the capital leases described above:
Year Ending
June 30, Principal Interest Total
2021 32,434 $ 3,947 $ 36,381 $
2022 34,813 1,568 36,381
2023 3,025 7 3,032
Totals 70,272 $ 5,522 $ 75,794 $
Capital Leases - Equipment
Compensated Absences
The City’s policies relating to compensated absences are described in Note 1 of the Notes to the Basic Financial Statements. For business-type activities, the liability will be paid in future years from the governmental funds and enterprise funds, as applicable.
CITY OF CALIFORNIA CITY
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
37 NOTE 7 – EMPLOYEES RETIREMENT PLAN (DEFINED BENEFIT PLAN) A. General Information about the Pension Plan
Plan Description – All qualified permanent and probationary employees are eligible to participate in the Public Agency Cost Sharing Multiple-Employer Plan (Plan) administered by the California Public Employees’ Retirement System (CalPERS). The Plan consists of individual rate plans (benefit tiers) within a safety risk pool (police and fire) and a miscellaneous risk pool (all other.) Plan assets may be used to pay benefits for any employer rate plan of the safety and miscellaneous pools. Accordingly, rate plans within the safety or miscellaneous pools are not separate plans under GASB Statement No. 68. Individual employers may sponsor more than one rate plan in the miscellaneous or safety risk pools. The City sponsors seven rate plans (three miscellaneous and four safety.) Benefit provisions under the Plan are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plan regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.
Benefits Provided – CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full-time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for nonduty disability benefits after 10 years of service. The death benefit is one of the following: The Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost-of-living adjustments for the Plan are applied as specified by the Public Employees’ Retirement Law.
The rate plan provisions and benefits in effect at June 30, 2020 are summarized as follows:
Miscellaneous Miscellaneous Miscellaneous
1st Tier 2nd Tier PEPRA
Prior to January 1, 2011 - On or after
Hire date January 1, 2011 December 31, 2012 January 1, 2013 Benefit formula 3% @ 60 2% @ 60 2% @ 62
Benefit vesting schedule 5 years service 5 years service 5 years service Benefit payments monthly for life monthly for life monthly for life Retirement age 50 - 60 50 - 63 52 - 67
Monthly benefits, as a % of annual salary 2.0% to 3.0% 1.092% to 2.418% 1.0% to 2.5% Required employee contribution rates 8.000% 7.000% 6.250% Required employer contribution rates 14.398% 8.563% 6.985% Safety Safety Safety
1st Tier 2nd Tier PEPRA
Prior to January 1, 2011 - On or after
Hire date January 1, 2011 December 31, 2012 January 1, 2013 Benefit formula 3% @ 50 2% @ 50 2.7% @ 57
Benefit vesting schedule 5 years service 5 years service 5 years service Benefit payments monthly for life monthly for life monthly for life Retirement age 50 50 - 55 50 - 57
Monthly benefits, as a % of annual salary 3.0% 2.0% to 2.7% 2.0% to 2.7% Required employee contribution rates 9.000% 9.000% 12.000% Required employer contribution rates 21.927% 17.684% 13.034% Beginning in fiscal year 2016, CalPERS collects employer contributions for the Plan as a percentage of payroll for the normal cost portion as noted in the rates above and as a dollar amount for contributions toward the unfunded liability and side fund, if applicable. The dollar amounts are billed on a monthly basis. The City’s required contribution for the unfunded liability was $1,492,213 for the fiscal year ended June 30, 2020.
CITY OF CALIFORNIA CITY
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
38 NOTE 7 – EMPLOYEES RETIREMENT PLAN (DEFINED BENEFIT PLAN) (Continued) A. General Information about the Pension Plan (Continued) Contributions – Section 20814(c) of the California Public Employees’ Retirement Law (PERL) requires that the employer 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 City 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.
The City’s contributions to the plan that were recognized as a part of pension expense for the year ended June 30, 2020 were $1,965,332.
B. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
As of June 30, 2020, the City reported a net pension liability for its proportionate share of the net pension liability of the Plan of $15,472,268.
The City’s net pension liability for the Plan is measured as the proportionate share of the net pension liability.
The net pension liability of the Plan is measured as of June 30, 2019, and the total pension liability for the Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2018, rolled forward to June 30, 2019, using standard update procedures. The City’s proportion of the net pension liability was based on a projection of the City’s long-term share of contributions to the pension plan relative to the projected contributions of all participating employers, actuarially determined. The City’s proportionate share of the net pension liability for the Plan as of June 30, 2018 and 2019 was as follows:
Proportion - June 30, 2018 0.1554%
Proportion - June 30, 2019 0.1510%
Change - Increase (Decrease) -0.0044%
For the year ended June 30, 2020, the City recognized pension expense of $3,204,854. At June 30, 2020, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
Deferred Outflows
of Resources
Deferred Inflows of
Resources
Pension contributions subsequent to the measurement date $2,233,301 - $ Changes of assumptions 687,585 194,778
Differences between actual and expected experience 1,022,212 21,728 242,566 -
592,306 76,692
- 446,218
Total $ 1,051,378 4,466,008 $
Net difference between projected and actual earning on plan investments
Change in employer's proportion
Differences between the employer's actual contributions and the employer's proportionate share of contributions
CITY OF CALIFORNIA CITY
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
39 NOTE 7 – EMPLOYEES RETIREMENT PLAN (DEFINED BENEFIT PLAN) (Continued) B. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
$2,233,301 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2021. Other amounts reported as deferred outflow of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:
Year Ended
June 30
2021 1,190,914 $
2022 (184,634)
2023 126,813
2024 48,236
2025 -
Thereafter -
C. Actuarial Assumptions
The total pension liabilities in the June 30, 2018 actuarial valuations were determined using the following actuarial assumptions:
Valuation Date June 30, 2018
Measurement Date June 30, 2019
Actuarial Cost Method Entry-Age Normal Cost Method
Actuarial Assumptions:
Discount Rate 7.15%
Inflation 2.50%
Payroll Growth 2.75%
Projected Salary Increase 3.30% to 14.20%(1)
Investment Rate of Return 7.15%(2)
Mortality Derived using CalPERS' Membership
Data for all Funds(3)
(1) Depending on age, service and type of employment
(2) Net of pension plan investment expenses, including inflation (3) The mortality Table was developed based on CalPERS specific data. The table includes 15 years of mortality improvements using Society of Actuaries Scale 90% of scale MP 2016.
The underlying mortality assumptions and all other actuarial assumptions used in the June 30, 2017 valuation were based on the results of December 2017 actuarial experience study for the period 1997 to 2015. Further details of the Experiences Study can be found on the CalPERS website.
Change of Assumptions – In 2018, demographic assumptions and inflation rate were changed in accordance with the CalPERS Experience Study and Review of Actuarial Assumptions December 2017. There were no changes in the discount rate.
CITY OF CALIFORNIA CITY
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
40 NOTE 7 – EMPLOYEES RETIREMENT PLAN (DEFINED BENEFIT PLAN) (Continued) D. Discount Rate
The discount rate used to measure the total pension liability was 7.15%. 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.
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.
In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations as well as the expected PERF cash flows. Using historical returns of all the funds’ asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11+ years) using a building-block approach. Using the expected nominal returns for both shortterm and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equivalent to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses.
The expected real rates of return by asset class are as follows:
Asset Class(a)
New
Strategic
Allocation
Real Return
Years
1-10(b)
Real Return
Years
11+(c)
Global Equity 50.00% 4.80% 5.98%
Global Fixed Income 28.00% 1.00% 2.62%
Inflation Sensitive 0.00% 0.77% 1.81%
Private Equity 8.00% 6.30% 7.23%
Real Estate 13.00% 3.75% 4.93%
Liquidity 1.00% 0.00% -0.92%
Total 100.00%
(b) An expected inflation of 2.0% used for this period. (c) An expected inflation of 2.92% used for this period. (a) In the CalPERS CAFR, Fixed Income is included in Global Debt Securities; Liquidity is included in Short-term Investments; Inflation Assets are included in both Global Equity Securities and Global Debt Securities.
CITY OF CALIFORNIA CITY
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
41 NOTE 7 – EMPLOYEES RETIREMENT PLAN (DEFINED BENEFIT PLAN) (Continued) D. Discount Rate (Continued)
Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate – The following presents the City’s proportionate share of the net pension liability for the Plan, calculated using the discount rate for the Plan, as well as what the City’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher than the current rate:
Discount Rate -1%
6.15%
Current Discount
Rate 7.15%
Discount Rate +1%
8.15%
$22,994,791 $15,472,268 $9,283,835
E. Pension Plan Fiduciary Net Position
Detailed information about the Plan’s fiduciary net position is available in the separately issued CalPERS financial reports.
F. Payable to the Pension Plan
The City did not have an outstanding amount of contributions to the pension plan required for the year ended June 30, 2020.
NOTE 8 – SUMMARY DISCLOSURE OF SELF-INSURANCE CONTINGENCIES The City is self-insured for the first $100,000 on each general liability claim. The insurance coverage in excess of self-insured amount is provided by the Public Agency Risk Sharing Authority of California (PARSAC) up to a limit of $1,000,000 per occurrence.
Claims expenditures and liabilities are reported when it is probable that a loss has occurred and the amount of that loss can be reasonably estimated. These losses include an estimate of claims that have been incurred but not reported. The City funds all claims payable, including those incurred but not reported, in the yearly deposit it pays to PARSAC, except for its self-insured retention.
Effective January 29, 1998, the City became a member of the PARSAC, a public entity risk pool currently operating as a common risk management and insurance program for 37 California cities. The City pays an annual premium to the pool for its excess general liability insurance coverage. The agreement for formation of the PARSAC provides that the pool will be self-sustaining through member premiums. The City continues to carry commercial insurance for all other risks of loss, including workers’ compensation insurance, property insurance with a $5,000 deductible and crime insurance with a $25,000 deductible.
The PARSAC publishes its own financial report for the fiscal year ended June 30, 2020, which can be obtained from Public Agency Risk Sharing Authority of California, Sacramento, California. There have been no significant changes in insurance coverage from the prior fiscal year. During the past three years, the amount of settlements has not exceeded the amount of insurance coverage.
CITY OF CALIFORNIA CITY
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
42 NOTE 9 – CONTINGENCIES
The City is involved in various lawsuits including litigation with the California Department of Finance (DOF) in regards to the loan between the former redevelopment agency and the Subdivision Deferred Improvement Fund (SDI). See additional information in Note 11. If the DOF prevails, the possible amount of loss could be the entire loan amount including principal and interest. Although the outcome of the various lawsuits is not presently determinable, with the possible exception of the litigation with the DOF, it is the opinion of management and legal counsel that the resolution of these matters will not have a material adverse effect.
The City has received various state and federal funds for specific purposes that are subject to review and audit by the grantor agencies. Although such audits could generate expenditure disallowances under terms of the grants, it is believed that any required reimbursements will not be material.
Proposition 218, which was approved by the voters in November 1996, will regulate the City’s ability to impose, increase, and extend taxes, assessments and fees. Any new, increased, or extended taxes, assessments and fees subject to the provisions of Proposition 218 provides that these taxes, assessments and fees are subject to the voter initiative process and may be rescinded in the future by voters. Therefore, the City’s ability to finance the services for which the taxes, assessments and fees were imposed may be significantly impaired. At this time, it is uncertain how Proposition 218 will affect the City’s ability to maintain or increase the revenue from taxes, assessments and fees.
On January 8, 1998, the City Council passed Ordinance No. 98-552, which allows an annual transfer not to exceed $290,000 from the Subdivision Deferred Improvement (SDI) Fund to maintain SDI improvements and pay for administrative expenses as permitted by the terms and conditions stated in said ordinance. During the 2015-2016 fiscal year, management reviewed current and prior year’s financial records and determined that the General Fund and the Street Maintenance Fund incurred expenditures as permitted by Article 3, Section 9-6303 (1)-(4), but did not accumulate and transfer the allowable expenditures. Management plans to perform an assessment in future years to determine the retroactive and cumulative maximum allowable year-to-date transfers per the aforementioned section, which may result in a material transfer out of the SDI Fund and into the General Fund and/or Street Maintenance Fund. As of June 30, 2020, no determination has been made with respect to the prior year accumulation of allowable expenditures.
Measure C, a special tax requiring an annual payment of $182.50 per property parcel, was approved by voters for six years beginning on June 1, 2018. The purpose of Measure C is to pay for salaries, equipment and other needs of the Police and Fire departments at a 50%/50% split. Measure A is expiring on June 30, 2024. During the 2018-2019 fiscal year, the City received $6,708,175 as a result of Measure C.
CITY OF CALIFORNIA CITY
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
43 NOTE 10 – SUCCESSOR AGENCY TRUST FUND
On January 17, 2012, the City Council elected to become the Successor Agency for the former redevelopment agency in accordance with Assembly Bill 1X26 (the Bill”) which dissolved all redevelopment agencies in the State of California.
Under the control of an oversight board, remaining assets can only be used to pay enforceable obligations in existence at the date of dissolution of the redevelopment agency (including the completion of any unfinished projects that were subject to legally enforceable contractual commitments).
Successor agencies are only allocated revenue in the amount that is necessary to pay estimated annual installment payments on enforceable obligations of the former redevelopment agency until all enforceable obligations of the prior redevelopment agency have been paid in full and all assets have been liquidated.
After the date of the dissolution, the assets and activities of the dissolved redevelopment agency are reported in a fiduciary fund (private-purpose trust fund) in the financial statements of the City.
Long-Term Obligations
The following is a schedule of changes in long-term debt for the fiscal year ended June 30, 2020:
Balance Balance Due Within
June 30, 2019 Additions Repayments June 30, 2020 One Year Direct Borrowings:
City Loans - Principal 9,877,142 $ - $ - $ 9,877,142 $ - $ City Loans - Interest 10,807,082 - - 10,807,082 -
Van Pray Note 1,095,637 - (1,095,637) - -
Total Direct Borrowings: - 21,779,861 (1,095,637) 20,684,224 - 2014 Tax Allocation Refunding Bond 7,965,000 - (415,000) 7,550,000 440,000 - 384,206 (25,332) 358,874 25,332
Total 30,129,067 $ - $ (1,535,969) $ 28,593,098 $ 465,332 $ 2014 Tax Allocation Refunding Bond
Premium
A description of long-term debt outstanding of the Successor Agency as of June 30, 2020 follows:
City Loans
The City advanced the Successor Agency funds for operations and has paid for costs at various times since the establishment of the Redevelopment Agency. Costs paid on behalf of the Successor Agency do not have a stated interest rate. The loans made to the Agency bear interest at various rates as specified below:
SDI Fund Land Note – Authorized amount $4,500,000; interest at 6.6% per annum.
SDI Fund Treatment Plant Note - Authorized amount $5,902,000; interest at 7.3% per annum. Principal and interest are to be repaid in 20 installments, commencing July 1, 2003.
At June 30, 2020, the principal balance outstanding was $9,877,142 and accrued unpaid interest was $10,807,082. The Department of Finance has disallowed payments for these loans and an allowance for uncollectible debt has been established in the Subdivision Deferred Improvements fund for the entire balance.
Additionally, as a result of the DOF’s determination, the City stopped accruing interest on the debt. However, the City is still attempting to obtain authorization from the Department of Finance allowing repayment by the Successor Agency to the City. Accordingly, the City has not removed the loans and related accumulated interest from the Successor Agency’s balance sheet.
CITY OF CALIFORNIA CITY
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
44 NOTE 10 – SUCCESSOR AGENCY TRUST FUND (Continued)
Long-Term Obligations (Continued)
Van Pray Note
In November 2007, the Agency entered into a purchase agreement with Pray Living Trust U.D.T. for the purchase of improved real property. Consideration for the property is an unsecured note payable for $4,000,000. Monthly payments of $31 include both principal and interest at a rate of 5% for the first year.
Thereafter, a variable rate of interest was paid semi-annually effective January 1 and July 1. The variable rate was the Annual Libor rate, plus 0.75% for the last day of May and November, respectively. During the fiscal year ended June 30, 2020, a lump sum payment of $853,016 was made to satisfy the balance. 2014 Tax Allocation Refunding Bonds
On August 6, 2014, the Agency issued $9,735,000 Successor Agency to the City of California City Redevelopment Agency California City Redevelopment Project Area Tax Allocation Refunding Bonds, Series 2014. Interest on the bonds is payable semi-annually on September 1 and March 1, maturing on September 1, 2034 and have various interest rates of 3.00% to 5.00%. There is a provision whereby if the City is unable to make payment or does not comply with the covenants established in the loan agreement, the lender may declare the remaining principal and interest outstanding immediately due and payable. The bond proceeds were used to advance refund the 2000 Series A, Subordinated 2000 Series A, and Tax Allocation Refunding Bonds 2000 Series B. The outstanding principal balance of the 2014 Refunding Bonds at June 30, 2020 was $7,550,000.
The following is a schedule of future estimated minimum payments related for the 2014 Tax Allocation Refunding Bonds described above:
Year Ending
June 30, Principal Interest Total
2021 440,000 $ 304,238 $ 744,238 $
2022 455,000 281,988 736,988
2023 480,000 258,988 738,988
2024 234,613 510,000 744,613
2025 208,863 525,000 733,863
2026-3030 756,901 2,850,000 3,606,901
3031-3035 234,997 2,290,000 2,524,997
Total $ 2,280,588 7,550,000 $ 9,830,588 $
2014 Tax Allocation Refunding Bonds
CITY OF CALIFORNIA CITY
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
45 NOTE 11 – RESTATEMENT OF BEGINNING NET POSITION/FUND BALANCE Prior Period Adjustments
The City has determined that certain transactions were recorded incorrectly in the prior year. The beginning net positions of the governmental activities and business-type activities in the government-wide financial statements have been restated as presented in the reconciliation below:
Net Position
Governmental
Activities
Business-Type
Activities
previously reported $ 112,688,451 18,867,343 $
Prior period adjustments:
Cash and investments (785,675) 815,416
Accounts receivable (271,269) -
Interest receivable 1,641 (12,515)
Intergovernmental receivables 471,775 623,047
Accounts payable - 10,548
Public works operating grants and contributions - (10,891) Total prior period adjustments (583,528) 1,425,605
Change in accounting principle (GASB 84 Implementation):
Cash and investments (210,093) (200,404)
Accounts payable 210,093 200,404
Total change in accounting principle - -
$ 114,114,056 18,283,815 $
Fund balance/net position, June 30, 2019, as
Fund balance/net position, July 1, 2019, as restated
CITY OF CALIFORNIA CITY
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
46 NOTE 11 – RESTATEMENT OF BEGINNING NET POSITION/FUND BALANCE (Continued) Prior Period Adjustments (Continued)
Reconciliations of the prior period ending fund balances in the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balance are as follows:
Fund Balance
General
Street
Maintenance
previously reported $ 569,415 4,930,090 $
Prior period adjustments:
Cash and investments (144,468) 959,884
Interest receivable 103 (12,618)
Intergovernmental receivables 623,047 -
Accounts payable - 10,548
Unavailable revenue - (633,938)
Total prior period adjustments (155,256) 957,814
Change in accounting principle (GASB 84 Implementation):
Cash and investments - (200,404)
Accounts payable - 200,404
Total change in accounting principle - -
$ 414,159 5,887,904 $
Fund balance/net position, June 30, 2019, as
Fund balance/net position, July 1, 2019, as restated
CITY OF CALIFORNIA CITY
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
47 NOTE 11 – RESTATEMENT OF BEGINNING NET POSITION/FUND BALANCE (Continued) Prior Period Adjustments (Continued)
Reconciliations of the prior period ending net position in the Proprietary Funds Statement of Revenues, Expenses and Changes in Net Position, and the Fiduciary Funds Statement of Changes in Net position are as follows:
Business-Type Activities
Fiduciary
Fund
Water Fund Sewer Fund
Nonmajor
Enterprise
Funds
PrivatePurpose Trust
Fund
previously reported 13,321,887 $ 2,630,248 $ 2,915,209 $ (22,972,851) $ Prior period adjustments:
Cash and investments (96,922) (693,983) 5,230 -
Accounts receivable - (271,269) - -
Interest receivable 902 (989) 1,728 -
Intergovernmental receivable - - 471,775 -
Total prior period adjustments (96,020) (966,241) 478,733 - Change in accounting principle (GASB 84 Implementation):
Cash and investments - (210,093) - 410,497
Accounts payable - 210,093 - (410,497)
Total change in accounting principle - - - -
$ 2,534,228 12,355,646 $ 3,393,942 $ (22,972,851) $
Net position, June 30, 2019, as
Net position, July 1, 2019, as restated
48 REQUIRED SUPPLEMENTARY INFORMATION
49 CITY OF CALIFORNIA CITY
REQUIRED SUPPLEMENTARY INFORMATION
COST SHARING DEFINED BENEFIT PENSION PLAN
PROPORTIONATE SHARE OF NET PENSION LIABILITY
LAST 10 YEARS*
AS OF JUNE 30, 2020
2015 2016 2017 2018 2019 2020
0.1749% 0.1727% 0.1610% 0.1558% 0.1554% 0.1510%
10,984,722 $ 11,850,799 $ 13,935,222 $ 15,447,887 $ 14,979,476 $ 15,472,268 $ 4,653,159 $ 4,978,479 $ 5,585,009 $ 5,426,300 $ 5,648,964 $ 5,890,911 $ 236.07% 238.04% 249.51% 284.69% 265.17% 262.65%
76.23% 74.91% 69.05% 68.60% 71.02% 71.66%
NOTES TO SCHEDULEChanges in Benefit Terms - None
Changes in Assumptions - None
Proportion of the net pension liabilityProportionate share of the net pension liabilityCovered payrollProportionate share of the net pension liability as percentage of covered payrollPlan fiduciary net position as a percentage of the total pension liability*Schedule is intended to show information for ten years. Additional years will be displayed as they become available.
50 CITY OF CALIFORNIA CITY
REQUIRED SUPPLEMENTARY INFORMATION
COST SHARING DEFINED BENEFIT PENSION PLAN
SCHEDULE OF CONTRIBUTIONS
LAST 10 YEARS*
AS OF JUNE 30, 2020
2014 2015 2016 2017 2018 2019 2020
1,218,497 $ 1,334,533 $ 1,622,773 $ 1,717,344 $ 1,795,425 $ 1,965,332 $ 2,233,301 $ 1,218,497 1,334,533 1,622,773 1,717,344 1,795,425 1,965,332 2,233,301 - $ - $ - $ - $ - $ - $ - $
4,653,159 $ 4,978,479 $ 5,585,009 $ 5,426,300 $ 5,648,964 $ 5,890,911 $ 6,179,728 $
26.19% 26.81% 29.06% 31.65% 31.78% 33.36% 36.14%
Actuarially required contribution (actuarially determined)Contributions in relation to the actuarially determined contributionsContribution deficiency (excess)Covered payrollContributions as a percentage of covered payroll*Schedule is intended to show information for ten years. Additional years will be displayed as they become available.
51 CITY OF CALIFORNIA CITY
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE – BUDGET AND ACTUAL
GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2020
Variance with
Original Final Final Budget
REVENUES
Taxes 2,560,037 $ 2,560,037 $ 3,081,539 $ 521,502 $
Licenses and permits 984,000 984,000 719,596 (264,404)
Intergovernmental 683,840 683,840 682,751 (1,089)
Charges for services 314,678 314,678 413,930 99,252
Fines and forfeitures 11,500 11,500 11,324 (176)
Use of money and property 69,900 69,900 72,300 2,400
Miscellaneous 28,300 28,300 95,732 124,032
Total revenues 4,652,255 4,652,255 5,105,472 453,217
EXPENDITURES
Current:
General government 2,242,161 2,242,161 2,386,419 (144,258) Parks and recreation 1,341,265 1,341,265 1,604,026 (262,761) Public works 1,157,808 1,157,808 1,199,796 (41,988)
Capital outlay 17,700 17,700 10,106 7,594
Debt service:
Principal - - (40,256) 40,256
Interest - - 2,673 (2,673)
Total expenditures 4,758,934 4,758,934 5,243,276 (484,342) Excess of revenues over (under) expenditures (106,679) (106,679) (137,804) (31,125)
OTHER FINANCING SOURCES (USES)
Transfers out 108,900 108,900 (108,900) -
Total other financing sources (uses) 108,900 108,900 - (108,900) Net change in fund balances 2,221 2,221 (137,804) (140,025) Fund balances - beginning (restated) 4,930,090 4,930,090 5,887,904 957,814 Fund balances - ending $ 4,932,311 4,932,311 $ 5,750,100 $ 817,789 $ Budgeted Amounts Actual
Amount
52 CITY OF CALIFORNIA CITY
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE – BUDGET AND ACTUAL
STREET MAINTENANCE SPECIAL REVENUE FUND
FOR THE YEAR ENDED JUNE 30, 2020
Variance with
Original Final Final Budget
REVENUES
Intergovernmental 1,179,964 $ 1,179,964 $ 643,628 $ (536,336) $ Use of money and property - - 6,204 6,204
Total revenues 1,179,964 1,179,964 649,832 (530,132)
EXPENDITURES
Current:
Public works 708,849 708,849 943,733 (234,884)
Capital outlay 20,000 20,000 368,038 (348,038)
Debt service:
Principal - - 41,379 (41,379)
Interest - - 7,275 (7,275)
Total expenditures 728,849 728,849 (631,576) 1,360,425
Excess of revenues over (under) expenditures 451,115 451,115 (710,593) (1,161,708)
OTHER FINANCING SOURCES (USES)
Proceeds from loans - - 226,118 226,118
Total other financing sources (uses) - - 226,118 226,118 Net change in fund balances 451,115 451,115 (484,475) (935,590) Fund balances - beginning (restated) 569,415 569,415 414,159 (155,256) Fund balances - ending (deficit) 1,020,530 $ 1,020,530 $ (70,316) $ (1,090,846) $ Budgeted Amounts Actual
Amount
53 CITY OF CALIFORNIA CITY
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE – BUDGET AND ACTUAL
SUBDIVISION DEFERRED IMPROVEMENT SPECIAL REVENUE FUND
FOR THE YEAR ENDED JUNE 30, 2020
Variance with
Original Final Final Budget
REVENUES
Use of money and property $ 2,400,000 2,400,000 $ 2,010,276 $ (389,724) $ Total revenues 2,400,000 2,400,000 2,010,276 (389,724)
EXPENDITURES
Current:
Public works 45,000 45,000 27,694 17,306
Total expenditures 45,000 45,000 17,306 27,694
Net change in fund balances 2,355,000 2,355,000 1,982,582 (372,418) Fund balances - beginning 88,000,686 88,000,686 88,000,686 - Fund balances - ending 90,355,686 $ 90,355,686 $ 89,983,268 $ (372,418) $ Budgeted Amounts Actual
Amount
54 CITY OF CALIFORNIA CITY
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE – BUDGET AND ACTUAL
PUBLIC SAFETY SERVICES SPECIAL REVENUE FUND
FOR THE YEAR ENDED JUNE 30, 2020
Variance with
Original Final Final Budget
REVENUES
Taxes 7,248,700 $ 7,248,700 $ 7,133,744 $ (114,956) $
Licenses and permits 13,750 13,750 11,980 (1,770)
Intergovernmental 41,666 41,666 96 (41,570)
Charges for services 30,000 30,000 43,145 13,145
Fines and forfeitures 20,000 20,000 28,800 8,800
Use of money and property 125 125 112 (13)
Miscellaneous 49,500 49,500 65,140 15,640
Total revenues 7,403,741 7,403,741 7,283,017 (120,724)
EXPENDITURES
Current:
Public safety 7,287,920 7,287,920 7,468,339 (180,419)
Capital outlay - - 946,747 (946,747)
Debt service:
Principal 244,396 244,396 441,105 (196,709)
Interest - - 1,765 (1,765)
Total expenditures 7,532,316 7,532,316 (1,325,640) 8,857,956 Excess of revenues over (under) expenditures (128,575) (128,575) (1,446,364) (1,574,939)
OTHER FINANCING SOURCES (USES)
Proceeds from loans - - 793,895 793,895
Total other financing sources (uses) - - 793,895 793,895 Net change in fund balances (128,575) (128,575) (781,044) (652,469) Fund balances - beginning (deficit) (831,503) (831,503) (831,503) - Fund balances - ending (deficit) (960,078) $ (960,078) $ (1,612,547) $ (652,469) $ Budgeted Amounts Actual
Amount
55 CITY OF CALIFORNIA CITY
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE – BUDGET AND ACTUAL
OHV GRANTS SPECIAL REVENUE FUND
FOR THE YEAR ENDED JUNE 30, 2020
Variance with
Original Final Final Budget
REVENUES
Intergovernmental 720,220 $ 720,220 $ 915,707 $ 195,487 $ Total revenues 720,220 720,220 915,707 195,487
EXPENDITURES
Current:
Public safety 462,432 462,432 442,992 19,440
Total expenditures 462,432 462,432 19,440 442,992
Net change in fund balances 257,788 257,788 472,715 214,927 Fund balances - beginning (deficit) (948,091) (948,091) (948,091) - Fund balances - ending (deficit) (690,303) $ (690,303) $ (475,376) $ 214,927 $ Budgeted Amounts Actual
Amount
56 SUPPLEMENTARY INFORMATION
57 CITY OF CALIFORNIA CITY
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2020
Supplemental Public Aspen Mall
Special Law Safety Maintenance
Tax Enforcement Augmentation District Housing
ASSETS
Cash and investments 4,610 $ 350,629 $ 267,214 $ 151,765 $ 614,760 $ Receivables:
Interest 8 - - 289 6
Intergovernmental - 56,727 23,462 - -
Advance to Successor Agency - - - - 985,000
Total assets 4,618 $ 407,356 $ 290,676 $ 152,054 $ 1,599,766 $
LIABILITIES
Accounts payable - $ - $ - $ 2,718 $ 5,444 $
Deposits payable - - - - 47,885
Due to other funds - - - - -
Total liabilities - - - 2,718 53,329
DEFERRED INFLOWS OF RESOURCES
Deferred revenues - unavailable
grant revenues - 56,727 - - -
Total deferred inflows of resources - 56,727 - - -
FUND BALANCES
Restricted for:
Public safety - 350,629 290,676 - -
Parks and recreation - - - - -
Community development - - - 149,336 1,546,437
Assigned for:
Community development 4,618 - - - -
Unassigned - - - - -
Total fund balances (deficits) 4,618 350,629 290,676 149,336 1,546,437 Total liabilities and fund balances 4,618 $ 407,356 $ 290,676 $ 152,054 $ 1,599,766 $ Special Revenue Funds
58 CITY OF CALIFORNIA CITY
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2020
(Continued)
Total
Nonmajor
Parks and COPS OHV EMS Proposition 39 Governmental
Recreation Recovery Grant AB109 Funds
ASSETS
Cash and investments 12,691 $ - $ 386 $ 105,374 $ 1,507,429 $ Receivables:
Interest - - 1 - 304
Intergovernmental - - - - 80,189
Advance to Successor Agency - - - - 985,000
Total assets 12,691 $ - $ 387 $ 105,374 $ 2,572,922 $
LIABILITIES
Accounts payable - $ - $ - $ - $ 8,162 $
Deposits payable - - - - 47,885
Due to other funds - 150,466 - - 150,466
Total liabilities - 150,466 - - 206,513
DEFERRED INFLOWS OF RESOURCES
Deferred revenues - unavailable
grant revenues - - - - 56,727
Total deferred inflows of resources - - - - 56,727
FUND BALANCES
Restricted for:
Public safety - - 387 105,374 747,066
Parks and recreation 12,691 - - - 12,691
Community development - - - - 1,695,773
Assigned for:
Community development - - - - 4,618
Unassigned - (150,466) - - (150,466)
Total fund balances (deficits) 12,691 (150,466) 387 105,374 2,309,682 Total liabilities and fund balances 12,691 $ - $ 387 $ 105,374 $ 2,572,922 $ Special Revenue Funds
59 CITY OF CALIFORNIA CITY
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2020
Supplemental Public Aspen Mall
Special Law Safety Maintenance
Tax Enforcement Augmentation District Housing
REVENUES
Taxes 291 $ - $ 171,170 $ 21,484 $ - $
Intergovernmental - 100,000 - - -
Charges for services - - - - 347,243
Use of money and property 81 - - 2,933 647
Miscellaneous - - - - 14,219
Total revenues 372 100,000 171,170 24,417 362,109
EXPENDITURES
Current:
Public safety - 7,219 75,196 - -
Parks and recreation - - - - -
Community development - - - 41,838 460,010
Capital outlay - - - - 25,332
Total expenditures - 7,219 75,196 41,838 485,342
Net change in fund balances 372 92,781 95,974 (17,421) (123,233) Fund balances (deficits) - beginning 4,246 257,848 194,702 166,757 1,669,670 Fund balances (deficits) - ending 4,618 $ 350,629 $ 290,676 $ 149,336 $ 1,546,437 $ Special Revenue Funds
60 CITY OF CALIFORNIA CITY
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2020
(Continued)
Total
Nonmajor
Parks and COPS OHV EMS Proposition 39 Governmental
Recreation Recovery Grant AB109 Funds
REVENUES
Taxes - $ - $ - $ - $ 192,945 $
Intergovernmental - - - - 100,000
Charges for services - - - - 347,243
Use of money and property - 2,645 - - 6,306
Miscellaneous 3,893 - - - 18,112
Total revenues 3,893 2,645 - - 664,606
EXPENDITURES
Current:
Public safety - 612 - 1,958 84,985
Parks and recreation 5,340 - - - 5,340
Community development - - - - 501,848
Capital outlay - - - - 25,332
Total expenditures 5,340 612 - 1,958 617,505
Net change in fund balances (1,447) 2,033 - (1,958) 47,101 Fund balances (deficits) - beginning 14,138 (152,499) 387 107,332 2,262,581 Fund balances (deficits) - ending 12,691 $ (150,466) $ 387 $ 105,374 $ 2,309,682 $ Special Revenue Funds
CITY OF CALIFORNIA CITY
MANAGEMENT REPORT
AND
AUDITOR’S
COMMUNICATION LETTER
FOR THE YEAR ENDED JUNE 30, 2020
CITY OF CALIFORNIA CITY
MANAGEMENT REPORT AND AUDITOR’S COMMUNICATION LETTER
FOR THE YEAR ENDED JUNE 30, 2020
TABLE OF CONTENTS
Page
Required Communications .................................................................................................................. 1 - 2 Independent Auditor’s Report on Internal Controls over Financial Reporting, Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ..................................................... 3 - 4 Schedule of Findings ........................................................................................................................... 5 - 7 Summary Schedule of Prior Audit Findings ..................................................................................... 8 - 11 Corrective Action Plan ........................................................................................................................... 12
901 “N” STREET, SUITE 104 FIREBAUGH, CALIFORNIA 93622 PHONE 559.659.3045 FAX 559.659.0615 BRYANT L. JOLLEY
CERTIFIED PUBLIC ACCOUNTANTS Bryant L. Jolley C.P.A.
Ryan P. Jolley C.P.A.
Darryl L. Smith C.P.A.
Luis A. Perez C.P.A.
Lan T. Kimoto
To the City Council of the
City of California City
California City, California
We have audited the financial statements of the City of California City (City), for the year ended June 30, 2020. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our engagement letter dated June 8, 2021.
Professional standards require that we communicate to you the following information related to our audit.
Significant Audit Findings
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in Note 1 to the financial statements. No new accounting policies were adopted and the application of existing policies was not changed during 2020. We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period.
Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Accounting estimates are used in determining the depreciable lives and methods used for capital assets, compensated absences, and funding progress of CalPERS pension liability. We evaluated the key factors and assumptions used to develop these estimates in determining that they are reasonable in relation to the financial statements taken as a whole.
Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting the financial statements were the disclosures about the employee retirement plan disclosed in Note7 to the financial statements.
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing our audit.
Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. Management has corrected all such misstatements. We did not identify any significant audit adjustments.
2 Disagreements with Management
For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor’s report. We are pleased to report that no such disagreements arose during the course of our audit.
Management Representations
We have requested certain representations from management that are included in the management representation letter dated June 30, 2022.
Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to the City’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants.
Other Audit Findings and Issues
We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the City’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention.
June 30, 2022
BRYANT L. JOLLEY
CERTIFIED PUBLIC ACCOUNTANTS Bryant L. Jolley C.P.A.
Ryan P. Jolley C.P.A.
Darryl L. Smith C.P.A.
Luis A. Perez C.P.A.
Lan T. Kimoto
901 “N” STREET, SUITE 104 FIREBAUGH, CALIFORNIA 93622 PHONE 559.659.3045 FAX 559.659.0615 INDEPENDENT AUDITOR’S REPORT ON INTERNAL
CONTROL OVER FINANCIAL REPORTING AND ON
COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT
OF FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
To the City Council of the
City of California City
California City, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of California City, California (the City), as of and for the year ended June 30, 2020, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated June 30, 2022.
Internal Controls 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 determining 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 controls 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 controls, such that there is a reasonable possibility that a material misstatement of the City’s financial statements will not be prevented or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that have not been identified. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. We did identify certain deficiencies in internal control, described in the accompanying schedule of findings and questioned costs as items 2020-001 and 2020-002 that we consider to be significant deficiencies.
4 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 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.
City’s Response to Findings
The City’s responses to the findings identified in our audit are described in the Corrective Action Plan. The City’s responses were not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion in it.
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.
Bryant L. Jolley, CPA
June 30, 2022
5 CITY OF CALIFORNIA CITY
SCHEDULE OF FINDINGS
FOR THE YEAR ENDED JUNE 30, 2020
Finding 2020-001 Accounting Oversight (Significant Deficiency) Condition: The Finance Department does not have adequate oversight over all aspects of the accounting functions, including cash management, recording of year end accruals and the development of internal controls. A strong system of internal controls and management review requires that general ledger account balances be properly reconciled to a subsidiary ledger or other adequate supporting documentation on a periodic basis, as well as during the year-end financial close process in order to accurately and completely close the current year general ledger in a timely manner. Management is responsible for maintaining its accounting records in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP).
Criteria: A strong system of internal controls and management review requires that there is adequate oversight of the financial and accounting activity and maintenance of all financial records throughout the City.
Cause: The Finance Department does not have adequate controls in place over the general accounting procedures including timely reconciliation of accounts and recording of year-end accruals. The City’s accountants were relatively new to the City and, in addition to the demands of closing a City’s general ledger, there were numerous other financial statement, compliance, and control environment matters to resolve that were inherited from accounting errors and decisions made in previous fiscal years.
Effect: Inadequate Finance Department oversight over all aspects of the City’s accounting, including the collection of cash and the development of internal controls, could result in a misappropriation of assets, material accounting errors, reporting delays, and/or noncompliance with grant agreements.
Recommendation: We recommend that the Finance Department be provided the responsibility for the accounting, development of internal controls, and cash management over all aspects of the City’s fiscal operations. We also recommend the City create a closing checklist to assist with the preparation of audit schedules that are complete, accurate, and reconcile to the City’s general ledger account balances.
Additionally, ensure that a system is in place to allow the City to perform this in a timely manner.
6 CITY OF CALIFORNIA CITY
SCHEDULE OF FINDINGS
FOR THE YEAR ENDED JUNE 30, 2020
Finding 2020-002 Cash Reconciliation (Significant Deficiency) Condition: While auditing the City's cash balances, we noted pooled cash was not properly reconciled at June 30, 2020 due to certain unreconciled timing differences. The City hired a CPA firm consultant to determine the unreconciled amounts and propose adjustments that were reflected in fiscal year 2021.
Criteria: Accounting principles generally accepted in the United States of America require internal controls to safeguard and preserve assets, protect against improper fund disbursement, and to ensure transactions are properly recorded.
Cause: The City management was not available or lacked the technical proficiency to implement proper review and reconciliation of the cash balances on a routine basis.
Effect: Certain transaction were not recorded in the proper period, these amounts were deemed to be immaterial to the financial statements as a whole. However, improper bank reconciliations may prevent the City from detecting fraudulent transactions on a timely basis.
Recommendations: We recommend the City hire a CPA firm consultant to provide appropriate proper training to City staff to reconcile and review bank reconciliation with proper internal controls in place to ensure the safeguard of the asset.
7 CITY OF CALIFORNIA CITY
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
FOR THE YEAR ENDED JUNE 30, 2020
Finding 2019-001: Overhead Cost Allocations – Implemented Finding 2019-002: Accounting Oversight – Partially Implemented, see current year Finding 2020-001.
Finding 2019-003: Loan Conditions - Implemented
ITEM NO. NB 2
COUNCIL AGENDA ITEM
AUGUST 9, 2022
PREPARED BY: Doug Dunford, City Manager
SUBJECT: Council to Consider Adopting a Resolution Establishing a 1 Cent Sales Tax in the City of California City and Placing the Ordinance on the November 8, 2022, Ballot for Voter Approval Pursuant to Revenue and Taxation Code 7285.9
BACKGROUND/ DISCUSSION
This item is in response to a referral made by the City Council at its July 19, 2022, Regular City Council Meeting requesting staff bring back proposed ballot measure language at its Regular City Council Meeting on Tuesday, August 9, 2022, for the City Council to consider placing a one cent sales tax measure for the City of California City voter’s consideration on the November 8, 2022, ballot, with a provision for a Citizens Oversight Committee.
California City is home to the third largest incorporated City in the State. The City provides all local government services to the citizens residing inside City limits. In our community engagement, incorporated residents largely share the same priories as unincorporated residents but with more intense importance particularly with regards to public safety needs. The Council has consistently placed a high priority on public safety and this has been demonstrated through the Measure C Parcel Tax that sunsets in the 2023/2024 budget year.
Unfortunately, the City also faces many fiscal challenges primarily due to the heavy sales and property tax concentration cannabis sector and the impact of extreme State policies negatively impacting this sector. As a result, the City has seen a reduction in the valuation of properties, bringing overall valuation to an increase of only 3.93% over the past several years.
State policies such as water reduction and exempting commercial solar projects from property tax, cost the City. These fiscal challenges have continued to limit the City's ability to invest in vital community services such as law enforcement, fire and 911 response, road repairs, and addressing mental health and homeless issues.
Revenue and Taxation Code 7285.9 authorizes the city council of any city to levy,
increase, or extend a Transactions and Use Tax for general purposes at a rate of 0.125 percent or a multiple thereof, if the Ordinance proposing that tax is approved by a twothirds vote of all members of that governing body and the tax is approved by a majority vote of the qualified voters of the city voting in an election on the issue.
The incorporated cities of Bakersfield, Arvin, Delano, Ridgecrest, Taft, and Wasco already have an overall sales tax rate of 8.25%. Staff and the City Attorney have prepared the attached proposed Ordinance to limit the tax levy to the City of California City and, if approved, would increase sales tax in the City to 8.25%, consistent with the above-mentioned incorporated cities. Consequently, only residents residing in the incorporated City of California City would vote on whether to approve the tax. If the tax is approved by a majority of the electorate in the City, use of the revenue would be limited to general purposes.
Because the proposed tax is a general purposes tax, the revenue cannot be earmarked or designated for a particular purpose or project. To do so would make the tax a "special tax" under Revenue and Taxation Code 53721 and would require a 2/3 approval by the electorate. However, departments that primarily rely on revenue from the General Fund to operate and provide services to the City include the Police Department, Fire Department, Animal Services, Code Enforcement, Parks and Recreation, Airport and Golf Course. Thus, given the established budget priorities of the City and the existing needs, the revenue from the tax would naturally be directed to the vital services provided by such General Fund departments in the City and in accordance with the priorities established by the public and guided by a Citizens Oversight Committee. Ultimately, as part of the budget process, the Council decides to what purposes the revenue will be directed in any given fiscal year.
As currently drafted, the Ordinance provides that revenue from the tax would be identified separately within the City’s annual budget document and made available through common public platforms, including, but not limited to, the City's website. The Finance Department will compile and report annually to the City Council and the public regarding revenue from the tax and expenditures of such revenues incurred by departments receiving disbursements of the tax and that provide services to the City to ensure compliance with Revenue and Taxation Code 7285.9.
In addition to the Finance Department report, the Ordinance does include a Citizens Oversight Committee. This Committee would be established via a resolution by the City Council prior to the operative date of the Ordinance and will be made up of residents of the City. The role of this Citizens Oversight Committee will be to review the expenditure of revenues generated by the tax imposed by this Ordinance and to advise the City Manager and the City Council regarding the Committee's views on how best to utilize the tax revenues within the unincorporated area.
Elections Code 9222 authorizes the City Council to submit to the voters without a petition an Ordinance for purposes of enactment. To place the proposed Ordinance on the November 8, 2022, ballot, the City Council must first approve the Ordinance by a 2/3 vote of all Council members (i.e. four affirmative votes). Adoption of the accompanying resolution by a 2/3 vote would result in approval of the Ordinance. If the resolution is adopted, the question which would appear on the ballot for
consideration by voters in the City of California City would be:
The California City Public Safety/Vital
Services/Local Control Measure.
To maintain vital local services such as law
enforcement, fire, medical emergency 911
response; crime prevention;
recruiting/retaining firefighters/police officers;
attracting industries/jobs; addressing mental
health/addiction challenges; for general
government use; shall a 1% sales tax in
California City, providing approximately
$750,000 annually until ended by voters;
requiring audits, and an oversight committee,
be established?
[ ] YES
[ ] NO
Counsel believes the proposed question accurately frames the primary elements of the issue for voters: l) adoption of a 1cent sales tax in the City of California City, 2) the tax is for general purposes, 3) the revenue from the tax may only be used in California City, 4) some of the services for which the tax may be used include public safety and protection, recreation, animal services, and code enforcement, 5) oversight is provided by the Citizens Oversight Committee.
FISCAL IMPACT
The Fiscal Impact would be estimated at $750,000 a year increase to the General Fund.
RECOMMENDATION
Staff recommends that the Council adopt the resolution attached hereto. In adopting the resolution, the Council will be l) Giving Notice of The Submission to the Qualified Voters for the City of California City of one Ordinance Imposing 1.0 Percent General Purpose Retail Transactions and Use Tax Pursuant to Revenue And Taxation Code Section 7285.9; 2) Requesting that the Board of Supervisors of the County of Kern Grant the City’s Request for Consolidation of Said General Municipal Election with the November 8, 2022, Statewide General Election Administered By the Registrar Recorder/County Clerk (“County Clerk”) of The County Of Kern; 3) Requesting that the County Clerk Provide Specific Election Administration Services in Connection with the City’s General Municipal Election; and (4) Setting Rules and Deadlines for Arguments and Rebuttals For and Against the Ordinance.
ATTACHMENTS
1. Resolution No. 08-22-2930
2. The California City Public Safety/Vital Services/Local Control Measure
ITEM NO. NB 3
COUNCIL AGENDA ITEM
August 9, 2022
PREPARED BY: Theresa Oaks
SUBJECT: Engineering Fees for CDBG – Balsitis Project
BACKGROUND
When the CDBG was originally applied for, the engineering costs were not factored in. California City has been fortunate in that Kern County has approved using leftover funds from a previous grant to cover the rising cost of the playground equipment, etc. As such, the cost of engineering are being requested from the city.
FISCAL IMPACT
The amount requested is $20,580. And it will come out of GL 10-4561-310 for Professional Services
COUNCIL OPTIONS
A. Accept proposal
B. Deny proposal
RECOMMENDATION
Staff recommends accepting the proposal, allowing Staff to move forward with improvements to Balsitis Park.
ATTACHMENTS
A. Task order from BHT Engineering
JULY 25, 2022
TASK ORDER
FOR
CD Project#-13.21.1 - Balsitis Park Playground and BasketballCourt Improvements • This is a cost estimate for BHT Engineering, Inc., per City approved agreement for State and Federal funded projects as of March 9, 2021. See CDBG Schedule A for approved CDBG grant project cost breakdown.
Activity Description
The Project consists of the design, installation and construction of park improvements to include playground equipment, concrete curbing, base rock, surfacing and related playground and basketball court improvements.
Project implementation as shown below:
The signatures below shall serve as an authorization to proceed on Task Order from the City and is acknowledged by the consultant BHT Engineering, Inc.
*This cost is not reimbursable under CD Activity #13.21.1 The total amount of CDBG GRANT funds committed by the County of Kern to the Project is $224,292.76. 8-HT Engineering, Inc. City of California City
Juan M Pantoja, PE Principal
Date: 07/25/2022
Douglas Dunford, City Manager Date:
T:\4-CALIFORNIA CITY\DOC\22408 BALSITIS PLAYGROUND CDBG\TASK ORDER BALSITIS PARK.docx Prepare CDBG Bid package, construction plans and specifications, cost estimates and bid schedules
80 Hrs. at: $120.00 /Hr= $9,600.00
Bidding phase coordination, pre-bid meetings, bid opening, bids analysis and project award
24 Hrs at: $120.00 /Hr= $2,880.00
Construction Management, construction staking and project closeout 60 Hrs at: $135.00 /Hr= $8,100.00
TOTAL $20,580.00