Regular Meeting of the Calimesa City Council
Monday, December 15, 2025
CALL TO ORDER
ROLL CALL: MAYOR CERVANTEZ, MAYOR PRO TEM MANLY, COUNCIL MEMBER CUNDIEFF, COUNCIL MEMBER GARCIA AND COUNCIL MEMBER MOLINA.
STAFF: CITY MANAGER KOLBOW, CITY ATTORNEY FLOWER, CITY CLERK
GERDES, FINANCE DIRECTOR REID, PLANING DIRECTOR LUCIA, PUBLIC
WORKS DIRECTOR SHAKIR, CITY ENGINEER THORNTON, FIRE DEPUTY CHIEF SHAW AND SHERIFF CAPTAIN NORTHRUP.
PLEDGE OF ALLEGIANCE
COMMUNICATIONS FROM THE PUBLIC
Pursuant to the Brown Act, this is the opportunity for members of the public to directly address the Council on any item within the Council’s subject matter jurisdiction. Please note that this is also the time in which members of the public may address the Council on any item on the Consent Calendar. This is not the time for City Council discussion of non-agenda items. After receiving public comments, Council Members, or staff, after being recognized by the Mayor, may briefly respond to statements made by the public or questions posed by the public. In addition, Council Members may ask questions for clarification or make a referral to staff for factual information to be reported back to the Council at a later meeting.
APPROVAL OF THE AGENDA, CONSENT CALENDAR AND WAIVER OF FULL READING OF ORDINANCES This is the time for the City Council to notify the public of any changes to the agenda; such as removal of an agenda item, rearrangement of the agenda, postponement of an agenda item or continuance of an item to a future meeting. This is also the time for the City Council to remove items from the Consent Calendar for individual consideration. Waiver of full reading of ordinances does not take policy action or approve or disapprove any ordinances on the agenda, it simply means that the entire text of the ordinance will not be read.
Regular Meeting of the Calimesa City Council
Meeting Agenda
Monday, December 15, 2025 – 6:00 p.m.
Norton Younglove Multipurpose Senior Center
908 Park Avenue, Calimesa, CA 92320
Jeff Cervantez, Mayor John Manly, Mayor Pro Tem
Eric Cundieff, Council Member Edgar Garcia, Council Member Linda Molina, Council Member Will Kolbow, City Manager Steven Flower, City Attorney The Calimesa City Council will be conducting this meeting in the Norton Younglove Senior Center. Members of the public may attend this meeting in person at the Norton Younglove Senior Center, 908 Park Avenue, Calimesa, CA 92320, or the public may view the City Council meetings live at https://www.youtube.com/@calimesacity900/live beginning at 6:00 p.m.
Submission of Public Comments: Public comment will be allowed by completing a speaker slip and providing it to the City Clerk at the meeting. Please observe a time limit of three (3) minutes when giving your presentation. When called upon, please step forward to the microphone, state your name for the record, whom you represent and any statement you wish to make. Please be advised that you may not defer your three (3) minutes to another speaker.
In compliance with the Americans with Disabilities Act, if you need special assistance to participate in a City meeting or other services offered by this City, please contact the City Clerk’s Office, (909) 795-9801. Notification of at least 48 hours prior to the meeting or time when services are needed will assist the City staff in assuring that reasonable arrangements can be made to provide accessibility to the meeting or service. Any public writings distributed by the City to at least a majority of the Council Members regarding any item on this regular meeting agenda will be made available at the public counter at City Hall located at 908 Park Avenue, Calimesa, CA 92320.
Regular Meeting of the Calimesa City Council
Monday, December 15, 2025
RECOMMENDATION: Move to approve the agenda, consent calendar and waive full reading of ordinances.
Motion________________________ Second_______________________ Vote___________________________ CONSENT CALENDAR (Items 1 – 10)
The following items on the Consent Calendar are routine and customary items and are enacted by a single motion, with the exception of items previously removed during “Approval of the Agenda” for individual consideration. Any items removed shall be individually considered immediately after taking action on the Consent Calendar.
1. APPROVAL OF CITY COUNCIL ACTION MINUTES.
a) City Council action minutes of the December 1, 2025 regular meeting
2. RECEIVE AND FILE CITY COMMISSION & BOARD MINUTES.
a) Library Commission action minutes of November 4, 2025. b) Parks, Trails & Community Services action minutes of September 17, 2025 c) Parks, Trails & Community Services action minutes of October 1, 2025 d) Planning Commission action minutes of October 13, 2025.
3. APPROVAL OF WARRANT REGISTERS.
a) Check Register Report with a total of $475,924.89 (Check Nos. 44634-44705) b) December 1, 2025 Council Payroll of $3,767.75
December 4, 2025 Payroll of $154,691.34
4. COUNCIL TRAVEL EXPENSES.
RECOMMENDATION: That the City Council move to approve the Council Travel Training and Meeting/Mileage Expenses Report through November 30, 2025.
5. TREASURER’S REPORT FOR THE MONTH ENDED OCTOBER 31, 2025.
RECOMMENDATION: That the City Council receive and file the Investment Report for the month ended October 31, 2025.
6. RECEIVE AND FILE THE FISCAL YEAR 2024-25 ANNUAL AUDITED FINANCIAL STATEMENTS AND RELATED REPORTS.
RECOMMENDATION: That the City Council receive and file the Fiscal Year 2024-25 Annual Audit Report and Financial Statements, the 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 , and the Auditors’ Communication with Those Charged with Governance (SAS 114) and Agreed Upon Procedures Applied the Appropriations Limitation Prescribed by Article X111-B of the California Constitution. 7 SPECIAL TAX AND BOND ACCOUNTABILITY REPORTS FOR PUBLIC SERVICES COMMUNITY FACILITIES DISTRICT NO. 1, COMMUNITY FACILITIES DISTRICT NO. 2012- 1(SINGLETON HEIGHTS), COMMUNITY FACILITIES DISTRICT NO. 2013-1(JP RANCH) AND COMMUNITY FACILITIES DISTRICT NO. 2018-1 (SUMMERWIND TRAILS) FOR FISCAL YEAR 2024-25.
RECOMMENDATION: That the City Council receive and file Special Tax and Bond Accountability Reports for Fiscal Year 2024-25.
Regular Meeting of the Calimesa City Council
Monday, December 15, 2025
8. PURCHASE OF CATERPILLAR BACKHOE.
RECOMMENDATION: That the City Council:
1) Approve the purchase of the Caterpillar 416 Backhoe from Quinn Cat in the amount of $149,884.37, and
2) Approve the trade in of the 1986 Case 580 Super K backhoe for the estimated value of $7,500 which will reduce the purchase price to $142,384.37, and 3) Adopt Resolution 2025-61, A Resolution of the City Council of the City of Calimesa, California, Amending the FY 2025-26 Budget to Include an Adjustment of $142,384.37 into Vehicle Fund
75. 9. APPLICATION FOR COUNTY OF RIVERSIDE COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM APPLICATION FOR CITY OF CALIMESA 2026-2027 COOPERATING CITY ALLOCATION.
RECOMMENDATION: That the City Council approve the application requesting County of Riverside Community Development Block Grant Program (CDBG) Application for City of Calimesa 2026-2027 Cooperating City Allocation for the construction of Americans with Disabilities (ADA) Ramp Replacements at the Intersections of East Avenue L and Douglas Street and Bryant Street and Green Tree Circle.
10. PROFESSIONAL SERVICES AGREEMENT FOR GENERAL PLAN GEOGRAPHIC INFORMATION SYSTEMS “GIS” MAPPING AND MANAGEMENT SERVICES BETWEEN THE CITY OF CALIMESA AND ALBERT A. WEBB ASSOCIATES, INC (“WEBB” OR “CONSULTANT”).
RECOMMENDATION: That the City Council approve the Professional Services Agreement for General Plan GIS Mapping and Management Services between the City of Calimesa and Albert A Webb Associates and authorize the Mayor to execute the Agreement.
CALIMESA CHAMBER OF COMMERCE REPORT
BUSINESS ITEMS
11. APPROVAL OF A NON-BINDING MEMORANDUM OF UNDERSTANDING (MOU) BETWEEN
THE CITIES OF BEAUMONT, BANNING, CALIMESA, AND THE MORONGO BAND OF
MISSION INDIANS TO COLLABORATE ON A LONG-TERM REGIONAL ANIMAL CONTROL SOLUTION.
RECOMMENDATION: That the City Council authorize the City Manager to execute the NonBinding Memorandum of Understanding (“MOU”) with the Cities of Beaumont and Banning and the Morongo Band of Mission Indians to continue collaborative discussions toward the potential formation of a regional Joint Powers Authority (JPA) for animal control services.
12. CITY COUNCIL REGIONAL ORGANIZATION APPOINTMENTS.
RECOMMENDATION: That the City Council review the Council Regional Organization Assignments list and that the Mayor determine and assign the 2026 representatives.
MAYOR & COUNCIL MEMBER REPORTING OF COUNTY & REGIONAL MEETINGS/CONFERENCES This is the time for general comments, announcements, reports on meetings attended at public expense as required by AB 1234, requests of staff, and other issues of concern to Council Members may be presented briefly at this time. The Council may not legally take action on any item presented at this time other than to direct staff to investigate a complaint or place an item on a future agenda unless (1) by a majority vote, the Council determines that an emergency situation exists, as defined by Government Code § 54956.5 or (2) by a four-fifths vote, the Council determines that there is a need for immediate action and the need for action arose subsequent to the agenda being posted as required by Government Code § 54954.2(b).
Regular Meeting of the Calimesa City Council
Monday, December 15, 2025
CITY MANAGER COMMENTS & REPORTS
ADJOURNMENT
Adjourn to the Regular Meeting of the City Council on Tuesday, January 20, 2025 at 6:00 p.m.
City Council Meeting
Agenda Report
Agenda Item No. 1
SUBJECT: APPROVAL OF CITY COUNCIL MEETING MINUTES
MEETING DATE: December 15, 2025
PREPARED BY: Darlene Gerdes, Deputy City Manager/City Clerk RECOMMENDATION: That the City Council approve the action minutes as presented for the Regular City Council Meeting of December 1, 2025.
ATTACHMENTS:
Attachment A: City Council action minutes of December 1, 2025 regular meeting
City Council Meeting
Agenda Report
Agenda Item No. 2
SUBJECT: APPROVAL OF COMMISSION MEETING MINUTES
MEETING DATE: December 15, 2025
PREPARED BY: Darlene Gerdes, Deputy City Manager/City Clerk RECOMMENDATION: That the City Council approve the action minutes as presented for the Library Commission regular meeting of November 4, 2025, the Parks, Trails & Community Services Commission special meeting of September 17, 2025, the Parks, Trails & Community Services Commission regular meeting of October 1, 2025 and Planning Commission regular meeting minutes of October 13, 2025.
ATTACHMENTS:
Attachment A: Library Commission action minutes of November 4, 2025.
Attachment B: Parks, Trails & Community Services action minutes of September 17, 2025 Attachment C: Parks, Trails & Community Services action minutes of October 1, 2025 Attachment D: Planning Commission action minutes of October 13, 2025.
City Council Meeting
Agenda Report
Agenda Item No. 3
SUBJECT: APPROVAL OF WARRANT REGISTER
MEETING DATE: December 1, 2025
PREPARED BY: Celeste Reid, Finance Director
RECOMMENDATION: That the City Council approve the Warrant Register as presented.
SUMMARY: The attached Check Register Report for City Council’s approval is as follows:
a) Check Register Report with a total of $475,924.89 (Check Nos.44634- 44705) b) December 1, 2025 Council Payroll of $3,767.75
December 4, 2025 Payroll of $154,691.34
City Council Meeting
Agenda Report
Agenda Item No. 4
SUBJECT: COUNCIL TRAVEL, TRAINING AND MEETING/MILEAGE
EXPENSES
MEETING DATE: December 15, 2025
PREPARED BY: Darlene Gerdes, Deputy City Manager/City Clerk RECOMMENDATION: That the City Council approve the Council Travel, Training and Meeting/Mileage Expenses Report through November 30, 2025.
ATTACHMENTS:
Attachment A: Council Travel, Training and Meeting/Mileage Expenses Report through November 30, 2025.
FISCAL YEAR 2025-26
COUNCIL TRAVEL AND MEETING/MILEAGE EXPENSES
ATTACHMENT 4A
MEETING/MILEAGE 01-1100-7590
DATE DESCRIPTION AMOUNT DATE DESCRIPTION AMOUNT
10-Sep Beaumont State of the City $ 75.00
TOTAL TRAVEL/TRAINING $ - TOTAL MEETING/MILEAGE $ 75.00 REMAINING BALANCE $ 1,450.00 REMAINING BALANCE $ 525.00 MEETING/MILEAGE 01-1100-7590
DATE DESCRIPTION AMOUNT DATE DESCRIPTION AMOUNT
10-Sep Beaumont State of the City $ 75.00
TOTAL TRAVEL/TRAINING $ - . $ 75.00
REMAINING BALANCE $ 1,450.00 REMAINING BALANCE $ 525.00
JEFF CERVANTEZ TRAVEL - MEETING/MILEAGE EXPENSES
TRAVEL/TRAINING 01-1100-7585
ERIC CUNDIEFF TRAVEL - MEETING/MILEAGE EXPENSES
TRAVEL/TRAINING 01-1100-7585
FISCAL YEAR 2025-26
COUNCIL TRAVEL AND MEETING/MILEAGE EXPENSES
ATTACHMENT 4A
MEETING/MILEAGE 01-1100-7590
DATE DESCRIPTION AMOUNT DATE DESCRIPTION AMOUNT
19-Aug LOCC Annual Conference - Oct 2025 $ 725.00 10-Sep Beaumont State of the City $ 75.00 LOCC Hotel for Conference - Oct 2025 $ 714.88 9/8/2025 Riverside Division League Mtg $ 60.00 Conference Mileage $ 121.80
TOTAL TRAVEL/TRAINING $ 1,561.68 TOTAL MEETING/MILEAGE $ 135.00 REMAINING BALANCE $ (111.68) REMAINING BALANCE $ 465.00 MEETING/MILEAGE 01-1100-7590
DATE DESCRIPTION AMOUNT DATE DESCRIPTION AMOUNT
1-Jul LOCC Annual Conference - Oct 2025 $ 675.00 10-Sep Beaumont State of the City $ 75.00 8-Oct LOCC Conference Mileage $ 100.80 8-Sep LOCC Riverside Division Meeting $ 60.00 TOTAL TRAVEL/TRAINING $ 775.80 TOTAL MEETING/MILEAGE $ 135.00 REMAINING BALANCE $ 1,950.00 REMAINING BALANCE $ 600.00
LINDA MOLINA TRAVEL - MEETING/MILEAGE EXPENSES
TRAVEL/TRAINING 01-1100-7585
EDGAR GARCIA TRAVEL - MEETING/MILEAGE EXPENSES
TRAVEL/TRAINING 01-1100-7585
FISCAL YEAR 2025-26
COUNCIL TRAVEL AND MEETING/MILEAGE EXPENSES
ATTACHMENT 4A
MEETING/MILEAGE 01-1100-7590
DATE DESCRIPTION AMOUNT DESCRIPTION AMOUNT
TOTAL TRAVEL/TRAINING $ - TOTAL MEETING/MILEAGE $ -
REMAINING BALANCE $ 1,450.00 REMAINING BALANCE $ 600.00
JOHN MANLY TRAVEL - MEETING/MILEAGE EXPENSES
TRAVEL/TRAINING 01-1100-7585
City Council Meeting
Agenda Report
Agenda Item No. 5
SUBJECT: TREASURER’S REPORT FOR THE MONTH ENDED
October 31, 2025
MEETING DATE: December 15, 2025
PREPARED BY: Celeste Reid, Finance Director and Treasurer RECOMMENDATION: That the City Council receive and file the Investment Report for the month ended October 31, 2025.
BACKGROUND: Pursuant to Council Resolution No. 2025-50 approved on September 15, 2025, the monthly Treasurer’s Report is hereby submitted. The report complies with the aforementioned Council resolution, as well as Government Code Section 53646.
DISCUSSION: The investment report provides information in accordance with the Investment Policy approved by Council Resolution No. 2024-60. Information includes the reporting of realized and unrealized gain and loss activity for the respective month of reporting. Generally, unrealized gains and losses are the day-to-day increases or decreases in an assets value. Until an investment is sold for cash, the gains or losses remain unrealized. Realized gains and losses reflect the results of selling of investments and are the difference between the cost basis and the market value as of the transaction date of sale. The City will continually have reportable changes of unrealized gain and loss activity between cost basis and market value as underlying investments are subject to the variability of market conditions. Staff evaluates investment options on an ongoing basis to ensure reasonable access to funds and reserves are set aside to maintain availability of cash position for general operations and capital assets.
Significant transactions during the month include quarterly LAIF interest earnings of $300,197 on October 14, 2025.
FISCAL IMPACT Revenue of $311,458 of interest and dividend earnings was recognized for Checking Sweep account, LAIF, CFD and Successor Agency funds.
ATTACHMENTS:
Attachment A: Treasurer’s Report for the month ended October 31, 2025.
CITY COUNCIL MEETING
AGENDA REPORT
Agenda Item No. 6
SUBJECT: RECEIVE AND FILE THE FISCAL YEAR 2024-25 ANNUAL AUDITED
FINANCIAL STATEMENTS AND RELATED REPORTS
MEETING DATE: December 15, 2025
PREPARED BY: Celeste Reid, Finance Director and Treasurer RECOMMENDATION: That City Council receive and file the Fiscal Year 2024-25 Annual Audit Report and Financial Statements, the 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 , and the Auditors’ Communication with Those Charged with Governance (SAS 114) and Agreed Upon Procedures Applied the Appropriations Limitation Prescribed by Article X111-B of the California Constitution.
DISCUSSION: The firm of Rogers, Anderson, Malody and Scott, LLP (RAMS) performs the independent annual financial audit for the City of Calimesa. The audit is required to be performed in accordance with generally accepted accounting principles and Government Auditing Standards. At the conclusion of the audit test work, the audit firm issues an opinion as to the fairness of presentation of the financial position of City governmental activities, each major fund, and the aggregate remaining fund information of the City. The City of Calimesa received a clean unmodified opinion on the financial statements. This indicates that in the auditor’s opinion, the information reported in the financial statements is presented fairly in all material respects the aggregate financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the City as of June 30, 2025. The audit firm is also required to issue a report related to internal controls and provide written communication to the Council on matters regarding how the audit was planned and conducted (SAS 114 report). These additional reports indicate there were no additional matters to address as a result of the audit.
All reports will be made available to the public on the City’s website on or before December 31, 2025.
A review of financial reporting through fiscal year June 30, 2025 and the City’s updated financial information for Fiscal Year 2025-26 will be provided as a mid-year budget review to City Council in February 2026.
ATTACHMENTS:
Attachment A: Annual Audit Report and Financial Statements for the year ended June 30, 2025 and 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
Attachment B: Auditors’ Communication with Those Charged with Governance (SAS 114) for the year ended June 30, 2025
Attachment C: Agreed Upon Procedures Applied the Appropriations Limitation Prescribed by Article X111-B of the California Constitution
City of Calimesa
Calimesa, California
Annual Audit Report and
Financial Statements
For the year ended June 30, 2025
Attachment 6A
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City of Calimesa
Annual Audit Report and Financial Statements
For the Year Ended June 30, 2025
-iTable of Contents
Page
Table of Contents ......................................................................................................................... i
FINANCIAL SECTION
Independent Auditor’s Report ................................................................................................. 1 Management Discussion and Analysis ................................................................................... 4 Basic Financial Statements:
Government-Wide Financial Statements:
Statement of Net Position ............................................................................................. 16 Statement of Activities ................................................................................................... 17 Fund Financial Statements:
Governmental Fund Financial Statements:
Balance Sheet ......................................................................................................... 19 Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide Statement of Net Position ...................................................... 20 Statement of Revenues, Expenditures and Changes in Fund Balances ................. 21 Reconciliation of the of Revenues, Expenditures and Changes in Fund Balances of the Governmental Funds to the Statement of Activities ......... 22 Fiduciary Fund Financial Statements:
Statement of Fiduciary Net Position .............................................................................. 24 Statement of Changes in Fiduciary Net Position ........................................................... 25 Notes to Basic Financial Statements ........................................................................................ 26 Required Supplementary Information:
Schedule of Changes in the Net Pension Liability and Related Ratios – Last 10 Years ..... 54 Schedule of Pension Contributions – Last 10 Years ........................................................... 55 Note to the Required Supplementary Information ............................................................... 56 Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual:
General Fund ................................................................................................................ 57 Mitigation Fees Special Revenue Fund ........................................................................ 58
City of Calimesa
Annual Audit Report and Financial Statements
For the Year Ended June 30, 2025
-iiSupplementary Information:
Major Capital Projects Funds:
Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual:
Capital Projects Including ARPA Capital Projects Fund ........................................... 59 Traffic Improvement Fees Capital Projects Fund ...................................................... 60 Non-Major Governmental Funds:
Combining Balance Sheet ............................................................................................. 61 Combining Statement of Revenues, Expenditures and Changes in Fund Balances .... 63 Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual:
Supplemental Law Enforcement Grant Special Revenue Fund .............................. 65 Housing Rehab – State Special Revenue Fund ....................................................... 66 Library Special Revenue Fund ................................................................................ 67 Transportation Air Quality Improvement Special Revenue Fund ............................ 68 Gas Tax Special Revenue Fund ............................................................................. 69 Measure A Fund Special Revenue Fund ................................................................. 70 Lighting/Landscape District Special Revenue Fund ................................................ 71 Recycling Special Revenue Fund ........................................................................... 72 Housing Rehab – Federal Special Revenue Fund ................................................... 73 Road Maintenance and Rehab Special Revenue Fund .......................................... 74 General Capital Projects Capital Projects Fund ....................................................... 75 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 ........................................................................................ 76
Tel. 909-889-0871 | www.ramscpa.net | 735 E. Carnegie Dr. Suite 100, San Bernardino, CA 92408
CERTIFIED PUBLIC ACCOUNTANTS
1 Independent Auditor’s Report
To the Honorable Mayor and Members of City Council
City of Calimesa, California
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the City of Calimesa (the City), as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.
In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the City, as of June 30, 2025, and the respective changes in financial position thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States (Government Auditing Standards).
Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Emphasis of Matter
As described in Note 1 to the financial statements during the year ended June 30, 2025, the City adopted new accounting guidance under Governmental Accounting Standards Board (GASB) Statement No. 101, Compensated Absences and No. 102, Certain Risk Disclosures. Our opinions are not modified with respect to these matter.
Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events considered in the aggregate, that raise substantial doubt about City’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.
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Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS and Government Auditing Standards, we:
Exercise professional judgment and maintain professional skepticism throughout the audit. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, no such opinion is expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about City’s ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the required supplementary information, as listed in the table of contents, be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with GAAS, 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.
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Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The combining and individual nonmajor fund financial statements, as listed in the table of contents, are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with GAAS. In our opinion, the accompanying supplementary information is fairly stated, in all material respects, in relation to the basic financial statements as a whole.
Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 8, 2025 on our consideration of City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of 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 City’s internal control over financial reporting and compliance.
San Bernardino, CA
December 8, 2025
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City of Calimesa
Management Discussion and Analysis
For the Year Ended June 30, 2025
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This section provides the reader with a narrative introduction and a readily understandable analytical overview of the City of Calimesa’s (City) financial activities and performance for the fiscal year ended June 30, 2025. Summary reports showing comparisons of current financial information with that of the previous year are included to enhance the clarity and usefulness of the reports. To gain a broad perspective of the City and its financial activities, we encourage the reader to consider the information presented here in conjunction with the information that we have provided in the letter of transmittal presented at the beginning of this report.
FINANCIAL HIGHLIGHTS
At June 30, 2025, the City assets and deferred outflows of resources exceeded its liabilities and deferred inflows of resources by $68.7 million. Approximately 65% of this amount is invested in capital assets (net of related debt) and therefore not available to meet the City’s ongoing operations.
During the fiscal year, the City’s net position increased by $5.2 million. At June 30, 2025, the City’s governmental funds reported combined ending fund balance of $24.8 million, a decrease of approximately $1.3 million compared to prior fiscal year. At June 30, 2025, the City’s General Fund reported ending fund balance of $8.7 million, a decrease of approximately $670,000 compared to prior fiscal year.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis are intended to serve as an introduction to the City’s basic financial statements, which consists of three components: 1) Government-Wide Financial Statements, 2) Fund Financial Statements, and 3) Notes to Basic Financial Statements. Required Supplementary Information is included in addition to the basic financial statements.
Government-Wide Financial Statements
The Government-Wide Financial Statements provide a broad view of the City’s financial position and activities, in a manner similar to private-sector business reporting. The Government-Wide Financial Statements include the Statement of Net Position and the Statement of Activities.
The Statement of Net Position presents information on all of the City’s assets, deferred outflows of resources, liabilities, and deferred inflows of resources with the differences reported as Net Position. This statement reports all assets, deferred outflows of resources, liabilities, and deferred inflows of resources using the accrual basis of accounting. Increases and decreases in Net Position serve as useful indicator of whether the financial position of the City is improving or deteriorating.
City of Calimesa
Management Discussion and Analysis
For the Year Ended June 30, 2025
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OVERVIEW OF THE FINANCIAL STATEMENTS, Continued
Government-Wide Financial Statements, Continued
The Statement of Activities provides information on how the City’s Net Position changed during the fiscal year. All changes in Net Position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of the related cash flows. All revenues earned and expenses incurred during the fiscal year are reported in this statement, regardless of timing of related cash flows.
The Government-Wide Financial Statements present governmental activities only because the City does not have business-type activities. The governmental activities of the City include general government, public safety, public works, parks and senior center, community services and development, and library. Property and local taxes, investment earnings, charges for services, operating and grants and contributions finance these activities.
Fund Financial Statements
Funds are groupings of related accounts that are used to maintain control over resources that have been segregated for specific activities or objectives. The City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. The funds of the City can be divided into two categories: governmental funds and fiduciary funds.
Governmental Fund Financial Statements are used to report basically the same functions as governmental activities in the Government-Wide Financial Statements. However, unlike the Government-Wide Financial Statements, Governmental Fund Financial Statements focus on near-term inflows and outflows of spendable resources, as well as the available balances of spendable resources at the end of the fiscal year. This information may be useful in assessing the City’s near-term financial requirements.
To better understand the City’s long-term and near-term financial requirements, it is useful to compare the information presented for governmental funds with the information provided for governmental activities in the Government-Wide Financial Statements. Both the governmental funds balance sheet and statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate the comparison between governmental funds and governmental activities.
The City reports 16 governmental funds. The major governmental funds are the General Fund, Mitigation Fees Fund, Capital Projects Including American Rescue Plan Act (ARPA) Capital Projects Fund and the Traffic Improvement Fees Fund, which are presented separately in the Governmental Fund Financial Statements. Information on the other governmental funds is combined into a single aggregated presentation as non-major governmental funds. Individual fund data for each non-major governmental fund is provided in the form of combining statements as supplementary information elsewhere in the report.
City of Calimesa
Management Discussion and Analysis
For the Year Ended June 30, 2025
-6-
OVERVIEW OF THE FINANCIAL STATEMENTS, Continued
Government-Wide Financial Statements, Continued
Fiduciary funds are used to account for resources held for the benefit of parties external to the City. These funds are not included in the Government-Wide Financial Statements because the resources of the fiduciary funds are not available to support the City’s own programs. The City’s Fiduciary Fund Financial Statements provide financial information about the activities of the Community Facility Assessment Districts, for which the City acts solely as an agent. The City’s fiduciary funds are presented as an agency fund that accounts for the aggregate activity in the City’s Community Facilities Districts (CFD) and mitigation fees collected on behalf of the Western Riverside County Regional Conservation Authority and a private purpose trust fund to account for the activity of the Successor Agency to the City.
Notes to Basic Financial Statements
The Notes to Basic Financial Statements provide additional information that is essential to a full understanding of the data provided in the Government-Wide and Fund Financial Statements.
Supplementary Information
The Required Supplementary Information includes budgetary comparison schedules for the General Fund and the Mitigation Fees Fund.
Combining and individual fund statements and schedules provide information for non-major governmental funds and are presented immediately following the Required Supplementary Information.
City of Calimesa
Management Discussion and Analysis
For the Year Ended June 30, 2025
-7-
GOVERNMENT-WIDE FINANCIAL ANALYSIS
The following table shows the condensed comparative Statement of Net Position for the fiscal years ended June 30, 2025 and 2024.
2025 2024
Assets:
Cash and investments $ 25,856,786 $ 26,893,310
Other assets 4,170,429 4,467,328
Capital assets, net 46,299,132 39,537,288
Total Assets 76,326,347 70,897,926
Deferred Outflows of Resources:
Deferred outflow - pension related 513,745 640,994
Total Deferred Outflows of Resources 513,745 640,994
Liabilities:
Other liabilities 5,295,336 5,210,413
Long-term liabilities 2,837,786 2,840,481
Total Liabilities 8,133,122 8,050,894
Deferred Inflows of Resources:
Deferred inflow - pension related amounts 9,196 30,340
Total Deferred Inflows of Resources 9,196 30,340
Net Position:
Net Investment in Capital Assets 44,738,820 38,255,473
Restricted 16,042,032 16,741,233
Unrestricted 7,916,922 8,460,980
Total Net Position $ 68,697,774 $ 63,457,686
Comparative Statements of Net Position
June 30, 2025 and 2024
Governmental Activities
City of Calimesa
Management Discussion and Analysis
For the Year Ended June 30, 2025
-8-
GOVERNMENT-WIDE FINANCIAL ANALYSIS, (Continued)
Net Position may serve over time as a useful indicator of the City’s financial position. The City’s assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $68 million. This is an increase of $5 million or 8% over the prior fiscal year. The reasons for this increase are detailed below in the Comparative Statements of Activities and Changes in Net Position.
The largest portion of the City’s Net Position, $44 million, or 65%, is net investment in capital assets. The City uses these capital assets to provide services to residents; consequently, they are not available for future spending. There is outstanding debt of $1 million with relation to capital assets.
A portion of the City’s Net Position, $16 million, or 23%, represents resources subject to external restrictions and may only be used for the purpose intended by the entities that provided these funds to the City.
The balance of the City’s Net Position of $8 million, or 12%, represents unrestricted Net Position, which may be used to finance daily operations without constraints established by debt covenants or other legal requirements.
The City’s cash and investments decreased by $1 million from the prior year.
City of Calimesa
Management Discussion and Analysis
For the Year Ended June 30, 2025
-9-
GOVERNMENT-WIDE FINANCIAL ANALYSIS, (Continued)
The following table shows the condensed comparative Statements of Activities and Changes in Net Position for the fiscal years ended June 30, 2025 and 2024. 2025 2024
Revenues:
Program revenues:
Charges for services $ 893,394 $ 1,193,168
Operating grants and contributions 1,933,551 2,042,107
Capital grants and contributions 5,020,965 6,190,905
Total program revenues 7,847,910 9,426,180
General revenues:
Taxes:
General property taxes 4,727,845 4,671,922
Sales tax 1,658,378 1,677,534
Motor vehicle in-lieu 1,629,512 1,555,252
Franchise fees 609,496 600,897
Transient occupancy tax 62,813 58,549
Business Licenses 35,332 47,090
Unrestricted investment earnings 1,118,054 960,773
Unrealized loss on investments 135,573 316,186
Other 63,412 44,063
Total general revenues 10,040,415 9,932,266
Total Revenues 17,888,325 19,358,446
Expenses:
General government 2,894,210 2,232,306
Public safety 6,751,534 5,924,033
Public works, parks and senior center 2,202,673 3,277,504 Community development 670,797 622,716
Library 44,520 34,133
Interest on long-term liabilities 84,503 34,478
Total Expenses 12,648,237 12,125,170
Increase in net position 5,240,088 7,233,276
Net position - beginning of year 63,457,686 56,224,410
Net position - end of year $ 68,697,774 $ 63,457,686
For the years ended June 30, 2025 and 2024
Governmental Activities
Comparative Statements of Activities and Changes in Net Position
City of Calimesa
Management Discussion and Analysis
For the Year Ended June 30, 2025
-10-
GOVERNMENT-WIDE FINANCIAL ANALYSIS, (Continued)
The City’s expenses totaled $12.7 million in fiscal year 2024-25. These expenses were funded by program revenues of $7.8 million and general revenues of $10 million. This resulted in an increase in Net Position of $5.2 million.
Program Revenues – Program Revenues include fees and other specific charges designed to support the costs of programs provided to residents, as well as revenues related to operating activity, capital improvements and new development. Charges for services decreased by $300,000 due to a decrease in development related activity including reduction in revenues for building permits. Operating Grants and Contributions decreased $100,000 due to a reduction of public safety operating revenue transfer from the Public Services CFD from the prior year. Capital grants and contributions decreased by $1.2 million due to a reduction from prior year of developer capital contribution for the City’s Fire Department ladder truck. Overall, program revenues decreased by $1.6 million.
General Revenues – The overall increase from the prior year is approximately $100,000, or 1%.
This minor change in general revenues reflects the nature of reduced development growth in Calimesa, which is consistent with the prior year also reflecting minor growth.
Expenses – The overall increase from the prior year is approximately $523,000 or a 4.3% increase. Significant changes include combined increases from prior year of $1.6 million in general government, public safety and community development. Decreases from prior year of $1.1 million are reflected in the Public Works, Parks and Senior Center.
FUND FINANCIAL ANALYSIS
Governmental Funds
The City’s governmental funds provide information on short-term inflows, outflows, and balances of spendable resources. This information is useful in evaluating the City’s financing requirements.
Unreserved fund balance may serve as a useful measure of the government’s net resources available for spending at the end of fiscal year.
At June 30, 2025, the City’s combined governmental fund balances were $24.8 million, a decrease of $1.3 million, or 5%, from the prior fiscal year. Of this amount, approximately $16.2 million represents nonspendable and restricted fund balance, $3.6 million represents committed fund balance, and $247,160 represents assigned fund balance. The balance represents unassigned fund balance of $4.8 million.
City of Calimesa
Management Discussion and Analysis
For the Year Ended June 30, 2025
-11-
FUND FINANCIAL ANALYSIS, (Continued)
The City’s governmental revenues in fiscal year 2024-25 were $17.8 million, which is a decrease of $1.5 million from the prior year. Significant variations include a reduction from the prior year of $3 million for contributions to support the acquisition of property for a flood control project and a $1.7 million developer contributions for the Fire Department ladder truck. Increases offset reductions in revenue with an increase in developer contributions of approximately $3.2 million, the majority of which supports the development phases of the Cherry Valley Interchange project.
It should be noted that most of the significant fluctuations from year to year represent activity that is one time in nature and subject to capital acquisitions and projects. The City had variances in other revenue categories however, the net impact was minimal.
The City’s governmental expenditures in fiscal year 2024-25 were $19.2 million, an increase of approximately $500,000, or 2% from fiscal year 2023-24. Significant variations include a reduction from the prior year of $3 million in public safety category for the acquisition of three Fire Department vehicles placed into service, the Ladder Truck, Monarch Pumper and Command Vehicles, with an increase of approximately $2.8 million in the public works category with significant expenditures for the Cherry Valley Interchange and County Line Road LPP roundabout projects. Other increases from prior year are combined at approximately $600,000 in general government, community service and develop and library categories.
The following provides an analysis of the City’s major funds:
General Fund
The General Fund is the primary operating fund of the City. At June 30, 2025, the General Fund had a total fund balance of $8.7 million which consisted of nonspendable fund balance of $130,000, committed fund balance of $3.6 million representing amounts set aside by City Council for emergencies and economic stability, calculated as 30% of annual operating expenditures and committed fund balance for equipment replacement, calculated as 5% of annual operating expenditures, and a calculated balance of Mobile Home Rent Control committed funds for this respective purpose. Assigned fund balance includes insurance of $108,504 and $75,000 set by City Council to support parks and trails in the City of Calimesa. The remaining unassigned fund balance is $4.8 million.
The net change in the fiscal year 2024-25 fund balance of the City’s General Fund decreased by $670,000. Revenues exceeded expenditures by $20,000, while other financing sources and uses of resulted in a net decrease of $691,000. Revenues decreased by $2 million and expenditures decreased by $2 million from the prior year.
The decrease in revenues of $2 million over prior year was a result of decreases in most revenue categories with two offsetting increases. The increase in categories include $265,000 in taxes and licenses and permits. The decreases in other categories total $2.2 million, the most significant portions include intergovernmental revenues decrease of $300,000 and developer fees decrease of $1.7 million, which represents the developer contribution for the Ladder Truck from the prior year.
City of Calimesa
Management Discussion and Analysis
For the Year Ended June 30, 2025
-12-
FUND FINANCIAL ANALYSIS, (Continued)
General Fund, (Continued)
The decrease in expenditures of $2 million is a net result of increases and decreases in expenditure categories. Increases include approximately $1 million in total from general government, public works, parks and senior center, and community service and development.
Decreases of $3 million are from the public safety category that occurred in the prior year for the acquisition of three Fire Department vehicles which are the Ladder Truck, Monarch Pumper and Command Vehicle.
Mitigation Fees – Special Revenue Fund
The Mitigation Fee Fund accounts for revenue from development impact fees and grants to be used for facilities including storm drain, parks, library, public safety and general government.
These fees are used to mitigate the impacts of new development. Activity in the fund will vary from year to year based upon the timing of development moving forward and capital projects managed within the mitigation fee funds. The revenue in this fund is typically collected prior to the issuance of a building permit for new construction and is subject to timing of development.
Expenditures can vary greatly from year to year as city-initiated projects for infrastructure and equipment purchases are moved forward. The activity for Mitigation Fees for Traffic Improvements fees is reported in a separate fund from total Mitigation fees fund as this fund reports significant capital projects for streets and interchange improvements. Mitigation Fees - Special Revenue Fund resulted in a decrease in fund balance of $1.1 million with a total fund balance of $9.5 million. The most significant activity in the fund was in relation to the park fund with $1.7 million in expenditures for the Mountainview Park project and a $326,000 transfer from the general fund to support future debt service payments for fire truck capital lease payments.
Capital Projects Including ARPA – Capital Projects Fund The Capital Projects Including ARPA Fund accounts for significant capital projects and revenues received for the American Rescue Plan act for which funds have been used eligible purpose and other funded projects for the City which are primarily funded through the general fund contributions or other special revenue funds for specific purpose to projects. The total amount of ARPA revenue recognized in fiscal year 2024-25 is $350,532. The entirety of the APRA funding was used for the Citywide Pavement Management program and all ARPA funds are fully expended through June 30, 2025. Other significant capital improvement projects include roof replacement at fire and city hall facilities and new restrooms in the senior center and improvements to increase space and staff capacity in city facilities. The total fund balance as of June 30, 2025, is $1 million.
City of Calimesa
Management Discussion and Analysis
For the Year Ended June 30, 2025
-13-
Traffic Improvement Fees – Capital Projects Fund
The Traffic Improvement Fees – Capital Projects Fund accounts for funding from Mitigation Fee Revenue as well as most other sources of intergovernmental agency revenue, grants revenue and developer contribution and expenditures as they relate to capital projects for significant interchange improvements, major street improvements and streets maintenance. The most significant revenues and related expenditures were for the County Line Road Improvement project and the Cherry Valley Interchange project. Total fund balance as of June 30, 2025 is $2.3 million.
GENERAL FUND BUDGETARY HIGHLIGHTS
The budgetary comparison schedule for the General Fund is presented in the Required Supplementary Information. The General Fund final budget for fiscal year 2024-25 was $10.5 million in revenues and $11.6 million in expenditures. The final budget included amendments throughout the year which were a result of changes in response to services for the city and carryover of prior year capital projects and one-time expenditures from fiscal year 2023-24. Most carryover projects from fiscal year 2023-24 were completed in fiscal year 2024-25. Budget to actual revenues had variances of $250,000 more than budget. Budget to actual expenditures have variances of $916,000 below budget. Similar to prior fiscal years, City Council approved in the annual budget process certain appropriations budgeted for in fiscal year 2024-25 that were not completed may be re-budgeted to fiscal year 2025-26.
CAPITAL ASSETS AND LONG-TERM OBLIGATIONS
Capital Assets
The City’s capital assets include those assets that are used in the performance of the City’s services. At June 30, 2025, the City’s capital assets used in governmental activities amounted to $46.3 million, net of amortization and depreciation.
Capital assets for governmental activities are presented below to illustrate changes from prior fiscal year:
2025 2024
Land 5,609,531 $ $ 5,609,531
Construction in Progress 13,356,258 8,859,247
Buildings and Improvements 8,917,702 5,288,504
Machinery and equipment 5,444,938 5,247,852
Infrastructure:
Road Network 23,119,665 23,119,665
Right-to-use assets - equipment 113,918 113,918
Right-to-use assets - subscriptions 106,469 106,469
Capital assets before depreciation 56,668,481 48,345,186 Less: accumulated depreciation (excludes land) (10,369,349) (8,807,898) Total net capital assets $ 46,299,132 $ 39,537,288
Governmental Activities
City of Calimesa
Management Discussion and Analysis
For the Year Ended June 30, 2025
-14-
CAPITAL ASSETS AND LONG-TERM OBLIGATIONS (Continued)
Additional information on capital assets can be found in Note 4 to the Basic Financial Statements.
Long-term Obligations
At June 30, 2025, the City had long-term liabilities outstanding of $1.5 million. Additional information on long-term obligations is provided in Note 5 to the Basic Financial Statements.
The City’s long-term debt obligations at June 30, 2025 and 2024 were as follows:
2025 2024
Compensated absences $ 473,552 $ 263,070
Finance purchase agreements 972,035 1,106,238
Lease liabilities 30,106 58,282
Subscription liabilities 53,507 98,171
Total
$ 1,529,200 $ 1,525,761
Governmental Activities
Not included in the above total outstanding debt amount is the Successor Agency Trust. At June 30, 2025, there was $1.79 million bond debt outstanding. Additional information on the Successor Agency Trust is provided in Note 9 to the Basic Financial Statements.
ECONOMIC FACTORS AND NEXT YEAR’S BUDGET
The City’s adopted budget for fiscal year 2025-26 recognized that:
The adopted budget reflects cautious and moderate revenue estimates given variable factors in local economic and inflationary projections. The City continues to focus on the opportunity to increase revenues through growth of property and sales tax resources which will be key to sustaining service levels and longterm fiscal stability as well as seeking out grants available from other agencies to support park improvements, traffic projects and public safety.
The General Fund adopted budget for fiscal year 2025-26 provides a structural surplus, meaning that ongoing revenues exceed ongoing expenditures. The budget includes transfers to other funds to be used for one-time capital project spending. The City Council continues to maintain a responsible fiscal policy through fiscal year 2025-26 adopted budget. In fiscal year 2025-26, the City will have progress in several infrastructure and street improvement projects including the County Line corridor improvement plan, traffic interchange projects, and the Mountainview Park improvement project.
City of Calimesa
Management Discussion and Analysis
For the Year Ended June 30, 2025
-15-
REQUEST FOR INFORMATION
This financial report is designed to provide residents, taxpayers, customers, investors, and creditors with a general overview of the City’s finances. Questions concerning any information provided in this report or requests for additional information should be addressed to the City of Calimesa, Finance Department, 908 Park Avenue, Calimesa, California 92320.
BASIC FINANCIAL STATEMENTS
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GOVERNMENT WIDE FINANCIALS
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City of Calimesa
Statement of Net Position
June 30, 2025
The accompanying notes are an integral part of these financial statements. -16-
Governmental
Activities
Assets
Cash and investments 25,856,786 $
Receivables:
Taxes and other 561,572
Intergovernmental 807,345
Interest 322,873
Loans 767,679
Retentions 1,521,382
Prepaid expenses 129,561
Due from the Successor Agency 60,017
Capital assets not being depreciated 18,965,789
Capital assets being depreciated, net 27,333,343
Total Assets 76,326,347
Deferred Outflows of Resources
Deferred outflow - pension related 513,745
Total Deferred Outflows of Resources 513,745
Liabilities
Accounts payable 2,280,239
Retentions payable 504,664
Accrued payroll 26,303
Unearned revenue 1,543,618
Deposits 842,659
Interest payable 97,853
Noncurrent liabilities:
Due within one year 290,510
Due in more than one year 1,238,690
Net pension liability 1,308,586
Total Liabilities 8,133,122
Deferred Inflows of Resources
Deferred inflows - pension related 9,196
Total Deferred Inflows of Resources 9,196
Net Position
Net investment in capital assets 44,738,820
Restricted:
Legally restricted - Street and Road Improvements 810,718 Regulatory/grant restrictions 5,744,277
Legally restricted - Development Impact fees 9,487,037
Unrestricted 7,916,922
Total Net Position 68,697,774 $
City of Calimesa
Statement of Activities
For the Year Ended June 30, 2025
The accompanying notes are an integral part of these financial statements. -17-
Net (Expense)
Revenue and
Changes in Net
Program Revenues Position
Operating Capital Grants
Charges for Grants and and Governmental
Functions/Programs: Expenses Services Contributions Contributions Total Activities Primary Government:
Governmental activities:
General government 2,894,210 $ 503,168 $ - $ - $ 503,168 $ (2,391,042) $ Public safety 6,751,534 239,133 958,575 - 1,197,708 (5,553,826) Public works, parks and senior center 2,202,673 151,093 932,490 5,020,965 6,104,548 3,901,875 Community services and
development 670,797 - - - - (670,797)
Library 44,520 - 42,486 - 42,486 (2,034)
Interest on long-term liabilities 84,503 - - - - (84,503) Total governmental activities 12,648,237 $ 893,394 $ 1,933,551 $ 5,020,965 $ 7,847,910 $ (4,800,327) Taxes:
Property 4,727,845
Sales 1,658,378
1,629,512
Franchise fees 609,496
62,813
35,332
Total taxes 8,723,376
1,118,054
135,573
Other 63,412
10,040,415
5,240,088
Net position - beginning of year 63,457,686
Net position - end of year $ 68,697,774
General Revenues:
Motor vehicle in-lieu
Transient occupancy taxes
Business Licenses
Unrestricted investment earnings
Unrealized gain on investments
Total general revenues
Change in net position
FUND FINANCIAL STATEMENTS
Governmental Fund Financial Statements
Fiduciary Fund Financial Statements
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-18-
GOVERNMENTAL FUND FINANCIAL STATEMENTS
General Fund accounts for resources traditionally associated with governmental which are not required legally or by sound financial management to be accounted for in another fund.
Mitigation Fees Special Revenue Fund accounts for various sources of development related revenue including facilities fees, traffic fees, and park acquisition, flood drainage control, and improvement fees. These fees are used to expand facilities as development occurs, thus mitigating a portion of the impacts associated with development.
Capital Projects including ARPA Capital Projects Fund accounts for the City of Calimesa's major capital projects and accounts for one-time revenues received from the federal government for the American Rescue Plan Act (ARPA), for which monies will be used for various eligible projects. ARPA was passed to provide economic relief to municipal governments.
Traffic Improvement Fees Capital Projects Fund accounts for funding from Mitigation Fee Revenue as well as most other sources of intergovernmental agency revenue, grants revenue and developer contribution and expenditures as they relate to capital projects for significant interchange improvements, major street improvements and street maintenance. This fund had previously been combined with Mitigation Fees – Special Revenue reporting, however due to the significant nature of the activity in the fund, it was determined to report this as a separate fund.
Non-Major Governmental Funds is the aggregate of all the non-major governmental funds.
City of Calimesa
Balance Sheet
Governmental Funds
June 30, 2025
The accompanying notes are an integral part of these financial statements. -19-
Special Revenue
Fund Total Nonmajor Total
Capital Projects Traffic Governmental Governmental
General Mitigation Fees Including ARPA Improvement Fees Funds Funds ASSETS
Cash and investments $ 9,614,807 $ 9,750,848 $ 1,373,166 $ 2,650,634 $ 2,467,331 $ 25,856,786 Receivables:
Taxes and other 504,001 - - - 57,571 561,572
Intergovernmental - 198,346 - 494,356 114,643 807,345
Interest 322,873 - - - - 322,873
Loans - - - - 767,679 767,679
Retentions - - - 1,521,382 - 1,521,382
Prepaid expenses 129,561 - - - - 129,561
Due from the Successor Agency 60,017 - - - - 60,017
Total Assets $ 10,631,259 $ 9,949,194 $ 1,373,166 $ 4,666,372 $ 3,407,224 $ 30,027,215
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCE
Liabilities:
Accounts payable $ 1,209,918 $ 414,727 $ 255,263 $ 354,061 $ 46,270 $ 2,280,239 Retentions payable - 47,430 84,777 372,457 - 504,664
Accrued payroll 25,917 - - - 386 26,303
Unearned revenues 23,684 - - 1,473,690 46,244 1,543,618 Deposits 647,696 - - 156,000 38,963 842,659
Total Liabilities 1,907,215 462,157 340,040 2,356,208 131,863 5,197,483 Deferred Inflows of Resources:
Unavailable revenues 1,500 - - - - 1,500
Total Deferred Inflows of Resources 1,500 - - - - 1,500
FUND BALANCES
Nonspendable 129,561 - - - - 129,561
Restricted - 9,487,037 1,033,126 2,310,164 3,211,705 16,042,032 Committed for:
Emergencies and economic stabilization 2,872,640 - - - - 2,872,640 Equipment replacement 478,773 - - - - 478,773
Mobile home rent control 283,228 - - - - 283,228
Assigned for:
Capital projects 75,000 - - - 63,656 138,656
Insurance 108,504 - - - - 108,504
Unassigned 4,774,838 - - - - 4,774,838
Total Fund Balance 8,722,544 9,487,037 1,033,126 2,310,164 3,275,361 24,828,232 Total liabilities, deferred inflows of resources
and fund balance $ 10,631,259 $ 9,949,194 $ 1,373,166 $ 4,666,372 $ 3,407,224 $ 30,027,215 Capital Projects Fund
City of Calimesa
Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide Statement of Net Position
June 30, 2025
The accompanying notes are an integral part of these financial statements. -20-
Fund balance of governmental funds $ 24,828,232
net position (page 16) are different because:
Capital assets not being depreciated $ 18,965,789
Capital assets being depreciated, net 27,333,343 46,299,132 1,500
513,745
(9,196)
Long-term liabilities are not due and payable in the current period and, therefore, are not reported in the funds:
Compensated absences (473,552)
Interest payable (97,853)
Finance purchase agreement - fire engine (137,436)
Finance purchase agreement - pumper (834,599)
Lease liabilities (30,106)
Subscription liabilities (53,507)
Net pension liability (1,308,586) (2,935,639)
Net position of governmental activities $ 68,697,774
Deferred outflows of resources related to pensions have not been reported in governmental funds.
Deferred inflows of resources related to pensions have not been reported in governmental funds.
current financial resources are classified as Deferred Inflows of Resources in the funds.
Amounts reported for governmental activities in the statement of Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds.
Revenues in the statement of activities that do not provide
City of Calimesa
Statement of Revenues, Expenditures and Changes in Fund Balances For the Year Ended June 30, 2025
The accompanying notes are an integral part of these financial statements. -21-
Special Revenue
Fund Total Nonmajor Total
Capital Projects Traffic Governmental Governmental
General Mitigation Fees Including ARPA Improvement Fees Funds Funds
REVENUES
Taxes 8,586,619 $ $ - $ - $ - $ 106,608 $ 8,693,227
Licenses and permits 358,130 - - - - 358,130
Fines and forfeitures 74,104 - - - - 74,104
Intergovernmental 55,238 26,210 350,532 1,503,845 1,233,106 3,168,931 Charges for services 921,355 - - 10,283 - 931,638
Development fees 214,370 2,189 - 14,905 - 231,464
Developer contributions - - - 3,152,284 - 3,152,284
Investment earnings 381,083 451,956 80,470 84,167 120,378 1,118,054 Unrealized gain on investments 135,573 - - - - 135,573
Other 24,920 - - - - 24,920
Total Revenues 10,751,392 480,355 431,002 4,765,484 1,460,092 17,888,325
EXPENDITURES
Current:
General government 3,019,914 8,000 - - 4,507 3,032,421
Public safety 5,981,533 16,000 - - 176,998 6,174,531
Public works, parks and senior center 1,113,808 1,794,868 2,193,672 3,683,271 524,935 9,310,554 Community services and development 615,872 - - - 1,270 617,142 Library - 8,000 - - 36,520 44,520
Debt service:
Principal - 43,000 - - - 43,000
Interest and fiscal charges - 5,774 - - - 5,774
Total Expenditures 10,731,127 1,875,642 2,193,672 3,683,271 744,230 19,227,942 Excess of Revenues Over Expenditures 20,265 (1,395,287) (1,762,670) 1,082,213 715,862 (1,339,617)
OTHER FINANCING SOURCES (USES)
Transfers in - 326,000 960,000 350,000 5,000 1,641,000
Transfers out (691,000) - - - (950,000) (1,641,000)
Total Other Financing Sources (Uses) (691,000) 326,000 960,000 350,000 (945,000) - Net Change in Fund Balances (670,735) (1,069,287) (802,670) 1,432,213 (229,138) (1,339,617) Fund Balances, Beginning of year 9,393,279 10,556,324 1,835,796 877,951 3,504,499 26,167,849 Fund Balances, End of year $ 8,722,544 $ 9,487,037 $ 1,033,126 $ 2,310,164 $ 3,275,361 $ 24,828,232 Capital Projects Fund
City of Calimesa
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of the Governmental Funds to the Statement of Activities For the Year Ended June 30, 2025
The accompanying notes are an integral part of these financial statements. -22-
Net change in fund balances - governmental funds $ (1,339,617) because:
expenditures. However, in the Government-Wide Statement of Activities, the cost of those assets was allocated over their estimated useful lives as depreciation expense. This was the amount of capital assets purchased in the current period. 8,323,295 Statement of Activities, but they did not require the use of current financial resources. Therefore, depreciation and amortization expense was not reported as expenditures in the Governmental Funds. (1,561,451)
funds, however, these amounts are reported as a deferred outflow of resources in the Government-Wide Statement of Net Position. 226,280
however, pension expense is not recognized in the governmental funds. (326,251) and this contributes to the change in fund balance. In the Statement of Net Position, however, issuing debt increases long-term liabilities and does not affect the Statement of Activities.
Repayment was an expenditure in governmental funds, but the repayment reducted long-term liabilities in the Government-Wide Statement of Net Position:
Long-term debt repayments 207,043
financial resources and, therefore, are not reported as expenditures in the governmental fund. In addition, some expenditures recorded in the governmental funds have already been expensed in the government-wide in prior years.
Change in compensated absences (210,482)
Change in interest payable (78,729)
Change in net position of governmental activities 5,240,088 $ Amounts reported for governmental activities in the statements of activities are different Issuance of long term debt is reported as other financing sources in the governmental funds Some expenses reported in the statement of activities do not require the use of current Governmental funds reported additions of capital assets as capital outlay and program Depreciation and amortization expense on capital assets was reported in the Government-Wide Current year employer pension contributions are recorded as expenditures in the governmental Pension expense is recorded as incurred in the Government-Wide Statement of Activities,
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-23-
FIDUCIARY FUND FINANCIAL STATEMENTS
Custodial Funds
Custodial Funds account for assets held by the City for unspent special assessments collected for various Community Facility Districts and mitigation fees collected on behalf of Western Riverside County Regional Conservation Authority.
Private Purpose Trust Funds
Successor Agency Trust Fund accounts for assets and liabilities transferred from the City to the Successor Agency Trust Fund.
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City of Calimesa
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2025
The accompanying notes are an integral part of these financial statements. -24-
Successor
Custodial Agency Trust
Funds Fund
ASSETS
Cash and investments 5,333,598 $ - $
Cash and investments with fiscal agent - restricted 2,101,880 207,111 Receivables:
Assessments 6,818 -
Total Assets 7,442,296 207,111
DEFERRED OUTFLOWS OF RESOURCES
Deferred loss on refunding - 61,258
Total Deferred Outflows of Resources - 61,258
LIABILITIES
Accounts payable 70,498 1,500
Accrued payroll 165 -
Unearned revenue - 6,000
Interest payable - 37,501
Due to City of Calimesa - 60,017
Noncurrent liabilities:
Due within one year - 130,000
Due in more than one year - 1,660,186
Total Liabilities 70,663 1,895,204
NET POSITION
Restricted
Debt service 7,367,197 207,111
Multiple Species Habitat Conservation Plan 4,436 -
Unrestricted (Deficit) - (1,833,946)
Total Net Position (Deficit) $ 7,371,633 $ (1,626,835)
City of Calimesa
Statement of Changes in Fiduciary Net Position
Fiduciary Funds
For the Year Ended June 30, 2025
The accompanying notes are an integral part of these financial statements. -25-
Successor
Custodial Agency Trust
Funds Fund
ADDITIONS
Special assessments 3,166,691 $ - $
Redevelopment Property Tax Trust Fund distributions - 210,319 Investment earnings 267,271 10,879
Fees collected on behalf of other agencies 18,811 -
Total Additions 3,452,773 221,198
DEDUCTIONS
Administration 117,350 12,000
Debt service payments 1,362,179 71,981
Professional services and financial services 1,499,962 - Disbursement of fees to other agencies 18,934 -
Total Deductions 2,998,425 83,981
Change in Net Position 454,348 137,217
Net Position (Deficit), Beginning of year 6,917,285 (1,764,052) Net Position (Deficit), End of year $ 7,371,633 $ (1,626,835)
NOTES TO BASIC FINANCIAL STATEMENTS
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City of Calimesa
Notes to Basic Financial Statements
For the Year Ended June 30, 2025
-26-
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A) Description of the Reporting Entity
The City of Calimesa (the City) was incorporated on December 1, 1990, under the laws of the State of California and enjoys all the rights and privileges applicable to the general law city. It is governed by an elected five-member Council and Council-appointed Mayor. As required by accounting principles generally accepted in the United States of America, these financial statements present the City (the primary government).
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 the primary government. For the most part, the effect of interfund activity has been removed from these statements.
The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is 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 as general revenues.
The fund financial statements provide information about the City’s funds. Separate financial statements are provided for governmental funds. The emphasis of fund financial statements is on major governmental funds, each displayed in a separate column. All remaining governmental funds are aggregated and reported as nonmajor funds.
The City reports the following major governmental funds:
The General Fund is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund.
The Mitigation Fees Fund is used to account for various sources of development related revenue including Fire, Library, Law Enforcement and Administration facility fees, traffic improvement, flood control and drainage fees, park acquisition and improvement fees. These fees are used to expand facilities as development occurs, thus mitigating a portion of the impacts associated with development. Capital projects are also included in these expenditures.
The Capital Projects Including ARPA Capital Projects Fund is used to account for revenue received from the America Rescue Plan Act, to be used for eligible projects.
City of Calimesa
Notes to Basic Financial Statements
For the Year Ended June 30, 2025
-27-
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (Continued) B) Government-wide and Fund Financial Statements, (Continued) The Traffic Improvement Fees Capital Projects Fund is used to accounts for funding from Mitigation Fee Revenue as well as most other sources of intergovernmental agency revenue, grants revenue and developer contribution and expenditures as they relate to capital projects for significant interchange improvements, major street improvements and street maintenance.
This fund had previously been combined with Mitigation Fees – Special Revenue reporting, however due to the significant nature of the activity in the fund, it was determined to report this as a separate fund.
Additionally, the City reports the following non-major fund types:
The Special Revenue Funds are used to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditure for specified purposes other than debt service or capital projects.
The Capital Projects Fund is used to account for and report financial resources that are restricted, committed, or assigned to expenditure for capital outlays. The City’s non-major capital projects fund accounts for projects related to the Americans with Disabilities Act (ADA).
Other capital project expenditures are recorded directly in either the General Fund or applicable Special Revenue Funds that serve as the funding sources for each capital project.
Fiduciary Fund Financial Statements
Fiduciary fund financial statements consist of a Statement of Fiduciary Net Position and a Statement of Changes in Fiduciary Net Position. The City has two types of fiduciary funds, Custodial Funds that account for monies collected on behalf of other governmental agencies and Community Facilities Districts, and a Private Purpose Trust Fund, which accounts for the activities of the Successor Agency to the City of Calimesa Redevelopment Agency. Fiduciary funds are accounted for using the accrual basis of accounting.
C) Measurement Focus, Basis of Accounting, and Financial 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. Non-exchange transactions, in which the City gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, grants, entitlements and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied.
City of Calimesa
Notes to Basic Financial Statements
For the Year Ended June 30, 2025
-28-
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (Continued) C) Measurement Focus, Basis of Accounting, and Financial Presentation, (Continued) Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, 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 revenues, except for grant revenues to be available if they are collected within 60 days of the end of the current fiscal period. Grant revenues are generally considered available if they are collected within 180 days. Expenditures generally are recorded when a liability is incurred, as under accrual accounting.
As a general rule, the effect of interfund activity has been eliminated from the governmentwide financial statements. Amounts reported as program revenues include 1) charges to members, 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 sources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. In addition, fiduciary funds are not included in the government-wide financial statements.
When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, and then use unrestricted resources as needed.
D) Assets, Liabilities and Net Position or Equity
Cash, Cash Equivalents and Investments
The City pools its available cash for investment purposes. The City’s cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments with original maturity of three months or less from date of acquisition. Cash and cash equivalents are combined with investments and displayed as Cash and Investments.
In accordance with GASB Statement No. 40, Deposit and Investment Disclosures (Amendment of GASB No. 3), certain disclosure requirements for Deposits and Investment Risks were made in the following areas:
Interest Rate Risk
Credit Risk
o Overall
o Custodial Credit Risk
o Concentrations of Credit Risk
In addition, other disclosures are specified including use of certain methods to present deposits and investments, highly sensitive investments, credit quality at year-end and other disclosures.
City of Calimesa
Notes to Basic Financial Statements
For the Year Ended June 30, 2025
-29-
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (Continued) D) Assets, Liabilities and Net Position or Equity, (Continued) In accordance with GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools, highly liquid market investments with maturities of one year or less at time of purchase are stated at amortized cost. All other investments are stated at fair value. Market value is used as fair value for those securities for which market quotations are readily available.
The City participates in an investment pool managed by the State of California, the Local Agency Investment Fund (LAIF) which has invested a portion of the pooled funds in Structured Notes and Asset-backed Securities. The LAIF’s investments are subject to credit risk with the full faith and credit of the State of California collateralizing these investments. In addition, these Structured Notes and Asset-backed Securities are subject to market risk as to change in interest rates.
Receivables
During the course of normal operations, the City carries various receivable balances for taxes, interest, services and special assessments. Accounts receivables are shown net of an allowance for doubtful accounts. There were no allowance for doubtful accounts for Fiscal Year 2024-25.
Interfund Transactions
Interfund transactions are reflected as loans, reimbursements for services provided or transfers. Activity 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 funds” (i.e., the current portion of interfund loans).
Use of Estimates
The financial statements have been prepared in accordance with generally accepted accounting principles accepted in the United States of America and necessarily include amounts based on estimates and assumptions by management. Actual results could differ from those amounts.
Unearned Revenues
In the fund financial statements, unearned revenues represent cash advances from various entities that have not been spent; therefore, no revenue has been recognized.
Claims and Judgments
Only the short-term liability (if any) is reflected as a current liability in all applicable governmental fund types, the remainder of the liability is reported as long-term debt in the statement of net position. The City determined that no liability needs to be accrued for claims and judgments.
City of Calimesa
Notes to Basic Financial Statements
For the Year Ended June 30, 2025
-30-
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (Continued) D) Assets, Liabilities and Net Position or Equity, (Continued) Capital Assets
Capital assets, which include land, buildings, improvements, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks and similar items), are reported in the applicable governmental columns in the government-wide financial statements. Capital assets are defined by the City as assets with an initial, individual cost of more than $5,000 ($50,000 for infrastructure assets) and an estimated useful life in excess of three years. Such assets are reported at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at acquisition value at the date of donation.
The cost of normal maintenance and repairs that do not add to the value of the assets or materially extend lives are not capitalized.
Capital assets of the primary government are depreciated using the straight-line method over the following estimated useful lives:
Assets Years
Buildings 50
Building improvements 25-30
Infrastructure 30-50
Vehicles 3-15
Office equipment 3-7
Computer equipment 3-10
Pension Plan
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’s California Public Employees’ Retirement System (CalPERS) plan (Plan) and additions to/deductions from the Plan’s fiduciary net position have been determined on the same basis as they are reported by CalPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.
In addition, the City also sponsors the City of Calimesa Public Agency Retirement System (PARS) defined Contribution Plan for its fire employees. No assets or liabilities are reported for the PARS plan. Additional information about the City’s pension plans is included in Note
6.
City of Calimesa
Notes to Basic Financial Statements
For the Year Ended June 30, 2025
-31-
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (Continued) D) Assets, Liabilities and Net Position or Equity, (Continued) Employee Leave Benefits
Compensated absences are the amounts due to employees for future absences which are attributed to services already rendered. Vacation pay is payable to employees at the time a vacation is taken or upon separation of employment. Sick leave is payable when an employee is unable to work because of illness. The vested portion of compensated absences is included as a long-term liability in the statement of net position.
The following are summaries of the City’s compensated leave policies:
Compensatory time
Compensatory time, holiday, vacation and administrative time is usually payable to the employee upon termination at the rate of pay at separation.
Sick leave
Employees accrue sick leave in accordance with schedules set forth in the City’s Personnel Rules. All employees with at least six months service are allowed to accrue up to 960 hours of sick leave. Employees are not paid upon separation for accrued sick leave, therefore no liability is accrued in these financial statements for sick leave. The City Manager has no limit on sick accruals. Upon separation, the City Manager’s sick leave is payable at 100%. If retiring, the City Manager can elect conversion to service credit.
Vacation leave
Employees accrue vacation leave in accordance with schedules set forth in the City’s Personnel Rules. Employees will be paid upon separation all accrued vacation leave up to a maximum of 240 hours. The City Manager has no limit on vacation accruals.
Property Taxes
The County of Riverside, California, bills and collects the property taxes and remits them to the City in installments during the year. The County is permitted by State Law (Proposition 13) to levy taxes at 1 percent per $100 of full market value (at time of purchase) and can increase the assessed values by no more than 2 percent per year. The City receives a share of this basic levy proportionate to what was received in the 1976 to 1978 period.
City of Calimesa
Notes to Basic Financial Statements
For the Year Ended June 30, 2025
-32-
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (Continued) D) Assets, Liabilities and Net Position or Equity, (Continued) Property taxes are assessed and collected each fiscal year according to the following property tax calendar:
Lien Date January 1
Levy Date July 1
Due Date November 1, First Installment
February 1, Second Installment
Collection December 10, First Installment
April 10, Second Installment
Net Position
Government-Wide Financial Statements
In the Government-Wide Financial Statements, net position is classified in the following categories:
Net Investment in Capital Assets – This category consists of capital assets net of accumulated depreciation and reduced by outstanding debt that is attributed to the acquisition, construction, or improvement of the assets. As of June 30, 2025, net investment in capital assets consisted of $46,299,132 of capital assets, net of depreciation/amortization less $1,055,648 of longterm debt, and $504,664 of retentions for a total of $44,738,820.
Restricted – This category includes amounts restricted by external creditors, grantors, contributors, or laws or regulations of other governments.
Unrestricted – This category includes amounts that do not meet the definition of “net investment in capital assets” or “restricted net position” as defined above.
When an expense is incurred for purposes for which both restricted and unrestricted net position are available, the City’s policy is to apply restricted net position first.
Fund Balances
Nonspendable Fund Balance – That portion of fund balance that includes amounts that are either 1) not in a spendable form; or 2) legally or contractually required to be maintained intact.
Amounts considered “not in a spendable form” include items that are not expected to be converted to cash such as prepaid items and long-term notes receivable.
Restricted Fund Balance – That portion of fund balance that reflects constraints placed on the use of resources (other than nonspendable items) that are either 1) externally imposed by creditors, such as through debt covenants, grantors, contributors or the laws and regulations of other governments; or 2) imposed by law through constitutional provisions or enabling legislation. These restrictions may be effectively changed only with the consent of the resource provider.
City of Calimesa
Notes to Basic Financial Statements
For the Year Ended June 30, 2025
-33-
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (Continued) D) Assets, Liabilities and Net Position or Equity, (Continued) Committed Fund Balance – That portion of fund balance that includes amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the City Council, the City’s government’s highest level decision making authority. In order for funds to be considered committed, a resolution must be passed by the City Council. The established constraints remain binding until City Council takes action to amend the applicable resolution.
The City has a committed amount in the General Fund for emergencies and economic stability, which may only be accessed by majority vote of the City Council. The amount is calculated as thirty (30) percent of the General Fund’s annual operating budget, excluding one-time activity. The City also reports a committed amount for equipment replacement that is calculated as five (5) percent of the General Fund’s annual operating budget, excluding one-time activity.
Assigned Fund Balance – Represents that portion of fund balance that includes amounts that are constrained by the City’s intended use of the resources but are neither restricted nor committed. Such intent needs to be established at the highest level of decision making or by an official designated for that purpose. The City Council has the authority to assign amounts to be used for specific purposes.
Unassigned Fund Balance – Represents that portion of fund balance that includes amounts that are not contained in any of the other fund balance categories. The General Fund is the only governmental fund that may report a positive amount as unassigned fund balance. For all other governmental funds, only negative balances may be reported as unassigned fund balance.
When an expenditure is incurred for purposes for which both restricted and unrestricted funds are available, it is the City’s policy to apply the restricted funds first. The City also considers committed funds to be spent first, assigned funds to be spent second and unassigned funds to be spent last when an expenditure is incurred for purposes for which committed, assigned and unassigned fund balance is available.
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. Bond premiums and discounts are deferred and amortized over the life of the bonds using the straight line method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are expensed in the year of issuance.
City of Calimesa
Notes to Basic Financial Statements
For the Year Ended June 30, 2025
-34-
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (Continued) D) Assets, Liabilities and Net Position or Equity (Continued) In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as expenditures.
Deferred Outflows/Inflows of Resources
In addition to assets, the statement of net position (balance sheet) will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net assets that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then.
In addition to liabilities, the statement of net position (balance sheet) will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net assets that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time.
E) New Pronouncements
In 2025, the City adopted new accounting standards to conform to the following Governmental Accounting Standards Board Statements:
GASB Statement No. 101 – Compensated Absences: The primary objective of this Statement is to better meet the information needs of financial statement users by updating the recognition and measurement guidance for compensated absences. That objective is achieved by aligning the recognition and measurement guidance under a unified model and by amending certain previously required disclosures. The requirements of this Statement are effective for fiscal years beginning after December 15, 2023.
GASB Statement No. 102 – Certain Risk Disclosures: The primary objective of this Statement is to provide users of government financial statements with essential information about risks related to a government’s vulnerabilities due to certain concentrations or constraints. The requirements of this Statement are effective for fiscal years beginning after June 15, 2024.
City of Calimesa
Notes to Basic Financial Statements
For the Year Ended June 30, 2025
-35-
2) CASH AND INVESTMENTS
Cash and investments as of June 30, 2025, are classified in the accompanying financial statements as follows:
Government Fiduciary
Activities Fund Total
Cash and investments 25,856,786 $ 5,333,598 $ 31,190,384 $ Cash and investments with fiscal agent - 2,308,991 2,308,991 Total cash and investments $ 7,642,589 25,856,786 $ 33,499,375 $ Cash on hand $ 400
Deposits with financial institution 763,046
Local Agency Investment Funds 30,426,938
Cash and investments with fiscal agent 2,308,991
Total cash and investments $ 33,499,375
A) Deposits
The carrying amount of the City’s cash deposit was $763,046 at June 30, 2025. Bank balances before reconciling items were $1,264,652, the total amount of which was insured and/or collateralized with securities held by the pledging financial institutions in the City’s name as discussed below.
The California Government Code requires California banks and savings and loan associations to secure the City’s cash deposits by pledging securities as collateral. This Code states that collateral pledged in this manner shall have the effect of perfecting a security interest in such collateral superior to those of a general creditor. Thus, collateral for cash deposits is considered to be held in the City's name.
The market value of pledged securities must equal at least 110% of the City’s cash deposits.
California law also allows institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the City’s total cash deposits. The City has not waived collateral requirements for cash deposits, which are fully insured up to $250,000 by the Federal Deposit Insurance Corporation.
The City follows the practice of pooling cash and investments of all funds, except for funds required to be held by fiscal agents under the provisions of bond indentures. Interest income earned on pooled cash and investments is allocated on an accounting period basis to the various funds based on the period-end cash and investment balances. Interest income from cash and investments with fiscal agents is credited directly to the related fund.
City of Calimesa
Notes to Basic Financial Statements
For the Year Ended June 30, 2025
-36-
2) CASH AND INVESTMENTS, (Continued)
B) Investments
Authorized investments
Under provisions of the City’s investment policy, and in accordance with Section 53601 of the California Government Code, the City may invest in the types of investments as listed in the table below.
The City’s investment policy is to apply the prudent-person rule: Investments shall be made with the care, skill, prudence, and diligence under circumstances then prevailing, including but not limited to the general economic conditions and the anticipated needs of the City, that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of funds of a like character and with like aims to safeguard the principal of capital and maintain the liquidity needs of the City. The table below identifies the investment types that are authorized for investments held by the City. The Table also identifies certain provisions of these investments that address interest risk and concentration of credit risk.
Maximum Maximum
Maximum Percentage Investment in
Authorization investment type Maturity Allowed One Issuer U.S. Treasury Obligations 5 years None None
Local Agency Investment Fund (LAIF) 5 years None $75 million* Collateralized and/or FDIC-Insured
Demand Deposits 5 years None None
Certificates of Deposit 2 years 15% None
FNMA (Fannie Mae) 5 years 75% None
GNMA (Ginnie Mae) 5 years 20% None
FHLMC (Freddie Mac) 5 years 75% None
Federal Home Loan Bank (FHLB) 5 years 75% None
Federal Farm Credit Bank (FFCB) 5 years 75% None
Federal Agricultural Mortgage
Corporation (FAMC of Farmer Mac) 5 years 75% None
Tennessee Valley Authority 5 years 75% None
Money Market Mutual Funds 5 years 5% None
*$75 million limit is maximum deposit limit set by LAIF.
Investments authorized by debt agreements
Investment of debt proceeds held by bond trustees are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the City’s investment policy.
City of Calimesa
Notes to Basic Financial Statements
For the Year Ended June 30, 2025
-37-
2) CASH AND INVESTMENTS, (Continued)
B) Investments, (Continued)
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 risk and concentration of credit risk.
Maximum Maximum
Maximum Percentage Investment in
Authorization investment type Maturity Allowed One Issuer U.S. Treasury Obligations None None None
U.S. Agency Securities None None None
Banker's Acceptances None None None
Commercial Paper None None None
Money Market Mutual None None None
Repurchase/Investment Agreement 180 days None None
Investment Contracts None None None
Local Agency Investment Fund (LAIF) None None *$75 million FHA Obligations Guaranteed by U.S. Government None None None Federal Funds None None None
Negotiable Certificate of Deposit None None None
Time Deposits None None None
FDIC Insured Deposits None None None
Debt Obligations None None None
$75 million limit is maximum deposit limit set by LAIF.
Interest rate risk
The City’s investment policy mitigates interest rate risk by:
(1) Structuring the City’s portfolio so that securities mature to meet the City’s cash requirements for ongoing operations, thereby avoiding the need to sell securities on the open market prior to their maturation to meet those specific needs. (2) Investing primarily in short-term securities; and
(3) Occasionally restructuring the portfolio to minimize the loss of market value and/or to maximize cash flows.
Remaining
Maturity
Investment Type Totals 12 Month or Less
Local Agency Investment Fund (LAIF) 30,426,938 $ $ 30,426,938 Total Investments $ 30,426,938 $ 30,426,938
City of Calimesa
Notes to Basic Financial Statements
For the Year Ended June 30, 2025
-38-
2) CASH AND INVESTMENTS, (Continued)
B) Investments, (Continued)
Custodial credit risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in possession of an outside party. The City’s investment policy limits its exposure to custodial credit risk.
Credit risk/pooled cash
The City currently follows GASB No. 40 which established the way the city discloses credit, custodial, interest rate and foreign currency risks. Currently, custodial and interest rate risk are minimal. The City does not own any foreign currency. The City’s most significant investment, LAIF, does not have a rating provided by a nationally recognized statistical rating agency.
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. The City currently invests excess monies in the LAIF and checking and savings accounts at local banks. Currently the City mitigates credit risk by:
(1) Limiting investments to the safest types of securities. (2) Pre-qualifying with an established financial institution with which it will do business; and
(3) Diversifying the investment portfolio so that a failure of any one issuer or backer will not place an undue financial burden on the City.
Concentration of credit risk
The investment policy of the City contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. The City’s most significant investment, LAIF, does not have a rating provided by a nationally recognized statistical rating agency.
Investment in State Investment Pool
The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The balance is available for withdrawal on demand. The City’s investment with LAIF at June 30, 2025 includes a portion of the pool funds invested in Structured Notes and Asset-Backed Securities. These investments include the following:
City of Calimesa
Notes to Basic Financial Statements
For the Year Ended June 30, 2025
-39-
2) CASH AND INVESTMENTS, (Continued)
B) Investments, (Continued)
Structured Notes are debt securities (other than asset-backed securities) whose cash flow characteristics (coupon rate, redemption amount, or stated maturity) depend upon one or more indices and/or have embedded forwards or options.
Asset-Backed Securities, the bulk of which are mortgage-backed securities, entitle their purchasers to receive a share of the cash flows from a pool of assets such as principal and interest repayments from a pool of mortgages (such as collateralized mortgage obligations) or credit card receivables.
As of June 30, 2025, the City had $30,426,938 invested in LAIF, which had invested 2.02% of the pool investment funds in Structured Notes and Asset-Backed Securities as compared to 1.40% in the previous year. The remaining 97.98% of the pool investment funds were invested in United States Treasury Bills and Notes (55.13%), Federal Agency Discount Notes (17.34%), Certificates of Deposit (9.07%), Long Term Commercial Paper (6.69%), Federal Agency Debentures (5.77%), and other allowable investments (3.98%).
The LAIF fair value factor of 1.001198310 was used to calculate the fair value of the investments in LAIF, resulting in in the following investment income in all funds:
Interest income $ 1,118,054
Unrealized gain/(loss) in changes in fair value of investments 135,573 Total investment income (loss) $ 1,253,627
3) INTERFUND TRANSACTIONS
A) Interfund Transfers
The composition of interfund transfers for the fiscal year ended June 30, 2025 were as follows:
Nonmajor
Capital Projects Traffic Governmental
Mitigation Fees Including ARPA Improvement Fees Funds Total Major Fund:
General Fund $ 326,000 $ 360,000 $ - $ 5,000 $ 691,000
Nonmajor
Governmental Funds - 600,000 350,000 - 950,000
Total $ 326,000 $ 960,000 $ 350,000 $ 5,000 $ 1,641,000 Transfers In
Transfers Out
City of Calimesa
Notes to Basic Financial Statements
For the Year Ended June 30, 2025
-40-
3) INTERFUND TRANSACTIONS, (Continued)
A) Interfund Transfers, (Continued)
The transfers which occurred were: Combined $5,000 from General Fund to Nonmajor Governmental Funds, $960,000 from the General Fund and Nonmajor Governmental Funds fees fund to the Capital Projects Including ARPA Fund, $326,000 from the General Fund to the Mitigation Fees Fund and $350,000 from the Nonmajor Governmental Funds to the Traffic Improvement Fees Fund. The transfers were to fund for capital projects. 4) CAPITAL ASSETS
A summary of changes in capital assets at June 30, 2025 is as follows:
Beginning Ending
Balance Additions Deletions Balance
Governmental Activities:
Capital assets not being depreciated:
Land $ 5,609,531 $ - $ - $ 5,609,531
Construction in progress 8,859,247 4,756,752 259,741 13,356,258 Total capital assets not being depreciated 14,468,778 4,756,752 259,741 18,965,789 Capital assets being depreciated/amortized:
Building and improvements 5,288,504 3,629,198 - 8,917,702 Machinery and equipment 5,247,852 197,086 - 5,444,938
Road network 23,119,665 - - 23,119,665
Right-to-use assets - equipment 113,918 - - 113,918
Right-to-use assets - subscription 106,469 - - 106,469
Total capital assets being depreciated/amortized 33,876,408 3,826,284 - 37,702,692 Less accumulated depreciation/amortization for:
Buildings and improvements (1,659,292) (236,912) - (1,896,204) Machinery and equipment (1,071,075) (469,161) - (1,540,236) Road network (5,986,521) (792,127) - (6,778,648)
Right-to-use assets - equipment (55,520) (27,761) - (83,281) Right-to-use assets - subscription (35,490) (35,490) - (70,980) Total accumulated depreciation/amortization (8,807,898) (1,561,451) - (10,369,349) Total capital assets, being depreciated/amortized, net 25,068,510 2,264,833 - 27,333,343 Governmental activities capital assets, net $ 39,537,288 $ 7,021,585 $ 259,741 $ 46,299,132 Depreciation expense was charged to functions/programs of the City as follows:
General government $ 67,668
Public safety 468,828
Public works, parks and senior center 988,438
Community services and development 36,517
Total depreciation/amortization expense - governmental activities 1,561,451 $
City of Calimesa
Notes to Basic Financial Statements
For the Year Ended June 30, 2025
-41-
5) LONG-TERM LIABILITIES
The following is a summary of the changes in the long-term liabilities for the fiscal year ended June 30, 2025:
Due in
Beginning Balance Due Within More Than
Description Balance Additions Deletions Ending One Year One Year Compensated Absences* $ 263,070 $ 210,482 $ 473,552 - $ 94,710$ $ 378,842 Finance Purchase Agreement - Fire Engine 180,436 - 43,000 137,436 44,376 93,060 Finance Purchase Agreement - Pumper 925,802 - 91,203 834,599 73,614 760,985 Lease liabilities 58,282 - 28,176 30,106 29,178 928
Subscription liabilities 98,171 - 44,664 53,507 48,632 4,875 Total Long-Term Liabilities $ 210,482 1,525,761 $ $ 207,043 $ 1,529,200 290,510$ $ 1,238,690 *net change is shown
Compensated absences
For the governmental funds, accumulated vacation, compensatory time, sick and administrative/floating holidays payable at June 30, 2025, was $473,552. These amounts are payable from futures resources and therefore have been recorded as long-term liabilities.
These liabilities are generally liquidated by the General Fund.
Finance Purchase Agreement – Fire Truck
On October 16, 2017, the City entered into a finance purchase agreement with the Municipal Finance Corporation to finance the acquisition of a fire engine for a total of $487,743. The balance will be paid off in 10 annual installment payments and is not considered a lease in accordance with GASB Statement No. 87. Future debt service requirements as of June 30, 2025, were as follows:
Fiscal Year
Ending
June 30, Principal Interest Total
2026 $ 44,376 $ 4,398 $ 48,774
2027 45,796 2,978 48,774
2028 47,264 1,512 48,776
Total $ 137,436 $ 8,888 $ 146,324
City of Calimesa
Notes to Basic Financial Statements
For the Year Ended June 30, 2025
-42-
5) LONG-TERM LIABILITIES, (Continued)
Finance Purchase Agreement – Pumper
On January 10, 2024, the City entered into a finance purchase agreement with Community First National Bank to finance the acquisition of a pumper for a total of $1,209,696. The balance will be paid off in 10 annual installment payments and is not considered a lease in accordance with GASB Statement No. 87. Future debt service requirements as of June 30, 2025, were as follows:
Fiscal Year
Ending
June 30, Principal Interest Total
2026 73,614 $ 47,355 $ 120,969 $
2027 77,791 43,178 120,969
2028 82,205 38,764 120,969
2029 86,869 34,100 120,969
2030 91,798 29,171 120,969
2031-2034 422,322 61,558 483,880
Total $ 834,599 $ 254,126 $ 1,088,725
Lease liabilities
The City entered into various leases as Lessee for the use of equipment for 60 months. Initial lease liability was recorded in the amount of $111,764. As of June 30, 2025, the value of the lease liabilities are $30,106. The City is required to make monthly payments ranging from $606-$1,874. The leases have an interest rate of 1.09%. The equipment’s estimated useful lives are 60 months as of the contract commencement. The value of the right to use asset as of June 30, 2025, was $113,918 with accumulated amortization of $83,281.
Future payments on the total lease liabilities are as follows:
Fiscal Year
Ending
June 30, Principal Interest Total
2026 $ 29,178 $ 577 $ 29,755
2027 928 2 930
Total $ 30,106 $ 579 $ 30,685
City of Calimesa
Notes to Basic Financial Statements
For the Year Ended June 30, 2025
-43-
5) LONG-TERM LIABILITIES, (Continued)
Subscription liabilities
The City entered a subscription agreement as Lessee for the use of the software for 27 months. Initial lease liability was recorded in the amount of $106,469. As of June 30, 2025, the value of the subscription liability is $53,507. The City is required to make annual payments ranging from $11,618-$48,797. The agreements have an interest rate of 3.5%. The subscription’s estimated useful life is 27 months as of the contract commencement. The value of the right to use asset as of June 30, 2025, was $106,469 with accumulated amortization of $70,980.
Future payments on the total lease liabilities are as follows:
Fiscal Year
Ending
June 30, Principal Interest Total
2026 48,632 $ 165 $ 48,797 $
2027 4,875 - 4,875
Total 53,507 $ 165 $ 53,672 $
6) EMPLOYEE RETIREMENT PLANS
Defined Benefit Plan:
A) Plan Description
All qualified permanent and probationary employees are eligible to participate in the Public Agency Cost-Sharing Multiple-Employer Defined Benefit Pension Plan (Plan or PERF C) administered by the California Public Employees’ Retirement System (CalPERS.) The Plan consists of a miscellaneous pool and a safety pool (also referred to as “risk pools”), which are comprised of individual employer miscellaneous and safety rate plans, respectively. Plan assets may be used to pay benefits for any employer rate plan of the safety and miscellaneous pools. Accordingly, rate plans within the safety or miscellaneous pools are not separate plans under generally accepted accounting principles. Individual employers may sponsor more than one rate plan in the miscellaneous or safety risk pools. The City participates in two rate plans (two miscellaneous). Benefit provisions under the Plan are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plan regarding benefit provisions, assumptions and membership information that can be found on the CalPERS’ website, at www.calpers.ca.gov.
City of Calimesa
Notes to Basic Financial Statements
For the Year Ended June 30, 2025
-44-
6) EMPLOYEE RETIREMENT PLANS, (Continued)
B) Benefits Provided
CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries.
Benefits are based on years of credited service, equal to one year of full-time employment.
Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 5 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost-of-living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law.
The Plan operates under the provisions of the California Public Employees’ Retirement Law (PERL), the California Public Employees’ Pension Reform Act of 2013 (PEPRA), and the regulations, procedures and policies adopted by the CalPERS Board of Administration. The Plan’s authority to establish and amend the benefit terms are set by the PERL and PEPRA, and may be amended by the California state legislature and in some cases require approval by the CalPERS Board.
The Plan’s provisions and benefits in effect at June 30, 2025 are summarized as follows:
Prior to On or after
Hire date January 1, 2013 January 1, 2013
Benefit formula 2% @ 60 2% @ 62
Benefit vesting schedule 5 years service 5 years service Benefit payments monthly for life monthly for life
Retirement age 50 - 55 52-62
Monthly benefits, as a % of eligible compensation 2.0% to 2.7% 1.0% to 2.5% Required employee contribution rates 7.00% 7.75%
Required employer contribution rates 10.71% 7.87%
Required employer dollar UAL payment (annual) $97,802 $1,510 Miscellaneous
C) Contributions
Section 20814(c) of the California Public Employees’ Retirement Law (PERL) requires that the employer contribution rates for all public employers are determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through CalPERS’ annual actuarial valuation process.
The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The employer is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. Employer contribution rates may change if plan contracts are amended. Payments made by the employer to satisfy contribution requirements that are identified by the pension plan terms as plan member contribution requirements are classified as plan member contributions. Employer contributions to the Plan for the fiscal year ended June 30, 2025 were $226,280.
City of Calimesa
Notes to Basic Financial Statements
For the Year Ended June 30, 2025
-45-
6) EMPLOYEE RETIREMENT PLANS, (Continued)
D) Net Pension Liability
The City’s net pension liability for the Plan is measured as the total pension liability, less the pension plan’s fiduciary net position. The net pension liability of the Plan is measured as of June 30, 2024, using an annual actuarial valuation as of June 30, 2023, rolled forward to June 30, 2024, using standard update procedures. A summary of principal assumptions and methods used to determine the net pension liability is as follows.
Actuarial Methods and Assumptions Used to Determine Total Pension Liability The collective total pension liability for the June 30, 2024, measurement period was determined by an actuarial valuation as of June 30, 2023, with update procedures used to roll forward the total pension liability to June 30, 2024. The collective total pension liability was based on the following assumptions:
Valuation Date June 30, 2023
Measurement Date June 30, 2024
Actuarial Cost Method Entry-Age Normal Cost Method
Asset Valuation Method Fair Value of Assets
Actuarial Assumptions:
Discount Rate 6.90%
Inflation 2.50%
Projected Salary Increase Varies by entry age and service Investment Rate of Return 6.90%
Mortality Rate Table(1) Derived by CalPERS membership data for all funds Post Retirement Benefit Increase Contract COLA up to 2.50% until Purchasing Power Protection Allowance Floor on Purchasing Power applies,
2.30% thereafter.
(1) The mortality table used was developed based on CalPERS-specific data. The rates incorporate Generational Mortality to capture ongoing mortality improvement using 80% of Scale MP-2020 published by the Society of Actuaries. For more details, please refer to the 2021 experience study report from November 2021 that can be found on the CalPERS website.
City of Calimesa
Notes to Basic Financial Statements
For the Year Ended June 30, 2025
-46-
6) EMPLOYEE RETIREMENT PLANS, (Continued)
D) Net Pension Liability, (Continued)
Long-term Expected Rate of Return
The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.
In determining the long-term expected rate of return, CalPERS took into account both shortterm and long-term market return expectations. Using historical returns of all of the funds’ asset classes, expected compound (geometric) returns were calculated over the next 20 years using a building-block approach. The expected rate of return was then adjusted to account for assumed administrative expenses of 10 Basis points.
The expected real rates of return by asset class are as follows:
Assumed Asset
Asset Class Allocation Real Return 1,2
Global equity - cap-weighted 30.00% 4.54%
Global equity - non-cap-weighted 12.00% 3.84%
Private equity 13.00% 7.28%
Treasury 5.00% 0.27%
Mortgage-backed securities 5.00% 0.50%
Investment grade corporates 10.00% 1.56%
High yield 5.00% 2.27%
Emerging market debt 5.00% 2.48%
Private debt 5.00% 3.57%
Real assets 15.00% 3.21%
Leverage -5.00% -0.59%
Total 100.00%
2 Figures are based on the 2021-22 Asset Liability Management study 1 An expected inflation of 2.30% used for this period
City of Calimesa
Notes to Basic Financial Statements
For the Year Ended June 30, 2025
-47-
6) EMPLOYEE RETIREMENT PLANS, (Continued)
D) Net Pension Liability, (Continued)
Discount Rate
The discount rate used to measure the total pension liability for PERF C was 6.90%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability.
Subsequent Events
There were no subsequent events that would materially affect the results presented in this disclosure.
Pension Plan Fiduciary Net Position
Information about the pension plan’s assets, deferred outflows of resources, liabilities, deferred inflows of resources, and fiduciary net position are presented in CalPERS’ audited financial statements, which are publicly available reports that can be obtained at CalPERS’ website, at www.calpers.ca.gov. The plan’s fiduciary net position and additions to/deductions from the plan’s fiduciary net position have been determined on the same basis used by the pension plan, which is the economic resources measurement focus and the accrual basis of accounting. Benefits and refunds are recognized when due and payable in accordance with the terms of the plan. Investments are reported at fair value.
E) Proportionate Share of Net Pension Liability
The following table shows the City’s proportionate share of the Plan’s net pension liability over the measurement period.
Proportionate Share of
Total Pension Liability
Proportionate Share of
Fiduciary Net Position
Proportionate Share of
Net Pension Liability
Balance at: 6/30/2023 (VD) 5,500,859 $ 4,186,139 $ 1,314,720 $ Balance at: 6/30/2024 (MD) 5,891,858 4,583,272 1,308,586 Net changes during 2023-24 $ 390,999 $ 397,133 $ (6,134) Increase (Decrease)
Valuation Date (VD), Measurement Date (MD).
City of Calimesa
Notes to Basic Financial Statements
For the Year Ended June 30, 2025
-48-
6) EMPLOYEE RETIREMENT PLANS, (Continued)
E) Proportionate Share of Net Pension Liability, (Continued) The City’s proportion of the net pension liability was determined by CalPERS using the output from the Actuarial Valuation System and the fiduciary net position, as provided in the CalPERS Public Agency Cost-Sharing Allocation Methodology Report, which is a publicly available report that can be obtained at CalPERS’ website, at www.calpers.ca.gov. The City’s proportionate share of the net pension liability for the miscellaneous Plan as of the June 30, 2023, and 2024 measurement dates was as follows:
Miscellaneous
Proportion - June 30, 2023 0.026292%
Proportion - June 30, 2024 0.027056%
Change - Increase (Decrease) 0.000764%
F) Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate
The following presents the City’s proportionate share of the net pension liability of the Plan as of the measurement date, calculated using the discount rate of 6.9 percent, as well as what the net pension liability would be if it were calculated using a discount rate that is 1 percentage-point lower (5.9 percent) or 1 percentage-point higher (7.9 percent) than the current rate:
Discount Rate - 1% Current Discount Discount Rate + 1%
(5.9%) Rate (6.9%) (7.9)%
Plan's Net Pension
Liability/(Asset) 2,106,636 $ 1,308,586 $ 654,143 $
G) Amortization of Deferred Outflows and Deferred Inflows of Resources Gains and losses related to changes in total pension liability and fiduciary net position are recognized in pension expense systematically over time.
The first amortized amounts are recognized in pension expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to pensions and are to be recognized in future pension expense.
The amortization period differs depending on the source of the gain or loss:
Net difference between
projected and actual earnings
on pension plan investments
5-year straight-line amortization
All other amounts Straight-line amortization over the expected average remaining service lives (EARSL) of all members that
are provided with benefits (active, inactive and
retired) as of the beginning of the measurement
period
City of Calimesa
Notes to Basic Financial Statements
For the Year Ended June 30, 2025
-49-
6) EMPLOYEE RETIREMENT PLANS, (Continued)
H) Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions
As of the start of the measurement period (July 1, 2023), the City’s net pension liability was $1,314,720. For the measurement period ending June 30, 2024 (the measurement date), the City incurred a pension expense/(income) of $326,251.
As of June 30, 2025, the City has deferred outflows and deferred inflows of resources related to pensions as follows:
Deferred Deferred
Outflows of Inflows of
Resources Resources
Pension contributions subsequent to measurement date 226,280 $ $ - Changes of assumptions 33,633 -
Differences between expected and actual experience 108,725 - Changes in employer's proportion 45,046 -
Differences between the employer's contribution and the employer's proportionate share of contributions 24,727 9,196 Differences between projected and actual earnings on
plan investments 75,334 -
Total $ 513,745 $ 9,196
The amounts above are net of outflows and inflows recognized in the 2023-24 measurement period expense. Contributions subsequent to the measurement date of $226,280 reported with deferred outflows of resources will be recognized as a reduction of the net pension liability in the upcoming fiscal year.
Other amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recognized in future pension expense as follows:
Fiscal Year Deferred Outflows/
Ending Inflows of
June 30, Resources
2026 $ 109,631
2027 185,482
2028 8,972
2029 (25,816)
City of Calimesa
Notes to Basic Financial Statements
For the Year Ended June 30, 2025
-50-
6) EMPLOYEE RETIREMENT PLANS, (Continued)
I) Payable to the Pension Plan
At June 30, 2025, the City reported a payable of $0 for the outstanding amount of contributions to the pension plan required for the year then ended.
Defined Contribution Plan:
The City sponsors the City of Calimesa Public Agency Retirement System (PARS) Defined Contribution Plan for its fire employees. An Eligible Employee shall participate in this Plan if he or she is a full-time Fire Safety Employee of the City on or after September 1, 2017. The City contributes 7.5% of employee compensation annually into the Plan. Employees’ contributions are optional. Each Participant shall be one hundred percent (100%) vested in his or her Employer Contribution Account at all times. During the fiscal year ended June 30, 2025, the City contributed $115,248 to the Plan.
7) RISK MANAGEMENT
In July 1996, the City became a member of the Public Agency Risk Sharing Authority of California (PARSAC), a consortium of California cities, established in May 1986 to pool resources, share risks, purchase excess insurance and to share costs for professional risk management and claims administration. During fiscal year ended June 30, 2022, PARSAC merged with Redwood Empire Municipal Fund (REMF) and became California Intergovernmental Risk Authority (CIRA). The Authority’s governing board consists of one appointed official and an alternate from each participating city.
General and auto liability, public officials’ errors and omission – The City maintains a selfinsurance program for its general and auto liability, and public officials’ errors and omission.
For liability claims, the City is at risk for up to $10,000 per occurrence; amounts in excess of $10,000 up to $1,000,000 are covered through the California Intergovernmental Risk Authority (CIRA). Amounts in excess of $1,000,000 up to $35,000,000 are covered through additional insurance purchased from third parties by CIRA.
Employment practices liability – The City maintains a self-insurance program for its employment practices liability. For liability claims, the City is at risk for up to $10,000 per occurrence; amounts in excess of $10,000 up to $1,000,000 are covered through the Employment Risk Management Authority (ERMA).
Workers’ compensation – The City maintains workers’ compensation insurance through CIRA.
The City is at risk up to $25,000 per occurrence. Coverage through CIRA is up to $500,000 per claim. Claims in excess of $500,000, up to $5,000,000 are covered by policies purchased by CIRA through third parties.
Property insurance – The City maintains a self-insurance program for its property up to $5,000. Amounts in excess of $5,000 up to $1,000,000 are covered through additional insurance purchased from third parties by CIRA.
City of Calimesa
Notes to Basic Financial Statements
For the Year Ended June 30, 2025
-51-
7) RISK MANAGEMENT, (Continued)
Employee dishonesty, theft, fraud – The City maintains employee dishonesty, theft, and fraud insurance through CIRA up to $2,500. Amounts in excess of $2,500 up to $1,000,000 are covered by policies purchased from third parties by CIRA. 8) CONTINGENCIES
The City participates in certain federal and state assisted grant programs. These programs are subject to program compliance audits by the grantors or their representatives. Any liability for reimbursement which may arise as the result of these audits is not believed to be material.
The City is not involved in any pending lawsuits that may have a material adverse effect on the financial statements of the City.
9) DISSOLUTION OF REDEVELOPMENT AGENCIES IN CALIFORNIA AND RESULTANT
SUCCESSOR AGENCY TO THE FORMER REDEVELOPMENT AGENCY
On December 29, 2011, the California Supreme Court upheld Assembly Bill 1X 26 (AB 1X 26) that provides for the dissolution of all redevelopment agencies in the State of California.
Likewise, this action affected the reporting entity of the City of Calimesa in that the former Redevelopment Agency’s financial activities and related disclosures were reported within the City’s government-wide financial statements (blended component unit) as capital project and debt service funds. Timelines established within AB 1X 26 included the dissolution and cessation of redevelopment agencies as of February 1, 2012.
AB 1X 26 prescribes that either the city or another local government entity must serve as the successor agency to the former redevelopment agency. The role of the successor agency is to hold net assets of the former redevelopment agency until they can be transferred to the state or respective county. On February 6, 2012 the City Council adopted Resolution No. 2012-01 which provided for the low-to-moderate income housing functions (LMI) and related net assets of the former Redevelopment Agency to be assumed by the City Council.
Resolution No. 2012-01 of the Calimesa Successor Agency (CSA) was approved which provided for the City to act as the successor agency to the former Redevelopment Agency.
For clarity and ease of financial statement presentation purposes, both the LMI and nonhousing financial activities and net position subsequent to January 31, 2012 are reported as fiduciary funds in these basic financial statements.
In future fiscal years, successor agencies will only be allocated revenue by the State and respective county in amounts necessary to pay installment and/or bonded indebtedness annual payments required by listed enforceable obligations of the former redevelopment agencies which are supported by legally enforceable documents, such as bond indentures and related covenants. These payments will occur until such time that the obligations are paid in full.
City of Calimesa
Notes to Basic Financial Statements
For the Year Ended June 30, 2025
-52-
9) DISSOLUTION OF REDEVELOPMENT AGENCIES IN CLIFORNIA AND RESULTANT SUCCESSOR AGENCY TO THE FORMER REDEVELOPMENT AGENCY, (Continued) The following is a summary of the changes in bonds payable in the Successor Agency Trust Fund for the fiscal year ended June 30, 2025:
Beginning Ending Due Within
Description Balance Additions Deletions Balance One Year Bonds
2014 Series bonds, Refunding 1,910,000 $ $ - $ (125,000) $ 1,785,000 $ 130,000 Deferred amounts
For issuance premium,
relating to 2014 bonds 5,556 - (370) 5,186 -
Total Bonds $ 1,915,556 $ - $ (125,370) $ 1,790,186 $ 130,000 2014 Tax Allocation Refunding Revenue Bonds
In May 2014, the Calimesa Successor Agency (City) issued Calimesa Redevelopment Project No. 1 and Project No. 5 Tax Allocation Refunding Revenue Bonds, Series 2014, in the aggregate principal of $2,925,000.
The bonds are dated May 2014 and are in denominations of $5,000 and bear interest at rates ranging from 2.00% to 4.00%. Principal is payable annually on December 1 beginning on December 2014.
Interest is payable semi-annually on June 1 and December 1 commencing on December 1, 2014. The bonds mature between the time frames of December 1, 2014 and December 2038 in amounts ranging from $60,000 to $920,000.
The annual debt service requirements on the 2014 Bonds are as follows:
Fiscal Year
Ending
June 30, Principal Interest
2026 $ 130,000 $ 64,288
2027 135,000 60,388
2028 135,000 56,169
2029 140,000 51,950
2030 145,000 46,875
2031 - 2035 810,000 151,726
2036 - 2039 290,000 20,600
Total 1,785,000 $ $ 451,996
City of Calimesa
Notes to Basic Financial Statements
For the Year Ended June 30, 2025
-53-
9) DISSOLUTION OF REDEVELOPMENT AGENCIES IN CLIFORNIA AND RESULTANT SUCCESSOR AGENCY TO THE FORMER REDEVELOPMENT AGENCY, (Continued) 2014 Tax Allocation Refunding Revenue Bonds (Continued) The bonds were issued to assist the Agency in the financing of redevelopment activities, to fund the Reserve Subaccounts and to pay certain costs relating to the issuance of the bonds.
Per the bond indenture, a reserve is required to be maintained and at June 30, 2025, the amount held in the reserve account was $207,111 which was fully funded. The bonds are payable from and equally and ratably secured by a first pledge of Revenues consisting primarily of certain property tax revenues to be derived from the Project Areas.
Pledged revenues
The Successor Agency pledged 100% of future tax increment revenue (less amounts payable by or required to be set-aside by the Agency under any pass-through agreements and by the amount required to be set-aside for low and moderate housing as required by the California Health and Safety Code) as security for the bonds. While the pledge was originally considered outstanding for the duration of the debt service requirements, the dissolution of redevelopment agencies pursuant to AB 1X26 has led to the practice of the State of California granting annual payments to successor agencies to make the required bond debt services requirements as well as payments for other obligations listed on each agency’s schedule of enforceable obligations.
10) CONDUIT DEBT
The City has previously issued bonds for various Community Facilities Districts under the public improvement act (Mello-Roos Community Facilities Act of 1982) of the State of California to finance the acquisition and construction of certain public facilities servicing property within the respective district boundaries. The bonds are secured by annual special tax levies or liens placed on the property within the district.
The City is not liable for repayment and acts only as an agent for the property owners in collecting the special taxes or assessments, forwarding the collections to bondholders, and initiating foreclosure proceedings when necessary. These bonds are payable solely from special taxes, specific reserves, and the proceeds from property foreclosures to be levied by the district. The outstanding balance of all conduit debt of the City as of June 30, 2025 is as follows:
Issue Name Amounts of Issue Outstanding June 30, 2025
CFD 2012-1 Series 2014 IA1 2,855,000 $ $ 2,600,000
CFD 2013-1 Series 2015 IA1 1,565,000 1,435,000
CFD 2013-1 Series 2016 IA2 1,530,000 1,395,000
CFD 2012-1 Series 2017 IA2 4,205,000 3,925,000
CFD 2018-1 Series 2020 IA1 14,325,000 13,925,000
CFD 2013-1 Series 2020 IA3 3,038,476 2,979,575
REQUIRED SUPPLEMENTARY INFORMATION
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City of Calimesa
Required Supplementary Information
Schedule of Changes in the Net Pension Liability and Related Ratios – Last 10 Years For the Year Ended June 30, 2025
-54-
Measurement Date
Employer's Proportion
of the Collective Net
Pension Liability1
Employer's
Proportionate Share
of the Collective Net
Pension Liability Covered Payroll
Employer's
Proportionate Share
of the Collective Net
Pension Liability as a
percentage of the
Covered Payroll
Pension Plan's
Fiduciary Net Position
as a percentage of the
Total Pension Liability
June 30, 2015 0.00710% $ 487,286 $ 835,197 58.34% 78.40% June 30, 2016 0.00790% 683,932 697,838 98.01% 74.06%
June 30, 2017 0.00808% 801,322 699,490 114.56% 73.31%
June 30, 2018 0.00789% 760,407 821,901 92.52% 75.26%
June 30, 2019 0.00839% 860,069 802,415 107.19% 75.26%
June 30, 2020 0.00886% 963,472 929,097 103.70% 75.10%
June 30, 2021 0.00823% 445,340 850,713 52.35% 88.29%
June 30, 2022 0.01031% 1,191,033 1,024,657 116.24% 76.68% June 30, 2023 0.01054% 1,314,720 1,327,901 99.01% 76.21% June 30, 2024 0.02629% 1,308,586 1,336,909 97.88% 78.08% Notes to the schedule:
1 Proportion of the net pension liability represents the plan's proportion of PERF C, which includes both the Miscellaneous and Safety Risk Pools excluding the 1959 Survivors Risk Pool.
City of Calimesa
Required Supplementary Information
Schedule of Pension Contributions – Last 10 Years
For the Year Ended June 30, 2025
-55-
Fiscal Year
Actuarially Determined
Contribution
Contribution in Relationto
the Actuarially Determined
Contribution
Contribution Deficiency
(Excess) Covered Payroll
Contributions as a
Percentage of Covered
Payroll
June 30, 2016 82,408 $ (82,408) $ - $ 697,838 $ 11.81%
June 30, 2017 90,337 (90,337) - 699,490 12.91%
June 30, 2018 81,270 (81,270) - 821,901 9.89%
June 30, 2019 99,636 (99,636) - 802,415 12.42%
June 30, 2020 122,260 (122,260) - 929,097 13.16%
June 30, 2021 131,048 (131,048) - 850,713 15.40%
June 30, 2022 156,867 (156,867) - 1,024,657 15.31%
June 30, 2023 193,807 (193,807) - 1,327,901 14.59%
June 30, 2024 195,785 (195,785) - 1,336,909 14.64%
June 30, 2025 226,280 (226,280) - 1,459,535 15.50%
Notes to the schedule:
The actuarial methods and assumptions used to set the actuarially determined contributions were a follows:
Valuation date : 6/30/2023 6/30/2022 6/30/2021 6/30/2020 6/30/2019 Actuarial cost method: Entry Age Entry Age Entry Age Entry Age Entry Age Amortization method: (1) (1) (1) (1) (1)
Assets valuation method: Market Value Market Value Market Value Market Value Market Value Inflation: 2.30% 2.30% 2.30% 2.30% 2.50%
Salary increases: (2) (2) (2) (2) (2)
Investment rate of return: 6.90% 6.90% 6.90% 7.15% 7.00% Retirement age: (3) (3) (3) (3) (3)
Mortality: (4) (4) (4) (4) (4)
Valuation date : 6/30/2018 6/30/2017 6/30/2016 6/30/2015 6/30/2014 Actuarial cost method: Entry Age Entry Age Entry Age Entry Age Entry Age Amortization method: (1) (1) (1) (1) (1)
Assets valuation method: Market Value Market Value Market Value Market Value Market Value Inflation: 2.50% 2.63% 2.75% 2.75% 2.75%
Salary increases: (2) (2) (2) (2) (2)
Investment rate of return: 7.00% 7.25% 7.375% 7.50% 7.50% Retirement age: (3) (3) (3) (3) (3)
Mortality: (4) (4) (4) (4) (4)
(1) Level percentage of payroll, closed
(4) Mortality assumptions are based on mortality rates resulting from the most recent CalPERS Experience Study adopted by the CalPERS Board.
Changes in Benefit Terms: There were no changes to benefit terms that applied to all members of the Public Agency Pool. However, individual employers in the Plan may have provided a benefit improvement to their employees such as Golden Handshakes, service purchases, and other prior service costs. Employers that have done so may need to report this information as a separate liability in their financial statement as CalPERS considers such amounts to be separately financed employer-specific liabilities. These employers should consult with their auditors. Additionally, the figures above do not include any liability impact that occurred after the June 30, 2023, valuation date, unless the liability impact is deemed to be material to the Public Agency Pool.
(2) Depending on age, service, and type of employment
(3) 50 for all plans, with the exception of 52 for Miscellaneous PEPRA 2% @62 Change in Assumptions: There were no assumption changes in 2023 or 2024. Effective with the June 30, 2021, valuation date (June 30, 2022, measurement date), the accounting discount rate was reduced from 7.15% to 6.90%. In determining the long-term expected rate of return, CalPERS took into account long-term market return expectations as well as the expected pension fund cash flows. In addition, demographic assumptions and the price inflation assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. The accounting discount rate was 7.15% for measurement dates June 30, 2017, through June 30, 2021, and 7.65% for measurement dates June 30, 2015, through June 30, 2016.
City of Calimesa
Notes to the Required Supplementary Information
For the Year Ended June 30, 2025
-56-
(1) BUDGETARY INFORMATION
The City Council has the responsibility for adoption of the City’s budgets. Budgets are adopted for governmental funds. From the effective date of the budget, the amounts stated as proposed expenditures become appropriations to the various City departments. The City Council may amend the budget by resolution during each fiscal year. The City Manager is authorized to transfer funds from one major expenditure category to another within the same department and fund. Any revisions that alter the total expenditures of any fund must be approved by the City Council.
All appropriations lapse at the end of the fiscal year to the extent that they have not been expended.
Budgetary comparisons are provided in the accompanying financial statements for all funds with legally adopted budgets. Budget amounts are adopted on a basis consistent with accounting principles accepted in the United States of America.
(2) EXPENDITURES IN EXCESS OF APPROPRIATIONS
There were no expenditures in excess of appropriations in the current year.
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City of Calimesa
Required Supplementary Information
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual
General Fund
For the Year Ended June 30, 2025
-57-
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes 8,553,805 $ 8,553,805 $ 8,586,619 $ 32,814 $
Licenses and permits 299,450 276,450 358,130 81,680
Fines and forfeitures 34,000 34,000 74,104 40,104
Intergovernmental 39,000 177,999 55,238 (122,761)
Charges for services 933,950 933,950 921,355 (12,595)
Development fees 232,500 163,500 214,370 50,870
Investment earnings 177,200 327,200 381,083 53,883
Unrealized loss on investments - - 135,573 135,573
Other 15,000 35,000 24,920 (10,080)
Total revenues 10,284,905 10,501,904 10,751,392 249,488
EXPENDITURES
Current:
General government 2,292,982 3,390,026 3,019,914 370,112 Public safety 6,232,768 6,331,066 5,981,533 349,533
Public works, parks and senior center 1,107,025 1,230,856 1,113,808 117,048 Community services and development 665,054 695,477 615,872 79,605 Total expenditures 10,297,829 11,647,425 10,731,127 916,298 REVENUES OVER EXPENDITURES (1,145,521) (12,924) 20,265 1,165,786
OTHER FINANCING SOURCES (USES)
Transfers in 107,218 307,218 - (307,218)
Transfers out (893,218) (1,348,218) (691,000) 657,218
Total other financing sources (uses) (786,000) (1,041,000) (691,000) 350,000 Net change in fund balance $ (798,924) $ (2,186,521) (670,735) $ 1,515,786
FUND BALANCE
Beginning of year 9,393,279
End of year $ 8,722,544
Budget Amounts
City of Calimesa
Required Supplementary Information
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual
Mitigation Fees Special Revenue Fund
For the Year Ended June 30, 2025
-58-
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES
Intergovernmental $ 4,226,622 $ 8,618,334 $ 26,210 $ (8,592,124) Development fees - - 2,189 2,189
Investment earnings 120,300 120,300 451,956 331,656
Total revenues 4,346,922 8,738,634 480,355 (8,258,279)
EXPENDITURES
Current:
General government 8,000 8,000 8,000 -
Public safety 16,000 16,000 16,000 -
Public works, parks and senior center 4,048,525 13,841,823 1,794,868 12,046,955 Library 8,000 8,000 8,000 -
Debt service:
Principal 43,000 43,000 43,000 -
Interest and fiscal charges 5,775 5,775 5,774 1
Total expenditures 4,129,300 13,922,598 1,875,642 12,046,956 REVENUES OVER EXPENDITURES 217,622 (5,183,964) (1,395,287) 3,788,677
OTHER FINANCING SOURCES (USES)
Transfers in 326,000 326,000 326,000 -
Total other financing sources (uses) 326,000 326,000 326,000 - Net change in fund balance $ 543,622 $ (4,857,964) (1,069,287) $ 3,788,677
FUND BALANCE
Beginning of year 10,556,324
End of year $ 9,487,037
Budget Amounts
SUPPLEMENTARY INFORMATION
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City of Calimesa
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual Capital Projects Including ARPA Capital Projects Fund – Major Fund For the Year Ended June 30, 2025
-59-
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES
Intergovernmental - $ 350,532 $ 350,532 $ - $
Investment earnings 15,000 15,000 80,470 65,470
Total revenues 15,000 365,532 431,002 65,470
EXPENDITURES
Current:
Public works, parks and senior center 330,000 3,095,146 2,193,672 901,474 Total expenditures 330,000 3,095,146 2,193,672 901,474
REVENUES OVER EXPENDITURES (2,729,614) (315,000) (1,762,670) 966,944
OTHER FINANCING SOURCES (USES)
Transfers in 330,000 960,000 960,000 -
Total other financing sources (uses) 330,000 960,000 960,000 - Net change in fund balance 15,000 $ (1,769,614) $ (802,670) 966,944 $
FUND BALANCE
Beginning of year 1,835,796
End of year $ 1,033,126
Budget Amounts
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City of Calimesa
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual Traffic Improvement Fees Capital Projects Fund – Major Fund For the Year Ended June 30, 2025
-60-
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUE
Intergovernmental 15,637,527 $ 23,588,564 $ 1,503,845 $ (22,084,719) $ Charges for services 4,200 4,200 10,283 6,083
Development fees - - 14,905 14,905
Developer contributions 800,000 4,580,461 3,152,284 (1,428,177) Interest income 10,000 10,000 84,167 74,167
Total revenues 16,451,727 28,183,225 4,765,484 (23,417,741)
EXPENDITURES
Current:
Public works, parks and senior center 16,447,527 28,932,637 3,683,271 25,249,366 Total expenditures 16,447,527 28,932,637 3,683,271 25,249,366 REVENUES OVER EXPENDITURES (749,412) 4,200 1,082,213 1,831,625
OTHER FINANCING SOURCES (USES)
Transfers in 350,000 757,705 350,000 (407,705)
Total other financing sources (uses) 350,000 757,705 350,000 (407,705) Net change in fund balance 354,200 $ 8,293 $ 1,432,213 1,423,920 $
FUND BALANCE
Beginning of year 877,951
End of year $ 2,310,164
Budget Amounts
City of Calimesa
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2025
-61-
Supplemental
Law Transportation
Enforcement Housing Rehab - Air Quality
Grant State Library Improvements Gas Tax
ASSETS
Cash and investments $ 192,294 $ 418,023 $ 477,593 $ 86,651 $ 19,501 Receivables:
Taxes and other - - 4,321 - -
Intergovernmental - - - 3,783 55,234
Loans - 502,412 - - -
Total Assets $ 192,294 $ 920,435 $ 481,914 $ 90,434 $ 74,735
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable $ 24,994 $ - $ 1,675 $ - $ 5,984
Accrued payroll - - - - 386
Unearned revenues - - 46,244 - -
Deposits - - 38,963 - -
Total Liabilities 24,994 - 86,882 - 6,370
Fund Balances:
Restricted 167,300 920,435 395,032 90,434 68,365
Assigned - - - - -
Total Fund Balances 167,300 920,435 395,032 90,434 68,365 Total Liabilities and Fund Balances $ 192,294 $ 920,435 $ 481,914 $ 90,434 $ 74,735 Special Revenue Funds
-62-
Capital Projects
Lighting/ Road Total Nonmajor
Landscape Housing Rehab - Maintenance General Capital Governmental Measure A District Recycling Federal and Rehab Projects Fund Funds $ 23,030 755,092 $ 18,115 $ 4,196 $ 409,180 $ 63,656 $ 2,467,331 $ 992 - - - 52,258 - 57,571
- 55,626 - - - - 114,643
- - - 265,267 - - 767,679
$ 24,022 810,718 $ 18,115 $ 269,463 $ 461,438 $ 63,656 $ 3,407,224 $ $ 13,617 - $ - $ - $ - $ - $ 46,270 $
- - - - - - 386
- - - - - - 46,244
- - - - - - 38,963
13,617 - - - - - 131,863
10,405 810,718 18,115 269,463 461,438 - 3,211,705
- - - - - 63,656 63,656
810,718 10,405 18,115 269,463 461,438 63,656 3,275,361
$ 810,718 $ 24,022 $ 18,115 $ 269,463 $ 461,438 $ 63,656 $ 3,407,224 Special Revenue Funds
City of Calimesa
Combining Statements of Revenues, Expenditures and
Changes in Fund Balance
Nonmajor Governmental Funds
For the Year Ended June 30, 2025
-63-
Supplemental
Law Transportation
Enforcement Housing Rehab - Air Quality
Grant State Library Improvements Gas Tax
REVENUES
Taxes - $ $ - $ - $ - $ -
Intergovernmental 194,663 - 53,928 14,485 309,872
Investment earnings 7,220 16,269 20,398 3,483 1,857
Total Revenues 201,883 16,269 74,326 17,968 311,729
EXPENDITURES
Current:
General government - - 4,507 - -
Public safety 176,998 - - - -
Public works, parks and senior center - 1,565 - - 321,476 Community services and development - - - 1,270 -
Library - - 36,520 - -
Total Expenditures 176,998 1,565 41,027 1,270 321,476
Excess of Revenues Over Expenditures 24,885 14,704 33,299 16,698 (9,747)
OTHER FINANCING SOURCES (USES)
Transfers in - - - - -
Transfers out - - - - -
Total Other Financing Sources (Uses) - - - - -
Net Change in Fund Balances 24,885 14,704 33,299 16,698 (9,747) Fund Balances, Beginning of year 142,415 905,731 361,733 73,736 78,112 Fund Balances, End of year $ 167,300 $ 920,435 $ 395,032 $ 90,434 $ 68,365 Special Revenue Funds
-64-
Capital Projects
Lighting/ Road Total Nonmajor
Landscape Housing Rehab - Maintenance General Capital Governmental Measure A District Recycling Federal and Rehab Projects Fund Funds $ - $ 106,608 $ - $ - $ - $ - $ 106,608
321,067 - 5,000 - 296,551 37,540 1,233,106
46,601 1,001 905 179 20,485 1,980 120,378
367,668 107,609 5,905 179 317,036 39,520 1,460,092
- - - - - - 4,507
- - - - - - 176,998
13,450 166,310 7,933 - - 14,201 524,935
- - - - - - 1,270
- - - - - - 36,520
13,450 166,310 7,933 - - 14,201 744,230
354,218 (58,701) (2,028) 179 317,036 25,319 715,862
- - - - - 5,000 5,000
(600,000) - - - (350,000) - (950,000)
(600,000) - - - (350,000) 5,000 (945,000)
(245,782) (58,701) (2,028) 179 (32,964) 30,319 (229,138) 1,056,500 69,106 20,143 269,284 494,402 33,337 3,504,499 $ 810,718 $ 10,405 $ 18,115 $ 269,463 $ 461,438 $ 63,656 $ 3,275,361 Special Revenue Funds
City of Calimesa
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual Supplemental Law Enforcement Grant Special Revenue Fund For the Year Ended June 30, 2025
-65-
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUE
Intergovernmental $ 185,000 $ 185,000 $ 194,663 $ 9,663 Investment earnings 1,530 1,530 7,220 5,690
Total revenues 186,530 186,530 201,883 15,353
EXPENDITURES
Current:
Public safety 195,400 195,400 176,998 18,402
Total expenditures 195,400 195,400 176,998 18,402
Net change in fund balance $ (8,870) $ (8,870) 24,885 $ 33,755
FUND BALANCE
Beginning of year 142,415
End of year $ 167,300
Budget Amounts
City of Calimesa
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual Housing Rehab – State Special Revenue Fund
For the Year Ended June 30, 2025
-66-
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUE
Investment earnings 4,500 $ 4,500 $ 16,269 $ 11,769 $
Total revenues 4,500 4,500 16,269 11,769
EXPENDITURES
Current:
Public works, parks and senior center 3,500 3,500 1,565 1,935 Total expenditures 3,500 3,500 1,565 1,935
Net change in fund balance 1,000 $ 1,000 $ 14,704 13,704 $
FUND BALANCE
Beginning of year 905,731
End of year $ 920,435
Budget Amounts
City of Calimesa
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual Library Special Revenue Fund
For the Year Ended June 30, 2025
-67-
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUE
Intergovernmental 47,000 $ 47,000 $ 53,928 $ 6,928 $
Investment earnings 5,000 5,000 20,398 15,398
Other 2,000 79,861 - (79,861)
Total revenues 54,000 131,861 74,326 (57,535)
EXPENDITURES
Current:
General government 7,000 7,000 4,507 2,493
Library 37,600 338,746 36,520 302,226
Total expenditures 44,600 345,746 41,027 304,719
Net change in fund balance 9,400 $ (213,885) $ 33,299 247,184 $
FUND BALANCE
Beginning of year 361,733
End of year 395,032 $
Budget Amounts
City of Calimesa
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual Transportation Air Quality Improvements Special Revenue Fund For the Year Ended June 30, 2025
-68-
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUE
Intergovernmental $ 15,000 $ 15,000 $ 14,485 $ (515)
Investment earnings 1,000 1,000 3,483 2,483
Total revenues 16,000 16,000 17,968 1,968
EXPENDITURES
Current:
Community services and development 1,270 1,270 1,270 -
Total expenditures 1,270 1,270 1,270 -
Net change in fund balance $ 14,730 $ 14,730 16,698 $ 1,968
FUND BALANCE
Beginning of year 73,736
End of year $ 90,434
Budget Amounts
City of Calimesa
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual Gas Tax Special Revenue Fund
For the Year Ended June 30, 2025
-69-
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUE
Intergovernmental $ 317,840 $ 317,840 $ 309,872 $ (7,968) Investment earnings 1,200 1,200 1,857 657
Total revenues 319,040 319,040 311,729 (7,311)
EXPENDITURES
Current:
Public works, parks and senior center 309,858 332,553 321,476 11,077 Total expenditures 309,858 332,553 321,476 11,077
Net change in fund balance $ 9,182 $ (13,513) (9,747) $ 3,766
FUND BALANCE
Beginning of year 78,112
End of year $ 68,365
Budget Amounts
City of Calimesa
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual Measure A Special Revenue Fund
For the Year Ended June 30, 2025
-70-
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUE
Intergovernmental 325,000 $ 325,000 $ 321,067 $ (3,933) $ Investment earnings 13,000 13,000 46,601 33,601
Total revenues 338,000 338,000 367,668 29,668
EXPENDITURES
Current:
Public works, parks and senior center 248,450 453,450 13,450 440,000 Total expenditures 248,450 453,450 13,450 440,000
REVENUES OVER EXPENDITURES (115,450) 89,550 354,218 469,668
OTHER FINANCING SOURCES (USES)
Transfers out - (600,000) (600,000) -
Total other financing sources (uses) - (600,000) (600,000) - Net change in fund balance 89,550 $ (715,450) $ (245,782) 469,668 $
FUND BALANCE
Beginning of year 1,056,500
End of year $ 810,718
Budget Amounts
City of Calimesa
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual Lighting/Landscape District Special Revenue Fund
For the Year Ended June 30, 2025
-71-
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUE
Taxes 109,000 $ 109,000 $ 106,608 $ (2,392) $
Investment earnings 450 450 1,001 551
Total revenues 109,450 109,450 107,609 (1,841)
EXPENDITURES
Current:
Public works, parks and senior center 120,450 167,820 166,310 1,510 Total expenditures 120,450 167,820 166,310 1,510
Net change in fund balance $ (11,000) $ (58,370) (58,701) $ (331)
FUND BALANCE
Beginning of year 69,106
End of year $ 10,405
Budget Amounts
City of Calimesa
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual Recycling Special Revenue Fund
For the Year Ended June 30, 2025
-72-
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUE
Intergovernmental $ 5,000 $ 5,000 $ 5,000 $ -
Investment earnings 125 125 905 780
Total revenues 5,125 5,125 5,905 780
EXPENDITURES
Current:
Public works, parks and senior center 7,000 10,000 7,933 2,067 Total expenditures 7,000 10,000 7,933 2,067
Net change in fund balance $ (1,875) $ (4,875) (2,028) $ 2,847
FUND BALANCE
Beginning of year 20,143
End of year $ 18,115
Budget Amounts
City of Calimesa
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual Housing Rehab – Federal Special Revenue Fund
For the Year Ended June 30, 2025
-73-
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUE
Investment earnings 75 $ 75 $ 179 $ 104 $
Total revenues 75 75 179 104
EXPENDITURES
Current:
Public works, parks and senior center 1,000 1,000 - 1,000 Total expenditures 1,000 1,000 - 1,000
Net change in fund balance (925) $ (925) $ 179 1,104 $
FUND BALANCE
Beginning of year 269,284
End of year $ 269,463
Budget Amounts
City of Calimesa
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual Road Maintenance and Rehab Special Revenue Fund
For the Year Ended June 30, 2025
-74-
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUE
Intergovernmental 283,911 $ 283,911 $ 296,551 $ 12,640 $ Investment earnings 8,000 8,000 20,485 12,485
Total revenues 291,911 291,911 317,036 25,125
EXPENDITURES
Total expenditures - - - -
REVENUES OVER EXPENDITURES 291,911 291,911 317,036 25,125
OTHER FINANCING SOURCES (USES)
Transfers out (350,000) (757,705) (350,000) 407,705
Total other financing sources (uses) (350,000) (757,705) (350,000) 407,705 Net change in fund balance $ (58,089) $ (465,794) (32,964) $ 432,830
FUND BALANCE
Beginning of year 494,402
End of year $ 461,438
Budget Amounts
City of Calimesa
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual General Capital Projects Capital Projects Fund
For the Year Ended June 30, 2025
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Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUE
Intergovernmental $ 20,795 $ 75,260 $ 37,540 $ (37,720) Investment earnings 800 800 1,980 1,180
Total revenues 21,595 76,060 39,520 (36,540)
EXPENDITURES
Current:
Public works, parks and senior center 34,482 56,786 14,201 42,585 Total expenditures 34,482 56,786 14,201 42,585
REVENUES OVER EXPENDITURES (12,887) 19,274 25,319 6,045
OTHER FINANCING SOURCES (USES)
Transfers in 5,000 5,000 5,000 -
Total other financing sources (uses) 5,000 5,000 5,000 - Net change in fund balance $ (7,887) $ 24,274 30,319 $ 6,045
FUND BALANCE
Beginning of year 33,337
End of year $ 63,656
Budget Amounts
Tel. 909-889-0871 | www.ramscpa.net | 735 E. Carnegie Dr. Suite 100, San Bernardino, CA 92408
CERTIFIED PUBLIC ACCOUNTANTS
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REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON
COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL
STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
Independent Auditor’s Report
To the Honorable Mayor and Members of the City Council
City of Calimesa, 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 (Government Auditing Standards), the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the City of Calimesa (the City), as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the entity’s basic financial statements, and have issued our report thereon dated December 8, 2025.
Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the entity’s internal control over financial reporting (internal control) as a basis for designing 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 entity’s internal control. Accordingly, we do not express an opinion on the effectiveness of the entity’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses.
However, material weaknesses or significant deficiencies may exist that were not identified.
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Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the entity’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
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 entity’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 entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
San Bernardino, California
December 8, 2025
Tel. 909-889-0871 | www.ramscpa.net | 735 E. Carnegie Dr. Suite 100, San Bernardino, CA 92408
CERTIFIED PUBLIC ACCOUNTANTS
-1-
December 8, 2025
To the Honorable Town Council
City of Calimesa, California
We have audited the financial statements of the City of Calimesa (the City) as of and for the year ended June 30, 2025, and have issued our report thereon dated December 8, 2025. Professional standards require that we advise you of the following matters relating to our audit.
Our Responsibility in Relation to the Financial Statement Audit As communicated in our engagement letter dated April 4, 2025, our responsibility, as described by professional standards, is to form and express an opinion about whether the financial statements that have been prepared by management with your oversight are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America. Our audit of the financial statements does not relieve you or management of your respective responsibilities.
Our responsibility, as prescribed by professional standards, is to plan and perform our audit to obtain reasonable, rather than absolute, assurance about whether the financial statements are free of material misstatement. An audit of financial statements includes consideration of the system of internal control over financial reporting as a basis for designing 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 over financial reporting. Accordingly, as part of our audit, we considered the system of internal control of the City solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control.
We are also responsible for communicating significant matters related to the audit that are, in our professional judgment, relevant to your responsibilities in overseeing the financial reporting process.
However, we are not required to design procedures for the purpose of identifying other matters to communicate to you.
Planned Scope and Timing of the Audit
We conducted our audit consistent with the planned scope and timing we previously communicated to you.
Compliance with All Ethics Requirements Regarding Independence The engagement team, others in our firm, as appropriate, and our firm have complied with all relevant ethical requirements regarding independence.
We have evaluated whether certain nonattest services performed by our firm during the audit have created a significant threat to our independence in relation to the City. We have identified a threat to our independence (preparation of the City’s financial statements, creating a self-review threat) that if not reduced to an acceptable level, would impair our independence. In order to reduce the threat to an acceptable level, we have applied the following safeguard:
Prior to the issuance of the City’s financial statements, another partner or manager, independent of the engagement, will review the financial statements.
Attachment 6B
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Significant Risks Identified
We have identified the possibility of the following significant risks:
Management's override of internal controls over financial reporting – Management override of internal controls is the intervention by management in handling financial information and making decisions contrary to internal control policy.
Revenue recognition – Revenue recognition is a generally accepted accounting principle that refers to the conditions under which an City can recognize a transaction as revenue. Auditing standards indicate that recognizing revenue is a presumed fraud risk and usually classified as a significant risk in most audits.
These significant risks are presumptive in most audits and merit attention by the auditors due to the direct impact over financial reporting and internal control processes. Although identified as significant risks, we noted no matters of management override of controls or deviations from generally accepted accounting principles which caused us to modify our audit procedures or any related matters which are required to be communicated to those charged with governance due to these identified risks.
Qualitative Aspects of the Entity’s Significant Accounting Practices Significant Accounting Policies
Management has the responsibility to select and use appropriate accounting policies. A summary of the significant accounting policies adopted by the City is included in Note 1 to the financial statements. The City adopted GASB Statement No. 101, Compensated Absences, and GASB Statement No. 102, Certain Risk Disclosures during 2025. No matters have come to our attention that would require us, under professional standards, to inform you about (1) the methods used to account for significant unusual transactions and (2) the effect of significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus.
Significant Accounting Estimates and Related Disclosures Accounting estimates and related disclosures are an integral part of the financial statements prepared by management and are based on management’s current judgments. Those judgments are normally based on knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ markedly from management’s current judgments.
The most sensitive accounting estimates affecting the City’s financial statements are:
Management’s estimate of the net pension liability and related deferred inflows and outflows of resources are based on actuarial reports by independent actuaries. We evaluated the key factors and assumptions used to develop the estimate in determining that it is reasonable in relation to the basic financial statements taken as a whole and in relation to the applicable opinion units.
Financial Statement Disclosures
Certain financial statement disclosures involve significant judgment and are particularly sensitive because of their significance to financial statement users.
-3-
The most sensitive disclosures affecting the City’s financial statements relate to:
The disclosure of net pension liability and related deferred inflows and outflows of resources in the basic financial statements is based on actuarial assumptions. Actual future liabilities and actuarial deferred inflows and outflows may vary from disclosed estimates.
The disclosure of leases and subscription liabilities, right-to-use assets, and asset amortization in the basic financial statements is based on certain terms and assumptions in the agreements which could differ from actual amounts.
Significant Difficulties Encountered during the Audit
We encountered no significant difficulties in dealing with management relating to the performance of the audit.
Uncorrected and Corrected Misstatements
For purposes of this communication, professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that we believe are trivial, and communicate them to the appropriate level of management. Further, professional standards require us to also communicate the effect of uncorrected misstatements related to prior periods on the relevant classes of transactions, account balances or disclosures, and the financial statements as a whole and each applicable opinion unit. There were no uncorrected misstatements noted.
In addition, professional standards require us to communicate to you all material, corrected misstatements that were brought to the attention of management as a result of our audit procedures. None of the misstatements identified by us as a result of our audit procedures and corrected by management were material, either individually or in the aggregate, to the financial statements taken as a whole or applicable opinion unit.
Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter, which could be significant to the City’s financial statements or the auditor’s report. No such disagreements arose during the course of the audit.
Representations Requested from Management
We have requested certain written representations from management, which are included in the attached letter dated December 8, 2025.
Management’s Consultations with Other Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting matters. Management informed us that, and to our knowledge, there were no consultations with other accountants regarding auditing and accounting matters.
Other Significant Matters, Findings, or Issues
In the normal course of our professional association with the City, we generally discuss a variety of matters, including the application of accounting principles and auditing standards, significant events or transactions that occurred during the year, operating and regulatory conditions affecting the City, and operational plans and strategies that may affect the risks of material misstatement. None of the matters discussed resulted in a condition to our retention as the City’s auditors.
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Our responsibility also includes communicating to you any information which we believe is a material misstatement of fact. Nothing came to our attention that caused us to believe that such information, or its manner of presentation, is materially inconsistent with the information, or manner of its presentation, appearing in the financial statements.
This report is intended solely for the information and use of the City Council and management of the City and is not intended to be and should not be used by anyone other than these specified parties.
Very truly yours,
Tel. 909-889-0871 | www.ramscpa.net | 735 E. Carnegie Dr. Suite 100, San Bernardino, CA 92408
CERTIFIED PUBLIC ACCOUNTANTS
-1-
Independent Accountant’s Report
To the Honorable City Council
City of Calimesa, California
We have performed the procedures enumerated below to the accompanying Appropriations Limit Worksheet of the City of Calimesa, California (the City) for the year ended June 30, 2025. The management of the entity is responsible for the accompanying Appropriations Limit Worksheet.
The City has agreed to and acknowledged that the procedures performed are appropriate to meet the intended purpose of meeting the requirements of Section 1.5 of Article XIII-B of the California Constitution. These procedures, which were suggested by the League of California Cities and presented in the publication entitled Agreed-upon Procedures Applied to the Appropriations Limitation Prescribed by Article XIII-B of the California Constitution, were performed solely to assist you in meeting the requirements. This report may not be suitable for any other purpose.
The procedures performed may not address all the items of interest to a user of this report and may not meet the needs of all users of this report and, as such, users are responsible for determining whether the procedures performed are appropriate for their purposes.
The procedures and the associated findings are as follows:
1. We obtained the completed worksheets and compared the limit and annual adjustment factors included in those worksheets to the limit and annual adjustment factors that were adopted by resolution of the City Council. We also compared the population and inflation options included in the aforementioned documents to those that were selected by a recorded vote of the City Council.
Finding: No exceptions were noted as a result of our procedures.
2. For the accompanying Appropriations Limit Worksheet, we added last year’s limit to total adjustments and agreed the resulting amount to this year’s limit.
Finding: No exceptions were noted as a result of our procedures.
3. We agreed the current year information presented in the accompanying Appropriations Limit Worksheet to the other documents referenced in number one above.
Finding: No exceptions were noted as a result of our procedures.
4. We agreed the prior year appropriations limit presented in the accompanying Appropriations Limit Worksheet to the prior year appropriations limit adopted by the City Council during the prior year.
Finding: No exceptions were noted as a result of our procedures.
Attachment 6C
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We were engaged by the City to perform this agreed-upon procedures engagement and conducted our engagement in accordance with attestation standards established by the American Institute of Certified Public Accountants. We were not engaged to and did not conduct an examination or review, the objective of which would be the expression of an opinion or conclusion, respectively, on accompanying Appropriations Limit Worksheet for the year ended June 30, 2025.
Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.
We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements related to our agreed-upon procedures engagement.
This report is intended solely for the information and use of the City Council and management of the City of Calimesa, California, and is not intended to be and should not be used by anyone other than these specified parties. However, this report is a matter of public record, and its distribution is not limited.
San Bernardino, California
December 8, 2025
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FISCAL YEAR
2024-2025
Change in California Per Capita Personal Income 3.62%
Change in the Population for the
County of Riverside 0.55%
Change in California Per Capita Personal Income
Converted to a Ratio 1.036200
Change in City of Calimesa Population
Converted to a Ratio 1.005500
Calculation of Growth Factor (1.036200 x 1.005500) 1.0418991 Fiscal Year 2023-2024 Limit 10,640,616 $
Fiscal Year 2024 - 2025 Limit
($10,640,616 x 1.0418991) 11,086,448 $
Appropriations limit per resolution 11,086,448 $
*Allow for rounding.
APPROPRIATION LIMIT WORKSHEET
CITY OF CALIMESA
*
CITY COUNCIL MEETING
AGENDA REPORT
Agenda Item No. 7
SUBJECT: SPECIAL TAX AND BOND ACCOUNTABILITY REPORTS FOR PUBLIC SERVICES COMMUNITY FACILITIES DISTRICT NO. 1, COMMUNITY FACILITIES DISTRICT NO. 2012-1(SINGLETON HEIGHTS), COMMUNITY FACILITIES DISTRICT NO. 2013-1(JP RANCH) AND COMMUNITY
FACILITIES DISTRICT NO. 2018-1 (SUMMERWIND TRAILS) FOR FISCAL YEAR 2024-25
MEETING DATE: December 15, 2025
PRESENTED BY: Celeste Reid, Finance Director and Treasurer RECOMMENDATION: It is recommended that the City Council receive and file Special Tax and Bond Accountability Reports for Fiscal Year 2024-25.
BACKGROUND/DISCUSSION: The Special Tax and Bond Accountability Reports provide financial information prepared in compliance with the Local Agency Special Tax and Bond Accountability Act (“Accountability Act”). The Accountability Act was enacted by California State Legislature through Senate Bill 165 to provide accountability measures for any local special tax and/or bond measure subject to voter approval on or after January 1, 2001. According to the requirements of the Accountability Act (Sections 50075.1 and 53410 of the Government Code of the State of California), an annual report must be filed by the local agency levying the special tax and or issuing a bond measure and shall contain a description of the following:
(1) The amount of funds collected and expended.
(2) The status of any project required or authorized to be funded by the special tax and/or bond measure.
In accordance with the requirements, the City has prepared an accountability report for active Community Facility Districts detailed below:
• Public Services Community Facilities District No. 1
• Community Facilities District No. 2012-1(Singleton Heights) • Community Facilities District No. 2013-1(JP Ranch)
• Community Facilities District No. 2018-1 (Summerwind Trails) ATTACHMENTS:
Attachment A: Special Tax and Bond Accountability Reports for Fiscal Year 2024-25
City of Calimesa
Public Services
Community Facilities District No. 1
(Law Enforcement, Fire, Paramedic,
and Park Maintenance)
Special Tax Accountability Report
(SB 165)
Fiscal Year 2024/2025
Prepared for:
City of Calimesa
908 Park Avenue
Calimesa, CA 92320
T. 909.795.9801
Attachment 7A
TABLE OF CONTENTS
Section I. Background and Overview ................................................................................. 1 A. Community Facilities District Background.............................................................. 1 Section II. Collection of Special Taxes................................................................................ 2
City of Calimesa, Public Services Community Facilities District No. 1 1 (Law Enforcement, Fire, Paramedic and Park Maintenance Services) Special Tax Accountability Report (SB 165)
Fiscal Year 2024/2025
SECTION I. BACKGROUND AND OVERVIEW
The Local Agency Special Tax and Bond Accountability Act (“Accountability Act”) was enacted by California State Legislature through Senate Bill 165 to provide accountability measures for any local special tax and/or bond measure subject to voter approval on or after January 1, 2001.
According to the requirements of the Accountability Act (Sections 50075.1 and 53410 of the Government Code of the State of California), the Local Agency Special Tax and Bond Accountability Act Compliance (the “Report”) must be filed annually by the local agency levying a special tax and/or issuing a bond measure on or before each January 1, commencing January 1, 2002 and shall contain a description of the following:
(1) The amount of funds collected and expended to fund authorized facilities. (2) The status of any project required or authorized to be funded by the special tax and/or bond measure.
The information contained in this Report has been compiled and is being presented pursuant to and in accordance with the requirements outlined in the Accountability Act for Fiscal Year 2024/2025.
A. Community Facilities District Background
On July 17, 2006, the City Council (“Council”) of the City of Calimesa (“City”) adopted a resolution of intention to form Public Services Community Facilities District No. 1 (Law Enforcement, Fire, Paramedic, and Park Maintenance) (“PSCFD No. 1”), for the purpose of (1) police protection services, (2) fire protection/paramedic services, and (3) park maintenance services that are in addition to those provided in the territory within the CFD prior to the formation of PSCFD No. 1 and (4) the incidental expenses related to financing, forming and administering PSCFD No. 1.
On September 18, 2006, City Council adopted resolutions establishing PSCFD No. 1 and the qualified electors of PSCFD No. 1 authorized the City to levy a special tax.
It is the City’s intention to annex new developments into CFD No.1 as they are approved to provide for the Services in new growth areas of the City. Since the formation of PSCFD No. 1 the City Council has adopted resolutions approving four (4) annexations: Annexation No. 1 (JP Ranch), Annexation No. 2 (Summerwind Trails), Annexation No. 3 (Oak Valley Partners) and Annexation No. 4 (Summerwind Commons).
City of Calimesa, Public Services Community Facilities District No. 1 2 (Law Enforcement, Fire, Paramedic and Park Maintenance Services) Special Tax Accountability Report (SB 165)
Fiscal Year 2024/2025
SECTION II. COLLECTION OF SPECIAL TAXES
The table below provides a summary of the Special Taxes deposited, interest accrued, transfers, and other transactions within the Special Tax Fund for fiscal year ended June 30, 2025.
Item Balance
Beginning Balance as of July 1, 2024 $474,349.44
Sources of Funds
Special Tax Receipts $890,548.35
Interest Earned 5,808.38
Miscellaneous Transfers (in)1 0.00
Subtotal: Sources $896,356.73
Uses of Funds
Administrative Expenses $(14,384.65)
Public Safety Services (885,000.00)
Miscellaneous Transfers (out) 0.00
Subtotal: Uses $(899,384.65)
Ending Balance as of June 30, 2025 $471,321.52
City of Calimesa
Community Facilities District No. 2012-1
(Singleton Heights)
Special Tax Accountability Report
(SB 165)
Fiscal Year 2024/2025
Prepared for:
City of Calimesa
908 Park Avenue
Calimesa, CA 92320
T. 909.795.9801
TABLE OF CONTENTS
Section I. Background and Overview ................................................................................. 1 A. Community Facilities District Background.............................................................. 1 B. Authorized Facilities................................................................................................ 2 C. Authorized Services ................................................................................................ 2 D. Bond Issuance Summary......................................................................................... 2 Section II. Collection of Special Taxes................................................................................ 4 A. Special Tax Funds.................................................................................................... 4 B. Special Tax Collections and Expenditures (Services) .............................................. 5 C. Status of Authorized Facilities Projects .................................................................. 6
City of Calimesa, Community Facilities District No. 2012-1 (Singleton Heights) 1 Special Tax Accountability Report (SB 165)
Fiscal Year 2024/2025
SECTION I. BACKGROUND AND OVERVIEW
The Local Agency Special Tax and Bond Accountability Act (“Accountability Act”) was enacted by California State Legislature through Senate Bill 165 to provide accountability measures for any local special tax and/or bond measure subject to voter approval on or after January 1, 2001.
According to the requirements of the Accountability Act (Sections 50075.1 and 53410 of the Government Code of the State of California), the Local Agency Special Tax and Bond Accountability Act Compliance (the “Report”) must be filed annually by the local agency levying a special tax and/or issuing a bond measure on or before each January 1, commencing January 1, 2002 and shall contain a description of the following:
(1) The amount of funds collected and expended to fund authorized facilities. (2) The status of any project required or authorized to be funded by the special tax and/or bond measure.
The information contained in this Report has been compiled and is being presented pursuant to and in accordance with the requirements outlined in the Accountability Act for Fiscal Year 2024/2025.
A. Community Facilities District Background
On March 5, 2012, the City Council (“Council”) of the City of Calimesa (“City”) adopted a resolution of intention to form Community Facilities District No. 2012-1 (Singleton Heights) (“CFD No. 2012-1”), along with two separate improvement areas (“Improvement Area No. 1” or “IA 1”, and “Improvement Area No. 2” or “IA 2”), to levy two special taxes; 1) for the purpose of financing public improvements to meet the needs of new development or pay debt service on bonds issued to finance such facilities, and 2) to pay for authorized services.
After conducting a noticed public hearing, the Council adopted an ordinance establishing CFD No. 2012-1, providing for the levy of special taxes, approving the proposed rates and methods of apportionment of special taxes, and approving the issuance of bonded indebtedness to finance the authorized facilities (“Facilities”) and; to pay for maintenance services (“Services”).
On April 16, 2012, an election was held within CFD No. 2012-1 in which the landowner(s) eligible to vote approved the levy of special taxes and the issuance of bonds in an amount not to exceed $16,000,000.
City of Calimesa, Community Facilities District No. 2012-1 (Singleton Heights) 2 Special Tax Accountability Report (SB 165)
Fiscal Year 2024/2025
B. Authorized Facilities
Special Tax A collected within CFD No. 2012-1 is to provide for the cost of financing the acquisition and construction of certain public facilities within the City (“Facilities”).
Descriptions of the authorized Facilities are as follows:
IA 1 IA 2
City of Calimesa Infrastructure City of Calimesa Infrastructure Streets and Traffic Improvement Streets and Traffic Improvement Drainage Drainage
Library Facility Library Facility
Fire Service Facility Fire Service Facility
Law Enforcement Facility Law Enforcement Facility
Park Facilities Park Facilities
Multiple Species Habitat Conservation Plan
C. Authorized Services
The Special Tax B collected within CFD No. 2012-1 IA 1 and IA 2 is to pay for the costs of irrigated open space areas; non-irrigated open space or fuel modification areas; streetscape landscaping; slope landscaping; landscape improvements associated with the drainage easement areas and/or detention basins (both irrigated and non-irrigated); and public street lighting within and associated with the development of properties within or in the vicinity of CFD No. 2012-1.
D. Bond Issuance Summary
Bonds were issued on August 20, 2014 in the amount of $2,855,000 (the “2014 Bonds”). The annual debt service on the 2014 Bonds is being repaid by the facilities Special Tax A levied on properties within Improvement Area No. 1.
Bonds were issued on May 18, 2017 in the amount of $4,205,000 (the “2017 Bonds”). The annual debt service on the 2017 Bonds is being repaid by the facilities Special Tax A levied on properties within Improvement Area No. 2.
The tables below summarize the application of the Bond proceeds:
2014 Bond Proceeds IA 1
Fund/Account/Sub-Account Bond Proceeds
Acquisition and Construction Fund $2,352,653.65
Reserve Fund 231,310.58
Costs of Issuance Fund 125,000.00
Interest Account 16,042.67
Original Issue Discount 77,175.60
Underwriter’s Discount 52,817.50
Total $2,855,000.00
City of Calimesa, Community Facilities District No. 2012-1 (Singleton Heights) 3 Special Tax Accountability Report (SB 165)
Fiscal Year 2024/2025
2017 Bond Proceeds IA 2
Fund/Account/Sub-Account Bond Proceeds
Acquisition and Construction Fund $3,621,338.75
Reserve Fund 327,293.58
Costs of Issuance Fund 134,500.00
Interest Account 7,946.62
Original Issue Discount 50,846.05
Underwriter’s Discount 63,075.00
Total $4,205,000.00
City of Calimesa, Community Facilities District No. 2012-1 (Singleton Heights) 4 Special Tax Accountability Report (SB 165)
Fiscal Year 2024/2025
SECTION II. COLLECTION OF SPECIAL TAXES
A. Special Tax A Funds
In accordance with the Indenture, all Facilities Special Tax A collected by the City shall be deposited in the Special Tax Fund held by the Fiscal Agent. The table below provides a summary of the Facilities Special Taxes deposited, interest accrued, transfers, and other transactions within the Special Tax Fund for fiscal year ended June 30, 2025.
Facilities Special Tax A
Improvement Area No. 1
Item Balance
Beginning Balance as of July 1, 2024 $227,674.81
Sources of Funds
Special Tax Receipts $179,656.20
Interest Earned 7,360.02
Miscellaneous Transfers (in)1 0.00
Subtotal: Sources $187,016.22
Uses of Funds
Administrative Expenses $(13,616.97)
Transfers to Bond Fund (Debt Service) (147,532.27)
Miscellaneous Transfers (out) 0.00
Subtotal: Uses $(161,149.24)
Ending Balance as of June 30, 2025 $253,541.79
1 An adjustment was made to capture additional interest earnings from the Fiscal Agent.
Facilities Special Tax A
Improvement Area No. 2
Item Balance
Beginning Balance as of July 1, 2024 $166,850.36
Sources of Funds
Special Tax Receipts $236,573.36
Interest Earned 3,527.75
Miscellaneous Transfers (in) 0.00
Subtotal: Sources $240,101.11
Uses of Funds
Administrative Expenses $(18,543.67)
Transfers to Bond Fund (Debt Service) (200,622.69)
Miscellaneous Transfers (out) 0.00
Subtotal: Uses $(219,166.36)
Ending Balance as of June 30, 2025 $187,785.11
City of Calimesa, Community Facilities District No. 2012-1 (Singleton Heights) 5 Special Tax Accountability Report (SB 165)
Fiscal Year 2024/2025
B. Special Tax B Collections and Expenditures (Services) The table below provides a summary of the Services Special Tax B deposited, interest accrued, transfers, and other transactions within the Special Tax Fund for fiscal year ended June 30, 2025.
Services Special Tax B
Improvement Area No. 1 and No. 2
Item Balance
Beginning Balance as of July 1, 2024 $1,165,776.97
Sources of Funds
Special Tax Receipts $271,178.12
Interest Earned 51,032.49
Miscellaneous Transfers (in)1 0.00
Subtotal: Sources $322,210.61
Uses of Funds
Administrative Expenses $(27,071.02)
Street Light Maintenance (8,845.89)
Water and Sewer Maintenance (20,622.69)
Repair & Maintenance (2,704.80)
Professional Services (155,034.28)
Miscellaneous Transfers (out) 0.00
Subtotal: Uses $(214,278.68)
Ending Balance as of June 30, 2025 $1,273,708.90
1. Credits from Fiscal Agent
City of Calimesa, Community Facilities District No. 2012-1 (Singleton Heights) 6 Special Tax Accountability Report (SB 165)
Fiscal Year 2024/2025
C. Status of Authorized Facilities Projects
An account entitled “Construction Account” was established in connection with the issuance of the CFD No. 2012-1, IA No. 1 2014 Bonds, into which a portion of the proceeds from the 2014 Bonds were deposited and disbursed for the costs of the authorized facilities. The amount deposited in the Construction Account was fully expended for authorized facilities and the account was subsequently closed during FY 2023/2024.
An account entitled “Project Costs Account” was established in connection with the issuance of the CFD No. 2012-1, IA No. 2 2017 Bonds, into which a portion of the proceeds from the 2017 Bonds were deposited and disbursed for the costs of the authorized facilities. The amount deposited in the Project Costs Account was fully expended for authorized facilities and the account was subsequently closed during FY 2019/2020.
City of Calimesa
Community Facilities District No. 2013-1
(JP Ranch)
Special Tax Accountability Report
(SB 165)
Fiscal Year 2024/2025
Prepared for:
City of Calimesa
908 Park Avenue
Calimesa, CA 92320
T. 909.795.9801
TABLE OF CONTENTS
Section I. Background and Overview ................................................................................. 1 A. Community Facilities District Background.............................................................. 1 B. Authorized Facilities................................................................................................ 2 C. Authorized Services ................................................................................................ 2 D. Bond Issuance Summary......................................................................................... 2 Section II. Collection of Special Taxes................................................................................ 4 A. Special Tax Funds.................................................................................................... 4 B. Special Tax Collections and Expenditures (Services) .............................................. 5 C. Status of Authorized Facilities Projects .................................................................. 6
City of Calimesa, Community Facilities District No. 2013-1 (JP Ranch) 1 Special Tax Accountability Report (SB 165)
Fiscal Year 2024/2025
SECTION I. BACKGROUND AND OVERVIEW
The Local Agency Special Tax and Bond Accountability Act (“Accountability Act”) was enacted by California State Legislature through Senate Bill 165 to provide accountability measures for any local special tax and/or bond measure subject to voter approval on or after January 1, 2001.
According to the requirements of the Accountability Act (Sections 50075.1 and 53410 of the Government Code of the State of California), the Local Agency Special Tax and Bond Accountability Act Compliance (the “Report”) must be filed annually by the local agency levying a special tax and/or issuing a bond measure on or before each January 1, commencing January 1, 2002 and shall contain a description of the following:
(1) The amount of funds collected and expended to fund authorized facilities. (2) The status of any project required or authorized to be funded by the special tax and/or bond measure.
The information contained in this Report has been compiled and is being presented pursuant to and in accordance with the requirements outlined in the Accountability Act for Fiscal Year 2024/2025.
A. Community Facilities District Background
On June 3, 2013, the City Council (“Council”) of the City of Calimesa (“City”) adopted a resolution of intention to form Community Facilities District No. 2013-1 (JP Ranch) (“CFD No. 2013-1”), along with three separate improvement areas (“Improvement Area No. 1” or “IA 1”, “Improvement Area No. 2” or “IA 2” , and “Improvement Area No. 3” or “IA 3”), to levy two special taxes; 1) for the purpose of financing public improvements to meet the needs of new development or pay debt service on bonds issued to finance such facilities, and 2) to pay for authorized services. After conducting a noticed public hearing, the Council adopted an ordinance establishing CFD No. 2013-1, providing for the levy of special taxes, approving the proposed rates and methods of apportionment of special taxes, and approving the issuance of bonded indebtedness to finance the authorized facilities (“Facilities”) and; to pay for maintenance services (“Services”).
On August 5, 2013, an election was held within CFD No. 2013-1 in which the landowner(s) eligible to vote approved the levy of special taxes and the issuance of bonds in an amount not to exceed $12,000,000.
City of Calimesa, Community Facilities District No. 2013-1 (JP Ranch) 2 Special Tax Accountability Report (SB 165)
Fiscal Year 2024/2025
B. Authorized Facilities
Special Tax A collected within CFD No. 2013-1 is to provide for the cost of financing the acquisition and construction of certain public facilities within the City (“Facilities”).
Descriptions of the authorized Facilities are as follows:
IA 1 IA 2 IA 3
City of Calimesa Infrastructure City of Calimesa Infrastructure City of Calimesa Infrastructure Streets and Traffic Improvement Streets and Traffic Improvement Streets and Traffic Improvement Drainage Drainage Drainage
Library Facility Library Facility Library Facility
Fire Service Facility Fire Service Facility Fire Service Facility Law Enforcement Facility Law Enforcement Facility Law Enforcement Facility Park Facilities Park Facilities Park Facilities
Multiple Species Habitat
Conservation Plan
C. Authorized Services
The Special Tax B collected within CFD No. 2013-1 IA 1, IA 2 and IA 3 is to pay for the costs of irrigated open space areas; non-irrigated open space or fuel modification areas; streetscape landscaping; slope landscaping; landscape improvements associated with the drainage easement areas and/or detention basins (both irrigated and non-irrigated); and public street lighting within and associated with the development of properties within or in the vicinity of CFD No. 2013-1.
D. Bond Issuance Summary
Bonds were issued on August 13, 2015 in the amount of $1,565,000 (the “2015 Bonds”). The annual debt service on the 2015 Bonds is being repaid by the facilities Special Tax A levied on properties within Improvement Area No. 1.
Bonds were issued on November 6, 2016 in the amount of $1,530,000 (the “2016 Bonds”).
The annual debt service on the 2016 Bonds is being repaid by the facilities Special Tax A levied on properties within Improvement Area No. 2.
Private Placement Bonds were issued on May 20, 2020 in the amount of $3,038,475.84 (the “2020 Bonds”). The annual debt service on the 2020 Bonds is being repaid by the facilities Special Tax A levied on properties within Improvement Area No. 3.
The following tables summarize the application of the Bond proceeds:
City of Calimesa, Community Facilities District No. 2013-1 (JP Ranch) 3 Special Tax Accountability Report (SB 165)
Fiscal Year 2024/2025
2015 Bond Proceeds IA 1
Fund/Account/Sub-Account Bond Proceeds
Acquisition and Construction Fund $1,244,960.38
Reserve Fund 125,733.51
Costs of Issuance Fund 125,000.00
Original Issue Discount 40,147.70
Underwriter’s Discount 29,158.41
Total $1,565,000.00
2016 Bond Proceeds IA 2
Fund/Account/Sub-Account Bond Proceeds
Acquisition and Construction Fund $1,140,307.06
Reserve Fund 109,016.44
Costs of Issuance Fund 201,800.00
Original Issue Discount 48,276.50
Underwriter’s Discount 30,600.00
Total $1,530,000.00
2020 Bond Proceeds IA 3 (Private Placement)
Fund/Account/Sub-Account Bond Proceeds
Acquisition and Construction Fund $2,684,623.86
Reserve Fund 112,938.92
Capitalized Interest Fund 89,413.06
Costs of Issuance Fund 151,500.00
Total $3,038,475.84
City of Calimesa, Community Facilities District No. 2013-1 (JP Ranch) 4 Special Tax Accountability Report (SB 165)
Fiscal Year 2024/2025
SECTION II. COLLECTION OF SPECIAL TAXES
A. Special Tax A Funds
In accordance with the Indenture, all Facilities Special Taxes collected by the City shall be deposited in the Special Tax Fund held by the Fiscal Agent. The table below provides a summary of the Facilities Special Taxes deposited, interest accrued, transfers, and other transactions within the Special Tax Fund for fiscal year ended June 30, 2025.
Facilities Special Tax A
Improvement Area No. 1
Item Balance
Beginning Balance as of July 1, 2024 $128,649.10
Sources of Funds
Special Tax Receipts $106,968.52
Interest Earned 4,122.72
Miscellaneous Transfers (in) 0.00
Subtotal: Sources $111,091.24
Uses of Funds
Administrative Expenses $(13,508.79)
Transfers to Bond Fund (Debt Service) (81,401.00)
Miscellaneous Transfers (out) 0.00
Subtotal: Uses $(94,909.79)
Ending Balance as of June 30, 2025 $144,830.55
Facilities Special Tax A
Improvement Area No. 2
Item Balance
Beginning Balance as of July 1, 2024 $121,077.39
Sources of Funds
Special Tax Receipts $91,160.33
Interest Earned 4,067.30
Miscellaneous Transfers (in) 0.00
Subtotal: Sources $95,227.63
Uses of Funds
Administrative Expenses $(13,793.79)
Transfers to Bond Fund (Debt Service) (66,700.21)
Miscellaneous Transfers (out) 0.00
Subtotal: Uses $(80,494.00)
Ending Balance as of June 30, 2025 $135,811.02
City of Calimesa, Community Facilities District No. 2013-1 (JP Ranch) 5 Special Tax Accountability Report (SB 165)
Fiscal Year 2024/2025
Facilities Special Tax A
Improvement Area No. 3
Item Balance
Beginning Balance as of July 1, 2024 $197,872.07
Sources of Funds
Special Tax Receipts $161,802.09
Interest Earned 6,027.57
Miscellaneous Transfers (in) 0.00
Subtotal: Sources $167,829.66
Uses of Funds
Administrative Expenses $(23,072.49)
Transfers to Bond Fund (Debt Service) (136,797.94)
Miscellaneous Transfers (out) 0.00
Subtotal: Uses $(159,870.43)
Ending Balance as of June 30, 2025 $205,831.30
B. Special Tax B Collections and Expenditures (Services) The table below provides a summary of the Services Special Taxes deposited, interest accrued, transfers, and other transactions within the Special Tax Fund for fiscal year ended June 30, 2025.
Services Special Tax B
Improvement Area No. 1, No. 2 and No. 3
Item Balance
Beginning Balance as of July 1, 2023 $562,726.47
Sources of Funds
Special Tax Receipts $252,396.70
Interest Earned 22,928.86
Miscellaneous Transfers (in) 0.00
Subtotal: Sources $275,325.56
Uses of Funds
Administrative Expenses $(21,214.42)
Street Light Maintenance (10,301.76)
Water and Sewer Maintenance (17,637.90)
Professional Services (229,094.81)
Miscellaneous Transfers (out) 0.00
Subtotal: Uses $(278,248.89)
Ending Balance as of June 30, 2024 $559,803.14
City of Calimesa, Community Facilities District No. 2013-1 (JP Ranch) 6 Special Tax Accountability Report (SB 165)
Fiscal Year 2024/2025
C. Status of Authorized Facilities Projects
An account entitled “Construction Fund” was established in connection with the issuance of the CFD No. 2013-1, IA No. 1 2015 Bonds, into which a portion of the proceeds from the 2015 Bonds were deposited and disbursed for the costs of the authorized facilities. The amount deposited in the Construction Fund from the 2015 Bond issuance has been fully expended for authorized facilities and the account was subsequently closed during FY 2015/2016.
An account entitled “Acquisition and Construction Fund” was established in connection with the issuance of the CFD No. 2013-1, IA No. 2 2016 Bonds, into which a portion of the proceeds from the 2016 Bonds were deposited and disbursed for the costs of the authorized facilities.
The amount deposited in the Construction Fund from the 2016 Bond issuance has been fully expended for authorized facilities and the account was subsequently closed during FY 2023/2024.
An account entitled “Acquisition and Construction Fund” was established in connection with the issuance of the CFD No. 2013-1, IA No. 3 2020 Private Placement Bonds, into which a portion of the proceeds from the 2020 Bonds were deposited and disbursed for the costs of the authorized facilities. The amount deposited in the Construction Fund from the 2020 Bond issuance has been fully expended for authorized facilities and the account was subsequently closed during FY 2022/2023.
City of Calimesa
Community Facilities District No. 2018-1
(Summerwind Trails)
Special Tax Accountability Report
(SB 165)
Fiscal Year 2024/2025
Prepared for:
City of Calimesa
908 Park Avenue
Calimesa, CA 92320
T. 909.795.9801
TABLE OF CONTENTS
Section I. Background and Overview ................................................................................. 1 A. Community Facilities District Background.............................................................. 1 B. Authorized Facilities................................................................................................ 2 C. Authorized Services ................................................................................................ 2 D. Bond Issuance Summary......................................................................................... 2 Section II. Collection of Special Taxes................................................................................ 3 A. Special Tax Funds.................................................................................................... 3 B. Special Tax Collections and Expenditures (Services) .............................................. 4 C. Status of Authorized Facilities Projects .................................................................. 4
City of Calimesa, Community Facilities District No. 2018-1 (Summerwind Trails) 1 Special Tax Accountability Report (SB 165)
Fiscal Year 2024/2025
SECTION I. BACKGROUND AND OVERVIEW
The Local Agency Special Tax and Bond Accountability Act (“Accountability Act”) was enacted by California State Legislature through Senate Bill 165 to provide accountability measures for any local special tax and/or bond measure subject to voter approval on or after January 1, 2001.
According to the requirements of the Accountability Act (Sections 50075.1 and 53410 of the Government Code of the State of California), the Local Agency Special Tax and Bond Accountability Act Compliance (the “Report”) must be filed annually by the local agency levying a special tax and/or issuing a bond measure on or before each January 1, commencing January 1, 2002 and shall contain a description of the following:
(1) The amount of funds collected and expended to fund authorized facilities. (2) The status of any project required or authorized to be funded by the special tax and/or bond measure.
The information contained in this Report has been compiled and is being presented pursuant to and in accordance with the requirements outlined in the Accountability Act for Fiscal Year 2024/2025.
A. Community Facilities District Background
On June 4, 2018, the City Council (“Council”) of the City of Calimesa (“City”) adopted a resolution of intention to form Community Facilities District No. 2018-1 (Summerwind Trails) (“CFD No. 2018-1”), along with one improvement area (“Improvement Area No. 1” or “IA 1”), to levy two special taxes; 1) for the purpose of financing public improvements to meet the needs of new development or pay debt service on bonds issued to finance such facilities, and 2) to pay for authorized services. After conducting a noticed public hearing, the Council adopted an ordinance establishing CFD No. 2018-1, providing for the levy of special taxes, approving the proposed rates and methods of apportionment of special taxes, and approving the issuance of bonded indebtedness to finance the authorized facilities (“Facilities”) and; to pay for maintenance services (“Services”).
On July 16, 2018, an election was held within CFD No. 2018-1 in which the landowner(s) eligible to vote approved the levy of special taxes and the issuance of bonds in an amount not to exceed $24,000,000.
Subsequently, two additional improvement areas (“Improvement Area No. 2” or “IA 2”, and “Improvement Area No. 3” or “IA 3”) were formed and are authorized to pay for Services.
City of Calimesa, Community Facilities District No. 2018-1 (Summerwind Trails) 2 Special Tax Accountability Report (SB 165)
Fiscal Year 2024/2025
B. Authorized Facilities
Special Tax A collected within CFD No. 2018-1 is to provide for the cost of financing the acquisition and construction of certain public facilities within the City (“Facilities”).
Descriptions of the authorized Facilities are as follows:
IA 1
City of Calimesa Infrastructure
Law Enforcement Facility
Drainage
Government Facility
Library Facility
Multiple Species Habitat Conservation Plan
C. Authorized Services
Special Tax B collected within CFD No. 2018-1 IA 1, IA 2 and IA 3 is to pay for the costs of maintenance of Park landscape maintenance, Lighting servicing and maintenance, Streets and sidewalk maintenance, Street Landscape servicing and maintenance and Storm drain and detention basin maintenance within and associated with the development of properties within or in the vicinity of CFD No. 2018-1.
D. Bond Issuance Summary
Bonds were issued on September 2, 2020 in the amount of $14,325,000 (the “2020 Bonds”).
The annual debt service on the 2020 Bonds is being repaid by the facilities Special Tax A levied on properties within Improvement Area No. 1.
The table below summarizes the application of the Bond proceeds:
2020 Bond Proceeds IA 1
Fund/Account/Sub-Account Bond Proceeds
Acquisition and Construction Fund $14,078,084.75
Reserve Fund 1,097,276.95
Costs of Issuance Fund 194,400.00
Total1 $15,369,761.70
1 Total Bond proceeds deposited are net of the Original Issue Premium and Underwriter’s Discount.
City of Calimesa, Community Facilities District No. 2018-1 (Summerwind Trails) 3 Special Tax Accountability Report (SB 165)
Fiscal Year 2024/2025
SECTION II. COLLECTION OF SPECIAL TAXES
A. Special Tax A Funds
In accordance with the Indenture, all Facilities Special Tax A collected by the City shall be deposited in the Special Tax Fund held by the Fiscal Agent. The table below provides a summary of the Facilities Special Taxes deposited, interest accrued, transfers, and other transactions within the Special Tax Fund for fiscal year ended June 30, 2025.
Facilities Special Tax A
Improvement Area No. 1
Item Balance
Beginning Balance as of July 1, 2024 $934,393.07
Sources of Funds
Special Tax Receipts $719,135.00
Interest Earned 30,014.57
Miscellaneous Transfers (in)1 0.00
Subtotal: Sources $749,149.57
Uses of Funds
Administrative Expenses $(18,001.21)
Transfers to Bond Fund (Debt Service) (626,958.51)
Miscellaneous Transfers (out)2(0.00)
Subtotal: Uses $(644,959.72)
Ending Balance as of June 30, 2025 $1,038,582.92
1. Transfers back include overpayment of debt service and reserve excess earnings.
2. Transfer to the Interest Account per Fiscal Agent Agreement Sections 3.4 and 3.5.
City of Calimesa, Community Facilities District No. 2018-1 (Summerwind Trails) 4 Special Tax Accountability Report (SB 165)
Fiscal Year 2024/2025
B. Special Tax B Collections and Expenditures (Services) The table below provides a summary of the Services Special Tax B deposited, interest accrued, transfers, and other transactions within the Special Tax Fund for fiscal year ended June 30, 2025.
Services Special Tax B
Item Balance
Beginning Balance as of July 1, 2024 $823,439.40
Sources of Funds
Special Tax Receipts $257,272.49
Interest Earned 38,379.25
Miscellaneous Transfers (in) 0.00
Subtotal: Sources $295,651.74
Uses of Funds
Administrative Expenses $(99,042.53)
Street Light Maintenance (2,351.59)
Utilities Water (13,855.10)
Repair & Maintenance (3,264.83)
Street Maintenance (6,348.00)
Miscellaneous Transfers (out) 0.00
Subtotal: Uses $(124,862.05)
Ending Balance as of June 30, 2025 $994,229.09
C. Status of Authorized Facilities Projects
An account entitled “Acquisition and Construction Fund” was established in connection with the issuance of the 2020 Bonds, into which a portion of the proceeds from the 2020 Bonds were deposited and disbursed for the costs of the authorized facilities. The amount deposited into the Acquisition and Construction Fund from the 2020 Bond issuance was fully expended for authorized facilities during FY 2020/2021 and the account was subsequently closed.
City Council Meeting
Agenda Report
Agenda Item No. 8
SUBJECT: PURCHASE OF CATERPILLAR BACKHOE
MEETING DATE: December 15, 2025
PREPARED BY: Kyle Coney, Maintenance Superintendent
RECOMMENDATION: That the City Council:
1) Approve the purchase of the Caterpillar 416 Backhoe from Quinn Cat in the amount of $149,884.37, and
2) Approve the trade in of the 1986 Case 580 Super K backhoe for the estimated value of $7,500 which will reduce the purchase price to $142,384.37, and 3) Adopt Resolution 2025-61, A Resolution of the City Council of the City of Calimesa, California, Amending the FY 2025-26 Budget to Include an Adjustment of $142,384.37 into Vehicle Fund
75. DISCUSSION: The City Council previously approved the purchase of this backhoe on December 1, 2025, based on the vendor’s quotation, which included 0% financing. After Council approval, the vendor notified staff that they are unable to provide the 0% financing program as originally offered.
To address this change and acknowledge the inconvenience to the City, the vendor has instead offered a $10,000 discount on the purchase price. With the removal of the 0% financing option, it no longer makes financial sense for the City to pursue financing, and staff recommends purchasing the equipment in full. This staff report reflects the updated pricing and revised purchasing approach.
City staff is proposing an equipment upgrade to improve operational performance, increase efficiency, and better support essential tasks such as road repairs, storm channel debris removal, illegal dumping clean-up, and other critical Public Works activities. The new equipment will offer increased reliability, minimize downtime, and help us meet rising demands while improving safety and compliance standards. Additionally, it will allow us to maintain a competitive edge, reduce longterm maintenance costs, and ensure we are utilizing the most current and effective tools available.
If we delay the backhoe purchase until after January 1st, the manufacturer has a vehicle wide increase of 4 to 6% to all equipment. That would be an increase of $6,000 to $10,000 roughly. The following information provides a detailed overview of the benefits of acquiring new equipment and how it will enhance city staff’s ability to perform their daily operational duties effectively.
City staff anticipated the request for acquisition of the new Backhoe in the capital budget process for Fiscal Year 2026-27, To delay the backhoe purchase after January 1st, the manufacturer has indicated there will be a vehicle wide price increase of 4 to 6%, The overall cost increase may be an estimated $6,000 to $10,000 if the acquisition happens after January 1, 2026. The following information provides a detailed overview of the benefits of acquiring new equipment and how it will enhance city staff’s ability to perform their daily operational duties effectively.
Increased Reliability & Reduced Downtime
• The current 1986 unit is nearly 40 years old and prone to mechanical failures that delay projects.
• A new CAT 416 offers modern, reliable components that significantly reduce operational downtime.
• Fewer unexpected breakdowns mean improved productivity for Public Works crews.
Lower Maintenance & Repair Costs
• Older equipment requires frequent repairs, often with hard-to-find or discontinued parts. • The CAT 416 includes updated systems designed for longer service intervals and reduced maintenance expenses.
• Predictable maintenance costs help the City budget more accurately.
Compliance with Current Emissions Standards
• The 1986 unit does not meet modern emissions standards and produces significantly higher exhaust output.
• The CAT 416 includes Tier 4 Final-compliant engines, reducing the City's environmental footprint.
• Helps the City align with state and federal sustainability goals.
Improved Safety Standards
• Modern backhoes meet current OSHA and industry safety requirements. • Enhanced visibility, improved braking, updated hydraulics, and safer operator controls reduce the risk of workplace injuries.
• Enclosed ROPS/FOPS improvements provide better operator protection compared to 1986 standards
Sourcewell is a government agency that helps government agencies comply with public bidding requirements through cooperative purchasing. Per CMC 3.15.140, alternative purchasing procedures may be used in the discretion of the Purchasing Agent for the purchase of supplies, equipment, or services, including purchases of supplies, equipment or services where competitive bid procedures have already been utilized, such as purchases from federal, state or county governments, including, state of California agencies, counties, cities, joint power agencies, special districts, and nonprofit agencies whose main purpose is to assist cities or other public entities, and the supplies or equipment are supplied to the City at the same or better price, as was obtained through the competitive bid procedures of that entity.
FISCAL IMPACT: The Vehicle Fund has sufficient funds available for the acquisition of the Backhoe. A budget amendment of $142,384.37 is requested.
Trade in 1986 case 580 super k for an estimate trade value of $7,500 which has already been reflected in the requested budget amendment.
ATTACHMENTS:
Attachment A: Updated Quinn CAT Quote
Attachment B: Quinn CAT Sourcewell Contract
Attachment C: Resolution 2025-61
179528-9999
Dec 04, 2025
CITY OF CALIMESA
ATTN ACCOUNTS PAYABLE
908 PARK AVENUE
CALIMESA, California 92320
Hello
We would like to thank you for your interest in our company and our products, and are pleased to quote the following for your consideration.
One (1) New Caterpillar Inc. Model: 416 Backhoe Loader including standard and optional equipment as listed below.
STOCK NUMBER: NS0023325 SERIAL NUMBER: 0H8P02239 YEAR: 2024 SMU: 3 We wish to thank you for the opportunity of quoting on your equipment needs. This quotation is valid for 30 days, after which time we reserve the right to re-quote. If there are any questions, please do not hesitate to contact me.
Sincerely,
Joseph Munoz
Machine Sales Representative
Quote 179528-9999
Attachment 8A
One (1) New Caterpillar Inc. Model: 416 Backhoe Loader including standard and optional equipment as listed below.
Standard Equipment
BOOMS, STICKS, AND LINKAGES
BACKHOE - Single Tilt Loader
- 14'4'' Center pivot backhoe - Lift cylinder brace
4.3 Meters - Self-leveling loader with single
- Boom and swing transport locks lever control
- Mechanical operated backhoe and - Return-to-dig
stabilizer controls (automatic bucket positioner)
- Street type stabilizer shoes - Transmission neutralizer switch LOADER - Bucket level indicator
POWERTRAIN
- Water separator - Torque converter
- Thermal starting aid system - Transmission-four speed manual shift - Dry type axial seal air cleaner with - Neutral safety switch integral precleaner - Spin-on filters for
- Automatic dust ejection system Fuel
- Filter condition indicator Engine oil
- Hydraulically boosted multi-plate Transmission oil
wet disk brake with dual pedals & - Outboard Planetary Rear Axles interlock - Diesel particulate filter
- Differential lock - Hydrostatic power steering
- Drive-line parking brake
HYDRAULICS
- Load sensing, variable flow system - Caterpillar XT-3 hose with 35 gpm (132 L/min) axial piston - Hydraulic oil cooler pump - Flow-Sharing Hydraulic Valves
- 6 micron hydraulic filter - Hydraulic suction strainer
ELECTRICAL
- 12 volt electrical start - Stop and tail lights
- Horn, front and rear - Audible system fault alarm
- Backup alarm - Key start/stop system
- Hazard flashers/turn signals - 850 CCA maintenance free battery - Halogen head lights (2) - Battery disconnect switch
- Halogen rear flood lights (2) - External Power Receptacle (12v)
OPERATOR ENVIRONMENT
- Interior rearview mirror - Hand and foot throttle
- Rear fenders - Air suspension seat
Quote 179528-9999
- ROPS canopy - Coat Strap
- 2-inch (50mm) retractable seat belt - Lockable storage area FLUIDS
Antifreeze - Extended Life Coolant -30C (-20F)
OTHER STANDARD EQUIPMENT
- Standard Storage Box guard
- Transport tie-down points - CD-ROM Parts Manual
- Ground line fill fuel tank with - Safety Manual
42.3 gal (160L) capacity & 5 gal (19L) - Operations and Maintenance Manual diesel exhaust fluid - Lockable hood
- Rubber impact strips on radiator - Tire Valve Stem Protection Quote 179528-9999
MACHINE SPECIFICATIONS
416 07A BHL CFG2 543-3339
LANE 2 ORDER 0P-9002
BELT, SEAT, 3'' SUSPENSION 206-1748
TIRES, 340 80-18/500 70-24, MX 533-0488
STABILIZER PADS, FLIP-OVER 9R-6007
BUCKET-MP, 1.3 YD3, PO 337-7436
LOADER BUCKET PINS 545-8548
CUTTING EDGE, TWO PIECE 9R-5321
BUCKET, HOE, (NONE) 175-7877
INSTRUCTIONS, ANSI 559-0872
SERIALIZED TECHNICAL MEDIA KIT 421-8926
LINES, AUX COMBO, E-STICK 548-1231
PACK, DOMESTIC TRUCK 0P-0210
SHIPPING/STORAGE PROTECTION 461-6839
RUST PREVENTATIVE APPLICATOR 462-1033
TRIM PACKAGE 3 643-4080
ENG, 70KW, C3.6, T4F 542-7779
AIR CONDITIONER, T4F 542-7810
PRODUCT LINK, CELLULAR, PLE643 639-4880
416 LANE 2 ZCON 628-8811
COUPLER, PG, HYDR.D.LOCK, BHL 485-5303
BUCKET-HD, 24'', 6.2 FT3 219-3387
Quote 179528-9999
WARRANTY & COVERAGE
Standard Warranty: 12 MONTHS FULL MACHINE
Extended Coverage: 416-36 MO/2000 HR PREMIER
CSA 24 Months / 1,000 Hours Parts Only + VisonLink Connect SELL PRICE $139,097.33
EXT WARRANTY Included
CSA Included
NET BALANCE DUE $139,097.33
TRADE IN ($7,500.00)
TIRE FEE $7.00
SALES TAX (7.75%) $10,780.04
AFTER TAX BALANCE $142,384.37
PAYMENT TERMS
Cash Invoice Terms
CASH WITH ORDER
$0.00
F.O.B/TERMS:
Riverside Machine
Accepted by___________________________________ on ____________________ ______________________________
Signature
Quote 179528-9999
011723- CAT
Rev. 3/2022 1
Caterpillar: Confidential Green
Solicitation Number: RFP # 011723
CONTRACT
This Contract is between Sourcewell, 202 12th Street Northeast, P.O. Box 219, Staples, MN 56479 (Sourcewell) and Caterpillar Inc., 100 NE Adams Street, Peoria, IL 61629 (Supplier).
Sourcewell is a State of Minnesota local government unit and service cooperative created under the laws of the State of Minnesota (Minnesota Statutes Section 123A.21) that offers cooperative procurement solutions to government entities. Participation is open to eligible federal, state/province, and municipal governmental entities, higher education, K-12 education, nonprofit, tribal government, and other public entities located in the United States and Canada.
Sourcewell issued a public solicitation for Heavy Construction Equipment with Related Attachments and Technology from which Supplier was awarded a contract.
Supplier desires to contract with Sourcewell to provide equipment, products, or services to Sourcewell and the entities that access Sourcewell’s cooperative purchasing contracts (Participating Entities).
1. TERM OF CONTRACT
A. EFFECTIVE DATE. This Contract is effective upon the date of the final signature below.
B. EXPIRATION DATE AND EXTENSION. This Contract expires April 14, 2027, unless it is cancelled sooner pursuant to Article 22. This Contract may be extended one additional year upon the request of Sourcewell and written agreement by Supplier.
C. SURVIVAL OF TERMS. Notwithstanding any expiration or termination of this Contract, all payment obligations incurred prior to expiration or termination will survive, as will the following: Articles 11 through 14 survive the expiration or cancellation of this Contract. All other rights will cease upon expiration or termination of this Contract.
2. EQUIPMENT, PRODUCTS, OR SERVICES
A. EQUIPMENT, PRODUCTS, OR SERVICES. Supplier will provide the Equipment, Products, or Services as stated in its Proposal submitted under the Solicitation Number listed above.
Supplier’s Equipment, Products, or Services Proposal (Proposal) is attached and incorporated into this Contract.
DocuSign Envelope ID: E74F7137-AC67-4B07-965B-33CD3E77A89B DocuSign Envelope ID: 9AA872AA-9802-4A6D-8065-BECD9EB74C88 Attachment 8B
011723- CAT
Rev. 3/2022 2
Caterpillar: Confidential Green
Pursuant to Section 10(b), Supplier will subcontract certain obligations under this Contract to its dealers. Only those dealers that sign a Participation Agreement with Supplier obligating them to comply with the terms of this Contract will be eligible to provide Equipment, Products, or Services as a subcontractor under this Contract. In the event there is no dealer who has entered into a Participation Agreement available to provide Equipment, Products, or Services to a Participating Entity, Supplier will be under no obligation to provide Equipment, Products, or Services to such Participating Entity under this Contract. Supplier will provide a copy of this Contract to its dealers that would normally service Participating Entities and invite such dealers to enter into a Participation Agreement as a subcontractor of Supplier under the terms of this Contract.
All Equipment and Products provided under this Contract must be new and the current model.
Supplier may offer close-out or refurbished Equipment or Products if they are clearly indicated in Supplier’s product and pricing list. Unless agreed to by the Participating Entities in advance, Equipment or Products must be delivered as operational to the Participating Entity’s site.
This Contract offers an indefinite quantity of sales, and while substantial volume is anticipated, sales and sales volume are not guaranteed.
B. WARRANTY. Supplier warrants that all Equipment, Products, and Services furnished are free from liens and encumbrances, and are free from defects in design, materials, and workmanship.
In addition, Supplier warrants the Equipment, Products, and Services are suitable for and will perform in accordance with the ordinary use for which they are intended. Supplier’s dealers and distributors must agree to assist the Participating Entity in reaching a resolution in any dispute over warranty terms with the manufacturer. Any manufacturer’s warranty that extends beyond the expiration of the Supplier’s warranty will be passed on to the Participating Entity.
C. DEALERS, DISTRIBUTORS, AND/OR RESELLERS. Upon Contract execution and throughout the Contract term, Supplier must provide to Sourcewell a current means to validate or authenticate Supplier’s authorized dealers, distributors, or resellers relative to the Equipment, Products, and Services offered under this Contract, which will be incorporated into this Contract by reference. It is the Supplier’s responsibility to ensure Sourcewell receives the most current information.
3. PRICING
All Equipment, Products, or Services under this Contract will be priced at or below the percentage list discount stated in the supplier’s proposal.
Upon request made to a participating CAT dealer, from a Participating Entity identifying themselves as a Sourcewell member by providing their Sourcewell member number and contract number; formal quotes will list all costs, including all delivery expenses, such as freight and permits (when required).
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Alternatively, Participating Entities may choose to make their own transportation arrangements. In such case, there would be no delivery charges from the local participating Cat dealer.
Regardless of the payment method chosen by the Participating Entity, the total cost associated with any purchase option of the Equipment, Products, or Services must always be disclosed in the pricing quote to the applicable Participating Entity at the time of purchase.
A. SHIPPING AND SHIPPING COSTS. All delivered Equipment and Products must be properly packaged. Damaged Equipment and Products may be rejected. If the damage is not readily apparent at the time of delivery, Supplier must permit the Equipment and Products to be returned within a reasonable time at no cost to Sourcewell or its Participating Entities.
Participating Entities reserve the right to inspect the Equipment and Products at a reasonable time after delivery where circumstances or conditions prevent effective inspection of the Equipment and Products at the time of delivery. In the event of the delivery of nonconforming Equipment and Products, the Participating Entity will notify the Supplier as soon as possible and the Supplier will replace nonconforming Equipment and Products with conforming Equipment and Products that are acceptable to the Participating Entity.
Supplier must arrange for and pay for the return shipment on Equipment and Products that arrive in a defective or inoperable condition.
Sourcewell may declare the Supplier in breach of this Contract if the Supplier intentionally delivers substandard or inferior Equipment or Products.
B. SALES TAX. Each Participating Entity is responsible for supplying the Supplier with valid taxexemption certification(s). When ordering, a Participating Entity must indicate if it is a taxexempt entity.
C. HOT LIST PRICING. At any time during this Contract, Supplier may offer a specific selection of Equipment, Products, or Services at discounts greater than those listed in the Contract.
When Supplier determines it will offer Hot List Pricing, it must be submitted electronically to Sourcewell in a line-item format. Equipment, Products, or Services may be added or removed from the Hot List at any time through a Sourcewell Price and Product Change Form as defined in Article 4 below.
Hot List program and pricing may also be used to discount and liquidate close-out and discontinued Equipment and Products as long as those close-out and discontinued items are clearly identified as such. Current ordering process and administrative fees apply. Hot List Pricing must be published and made available to all Participating Entities.
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4. PRODUCT AND PRICING CHANGE REQUESTS
Supplier may request Equipment, Product, or Service changes, additions, or deletions at any time. All requests must be made in writing by submitting a signed Sourcewell Price and Product Change Request Form to the assigned Sourcewell Supplier Development Administrator. This approved form is available from the assigned Sourcewell Supplier Development Administrator.
At a minimum, the request must:
• Identify the applicable Sourcewell contract number;
• Clearly specify the requested change;
• Provide sufficient detail to justify the requested change; • Individually list all Equipment, Products, or Services affected by the requested change, along with the requested change (e.g., addition, deletion, price change); and • Include a complete restatement of pricing documentation in Microsoft Excel with the effective date of the modified pricing, or product addition or deletion. The new pricing restatement must include all Equipment, Products, and Services offered, even for those items where pricing remains unchanged.
A fully executed Sourcewell Price and Product Request Form will become an amendment to this Contract and will be incorporated by reference.
5. PARTICIPATION, CONTRACT ACCESS, AND PARTICIPATING ENTITY REQUIREMENTS A. PARTICIPATION. Sourcewell’s cooperative contracts are available and open to public and nonprofit entities across the United States and Canada; such as federal, state/province, municipal, K-12 and higher education, tribal government, and other public entities. Supplier may not enter into a contract with a U.S. Federal Government entity prior to obtaining necessary internal approvals and shall not be obligated to provide Equipment, Products or Services to any U.S. Federal Government entity under this Contract unless separately agreed in writing. Caterpillar may work with such parties and may agree to provide equipment or services under the Contract on a case-by-case basis.
The benefits of this Contract should be available to all Participating Entities that can legally access the Equipment, Products, or Services under this Contract. A Participating Entity’s authority to access this Contract is determined through its cooperative purchasing, interlocal, or joint powers laws. Any entity accessing benefits of this Contract will be considered a Service Member of Sourcewell during such time of access. Supplier understands that a Participating Entity’s use of this Contract is at the Participating Entity’s sole convenience and Participating Entities reserve the right to obtain like Equipment, Products, or Services from any other source.
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to join Sourcewell. Sourcewell reserves the right to add and remove Participating Entities to its roster during the term of this Contract.
B. PUBLIC FACILITIES. Supplier’s employees may be required to perform work at governmentowned facilities, including schools. Supplier’s employees and agents must conduct themselves in a professional manner while on the premises, and in accordance with Participating Entity policies and procedures, and all applicable laws.
6. PARTICIPATING ENTITY USE AND PURCHASING
A. ORDERS AND PAYMENT. To access the contracted Equipment, Products, or Services under this Contract, a Participating Entity must clearly indicate to Supplier that it intends to access this Contract; however, order flow and procedure will be developed jointly between Sourcewell and Supplier. Typically, a Participating Entity will issue an order directly to Participating Dealers with payments made to the Participating Dealers. If a Participating Entity issues a purchase order, it may use its own forms, but the purchase order should clearly note the applicable Sourcewell contract number. All Participating Entity orders under this Contract must be issued prior to expiration or cancellation of this Contract; however, Supplier performance, Participating Entity payment obligations, and any applicable warranty periods or other Supplier or Participating Entity obligations may extend beyond the term of this Contract.
Supplier’s acceptable forms of payment are included in its attached Proposal. Participating Entities will be solely responsible for payment and Sourcewell will have no liability for any unpaid invoice of any Participating Entity.
B. ADDITIONAL TERMS AND CONDITIONS/PARTICIPATING ADDENDUM. Additional terms and conditions to a purchase order, or other required transaction documentation, may be negotiated between a Participating Entity and Supplier’s Participating Dealer, such as job or industry-specific requirements, legal requirements (e.g., affirmative action or immigration status requirements), or specific local policy requirements. Some Participating Entities may require the use of a Participating Addendum, the terms of which will be negotiated directly between the Participating Entity and Supplier’s Participating Dealer or its authorized dealers, distributors, or resellers, as applicable. Any negotiated additional terms and conditions must never be less favorable to the Participating Entity than what is contained in this Contract.
C. SPECIALIZED SERVICE REQUIREMENTS. In the event that the Participating Entity requires service or specialized performance requirements not addressed in this Contract (such as ecommerce specifications, specialized delivery requirements, or other specifications and requirements), the Participating Entity and the Supplier may enter into a separate, standalone agreement, apart from this Contract. Sourcewell, including its agents and employees, will not be made a party to a claim for breach of such agreement.
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D. TERMINATION OF ORDERS. Participating Entities may terminate an order, in whole or in part, immediately upon notice to Supplier in the event of any of the following events:
1. The Participating Entity fails to receive funding or appropriation from its governing body at levels sufficient to pay for the equipment, products, or services to be purchased; or
2. Federal, state, or provincial laws or regulations prohibit the purchase or change the Participating Entity’s requirements.
E. GOVERNING LAW AND VENUE. The governing law and venue for any action related to a Participating Entity’s order will be determined by the Participating Entity making the purchase.
7. CUSTOMER SERVICE
A. PRIMARY ACCOUNT REPRESENTATIVE. Supplier will assign an Account Representative to Sourcewell for this Contract and must provide prompt notice to Sourcewell if that person is changed. The Account Representative will be responsible for:
• Maintenance and management of this Contract;
• Timely response to all Sourcewell and Participating Entity inquiries; and • Business reviews to Sourcewell and Participating Entities, if applicable.
B. BUSINESS REVIEWS. Supplier must perform a minimum of one business review with Sourcewell per contract year. The business review will cover sales to Participating Entities, pricing and contract terms, administrative fees, sales data reports, performance issues, supply issues, customer issues, and any other necessary information.
8. REPORT ON CONTRACT SALES ACTIVITY AND ADMINISTRATIVE FEE PAYMENT A. CONTRACT SALES ACTIVITY REPORT. Each calendar quarter, Supplier must provide a contract sales activity report (Report) to the Sourcewell Supplier Development Administrator assigned to this Contract. Reports are due no later than 45 days after the end of each calendar quarter. A Report must be provided regardless of the number or amount of sales during that quarter (i.e., if there are no sales, Supplier must submit a report indicating no sales were made).
The Report must contain the following fields:
• Participating Entity Name (e.g., City of Staples Highway Department); • Participating Entity Physical Street Address;
• Participating Entity City;
• Participating Entity State/Province;
• Participating Entity Zip/Postal Code;
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• Participating Entity Contact Name;
• Participating Entity Contact Email Address;
• Participating Entity Contact Telephone Number;
• Sourcewell Assigned Entity/Participating Entity Number; • Item Purchased Description;
• Item Purchased Price;
• Sourcewell Administrative Fee Applied; and
• Date Purchase was invoiced/sale was recognized as revenue by Supplier.
B. ADMINISTRATIVE FEE. In consideration for the support and services provided by Sourcewell, the Supplier will pay an administrative fee to Sourcewell on all Equipment, Products, and Services provided to Participating Entities. The Administrative Fee must be included in, and not added to, the pricing. Supplier may not charge Participating Entities more than the contracted price to offset the Administrative Fee.
The Supplier will submit payment to Sourcewell for the percentage of administrative fee stated in the Proposal multiplied by the total sales of all Equipment, Products, and Services purchased by Participating Entities under this Contract during each calendar quarter. Payments should note the Supplier’s name and Sourcewell-assigned contract number in the memo; and must be mailed to the address above “Attn: Accounts Receivable” or remitted electronically to Sourcewell’s banking institution per Sourcewell’s Finance department instructions. Payments must be received no later than 45 calendar days after the end of each calendar quarter.
Supplier agrees to cooperate with Sourcewell in auditing transactions under this Contract to ensure that the administrative fee is paid on all items purchased under this Contract.
In the event the Supplier is delinquent in any undisputed administrative fees, Sourcewell reserves the right to cancel this Contract and reject any proposal submitted by the Supplier in any subsequent solicitation. In the event this Contract is cancelled by either party prior to the Contract’s expiration date, the administrative fee payment will be due no more than 30 days from the cancellation date.
9. AUTHORIZED REPRESENTATIVE
Sourcewell's Authorized Representative is its Chief Procurement Officer.
Supplier’s Authorized Representative is the person named in the Supplier’s Proposal. If Supplier’s Authorized Representative changes at any time during this Contract, Supplier must promptly notify Sourcewell in writing.
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10. AUDIT, ASSIGNMENT, AMENDMENTS, WAIVER, AND CONTRACT COMPLETE A. AUDIT. Pursuant to Minnesota Statutes Section 16C.05, subdivision 5, the books, records, documents, and accounting procedures and practices relevant to this Contract are subject to examination by Sourcewell or the Minnesota State Auditor for a minimum of six years from the end of this Contract. This clause extends to Participating Entities as it relates to business conducted by that Participating Entity under this Contract.
B. ASSIGNMENT. Neither party may assign or otherwise transfer its rights or obligations under this Contract without the prior written consent of the other party and a fully executed assignment agreement. Such consent will not be unreasonably withheld. Any prohibited assignment will be invalid. Provided, however, that Supplier is permitted to subcontract certain of its rights and obligations to Supplier Participating Dealers for performance without Sourcewell’s prior written consent.
C. AMENDMENTS. Any amendment to this Contract must be in writing and will not be effective until it has been duly executed by the parties.
D. WAIVER. Failure by either party to take action or assert any right under this Contract will not be deemed a waiver of such right in the event of the continuation or repetition of the circumstances giving rise to such right. Any such waiver must be in writing and signed by the parties.
E. CONTRACT COMPLETE. This Contract represents the complete agreement between the parties. No other understanding regarding this Contract, whether written or oral, may be used to bind either party. For any conflict between the attached Proposal and the terms set out in Articles 1-22 of this Contract, the terms of Articles 1-22 will govern.
F. RELATIONSHIP OF THE PARTIES. The relationship of the parties is one of independent contractors, each free to exercise judgment and discretion with regard to the conduct of their respective businesses. This Contract does not create a partnership, joint venture, or any other relationship such as master-servant, or principal-agent.
11. INDEMNITY AND HOLD HARMLESS
Intentionally omitted.
12. GOVERNMENT DATA PRACTICES
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under this Contract and as it applies to all data created, collected, received, maintained, or disseminated by the Supplier under this Contract.
13. INTELLECTUAL PROPERTY, PUBLICITY, MARKETING, AND ENDORSEMENT A. Intentionally Deleted.
B. PUBLICITY. Any publicity regarding the subject matter of this Contract must not be released without prior written approval from the Authorized Representatives. Publicity includes notices, informational pamphlets, press releases, research, reports, signs, and similar public notices prepared by or for the Supplier individually or jointly with others, or any subcontractors, with respect to the program, publications, or services provided resulting from this Contract.
C. MARKETING. Any direct advertising, marketing, or offers with Participating Entities must be approved by Sourcewell. Send all approval requests to the Sourcewell Supplier Development Administrator assigned to this Contract.
D. ENDORSEMENT. The Supplier must not claim that Sourcewell endorses its Equipment, Products, or Services.
14. GOVERNING LAW, JURISDICTION, AND VENUE
The substantive and procedural laws of the State of Minnesota will govern this Contract. Venue for all legal proceedings arising out of this Contract, or its breach, must be in the appropriate state court in Todd County, Minnesota or federal court in Fergus Falls, Minnesota.
15. FORCE MAJEURE
Neither party to this Contract will be held responsible for delay or default caused by acts of God or other conditions that are beyond that party’s reasonable control. A party defaulting under this provision must provide the other party prompt written notice of the default.
16. SEVERABILITY
If any provision of this Contract is found by a court of competent jurisdiction to be illegal, unenforceable, or void then both parties will be relieved from all obligations arising from that provision. If the remainder of this Contract is capable of being performed, it will not be affected by such determination or finding and must be fully performed.
17. PERFORMANCE, DEFAULT, AND REMEDIES
A. PERFORMANCE. During the term of this Contract, the parties will monitor performance and address unresolved contract issues as follows:
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1. Notification. The parties must promptly notify each other of any known dispute and work in good faith to resolve such dispute within a reasonable period of time. If necessary, Sourcewell and the Supplier will jointly develop a short briefing document that describes the issue(s), relevant impact, and positions of both parties.
2. Escalation. If parties are unable to resolve the issue in a timely manner, as specified above, either Sourcewell or Supplier may escalate the resolution of the issue to a higher level of management. The Supplier will have 30 calendar days to cure an outstanding issue.
3. Performance while Dispute is Pending. Notwithstanding the existence of a dispute, the Supplier must continue without delay to carry out all of its responsibilities under the Contract that are not affected by the dispute. If the Supplier fails to continue without delay to perform its responsibilities under the Contract, in the accomplishment of all undisputed work, the Supplier will bear any additional costs incurred by Sourcewell and/or its Participating Entities as a result of such failure to proceed.
B. DEFAULT AND REMEDIES. Either of the following constitutes cause to declare this Contract, or any Participating Entity order under this Contract, in default:
1. Nonperformance of contractual requirements, or
2. A material breach of any term or condition of this Contract.
The party claiming default must provide written notice of the default, with 30 calendar days to cure the default. Time allowed for cure will not diminish or eliminate any liability for liquidated or other damages. If the default remains after the opportunity for cure, the non-defaulting party may:
• Exercise any remedy provided by law or equity, or
• Terminate the Contract or any portion thereof, including any orders issued against the Contract.
18. INSURANCE
A. REQUIREMENTS. At its own expense, Supplier must maintain insurance policy(ies) in effect at all times during the performance of this Contract with insurance company(ies) licensed or authorized to do business in the State of Minnesota having an “AM BEST” rating of A- or better, with coverage and limits of insurance not less than the following:
1. Workers’ Compensation and Employer’s Liability.
Workers’ Compensation: As required by any applicable law or regulation.
Employer's Liability Insurance: must be provided in amounts not less than listed below:
Minimum limits:
$500,000 each accident for bodily injury by accident
$500,000 policy limit for bodily injury by disease
$500,000 each employee for bodily injury by disease
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2. Commercial General Liability Insurance. Supplier will maintain insurance covering its operations, with coverage on an occurrence basis, and must be subject to terms no less broad than the Insurance Services Office (“ISO”) Commercial General Liability Form CG0001 (2001 or newer edition), or equivalent. At a minimum, coverage must include liability arising from premises, operations, bodily injury and property damage, independent contractors, products-completed operations including construction defect, contractual liability, blanket contractual liability, and personal injury and advertising injury. All required limits, terms and conditions of coverage must be maintained during the term of this Contract.
Minimum Limits:
$1,000,000 each occurrence Bodily Injury and Property Damage $1,000,000 Personal and Advertising Injury
$2,000,000 aggregate for products liability-completed operations $2,000,000 general aggregate
3. Commercial Automobile Liability Insurance. During the term of this Contract, Supplier will maintain insurance covering all owned, hired, and non-owned automobiles in limits of liability not less than indicated below. The coverage must be subject to terms no less broad than ISO Business Auto Coverage Form CA 0001 (2010 edition or newer), or equivalent.
Minimum Limits:
$1,000,000 each accident, combined single limit
4. Umbrella Insurance. During the term of this Contract, Supplier will maintain umbrella coverage over Employer’s Liability, Commercial General Liability, and Commercial Automobile.
Minimum Limits:
$2,000,000
Failure of Supplier to maintain the required insurance will constitute a material breach entitling Sourcewell to immediately terminate this Contract for default.
B. CERTIFICATES OF INSURANCE. Prior to commencing under this Contract, Supplier must furnish to Sourcewell a certificate of insurance, as evidence of the insurance required under this Contract. Prior to expiration of the policy(ies), renewal certificates must be mailed to Sourcewell, 202 12th Street Northeast, P.O. Box 219, Staples, MN 56479 or sent to the Sourcewell Supplier Development Administrator assigned to this Contract. The certificates must be signed by a person authorized by the insurer(s) to bind coverage on their behalf.
Failure to request certificates of insurance by Sourcewell, or failure of Supplier to provide certificates of insurance, in no way limits or relieves Supplier of its duties and responsibilities in this Contract.
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C. ADDITIONAL INSURED ENDORSEMENT AND PRIMARY AND NON-CONTRIBUTORY INSURANCE CLAUSE. Supplier agrees to list Sourcewell and its Participating Entities, including their officers, agents, and employees, as an additional insured under the Supplier’s commercial general liability insurance policy with respect to liability arising out of activities, “operations,” or “work” performed by or on behalf of Supplier, and products and completed operations of Supplier. The policy provision(s) or endorsement(s) must further provide that coverage is primary and not excess over or contributory with any other valid, applicable, and collectible insurance or self-insurance in force for the additional insureds. A Participating Dealer may name a Participating Entity as an additional insured on a case-by-case basis.
WAIVER OF SUBROGATION. Supplier waives and must require (by endorsement or otherwise) all its insurers to waive subrogation rights against Sourcewell and other additional insureds for losses paid under the insurance policies required by this Contract or other insurance applicable to the Supplier or its subcontractors. The waiver must apply to all deductibles and/or selfinsured retentions applicable to the required or any other insurance maintained by the Supplier or its subcontractors.
D. UMBRELLA/EXCESS LIABILITY/SELF-INSURED RETENTION. The limits required by this Contract can be met by either providing a primary policy or in combination with umbrella/excess liability policy(ies), or self-insured retention.
19. COMPLIANCE
A. LAWS AND REGULATIONS. All Equipment, Products, or Services provided under this Contract must comply fully with applicable federal laws and regulations, and with the laws in the states and provinces in which the Equipment, Products, or Services are sold.
B. LICENSES. Supplier’s Participating Dealers must maintain a valid and current status on all required federal, state/provincial, and local licenses, bonds, and permits required for the operation of the business that the Participating Dealer conducts with Sourcewell and Participating Entities.
20. BANKRUPTCY, DEBARMENT, OR SUSPENSION CERTIFICATION
Supplier certifies and warrants that it is not in bankruptcy or that it has previously disclosed in writing certain information to Sourcewell related to bankruptcy actions. If at any time during this Contract Supplier declares bankruptcy, Supplier must immediately notify Sourcewell in writing.
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Supplier certifies and warrants that neither it nor its principals are presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from programs operated by the State of Minnesota; the United States federal government or the Canadian government, as applicable; or any Participating Entity. Supplier certifies and warrants that neither it nor its principals have been convicted of a criminal offense related to the subject matter of this Contract. Supplier further warrants that it will provide immediate written notice to Sourcewell if this certification changes at any time.
21. PROVISIONS FOR NON-UNITED STATES FEDERAL ENTITY PROCUREMENTS UNDER
UNITED STATES FEDERAL AWARDS OR OTHER AWARDS
Intentionally omitted.
22. CANCELLATION
Sourcewell or Supplier may cancel this Contract at any time, with or without cause, upon 60 days’ written notice to the other party. However, Sourcewell may cancel this Contract immediately upon discovery of a material defect in any certification made in Supplier’s Proposal. Cancellation of this Contract does not relieve either party of financial, product, or service obligations incurred or accrued prior to cancellation.
Sourcewell Caterpillar Inc.
By: __________________________ By: __________________________ Jeremy Schwartz Patrick Kearns
Title: Chief Procurement Officer Title: Vice President Sales & Marketing, Construction Industries
Date: ________________________ Date: ________________________ Approved:
By: __________________________
Chad Coauette
Title: Executive Director/CEO
Date: ________________________
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5/24/2023 | 12:16 PM CDT
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RFP 011723 - Heavy Construction Equipment with Related
Attachments and Technology
Vendor Details
Company Name: Caterpillar Inc
Address:
100 NE Adams St
Peoria, IL 61629
Contact: Sean Egel
Email: [email protected]
Phone: 309-675-1399
HST#:
Submission Details
Created On: Tuesday November 15, 2022 14:22:18
Submitted On: Tuesday January 17, 2023 16:10:22
Submitted By: Sean Egel
Email: [email protected]
Transaction #: aeaa61ae-0c73-4610-8208-b80e2e0b4448
Submitter's IP Address: 192.189.129.23
Bid Number: RFP 011723 Vendor Name: Caterpillar Inc
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Specifications
Table 1: Proposer Identity & Authorized Representatives General Instructions (applies to all Tables) Sourcewell prefers a brief but thorough response to each question. Do not merely attach additional documents to your response without also providing a substantive response. Do not leave answers blank; respond “N/A” if the question does not apply to you (preferably with an explanation).
Line
Item Question Response *
1 Proposer Legal Name (one legal entity only):
(In the event of award, will execute the
resulting contract as "Supplier")
Caterpillar Inc.
*
2 Identify all subsidiary entities of the Proposer
whose equipment, products, or services are
included in the Proposal.
N/A
*
3 Identify all applicable assumed names or DBA
names of the Proposer or Proposer's
subsidiaries in Line 1 or Line 2 above.
N/A
*
4 Provide your CAGE code or Unique Entity
Identifier (SAM):
11083 *
5 Proposer Physical Address: 5212 N O'Connor Blvd Ste. 1100, Irving, TX 75039 * 6 Proposer website address (or addresses): https://www.caterpillar.com/, https://www.cat.com/en_US.html * 7 Proposer's Authorized Representative (name,
title, address, email address & phone) (The
representative must have authority to sign
the “Proposer’s Assurance of Compliance” on
behalf of the Proposer and, in the event of
award, will be expected to execute the
resulting contract):
Primary Contact: Patrick Kearns
Title: Vice President Sales & Marketing
Address: 100 NE Adams St, Peoria, IL 61629
Email: [email protected]
Phone: (309) 675-5181
*
8 Proposer's primary contact for this proposal
(name, title, address, email address & phone):
Primary Contact: Sean Egel
Title: Governmental Sales Consultant
Address: 100 NE Adams St, Peoria, IL 61629
Email: [email protected]
Phone: (309) 675-1399
*
9 Proposer's other contacts for this proposal, if
any (name, title, address, email address &
phone):
Primary Contact: Marta Sevilla
Title: Governmental Marketing Manager
Address: 100 NE Adams St, Peoria, IL 61629
Email: [email protected]
Phone: (309) 578-1150
Table 2: Company Information and Financial Strength
Line
Item Question Response *
Bid Number: RFP 011723 Vendor Name: Caterpillar Inc
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10 Provide a brief history of your company,
including your company’s core values,
business philosophy, and industry longevity
related to the requested equipment, products
or services.
The history of Caterpillar is all about doing: creating, building, problem solving, innovating, testing, servicing and improving. We’re proud of the ingenious machines that are part of our rich heritage. More importantly, we are proud of the people who founded and built the company one breakthrough at a time. Beginning with Benjamin Holt and C. L. Best, the people of Caterpillar have always been - and continue to be - extraordinary.
In 1925, when Holt and Best merged to form their new tractor company, they used the name so familiar to people around the world: Caterpillar. The Caterpillar Tractor Company is today known as Caterpillar Inc.
With 2021 sales and revenues of $51.0 billion, Caterpillar Inc. is the world’s leading manufacturer of construction and mining equipment, off-highway diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. For nearly 100 years, we’ve been helping customers build a better, more sustainable world and are committed and contributing to a reduced-carbon future. Our innovative products and services, backed by our global dealer network, provide exceptional value that helps customers succeed. Caterpillar does business on every continent, principally operating through three primary segments – Construction Industries, Resource Industries and Energy & Transportation – and providing financing and related services through our Financial Products segment.
Our Worldwide Code of Conduct, first published in 1974, defines what we stand for and believe in, documenting the uncompromisingly high ethical standards our company has upheld since its founding in 1925. The Code helps Caterpillar employees put our values and principles into action every day by providing detailed guidance on the behaviors and actions that support our values of Integrity, Excellence, Teamwork, Commitment and Sustainability.
Caterpillar's Code of Conduct that can be found at
https://www.caterpillar.com/en/company/code-of-conduct.html *
11 What are your company’s expectations in the
event of an award?
Caterpillar is honored to have served Sourcewell and its members who have purchased Cat® construction equipment, attachments (work tools), and electrical power generation products through Sourcewell since 2008. Furthermore, we are proud to have
earned the Sourcewell Legacy Award in 2019, and have recently been awarded contracts 060122-CAT and 092222-CAT.
Caterpillar's expectations in the event of an award would be to focus on customer needs and continued growth across all governmental segments. Sourcewell has built a strong reputation within the industry that has shown the importance of how this cooperative contract delivers upon customer needs. This contract will be a top factor in our go to market strategy within our strong Cat dealer network. If awarded, we will send out an email to our entire sales force, applicable to governmental, introducing the contract along with ways to train our salesforce, market, and grow the contract.
We look forward to the opportunity to further grow business and serve member needs together in this new Heavy Construction Equipment RFP opportunity. *
12 Demonstrate your financial strength and
stability with meaningful data. This could
include such items as financial statements,
SEC filings, credit and bond ratings, letters
of credit, and detailed reference letters.
Upload supporting documents (as applicable)
in the document upload section of your
response.
Caterpillar Inc. is a publicly traded company, and as such, its financial information is updated quarterly and available at: https://investors.caterpillar.com/overview/default.aspx Caterpillar's 2021 Annual Report provides details about our financial position. Our SEC filing documents can be found at:
https://investors.caterpillar.com/financials/sec-filings/default.aspx. Both documents are included as attachments in our Financial Strength and Stability Documents.
As 2022 results are yet to be released, below you can find a summary of our full year 2021 financials.
In 2021 full year sales and revenues were $51B of which, North American sales were $22B. Operating profit was $6.9B with a profit per share of USD $11.83.
Dividends paid per share of USD $4.28.
*
13 What is your US market share for the
solutions that you are proposing?
Caterpillar is a significant contributor to the overall Heavy Equipment sector within the US and Canada. Market share information beyond what is made publicly available through our annual reports is considered confidential. *
14 What is your Canadian market share for the
solutions that you are proposing?
Caterpillar is a significant contributor to the overall Heavy Equipment sector within the US and Canada. Market share information beyond what is made publicly available through our annual reports is considered confidential. *
15 Has your business ever petitioned for
bankruptcy protection? If so, explain in detail.
No. *
Bid Number: RFP 011723 Vendor Name: Caterpillar Inc
DocuSign Envelope ID: E74F7137-AC67-4B07-965B-33CD3E77A89B DocuSign Envelope ID: 9AA872AA-9802-4A6D-8065-BECD9EB74C88
16 How is your organization best described: is
it a manufacturer, a distributor/dealer/reseller,
or a service provider? Answer whichever
question (either a) or b) just below) best
applies to your organization.
a) If your company is best described as
a distributor/dealer/reseller (or similar entity),
provide your written authorization to act as a
distributor/dealer/reseller for the manufacturer
of the products proposed in this RFP. If
applicable, is your dealer network
independent or company owned?
b) If your company is best described as
a manufacturer or service provider, describe
your relationship with your sales and service
force and with your dealer network in
delivering the products and services
proposed in this RFP. Are these individuals
your employees, or the employees of a third
party?
Caterpillar is a world class manufacturer which distributes products through a vast and capable independent dealer network. Our dealers are strong independently owned companies and in North America alone our 47 dealers have a combined net worth of billions of dollars. Their large valuation is a competitive advantage because it allows them to have the infrastructure to support customers regardless of location, industry, fleet size, or application.
Another advantage of independently owned dealers is that they know their customers and market well. They tailor their services specifically to their customers' needs.
Although we will sign this contract as a manufacturer, our Cat dealers will be given the
opportunity to avail themselves of the opportunity presented by the contract and will execute all the transactions with governmental customers as they do today. This includes but is not limited to consultation, quoting, accepting payment, delivery, warranty support, parts sales, and service.
Caterpillar dealers heartily embrace the other Sourcewell contracts currently available to them (032119-CAT, 092222-CAT, 062320-CAT, 060122-CAT). They have all been trained on contract usage. In fact, the current Heavy Equipment contract is leveraged by
95% of our dealers in North America. Caterpillar offers specific discounts to Sourcewell members. By using any Sourcewell Contract, our dealers agree to honor those discounts.
*
17 If applicable, provide a detailed explanation
outlining the licenses and certifications that
are both required to be held, and actually
held, by your organization (including third
parties and subcontractors that you use) in
pursuit of the business contemplated by this
RFP.
Caterpillar and its subsidiaries operate across the globe in a variety of markets that require Caterpillar to adhere to all locally mandated laws and regulations in order to do business. With regards to the territories covered by this RFP, Caterpillar will comply with applicable laws in order to do business in the territories described herein.
As an equipment manufacturer focused on quality, Caterpillar created the Caterpillar Quality Management System, which is a process-based, ISO 9001:2015 compliant quality management system used throughout Caterpillar to continually improve the quality of our products and services to meet customer, statutory, and regulatory requirements. It is registered with IRCA (International Register of Certificated Auditors) as Caterpillar Quality Management System CAT791A. *
18 Provide all “Suspension or Debarment”
information that has applied to your
organization during the past ten years.
N/A
*
Table 3: Industry Recognition & Marketplace Success
Line
Item Question Response *
Bid Number: RFP 011723 Vendor Name: Caterpillar Inc
DocuSign Envelope ID: E74F7137-AC67-4B07-965B-33CD3E77A89B DocuSign Envelope ID: 9AA872AA-9802-4A6D-8065-BECD9EB74C88
19 Describe any relevant industry awards or
recognition that your company has received
in the past five years
Please note: To list all the awards received in the past 5 years would unnecessarily lengthen our response. For brevity, we are highlighting some recognition received in 2020, 2021 and 2022. Also note there are many global awards.
Fortune Magazine #78 on the Fortune 500 2021
Fortune Magazine World's Most Admired Companies
World & North America Dow Jones Sustainability Index
Forbes Best Employers for diversity 2020 and 2021
#82 Best Global Brands- Interbrand 2021
The Wall Street Journal Best Managed Companies in 2020 and 2021 The Wall Street Journal World's Most Sustainably Managed Companies Human Rights Campaign Foundation Corporate Equality Index Dow Jones Sustainability Index (World and North America) 21 years World’s Most Sustainably Managed Companies – The Wall Street Journal United Way World Wide’s Global Corporate Leadership Program
U.S. President’s Volunteer Service Award from Junior Achievement Corporate Equality Index – Human Rights Campaign Foundation CSR China Top 100 – the 4th CSR China Education Award (China) China CSR Excellence Award – China Philanthropy Times (China)
Corporate Social Responsibility Research Center of Southern Weekly (China) Outstanding Contribution to Poverty Alleviation – China Foundation for Poverty Alleviation (China)
2020 Global 500 – Fortune Magazine
America’s Most Responsible Companies 2020, 2021 & 2022 – Newsweek Best-Managed Companies of 2020 & 2021 – The Wall Street Journal Top Companies for Customer Satisfaction – The Wall Street Journal The CEO Leaderboard: COVID-19 Reputation Rankings – SJR All-America Executive Team – Institutional Investor
Top 150 Global Licensors – Global License Best Global Brands Top 100 – Interbrand World’s Most Valuable Brands 2020 – Forbes
2020 Best Places to Work for Disability Inclusion – Disability Equality Index World’s Best Employers 2020 – Forbes
Best Employers for Women 2020 – Forbes
America’s Best Employers by State 2020 – Forbes
America's Best Employers for Diversity 2020 – Forbes
Best Employers for New Grads 2020 – Forbes
Global 2000 – Forbes 2020, 2021 & 2022
Best Employers for Veterans 2020 and 2021– Forbes
Top Veteran-Friendly Company – U.S. Veterans Magazine
#1 Great Place to Work – Great Place to Work Institute (Brazil) #1 Great Place to Work in the Ag Business - Great Place to Work Institute (Brazil) Chile’s 20 Best Places in 2020 to Work for LGBTQ Equality, pwc Human Rights Campaign
Top of Mind Company “Industry category” (Piracicaba, Brazil) Certification on Promoting Work-Life Balance in Hyogo Prefecture – Hyogo Work and Life Center (Japan)
Hyogo’s Women’s Success in Business Promotion Company – Hyogo Women Empowerment &
Promotion Center (Japan)
Hanada Award for WIN Akashi – Hyogo Women and Future Association (Japan) Hyogo Childcare Supporting Company Award (Japan)
Science & Technology Industry Summit: Outstanding Contribution – The Economic Observer (China)
*
20 What percentage of your sales are to the
governmental sector in the past three years
The governmental and educational sector is extremely important to Caterpillar. We have a dedicated team to support governmental customers and their specific needs. However, percentage of sales to governmental is considered confidential. *
21 What percentage of your sales are to the
education sector in the past three years
The governmental and educational sector is extremely important to Caterpillar. We have a dedicated team to support governmental customers, including the education sector, and their specific needs. However, percentage of sales to education is considered confidential.
*
22 List any state, provincial, or cooperative
purchasing contracts that you hold. What is
the annual sales volume for each of these
contracts over the past three years?
While Cat dealers would typically hold contracts with states and provinces, as an exception Caterpillar holds the state contract with Ohio and NY.
Additionally, we are contract holders with OMNIA and NASPO ValuePoint.
Just as we would never share Sourcewell sales information with other cooperatives, we also keep the sales volumes from other cooperatives confidential. *
Bid Number: RFP 011723 Vendor Name: Caterpillar Inc
DocuSign Envelope ID: E74F7137-AC67-4B07-965B-33CD3E77A89B DocuSign Envelope ID: 9AA872AA-9802-4A6D-8065-BECD9EB74C88
23 List any GSA contracts or Standing Offers
and Supply Arrangements (SOSA) that you
hold. What is the annual sales volume for
each of these contracts over the past three
years?
Listed below are the current GSA contracts that Caterpillar holds:
SIN 333924 Utility Trucks and Tractors: 2020=$6,857,211 2021=$14,071,364 SIN 333120 Street Repair and Cleaning Equipment and Attachments:
2020=$0 / 2021=$143,837
SIN 335999 Power Distribution Equipment: 2020=$151,267.70 / 2021=$9,473.07 These contracts are used by Caterpillar, but we do not allow our dealers to use GSA contracts.
Final sales for the year 2022 have yet to be fully reported. *
Table 4: References/Testimonials
Line Item 24. Supply reference information from three customers who are eligible to be Sourcewell participating entities.
Entity Name * Contact Name * Phone Number *
Baltimore County, MD Jamie Donahue 410-952-6981 *
Washington DC Fleet Greg Harrelson 202-437-3799 *
Town of Scituate Mass. Kevin Cafferty 781-545-8732 *
Table 5: Top Five Government or Education Customers
Line Item 25. Provide a list of your top five government, education, or non-profit customers (entity name is optional), including entity type, the state or province the entity is located in, scope of the project(s), size of transaction(s), and dollar volumes from the past three years.
Entity Name Entity Type * State /
Province * Scope of Work * Size of Transactions * Dollar Volume Past ThreeYears * Virginia
Department of
Transportation -
Central
Government Virginia - VA State Department of
Transportation for Virginia.
Caterpillar requests that
Sourcewell treat the information
in this table as confidential.
Purchased 41 units. $12,321,972
*
State of Idaho Government Idaho - ID State of Idaho.
Caterpillar requests that
Sourcewell treat the information
in this table as confidential.
Purchased 39 units. $10,304,218
*
Alaska
Department of
Transportation
Government Alaska - AK State Department of
Transportation for Alaska.
Caterpillar requests that
Sourcewell treat the information
in this table as confidential.
Purchased 37 units. $12,176,875
*
Arkansas State Government Arkansas - AR State of Arkansas.
Caterpillar requests that
Sourcewell treat the information
in this table as confidential.
Purchased 28 units. $10,053,000
*
Suwannee
County
Government Florida - FL A county local to Florida.
Caterpillar requests that
Sourcewell treat the information
in this table as confidential.
Purchased 26 units. $6,567,420
*
Table 6: Ability to Sell and Deliver Service
Describe your company’s capability to meet the needs of Sourcewell participating entities across the US and Canada, as applicable.
Your response should address in detail at least the following areas: locations of your network of sales and service providers, the number of workers (full-time equivalents) involved in each sector, whether these workers are your direct employees (or employees of a third party), and any overlap between the sales and service functions.
Line
Item Question Response *
Bid Number: RFP 011723 Vendor Name: Caterpillar Inc
DocuSign Envelope ID: E74F7137-AC67-4B07-965B-33CD3E77A89B DocuSign Envelope ID: 9AA872AA-9802-4A6D-8065-BECD9EB74C88