Agenda — Chowchilla City Council, April 11, 2023

AGENDA
City Council / Public Financing Authority
Joint Meeting
Council Chambers, Chowchilla City Hall
130 S. Second Street, Chowchilla, CA 93610
Tuesday, April 11, 2023
Closed Session: 3:00 p.m. ~ Open Session: 4:00 p.m.

City Council meetings are available to view and participate via Zoom. Please read Page 4 of this agenda packet for Zoom login and participation information.

Agendas for all City Council meetings are posted at least 72 hours prior to the meeting in the kiosk just outside of City Hall, 130 S. Second St., Chowchilla, CA 93610.

Agendas for Special Meetings are posted 24 hours prior to the meeting.

Any writing or documents provided to a majority of the City Council regarding any item on this agenda will be made available for public inspection on the city website at www.CityofChowchilla.org.

The City of Chowchilla complies with the Americans with Disabilities Act (ADA of 1990). The Council Chambers is accessible to the physically disabled. If you need special assistance, please call (559) 665-8615, ext. 102 at least 4 days prior to a regular meeting, 1 day for a special meeting.

CALL TO ORDER/ROLL CALL
Mayor: Ray Barragan
Mayor Pro Tem: Kelly Smith
Council Members: Waseem Ahmed, John Chavez, Jeff Troost City staff and contract employees present will be recorded in the minutes.

CONSIDERATION OF APPROVAL OF AGENDA
Additions and/or Deletions:

PUBLIC ADDRESS – CLOSED SESSION
This time is reserved for members of the audience to address the City Council on items listed on the Closed Session agenda only. It is recommended that speakers limit their comments to no more than 3 minutes each.

CLOSED SESSION – 3:00 PM

1. CONFERENCE WITH LEGAL COUNSEL – ANTICIPATED LITIGATION – Significant Exposure to Litigation Pursuant to Paragraph (2) or (3) of Subdivision (d) of Section 54956.9 Potential cases: 1
OPEN SESSION – 4:00 PM
City Council Meeting AGENDA April 11, 2023

PLEDGE OF ALLEGIANCE
INVOCATION:

CLOSED SESSION REPORT:

PRESENTATIONS/WORKSHOP - Section 1

1.1 Proclamations:
a. Sexual Assault Awareness Month
b. National Public Safety Telecommunicators Week

PUBLIC ADDRESS
This time is reserved for members of the audience to address the City Council on items of interest that are not on the agenda and that are within the subject matter jurisdiction of the Council.

It is recommended that speakers limit their comments to no more than 3 minutes each and it is requested that no comments be made during this period on items on the Agenda.

Members of the public who are joining the meeting via Zoom and would like to address the Council on items on the agenda should follow the policy on page 4 of this agenda packet.

The Council is prohibited by law from taking any action on matters discussed that are not on the agenda. No adverse conclusions should be drawn if the Council does not respond to public comment at this time.

COUNCIL AND STAFF VERBAL REPORTS – Section 2

2.1 COUNCIL VERBAL REPORTS
Legislative, Collaborative Agency, Ad Hoc

2.2 STAFF VERBAL REPORTS
CONSENT CALENDAR – Section 3
All items listed under Consent Calendar are considered to be routine and will be enacted by one motion. For discussion of any Consent Item, it will be made a part of the Regular Agenda at the request of any member of the City Council or any person in the audience.

3.1 Approval of the March 28, 2023 City Council Meeting Minutes (McClendon)

3.2 Approval of March 30, 2023 City Council Goal Setting Workshop Meeting Minutes (McClendon)

3.3 Consideration and Adoption of a City Council Resolution Directing the Execution of and Authorizing the Recording of a Termination Agreement Including a Certificate of Acceptance (Pruett)

3.4 Consideration and Adoption of a City Council Resolution Approving the Amendment to the Application for State Transit Assistance (STA) Funds for Fiscal Year 2022/23 City Council Meeting AGENDA April 11, 2023
and Authorizing the City Administrator or Designee to Execute and Submit the Application to Madera County Transportation Commission (MCTC) (McClendon) PUBLIC HEARINGS – Section 4
DEFERRED BUSINESS – Section 5
NEW BUSINESS – Section 6

6.1 Presentation and Acceptance of the City’s Fiscal Year 2021-2022 Financial Statement Audit (Pruett)

6.2 Discussion and/or Direction Regarding Measure N (Pruett) *No staff report
ANNOUNCEMENTS – Section 7
APR 19 PLANNING COMMISSION MEETING, CITY HALL, 7PM
APR 25 CITY COUNCIL MEETING, CITY HALL, 7PM

ADJOURNMENT
This meeting will be adjourned in memory of Velma Pistoresi and Lowell Merriam I, Joann McClendon, CMC, City Clerk, do hereby declare under penalty of perjury that the foregoing agenda was posted at Chowchilla City Hall, 130 S Second Street, Chowchilla, CA and made available for public review on this 6th day of April, 2023 at or before 5:00pm.

Joann McClendon, CMC, City Clerk
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MINUTES
City Council Meeting
Council Chambers, Chowchilla City Hall
130 S. Second Street, Chowchilla, CA 93610
Tuesday, March 28, 2023
Closed Session: 3:00 p.m. ~ Open Session: 4:00 p.m.

CALL TO ORDER/ROLL CALL: 3:02 p.m.

Mayor: Ray Barragan
Mayor Pro Tem: Kelly Smith
Council Members: Waseem Ahmed, John Chavez, Jeff Troost City staff and contract employees present: City Administrator Rod Pruett, City Attorney Mary Lerner, Police Chief Jeff Palmer, Fire Chief Fred Gaumnitz, Public Works Director Jason Rogers, Community & Economic Development Director Mark Hamilton, Deputy Director of Recreation & Community Engagement Stacy Wisener, IT System Administrator Carlos Berrocal, City Clerk Joann McClendon.

CONSIDERATION OF APPROVAL OF AGENDA
Additions and/or Deletions:

Motion by Council Member Ahmed, Seconded by Mayor Pro Tem Smith to Approve the Agenda as Presented. Motion passed unanimously by roll call vote.

PUBLIC ADDRESS – CLOSED SESSION
No one spoke.

CLOSED SESSION – 3:04 PM

1. CONFERENCE WITH LEGAL COUNSEL – ANTICIPATED LITIGATION – Significant Exposure to Litigation Pursuant to Paragraph (2) or (3) of Subdivision (d) of Section 54956.9 Potential cases: 1

2. CONFERENCE WITH LEGAL COUNSEL – ANTICIPATED LITIGATION – Initiation of Litigation – Pursuant to Government Code Section 54956.9 Paragraph (4) Subdivision (d) (deciding whether to initiate litigation)
Number of Cases: 1
OPEN SESSION – 4:00 PM

PLEDGE OF ALLEGIANCE
INVOCATION: Steve
CLOSED SESSION REPORT: Nothing to report.

PRESENTATIONS/WORKSHOP - Section 1
Item 3.1

CLICK HERE

TO RETURN TO

THE AGENDA
City Council Meeting MINUTES March 28, 2023

PUBLIC ADDRESS
No one spoke.

COUNCIL AND STAFF VERBAL REPORTS – Section 2

2.1 COUNCIL VERBAL REPORTS
Legislative, Collaborative Agency, Ad Hoc
Mayor Pro Tem Smith attended the State of the County luncheon, thanked the Mayor for his presentation.

Council Member Ahmed also attended the State of the County event. Also, he attended the LAFCO meeting where Mr. Tom Wheeler was recognized for his service to the community as he retires; attended a Tradeport meeting discussing installing a port at a closed airport base; and attended a Merced College Leadership meeting.

2.2 STAFF VERBAL REPORTS
Deputy Director of Recreation & Community Engagement Wisener spoke of the Easter event at Ed Ray Park; continued work on Centennial events and items; attended the State of the County Luncheon.

City Clerk McClendon reminded the City Council on the approaching Form 700 deadline.

City Administrator Pruett attended the Merced College Leadership meeting with Council Member Ahmed; working mostly on the mid-year budget and the audit and other reports due by the end of this month; staff met with UPRR and they essentially stated they will be able to fix the problem with trains stopping across Robertson Boulevard; attended the State of the County Luncheon; met with the investment team, will provide quarterly reports to the Council moving forward; met with CFD team, staff will need to reach out to landowners to give them a refunding presentation and then bring item to council.

Public Works Director Rogers explained that, at the last meeting, he stated that he planned on bringing Historical Society agreement back to Council for review and approval at the next meeting.

Legal is currently working on revisions though and I will bring back at a future meeting. He also attended the State of the County luncheon. Staff conducted interviews for our open Parks and Janitorial positions. Additionally, we are currently accepting applications for the Wastewater Supervisor position. We were recently informed that our Highway Safety Improvement Program (HSIP) grant application was approved and we received an award of approx. $628,000 to add intersection lighting, signage, marked crosswalks and rectangular flashing beacons at various locations throughout the City. These are projects that were identified in our Local Road Safety Plan (LRSP) that was adopted by Council last year. And finally, the Curbside Cleanup Event is scheduled for April 17-21.

Community & Economic Development Director Hamilton reported that a homemade ice cream shop and a bait shop has opened in the downtown area; construction has slowed down because of the rain, impacting permits but more people are interested in the ADU’s. Century Homes is almost finished with construction, possible end date in May. Spoke with Esmeralda Soria’s staff regarding PG&E energizing issues. He plans to be at the ICSC conference in May.

City Council Meeting MINUTES March 28, 2023
Mayor Barragan asked Police Chief Palmer about a potential California law that would ban the use of police dogs, K9’s. Police Chief Palmer noted they would only be used for drug searching, but no longer to search for human suspects.

Police Chief Palmer, last week attended a Fresno Madera County Police Chief Association Luncheon in which DA Lisa Smittcamp spoke regarding fentanyl. His department completed testing for Police Cadets; 2 CSO positions open with people in background; a Police Officer position in background who is attending the academy.

Council Member Chavez asked if the Chowchilla Police Department has had training for an active shooter at schools. The Police Chief replied, yes.

Fire Chief Gaumnitz attended the State of the County Luncheon; congratulated the new division Chief of CalFire, Mr. McCombs; our local waterways have gone down considerably; live fire training with CSFA in April 22-23; Phase II of the design build of the Fire Station forthcoming.

CONSENT CALENDAR – Section 3

3.1 Approval of the March 14, 2023 City Council Meeting Minutes (McClendon)

3.2 Conduct a Second Reading of an Ordinance (513-23) Amending Title 17.40 and Adopting Title 17.42 of the City of Chowchilla Municipal Code (Hamilton) Motion by Council Member Ahmed, Seconded by Council Member Troost to Approve the Consent Calendar as Presented. Motion passed unanimously by roll call vote.

PUBLIC HEARINGS – Section 4
DEFERRED BUSINESS – Section 5
NEW BUSINESS – Section 6

6.1 Consideration and Adoption of a City Council Resolution (22-23) Awarding the Contract for Well No. 15 Test Hole in the Amount of $803,895.00 and Authorizing the City Administrator or Designee to Execute Related Documents Thereto (Rogers) Motion by Council Member Chavez, Seconded by Mayor Pro Tem Smith to Approve City Council Resolution #22-23, Awarding the Contract for Well No. 15 Test Hole in the Amount of $803,895.00 and Authorizing the City Administrator or Designee to Execute Related Documents Thereto.

Motion passed unanimously by roll call vote.

6.2 Consideration and Adoption of a City Council Resolution (23-23) Approving a Subrecipient Agreement with Self Help Enterprises to Implement the City’s CalHOME Program and a Monitoring Agreement with the California Department of Housing and Community Development, Authorizing the City Administrator to Execute both Agreements (Hamilton)
Motion by Council Member Chavez, Seconded by Mayor Pro Tem Smith to Approve City Council Resolution #23-23, Approving a Subrecipient Agreement with Self Help Enterprises to Implement the City’s CalHOME Program and a Monitoring Agreement with the California Department of City Council Meeting MINUTES March 28, 2023
Housing and Community Development, Authorizing the City Administrator to Execute both Agreements. Motion passed unanimously by roll call vote.

6.3 Consideration and Adoption of a City Council Resolution (24-23) Accepting General Plan Annual Progress Report and Annual Housing Element Progress Report for the 2022 Year (Hamilton)
Motion by Mayor Pro Tem Smith, Seconded by Council Member Troost to Approve City Council Resolution #24-23, Accepting General Plan Annual Progress Report and Annual Housing Element Progress Report for the 2022 Year. Motion passed unanimously by roll call vote.

6.4 Informational Item – 4th Quarter 2022 Excel Project Management Program (PMP) Update (Pruett)

6.5 *Presentation of the City’s Mid-Year Budget for FY 2022/23 and Consideration and Adoption of a City Council Resolution (25-23) Accepting Budget Changes as Part of the Mid-Year Budget Update for the 2022/23 Fiscal Year (Pruett) The staff report and backup documents that were presented at the meeting.

Motion by Council Member Chavez, Seconded by Mayor Pro Tem Smith to Approve City Council Resolution #25-23, Accepting Budget Changes as Part of the Mid-Year Budget Update for the 2022/23 Fiscal Year. Motion passed unanimously by roll call vote.

ANNOUNCEMENTS – Section 7
MAR 30 CITY COUNCIL GOAL SETTING MEETING, CITY HALL, 3PM APR 1 CHOWCHILLA EASTER EGG SCRAMBLE, EDWARD RAY PARK, 9:30AM APR 11 CITY COUNCIL MEETING, CITY HALL, 4PM

ADJOURNMENT
Mayor Barragan Adjourned the March 28, 2023 City Council Meeting at 5:10 p.m.

ATTEST: APPROVED:

Joann McClendon, CMC, City Clerk Mayor Ray Barragan

MINUTES
Special City Council Goal Setting Workshop
City Council Chamber
Chowchilla City Hall - 130 S. Second Street, Chowchilla, CA 93610
Thursday, March 30, 2023 – 3:00 p.m.

CALL TO ORDER/ROLL CALL: 3:07 p.m.

Mayor: Ray Barragan
Mayor Pro Tem: Kelly Smith
Council Members: Waseem Ahmed, John Chavez (4:19PM), Jeff Troost City staff and contract employees present: City Administrator Rod Pruett, City Attorney Mary Lerner, Police Chief Jeff Palmer, Fire Chief Fred Gaumnitz, Public Works Director Jason Rogers, Community & Economic Development Director Mark Hamilton, Deputy Director of Recreation & Community Engagement Stacy Wisener, IT System Administrator Kurt Wlodarczyk, City Clerk Joann McClendon.

OPEN SESSION – 3:08 PM

PLEDGE OF ALLEGIANCE
INVOCATION: Council Member Troost
GOAL SETTING WORKSHOP - Section 1

1.1 Discussion Regarding Fiscal Year 2023/2024 Goals and Priorities to Incorporate into the Budget (Pruett)
Staff went around the table, addressing each department’s 2023/2024 fiscal year budget requests. Then, the Council reviewed the survey results that residents and stakeholders submitted online.

ADJOURNMENT
Mayor Barragan Adjourned the March 30, 2023 Goal Setting Workshop at 4:45 p.m.

ATTEST: APPROVED:

Joann McClendon, CMC, City Clerk Mayor Ray Barragan
Item 3.2

CLICK HERE

TO RETURN TO

THE AGENDA

REPORT TO THE CITY COUNCIL &

PUBLIC FINANCING AUTHORITY
Item 3.3

CLICK HERE

TO RETURN TO

THE AGENDA
Meeting of: April 11, 2023
AGENDA SECTION: Consent
SUBJECT: Consideration of a Resolution Directing the Execution of and Authorizing the Recording of a Termination Agreement Including a Certificate of Acceptance
PREPARED BY: Rod Pruett, City Administrator
ATTACHMENTS: Resolution
Termination Agreement

REVIEWED BY
ADMINISTRATOR ☒ REVIEWED BYATTORNEY ☒ REVIEWED BY FINANCE ☒ RECOMMENDATION:

That the City Council approve the attached resolution which authorizes the acceptance of the termination agreement and certificate of acceptance.

BACKGROUND:

On July 1,2016 the City entered into a site and facilities lease agreement with the Chowchilla Public Finance Authority (PFA) to lease the Ed Ray Park recreation building and the Chowchilla Senior Center.

At the same time the PFA entered into an Assignment Agreement with Capital One Public Funding, LLC (COPF) which assigned all the rights, title and interest in the site and facilities agreement to COPF.

This was done as a part of the partial refunding of the 2005 Civic Center bonds that were issued. The City has since made all required lease payments under the term of the Lease and the refunded bonds have matured.

REASON FOR RECOMMENDATION:

Since the lease has been paid in full, the Termination Agreement and Certificate of Acceptance are required to record the satisfaction of the terms of the lease and remove COPF’s rights, title and interest on Ed Ray Park recreation building and the Chowchilla Senior Center.

FISCAL IMPACT:

None.

ALTERNATIVES:

Do not approve the Resolution and COPF will continue to hold the rights, title and interests in the above listed properties
ACTIONS FOLLOWING APPROVAL:

The City Administrator will sign all the necessary documents for the Termination Agreement and Certificate of Acceptance. Those documents will then be recorded.

COUNCIL RESOLUTION # -23

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHOWCHILLA, CALIFORNIA

DIRECTING THE EXECUTION OF AND AUTHORIZING THE RECORDING OF A

TERMINATION AGREEMENT INCLUDING A CERTIFICATE OF ACCEPTANCE WHEREAS, pursuant to a Site and Facilities Lease dated July 1, 2016 (the “Site and Facilities Lease”), the City of Chowchilla (the “City”) leased the Edward Ray Park Recreation Building located at 625 North 15th Street and the Chowchilla Senior Center located at 820 Robertson Boulevard (the “Property”) to the Chowchilla Public Financing Authority (the “Authority”); WHEREAS, pursuant to the Lease Agreement dated July 1, 2016 (the “Lease Agreement”), the Authority leased the Property back to the City;
WHEREAS, pursuant to the Assignment Agreement dated July 1, 2016 (the “Assignment Agreement”), between the Authority and Capital One Public Funding, LLC (“COPF”), the Authority assigned to COPF all of its right, title, and interest in and to the Site and Facilities Lease and the Lease Agreement;
WHEREAS, the City has paid all lease payments payable under the Lease Agreement, thereby terminating the Site and Facilities Lease, the Lease Agreement, and the Assignment Agreement (collectively, the “Agreements”);
WHEREAS, the City, the Authority, and COPF desire to evidence the termination of the Agreements, and the Authority and COPF desire to quitclaim to the City any right, title or interest the Authority or COPF may have in the Property under the Agreements pursuant to the Termination Agreement between the City, the Authority, and COPF (the “Termination Agreement”), which has been presented to the City Council for its review and approval, and which is incorporated herein by reference;
WHEREAS, the Termination Agreement includes a certificate of acceptance, as required by Government Code section 27281, by which the officer or officers executing the Termination Agreement will certify that the City has accepted the reconveyance of the Property pursuant to authorization by the City Council and that the City consents to recordation of the Termination Agreement by its duly authorized officer; and
WHEREAS, it appears to the City that the approval, execution, delivery, and recording of the Termination Agreement is desirable and in the best interests of the City; NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Chowchilla hereby finds, determines and declares the following:

Section 1. Recitals. The above recitals are true and correct.

Section 2. Authorization of Officers to Execute, Deliver, and Record Termination Agreement. The City Council hereby authorizes and directs the City Adminstrator, the Finance Director, or their respective designees (“Designated Officers”), and each of them individually, for and in the name of and on behalf of the City, to execute, deliver, and record the Termination Agreement in substantially the form presented to this meeting, which is hereby approved, with such changes, insertions, revisions, corrections, or amendments as shall be approved by the officer or officers executing the agreement for the City. The execution of the foregoing by a Designated Officer or Officers of the City constitutes conclusive evidence of such officer’s or officers’ and the City Council’s approval of any such changes, insertions, revisions, corrections, or amendments to the form of the agreement presented to this meeting.

Section 3. General Authorization. The Designated Officers and other officers of the City, and each of them individually, are hereby authorized and directed, for and in the name of and on behalf of the City, to execute and deliver any and all documents, to do any and all things and take any and all actions that may be necessary or advisable, in their discretion, in order to consummate the execution, delivery, and acceptance of the Termination Agreement, and to effect the purposes of this resolution. All actions heretofore taken by officers, employees, and agents of this City that are in conformity with the purposes and intent of this resolution are hereby approved, confirmed, and ratified.

Section 4. Effective Date. This resolution takes effect immediately upon its adoption.

PASSED AND ADOPTED by the City Council of the City of Chowchilla this 11th day of April, 2023 by the following vote to wit:

AYES:

NOES:

ABSENT:

ABSTAIN:

APPROVED:

Mayor Ray Barragan
ATTEST:

Joann McClendon, CMC
City Clerk
RECORDING REQUESTED BY:

City of Chowchilla
WHEN RECORDED RETURN TO:

Lozano Smith, LLP
One Capitol Mall, Suite 640
Sacramento, CA 95814
Attn.: Deborah Fields
This document is recorded for the benefit of the City of Chowchilla and recording is exempt from recording fees pursuant to California Government Code §27383.

This transaction is exempt from California documentary transfer tax pursuant to California Revenue & Taxation Code §11922.

This document terminates leases whose original terms (including renewal options) and remaining terms at termination were less than 35 years.

TERMINATION AGREEMENT
between the

CITY OF CHOWCHILLA,

CHOWCHILLA PUBLIC FINANCING AUTHORITY,
and

CAPITAL ONE PUBLIC FUNDING, LLC
Dated as of April 1, 2023
2346338.2 11338-005 1

TERMINATION AGREEMENT
THIS TERMINATION AGREEMENT (this “Termination Agreement”) dated as of April 1, 2023, between the CITY OF CHOWCHILLA (the “City”), CHOWCHILLA PUBLIC FINANCING AUTHORITY (the “Authority”), and CAPITAL ONE PUBLIC FUNDING, LLC (“COPF”),
W I T N E S S E T H:

WHEREAS, the City leased to the Authority pursuant to the Site and Facilities Lease dated July 1, 2016 (the “Site and Facilities Lease”), the real property described on Exhibit A hereto (the “Property”); and the Authority leased the Property back to the City pursuant to the Lease Agreement dated July 1, 2016 (the “Lease Agreement”), between the Authority and the City;
WHEREAS, pursuant to the Assignment Agreement dated July 1, 2016 (the “Assignment Agreement”), between the Authority and COPF, the Authority assigned to COPF all of its right, title, and interest in and to the Site and Facilities Lease and the Lease Agreement; WHEREAS, the City has paid all lease payments payable under the Lease Agreement, thereby terminating the Site and Facilities Lease, the Lease Agreement, and the Assignment Agreement (collectively, the “Agreements”);
WHEREAS, the City, the Authority, and COPF desire to evidence the termination of the Agreements, and the Authority and COPF desire to quitclaim to the City any right, title or interest the Authority or COPF may have in the Property under the Agreements; and WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and entering into of this Termination Agreement do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and enter into this Termination Agreement;
NOW, THEREFORE, in consideration of the foregoing, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree:

ARTICLE I

TERMINATION
By virtue of the payment of the lease payments due under the Lease Agreement, the term of the Lease Agreement has terminated. By virtue of the termination of the Lease Agreement, the Site and Facilities Lease has terminated. The City, the Authority, and COPF agree that their respective interests in the following agreements are hereby terminated and are of no further force or effect:
a. Site and Facilities Lease, recorded on July 29, 2016, as Instrument No. 2016017475 in Official Records of Madera County;
2346338.2 11338-005 2
b. Lease Agreement, as recorded by the Memorandum of Lease on July 29, 2016, as Instrument No. 2016017476 in Official Records of Madera County; and c. Assignment Agreement recorded on July 29, 2016, as Instrument No. 2016017477 in Official Records of Madera County,

ARTICLE II

QUITCLAIMS
The Authority hereby quitclaims, remises, releases, conveys and transfers all right, title and interest it may have in the Property to the City free and clear of any interest of the Authority.

COPF hereby quitclaims, remises, releases, conveys and transfers all right, title and interest it may have in the Property to the City free and clear of any interest of COPF.

ARTICLE III

MISCELLANEOUS
Section 1. Binding Effect. This Termination Agreement inures to the benefit of and is binding upon the City, the Authority, and COPF and their respective successors and assigns.

Section 2. Severability. If any provision of this Termination Agreement is held invalid or unenforceable by any court of competent jurisdiction, such holding does not invalidate or render unenforceable any other provision hereof.

Section 3. Effectiveness. This Termination Agreement becomes effective on the date of its recordation.

Section 4. Execution in Counterparts. This Termination Agreement may be simultaneously executed in several counterparts, each of which is an original and all of which constitute but one and the same instrument.

Section 5. Applicable Law. This Termination Agreement is governed by and shall be construed in accordance with the laws of the State of California.

ARTICLE IV

CERTIFICATE OF ACCEPTANCE
This is to certify that the interest in real property conveyed by this Termination Agreement from the Authority and COPF to the City, a municipal corporation, is hereby accepted by the undersigned officer on behalf of the City Council of the City pursuant to authority conferred by resolution of the City Council adopted on April 11, 2023, and the City consents to recordation hereof by its duly authorized officer. 2346338.2 11338-005 3
IN WITNESS WHEREOF, the parties hereto have caused this Termination Agreement to be executed by their respective officers thereunto duly authorized, all as of the day and year first above written.

CITY OF CHOWCHILLA
By: _____________________________________
Rod Pruett, City Administrator

CHOWCHILLA PUBLIC FINANCING AUTHORITY
By: ______________________________________
Rod Pruett, Executive Director

CAPITAL ONE PUBLIC FUNDING, LLC
By:

ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

STATE OF CALIFORNIA )
) ss.

COUNTY OF MADERA )
On _____________________________ before me,
_____________________________________, Notary Public, personally appeared _____________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose names(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal [SEAL]

SIGNATURE OF NOTARY PUBLIC

STATE OF CALIFORNIA )
) ss.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal [SEAL]

SIGNATURE OF NOTARY PUBLIC
NOTARY ACKNOWLEDGMENT – NEW YORK
Insert NEW YORK acknowledgment form for COPF
2346338.2 11338-005

EXHIBIT A

LEGAL DESCRIPTION OF THE PROPERTY
All that certain real property situated in Madera County, State of California, described as follows:

Parcel 1: EDWARD RAY PARK RECREATION BUILDING (625 North 15th Street, Chowchilla, CA):

Lot thirty-six (36) in Block two (2) of Dairyland Farms Subdivision No. 1, according to Map entitled, "Map of Dairyland Farms Subdivision No. 1", filed and recorded in the Office of the County Recorder of the County of Madera, State of California, September 2, 1914, in Vol. 4 of Maps, at Pages 15, 16 and 17.

Save and excepting therefrom that certain parcel described as follows:

Beginning at the Southeast corner of the said Lot 36, thence along the South line of the said Lot 36, South 89° 11 1/2' West 244.6 feet, thence North 0° 37' West 302.8 feet to the Northeasterly line of said Lot 36, thence along the said Northeasterly line and the East line of said Lot 36, South 45° 15' East 348.0 feet and South 0° 37' East 54.2 feet to the point of beginning.

Parcel 2: CHOWCHILLA SENIOR CENTER (820 Robertson Boulevard, Chowchilla, CA) Lots 7, 8 and 9 in Block 111 of the City of Chowchilla, according to Map entitled, "Map of the City of Chowchilla, Cal.", filed and recorded in Office of the County Recorder of the County of Madera, State of California, November 19, 1912, in Vol. 3 of Maps, at Page 20.

Excepting therefrom all minerals, carbons, hydrocarbons, oil, gas, chemical elements and compounds, whether in solid, liquid or gaseous form and all steam and other forms of thermal energy below a depth of 500 feet beneath the surface.

APN: 001-290-011 and 001-116-003

REPORT TO THE CITY COUNCIL
Item 3.4

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TO RETURN TO

THE AGENDA
Meeting of: April 11, 2023
AGENDA SECTION: Consent
SUBJECT: A City Council Resolution Approving the Amendment to the Application for State Transit Assistance (STA) Funds for Fiscal Year 2022/23 and Authorizing the City Administrator or Designee to Execute and Submit the Application to Madera County Transportation Commission (MCTC) PREPARED BY: Joann McClendon, City Clerk
ATTACHMENTS: Resolution, Amended Application, MCTC’s resolution

REVIEWED BY
ADMINISTRATOR ☒ REVIEWED BYATTORNEY ☒ REVIEWED BY FINANCE ☒ RECOMMENDATION:

That the City Council adopts a resolution to approving the amendment to the application for STA Funds for fiscal year 2022/23 and authorizing the City Administrator or designee to execute and submit the application to MCTC.

BACKGROUND:

The State Controller annually approves LTF and STA apportionments by county pursuant to the Transportation Development Act (TDA). MCTC allocates these funds to local agencies based on each jurisdiction’s percentage share of the total County population. Annually, local agencies are required to submit applications for approval to MCTC. The applications may be amended, as needed.

REASON FOR RECOMMENDATION:

On August 9, 2022, the City Council approved Resolution #65-22 for the 2022/23 Transportation Development Act (TDA) Application which includes LTF and STA funds, allocated by the Madera County Transportation Commission (MCTC). LTF funds must be used for transportation related services such as transit services, street construction, program planning, and administration. STA funds must be used for transit related programs only and are, therefore, programmed for operations of the Chowchilla Transit ondemand system.

At their November 23, 2022 Board meeting, MCTC revised STA apportionments based on the Governor’s final budget apportionments and subsequently requested that the local agencies submit amended applications. Filing an amended application is necessary to access the additional $49,628.00 STA funds.

FISCAL IMPACT:

There are no impacts to the General Fund.

ACTIONS FOLLOWING APPROVAL:

Upon obtaining required signatures, City Clerk to submit documents to MCTC.

COUNCIL RESOLUTION # -23

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHOWCHILLA, CALIFORNIA

APPROVING THE AMENDMENT TO THE APPLICAATION FOR STATE TRANSIT ASSISTANCE (STA) FUNDS FOR FISCAL YEAR 2022/23 AND AUTHORIZING THE CITY ADMINISTRATOR OR

DESIGNEE TO EXECUTE AND SUBMIT THE APPLICATION TO MCTC
WHEREAS, the State Transit Assistance (STA) funds are annually allocated by Madera County Transportation Commission (MCTC) pursuant to the TDA; and, WHEREAS, the City of Chowchilla prepares the applications outlining the intended uses for the STA funds each year and the application may be amended as needed; and, WHEREAS, the MCTC has increased the City’s allocation of STA funds by $49,628.00; and, WHEREAS, the STA fund amended application for FY 2022/23 that describe the intended uses of these funds have been submitted to Council for review and approval.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Chowchilla hereby finds, determines and declares the following:

1. The above recitals are true and correct.

2. The City Council approves the Amended STA Application for FY 2022/23.

3. The City Administrator or designee is authorized to execute and submit the amended application to MCTC.

4. This resolution is effective immediately upon adoption.

PASSED AND ADOPTED by the City Council of the City of Chowchilla this 11th day of April, 2023 by the following vote to wit:

AYES:

NOES:

ABSENT:

ABSTAIN:

APPROVED:

Mayor Ray Barragan
ATTEST:

Joann McClendon, CMC
City Clerk

REPORT TO THE CITY COUNCIL
Item 6.1

CLICK HERE

TO RETURN TO

THE AGENDA
Meeting of: April 11, 2023
AGENDA SECTION: New Business
SUBJECT: Presentation of the City’s Fiscal Year 2021-2022 Financial Statement Audit PREPARED BY: Rod Pruett, City Administrator
ATTACHMENTS: PDF version of the Audit
Audit Communication Letter
Management Communication Letter
Single Audit Report

REVIEWED BY
ADMINISTRATOR ☒ REVIEWED BYATTORNEY ☒ REVIEWED BY FINANCE ☒ RECOMMENDATION:

Accept the FY 2021/2022 audit as presented.

BACKGROUND:

Annually, the City has a financial statement audit performed by an independent audit firm which is presented to Council for acceptance.

The Final version of the audit is attached with all signatures on reports. We usually have bound copies for the presentation but due to the timing of the audit being completed and the need to have it done by March 31, 2022, the bound copies will be provided at a later time. The Audit Communication and Management Communication letters are also attached which has communication from the audit firm to management and Council. The Single Audit Report provides information on Federal Grant monies spent, Internal Controls and Compliance but does not provide an opinion on them.

The FY 2021/2022 audit was performed by Price Paige & Company, Inc. Fausto Hinojosa, the Managing Partner of Price Paige & Company, oversaw the audit and Anthony Gonzales, the Audit Supervisor, will be presenting the audit to Council.

REASON FOR RECOMMENDATION:

The FY 2021/2022 audit has received a “clean”/ unmodified opinion, which is the best opinion you can receive. There was one finding regarding the year-end closing procedures and minimal journal entries.

Accepting the results means that Council understands the results of the audit.

FISCAL IMPACT:

None
ALTERNATIVES:

Don’t accept the audit.

ACTIONS FOLLOWING APPROVAL:

Any journal entries proposed by the auditors will be uploaded to our system. The books for Fiscal Year 2021/2022 will be formally closed.

CITY OF CHOWCHILLA

CALIFORNIA

FINANCIAL STATEMENTS

FOR THE YEAR ENDED
JUNE 30, 2022

CITY OF CHOWCHILLA
JUNE 30, 2022

TABLE OF CONTENTS
Page
Independent Auditor’s Report ................................................................................................................ 1 Management’s Discussion and Analysis............................................................................................... 5 Basic Financial Statements
Government-Wide Financial Statements:

Statement of Net Position ........................................................................................................... 14 Statement of Activities ................................................................................................................. 15 Fund Financial Statements:

Balance Sheet – Governmental Funds ....................................................................................... 18 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position .............................................................................................. 19 Statement of Revenues, Expenditures, and Changes in
Fund Balances – Governmental Funds ................................................................................... 20 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities ................................... 21 Statement of Net Position – Proprietary Funds .......................................................................... 22 Statement of Revenues, Expenses, and Changes in
Net Position – Proprietary Funds ............................................................................................. 23 Statement of Cash Flows – Proprietary Funds ........................................................................... 24 Statement of Fiduciary Net Position – Fiduciary Funds .............................................................. 26 Statement of Changes in Fiduciary Net Position – Fiduciary Funds .......................................... 27 Notes to the Basic Financial Statements ........................................................................................... 30 Required Supplementary Information
Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual:

General Fund .............................................................................................................................. 68 CDBG Grants Special Revenue Fund ........................................................................................ 69 Impact Fees Special Revenue Fund ........................................................................................... 70 Measure N Special Revenue Fund ............................................................................................. 71 Notes to the Required Supplementary Information ........................................................................... 72 Cost-Sharing Multiple-Employer Defined Benefit Pension Plan Schedule of the City’s Proportionate Share of the Net Pension Liability ....................................... 73 Cost-Sharing Multiple-Employer Defined Benefit Pension Plan Schedule of Contributions ............................................................................................................... 74

CITY OF CHOWCHILLA
JUNE 30, 2022

TABLE OF CONTENTS
(Continued)
Page
Other Supplementary Information
Combining Nonmajor Special Revenue Funds Statements:

Combining Balance Sheet – Nonmajor Special Revenue Funds ............................................... 76 Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Nonmajor Special Revenue Funds .............................................................. 78 Combining Statement of Net Position – Nonmajor Enterprise Funds ............................................... 80 Combining Statement of Revenues, Expenses and Changes in Net Position – Nonmajor Enterprise Funds .................................................................................... 81 Combining Statement of Cash Flows – Nonmajor Enterprise Funds ............................................... 82 Combining Statement of Net Position – Internal Service Funds ....................................................... 84 Combining Statement of Revenues, Expenses and Changes in Net Position – Internal Service Funds ............................................................................................ 85 Combining Statement of Cash Flows – Internal Service Funds ........................................................ 86 Combining Statement of Fiduciary Net Position – Custodial Funds .................................................. 87 Combining Statement of Changes in Fiduciary Net Position – Custodial Funds .............................. 88 1 INDEPENDENT AUDITOR’S REPORT
To the Honorable Mayor and City Council
City of Chowchilla, California
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Chowchilla, California (the City), as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Chowchilla, California, as of June 30, 2022, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Change in Accounting Principle
As discussed in Note 15 to the financial statements, in 2022 the City adopted new accounting guidance, GASBS No. 87, Leases. Our opinions are not modified with respect to this matter.

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

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.
2 Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

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

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

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, budgetary comparison schedules, schedule of the City’s Proportionate Share of the Net Pension Liability, and Schedule of Contributions, as noted on the table of contents be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Chowchilla, California’s basic financial statements. The accompanying combining fund financial statements are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial 3 statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements and the schedule of expenditures of federal awards are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated March 30, 2023, on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering City’s internal control over financial reporting and compliance.

Clovis, California
March 30, 2023
4 THIS PAGE IS LEFT BLANK INTENTIONALLY

CITY OF CHOWCHILLA
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2022
5 As management of the City of Chowchilla, we offer readers of the City of Chowchilla’s financial statements this narrative overview and analysis of the financial activities of the City of Chowchilla for the fiscal year ended June 30, 2022. We encourage readers to consider the information presented here in conjunction with information that is included within the financial statements.

FINANCIAL HIGHLIGHTS
The assets of the City of Chowchilla exceeded its liabilities as of June 30, 2022 by $69,604,535. Of this amount, unrestricted net position of $1,554,013 may be used to meet the City’s ongoing obligations to citizens and creditors. As of June 30, 2021, the assets and deferred outflows of the City exceeded its liabilities and deferred inflows by $50,530,415 with unrestricted deficit net position totaling $13,437,974.

Total net position increased by $19,074,120 during the year ended June 30, 2022. Net position associated with governmental activities increased by $17,195,970 while net position associated with business-type activities increased by $1,878,150. For the year ended June 30, 2021, total net position increased by $4,807,018 with net position associated with governmental activities increasing by $4,351,542 and net position associated with business-type activities increasing by $455,476.

As of the close of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $28,521,237, an increase of $6,897,913 compared with the prior year. Of this amount, $9,761,567 is available for spending and $18,759,670 is restricted or otherwise designated for specific future uses. For the year ended June 30, 2021, the City’s governmental funds had combined ending fund balances of $21,623,324, with $5,710,941 being available for spending and $15,912,383 restricted for specific future uses. The combined ending fund balances as of June 30, 2021 represented an increase of $5,265,158 over the June 30, 2020 combined ending fund balances.

At the end of the current fiscal year, the fund balance for the general fund was $12,532,988 or 137 percent of general fund operating expenditures for the year ended June 30, 2022. The general fund’s fund balance increased by $5,403,820 for the year ended June 30, 2021. At the end of the prior fiscal year, the fund balance of the general fund was $7,129,168 or 107 percent of that year’s general fund operating expenditures. The general fund’s fund balance increased by $1,456,876 during the prior year.

The City’s total debt obligations (excluding post-retirement benefits) decreased by $912,214. This was attributable to not issuing any new debt in FY 2022 and making our scheduled principal payments on preexisting debt. During the prior year, total debt obligations decreased by $1,032,447.

OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis are intended to serve as an introduction to the City of Chowchilla’s basic financial statements. The City’s basic financial statements are comprised of three components: 1) government-wide financial statements, 2) fund financial statements and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves.

Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of the City’s finances, in a manner similar to a private-sector business.

The statement of net position presents information on all of the City’s assets and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating.

The statement of activities presents information showing how the City’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenue and expense are reported in this statement for some items that will result in cash flows in future fiscal periods.

CITY OF CHOWCHILLA
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2022
6 Both of the government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenue (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City include general government, public safety, highways and streets, culture and recreation, community development and other charges. The business-type activities of the City include water, sewer, storm drain and solid waste disposal systems, as well as airport activities.

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, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds and fiduciary 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 statements, governmental fund financial statements focus on near term inflows and outflows of spendable resources, as well as 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 governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the City’s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenue, expenditures and changes in fund balance provide reconciliations to facilitate this comparison between the two.

The City maintains 43 individual governmental funds. Many funds are grouped together by purpose or type for financial reporting purposes. There are 16 governmental funds presented for financial statement purposes.

Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenue, expenditures and changes in fund balance for the general fund which is considered a major fund, three special revenue funds, one debt service fund and one capital projects fund which are presented separately for the purpose of consistency. Data from the other ten special revenue funds are combined into a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements elsewhere in this report.

The City adopts an annual budget for its general fund and all special revenue funds. Budgetary comparison statements have been provided for the general fund and the major special revenue funds to demonstrate compliance with the 2021/2022 budget.

Proprietary funds. The City maintains two different types of proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements.

The City maintains five individual enterprise funds. Information is presented separately in the proprietary statement of net position and the proprietary statement of revenue, expense and changes in fund net position for all five enterprise funds.

An internal service fund is used to accumulate and allocate costs internally among the City’s various functions.

The City uses two internal service funds to account for its fleet maintenance and information technology activities. These funds costs are allocated amongst all funds that use those services, both governmental and business-type, so the funds themselves are excluded in the government-wide financial statements but are presented separately in the proprietary funds’ financial statements.

CITY OF CHOWCHILLA
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2022
7 Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the City. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the City’s own programs. The accounting used for fiduciary funds is much like that used for proprietary funds.

Notes to the 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.

Supplementary information. In addition to the basic financial statements and accompanying notes, this report also presents certain other supplementary information. The combining statements referred to earlier in connection with the non-major funds are presented after the basic financial statements.

GOVERNMENT-WIDE FINANCIAL ANALYSIS
As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. As of June 30, 2022, the City’s assets exceeded liabilities by $69,604,535. A significant portion of the City’s net position (40 percent) reflects its investment in capital assets, less any related debt used to acquire those assets that is still outstanding. Capital assets are used to provide services to citizens and they are not available for future spending. Although the investment in capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.

The following schedules represent a summary of the City’s net position and activities for the year ended June 30, 2022, with a comparison to the total net position and activities for the year ended June 30, 2021:

Statements of Net Position
June 30, 2022 and 2021
06/30/2022 06/30/2021 06/30/2022 06/30/2021 06/30/2022 06/30/2021 Assets
Current and other assets 58,298,813 $ 46,408,275 $ 8,932,958 $ 7,415,730 $ 67,231,771 $ 53,824,005 $ Capital assets 22,186,080 19,986,237 24,000,938 24,645,473 46,187,018 44,631,710 Total assets 80,484,893 66,394,512 32,933,896 32,061,203 113,418,789 98,455,715 Deferred Outflows of Resources 5,027,390 6,494,375 1,131,789 756,982 7,626,164 5,784,372 Liabilities
Long-term liabilities 27,358,400 29,125,818 14,240,294 14,689,463 41,598,694 43,815,281 Other liabilities 5,073,287 3,929,104 538,714 552,876 5,612,001 4,481,980 Total liabilities 32,431,687 33,054,922 14,779,008 15,242,339 47,210,695 48,297,261 Deferred Inflows of Resources 4,708,340 3,692,971 536,752 704,071 4,229,723 5,412,411 Net Position
Net investment in capital assets 15,025,723 12,594,397 12,771,444 13,346,651 27,797,167 25,941,048 Restricted 40,253,355 38,027,341 - - 40,253,355 38,027,341 Unrestricted (deficit) (4,424,468) (16,963,098) 5,978,481 3,525,124 1,554,013 (13,437,974) Total net position, restated 50,854,610 $ 33,658,640 $ 18,749,925 $ 16,871,775 $ 69,604,535 $ 50,530,415 $ Governmental Business-Type
Activities Totals Activities

CITY OF CHOWCHILLA
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2022
8 Statements of Activities
For the Years Ended June 30, 2022 and 2021
06/30/2022 06/30/2021 06/30/2022 06/30/2021 06/30/2022 06/30/2021 Revenues:

Program revenues:

Charges for services 2,975,791 $ 1,397,085 $ 6,851,615 $ 6,422,981 $ 9,827,406 $ 7,820,066 $ Operating grants and contributions 2,283,132 3,772,425 25,453 4,229 2,308,585 3,776,654 Capital grants and contributions 502,203 406,021 30,800 116,054 533,003 522,075 General revenues:

Property taxes 1,140,855 1,018,041 20,779 18,514 1,161,634 1,036,555 Sales taxes 5,191,215 4,428,313 - - 5,191,215 4,428,313 Transient lodging taxes 370,300 288,647 - - 370,300 288,647 Franchises fees 301,133 287,979 - - 301,133 287,979
Documentary stamp 72,147 72,413 - - 72,147 72,413
Motor vehicle in lieu - unrestricted 2,705,095 2,339,898 - - 2,705,095 2,339,898 Investment earnings 500,639 490,653 19,346 26,810 519,985 517,463 Rental income 94,920 107,764 - - 94,920 107,764
American Rescue Plan Act 4,380,142 - - - 4,380,142 -
Miscellaneous 307,628 329,181 234,153 278,431 541,781 607,612 Gain/loss on sale of capital assets 1,906 - 1,280 15,300 3,186 15,300 Total revenues 21,227,106 14,938,420 7,183,426 6,882,319 28,410,532 21,820,739 Expenses:

General government (36,132) 876,677 - - (36,132) 876,677 Public safety 712,460 5,266,802 - - 712,460 5,266,802
Highways and streets 1,951,088 1,655,230 - - 1,951,088 1,655,230 Culture and recreation 146,001 797,281 - - 146,001 797,281 Community development 189,115 1,128,128 - - 189,115 1,128,128 Interest and fiscal charges 1,019,279 1,034,755 - - 1,019,279 1,034,755 Water - - 2,319,312 2,918,098 2,319,312 2,918,098
Solid waste - - 1,792,268 1,734,398 1,792,268 1,734,398 Sewer - - 1,141,244 1,726,879 1,141,244 1,726,879
Airport - - 57,864 46,186 57,864 46,186
Storm drain - - 43,913 46,282 43,913 46,282
Total expenses 3,981,811 10,758,873 5,354,601 6,471,843 9,336,412 17,230,716 Transfers (45,000) (49,325) 49,325 45,000 - -
Changes in net position 17,195,970 4,134,547 1,878,150 455,476 19,074,120 4,590,023 Net position at beginning of year, restated 33,658,640 29,524,093 16,871,775 16,416,299 50,530,415 45,940,392 Net position at end of year 50,854,610 $ 33,658,640 $ 18,749,925 $ 16,871,775 $ 69,604,535 $ 50,530,415 $ Activities Totals
Governmental Business-Type
Activities
Governmental activities. Governmental activities increased the City’s net position by $17,195,970 (an increase of $13,061,423 compared to the prior year). This was due primarily to receiving roughly $4.3M in ARPA funds that have not been spent and the GASB 68 calculation regarding pension obligations resulted in a $6.8M positive adjustment.

Business-type activities. Business-type activities increased the City’s net position by $1,878,150 (an increase of $1,422,674 compared to the prior year). This is primarily due to rate increases per the Proposition 218 and a reduction of capital projects.

CITY OF CHOWCHILLA
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2022
9 FINANCIAL ANALYSIS OF THE CITY'S FUNDS
As noted earlier, the City of Chowchilla uses fund accounting to ensure and demonstrate compliance with finance related legal requirements.

Governmental funds. The purpose of the City’s governmental fund financial statements is to provide information on near-term inflows, outflows and balances of spendable resources. Such information is useful in assessing the City’s financing requirements. In particular, an unreserved fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year.

As of June 30, 2022, the City’s governmental funds reported combined ending fund balances of $28,521,237, an increase of $6,897,913 in comparison to the prior year. Of this amount, $9,761,567 (34 percent) was unassigned, which is available for spending at the City’s discretion. The remainder of the fund balance is assigned to indicate that it is not available for new spending because it has already been designated to liquidate contracts and purchase orders of the prior period or cover the next year budget deficit ($1,064,841), committed by the Council ($910,223) restricted by external entities ($16,283,869) or non-spendable because the assets that will not be converted to cash within the next twelve months ($500,737).

The general fund is the City’s chief operating fund. At the end of the current fiscal year, the spendable portion of the fund balance of the general fund was $10,068,868 while the total fund balance was $12,532,988 As a measure of the general fund’s liquidity, it may be useful to compare both the spendable portion of the fund balance and total fund balance to total fund expenditures. Spendable portion of the fund balance represents 105 percent of total general fund operating expenditures, while total fund balance represents 131 percent of the same amount.

The fund balance of the City’s general fund increased by $5,320,917 during the year ended June 30, 2022.

Expenditures increased by 46% and revenue increased by 74% resulting in an excess of revenues over expenditures of $5,661,675. There was $987,987 transferred from other funds to the general fund, $1,330,651 transferred from the general fund to other funds and $1,906 of proceeds from sale of capital assets.

Major Special Revenue funds have a combined fund balance of $8,892,152, all of which is restricted by external entities for various activities.

Proprietary funds. The City’s proprietary funds provide the same type of information found in the governmentwide financial statements, but in more detail.

Unrestricted net position of the proprietary funds was $5,945,808 as of June 30, 2022. The total increase in the net position of the proprietary funds was $1,780,398 for the year. Other factors concerning the finances of these funds have already been addressed in the discussion of the City’s business-type activities.

GENERAL FUND BUDGETARY HIGHLIGHTS
The general fund final budgeted expenditures were greater that the original budgeted expenditures by $758,010.

Actual expenditures were $2,005,079 less than final budgeted expenditures. Final anticipated revenue was $3,731,910 greater than original anticipated revenue. Actual total revenue was $2,266,834 more than the final anticipated revenue. These numbers represent original City budget information and are not necessarily reflective of the activity reported in the budgetary comparison schedules. Management believes this information is the most accurate and useful for the users of the financial statements.

The large increase in actual revenues versus final budgeted revenues is due to ARPA funding that was not included in the budget. The large decrease in actual expenditures versus final budgeted expenditures is due to the timing of projects being completed.

CITY OF CHOWCHILLA
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2022
10 CAPITAL ASSET AND DEBT ADMINISTRATION
Capital assets. The City’s total capital assets for its governmental and business-type activities as of June 30, 2022 amounted to $46,187,018 (net of accumulated depreciation). This investment in capital assets includes land, buildings, improvements, service lines, automobiles, equipment and streetlights. In addition, all sidewalks, bridges and roads within the city limits belong to the City.

City of Chowchilla's Capital Assets
(net of depreciation)
2022 2021 2022 2021 2022 2021
Land 721,926 $ 721,926 $ 2,030,152 $ 2,030,152 $ 2,752,078 $ 2,752,078 $ Construction in progress 3,038,329 464,428 270,803 2,888,780 3,309,132 3,353,208 Land improvements 404,542 479,187 380,434 417,705 784,976 896,892 Building improvements 4,386,064 4,590,975 2,174,884 2,253,871 6,560,948 6,844,846 Right-to-use leased buildings and improvements 29,219 38,959 - - 29,219 38,959 Machinery, equipment and vehicles 2,570,425 2,587,002 990,367 857,872 3,560,792 3,444,874 Infrastructure 11,035,575 11,103,761 18,154,298 16,197,093 29,189,873 27,300,854 Total, restated $ 19,986,238 22,186,080 $ 24,000,938 $ 24,645,473 $ 46,187,018 $ 44,631,711 $ Governmental Activities Business-Type Activities Total
Major capital asset events during the year ended June 30, 2022 included the following:
• Various infrastructure improvements amounted to $1,276,511 • Vehicles, machinery and equipment acquisitions amounted to $1,135,880 Additional information on the City’s capital assets can be found in note six.

Long-term liabilities. As of June 30, 2022, the City had $41,550,650 in outstanding long-term debt consisting of four revenue bond issues ($18,335,000), two loans from the State of California ($12,478,007), one Pension Obligation Bond ($9,730,000), net unamortized bond premiums/discounts ($536,026) and compensated absences ($471,617). The revenue bonds are obligations of the water, sewer and general fund. Principal payments on the revenue bonds during the year reduced the amount owed by $278,000. The certificates of participation (COP’s) were an obligation of the water funds which was paid off. Principal payments on the COP’s during the year reduced the amount owed by $70,000. There was a $160,300 principal decrease in the loans payable to the State of California for the completion of the city-wide water meter upgrade project which is an obligation of the water fund.

The City’s total debt obligations (including post-retirement benefits) decreased by $2,202,892. The Pension Obligation Bonds that were issued of $10,155,000 were used to pay down the Unfunded Liability. Compensated absences payable increased by $44,873 during the year.

City of Chowchilla's Outstanding Bonds, Certificates of Participation and Loans 2022 2021 2022 2021 2022 2021
Bonds 16,890,000 $ 17,528,000 $ 11,175,000 $ 11,240,000 $ 28,065,000 $ 28,768,000 $ Certificates of Participation - - - 70,000 - 70,000
Leases 48,044 61,739 - - 48,044 61,739
Loans 9,913,215 9,913,215 2,564,792 2,725,092 12,478,007 12,638,307 Total $ 27,502,954 26,851,259 $ 13,739,792 $ 14,035,092 $ 40,591,051 $ 41,538,046 $ Governmental Activities Business-Type Activities Total
Additional information on the City’s long-term liabilities can be found in notes seven, eight and nine.

CITY OF CHOWCHILLA
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2022
11 ECONOMIC FACTORS AND NEXT YEAR'S BUDGET
The City continues to focus on maintaining a balanced budget and forecasting the needed resources to provide efficient and effective levels of service to the public. The City Council and staff continue to follow a conservative approach to the public’s finances. Various economic outlook indicators in California, such as COVID-19 related financial impacts, requires Chowchilla and most public agencies in California to look at multi-year budget projections and prepare for possible outcomes of the future. FY 21/22 had a significant increase in sales tax (roughly 30%) which was attributed to people spending more money coming out of COVID as well as the addition of new businesses and changes in state laws regarding the recognition of sales tax for online purchases. FY 22/23 has a more stable outlook on revenues for Chowchilla after seeing the impacts COVID 19 had on our community. With such a large increase to sales tax in FY 21/22 the City was concerned it would stay the same so we decided to budget conservatively with a decrease of roughly 2% projected. As of the date of this audit, that has come true, and we have seen that decrease. Due to the City Council approving a conservative budget and dedication to building reserve levels in the past few years, Chowchilla positioned itself well for any negative economic fluctuations we might see.

This conservative fiscal position does not mean that future goals and objectives are put aside, but rather, that each dollar spent is leveraged to its maximum so that we can continue to aggressively pursue the goals that our community so desperately needs. These needs can be captured in the City’s five Cornerstone Goals:
 Provide a safe and secure community.
 Strengthen infrastructure and proactively plan for services, finances and processes.  Achieve and maintain fiscal reinforcement and growth.  Enhance the quality of life and sense of place.
 Foster economic development and revenue production.

Specific goals, outcomes, and strategies to reach the outcomes under each of the Cornerstones can be found in the City’s Annual Adopted Budget document under individual department sections.

The City’s budget process, financial policies, and financial metrics are very transparent. This reflects the strategic priorities of the Council and demonstrates accountability to the tax and ratepayers. The City’s budget document meets Government Finance Officers’ Association standards and the City has been awarded the GFOA Distinguished Budget Presentation Award for the last 4 consecutive years.

The biggest economic factor in both the immediate and long-term range has been inflation. The cost of just about everything has increased. This has caused developments to pause because the costs are high to build and interest rates are high for loans. In FY 21/22 we did see a residential project complete that had roughly 125 homes built so we are weathering the storm relatively well. We also received American Rescue Plan Act (ARPA) funds in the amount of roughly $4.2 Million. This has been preliminarily dedicated to essential premium pay and major water infrastructure projects such as a new water tank and well.

As mentioned above, Chowchilla is seeing some renewed interest in all the community and economic development sectors. We have seen an increase in business license and building permits as a result.

Commercial, Industrial and Residential sectors are seeing increased activity. There are multiple residential projects in the works with already approved maps and development agreements in place. AutoZone announced they are bringing a distribution center to Chowchilla that will bring over 300 jobs to our community. The distribution center will be built over the next 2 years and is over 540,000 square feet. With the new and more accepted “work from home” business model, there is a benefit for people to live in Chowchilla where cost of living is reasonable and work in the larger market cities that pay more. The County of Madera has seen this increase in demand as well.

Increased costs are going to be a significant issue to address. Everything is costing more now. Construction costs, supplies, gas, to name a few, have skyrocketed in costs over the last few months and are causing budget and timing issues. The City will be monitoring these issues and forecasting accordingly.

CITY OF CHOWCHILLA
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2022
12 Even though the City issued Pension Obligation Bonds in 2019 to address the significant issue of CalPERS Unfunded Liabilities, there have been new Unfunded Liabilities since then that the City has to keep an eye on.

Even when the PERS Investment Portfolio performs at or above expectations, we still see an increase in Unfunded Liabilities because of changes in actuarial assumptions.

Measure N, a 1% district sales tax add-on approved in 2018, is a Public Safety Measure which the funds are used to upgrade and purchase equipment as well as help with recruitment and retention of public safety employees. Retention of current employees due to increases in pension costs is allowed under this measure.

This measure has performed very well and has been coming in with more revenue than previously expected.

The FY 22/23 budget has the use of Measure M monies to help pay for building improvements at the Police station, Phase II of the fire station expansion and the purchase of a new fire truck for the Fire Department. All these items have been needed for quite some time and could not have been accomplished without Measure N.

We have also used Measure N to hire additional personnel for both the Police and Fire Departments. 13 BASIC FINANCIAL STATEMENTS

CITY OF CHOWCHILLA

STATEMENT OF NET POSITION
JUNE 30, 2022
The notes to the basic financial statements are an integral part of this statement. 14 Governmental Business-Type
Activities Activities Total
ASSETS
Cash and investments $ 6,774,739 24,913,905 $ 31,688,644 $ Restricted cash and investments with fiscal agents 446,008 511,092 957,100 Accounts receivable, net 929,843 541,830 1,471,673
Intergovernmental receivables 43,784 4,702,530 4,746,314 Leases receivable - 173,435 173,435
Notes receivable, net - 23,537,199 23,537,199
Prepaid expenses - 121,970 121,970
Prepaid bond insurance 66,258 17,984 84,242
Land held for resale - 104,000 104,000
Due from Successor Agency - 65,802 65,802
Internal balances 32,673 (32,673) -
Net pension asset 639,653 3,641,739 4,281,392
Capital assets:

Nondepreciable 3,760,255 2,300,955 6,061,210
Depreciable, net of accumulated depreciation/amortization 21,699,983 18,425,825 40,125,808 Total assets 32,933,896 80,484,893 113,418,789

DEFERRED OUTFLOWS OF RESOURCES
Contributions to pension plan in current fiscal year 89,851 589,070 678,921 Deferred outflows of resources from pensions 1,041,938 5,905,305 6,947,243 Total deferred outflows of resources 1,131,789 6,494,375 7,626,164

LIABILITIES
Accounts payable 1,459,570 272,155 1,731,725
Accrued salaries, wages, and benefits 80,506 - 80,506
Deposits 157,500 225,307 382,807
Accrued interest 3,375,711 41,252 3,416,963
Long-term liabilities:

Lease liability due within one year 14,975 - 14,975
Lease liability due in more than one year 33,069 - 33,069 Long-term debt due within one year 837,588 230,300 1,067,888 Long-term debt due in more than one year 14,009,994 26,472,768 40,482,762 Total liabilities 14,779,008 32,431,687 47,210,695

DEFERRED INFLOWS OF RESOURCES
Deferred inflows of resources from leases - 100,549 100,549 Deferred inflows of resources from pensions 536,752 3,592,422 4,129,174 Total deferred inflows of resources 536,752 3,692,971 4,229,723

NET POSITION
Net investment in capital assets 15,025,723 12,771,444 27,797,167 Restricted for:

Highway and streets - 5,930,930 5,930,930
Community development - 25,941,273 25,941,273
Public safety 3,289,140 - 3,289,140
Construction projects - 4,596,838 4,596,838
Debt service - 495,174 495,174
Unrestricted 5,978,481 (4,424,468) 1,554,013
Total net position $ 18,749,925 50,854,610 $ 69,604,535 $

CITY OF CHOWCHILLA

STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2022
The notes to the basic financial statements are an integral part of this statement. 15 Operating Capital
Charges for Grants and Grants and Governmental Business-Type Expenses Services Contributions Contributions Activities Activities Total

FUNCTIONS/PROGRAMS
Governmental activities:

General government (36,132) $ 402,507 $ 14,776 $ - $ 453,415 $ - $ 453,415 $ Public safety 712,460 309,239 244,784 - (158,437) - (158,437) Highways and streets 1,951,088 1,191,973 1,591,469 498,155 1,330,509 - 1,330,509 Culture and recreation 146,001 115,047 - - (30,954) - (30,954) Community development 189,115 957,025 432,103 4,048 1,204,061 - 1,204,061 Interest and fiscal charges - 1,019,279 - - (1,019,279) - (1,019,279) Total governmental activities 2,975,791 3,981,811 2,283,132 502,203 1,779,315 - 1,779,315 Business-type activities:

Water 2,319,312 2,750,945 - - - 431,633 431,633
Solid waste 1,792,268 2,085,189 25,453 - - 318,374 318,374 Sewer 1,141,244 1,784,322 - - - 643,078 643,078
Airport 57,864 20,715 - 30,800 - (6,349) (6,349)
Storm drain 43,913 210,444 - - - 166,531 166,531
Total business-type activities 6,851,615 5,354,601 25,453 30,800 - 1,553,267 1,553,267 Total $ 9,827,406 9,336,412 $ 2,308,585 $ 533,003 $ 1,779,315 1,553,267 3,332,582 General revenues:

Taxes:

Property 1,140,855 20,779 1,161,634
Sales 5,191,215 - 5,191,215
Transient lodging 370,300 - 370,300
Franchise 301,133 - 301,133
Documentary stamp 72,147 - 72,147
Motor vehicle in lieu - unrestricted 2,705,095 - 2,705,095 Investment income 500,639 19,346 519,985
Rental income 94,920 - 94,920
American Rescue Plan Act 4,380,142 - 4,380,142
Legal settlement 400,000 - 400,000
Miscellaneous 307,628 234,153 541,781
Gain on sale of capital assets 1,280 1,906 3,186
Transfers (49,325) 49,325 -
Total general revenues and transfers 324,883 15,416,655 15,741,538 Change in net position 17,195,970 1,878,150 19,074,120
Net position - beginning, restated 16,871,775 33,658,640 50,530,415 Net position - ending $ 18,749,925 50,854,610 $ 69,604,535 $ Program Revenues
Net (Expenses) Revenues and
Changes in Net Position
16 THIS PAGE IS LEFT BLANK INTENTIONALLY
17 FUND FINANCIAL STATEMENTS

CITY OF CHOWCHILLA
BALANCE SHEET – GOVERNMENTAL FUNDS
JUNE 30, 2022
The notes to the financial statements are an integral part of this statement. 18 Other Total
CDBG Impact Debt Capital Governmental Governmental
General Grants Fees Measure N Service Projects Funds Funds ASSETS
Cash and investments $ 739,137 8,896,838 $ 5,074,051 $ 2,819,970 $ 1,265 $ - $ 7,231,464 $ 24,762,725 $ Restricted cash and investments with fiscal agents - - - - 511,092 - - 511,092 Accounts receivable, net 7,315 527,270 - - - - 7,245 541,830 Intergovernmental receivables 268,126 2,837,070 - 487,107 - 67,126 1,043,101 4,702,530 Leases receivable - 173,435 - - - - - 173,435
Notes receivable, net 22,011,803 - - - - - 1,525,396 23,537,199 Due from other funds - 659,213 - - - - - 659,213
Prepaid expenses 11,146 - - - - - 11,681 22,827
Prepaid bond insurance - - - - 17,984 - - 17,984
Land held for resale - - - - - - 104,000 104,000
Advances to other funds - 477,910 - - - - - 477,910
Total assets $ 23,026,381 13,582,882 $ 5,074,051 $ 3,307,077 $ 530,341 $ 67,126 $ 9,922,887 $ 55,510,745 $

LIABILITIES
Accounts payable 622,378 $ 7,707 $ - $ 17,937 $ - $ - $ 550,005 $ 1,198,027 $ Deposits 157,500 - - - - - - 157,500
Due to other funds - - - - - 66,429 526,982 593,411
Advances from other funds - - 477,910 - - - - 477,910
Total liabilities 7,707 779,878 477,910 17,937 - 66,429 1,076,987 2,426,848

DEFERRED INFLOWS OF RESOURCES
Deferred inflows from lease proceeds - 100,549 - - - - - 100,549 Unavailable revenues 22,011,803 169,467 - - - - 2,280,841 24,462,111 Total deferred inflows of resources 22,011,803 270,016 - - - - 2,280,841 24,562,660

FUND BALANCES
Nonspendable:

Prepaid expenses 11,146 - - - - - 11,681 22,827Advances to other funds 477,910 - - - - - - 477,910 Restricted for:

Highway and streets - - - - - - 5,463,476 5,463,476
Community development 1,006,871 - - - - - 1,397,203 2,404,074 Public safety - - - 3,289,140 - - - 3,289,140
Construction projects - - 4,596,141 - 35,167 697 - 4,632,005 Debt service - - - - 495,174 - - 495,174
Committed to:

Emergency contingency 910,223 - - - - - - 910,223
Assigned to:

General government - 4,689 - - - - - 4,689Public safety - 1,057,206 - - - - - 1,057,206 Culture and recreation - 2,946 - - - - - 2,946
Unassigned - 10,068,868 - - - - (307,301) 9,761,567
Total fund balances 12,532,988 1,006,871 4,596,141 3,289,140 530,341 697 6,565,059 28,521,237 $ 23,026,381 13,582,882 $ 5,074,051 $ 3,307,077 $ 530,341 $ 67,126 $ 9,922,887 $ 55,510,745 $ Total liabilities, deferred inflows of resources, and fund balances Special Revenue

CITY OF CHOWCHILLA

RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS

TO THE STATEMENT OF NET POSITION
JUNE 30, 2022
The notes to the financial statements are an integral part of this statement. 19 Total fund balances - governmental funds $ 28,521,237 21,936,283
Contributions to the pension plan subsequent to the measurement date 560,973 Deferred outflows of resources from pensions 5,559,958
Deferred inflows of resources from pensions (3,402,816) Bonds and loans payable (26,838,740)
Net pension liability 3,441,216
(3,375,711)
24,462,111
(9,901)
Net position of governmental activities $ 50,854,610
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. Those liabilities consist of:

Internal service funds are used by management to charge the costs to individual funds. These assets, deferred outflows of resources, liabilities, and deferred inflows of resources of the internal service funds are included in governmental activities in the statement of net position.

Interest payable on long-term debt does not require the use of current financial resources. Therefore, interest payable is not reported as a liability in the governmental funds balance sheet.

Other long-term assets are not available to pay for current period expenditures and, therefore, are deferred in the funds.

Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the governmental funds.

Pension related deferrals are reported as deferred outflows and inflows of resources on the statement of net position:

CITY OF CHOWCHILLA
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES – GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2022
The notes to the financial statements are an integral part of this statement. 20 Other Total
CDBG Impact Debt Capital Governmental Governmental
General Grants Fees Measure N Service Projects Funds Funds

REVENUES
Taxes $ - 4,471,661 $ - $ 2,603,988 $ - $ - $ - $ 7,075,649 $ Licenses and permits - 971,461 - - - - - 971,461
Fines and penalties - 156,013 - - - - - 156,013
Intergovernmental revenues 432,103 7,350,939 - - - 68,449 1,778,481 9,629,972 Use of money and property 3,062 117,627 13,561 9,563 121 - 19,104 163,038 Charges for services 28,271 166,822 1,315,958 - - - 324,657 1,835,708 Legal settlement - 400,000 - - - - - 400,000
Miscellaneous - 246,110 - 725 54,357 - 6,437 307,629
Total revenues 13,880,633 463,436 1,329,519 2,614,276 54,478 68,449 2,128,679 20,539,470

EXPENDITURES
Current:

General government 1,052,455 - - - - - - 1,052,455
Public safety 3,981,973 - - 675,929 - - 13,382 4,671,284 Highways and streets - - - - - - 1,214,553 1,214,553
Culture and recreation 653,709 - - - - - - 653,709
Community development 645,720 488,640 - - - - 2,277 1,136,637 Capital outlay - 1,885,101 211,667 832,416 - 76,840 571,710 3,577,734 Debt service:

Principal - - - - 638,000 - - 638,000
Interest - - - - 717,819 - - 717,819
Fiscal charges - - - - 9,600 - - 9,600
Total expenditures 488,640 8,218,958 211,667 1,508,345 1,365,419 76,840 1,801,922 13,671,791 Excess (deficiency) of revenues over (under) expenditures 5,661,675 (25,204) 1,117,852 1,105,931 (1,310,941) (8,391) 326,757 6,867,679

OTHER FINANCING SOURCES (USES)
Transfers in 39,511 987,987 - 15,750 1,310,712 9,091 757,770 3,120,821 Transfers out (4,901) (1,330,651) (44,167) (958,838) - (518) (836,321) (3,175,396) Proceeds from sales of capital assets - 1,906 - - - - - 1,906 Total other financing sources (uses) (340,758) 34,610 (44,167) (943,088) 1,310,712 8,573 (78,551) (52,669) Net change in fund balances 9,406 5,320,917 1,073,685 162,843 (229) 182 248,206 6,815,010 997,465 7,212,071 3,522,456 3,126,297 530,570 515 6,316,853 21,706,227 Fund balances - ending $ 1,006,871 12,532,988 $ 4,596,141 $ 3,289,140 $ 530,341 $ 697 $ 6,565,059 $ 28,521,237 $ Special Revenue
Fund balances - beginning, restated

CITY OF CHOWCHILLA

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, 2022
The notes to the financial statements are an integral part of this statement. 21 Net change in fund balances - total governmental funds 6,815,010 $ Capital outlay 3,410,594
Depreciation expense (1,317,062)
Repayment of the principal of long-term debt 638,000
Amortization on bond discounts and premiums (3,451)
(291,394)
6,842,976
432,521
253,209
415,567
Change in net position of governmental activities 17,195,970 $ Amounts reported for governmental activities in the statement of activities are different because:

The issuance of long-term debt provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds report the effect of issuance costs, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. This amount is the net effect of these differences in the treatment of long-term debt and related items:

Accrued interest payable on long-term debt is reported in the government-wide statement of activities, but does not require the use of current financial resources. This amount represents the change in accrued interest payable not reported in governmental funds.

The changes in net position of certain activities of the internal service funds is reported within governmental activities.

Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds.

The distribution of housing loans and corresponding payments that were recognized in the governmental funds are not recognized in the statement of activities.

Governmental funds report capital outlays as expenditures. However, in the statement of activities, the costs of these assets are allocated over their estimated useful lives and reported as depreciation expense. In the current period, these amounts are:

Changes to net pension liability and pension related deferred outflows and inflows of resources do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds.

CITY OF CHOWCHILLA

STATEMENT OF NET POSITION

PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
The notes to the financial statements are an integral part of this statement. 22 Governmental
Activities
Other Internal
Solid Enterprise Service
Water Waste Sewer Funds Total Funds
ASSETS
Current assets:

Cash and investments 1,897,092 $ 185,911 $ 2,620,563 $ 2,071,173 $ 6,774,739 $ 151,180 $ Restricted cash and investments with fiscal agents 179,978 - 266,030 - 446,008 - Accounts receivable, net 336,967 296,777 263,644 32,455 929,843 - Intergovernmental receivables - - 30,907 12,877 43,784 - Prepaid expenses - - - - - 99,143
Prepaid bond insurance 55,203 - 11,055 - 66,258 -
Total current assets 482,688 2,469,240 3,192,199 2,116,505 8,260,632 250,323 Noncurrent assets:

Net pension asset 377,935 - 229,402 32,316 639,653 200,523 Capital assets:

Nondepreciable 33,079 - 1,380,954 886,922 2,300,955 -
Depreciable, net of accumulated depreciation - 15,143,940 6,265,339 290,704 21,699,983 249,797 Total noncurrent assets 15,554,954 - 7,875,695 1,209,942 24,640,591 450,320 Total assets 18,024,194 482,688 11,067,894 3,326,447 32,901,223 700,643

DEFERRED OUTFLOWS OF RESOURCES
Contributions to pension plan in current fiscal year 53,316 - 32,024 4,511 89,851 28,097 Deferred outflows of resources from pensions 598,859 - 385,544 57,535 1,041,938 345,347 Total deferred outflows of resources 652,175 - 417,568 62,046 1,131,789 373,444

LIABILITIES
Current liabilities:

Accounts payable 120,250 148,292 3,222 391 272,155 261,543 Accrued salaries, wages, and benefits - - - - - 80,506
Deposits 225,307 - - - 225,307 -
Accrued interest 30,254 - 10,998 - 41,252 -
Compensated absences - - - - - 322,588
Current portion of lease liabilities - - - - - 14,975
Current portion of long-term debt - 195,300 35,000 - 230,300 - Total current liabilities 599,153 120,250 49,220 391 769,014 679,612 Noncurrent liabilities:

Compensated absences - - - - - 149,028
Lease liabilities - - - - - 33,069
Long-term debt 10,953,179 - 3,056,815 - 14,009,994 -
Total noncurrent liabilities 10,953,179 - 3,056,815 - 14,009,994 182,097 Total liabilities 11,552,332 120,250 3,106,035 391 14,779,008 861,709

DEFERRED INFLOWS OF RESOURCES
Deferred inflows of resources from pensions 301,230 - 203,580 31,942 536,752 189,606 Total deferred inflows of resources 301,230 - 203,580 31,942 536,752 189,606

NET POSITION (DEFICIT)
Net investment in capital assets 6,773,310 - 4,820,508 1,177,626 12,771,444 234,822 Unrestricted 49,497 362,438 3,355,339 2,178,534 5,945,808 (212,050) Total net position (deficit) $ 362,438 6,822,807 $ 8,175,847 $ 3,356,160 $ 18,717,252 $ 22,772 Adjustment to report the cumulative internal balance
for the net effect of the activity between the internal service funds and the enterprise funds over time 32,673 Net position of business-type activities 18,749,925 $
Business-Type Activities - Enterprise Funds

CITY OF CHOWCHILLA

STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION

PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
The notes to the financial statements are an integral part of this statement. 23 Governmental
Activities
Other Internal
Solid Enterprise Service
Water Waste Sewer Funds Total Funds
Operating revenues:

Charges for services 2,750,945 $ 2,085,189 $ 1,784,322 $ 231,159 $ 6,851,615 $ 878,680 $ Miscellaneous 8,791 98,696 95,496 1,170 204,153 400
Total operating revenues 2,849,641 2,093,980 1,879,818 232,329 7,055,768 879,080 Operating expenses:

Personnel services (145,156) - 4,081 (16,188) (157,263) (18,830) Materials, supplies and services 1,697,975 1,792,268 689,321 88,602 4,268,166 356,437 Depreciation 501,035 - 324,855 29,363 855,253 32,102
Total operating expenses 2,053,854 1,792,268 1,018,257 101,777 4,966,156 369,709 Operating income (loss) 795,787 301,712 861,561 130,552 2,089,612 509,371 Nonoperating revenues (expenses):

Use of money and property 6,467 418 6,946 5,515 19,346 - Taxes - - - 50,779 50,779 -
Grants - capital - - - 30,800 30,800 -
Grants - operating - 25,453 - - 25,453 -
Gain (loss) on sale of assets - - 1,280 - 1,280 18
Interest expense (346,164) - (140,033) - (486,197) (4,305) Total nonoperating revenues (expenses) (339,697) 25,871 (131,807) 87,094 (358,539) (4,287) 327,583 456,090 729,754 217,646 1,731,073 505,084
Transfers in 11,461 - 7,393 40,472 59,326 5,250
Transfers out - (5,001) (5,000) (10,001) - -
Change in net position 327,583 462,550 732,147 258,118 1,780,398 510,334 Net position (deficit) - beginning, restated 6,360,257 34,855 7,443,700 3,098,042 (487,562) Net position - ending 6,822,807 $ 362,438 $ 8,175,847 $ 3,356,160 $ 22,772 $ Adjustment for the net effect of the current year activity between the internal service funds and the enterprise funds 97,752 Changes in net position of business-type activities 1,878,150 $ Business-Type Activities - Enterprise Funds
Income (loss) before transfers

CITY OF CHOWCHILLA
STATEMENT OF CASH FLOWS – PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
The notes to the financial statements are an integral part of this statement. 24 Governmental
Activities
Other Internal
Solid Enterprise Service
Water Waste Sewer Funds Total Funds
Cash flows from operating activities:

Receipts from customers and users $ 2,016,426 2,731,199 $ 1,747,401 $ 228,953 $ 6,723,979 $ 878,860 $ Payments to suppliers (1,781,903) (1,640,989) (855,534) (103,585) (4,382,011) (197,806) Payments to employees (627,091) - (476,542) (50,499) (1,154,132) (510,302) Other operating revenues 8,791 98,696 95,496 204,153 1,170 400 243,314 561,815 510,821 76,039 1,391,989 171,152
Cash flows from noncapital financing activities:

Grants received 25,453 - - - 25,453 -
Transfer from other funds - 11,461 7,393 40,472 59,326 5,250 Transfer to other funds - (5,001) (5,000) - (10,001) -
Loans from other funds (83,274) - - - (83,274) (97,186) Taxes received - - - 50,779 50,779 -
(57,821) 6,460 2,393 91,251 42,283 (91,936)
Principal paid (281,550) - (38,003) - (319,553) -
Interest paid (341,001) - (134,929) (475,930) - -
Grants received - - 114,000 151,322 37,322 -
Leases paid (18,000)
Acquisition of capital assets (149,397) - 90,232 (39,771) (98,936) (138,413) Proceeds from the sale of assets - - 1,280 1,280 - 18
- (771,948) 32,580 (2,449) (741,817) (156,395)
Cash flows from investing activities:
418 6,467 6,946 - 13,831 -
- - - 5,515 5,515 -
418 6,467 6,946 5,515 19,346 -
185,911 (197,206) 552,740 170,356 711,801 (77,179)
- 2,274,276 2,333,853 1,900,817 6,508,946 228,359
Cash and cash equivalents - ending $ 185,911 2,077,070 $ 2,886,593 $ 2,071,173 $ 7,220,747 $ 151,180 $ Business-Type Activities - Enterprise Funds
Net cash provided by (used for) operating activities
Net cash provided by noncapital financing activities
Interest received
Rents received
Cash flows from capital and related
financing activities:

Net cash provided by (used for) capital and
related financing activities
Cash and cash equivalents - beginning
Net increase (decrease) in cash and
cash equivalents
Net cash provided by investing activities

CITY OF CHOWCHILLA
STATEMENT OF CASH FLOWS – PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
(Continued)
The notes to the financial statements are an integral part of this statement. 25 Governmental
Activities
Other Internal
Solid Enterprise Service
Water Waste Sewer Funds Total Funds
Operating income (loss) 795,787 $ 301,712 $ 861,561 $ 130,552 $ 2,089,612 $ 509,371 $ Depreciation 501,035 - 324,855 29,363 855,253 32,102
(Increase) decrease in:

Accounts receivable (10,789) (68,763) (36,921) (2,206) (118,679) 180 Prepaid expenses - - 3,000 - 3,000 (92,421)
Net pension asset (450,194) - (279,070) (40,005) (769,269) (253,788) Deferred outflows of resources from pensions (242,812) - (119,504) (12,491) (374,807) (89,292) Increase (decrease) in:

Accounts payable and other liabilities 56,986 10,365 (169,213) (14,983) (116,845) 94,090 Deposits (8,957) - - - (8,957) -
Compensated absences - - - - - 44,872
Deferred inflows of resources from
pensions - (79,241) (73,887) (14,191) (167,319) (73,962) $ 243,314 561,815 $ 510,821 $ 76,039 $ 1,391,989 $ 171,152 $ Business-Type Activities - Enterprise Funds
Reconciliation of operating income (loss) to net
cash provided by (used for) operating activities:

Adjustments to reconcile operating income
(loss) to net cash provided by (used for)
operating activities:

Net cash provided by (used for) operating activities

CITY OF CHOWCHILLA

STATEMENT OF FIDUCIARY NET POSITION

FIDUCIARY FUNDS
JUNE 30, 2022
The notes to the financial statements are an integral part of this statement. 26 Successor Agency
Custodial Private Purpose
Funds Trust Fund
ASSETS
Cash and investments (in City investment pool) $ - 2,034,606 $ Restricted cash with fiscal agents - 760,446
Accounts receivable (net) 43,750 25,194
Prepaid expenses 6,671 -
Prepaid bond insurance 41,560 -
Land held for resale 600,667 -
Total assets 692,648 2,820,246

LIABILITIES
Accounts payable 18 26,943
Accrued interest 59,168 -
Due to City 65,802 -
Long-term debt due within one year 265,000 -
Long-term debt due in more than one year 4,855,067 -
Total liabilities 5,245,055 26,943

NET POSITION
Restricted for:

Individuals, organizations, and other governments 2,793,303 - Redevelopment agency dissolution - (4,552,407)
Total net position 2,793,303 $ (4,552,407) $

CITY OF CHOWCHILLA

STATEMENT OF CHANGES IN FIDUCIARY NET POSITION

FIDUCIARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
The notes to the financial statements are an integral part of this statement. 27 Successor Agency
Custodial Private Purpose
Funds Trust Fund

ADDITIONS
Taxes $ 639,084 - $
Property tax collections - 1,580,701
Investment earnings 4,719 423
Total additions 1,585,420 639,507

DEDUCTIONS
Payments to bondholders - 1,475,062
Administrative expenses 112,784 112,784
Interest 133,868 -
Total deductions 1,587,846 246,652
Change in fiduciary net position (2,426) 392,855
Net position (deficit) - beginning 2,795,729 (4,945,262) Net position (deficit) - ending $ 2,793,303 (4,552,407) $ 28 THIS PAGE IS LEFT BLANK INTENTIONALLY
29 NOTES TO THE BASIC FINANCIAL STATEMENTS

CITY OF CHOWCHILLA

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
30 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Reporting Entity
The City of Chowchilla (City) was incorporated on February 7, 1923, as a municipal corporation under the General Laws of the State of California. The City operates as a self-governing local government unit within the State of California. A five-member City Council appoints a City Administrator who administers the daily affairs under the policy guidance of the City Council. The City has limited authority to levy taxes and has the authority to determine user fees for the services that it provides. Voters elect a City Council that passes laws and determines broad policies. The City Council also oversees the operations of the City and approves all budgets, fund transfers, and fund balance reserves. Services provided by the City include public safety, streets and roads, water, sanitation, public improvements, culture and recreation, parks, building inspections, planning and zoning, redevelopment, and general administration.

Blended Component Units
A primary government is financially accountable for a component unit if it appoints a voting majority of an organization’s governing body and it is able to impose its will on the organization, or if there is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on, the primary government. A primary government may also be financially accountable if an organization is fiscally dependent on the primary government regardless of whether the organization has a separately elected governing board, a governing board appointed by a higher level of government, or a jointly appointed board, and there is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on the primary government. Based upon the application of these criteria, the following is a brief description of each component unit included within the City’s reporting entity. All such component units have been “blended” as though they are part of the primary government as the component unit’s governing body is substantially the same as the City’s primary government and there is a financial benefit or burden relationship between the City and the component unit. In addition, management of the City has operational responsibilities for the component unit, and/or the component units provide services almost entirely to the city or for the exclusive benefit of the City, even though it does not provide services directly to it, or the City is entirely or almost entirely responsible for the repayment of the debt of the component unit. Financial information for these component units can be obtained from the City’s Administrative Services Department and from the City’s website at http://ci.chowchilla.ca.us.

The Public Financing Authority (Authority) of the City of Chowchilla was formed on August 14, 1989, for the purpose of assisting the City in the financing of the acquisition, construction and installation of public capital improvements for the use, benefit and enjoyment of the citizens served by the City. The City Council serves as the governing board of the Authority and, therefore, is financially accountable for the operations of the Authority.

The Chowchilla Housing Authority (Housing Authority) was established on January 24, 2012. The Housing Authority was activated pursuant to State Law Section 34240 of the California Health and Safety Code, which allows for every City to establish a housing authority. The Housing Authority is designed to protect local housing funds and programs, provide new revenue opportunities for affordable housing programs, serve the public interest, promote public safety and welfare, and ensure decent, safe sanitary and affordable housing accommodations to persons of low income.

Since the City Council serves as the governing body of these entities, they are considered blended component units. As a result, the financial activities of these entities are integrally related to those of the City and are “blended” with those of the City.

CITY OF CHOWCHILLA

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
31 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Basis of Presentation
The accounts of the City are organized on the basis of funds. A fund is an independent fiscal and accounting entity with a self-balancing set of accounts. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance with finance-related legal and contractual provisions. The minimum number of funds is maintained consistent with legal and managerial requirements.

Government-Wide Financial Statements – The statement of net position and the statement of activities display information about the primary government (the City) and its component units. These statements include the financial activities of the overall government, except for fiduciary activities. Eliminations have been made to minimize the double-counting of internal activities. These statements distinguish between the governmental and business-type activities of the City’s Governmental activities generally are financed through taxes, intergovernmental revenues, and other non-exchange transactions. Business-type activities are financed in whole or in part by fees charged to external parties.

The Statement of Activities presents a comparison between direct expense and program revenues for each different identifiable activity of the City’s business-type activities and for each function of the City’s governmental activities. Direct expenses are those that are specifically associated with a program or function and, therefore, are included in the program expense reported for individual function. Certain indirect costs, which cannot be identified and broken down, are included in the program expenses reported for individual functions and activities. Program revenues include: 1) fines, fees, and charges paid by the recipients of goods and services offered by the programs; and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented instead as general revenues.

Certain eliminations have been made as prescribed by GASB Statement no. 34 in regards to interfund activities, payables, and receivables. All internal balances in the statement of net position have eliminated except those representing balances between the governmental activities and the business-type activities, which are presented as internal balances and eliminated in the total primary government column. In the Statement of Activities those transactions between governmental and business-type activities have not been eliminated. The following interfund activities have been eliminated: due to/due from other funds, interfund advances to/advances from, and transfers in/transfers out.

Fund Financial Statements – The fund financial statements provide information about the City’s funds. Separate statements for each fund category – governmental, proprietary, and fiduciary – are presented. The emphasis of fund financial statements is on major governmental and enterprise funds, each displayed in a separate column.

All remaining governmental and enterprise funds are aggregated and reported as nonmajor funds. An accompanying schedule is presented to reconcile and explain the differences in funds and changes in fund balances as presented in these statements to the net position and changes in net position presented in the government-wide financial statements.

Proprietary fund operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially equal values. Nonoperating revenues, such as subsidies and investment earnings, result from nonexchange transactions or ancillary activities. Operating expenses are those expenses that are essential to the primary operations of the fund. All other expenses are reported as nonoperating expenses.

CITY OF CHOWCHILLA

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
32 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Basis of Presentation (Continued)
The City reports the following major governmental funds:

The General Fund is the City’s primary operating fund. It accounts for all financial resources of the City except for those required to be accounted for in another fund.

The Community Development Block Grant Special Revenue Fund accounts for the revenues received by the various CDBG grants, the uses of those funds (i.e., grants and loans for housing rehabilitation projects), as well as the receipt and re-use of program income generated by the repayment of CDBG loans.

The Impact Fees Special Revenue Fund accounts for the accumulation of resources from developers for the expected future capital cost of the City as a result of development. Impact fees collected are restricted for the use of general, police, fire and parks facilities; and streets and roads, signalization, water, sewer and storm drain capital projects.

The Measure N Special Revenue Fund accounts for 1% Public Safety Sales Tax add-on that was voter approved in 2018 and became effective April 1, 2019. Monies are allocated between Police and Fire Departments and are used for growth and efficiency of the departments.

The Debt Service Fund accounts for the accumulation of resources that are restricted, committed or assigned for the payment of principal and interest on long-term obligations of governmental funds.

The Capital Projects Fund accounts for the acquisition and construction of the City’s major capital projects, other than those financed by proprietary funds.

Enterprise fund financial statements include a statement of net position, a statement of revenues, expenses, and changes in net position, and a statement of cash flows for each major enterprise fund and non-major fund.

The City has five enterprise funds – water, solid waste, sewer, storm drain and airport. These funds are used to account for operations that are financed and operated in a manner similar to private business enterprise. In an enterprise fund, the intent of the City Council is that the costs (expenses, including depreciation) of providing services to the general public, on a continuing basis, be financed or recovered primarily through user charges.

The City reports the following major enterprise funds:

The Water Enterprise Fund accounts for the provision of water to the residents of the City. All activities necessary to provide such services are accounted for in this fund, including, but not limited to, administration, operations, distribution, maintenance, and debt service.

The Solid Waste Enterprise Fund accounts for the revenues and expenses for operation and maintenance of the solid waste system.

The Sewer Enterprise Fund accounts for the provision of wastewater collection and treatment services to the residents of the City. All activities necessary to provide such services are accounted for in this fund, including, but not limited to, administration, operations, maintenance, and debt service.

CITY OF CHOWCHILLA

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
33 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Basis of Presentation (Continued)
Additionally, the government reports the following fund types:

Internal Service Funds:

The Fleet Maintenance Internal Service Fund accounts for the cost associated with maintaining the citywide fleet of vehicles and rolling stock heavy equipment. Charges are assessed to each department on the basis of time/materials necessary to maintain their equipment.

The Information Technology Internal Service Fund accounts for the costs of providing computer and information services. User charges are recovered from other City departments that utilized the services provided.

The Employee Benefits Internal Service Fund accounts for compensated absences and other employee benefits that are provided by the City.

Fiduciary Funds:

The Custodial Funds accounts for assets held by the City as an agent for special districts.

The Successor Agency Private Purpose Trust Fund accounts for assets and liabilities of the former redevelopment agency until they are distributed to other units of state and local government as a result of the dissolution of the redevelopment agency.

Measurement Focus, Basis of Accounting
Government-Wide, Proprietary and Fiduciary Fund Financial Statements – The government-wide, proprietary, and fiduciary fund financial statements are reported using the economic resources measurement focus. The government-wide and proprietary fund financial statements are reported using the accrual basis of accounting.

Revenues are recorded when earned and expenses and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Nonexchange transactions, in which the City gives (or receives) value without directly receiving (or giving) equal value in exchange, include property and sales taxes, grants entitlements and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenues from sales taxes are recognized when the fiscal year in which all eligibility requirements have been satisfied.

Governmental Fund Financial Statements – Governmental funds are reported using current financial resources measurement focus and the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recognized when measurable and available. Property and sales taxes, interest, and charges for services are accrued when their receipt occurs within sixty days after the end of the accounting period to be both measurable and available. Expenditures are generally recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to claims and judgments and compensated absences, are recorded only when payment is due. General capital assets acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term debt and capital leases are reported as other financing sources.

Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of each fund. Nonoperating revenues, such as interest income, state and federal grants and subsidies, result from nonexchange transactions or ancillary activities. Operating expenses include costs for providing services and delivering goods such as administrative expenses and depreciation on capital assets. All other expenses not meeting this definition are reported as nonoperating expenses.

CITY OF CHOWCHILLA

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
34 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position/Fund Balances Cash and Cash Equivalents
For purposes of reporting cash flow, the City considers all highly liquid investments with maturity of three months or less when purchased to be cash and cash equivalents.

Cash and Investments
The City maintains a cash and investment pool that is available for all funds. Each fund-type balance in the pool is reflected on the combined balance sheet as cash and investments. The City apportions interest earnings to all funds based on their quarterly cash balances.

The City pools cash and investments with the City Treasurer except for investments managed by fiscal agents under bonded debt agreements. Interest from bank accounts and investments are allocated quarterly to the various funds based on the fund’s contribution to the pool. The City has stated investments at fair value in the statement of net position and balance sheet. The fair value of investments is based on published market prices and quotations from major investment brokers.

Cash and investments with fiscal agent represent funds held by various trustees from proceeds of the issuance of bonds in order to establish required reserve funds and to pay bond issuance costs per the respective trust agreements.

Credit Risk – The City’s investment policy limits certain types of investments to various ratings.

Custodial Credit Risk—Deposits – Custodial credit risk is the risk that in the event of a bank failure, the City’s deposits may not be returned to it. The City has a deposit policy for custodial risk that requires collateralization on certificates of deposit and repurchase (and reverse) agreements. In addition, the City maintains custodial agreements with certain independent third parties.

Concentration of Credit Risk – The City places no limit on the amount the City may invest in any one issuer.

Interest Rate Risk – Reserve funds may be invested in securities exceeding 10 years if the maturity of such investments is made to coincide as nearly as practicable with the expected use of the funds.

Restricted Assets
Certain proceeds of the general obligation debt and enterprise debt are classified as restricted assets on the balance sheet because their use is limited by applicable debt covenants. “Restricted cash and investments with fiscal agents” is used to report resources set aside for potential deficiencies in the repayment ability of the debt service fund and for payment of construction projects undertaken by the City.

Land Held for Resale
Land held for resale is recorded in the Low and Moderate Housing Asset Special Revenue Fund. Land held for resale is valued at the lower cost or estimated net realizable value.

CITY OF CHOWCHILLA

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
35 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position/Fund Balances (Continued) Internal Balances
Interfund transactions are reflected as loans, services provided or used, or reimbursements or transfers. Loans reported as receivables and payables, as appropriate, are subject to elimination upon consolidation and are referred to as either “due to/from other funds” (i.e., the current portion of interfund loans) or “advances to/from other funds” (i.e., the noncurrent portion of interfund loans). Any residual balances outstanding between the governmental activities and the business-type activities are reported in the fund financial statements and are offset by a fund balance reserve account in applicable governmental funds to indicate that they are not available for appropriation and are not available financial resources.

Services provided or used, deemed to be at market or near market rates, are treated as revenues and expenditures or expenses. Reimbursements occur when one fund incurs a cost, charges the appropriate benefiting fund, and reduces its related cost as a reimbursement. All other interfund transactions are treated as transfers. Transfers between governmental or proprietary funds are netted as part of the reconciliation to the government-wide presentation.

Notes Receivable
The City engages in programs designed to encourage construction or improvement of housing for persons with low to moderate income and to encourage business development. Under these programs, grants or loans are provided under favorable terms to homeowners or developers who agree to spend these funds in accordance with the City’s terms. For financial statement purposes, the City has established an estimated allowance for potentially uncollectible loans. The balance of notes receivable includes loans that may be forgiven if certain terms and conditions of the loans are met.

Leases
Lessee: The City is a lessee for a noncancellable lease of a building. The lessee recognizes a lease liability and an intangible right-to-use lease asset (lease asset) in the government-wide financial statements. The City recognizes lease liabilities with an initial, individual value of $5,000 or more. At the commencement of a lease, the City initially measures the lease liability at the present value of payments expected to be made during the lease term. Subsequently, the lease liability is reduced by the principal portion of lease payments made. The lease asset is initially measured as the initial amount of the lease liability, adjusted for lease payments made at or before the lease commencement date, plus certain initial direct costs. Subsequently, the lease asset is amortized on a straight-line basis over its useful life.

Key estimates and judgments related to leases include how the City determines (1) the discount rate it uses to discount the expected lease payments to present value, (2) lease term, and (3) lease payments.  The City uses the interest rate charged by the lessor as the discount rate. When the interest rate charged by the lessor is not provided, the City generally uses its estimated incremental borrowing rate as the discount rate for leases, which it has determined is the prime rate at the inception of the lease.  The lease term includes the noncancellable period of the lease. Lease payments included in the measurement of the lease liability are composed of fixed payments.

The City monitors changes in circumstances that would require a remeasurement of its lease and will remeasure the lease asset and liability if certain changes occur that are expected to significantly affect the amount of the lease liability. Lease assets are reported with other capital assets and lease liabilities are reported with long- term debt on the statement of net position.

CITY OF CHOWCHILLA

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
36 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position/Fund Balances (Continued) Leases (Continued)
Lessor: The City recognizes a lease receivable and a deferred inflow of resources in the government-wide and governmental and enterprise fund financial statements.

At the commencement of a lease, the City initially measures the lease receivable at the present value of payments expected to be received during the lease term. Subsequently, the lease receivable is reduced by the principal portion of lease payments received. The deferred inflow of resources is initially measured as the initial amount of the lease receivable, adjusted for lease payments received at or before the lease commencement date. Subsequently, the deferred inflow of resources is recognized as revenue over the life of the lease term.

Key estimates and judgments include how the City determines (1) the discount rate it uses to discount the expected lease receipts to present value, (2) lease term, and (3) lease receipts.  The City uses the interest rate charged to the lessees as the discount rate. When the interest rate charged to the lessees is not provided, the City generally uses the implied rate of return as the discount rate for leases. When the implied rate of return has not been determined, the City uses its estimated incremental borrowing rate which it has determined is the prime rate at the inception of the lease.  The lease term includes the non-cancellable period of the lease. Lease receipts included in the measurement of the lease receivable are composed of fixed payments from the lessee.

The City monitors changes in circumstances that would require a remeasurement of its lease, and will remeasure the lease receivable and deferred inflows of resources if certain changes occur that are expected to significantly affect the amount of the lease receivable.

Capital Assets
Capital assets, which include public domain (infrastructure) capital assets consisting of certain improvements, including streets (pavements, medians, curbs/gutters, sidewalks, traffic signals, monument signs and bridges), storm drains and water/sewer systems and improvements, are reported in the applicable governmental or business-type activities column in the government-wide financial statements.

Generally, capital asset acquisitions in excess of $5,000 (general capital assets) and $30,000 (infrastructure) are capitalized if they have an expected useful life of one year or more. Acquisitions of capital assets (including infrastructure) are recorded at historical cost at the time of purchase. Donated capital assets are recorded at their fair value at the date of donation.

Land and construction in progress are not depreciated. The other property, plant, equipment, and infrastructure of the City are depreciated using the straight-line method over the following estimated useful lives:

Land Improvements 20-50 years
Buildings and Improvements 20-50 years
Machinery, Equipment, and Vehicles 6-10 years
Infrastructure 20-100 years

CITY OF CHOWCHILLA

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
37 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position/Fund Balances (Continued) Compensated Absences
It is the City’s policy to permit employees to accumulate a limited amount of earned but unused leave time.

Permanent employees earn from 12 to 30 vacation days per year depending upon their length of employment.

Accumulated vacation days can be carried forward up to 2 years. Each year, by September 30, certain employees may request to receive a cash payment for the value of all or a portion of their accumulated vacation leave. Upon termination or retirement, employees are compensated for the value of accrued vacation leave.

For full-time employees, sick leave is accumulated at the rate of 12 days per year up to a maximum of 250 days.

Employees may convert 25% of unused sick leave to vacation time during a fiscal year up to the limit of the employee’s maximum vacation accrual level. Upon retirement, employees may also convert a portion of their unused sick leave into service credit through the California Public Employees Retirement System.

The vacation and sick leave balances, along with compensatory leave and holiday hours are reflected in the Employee Benefits Fund, which is part of the Internal Service Funds in the Statement of Net Position.

Long-term Obligations
In the government-wide financial statements and proprietary fund types in the fund financial statements, longterm debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the straight-line method. Bonds payable are reported net of the applicable bond premium or discounts. Bond issuance costs are expensed immediately.

In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether withheld from the actual debt proceeds received, are reported as debt service expenditures.

Pensions
In government-wide financial statements, pensions are recognized and disclosed using the accrual basis of accounting (see Note 10 and the RSI section immediately following the notes to financial statements), regardless of the amount recognized as pension expenditures on the modified accrual basis of accounting. The City recognizes a net pension liability for the qualified pension plan in which it participates, which represents the excess of the total pension liability over the fiduciary net position of the qualified pension plan, measured as the City’s proportionate share thereof in the case of a cost-sharing multiple-employer plan. Changes in the net pension liability during the period are recorded as pension expense, or as deferred inflows of resources or deferred outflows of resources depending on the nature of the change, in the period incurred. Those changes in net pension liability that are recorded as deferred inflows of resources or deferred outflows of resources that arise from changes in actuarial assumptions or other inputs and differences between expected or actual experience are amortized over the weighted average remaining service life of all participants including retirees, in the respective qualified pension plan and recorded as a component of pension expense beginning with the period in which they arose. Projected earnings on qualified pension plan investments are recognized as a component of pension expense. Differences between projected and actual investment earnings are reported as deferred inflows of resources or deferred outflows of resources and amortized as a component of pension expense on a closed basis over a five-year period beginning with the period in which the difference occurred.

CITY OF CHOWCHILLA

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
38 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position/Fund Balances (Continued) Interest Payable
In the government-wide financial statements, interest payable on long-term debt is recognized as a liability when incurred and is not recognized in the governmental funds’ financial statements.

Unearned Revenue
Unearned revenue is that for which asset recognition criteria have been met, but for which revenue recognition criteria have not been met. The City typically records intergovernmental revenues (primary grants and subventions) received but not earned (qualifying expenditures not yet incurred).

Unavailable Revenue
In the governmental fund financial statements, unavailable revenue is recorded when transactions have not yet met the revenue recognition criteria based on the modified accrual basis of accounting. The City records unavailable revenue for transactions for which revenues have been earned, but for which funds are not available to meet current financial obligations.

Transfers
In the fund financial statements interfund transfers are recorded as transfers in (out) except for transactions that are described below:

Charges for services are recorded as revenues of the performing fund and expenditures of the requesting fund. Unbilled costs are recognized as an asset of the performing fund at the end of the fiscal year.

Reimbursements for expenditures, initially made by one fund that is properly applicable to another fund, are recorded as expenditures in the fund that is reimbursed.

Net Position
The government-wide and enterprise fund financial statements utilize a net position presentation. Net position is reported as net investment in capital assets, restricted or unrestricted.

Net investment in capital assets – groups all capital assets, including infrastructure, into one component of net position. Accumulated depreciation and the outstanding balances of debt that are attributable to the acquisition, construction, or improvement of these assets reduce the net position balance.

Restricted – represents external restrictions imposed by creditors, grantors, contributors, or laws of regulations of other governments and restrictions imposed by law through constitutional provisions or enable legislation.

Unrestricted – represents net position of the City, not restricted for any project or other purpose.

When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources as they are needed.

CITY OF CHOWCHILLA

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
39 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position/Fund Balances (Continued) Fund Balances
The governmental fund financial statements present fund balances based on classifications the comprise a hierarchy that is based primarily on the extent to which the City is bound to honor constraints on the specific purposes for which amounts in the respective governmental funds can be spent. The classification used in governmental fund financial statements are as follows.

Nonspendable Fund Balance – Amounts cannot be spent either because they are in nonspendable form (such as inventory or prepaid expenses, and long-term loans and notes receivable) or because they are legally or contractually required to be maintained intact (such as principal of a permanent fund).

Restricted Fund Balance – Amounts with external constraints placed on the use of these resources (such as debt covenants, grantors, contributors, or laws or regulations of other governments, etc.) or imposed by law through constitutional provisions or enabling legislation.

Committed Fund Balance – Amounts that can only be used for specific purposes pursuant to constraints imposed by City Council, the City’s highest level of decision-making authority, through an ordinance or resolution. These committed amounts cannot be used for any other purpose unless the City Council removes or changes the specified uses through the same type of formal action taken to establish the commitment.

Assigned Fund Balance – Amounts that do not meet the criteria to be classified as restricted or committed but that are intended to be used for specific purposes. Intent is expressed by the City Council or its designee and may be changed at the discretion of the City Council or its designee. For all governmental funds other than the General Fund, any remaining positive amounts not classified as nonspendable, restricted or committed must be designated as assigned fund balance.

Unassigned Fund Balance – These are either residual positive net resources of the General Fund in excess of what can properly be classified in one of the other four categories, or negative balances in all other funds.

In circumstances when expenditures are made for a purpose for which amounts are available in multiple fund balance classifications, fund balance is generally depleted in the order of restricted, committed, assigned, and unassigned.

Minimum Fund Balance Policy
The City’s minimum fund balance policy requires the City to maintain reserves equal to 2 months (17%) and 3 months (25%) of costs based on the annual adopted budget for Enterprise Funds and the General Fund, respectively. The use of these funds shall be allowed in situations resulting from the loss of revenues and must be replenished before the end of the following fiscal year.

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 CSJVRMA is such that CSJVRMA is not a component unit of the City for financial reporting purposes.

Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Actual results could differ from those estimates.

CITY OF CHOWCHILLA

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
40 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position/Fund Balances (Continued) Property Tax Calendar
Madera County is responsible for assessing, collecting and distributing property taxes in accordance with enabling legislation. Revenue received is based on an allocations factor calculated by the County under the provisions of Proposition 13 plus a percentage of the increase in market value in specific areas. The City’s property tax is liened based on the assessed value listed as of the prior January 1 for all real and personal property located in the City. Property sold and the assessment date (January 1) is reassessed and the amount of property tax assessed is prorated.

Secured property taxes are levied on October 1 and are due in two installments on November 1 and February 1.

The tax becomes delinquent after December 10 and April 10, respectively. Unsecured property tax is levied on July 1, due on July 31, and becomes delinquent after August 31.

NOTE 2 – CASH AND INVESTMENTS
Cash and investments as of June 30, 2022 are classified in the accompanying financial statements as follows:

Statement of Net Position:

Cash and investments 31,688,644 $
Restricted cash and investments with fiscal agents 957,100 Statement of Fiduciary Net Position:

Cash and investments 2,034,606
Restricted cash with fiscal agents 760,446
Total cash and investments 35,440,796 $
Cash and investments as of June 30, 2022 consist of the following:

Cash on hand $ 2,000
Deposits with financial institutions 7,611,397
Investments 27,827,399
Total cash and investments 35,440,796 $

CITY OF CHOWCHILLA

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
41 NOTE 2 – CASH AND INVESTMENTS (Continued)
Deposits
The carrying amount of the City’s cash deposits was $7,611,398 at June 30, 2022. Bank balances were $7,838,634, the total amount of which was insured and/or collateralized with securities held by the pledging financial institutions in the City’s name as described below.

The California Government Code requires California banks and savings and loan associations to secure the City’s cash deposits by pledging securities as collateral. This code states that collateral pledged in this manner shall have the effect of perfecting a security interest in such collateral superior to those of a general creditor.

Thus, collateral for cash deposits is considered to be held in the City’s name.

The market value of pledged securities must equal at least 110% of the City’s cash deposits. California law also allows institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the City’s total cash deposits.

The City follows the practice of pooling cash and investments of all funds, except for funds required to be held by fiscal agents under the provisions of bond indentures. Interest income earned on pooled cash and investments is allocated on an accounting period basis to the various funds based on the period-end cash and investment balances. Interest income from cash and investments of fiscal agents is credited directly to the related fund.

Investments Authorized by the California Government Code and the City’s Investment Policy In accordance with Section 53601 of the California Government Code and the City’s investment policy, the City is authorized to invest in Certificates of Deposit, the California Local Agency Investment Fund (LAIF), U.S.

Treasury Obligations, U.S. Government Agencies, Medium-Term Notes, Bankers’ Acceptances, and Commercial Paper of “prime” quality of the highest ranking or of the highest letter and numerical rating as provided by Moody’s Investor Services, Inc. or Standards and Poor’s Corporation. In accordance with the City’s investment policy, the City will not invest in repurchase agreements, reverse repurchase agreements, or any other type of investments prohibited by California Government Code Section 53601.

Disclosure Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates.

Information about the sensitivity of the fair values of the City’s investments to market interest rate fluctuations is provided by the following table that shows the maturity date of each investment:

Investment Type Total
12 Months or
Less
State investment pool 26,109,853 $ 26,109,853 $
Held by fiscal agent:

Treasury Obligation Funds 1,209,192 1,209,192
Money Market Funds 508,354 508,354
Total $ 27,827,399 27,827,399 $

CITY OF CHOWCHILLA

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
42 NOTE 2 – CASH AND INVESTMENTS (Continued)
Disclosure Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the actual rating as of year-end for each investment type:

Investment Type Total AAAm Not Rated
State investment pool 26,109,853 $ - $ 26,109,853 $
Held by fiscal agent:

Treasury Obligation Funds 1,209,192 1,209,192 -
Money Market Funds - 508,354 508,354
Total $ 1,209,192 27,827,399 $ 26,618,207 $
Ratings as of Year-End
Concentration of Credit Risk
The investment policy of the City contains no limitation on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. The City did not have investments in any one issuer (other than U.S. Treasury securities, mutual funds, and external investment pools) that represent 5% or more of total City’s investments for the year ended June 30, 2022.

CITY OF CHOWCHILLA

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
43 NOTE 2 – CASH AND INVESTMENTS (Continued)
Investment Valuation
Investments, including derivative instruments that are not hedging derivatives, are measured at fair value on a recurring basis. Recurring fair value measurements are those that Governmental Accounting Standards Board (GASB) Statements require or permit in the statement of net position at the end of each reporting period. Fair value measurements are categorized based on the valuation inputs used to measure an asset’s fair value:

Level 1 investments reflect prices quoted in active markets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. Investments’ fair value measurements are as follows at June 30, 2022:

Fair Value
Investments Fair Value Level 1 Inputs
Debt securities:

Treasury Obligation Fund 1,209,192 $ 1,209,192 $
Investments not subject to fair value
heirarchy:

Money Market Funds 508,354 $
State Investment Pool 26,109,853
Total 26,618,207 $
Measurements
Treasury obligations are valued at marked to market based on quoted market closing prices.

Investment in State Investment Pool
The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The fair value of the City’s investment in this pool is reported in the accompanying financial statements at amount based upon the City’s pro-rata share of the amortized cost provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of the portfolio). The balance available for withdrawal is based in the accounting records maintained by LAIF, which are recorded on an amortized cost basis. Although the City did not participate in any securities lending transactions or enter into any reverse repurchase agreements during the year, the City does have an investment in LAIF in the amount of $26,109,853. The Local Investment Advisory Board (Board) has oversight responsibility for LAIF. The Board consists of five members designated by State statute. The value of the pool shares in LAIF, which may be withdrawn, is determined on an amortized cost basis, which is different from the fair value of the City’s position in the pool.

CITY OF CHOWCHILLA

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
44 NOTE 3 – RECEIVABLES
Receivables as of the June 30, 2022 year-end for the City’s individual major funds and nonmajor funds, including applicable allowances for uncollectible accounts, are as follows:

Governmental Activities
CDBG
Grants Measure N Other Total
Special Special Capital Governmental Governmental
General Revenue Revenue Projects Funds Funds
Receivables:

Accounts receivable 527,270 $ 7,315 $ - $ - $ 7,245 $ 541,830 $ Intergovernmental receivables 2,837,070 268,126 487,107 67,126 1,043,101 4,702,530 Notes receivable - 22,011,803 - - 1,525,396 23,537,199
Less: allowance for
for uncollectibles - - - - - -
Net receivables 3,364,340 $ 22,287,244 $ 487,107 $ 67,126 $ 2,575,742 $ 28,781,559 $ Business-Type Activities - Enterprise Funds
Nonmajor
Solid Storm
Water Waste Sewer Drain Airport Total
Receivables:

Accounts receivable 355,814 $ 303,849 $ 272,679 $ 33,981 $ - $ 966,323 $ Intergovernmental receivables - - 30,907 - 12,877 43,784 Less: allowance for
for uncollectibles (18,847) (7,072) (9,035) (1,526) - (36,480) Net receivables 336,967 $ 296,777 $ 294,551 $ 32,455 $ 12,877 $ 973,627 $ Receivables are presented on the Statement of Net Position as follows:

Governmental Business-Type
Activities Activities Total
Accounts receivable, net 541,830 $ 929,843 $ 1,471,673 $ Intergovernmental receivables 4,702,530 43,784 4,746,314 Notes receivable, net 23,537,199 - 23,537,199
Total 28,781,559 $ 973,627 $ 29,755,186 $
Receivables in governmental funds which are not expected to be collected in one year are as follows:

Notes receivable in CDBG Grants Special Revenue Fund 22,011,803 $ Notes receivable in Home Investment Program Grants Special Revenue Fund 1,447,962 Notes receivable in Low and Moderate Income Housing Asset Special Revenue Fund 77,434 Total $ 23,537,199

CITY OF CHOWCHILLA

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
45 NOTE 4 – INTERNAL BALANCES
Due from and due to balances at June 30, 2022 are as follows:

Due From Due To
Governmental Funds:

Major Funds:

General Fund $ - 659,213 $
Capital Projects Fund 66,429 -
Nonmajor Funds:

SAFER Fire Grant Fund 14,344
Transit System Special Revenue Fund 467,079 -
Low and Moderate Low Income Housing Asset Fund 45,559 - Fiduciary Funds:

Successor Agency Private Purpose Trust Fund 65,802 -
Total $ 659,213 659,213 $
The “due from” balance of $659,214 in the General Fund listed above represents loans made to other funds to cover operating cash deficit balances.

Advances to and from balances at June 30, 2022 are as follows:

Advances To Advances From
Governmental Funds:

Major Funds:

General Fund $ - 477,910 $
Impact Fees Special Revenue Fund 477,910 -
Total $ 477,910 477,910 $
The balance of $477,910 for advances from other funds in the Impact Fees Special Revenue Fund consists of cash advances from the General Fund and will be paid back with future impact fees. The City has indicated that there are no plans to collect on the advance within the next year.

CITY OF CHOWCHILLA

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
46 NOTE 5 – TRANSFERS
Transfers for the year ended June 30, 2022, are summarized as follows:

Transfers In Transfers Out
Governmental Funds:

Major Funds:

General Fund 987,987 $ 1,330,651 $ (1)
CDBG Grants Special Revenue Fund 39,511 4,901 (7)
Impact Fees Special Revenue Fund 15,750 44,167 (2)
Measure N Special Revenue Fund 958,838 (10)
Debt Service Fund 1,310,712 -
Capital Projects Fund 9,091 518 (6)
Nonmajor Funds:

State Gas Tax Special Revenue Fund - 366,958 (3)
SB1 Special Revenue Fund 14,502 39,772 (9)
Street and Road Fund (LTF) Special Revenue Fund 734,025 - SAFER Fire Grant Fund 20 -
Measure T Special Revenue Fund - 386,107 (5)
Transit System Special Revenue Fund 5,250 -
HOME Investment Partnership Program
Special Revenue Fund - 3,973 (7)
EDBG Grant Special Revenue Fund 39,511 3,973 (4)
Enterprise Funds:

Major Funds:

Water Enterprise Fund 11,461 5,001 (8)
Sewer Enterprise Fund 5,000 7,393 (8)
Nonmajor Funds:

Storm Drain Enterprise Fund - 40,297
Airport Enterprise Fund - 175
Internal Service Funds: - 5,250
Total $ 3,185,397 3,185,397 $
The significant transfers out noted above were for the following purposes:
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
Transfers of $913,919 to the General Fund for eligible police and fire public safety costs. Also transferred $44,919 to debt service funds for eligible debt payments.
$518 was transferred to close a project fund within the Streets and Road (LTF) Fund.

These funds were transferred to cover costs associated with grant management in the EBDG Special Revenue Fund to cover contracted costs that no administrative program is eligible for.

Approximately $5,000 was transferred from both Water and Sewer Fund to General Fund to cover plotter costs.

Transfers of $39,772 to the Storm Drain fund to cover eligible costs for the Humboldt Storm Drain project.

General Fund transfer out of $14,502 to the SB1 Fund for projects as required by the State, $1,264,643 to Debt Service Funds for debt service payments out of various debt service funds, remaining transfers to various funds for operating costs including essential worker pay. $44,167 was transferred to cover Fire Department Expansion Costs within the General Fund.

Gas Tax transferred $31,753 for Street Striping projects and $311,114 for General Street Maintenance to the Streets and Roads (LTF) Fund. $8,840 was transferred to cover costs associated with the Riverside Pedestrian Project within the Capital Projects Fund. $15,000 was transferred to cover the Police Department Fencing Project within the General Fund.

Transferred $39,772 for the Humboldt Storm Drain Project in the CDBG Grants Special Revenue Fund.

Transferred to the Streets and Roads (LTF) Fund to cover street related costs of $232,105. Also transferred $91,779 to cover Avenue 16 Paving construction costs and $62,223 were transferred to cover Street Maintenance Costs.

CITY OF CHOWCHILLA

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
47 NOTE 6 – CAPITAL ASSETS
Capital assets activity of the governmental activities for the year ended June 30, 2022, was as follows:

Balance
July 1, 2021
(Restated) Additions Reductions
Balance
June 30, 2022
Capital assets, not being depreciated:

Land 721,926 $ - $ - $ 721,926 $
Construction in progress 464,428 2,573,901 - 3,038,329
Total capital assets, not being depreciated 1,186,354 2,573,901 - 3,760,255 Capital assets, being depreciated/amortized:

Land improvements 1,569,968 - - 1,569,968
Buildings and improvements 7,677,380 - - 7,677,380
Right-to-use leased buildings and improvements 173,689 - - 173,689 Machinery, equipment and vehicles 5,291,675 470,526 - 5,762,201 Infrastructure 20,257,293 504,579 - 20,761,872
Total capital assets, being depreciated/amortized 34,970,005 975,105 - 35,945,110 Less accumulated depreciation/amortization for:

Land improvements (1,090,781) (74,645) - (1,165,426)
Buildings and improvements (3,086,405) (204,911) - (3,291,316) Right-to-use leased buildings and improvements (134,730) (9,740) - (144,470) Machinery, equipment and vehicles (2,704,673) (487,103) - (3,191,776) Infrastructure (9,153,532) (572,765) - (9,726,297)
Total accumulated depreciation/amortization (16,170,121) (1,349,164) - (17,519,285) Total capital assets being depreciated/amortized, net 18,799,884 (374,059) - 18,425,825 Governmental activities capital assets, net 19,986,238 $ 2,199,842 $ - $ 22,186,080 $ Depreciation expense was charged to the following functions/programs of the governmental activities of the primary government as follows:

Governmental Activities:

General government $ 324,923
Public safety 284,227
Highways and streets 626,228
Culture and recreation 81,684
32,102
Total depreciation/amortization expense - governmental activities 1,349,164 $ Capital assets held by government's internal service funds are charged to the various functions based on their usage of the assets

CITY OF CHOWCHILLA

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
48 NOTE 6 – CAPITAL ASSETS (Continued)
Capital assets activity of the business-type activities ended June 30, 2022 was as follows:

Balance
July 1, 2021 Additions Reductions
Balance
June 30, 2022
Capital assets, not being depreciated:

Land $ - 2,030,152 $ - $ 2,030,152 $
Construction in progress 43,926 2,888,780 (2,661,903) 270,803 Total capital assets, not being depreciated 4,918,932 43,926 (2,661,903) 2,300,955 Capital assets, being depreciated:

Land improvements - 1,253,762 - 1,253,762
Buildings and improvements - 3,989,173 - 3,989,173
Machinery, equipment, and vehicles 279,717 1,351,545 (20,593) 1,610,669 Infrastructure 2,548,978 24,265,050 - 26,814,028
Total capital assets, being depreciated 2,828,695 30,859,530 (20,593) 33,667,632 Less accumulated depreciation for:

Land improvements (37,271) (836,057) - (873,328)
Buildings and improvements (78,987) (1,735,302) - (1,814,289) Machinery, equipment, and vehicles (147,222) (493,673) 20,593 (620,302) Infrastructure (591,773) (8,067,957) - (8,659,730)
Total accumulated depreciation (11,132,989) (855,253) 20,593 (11,967,649) Total capital assets being depreciated, net 1,973,442 19,726,541 - 21,699,983 Business-type activities capital assets, net $ 2,017,368 24,645,473 $ (2,661,903) $ 24,000,938 $ Depreciation expense was charged to the following functions/programs of the governmental activities and business-type activities of the primary government as follows:

Business-Type Activities:

Water 501,035 $
Sewer 324,855
Storm drain 14,680
Airport 14,683
Total depreciation expense - business-type activities 855,253 $

CITY OF CHOWCHILLA

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
49 NOTE 7 – LONG-TERM DEBT
The following is a summary of debt transactions of the City for the year ended June 30, 2022:

Amounts
June 30, June 30, Due Within
2021 Additions Reductions 2022 One Year
Governmental Activities:

Direct Placements
2016 Civic Center Bond 193,000 $ - $ (193,000) $ - $ - $ Total Direct Placements - 193,000 (193,000) - -
2005 Civic Center Bond 3,565,000 - - 3,565,000 -
2017 Series Lease Revenue Bonds 3,615,000 - (20,000) 3,595,000 20,000 State of California NSP Loan 9,913,215 - - 9,913,215 -
2019 Taxable Pension Obligation Bonds 10,155,000 - (425,000) 9,730,000 495,000 Add: Premiums 149,755 - (5,990) 143,765 -
Less: Discounts (114,697) - 6,456 (108,241) -
Compensated absences 426,744 345,782 (300,909) 471,617 322,588 Total Governmental Activities Long-Term Debt $ 345,782 27,903,017 $ (938,443) $ 27,310,356 $ 837,588 $ Business-Type Activities:

Direct Placements and Direct Borrowings
2001 Water Certificates of Participation 70,000 $ - $ (70,000) $ - $ - $ State Water Revolving Loan 2,725,092 - (160,300) 2,564,792 160,300 Total Direct Placements and Borrowings - 2,795,092 (230,300) 2,564,792 160,300 2017 Series Water Bonds 8,125,000 - (30,000) 8,095,000 35,000 2017 Series Wastewater Bonds 3,115,000 - (35,000) 3,080,000 35,000 Add: Premiums 524,755 - (24,253) 500,502 -
Total Business-Type Activities Long-Term Debt $ - 14,559,847 $ (319,553) $ 14,240,294 $ 230,300 $ Long-term debt payable at June 30, 2022 is comprised of the following individual issues:
2005 Civic Center Bond
In 2005, the City issued Revenue Bonds in the aggregate principal amount of $5,890,000 to refund the 2002 $1,900,000 Civic Center Project Private Placement Financing and to finance certain public improvements. The original amount of the note ($5,890,000) was secured by revenues of the Public Financing Authority consisting primarily of lease payments to be received by the Authority from the City under a lease agreement dated July 1, 2005, by and between the Authority and the City which are payable from the City’s general fund for lease by the City of certain real property and public facilities located in the City and then constituting the Civic Center Project.

There is a provision whereby if the City is unable to make payment or does not comply with bond covenants the Trustee may, and shall at the written direction of the Owners of not less than a majority in aggregate principal amount of Bonds at that time outstanding, declare the principal of all bonds outstanding and the accrued interest thereon to be due and payable immediately. Semiannual payments range from $7,875 to $357,875 and are payable each January 1 and July 1 through 2036. During the year ended June 30, 2017 the 2005 Civic Center Bond was partially refunded by the 2016 Civic Center Bond for the purposes of savings on future debt service payments.

CITY OF CHOWCHILLA

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
50 NOTE 7 – LONG-TERM DEBT (Continued)
2005 Civic Center Bond (Continued)
Annual debt service requirements to maturity of the 2005 Civic Center Bond are as follows:

Fiscal Year
Ending June 30 Principal Interest
2023 - $ 158,331 $
2024 - 158,331
2025 210,000 153,738
2026 220,000 144,331
2027 230,000 134,488
2028-2032 1,295,000 510,278
2033-2036 1,610,000 187,200
Total $ 1,446,697 3,565,000 $
2016 Refunding of 2005 Civic Center Bond
In 2016, the City issued Revenue Bonds in the aggregate principal amount of $1,120,000 to partially refund the 2005 Civic Center Bond. This was done to take advantage of lower interest rates and to save on future debt service payments. As a result, the 2005 Civic Center Bond is considered partially defeased and the liability for that bond is included in the statement of net position. The total debt service payments were reduced by $49,165. Semiannual payments range from $1,978 to $194,978 and are payable each January 1 and July 1 through 2022. There is a provision whereby if the City is unable to make payment or does not comply with bond covenants, the Trustee may declare the principal of all bonds outstanding and the accrued interest thereon to be due and payable immediately. The bond was considered fully repaid during the year-ended June 30, 2022. 2017 Series Lease Revenue Bonds
In 2018, the Chowchilla Public Financing Authority issued Revenue Bonds in the aggregate principal amount of $3,630,000 to finance the costs of clean renewable energy projects and other capital improvements. The original amount of the bonds ($3,630,000) were secured by a pledge of and lien on revenues consisting primarily of lease payments from the City. There is a provision whereby if the City is unable to make payment or does not comply with bond covenants, the Trustee may, and shall at the written direction of the Owners of not less than a majority in aggregate principal amount of Bonds at that time outstanding, declare the principal of all bonds outstanding and the accrued interest thereon to be due and payable immediately. Principal is payable annually on June 1 in amounts ranging from $10,000 to $375,000, with interest due semi-annually at variable rates between 2.6% - 5.0%, maturing on June 1, 2047.

CITY OF CHOWCHILLA

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
51 NOTE 7 – LONG-TERM DEBT (Continued)
2017 Series Lease Revenue Bonds (Continued)
Annual debt service requirements to maturity of the 2017 Series Lease Revenue Bonds are as follows:

Fiscal Year
Ending June 30 Principal Interest
2023 20,000 $ 157,318 $
2024 25,000 156,724
2025 25,000 155,929
2026 - 155,117
2027 30,000 155,117
2028-2032 255,000 753,421
2033-2037 560,000 686,477
2038-2042 1,105,000 528,455
2043-2047 212,174 1,575,000
Total $ 2,960,732 3,595,000 $
2019 Pension Obligation Bonds
In 2019, the Chowchilla Public Financing Authority issued Pension Obligation Bonds in the aggregate principal amount of $10,500,000 to finance a portion of the City’s unfunded accrued actuarial liability to the California Public Employees’ Retirement System (CalPERS) for the benefit of the City’s employees and pay the costs of issuance of the bonds. The bonds are unsecured obligations payable from any source of legally available funds of the City, including, but not limited to, amounts held by the City on deposit in its General Fund. Principal is payable annually on July 15 in amounts ranging from $10,000 to $640,000, with interest due semi-annually at variable rates between

2.94% - 4.75%, maturing on July 15, 2046. There is a provision whereby if the City is unable to make payment, does not comply with bond covenants, or files for reorganization or arrangement, the trustee may declare the entire unpaid principal and interest immediately due and payable.

Annual debt service requirements to maturity of the 2019 Pension Obligation Bonds are as follows:

Fiscal Year
Ending June 30 Principal Interest
2023 495,000 $ 381,901 $
2024 530,000 365,675
2025 575,000 347,707
2026 620,000 327,555
2027 470,000 308,571
2028-2032 2,865,000 1,238,990
2033-2037 2,665,000 633,656
2038-2042 1,050,000 230,375
2043-2047 32,300 460,000
Total $ 3,866,730 9,730,000 $

CITY OF CHOWCHILLA

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
52 NOTE 7 – LONG-TERM DEBT (Continued)
State of California Neighborhood Stabilization Program (NSP) Loan In fiscal year 2010-11, the City entered into a loan agreement with the Department of Housing and Community Development (DHCD). The City could borrow up to $10,000,000 to assist Olivero Ranch, LLC, in financing construction of 31 multi-family units, of which 30 units will be restricted to households at or below 50% of all AMI households in the City. The entire outstanding principal balance plus all accrued but unpaid interest is due in full on the 55th anniversary of the date of the Project’s receipt of certificates of occupancy. There is no interest due on the loan; however, any program income resulting from the financing provided to Olivero Ranch, LLC will be returned to the DHCD. The loan will be secured on the property on which the Project is located. All loan payments will be generated by the operation of the housing development by the private developer which will pass through the City and back to the State.
2001 Water Certificate of Participation
Certificates of Participation (2000 Water System Improvement Project) in the amount of $1,114,558 were issued on August 30, 2001, for the purpose of financing the acquisition and construction of certain modifications, improvements and additions to the City’s water treatment storage and distribution facilities systems. Loan proceeds are utilized for the construction period only and are repaid with a United States Department of Agriculture Rural Development (USDA-RD) Bond Anticipation Note when the project is complete. The amount of the note is secured by the pledge of user fees collected by the Water Enterprise Fund. Principal is payable annually on August 1 in amounts from $50,000 to $70,000, with interest due semi-annually at 4.375% and matures on August 1, 2021. There is a provision whereby if the City is unable to make payment, does not comply with covenants, or files for reorganization or rearrangement, the trustee may declare the entire unpaid principal and interest immediately due and payable. The debt was considered fully paid during the fiscal year ended June 30, 2022.
2017 Series Water Revenue Bonds
In 2017, the Chowchilla Public Financing Authority issued Revenue Bonds in the aggregate principal amount of $8,160,000 to finance capital projects in the Water Fund. The original amount of the bonds ($8,160,000) were secured by installment payments to be made by the City of Chowchilla under an installment sale agreement.

There is a provision whereby if the City is unable to make payment or does not comply with bond covenants, the Trustee may, and shall at the written direction of the Owners of not less than a majority in aggregate principal amount of Bonds at that time outstanding, declare the principal of all bonds outstanding and the accrued interest thereon to be due and payable immediately. These installment payments are secured by a pledge of and lien on the net revenues of the Water Fund. Principal is payable annually on June 1 in amounts from $10,000 to $775,000, with interest due semi-annually at variable rates between 2.6% - 5.0%, maturing on June 1, 2047.

Annual debt service requirements to maturity of the 2017 Series Water Revenue Bonds are as follows:

Fiscal Year
Ending June 30 Principal Interest
2023 35,000 $ 359,832 $
2024 - 358,737
2025 25,000 358,737
2026 40,000 357,737
2027 65,000 356,137
2028-2032 715,000 1,722,042
2033-2037 1,530,000 1,532,469
2038-2042 2,765,000 1,119,195
2043-2047 346,775 2,920,000
Total $ 6,511,661 8,095,000 $

CITY OF CHOWCHILLA

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
53 NOTE 7 – LONG-TERM DEBT (Continued)
2017 Series Wastewater Revenue Bonds
In 2017, the Chowchilla Public Financing Authority issued Revenue Bonds in the aggregate principal amount of $3,310,000 to finance capital projects in the Sewer fund. The original amount of the bonds ($3,310,000) was secured by installment payments to be made by the City of Chowchilla under an installment sale agreement. There is a provision whereby if the City is unable to make payment or does not comply with bond covenants the Trustee may and shall at the written direction of the Owners of not less than a majority in aggregate principal amount of Bonds at that time outstanding, declare the principal of all bonds outstanding and the accrued interest thereon to be due and payable immediately. These installment payments are secured by a pledge of and lien on the net revenues of the Sewer Fund. Principal is payable annually on June 1 in amounts from $75,000 to $275,000, with interest due semiannually at variable rates between 2.33%-4.58%, maturing on June 1, 2047.

Annual debt service requirements to maturity of the 2017 Series Wastewater Revenue Bonds are as follows:

Fiscal Year
Ending June 30 Principal Interest
2023 35,000 $ 136,531 $
2024 135,131 40,000
2025 133,531 45,000
2026 131,731 50,000
2027 129,731 45,000
2028-2032 616,706 335,000
2033-2037 528,445 530,000
2038-2042 386,376 840,000
2043-2047 168,086 1,160,000
Total $ 2,366,268 3,080,000 $
State Water Revolving Loan
The City entered into a loan agreement in July 2014 with the State Water Resources Control Board for the purpose of undertaking a project which will enable the City to meet safe drinking water standards established pursuant Chapter 4 of Part 12 of Division 104 of the health and safety Code and the California Code of Regulations, Title 22, or to address other health concerns. The City was awarded a loan in the amount of $3,205,991 for the purpose of installing water meters citywide. The loan is to be repaid over a 20-year period at an interest rate of 0%, which does not begin until the project is completed. In the event of a default, the State shall charge interest in the amount of one tenth of one percent (0.1%) of the delinquent amount each day it remains unpaid past the tenth (10th) day after the date payment was due. The City completed the project during 2018 and the first payment was due on January 1, 2019.

CITY OF CHOWCHILLA

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
54 NOTE 7 – LONG-TERM DEBT (Continued)
State Water Revolving Loan (Continued)
Annual debt service requirements to maturity of the State Water Revolving Loan are as follows:

Fiscal Year
Ending June 30 Principal
2023 160,300 $
2024 160,300
2025 160,300
2026 160,300
2027 160,300
2028-2032 801,498
2033-2037 801,498
2038 160,296
Total $ 2,564,792
Special Assessment District Debt
On March 15, 2017, the Chowchilla Public Financing Authority issued $3,138,000 of 2017 Refunding Revenue Bonds (Reassessment District No 2003-1 Greenhills) for the purpose of creating annual debt savings. The total debt service payments were reduced by $140,898. The 2017 direct placement Refunding Bonds are secured by a pledge of and first lien on the revenues to be derived from the Local Agency Bonds (2003 Local Obligations).

The Authority will receive the reserve fund upon final maturity. The City acts as agent for the property owners in collecting assessment installments of principal and interest and forwarding collections to the bond trustee. The City’s liability, in the event of delinquent assessments shall not exceed the balance of the established Reserve Fund. The amount outstanding as of June 30, 2022 is $1,007,000.

On April 30, 2014, the City issued $3,962,800 of 2013-1 Limited Obligation Refunding Bonds (the “2013 Local Obligations”) pursuant to the provisions of the Improvement Bond Act of 1915 to refund the outstanding 2002-1 Local Obligations Improvement Bonds (the “2002-1 Local Obligations”), for the purpose of creating annual debt savings. The direct placement 2013 Local Obligations are fully secured by the unpaid special assessments levied on commitment. The 2013 Local Obligations are not secured by the general taxing power of the City, the State of California, or any political subdivision of the State. The City acts as agent for the property owners in collecting assessment installments of principal and interest and forwarding collections to the bond trustee. The City’s liability in the event of delinquent assessments, shall not exceed the balance of the established Reserve Fund. The amount outstanding as of June 30, 2022 is $2,009,000.

In 2007, the City issued Community Facilities District No. 2006-1 Improvement Area 1 Special Tax Bonds in the aggregate principal amount of $8,615,000 to finance certain capital expenses of the District, to pay costs of issuance of the Bonds, and to fund two years’ capitalized interest on the Bonds. The Bonds are authorized to be issued pursuant to the Mello-Roos Community Facilities Act of 1982, as amended. The Bonds ($8,615,000) are secured under the Trust indenture by a pledge and lien upon Net Taxes levied on parcels within the District and all moneys in the Special Tax Fund. The Bonds were issued for the purpose of financing the acquisition, construction, expansion, improvement, or rehabilitation of facilities to serve the area within the District and its neighboring areas. Semiannual payments range from $13,375 to $560,486 and are payable each March 1 and September 1 through 2037. The amount outstanding as of June 30, 2022 is $6,105,000.

Since the City is not obligated in any manner for special assessment debt, the debt is not recorded in these financial statements.

CITY OF CHOWCHILLA

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
55 NOTE 8 – LEASES
Lease as Lessor
In 2006, the City began leasing one of its office buildings to a third party. The initial lease was for ten years and was subsequently extended with two additional five-year extensions through 2026. The City will receive monthly payments of $7,227, which is adjusted on July 1 by the United States Department of Labor, Bureau of Labor Statistics, Southern California Consumer Price Index, or 5%, whichever is less. The City recognized $63,559 in lease revenue and $15,899 in interest revenue during the current fiscal year related to this lease. As of June 2022, the City’s receivable for lease payments was $173,435. Also, the City has a deferred inflow of resources associated with this lease that will be recognized as revenue over the lease term. As of June 30, 2022, the balance of the deferred inflow of resources was $100,549.

Lease as Lessee
In fiscal year 2008, the City’s Fleet Maintenance Internal Service Fund entered into a lease agreement as lessee for the acquisition and use of a building for operations. Subsequent extensions of the lease agreement have been noted through fiscal year 2025. An initial lease liability was recorded in the amount of $173,689 during fiscal year 2008. As of June 30, 2022, the value of the lease liability was $48,044. The City is required to make monthly principal and interest payments of $1,500. The lease has an effective interest rate of 7.75%. The leased building has an estimated useful life of 17 years. The value of the right-to-use asset at the end of the current fiscal year was $144,470 and had accumulated amortization of $29,219.

The future principal and interest lease payments as of June 30, 2022, are as follows:

Fiscal Year
Ending June 30 Principal Interest
2023 14,795 $ 3,205 $
2024 15,983 2,017
2025 17,266 734
Total $ 5,956 48,044 $
NOTE 9 – DEFERRED OUTFLOWS/INFLOWS OF RESOURCES
In addition to assets, the statement of net position (and when applicable, the balance sheet) will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position or fund balance that applies to future period(s) and thus, will not be recognized as an outflow of resources (expense/expenditures) until then. The City has pension related items that qualify to be reported in deferred outflows of resources. The pension-related deferred outflows of resources are described in detail in Note 10.

In addition to liabilities, the statement of net position (and when applicable, the balance sheet) will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position or fund balance that applies to future period(s) and so, will not be recognized as an inflow of resources (revenue) until that time. The City has two types of items that qualify for reporting in this category, and they are unavailable revenues and pension deferrals.

CITY OF CHOWCHILLA

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
56 NOTE 9 – DEFERRED OUTFLOWS/INFLOWS OF RESOURCES (Continued) Unavailable revenues arise only under a modified accrual basis of accounting and is reported only in the governmental funds balance sheet. Deferred inflows of resources reported in the governmental funds for unavailable revenues are as follows:

General Fund
CDBG
Grants
Special
Revenue
Other
Governmental
Funds Total
Intergovernmental $ - 169,467 $ 755,445 $ 924,912 $
Notes 22,011,803 - 1,525,396 23,537,199
Total $ 22,011,803 169,467 $ 2,280,841 $ 24,462,111 $
The City has pension-related items that qualify to be reported in deferred inflows of resources. The pensionrelated deferred inflows of resources are described in detail in Note 10.

NOTE 10 – DEFINED BENEFIT PENSION PLAN
General Information about the Pension Plans
Plan Description – All qualified permanent and probationary employees are eligible to participate in the Public Agency Cost Sharing Multiple-Employer Plan (Plan) administered by the California Public Employees’ Retirement System (CalPERS). The Plan consists of individual rate plans (benefit tiers) within a safety risk pool (police and fire) and a miscellaneous risk pool (all other). Plan assets may be used to pay benefits for any employer rate plan of the safety and miscellaneous pools. Accordingly, rate plans within the safety or miscellaneous pools are not separate plans under GASB Statement No. 68. Individual employers may sponsor more than one rate plan in the miscellaneous or safety risk pools. The City of Chowchilla (City) sponsors seven rate plans (three miscellaneous and four safety). Benefit provisions under the Plan are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plan regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.

Benefits Provided – CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full-time employment. Members with five years to total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for nonduty disability benefits after 10 years of service. The death benefit is one of the following: The Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost-of-living adjustments for the Plan are applied as specified by the Public Employees’ Retirement law.

CITY OF CHOWCHILLA

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
57 NOTE 10 – DEFINED BENEFIT PENSION PLAN (Continued)
General Information about the Pension Plans (Continued) The rate plan provisions and benefits in effect at June 30, 2022 are summarized as follows:

Miscellaneous
1st Tier
Miscellaneous
2nd Tier
Miscellaneous
PEPRA
Prior to January 1, 2011 thru On or after
Hire date January 1, 2013 December 31, 2012 January 1, 2013 Benefit formula 2.5% @ 55 2% @ 60 2% @ 62
Benefit vesting schedule 5 years service 5 years service 5 years service Benefit payments monthly for life monthly for life monthly for life Retirement age 50 - 55 50 - 63 52 - 67
Monthly benefits, as a % of annual salary 2.0% to 2.5% 1.092% to 2.418% 1.0% to 2.5% Required employee contribution rates 8% 7% 6.75%
Required employer contribution rates 12.200% 8.650% 7.590% Safety
1st Tier
Safety (Police)
2nd Tier
Safety (Police)
PEPRA
Prior to January 1, 2011 thru On or after
Hire Date January 1, 2013 December 31, 2012 January 1, 2013 Benefit formula 3% @ 55 2% @ 55 2% @ 57
Benefit vesting schedule 5 years service 5 years service 5 years service Benefit payments monthly for life monthly for life monthly for life Retirement age 50 - 55 50 - 55 50 - 57
Monthly benefits, as a % of annual salary 2.4% to 3.0% 1.426% to 2.0% 1.426% to 2.0% Required employee contribution rates 9% 7% 10.0%
Required employer contribution rates 21.790% 14.810% 11.130% Beginning in fiscal year 2016, CalPERS collects employer contributions for the Plan as a percentage of payroll for the normal cost portion as noted in the rates above and as a dollar amount for contributions toward the unfunded liability and side fund, if applicable. The dollar amounts are billed on a monthly basis. The City’s contribution for the unfunded liability was $135,898 for the fiscal year ended June 30, 2022.

CITY OF CHOWCHILLA

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
58 NOTE 10 – DEFINED BENEFIT PENSION PLAN (Continued)
General Information about the Pension Plans (Continued) Contributions – Section 20814(c) of the California Public Employees’ Retirement Law (PERL) requires that the employer rates for all public employers are determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through CalPERS’ annual actuarial valuation process. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. Employer contribution rates may change if plan contracts are amended. Payments made by the employer to satisfy contribution requirements that are identified by the pension plan terms as plan member contribution requirements are classified as plan member contributions.

The City’s contributions to the Plan recognized as a part of pension expense for the year ended June 30, 2022 were $648,797.

Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions As of June 30, 2022, the City reported a net pension liability (asset) for its proportionate share of the net pension liability (asset) of the Plan of ($4,281,392).

The City’s net pension liability (asset) for the Plan is measured as the proportionate share of the net pension liability (asset). The net pension liability (asset) of the Plan is measured as of June 30, 2021, and the total pension liability (asset) for the Plan used to calculate the net pension liability (asset) was determined by an actuarial valuation as of June 30, 2020, rolled forward to June 30, 2021, using standard update procedures.

The City’s proportion of the net pension liability (asset) was based on a projection of the City’s long-term share of contributions to the pension plan relative to the projected contributions of all participating employers, actuarially determined. The City’s proportionate share of the net pension liability (asset) for the Plan as of June 30, 2020 and 2021 was as follows:

Proportion - June 30, 2020 0.0119%
Proportion - June 30, 2021 -0.0792%
Change - Increase (Decrease) -0.0911%
For the year ended June 30, 2022, the City recognized pension revenue of $7,892,492. At June 30, 2022, the City reported deferred outflows of resources and inflows of resources related to pensions from the following sources:

Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to the measurement date 678,921 $ - $ Changes of Assumptions - -
Differences between actual and expected experience - 574,869 Net differences between projected and actual earnings on plan investments - 3,289,129
Change in employer's proportion 1,608,374 1,923,858
Differences between the employer's actual contributions and the employer's proportionate share of contributions 1,630,447 2,049,740 Total $ 7,626,164 4,129,174 $

CITY OF CHOWCHILLA

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
59 NOTE 10 – DEFINED BENEFIT PENSION PLAN (Continued)
Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
$678,921 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability (asset) in the year ended June 30, 2023. Other amounts reported as deferred outflow of resources and deferred inflows of resources related to pensions will be recognized as pension revenue as follows:

Year Ended
June 30
2023 569,346 $
2024 549,278
2025 791,614
2026 907,831
2027 -
Thereafter -
Actuarial Assumptions
The total pension liabilities (assets) in the June 30, 2020 actuarial valuations were determined using the following actuarial assumptions:

Valuation Date June 30, 2020
Measurement Date June 30, 2021
Actuarial Cost Method Entry- Age Normal Cost Method
Actuarial Assumptions:

Discount Rate 7.15%
Inflation 2.50%
Payroll Growth 2.75%
Projected Salary Increase Varies by Entry Age and Service Investment Rate of Return 7.15%(1)
Mortality Derived using CalPERS' Membership
Data for all Funds(2)
(1) Net of pension plan investment expenses, including inflation (2) The mortality table was developed based on CalPERS specific data.

The table includes 15 years of mortality improvements using Society of Actuaries Scale 90% of scale MP 2016.

The underlying mortality assumptions and all other actuarial assumptions used in the June 30, 2020 valuation were based on the results of December 2017 actuarial experience study for the period 1997 to 2015. Further details of the Experiences Study can be found on the CalPERS website.

CITY OF CHOWCHILLA

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
60 NOTE 10 – DEFINED BENEFIT PENSION PLAN (Continued)
Discount Rate
The discount rate used to measure the total pension liability (asset) was 7.15%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability (asset).

The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.

In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations as well as the expected PERF cash flows. Using historical returns of all the funds’ asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11+ years) using a building-block approach. Using the expected nominal returns for both shortterm and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equivalent to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses.

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

Asset Class (a)
New Strategic
Allocation
Real Return
Years 1-10(b)
Real Return
Years 11+(c)
Public Equity 50.00% 4.80% 5.98%
Fixed Income 28.00% 1.00% 2.62%
Inflation Assets 0.00% 0.77% 1.81%
Private Equity 8.00% 6.30% 7.23%
Real Assets 13.00% 3.75% 4.93%
Liquidity 1.00% 0.00% -0.92%
Total 100.00%
(b) An expected inflation of 2.0% used for this period
(c)
An expected inflation of 2.92% used for this period
(a) In the CalPERS ACFR, Fixed Income is included in Global Debt Securities; Liquidity is included in Short-term Investments; Inflation Assets are included in both Global Equity Securities and Global Debt Securities.

CITY OF CHOWCHILLA

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
61 NOTE 10 – DEFINED BENEFIT PENSION PLAN (Continued)
Discount Rate (Continued)
Sensitivity of the Proportionate Share of the Net Pension Liability (Asset) to Changes in the Discount Rate – The following presents the City’s proportionate share of the net pension liability (asset) for the Plan, calculated using the discount rate for the Plan, as well as what the City’s proportionate share of the net pension liability (asset) would be if it were calculated using a discount rate that is 1-percentage point lower or 1- percentage point higher than the current rate:

Discount Rate -1%

6.15%
Current Discount Rate

7.15%
Discount Rate +1%

8.15%
$ (4,281,392) 1,223,349 $ (8,820,160) $
Pension Plan Fiduciary Net Position
Detailed information about the Plan’s fiduciary net position is available in the separately issued CalPERS financial reports.

Payable to the Pension Plan
The City had $12,977 of contributions due to the pension plan for the year ended June 30, 2022.

NOTE 11 – POST-RETIREMENT HEALTH CARE BENEFITS
The City provides no post-employment benefits for its employees. However, former employees may be maintained on the City’s health insurance programs through the City’s Consolidated Omnibus Budget Reconciliation Act (COBRA) insurance continuation plan.

NOTE 12 – RISK MANAGEMENT
The City is a member, along with fifty-eight other public entities, of Central San Joaquin Valley Risk Management Authority (the Authority) organized under a joint powers agreement pursuant to the California Government Code for the purpose of operating and maintaining a cooperative program of self-insurance and risk management which benefits its member cities through cost reductions, insurance coverage stability, and loss control techniques. The Authority is governed by a Board of Directors, consisting of one member appointed by each member city. The Authority maintains pooled coverage programs for its member cities for workers’ compensation, liability, auto-physical damage, property, employment practices liability, and errors and omissions coverage. For workers’ compensation and liability programs, each program and program year is accounted for and administered as a separate operation.

Under the pooled liability program, expected claims are actuarially determined as are required deposits to cover those claims along with all estimated operating costs. Each year is retrospectively adjusted five years following its conclusion and any funds remaining are returned to the member city. Likewise, funds paid out in excess of their original deposits are collected from the member city.

CITY OF CHOWCHILLA

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
62 NOTE 12 – RISK MANAGEMENT (Continued)
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 Authority. The City has the right to receive refunds of the obligation to pay assessments based on a formula which, among other expenses, charges the City’s account for liability losses under $1,000,000 and workers’ compensation losses under $500,000. The Authority is a member of the local Agency Workers’ Compensation Excess Joint Powers Authority (LAWCX) for the purpose of providing excess coverage. Any claims of $500,000 up to $150,000,000 are covered under a purchased policy through the membership with the LAWCX. The Authority is a member of the California Affiliated Risk Management Authorities (CARMA) for the purpose of providing excess coverage in a risk sharing pool. The CARMA program provided coverage in excess for the Authority’s retained limit up to $19,000,000.

The financial position results of operations of the Authority are as follows for June 30, 2022:

Total assets 150,837,823 $
Total liabilities 118,663,929
Total net position $ 32,173,894
Revenues 58,911,480 $
Expenses 47,584,363
Change in net position $ 11,327,117
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 its governing documents.

The City has established the following retained limits for the coverages shown: $25,000 for liability; $100,000 for worker’s compensation; $1,000 for property damage; $500 deductible on vehicles.

NOTE 13 – DEFICIT IN FUND EQUITY
Nonmajor Governmental Funds
SAFER Fire Grant Fund – A deficit in fund balance at June 30, 2022, in the amount of $14,344, is due to current year expenditures in excess of revenues. This deficit is expected to be alleviated through future revenues or transfers from other funds.

Transit System Fund – A deficit in fund balance at June 30, 2022, in the amount of $281,276, is due to current year expenditures in excess of revenues. This deficit is expected to be alleviated through future revenues or transfers from other funds.

Internal Service Funds
Employee Benefits Internal Service Fund – A deficit in net position at June 30, 2022, in the amount of $484,328, exists because the fund was established on a pay-as-you go basis for the purpose of funding the annual accrued leave liability. As employees are paid for their accumulated leave in the future, the fund in which their normal salary is charged makes a transfer to the Employee Benefit Fund to offset the expense.

CITY OF CHOWCHILLA

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
63 NOTE 14 – COMMITMENTS AND CONTINGENCIES
General Liability
There are various claims and legal actions pending against the City for which no provision has been made in the financial statements. In the opinion of the City Attorney and City Management, liabilities arising from these claims and legal actions, if any, will not be material to these financial statements.

Federal Awards and Grants
The City participates in various federal grant programs, the principal of which are subject to program compliance audits pursuant to the Single Audit Act as amended. Accordingly, the government’s compliance with applicable grant requirements will be established at a future date. The amount of expenditures which may be disallowed by the granting agencies cannot be determined at this time, although the government anticipates such amounts, if any, will be immaterial.

Encumbrances
Encumbrance accounting is employed as an extension of formal budgetary integration for the General Fund, special revenue funds, and capital projects funds. At June 30, 2022, certain amounts which were previously restricted, committed, or assigned for specific purposes have been encumbered in the governmental funds.

Significant encumbrances included in governmental fund balances are as follows:

Restricted
Fund Balance
Committed
Fund Balance
Assigned
Fund Balance
General Fund - $ - $ 1,064,841 $
Capital Projects Fund 116,122 - -
Non-Major Governmental 17,918 - -
Encumbrances Included in:

NOTE 15 – RESTATEMENT OF BEGINNING FUND BALANCE
Implementation of GASB 87
The City has adopted the provisions of the Governmental Accounting Standards Board (GASB) Statement No. 87, Leases, which became effective during the year ended June 30, 2022. The intention of this Statement is to better meet the needs of financial statement users by improving accounting and financial reporting for leases by governments.

CITY OF CHOWCHILLA

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
64 NOTE 15 – RESTATEMENT OF BEGINNING FUND BALANCE/NET POSITION (Continued) Implementation of GASB 87 (Continued)
A summary of the original net position and effects of the correction are noted below.

GovernmentWide Governmental
Funds
Proprietary
Funds
Governmental
Activities
General
Fund
Internal Service
Funds
previously reported $ 7,129,168 33,598,518 $ (464,781) $ Change in accounting principle (GASB 87)
Leases receivable 82,903 82,903 -
Right-to-use capital assets 38,958 - 38,958
Lease liabilities - (61,739) (61,739)
Total change in accounting principle 82,903 60,122 (22,781) $ 7,212,071 33,658,640 $ (487,562) $
Fund balance/net position, June 30, 2021, as
Fund balance/net position, July 1, 2021, as restated
NOTE 16 – SUCCESSOR AGENCY TRUST FOR ASSETS OF FORMER REDEVELOPMENT AGENCY On December 29, 2011, the California Supreme Court upheld Assembly Bill 1X26 (the Bill) that dissolved all redevelopment agencies in the State of California. This action impacted the reporting entity of the City of Chowchilla that previously had reported a redevelopment agency within the reporting entity of the City as a blended component unit.

The Bill provides that upon dissolution of a redevelopment agency, the city of 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 10, 2012 the City Council elected to become the Successor Agency for the former redevelopment agency in accordance with the Bill as part of City Resolution Number 5-12.

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 completion of any unfinished projects that were subject to legally enforceable contractual commitments.)

CITY OF CHOWCHILLA

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
65 NOTE 16 – SUCCESSOR AGENCY TRUST FOR ASSETS OF FORMER REDEVELOPMENT AGENCY (Continued)
In future 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 renew 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 contractually committed to a third party for the expenditure of encumbrance of those assets, the State Controller 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 consultation with legal counsel, that the obligations of the former redevelopment agency due to the City are valid enforceable obligations payable by the Successor Agency trust under the requirements of the Bill. The City’s position on this issue is not a position of settled law and there is considerable uncertainty regarding this issue. It is reasonably possible that a legal determination may be made at a later date by an appropriate judicial authority that would resolve this issue favorably to the City.

In accordance with the timeline set forth in the Bill (as modified 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, 2012.

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.

Cash and Investments
As of June 30, 2022, the Successor Agency has a cash and investment balance of $0.

Long-Term Debt
Long-term debt reported in the Successor Agency Trust Fund at June 30, 2022 was comprised of the following:

Amounts Amounts Due
June 30, June 30, Due Within More Than
2021 Additions Reductions 2022 One Year One Year
2016 Successor Agency Tax 5,200,000 $ - $ (260,000) $ 4,940,000 $ 265,000 $ 4,675,000 $ Refunding Bond
Add: Premiums - 192,755 (12,688) 180,067 - 180,067
Total 5,392,755 $ - $ (272,688) $ 5,120,067 $ 265,000 $ 4,855,067 $

CITY OF CHOWCHILLA

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
66 NOTE 16 – SUCCESSOR AGENCY TRUST FOR ASSETS OF FORMER REDEVELOPMENT AGENCY (Continued)
2016 Successor Agency Tax Allocation Refunding Bonds
In 2016, the Successor Agency of the City of Chowchilla issued Tax Allocation Refunding Bonds in the aggregate principal amount of $6,190,000 to refund the 2005 RDA Tax Allocation Bonds. This was done to take advantage of lower interest rates and to save on future debt service payments. As a result, the 2005 RDA Tax Allocation Bonds are considered defeased and the liability for that bond is not included in fiduciary fund (privatepurpose trust fund) statement of net position. The total debt service payments were reduced by $365,124. The original amount of the note - $6,190,000 – was secured by a pledge of tax revenues consisting of tax increment payments to be received by the Successor Agency. Semiannual payments range from $5,294 to $390,294 and are payable each February 1 and August 1 through 2036.

There is a provision whereby if the Successor Agency is unable to make payment, does not comply with bond covenants, or files for reorganization or arrangement, the Trustee may declare the principal of all bonds outstanding and the accrued interest thereon to be due and payable immediately.

Annual debt service requirements to maturity of the 2016 Successor Agency Tax Allocation Refunding Bonds are as follows:

Fiscal Year
Ending June 30 Principal Interest
2023 265,000 $ 138,981 $
2024 275,000 130,881
2025 285,000 121,056
2026 295,000 107,981
2027 310,000 92,856
2028-2032 1,685,000 337,094
2033-2037 1,825,000 125,316
Total $ 1,054,165 4,940,000 $
Insurance
The Successor Agency is covered under the City of Chowchilla’s insurance policies. Therefore, the limitation and self-insured retentions applicable to the City also apply to the Successor Agency. Additional information as to coverage can be found in Note 12.
67 REQUIRED SUPPLEMENTARY INFORMATION

CITY OF CHOWCHILLA

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN
FUND BALANCE – BUDGET AND ACTUAL

GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2022
68 Original Final Variance with
Budget Budget Actual Final Budget

REVENUES
Taxes 3,465,389 $ 4,060,342 $ 4,471,661 $ 411,319 $
Licenses and permits 692,950 838,250 971,461 133,211
Fines and penalties 238,500 259,500 156,013 (103,487)
Intergovernmental 3,059,539 5,463,197 7,350,939 1,887,742 Use of money and property 135,681 147,881 117,627 (30,254) Charges for services 158,870 311,719 166,822 (144,897)
Legal settlement - 400,000 400,000 -
Miscellaneous 130,960 132,910 246,110 113,200
Total revenues 7,881,889 11,613,799 13,880,633 2,266,834

EXPENDITURES
Current:

General government 621,432 1,208,668 1,052,455 156,213
Public safety 4,671,115 4,213,814 3,981,973 231,841
Culture and recreation 737,849 731,231 653,709 77,522
Community development 826,381 805,346 645,720 159,626
Capital outlay 2,609,250 3,264,978 1,885,101 1,379,877
Total expenditures 9,466,027 10,224,037 8,218,958 2,005,079 Excess (deficiency) of revenues
over (under) expenditures (1,584,138) 1,389,762 5,661,675 4,271,913

OTHER FINANCING SOURCES (USES)
Transfers in 1,795,154 2,271,570 987,987 (1,283,583)
Transfers out (972,191) (1,453,946) (1,330,651) 123,295 Proceeds from sale of capital assets - - 1,906 1,906
Total other financing sources (uses) 822,963 817,624 (340,758) (1,158,382) Net change in fund balance $ 2,207,386 (761,175) $ 5,320,917 3,113,531 $ Fund balances - beginning, restated 7,212,071
Fund balances - ending $ 12,532,988

CITY OF CHOWCHILLA

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN
FUND BALANCE – BUDGET AND ACTUAL

CDBG GRANTS SPECIAL REVENUE FUND
FOR THE YEAR ENDED JUNE 30, 2022
69 Original Final Variance with
Budget Budget Actual Final Budget

REVENUES
Intergovernmental 2,141,190 $ 2,141,190 $ 432,103 $ (1,709,087) $ Use of money and property 5,093 5,393 3,062 (2,331)
Charges for services 7,400 7,400 28,271 20,871
Total revenues 2,153,983 2,153,683 463,436 (1,690,547)

EXPENDITURES
Current:

Community development 2,195,590 2,195,590 488,640 1,706,950 Total expenditures 2,195,590 2,195,590 488,640 1,706,950 Excess (deficiency) of revenues
over (under) expenditures (41,607) (41,907) (25,204) 16,403

OTHER FINANCING SOURCES (USES)
Transfers in 39,511 - 39,511 -
Transfers out (700,000) (704,901) (4,901) 700,000
Total other financing sources (uses) (665,390) (700,000) 34,610 700,000 Net change in fund balance $ (706,997) (741,907) $ 9,406 $ 716,403 Fund balances - beginning 997,465
Fund balances - ending $ 1,006,871

CITY OF CHOWCHILLA

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN
FUND BALANCE – BUDGET AND ACTUAL

IMPACT FEES SPECIAL REVENUE FUND
FOR THE YEAR ENDED JUNE 30, 2022
70 Original Final Variance with
Budget Budget Actual Final Budget

REVENUES
Use of money and property $ 19,806 19,784 $ 13,561 $ (6,245) $ Charges for services 2,163,445 2,364,805 1,315,958 (847,487) Total revenues 2,183,251 2,384,589 1,329,519 (853,732)

EXPENDITURES
Capital outlay 205,000 - 211,667 (6,667)
Total expenditures 205,000 - 211,667 (6,667)
Excess (deficiency) of revenues
over (under) expenditures 1,978,251 2,384,589 1,117,852 (860,399)

OTHER FINANCING SOURCES (USES)
Transfers out (466,000) (340,000) (44,167) 421,833
Total other financing sources (uses) (466,000) (340,000) (44,167) 421,833 Net change in fund balance $ 1,512,251 2,044,589 $ 1,073,685 $ (438,566) Fund balances - beginning 3,522,456
Fund balances - ending $ 4,596,141

CITY OF CHOWCHILLA

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN
FUND BALANCE – BUDGET AND ACTUAL

MEASURE N SPECIAL REVENUE FUND
FOR THE YEAR ENDED JUNE 30, 2022
71 Original Final Variance with
Budget Budget Actual Final Budget

REVENUES
Taxes 2,058,158 $ 2,388,500 $ 2,603,988 $ 215,488 $
Use of money and property 11,437 11,437 (1,874) 9,563
Miscellaneous - - 725 725
Total revenues 2,399,937 2,069,595 2,614,276 214,339

EXPENDITURES
Current:

Public safety 779,065 825,255 675,929 149,326
Capital outlay 1,243,000 1,243,000 410,584 832,416
Total expenditures 2,068,255 2,022,065 1,508,345 559,910 Excess (deficiency) of revenues
over (under) expenditures 331,682 47,530 774,249 1,105,931

OTHER FINANCING SOURCES (USES)
Transfers in 15,750 - 15,750 -
Transfers out (1,599,788) (1,449,743) (958,838) 640,950 Total other financing sources (uses) (1,584,038) (1,449,743) (943,088) 640,950 Net change in fund balance $ (1,252,356) (1,402,213) $ 162,843 $ 1,415,199 Fund balances - beginning 3,126,297
Fund balances - ending $ 3,289,140

CITY OF CHOWCHILLA

NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION
JUNE 30, 2022
72 NOTE 1 – STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY Budgetary Information
The City establishes annual budgets for the General, Special Revenue Funds, and Capital Projects Funds.

Except for encumbrances and long-term projects in progress, which are carried forward to the following year, all appropriations remaining will lapse at year end. The following procedures are followed in establishing the budgetary data reflected in the budgetary comparison schedules:
1) The department heads prepare a budget request based upon the previous year’s expenditures. 2) A meeting is held between the department heads, Finance Director and the City Administrator for the purpose of reviewing and prioritizing the budget requests. 3) The City Administrator submits the proposed City Budget to the City Council, who makes decisions regarding department budgets.
4) The approved budget is placed in the City accounting system and monitored by the Finance Department as well as by the department heads.
5) Budgets are adopted on the modified accrual basis. Revenues are budgeted in the year receipt is expected, and expenditures are budgeted in the year that the applicable purchase orders are expected to be issued. The Debt Service Fund budget is prepared to provide funding for general obligation debt service when liabilities are due for payment. The level of control (level at which expenditures may not exceed budget) is at fund level for the General Fund, fund level for the Special Revenue Funds, and project level for the Capital Projects Funds.

Excess Expenditure over Appropriations
The City incurred expenditures in excess of appropriations in the following amounts for the year ended June 30, 2022:

Impact Fees Special Revenue Fund
Current:

Capital Outlay 6,667 $

CITY OF CHOWCHILLA

REQUIRED SUPPLEMENTARY INFORMATION (UNAUDITED)

COST-SHARING MULTIPLE-EMPLOYER DEFINED BENEFIT PENSION PLAN SCHEDULE OF THE CITY’S

PROPORTIONATE SHARE OF THE NET PENSION LIABILITY (ASSET) LAST 10 YEARS*
AS OF JUNE 30, 2022
73 2015 2016 2017 2018 2019 2020 2021 2022
Proportion of the net pension liability (asset) 0.1141% 0.1170% 0.1107% 0.1088% 0.1102% 0.0057% 0.0119% -0.0792%Proportionate share of the net pension liability (asset) 7,165,731 $ 8,032,145 $ 9,583,127 $ 10,793,945 $ 10,615,478 $ 579,267 $ 1,290,678 $ (4,281,392) $ Covered payroll 3,644,535 $ 3,617,983 $ 3,411,501 $ 3,728,201 $ 3,960,212 $ 3,991,276 $ 4,313,602 $ 4,489,333 $ Proportionate share of the net pension liability (asset) as percentage of covered payroll 196.62% 222.01% 280.91% 289.52% 268.05% 14.51% 29.92% -95.37%Plan fiduciary net position as a percentage of the total pension liability (asset) 78.02% 74.09% 70.07% 69.45% 70.84% 99.14% 97.37% 110.81%Notes to Schedule:

Change in Benefit Terms - None
Change in Assumptions - None

CITY OF CHOWCHILLA

REQUIRED SUPPLEMENTARY INFORMATION (UNAUDITED)

COST-SHARING MULTIPLE-EMPLOYER DEFINED BENEFIT PENSION PLAN

SCHEDULE OF CONTRIBUTIONS
LAST 10 YEARS*
AS OF JUNE 30, 2022
74 2014 2015 2016 2017 2018 2019 2020 2021 2022
Actuarily required contribution (actuarially determined) $ 745,347 788,942 $ 848,864 $ 942,347 $ 1,034,227 $ 694,478 $ 523,962 $ 648,797 $ 678,921 $ Contributions in relation to the actuarially determined contributions 745,347 788,942 848,864 942,347 1,034,227 11,304,271 523,962 648,797 678,921 Contribution deficiency (excess) $ - - $ - $ - $ - $ (10,609,793) $ - $ - $ - $ Covered payroll 3,644,535 $ 3,617,983 $ 3,411,501 $ 3,728,201 $ 3,960,212 $ 3,991,276 $ 4,313,602 $ 4,892,282 $ 4,742,624 $ Contributions as a percentage of covered payroll 21.65% 20.60% 24.88% 25.28% 26.12% 283.22% 12.15% 13.26% 14.32%*Schedule is intended to show information for ten years. Additional years will be displayed as they become available. 75 OTHER SUPPLEMENTARY INFORMATION

CITY OF CHOWCHILLA

COMBINING BALANCE SHEET

NONMAJOR SPECIAL REVENUE FUNDS
JUNE 30, 2022
76 Maintenance
State Street & SAFER Fire Measure T Assessment
Gas Tax SB1 Road (LTF) Grant Fund Fund District
ASSETS
Cash and investments 1,031,271 $ 1,016,907 $ 1,766,230 $ - $ 1,443,405 $ 634,682 $ Accounts receivable - - 7,245 - - -
Intergovernmental receivables 67,143 - 199,006 - 308,189 3,607 Notes receivable, net - - - - - -
Prepaid Expense - - - - - -
Land held for resale - - - - - -
Total assets 1,031,271 $ 1,084,050 $ 1,972,481 $ - $ 1,751,594 $ 638,289 $

LIABILITIES
Accounts payable 9,200 $ - $ 524,437 $ - $ - $ 13,118 $ Due to other funds - - - 14,344 - -
Total liabilities 9,200 - 524,437 14,344 - 13,118

DEFERRED INFLOWS OF RESOURCES
Unavailable revenues - - 159,265 - 308,189 -
Total deferred inflows of resources - - 159,265 - 308,189 -

FUND BALANCES (DEFICIT)
Restricted for:

Highway and streets 1,084,050 1,022,071 1,288,779 - 1,443,405 625,171 Community development - - - - - -
Unassigned - - - (14,344) - -
Total fund balances (deficit) 1,084,050 1,022,071 1,288,779 (14,344) 1,443,405 625,171 $ 1,084,050 1,031,271 $ 1,972,481 $ - $ 1,751,594 $ 638,289 $ Total liabilities, deferred inflows of
resources, and fund balances

CITY OF CHOWCHILLA

COMBINING BALANCE SHEET

NONMAJOR SPECIAL REVENUE FUNDS
JUNE 30, 2022
(Continued)
77 Low and
Home Moderate
Investment Income
Transit Partnership EDBG Housing
System Program Grants Asset Fund Total
ASSETS
Cash and investments - $ 1,308,951 $ 30,018 $ - $ 7,231,464 $ Accounts receivable - - - - 7,245
Intergovernmental receivables 465,156 - - - 1,043,101
Notes receivable, net - 1,447,962 - 77,434 1,525,396
Prepaid Expense 11,681 - - - 11,681
Land held for resale - - - 104,000 104,000
Total assets 476,837 $ 2,756,913 $ 30,018 $ 181,434 $ 9,922,887 $

LIABILITIES
Accounts payable 3,043 $ 207 $ - $ - $ 550,005 $
Due to other funds 467,079 - - 45,559 526,982
Total liabilities 470,122 207 - 45,559 1,076,987

DEFERRED INFLOWS OF RESOURCES
Unavailable revenues 1,447,962 287,991 - 77,434 2,280,841 Total deferred inflows of resources 287,991 1,447,962 - 77,434 2,280,841

FUND BALANCES (DEFICIT)
Restricted for:

Highway and streets - - - - 5,463,476
Community development 1,308,744 - 30,018 58,441 1,397,203 Unassigned (281,276) - - - (295,620)
Total fund balances (deficit) 1,308,744 (281,276) 30,018 58,441 6,565,059 $ 2,756,913 476,837 $ 30,018 $ 181,434 $ 9,922,887 $
Total liabilities, deferred inflows of
resources, and fund balances

CITY OF CHOWCHILLA

COMBINING STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

NONMAJOR SPECIAL REVENUE FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
78 Maintenance
State Street & SAFER Fire Measure T Assessment
Gas Tax SB1 Road (LTF) Grant Fund Fund District

REVENUES
Intergovernmental 423,203 $ 380,069 $ 232,425 $ - $ 418,587 $ 3,814 $ Use of money and property 3,469 2,635 2,656 - 4,661 1,774 Charges for services - - - - - 303,012
Miscellaneous - - 5,832 122 - -
Total revenues 426,672 382,704 240,913 122 423,248 308,600

EXPENDITURES
Current:

Public safety - - - 13,382 - -
Highway and streets 37,007 - 341,165 - 50,123 321,922
Community development - - - - - -
Capital outlay - - 513,179 - - -
Total expenditures 37,007 - 854,344 13,382 50,123 321,922 Excess (deficiency) of revenues
over (under) expenditures 382,704 389,665 (613,431) (13,260) 373,125 (13,322)

OTHER FINANCING SOURCES (USES)
Transfers in - 14,502 734,025 20 - -
Transfers out (39,772) (366,958) - - (386,107) -
Total other financing
sources (uses) (25,270) (366,958) 734,025 20 (386,107) - Net change in fund balances 22,707 357,434 120,594 (13,240) (12,982) (13,322) 726,616 999,364 1,168,185 (1,104) 1,456,387 638,493
$ 1,084,050 1,022,071 $ 1,288,779 $ (14,344) $ 1,443,405 $ 625,171 $ Fund balances (deficit) - beginning
Fund balances (deficit) - ending

CITY OF CHOWCHILLA

COMBINING STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

NONMAJOR SPECIAL REVENUE FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
(Continued)
79 Low and
Home Moderate
Investment Income
Transit Partnership EDBG Housing
System Program Grants Asset Fund Total

REVENUES
Intergovernmental 320,383 $ - $ - $ - $ 1,778,481 $
Use of money and property - 3,705 204 - 19,104
Charges for services 21,645 - - - 324,657
Miscellaneous - 483 - - 6,437
Total revenues 342,511 3,705 204 - 2,128,679

EXPENDITURES
Current:

Public safety - - - - 13,382
Highway and streets 464,336 - - - 1,214,553
Community development - 2,277 - - 2,277
Capital outlay - 58,531 - - 571,710
Total expenditures 522,867 2,277 - - 1,801,922
Excess (deficiency) of revenues
over (under) expenditures 1,428 (180,356) 204 - 326,757

OTHER FINANCING SOURCES (USES)
Transfers in 5,250 - 3,973 - 757,770
Transfers out (3,973) - (39,511) - (836,321)
Total other financing
sources (uses) (3,973) 5,250 (35,538) - (78,551)
Net change in fund balances (175,106) (2,545) (35,334) - 248,206 1,311,289 (106,170) 65,352 58,441 6,316,853
Fund balances (deficit) - ending $ 1,308,744 (281,276) $ 30,018 $ 58,441 $ 6,565,059 $ Fund balances (deficit) - beginning

CITY OF CHOWCHILLA

COMBINING STATEMENT OF NET POSITION

NONMAJOR ENTERPRISE FUNDS
JUNE 30, 2022
80 Storm
Drain Airport Total
ASSETS
Current assets:

Cash and investments 1,949,520 $ 121,653 $ 2,071,173 $
Accounts receivable, net 32,455 - 32,455
Intergovernmental receivables 12,877 - 12,877
Total current assets 1,981,975 134,530 2,116,505
Noncurrent assets:

Net pension asset 23,140 9,176 32,316
Capital assets:

Nondepreciable 433,971 452,951 886,922
Depreciable, net of accumulated depreciation 184,256 106,448 290,704 Total noncurrent assets 641,367 568,575 1,209,942
Total assets 2,623,342 703,105 3,326,447

DEFERRED OUTFLOWS OF RESOURCES
Contributions to pension plan in current fiscal year 3,230 1,281 4,511 Deferred outflows of resources from pensions 41,538 15,997 57,535 Total deferred outflows of resources 44,768 17,278 62,046

LIABILITIES
Current liabilities:

Accounts payable 154 237 391
Total current liabilities 154 237 391

DEFERRED INFLOWS OF RESOURCES
Deferred inflows of resources from pensions 23,190 8,752 31,942 Total deferred outflows of resources 23,190 8,752 31,942

NET POSITION
Net investment in capital assets 618,227 559,399 1,177,626 Unrestricted 2,026,539 151,995 2,178,534
Total net position $ 2,644,766 711,394 $ 3,356,160 $

CITY OF CHOWCHILLA

COMBINING STATEMENT OF REVENUES, EXPENSES AND

CHANGES IN NET POSITION

NONMAJOR ENTERPRISE FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
81 Storm
Drain Airport Total
Operating revenues:

Charges for services 210,444 $ 20,715 $ 231,159 $
Miscellaneous 1,158 12 1,170
Total operating revenues 211,602 20,727 232,329
Operating expenses:

Personnel services (12,535) (3,653) (16,188)
Materials, supplies and services 41,768 46,834 88,602
Depreciation 14,680 14,683 29,363
Total operating expenses 43,913 57,864 101,777
Operating income (loss) 167,689 (37,137) 130,552
Nonoperating revenues (expenses):

Use of money and property 5,200 315 5,515
Taxes 50,779 - 50,779
Grants - capital - 30,800 30,800
Total nonoperating revenues (expenses) 5,200 81,894 87,094 Income (loss) before transfers 172,889 44,757 217,646
Transfers in 40,297 175 40,472
Change in net position 44,932 213,186 258,118
Net position - beginning 666,462 2,431,580 3,098,042
Net position - ending 2,644,766 $ 711,394 $ 3,356,160 $

CITY OF CHOWCHILLA

COMBINING STATEMENT OF CASH FLOWS

NONMAJOR ENTERPRISE FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
82 Storm
Drain Airport Total
Cash flows from operating activities:

Receipts from customers and users 208,238 $ 20,715 $ 228,953 $ Payments to suppliers (50,177) (53,408) (103,585)
Payments to employees (35,212) (15,287) (50,499)
Other operating revenues 12 1,158 1,170
(44,737) 120,776 76,039
Cash flows from noncapital financing activities:

Transfer from other funds 175 40,297 40,472
Taxes received - 50,779 50,779
50,954 40,297 91,251
Grants received - 37,322 37,322
Acquisition of capital assets (39,771) - (39,771)
37,322 (39,771) (2,449)
Cash flows from investing activities:
315 5,200 5,515
315 5,200 5,515
43,854 126,502 170,356
77,799 1,823,018 1,900,817
$ 121,653 1,949,520 $ 2,071,173 $
Cash and cash equivalents - beginning
Cash and cash equivalents - ending
Net cash provided by investing activities
Net cash provided by (used for) capital and
related financing activities
Interest received
Net increase (decrease) in cash and
cash equivalents
Net cash provided by (used for) operating activities
Net cash provided by noncapital financing activities
Cash flows from capital and related
financing activities:

CITY OF CHOWCHILLA

COMBINING STATEMENT OF CASH FLOWS

NONMAJOR ENTERPRISE FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
(Continued)
83 Storm
Drain Airport Total
Operating income (loss) 167,689 $ (37,137) $ 130,552 $
Depreciation 14,680 14,683 29,363
(Increase) decrease in:

Accounts receivable (2,206) - (2,206)
Deferred outflows of resources from pensions (8,570) (3,921) (12,491) Increase (decrease) in:

Accounts payable and other liabilities (11,640) (3,343) (14,983) Net pension liability (28,659) (11,346) (40,005)
Deferred inflows of resources from pension (3,673) (10,518) (14,191) $ (44,737) 120,776 $ 76,039 $
Reconciliation of operating income (loss) to net
cash provided by (used for) operating activities:

Adjustments to reconcile operating income
(loss) to net cash provided by (used in)
operating activities:

Net cash provided by (used for) operating activities

CITY OF CHOWCHILLA

COMBINING STATEMENT OF NET POSITION

INTERNAL SERVICE FUNDS
JUNE 30, 2022
84 Fleet Information Employee
Maintenance Technology Benefits Total
ASSETS
Current assets:

Cash and investments 11,151 $ 78,494 $ 61,535 $ 151,180 $ Accounts receivable, net 180 (180) - -
Prepaid expenses 3,449 - 95,694 99,143
Total current assets 81,763 11,331 157,229 250,323
Noncurrent assets:

Net pension asset 86,392 114,131 - 200,523
Capital assets:

Depreciable, net of accumulated depreciation/amortization 220,578 29,219 - 249,797 Total noncurrent assets 334,709 115,611 - 450,320
Total assets 416,472 126,942 157,229 700,643

DEFERRED OUTFLOWS OF RESOURCES
Contributions to pension plan in current fiscal year 12,164 15,933 - 28,097 Deferred outflows of resources from pensions 191,148 154,199 - 345,347 Total deferred outflows of resources 166,363 207,081 - 373,444

LIABILITIES
Current liabilities:

Accrued salaries, wages, and benefits 1,424 170,684 89,435 261,543 Accrued payroll - - 80,506 80,506
Compensated absences - - 322,588 322,588
Current portion of lease liabilities - 14,975 - 14,975
Total current liabilities 170,684 16,399 492,529 679,612 Noncurrent liabilities:

Compensated absences - - 149,028 149,028
Lease liabilities - 33,069 - 33,069
Total noncurrent liabilities - 33,069 149,028 182,097
Total liabilities 170,684 49,468 641,557 861,709

DEFERRED INFLOWS OF RESOURCES
Deferred inflows of resources from pensions 102,615 86,991 - 189,606 Total deferred inflows of resources 102,615 86,991 - 189,606

NET POSITION (DEFICIT)
Net investment in capital assets 14,244 220,578 - 234,822 Unrestricted (deficit) 129,676 142,602 (484,328) (212,050) Total net position (deficit) $ 350,254 156,846 $ (484,328) $ 22,772 $

CITY OF CHOWCHILLA

COMBINING STATEMENT OF REVENUES, EXPENSES AND

CHANGES IN NET POSITION

INTERNAL SERVICE FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
85 Fleet Information Employee
Maintenance Technology Benefits Total
Operating revenues:

Charges for services $ 642,228 236,452 $ - $ 878,680 $
Miscellaneous 273 127 - 400
Total operating revenues 642,501 236,579 - 879,080
Operating expenses:

Personnel services (29,388) (34,314) 44,872 (18,830)
Materials, supplies and services 70,572 285,865 - 356,437 Depreciation and Amortization 22,362 9,740 - 32,102
Total operating expenses 50,924 273,913 44,872 369,709
Operating income (loss) 368,588 185,655 (44,872) 509,371 Nonoperating revenues (expenses):

Gain (loss) sale of assets - 18 - 18
Interest expense (4,305) - - (4,305)
Total nonoperating revenues (expenses) 18 (4,305) - (4,287) Income (loss) before transfers 368,606 181,350 (44,872) 505,084 Transfers in 1,750 3,500 - 5,250
Change in net position 183,100 372,106 (44,872) 510,334 Net position - beginning, restated (21,852) (26,254) (439,456) (487,562) Net position (deficit) - ending $ 350,254 156,846 $ (484,328) $ 22,772 $

CITY OF CHOWCHILLA

COMBINING STATEMENT OF CASH FLOWS

INTERNAL SERVICE FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
86 Fleet Information Employee
Maintenance Technology Benefits Total
Cash flows from operating activities:

Receipts from customers and users 236,452 $ 642,408 $ - $ 878,860 $ Payments to suppliers (69,753) (128,053) - (197,806)
Payments to or received from employees (149,288) (204,053) (156,961) (510,302) Other operating revenues 273 127 - 400
310,575 17,538 (156,961) 171,152
Cash flows from noncapital financing activities:

Transfer from other funds 3,500 1,750 - 5,250
Loan from other funds (97,186) - - (97,186)
(93,686) 1,750 - (91,936)
Leases paid (18,000) - - (18,000)
Acquisition of capital assets - (138,413) - (138,413)
Proceeds from the sale of assets - 18 - 18
(138,395) (18,000) - (156,395)
Net increase (decrease) in cash and cash equivalents 1,288 78,494 (156,961) (77,179) - 9,863 218,496 228,359
$ 78,494 11,151 $ 61,535 $ 151,180 $
Cash and cash equivalents - beginning
Cash and cash equivalents - ending
Net cash provided by (used for) related
financing activities
Net cash provided by (used for) operating activities
Net cash provided by noncapital financing activities
Cash flows from capital and related
financing activities:

Operating income (loss) 185,655 $ 368,588 $ (44,872) $ 509,371 $ Depreciation 9,740 22,362 - 32,102
(Increase) decrease in:

Accounts receivable - 180 - 180
Prepaid expenses - 5,273 (97,694) (92,421)
Net pension asset (108,901) (144,887) - (253,788)
Deferred outflows of resources from pensions (31,515) (57,777) - (89,292) Increase (decrease) in:

Accounts payable and other liabilities 818 152,539 (59,267) 94,090 Compensated absences - - 44,872 44,872
Deferred inflows of resources from pensions (35,703) (38,259) - (73,962) Net cash provided by (used for) operating activities $ 310,575 17,538 $ (156,961) $ 171,152 $ Reconciliation of operating income (loss) to net cash
provided by (used for) operating activities:

Adjustments to reconcile operating income
(loss) to net cash provided by (used for)
operating activities:

CITY OF CHOWCHILLA

COMBINING STATEMENT OF FIDUCIARY NET POSITION

CUSTODIAL FUNDS
JUNE 30, 2022
87 Community
Facilites District
Greenhills
Assessment
District
Pheasant Run
Assessment
District
Total Custodial
Funds
ASSETS
Cash and investments (in City investment pool) 785,322 $ 657,626 591,658 2,034,606 $ Restricted cash with fiscal agents 78,906 565,162 116,378 760,446 Accounts receivable (net) 15,655 3,116 6,423 25,194
Total assets 739,648 1,366,139 714,459 2,820,246

LIABILITIES
Accounts payable 22,330 2,616 1,997 26,943
Total liabilities 2,616 22,330 1,997 26,943

NET POSITION
Restricted for:

Individuals, organizations, and other governments 1,343,809 737,032 712,462 2,793,303 Total net position 1,343,809 $ 737,032 $ 712,462 $ 2,793,303 $

CITY OF CHOWCHILLA

COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET POSITION

CUSTODIAL FUNDS
JUNE 30, 2022
88 Community
Facilites District
Greenhills
Assessment
District
Pheasant Run
Assessment
District
Total Custodial
Funds

ADDITIONS
Property tax collections $ 605,390 578,593 $ 396,718 $ 1,580,701 $ Investment earnings 1,342 2,025 1,352 4,719
Total additions 606,732 580,618 398,070 1,585,420

DEDUCTIONS
Payments to bondholders $ 531,488 555,136 $ 388,438 $ 1,475,062 $ Adminstrative expenses 25,851 73,264 13,669 112,784
Total deductions 557,339 628,400 402,107 1,587,846
Change in fiduciary net position (47,782) 49,393 (4,037) (2,426) Net position - beginning 687,639 1,391,591 716,499 2,795,729 Net position - ending $ 737,032 1,343,809 $ 712,462 $ 2,793,303 $ March 30, 2022
To the Honorable Mayor and City Council
City of Chowchilla, California
We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Chowchilla, California (the City) for the year ended June 30, 2022. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards (and, if applicable, Government Auditing Standards and the Uniform Guidance), as well as certain information related to the planned scope and timing of our audit.

We have communicated such information in our letter to you dated February 16, 2023. Professional standards also require that we communicate to you the following information related to our audit.

Significant Audit Matters
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in Note 1 to the financial statements. As described in Note 15 to the financial statements, the City changed accounting policies related to leases by adopting Statement of Governmental Accounting Standards (GASB Statement) No. 87, Leases, in 2022. Accordingly, the cumulative effect of the accounting change as of the beginning of the year is reported in the financial statements as described in Note 15. We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period.

Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the City’s financial statements were:

Management’s estimate of the allowance for doubtful accounts is based on historical revenues and analysis of the collectability of individual accounts. We evaluated the key factors and assumptions used to develop the allowance for doubtful accounts estimate in determining that it is reasonable in relation to the financial statements taken as a whole.

Management’s estimate of the City-Wide Cost Allocation Plan, as approved in the annual budget, is based on past history, planned future activity, and other factors significant to the City’s operations that are required to support each operating department. We evaluated the methodology used by management to create this estimate and believe that it is reasonable in relation to the financial statements taken as a whole.

Management’s estimate of the net pension liability and related deferrals is based on actuarial valuations which include significant assumptions regarding discount rate, inflation, payroll growth, projected salary increases and investment rate of return. We evaluated the key factors and assumptions used to develop the liability and related deferrals in determining that it is reasonable in relation to the financial statements taken as a whole.

Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users. The most sensitive disclosure affecting the financial statements was:

The disclosure of the City’s defined benefit pension plan in Note 10 to the financial statements provides detailed information on the pension plan including a description of the plan, benefits provided, contributions, calculation of the net pension liability/asset and related deferrals, actuarial assumptions, and discount rate used to measure the net pension liability/asset.

The financial statement disclosures are neutral, consistent, and clear.

Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing our audit.

Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. The attached schedule (“Uncorrected Audit Adjustments”) summarizes uncorrected misstatements of the financial statements. Management has determined that their effects are immaterial, both individually and in the aggregate, to the financial statements taken as a whole. The uncorrected misstatements or the matters underlying them could potentially cause future period financial statements to be materially misstated, even though, in our judgment, such uncorrected misstatements are immaterial to the financial statements under audit. The adjustments noted in the “Corrected Material Audit Adjustments” attachment represent the material misstatements detected and corrected as a result of our audit.

Disagreements with Management
For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor’s report. We are pleased to report that no such disagreements arose during the course of our audit.

Management Representations
We have requested certain representations from management that are included in the management representation letter dated March 30, 2023.

Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to the City’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants.

Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the City’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention.

In our audit engagement letter previously provided to you, we communicated the following significant risks of material misstatement (significant risks) as part of our audit planning:
 Management override of controls
 Improper revenue recognition due to fraud
During the course of the audit, we identified additional significant risks:
 Capital assets and related activity is inaccurate, incomplete, or otherwise misstated due to the City’s conversion to a new accounting software
 Implementation of GASB 87
 Transfers of restricted funds are not ultimately used for the proper purpose These risks were addressed within our audit procedures and any findings related to these risks have been noted in our report dated March 30, 2023.

Other Matters
We applied certain limited procedures to the management’s discussion and analysis, budgetary comparison schedules, proportionate share of net pension liability and schedule of contributions, which are required supplementary information (RSI) that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We did not audit the RSI and do not express an opinion or provide any assurance on the RSI.

We were engaged to report on the combining nonmajor fund financial statements and the related budgetary comparison schedules, which accompany the financial statements but are not RSI. With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves.

Restriction on Use
This information is intended solely for the information and use of the City Council and management of the City of Chowchilla, California, and is not intended to be, and should not be, used by anyone other than these specified parties.

Very truly yours,
Client: CHOWCHILLA, CITY OF
Engagement: 6-30-22 Audit
Current Period: 06/30/2022
Workpaper: Attachment: Uncorrected Audit Adjustments
Account Description Misstatement Workpaper Reference Debit Credit Net Income
Effect
PJE01 Known Classification EX200
To propose adjustment of Johnson Controls Inc.Contract services for prepayment of expense 240-0100-0291 Prepaid Expense (PPC - CREATED) 15,112.00 0.00 240-5705-3364 Contract Services 0.00 15,112.00
Total 15,112.00 15,112.00 15,112.00
PJE02 Known Classification C120
To correct cash balances.
100-0100-0200 Cash - Combined Fund 0.00 26,732.00
100-1600-8790 Misc Reimbursement 26,732.00 0.00
Total 26,732.00 26,732.00 (26,732.00)
PJE03 Projected Misstatement L405
To post estimated lease liability for farm lease.
100-0100-xxx1 Lease Receivable 47,652.00 0.00
100-0100-xxx2 Unavailable Lease Revenue 0.00 47,652.00
Total 47,652.00 47,652.00 0.00
GRAND TOTAL 89,496.00 89,496.00 (11,620.00)
Client: CHOWCHILLA, CITY OF
Engagement: 6-30-22 Audit
Current Period: 06/30/2022
Workpaper: Attachment: Corrected Material Audit Adjustments Account Description
Workpaper
Reference Debit Credit Net Income Effect
AJE07
To correct depreciation expense/accumulated depreciation 280-7605-6000 Depreciation Expense 0.00 130,264.00
280-0100-0298 Accumulated Depreciation 130,264.00 0.00
240-5705-6000 Depreciation Expense 0.00 2,105.87
240-0100-0298 Accumulated Depreciation 2,105.87 0.00
Total 132,369.87 132,369.87 132,369.87
AJE09
To post lease liability for implementation of GASB 87
601-0200-0494 Lease Liability 0.00 61,739.35
601-0100-0288 Right-to-use Leased Asset - Buildings 173,689.00 0.00 601-0100-0287 Accumulated Amortization 0.00 134,730.58
601-0300-0608 Prior Period Adjustment 22,780.93 0.00
Total 196,469.93 196,469.93 0.00
AJE14
To Accrue Payroll for 6/26/33-6/30/22
100-1610-1010 Salaries/Wages 1,957.60 0.00
100-1710-1010 Salaries/Wages 2,933.16 0.00
100-1720-1010 Salaries/Wages 6,310.04 0.00
100-2610-1010 Salaries/Wages 22,726.75 0.00
100-2610-1060 Overtime 2,347.50 0.00
100-2610-1090 Shift Diff/Special Assignment 203.65 0.00 100-2705-1010 Salaries/Wages 1,308.96 0.00
100-4705-1010 Salaries/Wages 4,364.50 0.00
100-6620-1010 Salaries/Wages 1,632.84 0.00
100-6620-1060 Overtime 170.41 0.00
100-6625-1010 Salaries/Wages 1,152.66 0.00
702-0200-0430 Net Payroll Payable 0.00 46,741.52
200-3805-1010 Salaries/Wages 164.28 0.00
702-0200-0430 Net Payroll Payable 0.00 164.28
240-5705-1010 Salaries/Wages 4,312.14 0.00
240-5705-1060 Overtime 212.39 0.00
702-0200-0430 Net Payroll Payable 0.00 4,524.53
280-7605-1010 Salaries/Wages 3,433.99 0.00
305-3620-1060 Overtime 95.99 0.00
305-3620-1080 Standby 172.79 0.00
702-0200-0430 Net Payroll Payable 0.00 3,702.77
325-3705-1010 Salaries/Wages 2,686.54 0.00
702-0200-0430 Net Payroll Payable 0.00 2,686.54
340-2610-1010 Salaries/Wages 3,911.15 0.00
340-2610-1060 Overtime 434.50 0.00
340-2610-1090 Shift Diff/Special Assignment 9.83 0.00
340-2705-1010 Salaries/Wages 830.29 0.00
340-2705-1060 Overtime 579.90 0.00
702-0200-0430 Net Payroll Payable 0.00 5,765.67
601-3615-1010 Salaries/Wages 1,244.70 0.00
702-0200-0430 Net Payroll Payable 0.00 1,244.70
602-1715-1010 Salaries/Wages 2,136.03 0.00
702-0200-0430 Net Payroll Payable 0.00 2,136.03
100-1610-2010 Medicare Tax 24.73 0.00
100-1710-2010 Medicare Tax 41.53 0.00
100-1720-2010 Medicare Tax 83.58 0.00
100-2610-2010 Medicare Tax 333.35 0.00
100-2705-2010 Medicare Tax 19.01 0.00
100-4705-2010 Medicare Tax 59.15 0.00
100-6620-2010 Medicare Tax 22.89 0.00
100-6625-2010 Medicare Tax 16.08 0.00
200-3805-2010 Medicare Tax 2.27 0.00
220-3650-2010 Medicare Tax 5.01 0.00
240-5705-2010 Medicare Tax 59.30 0.00
280-7605-2010 Medicare Tax 69.87 0.00
305-3620-2010 Medicare Tax 47.23 0.00
305-3620-2010 Medicare Tax 3.89 0.00
325-3705-2010 Medicare Tax 36.42 0.00
340-2610-2010 Medicare Tax 58.01 0.00
340-2705-2010 Medicare Tax 18.93 0.00
601-3615-2010 Medicare Tax 16.57 0.00
602-1715-2010 Medicare Tax 28.34 0.00
702-0200-0411 Medicare Tax Liability 0.00 967.98
280-7605-2050 Unemployment Ins 2.51 0.00
702-0200-0416 State Unemployment Ins 0.00 18.48
280-7605-2050 Unemployment Ins 0.06 0.00
702-0200-0416 State Unemployment Ins 0.00 0.45
702-0200-0430 Net Payroll Payable 25,867.92 0.00
702-0200-0402 State Tax Withheld 0.00 5,978.11
702-0200-0401 Federal Tax Withheld 0.00 15,123.35
702-0200-0411 Medicare Tax Liability 0.00 2,710.34
702-0200-0407 State Disability Ins 0.00 2,056.12
702-0200-0430 Net Payroll Payable 168.34 0.00
702-0200-0413 PERS 457 0.00 168.34
702-0200-0430 Net Payroll Payable 75.89 0.00
702-0200-0413 PERS 457 0.00 75.89
702-0200-0430 Net Payroll Payable 107.14 0.00
702-0200-0430 Net Payroll Payable 4.29 0.00
100-2610-2061 PARS-Supplemental Retirement 5.71 0.00
240-5705-2061 PARS-Supplemental Retirement 7.14 0.00
280-7605-2061 PARS-Supplemental Retirement 2.62 0.00
702-0200-0433 PARS-Supplemental Retirement 0.00 18.08
702-0200-0430 Net Payroll Payable 50.62 0.00
702-0200-0433 PARS-Supplemental Retirement 0.00 50.62
702-0200-0430 Net Payroll Payable 5,431.39 0.00
702-0200-0403 PERS Liability 0.00 5,431.39
100-1610-2060 Retirement-Employer Portion 217.07 0.00
100-1705-2060 Retirement-Employer Portion 90.71 0.00
100-1710-2060 Retirement-Employer Portion 219.10 0.00
100-1720-2060 Retirement-Employer Portion 633.29 0.00
100-2610-2060 Retirement-Employer Portion 482.37 0.00
100-4705-2060 Retirement-Employer Portion 443.87 0.00
100-6620-2060 Retirement-Employer Portion 167.86 0.00
100-6625-2060 Retirement-Employer Portion 86.10 0.00
200-3805-2060 Retirement-Employer Portion 16.35 0.00
220-3650-2060 Retirement-Employer Portion 40.08 0.00
240-5705-2060 Retirement-Employer Portion 401.39 0.00
280-7605-2060 Retirement-Employer Portion 444.83 0.00
305-3620-2060 Retirement-Employer Portion 299.19 0.00
325-3705-2060 Retirement-Employer Portion 251.60 0.00
340-2610-2060 Retirement-Employer Portion 135.73 0.00
601-3615-2060 Retirement-Employer Portion 147.83 0.00
100-2705-2063 Retire-Employer Portion Safety 141.37 0.00 280-7605-2063 Retire-Employer Portion Safety 15.71 0.00 340-2705-2063 Retire-Employer Portion Safety 86.97 0.00 100-2610-2063 Retire-Employer Portion Safety 2,959.43 0.00 702-0200-0403 PERS Liability 0.00 7,518.63
702-0200-0430 Net Payroll Payable 193.88 0.00
702-0200-0430 Net Payroll Payable 26.57 0.00
702-0200-0403 PERS Liability 0.00 26.57
702-0200-0430 Net Payroll Payable 265.53 0.00
100-0100-1900 Claim On Cash 0.00 52,853.41
200-0100-1900 Claim On Cash 0.00 182.90
220-0100-1900 Claim On Cash 0.00 45.09
240-0100-1900 Claim On Cash 0.00 4,992.36
280-0100-1900 Claim On Cash 0.00 3,969.59
305-0100-1900 Claim On Cash 0.00 621.70
325-0100-1900 Claim On Cash 0.00 2,974.56
340-0100-1900 Claim On Cash 0.00 6,068.01
601-0100-1900 Claim On Cash 0.00 1,409.10
602-0100-1900 Claim On Cash 0.00 2,372.94
702-0100-1900 Claim On Cash 75,489.66 0.00
602-1715-2060 Retirement-Employer Portion 208.57 0.00
100-1705-1010 Salaries/Wages 1,124.29 0.00
100-1705-1080 Standby 154.36 0.00
100-6610-1010 Salaries/Wages 354.84 0.00
100-1705-2010 Medicare Tax 16.67 0.00
100-6610-2010 Medicare Tax 5.15 0.00
100-6610-2050 Unemployment Ins 15.97 0.00
100-6610-2050 Unemployment Ins 0.39 0.00
702-0200-0410 Wages Levies 0.00 107.14
702-0200-0410 Wages Levies 0.00 4.29
305-3620-2061 PARS-Supplemental Retirement 2.61 0.00
100-6610-2060 Retirement-Employer Portion 26.51 0.00
702-0200-0404 Section 125 Cafeteria Plan 0.00 191.22
702-0200-0410 Wages Levies 0.00 265.53
Total 183,168.23 183,168.23 (75,487.00)
130 S Second Street, Chowchilla, CA 93610
Telephone: (559) 665-8615 www.CityOfChowchilla.org
April 6, 2023
Price, Paige and Company
570 N. Magnolia Ave. Ste. 100
Clovis, CA 93611
This representation letter is provided in connection with your audit conducted under Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) of the City of Chowchilla, California’s (the City) Compliance with the requirements of the Uniform Guidance for its federal awards, as of June 30, 2022.

Certain representations in this letter are described as being limited to matters that are material. Items are considered material, regardless of size, if they involve an omission or misstatement of accounting information that, in light of surrounding circumstances, makes it probable that the judgment of a reasonable person relying on the information would be changed or influenced by the noncompliance.

We confirm, to the best of our knowledge and belief, as of the date of this letter, the following representations made to you during your audit.
1) With respect to federal award programs:
a) We have fulfilled our responsibilities, as set out in the terms of the audit engagement letter, including our responsibility for the preparation and fair presentation of the schedule of expenditures of federal awards (SEFA) and notes in accordance with the Uniform Guidance. b) We are responsible for understanding and complying with and have complied with, the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), including requirements relating to preparation of the schedule of expenditures of federal awards. c) We acknowledge our responsibility for preparing and presenting the schedule of expenditures of federal awards (SEFA) and related disclosures in accordance with the requirements of the Uniform Guidance, and we believe the SEFA, including its form and content, is fairly presented in accordance with the Uniform Guidance. The methods of measurement or presentation of the SEFA have not changed from those used in the prior period and we have disclosed to you any significant assumptions and interpretations underlying the measurement or presentation of the SEFA. d) If the SEFA is not presented with the audited financial statements, we will make the audited financial statements readily available to the intended users of the SEFA no later than the date we issue the SEFA and the auditor’s report thereon.
e) We have identified and disclosed to you all of our government programs and related activities subject to the Uniform Guidance compliance audit, and have included in the SEFA, expenditures made during the audit period for all awards provided by federal agencies in the form of federal awards, federal cost-reimbursement contracts, loans, loan guarantees, property (including donated surplus property), cooperative agreements, interest subsidies, insurance, food commodities, direct appropriations, and other direct assistance.
f) We are responsible for understanding and complying with, and have complied with, the requirements of federal statutes, regulations, and the terms and conditions of federal awards related to each of our federal programs and have identified and disclosed to you the requirements of federal statutes, regulations, and the terms and conditions of federal awards that are considered to have a direct and material effect on each major program. g) We are responsible for establishing, designing, implementing, and maintaining, and have established, designed, implemented, and maintained, effective internal control over compliance for federal programs that provides reasonable assurance that we are managing our federal awards in compliance with federal statutes, regulations, and the terms and conditions of federal awards that could have a material effect on our federal programs. We believe the internal control system is adequate and is functioning as intended.
h) We have made available to you all federal awards (including amendments, if any) and any other correspondence with federal agencies or pass-through entities relevant to federal programs and related activities.
i) We have received no requests from a federal agency to audit one or more specific programs as a major program.
j) We have complied with the direct and material compliance requirements (except for noncompliance disclosed to you), including when applicable, those set forth in the OMB Compliance Supplement (including its addendum), relating to federal awards and confirm that there were no amounts questioned and no known noncompliance with the direct and material compliance requirements of federal awards.
k) We have disclosed any communications from federal awarding agencies and pass-through entities concerning possible noncompliance with the direct and material compliance requirements, including communications received from the end of the period covered by the compliance audit to the date of the auditor’s report.
l) We have disclosed to you the findings received and related corrective actions taken for previous audits, attestation engagements, and internal or external monitoring that directly relate to the objectives of the compliance audit, including findings received and corrective actions taken from the end of the period covered by the compliance audit to the date of the auditor’s report. m) Amounts claimed or used for matching were determined in accordance with relevant guidelines in OMB‘s Uniform Guidance (2 CFR part 200, subpart E).
n) We have disclosed to you our interpretation of compliance requirements that may have varying interpretations.
o) We have made available to you all documentation related to compliance with the direct and material compliance requirements, including information related to federal program financial reports and claims for advances and reimbursements.
p) We have disclosed to you the nature of any subsequent events that provide additional evidence about conditions that existed at the end of the reporting period affecting noncompliance during the reporting period.
q) There are no such known instances of noncompliance with direct and material compliance requirements that occurred subsequent to the period covered by the auditor’s report. r) No changes have been made in internal control over compliance or other factors that might significantly affect internal control, including any corrective action we have taken regarding significant deficiencies or material weaknesses in internal control over compliance, subsequent to the period covered by the auditor’s report.
s) Federal program financial reports and claims for advances and reimbursements are supported by the books and records from which the financial statements have been prepared. t) The copies of federal program financial reports provided you are true copies of the reports submitted, or electronically transmitted, to the respective federal agency or pass-through entity, as applicable.
u) We have charged costs to federal awards in accordance with applicable cost principles. v) We are responsible for and have accurately prepared the summary schedule of prior audit findings to include all findings required to be included by the Uniform Guidance, and we have provided you with all information on the status of the follow-up on prior audit findings by federal awarding agencies and pass-through entities, including all management decisions. w) We are responsible for and have ensured the reporting package does not contain protected personally identifiable information.
x) We are responsible for and have accurately prepared the auditee section of the Data Collection Form as required by the Uniform Guidance.
y) We are responsible for taking corrective action on each audit finding of the compliance audit and have developed a corrective action plan that meets the requirements of the Uniform Guidance. z) In regards to the preparation of the SEFA and notes performed by you, we have – i) Assumed all management responsibilities.
ii) Designated an individual within senior management, who has suitable skill, knowledge, or experience to oversee the services.
iii) Evaluated the adequacy and results of the services performed. iv) Accepted responsibility for the results of the services. v) Ensured that the City’s data and records are complete and received sufficient information to oversee the services.

Signature:

Title: City Administrator

CITY OF CHOWCHILLA

CALIFORNIA

SINGLE AUDIT REPORT

FOR THE YEAR ENDED
JUNE 30, 2022

CITY OF CHOWCHILLA

CALIFORNIA

SINGLE AUDIT REPORT
JUNE 30, 2022

TABLE OF CONTENTS
Page
Independent Auditor’s Report on Internal Control Over
Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in
Accordance with Government Auditing Standards ................................................................................... 1 Independent Auditor’s Report on Compliance for Each Major Program and on Internal Control Over Compliance; and Report on the Schedule of Expenditures of Federal Awards Required by the Uniform Guidance ............................................................................................................................... 3 Schedule of Expenditures of Federal Awards ............................................................................................. 6 Notes to the Schedule of Expenditures of Federal Awards ........................................................................ 7 Schedule of Findings and Questioned Costs .............................................................................................. 8 Summary Schedule of Prior Audit Findings .............................................................................................. 10 Corrective Action Plan ............................................................................................................................... 11 1 INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER

FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS

BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN

ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
To the Honorable Mayor and City Council
City of Chowchilla, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the businesstype activities, each major fund, and the aggregate remaining fund information of the City of Chowchilla (the City), as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated March 30, 2023, except for the report on the schedule of expenditures of federal awards which was dated April 6, 2023.

Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

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 and therefore, material weaknesses or significant deficiencies may exist that were not identified. We identified a deficiency in internal control, described in the accompanying schedule of findings and questioned costs as item 2022-001 that we consider to be a material weakness.

Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements.

However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. 2 City’s Response to Findings
Government Auditing Standards requires the auditor to perform limited procedures on the City’s response to the findings identified in our audit and described in the accompanying schedule of findings and questioned costs.

The City’s response was not subjected to the other auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on the response.

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

Clovis, California
April 6, 2023
3 INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR

EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER
COMPLIANCE; AND REPORT ON THE SCHEDULE OF EXPENDITURES

OF FEDERAL AWARDS REQUIRED BY THE UNIFORM GUIDANCE
To the Honorable Mayor and City Council
City of Chowchilla, California
Report on Compliance for Each Major Federal Program
Opinion on Each Major Federal Program
We have audited the City of Chowchilla, California’s (the City) compliance with the types of compliance requirements identified as subject to audit in the OMB Compliance Supplement that could have a direct and material effect on each of City’s major federal programs for the year ended June 30, 2022. The City’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs.

In our opinion, the City complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2022.

Basis for Opinion on Each Major Federal Program
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Our responsibilities under those standards and the Uniform Guidance are further described in the Auditor’s Responsibilities for the Audit of Compliance section of our report.

We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for each major federal program. Our audit does not provide a legal determination of the City’s compliance with the compliance requirements referred to above.

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

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

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit.

Report on Internal Control over Compliance
A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.

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

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

The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. 5 Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements.

We issued our report thereon dated March 30, 2023, which contained unmodified opinions on those financial statements. Our audit was performed for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by the Uniform Guidance and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditures of federal awards is fairly stated in all material respects in relation to the basic financial statements as a whole.

Clovis, California
April 6, 2023
See the accompanying notes to the schedule of expenditures of federal awards and the independent auditor’s report on compliance for each major program and on internal control over compliance required by the Uniform Guidance. 6 CITY OF CHOWCHILLA

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2022
Federal
Assistance Pass-Through
Listing Grantor's Federal
Number Number Expenditures
U.S. Department of Housing and Urban Development
Passed-through the California Department of Housing and Community Development:

Community Development Block Grant 14.228 Program Income 595 $ Community Development Block Grant 14.228 20-CDBG-00094 4,995 Community Development Block Grant 14.228 20-CDBG-CV-2-3-00037 4,110 Community Development Block Grant 14.228 20-CDBG12078 13,493 COVID-19 - Community Development Block Grant 14.228 20-CDBG-ED-10010 416,041 HOME Investment Partnership Program 14.239 Program Income 6,852 Subtotal pass-through California Department of Housing and Community Development 446,086 Total U.S. Department of Housing and Urban Development 446,086 U.S. Department of Transportation
Passed-through the California Office of Traffic Safety:

Federal Aviation Administration For Airport Improvements 20.106 3-06-0043-010-2018 30,800 COVID-19 - Federal Aviation Administration For Airport Improvements 20.106 3-06-0043-010-2018 30,000 Subtotal pass-through California Office of Traffic Safety 60,800 Passed-through the California Department of Transportation:

Highway Planning and Construction Cluster
Berenda Slough Bridge Project 20.205 06-MAD-0-CHW Project #CML5258(038) 709 Riverside, 8th & Kings Pedestrian Improvement 20.205 06-MAD-0-CHW Project #CML-5258(042) 66,524 Alley Paving Project 20.205 06-MAD-0-CHW Project #CML-5258(041) 622 Bridge Preventive Maintenance 20.205 06-MAD-0-CHW Project #CML5258(039) 143 Subtotal Highway Planning and Construction Cluster 67,998 Section 5311 - Transit Operating Assistance - Formula Grants for Rural Areas 20.509 64BO19-00920 72,947 COVID-19 - CARES Act Phase 1 - 5311 - Formula Grants for Rural Areas 20.509 64BVO20-01291 158,552 Subtotal pass-through California Department of Transportation 231,499 Total U.S. Department of Transportation 360,297
U.S. Department of Treasury
Passed-through the California Department of Finance:

COVID-19 - Coronavirus State and Local Fiscal Recovery Funds American Rescue Plan Act 21.027 OIG-CA-20-021 4,380,142 Subtotal pass-through California Department of Finance 4,380,142 Pass-through State Water Resources Control Board:

California Arrearage Program 21.027 CA2010001 126,807
Subtotal pass-through State Water Resources Control Board 126,807 Total U.S. Department of The Treasury 4,506,949
U.S. Department of Homeland Security
Direct Award:

Staffing for Adequate Fire and Emergency Response (SAFER) 97.083 N/A 13,383 Total U.S. Department of Justice 13,383
Total Expenditures of Federal Awards $ 5,326,715
Federal Grantor/Pass-Through Grantor/Program Title
7 CITY OF CHOWCHILLA

NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED JUNE 30, 2022
NOTE 1 – GENERAL
The accompanying Schedule of Expenditures of Federal Awards (SEFA) presents the activity of all federal award programs of the City of Chowchilla, California (the City). Federal awards received directly from federal agencies, as well as federal awards passed through other government agencies are included in the schedule.

The information in this SEFA is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance).

NOTE 2 – BASIS OF ACCOUNTING
The accompanying SEFA is presented using the modified accrual basis of accounting except for programs recorded in the City’s enterprise funds, which are presented using the accrual basis of accounting, which is described in Note 1 of the City’s basic financial statements.

NOTE 3 – RELATIONSHIP TO BASIC FINANCIAL STATEMENTS
Federal award expenditures agree or can be reconciled with the amounts reported in the City’s basic financial statements.

NOTE 4 – INDIRECT COST RATE
The City has elected not to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance.

NOTE 5 – PASS THROUGH ENTITY IDENTIFYING NUMBERS
The City has included in the SEFA the identifying numbers for pass-through grants when such information has been provided by the pass-through entities. For grants that the City was not provided with such information by the pass-through entities, the City has indicated the pass-through identifying number “N/A” to disclose the information was not applicable or not available.
8 CITY OF CHOWCHILLA

SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2022
SECTION I – SUMMARY OF AUDITOR’S RESULTS

FINANCIAL STATEMENTS
Type of auditor's report issued: Unmodified
Internal control over financial reporting:

Material weaknesses identified? X Yes No
Significant deficiencies identified? Yes X None reported Noncompliance material to financial statements noted? Yes X No

FEDERAL AWARDS
Internal control over major programs:

Material weaknesses identified? Yes X No
Significant deficiencies identified? Yes X None reported Type of auditor's report issued on compliance for
major programs: Unmodified
Any audit findings disclosed that are required
to be reported in accordance with
2 CFR 200.516(a)? Yes X No
IDENTIFICATION OF MAJOR PROGRAMS:

Federal Assistance Listing Number

21.027 COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Dollar threshold used to distinguish
between Type A and Type B programs:

Auditee qualified as low-risk auditee? Yes X No
$750,000
Name of Federal Program or Cluster
9 CITY OF CHOWCHILLA

SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2022
(Continued)
SECTION II – FINANCIAL STATEMENT FINDINGS
Finding 2022-001 – Financial Close and Reporting (Material Weakness) Condition: The City’s year-end financial closing process was not complete or accurate and did not allow for the timely closing of the City’s financial records in accordance with applicable standards.

Criteria: As described in the California State Controller’s “2015 Internal Control Guidelines” an effective internal control system and timely financial reporting of all financial activity provides reasonable assurance for the safeguarding of assets, the reliability of financial information, and compliance with laws and regulations. This includes the design and implementation of control systems that ensure accurate financial reporting in accordance with applicable standards and regulations.

Cause: Contributing factors include the City’s transition to a new accounting system during the year ended June 30, 2022, and transition in managerial staff in the finance department.

Effect: Various adjustments were required to correct the city’s general ledger during our audit, including the following:
1) Governmental receivables received outside of the period of availability were not reclassified as unavailable revenue, resulting in an overstatement of revenues. 2) Depreciation expense for both Governmental Activities and Business-Type Activities capital assets was not calculated correctly based on the methodology used by the city, resulting in an overstatement of expenses. 3) Various other adjustments were required to reconcile the City’s depreciation schedule to the City’s general ledger.
4) Reconciled bank balances were not reconciled to the City’s general ledger (approximately $26k when compared to the pooled cash accounts). 5) A long-term lease that met the criteria under GASB87 was not identified by the City. 6) The City’s Schedule of Expenditures of Federal Awards did not include approximately $440k of federal expenditures.

The net effect of our audit adjustments to correct these errors was a decrease of approximately $350,000 in fund balance/net position across the City’s funds.

Recommendation: We recommend that the City review its current design of controls (processes and procedures) to determine what changes are required to reduce the likelihood of future misstatements in the year-end financial close. Additional considerations in the design should include the explicit review and approval of year-end schedules and other financial close and reporting processes to reduce the likelihood of misstatement due to unintentional error.

Management’s
Response: See Corrective Action Plan.

SECTION III – FEDERAL AWARD FINDINGS
None reported.
10 CITY OF CHOWCHILLA

SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
FOR THE YEAR ENDED JUNE 30, 2022

FINANCIAL STATEMENT FINDINGS
None reported.

FEDERAL AWARD FINDINGS
None reported.
11

Chowchilla City CouncilApril 11, 2023

Chowchilla City Council
April 11, 2023