Cotati City Council
January 10, 2023

AGENDA

JOINT MEETING OF THE COTATI CITY COUNCIL AND THE SUCCESSOR

AGENCY TO THE FORMER COTATI COMMUNITY REDEVELOPMENT AGENCY City Council Chamber, City Hall 201 W. Sierra Avenue
Tuesday January 10, 2023
6:00 PM REGULAR MEETING
The Cotati City Council welcomes you to its meetings that are generally scheduled for the 2nd and 4th Tuesday of every month. Your interest and participation are encouraged and appreciated.

City Council meeting agendas, minutes, and recordings are posted on the City’s Meeting Portal at www.cotaticity.org.

For questions about the agenda of to receive the City Council agenda by email, contact the Deputy City Clerk at [email protected] or (707) 665-3622.

Cotati City Council Meetings will be conducted in person in the Council Chamber, as well as virtually through Zoom Online video conferencing, and will be available to watch or listen in the following ways:

1. Using the following online livestream meeting portal link: http://cotaticityca.iqm2.com/citizens/default.aspx;

2. Cable T.V. Broadcast, local channel 28
Members of the public can participate in the meeting online by selecting “Join a Meeting” at zoom.us. The credentials for joining the meeting are provided below:

Webinar ID: 846 7553 8573
Passcode: 955127
If you do not have the ability to join online, but would like to participate in the meeting, you can call into the meeting using your telephone, by dialing one of the following numbers and entering the meeting credentials:
+1 (669) 900-6833 or +1 (346) 248-7799 or +1 (253) 215-8782 or +1 (301) 715-8592 or +1 (312) 626-6799 or +1 (929) 436-2866
Attendees may join the meeting any time after 5:45pm. Attendees will be muted until they are called upon for Public Comment. To make a public comment, use the “raise hand” icon on your smart device or desktop computer, or dial *9 if you are using just your telephone. Please listen carefully for the Mayor or City Clerk to address you by name (or phone number) and for the audible Zoom notification that you have been unmuted. Once you begin your public comment, your three minutes will begin.

If you would prefer to submit your public comment in writing, please email your comments to [email protected]. If you are commenting on a specific agenda item or items, please state the agenda item number(s) in the subject line of the email. All comments received via email will be provided to the City Council or Planning Commission in writing and included as part of the record of the meeting. ###
Notice is hereby given that Council may discuss and/or take action on any or all of the items listed on this agenda.

Any writings or documents provided to a majority of the Cotati City Council regarding any item on this agenda will be made available for inspection in the online Meeting Portal at www.cotaticity.org and in the City Manager’s office located at 201 West Sierra Ave, Cotati, CA during the City’s posted business hours.

Disabled Accommodations: Upon request, this agenda will be made available in appropriate formats to persons with disabilities as required by Section 202 of the Americans with Disabilities Act of 1990. Any person with a disability who Cotati City Council Agenda January 10, 2023

requires a modification or accommodation in order to participate in a meeting should contact the Deputy City Clerk at [email protected], or (707) 665-3622, at least 48 hours in advance of the meeting.

Closed Captioning/Live Transcription: This meeting will be transcribed live via the Zoom platform. Zoom attendees running Zoom version 5.0.2 or higher will be able to see the transcription at the bottom of their personal Zoom screen.

Learn more at https://support.zoom.us by searching “closed captions.” Rules of Decorum: To avoid distraction, the following meeting etiquette shall be enforced. • Silence electronic devices, including cell phones.
• Audience members are advised to keep conversations to a minimum of conduct them outside the building. • Photographs or video recordings using tri-pods or other means that would be distracting are to be taken only from the designated media area.
• The Presiding Officer shall request that the audience withhold expressions of support or opposition for speakers in the interest of time and to encourage the full expression of differing views. (City Council Policy 2021-01 III.B.1.)
Public Comment (Action Items): Public comment on any one agenda item where the City Council will be taking some action is limited to no more than three (3) minutes per person. Action items are typically designated on the agenda title.

Public Comment (Non-Action Items): Public comment on non-action agenda items shall be received during the designated portion of the agenda. Comments shall be limited to no more than three (3) minutes for all non-action agenda items.

Waiver Warning: If you challenge decisions/direction of the City Council of the City of Cotati in court, you may be limited to raising only those issues you or someone else raised at public hearing(s) described in this agenda, or in written correspondence delivered to the City of Cotati at, or prior to, the public hearing(s).

City Council meetings are conducted according to City Council Policy 2021-01: City Council Rules. This policy is available for inspection in the online Meeting Portal at www.cotaticity.org and in the City Manager’s office located at 201 West Sierra Ave, Cotati, CA, during the City’s posted business hours.

Those wishing to address the Council are asked to complete a speaker card and give it to the Deputy City Clerk. When you are called, step to the podium and state your name and address for the record. Persons wishing to address the Council are not required to identify themselves or complete a speaker card; (Gov’t Code § 54953.3); however, this information assists the Mayor by ensuring that all persons wishing to address the Council are recognized and it assists the Deputy City Clerk in preparing the City Council meeting minutes.

COUNCILMEMBER PARTICIPATION VIA TELECONFERENCE
Councilmember Ben Ford will participate via teleconference at Villa del Palmar Carretera a Punta Sam Km. 5.2 Mza 9 Lote 3 SM-2, Zona Continental de Costa Mujeres. Cancun , Q.R. , 77400, Mexico pursuant to Government Code Section 54953(b). Members of the public may attend and participate at either the Council Chambers or via teleconference from the location referenced above. This agenda shall be posted at both locations.

1. CALL TO ORDER

2. ROLL CALL

3. PLEDGE OF ALLEGIANCE

4. APPROVAL OF MINUTES AND NOTICE OF WAIVING OF READING OF ALL

RESOLUTIONS AND ORDINANCES INTRODUCED AND/OR ADOPTED

UNDER THIS AGENDA (ACTION)
Cotati City Council Agenda January 10, 2023

A. COTATI CITY COUNCIL - REGULAR MEETING - DEC 13, 2022 6:00 PM B. COTATI CITY COUNCIL - CLOSED SESSION - DEC 26, 2022 4:00 PM

5. ANNOUNCEMENTS
A. Meeting Orientation for New Attendees/Viewers. In conformance with the Brown Act and the adopted City Council Rules, the meeting agenda includes items labeled as Action Items, where the City Council will consider the item and citizens are afforded the opportunity to provide comments relevant to the item being discussed. The meeting agenda also includes a Citizens Business item, which is the designated place on the agenda where citizens have the right to say whatever they wish.

The City Council may, or may not, choose to respond to comments, as the Government Code allows. However, if the City Council declines to respond, it should not be perceived as giving credence to or agreeing with any statements that the City Council or its members believe are incorrect, misinformed or purposefully biased.

B. Measure S supports police services, a variety of recreation programs for all ages, and the maintenance of our streets, parks, and public buildings. See details on the web at cotaticity.org
C. Citizens interested in receiving City of Cotati community alerts via text or email are encouraged to sign up with Nixle by downloading the Everbridge app from the IOS or Android app store or by texting your zip code (94931) to 888777.

D. Like always, we love to hear from you, so please feel free to contact the City at 707- 792-4600 or [email protected]. If you have a non-emergency issue after normal business hours, you can contact us at 707-792-4611 and of course if you have an emergency, please contact 9-1-1. Continue to look for updates on the City's website and social media channels available on Facebook, Instagram, Nixle, and Nextdoor.

6. APPROVAL OF FINAL AGENDA (ACTION)

7. CITIZEN BUSINESS AND PUBLIC COMMENT FOR CONSENT CALENDAR ITEMS
Any member of the public wishing to speak to the Council on any item(s) listed on the Consent Calendar or any matter(s) not listed on the agenda that are within the subject matter jurisdiction of the Council may do so at this time. Pursuant to the Brown Act, the Council is not allowed to consider issues or take action on any item not listed on the agenda during this period. Pursuant to City Council Policy 2021-01, comments of any member of the public are normally restricted to a total of three (3) minutes in length per person for matters not on the agenda and a total of three (3) minutes per person in length for any and all items on the Consent Calendar.

The Mayor may extend the time limit for a reasonable time where a disability accommodation has been requested.

8. CONSENT CALENDAR (ACTION)
Cotati City Council Agenda January 10, 2023

A. RECEIVE AND FILE THE FISCAL YEAR 2021/22 AUDITED ANNUAL

COMPREHENSIVE FINANCIAL REPORT (ACFR) FOR THE CITY OF
COTATI
It is recommended that the City Council receive and file the Fiscal Year 2021/22 audited Annual Comprehensive Financial Report (ACFR).

B. APPROVAL OF AN AMENDMENT TO THE PROFESSIONAL SERVICES

AGREEMENT WITH COASTLAND CIVIL ENGINEERING, LLP FOR THE DESIGN THE P-1 PORTAL, MERCANTILE, AND AARON WATER MAIN

REPLACEMENT PROJECT TO ADD DESIGN OF A WATER FILLING

STATION
It is recommended the City of Cotati City Council approve by motion an amendment to the Professional Services Agreement with Coastland Civic Engineering, LLP to design the P-1 Portal, Mercantile, and Aaron Water Main Replacement Project to add design of a water filling station.

C. 2023 COTATITAROD SHOPPING CART RACE AND FOOD DRIVE IN LA

PLAZA PARK AND THROUGH VARIOUS COTATI STREETS, TAKING
PLACE ON SATURDAY, MARCH 4, 2023.

It is recommended that the City Council of the City of Cotati adopt a resolution approving the 2023 Cotatitarod Shopping Cart Race and Food Drive including food sales in La Plaza Park.

D. AGREEMENT TO UPGRADE WATER/SEWER SCADA SYSTEM
It is recommended that the City Council adopt a motion authorizing the City Manager to execute an agreement with TESCO to upgrade the City's water and sewer Supervisory Control and Data Acquisition (SCADA) system, including change orders up to the adopted project budget.

9. DIRECTION ON FUTURE AGENDA ITEMS

10. REGULAR AGENDA (ACTION)
A. RECEIVE AND FILE THE FISCAL YEAR 2021/22 POPULAR ANNUAL FINANCIAL REPORT (PAFR).

It is recommended that the City Council receive and file the Fiscal Year 2021/22 Popular Annual Financial Report (PAFR).

B. COUNCIL ASSIGNMENTS AS REPRESENTATIVES AND LIAISONS TO VARIOUS COMMITTEES FOR CALENDAR YEAR 2023
It is recommended that the Council adopt a motion to assign representatives and liaisons to various committees and commissions for calendar year 2023.

11. CITY MANAGER'S REPORT
Cotati City Council Agenda January 10, 2023

12. CITY COUNCIL MEMBER REPORTS

13. PUBLIC COMMENT ON NON-ACTION AGENDA ITEMS

14. INFORMATION RECEIVED AFTER THE AGENDA WAS POSTED
A. INFORMATION RECEIVED AFTER THE AGENDA WAS POSTED
Information or written comments pertaining to this meeting, and which was received after the agenda was posted, is attached below.

15. ADJOURNMENT
Certification of Posting of the Notice: I declare under penalty of perjury that I am employed by the City of Cotati and that I posted this notice on the City's website, bulletin boards of City Hall, Veterans' Memorial Building and the SMART Train Depot, on or before January 6, 2023.
/s/ Kevin Patterson, Deputy City Clerk

MINUTES

JOINT MEETING OF THE COTATI CITY COUNCIL AND THE SUCCESSOR

AGENCY TO THE FORMER COTATI COMMUNITY REDEVELOPMENT AGENCY City Council Chamber, City Hall 201 W. Sierra Avenue
Tuesday December 13, 2022
6:00 PM REGULAR MEETING

1. CALL TO ORDER
Mayor Landman called the meeting to order at 6:00pm.

2. ROLL CALL
Attendee Name Title Status
Mark Landman Mayor Present
Susan Harvey Vice Mayor Present
Laura Sparks Councilmember Present
Ben Ford Councilmember Present
John C. Moore Councilmember Present
Staff present: City Attorney John Bakker, City Manager Damien O’Bid, Deputy City Clerk Kevin Patterson, Police Chief Michael Parish, Director of Public Works/City Engineer Craig Scott, Director of Administrative Services Angela Courter, Director of Community Development Noah Housh

3. PLEDGE OF ALLEGIANCE

4. APPROVAL OF MINUTES AND NOTICE OF WAIVING OF READING OF ALL

RESOLUTIONS AND ORDINANCES INTRODUCED AND/OR ADOPTED

UNDER THIS AGENDA (ACTION)
A. COTATI CITY COUNCIL - REGULAR MEETING - NOV 22, 2022 6:00 PM RESULT: ACCEPTED [UNANIMOUS]
MOVER: Susan Harvey, Vice Mayor
SECONDER: Ben Ford, Councilmember
AYES: Landman, Harvey, Sparks, Ford, Moore

5. ANNOUNCEMENTS

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Minutes Acceptance: Minutes of Dec 13, 2022 6:00 PM (APPROVAL OF MINUTES AND NOTICE OF WAIVING OF READING OF ALL Cotati City Council Minutes December 13, 2022

A. Meeting Orientation for New Attendees/Viewers. In conformance with the Brown Act and the adopted City Council Rules, the meeting agenda includes items labeled as Action Items, where the City Council will consider the item and citizens are afforded the opportunity to provide comments relevant to the item being discussed. The meeting agenda also includes a Citizens Business item, which is the designated place on the agenda where citizens have the right to say whatever they wish.

The City Council may, or may not, choose to respond to comments, as the Government Code allows. However, if the City Council declines to respond, it should not be perceived as giving credence to or agreeing with any statements that the City Council or its members believe are incorrect, misinformed or purposefully biased.

B. Measure S supports police services, a variety of recreation programs for all ages, and the maintenance of our streets, parks, and public buildings. See details on the web at cotaticity.org
C. Citizens interested in receiving City of Cotati community alerts via text or email are encouraged to sign up with Nixle by downloading the Everbridge app from the IOS or Android app store or by texting your zip code (94931) to 888777.

D. Like always, we love to hear from you, so please feel free to contact the City at 707- 792-4600 or [email protected]. If you have a non-emergency issue after normal business hours, you can contact us at 707-792-4611 and of course if you have an emergency, please contact 9-1-1. Continue to look for updates on the City's website and social media channels available on Facebook, Instagram, Nixle, and Nextdoor.

6. PROCLAMATIONS
A. PROCLAMATION OF THE CITY COUNCIL OF THE CITY OF COTATI

MONARCH PLEDGE DAY
Mayor Landman read the proclamation.

7. PRESENTATIONS
A. MID-YEAR UPDATE FROM THE CHIEF OF POLICE
Presentation from Chief of Police Michael Parish.

Councilmembers comment.

No public comment.

8. APPROVAL OF FINAL AGENDA (ACTION)
City Manager Damien O'Bid recommends to move items 13-16 up in the regular agenda, after item 12A.

Public comment:

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Minutes Acceptance: Minutes of Dec 13, 2022 6:00 PM (APPROVAL OF MINUTES AND NOTICE OF WAIVING OF READING OF ALL Cotati City Council Minutes December 13, 2022

Marjorie Crump-Shears of Cotati
Vice Mayor Harvey motioned to approve the changes to the agenda order.

Councilmember Sparks seconded the motion. Unanimous vote to approve the changes to the agenda order.

9. CITIZEN BUSINESS AND PUBLIC COMMENT FOR CONSENT CALENDAR ITEMS
Public Comment:

Laurie Alderman of Cotati
George Barich of Cotati

10. CONSENT CALENDAR (ACTION)
RESULT: ADOPTED [UNANIMOUS]
MOVER: Susan Harvey, Vice Mayor
SECONDER: Ben Ford, Councilmember
AYES: Landman, Harvey, Sparks, Ford, Moore
A. SECOND READING AND ADOPTION OF AN ORDINANCE THAT

REMOVES THE USE PERMIT REQUIREMENT FOR MULTIFAMILY

HOUSING PROJECTS IN THE NM AND NU RESIDENTIAL ZONING

DISTRICTS AND REVISES THE ADMINISTRATIVE PROCEDURES FOR APPEALS BY THE CITY COUNCIL.

B. CONSIDER APPROVAL OF A PROFESSIONAL SERVICES AGREEMENT

WITH GHD TO PROVIDE DESIGN SERVICES FOR THE REDWOOD

DRIVE AND CYPRESS AVENUE PAVEMENT REHABILITATION

PROJECT
C. ACCEPTANCE OF MOSAIC WALL BENCHES
D. MAIN FLUSHING AND WATER TREATMENT SERVICES FOR THE

WATER DISTRIBUTION SYSTEM

11. DIRECTION ON FUTURE AGENDA ITEMS
Mayor Landman requests a future agenda item on adjusting the rate increases allowable in the Mobile Home Rent Stabilization Ordinance, reducing to 75% of the San Francisco CPI.

12. REGULAR AGENDA (ACTION)
A. 2022 REVIEW AND 2023 WORKPLAN FOR THE VERONDA FALLETTI RANCH

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Minutes Acceptance: Minutes of Dec 13, 2022 6:00 PM (APPROVAL OF MINUTES AND NOTICE OF WAIVING OF READING OF ALL Cotati City Council Minutes December 13, 2022

RESULT: APPROVED [UNANIMOUS]
MOVER: Susan Harvey, Vice Mayor
SECONDER: Ben Ford, Councilmember
AYES: Landman, Harvey, Sparks, Ford, Moore
Presentation by Aishwarya Kancharla of Ammamma Tati and Dustin DeMatteo of Farmster.

Councilmembers comment
Public Comment:

Gil Manser
George Barich of Cotati
Leslie Gibson
Sarah Rapp

13. CITY MANAGER'S REPORT
Report by City Manager Damien O'Bid

14. CITY COUNCIL MEMBER REPORTS
Councilmembers report out on local and regional events and committees.

A. DISCUSSION OF COMMITTEE ASSIGNMENTS
Councilmembers discuss their various committee assignments.

15. PUBLIC COMMENT ON NON-ACTION AGENDA ITEMS
Public comment:

George Barich

16. INFORMATION RECEIVED AFTER THE AGENDA WAS POSTED

12. B. RECOGNITION OF OUTGOING CITY COUNCILMEMBERS
Presentation by City Manager Damien O'Bid reading resolutions of appreciation, Amy Northam & Kin Ong of CIRA recognize Councilmember Moore, City Manager O'Bid reads recognition letter for Mayor Landman from Geof Syphers, GM of Sonoma Clean Power, and Andrea Kraut from the office of David Rabbit presented Gold Resolutions to Mayor Landman and Councilmember Moore.

Councilmembers comment.

Public comment:

Sylvia Lemus of Cotati

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Minutes Acceptance: Minutes of Dec 13, 2022 6:00 PM (APPROVAL OF MINUTES AND NOTICE OF WAIVING OF READING OF ALL Cotati City Council Minutes December 13, 2022

George Barich of Cotati
Neil Hancock of Cotati
Jenny Blakker of Cotati
RESOLUTION NO 2022 - 73 ENTITLED: RESOLUTION OF THE CITY

COUNCIL OF THE CITY OF COTATI COMMENDING COUNCILMEMBER

JOHN MOORE FOR HIS SERVICE TO THE CITY OF COTATI
RESULT: ADOPTED [UNANIMOUS]
MOVER: Ben Ford, Councilmember
SECONDER: Laura Sparks, Councilmember
AYES: Landman, Harvey, Sparks, Ford, Moore
RESOLUTION NO 2022 - 74 ENTITLED: RESOLUTION OF THE CITY

COUNCIL OF THE CITY OF COTATI COMMENDING COUNCILMEMBER

MARK LANDMAN FOR HIS SERVICE TO THE CITY OF COTATI
RESULT: ADOPTED [UNANIMOUS]
MOVER: Ben Ford, Councilmember
SECONDER: Susan Harvey, Vice Mayor
AYES: Landman, Harvey, Sparks, Ford, Moore

12. C. RECEPTION
Mayor Landman called a 15 minute recess for a reception honoring the incoming and outgoing Councilmembers.

12. D. ADMINISTRATION OF OATH OF OFFICE AND SEATING OF THE

NEW COUNCILMEMBERS
Deputy City Clerk Kevin Patterson administered the oaths of office to incoming Councilmembers Sylvia Lemus and Kay Rivers.

Councilmembers comment.

Public comment:

Esther Lemus
George Barich of Cotati

12. E. REORGANIZATION OF CITY COUNCIL FOR CALENDAR YEAR 2023
City Manager Damien O'Bid announces Vice Mayor Harvey will be the presiding office of the meeting now.

Public comment:

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Minutes Acceptance: Minutes of Dec 13, 2022 6:00 PM (APPROVAL OF MINUTES AND NOTICE OF WAIVING OF READING OF ALL Cotati City Council Minutes December 13, 2022

Adrienne Lauby of Cotati
Mark Landman of Cotati
George Barich of Cotati
Councilmember Ford nominates Vice Mayor Harvey as Mayor for 2023, Councilmember Sparks seconds; Harvey, Ford, Sparks, Lemus, Rivers Ayes; Unanimous vote.

Mayor Harvey nominates Councilmember Ford as Vice Mayor, Councilmember Ford declines the nomination. Councilmember Ford nominates Councilmember Sparks, Councilmember Rivers seconds; Harvey, Sparks, Ford, Lemus, Rivers Ayes; Unanimous vote.

17. ADJOURNMENT
Mayor Harvey adjourned the meeting at 10:13pm.

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Minutes Acceptance: Minutes of Dec 13, 2022 6:00 PM (APPROVAL OF MINUTES AND NOTICE OF WAIVING OF READING OF ALL

MINUTES

JOINT MEETING OF THE COTATI CITY COUNCIL AND THE SUCCESSOR

AGENCY TO THE FORMER COTATI COMMUNITY REDEVELOPMENT AGENCY City Council Chamber, City Hall 201 W. Sierra Avenue
Monday December 26, 2022
4:00 PM CLOSED SESSION

COUNCILMEMBER PARTICIPATION VIA TELECONFERENCE
Councilmember Ben Ford participated via teleconference at 678 South Roy St St.

Paul, MN 55116 pursuant to Government Code Section 54953(b)

1. CALL TO ORDER
Attendee Name Title Status
Susan Harvey Mayor Present
Laura Sparks Vice Mayor Present
Ben Ford Councilmember Remote
Sylvia Lemus Councilmember Present
Kay Rivers Councilmember Present

2. PUBLIC COMMENT
No public comment.

3. CLOSED SESSION
Mayor Harvey adjourned to closed session
A. CONFERENCE WITH REAL PROPERTY NEGOTIATOR Pursuant to Government Code Section 54956.8. Property: 147 St. Joseph Way, Cotati. City Negotiator: City Manager. Negotiating Party: Cotati Hotel, LLC. Under Negotiation:

Price and terms of payment of sale of property.

B. CONFERENCE WITH LEGAL COUNSEL---ANTICIPATED LITIGATION.

Significant exposure to litigation pursuant to paragraph (2) or (3) of subdivision (d) of Section 54956.9: 1 case. Facts and Circumstances: December 16, 2022 letter from Keith Diggs, Matthew Gelfand, and Dylan Casey

4. REPORT OUT OF CLOSED SESSION
Mayor Harvey announces there is nothing to report out of closed session.

5. ADJOURNMENT
Mayor Harvey adjourned the meeting at 5:09pm.

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Minutes Acceptance: Minutes of Dec 26, 2022 4:00 PM (APPROVAL OF MINUTES AND NOTICE OF WAIVING OF READING OF ALL Cotati City Council
Agenda Staff Report
Item type: CONSENT CALENDAR (ACTION)
To: City Council/Successor Agency to the Former Cotati Community Redevelopment Agency
Subject: Receive and File the Fiscal Year 2021/22 Audited Annual Comprehensive Financial Report (ACFR) for the City of Cotati
Date: January 10, 2023
Written by: Angela Courter, Director of Administrative Services Recommendation
It is recommended that the City Council receive and file the Fiscal Year 2021/22 audited Annual Comprehensive Financial Report (ACFR).

Background
The Annual Comprehensive Financial Report (ACFR) is an audited summary report of the financial transactions of the City for the Fiscal Year 2021/22, ending June 30, 2022. The report is presented to the City Council and designed to provide summary financial information for citizens, other government agencies, municipal lenders, and other interested parties. The format of this report complies with the Generally Accepted Accounting Principles (GAAP) and reporting requirements of the national Governmental Accounting Standards Board (GASB).

Badawi & Associates, licensed Certified Public Accountants who specialize in governmental audits, has audited the City’s financial statements. The goal of the independent audit was to provide reasonable assurance that the financial statements of the City for the fiscal year ended June 30, 2022, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation.

The ACFR is intended to improve access and transparency by providing ten years of historical financial information, as well as expert narrative analysis of the finances of the City. This provides a multi-year look at the City finances and helps the reader understand the information presented in the Basic Financial Statements section of the ACFR.

For fiscal years 2017/18, 2018/19, 2019/20, and 2020/21 the City received the Government Finance Officers Association (GFOA) ACFR award called the Certificate of Achievement for

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Excellence in Financial Reporting and will continue to apply for this award, which has historically been awarded to less than 1% of cities our size.

Analysis/Discussion
The City’s financial statements provide information about the finances of the City in its entirety, as well as information about individual funds. The ACFR is organized into the four sections summarized below.

Introductory Section
• Letter of Transmittal - which is designed to complement Management’s Discussion and Analysis (the MD&A) and is prepared by management and used to communicate information on areas that may have an impact on the City’s finances now and in the future. This includes economic factors as well as budget and management factors. Both should be read together to understand the City’s financial position.

Financial Section (the main body of the ACFR for current year information) • Independent Auditors’ Report – the City’s report card on the content of the ACFR. • Management’s Discussion and Analysis (MD&A) – provides an analytical overview of the City’s financial status and results for the year.
• Basic Financial Statements – reports finances at a point in time (assets - liabilities) and throughout the year (revenues - expenditures), and cash flows. o Government-Wide Statements – overview of financial information including all the City’s operations by financial activity.
o Fund Financial Statements – a detailed look at funds, reporting the Balance Sheet and Statement of Revenues, Expenditures and Changes in Fund Balance. o Notes to the Financial Statements (Notes) – a narrative explanation that accompanies the Basic Financial Statements.

Required Supplementary Information
• Budget to Actual Comparisons – for all governmental funds with a legally adopted budget.
• Pension Information – schedule of changes in the pension liability and related ratios; schedule of contributions by plan.
• OPEB Information – schedule showing Other Post-Employment Benefits Other Than Pensions since fiscal year 2017/18.

Other Supplementary Information
• Non-Major Funds combining financial statements including the balance sheet and statements of revenues, expenditures, and changes in fund balances. • Budget to Actual Comparisons – for non-major governmental funds with a legally adopted budget.
• Statements for Internal Service Funds.
• Schedule of Measure S Revenues and Uses for the fiscal year.

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Statistical Section (current and historical information – up to 10 years) The last section of the ACFR, which is unaudited, contains schedules of statistical data about the City of Cotati in five major categories:

1. Financial Trends

2. Revenue Capacity

3. Debt Capacity

4. Demographic and Economic Information

5. Operating Information
These schedules, generally covering a ten-year period, provide operating context for the financial data presented in the financial section of the ACFR.

The ACFR is available on the City’s Financial Information webpage and attached to this staff report. Copies can be made available for review in the City Manager’s Office and in the Administrative Services Office.

Financial Highlights
Badawi & Associates, the independent auditor, has issued the City a clean audit opinion.

This independent audit includes an evaluation of the appropriateness of accounting policies used by the City, evaluation of any significant accounting estimates made by City management as well as verification that the financial statements are free from material misstatement. The attached ACFR has no material misstatements. The “corrected misstatements” on the Letter to those Charged with Governance relate to correcting the recording of the new debt for the pension and street project as well as correcting the deferred loss on the same refunding.

Government-Wide Financial Statements (ACFR pages 19 - 21) • At the close of the fiscal year, the assets and deferred outflows of the City exceeded liabilities and deferred inflows of resources by $54.9 million (Total net position in the government-wide) compared to $51.3 million in FY 2020/21. The two significant contributing factors to the change in fund balance are as follows:
o Net increase of approximately $2.0 million, or 5.0% increase in net investment in capital assets was mainly due to the completion of streets improvement capital projects and purchasing of emergency equipment (See ACFR page 12 for list of significant capital assets additions).
o Restricted Net Position of $7.4 million represents resources that are subject to external restrictions on their use, or by enabling legislation. Restricted net position is comprised of amounts restricted for housing ($4.3 million or 58.6%) capital and street projects ($2.6 million or 35.6%), and other ($0.4 million, or

5.9%). Restricted net position increased by $1.7 million, or 30.3%, primarily due to increased number of projects which were postponed due to economic uncertainty caused by Covid-19.
o Unrestricted Net Position in the amount of $4.9 million represents net position of the City that is not restricted for any project or purpose. The decrease of $0.3

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million, or 6.6%, was primarily due to increased use of funds for City projects offset by increased change in overall change in net position. • As of June 30, 2022, the City’s governmental activities reported a net position of approximately $39.4 million compared to $35.6 million in FY 2020/21, a $3.8 million

10.4% increase.
• As of June 30, 2022, the City’s business-type activities reported a net position of $15.7 million compared to $16.4 million in FY 2020/21, a $0.7 million or 4.3% decrease.

Fund Financial Statements (ACFR pages 23 - 37)
• As of the close of the current fiscal year, the City’s Governmental Funds reported a combined ending fund balance of approximately $15.4 million a $1.4 million increase from the prior year. This change is primarily due to the increase in fund balances from other nonmajor governmental funds of $1.9 million, specifically the Streets Bonds Project Fund which provided $1.7 million. The Nonmajor Governmental Funds are restricted for use primarily for streets projects, community development projects and other special purposes.
• Within the Governmental Funds ending fund balances were primarily made up of the following; (See Governmental Funds Balance Sheet on page 26). o $2.0 million for capital projects ($1.9 restricted and $0.1 committed), o $0.8 million restricted for streets,
o $3.2 million restricted for affordable housing,
o $2.1 million committed for emergencies per required reserve policy. o $6.2 million is unassigned.
• As of the close of the current fiscal year, the City’s General Fund reported an ending fund balance of $9.0 million compared to $9.1 million in FY 2020/21, a $0.1 million net change.
• The City’s General Fund continued to maintain a significant balance above the 25% required reserve.

Financial Considerations
The audit report included at ACFR pages 1-4 provides reasonable assurance that the financial statements are free of any material misstatements and found no material weaknesses. This report signals the City’s quality of accounting and financial reporting and is an indication that City funds are being spent appropriately and as intended by the City Council, grantor agencies, and federal and State laws. It also helps maintain the City’s favorable bond ratings.

Environmental Issues

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The creation of a Consolidated Annual Financial Reporting document is not a project under the California Environmental Quality Act (CEQA), per the definition of a project identified in Section 15378 of CEQA in that there will be no direct, or reasonably foreseeable indirect physical change in the environment.

Attachments:

Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (PDF) Letter to Those Charged with Governance (PDF)
Report on Internal Controls Over Financial Reporting (PDF) Auditors Letter on Appropriations Limit (PDF)

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Sonoma County California
COTATI

CITY OF
Annual Comprehensive
Financial Report
Fiscal Year Ended June 30, 2022

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Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati, California
Annual Comprehensive Financial Report
For the Fiscal Year Ended June 30, 2022
Prepared by the Administrative Services Department
bbbbbbbAngela Courter, Director of Admin. Services
bbbbbbbbbNeil Tomlinson, Senior Accountant

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Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Annual Comprehensive Financial Report
For the year ended June 30, 2022
Table of Contents
Page
i

INTRODUCTORY SECTION
City Council ................................................................................................................................................................ vii Management Team .................................................................................................................................................... viii City Organization Chart .............................................................................................................................................. ix GFOA Certificate ............................................................................................................................................................ x Letter of Transmittal ..................................................................................................................................................... xi

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

Government-Wide Financial Statements
Statement of Net Position ..................................................................................................................................... 19 Statement of Activities .......................................................................................................................................... 20 Fund Financial Statements
Governmental Funds:

Balance Sheet ...................................................................................................................................................... 26 Reconciliation of the Balance Sheet
to the Government-Wide Statement of Net Position ................................................................................. 27 Statement of Revenues, Expenditures and Changes in Fund Balances ...................................................... 28 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances to the Government-Wide Statement of Activities ...................................................................................... 29 Proprietary Funds
Statement of Net Position .............................................................................................................................. 32 Statement of Revenues, Expenses, and Changes in Fund Net Position .................................................. 33 Statement of Cash Flows ................................................................................................................................ 34 Fiduciary Funds:

Statement of Fiduciary Net Position ............................................................................................................ 36 Statement of Changes in Fiduciary Net Position........................................................................................ 37 Notes to the Basic Financial Statements ................................................................................................................ 41

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Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Annual Comprehensive Financial Report
For the year ended June 30, 2022
Table of Contents
Page
ii
FINANCIAL SECTION, Continued
Required Supplementary Information
Budget and Budgetary Accounting ........................................................................................................................ 81 Budgetary Comparison Schedules
General Fund ......................................................................................................................................................... 82 Inclusionary Housing Fund ................................................................................................................................. 83 Schedule of the City’s Proportionate Share of Net Pension Liability – Last Ten Fiscal Years ....................... 84 Schedule of the City's Pension Contributions – Last Ten Fiscal Years ............................................................. 84 Schedule of Changes in the City’s Total OPEB Liability and Related Ratios – Last Ten Fiscal Years .......... 86 Other Supplementary Information
Budgetary Comparison Schedule:

City Capital Projects ............................................................................................................................................. 89 Non-Major Governmental Funds:

Combining Balance Sheet ..................................................................................................................................... 94 Combining Statement of Revenues, Expenditures and Changes in Fund Balances .................................... 98 Budgetary Comparison Schedules:

Landscape and Lighting ..................................................................................................................................... 101 Gas Tax ............................................................................................................................................................... 102 Bed Tax ............................................................................................................................................................... 103 Park In Lieu .......................................................................................................................................................... 104 MTC Street ............................................................................................................................................................ 105 Traffic Mitigation ................................................................................................................................................. 106 Road Maintenance and Rehabilitation Administration ................................................................................. 107 Community Development Projects ................................................................................................................... 108 Grants Fund ......................................................................................................................................................... 109 CDBG .................................................................................................................................................................... 110 Public Safety ......................................................................................................................................................... 111 K-9 Program ......................................................................................................................................................... 112 Affordable Housing Linkage ............................................................................................................................. 113 PEG ........................................................................................................................................................................ 114 Community Facilities District ............................................................................................................................ 115 Streets Bonds Project Fund ................................................................................................................................ 116 Debt Service Fund ............................................................................................................................................... 117 Capital Project Unspent Bond Proceeds........................................................................................................... 118 Internal Service Funds:

Combining Statement of Net Position .............................................................................................................. 120 Combining Statement of Revenues, Expenses and Changes in Net Position ............................................. 121 Combining Statement of Cash Flows ............................................................................................................... 122

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Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Annual Comprehensive Financial Report
For the year ended June 30, 2022
Table of Contents
Page
iii
FINANCIAL SECTION, Continued
Other Supplementary Information, Continued
Schedule of Measure S Revenues and Uses ........................................................................................................ 125

STATISTICAL SECTION
Summary of Contents ............................................................................................................................................ 129 Financial Trends
Net Position by Component ........................................................................................................................... 131 Changes in Net Position .................................................................................................................................. 132 Fund Balance of Governmental Funds ......................................................................................................... 134 Revenue, Expenditures, Changes in Fund Balance and Debt Service Ratio of Governmental Funds ............................................................................................................................... 135 Revenue Capacity
Use Category Summary .................................................................................................................................. 136 Property Tax Dollar Breakdown .................................................................................................................... 137 Roll Summary ................................................................................................................................................... 138 Net Taxable Assessed Value History ............................................................................................................ 139 Assessed Value of Taxable Property ............................................................................................................. 140 Top Ten Property Taxpayers .......................................................................................................................... 141 Direct & Overlapping Property Tax Rates ................................................................................................... 143 Sales Value History .......................................................................................................................................... 144 Top 25 Sales Tax Producers ............................................................................................................................ 146 Taxable Sales by Category .............................................................................................................................. 147 Debt Capacity
Direct and Overlapping Governmental Activities Debt ............................................................................. 148 Legal Debt Margin Information – Last Ten Fiscal Years ............................................................................ 149 Demographic and Economic Information
Demographic and Economic Statistics .......................................................................................................... 150 Full-Time and Part-Time City Employees by Function .............................................................................. 151 Operating Information
Operating Indicators by Function .................................................................................................................. 152 Capital Asset Statistics by Function .............................................................................................................. 153

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iv

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Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial Introductory Section
City Council, Management Team,
City Organization Chart, and
Letter of Transmittal
v

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Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial Other Commissions or Committees:

Planning Commission
Measure S Citizen Oversight Committee
201 West Sierra Ave.

Cotati, California 94931
www.cotaticity.org
Phone: 707-792-4600
Email: [email protected]

MEET THE COTATI CITY COUNCIL
Mark Landman
Mayor (2022)
[email protected]
707-792-4600 (ext. 195)
Elected Term:(2018-2022)
Susan Harvey
Vice Mayor
[email protected]
707-792-4600 (ext. 193)
Elected Term:(2020-2024)
Laura Sparks
Council Member
[email protected]
707-792-4600 (ext.194)
Elected Term:(2020-2024)
Ben Ford
Council Member
[email protected]
707-792-4600 (ext. 196)
Elected Term:(2020-2024)
John Moore
Council Member
[email protected]
707-792-4600 (ext. 192)
Elected Term:(2018-2022)
vii

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Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial 201 West Sierra Ave.

Cotati, California 94931
www.cotaticity.org
Phone: 707-792-4600
Email: [email protected]

MEET THE COTATI CITY

MANAGEMENT TEAM
Damien O’Bid
City Manager
[email protected]
Noah Housh
Director of
Community
Development
[email protected]
Craig Scott
Director of
Public Works /
City Engineer
[email protected]
Michael Parish
Chief of Police
[email protected]
Angela Courter
Director of
Administrative
Services
[email protected]
viii

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Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial Citizens
of
Cotati
City Council
City
Attorney
City
Manager
Police
-Chief of Police
-Lieutenant
-Sergeants
-Corporals
-Officers
-Reserve Officer
-Comm. Services
- Officer
-Dispatchers
-Police Services
Aide
Engineering
/ Public
Works
-Director
-P.W. Supt.
-Maintenance
- Workers
- Laborer
-Civil Engineer
-Admin.

Analyst
-Intern
City
Managers
Office
-City Clerk
-Admin.

Assistant
-Admin. Analyst
-Intern
Recreation
-Rec & Facilities
Manager
-Rec. Coord.
-Camp Dir.
-Camp Staff
Community
Development
-Director
-Senior
Planner
-Permit Tech
Admin.

Services
-Director
-Sr. Accountant
-Accountant
-Clerk
-Intern

ORGANIZATIONAL CHART
ix

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Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Cotati
California
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2021
Executive Director/CEO x

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Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial xi
December 20, 2022
The Honorable City Council
Cotati, California
Members of the City Council and Citizens of the City of Cotati:

The City of Cotati is pleased to present our Annual Comprehensive Financial Report (ACFR or Annual Report) for the fiscal year ended June 30, 2022. The fiscal year covers financial transactions from July 1, 2021, to June 30, 2022, on a modified or full accrual basis, depending on the fund type. While the City is only required to present a basic financial audit, for several years now, the City has provided awardwinning and comprehensive Annual Reports to provide the highest level of financial transparency to the City Council and community. The City follows a policy of preparing and submitting a complete set of financial statements, with the independent auditor’s report which are in conformity with the principles and standards for financial reporting set forth by the Governmental Accounting Standards Board (GASB) and compliant with City and California Government Code Sections 25250 and 25253. To the best of our knowledge and belief, the data as presented is accurate in all material aspects and presented in a manner designed to fairly set forth the financial position and changes in financial position of the City as measured by the financial activity of its various funds. This information includes disclosures that are necessary to enable the maximum understanding of the City’s financial affairs.

City management assumes full responsibility for the completeness and reliability of the information provided in this report. The City has established a comprehensive framework of internal controls to provide a reasonable basis for asserting that the financial statements are fairly presented. The independent auditor’s report presents an unmodified (“clean”) opinion on the City’s financial statements for the year ended June 30, 2022. The independent auditor’s report is located at the front of the financial section of this report.

The City has prepared the Annual Report using the financial reporting requirements as prescribed by GASB Statement No. 34, Basic Financial Statements – Management’s Discussion and Analysis – for State and Local Governments. This GASB Statement requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of a Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The MD&A can be found immediately following the report of the independent auditors.

Badawi & Associates, an independent and licensed certified public accountant firm, has audited the City of Cotati’s financial statements. The goal of the independent audit was to provide reasonable assurance that the financial statements of the City of Cotati for the fiscal year ended June 30, 2022, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by the management; and evaluating the overall financial presentation. Badawi & Associates has concluded, based upon the audit, that there is a reasonable basis for rendering an unmodified audit opinion that the City of Cotati’s financial statements for the fiscal year t h a t ended June 30, 2022, are fairly presented in all material respects in conformity with generally accepted accounting principles in the United States. The independent auditor’s report is presented as the first component of the financial section of this report.

In accordance with Government Finance Officers Association (GFOA) best practices, which recommend changing auditors every five years1, this is the third year that the City is using a new auditor to review the financial statements of the City.
1 https://www.gfoa.org/materials/audit-procurement
Auditor’s Report Summary
Incorporated in 1963

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Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial xii
The Annual Report includes the funds of the primary government, which includes the General Fund and several enterprise activities, as well as all its component units. Component units include legally separate entities for which the primary government is financially accountable and that have the same board as the City or provide services entirely to the City.

The Annual Report is presented in four sections: Introductory, Financial, and Statistical. The introductory section includes this transmittal letter, the City’s organizational chart and a list of municipal officers and officials. The financial section includes the MD&A, government-wide financial statements, fund financial statements, notes to the financial statements, and required supplementary information, as well as the auditor’s report on the financial statements and schedules. The MD&A provides additional information regarding management of the City’s finances and should be read in conjunction with this transmittal letter.

The statistical section includes selected financial and demographic information of the City, presented on a multi-year basis.

City Profile: The City of Cotati (City) voted for incorporation in 1963 as a general law city in the County of Sonoma, State of California. The City is located about forty-five miles north of San Francisco on the US 101 corridor between Rohnert Park and Petaluma. The City is approximately 1.88 square miles with an estimated population of 7,397, making it among the smallest incorporated communities in Sonoma County.

Community amenities include a charming downtown along the historical Old Redwood Highway, with various shops and restaurants. The City is also known for festivals that draw international visitors and a weekly farmer's market during the summer. Many Sonoma County wineries are located within minutes from the City, making this community an ideal vacation destination.

City Council: The City is established as a Council-Manager form of local government and governed by a five-me mber City Council. The Mayor and Vice Mayor are selected by the City Council each year from among the five City Council members. The Council is elected on a non-partisan at-large basis.

Council members serve four- y e a r staggered terms, with two or three members elected every two years.

The City Council is the legislative and policy-making body of the City. The City Council formulates City policies in the form of motions, resolutions and ordinances which reflect the needs, wishes and priorities of the citizens of Cotati; promotes the economic, cultural, and governmental well-being of the City; and provides for the orderly operations and development of the City. The City Council also serves as the Successor Agency to the former Cotati Community Redevelopment Agency.

City Services: The City provides a full range of municipal services, including police, water, sewer, streets and sidewalks, cultural and recreation facilities, public works and parks, planning, and economic development. Fire services are provided by the Rancho Adobe Fire District.

Size: 1.88 square miles
Population:
2 7,397
Population Ranking of CA cities3
: 559 of 1,578
Race & Ethnicity: White-70.2%, Hispanic-22.3%,
Asian-2.1%, African American-1.0%, Two or More
Races-4.0%, Others-0.4%
2 See statistical data after basic financial statements. 3 https://www.california-demographics.com/cities_by_population Median Age: 38.7 years, Aged 18-64: 64.5%
Highschool graduate or higher: 91.5%
(State: 83.9%)
Median Household Income (2020): $86,982
(State:$78,362)
Estimated Median House: $642,000
(State: $538,500)
Demographic Information
The Reporting Entity and Services Provided
Annual Comprehensive Financial Report

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Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial The City’s annual budget starts with an annual strategic planning session with the City Council and the public. Following this strategic planning process, the departments take these priorities to develop initial operating and capital budget requests. The City Manager reviews these requests with the Administrative Services Department and the respective department heads. The City Manager and Director of Administrative Services then make recommendations to the City Council regarding the development of the City’s annual budget. After public discussion and evaluation of their recommendations, the City Council adopts a budget. After adoption, the Council periodically reviews the financial activity in relationship to the original budget and amends the original budget as necessary to reflect changing conditions.

Expenditures are controlled at the fund level for all budgeted departments within the City and may not legally exceed appropriations. The budgets are adopted on a basis substantially consistent with generally accepted accounting principles (GAAP). Any amendments to the total appropriations of a fund must be approved by the City Council.

Long-term revenue continues to be a challenge for the City. Measure G, a 1% sales tax was passed by Cotati voters on June 3, 2014. On November 3, 2020, with an approval of 74.5%, the voters agreed to extend the add-on sales tax with the approval of Measure S. These funds are now secured to support essential City services. Even with the renewal of Measure S, the City continues to face challenges related to the rising costs of general insurance for the City, the reduced CalPERS discount rate for pensions (and the corresponding higher annual payments) and the necessary replacement and upgrades of city infrastructure.

As we emerge from the COVID-19 pandemic, we are experiencing increased cost of labor and materials as well as large increases in liability and property insurance costs across the cities in our insurance pool. We need to stay cognizant of those trends and make pragmatic decisions accordingly as the actual impacts become known, while remaining fiscally prudent and focused on using our resources to maintaining core services. While we prioritize keeping our community safe and continuing to provide high quality essential municipal services; we are also focused on the future and continuing to move forward on City Council priorities. The City Council has clearly communicated the need for many years to continue to invest heavily in repairing and maintaining our infrastructure, with a focus on new housing development across all income levels and adaptation and mitigation to climate change.

As the City looks to continue balancing growth and managing revenue and expenses, there are key variables in planning long-term financial forecasts, including operating costs (primarily payroll growth, pension and health premium rates), revenue projections for property taxes, sales taxes, and other revenue sources.

Moreover, Cotati continues to focus on maintaining sufficient financial reserves, diversification of revenue, paying for capital improvements and improving levels of service to the residents.

Long-Term Financial Planning
Accounting System and Budgetary Control
xiii

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Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial The City is located in beautiful Sonoma County, approximately forty-five miles north of San Francisco on US Highway 101. Just minutes from popular destinations including hundreds of local wineries, the Pacific Ocean, and giant redwoods, Cotati's strategic location in the heart of Sonoma County and its natural beauty has made it an attractive location as a place to work and live. Families continue to be attracted to the City of Cotati's historic charm, quiet neighborhoods, good schools, and low crime rate.

The City Council continues to prioritize economic development, infrastructure, community engagement and equity. General Fund revenue continues to be an area that the City needs to bolster and diversify to be able to provide the infrastructure and services the community expects. The short-term strategy for revenue augmentation has focused on cannabis business taxes and transient occupancy taxes by developing these business sectors. This goes together with a “stop loss” approach to address areas of excess service costs to make them revenue neutral. The medium to long term strategy continues to be diversification of the existing sales and property tax base to provide more stability, primarily through a more flexible business and development environment to encourage a wide array of businesses that fit into the fabric of Cotati and provides the jobs, services, and revenue needed by the community.

Below is a summary analysis of some key indicators of the region’s economic environment.

Employment
Due to COVID-19 and prolonged business closures from the shelter-in-place orders, the U.S. and regional job markets were significantly impacted.

Nationally, employment exhibited a significant decline compared to growth in prior years. Employment losses were largely dominated by the leisure and hospitality industries, which represented 36% of all job loss. These sectors, while still not at the pre-covid levels, are continuing to improve and are expected to gradually improve over the next several years. On the local level unemployment rates have been reduced to below the pre-covid levels as of September 2022. Sonoma County continued to add jobs in manufacturing; professional and business services; and government. But still remained slower for jobs available in construction; trade, transportation and utilities; financial activities; educational and health services; and leisure and hospitality.

Unemployment Rate4
:

United States 3.5%, California 3.8%, Sonoma County 2.6%, Cotati 1.7% Inflation
Inflation is the rate at which the general level of prices for goods and services is increasing and consequently results in a decline in the purchasing power of money. The annual calendar year average inflation rate in the US continues to trend upward from the prior years’ 13-year high of 5.4% in September of 2021 to now an 8.2% this September 20225
. This is consistent with inflation within the state of California and the Bay Area6 where the calendar year average inflation for the state was at 6.9% in 2022, up from

4.7% in the prior year and the San Francisco Bay Area is at 5.0% in 2022 up from 4.1 % in 2021.

Economists expect inflation to average at about 8.0% for the year in 2022, and inflation is expected to decline to an average of 3.8% for 2023.

Personal Saving Rate
The personal saving rate is calculated as the ratio of personal saving to disposable personal income.

In September 2022, the personal saving rate in the U.S. amounted to 3.1%. In 2020, the personal saving rate was 7.5% and in 1970, the personal saving rate was 12.9%. The personal saving rate is a significant economic indicator, as it is a measure of the accumulation of money for future use.7 4 CA Employment Development Department Month of September 2022 5 https://www.focus-economics.com/countries/united-states/news/inflation/inflation-drops-to-lowest-level-since-february-in-september 6 https://dof.ca.gov/forecasting/economics/economic-indicators/inflation/ 7 https://fred.stlouisfed.org/series/PSAVERT
Economic Overview of the City and Region
xiv

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Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial Consumer Spending Rate
Consumer Spending in the United States is a significant component of Gross Domestic Production (GDP) and a leading economic indicator of recession or economic growth. Personal consumption expenditures continue to increase and in September of 2022 saw month over month growth of $113.0 billion or 0.3%.

According to the Chief Economist of FWDBONDS in New York, “Americans may say they are worried about inflation, but they are still out shopping, which keeps the economy growing. There can be no chance that inflation pressures will subside in the near term from slowing demand”.8 Sales Tax
Sales tax revenue (combined Bradley Burns and Measure S) accounts for approximately 62% of General Fund revenues.
ͻ Bradley Burns - State Sales Tax: The Bradley-Burns Uniform Sales and Use Tax Law provide the State a 6% rate and a city/county rate of 1.25%. Out of the 1.25% city/county rate, one-quarter cent of the levy is sent to the county transportation fund and the 1% balance goes to support local government general funds.
ͻ Measure G/S - Local Sales Tax: In the June 2014 election, Cotati voters approved a ballot measure, Measure G, to increase sales tax by 1%. In November of 2020, the citizens of Cotati voted overwhelmingly to continue this special tax as Measure S until the voters repeal it. These additional sales tax dollars help ensure the City's financial viability as a full-service city, improve infrastructure and protecting the small-town quality of life. For FY 21/22, the City collected approximately $3.0 million in Measure S sales tax revenues.

The revenue collected was used to maintain current service and operation levels in the General Fund as well as fund City recreation, public safety, and capital projects including parks and streets.

Sales Tax Breakdown: As of June 30, 2022, the total sales tax rate in Cotati was 9.50%9 as follows:

California Sales and Use Tax Rates
State 6.00%
County Transportation Funds 0.25%
Local-City of Cotati (Bradley Burns) 1.00%
Total State-Wide Sales and Use Tax Rate 7.25%
Add: County (SMART, Measure M & Y, O & Open Space) 1.25% Add: Cotati Measure S 1.00%
Total Sales Tax Rate in Cotati 9.50%
9 https://www.cdtfa.ca.gov/taxes-and-fees/rates.aspx
9 https://www.cdtfa.ca.gov/taxes-and-fees/rates.aspx
County-wide sales tax measures include Sonoma Marin Area Rail Transit [SMART] (0.25%), the Agricultural Preservation and Open Space District (0.25%), Measures M (Transportation) (0.25%), Measure M (Parks) (0.125%) & Measure Y (Libraries) (0.125%). Measure O - Sonoma County Local Mental Health, Addiction and Homeless Services Measure Transactions and Use Tax (0.25%) (SOMT) Combined, they total 1.250% of the overall sales tax rate in Cotati. xv

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Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial Property Taxes
The City of Cotati receives approximately 10% of the property taxes collected within the City. The other 90% of property taxes collected support the Cotati-Rohnert Park School District, the County of Sonoma, and to a lesser degree, the Rancho Adobe Fire District. There are also a variety of special district property direct tax assessments, school district bonds assessments, and a special property tax assessment by Rancho Adobe Fire District. Properties in Cotati experienced a net taxable value increase of 3.0% or $36.8 million for the 2021/22 tax roll.

Residential values continued to increase from their 2020/21 levels by almost $33.1 million. This increase is primarily driven by the sale of new homes which increased the value by $15 million, and the resale of existing housing as well as the up to 2% valuation increases allowed by the County under Proposition 13. .

Commercial values increased by $2.8 million. Primarily due to increased valuations on existing parcels and not new construction.

Growth in home sales increased in the summer of 2020 and many cities saw an increase in properties for sale. Sale prices grew due to low inventory and declining mortgage rates. These conditions continued to cause prices to rise in 2021. The median sale price of a detached single family residential home in Cotati from January through September 2021 was $700,000. This represents a $32,500 (4.87%) increase in median sale price from 2020. Gains in median housing prices suggest that there is very little potential for the county assessor to apply Proposition 8 value reductions on single family homes. While assessed values on the 2021/22 rolls were not impacted by the pandemic, the effects of the pandemic are reflected in large increases in assessment appeals activity for that fiscal year.

Housing/Building Permits
Building improvements and construction declined within the City in Fiscal Year 2021/22, with the number of building permits issued (397 permits totaling $11,041,988 in value) decreasing by approximately 16% compared to Fiscal Year 2020/21 (473 permits totaling $26,930,165 in value). This decrease is primarily related to completion of the Kessing Ranch subdivision and a slow-down in residential construction projects and property investments.

The City’s estimated ending General Fund Balance in the FY2022/23 B udget is $4.6 million, which is equivalent to 53% of total operating expenses. This estimated reserve exceeds the required budgetary 25% reserve. The significant reserve is primarily due to the City’s ability to efficiently manage costs while it continues to improve the services provided to its citizens.

The General Fund’s economic condition and economic outlook includes the following assumptions for the FY2022/23 Budget:
x Property tax growth of around 6% based on 2% assessor applied CPI plus change in assessed value due to transfer of ownership and Prop 8 recapture, as well as new construction. x Sales tax increase of 2.0% due to potential impacts from higher dollar transactions due to inflation and consumer demand, offset by decreased cash receipts to the County Pool due to the Amazon Distribution Center re-allocation of funding.
x Cannabis business tax approximating $750,000 due to the start of new cannabis retail operations. x A median decline of $20,000 for all other revenue primarily due to reduced development fees as interest rates for developers increase and demand for projects slow. x Personnel vacancy rate of 0% in each City department. x Salary increases contained in the approved MOUs.
x Healthcare and other insurance cost increases of 5%.

Economic Condition and Outlook for the General Fund
xvi

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Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial x ENSURE LONG-TERM VITALITY FOR THE CITY
a. Promote a balanced budget that meets the community vision for City services. b. Economic Development.
ƒ Business Attraction/Retention program.
ƒ Removing barriers to market entry.
ƒ Promotion of Cotati for businesses.
ƒ Revenue enhancement.
c. Facilitate affordable housing and new development and infrastructure consistent with vision and goals of the General Plan and Environmental Impact Report (EIR). d. Preserve City infrastructure to meet community needs. e. Actively pursue all feasible grant opportunities to implement identified project. f. Actively work to mitigate and adapt to the impact of climate change, in accordance with adopted City Council policies.
x PROVIDE CORE SERVICES CONSISTENT WITH STANDARD COMMUNITY SERVICE LEVELS a. Ensure community safety and quality (Police, Planning, Building, Public Works, and Code Enforcement).
b. Maintain core day-to-day services in all departments. c. Improve emergency preparedness, including wildfire preparedness. d. Update City regulations to respond to applicable legislative and legal changes. e. Provide convenient and reliable zoning, permitting, and development services. f. Represent City’s interest by participation in region-wide issues. g. Pursue opportunities to improve service delivery, including joint procurement, leveraging internal and external staffing resources, and developing systems, policies, and procedures to streamline processes and expand capabilities of staff.
x COMMUNITY ENGAGEMENT
a. Develop programs, projects & processes to increase and enhance community engagement. b. Continue to improve public information and awareness of programs and services. c. Explore the possibility of incorporating neighborhood level programming into City activities. x PROMOTE AN EQUITABLE, COMPASSIONATE, AND HEALTHY COMMUNITY THAT HONORS

DIVERSITY AS A SOURCE OF STRENGTH
a. Ensure that all city government operations are inclusive and equitable: Fairness in hiring and promotions, greater opportunities in contracting, and equitable services to all residents. b. Advance equity and health in partnership with Cotati residents and stakeholders, other jurisdictions, and non-governmental organizations.

Financial and Operational Stability

1. Received the Government Finance Officers Association (GFOA) Distinguished Budget Presentation Award and the California Society of Municipal Finance Officers (CSFMO) Operating Budget Excellence Award for the FY 2018/19, 2019/20, 2020/21, and 2021/22 budgets.

2. Received the GFOA Certificate of Achievement for Excellence in Financial Reporting and the GFOA Certificate of Outstanding Achievement for Popular Financial Reporting for FY 2018/19, 2019/20 and 2020/21.

3. Mid-Year Budget Review and Update and Quarterly Financial Summary Reports. Due to the uncertainty of the impact of COVID-19 on our City resources, the Administrative Services Department stepped up to provide monthly and then quarterly reports to the City Council and the community. These reports provide an assessment of the City’s budget condition, a summary of revenues received to date and cash on hand.

Significant Events and Accomplishments
Strategic Goals
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4. Expanded communication with our citizens by supporting online City Council meetings in two different formats, as well as focused improvements on the redesigned City website, Facebook, Instagram, YouTube, cable broadcast station, Nixle/WaterSmart/Utility Notifications, utility bill newsletters and published Activity Guides.

5. Refinanced $4M in Pension Liability and obtained $7M in low interest debt for Streets Improvement Program to secure infrastructure improvements for the next 5 years.

Economic Development

1. Continued COVID-19 support for local business, including event fee waivers, automatic extensions of expiring approvals and outdoor dining tents.

2. Passed ADU and Cottage Housing ordinances to assist in more varied housing type developments.

3. Housing development continued at Kessing Ranch and Jamie Lane, an affordable housing project.

4. Zoning code revisions to allow businesses the flexibility they need in today’s retail environment while preserving Cotati’s character.

Community Safety

1. Police Enforcement: Continue efforts to maintain a safe community including partnering with the City of Rohnert Park to create SAFE (Specialized Assistance for Everyone) which provides mobile mental health crisis responses to both Cities.

2. Continue to maintain and build relationships with residents through support of “National Night Out” and “Coffee with a Cop.”

3. Continued collaboration with Sonoma State University safety and dispatch operations.

4. Expanded police patrols in neighborhoods with police beats neighborhood meetings and focused areas of enforcement.

Infrastructure

1. Completed major infrastructure projects including significant restoration of streets with pavement preservation work throughout the West Side of Cotati and pavement rehabilitation throughout the City.

2. Installed various traffic safety improvements throughout the City, including pedestrian safety lights at crosswalks on West Sierra Avenue and yellow reflective taping around light signal head shrouds for greater visibility during power outages.
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The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City for its ACFR for the fiscal year ended June 30, 2021. This marks the 3rd consecutive year the City has received this award.

The Certificate of Achievement is a prestigious national award recognizing conformance with the highest standards for preparation of state and local government financial reports. To receive this award, the City published an easily readable and efficiently organized ACFR. The report satisfied accounting principles generally accepted in the United States of America and applicable legal requirements. We believe this ACFR also meets the requirements of the program, and we will be submitting it to the GFOA to determine its eligibility for the certificate.

The professionalism, commitment, and effort of each employee of the entire staff of the Administrative Services Department have made this report possible. We also want to thank the other employees in the other City Departments who contributed to the preparation of this report and dedication to the City. Finally, we thank the Mayor and City Council for their continuing interest and support in planning and conducting the City's financial operations in a responsible manner, consistent with the City's mission to protect, preserve and enhance the quality of life for present and future generations.

I would like to express my special appreciation to the Administrative Services Team, specifically Angela Courter and Neil Tomlinson. I would also like to thank the Mayor and City Council Members for their support, stewardship and commitment in planning and conducting the financial affairs and the long-term fiscal health of the City in a responsible and efficient manner.

For more information about the City of Cotati or to view the ACFR online, visit the City website at www.cotaticity.org
Respectfully submitted,
Damien O'Bid
City Manager
Awards and Acknowledgements

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Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial Financial Section
Independent Auditors Report,
Management Discussion and Analysis,
Financial Statements,
and Notes to the Financial Statements
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Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial INDEPENDENT AUDITOR’S REPORT
To the Honorable Mayor and Members
of the City Council of the City of Cotati
Cotati, California
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Cotati (City), as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise City’s basic financial statements as listed in the table of contents.

In our opinion, the accompanying financial statements present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City, as of June 30, 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 (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

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

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

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Cotati, California

Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS, 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 information, pension plan and OPEB plan information on pages 5-14 and 81-86 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

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Cotati, California

auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The major capital project fund budgetary comparison schedule, combining and individual nonmajor fund financial statements, budgetary comparison schedules, and sales tax Measure S funding schedule are presented for purposes of additional analysis and are not a required part of the basic financial statements.

The major capital project fund budgetary comparison schedule, combining and individual nonmajor fund financial statements, budgetary comparison schedules, and sales tax Measure S funding schedule are the responsibility of management and were derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the major capital project fund budgetary comparison schedule, combining and individual nonmajor fund financial statements, budgetary comparison schedules, and sales tax Measure S funding schedule are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Other Information
Management is responsible for the other information included in the annual comprehensive financial report. The other information comprises the information included in the annual comprehensive financial report but does not include the financial statements and our auditor's report thereon. Our opinions on the financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.

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Cotati, California

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 20, 2022 on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.

Badawi and Associates, CPAs
Berkeley, California
December 20, 2022

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Discussion & Analysis
As management of the City of Cotati (City), we offer readers of the City’s financial statements this narrative overview and analysis of the City’s financial activities for the fiscal year ended June 30, 2022. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in the City’s basic financial statements, which immediately follow this section.

Government-Wide Financial Statements
 At the close of the fiscal year, the assets and deferred outflows of the City exceeded liabilities and deferred inflows of resources by $54.9 million (Total net position in the government wide.)
 As of June 30, 2022, the City’s governmental activities reported a net position of $39.4 million (See Table 2).
 As of June 30, 2022, the City’s business-type activities reported a net position of $15.5 million (See Table 2).

Fund Financial Statements
 As of the close of the current fiscal year, the City’s governmental funds reported a combined ending fund balance of $18.2 million.
 Within the governmental funds ending fund balance, $1.9 million was restricted for capital projects, $3.2 million is reserved for housing, and $6.2 million is unassigned. (See Governmental Funds Balance Sheet June 30, 2022).

The General Fund reported total fund balance of $9.0 million of which $0.5 million is non-spendable, $2.1 million is committed for emergencies, $143 thousand is assigned for encumbrances, and $6.2 million is unassigned. The continuing overall increase in governmental fund balance indicates financial success for the year.

This annual report consists of five parts – management’s discussion and analysis (this section), the basic financial statements, required supplementary information, a supplemental informational section that presents combining statements for non-major governmental funds as well as the schedule of Measure S revenues and uses, and the statistical section. The financial statements include two kinds of statements that present different views of the City:
 The first two statements are government-wide financial statements that provide both long-term and short-term information about the City's overall financial status.
 The remaining statements are fund financial statements that focus on individual parts of the City government, reporting the City's operations in more detail than the government-wide statements.  The governmental funds statements tell how general government services like public safety were financed in the short term as well as what remains for future spending.  Proprietary fund statements offer short and long-term financial information about the activities the government operates like businesses, such as the water and wastewater system.

The financial statements also include notes that explain some of the information in the financial statements and provide data that are more detailed. The statements are followed by a section of required supplementary information that further explains and supports the information in the financial statements. In addition to these required elements, we have included a section with combining statements that provide details about the City’s Financial Highlights
Overview of Financial Statements
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Discussion & Analysis
non-major funds, each of which are added together and presented in single columns in the basic financial statements.

Table 1 summarizes the major features of the City's financial statements, including the portion of the City government they cover and the types of information they contain. The remainder of this overview section of management’s discussion and analysis explains the structure and contents of each of the statements.

Table 1
Major Features of City of Cotati’s Government-Wide and Fund Financial Statements Fund Statements
Government Wide Statements Governmental Funds Proprietary Funds Scope Entire City Government The activities of the City that are not proprietary or fiduciary, such as police, public works and parks
Activities the City operates similar to private
businesses: the water and wastewater systems.

Required financial
statements
Statement of Net Position Balance sheet Statement of net position Statement of Activities Statement of revenues, expenditures and changes in fund balances
Statement of revenues expenses, and changes in
net position
Statement of cash flows
Accounting basis and
measurement focus
Accrual accounting and economic
resources focus
Modified accrual accounting and current financial resources focus
Accrual accounting and economic resources focus
Type of asset/liability
information
All assets and liabilities, both
financial and capital, and short-term
and long-term
Only assets expected to be used up and liabilities that come due during the year or soon thereafter; no capital assets included
All assets and liabilities, both financial and capital, and short-term and long-term
Type of inflow/outflow
information
All revenues and expenses during
year, regardless of when cash is
received or paid
Revenues for which cash is received during or soon after the end of the year; expenditures when goods or services have been received and payment is due during the year or soon thereafter
All revenues and expenses
during year, regardless of when cash is received or
paid
Government-Wide Statements:

The government-wide statements report information about the City using accounting methods like those used by private-sector companies. The statement of net position includes all the government’s assets and liabilities. All the current year’s revenues and expenses are accounted for in the statement of activities regardless of when cash is received or paid.

The two government-wide statements report the City’s net position and its respective changes.

The Statement of Net Position – presents information on all of the City’s Assets and Deferred Outflows of Resources, and Liabilities and Deferred Inflows of Resources with the difference reported as Net Position and is one way to measure the City's financial health, or position. Over time, increases or decreases in the City's net position are an indicator of whether its financial health is improving or deteriorating, respectively.

The Statement of Activities presents the most recent fiscal year changes in the City’s net position. 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. The statement reports items resulting in cash flows in future fiscal periods (e.g., uncollected taxes, and earned but unused vacation leave) as revenues and expenses.

The government-wide financial statements of the City are divided into two categories:
 Governmental activities – Most of the City's basic services are included here, such as police, streets, parks, community development, and general administration. Property taxes, sales taxes, and state and federal grants finance most of these activities.
 Business-type activities – The City charges fees to customers to help it cover the costs of certain services it provides. The City's water and wastewater system are included here. 6 8.A.a
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Fund Financial Statements:

The fund financial statements provide detailed information about the City's significant funds, not the City as a whole. Funds are accounting devices that the City uses to keep track of specific sources of funding and spending for those purposes. The City has two kinds of funds:
 Governmental funds – Most of the City's basic services are included in governmental funds. The City supports individual governmental funds organized according to their type (special revenue, debt service, capital projects and permanent funds). Information is presented separately in the Governmental Funds Balance Sheet and in the Governmental Funds Statement of Revenues for the City’s General Fund, Inclusionary Housing Fund, Low Income Housing Fund, ARPA Fund, and the City Capital Projects Fund, all of which are major funds. All other governmental type funds are aggregated and are presented in a separate single column in the fund financial statements.

The Governmental Funds Statements focus on (1) how cash and other financial assets that can readily be converted to cash flow in and out and (2) the balances left at year-end that are available for spending.

Consequently, the governmental funds statements provide a detailed short-term view that helps determine whether there are more or fewer financial resources that can be spent soon to finance the City's programs.

Because this information does not encompass the additional long-term focus of the government-wide statements, we supply additional information at the bottom of the governmental funds statement, or on the subsequent page, that explains the relationship (or differences) between them.

Individual and combining fund data for each of these non-major governmental funds is provided as supplementary information in this report.
 Proprietary funds are used to account for services for which the City charges external, or internal customers with the intent to recover all or most of their costs through user fees and charges. The City supports the following two types of proprietary funds:
 Enterprise Funds report the same functions presented as business-type activities in the Government-wide Financial Statements. The City uses enterprise funds to account for Water and Wastewater.  Internal Service Funds are an accounting device used to accumulate and distribute costs internally among the City’s various functions. The City’s internal service funds account for Vehicle Replacement, and Compensated Absences. Since these services benefit governmental rather than business-type functions, they are consolidated within governmental activities in the Government-wide Financial Statements Proprietary funds supply the same type of information as the Government-wide Financial Statements, only in more detail. The proprietary funds financial statements provide separate information for Water and Wastewater. The two internal service funds are combined into a single, aggregated presentation in the proprietary funds financial statements.

Fiduciary Funds 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. Fiduciary fund accounting is like proprietary fund accounting. The City reported two fiduciary funds. One Private Purpose Trust Fund and one Custodial Fund.

Notes to the Financial Statements provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements.

Required Supplementary Information (RSI) is presented in addition to the basic financial statements and accompanying notes. This required information includes the Budgetary Comparison Schedules for General Fund and major Special Revenue Funds, the Schedule of Changes in Net Pension Liability and Related Ratios, Schedule of Proportionate Share of the Net Pension Liability, Schedule of Employer Plan Contributions for Pension, and the Schedule of Changes in Net OPEB Liability and Related Ratios. 7 8.A.a
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Discussion & Analysis
This section provides analysis of the government-wide financial statements including long-term and short-term information about the City’s overall financial condition. The following tables address the financial results of the City as a whole.

The following table is a condensed comparative analysis of the net position of governmental and business-type activities as of June 30, 2021, and June 30, 2022:

TABLE 2
Summary of Net Position
As of June 30, 2021 (restated), and 2022
(in million dollars)
Governmental Activities Business Type Activities TOTAL Change 2022 2021 $ Change 2022 2021 $ Change 2022 2021 % $
ASSETS
Current and Other Assets $ 14.8 $ 14.6 $ 0.2 $ 6.7 $ 6.3 $ 0.4 $ 21.5 $ 20.9 2.9 % $ 0.6 Internal Balances 1.9 0.9 1.0 (1.9) (0.9) (1.0) - - 0.0 % - Long Term Receivables 1.1 1.1 - - - - 1.1 1.1 0.0 % -
Leases Receivable - - - 0.8 - 0.8 0.8 - 100.0 % 0.8
Capital Assets 32.2 27.9 4.3 12.0 12.6 (0.6) 44.2 40.5 9.1 % 3.7 Total Assets 50.0 44.5 5.5 17.6 18.0 (0.4) 67.6 62.5 8.2 % 5.1

DEFERRED OUTFLOWS OF RESOURCES
Pension Plan Contributions and
Timing Differences 6.9 1.9 5.0 1.5 0.5 1.0 8.4 2.4 250.0 % 6.0

LIABILITIES
Current Liabilities 1.3 0.9 (0.1) 0.4 0.6 (0.2) 1.7 1.5 13.3 % 0.2 Noncurrent Liabilities 11.6 9.1 2.5 1.2 2.1 (0.9) 12.8 11.2 14.3 % 1.6 Total Liabilities 12.9 10.0 2.9 1.6 2.7 (1.1) 14.5 12.7 14.2 % 1.8

DEFERRED INFLOWS OF RESOURCES
Pension Plan Differences in Projections 4.6 0.6 4.0 1.9 0.1 1.8 6.5 0.7 828.6 % 5.8

NET POSITION
Invested in Capital Assets 30.5 27.9 2.6 12.0 12.6 (0.6) 42.5 40.5 4.9 % 2.0 Restricted 7.4 5.7 1.7 - - - 7.4 5.7 29.8 % 1.7
Unrestricted 1.5 2.0 (0.5) 3.5 3.1 0.4 5.0 5.1 (2.0)% (0.1) Total Net Position $ 39.4 $ 35.6 $ 3.8 $ 15.5 $ 15.7 $ (0.2) $ 54.9 $ 51.3 7.0 % $ 3.6 Analysis of the total net position: (Refer to Table 2 above for all balances discussed.) The City’s total net position (government and business-type activities) increased by $3.6 million, or 7.0% during the fiscal year.

Net investment in Capital Assets is the largest portion of the City’s net position. It is comprised of capital assets (i.e., land, building, roads, machinery, and equipment) less any related outstanding long-term debt used to acquire those assets, which the City currently does not have. The City uses these capital assets to provide services to citizens; as such, these assets are not available for future spending. The $2.0 million, or 4.9% increase in net investment in capital assets was mainly due to major work on streets improvement capital projects and roofing replacement for the City Civic Center and procurement of emergency equipment.

Restricted Net Position of $7.4 million represents resources that are subject to external restrictions on their use, or by enabling legislation. Restricted net position is mainly comprised of amounts restricted for housing ($4.3 million or 58.6%) capital and street projects ($2.6 million or 35.6%), and other ($0.4 million, or 5.8%).

Restricted net position increased by $1.7 million, or 29.8%, primarily due to funds required for housing and streets projects.

Financial Analysis of the City as a Whole
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Unrestricted Net Position in the amount of $5.0 million represents net position of the City that is not restricted for any project or purpose. The decrease of $0.1 million, or 2.0%, was primarily due the use of funds for investing in capital infrastructure improvements.

Current and Other Assets increased by $0.6 million, or 2.9% due to a $0.9 million increase in governmental activities in net receivables from the City’s allocation of the Federal American Rescue Act (ARPA) Funds and a $0.5 million increase in prepayments primarily for personnel city government insurance. These increases were offset by a $0.8 million decrease in cash and cash equivalents as the cash was utilized for the prepayments as well as investing in capital infrastructure improvements. City-wide capital assets increased $3.7 million or 9.1% over the prior year. The majority of capital assets were city improvements for streets as described on page 15.

Current and Other Liabilities increased over the prior year with a change of $1.8 million or 14.3%. The variance is primarily due to the full implementation of GASB 87 and recording of the increased lease liability due to the issuance of the $6.0 million lease-backed bonds ($4.0 million for Taxable Pension Bonds and $2.0 million in Tax-Exempt for Streets Improvement Bonds). This increase was offset by the decrease in Net Pension Liability due to the reduction in CalPERS pension liability primarily related to the increase in expected contributions in excess of actual contributions.

Deferred Outflows of Resources increased $6.0 million and Deferred Inflows of Resources also increased $5.8 million due to changes in pension plan contributions and future liabilities.

The following table is a condensed comparative analysis of the changes in net position of governmental and business type activities for fiscal years ended June 30, 2021 (restated), and 2022. The restatement for the fiscal year ended June 30, 2021, is due to the implementation of GASB 87.

TABLE 3
Changes in Net Position
For the Fiscal Years Ended June 30, 2021 (restated) and 2022. (in million dollars)
Governmental Activities Business Type Activities TOTAL
2022 2021 %
Change
$
Change 2022 2021 % Change
$
Change 2022 2021 % Change
$
Change

REVENUES
Program Revenues
Charges for Services $ 2.1 $ 2.4 $ (0.3) $ 5.4 $ 5.0 $ 0.4 $ 7.5 $ 7.4 1.0 % $ 0.1 Operating Grants and Contributions 2.3 0.7 1.6 - - - 2.3 0.7 224.9 % 1.6 Capital Grants and Contributions - - - - - - - - 0.0 % - General Revenues
Property Taxes 1.9 1.8 0.1 - - - 1.9 1.8 7.2 % 0.1
Sales and Other Taxes 7.8 7.2 0.6 - - - 7.8 7.2 8.3 % 0.6 Other - 0.2 (0.2) - - - - 0.2 (100.0)% (0.2)
Total Revenues 14.1 12.3 14.6 % 1.8 5.4 5.0 7.2 % 0.4 19.5 17.3 12.4 % 2.2

EXPENSES
General Government 1.8 1.1 0.7 - - - 1.8 1.1 57.2 % 0.7 Public Safety 4.2 4.2 - - - - 4.2 4.2 0.0 % -
Public Works 2.4 1.9 0.5 - - - 2.4 1.9 29.2 % 0.5
Community Development 1.7 1.0 0.7 - - - 1.7 1.0 74.8 % 0.7 Interest on Long Term Debt 0.2 - 0.2 0.2 - (100.0)% 0.2 Water - - - 2.0 2.3 (0.3) 2.0 2.3 (13.0)% (0.3)
Sewer - - - 3.6 3.4 0.2 3.6 3.4 4.7 % 0.2
Total Expenses 10.3 8.2 26.0 % 2.1 5.6 5.7 (2.4)% (0.1) 15.9 13.9 14.3 % 2.0 Revenue over (under) expenses 3.8 4.1 (0.3) (0.2) (0.7) 0.5 3.6 3.4 4.9 % 0.2 Change in net position 3.8 4.1 (8.1)% (0.3) (0.2) (0.7) (71.5)% 0.5 3.6 3.4 4.9 % 0.2 Net position, beginning of period, 35.6 31.5 4.1 15.7 16.4 (0.7) 51.3 47.9 7.1 % 3.4 Net position, end of period $ 39.4 $ 35.6 10.6 % $ 3.8 $ 15.5 $ 15.7 (1.3)% $ (0.2) $ 54.9 $ 51.3 7.0 % $ 3.6 Analysis of the changes in Net Position
Governmental and Business Type Activities increased the City’s net position by $3.6 million, or 7.0% to $54.9 million for the year ended June 30, 2022, with Governmental Activities accounting for 71.8% of the City’s total net position. These changes are discussed in more detail below. 9 8.A.a
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Discussion & Analysis
Analysis of Governmental Activities
Governmental activities: Net position of the City's governmental activities increased by $3.8 million to $39.4 million in the current year.

Revenues: Total revenues for governmental activities increased by $1.8 million or 14.6% when compared with the prior year. Revenues are divided into two categories: Program Revenues, which derive from the program itself such as fees and charges or from outside the City’s tax base, and General Revenues that are not program related such as taxes.

Program Revenues had an overall increase from the prior year by $1.3 million, or 41.6%, to $4.4 million.  Charges for services decreased by approximately $0.3 million or 11.9% primarily related to decreased development fees collected by community development as major housing projects were primarily completed in the prior year.
 Operating grants and contributions increased by $1.6 million mostly through the ARPA grant of $1.7 million and State Housing Grants for Community Development for $0.2 million, offset by a decrease in grant funding of both $0.3 million for Public Safety Office of Traffic Safety (OTS) grants and $0.1 million Public Works grants from Community Development Block Grant (CDBG) for the Westside Sidewalk Improvement project.

General Revenues had an overall increase of $1.8 million or 14.6%. Of this amount, Sales taxes contributed the most to this change with an approximate increase of $0.5 million or 6.9%. This increase was due to increased earnings from the County Pool due to the Wayfair ruling for distribution of sales taxes for online sales as well as continued operations and customer demand of key sales tax businesses within the City as we have emerged from COVID-19. Other increases in Property Tax of $0.1 million is due to increased valuations for property assessments and new housing development completed in prior year. Other Taxes also increased by $0.1 million primarily due to increased growth for existing cannabis retail business.

Expenses Total expenses for governmental activities increased $2.1 million from the prior year, a 26.0% increase.

The primary reason for this increase is due to the additional discretionary payment (ADP) made to CalPERS. Other general government expenditures increased for Community Development related to funding provided to Burbank Housing of almost $0.3 million to support sustaining affordable housing within the City. Additionally, Community Development provided more State Mandated Projects around housing development which required more consultant work previously not required. Lastly, the Public Works Department also had increased expense related to maintenance projects around the City.

Analysis of Business Type Activities
These resources cannot be used for governmental activities, as they are restricted for the continuing operations of the water and wastewater systems. The net position of business-type activities decreased by $0.2 million, or

1.3% to $15.5 million due to the following:

Revenues: Total revenues for business-type activities increased $0.4 million or 7.2% due to rate increases for both Water and Wastewater services in line with our water and sewer rate plan but was offset by decreased water consumption due to the ongoing statewide drought and mandated conservation efforts.

Expenses: Total expenses for business-type activities decreased by approximately $0.1 million or 2.4%. This decrease is primarily due to the decreased cost for purchased water for distribution due to water conservation efforts. This decreased cost was offset by the increased cost of staffing and other contract services. 10 8.A.a
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Discussion & Analysis
TABLE 4
Government Wide – Percentage of Revenues and Expenses by Account Type As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Funds are accounting devices that the City uses to keep track of specific sources of funding and spending for purposes. The fund financial statements focus on individual parts of the City government, reporting City operations in more detail than the government-wide statements.

Governmental Funds
The City’s governmental funds provide information on near-term inflows, outflows, and balances of spendable resources. The City’s governmental funds reported a combined fund balance on June 30, 2022, of $15.4 million, an increase of $1.4 million over the end of the previous fiscal year. (See Statement of Revenues Expenditures and Changes in Fund Balance Government Funds for the year ending June 30, 2022).

The General Fund is the chief operating fund of the City and the overall fund balance decreased by just over $0.1 million or 1.4%. This decrease is mostly attributed to the wash of revenues due to the decrease in charges for services related to development projects of approximately $0.3 million offset by the increase in sales tax of $0.5 million due to increased business activity moving away from COVID-19 closures. Meanwhile as revenues remained almost flat, expenditures expanded as the City continued to invest back into the community with infrastructure projects around streets as well as pay down pension liability.

The changes within the City’s other major funds include:
 Inclusionary Housing Fund with a year-end fund balance of $3.0 million, a decrease of $0.3 million due to payments for Burbank Housing and previously described. This balance is fully reserved for affordable housing.
 Low Income Housing Fund and the ARPA 2021 Fund both have an ending fund balance of $0.0 million.

The Low Income Housing Fund balance is accrued and has been deferred for a future period to be used for low-income housing projects. The ARPA 2021 Fund was transferred to the General Fund as a source for revenue replacement due to COVID-19 impacts. This funding allowed the City to continue work on the West Side Street Project.
 City Capital Projects Fund with a year-end fund balance of approximately $0.1 million which is fairly consistent with prior year, and is retained for future capital projects.

Financial Analysis of the City’s Fund Statements
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Discussion & Analysis
See additional detail at the Statement of Revenues Expenditures and Changes in Fund Balance Government Funds for the year ending June 30, 2022.

The City’s non-major funds ended Fiscal Year 2021/22 with a fund balance of over $3.2 million, an increase of $1.9 million over the prior fiscal year (as restated). Most of these resources are restricted for use on street capital projects ($1.9 million), community development projects ($0.2 million), and other special purposes. (See Statement of Revenues Expenditures and Changes in Fund Balance Government Funds for the year ending June 30, 2022).

Proprietary Funds
The City’s proprietary funds provide the same type of information found in the Government-Wide Financial Statements, but in more detail. Factors concerning these funds have been previously addressed in the discussion of business-type activities under the Government-Wide Statements.

Over the course of the year, the City Council revised the City budget several times. These budget amendments fall into two categories; (1) Changes made at the midyear budget review for unanticipated revenues and costs; (2) Increases in appropriations for projects or contracts as needed to manage and prevent budget overruns.

For the General Fund actual revenues exceeded the budget by $0.5 million, while actual operating expenditures were over budget by $0.8 million due to previously encumbered funds for contract services being released. Final ending fund balance for the fiscal year compared to final budget had a positive variance of $1.4 million.

For a more detailed description of budgetary changes and variances, please see the Budgetary Comparison Schedule for the General Fund, included within the Required Supplementary Information section of this report.

At the end of 2021/22, the City had invested $69.6 million (net of accumulated depreciation) in a broad range of capital assets, including equipment, vehicles, buildings, park facilities, and water and wastewater systems (See Table 5). This year’s major capital assets additions included:
 Street Improvements and Traffic Safety $1,900,000
 Public Works Vehicles and Emergency Equipment approximately $63,000  Pathway and Wayfinding Signage of approximately $353,000  Civic Center Improvements $402,000
The City’s Capital Assets as of June 30, 2021, and 2022 is provided next and additional information relative to capital assets is contained in Note 1 Section F and Note 6 of the general-purpose financial statements.

General Fund Budgetary Highlights
Capital Assets and Debt Administration
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TABLE 5
Capital Assets
As of June 30, 2021 (restated) and 2022
(in million dollars)
Governmental
Activities
Business Type
Activities TOTAL
2022 2021 2022 2021 2022 2021 % Change $ Change
Capital assets
Land $ 8.6 $ 8.6 $ - $ - $ 8.6 $ 8.6 0 % $ -
Construction in progress 5.2 0.4 - - 5.2 0.4 1,200 % 4.8 Buildings 10.0 10.0 - - 10.0 10.0 0 % -
Vehicles 1.7 1.6 0.1 0.1 1.8 1.7 6 % 0.1
Equipment 0.7 0.7 0.1 0.1 0.8 0.8 0 % -
Water and Sewer Lines - - 19.2 19.2 19.2 19.2 0 % -
Improvements 22.7 22.4 1.3 1.3 24.0 23.7 1 % 0.3
Leased Assets - - - - - - 0 % -
Total Capital Assets $ 48.9 $ 43.7 $ 20.7 $ 20.7 $ 69.6 $ 64.4 8 % $ 5.2 * This table does not include accumulated depreciation or amortization.

For further financial data see footnote 6 within the basic financial statements.

Long-term Obligations
South Sonoma Business Park
As of June 30, 2022, special assessment bonds for $3.5 million were outstanding, of which approximately $0.3 million is considered a current liability. The purpose of these bonds is to facilitate a wetlands mitigation project and is secured by assessments levied against property owners within the assessment districts. After the fiscal year end the special assessment bond was refinanced to leverage lower interest rates while retaining the same maturity period.

Compensated absences:

As of June 30, 2022, approximately $0.6 million was owed to government employees for vacation leave and other compensated absences. These benefits are recorded as a liability to the City as the benefits are earned by the employees if the leave is attributable to past service and it is probable that the employer will compensate the employees for the benefits through paid time off or some other means, such as cash payments at termination or retirement.

Net Pension and Other Post-Employment Benefits (OPEB) Liability GASB Statement No. 68 significantly revamped the accounting and financial reporting for government employers that provide pension benefits and other post-employment benefits. Statement 68 as it pertains to the CalPERS Pension Benefit has required a “net pension liability” of $6.7 million to be reported on the statement of net position for the City as of June 30, 2022.

For the City's OPEB benefits, as now defined for reporting under GASB Statement No. 75, a $0.2 million liability was also reported within the total OPEB liability as of June 30, 2022 (see Statement of Net Position). More detailed information about long-term debt activity is included in Notes 9 and 10. 13 8.A.a
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Discussion & Analysis
The City annually prepares a financial plan, which focuses on the long-term financial viability and allows decision makers to understand the future impact of policy decisions made today. Multi-year planning provides both an early warning of adverse financial trends and more time to implement changes to ensure better outcomes.

Budget development is guided by a series of policies adopted by the City Council, which guides long-term planning, minimum reserve levels, employee compensation, cash and debt management, and utility rates. The City's FY 2022/23 budget which includes the Five-Year Capital Improvement Program budget can be found at https://www.cotaticity.org/188/City-Budgets.

The budget was based on these key assumptions:
 Property Tax - The budget projection for 2022/23 assumes 2.4% increases in property tax collections, due to improved resale market and completion of current development at Kessing Ranch.  Sales Tax (Bradley Burns and Measure S) - The budget projection for 2022/23 assumes continued modest growth during this recovery period from COVID-19 as well as offsetting increased cost of sales and possible decline in customer purchases related to inflation  Water and Wastewater revenues increase slightly due to increased rates offset by continued decreased consumption during the drought as well as reduced connection fees, as new development projects are not currently actively building or pulling permits.
 Usage of up to $7.0 million for continued street improvement projects funded by the tax-exempt streets bond
 Salaries and benefits were projected to increase based on negotiations with labor unions as well as increased staffing costs such as workers compensation insurance, health benefits and pension contributions.
 Increased general liability insurance for the City due to increasing rates in the insurance market.

Although the City has made considerable progress, unfunded liabilities will continue to present challenges to longterm financial solvency and service level solvency. As such the City is committed to applying financial strategies as outlined in our Unfunded Liability Management Policy to address this ongoing risk area.

This financial report is designed to provide our citizens, taxpayers, customers, investors, and creditors with a general overview of the City's finances and to demonstrate the City's accountability for the money it receives. If you have questions about this report or need additional financial information, contact Admin Services, City of Cotati, 201 W. Sierra Ave, Cotati, CA 94931.

Economic Factors and Next Year’s Budgets
Contacting the City’s Financial Management
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FINANCIAL STATEMENTS
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Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial

GOVERNMENT-WIDE

FINANCIAL STATEMENTS
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Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Statement of Net Position
June 30, 2022
Governmental Business-type
Activities Activities Total
ASSETS
Current assets:

Cash and cash equivalents $ 5,682,864 11,453,908 $ 17,136,772 $ Net receivables 2,812,347 802,904 3,615,251
Internal balances 1,881,234 (1,881,234) -
Prepayments 485,752 175,617 661,369
Total current assets 16,633,241 4,780,151 21,413,392
Noncurrent assets:

Long-term notes receivable 1,160,428 - 1,160,428
Leases receivable - 771,147 771,147
Capital assets:

Nondepreciable 13,825,765 - 13,825,765
Depreciable, net 18,352,078 12,037,960 30,390,038
Total capital assets 32,177,843 12,037,960 44,215,803
Total noncurrent assets 33,338,271 12,809,107 46,147,378 Total assets 49,971,512 17,589,258 67,560,770

DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows of resources - pension 6,860,210 1,472,316 8,332,526 Deferred outflows of resources - OPEB 13,309 - 13,309
Total deferred outflows of resources 6,873,519 1,472,316 8,345,835

LIABILITIES
Current liabilities:

Accounts payable 289,586 115,939 405,525
Accrued liabilities 200,032 - 200,032
Compensated absences 251,395 168,852 420,247
Deposits 62,468 102,312 164,780
Lease liability - due within one year 487,633 - 487,633 Claims and judgements - due within one year 31,986 9,554 41,540 Total current liabilities 1,323,100 396,657 1,719,757
Noncurrent liabilities:

Lease liability - due in more than one year 5,706,374 - 5,706,374 Compensated absences 105,028 26,460 131,488
Claims and judgements 18,534 5,536 24,070
Net pension liability 5,506,842 1,218,677 6,725,519
Total OPEB liability 207,715 - 207,715
Total noncurrent liabilities 11,544,493 1,250,673 12,795,166 Total liabilities 12,867,593 1,647,330 14,514,923

DEFERRED INFLOWS OF RESOURCES
Deferred inflows of resources - leases 40,215 803,261 843,476 Deferred inflows of resources - pension 4,457,879 1,136,348 5,594,227 Deferred inflows of resources - OPEB 84,487 - 84,487
Total deferred inflows of resources 4,582,581 1,939,609 6,522,190

NET POSITION
Net investment in capital assets 30,483,120 12,037,960 42,521,080 Restricted for:

Capital projects 1,878,764 - 1,878,764
Housing 4,348,269 - 4,348,269
Public safety 64,769 - 64,769
Parks 345,470 - 345,470
Streets 761,117 - 761,117
Public communications 27,197 - 27,197
Total restricted 7,425,586 - 7,425,586
Unrestricted 1,486,151 3,436,675 4,922,826
Total net position $ 39,394,857 $ 15,474,635 $ 54,869,492 Primary Government
See accompanying Notes to Basic Financial Statements
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Statement of Activities
For the year ended June 30, 2022
Operating Capital
Charges for Grants and Grants and
Functions/Programs Expenses Services Contributions Contributions Total Primary Government:

Governmental activities:

General government 1,804,038 $ 1,360,912 $ 179,333 $ - $ $ 1,540,245 Public safety 4,219,712 248,916 1,896,169 - 2,145,085
Community development 1,672,689 447,194 198,934 - 646,128 Public works 2,406,759 56,890 - - 56,890
Interest expense on long-term debt 190,521 - - - -
Total governmental activities 10,293,719 2,113,912 2,274,436 - 4,388,348 Business-type activities
Water 2,040,153 2,334,947 - - 2,334,947
Wastewater 3,617,797 3,083,753 - - 3,083,753
Total business-type activities 5,657,950 5,418,700 - - 5,418,700 Total primary government $ 7,532,612 15,951,669 $ 2,274,436 $ - $ $ 9,807,048 General Revenues:

Taxes:

Property taxes
Sales taxes
Cannabis business tax
Franchise taxes
Other taxes
Total taxes
Interest and rents
Total general revenues
Change in net position
Net position - beginning of year, as restated
Net position - end of year
Program Revenues
See accompanying Notes to Basic Financial Statements
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Activities Activities Total
$ (263,793)$ (263,793) - $
(2,074,627) - (2,074,627)
(1,026,561) - (1,026,561)
(2,349,869) - (2,349,869)
(190,521) - (190,521)
(5,905,371) - (5,905,371)
- 294,794 294,794
- (534,044) (534,044)
- (239,250) (239,250)
(5,905,371) (239,250) (6,144,621)
1,902,006 - 1,902,006
6,418,733 - 6,418,733
644,490 644,490
623,854 623,854
76,429 - 76,429
9,665,512 - 9,665,512
14,322 1,210 15,532
9,679,834 1,210 9,681,044
3,774,463 (238,040) 3,536,423
35,620,394 15,712,675 51,333,069
$ 39,394,857 $ 15,474,635 $ 54,869,492
Net (Expense) Revenue
and Changes in Net Position
See accompanying Notes to Basic Financial Statements
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Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial FUND

FINANCIAL STATEMENTS
Governmental Fund Financial Statements
Proprietary Fund Financial Statements
Fiduciary Fund Financial Statements
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Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial

GOVERNMENTAL FUND FINANCIAL STATEMENTS
The General Fund is the government's primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund.

The Inclusionary Housing Fund is a special revenue fund used to account for in lieu impact fees restricted in use to inclusionary housing purposes.

The Low Income Housing Fund is a fund which was established to conduct the dissolution operations related to low income housing assets and activities of the former Redevelopment Agency.

The ARPA 2021 Fund is an an asset fund generated by the distribution of the federal aid package passed by Congress in March 2021 called the American Rescue Plan Act (ARPA). Of the Act's $1.9 trillion, $350 billion is being distributed to state and local governments as part of the Fiscal Recovery Fund which is to be expended to provide governmental services to the extent of the reduction in revenue due to COVID-19.

The City Capital Project Fund consists of various types of financial resources that are utilized to build, renovate or purchase equipment, property, or facilities, including buildings, parks, information technology systems, and non water/sewer infrastructure and which are to be used to benefit the public. 25 8.A.a
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Balance Sheet
Governmental Funds
June 30, 2022
Inclusionary Low Income Other Total
General Housing Housing ARPA 2021 City Capital Governmental Governmental Fund Fund Fund Fund Project Funds Funds Funds
ASSETS
Cash and investments $ 5,105,470 $ 2,151,768 $ - $ 320,094 - $ $ 3,198,615 $ 10,775,947 Taxes receivable 1,259,450 - - - - 801 1,260,251
Accounts receivable 182,279 24,718 1,088 886,315 14,691 107,205 1,216,296 Leases receivable 40,289 40,289
Due from other governments 93,654 - - - - 201,857 295,511 Interfund loans - 826,613 - - - - 826,613
Due from other funds 2,150,266 - - - - - 2,150,266
Notes receivable - - 1,160,428 - - - 1,160,428
Prepayments 485,752 - - - - - 485,752
Total assets $ 9,317,160 $ 3,003,099 $ 1,161,516 $ 886,315 $ 334,785 $ 3,508,478 $ 18,211,353

LIABILITIES, DEFERRED

INFLOWS OF RESOURCES

AND FUND BALANCES
Liabilities:

Accounts payable $ 211,449 $ - $ - $ - $ 56,806 $ 21,331 $ 289,586 Accrued liabilities 7,637 - - - 192,395 - 200,032
Deposits 62,468 - - - - - 62,468
Due to other funds - - - 886,315 - 209,330 1,095,645
Total liabilities 281,554 - - 886,315 249,201 230,661 1,647,731 Deferred inflows of resources:

Related to leases 40,215 - - - - - 40,215
Unavailable revenues - - 1,161,516 - - - 1,161,516
Total deferred inflows
of resources 40,215 - 1,161,516 - - - 1,201,731
Fund Balances:

Nonspendable 485,752 - - - - 485,752
Restricted for affordable housing - 3,003,099 - - 206,664 3,209,763 Restricted for public safety - - - - 64,769 64,769
Restricted for streets - - - - 761,117 761,117
Restricted for parks - - - - 345,470 345,470
Restricted for public education - - - - 27,197 27,197
Restricted for capital projects - - - - 1,878,764 1,878,764 Committed for capital projects - - - 85,584 77 85,661
Committed for emergencies 2,131,107 - - - - 2,131,107
Assigned for encumbrances 142,939 - - - 142,939
Unassigned 6,235,593 - - - (6,241) 6,229,352
Total fund balances 8,995,391 3,003,099 - - 85,584 3,277,817 15,361,891 Total liabilities, deferred inflows
of resources, and fund balances $ 9,317,160 $ 3,003,099 $ 1,161,516 $ 886,315 $ 334,785 $ 3,508,478 $ 18,211,353 See accompanying Notes to Basic Financial Statements
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Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial Total Fund Balances - Total Governmental Funds $ 15,361,891 Other long-term assets are not available to pay for current period expenditures and are therefore reported as asset, but offset by deferred inflows of resources in the governmental funds. 1,161,516 Capital assets used in governmental activities were not current financial resources. Therefore, they were not reported in the Governmental Funds Balance Sheet. Except for the internal service funds reported below, the capital assets were adjusted as follows:

GovernmentWide
Statement of
Net Position
Internal
Service
Funds Total
Nondepreciable $ - 13,825,765 $ 13,825,765
Depreciable, net 18,352,078 (376,915) 17,975,163
Total capital assets $ 32,177,843 $ (376,915) 31,800,928 Internal service funds were used by management to charge the costs of certain activities, such as vehicle replacement and compensated absences, to individual funds. The assets and liabilities of the Internal service funds were included in governmental activities in the Government-Wide Statement of Net Position.
698,453
In the Government-Wide Financial Statements, deferred employer contributions for pension and OPEB, certain differences between actuarial estimates and actual results, and other adjustments resulting from changes in assumptions and benefits are deferred in the current year.

Deferred outflows of resources related to pension 6,860,210 Deferred outflows of resources related to OPEB 13,309
Deferred inflows of resources related to pension (4,457,879) Deferred inflows of resources related to OPEB (84,487)
Long-term liabilities were not due and payable in the current period.

Therefore, they were not reported in the Governmental Funds Balance Sheet.

GovernmentWide
Statement of
Net Position
Internal
Service
Funds Total
Lease liability - due within one year $ (487,633) $ - (487,633) Claims and judgements payable - due within one year - (31,986) (31,986) Lease liability - due in more than one year - (5,706,374) (5,706,374) Claims and judgements payable - due in more than one year - (18,534) (18,534) Net pension liability - (5,506,842) (5,506,842)
Total OPEB liability - (207,715) (207,715)
Total long-term liabilities $ (11,959,084) $ - (11,959,084) Net Position of Governmental Activities $ 39,394,857
City of Cotati
Reconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Position
June 30, 2022
Amounts reported for governmental activities in the statement of net position are different because:

See accompanying Notes to Basic Financial Statements
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Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds
For the year ended June 30, 2022
Inclusionary Low Income Nonmajor Total
General Housing Housing ARPA 2021 City Capital Governmental Governmental Fund Fund Fund Fund Project Funds Funds Funds
REVENUES:

Property taxes $ 1,873,508 $ - -$ -$ $ 28,498$ - $ 1,902,006 Sales taxes 6,230,425 - - - - 188,308 6,418,733
Other taxes 720,920 - - - - - 720,920
Licenses and permits 689,807 - - - - - 689,807
Intergovernmental 107,218 - - 1,772,630 - 552,383 2,432,231 Charges for services 739,363 - - - 160,489 567,641 1,467,493 Interest and rents 37,696 8,606 - - (26,986) 368 19,684 Miscellaneous 249,997 - - - - 149,664 399,661
Total revenues 10,648,934 8,606 - 1,772,630 160,857 1,459,508 14,050,535 EXPENDITURES:

Current:

General government 1,631,000 264,952 - - - 116,755 2,012,707 Public safety 7,566,318 - - - - 15,429 7,581,747
Community development 1,207,405 - - - - 133,453 1,340,858 Public works 2,156,501 - - - - 98,100 2,254,601
Capital outlay - - - - 5,341,659 130,401 5,472,060
Debt service:

Principal 7,625 - - - - - 7,625
Interest 507 - - - - 190,014 190,521
Total expenditures 12,569,356 264,952 - - 5,341,659 684,152 18,860,119

REVENUES OVER (UNDER)
EXPENDITURES (1,920,422) (256,346) - 1,772,630 (5,180,802) 775,356 (4,809,584)

OTHER FINANCING
SOURCES (USES):

Proceeds from long term debt - - - - - 6,190,014 6,190,014 Transfers in 5,936,632 - - - 5,341,658 2,102,492 13,380,782 Transfers (out) - (4,144,478) - (1,772,630) (350,000) (7,113,674) (13,380,782) Total other financing
sources (uses) 1,792,154 - - (1,772,630) 4,991,658 1,178,832 6,190,014 Net change in fund balances (128,268) (256,346) - - (189,144) 1,954,188 1,380,430 FUND BALANCES:

Beginning of year, as restated 9,123,659 3,259,445 - - 274,728 1,323,629 13,981,461 End of year $ 8,995,391 $ 3,003,099 $ - $ 85,584 - $ 3,277,817 $ $ 15,361,891 See accompanying Notes to Basic Financial Statements
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Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Government-Wide Statement of Activities For the year ended June 30, 2022
Net Change in Fund Balances - Total Governmental Funds $ 1,380,430 Governmental funds report long-term receivables but defer revenue from them until collections are actually received. In the Government-Wide Statement of Activities, principal collections on receivables are not reported as revenues. Disbursements made for long-term loans are recorded as expenditures in the funds, but are not recorded as additions to receivables in the Government-Wide Statement of Activities. 23,010 Governmental funds reported capital outlay as expenditures. However, in the Government-Wide Statement of Activities, the cost of those assets was allocated over their estimated lives as depreciation expense. This was the amount of capital assets recorded in the current period, net of the amount related to internal service funds. 5,164,747 Depreciation expense on capital assets was reported in the Government-Wide Statement of Activities, but did not require the use of current financial resources.

Therefore, depreciation expense was not reported as expenditures in the governmental funds, net of the amount related to internal service funds. (870,953) Debt proceeds provide current financial resources to governmental funds, but issuing debt increased long-term liabilities in the Government-Wide Statement of Net Position.

Repayment of debt was an expenditure in governmental funds, but the repayment reduced long-term liabilities in the Government-Wide Statement of Net Position.

Lease liability repayments 7,625
Issuance of long-term debt (6,190,014)
Claim payments are recorded as expenditures in the governmental funds, however claim expense is recognized as claims are incurred on the Government-Wide Statement of Activities 31,985
Changes in the net pension liability and related deferred inflows and deferred outflows do not use or provide current financial resources and are therefore not reported in the funds. 4,282,334
Changes in the net OPEB liability and related deferred inflows and deferred outflows do not use or provide current financial resources and are therefore not reported in the funds. 2,389
Internal service funds were used by management to charge the costs of certain activities, such as compensated absences and fleet management, to individual funds.

The net revenue of the internal service funds was reported with governmental activities. (57,090)
Change in Net Position of Governmental Activities $ 3,774,463 Amounts reported for governmental activities in the Government-Wide Statement of Activities were different because:

See accompanying Notes to Basic Financial Statements
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Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial

PROPRIETARY FUND FINANCIAL STATEMENTS
The Water Fund accounts for the operations of the City's water distribution system.

The Wastewater Fund accounts for the operations of the City's wastewater collection activities Internal Service Funds account for vehicle replacement and compensated absences provided to other departments or agencies of the government on a cost-reimbursement basis. 31 8.A.a
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Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Statement of Net Position
Proprietary Funds
June 30, 2022
Governmental
Activities
Total Enterprise Internal Service
Water Wastewater Funds Funds
ASSETS
Current assets:

Cash and cash equivalents $ 2,531,740 $ 3,151,124 $ 5,682,864 $ 677,961 Accounts receivable 310,872 431,354 742,226 -
Leases receivable 33,581 33,581
Notes receivable 11,625 15,472 27,097 -
Interfund loans - 95,323 95,323 -
Prepayments 109,141 66,476 175,617 -
Total current assets 2,963,378 3,793,330 6,756,708 677,961 Noncurrent assets:

Interfund loans - 454,767 454,767 -
Leases receivable - 771,147 771,147 -
Capital assets:

Depreciable
Reservoirs - 1,650,972 1,650,972 -
Pipelines and meters 10,174,312 6,003,676 16,177,988 -
Water wells 1,451,506 - 1,451,506 -
Improvements 224,807 1,061,845 1,286,652 -
Equipment - 109,822 109,822 1,691,383
Less accumulated depreciation (3,455,979) (5,183,001) (8,638,980) (1,314,468) Net capital assets 7,052,962 4,984,998 12,037,960 376,915 Total noncurrent assets 4,984,998 8,278,876 13,263,874 376,915 Total assets 7,948,376 12,072,206 20,020,582 1,054,876

DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows of resources - pension 736,158 736,158 1,472,316 - Total deferred outflows of resources 736,158 736,158 1,472,316 -

LIABILITIES
Current liabilities:

Accounts payable 76,018 39,921 115,939 -
Due to other funds 538,650 515,971 1,054,621 -
Claims and judgements 4,777 4,777 9,554 -
Compensated absences 84,426 84,426 168,852 251,395
Interfund loans 95,323 41,981 137,304 -
Deposits 102,312 - 102,312 -
Total current liabilities 901,506 687,076 1,588,582 251,395 Noncurrent liabilities:

Claims and judgements 2,768 2,768 5,536 -
Interfund loans 454,767 784,632 1,239,399 -
Compensated absences 13,230 13,230 26,460 105,028
Net pension liability 609,338 609,339 1,218,677 -
Total noncurrent liabilities 1,080,103 1,409,969 2,490,072 105,028 Total liabilities 1,981,609 2,097,045 4,078,654 356,423

DEFERRED INFLOWS OF RESOURCES
Deferred inflows of resources - leases receivable - 803,261 803,261 - Deferred inflows of resources - pension 568,174 568,174 1,136,348 - Total deferred inflows of resources 568,174 1,371,435 1,939,609 -

NET POSITION
Net investment in capital assets 4,984,998 7,052,962 12,037,960 376,915 Unrestricted 1,149,753 2,286,922 3,436,675 321,538
Total net position $ 6,134,751 $ 9,339,884 $ 15,474,635 $ 698,453 Business-type Activities
See accompanying Notes to Basic Financial Statements
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Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Statement of Revenues, Expenses and Changes in Fund Net Position Proprietary Funds
For the year ended June 30, 2022
Governmental
Activities
Total Enterprise Internal Service
Water Wastewater Funds Funds
OPERATING REVENUES:

Charges for services $ 3,063,175 2,331,192 $ 5,394,367 $ 250,149 $ Other operating revenues 3,755 20,578 24,333 -
Total operating revenues 2,334,947 3,083,753 5,418,700 250,149 OPERATING EXPENSES:

Personnel services 845,910 825,435 1,671,345 170,114
Contractual services 218,686 150,361 369,047 -
Intergovernmental treatment costs - 2,145,506 2,145,506 - Utilities 74,801 15,271 90,072 -
Purchased water 453,915 - 453,915 -
Supplies and materials 144,879 183,547 328,426 2,357
Depreciation 292,815 272,160 564,975 129,405
Total operating expenses 2,031,006 3,592,280 5,623,286 301,876 OPERATING INCOME (LOSS) 303,941 (508,527) (204,586) (51,727) NONOPERATING REVENUES (EXPENSES):

Interest and investment revenues (20,900) 22,110 1,210 (5,363) Interest expense (25,517) (9,147) (34,664) -
Total nonoperating revenues (expenses) (3,407) (30,047) (33,454) (5,363) Income before contributions and transfers (511,934) 273,894 (238,040) (57,090) Change in net position (511,934) 273,894 (238,040) (57,090) NET POSITION:

Beginning of year 9,851,818 5,860,857 15,712,675 755,543 End of year $ 6,134,751 $ 9,339,884 $ 15,474,635 $ 698,453 Business-type Activities
See accompanying Notes to Basic Financial Statements
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Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Statement of Cash Flows
Proprietary Funds
For the year ended June 30, 2022
Governmental
Activities
Total Enterprise Internal Service
Water Wastewater Funds Funds
CASH FLOWS FROM OPERATING ACTIVITIES:

Receipts from customers $ 3,079,226 2,362,682 $ 5,441,908 $ - $ Interfund charges for services - - - 250,149
Payments to suppliers (950,183) (2,688,255) (3,638,438) (2,357) Payments to employees (760,038) (730,866) (1,490,904) (192,594) Net cash provided by (used in) operating activities 652,461 (339,895) 312,566 55,198 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:

Interfund loans - 95,322 95,322 -
Interfund interest (9,147) (25,517) (34,664) -
Repayments of interfund balances (95,322) (41,981) (137,303) - Net cash provided by (used in) noncapital financing activities (104,469) 27,824 (76,645) -

CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:

Purchase of capital assets - - - (112,973)
Net cash provided by (used in)
capital and related financing activities - - - (112,973) CASH FLOWS FROM INVESTING ACTIVITIES:

Interest receipts (20,900) 22,109 1,209 (5,363)
Net cash provided by (used in) investing activities (20,900) 22,109 1,209 (5,363) Net cash flows 527,092 (289,962) 237,130 (63,138)
CASH AND CASH EQUIVALENTS - Beginning of year 2,004,648 3,441,086 5,445,734 741,099 CASH AND CASH EQUIVALENTS - End of year $ 2,531,740 $ 3,151,124 $ 5,682,864 $ 677,961

RECONCILIATION OF OPERATING INCOME (LOSS) TO NET
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES:

Operating income (loss) $ 303,941 $ (508,527) $ (204,586) $ (51,727) Adjustments to reconcile operating income (loss) to
net cash provided by (used in) operating activities:

Depreciation expense 292,815 272,160 564,975 129,405
Changes in assets and liabilities:

Receivables, net 19,713 (828,883) (809,170) -
Prepayments (54,195) (51,456) (105,651) -
Due from other governments (11,431) 21,095 9,664 -
Accounts payable (3,707) (142,114) (145,821) -
Net pension liability (420,589) (390,521) (811,110) -
Other liabilities 525,914 1,288,351 1,814,265 (22,480)
Net cash provided by (used in) operating activities $ 652,461 $ (339,895) $ 312,566 $ 55,198 Business-type Activities
See accompanying Notes to Basic Financial Statements
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Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial

FIDUCIARY FUND FINANCIAL STATEMENTS
The Private Purpose Trust Fund, a fiduciary fund type, accounts for all of the assets, liabilities, and financial activities of the Successor Agency to the City's former Redevelopment Agency that was dissolved effective February 1, 2012.

Custodial Fund, a custodial fund that is used to facilitate a special assessment debt service charged to land owners for the financing provided to develop the business park.
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Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial Cit
y of Cotati
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2022
Private Purpose Custodial
Trust Fund
ASSETS
Cash and cash equivalents $ 317,859 1,318,688 $
Cash with trustees - 269,830
Prepayments 3,644 -
Tax receivable - 830
Notes receivable 1,468,071 -
Capital assets:

Land 287,048 -
Total assets 3,072,547 588,519

DEFERRED OUTFLOWS OF RESOURCES
Deferred loss on debt refunding 89,792 -
Total deferred outflows of resources 89,792 -

LIABILITIES
Accounts payable 62,288 -
Interest payable 25,009 -
Tax allocation bonds 7,754,781 -
Total liabilities 7,842,078 -
NET POSITION (DEFICIT):

Held in trust for :

Successor agency (4,679,739) -
Bondholders - 588,519
Total net position (deficit) $ (4,679,739) $ 588,519
See accompanying Notes to Basic Financial Statements
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Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial Cit
y of Cotati
Statement of Changes in Fiduciary Net Position
Fiduciary Funds
For the year ended June 30, 2022
Private Purpose Custodial
Trust Fund Fund
ADDITIONS:

Net investment income $ - 31,774 $
Assessment revenue - 368,537
Distributions for enforceable obligations 455,911 -
Total additions 487,685 368,537
DEDUCTIONS:

Bond interest 113,899 132,970
Bond principal - 231,343
Administrative costs 73,250 3,275
Payments on pass-through agreements 61,788 -
Bond disclosure 2,850 -
Bond trustee 17,979 -
Total deductions 269,766 367,588
Change in net position 217,919 949
NET POSITION (DEFICIT):

Beginning of year, as restated (4,897,658) 587,570
End of year $ (4,679,739) $ 588,519
See accompanying Notes to Basic Financial Statements
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Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial

NOTES TO BASIC

FINANCIAL STATEMENTS
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Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The basic financial statements of the City of Cotati, California (City) have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to governmental agencies. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. The more significant of the City’s accounting policies are described below.

A. Financial Reporting Entity
The City is a municipal corporation governed by an elected five member City Council. The accompanying financial statements present the government and its component units, entities for which the government is considered to be financially accountable. The City has no component units that are blended or discretely presented in these financial statements. The City’s former redevelopment agency was dissolved by law effective February 1, 2012. The City elected to serve as the successor custodian of the residual assets and obligations of the former agency. Accordingly, the assets, liabilities and financial transactions of the former agency were transferred on the effective date to a fiduciary fund (private purpose trust fund) and are accounted for in these financial statements as a fiduciary fund. These fiduciary funds are excluded from the City’s government-wide statement of net position, statement of activities, and fund statements because fiduciary funds are not available for use by the City.

B. Basis of Accounting and Measurement Focus
The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting entity with its own self-balancing set of accounts that comprise its assets, deferred outflows of resources, liabilities, deferred inflows of resources, fund balance or net position, revenues, and expenditures or expenses. These funds are established for the purpose of carrying out specific activities or certain objectives in accordance with specific regulations, restrictions, or limitations. Governmental resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled.

Government-Wide Financial Statements
The City’s government-wide financial statements include a Statement of Net Position and a Statement of Activities. These statements present summaries of Governmental and Business-Type Activities for the City accompanied by a total column.
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Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Notes to Basic Financial Statements
For the Year Ended June 30, 2022

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED B. Basis of Accounting and Measurement Focus, Continued Government-Wide Financial Statements, Continued
These financial statements are presented on an “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all of the City’s assets, deferred inflows/outflows of resources, and liabilities, including capital assets, as well as infrastructure assets, and long-term liabilities, are included in the accompanying Statement of Net Position. The Statement of Activities presents changes in net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liabilities are incurred.

Certain types of transactions reported as program revenues for the City are reported in three categories:
 Charges for services
 Operating grants and contributions
 Capital grants and contributions
Certain eliminations have been made in regards to interfund activities, payables, and receivables. All internal balances in the Statement of Net Position have been eliminated except those representing balances between the governmental activities and the business-type activities, which are presented as internal balances and eliminated in the total primary government column. In the Statement of Activities, internal fund transaction balances have been eliminated; however, those transactions between governmental and business-type activities have not been eliminated. The following interfund activities have been eliminated:
 Due to/from other funds
 Advances to/from other funds
 Transfers in/out
The City applies all applicable GASB pronouncements including all NCGA Statements and Interpretations currently in effect.

Governmental Fund Financial Statements
Governmental fund financial statements include a Balance Sheet and a Statement of Revenues, Expenditures, and Changes in Fund Balances for all major governmental funds and nonmajor funds aggregated. An accompanying schedule is presented to reconcile and explain the differences in fund balance as presented in these statements to the net position in the government-wide financial statements.

The City has presented all major funds that meet specific qualifications. 42 8.A.a
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Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Notes to Basic Financial Statements
For the Year Ended June 30, 2022

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED B. Basis of Accounting and Measurement Focus, Continued Governmental Fund Financial Statements, Continued
All governmental funds are accounted for on a spending or “current financial resources” measurement focus and the modified accrual basis of accounting. Accordingly, only current assets and current liabilities are included on the balance sheets. The Statement of Revenues, Expenditures and Changes in Fund Balances present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Under the modified accrual basis of accounting, revenues are recognized in the accounting period in which they become both measurable and available to finance expenditures in the current period.

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

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

Inclusionary Housing Fund – is a special revenue fund used to account for in lieu impact fees restricted in use to inclusionary housing purposes.

Low Income Housing Fund – is a fund which was established to conduct the dissolution operations related to low-income housing assets and activities of the former Redevelopment Agency.

ARPA 2021 Fund – is a fund which was established to account for the receipt and spending of the American Rescue Plan Act.

City Capital Project Fund – consists of various types of financial resources that are utilized to build, renovate or purchase equipment, property, or facilities, including buildings, parks, information technology systems, and non water/sewer infrastructure and which are to be used to benefit the public.

Revenues are recorded when received in cash, except that revenues subject to accrual (generally those received within 60 days after year-end) are recognized when due. The primary revenue sources that have been treated as susceptible to accrual by the City are property taxes, taxpayer-assessed tax revenues (sales taxes, transient occupancy taxes, franchise taxes, etc.), grant revenues and earnings on investments.

Expenditures are recorded in the accounting period in which the related fund liability is incurred.

The reconciliation of the Fund Financial Statements to the Government-Wide Financial Statements is provided.

Proprietary Fund Financial Statements
Proprietary fund financial statements include a Statement of Net Position, a Statement of Revenues, Expenses and Change in Net Position, and a Statement of Cash Flows. 43 8.A.a
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Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Notes to Basic Financial Statements
For the Year Ended June 30, 2022

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED B. Basis of Accounting and Measurement Focus, Continued Proprietary Fund Financial Statements, Continued
A column representing internal service funds is also presented in these statements. However, internal service balances and activities have been combined with the governmental activities in the GovernmentWide Financial Statements.

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

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

The City reports the following enterprise funds as proprietary funds of the City:

Water Fund – accounts for the operations of the City’s water distribution system.

Wastewater Fund – accounts for the operation of the City’s wastewater collection activities.

Additionally, the City reports the following fund type:

Internal service funds – account for vehicle replacement and compensated absences provided to other departments or agencies of the government on a cost-reimbursement basis.

Fiduciary Fund Financial Statements
Fiduciary fund financial statements consist of a Statement of Fiduciary Net Position and a Statement of Changes in Fiduciary Net Position. The City has two types of fiduciary funds, a private-purpose trust fund and a custodial fund. Private purpose trust funds account for all other trust arrangements in which principal and income benefit individuals, private organizations, and other governments (i.e. unclaimed property/escheat property). Custodial funds are used to account for the assets held for distribution by the City as an agent for another entity for which the City has a custodial responsibility and accounts for the flow of assets. Fiduciary funds are accounted for using the accrual basis of accounting. 44 8.A.a
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Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Notes to Basic Financial Statements
For the Year Ended June 30, 2022

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED B. Basis of Accounting and Measurement Focus, Continued Fiduciary Fund Financial Statements, Continued
The financial activities of these funds are excluded from the City-wide financial statements but are presented in separate fiduciary fund financial statements. The City reports the following fiduciary funds:

The Private-Purpose Trust Fund – accounts for all of the assets, liabilities, and financial activity of the Successor Agency to the City’s former Redevelopment Agency that was dissolved effective February 1, 2012.

The Custodial Fund – is a fund that is used to facilitate a special assessment debt service charged to landowners for the financing provided to develop the business park.

C. Cash and Investments
The City maintains a cash and investments pool that is available for use by all funds. Each fund’s portion of this pool is displayed as cash and investments on the balance sheets for the governmental funds and the statements of net position for the proprietary fund and agency funds as cash and investments.

Investments are stated at fair value.

In accordance with GASB Statement No. 40, Deposit and Investment Disclosures (Amendment of GASB Statement No. 3), certain disclosure requirements for deposits and investment risks were made in the following areas:
 Interest Rate Risk
 Credit Risk
o Overall
o Custodial Credit Risk
o Concentrations of Credit Risk
In addition, other disclosures are specified including use of certain methods to present deposits and investments, highly sensitive investments, credit quality at year-end, and other disclosures.

In accordance with GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools, highly liquid money market investments with maturities of one-year or less at time of purchase are stated at amortized cost. All other investments are stated at fair value. The City categorizes the fair value measurements of its investments based on the hierarchy established by generally accepted accounting principles. The fair value hierarchy, which has three levels, is based on the valuation inputs used to measure an asset’s fair value: Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; and Level 3 inputs are significant unobservable inputs. The City did not have any investments measured using Level 1, Level 2, or Level 3 inputs as of June 30, 2022.
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Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Notes to Basic Financial Statements
For the Year Ended June 30, 2022

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED C. Cash and Investments, Continued
The City participates in an investment pool managed by the State of California entitled Local Agency Investment Fund (LAIF) which has invested a portion of the pooled funds in Structured Notes and AssetBacked Securities. LAIF’s investments are subject to credit risk with the full faith and credit of the State of California collateralizing these investments. In addition, these Structured Notes and Asset-Backed Securities are subject to market risk as to the change in interest rates.

Cash equivalents are considered amounts in demand deposits and short-term investments with a maturity date within three months of the date acquired by the City and are presented as “cash and investments” in the accompanying basic financial statements.

For the purpose of the Statement of Cash Flows, the City considers all pooled cash and investments (consisting of cash and investments and restricted cash and investments) held by the City as cash and cash equivalents because the pool is used essentially as a demand deposit account from the standpoint of the funds. The City also considers all non-pooled cash and investments (consisting of cash with fiscal agent and restricted cash and investments held by fiscal agent) as cash and cash equivalents because investments meet the criteria for cash equivalents defined above.

D. Inventories and Prepaid Items
All inventories are valued at cost using the first-in/first-out (FIFO) method. Inventories of governmental funds are recorded as expenditures when used or consumed.

Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both the government-wide and fund financial statements.

E. Leases Receivable
The City’s leases receivable are measured at the present value of lease payments expected to be received during the lease terms. Deferred inflows of resources are recorded for the leases. The deferred inflow of resources is recorded at the initiation of the lease in an amount equal to the initial recording of the lease receivable.
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Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Notes to Basic Financial Statements
For the Year Ended June 30, 2022

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED F. Capital Assets
Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental-type or business-type activities columns in the government-wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of more than $5,000 ($25,000 for infrastructure type assets) and an estimated useful life in excess of two years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at acquisition value at the date of donation. Under the GASB 34 Implementation Rules, the City is a Phase 3 entity and was not required to record infrastructure assets existing or acquired prior to July 1, 2002 at the date these new financial reporting standards were implemented; and the City has not recorded such assets. The costs of normal maintenance and repairs that do not add to the value of asset or materially extend assets lives are not capitalized.

Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of the business-type activities is included as part of the capitalized value of the assets constructed.

Property, plant, and equipment of the City are depreciated using the straight line method over the following estimated useful lives:

G. Compensated Absences Payable
The City records a liability to recognize the financial effect of unused vacation and other compensated leaves. The City typically uses the General Fund, Water Fund, and Wastewater Fund to liquidate the majority of its compensated absences.

H. Long-Term Debt
In the government-wide financial statements and in the proprietary fund types in the fund financial statements, long-term 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.

Asset Type Useful Life
Buildings and improvements 30 years
Public domain infrastructure 50 years
System infrastructure 10-40 years
Vehicles and equipment 5-10 years
Other Assets 2+ years
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Notes to Basic Financial Statements
For the Year Ended June 30, 2022

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED I. Deferred Outflows/Inflows of Resources
In addition to assets, the statement of net position or balance sheet will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net assets or fund balance that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then.

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

J. Net Position and Fund Balances
Net position is measured on the full accrual basis, while fund balance is measured on the modified accrual basis.

Government-Wide Financial Statements
Net position is the excess of all the City’s assets and deferred outflows of resources over all its liabilities and deferred inflows of resources, regardless of fund. Net position is divided into three categories. These categories apply only to net position, which is determined only at the government-wide level, and are described below:

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

Restricted – This amount is restricted by external creditors, grantors, contributors, or laws or regulations of governments.

Unrestricted – This amount is all net position that does not meet the definition of “investment in capital assets” or “restricted net position” as defined above.

When an expense is incurred for purposes for which both restricted and unrestricted net position are available, the City’s policy is to apply to restricted net position first. 48 8.A.a
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Notes to Basic Financial Statements
For the Year Ended June 30, 2022

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED J. Net Position and Fund Balances, Continued
Fund Financial Statements
Governmental fund balances represent the net current assets of each fund. Net current assets generally represent a fund’s cash and receivables, less its liabilities.

The City’s fund balances are classified based on spending constraints imposed on the use of resources.

For programs with multiple funding sources, the City prioritizes and expends funds in the following order: restricted, committed, assigned, and unassigned. Each category in the following hierarchy is ranked according to the degree of spending constraint:

Nonspendable amounts are generally items not expected to be converted into cash such as inventories, prepaid items, and long-term receivables.

Restricted fund balances include those where constraints are placed on the uses of the resources externally imposed by grantors, contributors, other governments, or bylaws or regulations.

Committed fund balances are those that can only be used for a specific purpose as determined by resolution of the City Council. Such committed amounts may be redeployed for other uses only by resolution of the City Council.

Assigned fund balances amounts constrained by the City’s intent to be used for specific purposes as determined by the City Manager or Director of Administrative Services.

Unassigned fund balance amounts are the residual amounts reported only in the General Fund or amounts in funds reporting deficit fund balances.

When expenditures are incurred for which both restricted and unrestricted (committed, assigned or unassigned) amounts are available, the City considers restricted amounts to have been spent first. When expenditures are incurred for which any class of unrestricted fund balance could be used, the City considers committed amounts to be reduced first, followed by assigned amounts, and then unassigned amounts.

K. Property Taxes
Property taxes are levied as of March 1 on property values assessed as of the same date. State statutes provide that the property tax rate be limited generally to one percent of market value, be levied by only the County, and be shared by applicable jurisdictions. The County of Sonoma collects the taxes and distributes them to taxing jurisdictions on the basis of assessed valuations subject to voter-approved debt.

Property taxes are due on November 1 and March 1, and become delinquent on December 10 and April

10. The City receives property taxes pursuant to an arrangement with the County known as the “Teeter Plan”. Under the plan, the County assumes responsibility for the collection of delinquent taxes and pays the full allocation to the City. The City recognizes property tax revenues in the fiscal year in which they are due to the City.
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Notes to Basic Financial Statements
For the Year Ended June 30, 2022

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED L. Pension
For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Agency's California Public Employees' Retirement System (CalPERS) plan (the Plan) and additions to/deductions from the Plan's fiduciary net position have been determined on the same basis as they are reported by CalPERS.

For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. The pension liability are allocated across the governmental, proprietary and fiduciary funds. The governmental portion is liquidated by the General Fund.

M. Other Postemployment Benefits (OPEB)
For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the City’s plan (OPEB Plan) and additions to/deductions from the OPEB Plan's fiduciary net position have been determined on the same basis. For this purpose, benefit payments are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value. Generally accepted accounting principles required that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used:

The governmental portion is liquidated by the General Fund N. Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

O. New Accounting Pronouncements
In 2022, the City adopted new accounting standards in order to conform to the following Governmental Accounting Standards Board Statements:
 GASB Statement No. 87, Leases – The objective of this statement is to recognize in the financial statements certain lease assets and liabilities for leases that previously were classified as operating leases and recognized as inflows of resources or outflows of resources based on the payment provisions of the contract.

Valuation Date June 30, 2022
Measurement Date June 30, 2022
Measurement Period July 1, 2021 to June 30, 2022
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Notes to Basic Financial Statements
For the Year Ended June 30, 2022

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED O. New Pronouncements, Continued
 GASB Statement No. 89, Accounting for Interest Cost Incurred before the End of the Construction Period – The objective of this statement is to (1) to enhance the relevance and comparability of information about capital assets and the cost of borrowing for a reporting period and (2) to simplify accounting for interest cost incurred before the end of a construction period. This statement establishes accounting requirements for interest cost incurred before the end of a construction period. This statement requires that interest cost incurred before the end of a construction period be recognized as an expense in the period in which the cost is incurred for financial statements prepared using the economic resources measurement focus. As a result, interest cost incurred before the end of a construction period will not be included in the historical cost of a capital asset reported in a business-type activity or enterprise fund. The requirements of this statement did not apply to the City for the current fiscal year.
 GASB Statement No. 92, Omnibus 2020 – The objectives of this statement are to enhance comparability in accounting and financial reporting and to improve the consistency of authoritative literature by addressing practice issues that have been identified during implementation and application of certain GASB Statements. The requirements of this statement did not apply to the City for the current fiscal year.
 GASB Statement No. 97, Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans – an Amendment of GASB Statements No. 14 and No. 84, and a Supersession of GASB Statement No. 32 – The primary objectives of this statement are to (1) increase consistency and comparability related to the reporting of fiduciary component units in circumstances in which a potential component unit does not have a governing board and the primary government performs the duties that a governing board typically would perform; (2) mitigate costs associated with the reporting of certain defined contribution pension plans, defined contribution other postemployment benefit (OPEB) plans, and employee benefit plans other than pension plans or OPEB plans (other employe benefit plans) as fiduciary component units in fiduciary fund financial statements; and (3) enhance the relevance, consistency, and comparability of the accounting and financial reporting for Internal Revenue Code (IRC) Section 457 deferred compensation plans (457 plans) that meet the definition of a pension plan and for benefits provided through those plans.  GASB Statement No. 99, Omnibus 2022 – The primary objectives of this statement are to enhance the comparability in accounting and financial reporting and to improve the consistency of authoritative literature by addressing practice issues that have been identified during the implementation and application of certain GASB Statements. The requirements of this statement did not apply to the City for the current fiscal year.
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Notes to Basic Financial Statements
For the Year Ended June 30, 2022

2. CASH AND INVESTMENTS
The City maintains a cash and investment pool for all funds. Certain restricted funds that are held and invested by independent outside custodians through contractual agreements are not pooled. These restricted funds include cash and investments held by trustees.

A. Summary of Cash and Investments
The following is a summary of the cash and investments at June 30, 2022:

Cash and investments at June 30, 2022 consist of the following:

B. Deposits
The carrying amount of the City’s cash deposit was $2,001,403 as of June 30, 2022. Bank balances before reconciling items were a positive amount of $3,476,127 at June 30, 2022. The City’s cash deposit was fully insured up to $250,000 by the Federal Deposit Insurance Commission. The remaining amount was collateralized with securities held by the pledging financial institutions in the City’s name.

The California Government Code (Code) Section 53652 requires California banks and savings and loan associations to secure the City’s cash deposits by pledging securities as collateral. The 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.

Governmental Business-Type Fiduciary
Activities Activities Funds Total
Cash and investments 11,453,908 $ $ 5,682,864 $ 1,636,547 $ 18,773,319 Cash with trustees - - 269,830 269,830
Total cash and investments $ 11,453,908 $ 5,682,864 $ 1,906,377 $ 19,043,149 Government-Wide Statement
of Net Position
Pooled deposits $ 2,001,986
Total cash on hand and deposits 2,001,986
Local Agency Investment Funds (LAIF) 15,572,886
Sonoma County Investment Pool 688,134
Insured deposits 510,313
Total investments 16,771,333
Total City Treasury 18,773,319
Investments with trustees 269,830
Total cash and investments $ 19,043,149
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Notes to Basic Financial Statements
For the Year Ended June 30, 2022

2. CASH AND INVESTMENTS, CONTINUED
B. Deposits, Continued
Fair value of pledged securities must equal at least 110% of the City’s cash deposits. California law also allows institutions to secure 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 to the various funds based on the period-end cash and investment balances.

Interest income from cash and investments with fiscal agents is credited directly to the related fund.

C. Investments Authorized by the Code and the City’s Investment Policy Investments are stated at fair value using the aggregate method in all funds, resulting in the following investment income in all funds for the year ended June 30, 2022:

The City’s portfolio value fluctuates in an inverse relationship to any change in interest rate. Accordingly, if interest rates rise, the portfolio value will decline. If interest rates fall, the portfolio value will rise. The portfolio for year-end reporting purposes is treated as if it were all sold. Therefore, fund balance must reflect the portfolio’s change in value. Generally, the City’s practice is to buy and hold investments until maturity and carry such investments at fair value.

Maximum
Maximum Minimum Credit Maximum % Investment
Authorized Investment Type Maturity Quality of Portfolio in One Issuer Bank/Time Deposits 5 years N/A None None
U.S. Treasury Securities 5 years N/A None None
U.S. Agency Securities 5 years N/A 75% 25%
Money Market Funds N/A N/A 20% 10%
Bankers Acceptances 180 days A1/P1 20% 5%
Commercial Paper 270 days A1/P1 25% 5%
Negotiable Certificates of Deposit 5 years A < 1 year 30% 5% Local Agency Investment Fund (LAIF) N/A N/A Per State Statute Per State Statute CAMP/Caltrust N/A N/A None None
CDs Nonnegotiable / CDARS 3 years N/A 30% 5%
Municipal Obligations 5 years A 5% 5%
Medium Term Notes 5 years A 30% 30%
Supranational 5 years AAA 2% 2%
Interest income $ 78,570
Unrealized gain (loss) on changes in fair value of investments (203,109) Total investment income $ (124,539)
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Notes to Basic Financial Statements
For the Year Ended June 30, 2022

2. CASH AND INVESTMENTS, CONTINUED
C. Investments Authorized by the Code and the City’s Investment Policy, Continued The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by Code Section 16429 under the oversight of the Treasurer of the State of California. The City’s investments with LAIF at June 30, 2022 include a portion of the pool funds invested in Structured Notes and Asset-Backed Securities. These investments included structure notes and asset-backed securities described below.

Structured Notes are debt securities (other than asset-backed securities) whose cash flow characteristics (coupon rate, redemption amount, or stated maturity) depend upon one or more indices and/or have embedded forwards or options.

Asset-Backed Securities, the bulk of which are mortgage backed securities, entitle their purchasers to receive a share of the cash flows from a pool of assets such as principal and interest repayments from a pool of mortgages (such as collateralized mortgage obligations) or credit card receivables.

At June 30, 2022, the City had $15,567,750 invested in LAIF, which had invested 1.88% of the pool investment funds in Structured Notes and Asset-Backed Securities as compared to 2.31% in the previous year. The LAIF fair value factor of 0.98712 was used to calculate the fair value of the investments in LAIF.

The City is also a voluntary participant in the Sonoma County Investment Pool (County Pool) that is regulated by the County’s Investment Policy under the oversight of the Treasury of the County. The County does not provide the City with a fair value factor, and the City’s fair value of its position in the pool is the same as the value of the pool shares.

D. Risk Disclosures
Interest Risk: Interest rate risk is the market value fluctuation due to overall changes in the interest rates.

The City’s investment policy limits the City’s investment portfolio to maturities prescribed in Sections 53600 through 53609 of the California Government Code which for the City is securities with a maturity of five years or less at the time of purchase.

Investments held in the City Treasury grouped by maturity date at June 30, 2022 are as follow:
12 Months 13 to 24 More than
Investment Type Total or less Months 24 Months
Insured Deposits $ 510,313 $ 510,313 $ - $ -
Subtotal 510,313 510,313 - -
Joint investment pools:

Local Agency Investment Fund (LAIF) 15,572,886 15,572,886 - - Sonoma County Investment Pool 688,134 688,134 - -
Total $ 16,771,333 $ 16,771,333 $ - $ -
Investment Maturities (in Months)
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Notes to Basic Financial Statements
For the Year Ended June 30, 2022

2. CASH AND INVESTMENTS, CONTINUED
D. Risk Disclosures, Continued
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. It is the City’s policy to comply with state law as regards security ratings.

The City’s investment in mutual funds was rated Aaa by Moody’s Investor Service. LAIF and the Sonoma County Investment Pool are unrated.

Custodial Credit Risk: For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty, the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The City’s investments in LAIF, the County Pool, and mutual funds are not subject to custodial credit risk.

E. Investment Valuation
Investments (except for money and market accounts, time deposits, and commercial paper) are measured at fair value on a recurring basis. Recurring fair value measurements are those that GASB Statements require or permit in the statement of net position at the end of each reporting period. Fair value measurements are categorized based on the valuation inputs used to measure an asset’s fair value: Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; and Level 3 inputs are significant unobservable inputs. At June 30, 2022, the City did not have any investments measured using Level 1, Level 2, or Level 3 inputs. The Sonoma County Investment Pool and the State of California Local Agency Investment Fund Pool are not subject to levelling.

F. Cash and Investments Held in Trust
The Cash and investments of the Successor Agency at June 30, 2022 consisted of $1,318,688 in bank deposits held by the City.
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Notes to Basic Financial Statements
For the Year Ended June 30, 2022

3. INTERFUND ACTIVITIES
A. Due To/From Other Funds
At June 30, 2022, the City had the following due to/from other funds:

B. Advances to/From Other Funds
At June 30, 2022, the City had the following advances to/from other funds:

In October 2014, the City initiated an interfund loan between the Wastewater Fund to the Water Fund which was used to finance the Phase 2 meter replacement project. The advance is due in quarterly installments of $26,117 through September 30, 2030 and bears annual interest at a rate of 1.5%.

On May 15, 2019, upon completion of P-1 Wastewater Pipeline project, as adopted by Council Resolution 2019-18, the City initiated an inter-fund loan between In-lieu Inclusionary Housing to the Wastewater Fund for a total of $1,000,000 to be repaid over a period of 20 years in annual installments of $67,498 annually and at an annual interest rate of 3%.

Due From
General
Due To Fund
ARPA 2021 Fund $ 886,315
Nonmajor Governmental Funds 209,330
Water Fund 538,650
Wastewater Fund 515,971
Total $ 2,150,266
Inclusionary
Advance To Housing Fund Wastewater Total
Water Fund $ - $ 550,090 $ 550,090
Wastewater Fund 826,613 - 826,613
Total $ 826,613 $ 550,090 $ 1,376,703
Advance From
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Notes to Basic Financial Statements
For the Year Ended June 30, 2022

3. INTERFUND ACTIVITIES
C. Transfers
During the year ended June 30, 2022, the City had the following transfers in/out:

The transfers out of the General Fund and nonmajor governmental funds were primarily to provide funds to the City’s capital projects for infrastructure projects.

4. NOTES RECEIVABLE
The City’s loans receivable were comprised of the following at June 30, 2022:

The notes receivable consists of two notes with original principal of $767,000 plus $393,428 in deferred interest payable at maturity. The notes bear interest at 3% deferred until maturity of 2041 ($370,000) and 2058 ($397,000) and are secured by deeds of trust on housing projects.

5. LEASES RECEIVABLE
County of Sonoma Leachate Transfer
In October 2014, the City entered into a lease with the County of Sonoma. Under the lease, the lessee pays the City $34,673 per year through 2045 in exchange for the lessee’s right to connect to the City sewer and use excess capacity for transferring leachate. The lease receivable is measured as the present value of the future minimum rent payments expected to be received during the lease term at a discount rate of 0.37% which is the Local Agency Investment Fund rate as of the implementation date. For the year ended June 30, 2022, the City recognized $34,924 of lease revenue and $3,110 of interest revenue under the lease.

General City Capital Nonmajor
Transfers Out Fund Projects Fund Governmental Total
General Fund $ - $ 4,041,986 $ 102,492 $ 4,144,478
ARPA 2021 Fund 1,772,630 - - 1,772,630
City Capital Projects Fund - 350,000 - 350,000
Nonmajor Governmental Funds 4,164,002 949,672 2,000,000 7,113,674 Total $ 5,936,632 $ 5,341,658 $ 2,102,492 $ 13,380,782
Transfers In
Balance as of Accrued Total
Description June 30, 2022 interest Receivable
Note receivable, original principal $370,000 $ 370,000 $ 265,297 $ 635,297 Note receivable, original principal $397,000 397,000 128,131 525,131 Totals $ 767,000 $ 393,428 $ 1,160,428
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Notes to Basic Financial Statements
For the Year Ended June 30, 2022

5. LEASES RECEIVABLE, CONTINUED
Cingular Wireless
In August 2004, the City entered into a lease with Cingular Wireless. Under the lease, the lessee pays the City $2,200 per year for 5 years, in exchange for use of the cell tower site. The lease term shall be automatically extended for up to 4 additional 5-year periods unless the lessee elects to not exercise such renewal term. The City estimates that the lessee will extend the lease term until 2041. The lease receivable is measured as the present value of the future minimum rent payments expected to be received during the lease term at a discount rate of 0.37% which is the Local Agency Investment Fund rate as of the implementation date. For the year ended June 30, 2022, the City recognized $2,117 of lease revenue and $157 of interest revenue under the lease.

The future lease payments on the leases as of June 30, 2022 were as follows:

Year Ending
June 30, Principal Interest Principal Interest Principal Interest 2023 33,581 $ $ 2,986 $ 2,050 $ 149 $ 35,631 $ 3,135
2024 33,706 2,861 2,058 142 35,764 3,003
2025 33,831 2,736 2,066 134 35,897 2,870
2026 33,957 2,610 2,073 127 36,030 2,737
2027 34,083 2,484 2,081 119 36,164 2,603
2028-2032 172,319 10,516 10,521 182,840 478 10,994
2033-2037 175,538 7,296 10,720 186,258 280 7,576
2038-2042 178,819 4,016 8,720 187,539 81 4,097
2043-2045 108,894 809 - 108,894 - 809
Total 804,728 $ $ 36,314 $ 40,289 $ 1,510 $ 845,017 $ 37,824 Leachate Cell Tower Total
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Notes to Basic Financial Statements
For the Year Ended June 30, 2022

6. CAPITAL ASSETS
Capital assets activity relating to governmental activities for the year ended June 30, 2022 was as follows:

Construction in progress at June 30, 2022 represents primarily costs incurred related to construction improvements to the City’s street system.

For the year ended June 30, 2022, depreciation expense by program/function for capital assets was as follows:

Balance at Balance at
July 1, 2021, Additions Retirements Transfers June 30, 2022 Governmental activities:

Nondepreciable capital assets:

Land 8,631,561 $ - $ $ - $ - $ 8,631,561
Construction in progress 354,526 5,007,786 - (168,108) 5,194,204 Total nondepreciable capital assets 8,986,087 5,007,786 - (168,108) 13,825,765 Depreciable capital assets:

Buildings 9,981,703 - - - 9,981,703
Machinery and equipment 722,586 - - - 722,586
Vehicles 1,578,411 112,973 - - 1,691,384
Improvements 22,401,029 156,961 - 168,108 22,726,098
Leased assets 34,874 - - - 34,874
Total depreciable capital assets 34,718,603 269,934 - 168,108 35,156,645 Less accumulated depreciation:

Buildings (3,185,881) (214,335) - - (3,400,216)
Machinery and equipment (639,258) (24,156) - - (663,414) Vehicles (1,185,063) (129,405) - - (1,314,468)
Improvements (10,774,256) (627,866) - - (11,402,122)
Leased assets (19,751) (4,596) - - (24,347)
Total accumulated depreciation (15,804,209) (1,000,358) - - (16,804,567) Total depreciable capital assets, net 18,914,394 (730,424) - 168,108 18,352,078 Total capital assets $ 27,900,481 $ 4,277,362 $ - $ - $ 32,177,843 Governmental activities:

General government 146,211 $
Public safety 120,735
Public works 477,303
Community development 126,704
Other internal service 129,405
Total depreciation expense $ 1,000,358
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Notes to Basic Financial Statements
For the Year Ended June 30, 2022

6. CAPITAL ASSETS, CONTINUED
Capital assets activity relating to business-type activities for the year ended June 30, 2022 was as follows:

For the year ended June 30, 2022, depreciation expense by program/function for capital assets was as follows:

Balance at Balance at
July 1, 2021 Additions Retirements Transfers June 30, 2022 Business-type activities:

Nondepreciable capital assets:

Construction in progress $ 68,267 $ - $ - $ (68,267) $ - Total nondepreciable capital assets 68,267 - - (68,267) - Depreciable capital assets:

Water wells 1,451,506 - - - 1,451,506
Reservoirs 1,650,972 - - - 1,650,972
Improvements 1,286,652 - - - 1,286,652
Pipelines and collection system 16,109,721 - - 68,267 16,177,988 Equipment 109,822 - - - 109,822
Total depreciable capital assets 20,608,673 - - 68,267 20,676,940 Less accumulated depreciation:

Water wells (1,116,959) (31,228) - - (1,148,187)
Reservoirs (1,169,295) (28,334) - - (1,197,629)
Improvements (544,075) (56,959) - - (601,034)
Pipelines and collection system (5,085,269) (440,694) - - (5,525,963) Equipment (158,407) (7,760) - - (166,167)
Total accumulated depreciation (8,074,005) (564,975) - - (8,638,980) Total depreciable capital assets, net 12,534,668 (564,975) - 68,267 12,037,960 Total capital assets $ 12,602,935 $ (564,975) $ - $ - $ 12,037,960 Business-type activities:

Water 292,815 $
Wastewater 272,160
Total depreciation expense $ 564,975
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Notes to Basic Financial Statements
For the Year Ended June 30, 2022

7. COMPENSATED ABSENCES
Compensated absences activity for the year ended June 30, 2022 was as follows:

8. LONG-TERM DEBT
The following is a summary of the City’s long-term debt activity for the year ended June 30, 2022:

A. Lease Obligation
The City in fiscal year 2018 entered into a $34,474 lease agreement for the use of two copy machines. The lease arrangement is a right to use arrangement and ownership of the assets does not pass to the City.

The term is for 5 years, bears interest at 6.215 percent and is payable in monthly installments of $678.

There were no variable payments, residual value guarantee payments or penalty payments not previously included in the lease arrangement. Future payments on the lease are as follows:

Balance Balance Due Within
July 1, 2021 Additions Deletions June 30, 2022 One Year Governmental Activities:

Compensated absences payable 378,903 $ $ 267,462 $ (290,640) $ 355,725 $ 251,395 Business-Type Activities:

Compensated absences payable 223,891 66,711 (94,593) 196,009 168,852 Total $ 602,794 $ 334,173 $ (385,233) $ 551,734 $ 420,247 Balance at Balance at Due Within
July 1, 2021 Additions Reductions June 30, 2022 One Year Governmental Activities:

Lease obligation $ 11,618 $ - $ (7,625) $ 3,993 $ 3,993 City of Cotati Series 2022A lease obligaion - 2,102,254 - 2,102,254 271,110 City of Cotati Series 2022B lease obligaion - 4,087,760 - 4,087,760 212,530 Total $ 11,618 $ 6,190,014 $ (7,625) $ 6,194,007 $ 487,633 Fiscal Year Principal Interest Total
2023 $ 3,993 $ 80 $ 4,073
Totals $ 3,993 $ 80 $ 4,073
61 8.A.a
Packet Pg. 104 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Notes to Basic Financial Statements
For the Year Ended June 30, 2022

8. LONG-TERM DEBT, CONTINUED
B. Series 2022A Lease Obligation
In 2022, the City entered into a lease/leaseback agreement with First Foundation Public Finance to finance the streets improvement project. Under the agreement, the City leased certain real property situated in the City of Cotati to First Foundation Public Finance. The City then leased back the property in exchange for lease payments due semiannually through 2041. The lease has a stated discount rate of 2.45%.

C. Series 2022B Lease Obligation
In 2022, the City entered into a lease/leaseback agreement with First Foundation Public Finance to finance a portion of its unfunded Accrued Liability to California Public Employees Retirement System. Under the agreement, the City leased certain real property situated in the City of Cotati to First Foundation Public Finance. The City then leased back the property in exchange for lease payments due semiannually through 2036. The lease has a stated discount rate of 3.33%.

Fiscal Year Principal Interest Total
2023 $ 271,110 $ 63,048 $ 334,158
2024 279,920 181,661 461,581
2025 286,820 174,761 461,581
2026 293,890 167,690 461,580
2027 301,130 160,446 461,576
2028-2032 1,620,720 687,153 2,307,873
2033-2037 1,830,590 477,296 2,307,886
2038-2041 2,871,640 180,391 3,052,031
Totals $ 7,755,820 $ 2,092,446 $ 9,848,266
Fiscal Year Principal Interest Total
2023 $ 212,530 $ 135,866 $ 348,396
2024 221,190 127,204 348,394
2025 228,620 119,777 348,397
2026 236,300 112,099 348,399
2027 244,230 104,165 348,395
2028-2032 1,349,810 392,155 1,741,965
2033-2037 1,595,070 146,908 1,741,978
Totals $ 4,087,750 $ 1,138,174 $ 5,225,924
62 8.A.a
Packet Pg. 105 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Notes to Basic Financial Statements
For the Year Ended June 30, 2022

9. LONG-TERM DEBT WITH NO CITY COMMITMENT
The special assessment bonds were issued in an original amount of $4,007,977 for the purpose of refunding the Cotati 2001 Limited Obligation Improvement Bonds which were issued to facilitating a wetlands mitigation project. The bonds are secured solely by assessments levied against property owners within the assessment district and from monies on deposit in a reserve fund. The City has no obligation to advance funds for payment of bond debt service. The City has indicated, however, that it may at its own option and in its sole discretion, elect to advance funds to pay bond debt service to the extent of delinquencies and has done so in previous years. The bonds bears an interest rate of 2.95% and matures in 2034. The outstanding balance as of June 30, 2022 was $3,528,285.

10. DEFINED BENEFIT PENSION PLANS
Plan Description
All qualified permanent and probationary employees are eligible to participate in the Public Agency Cost Sharing Multiple-Employer Defined Benefit Pension Plan (Plan) 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 risk pools. Accordingly, rate plans within the safety or miscellaneous pools are not separate plans under GASB Statement No. 68. Individual employers may sponsor more than one rate plan in the miscellaneous or safety risk pools. The City sponsors six rate plans (three miscellaneous and three safety). Benefit provisions under the Plan are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plan regarding benefit provisions, assumptions, and membership information that can be found on the CalPERS website.

Benefits Provided
CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 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 each plan are applied as specified by the Public Employee’s Retirement Law. 63 8.A.a
Packet Pg. 106 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Notes to Basic Financial Statements
For the Year Ended June 30, 2022

10. DEFINED BENEFIT PENSION PLANS, CONTINUED
Benefits Provided, Continued
The rate plan provisions and benefits in effect at June 30, 2022 are summarized as follows:

Contributions – Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers are to be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. Funding contributions for the Plan is determined annually on an actuarial basis as of June 30 by CalPERS. 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.

The City’s contributions to the Plan for the measurement period ended June 30, 2021 were $1,272,801.

Tier 1 Tier 2 PEPRA
Hire date Prior to 4/27/2011 4/27/2011 to 12/31/2012 On or after 1/1/2013 Benefit formula 2.7% @ 55 with 2% COLA 2.0% @ 60 with 2% COLA 2.0% @ 62 with 2% COLA Final average compensation period 12 months 12 months 36 months Benefit vesting schedule 5 year service 5 year service 5 year service Benefit payment Monthly for life Monthly for life Monthly for life Retirement age 556062
Monthly benefits as a % of eligible
compensation 2.70% 2.00% 2.00%
Required employee contribution rates 8.00% 7.00% 6.75%
Required employer contribution rates 14.02% 9.13% 7.59% Required unfunded liability payment $603,775 $6,970 $9,408 Tier 1 Tier 2 PEPRA
Hire date Prior to 7/1/2011 7/1/2011 to 12/31/2012 On or after 1/1/2013 Benefit formula 3.0% @ 50 with 2% COLA 2.0% @ 50 with 2% COLA 2.7% @ 57 with 2% COLA Final average compensation period 36 months 36 months 36 months Benefit vesting schedule 5 year service 5 year service 5 year service Benefit payment Monthly for life Monthly for life Monthly for life Retirement age 505057
Monthly benefits as a % of eligible
compensation 3.00% 2.00% 2.70%
Required employee contribution rates 9.00% 9.00% 13.00% Required employer contribution rates 22.48% 18.19% 13.13% Required unfunded liability payment $337,651 $3,618 $4,623 Miscellaneous Plans
Safety Plans
64 8.A.a
Packet Pg. 107 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Notes to Basic Financial Statements
For the Year Ended June 30, 2022

10. DEFINED BENEFIT PENSION PLANS, CONTINUED
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 for its proportionate share of the net pension liability of the Plan of $6,725,519.

The City’s net pension liability for the Plan is measured as the proportionate share of the total net pension liability of the Plan. The net pension liability of the Plan is measured as of June 30, 2021, and the total pension liability for the Plan used to calculate the net pension liability was determined by actuarial valuations as of June 30, 2020 rolled forward to June 30, 2021 using standard update procedures. The City’s proportionate share of the net pension liability was based on the City’s plan liability and asset-related information where available, and proportional allocations of individual plan amounts as of the valuation date where not available.

The City’s proportionate share of the net pension liability for the Plan as of the measurement date of June 30, 2020 and 2021 were as follows:

For the year ended June 30, 2022, the City recognized pension expense of $2,278,581. At June 30, 2022 the City reported deferred outflows of resources and deferred inflows of resources related to pension from the following sources:

Proportion - June 30, 2021 0.12436%
Proportion - June 30, 2020 0.09964%
Change - Increase (decrease) -0.02472%
Deferred Outflows Deferred Inflows
of Resources of Resources
Differences between expected
and actual experience $ 914,634 $ -
Changes in assumptions - -
Net differences between projected actual earnings
and actual earnings on plan investments - (5,111,986)
Changes in employer's proportion - (220,126)
Differences between the employer's
contributions and the employer's
proportionate share of contributions 45,870 (262,115)
Pension contributions subsequent to
the measurement date 7,372,022 -
Total $ 8,332,526 $ (5,594,227)
65 8.A.a
Packet Pg. 108 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Notes to Basic Financial Statements
For the Year Ended June 30, 2022

10. DEFINED BENEFIT PENSION PLANS, CONTINUED
Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions, Continued
The City reported $7,372,022 as deferred outflows of resources related to contributions subsequent to the measurement date which will be recognized as a reduction of the net pension liability in the year ending June 30, 2023. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:

Actuarial Assumptions – The total pension liabilities in the June 30, 2020 actuarial valuations were determined using the following actuarial assumptions:

Discount Rate – The discount rate used to measure the total pension liability was 7.15% for the Plan. To determine whether the municipal bond rate should be used in the calculation of a discount rate for the Plan, CalPERS stress tested plans that would most likely result in a discount rate that would be different from the actuarially assumed discount rate. Based on the testing, none of the tested plans run out of assets. Therefore, the current 7.15 percent discount rate is adequate and the use of the municipal bond rate calculation is not necessary. The long term expected discount rate of 7.15 percent will be applied to all plans in the Public Employees Retirement Fund (PERF). The stress test results are presented in a detailed report that can be obtained from the CalPERS website.

Fiscal Year
Ending June 30,
2023 (994,538) $
2024 (1,070,462)
2025 (1,157,924)
2026 (1,410,799)
Investment Rate of Return 7.15%
Inflation 2.50%
Salary Increases Varies by Entry Age and Service
Mortality (1) Derived using CalPERS Membership Data for all Funds Post Retirement Benefit Increase Contract COLA up to 2.50% until Purchasing Power Protection Allowance Floor on Purchasing Power applies
(1)The mortality table used was developed based on CalPERS specific MP 2016 published by the Society of Actuaries data. The table includes 15 years of mortality improvements using Society of Actuaries Scale 90% of Scale MP 2016.
66 8.A.a
Packet Pg. 109 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Notes to Basic Financial Statements
For the Year Ended June 30, 2022

10. DEFINED BENEFIT PENSION PLANS, CONTINUED
Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions, Continued
The long-term expected rate of return on pension plan investments was determined using a building block method in which best-estimate ranges of 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 considered both short-term and long-term market return expectations as well as the expected pension fund cash flows. Using historical returns of all the funds’ asset classes, expected compound returns were calculated over the short-term (first 10 years) and the long-term (11-60 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 rounded down to the nearest one quarter of one percent.

The table below reflects the long-term expected real rate of return by asset class. The rate of return was calculated using the capital market assumptions applied to determine the discount rate and asset allocation.

These rates of return are net of administrative expenses.

Assumed Asset Real Return Real Return
Asset Class (1) Allocation Years 1 - 10 (2) Years 11+ (3) Global 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%
is included in Short-Term Investments; Inflation Assets are included in both Global Equity Securities and Global Debt Securities.
(1) In the system's ACFR, Fixed Income is included in Global Debt Securities; Liquidity (2) An expected inflation of 2.00% used for this period. (3) An expected inflation of 2.92% used for this period. 67 8.A.a
Packet Pg. 110 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Notes to Basic Financial Statements
For the Year Ended June 30, 2022

10. DEFINED BENEFIT PENSION PLANS, CONTINUED
Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions, Continued
Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate – The following presents the Agency’s proportionate share of the net pension liability for the Plan, calculated using the discount rate for the Plan, as well as what the Agency’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher than the current rate:

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

Payable to the Pension Plan
At June 30, 2022 the City reported a payable of $0 for the outstanding amount of contributions to the pension plan required for the year ended June 30, 2022.

11. OTHER POST-EMPLOYMENT BENEFITS (OPEB)
Plan Description
The City’s defined benefit OPEB Plan provides OPEB for all eligible full-time general and public safety employees of the City. The City’s plan is a single-employer defined benefit OPEB Plan administered by the City. The City Council, through resolutions and regulations, has the authority to establish and amend the benefit terms. No assets are accumulated in a trust that meets the criteria in paragraph 4 of GASB Statement Number 75.

Benefits Provided
The City’s OPEB Plan provides healthcare benefits to eligible retirees and their dependents. Benefits are provided through third party insurers, and the full cost of the benefits is provided by the Plan Participants.

Employees Covered by the Benefit Terms – At June 30, 2022, the following employees were covered by the benefit terms:
1% Decrease Current Discount Rate 1% Increase

6.15% 7.15% 8.15%
Net Pension Liability $ 12,028,835 $ 6,725,519 $ 2,354,306 Inactive employees or beneficiaries currently receiving benefits 3 Inactive employees entitled to but not yet receiving benefit payments - Active employees 37
Total 40
68 8.A.a
Packet Pg. 111 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Notes to Basic Financial Statements
For the Year Ended June 30, 2022

11. OTHER POST-EMPLOYMENT BENEFITS (OPEB), CONTINUED
Benefits Provided, Continued
The City’s OPEB Plan is closed to new entrants. The OPEB Plan amortization period is closed.

Contributions – The City’s plan is affiliated with the Redwood Empire Municipal Insurance Fund (REMIF) insofar as the City’s health insurance premium payments are paid to REMIF. REMIF, through an aggregation of single employer plans, pools administrative functions in regard to purchases of commercial health insurance policies and coverages. City regulations grant authority to the City Council to establish and amend contribution requirements. Employees are not required to contribute to the plan. Plan contributions are based upon an actuarially determined rate. For the year ended June 30, 2022, the City’s average contribution rate was .003 percent of covered employee payroll. The amount contributed for fiscal 2022 was $10,572 which amount was the amount of City paid benefit payments.

Actuarial Assumptions – The total OPEB liability in the June 30, 2022 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement unless otherwise specified:

Changes in the Total OPEB Liability
The changes in the total OPEB liability during the measurement period were as follows:

Actuarial Assumptions
Inflation 2.50% per year
Salary increases 2.80% plus merit/productivity increases according to CalPERS 2017 Experience Study
Discount rate 4.09%
Healthcare cost trend rates 7.0% non-Medicare/5.50% Medicare decreasing gradually to ultimate rate of 3.94% by 2075
Total OPEB
Liability
Balance at June 30, 2021 $ 218,599
Changes for the year:

Service cost 11,414
Interest 4,922
Changes in assumptions (1,324)
Differences between expected and actual experience (15,324) Benefit payments (10,572)
Net changes (10,884)
Balances at June 30, 2022 $ 207,715
69 8.A.a
Packet Pg. 112 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Notes to Basic Financial Statements
For the Year Ended June 30, 2022

11. OTHER POST-EMPLOYMENT BENEFITS (OPEB), CONTINUED
Sensitivity of the Total OPEB Liability to Changes in the Discount Rate – The following presents the total OPEB liability of the City, as well as what the City’s total OPEB liability would be if it were calculated using a discount rate that is 1-percentage point lower (1.19 percent) or 1-percentage point higher (3.19 percent) than the current discount rate.

Sensitivity of the Total OPEB Liability to Changes in the Healthcare Cost Trend Rates – The following presents the total OPEB liability of the City, as well as what the City’s total OPEB liability would be if it were calculated using healthcare cost trend rates 1-percentage point (1 percent) lower or higher than the current healthcare cost trend rates:

OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB For the year ended June 30, 2022, the City recognized OPEB expense of negative $8,182. At June 30, 2022, the City reported deferred outflows and deferred inflows of resources related to OPEB from the following sources:
1% Decrease Current Discount Rate 1% Increase

3.09% 4.09% 5.09%
Total OPEB Liability $ 225,584 $ 207,715 $ 191,703
Current Healthcare
1% Decrease Cost Trend Rates 1% Increase

6.0% - 2.94% 7.0% - 3.94% 8.0% - 4.94%
Total OPEB Liability $ 189,052 $ 207,715 $ 229,407
Deferred Outflows Deferred Inflows
of Resources of Resources
Differences between expected
and actual experience $ - $ (72,098)
Changes in assumptions 13,309 (12,389)
Total $ 13,309 $ (84,487)
70 8.A.a
Packet Pg. 113 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Notes to Basic Financial Statements
For the Year Ended June 30, 2022

11. OTHER POST-EMPLOYMENT BENEFITS (OPEB), CONTINUED
Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows:

Payable to the OPEB Plan
At June 30, 2022, no amount was payable to the OPEB Plan.

12. DEFICIT FUND BALANCE AND NET POSITION AND EXPENDITURES IN EXCESS OF

APPROPRIATIONS
The following funds reported deficit fund balances or net positions at June 30, 2022:
 K-9 Program Fund – Negative $6,241 is primarily due to the initiation of the fund expenditures are pending receipts from the General Fund as allocated through Measure S sales tax.  Private Purpose Trust Fund – Negative $4,679,739 is primarily due to the outstanding tax allocation bond liability, (see note 15).

The following funds had expenditures in excess of appropriations:
 Landscape and Lighting Fund has expenditures in excess of appropriations of $34,343.  Gas Tax Fund has expenditures in excess of appropriations of $8,479  Community Facilities District Fund has expenditures in excess of appropriations of $1,383.

Fiscal Year
Ending June 30,
2023 $ (8,153)
2024 (8,153)
2025 (8,153)
2026 (8,153)
2027 (8,153)
Thereafter (30,413)
71 8.A.a
Packet Pg. 114 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Notes to Basic Financial Statements
For the Year Ended June 30, 2022

13. RISK MANAGEMENT
The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; and natural disasters for which the City carries insurance. The City, due to the costs of available coverage, participates as a member of the California Intergovernmental Risk Authority (CIRA).

CIRA provides joint protection programs for public entities covering automobile, general liability, errors and omissions, property and workers compensation claims. Under the program, the City has a $5,000 retention limit similar to a deductible with CIRA being responsible for losses above that amount up to $500,000 for liability losses, $1,000,000 for workers compensation claims, and $25,000 for property damage. The Fund carries purchased excess commercial liability insurance of $39.5 million in excess of its $500,000 limit, and a commercial property policy for $300 million. Financial information pertaining to CIRA can be obtained from its administrative offices at 2330 Eat Bidwell Suite 150, Folsom, CA 95630 Liabilities of the City are reported in the statement of net assets for when it is probable that a loss has occurred, and the amount of the loss can be reasonably estimated. Liabilities include an amount for claims that have been incurred but not reported (IBNRs). The result of the process to estimate the claims liability is not an exact amount as it depends on many complex factors, such as inflation, changes in legal doctrines, and damage awards. Accordingly, claims are re-evaluated periodically to consider the effects of inflation, recent claim settlement trends (including frequency and amount of pay-outs), and other economic and social factors.

The City’s only exposure to claim liabilities would be for losses, if any, not covered by CIRA. There have been no significant changes in insurance coverages in fiscal 2022. Settlements have not exceeded coverage for each of the past four fiscal years. The City has no material claim liabilities at June 30, 2022. However, during the fiscal year 2019, the Redwood Empire Municipal Insurance Fund, the predecessor joint power authority to CIRA board approved both a workers compensation and general liability fund assessments covering a period of six and five years respectively.

Changes in the balance of claims liabilities during the year ended June 30, 2022 were as follows:

Workers
Compensation
General
Liability Totals
Liability - July 1, 2021 $ 72,216 $ 34,934 $ 107,150
Claims Incurred - - -
Claims Payments (24,073) (17,467) (41,540)
Changes to prior year estimates - - -
Liability - June 30, 2022 $ 48,143 $ 17,467 $ 65,610
72 8.A.a
Packet Pg. 115 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
73 14. CONTINGENCIES AND COMMITMENTS
Litigation - The City is involved in litigation incurred in the normal course of conducting City business.

Although the outcome of these lawsuits is not presently determinable, in the opinion of the City's counsel the resolution of these matters will not have a material adverse effect on the financial condition of the City.

Grants and allocations – Amounts received or receivable from grant agencies are subject to audit and adjustment by grantor agencies, principally the federal and state government. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures that may be disallowed by the grantor cannot be determined at this time, although the City expects such amounts, if any, to be immaterial.

Encumbrances - The City establishes encumbrances to record the amount of purchase orders, contracts, and other obligations, which have not yet been fulfilled, cancelled or discharged, at June 30, 2022, total governmental funds encumbrance balances for the City were:

15. JOINTLY GOVERNED ORGANIZATIONS AND OPERATING AGREEMENTS Jointly governed organizations are legal entities or other organizations that result from a contractual arrangement and that are owned, operated, or governed by two or more participants as a separate and specific activity subject to joint control in which the participants retain an ongoing financial interest or ongoing financial responsibility. The City is a participant in the following organizations other than the insurance authority described in the preceding notes. The City is a party to the following agreement:

Sonoma County Water Agency - The City has an agreement with the agency for the purchase of water as the City does not have sufficient capacity to operate its own water service. The City's obligations under this agreement are to pay to the Agency its share of the costs of providing the water and operating related systems.

The City records these payments as operating expenses in its water enterprise fund.

Sonoma County Public Safety Consortium (SCPSC) - was formed by a joint powers agreement on July 1, 2008 to efficiently and effectively operate, maintain and improve a public safety communication and data management system in Sonoma County. As a member, the City pays its proportionate share percentage of the total costs incurred by the SCPSC and records these payments as operating expenses within the general fund.

Encumbrances
General fund 254,875 $
City capital project fund 767,108
Non-major governmental fund 64,299

8.A.a
Packet Pg. 116 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Notes to Basic Financial Statements
For the Year Ended June 30, 2022

16. SUCCESSOR AGENCY TRUST FOR ASSETS OF FORMER REDEVELOPMENT AGENCY A. The Dissolution Process
On December 29, 2011, the California Supreme Court upheld Assembly Bill 1X26 (the Bill) that provides for the dissolution of all redevelopment agencies in the State of California. This action impacted the financial reporting entity of the City of Cotati that previously had reported a redevelopment agency within the financial reporting entity of the City as a blended component unit.

The Bill provides that upon dissolution of a redevelopment agency, either the City or another unit of local government will agree to serve as the Successor Agency to hold assets until they are distributed to other units of State and local government. The City Council of Cotati elected to have the City become the Successor Agency for the former Redevelopment Agency.

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 newlyestablished 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).

In future fiscal years, successor agencies will only be allocated revenues 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 agency have been paid in full and all assets have been liquidated.

The bill directs the State Controller of the State of California to review the propriety of any transfers of assets between redevelopment agencies and other public bodies that occurred after January 1, 2011. If the public body that received such transfers is not contractually committed to a third party for the expenditure or 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.

The City’s position on these issues is not a position of settled law and there is considerable legal uncertainty regarding these issues. It is reasonably possible that a legal determination may be made at a later date by an appropriate judicial authority or other authorized body that would resolve any of the dissolution matters unfavorably 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 financial activities of the dissolved Redevelopment Agency are reported in a fiduciary fund (the private–purpose trust fund) in the financial statements of the City of Cotati. The assets and liabilities of the private-purpose trust are excluded from the Government-wide Statement of Net Position of the City of Cotati and the Statement of Activities of the City of Cotati because fiduciary fund assets are not available in any fashion for use by the City.
74 8.A.a
Packet Pg. 117 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Notes to Basic Financial Statements
For the Year Ended June 30, 2022

16. SUCCESSOR AGENCY TRUST FOR ASSETS OF FORMER REDEVELOPMENT AGENCY,

CONTINUED
B. Enforceable Obligations
Changes in enforceable obligations for the year ended June 30, 2022 were as follows:

Tax Allocation Refunding Bonds 2020
On July 1, 2020, the California Department of Finance approved the issuance and sale of tax allocation refunding bonds by the Cotati Community Successor Agency to the Former Redevelopment Agency.

Refunding Bonds under the Dissolution Act - Section 34177.5 of the Health & Safety Code, which was added to the Dissolution Act by AB 1484, authorizes the Successor Agency to issue bonds for the purpose of refunding outstanding obligations of the Redevelopment Agency or the Successor Agency to provide savings to the Successor Agency. On July 28, 2021, the Agency refunded the obligations issued by the former Redevelopment Agency reducing the interest rate. Interest and principal on the bonds is payable each March 1 and September 1 through 2035. The bonds bear interest at rate of 1.290%percent. The refunding resulted in a difference between the reacquisition price and the net carrying amount of the old debt of $102,619, which is reported as a deferred outflow of resources in the accompanying financial statements and amortized over the remaining life of the refunded debt. The City completed the refunding to reduce its total debt service payments by $2,557,497 and to obtain an economic gain (difference between the present values of the old and new debt service payments) of $1,859,770.

Tax Allocation Pledged Revenues
The former Redevelopment Agency had pledged future tax increment revenues to pay debt service on the 2020 Tax Allocation Bonds. At June 30, 2022, total principal and interest remaining on the Successor Agency’s bonds is $8,408,872.

Balance Balance Due Within
Private Purpose Trust Fund: July 1, 2021 Additions Deletions June 30, 2022 One Year 2020 Tax Allocation Bond $ 7,754,781 $ - $ - $ 7,754,781 $ 96,000 Total $ 7,754,781 $ - $ - $ 7,754,781 $ 96,000
Fiscal Year Principal Interest Total
2023 $ 96,000 $ 99,417 $ 195,417
2024 667,827 94,491 762,318
2025 672,278 85,847 758,125
2026 698,995 77,002 775,997
2027 710,093 67,914 778,007
2028-2032 3,695,434 198,756 3,894,190
2033-2036 1,214,154 30,664 1,244,818
Totals $ 7,754,781 $ 654,091 $ 8,408,872
75 8.A.a
Packet Pg. 118 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Notes to Basic Financial Statements
For the Year Ended June 30, 2022

17. FUND BALANCE CLASSIFICATION
As of June 30, 2022, fund balances were classified as shown below.

Committed
Contingency Reserve
The City Council has established by resolution to allow the City to weather unpredicted cyclical and rapid downtowns in the economy. These funds would be available for use in such conditions to mitigate negative economic fiscal impact or State takeaways. An economic downtown would entail a projected and/or sudden drop in core revenues of equal to or greater than 10% and/or a change in economic parameters that cause a material change in expenditures of 10% or more, or the occurrence of local natural disaster or unexpected financial claim requiring the immediate use of cash balances.

Inclusionary Low Income Nonmajor
General Housing Housing City Capital Governmental
Fund Fund Fund Project Fund Funds Total
Nonspendable: $ 485,752 $ - $ - $ - $ 485,752 - $
Subtotal 485,752 - - - - 485,752
Restricted:

Affordable housing - 3,003,099 - - 206,664 3,209,763
Public safety - - - - 58,528 58,528
Streets - - - - 761,117 761,117
Parks - - - - 345,470 345,470
Public education - - - - 27,197 27,197
Capital projects - - - - 1,878,764 1,878,764
Subtotal - 3,003,099 - - 3,277,740 6,280,839
Committed:

Emergencies 2,131,107 - - - - 2,131,107
Capital projects - - - 85,584 77 85,661
Subtotal 2,131,107 - - 85,584 2,216,768 77
Assigned: 142,939 - - - - 142,939
Subtotal 142,939 - - - - 142,939
Unassigned 6,235,593 - - - - 6,235,593
Total $ 8,852,452 $ 3,003,099 $ - $ 85,584 $ 3,277,817 $ 15,361,891 76 8.A.a
Packet Pg. 119 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Notes to Basic Financial Statements
For the Year Ended June 30, 2022

18. DEFERRED COMPENSATION PLAN
The City established a Mission Square 457 deferred compensation plan created in accordance with Internal Revenue Code Section 457. The plan available to all City employees, provides tax-deferred savings and/or a retirement supplement. Employees made contributions through payroll deductions, and the City provides matching contribution for certain groups of employees as negotiated within each MOU. Full-time regular employees with Tier 2 or Tier 3 ("PEPRA") pension benefits are eligible to participate in a City matching deferred compensation plan. Provided the total City contribution to Tier 2 or Tier 3 pension benefits remains under twenty percent (20%) of the employee's base salary, the City will match employee contributions to the City's deferred compensation plan, up to a maximum of three percent (3%) of base salary. During fiscal year 2022, the City incurred $40,680 of expense and had a zero related liability as of June 30, 2022.

19. PRIOR PERIOD ADJUSTMENTS
Restatements were recorded to accrue payroll not properly accrued in prior year.

Net Position/ Net Position/
Fund Balance Adjustment to Fund Balance
as Previously Payroll Net Position
Reported Accrual as Restated
Government-wide Financial Statements
Governmental activites $ 35,714,452 $ (94,058) $ 35,620,394 Business-type activities 15,737,612 (24,937) 15,712,675 Total $ 51,452,064 $ (118,995) $ 51,333,069
Fund Financial Statements
General Fund $ 9,217,717 $ (94,058) $ 9,123,659
Water fund 5,873,586 (12,729) 5,860,857
Wastewater fund 9,864,026 (12,208) 9,851,818
Private purpsoe trust fund (4,894,799) (2,859) (4,897,658) Total $ 4,969,227 $ (15,067) $ 4,954,160
Prior Period
Adjustments
77 8.A.a
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78 8.A.a
Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial Required Supplementary
Information
Budgetary Comparison Schedules
General Fund & Inclusionary Housing,
Schedule of Changes in City's Total OPEB Liability & Related Ratios Schedule of The City's Proportionate Share of the Net Pension Liability
Schedule of the City's Pension Contributions
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Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial

BUDGET AND BUDGETARY ACCOUNTING
Budgetary Information
Annual budgets are adopted on a basis consistent with generally accepted accounting principles for the general fund, inclusionary housing fund, library fund, and debt service fund. The capital projects fund is appropriated on a project-length basis. Other special revenue funds and the permanent fund do not have appropriated budgets since other means control the use of these resources (e.g., grant awards and endowment requirements) and sometimes span a period of more than one fiscal year. Low income housing fund holds balance sheet activity for notes issued for inclusionary housing projects, as such it does not have revenue and expenditures or related adopted budget.

The appropriated budget is prepared by fund, function, and department. The government’s department heads may make transfers of appropriations within a department. Transfers of appropriations between departments require the approval of the Council. The legal level of budgetary control (i.e., the level at which expenditures may not legally exceed appropriations) is the department level.

Appropriations in all budgeted funds lapse at the end of the fiscal year even if they have related encumbrances. Encumbrances are commitments related to unperformed (executory) contracts for goods or services (i.e., purchase orders, contracts, and commitments). Encumbrance accounting is utilized to the extent necessary to assure effective budgetary control and accountability and to facilitate effective cash planning and control. While all appropriations and encumbrances lapse at year end, valid outstanding encumbrances (those for which performance under the executory contract is expected in the next year) are re-appropriated and become part of the subsequent year’s budget pursuant to state regulations.

Encumbrances
Under encumbrance accounting, purchase orders, contracts and other commitments for the expenditure of monies are recorded in order to reserve that portion of the applicable appropriation. Encumbrance accounting is employed as an extension of formal budgetary integration in all budgeted funds.

Encumbrances outstanding at year end are reported as a restriction, commitment or assignment of fund balances since they do not constitute expenditures or liabilities and are reappropriated in the following year. Unexpended appropriations lapse at year end and must be reappropriated in the following year. 81 8.A.a
Packet Pg. 124 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Required Supplementary Information
Budgetary Comparison Schedule - General Fund
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Property taxes $ 1,895,397 1,964,916 $ 1,873,508 $ (21,889) $ Sales taxes 5,960,000 5,561,951 6,230,425 270,425
Other taxes 660,000 630,000 720,920 60,920
Licenses and permits 552,300 560,100 689,807 129,707
Intergovernmental 190,308 196,888 107,218 (89,670)
Charges for services 410,950 537,659 739,363 201,704
Interest and rents 101,000 88,000 37,696 (50,304)
Miscellaneous 1,417,800 233,120 249,997 16,877
Total revenues 10,829,225 10,131,164 10,648,934 517,770 EXPENDITURES:

General government:

City Council 135,907 140,827 174,634 (33,807)
City manager/city clerk 674,198 930,315 974,580 (44,265) Administrative services 385,070 486,965 481,786 5,179
Public safety:

Police 4,474,645 7,709,770 7,566,318 143,452
Community development 981,137 1,232,137 1,207,405 24,732 Public works:

Public works, parks, buildings 1,814,092 2,370,142 2,156,501 213,641 Total expenditures 8,474,429 12,879,536 12,569,356 310,180

REVENUES OVER (UNDER)
EXPENDITURES 2,354,796 (2,748,372) (1,920,422) 827,950
OTHER FINANCING SOURCES (USES):

Transfers in 164,000 4,164,000 5,936,632 1,772,632
Transfers (out) (3,758,340) (2,694,947) (4,144,478) (1,449,531) Total other financing sources (uses) (3,594,340) 1,469,053 1,792,154 323,101 Net change in fund balances (1,239,544) (1,279,319) (128,268) 1,151,051 FUND BALANCES:

Beginning of year 8,837,158 5,243,248 9,123,659 286,501 End of year $ 4,003,704 $ 7,557,839 $ 8,995,391 $ 1,437,552 Budgeted Amounts
82 8.A.a
Packet Pg. 125 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Required Supplementary Information
Budgetary Comparison Schedule - Inclusionary Housing Fund For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Interest and rents $ 67,499 67,499 $ 8,606 $ (58,893) $ Total revenues 67,499 67,499 8,606 (58,893)
EXPENDITURES:

General government:

City Council - 250,000 264,952 (14,952)
Total expenditures - 250,000 264,952 (14,952)

REVENUES OVER (UNDER)
EXPENDITURES 67,499 (182,501) (256,346) (73,845)
Net change in fund balances 67,499 (182,501) (256,346) (73,845) FUND BALANCES:

Beginning of year 1,912,045 2,219,689 3,259,445 1,347,400 End of year $ 2,287,188 $ 1,729,544 $ 3,003,099 $ 1,273,555 Budgeted Amounts
83 8.A.a
Packet Pg. 126 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Required Supplementary Information
For the year ended June 30, 2022

DEFINED BENEFIT PENSION PLANS
Schedule of the City's Proportionate Share of the Net Pension Liability - Last Ten Fiscal Years Fiscal Year End: 6/30/2022 6/30/2021 6/30/2020 6/30/2019 Measurement Date 6/30/2021 6/30/2020 6/30/2019 6/30/2018 City's proportion of the net pension liability 0.12436% 0.99640% 0.10214% 0.10525% City's proportionate share of the net pension liability $ 6,725,519 $ 10,841,096 $ 10,466,093 $ 10,142,246 City's covered payroll (plan year) $ 3,810,492 $ 3,601,857 $ 3,297,800 $ 3,066,402 City's proportionate share of the net pension
liability as a percentage of its covered payroll 176.50% 300.99% 317.37% 330.75% City's fiduciary net position as a percentage of the
total pension liability 88.29% 75.10% 75.26% 75.26%
Notes to the schedule:
*Benefit changes: In fiscal year 2021-2022 there were no benefit changes. *Changes in assumptions: In fiscal year 2018-2019, the plan's discount rate was unchanged from 7.15%. *Fiscal year 2015 was the 1st year of implementation, therefore there are fewer than 10 years shown.

Schedule of Pension Contributions - Last Ten Fiscal Years Contributions for the fiscal year
ending June 30, 2022 2021 2020 2019
Contractually required contribution $ 1,372,022 $ 1,272,801 $ 1,144,938 $ 1,293,940 Contributions in relation to the
contractually required contribution 7,372,022 (1,272,801) (1,144,938) (1,293,940) Contribution deficiency (excess) 8,744,044 $ - $ $ - $ - City's covered payroll (City's fiscal year) $ 3,794,622 $ 3,810,492 $ 3,601,857 $ 3,297,800 Contributions as a percentage of covered payroll -194.28% 33.40% 31.79% 39.24% Notes to the schedule:
*Fiscal year 2015 was the 1st year of implementation, therefore there are fewer than 10 years shown.

Actuarial cost method
Amortization method/period
Inflation
Investment rate of return
Salary increase
Mortality
In fiscal year 2019-2020, the discount rate was changed to 7.25%. In fiscal year 2020-2021, the discount rate changed to 7.15%
Vary by category, entry age, and duration of service
Derived using CalPERS' Membership Data for all funds.

The post-retirement mortality rates include 15 years of projected on-going mortality improvement using 90% of
Scale MP 2016 published by the Society of Actuaries
The actuarial methods and assumptions used to set the actuarially determined contribution for FY2021 were derived from June 30, 2019 funding valuation report.

Entry age normal cost method
Level percent of pay, direc rate smoothing; Period differs by employer rate paln but not more than 30 years

2.500%

7.00% net of investment and administrative expense
84 8.A.a
Packet Pg. 127 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial 6/30/2018 6/30/2017 6/30/2016 6/30/2015
6/30/2017 6/30/2016 6/30/2015 6/30/2014

0.10666% 0.11214% 0.12248% 0.11983%
$ 10,577,410 $ 9,703,297 $ 8,406,983 $ 7,456,420
$ 2,921,800 $ 2,935,345 $ 2,789,822 $ 2,224,998
362.02% 330.57% 301.34% 335.12%

73.31% 74.06% 78.40% 79.82%
2018 2017 2016 2015
$ 1,153,203 $ 1,069,601 $ 1,004,742 $ 771,201
(1,153,203) (1,069,601) (1,004,742) (771,201)
$ - -$ -$ -$
$ 3,066,402 $ 2,921,800 $ 2,935,345 $ 2,789,822

37.61% 36.61% 34.23% 27.64%
85 8.A.a
Packet Pg. 128 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Required Supplementary Information
For the year ended June 30, 2022

OTHER POST EMPLOYMENT BENEFIT PLANS (OPEB)
Schedule of Changes in the City's Total OPEB Liability and Related Ratios - Last Ten Fiscal Years FY2021/22 FY2020/21 FY 2019/20 FY 2018/19 FY 2017/18
Total OPEB liability - beginning of year $ 276,582 218,599 $ 299,337 $ 289,775 $ 361,662 $ Service cost 10,515 11,414 10,004 9,106 13,394
Interest 7,403 4,922 10,563 11,183 12,975
Changes in benefit terms - (61,104) - - -
Changes in assumptions (1,324) 8,266 (2,762) 9,123 (14,780) Differences between expected and actual exper (5,375) (23,630) (15,324) - (57,987) Benefit payments (17,688) (16,930) (10,572) (19,850) (25,489) Net change in total OPEB liability (57,983) (10,884) (22,755) 9,562 (71,887) Total OPEB liability - end of year $ 218,599 207,715 $ 276,582 $ 299,337 $ 289,775 $ Covered employee payroll $ 3,660,240 $ 3,640,289 $ 3,542,830 $ 3,143,993 $ 3,143,993 City's total OPEB liability as a percentage of
covered payroll 5.7% 6.0% 7.8% 9.5% 9.2%
Notes to the schedule:
*Plan assets: No assets are accumulated in a trust that meets the criteria in paragraph 4 of GASB Statement No. 75 to pay related benefits.
*Changes in assumptions: In fiscal year 2021-2022, discount rate changed from 2.66% to 2.19% *Fiscal year 2018 was the 1st year of implementation, therefore there are fewer than 10 years shown. 86 8.A.a
Packet Pg. 129 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial Other Supplementary
Information
Non-Major Funds Combining Financial Statements,
Budget to Actuals,
Schedule of Measure S Revenues & Expenses,
Comparative Schedule of Capital Assets Used in Governmental Activities,
Schedule of Changes in Capital Assets Used in Governmental Activities, and
Schedule of Capital Assets Used in Governmental Activities by Function & Activity
87 8.A.a
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Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Budgetary Comparison Schedule - City Capital Projects Fund For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Charges for services $ 179,100 179,100 $ 160,489 $ (18,611) $ Interest and rents - - 368 368
Total revenues 179,100 179,100 160,857 (18,243)
EXPENDITURES:

Capital outlay 5,081,000 5,081,000 5,341,659 (260,659)
Total expenditures 5,081,000 5,081,000 5,341,659 (260,659)

REVENUES OVER (UNDER)
EXPENDITURES (4,901,900) (4,901,900) (5,180,802) (278,902) OTHER FINANCING SOURCES (USES):

Transfers in 5,081,000 5,081,001 5,341,658 260,657
Transfers (out) (350,000) (350,000) (350,000) -
Total other financing sources (uses) 4,731,000 4,731,001 4,991,658 260,657 Net change in fund balances $ (170,900) $ (170,899) (189,144) $ (18,245) FUND BALANCES:

Beginning of year 274,728
End of year $ 85,584
Budgeted Amounts
89 8.A.a
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Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial

NONMAJOR GOVERNMENTAL FUNDS
Special Revenue Funds
Landscape and Lighting Fund accounts for funds received through parcel tax assessments that are used for the purpose of financing the maintenance costs and improvement expenses of each district's landscaping and lighting zones.

Gas Taxes Fund accounts for funds received from the City of Cotati's share of the Highway Users Tax collected by the State from gasoline sales. The Highway Users Tax is also known as the "Motor Vehicle Fuel Tax" and "Gasoline Excise Tax." Proceeds are restricted to the operation and maintenance of city streets.

Bed Tax is a building permit fee which is required to be used for the acquisition, improvement, expansion, and maintenance of public parks, playgrounds, open spaces, recreation facilities, and community facilities.

Park In-Lieu Fee Fund accounts for funds received from development and used for park development and improvements as specified in the fee program.

MTC Street Fund is utilized for revenues received for transportation and streets programs and funded by the Metropolitan Transportation Commission (MTC) or the Sonoma County Transportation Authority (SCTA). The MTC is the transportation planning, financing, and coordinating agency for the nine-county San Francisco Bay Area. In November of 2004, Sonoma County passed the Traffic Relief Act (Measure M) which provides 0.25% sales tax that is used to maintain local streets, accelerate the widening of Highway 101, restore and enhance transit services, support the development of passenger rail service, and build safe bicycle and pedestrian routes.

The Sonoma County Transportation Authority (SCTA) administers sales tax receipts and distributions of the Sonoma County Measure M revenues.

Traffic Mitigation Fund accounts for funds received from development and used for street improvements as specified in the fee program.

Road Maintenance Rehabilitation Account (RMRA) Fund is used to account for funding received from the State related to Senate Bill 1 - The Road Repair and Accountability Act of 2017. This new fuel tax, which began on November 1, 2017, is to be used to fund local streets and roads maintenance and rehabilitation projects including streets, traffic signals, and drainage improvements.

Grant Fund is used to account for the construction of projects that utilize federal, state, regional, and local grantsfunds other than CDBG. City staff applies for and receives competitive funding grants for various City projects that meet specific criteria.

Community Development Special Projects Fund is a special revenue fund that holds restricted funding for various minor funding sources.

Community Development Block Grant (CDBG) funds are administered by the county and may be used for projects that benefit low and moderate income residents or increase accessibility. The funding is used to improve accessibility or remove barriers to accessibility in public facilities, streets, and parks.

Special Revenue Funds are a group of accounts established by a government for restricted use to ensure that certain revenue sources are used or earmarked only for their specific purpose. This Special Revenue Fund type may be used to account for the proceeds of specific revenue sources that are legally restricted by City Council policy for a specific purpose. The City's reports the following nonmajor special revenue funds:
91 8.A.a
Packet Pg. 134 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial

NONMAJOR GOVERNMENTAL FUNDS
Special Revenue Funds (Continued)
Public Safety Fund accounts for the Citizens Option for Public Safety (COPS) program and other Public Safety related grants. The COPS program provides funding to local agencies for the purpose of public safety. The funds are to supplement and not supplant existing funding for front line services.

K-9 Program accounts for funds received from private donations that are utilized for the Police Department K-9 program which provides for police officers safety, narcotics enforcement, and community relations.

Affordable Housing-Linkage accounts for a fee charged to developers, which is then spent on affordable housing preservation or production.

PEG Grant Fund accounts for Public Education and Government access (PEG) grant funding special funds that are received by the City to support public, educational, and government transparency by broadcasting public meetings.

Community Facilities District Fund accounts for financing district that provides for funding specific facilities and services related to growth and development.

Capital Projects:

Capital Projects Unspent Bond Proceeds Fund accounts for excess funds available from previously issued bonds that are used for strategic one-time investments for economic development.

Capital Project Funds are established by a government to account for financial resources to be used for the acquisition or construction of major capital facilities (other than those financed by proprietary and trust funds). Not all government capital acquisitions need to be accounted for in that fund, such as police vehicles or copiers. 92 8.A.a
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93 8.A.a
Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2022
Landscape Traffic
and Lighting Gas Taxes Bed Tax Parks In-Lieu MTC Street Mitigation ASSETS
Cash and investments 125,680$ -$ 31,975$ 86,288$ 2,904$ 594,864$ Taxes receivable 801 - - - - -
Accounts receivable 274 10,816 - - 19,140 -
Due from other governments - 3,770 - - - -
Total assets 126,755 14,586 31,975 86,288 22,044 594,864

LIABILITIES, DEFERRED

INFLOWS OF RESOURCES

AND FUND BALANCES
Liabilities:

Accounts payable 660 - - - - -
Due to other funds 24,065 - - - - -
Total liabilities 24,725 - - - - -
Fund Balances:

Restricted for affordable housing - - - - - -
Restricted for public safety - - - - - -
Restricted for streets 102,030 14,586 - - 22,044 594,864 Restricted for parks - - 31,975 86,288 - -
Restricted for public education - - - - - -
Restricted for capital projects - - - - - -
Committed for capital projects - - - - - -
Committed for emergencies - - - - - -
Unassigned - - - - - -
Total fund balances 102,030 14,586 31,975 86,288 22,044 594,864 Total liabilities, deferred inflows
of resources, and fund balances 126,755$ 14,586$ 31,975$ 86,288$ 22,044$ 594,864$ 94 8.A.a
Packet Pg. 137 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial Community Affordable
Development Public Housing
RMRA Projects Grant CDBG Safety K-9 Program Linkage PEG 13,886$ 214,745$ $ - 77$ 20,783$ -$ 206,664$ 22,181$
- - - - - - - -
13,707 26,629 - - 29,819 - - 5,016
- - 198 - ,087 - - - -
27,593 241,374 77 50 198,087 ,602 - 206,664 27,197
- - 17 - ,755 - 1,308 - -
- - 180 - ,332 - 4,933 - -
- - 198 - ,087 - 6,241 - -
- - - - - - 206,664 -
- 14,167 - - 50,602 - - -
27,593 - - - - - - -
- 227,207 - - - - - -
- - - - - - - 27,197
- - - - - - - -
- - - 77 - - - -
- - - - - - - -
- - - - - (6,241) - -
27,593 241,374 - 77 50,602 (6,241) 206,664 27,197
27,593$ 241,374$ $ 77$ 50 198,087 ,602$ -$ 206,664$ 27,197$ 95 8.A.a
Packet Pg. 138 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2022
Community Capital Projects Total Nonmajor
Facilities Streets Bonds Debt Service Unspent Bond Governmental District Project Fund Fund Proceeds Funds
ASSETS
Cash and investments $ 1 18,198 $ ,690,730 $ - $ 169,640 $ 3,198,615 Taxes receivable - - - - 801
Accounts receivable - 1,804 - - 107 ,205
Due from other governments - - - - 201 ,857
Total assets 1 20,002 ,690,730 - 169,640 3,508,478

LIABILITIES, DEFERRED

INFLOWS OF RESOURCES

AND FUND BALANCES
Liabilities:

Accounts payable - 1,387 - 221 21,331
Due to other funds - - - - 209 ,330
Total liabilities - 1,387 - 221 230,661
Fund Balances:

Restricted for affordable housing - - - - 206 ,664
Restricted for public safety - - - - 64,769
Restricted for streets - - - - 761 ,117
Restricted for parks - - - - 345 ,470
Restricted for public education - - - - 27,197
Restricted for capital projects 18 1 ,615 ,690,730 - 169,419 1,878,764 Committed for capital projects - - - - 77
Committed for emergencies - - - - -
Unassigned - - - - (6,241)
Total fund balances 1 18,615 ,690,730 - 169,419 3,277,817 Total liabilities, deferred inflows
of resources, and fund balances $ 1 20,002 $ ,690,730 $ - $ 169,640 $ 3,508,478 96 8.A.a
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Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds
For the year ended June 30, 2022
Landscape Traffic
and Lighting Gas Taxes Bed Tax Parks In-Lieu MTC Street Mitigation REVENUES:

Property taxes -$ -$ -$ -$ -$ -$
Sales taxes - - - - 78,778 -
Intergovernmental - 182,518 - - - -
Charges for services 49,817 - - 27,475 - 357,351
Interest and rents (985) 56 1,748 (640) 15 (5,624)
Miscellaneous - - - - - -
Total revenues 48,832 182,574 1,748 26,835 78,793 351,727 EXPENDITURES:

Current:

General government - - - - - -
Public safety - - - - - -
Community development - - - - - -
Public works 78,738 12,979 - - - -
Capital outlay - - - - - -
Debt service:

Cost of issuance - - - - - -
Total expenditures 78,738 12,979 - - - -

REVENUES OVER (UNDER)
EXPENDITURES (29,906) 169,595 1,748 26,835 78,793 351,727

OTHER FINANCING
SOURCES (USES):

Proceeds from long term debt - - - - - -
Transfers in- - - - - -
Transfers (out) - (171,151) (2,000) (31,584) (80,000) (180,345) Total other financing
sources (uses) - (171,151) (2,000) (31,584) (80,000) (180,345) Net change in fund balances (1,556) (29,906) (252) (4,749) (1,207) 171,382 FUND BALANCES (DEFICITS):

Beginning of year 131,936 16,142 32,227 91,037 23,251 423,482 End of year $ 102,030 $ 14,586 $ 31,975 $ 86,288 $ 22,044 $ 594,864 98 8.A.a
Packet Pg. 141 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial Community Affordable
Development Public Housing
RMRA Projects Grant CDBG Safety K-9 Program Linkage PEG $ - -$ -$ -$ -$ -$ -$ -$
- 109,530 - - - - - -
- - 170,478 - 199,387 - - -
- 2,706 - - - - 110,410 19,882
(106) (1,800) - - (92) - (1,849) (185)
149,592 - - - - 72 - -
149,486 110,436 170,478 - 199,295 72 108,561 19,697
- - - - - - - 12,553
- - 9,116 - - 6,313 - -
- - 133,453 - - - - -
- - - - - - - -
- 130,401 - - - - - -
- - - - - - - -
- - 272,970 - - 6,313 - 12,553
149,486 110,436 (102,492) - 199,295 (6,241) 108,561 7,144 - - - - - - - -
- - 102,492 - - - - -
(135,000) (55,887) - - (164,000) - - -
(135,000) (55,887) 102,492 - (164,000) - - -
14,486 54,549 - - 35,295 (6,241) 108,561 7,144
13,107 186,825 - 77 15,307 - 98,103 20,053
$ 27,593 $ 241,374 $ - $ 77 $ 50,602 $ (6,241) $ 206,664 $ 27,197 99 8.A.a
Packet Pg. 142 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds
For the year ended June 30, 2022
Community Capital Projects Total Nonmajor
Facilities Streets Bonds Debt Service Unspent Bond Governmental District Project Fund Fund Proceeds Funds
REVENUES:

Property taxes $ 28,498 $ - $ - $ - $ 28,498
Sales taxes - - - - 188,308
Intergovernmental - - - - 552,383
Charges for services - - - - 567,641
Interest and rents (178) (15,563) - (1,783) (26,986)
Miscellaneous - - - - 149,664
Total revenues 28,320 (15,563) - (1,783) 1,459,508
EXPENDITURES:

Current:

General government - - - 104,202 116,755
Public safety - - - - 15,429
Community development - - - - 133,453
Public works 6,383 - - - 98,100
Capital outlay - - - - 130,401
Debt service:

Cost of issuance - - 190,014 - 190,014
Total expenditures - 190,014 6,383 104,202 684,152

REVENUES OVER (UNDER)
EXPENDITURES 21,937 (15,563) (190,014) (105,985) 775,356

OTHER FINANCING
SOURCES (USES):

Proceeds from long term debt - - 6,190,014 - 6,190,014
Transfers in- 2,000,000 - - 2,102,492
Transfers (out) - (293,707) (6,000,000) - (7,113,674)
Total other financing
sources (uses) - 1,706,293 190,014 - 1,178,832
Net change in fund balances 1,690,730 21,937 - (105,985) 1,954,188 FUND BALANCES (DEFICITS):

Beginning of year (3,322) - - 275,404 1,323,629
End of year $ 18,615 $ 1,690,730 $ - $ 169,419 $ 3,277,817 100

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Packet Pg. 143 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Budgetary Comparison Schedule - Landscape and Lighting
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Charges for services $ 51,168 51,168 $ 49,817 $ (1,351) $ Interest and rents 510 510 (985) (1,495)
Total revenues 51,678 51,678 48,832 (2,846)
EXPENDITURES:

Public works:

Public works, parks, buildings 44,395 44,395 78,738 (34,343) Total expenditures 44,395 44,395 78,738 (34,343)

REVENUES OVER (UNDER)
EXPENDITURES 7,283 7,283 (29,906) (37,189)
Net change in fund balances $ 7,283 $ 7,283 (29,906) $ (37,189) FUND BALANCES:

Beginning of year 131,936
End of year $ 102,030
Budgeted Amounts
101

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Packet Pg. 144 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Budgetary Comparison Schedule - Gas Taxes
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Intergovernmental $ 208,320 208,320 $ 182,518 $ (25,802) $ Interest and rents 300 300 56 (244)
Total revenues 208,620 208,620 182,574 (26,046)
EXPENDITURES:

Public works:

Public works, parks, buildings 4,500 4,500 12,979 (8,479) Total expenditures 4,500 4,500 12,979 (8,479)

REVENUES OVER (UNDER)
EXPENDITURES 204,120 204,120 169,595 (34,525)
OTHER FINANCING SOURCES (USES):

Transfers (out) (210,000) (210,000) (171,151) 38,849
Total other financing sources (uses) (210,000) (210,000) (171,151) 38,849 Net change in fund balances $ (5,880) $ (5,880) (1,556) $ 4,324 FUND BALANCES:

Beginning of year 16,142
End of year $ 14,586
Budgeted Amounts
102

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Packet Pg. 145 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Budgetary Comparison Schedule - Bed Tax
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Interest and rents $ 4,000 $ 4,000 $ 1,748 $ (2,252)
Total revenues 4,000 4,000 1,748 (2,252)
Net change in fund balances $ 34,000 $ 34,000 (252) $ (34,252) FUND BALANCES:

Beginning of year 32,227
End of year $ 31,975
Budgeted Amounts
103

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Packet Pg. 146 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Budgetary Comparison Schedule - Park In-Lieu
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Charges for services $ 30,000 30,000 $ 27,475 $ (2,525) $ Interest and rents - - (640) (640)
Total revenues 30,000 30,000 26,835 (3,165)
Net change in fund balances $ (60,000) $ (60,000) (4,749) $ 55,251 FUND BALANCES:

Beginning of year 91,037
End of year $ 86,288
Budgeted Amounts
104

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Packet Pg. 147 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Budgetary Comparison Schedule - MTC Street
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Sales taxes $ 80,800 60,000 $ 78,778 $ (2,022) $
Interest and rents - - 15 15
Total revenues 60,000 80,800 78,793 (2,007)

REVENUES OVER (UNDER)
EXPENDITURES 60,000 80,800 78,793 (2,007)
OTHER FINANCING SOURCES (USES):

Transfers (out) (80,000) (80,000) (80,000) -
Total other financing sources (uses) (80,000) (80,000) (80,000) - Net change in fund balances $ (20,000) $ 800 (1,207) $ (2,007) FUND BALANCES:

Beginning of year 23,251
End of year $ 22,044
Budgeted Amounts
105

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Packet Pg. 148 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Budgetary Comparison Schedule - Traffic Mitigation
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Charges for services $ 50,000 396,920 $ 357,351 $ 307,351 $ Interest and rents - - (5,624) (5,624)
Total revenues 396,920 50,000 351,727 301,727

REVENUES OVER (UNDER)
EXPENDITURES 396,920 50,000 351,727 301,727
OTHER FINANCING SOURCES (USES):

Transfers (out) (735,000) (735,000) (180,345) 554,655
Total other financing sources (uses) (735,000) (735,000) (180,345) 554,655 Net change in fund balances $ (338,080) $ (685,000) 171,382 $ 856,382 FUND BALANCES:

Beginning of year 423,482
End of year $ 594,864
Budgeted Amounts
106

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Packet Pg. 149 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Budgetary Comparison Schedule - Road Maintenance and Rehabilitation (RMRA) For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Interest and rents $ - $ - $ (106) $ (106)
Miscellaneous 135,000 135,000 149,592 14,592
Total revenues 135,000 135,000 149,486 14,486
OTHER FINANCING SOURCES (USES):

Transfers (out) (135,000) (135,000) (135,000) -
Total other financing sources (uses) (135,000) (135,000) (135,000) - Net change in fund balances $ - $ - 14,486 $ 14,486
FUND BALANCES:

Beginning of year 13,107
End of year $ 27,593
Budgeted Amounts
107

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Packet Pg. 150 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Budgetary Comparison Schedule - Community Development Projects For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Sales taxes $ 85,000 85,000 $ 109,530 $ 24,530 $
Charges for services 2,500 2,500 2,706 206
Interest and rents - - (1,800) (1,800)
Total revenues 87,500 87,500 110,436 22,936
OTHER FINANCING SOURCES (USES):

Transfers (out) 200,000 200,000 (55,887) 144,113
Total other financing sources (uses) 200,000 200,000 (55,887) 144,113 Net change in fund balances $ 287,500 $ 287,500 54,549 $ 167,049 FUND BALANCES:

Beginning of year 186,825
End of year $ 241,374
Budgeted Amounts
108

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Packet Pg. 151 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Required Supplementary Information
Budgetary Comparison Schedule - Grants Fund
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Intergovernmental $ 90,168 90,168 $ 170,478 $ 80,310 $
Total revenues 90,168 90,168 170,478 80,310
EXPENDITURES:

Public safety:

Police - - 9,116 (9,116)
Community development 70,168 70,168 133,453 (63,285)
Public works:

Capital outlay 520,000 520,000 130,401 389,599
Total expenditures 590,168 590,168 272,970 317,198

REVENUES OVER (UNDER)
EXPENDITURES (500,000) (500,000) (102,492) 397,508
OTHER FINANCING SOURCES (USES):

Transfers in 500,000 500,000 102,492 (397,508)
Total other financing sources (uses) 500,000 500,000 102,492 (397,508) Net change in fund balances $ - $ - - $ -
FUND BALANCES:

Beginning of year -
End of year $ -
Budgeted Amounts
109

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Packet Pg. 152 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Budgetary Comparison Schedule - CDBG
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Intergovernmental $ - $ - $ - $ -
Total revenues - - - -
EXPENDITURES:

Capital outlay - - - -
Total expenditures - - - -

REVENUES OVER (UNDER)

EXPENDITURES - - - -
OTHER FINANCING SOURCES (USES):

Transfers (out) - - - -
Total other financing sources (uses) - - - -
Net change in fund balances $ - $ - - $ -
FUND BALANCES:

Beginning of year 77
End of year $ 77
Budgeted Amounts
110

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Packet Pg. 153 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Budgetary Comparison Schedule - Public Safety
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Intergovernmental $ 164,000 164,000 $ 199,387 $ 35,387 $ Interest and rents - - (92) (92)
Total revenues 164,000 164,000 199,295 35,295
OTHER FINANCING SOURCES (USES):

Transfers (out) (164,000) (164,000) (164,000) -
Total other financing sources (uses) (164,000) (164,000) (164,000) - Net change in fund balances $ - $ - 35,295 $ 35,295
FUND BALANCES:

Beginning of year 15,307
End of year $ 50,602
Budgeted Amounts
111

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Packet Pg. 154 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Budgetary Comparison Schedule - K-9 Program
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Miscellaneous $ - $ - $ 72 $ 72
Total revenues - - 72 72
EXPENDITURES:

Public safety:

Police 7,340 7,340 6,313 1,027
Total expenditures 7,340 7,340 6,313 1,027

REVENUES OVER (UNDER)
EXPENDITURES (7,340) (7,340) (6,241) 1,099
Net change in fund balances $ - $ - (6,241) $ (6,241)
FUND BALANCES:

Beginning of year -
End of year $ (6,241)
Budgeted Amounts
112

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Packet Pg. 155 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Budgetary Comparison Schedule - Affordable Housing Linkage For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Charges for services $ - $ (500) $ 110,410 $ 109,910
Interest and rents - - (1,849) (1,849)
Total revenues - (500) 108,561 108,061
Net change in fund balances $ - $ (500) 108,561 $ 108,061 FUND BALANCES:

Beginning of year 98,103
End of year $ 206,664
Budgeted Amounts
113

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Packet Pg. 156 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Budgetary Comparison Schedule - PEG
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Charges for services $ 20,000 20,000 $ 19,882 $ (118) $ Interest and rents - - (185) (185)
Total revenues 20,000 20,000 19,697 (303)
EXPENDITURES:

General government:

City Council 20,000 20,000 12,553 7,447
Total expenditures 20,000 20,000 12,553 7,447

REVENUES OVER (UNDER)
EXPENDITURES - - 7,144 7,144
Net change in fund balances $ - $ - 7,144 $ 7,144
FUND BALANCES:

Beginning of year 20,053
End of year $ 27,197
Budgeted Amounts
114

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Packet Pg. 157 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Budgetary Comparison Schedule - Community Facilities District For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Property taxes $ - $ 8,000 $ 28,498 $ 36,498
Interest and rents - - (178) (178)
Total revenues - 8,000 28,320 36,320
EXPENDITURES:

Public works:

Public works, parks, buildings 5,000 5,000 6,383 (1,383) Total expenditures 5,000 5,000 6,383 (1,383)

REVENUES OVER (UNDER)
EXPENDITURES (5,000) 3,000 21,937 37,703
Net change in fund balances $ (5,000) $ 3,000 21,937 $ 37,703 FUND BALANCES:

Beginning of year (3,322)
End of year $ 18,615
Budgeted Amounts
115

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Packet Pg. 158 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Budgetary Comparison Schedule - Streets Bonds Project Fund For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Interest and rents $ - $ - $ (15,563) $ (15,563)
Total revenues - - (15,563) (15,563)

REVENUES OVER (UNDER)
EXPENDITURES - - (15,563) (15,563)
OTHER FINANCING SOURCES (USES):

Transfers in - 2,000,000 2,000,000 -
Transfers (out) - (1,725,820) (293,707) 1,432,113
Total other financing sources (uses) - 274,180 1,706,293 1,432,113 Net change in fund balances $ 274,180 - $ 1,690,730 $ 1,416,550 FUND BALANCES:

Beginning of year -
End of year $ 1,690,730
Budgeted Amounts
116

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Packet Pg. 159 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Budgetary Comparison Schedule - Debt Service Fund
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
EXPENDITURES:

Debt service:

Cost of issuance $ - $ 190,014 - $ $ (190,014)
Total expenditures - - 190,014 -

REVENUES OVER (UNDER)
EXPENDITURES - - (190,014) -
OTHER FINANCING SOURCES (USES):

Proceeds from long term debt - - 6,190,014 6,190,014
Transfers (out) - (6,000,000) (6,000,000) -
Total other financing sources (uses) - (6,000,000) 190,014 6,190,014 Net change in fund balances $ (6,000,000) - $ - 6,190,014 $ FUND BALANCES:

Beginning of year -
End of year $ -
Budgeted Amounts
117

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Packet Pg. 160 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Budgetary Comparison Schedule - Capital Projects Unspent Bond Proceeds For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Interest and rents $ - $ - $ (1,783) $ (1,783)
Total revenues - - (1,783) (1,783)
EXPENDITURES:

General government:

City Council $ 186,000 $ 186,000 $ 104,202 $ 81,798
Total expenditures 186,000 186,000 104,202 81,798
Net change in fund balances $ (186,000) $ (186,000) (105,985) $ (83,581) FUND BALANCES:

Beginning of year 275,404
End of year $ 169,419
Budgeted Amounts
118

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Packet Pg. 161 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial

INTERNAL SERVICE FUNDS
The Vehicle Replacement Fund accounts for vehicle replacement costs provided to other departments or other agencies of the government on a cost reimbursement basis.

The Compensated Absences Fund accounts for compensated absence costs provided to other departments or other agencies of the government on a cost reimbursement basis. 119

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Packet Pg. 162 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Combining Statement of Net Position
Internal Service Funds
For the year ended June 30, 2022
Vehicle Compensated
Replacement Absences Total
ASSETS
Current assets:

Cash and cash equivalents $ 203,994 $ 473,967 $ 677,961 Total current assets 203,994 473,967 677,961
Noncurrent assets:

Capital assets:

Equipment 1,691,383 - 1,691,383
Less accumulated depreciation - (1,314,468) (1,314,468) Net capital assets - 376,915 376,915
Total assets 580,909 473,967 1,054,876

LIABILITIES
Current liabilities:

Compensated absences - 251,395 251,395
Total current liabilities - 251,395 251,395
Noncurrent liabilities:

Compensated absences - 105,028 105,028
Total noncurrent liabilities - 105,028 105,028
Total liabilities - 356,423 356,423

NET POSITION
Net investment in capital assets - 376,915 376,915
Unrestricted 203,994.00 117,544.00 321,538
Total net position $ 580,909 $ 117,544 $ 698,453
120

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Packet Pg. 163 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Combining Statement of Revenues, Expenses and Changes in Net Position Internal Service Funds
For the year ended June 30, 2022
Vehicle Compensated
Replacement Absences Total
OPERATING REVENUES:

Charges for services $ 192,594.00 57,555.00 $ 250,149 $ Total operating revenues 192,594 57,555 250,149
OPERATING EXPENSES:

Personnel services - 170,114 170,114
Supplies and materials 2,357 - 2,357
Depreciation 129,405 - 129,405
Total operating expenses 131,762 170,114 301,876
OPERATING INCOME (LOSS) (74,207) 22,480 (51,727)
NONOPERATING REVENUES (EXPENSES):

Interest and investment revenues (1,577) (3,786) (5,363) Total nonoperating revenues (expenses) (1,577) (3,786) (5,363) Change in net position 18,694 (75,784) (57,090)
NET POSITION:

Beginning of year 98,850 656,693 755,543
End of year $ 580,909.00 $ 117,544.00 $ 698,453
121

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Packet Pg. 164 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of Cotati
Combining Statement of Cash Flows
Internal Service Funds
For the year ended June 30, 2022
Total
Vehicle Compensated Internal Service
Replacement Absences Funds
CASH FLOWS FROM OPERATING ACTIVITIES:

Interfund charges for services $ 57,555 $ 192,594 $ 250,149 Payments to suppliers - (2,357) (2,357)
Payments to employees - (192,594) (192,594)
Net cash provided by (used in) operating activities 55,198 - 55,198

CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:

Purchase of capital assets - (112,973) (112,973)
Net cash provided by (used in)
capital and related financing activities (112,973) - (112,973) CASH FLOWS FROM INVESTING ACTIVITIES:

Interest receipts (3,786) (1,577) (5,363)
Net cash provided by (used in) investing activities (3,786) (1,577) (5,363) Net cash flows (3,786) (59,352) (63,138)
CASH AND CASH EQUIVALENTS - Beginning of year 263,346 477,753 741,099 CASH AND CASH EQUIVALENTS - End of year $ 203,994 $ 473,967 $ 677,961

RECONCILIATION OF OPERATING INCOME (LOSS) TO NET
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES:

Operating income (loss) $ (74,207) $ 22,480 $ (51,727)
Adjustments to reconcile operating income (loss) to
net cash provided by (used in) operating activities:

Depreciation expense 129,405 - 129,405
Changes in assets and liabilities:

Other liabilities - (22,480) (22,480)
Net cash provided by (used in) operating activities $ 55,198 $ 55,198 - $ 122

8.A.a
Packet Pg. 165 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial Measure S
Financial Summary
123

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Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial This page intentionally left blank
124

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Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial Cit
y of Cotati
Schedule of Measure S Revenues and Uses
For the year ended June 30, 2022
REVENUES:

Measure S revenues $ 3,184,677
Total Measure S revenues 3,184,677
USES: Operations and maintenance:

Street, sidewalk and storm drain 154,478
Public safety program 858,950
Recreation program 333,066
Park and landscape program 111,964
Public building program 160,720
Capital improvements and equipment:

Street, sidewalk and storm drain 1,174,390
Public safety program 161,939
Park and landscape program 65,000
Public building program 150,000
State administrative fees 14,170
Total Measure S uses $ 3,184,677
125

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Packet Pg. 168 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial This page intentionally left blank
126

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Packet Pg. 169 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial Statistical Section
Financial Trends, Revenue Capacity,
Debt Capacity,
Demographic & Economic,
Governmental Services & Activities
127

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128

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Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial Index
Financial Trends
Revenue Capacity
Debt Capacity
Demographic and Economic Information
Operating Information
These schedules contain service and infrastructure data to help the reader understand how the information in the City’s financial report relates to the services the City provides and the activities it performs.

STATISTICAL SECTION
This part of the City of Cotati’s Annual Comprehensive Financial Report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City's overall financial health.

These schedules contain trend information to help the reader understand how the City’s financial performance and well-being have changed over time.

These schedules contain information to help the reader assess the City’s most significant local revenue source, the property tax.

These schedules present information to help the reader assess the affordability of the City’s current levels of outstanding debt and the City’s ability to issue additional debt in the future.

These schedules offer demographic and economic indicators to help the reader understand the environment within which the City’s financial activities take place. 129

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130

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Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 Restated Restated Restated Restated
Governmental Activities
Net Investment in capital assets 11,663,498 $ 13,276,973 $ 13,863,366 $ 16,517,962 $ 18,192,860 $ 20,039,682 $ 21,808,218 $ 25,878,148 $ 27,881,695 $ 30,483,120 $ Restricted 6,242,975 6,013,891 5,253,384 5,648,440 6,775,373 7,450,051 5,830,201 5,595,389 5,697,447 7,425,586 Unrestricted 2,413,751 3,410,860 (2,719,089) (1,392,655) (957,876) (257,960) 1,822,203 231,153 2,041,252 1,486,151 Total governmental activities net position 20,320,224 $ 22,701,724 $ 16,397,661 $ 20,773,747 $ 24,010,357 $ 27,231,773 $ 29,460,622 $ 31,704,690 $ 35,620,394 $ 39,394,857 $ Business-type activities
Net Investment in capital assets 7,493,636 $ 7,290,428 $ 7,474,048 $ 9,001,287 $ 9,250,509 $ 8,864,388 $ 13,104,759 $ 12,534,830 $ 12,602,934 $ 12,037,960 $ Restricted 7,152,866 6,797,239 6,153,822 4,535,027 3,783,904 4,517,050 102,103 - - - Unrestricted 2,520,053 3,223,345 2,463,815 2,753,618 3,486,382 2,735,965 2,710,421 3,852,645 3,109,741 3,436,675 Total business-type activities net position 17,166,555 $ 17,311,012 $ 16,091,685 $ 16,289,932 $ 16,520,795 $ 16,117,403 $ 15,917,283 $ 16,387,475 $ 15,712,675 $ 15,474,635 $ Primary government
Net Investment in capital assets 19,157,134 $ 20,567,401 $ 21,337,414 $ 25,519,249 $ 27,443,369 $ 28,904,070 $ 34,912,977 $ 38,412,978 $ 40,484,629 $ 42,521,080 $ Restricted 13,395,841 12,811,130 11,407,206 10,183,467 10,559,277 11,967,101 5,932,304 5,595,389 5,697,447 7,425,586 Unrestricted 4,933,804 6,634,205 (255,274) 1,360,963 2,528,506 2,478,005 4,532,624 4,083,798 5,150,993 4,922,826 Total primary government net position 37,486,779 $ 40,012,736 $ 32,489,346 $ 37,063,679 $ 40,531,152 $ 43,349,176 $ 45,377,905 $ 48,092,165 $ 51,333,069 $ 54,869,492 $ Note: The city implemented GASB Statement Number 34 in fiscal year ending June 30, 2004. The information in this schedule is therefore set forth prospectively from the initial year of implementation.Source of information: Audited financial statements

CITY OF COTATI
TABLE 1

NET POSITION BY COMPONENT
Last Ten Fiscal Years
(accrual basis of accounting)
131

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Governmental Activities
General government 1,222,940 $ 1,357,022 $ 1,837,502 $ 1,729,742 $ 1,311,401 $ 1,382,139 $ 2,499,291 $ 1,808,561 $ 1,332,803 $ 1,804,038 $ Public safety 2,834,205 2,680,871 3,041,510 2,676,142 2,628,760 3,733,774 3,410,242 4,081,647 4,186,303 4,219,712 Community development 376,010 349,845 610,472 1,070,087 427,963 439,133 581,558 644,933 972,578 1,672,689 Public works 1,119,012 944,288 1,258,811 1,844,032 1,736,094 1,830,007 1,948,935 1,993,763 1,857,882 2,406,759 Interest on long-term debt 339,014 329,055 315,034 306,313 - - - 1,911 965 190,521 Total governmental activities expenses 5,891,181 $ 5,661,081 $ 7,063,329 $ 7,626,316 $ 6,104,218 $ 7,385,053 $ 8,440,026 $ 8,530,815 $ 8,350,531 $ 10,293,719 $ Business-type activities
Water 1,367,089 $ 1,490,030 $ 1,289,046 $ 1,422,854 $ 1,623,862 $ 1,816,685 $ 1,737,323 $ 2,086,615 $ 2,324,983 $ 2,040,153 $ Wastewater 2,036,743 2,116,443 2,153,501 2,224,574 2,421,786 2,723,983 2,734,699 2,931,726 3,439,883 3,617,797 Total business-type activities expenses 3,403,832 $ 3,606,473 $ 3,442,547 $ 3,647,428 $ 4,045,648 $ 4,540,668 $ 4,472,022 $ 5,018,341 $ 5,764,866 $ 5,657,950 $ Total primary government expenses 9,295,013 $ 9,267,554 $ 10,505,876 $ 11,273,744 $ 10,149,866 $ 11,925,721 $ 12,912,048 $ 13,549,156 $ 14,115,397 $ 15,951,669 $ Program revenues:

Governmental Activities
Charges for services
General government 150,419 $ 172,858 $ 457,148 $ 112,018 $ 165,292 $ 165,598 $ 554,930 $ 930,779 $ 995,882 $ 1,360,912 $ Public safety 92,409 65,070 92,496 121,292 120,841 95,170 437,647 328,557 309,572 248,916 Community development 362,140 333,856 198,539 783,105 770,643 734,913 271,021 304,005 908,994 447,194Public works 65,026 254,078 567,312 94,862 394,040 679,712 114,508 117,783 109,433 56,890 Operating grants and contributions 460,346 390,886 342,433 431,468 679,146 428,962 301,544 850,304 743,354 2,274,436 Capital grants and contributions 29,543 1,587,557 136,500 4,113,824 697,062 2,122,200 - - - - Total governmental activities program revenues 1,159,883 $ 2,804,305 $ 1,794,428 $ 5,656,569 $ 2,827,024 $ 4,226,555 $ 1,679,650 $ 2,531,428 $ 3,067,235 $ 4,388,348 $ Business-type activities
Charges for services
Water 1,317,859 $ 1,365,452 $ 1,301,372 $ 1,371,858 $ 1,559,828 $ 1,694,915 $ 1,733,794 $ 2,137,569 $ 2,214,793 $ 2,334,947 $ Wastewater 2,071,736 2,194,823 2,101,749 2,360,902 2,048,481 2,214,960 2,381,342 3,205,145 2,822,407 3,083,753 Operating grants and contributions - - - - 30,000 - - - - - Capital grants and contributions 29,058 251,155 90,457 112,915 701,166 610,674 - - - - Total business-type activities program revenues 3,418,653 $ 3,811,430 $ 3,493,578 $ 3,845,675 $ 4,339,475 $ 4,520,549 $ 4,115,136 $ 5,342,714 $ 5,037,200 $ 5,418,700 $ Total primary government revenues 4,578,536 $ 6,615,735 $ 5,288,006 $ 9,502,244 $ 7,166,499 $ 8,747,104 $ 5,794,786 $ 7,874,142 $ 8,104,435 $ 9,807,048 $ Net revenues (expenses)
Governmental Activities (4,731,298) $ (2,856,776) $ (5,268,901) $ (1,969,747) $ (3,277,194) $ (3,158,498) $ (6,760,376) $ (5,999,387) $ (5,283,296) $ (5,905,371) $ Business-type activities 14,821 204,957 51,031 198,247 293,827 (20,119) (356,886) 324,373 (727,666) (239,250) Total net revenues (expenses) (4,716,477) $ (2,651,819) $ (5,217,870) $ (1,771,500) $ (2,983,367) $ (3,178,617) $ (7,117,262) $ (5,675,014) $ (6,010,962) $ (6,144,621) $

CITY OF COTATI
TABLE 2

CHANGES IN NET POSITION
Last Ten Fiscal Years
(accrual basis of accounting)
132

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CITY OF COTATI
TABLE 2

CHANGES IN NET POSITION
Last Ten Fiscal Years
(accrual basis of accounting)
General revenues and other changes in net position
Governmental Activities Restated Restated Restated
Taxes:

Property taxes 1,000,165 $ 1,673,084 $ 1,266,681 $ 1,652,877 $ 1,472,627 $ 1,544,849 $ 1,734,281 $ 1,813,280 $ 1,774,242 $ 1,902,006 $ Sales taxes 2,519,645 2,902,504 3,616,732 4,075,204 4,222,473 4,145,877 5,109,211 5,091,824 6,004,019 6,418,733 Cannabis business tax - - - - - - - - - 644,490
Franchise taxes - - - - - - - - - 623,854
Other taxes 479,163 598,985 567,114 603,792 678,955 829,535 907,508 1,054,055 1,192,032 76,429 Interest and rents 98,180 104,179 92,831 44,094 76,785 137,294 339,211 286,349 228,707 14,322 Other general revenues 225,000 179,822 31,169 - - - - - - - Special item - (420,000) - - - - - - - -
Extraordinary item 575,699 - - - - - - - - -
Transfers 58,540 60,500 90,500 - 62,964 161,053 - - - - Total governmental activities 4,956,392 $ 5,099,074 $ 5,665,027 $ 6,375,967 $ 6,513,804 $ 6,818,608 $ 8,090,211 $ 8,245,508 $ 9,199,000 $ 9,679,834 $ Business-type activities
Other revenues - $ -$ -$ -$ -$ - $ 156,766 $ 145,819 $ 52,866 $ 1,210 $ Transfers (58,540) (60,500) (90,500) - (62,964) (161,053) - - - - Total business-type activities (58,540) $ (60,500) $ (90,500) $ - $ (62,964) $ (161,053) $ 156,766 $ 145,819 $ 52,866 $ 1,210 $ Total primary government 4,897,852 $ 5,038,574 $ 5,574,527 $ 6,375,967 $ 6,450,840 $ 6,657,555 $ 8,246,977 $ 8,391,327 $ 9,251,866 $ 9,681,044 $ Changes in net position
Governmental Activities 225,094 $ 2,242,298 $ 396,126 $ 4,406,220 $ 3,236,610 $ 3,660,110 $ 1,329,835 $ 2,246,121 $ 3,915,704 $ 3,774,463 $ Business-type activities (43,719) 144,457 (39,469) 198,247 230,863 (181,172) (200,120) 470,192 (674,800) (238,040) Total primary government 181,375 $ 2,386,755 $ 356,657 $ 4,604,467 $ 3,467,473 $ 3,478,938 $ 1,129,715 $ 2,716,313 $ 3,240,904 $ 3,536,423 $ Source of information: Audited financial statements
133

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General fund:

Reserved -$ -$ -$ -$ -$ -$ -$ -$ -$ -$
Unreserved - - - - - - - - - - Nonspendable 5,004 55,152 60,517 42,311 26,778 51,017 51,112 82,937 95,835 485,752 Committed for special projects 45,000 45,000 45,000 45,000 45,000 - - - - - Committed for emergencies 120,000 120,000 120,000 120,000 120,000 1,400,254 1,700,118 1,910,969 1,910,969 2,131,107 Assigned for encumbrances - - - - - - - - - 142,939
Unassigned 2,008,296 2,951,695 2,738,671 3,753,034 4,362,879 4,286,690 5,498,960 5,297,547 7,210,913 6,235,593 Total general fund 2,178,300 $ 3,171,847 $ 2,964,188 $ 3,960,345 $ 4,554,657 $ 5,737,961 $ 7,250,190 $ 7,291,453 $ 9,217,717 $ 8,995,391 $ All other governmental funds:

Reserved - - - - - - - - - -
Unreserved - - - - - - - - - -
Nonspendable
Restricted for affordable housing 3,434,024 3,446,494 3,252,244 3,101,038 $ 3,136,427 3,272,449 3,314,901 $ 3,397,943 $ 3,489,015 $ 3,209,763 $ Restricted for community development - - - - - - - - - - Restricted for public safety 141,664 88,827 44,420 141,656 149,404 113,934 23,243 35,328 15,307 64,769Restricted for streets 361,514 481,733 350,947 332,857 490,272 1,055,063 777,091 690,712 607,918 761,117 Restricted for parks 2,948 472 2,108 2,317 314,861 281,825 188,139 31,114 123,264 345,470Restricted for public education - 65,535 2,332 7,214 15,665 23,325 10,290 14,678 20,053 27,197 Restricted for debt service 679,140 764,912 850,397 919,278 930,095 943,984 - - - - Restricted for recycling 97,676 115,283 115,283 5,310 - - - - - - Restricted for special projects 610,557 633,476 637,761 1,141,087 701,184 689,995 550,549 - - - Restricted for capital projects 444,963 534,791 1,044,483 754,678 293,080 - - 308,410 272,082 1,878,764 Committed for capital projects - - - - - 568,484 269,262 298,205 274,728 85,661 Assigned - - - - - - - 24,718 55,435 -
Unassigned - - - - - - - (479,495) (94,058) (6,241)
Total other governmental funds net position 5,772,486 $ 6,131,523 $ 6,299,975 $ 6,405,435 $ 6,030,988 $ 6,949,059 $ 5,133,475 $ 4,321,613 $ 4,763,744 $ 6,366,500 $ Total Governmental Funds 7,950,786 $ 9,303,370 $ 9,264,163 $ 10,365,780 $ 10,585,645 $ 12,687,020 $ 12,383,665 $ 11,613,066 $ 13,981,461 $ 15,361,891 $ Note: The city of Cotati implemented GASB Statement Number 54 in fiscal year 2011. Implementation is done prospectively as the City did not have the information to restate prior year fund balance classifications.Source of information: Audited financial statements

CITY OF COTATI
TABLE 3

FUND BALANCE OF GOVERNMENTAL FUNDS
Last Ten Fiscal Years
(modified accrual basis of accounting)
134

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Revenues:

Property taxes 1,000,165 $ 1,673,084 $ 1,266,681 $ 1,652,877 $ 1,472,627 $ 1,544,847 $ 1,734,281 $ 1,813,280 $ 1,774,242 $ 1,902,006 $ Sales taxes 2,518,779 2,904,515 3,667,261 4,128,500 4,332,626 4,261,452 5,172,427 5,154,685 6,004,019 6,418,733 Other taxes 675,301 105,204 110,345 46,314 44,041 173,119 401,685 509,572 646,454 720,920 Licenses and permits 33,652 440,722 402,151 502,033 521,507 544,780 515,547 546,010 624,513 689,807 Fines and forfeits 182,120 42,429 109,435 235,551 4,839 - - - - - Intergovernmental 373,315 2,012,895 575,014 1,350,366 998,301 424,872 643,120 779,480 1,612,970 2,432,231 Charges for services 641,757 885,542 908,956 1,201,768 1,450,185 1,515,847 699,800 717,283 1,551,512 1,467,493 Interest and rents 116,403 122,575 106,107 85,921 112,270 206,880 332,626 297,910 223,267 19,684 Miscellaneous 55,546 203,606 341,905 107,382 150,298 222,104 270,375 431,445 296,622 399,661 Total revenues 5,597,038 $ 8,390,572 $ 7,487,855 $ 9,310,712 $ 9,086,694 $ 8,893,901 $ 9,769,861 $ 10,249,665 $ 12,733,599 $ 14,050,535 $ Expenditures:

Current:

General government 1,137,970 1,110,637 1,442,092 1,635,238 1,276,704 879,854 1,126,300 1,189,649 1,385,817 2,012,707 Public safety 2,700,532 2,551,265 2,831,831 2,915,581 2,991,798 3,349,442 3,715,188 3,607,872 3,965,857 7,581,747 Community development 363,709 335,514 610,472 476,483 427,963 439,133 581,558 644,933 719,621 1,340,858 Public works 535,072 568,563 855,454 1,088,141 1,137,856 1,074,822 1,458,531 1,390,244 1,430,423 2,254,601 Capital Outlay 370,289 2,159,960 1,429,863 2,320,464 2,650,334 795,748 2,020,839 4,178,919 2,853,309 5,472,060 Debt Service:

Principal retirement 151,333 158,506 130,000 135,000 145,000 158,022 6,331 6,736 7,167 7,625 Interest and fiscal charges 341,506 331,655 317,850 309,238 300,138 291,432 1,801 1,911 965 190,521 Total Expenditures 5,600,411 $ 7,216,100 $ 7,617,562 $ 8,880,145 $ 8,929,793 $ 6,988,453 $ 8,910,548 $ 11,020,264 $ 10,363,159 $ 18,860,119 $ (3,373) 1,174,472 (129,707) 430,567 156,901 1,905,448 859,313 (770,599) 2,370,440 (4,809,584) Other financing sources (uses):

Contributions from successor agency -$ -$ -$ 701,184 $ -$ -$ -$ -$ -$ -$ Proceeds of capital leasing - - - - - - - - - - Right of use lease financing - - - - - 34,874 - - - -
Proceeds from long term debt - - - - - - - - - 6,190,014Transfers in 714,842 975,604 1,264,468 1,612,149 2,383,566 910,786 2,237,319 3,537,819 2,317,805 13,380,782 Transfers out (656,302) (915,104) (1,173,968) (1,612,149) (2,320,602) (749,733) (2,452,003) (3,537,819) (2,317,805) (13,380,782) Total business-type activities net position 58,540 60,500 90,500 701,184 62,964 195,927 (214,684) - - 6,190,014Net change in fund balances 55,167 $ 1,234,972 $ (39,207) $ 1,131,751 $ 219,865 $ 2,101,375 $ 644,629 $ (770,599) $ 2,370,440 $ 1,380,430 $

9.4% 9.7% 7.2% 6.8% 7.1% 7.3% 0.1% 0.1% 0.1% 1.5% Debt service as a percentage of noncapital expenditures

CITY OF COTATI
TABLE 4

REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE AND DEBT SERVICE RATIO OF GOVERNMENTAL FUNDS Last Ten Fiscal Years
(modified accrual basis of accounting)
Excess (deficiency) of revenues over (under) expenditures 135

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8.A.a
Packet Pg. 190 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial

THE CITY OF COTAT

DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
FOR FISCAL YEAR 2021-22

CITY OF COTATI
2021/22 Assessed Valuation: $1,280,873,015
Total Debt Percent City’s Share
OVERLAPPING TAX AND ASSESSMENT DEBT: 6/30/22 Applicable (1) of Debt 6/30/22
Sonoma County Joint Community College District $ 324,890,000 1.243% $ 4,038,383 Cotati-Rohnert Park Unified School District 165,462,095 16.178 26,768,458 City of Cotati 1915 Act Bonds 3,528,285 100.000 3,528,285

TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT $34,335,126
DIRECT AND OVERLAPPING GENERAL FUND DEBT:

Sonoma County General Fund Obligations $ 9,189,000 1.252% $ 115,046 Sonoma County Pension Obligation Bonds 247,880,000 1.252 3,103,458 Sonoma County Office of Education General
Fund Obligations 3,228,084 1.252 44,416
Cotati-Rohnert Park Unified School District
General Fund Obligations 1,400,560 16.178 226,583
City of Cotati General Fund Obligations 11,843,580 100.000 11,843,580

TOTAL DIRECT AND OVERLAPPING GENERAL FUND DEBT $4,017,387 OVERLAPPING TAX INCREMENT DEBT (Successor Agency):$7,754,781 99.801% $7,739,349 TOTAL DIRECT DEBT $ 11,843,580
TOTAL OVERLAPPING DEBT $ 45,559,978
COMBINED TOTAL DEBT $57,403,558 (2)
NOTES:
(1) The percentage of overlapping debt applicable to the district is estimated using taxable assessed property value.

Applicable percentages were estimated by determining the portion of the overlapping district's assessed value that is within the boundaries of the city divided by the overlapping district's total taxable assessed value. (2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue bonds and non-bonded capital lease obligations..

Ratios to 2021/22 Assessed Valuation:

Total Overlapping Tax and Assessment Debt ....... 2.68% Total Direct Debt .................................................. 0.92% Combined Total Debt ............................................. 4.48% Ratios to Redevelopment Successor Agency Incremental Valuation ($597,528,042):

Total Overlapping Tax Increment Debt ................. 1.30% AB:($500)
148

8.A.a
Packet Pg. 191 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 Total Assessed Value 795,352,809 $ 825,300,368 $ 889,389,372 $ 935,315,057 $ 994,845,787 $ 1,059,631,651 $ 1,138,272,113 $ 1,198,404,748 $ 1,243,952,169 $ 1,280,873,015 $ Debt Limit (15% of Assessed Value) 119,302,921 123,795,055 133,408,406 140,297,259 149,226,868 158,944,748 170,740,817 179,760,712 186,592,825 192,130,952 Debt applicable to Limit:

General Obligation Bonds - - - - - - - - - -
Legal Debt Margin: 119,302,921 $ 123,795,055 $ 133,408,406 $ 140,297,259 $ 149,226,868 $ 158,944,748 $ 170,740,817 $ 179,760,712 $ 186,592,825 $ 192,130,952 $ Total net debt applicable to the limit as a
percentage of debt limit. 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Source of information: Sonoma County Auditor-Controller-Treasurer-Tax Collector

CITY OF COTATI

LEGAL DEBT MARGIN INFORMATION
Last Ten Fiscal Years
149

8.A.a
Packet Pg. 192 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial














 













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8.A.a
Packet Pg. 193 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 Elected Officials 5.00 5.00 5.00 5.00 5.00 5.00 5.00 2.50 2.50 2.50 Staff Positions
City Manager 3.50 3.50 3.50 3.50 3.50 3.50 3.50 4.50 4.50 3.00 Recreation - - 1.00 1.50 2.50 2.30 3.20 2.70 2.80 2.80
Administrative Services 4.00 4.00 4.50 4.50 4.50 4.50 3.00 4.50 4.00 4.00 Planning & Building 3.00 3.00 4.00 4.00 4.00 3.00 3.00 3.00 3.70 3.50 Public Works 8.00 8.00 8.00 8.00 8.00 8.00 8.00 9.50 7.60 7.00 Police Services 25.00 25.00 25.50 20.50 19.50 19.50 20.50 20.50 18.60 16.40 Total 43.50 43.50 46.50 42.00 42.00 40.80 41.20 44.70 41.20 36.70

CITY OF COTATI
TABLE 13

FULL-TIME AND PART-TIME CITY EMPLOYEES BY FUNCTION
by Function
Last Ten Fiscal Years
151

8.A.a
Packet Pg. 194 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial

THE CITY OF COTATI

OPERATING INDICATORS BY FUNCTION
Last Ten Fiscal Years
Percentage of Water
Total Operating Sales to Operating
Fiscal Year Water Sales Revenue Revenues

2011/12 1,187,091 1,274,729 93.1%
2012/13 1,240,584 1,312,403 94.5%
2013/14 1,277,987 1,361,650 93.9%
2014/15 1,195,750 1,296,539 92.2%
2015/16 1,260,006 1,363,734 92.4%
2016/17 1,358,350 1,548,697 87.7%
2017/18 1,658,332 1,675,135 99.0%
2018/19 1,731,383 1,733,795 99.9%
2019/20 1,866,191 1,929,407 96.7%
2020/21 2,046,966 2,214,793 95.8%
2021/22 1,919,788 2,334,947 82.2%
152

8.A.a
Packet Pg. 195 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial

THE CITYOF COTATI

CAPITAL ASSETS STATISTICS BY FUNCTION
Last Ten Fiscal Years
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Police:

Stations 1 1 1 1 1 1 1 1 1 1
Police Vehicles 5 5 5 5 6 6 6 6 6 6Public Works:

Street Miles 22 22 22 22 22 22 22 22 23 23Streetlights & vintage street lights 277 277 277 277 312 312 312 312 331 331Traffic Signals 7 7 7 7 8 8 8 8 8 8 Parks:

Parks 4 4 4 4 4 4 4 4 4 4Community Center 1 1 1 1 1 1 1 1 1 1Community Garden 1 1 1 1 1 1 1 1 1 1Park Acreage 30.4 30.4 30.4 30.4 30.4 30.4 30.4 30.4 30.4 30.4Tennis Court 1 1 1 1 1 1 1 1 1 1Museum 1 1 1 1 1 1 1 1 1 1 Water:

Water main (miles) 30 30 30 30 30 30 30 30 30 30Fire hydrants 431 431 431 432 432 432 432 432 438 438 153

8.A.a
Packet Pg. 196 Attachment: Fiscal Year 2021/22 - Annual Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial cotaticity.org
City of Cotati
201 W. Sierra Ave.

Cotati, CA 97931
154

8.A.a
Comprehensive Financial Statements (Fiscal Year 2021/22 Audited Annual Comprehensive Financial City of
Cotati
Cotati, California
Auditors’ Communication With Those
Charged With Governance
For the year ended June 30, 2022

8.A.b
Packet Pg. 198 Attachment: Letter to Those Charged with Governance (Fiscal Year 2021/22 Audited Annual Comprehensive Financial Report (ACFR))

8.A.b
Packet Pg. 199 Attachment: Letter to Those Charged with Governance (Fiscal Year 2021/22 Audited Annual Comprehensive Financial Report (ACFR)) To the Honorable Mayor and Members of the City Council
of the City of Cotati
Cotati, California
We have audited the financial statements of the City of Cotati (City) as of and for the years ended June 30, 2022, and have issued our report thereon dated December 20, 2022. Professional standards require that we advise you of the following matters relating to our audit.

Our Responsibility in Relation to the Financial Statement Audit As communicated in our engagement letter dated July 11, 2022, our responsibility, as described by professional standards, is to form and express an opinion(s) about whether the financial statements that have been prepared by management with your oversight are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America. Our audit of the financial statements does not relieve you or management of your respective responsibilities.

Our responsibility, as prescribed by professional standards, is to plan and perform our audit to obtain reasonable, rather than absolute, assurance about whether the financial statements are free of material misstatement. An audit of financial statements includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting. Accordingly, as part of our audit, we considered the internal control of the City solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control.

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

However, we are not required to design procedures for the purpose of identifying other matters to communicate to you.

Planned Scope and Timing of the Audit
We conducted our audit consistent with the planned scope and timing we previously communicated to you.

Compliance with All Ethics Requirements Regarding Independence The engagement team, others in our firm, as appropriate, our firm, and our network firms have complied with all relevant ethical requirements regarding independence.

8.A.b
Packet Pg. 200 Attachment: Letter to Those Charged with Governance (Fiscal Year 2021/22 Audited Annual Comprehensive Financial Report (ACFR)) To the Honorable Mayor and Members of the City Council
of the City of Cotati
Cotati, California
Significant Risks Identified
We have identified the following significant risks:
 Risk of management override of internal controls – A risk of management override of internal controls exists at any entity where management can change or decide not to perform that entity’s internal controls.
 Revenue recognition risk – Errors in revenue recognition can affect bond covenant ratios and the net position of the City.

Qualitative Aspects of the Entity’s Significant Accounting Practices Significant Accounting Policies
Management has the responsibility to select and use appropriate accounting policies. A summary of the significant accounting policies adopted by the City is included in Note 1 to the financial statements.

There have been no initial selection of accounting policies and no changes in significant accounting policies or their application during the fiscal year ended June 30, 2022. No matters have come to our attention that would require us, under professional standards, to inform you about (1) the methods used to account for significant unusual transactions and (2) the effect of significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus.

Significant Accounting Estimates
Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s current judgments. Those judgments are normally based on knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ markedly from management’s current judgments.

The most sensitive accounting estimates affecting the financial statements are capital asset depreciation and useful life, investment valuations, allowance for uncollectible accounts, claim liabilities, the other post-employment benefits (OPEB) plan and the pension plan assumptions.

Management’s estimate of capital asset depreciation and useful life, investment valuations, allowance for uncollectible accounts, claim liabilities, the OPEB plan and the pension plan assumptions are based on historical useful lives of such assets, and actuarial assumptions, respectively. We evaluated the key factors and assumptions used to develop the estimate of capital assets depreciation and useful life, and the pension plan assumptions and determined that they are reasonable in relation to the basic financial statements taken as a whole and in relation to the applicable opinion units.

Financial Statement Disclosures
Certain financial statement disclosures involve significant judgment and are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting the City’s financial statements relate to:
 Summary of Significant Accounting Policies
 Cash and Investments
 Capital Assets
 Employee Retirement Plans
2 8.A.b
Packet Pg. 201 Attachment: Letter to Those Charged with Governance (Fiscal Year 2021/22 Audited Annual Comprehensive Financial Report (ACFR)) To the Honorable Mayor and Members of the City Council
of the City of Cotati
Cotati, California
 Other Postemployment Benefits (OPEB) Plan
 Commitments and Contingencies
 Successor Agency
 Prior Period Adjustment
Significant Difficulties Encountered during the Audit
We encountered no significant difficulties in dealing with management relating to the performance of the audit.

Uncorrected and Corrected Misstatements
For purposes of this communication, professional standards also require us to accumulate all known and likely misstatements identified during the audit, other than those that we believe are trivial, and communicate them to the appropriate level of management. Further, professional standards require us to also communicate the effect of uncorrected misstatements related to prior periods on the relevant classes of transactions, account balances or disclosures, and the financial statements as a whole and each applicable opinion unit. Uncorrected misstatements or matters underlying those uncorrected misstatements could potentially cause future-period financial statements to be materially misstated, even though the uncorrected misstatements are immaterial to the financial statements currently under audit.

In addition, professional standards require us to communicate to you all material, corrected misstatements that were brought to the attention of management as a result of our audit procedures.

The following material misstatements that we identified as a result of our audit procedures were brought to the attention of, and corrected by, management:
 To correct recording of new debt relating to pension and street project  To correct deferred loss on refunding
Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter, which could be significant to the City’s financial statements or the auditor’s report. No such disagreements arose during the course of the audit.

Representations Requested from Management
We have requested certain written representations from management, which are included in the attached letter dated December 20, 2022.

Management’s Consultations with Other Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting matters. Management informed us that, and to our knowledge, there were no consultations with other accountants regarding auditing and accounting matters. 3 8.A.b
Packet Pg. 202 Attachment: Letter to Those Charged with Governance (Fiscal Year 2021/22 Audited Annual Comprehensive Financial Report (ACFR)) To the Honorable Mayor and Members of the City Council
of the City of Cotati
Cotati, California
Other Significant Matters, Findings, or Issues
In the normal course of our professional association with the City, we generally discuss a variety of matters, including the application of accounting principles and auditing standards, significant events or transactions that occurred during the year, operating and regulatory conditions affecting the entity, and operational plans and strategies that may affect the risks of material misstatement. None of the matters discussed resulted in a condition to our retention as the City’s auditors.

Required Supplementary Information
We applied certain limited procedures to the 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.

Supplementary Information
We were engaged to report on the combining and individual fund financial statements and 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.

Other Information Included in Annual Comprehensive Financial Report Pursuant to professional standards, our responsibility as auditors for the introductory and statistical sections, whether financial or nonfinancial, included in the City’s annual comprehensive financial report, does not extend beyond the information identified in the audit report, and we are not required to perform any procedures to corroborate such other information. However, in accordance with such standards, we have read the information and considered whether such information, or the manner of its presentation, was materially inconsistent with its presentation in the financial statements.

Our responsibility also includes communicating to you any information which we believe is a material misstatement of fact. Nothing came to our attention that caused us to believe that such information, or its manner of presentation, is materially inconsistent with the information, or manner of its presentation, appearing in the financial statements.
4 8.A.b
Packet Pg. 203 Attachment: Letter to Those Charged with Governance (Fiscal Year 2021/22 Audited Annual Comprehensive Financial Report (ACFR)) To the Honorable Mayor and Members of the City Council
of the City of Cotati
Cotati, California
This report is intended solely for the information and use of the City Council and management of the City and is not intended to be and should not be used by anyone other than these specified parties.

Badawi & Associates, CPAs
Berkeley, California
December 20, 2022
5 8.A.b
Packet Pg. 204 Attachment: Letter to Those Charged with Governance (Fiscal Year 2021/22 Audited Annual Comprehensive Financial Report (ACFR)) City of Cotati
Sonoma County, California
201 West Sierra Avenue, Cotati, CA 94931-4217  TELEPHONE 7077924600  FAX 7957067 December 20, 2022
Badawi and Associates, CPAs
2855 Telegraph Ave, Suite 312
Berkeley, CA 94705
This representation letter is provided in connection with your audit of the financial statements of the City of Cotati, California (City) as of June 30, 2022, and for the year then ended, and the related notes to the financial statements, for the purpose of expressing opinions on whether the basic financial statements present fairly, in all material respects, the financial position, results of operations, and cash flows, where applicable, of the various opinion units of the City in accordance with accounting principles generally accepted for governments in the United States of America (U.S. GAAP).

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 the light of surrounding circumstances, there is a substantial likelihood that, individually or in the aggregate, they would influence the judgement made by a reasonable user based on the financial statements.

We confirm that, to the best of our knowledge and belief, having made such inquiries as we considered necessary for the purpose of appropriately informing ourselves as of December 8, 2022:

Financial Statements

1. We have fulfilled our responsibilities, as set out in the terms of the audit engagement letter dated July 11, 2022, for the preparation and fair presentation of the financial statements of the various opinion units referred to above in accordance with U.S. GAAP.

2. We acknowledge our responsibility 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.

3. We acknowledge our responsibility for the design, implementation, and maintenance of internal control to prevent and detect fraud.

4. We acknowledge our responsibility for compliance with the laws, regulations, and provisions of contracts and grant agreements.

5. We have reviewed, approved, and taken responsibility for the financial statements and related notes.

6. We have a process to track the status of audit findings and recommendations.

8.A.b
Packet Pg. 205 Attachment: Letter to Those Charged with Governance (Fiscal Year 2021/22 Audited Annual Comprehensive Financial Report (ACFR))