Covina City Council
February 6, 2024

CITY COUNCIL/SUCCESSOR AGENCY TO THE COVINA

REDEVELOPMENT AGENCY/COVINA PUBLIC FINANCING

AUTHORITY/COVINA HOUSING AUTHORITY JOINT MEETING
AGENDA

Tuesday, February 6, 2024, 6:30 p.m.
125 E. College Street, Covina, California
Council Chamber of City Hall

IMPORTANT NOTICE
Members of the public may view the meeting live on the City’s website at www.covinaca.gov or on local cable television, Spectrum channel 29 and Frontier Channel 42. To view from the website, hover over the Departments & Services tab until the drop-down menu appears and click on City Council Video Library under the City Council header. A live banner will appear at the start of the meeting.

Public Comments: During the meeting, there will be an opportunity for the public to speak. Public testimony is limited to five (5) minutes per speaker, unless, for good cause, the Mayor/Chairperson amends the time limit; a speaker’s time may not be transferred to another speaker. State Law prohibits the Council/Agency/Authority Members from taking action on any item not on the agenda. Those wishing to speak on a LISTED AGENDA ITEM will be heard when that item is addressed.

To address the Council/Agency/Authority please complete a yellow speaker request card located at the entrance of the Council Chamber and give it to the City Clerk. Your name will be called when it is your turn to speak.

Meeting Assistance Information: In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact the City Clerk’s Office at [email protected] or 626-384-5430. Notification 48 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting.

Pages

CLOSED SESSION

CALL TO ORDER
Council/Agency/Authority Members: Patricia Cortez, Hector Delgado, Victor Linares, Mayor Pro Tem/Vice Chair John King, and Mayor/Chair Walter Allen, III

PUBLIC COMMENTS
The public is invited to comment on Closed Session items only at this time. To address the Council/Agency/Authority please complete a yellow speaker request card located at the entrance and give it to the City Clerk. Your name will be called when it is your turn to speak. Individual speakers are limited to five minutes each, unless, for good cause, the Mayor/Chairperson amends the time limit.

CLOSED SESSION
The City Council/Successor Agency to the Covina Redevelopment Agency/Covina Public Financing Authority/Covina Housing Authority will adjourn to closed session for the following:

A. Government Code § 54957.6 – CONFERENCE WITH LABOR

NEGOTIATORS
Agency Designated Representative:

Christopher Marcarello, City Manager, Anita Agramonte, Administrative Services Director and Suzanne Stone, Deputy Director of Administrative Services-HR
Update on ongoing negotiations with the various Employee Organizations:

American Federation of State, County and Municipal Employees (AFSCME); Police Association of Covina (PAC); Police Management Group (PMG); and Police Supervisors of Covina (PSC), and discussions with Unrepresented Employees: Mid-Management, Supervisory and Professional, and Confidential and Technical Employees
B. Government Code § 54956.9(d)(4) – CONFERENCE WITH LEGAL COUNSEL—ANTICIPATED LITIGATION
Initiation of litigation pursuant to Government Code section 54956.9(d)(4): One Matter
RECESS
JOINT MEETING—OPEN SESSION 7:30 PM

RECONVENE AND CALL TO ORDER

ROLL CALL

PLEDGE OF ALLEGIANCE
Led by Mayor Pro Tem King.

INVOCATION
Given by Covina Police Chaplain Chuck Cannizzaro.

CLOSED SESSION REPORT

PRESENTATIONS - NONE

PUBLIC COMMENTS
To address the Council/Agency/Authority please complete a yellow speaker request card located at the entrance and give it to the City Clerk. Your name will be called when it is your turn to speak. Those wishing to speak on a LISTED AGENDA ITEM will be heard when that item is addressed. Those wishing to speak on an item NOT ON THE AGENDA will be heard at this time. State Law prohibits the Council/Agency/Authority Members from taking action on any item not on the agenda. Individual speakers are limited to five minutes each, unless, for good cause, the Mayor/Chairperson amends the time limit.

COUNCIL/AGENCY/AUTHORITY COMMENTS
Council/Agency/Authority Members wishing to make any announcements of public interest or to request that specific items be added to future Council/Agency/Authority

agendas may do so at this time.

CITY MANAGER COMMENTS

CONSENT CALENDAR
All matters listed under consent calendar are considered routine, and will be enacted by one motion. There will be no separate discussion on these items prior to the time the Council/Agency/Authority votes on them, unless a member of the Council/Agency/Authority requests a specific item be removed from the consent calendar for discussion.

CC 1. Minutes 7
Staff Recommendation:

Approve the Minutes of the December 19, 2023, Regular Meeting of the City Council/Successor Agency to the Covina Redevelopment Agency/Covina Public Financing Authority/Housing Authority.

CC 2. Minutes 15
Staff Recommendation:

Approve the Minutes of the January 16, 2024, Regular Meeting of the City Council/Successor Agency to the Covina Redevelopment Agency/Covina Public Financing Authority/Housing Authority.

CC 3. Payment of Demands 21
Staff Recommendation:

Approve Payment of Demands in the amount of $4,132,091.10.

CC 4. Annual Comprehensive Financial Report (ACFR) for Fiscal Year Ended June 30, 2023
29 Staff Recommendation:

Receive and file the following reports for Fiscal Year ended June 30, 2023: (1) Annual Comprehensive Financial Report (ACFR) and related Auditor Communications, (2) Independent Accountants’ Report on Agreed-Upon Procedures Applied to Appropriations Limit, and (3) the Single Audit of Federally Assisted Grant Programs.

CC 5. Resolution CC 2024-04 – A Resolution of the City Council of the City of Covina, California, Setting Fees Relating to Sidewalk Vendors, Food Trucks, and Sidewalk Vending Permits
255
Staff Recommendation:

Adopt Resolution CC 2024-04.

CC 6. Request to approve revisions to the Covina Residential Rehabilitation Grant/Loan Program Handbook for participants of the Community Development Block Grant (CDBG) Residential Rehabilitation Program
259
Staff Recommendation:

Approve revisions to the Covina Residential Rehabilitation Grant/Loan Program Handbook for participants of the Community Development Block Grant (CDBG) Residential Rehabilitation Program.

CC 7. Resolution CC 2024-03 Accepting the Public Improvements Associated with Parcel Map No. 82493 Located at 667 E. Puente Street 351
Staff Recommendation:

Adopt Resolution CC 2024-03 accepting the public improvements associated

with Parcel Map No. 82493 located at 667 E. Puente Street.

CC 8. Traffic Signal Improvements Project – Barranca Avenue and Covina Boulevard (Project No. P2308) – Final Acceptance and Filing Notice of Completion
355
Staff Recommendation:

Accept the work performed by PTM General Engineering Services, Inc.; and

1. Authorize the City Clerk to file a Notice of Completion for the Traffic Signal Improvements Project at Barranca Avenue and Covina Boulevard (Project No. P2308).

2. CC 9. Amendment to the Inspection and Confidentiality Agreement between Frontier California Inc. and the City of Covina Relating to the Properties Located at 175 E. Center Street and 176 E. Badillo Street 359
Staff Recommendation:

Authorize the City Manager to execute an Amendment to the Inspection and Confidentiality Agreement.

CC 10. Purchase of Mobile Data Computers 375
Staff Recommendation:

Approve Purchase of ten (10) Mobile Data Computers (MDCs) from DuraTech USA, Inc. in the amount of $55,303.19.

CC 11. Resolution CC 2024-06 Authorizing Acceptance of Grant Funds, and Award of Professional Services Contracts for Facilitation of the Royal Oak Middle School Greening and Forestry Planning Grant Project 379
Staff Recommendation:

Adopt Resolution CC 2024-06 and approve Professional Services Agreements with Active SGV, Five Point Design, and CEJ Engineers for the facilitation of the project.

CC 12. Resolution Accepting $100,000 in State Funding to Purchase Portable Radios
471
Staff Recommendation:

Adopt Resolution CC 2024-05 accepting $100,000 in State Assembly Funding and increase the Police Department’s 2023-24 budget appropriation by same amount; and

1. Approve the purchase of Motorola radio equipment in the amount of $105,707.

2. CC 13. One Year Extension of the Agreement with Professional Account Management LLC
477
Staff Recommendation:

Approve the Third Amendment to the agreement with Professional Account Management LLC for a one (1) year extension to provide parking citation processing and collections services; and authorize the City Manager to execute the amendment.

CC 14. Agreement between the City of Covina and Converse Consultants for Environmental Testing at 176 E. Badillo Street
481
Staff Recommendation:

Authorize the City Manager to enter into a Professional Services Agreement with Converse Consultants and execute all related documents.

PUBLIC HEARINGS - NONE

CONTINUED BUSINESS - NONE

NEW BUSINESS
NB 1. Consideration to Amend Covina Municipal Code Section 2.04 Related to City Council Compensation and Adopt Resolution CC 2024-07 Related to Elected Officials Compensation Pursuant to Senate Bill 329 511
Staff Recommendation:

Waive full reading and introduce Ordinance 24-01, entitled An Ordinance of the City Council of the City of Covina, California, Amending Chapter 2.04 of the Covina Municipal Code to Add a New Section Pertaining to Compensation of the Mayor and City Councilmembers pursuant to Senate Bill 329 and Adopt Resolution CC 2024-07, Related to Elected Officials Compensation.

ADJOURNMENT
The Covina City Council/Successor Agency to the Covina Redevelopment Agency/Covina Public Financing Authority/Covina Housing Authority will adjourn to its next regular meeting of the Council/Agency/Authority scheduled for February 20, 2024, at 6:30 p.m., for closed session and at 7:30 p.m. for open session inside the Council Chamber at City Hall, located at 125 East College Street, Covina, California, 91723.

1 CITY COUNCIL/SUCCESSOR AGENCY TO THE COVINA REDEVELOPMENT

AGENCY/COVINA PUBLIC FINANCING AUTHORITY/COVINA HOUSING

AUTHORITY JOINT MEETING

MINUTES
December 19, 2023, 6:30 p.m.
125 E. College Street, Covina, California
Council Chamber of City Hall
Councilmembers Present: Councilmember Patricia Cortez
Councilmember Hector Delgado
Councilmember Victor Linares
Mayor Pro Tem/Vice-Chair John C. King
Mayor/Chair Walter Allen, III
Staff Present: City Clerk Drew Aleman (Elected Member)
City Manager Chris Marcarello
City Attorney Candice K. Lee
Police Chief David Povero
Administrative Services Director Anita Agramonte
Community Development Director Brian Lee
Parks & Recreation/Library Services Director Lisa Evans Public Works Director Andy Bullington
Deputy City Manager Angel Carrillo
Chief Deputy City Clerk Fabian Velez
Staff Absent: City Treasurer Neil Polzin (Elected Member) _____________________________________________________________________

2 CLOSED SESSION

1. CALL TO ORDER
Mayor Allen called the Council/Agency/Authority meeting to order at 6:45 p.m. with all Councilmembers present.

2. PUBLIC COMMENTS
There were no public comments.

3. CLOSED SESSION
Mayor Allen recessed the Council to Closed Session at 6:46 p.m.

3.a Government Code § 54956.9(d)(1) – CONFERENCE WITH LEGAL COUNSEL—EXISTING LITIGATION
Name of case: Adam Chacon v. City of Covina, LA County, et al.; Case No:
21STCV00245

3.b Government Code § 54956.9(d)(2) – CONFERENCE WITH LEGAL

COUNSEL - POTENTIAL LITIGATION
Significant exposure to litigation: One potential case regarding BKK Corporation Landfill in West Covina, California”
JOINT MEETING—OPEN SESSION 7:30 PM

4. RECONVENE AND CALL TO ORDER
Mayor Allen called the Council/Agency/Authority meeting to order at 7:32 p.m. with all Councilmembers present.

5. ROLL CALL

6. PLEDGE OF ALLEGIANCE
Led by Mayor Allen.

7. INVOCATION
Given by Police Chaplain Chuck Cannizzaro.

8. CLOSED SESSION REPORT
City Attorney Lee announced that direction was given to staff and no reportable action was taken for Closed Session Item #3.a and the City Council unanimously authorized entering into a sixth tolling agreement with BKK West and authorized City Manager to execute the tolling agreement on behalf of the City for Closed Session Item #3.b.

9. PRESENTATIONS

9.a Charter Oak Advanced Choir Ensemble "ACE"
Rebecca Portnoy, Choir Director for Charter Oak Unified School District, and the Charter Oak Advanced Choral Ensemble "ACE" performed several songs.

3 10. PUBLIC COMMENTS
Dora Gomez of God Provides Ministry – Pomona Valley Food Bank and Project 29:11 Covina thanked the City Council, Police Department, and Los Angeles County Fire Department for their continued support and provided a recap on the programs provided by Project 29:11 including the food bank, children's Christmas play production, and Toys for Tots drive.

11. COUNCIL/AGENCY/AUTHORITY COMMENTS
Mayor Pro Tem King wished the community happy holidays and a wonderful, warm, and merry Christmas.

Councilmember Delgado welcomed everyone and wanted to recognize Commissioner Eloy Flores and thank him and every resident for the get well wishes. He also wished everyone happy holidays and a happy new year.

Councilmember Cortez spoke about her recent experience helping Luminate Church pass out toys and thanked Ms. Gomez for inviting her to the event. She also noted that this event, along with the work of other nonprofits and community groups show how Covina comes together and thanked Covina residents for stepping up. Councilmember Cortez wished everyone happy holidays, Christmas, and new year.

Councilmember Linares thank Mayor Pro Tem King and Councilmember Delgado for being present. He also stated that it was a great honor to be a part of the City Council. He noted that the holidays in the City get better every year and he hopes to continue to see this in the future. Councilmember Linares wished everyone happy holidays and reminded the community to stay safe.

Mayor Allen expressed his appreciation for the Parks & Recreation staff for the recently held Candy Cane Citrus 1.5k Walk and the Covina Concert Band for bringing the right spirit to the season. He wished everyone a merry Christmas, happy Hanukkah, and happy Kwanzaa. Mayor Allen gave a shout out to Public Works Director Bullington and his team for wrapping up sidewalk improvements along Azusa Avenue. He also expressed his excitement regarding the item authorizing the publication to solicit bids for the construction of the Covina Recreation Village and noted what an accomplishment it was to work with the Los Angeles Building Trades Association to hire locally for the project. He then stated that the City Council is the best he has worked with in 26 years of service due to the prioritizing of interests of the people of Covina. He also thanked City staff for a remarkable job of helping move the City forward.

12. CITY MANAGER COMMENTS
City Manager Marcarello stated that it is a pleasure to work under the City Council's leadership. He also announced that City Hall will be closed the week between Christmas and New Year’s but emergency services will still be available and trash services will be delayed by one day. City Manager Marcarello then noted that Consent Calendar Item #13.i includes updates to staff compensation to bring them closer to market rates and grant funding and special revenues will be utilized to cover some of these costs. These changes include three Executive classifications, the Community Development Director, Deputy City Manager, and Parks & Recreation/Library Services Director, with a salary range from

4 $12,458 - $17,058. City Manager Marcarello also requested to be recused from Consent Calendar Item #13.k.

13. CONSENT CALENDAR
City Attorney Lee, pursuant to the Brown Act, noted that Consent Calendar Item #13.k contains a recommendation to approve the third amendment to the City Manager Employment Agreement from an Ad Hoc Committee with changes being made to compensation, leave accruals, and severance.

13.a Payment of Demands
Motion made by: Mayor Pro Tem King
Seconded by: Councilmember Linares
Approve Payment of Demands in the amount of $2,260,431.83 Approved (5 to 0)

13.b City of Covina Investment Report for Month Ended November 30, 2023 Motion made by: Mayor Pro Tem King
Seconded by: Councilmember Linares
Receive and File.

Approved (5 to 0)

13.c Azusa Avenue Sidewalk Renovation Project from Arrow Highway to Badillo Street – Final Acceptance and Filing Notice of Completion Motion made by: Mayor Pro Tem King
Seconded by: Councilmember Linares

1. Accept the work performed by FS Contractors, Inc.; and

2. Authorize the City Clerk to File a Notice of Completion for the Azusa Avenue Sidewalk Renovation Project
Approved (5 to 0)

13.d Confirm and Approve City Council’s Appointments to Various City of Covina Boards and Commissions
Motion made by: Mayor Pro Tem King
Seconded by: Councilmember Linares
Approve the City Council’s appointments to various City of Covina Boards and Commissions.

Approved (5 to 0)

13.e Community Workforce Agreement and Authorization to Solicit Bids for the Covina Recreation Village located at 640-680 N Citrus Avenue Councilmember Delgado thanked the City Manager and staff for working with the Los Angeles/Orange Counties Building and Construction Trades Council to put together the Community Workforce Agreement. He noted that this is the first time

5 the City will be able to prioritize the skilled labor of its own residents to work on a City Project.

Mayor Allen echoed Councilmember Delgado's sentiments.

Motion made by: Councilmember Cortez
Seconded by: Mayor Allen

1. Authorize the City Manager, or designee, to execute all related documents between the City of Covina and Los Angeles/Orange Counties Building and Construction Trades Council and the Signatory Craft Councils and Local Unions for a “Community Workforce Agreement” for the Covina Recreation Village Project; and

2. Authorize the City Engineer to Advertise and Release a Request for Bids for the Covina Recreation Village Project, Located at 640 – 680 N. Citrus Avenue.

Approved (5 to 0)

13.f Request to Cancel the Regular City Council Meeting of January 2, 2024 Motion made by: Mayor Pro Tem King
Seconded by: Councilmember Linares
That the City Council consider cancelling the regular scheduled City Council Meeting of January 2, 2024.

Approved (5 to 0)

13.g Adoption of Ordinance 23-11
Motion made by: Mayor Pro Tem King
Seconded by: Councilmember Linares
That the City Council adopt Ordinance 23-11, entitled “An Ordinance of the City Council of the City of Covina, California, Approving Zoning Code Amendment (ZCA) 23-008 by Amending Chapter 17.59 (“Mixed-Use Overlay District (MUOD)”) and Chapter17.31 (“Affordable Housing and Mixed-Use Overlay District (AHMUOD)”) of Title 17(“Zoning”) of the Covina Municipal Code, Regarding Minimum Parcel Size and Density Requirements, and the Adopted Mitigated Negative Declaration (MND) with the Mitigation Reporting and Monitoring Program (MMRP) Provides Environmental Clearance for the Proposed Changes and That No Further Environmental Review is Needed Under the California Environmental Quality Act (CEQA) Guidelines”.

Approved (5 to 0)

13.h Resolution CC 2023-128, Authorizing the Covina Police Department to Obtain Summary Criminal History Information Related to the Commercial Cannabis Application Process
Motion made by: Mayor Pro Tem King
Seconded by: Councilmember Linares

6 That the City Council adopt Resolution CC 2023-128 and authorize the City Manager to make non-substantive modifications as may be required by the Department of Justice.

Approved (5 to 0)

13.i Amendments to City Classification Plan
Motion made by: Mayor Pro Tem King
Seconded by: Councilmember Linares
That the City Council adopt Resolution CC 2023-134 to:

1. Amend the Citywide Staffing Position Control;

2. Establish job descriptions and salary ranges for specified positions; and

3. Authorize the City Manager to execute a Side Letter of Agreement with the American Federation of State, County and Municipal Employees Bargaining Unit.

Approved (5 to 0)

13.j Appropriate Information Technology Internal Service Funds for Migration Services for Microsoft 365, Microsoft Servers and Other Technology Platforms
Motion made by: Mayor Pro Tem King
Seconded by: Councilmember Linares
Adopt Resolution CC 2023-133, appropriating funds for information technology software upgrades and migration services and authorizing the use of the City’s information technology consultant, Acorn Technology Services, to assist with migration activities.

Approved (5 to 0)

13.k Approval of Third Amendment to City Manager Employment Agreement Between the City of Covina and Christopher Marcarello
Motion made by: Mayor Pro Tem King
Seconded by: Councilmember Linares
Approve the Third Amendment to City Manager Employment Agreement between the City of Covina and Christopher Marcarello
Approved (5 to 0)

14. CONTINUED PUBLIC HEARING

14.a Final REIR Certification and Entitlement Applications for a Proposed MixedUse Development Project at 1000 N. Azusa Avenue The agenda report was provided by Planning Manager Mercy Lugo, Community Development Director Lee, CEQA Consultant Frankie Tong from Michael Baker International, and Project Applicant Chad Brown from Melia Homes.

7 Questions and discussion included setbacks, visual encroachments, negative feedback received, the development of the third commercial pad, the development agreement, and the progress of the Project. Councilmembers stressed the importance of the developer completing the commercial portion of the project in tandem with the residential components. They further discussed the structure of the development agreement, noting that the developer must move through construction according to an expedited timeline and the potential consequences and financial penalties should delays occur.

Project Applicant Representative Allan Liu from PKL was present to answer questions. He indicated that PKL intends to move forward on the commercial development according to the identified timeline outlined in the development agreement.

Eloy Flores commented regarding traffic concerns, electric vehicle charging stations, and solar panel capabilities. Project Applicant Brown responded to the comments and informed the City Council that, per California Building Code Standards, solar panels and electric vehicle charging stations will be included in the Project.

Mayor Allen closed the public hearing.

Motion made by: Councilmember Linares
Seconded by: Mayor Pro Tem King

1. Approve Resolution CC 2023-119, to certify the Final Revised EIR, Findings of Facts, and the adoption of the Mitigation Monitoring & Reporting Program (MMRP); and

2. Approval of the following entitlement applications:
a. Resolution CC 2023-120 – General Plan Amendment (GPA) 22-1 b. Resolution CC 2023-121– Covina Village Specific Plan (SP) 22-1 c. Ordinance 23-12 – Zone Change (ZCH) 22-7
d. Ordinance 23-13 – Development Agreement
e. Resolution CC 2023-122 – Vesting Tentative Tract Map (VTTM) 82315
f. Resolution CC 2023-123 – Vesting Tentative Parcel Map (VTPM) 84018
g. Resolution CC 2023-124 – Conditional Use Permit (CUP) 22-7 h. Resolution CC 2023-125 – Conditional Use Permit (CUP) 22-8 i. Resolution CC 2023-126 – Conditional Use Permit (CUP) 22-9 j. Resolution CC 2023-127 – Site Plan Review (SPR) 22-226 Approved (4 to 0); Delgado Absent

8 15. PUBLIC HEARINGS

15.a Ordinance 23-14, Amending Regulations Regarding Peddlers, Sidewalk Vendors and Mobile Food Facilities and Making a Determination of Exemption Under CEQA
Mayor Allen opened the public hearing.

The agenda report was provided by James Eckart, City Prosecutor.

Questions and discussion included how fines will be applied, what enforcement can look like, what assistance will be provided through the Los Angeles County Department of Health, staffing resources, the safety of the workers, and what additional legislation may arrive later.

There were no public comments.

Mayor Allen closed the public hearing.

Motion made by: Mayor Pro Tem King
Seconded by: Councilmember Linares
That the City Council:

1. Introduce Ordinance 23-14, amending Section Chapter 5.90 of the Covina Municipal Code Regarding Regulations of Peddlers, Sidewalk Vendors and Mobile Food Facilities; and

2. Determine that these actions are exempt from the California Environmental Quality Act.

Approved (4 to 0); Delgado Absent

16. ADJOURNMENT
At 9:39 p.m., the Covina City Council/Successor Agency to the Covina Redevelopment Agency/Covina Public Financing Authority/Covina Housing Authority adjourned to its next regular meeting of the Council/Agency/Authority scheduled for Tuesday, January 16, 2024, at 6:30 p.m., for closed session and 7:30 p.m., for open session in the Council Chamber located inside of City Hall, 125 East College Street, Covina, California, 91723. _________________________
Fabian Velez, Chief Deputy City Clerk
_________________________
Walter Allen III, Mayor/Chair

1 CITY COUNCIL/SUCCESSOR AGENCY TO THE COVINA REDEVELOPMENT

AGENCY/COVINA PUBLIC FINANCING AUTHORITY/COVINA HOUSING

AUTHORITY JOINT MEETING

MINUTES
January 16, 2024, 7:30 p.m.
125 E. College Street, Covina, California
Council Chamber of City Hall
Councilmembers Present: Councilmember Hector Delgado
Mayor Pro Tem/Vice-Chair John C. King
Mayor/Chair Walter Allen, III
Councilmembers Absent: Councilmember Patricia Cortez
Councilmember Victor Linares
Staff Present: City Clerk Drew Aleman (Elected Member)
City Manager Chris Marcarello
City Attorney Candice K. Lee
Police Chief David Povero
Administrative Services Director Anita Agramonte
Community Development Director Brian Lee
Parks & Recreation/Library Services Director Lisa Evans Public Works Director Andy Bullington
Deputy City Manager Angel Carrillo
Chief Deputy City Clerk Fabian Velez
Staff Absent: City Treasurer Neil Polzin (Elected Member) _____________________________________________________________________

2 CLOSED SESSION

1. CLOSED SESSION - WAS NOT HELD
JOINT MEETING—OPEN SESSION 7:30 PM

2. CALL TO ORDER

3. ROLL CALL

4. PLEDGE OF ALLEGIANCE
Led by Councilmember Delgado.

5. INVOCATION
Given by Covina Police Chaplain Ron Butler.

6. PUBLIC COMMENTS
There were no public comments.

7. COUNCIL/AGENCY/AUTHORITY COMMENTS
Mayor Pro Tem King welcomed everyone back and thanked the community for the prayers and kind words received regarding his medical complications.

Mayor Allen highlighted an incident that had recently occurred in which two Covina Police Officers successfully deescalated a disturbance during a church sermon. Police Chief Povero informed Mayor Allen that the two officers involved were Officers Cole Hagle and Pedro Sanchez. Mayor Allen thanked the two officers, as well as the rest of the Covina Police Department and Police Chief Povero.

8. CITY MANAGER COMMENTS
City Manager Marcarello informed the City Council and residents that a new website has been launched for the City and thanked everyone for their patience as it rolls out.

9. CONSENT CALENDAR
Mayor Allen highlighted items on the Consent Calendar including: Item #9.f, finalizing the installation of a digital marquee on the Covina Center for Performing Arts; Item #9.g, partnering with the City of West Covina for grant funded traffic signal improvements at Lark Ellen Ave. and Badillo St.; Item #9.i, regarding illicit street vending; Item #9.j, accepting grant funds to streamline applying for solar permits; and Item #9.l, leasing the restaurant space located next to the Covina Laugh Factory.

9.a Minutes
Motion made by: Councilmember Delgado
Seconded by: Mayor Pro Tem King
Approve the Minutes of the December 5, 2023, Regular Meeting of the City Council/Successor Agency to the Covina Redevelopment Agency/Covina Public Financing Authority/Housing Authority.

Approved (3 to 0); Cortez & Linares Absent

3 9.b Payment of Demands
Motion made by: Councilmember Delgado
Seconded by: Mayor Pro Tem King
Approve Payment of Demands in the amount of $7,089,816.34.

Approved (3 to 0); Cortez & Linares Absent

9.c Recognized Obligation Payment Schedule (ROPS 24-25), Covering July 1, 2024 through June 30, 2025
Motion made by: Councilmember Delgado
Seconded by: Mayor Pro Tem King
Approve the Recognized Obligation Payment Schedule (ROPS 24-25) covering July 1, 2024, through June 30, 2025.

Approved (3 to 0); Cortez & Linares Absent

9.d City of Covina Investment Report for Month Ended December 31, 2023 Motion made by: Councilmember Delgado
Seconded by: Mayor Pro Tem King
Receive and File.

Approved (3 to 0); Cortez & Linares Absent

9.e Approval of Part-Time Salary Range Adjustments Subject to Minimum Wage and Revised Paid Sick Leave Policy for Part-Time Employees Motion made by: Councilmember Delgado
Seconded by: Mayor Pro Tem King
Approve salary range adjustments for classifications affected by the State mandated minimum wage increases effective January 1, 2024, as per Labor Code Section 1182.12(c)(3)(A) and approve the revised Administrative Policy for Paid Sick Leave for Part-Time Employees per Senate Bill 616.

Approved (3 to 0); Cortez & Linares Absent

9.f Covina Performing Arts Center’s Digital Marquee Sign Project – Project No.

F2404 - Final Acceptance and Filing Notice of Completion Motion made by: Councilmember Delgado
Seconded by: Mayor Pro Tem King

1. Accept the work completed by Eagle Signs, Inc; and

2. Authorize the City Clerk to file a Notice of Completion for the Covina Performing Arts Center’s Digital Marquee Sign Project – Project No.

F2404.

Approved (3 to 0); Cortez & Linares Absent

4 9.g Memorandum of Understanding (MOU) between the City of Covina and the City of West Covina for the Traffic Signal Improvements Project – Lark Ellen Avenue/Badillo Street
Motion made by: Councilmember Delgado
Seconded by: Mayor Pro Tem King

1. Approve the Memorandum of Understanding (MOU) between the City of Covina and the City of West Covina for the Traffic Signals Improvement Project – Lark Ellen Avenue/Badillo Street; and

2. Authorize the City Manager or his/her designee to execute any necessary amendments to the MOU.

Approved (3 to 0); Cortez & Linares Absent

9.h Adoption of Ordinances 23-12 and 23-13
Motion made by: Councilmember Delgado
Seconded by: Mayor Pro Tem King

1. Adopt Ordinance 23-12 12 entitled, “An Ordinance of the City Council of the City of Covina, California, adopting Zone Change (ZCH) 22-7, amending the official zoning map of the city of Covina by changing the zone designation from commercial highway (C-4) zone to “Covina Village Specific Plan (CVSP) designation, with two (2) planning areas: CVSP planning area 1 - (Townhome Residential) and CVSP planning area 2 - (commercial);” for the proposed Covina Village Mixed use development on an approximately 8.0-acre site generally located at 1000 n. Azusa Avenue (APNS 8421-001-016 and 8421-001-061)”; and

2. Adopt Ordinance 23-13 entitled “An Ordinance of the City Council of the City of Covina, California, approving Development Agreement (DA), pursuant to Government Code Section 65864 et. seq., a development agreement between the city of Covina and PKL, LLC;” for the proposed Covina Village Mixed use development on an approximately 8.0-acre site generally located at 1000 n. Azusa Avenue (APNS 8421-001-016 and 8421- 001-061)”.

Approved (3 to 0); Cortez & Linares Absent

9.i Adopt Ordinance 23-14
Motion made by: Councilmember Delgado
Seconded by: Mayor Pro Tem King
Adopt Ordinance 23-14 entitled, “An Ordinance of the City Council of the City of Covina, California Amending Chapter 5.90 (“Sidewalk Vendors and Mobile Food Facilities”) of the Covina Municipal Code”.

Approved (3 to 0); Cortez & Linares Absent

5 9.j Resolution CC 2024-02 Authorizing the Acceptance of Grant Funds and Authorizing the City Manager to Enter into Contract with the California Energy Commission to Facilitate an Automatic Permitting Program for Solar Residential Projects
Motion made by: Councilmember Delgado
Seconded by: Mayor Pro Tem King
Staff recommends the approval of Resolution CC 2024-02.

Approved (3 to 0); Cortez & Linares Absent

9.k Vehicle Purchase
Motion made by: Councilmember Delgado
Seconded by: Mayor Pro Tem King
Approve the purchase of a new vehicle in the amount of $32,319.23.

Approved (3 to 0); Cortez & Linares Absent

9.l Restaurant Space Lease Agreement – 100 North Citrus Avenue Motion made by: Councilmember Delgado
Seconded by: Mayor Pro Tem King
That the City Council approve a lease agreement with Bear Sausage Co., LLC for the operation of a restaurant at 100 N. Citrus Avenue and authorize the City Manager to make any non-substantive changes that may be required prior to finalizing and executing the agreement.

Approved (3 to 0); Cortez & Linares Absent

10. PUBLIC HEARINGS

10.a Consideration of Fiscal Year 2024-2025 Community Development Block Grant (CDBG) Program Budget
Mayor Allen opened the public hearing.

The agenda report was provided by Management Analyst Alice Leung.

In response to an inquiry from Mayor Pro Tem King, City Manager Marcarello and Community Development Director Lee informed the City Council that while the City meets the qualifications of an entitlement city, there is currently an agreement in place with the County of Los Angeles and the topic may be revisited closer to expiration.

There were no public comments.

Mayor Allen closed the public hearing.

Motion made by: Mayor Pro Tem King
Seconded by: Councilmember Delgado

6 1. Open the public hearing and receive public testimony;

2. Close the public hearing;

3. Consider approval of the FY 2024-2025 CDBG program budget as recommended in Column C of the Table on Attachment A with the provision that: a) the allocation be adjusted based on the final allocation as determined by the Los Angeles County Development Authority (LACDA), with a maximum of 15 percent of funding allocated for public service programs;

4. Adopt Resolution CC 2024-01, authorizing the allocation of the Fiftieth Year CDBG funds for FY 2024-2025; and

5. Authorize the City Manager or his designee to execute the documents related to the FY 2024-2025 CDBG funds.

Approved (3 to 0); Cortez & Linares Absent

11. ADJOURNMENT
At 7:54 p.m., the Covina City Council/Successor Agency to the Covina Redevelopment Agency/Covina Public Financing Authority/Covina Housing Authority adjourned to its next regular meeting of the Council/Agency/Authority scheduled for Tuesday, February 6, 2024, at 6:30 p.m., for closed session and 7:30 p.m., for open session in the Council Chamber located inside of City Hall, 125 East College Street, Covina, California, 91723. _________________________
Fabian Velez, Chief Deputy City Clerk
_________________________
Walter Allen III, Mayor/Chair

CITY OF COVINA AND

SUCCESSOR AGENCY TO THE

COVINA REDEVELOPMENT AGENCY

AGENDA ITEM REPORT
ITEM NO. CC 3
Meeting: February 6, 2024
Title: Payment of Demands
Presented by: Anita Agramonte, Administrative Services Director Recommendation: Approve Payment of Demands in the amount of $4,132,091.10.

EXECUTIVE SUMMARY/BACKGROUND:

Attached is a list of warrants and demands which are being presented for approval and are summarized as follows:

Accounts Payable Warrants December 29, 2023 – January 11, 2024 CITY checks/EFTs $ 3,178,439.08
CITY payroll $ 931,314.43
CITY voids $ -
Worker’s Comp $ 16,722.25
$ 4,126,475.76
SACRA checks/EFTs $ 1,017.46
SACRA payroll $ 4,597.88
$ 5,615.34
TOTAL checks/EFTs $ 4,132,091.10
DISCUSSION:

The attached reports have been reviewed by the Administrative Services Director.

FISCAL IMPACT:

Sufficient funding is available and the related costs are included in the Fiscal Year 23/24 Budget.

Respectfully submitted,

CITY OF COVINA
Check Register
Dec 29, 2023 - Jan 11, 2024
Check # Check Date Vendor Name Amount
5925 12/01/2023 5438 BMO 27,572.03
5926 01/04/2024 4003 MidAmerica 1,319.65
5927 12/20/2023 487 CALIFORNIA PUBLIC EMPLOYEES' 4,267.92 20765 01/04/2024 788 COVINA, CITY OF 27.07
20766 01/04/2024 2033 NATIONWIDE RETIREMENT SOLUTIONS 7,050.00 20767 01/04/2024 788 COVINA, CITY OF 43,635.10
20768 01/04/2024 789 COVINA-FSA, CITY OF 829.17
20769 01/04/2024 2033 NATIONWIDE RETIREMENT SOLUTIONS 27,400.42 20770 01/04/2024 487 CalPERS 7,504.94
20771 01/04/2024 487 CalPERS 97,950.72
subtotal EFT/wires/direct deposits $ 217,557.02
119467 01/03/2024 37 ACRYLATEX 367.13
119468 01/03/2024 58 ADVANTAGE 11,822.37
119469 01/03/2024 254 AZUSA LIGHT & WATER 1,587.31
119470 01/03/2024 260 B & K ELECTRIC WHOLESALE 134.51
119471 01/03/2024 269 BAKER AND TAYLOR INC 5,195.40
119472 01/03/2024 572 CATHOLIC CHARITIES OF LOS ANGELES 10,647.00 119473 01/03/2024 664 CIVILTEC ENGINEERING INC. 2,835.00 119474 01/03/2024 749 BOHL PH.D., NANCY K. 450.00
119475 01/03/2024 783 CITY OF COVINA WATER 541.04
119476 01/03/2024 849 DAPEER ROSENBLIT & LITVAK LLP 17,156.48 119477 01/03/2024 875 DELL MARKETING L.P. 15,167.45
119478 01/03/2024 947 DUNN EDWARDS CORP 134.10
119479 01/03/2024 962 SUPERIOR COURT OF CALIFORNIA, CNTY OF LOS ANGELES 8,195.00 119480 01/03/2024 962 SUPERIOR COURT OF CALIFORNIA, CNTY OF LOS ANGELES 207.00 119481 01/03/2024 970 EDISON CO 5,920.17
119482 01/03/2024 1156 THE GAS COMPANY 37.08
119483 01/03/2024 1235 GRAINGER 124.85
119484 01/03/2024 1352 HINDERLITER DELLAMAS & ASSOC 2,334.46 119485 01/03/2024 1361 HOLLIDAY ROCK CO INC 731.62
119486 01/03/2024 1429 INLAND EMPIRE STAGES 1,155.40
119487 01/03/2024 1612 LA CNTY DEPT OF PUBLIC WORKS 9,707.96 119488 01/03/2024 1710 LIFELOC TECHNOLOGIES INC 189.00
119489 01/03/2024 1792 MANNING & MARDER KASS, 3,737.50
119490 01/03/2024 1895 MERRIMAC ENERGY GROUP 30,691.04
119491 01/03/2024 2027 NAPA AUTO PARTS 855.96
119492 01/03/2024 2345 QUILL 440.41
119493 01/03/2024 2736 STAPLES BUSINESS ADVANTAGE 518.26 119494 01/03/2024 2800 T MOBILE USA 377.01
119495 01/03/2024 2818 GABE BF VAN LEEUWEN 386.40
119496 01/03/2024 2846 THOMAS, TERRI 889.00
119497 01/03/2024 2855 CHARTER COMMUNICATION 372.90
119498 01/03/2024 2926 TYLER TECHNOLOGIES INC. 50,019.55 119499 01/03/2024 2942 UNITED SITE SERVICES OF CA INC 2,365.58 119500 01/03/2024 3023 VULCAN MATERIALS COMPANY 1,625.76 119501 01/03/2024 3187 WAGONER, PAMELA 571.56
119502 01/03/2024 3300 SOUTHERN COUNTIES FUELS 1,516.86 119503 01/03/2024 3796 RICHARDS, WATSON & GERSHON 26,271.22 119504 01/03/2024 3837 SONSRAY MACHINERY LLC 11,532.45
119505 01/03/2024 3932 ARLENE D. MAR 140.00
119506 01/03/2024 3988 LANDSCAPE WAREHOUSE III 1.18
119507 01/03/2024 4065 VERIZON BUSINESS SERVICES 837.85 Attachment A Page 1 of 5

CITY OF COVINA
Check Register
Dec 29, 2023 - Jan 11, 2024
Check # Check Date Vendor Name Amount
119508 01/03/2024 4065 VERIZON WIRELESS 1,876.53
119509 01/03/2024 4360 MOORE IACOFANO GOLTSMAN, INC. 10,842.50 119510 01/03/2024 4374 ADMINSURE, INC 7,093.92
119511 01/03/2024 4389 EMPLOY AMERICA 2,322.00
119512 01/03/2024 4455 FRONTIER 1,446.55
119513 01/03/2024 4667 Ocean Blue Environmental Services, Inc. 8,165.32 119514 01/03/2024 4676 Hill Brothers Chemical Company 1,084.59 119515 01/03/2024 4704 S & J Supply Company, Inc. 976.15 119516 01/03/2024 4764 UniFirst Corporation 540.10
119517 01/03/2024 4813 JOHNSON CONTROLS FIRE PROTECTION LP 552.35 119518 01/03/2024 4817 Weck Analytical Environmental Services, Inc. 10.00 119519 01/03/2024 4829 Alicia A. Flores 185.50
119520 01/03/2024 4874 MARIA E. VELOSCO BEDRAN 1,159.62 119521 01/03/2024 4931 Antonio Castro Jr 1,630.15
119522 01/03/2024 4960 Data Ticket, Inc. 887.46
119523 01/03/2024 5233 RODENT PEST TECHNOLOGIES 262.50
119524 01/03/2024 5245 THERESA FLORES-FRANKE 20.62
119525 01/03/2024 5269 CONTROL AIR ENTERPRISES LLC. 1,612.50 119526 01/03/2024 5285 MLXPERTS LLC 1,000.00
119527 01/03/2024 5304 DR PHILIP STEINQUIST 2,800.00
119528 01/03/2024 5365 NEW ASIA FSE INC 3,971.00
119529 01/03/2024 5371 LAUGH FACTORY COVINA LLC 8,813.53 119530 01/03/2024 5476 WILLIAMS INVESTIGATIONS 6,237.70 119531 01/03/2024 99999 AILEEN TANG 52.86
119532 01/03/2024 99999 COVINA ASSEMBLY OF GOD CHURCH 450.00 119533 01/03/2024 99999 CYNTHIA FUENTES 88.06
119534 01/03/2024 99999 DONALD BEASLEY 28.09
119535 01/03/2024 99999 EDWARD JIMENEZ 31.73
119536 01/03/2024 99999 ERICA NAVARRO 68.40
119537 01/03/2024 99999 MAY WU 50.92
119538 01/03/2024 99999 OPENDOOR LABS INC 34.66
119539 01/03/2024 99999 PER B TVEDT 64.53
119540 01/03/2024 99999 RAMONA MORA 199.42
119541 01/03/2024 99999 SANDRA LA MASA 62.33
119542 01/03/2024 99999 SUSAN GUTIERREZ 78.61
119543 01/03/2024 99999 WEI PU 41.59
119544 01/04/2024 68 AFLAC ACCT# YQ792 WORLDWIDE HEADQUARTERS 4,243.75 119545 01/04/2024 69 AFSCME District Council 36 828.45
119546 01/04/2024 775 COVINA POLICE ASSOCIATION 2,900.00 119547 01/04/2024 878 DELTA DENTAL OF CALIFORNIA 9,151.50 119548 01/04/2024 1106 FRANCHISE TAX BOARD 1,105.05
119549 01/04/2024 3795 PRE-PAID LEGAL SERVICES, INC 155.48 119550 01/04/2024 3846 CLEA 904.50
119551 01/04/2024 4255 RELIASTAR LIFE INSURANCE COMPANY 4,457.29 119552 01/04/2024 4710 Fidelity Security Life Insurance Company 996.44 119553 01/10/2024 84 AIRGAS-WEST 237.33
119554 01/10/2024 219 AT&T 613.38
119555 01/10/2024 239 AUTOZONE INC 83.29
119556 01/10/2024 437 BURRO CANYON ENT INC 130.00
119557 01/10/2024 477 DEPT OF INDUSTRIAL RELATIONS 675.00 119558 01/10/2024 649 CINTAS CORP #693 702.18
119559 01/10/2024 654 CITRUS CAR WASH 76.98
Attachment A Page 2 of 5

CITY OF COVINA
Check Register
Dec 29, 2023 - Jan 11, 2024
Check # Check Date Vendor Name Amount
119560 01/10/2024 700 COLLEY FORD 756.43
119561 01/10/2024 749 BOHL PH.D., NANCY K. 1,310.00
119562 01/10/2024 766 COVINA DISPOSAL CO 18,684.80
119563 01/10/2024 771 COVINA IRRIGATING CO 253,907.15
119564 01/10/2024 875 DELL MARKETING L.P. 118,610.55
119565 01/10/2024 880 DEMCO INC 37.42
119566 01/10/2024 970 EDISON CO 422.49
119567 01/10/2024 970 EDISON CO 94,829.48
119568 01/10/2024 1007 ENVISIONWARE, INC. 5,122.50
119569 01/10/2024 1156 THE GAS COMPANY 2,337.37
119570 01/10/2024 1198 GLOBALSTAR LLC 102.74
119571 01/10/2024 1204 GOLDEN STATE WATER COMPANY 162.87 119572 01/10/2024 1235 GRAINGER 1,780.49
119573 01/10/2024 1277 CYNTHIA ESTRADA HAEBE 1,815.00
119574 01/10/2024 1352 HINDERLITER DELLAMAS & ASSOC 300.00 119575 01/10/2024 1505 JOHNNY'S POOL SERVICE 61.30
119576 01/10/2024 1612 LA CNTY DEPT OF PUBLIC WORKS 2,319.88 119577 01/10/2024 1614 LA CNTY FIRE DEPARTMENT 1,128,552.05 119578 01/10/2024 1617 REGISTRAR-RECORDER, COUNTY CLERK 20.00 119579 01/10/2024 1619 LA CNTY SHERIFF'S DEPT 390.40
119580 01/10/2024 1633 LACPCA 300.00
119581 01/10/2024 1663 LAW ENFORCEMENT MEDICAL 1,715.00 119582 01/10/2024 1694 LEWIS ENGRAVING INC 84.89
119583 01/10/2024 1707 LIEBERT CASSIDY WHITMORE 3,077.49 119584 01/10/2024 1751 LOU'S GLASS HOUSE OF COVINA 1,380.57 119585 01/10/2024 1860 SSD SYSTEMS 365.04
119586 01/10/2024 1933 MISSION LINEN SUPPLY 48.15
119587 01/10/2024 2027 NAPA AUTO PARTS 858.83
119588 01/10/2024 2091 O REILLY AUTO PARTS 1,965.56
119589 01/10/2024 2238 PEST OPTIONS INC 845.00
119590 01/10/2024 2275 POIRIER, ROBERT 140.00
119591 01/10/2024 2309 PROFESSIONAL ACCOUNT MANAGEMENT LLC 3,476.06 119592 01/10/2024 2415 REPUBLIC MASTER CHEFS 840.64
119593 01/10/2024 2619 SGV EXAMINER 1,980.00
119594 01/10/2024 2676 SMART AND FINAL IRIS CORP 329.29 119595 01/10/2024 2714 SOUTHERN CA GAS CO ML711D 500.00 119596 01/10/2024 2719 SPARKLETTS 6.99
119597 01/10/2024 2855 CHARTER COMMUNICATIONS 354.56
119598 01/10/2024 2955 US BANK 1,100.00
119599 01/10/2024 2958 USPS - POC ACCOUNT #8098154 678.22 119600 01/10/2024 3004 VICTORY EXTERMINATING INC 75.00
119601 01/10/2024 3052 WATERLINE TECHNOLOGIES INC 1,680.21 119602 01/10/2024 3102 WILLDAN FINANCIAL SERVICES 2,255.42 119603 01/10/2024 3152 YWCA 2,051.87
119604 01/10/2024 3163 GENTRY BROTHERS INC 608,163.83
119605 01/10/2024 3202 PUMPMAN INC 9,990.00
119606 01/10/2024 3729 SUNBELT RENTALS INC 381.76
119607 01/10/2024 3735 QUADIENT LEASING USA, INC. 377.06 119608 01/10/2024 3771 BLACK & WHITE EMERGENCY VEHICLES 400.00 119609 01/10/2024 3839 DOANE AND HARTWIG WATER SYSTEMS, INC. 2,153.75 119610 01/10/2024 3988 LANDSCAPE WAREHOUSE III 1,109.76 119611 01/10/2024 4077 INTERWEST CONSULTING GROUP INC 12,220.00 Attachment A Page 3 of 5

CITY OF COVINA
Check Register
Dec 29, 2023 - Jan 11, 2024
Check # Check Date Vendor Name Amount
119612 01/10/2024 4209 ADLERHORST INTERNATIONAL 484.00
119613 01/10/2024 4246 FERGUSON WATERWORKS #1083 9,790.20 119614 01/10/2024 4247 UNITED WATER WORKS INC 2,838.83
119615 01/10/2024 4292 DUDEK 92.50
119616 01/10/2024 4359 CHARGEPOINT, INC. 264.55
119617 01/10/2024 4429 PROFORCE TEMPORARIES 1,852.60
119618 01/10/2024 4455 FRONTIER 6,545.06
119619 01/10/2024 4526 CalAct 800.00
119620 01/10/2024 4564 NATIONAL UNION FIRE INSURANCE COMPANY 1,530.00 119621 01/10/2024 4582 USABLUEBOOK 613.73
119622 01/10/2024 4634 Gladwell Govt. Svcs. 300.00
119623 01/10/2024 4677 vCloud Tech Inc 39,501.87
119624 01/10/2024 4686 COLLISION AND INJURY DYNAMICS INC. 1,394.00 119625 01/10/2024 4687 Mighty Oak Technnology 18,000.00 119626 01/10/2024 4688 PCAM, LLC 64,117.30
119627 01/10/2024 4704 S & J Supply Company, Inc. 907.09 119628 01/10/2024 4764 UniFirst Corporation 453.22
119629 01/10/2024 4766 HASA, INC. 2,069.00
119630 01/10/2024 4813 JOHNSON CONTROLS FIRE PROTECTION LP 1,424.00 119631 01/10/2024 4817 Weck Analytical Environmental Services, Inc. 370.00 119632 01/10/2024 4833 Michael R. Hillmann 3,867.50
119633 01/10/2024 4835 ABBA TERMITE & PEST CONTROL, INC 125.00 119634 01/10/2024 4885 ELIE FARAH 5,200.00
119635 01/10/2024 4925 Humane Society of Pomona Valley, Inc. 25,913.67 119636 01/10/2024 4928 Springstead & Associates, Inc. 4,000.00 119637 01/10/2024 4952 Next Level Elevator 1,175.00
119638 01/10/2024 4965 Environment Planning Development Solutions, Inc. 388.50 119639 01/10/2024 5011 Excel Office Services 380.86
119640 01/10/2024 5100 Flock Group Inc 750.00
119641 01/10/2024 5109 SITEREP CONSTRUCTION SERVICES, INC. 25,782.00 119642 01/10/2024 5137 MasterCorp Commercial Services LLC 4,286.72 119643 01/10/2024 5213 TANGLED WEB SOLUTIONS: INVESTIGATIONS 1,500.00 119644 01/10/2024 5228 ODP BUSINESS SOLUTIONS, LLC 469.40 119645 01/10/2024 5254 COLUMBIA TELECOMMUNICATIONS CORPORATION 2,165.76 119646 01/10/2024 5269 CONTROL AIR ENTERPRISES LLC. 2,008.00 119647 01/10/2024 5283 Y TIRE PERFORMANCE 4,765.10
119648 01/10/2024 5291 AMAZON CAPITAL SERVICES, INC 966.45 119649 01/10/2024 5342 EAGLE SIGNS INC 1,294.00
119650 01/10/2024 5371 LAUGH FACTORY COVINA LLC 45,000.00 119651 01/10/2024 5398 CPACINC.COM 494.00
119652 01/10/2024 5418 THE PHONE GUY 1,429.72
119653 01/10/2024 5432 OPPENHEIMER INVESTIGATIONS GROUP LLP 2,221.00 119654 01/10/2024 5440 WORKMAN MOLINA 4,360.00
119655 01/10/2024 5455 IRWINDALE WINDOWS CO 17,522.05
119656 01/10/2024 5465 RITTER SAFETY & FACILITY SUPPORT 3,150.00 119657 01/10/2024 5477 GARY L PAINTER MD., INC 2,434.00 119658 01/10/2024 5480 INVESTIGATIVE RESOURES INC 9,358.42 119659 01/10/2024 5481 CITRUS VALLEY FLORIST INC 25,000.00 119660 01/10/2024 99999 INFINITY ENERGY 323.32
subtotal checks $ 2,961,899.52
Attachment A Page 4 of 5

CITY OF COVINA
Check Register
Dec 29, 2023 - Jan 11, 2024
Check # Check Date Vendor Name Amount
voids $ -
payroll (01/04/24) $ 935,912.31
payroll ( ) $ -
workers' compensation $ 16,722.25
TOTAL checks/EFTs $ 4,132,091.10
Attachment A Page 5 of 5

CC Regular Meeting

AGENDA ITEM REPORT
ITEM NO. CC 4
Meeting: February 6, 2024
Title: Annual Comprehensive Financial Report (ACFR) for Fiscal Year Ended June 30, 2023 Presented by: Anita Agramonte, Administrative Services Director Theresa Franke, Administrative Services Deputy Director - Finance Recommendation: Receive and file the following reports for Fiscal Year ended June 30, 2023: (1) Annual Comprehensive Financial Report (ACFR) and related Auditor Communications, (2) Independent Accountants’ Report on Agreed-Upon Procedures Applied to Appropriations Limit, and (3) the Single Audit of Federally Assisted Grant Programs.

Annually, following the completion of an independent and certified audit the Finance Division of the Administrative Services Department prepares and publishes the City’s Annual Comprehensive Financial Report (ACFR). This is an extensive report summarizing the financial activities of the City that occurred from July 1, 2022 through June 30, 2023. Attached is the June 30, 2023 ACFR and related reports.

BACKGROUND:

The ACFR is prepared in compliance with the Governmental Accounting Standards Board (GASB) requirements and is attached hereto as Attachment A. Pursuant to GASB guidelines, the City’s ACFR is divided into three sections: Introductory, Financial, and Statistical. The Introductory Section provides a brief overview of the City and contains a Letter of Transmittal, Organizational Chart and List of Principal Officials. The Financial Section contains the Independent Auditors’ Report, Management’s Discussion and Analysis (MD&A) and the Basic Financial Statements including Notes to the Financial Statements. The Statistical Section presents a variety of reports useful in analyzing the City’s financial and operational history as well as evaluating the City’s financial stability.

DISCUSSION:

The audit firm of CliffordLarsonAllen LLP has issued an unmodified (“clean”) opinion on the financial statements as presented in the ACFR for the fiscal year ended June 30, 2023. This means that their examination, testing and audit procedures allowed them to conclude that the financial statements present fairly the financial position of the City. This is the best opinion the City can receive from its auditors.

In addition, the independent auditors performed procedures to assist the City in meeting the requirements of Section 1.5 of Article XIIIB of the California Constitution, which requires that California cities establish an annual appropriations limit (the “Gann Limit”).

In conformity with the provisions of the Single Audit Act of 1984 and the U.S. Office of Management and Budget Uniform Guidance, the auditors also perform an annual single audit when required. A Single Audit was required and performed by the independent auditors for Fiscal Year ended June 30, 2023.

The ACFR, the Independent Accountants’ Report on Agreed-Upon Procedures Applied to Appropriations Limit Worksheet No. 6, the Single Audit of Federally Assisted Grant Programs for Fiscal Year ended June 30, 2023, and related auditor communications are attached. Also attached is the Auditor Letter to the City Council which provides information about the auditor’s responsibilities under generally accepted Government Auditing Standards, as well as information related to the planned scope and timing of the audit.

EXECUTIVE SUMMARY:

FISCAL IMPACT:

None.

CEQA (CALIFORNIA ENVIRONMENTAL QUALITY ACT):

Not applicable.

Respectfully submitted,

Annual Comprehensive
Financial Report
For the Fiscal Year Ended June 30, 2023
COVINЛ

ATTACHMENT A

THIS PAGE INTENTIONALLY LEFT BLANK

CITY OF COVINA, CALIFORNIA
Annual Comprehensive Financial Report
For the fiscal year ended June 30, 2023
Patricia Cortez
Mayor
Walter Allen, III
Mayor Pro Tem
Hector Delgado
Council Member
Chris Marcarello
City Manager
Prepared by the City of Covina
Administrative Services Department-Finance Division
Victor Linares
Council Member
John C. King
Council Member

THIS PAGE INTENTIONALLY LEFT BLANK

CITY OF COVINA, CALIFORNIA

ANNUAL COMPREHENSIVE

FINANCIAL REPORT

WITH REPORT ON AUDIT

BY INDEPENDENT

CERTIFIED PUBLIC ACCOUNTANTS
YEAR ENDED JUNE 30, 2023
PREPARED BY:

ADMINISTRATIVE SERVICES DEPARTMENT – FINANCE DIVISION

THIS PAGE INTENTIONALLY LEFT BLANK

CITY OF COVINA

TABLE OF CONTENTS
YEAR ENDED JUNE 30, 2023

INTRODUCTORY SECTION

ELECTED AND ADMINISTRATIVE OFFICIALS I

LETTER OF TRANSMITTAL II

ORGANIZATION CHART VIII

FINANCIAL SECTION
INDEPENDENT AUDITORS’ REPORT 11
MANAGEMENT’S DISCUSSION AND ANALYSIS (REQUIRED
SUPPLEMENTARY INFORMATION) 15

FINANCIAL STATEMENTS

GOVERNMENT-WIDE FINANCIAL STATEMENTS
STATEMENT OF NET POSITION 31
STATEMENT OF ACTIVITIES 32

FUND FINANCIAL STATEMENTS
BALANCE SHEET – GOVERNMENTAL FUNDS 34

RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION 35

STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – GOVERNMENTAL FUNDS 36

RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF

REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES 37
STATEMENT OF NET POSITION – PROPRIETARY FUNDS 38

STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET
POSITION – PROPRIETARY FUNDS 39
STATEMENT OF CASH FLOWS – PROPRIETARY FUNDS 40
STATEMENT OF FIDUCIARY NET POSITION – FIDUCIARY FUNDS 42 STATEMENT OF CHANGES IN FIDUCIARY NET POSITION –
FIDUCIARY FUNDS 43
NOTES TO FINANCIAL STATEMENTS 45

CITY OF COVINA

TABLE OF CONTENTS
YEAR ENDED JUNE 30, 2023

REQUIRED SUPPLEMENTARY INFORMATION

SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND
RELATED RATIOS – MISCELLANEOUS 92
SCHEDULE OF CONTRIBUTIONS – MISCELLANEOUS 94

SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION
LIABILITY – SAFETY 95
SCHEDULE OF CONTRIBUTIONS – SAFETY 96

SCHEDULE OF CHANGES IN THE NET OPEB LIABILITY AND
RELATED RATIOS 97
SCHEDULE OF CONTRIBUTIONS – OPEB 98
BUDGETARY COMPARISON SCHEDULE – GENERAL FUND 99
BUDGETARY COMPARISON SCHEDULE – MEASURE W SPECIAL
REVENUE FUND 100
BUDGETARY COMPARISON SCHEDULE – PARK DEVELOPMENT
CAPITAL PROJECT FUND 101
NOTE TO REQUIRED SUPPLEMENTARY INFORMATION 102

SUPPLEMENTARY INFORMATION

OTHER GOVERNMENTAL FUNDS
DESCRIPTION OF OTHER GOVERNMENTAL FUNDS 105
COMBINING BALANCE SHEET 108

COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES 114

SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN
FUND BALANCE – BUDGETARY COMPARISON SCHEDULES

COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM SPECIAL
REVENUE FUND 120
PROPOSITION A SPECIAL REVENUE FUND 121
LAW ENFORCEMENT SPECIAL REVENUE FUND 122
NARCOTICS SEIZURE SPECIAL REVENUE FUND 123
STATE GAS TAX SPECIAL REVENUE FUND 124

CITY OF COVINA

TABLE OF CONTENTS
YEAR ENDED JUNE 30, 2023
PROPOSITION C SPECIAL REVENUE FUND 125
AIR QUALITY IMPROVEMENT SPECIAL REVENUE FUND 126
MUNICIPAL PARKING SPECIAL REVENUE FUND 127
LIGHTING ASSESSMENT SPECIAL REVENUE FUND 128
LANDSCAPING ASSESSMENT SPECIAL REVENUE FUND 129

COMMUNITY FACILITIES DISTRICT ASSESSMENT SPECIAL
REVENUE FUND 130
SHOPPERS LANE PARKING DISTRICT SPECIAL REVENUE FUND 131 MEASURE M SPECIAL REVENUE FUND 132
TDA GRANT SPECIAL REVENUE FUND 133
ROAD MAINTENANCE AND REHABILITATION SPECIAL REVENUE FUND 134 PEG ACCESS TELEVISION SPECIAL REVENUE FUND 135
HOUSING AUTHORITY SPECIAL REVENUE FUND 136
MEASURE R SPECIAL REVENUE FUND 137
OTHER GRANTS SPECIAL REVENUE FUND 138

CAPITAL PROJECTS FUNDS
GENERAL PROJECTS FUND 139
COVINA REVITALIZATION PROJECTS FUND 140
TRANSPORTATION CAPITAL PROJECTS FUND 141

NONMAJOR ENTERPRISE FUNDS
DESCRIPTION OF NONMAJOR ENTERPRISE FUNDS 142
COMBINING STATEMENT OF NET POSITION 143

COMBINING STATEMENT OF REVENUES, EXPENSES, AND
CHANGES IN NET POSITION 144
COMBINING STATEMENT OF CASH FLOWS 145

INTERNAL SERVICES FUNDS
DESCRIPTION OF INTERNAL SERVICE FUNDS 147
COMBINING STATEMENT OF NET POSITION 148

CITY OF COVINA

TABLE OF CONTENTS
YEAR ENDED JUNE 30, 2023

COMBINING STATEMENT OF REVENUES, EXPENSES, AND
CHANGES IN NET POSITION 149
COMBINING STATEMENT OF CASH FLOWS 150

CUSTODIAL FUNDS
DESCRIPTION OF CUSTODIAL FUNDS 152
COMBINING STATEMENT OF FIDUCIARY NET POSITION 153

COMBINING STATEMENT OF CHANGES IN FIDUCIARY
NET POSITION 154

STATISTICAL SECTION (UNAUDITED)
DESCRIPTION OF STATISTICAL SECTION CONTENTS 157
NET POSITION BY COMPONENT 159
CHANGES IN NET POSITION 160
FUND BALANCES OF GOVERNMENTAL FUNDS 163
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS 164
GENERAL GOVERNMENTAL TAX REVENUES BY SOURCE 166
ASSESSED VALUE OF TAXABLE PROPERTY 167
ASSESSED VALUE OF TAXABLE PROPERTY BY USE 168
PROPERTY TAX RATES 169
PRINCIPAL PROPERTY OWNERS 170
PROPERTY TAX LEVIES AND COLLECTIONS 171
RATIOS OF OUTSTANDING DEBT BY TYPE 172
RATIOS OF NET GENERAL BONDED DEBT OUTSTANDING 173
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES BONDED DEBT 174 LEGAL DEBT MARGIN INFORMATION 175
PLEDGED-REVENUE BOND COVERAGE – WATER UTILITY FUND
INSTALLMENT AGREEMENT AND REVENUE BONDS 176
PLEDGED-REVENUE BOND COVERAGE – SEWER FUND REVENUE BONDS 177 DEMOGRAPHIC AND ECONOMIC STATISTICS 178

CITY OF COVINA

TABLE OF CONTENTS
YEAR ENDED JUNE 30, 2023
PRINCIPAL EMPLOYERS 179
FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION 180 OPERATING INDICATORS BY FUNCTION 181
CAPITAL ASSET STATISTICS BY FUNCTION 183
CONTINUING DISCLOSURE – WATER SYSTEM 184
CONTINUING DISCLOSURE – WASTEWATER SYSTEM 185

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INTRODUCTORY SECTION

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CITY OF COVINA, CALIFORNIA
Elected and Administrative Officials
2022-2023
Elected Official Term Expires
Mayor:

Patricia Cortez March 2024
Mayor Pro Tem:

Walter Allen, III March 2024
Council Members:

Hector Delgado June 2026
John C. King June 2026
Victor Linares June 2026
City Clerk:

Andrew Aleman June 2026
City Treasurer:

Neil Polzin June 2026
Administrative Staff Date of Hire
City Manager:*
Chris Marcarello January 2017
City Attorney:*
Candice Lee May 2015
Administrative Services Director:

Anita Agramonte July 2016
Police Chief:

David Povero July 1988
Fire Chief:**
Anthony C. Marrone February 2023
Public Works Director:

Andy Bullington June 2018
Parks and Recreation Director:

Lisa Evans July 1989
Community Development Director:

Brian Lee June 2015
Chief Deputy City Clerk:

Fabian Velez June 2023
*Appointed by City Council
**Appointed by Los Angeles County Fire District
i

CITIZENS

CITY OF COVINA

ORGANIZATIONAL CHART
FISCAL YEAR 2022-2023
City Clerk
City Council
Successor Agency
to Former RDA
City Attorney City Manager

COMMUNITY

DEVELOPMENT

PLANNING

BUILDING
&
SAFTEY
CODE

ENFORCEMENT

HOUSING/
CDBG

SUCCESSOR
AGENCY

ADMINISTRATIVE

SERVICES
HUMAN

RESOURCES
RISK

MANAGEMENT

FINANCE/
BUDGET

ACCOUNTING/

TREASURY

BUSINESS

LICENSE

LEGISLATIVE

ADMINISTRATION

ECONOMIC

DEVELOPMENT
PUBLIC

INFORMATION
CITY

RECORDS
AGENDA

MANAGEMENT

ELECTIONS

INFORMATION

TECHNOLOGY
PARKS
&

RECREATION

RECREATION
PARKS

CULTURAL

SERVICES

LIBRARY

AQUATICS
POLICE

DEPARTMENT

ADMINISTRATION
PATROL

DETECTIVES
CANINE

TRAFFIC

CONTROL

DISASTER

PREPAREDNESS

CROSSING
GUARDS
ANIMAL

CONTROL
PUBLIC
WORKS

ADMINISTRATION

ENGINEERING

UTILITIES

STREETS

FACILITY

MAINTENANCE
FLEET

MAINTENANCE

LOS ANGELES

FIRE CONTRACT
City Treasurer
viii

FINANCIAL SECTION

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CLA (CliftonLarsonAllen LLP) is an independent network member of CLA Global. See CLAglobal.com/disclaimer.

CliftonLarsonAllen LLP
CLAconnect.com
(11)
INDEPENDENT AUDITORS’ REPORT
The Honorable Mayor and
Members of City Council
City of Covina
Covina, California
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities, the businesstype activities, each major fund, and the aggregate remaining fund information of the City of Covina, as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the City of Covina’s basic financial statements as listed in the table of contents.

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Covina as of June 30, 2023, 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 Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City of Covina and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Change in Accounting Principle
As discussed in Note 1 to the financial statements, effective July 1, 2022, the City adopted new accounting guidance, GASB No. 96, Subscription-Based Information Technology Arrangements. Our opinions are not modified with respect to these matters.

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

The Honorable Mayor and
Members of City Council
City of Covina
(12)
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 of Covina’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.

Auditors’ 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 auditors’ report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS and Government Auditing Standards, we:
 Exercise professional judgment and maintain professional skepticism throughout the audit.  Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
 Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City of Covina’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 of Covina’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.

The Honorable Mayor and
Members of City Council
City of Covina
(13)
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, the miscellaneous plan schedule of changes in the net pension liability and related ratios and the schedule of contributions, the safety plan schedule of proportionate share of the net pension liability and the schedule of contributions, the other post-employment benefit plan schedule of changes in the net OPEB liability and related ratios and the schedule of contributions - OPEB and the budgetary comparison schedules for the General Fund, Measure W Fund and Park Development Fund be presented to supplement the 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 financial statements in an appropriate operational, economic or historical context. We have applied certain limited procedures to the required supplementary information in accordance with GAAS, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Covina’s basic financial statements. The individual fund schedules and combining financial statements are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with GAAS. In our opinion, the individual fund schedules and combining financial statements 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 report. The other information comprises the introductory and statistical sections but does not include the basic financial statements and our auditors’ report thereon. Our opinions on the basic 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 basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic 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.

The Honorable Mayor and
Members of City Council
City of Covina
(14)
Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated January 17, 2024, on our consideration of the City of Covina’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City of Covina’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City of Covina’s internal control over financial reporting and compliance.

CliftonLarsonAllen LLP
Irvine, California
January 17, 2024

MANAGEMENT’S DISCUSSION AND ANALYSIS
(15)
The following discussion and analysis of the City of Covina’s (City) financial performance provides an overview of the City’s financial activities for the fiscal year ended June 30, 2023. This report is prepared in conjunction with the accompanying transmittal letter and basic financial statements and notes.

FINANCIAL HIGHLIGHTS
 The assets and deferred outflows of the City exceeded its liabilities and deferred inflows at the close of the fiscal year by $125,630,090. The Governmental Activities have a deficit unrestricted net position of $35,785,873. Business-type Activities have unrestricted net position of $14,148,677.  The City’s net position for governmental and business-type activities increased by $9,818,709 or 8.48% from the previous fiscal year.
 The total cost of all City activities was $86,833,573 for the current fiscal year. Net cost of all activities was $37,081,422.
 During the current fiscal year, the City’s governmental activities net revenues exceeded net expenditures by $7,530,335.
 In the City’s business-type activities, net revenues exceeded net expenditures by $2,288,374.  The total fund balance of the City’s governmental funds was $56,508,903 at the close of the fiscal year.

This includes $33,317,806 fund balance of the General Fund, $22,431,703 of which is unassigned and is available for spending at the City’s discretion (see note 14 of Notes to the Financial Statements).  General Fund revenues and other financing sources (uses) exceeded expenditures by $5,918,680 for the fiscal year.

OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements.

The basic financial statements are comprised of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. The report also contains required supplementary information and other supplementary information in addition to the basic financial statements.

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

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

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

Both of the government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) and from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities include General Government, Public Safety, Public Works, Culture and Recreation, Community Development, Transit, Redevelopment and Housing, and Interest on Long-Term Debt. The business-type activities include Water Utility, Environmental Protection, Theater and Sewer.

The government-wide financial statements include not only the City itself (known as the primary government) but also the blending of the legally separate Covina Public Financing Authority, and Covina Housing Authority for which the City is financially accountable. These component units are therefore included as an integral part of the primary government.

MANAGEMENT’S DISCUSSION AND ANALYSIS
(16)
Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided in three categories: governmental funds, proprietary funds, and fiduciary funds.

Governmental Funds
Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating the City’s near-term financing requirements.

The focus of governmental funds is narrower than that of the government-wide financial statements; it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. This will provide a better understanding of the long-term impact of the City’s near-term financing decisions. The Governmental Fund Balance Sheet and the Statement of Revenues, Expenditures, and Changes in Fund Balances provide a reconciliation to facilitate the comparison between governmental funds and governmental activities.

The City maintains twenty-six individual governmental funds. Information is presented separately in the governmental funds Balance Sheet and Statement of Revenues, Expenditures, and Changes in Fund Balances for the General Fund and Other Grants Fund which are considered to be major funds. Information from the other non-major governmental funds is combined into a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements in the supplementary information section of the report.

The City adopts an annual appropriated budget for all of the governmental funds. Budgetary comparison schedules have been provided in the required supplementary information section for the General Fund to demonstrate compliance with the budget. Budgetary comparison schedules have been provided in the supplementary information section for the non-major governmental funds.

Proprietary Funds
The City maintains two different types of proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City’s enterprise funds account for the Water Utility, Environmental Protection, Theater and Sewer. Internal service funds are used to accumulate and allocate costs internally among various City functions. The City’s internal service funds account for Information Technology, Central Equipment, Workers’ Compensation, and Public Liability. These services predominately benefit governmental and have been allocated within the governmental activities in the government-wide financial statements.

Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the Water Utility, Environmental Protection and Sewer. Water and Sewer funds are considered to be major funds of the City.

Conversely, all Central Equipment, Information Technology, Workers’ Compensation, Building Maintenance and Public Liability internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of combining statements in the supplementary information section of this report.

Fiduciary Funds
Fiduciary funds (private purpose trust fund and custodial fund) are used to account for the assets and activities for which the City acts as trustee. The Statement of Fiduciary Net Position reports the assets and liabilities of the fund and the net position is reported as “held in trust for others”.

The government-wide financial statements exclude fiduciary funds.

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

MANAGEMENT’S DISCUSSION AND ANALYSIS
(17)

GOVERNMENT-WIDE FINANCIAL ANALYSIS
Total Net Position
Net position reflects the excess of assets and deferred outflows of resources over liabilities and deferred inflows of resources and may serve over time as a useful indicator of the City’s financial position.

As detailed in the Government-Wide Financial Statements-Statement of Net Position, the City’s total net position for governmental and business-type activities was $125.6 million at the close of the fiscal year, which is an increase of $9.8 million or 8.48% from the previous fiscal year.

The largest portion of that net position, $122 million, is in capital assets (land, buildings and structures, infrastructure, and machinery and equipment) less any related debt outstanding used to acquire those assets.

Capital assets are acquired for the purpose of providing services and infrastructure and are unavailable for future spending. Resources needed to repay related debt outstanding must be provided from other sources before liquidating capital assets to satisfy these liabilities.

Additionally, $25.07 million of the City’s total net position represents resources that are subject to external restrictions such as public safety, transit, and capital projects. Those restrictions are designated by certain federal, state, and local statutes and may not be used by the City for ongoing obligations to citizens and creditors. This leaves the City with a deficit unrestricted net position of $21.6 million.

Governmental Activities
This analysis focuses on the net position and changes in net position of the City’s governmental activities, as presented in the Statement of Net Position.

The net position of the governmental activities represents 60.57% of the City’s total net position. As reflected in the following table, restricted activities net position increased by $9.0 million (56%) from the previous fiscal year. This change reflects a reduction in deferred outflows, which is offset by an increase in current assets and a decrease in long term liabilities, which is discussed in the Outstanding Debt section of this document. This portion of net position is subject to external restrictions relating to public safety, public works, culture and recreation, transit and redevelopment and housing.
2023 2022
Current and other assets $ 89,421,113 $ 70,200,873
Capital assets 94,706,502 90,770,746
Deferred outflows 36,370,048 64,371,978
Total Assets and deferred outflows 220,497,663 225,343,597 Long-term liabilities outstanding 102,426,984 120,818,749 Other liabilities 12,906,748 10,422,112
Deferred inflows 29,072,917 25,542,057
Total Liabilities and deferred inflows 144,406,649 156,782,918 Net position:

Net Investment in capital assets 86,804,262 83,025,178
Restricted 25,072,625 16,074,243
Unrestricted (35,785,873) (30,538,742)
Total net position 76,091,014 $ $ 68,560,679
Governmental Activites Net Position
The following table compares fiscal year changes in revenues and expenses in governmental activities that comprise net position, as found in the Statement of Activities.

MANAGEMENT’S DISCUSSION AND ANALYSIS
(18)
Revenues 2023 2022
Program revenues:

Charges for services 8,951,403 $ 8,723,240 $
Operating grants and contributions 22,818,540 13,635,757 Capital grants and contributions 2,206,174 567,243
General revenues:

Property taxes 16,429,930 15,338,132
General sales tax 11,493,906 11,426,354
Transaction and use tax 8,787,686 8,823,059
Utility users taxes 6,041,869 5,082,103
Other taxes 3,233,932 2,984,040
Investment earnings 712,611 (1,162,614)
Gain/(Loss) on sale of capital assets - 462,215
Miscellaneous and Transfers (1,565,154) 1,230,450
Total Revenues 79,110,897 67,109,979
Expenses
General government 3,792,606 882,985
Public safety 49,481,727 45,084,190
Public works 5,227,281 6,580,415
Culture and recreation 5,974,501 1,600,700
Community development 3,582,145 2,333,315
Transit 1,399,960 862,651
Redevelopment and housing 786,051 183,561
Interest on long term debt 1,336,291 708,305
Total expenses 71,580,562 58,236,122
Increase (Decrease) in net position before transfers
Change in net position 7,530,335 8,873,857
Beginning net position 68,560,679 59,686,822
Ending net position 76,091,014 $ 68,560,679 $
Governmental Activities Change in Net Position
As reflected above, the City’s net revenues exceeded net expenses of governmental activities by $7.5 million.

Compared to the previous year, 2023 revenues show an increase of $12 million while expenses increased by $13.3 million.

The revenue increase in Charges for Services of $228,000 includes increases in Public Safety (court fine revenue increased by $247,400), Culture and Recreation of $47,000 (which continued a post-COVID increase), Community Development of $18,000 and Public Works fee revenue increase of $138,000 predominately due to Impact Fees. These increases were offset by a reduction in late fee revenue, as late fees were unusually high in the prior year due to COVID’s impact on customers’ ability to pay their bills timely.

In addition, Operating Grants increased by $9.1 million. This primarily consists of $640,000 in Public Safety grant increases, $5.7 million in Public Works grants, and a $3 million grant to partially fund the purchase of Covina Theater. Capital Grants increased by $1.6 million, of which $1.2 million is for transportation.

Property tax revenue increased by $1 million, with a slight increase in sales and transaction and use taxes.

Utility users tax increased by $960,000 which reflects higher electricity and heating charges.

MANAGEMENT’S DISCUSSION AND ANALYSIS
(19)
Changes in other revenue sources include a $98,000 increase in transient occupancy taxes, $68,000 increase in business license taxes, investment earnings increase of $1.9 million (reflecting higher interest rates and increased market value of City investments), all of which are offset by a reduction in miscellaneous revenue consisting mostly of a $1.8 million transfer from the General Fund to the Theater Fund.

Net expenses reflected on the Statement of Activities are good indications of the extent to which the services provided by the City are financed from taxes paid by the citizens (general revenues) as opposed to recovering the cost of these services with user fees and other contributions (program revenues). Public Works, Community Development, Transit, and Redevelopment and Housing program revenues were sufficient to cover related expenses. General Government, Public Safety and Culture & Recreation required general revenues to cover activities. Expenses and associated program revenues for each governmental function are reflected on the following table. Increases in staffing costs reflect negotiated wage increases as well as increases to pension liability costs.

As reflected on the following graph, taxes, operating grants and contributions, and charges for services provide 100% of the overall revenue sources of the governmental activities. Taxes include property, sales, utility users and other taxes (transient occupancy, property transfer, business license and franchise). $0
$10,000,000
$20,000,000
$30,000,000
$40,000,000
$50,000,000
$60,000,000
General
Government
Public Safety Public Works Culture &
Recreation
Community
Development
Transit Redevelopment
& Housing
Interest on long
term debt
Expenses and Program Revenues-Governmental Activities
Expenses
Program
Revenues

MANAGEMENT’S DISCUSSION AND ANALYSIS
(20)
The next graph demonstrates governmental activity expenses by function/program. Note that public safety and public works represent 76.43% of the governmental activities’ expenditures; this is consistent with the City’s highest priority of citizen safety and well-being. Culture and recreation represent 8.3% of governmental activities as the City is committed to providing valuable programs to the community.

Charges for
Service

11.32%
Operating Grants
and Contributions

28.84%
Capital Grants and
Contributions

2.79% Property Taxes

20.77%
Sales Taxes

14.53%
Transaction and use
tax

11.11%
Utility Users Taxes

7.64%
Other Taxes

4.09%
Other Revenues
-1.08%
Revenue Sources-Governmental Activities
General government

5.3%
Public safety

69.1%
Public works

7.3%
Culture and recreation

8.3%
Community development

5.0%
Transit

2.0%
Redevelopment and housing

1.1%
Interest on long term debt

1.2%
Functions/Program Expenses-Governmental Activities

MANAGEMENT’S DISCUSSION AND ANALYSIS
(21)
Business-type Activities
The analysis of business-type activities focuses on the net position and changes in net position of the City’s Water Utility, Environmental Protection, Theater, and Sewer functions. The following table summarizes the business-type net position for fiscal years 2022 and 2023. Current year detail can be found in the GovernmentWide Financial Statements, Statement of Net Position. 2023 2022
Current and other assets $ 27,748,627 $ 30,484,093
Capital assets 58,014,711 53,217,973
Deferred outflows of resources 2,970,227 8,441,833
Total assets and deferred outflows 88,733,565 92,143,899 Long-term liabilities outstanding 35,546,789 40,448,021 Other liabilities 2,935,775 1,941,926
Deferred inflows of resources 711,925 2,503,250
Total liabilities 39,194,489 44,893,197
Net position
Net Investment in capital assets 35,390,399 31,942,562
Restricted
Unrestricted 14,148,677 15,308,140
Total net position $ 49,539,076 $ 47,250,702
Business-Type Activities Net Position
The net position of the business-type activities represents 39.43% of the City’s total net position and increased by $2.3 million from the previous year. The decrease in current assets and deferred outflows was offset by the decrease in long-term liabilities (discussed in the Outstanding Debt section of this document) and deferred inflows, resulting in the net position increase. Restricted net position reflects amounts established for emergency needs and bond proceeds which are restricted to capital projects. The revenue and expense activity which generated the change in business type net position is reflected on the following table.

MANAGEMENT’S DISCUSSION AND ANALYSIS
(22)
2023 2022
Revenues
Program Revenues:

Charges for services $ 15,774,880 $ 16,306,957
Operating grants and contributions 1,154 291,824
General Revenues
Investment gain (loss) (129,871) (1,786,768)
Miscellaneous 75,222 -
Total Revenues 15,721,385 14,812,013
Expenses
Water Utility 11,001,848 10,333,944
Environmental Protection 1,455,858 1,341,932
Theater 493,523
Sewer 2,301,782 2,063,288
Total Expenses 15,253,011 13,739,164
Change in net position before transfers 468,374 1,072,849 Transfers in (out) 1,820,000 (1,020,279)
Change in net position $ 2,288,374 $ 52,570
Business-type Change in Net Position
As reflected above, the City’s business-type charges for services revenues exceeded program expenses by $522,000. Total business-type program revenues decreased by $823,000 from the prior fiscal year. This includes a $390,000 decrease in water charges for services and $291,000 decrease in water fund grants which were received in 2022 to assist water customers during the COVID pandemic. Environmental protection service charges were $87,500 more than the prior year, the Theater provided a new revenue source of $33,000, while sewer utility revenue decreased by $262,400, as 2022 had $366,000 in new sewer connection revenue.

General revenues increased by $1.7 million due predominately to increased investment earnings.

Water and Sewer charges for services/operating grants were sufficient to cover both operating and interest expenses for the respective functions during the fiscal year. Environmental Protection’s expenses exceeded charges for services by $226,000, due in part to improvements to the Downtown trash enclosures and Wingate Park cleanup.

Business-type expenses attributable to Water and Sewer utilities increased by $906,000 from the previous fiscal year due in large part to increased pension liabilities.

MANAGEMENT’S DISCUSSION AND ANALYSIS
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Expenses and associated program revenues for each business-type function are reflected on the following table.

As reflected on the following chart, charges for services are the major source of revenue to be used for businesstype activity operating and capital maintenance costs. Water Utility Charges for Services include water sales, service fees, connection fees and other miscellaneous charges. Environmental protection charges include fees for refuse and recycling services, compressed Natural Gas (CNG), and permit fees for storm water and industrial waste. Theater charges for services include fees for facility use, property rental, ticket sales and antenna rental. Sewer charges for services include fees established to recover the cost of operating the sewer system throughout the City. Other revenues reflect investment earnings. $0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
Expenses
Program
Revenues
Expenses and Program Revenues-Business-type Activities
Water Utility Environmental
Protection
Theater Sewer

MANAGEMENT’S DISCUSSION AND ANALYSIS
(24)
The next chart demonstrates business-type activity expenses by function/program. Water comprises the majority of expenses, which includes water source and supply resale, administration, and depreciation.

FINANCIAL ANALYSIS OF THE CITY FUNDS
The City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.

The fund financial statements focus on individual parts of City government, reporting City operations in more detail than government-wide statements.

Governmental Funds
The focus of governmental funds is to provide information on near-term inflows, outflows and balances of spendable resources. This information assesses the City’s financing requirements. Unassigned fund balance is a measure of the City’s net resources available for designation or spending at the end of the fiscal year.

As of June 30, 2023, the City’s governmental funds reported combined fund balances of $56.5 million, an increase of $14.3 million from the prior fiscal year. There is $21.8 million of Unassigned fund balance available for designation and/or future spending at the City’s discretion. The remaining fund balance is nonspendable, restricted, committed or assigned and is not available for spending at the City’s discretion, as detailed in Note 14 of Notes to the Financial Statements.

Water utility
72%
Environmental
protection
10%
Theater
3%
Sewer
15%
Expenses by Function/Program - Business-type Activities

MANAGEMENT’S DISCUSSION AND ANALYSIS
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The following is a summary of fund balances of the governmental funds for fiscal years 2018-2023:
*Certain balances have been restated due to prior period adjustments.

The General Fund is the chief operating fund of the City. As displayed in the Governmental Fund Financial Statements-Balance Sheet, the fund balance of the General Fund at the end of Fiscal Year 2022-23 was $33.3 million and is classified as follows: $99,500 non-spendable, $10.4 million committed, $363,000 restricted, $1,100 assigned, and $22.4 million unassigned. In keeping with the City Council’s Reserve Policy, the committed fund balance meets the City’s Emergency Contingency Reserve requirement of 20% of General Fund expenditures. Additionally, the unassigned fund balance in the General Fund represents 24.3% of total General Fund expenditures.

The fund balance of the General Fund increased by $5.9 million during the fiscal year. While revenues increased by $4 million, expenditures decreased by $47 million. The reduction reflects $47.8 million pension expenditures recognized in 2022 as a result of the issuance of Pension Obligation Bonds, which was offset by $52 million in bond debt proceeds.

Proprietary Funds
The City’s proprietary funds financial statements provide the same type of information found in the government-wide statements, but provide detail specific to the City’s water utility, environmental, theater and sewer enterprises.

Net position of the Water Utility fund is $38.1 million, a increase of $105,610 from the prior fiscal year. Of that, $12.3 million is unrestricted. Environmental Protection and Theater have combined net positions of $3 million with unrestricted net position decreasing to -$1.7 million from $478,000 in the prior year. The net position of the Sewer fund increased to $9.9 million from $9.2 million in the prior year. Of that, $5.1 million is unrestricted. Other factors concerning the finances of these three funds are addressed in the discussion of the business-type activities.

General Fund Budgetary Highlights
Appropriation differences between the original budget and the final budget are $5.6 million which represents a 10.27% increase. The increase reflects additional funding appropriated for various projects including Covina Recreation Village ($3.8 million) and a transfer to the Theater fund ($1.8 million). Mid-year budget adjustments include increases pertaining to utilities, conferences, training, IT expenditures, the establishment of the Facility Maintenance fund and various professional services. The increases were offset by a reduction in expenses that were instead charged directly to the ARPA fund.

MANAGEMENT’S DISCUSSION AND ANALYSIS
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CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
The City’s investment in capital assets for governmental and business-type activities as of June 30, 2023, is $152.7 million (net of accumulated depreciation). Capital assets include buildings and structures, improvements other than buildings, domain infrastructure, water system infrastructure, sanitary sewer infrastructure, machinery and equipment, and construction in progress. The following table is a summary of capital assets (net of accumulated depreciation) at June 30, 2023 and 2022.

Total capital assets, net of depreciation, increased from the prior year by $8.7 million. This is due largely to the purchase of the Covina Theater (6.3 million). Note 9 of Notes to the Financial Statements provide additional capital asset information.

Debt Administration
At the end of the fiscal year, the City had total long-term debt outstanding of $138 million. This includes notes, leases, subscriptions, revenue bonds payable, other post-employment benefits and net pension liabilities. On the following page is a summary of the outstanding debt (net of unamortized charges) at June 30, 2023 and 2022.
2023 2022
Governmental activities
Land $12,335,553 $12,335,553
Buildings and structures 28,502,366 26,145,088
Improvements other than buildings 8,259,225 8,703,523
Public domain infrastructure 37,126,099 35,158,532
Sanitary sewer infrastructure 1,648,080 1,712,817
Machinery and equipment 2,744,627 3,126,238
Construction in progress 3,623,307 3,349,224
Right to use assets 467,245 239,771
Total governmental activities $94,706,502 $90,770,746
Business-type activities
Land 377,408 377,408
Buildings and structures 12,050,600 9,007,187
Improvements other than buildings 2,417,779 1,466,540
Water system infrastructure 41,384,831 39,503,830
Machinery and equipment 1,654,758 1,690,145
Construction in progress 118,951 1,159,018
Right to use assets 10,384 13,845
Total business-type activities 58,014,711 53,217,973
Total capital assets $152,721,213 $143,988,719
Capital Assets
(net of depreciation)

MANAGEMENT’S DISCUSSION AND ANALYSIS
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2023 2022
Governmental activities
Compensated absences $ 4,414,980 $ 4,031,459
Claims and judgments 7,920,000 7,718,000
Certificates of participation payable (COP) 4,659,950 4,876,509 Pension Obligation Bonds 52,529,291 54,939,654
Lease Payable 153,335 227,389
Subscriptions Payable 305,403 -
Section 108 loan 1,875,000 2,000,000
Postemployment benefit obligation 4,846,003 4,510,568
Net pension liability 42,515,170 25,723,022
Total governmental activities 102,426,984 120,818,749
Business-type activities
Compensated absences 643,568 608,089
Capital lease payable 10,531 13,934
Water Installment Agreement 15,991,560 17,132,316
Revenue bonds payable 6,515,000 7,370,000
Pension Obligation Bonds 7,510,709 7,855,346
Postemployment benefit obligation 1,708,693 1,587,567
Net pension liability 5,880,768 3,166,728
Total business-type activities 35,546,789 40,448,020
Total outstanding debt $ 161,266,769 137,973,773 $
Outstanding Debt
(net of unamortized charges)
The decrease in long-term debt from 2022 to 2023 in governmental activities of $18.4 million predominately due to the reduction in net pension liability. Business-type activities liabilities increased by $4.9 also due to the reduction in net pension liability.

The Covina Public Financing Authority maintains an “AA-” S&P Global rating for the wastewater revenue bonds.

Additional information on the City’s long-term debt and other long-term liabilities can be found in Note 13, Note 10, and Note 17 of the Notes to the Financial Statements.

ECONOMIC FACTORS AND NEXT YEAR’S BUDGET
The City applied sound budgeting practices and considered new residential and retail development in formulating a balanced budget for Fiscal Year 2022-23. Prudent, cost-saving budget practices, including proactive debt management, will continue into future years.

The conservative budget policies put in place by Council direction, emphasized by the City Manager and supported by staff, as well as the voter approved transaction and use tax measure have enabled the City of Covina to remain fiscally solvent. As reflected on Note 14 of Notes to the Financial Statements, the City’s emergency contingency reserve meets the 20% of General Fund expenditures requirements established as the Council’s goal set forth in the City’s budget policy.

The City continues to be cautiously conservative in revenue and expenditure projections. With that in mind, the Fiscal Year 2023-24 budget projects an overall increase in revenues in comparison to Fiscal Year 2022-23.

Department expenditure budgets reflect slight increases attributed to increases in negotiated MOU adjustments, as well as the increase in the City's Fire Contract with Los Angeles County.

In total, the City has been awarded approximately $11.4 million in ARPA funds. The monies must be obligated for use by December 31, 2024 and fully expended by December 31, 2026. The City Council has allocated the funds to programs supporting the public health response to COVID and addressing related negative economic impacts.

MANAGEMENT’S DISCUSSION AND ANALYSIS
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REQUESTS FOR INFORMATION
This financial report is intended to provide a general overview of the City’s finances. A copy of the financial report is available for review at the Covina Public Library, 234 North Second Avenue, Covina, California, 91723. You may also find a copy of the report online at www.covinaca.gov. Questions concerning any of the information provided in this report should be addressed to City of Covina Finance Division, 125 East College Street, Covina, California, 91723.

FINANCIAL STATEMENTS

THIS PAGE INTENTIONALLY LEFT BLANK

CITY OF COVINA

STATEMENT OF NET POSITION
JUNE 30, 2023
See accompanying Notes to Financial Statements.
(31)
Governmental Business-Type
Activities Activities Total
ASSETS
Cash and Investments 79,899,810 $ 25,745,439 $ 105,645,249 $ Cash and Investments - Restricted - 1,149,437 1,149,437 Cash With Fiscal Agent - 291 291
Receivables:

Accounts, Net 1,915,975 534,150 2,450,125
Due from Other Governments 5,820,641 63,181 5,883,822
Other 23,177 691,645 714,822
Loans and Notes 252,505 - 252,505
Internal Balances 1,508,060 - (1,508,060)
Leases 277,739 456,532 734,271
Inventories 73,095 39,492 112,587
Prepaid Items and Deposits 217,987 8,644 226,631
Capital Assets:

Not Being Depreciated 15,958,860 496,359 16,455,219
Being Depreciated, Net 78,747,642 57,518,352 136,265,994 Total Assets 184,127,615 85,763,338 269,890,953

DEFERRED OUTFLOWS OF RESOURCES
Deferred Amount on Refunding 74,421 - 74,421
OPEB Related 600,827 1,659,981 2,260,808
Pension Related 2,294,979 34,710,067 37,005,046
Total Deferred Outflows of Resources 36,370,048 2,970,227 39,340,275

LIABILITIES
Accounts Payable 1,109,165 2,243,703 3,352,868
Accrued Liabilities 1,092,051 554,191 1,646,242
Deposits Payable 1,035,141 1,128,503 2,163,644
Interest Payable 210,880 57,481 268,361
Due to Other Governments 252,505 - 252,505
Unearned Revenue 8,132,505 26,398 8,158,903
Noncurrent Liabilities:

Due Within One Year 2,614,034 5,991,665 8,605,699
Due in More Than One Year:

Long-Term Liabilities 65,866,294 28,057,334 93,923,628
Net Other Postemployment Benefit Liability 1,708,693 4,846,003 6,554,696 Net Pension Liability 3,166,728 25,723,022 28,889,750
Total Liabilities 115,333,732 38,482,564 153,816,296

DEFERRED INFLOWS OF RESOURCES
Deferred Amount on Refunding 113,443 - 113,443
Deferred Inflow Leases 451,369 274,385 725,754
OPEB Related 310,606 833,508 1,144,114
Pension Related 13,491 27,788,040 27,801,531
Total Deferred Inflows of Resources 29,072,917 711,925 29,784,842

NET POSITION
Net Investment in Capital Assets 86,804,262 35,390,399 122,194,661 Restricted for:

Public Safety - 497,622 497,622
Public Works - 11,635,216 11,635,216
Community Development 396,861 - 396,861
Culture and Recreation 1,323,579 - 1,323,579
Transit - 7,784,440 7,784,440
Redevelopment and Housing - 3,434,907 3,434,907
Unrestricted (Deficit) 14,148,677 (35,785,873) (21,637,196) Total Net Position 76,091,014 $ 49,539,076 $ 125,630,090 $

CITY OF COVINA

STATEMENT OF ACTIVITIES
YEAR ENDED JUNE 30, 2023
See accompanying Notes to Financial Statements.
(32)
Program Revenues
Operating Capital
Charges for Grants and Grants and
Functions/Programs Expenses Services Contributions Contributions

GOVERNMENTAL ACTIVITIES
General Government 3,792,606 $ 2,328,058 $ 79,896 $ - $ Public Safety 49,481,727 2,283,281 4,662,494 -
Public Works 5,227,281 1,108,388 9,865,306 174,960
Culture and Recreation 5,974,501 734,037 161,407 106,421 Community Development 3,582,145 2,063,716 3,557,675 113,374 Transit 1,399,960 144,349 4,088,667 1,811,419
Redevelopment and Housing 786,051 289,574 403,095 -
Interest on Long-Term Debt 1,336,291 - - -
Total Governmental Activities 71,580,562 8,951,403 22,818,540 2,206,174

BUSINESS-TYPE ACTIVITIES
Water Utility 11,001,848 11,469,148 1,154 -
Environmental Protection 1,455,858 1,229,521 - -
Theater 493,523 33,198 - -
Sewer Utility 2,301,782 3,043,013 - -
Total Business-Type Activities 15,253,011 15,774,880 1,154 - Total 86,833,573 $ 24,726,283 $ 22,819,694 $ 2,206,174 $

GENERAL REVENUES
Taxes:

Property Taxes (Net of Pass-Through Payments)
General Sales Tax
Transaction and Use Tax
Transient Occupancy Taxes
Property Transfer Taxes
Business License Taxes
Utility Users Taxes
Franchise Taxes
Investment Earnings (Loss)
Miscellaneous
Transfers
Total General Revenues

CHANGE IN NET POSITION
Net Position - Beginning of Year

NET POSITION - END OF YEAR

CITY OF COVINA

STATEMENT OF ACTIVITIES (CONTINUED)
YEAR ENDED JUNE 30, 2023
See accompanying Notes to Financial Statements.
(33)
Net (Expense) Revenue and
Changes in Net Assets
Governmental Business-Type
Activities Activities Total
$ - (1,384,652) $ (1,384,652) $
- (42,535,952) (42,535,952)
- 5,921,373 5,921,373
- (4,972,636) (4,972,636)
- 2,152,620 2,152,620
- 4,644,475 4,644,475
- (93,382) (93,382)
- (1,336,291) (1,336,291)
- (37,604,445) (37,604,445)
468,454 - 468,454
(226,337) - (226,337)
(460,325) - (460,325)
741,231 - 741,231
523,023 - 523,023
523,023 (37,604,445) (37,081,422)
- 16,429,930 16,429,930
- 11,493,906 11,493,906
- 8,787,686 8,787,686
- 193,649 193,649
- 214,879 214,879
- 431,423 431,423
- 6,041,869 6,041,869
- 2,393,981 2,393,981
(129,871) 712,611 582,740
75,222 254,846 330,068
1,820,000 (1,820,000) -
1,765,351 45,134,780 46,900,131
2,288,374 7,530,335 9,818,709
47,250,702 68,560,679 115,811,381
$ 49,539,076 76,091,014 $ 125,630,090 $

CITY OF COVINA

BALANCE SHEET

GOVERNMENTAL FUNDS
JUNE 30, 2023
See accompanying Notes to Financial Statements.
(34)
Other Total
General Park Governmental Governmental
Fund Measure W ARPA Development Funds Funds
ASSETS
Cash and Investments 30,427,350 $ 8,790,682 $ 4,786,016 $ 2,786,586 $ 15,864,522 $ 62,655,156 $ Cash and Investments With Fiscal Agent - - - - 291 291
Receivables:

Interest 306,716 - - - 6 306,722
Utility User Tax - 384,923 - - - 384,923
Accounts 405,199 - - - 55,036 460,235
Leases 434,991 - - - 21,541 456,532
Loans - - - - 252,505 252,505
Due from Other Governments 4,272,820 154 - 169,145 1,378,053 5,820,172 Due from Other Funds 775,873 - - - - 775,873
Prepaid Items 99,526 - 91,667 - 8,445 199,638
Total Assets 37,107,398 $ 8,790,836 $ 4,877,683 $ 2,955,731 $ 17,580,399 $ 71,312,047 $

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES

LIABILITIES
Accounts Payable 756,119 $ 39,210 $ 155,004 $ 103,041 $ 1,047,462 $ 2,100,836 $ Accrued Liabilities 1,036,567 - - - 55,484 1,092,051
Deposits Payable 1,082,619 - - - 45,884 1,128,503
Due to Other Funds - - - - 775,873 775,873
Due to Other Governments - - - - 252,505 252,505
Unearned Revenue 455,443 - 4,722,679 2,688,510 265,873 8,132,505 Total Liabilities 3,330,748 39,210 4,877,683 2,791,551 2,443,081 13,482,273

DEFERRED INFLOWS OF RESOURCES
Deferred Inflows - Leases 429,899 - - - 21,470 451,369
Unavailable Revenue 28,945 - - 169,144 671,413 869,502
Total Deferred Inflows of Resources 458,844 - - 169,144 692,883 1,320,871

FUND BALANCES
Nonspendable 99,526 - - - 8,445 107,971
Committed 10,422,833 - - - - 10,422,833
Restricted 362,653 8,751,626 - - 15,088,844 24,203,123
Assigned 1,091 - - - - 1,091
Unassigned 22,431,703 - - (4,964) 21,773,885 (652,854)
Total Fund Balances (Deficits) 8,751,626 33,317,806 - 14,444,435 (4,964) 56,508,903 Total Liabilities, Deferred Inflows of
Resources, and Fund Balances 37,107,398 $ 8,790,836 $ 4,877,683 $ 2,955,731 $ 17,580,399 $ 71,312,047 $

CITY OF COVINA

RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET

TO THE STATEMENT OF NET POSITION
JUNE 30, 2023
See accompanying Notes to Financial Statements.
(35)
Total Fund Balances for Governmental Funds $ 56,508,903 Amounts reported for governmental activities in the Statement of Net Position are different because:

Capital assets, net of accumulated depreciation, used in governmental activities are not current financial resources and, therefore are not reported in the fund financial statements. This amount does not include $1,332,011 of internal service funds net capital assets.

Capital Assets not Being Depreciated 15,958,860 $
Capital Assets Being Depreciated 206,438,482
Accumulated Depreciation (129,022,851) 93,374,491
Long-term liabilities applicable to the City’s governmental activities are not due and payable in the current period and accordingly are not reported as fund liabilities.

All liabilities, both current and long-term, are reported in the Statement of Net Position. Balances at June 30, 2023 are:

Loan Payable (1,875,000)
Bonds Payable (4,475,000)
Pension Obligation Bonds (50,336,442)
Bond Premium (184,950)
Leases (50,800)
Subscriptions (305,403)
Compensated Absences (4,140,681)
Accrued Interest (61,405,360) (37,084)
Pension and OPEB related debt applicable to the City’s governmental activities are not due and payable in the current period and accordingly are not reported as fund liabilities. Deferred outflows of resources and deferred inflows of resources related to pensions and OPEB are only reported in the Statement of Net Position as the changes in these amounts affect only the government-wide statements for governmental activities.

Deferred Outflows of Resources - Pension Related 33,837,231 Deferred Inflows of Resources - Pension Related (27,782,910) Net Pension Liability (24,518,639)
Deferred Outflows of Resources - OPEB Related 1,463,956 Deferred Inflows of Resources - OPEB Related (738,798)
Net OPEB Liability (22,024,741) (4,285,581)
Internal Service funds are used by management to charge the costs of certain activities involved in rendering services to departments within the City. The assets and liabilities of the internal service funds are included in governmental in the Statement of Net Position. 8,768,219
Receivables that are measurable but not available are recorded as deferred inflows of resources under the modified accrual basis of accounting. 869,502 Net Position of Governmental Activities $ 76,091,014

CITY OF COVINA

STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES

GOVERNMENTAL FUNDS
YEAR ENDED JUNE 30, 2023
See accompanying Notes to Financial Statements.
(36)
Other Total
General Park Governmental Governmental
Fund Measure W ARPA Development Funds Funds

REVENUES
Property Taxes 16,235,596 $ - $ - $ - $ 184,002 $ 16,419,598 $ Sales Tax, Intergovernmental 20,281,592 - - - - 20,281,592 Transient Occupancy Taxes 193,649 - - - - 193,649
Property Transfer Taxes 214,879 - - - - 214,879
Business License Taxes 430,348 - - - 1,090 431,438
Utility User Taxes 6,041,869 - - - - 6,041,869
Franchise Taxes 2,393,981 - - - - 2,393,981
Licenses and Permits 1,565,187 - - - - 1,565,187
Intergovernmental 959,936 7,362,948 3,449,428 304,422 12,461,069 24,537,803 Charges for Services 4,752,066 - - - 298,835 5,050,901
Fines and Forfeits 1,340,191 - - - - 1,340,191
Special Assessments - - - - 880,496 880,496
Investment Earnings 367,176 107,610 - - 262,398 737,184 Other 766,551 - - - 48,008 814,559
Total Revenues 55,543,021 7,470,558 3,449,428 304,422 14,135,898 80,903,327

EXPENDITURES
Current:

General Government 2,599,832 - - - - 2,599,832
Public Safety - 29,910,759 3,002,355 - 3,464,619 36,377,733 Public Works 2,359,745 - - - 1,779,213 4,138,958
Culture and Recreation 4,493,659 - 22,082 - 72,130 4,587,871 Community Development 2,876,568 - 353,344 - - 3,229,912 Transit - - - - 967,643 967,643
Redevelopment and Housing - - - - 719,415 719,415
Capital Outlay 420,895 - 71,647 810,581 5,637,635 6,940,758 Debt Service:

Principal Retirement 2,309,742 - - - 330,000 2,639,742
Interest and Fiscal Charges 1,124,775 - - - 225,256 1,350,031 Total Expenditures 45,675,080 420,895 3,449,428 810,581 13,195,911 63,551,895

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 7,049,663 9,867,941 - 939,987 (506,159) 17,351,432

OTHER FINANCING SOURCES (USES)
Transfers In 300,000 - - 716,512 514,568 1,531,080
Transfers Out - (4,251,080) - - (300,000) (4,551,080)
Lease Proceeds 1,819 - - - - 1,819
Total Other Financing
Sources (Uses) - (3,949,261) - 716,512 214,568 (3,018,181) NET CHANGE IN FUND BALANCES 7,049,663 5,918,680 - 210,353 1,154,555 14,333,251 Fund Balances (Deficits) - Beginning of Year 27,399,126 1,701,963 - 13,289,880 (215,317) 42,175,652

FUND BALANCES (DEFICITS) -
END OF YEAR $ 8,751,626 33,317,806 $ - $ (4,964) $ 14,444,435 $ 56,508,903 $

CITY OF COVINA

RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES,

EXPENDITURES, AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2023
See accompanying Notes to Financial Statements.
(37)
Net Change in Fund Balances - Total Governmental Funds 14,333,251 $ Amounts reported for governmental activities in the Statement of Activities are different because:

Governmental funds report capital outlays as expenditures and do not include capital contributions. However, in the Statement of Activities, the costs of those assets are allocated over their estimated useful lives as depreciation expense and capital contributions are recognized as revenue. This is the amount by which capital outlay exceeded depreciation expense in the current period and the amount of capital contributions received.

Capital Outlay $ 9,006,876
Deletions (52,877)
Depreciation Expense 3,391,565 (5,562,434)
The issuance of long-term debt provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds report the effect of premiums, discounts and similar items when the debt is first issued, whereas these amounts are deferred and amortized in the Statement of Activities. These amounts are the net effect of these differences in the treatment of long-term debt and related items.

Leases 30,662
Subscriptions 180,166
Principal Payments 2,639,742
Amortization Premium on Bonds 11,559 2,862,129
Pension expenditures reported in the governmental funds includes the annual required contributions. In the Statement of Activities, pension expense includes the change in the net pension liability, and related changes in pension amounts for deferred outflows of resources and deferred inflows of resources. (14,842,008) Other postemployment benefit expenditures reported in the governmental funds includes payment of premiums for the current year. In the Statement of Activities, OPEB expense includes the change in the net other postemployment benefit liability and OPEB related deferred inflows of resources. (55,302) Accrued interest is interest due on long-term debt payable. This is the net change in accrued interest for the current period.

Changes in Interest Payable for the Current Year 2,181
Internal service funds are used by management to charge costs of activities involved in rendering services to departments within the City. The changes in net position of the 2,166,971 internal service funds are included in the Statement of Activities.

Compensated absences are not reported in the governmental funds until such amounts become due and payable. (356,022)
Certain revenues in the governmental funds are deferred because they are not collected within the prescribed time period after year-end. However, the revenues are included on the accrual basis used in the government-wide statements. This amount represents the change during the fiscal year. 27,570
Change in Net Position of Governmental Activities 7,530,335 $

CITY OF COVINA

STATEMENT OF NET POSITION

PROPRIETARY FUNDS
JUNE 30, 2023
See accompanying Notes to Financial Statements.
(38)
Governmental
Activities
Other Total Internal
Enterprise Enterprise Service
ASSETS Water Utility Sewer Funds Funds Funds

CURRENT ASSETS
Cash and Investments 19,667,285 $ 3,488,771 $ 2,589,383 $ 25,745,439 $ 17,244,654 $ Cash and Investments Restricted - 1,149,437 - 1,149,437 - Accounts Receivable, Net 1,614,683 - 301,292 1,915,975 73,915 Interest Receivable - 22,711 466 23,177 -
Lease Receivable - - 68,198 68,198 -
Due from Other Governments - 63,181 - 63,181 469
Prepaid Items 285 - 8,359 8,644 18,349
Inventories 73,095 - - 73,095 39,492
Total Current Assets 21,355,348 4,724,100 2,967,698 29,047,146 17,376,879

NONCURRENT ASSETS
Advance to Theater Fund - 2,750,000 - 2,750,000 -
Lease Receivable - - 209,541 209,541 -
Capital Assets:

Capital Assets, not Depreciated 452,488 26,175 17,696 496,359 - Capital Assets, Depreciated, Net 41,334,017 11,441,330 4,743,005 57,518,352 1,332,011 Total Noncurrent Assets 41,786,505 14,217,505 4,970,242 60,974,252 1,332,011 Total Assets 63,141,853 18,941,605 7,937,940 90,021,398 18,708,890

DEFERRED OUTFLOWS OF RESOURCES
Deferred Amount on Refunding 74,421 - - 74,421 -
Deferred Amount on OPEB Plans 426,571 103,929 70,327 600,827 196,025 Deferred Amount on Pension Plans 1,538,060 483,563 273,356 2,294,979 872,836 Total Deferred Outflows of Resources 1,964,631 661,913 343,683 2,970,227 1,068,861

LIABILITIES

CURRENT LIABILITIES
Accounts Payable 641,481 326,293 141,391 1,109,165 142,867 Accrued Liabilities 554,191 - - 554,191 -
Deposits Payable 533,951 - 501,190 1,035,141 -
Interest Payable 125,078 55,439 30,363 210,880 20,397
Unearned Revenue 26,398 - - 26,398 -
Compensated Absences 151,190 45,127 33,735 230,052 88,052 Lease Payable 3,456 - - 3,456 40,293
Claims Payable - - - - 1,738,000
Pension Obligation Bonds Payable 231,591 77,278 38,269 347,138 101,352 Bonds Payable 1,163,388 870,000 - 2,033,388 -
Total Current Liabilities 3,430,724 1,374,137 744,948 5,549,809 2,130,961

NONCURRENT LIABILITIES
Compensated Absences 267,930 91,340 54,246 413,516 186,247 Advance from Sewer Fund - - 2,750,000 2,750,000 -
Lease Payable 7,075 - - 7,075 62,242
Pension Bonds Payable 5,009,031 1,672,014 789,725 7,470,770 2,091,497 Bonds Payable 14,598,251 5,567,722 - 20,165,973 -
Claims Payable - - - - 6,182,000
Net OPEB Liability 263,943 1,241,794 202,956 1,708,693 560,422 Net Pension Liability 667,245 2,122,293 377,190 3,166,728 1,204,383 Total Noncurrent Liabilities 23,246,374 8,262,264 4,174,117 35,682,755 10,286,791 Total Liabilities 26,677,098 9,636,401 4,919,065 41,232,564 12,417,752

DEFERRED INFLOWS OF RESOURCES
Deferred Amounts on OPEB Plans 217,117 57,083 36,406 310,606 94,710 Deferred Amounts on Pension Plans 9,041 2,843 1,607 13,491 5,130 Deferred Amounts on Leases - - 274,385 274,385 -
Deferred Amount on Refunding - 113,443 - 113,443 -
Total Deferred Inflows of Resources 339,601 59,926 312,398 711,925 99,840

NET POSITION
Net Investment in Capital Assets 25,793,259 4,841,224 4,755,916 35,390,399 1,193,739 Unrestricted 12,296,526 5,065,967 15,656,737 (1,705,756) 6,066,420 Total Net Position 38,089,785 $ 9,907,191 $ 3,050,160 $ 51,047,136 7,260,159 $ Some amounts reported for business-type activities in the Statement of Activities are different to reflect the consolidation of internal service fund activities related to enterprise funds (1,508,060) Net Position of Business-Type Activities $ 49,539,076
Business-Type Activities

CITY OF COVINA

STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION

PROPRIETARY FUNDS
YEAR ENDED JUNE 30, 2023
See accompanying Notes to Financial Statements.
(39)
Governmental
Activities
Other Total Internal
Enterprise Enterprise Service
Water Utility Sewer Funds Funds Funds

OPERATING REVENUES
Water Sales 11,043,023 $ - $ - $ 11,043,023 $ - $
Charges for Services and Motor
Pool Charges - - 33,198 33,198 7,586,166
Environmental Fees - - 1,230,334 1,230,334 -
Sewer Fees - 2,894,697 - 2,894,697 -
Fire Line Fees 358,099 - - 358,099 -
Total Operating Revenues 11,401,122 2,894,697 1,263,532 15,559,351 7,586,166

OPERATING EXPENSES
General and Administrative 2,426,168 1,731,926 1,097,801 5,255,895 4,762,459 Vehicle and Equipment Operation - - - - 1,272,311
Utility Billing 175,436 - - 175,436 -
Customer Service 257,203 - - 257,203 -
Sales Promotion 414 - - 414 -
Source and Supply 3,376,108 - - 3,376,108 -
Production and Storage 1,380,661 - - 1,380,661 -
Transmission and Distribution 1,374,982 - - 1,374,982 - Street Sweeping - - 151,150 151,150 -
Environmental Services - - 200,472 200,472 -
Industrial Waste - - 21,221 21,221 -
Waste Management - - 339,611 339,611 -
Depreciation 1,579,745 356,327 100,589 2,036,661 315,804 Total Operating Expenses 10,570,717 2,088,253 1,910,844 14,569,814 6,350,574 OPERATING INCOME (LOSS) 806,444 830,405 (647,312) 989,537 1,235,592

NONOPERATING REVENUES (EXPENSES)
Investment Income (Loss) (294,818) 108,093 56,854 (129,871) - Interest Expense (431,131) (213,529) (41,085) (685,745) (50,544) Rental Income - - 75,222 75,222 -
Intergovernmental 1,154 - - 1,154 -
Total Nonoperating Revenues
(Expenses) (724,795) (105,436) 90,991 (739,240) (50,544) INCOME (LOSS) BEFORE TRANSFERS 701,008 105,610 (556,321) 250,297 1,185,048

TRANSFERS
Transfers In - - 1,820,000 1,820,000 1,200,000
Total Transfers - - 1,820,000 1,820,000 1,200,000
CHANGE IN NET POSITION 701,008 105,610 1,263,679 2,070,297 2,385,048 Net Position - Beginning of Year 37,984,175 9,206,183 1,786,481 4,875,111 NET POSITION - END OF YEAR $ 9,907,191 38,089,785 $ 3,050,160 $ 7,260,159 $ Some amounts reported for business-type activities in the Statements of Activities are different to reflect the consolidation of internal service fund activities related to enterprise funds 218,077 $ 2,288,374
Business-Type Activities

CITY OF COVINA

STATEMENT OF CASH FLOWS

PROPRIETARY FUNDS
YEAR ENDED JUNE 30, 2023
See accompanying Notes to Financial Statements.
(40)
Governmental
Activities
Other Total Internal
Enterprise Enterprise Service
Water Utility Sewer Funds Funds Funds

CASH FLOWS FROM OPERATING ACTIVITIES
Cash Received from customers 11,707,833 $ 2,919,650 $ 1,196,798 $ 15,824,281 $ - $ Cash Received from User Departments - - - 7,607,113
Cash Payments to Suppliers of Goods
and Services (4,797,614) (425,826) (1,158,305) (6,381,745) (3,975,328) Cash Payments to Employees for Services (3,006,006) (862,063) (502,864) (4,370,933) (1,493,732) Net Cash Used by
Operating Activities 3,904,213 1,631,761 5,071,603 (464,371) 2,138,053

CASH FLOWS FROM NONCAPITAL

FINANCING ACTIVITIES
Cash Received from Other Funds - - 1,820,000 1,820,000 1,200,000 Advance Received Other Funds - - 2,750,000 2,750,000 -
Advance Paid to Other Funds - - (2,750,000) - (2,750,000) Net Cash Provided by Noncapital
Financing Activities - (2,750,000) 4,570,000 1,820,000 1,200,000

CASH FLOWS FROM CAPITAL AND

RELATED FINANCING ACTIVITIES
Acquisition of Capital Assets (2,281,003) (999,186) (3,553,211) (6,833,400) (374,426) Intergovernmental grants 1,154 - - 1,154 -
Cash Received - Leases - 110,357 110,357 -
Principal Paid - Leases - (3,402) - (3,402) (43,392)
Principal Paid (1,370,677) (931,722) (37,994) (2,340,393) (100,621) Interest and Debt Issuance Costs (443,522) (228,677) (18,421) (690,620) (50,727) Net Cash Used by Capital and
Related Financing Activities (4,097,450) (2,159,585) (3,499,269) (9,756,304) (569,166)

CASH FLOWS FROM INVESTING ACTIVITIES
Investment Income (Loss) 108,093 (294,818) 56,388 - (130,337)

NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS (488,055) 662,748 (3,169,731) 2,768,887 (2,995,038) Cash and Cash Equivalents -
Beginning of Year 7,807,939 20,155,340 1,926,635 29,889,914 14,475,767

CASH AND CASH EQUIVALENTS -
END OF YEAR $ 4,638,208 19,667,285 $ 2,589,383 $ 26,894,876 $ 17,244,654 $ Business-Type Activities

CITY OF COVINA

STATEMENT OF CASH FLOWS (CONTINUED)

PROPRIETARY FUNDS
YEAR ENDED JUNE 30, 2023
See accompanying Notes to Financial Statements.
(41)
Governmental
Activities
Other Total Internal
Enterprise Enterprise Service
Water Utility Sewer Funds Funds Funds

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

OPERATING ACTIVITIES
Operating Income (Loss) $ 806,444 830,405 $ $ 989,537 (647,312) $ 1,235,592 $ Adjustments to Reconcile Operating Income (Loss)
to Net Cash Used by Operating Activities:

Depreciation 1,579,745 356,327 100,589 2,036,661 315,804 Changes in Operating Assets, Deferred Outflows
of Resources, Liabilities, and Deferred Inflows of
Resources:
(Increase) Decrease in Accounts Receivable 306,711 - 239,977 (66,734) 21,416 (Increase) Decrease in Due from Other
Governments - 24,953 - 24,953 (469)
(Increase) Decrease in Inventory - (7,369) - 11,713 (7,369) (Increase) Decrease in Prepaid Items 2,270 - 1,860 (410) 6,495 (Increase) Decrease in Deferred Outflows
of Resources on OPEB Plan (59,173) (18,604) (10,517) (88,294) (33,581) (Increase) Decrease in Deferred Outflows
of Resources on Pension Plans 3,652,496 1,165,906 729,430 5,547,832 1,317,910 Increase (Decrease) in Accounts Payable 132,331 264,289 71,446 468,066 322 Increase (Decrease) in Accrued Liabilities 450,317 - - 450,317 - Increase (Decrease) in Deposits Payable 35,730 - 17,324 53,054 - Increase (Decrease) in Unearned Revenue 10,161 - - 10,161 - (Increase) Decrease in Deferred Inflows
of Resources of OPEB Plan (6,379) (2,006) (1,133) (9,518) (3,225) (Increase) Decrease in Deferred Inflows
of Resources Pension Plans (1,356,434) (431,081) (262,195) (2,049,710) (571,187) Increase (Decrease) in Deferred Inflows
of Resources Leases - - (38,489) (38,489)
Increase (Decrease) in Compensated Absences 21,962 9,586 3,931 35,479 27,499 Increase (Decrease) in Net OPEB Liability 25,522 81,177 14,427 121,126 46,067 Increase (Decrease) in Net Pension Liability (1,769,737) (569,575) (374,728) (2,714,040) (438,303) Increase (Decrease) in Claims Payable - - - - 202,000
Net Cash Provided (Used) by
Operating Activities 3,904,213 $ 1,631,761 $ (464,371) $ 5,071,603 $ 2,138,053 $ Business-Type Activities

CITY OF COVINA

STATEMENT OF FIDUCIARY NET POSITION

FIDUCIARY FUNDS
JUNE 30, 2023
See accompanying Notes to Financial Statements.
(42)
Private- Custodial
Purpose Trust Funds
ASSETS
Cash and Investments 862,722 $ 250 $
Cash and Investments - Fiscal Agent 3,116,602 -
Accounts Receivable - 753
Interest Receivable 4,224 -
Prepaid Items 1,253 -
Land Held for Resale 2,391,502 -
Capital Assets, not Being Depreciated 148,765 -
Total Assets 6,525,068 1,003

DEFERRED OUTFLOWS OF RESOURCES
Deferred Amount on Refunding 10,602 -
Total Deferred Outflows of Resources 10,602 -

LIABILITIES
Accounts Payable and Accrued Liabilities 17,207 1,003
Accrued Liabilities - -
Interest Payable 11,824 -
Noncurrent Liabilities:

Due Within One Year 2,823,192 -
Due in More Than One Year 547,127 -
Total Liabilities 3,399,350 1,003

DEFERRED INFLOWS OF RESOURCES
Deferred Amount on Refunding 24,127 -
Total Deferred Inflows of Resources 24,127 -

NET POSITION
Held for Dissolution of Community Redevelopment Agency 3,112,193 - TOTAL NET POSITION $ - 3,112,193 $

CITY OF COVINA

STATEMENT OF CHANGES IN FIDUCIARY NET POSITION

FIDUCIARY FUNDS
YEAR ENDED JUNE 30, 2023
See accompanying Notes to Financial Statements.
(43)
Private- Custodial
Purpose Trust Funds

ADDITIONS
Property Tax Revenue 2,960,668 $ - $
Charges for Services 166,414 -
Investment Earnings 241,987 -
Business Licenses Collected from Property Owners - 11,638 Total Additions 3,369,069 11,638

DEDUCTIONS
General and Administrative 431,884 11,638
Interest and Fiscal Charges 203,556 -
Program Expenses 57,274 -
Total Deductions 692,714 11,638
CHANGE IN NET POSITION - 2,676,355
Net Position - Beginning of Year 435,838 -
NET POSITION - END OF YEAR $ - 3,112,193 $

THIS PAGE INTENTIONALLY LEFT BLANK

CITY OF COVINA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(45)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Financial Reporting Entity
The financial statements of the City of Covina (City) include the financial activities of the City, the Covina Public Financing Authority and the Covina Housing Authority. Their financial operations are closely related, and the City Council has a continuing responsibility over the entities. The responsibility is determined based on budget adoption, taxing authority, funding and appointments of the governing board. Blended component units, although legally separate entities, are part of the City’s operations and therefore data from these units are combined with data of the City.

Since the City Council acts as the Board of Directors and can impose its will on the Covina Public Financing Authority and the Covina Housing Authority, the City is the primary government and the other two entities are component units. Additionally, since the governing boards of the City and the two other component units are the same, there is a potential for the component units to provide specific financial benefits to or impose specific financial burdens on the City. Therefore, the financial statements of the City and the two component units are blended.

The City of Covina was incorporated in 1901 as a General Law City. The City provides a broad range of services to its citizens, including general government, public safety, streets, sanitation and health, culture and park facilities and social services.

The Covina Redevelopment Agency (Agency) was established in 1969, pursuant to the State of California, Health and Safety Code, Section 33000. Its purpose is to prepare and carry out plans for the improvement, rehabilitation and development of blighted areas within the territorial limits of the City of Covina. On June 28, 2011, Assembly Bill X1 26 (AB X1 26), the Dissolution bill was enacted. On December 29, 2011, the California Supreme Court upheld the constitutionality of AB X1 26, and all redevelopment agencies in California were dissolved by operation of law effective February 1, 2012. The legislation provides for successor agencies and oversight boards that are responsible for overseeing the dissolution process and wind down of redevelopment activity. On January 11, 2012, the City adopted a resolution declaring its intent to serve as the Successor Agency and on January 30, 2012, the City Council adopted a resolution to retain the Housing assets and functions of the former redevelopment agency and the Housing Authority of the City will serve as the Housing Successor Agency.

CITY OF COVINA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(46)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) A. Financial Reporting Entity (Continued)
The Successor Agency to the Covina Redevelopment Agency (SACRA) was created to serve as a custodian for the assets and to wind down the affairs of the former Agency.

The SACRA is a separate public entity from the City, subject to the direction of an Oversight Board. In general, the SACRA’s 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, the SACRA will only be allocated revenue in the amount that is necessary to pay the estimated annual installment payments on enforceable obligations of the former Agency until all enforceable obligations of the former Agency have been paid in full and all assets have been liquidated. The SACRA is a fiduciary component unit and is reported as a fiduciary fund (private-purpose trust fund).

The Covina Public Financing Authority (Authority) is a joint powers authority organized pursuant to the State of California Government Code, Section 6500. The Authority exists under a Joint Exercise of Power Agreement between the City of Covina and the Covina Redevelopment Agency. Its purpose is to facilitate financing for public capital improvements of the City and the Agency. Separate financial statements are not prepared for the Authority.

The Covina Housing Authority (Housing Authority) was formed January 25, 2011, in order to continue to achieve the goals established by the Housing Element of the general plan. A housing authority collaborates with public, private and nonprofit entities agencies for the purpose of providing sanitary and safe housing for people of very low, low or moderate income within a city or county’s territorial jurisdiction. The core activities of many housing authorities are primarily to build, acquire, own, manage and maintain residential rental units and to provide financial assistance for rentals or ownership in the private real estate market. A housing authority is governed by the state Housing Authority Law, and for purposes of major federal funding, if any is received, regulations of the U.S. Department of Housing and Urban Development (HUD). Further, a housing authority is not required under the Housing Authority Law to seek HUD or any other type of outside funding. On January 30, 2012, the City Council adopted a resolution to retain the Housing assets and functions of the dissolved Agency and the Housing Authority of the City will serve as the Housing Successor Agency. The activity is reflected in the Housing Authority Special Revenue Fund. Separate financial statements are not prepared for the Housing Authority.

The accounting policies of the City, the Authority, and the Housing Authority conform to accounting principles generally accepted in the United States of America as applicable to governments. The following is a summary of the more significant policies.

CITY OF COVINA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(47)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) B. Government-Wide and Fund Financial Statements
The accompanying financial statements are presented on the basis prescribed in Governmental Accounting Standards Board (GASB) Statement No. 34, Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments. The financial statements of the City are as follows:

Government-Wide Financial Statements
The Statement of Net Position and Statement of Activities report information on all the activities of the primary government (including its blended component units). The City of Covina has no discretely presented component units. As a rule, the effect of interfund activity has been eliminated from the government-wide statements. Exceptions to this general rule are charges for the City water utility, sewer services and environmental services and indirect general government expenses to other functions and funds of the City. Elimination of the water utility, sewer service charges and environmental service charges would distort the direct costs and program revenues reported for the various functions concerned. Expenses reported in various funds include allocated indirect general government expenses. Governmental activities, which normally are supported by taxes, intergovernmental revenues and other nonexchange transactions, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support.

The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include (1) charges to customers or applicants who purchase, use or directly benefit from goods, services or privileges provided by a given function or segment and (2) grants and contributions that are restricted to meeting the operational or capital requirements of a function or segment. Taxes and other items not properly included among program revenues are reported as general revenues.

Fund Financial Statements
Separate financial statements of the City, including blended component units, are provided for major individual governmental, proprietary and fiduciary funds, which include the private-purpose trust fund and custodial fund. The fiduciary funds are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements.

CITY OF COVINA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(48)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary and fiduciary funds statements. With this measurement focus, all assets, deferred outflows of resources, liabilities and deferred inflows of resources associated with the operation of the City are included on the statement of net position. Net position (assets plus deferred outflows of resources less liabilities less deferred inflows of resources) are segregated into net investment in capital assets (net of related debt), restricted and unrestricted components. The Statement of Activities and Statement of Revenues, Expenses and Changes in Fund Net Position of Proprietary Funds present increases (revenues) and decreases (expenses) in net total position. Revenues are recorded when earned and expenses are recorded when a liability is incurred regardless of the timing of the related cash flows. Under this determination, unbilled service receivables are recorded at fiscal year-end.

Nonexchange transactions are typically described as taxes, fines and certain grants and donations. In a nonexchange transaction, a government gives (or receives) value without directly receiving (or giving) equal value in return. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.

Government fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. With this measurement focus, only current assets, current liabilities and current deferred inflows of resources generally are included on the balance sheet. Operating statements of these funds’ present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in fund balance. Under the modified accrual basis of accounting, revenues are recognized when they become susceptible to accrual (i.e., when they become measurable and available to finance expenditures of the current period or soon enough thereafter to be used to pay liabilities of the current period). For this purpose, the City considers revenues including property taxes to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures are recorded when the related fund liability is incurred, except for unmatured principal and interest on long-term debt, claims and judgments and compensated absences, which are recognized only when due and payable at fiscal year-end. General capital asset acquisitions and debt service principal payments are reported as expenditures in governmental funds. Proceeds from long-term debt and acquisitions under leases are reported as other financing sources.

CITY OF COVINA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(49)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued)
Property taxes, charges for services, grant revenues and investment earnings are susceptible to accrual and have been recognized as revenues of the current fiscal period. Licenses and permits and fines and forfeitures are not susceptible to accrual because they are not measurable until received in cash. Grant revenues earned but not received are recorded as a receivable, and grants received before the related revenue recognition criteria have been met are reported as unearned revenues.

The City reports the following major governmental funds:

General Fund
This fund is 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.

Measure W Special Revenue Fund
This fund accounts for the tax collected to provide a safe, clean water program.

American Rescue Plan Act (ARPA) Special Revenue Fund
This fund accounts for monies provided to the City to assist with COVID pandemicrelated response activities supporting public health response, address negative economic impacts, replace public sector revenue loss, fund essential government services and certain water, sewer, and broadband infrastructure improvements.

Park Development Capital Projects Fund
This fund accounts for federal and state grant monies used for parkland acquisition and development.

The City reports the following major proprietary funds:

Water Utility Fund
This enterprise fund is used to account for general and administrative, utility billing, customer service, sales promotion, source and supply, production and storage and transmission and distribution operations.

Sewer Fund
This enterprise fund accounts for the operation and maintenance of the wastewater system within the City’s boundaries.

Nonmajor Fund – Environmental Fund
This enterprise fund accounts for the general and administrative, environmental services, industrial waste and waste management operations.

CITY OF COVINA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(50)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued)
Additionally, the City reports the following fund types:

Special Revenue Funds
These funds are used to account for specific revenue sources that are legally restricted or otherwise assigned for specific purposes.

Capital Projects Funds
These funds are used to account for capital expenditures funded by various sources.

Enterprise Funds
These funds accounts for the general and administrative, environmental services, industrial waste, waste management operations and theater operations.

Internal Service Funds
These funds account for the central equipment, management information systems, workers’ compensation and general liability services provided to other departments of the City.

Fiduciary Funds
Private-Purpose Trust Fund
This fund is to account for custodial responsibilities that are assigned to SACRA with the passage of AB X1 26 and was established on February 1, 2012. The fund accounts for the receipt of property tax revenues pursuant to the dissolution of the Agency and expenses incurred pursuant to the recognized obligation payment schedule (ROPS) approved by the State Department of Finance. This fund follows the accrual basis of accounting.

Custodial Funds
These funds are used to account for funds in which the City is acting as an agent for another entity. These funds are reported using the accrual basis of accounting.

CITY OF COVINA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(51)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued)
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses from operations generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the Water Utility, Sewer and nonmajor (Environmental) enterprise funds and the City’s internal service funds are charges to customers for sales and services. The Water Utility recognizes as operating revenue capital improvement fees intended for construction and rehabilitation of the water system. Operating expenses for enterprise and internal service funds include the cost of sales and services, administrative expenses and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.

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

D. Encumbrances
Encumbrance accounting, under which purchase orders, contracts and other commitments for the expenditures of funds are recorded, is employed in governmental funds. Amounts encumbered in the current year are treated as restricted, committed or assigned fund equity since they do not constitute expenditures or liabilities. At fiscal year-end, encumbrances outstanding are shown as restricted or assigned fund balance.

E. Use of Estimates
The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures.

Accordingly, actual results could differ from those estimates.

F. Cash and Cash Equivalents
The City considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

G. Investments
Investments are stated at fair value using quoted market prices. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Investment elements, including interest and changes in fair value, are aggregated and reported as investment earnings in the financial statements.

CITY OF COVINA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(52)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) H. Receivables
All accounts receivable are shown net of an allowance for uncollectible amounts. The allowance is estimated based on historical collections and a review of account receivable.

I. Inventories and Prepaid Items
Inventories are priced at the lower of cost or market on a first-in, first-out basis. The inventories consist primarily of water parts, vehicle and equipment parts and gasoline.

Inventories of governmental funds are considered immaterial and are recorded as expenditures when purchased under the purchases method. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements.

J. Compensated Absences
The City permits employees to accumulate earned but unused vacation and sick pay benefits. All vacation pay and a portion of the sick pay are accrued when incurred in the government-wide and proprietary fund financial statements.

K. Capital Assets
Capital assets, which include property, plant, equipment and infrastructure assets (roads, bridges, sidewalks, water, sewer and similar items), are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the City as assets with a cost of more than $5,000 (more than $1,000 for certain vehicles and information technology equipment) and an estimated useful life of more than one year. Such assets are recorded at historical or estimated historical cost. Contributed and donated capital assets are recorded at acquisition value at the date of donation.

The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend the life of the asset are not capitalized. Major capital outlays and improvements are capitalized as projects are constructed.

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

Type of Asset Life in Years
Buildings and Structures 20 to 40 Years
Improvements Other than Buildings 20 Years
Public Domain Infrastructure 15 to 50 Years
Water System Infrastructure 20 to 50 Years
Sanitary Sewer System Infrastructure 20 to 50 Years
Machinery and Equipment 5 to 20 Years

CITY OF COVINA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(53)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) K. Capital Assets (Continued)
Subscription-Based Information Technology Arrangements (SBITA) assets are initially measured as the sum of the present value of payments expected to be made during the subscription term, payments associated with the SBITA contract made to the SBITA vendor at the commencement of the subscription term, when applicable, and capitalizable implementation costs, less any SBITA vendor incentives received form the SBITA vendor at the commencement of the SBITA term. SBITA assets are amortized in a systematic and rational manner over the shorter of the subscription term or the useful life of the underlying IT assets.

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

Lessor
The City recognizes a lease receivable and a deferred inflow of resources in the applicable governmental activities or business-type activities in the government-wide and in the governmental and proprietary fund financial statements. At the commencement of a lease, the City initially measures the lease receivable at the present value of payments expected to be received during the lease term. Subsequently, the lease receivable is reduced by the principal portion of lease payments received. The deferred inflow of resources is initially measured as the initial amount of the lease receivable, adjusted for lease payments received at or before the lease commencement date. Subsequently, the deferred inflow of resources is recognized as revenue over the life of the lease term.

For both the lessee and lessor the City uses the interest rate stated on the agreement when available. When the interest rate is not provided the City uses its estimated incremental borrowing rate as the discount rate.

CITY OF COVINA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(54)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) M. Claims and Judgments
The accrual for workers’ compensation and general liability claims is based upon an actuarial review of the past experience which has been modified for current trends and information. While the ultimate amount of losses incurred through June 30, 2023 is dependent on future developments, based on information from the plan administrators, City management believes that the aggregate accrual is adequate to cover such losses, including amounts for incurred but not reported.

N. Pensions
For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the City’s California Public Employees’ Retirement System (CalPERS) plans (Plans) and additions to/deductions from the Plans’ 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 as fair value. CalPERS audited financial statements are publicly available reports that can be obtained on the CalPERS’s website under Forms and Publications.

O. Other Postemployment Benefits (OPEB)
For purposes of measuring the net OPEB liability and deferred outflows/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 Plans’ fiduciary net position have been determined on the same basis. For this purpose, benefit payments are recognized when due and payable in accordance with the benefit terms.

Investments are reported at fair value.

P. Net Position
Net position in the statement of net position is categorized as net investment in capital assets, restricted and unrestricted.

Net Investment in Capital Assets. This category groups all capital assets into one component of net position. Accumulated depreciation and the outstanding balances of debt (including discounts and premiums) that are attributable to the acquisition, construction or improvement of these assets reduce the balance in this category.

Restricted Net Position. This category presents external restrictions imposed by creditors, grantors, contributors or laws or regulations of other governments and restrictions imposed by law or enabling legislation.

Unrestricted Net Position. This category represents net position of the City not restricted for any project or other purpose.

CITY OF COVINA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(55)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Q. Deferred Outflows/Inflows of Resources
In addition to assets, the statement of financial position includes a separate section for deferred outflows of resources. Deferred outflows of resources represent a consumption of net assets that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The category of deferred outflow of resources reported in the statement of net position is related to debt refunding, pensions, and other postemployment benefits. The deferred charge on refunding resulted from the difference between the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. Deferred outflows on pension and other postemployment benefits are more fully discussed in Notes 10 and 17.

In addition to liabilities, the statement of financial position and the governmental funds balance sheet includes a separate section for deferred inflows of resources. Deferred inflows of resources represent 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. In the government-wide financial statements. The City’s deferred inflows of resources reported on the statement of net position relate to pension and other postemployment benefits, which are more fully discussed in Notes 10 and 17. The statement of net position and the governmental funds balance sheet also reports a deferred inflow of resources related to leases.

Under the modified accrual basis of accounting, deferred inflows of resources also include revenues not collected within the availability period after the fiscal year-end. The City has reported deferred inflows of resources related to unavailable revenues for grants. These amounts are deferred and will be recognized as an inflow of resources in the period that amounts become available.

R. Adoption of New Accounting Standards
In May 2020, the GASB issued GASB Statement No. 96, Subscription-Based Information Technology Arrangements. This standard defines a subscription-based information technology arrangement (SBITA); establishes that a SBITA results in a rightto-use subscription asset (an intangible asset) and a corresponding subscription liability; provides the capitalization criteria for outlays other than subscription payments, including implementation costs of a SBITA; and requires note disclosures regarding a SBITA.

The City adopted the requirement of the guidance effective July 1, 2022 and has applied the provisions of this standard to the beginning of the period of adoption.

CITY OF COVINA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(56)
NOTE 2 STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
Excess of Charges over Appropriations
For the fiscal year ended June 30, 2023, expenditures exceeded appropriations in the following programs:

Variance with
Budget Actual Final Budget
Other Governmental Funds:

Special Revenue Funds
Lighting Assessment 248,894 $ 273,118 $ (24,224) $
Shoppers Lane 8,700 8,854 (154)
Funds with deficit balances were as follows:

Amount
Park Development Capital Projects Fund 4,964 $
Other Governmental Funds:

Special Revenue Funds
Law Enforcement 15,415
Lighting Assessment 56,332
Capital Project Funds
Transportation 581,107
The deficit in these funds will be reduced by transfers from the general fund or from receipt of grant revenues.

NOTE 3 CASH AND INVESTMENTS
The City is following the requirements associated with GASB Statement No. 40, Deposit and Investment Risk Disclosures. More commonly referred to as GASB 40, this statement adds to and changes financial statement disclosure requirements for cash and investments of local governments. GASB 40 amends GASB Statement No. 3, Deposits with Financial Institutions, Investments (including Repurchase Agreements), and Reverse Repurchase Agreements, to address common deposit and investment risks related to credit risk, interest rate risk and foreign currency risk. As an element of interest rate risk, this statement requires certain disclosures of investments that have fair values with a high sensitivity to interest rate changes.

CITY OF COVINA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(57)
NOTE 3 CASH AND INVESTMENTS (CONTINUED)
Cash and investments as of June 30, 2023 are classified in the accompanying financial statements as follows:

Business- PrivateGovernmental Type Purpose Trust Custodial Activities Activities Fund Funds Total
Statement of Net Position:

Cash and Investments 79,899,810 $ 25,745,439 $ 862,722 $ 250 $ 106,508,221 $ Cash and Investments - Restricted - 1,149,437 - - 1,149,437 Cash and Investments With Fiscal Agent 291 - 3,116,602 - 3,116,893 Total Cash and Investments 79,900,101 $ 26,894,876 $ 3,979,324 $ 250 $ 110,774,551 $ Cash and Investments as of June 30, 2023
Consist of the Following:

Cash on Hand $ 6,972
Deposits With Financial Institutions 5,965,143
Investments With Fiscal Agent 1,875,087
Investments 102,927,349
Total Cash and Investments $ 110,774,551
Fiduciary Funds
Authorized Investments
The table below identifies the investment types that are authorized for the City by the California Government Code and the City’s investment policy. The table also identifies certain provisions of the California Government Code (or the City’s investment policy, if more restrictive) that address interest rate risk, credit risk, and concentration of credit risk.

This table does not address investments of debt proceeds held by bond trustees that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City’s investment policy.

Covina Covina Covina Covina
CGC Policy CGC Policy CGC Policy CGC Policy
Mutual Funds (Money Market Funds) N/A N/A 20% 10% 10% None AAA AAA Bankers Acceptance 180 Days 180 Days 40% 20% 30% None None Prime Commercial Paper 270 Days 180 Days 25% 15% 10% None A Prime Certificates and Time Deposits 5 Years 2 Years 30% 10% None None None None Corporate Notes 5 Years 2 Years 30% 10% None None A AAU.S. Treasury Securities 5 Years 5 Years None 30% None None None None U.S. Agency Securities 5 Years 5 Years None 30% None 10% None None Local Agency Investment Fund (LAIF) N/A N/A None None None None None None Maximum Maturity Portfolio Issuer Rating
Maximum Maximum
Percentage of Investment in One Minimum Credit
Investments Authorized by Debt Agreements
Investment of debt proceeds and reserves held by bond trustees are governed by the debt agreements, rather than the general provisions of the California Government Code.

Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the City manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations.

CITY OF COVINA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(58)
NOTE 3 CASH AND INVESTMENTS (CONTINUED)
Information about the sensitivity of the fair values of the City investments (including investments held by bond trustee) to market interest rate fluctuations is provided by the following table:
12 Months 13 to 36 37 to 60 More than 60
Fair Value or Less Months Months Months
Investment Type:

State Investment Pool (LAIF) 44,668,769 $ 44,668,769 $ - $ - $ - $ U.S. Agency Securities 28,374,862 2,931,710 10,760,930 14,682,222 - Negotiable Certificates of Deposit 19,385,250 4,621,507 8,983,031 5,780,712 Money Market Mutual Funds 269,784 269,784 - - -
Held by Bond Trustee:

Money Market Mutual Funds 3,116,893 3,116,893 - - -
Total 95,815,558 $ 55,608,663 $ 19,743,961 $ 20,462,934 $ - $ Not subject to investment rate risk
Covina Irrigating Company 7,111,791 $
Total Investments 102,927,349 $
Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligations to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Certain investments, such as obligations, which are backed by the full faith and credit of the United States Government, are exempt from credit rating disclosures. Presented below is the minimum rating required by (where applicable) the California Government Code, the City’s investment policy or debt agreements and the actual rating from Standard & Poor’s as of fiscal year-end for each investment type:

Minimum
Credit Not Required
Fair Value Rating AAA AA+ Not Rated to be Rated
Investment Type:

State Investment Pool (LAIF) $ N/A - 44,668,769 $ - $ 44,668,769 $ - $ U.S. Agency Securities 28,374,862 N/A - 28,374,862 - -
Negotiable Certificates of Deposit 19,385,250 N/A - - 19,385,250 - Money Market Mutual Funds 269,784 A 269,784 - - -
Held by Bond Trustee:

Money Market Mutual Funds 3,116,893 A 3,116,893 - - -
Total 95,815,558 $ N/A 3,386,677 $ 28,374,862 $ 64,054,019 $ - $ Not subject to credit risk
Covina Irrigating Company $ 7,111,791
Total Investments 102,927,349 $
Concentration of Credit Risk
The investment policy of the City contains limitations on the amount that can be invested in any one issuer. There are no investments in any one issuer (other than U.S. Treasury securities, money market mutual funds and external investment pools) that represent 5% or more of total City investments.

CITY OF COVINA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(59)
NOTE 3 CASH AND INVESTMENTS (CONTINUED)
Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The California Government Code and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments other than the following provision for deposits: The California Government Code requires that a financial institution secure deposit made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law. The fair value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits.

As of June 30, 2023, all the City’s deposits with financial institutions in excess of federal depository insurance limits were held in collateralized accounts.

Investment in State Investment Pool
The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by the California Government Code under the oversight of the Treasurer of the State of California. The fair value of the City’s investment in this pool is reported in the accompanying financial statements at amounts based upon its pro rata share of the fair value provided by LAIF for the entire LAIF portfolio. The balance available for withdrawal is based on LAIF accounting records and recorded on an amortized basis.

Investment in Covina Irrigating Company
The Covina Irrigating Company (the Company) is a nonprofit mutual water company. The purpose of the Company is to develop, distribute, supply or deliver water at cost for irrigation and domestic uses of its stockholders. The governing board of directors consists of nine directors which are elected by the stockholders. The City’s investment in the Company has been recorded on the equity method of accounting in the Water Utility Enterprise Fund. The City’s equity share is 42.19%.

Fair Value Measurements
The City categorizes its fair value measurement within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the assets. Level 1 inputs are quoted prices in active markets for identical assets, Level 2 inputs are quoted prices for similar assets in active markets and Level 3 inputs are significant unobservable inputs.

CITY OF COVINA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(60)
NOTE 3 CASH AND INVESTMENTS (CONTINUED)
Fair Value Measurements (Continued)
The City pool investment has the following recurring fair value measurements as of June 30, 2023:

Quoted Prices in Significant
Active Markets Other Significant
for Identical Observable Unobservable
Investment by Fair Value Level Fair Value Assets (Level 1) Input (Level 2) Inputs (Level 3) Debt Securities:

U.S. Agency Securities 28,374,862 $ - $ 28,374,862 $ - $ Negotiable Certificates of Deposit 19,385,250 - 19,385,250 - Total Investments Measured
at Fair Value 47,760,112 - $ 47,760,112 $ - $
Investments:

State Investment Pool (LAIF)* 44,668,769
Money Market Mutual Funds* 3,386,677
Covina Irrigating Company* 7,111,791
Total Pooled Investments 102,927,349 $
* Not subject to fair value measurement hierarchy.

Fair Value Measurements Using
NOTE 4 INTERFUND TRANSACTIONS
A. Interfund Balances
Operating receivables between funds are classified as due from or due to other funds.

Negative individual fund cash and investment balances are offset by a due from other funds in the General Fund with a due to other funds set up in those funds owing the General Fund. The following are due from and due to balances as of June 30, 2023:

Receivable Fund Payable Fund Amount
General Other Governmental Funds 775,873 $
Advance
Advances were made to the Theater Enterprise Fund from the Sewer Enterprise Fund during fiscal year 2022-2023. The advance was used to assist in the purchase of the preforming arts center. Interest on the outstanding balance on advances payable is charged at an annual rate of 1.57%. Payments will start in December 2023 and the advance will mature in December 2042. At June 30, 2023, the outstanding balance was $2,750,000.

CITY OF COVINA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(61)
NOTE 4 INTERFUND TRANSACTIONS (CONTINUED)
A. Interfund Balances (Continued)
Interfund Transfers
Transfers between funds are generally subsidies from one fund to another fund, funding of workers compensation and general liability reserves. The following are the interfund transfers for fiscal year ended June 30, 2023.

Transfers In Fund Transfers Out Fund Amount
General Other Governmental Funds 300,000 $
Other Governmental Funds General 514,568
Park Development General 716,512
Other Enterprise Funds General 1,820,000
Internal Service General 1,200,000
Total 4,551,080 $
B. Internal Balances
Internal balances represent the net interfund receivables and payables remaining after elimination of all such balances within governmental and business-type activities.

NOTE 5 LEASE RECEIVABLE
The City, acting as lessor, leases wireless cell towers and land under long-term, noncancelable lease agreements. The leases expire at various dates through 2026 and do not provide for renewal options. During the year ended June 30, 2023, the City recognized $331,750 and $5,809 in lease revenue and interest revenue, respectively, pursuant to these contracts.

NOTE 6 PROPERTY TAXES
Property taxes are attached as an enforceable lien on property as of January 1. Taxes are levied in September and are payable in two installments on November 1 and February 1 and are delinquent after December 10 and April 10, respectively. Any unpaid amounts at the end of the fiscal year are recorded as property taxes receivable. The County of Los Angeles bills and collects the property taxes and subsequently remits the amount due to the City of Covina in installments during the year. Historically, the City has received substantially all of the taxes levied within two years from the date they are levied.

The County is permitted by State Law (Article XIII A of the California Constitution) to levy taxes at 1% of full market value (at time of purchase) and can increase the property’s value no more than 2% per year. The City receives a share of this basic levy proportionate to what it received in the 1976 to 1978 period.

CITY OF COVINA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(62)
NOTE 7 NOTES RECEIVABLE
The former Agency entered into agreement with Covina Gardens, KBS, L.P., a California Limited Partnership (Developer) to effectuate the Redevelopment Plan for the Covina Revitalization Project No. 1 by providing for the rehabilitation of residential rental housing development existing on a site acquired by the Developer which will maintain the supply and availability of low- and moderate-income housing, including very low-income units. The former Agency provided assistance to the Developer in the form of notes secured by a second deed of trust in the amount not to exceed $4,742,000. The interest rate range is 2% per year, and notes receivable are due in 55 years. At June 30, 2023, the City has recorded an allowance for the balance of $5,256,075 for principal of $4,742,000 and accrued interest of $514,075 as management is not certain if this amount will be collected.

NOTE 8 LOANS RECEIVABLE
The City’s Community Development Block Grant (CDBG) program provides low-income housing and economic assistance to qualifying households and businesses. The loans do not require monthly repayment. In addition to CDBG loans, first-time homebuyer loans made by the former Covina Redevelopment Agency are now administered by the Housing Authority. The loans for the first-time homebuyer and for down payment assistance bear interest from 1.5% to 6.875%. The first-time home buyer loans are forgiven after 45 consecutive years of occupying the home purchased, while the down payment assistance is forgiven after 20 years of occupying the home purchased. The housing rehabilitation program loan is secured by a deed of trust on the property and is due upon sale or transfer of the title of the property. The outstanding balance as of June 30, 2023 of all loans was $1,754,581. Due to the forgiveness feature of these loans the City has established an allowance for uncollectible loans in the amount of $1,502,076.

CITY OF COVINA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(63)
NOTE 9 CAPITAL ASSETS
Governmental Activities
Capital asset activity for the fiscal year ended June 30, 2023 was as follows:

Balance
June 30, 2022 Balance
As Restated Additions Deletions June 30, 2023
Governmental Activities:

Capital Assets, not Depreciated:

Land 12,335,553 $ - $ - $ 12,335,553 $
Construction in Progress 3,349,224 5,681,433 5,407,350 3,623,307 Total Capital Assets, not
Depreciated 15,684,777 5,681,433 5,407,350 15,958,860
Capital Assets, Depreciated:

Buildings and Structures 40,459,171 3,204,211 15,030 43,648,352 Improvements Other than Buildings 14,995,109 191,680 333,000 14,853,789 Public Domain Infrastructure 128,643,745 5,322,643 - 133,966,388 Sanitary Sewer Infrastructure 6,221,681 - - 6,221,681
Machinery and Equipment 11,864,521 334,616 267,420 11,931,717 Right to Use Assets 802,018 1,819 9,245 794,592
Total Capital Assets, Depreciated 202,986,245 9,054,969 624,695 211,416,519 Less Accumulated Depreciation for:

Buildings and Structures 14,314,083 846,307 14,404 15,145,986 Improvements Other than Buildings 6,291,586 635,978 333,000 6,594,564 Public Domain Infrastructure 93,485,213 3,355,076 - 96,840,289 Sanitary Sewer Infrastructure 4,508,864 64,737 - 4,573,601 Machinery and Equipment 8,738,283 716,227 267,420 9,187,090 Right to Use Assets 76,679 259,913 9,245 327,347
Total Accumulated Depreciation 127,414,708 5,878,238 624,069 132,668,877 Total Capital Assets,
Depreciated, Net 75,571,537 3,176,731 626 78,747,642
Total Capital Assets, Net 91,256,314 $ 8,858,164 $ 5,407,976 $ 94,706,502 $ Depreciation expense was charged to the following categories:

Governmental Activities:

General Government 370,558 $
Public Safety 619,775
Public Works 3,816,183
Culture and Recreation 696,983
Transit 374,739
Total Governmental Activities 5,878,238 $

CITY OF COVINA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(64)
NOTE 9 CAPITAL ASSETS (CONTINUED)
Business-Type Activities
Balance Balance
June 30, 2022 Additions Deletions June 30, 2023
Business-Type Activities:

Capital Assets, not Depreciated:

Land 377,408 $ - $ - $ 377,408 $
Construction in Progress 1,159,018 3,126,202 4,166,269 118,951 Total Capital Assets, not
Depreciated 1,536,426 3,126,202 4,166,269 496,359
Capital Assets, Depreciated:

Buildings and Structures 13,044,305 3,337,845 - 16,382,150 Improvements Other than Buildings 1,670,728 1,041,336 - 2,712,064 Water System Infrastructure 54,950,663 3,250,220 - 58,200,883 Machinery and Equipment 4,163,643 244,065 - 4,407,708
Right to Use Assets 17,306 - - 17,306
Total Capital Assets, Depreciated 73,846,645 7,873,466 - 81,720,111 Less Accumulated Depreciation for:

Buildings and Structures 4,037,118 294,432 - 4,331,550
Improvements Other than Buildings 204,188 90,097 - 294,285 Water System Infrastructure 15,446,833 1,369,219 - 16,816,052 Machinery and Equipment 2,473,498 279,452 - 2,752,950
Right to Use Assets 3,461 3,461 - 6,922
Total Accumulated Depreciation 22,165,098 2,036,661 - 24,201,759 Total Capital Assets,
Depreciated, Net 51,681,547 5,836,805 - 57,518,352
Total Capital Assets, Net 53,217,973 $ 8,963,007 $ 4,166,269 $ 58,014,711 $ Depreciation expense was charged to the following categories.

Business-Type Activities:

Water Utility 1,579,745 $
Sewer 356,327
Nonmajor Fund - Other Enterprise Funds 100,589
Total Business-Type Activities 2,036,661 $

CITY OF COVINA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(65)
NOTE 10 PENSION PLANS
The following is a summary of pension related items for the year ended June 30, 2023:

Deferred Deferred
Pension Outflows Inflows Pension
Liability of Resources of Resources Expense
CalPERS Miscellaneous 11,936,406 $ 8,650,507 $ 50,851 $ 4,375,788 $ CalPERS Safety 28,354,539 16,953,344 27,750,680 15,206,271 Total 28,889,750 $ 37,005,046 $ 27,801,531 $ 19,582,059 $ Pension liabilities are liquidated from the related employees home program, with the majority funded out of the General Fund.

A. General Information about the Pension Plans
Plan Descriptions
All qualified permanent and probationary employees are eligible to participate in the City’s Safety (police) cost sharing defined benefit plan and the Miscellaneous (all other) Plan, agent multiple-employer defined benefit pension plans administered by the California Public Employees’ Retirement System (CalPERS), which acts as a common investment and administrative agent for its participating member employers. Benefit provisions under the Plans are established by State statute and City resolution.

CalPERS issues publicly available reports that include a full description of the pension plans 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 to 62 with statutorily reduced benefits. For employees hired into a plan with the 1.5% at 65 formula, eligibility for service retirement is age 55 with at least five years of service.

PEPRA miscellaneous members become eligible for service retirement upon attainment of age 52 with at least five years of service. All members are eligible for nonduty disability benefits after five 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. Safety members can receive a special death benefit if the member dies while actively employed and the death is job related. The cost of living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law.

CITY OF COVINA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(66)
NOTE 10 PENSION PLANS (CONTINUED)
A. General Information about the Pension Plans (Continued) Benefits Provided (Continued)
The Plans’ provisions and benefits in effect at the measurement date of June 30, 2022, are summarized as follows:

Prior to On or After
Hire Date January 1, 2013 January 1, 2013
Benefit Formula 2.5%@55 2.0%@62
Benefit Vesting Schedule 5 Years of Service 5 Years of Service Benefit Payments Monthly for Life Monthly for Life
Retirement Age 50 - 55 50 - 62
Monthly Benefits, as a %
of Eligible Compensation 2.0% - 2.7% 2.0% - 2.7%
Required Employee Contribution Rates 7.64% 6.50%
Required Employer Contribution Rates:

Normal Cost Rate 10.850% 7.250%
Payment of Unfunded Liability 485,205 $ - $
On or After
January 1, 2011
Prior to and Prior to On or After
Hire Date December 31, 2010 January 1, 2013 January 1, 2013 Benefit Formula 3.0%@50 3%@55 2.7%@57
Benefit Vesting Schedule 5 Years of Service 5 Years of Service 5 Years of Service Benefit Payments Monthly for Life Monthly for Life Monthly for Life Retirement Age 50 - 55 50 - 55 50 - 57
Monthly Benefits, as a %
of Eligible Compensation 3% 2.4% - 3% 2.0% - 2.7%
Required Employee Contribution Rates 8.99% 8.99% 13.75% Required Employer Contribution Rates:

Normal Cost Rate 25.640% 23.680% 13.660%
Payment of Unfunded Liability 634,289 $ 12,581 $ 12,310 $ Miscellaneous
Safety
Employees Covered
At the measurement date of June 30, 2022, the following employees were covered by the benefit terms for the Miscellaneous Plan:

Miscellaneous
Inactive Employees or Beneficiaries Currently Receiving Benefits 275 Inactive Employees Entitled to but not yet Receiving Benefits 307 Active Employees 111
Total 693

CITY OF COVINA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(67)
NOTE 10 PENSION PLANS (CONTINUED)
A. General Information about the Pension Plans (Continued) Contributions
Section 20814 of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers are determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through CalPERS’s annual actuarial valuation process. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. City contribution rates may change if plan contracts are amended. Payments made by the employer to satisfy contribution requirements that are identified by the pension plan terms as plan member contributions requirements are classified as plan member contributions. For the fiscal year ended June 30, 2023, employer contributions of $1,407,490 and $2,241,062 were made for the miscellaneous and safety plans, respectively.

B. Net Pension Liability
The City’s net pension liability for each Plan is measured as the total pension liability, less the pension plan’s fiduciary net position. The net pension liability of each of the Plans is measured as of June 30, 2022, using an annual actuarial valuation as of June 30, 2021 rolled forward to June 30, 2022 using standard update procedures. A summary of principal assumptions and methods used to determine the net pension liability is shown on the following page.

CITY OF COVINA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(68)
NOTE 10 PENSION PLANS (CONTINUED)
B. Net Pension Liability (Continued)
Actuarial Assumptions
The total pension liabilities in the June 30, 2021 actuarial valuations were determined using the following actuarial assumptions:

Miscellaneous Safety
Valuation Date June 30, 2021 June 30, 2021
Measurement Date June 30, 2022 June 30, 2022
Actuarial Cost Method Entry-Age Normal Entry-Age Normal Cost Method Cost Method
Actuarial Assumptions:

Discount Rate 6.90% 6.90%
Inflation 2.30% 2.30%
Projected Salary Increase (1) (1)
Mortality Rate Table (2) (2)
Postretirement Benefit Increase (3) (3)
(1) Varies by entry age and service.
(2)
(3) The less of contract COLA or 2.30% until Purchasing Power Protection Allowance Floor on purchasing power applies, 2.30% thereafter.

The mortality table used was developed based on CalPERS-specific data. The probabilities of mortality are based on the 2021 CalPERS Experience Study for the period from 2001 to 2019. Pre-retirement and Post-retirement mortality rates include generational mortality improvement using 80% of Scale MP-2020 published by the Society of Actuaries.

For more details on this table, please refer to the CalPERS Experience Study and Review of Actuarial Assumptions report from November 2021 that can be found on the CalPERS website.

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

CITY OF COVINA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(69)
NOTE 10 PENSION PLANS (CONTINUED)
B. Net Pension Liability (Continued)
Long-Term Expected Rate of Return (Continued)
In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows. Using historical returns of all the funds’ asset classes, expected compound (geometric) returns were calculated over the short term (first 10 years) and the long term (11+ years) using a building-block approach. Using the expected nominal returns for both short term and long term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the rounded 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 equal to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses.

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

Assumed
Asset Real Return
Allocation (a) (b)
Global Equity - Cap-weighted 30.00 % 4.45 %
Global Equity - Non-Cap-weighted 12.00 3.84
Private Equity 13.00 7.28
Treasury 5.00 0.27
Mortgage-backed Securities 5.00 0.50
Investment Grade Corporates 10.00 1.56
High Yield 5.00 2.27
Emerging Market Debt 5.00 2.48
Private Debt 5.00 3.57
Real Assets 15.00 3.21
Leverage (5.00) (0.59)
Total 100.00 %
(a) An expected inflation of 2.30% used for this period. (b) Figures are based on the 2021 Asset Liability Management study.

Leverage
Discount Rate
The discount rate used to measure the total pension liability was 6.9%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

CITY OF COVINA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(70)
NOTE 10 PENSION PLANS (CONTINUED)
C. Changes in the Net Pension Liability
The changes in the net pension liability for the Miscellaneous Plan are as follows:

Total Plan Net Pension
Pension Fiduciary Liability
Liability Net Position (Asset)
Balance at June 30, 2021
(Measurement Date) $ 80,817,014 102,178,321 $ 21,361,307 $ Changes in the Year:

Service Cost 1,576,526 - 1,576,526
Interest on the Total Pension Liability 7,125,461 - 7,125,461 Differences between Expected
and Actual Experience (107,352) - (107,352)
Changes in Assumptions 3,217,843 - 3,217,843
Contribution - Employer - 28,388,909 (28,388,909)
Contribution - Employee - 675,453 (675,453)
Net Investment Income - (7,776,639) 7,776,639
Administrative Expenses - (50,344) 50,344
Benefit Payments, Including Refunds
of Employee Contributions (5,619,036) (5,619,036) -
Net Changes 6,193,442 15,618,343 (9,424,901)
Balance at June 30, 2022
(Measurement Date) $ 96,435,357 108,371,763 $ 11,936,406 $ Increase (Decrease)
Proportionate Share of Net Pension Liability Safety Plan As of June 30, 2023 (measurement date of June 30, 2022), the City reported $16,953,344 for its proportionate share of the net pension liability for the Safety Plan.

The City’s net pension liability for the Safety Plan is measured as the proportionate share of the net pension liability. The net pension liability of the Plan is measured as of June 30, 2022, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2021 rolled forward to June 30, 2022 using standard update procedures. The City’s proportionate share of the net pension liability was based on a projection of the City’s long-term share of contributions to the pension plans relative to the projected contributions of all participating employers, actuarially determined.

CITY OF COVINA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(71)
NOTE 10 PENSION PLANS (CONTINUED)
C. Changes in the Net Pension Liability (Continued)
Proportionate Share of Net Pension Liability Safety Plan (Continued) The City’s proportionate share of the net pension liability for the Safety Plan as of the measurement dates ended June 30, 2021 and 2022 was as follows:

Safety
Proportion - June 30, 2021 0.770330%
Proportion - June 30, 2022 0.246720%
Change - Increase (Decrease) -0.523610%
Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the net pension liability of the City for each Plan, calculated using the discount rate for each Plan, as well as what the City’s net pension liability would be if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate:

Miscellaneous Safety
1% Decrease 5.90% 5.90%
Net Pension Liability 26,586,957 $ 36,504,827 $
Current Discount Rate 6.90% 6.90%
Net Pension Liability 11,936,406 $ 16,953,344 $
1% Increase 7.90% 7.90%
Net Pension Liability (Asset) (25,657) $ 974,424 $
Pension Plan Fiduciary Net Position
Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports.

CITY OF COVINA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(72)
NOTE 10 PENSION PLANS (CONTINUED)
D. Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
For the year ended June 30, 2023, the City recognized pension expense of $4,375,788 and $15,206,271 for the Miscellaneous and Safety Plans, respectively. At June 30, 2023, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Deferred Deferred Deferred Deferred
Outflows of Inflows of Outflows of Inflows of
Resources Resources Resources Resources
Pension Contributions Subsequent
to Measurement Date $ - 1,407,490 $ 2,241,062 $ - $
Differences Between Expected and
Actual Experience (50,851) - 701,637 (184,100)
Change in Assumptions - 1,524,241 1,709,410 -
Change in Employer’s Proportion and
Differences Between the Employer’s
Contributions and the Employer’s
Proportionate Share of Contributions - - 21,025,260 (27,566,580) Net Differences Between Projected and
Actual Earnings on Plan Investments - 5,718,776 2,677,170 - Total $ (50,851) 8,650,507 $ 28,354,539 $ (27,750,680) $ Miscellaneous Safety
$1,407,490 and $2,241,062 reported as deferred outflows of resources related to contributions subsequent to the measurement date, for the Miscellaneous and Safety Plans, respectively, will be recognized as a reduction of the net pension liability in the year ending June 30, 2024. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:

Year Ending June 30, Miscellaneous Safety
2024 2,575,834 $ (1,096,870) $
2025 1,031,208 (1,232,634)
2026 756,061 (940,806)
2027 2,829,063 1,633,107
2028 - -
Thereafter - -
Payable to the Pension Plan
At June 30, 2023, the City had no outstanding amount of contributions to the pension plan required for the year ended June 30, 2023.

CITY OF COVINA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(73)
NOTE 11 COMPENSATED ABSENCES
For governmental funds, accumulated vacation and sick leave benefits payable at June 30, 2023, was $4,140,681. The short-term portion of $1,139,555 and long-term portion of $3,001,126 is not accounted in the governmental funds but is included in the governmental activities of the government-wide statements. Accumulated vacation and sick leave of $274,299, of which $88,052 represents the current portion, is recorded in the individual internal service funds and governmental activities of the government-wide financial statements. For enterprise funds, accumulated vacation and sick leave amounted to $643,568 of which $230,052 represents the current portion. The total amount is recorded within the respective proprietary funds and business-type activities of the government-wide statements.

Balance Current
June 30, 2023 Portion
Governmental Funds 4,140,681 $ 1,139,555 $
Internal Service 274,299 88,052
Total Governmental Activities 4,414,980 $ 1,227,607 $
Total Enterprise Funds 643,568 $ 230,052 $
NOTE 12 RISK MANAGEMENT
Workers’ Compensation and General Liability
The City has a program of insurance for any liability to City employees arising under the workers’ compensation laws for the State of California. By this action, the City will pay all claims up to $500,000. Amounts in excess of $500,000, up to $150,000,000, are covered through an excess commercial insurer. There are no claims that exceed insurance coverage over the last three years.

The City established general liability and workers’ compensation internal service funds. The funds have cash and investments of $4,086,513 and $7,398,729, respectively.

Actual settlements accrued are accounted for in the appropriate fund. Estimates for all remaining outstanding claims, including an estimate for incurred but not reported claims (IBNR), are not accounted for in the individual funds but are reported in the governmental activities of the government-wide statements under claims and judgements. At June 30, 2023, total actual and estimated claims and judgments payable were as follows:

General Liability 2,217,000 $
Workers’ Compensation 5,703,000
Total 7,920,000 $

CITY OF COVINA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(74)
NOTE 12 RISK MANAGEMENT (CONTINUED)
The following are changes in the claims and judgments liability for fiscal years 2023 and 2022:
2023 2022
Claims and Judgements - Beginning of Fiscal Year 7,718,000 $ 7,682,000 $ Claims Incurred (Including IBNRs) 891,609 978,166
Claims Paid (689,609) (942,166)
Claims and Judgements - End of Fiscal Year 7,920,000 $ 7,718,000 $ Fiscal Year Ended June 30
NOTE 13 LONG-TERM LIABILITIES
The following is a summary of changes in the long-term liabilities for the fiscal year ended June 30, 2023:

Balance
July 1, 2022 Balance Current
As Restated Additions Deletions June 30, 2023 Portion
Governmental Activities:

Other Long-Term Liabilities:

Compensated Absences 4,031,459 $ 1,752,251 $ 1,368,730 $ 4,414,980 $ 1,227,607 $ Claims and Judgments 7,718,000 891,609 689,609 7,920,000 1,738,000 Lease Payable 227,389 1,819 75,873 153,335 67,403
Other Debt:

Certificates of Participation Payable (COP) - 4,680,000 205,000 4,475,000 215,000 Unamortized Premium on COP 196,509 - 11,559 184,950 11,559 Pension Obligation Bonds 54,939,654 - 2,410,363 52,529,291 2,427,862 Direct Borrowings and Placements:

Subscriptions Payable 485,569 - 180,166 305,403 179,234 Section 108 Loan 2,000,000 - 125,000 1,875,000 125,000
Total Long-Term Liabilities, Net 74,278,580 $ 2,645,679 $ 5,066,300 $ 71,857,959 $ 5,991,665 $ Balance Balance Current
July 1, 2022 Additions Deletions June 30, 2023 Portion
Business-Type Activities:

Other Long-Term Liabilities:

Compensated Absences $ 299,673 608,089 $ 264,194 $ 643,568 $ 230,052 $ Lease Payable 13,934 - 3,403 10,531 3,456
Direct Borrowings and Placements:

Water Installment Agreement - 17,132,316 1,140,756 15,991,560 1,163,388 Other Debt:

Revenue Bonds Payable - 7,370,000 855,000 6,515,000 870,000 Pension Obligation Bonds - 7,855,346 344,637 7,510,709 347,138 Total Long-Term Liabilities, Net 32,979,685 $ 299,673 $ 2,607,990 $ 30,671,368 $ 2,614,034 $ Internal service funds predominately serve the governmental funds. Accordingly, long-term liabilities for these funds are included as part of the above totals for governmental activities.

Claims and judgments, compensated absences, net pension liability and net OPEB liability for the governmental activities are generally liquidated by the General Fund and Internal Service Funds.

CITY OF COVINA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(75)
NOTE 13 LONG-TERM LIABILITIES (CONTINUED)
Governmental Activities
Transportation Revenue Certificates of Participation, Series 2017 A In August 2017, $5,625,000 of 2017 Series A certificates of participation bonds were issued to provide funding to repair, upgrade or re-construct residential streets that are in poor to fair condition. The bonds mature annually through 2039, in amounts ranging from $175,000 to $355,000. Interest rates vary from 2.0% to a maximum of 5.0% and are payable semiannually on December 1 and June 1. At June 30, 2023, the outstanding balance of these bonds was $4,475,000. The total debt service requirements to maturity with respect to the certificates included in the governmental-type activities are as follows:

Fiscal Year Ending June 30, Principal Interest Total
2024 215,000 $ 149,988 $ 364,988 $
2025 220,000 145,688 365,688
2026 225,000 140,738 365,738
2027 230,000 135,112 365,112
2028 235,000 129,650 364,650
2029-2033 1,370,000 464,300 1,834,300
2034-2038 1,625,000 209,769 1,834,769
2039-2040 355,000 11,094 366,094
Total 4,475,000 $ 1,386,339 $ 5,861,339 $
Leases
The City leases equipment and vehicles for various terms under long-term, noncancelable lease agreements. The leases expire at various dates through 2027 and do not have renewal options.

Total future minimum lease payments are as follows:

Fiscal Year Ending June 30, Principal Interest Total
2024 67,403 $ 1,934 $ 69,337 $
2025 58,165 933 59,098
2026 23,538 257 23,795
2027 4,229 19 4,248
Total 153,335 $ 3,143 $ 156,478 $
Right-to-use assets acquired through outstanding leases are shown below, by underlying asset class.

Governmental
Activities
Equipment 88,615 $
Vehicles 220,408
Less: Accumulated Amortization (147,354)
Total 161,669 $

CITY OF COVINA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(76)
NOTE 13 LONG-TERM LIABILITIES (CONTINUED)
Governmental Activities (Continued)
Subscription-Based Information Technology Arrangements
The City has entered into subscription based-information technology arrangements (SBITAs) for various software applications. The SBITA arrangements expire at various dates through 2025 and provide for renewal options.

As of June 30, 2023, SBITA assets and the related accumulated amortization totaled $485,569 and $179,993, respectively.

The future subscription payments under SBITA agreements are as follows:

Fiscal Year Ending June 30, Principal Interest Total
2024 179,234 $ 4,782 $ 184,016 $
2025 126,169 1,981 128,150
Total 305,403 $ 6,763 $ 312,166 $
Section 108 Loan Payable
The County of Los Angeles provided funds under an interim agreement to loan $2,500,000 to the City to provide funds for Covina Senior and Community Center. The advance under the interim agreement was replaced by a Section 108 loan under the Community Development Block Grant Program of the Department of Housing and Urban Development. The City makes annual principal amount of $125,000 commencing August 1, 2018 and annually thereafter and semiannual interest payments on August 1 and February 1 each Year. At June 30, 2023, the outstanding loan balance was $1,875,000.

Fiscal Year Ending June 30, Principal Interest Total
2024 125,000 $ 57,369 $ 182,369 $
2025 125,000 54,065 179,065
2026 125,000 50,686 175,686
2027 125,000 47,188 172,188
2028 125,000 43,606 168,606
2029-2033 625,000 159,984 784,984
2034-2038 625,000 55,078 680,078
Total 1,875,000 $ 467,976 $ 2,342,976 $

CITY OF COVINA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(77)
NOTE 13 LONG-TERM LIABILITIES (CONTINUED)
Governmental Activities (Continued)
Pension Obligation Bonds
The City issued $62,795,000 of Taxable Pension Obligation Bonds, Series 2021 (POB), dated August 1, 2021 to fund a portion of the City’s obligations to CalPERS for the unfunded actuarial accrued liability with respect to the City’s miscellaneous and safety defined benefit pension plans. The City allocated the POB between governmental activities and business-type activities as follows:

Governmental Activities 52,529,291 $
Business-Type Activities 7,510,709
$ 60,040,000
The POB is due from 2022 through 2046 in annual principal installments of $65,000 to $3,585,000. Interest rates range from 0.299% to 3.001% and interest is payable semiannually on February 1 and August 1. The total outstanding principal as of June 30, 2023, is $60,040,000. The total annual debt service requirements on the POB are as follows:

Fiscal Year Ending June 30, Principal Interest Total
2024 2,775,000 $ 1,325,409 $ 4,100,409 $
2025 2,785,000 1,308,903 4,093,903
2026 2,805,000 1,284,896 4,089,896
2027 2,835,000 1,252,752 4,087,752
2028 2,870,000 1,211,853 4,081,853
2029-2033 15,145,000 5,227,118 20,372,118
2034-2038 16,985,000 3,313,290 20,298,290
2039-2043 11,165,000 1,140,155 12,305,155
2044-2046 2,675,000 121,766 2,796,766
Total 60,040,000 $ 16,186,142 $ 76,226,142 $
The annual debt service requirements will be allocated 97% to governmental activities and 3% to business-type activities.

Business-Type Activities
Leases
The City leases equipment under a noncancelable lease agreement. The lease expires in 2026 and does not have a renewal option.

Total future principal and interest payments are as follows:

Fiscal Year Ending June 30, Principal Interest Total
2024 3,456 $ 140 $ 3,596 $
2025 3,510 85 3,595
2026 3,565 30 3,595
Total 10,531 $ 255 $ 10,786 $

CITY OF COVINA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(78)
NOTE 13 LONG-TERM LIABILITIES (CONTINUED)
Business-Type Activities (Continued)
Leases (Continued)
Right-to-use assets acquired through outstanding leases are shown below, by underlying asset class.

Business-Type
Activities
Equipment 17,306 $
Less: Accumulated Amortization (6,922)
Total 10,384 $
Revenue Bonds Payable, Sewer Enterprise Fund
Wastewater Sewer Revenue Bonds – 2019 Taxable Wastewater Revenue Refunding Bonds
In August 2020, the City, issued $9,930,000 2019 Taxable Wastewater Revenue Refunding Bonds (2019 Bonds) for the purpose of refunding the Sewer Revenue Bonds issued in 2009 and paying issuance costs related to the 2019 Bonds.

Proceeds from the 2019 Bonds and reserve funds from the 2009 Bonds were deposited in a redemption fund to redeem the outstanding amount of $10,740,000 2009 Bonds on October 1, 2019.

Interest on the 2019 Bonds is payable semi-annually on October 1 and April 1 of year at rates ranging from 1.966% to 2.686% with principal payable October 1 commencing October 1, 2019. The 2019 Bonds are not subject to optional redemption prior to their stated maturities. A reserve fund has not been established for the 2019 Bonds.

The bonds are secured by a pledge of the net revenues received by the City for the sewer fees. Net Revenues will be equal to 120% of the fiscal year debt service if there is a transfer from a rate stabilization fund. Net revenues without the inclusion of a transfer from the rate stabilization fund will be at least equal to 100% of the fiscal year debt service requirement. Total principal and interest remaining to be paid on the bonds is $7,117,368. Principal and interest paid for the current fiscal year and customer net revenues were $1,023,768 and $1,162,771, respectively.

The total debt service requirements to maturity with respect to the certificates included in the business-type activities are as follows:

Fiscal Year Ending June 30, Principal Interest Total
2024 870,000 $ 150,861 $ 1,020,861 $
2025 885,000 132,088 1,017,088
2026 905,000 111,745 1,016,745
2027 930,000 89,301 1,019,301
2028 950,000 65,135 1,015,135
2029-2030 1,975,000 53,238 2,028,238
Total 6,515,000 $ 602,368 $ 7,117,368 $

CITY OF COVINA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(79)
NOTE 13 LONG-TERM LIABILITIES (CONTINUED)
Business-Type Activities (Continued)
Revenue Bonds Payable, Water Enterprise Fund
BBVA Mortgage Corporation Note Payable
On December 1, 2020, the City through a private placement financed debt in the amount of $18,883,578 to provide $5,500,000 in funds for capital projects related to the water enterprise, deposit $13,284,326 in an escrow fund to refund in advance the 2010 Water Revenue Bonds and the 2010 Lease payable with the remaining funds were used for costs of issuance. The interest rate on the debt is 1.97% with interest and principal payable April 1 and October 1 each year commencing April 1, 2021 through October 1, 2040. In consideration for the BBVA Mortgage Corporation (the Corporation) assistance in refinancing the City’s prior obligations, the City sold water capital improvements to the Corporation and concurrently, the Corporation resold
Under the agreement, the City has covenanted that it will prescribe, revise and collect such charges for the services and facilities of its municipal water system which will produce gross revenues that will generate net revenues equal to 1.25 times the maximum debt service. Principal and interest paid for the current year for all water related debt and customer net revenues were $1,472,701 and $2,410,150, respectively.

The total debt service requirements to maturity with respect to the note payable included in the business-type activities are as follows:

Fiscal Year Ending June 30, Principal Interest Total
2024 1,163,388 $ 309,359 $ 1,472,747 $
2025 1,185,418 286,330 1,471,748
2026 976,921 262,871 1,239,792
2027 763,400 245,786 1,009,186
2028 777,173 230,689 1,007,862
2029-2033 4,126,788 916,315 5,043,103
2034-2038 4,551,008 491,277 5,042,285
2039-2041 2,447,464 72,767 2,520,231
Total 15,991,560 $ 2,815,394 $ 18,806,954 $
NOTE 14 FUND BALANCES
As prescribed by GASB Statement No. 54, governmental funds report fund balance in classifications based primarily on the extent to which the City is bound to honor constraints on the specific Purposes for which amounts in the funds can be spent. As of June 30, 2023, fund balances for governmental funds are made up of the following:

Nonspendable Fund Balance. Nonspendable fund balance includes amounts that are (a) not in spendable form, or (b) legally or contractually required to be maintained intact. The not in spendable form criterion includes items that are not expected to be converted to cash (for example, inventories, prepaid amounts and due from successor agency in the General Fund).

CITY OF COVINA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(80)
NOTE 14 FUND BALANCES (CONTINUED)
Restricted Fund Balance. Restricted fund balance includes amounts that can be spent only for the specific purposes stipulated by external resource providers, constitutionally or through enabling legislation. Restrictions may effectively be changed or lifted only with the consent of resource providers.

Committed Fund Balance. Committed fund balance includes amounts that can only be used for the specific purposes determined by a formal action of the City’s highest level of decision-making authority, the City Council. Commitments may be changed or lifted only by the City Council taking the same formal action that imposed the constraint originally (for example: resolution and ordinance). Ordinance is the highest level of the City Council’s approval.

Assigned Fund Balance. Assigned fund balance comprises amounts intended to be used by the City for specific purposes that are neither restricted nor committed. Intent is expressed by (a) the City Council or (b) a body (for example: a budget or finance committee) or official to which the City Council has delegated through its fund balance policy the authority to assign amounts to be used for specific purposes. Assigned amounts also include all residual amounts in governmental funds (except negative amounts) other than the General Fund, that are not classified as nonspendable, restricted or committed.

Unassigned Fund Balance. Unassigned fund Balance is the residual classification for the General Fund and includes all amounts not contained in the other classifications.

Unassigned amounts are technically available for any purpose.

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

The City Council adopted a Reserve Policy. The policy aims to help reduce the negative impact on the City in times of economic uncertainty and potential losses of funding from other governmental agencies. City reserves are restricted for one-time purposes. The policy establishes minimum requirements for General Fund nondepartmental reserves and provides guidelines for the use of these funds.

CITY OF COVINA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(81)
NOTE 14 FUND BALANCES (CONTINUED)
General Fund Nondepartmental Reserve Requirements
Appropriation for contingencies is maintained at 20% of total General Fund net appropriations for one-time emergencies and economic uncertainties. Excess fund balance at year-end must first be used to replenish the reserve amount at the 20% level.

General Park Nonmajor
Fund Measure W ARPA Development Governmental Total
Nonspendable:

Prepaid Items 99,526 $ - $ - $ - $ 8,445 $ 107,971 $
Total 99,526 - - - 8,445 107,971
Restricted:

Culture and Recreation 292,674 - - - 1,030,905 1,323,579 Redevelopment and Housing - - - - 3,434,907 3,434,907
Community Development - - - - 396,861 396,861
Law Enforcement 69,979 - - - 427,643 497,622
Transportation and
Street Projects - - - - 7,784,440 7,784,440
Air Quality Projects - - - - 212,519 212,519
Assessment Districts - - - - 1,482,674 1,482,674
Storm Water - - - - 6,032 6,032
Other Capital Projects - 8,751,626 - - 312,863 9,064,489 Total 362,653 8,751,626 - - 15,088,844 24,203,123
Committed:

Emergency Contingency - 9,626,961 - - - 9,626,961
Community Development 305,189 - - - - 305,189
City Clerk 1,391 - - - - 1,391
Finance 6,500 - - - - 6,500
Law Enforcement 42,679 - - - - 42,679
Culture and Recreation 14,433 - - - - 14,433
Other Capital Projects 425,680 - - - - 425,680
Total 10,422,833 - - - - 10,422,833
Assigned:

Community Development 1,091 - - - - 1,091
Total 1,091 - - - - 1,091
Unassigned 22,431,703 - - (4,964) 21,773,885 (652,854)
Total 33,317,806 $ 8,751,626 $ - $ (4,964) $ 14,444,435 $ 56,508,903 $ NOTE 15 CONTINGENCIES
The City is involved in several pending lawsuits of a nature common to many similar jurisdictions. City management estimates that potential claims against the City, not covered by insurance, will not have a material adverse effect on the financial position of the City.

CITY OF COVINA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(82)
NOTE 16 OTHER POSTEMPLOYMENT BENEFITS (OPEB)
A. General Information about the OPEB Plan
Plan Description
The City provides retiree medical benefits under the CalPERS health plan which provides medical insurance benefits to eligible retirees and their spouses in accordance with various labor agreements. This plan is a single-employer defined benefit plan and does not issue separate financial statements. Copies of the CalPERS’s annual financial report may be obtained from the CalPERS Executive Office, 400 P Street, Sacramento, CA 95814. Eligible employees that do not participate in the CalPERS health plan are eligible to receive monthly payments from the City. These benefits are accounted for under the OPEB liability.

Eligibility
Employees are eligible for retiree health benefits if they retire from the City on or after age 50 (unless disabled) and are eligible for a PERS pension. The benefits are available only to employees who retire from the City. Membership of the plan consisted of the following at the June 30, 2022 measurement date:

Active Plan Members 173
Inactive Employees or Beneficiaries Currently
Receiving Benefit Payments 146
Total 319
Contributions
The contribution requirements of plan members and the City are established and may be amended by the City and the City Council. The City must agree to make a defined monthly payment toward the cost of each retiree’s overage. For fiscal year 2023, $453,322 was contributed as insurance premiums, and an implicit subsidy $106,667 totaling $559,989.

B. Net OPEB Liability
The City’s net OPEB liability was measured as of June 30, 2022, and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation as of June 30, 2022.

CITY OF COVINA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(83)
NOTE 16 OTHER POSTEMPLOYMENT BENEFITS (OPEB) (CONTINUED) B. Net OPEB Liability (Continued)
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. The actuarial assumptions were based on a review of plan experience during the period July 1, 2020 to June 30, 2022.

Valuation Date June 30, 2022
Funding Method Entry-age normal cost, level percent of pay Discount Rate 4.28%
Investment Rate of Return 4.50% per year net of expenses Inflation 2.75%
Aggregate Payroll Increases 2.75%
Mortality Rate - Miscellaneous Preretirement Mortality Rates for Public Agency Miscellaneous from 2021 CalPERS Experience Study.

Postretirement Mortality Rates for Public Agency
Miscellaneous from 2021 CalPERS Experience Study.

Mortality Rate - Safety Preretirement Mortality Rates for Public Agency Police and Fire from 2021 CalPERS Experience Study.

Postretirement Mortality Rates for Public Agency Police and Fire from 2021 CalPERS Experience Study.

Healthcare Trend Rate

6.50 percent for 2022, 6.00 percent for 2023, 5.50 percent for 2024, 5.25 percent for 2025-2029, 5.00 percent for 2030- 2039, 4.75 precent for 2040- 2049, 4.50 percent for 2050- 2069, and 4.00 percent for 2070 and later years; Medicare ages: 4.50 percent for 2022-2029 and 4.00 percent for 2030 and later years.

Long-Term Expected Rate of Return
The long-term expected rate of return on OPEB plan investments was determined using a building block method in which expected future real rates of return (expected returns, net of investment expense and inflation) are developed for each major asset class. The calculated investment rate of return was set equal to the expected ten-year compound (geometric) real rate of return plus inflation (rounded to the nearest 25 basis point where appropriate).

The table below reflects the long-term expected real rate of return by asset class (based on published capital market assumptions).

Assumed Asset Real Rate
Asset Class Allocation of Return
Broad U.S. Equity 20 % 4.40 %
U.S. Fixed 75 % 1.80 %
Cash Equivalents 5 % 0.20 %
Total 100 %

CITY OF COVINA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(84)
NOTE 16 OTHER POSTEMPLOYMENT BENEFITS (OPEB) (CONTINUED) B. Net OPEB Liability (Continued)
Discount Rate
GASB 75 generally requires that a blended discount rate be used to measure the Total OPEB Liability. The long-term expected return on plan investments may be used to discount liabilities to the extent that the plan’s Fiduciary Net Position (fair market value of assets) is projected to cover benefit payments and administrative expenses. A 20-year high quality (AA/Aa or higher) municipal bond rate must be used for periods where the Fiduciary Net Position is not projected to cover benefit payments and administrative expenses. Determining the discount rate under GASB 75 will often require that the actuary perform complex projections of future benefit payments and asset values. This has resulted in a blended discount rate of 4.28%, which takes into account the long-term expected rate of return of 4.5% and the Bond Buyer 20-Bond GO Index municipal bond rate of 3.69%.

Change in Assumptions
The discount rate was changed from 3.81% to 4.28%.

C. Change in the Net OPEB Liability
The changes in the net OPEB liability are as follows:

Total OPEB Plan Fiduciary Net OPEB
Liability Net Position Liability/(Asset)
(a) (b) (c) = (a) - (b)
Balance at June 30, 2021 (Measurement Date) 7,188,372 $ 1,090,237 $ 6,098,135 $ Changes Recognized for the Measurement Period:

Service Cost 252,323 - 252,323
Interest on the Total OPEB Liability 273,031 - 273,031
Changes of Benefit Terms - - -
Differences Between Expected and
Actual Experience 737,525 - 737,525
Changes of Assumptions (286,721) - (286,721)
Contribution from the Employer - 654,251 (654,251)
Net Investment Income - (127,979) 127,979
Administrative Expenses - (6,675) 6,675
Benefit Payments (554,251) (554,251) -
Net Changes During July 1, 2021 to June 30, 2022 421,907 (34,654) 456,561 Balance at June 30, 2022 (Measurement Date) 7,610,279 $ 1,055,583 $ 6,554,696 $ Increase (Decrease)

CITY OF COVINA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(85)
NOTE 16 OTHER POSTEMPLOYMENT BENEFITS (OPEB) (CONTINUED) C. Change in the Net OPEB Liability (Continued)
Sensitivity of the Net OPEB Liability to Changes in the Discount Rate The following presents the net OPEB liability of the City, as well as what the City’s net OPEB liability would be if it were calculated using a discount rate that is one percentage point lower (3.28%) or one percentage point higher (5.28%) than the current discount rate:

Discount Rate Current Discount Rate
-1% Discount Rate +1%
$ 6,554,696 7,415,723 $ 5,832,813 $
Plan’s Net OPEB Liability (Asset)
The following presents the net OPEB liability of the City, as well as what the City’s net OPEB liability would be if it were calculated using a healthcare cost trend rate that is one percentage point lower or one percentage point higher than the current discount rate:
1% Decrease Current Trend 1% Increase
Net OPEB Liability $ 6,554,696 6,017,720 $ 7,234,292 $
Subsequent Events
There were no subsequent events that would materially affect the results presented in this disclosure.

D. OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB For the year ended June 30, 2023, the City recognized OPEB expense of $647,866. At June 30, 2023, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

Deferred Deferred
Outflows Inflows
of Resources of Resources
OPEB Contributions Subsequent to Measurement Date $ - 559,989 $ Differences Between Actual and Expected Experience (244,578) 1,114,447 Change in Assumptions (899,536) 454,033
Net Differences Between Projected and Actual Earnings - 132,339 Total $ (1,144,114) 2,260,808 $
The change in assumptions and differences between actual and expected experience are amortized over the expected average remaining service life. The expected average remaining service life for the 2022 measurement period is 7.3 years.

CITY OF COVINA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(86)
NOTE 16 OTHER POSTEMPLOYMENT BENEFITS (OPEB) (CONTINUED) D. OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB (Continued)
$559,989 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net OPEB liability in the year ending June 30, 2024. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized as OPEB expense as follows:

Year Ending June 30, Amount
2024 166,274 $
2025 154,754
2026 90,153
2027 71,500
2028 33,462
Thereafter 40,562
E. Payable to the OPEB Plan
At June 30, 2023, the City had no outstanding amount of contributions to the OPEB plan required for the year ended June 30, 2023.

NOTE 17 RELATED PARTY TRANSACTIONS
The City entered into an agreement with Covina Irrigating Company (CIC) for the pumping, treating, and delivering the water to City reservoirs. During the fiscal year, the City paid $2,993,392 to the Covina Irrigating Company for the services of pumping, treating and delivery of water.

NOTE 18 ENCUMBRANCES
The City uses encumbrances to control expenditure commitments for the year and to enhance cash management. Encumbrances represent commitments related to contracts not yet performed and purchase orders not yet filled (executory contracts; and open purchase orders). Commitments for such expenditure of monies are encumbered to reserve a portion of applicable appropriations. Encumbrances still open at year-end are not accounted for as expenditures and liabilities but, rather, as restricted or assigned governmental fund balance.

CITY OF COVINA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(87)
NOTE 18 ENCUMBRANCES (CONTINUED)
As of June 30, 2023, total governmental fund encumbrance balances for the City are as follows:

General Fund 66,971 $
Measure W 233,723
ARPA Fund 774,790
Park Development Fund 237,152
Nonmajor Governmental Fund 2,918,183
Total Governmental Funds 4,230,819 $
NOTE 19 SUCCESSOR AGENCY TRUST FOR ASSETS OF THE FORMER REDEVELOPMENT

AGENCY (SACRA)
The assets and liabilities of the former Redevelopment Agency were transferred to the Successor Agency of the Covina Redevelopment Agency on February 1, 2012, as a result of the dissolution of the former Redevelopment Agency. The City is acting in a fiduciary capacity for the assets and liabilities. Disclosure related to long-term liabilities are as follows:

Long-Term Liabilities
Long-term liability activity for the year ended June 30, 2023, was as follows:

Balance Balance Current
July 1, 2022 Additions Deletions June 30, 2023 Portion
Compensated Absences 32,921 $ 3,585 $ - $ 36,506 $ 13,192 $ Tax Allocation Bonds 5,575,000 - 2,765,000 2,810,000 2,810,000 Unamortized Premium on
Tax Allocation Bonds 639,019 - 115,206 523,813 -
Total Long-Term Liabilities, Net 6,246,940 $ 3,585 $ 2,880,206 $ 3,370,319 $ 2,823,192 $ Tax Allocation Revenue Bonds of 2004 Series B
On November 1, 2004, the Agency issued $9,610,000 Tax Allocation Revenue Bonds of 2004, Series B. Interest is payable semiannually on June 1 and December 1 of each year at rates of interest ranging from 2.74% to 3.94%. The bonds are taxable and payment of principal on the bonds began December 1, 2005, and they are due on December 1 each year until 2023. The outstanding principal balance as of June 30, 2023 was $375,000.

CITY OF COVINA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(88)
NOTE 19 SUCCESSOR AGENCY TRUST FOR ASSETS OF THE FORMER REDEVELOPMENT

AGENCY (SACRA) (CONTINUED)
Long-Term Liabilities (Continued)
Tax Allocation Revenue Refunding Bonds of 2013, Series E On December 24, 2013, the Successor Agency of the former Covina Redevelopment Agency issued (through the County of Los Angeles Redevelopment Refunding Authority) 2013E Tax Allocation Revenue Refunding Bonds in the amount of $12,151,600. The purpose of the issue was to refund and defease the 1997 B Revenue Bonds and 2002 A Revenue Bonds plus accreted interest thereon. The proceeds from this issue plus any reserve funds remaining for the 1997 B and 2002 A bonds was used to fund an escrow account which were used to redeem the 1997 B and 2002 A bonds on January 22, 2014.

The redemption price was equal to 100% of the 1997 B and 101% of the accreted value of the 2002 E.

The 2013 bonds are issued as $9,460,000 in serial bonds with a maturity date of December 1, 2023. These bonds carry interest at 3-5%. Also issued was $1,756,600 in Capital Appreciation Bonds with final maturity of December 1, 2020. Interest rates are 3.5-4%.

The bonds are secured by tax revenues generated within the project area and as allocated for the payment of the debt by the County of Los Angeles per recognized obligation schedule.

The outstanding principal balance of the bonds at June 30, 2023 is $2,385,000.

Tax Allocation Revenue Refunding Bonds of 2014, Series E On December 17, 2014, the Successor Agency of the former Covina Redevelopment Agency issued (through the County of Los Angeles Redevelopment Refunding Authority) 2014A Tax Allocation Revenue Refunding Bonds in the amount of $6,985,000. The purpose of the issue was to refund and defease the 1997 A Revenue Bonds and 2004 A Revenue Bonds. The proceeds from this issue plus any reserve funds remaining for the 1997 A and 2004 A bonds was used to fund an escrow account which was used to redeem the 1997 A and 2004 A bonds on January 8, 2015. The redemption price was equal to 100% of the 1997 A Revenue Bonds 2004 A Revenue Bonds.

The 2014 bonds were issued as $6,985,000 in serial bonds with a maturity date of December 15, 2023. These bonds carry interest at 2-5%.

The bonds are secured by tax revenues generated within the project area and as allocated for the payment of the debt by the County of Los Angeles per recognized obligation schedule.

CITY OF COVINA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(89)
NOTE 19 SUCCESSOR AGENCY TRUST FOR ASSETS OF THE FORMER REDEVELOPMENT

AGENCY (SACRA) (CONTINUED)
Long-Term Liabilities (Continued)
Tax Allocation Revenue Refunding Bonds of 2014, Series E June 30, 2023 (Continued) The outstanding principal balance of the bonds at June 30, 2023 is $50,000.

Debt Service requirements to maturity with respect to SACRA’s Tax Allocation Bonds are as follows:

Fiscal Year Ending June 30, Principal Interest Total
2024 2,810,000 $ 70,944 $ 2,880,944 $

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REQUIRED SUPPLEMENTARY INFORMATION

CITY OF COVINA

SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS

MISCELLANEOUS
LAST TEN MEASUREMENT PERIODS *
See accompanying Note to Required Supplementary Information. (92)
Fiscal Year Ended June 30, 2023 2022 2021 2020
Measurement Period June 30, 2022 2021 2020 2019
Total Pension Liability:

Service Cost 1,576,526 $ 1,411,076 $ 1,493,026 $ 1,380,689 $ Interest on Total Pension Liability 7,125,461 6,951,248 6,728,565 6,507,596 Differences Between Expected and
Actual Experience (107,352) 207,569 129,660 2,271,369
Changes in Assumptions 3,217,843 - - -
Changes in Benefits - - - -
Benefit Payments, Including Refunds
of Employee Contributions (5,619,036) (5,397,430) (5,150,041) (4,817,247) Net Change in Total Pension Liability 6,193,442 3,172,463 3,201,210 5,342,407 Total Pension Liability - Beginning of Year 102,178,321 99,005,858 95,804,648 90,462,241 Total Pension Liability - End of Year (a) 108,371,763 $ 102,178,321 $ 99,005,858 $ 95,804,648 $ Plan Fiduciary Net Position:

Contributions - Employer 28,388,909 $ 2,994,204 $ 2,794,762 $ 2,386,884 $ Contributions - Employee 675,453 648,674 652,852 656,805 Plan to Plan Resource Movement - - (1,599) -
Net Investment Income (7,776,639) 15,110,547 3,264,202 4,117,352 Benefit Payments (5,619,036) (5,397,430) (5,150,041) (4,817,247) Administrative Expense (50,344) (67,457) (93,130) (45,355) Net Change in Plan Fiduciary Net Position 15,618,343 13,288,538 1,467,046 2,298,439 Plan Fiduciary Net Position - Beginning of Year 80,817,014 67,528,476 66,061,430 63,762,991 Plan Fiduciary Net Position - End of Year (b) 96,435,357 $ 80,817,014 $ 67,528,476 $ 66,061,430 $ Net Pension Liability - Ending (a)-(b) 11,936,406 $ 21,361,307 $ 31,477,382 $ 29,743,218 $ Plan Fiduciary Net Position as a Percentage
of the Total Pension Liability 88.99% 79.09% 68.21% 68.95% Covered Payroll 8,337,323 $ 7,882,583 $ 7,996,049 $ 7,646,268 $ Net Pension Liability as Percentage of
Covered Payroll 143.17% 270.99% 393.66% 388.99%
Notes to Schedule:

Benefit Changes:

There were no changes in benefits.

Changes in Assumptions:

From fiscal year June 30, 2016 to June 30, 2017: There were no changes in assumptions.

From fiscal year June 30, 2017 to June 30, 2018: The discount rate was reduced from 7.65% to 7.15%.

From fiscal year June 30, 2018 to June 30, 2022: There were no significant changes in assumptions.

From fiscal year June 30, 2022 to June 30, 2023: The discount rate and long-term rate of return decreased from 7.15% to 6.90% and the inflation rate decreased from 2.50% to 2.30%.
* Fiscal year 2015 was the first year of implementation and therefore only nine years are shown.

From fiscal year June 30, 2015 to June 30, 2016: GASB 68, paragraph 68 states that the long-term expected rate of return should be determined net of pension plan investment expense but without reduction for pension plan administrative expense. The discount rate of 7.50% used for the June 30, 2014 measurement date was net of administrative expenses. The discount rate of

7.65% used for the June 30, 2015 measurement date is without reduction of pension plan administrative expense.

CITY OF COVINA

SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS

MISCELLANEOUS
LAST TEN MEASUREMENT PERIODS *
See accompanying Note to Required Supplementary Information. (93)
Fiscal Year Ended June 30, 2019 2018 2017 2016 2015
Measurement Period June 30, 2018 2017 2016 2015 2014
Total Pension Liability:

Service Cost 1,347,039 $ 1,152,992 $ 1,486,092 $ 1,420,544 $ 1,399,079 $ Interest on Total Pension Liability 6,146,087 5,977,026 6,066,839 5,848,966 5,596,243 Differences Between Expected and
Actual Experience 90,424 (3,886,390) (362,755) 269,486 - Changes in Assumptions (479,050) 5,024,331 - (1,428,592) - Changes in Benefits - - - - -
Benefit Payments, Including Refunds
of Employee Contributions (4,633,255) (4,314,593) (4,154,693) (4,028,300) (3,984,640) Net Change in Total Pension Liability 2,471,245 3,953,366 3,035,483 2,082,104 3,010,682 Total Pension Liability - Beginning of Year 87,990,996 84,037,630 81,002,147 78,920,043 75,909,361 Total Pension Liability - End of Year (a) 90,462,241 $ 87,990,996 $ 84,037,630 $ 81,002,147 $ 78,920,043 $ Plan Fiduciary Net Position:

Contributions - Employer 2,064,731 $ 1,424,175 $ 1,410,961 $ 1,599,026 $ 1,453,480 $ Contributions - Employee 666,102 565,326 578,334 781,508 865,295 Plan to Plan Resource Movement (148) 24,693 - 9,481 -
Net Investment Income 5,103,206 6,234,088 296,745 1,328,803 8,890,960 Benefit Payments (4,633,255) (4,314,593) (4,154,693) (4,028,300) (3,984,640) Administrative Expense (274,830) (84,138) (35,892) (66,233) - Net Change in Plan Fiduciary Net Position 2,925,806 3,849,551 (1,904,545) (375,715) 7,225,095 Plan Fiduciary Net Position - Beginning of Year 60,837,185 56,987,634 58,892,179 59,267,894 52,042,799 Plan Fiduciary Net Position - End of Year (b) 63,762,991 $ 60,837,185 $ 56,987,634 $ 58,892,179 $ 59,267,894 $ Net Pension Liability - Ending (a)-(b) 26,699,250 $ 27,153,811 $ 27,049,996 $ 22,109,968 $ 19,652,149 $ Plan Fiduciary Net Position as a Percentage
of the Total Pension Liability 70.49% 69.14% 67.81% 72.70% 75.10% Covered Payroll 6,130,981 $ 8,782,015 $ 8,497,600 $ 7,967,419 $ 7,967,419 $ Net Pension Liability as Percentage of
Covered Payroll 435.48% 309.20% 318.33% 277.50% 246.66%

CITY OF COVINA
SCHEDULE OF CONTRIBUTIONS – MISCELLANEOUS
LAST TEN FISCAL YEARS*
See accompanying Note to Required Supplementary Information. (94)
Fiscal Year Ended June 30, 2023 2022 2021 2020 2019 2018 2017 2016 2015 Actuarially Determined Contribution 1,407,490 $ 3,287,810 $ 2,995,659 $ 2,794,762 $ 2,386,725 $ 1,424,175 $ 1,430,571 $ 1,599,026 $ 1,453,480 $ Contributions in Relation to the Actuarially
Determined Contributions (1,407,490) (28,389,913) (2,995,659) (2,794,762) (2,386,725) (2,078,674) (1,430,571) (1,599,026) (1,453,480) Contribution Deficiency (Excess) - $ (25,102,103) $ - $ - $ - $ (654,499) $ - $ - $ - $ Covered Payroll 8,786,730 $ 8,337,323 $ 7,882,583 $ 7,996,049 $ 7,646,268 $ 6,130,981 $ 8,782,015 $ 8,497,600 $ 7,967,419 $ Contributions as a Percentage of
Covered Payroll 16.02% 340.52% 38.00% 34.95% 31.21% 33.90% 16.29% 18.82% 18.24% Notes to Schedule:

Valuation Date June 30, 2018 June 30, 2018 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014 June 30, 2013 June 30, 2012 Methods and Assumptions Used to Determine Contribution Rates:

Actuarial Cost Method Entry Age Entry Age Entry Age Entry Age Entry Age Entry Age Entry Age Entry Age Entry Age Amortization Method (1) (1) (1) (1) (1) (1) (1) (1) (1) Asset Valuation Method Fair Value Fair Value Fair Value Fair Value Fair Value Fair Value Fair Value Fair Value 15-Year Smoothed
Market Method
Inflation 2.30% 2.50% 2.50% 2.63% 2.75% 2.75% 2.75% 2.75% 2.75% Salary Increases (2) (2) (2) (2) (2) (2) (2) (2) (2)
Investment Rate of Return 6.90% (3) 7.00% (3) 7.00% (3) 7.25% (3) 7.375% (3) 7.50% (3) 7.50% (3) 7.50% (3) 7.50% (3) Mortality (4) (4) (4) (4) (4) (4) (4) (4) (4)
(1) Level percentage of payroll, closed.
(2) Depending on age, service and type of employment.
(3) Net of pension plan investment expense, including inflation. (4) Mortality assumptions are based on mortality rates resulting from the most recent CalPERS Experience Study adopted by the CalPERS Board.

CITY OF COVINA
SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY – SAFETY
LAST TEN MEASUREMENT PERIODS*
See accompanying Note to Required Supplementary Information. (95)
Fiscal Year Ended June 30, 2023 2022 2021 2020 2019 2018 2017 2016 2015 Measurement Period June 30, 2022 2021 2020 2019 2018 2017 2016 2015 2014 Plan’s Proportion of the
Net Pension Liability 0.24672% 0.77033% 0.58950% 0.56627% 0.54852% 0.56064% 0.56696% 0.46197% 0.41430% Plan’s Proportionate Share
of the Net Pension Liability 16,953,344 $ 27,034,631 $ 39,280,317 $ 35,349,515 $ 32,026,302 $ 30,950,899 $ 26,302,740 $ 19,035,092 $ 15,540,223 $ Plan’s Covered Payroll 7,155,333 $ 6,861,894 $ 6,490,821 $ 6,548,655 $ 6,325,051 $ 6,325,051 $ 6,672,936 $ 6,433,232 $ 6,575,024 $ Plan’s Proportionate Share
of the Net Pension Liability
as a Percentage of Covered Payroll 236.93% 393.98% 605.17% 539.80% 506.34% 489.34% 394.17% 295.89% 236.35% Plan’s Proportionate Share
of the Fiduciary Net Position
as a Percentage of the Plan’s
Total Pension Liability 79.78% 79.78% 75.26% 75.26% 85.14% 85.14% 79.48% 81.50% 84.45% Notes to Schedule:

Benefit Changes:

There were no changes in benefits.

Changes in Assumptions:

From fiscal year June 30, 2016 to June 30, 2017: There were no changes in assumptions.

From fiscal year June 30, 2017 to June 30, 2018: The discount rate was reduced from 7.65% to 7.15%.

From fiscal year June 30, 2018 to June 30, 2022: There were no significant changes in assumptions.

From fiscal year June 30, 2022 to June 30, 2023: The discount rate and long-term rate of return decreased from 7.15% to 6.90% and the inflation rate decreased from 2.50% to 2.30%. * Fiscal year 2015 was the first year of implementation and therefore only nine years are shown.

From fiscal year June 30, 2015 to June 30, 2016: GASB 68, paragraph 68 states that the long-term expected rate of return should be determined net of pension plan investment expense but without reduction for pension plan administrative expense. The discount rate of 7.50% used for the June 30, 2014 measurement date was net of administrative expenses. The discount rate of 7.65% used for the June 30, 2015 measurement date is without reduction of pension plan administrative expense.

Safety

CITY OF COVINA
SCHEDULE OF CONTRIBUTIONS – SAFETY
LAST TEN FISCAL YEARS*
See accompanying Note to Required Supplementary Information. (96)
Fiscal Year Ended June 30, 2023 2022 2021 2020 2019 2018 2017 2016 2015 Contractually Required Contribution
(Actuarially Determined) 2,241,062 $ 4,346,122 $ 3,885,326 $ 2,758,911 $ 2,360,587 $ 1,969,480 $ 1,730,321 $ 1,549,717 $ 1,241,075 $ Contributions in Relation to the Actuarially
Determined Contributions (2,241,062) (36,196,719) (3,885,326) (2,758,911) (2,360,587) (1,969,480) (1,730,321) (1,549,717) (1,241,075) Contribution Deficiency (Excess) - $ (31,850,597) $ - $ - $ - $ - $ - $ - $ - $ Covered Payroll 7,971,446 $ 7,155,333 $ 6,861,894 $ 6,490,821 $ 6,548,655 $ 6,325,051 $ 6,325,051 $ 6,672,936 $ 6,433,232 $ Contributions as a Percentage
of Covered Payroll 28.11% 505.87% 56.62% 42.50% 36.05% 31.14% 27.36% 23.22% 19.29% Notes to Schedule:

Valuation Date June 30, 2018 June 30, 2018 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014 June 30, 2013 June 30, 2012 Methods and Assumptions Used to Determine Contribution Rates:

Actuarial Cost Method Entry Age Entry Age Entry Age Entry Age Entry Age Entry Age Entry Age Entry Age Entry Age Amortization Method (1) (1) (1) (1) (1) (1) (1) (1) (1) Asset Valuation Method Fair Value Fair Value Fair Value Fair Value Fair Value Fair Value Fair Value Fair Value 15-Year Smoothed
Market Method
Inflation 2.30% 2.50% 2.50% 2.63% 2.75% 2.75% 2.75% 2.75% 2.75% Salary Increases (2) (2) (2) (2) (2) (2) (2) (2) (2)
Investment Rate of Return 6.9% (3) 7.00% (3) 7.00% (3) 7.25% (3) 7.375% (3) 7.50% (3) 7.50% (3) 7.50% (3) 7.50% (3) Mortality (4) (4) (4) (4) (4) (4) (4) (4) (4)
(1) Level percentage of payroll, closed.
(2) Depending on age, service and type of employment.
(3) Net of pension plan investment expense, including inflation. (4) Mortality assumptions are based on mortality rates resulting from the most recent CalPERS Experience Study adopted by the CalPERS Board. * Fiscal year 2015 was the first year of implementation and therefore only nine years are shown.

Safety

CITY OF COVINA

OTHER POSTEMPLOYMENT BENEFITS (OPEB)

SCHEDULE OF CHANGES IN THE NET OPEB LIABILITY AND RELATED RATIOS LAST TEN MEASUREMENT PERIODS*
See accompanying Note to Required Supplementary Information. (97)
Fiscal Year-End June 30, 2023 2022 2021 2020 2019 2018
Measurement Date June 30, 2022 2021 2020 2019 2018 2017 Total OPEB Liability:

Service Cost $ 263,838 252,323 $ 315,436 $ 271,591 $ 173,634 $ 155,856 $ Interest on Total OPEB Liability 252,672 273,031 234,306 253,720 285,949 287,858 Changes in Benefit Terms - - 70,024 - - -
Difference Between Expected and Actual Experience - 737,525 770,579 - - (963,933) Change in Assumptions and Other Inputs (286,721) (348,629) 355,233 (631,555) 1,264,415 - Benefit Payments, Including Refunds and the
Implied Subsidy Benefit Payments (554,251) (556,834) (510,755) (457,669) (411,596) (413,635) Net Change in Total OPEB Liability 421,907 248,035 (388,953) 422,875 348,469 30,079 Total OPEB Liability - Beginning of Year 7,577,325 7,188,372 6,906,415 7,329,290 6,557,946 6,527,867 Total OPEB Liability - End of Year (a) 7,610,279 7,188,372 7,329,290 7,577,325 6,906,415 6,557,946 Plan Fiduciary Net Position:

Contributions - Employer 1,056,834 654,251 510,755 457,669 411,596 413,635 Net Investment Income 47,030 (127,979) 27,077 34,489 9,519 18,600 Administrative Expenses (6,675) (3,353) (3,091) (2,728) (2,630) (2,372) Benefit Payments, Including Refunds and the
Implied Subsidy Benefit Payments (554,251) (556,834) (510,755) (457,669) (411,596) (413,635) Net Change in Plan Fiduciary Net Position 543,677 (34,654) 23,986 31,761 6,889 16,228 Plan Fiduciary Net Position - Beginning of Year 546,560 1,090,237 490,813 522,574 483,924 467,696 Plan Fiduciary Net Position - End of Year (b) 1,055,583 1,090,237 522,574 546,560 490,813 483,924 Net OPEB Liability - Ending (a)-(b) $ 6,098,135 6,554,696 $ 7,030,765 $ 6,806,716 $ 6,415,602 $ 6,074,022 $ Plan Fiduciary Net Position as a Percentage of the
Total OPEB Liability 13.87% 15.17% 7.21% 7.13% 7.11% 7.38% Covered - Employee Payroll 20,087,715 $ 19,596,677 $ 18,127,870 $ 17,042,879 $ 13,316,004 $ 12,959,615 $ Net OPEB Liability as Percentage of
Covered - Employee Payroll 32.63% 31.12% 38.78% 39.94% 48.18% 46.87% Notes to Schedule:

Benefit Changes:

There were no changes in benefits.

Changes in Assumptions:
* Fiscal year 2018 was the first year of implementation and therefore only six years are shown.

The fiscal year ended June 30, 2018 is the first year of implementation. For fiscal year ended June 30, 2020, discount rate was changed to 3.17% from 3.65%, inflation rate remained 3.0% and health care trend was changed to 5.9% in 2019 decreasing to 5% in 2028. For fiscal year ended June 30, 2021, the discount rate was changed to

3.34% from 3.17% and the health care trend rate was changed to 4% decreasing to 3.5% for 2024 and later years. For fiscal year ended June 30, 2022, the discount rate was changed to 3.81% from 3.34% and the health care trend rate was changed to 4.0% for 2021-2023, 5.2% for 2024-2069 and 4.0% for 2070 and later June 30, 2023, the discount rate was changed to 4.28% from 3.81% and the health care trend rate was changed to 6.50 percent for 2022, 6.00 percent for 2023, 5.50 percent for 2024,

5.25 percent for 2025-2029, 5.00 percent for 2030-2039, 4.75 precent for 2040-2049, 4.50 percent for 2050-2069, and 4.00 percent for 2070 and later years; Medicare ages: 4 50 percent for 2022-2029 and 4 00 percent for 2030 and later years

CITY OF COVINA

OTHER POSTEMPLOYMENT BENEFITS (OPEB)

SCHEDULE OF CONTRIBUTIONS
LAST TEN FISCAL YEARS*
See accompanying Note to Required Supplementary Information. (98)
Fiscal Year Ended June 30, 2023 2022 2021 2020 2019 2018 Actuarially Determined Contribution 701,634 $ 490,144 $ 556,834 $ 511,353 $ 497,668 $ 409,995 $ Contributions in Relation to the Actuarially
Determined Contributions (559,989) (553,834) (477,026) (511,353) (497,668) (409,995) Contribution Deficiency (Excess) 141,645 $ (63,690) $ 79,808 $ - $ - $ - $ Covered Employee Payroll 21,814,848 $ 20,087,715 $ 19,596,677 $ 18,127,870 $ 17,042,879 $ 13,316,004 $ Contributions as a Percentage
of Covered Employee Payroll 2.57% 2.76% 2.43% 2.82% 2.92% 3.08% Notes to Schedule:

Valuation Date June 30, 2020 June 30, 2020 June 30, 2020 June 30, 2018 June 30, 2018 June 30, 2017 Methods and Assumptions Used to Determine Contribution Rates:

Discount Rate 3.69% 1.92% 2.45% 3.17% 3.65% 4.50%
Inflation 2.75% 2.75% 2.75% 3.00% 3.00% 2.75%
Mortality Rate (2) (2) (2) (1) (1) (1)
Healthcare Trend Rate
(1) 2014 CalPERS Mortality Rate for Active Safety, Retired Safety and Active Miscellaneous. (2) 2017 CalPERS Mortality Rate for Active Safety, Retired Safety and Active Miscellaneous. * Fiscal year 2018 was the first year of implementation and therefore only six years are shown.

CITY OF COVINA

BUDGETARY COMPARISON SCHEDULE

GENERAL FUND
YEAR ENDED JUNE 30, 2023
See accompanying Note to Required Supplementary Information. (99)
Variance with
Final Budget
Positive
Original Final Actual (Negative)
BUDGETARY FUND BALANCE - JULY 1 $ 27,399,126 27,399,126 $ 27,399,126 $ - $ Resources (Inflows):

Property Taxes 14,519,000 14,619,000 16,235,596 1,616,596 Sales Tax, Intergovernmental 19,000,000 19,900,000 20,281,592 381,592 Transient Occupancy Taxes 50,000 160,000 193,649 33,649 Property Transfer Taxes 200,000 200,000 214,879 14,879
Business License Taxes 335,000 335,000 430,348 95,348
Utility User Taxes 4,840,000 4,970,000 6,041,869 1,071,869 Franchise Taxes 2,106,000 2,106,000 2,393,981 287,981
Licenses and Permits 1,355,500 1,395,500 1,565,187 169,687 Intergovernmental 686,006 712,751 959,936 247,185
Charges for Services 4,564,183 4,480,171 4,752,066 271,895 Fines and Forfeits 910,000 910,000 1,340,191 430,191
Investment Earnings 89,000 89,000 367,176 278,176
Miscellaneous 195,605 608,210 766,551 158,341
Lease Proceeds - - 1,819 1,819
Transfers In 3,300,000 300,000 300,000 -
Amounts Available for Appropriation 79,549,420 78,184,758 83,243,966 5,059,208 Charges to Appropriations (Outflows):

Current:

General Government 2,755,528 3,041,526 2,599,832 441,694 Public Safety 35,338,837 32,481,837 29,910,759 2,571,078 Public Works 2,547,419 2,675,969 2,359,745 316,224
Culture and Recreation 4,957,054 5,211,367 4,493,659 717,708 Community Development 2,718,534 4,019,479 2,876,568 1,142,911 Debt Service:

Principal Retirement 2,309,742 2,309,742 2,309,742 -
Interest and Fiscal Charges 1,119,875 1,122,925 1,124,775 (1,850) Transfers Out 2,725,772 9,204,727 4,251,080 4,953,647
Total Charges to Appropriation 54,472,761 60,067,572 49,926,160 10,141,412 BUDGETARY FUND BALANCE - JUNE 30 $ 18,117,186 25,076,659 $ 33,317,806 $ 15,200,620 $ Budgeted Amounts

CITY OF COVINA

BUDGETARY COMPARISON SCHEDULE

MEASURE W FUND
YEAR ENDED JUNE 30, 2023
See accompanying Note to Required Supplementary Information. (100)
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
BUDGETARY FUND BALANCE - JULY 1 $ 1,701,963 1,701,963 $ - $ Resources (Inflows):

Intergovernmental 7,865,084 7,362,948 (502,136)
Investment Earnings 2,800 107,610 104,810
Amounts Available for Appropriation 9,569,847 9,172,521 (397,326) Charges to Appropriations (Outflows):

Capital Outlay 1,711,922 420,895 1,291,027
Total Charges to Appropriation 1,711,922 420,895 1,291,027 BUDGETARY FUND BALANCE - JUNE 30 $ 8,751,626 7,857,925 $ 893,701 $

CITY OF COVINA

BUDGETARY COMPARISON SCHEDULE

PARK DEVELOPMENT FUND
YEAR ENDED JUNE 30, 2023
See accompanying Note to Required Supplementary Information. (101)
Variance with
Final Budget
Positive
Original Budget Actual (Negative)
BUDGETARY FUND BALANCE (DEFICIT) - JULY 1 $ (215,317) (215,317) $ (215,317) $ - $ Resources (Inflows):

Intergovernmental 16,547,532 16,547,532 304,422 (16,243,110) Transfers In 4,446,898 4,446,898 716,512 (3,730,386)
Amounts Available for Appropriation 20,779,113 20,779,113 805,617 (19,973,496) Charges to Appropriations (Outflows):

Capital Outlay 20,501,518 20,501,518 810,581 19,690,937 Total Charges to Appropriation 20,501,518 20,501,518 810,581 19,690,937 BUDGETARY FUND BALANCE (DEFICIT) - JUNE 30 $ 277,595 277,595 $ (4,964) $ (282,559) $ Budgeted Amounts

CITY OF COVINA

NOTE TO REQUIRED SUPPLEMENTARY INFORMATION
JUNE 30, 2023
(102)
NOTE 1 STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
A. Budgetary Information
The City follows these procedures in establishing the budgetary data reflected in the financial statements:

1. City departments submit budget and service requests to the City Manager. The City Manager prepares a recommended budget to be presented to the City Council.

2. The annual budget is adopted by the City Council on or before June 30 of each fiscal year after holding public hearings to receive input for the general operation of the City. The operating budget includes proposed expenditures and the means of financing them.

3. The appropriated budget is prepared by fund, program and activity. Departments may make appropriation transfers within activities. The City Manager is authorized to make appropriation transfers between activities within funds excluding the contingency appropriation. The City Council approves total budgeted appropriations and any amendments between funds and the use of contingency appropriation. This appropriated budget covers City expenditures in all governmental funds. Actual expenditures may not exceed budgeted appropriations at the fund level. Budget figures used in the accompanying financial statements are the original budget including prior year carryovers and the final budget including current year amendments.

4. Formal budgetary integration is employed as a management control device during the year. Commitments for materials and services, such as purchase orders and contracts, are recorded as encumbrances to assist in controlling expenditures.

Encumbrances at year-end lapse, and then are added to the following year’s budgeted appropriations.

5. Annual budgets for governmental funds are adopted on a basis consistent with accounting principles generally accepted in the United States of America.

Accordingly, actual revenues and expenditures can be compared with related budgeted amounts without any significant reconciling items other than the American Rescue Plan Act (ARPA) Fund which did not have an adopted budget. No budgetary comparisons are presented for the proprietary funds, as the City is not legally required to adopt budgets for this fund type.

6. Appropriation for capital projects and certain grants and contributions authorized but not constructed or completed during the year lapse at year-end, and then are included as part of appropriations in the following years’ annual budget.

7. Under Article XIIIB of the California Constitution (the Gann Spending Limitation), the City is restricted as to the amount of annual appropriations from proceeds of taxes, and if proceeds of taxes exceed allowed appropriations, the excess must either be refunded to the State Controller or returned to the taxpayers through revised tax rates, revised fee schedules or other refund arrangements.

SUPPLEMENTARY INFORMATION

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CITY OF COVINA

OTHER GOVERNMENTAL FUNDS

NONMAJOR GOVERNMENTAL FUNDS
(105)
Special revenue funds account for revenues derived from specific taxes or other earmarked revenue sources. They are usually required by statute or local ordinance and /or resolution to finance particular functions, or activities. Non-major special revenue governmental funds of the City are as follows:

Community Development Block Grant Fund is a special revenue fund that accounts for the funding from the Department of Housing and Urban Development (HUD) in the form of a Community Block Grant (CDBG) program. The program has specific federal guidelines and all CDBG fund expenditures are monitored for compliance with both federally mandated rules and regulations and County of Los Angeles regulations.

Proposition A Transit Fund accounts for the receipts of the City’s share of the 1/2 cent sales tax levied in Los Angeles County for local transit uses.

Law Enforcement Fund accounts for federal and state local law enforcement grants and subventions to finance certain police activities.

Narcotic Seizure Fund accounts for receipts and disbursements associated with the federal, state and local narcotic seizure programs.

State Gas Tax Fund accounts for money apportioned by state statutes of the State of California to provide financing for street maintenance and improvements.

Proposition C Local Return Fund accounts for financial activities for the City’s share of Proposition C monies; designated for transportation related activities.

Air Quality Improvement Fund accounts for the motor vehicle fee for air and environmental improvements.

Municipal Parking District Fund accounts for receipts and expenditures for electricity, lot maintenance and engineering services in the various municipal parking lots.

Lighting Assessment District Fund accounts for special assessment collections from benefited properties for street lighting energy and maintenance.

Landscaping Assessment District Fund accounts for special assessment collections from benefited properties for landscape maintenance activities.

Community Facilities District Fund accounts for special assessment collections from benefited properties for community facilities maintenance activities.

Shoppers Lane Parking District Fund accounts for certain business tax registrations to finance parking maintenance and improvements in Shoppers Lane.

Measure M Fund accounts for monies received from Measure M allocation, which can be used to major street resurfacing, rehabilitation and reconstruction; pothole repair; left turn signals; bikeway; pedestrian improvements; streetscapes; signal synchronizations; and transit operations.

CITY OF COVINA

OTHER GOVERNMENTAL FUNDS

NONMAJOR GOVERNMENTAL FUNDS (CONTINUED)
(106)
TDA Grant Fund accounts for monies received from the California State Transit Development Act of 1971 on a per capita basis to California cities for transit and non-transit related purposes that comply with regional transition plans, which can be used for construction of pedestrian and bicycle facilities.

Road Maintenance and Rehabilitation Act Fund accounts for the deferred maintenance on the state highway system and the local street and road system.

PEG access Television Fund accounts for the fees received from the cable operators for administration and improvement to any public, educational, and government access television.

Housing Authority Fund administers the housing assets, liabilities, duties, and obligations related to the housing activities retained by the City following the dissolution of the Covina Redevelopment Agency.

This fund receives the majority of its revenues form collections and interest on loans.

Measure R Fund accounts for monies received from Measure R allocation, which can be used for major street resurfacing, rehabilitation and reconstruction; pothole repair; left turn signals; bikeway; pedestrian improvements; streetscapes; signal synchronizations; and transit operations.

Other Grants Fund accounts for the various state grant monies for various programs of the City.

Capital projects funds are used to finance and account for the acquisition and construction of major capital facilities other than those financed by other governmental type and proprietary funds. Non-major capital projects governmental funds of the City are as follows:

General Capital Fund accounts for major infrastructure and general improvements not accounted for in other governmental and proprietary funds.

Covina Revitalization Projects Fund accounts for the proceeds from the issuance of 2004 Taxable Tax Allocation Bonds used for the Covina Revitalization Project No. One project cost.

Transportation Fund accounts for monies used for various Public Works Capital Improvement Projects.

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CITY OF COVINA

COMBINING BALANCE SHEET

NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2023
(108)
Community
Development Law
Block Grant Proposition A Enforcement
ASSETS
Cash and Investments - $ 2,022,614 $ 1,304 $
Cash and Investments - Restricted - - -
Receivables:

Accounts 15,045 - -
Interest - - -
Leases - - -
Loans - 252,505 -
Due from Other Governments 21,974 - 71,065
Prepaid Items 8,360 - -
Total Assets 274,479 $ 2,046,019 $ 72,369 $

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES

LIABILITIES
Accounts Payable 3,682 $ 90,959 $ 5,188 $
Accrued Liabilities - - -
Deposits Payable - - -
Due to Other Governments 252,505 - -
Due to Other Funds 18,292 - 67,182
Unearned Revenue - 122 -
Total Liabilities 274,479 91,081 72,370

DEFERRED INFLOWS OF RESOURCES
Deferred Inflows - Leases - - -
Unavailable Revenue - - 15,414
Total Deferred Inflows of Resources - - 15,414

FUND BALANCES (DEFICITS)
Nonspendable 8,360 - -
Restricted for:

Redevelopment and Housing - - -
Community Development - - -
Law Enforcement - - -
Transportation and Street Projects - 1,946,578 -
Air Quality Projects - - -
Assessment Districts - - -
Culture and Recreation - - -
Storm Water - - -
Other Capital Projects - - -
Unassigned - - (15,415)
Total Fund Balances (Deficits) - 1,954,938 (15,415)
Total Liabilities, Deferred Inflows of
Resources, and Fund Balances 274,479 $ 2,046,019 $ 72,369 $

CITY OF COVINA

COMBINING BALANCE SHEET (CONTINUED)

NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2023
(109)
Air Municipal Lighting
Narcotics State Gas Quality Parking Assessment
Seizure Tax Proposition C Improvement District District $ 78,803 336,817 $ 1,654,064 $ 195,834 $ 659,475 $ - $
- - - - - -
- - - 16,825 1,383 -
- - - - 6 -
- - - - 21,541 -
- - - - - -
112,649 - - - 14,529 2,543
- - - - - -
$ 191,452 336,817 $ 1,654,064 $ 212,659 $ 696,934 $ 2,543 $ $ 2,945 - $ 82,140 $ 140 $ 7,817 $ 20,206 $
- - - - 138 -
- - - - - 13,875
- - - - - -
- - - - - 24,794
- - - - 5 -
2,945 - 82,140 140 7,960 58,875
- - - - 21,470 -
- - - - - -
- - - - 21,470 -
- - - - - -
- - - - - -
- - - - - -
- 336,817 - - - -
188,507 - 1,571,924 - - -
- - - 212,519 - -
- - - - 667,504 -
- - - - - -
- - - - - -
- - - - - -
- - - - - (56,332)
188,507 336,817 1,571,924 212,519 667,504 (56,332)
$ 191,452 336,817 $ 1,654,064 $ 212,659 $ 696,934 $ 2,543 $

CITY OF COVINA

COMBINING BALANCE SHEET (CONTINUED)

NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2023
(110)
Landscaping Community Shoppers Lane
Assessment Facilities Parking
District District District
ASSETS
Cash and Investments 529,675 $ 248,940 $ 42,546 $
Cash and Investments - Restricted - - -
Receivables:

Accounts - - -
Interest - - -
Leases - - -
Loans - - -
Due from Other Governments 2,437 9,125 -
Prepaid Items - - -
Total Assets 532,112 $ 258,065 $ 42,546 $

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES

LIABILITIES
Accounts Payable 3,155 $ - $ - $
Accrued Liabilities - - -
Deposits Payable 13,875 - -
Due to Other Governments - - -
Due to Other Funds - - -
Unearned Revenue - - 523
Total Liabilities 17,030 - 523

DEFERRED INFLOWS OF RESOURCES
Deferred Inflows - Leases - - -
Unavailable Revenue - - -
Total Deferred Inflows of Resources - - -

FUND BALANCES (DEFICITS)
Nonspendable - - -
Restricted for:

Redevelopment and Housing - - -
Community Development - - -
Law Enforcement - - -
Transportation and Street Projects - - -
Air Quality Projects - - -
Assessment Districts 515,082 258,065 42,023
Culture and Recreation - - -
Storm Water - - -
Other Capital Projects - - -
Unassigned - - -
Total Fund Balances (Deficits) 515,082 258,065 42,023
Total Liabilities, Deferred Inflows of
Resources, and Fund Balances 532,112 $ 258,065 $ 42,546 $

CITY OF COVINA

COMBINING BALANCE SHEET (CONTINUED)

NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2023
(111)
Road PEG
TDA Maintenance and Access Housing
Measure M Grant Rehabilitation Television Authority
$ - 864,652 $ 2,196,807 $ 567,607 $ 3,519,344 $
- - - - -
- - - 16,378 -
- - - - -
- - - - -
- - - - -
- 191 200,677 - -
- - - - 85
$ - 864,843 $ 2,397,484 $ 583,985 $ 3,519,429 $
$ - 450,424 $ - $ 1,200 $ 66,303 $
- - - - -
- - - - 18,134
- - - - -
- - - - -
- - - - -
- 450,424 - 1,200 84,437
- - - - -
- - - - -
- - - - -
- - - - 85
- - - - 3,434,907
- - - - -
- - - - -
- 414,419 2,397,484 - -
- - - - -
- - - - -
- - - 582,785 -
- - - - -
- - - - -
- - - - -
- 414,419 2,397,484 582,785 3,434,992
$ - 864,843 $ 2,397,484 $ 583,985 $ 3,519,429 $

CITY OF COVINA

COMBINING BALANCE SHEET (CONTINUED)

NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2023
(112)
Total
Other Special
Measure R Grants Fund Revenue Funds
ASSETS
Cash and Investments 471,388 $ 382,480 $ 13,772,350 $
Cash and Investments - Restricted 291 - 291
Receivables:

Accounts - 5,405 55,036
Interest - - 6
Leases - - 21,541
Loans - - 252,505
Due from Other Governments - - 435,190
Prepaid Items - - 8,445
Total Assets 471,679 $ 387,885 $ 14,545,364 $

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES

LIABILITIES
Accounts Payable - $ 16,630 $ 750,789 $
Accrued Liabilities - - 138
Deposits Payable - - 45,884
Due to Other Governments - - 252,505
Due to Other Funds - - 110,268
Unearned Revenue - 240,223 240,873
Total Liabilities - 256,853 1,400,457

DEFERRED INFLOWS OF RESOURCES
Deferred Inflows - Leases - - 21,470
Unavailable Revenue - - 15,414
Total Deferred Inflows of Resources - - 36,884

FUND BALANCES (DEFICITS)
Nonspendable - - 8,445
Restricted for:

Redevelopment and Housing - - 3,434,907
Community Development - - -
Law Enforcement - - 336,817
Transportation and Street Projects 471,679 131,032 7,121,623 Air Quality Projects - - 212,519
Assessment Districts - - 1,482,674
Culture and Recreation - - 582,785
Storm Water - - -
Other Capital Projects - - -
Unassigned - - (71,747)
Total Fund Balances (Deficits) 471,679 131,032 13,108,023 Total Liabilities, Deferred Inflows of
Resources, and Fund Balances 471,679 $ 387,885 $ 14,545,364 $

CITY OF COVINA

COMBINING BALANCE SHEET (CONTINUED)

NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2023
(113)
Covina Total Total Nonmajor
General Revitalization Capital Governmental
Projects Projects Transportation Projects Funds
$ 272,718 1,819,454 $ - $ 2,092,172 $ 15,864,522 $
- - - - 291
- - - - 55,036
- - - - 6
- - - - 21,541
- - - - 252,505
- 188,268 754,595 942,863 1,378,053
- - - - 8,445
$ 272,718 2,007,722 $ 754,595 $ 3,035,035 $ 17,580,399 $ $ 6,889 200,794 $ 88,990 $ 296,673 $ 1,047,462 $
- 55,346 - 55,346 55,484
- - - - 45,884
- - - 252,505
- - 665,605 665,605 775,873
- 25,000 - 25,000 265,873
6,889 281,140 754,595 1,042,624 2,443,081
- - - - 21,470
- 74,892 581,107 655,999 671,413
- 74,892 581,107 655,999 692,883
- - - - 8,445
- - - - 3,434,907
265,829 - - 265,829 265,829
- 90,826 - 90,826 427,643
- 793,849 - 793,849 7,915,472
- - - - 212,519
- - - - 1,482,674
- 448,120 - 448,120 1,030,905
- 6,032 - 6,032 6,032
- 312,863 - 312,863 312,863
- - (581,107) (581,107) (652,854)
265,829 1,651,690 (581,107) 1,336,412 14,444,435
$ 272,718 2,007,722 $ 754,595 $ 3,035,035 $ 17,580,399 $

CITY OF COVINA

COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES

IN FUND BALANCES

NONMAJOR GOVERNMENTAL FUNDS
YEAR ENDED JUNE 30, 2023
(114)
Community
Development Law
Block Grant Proposition A Enforcement

REVENUES
Property Taxes $ - - $ - $
Business License Taxes - - -
Intergovernmental 403,095 1,322,690 551,457
Charges for Services - 102,550 -
Special Assessments - - -
Investment Earnings - 39,260 2,715
Miscellaneous 41,799 - -
Total Revenues 403,095 1,506,299 554,172

EXPENDITURES
Current:

Public Safety - - 432,576
Public Works - - -
Culture and Recreation - - -
Transit 967,643 - -
Redevelopment and Housing 217,498 - -
Capital Outlay 100,000 - -
Debt Service:

Principal Retirement 125,000 - -
Interest - 60,597 -
Total Expenditures 403,095 1,067,643 432,576

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 438,656 - 121,596

OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out - - -
Total Other Financing Sources (Uses) - - -
NET CHANGE IN FUND BALANCES 438,656 - 121,596
Fund Balances (Deficits) - Beginning of Year - 1,516,282 (137,011) FUND BALANCES (DEFICITS) - END OF YEAR $ 1,954,938 - $ (15,415) $

CITY OF COVINA

COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES

IN FUND BALANCES

NONMAJOR GOVERNMENTAL FUNDS (CONTINUED)
YEAR ENDED JUNE 30, 2023
(115)
Air Municipal Lighting
Narcotics State Gas Quality Parking Assessment
Seizure Tax Proposition C Improvement District District $ - - $ - $ - $ 184,002 $ - $
- - - - - -
1,288,404 56,908 1,064,677 66,595 - -
- - - - 110,114 -
- - - - - 131,628
2,136 6,146 34,876 3,680 163 -
- - - - - -
1,290,540 63,054 1,099,553 70,275 294,279 131,628
- - - - - -
1,193,545 - - 11,162 156,766 273,118
- - - - - -
- - - - - -
- - - - - -
- - 1,080,244 - - -
- - - - - -
- - - - - -
1,193,545 - 1,080,244 11,162 156,766 273,118
96,995 63,054 19,309 59,113 137,513 (141,490)
- - - - - 109,619
- - - - - -
- - - - - 109,619
96,995 63,054 19,309 59,113 137,513 (31,871)
91,512 273,763 1,552,615 153,406 529,991 (24,461)
$ 188,507 336,817 $ 1,571,924 $ 212,519 $ 667,504 $ (56,332) $

CITY OF COVINA

COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES

IN FUND BALANCES

NONMAJOR GOVERNMENTAL FUNDS (CONTINUED)
YEAR ENDED JUNE 30, 2023
(116)
Landscaping Community Shoppers Lane
Assessment Facilities Parking
District District District

REVENUES
Property Taxes $ - - $ - $
Business License Taxes - - 1,090
Intergovernmental - - -
Charges for Services - - 16,274
Special Assessments 206,744 289,574 -
Investment Earnings - - -
Miscellaneous - - -
Total Revenues 206,744 289,574 17,364

EXPENDITURES
Current:

Public Safety - - -
Public Works 76,640 5,637 8,854
Culture and Recreation - - -
Transit - - -
Redevelopment and Housing - - -
Capital Outlay - - -
Debt Service:

Principal Retirement - - -
Interest - - -
Total Expenditures 76,640 5,637 8,854

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 283,937 130,104 8,510

OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out (300,000) - -
Total Other Financing Sources (Uses) - (300,000) -
NET CHANGE IN FUND BALANCES (16,063) 130,104 8,510
Fund Balances (Deficits) - Beginning of Year 384,978 274,128 33,513 FUND BALANCES (DEFICITS) - END OF YEAR $ 258,065 515,082 $ 42,023 $

CITY OF COVINA

COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES

IN FUND BALANCES

NONMAJOR GOVERNMENTAL FUNDS (CONTINUED)
YEAR ENDED JUNE 30, 2023
(117)
Road PEG
TDA Maintenance and Access Housing
Measure M Grant Rehabilitation Television Authority
$ - - $ - $ - $ - $
- - - - -
- 903,023 1,145,223 - -
- - - 69,897 -
- - - - -
- 15,736 39,087 - 100,759
- - - - 3,734
- 918,759 1,184,310 69,897 104,493
- - - - -
- - - - -
- - - 16,095 -
- - - - -
- - - - 501,917
- 1,122,362 - - -
- - - - -
- - - - -
- 1,122,362 - 16,095 501,917
- (203,603) 1,184,310 53,802 (397,424)
- - - - -
- - - - -
- - - - -
- (203,603) 1,184,310 53,802 (397,424)
- 618,022 1,213,174 528,983 3,832,416
$ - 414,419 $ 2,397,484 $ 582,785 $ 3,434,992 $

CITY OF COVINA

COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES

IN FUND BALANCES

NONMAJOR GOVERNMENTAL FUNDS (CONTINUED)
YEAR ENDED JUNE 30, 2023
(118)
Total
Other Special
Measure R Grants Fund Revenue Funds

REVENUES
Property Taxes - $ - $ 184,002 $
Business License Taxes - - 1,090
Intergovernmental 798,277 3,187,000 10,787,349
Charges for Services - - 298,835
Special Assessments - - 627,946
Investment Earnings 9,704 2,794 257,056
Miscellaneous - - 45,533
Total Revenues 807,981 3,189,794 12,201,811

EXPENDITURES
Current:

Public Safety - 3,032,043 3,464,619
Public Works - 53,491 1,779,213
Culture and Recreation - 56,035 72,130
Transit - - 967,643
Redevelopment and Housing - - 719,415
Capital Outlay 104,861 - 2,407,467
Debt Service:

Principal Retirement 205,000 - 330,000
Interest 164,659 - 225,256
Total Expenditures 474,520 3,141,569 9,965,743

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 48,225 333,461 2,236,068

OTHER FINANCING SOURCES (USES)
Transfers In - - 109,619
Transfers Out - - (300,000)
Total Other Financing Sources (Uses) - - (190,381)
NET CHANGE IN FUND BALANCES 48,225 333,461 2,045,687
Fund Balances (Deficits) - Beginning of Year 138,218 82,807 11,062,336 - -
FUND BALANCES (DEFICITS) - END OF YEAR $ 131,032 471,679 $ 13,108,023 $

CITY OF COVINA

COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES

IN FUND BALANCES

NONMAJOR GOVERNMENTAL FUNDS (CONTINUED)
YEAR ENDED JUNE 30, 2023
(119)
Covina Total Total Nonmajor
General Revitalization Capital Governmental
Projects Projects Transportation Projects Funds
$ - - $ - $ - $ 184,002 $
- - - - 1,090
- 253,145 1,420,575 1,673,720 12,461,069
- - - - 298,835
- 252,550 - 252,550 880,496
5,342 - - 5,342 262,398
- 2,475 - 2,475 48,008
5,342 508,170 1,420,575 1,934,087 14,135,898
- - - - 3,464,619
- - - - 1,779,213
- - - - 72,130
- - - - 967,643
- - - - 719,415
21,424 889,058 2,319,686 3,230,168 5,637,635
- - - - 330,000
- - - - 225,256
21,424 889,058 2,319,686 3,230,168 13,195,911
(16,082) (380,888) (899,111) (1,296,081) 939,987
- - 404,949 404,949 514,568
- - - - (300,000)
- - 404,949 404,949 214,568
(16,082) (380,888) (494,162) (891,132) 1,154,555
281,911 2,032,578 (86,945) 2,227,544 13,289,880
$ 265,829 1,651,690 $ (581,107) $ 1,336,412 $ 14,444,435 $

CITY OF COVINA

SUPPLEMENTARY INFORMATION

BUDGETARY COMPARISON SCHEDULE

COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 2023
(120)
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
BUDGETARY FUND BALANCE - JULY 1 $ - - $ - $
Resources (Inflows):

Intergovernmental 481,465 403,095 (78,370)
Amounts Available for Appropriation 481,465 403,095 (78,370) Charges to Appropriations (Outflows):

Redevelopment and Housing 295,868 217,498 78,370
Debt Service:

Principal 125,000 125,000 -
Interest and Fiscal Charges 60,597 60,597 -
Total Charges to Appropriation 481,465 403,095 78,370
BUDGETARY FUND BALANCE - JUNE 30 $ - - $ - $

CITY OF COVINA

SUPPLEMENTARY INFORMATION

BUDGETARY COMPARISON SCHEDULE

PROPOSITION A SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 2023
(121)
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
BUDGETARY FUND BALANCE - JULY 1 $ 1,516,282 1,516,282 $ - $ Resources (Inflows):

Intergovernmental 1,216,368 1,322,690 106,322
Charges for Services 104,371 102,550 (1,821)
Investment Earnings 7,500 39,260 31,760
Miscellaneous 42,699 41,799 (900)
Amounts Available for Appropriation 2,887,220 3,022,581 135,361 Charges to Appropriations (Outflows):

Transit 1,906,146 967,643 938,503
Capital Outlay 100,000 100,000 -
Total Charges to Appropriation 2,006,146 1,067,643 938,503 BUDGETARY FUND BALANCE - JUNE 30 $ 1,954,938 881,074 $ 1,073,864 $

CITY OF COVINA

SUPPLEMENTARY INFORMATION

BUDGETARY COMPARISON SCHEDULE

LAW ENFORCEMENT SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 2023
(122)
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
BUDGETARY FUND BALANCE (DEFICIT) - JULY 1 $ (137,011) (137,011) $ - $ Resources (Inflows):

Intergovernmental 520,587 551,457 30,870
Investment Earnings 2,500 2,715 215
Amounts Available for Appropriation 386,076 417,161 31,085 Charges to Appropriations (Outflows):

Public Safety 551,738 432,576 119,162
Total Charges to Appropriation 551,738 432,576 119,162
BUDGETARY FUND BALANCE (DEFICIT) - JUNE 30 $ (15,415) (165,662) $ 150,247 $

CITY OF COVINA

SUPPLEMENTARY INFORMATION

BUDGETARY COMPARISON SCHEDULE

NARCOTICS SEIZURE SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 2023
(123)
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
BUDGETARY FUND BALANCE - JULY 1 $ 273,763 273,763 $ - $ Resources (Inflows):

Intergovernmental - 56,908 56,908
Investment Earnings 1,100 6,146 5,046
Amounts Available for Appropriation 274,863 336,817 61,954 BUDGETARY FUND BALANCE - JUNE 30 $ 336,817 274,863 $ 61,954 $

CITY OF COVINA

SUPPLEMENTARY INFORMATION

BUDGETARY COMPARISON SCHEDULE

STATE GAS TAX SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 2023
(124)
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
BUDGETARY FUND BALANCE - JULY 1 $ 91,512 91,512 $ - $
Resources (Inflows):

Intergovernmental 1,412,590 1,288,404 (124,186)
Investment Earnings 1,200 2,136 936
Amounts Available for Appropriation 1,505,302 1,382,052 (123,250) Charges to Appropriations (Outflows):

Public Works 1,465,000 1,193,545 271,455
Total Charges to Appropriation 1,465,000 1,193,545 271,455 BUDGETARY FUND BALANCE - JUNE 30 $ 188,507 40,302 $ 148,205 $

CITY OF COVINA

SUPPLEMENTARY INFORMATION

BUDGETARY COMPARISON SCHEDULE

PROPOSITION C SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 2023
(125)
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
BUDGETARY FUND BALANCE - JULY 1 $ 1,552,615 1,552,615 $ - $ Resources (Inflows):

Intergovernmental 988,209 1,064,677 76,468
Investment Earnings 7,000 34,876 27,876
Amounts Available for Appropriation 2,547,824 2,652,168 104,344 Charges to Appropriations (Outflows):

Capital Outlay 2,531,403 1,080,244 1,451,159
Total Charges to Appropriation 2,531,403 1,080,244 1,451,159 BUDGETARY FUND BALANCE - JUNE 30 $ 1,571,924 16,421 $ 1,555,503 $

CITY OF COVINA

SUPPLEMENTARY INFORMATION

BUDGETARY COMPARISON SCHEDULE

AIR QUALITY IMPROVEMENT SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 2023
(126)
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
BUDGETARY FUND BALANCE - JULY 1 $ 153,406 153,406 $ - $ Resources (Inflows):

Intergovernmental 62,000 66,595 4,595
Investment Earnings 800 3,680 2,880
Amounts Available for Appropriation 216,206 223,681 7,475 Charges to Appropriations (Outflows):

Public Works 216,206 11,162 205,044
Total Charges to Appropriation 216,206 11,162 205,044
BUDGETARY FUND BALANCE - JUNE 30 $ 212,519 - $ 212,519 $

CITY OF COVINA

SUPPLEMENTARY INFORMATION

BUDGETARY COMPARISON SCHEDULE

MUNICIPAL PARKING SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 2023
(127)
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
BUDGETARY FUND BALANCE - JULY 1 $ 529,991 529,991 $ - $ Resources (Inflows):

Property Taxes 104,256 184,002 79,746
Charges for Services 80,344 110,114 29,770
Investment Earnings - 163 163
Amounts Available for Appropriation 714,591 824,270 109,679 Charges to Appropriations (Outflows):

Public Works 178,793 156,766 22,027
Total Charges to Appropriation 178,793 156,766 22,027
BUDGETARY FUND BALANCE - JUNE 30 $ 667,504 535,798 $ 131,706 $

CITY OF COVINA

SUPPLEMENTARY INFORMATION

BUDGETARY COMPARISON SCHEDULE

LIGHTING ASSESSMENT SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 2023
(128)
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
BUDGETARY FUND BALANCE (DEFICIT) - JULY 1 $ (24,461) (24,461) $ - $ Resources (Inflows):

Special Assessments 139,275 131,628 (7,647)
Transfers In 109,619 109,619 -
Amounts Available for Appropriation 224,433 216,786 (7,647) Charges to Appropriations (Outflows):

Public Works 248,894 273,118 (24,224)
Total Charges to Appropriation 248,894 273,118 (24,224) BUDGETARY FUND BALANCE (DEFICIT) - JUNE 30 $ (56,332) (24,461) $ (31,871) $

CITY OF COVINA

SUPPLEMENTARY INFORMATION

BUDGETARY COMPARISON SCHEDULE

LANDSCAPING ASSESSMENT SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 2023
(129)
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
BUDGETARY FUND BALANCE - JULY 1 $ 384,978 384,978 $ - $ Resources (Inflows):

Special Assessments 211,389 206,744 (4,645)
Amounts Available for Appropriation 596,367 591,722 (4,645) Charges to Appropriations (Outflows):

Public Works 151,054 76,640 74,414
Total Charges to Appropriation 151,054 76,640 74,414
BUDGETARY FUND BALANCE - JUNE 30 $ 515,082 445,313 $ 69,769 $

CITY OF COVINA

SUPPLEMENTARY INFORMATION

BUDGETARY COMPARISON SCHEDULE

COMMUNITY FACILITIES DISTRICT ASSESSMENT SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 2023
(130)
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
BUDGETARY FUND BALANCE - JULY 1 $ 274,128 274,128 $ - $ Resources (Inflows):

Special Assessments 176,681 289,574 112,893
Amounts Available for Appropriation 450,809 563,702 112,893 Charges to Appropriations (Outflows):

Public Works 8,850 5,637 3,213
Transfers Out 300,000 300,000 -
Total Charges to Appropriation 308,850 305,637 3,213
BUDGETARY FUND BALANCE - JUNE 30 $ 258,065 141,959 $ 116,106 $

CITY OF COVINA

SUPPLEMENTARY INFORMATION

BUDGETARY COMPARISON SCHEDULE

SHOPPERS LANE PARKING DISTRICT SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 2023
(131)
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
BUDGETARY FUND BALANCE - JULY 1 $ 33,513 33,513 $ - $
Resources (Inflows):

Business License Taxes 2,000 1,090 (910)
Charges for Services 13,000 16,274 3,274
Amounts Available for Appropriation 48,513 50,877 2,364 Charges to Appropriations (Outflows):

Public Works 8,700 8,854 (154)
Total Charges to Appropriation 8,700 8,854 (154)
BUDGETARY FUND BALANCE - JUNE 30 $ 42,023 39,813 $ 2,210 $

CITY OF COVINA

SUPPLEMENTARY INFORMATION

BUDGETARY COMPARISON SCHEDULE

MEASURE M SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 2023
(132)
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
BUDGETARY FUND BALANCE - JULY 1 $ 618,022 618,022 $ - $ Resources (Inflows):

Intergovernmental 1,839,977 903,023 (936,954)
Investment Earnings 3,600 15,736 12,136
Amounts Available for Appropriation 2,461,599 1,536,781 (924,818) Charges to Appropriations (Outflows):

Capital Outlay 2,302,078 1,122,362 1,179,716
Total Charges to Appropriation 2,302,078 1,122,362 1,179,716 BUDGETARY FUND BALANCE - JUNE 30 $ 414,419 159,521 $ 254,898 $

CITY OF COVINA

SUPPLEMENTARY INFORMATION

BUDGETARY COMPARISON SCHEDULE

TDA GRANT SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 2023
(133)
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
BUDGETARY FUND BALANCE - JULY 1 $ - - $ - $
Resources (Inflows):

Intergovernmental 45,978 - (45,978)
Amounts Available for Appropriation 45,978 - (45,978)
Charges to Appropriations (Outflows):

Capital Outlay 1,000 - 1,000
Total Charges to Appropriation 1,000 - 1,000
BUDGETARY FUND BALANCE - JUNE 30 $ - 44,978 $ (44,978) $

CITY OF COVINA

SUPPLEMENTARY INFORMATION

BUDGETARY COMPARISON SCHEDULE

ROAD MAINTENANCE AND REHABILITATION SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 2023
(134)
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
BUDGETARY FUND BALANCE - JULY 1 $ 1,213,174 1,213,174 $ - $ Resources (Inflows):

Intergovernmental 1,113,132 1,145,223 32,091
Investment Earnings 2,000 39,087 37,087
Amounts Available for Appropriation 2,328,306 2,397,484 69,178 Charges to Appropriations (Outflows):

Total Charges to Appropriation 1,110,881 - 1,110,881
BUDGETARY FUND BALANCE - JUNE 30 $ 2,397,484 1,217,425 $ 1,180,059 $

CITY OF COVINA

SUPPLEMENTARY INFORMATION

BUDGETARY COMPARISON SCHEDULE

PEG ACCESS TELEVISION SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 2023
(135)
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
BUDGETARY FUND BALANCE - JULY 1 $ 528,983 528,983 $ - $ Resources (Inflows):

Charges for Services 75,000 69,897 (5,103)
Amounts Available for Appropriation 603,983 598,880 (5,103) Charges to Appropriations (Outflows):

Culture and Recreation 18,300 16,095 2,205
Total Charges to Appropriation 18,300 16,095 2,205
BUDGETARY FUND BALANCE - JUNE 30 $ 582,785 585,683 $ (2,898) $

CITY OF COVINA

SUPPLEMENTARY INFORMATION

BUDGETARY COMPARISON SCHEDULE

HOUSING AUTHORITY SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 2023
(136)
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
BUDGETARY FUND BALANCE - JULY 1 $ 3,832,416 3,832,416 $ - $ Resources (Inflows):

Intergovernmental 1,269,791 - (1,269,791)
Investment Earnings 29,500 100,759 71,259
Miscellaneous - 3,734 3,734
Amounts Available for Appropriation 5,131,707 3,936,909 (1,194,798) Charges to Appropriations (Outflows):

Current:

Redevelopment and Housing 4,289,457 501,917 3,787,540
Total Charges to Appropriation 4,289,457 501,917 3,787,540 BUDGETARY FUND BALANCE - JUNE 30 $ 3,434,992 842,250 $ 2,592,742 $