Agenda — Ceres City Council, November 14, 2022

AGENDA

CITY COUNCIL REGULAR MEETING

CITY OF CERES, CALIFORNIA

City Council Chambers, 2701 Fourth Street
Monday, November 14, 2022 – 6:00 p.m.

Mailing Address: Ceres City Hall, 2220 Magnolia Street, Ceres, CA 95307-3292 Phone: (209) 538-5700 Fax: (209) 538-5780

CALL TO ORDER

Mayor Lopez

ROLL CALL

Mayor: Javier Lopez
Vice Mayor: Bret Silveira (District 3)
Councilmembers: James Casey (District 1); Vacant (District 2); Mike Kline (District 4)

NOTICE: THIS MEETING WILL BE HELD IN ACCORDANCE WITH CALIFORNIA GOVERNMENT CODE SECTION 54 953, SUBDIVISION (e) OF THE RALPH M. BROWN ACT (CALIFORNIA GOVERNMENT CODE SECTION 54950, ET SEQ.), CERES RESOLUTION NO 2022-137, AND THE FEDERAL AMERICANS WITH DISABILITIES ACT. WHILE THIS MEETING WILL BE PHYSICALLY

OPEN TO THE PUBLIC, GIVEN THE STATE OF EMERGENCY REGARDING THE THREAT OF COVID- 19, MEMBERS OF THE PUBLIC MAY ALSO PARTICIPATE AND COMMENT VIA THE APPLICATION, ZOOM.

Click this link to join the webinar:
https://us02web.zoom.us/j/86271218850?pwd=YlhVWXFKcUNhNEJxT2ZWenlsM2VSQT09

Webinar ID: 862 7121 8850; Passcode: 054753 ; or Dial: (669) 900-6833

REMOTE PUBLIC COMMENT IS ALSO AVAILABLE FOR THE CITY COUNCIL MEETING BY EMAILING THE CITY CLERK AT [email protected] BEFORE 4:00 PM THE DAY OF THE MEETING. INCLUDE THE AGENDA ITEM NUMBER OR PUBLIC COM MENT PERIOD IN THE SUBJECT LINE OF THE EMAIL. THE CLERK MAY READ WRITTEN COMMENTS INTO THE RECORD, IF SPECIFICALLY REQUESTED TO DO SO AT THE BEGINNING OF YOUR EMAIL. YOUR

WRITTEN COMMENT WILL BE DISTRIBUTED TO THE CITY COUNCIL AND KEPT ON FILE AS PART OF THE OFFICIAL RECORD OF THE COUNCIL MEETING.

*If you have any questions on how to attend virtually or are encountering difficulties connecting to the meeting, please contact the City Clerk at (209) 646-4812 or by email at [email protected] .

AGENDA
Regular City Council Meeting
November 14, 2022

Page 2 ends

INVOCATION
I
nvocation by Pastor Tim Giannosa, Big Valley Grace Church.

PLEDGE OF ALLEGIANCE
P
ledge of Allegiance led by Mayor Lopez.

PRESENTATIONS
A. Lun
g Cancer Awareness Month Proclamation
B. S
mall Business Saturday Proclamation
C. C
enter for Human Services Presentation
CITIZEN COMMUNICATIONS to the Council on matters not included on the agenda (five minutes).

While the City Council welcomes and encourages participation in City Council meetings, adopted rules allow no more than 5 minutes (Resolution No. 2007-106) for expression of non-agenda items. Matters under the jurisdiction of the City Council, and not on the posted agenda, may be addressed by the general public; however, California law prohibits the City Council from taking action on any matter which is no t on the posted agenda unless it is determined to be an emergency by the City Council. Citizens are entitled to address the City Council on any agenda item subject to the 5- minute provision.

APPOINTMENTS TO BOARDS/COMMISSIONS
D. I
nterview Process for Appointment(s) to the Planning Commission (Hoem)

CONFLICT OF INTEREST DECLARATION

CONSENT CALENDAR
All matters listed on the consent calendar are considered routine in nature and will be enacted by a single motion unless otherwise requested by an individual Councilmember or public for special consideration.

Otherwise, the recommendation of staff will be accepted and acted upon by roll call vote.

1. Clerks Report of Posting. The Ag enda of the November 14, 2022 City Council Meeting was Posted on Tuesday, November 8, 2022. (City Clerk)

2. Waive Readings. All Readings of Ordinances and Resolutions are Waived. (Waive readings in full of all ordinances and resolutions on the agenda and declare that said titles which appear on the public agenda shall be determined to have been read by title). (City Clerk)

3. Approval of Minutes for the October 24, 2022 Regular City Council Meeting. (City Clerk)
AGENDA
Regular City Council Meeting
November 14, 2022

Page 3 ends

4. Register of Audited Demand(s) Dated October 19, 2022 through November 2, 2022. (Dias)

5. Resolution No. 2022- 140, Authorizing the City Manager to Approve Payment to Don Pedro Pump for Emergency Repairs Performed at Water Wells 22 & 41. (Royal)

6. Motion Accepting the 2020-2021 Measure H Financial Report for the Period Ending June 30, 2021. (Dias)

7. Motion Accepting the 2020- 2021 City of Ceres Audited Financial Statements and Audit Report for the Period Ending June 30, 2021. (Dias)

8. Resolution No. 2022-141, Approving Amendment Number 1 to an Agreement for Economic Development Services with Chabin Concepts, Inc. and Authorizing the City Manager to Execute the Amendment. (Spade)

9. Final Adoption of Ordinance No. 2022-1073; An Ordinance of the City Council of the City of Ceres Amending Title 9, Public Peace, Morals and Welfare, of the Ceres Municipal Code to Add Chapter 22, Adopting a Military Equipment Use Policy. (City Attorney)

CONSIDERATION OF ITEM(S) REMOVED FROM THE CONSENT CALENDAR

UNFINISHED BUSINESS

None

PUBLIC HEARING

None

NEW BUSINESS

None

DISCUSSION ITEMS

None

COUNCILMEMBER REFERRALS
Councilmembers request to have an agenda item placed on a future agenda. (Pursuant to Chapter 2 - City Council Meetings, J -8.

City Council Referrals/Determination of Items for Agenda.)

AGENDA
Regular City Council Meeting
November 14, 2022

Page 4 ends

REPORTS
At this time, any Councilmembers or City Staff will make an announcement, or report briefly on his or her activities.

• Mayor
• City Council
• City Manager
• City Attorney
• Departments
• County Supervisor

CLOSED SESSION

10. Conference with Labor Negotiators, Cal. Gov. Code § 54957.6 Agency designated representatives: City Manager, Alex Terrazas and Human Resources Director, Delilah Vasquez
Employee organization: Laborers’ International Union of North America (LiUNA!)

11. Conference with Labor Negotiators, Cal. Gov. Code § 54957.6 Agency designated representatives: City Manager, Alex Terrazas and Human Resources Director, Delilah Vasquez
Unrepresented employee: Ceres part-time extra help employees

REPORT FROM CLOSED SESSION

ADJOURNMENT
The next regularly scheduled City Council Meeting will be held on November 28, 2022 at 6:00 p.m. in the City Council Chambers located in the Community Center at 2701 Fourth Street, Ceres, CA

AFFIDAVIT OF POSTING

I, Fallon Martin, City Clerk, for the City of Ceres, declare under penalty of perjury that the foregoing agenda for the Regular City Council Meeting was posted on Tuesday, November 8, 2022, at the following locations in Ceres:

• Community Center Display Case – 2701 Fourth Street
• City Hall Display Case – 2720 2
nd Street
• City Hall Display Case – 2220 Magnolia Street

__________________________________________________________________________________________________________________________________________________________ Fallon Martin, City Clerk
AGENDA
Regular City Council Meeting
November 14, 2022

Page 5 ends

Council Agenda:

The City Council agenda is available for public review on the City’s website at www.ci.ceres.ca.us and posted at the time and places noted above.

Related Materials:

Any writings or documents provided to a majority of the City Council regarding any item on this agenda will be made available for public inspection at the City Clerk’s Office at City Hall located at 2220 Magnolia Street, Ceres, CA during normal business hours. Persons with questions concerning any agenda item may call the City Clerk’s Office at (209) 538- 5731.

Notice regarding Americans with Disabilities Act:

In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting or if you need the agenda and/or the documents in the agenda packet provided in an alternative format, please contact the city clerk’s office at (209) 538- 5731 at least 48 hours prior to the meeting to ensure that reasonable arrangements can be made (28CFR 35.102-35.104 ADA TITLE II)

DECLA

RING NOVEMBER AS

LUNG CANCER AWARNESS MONTH
WHE
REAS, lung cancer is the leading cause of cancer death in the United States and in C alifornia, accounting for more deaths than colon cancer, breast cancer, and prostate cancer combined; and
WHE
REAS, according to the Centers for Disease Control, there were 85,124 new lung cancer cases and 57,484 deaths because of lung cancer between 2015 and 2019 in California; and
WHE
REAS, lung cancer in individuals who never smoked is the 7 th leading cause of canc er-related deaths and accounts for 17,000 - 26,000 deaths in the US every year; and
WHE
REAS, the stigma surrounding lung cancer creates barriers to early diagnosis, treatment, and funding for research cr eating a detrimental i mpact on the quality of life of p eople diagnosed with lung cancer and hindering awareness of and research into lung cancer risk factors; and
WHE
REAS, organizations working in C alifornia such as the American Lung Cancer Screening Initiative and Women’s Lung Cancer Forum, are committed to educating about lung cancer, lung cancer screening and working to increase lung cancer screening rates in Ceres.

NOW
THEREFORE, I, Javier Lopez, Mayor of the City of Ceres, on behalf of the City Council, Vice Mayor Bret Silveira, Councilmembers James Cas ey and Mike Kline , do hereby declar e November 2022 as Lung Cancer Awareness Month in Ceres , and recognize the need for research in lung cancer and encourage all citizens to learn about lung cancer and early detection through lung cancer screening.

Proclaimed this 14th day of November, 2022
__
_________________________
Javier Lopez, Mayor
ITEM A
ITEM A

DECLARING NOVEMBER 26, 2022 AS SMALL BUSINESS

SATURDAY IN THE CITY OF CERES

WHEREAS, the City of Ceres celebrates our local small businesses and the contributions they make to our economy and community; and

WHEREAS, the small, locally owned busine sses of Ceres are vital to the city’s economic health; and

WHEREAS, the City of Ceres recognizes the impacts the COVID -19 pandemic has had on small businesses and those they employ and encourages all to Shop Small, not just on Small Business Saturday but all year long; and

WHEREAS, small bus inesses empl oy over 46% of employees in the private sector in the United States; and

WHEREAS, advocacy groups as well as public and private organizations across the country have endorsed the Saturday after Thanksgiving as Small Business Saturday.

NOW THEREFORE, I, Javier Lopez, Mayor of the City of Ceres, on behalf of the City Council, Vice Mayor Bret Silveira, Councilmembers James Cas ey and Mike Kline, do hereby declar e Saturday, November 26 , 2022 as Small Business Saturday in Ceres, and urge the residents of our community to support small businesses and merchants.

Proclaimed this 14th day of November, 2022

___________________________
Javier Lopez, Mayor
ITEM B
ITEM B
Ceres Partnership
1317 Grandview Avenue, Ceres CA 95307
209-541-0101
Open Monday – Friday
8:00am - 5:00pm (closed for lunch 12-1pm)
All services offered in English & Spanish
ITEM C
CalFresh Nutrition Assistance Program
CalFresh helps people, with little or no income, buy
nutritious food. Formerly Known as the Food Stamp Program.

Need help applying?
We can help you today!
Or you can call (209) 541-0101 to set up an
appointment with Alejandra.

ITEM C
Programa de Asistencia Nutricional CalFresh
CalFresh ayuda a las personas, con poco o ningún ingreso, a comprar alimentos nutritivos. Anteriormente se conocía
como el programa de Cupones para Alimentos o estampillas de comida.
¿Necesita ayuda con su solicitud?
¡Nosotros le podemos ayudar hoy!
O puede agendar una cita con Alejandra al número
(209) 541-0101.

ITEM C
Have you been negatively impacted by COVID-19?
We may be able to help with…
 Housing and Family Stability
 Physical and Mental Well-Being
 Financial Support with Debt & Savings
 Education and Training
 Employment and Career
Please call 209-541-0101 to set an appointment with
Martha
FRC Navigation Program
ITEM C
¿Te ha afectado negativamente el COVID-19?
Es posible que le podamos ayudar con…
 Vivienda y Estabilidad Familiar
 Bienestar físico y mental
 Apoyo financiero con deudas y ahorros
 Educación y Entrenamiento
 Empleo y Carrera
Llame al 209-541-0101 para programar una cita con
Martha
Programa de Navegación del Centro de
Recursos Familiares
ITEM C
Are you struggling and need immediate support?
We may be able to help with…
 Baby Needs (diapers, wipes, etc)
 Clothing
 Food
 Utility Assistance
Please call 209-541-0101 to see what funding is available Emergency Assistance
ITEM C
¿Tienes alguna dificultad y necesitas apoyo inmediato?
Es posible que le podamos ayudar con…
 Necesidades de bebé (pañales, toallitas , etc)
 Ropa
 Comida
 Asistencia de servicios públicos (utilidades)
Llame al 209-541-0101 para ver qué fondos están
disponibles
Asistencia de Emergencia
ITEM C
This group is designed for pregnant women
through baby's first year; It's a place to come
together in person or virtually based on your
needs-with other people. Groups meet every
other week.

Please call 209-541-0101 to set an appointment
with Imelda
Planet Baby
ITEM C
Planeta Bebé
Este grupo esta disenado para mujeres embarazadas
hasta el primer año del bebé Es un lugar para
reuniirse en perona o virtualmente segun sus
necesidades, con otras personas. Los grupos se
seunen cada dos semanas
Llame al 209-541-0101 para programar una
cita con Imelda
ITEM C
Opening Doors
Abriendo Puertas/Opening Doors is a parenting class
that promotes family well-being, civic engagement,
parent leadership, goal setting, and planning for
family success.

Please call 209-541-0101 to set an
appointment with Imelda
ITEM C
Abriendo Puertas
Abriendo Puertas/Opening Doors es un clase
para padres que promueve el bien estar
familiar, compromiso cívico, liderazgode los
padres, establecimiento de metas y
planificación para el éxito familiar.

Llame al 209-541-0101 para programar una
cita con Imelda
ITEM C
School Readiness
Capture your 3-5 year olds curiosity through
educational, developmental and social skills. Parents
will learn about language and physical growth, while
helping their preschooler expand their mind through
educational play!
Please call 209-541-0101 to set an
appointment with Imelda
ITEM C
Preparación Escolar
Captura la curiosidad de su niño de 3-5 años de edad a través de las habilidades educacionales, sociales y el desarollo. ¡Los padres aprenderán sobre el lenguaje y el crecimiento fisico, mientras ayudan a su niño de edad preescolar a expander su mente a través de juegos educativos!
Llame al 209-541-0101 para programar una
cita con Imelda
ITEM C
Keep Baby Safe
We have a class that promotes child safety by learning
how to properly secure your child to a child
restraining system like a car seat or booster seat.

Please call 209-541-0101 to set an
appointment with Imelda
ITEM C
Tenemos una clase que promueve la seguridad de
tu bebé aprendiendo a como asegurar tu bebe en
un asiento de seguridad o asiento de seguridad
infantil
Llame al 209-541-0101 para programar una
cita con Imelda
Mantén al Bebé a Salvo
ITEM C
Please call 209-541-0101 to register with Esperanza
Ceres & Keyes Promotores / Community Health
Outreach Workers
Prevention program to reduce risk factors for developing a potentially serious mental illness and to build protective factors.

Provide mental health resources, support, and
services. Promotes positive cognitive social and emotional development and encourages a state of well-being.

Group session Topics to improve mental health, healthy
ways of managing emotions and promoting positive
relationships.

ITEM C
 Programa de prevención para reducir los factores de riesgo de desarrollar una enfermedad mental potencialmente grave y construir factores de protección.
 Proporcionar recursos y apoyo para la salud
mental.Promueve el desarrollo cognitivo social y emocional positi vo y fomenta un estado de bienestar.
 Sesión en grupo con temas para mejorar la salud mental, formas saludables de manejar las emociones y promover relaciones positivas.

Ceres & Keyes Promotores / Community
Health Outreach Workers
Llame al 209-541-0101 para programar una
cita con Esperanza
ITEM C
ITEM C

COUNCIL AGENDA REPORT

CITY COUNCIL

Javier Lopez, Mayor
James Casey, Dist.1
Vacant, Dist. 2
Bret Silveira, Dist. 3
Mike Kline, Dist. 4
MEETING DATE: November 14, 2022
TO: Mayor and City Council
FROM: Alex Terrazas, City Manager
CONTACT: Christopher Hoem, Community Development Director [email protected], (209) 538-5778
SUBJECT:

Interview Process for Appointment(s) to the Planning Commission RECOMMENDED COUNCIL ACTION:

Staff recommends City Council appoint a Councilmember to serve on the interview panel, along with the Mayor, for the appointment process of the Planning Commission.

I. BACKGROUND:

The City of Ceres is currently conducting a recruitment for at least one vacancy on the Planning Commission. The notice of vacancies, along with instructions on how to apply were published in the Ceres Courier on November 9, 2022 and a second notice will be published on November 16. In addition, the advertisement was posted on the City’s website and various social media platforms from various City department’s social media accounts. The final filing date is Tuesday, November 22, 2022 at 5:00 PM.

Members of the Planning Commission are appointed by the Mayor with Council consensus.

The typical procedure is the Mayor and one Councilmember interview each applicant prior to a City Council meeting, and then present their recommended selection(s) to the City Council at a regular City Council meeting.

II. REASONS FOR RECOMMENDATION:

N/A
III. FISCAL IMPACTS:

N/A

IV. EXISTING POLICY / RELATIONSHIP TO THE STRATEGIC PLAN:

N/A
ITEM D
V. POLICY ALTERNATIVES:

N/A
VI. I
NTERDEPARTMENTAL COORDINATION:

N/A
VII. PUBLIC PARTICIPATION:

N/A
VIII. ENVIRONMENTAL REVIEW:

N/A
I
X. STEPS FOLLOWING APPROVAL:

Mayor Lopez and the appointed Councilmember will review applications and interview applicants on November 28, 2022.

Mayor Lopez will recommend appointment (s) to the Planning Commission, pending Council consensus.

Appr
oved by: ______________________________
Alex Terrazas, City Manager
ITEM D

DRAFT MINUTES

CITY COUNCIL REGULAR MEETING

CITY OF CERES, CALIFORNIA
(via ZOOM and in person)

City Council Chambers, 2701 Fourth Street
Monday, October 24, 2022 – 6:00 p.m.

Mailing Address: Ceres City Hall, 2220 Magnolia Street, Ceres, CA 95307-3292 Phone: (209) 538-5700 Fax: (209) 538-5780

CALL TO ORDER

M
ayor Lopez called the October 24, 2022 meeting to order at 6:00 p.m.

ROLL CALL – Present:

Ma
yor: Javier Lopez
Vice Mayor: Bret Silveira (District 3)
Councilmembers: James Casey (District 1) and Mike Kline (District 4) Note: District 2 - Vacant

District 1
Councilmember
Casey
District 2
District 4
Councilmember
Kline
District 3
Vice Mayor
Silveira
Mayor Lopez
Present VACANT Present Present Present

INVOCATION

I
nvocation by Pastor Jim Stochl, Harvest Presbyterian Church.

PLEDGE OF ALLEGIANCE

P
ledge of Allegiance was led by Mayor Lopez.

PRESENTATIONS

A. V
eterans Day Proclamation

City Council meeting was conducted in accordance with California Governor Newsom’s Executive Orders N-20-20 and N-35-20 and COVID-19 pandemic protocols. This meeting was open to the public with limited capacity seating.

ITEM 3
Mayor Lopez presented a Proclamation to Jack Dempsey, Bob Mattos, and Dave Huggins from the American Legion Ceres Post 491 and Steve Whitney from the Ceres Veterans of Foreign Wars Post in honor of Veterans Day.

B. Code Enforcement Officer Appreciation Week Proclamation

Mayor Lopez presented a Proclamation to Captain Patrick Crane with the Ceres Police Department.

CITIZEN COMMUNICATIONS to the Council on matters not included on the agenda (five minutes)

J
ohn Warren spoke regarding POW/MIA flags being flown at City buildings.

City Clerk, Fallon Martin, read an email into the record from Alvaro Franco regarding mass texting software program.

APPOINTMENTS TO BOARDS/COMMISSIONS

N
one

CONFLICT OF INTEREST DECLARATION

None

CONSENT CALENDAR

C
onsent Calendar items 5 and 11 were removed by Councilmember Kline.

Consent Calendar item 9 was removed by John Osgood.

Action: M
otion by Councilmember Kline , seconded by Vice Mayor
Silveira, approving items 1 – 4, 6 – 8, 10, and 12. Motion carried 4/0/0 by the following roll call vote:

Councilmember
Casey
Councilmember
Kline
Vice Mayor
Silveira Mayor Lopez
Yes Yes Yes Yes

1. Clerks Report of Posting. The Agenda of the October 24, 2022 City Council Meeting was Posted on Wednesday, October 19, 2022. (City Clerk)

3. Approving Minutes of the October 10, 2022 Regular City Council Meeting. (City Clerk)

4. Register of Audited Demand(s) Dated October 5, 2022 through October 12, 2022. (Dias)

5. Removed for separate consideration.

6. Resolution No. 2022 -134, Awarding a Pest Control Service Contract to Animal Damage Management, Inc., and Authorizing the City Manager to Execute the Contract. (Royal)

7. Resolution No. 2022 -135, Awarding a Contract to TK Elevator Corporation for Elevator Maintenance Services and Authorizing the City Manager to Execute the Contract. (Royal)

8. Resolution No. 2022 -136, Appropriating $10,000.00 from Water Contract Services for the Turf Removal Rebate Program. (Royal)

9. Removed for separate consideration.

10. Resolution No. 2022-138, Awarding a Professional Design Services Contract for Smyrna Park Improvements Project to O’Dell Engineering and Authorizing the City Manager to Execute the Contract. (Waugh)

11. Removed for separate consideration.

12. Resolution No. 2022 -139, Approving a Professional Services Agreement for Professional Consulting Services with Marjorie Blom and Authorizing the City Manager to Execute the Contract. (Hoem)

CONSIDERATION OF ITEM(S) REMOVED FROM THE CONSENT CALENDAR

Item
5: Removed for separate consideration by Councilmember Kline

General Correspondence – Information Only
a. Public Works Monthly Report for September 2022. (Royal)

Councilmember Kline spoke regarding the Free Community Disposal Day being held on Saturday, February 4, 2022 from 8:00 a.m. – 12:45 p.m. at the River Bluff Regional Soccer Complex Parking Lot and thanked staff for setting up the event.

Mayor Lopez asked for public comment. The following members of the public spoke:

ITEM 3
Gene Yeakley spoke regarding the community education and outreach staff will be doing for the event.

John Osgood spoke regarding the possibility of only requiring an identification card as opposed to a water bill to participate in the event.

John Warren spoke regarding utility bill inserts being used to advertise for the event.

Rosalinda Vierra spoke regarding the use of social media to advertise for the event.

Linda Kachel spoke regarding volunteering and walking door-to-door to leave flyers for the event.

Mayor Lopez closed public comment.

Action: M
otion by Councilmember Kline , seconded by Vice Mayor
Silveira, approving item 5. Motion carried 4/0/0 by the following roll call vote:

Councilmember
Casey
Councilmember
Kline
Vice Mayor
Silveira Mayor Lopez
Yes Yes Yes Yes

Item 9
: Removed for separate consideration by Ceres resident, John Osgood

Resolution No. 2022 -137, Authorizing the City to Continue Teleconferenced Public Meetings Pursuant to Assembly Bill 361 Allowing the City to Continue a Hybrid Virtual Meeting Environment. (City Clerk)

John Osgood inquired as to what the noticing requirements would be for a councilmember attending a council meeting remotely if Council did not continue the authorization of Teleconferenced Public Meetings pursuant to Assembly Bill (AB) 361 and whether a Zoom meeting can be held with or without the usage of AB 361.

Councilmember Kline spoke regarding the noticing requirements for an elected official that is participating in the council meeting remotely.

City Attorney, Nubia Goldstein, spok e regarding how AB 361 applies to elected and appointed officials, the resolution not being required in order to hold a Zoom environment for council meetings, noticing requirements as a result of adopting AB 361 and if Council chooses not to adopt AB 361, the COVID-19 pandemic ending February 28, 2023, and that an informational update will be brought before Council as February 28, 2023 gets closer.

Mayor Lopez asked for public comment. No one spoke.

ITEM 3
Mayor Lopez closed public comment.

Council and staff discussion included the need to continue with adopting the resolution until after the first of the year.

Action: M otion by Councilmember Kline , seconded by Vice Mayor Silveira, approving item 9. Motion carried 4/0/0 by the following roll call vote:

Councilmember
Casey
Councilmember
Kline
Vice Mayor
Silveira Mayor Lopez
Yes Yes Yes Yes

Item 11 : Removed for separate consideration by Councilmember Kline

Motion Accepting the 2020- 2021 Measure H Financial Report for the Period Ending June 30, 2021. (Dias)

Councilmember Kline spoke regarding a potential discrepancy with the numbers included in the report.

Council and staff discussion included tabling the item so staff could meet with Councilmember Kline and research.

Action: M
otion by Vice Mayor Silveira , seconded by Councilmember Kline, approving to table item 11 . Motion carried 4/0/0 by the following roll call vote:

Councilmember
Casey
Councilmember
Kline
Vice Mayor
Silveira Mayor Lopez
Yes Yes Yes Yes

UNFINISHED BUSINESS

N
one

PUBLIC HEARING

13. O
rdinance No. 2022-1073, An Ordinance of the City Council of the City of Ceres Amending Title 9, Public Peace, Morals and Welfare, of the Ceres Municipal Code to Add Chapter 22, Adopting a Military Equipment Use Policy. (City Attorney)

City Attorney, Nubia Goldstein, introduced the item.

Mayor Lopez opened the public hearing. The following members of the public spoke:

ITEM 3
John Osgood read aloud the definition of “arms” as stated in the Edition of the Black ’s Law Dictionary (first edition).

John Warren spoke regarding the list of weapons the Ceres Police Department must disclose.

Council discussion included the list of equipment that must be disclosed as a result of the policy and adding Chapter 22 to the Ceres Municipal Code.

Action: M
otion by Vice Mayor Silveira , seconded by Councilmember Kline, approving item 13. Motion carried 4/0/0 by the following roll call vote:

Councilmember
Casey
Councilmember
Kline
Vice Mayor
Silveira Mayor Lopez
Yes Yes Yes Yes

NEW BUSINESS

14. M
otion Accepting the 2020-2021 City of Ceres Audited Financial Statements and Audit Report for the Period Ending June 30, 2021. (Dias)

Finance Director, Leticia Dias, introduced the item.

Auditor, Brett Jones, with JJA CPA presented the audit report.

Councilmember Kline requested the item be tabled so he can meet with staff.

Mayor Lopez asked for public comment. No one spoke.

Mayor Lopez closed public comment.

Action: M
otion by Councilmember Kline , seconded by
Councilmember Casey, approvi ng to table item 14. Motion carried 4/0/0 by the following roll call vote:

Councilmember
Casey
Councilmember
Kline
Vice Mayor
Silveira Mayor Lopez
Yes Yes Yes Yes

DISCUSSION ITEMS

N
one

COUNCILMEMBER REFERRALS

ITEM 3
None

REPORTS

At this time, any Council members or City Staff will make an announcement or report briefly on his or her activities.

• M ayor

None

• City Council

Councilmember Casey spoke regarding his participation in the Out of the Darkness walk to fight suicide, the Center for Human Services having an office located in Ceres, and the Casa Cultural Tradiciones in Modesto hosting Día de los Muertos on Sunday, October 30, 2022 from 4:00 p.m. – 7:30 p.m.

Vice Mayor Silveira attended La Morenita’s 50
th anniversary celebration and gave a
reminder of Trunk or Treat being held Saturday, October 29, 2022 from 2:00 p.m. – 4:00 p.m. at Whitmore Park.

• City Manager

None

• City Attorney

None

• Departments

Community Development Director, Christopher Holmes, introduced the City’s new Economic Development Manager, Tamra Spade.

Recreation Manager, Joey Chavez, gave an overview of what to expect at Trunk or Treat 2022 and the Active Military Banner Ceremony on Tuesday, November 8, 2022 at 9:00 a.m. on the corner of Fourth Street and North Street.

Engineering Services Director/City Engineer, Kevin Waugh, thanked R ecreation Manager, Joey Chavez, for all of his efforts, reminded all to use caution when driving Morgan Road, and the ATP survey is still available to take.

• County Supervisor

None

ITEM 3

CLOSED SESSION

N
one

REPORT FROM CLOSED SESSION

N
one

ADJOURNMENT

The next regularly scheduled City Council Meeting will be held on November 28, 2022 at 6:00 p.m. in the City Council Chambers located in the Community Center at 2701 Fourth Street, Ceres, CA.

T
here being no further business, Mayor Lopez adjourned the meeting at 7:06 p.m.

_____________________________
Javier Lopez, Mayor

____________________________
Fallon Martin, City Clerk

Cons
istent with Council Policy, the minutes referenced above are in Action Format. The complete recording of the meeting can be viewed at http://www.ci.ceres.ca.us/ agenda center.

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COUNCIL AGENDA REPORT

CITY COUNCIL

Javier Lopez, Mayor
James Casey, Dist.1
Vacant, Dist. 2
Bret Silveira, Dist. 3
Mike Kline, Dist. 4

MEETING DATE: November 14, 2022

TO: Mayor and City Council

FROM: Alex Terrazas, City Manager

CONTACT: Sam Royal, Interim Director of Public Works
[email protected], (
209) 538-57 17

SUBJECT: Resolution 2022 -140, Authorizing the City Manager to Approve Payment to Don Pedro Pump for Emergency Repairs Performed at Water Wells 22 & 41

RECOMMENDED COUNCIL ACTION:

Staff recommends Council authorize the City Manager to approve payment to Don Pedro Pump for emergency repairs at Well 22 and Well 41 in the amount of $79,478.07.

I. BACKG
ROUND:

The City of Ceres Water System currently operates 12 groundwater wells capable of producing 11,303 gallons per minute according to the 2020 Urban Water Management Plan. The water system is fully groundwater dependent, and it is imperative that all wells are operational , especially in the summer months due to higher temperatures and increased water use by residents . The h igh water demands during the summer months and the immense heat put a great strain on electrical equipment located at each well site requiring them to run at maximum loads.

II. RE
ASONS FOR RECOMMENDATION:

The Uranium Removal Plant at Well 22 removes uranium from the drinking water supply.

Well 22 produces 937 gallons per minute and is not in close proximity to other wells, leaving the system vulnerable to low water pressure if the well is out of service for an extended period of time. In June 2022, the pump at Well 22 failed. Don Pedro Pump is intimately familiar with our water system, wells, and pumps. Don Pedro Pump was able to find a new pump that met our specifications in the United States. Don Pedro Pump was able to remove and replace the pump in just a matter of days.

ITEM 5
Well 41 is a high producing well in an area of Ceres that suffers from low water pressure.

Well 41 produces 950 gallons per minute. In August 2022, the submersible pump motor failed. Don Pedro Pump was able to remove and install a new motor in a very short amount of time only leaving the well offline for three days. August is one of the hottest months of the year and water demand can reach the water system’s maximum flow ability of 11,300 gallons per minute. It was vital the well was in operation.

Don P
edro Pump has serviced the wells, pumps, and motors for the City of Ceres for decades. They are a local company with strong buying power making them the first option for emergency repairs to maintain the water system with adequate water pressure.

III. FISCAL IMPACTS:

Ci
ty Council approved funds in the 2022/23 Water Operations Budget (527.35.0299) for Well Pump Station Maintenance and Repairs. The total cost for this work was $79,478.07.

IV. EXISTING POLICY / RELATIONSHIP TO THE STRATEGIC PLAN:

Ens
ure the community has adequate, well -maintained infrastructure (including water, sewer, streets, traffic signals, parks, sidewalks, facilities) that fosters a quality community and supports a strong economy.

V. POLICY ALTERNATIVES:

The al
ternative to performing the work to this critical piece of w ater infrastructure would have been to not perform these repairs in a timely manner and risk low pressures, and the lack of fire protection within the areas while waiting for parts and repairs.

VI. INTERDEPARTMENTAL COORDINATION:

N/A
VII. PUBLIC PARTICIPATION:

N/A
VIII. ENVIRONMENTAL REVIEW:

N/A
IX. STEPS FOLLOWING APPROVAL:

Upon C
ouncil approval, The City Manager shall authorize the payment of invoice #26989 and invoice #27308 for Don Pedro Pump.

Appr
oved by:________________________________
Alex Terrazas, City Manager
ITEM 5
Attachments:

1. Resolution

2. Invoice #26989

3. Invoice #27308
ITEM 5
ITEM 5
RESOLUTION NO. 2022-140

AUTHORIZING THE CITY MANAGER TO APPROVE PAYMENT TO

DON PEDRO PUMP FOR EMERGENCY REPAIRS PERFORMED AT
WATER WELLS 22 & 41

THE CITY COUNCIL
City of Ceres

WHEREAS, the City of Ceres’ water system is fully groundwater dependent and it is imperative that all wells are operational; and

WHEREAS, Well 22 removes uranium from the drinking water supply and in June 2022 the pump failed; and

WHEREAS, Well 41 is a high producing well in an area that already suffers from low water pressure and in August 2022 the submersible pump motor failed; and

WHEREAS, Don Pedro Pump has serviced wells, pumps, and motors for the City of Ceres for decades and is the first local option for emergency repairs due to their buying power and ability to quickly order parts and complete work; and

WHEREAS, without performing this work immediately, the City was at risk of low water pressures and lack of fire protection; therefore, Don Pedro was called out on both occurrences and was able to complete the work within a matter of days; and

WHEREAS, the total amount for the repairs was $79,478.07; and

WHEREAS, funds have been approved in the 2022/23 Water Operations Budget 527.35.0299 for Well Pump Station maintenance and repairs.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Ceres does hereby authorize the City Manager to approve payment to Don Pedro Pump for emergency repairs to Wells 22 & 41.

PASSED AND ADOPTED by the Ceres City Council at a regular meeting thereof held on the 14th day of November 2022, by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ABSTAIN: Councilmembers:

________________________________
Javier Lopez, Mayor
ATTEST:

_____________________________
Fallon Martin, City Clerk
ITEM 5
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ITEM 5

COUNCIL AGENDA REPORT

MEETING DATE: November 14, 2022

TO: Mayor and City Council

FROM: Alex Terrazas, City Manager

CONTACT: Leticia Dias, Finance Director
[email protected], (209) 538-5764

SUBJECT: Accepting the 2020- 2021 Measure H Financial Report for the Period Ending June 30, 2021

RECOMMENDED COUNCIL ACTION:

Staff recommends the acceptance of the 20 20-2021 Measure H Financial Report for the period ending June 30, 2021.

I. BACKGROUND:

Attached is the Measure H Annual Report on Compliance for the f iscal year ending June 30, 20 21. This item was originally presented to the City Council on the October 24, 2022 agenda. The item was pulled and tabled to the November 14, 2022 agenda in order to give staff time to meet with Councilmember Kline to discuss the questions he had regarding the audit . Staff met with Cou ncilmember Kline and any questions he had have been answered and addressed.

As noted in the Auditor’s report, the compliance audit was conducted in accordance with generally accepted audit ing standards. The auditors issued an unqualified report on the statements, meaning the statements present fairly, in all material respects, the financial position of the Measure H f und as of June 30, 20 21, in conformity with generally accepted accounting principles.

As of June 30, 2021 , Measure H Sales Tax Revenue amounted to $4,534,969. The cash reserve balance of the fund totaled $1,734, 762. The following t able provides information about the expenditures:

Expenditures Description Amount
Police
Salaries & Benefits $1,505,742
Contract Services Equip. maint., training, investigations, phone
$ 166,005

CITY COUNCIL

Javier Lopez, Mayor
James Casey, Dist. 1
Vacant, Dist. 2
Bret Silveira, Dist. 3
Mike Kline, Dist. 4
ITEM 6
Materials & Supplies Uniforms, Unit supplies $ 455,405 Capital Outlay Autos, computer equip., tactical equip. $ 0

Fire

Salaries & Benefits $1,239,014
Contract Services Training, investigations, phone $ 112,928 Materials & Supplies Uniforms, Unit Supplies $ 149,426 Capital Outlay Firefighting equip., computer equip. $ 152,000

TOTAL $3,780,520

II. R EASONS FOR RECOMMENDATION:

Acceptance by the governing body of the annual compliance report is required.

III. FISCAL IMPACTS:

There is no fiscal impact.

IV. EXISTING POLICY / RELATIONSHIP TO THE STRATEGIC PLAN:

N/A

V. POLICY ALTERNATIVES:

N/A

VI. INTERDEPARTMENTAL COORDINATION:

N/A

VII. PUBLIC PARTICIPATION:

N/A

VIII. ENVIRONMENTAL REVIEW:

N/A

IX. STEPS FOLLOWING APPROVAL:

There are no additional requirements after Council Approval.

Approved by: _______________________________
Alex Terrazas, City Manager

Attachments:

1. Measure H Financial Report
ITEM 6

CITY OF CERES

REPORT ON COMPLIANCE WITH

STANISLAUS COUNTY MEASURE H

FOR FIRE AND POLICE PUBLIC PURPOSES
FOR THE YEAR ENDED JUNE 30, 2021
ITEM 6
City of Ceres
Measure H Compliance Report
For the year ended June 30, 2021

Table of Contents

Page

Independent Accountant’s Report on Applying Agreed-Upon Procedures…….……………………...1 Financial Statements:

Balance Sheet ................................................................................................................................... 4

Statement of Revenues, Expenditures and
Changes in Fund Balances ......................................................................................................... 5

Notes to Financial Statements ......................................................................................................... 6

Supplementary Information:

Schedule of Revenues, Expenditures and Changes in Fund Balance s - Budget and Actual ................................................................................................................... 11

Note to Supplementary Information .............................................................................................. 12

ITEM 6

7080 Donlon Way, Suite 204, Dublin, CA 94568 ● phone (925) 556-6200 ● fax: (707) 242-7392 1102 South Main Street, #1, Fort Bragg, CA 95437 ● phone (707) 964-6325 www.jjacpa.com
Independent Accountant’s Report on Applying Agreed-Upon Procedures

To the Honorable Mayor and Members of City Council
of the City of Ceres
Ceres, California

We have performed the procedures enumerated below, which were agreed to by the management of the City of Ceres (City), solely to assist you with compliance with the reporting requirements of the Stanislaus County Initiative Measure H (Initiative) requirements for the year ended June 30, 2021. The City’s management is responsible for the financial information included in this report and the compliance with the Stanislaus County Measure H Funds use of funds. This agreed-upon procedures engagement was conducted in accordance with attestation st andards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of the parties specified in this report. Consequently, we make no representation regardi ng the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose.

a. Verified the appropriateness of personnel and support costs, including equipment purchases, using the City’s policies and procedures as the standard for verification.

Findings: No exceptions were noted.

b. Determined that the Balance Sh eet and Schedule of Changes in Fund Balance are an accurate reflection of information contained in the City’s records.

Findings: No exceptions were noted.

c. Determined that revenues from the Measure H Funds for the period are included in the Schedule of Changes in Fund Balance even if they were deposited by the City after the end of the period (i.e., treats revenues from Measure H on a modified accrual basis).

Findings: No exceptions were noted.

d. Determined that personnel time charged to the program were e xpended only for fire and police services.

Findings: No exceptions were noted.

e. Determined that personnel expen ses charged to the program are limited to personnel funded by the Initiative for the purposes stated in d above.

Findings: No exceptions were noted.

ITEM 6

Page – 2 – Findings (continued)

f. Determined that direct charges to Measure H Funds are not al so included in indirect costs (i.e., space charges) also charged to the Fund.

Findings: No exceptions were noted.
g. Determined that equipment purchases made with Measure H Fund s are only for items specifically approved by the Initiative in the City’s budget.

Findings: No exceptions were noted.
h. Determined that equipment purchased with Measure H Funds is in the custody and use of the personnel funded by Measure H.

Findings: No exceptions were noted.
i. Identified non-compliance with applicable statute, regulatio n, City policy, or Initiative requirements, and any questionable or disallowed amounts received for the period.

Findings: No exceptions were noted.

Had we performed additional proc edures, other matters might hav e come to our attention that would have been reported to you.

This report is intended solely for the information and use of City management, the City Council, others within the entity, and Stanislaus County or other applicable go vernmental entities and is not intended to be and should not be used by anyone other than these specified parties.

]]TVcT? \ÇvA
March 7, 2022 JJACPA, Inc.

Dublin, CA
ITEM 6

FINANCIAL STATEMENTS
3 ITEM 6
City of Ceres
Measure H Fund
Balance Sheet
June 30, 2021

ASSETS 2021
Assets:

Cash 917,899$
Taxes receivable 837,185
Interest receivable 42
Total assets 1,755,126$

LIABILITIES AND FUND BALANC
E
Liabilities:

Accounts payable 20,364$
Total liabilities 20,364
Fund Balance:

Restricted for fire and police public services 1,734,762 Total fund balance 1,734,762
Total liabilities and fund balance 1,755,126$
The accompanying notes are an integral part of these financial statements. 4 ITEM 6
City of Ceres
Measure H Fund
Statement of Revenues, Expenditures, and Changes in Fund Balances For the year ended June 30, 2021
2021
REVENUES:

Sales tax 4,529,152$
Use of money and property 5,817
Total revenues 4,534,969
EXPENDITURES:

Payroll and related costs 2,744,757
Contractual services 278,933
Materials and supplies 604,830
Total expenditures 3,628,520

REVENUES OVER (UNDER)
EXPENDITURES 906,449
OTHER FINANCING SOURCES (USES):

Transfers in 8,336
Transfers out (152,000)
Total other financing sources (uses) (143,664)
Net change in fund balances 762,785
FUND BALANCES:

Beginning of year 971,977
End of year 1,734,762$
The accompanying notes are an integral part of these financial statements. 5 ITEM 6
City of Ceres
Measure H Compliance Report
For the year ended June 30, 2021

Notes to Financial Statements

6 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. Reporting Entity

All transactions of the Measure H Fund of the City of Ceres (City) are included as a separate special revenue fund in the basic financi al statements of the City. The Measure H Fund is used to account for the City’s share of revenues ear ned and expenditures incurred u nder Measure H. The accompanying financial statements are for the Measure H Fund only and are no t intended to fairly present the financial position of the City and the results of its operations.

B. Basis of Accounting and Measurement Focus

The accompanying financial statements are prepared on the modified accrual basis of accounting.

Revenues are generally recorded when measurable and available, and expenditures are recorded when the related liabilities are incurred.

The accounting and financial re porting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus, wherein only current assets and current liabilities gene rally are included on the balance sheet.

Operating statements of governme ntal funds present increases (r evenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets.

C. Description of Funds

The accounts are maintained using fund accounting. A fund is a separate accounting entity with a self- balancing set of accounts.

The City uses a special revenue fund to account for financial r esources received from the half cent sales tax provision of Measure H. These funds are to be used to wards salaries and benefits, and the obtaining, furnishing, operating, and/or maintaining of fire and police public services.

D. Fund Balance

Fund balance consists of only re stricted amounts. Restricted a mounts consist of resources that are subject to externally enforceable legal restrictions imposed by parties altogether outside the government.

ITEM 6
City of Ceres
Measure H Compliance Report
For the year ended June 30, 2021

Notes to Financial Statements, Continued

7 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued

E. Cash and Investments

The Measure H Fund pools its cash with the City . The City pools cash resources from all funds in order to facilitate the management of cash and achieve the goal of obtaining the highest yield with the greatest safety and least risk. The balance in the pooled cash account is available to meet current operating requirements. Cash in e xcess of current requirements is invested in various interest-bearing accounts and other investments for varying terms.

Highly liquid market investments with maturities of one year or less at time of purchase are stated at amortized cost. All other investme nts are stated at fair value. Market value is used as fair value for those securities for which market quotations are readily availa ble. Interest earned on investments is allocated to all funds on the basis of monthly cash and investm ent balances. The Measure H Fund, through the City pool, participates in an investment pool manag ed by the State of California titled Local Agency Investment Fund (LAIF), which has invested a porti on of the pool funds in Structured Notes and Asset-Backed Securities (See Note 2D). LAIF’s investm ents are subject to credit risk with the full faith and credit of the State of California collateral izing these investments. In addition, these Structured Notes and Asset-Backed Securities are subject to market risk as to change in interest rates.

F. Receivables

Receivables represent the sales tax revenues due from the California State Board of Equalization.

G. Use of Estimates

The preparation of financial sta tements in conformity with accounting principles generally accepted in the United States of America requires management to make estima tes and assumptions that affect the reported amounts of assets and liabilities and disclosure of co ntingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures during the reporting period. Actual results could differ from those estimates.

2. CASH AND INVESTMENTS

A. Summary of Cash and Investments

The Measure H Fund participates i n the City’s cash and investme nt pool that includes all other City funds, which the City Treasurer invests to enhance interest ear nings. The pooled interest earned is allocated to each fund based on average month-end and investmen t balances in these funds. The Measure H Fund had cash and investments balance of $909,984 at June 30, 2021.

ITEM 6
City of Ceres
Measure H Compliance Report
For the year ended June 30, 2021

Notes to Financial Statements, Continued

8 2. CASH AND INVESTMENTS, Continued

A. Summary of Cash and Investments, Continued

The California Government Code requires California banks and savings and loan associations to secure cash deposits by pledging securities as collateral. This Code s tates that collateral pledged in this manner shall have the effect of perfecting a security interest in such collateral supe rior to those of a general creditor. Thus, collatera l for cash deposits is conside red 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 fi rst trust deed mortgage notes having a value of 150% of the City’s total cash deposits. The City may w aive collateral requirements for cash deposits which are fully insured up to $250,000 by the Federal Deposit Insurance Corporation.

B. Investments

The investments made by the City Treasurer are limited to those allowable under State statutes as incorporated into the City’s Investment Policy, which is more conservative than State statutes. Under provisions of this policy, the City is authorized to invest in the following types of investments:

Medium-term Corporate Notes Government Agency Securities Certificates of Deposit Treasury Bills and Notes
Bankers' Acceptances Passbook Savings Accounts
Commercial Paper State of California Local Agency Investment Fund Repurchase Agreements

C. Risk Disclosure

Interest Rate Risk: As a means of limiting its exposure to fair value losses arisin g from rising interest rates, the City’s investment pol icy provides that final maturit ies of securities cannot exceed five years.

Specific maturities of investments depend on liquidity needs. A t June 30, 2021, the City’s pooled cash and investments had the following maturities:

Maturity Percentage of Investment
Less than one year 100%

Credit Risk: It is the City’s policy that commercial paper has a rating of “ A-1” or higher by a nationally recognized statistical ra ting organization (NRSRO) a nd have a maturity date not exceeding 180 days from the date of purchase. Medium-term notes, with a final maturity not exceeding five years from the date of purchase, must h ave a rating of A or the equiv alent by a NRSRO. Federal instrumentalities must have a rat ing of AAA or the equivalent b y a NRSRO at the time of purchase with a maximum maturity of five years at the time of purchase. LAIF has a separate investment policy, governed by Government Code Sections 16480-16481.2, that provid es credit standards for its investments.

ITEM 6
City of Ceres
Measure H Compliance Report
For the year ended June 30, 2021

Notes to Financial Statements, Continued

9 2. CASH AND INVESTMENTS, Continued

C. Risk Disclosure, Continued

Custodial Credit Risk: For an investment, custodial credit risk is the risk that, in the event of the failure of the counter party, the City w ill not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The City currently has no security investments other than LAIF.

D. External Investment Pool – Local Agency Investment Fund

The City’s investments with LAIF at June 30, 2021, included a portion of the pool funds invested in Structured Notes and Asset-Backed Securities. These investments may include the following:

Structured Notes - debt securities (other than Asset-Backed Securities) whose ca sh-flow characteristics (coupon rate, rede mption amount, or stated matu rity) depend upon one or more indices and/or that have embedded forwards or options.

Asset-Backed Securities - generally mortgage-backed securities which 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 Collatera lized Mortgage Obligations) or credit card receivables.

The City is a voluntary participant in California Local Agency Investment Fund (LAIF), which is regulated by California Governme nt Code Section under the overs ight of the Local Investment Advisory Board (Board). The Board consists of five members as d esignated by state statute and is chaired by the State Treasurer who is responsible for day to da y administration of LAIF. The total amount invested by all public agencies as of June 30, 2021 was $37,066,592,514 of which the City had a balance of $4,511,560. LAIF is part of the California Pooled Money Investment Account (PMIA), which at June 30, 2021 has a portfolio with market valuation of $193,463,490,765. The fair value of the City’s investment in this pool is reported in the accompany ing financial statements at amounts based upon the City’s pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The bala nce available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis.

ITEM 6

10 SUPPLEMENTARY INFORMATION

ITEM 6
City of Ceres
Measure H Fund
Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the year ended June 30, 2021
Variance
Original Final Positive
Budget Budget Actual (Negative)
REVENUES:

Sales tax 3,516,912$ 3,516,912 $ 4,529,152 $ 1,012,240 $ Investment income - - 5,817 5,817 Total revenues 3,516,912 3,516,912 4,534,969 1,018,057 EXPENDITURES:

Payroll and related costs 2,687,564 2,687,564 2,744,757 (57,193) Contractual services 371,849 328,044 278,933 49,111 Materials and supplies 617,540 710,925 604,830 106,095 Total expenditures 3,676,953 3,726,533 3,628,520 98,013

REVENUES OVER (UNDER)
EXPENDITURES (160,041) (209,621) 906,449 1,116,070 OTHER FINANCING SOURCES (USES):

Operating transfers in - - 8,336 (8,336) Operating transfers out (152,000) (152,000) (152,000) - Total other financing sources (uses) (152,000) (152,000) (143,664) -

REVENUES OVER (UNDER) EXPENDITURES
AND OTHER FINANCING (USES) 762,785
FUND BALANCES:

Beginning of year 971,977
End of year 1,734,762 $
11 ITEM 6
City of Ceres
Measure H Compliance Report
For the year ended June 30, 2021

Note to Supplementary Information

12 A. Budget

An annual budget is adopted by City Council for the special rev enue funds. The budget is the maximum authorization for spendi ng in a fiscal year. An encumbr ance system is used to record commitments and obligations incu rred throughout the year to ens ure the budget authorization is not exceeded. The budget is developed for the Special Revenue Funds using the modified accrual basis of accounting. Amendments to the a pproved budget are approved by C ity Council. Supplemental appropriations are authorized b y City Council during the year. All unencumbered budget appropriations lapse at the end of each fiscal year. Encumbrances for significant capital projects are re- appropriated as part of the follo wing year’s budget. Outstandin g encumbrances are committed in fund balance. At the fund level, expenditures may not legally exceed appropriations.

ITEM 6

COUNCIL AGENDA REPORT

MEETING DATE: November 14, 2022

TO: Mayor and City Council

FROM: Alex Terrazas, City Manager

CONTACT: Leticia Dias, Finance Director
[email protected], (209) 538-5764

SUBJECT: Accepting the 2020-2021 City of Ceres Audited Financial Statements and Audit Report for the Period Ending June 30, 2021

RECOMMENDED COUNCIL ACTION:

Staff recommends the acceptance of the 20 20-20221 City of C eres audited Financial Statements and the Audit Report for the period ending June 30, 2021.

I. BACKGROUND:

The independently audited Financial Statements for the Ci ty of Ceres, as of June 30, 2021, are hereby forwarded for review and acceptance by the Cit y Council.

This item was originally presented to the City Council on the October 24, 2022 agenda. The item was pulled and tabled to the November 14, 2022 agenda in order to give staff time to meet with Councilmember Kline to discuss the questions he had regarding the audit. Staff met with Councilmember Kline and any questions he had have been answered and addressed.

An unqualified opinion has been gi ven by the auditors JJACPA, Inc. to the Financial Statements. The unqualified opinion is the highest , or best, opinion that an auditor can provide . The auditor is making no exceptions , nor inserting any qualifications in this report.

This report is presente d in com pliance with the Government Accounting Standards Board pronouncements. Included in this report are several sections such as highlights, financial analysis, and economic factors to give the reader a more informed perspective as to the fiscal health of the City.

CITY COUNCIL

Javier Lopez, Mayor
James Casey, Dist. 1
Vacant, Dist. 2
Bret Silveira, Dist. 3
Mike Kline, Dist. 4
ITEM 7
General Fund revenue received as of June 30, 2021 equals $23,237,183 as compared to $23, 649,921 as of June 30, 20 20. General Fund expenditures, including encumbrances as of June 30, 20 21 equal $21,205,782 as compared to $23,722,757 as of June 30, 2020.

II. REASONS FOR RECOMMENDATION:

Acceptance by the governing body of the annual audit report is required.

III. FISCAL IMPACTS:

There is no fiscal impact.

IV. EXISTING POLICY / RELATIONSHIP TO THE STRATEGIC PLAN:

N/A

V. POLICY ALTERNATIVES:

N/A

VI. INTERDEPARTMENTAL COORDINATION:

N/A

VII. PUBLIC PARTICIPATION:

N/A

VIII. ENVIRONMENTAL REVIEW:

N/A

IX. STEPS FOLLOWING APPROVAL:

There are no additional requirements after Council approval.

Approved by: ________________________________
Alex Terrazas, City Manager

Attachments:

1. Communication Letter

2. Basic Financial Statements

3. GANN Report

4. Transportation Development Act Financial Report
ITEM 7

CITY OF CERES

COMMUNICATION WITH THOSE CHARGED WITH GOVERNANCE AND

COMMUNICATION OF INTERNAL CONTROL RELATED MATTERS

JUNE 30, 2021

ITEM 7

7080 Donlon Way, Suite 204, Dublin, CA 94568 ● phone (925) 556-6200 ● fax: (707) 232-6226 1102 South Main Street, #1, Fort Bragg, CA 95437 ● phone (707) 964-6325 www.jjacpa.com

June 28, 2022

City Council
City of Ceres
Ceres, California

We have audited the basic financial statements of the City of C eres (City) as of and for the year ended June 30, 2021 and have issued our report thereon dated June 28, 2022. 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 engageme nt letter dated July 29, 2022, o ur responsibility, as described by professional standards, is to form and express an opinion(s) about whether the financial statements that have been prepared by management with your oversight are presented fairly, in all material respects, in conformity 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 f inancial statements are free of material misstatement. An audit of financial statements includes conside ration 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 opini on on the effectiveness of th e entity’s internal control over financial reporting. Accordingly, as part of our audit, we considered the internal control of City of Ceres solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control.

We are also responsible for commu nicating significant matters related to the audit that are, in our professional judgment, relevant to your responsibilities in ove rseeing the financial reporting process.

However, we are not required to design procedures for the purpo se 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.

ITEM 7

Compliance with All Ethics Requirements Regarding Independence

The engagement team, others in our firm, as appropriate, and ou r firm have complied with all relevant ethical requirements regarding independence.

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.

There have been no initial selection of accounting policies and no changes in significant accounting policies or their application dur ing fiscal year ended June 30, 2021. 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 eff ect of significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus.

Significant Accounting Estimates

Accounting estimates are an integral part of the financial stat ements prepared by management and are based on management’s current judgments. Those judgments are no rmally 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 financial statements are useful lives of capital assets (“useful lives”).

Management’s estimate of the useful lives is based on experience with and observation of capital assets, by category (e.g. infrastructure) as well as industry standards , when applicable (i.e. buildings). We evaluated the key factors and assumptions used to develop the u seful lives and determined that it is reasonable in relation to the basic financial statements taken as a whole.

Financial Statement Disclosures
Certain financial statement disc losures involve significant jud gment and are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting the City’s financial statements relate to commitments and contingencies.

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
ITEM 7

For purposes of this communicatio n, professional standards requ ire us to accumulate all known and likely misstatements identified during the audit, other than th ose that we believe are trivial, and communicate them to the appropriate level of management. Furthe r, professional standards require us to also communicate the effect of uncorrected misstatements rel ated 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. Management has corrected all identified misstatements.

In addition, professional standards require us to communicate to you all material, corrected adjustments that were brought to the attention of management as a result of our audit procedures. The following material adjustments were known by management and communicated to us in the form of request for assistance:

To update pension disclosures for GASB 68 management made entri es of $2,532,941 for the pension expense adjustment, $9,620,580 for the net pension obligation, $,306,19 2 for the deferred inflows of resources and $2,781,447 for the deferred outflows of resources.

Disagreements with Management

For purposes of this letter, professional standards define a di sagreement 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 June 28, 2022.

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, the re were no consultations with other accountants regarding auditing and accounting matters.

Other Significant Matters, Findings, or Issues

In the normal course of our profe ssional association with the C ity, we generally discuss a variety of matters, including the applica tion of accounting principles and auditing standards, 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 i n a condition to our retention as the entity’s auditors.

Other Information in Documents Containing Audited Financial Statements

Pursuant to professional standards, our responsibility as auditors for other information in documents containing the City’s audited fi nancial statements does not ext end beyond the financial information identified in the audit report, and we are not required to perform any procedures to corroborate such other information. However, in accordance with such standards, we have read the Management’s ITEM 7

Discussion and Analysis and considered whether such information or the manner of its presentation was materially inconsistent with its presentation in the financial statements.

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.

Communication of Internal Control Related Matters

In planning and performing our audit of the financial statement s, we considered the City’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the p urpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness o f the City’s internal control.

Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allo w 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 the re 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 c ontrol was for the limited purpo se 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 deficien cies. Given these limitations , during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

Very truly yours,
]ÉáxÑ{ ] TÜv{?VcT

JOSEPH J ARCH, CPA
President/CEO
JJACPA, INC.

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CITY OF CERES, CALIFORNIA

ANNUAL FINANCIAL REPORT

FOR THE FISCAL YEAR ENDED

JUNE 30, 2021

Prepared by:

Leticia Dias
Finance Director

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City of Ceres, California
Basic Financial Statements
For the year ended June 30, 2021

Table of Contents

Page

Table of Contents .................................................................................................................................. i

Organization Chart ............................................................................................................................. v

List of Officials .................................................................................................................................. vii

Independent Auditors’ Report ........................................................................................................... 1

Management’s Discussion and Analysis (Required Supplementary Information) ....................... 3

Basic Financial Statements:

Government-Wide Financial Statements:

Statement of Net Position ........................................................................................................ 19 Statement of Activities ............................................................................................................ 20

Fund Financial Statements:

Governmental Funds:

Balance Sheet ................................................................................................................................ 24 Reconciliation of Governmental Funds Balance Sheet to the Statement of Net Position .................................... .................................................................... 26 Reconciliation of Fund Basis Balance Sheet to Government-wide Statement of Net Positio n – Governmental Activities ............................................................. 27 Statement of Revenues, Expenditures, and Changes
in Fund Balances – Governmental Funds ................................................................................ 28 Reconciliation of Fund Basis Sta tements to Government-wide Statement of Activities ............................................................................................................ 30 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities ............................... 31 Statement of Revenues, Expenditures, and Changes in
Fund Balances - Budget to A ctual – General Fund and
Major Special Revenue Funds ................................................................................................. 32

INTRODUCTORY SECTION

FINANCIAL SECTION
ITEM 7
City of Ceres, California
Basic Financial Statements
For the year ended June 30, 2021

Table of Contents, Continued

Page
Basic Financial Statements, Continued:

Fund Financial Statements, Continued:

Proprietary Funds:

Statement of Net Position – Proprietary Funds ............................................................................ 38 Statement of Revenues, Expenses, and Changes in Fund Net Position – Proprietary Funds ............................................................................................................... 39 Statement of Cash Flows – Proprietary Funds ............................................................................. 40

Fiduciary Funds:

Statement of Fiduciary Net Position – Fiduciary Funds ................................................................ 41 Statement of Changes in Fiduciary Net Position – Private Purpose Trust Funds ......................... 42

Notes to Basic Financial Statements .......................................................................................... 45

Required Supplementary Information:

Schedule of Employer Contributions ...................................................................................... 94 Schedule of the Changes in Net Pension Liability and Related Ratios .................................. 95

Combining and Individual Fund Financial Statements and Schedules:

Nonmajor Special Revenue Funds:

Combining Balance Sheet ............................................................................................................ 102 Combining Statement of Reve nues, Expenditures, and Changes i n F und Balances .............................................................................................................. 108 Schedule of Revenues, Expenditures, and Changes in Fund Balan ces – B udget to Actual – Street Tree ........................................................................................ 114 Schedule of Revenues, Expenditures, and Changes in Fund Balan ces – B udget to Actual – Storm Drain Benefit Districts ........................................................... 115 Schedule of Revenues, Expenditures, and Changes in Fund Balan ces – B udget to Actual – Brown Annex ................................................................................... 116 Schedule of Revenues, Expenditures, and Changes in Fund Balan ces – B udget to Actual – Eastgate Street Benefit District ........................................................ 117 Schedule of Revenues, Expenditures, and Changes in Fund Balan ces – B udget to Actual – AB 939 ............................................................................................. 118 Schedule of Revenues, Expenditures, and Changes in Fund Balan ces – B udget to Actual – Neighborhood Park Fees .................................................................. 119 Schedule of Revenues, Expenditures, and Changes in Fund Balan ces – B udget to Actual – BEGIN Grant .................................................................................... 120 Schedule of Revenues, Expenditures, and Changes in Fund Balan ces – B udget to Actual – Program Income BEGIN .................................................................. 121 Schedule of Revenues, Expenditures, and Changes in Fund Balan ces – B udget to Actual – Measure H ........................................................................................ 122 Schedule of Revenues, Expenditures, and Changes in Fund Balan ces – B udget to Actual – State Gas Tax .................................................................................... 123 ITEM 7
City of Ceres, California
Basic Financial Statements
For the year ended June 30, 2021

Table of Contents, Continued

iii

Page
Combining and Individual Fund Financial Statements and Schedules, Continued:

Nonmajor Special Revenue Funds, Continued:

Schedule of Revenues, Expenditures, and Changes in Fund Balan ces – B udget to Actual – Prop 1B ............................................................................................. 124 Schedule of Revenues, Expenditures, and Changes in Fund Balan ces – B udget to Actual – SLESF .............................................................................................. 125 Schedule of Revenues, Expenditures, and Changes in Fund Balan ces – B udget to Actual – Abandoned Vehicle Abatement ........................................................ 126 Schedule of Revenues, Expenditures, and Changes in Fund Balan ces – B udget to Actual – Seized Property ................................................................................. 127 Schedule of Revenues, Expenditures, and Changes in Fund Balan ces – B udget to Actual – Downtown Revitalization ................................................................. 128 Schedule of Revenues, Expenditures, and Changes in Fund Balan ces – B udget to Actual – Street-Light and Landscape District ................................................. 129 Schedule of Revenues, Expenditures, and Changes in Fund Balan ces – B udget to Actual – Traffic Offender ............................................................................... 130 Schedule of Revenues, Expenditures, and Changes in Fund Balan ces – B udget to Actual – Traffic Safety .................................................................................... 131 Schedule of Revenues, Expenditures, and Changes in Fund Balan ces – B udget to Actual – Used Oil Grants ................................................................................ 132 Schedule of Revenues, Expenditures, and Changes in Fund Balan ces – B udget to Actual – ARRA ............................................................................................... 133 Schedule of Revenues, Expenditures, and Changes in Fund Balan ces – B udget to Actual – Department of Conservation Grant .................................................. 134 Schedule of Revenues, Expenditures, and Changes in Fund Balan ces – B udget to Actual – CMAQ .............................................................................................. 135 Schedule of Revenues, Expenditures, and Changes in Fund Balan ces – B udget to Actual – Community Facilities District .......................................................... 136 Schedule of Revenues, Expenditures, and Changes in Fund Balan ces – B udget to Actual – Fire Hydrant Benefit District ............................................................ 137 Schedule of Revenues, Expenditures, and Changes in Fund Balan ces – B udget to Actual – Transportation Development Act ..................................................... 138 Schedule of Revenues, Expenditures, and Changes in Fund Balan ces – B udget to Actual – Community Center ........................................................................... 139

Schedule of Revenues, Expenditures, and Changes in Fund Balances – B udget to Actual – LLEBG ............................................................................................. 140 Schedule of Revenues, Expenditures, and Changes in Fund Balan ces – B udget to Actual – Public Facilities Fees ........................................................................ 141

ITEM 7
City of Ceres, California
Basic Financial Statements
For the year ended June 30, 2021

Table of Contents, Continued

Page
Combining and Individual Fund Financial Statements and Schedules, Continued:

Nonmajor Special Revenue Funds, Continued:

Schedule of Revenues, Expenditures, and Changes in Fund Balan ces – B udget to Actual – Daniel Whitmore House ................................................................... 142 Schedule of Revenues, Expenditures, and Changes in Fund Balan ces – B udget to Actual – River Bluff Regional Park ................................................................ 143 Schedule of Revenues, Expenditures, and Changes in Fund Balan ces – B udget to Actual – Ceres Community Foundation .......................................................... 144 Schedule of Revenues, Expenditures, and Changes in Fund Balan ces – B udget to Actual – 2020 Public Safety Grants ................................................................ 145 Schedule of Revenues, Expenditures, and Changes in Fund Balan ces – B udget to Actual – Clinton Whitmore Mansion .............................................................. 146 Schedule of Revenues, Expenditures, and Changes in Fund Balan ces – B udget to Actual – Measure L ......................................................................................... 147 Schedule of Revenues, Expenditures, and Changes in Fund Balan ces – B udget to Actual – Road Maintenance and Rehab .......................................................... 148

Internal Service Funds:

Statement of Fund Net Position – Internal Service Funds ...... ..................................................... 151 Statement of Revenues, Expens es, and Changes in Fund Net Position– Internal Service Funds ..................................................................................................... 152 Combining Statement of Cash Flo ws – Internal Service Funds .................................................. 153

Trust and Agency Funds:

Combining Statement of Net Pos ition – Private Purpose Trust Funds ........................................ 155 Combining Statement of Changes in Fiduciary Net Position– Private Purpose Trust Funds ........................................................................................... 156

Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with G overnment Auditing Standards ......................................... 157

ITEM 7
City of Ceres, California
Basic Financial Statements
For the year ended June 30, 2021

Organization Chart

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ITEM 7
City of Ceres, California
Basic Financial Statements
For the year ended June 30, 2021

List of Officials

vii

 Javier Lopez, Mayor
 James Casey
 Linda Ryno
 Brett Silveira
 Mike Kline

 Alex Terrazas, City Manager
 Leticia Dias, Finance Director
 Kayla Martinez, City Treasurer
 Diane Nayares-Perez, City Clerk
 Tom Hallinan, City Attorney

CITY COUNCIL

CITY OFFICIALS
ITEM 7

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7080 Donlon Way, Suite 204, Dublin, CA 94568 ● phone (925) 556-6200 ● fax: (707) 232-6226 1102 South Main Street, #1, Fort Bragg, CA 95437 ● phone (707) 964-6325 www.jjacpa.com

INDEPENDENT AUDITORS’ REPORT

To the Honorable Mayor and City Council
of the City of Ceres
Ceres, California

Report on the Financial Statements

We have audited the accompanying financial statements of the go vernmental activities, the business-type activities, each major fund, the aggregate remaining fund information, and budgetary comparison information of the City of Ceres, California (City), as of and for the year ended June 30, 2021, and the rel ated notes to the financial st atements, which collectively comprise the City's basic financial statements as listed in the table of contents.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presenta tion of these financial statements in accordance with accounting principles generally accepted in the United States o f America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express opinions on these financial st atements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the Un ited States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan a nd perform the audit to obtain reasonable assurance about whet her the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidenc e about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s jud gment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design aud it procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion.

An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of significa nt accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Opinions

In our opinion, the financial statements referred to above pres ent fairly, in all material respects, the respective financial position of the governmental activities, the business-type acti vities, each major fund, the aggregate remaining fund information, and budgetary comparison information of the City of Ceres, California, as of June 30, 2021, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

ITEM 7

To the Honorable Mayor and City Council
of the City of Ceres
Ceres, California

Page 2 ends

Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that management’s discussion and analysis on pages 3-16, the Schedule of Employer Contributions on page 9 4, and the Schedule of Changes in Net Pension Liability and Related Rations on page 95 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Gove rnmental 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, o r historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the informat ion 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.

Other Information

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The accompanying supplementary info rmation, which includes the combining and individual nonmajor fund financial statements other information, which inc ludes the introductory section, is presented for purposes of additional analysis and is not a required part of the basic financial statements.

The combining and individual nonmajor fund financial statements is the responsibility of management and was derived from and relates directly to the underlying accounting and other rec ords used to prepare the basic financial statements. Such information has been subjected to the auditing procedures appli ed 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 th e basic financial statements themselves, and other additional procedures in accordance with auditing standards generally acce pted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements and schedule of expenditures of federal awards are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

The introductory section has not been subjected to the auditing procedures applied in the a udit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards , we have also issued our report dated March 31, 2021 on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is 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 internal control over financial reporting or on compliance.

That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial repo rting and compliance and is included in the City’s Single Audit Report.

]]TVcT? \ÇvA
M a r c h 3 1 , 2 0 2 1 JJACPA, Inc.

D u b l i n , C A
ITEM 7
City of Ceres, California
Basic Financial Statements
For the year ended June 30, 2021

Management’s Discussion and Analysis

3 This section provides a narrative overview and analysis of the financial activities of the City of Ceres (City) for the fiscal year ended June 30, 2021. It should be re ad in conjunction with the accompanying transmittal letter and basic financial statements.

FINANCIAL HIGHLIGHTS

 As of June 30, 2021, total assets of the City exceeded its liab ilities by $139,960,715 (net position).

The portion of net position that may be used to meet the government’s ongoing obligations to citizens and creditors (unrestricted net position) is $42,344,754. Ther e are currently $9,065,702 of net position that are restricted and may only be used for a specific purpose. The remaining $88,550,259 is the net investment in capital assets.

♦ As of June 30, 2021, the City’s G overnmental Activities repor ted combined net position of $83,584,334 of that, ($8,969,365) is unrestricted.

♦ As of June 30, 2021, the City’s governmental funds reported c ombined ending fund balances of $19,687,312. Approximately 70% of this total amount ($13.8 million) is nonspendable, restricted, committed or assigned to indicate that it is not available for new spending because it has already been set aside for a specific purpose due to a law, regulation, or Council action or it is not part of available, spendable resources. Of the remaining balance, $8,403,962 is committed as a “general fund reserve” for economic uncertainties and anticipated future short-term structural deficits.

 Capital assets in the governmental activities, net of depreciat ion, decreased to $84,379,402 from $85,704,862, which includes $106,499,757 of infrastructure per the requirements of GASB 34. This decrease is attributed to the disposal of city vehicles and the completion of several infrastructure projects.

ITEM 7
City of Ceres, California
Basic Financial Statements
For the year ended June 30, 2021

Management’s Discussion and Analysis, Continued

4 OVERVIEW OF THE ANNUAL FINANCIAL REPORT

This Annual Financial Report is in two major parts:

1) Introductory section, which includes general information;

2) Financial section, which includes the Management’s Discussion and Analysis (this part), the Basic Financial Statements, which include the Government-wide and the Fund Financial Statements along with the notes t o these financial statements, and supplementary information, which includes Combining and Individual Fund Finan cial Statements and Schedules.

The Basic Financial Statements

The Basic Financial Statements are comprised of the Government- wide Financial Statements and the Fund Financial Statements; these two sets of financial statemen ts provide two different views of the City’s financial activities and financial position.

The Government-wide Financial Statements

The Government-wide Financial Statements provide a broad overview of the City’s activities as a whole and comprise the Statement of Ne t Position and the Statement of Activities. The Statement of Net Position provides information about the financial position of the City as a whole, including all its capital assets and long-term liabilities on the full accrual basis, similar to that used by corporations. The Statement of Activities provides information about all the City ’s revenues and all its expenses, also on the full accrual basis, with the emphasis on measuring net revenues or expenses of each the City’s programs. The Statement of Activities explains in detail the change in Net Position for the year.

All of the City’s activities are grouped into Governmental Acti vities and Business-type activities, as explained below. All the amounts in the Statement of Net Positi on and the Statement of Activities are separated into Governmental Activities and Business-type Activi ties in order to provide a summary of these two activities of the City as a whole.

♦ Governmental activities – All of the City’s basic services are considered to be governmental activities, including general government, community development, economic development, public safety, animal control, e ngineering, community events, public improvements, planning and zoning, building insp ections, and general administ ration. These services are supported by general City revenues such as taxes and by specifi c program revenues such as developer fees.

ITEM 7
City of Ceres, California
Basic Financial Statements
For the year ended June 30, 2021

Management’s Discussion and Analysis, Continued

5 OVERVIEW OF THE ANNUAL FINANCIAL REPORT, Continued

The Government-wide Financial Statements, Continued

♦ Business-type activities – All the City’s enterprise activities are reported here, inclu ding Water, Sewer, and STANCOG. Unlike governmental services, these services are supported by charges paid by users based on the amount of the service they use.

Fund Financial Statements

A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City, lik e other state and local governments, uses fund accounting to ensure and demonstrate compliance with finan ce-related legal requirements. All of the funds of the City can be divided into two categories: governmental funds and proprietary funds.

Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the Government-wide Financial Statements. However, unlike the Government-wide Financial Statem ents, Governmental Fund Financi al Statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financing requirements.

Because the focus of the Governmental Fund Financial Statements is narrower than that of the Government-wide Financial Statements, it is useful to compare t he information presented for governmental funds with similar information presented for governmental activities in the Government- wide Financial Statement. By doing so, readers may better under stand the long-term impact of the government’s near-term financial decisions. Both the government al fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate thi s comparison between governmental funds and governmental activities.

The Governmental Fund Financial Statements provide detailed information about each of the City’s most significant funds, called major f unds. The concept of major fun ds, and the determination of which are major funds, was established by GASB Statement No. 34 and replaces the concept of combining like funds and presenting them as one total. Instead, each major fu nd is presented individually, with all nonmajor funds summarized and presented only in a single column . Subordinate schedules present the detail of these nonmajor funds. Major funds present the major activities of the City for the year, and may change from year to year as a result of changes in the pattern of the City’s activities.

ITEM 7
City of Ceres, California
Basic Financial Statements
For the year ended June 30, 2021

Management’s Discussion and Analysis, Continued

6 OVERVIEW OF THE ANNUAL FINANCIAL REPORT, Continued

Fund Financial Statements, Continued

For the fiscal year ended June 30, 2021, the City’s major funds are as follows:

GOVERNMENTAL FUNDS:
 General Fund
 Street Expansion Special Revenue Fund
 HOME Program Grants Special Revenue Fund
 CDBG Grants Special Revenue Fund

PROPRIETARY FUNDS:
 Water Enterprise Fund
 Sewer Enterprise Fund
 STANCOG Enterprise Fund

Proprietary funds. The City maintains Enterprise-type and internal service proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the Government-wide Financial Statements. The City uses enterprise funds to account for Water, Sewer, and STANCOG activities. Proprietary funds pr ovide the same type of informat ion as the Government-wide Financial Statements, only in more detail. Internal service funds present operations for services provided within the government. Internal service funds are maintained for equip ment, information technology, risk management, and building maintena nce activities. The proprietar y fund financial statements provide separate information for the all of the enterprise operations and a combined total for the internal service funds, which are consolidated into governmental activities at the government-wide statement level.

Notes to the Basic Financial Statements

The notes provide additional information that is essential to a full understanding of the data provided in the Government-wide and Fund Financial Statements. The notes to the basic financial statements can be found on pages 45–92 of this report.

ITEM 7
City of Ceres, California
Basic Financial Statements
For the year ended June 30, 2021

Management’s Discussion and Analysis, Continued

7 OVERVIEW OF THE ANNUAL FINANCIAL REPORT, Continued

Combining and Individual Fund Financial Statements and Schedules

The combining statements refe rred to earlier in connection with nonmajor governme ntal funds are presented immediately following the notes to the financial stat ements. Combining and individual fund statements can be found on pages 102-157 of this report.

GOVERNMENT-WIDE FINANCIAL ANALYSIS

As noted earlier, net position may serve over time as a useful indicator of a government’s financial position.

In the case of the City, assets exceeded liabilities by $139,960,715 as of June 30, 2021.

The Summary of Net Position as of June 30, 2021, and 2020, follows:

Govern- Business- Govern- Business-
mental type mental type
Activities Activities Total Activities Activities Total Current and other assets 30,577,671$ 56,249,926$ 86,827,597$ 27,900,616$ 36,176,891$ 64,077,507$ Noncurrent assets 92,414,107 36,386,744 128,800,851 92,882,470 33,632,934 126,515,404 Total assets 122,991,778 92,636,670 215,628,448 120,783,086 69,809,825 190,592,911 Deferred outflows: Pension Plan 13,971,344 2,350,299 16,321,643 11,627,091 1,927,256 13,554,347 Total assets and deferred outflows 136,963,122 94,986,969 231,950,091 132,410,177 71,737,081 204,147,258 Current and other liabilities 5,926,561 2,184,223 8,110,784 5,202,473 1,175,889 6,378,362 Long-term liabilities 45,023,551 36,032,715 81,056,266 37,169,730 14,723,553 51,893,283 Total liabilities 50,950,112 38,216,938 89,167,050 42,372,203 15,899,442 58,271,645 Deferred inflows: Pension Plan 2,428,676 393,650 2,822,326 3,529,558 592,316 4,121,874 Total liabilities and deferred inflows 53,378,788 38,610,588 91,989,376 45,901,761 16,491,758 62,393,519 Net position:

Net investment in capital assets 83,487,997 5,062,262 88,550,259 84,719,144 21,857,874 106,577,018 Restricted 9,065,702 - 9,065,702 7,582,952 - 7,582,952 Unrestricted (8,969,365) 51,314,119 42,344,754 (5,793,680) 33,387,449 27,593,769 Total net position 83,584,334$ 56,376,381 $ 139,960,715 $ 86,508,416 $ 55,245,323 $ 141,753,739 $ Summary of Net Position
20202021

Restricted net position increased by $1,482,750 due to increased revenue from Measure H and Measure L funding. The increased revenue s are committed to public safet y personnel and equipment costs and projects by the City Council respectively.

ITEM 7
City of Ceres, California
Basic Financial Statements
For the year ended June 30, 2021

Management’s Discussion and Analysis, Continued

8 GOVERNMENT-WIDE FINANCIAL ANALYSIS, Continued

The change in net position for the fiscal years ended June 30, 2021, and 2020, follows:

Govern- Business- Govern- Business-
mental type mental type
Activities Activities Total Activities Activities Total Revenues:

Program revenues:

Charges for services 1,513,702$ 26,727,162$ 28,240,864$ 2,457,594$ 26,604,981$ 29,062,575$ Grants and contributions:

Operating 16,501,734 - 16,501,734 12,810,230 - 12,810,230 Capital 2,485,927 - 2,485,927 4,058,158 - 4,058,158 General revenues:

Property taxes
and assessments 2,493,299 - 2,493,299 2,414,984 - 2,414,984 Sales and use tax 8,764,804 - 8,764,804 8,565,962 - 8,565,962 Utility users tax 861,325 - 861,325 812,497 - 812,497 Other taxes 1,030,586 - 1,030,586 834,820 - 834,820 State motor vehcile in-lieu tax 4,059,777 - 4,059,777 3,902,381 - 3,902,381 Use of money and property 275,976 332,682 608,658 339,304 206,300 545,604 Other general 96,337 5,256,099 5,352,436 150,999 14,455 165,454 Total revenues 38,083,467 32,315,943 70,399,410 36,346,929 26,825,736 63,172,665 Expenses:

Governmental activities:

General government 7,671,594 - 7,671,594 3,837,617 - 3,837,617 Public safety 23,201,443 - 23,201,443 24,468,903 - 24,468,903 En
gineering and transportation 641,146 - 641,146 4,339,268 - 4,339,268 Public works 5,176,901 - 5,176,901 4,766,551 - 4,766,551 Community services 3,791,032 - 3,791,032 3,810,916 - 3,810,916 Economic development 207,914 - 207,914 88,022 - 88,022 Interest and fiscal charges 12,570 - 12,570 15,732 - 15,732 Business-type activities:

Water - 22,255,898 22,255,898 - 8,542,513 8,542,513 Sewer - 9,219,352 9,219,352 - 8,507,699 8,507,699 STANCOG - 14,584 14,584 - 683,363 683,363 Total expenses 40,702,600 31,489,834 72,192,434 41,327,009 17,733,575 59,060,584 Excess (Deficiency) of revenues over
expenditures before transfers (2,619,133) 826,109 (1,793,024) (4,980,080) 9,092,161 4,112,081 Transfers (304,949) 304,949 - (347,908) 347,908 - Change in net position (2,924,082) 1,131,058 (1,793,024) (5,327,988) 9,440,069 4,112,081 Net position:

Beginning of year 86,508,416 55,245,323 141,753,739 91,836,404 45,805,254 137,641,658 End of year 83,584,334$ 56,376,381$ 139,960,715$ 86,508,416$ 55,245,323$ 141,753,739$ 2020202
1 ITEM 7
City of Ceres, California
Basic Financial Statements
For the year ended June 30, 2021

Management’s Discussion and Analysis, Continued

9 GOVERNMENT-WIDE FINANCIAL ANALYSIS, Continued

Revenues

The City’s total revenues for governmental and business-type activities were $70,399,410 for the fiscal year ended June 30, 2021. Approximately 48% of the City’s key revenues are generated from four major sources.

The following discusses variances in key revenues from the prior fiscal year:

1. Sales Tax. Annual receipts increased by 2%. This increase is mainly attri buted to a slow increase in the economy and consumer spending.

2. Property Tax. Annual receipts increase by 3%, due to an increase in the assessed values and increased sale of foreclosed homes. Property owners paid the t ax deferral amounts due to COVID-19 pandemic as payment for this deferral was due in this fiscal year.

3. Grants and Contributions – Governmental Activities Operating. The increase in Governmental operating grants and contributions was mainly due to the CARES ACT grant revenue given to the City to reimburse COVID related expenditures.

4. State Motor Vehicle In-Tax – Annual receipts increased by 4%. The increase is due to increased vehicle registration fees.

ITEM 7
City of Ceres, California
Basic Financial Statements
For the year ended June 30, 2021

Management’s Discussion and Analysis, Continued

10 GOVERNMENT-WIDE FINANCIAL ANALYSIS, Continued

Expenses

Governmental and business-type activity expenses of the City for the year totaled $72,192,434.

Governmental activity expenses totaled $40,702,600 or 56% of to tal expenses. Business-type activities incurred $31,489,834 of expenses during the fiscal year. Public safety costs represented 57% of total governmental activities expenses, which represented the largest single expense for governmental activities.

Governmental Activities

The following table shows the cost of each of the City’s major programs and the net cost of the programs.

Net cost is the total cost less fees and other direct revenue generated by the activities. The net cost reflects the financial burden that was placed on the City’s taxpayers by each of the programs. The total cost of services and the net cost of services for the fiscal years ended June 30, 2021, and 2020, are as follows:

Total Cost Net Cost Total Cost Net Cost
of Services of Services of Services of Services
General government 7,671,594$ (3,779,120)$ 3,837,617$ (2,203,722)$ Public safety 23,201,443 (16,596,330) 24,468,903 (18,244,664) Engineering and transportation 641,146 2,882,311 4,339,268 (1,474,847) Public works 5,176,901 (820,153) 4,766,551 779,153 Community services 3,791,032 (1,677,541) 3,810,916 (937,407) Economic development 207,914 (197,834) 88,022 96,192 Interest and fiscal charges 12,570 (12,570) 15,732 (15,732) Total 40,702,600$ (20,201,237)$ 41,327,009$ (22,001,027)$ 2021 2020

ITEM 7
City of Ceres, California
Basic Financial Statements
For the year ended June 30, 2021

Management’s Discussion and Analysis, Continued

11 GOVERNMENT-WIDE FINANCIAL ANALYSIS, Continued

Revenues by source for the fiscal years ended June 30, 2021, and 2020, are as follows:

Charges for services

3.97%
Operating grants

43.33%
Capital grants

6.53%
Property taxes

6.55%
Sales and use tax

23.01%
Utility users tax

2.26%
Other taxes

2.71%
State motor vehicle
in-lieu tax

10.66%
Use of money and
property

0.72%
Other general
revenues

0.25%
Revenues by Source - Governmental Activities
2021
Charges for services

6.76%
Operating grants

35.24%
Capital grants

11.17%
Property taxes

6.64%
Sales and use tax

23.57%
Utility users tax

2.24%
Other taxes

2.30%
State motor vehicle
in-lieu tax

10.74%
Use of money and
property

0.93%
Other general
revenues

0.42%
Revenues by Source - Governmental Activities
2020
ITEM 7
City of Ceres, California
Basic Financial Statements
For the year ended June 30, 2021

Management’s Discussion and Analysis, Continued

12 GOVERNMENT-WIDE FINANCIAL ANALYSIS, Continued

Business-type activities. Business-type activities increased the City’s net position to $56,376,381. The City has three business-type activities: Water, Sewer, and STANCOG. Water accounts for 68%, Sewer accounts for 32% of total business-type activity revenue, and STANCOG accounts for 0%. The expenses and program revenues for the business-type activities for the fiscal year ended June 30, 2021, and 2020, are as follows:

$-
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
Water Sewer STANCOG
Program revenues Operating expenses
$-
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
$16,000,000
Water Sewer STANCOG
Program revenues Operating expenses
Expenses and Program Revenues
Business-type Activities
2020
Expenses and Program Revenues
Business-type Activities
2021
ITEM 7
City of Ceres, California
Basic Financial Statements
For the year ended June 30, 2021

Management’s Discussion and Analysis, Continued

13 GOVERNMENT-WIDE FINANCIAL ANALYSIS, Continued

The revenues by source for the bus iness-type activities for the fiscal years ended June 30, 2021, and 2020, are as follows:

Charges for
services

98.97%
Investment
earnings

1.03%
Revenues by Source - Business-type Activities
2021
Charges for
services

99.18%
Investment
earnings

0.77%
Other general
revenues

0.05%
Revenues by Source - Business-type Activities
2020
ITEM 7
City of Ceres, California
Basic Financial Statements
For the year ended June 30, 2021

Management’s Discussion and Analysis, Continued

14 GOVERNMENT-WIDE FINANCIAL ANALYSIS, Continued

Financial Analysis of the Government’s Funds

The City of Ceres uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. The fund financial statements focus on individual parts of the City government, reporting the City’s operations in more detail than the government-wide financial statements.

Governmental funds . The City’s governmental funds provide information on near-ter m inflows, outflows, and balances of spending resources. At the fiscal yea r ended June 30, 2021, the City’s governmental funds reported combined fund balances of $19,687,312. This is an increase of $2,905,551 or 17% more than last year. The increase was mainly due the CAR ES ACT funds granted to the city to help recover from the COVID-19 pandemic. The General Fund is t he chief operating fund of the City.

At the fiscal year ended June 30, 2021, General Fund unassigned fund balance totaled $8,403,962 with $14,342 as nonspendable.

Community Development Block Grant (CDBG) money is available to cities for a variety of community enhancement activities. In the fiscal year ended June 30, 2021, the majority of this money was used to provide first time home buyers assistance and home rehabilitation for low-income residents.

Proprietary funds. The City’s proprietary funds net position increased by $1,131,058 in the fiscal year ended June 30, 2021. This was primarily due to the scheduled increase in water and sewer rates; and the completion of several major water and sewer capital projects. Factors concerning the finances of the three proprietary funds have already been addressed in the disc ussion of the City ’s business-type activities.

General Fund Budgetary Highlights

The difference between the final budget and actual revenues reflects a negative of $165,343. This was mainly due to the decrease in license and permit fees. Total general fund final budget for expenditures was $25,795,253. Actual expenditures were $4,903,516 under budget (approximately 19% of budget).

ITEM 7
City of Ceres, California
Basic Financial Statements
For the year ended June 30, 2021

Management’s Discussion and Analysis, Continued

15 GOVERNMENT-WIDE FINANCIAL ANALYSIS, Continued

Capital Assets

The City’s net investment in capital assets for its governmenta l and business type activities as of June 30, 2021, amount to $118,398,264. This net investment in capita l assets includes land, buildings and improvements, machinery and equipment, and infrastructure.

2021 2020 2021 2020 2021 2020
Land 14,753,193$ 14,753,193$ 3,291,818$ 1,783,812$ 18,045,011$ 16,537,005$ Buildings and improvements 22,687,631 23,376,672 3,458,180 3,749,809 26,145,811 27,126,481 Machinery and equipment 5,710,678 5,606,091 1,181,341 1,428,166 6,892,019 7,034,257 Infrastructure 41,227,900 41,968,904 26,087,523 24,077,087 67,315,423 66,045,991 Total 84,379,402$ 85,704,860$ 34,018,862$ 31,038,874$ 118,398,264$ 116,743,734$ Governmental Activities Business-type Activities Totals

Major capital asset events during the year included: the purchase of machinery, equipment, land for new water department building; and disposal of obsolete equipment.

More detail of the capital assets and current activity can be found in the notes to the financial statements on pages 51 and 52 for significan t accounting policies and Note 5 on page 64 for other capital asset information.

Economic Outlook

The national economy suffered th rough a worldwide pandemic that continued into fiscal year 2020- 2021. The national unemployment rate decreased to 5.9% down from 11.2% in 2020. While the City is ready to respond to the economic crisis created by COVID-19 without compromising services or closing focus on priorities, the long-te rm impacts of COVID-19 have yet to be fully realized. It is clear that economic conditions and outcomes will need to be closely monitored.

The City’s major General Fund revenue sources are sales tax and property taxes. Both of these revenue sources are affected by the continuing economic state. We are estimating sales tax revenue to increase by 8% in fiscal year 2021–2022. Also, in fiscal year 2021-2022, we are estimating property tax revenue to increase by 5%. Additionally, with the two cannabis dispensa ries and the cannabis manufacturing facility, the City’s General Fund has received an influx of revenue that reached $1,190,500 for FY 2021 and is expected to reach $1,380,000 in FY 2022. The City successfully passed Measure W in November 2018 that allows for up to 15% special sales tax to be applied to all taxable cannabis.

ITEM 7
City of Ceres, California
Basic Financial Statements
For the year ended June 30, 2021

Management’s Discussion and Analysis, Continued

16 Requests for Information

This Annual Financial Report is intended to provide citizens, t axpayers, investors, and creditors with a general overview of the City’s finances. If you have any questi ons about this report, need additional financial information, or would like to obtain component unit financial statements, contact Leticia Dias, Finance Director, 2220 Magnolia, Ceres, CA 95307, or visit the City’s web page at www.ci.ceres.ca.us/.

ITEM 7

BASIC FINANCIAL STATEMENTS
17 ITEM 7
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18 ITEM 7
City of Ceres, California
Statement of Net Position
June 30, 2021
Governmental Business-type
Activities Activities Total
ASSETS
Current assets:

Cash and investments 25,904,274 $ 34,112,580 $ 60,016,854 $ Cash and investments with trustee/fiscal agent - 20,000,566 20,000,566 Receivables:

Accounts receivable 4,659,055 2,136,780 6,795,835 Prepaid items 14,342 - 14,342 Total current assets 30,577,671 56,249,926 86,827,597 Noncurrent assets:

Advances to fiduciary activities 1,954,281 - 1,954,281 Loans receivable 6,079,576 - 6,079,576 Deferred charges 848 2,367,882 2,368,730 Capital assets:

Nondepreciable 14,753,193 3,291,818 18,045,011 Depreciable 69,626,209 30,727,044 100,353,253 Total noncurrent assets 92,414,107 36,386,744 128,800,851 Total assets 122,991,778 92,636,670 215,628,448

DEFERRED OUTFLOWS OF RESOURCES
Pension Plan 13,971,344 2,350,299 16,321,643 Total deferred outflows of resources 13,971,344 2,350,299 16,321,643 Total assets and deferred outflows 136,963,122 94,986,969 231,950,091

LIABILITIES
Current liabilities:

Accounts payable and accrued liabilities 3,432,696 1,149,708 4,582,404 Deposits payable 2,493,865 525,994 3,019,859 Intergovernmental payable - - - Unearned revenue - 67,527 67,527 Interest payable - 28,994 28,994 Current portion of long-term debt - 412,000 412,000 Total current liabilities 5,926,561 2,184,223 8,110,784 Noncurrent liabilities:

Long-term liabilities:

Claims liabilities 2,367,882 - 2,367,882 Compensated absences 1,842,048 367,055 2,209,103 Due after one year 338,910 28,956,600 29,295,510 Liability for claims 1,018,796 - 1,018,796 Net pension liability 39,455,915 6,709,060 46,164,975 Total noncurrent liabilities 45,023,551 36,032,715 81,056,266 Total liabilities 50,950,112 38,216,938 89,167,050

DEFERRED INFLOWS OF RESOURCES
Pension Plan 2,428,676 393,650 2,822,326 Total liabilities and deferred inflows of resources 53,378,788 38,610,588 91,989,376

NET POSITION
Net investment in capital assets 83,487,997 5,062,262 88,550,259 Restricted 9,065,702 - 9,065,702 Unrestricted (8,969,365) 51,314,119 42,344,754 Total net position 83,584,334 56,376,381 139,960,715 Total liabilities, deferred inflows, and net position 136,963,122$ 94,986,969 $ 231,950,091 $ The accompanying notes are an integral part of these basic financial statements. 19 ITEM 7
City of Ceres, California
Statement of Activities
For the year ended June 30, 2021
Operating Capital
Charges for Grants and Grants and
Functions/Programs Expenses Services Contributions Contributions Primary government:

Governmental activities:

General government 7,671,594$ 165,730 $ 3,726,744 $ - $ Public safety 23,201,443 697,246 5,907,867 -
Engineering and Transportation 641,146 60,080 2,944,045 519,332 Public works 5,176,901 486,075 1,904,078 1,966,595 Community services 3,791,032 103,131 2,010,360 - Economic development 207,914 1,440 8,640 - Interest and fiscal charges 12,570 - - - Total governmental activities 40,702,600 1,513,702 16,501,734 2,485,927 Business-type activities:

Water 22,255,898 16,357,031 - - Sewer 9,219,352 10,370,131 - - STANCOG 14,584 - - - Total business-type activities 31,489,834 26,727,162 - - Total primary government 72,192,434$ 28,240,864$ 16,501,734$ 2,485,927$ General revenues:

Taxes:

Property taxes, levied for general purposes
Sales and use tax
Utility users ta
x
Other taxes
Intergovernmental:

State motor vehicle in-lieu tax (MVLF)
Use of money and property
Other general revenues
Total general revenues
Transfers
Total general revenues and transfers
Change in net position
Net position:

Beginning of year
Net position - Ending
Program Revenues
The accompanying notes are an integral part of these basic financial statements. 20 ITEM 7
Governmental Business-Type
Activities Activities Totals
(3,779,120)$ -$ (3,779,120)$ (16,596,330) - (16,596,330) 2,882,311 - 2,882,311 (820,153) - (820,153) (1,677,541) - (1,677,541) (197,834) - (197,834) (12,570) - (12,570) (20,201,237) - (20,201,237) - (5,898,867) (5,898,867) - 1,150,779 1,150,779 - (14,584) (14,584) - (4,762,672) (4,762,672) (20,201,237) (4,762,672) (24,963,909)
2,493,299 - 2,493,299
8,764,804 - 8,764,804
861,325 - 861,325
1,030,586 - 1,030,586
4,059,777 - 4,059,777
275,976 332,682 608,658
96,337 5,256,099 5,352,436
17,582,104 5,588,781 23,170,885
(304,949) 304,949 -
17,277,155 5,893,730 23,170,885
(2,924,082) 1,131,058 (1,793,024)
86,508,416 55,245,323 141,753,739
83,584,334$ 56,376,381$ 139,960,715$
Net (Expense) Revenue and
Changes in Net Position
21 ITEM 7
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22 ITEM 7
Fund
Governmental Funds:

General
Street Expansion Special Revenue
Home Program Grants Special Revenue
CDBG Grants Special Revenue Accounts for activities related to housing and the related CDBG funding.

Accounts for activities related to housing and the related Home Program funding.

FUND FINANCIAL STATEMENTS
Description
Primary operating fund of the City; accounts for all activities except those legally or administratively required to be accounted for in other funds.

Accounts for fees collected from developers to be used to widen streets due to the traffic impact of their projects.

MAJOR FUNDS
23 ITEM 7
City of Ceres, California
Balance Sheet
Governmental Funds
June 30, 2021
Street Home CDBG
General Expansion Program Grants Grants
Fund Special Revenue Special Revenue Special Revenue
ASSETS
Cash and investments 8,561,040$ 711,625$ 787,751$ 633,235$ Receivables:

Interest 757 31 - 18 Intergovernmental - - - - Loans receivable - - 5,760,313 462,088 Other receivable 3,282,916 - - 6,146 Due from other funds 2,670,379 - - - Advances to Former Redevelopment Agencies
Private Purpose Trust 1,954,281 - - - Prepaid items 14,342 - - - Inventory 848 - - - Total assets 16,484,563$ 711,656 $ 6,548,064 $ 1,101,487$

LIABILITIES, DEFERRED INFLOWS AND FUND BALANCES
Liabilities:

Accounts payable and accrued liabilities 2,734,293 $ - $ - $ 100 $ Deposits payable 2,411,589 - - - Due to other funds - - - - Unearned revenue - - - - Advances from other funds 2,367,882 - - - Total liabilities 7,513,764 - - 100 Deferred inflows: Unavailable revenue 552,495 - 5,760,314 462,088 Total liabilities and deferred inflows 8,066,259 - 5,760,314 462,188 Fund balances:

Nonspendable:

Prepaid items 14,342 - - - Restricted reported in:

Special revenue fund
s - - 787,750 639,299 Committed - - - - Assigned reported in:

Special revenue funds - 711,656 - - Unassigned (deficit), reported in:

General fund 8,403,962 - - - Special revenue funds - - - - Total fund balances 8,418,304 711,656 787,750 639,299 Total liabilities and fund balances 16,484,563$ 711,656 $ 6,548,064 $ 1,101,487 $ Major Funds
The accompanying notes are an integral part of these basic financial statements. 24 ITEM 7
Nonmajor
Governmental
Funds Totals
10,738,146$ 21,431,797$
499 1,305
410,409 410,409
409,670 6,632,071
957,279 4,246,341
- 2,670,379
- 1,954,281
- 14,342
848
12,516,003$ 37,361,773$
619,716$ 3,354,109$
82,276 2,493,865
2,274,038 2,274,038
- -
- 2,367,882
2,976,030 10,489,894
409,670 7,184,567
3,385,700 17,674,461
- 14,342
7,638,653 9,065,702
12,082 12,082
4,056,372 4,768,028
- 8,403,962
(2,576,804) (2,576,804)
9,130,303 19,687,312
12,516,003$ 37,361,773$
25 ITEM 7
City of Ceres, California
Reconciliation of the Governmental Funds Balance Sheet
to the Statement of Net Position
June 30, 2021
Total fund balances - total governmental funds 19,687,312$ Capital assets used in governmental activities are not current financial resources and, therefore, are not reported in the governmental funds balance sheet. 81,378,939
Compensated absences (1,719,157) $
Due after one year (338,910)
Net pension obligation (39,455,915) (41,513,982)
6,632,072
Pension obligatons result in deferred outflows and inflows of resource s
associated with actuarial value of contributions, assets, and liabilities Deferred outflows 13,971,344
Deferred inflows (2,428,676) 11,542,668
Current assets 4,473,477
Noncurrent assets 3,000,463
Accounts payable and accrued liabilities (474,928)
Long-term liabilities (1,141,687) 5,857,325
Net position of governmental activities 83,584,334$
The accompanying notes are an integral part of these basic financial statements.

Amounts reported for governmental activities in the Statement of Net Position are different because:

Long-term liabilities are not due and payable in the current period and, therefore, are not reported in the governmental funds balance sheet.

Governmental funds notes receivable from various loan programs are deferred under the current financial resources measurement focus. The notes receivable are recognized in the government-wide Statement of Net Position under the accrual basis of accounting.

Internal services funds are used by management to charge the costs of certain activities, such as insurance, to individual funds. The assets and liabilities of the internal service funds are:
26 ITEM 7
City of Ceres, California
Reconciliation of Fund Basis Balance Sheet to Government-wide Statement of Net Position Governmental Activities
June 30, 2021
Governmental Internal
Funds Service Changes Statement of
Balance Sheet Reclassifications Funds in GAAP Net Position ASSETS
Current assets:

Cash and investments 21,431,797$ -$ 4,472,477$ -$ 25,904,274$ Receivables:

Interest 1,305 - - - 1,305 Intergovernmental 410,409 - - - 410,409 Other receivable 4,246,341 - 1,000 - 4,247,341 Due from other funds 2,670,379 (2,670,379) - - - Prepaid items 14,342 - - - 14,342 Total current assets 28,774,573 (2,670,379) 4,473,477 - 30,577,671 Noncurrent assets:

Advances to(from) fiduciary activities 1,954,281 - - - 1,954,281 Loans/Notes receivable 6,632,071 - - (552,495) 6,079,576 Capital assets, net - - 3,000,463 81,378,939 84,379,402 Total noncurrent assets 8,587,200 - 3,000,463 80,826,444 92,414,107

DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows: Pension Plan - - - 13,971,344 13,971,344 Total assets and deferred outflows of resources 37,361,773$ (2,670,379)$ 7,473,940$ 94,797,788$ 136,963,122$

LIABILITIES
Current liabilities:

Accounts payable and accrued liabilities 3,354,109$ -$ 78,587$ -$ 3,432,696$ Deposits payable 2,493,865 - - - 2,493,865 Due to other funds 2,274,038 (2,670,379) 396,341 - - Total current liabilities 8,122,012 (2,670,379) 474,928 - 5,926,561 Noncurrent liabilities:

Long-term debt:

Advances from other funds 2,367,882 - - - 2,367,882 Compensated absences - - 122,891 1,719,157 1,842,048 Due after one year - - - 338,910 338,910 Liability for claims - - 1,018,796 - 1,018,796 Net pension obligation - - - 39,455,915 39,455,915 Total noncurrent liabilities 2,367,882 - 1,141,687 41,513,982 45,023,551 Total liabilities 10,489,894 (2,670,379) 1,616,615 41,513,982 50,950,112 Deferred inflows: Grants 6,632,072 - - (6,632,072) - Deferred inflows: Unavailable revenue 552,495 - - (552,495) - Deferred inflows: Pension plan - - - 2,428,676 2,428,676 Total liabilities and deferred inflows 17,674,461 (2,670,379) 1,616,615 36,758,091 53,378,788

FUND BALANCES/NET POSITION
Fund balances:

Nonspendable 14,342 (14,342) - - - Restricted 9,065,702 (9,065,702) - - - Committed 12,082 (12,082) - - - Assigned 4,768,028 (4,768,028) - - - Unassigned 5,827,158 (5,827,158) - - - Net position:

Net investment in capital assets - - 3,000,463 80,487,534 83,487,997 Restricted - - - 9,065,702 9,065,702 Unrestricted -
19,687,312 2,856,862 (31,513,539) (8,969,365) Total fund balances/ net position 19,687,312 - 5,857,325 58,039,697 83,584,334 Total liabilities, deferred inflows, and net position 37,361,773$ (2,670,379)$ 7,473,940$ 94,797,788$ 136,963,122$ The accompanying notes are an integral part of these basic financial statements. 27 ITEM 7
City of Ceres, California
Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds
For the year ended June 30, 2021
Street Home CDBG
General Expansion Program Grants Grants
Fund Special Revenue Special Revenue Special Revenue
REVENUES:

Property and other taxes 17,393,983$ -$ -$ -$ Licenses and permits 1,838,076 - - - Fines, forfeitures and penalties 56,237 - - - Charges for services 1,455,796 - - - Intergovernmental 1,449,972 357,291 503,300 8,558 Use of money and property 161,013 3,865 - 2,815 Other revenues 45,035 - 11,421 - Total revenues 22,400,112 361,156 514,721 11,373 EXPENDITURES:

Current:

General government 2,096,332 - - - Public safety 15,760,675 - - - Engineering and Transportation 74,560 3,263 - - Public works 320,112 - - - Community services 2,625,385 - - - Economic development - - 100,000 824 Capital outlay 14,673 - - - Debt service:

Principal - - - - Interest and fiscal charges - - - - Total expenditures 20,891,737 3,263 100,000 824

REVENUES OVER (UNDER)
EXPENDITURES 1,508,375 357,893 414,721 10,549 OTHER FINANCING SOURCES (USES):

Transfers in 837,071 - - - Transfers out (314,045) - - - Total other financing sources (uses) 523,026 - - - Net change in fund balances 2,031,401 357,893 414,721 10,549 FUND BALANCES:

Beginning of year 6,386,903 353,763 373,029 628,750 End of year 8,418,304$ 711,656 $ 787,750$ 639,299$ The accompanying notes are an integral part of these basic financial statements.

Major Funds
28 ITEM 7
Other
Governmental
Funds Totals
5,656,453$ 23,050,436$
- 1,838,076
57,485 113,722
142,871 1,598,667
8,862,952 11,182,073
74,094 241,787
2,250 58,706
14,796,105 38,083,467
2,200,446 4,296,778
4,005,895 19,766,570
475,763 553,586
1,170,226 1,490,338
632,329 3,257,714
16,989 117,813
5,240,781 5,255,454
106,409 106,409
12,570 12,570
13,861,408 34,857,232
934,697 3,226,235
15,419 852,490
(859,129) (1,173,174)
(843,710) (320,684)
90,987 2,905,551
9,039,316 16,781,761
9,130,303$ 19,687,312$
29 ITEM 7
City of Ceres, California
Reconciliation of Fund Basis Statements to Government-wide Statement of Activities For the year ended June 30, 2021
Capital
Debt/ Asset Internal Government-
Fund Based Compensated Deferred (Additions)/ Pension Service wide Functions/Programs Totals Absences Revenue Depreciation Retirements Plan Funds Totals Governmental activities:

General government 4,296,778 $ 214,585 $ 554,441 $ 1,926,175$ -$ 679,615 7,671,594$ Public safety 19,766,570 - - 308,418 - 3,126,455 - 23,201,443 Engineering and Transportation 553,586 - - - - 87,560 - 641,146 Public works 1,490,338 - - 3,285,939 923,268 235,725 (758,369) 5,176,901 Community services 3,257,714 - - 18,049 - 515,269 - 3,791,032 Economic development 117,813 - - 71,467 - 18,634 - 207,914 Capital outlay 5,255,454 - - - (5,255,454) - - - Debt service/Interest 118,979 (106,409) - - - - - 12,570 Total governmental activities 34,857,232$ 108,176$ 554,441 $ 5,610,048$ (4,332,186)$ 4,663,258$ (758,369)$ 40,702,600$ The accompanying notes are an integral part of these basic financial statements. 30 ITEM 7
City of Ceres, California
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities For the year ended June 30, 2021
Net change in fund balances - total governmental funds 2,905,551$ Capital asset purchases capitalized 4,332,186$
Depreciation expense (5,610,048) (1,277,862)
106,409
Change in compensated absences (214,585)
Change in pension expense (4,663,258) (4,877,843) Deferred inflows (554,441)
1,232,868
(474,499)
15,735
774,104
Change in net position of governmental activities (2,924,082)$ Some expenses reported in the Statement of Activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds:

The accompanying notes are an integral part of these basic financial statements.

Amounts reported for governmental activities in the Statement of Activities are different because:

Governmental funds report capital outlays as expenditures while governmental activities report depreciation expense to allocate those expenditures over the life of the assets:

Deferred Inflows related to the notes receivables in the governmental fund are reversed to reduce the expenditures of loan payments in the Government-Wide Financial Statements.

Internal services funds are used by management to charge the costs of certain activities, such as risk management, to individual funds. The change in net position of the Internal Service Funds ($952,934) is included in the governmental activities in the government- wide Statement of Net Position less amounts due to changes in capital assets $466,371 reported above for capital assets.

Repayment and issuance of debt is an expenditure and other financing source in the governmental funds, but the repayment reduces and the issuance increases long-term liabilities in the Statement of Net Position.
31 ITEM 7
City of Ceres, California
Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual - General Fund and Major Special Revenue Funds For the year ended June 30, 2021
Variance w/Final
Positive
Original Final Actual (Negative)
REVENUES:

Property and other taxes 16,885,949$ 16,885,949 17,393,983$ 508,034$ Licenses and permits 2,232,300 2,232,300 1,838,076 (394,224) Fines, forfeitures and penalties 76,000 76,000 56,237 (19,763) Charges for services 1,904,500 1,730,289 1,455,796 (274,493) Intergovernmental 1,480,309 1,483,543 1,449,972 (33,571) Use of money and property 139,100 105,374 161,013 55,639 Other revenues 52,000 52,000 45,035 (6,965) Total revenues 22,770,158 22,565,455 22,400,112 (165,343) EXPENDITURES:

Current:

General government 2,748,780 2,998,386 2,096,332 902,054 Public safety 19,497,619 19,503,278 15,760,675 3,742,603 Engineering and Transportation 114,111 114,980 74,560 40,420 Public works 357,624 357,714 320,112 37,602 Community services 2,890,540 2,774,018 2,625,385 148,633 Capital outlay - 46,877 14,673 32,204 Total expenditures 25,608,674 25,795,253 20,891,737 4,903,516

REVENUES OVER (UNDER)
EXPENDITURES (2,838,516) (3,229,798) 1,508,375 4,738,173 OTHER FINANCING SOURCES (USES):

Proceeds from sales of assets - - - - Transfers in 828,386 828,386 837,071 8,685
Transfers out (315,603) (315,603) (314,045) 1,558 Total other financing sources (uses) 512,783 512,783 523,026 10,243 Net change in fund balances (2,325,733) (2,717,015) 2,031,401 4,748,416 FUND BALANCES:

Beginning of year 6,386,903 6,386,903 6,386,903 - End of year 4,061,170$ 3,669,888 $ 8,418,304 $ 4,748,416 $ The accompanying notes are an integral part of these basic financial statements.

General Fund
Budgeted Amounts
32 ITEM 7
Variance w/Final
Positive
Original Final Actual (Negative)
-$ -$ -$ -$ - - - - - - - - - - - - 250,000 250,000 357,291 107,291
20,000 20,000 3,865 (16,135)
- - - - 270,000 270,000 361,156 91,156 - - - - - - - - 20,000 605,411 3,263 602,148
- - - - - - - - - - - - 20,000 605,411 3,263 602,148 250,000 (335,411) 357,893 693,304 - - - - - - - - -
- - -
- - - - 250,000 (335,411) 357,893 693,304 353,763 353,763 353,763 -
603,763$ 18,352$ 711,656$ 693,304$ Street Expansion Special Revenue Fund
Budgeted Amounts
(continued)
33 ITEM 7
City of Ceres, California
Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual - General Fund and Major Special Revenue Funds, Continued For the year ended June 30, 2021
Variance w/Final
Positive
Original Final Actual (Negative)
REVENUES:

Property and other taxes - $ - $ - $ -$ Licenses and permits - - - - Fines, forfeitures and penalties - - - - Charges for services - - - - Intergovernmental 1,200 1,200 503,300 502,100 Use of money and property - - - - Other revenues - - 11,421 11,421 Total revenues 1,200 1,200 514,721 513,521 EXPENDITURES:

Current:

General government - - - - Public safety - - - - Engineering and Transportation - - - - Public works - - - - Community services - - - - Economic development 120,140 120,140 100,000 20,140 Capital outlay - - - - Total expenditures 120,140 120,140 100,000 20,140

REVENUES OVER (UNDER)
EXPENDITURES (118,940) (118,940) 414,721 533,661 OTHER FINANCING SOURCES (USES):

Transfers in - - - - Transfers out - - - - Total other financing sources (uses) - - - - Net change in fund balances (118,940) (118,940) 414,721 533,661 FUND BALANCES (DEFICIT):

Beginning of year 373,029 373,029 373,029 - End of year 254,089 $ 254,089 $ 787,750 $ 533,661$ Budgeted Amounts
Home Program Grants Special Revenue Fund
The accompanying notes are an integral part of these basic financial statements. 34 ITEM 7
Variance w/Final
Positive
Original Final Actual (Negative)
- $ - $ - $ -$ - - - - - - - - - - - - 152,250 152,250 8,558 (143,692)
4,250 4,250 2,815 (1,435)
- - 0 -
156,500 156,500 11,373 (145,127) - - - - - - - - - - - - - - - - - - - - 302,950 537,893 824 537,069
235,000 235,000 - 235,000
537,950 772,893 824 772,069 (381,450) (616,393) 10,549 626,942
- - - - - - - - - - - - (381,450) (616,393) 10,549 626,942
628,750 628,750 628,750 -
247,300 $ 12,357 $ 639,299 $ 626,942$
(concluded)
CDBG Grants Special Revenue Fund
Budgeted Amounts
35 ITEM 7
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36 ITEM 7
Fund
Major Funds:

Water
Sewer

STANCOG

PROPRIETARY FUNDS
Accounts for the operation of the City's water utility. It is a self- supporting activity that provides services on a user-charge basis to residents and businesses located in the City.

Accounts for the operation of the City's sewer utility. It is a self- supporting activity that provides services on a user-charge basis to residents and businesses located in the City.

Accounts for local transportation funds restricted to transit, street, pedestrian, and bike purposes funded through passenger fares.

Description
37 ITEM 7
City of Ceres, California
Statement of Net Position
Proprietary Funds
June 30, 2021
Governmental
Activities -
Internal
Service Funds
Water Sewer STANCOG Totals Totals
Current assets:

Cash and investments 17,008,399$ 16,550,208$ 553,973$ 34,112,580$ 4,472,477$ Cash and investments with trustee/fiscal agent 20,000,566 - - 20,000,566 - Accounts receivable (net of uncollectible) 1,237,296 897,401 - 2,134,697 1,000 Interest receivable 1,310 747 26 2,083 - Total current assets 38,247,571 17,448,356 553,999 56,249,926 4,473,477 Non-current assets:

Property, plant and equipment 31,944,810 29,629,346 - 61,574,156 8,560,040 Less accumulated depreciation (12,874,212) (14,681,082) - (27,555,294) (5,559,577) Property, plant, and equipment, net 19,070,598 14,948,264 - 34,018,862 3,000,463 Advances to other funds - 2,367,882 - 2,367,882 - Total non-current assets 19,070,598 17,316,146 - 36,386,744 3,000,463 Total assets 57,318,169 34,764,502 553,999 92,636,670 7,473,940 Deferred outflows: Pension Plan 1,170,560 1,163,947 15,792 2,350,299 - Total assets and deferred outflows 58,488,729$ 35,928,449 $ 569,791 $ 94,986,969 $ 7,473,940 $

LIABILITIES AND NET POSITION
Current liabilities:

Accounts payable and accrued liabilities 520,950$ 628,318$ 440$ 1,149,708$ 78,587$ Deposits payable 525,994 - - 525,994 - Unearned revenue 66,220 1,307 - 67,527 - Interest payable 12,412 16,582 - 28,994 - Due to other funds - - - - 396,341 Current portion of long-term debt 149,000 263,000 - 412,000 - Total current liabilities 1,274,576 909,207 440 2,184,223 474,928 Long-term liabilities:

Compensated absences 160,344 206,711 - 367,055 122,891 Due after one year 23,388,600 5,568,000 - 28,956,600 - Liability for claims - - - - 1,018,796 Net pension obligation 3,266,741 3,386,538 55,781 6,709,060 - Total long-term liabilities 26,815,685 9,161,249 55,781 36,032,715 1,141,687 Total liabilities 28,090,261 10,070,456 56,221 38,216,938 1,616,615 Deferred inflows: Pension Plan 168,028 209,891 15,731 393,650 - Total liabilities and deferred inflows 28,258,289 10,280,347 71,952 38,610,588 1,616,615 Net Position:

Net investment in capital assets (4,318,002) 9,380,264 - 5,062,262 3,000,463 Unrestricted 34,548,442 16,267,838 497,839 51,314,119 2,856,862 Total net position 30,230,440 25,648,102 497,839 56,376,381 5,857,325 Total liabilities, deferred inflows, and net
position 58,488,729$ 35,928,449 $ 569,791 $ 94,986,969 $ 7,473,940 $ Business-type Activities - Enterprise Funds
The accompanying notes are an integral part of these basic financial statements. 38 ITEM 7
City of Ceres, California
Statement of Revenues, Expenses, and Changes in Fund Net Position Proprietary Funds
For the year ended June 30, 2021
Governmental
Activities -
Internal
Service Funds
Water Sewer STANCOG Totals Totals
OPERATING REVENUES:

Charges for services 15,946,068 $ 10,151,804 $ - $ 26,097,872$ - $ Interdepartmental charges - - - - 7,299,738 Other operating 410,963 218,327 - 629,290 2,975 Total operating revenues 16,357,031 10,370,131 - 26,727,162 7,302,713 OPERATING EXPENSES:

Salaries and benefits 2,920,179 2,930,782 5,135 5,856,096 1,839,613 Contractual and other services 695,222 482,650 9,449 1,187,321 377,949 Materials and supplies 10,041,398 4,434,278 - 14,475,676 1,231,833 Depreciation and amortization 952,422 868,338 - 1,820,760 474,499 Other operating costs 7,421,884 503,304 - 7,925,188 2,163,542 Total operating expenses 22,031,105 9,219,352 14,584 31,265,041 6,087,436 OPERATING INCOME (LOSS) (5,674,074) 1,150,779 (14,584) (4,537,879) 1,215,277 NONOPERATING REVENUES (EXPENSES):

Debt issuance costs (224,793) - - (224,793) - Investment income 201,748 114,192 4,220 320,160 1,856 Gain (Loss) on sale of assets - 12,522 - 12,522 - Settlement revenue 5,256,099 - - 5,256,099 Total non-operating revenues 5,233,054 126,714 4,220 5,363,988 1,856

NET INCOME (LOSS) BEFORE
TRANSFERS (441,020) 1,277,493 (10,364) 826,109 1,217,133 Transfers in 212,262 304,687 - 516,949 15,735 Transfers out (212,000) - - (212,000) - Total Transfers 262 304,687 - 304,949 15,735 CHANGE IN NET POSITION (440,758) 1,582,180 (10,364) 1,131,058 1,232,868 NET POSITION:

Beginning of year 30,671,198 24,065,922 508,203 55,245,323 4,624,457 End of year 30,230,440$ 25,648,102 $ 497,839 $ 56,376,381 $ 5,857,325 $ Business-type Activities - Enterprise Funds
The accompanying notes are an integral part of these basic financial statements. 39 ITEM 7
City of Ceres, California .

Statement of Cash Flows
Proprietary Funds
For the year ended June 30, 2021
Governmental
Activities -
Internal
Service Funds
Water Sewer STANCOG Totals Totals
CASH FLOWS FROM OPERATING ACTIVITIES:

Cash received from interfund services provided - $ - $ - $ - $ 7,298,894$ Cash receipts from customers 16,235,251 10,195,949 20,175 26,451,375 - Cash payments to suppliers for goods and services (17,786,217) (4,924,878) (104,979) (22,816,074) (1,721,513) Cash payments to employees for services (2,893,278) (2,887,362) (5,135) (5,785,775) (1,823,888) Cash receipts (payments) for loss claims - - - - (2,183,000) Net cash used by operating activities (4,444,244) 2,383,709 (89,939) (2,150,474) 1,570,493

CASH FLOWS FROM NONCAPITAL FINANCING
ACTIVITIES:

Other income received (224,793) - - (224,793) - Transfers received (paid) 262 530,865 - 531,127 411,841 Changes in pension obligations 418,762 422,770 - 841,532 - Non-operating revenue received 5,256,099 - - 5,256,099 - Net cash provided by noncapital financing
activities 5,450,330 953,635 - 6,403,965 411,841

CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES:
(Acquisition) Disposal and construction of capital assets (4,146,944) (641,282) (4,788,226) (885,663) Proceeds from sale of capital assets - - - - - Interest paid (2,428) - - (2,428) - Payments on long-term debt 20,033,600 (254,000) - 19,779,600 - Net cash (used) by capital and related financing
activities 15,884,228
(895,282) - 14,988,946 (885,663) CASH FLOWS FROM INVESTING ACTIVITIES:

Investment income received 205,683 117,118 4,350 327,151 1,856 Net cash provided by investing activities 205,683 117,118 4,350 327,151 1,856 Net increase (decrease) in cash and cash
equivalents 17,095,997 2,559,180 (85,589) 19,569,588 1,098,527 CASH AND CASH EQUIVALENTS:

Beginning of year 19,912,968 13,991,028 639,562 34,543,558 3,373,950 End of year 37,008,965$ 16,550,208$ 553,973$ 54,113,146$ 4,472,477$ Presentation in Statement of Net Position:

Cash and investments 17,008,399$ 16,550,208$ 553,973$ 34,112,580$ 4,472,477$ Cash and investments with trustee/fiscal agent 20,000,566 - - 20,000,566 - Total cash and investments 37,008,965$ 16,550,208$ 553,973$ 54,113,146$ 4,472,477$ Reconciliation of income (loss) from operations to
net cash used by operating activities:

Operating income (loss) (5,674,074)$ 1,150,779$ (14,584)$ (4,537,879)$ 1,215,277$ Adjustments to reconcile operating income (loss)
to net cash used in operating activities:

Depreciation and amortization 952,422 868,338 - 1,820,760 474,499 (Increase) decrease in current assets:

Accounts receivable (355,124) (175,489) 20,175 (510,438) (844) Increase (decrease) in liabilities:

Accounts payable and accrued liabilities 372,287 495,354 (95,530) 772,111 18,133 Deposits payable 228,601 - - 228,601 - Unearned revenue 4,743 1,307 - 6,050 -
Compensated absences 26,901 43,420 - 70,321 15,725 Increase (decrease) in claims liability - - - - (152,297) Net cash used by operating activities (4,444,244)$ 2,383,709$ (89,939)$ (2,150,474)$ 1,570,493$ Business-type Activities - Enterprise Funds
There were no noncash investing, capital, or financing activities affecting recognized assets and liabilities for the year ended June 30, 2021.

The accompanying notes are an integral part of these basic financial statements. 40 ITEM 7
City of Ceres, California
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2021
Successor
Agencies Westpointe
Private Assessmen t
Purpose District
Trust Debt Service
Funds Custodial Fun d
ASSETS
Current assets:

Cash and investments 5,692,951$ 327,717 $
Cash and investments with trustee/fiscal agent 2,061,500 - Interest receivable 280 15
Total current assets 7,754,731 327,732
Non-Current assets:

Long-term loans receivable 2,214,371 -
Construction in progress 12,500,147 -
Total non-current assets 14,714,518 -
Other assets:

Deferred charges
Total other assets - -
Total assets 22,469,249 327,732
Deferred outflows: Pension plan 107,756 - Total assets and deferred outflows 22,577,005$ 327,732$

LIABILITIES AND NET POSITION
Current liabilities:

Accounts payable and accrued liabilities 5,065$ -$ Interest payable 8,591 -
Compensated absences - current 14,812
Current portion of long term debt 1,662,415 - Total current liabilities 1,690,883 -
Long-term liabilities:

Advances from other government agencies 266,702 - Advances from Governmental Activities 1,954,281 - Due after one year 29,213,809 -
Net pension obligation 324,054 -
Total long-term liabilities 31,758,846 -
Total liabilities 33,449,729 -
Deferred inflows: Pension plan 36,652 - Total liabilities and deferred inflows 33,486,381 - Net Position (Deficit):

Restricted for:

Redevelopment Dissolution (10,909,376) -
Individuals, organizations, and other governments - 327,732 Total liabilities, deferred inflows, and net position 22,577,005$ 327,732$ The accompanying notes are an integral part of these basic financial statements. 41 ITEM 7
City of Ceres, California
Statement of Changes in Fiduciary Net Position
Fiduciary Funds
For the year ended June 30, 2021
Successor
Agencies Westpointe
Private Assessment
Purpose District
Trust Debt Service
Funds Custodial Fund
ADDITIONS:

Property taxes 2,926,674 $ - $
Investment earnings 40,034 3,450
Other revenue 137,662 -
Total additions 3,104,370 3,450
DEDUCTIONS:

General and administrative 42,719 -
Salaries and benefits 164,216 -
Contractual and other services 107,270 - Materials and supplies - 379,417 Interest and debt service expenses 599,791 - Total deductions 913,996 379,417
CHANGE IN FIDUCIARY NET ASSETS 2,190,374 (375,967) NET POSITION (DEFICIT):

Beginning of year (13,099,750) 703,699
End of year (10,909,376)$ 327,732$
The accompanying notes are an integral part of these basic financial statements. 42 ITEM 7

43 NOTES TO BASIC FINANCIAL STATEMENTS
ITEM 7
City of Ceres, California
Basic Financial Statements
For the year ended June 30, 2021

Index to Notes to Basic Financial Statements

44 Page

Note 1 – Summary of Significant Accounting Policies ................................................................... 45 Financial Reporting Entity ............................................................................................................. 45 Basis of Accounting and Measurement Focus ............................................................................... 46 Assets, Liabilities, and Equity ....................................................................................................... 50 Revenues, Expenditures, and Expenses ......................................................................................... 56 Budgetary Accounting ................................................................................................................... 57

Note 2 – Cash and Investments ......................................................................................................... 59

Note 3 – Accounts Receivable ........................................................................................................... 61

Note 4 – Loans and Notes Receivable .............................................................................................. 62

Note 5 – Capital Assets ...................................................................................................................... 64

Note 6 – Accounts Payable and Accrued Liabilities ....................................................................... 66

Note 7 – Special Assessment Districts .............................................................................................. 66

Note 8 – Long-term Liabilities .......................................................................................................... 67

Note 9 – Net Position/ Fund Balances .............................................................................................. 69

Note 10 – Interfund Transactions .................................................................................................... 73

Note 11 – Risk Management ............................................................................................................. 76

Note 12 – Pension Plan ...................................................................................................................... 77

Note 13 – Abandoned Vehicle Abatement Program ....................................................................... 83

Note 14 – Successor Agency Trust for Assets of Former Redevelopment Agency ...................... 83

Note 15 – Commitments and Contingencies .................................................................................... 90

Note 16 – New Accounting Pronouncements ................................................................................... 90

ITEM 7
City of Ceres, California
Notes to Basic Financial Statements
For the year ended June 30, 2021

45 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The basic financial statements of the City of Ceres, California (City) have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to governmental agencies. The Governmental Accounting Standard s Boards (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting pr inciples. The more significant of the City’s accounting policies are described below.

A. Financial Reporting Entity

The City of Ceres (City) was in corporated on February 25, 1918, under the laws and regulations of the State of California (State). The City operates under a City Co uncil/Manager form of government and provides the following services: public safety (Police and Fire ), highways and streets, water service, sewer service, solid waste, storm water utility, public improve ments, planning and zoning, and general administration.

The financial statements of the City have been prepared in acco rdance with accoun ting principles generally accepted in the United States of America (GAAP) as ap plied to governmental units. The Governmental Accounting Standards Board (GASB) is the standard- setting body for governmental accounting and financial reporting. On June 15, 1987, GASB iss ued a codification of the existing Governmental Accounting and Financ ial Reporting Standards which , along with subsequent GASB pronouncements (Statements and In terpretations), constitutes GAAP for governmental units. The City applies all GASB pronouncements to its activities.

In addition, the City applies all Financial Accounting Standard s Board (FASB) Statements and Interpretations, Accounting Principles Board (APB) Opinions, and Accounting Research Bulletins (ARB) issued after November 30, 1989, unless they conflict with or contradict GASB pronouncements.

The more significant of these accounting policies are described below and, where appropriate, subsequent pronouncements will be referenced.

The City was incorporated under the General Laws of the State o f California and enjoys all the rights and privileges pertaining to such “General Law” cities. The City uses the City Council/Manager form of government. The financial reporting entity consists of: (a) the primary government, the City; (b) organizations for which the primary government is financially accountable; and (c) ot her organizations for which the primary government is not accountable, but for which the nature and significance of their relationship with the primary gove rnment are such that exclusio n would cause the reporting entity’s financial statements to be misleading or incomplete.

Component units are legally separ ate organizations for which th e elected officials of the primary government are financially accountable. In addition, component units can be other organizations for which the primary government’s exclusion would cause the reporting entity’s financial statements to be misleading or incomplete.

ITEM 7
City of Ceres, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2021

46 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued

A. Financial Reporting Entity, Continued

The City is the primary government unit. Component units are th ose entities which are financially accountable to the primary governm ent, either because the City appoints a voting majority of the component unit’s board, or because the component unit will prov ide a financial benefit or impose a financial burden on the City. The City currently has no blended or discretely reported component units.

B. Basis of Accounting and Measurement Focus

The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets , liabilities, fund equity, re venues, and expenditures or expenses as appropriate. Government resources are allocated to and accounted for in individual funds based upon the purpose for which they are to be spent and the means by which spending activities are controlled.

Government–Wide Financial Statements

The government–wide financial stat ements include a Statement of Net Position and a Statement of Activities and Changes in Net P osition. These statements presen t summaries of governmental and business-type activities for the City, the primary government, accompanied by a total column. Fiduciary activities of the City are not included in these statements.

These government-wide financial st atements are presented on an “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all of the City’s assets and liabilities, including capital assets and related infrastructure assets and long-term liabilities, are included in the accompanying Statement of Net Position. The Statement of Activities presents changes in net position.

Under the accrual basis of acc ounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred.

Certain types of transactions are reported as program revenues for the City in three categories:

• Charges for services
• Operating grants and contributions
• Capital grants and contributions

Certain eliminations have been made as prescribed by GASB State ment No. 34 in regard to interfund activities, payables, and receivables. All internal balances in the Statement of Net Position have been eliminated except those representing balances between the governmental activities and the business-type activities, which are presented as internal balances and elimin ated in the total primary government column. Transactions between governmental and business-type activities have not been eliminated. The following interfund activities have been eliminated:

ITEM 7
City of Ceres, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2021

47 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued

Government–Wide Financial Statements, Continued

• Due to/from other funds
• Advances to/from other funds
• Transfers in/out

The City applies all applicable GASB pronouncements (including all National Council on Governmental Accounting (NCGA) Statements and Interpretations currently in e ffect) as well as the following pronouncements issued on or before November 30, 1989, to the bu siness-type activities, unless those pronouncements conflict with or co ntradict GASB pronouncements: Financial Accounting Standards Board (FASB) Statements and Inte rpretations, Accounting Princip les Board (APB) Opinions, and Accounting Research Bulletins (ARB) of the committee on Accounting Procedure. The City applies all applicable FASB Statements and Interpretations issued after Nov ember 30, 1989, to proprietary funds, except those that conflict with or contradict GASB pronouncements.

Governmental Fund Financial Statements

Governmental fund financial statements include a Balance Sheet and a Statement of Revenues, Expenditures, and Changes in Fund Balances for all major govern mental funds and non-major funds aggregated. An accompanying schedule is presented to reconcile and explain the differences in net position as presented in these statements to the net position presented in the government-wide financial statements. The City has presented all major funds that met the applicable criteria. The following were the City’s major governmental funds:

• The General Fund - Accounts for all general reve nues of the city not specifically levied or collected for other City funds and the related expenditures. The General Fund accounts for all financial resources of a governmental unit which are no t accounted for in other funds.

• Street Expansion Special Revenue Fund - Fees collected from developers to be used to widen streets due to the traffic impact of their projects.

• HOME Program Grants Special Revenue Fund - This fund is used to account for Federal funds used for housing assistance payments to low-income, elder ly, disabled, and handicapped people qualifying for the programs, as well as reha bilitation for rental property.

• Community Development Block Grant Special Revenue Fund - These funds are used to account for community development block grants that the City has b e e n a w a r d e d a n d income received from loans granted to participants. The funds are primarily used for local home improvements and public infrastructure enhancements.

ITEM 7
City of Ceres, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2021

48 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued

B. Basis of Accounting and Measurement Focus, Continued

All governmental funds are accounted for on a spending or “current financial resources” measurement focus and the modified accrual basis of accounting. Accordingly , only current assets and current liabilities are included on the Balance Sheet. The Statement of Revenues, Expenditures, and Changes in Fund Balances present increases (revenue and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Under the modified accrual basis of accounting, revenues are recognized in the accounting period in which they become both m easurable and available to finance expenditures of the current period.

Revenues are recorded when received in cash, except those revenues subject to accrual (generally 60 days after year-end) are recognized when due. The primary revenue sources, which have been treated as susceptible to accrual by the City, are property tax, sales tax , intergovernmental revenues, and other taxes. Expenditures are recorded in the accounting period in which the related fund liability is incurred.

Deferred inflows arise when potential revenues do not meet both the “measurable” and “available” criteria for recognition in the current period. Deferred inflows also arise when the government receives resources before it has a legal claim to them, as when grant mo nies are received prior to incurring qualifying expenditures. In subsequent periods when both revenue recognition criteria are met or when the government has a legal claim to the resources, the deferred inflows is removed from the balance sheet and revenue is recognized.

Reconciliation of the Fund Financial Statements to the Governme nt-Wide Financial Statements is provided to explain the differences between the two methods of measurement focus.

Proprietary Fund Financial Statements

Proprietary fund financial statements include a Statement of Ne t Position, a Statement of Revenues, Expenses, and Change in Net Position, and a Statement of Cash Flows for all proprietary funds. The City has determined that all its enterprise funds are major funds. T he following were the City’s major enterprise funds:

The Water Fund consists of:

• Water Service Fund - This fund was established as a separate fund to account for t he operation of the City's water utility. It is a self-supporting activity that provides services on a user-charge basis to residents and businesses located in the City.

• Water Quality Sinking Fund - Revenue from this fund come s from a $3.00 per account transfer from the Water Service added to the water bill. Expenditures are for water system improvements.

ITEM 7
City of Ceres, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2021

49 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued

B. Basis of Accounting and Measurement Focus, Continued

• Water Supply Fund - Revenue from this fund come s from water connection fees.

Expenditures are for major system improvements, including debt service payments if the improvements are financed.

• 2009 Water Bond Fund – This fund is used to account for projects financed with 2009 Water Revenue Bonds. The bond funds are being used to finance t he acquisition and construction of certain improvements to the Water Enterprise system.

The Sewer Fund consists of:

• Sewer Main Line Construction Fund - Revenue from this fund comes from sewer connection fees. Expenditures are for plant improvements and pump station construction.

• Sewer Service Fund - This fund was established as a separate fund to account for t he operation of the City's sewer u tility. It is a self-supporting activity that provides services on a user-charge basis to residents and businesses located in the City.

• 2009 Sewer Bond Fund – This fund is used to account for projects financed with 2009 Sewer Revenue Bonds. The bond funds are being used to finance t he acquisition and construction of certain improvements to the Sewer Enterprise system.

Stancog Dial-A-Ride Fund - This fund is a local transportation fund restricted to transit, street, pedestrian, and bike purposes.

A separate column representing internal service funds is also presented in these statements. However, internal service balances and ac tivities have been combined wit h the governmental activities in the government-wide financial statements.

Proprietary funds are accounted for using the “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all assets and liabilities (whether current or noncurrent) are included on the Statement of Net Position. The Statement of Revenues, Ex penses, and Changes in Net Position present increases (revenues) and decreases (expenses) in total net position. Under th e accrual basis of accounting, revenues are recogniz ed in the period in which they are earned while expenses are recognized in the period in which a liability is incurred.

ITEM 7
City of Ceres, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2021

50 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued

B. Basis of Accounting and Measurement Focus, Continued

Proprietary Fund Financial Statements, Continued

Operating revenues in the propr ietary funds are those revenues that are generated from the primary operations of the fund. All other revenues are reported as nonoperating revenues. Operating expenses are those expenses that are essential to the primary operations of the fund. All other expenses are reported as nonoperating expenses.

Fiduciary Fund Financial Statements

Fiduciary fund financial statements include a Statement of Fidu ciary Net Position and Statement of Changes in Fiduciary Net Positi on. The City’s fiduciary funds i nclude both agency funds and private purpose trust funds. Agency Funds are custodial in nature (asse ts equal liabilities ) and do not involve measurement of results of operations. Private Purpose Trust Funds account for resources held for other individuals or entities in a manner similar to private enterprise. These funds are accounted for using the accrual basis of accounting.

C. 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 the date of acquisition. Cash and cash equivalents are combined with investments and displayed as Cash and Investments. For purposes of the statement of cash flows of the proprietary fund types, cash and cash equivalents include all investments, as the City operates an internal cash management pool which maintains the general characteristics of a demand deposit account.

Disclosure requirements for Deposits and Investment Risks were made in the following areas:

• Interest Rate Risk
• Credit Risk
 Overall
 Custodial Credit Risk
 Concentrations of Credit Risk

In addition, other disclosures are specified including use of c ertain methods to present deposits and investments, highly sensitive investments, credit quality at year-end, and other disclosures.

ITEM 7
City of Ceres, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2021

51 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued

C. Cash, Cash Equivalents and Investments, Continued

The City participates in the Local Agency Investment Fund (LAIF), an investment pool managed by the State of California. LAIF has invested a portion of the pool funds in Structured Notes and Asset-Backed Securities. LAIF’s investments are subject to credit risk with the full faith and credit of the State of California collateralizing these investments. In addition, thes e Structured Notes and Asset-Backed Securities are subject to market risk as a result of changes in interest rates.

D. Restricted Cash and Investments

Certain restricted cash and investments are held by fiscal agents for the redemption of bonded debt and for acquisition and construction of capital projects. Cash and investments are also restricted for deposits held for others within the enterprise funds.

E. Inventories

The City accounts for inventories using the first-in, first-out method. Inventories consist primarily of supplies and are carried at cost. Governmental fund type inventories are recorded as expenditures when consumed rather than when purchased.

F. Capital Assets

Government-Wide Financial Statements

Capital assets are valued at historical cost or estimated histo rical cost if actual historical cost was not available. Donated fixed assets are valued at their estimated fair market value on the date donated. City policy has set the capitalization threshold for reporting infrastructure at $100,000; all other capital assets are set at $5,000. Depreciation is recorded on a straight-line basis over estimated useful lives of the assets as follows:

Buildings 50-60 years
Improvements other than buildings 30-50 years
Machinery and equipment 5-20 years
Infrastructure 15-50 years
ITEM 7
City of Ceres, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2021

52 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued

F. Capital Assets, Continued

Government-Wide Financial Statements, Continued

The City defines infra structure as the basic physical assets th at allow the City to function. The assets include streets, sewer, park lands, and buildings. Each major infrastructure system c an be divided into subsystems. For example, the street system can be subdivided in to pavement, curb and gutters, sidewalks, medians, streetlights, landscaping, and land. These subsystems were not delineated in the basic financial statements. The appropriate operating departmen t maintains information regarding the subsystems.

Interest accrued during capital assets construction, if any, is capitalized for the business-type and proprietary funds as part of the asset cost.

For all infrastructure systems, the City elected to use the Bas ic Approach defined by GASB Statement No. 34, which requires all infrastructures be reported at histo rical cost and be depreciated over their estimated useful lives.

G. Long-Term Liabilities

Government-Wide Financial Statements

Long-term debt and other financia l obligations are reported as liabilities in the appropriate activities.

Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the straight-line meth od. Bonds payable are reporte d net of the applicable premium or discount. Issuance costs are reported as deferred outflows.

Fund Financial Statements

The Governmental Fund Financial Statements do not present long- term debt. Consequently, long-term debt is shown as a reconciling item in the Reconciliation of th e Governmental Funds Balance Sheet to the Government-Wide Statement of Net Position.

Governmental funds 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 financial sources. Premiums received on debt issuance are reported as other financing sources while discounts on debt issuance reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.

Proprietary Fund Financial Statem ents use the same principles a s those used in the Government-Wide Financial Statements.

ITEM 7
City of Ceres, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2021

53 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued

H. Compensated Absences

Government-Wide Financial Statements

For governmental and business-type activities, compensated abse nces are recorded as incurred and the related expenses and liabilities are reported in the appropriate activity.

Fund Financial Statements

In governmental funds, compensated absences are recorded as expenditures in the years paid, as it is the City’s policy to liquidate any unpaid compensated absences at June 30 from future resources, rather than currently available financial resources. In proprietary funds, compensated absences are expensed to the various funds in the period they are earned, and such fund’s share of the unpaid liability is recorded as a long-term liability of the fund.

The City accrues vacation time payable to employees based on ag reements between the City and the various City employee bargaining units. Vacation time generally accrues as follows:

Y ears of Service Annual V acation Earned
1 - 4 2 weeks
5 - 10 3 weeks
11 - 19 4 weeks
20 + One day per year for each year over
20 to a max imum of 25 days per year

Employees may accumulate a maximum of 480 hours. Vacation is ac crued per pay period. Although new employees immediately begin earning vacation time, they are not eligible to use it until 30 days of service has passed. The accrued liability of governmental fund types for compensated absences is not expected to be paid from current available funds and, therefore, has been recorded in the governmental activities of the Government-Wide Financial Statements. The liability in proprietary fund types is carried as an obligation in the Fund Financial Statements and in the business-type activities of the Government- Wide Financial Statements. The City does not pay any post-employment benefits.

I. Deferred outflows/inflows of resources

In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial stateme nt element, deferred outflows of resources, represents a consumption of net position that applie s to a future period(s) and so will not be recognized as an outflow of resources (expense/ expenditure) until then. The City has only has one item that qualifies for reporting in this category.

ITEM 7
City of Ceres, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2021

54 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued

I. Deferred outflows/inflows of resources, Continued

In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City h as one item reported as a deferred inflow of resources.

J. Net Position and Fund Equity

Government-Wide Financial Statements

In the Government-Wide Financial Statements, net position are classified in the following categories:

Net Investment in Capital Assets – This amount consists of capit al assets net of accumulated depreciation and reduced by outstanding debt that attributed to the acquisition, construction, or improvement of the assets.

Restricted Net Position – This amount is restricted by external creditors, grantors, co ntributors, or laws or regulations of other governments.

Net Position – This amount is all net position that does not meet the definition of “net investment in capital assets” or “restricted.”

Fund Financial Statements

Governmental fund equity is classified as fund balance. Fund b alance is classified as nonspendable, restricted, committed, assigned or unassigned. Proprietary fund equity is classified the same as in the government-wide statements. The classifications for governmental funds are defined as follows for the City:

Nonspendable Fund Balance –

 Assets that will never convert to cash (prepaid items, inventory).  Assets that will not convert to cash soon enough to affect the current period (long-term notes or loans receivable).
 Resources that must be maintained intact pursuant to legal or contractual requirements (the principal of an endowment).

ITEM 7
City of Ceres, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2021

55 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued

J. Net Position and Fund Equity, Continued

Government-Wide Financial Statements, Continued

Restricted Fund Balance –

 Resources that are subject to externally enforceable legal rest rictions imposed by parties altogether outside the government (Creditors, Grantors, Contributors and Other Governments).
 Resources that are subject to limitations imposed by law through constitutional provisions or enabling legislation (Gas Tax).

Committed Fund Balance –

 Self-imposed limitations set in place prior to the end of the p eriod. (Encumbrances, economic contingencies and uncertainties)
 Limitation at the highest level of decision-making (Council) that requires formal action at the same level to remove.
 Council resolution is required to be taken to establish, modify or rescind a fund balance commitment.

Assigned Fund Balance –

 Amounts in excess of nonspendable, restricted and committed fund balance in funds other than the general fund automatically are reported as assigned fund balance.  Assigned amounts for a specific purpose are as authorized by th e City’s Finance Director through its fund balance policy.

Unassigned Fund Balance –

 Residual net resources
 Total fund balance in the genera l fund in excess of nonspendabl e, restricted, committed and assigned fund balance (surplus).
 Excess of nonspendable, restricted, and committed fund balance over total fund balance (deficit).

ITEM 7
City of Ceres, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2021

56 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued

K. Property Taxes

Under California law, property ta xes are assessed and collected by the counties up to 1% of assessed value, plus other increases approved by the voters. The propert y taxes go into a pool and are then allocated to the cities based on complex formulas. Accordingly, the City accrues only those taxes which are receivable from the county within ninety days after year end.

Lien Date January 1
Levy Date January 1
Due Date November 1 and February 1
Collection Date December 10 and April 10

Property taxes levied are recorded as revenue when received in the fiscal year of levy, because of the adoption of the “alternate met hod of property tax distribution, ” known as the Teeter Plan, by the City and the County of Stanislaus. The Teeter Plan authorizes the Au ditor/Controller of the County of Stanislaus to allocate 100% of the secured property taxes billed, but not yet paid.

L. Use of Estimates

The preparation of financial statements in conformity with gene rally accepted accounting principles requires management to make est imates and assumptions. These es timates and assumptions affect the reported amounts of assets and li abilities and the disclosure of contingent assets and liabilities. In addition, estimates affect the reported amount of expenses. Actual results could differ from these estimates and assumptions.

O. Interfund Balances/Internal Balances

Advances to and advances from ot her funds represent interfund l oans in the fund financial statements.

Advances between funds are offs et by a fund liability or by deferred inflows in the applicable governmental funds to indicate that they are not expendable available financial res ources. Any unpaid interest due to lack of funds i n the borrowing fund increases t he principal owed and is reported in the lending fund as deferred inflows.

All other outstanding balances between funds are reported as due to and due from other funds. These are generally repaid within the following fiscal year.

Any residual balances outstanding between the governmental acti vities and business-type activities are reported in the Government-Wide Financial Statements as “internal balances.”

ITEM 7
City of Ceres, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2021

57 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued

P. Use of Restricted and Unrestricted Net Position

When an expense is incurred for purposes for which both restric ted and unrestricted net position is available, the City’s policy is to apply restricted net position first.

Q. Budgetary Accounting

The City followed these procedures in establishing the budgetar y data reflected in the financial statements:

1. Public hearings are conducted to obtain public comments. The Ci ty Council annually adopts the budget for the ensuing fiscal year prior to July 1st.

2. The City Manager is authorized to transfer budgetary amounts wi thin a Department; however, any revisions that alte r the total expenditures of any Department must be approved by the City Council.

3. Legally adopted budgets and form al budgetary integration is emp loyed as a management control device during the year for the General Fund and Special Revenue Funds. Formal budgetary integration is not employed for the debt service fund s because effective budgetary control is alternatively achieved through bond indenture provisions. The capital projects, proprietary and trust and agency funds are not budgeted.

4. Budgets for the General and Special Revenue Funds are adopted on a basis consistent with generally accepted accounting principles (GAAP).

5. Budgeted revenue amounts represent the original budget modified by adjustments authorized during the year. Budge ted expenditure amounts repres ent original appropriations adjusted for supp lemental appropriations during the year which were contingent upon new or additiona l revenue sources and reappropr iated amounts for prior year encumbrances. The City Manager may amend the budgeted amou nts within departmental expenditure classifi cations. Appropriation revisio ns made during the year ended June 30, 2021, were not significant.

Appropriations lapse at the end of the fiscal year and then are re-budgeted for the coming year.

Under Article XIIIB of the California Constitution (the Gann Spending Limitation Initiative), the City is restricted as to the amount o f annual appropriations from th e proceeds of taxes, and if proceeds of taxes exceed allowed appropriations, the excess must either be refunded to the State Controller, returned to the taxpayers through revised tax rates or revised fees sche dules, or an excess in one year may be o f f s e t a g a i n s t a d e f i c i t i n t h e following year. For the fiscal year ended June 30, 2021, based on the calculations by City Management, proceeds of taxes did not exceed the appropriations limit.

ITEM 7
City of Ceres, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2021

58 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued

Q. Budgetary Accounting, Continued

Budgeted appropriations for the v arious governmental funds beco me effective each July 1. The City Council may amend the budget during the fiscal year. The legal level of budgetary control has been established at the fund level. Appropriations generally lapse a t the end of the fiscal year to the extent they have not been expended or encumbered.

ITEM 7
City of Ceres, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2021

59 2. CASH AND INVESTMENTS

At June 30, 2021, the City’s pooled cash and investments, classified by maturity, consisted of the following stated at fair market value:

Fair
< 1 1 to 2 > 2 Deposits Market Value
Cash equivalents and investments pooled
Pooled cash, at fair value:

Cash in bank -$ - $ - $ 42,422,571$ 42,422,571 $ Petty cash - - - 4,250 4,250 Total pooled items - - - 42,426,821 42,426,821 Pooled investments, at fair value
Interest obligations
Par Rtae
$4,446,000 1.4 - 3.3% Domestic Time Deposits 2,228,000 2,218,000 - - 4,446,000 $8,500,000 .070 - 2.375% US Government Agency Securities - 499,528 8,010,488 - 8,510,016 $1,000,000 2.503% Corporates Securities - 1,013,290 - - 1,013,290 Municipal Investor Account 27,191,901 - - - 27,191,901 State of California Local Agency Investment Fund 4,511,560 - - - 4,511,560 Total pooled investments - interest obligations 33,931,461 3,730,818 8,010,488 - 45,672,767 Total cash equivalents and investments pooled 33,931,461$ 3,730,818$ 8,010,488$ 42,426,821$ 88,099,588$ Amounts reported in:

Government activities 25,904,274$
Business-type activities:

Unrestricted cash and investments 34,112,580
Cash and investments with trustee/fiscal agent 20,000,566 Fiduciary activities:

Unrestricted cash and investments 6,020,668
Cash and investments with trustee/fiscal agent 2,061,500 Total 88,099,588$
Maturities (in years)

Investment Type Fair Value Maturity (in years)
Domestic Time Deposits 4,446,000$ 1.08
US Governments Agency Securities 8,510,016 3.65 Corporate Securities 1,013,290 1.31
Municipal Investor Account 27,191,901 0.00
Local Agency Investment Fund 4,511,560 0.00
Total fair value 45,672,767$

California statutes authorize cities to invest idle or surplus funds in a variety of credit instruments as provided for in the California Government Code, Section 53600, Chapter 4 – Financial Affairs. The table below identifies the investment types that are authorized for the City by the California Government Code (or the City’s investment policy, where more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. During the year ended June 30, 20 21, the City’s permissible investments included the following instruments:

Medium-term Corporate Notes Commercial Paper Treas ury Bills and Notes Certificates of Deposit Repurchase Agreements Passbook Savings Ac counts Bankers' Acceptances G overnment Agency Securities Local Agency In vestment Fund ITEM 7
City of Ceres, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2021

60 2. CASH AND INVESTMENTS, Continued

Interest rate risk – In accordance with its investment policy, the City manages its exposures to declines in fair values by limiting the weighted average maturity of its investment portfolio to less than 5 years. As of June 30, 2021, the weighted average maturity was not applicable because all balances are current.

Credit risk – It is the City’s policy that commercial paper has a rating of “A1” or higher by a nationally recognized statistical rating or ganization (NRSRO) and with a maturity date not exceeding 180 days from the date of purchase. Medium-term notes, with a final maturity not exceeding five years from the date of purchase, must have a rating of A or the equivalent by a NRSRO. Federal instrumentalities must have a rating of AAA or the equivalent by a NRSRO at the time o f purchase with a maximum maturity of five years at the time of pur chase. The LAIF, administered by the State of California, has a separate investment policy, governed by Government Code Sections 16480-1 6481.2, that provides credit standards for its investments.

Concentration of credit risk – The City’s investment policy does not allow for an investment in any one issuer that is in excess of five percent of the government’s to tal investments. The investments made by the City Treasurer are limited to those allowable under State s tatutes as incorporated into the City’s Investment Policy, which is accepted annually by the City Council. There were no concentrations in any one issuer for the year.

The City participates in an inve stment pool managed by the Stat e of California titled Local Agency Investment Fund (LAIF) which has invested 2.31% of the pool fun ds in Structured Notes and Asset- Backed Securities. LAIF's investments are subject to credit risk with the full faith and credit of the State of California collateralizing th ese investments. In addition, these Structured Notes and Asset-Backed Securities are subject to market risk as to changes in interest rates.

Custodial credit risk – deposits. For deposits, this is the risk that in the event of a bank failure, the City’s deposits may not be returned. The City’s Investment Policy addresses custodial credit risk, which follows the Government Code.

At June 30, 2021, the carrying amount of the City’s deposits was $42,422,571 and the balance in financial institutions was $46,722,088. Of the balance in financial institutions, $500,000 was covered by federal depository insurance and $46,222,088 was collateralized as required by State law (Government Code Section 53630), by the pledging financial institution with assets held in a common pool for the City and other governmental agencies, but not in the name of th e City. As of June 30, 2021, the City’s investments were held by the City’s custodial agent, but not in the City’s name, and were insured up to specified limits by the Securities Investor Protection Corporat ion (SIPC) and supplemental private insurance up to a limit of $150 million.

Custodial credit risk – investments. For investments, this is the risk that, in the event of the failure of the counterparty, the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside counterparty. For the investments maintained by the City, no security was uninsured or unregistered or held by a brokerage firm which is also the counterparty for the security.

ITEM 7
City of Ceres, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2021

61 2. CASH AND INVESTMENTS, Continued

Investment in LAIF: The City is a voluntary participant in California Local Agency Investment Fund (LAIF), which is regulated by California Government Code Section under the oversight of the Local Investment Advisory Board (Board). The Board consists of five members as designated by state statute and is chaired by the State Treasurer who is responsible for day to day administration of LAIF. The total amount invested by all public agencies as of June 30, 2021 was $37,066,592,514 of which the City had a balance of $4,511,560. LAIF is part of the California Pooled Money Investment Account (PMIA), which at June 30, 2021 has a portfolio with market valuation of $193,463,490 thousand. Of the total invested, 97.69% was invested in non-derivative financial products and 2.31% in structured notes and asset-backed securities. The fair value of the City’s investmen t in this pool is reported in the accompanying financial statements at amounts based upon the City’s pro-rata share o f the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting rec ords maintained by LAIF, which are recorded on an amortized cost basis.

3. ACCOUNTS RECEIVABLE

Accounts receivable consisted of the following at June 30, 2021:

Governmental Business-type Fiduciary
Activities Activities Activities Total
Current:

Accounts - $ 2,134,697$ - $ 2,134,697$ Taxes - - - - Interest 1,305 2,083 - 3,388 Intergovernmental 410,409 - - 410,409 Other receivable 4,573,762 - - 4,573,762 Total current 4,985,476 2,136,780 - 7,122,256 Noncurrent:

Loans receivable 6,079,576 - 2,214,371 8,293,947 Total noncurrent 6,079,576 - 2,214,371 8,293,947 Total receivables 11,065,052$ 2,136,780$ 2,214,371$ 15,416,203$

These amounts resulted in the following concentrations in receivables:

Other Governments 2.66%
Individuals/Businesses 67.65%
Financial 0.02%
Other 29.67%

Amounts do not indicate a signifi cant concentration (greater th an 25%) with any single individual, business, or agency.

ITEM 7
City of Ceres, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2021

62 4. LOANS AND NOTES RECEIVABLE

Through the City’s various housing rehabilitation funds and first-time home buyer’s funds, the City has loaned funds to qualifying individuals and businesses. Interest rates vary depending on the terms of the loan. Interest is accrued on the loans that bear interest.

Loans and notes receivable for the year ended June 30, 2021, consisted of the following:

Beginning Ending
Description July 1, 2020 Additions (Deletions) June 30, 2021 First-Time Homebuyer Loans 2,614,144$ -$ (294,609)$ 2,319,535$ Housing Rehabilitation Loans:

CDBG Loan 221,327 - (1,930) 219,397 Emergency Repair Loan 332,752 - (1,043) 331,709 Begin Home Grant 666,530 - (256,860) 409,670 Total Housing Rehabilitation Loans 1,220,609 - (259,833) 960,776 Whitmore Oaks 865,361 - - 865,361 Della Tiara 2,486,399 - - 2,486,399 Total loans receivable 7,186,513$ -$ (554,442)$ 6,632,071$

The following is a summary of the loans and notes receivable outstanding as of June 30, 2021:

First-Time Homebuyer Loans

The City has provided various loa ns to assist first-time homebu yers with loans up to $50,000. Loan repayment is deferred for 30 years or until sale or refinancing of the property. Interest rates vary from 1% to 5%. Total first-time homebuyer loans outstanding at June 30, 2021 were $2,319,535.

Housing Rehabilitation Loans

The City administers various hous ing rehabilitati on loan programs using Community Development Block Grant funds and Begin Home Funds. Under these programs, i ndividuals with incomes below a certain level are eligible to receive low interest, variable te rm loans, secured by deeds of trust for rehabilitation work on their home s. Interest rates may vary fro m 0% to 3%. The loan repayments may be amortized over the life of the loans, deferred or a combination of both. Total rehabilitation loans outstanding at June 30, 2021 were $960,776.

ITEM 7
City of Ceres, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2021

63 4. LOANS AND NOTES RECEIVABLE, Continued

Whitmore Oaks

The Whitmore Oaks loan was made to assist the developer with the costs to develop and construct a 53 unit apartment complex for seniors. The CRA provided a loan of $612,500 and the City, through the State’s HOME Investment Partnersh ip Program, provided a loan of up to $865,361. Loan provisions require the apartment complex pro vide not less than eleven affo rdable housing units to be rented to qualified very-low and low income persons and families. The CRA loan carries an interest rate of 3% starting 2015 and the note is payable in full in 2057. The HOME loan carries an interest rate of 3% starting in 2027 and the note is payable in full in 2042. The a mount outstanding at June 30, 2021 was $865,361.

Della Tiara

The CRA provided a loan to Della Tiara for the construction of a 26-unit apartment complex (the “Project) using HOME grant funds. The loan bears simple interest of 3% per year and interest begins to accrue January 1, 2015. The loan is deferred for 55 years. Comm encing in 2020, principal and interest is due in an amount equal to 35% of residual cash flow from the Project provided that the residual cash flow in any year is over $10,000. The amount outstanding at June 30, 2021 was $2,486,399.

ITEM 7
City of Ceres, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2021

64 5. CAPITAL ASSETS

Capital asset activity for governmental activities for the year ended June 30, 2021, was as follows:

Balance Balance
July 1, 2020 Additions Deletions June 30, 2021
Governmental activities:

Nondepreciable assets:

Land 14,753,193 $ - $ - $ 14,753,193$ Total nondepreciable assets 14,753,193 - - 14,753,193 Depreciable assets:

Buildings and improvements 40,277,593 784,149 - 41,061,742 Machinery & equipment 18,282,764 1,078,141 (585,184) 18,775,721 Infrastructure 104,077,459 2,422,298 - 106,499,757 Total depreciable assets 162,637,816 4,284,588 (585,184) 166,337,220 Total 177,391,009 4,284,588 (585,184) 181,090,413 Accumulated depreciation:

Buildings and improvements (16,900,919) (1,473,192) - (18,374,111) Machinery & equipment (12,676,673) (973,554) 585,184 (13,065,043) Infrastructure (62,108,555) (3,163,302) - (65,271,857) Total accumulated depreciation (91,686,147) (5,610,048) 585,184 (96,711,011) Net depreciable assets 70,951,669 (1,325,460) - 69,626,209 Total net capital assets 85,704,862$ (1,325,460)$ -$ 84,379,402$

Depreciation expense for capital assets was charged to functions as follows:

General government 1,926,175$
Public safety 308,418
Public works 3,285,939
Community services 18,049
Economic development 71,467
Total 5,610,048$
ITEM 7
City of Ceres, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2021

65 5. CAPITAL ASSETS, Continued

Capital asset activity for business-type activities for the year ended June 30, 2021, was as follows:

Balance Balance
July 1, 2020 Additions Deletions June 30, 2021
Business-type activities:

Nondepreciable assets:

Land 1,783,812 $ 1,508,006 $ - $ 3,291,818$ Total nondepreciable assets 1,783,812 1,508,006 - 3,291,818 Depreciable assets:

Buildings and improvements 9,510,944 - - 9,510,944 Machinery & equipment 6,576,131 26,175 - 6,602,306 Infrastructure 38,902,522 3,266,566 - 42,169,088 Total depreciable assets 54,989,597 3,292,741 - 58,282,338 Total 56,773,409 4,800,747 - 61,574,156 Accumulated depreciation:

Buildings and improvements (5,761,134) (291,630) - (6,052,764) Machinery & equipment (5,147,965) (273,000) - (5,420,965) Infrastructure (14,825,435) (1,256,130) - (16,081,565) Total accumulated depreciation (25,734,534) (1,820,760) - (27,555,294) Net depreciable assets 29,255,063 1,471,981 - 30,727,044 Total net capital assets 31,038,875$ 2,979,987$ -$ 34,018,862$

Depreciation expense for business-type activity capital assets was charged to functions as follows:

Water 952,422$
Sewer 868,338

STANCOG -
Total 1,820,760$

ITEM 7
City of Ceres, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2021

66 6. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities consisted of the following at June 30, 2021:

Governmental Business-type Fiduciary
Activities Activities Activities Total
Accounts payable 2,397,389 $ 1,149,708 $ 5,065 $ 3,552,162 $ Accrued payroll and related liabilities 1,361,728 - - 1,361,728 Total 3,759,117 $ 1,149,708 $ 5,065 $ 4,913,890 $

These amounts resulted in the following concentrations in payables:

Vendors 72%
Employees 28%

Amounts do not indicate a significa nt concentration (greater th an 25%) with any single vendor or employee.

7. SPECIAL ASSESSMENT DISTRICTS

Special Assessment bonds have been issued under the 1915 Bond Act. The City is in no way liable for repayment of any bonds of the funds reflected in the Agency funds, according to bond counsel, but is acting only as an agent for the property owners/bond holders in collecting and forwarding the special assessments. Balances of the various assessment district bonds were as follows as of June 30, 2021:

2002 - WestPointe Refunding Reassessment District – Original Issue $2,960,000

In fiscal year 2003, the City issu ed the WestPointe Refunding Reassessment District Bonds. Proceeds from the sale of the bonds was used to call and redeem all of t he outstanding principal amount of the bonds previously issued by the City for its Westpointe Improvem ent Assessment District and to pay certain costs of issuance of the bonds. The City is the collect ing and paying agent for the bonds issued by the WestPointe Assessment Dist r i c t ( D i s t r i c t ) , b u t h a s n o d irect or contingent liability or moral obligation for the payment of these bonds. Assets held by the City on behalf of the District are recorded in an agency fund. Accordingly, the assets and outstanding bond obligations of the District are not presented in the accompanying Basic Financial Statements. As of June 30, 2021, there is no outstanding balance of the Westpointe Refunding Reassessment District Bonds.

ITEM 7
City of Ceres, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2021

67 8. LONG-TERM LIABILITIES

The following is a summary of changes in long-term debt for business-type activities for the year ended June 30, 2021:

Balance Balance Due Within
July 1, 2020 Additions Retirements June 30, 2021 One Year Business-type Activities:
2020 Water Refunding Bonds 3,504,000$ -$ (145,000)$ 3,359,000$ 149,000$ 2020 Water Revenue Bonds - 20,280,000 - 20,280,000 - Bond discount - (101,400) - (101,400) - 2020 Wastewater Refunding Bonds 6,085,000 - (254,000) 5,831,000 263,000 Total business-type activities 9,589,000$ 20,178,600$ (399,000)$ 29,368,600$ 412,000$

2020 Water Revenue Bond, Refunding – Original Issue $3,658,000

The Ceres Financing Authority issued the Water Revenue Bonds, Series A in the amount of $4,750,000 to finance the acquisition and construction of certain improvements to the water enterprise system of the City. On March 1, 2020, the City issued $3,658,000 principal amount of 2021 Water Revenue Bonds to refund the outstanding principal balance of $3,830,000 for the 2009 Water Revenue Bonds. The reacquisition price did not exceed the net carrying amount of t he old debt. This refunding decreased its total debts service payments by $1,224,059 and to obtain an economic gain (difference between the present values of the debt service payments on the old and new debt) of $239,036. The bonds mature annually through June 1, 2038, in amounts ranging from $145,000 to $251,000. The interest rate is 3.27% and are payable semiannually on June 1 and December 1. Bonds ar e payable from revenues consisting primarily of installment payments payable by the City to the Authority under a Water Installment Purchase Agreement. The outstanding balance at June 30, 2021 is $3,359,000.

2020 Water Revenue Bond – Original Issue $20,280,000

On March 1 2021, The City issues $20,280,000 principal amount of 2020 Water Revenue Bonds, Interim Financing to finance a portion of the initial design and constr uction costs of a Regional Water Supply Project and to pay costs incurred in connection with the issuance of the Bonds. The principal of the bonds are payable annually starting on June 1, 2023 through June 1, 2050, in amounts ranging from $675,000 to $775,000. The interest rate is 0.50% and are payable semiannually on June 1 and December 1. Bonds are payable from revenues consisting primarily of installment p ayments payable by the City to the Authority under a Wastewater Ins tallment Purchase Agreement. Th e outstanding balance at June 30, 2021 is $20,280,000.

ITEM 7
City of Ceres, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2021

68 8. LONG-TERM LIABILITIES, Continued

2020 Wastewater Revenue Bond, Refunding – Original Issue $6,355,000

On December 22, 2009, Ceres Financing Authority issued the Wastewater Revenue Bonds, Series A in the amount of $8,220,000 to finance the acquisition and constru ction of certain improvements to the wastewater enterprise system of the City. On March 1, 2020, the City issued $6,355,000 principal amount of 2020 Wastewater Revenue Bonds to refund the outstanding prin cipal balance of $6,650,000 for the 2009 Wastewater Revenue Bonds. The reacquisition price did not exceed the net carrying amount of the old debt. This refunding decreased its total debts service payments by $2,117,929 and to obtain an economic gain (difference between the present values of the deb t service payments on the old and new debt) of $411,327. The principal of the bonds are payable annu ally starting on Ju ne 1, 2020 through June 1, 2038, in amounts ranging from $270,000 to $438,000. The interest rate is 3.27% and are payable semiannually on June 1 and December 1. Bonds are payable from revenues consisting primarily of installment payments payable by the City to the Authority under a Wastewater Installment Purchase Agreement. The outstanding balance at June 30, 2021 is $5,831,000.

Future debt service at June 30, 2021, is as follows for all remaining debt except claims liabilities:

Year Ending
June 30,
Principal Interest Principal Interest Principal Interest 2022 149,000$ 109,839$ -$ 101,400$ 263,000$ 190,674$ 2023 154,000 104,967 675,000 101,400 272,000 182,074 2024 163,000 99,931 680,000 98,025 281,000 173,179 2025 167,000 94,601 685,000 94,625 289,000 163,991 2026 171,000 89,140 685,000 91,200 297,000 154,540 2027-2031 948,000 357,607 3,485,000 404,200 1,643,000 620,025 2032-2036 1,110,000 192,603 3,575,000 316,150 1,925,000 33,867 2037-2041 497,000 24,460 3,665,000 225,900 861,000 42,477 2042-2046 - - 3,755,000 133,400 - - 2047-2051 - - 3,075,000 38,525 - - Total 3,359,000$ 1,073,148$ 20,280,000$ 1,604,825$ 5,831,000$ 1,560,827$ Due within one year 149,000$ 109,839$ -$ 101,400$ 263,000$ 190,674$ Due after one year 3,210,000 963,309 20,280,000 1,503,425 5,568,000 1,370,153 2020 Water
Business-type Activities
2020 Water
Refunding Bonds Revenue Bonds Refunding Bonds
2020 Wastewater

ITEM 7
City of Ceres, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2021

69 9. NET POSITION/ FUND BALANCES

Net Position

Governmental Business-type
Activities Activities Totals
Net investment in capital assets 83,487,997$ 5,062,262$ 88,550,259$ Restricted 9,065,702 - 9,065,702 Unrestricted (8,968,506) 51,314,119 42,345,613 Total 83,585,193$ 56,376,381$ 139,961,574$

 Restricted balances are for the same purposes as fund balance r estrictions because external restriction requirements are the same. See descriptions of the restrictions below.

Fund Balance

Nonspendable, Restricted and Committed fund balance consisted of the following at June 30, 2021:

Nonspendable:

Prepaid items 14,342 $
Total nonspendable 14,342 $
Restricted for:

Home Program 787,750$
CDBG Programs 639,299
Storm Drain Benefit Districts 817,219
Eastgate Street Benefit District 69,550
BEGIN Grant Program 387,844
Program Income BEGIN 228,437
Measure H Income 1,734,762
SLESF 27,690
Dept of Conservation Grant 68,422
Fire Hydrant Benefit District 128,697
Transportation Development Act 27,050
Ceres Community Foundation 142,751
Measure L 3,180,052
Road Maintenance and Rehab 826,179
Total restricted 9,065,702$
Committed:

Community Facilities District 12,082$
Total committed 12,082$

ITEM 7
City of Ceres, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2021

70 9. NET POSITION/ FUND BALANCES, Continued

The following describe the purpose of each nonspendable, restriction and commitment used by the City:

Nonspendable

Petty cash – includes imprest balances, whic h do not represent available, spendable resources even though they are components of assets.

Prepaid items – used to segregate that portion of fund balance to indicate that prepaid amounts do not represent available, spendable resources even though they are components of assets.

Restricted

HOME Program – represents amounts restricted for housing under the HOME program.

CDBG Programs – represents amounts restricted for housing purposes by the Dep artment of Housing and Urban Development.

Storm Drain Benefit Districts – represents amounts restricted for use on the storm drain systems in the WestPointe, Eastgate, Mitchell Road, and North East benefit districts.

Eastgate Street Benefit District – represents amounts restricted f or use on the streets in the Eastgate benefit district.

BEGIN Grant Program – represents amounts restricted f or the Building Equity & Growth in Neighborhoods grant to be utilize d for deferred-payment second mortgage loans for down payment assistance to lower to moderate-income first-time homebuyers of new homes in projects with affordability enhanced by local regulatory incentives or barrier reductions.

Program Income BEGIN – represents amounts restricted for housing purposes under the BEGIN Grant Program.

Measure H Income– represents amounts restricted as a result of a voter approved ½-cent retail transaction and use tax (sales tax) for the improvement of poli ce, fire and 9-1-1 emergency response; to fund additional personnel and equipment costs.

State Gas Tax – represents amounts restricted for street purposes by the California Streets and Highways Code.

Street Light – Landscape District - represents amounts restricted for the City-wide 1972 Act Landscaping and Lighting District.

ITEM 7
City of Ceres, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2021

71 9. NET POSITION/ FUND BALANCES, Continued

Restricted, Continued

Dept. of Conservation Grant – represents amounts restricted for department of conservation grant programs.

Fire Hydrant Benefit District – represents amounts restricted for use in the fire hydrant benefit district.

Transportation Development Act – represents amounts restricted by use by the Transportation Development Act for transportation, including streets and roads.

Ceres Community Foundation - represents amounts restricted for use for the Ceres Community Foundation.

Measure L – represents amounts restricted for use of local street and road improvements, arterial street widening, signalization, pedestrian, bicyclist, and driver safety improvement projects.

Road Maintenance and Rehab – Restricted to continue essential road maintenance and rehabilitation projects, safety improvements, repairing and rep lacing aging bridges, and increasing access and mobility options to the traveling public.

Committed

General Fund Reserve – used to represent that portion of fund balance set aside for unexpected events that may impact the City’s ability to provide essential day-to-day services. This amount can only be changed by Council Resolution.

Street Expansion – represents purchase orders issued for ongoing street projects. These amounts are under contract.

Neighborhood Park Fees– represents purchase orders issu ed for ongoing parks projects. T hese amounts are under contract.

Community Facilities District – amounts committed for Police, Fire, Parks and Administrative Services. These amounts can only be charged by Council Resolution.

Deficit fund balances consisted of the following:

Nonmajor Special Revenue Funds:

State Gas Tax - $105,067 – resulted from the deplet ion of the fund balance through operational expenditures.

Street Light - Landscape District - $187,538 resulted from depletion of the fund balance through operational expenditures.

ITEM 7
City of Ceres, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2021

72 9. NET POSITION/ FUND BALANCES, Continued

CMAQ – $250,181 resulted from the advance of funds through a Federal grant setup on a cost reimbursement basis with revenues to be received in future years.

Community Center - $1,934,847 resulted from operational costs in excess of revenues. The City plans to address this deficit in the next fiscal year.

Daniel Whitmore House - $121 resulted from the advance of funds from the City with re venues to be received in future years.

RiverBluff Regional Park - $24,546 resulted from the advance of funds from the City wit h revenues to be received in future years.

Clinton Whitmore Mansion - $70,241 resulted from the advance of funds from the City with revenues to be received in future years.

SB2 Planning Grants Program Fund - $263 resulted from depletion of the fund balance through operational expenditures.

Excess of Expenditures and Transfers Over Appropriations: Expenditures and transfers exceeded appropriations for the year ended June 30, 2021, for the following funds:

Total Excess
Expenditures Expenditures
Final Budget and Transfers Over Appropriation s
Governmental Activities
Non-major Funds:

Special Revenue Funds:

Neighborhood Park Fees 45,550$ 862,126$ (816,576)$ SLESF - 138,683 (138,683) Street-Light Landscape District 504,596 547,775 (43,179) Traffic Safety - 57,485 (57,485) Department of Conservation Grant - 3,961 (3,961) Transportation Development Act 2,500 3,077 (577) LLEBG - 40,255 (40,255) Clinton Whitmore Mansion 15,620 23,914 (8,294)

ITEM 7
City of Ceres, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2021

73 10. INTERFUND TRANSACTIONS

Due to and due from other funds consisted of the following as of June 30, 2021:

Due from Due to
Other Funds Other Funds
Governmental Activities
Major Funds:

General Fund 2,670,379 $ - $
Total Major Funds 2,670,379 -
Non-major Funds:

Special Revenue Funds:

State Gas Tax - 92,390
Street Light-Landscape District - 170,390 Traffic Safety - 23,694
CMAQ - 19,992
Transportation Development Act - 21,014 Community Center - 1,847,536 RiverBluff Regional Park - 24,546 Clinton Whitmore Mansion - 74,213 SB2 Planning Grants Program Fund - 263 Total Non-major Special Revenue Funds - 2,274,038 Total Non-major Funds - 2,274,038 Internal Service Funds:

Equipment Revolving - 396,106 Risk Management - 235
Total Governmental Activities 2,670,379 $ 2,670,379 $

Due to and from balances result from the time lag between the dates that (1) interfund goods and services are provided or reimbursable expenditures occur, (2) transactions are recorded in the accounting system, and (3) payments between funds are made.

ITEM 7
City of Ceres, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2021

74 10. INTERFUND TRANSACTIONS, Continued

Activity for advances for the year ended June 30, 2021, was as follows:

Advances to Advances from
Other Funds Other Funds
Governmental Activities
Major Funds:

General Fund 1,954,281 $ - $
Total Governmental Activities 1,954,281 - Successor Agency
CRA - 1,422,787
SCRC - 531,494
Total Successor Agency - 1,954,281 Total Advances 1,954,281$ 1,954,281$

Advances from the General Fund to the Successor Agency - SCRC w ere for Redevelopment Agency start-up costs.

Transfers are used to (1) move revenues from the fund that statute or budget requires to collect them to the fund that statute or budget requires to expend them, and (2 ) use unrestricted revenues collected in the general fund to finance various programs accounted for in other funds in accordance with budgetary authorizations.

ITEM 7
City of Ceres, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2021

75 10. INTERFUND TRANSACTIONS, Continued

Transfers consisted of the following at June 30, 2021:

Transfers In Transfers Out
Governmental Activities
Major Funds:

General Fund 837,071 $ 314,045 $
Total Major Funds 837,071 314,045
Non-major Funds:

Special Revenue Funds:

Measure H 8,336 152,000
State Gas Tax 229 -
Community Facilities District - 671,438 Community Center 62 -
Daniel Whitmore House 6,792 -
CARES Act - 35,691
Total Non-major Special Revenue Funds 15,419 859,129 Total Non-major Funds 15,419 859,129 Internal Service Funds
Equipment Revolving 78 -
Information Technology 5,038 -
Building Maintenance 10,619 -
Total Governmental Activities 868,225 1,173,174 Proprietary Funds
Water 212,262 212,000
Sewer 304,687 -
Total Propretary Funds 516,949 212,000 Total Transfers 1,385,174$ 1,385,174$

Transfers In reported in the General fund from the Non-Major Governmental funds represent the City’s commitment to supporting recreatio n programs. Transfers In rep orted in Non-Major Governmental funds from Major Governmental funds represent support for community services expenses.

ITEM 7
City of Ceres, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2021

76 11. RISK MANAGEMENT

The City participates with other public entities in a joint venture under a joint powers agreement which established the Central San Joaquin Valley Risk Management Authority (CSJVRMA). The relationship between the City and the CSJVRMA is such that the CSJVRMA is not a component unit of the City for financial reporting purposes.

The City is covered for the first $1,000,000 of each general liability claim and $500,000 of each workers’ compensation claim through the CSJVRMA. The City has the right to receive dividends or the obligation to pay assessments based on a formula which, among other expens es, charges the City’s account for liability losses under the City’s self-insurance retention of $ 50,000 and workers’ compensation losses under the City’s self-insuranc e retention of $100,000. The CSJV RMA participates in an excess pool, which provides general liability coverage from $1,000,001 to $15,000,000. The CSJVRMA participates in an excess pool, which provides workers’ compensation coverage from $500,001 to $5,000,000 and also purchases excess insurance above the $5,000,000 to the statutory limit.

The CSJVRMA is a consortium of fifty-four (54) cities in San Jo aquin Valley, California. It was established under the provisions of California Government Code Section 6500 et seq. The CSJVRMA is governed by a Board of Directors, which meets three to four times per year, consisting of one member appointed by each member city. The day-to-day business is handled by a management group employed by the CSJVRMA.

The financial information from the audited financial statements of the CSJVRMA, as of June 30, 2021, the most recent available, is presented below:

Total assets 150,621,596$
Total liabilities 129,774,819
Total equities 20,846,777
Total revenues 55,391,674
Total expenses 54,084,619
Revenues over (under) expenses 1,307,055

Detailed financial information may be obtained from the CSJVRMA.

At the termination of the joint powers agreement and after all claims have been settled, any excess or deficit will be divided among the cities in accordance with the governing documents. There were no excess claims over premiums for any of the City’s risk manageme nt programs in 2020-2021, and there were no changes to the City’s insurance coverage from the prior year.

ITEM 7
City of Ceres, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2021

77 11. RISK MANAGEMENT, Continued

The following chart depicts the claims payments and liability amounts for the years shown:

Current Year Claim Payments
Beginning of Claims and Changes for Current and End of Year Fiscal Year Year Liability in Estimates Prior Years Liability 2015-2016 856,472$ 16,512,903$ (15,621,589)$ 1,747,786$ 2016-2017 1,747,786 1,347,031 (2,214,425) 880,392 2017-2018 880,392 2,011,551 (1,904,705) 987,238 2018-2019 987,238 2,227,567 (2,240,605) 974,200 2019-2020 974,200 2,344,046 (2,540,939) 1,171,093 2020-2021 1,171,093 2,104,386 (2,256,683) 1,018,796

12. PENSION PLAN

A. General Information about the Pension Plan

Plan Description

The City is a participant in the Stanislaus County Employees Re tirement Association (StanCERA), a retirement system organized under the 1937 Retirement Act. Stan CERA is a cost-sharing multiple employer Public Employee Retirement System (PERS). StanCERA pro vides retirement and disability benefits, annual cost-of-living adjustments, and death benefits. Health and welfare insurance for retirees and their dependents is available however administered independ ently of StanCERA. The plan is administered by StanCERA. An actuarial valuation is performed for the system annually as a whole and the contribution rate is determined for each participating entity. The participating entities are the County, City of Ceres, and six special d istricts located in the County not governed by the County’s Board of Supervisors. StanCERA issues a C omprehensive Annual Financial R eport (CAFR) that includes financial statements and required supplementary information for StanCERA. The CAFR may be obtained by writing to Stanislaus County Employees Retirement Association, P.O. Box 3150, Modesto, CA 95353-3150 or by calling (209) 525-6393.

The StanCERA CAFR is prepared using the accrual basis of accounting. Plan member contributions are recognized in the period in which the contributions are due. Employer contributions are recognized when due and a formal commitment to provide the contributions has be en made. Benefits and refunds are recognized when due and payable in accordance with the terms of the plan.

Plan investments are reported at fair value. Short-term investm e n t s a r e r e p o r t e d a t c o s t , w h i c h approximates fair value. All other securities are valued at the last reported market price at current exchange rates.

ITEM 7
City of Ceres, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2021

78 12. PENSION PLAN

Summary of Plans and Eligible Participants

General Tiers 1,2,4,5 (not open to new members) Vests after fiv e years of credited service and may retire at age 50 or older with 10 or more years of
membership with StanCERA or any age with 30
or more years of credited service.

General Tier 3 (not open to new members) Vests after ten years of credited service and may retire at age 55 with 10 or more years of credited
service.

General Tier 6 (open to new members) Vests after five years of credited service and may retire at age 52 with 5 years of service credit or
age 70 regardless of service credit.

Safety Tiers 1, 2, 4, 5 (not open to new members) Vests after f ive years of credited service and may retire at age 50 or older with 10 or more years of
membership with StanCERA or any age with 20
or more years of credited service.

Safety Tier 6 (open to new members) Vests after five years of credited service and may retire at age 50 with 5 years of service credit or
a
ge 70 regardless of service credit.

Benefits Provided

Members terminating employment before accruing ten years for Tier 3 of retirement service credit forfeit the right to receive retirement benefits unless they establish reciprocity with another public agency within the prescribed time period. Non- vested members who terminate se rvice are entitled to withdraw their accumulated contributions plus accrued interest. Members who terminate after earning five or ten years of retirement service credit may leave their contributions on d eposit and elect to take a deferred retirement. Difference between expected or actual experience fo r vested and non-vested benefits may result in an increase or decrease to pension expense and net pension liability.

For members with Tier 1, Tier 4, or Tier 5 benefits, final average salary is the average monthly salary based on the highest twelve consecutive months of earnings. For members with Tier 2, Tier 3, or Tier 6 benefits, final average salary is the average monthly salary ba sed on the highest thirty-six consecutive months of earnings.

The retirement benefit for Tier 1, Tier 2, Tier 4, Tier 5, and Tier 6 members includes a postretirement cost-of-living adjustment (COLA) based upon the Consumer Price Index. COL increases/decreases are limited to a maximum of 3% annually. Total COL decrease(s) cannot exceed the cumulative amount of previous COLA increase(s). Tier 1, Tier 2, Tier 4, Tier 5, and Tier 6 provide death and disability benefits.

ITEM 7
City of Ceres, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2021

79 12. PENSION PLAN, Continued

Those members participating in T ier 1, Tier 2, Tier 4, Tier 5, and Tier 6 are required by statute to contribute to the pension plan. Members’ contribution rates for Tier 1, Tier 2, Tier 4, and Tier 5 are formulated on the basis of the age at date of entry and the actuarially calculated future benefits. Members’ contribution rate for Tier 6 is a flat rate based on the actuar ially calculated future benefit. The City is required by statute to contribute the remaining amounts necessa ry to finance the estimated benefits accrued to its members. Member and employer contribution rates for each plan are as follows:

Plan
Employer
Contribution Rates
Employee
Contribution Rates
General Tier 2 27.81% 4.63-11.67%
General Tier 4 18.51% 3.32-7.96%
General Tier 5 32.21% 5.41-12.96%
General Tier 6 28.06% 8.63%
Safety Tier 5 48.61% 7.54-17.21%
Safety Tier 6 42.87% 14.11%

Contributions

The City’s contributions to StanCERA for the fiscal year ended June 30, 2021, was equal to the required contributions. The required contributions for the last three fiscal years are noted in the below chart. The City does not contribute towards post-employment benefits other than retirement.

Fiscal Year End Contributions
June 30, 2020 5,910,578$
June 30, 2021 5,676,413

The County Employees’ Retirement Law of 1937 establishes the ba sic obligations for employer and member contributions and benefits to and of the retirement system. The actual employer and member contribution rates in effect each year are based on recommendat ions made by an independent actuary and adopted by the StanCERA Board of Retirement.

StanCERA provides a death benefit of $5,000 paid to the benefic iary or estate if a member dies after retirement, provided that Stanislaus County was the members’ last public employer.

Ad-hoc benefits are non-vested benefits determined by the Board of Retirement. Approved changes to the excess earnings policy by th e Board of Retirement on June 3 0, 2014 placed restrictions on offering ad-hoc benefits, specifically that the system must be 100% actu arially funded prior to the Board of Retirement offering any ad-hoc benefits. StanCERA is 78.85% actuarially funded as of June 30, 2021.

ITEM 7
City of Ceres, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2021

80 12. PENSION PLAN, Continued

B. Net Pension Liability

The City’s net pension liability for the Plan is measured as th e total pension liability, less the pension plan’s fiduciary net position. The net pension liability of the Plan is measured as of June 30, 2020, using an annual actuarial valuation as of June 30, 2019 rolled forward to June 30, 2020 using standard update procedures. A summary of principal assumptions and methods used to determine the net pension liability is shown below.

Actuarial Assumptions Used to Calculate Net Pension Liability

The total pension liability in the June 30, 2021 actuarial valuations was determined using the following actuarial assumptions:

Actuarial Assumptions
Valuation date June 30, 2019
Measurement date June 30, 2020
Actuarial cost method Entry-age normal cost method
Actuarial assumptions:

Discount rate 7.00%
Inflation 2.75%
Payroll growth 3.00% for those eligible for COLA
Projected salary increases 3.00% plus merit component
Investment Rate of Return 7.00%

Post-retirement mortality rates were based on the RP2000 Combin ed tables projected to the year 2020 with adjustments for mortality i mprovements based on Society of Actuaries Scale AA. For pre- retirement mortality, withdrawal rates, disability rates and service retirement rates, the rates vary by age, gender and classification.

Discount Rate - The discount rate used to measure the total pension liability was 7.00%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current contribution rate and that contributions from the employers will be made at contractually required rates, actuarially determined. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make al l projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

ITEM 7
City of Ceres, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2021

81 12. PENSION PLAN, Continued

B. Net Pension Liability, Continued

The long-term defined benefit pension plan return expectations were determined using a building-block approach. An inflation forecast is the baseline and various rea l return premiums (e.g. bonds, equities, etc.) are added to create nominal return expectations for each asset class.

These expectations are combined to produce the long-term expect ed rate of return by weighting the expected nominal rates of return by the target asset allocation percentages and including an expected return from rebalancing uncorrelated asset classes.

Best estimates of geometric real rates of return for each major asset class included in the target asset allocation as of June 30, 2021 are summarized in the following table:

Asset Class
Long-Term Expected
Real Rate of Return
2021 Target
Allocation
Domestic Equities
US Large Cap 3.70% 14.00%
US Small Cap 3.30% 3.00%
International Equities
International Development 5.60% 18.00%
Emerging Market Equity 6.50% 5.00%
US Fixed Income
Core fixed income 1.20% 0.00%
US Treasury 0.60% 3.00%
Short-term Gov/Credit 0.70% 19.00%
Real Estate Securities
Core 4.00% 5.00%
Value-add 6.00% 5.00%
Risk Parity 5.00% 13.00%
Private Equity 6.70% 6.00%
Private Credit 5.60% 6.00%
Infrastructure 5.80% 2.00%
Cash 0.00% 1.00%

Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions

As of June 30, 2021, the City reported net pension liabilities for its proportionate share of the net pension liability of the Plan of $46,489,029.

ITEM 7
City of Ceres, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2021

82 12. PENSION PLAN, Continued

B. Net Pension Liability, Continued

The City's net pension liability for the Plan is measured as th e proportionate share of the net pension liability. The net pension liability of the Plan is measured as of June 30, 2021, and the total pension liability for the Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2019 rolled forward to June 30, 2020 using standard update procedures. The City's proportion of the net pension liability was based on a projecti on of the City's long-term share of contributions to the pension plan relative to the projected con tributions of all participating employers, actuarially determined. The City’s proportionate share of the net pension liability for the Plan as of June 30, 2021 and 2020 was 5.7019% and 5.5842% respectively.

For the year ended June 30, 2021, the City recognized pension e xpense of $10,319,238. At June 30, 2021, the City reported deferred outflows of resources and defe rred inflows of resources related to pensions from the following sources:

Deferred Outflows Deferred Inflow
of Resources of Resources
Pension contributions subsequent to measurement date 5,676,414$ -$ Differences between actual and expected experience 2,252,093 277,614 Changes in proportions 1,913,950 1,003,577 Differences between the employer's contributions and the employer's proportionate share of the contributions 234,792 2,423 Net differences between projected and actual earnings on plan investments 6,352,150 -
Changes in assumptions - 1,575,364 Total 16,429,399$ 2,858,978$

$5,676,414 reported as deferred outflows of resources related t o contributions subsequent to the measurement date and changes in proportion that will be recogni zed as a reduction of the net pension liability in the year ended June 30, 2022. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:

Year Ended
30-Jun
2021 905,951$
2022 2,181,643
2023 2,769,256
2024 2,037,158
2025 -
Thereafter -
ITEM 7
City of Ceres, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2021

83 12. PENSION PLAN, Continued

B. Net Pension Liability, Continued

Sensitivity of the Net Pension Liability to Changes in the Discount Rate

The following presents the net pension liability of the City ca lculated using the discount rate of 7.00%, as well as what the plan’s net pension liability would be if it were calculated using a discount rate that is one percentage point lower (6.00%) or one percentage point higher (8.00%) than the current rate:

1% Decrease in
Discount Rate
Current Discount
Rate
1% increase in
Discount Rate
(6.00%) (7.00%) (8.00%)
Net pension liability 70,547,617$ 46,489,029$ 26,849,218$

Pension Plan Fiduciary Net Position – Detailed information about the pension plan’s fiduciary net position is available in the separately issued Association financial reports.

13. ABANDONED VEHICLE ABATEMENT PROGRAM

The City has an Abandoned Vehicle Abatement Program (AVA) with revenues, expenditures, and balances of abandoned vehicle abatement funds for the year ended June 30, 2021 as follows:

Revenues 46,717$
Expenditures:

Public safety 36,637
Revenues (under) expenditures 10,080
Fund balances:

Beginning balance 72,834
Ending balance 82,914$

AVA expenditures for 2021 are in compliance with Sections 9250.7 and 22710 of the Vehicle Code.

ITEM 7
City of Ceres, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2021

84 14. SUCCESSOR AGENCY TRUST FOR ASS ETS OF FORMER REDEVELOPMENT AGENCY

On December 29, 2013, the California Supreme Court upheld Assem bly Bill 1X 26 (“the Bill”) that provides for the dissolution of all redevelopment agencies in t he State of California. This action impacted the reporting entity of the City of Ceres that previou sly had reported two redevelopment agencies within the reporting entity of the City as blended component units.

The Bill provides that upon dissolution of a redevelopment agen cy, either the city or another unit of local government will agree to serve as the “successor agency” to hold the assets until they are distributed to other units of state and local government. On January 9, 2013, the City Council elected to become the Successor Agency for both the former Ceres Redeve lopment Agency and Stanislaus- Ceres Redevelopment Commission in accordance with the Bill as part of City resolution number 2013- 04 and 2013-05, respectively.

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

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

The Bill directs the State Controller of the State of California to review the propriety of any transfers of assets between redevelopment agencies and other public bodies that occurred after January 1, 2011.

If the public body that received such transfers is not contract ually committed to a third party for the expenditure or encumbrance of t hose assets, the State Controlle r is required to order the available assets to be transferred to the public body designated as the successor agency by the Bill.

Management believes, in consu ltation with legal counsel, that t he obligations of the former redevelopment agency due to the City are valid enforceable obli gations payable by the successor agency trust under the requirements of the Bill. The City’s pos ition on this issue is not a position of settled law and there is considerable legal uncertainty regardi ng this issue. It is reasonably possible that a legal determination may be made at a later date by an ap propriate judicial authority that would resolve this issue unfavorably to the City.

In accordance with the timeline set forth in the Bill (as modif ied by the California Supreme Court on December 29, 2011) all redevelopment agencies in the State of California were dissolved and ceased to operate as a legal entity as of February 1, 2013. Prior to that date, the final seven months of the activity of the redevelopment agency continued to be reported i n the governmental funds of the City included in the fund financial statements as Former Ceres Redev elopment Agency Special Revenue Fund and Low/Moderate Income Housing Fund, Capital Projects Fund and Debt Service Fund.

ITEM 7
City of Ceres, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2021

85 14. SUCCESSOR AGENCY TRUST FOR A SSETS OF FORMER REDEVELOPMENT AGENCY, Continued

The City also reported the Former Stanislaus-Ceres Redevelopmen t Commission Special Revenue Fund and Low/Moderate Income Housing Fund, Capital Projects Fund and Debt Service Fund.

After the date of dissolution, the assets and activities of the dissolved redevelopment agency are reported in a fiduciary fund (private-purpose trust fund) in the financial statements of the City. The transfer of the assets and liabilities of the former redevelopment agency as of February 1, 2013 (effectively the same date as January 31, 2013) from gov ernmental funds of the City t o fiduciary funds was reported in the governmental funds as an extraordinary loss (or gain) in the governmental fund financial statements. The receipt of these assets and li abilities as of January 31, 2013 was reported in the private-purpose trust fund as an extraordinary gain (or loss).

Because of the different measurement focus of the governmental funds ( current financial resources measurement focus) and the measurement focus of the trust funds ( economic resources measurement focus), the extraordinary loss (gain) recognized in the governmental funds was not the same amount as the extraordinary gain (loss) that was recognized in the fiduciary fund financial statements.

Loans and notes receivable

Loans and notes receivable for the year ended June 30, 2021 for the Successor Agency, consisted of the following:

Beginning Ending
Description July 1, 2020 Additions (Deletions) June 30, 2021 First-Time Homebuyer Loans 6,600$ -$ -$ 6,600$ Housing Rehabilitation Loans:

Home Exterior Grant Program 16,624 - - 16,624 2004 Walnut 96,772 - - 96,772 Low Income Deferred Loans 24,250 - - 24,250 River Crest 600,000 - - 600,000 Habitat for Humanity Loans 56,353 - - 56,353 Broad Acres 168,272 - - 168,272 Total Housing Rehabilitation Loans 962,271 - - 962,271 Whitmore Oaks 612,500 - - 612,500 Della Tiara 633,000 - - 633,000 Total loans receivable 2,214,371$ -$ -$ 2,214,371$

ITEM 7
City of Ceres, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2021

86 14. SUCCESSOR AGENCY TRUST FOR A SSETS OF FORMER REDEVELOPMENT AGENCY, Continued

The following is a summary of the loans and notes receivable outstanding as of June 30, 2021:

First-Time Homebuyer Loans

Housing Rehabilitation Loans

The City administers various housing rehabilitation loan progra ms that used the former CRA 20% Set Aside funds. Under these programs, individuals with incomes below a certain level are eligible to receive low interest, variable term loans, secured by deeds of trust for rehabilitation work on their homes. Interest rates may vary from 0% to 3%. The loan repayments may be amortized over the life of the loans, deferred or a combination of both. Total rehabilitation loans outstanding at June 30, 2021 were $962,271.

Whitmore Oaks

The Whitmore Oaks loan was made to assist the developer with the costs to develop and construct a 53 unit apartment complex for seniors. The former CRA provided a loan of $612,500 and the City, through the State’s HOME Investment Partnership Program, provided a loan of up to $865,361. Loan provisions require the apartment complex pro vide not less than eleven affo rdable housing units to be rented to qualified very-low and low income persons and families. The CRA loan carries an interest rate of 3% starting 2015 and the note is payable in full in 2057. The HOME loan carries an interest rate of 3% starting in 2027 and the note is payable in full in 2042. The a mount outstanding at June 30, 2021 was $612,500.

ACLC

The CRA provided a loan to Asociacion Campesina “Lazaro Cardena s” (ACLC) to assist in the acquisition and rehabilitation of a 46 unit affordable apartment complex in the City. This project will preserve the 46 units of affordable housing stock in the City. This project was funded through the former CRA Low/Mod housing funds. The interest rate on the loan is 3% simple interest and the loan is deferred for 55 years. The amount outstanding at June 30, 2021 was $0.

Della Tiara

ITEM 7
City of Ceres, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2021

87 14. SUCCESSOR AGENCY TRUST FOR A SSETS OF FORMER REDEVELOPMENT AGENCY, Continued

Long-term Liabilities

The following is a summary of changes in long-term debt for fiduciary activities for the year ended June 30, 2021:

Balance Transfers/ Balance Due Within
July 1, 2020 Additions Retirements June 30, 2021 One Year Fiduciary Activities:
2000 SCRC Tax Allocation Bonds 850,000$ - $ (55,000)$ 795,000 $ 60,000 $ 2015 Successor CRA Tax Allocation
Refunding Bonds 7,010,000 - (315,000) 6,695,000 325,000 Bond premium 196,313 (12,270) 184,043 12,270 2020 CRA Non-Housing Refunding
Tax Allocation Bonds 20,615,000 - (1,165,000) 19,450,000 1,015,000 Bond premium 4,002,326 - (250,145) 3,752,181 250,145 Total fiduciary activities 32,673,639$ -$ (1,797,415)$ 30,876,224$ 1,662,415$

2000 SCRC Tax Allocation Bonds – Original Issue $1,440,000

On May 16, 2000, the SCRC issued tax allocation bonds for the p urpose of financing a portion of the costs of the Stanislaus/Ceres Re development Project. The bonds are payable from and secured by the tax revenues to be derived from the project area. The bonds mat ure annually through 2030, in amounts ranging from $20,000 to $105,000.

Interest rates vary from 4.65% to a maximum of 6.70% and are pa yable semiannually on May 1 and November 1. The bonds maturing before November 1, 2010, are not subject to optional redemption prior to their stated maturities. Bonds maturing on or after November 1, 2010, are subject to redemption in whole or in part on any interest payment date. Redemption inclu des a premium of 2% commencing on November 1, 2010, and reduced by 1% on each November 1 thereafter.

2015 Successor Agency to the Ceres Redevelopment Agency Tax Allocation Refunding Bonds

On June 17, 2015, the Successor Agency to the CRA issued the CR A Project Area No. 1 Non-Housing bonds. The proceeds will be used to refund and defease the 2003 CRA Tax Allocation Bonds. The Non- Housing Bonds are payable from and secured by Tax Revenues allo cated to the CRA from the Project Area. Interest on the bonds will be payable on May 1 and November 1 of each year. Non-Housing Bonds maturing on or before November 1, 2020, will not be subject to redemption prior to their stated maturity.

ITEM 7
City of Ceres, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2021

88 14. SUCCESSOR AGENCY TRUST FOR A SSETS OF FORMER REDEVELOPMENT AGENCY, Continued

2020 CRA Non-Housing Tax Allocation Refunding Bonds – Original Issue $20,615,000

On February 25, 2020, the City issued $20,615,000 principal amo unt of 2021 CRA Non-Housing Tax Allocation Refunding Bonds to refund the outstanding principal balance of $26,105,000 for the 2006 CRA Non-Housing Tax Allocation Bonds and $850,000 for the 2006 CRA Housing Tax Allocation Bonds. The reacquisition price did not exceed the net carrying amount of the old debt. This refunding decreased its total debts se rvice payments by $9,430,620 and to obtain an economic gain (difference between the present values of the debt service payments on the old and new debt) of $7,346,661.

Arbitrage

The Tax Reform Act of 1986 instituted certain arbitrage restrictions with respect to the issuance of tax- exempt bonds after August 31, 1986 . Arbitrage regulations deal with the investment of all tax-exempt bond proceeds at an interest yield greater than the interest yi eld to bondholders. Generally, all interest paid to bondholders can be retroactively rendered taxable if applicable rebates are not reported and paid to the Internal Revenue Service (IRS) at least every five years . The City performed calculations of excess investment earnings on various bonds and financings and at June 30, 2021, there were no arbitrage liabilities.

ITEM 7
City of Ceres, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2021

89 14. SUCCESSOR AGENCY TRUST FOR A SSETS OF FORMER REDEVELOPMENT AGENCY, Continued

Future debt service at June 30, 2021, is as follows for fiduciary debt:

Year Ending
June 30,
Principal Interest Principal Interest Principal Interest 2022 60,000 $ 51,105 $ 325,000 $ 227,825 $ 1,015,000 $ 767,850 $ 2023 60,000 47,115 335,000 278,275 1,040,000 737,400 2024 65,000 42,959 350,000 293,000 1,080,000 695,800 2025 70,000 38,470 370,000 275,000 1,125,000 652,600 2026 75,000 33,649 390,000 256,000 1,175,000 607,600 2021-2031 465,000 82,243 2,200,000 780,141 6,525,000 2,295,400 2032-2036 - - 2,725,000 154,016 7,490,000 1,037,800 2037-2041 - - - - - - Total 795,000 $ 295,541$ 6, 695,000$ 2, 264,257$ 19,450,000 $ 6,794,450 $ Due within one year 60,000$ 51,105 $ 325,000 $ 227,825 $ 1,015,000 $ 767,850 $ Due after one year 735,000 244,436 6,370,000 2, 036,432 18,435,000 6,026,600 Total 795,000 $ 295,541$ 6, 695,000$ 2, 264,257$ 19,450,000 $ 6,794,450 $ Year Ending
June 30,
Principal Interest Principal Interest Principal Interest 2022 12,270 $ - $ 250,145$ - $ 1,662,415$ 1,046,780$ 2023 12,270 - 250,145 - 1,697,415 1,062,790 2024 12,270 - 250,145 - 1,757,415 1,031,759 2025 12,270 - 250,145 - 1,827,415 966,070 2026 12,270 - 250,145 - 1,902,415 897,249 2021-2031 61,350 - 1,250,727 - 10,502,077 3,157,784 2032-2036 61,347 - 1,250,725 - 11,527,072 1,191,816 2037-2041 - - - - - - Total 184,047$ -$ 3,752,177$ -$ 30,876,224$ 9,354,248$ Due within one year 12,270$ -$ 250,145$ -$ 1,662,415$ 1,046,780$ Due after one year 171,777 - 3,502,032 - 29,213,809 9,354,248 Total 184,047$ -$ 3,752,177$ -$ 30,876,224$ 10,401,028$ 2020 CRA Non-Housing
Refunding Tax Allocation
Bonds
2000 SCRC Tax Allocation
Bonds
2015 CRA Tax Allocation
Refunding Bonds
Premium2020 CRA Non-Housing
Refunding Bonds
Premium
2015 CRA Tax Allocation
Bonds
Refunding Tax Allocation
Totals

ITEM 7
City of Ceres, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2021

90 14. SUCCESSOR AGENCY TRUST FOR A SSETS OF FORMER REDEVELOPMENT AGENCY, Continued

Activity for advances for the year ended June 30, 2021, was as follows:

Advances to Advances from
Other Funds Other Funds
Governmental Activities
Major Funds:

General Fund 1,954,281 $ - $
Total Major Funds 1,954,281 -
Total Governmental Activities 1,954,281 - Fiduciary Activities:

Private Purpose Trust Funds:

Former Ceres Redevelopment Agency
Non-Housing - 1,422,787
Former Stanislaus - Ceres Redevelopment
Commission Successor Agency Non-Housing - 531,494 Total Private Purpose Trust Funds - 1,954,281 Total Fiduciary Activities - 1,954,281 Totals 1,954,281 $ 1,954,281 $

Advances from the General Fund to the Former Redevelopment Agency Fund were for Redevelopment start-up costs.

15. COMMITMENTS AND CONTINGENCIES

The City is a party to claims and lawsuits arising in the ordin ary course of business. The City’s management and legal council are of the opinion that the ultima te liability, if any, arising from these claims will not have material adverse impact on the financial position of the City. The City participates in a number of federal and state assisted grant programs. These programs are subject to program compliance audits by the grantors. The amount, if any, of expenditures which may be disallowed by the granting agencies cannot be determined at this time although th e City expects such amounts, if any, to be immaterial.

16. NEW ACCOUNTING PRONOUNCEMENTS

The GASB has issued Statement No. 87, "Leases." The requirements of this Statement are effective for reporting periods beginning after December 15, 2020. The object ive of this Statement is to better meet the information needs of financial statement users by improving accounting and financial reporting for leases by governments. This Statement increases the usefulness of governments’ financial statements by requiring recognition of certain lease assets and liabilities f or leases that previously were classified as operating leases and recognized as inflows of resources or outflows of resources based on the payment provisions of the contract. It est ablishes a single model for lease accounting based on the foundational principle that leases are financings of the right to use an underlying asset.

ITEM 7
City of Ceres, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2021

91 16. NEW ACCOUNTING PRONOUNCEMENTS, Continued

Under this Statement, a lessee is required to recognize a lease liability and an intangible right-to-use lease asset, and a lessor is required to recognize a lease rece ivable and a deferred inflow of resources, thereby enhancing the relevance and consistency of information about governments’ leasing activities.

The City will implement this statement, as applicable, to its financial statements for the year ending June 30, 2022.

The GASB has issued Statement No. 89, "Accounting for Interest Cost Incurred before the End of a Construction Period." The requirements of this Statement are effective for reporting periods beginning after December 15, 2020. Earlier ap plication is encouraged. The objectives of this Statement are (1) to enhance the relevance and comparability of information about ca pital assets and the cost of borrowing for a reporting period and (2) to simplify accounting for inter est cost incurred before the end of a construction period. The City will implement this statement, as applicable, to its financial statements for the year ending June 30, 2022.

The GASB has issued Statement No. 91, " Conduit Debt Obligations ." The requirements of this Statement are effective for reporting periods beginning after December 15, 2020. Earlier application is encouraged. The primary objectives of this Statement are to provide a single method of reporting conduit debt obligations by issuers and eliminate diversity in practice associated with (1) commitments extended by issuers, (2) arrangements associated with conduit debt oblig ations, and (3) related note disclosures.

This Statement achieves those objectives by clarifying the exis ting definition of a conduit debt obligation; establishing that a conduit debt obligation is not a liability of the issuer; establishing standards for accounting and financial reporting of additional commitments and voluntary commitments extended by issuers and arrangements associated with conduit debt obliga tions; and improving required note disclosures. The City will implement this statement, as applicable, to its financial statements for the year ending June 30, 2023.

The GASB has issued statement No. 92, “ Omnibus 2020” . T h e o b j e c t i v e s o f t h i s S t a t e m e n t a r e t o enhance comparability in accounting and financial reporting and to improve the consistency of authoritative literature by addressing practice issues that have been identified during implementation and application of certain GASB Statements. The City will implement this statement, as applicable, to its financial statements for the year ending June 30, 2022.

The GASB has issued statement No. 93, “ Replacement of Interbank Offered Rates”. The objective of this Statement is to address the accounting and financial reporting effects that result from the replacement of IBORs with other reference rates in order to preserve the re liability, relevance, consistency, and comparability of reported info rmation. The City will implement this statement, as applicable, to its financial statements for the year ending June 30, 2022.

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

ITEM 7
City of Ceres, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2021

92 16. NEW ACCOUNTING PRONOUNCEMENTS, Continued

The GASB has issued statement No. 96, “Subscription-Based Information Technology Arrangements”.

The objective of this Statement is to better meet the information needs of financial statement users by (a) establishing uniform accounting and financial reporting requirements for SBITAs; (b) improving the comparability of financial statements among governments that have entered into SBITAs; and (c) enhancing the understandability, reliability, relevance, and co nsistency of informa tion about SBITAs.

The City will implement this statement, as applicable, to its financial statements for the year ending June 30, 2023.

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

ITEM 7

REQUIRED SUPPLEMENTARY INFORMATION
93 ITEM 7
City of Ceres, California
Required Supplementary Information - Schedule of Contributions Last 10 Fiscal Years*
2021 2020 2019 2018 2017 2016
Contractually required contribution (actuarially
determined) 5,281,755$ 5,036,102 $ 4,265,800 $ 3,831,916 $ 3,554,625 $ 3,393,450 $ Contributions in relation to the actuarially determined contribution
s 5,281,755 5,036,102 4,265,800 3,831,916 3,554,625 3,393,450 Contribution deficiency (excess) -$ -$ -$ -$ -$ -$ Covered-employee payroll 14,028,282$ 12,808,104$ 11,548,404$ 12,342,021$ 13,228,342$ 13,055,073$ Contribution as a percentage of covered-employee
payroll 37.65% 39.32% 36.94% 31.05% 26.87% 25.99%
Notes to Schedule
1) Covered employee payroll represents compensation earnable and pensionable compensation. Only compensation earnable and pensionable compensation that would possibly go into the determination of retirement benefits are included. *Additional years will be presented as they become available. 94 ITEM 7
City of Ceres, California
Required Supplementary Information - Schedule of the City's Proportionate Share of the Net Pension Liability
Last 10 Fiscal Years*
2021 2020 2019 2018 2017 2016
Plan's Proportion of the Net Pension Liability/(Asset) 5.7019% 5.5842% 5.1682% 5.5554% 5.8514% 5.6629% Plan's Proportionate Share of the Net Pension
Liability/(Asset) 46,489,029$ 36,868,449 $ 33,371,414 $ 36,959,387 $ 43,142,269 $ 16,714,375 $ Plan's Covered-Employee Payroll 14,028,282$ 12,808,104$ 11,548,404$ 12,342,021$ 13,228,342$ 13,055,073$ Plan's Proportionate Share of the Net Pension
Liability/(Asset) as a Percentage of its Covered-Employe e
Payroll 331.40% 287.90% 288.97% 299.46% 326.14% 128.03% Plan's Proportionate Share of the Fiduciary Net Position as a Percentage of the Plan’s Total Pension Liabilit
y 73.00% 77.00% 76.70% 75.00% 70.60% 86.10%
Plan's Proportionate Share of Aggregate Employer
Contribution 5,281,755$ 5,036,102 $ 4,265,800 $ 3,831,916 $ 3,554,625 $ 3,393,450 $ Notes to Schedule
1) Covered employee payroll represents compensation earnable and pensionable compensation. Only compensation earnable and pensionable compensation that would possibly go into the determination of retirement benefits are included. *Additional years will be presented as they become available. 95 ITEM 7
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96 ITEM 7

COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES
97 ITEM 7
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98 ITEM 7
Fund
Street Tree
Storm Drain Benefit Districts
Brown Annex - Public Safety Mitigation
Eastgate Street & Landscape Benefit District
AB939 Source Reduction/Recycle
Neighborhood Park Fees
BEGIN Grant
Program Income
Measure H
State Gas Tax
Prop 1B
SLESF Grant
Abandoned Vehicle Abatement
Seized Property
Downtown Revitalization
Street-Light and Landscape District
(continued)
This fund contains revenues obtained from the sale of forfeited vehicle. Funds are used for law enforcement supplies and equipment.

The City's share of the State gas tax allocations are recorded in this fund. These funds can be used for any street purpose. The City charges the street department to the gas tax fund.

This fund contains revenues obtained from the sale of forfeited property in drug related cases. Funds are used for law enforcement equipment.

Revenues for this fund come from assessments to downtown businesses. These funds are used to improve the downtown area with such programs as façade and streetscape im
provements and promotional events
This fund is used to account for financial activity relating to the City-wide 1972 Act Landscaping and Lighting District. Revenues include assessment to the property owners within the district and expenditures related to the maintenance and upkeep of the street lights, median landscaping, and landscaping adjacent to sound walls Fund established for the Program Income from the State Housing & Community Development Building Equity & Growth in Neighborhoods grant.

NON-MAJOR GOVERNMENTAL FUNDS
Description
To account for public safety mitigation fees collected for the Brown Annexation area; to provide funding for police salaries.

To account for street and landscape improvements made in the Eastgate subdivisions, funded by fees collected on property developed within the benefited area.

This fund is to account for funds received to be used to inform citizens of recycling requirements.

Fees collected from each new dwelling constructed, to be used for planning, acquisition, improvement, and expansion of neighborhood parks.

Fees collected from developers to be used by the City for planting trees along City streets and roads in new subdivisions.

These benefit district funds are used to account for developer fees used for the construction of the storm drain systems in the specific districts of WestPointe, Eastgate, Mitchell Road, and North East.

Fund established for State Housing & Community Development Building Equity & Growth in Neighborhoods grant to be utilized for deferred-payment second mortgage loans for down payment assistance to lower to moderate-income first-time homebuyers of new homes in projects with affordability enhanced by local regulatory incentives or barrier reductions.

Voter approved ½-cent retail transaction and use tax (sales tax) for the improvement of police, fire and 9-1-1 emergency response; to fund additional personnel and equipment costs.

State allocation of 2006 Transportation Bond, Local Streets and Roads funding to be utilized for transportation improvements, including maintenance, rehabilitation and construction or as local match for state and federal transportation funds for similar purposes.

Accounts for revenues and expenditures associated with State funds provided as a match for the COPS Universal Hiring Grant.
99 ITEM 7
Fund
Traffic Offender
State Traffic Safety
Used Oil Recycling Grant
American Recovery & Reinvestment Act 2009
Department of Conservation
CMAQ
Community Facilities District
Fire Hydrant Benefit District
Transportation Development Act
Community Center
Local Law Enforcement Block Grant
Public Facilities Fees
Daniel Whitmore House
River Bluff Regional Park
Ceres Community Foundation Accounts for activities related to the Ceres Community Foundation.

Clinton Whitmore Mansion
Measure L
Road Maintenance & Reha
b
SB2 Planning Grants Program Fund
CARES Act
SB2 Planning Grants Program Funds through the State Department of Housing and Community Development (HCD) is designed to provide technical planning assistance monies related to the preparation, adoption, and implementation of plans that streamline housing approvals and lead to the acceleration of housing production.

The Corona Virus Aid, Relief, and Economic Security (CARES) Act was passed by Congress and signed into law on March 27, 2020. It established a $150 billion Coronavirus Relief Fund to provide State, Local, and Tribal governments impacted by the virus outbreak. The U.S. Department of Treasury has made payments from the Fund to States and eligible units of local governments. The payment made to the city are used to cover expense that are necessary expenditures incurred due to the virus and incurred from March 1, 2020 to December 30, 2020.

The City owns the Clinton Whitmore Mansion. These funds are used for operating expenses and improvements.

To account for construction of Ceres River Bluff Regional Park and associated State grant revenues utilized for project.

This fund is used to account for fines as a result of arrests by City officers. These funds can only be used for traffic control devices and maintenance of equipment and supplies for traffic enforcement.

State Department of Conservation grant utilized for promotion of recycling, reuse, and other green initiatives within the City.

To account for the special property taxes levied for the provision of public services (Police, Fire, and Parks).

These funds are collected from developers in the district for the installation of additional fire hydrants because the existing hydrant spacing does not meet City standards.

This fund is used to account for local transportation funds restricted to transit, street, pedestrian, and bike purposes.

To account for operational revenues and expenses of Ceres Community Center.

The City's receipt and expenditures of the federal grants are recorded in these funds.

Expenditures are made to assist in projects that reduce crime and improve public safety.

These fees are received from developers to increase space and improve to City buildings, specifically, Public Safety, Planning, Public Works, and City Hall to mitigate the growth of the City.

Local Roads First Transportation Funding Measure which establishes and implements a on e
half cent transaction and use tax. Funding is to be used for local street and road improvements, arterial street widening, signalization, pedestrian, bicyclist, and drive safety improvements. The tax will expire on March 31, 2042
This fund is to account for grant funds received to be used to inform citizens of oil recycling opportunities and procedures.

This fund is used to account for activities for the projects funded by the American Recovery and Reinvestment Act .

The City owns the Daniel Whitmore Home. It is the oldest house in the City and is now a museum. These funds are used for museum expenses and improvements.

This fund is used to account for Federal funds used for transit and street-related purposes.

NON-MAJOR GOVERNMENTAL FUNDS, Continued
Description
Senate Bill 1, the Road and Repair and Accountability Act of 2017. Funds are used to continue essential road maitenance and rehabilitation projects, safety improvements, repairing and replacing aging bridges, and increasing access and mobility options to the traveling public.

To account for activities of the Police Traffic Unit, including towing/impound fees and State grants utilized for Unit expenditures.
100
ITEM 7
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101
ITEM 7
City of Ceres, California
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2021
Storm Eastgate
Drain Street
Street Benefit Brown Benefit
Tree Districts Annex District AB 939
ASSETS
Cash and investments 101,008$ 817,181 $ 7,053 $ 69,547 $ 281,226 $ Receivables:

Taxes - - - - - Interest 5 38 - 3 13 Intergovernmental - - - - - Loans receivable - - - - - Other receivable - - - - - Due from other funds - - - - - Total assets 101,013$ 817,219$ 7,053$ 69,550$ 281,239$

LIABILITIES, DEFERRED INFLOWS AND FUND BALANCES
Liabilities:

Accounts payable and accrued liabilities -$ -$ -$ -$ -$ Due to other funds - - - - - Total liabilities - - - - - Deferred inflows: Grants - - - - - Total liabilities and deferred inflows - - - - - Fund Balances:

Restricted - 817,219 - 69,550 - Committe
d - - - - - Assigned, reported in:

Special revenue funds 101,013 - 7,053 - 281,239 Unassigned (deficit) - - - - - Total fund balances 101,013 817,219 7,053 69,550 281,239 Total liabilities and fund balances 101,013$ 817,219$ 7,053$ 69,550$ 281,239$ 102
ITEM 7
Program
Neighborhood BEGIN Income Measure H State
Park Fees Grant BEGIN Income Gas Tax SLESF
916,012$ 387,828 $ 228,426 $ 917,899 $ - $ 27,690$ - - - - - - 43 16 11 42 - - - - - - - - - 409,670 - - - - - - - 837,185 366 - - - - - - - 916,055$ 797,514$ 228,437$ 1,755,126$ 366$ 27,690$ -$ -$ -$ 20,364$ 13,043$ -$ - - - - 92,390 - - - - 20,364 105,433 - - 409,670 - - - - - 409,670 - 20,364 105,433 - - 387,844 228,437 1,734,762 27,690 - - - - - - 916,055 - - - - - - - - - (105,067) - 916,055 387,844 228,437 1,734,762 (105,067) 27,690 916,055$ 797,514$ 228,437$ 1,755,126$ 366$ 27,690$ (continued)
103
ITEM 7
City of Ceres, California
Combining Balance Sheet
Nonmajor Special Revenue Funds, Continued
June 30, 2021
Abandoned Street Light-
Vehicle Seized Downtow n Landscape Traffic
Abatement Property Revitalizatio n District Offender
ASSETS
Cash and investments 82,910$ 59,762 $ 80,644 $ - $ 45,580$ Receivables:

Taxes - - - - - Interest 4 3 4 - - Intergovernmental - - - - - Loans receivable - - - - - Other receivable - - - 4,704 - Due from other funds - - - - - Total assets 82,914$ 59,765$ 80,648$ 4,704$ 45,580$

LIABILITIES AND FUND BALANCES
Liabilities:

Accounts payable and accrued liabilities -$ 44,092$ 979$ 21,852$ -$ Due to other funds - - - 170,390 - Total liabilities - 44,092 979 192,242 - Deferred inflows: Grants - - - - - Total liabilities and deferred inflows - 44,092 979 192,242 - Fund Balances:

Restricted - - - - - Committe
d - - - - - Assigned, reported in:

Special revenue funds 82,914 15,673 79,669 - 45,580 Unassigned (deficit) - - - (187,538) - Total fund balances 82,914 15,673 79,669 (187,538) 45,580 Total liabilities and fund balances 82,914$ 59,765$ 80,648$ 4,704$ 45,580$ 104
ITEM 7
Dept of Community Fire Hydrant
Traffic Used Oil Conservatio n Facilities Benefi t
Safety Grants Grant CMAQ Distric t District
-$ 27,267$ 68,419$ -$ 8,245$ 128,697$ - - - - - - - 1 3 - 27 - - - - - - - - - - - - - 23,694 - - - 3,810 - - - - - - 23,694$ 27,268$ 68,422$ -$ 12,082$ 128,697$ -$ -$ -$ 230,189$ -$ -$ 23,694 - - 19,992 - - 23,694 - - 250,181 - - - - - - - - 23,694 - - 250,181 - - - - 68,422 - - 128,697 - - - - 12,082 - -
27,268 - - - - - - - (250,181) - - - 27,268 68,422 (250,181) 12,082 128,697 23,694$ 27,268$ 68,422$ -$ 12,082$ 128,697$ (continued)
105
ITEM 7
City of Ceres, California
Combining Balance Sheet
Nonmajor Governmental Funds, Continued
June 30, 2021
Transportation Public Daniel
Development Community Facilities Whitmore
Act Center LLEBG Fees House
ASSETS
Cash and investments 48,064$ -$ 43,656 $ 2,455,535$ (76)$ Receivables:

Taxes - - - - - Interest - - 1 115 - Intergovernmental - - - - - Loans receivable - - - - - Other receivable - - - - - Due from other funds - - - - - Total assets 48,064$ -$ 43,657 $ 2,455,650$ (76)$

LIABILITIES AND FUND BALANCES
Liabilities:

Accounts payable -$ 5,035$ - $ -$ 45$ Deposits payable - 82,276 - - - Due to other funds 21,014 1,847,536 - - - Advances from other funds - - - - - Total liabilities 21,014 1,934,847 - - 45 Deferred inflows: Grants - - - - - Total liabilities and deferred inflows 21,014 1,934,847 - - 45 Fund Balances:

Restricted 27,050
- - - - Committed - - - - - Assigned, reported in:

Special revenue funds - - 43,657 2,455,650 - Unassigned (deficit) - (1,934,847) - - (121) Total fund balances 27,050 (1,934,847) 43,657 2,455,650 (121) Total liabilities and fund balances 48,064$ -$ 43,657 $ 2,455,650$ (76)$ 106
ITEM 7
RiverBluff Ceres Clinton Road SB2 Planning
Regional Community Whitmore Maintenance Grants Program
Park Foundation Mansion Measure L and Rehab Fund CARESA Act -$ 143,703$ -$ 2,952,372$ 838,897 -$ 601$ 10,738,146$ - - - - - - - - - 7 - 125 38 - - 499 - - - 410,409 - - - 410,409 - - - - - - - 409,670 - - - - 87,520 - - 957,279 - - - - - - - - -$ 143,710$ -$ 3,362,906$ 926,455$ -$ 601$ 12,516,003$ -$ 959$ 28$ 182,854$ 100,276$ -$ -$ 619,716$ - - - - - - - 82,276 24,546 - 74,213 - - 263 - 2,274,038 - - - - - - - - 24,546 959 74,241 182,854 100,276 263 - 2,976,030 - - - - - - - 409,670 24,546 959 74,241 182,854 100,276 263 - 3,385,700 - 142,751 - 3,180,052 826,179 - - 7,638,653 - - - - - - - 12,082 - - - - - - 601 4,056,372 (24,546) - (74,241) - - (263) - (2,576,804) (24,546) 142,751 (74,241) 3,180,052 826,179 (263) 601 9,130,303 -$ 143,710$ -$ 3,362,906$ 926,455$ -$ 601$ 12,516,003$ (concluded)
Totals
107
ITEM 7
City of Ceres, California
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds
For the year ended June 30, 2021
Storm Eastgate
Drain Street
Street Benefit Brown Benefit
Tree Districts Annex District
REVENUES:

Property and other taxes -$ 13,962$ -$ -$ Licenses and permits - - - - Fines, forfeitures and penalties - - - - Charges for services - - - - Intergovernmental - - - - Use of money and property 754 6,924 809 518 Other revenues - - - - Total revenues 754 20,886 809 518 EXPENDITURES:

Current:

General government - - - - Public safety - - - - Engineering and Transportation - 373,286 - - Public works - - - - Community services - - - - Economic development - - - - Capital outlay - - - - Debt service:

Principal - - - - Interest and fiscal charges - - - - Total expenditures - 373,286 - -

REVENUES OVER (UNDER)
EXPENDITURES 754 (352,400) 809 518 OTHER FINANCING SOURCES (USES):

Transfers in - - - - Transfers out - - - - Total other financing
sources and uses - - - -

REVENUES AND OTHER FINANCIN
G

SOURCES OVER (UNDER)

EXPENDITURES AND OTHER
FINANCING (USES) 754 (352,400) 809 518 FUND BALANCES (DEFICIT):

Beginning of year 100,259 1,169,619 6,244 69,032 End of year 101,013$ 817,219$ 7,053$ 69,550$ 108
ITEM 7
Program
Neighborhood BEGIN Income State
AB 939 Park Fees Grant BEGIN Measure H Gas Tax SLESF
-$ - $ - $ - $ 4,529,152$ - $ - $ - - - - - - - - - - - - - - - 22,308 - - - - - 6,075 - 309,008 - - 1,055,242 109,637 2,206 8,848 1,832 1,705 5,817 199 - - - - - - 1,440 - 8,281 31,156 310,840 1,705 4,534,969 1,056,881 109,637 - - - - - - - - - - - 3,628,520 - 138,683 46,330 - - - - 6,472 - - 9,453 - - - 890,702 - - - - - - - - - - - - - - - - 852,673 - - 0 1,678 - - - - - - 106,409 - - - - - - 12,570 - 46,330 862,126 - - 3,628,520 1,017,831 138,683 (38,049) (830,970) 310,840 1,705 906,449 39,050 (29,046) - - - - 8,336 229 - - - - (152,000) - - - - - - (143,664) 229 - (38,049) (830,970) 310,840 1,705 762,785 39,279 (29,046) 319,288 1,747,025 77,004 226,732 971,977 (144,346) 56,736 281,239$ 916,055$ 387,844$ 228,437$ 1,734,762$ (105,067)$ 27,690$ (continued)
109
ITEM 7
City of Ceres, California
Combining Statement of Revenues, Expenditures and Changes in Fund Balances, Continued Nonmajor Special Revenue Funds
For the year ended June 30, 2021
Abandoned Street Light-
Vehicle Seized Downtown Landscape Traffic
Abatement Property Revitalization District Offender
REVENUES:

Property and other taxes - $ -$ -$ 434,542$ -$ Licenses and permits - - - - - Fines, forfeitures and penalties - - - - - Charges for services - - 8,640 - 54,123 Intergovernmental 46,143 - - - - Use of money and property 574 492 625 - - Other revenues - - - - - Total revenues 46,717 492 9,265 434,542 54,123 EXPENDITURES:

Current:

General government - - - - - Public safety 36,637 - - - 60,271 Engineering and Transportation - - - - - Public works - - - 212,462 - Community services - - - 335,313 - Economic development - - 16,989 - - Capital outlay - - - - - Debt service:

Principal - - - - - Interest and fiscal charges - - - - - Total expenditures 36,637 - 16,989 547,775 60,271

REVENUES OVER (UNDER)
EXPENDITURES 10,080 492 (7,724) (113,233) (6,148) OTHER FINANCING SOURCES (USES):

Transfers in - - - - - Transfers out - - - - - Total other financing
sources and uses - - - - -

REVENUES AND OTHER FINANCIN
G

SOURCES OVER (UNDER)

EXPENDITURES AND OTHER
FINANCING (USES) 10,080 492 (7,724) (113,233) (6,148) FUND BALANCES (DEFICIT):

Beginning of year 72,834 15,181 87,393 (74,305) 51,728 End of year 82,914 $ 15,673$ 79,669$ (187,538)$ 45,580$ 110
ITEM 7
Dept of Community Fire Hydrant
Traffic Used Oil Conservation Facilities Benefit
Safety Grants Grant CMAQ District District
-$ -$ -$ -$ 678,797$ -$ - - - - - - 57,485 - - - - - - - - - - - - - - 1,334,043 - - - 222 526 - 1,750 - - - - - - - 57,485 222 526 1,334,043 680,547 - - - - - - - 57,485 - - - - - - - 3,961 45,714 - - - 12,530 - - 7,359 - - - - - - - - - - - - - - - - 909,010 - - - - - - - - - - - - - - 57,485 12,530 3,961 954,724 7,359 - - (12,308) (3,435) 379,319 673,188 - - - - - - - - - - - (671,438) - - - - - (671,438) - - (12,308) (3,435) 379,319 1,750 - - 39,576 71,857 (629,500) 10,332 128,697 -$ 27,268$ 68,422$ (250,181)$ 12,082$ 128,697$ (continued)
111
ITEM 7
City of Ceres, California
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds, Continued
For the year ended June 30, 2021
Transportation Public Daniel
Development Community Facilities Whitmor e
Act Center LLEBG Fees House
REVENUES:

Property and other taxes -$ -$ -$ -$ -$ Fines, forfeitures and penalties - - - - - Charges for services - 39,047 - 18,497 - Intergovernmental - - 40,255 - - Use of money and property - - 229 18,801 - Other revenues - - - - - Total revenues - 39,047 40,484 37,298 - EXPENDITURES:

Current:

General government - - - - - Public safety - - 40,255 44,044 - Engineering and Transportation - - - - - Public works 3,077 - - - - Community services - 266,309 - - 6,793 Economic development - - - - - Capital outlay - - - 133,506 - Debt service:

Principal - - - - - Interest and fiscal charges - - - - - Total expenditures 3,077 266,309 40,255 177,550 6,793

REVENUES OVER (UNDER)
EXPENDITURES (3,077) (227,262) 229 (140,252) (6,793) OTHER FINANCING SOURCES (USES):

Transfers in - 62 - 6,792 Transfers out - - - - - Total other financin
g
sources and uses - 62 - - 6,792

REVENUES AND OTHER FINANCING

SOURCES OVER (UNDER)

EXPENDITURES AND OTHE
R
FINANCING (USES) (3,077) (227,200) 229 (140,252) (1) FUND BALANCES (DEFICIT):

Beginning of year 30,127 (1,707,647) 43,428 2,595,902 (120) End of year 27,050$ (1,934,847)$ 43,657 $ 2,455,650$ (121) $ 112
ITEM 7
RiverBluff Ceres Clinto n Road SB2 Planning
Regional Community Whitmore Maintenance Grants Program
Park Foundation Mansion Measure L and Rehab Fund CARES Act Totals - $ - $ - $ -$ - $ - $ - $ 5,656,453$ - - - - - - - 57,485 256 - - - - - - 142,871 - - - 2,837,874 890,937 - 2,233,738 8,862,952 - 1,079 - 15,507 4,677 - - 74,094 - 810 - - - - - 2,250 256 1,889 - 2,853,381 895,614 - 2,233,738 14,796,105 - 3,000 - - - - 2,197,446 2,200,446 - - - - - - - 4,005,895 - - - - - - - 475,763 - - - 34,380 - 263 - 1,170,226 - - 23,914 - - - - 632,329 - - - - - - - 16,989 - - - 2,312,089 1,031,825 - - 5,240,781 - - - 106,409 - - - - - - - 12,570 - 3,000 23,914 2,346,469 1,031,825 263 2,197,446 13,861,408 256 (1,111) (23,914) 506,912 (136,211) (263) 36,292 934,697 - - - - - - - 15,419 - - - - - - (35,691) (859,129) - - - - - - (35,691) (843,710) 256 (1,111) (23,914) 506,912 (136,211) (263) 601 90,987 (24,802) 143,862 (50,327) 2,673,140 962,390 - - 9,039,316 (24,546) $ 142,751 $ (74,241) $ 3,180,052$ 826,179 $ (263)$ 601 $ 9,130,303$ (concluded)
113
ITEM 7
City of Ceres, California
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual Street Tree Special Revenue Fund
For the year ended June 30, 2021
Variance w/Final
Positive
Original Final Actual (Negative)
REVENUES:

Use of money and property 900$ 900 $ 754$ (146)$ Total revenues 900 900 754 (146) EXPENDITURES:

Current:

Community services - - - - Total expenditures - - - -

REVENUES OVER (UNDER)
EXPENDITURES 900 900 754 (146) Net change in fund balances 900 900 754 (146) FUND BALANCES:

Beginning of year 100,259 100,259 100,259 - End of year 101,159$ 101,159 $ 101,013 $ (146) $ Budgeted Amounts
114
ITEM 7
City of Ceres, California
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual Storm Drain Benefit Districts Special Revenue Fund
For the year ended June 30, 2021
Variance w/Final
Positive
Original Final Actual (Negative)
REVENUES:

Property and other taxes 13,000$ 13,000$ 13,962$ 962$ Use of money and property 21,520 21,520 6,924 (14,596) Total revenues 34,520 34,520 20,886 (13,634) EXPENDITURES:

Engineering and Transportation - 461,504 373,286 88,218 Total expenditures - 461,504 373,286 88,218

REVENUES OVER (UNDER)
EXPENDITURES 34,520 (426,984) (352,400) 74,584 Net change in fund balances 34,520 (426,984) (352,400) 74,584 FUND BALANCES:

Beginning of year 1,169,619 1,169,619 1,169,619 - End of year 1,204,139$ 742,635 $ 817,219 $ 74,584 $ Budgeted Amounts
115
ITEM 7
City of Ceres, California
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual Brown Annex Special Revenue Fund
For the year ended June 30, 2021
Variance w/Final
Positive
Original Final Actual (Negative)
REVENUES:

Charges for services 3,973$ 3,973$ -$ (3,973)$ Use of money and property 180 180 809 629 Total revenues 4,153 4,153 809 (3,344) EXPENDITURES:

Current:

General government - - - - Total expenditures - - - -

REVENUES OVER (UNDER)
EXPENDITURES 4,153 4,153 809 (3,344) OTHER FINANCING SOURCES (USES):

Transfers in - - - - Transfers out - - - - Total other financing sources (uses) - - - - Net change in fund balances 4,153 4,153 809 (3,344) FUND BALANCES:

Beginning of year 6,244 6,244 6,244 - End of year 10,397$ 10,397$ 7,053$ (3,344)$ Budgeted Amounts
116
ITEM 7
City of Ceres, California
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual Eastgate Street Benefit District Special Revenue Fund
For the year ended June 30, 2021
Variance w/Final
Positive
Original Final Actual (Negative)
REVENUES:

Property and other taxes -$ -$ -$ -$ Use of money and property 1,000 1,000 518 (482) Total revenues 1,000 1,000 518 (482) EXPENDITURES:

Current:

Engineering and Transportation 0 14,076 - 14,076 Total expenditures - 14,076 - 14,076

REVENUES OVER (UNDER)
EXPENDITURES 1,000 (13,076) 518 13,594 Net change in fund balances 1,000 (13,076) 518 13,594 FUND BALANCES:

Beginning of year 69,032 69,032 69,032 - End of year 70,032$ 55,956$ 69,550$ 13,594$ Budgeted Amounts
117
ITEM 7
City of Ceres, California
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual AB 939 Special Revenue Fund
For the year ended June 30, 2021
Variance w/Final
Positive
Original Final Actual (Negative)
REVENUES:

Intergovernmental -$ - $ 6,075$ 6,075$ Use of money and property 3,500 3,500 2,206 (1,294) Total revenues 3,500 3,500 8,281 4,781 EXPENDITURES:

Current:

Engineering and Transportation 53,203 53,225 46,330 6,895 Total expenditures 53,203 53,225 46,330 6,895

REVENUES OVER (UNDER)
EXPENDITURES (49,703) (49,725) (38,049) 11,676 Net change in fund balances (49,703) (49,725) (38,049) 11,676 FUND BALANCES:

Beginning of year 319,288 319,288 319,288 - End of year 269,585$ 269,563 $ 281,239 $ 11,676 $ Budgeted Amounts
118
ITEM 7
City of Ceres, California
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual Neighborhood Park Fees Special Revenue Fund
For the year ended June 30, 2021
Variance w/Final
Positive
Original Final Actual (Negative)
REVENUES:

Charges for services 151,000$ 151,000$ 22,308$ (128,692)$ Intergovernmental - - - - Use of money and property 19,000 19,000 8,848 (10,152) Total revenues 170,000 170,000 31,156 (138,844) EXPENDITURES:

Current:

General government - - - - Public works 20,550 20,550 9,453 11,097
Capital outlay 25,000 1,813,461 852,673 960,788 Total expenditures 45,550 1,834,011 862,126 971,885

REVENUES OVER (UNDER)
EXPENDITURES 124,450 (1,664,011) (830,970) 833,041 OTHER FINANCING SOURCES (USES):

Transfers in - - - - Transfers out - - - - Total other financing sources (uses) - - - - Net change in fund balances 124,450 (1,664,011) (830,970) 833,041 FUND BALANCES:

Beginning of year 1,747,025 1,747,025 1,747,025 - End of year 1,871,475$ 83,014 $ 916,055 $ 833,041 $ Budgeted Amounts
119
ITEM 7
City of Ceres, California
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual BEGIN Grant Special Revenue Fund
For the year ended June 30, 2021
Variance w/Final
Positive
Original Final Actual (Negative)
REVENUES:

Intergovernmental -$ - $ 309,008$ 309,008 $ Use of money and property 50 50 1,832 1,782 Total revenues 50 50 310,840 310,790 EXPENDITURES:

Current:

Economic development - - - - Total expenditures - - - -

REVENUES OVER (UNDER)
EXPENDITURES 50 50 310,840 310,790 Net change in fund balances 50 50 310,840 310,790 FUND BALANCES:

Beginning of year 77,004 77,004 77,004 - End of year 77,054$ 77,054$ 387,844$ 310,790$ Budgeted Amounts
120
ITEM 7
City of Ceres, California
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual Program Income BEGIN Special Revenue Fund
For the year ended June 30, 2021
Variance w/Final
Positive
Original Final Actual (Negative)
REVENUES:

Intergovernmental -$ - $ - $ - $ Use of money and property 2,200 2,200 1,705 (495) Total revenues 2,200 2,200 1,705 (495) EXPENDITURES:

Current:

Economic development - - - - Total expenditures - - - -

REVENUES OVER (UNDER)
EXPENDITURES 2,200 2,200 1,705 (495) Net change in fund balances 2,200 2,200 1,705 (495) FUND BALANCES:

Beginning of year 226,732 226,732 226,732 - End of year 228,932$ 228,932 $ 228,437 $ (495) $ Budgeted Amounts
121
ITEM 7
City of Ceres, California
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual Measure H Special Revenue Fund
For the year ended June 30, 2021
Variance w/Final
Positive
Original Final Actual (Negative)
REVENUES:

Property and other taxes 3,516,912$ 3,516,912$ 4,529,152$ 1,012,240$ Use of money and property - - 5,817 5,817 Total revenues 3,516,912 3,516,912 4,534,969 1,018,057 EXPENDITURES:

Current:

Public safety 3,676,953 3,726,533 3,628,520 98,013 Capital outlay - - - - Total expenditures 3,676,953 3,726,533 3,628,520 98,013

REVENUES OVER (UNDER)
EXPENDITURES (160,041) (209,621) 906,449 1,116,070 OTHER FINANCING SOURCES (USES):

Transfers in - - 8,336 8,336 Transfers out (152,000) (152,000) (152,000) - Total other financing sources (uses) (152,000) (152,000) (143,664) 8,336 Net change in fund balances (312,041) (361,621) 762,785 1,124,406 FUND BALANCES:

Beginning of year 971,977 971,977 971,977 - End of year 659,936$ 610,356 $ 1,734,762 $ 1,124,406 $ Budgeted Amounts
122
ITEM 7
City of Ceres, California
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual State Gas Tax Special Revenue Fund
For the year ended June 30, 2021
Variance w/Final
Positive
Original Final Actual (Negative)
REVENUES:

Intergovernmental 1,234,115$ 1,234,115 $ 1,055,242 $ (178,873) $ Use of money and property 500 500 199 (301) Other revenues 1,350 1,350 1,440 90
Total revenues 1,235,965 1,235,965 1,056,881 (179,084) EXPENDITURES:

Current:

Engineering and Transportation 7,155 7,155 6,472 683 Public works 1,040,197 1,058,606 890,702 167,904 Capital outlay 0 7,328 1,678 5,650
Total expenditures 1,166,331 1,192,068 1,017,831 174,237

REVENUES OVER (UNDER)
EXPENDITURES 69,634 43,897 39,050 (4,847) OTHER FINANCING SOURCES (USES):

Transfers in - - 229 229 Total other financing sources (uses) - - 229 229 Net change in fund balances 69,634 43,897 39,279 (4,618) FUND BALANCES (DEFICIT):

Beginning of year (144,346) (144,346) (144,346) - End of year (74,712)$ (100,449) $ (105,067) $ (4,618) $ Budgeted Amounts
123
ITEM 7
City of Ceres, California
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual SLESF Special Revenue Fund
For the year ended June 30, 2021
Variance w/Final
Positive
Original Final Actual (Negative)
REVENUES:

Intergovernmental 100,000$ 100,000 $ 109,637$ 9,637$ Total revenues 100,000 100,000 109,637 9,637 EXPENDITURES:

Current:

Public safety - - 138,683 (138,683) Total expenditures - - 138,683 (138,683)

REVENUES OVER (UNDER)
EXPENDITURES 100,000 100,000 (29,046) (129,046) OTHER FINANCING SOURCES (USES):

Transfers out (100,000) (100,000) - 100,000 Total other financing sources (uses) (100,000) (100,000) - 100,000 Net change in fund balances - - (29,046) (29,046) FUND BALANCES:

Beginning of year 56,736 56,736 56,736 - End of year 56,736$ 56,736$ 27,690$ (29,046)$ Budgeted Amounts
124
ITEM 7
City of Ceres, California
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual Abandoned Vehicle Abatement Special Revenue Fund
For the year ended June 30, 2021
Variance w/Final
Positive
Original Final Actual (Negative)
REVENUES:

Intergovernmental 26,900$ 26,900$ 46,143$ 19,243$ Use of money and property 950 950 574 (376) Total revenues 27,850 27,850 46,717 18,867 EXPENDITURES:

Current:

Public safety 66,369 66,369 36,637 29,732
Total expenditures 66,369 66,369 36,637 29,732

REVENUES OVER (UNDER)
EXPENDITURES (38,519) (38,519) 10,080 48,599 Net change in fund balances (38,519) (38,519) 10,080 48,599 FUND BALANCES (DEFICIT):

Beginning of year 72,834 72,834 72,834 - End of year 34,315$ 34,315$ 82,914$ 48,599$ Budgeted Amounts
125
ITEM 7
City of Ceres, California
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual Seized Property Special Revenue Fund
For the year ended June 30, 2021
Variance w/Final
Positive
Original Final Actual (Negative)
REVENUES:

Intergovernmental 1,800$ 1,800$ -$ (1,800)$ Use of money and property 500 500 492 (8) Total revenues 2,300 2,300 492 (1,808) EXPENDITURES:

Current:

Public safety - - - - Total expenditures - - - -

REVENUES OVER (UNDER)
EXPENDITURES 2,300 2,300 492 (1,808) OTHER FINANCING SOURCES (USES):

Transfers in - - - - Transfers out - - - - Total other financing sources (uses) - - - - Net change in fund balances 2,300 2,300 492 (1,808) FUND BALANCES:

Beginning of year 15,181 15,181 15,181 - End of year 17,481$ 17,481$ 15,673$ (1,808)$ Budgeted Amounts
126
ITEM 7
City of Ceres, California
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual Downtown Revitalization Special Revenue Fund
For the year ended June 30, 2021
Variance w/Final
Positive
Original Final Actual (Negative)
REVENUES:

Charges for services 12,800$ 12,800$ 8,640$ (4,160)$ Use of money and property 1,000 1,000 625 (375) Total revenues 13,800 13,800 9,265 (4,535) EXPENDITURES:

Current:

Economic development 68,150 68,150 16,989 51,161 Total expenditures 68,150 68,150 16,989 51,161

REVENUES OVER (UNDER)
EXPENDITURES (54,350) (54,350) (7,724) 46,626 OTHER FINANCING SOURCES (USES):

Transfers out - - - - Total other financing sources (uses) - - - - Net change in fund balances (54,350) (54,350) (7,724) 46,626 FUND BALANCES:

Beginning of year 87,393 87,393 87,393 - End of year 33,043$ 33,043$ 79,669$ 46,626$ Budgeted Amounts
127
ITEM 7
City of Ceres, California
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual Street-Light and Landscape District Special Revenue Fund For the year ended June 30, 2021
Variance w/Final
Positive
Original Final Actual (Negative)
REVENUES:

Property and other taxes 439,296$ 439,296$ 434,542$ (4,754)$ Use of money and property - - - - Total revenues 439,296 439,296 434,542 (4,754) EXPENDITURES:

Current:

Public works 218,256 218,256 212,462 5,794
Community services 286,340 286,340 335,313 (48,973) Total expenditures 504,596 504,596 547,775 (43,179)

REVENUES OVER (UNDER)
EXPENDITURES (65,300) (65,300) (113,233) (47,933) Net change in fund balances (65,300) (65,300) (113,233) (47,933) FUND BALANCES (DEFICIT):

Beginning of year (74,305) (74,305) (74,305) - End of year (139,605)$ (139,605) $ (187,538) $ (47,933) $ Budgeted Amounts
128
ITEM 7
City of Ceres, California
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual Traffic Offender Special Revenue Fund
For the year ended June 30, 2021
Variance w/Final
Positive
Original Final Actual (Negative)
REVENUES:

Charges for services 69,000$ 69,000$ 54,123$ (14,877)$ Other revenues - - - - Total revenues 69,000 69,000 54,123 (14,877) EXPENDITURES:

Current:

Public safety 69,076 69,076 60,271 8,805
Total expenditures 69,076 69,076 60,271 8,805

REVENUES OVER (UNDER)
EXPENDITURES (76) (76) (6,148) (6,072) Net change in fund balances (76) (76) (6,148) (6,072) FUND BALANCES (DEFICIT):

Beginning of year 51,728 51,728 51,728 - End of year 51,652$ 51,652$ 45,580$ (6,072)$ Budgeted Amounts
129
ITEM 7
City of Ceres, California
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual Traffic Safety Special Revenue Fund
For the year ended June 30, 2021
Variance w/Final
Positive
Original Final Actual (Negative)
REVENUES:

Fines and forfeitures 36,000$ 36,000$ 57,485$ 21,485$ Total revenues 36,000 36,000 57,485 21,485 EXPENDITURES:

Current:

Public safety - - 57,485 (57,485) Total expenditures - - 57,485 (57,485)

REVENUES OVER (UNDER)
EXPENDITURES 36,000 36,000 - (36,000) Net change in fund balances 36,000 36,000 - (36,000) FUND BALANCES (DEFICIT):

Beginning of year - - - - End of year 36,000$ 36,000$ -$ (36,000)$ Budgeted Amounts
130
ITEM 7
City of Ceres, California
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual Used Oil Grants Special Revenue Fund
For the year ended June 30, 2021
Variance w/Final
Positive
Original Final Actual (Negative)
REVENUES:

Intergovernmental 13,000$ 13,000$ -$ (13,000)$ Use of money and property 300 300 222 (78) Total revenues 13,300 13,300 222 (13,078) EXPENDITURES:

Current:

Engineering and Transportation - - - - Public works 12,530 (12,530)
Total expenditures - - 12,530 (12,530)

REVENUES OVER (UNDER)
EXPENDITURES 13,300 13,300 (12,308) (25,608) Net change in fund balances 13,300 13,300 (12,308) (25,608) FUND BALANCES:

Beginning of year 39,576 39,576 39,576 - End of year 52,876$ 52,876$ 27,268$ (25,608)$ Budgeted Amounts
131
ITEM 7
City of Ceres, California
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual Department of Conservation Grant Special Revenue Fund
For the year ended June 30, 2021
Variance w/Final
Positive
Original Final Actual (Negative)
REVENUES:

Intergovernmental 12,150$ 12,150$ -$ (12,150)$ Use of money and property 900 900 526 (374) Total revenues 13,050 13,050 526 (12,524) EXPENDITURES:

Current:

Engineering and Transportation - - 3,961 (3,961) Total expenditures - - 3,961 (3,961)

REVENUES OVER (UNDER)
EXPENDITURES 13,050 13,050 (3,435) (16,485) Net change in fund balances 13,050 13,050 (3,435) (16,485) FUND BALANCES:

Beginning of year 71,857 71,857 71,857 - End of year 84,907$ 84,907$ 68,422$ (16,485)$ Budgeted Amounts
132
ITEM 7
City of Ceres, California
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual CMAQ Special Revenue Fund
For the year ended June 30, 2021
Variance w/Final
Positive
Original Final Actual (Negative)
REVENUES:

Intergovernmental 1,000,000$ 1,000,000 $ 1,334,043 $ 334,043$ Total revenues 1,000,000 1,000,000 1,334,043 334,043 EXPENDITURES:

Current:

Engineering and Transportation 10,765 10,765 45,714 (34,949) Capital outlay 527,673 4,235,739 909,010 3,326,729 Total expenditures 538,438 4,246,504 954,724 3,291,780

REVENUES OVER (UNDER)
EXPENDITURES 461,562 (3,246,504) 379,319 3,625,823 Net change in fund balances 461,562 (3,246,504) 379,319 3,625,823 FUND BALANCES (DEFICIT):

Beginning of year (629,500) (629,500) (629,500) - End of year (167,938)$ (3,876,004) $ (250,181) $ 3,625,823 $ Budgeted Amounts
133
ITEM 7
City of Ceres, California
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual Community Facilities District Special Revenue Fund
For the year ended June 30, 2021
Variance w/Final
Positive
Original Final Actual (Negative)
REVENUES:

Property and other taxes 673,136$ 673,136$ 678,797$ 5,661$ Use of money and property 400 400 1,750 1,350 Total revenues 673,536 673,536 680,547 7,011 EXPENDITURES:

Current:

Public works 7,500 7,500 7,359 141 Total expenditures 7,500 7,500 7,359 141

REVENUES OVER (UNDER)
EXPENDITURES 666,036 666,036 673,188 7,152 OTHER FINANCING SOURCES (USES):

Transfers out (673,135) (673,135) (671,438) 1,697 Total other financing sources (uses) (673,135) (673,135) (671,438) 1,697 Net change in fund balances (7,099) (7,099) 1,750 8,849 FUND BALANCES:

Beginning of year 10,332 10,332 10,332 - End of year 3,233$ 3,233$ 12,082$ 8,849$ Budgeted Amounts
134
ITEM 7
City of Ceres, California
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual Fire Hydrant Benefit District Special Revenue Fund
For the year ended June 30, 2021
Variance w/Final
Positive
Original Final Actual (Negative)
REVENUES:

Property and other taxes 200$ 200$ -$ (200)$ Total revenues 200 200 - (200) EXPENDITURES:

Capital outla
y - - - - Total expenditures - - - -

REVENUES OVER (UNDER)
EXPENDITURES 200 200 - (200) Net change in fund balances 200 200 - (200) FUND BALANCES:

Beginning of year 128,697 128,697 128,697 - End of year 128,897$ 128,897 $ 128,697 $ (200) $ Budgeted Amounts
135
ITEM 7
City of Ceres, California
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual Transportation Development Act Special Revenue Fund
For the year ended June 30, 2021
Variance w/Final
Positive
Original Final Actual (Negative)
REVENUES:

Intergovernmental -$ - $ - $ -$ Use of money and property 500 500 - (500) Total revenues 500 500 - (500) EXPENDITURES:

Current:

Public works 2,500 2,500 3,077 (577) Total expenditures 2,500 2,500 3,077 (577)

REVENUES OVER (UNDER)
EXPENDITURES (2,000) (2,000) (3,077) (1,077) Net change in fund balances (2,000) (2,000) (3,077) (1,077) FUND BALANCES (DEFICIT):

Beginning of year 30,127 30,127 30,127 - End of year 28,127$ 28,127$ 27,050$ (1,077)$ Budgeted Amounts
136
ITEM 7
City of Ceres, California
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual Community Center Special Revenue Fund
For the year ended June 30, 2021
Variance w/Final
Positive
Original Final Actual (Negative)
REVENUES:

Charges for services 82,500$ 42,500$ 39,047$ (3,453)$ Other revenues - - - - Total revenues 82,500 42,500 39,047 (3,453) EXPENDITURES:

Current:

Community services 434,740 398,240 266,309 131,931 Total expenditures 434,740 398,240 266,309 131,931

REVENUES OVER (UNDER)
EXPENDITURES (352,240) (355,740) (227,262) 128,478 OTHER FINANCING SOURCES (USES):

Transfers in - - 62 62 Transfers out - - - - Total other financing sources (uses) - - 62 62 Net change in fund balances (352,240) (355,740) (227,200) 128,540 FUND BALANCES (DEFICIT):

Beginning of year (1,707,647) (1,707,647) (1,707,647) - End of year (2,059,887)$ (2,063,387) $ (1,934,847) $ 128,540 $ Budgeted Amounts
137
ITEM 7
City of Ceres, California
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual LLEBG Special Revenue Fund
For the year ended June 30, 2021
Variance w/Final
Positive
Original Final Actual (Negative)
REVENUES:

Intergovernmental -$ 40,374$ 40,255$ (119)$ Use of money and property 450 450 229 (221) Total revenues 450 40,824 40,484 (340) EXPENDITURES:

Current:

Public safety - - 40,255 (40,255) Total expenditures - - 40,255 (40,255)

REVENUES OVER (UNDER)
EXPENDITURES 450 40,824 229 (40,595) Net change in fund balances 450 40,824 229 (40,595) FUND BALANCES:

Beginning of year 43,428 43,428 43,428 - End of year 43,878$ 84,252$ 43,657$ (40,595)$ Budgeted Amounts
138
ITEM 7
City of Ceres, California
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual Public Facilities Fees Special Revenue Fund
For the year ended June 30, 2021
Variance w/Final
Positive
Original Final Actual (Negative)
REVENUES:

Charges for services 121,000$ 121,000$ 18,497$ (102,503)$ Use of money and property 29,000 29,000 18,801 (10,199) Other revenues - - - - Total revenues 150,000 150,000 37,298 (112,702) EXPENDITURES:

Current:

General government
Public safety 44,042 44,042 44,044 (2)
Capital outlay - 1,440,203 133,506 1,306,697 Total expenditures 44,042 1,484,245 177,550 1,306,695

REVENUES OVER (UNDER)
EXPENDITURES 105,958 (1,334,245) (140,252) 1,193,993 OTHER FINANCING SOURCES (USES):

Transfers out - - - - Total other financing sources (uses) - - - - Net change in fund balances 105,958 (1,334,245) (140,252) 1,193,993 FUND BALANCES:

Beginning of year 2,595,902 2,595,902 2,595,902 - End of year 2,701,860$ 1,261,657 $ 2,455,650 $ 1,193,993 $ Budgeted Amounts
139
ITEM 7
City of Ceres, California
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual Daniel Whitmore House Special Revenue Fund
For the year ended June 30, 2021
Variance w/Final
Positive
Original Final Actual (Negative)
REVENUES:

Use of money and property -$ - $ - $ - $ Total revenues - - - - EXPENDITURES:

Current:

Community services 8,353 8,353 6,793 1,560 Total expenditures 8,353 8,353 6,793 1,560

REVENUES OVER (UNDER)
EXPENDITURES (8,353) (8,353) (6,793) 1,560 OTHER FINANCING SOURCES (USES):

Transfers in 8,353 8,353 6,792 (1,561) Total other financing sources (uses) 8,353 8,353 6,792 (1,561) Net change in fund balances - - (1) (1) FUND BALANCES (DEFICIT):

Beginning of year (120) (120) (120) - End of year (120)$ (120) $ (121) $ (1) $ Budgeted Amounts
140
ITEM 7
City of Ceres, California
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual RiverBluff Regional Park Special Revenue Fund
For the year ended June 30, 2021
Variance w/Final
Positive
Original Final Actual (Negative)
REVENUES:

Charges for services 1,200$ 1,200$ 256$ (944) Total revenues 1,200 1,200 256 (944) EXPENDITURES:

Capital outla
y - - - - Total expenditures - - - -

REVENUES OVER (UNDER)
EXPENDITURES 1,200 1,200 256 (944) Net change in fund balances 1,200 1,200 256 (944) FUND BALANCES (DEFICIT):

Beginning of year (24,802) (24,802) (24,802) - End of year (23,602)$ (23,602) $ (24,546) $ (944) $ Budgeted Amounts
141
ITEM 7
City of Ceres, California
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual Ceres Community Foundation Special Revenue Fund
For the year ended June 30, 2021
Variance w/Final
Positive
Original Final Actual (Negative)
REVENUES:

Use of money and property 1,500$ 1,500$ 1,079$ (421)$ Other revenues 22,600 22,600 810 (21,790) Total revenues 24,100 24,100 1,889 (22,211) EXPENDITURES:

Current:

General government 6,120 6,120 3,000 3,120 Community services - - - - Total expenditures 6,120 6,120 3,000 3,120

REVENUES OVER (UNDER)
EXPENDITURES 17,980 17,980 (1,111) (19,091) OTHER FINANCING SOURCES (USES):

Transfers out - - - - Total other financing sources (uses) - - - - Net change in fund balances 17,980 17,980 (1,111) (19,091) FUND BALANCES:

Beginning of year 143,862 143,862 143,862 - End of year 161,842$ 161,842 $ 142,751 $ (19,091) $ Budgeted Amounts
142
ITEM 7
City of Ceres, California
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual 2018 Public Safety Grants Special Revenue Fund
For the year ended June 30, 2021
Variance w/Final
Positive
Original Final Actual (Negative)
REVENUES:

Intergovernmental -$ - $ - $ -$ Total revenues - - - - EXPENDITURES:

Current:

Public safety - - - - Total expenditures - - - -

REVENUES OVER (UNDER)

EXPENDITURES - - - - Net change in fund balances - - - - FUND BALANCES (DEFICIT):

Beginning of year - - - - End of year -$ - $ - $ - $ Budgeted Amounts
143
ITEM 7
City of Ceres, California
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual Clinton Whitmore Mansion Special Revenue Fund
For the year ended June 30, 2021
Variance w/Final
Positive
Original Final Actual (Negative)
REVENUES:

Other revenues -$ -$ -$ -$ Total revenues - - - - EXPENDITURES:

Current:

Community services 15,620 15,620 23,914 (8,294) Total expenditures 15,620 15,620 23,914 (8,294)

REVENUES OVER (UNDER)
EXPENDITURES (15,620) (15,620) (23,914) (8,294) Net change in fund balances (15,620) (15,620) (23,914) (8,294) FUND BALANCES (DEFICIT):

Beginning of year (50,327) (50,327) (50,327) - End of year (65,947)$ (65,947) $ (74,241) $ (8,294) $ Budgeted Amounts
144
ITEM 7
City of Ceres, California
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual Measure L Special Revenue Fund
For the year ended June 30, 2021
Variance w/Final
Positive
Original Final Actual (Negative)
REVENUES:

Intergovernmental 1,588,724$ 1,588,724 $ 2,837,874 $ 1,249,150 $ Use of money and property 12,000 12,000 15,507 3,507 Total revenues 1,600,724 1,600,724 2,853,381 1,252,657 EXPENDITURES:

Current:

Public works 45,700 74,514 34,380 40,134
Capital outlay 895,000 6,120,802 2,312,089 3,808,713 Total expenditures 940,700 6,195,316 2,346,469 3,848,847

REVENUES OVER (UNDER)
EXPENDITURES 660,024 (4,594,592) 506,912 5,101,504 OTHER FINANCING SOURCES (USES):

Transfers in - - - - Transfers out - - - - Total other financing sources (uses) - - - - Net change in fund balances 660,024 (4,594,592) 506,912 5,101,504 FUND BALANCES (DEFICIT):

Beginning of year 2,673,140 2,673,140 2,673,140 - End of year 3,333,164$ (1,921,452) $ 3,180,052 $ 5,101,504 $ Budgeted Amounts
145
ITEM 7
City of Ceres, California
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual Road Maintenance and Rehab Special Revenue Fund
For the year ended June 30, 2021
Variance w/Final
Positive
Original Final Actual (Negative)
REVENUES:

Intergovernmental 935,088$ 935,088 $ 890,937 $ (44,151) $ Use of money and property 2,000 2,000 4,677 2,677 Total revenues 937,088 937,088 895,614 (41,474) EXPENDITURES:

Current:

Public works - - - - Capital outlay 450,000 1,554,314 1,031,825 522,489 Total expenditures 450,000 1,554,314 1,031,825 522,489

REVENUES OVER (UNDER)
EXPENDITURES 487,088 (617,226) (136,211) 481,015 Net change in fund balances 487,088 (617,226) (136,211) 481,015 FUND BALANCES (DEFICIT):

Beginning of year 962,390 962,390 962,390 - End of year 1,449,478$ 345,164 $ 826,179 $ 481,015 $ Budgeted Amounts
146
ITEM 7
City of Ceres, California
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual For the year ended June 30, 2021
Variance w/Final
Positive
Original Final Actual (Negative)
REVENUES:

Intergovernmental -$ 160,000 - $ (160,000)$ Use of money and property - - - - Total revenues - 160,000 - (160,000) EXPENDITURES:

Current:

Public works - 160,000 263 159,737 Total expenditures - 160,000 263 159,737

REVENUES OVER (UNDER)
EXPENDITURES - - (263) (263) Net change in fund balances - - (263) (263) FUND BALANCES (DEFICIT):

Beginning of year - - - - End of year -$ - $ (263)$ (263) $ Budgeted Amounts
SB2 Planning Grants Program Special Revenue Fund
147
ITEM 7
City of Ceres, California
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual CARES Act Special Revenue Fund
For the year ended June 30, 2021
Variance w/Final
Positive
Original Final Actual (Negative)
REVENUES:

Intergovernmental -$ - $ 2,233,738$ 2,233,738 $ Use of money and property - - - - Total revenues - - 2,233,738 2,233,738 EXPENDITURES:

Current:

General government - - 2,197,446 (2,197,446) Total expenditures - - 2,197,446 (2,197,446)

REVENUES OVER (UNDER)
EXPENDITURES - - 36,292 36,292 OTHER FINANCING SOURCES (USES):

Transfers in - - - - Transfers out - - (35,691) (35,691) Total other financing sources (uses) - - (35,691) (35,691) Net change in fund balances - - 601 601 FUND BALANCES (DEFICIT):

Beginning of year - - - - End of year -$ - $ 601 $ 601 $ Budgeted Amounts
148
ITEM 7
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149
ITEM 7
Fund
Equipment Revolving
Information Technology
Risk Management
Building Maintenance
Accounts for the cost of providing workers' compensation and liability insurance coverage on a City-wide basis.

Accounts for the activities of building maintenance, custodial service, and building modification projects on a City-wide basis.

INTERNAL SERVICE FUNDS
Description
Internal Service Funds are used to account for special activities and services performed by a designated City department for other departments on a cost reimbursement basis.

Accounts for the operation, maintenance, and replacement of City equipment.

Accounts for costs associated with maintaining the City's information systems.
150
ITEM 7
City of Ceres, California
Statement of Fund Net Position
Internal Service Funds
June 30, 2021
Equipment Information Risk Building
Revolving Technology Management Maintenance Totals
ASSETS
Current assets:

Cash and investments 2,535,183 $ 190,695 $ 1,098,832 $ 647,767 $ 4,472,477$ Accounts receivable - - 1,000 - 1,000 Total current assets 2,535,183 190,695 1,099,832 647,767 4,473,477 Noncurrent assets:

Machinery and equipment 7,852,425 383,724 - 323,891 8,560,040 Less accumulated depreciation (5,223,036) (217,844) - (118,697) (5,559,577) Total noncurrent assets 2,629,389 165,880 - 205,194 3,000,463 Total assets 5,164,572$ 356,575$ 1,099,832$ 852,961 $ 7,473,940$

LIABILITIES AND NET POSITION
Liabilities:

Current liabilities:

Accounts payable and accrued liabilities 60,853$ 6,176$ 1,050$ 10,508 $ 78,587$ Due to other funds 396,106 - 235 - 396,341 Total current liabilities 456,959 6,176 1,285 10,508 474,928 Noncurrent liabilities:

Compensated absences 63,121 - - 59,770 122,891 Liability for claims - - 1,018,796 - 1,018,796 Total noncurrent liabilities 63,121 - 1,018,796 59,770 1,141,687 Total liabilities 520,080 6,176 1,020,081 70,278 1,616,615 Net Position:

Net investment in capital assets 2,629,389 165,880 - 205,194 3,000,463 Unrestricted net position (deficit) 2,015,103
184,519 79,751 577,489 2,856,862 Total net position 4,644,492 350,399 79,751 782,683 5,857,325 Total liabilities and net position 5,164,572$ 356,575$ 1,099,832$ 852,961 $ 7,473,940$ 151
ITEM 7
City of Ceres, California
Statement of Revenues, Expenses, and Changes in Fund Net Position Internal Service Funds
For the year ended June 30, 2021
Equipment Information Risk Building
Revolving Technology Management Maintenance Totals
OPERATING REVENUES:

Interdepartmental charges 2,514,142$ 1,133,484$ 2,145,799$ 1,506,313$ 7,299,738$ Other - - 2,975 - 2,975 Total operating revenues 2,514,142 1,133,484 2,148,774 1,506,313 7,302,713 OPERATING EXPENSES:

Salaries and benefits 523,456 598,644 (80,367) 797,880 1,839,613 Contractual and other services 81,818 193,281 - 102,850 377,949 Materials and supplies 759,460 173,819 - 298,554 1,231,833 Depreciation 415,470 42,115 - 16,914 474,499 Other operating costs 77,109 - 2,033,678 52,755 2,163,542 Total operating expenses 1,857,313 1,007,859 1,953,311 1,268,953 6,087,436 OPERATING INCOME (LOSS) 656,829 125,625 195,463 237,360 1,215,277 NONOPERATING REVENUE (EXPENSE):

Investment earnings 1,856 - - - 1,856 Transfers in (out) 78 5,038 - 10,619 15,735 Total non-operating revenue 1,934 5,038 - 10,619 17,591 NET INCOME (LOSS) 658,763 130,663 195,463 247,979 1,232,868 CHANGE IN NET POSITION 658,763 130,663 195,463 247,979 1,232,868 NET POSITION (DEFICIT):

Beginning of year 3,985,729 219,736 (115,712)
534,704 4,624,457
End of year 4,644,492$ 350,399$ 79,751$ 782,683$ 5,857,325$ 152
ITEM 7
City of Ceres, California
Combining Statement of Cash Flows
Internal Service Funds
For the year ended June 30, 2021
Equipment Information Risk Building
Revolving Technology Management Maintenance Totals
CASH FLOWS FROM OPERATING ACTIVITIES:

Cash received from other funds for services 2,514,298 $ 1,133,484 $ 2,144,799 $ 1,506,313 $ 7,298,894 $ Cash received from loss claim recoveries - - 2,975 - 2,975 Cash payments to suppliers for goods and services (897,265) (364,347) (1,050) (458,851) (1,721,513) Cash payments to employees for services (509,816) (598,644) 80,367 (795,795) (1,823,888) Cash payments for loss claims - - (2,185,975) - (2,185,975) Net cash provided (used) by operating activities 1,107,217 170,493 41,116 251,667 1,570,493 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:

Transfers received (paid) 396,184 5,038 - 10,619 411,841 Net cash provided by noncapital financing activities 396,184 5,038 - 10,619 411,841

CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES:

Acquisition and construction of capital assets (707,255) (117,148) - (61,260) (885,663) Net cash (used) by capital and related financing activities (707,255) (117,148) - (61,260) (885,663) CASH FLOWS FROM INVESTING ACTIVITIES:

Interest earning 1,856 - - - 1,856 Net increase in cash and cash equivalents 798,002 58,383 41,116 201,026 1,098,527 CASH AND CASH EQUIVALENTS:

Beginning of year 1,737,181 132,312 1,057,716 446,741 3,373,950 End of year 2,535,183$ 190,695$ 1,098,832$ 647,767$ 4,472,477$ Reconciliation of income (loss) from operations to net
cash provided (used) by operating activities:

Income (loss) from operations 656,829$ 125,625$ 195,463$ 237,360$ 1,215,277$ Adjustments to reconcile income (loss) from operations
to net cash provided (used) by operating activities:

Depreciation 415,470 42,115 - 16,914 474,499 (Increase) decrease in current assets:

Accounts receivable 156 - (1,000) - (844) Increase (decrease) in liabilities:

Accounts payable and accrued liabilities 21,122 2,753 (1,050) (4,692) 18,133 Compensated absences 13,640 - - 2,085 15,725 Increase (decrease) in claims liability - noncurrent - - (152,297) - (152,297) Net cash provided (used) by operating activities 1,107,217$ 170,493$ 41,116$ 251,667$ 1,570,493$ 153
ITEM 7
Fund
Private Purpose Trust Funds
Former Ceres Redevelopment Agency
Successor Agency - Non-Housing
Successor Agency - Housing
Former Stanislaus-Ceres Redevelopment Commission
Successor Agency - Non-Housing
Successor Agency - Housing
Accounts for funds collected and disbursed for the
dissolution of the former Stanislaus-Ceres
Redevelopment Commission related to Administration
and Retirement of enforceable obligations.

Accounts for funds collected and disbursed for the
dissolution of the former Stanislaus-Ceres
Redevelopment Commission's housing related debts.

TRUST AND AGENCY FUNDS
Description
Accounts for funds collected and disbursed for the
dissolution of the former Ceres Redevelopment Agency
related to Administration and Retirement of enforceable obligations.

Accounts for funds collected and disbursed for the
dissolution of the former Ceres Redevelopment Agency's
housing related debts.
154
ITEM 7
City of Ceres, California
Combining Statement of Net Position
Private Purpose Trust Funds
June 30, 2021
Totals
Non-Housing Housing Non-Housing Housing 2021

ASSETS AND DEFERRED OUTFLOWS OF

RESOURCES
Current assets:

Cash and investments 4,956,676$ 600,019$ 136,256 $ - $ 5,692,951$ Cash and investments with trustee/fiscal agent 2,061,500 - - - 2,061,500 Interest receivable 280 - - - 280 Total current assets 7,018,456 600,019 136,256 - 7,754,731 Non-Current assets:

Advances to other funds - 1,826,680 - - 1,826,680 Long-term loans receivable - 2,021,849 - 192,522 2,214,371 Construction in progress 12,500,147 - - - 12,500,147 Total Non-current assets 12,500,147 3,848,529 - 192,522 16,541,198 Total assets 19,518,603 4,448,548 136,256 192,522 24,295,929 Deferred outflows: Pension plan 16,613 - 91,143 - 107,756 Total assets and deferred outflows 19,535,216$ 4,448,548 $ 227,399 $ 192,522 $ 24,403,685

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES AND NET POSITION
Current liabilities:

Accounts payable and accrued liabilities 3,956$ -$ 1,109 $ - $ 5,065$ Interest payable - 8,591 - - 8,591 Compensated absences - current 11,481 3,331 14,812 Current portion of long term debt 1,602,415 - 60,000 - 1,662,415 Total current liabilities 1,617,852 8,591 64,440 - 1,690,883 Long-term liabilities:

Advances from Stanislaus County - - 266,702 - 266,702 Advances from City of Ceres General Fund 1,422,787 - 531,494 - 1,954,281 Advances from other funds 1,826,680 - - - 1,826,680 Due after one year 28,478,809 - 735,000 - 29,213,809 Net pension obligation 144,948 - 179,106 - 324,054 Total long-term liabilities 31,873,224 - 1,712,302 - 33,585,526 Total liabilities 33,491,076 8,591 1,776,742 - 35,276,409 Deferred inflows: Pension plan 28,911 - 7,741 - 36,652 Total liabilities and deferred inflows 33,519,987 8,591 1,784,483 - 35,313,061 Net Position (Deficit):

Net position held in trust for
Redevelopment Dissolution (13,984,771) 4,439,957 (1,557,084) 192,522 (10,909,376) Total liabilities, deferred inflows, and net
position 19,535,216$ 4,448,548$ 227,399 $ 192,522 $ 24,403,685$ Successor Agency Successor Agency
Former Ceres Redevelopment Agency
Former Stanislaus - Ceres
Redevelopment Commission
155
ITEM 7
City of Ceres, California
Combining Statement of Changes in Fiduciary Net Position Private Purpose Trust Funds
For the year ended June 30, 2021
Totals
Non-Housing Housing Non-Housing Housing 2021
ADDITIONS:

Property taxes 2,782,792 $ - $ 143,882$ - $ 2,926,674$ Investment earnings 36,778 - 3,256 - 40,034 Other revenue 58,048 79,614 - - 137,662 Total additions 2,877,618 79,614 147,138 - 3,104,370 DEDUCTIONS:

General and administrative 26,643 - 16,076 - 42,719 Salaries and benefits 118,369 - 45,847 - 164,216 Contractual and other services 92,497 - 14,773 - 107,270 Interest and debt service expenses 544,863 - 54,928 - 599,791 Total deductions 782,372 - 131,624 - 913,996 CHANGE IN FIDUCIARY NET POSITION 2,095,246 79,614 15,514 - 2,190,374 NET POSITION (DEFICIT):

Beginning of year (16,080,017) 4,360,343 (1,572,598) 192,522 (13,099,750) End of year (13,984,771)$ 4,439,957 $ (1,557,084) $ 192,522 $ (10,909,376)$ Former Ceres Redevelopment Agency
Former Stanislaus - Ceres
Redevelopment Commission
Successor Agency Successor Agency
156
ITEM 7
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157
ITEM 7

7080 Donlon Way, Suite 204, Dublin, CA 94568 ● phone (925) 556-6200 ● fax: (707) 232-6226 1102 South Main Street, #1, Fort Bragg, CA 95437 ● phone (707) 964-6325 www.jjacpa.com

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

The Honorable City Council
City of Ceres
Ceres, California

We have audited, in accordance with the auditing standards gene rally accepted in the United States of America and the standards applicable to financial audits contai ned in Government Auditing Standards issued by the Comptroller General of the United States, the fin ancial statements of the governmental activities, the business-type activities, each major fund, the aggregate remaining fund information, and the budgetary comparison information of the City of Ceres, California (City), as of and for the year ended June 30, 2020, and the related notes to the financial statement s, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated June 28, 2022.

Internal Control Over Financial Reporting
In planning and performing our audit of the financial statement s, we considered the City’s internal control over financial reporting (internal control) to determin e the audit procedures that are appropriate in the circumstances for the p urpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allo w management or employees, in the normal course of performing the ir 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 p revented 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 mate rial weakness, yet important eno ugh 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 materia l weaknesses. However, material weaknesses may exist that have not been identified.

ITEM 7

Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Cit y’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial s tatement amounts. However, prov iding 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 int ernal control and compliance.

Accordingly, this communication is not suitable for any other purpose.

]]TVcT? \ÇvA
June 28, 2022 JJACPA, Inc.

Dublin, CA

ITEM 7
ITEM 7

CITY OF CERES

GANN APPROPRIATIONS LIMIT SCHEDULE

FOR THE YEAR ENDED

JUNE 30, 2021
ITEM 7
City of Ceres
Gann Appropriations Limit Schedule
For the year ended June 30, 2021

Table of Contents

Page

Independent Accountants’ Report on Applying Agreed-Upon Procedures ........................................... 1-2

Gann Appropriations Limit Schedule…………………………………………........................................3

ITEM 7

7080 Donlon Way, Suite 204, Dublin, CA 94568 ● phone (925) 556-6200 ● fax: (707) 232-6226 1102 South Main Street, #1, Fort Bragg, CA 95437 ● phone (707) 964-6325 www.jjacpa.com

INDEPENDENT ACCOUNTANTS’ REPORT ON APPLYING AGREED-UPON

PROCEDURES

The Honorable City Council
City of Ceres
Ceres, California

We have applied the procedures enumerated below to the accompanying Appropriations Limit Schedule of the City of Ceres (the “City”) for the fiscal year ended June 30, 2021. These procedures, which were agreed to by the City and the League of California Cities (as 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 the City in meeting the requirements of Section 1.5 of Article XIII-B of the California Constitution. The City’s management is responsible for the Appropriations Limit Schedule. This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of those parties specified in the report.

Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose.

The procedures performed and our findings were as follows:

1. We obtained the completed worksheets used by the City to calculate its Appropriations Limit for the fiscal year ended June 30, 2021 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 in the aforementioned worksheets 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 Schedule, we added line A, last year’s limit, to line E, total adjustments and compared the resulting amount to line F, this year’s limit.

Finding: No exceptions were noted as a result of our procedures.

3. We compared the current year information presented in the accompanying Appropriations Limit Schedule to the other worksheets described in No. 1 above.

Finding: No exceptions were noted as a result of our procedures.

ITEM 7

Page – 2 – Findings (continued)

4. We compared the prior year appropriations limit, presented in the accompanying Appropriations Limit Schedule, to the prior year appropriations limit adopted by the City Council for the prior year.

Finding: No exceptions were noted as a result of our procedures.

We were not engaged to and did not conduct an examination, the objective of which would be the expression of an opinion on the accompanying Appropriations Limit Schedule. Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you. No procedures have been performed with respect to the determination of the appropriation limit for the base year, as defined by Article XIII-B of the California Constitution.

JJACPA, Inc.

August 10, 2021 JJACPA, Inc.

ITEM 7

CITY OF CERES
Gann Appropriations Limit Schedule
For the year ended June 30, 2021
Amount Source
A. Appropriations limit for the year ended June 30, 2020 $66,472,755 Prior year schedule B. Calculation Factors:

1. Population Increase % 1.0084 State Department of Finance

2. Inflation Increase % 1.0373 State Department of Finance

3. Total adjustment factor 1.0460 B1 * B2
C. Annual Adjustment Increase 3,057,747 [(B3-1)A1)]
D. Other Adjustments
Assumed responsibility (+) N/A
E. Total Adjustments $3,057,747 (C+D)
F. Appropriations limit for the year ended June 30, 2021 $69,530,501 (A+E) 3 ITEM 7
ITEM 7

CITY OF CERES

TRANSPORTATION DEVELOPMENT ACT FUNDS

FINANCIAL STATEMENTS

FOR THE YEAR ENDED
JUNE 30, 2021

ITEM 7
City of Ceres
Transportation Development Act Funds
For the year ended June 30, 2021

Table of Contents

Page

Independent Auditors’ Report ............................................................................................................... 1 Financial Statements:

Statement of Net Position .................................... ............................................................................ 5 Statement of Activities .................................................................................................................... 6 Governmental Funds Financial Statements:

Combined Balance Sheet ........................................................................................................... 8 Combined Statement of Revenue s, Expenditures, and Changes in Fund Balances ...................................................................................................................... 9 Schedule of Revenues, Expenditures, and Changes in Fund Balan ces – Budget and Actual – Special Revenue Funds .................................................................... 10 Proprietary Fund Financial Statements:

Statement of Net Position ................................... ............................................................... 11 S t a t e m e n t o f R e v e n u e s , E x p e n s e s , and Changes in Net Position ...................................... 12 S t a t e m e n t o f C a s h F l o w s ................................................................................................... 13 Notes to Financial Statements ....................................................................................................... 17 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 ....................................................................... 23

Independent Auditors’ Compliance Report on the
Transportation Development Act Funds ........................................................................................ 25

ITEM 7

7080 Donlon Way, Suite 204, Dublin, CA 94568 ● phone (925) 556-6200 ● fax: (707) 232-6226 1102 South Main Street, #1, Fort Bragg, CA 95437 ● phone (707) 964-6325 www.jjacpa.com

INDEPENDENT AUDITORS’ REPORT

To the Honorable Mayor and Members of City Council
of the City of Ceres
Ceres, California

Report on the Financial Statements

We have audited the accompanying financial statements of the Transportation Development Act Funds (TDA Funds) of the City of Ceres, California (City), as of and for the year ended June 30, 2021 and the related notes to the financial statements, which collectively c omprise the TDA Fund’s basic financial statements as listed in the table of contents.

Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principl es generally accepted in the United States of America; this includes the design, implementation, and maintenance of interna l control relevant to the preparation and fair presentation of financial statements that are free fro m material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial s t a t e m e n t s b a s e d o n o u r a u d i t . W e conducted our audit in accordance with auditing standards gener ally accepted in the United States of America and the standards applicable to financial audits contai ned in Governmental Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obt ain reasonable assurance about whether the financial statements are free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risk of material misstatement of the financia l statements, whether due to fraud or error. In making those risk asse ssments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s inte rnal control. Accordingly, we express no su ch opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by mana gement, as well as evaluating the overall presentation of the financial statements.

ITEM 7

We believe that the audit evidence we have obtained is sufficie nt and appropriate to provide a basis for our opinions.

Opinions

In our opinion, the financial st atements referred to above pres ent fairly, in all material respects, the respective financial position of the TDA Funds as of June 30, 2021, and the respective changes in financial position and, where applicable, thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Other Matters

Required Supplementary Information

Management has omitted the manage ment’s discussion and analysis that accounting principles generally accepted in the United States of America require to b e presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Acc ounting Standards Board who con siders it to be an essential part of financial reporting for placing th e basic financial statements in an appropriate operational, economic, or historical context. Our opini on on the basic financial state ments is not affected by this missing information.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards , we have also issued our report dated June 23, 2022 on our consideration of the C ity’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contra cts, and grant agreements and other matters. The purpose of that repor t is to describe the scope of our testing of internal control over financial reporting and complian ce and the results of that test ing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.

]]TVcT? \ÇvA
June 23, 2022 JJACPA, Inc.

Dublin, CA
ITEM 7

BASIC FINANCIAL STATEMENTS
3 ITEM 7
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4 ITEM 7
City of Ceres
Transportation Development Act Funds
Statement of Net Position
June 30, 2021
Governmental Business-type
Activities Activities Total
ASSETS
Current assets:

Cash and investments 48,064$ 553,973 $ 602,037 $ Receivables:

Interest - 26 26 Total assets 48,064 553,999 602,063 Deferred outflows: Pension Plan - 15,792 15,792 Total assets and deferred outflows 48,064$ 569,791$ 617,855$

LIABILITIES
Current liabilities:

Accounts payable and accrued liabilities -$ 440$ 440$ Due to the City of Ceres 21,014 - 21,014 Total current liabilities 21,014 440 21,454 Net pension obligation - 55,781 55,781 Total liabilities 21,014 56,221 77,235 Deferred inflows: Pension Plan - 15,731 15,731 Total liabilities and deferred inflows 21,014 71,952 92,966

NET POSITION
Net investment in capital assets - - - Restricted
Transit services 27,050 - 27,050 Unrestricted - 497,839 497,839 Total net position 27,050 497,839 524,889 Total liabilities, deferred inflows, and net position 48,064$ 569,791$ 617,855$ The accompanying notes are an integral part of these basic financial statements. 5 ITEM 7
City of Ceres
Transportation Development Act Funds
Statement of Activities
June 30, 2021
Operating
Charges for Grants and
Functions/Programs Expenses Services Contributions
Primary government:

Governmental activities:

Engineering and Transportation 3,077$ - $ - $ Total governmental activities 3,077 - - Business-type activities:

STANCOG 14,584 - - Total business-type activities 14,584 - - Total primary government 17,661$ - $ - $ General revenues:

Use of money and property
Transfer from the City of Ceres
Total general revenues
Change in net position
Net position:

Beginning of year
Net assets - Ending
Program Revenues
The accompanying notes are an integral part of these basic financial statements. 6 ITEM 7
Governmental Business-Type
Activities Activities Totals
(3,077)$ - $ (3,077)$ (3,077) - (3,077) - (14,584) (14,584) - (14,584) (14,584) (3,077) (14,584) (17,661) - 4,220 4,220 - - - - 4,220 4,220 (3,077) (10,364) (13,441) 30,127 508,203 538,330
27,050$ 497,839$ 524,889$
Net (Expense) Revenue and
Changes in Net Position
7 ITEM 7
City of Ceres
Transportation Development Act Funds
Combined Balance Sheet
Governmental Funds
June 30, 2021
Pedestrians
and Bicycle Streets
Facilities and Roads Total
ASSETS
Cash and investments 48,064 $ - $ 48,064$ Accounts receivable - - - Total assets 48,064$ - $ 48,064$

LIABILITIES AND FUND BALANCES
Liabilities:

Accounts payable - $ - $ - $ Due to the City of Ceres 25 20,989 21,014
Total liabilities 25 20,989 21,014 Fund balances:

Restricted 48,039 - 48,039
Committed for encumbrances - - - Unassigned (Deficit) - (20,989) (20,989) Total fund balances 48,039 (20,989) 27,050 Total liabilities and fund balances 48,064$ - $ 48,064$

The accompanying notes are an integral part of these financial statements.

Special Revenue Funds
8 ITEM 7
City of Ceres
Transportation Development Act Funds
Combined Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds
For the year ended June 30, 2021
Pedestrians
and Bicycle Streets
Facilities and Roads Total
REVENUES:

Revenues from other agencies - $ - $ - $ Use of money and property - - - Other revenues - - - Total revenues - - - EXPENDITURES:

Salaries and benefits - 3,077 3,077 Total expenditures - 3,077 3,077 Revenues over (under) expenditures - (3,077) (3,077) FUND BALANCES (DEFICIT):

Beginning of year 48,039 (17,912) 30,127 End of year 48,039$ (20,989) $ 27,050 $

Special Revenue Funds
The accompanying notes are an integral part of these financial statements. 9 ITEM 7
City of Ceres
Transportation Development Act Funds
Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - Special Revenue Funds
For the year ended June 30, 2021
Variance Variance
Positive Positive
Budget Actual (Negative) Budget Actual (Negative)
REVENUES:

Revenues from other agencies - $ - $ - $ -$ - $ -$ Use of money and property - - - 500 - (500) Total revenues - - - 500 - (500) EXPENDITURES:

Salaries and benefits - - - - 3,077 (3,077) Total expenditures - - - - 3,077 (3,077)

REVENUES OVER (UNDER)
EXPENDITURES - $ - $ - $ 500$ (3,077)$ (3,577)$ FUND BALANCES (DEFICIT):

Beginning of year 48,039 (17,912)
End of year 48,039 $ (20,989)$
Pedestrians and Bicycle Facilities Streets and Roads
The accompanying notes are an integral part of these financial statements. 10 ITEM 7
City of Ceres
Transportation Development Act Funds
Statement of Net Position
Proprietary Fund
June 30, 2021
Enterprise Fund
Dial-a-Ride
ASSETS
Cash and investments 553,973$
Interest receivable 26
Total assets 553,999
Deferred outflows: Pension Plan 15,792
Total assets and deferred outflows 569,791$

LIABILITIES AND NET POSITION
Liabilities:

Accounts payable 440
Net pension obligation 55,781
Total liabilities 56,221
Deferred inflows: Pension Plan 15,731
Total liabilities and deferred inflows 71,952
Net Position:

Net investment in capital assets -
Unrestricted 497,839
Total net position 497,839
Total liabilities, deferred inflows, and net position 569,791$ The accompanying notes are an integral part of these financial statements. 11 ITEM 7
City of Ceres
Transportation Development Act Funds
Statement of Revenues, Expenses, and Changes in Net Position Proprietary Fund
For the year ended June 30, 2021
Enterprise Fund
Dial-a-Ride

OPERATING REVENUES
Charges for services -$
TDA 1/4¢ sales tax -
Total operating revenues -
OPERATING EXPENSES:

Salaries and benefits 5,135
Contractual services 9,449
Total operating expenses 14,584
Operating income (Loss) (14,584)

NONOPERATING REVENUES (EXPENSES)
Investment income 4,220
Total nonoperating revenues (expenses) 4,220
Change in net position (10,364)
NET POSITION:

Beginning of year 508,203
End of year 497,839$
The accompanying notes are an integral part of these financial statements. 12 ITEM 7
City of Ceres
Transportation Development Act Funds
Statement of Cash Flows
Proprietary Fund
For the year ended June 30, 2021
Enterprise Fund
Dial-a-Ride
CASH FLOWS FROM OPERATING ACTIVITIES:

Cash received from customers/taxes 20,175$
Cash payments to suppliers for goods and services (9,449) Cash payments to employees for services (100,665)
Net cash provided by operating activities (89,939)
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:

Acquisition of capital assets -
Net cash provided by (used for) capital and related financing activities - CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:

Transfers received (paid) -
Net cash provided (used for) noncapital financing activities: - CASH FLOWS FROM INVESTING ACTIVITIES:

Interest received 4,350
Net cash provided (used) by investing activities 4,350
Net increase (decrease) in cash and cash equivalents (85,589)

CASH AND CASH EQUIVALENTS
Beginning of year 639,562
End of year 553,973$

RECONCILIATION OF OPERATING INCOME TO NET
CASH PROVIDED BY OPERATING ACTIVITIES:

Operating income (14,584)$
Adjustments to reconcile operating income to net
cash provided (used) by operating activities:

Depreciation -
Changes in assets and liabilities:

Accounts receivable 20,175
Accounts payable (95,530)
Total adjustments (75,355)
Net cash provided by operating activities (89,939)$
The accompanying notes are an integral part of these financial statements. 13 ITEM 7
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14 ITEM 7

15 NOTES TO FINANCIAL STATEMENTS
ITEM 7

16 This page intentionally left blank.

ITEM 7
City of Ceres
Transportation Development Act Funds
Notes to Financial Statements
For the year ended June 30, 2021

17 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. The Reporting Entity

The Transportation Development Ac t Funds of the City of Ceres ( TDA Funds) are separate funds of the City of Ceres, California (City). The financial statements are intended to present the financial position and results of operations and cash flows, where applic able, for the TDA Funds, and not those transactions of the City as a whole.

B. Basis of Accounting and Measurement Focus

The basic financial statements of the TDA Funds have been prepa red in conformity with Generally Accepted Accounting Principles (GAAP) as applied to government units. The Governmental Accounting Standards Board (GASB) is the accepted standard-sett ing body for establishing governmental accounting and financ ial reporting principles. The more significant of the TDA Fund’s accounting policies are described below.

The accounts of the TDA Funds are organized on the basis of fun ds, each of which is considered a separate accounting entity. Th e operations of each fund are acc ounted for with a separate set of self- balancing accounts that compris e its assets, liabilities, fund equity, revenues, and expenditures or expenses as appropriate. Government resources are allocated to and accounted for in individual funds based upon the purpose for which they are to be spent and the m eans by which spending activities are controlled.

Governmental funds are accounted for on a spending or “current financial resources” measurement focus and the modified accrual basis of accounting. Accordingly , only current assets and current liabilities are included on the Balance Sheet. The Statement of Revenues, Expenditures and Changes in Fund Balances present increases (revenue and other financing so urces) and decreases (expenditures and other financing uses) in net c u r r e n t a s s e t s . U n d e r t h e m o d ified accrual basis of accounting, revenues are recognized in the accounting period in which they become both measurable and available to finance expenditures of the current period.

Revenues are recorded when received in cash, except those revenues subject to accrual (generally 60 days after year-end) are recognized when due. The primary reven ue sources, which have been treated as susceptible to accrual by the TDA Funds, are property tax, s ales tax, and intergovernmental revenues. Expenditures are recorded in the accounting period in which the related fund liability is incurred.

Proprietary funds are accounted for using the “ economic resources” measurement focus and the accrual basis of accounting. Accordingly, all assets and liabil ities (whether current or noncurrent) are included on the Statement of Net Position. The Statement of Rev enues, Expenses, and Changes in Net Position present increases (revenues) and decreases (expenses) in total net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which liability is incurred.

ITEM 7
City of Ceres
Transportation Development Act Funds
Notes to Financial Statements, Continued
For the year ended June 30, 2021

18 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued

B. Basis of Accounting and Measurement Focus, Continued

Operating revenues in the propr ietary funds are those revenues that are generated from the primary operations of the fund. All other revenues are reported as nonoperating revenues. Operating expenses are those expenses that are esse ntial to the primary operations of the fund. All other expenses are reported as nonoperating expenses.

The various funds are grouped in the accompanying financial statements into fund types as follows:

Governmental Fund Type

Special Revenue Funds - Special revenue funds are used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specific purposes.

Proprietary Fund Type

Enterprise Fund - Enterprise fund is used to account for operations financed and operated similar to business activities such as services rendered to the general public on a fee basis.

C. Cash and Investments

The City pools cash resources from all funds in order to facilitate the management of cash and achieve the goal of obtaining the highest yield with the greatest safet y and least risk. The balance in the pooled cash account is available to meet current operating requirement s. Cash in excess of current requirements is invested in various interest-bearing accounts and other investments for varying terms.

The City participates in an inve stment pool managed by the Stat e of California, titled Local Agency Investment Fund (LAIF), which has invested a portion of the poo l funds in Structured Notes and Asset-Backed Securities. LAIF’s i nvestments are subject to cred it risk with the full faith and credit of the State of California collateralizing these investments. In a ddition, these Structured Notes and Asset- Backed Securities are subject to market risk as to change in interest rates.

ITEM 7
City of Ceres
Transportation Development Act Funds
Notes to Financial Statements, Continued
For the year ended June 30, 2021

19 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued

D. Fund Balances and Net Position

In accordance with GASB Statem ent No. 54, Governmental Fund Bal ances consist of the following:

Nonspendable, restricted, committed and assigned. Nonspendable fund balance consists of investments that will not convert to cash soon enough to affect the current period. Restricted fund balance consists of resources that are subject to externally enforceable legal r estrictions imposed by parties altogether outside the government. Committed fund balance consists of amounts that can only be used for specific purposes pursuant to constraints imposed by a formal action of the City’s highest level of decision- making authority. Assigned fund balance consists of amounts whe re intent is expressed by the governing body itself or a body or official to which the governing body has delegated the authority to assign amounts to be used for specific purposes. Unassigned amo unts are a result of deficits in any other fund other than the General Fund.

Commitments of fund balance are described below:

Committed for Encumbrances – This amount represents commitments for materials and services on purchase orders and contracts, which remain open as of the end of the fiscal year.

In the Proprietary Fund Financial Statements, net assets may be classified in the following categories:

Invested in Capital Assets, Net of Related Debt – This amount consists of capital assets net of accumulated depreciation and reduced by outstanding debt that a ttributed to the acquisition, construction, or improvement of the assets.

Restricted Net Position – This amount is restricted by external creditors, grantors, co ntributors, or laws or regulations of other governments.

Unrestricted Net Position – This amount is all net position that does not meet the defini tion of “invested in capital assets, net of related debt” or “restricted net position.”

E. Use of Estimates

F. Budget

ITEM 7
City of Ceres
Transportation Development Act Funds
Notes to Financial Statements, Continued
For the year ended June 30, 2021

20 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued

F. Budget, Continued

The budget is developed for the Special Revenue Funds using the modified accrual basis of accounting. Amendments to the a pproved budget are approved by City Council. Supplemental appropriations are authorized b y City Council during the year. All unencumbered budget appropriations lapse at the end of each fiscal year. Encumbranc es for significant capital projects are reappropriated as part of the following year’s budget. Outstanding encumbrances are committed in fund
balance. At the fund level, expenditures may not legally exceed appropriations.

2. CASH AND INVESTMENTS

A. Summary of Cash and Investments

The TDA Funds participate in the City’s cash and investment poo l that includes all other City funds, which the City Treasurer invests to enhance interest earnings. The pooled interest earned is allocated to each fund based on average month-end and investment balances in these funds.

As of June 30, 2021, the TDA Funds’ cash and investment balance was comprised of the following:

Balance
June 30, 2021
Governmental funds 48,064$
Proprietary fund 553,973
Total 602,037 $

ITEM 7
City of Ceres
Transportation Development Act Funds
Notes to Financial Statements, Continued
For the year ended June 30, 2021

21 2. CASH AND INVESTMENTS, Continued

B. Investments

The investments made by the City Treasurer are limited to those allowable under State statutes as incorporated into the City’s Investment Policy, which is more conservative than State statutes.

Under provisions of this policy, the City is authorized to invest in the following types of investments:

Medium-term Corporate Notes G overnment Agency Securities Certificates of Deposit Treasury Bills and Notes
Bankers' Acceptances Passbook Savings Accounts
Commercial Paper State of California Local Agency Investment Fun d Repurchase Agreem ents

C. Risk Disclosure

Specific maturities of investments depend on liquidity needs. A t June 30, 2021, the City’s pooled cash and investments had the following maturities:

Maturity Percentage of Investment
Less than one year 86.7%
One to two years 4.2%
Two to three years 9.1%

Credit Risk: It is the City’s policy that commercial paper have a rating of “A-1” or higher by a nationally recognized statistical ra ting organization (NRSRO) a nd have a maturity date not exceeding 180 days from the date of purchase. Medium-term notes, with a final maturity not exceeding five years from the date of purchase, must h ave a rating of A or the equiv alent by a NRSRO. Federal instrumentalities must have a rat ing of AAA or the equivalent b y a NRSRO at the time of purchase with a maximum maturity of five years at the time of purchase. LAIF has a separate investment policy, governed by Government Code Sections 16480-16481.2, that provid es credit standards for its investments.

Custodial Credit Risk: For an investment, custodial credit risk is the risk that, in the event of the failure of the counter party, the City w ill not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. All securities, with the exception of the money market funds and LAIF, are held by a third-party custodian (Union Bank of California Trust Division).

Union Bank is a registered memb er of the Federal Reserve Bank. The securities held by Union Bank are in street name, and an account number assigned to the City identifies ownership.

ITEM 7
City of Ceres
Transportation Development Act Funds
Notes to Financial Statements, Continued
For the year ended June 30, 2021

22 2. CASH AND INVESTMENTS, Continued

D. External Investment Pool – Local Agency Investment Fund

The City’s investments with LAIF at June 30, 2021, included a portion of the pool funds invested in Structured Notes and Asset-Backed Securities. These investments may include the following:

• Structured Notes - debt securities (other than A sset-Backed Securities) whose cash-flow characteristics (coupon rate, rede mption amount, or stated maturity) depend upon one or more indices and/or that have embedded forwards or options.

• Asset-Backed Securities - generally mortgage-backed securities which 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 Collatera lized Mortgage Obligations) or credit card receivables.

The City is a voluntary participant in California Local Agency Investment Fund (LAIF), which is regulated by California Governme nt Code Section under the overs ight of the Local Investment Advisory Board (Board). The Board consists of five members as designated by state statute and is chaired by the State Treasurer who is responsible for day to da y administration of LAIF. The total amount invested by all public agencies as of June 30, 2021 was $37,066,592,514 of which the City had a balance of $4,511,560. LAIF is part of the California Pooled Money Investment Account (PMIA), which at June 30, 2021 has a portfolio with market valuation of $193,463,490 thousand. Of the total invested, 97.69% was invested in non-derivative financial products and 2.31% in structured notes and asset-backed securities. The fair value of the City’s investmen t in this pool is reported in the accompanying financial statements at amounts based upon the City’s pro-rata share o f the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting rec ords maintained by LAIF, which are recorded on an amortized cost basis.

3. DUE TO THE CITY OF CERES

Due to and from balances result from the time lag between the d ates that (1) interfund goods and services are provided or reimbur sable expenditures occur, (2) t ransactions are recorded in the accounting system, and (3) payments between TDA Fund and the City of Ceres are made.

The Pedestrians and Bicycle Facilities Fund had a due to the Ci ty of Ceres balance of $25 as of June 30, 2021 and the Streets and Road Fund had a due to the City of Ceres of $20,989.

ITEM 7

7080 Donlon Way, Suite 204, Dublin, CA 94568 ● phone (925) 556-6200 ● fax: (707) 232-6226 1102 South Main Street, #1, Fort Bragg, CA 95437 ● phone (707) 964-6325 www.jjacpa.com

REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON

COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL

STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING

STANDARDS

To the Honorable Mayor and Members of the City Council
of the City of Ceres
Ceres, California

We have audited, in accordance with the auditing standard gener ally accepted in the United States of America and the standards applicable to financial audits contai ned in Government Auditing Standards, issued by the Comptroller General of the United States, the fin ancial statements of the Transportation Development Act Funds (TDA Funds) of the City of Ceres (City) as of and for the year ended June 30, 2021, and the related notes to the financial statements, which collectively comprise the TDA Fund’s basic financial statements, and have issued our report thereon dated June 23, 2022.

Internal Control over Financial Reporting

In planning and performing our audit of the financial statement s, we considered the City’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opi nion on the effectiveness of internal control of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allo w management or employees, in the normal course of performing the ir assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control, such that the re 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 weaknes s, yet important enough to merit attention by those charged with governance.

Our consideration of the 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 considered to be material weaknesses. However, material weaknesses may exist that we have not identified.

ITEM 7

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the Cit y’s TDA Funds financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements (including those f or the public transportation modernization improvement and service enhancem ent account (PTMISEA) of the tr ansportation development act funds), noncompliance with which could ha ve a direct and material effec t on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion.

The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Purpose of this Report
The purpose of this report is solely to describe the scope of o ur testing of internal control and compliance and the result of that testing, and not to provide a n opinion on the effectiveness of the entity’s internal control or on compliance. This report is an i ntegral 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.

]]TVcT? \ÇvA

J u n e 2 3 , 2 0 2 2 JJACPA, INC.

Dublin, CA

ITEM 7

7080 Donlon Way, Suite 204, Dublin, CA 94568 ● phone (925) 556-6200 ● fax: (707) 232-6226 1102 South Main Street, #1, Fort Bragg, CA 95437 ● phone (707) 964-6325 www.jjacpa.com

INDEPENDENT AUDITORS’ COMPLIANCE REPORT

To the Honorable Mayor and Members of the City Council
of the City of Ceres
Ceres, California

We have examined City of Ceres’, California (City) Transportati on Development Act Funds (TDA Funds) compliance with the types of compliance requirements des cribed in Section 6666 of the Rules and Regulations of the California Administrative Code in the Transportation Development Act Statutes and Administrative Code for 1987 (the Act) and the allocation instructions and resolutions of th e Metropolitan Transportation Co mmission and the Stanislaus Counc il of Governments during the year ended June 30, 2021. The City’s man agement is responsible for c ompliance with the requirements of laws, regulations, contracts, and grants applicable to the TDA Funds. Our responsibility is to express an opinion on the TDA Funds’ compliance based on our audit.

Our examination was conducted in accordance with attestation st andards established by the American Institute of Certified Public A ccountants, and accordingly, inc luded examining on a test basis, evidence about TDA Funds’ compli ance with those requirements an d performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination of the TDA Funds’ compliance with specified requirements.

In our opinion, the TDA Funds complied, in all material respect s, with the aforementioned requirements for the year ended June 30, 2021.

This report is intended for the information of the Mayor, City Council Members, management, and the Stanislaus Council of Governments, and is not intended to be, a nd should not be, used by anyone other than these specified parties.

]]TVcT? \ÇvA
June 23, 2022 JJACPA, Inc.

Dublin, CA

ITEM 7
ITEM 7

COUNCIL AGENDA REPORT

CITY COUNCIL

Javier Lopez, Mayor
James Casey, Dist.1
Vacant, Dist. 2
Bret Silveira, Dist. 3
Mike Kline, Dist. 4
MEETING DATE: November 14, 2022
TO: Mayor and City Council
FROM: Alex Terrazas, City Manager
CONTACT: Tamra Spade, Economic Development/Redevelopment Manager Tamra [email protected], (209) 538-5773
SUBJECT:

Resolution No. 2022 -141, Approving Amendment Number 1
to an Agreement for Economic Development Services with
Chabin Concepts, Inc . and Authorizing the City Manager to Execute the Amendment
RECOMMENDED COUNCIL ACTION:

Staff recommends that City Council approve Amendment Number 1 to the agreement with Chabin Concepts, Inc. for the Ceres Economic Development Strategic Plan (“CEDSP” or “Plan”) Update and authorize the City Manager to execute the amendment.

I. BACKG
ROUND:

On June 27, 2022 by Resolution 2022-72, the City Council approved an agreement with Chabin Concepts to assist the City in updating the CEDSP. Due to the vacancy of the Economic Development Manager position from July to October 2022, the project did not proceed. Close coordination between Chabin Concepts and the Economic Development Manager is vital for a successful update and long- term implementation of the Plan. Since hiring a new Economic Development Manager, staff is now in a position to continue updating the Plan.

The objective of the CEDSP process was to define appropriate, realistic and implementable strategic initiatives and actions that will help the City of Ceres “step up to the next level” and achieve meaningful economic development goals and objectives.

Economic development is marketplace- driven and opportunity -based.

Consequently, success depends on staying current with market conditions and quickly adapting to opportunities as they arise.

ITEM 8
The CEDSP assesses Ceres’ economic outlook through its workforce characteristics, industry cluster networks, fiscal capacity, and existing backbone infrastructure to serve the City’s economic development needs. The CEDSP provides examples of effective economic development initiatives/programs that could benefit the City, and also recommends one inclusive goal with relevant objectives and examples of workable tactics.

Implementing the CEDSP will confirm the City’s leadership role in facilitating and supporting a strong and healthy local economy. Given changing economic conditions, local governments are competing for business interests. As we move forward, the City will need to periodically update the Plan to adjust to changing economic conditions and to continue competing in the region.

II. RE
ASONS FOR RECOMMENDATION:

The original agreement with Chabin Concepts had a deadline of January 31, 2023 and needs to be extended accordingly. Staff recommends extending the agreement to April 30, 2023. The extension will allow time to make the necessary update to the CEDSP. The current CEDSP covers years 2013 – 2020. Approval of the resolution will allow Chabin Concepts to update the CEDSP, which will outline and update the Plan through 2027.

III. F
ISCAL IMPACTS:

The cost of this update to the CEDSP is $45,500.00. These funds were budgeted and allocated for this purpose in the Fiscal Year 2021-22 budget authorized by City Council in June 2021 in accounts 466.58.0299 and 469.59.0299. The authorization of this recommended update has no impact on the City’s General Fund.

IV. E
XISTING POLICY / RELATIONSHIP TO THE STRATEGIC PLAN:

The recommendation and resolution falls within the scope of Goals and Strategies of the CEDSP.

V. P
OLICY ALTERNATIVES :

N/A

VI. I
NTERDEPARTMENTAL COORDINATION:

N/A
VII. P UBLIC PARTICIPATION:

N/A
VIII. EN VIRONMENTAL REVIEW :

ITEM 8
N/A
IX. ST EPS FOLLOWING APPROVAL:

Upon City Council approval, the City Manager will execute the agreement with Chabin Concepts, Inc.

Approved by: ______________________________
Alex Terrazas, City Manager

Attachments:

1. Resolution

2. Amendment Number 1 to Agreement for Economic Development Services – Chabin Concepts, Inc.

ITEM 8
ITEM 8

RESOLUTION NO. 2022-141

APPROVING AMENDMENT NUMBER 1 TO AN AGREEMENT FOR ECONOMIC DEVELOPMENT SERVICES WITH CHABIN CONCEPTS, INC. AND AUTHORIZING

THE CITY MANAGER TO EXECUTE THE AMENDMENT

THE CITY COUNCIL
City of Ceres

WHEREAS, in 2013, the City completed the City of Ceres Economic Development Strategic Plan (CEDSP); and

WHEREAS, the CEDSP covered the years 2013-2020 and identified key strategic initiatives including Effective Economic Development Implementation and Marketing Programs; and

WHEREAS, as of the end of 2020, the CEDSP needed to be updated; and

WHEREAS, in June 2021, City Council authorized the Fiscal Year 2021-22 budget which authorized an update to the CEDSP; and

WHEREAS, on June 27, 2022 by Resolution 2022- 72, City Council ap proved a contract with Chabin Concepts, Inc. to update the CEDSP through 2027; and

WHEREAS, due to a vacancy in the Economic Development Division, progress on the CEDSP update was stalled, and an extension to the term of the agreement with Chabin Concepts through April 30, 2023 is required to complete the update to the CEDSP.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Ceres does hereby approve Amendment #1 to an agreement for Economic Development Services by Chabin Concepts, Inc. and authorizes the City Manager to execute the amendment.

PASSED AND ADOPTED by the Ceres City Council at a regular meeting thereof held on the 14
th day of November 2022, by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ABSTAIN: Councilmembers:

________________________________
Javier Lopez, Mayor
ATTEST:

________________________________
Fallon Martin, City Clerk
ITEM 8
ITEM 8
ITEM 8
ITEM 8
{CW113757.2}

COUNCIL AGENDA REPORT

CITY COUNCIL

Javier Lopez, Mayor
James Casey, Dist.1
Vacant, Dist. 2
Bret Silveira, Dist. 3
Mike Kline, Dist. 4

MEETING DATE: November 14, 2022

TO: Mayor and City Council

FROM: Alex Terrazas, City Manager
Nubia Goldstein, City Attorney

CONTACT: Nubia Goldstein, City Attorney
[email protected]

SUBJECT: Final Adoption of Ordinance No. 2022- 1073, An Ordinance of the City Council of the City of Ceres Amending Title 9, Public Peace, Morals and Welfare, of the Ceres Municipal Code t o Add Chapter 22, Adopting a Military Equipment Use Policy

RECOMMENDED COUNCIL ACTION:

Staff recommends Council adopts Ordinance No. 2022- 1073 amending Title 9, Public Peace, Morals, and Welfare, of the Ceres Municipal Code to Add Chapter 22, Adopting a Military Equipment Use Policy.

I. BACKG
ROUND:

On September 30, 2021, Governor Newsom signed into law Assembly Bill 481 (“AB 481”) relating to the use of military equipment by law enforcement agencies. AB 481, codified in California Government Code sections 7070 through 7075, requires that any law enforcement agency seeking to use existing or new military equipment to create a military use policy, present the policy for governing board approval by ordinance, and produce annual reports pertaining to the policy and use of military equipment.

The City of Ceres (“City”) Police Department (“Departmen t”) seeks the City Council’s adoption of Ordinance No. 2022- 1073 (“Ordinance”), which establishes the requirements of the City’s Military Equipment Use Policy as required under AB 481 to allow the department to continue using the vital equipment in the course of the Department’s activities and adopt the policy.

ITEM 9
{CW113757.2}
II. REASONS FOR RECOMMENDATION:

The proposed ordinance (“Ordinance”) was introduced with the first reading on October 24, 2022. California Government Code, Section 36934, requires ordinances return to Council for a second reading and adoption.

The Ordinance establishes the requirements for the Department’s Military Equipment Use Policy (“Policy”) and approves a Policy. Under AB 481 and the Ordinance, the Policy must outline each item identified in Government Code section 7070 as military equipment that the City currently owns or uses. The military equipment (the “Equipment”) identified in Government Code section 7070 that must be identified in the Policy, includes:

1. Unmanned, remotely piloted, air or ground vehicles, such as drones.

2. Armored vehicles.

3. Humvees.

4. Battering rams.

5. Firearms and ammunition of .50 caliber or greater, not including shotguns and shotgun ammunition.

6. Flashbangs and other explosive breaching tools.

7. Rubber bullets and other associated specialty impact munitions.

Where the Department seeks to use any of the Equipment, the City Council must adopt a Policy by ordinance that must include:

1. A description of the Equipment, the quantity sought, its capabilities, and expected lifespan.

2. The purposes and authorized uses of the Equipment.

3. The fiscal impact of acquiring and maintaining each type of Equipment.

4. The legal and procedural rules that govern use of the Equipment.

5. The training required to use the Equipment.

6. The compliance mechanisms to enforce the Policy.

7. The procedure for the public to register complaints or submit questions about the Equipment.

If the City Council elects to adopt the Ordinance, the City Council both establishes the criteria for military use policy that will be added to the City of Ceres Municipal Code and adopts a Policy. As required under AB 481 and the Ordinance, the Policy proposed for adoption has been made publicly available on the Department’s website thirty (30) days ITEM 9
{CW113757.2}
prior to this meeting to consider the Ordinance. In adopting the Ordinance to approve the Policy, the City Council must find all of the following:

1. The Equipment is necessary because there is no reasonable alternative that can achieve the same objective of officer and civilian safety.

2. The Policy will safeguard the public’s welfare, safety, civil rights, and civil liberties.

3. If Equipment is being purchased, the Equipment is reasonably cost effective compared to available alternatives that can achieve the same objective of officer and civilian safety.

4. Prior Equipment use complied with the Poli cy that was in effect at that time or where Equipment use did not comply, corrective action has been taken to remedy nonconforming use and ensure future compliance.

Should the City Council adopt the Ordinance, each calendar year, an annual military equipment report will be submitted to City Council for review and approval, as long as military equipment is maintained by the Department. As required under the Ordinance, the annual military equipment report must include:

1. A summary of how the Equipment was used and the purpose of its use.

2. A summary of any complaints or concerns received concerning the Equipment.

3. The results of any internal audits, any information about violations of the Policy, and any actions taken in response.

4. The total annual cost for each type of Equipment, including acquisition, personnel, training, transportation, maintenance, storage, upgrade, and other ongoing costs, and from what source funds will be provided for the Equipment in the calendar year following submission of the annual military equipment report.

5. The quantity possessed for each type of Equipment.

6. If the law enforcement agency intends to acquire additional Equipment in the next year, the quantity sought for each type of Equipment.

Future acquisi tions of any item deemed “military equipment” will require further public meetings, Policy updates, and City Council approval.

Items identified as military equipment by AB 481 are resources used in overall best practices for law enforcement agencies throughout the country. There are numerous examples of incidents that demonstrate the need for more effective options for law enforcement, such as patrol rifles and armored rescue vehicles. In addition, military equipment items are field-tested tools used to enhance the safety of communities and the officers that serve them.

ITEM 9
{CW113757.2}
III. FISCAL IMPACTS:

No budget adjustment would be required. Annual maintenance costs to support the Equipment identified in the Policy have already been budgeted.

IV. E XISTING POLICY / RELATIONSHIP TO THE STRATEGIC PLAN :

N/A

V. P OLICY ALTERNATIVES :

N/A

VI. I NTERDEPARTMENTAL COORDINATION:

N/A

VII. P
UBLIC PARTICIPATION:

The public is encouraged to provide input at the City Council meeting.

VIII. EN
VIRONMENTAL REVIEW :

N/A

IX. ST
EPS FOLLOWING APPROVAL :

The ordinance shall take effect thirty (30) days after passage by the City Council, and following the affirmative vote of a majority of the members of the City Council. Within 15 days of its adoption, a summary of the ordinance shall be published in the C eres Courier, which summary shall include the names of those Councilmembers voting for and against the ordinance.

S
ubmitted by: ___/s/_____________________________
Nubia Goldstein, City Attorney

Approved by: __________________________________
Alex Terrazas, City Manager

Attachments:

1. O
rdinance No. 2022- 1073, Establishing the requirements for a Military Equipment Use Policy and approving of the City of Ceres Policy Department Military Equipment Use Policy

2. C
eres Police Department Military Equipment Use Policy

3. Public Hearing Notice
ITEM 9
{CW113760.2}
ORDINANCE NO. 2022-1073

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CERES
AMENDING TITLE 9, PUBLIC PEACE, MORALS AND WELFARE, OF THE CERES MUNICIPAL CODE TO ADD CHAPTER 22, ADOPTING A MILITARY EQUIPMENT

USE POLICY

THE CITY COUNCIL
City of Ceres
WHEREAS, On September 30, 2021, Governor Gavin Newsom signed into law Assembly Bill 481, relating to the use of military equipment by law enforcement agencies; and
WHEREAS, Assembly Bill 481, codified at California Government Code sections 7070 through 7075, requires law enforcement agencies to obtain approval of the applicable governing body by an ordinance adopting a military equipment use policy at a regular meeting held pursuant to open meeting laws, prior to taking certain actions relating to the funding, acquisition, or use of military equipment. The term “Military Equipment” is defined in California Government Code section 7070; and WHEREAS, the Ceres Police Department currently has items in its inventory deemed to be Military Equipment under the provisions of Assembly Bill 481, and California Government Code 7070 through 7075; and
WHEREAS, the Ceres Police Department has established a Military Equipment Use Policy that meets the requirements set forth in Assembly Bill 481; and WHEREAS, the Military Equipment identified in the Ceres Police Department’s Military Equipment Use Policy is necessary because there are no reasonable alternatives that can achieve the same objectives for officer and civilian safety; and WHEREAS, the Ceres Police Department’s Military Equipment Use Policy will safeguard the public’s welfare, safety, civil rights, and civil liberties.

NOW, THEREFORE, THE CITY OF CERES CITY COUNCIL DOES ORDAIN AS FOLLOWS:

SECTION 1. Title 9, Public Peace, Morals, and Welfare, of the Ceres Municipal Code shall be amended to add Chapter 9.22, Military Equipment Use Policy Adoption, that shall read as follows:

Chapter 22

MILITARY EQUIPMENT USE POLICY ADOPTION

ITEM 9
{CW113760.2}
Sections:

9.22.010 Findings.

9.22.020 Determinations.

9.22.010 Findings.

A. On September 30, 2021, Governor Gavin Newsom signed into law Assembly Bill 481, relating to the use of military equipment by law enforcement agencies.

B. Assembly Bill 481, codified at California Government Code sections 7070 through 7075, requires law enforcement agencies to obtain approval of the applicable governing body, by an ordinance adopting a military equipment use policy, at a regular meeting held pursuant to open meeting laws, prior to taking certain actions relating to the funding, acquisition, or use of military equipment. The term military equipment is defined in California Government Code section 7070.

C. Assembly Bill 481 allows the governing body of a city to approve the funding, acquisition, or use of military equipment within its jurisdiction only if it makes the determinations established in California Government Code section 7070, subdivision (d)(1).

D. The proposed military equipment use policy is found within Ceres Police Department Policy and Procedural manual.

E. Ceres Police Department Policy was published on the Ceres Police Department’s internet website on September 21, 2022. In addition, the Ceres Police Department, Military Equipment Use Policy was presented to City Council on October 24, 2022.

F. The Ceres Poli ce Department, Military Equipment Use Policy, meets the requirements of California Government Code section 7070, subdivision (d).

9.22.020 Determinations.

Based on the findings above, in addition to the information provided to the City Council at the public meeting, the City Council determines as follows:

1. The military equipment identified in the Ceres Police Department, Military Equipment Use Policy, is necessary because there are no reasonable alternatives that can achieve the same objectives of officer and civilian safety.

2. Ceres Police Department, Military Equipment Use Policy, will safeguard the public’s welfare, safety, civil rights, and civil liberties.

3. The military equipment identified in the Ceres Police Department, Military Equipment Use Poli cy, is reasonably cost -effective compared to available alternatives that can achieve the same objective of officer and civilian safety.

4. Ceres Police Department, Military Equipment Use Policy, is approved and adopted.

ITEM 9
{CW113760.2}
SECTION 2. SEVERABILITY. If any sectio n, subdivision, sentence, clause, phrase, or portion of this Ordinance is, for any reason, held invalid or unconstitutional by any court of competent jurisdiction, such portion shall be deemed a separate, distinct, and independent provision, and such holding shall not affect the validity of the remaining portions thereof.

SECTION 3. PUBLICATION AND EFFECTIVE DATE. This Ordinance shall become effective thirty (30) days from and after its final passage and adoption, provided it is published in a newspaper of general circulation at least within fifteen (15) days after its passage or a summary of the Ordinance is published in a newspaper of general circulation at least five (5) days prior to adoption and again at least within fifteen (15) days after its passage.

SECTION 4. CERTIFICATION OF COUNCIL ADOPTION AND APPROVAL. This Ordinance was introduced at a regular meeting of the City Council held on the 24 th day of
October 2022, and passed and adopted as Ordinance No. 2022 -1073 at a regular meeting of City Council held on the 14th day of November, 2022 by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ABSTAIN: Councilmembers:

________________________________
Javier Lopez, Mayor
ATTEST:

________________________________
Fallon Martin, City Clerk

APPROVED AS TO FORM:

________________________________
Nubia I. Goldstein, City Attorney

Published with permission by Ceres Police Division
Military Equipment - 513
Military Equipment
709.1 PURPOSE AND SCOPE
The purpose of this policy is to provide guidelines for the approval, acquisition, and reporting requirements of military equipment (Government Code § 7070; Government Code § 7071; Government Code § 7072).
709.1.1 DEFINITIONS
Definitions related to this policy include (Government Code § 7070):

Governing body
– The elected or appointed body that oversees the Department.

Military equipment – Includes but is not limited to the following:
• Unmanned, remotely piloted, powered aerial or ground vehicles. • Mine-resistant ambush-protected (MRAP) vehicles or armored personnel carriers. • High mobility multipurpose wheeled vehicles (HMMWV), two-and-one-half-ton trucks, five-ton trucks, or wheeled vehicles that have a breaching or entry apparatus attached. • Tracked armored vehicles that provide ballistic protection to their occupants. • Command and control vehicles that are either built or modified to facilitate the operational control and direction of public safety units. • Weaponized aircraft, vessels, or vehicles of any kind. • Battering rams, slugs, and breaching apparatuses that are explosive in nature. This does not include a handheld, one-person ram.
• Firearms and ammunition of_.50 caliber or greater, excluding standard-issue shotguns and standard-issue shotgun ammunition.
• Specialized firearms and ammunition of less than_.50 caliber, including firearms and accessories identified as assault weapons in Penal Code § 30510 and Penal Code § 30515, with the exception of standard-issue firearms.
• Any firearm or firearm accessory that is designed to launch explosive projectiles. • Noise-flash diversionary devices and explosive breaching tools. • Munitions containing tear gas or OC, excluding standard, service-issued handheld pepper spray.
• TASER® Shockwave, microwave weapons, water cannons, and long-range acoustic devices (LRADs).
• Kinetic energy weapons and munitions.
• Any other equipment as determined by a governing body or a state agency to require additional oversight.

Published with permission by Ceres Police Division
Military Equipment - 514
709.2 POLICY
It is the policy of the Ceres Police Division that members of this department comply with the provisions of Government Code § 7071 with respect to military equipment. 709.3 MILITARY EQUIPMENT COORDINATOR
The Chief of Police should designate a member of this department to act as the military equipment coordinator. The responsibilities of the military equipment coordinator include but are not limited to:
(a) Acting as liaison to the governing body for matters related to the requirements of this policy.
(b) Identifying department equipment that qualifies as military equipment in the current possession of the Department, or the equipment the Department intends to acquire that requires approval by the governing body.
(c) Conducting an inventory of all military equipment at least annually. (d) Collaborating with any allied agency that may use military equipment within the jurisdiction of Ceres Police Division (Government Code § 7071). (e) Preparing for, scheduling, and coordinating the annual community engagement meeting to include:

1. Publicizing the details of the meeting.

2. Preparing for public questions regarding the department’s funding, acquisition, and use of equipment.
(f) Preparing the annual military equipment report for submission to the Chief of Police and ensuring that the report is made available on the department website (Government Code § 7072).
(g) Establishing the procedure for a person to register a complaint or concern, or how that person may submit a question about the use of a type of military equipment, and how the Department will respond in a timely manner.
709.4 MILITARY EQUIPMENT INVENTORY
The following constitutes a list of qualifying equipment for the Department:

See attachment at the end of Section 709 - starting at page 686 709.5 APPROVAL
The Chief of Police or the authorized designee shall obtain approval from the governing body by way of an ordinance adopting the military equipment policy. As part of the approval process, the Chief of Police or the authorized designee shall ensure the proposed military equipment policy is submitted to the governing body and is available on the department website at least 30 days prior to any public hearing concerning the military equipment at issue (Government Code § 7071). The ITEM 9
Ceres Police Division
Ceres PD Policy Manual
Military Equipment
Copyright Lexipol, LLC 2022/09/01, All Rights Reserved.

Published with permission by Ceres Police Division
Military Equipment - 515
military equipment policy must be approved by the governing body prior to engaging in any of the following (Government Code § 7071):
(a) Requesting military equipment made available pursuant to 10 USC § 2576a. (b) Seeking funds for military equipment, including but not limited to applying for a grant, soliciting or accepting private, local, state, or federal funds, in-kind donations, or other donations or transfers.
(c) Acquiring military equipment either permanently or temporarily, including by borrowing or leasing.
(d) Collaborating with another law enforcement agency in the deployment or other use of military equipment within the jurisdiction of this department. (e) Using any new or existing military equipment for a purpose, in a manner, or by a person not previously approved by the governing body.
(f) Soliciting or responding to a proposal for, or entering into an agreement with, any other person or entity to seek funds for, apply to receive, acquire, use, or collaborate in the use of military equipment.
(g) Acquiring military equipment through any means not provided above. 709.6 COORDINATION WITH OTHER JURISDICTIONS
Military equipment used by any member of this jurisdiction shall be approved for use and in accordance with this Department Policy. Military equipment used by other jurisdictions that are providing mutual aid to this jurisdiction or completing a lawful function shall comply with their respective military equipment use policies.
709.7 ANNUAL REPORT
Upon approval of a military equipment policy, the Chief of Police or the authorized designee should submit a military equipment report to the governing body for each type of military equipment approved within one year of approval, and annually thereafter for as long as the military equipment is available for use (Government Code § 7072).

The Chief of Police or the authorized designee should also make each annual military equipment report publicly available on the department website for as long as the military equipment is available for use. The report shall include all information required by Government Code § 7072 for the preceding calendar year for each type of military equipment in department inventory. 709.8 COMMUNITY ENGAGEMENT
Within 30 days of submitting and publicly releasing the annual report, the Department shall hold at least one well-publicized and conveniently located community engagement meeting, at which the Department should discuss the report and respond to public questions regarding the funding, acquisition, or use of military equipment.

Published with permission by Ceres Police Division
Military Equipment - 516
709.9 USE IN EXIGENT CIRCUMSTANCES
In exigent circumstances and with the approval of the Chief of Police or his/her designee, the Police Department may acquire, borrow and/or use Military Equipment that is not included in the Military Equipment Use Police.

If the Police Department acquires, borrows and/or uses Military Equipment in exigent circumstances, in accordance with this section, it must take all of the following actions:

Provide written notice of that acquisition or use to the City Council within 30 days following the completion of such Exigent Circumstance, unless such information is confidential or privileged under local, state or federal law.

If it is anticipated that the use will continue beyond the Exigent Circumstance, submit a proposed amended Military Equipment Use Policy to the City Council within 90 days following the borrowing, acquisition and/or use, and receive approval, as applicable, from the City Council.

Include the Military Equipment in the Police Department's next annual Military Equipment Report.

Published with permission by Ceres Police Division
LEXIPOL FINAL APRIL 2022.pdf - 686
LEXIPOL FINAL APRIL 2022.pdf
LEXIPOL FINAL APRIL 2022.pdf
ITEM 9
2022 Ceres Police Department Military Equipment Use Supplement California Government Code §7071(b) requires that law enforcement agencies submit a proposed Military Equipment Use Policy to their governing body for approval.

California Government Code §7070(d) describes a Military Equipment Use Policy as a publicly released, written document that includes, at Ma minimum, all of the following:

1. A description of each type of Military Equipment, the quantity sought, its capabilities, expected lifespan, and product descriptions from the manufacturer of the Military Equipment.

2. The purposes and authorized uses for which the law enforcement agency or the state agency proposes to use each type of Military Equipment.

3. The fiscal impact of each type of Military Equipment, including the initial costs of obtaining the equipment and estimated annual costs of maintaining the equipment.

4. The legal and procedural rules that govern each authorized use.

5. The training, including any course required by the Commission on Peace Officer Standards and Training, which must be completed before any officer, agent, or employee of the law enforcement agency or the state agency is allowed to use each specific type of Military Equipment to ensure the full protection of the public's welfare, safety, civil rights, and civil liberties and full adherence to the Military Equipment use policy.

6. The mechanisms to ensure compliance with the Military Equipment use policy, including which independent persons or entities have oversight authority, and, if applicable, what legally enforceable sanctions are put in place for violations of the policy.

7. For a law enforcement agency, the procedures by which members of the public may register complaints or concerns or submit questions about the use of each specific type of Military Equipment, and how the law enforcement agency will ensure that each complaint, concern, or question receives a response in a timely manner.

California Government Code § 7070(c) defines Military Equipment as any of the following:

1. Unmanned, remotely piloted, powered aerial or ground vehicles.

2. Mine-resistant ambush-protected (MRAP) vehicles or armored personnel carriers. However, police versions of standard consumer vehicles are specifically excluded from this subdivision.

3. High mobility multipurpose wheeled vehicles (HMMWV), commonly referred to as Humvees, two and one-half-ton trucks, five-ton trucks, or wheeled vehicles that have a breaching or entry apparatus attached. However, unarmored all-terrain vehicles (ATVs) and motorized dirt bikes are specifically excluded from this subdivision.

4. Tracked armored vehicles that provide ballistic protection to their occupants and utilize a tracked system instead of wheels for forward motion.

5. Command and control vehicles that are either built or modified to facilitate the operational control and direction of public safety units.

6. Weaponized aircraft, vessels, or vehicles of any kind.

7. Battering rams, slugs, and breaching apparatuses that are explosive in nature. However, items designed to remove a lock, such as bolt cutters, or a handheld ram designed to be operated by one person, are specifically excluded from this subdivision.

ITEM 9

8. Firearms of .50 caliber or greater. However, standard issue shotguns are specifically excluded from this subdivision.

9. Ammunition of .50 caliber or greater. However, standard issue shotgun ammunition is specifically excluded from this subdivision.

10. Specialized firearms and ammunition of less than .50 caliber, including assault weapons as defined in Sections 30510 and 30515 of the Penal Code, with the exception of standard issue service weapons and ammunition of less than .50 caliber that are issued to officers, agents, or employees of a law enforcement agency or a state agency.

11. Any firearm or firearm accessory that is designed to launch explosive projectiles.

12. "Flashbang" grenades and explosive breaching tools, "tear gas," and "pepper balls," excluding standard, service-issued handheld pepper spray.

13. Taser Shockwave, microwave weapons, water cannons, and the Long-Range Acoustic Device (LRAD).

14. The following projectile launch platforms and their associated munitions: 40mm projectile launchers, "bean bag," rubber bullet, and specialty impact munition (SIM) weapons.

15. Any other equipment as determined by a governing body or a state agency to require additional oversight.

16. Notwithstanding paragraphs (1) through (15), "Military Equipment" does not include general equipment not designated as prohibited or controlled by the federal Defense Logistics Agency.

Pursuant to California Government Code §7070(d)(6), and in accordance with California Government Code §7072, the Ceres Police Department will submit to the Ceres City Council an Annual Military Equipment Report and will make that report publicly available on its internet website. The Annual Military Equipment Report will include the following information for the immediately preceding calendar year for each type of military equipment:

1. A summary of how the military equipment was used and the purpose of its use.

2. A summary of any complaints or concerns received concerning the military equipment.

3. The results of any internal audits, any information about violations of the military equipment use policy, and any actions taken in response.

4. The total annual cost for each type of military equipment, including acquisition, personnel, training, transportation, maintenance, storage, upgrade, and other ongoing costs, and from what source funds will be provided for the military equipment in the calendar year following submission of the annual military equipment report.

5. The quantity possessed for each type of military equipment.

6. If the law enforcement agency intends to acquire additional military equipment in the next year, the quantity sought for each type of military equipment.

The Ceres City Council will use the Annual Military Equipment Report as a mechanism to ensure the Ceres Police Department’s compliance with this Military Equipment Use Policy, and to help it determine whether to approve, revise, or revoke components of the Military Equipment Use Policy for the subsequent year.

Pursuant to California Government Code §7070(d)(7), members of the public may register complaints or concerns or submit questions about the use of each specific type of Military Equipment in this policy by any of the following means:

ITEM 9

1. Via Ceres Police website; www.ci.ceres.ca.us

2. Via phone call to the Police Administrative Sergeant at (209) 538-5719

3. Via mail sent to: Ceres Police Department
Attn: Military Equipment Use Coordinator
2727 3rd. St.

Ceres, CA. 95307
The Ceres Police Department is committed to responding to complaints, concerns and/or questions received through any of the above methods in a timely manner.

1. Unmanned Aircraft System (UAS): An unmanned aircraft along with the associated equipment necessary to control it remotely.

a. Manufacturer description, quantity, capabilities, and purchase cost of current UAS:
i. Matrice 300, cost $30,000, quantity 1: The DJI Matrice 300 is a powerful, industrial-grade fight platform with world-class agility and speed. The M300 has a flight time of 55 minutes without a payload and 45 minutes with 1 payload (one external camera). It is equipped with an anti- collision strobe beacon. It has ADS-B for sensing nearby air traffic. It has full 6-way directional sensing and positioning. It has a IP45 weather resistant rating. The M300 has both pinpoint and smart track modes. It is equipped with a distance finder. The M300 RTK’s mechanical design, along with quick release landing gears and mounted folding arms, makes it easy to transport, store, and prepare for flight.
ii. Mavic II Enterprise, cost $5,000.00, quantity 3: The DJI Mavic II Enterprise features omnidirectional Vision Systems and Infrared Sensing Systems, and comes with a fully stabilized 3-axis gimbal camera with an equivalent 24-48 mm 2x optical enterprise lens capable of shooting 4k videos and 12 megapixels photos that support up to 6x FHD zoom. DJI signature tecUologies such as Obstacle Sensing and the Advanced Pilot Assistance System, help you capture complex shots effortlessly. Additional features like the built in AirSense make you aware of your surrounding airspace, and password protection helps you maintain secure access to your aircraft and protect your data. The Mavic II Enterprise also has attachable modular accessories like the M2E spotlight, M2E Beacon, and M2E Speaker that are purpose built for various applications. The Mavic II Enterprise boasts a maximum flight speed of 44.7 mph and a maximum flight time of 31 minutes.
iii. Mavic Mini 2, quantity 1, cost $449.00 (per UAV): The DJI Mavic Mini 2 features a downward vision system and infrared sending system. The Mini 2 can hover and fly indoors as well as ITEM 9
outdoors and automatically initiate Return to Home feature. It comes with a fully stabilized 3-azis gimbal and 1/2.3” sensor camera. The Mini 2 camera is a 4k video camera and takes 12MP photos The Mavic Mini 2 has a maximum flight speed of 36 mph and a maximum flight time of 31 minutes.
iv. Mavic Mini, quantity 4, cost $389.00 (per UAV): The DJI Mavic Mini features downward vision system and infrared sending system The Mini 2 can hover and fly indoors as well as outdoors and automatically initiate Return to Home feature. It comes with a fully stabilized 3-azis gimbal and 1/2.3” sensor camera The Mini camera is a 2.7K video camera and takes 12MP photos. The Mavic Mini boasts a maximum flight speed of 29 mph and a maximum flight time of 30 minutes.

b. Purpose and authorized use: UAS/Drones and robots may be utilized to enhance the Department’s mission of protecting lives and property when other means and resources are not available or are less effective. Any use of CPD drones will be for official law enforcement purposes, and in a manner that respects the privacy of our community. Uses may include but are not limited to, search and rescue, suspect apprehension, crime scene documentation, tactical operations, scene security, hazard monitoring, identification, and mitigation, response to emergency calls, crisis communications, legally authorized surveillance.

c. Fiscal Impact: Varies depending on replacement parts and re-occurring costs due to software associated with the drone program $1,000.00 to $2,500.00.

d. Legal and procedural rules: Any use of a UAS will be in strict accordance with constitutional and privacy rights and Federal Aviation Administration (FAA) regulations.

The use of the UAS potentially involves privacy considerations. Absent a warrant or exigent circumstances, operators and observers shall adhere to FAA altitude regulations and shall not intentionally record or transmit images of any location where a person would have a reasonable expectation of privacy (e.g., residence, yard, enclosure).

Operators and observers shall take reasonable precautions to avoid inadvertently recording or transmitting images of areas where there is a reasonable expectation of privacy. Reasonable precautions can include, for example, deactivating or turning imaging devices away from such areas or persons during UAS operations.

e. Required training: Prior to piloting any UAS/Drone staff members must secure an FAA ITEM 9
Remote Pilot License and complete all training required by our FAA certificate or authorization. For the ground vehicles agency-authored orientation course with annual refresher training.

f. Lifespan: All UAS equipment, 5-7 years.

___________________________________________________________________________

2. Robots: Unmanned remotely operated machines on the ground utilized to enhance the safety to the community and officers.

a. Manufacturer description, quantity, capabilities, and purchase cost:
i. Transcend Vantage Patrol Robot, cost $25,000, quantity 1: The Transcend Vantage Patrol Robot enhances the capabilities of SWAT and tactical response teams by allowing them to quickly and safely inspect dangerous situations, there is no longer a need to send personnel in before you’ve had a chance to assess the situation. It has the ability to climb stairs and push open doors. It can deliver chemical agents. The Vantage Patrol Robot saves lives by keeping first responders out of harm’s way.

b. Purpose and authorized use: To be used to remotely gain visual/audio intelligence, deliver equipment, open doors, deliver chemical agents and clear buildings ahead of a search team.

Officers who have been trained may deploy the robot. Any use of CPD robots will be for official law enforcement purposes, and in a manner that respects the privacy of our community. Uses may include but are not limited to: search and rescue; suspect apprehension; tactical operations; scene security; hazard monitoring, identification and mitigation; response to emergency calls; crisis communications; legally authorized surveillance.

c. Fiscal Impact: Varies depending on replacement parts and repairs $1,000.00 to $2,500. d. Legal and procedural rules: Any use of a CPD robot will be for official law enforcement purposes, and in a manner that respects the privacy of our community.

e. Required training: Officers utilizing the robot will have received training from a CPD ITEM 9
SWAT members prior to deployment of the robots.
f. Lifespan: All robots and associated equipment, 8-10 years. _________________________________________________________________________________

3. Armored Vehicles: Commercially produced wheeled armored personnel vehicle utilized for law enforcement purposes.
a. Manufacturer description, quantity, capabilities, and purchase cost:
i. LENCO BEAR, cost $250,000.00, quantity 1: The LENCO BEAR is an armored rescue vehicle- designed specifically for tactical response teams. It has an all-steel construction with high ballistic protection.

b. Purpose and authorized uses: To provide for the safe transport, security, and rescue of agency personnel and citizens in high-risk incidents. Any use of the armored rescue vehicle will be for official law enforcement purposes.

c. Fiscal Impact: Purchased in 2005 with a $1500.00 annual maintenance.

d. Legal and procedural rules: Use shall be in accordance with California State law regarding the operation of motor vehicles.

e. Required training: Agency-authored orientation course; annual refresher.

f. Lifespan: indefinite

___________________________________________________________________________

4. Rifles and Corresponding Ammunition: A shoulder fired rifle capable of firing a projectile accurately at over 100 yards.

a. Manufacturer description, quantity, capabilities and purchase cost:

ITEM 9

i. Bushmaster XM-15, cost $1,000.00 each, quantity 50: The AR15 style firearm features a M4-type hand guards. Models have either a fixed butt stock or a collapsible stock. They are chambered for 5.56 NATO ammunition. They weigh approximately 6 pounds.

They have a 16” 4150 chrome-moly steel barrel. They have a birdcage style muzzle to reduce flash signature. They have a 1913 Picatinny rail on top that allow for sights and optics. ii. Colt M4 Carbine, cost $1,227.00 each, quantity 14: Colt Enhanced Patrol Rifle (EPR). Features an extended handguard that accepts modular rail segments for mounting a wide variety of pro- grade optics, lighting, and ergonomics-enhancing accessories, as well as the highly durable Magpul® MBUS® Pro Series front and rear back up sights and B5 Bravo buttstock. They have a

11.5” 4150 chrome-moly steel barrel. They have a SF3P-556-1/2-28 thread suppressor adapter/flash hider They are chambered for 5.56 NATO ammunition and weighs approximately 6 pounds.
iii. Colt M4 Carbine, cost $1,699.99 each, quantity 1: Colt M4A1 Features an extended handguard that accepts modular rail segments for mounting a wide variety of pro- grade optics, lighting, and ergonomics-enhancing accessories, as well as the highly durable Magpul® MBUS® Pro Series front and rear back up sights and B5 Bravo buttstock. It has a 16” 4150 chrome-moly steel barrel They have a birdcage style muzzle to reduce flash signature They are chambered for 5.56 NATO ammunition and weighs approximately 6.95 pounds.
iv. Smith and Wesson M&P Carbine, cost $769.00 each, quantity 4: Smith and Wesson M&P carbine an extended handguard that accepts modular rail segments for mounting a wide variety of pro-grade optics, lighting, and ergonomics-enhancing accessories, as well as the highly durable Magpul® They have collapsible buttstocks. They have a 16” 4150 chrome-moly steel barrel They have a birdcage style muzzle to reduce flash signature They are chambered for 5.56 NATO ammunition and weighs approximately 6.63 pounds.
v. Ruger SR-556e, cost $1,000.00 each, quantity 1: Ruger SR-556 is an AR-15 style rifle that uses a gas piston operation. It has an extended handguard that accepts modular rail segments for mounting a wide variety of pro-grade optics, lighting, and ergonomics-enhancing accessories, as well as the highly durable Magpul® It has a collapsible buttstock. It has a 16” 4150 chrome-moly steel barrel. It has a birdcage style muzzle to reduce flash signature. It is chambered for 5.56 NATO ammunition and weighs approximately 6 pounds.

ITEM 9
vi. Heckler & Koch MP5, cost $5,000.00 each, quantity 4: The HK MP5 is a compact sub- machine gun chambered for 9mm NATO ammunition. They are equipped with a folding stock or fixed stock vii Heckler & Koch UMP40, cost $5,000.00 each, quantity 4: The HK UMP40 is a compact sub- machine gun chambered for 40 cal. ammunition. They are equipped with a folding stock. viii. SPEER GOLD DOT .223 CALIBER 55 GRAIN RIFLE ROUND, cost: $260 per case of 500, quantity 6 cases: Ammunition made by Speer is reloadable, features nickel plated brass cases and Boxer primers, and this is a non-corrosive round. It is loaded with a soft point bullet.
ix. Ruag Swiss P Target 7.62mm 168 grain HPBT, cost $1,800.00, quantity 1,000 rounds: Swiss P target cartridges are a highly accurate target rounds used for training. x. Ruag Swiss P Styx Action 7.62mm 167 grain HP, cost $3090.00, quantity 1,000 rounds. Swiss P Styx cartridges are highly accurate rounds designed to not over penetrate its target.
xi. Ruag Swiss P AP 7.62mm 196 grain AP, cost $4,000.00, quantity 1,000 rounds:

Swiss P AP cartridges are highly accurate rounds designed to penetrate hard target.

b. Purpose and authorized uses: To be used as precision weapons to address a threat with more precision and/or greater distances than a handgun, if present and feasible. The use and deployment of the rifle falls under Lexipol policy 312 and 408 and 433. Only Officers who have attended the POST certified patrol rifle course may deploy the rifle.

c. Fiscal impact: Annual maintenance is $25.00 per rifle. Total ammunition budget is $30,000 per year.

d. Legal and procedural rules: Use is established under Lexipol policy 312, 408 and 433. It is the policy of CPD to utilize rifles only for official law enforcement purposes, and pursuant to State and Federal law regarding the use of force.

e. Required training: Quarterly qualifications and ongoing training.

f. Lifespan: Rifles 10-20 years depending on use. No expiration on ammunition. ____________________________________________________________________________

ITEM 9

5. Distraction Devices: A distraction device is ideal for distracting dangerous suspects during assaults, hostage rescue, room entry or other high-risk arrest situations.

a. Manufacturer description, quantity, capabilities, and purchase cost:
i. Defense Technology, 8922, 1089841 low roll DD distraction device, cost $59.90, quantity 21:

A non-bursting, non-fragmenting device that produces a thunderous bang with an intense bright light. Ideal for distracting dangerous suspects during assaults, hostage rescue, room entry or other high-risk arrest situations.

b. Purpose and authorized uses: Distraction devices are ideal for distracting dangerous suspects to allow tactical teams to complete a dangerous mission or task. Distraction devices shall only be used by officers trained in the proper use and deployment.

Diversionary Devices shall only be used:
i. By officers who have been trained in their proper use. ii. In hostage and barricaded subject situations.
iii. In high-risk warrant (search/arrest) services where there may be extreme hazards to officers.
iv. During other high-risk situations where their use would enhance officer safety. v. During training exercises.

c. Fiscal Impact: Varies depending on use.

d. Legal and procedural rules: It is the policy of the CPD to utilize diversion devices only for official law enforcement purposes, and pursuant to State and Federal law regarding the use of force.

e. Required training: Officers must attend training hosted by certified POST instructors which is followed by an annual refresher training.

f. Lifespan: Upon use.

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6. Explosive breaching tools: Tools that are used to conduct a positive breach using kinetic energy.
a. Manufacturer description, quantity, capabilities, and purchase cost:

i. REMINGTON 870 BREACHING SHOTGUN, cost: $500, quantity 2: This weapon allows for breachers to safely utilize shotgun breaching rounds to destroy deadbolts, locks, and hinges
ii. DEFENSE TECHNOLOGY FRANGILBE BREACHING ROUND, cost: $5 per round quantity 50: The round is fired from a breaching shotgun and is used to destroy deadbolts, locks, and hinges.
iii. KBT 3-1000 Kinetic Breaching Tool Cost $10,000, quantity 1: This mechanically driven breaching tool has a self-contained impact ram that has no projectile or explosive pressures. It uses a black cartridge to actuate the ram.

b. Purpose and authorized use: To safely create a positive breach and enter a structure.

Kinetic and shotgun breaching may only occur after authorization by the Incident Commander or SWAT Commander in the field, and during training exercises.

c. Fiscal Impact: Cost varies depending on use in the field. Annual maintenance and training costs are approximately $1,500.00.

d. Training: All Officers who use kinetic and shotgun breaching tools shall attend a 40- hour breaching course and will train regularly.

e. Legal and procedural rules: Breaching tools will only be used for official law enforcement purposes and will be pursuant to State and Federal law.

f. Lifespan: breaching shotguns 20 years, breaching shotgun rounds 5 years.

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7. Chemical agents: Canisters that contain OC and CS chemical agents that are released when deployed.

a. Manufacturer description, quantity, capabilities, and purchase cost:
i. Defense Technology 1050 1012500 Aerosol OC/CS, cost $60.15 each, quantity 20: This device is designed for indoor use. It does not contain CFCs and is not a fire hazard. It needs minimal decontamination by comparison to smoke, powders, or liquids. It is most effective when used in confined area and close to the target area. This device is used to minimize the risk to all parties through pain compliance, temporary discomfort and or incapacitation of potentially violent or dangerous subjects. The aerosol device is ideal for cell extractions or barricades situations where the use of pyrotechnic, powder, or liquid devices is not practical or desired. The OC and CS combination provide sufficient effects in confined areas of up to 1,500 square feet. ii. Defense Technology 1062 1012502 Smoke, cost $50.70 each, quantity 41: This device is designed for outdoor use. It has a high-volume continuous burn that expels its payload in approximately 30-40 seconds through four gas ports. This device can be used to conceal tactical movements or to route a crowd. The volume of smoke and agent is vast and obtrusive. iii. Defense Technology 1030 1177120 Flameless Tri-Chamber OC, cost $49.00 each, quantity 13: This device is a flameless pyrotechnic grenade which combines the effectiveness of Oleoresin Capsicum as an incapacitating agent with the flexible delivery methods, range and area coverage of pyrotechnic munitions. This device can be used in crowd control and barricade situations as a less lethal solution to incapacitate subjects through temporary respiratory discomfort, while reducing or negating the chance of fire to structures. i v. Defense Technology 1032 1012473 Flameless Tri-Chamber CS, cost $46.25 each, quantity 7:

This device is a flameless pyrotechnic grenade which combines the effectiveness of CS agent as an incapacitating agent with the flexible delivery methods, range and area coverage of pyrotechnic munitions. This device can be used in crowd control and barricade situations as a less lethal solution to incapacitate subjects through temporary respiratory discomfort, while reducing or negating the chance of fire to structures.

b. Purpose and authorized use: To limit the escalation of conflict where deployment of lethal force is prohibited or undesirable. Situations for use may include, but are not limited to:

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i. Self-destructive, dangerous, and/or combative individuals ii. Barricaded suspects
iii. Riot/crowd control and civil unrest incidents
iv. Training exercises

c. Fiscal impact: Varies depending on use in the field, $1,500.00 to $2,500.00 per year.

d. Training: Sworn members utilizing chemical agent canisters are certified by POST less lethal and chemical agents’ instructors.

e. Legal and procedural rules: It is the policy of the SMPD to utilize chemical agents only for official law enforcement purposes, and pursuant to State and Federal law, including those regarding the use of force.

f. Lifespan: 5 years from date of manufacture.
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8. 40mm Launchers and rounds: 40MM Launchers are utilized by department personnel as a less lethal tool to launch less lethal impact and OC/CS rounds.

a. Manufacturer description, quantity, capabilities, and purchase cost:
i. 40mm LMT tactical single launcher, cost $1,000.00, quantity 4: The 40mm launcher is a single shot launcher that was manufactured exclusively for Defense Technology. It features and expandable ROGERS Super Stoc and an adjustable integrated front grip with a light rail. The ambidextrous lateral sling mount and QD mounting systems allows both a single- and two-point sling. This launcher will fire standard 40mm less lethal ammunition, up to 4.8-inch cartridges length. The Picatinny Rail Mounting System will accept a wide array of enhanced optics / sighting systems.
ii . 40mm multi launcher Penn Arms cost $3146, quantity 1: This 40mm multi-round launcher is a spring advanced launcher with a 5” cylinder. It has the capability of firing 6 shots in succession.

It has a 12-inch barrel and weighs 9.2 pounds. It has a top Picatinny rail to allow for sights or optics. It has a fixed stock with a push button cross bolt trigger safety. iii. 40mm eXact impact standard range sponge round (6325), Cost $28.65, quantity 31: This ITEM 9
round is a point of aim, point of impact direct fire round. This lightweight, high-speed projectile consisting of a plastic body and sponge nose that is spin stabilized via the incorporated rifling collar and the 40mm launcher’s rifled barrel. The round utilizes smokeless powder as the propellant, and, therefore have velocities that are extremely consistent. iv. 40mm eXact impact extended range sponge round(6325LE), Cost $30.80, quantity 13 round is a point of aim, point of impact direct fire round. This lightweight, high-speed projectile consisting of a plastic body and sponge nose that is spin stabilized via the incorporated rifling collar and the 40mm launcher’s rifled barrel. The round utilizes smokeless powder as the propellant, and, therefore have velocities that are extremely consistent. v. 40mm Direct Impact OC Crushable Foam round (6320), Cost $31.90, quantity 40 This round is a point of aim, point of impact direct fire round. This round is designed to be a solution for incapacitating a single subject or control a crowd When loaded with OC it combines the impact of the foam round with the effects of an irritant powder maximizing the potential for incapacitation
vi. 40mm Ferret barricade round CS (2292), Cost $27.85, quantity 11 The ferret Barricade Penetrating round is filled with a CS powder chemical agent. It is frangible projectile that is spin stabilized utilizing barrel rifling. It is non-burning and designed to penetrate barriers. It is designed to penetrate barriers, such as window, hollow core doors, wallboard and thin plywood. Upon impact the nose ruptures and instantaneously delivers the agent payload inside a structure or vehicle.
vii. 40mm Ferret barricade round OC (2290), Cost $28.65, quantity 10 The ferret Barricade Penetrating round is filled with an OC powder chemical agent. It is frangible projectile that is spin stabilized utilizing barrel rifling. It is non-burning and designed to penetrate barrier. This round is primarily used to dislodge barricaded subjects, it can also be used for area of denial. It is designed to penetrate barriers, such as window, hollow core doors, wallboard and thin plywood. Upon impact the nose ruptures and instantaneously delivers the agent payload inside a structure or vehicle.

b. Purpose and authorized uses: To limit the escalation of conflict where employment of lethal force is prohibited or undesirable. Situations for use may include, but are not limited to:
i. Self-destructive, dangerous, and/or combative individuals ii. Barricaded suspects
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iii. Riot/crowd control and civil unrest incidents
iv. Training exercises

c. Fiscal impact: Annual costs can range from $2,000.00 to $5,000.00 depending on use.

d. Training: Sworn members utilizing chemical agent canisters are certified by POST less lethal and chemical agents’ instructors.

e. Legal and procedural rules: It is the policy of CPD to utilize chemical agents only for official law enforcement purposes, and pursuant to State and Federal law, including those regarding the use of force.

f. Lifespan: Penn arms 40mm launcher 20 years, LCT 40mm single launcher 20 years. 40mm foam tipped projectile until used, all chemical agent rounds 5 years from date of manufacture

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{CW116206.2}
City of Ceres

NOTICE OF PUBLIC HEARING

NOTICE IS HEREBY GIVEN THAT THE CERES CITY COUNCIL will hold a public hearing in the Council Chambers at 2701 Fourth Street, Ceres, CA, on October 24, 2022 at 6:00 p.m. or as soon as possible thereafter, to receive and consider all evidence and reports relative to adoption of an O rdinance of the City Council of the City of Ceres amending Title 9, Public Peace, Morals and Welfare, of the Ceres Municipal Code to add Chapter 22, adopting a Military Equipment Use Policy (“Ordinance”).

On September 30, 2021, Governor Gavin Newsom signed into law Assembly Bill 481 (AB 481) relating to the use of military equipment by law enforcement agencies. AB 481, codified in California Government Code section 7070 through 7075, requires that any law enforcement agency seeking to use existing or new military equipment to create a military equipment use policy, present the policy for governing body approval by ordinance, and produce annual reports pertaining to the policy and use of military equipment. The proposed ordinance seeks to approve the Ceres Police Department’s Military Equipment Use Policy, which outlines each item identified in Government Code section 7070 that the City currently owns or uses. The identified equipment includes : u nmanned, remotely piloted, air or ground vehicles, such as drones; armored vehicles; nattering rams; firearms and ammunition of .50 caliber or greater, not including shotguns and shotgun ammunition; flashbangs and other explosive breaching tools; and rubber bullets and other associated specialty impact munitions.

All Interested parties are invited to attend said hearing and express opinions or submit evidence for or against proposal as outlined above.

Further information on the above hearing may be obtained or viewed at the office of the City Clerk, City Hall, 2220 Magnolia Stre et Ceres, CA 95307 or by telephone at (209) 538-5731.

If a citizen wishes to challenge the nature of the above actions in court, they may be limited to raising only those issues they or someone else raised at the public hearing described in the notice, or in written correspondence delivered to the City of Ceres, at, or prior to the public hearing.

/s/ Fallon Martin, City Clerk

Date Notice Posted: October 19, 2022

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Ceres City CouncilNovember 14, 2022

Ceres City Council
November 14, 2022