Crescent City City Council
February 7, 2022

Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

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

Badawi & Associates, CPAs
Berkeley, California
December 31, 2021
128
INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM

AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE To the Honorable Mayor and Members of the City Council
of the City of Crescent City
Crescent City, California
Report on Compliance for Each Major Federal Program
We have audited the City of Crescent City, California (City)’s compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of the City’s major federal programs for the year ended June 30, 2021. The City’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs.

Management’s Responsibility
Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs.

Auditor’s Responsibility
Our responsibility is to express an opinion on compliance for each of the City’s major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the City’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of the City’s compliance.

Opinion on Each Major Federal Program
In our opinion, the City, complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2021.
129
< BADAWI&ASSOCIATES

CERTIFIED PUBLIC ACCOUNTANTS
Address: 2855 Telegraph Avenue, Suite 312 Berkeley, CA 94705 •Phone: 510.768.8251 • Fax: 510.768.8249 To the Honorable Mayor and Members of the City Council
of the City of Crescent City
Crescent City, California

Report on Internal Control Over Compliance
Management of the City is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the City’s internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control over compliance.

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

Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.

Badawi & Associates, CPAs
Berkeley, California
December 31, 2021
130
City of Crescent City
Schedule of Expenditures of Federal Awards
For the year ended June 30, 2021
Federal Agency or
Federal Grantor/Pass-Through CFDA Pass-Through Federal Subrecipient Grantor Program Title Number Number Expenditures Payment U.S. Department of Housing and Urban Development:

Housing Voucher Cluster:

Direct Programs:

Section 8 Housing Choice Vouchers 14.871 n/a $ - 3,581,938 $ COVID-19 - Section 8 Housing Choice Vouchers 14.871 n/a 124,402 - Housing Voucher Cluster Total 3,706,340 -
CDBG State Administered Program:

Passed through State of California Department of Housing And Community Development:

Community Development Block Grant 14.228 17-CDBG-12092 4,424,919 55,768 Community Development Block Grant 14.228 20-CDBG-12011 6,204 3,343 Community Development Block Grant 14.228 20-CDBG-12012 22,907 12,748 Community Development Block Grant 14.228 20-CDBG-12040 13,042 - Community Development Block Grant 14.228 20-CDBG-12056 17,794 - Community Development Block Grant 14.228 Loans Outstanding 40,376 - COVID-19 Community Development Block Grant 14.228 20-CDBG-CV1-00048 10,395 2,658 CDBG State Administered Program Total 4,535,637 71,859
Total U.S. Department of Housing and Urban Development 8,241,977 74,517 Department of Transportation
Passed through California Department of Transportation:

Highway Planning and Construction 20.205 ER-32D0(013) 535,526 - Total Department of Transportation 535,526 -
U.S. Department of Treasury
Passed through California Department of Finance
COVID-19 Coronavirus Relief Fund 21.019 N/A 82,392 -
Total Department of Commerce 82,392 -
U.S. Department of Justice:

Direct Programs:
2018 Bulletproof Vest Partnership 16.607 2018BUBX18095585 1,361 - Total U.S. Department of Justice 1,361 -
Total Federal Expenditures $ 8,861,256 $ 74,517
131
City of Crescent City
Notes to the Schedule of Expenditures of Federal Awards For the year ended June 30, 2021
A. Basis of Accounting
Funds received under the various grant programs have been recorded within the general fund, special revenue funds and enterprise funds of the City. The City utilizes the modified accrual method of accounting for the general fund and special revenue funds and full accrual basis of accounting for the enterprise funds. The accompanying Schedule of Expenditures of Federal Awards (Schedule) is presented in accordance with the requirements of U.S. code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Therefore, some amounts presented in the Schedule may differ from amounts presented in, or used in, the preparation of City’s basic financial statements.

B. Indirect Costs
The City did not elect to use the 10% de minimis indirect cost rate. 132
City of Crescent City
Schedule of Findings and Questioned Costs
For the year ended June 30, 2021
SECTION I – SUMMARY OF AUDITORS’ RESULTS
Financial Statements
Types of auditors’ report issued: Unmodified
Internal control over financial reporting:
x Material weakness identified? No
x Significant deficiency identified? None noted
Any noncompliance material to the financial statements noted? No Federal Awards
Internal control over major programs:
x Material weakness identified? No
x Significant deficiencies identified? None noted
Type of auditor’s report issued on compliance for major programs Unmodified Any audit findings disclosed that are required to be reported in accordance with Section 200.516 (a) of the Uniform Guidance? No Identification of major programs:

Dollar threshold used to distinguish between type A and type B program $750,000 Auditee qualified as low-risk auditee under
Section 200.520? Yes
133
CFDA Number(s) Name of Federal Cluster or Program Expenditures

14.228 CDBG State Administered Protram 4,535,637
Total Expenditures of all Major Programs $
Total Expenditures of Federal Award
Percentage of Total Expenditure of Federal Award
4,535,637
$ 8,861,256
51%
City of Crescent City
Schedule of Findings and Questioned Costs
For the year ended June 30, 2021
SECTION II – CURRENT YEAR FINDINGS
A. Current Year Findings- Financial Statement Audit
No current year financial statement audit finding.

B. Current Year Findings and Questioned Costs- Major Federal Award Program Audit No current year federal award program finding.

SECTION III – PRIOR YEAR FINDINGS
A. Prior Year Findings- Financial Statement Audit
No prior year financial statement audit finding.

B. Prior Year Findings and Questioned Costs- Major Federal Award Program Audit No prior year federal award program finding.
134
Crescent City, California
Auditor’s Communication with
Those Charged with Governance
For the year ended June 30, 2021
City of
Crescent City
ha BADAWI&ASSOCIATES

CERTIFIED PUBLIC ACCOUNTANTS
December 31, 2021
To The Honorable Mayor and Members
of the City Council of the City of Crescent City
Crescent City, California
We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Crescent City, California (City) for the year ended June 30, 2021. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards, Government Auditing Standards and the Uniform Guidance, as well as certain information related to the planned scope and timing of our audit.

Our Responsibilities under U.S. Generally Accepted Auditing Standards, Government Auditing Standards, and the Uniform Guidance
As stated in our engagement letter dated April 23, 2021, our responsibility, as described by professional standards, is to express opinions about whether the financial statements prepared by management with your oversight are fairly presented, in all material respects, in conformity with U.S. generally accepted accounting principles. Our audit of the financial statements does not relieve you or management of your responsibilities.

In planning and performing our audit, we considered the City’s internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinions on the financial statements and not to provide assurance on the internal control over financial reporting.

We also considered internal control over compliance with requirements that could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with the Uniform Guidance.

As part of obtaining reasonable assurance about whether the City’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grants. However, providing an opinion on compliance with those provisions is not an objective of our audit. Also in accordance with the Uniform Guidance, we examined, on a test basis, evidence about the City’s compliance with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Compliance Supplement applicable to each of its major federal programs for the purpose of expressing an opinion on the City’s compliance with those requirements. While our audit provides a reasonable basis for our opinion, it does not provide a legal determination on the City’s compliance with those requirements. < BADAWI&ASSOCIATES

CERTIFIED PUBLIC ACCOUNTANTS
Address: 2855 Telegraph Avenue, Suite 312 Berkeley, CA 94705 •Phone: 510.768.8251 • Fax: 510.768.8249 To The Honorable Mayor and Members
of the City Council of the City of Crescent City
Crescent City, California

Planned Scope and Timing of the Audit
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; therefore, our audit involves judgment about the number of transactions to be examined and the areas to be tested.

Our audit included obtaining an understanding of the entity and its environment, including internal control, sufficient to assess the risks of material misstatement of the financial statements and to design the nature, timing, and extent of further audit procedures. Material misstatements may result from (1) errors, (2) fraudulent financial reporting, (3) misappropriation of assets, or (4) violations of laws or governmental regulations that are attributable to the entity or to acts by management or employees acting on behalf of the entity.

We performed the audit according to the timing previously communicated to you in the engagement letter.

Significant Audit Findings
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in Note 1 to the financial statements. As described in Note 1 to the financial statements, the City changed accounting policies related to financial reporting by adopting the following Statements of Governmental Accounting Standards (GASB Statement) in 2021:
x GASB No. 84, Fiduciary Activities
x GASB No. 90, Majority Equity Interests
x GASB No. 93, Interbank offered rates (except LIBOR removal and lease modifications) x GASB No. 97, Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans
We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period.

Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the City’s financial statements were:
x Depreciable lives and estimated residual value of property and equipment x Pension plans (actuarial assumptions)
x Allowance for uncollectible accounts
x Other Post-employment Benefits (OPEB) Plan (actuarial assumptions) To The Honorable Mayor and Members
of the City Council of the City of Crescent City
Crescent City, California

Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users. The most sensitive disclosure(s) affecting the financial statements were:
x Cash and Investments
x Long Term Debt
x Capital Assets
x Employee Retirement Plans
x Other Postemployment Benefits (OPEB) Plan
x Contingencies and Subsequent Events
x Successor Trust for Assets of Former Redevelopment Agency The financial statement disclosures are neutral, consistent, and clear.

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

Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. Management has corrected all such misstatements. The attached schedule summarizes the material misstatements detected as a result of audit procedures that were corrected by management.

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

Management Representations
We have requested certain representations from management that are included in the management representation letter dated December 31, 2021.

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

To The Honorable Mayor and Members
of the City Council of the City of Crescent City
Crescent City, California

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

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

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

We were not engaged to report on the introductory section, which accompanies the financial statements but is not RSI. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it.

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

Very truly yours,
Badawi & Associates, CPAs
Berkeley, California
December 31, 2021
To The Honorable Mayor and Members
of the City Council of the City of Crescent City
Crescent City, California

Corrected Misstatements
Account Description Debit Credit
413-000-4999-00000 Contra Expense 709,241.84
413-000-2940-00000 Investment-Fixed Assets 709,241.84
Total 709,241.84 709,241.84
Total Adjusting Journal Entries 709,241.84 709,241.84
Adjusting Journal Entries
Adjusting Journal Entries JE # 1
To adjust contra expense account to correctly offset current year capital asset acquisition expenditures that are included in expense and to correct beginning fund balance in the Sewer Fund City of Crescent City
Crescent City, California
Independent Accountants’ Report on
Agreed-Upon Procedures Applied to
Appropriations Limit Schedule
For the year ending June 30, 2022
INDEPENDENT ACCOUNTANTS’ REPORT
To the Honorable Mayor and City Council
of the City of Crescent City
Crescent City, California
We have performed the procedures enumerated below on the accompanying Appropriations Limit Schedule of the City of Crescent City (City) for the fiscal year ending June 30, 2022. The City’s management is responsible for the accompanying Appropriations Limit Schedule.

The City has agreed to and acknowledged that the procedures performed are appropriate to meet the intended purpose of the requirements of Section 1.5 of Article XIII-B of the California Constitution. Additionally, the League of California Cities (as presented in the publication entitled Agreed-upon Procedures Applied to the Appropriations Limitation Prescribed by Article XIII-B of the California Constitution) has agreed to and acknowledged that the procedures performed are appropriate for their purposes. This report may not be suitable for any other purpose. The procedures performed may not address all the items of interest to a user of this report and may not meet the needs of all users of this report and, as such, users are responsible for determining whether the procedures performed are appropriate for their purposes.

The procedures performed and our findings are described below:

1. We obtained the completed worksheets used by the City to calculate its appropriations limit for the fiscal year ending June 30, 2022, and determined that the limit and annual calculation factors were adopted by resolution of City Council. We also determined that the population and inflation options were selected by a recorded vote of City Council.

Finding: No exceptions were noted as a result of our procedures.

2. For the accompanying Appropriations Limit Schedule, we added the prior year’s limit to the total adjustments, and agreed the resulting amount to the current year’s limit.

Finding: No exceptions were noted as a result of our procedures.

3. We agreed the current year information presented in the accompanying Appropriations Limit Schedule to corresponding information in worksheets used by the City.

Finding: No exceptions were noted as a result of our procedures.

4. We agreed the prior year appropriations limit presented in the accompanying Appropriations Limit Schedule to the prior year appropriations limit adopted by the City Council during the prior year.

Finding: No exceptions were noted as a result of our procedures. 4 BADAWI&ASSOCIATES

CERTIFIED PUBLIC ACCOUNTANTS
Address: 2855 Telegraph Avenue,Suite 312 Berkeley,CA 94705 •Phone: 510.768.8251 •Fax: 510.768.8249 To the Honorable Mayor and Members of City Council
of the City of Crescent City
Crescent City, California
We were engaged by the City to perform this agreed-upon procedures engagement and conducted our engagement in accordance with attestation standards established by the AICPA. We were not engaged to and did not conduct an examination or review, the objective of which would be the expression of an opinion or conclusion, respectively, on the accompanying Appropriation Limit Schedule. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.

We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements related to our agreed-upon procedures engagement.

This report is intended solely for the information and use of the City Council and management of the City and is not intended to be and should not be used by anyone other than these specified parties. However, this report is a matter of public record, and its distribution is not limited.

Badawi & Associates, CPAs
Berkeley, California
January 27, 2022
2 City of Crescent City
Appropriations Limit Schedule
For the year ending June 30, 2022
Amount Source
A. Appropriations Limit FY 2020-2021 $30,659,862 Prior year schedule B. Calculation factors:

1. Population increase 1.0049 State Department of Finance

2. Inflation increase (deflation decrease) 1.0573 State Department of Finance

3. Total adjustment factor 1.0625 B1 * B2
C. Annual adjustment increase (decrease) 1,915,652 [(B3-1)*A)] D. Other adjustments:

Loss responsibility (-) - N/A
Transfers to private (-) - N/A
Transfers to fees (-) - N/A
Assumed responsibility (+) - N/A
E. Total adjustments 1,915,652 (C+D)
F. Appropriations Limit FY 2021-2022 $ 32,575,514 (A+E) 3 City of Crescent City
Notes to Appropriations Limit Schedule
For the year ending June 30, 2022

1. PURPOSE OF LIMITED PROCEDURES REVIEW
Under Article XIIIB of the California Constitution (the Gann Spending Limitation Initiative), California governmental agencies are restricted as to the amount of annual appropriations from proceeds of taxes.

Effective for years beginning on or after July 1, 1990, under Section 1.5 of Article XIIIB, the annual calculation of the appropriations limit is subject to a limited procedures review in connection with the annual audit.

2. METHOD OF CALCULATION
Under Section 10.5 of Article XIIIB, for fiscal years beginning on or after July 1990, the appropriations limit is required to be calculated based on the limit for the fiscal year 1986-1987, adjusted for the inflation and population factors discussed in Notes 3 and 4 below.

3. POPULATION FACTORS
A California governmental agency may use as its population factor either the annual percentage change of the jurisdiction’s own population or the annual percentage change in population of the County where the jurisdiction is located. The factor adopted by the City of Crescent City (City) for fiscal year 2022 represents the annual percentage change in population for the County.

4. INFLATION FACTORS
A California governmental agency may use as its inflation factor either the annual percentage change in the 4th quarter per capita personal income (which percentage is supplied by the State Department of Finance) or the percentage change in the local assessment roll from the preceding year due to the change of local nonresidential construction. The factor adopted by the City for fiscal year 2022 represents the percentage growth in the State of California per capita personal income cost of living.

5. OTHER ADJUSTMENTS
A California government agency may be required to adjust its appropriations limit when certain events occur, such as the transfer of responsibility for municipal services to, or from, another government agency or private entity. No adjustments were required for the CIty for the fiscal year ending June 30, 2022. 4 City of
Crescent City
Measure S Sales Tax
Crescent City, California
Financial Statements and
Independent Auditor’s Reports
For the year ended June 30, 2021
City of Crescent City
Measure S Sales Tax
Financial Statements
For the year ended June 30, 2021
Table of Contents
Page
Independent Auditors’ Report .................................................................................................................................1 Financial Statements:

Balance Sheet..........................................................................................................................................................3 Statement of Revenues, Expenditures and
Changes in Fund Balance...............................................................................................................................4 Notes to Financial Statements..............................................................................................................................5 Supplementary Information:

Budgets and Budgetary Accounting...................................................................................................................8 Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual:

Measure S Sales Tax........................................................................................................................................9 Independent Auditors’ Report on Compliance and on Internal Control over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards.........................................................................................11 INDEPENDENT AUDITOR’S REPORT
To the Honorable Mayor and Members of the City Council
of the City of Crescent City
Crescent City, California
Report on Financial Statements
We have audited the accompanying financial statements of the Measure S Sales Tax (Measure S Sales Tax) of the City of Crescent City, as of and for the year ended June 30, 2021, and the related notes to the financial statements as listed in the table of contents.

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

Auditor's Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

In making those risk assessments, the auditor considers internal control relevant to the City's preparation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing such an opinion on the effectiveness of the City's internal control.

Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall financial statement presentation.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
1 < BADAWI&ASSOCIATES

CERTIFIED PUBLIC ACCOUNTANTS
Address: 2855 Telegraph Avenue, Suite 312 Berkeley,CA 94705 •Phone: 510.768.8251 •Fax:510.768.8249 To the Honorable Mayor and Members of the City Council
of the City of Crescent City
Crescent City, California

Opinion
In our opinion, the financial statements referred to above present fairly in all material respects the financial position of the Measure S Sales Tax at June 30, 2021 and the results of operations and changes in fund balance for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

Emphasis of Matter
As discussed in Note 1, the financial statements present only the Measure S Sales Tax and do not purport to, and do not, present fairly the financial position of the City as of June 30, 2021, and the changes in its financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated January 17, 2022 on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control over financial reporting and compliance.

Badawi & Associates, CPAs
Berkeley, California
January 17, 2022
2 City of Crescent City
Measure S Sales Tax
Balance Sheet
Total
ASSETS:

Cash and investments $ 70,510
Taxes receivable 293,775
Total assets $ 364,285
LIABILITIES AND FUND BALANCES:

Liabilities:

Accounts payable $ 20,863
Accrued salaries and benefits 10,955
Total liabilities 31,818
Fund Balance:

Assigned 332,467
Total fund balance 332,467
Total liabilities and fund balance $ 364,285
June 30, 2021
See accompanying Notes to Financial Statements.
3 City of Crescent City
Measure S Sales Tax
Statement of Revenues, Expenditures and Changes in Fund Balance Total
REVENUES:

Measure S sales tax $ 452,930
Total revenues 452,930
EXPENDITURES:

Human services and recreation:

Salaries and benefits 78,354
Utilities 28,837
Supplies 11,020
Other 2,252
Total expenditures 120,463
Net change in fund balance 332,467
FUND BALANCE:

Beginning of year -
End of year $ 332,467
See accompanying Notes to Financial Statements.

For the Year Ended June 30, 2021
4 City of Crescent City
Measure S Sales Tax
Notes to Financial Statements
For the year ended June 30, 2021

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity
All transactions of the Measure S sales tax are reported in the General Fund (Fund) of the City of Crescent City, California (City). A separate set of accounts have been established by the City, to account for revenues earned and expenditures incurred according to Measure S. The accompanying financial statements are for the Measure S sales tax only and are not intended to fairly present the financial position of the City.

B. Basis of Accounting and Measurement Focus
The accompanying financial statements are prepared on the modified accrual basis of accounting.

Revenues are generally recorded when measurable and available (60 days), and expenditures are recorded when the related liabilities are incurred.

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

Operating statements of governmental funds present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets.

C. Fund Accounting
The operations of the Measure S sales tax are accounted for as part of the General Fund. Funds are separate accounting entities with a set of self-balancing accounts which comprise their assets, liabilities, fund equity, revenues, and expenditures.

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

E. Revenues and Receivables
During the course of normal operations, the General fund carries a receivable balance for Measure S sales tax. Revenues are recorded when received in cash, except revenues subject to accrual (generally 60 days after year-end) are recognized when due.
5 City of Crescent City
Measure S Sales Tax
Notes to Financial Statements
For the year ended June 30, 2021

2. CASH AND INVESTMENTS
Measure S monies are pooled with the City's cash, cash equivalents, and investments. The City pools cash resources from all funds to facilitate the management of cash. Cash and cash equivalents are considered amounts on hand, in demand deposits, and short-term investments with a maturity date within three months of the date acquired by the City and are presented as "Cash and Investments". The City invests in one external investment pool, the State of California Local Agency Investment Fund (LAIF).

All pooled cash and investments held by the City are considered cash and cash equivalents because LAIF is used essentially as demand deposits from the standpoint of the City. Information about the City's Cash and Investments is disclosed in the City's Basic Financial Statement.

Measure S cash and investments was $70,510 as of June 30, 2021.

3. MEASURE S SALES TAX
The City placed Measure S (a 1% local tax measure) on the ballot for the November 3, 2020 general election. This transactions and use tax (generally referred to as a sales tax) is intended to support and maintain essential services including the City's police and fire departments, street maintenance and repair, and the operations of the municipal swimming pool. Measure S is a general tax, which requires voter approval of at least 50% +1. The voters of Crescent City approved the measure with 64.57% voting yes.

One of the requirements included with the Measure S ordinance is a citizens oversight committee. The committee is made up of five voting members (City residents) and two non-voting members (City staff).

The committee is charged with reviewing and reporting to the public on the revenues and expenditures of Measure S funds. The committee is also charged with making recommendations on the expenditure of Measure S funds to the City Council. All Measure S oversight committee meetings are open to the public.

4. TAXES RECEIVABLES
The taxes receivables represent the Measure S sales tax revenues for the fiscal year remitted after June 30, 2021.
6 SUPPLEMENTARY INFORMATION
7 City of Crescent City
Measure S Sales Tax
Supplementary Information
For the year ended June 30, 2021

1. BUDGETS AND BUDGETARY ACCOUNTING
The City Council has the responsibility for adoption of the City’s budget. Budgets are adopted for governmental and proprietary funds. From the effective date of the budget, the amounts stated as proposed expenditures become appropriations to the various City departments. The City Council may amend the budget by resolution during each fiscal year. The City Manager is authorized to transfer funds from one major expenditure category to another within the same department and fund. Any revisions that alter the total expenditures for any fund must be approved by the City Council.

All appropriations lapse at the endo f the fiscal year to the extent that they have not been expended.

Budgetary comparison is provided in the accompanying financial statements for the Measure S sales tax, which is budgeted within the City’s General Fund.
8 City of Crescent City
Supplementary Information
Measure S Sales Tax
For the year ended June 30, 2021
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Measure S sales tax $ - $ 300,000 $ 452,930 $ 152,930 $ - Total revenues - 300,000 452,930 152,930
EXPENDITURES:

Human services and recreation:

Salaries and benefits - 130,257 78,354 51,903
Utilities - 25,440 28,837 (3,397)
Supplies - 15,500 11,020 4,480
Other - 2,640 2,252 388
Administrative overhead allocation - 2,769 - 2,769
Total expenditures - 176,606 120,463 56,143
Net change in fund balance $ - $ 123,394 332,467 $ 209,073 FUND BALANCE:

Beginning of year -
End of year $ 332,467
Budgeted Amounts
9 This page intentionally left blank
10 REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE

AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN

ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
INDEPENDENT AUDITOR’S REPORT
To the Honorable Mayor and Members of the City Council
of the City of Crescent City
Crescent City, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the Measure S Sales Tax of the City of Crescent City, California (City), as of and for the year ended June 30, 2021, and the related notes to the financial statements, and have issued our report thereon dated January 17, 2022.

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

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

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.
11 < BADAWI&ASSOCIATES

CERTIFIED PUBLIC ACCOUNTANTS
Address: 2855 Telegraph Avenue, Suite 312 Berkeley,CA 94705 •Phone: 510768.8251 •Fax:510768.8249 To the Honorable Mayor and Members of the City Council
of the City of Crescent City
Crescent City, California

Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Measure S Sales Tax financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that is required to be reported under Government Auditing Standards.

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

Badawi & Associates, CPAs
Berkeley, California
January 17, 2022
12 CITY COUNCIL AGENDA REPORT
TO: MAYOR GREENOUGH AND MEMBERS OF THE CITY COUNCIL
FROM: ERIC WIER, CITY MANAGER
BY: LINDA LEAVER, DIRECTOR OF FINANCE
DATE: FEBRUARY 7, 2022
SUBJECT: BUDGET-TO-ACTUAL OPERATING RESULTS FOR FISCAL YEAR 2020-21
______________________________________________________________________

RECOMMENDATION
• Hear staff report
• Technical questions from the Council
• Receive public comment
• Further Council discussion
• Receive and file budget-to-actual financial report of the City’s major operating funds for Fiscal Year 2020-21

BACKGROUND
The Fiscal Year 2020-21 annual budget was adopted by the City Council on June 22, 2020. At the time of the budget adoption, the City was still in deep uncertainty regarding revenues and expenses due to the COVID-19 pandemic. The budget was adopted with deep cuts to nearly every department, in an effort to continue providing essential services, maintain cash flow, and preserve fund balances. The Council approved the budget and directed staff to return with regular updates as more information became available, and multiple budget adjustments were anticipated throughout the fiscal year.

As the actual results of FY 2019-20 were finalized and more information was gathered, staff returned to the Council with updates several times. The City experienced significant revenue losses in FY 2019-20, but much higher revenues in FY 2020-21. The budget was updated multiple times, and programs, staffing, and services were added to the budget when revenues were available to support them. Not all of the planned additions were able to be fully implemented, resulting in significant budget to actual savings in FY 2020-21.

In addition, the City was awarded a variety of grants that were not fully expended and have been carried over to be continued in the current year.

Most fund balances increased significantly, particularly the General Fund. This was caused by a variety of factors including increased revenues, staffing vacancies, and BUDGET-TO-ACTUAL RESULTS FY 2020-21
February 7, 2022
2 deferred projects. The increase in fund balance this year is a recovery of the loss experienced in the prior year, plus additional revenues and savings in expenses.

Therefore, some of the increase in fund balance is needed to replenish reserves, some represents one-time additional funds, and some represents ongoing increased revenue.

A portion of the fund balance increases have already been committed to projects in the current fiscal year and ongoing staffing needs. More detail is provided for each fund below.

During the year, Council was presented with monthly budget-to-actual financial reports for the City’s five major operating funds. This report provides the budget-to-actual results as of June 30, 2021 (the end of the fiscal year). The final report for each fiscal year is prepared after the audit is complete, to provide a summary of the activity for the full fiscal year.

The information presented in this report represents the operating activities of the major operating funds of the City (General Fund, Housing Authority Fund, RV Park Fund, Sewer Fund, and Water Fund), along with a City-wide analysis of wages and benefits. The City’s annual audit was completed December 31, 2021, and the information presented in this report are the final amounts. The City’s independent auditor will be presenting the audit results at an upcoming meeting, and that report will provide the City’s “big picture” results for the FY 2020-21 activities. This report is to provide more specific analysis of the major operating funds.

It is important to note this report presents the operating activities of the five funds. Items such as depreciation, GASB 68 pension adjustments, GASB 75 OPEB adjustments, and certain capital asset transactions are not considered operating activities and are not included here, although a brief reconciliation is provided in the attached report to show some of the differences between this operating report and the audit. Also, the City has a variety of other funds including special revenue funds, internal service funds, and fiduciary funds which are not included in this analysis. All of the City’s funds are included in the annual audit report.

ITEM ANALYSIS
Budgets are estimates of future revenues and expenses, based on experience and anticipated trends. Extensive staff time is devoted to developing the annual budget, reevaluating the budget at mid-year, and presenting monthly updates to the Council. Even with this analysis, actual results will always vary from budgeted estimates for a variety of reasons. In addition, the budget was further complicated this past year by the impacts of COVID-19.

City-Wide Wages and Benefits
The City has four employee associations which bargain with the City on behalf of employees regarding wages, benefits, and other working conditions. The agreements are formalized in a Memorandum of Understanding (MOU) with each employee association.

BUDGET-TO-ACTUAL RESULTS FY 2020-21
February 7, 2022
3 All four MOU’s expired June 30, 2020. However, due to the extreme uncertainty the City was facing, each of the associations agreed to extend the old MOU’s for an additional year with no increases in wages or benefits. The dedication shown by City employees was a large factor in the recovery the City experienced in FY 2020-21.

Actual wage and benefit costs are shown below with the prior three fiscal years for comparison. Wages decreased in FY 2019-20 compared to the prior year largely due to the change from the Wastewater Treatment Plant being city-run to being operated by a third party contractor, and to a lesser extent due to the swimming pool being closed due to COVID-19. Wages further decreased in FY 2020-21 due to the pool closure and position vacancies, as well as a significant decrease in overtime in the Police Department.

Total wages and benefits (City-wide) – actual expenses:

FY 17-18 FY 18-19 FY 19-20 FY 20-21
Year-overyear
$ Variance
Year-overyear
% Variance
Wages 3,955,323 4,115,375 3,922,077 3,774,506 (147,571) -4% Benefits 2,381,454 2,482,933 2,637,543 2,540,212 (97,331) -4% Total 6,336,777 6,598,307 6,559,620 6,314,718 (244,902) -4% The City budgets for all authorized positions to be filled and uses a conservative estimate for the use of benefits. Budget-to-actual variances are caused when positions are unfilled, positions are filled at a lower step/rate than budgeted, and/or employees do not use their budgeted benefit allowance.

In the area of benefits, those benefits which are calculated as a percentage of payroll (normal pension cost, employer’s Medicare contribution, and PTS) are budgeted for all positions to be filled and the corresponding benefits earned. The City’s contributions toward the pension unfunded liability and retiree health liability (OPEB) are budgeted for the actuarially determined contribution, plus any additional payments (if authorized by Council). Flex benefits (health benefits) are typically budgeted at a mid-point between prior year’s actual use and the full amount allowed by the various MOUs.

Wages and benefits (City-wide) – budget to actual:

BUDGET-TO-ACTUAL RESULTS FY 2020-21
February 7, 2022
4 FY 20-21 Budget FY 20-21 Actual Over (Under) Budget
Regular wages 3,778,035 3,430,996 (347,039)
Temp and PT wages 240,765 182,190 (58,575)
Overtime 225,575 161,321 (64,254)
FF Stipends 156,930 135,050 (21,880)
PERS 1,200,651 1,142,251 (58,400)
Medicare 63,690 57,602 (6,088)
Workers Comp 262,866 242,491 (20,375)
Unemployment 41,906 47,292 5,386
Flex Benefits 985,424 771,469 (213,955)
OPEB 170,449 140,303 (30,146)
PTS 5,086 3,753 (1,333)
Total 7,131,377 6,314,718 (816,659)
Significant variances in wages and benefits were due to • Temporary grant-funded police officer position was unable to be filled • One lab position unfilled
• Multiple part-time positions were budgeted but not fully filled (lifeguards, parks maintenance, firehouse maintenance, RV Park attendant)
• Staff turnover due to retirements or employees leaving the City for other opportunities (Account Clerk, Office Technician, Engineering Project Manager, Engineering Technician, Police Officer)
• Reduced overtime in the Police Department
General Fund
General Fund revenues were initially budgeted very low due to the uncertain economic outlook in 2020. Revenue projections were increased several times throughout the year as more information came in, while still maintaining a conservative budget. The final budgeted revenue was $7,084,145 and actual revenue was $7,327,631 for a variance of $243,486 (or 3%) higher than the final budget. Sales tax was $210,406 higher than budgeted, and Measure S was $152,930 higher than budgeted. Transient Occupancy Tax was $224,603 higher than budget. Offsetting some of these increases were grant revenues of $313,965 (City Manager and Planning departments) for projects that were not completed and have been rolled over to the current year, and grant revenue of $129,449 in the Police Department for a temporary grant-funded position that was not able to be filled and expired.

Expenditures in the General Fund were much lower than budgeted. The final approved budget was $6,430,371 of which the City spent $5,257,679 for a variance of $1,172,692.

When the City held the budget workshop to plan the current year (FY 2021-22) budget, estimated expenditures for FY 2020-21 were $5,700,000. Although the FY 2020-21 budget was not changed at that time, the projection was used in developing the next budget. Staff explained the projection of $5.7 million in expenses was a conservative estimate, and actual expenses would likely come in lower than that. The additional savings of approximately $440,000 were in staffing due to unfilled positions, grant-funded BUDGET-TO-ACTUAL RESULTS FY 2020-21
February 7, 2022
5 projects that were carried over to the current year, and regular expenses coming in under budget (parts and supplies, contracts, internal service funds).

Total authorized budget 6,430,371
Projected at budget workshop
(conservative estimate, actual should be lower) 5,700,000 Actual expenditures 5,257,679
The City uses a conservative approach to budgeting. The budget includes full funding for every authorized position and project. When positions are vacant or projects are deferred, actual expenditures will be under budget. In addition, operational expenses such as utilities, supplies, and contract services are estimated to ensure departments have sufficient budget to provide services for the entire year even when supplier prices increase or additional needs arise. A summary of these variances is listed below.

Category Under Budget
Wages & benefits (382,594)
Utilities (61,496)
Parts & supplies (116,780)
Contract services (51,725)
Grants and projects (carried over) (400,551)
Grants and projects (not carried over) (107,412)
Internal service funds (26,809)
Other (25,326)
Total (1,172,692)
In the prior fiscal year (FY 2019-20), the General Fund balance decreased from $2,598,701 to $1,427,571. The City’s goal was to rebuild the General Fund balance, which was accomplished and exceeded in FY 2020-21. Fund balance as of June 30, 2021 is $3,497,523. However, not all of the fund balance is available for new spending. Of the total fund balance, a portion is required to be held in reserve by Council policy (25% of the budget). Based on the current budget, the required reserve is $2,083,256. In addition, a portion of the fund balance is unspent Measure S funds. Those funds are set aside for Measure S activities, per Council direction. That balance is $332,467. Finally, the FY 2021-22 budget includes the use of $764,605 from the fund balance. This leaves $317,195 in fund balance that is not already committed.

Fund balance @ 6/30/21 3,497,524
Less required reserve (2,083,256)
Less Measure S balance (332,467)
Less FY 21-22 budgeted net required from reserves (764,605) Remaining above reserve requirement per FY 21-22 budget 317,195 The current year’s budget is under review, and staff will be presenting a mid-year update at an upcoming meeting. Council will be provided updated projections to inform decisionmaking about the status of the General Fund and plans for the future.

BUDGET-TO-ACTUAL RESULTS FY 2020-21
February 7, 2022
6 Housing Authority Fund
The Housing Authority is funded by the Federal Department of Housing and Urban Development (HUD). Housing Authority revenues were under budget by $135,771 and expenditures were also under budget by $247,738, mostly due to lower utilization of housing vouchers and CARES Act grant funding that was rolled over to the next fiscal year.

Revenues for the Housing Authority are difficult to project, as the City operates on a July through June fiscal year, and HUD funds the program based on the calendar year. In addition, the Federal government is often delayed in approving the budget factors for Housing; when the City adopts its budget, the actual level of federal funding is unknown.

The Housing Authority Director watches these numbers closely throughout the year and adjusts expenditures as needed. In addition to the fund balance held by the City, the Housing Authority has a reserve that is held by HUD. The Housing Authority draws on this reserve as necessary to ensure the smooth operation of the program. Finally, HUD regulations prevent the Housing Authority from building up a large fund balance in the HAP reserve; in fact, if the fund balance held by the City is too high, HUD will reduce its funding until the fund balance is lowered. Therefore, fluctuation in fund balance from year to year is anticipated.

The Housing Authority fund balance increased from $330,292 to $439,848. Of this total, $120,570 is HAP reserve and $319,278 is admin reserve.

RV Park Fund
Revenues for the RV Park were $36,262 over budget. Operating expenses were $66,234 lower than budgeted. A second part-time position (camp attendant) was approved but not filled, and utilities and parts were also under budget.

The RV Park has a working capital balance of $369,164 as of June 30, 2021. Some of this will be utilized for staffing and projects in the next fiscal year, and some will be held in reserve to fund a larger capital project in future years.

Sewer Fund
Sewer Fund revenues came in a total of $245,168 over budget. This relatively modest variance (5% of budget) is made up of several large variances, some significantly over budget and some significantly under budget. Service revenue was $766,810 over budget.

The budget was projected at approximately 80% of FY 2018-19 revenues (the last full fiscal year prior to COVID-19). FY 2019-20 revenues (the first impacts of COVID-19 were in the last part of FY 2019-20) were down 6.5% from the prior year. The FY 2020-21 budget estimated a reduction of 20% from the full impact of COVID and a recovery in the following two years. Instead, revenues were only down 3% compared to FY 2018-19.

Therefore, service revenues were significantly over budget, but still slightly below pre- BUDGET-TO-ACTUAL RESULTS FY 2020-21
February 7, 2022
7 pandemic revenues. Offsetting the higher service revenues, CSA charges (fees charged to the County for maintenance of their collection system) were $135,769 under budget.

These charges are based on the actual employee hours charged to the system plus actual cost of parts and contracts. Staff time has been greatly reduced due to improvements made in the lift stations, resulting in lower revenue charged to the County. Grant revenue of $393,405 was budgeted for a planning project but was carried over to the current year.

Operating expenses were $881,712 under budget. Of that amount, $393,405 is the planning project grant that was carried over and $85,937 was unspent budget in the CSA.

The remaining $402,370 consisted of variances due to vacancies (one lab position was unfilled, as well as turnover in the engineering department), parts and supplies, and contract services.

Category Under Budget
Wages & benefits (168,224)
Utilities (6,427)
Parts & supplies (80,968)
Grant project rolled over (393,405)
Contract services (186,523)
ISF (15,355)
Other (30,810)
Total (881,712)
Working capital decreased from $6,111,421 to $5,687,894. This shows the fund is investing in planned maintenance and capital improvements, which will continue to reduce the available working capital over the next several years.

Water Fund
Water Fund revenues came in a total of $618,409 over budget. Service revenue was $454,965 over budget. The budget was projected at approximately 80% of FY 2018-19 revenues (the last full fiscal year prior to COVID-19). FY 2019-20 revenues (the first impacts of COVID-19 were in the last part of FY 2019-20) were down 4% from the prior year. The FY 2020-21 budget estimated a reduction of 20% from the full impact of COVID and a recovery in the following two years. Instead, revenues were only down 4% again compared to FY 2018-19. Therefore, service revenues were significantly over budget, but still slightly below pre-pandemic revenues. In addition, the Water benefitted from $197,000 in grant-funded CIP due to the partnership with Elk Valley Rancheria.

Operating expenses were $394,317 under budget. This includes $122,942 in projects that were rolled over to be spent in the current fiscal year.

BUDGET-TO-ACTUAL RESULTS FY 2020-21
February 7, 2022
8 Category Under Budget
Wages & benefits (74,334)
Utilities (47,110)
Parts & supplies (53,909)
Projects rolled over (122,942)
Contract services (66,600)
ISF (22,947)
Other (6,473)
Total (394,317)
Working capital increased from $2,345,977 to $3,026,126. The Water Fund plans to invest significant working capital into CIP in the coming years.

FISCAL ANALYSIS
Preparation of this report is informational in nature and has no direct fiscal impact.

STRATEGIC PLAN ASSESSMENT
This report is consistent with Strategic Plan Goal 3 to “Maintain responsible fiscal management and accountability.”

ATTACHMENT

1. Budget-to-Actual Report as of June 30, 2021
Description Budget Actual
$ Over
(Under)
Budget
% Over
(Under)
Budget Notes
Non-Departmental Revenue
Tax Revenue 4,167,793 4,813,919 646,126 16% Sales tax, Measure S, TOT Licenses & Permits 280,616 259,659 (20,957) -7%
Interest Income 25,167 2,824 (22,343) -89%
Lease-Rental Income 28,029 29,413 1,384 5%
Other Revenue 11,150 40,917 29,767 267%
Transfers In - 57,731 57,731
Departmental Revenue
City Council 64,596 68,762 4,166 6%
City Manager 154,000 29,348 (124,652) -81% Grant-funded projects rolled over to next year Community Support - -
City Clerk 105,515 116,655 11,140 11%
Human Resources 34,783 38,027 3,244 9%
Finance - (1,600) (1,600)
City Attorney - 1,476 1,476
Fire 414,991 417,728 2,737 1%
Police 405,802 299,718 (106,084) -26% Grant revenue under budget (grant-funded position not filled) Code Enforcement 1,000 605 (396) -40%
Building Inspection 96,200 105,355 9,155 10%
Planning 251,450 62,739 (188,711) -75% Grant-funded projects rolled over to next year PW Admin 1,500 54 (1,446) -96%
Streets 920,943 860,605 (60,338) -7% Grant-funded projects rolled over to next year Parks 94,000 82,576 (11,424) -12%
Cultural Center 7,000 6,492 (508) -7%
Swimming Pool 19,610 34,629 15,019 77%
Revenue Total 7,084,145 7,327,631 243,486 3%
Non-Departmental Expenditures 176,894 157,392 (19,502) -11% City Council 99,615 102,325 2,710 3%
City Manager 231,674 98,725 (132,949) -57% Grant-funded projects rolled over to next year Community Support 81,396 80,465 (931) -1%
City Clerk 161,345 155,857 (5,488) -3%
Human Resources 114,151 108,621 (5,530) -5%
Finance 262,123 225,799 (36,324) -14% Under budget in wages & benefits, contracts City Attorney 56,957 55,998 (959) -2%
Fire 783,133 684,880 (98,253) -13% Under budget in wages & benefits, parts & supplies, contracts, travel & training, internal service funds Police 2,393,766 2,073,690 (320,076) -13% Under budget in wages & benefits (including grant-funded position), parts & supplies, contracts Code Enforcement 15,722 14,333 (1,389) -9%
Building Inspection 48,926 41,834 (7,092) -14%
Planning 398,972 205,470 (193,502) -49% Grant-funded projects rolled over to next year Public Works - Admin 101,086 75,717 (25,369) -25% Under budget in wages & benefits Public Works - Streets 570,258 477,553 (92,705) -16% Under budget in parts & supplies, contracts (grant-funded project rolled over to next year) Public Works - Parks 478,525 355,546 (122,979) -26% Under budget in wages & benefits, utilities, parts & supplies, contracts Cultural Center 93,687 73,265 (20,422) -22% Under budget in utilities, parts & supplies, contracts Swimming Pool 362,141 270,207 (91,934) -25% Under budget in wages & benefits, utilities, contracts Expenditure Total 6,430,371 5,257,679 (1,172,692) -18%
NET OPERATING RESULTS 653,774 2,069,952
Fund Balance 6/30/19 2,598,700
Fund Balance 6/30/20 1,427,571
Fund Balance 6/30/21 3,497,523
City of Crescent City
FY 2020-21 General Fund Operating Report
June 30, 2021 Year End Results
Description Budget Actual
$ Over
(Under)
Budget
% Over
(Under)
Budget Notes
Revenue
Interest 140 1,246 1,106 790%
Recovery-Admin Fee 50% 12,500 19,625 7,125 57%
Recovery-HAP 50% 12,500 19,625 7,125 57%
HUD Admin Revenue 468,538 499,224 30,686 7%
HCV Housing Assistance 3,291,437 3,090,148 (201,289) -6% HAP funding based on usage MSV Housing Assistance - 58,020 58,020
HAP Owner Reimbursement - 899 899
Port In - HAP 4,548 1,047 (3,501) -77%
Port In - Admin 574 104 (470) -82%
Grant revenue 161,430 124,402 (37,028) -23% Balance of grant rolled over to next year Other Revenue - 1,556 1,556
Revenue Total 3,951,667 3,815,896 (135,771) -3%
Expenditures by Department
City Manager 4,111 3,943 (168) -4%
Finance 20,066 18,933 (1,133) -6%
City Attorney 500 390 (111) -22%
Housing Authority
HCV Housing Assistance 3,291,437 3,179,745 (111,692) -3% MSV Housing Assistance - 16,608 16,608
All Other 637,964 486,722 (151,242) -24% Grant funds and new program funds rolled over to next year Expense Total 3,954,078 3,706,340 (247,738) -6%
NET OPERATING RESULTS (2,411) 109,556
Fund Balance 6/30/19 132,719
Fund Balance 6/30/20 330,292
Fund Balance 6/30/21 439,848
HAP Balance 6/30/21 120,570
Admin Balance 6/30/21 319,278
Total fund balance 439,848
City of Crescent City
FY 2020-21 Housing Fund Operating Report
June 30, 2021 Year End Results
Description Budget Actual
$ Over
(Under)
Budget
% Over
(Under)
Budget Notes
Revenue
Interest 4,800 588 (4,212) -88%
Misc sales 2,500 12,246 9,746 390%
Rental revenue 444,997 473,332 28,335 6%
Other revenue - 2,394 2,394
Revenue Total 452,297 488,559 36,262 8%
Expenses by Department
RV Park 355,231 307,108 (48,123) -14% Under budget in wages, utilities, parts & supplies City Manager 10,279 10,022 (257) -2%
Finance 46,793 28,938 (17,855) -38% Under budget in contracts Expense Total 412,303 346,069 (66,234) -16%
NET OPERATING RESULTS 39,994 142,491
Reconcile to audit
Operating
report Audit
Revenues per report 488,559
Operating revenues 485,578
Non-operating revenues 2,982
Total revenues 488,559 488,560
Expenses per report
Operating expenses 346,069 405,047
Non-operating expenses
Total expenses per report 346,069 405,047
Reconciling items
Depreciation 58,978
Debt principle payment
Total expenses 405,047 405,047
Change in net position 83,513 83,513
Net position 6/30/19 1,108,042
Net position 6/30/20 1,112,129
Net position 6/30/21 1,195,642
Working capital 6/30/19 157,997
Working capital 6/30/20 224,882
Working capital 6/30/21 369,164
City of Crescent City
FY 2020-21 RV Park Fund Operating Report
June 30, 2021 Year End Results
Description Budget Actual
$ Over
(Under)
Budget
% Over
(Under)
Budget Notes
Revenue
Interest 89,618 (3,703) (93,321) -104%
Other Income 25,431 6,188 (19,243) -76%
Charges for services 3,631,445 4,398,255 766,810 21% Budget anticipated decrease due to COVID Sewer connections 38,728 111,348 72,620 188%
Sewer lab 114,000 118,367 4,367 4% Includes outside customers and services provided to City Water Fund County collection systems 222,927 87,158 (135,769) -61% Revenues based on eligible expenses incurred Grant revenue 393,405 - (393,405) -100% Grant-funded projected rolled over to next year Reimbursements 21,120 63,857 42,737
Transfers in - 371 371
Revenue Total 4,536,674 4,781,842 245,168 5%
Expense
Admin 93,143 87,515 (5,628) -6%
Finance 365,950 342,917 (23,033) -6% Under budget in wages & benefits, supplies, ISF City attorney 23,122 17,694 (5,428) -23%
Sewer lab 504,743 381,037 (123,706) -25% Under budget in wages & benefits, parts & supplies, contract services WWTP operations 2,214,858 1,715,862 (498,996) -23% Under budget in benefits, contracts (including grant-funded project rolled over to next year), tests & permits City collection systems 376,599 312,623 (63,976) -17% Under budget in wages & benefits, parts & supplies, contracts, ISF County collection systems 223,493 137,556 (85,937) -38% Under budget in wages & benefits, parts, contract services WWTP maintenance 213,740 138,732 (75,008) -35% Under budget in wages & benefits, parts, contract services Operating Expense Total 4,015,648 3,133,936 (881,712) -22% Debt service 1,600,000 1,600,000
Transfers to CIP fund 450,000 -
Total 6,065,648 4,733,936
NET OPERATING RESULTS (1,528,974) 47,906
Sewer CIP Fund Activity
Revenue
Interest - (1,115) (1,115)
Transfers in from Sewer Fund 450,000 - (450,000) -100%
Revenue Total 450,000 (1,115) (451,115) -100%
Expense
CIP expenses 1,407,000 371,083 (1,035,917) -74%
Transfers out - 24,188 24,188
Expense Total 1,407,000 395,271 (1,011,729) -72%
Net (957,000) (396,385)
City of Crescent City
FY 2020-21 Sewer Fund Operating Report
June 30, 2021 Year End Results
Reconcile to audit
Operating
report Audit
Revenues per report 4,781,842
Operating revenues 4,785,176
Non-operating revenues (4,818)
Total revenues per report 4,781,842 4,780,358
Reconciling items
Other revenue
Sewer CIP fund revenues (1,115)
Total revenues 4,780,727 4,780,358
Expenses per report
Operating expenses 3,133,936 4,972,497
Non-operating expenses 1,600,000 23,816
Total expenses per report 4,733,936 4,996,313
Reconciling items
GASB 68 expense 98,623
GASB 75 expense (16,371)
Contra expense (393,489)
Transfers to CIP fund -
CIP fund expenses 395,271
Depreciation 1,778,713
Debt principle payment (1,600,000)
Total expenses 4,996,683 4,996,313
Change in net position (215,955) (215,955)
Net position 6/30/19 8,140,401
Net position 6/30/20 7,747,435
Net position 6/30/21 7,531,480
Working capital 6/30/19 6,305,740
Working capital 6/30/20 6,111,421
Working capital 6/30/21 5,687,894
Description Budget Actual
$ Over
(Under)
Budget
% Over
(Under)
Budget Notes
Revenue
Interest 58,148 9,782 (48,366) -83%
Rental revenue 19,869 19,512 (357) -2%
Other revenue 25,080 6,188 (18,892) -75%
Charges for services 2,276,890 2,731,855 454,965 20% Budget anticipated decrease due to COVID Water connections 52,400 81,545 29,145 56%
Water CSD admin revenue 3,300 3,304 4 0%
Reimbursements 5,000 9,409 4,409 88%
Capital contributions - 197,000 197,000 Grant-funded CIP Transfers in 35,500 36,001 501 1%
Revenue Total 2,476,187 3,094,596 618,409 25%
Expense
Admin 95,190 88,640 (6,550) -7%
Finance 352,985 327,008 (25,977) -7% Under budget in wages & benefits, ISF City attorney 28,122 26,713 (1,409) -5%
Water operations 1,912,666 1,544,999 (367,667) -19% Under budget in wages & benefits, utilities, parts & supplies, contract services (including grant-funded projects rolled over Water CSD 39,778 47,063 7,285 18%
Expense Total 2,428,741 2,034,424 (394,317) -16%
Debt service 350,000 350,000
Transfers to CIP fund 95,000 95,000
Total Expenditures 2,873,741 2,479,424
NET OPERATING RESULTS (397,554) 615,172
Water CIP Fund Activity
Revenue
Interest - 262 262
Transfers in from Water Fund 95,000 95,000 - 0%
Revenue Total 95,000 95,262 262 0%
Expense
CIP expenses 632,376 440,968 (191,408) -30%
Transfers out 35,500 35,500 - 0%
Expense Total 667,876 476,468 (191,408) -29%
Net (572,876) (381,206)
City of Crescent City
FY 2020-21 Water Fund Operating Report
June 30, 2021 Year End Results
Reconcile to audit
Operating
report Audit
Revenues per report 3,094,596
Operating revenues 2,851,812
Non-operating revenues 207,545
Total revenues per report 3,094,596 3,059,357
Reconciling items
Water CIP fund revenues 262
Total revenues 3,094,858 3,059,357
Expenses per report
Operating expenses 2,034,424 2,313,090
Non-operating expenses 445,000
Total expenses per report 2,479,424 2,313,090
Reconciling items
GASB 68 expense 61,380
GASB 75 expense (9,312)
Contra expense (440,968)
Transfers to CIP fund (95,000)
CIP fund expenses 476,468
Depreciation 226,599
Debt principle payment (350,000)
Total expenses 2,348,591 2,313,090
Change in net position 746,267 746,267
Net position 6/30/19 9,631,711
Net position 6/30/20 10,234,212
Net position 6/30/21 10,980,479
Working capital 6/30/19 2,580,622
Working capital 6/30/20 2,345,977
Working capital 6/30/21 3,026,123

CITY COUNCIL AGENDA REPORT
attract applicants by opening a recruit officer position. good quality applicants for a longer period. Staff believes that it is crucial for CCPD to through police academies to attract new applicants and have a better chance at retaining agencies. More and more agencies are moving towards sponsoring Police Recruits area but has also become a major issue throughout the United States for law enforcement Recruitment and retention issues are not something that is unique to the Del Norte County

ANALYSIS
recruitments have not yielded a qualified applicant for hire. and will be recruiting for more positions this upcoming fiscal year. The last two The Crescent City Police Department currently has two positions open for Police Officer

BACKGROUND
30, 2023
POLICE OFFICERS ASSOCIATION EFFECTIVE JULY 1, 2021 THROUGH JUNE

BETWEEN THE CITY OF CRESCENT CITY AND THE CRESCENT CITY

AND A SIDE LETTER TO THE MEMORANDUM OF UNDERSTANDING

COUNCIL OF THE CITY OF CRESCENT CITY APPROVING AN AMENDMENT • Approve and adopt Resolution No. 2022-12, A RESOLUTION OF THE CITY • Further Council discussion
• Receive public comment
• Technical questions from the Council
• Hear staff report

RECOMMENDATION
______________________________________________________________________

DEPARTMENT RECRUITS
SUBJECT: CCPD ACADEMY SPONSORSHIP PROGRAM FOR POLICE
DATE: FEBRUARY 7, 2022
BY: RICHARD GRIFFIN, CHIEF OF POLICE
FROM: ERIC WIER, CITY MANAGER
TO: MAYOR GREENOUGH AND MEMBERS OF THE CITY COUNCIL
City Council Agenda Report
PD Recruit Police Academy Sponsorship Program
February 7, 2022
2 CCPD has sponsored recruits in the past through the College of the Redwoods Police Academy located in Eureka, California. The police academy is a two-hour drive from Crescent City and therefore allows for CCPD staff to stay engaged with recruits throughout the academy, to ensure they are successful in completing it.

The police academy is 23 weeks long and consists of three separate modules that the recruits must complete. The academy is a total of 950 hours of training and 32.5 units through the College of the Redwoods. Upon completion of the academy the recruit would then start a 14-week Field Training Program with CCPD as required by California Peace Officer Standards of Training (P.O.S.T).

Standard hiring procedures also require an applicant to complete a comprehensive background investigation, a psychological screening and a comprehensive medical examination.

The requirements to attend the police academy include a physical fitness test and passing a PELLETB entry test with a score of 42 or higher. These standards would be required of any applicant for a potential CCPD Recruit position.

The financial cost of CCPD putting a recruit through the academy would include wages and benefits, along with the associated costs of the academy as indicated below:

Registration (enrollment) Fee ‐ 32.5 semester units ($46/unit) $1495.00 Health Fee $18.00
Fingerprint Fee $100.00
On‐Campus Parking $40.00
POST Student Workbooks (Order online) $250.00
Vehicle and Penal Codes $45.00
Defensive Driving $200.00
Driving Simulator $40.00
Force Option Simulator Training $40.00
Uniforms $500.00
Ammunition (approximate based on supplier) $1000.00
Firearm $600
Physical Training Clothing $55.00
Est. Academy Cost $4383
Housing and Food:

Housing $3282
Fixed Costs, Dining Services $60
Food Service Credit (Meal Card) $1813
Damage Deposit $155
Est. Housing/Food Cost $5310
City Council Agenda Report
PD Recruit Police Academy Sponsorship Program
February 7, 2022
3 Total Cost Academy + Housing + Food Estimated Total Cost $9693 Prior to being hired by the City and going to the police academy, the recruit would sign an agreement with the City whereby the recruit will be required to pay back the actual cost of attending the academy, not including wages and benefits. If the recruit were to complete 5 years of service with the City as a sworn police officer, then no repayment would be required. If the recruit were to voluntarily separate from the CCPD and join another department as a sworn officer within 12 months, then the repayment schedule would be as follows:
• Separation prior to 1 year of employment: 100% repayment • Separation after completing 1 year but before completing 2 years: 80% • Separation after completing 2 years but before completing 3 years: 60% • Separation after completing 3 years but before completing 4 years: 40% • Separation after completing 4 years but before completing 5 years: 20% • Separation after completing 5 years: 0% repayment
To better assist a potential recruit with completing the academy, and to ensure a better transition to becoming a police officer with CCPD, it is recommended by staff to hire the recruit a couple months prior to the academy. The recruit would be able to start the Field Training process and go through department policies and qualifications, such as firearms and defensive tactics. Recruits would also be able to be introduced to the report writing system at CCPD and assist with other office duties up to their academy start date.

FINANCIAL IMPACT
The hourly wage for a recruit according to the current MOU is $18.02 plus benefits. The recruit would be paid the hourly wage upon hire (two months prior to starting the academy) and during the academy. This is a total of eight months (two months prior to academy and six months of academy training). Upon successful completion of the academy, the recruit would be transitioned to a police officer position. Since the police officer position is already in the budget, filling the vacancy as a recruit for part of the year would be a lower cost. The wages and benefits cost would not be part of the repayment agreement with the candidate.

The next academy begins in July. If the City fills a recruit position in May, to work with CCPD for May and June and then begin the academy in July, the academy costs would need to be included in next year’s budget.

STRATEGIC PLAN ANALYSIS
This report meets the goals and objectives of Strategic Plan Goal 1 “Support quality services and community safety to enhance the lives of our citizens and visitors”, 4 • CCPOA MOU Side Letter
• CCPOA MOU Amendment
• Resolution No. 2022-12

ATTACHMENTS
Crescent City one of the safest cities in the United States” Subsection C. “Empower and utilize Police, Fire, and Public Works departments to make February 7, 2022
PD Recruit Police Academy Sponsorship Program
City Council Agenda Report

Robin Patch, City Clerk
__________________________
ATTEST:

Jason Greenough, Mayor
_____________________________
ABSENT:

ABSTAIN:

NOES:

AYES:
vote:

Crescent City at a meeting thereof held on this 7
th day of February, 2022, by the following polled
PASSED AND ADOPTED and made effective the same day by the City Council of the City of _________________, 2022 (attached hereto) is also hereby ratified and approved.

Crescent City Police Officers Association for July 1, 2021 through June 30, 2023 dated Agreement to the Memorandum of Understanding Between the City of Crescent City and the BE IT FURTHER RESOLVED, by the City Council of the City of Crescent City that the Side Letter 2023 dated _________________, 2022 (attached hereto) is hereby ratified and approved.

Crescent City and the Crescent City Police Officers Association for July 1, 2021 through June 30, California that the Amendment to the Memorandum of Understanding Between the City of NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Crescent City, for approval by the City Manager and reviewed by the City Council.

WHEREAS, said Amendment and Side Letter Agreement to the MOU have been recommended Amendment to the MOU and the Side Letter Agreement; and WHEREAS, a majority of the bargaining unit members of the CCPOA have voted in favor of the Side Letter Agreement signed by the City Manager and the CCPOA; and WHEREAS, the City and the CCPOA have agreed to the terms of the Program as set forth in the Police Academy Sponsorship Program; and
WHEREAS, the City has met and conferred with the CCPOA regarding the implementation of a an error – the wages for the Police Recruit position were not listed correctly; and WHEREAS, in reviewing Exhibit “A” to the MOU in the context of another discussion, staff noticed Officers Association Effective July 1, 2021 through June 30, 2023 (“MOU”); and Memorandum of Understanding between the City of Crescent City and the Crescent City Police WHEREAS, the City Council adopted Resolution No. 2021-45 on August 16, 2021 approving the POLICE OFFICERS’ ASSOCIATION EFFECTIVE JULY 1, 2021 THROUGH JUNE 30, 2023

UNDERSTANDING BETWEEN THE CITY OF CRESCENT CITY AND THE CRESCENT CITY

APPROVING AN AMENDMENT AND A SIDE LETTER TO THE MEMORANDUM OF

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CRESCENT CITY RESOLUTION NO. 2022-12
CITY OF CRESCENT CITY RESOLUTION NO. 2022-12
Side Letter Agreement to the Memorandum of Understanding Between the City of Crescent City and the Crescent City Police Officers' Association Effective July 1, 2021through June 30, 2023 WHEREAS, the City of Crescent City (“City”) and the Crescent City Police Officers’ Association (“CCPOA”) successfully negotiated and executed a Memorandum of Understanding effective July 1, 2021 through June 30, 2023; and WHEREAS, both locally and nationally, the hiring and retention of law enforcement officers has become ever more challenging with
WHEREAS,the City has recruited for multiple open police officer positions in the last six months without success; and
WHEREAS, providing an opportunity for local residents to be hired and sponsored through a police academy by the police department is anticipated to create an additional pool of applicants looking to enter into the field of law enforcement and who want to serve locally; and
WHEREAS,the parties have met and conferred on the contents of this Side Letter and the program contained herein. NOW, THEREFORE, the City and the CCPOA agree that the City will implement a Police Academy Sponsorship Program as follows:

1. SPONSORSHIP. The City will implement a Police Academy Sponsorship Program whereby the City will hire a Police Recruit (“Employee”) and pay for his or her tuition and expenses to attend the College of the Redwoods Basic Law Enforcement Academy certified by POST (“Police Academy”). 2. REPAYMENT OBLIGATION. If the Employee voluntarily separates from service with the Crescent City Police Department prior to completing five (5) years of sworn service with the City of Crescent City and takes a sworn position with another entity within twelve (12) months of separation, then Employee shall be responsible for repaying the City, on a full, or prorated basis as set forth below the actual cost of his/her training at the Police Academy, inclusive of all expenses advanced on his/her behalf for enrollment and completion of the Police Academy, e.g,, tuition, fees, equipment, uniforms, etc. To the extent this amount exceeds the maximum that may be legally recovered, the City shall be entitled to recover the maximum allowable under the law. Repayment shall be due and payable at the time of separation. Employee’s reimbursement responsibility is set forth as follows:

Length of Service - Percentage of Repayment Due:
• Separation prior to 1 year of employment: 100% repayment • Separation after completing 1 year but before completing 2 years: 80% • Separation after completing 2 years but before completing 3 years: 60% • Separation after completing 3 years but before completing 4 years: 40% • Separation after completing 4 years but before completing 5 years: 20% • Separation after completing 5 years: 0% repayment

3. CONDITIONAL OFFER. All Police Recruits will be required to agree to the terms of repayment as set forth herein as part of the City’s conditional offer of employment. 4. PROBATIONARY PERIOD. All Police Recruits will be hired with a Class II Probationary Period (18 months). Upon obtaining his or her POST Basic Certification, the Employee will be promoted to Police Officer and begin a Class I Probationary Period (12 months). Either or both probationary periods may be extended by the City. 5. WAGES & BENEFITS. Police Recruits will receive those wages and benefits as set forth in the MOU and afforded to the members of the CCPOA bargaining unit with an effective date of July 1, 2021, as amended from time to time. Wages and benefits are not subject to repayment. 6. HIRING DISCRETION. Nothing in this Side Letter is intended to interfere with the City’s management decision as to whether to hire a Police Recruit or a Police Officer for an open Police Officer position. 7. EFFECTIVE DATE. This Program will be effective upon the date that this Side Letter is approved and ratified by the City Council. AGREED TO AND RECOMMENDED TO AGREED TO BY THE CCPOA:

THE CITy COUNCIL:

Z IT- -Z- Z£-
JEricWier, City Manager Date Anthony President Date
unjust n Gill, Vice President Date
CCPOA SIDE LETTER -POLICE ACADEMY SPONSORSHIP PROGRAM PG. 2 Amendment No. 1to the Memorandum of Understanding Between the City of Crescent City and the Crescent City Police Officers' Association Effective July 1, 2021through June 30, 2023 This Amendment No. 1 to the Memorandum of Understanding between the City of Crescent City and the Crescent City Police Officers Association Effective July 1, 2021 through June 30, 2023 is entered into by and between the City of Crescent City (“City”) and the Crescent City Police Officers Association (“CCPOA”), collectively referred to herein as the “Parties."
WHEREAS, on August 16, 2021, the City Council adopted Resolution No. 2021-45 approving the Memorandum of Understanding between the City of Crescent City and the Crescent City Police Officers Association Effective July 1, 2021 through June 30, 2023 (“MOU"); and
WHEREAS, in reviewing Exhibit “A” to the MOU in the context of another discussion, staff noticed an error-the wages for the Police Recruit position were not listed correctly; and WHEREAS, this amendment is necessary to correct the error in the wage listing for Police Recruit. NOW, THEREFORE, the Parties agree to amend the MOU as follows:

Amendment. The following amendment is made to the MOU, effective as of the date of approval and ratification by the City Council:

1.0 Exhibit A -Police Recruit. The hourly wage for a Police Recruit during the FY 21-22 is $18.02 per hour. 1.1
Other provisions. Except as modified herein, all other provisions of the MOU, as amended, are to remain in full force and effect until a successor agreement is reached. 2.0

AGREED TO AND RECOMMENDED TO
THE CITY COUNCIL:

AGREED TO BY THE CCPOA:

2.-2-22. /
City Manager Date Ant ez, President Date
Z- Z- -vtJustih Gill, Vice President Date

CITY COUNCIL AGENDA REPORT
TO: MAYOR GREENOUGH AND MEMBERS OF THE CITY COUNCIL
FROM: ERIC WIER, CITY MANAGER
BY: JON OLSON, DIRECTOR OF PUBLIC WORKS

ANDREW LEIGHTON, ENGINEERING PROJECT MANAGER
MARTHA D. RICE, CITY ATTORNEY
DATE: FEBRUARY 7, 2022
SUBJECT: STREET NAME CHANGES AND COST ALLOCATION
______________________________________________________________________

RECOMMENDATION
• Hear staff report
• Technical questions from the Council
• Receive public comment
• Further Council discussion
• Direct staff regarding the procedures for processing of street name changes requested by City residents

BACKGROUND
From time to time, either City staff or City residents find it prudent or appealing to change the name of a street, or simply a portion of a street. Name changes for streets are usually requested either to avoid confusion between different sections of the street or to provide better “branding” of a location. The City’s most recent processing of a name change did both. In 2014, South A Street was renamed Lighthouse Way (from Oceanfront Lodge to the Battery Point parking lot). Residents brought the proposal to the City Council with two justifications for the request: (1) confusion with visitors, first responders, and mail delivery services not realizing that A Street continued that far south; and (2) the name “Lighthouse Way” was a more appropriate choice as the street leads to the parking lot that serves Battery Point Lighthouse, a main attraction for tourists visiting Crescent City.

The required procedure for processing a name change is relatively simple. The Government Code only requires that the City Council adopt a resolution setting forth the name change and that the City notify the County Board of Supervisors. In practice, the City will also notify the US Postal Service, the City Police Department, the Fire Departments, the Sheriff’s Office / dispatch, and Del Norte Ambulance as well as local utilities.

STREET NAME CHANGE PROCEDURES
FEBRUARY 7, 2022
2 While the City does not have a formalized process for approving street name changes, the City has in practice taken the item to the Planning Commission for recommendation on approval/disapproval before bringing it to the City Council. This has not been done as a noticed public hearing but rather as a general agenda item.

ITEM ANALYSIS
Staff have recently received inquiries as to the process for requesting a street name change. Staff suggest continuing to take the matter to the Planning Commission for recommendation prior to bringing it to the City Council for a final decision. However, staff have identified various areas of concern that may warrant further Council consideration with regards to the technical processing of street name change applications. Such considerations include:

1. Approvals required:
a. Planning Commission?
b. City Council?
c. Public Hearings?

2. Application contents:
a. Name, location
b. Applicants – do all affected property owners required to consent? A majority (50%+1)? A supermajority (67%)?
c. Notice – notify by mail all affected property owners of application and public hearing date, regardless if they signed the petition
d. Fee – should the City establish a fee to cover staff time, signage, and public hearing notices?

3. Name requirements:
a. Appropriate for the location / no offensive references b. Use of English alpha-numeric characters only (no symbols, etc.) The City currently does not have a fee set for the processing of street name changes.

Staff will need to estimate costs for processing a name change after Council gives direction on the process to be utilized.

Upon receiving direction from the City Council, staff will return with a street name change application fee and ordinance for Council consideration.

FISCAL ANALYSIS
The cost of a street name change depends greatly on the process utilized. If Council directs staff to create an application fee, then future street name changes will be costneutral to the City. The adoption of the ordinance will involve staff time and publication costs.

STREET NAME CHANGE PROCEDURES
FEBRUARY 7, 2022
3 STRATEGIC PLAN ASSESSMENT
This action supports the following Strategic Plan goals:

GOAL 1: Support quality services, community safety, and health to enhance the quality of life and experience of our residents and visitors.

GOAL 3: Obtain the highest levels of organization excellence.

B. Maintain responsible fiscal management and accountability.

ATTACHMENTS
• None