AGENDA
A REGULAR MEETING
OF THE CUDAHY CITY COUNCIL
and JOINT MEETING of the
CITY OF CUDAHY AS SUCCESSOR AGENCY and HOUSING SUCCESSOR AGENCY
TO THE CUDAHY DEVELOPMENT COMMISSION
Tuesday, August 2, 2022 – 6:30 P.M.
Written materials distributed to the City Council within 72 hours of the City Council meeting shall be available for public inspection at www.cityofcudahy.com In compliance with the Americans with Disabilities Act (ADA) if you need special assistance to participate in this meeting, you should contact the City Clerk’s Office at (323) 773-5143 at least 72 hours in advance of the meeting.
Rules of Decorum
Under the Government Code, the City Council may regulate disruptive behavior that impedes the City Council Meeting.
Disruptive conduct may include, but is not limited to:
• Screaming or yelling during another audience member’s public comments period; • Profane language directed at individuals in the meeting room; • Throwing objects at other individuals in the meeting room; • Verbal altercations with other individuals in the meeting room; and • Going beyond the allotted three-minute public comment period granted.
When a person’s or group’s conduct disrupts the meeting, the Mayor or presiding officer will request that the person or group stop the disruptive behavior and WARN the person or group that they will be asked to leave the meeting room if the behavior continues.
If the person or group refuses to stop the disruptive behavior, the Mayor or presiding officer may order the person or group to leave the meeting room and may request that those persons be escorted from the meeting room. Any person who, without authority of law, willfully disturbs or breaks up a City Council meeting is guilty of a misdemeanor. (Pen. Code, § 403.)
Elizabeth Alcantar, Mayor
Jose R. Gonzalez, Vice Mayor
Jack M. Guerrero, Council Member
Blanca Lozoya, Council Member
Daisy Lomelí, Council Member
REMOTE TELECONFERENCE AND
ELECTRONICALLY
This meeting will be conducted telephonically
and electronically pursuant to Government
Code § 54953
Teleconference Phone Number:
1 (669) 900-6833
Meeting ID: 937 7453 0020
https://us06web.zoom.us/j/93774530020
City of Cudahy
City Council and Successor Agency
Regular Meeting Agenda
August 2, 2022, at 6:30 P.M.
1. CALL TO ORDER
2. ROLL CALL
Council / Agency Member Guerrero
Council / Agency Member Lozoya
Council / Agency Member Lomelí
Vice Mayor / Vice Chair Gonzalez
Mayor / Chair Alcantar
3. PLEDGE OF ALLEGIANCE
4. LAND ACKNOWLEDGEMENT
We would like to acknowledge that the land we inhabit today was once known as Tovangaar, the home of the Gabrieleño-Tongva people. We show our respects to the Gabrieleño-Tongva people, as well as all Indigenous people, past, present, and future, and honor their labor as original caretakers of this land. We commit to uplifting the Gabrieleño-Tongva people, invite you to acknowledge the history, and join us in caring for this land.
5. PRESENTATIONS
6. CLOSED SESSION PUBLIC COMMENTS - NONE
7. CLOSED SESSION - NONE
8. CLOSED SESSION ANNOUNCEMENT - NONE
Pursuant to Municipal Code Section 2.04.020, regular city council meetings are set to begin at 6:30 p.m., since there are no closed session items scheduled, the council will continue with the proceedings of this meeting without any break for closed session.
9. PUBLIC COMMENTS
(Each member of the public may provide a public comment telephonically or electronically by clicking the hand icon on Zoom or pressing star (*) nine (9) on the telephone, if he or she wishes to address the City Council. Members of the public are permitted to speak for three (3) minutes concerning items under the City Council’s jurisdiction, including items on the council agenda.) (Any person who, without authority of law, willfully disturbs or breaks up a City Council meeting is guilty of a misdemeanor. (Pen. Code, § 403).)
City of Cudahy
City Council and Successor Agency
Regular Meeting Agenda
August 2, 2022, at 6:30 P.M.
10. CITY COUNCIL COMMENTS / REQUESTS FOR AGENDA ITEMS (Each Council Member is limited to three minutes.)
(This is the time for the City Council / Agency to comment on any topics related to “City Business,” including announcements, reflections on city / regional events, response to public comments, suggested discussion topics for future council meetings, general concerns about particular city matters, questions to the staff, and directives to the staff (subject to approval / consent of the City Council majority members present, regarding staff directives). Each Council / Agency Member will be allowed to speak for a period not to exceed three (3) minutes. Notwithstanding the foregoing, the City Council Members shall not use this comment period for serial discussions or debate between members on City business matters not properly agendized. The City Attorney shall be responsible for regulating this aspect of the proceeding.)
11. CITY MANAGER REPORT (information only)
12. REPORTS REGARDING AD HOC, ADVISORY, STANDING, OR OTHER COMMITTEE
MEETINGS
13. WAIVER OF FULL READING OF RESOLUTIONS AND ORDINANCES (Consideration to waive full text reading of all Resolutions and Ordinances by single motion made at the start of each meeting, subject to the ability of the City Council / Agency to read the full text of selected resolutions and ordinances when the item is addressed by subsequent motion.) (COUNCIL / AGENCY)
Recommendation: Approve the Waiver of Full Reading of Resolutions and Ordinances.
14. CONSENT CALENDAR
(Items under the Consent Calendar are considered routine and will be enacted by one motion, prior to the vote to approve the Consent Calendar, each Council Member shall have a maximum of three (3) minutes to comment on the Consent Calendar as a whole. There will be no separate discussion of these items unless a Council / Agency Member so requests specific item(s) be removed from the Consent Calendar for separate action. Items may only be considered as a separate action if either (1) a Council Member must recuse themselves due to a conflict of interest or (2) a Council Member has specific questions for City Staff. Items called for separate discussion will be heard as the next order of business.) A. Consideration to Review and Approve the Draft Minutes of July 12, 2022, for the Special Meeting of the City Council and the Joint Meeting of the City of Cudahy as Successor Agency and Housing Successor Agency to the Cudahy Development Commission (page 5) Presented by the City Clerk
Recommendation: The City Council is requested to review and approve the City Council / Successor Agency Draft Minutes for July 12, 2022.
City of Cudahy
City Council and Successor Agency
Regular Meeting Agenda
August 2, 2022, at 6:30 P.M.
B. Adoption of Ordinance Amending Section 10.04.040 of Chapter 10.04 (Traffic Code) of Title 10 (Vehicles and Traffic) of the Cudahy Municipal Code (page 13) Presented by the Administrative Services Director
Recommendation: The City Council is requested to adopt Ordinance No. 724 by second reading, amending Section 10.04.040 of Chapter 10.04 (Traffic Code) of Title 10 (Vehicles and Traffic) of the Cudahy Municipal Code.
15. PUBLIC HEARING - NONE
16. BUSINESS SESSION
A. Consideration to Appoint Board Members to the Planning Commission (page 21) Presented by the City Clerk
Recommendation: The City Council is requested to review applications and appoint commission applicants to the Planning Commission.
B. Receive and File of the FY 2020-21 Audited Financial Statements and Related Reports (page 39) Presented by the Finance Director
Recommendation: The City Council is requested to receive and file the FY 2020-21 Audited Financial Statements and Related Reports.
17. COUNCIL DISCUSSION - NONE
18. ADJOURNMENT
I, Richard Iglesias, hereby certify under penalty of perjury under the laws of the State of California that the foregoing agenda was posted on the City’s Website, City Hall, Bedwell Hall, Clara Park, and Lugo Park not less than 72 hours prior to the meeting. A copy of said Agenda is on file in the City Clerk’s Office.
Dated this 28th day of July 2022
Estefania Zamora
Assistant City Clerk
“Serving the People” "Sirviendo A La Comunidad"
Staff Report
08/02/2022 Page 1 of 2
STAFF REPORT
Date: August 2, 2022
To: Honorable Mayor/Chair and City Council/Agency Members From: Alfonso Noyola, City Manager/Executive Director
By: Richard Iglesias, City Clerk
Subject: Consideration to Review and Approve the Draft Minutes of July 12, 2022, for the Special Meeting of the City Council and the Joint Meeting of the City of Cudahy as Successor Agency and Housing Successor Agency to the Cudahy Development Commission
RECOMMENDATION
The City Council is requested to review and approve the City Council / Successor Agency Draft Minutes for July 12, 2022.
BACKGROUND / ANALYSIS
On December 12, 2016, the City Council of the City of Cudahy adopted Resolution No. 16-38, approving the use of summary action minutes, meant to allow the City Clerk's Office to write the minutes in brief, assuring a record of Council's actions, due to having a recording of the full Council Meeting on the City’s website.
Historically
The Municipal Clerk is one of the oldest professions in government, dating back to 1272 A.D., originating in England. The record keeper then was called Remembrancer, an English official whose job was to remind the Lord Treasurer and Barons of Court, of business pending.
Years later, in the 1600s, when early colonists came to America, the office of the Clerk was one of the first offices to be established. Over the years, the City Clerk’s office has become the core for local government, and the liaison to the residents of the Community. The Municipal Clerk (City Clerk) is the record keeper of a City’s recorded history.
Item Number
14A
“Serving the People” "Sirviendo A La Comunidad"
Staff Report
08/02/2022 Page 2 of 2
William Bennett Munro, a Canadian historian, and political scientist, who taught at Harvard University and the California Institute of Technology, stated in one of his first textbooks written: “No other office in municipal service has so many contacts. It serves the Mayor, the City Council, the City Manager (when there is one), and all administrative departments, without exception. All of them call upon it, almost daily, for some service or information. Its work is not spectacular, but it demands versatility, alertness, accuracy, and no end of patience.
The public does not realize how many loose ends of city administration this office pulls together.”
Moving forward to the present time, the City Clerk’s office today is generally responsible for keeping a record of City Council meetings; agreements; recordings of official documents; legal advertisements; municipal elections; commissions and committees current files; claims against the city; and other legal or official documents.
City Clerks are required to keep record of the proceedings (minutes) of Council meetings (Government Code Sections 36814 and 40801). Minutes are the official record of a meeting which provides a history of the Council’s decisions and actions.
CONCLUSION
City Council is requested to approve the attached City Council / Agency Draft Minutes of the proceedings of July 12, 2022.
FINANCIAL IMPACT
No Financial Impact.
ATTACHMENT
A. Draft Minutes July 12, 2022
B. Resolution No. 16-38, approving the City Clerk’s use of Summary Action Minutes as the Official Record of the City Council proceedings.
City Council/Successor Agency Minutes of 7/12/22 Page 1 of 3
MINUTES
CUDAHY CITY COUNCIL SPECIAL MEETING and
CITY OF CUDAHY AS SUCCESSOR AGENCY and
HOUSING SUCCESSOR AGENCY TO THE CUDAHY
DEVELOPMENT COMMISSION JOINT MEETING
July 12, 2022 6:30 P.M.
1. CALL TO ORDER
Mayor / Chair Alcantar called the meeting to order at 6:37 p.m.
2. ROLL CALL
PRESENT: Council / Agency Member Blanca Lozoya
Council / Agency Member Daisy Lomelí
Vice Mayor / Vice Chair Jose R. Gonzalez (arrived at 6:41 p.m.) Mayor / Chair Elizabeth Alcantar
ABSENT: Council / Agency Member Jack M. Guerrero
ALSO PRESENT: City Manager, Alfonso Noyola, Deputy City Attorney, Stephanie Arechiga, City Clerk, Richard Iglesias, Finance Director, Joshua Calhoun, Director of Administrative Services, Brenda Rodriguez, and Community Development Director, Juan Arauz.
3. PUBLIC COMMENTS
Susie commented on the "The Cudahy Marijuana Retail Sales Regulation and Taxation Measure," hoping it be avoided by providing a ballot measure that counters it, ensuring that dispensaries are not allowed in residential areas near schools, parks, churches, and mentioned she found it difficult to invite people to the meeting due to information not being clear.
Gerardo Hernandez commented that he agrees with the previous speaker, having a ballot measure for the public to decide whether they want this to go forward, mentioning that if there are marijuana dispensaries, they should not be in residential areas near public schools and churches, believing it to be a place for minors to find loopholes to get ahold of these products, and the information promoting the council meeting not being clear.
Emanuel commented on having better accessibility to the Council meeting, agreed with previous speakers that if there were to be dispensaries in the city, they should not be in residential areas, being something residents should vote on, and mentioned there is no information on current cannabis operators.
Deputy City Attorney clarified that there is a resident ballot initiative before the Council, stating that the purpose of this meeting is for Council to decide whether Council wants to draft their own initiative and get feedback from the residents on what they want the council Attachment A
City Council/Successor Agency Minutes of 7/12/22 Page 2 of 3 lead initiative to say. Mayor Alcantar provided more feedback and background on what the Deputy City Attorney stated.
Tevina Q reiterated what other speakers had said about the accessibility to the Council meeting and mentioned when Council comes up with an initiative that, it needs to be clear to the public where the dispensaries will be, not wanting a dispenser accessible near her daughter, wanting to know where the money from cultivators is.
Gustavo Mendez commented on the difficulty of joining the special meeting and factors to consider about the cannabis ordeal, mentioned many of which being access to information, and gave an example of the planning commission asking for a current budget review for existing cannabis establishments and not being made a priority making it challenging to understand due to not having the information requested, calling for transparency.
Reina mentioned she will join the next meeting to speak about the rent control issue.
Finance Director addressed one of the public comments.
4. BUSINESS SESSION
Initiative "The Cudahy Marijuana Retail Sales Regulation and Taxation Measure" Workshop
Presented by the City Manager and City Attorney
City Council led workshop on the initiative "The Cudahy Marijuana Retail Sales Regulation and Taxation Measure.”
City Council provided suggestions and direction to staff to draft City measure; no action taken.
Mayor Alcantar requested for Public Comment to be reopened with Councilmembers agreeing.
Susie thanked the council for considering the community's comments, wanting to know if the tax is being considered to be increased to five percent, concerned it is not enough and reiterated her earlier comments, asked to consider the Atlantic Corridor, and check what other cities' tax rate is.
Edin Enamorado voiced his concern regarding the measure having jurisdiction to build anywhere, the city having leisure on lots on Atlantic and Patata, not wanting people and businesses to be displaced, and other concern is invasions of dispensaries bring a lot of attention.
Cecilia Barajas expressed her gratefulness for Council trying to find the best for the city.
She commented that many people who signed the measure were deceived, people canvassing door to door, stating we do not need marijuana.
City Council/Successor Agency Minutes of 7/12/22 Page 3 of 3
5. ADJOURNMENT
Vice Mayor Gonzalez motioned to adjourn the City Council / Agency meeting at 7:55 p.m., seconded by Council Member Lomelí. Motion passed 4-0-1 by the following roll call vote:
AYES: Lozoya, Lomelí, Gonzalez, and Alcantar
NOES: None
ABSENT: Guerrero
ABSTAIN: None
Elizabeth Alcantar
Mayor
ATTEST:
Richard Iglesias
City Clerk
Attachment
B
Blank Page
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Staff Report
08/02/2022 Page 1 of 3
STAFF REPORT
Date: August 2, 2022
To: Honorable Mayor/Chair and City Council/Agency Members From: Alfonso Noyola, City Manager/Executive Director
By: Administrative Services Director
Subject: Adoption of Ordinance Amending Section 10.04.040 of Chapter 10.04 (Traffic Code) of Title 10 (Vehicles and Traffic) of the Cudahy Municipal Code
RECOMMENDATION
The City Council is requested to adopt Ordinance No. 724 by second reading, amending Section
10.04.040 of Chapter 10.04 (Traffic Code) of Title 10 (Vehicles and Traffic) of the Cudahy Municipal Code.
BACKGROUND
1. On January 1, 2015, the City of Cudahy (the “City”) initiated its Overnight Pilot Parking Program (the “Program”) to allow permitted overnight on-street parking in designated parking areas.
2. On June 31, 2015, the City Council approved an extension of the Program for an additional year and has done so for each subsequent year thereafter.
3. On January 22, 2018, the City Council adopted Ordinance No. 671, amending Section
10.04.40 of Chapter 10.04 (Traffic Code) of Title 10 (Vehicles and Traffic) of the Cudahy Municipal Code amending section 10.04.040 to prohibit parking between the hours of 12:00 a.m. and 7:00 a.m. on Mondays and 3:00 a.m. and 6:00 a.m. Tuesdays through Sundays
4. On May 3, 2022, the City Council adopted Ordinance No. 721, amending Section 10.04.40 of Chapter 10.04 (Traffic Code) of Title 10 (Vehicles and Traffic) of the Cudahy Municipal Code amending section 10.04.040 to prohibit parking between the hours of 10 p.m.- 6 a.m.
Sunday through Thursday and 12:00 a.m. through 6:00 a.m. Friday and Saturday.
Item Number
14B
“Serving The People” "Sirviendo A La Comunidad"
Staff Report
08/02/2022 Page 2 of 3
ANALYSIS
The council is listening to concerns from the community and seeks to amend its restricted overnight parking hours. Municipal Code Section 10.04.040 currently prohibits parking between the hours of 10 p.m.- 6 a.m. Sunday through Thursday and 12:00 a.m. through 6:00 a.m. Friday and Saturday. The proposed Ordinance would amend Municipal Code Section
10.04.040 to prohibit parking between 12 a.m. and 6:00 a.m. every day. This restriction would not apply to vehicles that display an authorized overnight parking permit.
Furthermore, all other parking changes made on the Ordinance on May 3, 2022, will withstand.
Parking on Atlantic Ave will not be allowed at any time between Florence Avenue and Salt Lake Avenue.
Vehicles that exceed 6,000 pounds in gross unladen weight, except a vehicle which is subject to the provisions of Section 1031 through 1036 of the California Public Utilities Code, continue being prohibited from being parked or idle on the following streets:
(a) Cecelia Street from Atlantic Avenue to Wilcox Avenue; (b) Patata Street from Salt Lake Avenue to Wilcox Avenue; (c) Ardine Street from Salt Lake Avenue to Atlantic Avenue; (d) Wilcox Avenue from Cecelia Street to Patata Street; and (e) Salt Lake Ave from Olive Street to Patata Street
Upon approval of this Ordinance, City staff will arrange for conforming street signage to reflect such adjustments to restricted overnight parking hours.
FINANCIAL IMPACT
The adoption of the proposed Ordinance will have a financial impact on the current budget for fiscal year 2022-2023.
Signage – ($15,000)
Personnel Cost for signage – ($5,415)
Mailer- ($5000)
Total Costs ($25,415)
Any changes to parking signs would divert staff from other scheduled assignments and projects and could possibly delay. The personnel costs do not include any necessary overtime.
“Serving The People” "Sirviendo A La Comunidad"
Staff Report
08/02/2022 Page 3 of 3
CONCLUSION
City staff recommends that the City Council adopt the proposed Ordinance.
ATTACHMENT
A. Spreadsheet of comparison of surrounding cities’ parking status B. Ordinance No. 724
Questions: Maywood Bell Huntington Park South Gate Bell Gardens Downey Paramount Pico Rivera Is a parking permit
needed to park
overnight? Yes
residents
Only for guest(up
to 2 parking
permits per
overnight parking only
some streets are
restricted at times.
(Randolph requires
permit)
Required for
overnight parking
few areas you
cannot park
overtime (neeing
Required for
overnight
parking but
certain streets
you cannot park
No permits
Required for
overnight
parking
Yes on some
streets
Yes, certain
streets
If yes, what is the cost? $10 N/A
$40 every 6 months
$80/yr
one free parking
permit ($37) no cost $34
How long is the permit
valid for?
1 year
(September -
September)
temporary guest
permit ( as long as
needed) 6 MONTHS
January to
December
renewel every 2
years 1 year
What type of permits are
given for vehicles?
Annual/
Temporary (30
days at $0)
temporary guest
permit see above
preferential
parking permit 2 year renewel
annual ,
temporary (free
and up to 3
weeks)
Are cars allowed to park
on the street overnight?
Yes with
permit
No only guest with
permit see above No
Depends on the
street
depending on
street
What times can a vehicle
not be parked outside
with or without a
permit? 2AM-6AM 2AM-5AM varies, must see signs
varies, See
signs same as above
depending on
street
What information is
needed to obtain a
parking permit?
proof of
residency, ID,
valid
regristration
proof that a
person does not
live in the
surrounding cities
an in person
appoinment is needed
to pay after filing an
application
ID, valid
regristration,
utility bill
ID, valid
regristration ,
utility bill
Can you obtain a parking
permit online? Yes Yes
application can be
obtained in person and
online only in person only in person
City Parking Comparision
City
Attachment A
1 ORDINANCE NO. 724
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
CUDAHY AMENDING SECTION 10.04.040 OF CHAPTER
10.04 (TRAFFIC CODE) OF TITLE 10 (VEHICLES AND
TRAFFIC) OF THE CUDAHY MUNICIPAL CODE
WHEREAS, on January 1, 2015, the City of Cudahy (the “City”) initiated its Overnight PilotParking Program (the “Program”) to allow permitted overnight on-street parking in designated parking areas; and
WHEREAS, on June 31, 2015 and June 30, 2016, the City Council approved annual extensions of the Program through Resolution No. 14-77, Resolution No. 15-32, Resolution No. 16-21, Resolution No. 17.11, Resolution No. 18-32, Resolution No. 19-15, Resolution No. 20-31, and Resolution No. 21-17; and
WHEREAS, the City Council seeks to coordinate its restricted overnight parking hours with the Program, street signage, and street sweeping, as recommended by City staff; and
WHEREAS, upon approval of this ordinance, City staff will arrange for conforming street signage to reflect such adjustments to restricted overnight parking hours.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CUDAHY, CALIFORNIA DOES HEREBY ORDAIN AS FOLLOWS:
SECTION 1. The recitals above are true and correct and incorporated herein by reference.
SECTION 2. Section 10.04.040 of Chapter 10.04 (Traffic Code) of Title 10 (Vehicles and Traffic) of the Cudahy Municipal Code is hereby amended in its entirety to read as follows:
“10.04.040 All night parking – Exceptions.
(1) Notwithstanding the provisions of CMC 10.04.010, the operator of any vehicle shall not park such vehicle on any highway, street, alley, or public way, or public place between the hours of 12 a.m.- 6 a.m. every day.
(2) The hourly parking prohibitions set forth in this Section 10.04.040 shall not apply to any vehicle that properly displays a valid City-issued overnight parking permit. (3) The operator of any vehicle shall not park or leave standing any vehicle whether attended or unattended at any time, with or without a valid City-issued parking permit, on Atlantic Avenue between Florence Avenue and Salt Lake Avenue.
Attachment B
2 (4) Notwithstanding the provisions of CMC 10.04.010, no vehicle exceeding 6,000 pounds in gross unladen weight, except a vehicle which is subject to the provisions of Section 1031 through 1036 of the California Public Utilities Code, may be parked or idle on the Following Streets:
(a) Cecelia Street from Atlantic Avenue to Wilcox Avenue; (b) Patata Street from Salt Lake Avenue to Wilcox Avenue; (c) Ardine Street from Salt Lake Avenue to Atlantic Avenue; (d) Wilcox Avenue from Cecelia Street to Patata Street; and (e) Salt Lake Ave from Olive Street to Patata Street”
SECTION 2. Inconsistent Provisions. Any provision of the Cudahy Municipal Code or appendices thereto inconsistent with the provisions of this Ordinance, to the extent of such inconsistencies and no further, is hereby repealed or modified to the extent necessary to implement the provisions of this Ordinance.
SECTION 3. Severability. If any section, subsection, subdivision, paragraph, sentence, clause or phrase of this Ordinance, or any part thereof is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance or any part thereof. The City Council hereby declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause or phrase thereof, irrespective of the fact that any one or more section, subsection, subdivision, paragraph, sentence, clause or phrase would be subsequently declared invalid or unconstitutional.
SECTION 4. Construction. The City Council intends this Ordinance to supplement, not to duplicate or contradict, applicable state and federal law and this Ordinance shall be construed in light of that intent. To the extent the provisions of the Cudahy Municipal Code as amended by this Ordinance are substantially the same as the provisions of that Code as it read prior to the adoption of this Ordinance, those amended provisions shall be construed as continuations of the earlier provisions and not as new enactments.
SECTION 5. Publication and Effective Date. The Mayor shall sign and the City Clerk shall attest to the passage of this Ordinance. The City Clerk shall cause the same to be published once in a newspaper of general circulation within fifteen (15) days after its adoption. This Ordinance shall become effective thirty (30) days after adoption.
PASSED, APPROVED AND ADOPTED by the City Council of the City of Cudahy at the regular meeting of this 19th day of July, 2022.
3 Elizabeth Alcantar
Mayor
ATTEST:
Richard Iglesias
City Clerk
CERTIFICATION
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) SS:
CITY OF CUDAHY )
I, Richard Iglesias, City Clerk of the City of Cudahy, hereby certify that the foregoing Ordinance No.724 was introduced for a first reading on the 19th day of July, 2022 and approved for a second reading and adopted by said Council at its regular meeting held on the 2
nd day of August, 2022 by the following vote, to-wit:
AYES:
NOES:
ABSTAIN:
ABSENT:
Richard Iglesias
City Clerk
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STAFF REPORT
Date: August 2, 2022
To: Honorable Mayor/Chair and City Council/Agency Members From: Alfonso Noyola, City Manager/Executive Director
By: Richard Iglesias, City Clerk
Subject: Consideration to Appoint Board Members to the Planning Commission
RECOMMENDATION
The City Council is requested to review applications and appoint commission applicants to the Planning Commission.
BACKGROUND AND ANALYSIS
On May 17, 2022, City Council adopted Ordinance No. 722, amending Chapter 2.36 of Title 2, attached for reference.
In accordance with Ordinance No. 722, each Council Member shall appoint one commissioner to the Planning Commission. The appointed commissioner shall serve concurrently with the Council Member who appointed them.
On July 19, 2022, City Council appointed members to the Planning Commission. By majority vote, Planning Commissioner Gilbert Cuevas was temporarily appointed until a future commissioner is appointed to meet a full quorum on the Planning Commission.
CONCLUSION
Due to the recently adopted Ordinance, it is recommended Council Member Guerrero appoints an applicant to serve on the Planning Commission concurrent with his term of office.
Item Number
16A
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FINANCIAL IMPACT
There is no fiscal impact in the review and selection of commission appointees.
ATTACHMENT
A. Applications
B. Ordinance No. 722
Attachment A
ORDINANCE NO. 722
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY
OF CUDAHY AMENDING CHAPTER 2.36 (PLANNING
COMMISSION) OF TITLE 2 (ADMINISTRATION AND
PERSONNEL) OF THE CUDAHY MUNICIPAL CODE
WHEREAS, on September 7, 1982, the City Council for the City of Cudahy ("City Council") adopted Ordinance No. 290 establishing the Planning Commission in tht: City of Cudahy ("City"); and
WHEREAS, on November 1, 1993, the City Council adopted Ordinance No. 486, amending the organization of the Planning Commission; and WHEREAS, on February 7, 1994, the City Council adopted Ordinance No. 490, further amending the organization of the Planning Commission; and WHEREAS, on June 12, 2022, the City Council adopted Ordinance No. 578, once again amending the organization of the Planning Commission; and WHEREAS, Planning Commissioners provide a valuable service to the City by advising the City Council on numerous planning issues; and WHEREAS, on April 5, 2022, the City Council adopted Ordinance No. 719 amending Chapter 2.32 (City Commissioners) to ensure Commissioner qualifications, appointments, and terms are uniform for all Commissioners; and WHEREAS, the City Council wishes to update the Cudahy Municipal Code to ensure conformity among all commissions in the City, including the Planning Commission.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CUDAHY DOES ORDAIN AS FOLLOWS:
Section 1. The facts set forth in the recitals above are true and correct.
Section 2. Chapter 2.36.010 (Planning Commission) of Title 2 (Administration and Personnel) of the Cudahy Municipal Code is hereby amended in its entirety to read as follows:
"2.36.010 Planning Commission.
(1) Creation of Commission. There is hereby created and established a planning commission for the city.
(2) Membership. The planning commission shall consist of five members.
Attachment B
Ordinance No. 722
(3) Organization. The planning commission shall annually, at its first meeting in May of each calendar year, elect a chairperson and chairperson pro tem from among its members. The chairperson pro tempore may use the title "vice chairman/person" instead of chairperson pro tempore upon informing the commission secretary of that choice. The commission shall appoint a secretary, who need not be a member of the commission.
(4) Powers and Duties. The planning commission shall have all the powers, rights, and duties provided and given to the city planning commission under the laws of the state. In addition to the powers, rights, and duties given by such laws, the commission shall have the following powers, rights, and duties without limitation to the powers given by the laws of the state:
a) To recommend to the council and other officers of the city plans for the regulation of the future growth, development, and beautification of the city, including public and private buildings and works, subdivisions, streets, parks, playgrounds, and unimproved real property;
b) To recommend to the council plans for the future growth and development of the city in order to provide proper and adequate public utilities, sanitation, and other commercial and residential services; c) To recommend to the council for approval or disapproval maps or plats for the division of real property within the city and to approve and recommend the annexation of real property to the city. All maps or plats of real property shall be submitted to the planning commission for approval or disapproval before any recommendation is made to the council thereon; d) To make suggestions and recommendations to the council from time to time concerning the future needs and growth of the city, including the location and development of public and private buildings, structures, and grounds, and to recommend from time to time, upon request, the locations, architectural design, and use of buildings, structures, or works owned or controlled by private parties to be erected or maintained in the city;
e) To recommend to the council or other public officers of the city the location, architectural design, and use of public buildings, structures, and works controlled by the city or other political subdivisions within the city and to recommend the adoption of building restrictions and ordinances or codes restricting the use of property in residential, industrial, commercial and other zones within the city;
f) To consider and make recommendations on any proposed ordinance or resolution referred to the commission by the council and to investigate, suggest, and make recommendations on any matter submitted to the commission by the city manager or council for consideration and
Ordinance No. 722
recommendation; and
g) Any other powers and authority granted to the planning commission by the laws of the state.
(5) Advisory Members.
a) The Council may, by resolution, appoint advisory members to the planning commission, which members shall be selected from the offi,:;ers, employees, and elected officials of the city.
b) The term of each advisory member shall correspond to the member's term of office or term of employment with the city.
c) Each advisory member so appointed may designate an assistant or deputy to sit on the commission in the absence of the advisory member. d) Advisory members shall advise and consult with the commission and shall perform such other duties as may be prescribed by resolution of the council.
e) Advisory members sitting on the commission shall not be entitled to vote. (6) Appointed planning commissioners must adhere to all requirements and regulations set forth in CMG 2.32."
Section 3. CEQA. This Ordinance is not subject to CEQA under the general rule set forth in Section 15601(b)(3) of the CEQA Guidelines that CEQA only applies to projects which have the potential for causing a significant effect on the environment.
Section 4. Inconsistent Provisions. Any provision of the Cudahy Municipal Code, or appendices thereto, that conflicts with the provisions of this Ordinance, to the extent of such conflict and no further, is hereby repealed or modified to the extent necessary to affect the provisions of this Ordinance.
Section 5. Severability. If any section, subsection, subdivision, paragraph, sentence, clause or phrase of this Ordinance, or any part thereof is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance or any part thereof. The City Council hereby declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause or phrase thereof, irrespective of the fact that any one or more section, subsection, subdivision, paragraph, sentence, clause or phrase would be subsequently declared invalid or unconstitutional.
Section 6. Construction. This Ordinance is intended to supplement, not to duplicate or contradict, applicable state and federal law and this Ordinance shall be construed in light of that intent. To the extent the provisions of the Cudahy Municipal Code as amended by this Ordinance are substantially the same as the provisions of that Code as it read prior to the adoption of this Ordinance, those amended provisions shall
Ordinance No. 722
be construed as continuations of the earlier provisions and not as new enactments.
Section 7. Publication and Effective Date. The Mayor shall sign, and the City Clerk shall attest to the passage of this Ordinance. The City Clerk shall cause the same to be published once in the official newspaper within fifteen (15) days after its adoption.
This Ordinance shall become effective thirty (30) days after adoption.
PASSED, APPROVED and ADOPTED by the City Council of the City of Cudahy this 17th day of May 2022.
ATTEST:
City Clerk
Elizabeth A antar
Mayor
Ordinance No. 722
STATE OF CALIFORNIA )
CERTIFICATION
COUNTY OF LOS ANGELES ) SS:
CITY OF CUDAHY )
I, Richard Iglesias, City Clerk of the City of Cudahy, hereby certify that the foregoing Ordinance No. 722 was introduced for a first reading on the 3 rd day of May 2022 and
approved for a second reading and adopted by said Council at its regular meeting held on the 17th day of May 2022 by the following vote, to-wit:
AYES:
NOES:
ABSTAIN:
ABSENT:
Lomeli, Gonzalez, and Alcantar
None
Lozoya, Guerrero
None
“Serving The People” "Sirviendo A La Comunidad"
Staff Report
08/02/2022 Page 1 of 2
STAFF REPORT
Date: August 2, 2022
To: Honorable Mayor/Chair and City Council/Agency Members From: Alfonso Noyola, City Manager/Executive Director
By: Joshua Calhoun, Finance Director
Subject: Receive and File of the FY 2020-21 Audited Financial Statements and Related Reports
RECOMMENDATION
The City Council is requested to receive and file the FY 2020-21 Audited Financial Statements and Related Reports.
BACKGROUND
1. The firm Vasquez & Company LLP was engaged on October 29, 2021 to perform an independent audit of the financial statements of the City for FY2020-21.
2. The firm completed the audit process and have issued related reports as of July 2, 2022.
ANALYSIS
The City’s independent auditor, Vasquez & Company LLP, have completed their annual audit of the City’s general ledger for the fiscal year ending June 30, 2021. The City’s annual financial statements were prepared by the audit firm in accordance with Generally Accepted Accounting Principals (GAAP), Government Auditing Standards, and comply with other rules and regulations applicable to government entities.
At the conclusion of the audit test work, the audit firm issues an opinion as to the fairness of presentation of the financial position of City activities. The City received an unmodified opinion from the independent auditors. An unmodified opinion is an independent auditor’s judgement that an organization’s financial records and statements are fairly and appropriately presented in accordance with GAAP. In addition, the audit firm is required to issue reports related to internal controls and communicate with the Council on how the audit was planned and conducted. All reports and letters are attached.
Item Number
16B
“Serving The People” "Sirviendo A La Comunidad"
Staff Report
08/02/2022 Page 2 of 2
The financial statements consists of several parts: the basic financial statements which includes the government-wide financial statements, the fund financial statements, and notes to the financial statements. The required supplementary information provides additional financial information regarding the City not provided in the basic financial statements.
Within the auditor’s Letter of Comments to Management the auditors found no significant deficiencies or material weaknesses in the City’s internal controls. However, the auditors did identify two other deficiencies in internal controls:
1. Update the Finance Department Policies and Procedures Manual and Develop written policies and procedures for federal awards administration in accordance with Uniform Guidance.
2. Year-End Closing Process
The Finance Department is in the process of addressing these deficiencies. In June 2022 the Finance and Administrative Services Department issued policies and procedures relating to Grant Administration in order to be in compliance with grant regulations (ie. Uniform Guidance). The Accounting Policies and Procedures Manual will be updated in the current fiscal period and in conjunction with implementation of new financial software changes that will improve procedures within the City. The Year-end Closing Process has been implemented and was a result of substantial turnover in the Finance Department during the fiscal year under audit.
CONCLUSION
The City’s financial statements are presented fairly and appropriately in accordance with GAAP.
FINANCIAL IMPACT
There is no fiscal impact associated with this report. Costs associated with the annual audit were included in the fiscal year 2020-21 adopted budget.
ATTACHMENTS
Attachment A – General Purpose Financial Statements as of and for the Year Ended June 30, 2021 with Independent Auditor’s Report
Attachment B – Auditor’s Communication with Those Charged with Governance Pursuant to Statement on Auditing Standards 114
Attachment C – Independent Accountant’s Report on Agreed-upon Procedures Applied to Appropriations Limit Worksheet for Year Ended June 30, 2021
City of Cudahy
General Purpose Financial Statements
As of and For the Year Ended June 30, 2021
with Independent Auditor’s Report
Attachment A
(This page intentionally left blank)
City of Cudahy
General Purpose Financial Statements
As of and For the Year Ended June 30, 2021
with Independent Auditor’s Report
City of Cudahy
Table of Contents
PAGE
FINANCIAL SECTION
Independent Auditor’s Report 1
Basic Financial Statements
Government-wide Financial Statements
Statement of Net Position 4
Statement of Activities 5
Fund Financial Statements
Description of Major Funds 6
Balance Sheet 7
Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position 8
Statement of Revenues, Expenditures and Changes in Fund Balances 9 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 10 Description of Fiduciary Funds 11
Statement of Fiduciary Net Position 12
Statement of Changes in Fiduciary Net Position 13
Statement of Changes in Assets and Liabilities – Agency Funds 14 Notes to the Financial Statements 15
Required Supplementary Information
Budgetary Comparison Schedule
General Fund 53
Measure R 54
Housing Authority 55
Schedule of Proportionate Share of the Net Pension Liability 56 Schedule of Pension Contributions 57
Schedule of Changes in Net OPEB Liability and Related Ratios 58 Schedule of OPEB Contributions 59
Supplementary Information
Nonmajor Governmental Funds:
Description of Nonmajor Special Revenue Funds 60
Combining Balance Sheet 62
Combining Statement of Revenues, Expenditures and Changes in Fund Balances 66
Budgetary Comparison Schedules – Nonmajor Special Revenue Funds Prop 1B Local Street Improvements 70
Proposition A 71
City of Cudahy
Table of Contents
PAGE
Supplementary Information - Continued
Proposition C 72
Measure M 73
Air Quality Improvement (AQMD) 74
Used Oil Grant 75
Recycling Conservation Grants 76
Community Oriented Policing Services (COPS) Grant 77
County Park Bond 78
TDA – Transportation Development 79
Street Lighting 80
Cal HOME 81
Development Impact Fees 82
Surface Transportation Program Local (STPL) 83
Other Grants 84
State Gas Tax 85
Community Development Block Grant (CDBG) 86
1 Independent Auditor’s Report
The Honorable Mayor and the Members of the City Council City of Cudahy, California
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the City of Cudahy, California (the City), as of and for the year ended June 30, 2021, and the related notes to financial statements which collectively comprise the City's basic financial statements, as listed in the table of contents.
Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair 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 and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express opinions on these financial 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 entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s 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 presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
2 Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the City of Cudahy, California as of June 30, 2021, and the respective changes in financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Required Supplementary Information on pages 53 through 59 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Management has not presented the management’s discussion and analysis that the Governmental Accounting Standards Board has determined is necessary to supplement, although not required to be part of the basic financial statements.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The combining and individual nonmajor fund financial statements and budgetary comparison schedule are presented for purposes of additional analysis and are not a required part of the basic financial statements.
The combining and individual nonmajor fund financial statements and budgetary comparison schedules on pages 62 through 86 are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements and budgetary comparison schedules on pages 62 through 86 are fairly stated, in all material respects, in relation to the basic financial statements as a whole.
3 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated July 7, 2022 on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.
Glendale, California
July 7, 2022
City of Cudahy
Statement of Net Position
June 30, 2021
See notes to financial statements.
4 Governmental
Activities
Cash and investments $ 9,008,882
Receivables:
Accounts 709,181
Taxes 820,747
Notes, net 3,411,477
Interest 30,085
Prepaid expense 128,124
Due from other governments 308,601
Land held for resale 940,000
Advances to Successor Agency Private Purpose Trust Fund 524,916 Capital assets, net 19,435,028
Total assets 35,317,041
Deferred outflows related to pensions 415,654
Total deferred inflows of resources 415,654
Accounts payable and other current liabilities 1,343,837 Due to other governments 493,121
Noncurrent liabilities:
Due within one year 28,502
Due in more than one year 423,152
Net pension liability 3,767,399
Net OPEB liability 1,659,559
Total liabilities 7,715,570
Deferred inflows related to pensions 471,442
Deferred inflows related to OPEB 697,029
Total deferred inflows of resources 1,168,471
Net investment in capital assets 19,435,028
Restricted 8,817,332
Unrestricted (1,403,706)
Total net position $ 26,848,654
ASSETS
LIABILITIES
NET POSITION
DEFERRED OUTFLOWS OF RESOURCES
DEFERRED INFLOWS OF RESOURCES
City of Cudahy
Statement of Activities
Year ended June 30, 2021
See notes to financial statements.
5 Net (Expenses)
Revenues and
Operating Capital
Charges for Grants and Grants and Governmental
Functions/Programs Expenses Services Contributions Contributions Activities Primary governmentGovernmental activities:
General government $ 3,921,246 $ 1,154,842 $ 2,190,540 $ - $ (575,864) Public safety 4,148,037 989,864 1,877,605 - (1,280,568)Community services 2,964,799 593,919 1,126,563 - (1,244,317)Community development 2,318,586 560,923 1,063,976 - (693,687) Total primary government $ 13,352,668 $ 3,299,548 $ 6,258,684 $ - (3,794,436) General revenues:
Property taxes 154,402Sales and use taxes 2,843,293Franchise and transfer taxes 340,195Transient occupancy tax 54,344Business license tax 80,698Motor vehicle in lieu tax 333,061Utility users tax 1,245,288Investment income 38,161Other revenue 911,069 Total general and other revenues 6,000,511
2,206,075
Net position, beginning of year 24,642,579Net position, end of year $ 26,848,654 Program Revenues Net Position
Changes in
Net change in net position
City of Cudahy
Description of Major Funds
Year ended June 30, 2021
See notes to financial statements.
6 General Fund - accounts for all general revenues of the City not specifically levied or collected for other City funds and for expenditures related to the rendering of general services by the City.
Measure R Special Revenue Fund - accounts for revenues and expenditures for projects from a voter-approved sales tax measure (Measure R) for public transportation purposes.
Housing Authority Special Revenue Fund - accounts for assets used for low-and-moderate income housing activities in accordance with the applicable housing-related regulations.
City of Cudahy
Governmental Funds
Balance Sheet
June 30, 2021
See notes to financial statements.
7 Other
Housing Governmental
General Measure R Authority Funds Totals
ASSETS:
Cash and investments $ 1,634,251 $ 1,699,952 $ 842,945 $ 4,831,734 $ 9,008,882 Receivables:
Accounts 13,574 - 218,735 232,309
Taxes 820,747 - - 820,747
Grants - - - 285,219 285,219
Notes, net - - 2,943,257 468,220 3,411,477
Interest 2,288 981 - 26,816 30,085
Other 1,403 37,501 - 152,749 191,653
Prepaid expenses 128,123 - - - 128,123
Due from other funds 191,525 45,609 - 79,077 316,211
Advances to Successor Agency Private Purpose Trust Fund 524,916 - - - 524,916 Due from other governments 308,601 - - - 308,601
Land held for resale - - 940,000 - 940,000
Total assets 1,784,043 3,625,428 4,726,202 6,062,550 16,198,223 - - - - -
$ 3,625,428 $ 1,784,043 $ 4,726,202 $ 6,062,550 $ 16,198,223 Accounts payable $ 1,227,693 $ 10,670 $ - $ 80,216 $ 1,318,579 Deposits payable 25,257 - - - 25,257
Due to other governments - - 493,121 - 493,121
Due to other funds 79,077 - 237,134 - 316,211
Total liabilities 1,332,027 10,670 810,471 - 2,153,168
279,773 2,943,257 - 88,028 3,311,058
Prepaid expense 128,123 - - 128,123 -
Advances to Private-Purpose Trust Fund 524,916 - - 524,916 - 1,773,373 - 1,782,945 5,261,014 8,817,332
1,360,589 - - (96,963) 1,263,626
Total fund balances 2,013,628 1,773,373 1,782,945 5,164,051 10,733,997 Total liabilities, deferred inflows of
$ 3,625,428 $ 1,784,043 $ 4,726,202 $ 6,062,550 $ 16,198,223
DEFERRED INFLOWS OF RESOURCES
FUND BALANCES
resources and fund balances
Unavailable revenue
Total assets
LIABILITIES
Special revenue funds
Unassigned
Nonspendable
Restricted
Special Revenue
DEFERRED OUTFLOWS OF RESOURCES
ASSETS
City of Cudahy
Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position
June 30, 2021
See notes to financial statements.
8 Fund balance of governmental funds $ 10,733,997
Amounts reported for governmental activities in the Statement of Net Position are different because:
Capital assets, net of depreciation, of governmental activities are not financial resources and are not reported in the governmental funds. 19,435,028 Deferred outflows of resources related to pensions are not considered financial resources and are not reported in the governmental funds 415,654 Deferred inflows of resources related to pensions are not available to pay for current period expenses and are not reported in the governmental funds (471,442) Deferred inflows of resources related to OPEB are not available to pay for current period expenses and are not reported in the governmental funds (697,029) Unavailable revenues are not available to pay for current period expenditures and therefore are deferred in the funds and recognized as revenue in the Statement of Activities. 3,311,058
Long-term liabilities are not due and payable in the current period and are not reported in the governmental funds.
Insurance liability $ (343,032)
Compensated absences (108,622)
Net OPEB liability (1,659,559)
Net pension liability (3,767,399) (5,878,612)
Net position of governmental activities $ 26,848,654
City of Cudahy
Governmental Funds
Statement of Revenues, Expenditures, and Changes in Fund Balances Year ended June 30, 2021
See notes to financial statements.
9 Other
Housing Governmental
Revenues General Measure R Authority Funds Totals
Taxes $ 4,546,182 $ 37,501 $ - $ 467,598 $ 5,051,281
Licenses and permits 2,918,129 - - - 2,918,129
Intergovernmental 2,997,676 304,126 - 2,783,142 6,084,944 Charges for services 217,038 - - - 217,038
Fines, forfeitures and penalties 164,381 - - - 164,381
Use of money and property 8,739 7,627 - 21,795 38,161
Other revenue 891,892 - 7,771 68,619 968,282
Total revenues 349,254 11,744,037 7,771 3,341,154 15,442,216 Expenditures
Current:
General government 3,947,285 - - 20,629 3,967,914
Public safety 4,034,015 - - 114,022 4,148,037
Community services 460,367 - - 2,081,346 2,541,713
Community development 1,695,743 50,713 35,410 574,923 2,356,789 Capital outlay - 301,151 607,609 - 908,760
Total expenditures 10,137,410 351,864 35,410 3,398,529 13,923,213 Excess (deficiency) of revenues
over expenditures 1,606,627 (2,610) (27,639) (57,375) 1,519,003 Other financing sources (uses)
Transfers in 5,232,944 292,374 775,847 7,849,271 14,150,436 Transfers out (7,191,161) (137,345) (6,879,143) - (14,207,649) Net other financing sources (uses) (1,958,217) 155,029 775,847 970,128 (57,213) Change in fund balance (351,590) 152,419 748,208 912,753 1,461,790 Fund balance, beginning of year 2,365,218 1,620,954 1,034,737 4,251,298 9,272,207 Fund balance, end of year $ 2,013,628 $ 1,773,373 $ 1,782,945 $ 5,164,051 $ 10,733,997 Special Revenue
City of Cudahy
Governmental Funds
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities Year ended June 30, 2021
See notes to financial statements.
10 Change in fund balances - governmental funds $ 1,461,790 Amounts reported for governmental activities in the Statement of Activities differ from the amounts reported in the Statement of Revenues, Expenditures, and Changes in Fund Balances because:
Governmental funds report capital outlay as an expenditure. However, in the Statement Capital outlay, net of dispositions $ 1,029,431
Depreciation (537,494) 491,937
Revenues that are measurable but not available are recorded as deferred or unavailable revenue under the modified accrual basis of accounting. 173,740 In the Statement of Activities, long-term liabilities are measured by the amounts amounts paid).
Insurance liability 61,800
Compensated absences (10,499) 51,301
Pension contribution made after the measurement date was recorded as an expenditure in the governmental funds but deferred in the government-wide financial statements. 112,357 Some expenses reported in the Statement of Activities do not require the use of current financial resources and therefore, are, not reported in the governmental funds.
Pension expense - GASB 68 (283,027)
Other postemployment benefits - GASB 75 197,977 (85,050) Change in net position of governmental activities $ 2,206,075 of Activities, the cost of these assets is allocated over the useful lives as depreciation expense.
earned during the fiscal year. In governmental funds, however, expenditures for these items are measured by the amount of financial resources used (essentially the
City of Cudahy
Description of Fiduciary Funds
June 30, 2021
See notes to financial statements.
11 Custodial Agency Funds - accounts for the assets held by the City as an agent for individuals, private organizations or other government units and/or other funds. The City’s custodial fund is the Cudahy Youth Foundation.
Successor Agency to the Dissolved Cudahy Community Development Commission PrivatePurpose Trust Fund - this is a fiduciary fund type used by the City to report trust arrangements under which principal and income benefit other governments. This fund reports the assets, liabilities and activities of the Successor Agency to the Dissolved Cudahy Community Development Commission.
Unlike the limited reporting typically utilized for Agency Fund, the Private-Purpose Trust Fund reports a Statement of Fiduciary Net Position and a Statement of Changes in Fiduciary Net Position.
City of Cudahy
Fiduciary Funds
Statement of Fiduciary Net Position
June 30, 2021
See notes to financial statements.
12 Successor
Agency to the
Dissolved
Cudahy
Community
Development
Custodial Commission
Agency Private-Purpose
Funds Trust Fund
ASSETS
Cash and cash equivalents $ 41,659 $ 3, 874,006
- 210,720
Rental and other accounts receivable, net 25 -
Prepaid expenses - -
Capital assets, net of accumulated depreciation - 13 ,160,072 Land held for development - 2, 136,097
Total assets $ 41,684 19, 380,895
Unamortized loss on defeasance of debt 1,218,607
Current liabilities:
Accounts payable $ 41,684 -
Accrued interest payable - 101,288
Advances from the City of Cudahy - 833,517
Noncurrent liabilities
Bonds payable - due within one year - 1, 450,000
Bonds payable - due in more than one year - 9, 815,000
Note payable - due in more than one year - 1, 409,928
County deferrals - due in more than one year - 1, 277,487 Total liabilities $ 41,684 14, 887,220
10,441
FIDUCIARY NET POSITION
Restricted net position $ 5,701,841
Restricted cash and investments
DEFERRED OUTFLOWS OF RESOURCES
LIABILITIES
DEFERRED INFLOWS OF RESOURCES
City of Cudahy
Fiduciary Funds
Statement of Changes in Fiduciary Net Position
Year ended June 30, 2021
See notes to financial statements.
13 Successor
Agency to the
Dissolved
Cudahy
Community
Development
Commission
Private-Purpose
Trust Fund
Additions
Contributions:
Redevelopment Agency Property Tax Trust Fund $ 1,566,448 Interest and investment revenue:
Use of money and property 16
Other revenue 149,050
Total revenues 1,715,514
Deductions
Interest and fiscal charges 477,476
Administrative expenses 540,730
Total expenses 1,018,206
Net change in net position 697,308
Net position held in trust - beginning 5,004,533
Net position held in trust - ending $ 5,701,841
City of Cudahy
Agency Funds
Statement of Changes in Assets and Liabilities
Year ended June 30, 2021
See notes to financial statements.
14 Balance Balance
July 1, 2020 Additions Deletions June 30, 2021
Assets
Cash and cash equivalents $ 21,020 $ 20,639 $ - $ 41,659 Rental and other accounts receivable, net 69 - 44 25
Prepaid expenses 6,500 6,500 - -
Total assets $ 27,589 $ 20,639 $ 6,544 $ 41,684
Liabilities
Accounts payable $ 27,589 $ 20,639 $ 6,544 $ 41,684
Total liabilities $ 27,589 $ 20,639 $ 6,544 $ 41,684
City of Cudahy
Notes to the Financial Statements
Year ended June 30, 2021
15 NOTE 1 REPORTING ENTITY
The City is a municipal corporation governed by an elected five-member council. As required by generally accepted accounting principles, these financial statements present the primary government and its component units, which are separate legal entities for which the City is considered to be financially accountable.
Component Units
Cudahy Economic Development Corporation (CEDC)
The CEDC was created to hold the assets of the former redevelopment agency of the City. In 2014, the State Controller’s Office ordered the transfer of the assets to the Successor Agency to the former Cudahy Community Development Commission/ Redevelopment Agency (Successor Agency). In 2015, the Board of Directors of CEDC and the Oversight Board to the Successor Agency approved the asset transfer agreement. Accordingly, all properties of CEDC were transferred to the Successor Agency on October 19, 2015.
Cudahy Financing Authority (the Financing Authority)
The Financing Authority is a joint powers authority whose members are the City and the Successor Agency. The Authority is duly organized and existing under a Joint Exercise of Powers agreement by and between the City and the former Redevelopment Agency, under the provisions of Chapter 5 of Division 7 of Title 1 of the California Government Code. Its purpose is to assist the City and the Successor Agency in providing financing for capital projects and improvements. The officers of the City and the Successor Agency serve as the officers of the Authority.
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City's financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America as applied to governmental agencies. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The City's more significant accounting policies are described below.
Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the providers have been met.
Government-wide and fund financial statements
The statement of net position and statement of activities (i.e., the government-wide financial statements) display information on all of the non-fiduciary activities of the primary government (the City) and its discretely presented component units.
City of Cudahy
Notes to the Financial Statements
Year ended June 30, 2021
16 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) The statement of activities presents a comparison between direct expenses and program revenues for each function of the City's governmental activities. Direct expenses are those that are specifically associated with a program or function and are clearly identifiable to a particular function. Program revenues include 1) charges paid by the recipients of goods or services offered by the programs and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.
As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Direct expenses have not been eliminated from the functional categories; indirect expenses and internal payments have been eliminated.
Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes.
When both restricted and unrestricted resources are available for use, the City's policy is to use restricted resources first, then the unrestricted resources as they are needed.
Governmental fund financial statements
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collected within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period, except for certain grants which are considered available if collected within 7 months after year-end. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due.
The City reports the following major governmental funds:
General Fund: This fund is used to account for all financial resources of the City, except for those required to be accounted for in another fund.
Measure R Special Revenue Fund: This fund is used to account for revenues and expenditures for projects from a voter-approved sales tax measure (Measure R) for public transportation purposes.
Housing Authority Special Revenue Fund: This fund accounts for assets used for low-and-moderate income housing activities in accordance with the applicable housing-related regulations.
City of Cudahy
Notes to the Financial Statements
Year ended June 30, 2021
17 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Additionally, the City reports the following fund types:
Other Governmental Funds
Special revenue funds account for proceeds of specific revenue sources that are legally restricted or otherwise designated for specific purposes.
Fiduciary Funds
Agency Funds
These funds are used to account for the assets held by the City as an agent for individuals, private organizations or other government units and/or other funds.
Successor Agency Private-Purpose Trust Fund
Private-Purpose trust fund is a fiduciary fund type used by the City to report trust arrangements under which principal and income benefit other governments. This fund is used to report the assets, liabilities and activities of the Successor Agency to the Dissolved Cudahy Community Development Commission. Unlike the limited reporting typically utilized for Agency Fund, Private-Purpose Trust Fund reports a statement of fiduciary net position and a statement of changes in fiduciary net position.
Budgetary Control and Accounting
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. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) as changes in net position.
All governmental fund types and agency funds use the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount of the transaction can be determined and "available” means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. The City considers property taxes and sales taxes to be available if they are collected within 60 days after year-end. Expenditures are recorded when the related fund liability is incurred, except for unmatured principal and interest on general long-term debt which is recognized when due.
City of Cudahy
Notes to the Financial Statements
Year ended June 30, 2021
18 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Revenues considered susceptible to accrual are property taxes, sales taxes, utility taxes, admission tax, interest revenue and grant revenues. All other revenues are not considered susceptible to accrual by the City.
The City at times reports unavailable revenue in its financial statements. Unavailable revenues arise when potential revenue does not meet the “available" criterion for recognition in the current period. Additionally, unearned revenues arise when the City receives resources before it has a legal claim to them, as when grant monies are received prior to the incurrence of qualifying expenditures.
In subsequent periods, when both revenue recognition criteria are met, or when the City has a legal claim to the resources, the unavailable and unearned revenue is removed from the balance sheet and revenue is recognized.
Budgets are adopted on a basis consistent with GAAP. The City Council approves the budget submitted each year by the City Manager prior to the beginning of the new fiscal year. Supplemental appropriations are approved by the Council and City Manager when required during the period. The City Manager may amend the budget administratively so long as the amendment does not increase the total appropriation for each fund. All other budget amendments are approved by the City Council.
Expenditures may not exceed appropriations at the fund level, which is the legal level of control. Annual appropriated budgets are adopted for the general and special revenue funds.
Assets, Liabilities, Deferred Outflows and Inflows of Resources, and Net Position or Equity
Cash and Investments
Cash equivalents are defined as short-term, highly liquid investments that are both readily convertible to known amounts of cash or so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Cash equivalents have an original maturity date of three months or less from the date of purchase.
Investments are recorded at fair value. The estimated fair value of all investments is the quoted market price. Interest income earned on pooled cash and investments is allocated to the various funds based on their monthly average cash balances.
Changes in fair value that occur during a fiscal year are recognized as investment income reported for that fiscal year. Investment income includes interest earnings, changes in fair value, and any gains or losses realized upon the liquidation, maturity, or sale of investments.
The City pools cash and investments of all funds. Each fund’s share in this pool is displayed in the accompanying financial statements as cash and investments.
City of Cudahy
Notes to the Financial Statements
Year ended June 30, 2021
19 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) The City pools cash from all funds in order to increase income earned through its investment program. Investment income from pooled investments is allocated to those funds which are required by law or administrative action to receive interest. Investment income is allocated on a quarterly basis based on the weighted average cash balance in each fund.
Property Taxes
Assessed values are levied on an annual basis by the Los Angeles County Assessor as of July 1. Taxes become a lien on real property on January 1 and are payable in two installments on November 1 and February 1. They become delinquent if not paid by December 10 and April 10, respectively.
Receivables and Payables
Property, sales, use, and utility user taxes related to the current fiscal year are accrued as revenue and accounts receivable and considered available if received within 60 days of year-end. Federal and state grants are considered receivable and accrued as revenue when reimbursable costs are incurred under the accrual basis of accounting.
The amount recognized as revenue under the modified accrual basis of accounting is limited to the amount that is deemed measurable and available.
Prepaid Expenses
Certain payments to vendors reflect costs applicable to future periods and are recorded under prepaid expenses in both government-wide and fund financial statements. These costs will be recognized in the period when services are received or when the City receives title to the property.
lnterfund Transactions
lnterfund transactions are reflected as loans, services provided reimbursements, or transfers. Loans are reported as receivables and payables as appropriate, are subject to elimination upon consolidation and are referred to as either "due to/from other funds" (i.e., the current portion of lnterfund loans) or "advances to/from other funds" (i.e., the noncurrent portion of lnterfund loans). Any residual balance outstanding in the governmental activities is reported in the government-wide financial statements as "internal balance". Advances between funds, as reported in the fund financial statements, are offset by a fund balance reserve account in applicable governmental funds to indicate that they are not available for appropriation and are not available financial resources.
Services provided, deemed to be at market or near market rates, are treated as revenues and expenditures/expenses. Reimbursements are when one fund incurs a cost, charges the appropriate benefiting fund and reduces its related cost as a reimbursement. All other lnterfund transactions are treated as transfers.
Restricted Assets
Certain proceeds of debt issues, as well as certain resources set aside for their repayment, are classified as restricted assets on the balance sheet because their use is limited by applicable bond covenants.
City of Cudahy
Notes to the Financial Statements
Year ended June 30, 2021
20 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Capital Assets
Capital assets, which include land, buildings, improvements, equipment and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items) are reported in the governmental activities column in the government-wide financial statements.
Capital assets are recorded at the lower of actual historical cost or fair value (as of the date donated for contributed assets).
The City has analyzed its capital assets for potential impairment. The City does not believe that any capital assets are impaired at June 30, 2021.
The costs of normal maintenance and repairs that do not add to the value of the assets or materially extend asset lives are not capitalized.
Capital assets are depreciated using the straight-line method over the following estimated useful lives:
Building and improvements 50 years
Parks and park improvements 40 years
Infrastructure 10 to 40 years
Vehicles, furniture and equipment 3 to 5 years
It is the City's policy to capitalize all land, building, improvements, equipment and infrastructure assets, except assets costing less than $5,000, and to capitalize infrastructure assets costing $50,000 or more. In the government-wide financial statements, costs of assets sold or retired (and related amounts of accumulated depreciation) are eliminated from the accounts in the year of sale or retirement and the resulting gain or loss is included in the statement of activities. In governmental funds, the sale of general capital assets is included in the statement of revenues, expenditures and changes in fund balances as proceeds from sale.
Deferred Outflows and Inflows of Resources
Pursuant to GASB Statements No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, and No. 65, Items Previously Reported as Assets and Liabilities, the City recognizes deferred outflows and inflows of resources. A deferred outflow of resources is defined as a consumption of net position by the government that is applicable to a future reporting period. A deferred inflow of resources is defined as an acquisition of net position by the government that is applicable to a future reporting period.
Revenues earned, but not yet received, may not be available in a timely manner to pay current expenditures or obligations. Such receivables, not meeting the availability criteria necessary for accrual under modified accrual basis accounting principles, are reported as unavailable revenues for that period in the fund financial statements. In the government-wide financial statements, however, availability criteria are not considered. Instead, revenues become, and remain receivable from the point in time when revenue is earned through performance or similar recognition standards, until received. Refer to Note 12 for the list of deferred outflows and deferred inflows of resources the City has recognized as of June 30, 2021.
City of Cudahy
Notes to the Financial Statements
Year ended June 30, 2021
21 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Compensated Absences
City employees receive up to 240 paid vacation hours per year, depending upon their length of service. In the fund financial statements, the City accounts for compensated absences (unpaid vacation and sick leave) as expenditures in the year paid, as it is the City's policy to liquidate any unpaid vacation or compensatory pay from future resources, rather than from currently available expendable resources.
All unpaid vacation and sick pay is accrued when earned in the government-wide and fiduciary fund financial statements.
Unearned Revenues
Unearned revenues arise when the City receives resources before it has a legal claim to them (e.g., when grant monies are received prior to the incurrence of qualifying expenditures).
Long-term Obligations
In the government-wide and fiduciary fund financial statements, long-term debt and other long-term obligations are reported as liabilities. Bond premiums and discounts are deferred and amortized over the life of the bonds. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are expensed when incurred.
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.
Fund Balance Reporting
Governmental Accounting Standards Board (GASB) Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, establishes the following fund balance classifications that comprise a hierarchy based primarily on the extent to which a government is bound to observe constraints imposed upon the use of the resources reported in governmental funds:
Nonspendable fund balance includes amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact. The City’s nonspendable fund balances represent prepaid expenses and advances to the Successor Agency Private – Purpose Trust Fund.
Restricted fund balance includes resources that are subject to externally enforceable legal restrictions. It includes amounts that can be spent only for the specific purposes stipulated by constitution, external resource providers, or through enabling legislation.
City of Cudahy
Notes to the Financial Statements
Year ended June 30, 2021
22 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) The City’s restricted fund balance of $8,817,332 represents resources restricted for special projects, and programs funded by local, state and federal grants.
Committed fund balance includes amounts that can be used only for the specific purposes determined by a formal action or resolution of the City’s highest level of decision-making authority (City Council). Committed amounts cannot be used for any other purpose unless the City Council removes or changes the specific use through the same type of formal action or resolution taken to establish the commitment. The City has no committed fund balances.
Assigned fund balance consists of funds that are set aside for specific purposes by the City’s highest level of decision-making authority or a body or official that has been given the authority to assign funds. The City Council delegates the authority to assign fund balance to the City Manager for purposes of reporting in the annual financial statements. The City has no assigned fund balances.
Unassigned fund balance is the residual classification for the City’s general fund and includes all spendable amounts not contained in the other classifications. This category also provides the resources necessary to meet unexpected expenditures and revenue shortfalls.
The government-wide financial statements utilize a net position presentation. Net position is categorized as net investment in capital assets, restricted, and unrestricted. Net investment in capital assets - This category groups all capital assets, including infrastructure, into one component of net position. Accumulated depreciation and the outstanding balances of debt that are attributable to the acquisition, construction or improvement of these assets reduce the balance of this category.
Restricted net position - This category presents external restrictions imposed by creditors, grantors, contributors, laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabling legislation.
Unrestricted net position - This category represents the City's net positions, which are not restricted for any project or other purpose.
City of Cudahy
Notes to the Financial Statements
Year ended June 30, 2021
23 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Pensions
For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the City’s California Public Employees’ Retirement System (CalPERS) plans and additions to/deductions from the Plans’ fiduciary net position have been determined on the same basis as they are reported by CalPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.
Other Postemployment Benefits (OPEB)
For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the OPEB Plan and additions to/deductions from OPEB Plan's fiduciary net position have been determined on the same basis as they are reported by the Plan. For this purpose, the OPEB Plan recognizes benefit payments when due and payable in accordance with the benefit terms. Investments are reported at fair value, except for money market investments, which are reported at amortized cost.
NOTE 3 STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
Fund balances at June 30, 2021 consisted of the following:
Deficit Fund Balances
The following funds have deficit fund balances at June 30, 2021. Management expects to eliminate the deficits with subsequent revenue in the funds or transfers from the General Fund:
Major funds:
Nonspendable $ 653,039
Restricted for special purposes 3,556,318
Unassigned 1,360,589
Total major 5,569,946
Nonmajor funds:
Restricted for special purposes 5,261,014
Unassigned (96,963)
Total nonmajor 5,164,051
Total $ 10,733,997
Nonmajor funds:
Other Grants $ (88,944)
Street Lighting (8,019)
City of Cudahy
Notes to the Financial Statements
Year ended June 30, 2021
24 NOTE 3 STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY (CONTINUED) Expenditures in Excess of Appropriations
Expenditures for the year ended June 30, 2021 exceeded the appropriations by the following amounts in the following funds:
Expenditures in excess of appropriations:
Major funds:
General Fund
Community development $ (472,940)
Measure R
Community development (1,972)
Housing Authority
Community development (35,410)
Nonmajor funds:
Prop C
Capital outlay (23,434)
Measure M
Community services (7,856)
Street Lighting
Community services 66,078
State Gas Tax
Community services (424,006)
CDBG
General government (20,629)
City of Cudahy
Notes to the Financial Statements
Year ended June 30, 2021
25 NOTE 4 CASH AND INVESTMENTS
Cash and Investments as of June 30, 2021 are classified in the financial statements as follows:
Cash and investments are classified as follows:
Governmental Activities:
Statement of Net Position:
Cash and investments - unrestricted $ 9,008,882
Fiduciary Activities:
Statement of Fiduciary Net Position:
Cash and cash equivalents - unrestricted 3,915,665
Cash and Investments with fiscal agent 210,720
Total cash and investments $ 13,135,267
Cash and investments consist of the following:
Petty cash $ 10,920
Deposits with financial institutions 4,749,434
Investments 8,374,913
Total $ 13,135,267
City of Cudahy
Notes to the Financial Statements
Year ended June 30, 2021
26 NOTE 4 CASH AND INVESTMENTS (CONTINUED)
Investments Authorized by the California Government Code and the City’s Investment Policy
The following table identifies the investment types that are authorized for the City by the California Government Code and the City's investment policy. The table also identifies certain provisions of the California Government Code (or the City's investment policy, if more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustee that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City's investment policy.
City of Cudahy
Notes to the Financial Statements
Year ended June 30, 2021
27 NOTE 4 CASH AND INVESTMENTS (CONTINUED)
Investments Authorized by Debt Agreements
Investments of debt proceeds held by fiscal agent are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the City's investment policy. The table below identifies the investment types that are authorized for investments held by fiscal agent. The table also identifies certain provisions of these debt agreements that address interest rate risk, credit risk, and concentration of credit risk.
Maximum Maximum
Maximum Percentage Investment
Authorized Investment Type Maturity of Portfolio In One Issuer Local Agency Bonds None None None
U.S. Treasury Obligations None None None
U.S. Agency Securities None None None
Banker’s Acceptances 1 year None None
Commercial Paper 270 days None None
Negotiable Certificates of Deposit None None None
Repurchase Agreements 30 days None None
Money Market Mutual Funds N/A None None
Local Agency Investment Fund N/A None None
Investment Agreements N/A None None
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater is the sensitivity of its fair value to changes in market interest rates. One of the ways that the City may manage its exposure to interest rates risk is by purchasing a combination of shorter-term and longer-term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity over time as necessary to provide the cash flow and liquidity needed for operations.
Information about the sensitivity of the fair values of the City’s investments to market interest rate fluctuations is provided by the following table that shows the distribution of the City’s investments by maturity:
12 Months 13 to 24 25 to 60 More than
Total or Less Months Months 60 Months
Investment Type
Local Agency Investment Fund $ 8,374,913 $ 8,374,913 $ - $ - $ - Total $ 8,374,913 $ 8,374,913 $ - $ - $ -
Remaining Maturity in Months
City of Cudahy
Notes to the Financial Statements
Year ended June 30, 2021
28 NOTE 4 CASH AND INVESTMENTS (CONTINUED)
Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by (where applicable) the California Government Code or the City's investment policy and the actual rating as of yearend for each investment type.
Minimum
Total as of Legal
Investment Type June 30, 2021 Rating AAA Not Rated
Local Agency Investment Fund $ 8,374,913 N/A $ - $ 8,374,913 Total $ 8,374,913 $ - $ 8,374,913
Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The California Government Code and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits, other than the following provision for deposits: The California Government Code requires that a financial institution secure deposits made by state or local government units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits.
As of June 30, 2021, no deposits with financial institutions in excess of federal depository insurance limits were held in uncollateralized accounts.
Custodial credit risk does not apply to a local government’s indirect investment in securities through the use of mutual funds or government investment pools (such as LAIF). As of June 30, 2021, none of the City’s investments were held by the brokerdealer (counterparty) that was used by the City to purchase the securities.
Investment in State Investment Pool
The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by the California Government Code under the oversight of the Treasurer of the State of California. The fair value of the City's investment in this pool of $8.4 million was reported in the accompanying financial statements at amounts based upon the City's pro-rata share of the fair value provided by LAlF for the entire LAlF portfolio (in relation to the amortized cost of that portfolio).
City of Cudahy
Notes to the Financial Statements
Year ended June 30, 2021
29 NOTE 4 CASH AND INVESTMENTS (CONTINUED)
The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. LAIF’s and the City’s exposure to risk (credit, market or legal) is not currently available.
Fair Value Measurement
In accordance with GASB Statement No. 72, Fair Value Measurement and Application, which became effective for the fiscal year ended June 30, 2021, the City categorizes its fair value measurement within the fair value hierarchy that is based on the valuation inputs used to measure the fair value of the investment. Level 1 inputs are quoted prices in active markets for identical investments; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. Accordingly, the City reports its investments at fair value and recognizes unrealized gain (loss) on investments.
The City’s investments in LAIF were not measured within the fair value hierarchy.
NOTE 5 RECEIVABLES
Notes Receivable
Notes receivable as of June 30, 2021 are as follows:
Governmental Funds – Housing Authority
Pursuant to the provisions of ABX1 26 and Resolution No 12-04, the City assumed all housing assets and housing functions of the former Redevelopment Commission. The housing assets transferred on February 1, 2012 to the Housing Authority included the following notes receivables which represent loans made for assistance in rehabilitating property for affordable housing, plus accrued interest. Because interest is payable at maturity and is not available to finance current operations, interest on notes receivable is not recognized in the financial statements as a current period revenue:
City of Cudahy
Notes to the Financial Statements
Year ended June 30, 2021
30 NOTE 5 RECEIVABLES (CONTINUED)
Balance
June 30, 2021
a) In November 1995 and May 1997, the Successor Agency
(previously Cudahy Community Development Commission)
loaned $220,000 and $60,000, respectively, to Elizabeth West & East L.P. The note is collateralized by a deed of trust on 5225-27 Elizabeth Street. The note bears
compounding interest at 6.55% and all principal and
accrued interest is due in November 2025. $ 1,340,262
b) In June 1998, February 2000, and September 2000, the Successor Agency loaned $150,000, $140,000 and
$210,000, respectively, to 5159 Clara Street LLP for a total loan of $500,000. The note is collateralized by a deed of trust on 5159 Clara Street. The note bears simple interest at 1% and all principal and accrued interest are due in May 2026. 608,233
c) During the year ended June 30, 2000, the Successor Agency agreed to loan $650,000 to Live Oak LLP, of which $590,000 had been advanced through June 30, 2003. The note is
collateralized by a deed of trust on 5203 Live Oak. The note bears interest at 2.5% and all principal and accrued interest are due in August 2029. 994,762
Subtotal – Housing Authority 2,943,257
Governmental Fund – Other Funds
The City granted loans to qualified individual homeowners in connection with the Cal Home and CDBG programs. The
loans are collateralized by deeds of trust in favor of the City.
The notes vary as to terms and conditions. The notes have varying interest rates up to 3% and due dates from 5 years to unspecified. 468,220
Subtotal – Other Funds 468,220
Total $ 3,411,477
City of Cudahy
Notes to the Financial Statements
Year ended June 30, 2021
31 NOTE 6 CAPITAL ASSETS
Capital asset activity for the year ended June 30, 2021 was as follows:
Depreciation expense was charged to functions of the governmental activities as follows:
General government $ 193,226
Community services 568,874
Community development 2,207
$ 764,307
Balance Balance
June 30,
2020 Increases Decreases
June 30,
2021
Capital assets, not being depreciated
Land $ 2,806,643 $ - $ - $ 2,806,643
Construction-in-progress 193,335 1,254,038 (1,340,304) 107,069 2,999,978 1,254,038 (1,340,304) 2,913,712
Capital assets, being depreciated
Structures and improvements 12,958,447 - - 12,958,447
Infrastructure 50,733,072 1,340,304 - 52,073,376
Vehicles 758,925 - (224,607) 534,318
Furniture & equipment 323,214 - - 323,214
Total 64,773,658 1,340,304 (224,607) 65,889,355
Less accumulated depreciation:
Structures and improvements 5,849,762 260,822 - 6,110,584 Infrastructure 42,127,194 447,478 - 42,574,672
Vehicles 565,268 44,376 226,813 382,831
Furniture & equipment 288,321 11,631 - 299,952
Total 48,830,545 764,307 226,813 49,368,039
Net 15,943,113 575,997 (451,420) 16,521,316
Governmental activities
capital assets, net $ 18,943,091 $ 1,830,035 $ (1,791,724) $ 19,435,028
City of Cudahy
Notes to the Financial Statements
Year ended June 30, 2021
32 NOTE 7 LONG-TERM DEBT
Long-term liability activity of the government-wide financial statements for the year ended June 30, 2021 follows:
Pension and OPEB liability are to be liquidated form the City’s General Fund.
NOTE 8 INTERFUND BALANCES AND TRANSFERS
Interfund receivables and payables balances are as follows:
Balance Balance Due Within
June 30,2020 Additions Reductions June 30,2021 One Year Insurance liability $ 404,832 $ 2,287 $ (64,087) $ 343,032 $ 28,502 Compensated absences 98,123 191,058 (180,559.39) 108,622 - OPEB liability 1,752,231 190,211 (282,883) 1,659,559 -
Net pension liability 3,601,385 275,606 (109,592) 3,767,399 - Total $ 6,008,678 $ 659,162 $ (637,121) $ 5,878,612 $ 28,502 Due from
Other Funds
Due to Other
Funds
Major funds:
General Fund $ 191,525 $ 79,077
Measure R 45,609 -
237,134 79,077
Nonmajor funds:
Proposition A 33,457 -
Proposition C - 13,007
CDBG - 6,180
Other Grants - 166,019
Street Lighting 45,620 51,928
Total funds $ 316,211 $ 316,211
City of Cudahy
Notes to the Financial Statements
Year ended June 30, 2021
33 NOTE 8 INTERFUND BALANCES AND TRANSFERS (CONTINUED)
Interfund transfers are as follows:
NOTE 9 COMMITMENTS AND CONTINGENCIES
Risk Management
The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and emissions; and natural disasters for which the City is self-insured and purchases excess insurance coverage from Municipal Insurance Cooperative Joint Powers Authority and the commercial insurance market.
Lawsuits
Legal claims and lawsuits arise from time to time in the normal course of business, which, in the opinion of management, could potentially have a material effect on the City's financial position.
Transfer In Transfer Out
Major fund:
General Fund $ 5,232,944 $ 7,191,161
Measure R 292,374 137, 345
Housing Authority 775,847 -
Nonmajor funds:
Prop 1B Local Street Improvements 64 85,917
Propositon A 516,681 371, 866
Proposition C 402,905 318, 448
Measure M 72,981 -
AQMD 4,988 -
Recycling Conservation Grants 7,715 5,991
County Park Bond 1,541 -
CalHome 25,387 22,224
COPS 142 30,755
Street Lighting 58,270 -
State Gas Tax 4,997,932 4,929,613
Development Impact Fees 3,465 -
Surface Transportation 68,379 -
Other Grants 10,245 50,383
CDBG 1,692,282 1,077,652
Return of funds - (57,213)
Total funds $ 14,164,142 $ 14,164,142
City of Cudahy
Notes to the Financial Statements
Year ended June 30, 2021
34 NOTE 9 COMMITMENTS AND CONTINGENCIES (CONTINUED)
Grant Audit Contingencies
Under the terms of federal and state grants, periodic audits are required and certain costs may be questioned as not being appropriate expenditures. Such audits could lead to reimbursement to the grantor agencies. City management believes disallowances, if any, would be immaterial.
Description of Municipal Insurance Cooperative Joint Powers Authority The City is a member of the Municipal Insurance Cooperative (MIC) Joint Powers Authority. MIC was formed in 2014 to provide insurance coverage and risk management services to public entities and made up of 8 members. MIC is a joint purchase group non-risk sharing JPA that provides members, at their option, the opportunity to purchase excess liability coverage on a group basis. The unique design of MIC allows member agencies to obtain coverage that is more cost effective than they could by on their own while avoiding the risks associated with joint and several liabilities.
Self-Insurance Programs of the Authority
MIC provides comprehensive and cost-effective coverage in terms of limits of liability and insurance coverage. MIC is available to public entities of all sizes, providing an insurance program that will assist them in maximizing valuable resources.
Liability
In the liability program, each member is individually rated based upon current market conditions and loss experience and exposures. Members have the option to purchase any and all of the available insurance program that makes sense for their agency. The City has elected to purchase excess liability coverage through MIC with total limits of $10M with a $50K self-insured retention. Premiums for the coverage are paid annually and are not subject to retrospective adjustments.
Workers' Compensation
In the workers’ compensation program, the City is individually rated based upon current market conditions, exposures and loss experience with the option to secure coverage at a retention level that is appropriate to the City’s appetite for risk. The City of Cudahy has elected to purchase excess workers’ compensation coverage through Arch Insurance Company with statutory limits and a self-insured retention of $1M. In addition, the City has a buffer policy with total limits of $925K and $75K self-insured retention. Premiums for the coverage are paid annually and are not subject to retrospective adjustments.
Property Insurance
The City purchases stand-alone all-risk property coverage for all city owned property excluding earthquake and flood. The City currently has all-risk property insurance protection based upon Total Insurable Values of $26,420,058. The coverage deductibles consist of $10,000 per occurrence for covered perils, $50,000 for vacant buildings, $100,000 for wildfire and $10,000 for service interruption. Premiums for the coverage are paid annually and are not subject to retrospective adjustments.
City of Cudahy
Notes to the Financial Statements
Year ended June 30, 2021
35 NOTE 9 COMMITMENTS AND CONTINGENCIES (CONTINUED)
Crime Insurance
The City purchases government crime insurance coverage in the amount of $5,000,000 with a $25,000 deductible. The fidelity coverage is provided through commercial insurance. Premiums are paid annually and are not subject to retrospective adjustments.
Cyber Liability Insurance
The City purchases cyber liability also known as data security breach coverage consisting of both first party and third-party liability through commercial insurance.
Coverage limits consist of $1,000,000 per occurrence with a $5,000 retention, per claim. Premiums are paid annually and are not subject to retrospective adjustments.
Special Event Tenant User Liability Insurance
The City further protects against liability damages by requiring tenant users of certain property to purchase low-cost tenant user liability insurance for certain activities on agency property. The insurance premium is paid by the tenant user and the insurance is arranged by the City’s insurance broker, Keenan & Associates.
Adequacy of Protection
In the past three years, the City has had no claims for general liability and one claim for workers’ compensation that has exceeded the City’s self-insured retention level.
Claims and Judgments
The City accounts for uninsured, material claims and judgments and associated legal and administrative costs when it is probable that the liability claim has been incurred and the amount of the loss can be reasonably estimated. Included therein are claims incurred but not reported, which consists of (a) known loss events expected to be presented as claims later, (b) unknown loss events that are expected to become claims, and (c) expected future development on claims already reported. This is based upon historical actual results that have established a reliable pattern supplemental by specific information about current matters. Small dollar claims and judgments are recorded as expenditures when paid.
City of Cudahy
Notes to the Financial Statements
Year ended June 30, 2021
36 NOTE 10 DEFINED BENEFIT PENSION PLAN
A. General Information about the Pension Plans
Plan Description
All qualified permanent and probationary employees are eligible to participate in the City’s Miscellaneous Employee Pension Plan. The City’s Miscellaneous Employee Pension Plan is part of the Miscellaneous Risk Pool, a cost-sharing multiple employer defined benefit pension plan administered by the California Public Employees’ Retirement System (CalPERS). Benefit provisions under the Plan are established by State statute and the City’s resolution. CalPERS issues publicly available reports that include a full description of the pension plan regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.
Classic participants (defined as eligible participants prior to January 1, 2013) are required to contribute 8% of their annual covered salary. Second tier participants are required to contribute 7% of their annual covered salary. New or Public Employees’ Pension Reform Act of 2013 (PEPRA) participants (defined as eligible employees brought into CalPERS membership for the first time on or after January 1, 2013) contribute at least half the normal cost rate as determined by CalPERS. The City contributes the remaining amounts necessary to fund the benefits for its employees, using the actuarial basis adopted by the CalPERS Board of Administration.
Benefits Provided
CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to Plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full-time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 10 years of service. The death benefit is one of the following:
the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the California Public Employees’ Retirement Law.
City of Cudahy
Notes to the Financial Statements
Year ended June 30, 2021
37 NOTE 10 DEFINED BENEFIT PENSION PLAN (CONTINUED)
The Plans’ provisions and benefits in effect at June 30, 2021 are summarized as follows:
Contributions
Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on July 1st following notice of a change in the rate.
Funding contributions are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability.
The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees.
For the year ended June 30, 2021, the contributions recognized as part of pension expense for the Plan were as follows:
Miscellaneous
Contributions - employer $ 109,592
Contributions - employee 77,827
City of Cudahy
Notes to the Financial Statements
Year ended June 30, 2021
38 NOTE 10 DEFINED BENEFIT PENSION PLAN (CONTINUED)
B. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
As of June 30, 2021, the City reported net pension liability for its proportionate share of the net pension liability of the Plan as follows:
Effective for measurement period 2015, CalPERS provides GASB Statement No. 68 Accounting Valuation Report for the Miscellaneous Risk Pool and Allocation Methodology to be used by participants in the risk pool. The schedules of employer allocation include allocation for the Total Pension Liability, Plan Fiduciary Net Position and all others pension amounts (e.g. deferred outflows/inflows of resources and pension expense). The Total Pension Liability and other pension amounts are allocated based on the Actuarial Accrued Liability from the most recent Actuarial Valuation Report as of June 30, 2019 used for funding purposes. The Plan Fiduciary Net Position is allocated based on the sum of the Market Value of Assets from the most recent Actuarial Valuation as of June 30, 2019 used for funding purposes plus supplemental payments made by employers during the current measurement period to reduce their unfunded actuarial accrued liabilities.
The City’s allocation bases for pension items are as follows:
Miscellaneous
Total pension liability and deferred outflows/
inflows of resources 0.0006652
Plan fiduciary net position 0.0005998
For the year ended June 30, 2021, the City recognized pension expense of $280,262.
Proportionate
Share of Net
Pension Liability
(Asset)
Miscellaneous $ 3,767,399
City of Cudahy
Notes to the Financial Statements
Year ended June 30, 2021
39 NOTE 10 DEFINED BENEFIT PENSION PLAN (CONTINUED)
At June 30, 2021, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
$109,592 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ending June 30, 2021.
Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:
Year Ending
June 30 Amount
2022 $ (197,777)
2023 (38,344)
2024 17,063
2025 53,678
2026 -
Thereafter -
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Pension contributions subsequent to
measurement date $ 109,592 $ -
Differences between actual and
expected experience 194,145 -
Changes in assumptions - 26,871
Change in employer's proportion - 71,277
Differences between Project and Actual
Investment Earnings 111,917 -
Differences between the employer’s
contribution and the employer's
proportionate share of contributions - 373,295
Total 415,654 $$ 471,442
City of Cudahy
Notes to the Financial Statements
Year ended June 30, 2021
40 NOTE 10 DEFINED BENEFIT PENSION PLAN (CONTINUED)
Actuarial Assumptions
For the measurement period ended June 30, 2020 (the measurement date), the total pension liability was determined by rolling forward the June 30, 2019 total pension liability. The total pension liability in the June 30, 2019 actuarial valuation were determined using the following actuarial assumptions:
Valuation Date June 30, 2019
Measurement Date June 30, 2020
Actuarial Cost Method
Entry-Age Normal Cost
Method
Actuarial Assumptions:
Discount Rate 7.15%
Inflation 2.50%
Payroll Growth 3.00%
Projected Salary Increase (1)
Investment Rate of Return 7.375% (2)
Mortality (3)
Post-Retirement Benefit Increase (4)
(1) Varies by entry age and service
(2) Net of pension plan investment expenses, including inflation (3) Derived using CalPERS' Membership Data for all funds (4) Contract COLA up to 2.75% until Purchasing Power Protection Allowance Floor on Purchasing Power applies, 2.75% thereafter.
The underlying mortality assumptions and all other actuarial assumptions used in the June 30, 2019 valuation were based on actuarial experience study for the period 1997 to 2015, including updates to salary increase and mortality and retirement rates.
The Experience Study report can be obtained at CalPERS’ website under Forms and Publications.
Discount Rate
The discount rate used to measure the total pension liability was 7.15% for the Plan.
To determine whether the municipal bond rate should be used in the calculation of a discount rate, CalPERS stress tested plans that would most likely result in a discount rate that would be different from the actuarially assumed discount rate. Based on the testing of the plans, none of the tested plans ran out of assets. Therefore, the current
7.15% discount rate is appropriate, and the use of the municipal bond rate calculation is not necessary. The discount rate of 7.15% used for the June 30, 2020 measurement date is without reduction of pension plan administrative expenses and will be applied to all plans in the Public Employees Retirement Fund (PERF). The stress test results are presented in a detailed report that can be obtained from the CalPERS website.
City of Cudahy
Notes to the Financial Statements
Year ended June 30, 2021
41 NOTE 10 DEFINED BENEFIT PENSION PLAN (CONTINUED)
The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.
In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows. Using historical returns of all the funds’ asset classes, expected compound returns were calculated over the short-term (first 10 years) and the longterm (11-60 years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equivalent to the single equivalent rate calculated above and rounded down to the nearest one quarter of one percent.
The following table reflects long-term expected real rate of return by asset class. The rate of return was calculated using the capital market assumptions applied to determine the discount rate and asset allocation. These geometric rates of return are net of administrative expenses.
Asset Real Return Real Return
Asset Class Allocation Years 1 - 10(a) Years 11+(b)
Global Equity 50.00% 4.80% 5.98%
Global Fixed Income 28.00% 1.00% 2.62%
Inflation Sensitive - 0.77% 1.81%
Private Equity 8.00% 6.30% 7.23%
Real Estate 13.00% 3.75% 4.93%
Liquidity 1.00% - -0.92%
Total 100%
(a) An expected inflation of 2.00% used for this period. (b) An expected inflation of 2.92% used for this period.
City of Cudahy
Notes to the Financial Statements
Year ended June 30, 2021
42 NOTE 10 DEFINED BENEFIT PENSION PLAN (CONTINUED)
Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate
The following presents the City’s proportionate share of the net pension liability for the Plan, calculated using the discount rate for the Plan, as well as what the City’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher than the current rate:
C. Pension Plan Fiduciary Net Position
Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports.
D. Payable to the Pension Plan
As of June 30, 2021, the City did not have outstanding amount of contributions to the pension plan required for the year ended June 30, 2021.
NOTE 11 OTHER POSTEMPLOYMENT BENEFITS (OPEB)
Plan Description
Integrated medical/prescription drug coverage is provided through CalPERS under the Public Employees' Medical and Hospital Care Act (PEMHCA). Employees may choose from a variety of HMO and PPO options. The City pays 100% of the cost of PEMHCA coverage for active full-time employees, including coverage for spouse and dependent children. The City also pays a 0.36% of premium administrative charge for all active employees. The City offers the same medical plans to its eligible retirees as to its active employees, with the exception that once a retiree becomes eligible for Medicare (that is, reaches age 65), he or she must join a Medicare HMO or a Medicare Supplement plan under PEMHCA.
Certain employees become eligible to retire and receive City-paid healthcare benefits upon attainment of age 50 and 5 years of covered Public Employees' Retirement System (PERS) service, or by qualifying disability retirement status.
Miscellaneous
1% Decrease 6.15%
Net Pension Liability (Asset) $ 5,442,272
Current Discount Rate 7.15%
Net Pension Liability (Asset) $ 3,767,399
1% Increase 8.15%
Net Pension Liability (Asset) $ 2,383,504
City of Cudahy
Notes to the Financial Statements
Year ended June 30, 2021
43 NOTE 11 OTHER POSTEMPLOYMENT BENEFITS (OPEB) (CONTINUED) Benefits Provided
Benefits are paid for the lifetime of the retiree and, if applicable, the surviving spouse of the retiree.
Funding Policy and Contributions
The City's contribution on behalf of all eligible retirees is the same as it is for active employees (100% of the cost of coverage for retiree, spouse and dependent children).
The City has elected the equal contribution method, where the contribution will remain the same annually.
The City opened an irrevocable trust account with Public Agency Retirement Services (PARS). The contribution requirements of the City are established and may be amended by the City Council. The required contribution is based on pay-as-you-go financing requirements plus $100 thousand contribution to the trust. For the fiscal year ended June 30, 2021, the City contributed $231,834 to the plan.
Total OPEB Liability
The City’s total OPEB liability was measured as of June 30, 2021, and the total OPEB liability used to calculate the total OPEB liability was determined by an actuarial valuation as of June 30, 2019.
Employees Covered Benefit Terms
At June 30, 2019 (the valuation date), the following employees were covered by the benefit terms:
Category Count
Active employees 21
Inactive employees or beneficiaries currently receiving benefit payments 12 Inactive employees entitled to but not yet receiving benefit payment 3
City of Cudahy
Notes to the Financial Statements
Year ended June 30, 2021
44 NOTE 11 OTHER POSTEMPLOYMENT BENEFITS (OPEB) (CONTINUED) Actuarial Assumptions
The total OPEB liability for the June 30, 2019 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified:
Inflation 2.75%
Aggregate salary increases of 3.00%.
Individual salary increases based on CalPERS.
Discount rate 6.00% at June 30, 2022
Medicare: 5.0% for 2022, decreasing to an ultimate
rate of 4.0% in 2076
Non-Medicare: 7% for 2022, decreasing to an
ultimate rate of 4.00% in 2076
Dental and vision trend 3.00%
Mortality rates were based on CalPERS 1997-2015 Experience Study Contribution Policy City contributes $100,000 per year in addition to retiree benefit payments which are payable from City assets.
Family Coverage at
Retirement
25% of future retirees cover non-spouse family
members until retiree age 65
Medical trend
Salary increases
The following are the changes in assumptions and benefit terms of the Plan during measurement period ended June 30, 2021.
Discount Rate
The discount rate used to measure the total OPEB liability was 6% at June 30,2021 measurement date. The change in discount rate was a result of the City’s commitment to contribute $100,000 to the Plan in addition to retiree benefit payments which are payable from the City assets.
Actuarial Assumption June 30, 2021 Measurement Date
Changes of Assumption None
Changes of Benefit Terms None
City of Cudahy
Notes to the Financial Statements
Year ended June 30, 2021
45 NOTE 11 OTHER POSTEMPLOYMENT BENEFITS (OPEB) (CONTINUED) Change in the Net OPEB Liability
Sensitivity of the total OPEB liability to changes in the discount rate The following presents the City’s Total OPEB liability if it were calculated using a discount rate that is 1% point lower (5%) or 1% point higher (7%) than the current rate:
Sensitivity of the total OPEB liability to changes in the healthcare cost trend rates The following presents the City’s Total OPEB liability if it were calculated using a healthcare cost trend rate that is 1% point lower or 1% point higher than current rate:
Total OPEB Plan Fiduciary Net OPEB
Liability Net Position Liability
Balance at June 30, 2020 $ 1,961,498 $ 209,267 $ 1,752,231 Changes for the year:
Service cost 71,216 - 71,216
Interest on the total OPEB liability 118,018 - 118,018
Actual vs. expected experience - - -
Changes in assumptions - - -
Contribution - employer - 231,834 (231,834)
Net investment income - 51,049 (51,049)
Benefit payments (131,500) (131,500) -
Administrative expenses - (977) 977
Net Changes 150,406 57,734 (92,672)
Balance at June 30, 2021 $ 2,019,232 $ 359,673 $ 1,659,559 1% Decrease Current Rate 1% Increase
5.00% 6.00% 7.00%
Net OPEB liability $ 1,894,409 $ 1, $ 1, 659,559 462,030 Discount Rate
1% Decrease Current Trend 1% Increase
Total OPEB liability $ 1,480,293 $ 1, $ 1, 659,559 844,895 Healthcare Cost Trend Rate
City of Cudahy
Notes to the Financial Statements
Year ended June 30, 2021
46 NOTE 11 OTHER POSTEMPLOYMENT BENEFITS (OPEB) (CONTINUED) OPEB Expense and Deferred Inflows and Outflows of Resources Related to OPEB
For the year ended June 30, 2021, the City recognized an increase in OPEB expense of $197,977. At June 30, 2021, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:
Deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized as pension expense as follows:
Deferred
Year Ending Outflows/(Inflows)
June 30 of Resources
2022 $ (142,017)
2023 (142,016)
2024 (141,845)
2025 (131,860)
2026 (61,898)
Thereafter (77,393)
Deferred Outflows
of Resources
Deferred Inflows
of Resources
Differences between actual and expected
experience $ - $ 216,275
Changes in assumprions - 450,258
Net difference between projected and
actual earnings on plan investments - 30,496
Employer contributions made subsequent
to the measurement date - -
$- $ 697,029
City of Cudahy
Notes to the Financial Statements
Year ended June 30, 2021
47 NOTE 12 DEFERRED OUTFLOWS/INFLOWS OF RESOURCES
The deferred inflow of resources recognized in the governmental fund financial statements pertains to unavailable revenues which represent receivables that were not received within the availability period.
Refer to Note 10 for deferred outflows and inflows of resources related to pensions and Note 11 for deferred outflows and inflows of resources related to OPEB.
NOTE 13 SUCCESSOR AGENCY DISCLOSURES
The accompanying financial statements also include the Private-purpose Trust Fund for the Successor Agency to the City’s former Redevelopment Agency (Successor Agency). The City, as the Successor Agency, serves in a fiduciary capacity, as custodian for the assets and to wind down the affairs of the former Redevelopment Agency. Its assets are held in trust for the benefit of the taxing entities within the former Redevelopment Agency’s boundaries and as such, are not available for the use of the City.
In 2014, the State Controller’s Office ordered the transfer of assets from Cudahy Economic Development Corporation (CEDC) back to the Successor Agency. In 2015, the Board of Directors of CEDC and the Oversight Board to the Successor Agency approved the asset transfer agreement. The assets were returned to the Successor Agency with the recording of quit claim deeds on October 19, 2015. The accompanying financial statements of the Successor Agency as of and for the year ended June 30, 2021 reflect the transferred assets with a net book value of $15,296,169.
Disclosures related to assets and long-term liabilities of the Successor Agency are as follows:
Rental and Other Accounts Receivable
At June 30, 2021, rental and other accounts receivable consisted of the following:
Governmental
Funds Balance at
June 30, 2021
Deferred inflow of resources
Unavailable revenue - accounts receivable, grant reimbursements and Housing Authority receivables that were not received within the availability period and were not recognized as revenues $ 3,311,058 Rental receivable $ 124,687
Less allowance for bad debts (124,687)
Net $ -
City of Cudahy
Notes to the Financial Statements
Year ended June 30, 2021
48 NOTE 13 SUCCESSOR AGENCY DISCLOSURES (CONTINUED)
Capital Assets and Land Held for Development
At June 30, 2021, land and buildings are composed of the following:
Site Reference Address APN Cost
$ 399,889
1,127,027 *
1,323,297
2,850,213
3,650,074
1,541,620
407,532
6,608,296
3,315,954
1,116,500
Total land and buildings $ 17,588,641
Land and buildings, cost $ 15,452,544
Less: Accumulated depreciation (2,292,472)
Land and buildings, net $ 13,160,072
* Land held for development $ 2,136,097
Santa Ana Street 4610 Santa Ana Street
6224-034-900,
-901, -902, -903
8420 Atlantic Avenue
4819 Patata Street
Patata Industrial
Property
6224-018-912,
-913, -914, -
915
4720 Santa Ana Street
8110 Atlantic Avenue
8100 Atlantic Avenue
Santa Ana Street &
Atlantic Avenue
1,009,070 * 6226-022-906,
-910, 909, -904,
-911
7638 Atlantic Avenue
7644 Atlantic Avenue
7630 Atlantic Avenue
7660 Atlantic Avenue
4613 Clara Street
Atlantic Avenue &
Clara Street
2,904,717
792,961
5256 Elizabeth Street Various
5260 Elizabeth Street
Elizabeth Street
Residential
2,219,090
1,096,864
8201 Atlantic Avenue Various
8221 Atlantic Avenue
4633 Cecilia Street
8135 Atlantic Avenue
4629 Cecilia Street
Atlantic Avenue &
Cecilia Street
City of Cudahy
Notes to the Financial Statements
Year ended June 30, 2021
49 NOTE 13 SUCCESSOR AGENCY DISCLOSURES (CONTINUED)
Long-term Debt
Long-term liability activity of the successor agency for the year ended June 30, 2021 follows:
Note Payable
In 1986-1987, the Agency borrowed a total of $1,000,000 from a financial institution for costs associated with a development project (Parcel A). Payments are due in annual installments equal to the incremental difference between sales tax revenue from Parcel A as of the 1984-1985 tax year and sales tax revenues for each subsequent fiscal year. Sales tax incremental revenue from Parcel A is insufficient to make loan payments. The note is carried at $1,409,928.
Bonds Payable
Taxable Tax Allocation Refunding Bonds, Series 2018 (2018 Bonds) In September 2018, the Successor Agency to the Former Cudahy Community Development Commission issued the Taxable Tax Allocation Refunding Bonds, Series 2018 in the amount of $14,030,000 to (i) to currently refund certain obligations of the Cudahy Community Development Commission (the “Former Agency”) currently outstanding in the aggregate principal amount of $16,460,000, (ii) to purchase a municipal bond insurance policy (the “Policy”) with respect to certain 2018 Bonds; (iii) to purchase a municipal debt service reserve insurance policy for the 2018 Bonds (the “Reserve Policy”), and (iv) to pay certain costs of issuance of the 2018 Bonds.
Accordingly, the old debt was defeased and replaced by the new debt. The difference between the reacquisition price and the net carrying amount of the old debt of $1.8 million was reported as deferred loss on debt refunding and is being amortized as a component of interest expense over the remaining life of the new debt.
Interest on the 2018 Bonds which ranges from 2.8% to 3.8% is payable semiannually on April 1 and October 1 of each year, commencing April 1, 2019, until maturity. The Bonds are payable from the Pledged Tax Revenues deposited in the Redevelopment Property Tax Trust Fund and payable from amounts on deposit therein after payments of certain County of Los Angeles administrative costs and payments to certain taxing agencies.
Balance Balance Due Within
June 30, 2020 Additions Reductions June 30,2021 One Year Note payable $ 1,409,928 $ - $ - $ 1,409,928 $ -
2018 Series Tax Allocation
Refunding Bonds 12,670,000 (1,405,000) 11,265,000 - 1,450,000 County deferral 1,216,654 60,833 - 1,277,487 -
Total $ 16,598,647 60,833 (1,405,000) 13,952,415 1,450,000
City of Cudahy
Notes to the Financial Statements
Year ended June 30, 2021
50 NOTE 13 SUCCESSOR AGENCY DISCLOSURES (CONTINUED)
The 2018 Bonds are insured. In the event of default of the payment of the scheduled principal of or interest on the Insured Bonds when all or some becomes due, the Trustee on behalf of any owner of the Insured Bonds shall have a claim under the Policy for such payments.
The outstanding balance of the 2018 bonds as of June 30, 2021 was $11,265,000.
The following are future scheduled Annual Debt Service Requirements for the Tax Allocation Refunding Bonds, Series 2018:
Pledged Future Revenues
The City pledged future tax revenues associated with bond issuance for Series 2018 Tax Allocation Refunding Bonds. These debt issuance and pledged tax revenues are reported in the Private-Purpose Trust Fund (fiduciary funds). The pledged tax revenues are to be used solely for the repayment of principal and interest on the bonds until they are paid in full through 2027 and are not available for other purposes during the duration that the bonds are outstanding. The total principal and interest remaining is approximately $12,788,817. Management expects that pledged tax revenues will be sufficient to make future principal and interest payments on the bonds.
County Deferrals
The City, Agency and County entered into agreements whereby the County will defer tax increment generated within the project area to meet the Agency's debt service obligations. The outstanding balance accrues interest of five percent (5%) compounded annually and shall be repaid with the property tax revenues received by the Agency in excess of its debt service payment requirements. The County Deferral is recorded as tax revenue when earned and debt in the fiduciary funds.
Year ending
June 30 Principal Interest Total
2022 $ 1,450,000 381,305 1,831,305
2023 1,490,000 332,324 1,822,324
2024 1,540,000 280,438 1,820,438
2025 1,590,000 225,147 1,815,147
2026 1,640,000 165,939 1,805,939
2027-2028 3,555,000 138,663 3,693,663
Total $ 11,265,000 $ 1,523,817 $ 12,788,817
City of Cudahy
Notes to the Financial Statements
Year ended June 30, 2021
51 NOTE 14 GOVERNMENTAL ACCOUNTING STANDARDS BOARD (GASB) STATEMENTS
ISSUED, NOT YET EFFECTIVE
The Governmental Accounting Standards Board (GASB) has issued several pronouncements, that have effective dates that may impact future financial presentations. Management has not yet determined any impact the implementation of the following statements may have on the financial statements of the City.
GASB No. 87
In June 2017, the Governmental Accounting Standards Board issued Statement No. 87 “Leases”. The requirements of this Statement are effective for reporting periods beginning after December 15, 2020.
GASB No. 89
In June 2018, the Governmental Accounting Standards Board issued Statement No. 89 “Accounting for Interest Cost Incurred before the End of a Construction Period”.
The requirements of this Statement are effective for reporting periods beginning after December 15, 2020.
GASB No. 90
In August 2018, the Governmental Accounting Standards Board issued Statement No. 90 “Majority Equity Interests-an amendment of GASB Statements No. 14 and No. 61”.
The requirements of this Statement are effective for reporting periods beginning after December 15, 2020.
GASB No. 91
In May 2019, the Governmental Accounting Standards Board issued Statement No. 91, “Conduit Debt Obligations.” The requirements of this Statement are effective for reporting periods beginning after December 15, 2020.
GASB No. 92
In January 2020, the Governmental Accounting Standards Board issued Statement No. 92, “Omnibus 2020.” The requirements of this Statement are effective for reporting periods beginning after June 15, 2021.
GASB No. 93
In March 2020, the Governmental Accounting Standards Board issued Statement No. 93, “Replacement of Interbank Offered Rates.” The requirements of this Statement are effective for reporting periods beginning after June 15, 2021.
GASB No. 94
In May 2020, the Governmental Accounting Standards Board issued Statement No. 94, “Public-Private and Public-Public Partnerships and Availability Payment Arrangements.” The requirements of this Statement are effective for reporting periods beginning after June 15, 2022.
City of Cudahy
Notes to the Financial Statements
Year ended June 30, 2021
52 NOTE 14 GOVERNMENTAL ACCOUNTING STANDARDS BOARD (GASB) STATEMENTS
ISSUED, NOT YET EFFECTIVE (CONTINUED)
GASB No. 96
In May 2020, the Governmental Accounting Standards Board issued Statement No. 96, “Subscription-Based Information Technology Arrangements.” The requirements of this Statement are effective for reporting periods beginning after June 15, 2022.
GASB No. 97
In June 2020, the Governmental Accounting Standards Board issued Statement No. 97, “Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plan – an amendment of GASB Statements No. 14, 84, and a suppression of GASB Statement No. 32.” The requirements of this Statement are effective for reporting periods beginning after June 15, 2021.
NOTE 15 IMPACT OF CORONAVIRUS ON THE CITY’S OPERATIONS
In January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of an outbreak of a new strain of coronavirus (“COVID-19 outbreak”) and the risks that are posed to the international community as the virus spread globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic based on the rapid increase in exposure globally.
The City’s operations are primarily dependent on the ability to collect property taxes and sales taxes. The COVID-19 outbreak may have a continued adverse impact on economic and market conditions, triggering a period of global economic slowdown.
This situation is expected to depress the tax bases and other areas in which the City receives revenue during the fiscal year 2021. The COVID-19 outbreak could also have other potential impacts, including disruptions or restrictions on employees’ ability to work. As such, this may hinder the ability of the City to meet the needs of its constituents The City cannot estimate the length or gravity of the impact of the COVID19 outbreak at this time; however, if the pandemic continues, it may have an effect on the City’s results of future operations and financial position in the fiscal year 2021.
NOTE 16 SUBSEQUENT EVENTS
The City has evaluated events subsequent to June 30, 2021 to assess the need for potential recognition or disclosure in the financial statements. Such events were evaluated through July 7, 2022 the date the financial statements were available to be issued. Based upon this evaluation, it was determined that, no subsequent events occurred that require recognition or additional disclosure in the financial statements.
City of Cudahy
General Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual Year ended June 30, 2021
53 Variance with
Final BudgetFinal Actual Positive
Budget Amounts (Negative)
Revenues
Taxes $ 3,196,820 $ 4,546,182 $ 1,349,362
Licenses and permits 2,244,250 2,918,129 673,879
Intergovernmental 3,210,998 2,997,676 (213,322)
Charges for services 284,000 217,038 (66,962)
Fines, forfeitures and penalties 94,000 164,381 70,381
Use of money and property 132,500 8,739 ( 123,761)
Other revenue 575,300 891,892 316,592
Total revenues 9,737,868 11,744,037 2,006,169
Expenditures
Current:
General government 4,080,158 3,947,285 132,873
Public safety 4,035,838 4,034,015 1,823
Community services 523,697 460,367 63,330
Community development 1,222,803 1,695,743 (472,940)
Total expenditures 9,862,496 10,137,410 (274,914)
Excess (deficiency) of revenues
over expenditures (124,628) 1,606,627 1,731,255
Other financing sources (uses)
Transfers in - 5,232,944 5,232,944
Transfers out (7, - 191,161) (7,191,161)
Net other financing sources (uses) - (1,958,217) (1,958,217) Change in fund balance (124,628) (351,590) (226,962)
Fund balance, beginning of year 2,365,218 2,365,218 -
Fund balance, end of year $ 2,240,590 $ 2,013,628 $ (226,962)
City of Cudahy
Measure R
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual Year ended June 30, 2021
54 Variance with
Final BudgetFinal Actual Positive
Budget Amounts (Negative)
Revenues
Taxes $ $ 37,501 - $ 37,501
Intergovernmental 304,126 271,209 32,917
Use of money and property 7,627 1,000 6,627
Total revenues 349,254 272,209 77,045
Expenditures
Current:
Community development 50,713 48,741 (1,972)
Capital outlay 301,151 531,014 229,863
Total expenditures 351,864 579,755 227,891
Excess (deficiency) of revenues
over expenditures (2,610) (307,546) 304,936
Other financing sources (uses)
Transfers in 292,374 - 292,374
Transfers out (137,345) - (137,345)
Net other financing sources (uses) 155,029 - 155,029
Change in fund balance 152,419 (307,546) 459,965
Fund balance, beginning of year 1,620,954 1,620,954 -
Fund balance (deficit), end of year $ $ 1,773,373 1,313,408 $ 459,965
City of Cudahy
Housing Authority
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual Year ended June 30, 2021
55 Variance with
Final BudgetFinal Actual Positive
Budget Amounts (Negative)
Revenues
Other revenue $ $ 7,771 $ 7,771
Total revenues 7,771 - 7,771
Expenditures
Current:
Community development - 35,410 (35,410)
Total expenditures 35,410 - (35,410)
Excess (deficiency) of revenues
over expenditures - (27,639) (27,639)
Other financing sources
Transfer in 775,847 (775,847)
Other financing sources 775,847 - (775,847)
Change in fund balance 748,208 - 748,208
Fund balance, beginning of year 1,034,737 1,034,737 -
Fund balance (deficit), end of year $ 1,034,737 $ 1,782,945 $ 748,208
City of Cudahy
Schedule of Proportionate Share of the Net Pension Liability Last 10 Years*
56 Notes to Schedule
1 Covered-Employee Payroll represented above is based on pensionable earnings provided by the employer. However, GASB Statement No. 68 defines covered-employee payroll as the total payroll of employees that are provided pensions through the pension plan. 2 The Plan’s proportionate share of aggregate employer contributions may not match the actual contributions made by the employer during the measurement period. The Plan’s proportionate share of aggregate employer contributions is based on the Plan’s proportion of fiduciary net position shown on line 5 of the table above as well as any additional side fund (or unfunded liability) contributions made by the City during the measurement period. * - Fiscal year 2014 was the 1st year of implementation, therefore only seven years are shown.
Measurement
Date
Measurement
Date
Measurement
Date
Measurement
Date
Measurement
Date
June 30, 2020 June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 Classic Second Tier PEPRA Classic Second Tier PEPRA
Proportion of the net pension liability (asset) 0.08932% 0.08993% 0.09081% 0.08980% 0.09058% 0.07024% 0.00051% 0.00017% 0.03347% 0.0001% 0.0000%Proportionate Share of the net pension liability (asset) $ 3,767, $ 3,601,385 399 $ 3,422,376 $ 3,539,977 $ 3,146,658 $ 2,626,208 $ 534 $ (757) $ 2,082,443 $ 4,983 $ 140 Covered payroll (1) $ 1,502,899 $ 1,368,001 $ 1,325,975 $ 1,179,459 $ 1,174,291 $ 463,703 $ 452,647 $ 257,941 $ 628,845 $ 320,891 $ 88,443 Proportionate Share of the net pension liability (asset) as percentage of covered payroll 251% 263% 258% 300% 268% 566% 0% 0% 331.15% 1.55% 0.16% Plan's Proportionate Share of the Fiduciary Net Position as 70.07% 67.61% 70.91% 69.21% 68.73% 72.59% 99.23% 103.32% 79.87% 83.03% 83.05% a Percentage of the Plan's Total Pension LiabilityPlan's Proportionate Share of Aggregate Employer Contributions (2) $ 394,006 $ 357,579 $ 317,703 $ 301,113 $ 257,534 $ 127,356 $ 41,418 $ 18,506 $ 223,430 $ 659 $ 19 Miscellaneous
Plan
June 30, 2015 June 30, 2014
Measurement Date Measurement Date
Miscellaneous Miscellaneous Plan Miscellaneous Plan
Plan
Miscellaneous
Plan
Miscellaneous
Plan
Miscellaneous
Plan
City of Cudahy
Schedule of Pension Contributions
Last 10 years*
57 * - Fiscal year 2015 was the 1st year of implementation, therefore only seven years are shown.
June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018 June 30, 2017 Classic PEPRA Classic PEPRA
(actuarially determined) $ 109,592 $ 112,357 $ 103,577 $ 101,829 $ 91,846 $ 73,439 $ 14,443 $ 118,139 $ 12,145 Contributions in relation to the actuarially determined contributions (109,592) (112,357) (103,577) (101,829) (91,846) (73,439) (14,443) (118,139) (12,145) Contribution deficiency (excess) $ - $ - $ - $ - $ - $ - $ - $ - $ - Covered payroll $ 1,270,525 $ 1,502,899 $ 1,368,001 $ 1,325,975 $ 1,179,459 $ 916,350 $ 257,941 $ 949,736 $ 88,443 Contributions as a percentage of covered payroll 8.63% 7.48% 7.57% 7.68% 7.79% 8.01% 5.60% 12.44% 13.73% Notes to ScheduleValuation dateMethods and assumptions used to determine contribution rates:
Actuarial Cost Method Entry-Age Normal Cost MethodAmortization method Level percentage of payroll, closedRemaining amortization period 15 years as of valuation dateAsset valuation method 5-year smoothed marketInflationSalary increases Varies by entry age and ageInvestment rate of return 7.15%, net of pension plan investment expense; includes inflation
Retirement age 57 yrs.Mortality Rate Table Derived using CalPERS' membership data for all funds June 30, 20192.50%
Miscellaneous Plan Miscellaneous Plan
June 30, 2016 June 30, 2015
Miscellaneous
Plan
Contractually required contribution
Miscellaneous
Plan
Miscellaneous
Plan
Miscellaneous
Plan
Miscellaneous
Plan
City of Cudahy
Schedule of Changes in Net OPEB Liability and Related Ratios Last 10 years*
58 Fiscal Year Ending Fiscal Year Ending Fiscal Year Ending Fiscal Year Ending June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018 Total Pension Liability
Service cost $ 71,216 $ 83,187 $ 118,228 $ 121,259
Interest on total OPEB liability 118,018 133,413 106,800 98,653 Changes in assumptions - (58,153) (609,512) (101,442)
Actual vs. expected experience - (277,197) - -
Changes in benefit terms - - - 441
Benefit payments, including refunds of employee contributions (131,500) (120,236) (113,023) (110,633) Net change in total OPEB liability 57,734 (238,986) (497,507) 8,278 Total OPEB liability - beginning of year 1,961,498 2,200,484 2,697,991 2,689,713 Total OPEB liability - end of year (a) $ 2,019,232 $ 1,961,498 $ 2,200,484 $ 2,697,991 Plan Fiduciary Net Position
Net investment income $ $ 51,049 $ 8,394 $ 1,149 -
Contributions - employer 231,834 220,541 213,280 -
Benefit payments, including refunds of employee contributions (131,500) (120,236) (113,023) - Administrative expenses (977) (581) (257) -
Net change in plan fiduciary net position 150,406 108,118 101,149 - Plan fiduciary net position - beginning of year 209,267 101,149 - - Plan fiduciary net position - end of year (b) $ $ 359,673 $ 209,267 $ 101,149 - Net OPEB liability - end of year (a)-(b) $ 1,659,559 $ 1,752,231 $ 2,099,335 $ 2,697,991 Plan fiduciary net position as a percentage of the total pension liability 17.81% 10.67% 4.60% 0.00% Covered - employee payroll $ 1,502,899 $ 1,502,899 $ 1,368,001 $ 720,987 Total net OPEB liability as percentage of covered-employee payroll 110.42% 116.59% 153.46% 374.21% * Fiscal year 2018 was the first year of implementation, therefore only four years are shown.
City of Cudahy
Schedule of OPEB Contributions
Last 10 years**
59 In 2021, the City committed to contributing $100,000 to the Plan annually. Below table shows the City’s contribution to the Plan based on actuarially determined contribution:
June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018 Actuarially determined contribution * $ 203,407 $ 197,212 $ 113,023 $ 110,633 Contributions in relation to the actuarially
determined contributions (231,834) ( (21 220,541) ( 3,280) 110,633) Contribution deficiency (excess) $ (28,427) $ (23,329) $ ( $ - 100,257) Covered payroll $ 1,270,525 $ 1,502,899 $ 1,368,001 $ 720,897 Contributions as a percentage of
covered payroll 18.25% 14.67% 15.59% 15.34%
* Calculated based on annual required benefit payments. **Fiscal year 2018 was the first year of implementation, therefore only four years are shown.
City of Cudahy
Description of Nonmajor Special Revenue Funds
June 30, 2021
60 SPECIAL REVENUE FUNDS
Special Revenue Funds are used to account for the proceeds of specific revenue sources that are legally restricted to be expended for specific purposes.
Prop 1B Local Street
Improvements
Prop 1B came from bond proceeds issued to fund
maintenance and improvement of local streets and roads.
Proposition A To account for revenues and expenditures for projects from a voter-approved sales tax override for public
transportation purposes.
Proposition C To account for financial transactions in accordance with Proposition C of the Local Transit Assistance Act.
Measure M To account for revenues and expenditures for Measure M Local Return money from LACMTA that are restricted for
specific use.
Air Quality Improvement
(AQMD)
To account for the additional vehicle registration fees received from Southern California Air Quality Management District in accordance with AB 2766, as authorized by the California Clean Air Act of 1988.
Used Oil Grant To increase public awareness of the benefits of recycling oil.
Recycling Conservation Grants To account for revenue and expenditure pertaining to recycling grants.
COPS To account for financial transactions in accordance with grant requirements from the California Office of Criminal Justice.
County Park Bond To account for projects and grants funded by the County Park Bond Act.
TDA – Transportation
Development
To account for funds received from the Transportation
Development Authority for transport projects.
Street Lighting To account for revenues and costs associated with the City’s street lighting program.
City of Cudahy
Description of Nonmajor Special Revenue Funds (Continued) June 30, 2021
61 SPECIAL REVENUE FUNDS (CONTINUED)
Cal Home To account for transactions funded by the Cal Home program.
Development Impact Fees To account for monies received from developers restricted to finance the acquisition and develop new parkland space. These monies are restricted under the Quimby Act by ordinance and require the dedication of land or impose a requirement of the payment of fee in lieu.
Surface Transportation
Program Local (STPL)
To account for Federal, state, and local Surface Transportation Program funds received from Los Angeles County Metropolitan Transportation Authority for transportation related projects.
Other Grants To account for State Grants relating to future development in the City including transportation related projects.
State Gas Tax This fund accounts for gas tax revenue received from the State of California to cover costs of street maintenance and
improvements.
Community Development
Block Grant (CDBG)
Accounts for expenses of the Community Development Block Grant received through the County of Los Angeles.
62 Prop 1B
Local Street
Improvements Proposition A Proposition C
Cash and investments $ 64 $ 696,206 $ 173,955
Accounts receivable - - -
Grants receivable - - -
Notes receivable - - -
Other receivables - 60,335 50,047
Interest receivable - 359 67
Due from other funds - 33,457 -
Total assets $6 $ 790,357 4 $ 224,069
Accounts payable $ $ 14,535 - $ 10,475
Due to other funds - - 13,007
Due to other governments - - -
Total liabilities - 14,535 23,482
Unavailable revenue - - -
Restricted:
Special revenue funds 64 775,823 200,587
- - -
64 775,823 200,587
$6 $ 790,357 4 $ 224,069
Special Revenue
Total liabilities and fund balances
ASSETS
LIABILITIES
FUND BALANCES (DEFICIT):
Unassigned
Total fund balances (deficit)
DEFERRED INFLOWS OF RESOURCES
City of Cudahy
Nonmajor Governmental Funds
Combining Balance Sheet
June 30, 2021
63 Recycling
Used Oil Conservation County Park
Measure M AQMD Grant Grants COPS Bond
$ 1,211,474 $ 113,276 $ - $ 23,497 $ 189,323 $ 29,355
- - - - - -
- - - - - -
- - - - - -
42,367 - - - - -
645 65 - 13 150 17
- - - - - -
$ 1,254,486 $ 113,341 $ $ 23,510 - $ 189,473 29,372
$ 4,629 $ - $ - $ $ 20,000 - $ -
- - - - - -
- - - - - -
4,629 - - - 20,000 -
- - - - - -
1,249,857 113,341 - 23,510 169,473 29,372
- - - - - -
1,249,857 113,341 - 23,510 169,473 29,372
$ 1,254,486 $ 113,341 $ $ 23,510 - $ 189,473 $ 29,372
Special Revenue
64 TDA -
Transportation Street
Development Lighting Cal Home
Cash and investments $ - $ - $ 115,669
Accounts receivable - - -
Grants receivable - - -
Notes receivable - - 222,094
Other receivables - - -
Interest receivable - - -
Due from other funds - 45,620 -
Total assets $- $ 45,620 $ 337,763
Accounts payable $ $ 1,711 $ - -
Due to other funds - 51,928 -
Due to other governments - - 221,726
Total liabilities - 53,639 221,726
Unavailable revenue - - -
Restricted:
Special revenue funds - - 116,037
(8,019) - -
(8,019) - 116,037
$- $ 45,620 $ 337,763
Special Revenue
ASSETS
LIABILITIES
FUND BALANCES (DEFICIT):
Unassigned
Total fund balances (deficit)
Total liabilities and fund balances
DEFERRED INFLOWS OF RESOURCES
City of Cudahy
Nonmajor Governmental Funds
Combining Balance Sheet (Continued)
June 30, 2021
65 Total
Development Surface Nonmajor
Impact Transportation Other State Governmental
Fees Program Local Grants Gas Tax CDBG Funds
$ 70,107 $ 849,938 $ - $ 1,002,778 $ 356,092 $ 4,831,734 - - 174,450 44,285 218,735
- - - - 285,219 285,219
- - - - 246,126 468,220
- - - - - 152,749
488 - 42 - 24,970 26,816
- - - - - 79,077
$ 70,149 $ 850,426 $ 174,450 $ 1,047,063 $ 912,407 $ 6,062,550 $- $ 5,313 $ 9,347 $ 14,207 $ - $ 80,216
- - 166,019 - 6,180 237,134
- - - - 271,395 493,121
- 5,313 175,366 14,207 277,575 810,471
- - 88,028 - - 88,028
70,149 845,113 - 1,032,856 634,832 5,261,014
- - (88,944) - (96,963)
70,149 845,113 (88,944) 1,032,856 634,832 5,164,051
$ 70,149 $ 850,426 $ 174,450 $ 1,047,063 $ 912,407 $ 6,062,550 Special Revenue
66 Prop 1B
Local Street
Improvements Proposition A Proposition C
Revenues:
Taxes $ - $ - $ -
Intergovernmental - 566,370 454,986
Use of money and property 49 3,196 1,456
Other revenue - - -
Total revenues 49 569,566 456,442
Expenditures:
Current:
General government - - -
Public safety - - -
Community development - - -
Community services - 573,010 252,503
Capital outlay - - 593,434
Total expenditures - 573,010 845,937
Excess (deficiency) of revenues
over expenditures 49 (3,444) (389,495)
Other financing sources (uses):
Transfers in 64 516,681 402,905
Transfers out (85,917) (371,866) (318,448)
Net other financing sources (uses) (85,853) 144,815 84,457 Change in fund balance (85,804) 141,371 (305,038)
Fund balances, beginning of year 85,868 634,452 505,625 Fund balances, end of year $6 $ 775,823 4 $ 200,587
Special Revenue
City of Cudahy
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Year Ended June 30, 2021
67 Recycling
Used Oil Conservation County Park
Measure M AQMD Grant Grants COPS Bond
$ 386,953 $ - $ - $ - $ - $ -
- 31,132 - 156,727 - -
4,940 473 - 105 1,059 136
- - - - - -
391,893 31,605 - 157,786 105 136
- - - - - -
- - - - 114,022 -
8,469 15,345 - - - -
107,856 - - - - -
- - - - - -
116,325 15,345 - - 114,022 -
275,568 16,260 - 105 43,764 136
72,981 4,988 - 7,715 142 1,541
- - - (5,991) (30,755) -
72,981 4,988 - 1,724 (30,613) 1,541
348,549 21,248 - 1,829 13,151 1,677
901,308 92,093 - 21,681 156,322 27,695
$ 1,249,857 $ 113,341 $ - $ 23,510 $ 169,473 $ 29,372
Special Revenue
68 TDA -
Transportation Street
Development Lighting Cal Home
Revenues:
Taxes $ - $ 80,645 $ -
Intergovernmental - - -
Use of money and property - - 5,526
Other revenue - - -
- 80,645 5,526
Expenditures:
Current:
General government - - -
Public safety - - -
Community development - - -
Community services - 146,934 -
Capital outlay - - -
- 146,934 -
- (66,289) 5,526
Other financing sources (uses):
Transfers in - 58,270 25,387
Transfers out - - (22,224)
- 58,270 3,163
- (8,019) 8,689
Fund balances, beginning of year - - 107,348
Fund balances, end of year $- $ $ 116,037 (8,019)
Total expenditures
Excess (deficiency) of revenues
over expenditures
Net other financing sources (uses)
Change in fund balance
Special Revenue
Total revenues
City of Cudahy
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures and Changes in Fund Balances (Continued)
Year Ended June 30, 2021
69 Total
Development Surface Nonmajor
Impact Transportation Other State Governmental
Fees Program Local Grants Gas Tax CDBG Funds
$- $ - $ - $ - $ $ 467,598 -
- - 285,018 940,027 348,882 2,783,142
3,927 325 - 603 - 21,795
- - - 68,619 - 68,619
325 3,927 285,018 1,009,249 348,882 3,341,154
- - - - 20,629 20,629
- - - - - 114,022
- - 222,858 - 328,251 574,923
- - - 1,001,043 - 2,081,346
14,175 - - - - 607,609
- 14,175 222,858 1,001,043 348,880 3,398,529
325 (10,248) 62,160 8,206 2 (57,375)
3,465 68,379 10,245 4,997,932 1,692,282 7,862,977
- - (50,383) (4,929,613) (1,077,652) (6,892,849)
3,465 68,379 (40,138) 68,319 614,630 970,128
3,790 58,131 22,022 76,525 614,632 912,753
66,359 786,982 (110,966) 956,331 20,200 4,251,298
$ 70,149 $ 845,113 $ (88,944) $ 1,032,856 $ 634,832 $ 5,164,051 Special Revenue
City of Cudahy
Nonmajor Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget & Actual Prop 1B Local Street Improvements Fund
Year ended June 30, 2021
70 Variance with
Final BudgetFinal Actual Positive
Budget Amounts (Negative)
Revenues
Use of money and property $ $ 750 $ 49 (701)
750 49 (701)
750 49 (701)
Other financing sources (uses)
Transfers in 64 - 64
Transfers out (85,917) - (85,917)
Net other financing sources (uses) (85,853) - (85,853)
Change in fund balance 750 (85,804) (86,554)
Fund balance, beginning of year 85,868 85,868 -
Fund balance, end of year $ $ 64 86,618 $ (86,554)
Excess (deficiency) of revenues
Total revenues
over expenditures
City of Cudahy
Nonmajor Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget & Actual Proposition A Fund
Year ended June 30, 2021
71 Variance with
Final BudgetFinal Actual Positive
Budget Amounts (Negative)
Revenues
Intergovernmental $ $ 566,370 455,938 $ 110,432
Use of money and property 3,196 1,000 2,196
Total revenues 569,566 456,938 112,628
Expenditures
Current:
Community services 573,010 599,654 26,644
Capital outlay - 250,000 250,000
Total expenditures 573,010 849,654 276,644
Excess (deficiency) of revenues
over expenditures (3,444) (392,716) 389,272
Other financing sources (uses)
Transfer in 516,681 - 516,681
Transfer out (371,866) - (371,866)
Net other financing sources (uses) 144,815 - 144,815
Change in fund balance 141,371 (392,716) 534,087
Fund balance, beginning of year 634,452 634,452 -
Fund balance, end of year $ $ 775,823 241,736 $ 534,087
City of Cudahy
Nonmajor Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget & Actual Proposition C Fund
Year ended June 30, 2021
72 Variance with
Final BudgetFinal Actual Positive
Budget Amounts (Negative)
Revenues
Intergovernmental $ $ 454,986 460,498 $ (5,512)
Use of money and property 1,456 350 1,106
456,442 460,848 (4,406)
Expenditures
Current:
Community services 252,503 338,168 85,665
Capital outlay 593,434 570,000 (23,434)
845,937 908,168 62,231
(389,495) (447,320) 57,825
Other financing sources (uses)
Transfers in - 402,905 402,905
Transfers out - (318,448) (318,448)
Net other financing sources (uses) - 84,457 84,457
Change in fund balance (305,038) (447,320) 142,282
Fund balance, beginning of year 505,625 505,625 -
Fund balance, end of year $ $ 200,587 58,305 $ 142,282
Total revenues
Total expenditures
Excess (deficiency) of revenues
over expenditures
City of Cudahy
Nonmajor Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget & Actual Measure M Fund
Year ended June 30, 2021
73 Variance with
Final BudgetFinal Actual Positive
Budget Amounts (Negative)
Revenues
Taxes $ - $ $ 386,953 386,953
Use of money and property 4,940 4,940
- 391, 391,893 893
Expenditures
Current:
Community development 120,000 8,469 111,531
Community services 100,000 107,856 (7,856)
220,000 116,325 103,675
(220,000) 275,568 495,568
Other financing sources (uses)
Transfers in - 72,981 72,981
Net other financing sources (uses) - 72,981 72,981
Change in fund balance (220,000) 348,549 568,549
Fund balance, beginning of year 901,308 901,308 -
Fund balance, end of year $ 681,308 $ 1, 249,857 $ 568,549 Total revenues
Total expenditures
Excess (deficiency) of revenues
over expenditures
City of Cudahy
Nonmajor Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget & Actual Air Quality Improvement (AQMD) Fund
Year ended June 30, 2021
74 Variance with
Final BudgetFinal Actual Positive
Budget Amounts (Negative)
Revenues
Intergovernmental $ $ 31,132 28,000 $ 3,132
Use of money and property 100 473 373
28,100 31,605 3,505
Expenditures
Current:
Community development 15,345 25,900 10,555
15,345 25,900 10,555
16,260 2,200 14,060
Other financing sources (uses)
Transfers in 4,988 - 4,988
Net other financing sources (uses) 4,988 - 4,988
Change in fund balance 21,248 2,200 19,048
Fund balance, beginning of year 92,093 92,093 -
Fund balance (deficit), end of year $ $ 113,341 94,293 $ 19,048 Total revenues
Total expenditures
Excess (deficiency) of revenues
over expenditures
City of Cudahy
Nonmajor Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget & Actual Used Oil Grant Fund
Year ended June 30, 2021
75 Variance with
Final BudgetFinal Actual Positive
Budget Amounts (Negative)
Expenditures
Current:
Community development $ 4,000 $ - $ 4,000
- 4,000 4,000
Change in fund balance - (4,000) 4,000
Fund balance, beginning of year - - -
Fund balance (deficit), end of year $ (4,000) $ - $ 4,000 Total expenditures
City of Cudahy
Nonmajor Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget & Actual Recycling Conservation Grants Fund
Year ended June 30, 2021
76 Variance with
Final BudgetFinal Actual Positive
Budget Amounts (Negative)
Revenues
Use of money and property $ - $ 105 $ 105
105 - 105
105 - 105
Other financing sources (uses)
Transfers in - 7,715 7,715
Transfers out - (5,991) (5,991)
Net other financing sources (uses) 1,724 - 1,724
Change in fund balance 1,829 - 1,829
Fund balance, beginning of year 21,681 21,681 -
Fund balance, end of year $ 21,681 $ 23,510 $ 1,829
Total revenues
Excess (deficiency) of revenues
over expenditures
City of Cudahy
Nonmajor Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget & Actual Community Oriented Policing Services (COPS) Grant Fund
Year ended June 30, 2021
77 Variance with
Final BudgetFinal Actual Positive
Budget Amounts (Negative)
Revenues
Intergovernmental $ 100,000 $ 156,727 $ 56,727
Use of money and property 1,059 1,059
Total revenues 157,786 100,000 57,786
Expenditures
Current:
Public safety 200,000 114,022 85,978
Total expenditures 200,000 114,022 85,978
Excess (deficiency) of revenues
over expenditures (100,000) 43,764 143,764
Other financing sources (uses)
Transfers in - 142 142
Transfers out - (30,755) (30,755)
Net other financing sources (uses) - (30,613) (30,613)
Change in fund balance (100,000) 13,151 113,151
Fund balance, beginning of year 156,322 156,322 -
Fund balance (deficit), end of year $ $ 169,473 56,322 $ 113,151
City of Cudahy
Nonmajor Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget & Actual County Park Bond Fund
Year ended June 30, 2021
78 Variance with
Final BudgetFinal Actual Positive
Budget Amounts (Negative)
Revenues
Use of money and property $ - $ 136 $ 136
Total revenues 136 - 136
Excess (deficiency) of revenues
over expenditures - 136 136
Other financing sources (uses)
Transfers in - 1,541 1,541
Net other financing sources (uses) 1,541 - 1,541
Change in fund balance 1,677 - 1,677
Fund balance, beginning of year 27,695 27,695 -
Fund balance (deficit), end of year $ 27,695 $ 29,372 $ 1,677
City of Cudahy
Nonmajor Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget & Actual TDA – Transportation Development Fund
Year ended June 30, 2021
79 Variance with
Final BudgetFinal Actual Positive
Budget Amounts (Negative)
Revenues
Intergovernmental $ 66,278 $ - $ (66,278)
Total revenues 66,278 - (66,278)
Expenditures
Capital outlays $ 66,278 $ - $ 66,278
Total expenditures 66,278 - 66,278
Excess (deficiency) of revenues
over expenditures - - -
Change in fund balance - - -
Fund balance, beginning of year - - -
Fund balance (deficit), end of year $- $ - $ -
City of Cudahy
Nonmajor Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget & Actual Street Lighting Fund
Year ended June 30, 2021
80 Variance with
Final BudgetFinal Actual Positive
Budget Amounts (Negative)
Revenues
Taxes $ 73,280 $ 80,645 $ 7,365
Use of money and property 80 - (80)
Total revenues 73,360 80,645 7,285
Expenditures
Current:
Community services 80,856 146,934 (66,078)
Total expenditures 80,856 146,934 (66,078)
Excess (deficiency) of revenues
over expenditures (7,496) (66,289) (58,793)
Other financing sources (uses)
Transfers in - 58,270 58,270
Net other financing sources (uses) - 58,270 58,270
Change in fund balance (7,496) (8,019) (523)
Fund balance, beginning of year - - -
Fund balance (deficit), end of year $ $ (8,019) (7,496) $ (523)
City of Cudahy
Nonmajor Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget & Actual Cal Home Fund
Year ended June 30, 2021
81 Variance with
Final BudgetFinal Actual Positive
Budget Amounts (Negative)
Revenues
Use of money and property $ $ 5,526 $ 5,526
Total revenues 5,526 - 5,526
Excess (deficiency) of revenues
over expenditures - 5,526 5,526
Other financing sources (uses)
Transfers in - 25,387 25,387
Transfers out - (22,224) (22,224)
Net other financing sources (uses) 3,163 - 3,163
Change in fund balance 8,689 - 8,689
Fund balance, beginning of year 107,348 107,348 -
Fund balance, end of year $ 107,348 $ 116,037 $ 8,689
City of Cudahy
Nonmajor Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget & Actual Development Impact Fees
Year ended June 30, 2021
82 Variance with
Final BudgetFinal Actual Positive
Budget Amounts (Negative)
Revenues
Taxes $ 60,000 $ - $ (60,000)
Use of money and property 325 325
Total Revenues 60,000 325 (59,675)
Excess (deficiency) of revenues
over expenditures 60,000 325 (59,675)
Other financing sources (uses)
Transfers in - 3,465 3,465
Net other financing sources (uses) - 3,465 3,465
Change in fund balance 60,000 3,790 (56,210)
Fund balance, beginning of year 66,359 66,359 -
Fund balance (deficit), end of year $ 126,359 $ 70,149 $ (56,210)
City of Cudahy
Nonmajor Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget & Actual Surface Transportation Program Local (STPL) Fund
Year ended June 30, 2021
83 Variance with
Final BudgetFinal Actual Positive
Budget Amounts (Negative)
Revenues
Taxes $ 70,000 $ - $ (70,000)
Use of money and property - 3,927 3,927
Total revenues 3,927 70,000 (66,073)
Expenditures
Capital outlay 357,629 14,175 343,454
Total Expenditures 357,629 14,175 343,454
Excess (deficiency) of revenues
over expenditures (287,629) (10,248) 277,381
Other financing sources (uses)
Transfers in - 68,379 68,379
Net other financing sources (uses) - 68,379 68,379
Change in fund balance (287,629) 58,131 345,760
Fund balance, beginning of year 786,982 786,982 -
Fund balance, end of year $ 499,353 $ 845,113 $ 345,760
City of Cudahy
Nonmajor Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget & Actual Other Grants Fund
Year ended June 30, 2021
84 Variance with
Final BudgetFinal Actual Positive
Budget Amounts (Negative)
Intergovernmental $ 1,742,892 $ 285,018 $ (1,457,874)
Total revenues 285,018 1,742,892 (1,457,874)
Expenditures
Current:
Community development 222,858 1,372,892 1,150,034
Capital outlay - 410,000 410,000
Total expenditures 222,858 1,782,892 1,560,034
Excess (deficiency) of revenues
over expenditures 62,160 (40,000) 102,160
Other financing sources (uses)
Transfer in - 10,245 10,245
Transfer out (50,383) - (50,383)
Net other financing sources (uses) (40,138) - (40,138)
Change in fund balance 22,022 (40,000) 62,022
Fund deficit, beginning of year (110,966) (110,966) -
Fund balance (deficit), end of year $ (150,966) $ (88,944) $ 62,022 Revenues
City of Cudahy
Nonmajor Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget & Actual State Gas Tax
Year ended June 30, 2021
85 Variance with
Final BudgetFinal Actual Positive
Budget Amounts (Negative)
Revenues
Intergovernmental $ 1,388,158 $ 940,027 $ (448,131)
Use of money and property 603 2,000 (1,397)
Total revenues 1,009,249 1,390,158 (380,909)
Expenditures
Current:
Community services 1,001,043 577,037 (424,006)
Total expenditures 1,001,043 577,037 (424,006)
Excess (deficiency) of revenues
over expenditures 8,206 813,121 (804,915)
Other financing sources (uses)
Transfer in - 4,997,932 4,997,932
Transfer out (4,929,613) (404,137) (4,525,476)
Net other financing sources (uses) 68,319 (404,137) 472,456 Change in fund balance 76,525 408,984 (332,459)
Fund balance, beginning of year 956,331 956,331 -
Fund balance (deficit), end of year $ 1,365,315 $ 1,032,856 $ (332,459)
City of Cudahy
Nonmajor Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget & Actual Community Development Block Grant Fund (CDBG)
Year ended June 30, 2021
86 Variance with
Final BudgetFinal Actual Positive
Budget Amounts (Negative)
Revenues
Intergovernmental $ 376,786 $ 348,882 $ (27,904)
Total revenues 376,786 348,882 (27,904)
Expenditures
Current:
General government 20,629 - (20,629)
Community development 367,335 328,251 39,084
Total expenditures 367,335 348,880 18,455
Excess (deficiency) of revenues
over expenditures 2 9,451 (9,449)
Other financing sources (uses)
Transfer in - 1,692,282 1,692,282
Transfer out (1, - (1,077,652) 077,652)
Net other financing sources (uses) - 614,630 614,630
Change in fund balance 9,451 605,181 614,632
Fund balance, beginning of year 20,200 20,200 -
Fund balance (deficit), end of year $ 29,651 $ 634,832 $ 605,181
The Auditor’s Communication with Those Charged with Governance Pursuant to Statement on Auditing Standards 114
City of Cudahy, California
Year Ended June 30, 2021
Attachment B
July 7, 2022
The Honorable Mayor and the Members of the City Council City of Cudahy, California
5220 Santa Ana Street
Cudahy, CA 90201
Dear Ladies and Gentlemen:
We are pleased to present this report related to our audit of the financial statements of the City of Cudahy (the City) as of and for the year ended June 30, 2021. This report summarizes certain matters required by professional standards to be communicated to you in your oversight responsibility for the City’s financial reporting process.
This report is intended solely for the information and use of the City Council and management and is not intended to be, and should not be, used by anyone other than these specified parties. It will be our pleasure to respond to any questions you have about this report. We appreciate the opportunity to continue to be of service to the City.
Very truly yours,
VASQUEZ & COMPANY, LLP
Cristy A. Canieda
Partner
TABLE OF CONTENTS
PAGE
Required Communications 1
Summary of Accounting Estimates 3
Summary of Recorded Audit Adjustments 4
Exhibit
Exhibit A – Significant Written Communications Between Management and Our Firm 5 • Management Representation Letter 6
• Letter of Communications to Management 12
1 REQUIRED COMMUNICATIONS
Generally accepted auditing standards (AU-C 260, The Auditor’s Communication With Those Charged With Governance) require the auditor to promote effective two-way communication between the auditor and those charged with governance. Consistent with this requirement, the following summarizes our responsibilities regarding the financial statement audit as well as observations arising from our audit that are significant and relevant to your responsibility to oversee the financial reporting process.
Our Responsibilities with regards to the Financial Statement Audit Our responsibilities under auditing standards generally accepted in the United States of America have been described to you in our arrangement letter dated October 29, 2021. Our audit of the financial statements does not relieve management or those charged with governance of their responsibilities, which are also described in that letter.
Overview of the Planned Scope and Timing of the Financial Statement Audit We have issued a separate communication dated October 29, 2021 regarding the planned scope and timing of our audit and have discussed with you our identification of, and planned audit response, to significant risks of material misstatement.
Accounting Policies and Practices
Adoption of, or Change in, Accounting Policies
Management has the ultimate responsibility for the appropriateness of the accounting policies used by the City. The significant accounting policies used by the City are described in Note 2 to the financial statements. The City did not adopt any significant new accounting policies, nor have there been any changes in existing significant accounting policies during the current period.
Significant or Unusual Transactions
We did not identify any significant or unusual transactions or significant accounting policies in controversial or emerging areas for which there is lack of authoritative guidance or consensus.
Audit Adjustments and Uncorrected Misstatement
Management agreed to record adjustments that Vasquez proposed during the audit. Those adjustments mostly pertain to prior year audit adjustments and adjustments to correct beginning fund balances and net position.
We are not aware of any uncorrected misstatements other than misstatements that are clearly trivial.
2 Observations About the Audit Process
Disagreements with Management
We encountered no disagreements with management over the application of significant accounting principles, the basis for management’s judgments on any significant matters, the scope of the audit, or significant disclosures to be included in the financial statements.
Consultations with Other Accountants
We are not aware of any consultations management had with other accountants about accounting or auditing matters.
Significant Difficulties Encountered in Performing the Audit We did not encounter any significant difficulties in dealing with management during the audit.
Significant Written Communications Between Management and Our Firm The most significant written communications between our firm and management were the Management Representation Letter and the Letter of Comments to Management attached as Exhibit A.
3 SUMMARY ACCOUNTING ESTIMATES
Accounting estimates are an integral part of the preparation of financial statements and are based upon management’s current judgment. The process used by management encompasses their knowledge and experience about past and current events, and certain assumptions about future events. The following describes the significant accounting estimates reflected in the City’s June 30, 2021 financial statements. • The estimated useful lives of the City’s capital assets were based on management’s best estimate and prevailing practices in the local government sector. • Net pension/ other post-employment benefits (OPEB) liabilities were actuarially calculated based on certain assumptions disclosed in Notes 7 and 10 to the financial statements. • The City’s net pension liability is measured as the total pension liability, less the pension plan’s fiduciary net position. The net pension liability of the PERS Plans is measured as of June 30, 2020, using an annual actuarial valuation as of June 30, 2019 rolled forward to June 30, 2020 using standard update procedures.
• The City’s total OPEB liability was measured as of June 30, 2021 and the OPEB liability used to calculate the total OPEB liability was determined by an actuarial valuation as of June 30, 2021. • Claims liabilities are estimated when a loss has occurred, and the amount of the loss can be reasonably estimated. Liabilities also include an amount for claims that have been incurred, but not reported as of the end of the year.
• Estimated fair values for investments are obtained from quoted market prices where available. • Collectability of accounts receivables and provision for uncollectible accounts are based on management’s estimates and historical experience.
4 SUMMARY OF RECORDED AUDIT ADJUSTMENTS
5 EXHIBIT A
Significant Written Communications Between
Management and Our Firm
5220 Santa Ana Street
Cudahy, CA, 90201
Phone: (323) 773-5143
Fax: (323) 771-2072
www.cityofcudahy.com
Mayor
Elizabeth Alcantar
Vice Mayor
Jose R. Gonzalez
Councilmember
Jack M. Guerrero
Councilmember
Blanca Lozoya
Councilmember
Daisy Lomeli
City Manager
Alfonso Noyola, ICMA-CM
Incorporated November 10, 1960
July 7, 2022
Vasquez & Company LLP
655 N. Central Ave., Suite 1550
Glendale, CA 91203
This representation letter is provided in connection with your audits of the financial statements of City of Cudahy (the City), which comprise the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information as of June 30, 2021, and the respective changes in financial position, and the related notes to the financial statements, for the purpose of expressing an opinion as to whether the financial statements are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States (U.S. GAAP).
We confirm, to the best of our knowledge and belief, as of July 7, 2022, the following representations made to you during your audit.
Financial Statements
1. We have fulfilled our responsibilities, as set out in the terms of the audit engagement letter dated October 29, 2021, for the preparation and fair presentation of the financial statements referred to above are fairly presented in accordance with U.S. GAAP.
2. We acknowledge our responsibility for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
3. We acknowledge our responsibility for the design, implementation, and maintenance of internal control to prevent and detect fraud.
4. Significant assumptions we used in making accounting estimates, including those measured at fair value, are reasonable and reflect our judgment based on our knowledge and experience about past and current events, and our assumptions about conditions we expect to exist and courses of action we expect to take.
5. Related party relationships and transactions have been appropriately accounted for and disclosed in accordance with the requirements of U.S. GAAP.
6. The effects of all known actual or possible litigation, claims, and assessments have been accounted for and disclosed in accordance with U.S. GAAP.
7. Management has followed applicable laws and regulations in adopting, approving, and amending budgets.
8. We have no direct or indirect legal or moral obligation for any debt of any organization, public or private, or to special assessment bond holders, that is not disclosed in the financial statements.
Exhibit A - Management Representation Letter 6
9. We have complied with all aspects of contractual agreements that would have a material effect on the financial statements in the event of noncompliance.
Information Provided
10. We have provided you with:
a. Access to all information, of which we are aware, that is relevant to the preparation and fair presentation of the financial statements, such as records, documentation, and other matters and all audit or relevant monitoring reports, if any, received from funding sources. b. Additional information that you have requested from us for the purpose of the audit. c. Unrestricted access to persons within the entity from whom you determined it necessary to obtain audit evidence.
d. Minutes of the meetings of the City Council or summaries of actions of recent meetings for which minutes have not yet been prepared.
11. All transactions have been recorded in the accounting records and are reflected in the financial statements.
12. We have disclosed to you the results of our assessment of risk that the financial statements may be materially misstated as a result of fraud.
13. It is our responsibility to establish and maintain internal control over financial reporting. One of the components of an entity’s system of internal control is risk assessment. We hereby represent that our risk assessment process includes identification and assessment of risks of material misstatement due to fraud.
We have shared with you our fraud risk assessment, including a description of the risks, our assessment of the magnitude and likelihood of misstatements arising from those risks, and the controls that we have designed and implemented in response to those risks.
14. We have no knowledge of any fraud or suspected fraud that affects the City’s financial statements involving:
a. Management,
b. Employees who have significant roles in internal control, or c. Others where the fraud could have a material effect on the financial statements.
15. We have no knowledge of any allegations of fraud or suspected fraud affecting the City’s financial statements received in communications from employees, former employees, grantors, regulators, or others.
16. We have no knowledge of noncompliance or suspected noncompliance with laws and regulations whose effects should be considered when preparing financial statements.
17. We have disclosed to you all known actual or possible litigation and claims whose effects should be considered when preparing the financial statements.
18. We have disclosed to you the identity of the City’s related parties and all the related party relationships and transactions of which we are aware.
Exhibit A - Management Representation Letter 7
19. We are aware of no significant deficiencies, including material weaknesses, in the design or operation of internal controls that could adversely affect the City’s ability to record, process, summarize and report financial data.
20. We are aware of no communications from regulatory agencies concerning noncompliance with, or deficiencies in, financial reporting practices.
21. We believe that the actuarial assumptions and methods used by the actuary for funding purposes and for determining accumulated Plan benefits are appropriate in the circumstances. We did not give instructions, or cause any instructions to be given, to the specialists with respect to the values or amounts derived in an attempt to bias their work, and we are not otherwise aware of any matters that have had an impact on the independence or objectivity of the City’s actuary.
22. As part of your audit, you prepared the draft financial statements and related notes. We have designated an individual with suitable skill, knowledge, or experience to oversee your services and have assumed all management responsibilities. We have reviewed, approved and accepted responsibility for those financial statements and related notes.
23. During the course of your audits, you may have accumulated records containing data that should be reflected in our books and records. All such data have been so reflected. Accordingly, copies of such records in your possession are no longer needed by us.
Government—specific
24. We have made available to you all financial records and related data and all audit or relevant monitoring reports, if any, received from funding sources.
25. There have been no communications from regulatory agencies concerning noncompliance with, or deficiencies in, financial reporting practices.
26. We have identified to you any previous audits, attestation engagements, and other studies related to the audit objectives and whether related recommendations have been implemented.
27. The City has no plans or intentions that may materially affect the carrying value or classification of assets, liabilities, or equity.
Exhibit A - Management Representation Letter 8
28. We are responsible for compliance with the laws, regulations, and provisions of contracts and grant agreements applicable to us, including tax or debt limits and debt contracts; and we have identified and disclosed to you all laws, regulations and provisions of contracts and grant agreements that we believe have a direct and material effect on the determination of financial statement amounts or other financial data significant to the audit objectives, including legal and contractual provisions for reporting specific activities in separate funds.
29. There are no violations or possible violations of budget ordinances, laws and regulations (including those pertaining to adopting, approving, and amending budgets), provisions of contracts and grant agreements, tax or debt limits, and any related debt covenants whose effects should be considered for disclosure in the financial statements, or as a basis for recording a loss contingency, or for reporting on noncompliance.
30. As part of your audit, you assisted with the preparation of the financial statements and related notes. We have designated an individual with suitable skill, knowledge, or experience to oversee your services and have assumed all management responsibilities. We have reviewed, approved, and accepted responsibility for those financial statements and related notes.
31. The City has satisfactory title to all owned assets, and there are no liens or encumbrances on such assets nor has any asset been pledged as collateral.
32. The City has complied with all aspects of contractual agreements that would have a material effect on the financial statements in the event of noncompliance.
33. We have followed all applicable laws and regulations in adopting, approving, and amending budgets.
34. The financial statements include all component units as well as joint ventures with an equity interest, and properly disclose all other joint ventures and other related organizations.
35. The financial statements properly classify all funds and activities.
36. All funds that meet the quantitative criteria in GASBS Nos. 34 and 37 for presentation as major are identified and presented as such and all other funds that are presented as major are particularly important to financial statement users.
37. The financial statements properly classify all funds and activities in accordance with GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, as amended.
38. The City is following either its established accounting policy regarding which resources are considered to be spent first for expenditures for which more than one resource classification is available or is following paragraph 18 of GASB Statement No. 54 to determine the fund balance classifications for financial reporting purposes.
39. The financial statements include all fiduciary activities required by GASB Statement No. 84, Fiduciary Activities, as amended.
40. Components of net position (net investment in capital assets; restricted; and unrestricted) and equity amounts are properly classified and, if applicable, approved.
41. The City has properly separated information in debt disclosures related to direct borrowings and direct placements of debt from other debt and disclosed any unused lines of credit, collateral pledged to secure debt, terms in the debt agreements related to significant default or termination events with financeExhibit A - Management Representation Letter 9
related consequences and significant subjective acceleration clauses in accordance with GASB Statement No. 88.
42. The City’s policy regarding whether to first apply restricted or unrestricted resources when an expense is incurred for purposes for which both restricted and unrestricted net position is available and appropriately disclosed and that net position is properly recognized under the policy.
43. The City is not aware of any tax abatement agreementthat needs to be disclosed based on the requirement of GASB Statement No. 77,
44. Investments are properly valued.
45. Provisions for uncollectible receivables have been properly identified and recorded.
46. Expenses have been appropriately classified in or allocated to functions and programs in the statement of activities, and allocations have been made on a reasonable basis.
47. Revenues are appropriately classified in the statement of activities within program revenues, general revenues, contributions to term or permanent endowments, or contributions to permanent fund principal.
48. Interfund, internal, and intra-entity activity and balances have been appropriately classified and reported.
49. Deposits and investment securities and derivative instruments are properly classified as to risk and are properly disclosed.
50. Capital assets, including infrastructure and intangible assets, are properly capitalized, reported, and, if applicable, depreciated.
51. We have appropriately disclosed the City’s policy regarding whether to first apply restricted or unrestricted resources when an expense is incurred for purposes for which both restricted and unrestricted net position is available and have determined that net position is properly recognized under the policy.
Supplementary Information
52. With respect to supplementary information presented in relation to the financial statements as a whole:
a. We acknowledge our responsibility for the presentation of such information. b. We believe such information, including its form and content, is fairly presented in accordance with U.S. GAAP.
c. The methods of measurement or presentation have not changed from those used in the prior period.
Exhibit A - Management Representation Letter 10 Page 144 of 160 d. When supplementary information is not presented with the audited financial statements, we will make the audited financial statements readily available to the intended users of the supplementary information no later than the date of issuance of the supplementary information and the auditor’s report thereon.
53. With respect to the Required Supplementary Information presented as required by the Governmental Accounting Standards Board to supplement the basic financial statements:
a. We acknowledge our responsibility for the presentation of such required supplementary information. b. We believe such required supplementary information is measured and presented in accordance with guidelines prescribed by U.S. GAAP.
c. The methods of measurement or presentation have not changed from those used in the prior period.
City of Cudahy
Alfonso Noyola
City Manager
Joshua Calhoun
Finance Director
AlfonsoNoyola
Joshua Calhoun
Exhibit A - Management Representation Letter 11 Page 145 of 160 City of Cudahy
Letter of Comments to Management
Year Ended June 30, 2021
Exhibit A - Letter of Comments to Management 12 Page 146 of 160 City of Cudahy
Letter of Comments to Management
Year Ended June 30, 2021
Exhibit A - Letter of Comments to Management 13 Page 147 of 160 To the City Manager and Members of the City Council
City of Cudahy
Cudahy, California
In planning and performing our audit of the financial statements of the City of Cudahy, California (City) as of and for the year ended June 30, 2021, 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, we considered the City’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A deficiency in design exists when (a) a control necessary to meet the control objective is missing, or (b) an existing control is not properly designed so that, even if the control operates as designed, the control objective would not be met. A deficiency in operation exists when a properly designed control does not operate as designed or when the person performing the control does not possess the necessary authority or competence to perform the control effectively.
A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Following are descriptions of other identified deficiencies in internal control that we determined did not constitute significant deficiencies or material weaknesses:
Exhibit A - Letter of Comments to Management 14 Page 148 of 160
1. Update the Finance Department Policies and Procedures Manual and Develop written policies and procedures for federal awards administration in accordance with the Uniform Guidance
Comments:
We noted the following:
• The City has a written policies and procedures manual dated December 2014. Some of the policies and procedures are no longer being followed or have been superseded. The capital assets’ useful lives in the manual should be updated as well based on the current practice of the City.
• 2 CFR 200.303 requires nonfederal entities to maintain effective internal controls over federal awards. The focus of these policies and procedures should be to ensure that those in the organization who carry out the objectives of the award understand:
o The federal statutes, regulations, and terms and conditions of the award o How to evaluate and properly monitor compliance
o The steps to take if noncompliance is identified
Under 2 CFR 200.303, the Uniform Guidance also recommends these internal controls follow guidance in Standards for Internal Control in the Federal Government (the Green Book), issued by the Comptroller General of the United States, or the Internal Control—Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission.
The Uniform Guidance requires non-federal entities specifically to develop written procedures related to the following areas:
1. Cash Management
2 CFR 200.302(b)(6) states that the financial management system of each non-Federal entity must provide for the written procedures to implement the requirements of 2 CFR 200.305 Payment.
2. Allowability of Costs
2 CFR 200.302(b)(7) states that the financial management system of each non-Federal entity must provide for the written procedures for determining the allowability of costs in accordance with Subpart E-Cost Principles of this part and the terms and conditions of the Federal award.
3. Conflict of Interest
2 CFR 200.318(c)(1) states that the non-Federal entity must maintain written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. No employee, officer, or agent may participate in the selection, award, or administration of a contract supported by a Federal award if he or she has a real or apparent conflict of interest. Such a conflict of interest would arise when the employee, officer, or agent, any member of his or her immediate Exhibit A - Letter of Comments to Management 15 Page 149 of 160 family, his or her partner, or an organization which employs or is about to employ any of the parties indicated herein, has a financial or other interest in or a tangible personal benefit from a firm considered for a contract. The officers, employees, and agents of the nonFederal entity may neither solicit nor accept gratuities, favors, or anything of monetary value from contractors or parties to subcontracts. However, non-Federal entities may set standards for situations in which the financial interest is not substantial or the gift is an unsolicited item of nominal value. The standards of conduct must provide for disciplinary actions to be applied for violations of such standards by officers, employees, or agents of the non-Federal entity.
In addition, the entities should ensure that existing written procedures are in compliance with:
1. Equipment Management Requirements
2 CFR 200.313(b) states that “A state must use, manage and dispose of equipment acquired under a Federal award by the state in accordance with state laws and procedures”.
2. General Procurement Standards
2 CFR 200.317 to 200.326 discusses that contracts must be established and managed in accordance with the procurement requirements in 2 CFR Part 200. Grantees must have written procurement policies and procedures that demonstrate a fair and reliable process, with standards of conduct addressing conflicts of interest, for obtaining grant-funded goods and services.
Recommendation:
We recommend that the City update the Policies and Procedures Manual to incorporate the changes in order to be consistent with current practices.
During the year, the City was not required to undergo a single audit. However, the City receives federal grants and is subject to the requirements of the Uniform Guidance if it spends over $750 thousand in federal awards. Consequently, we received the City’s Grant Administration Policies and Procedures dated June 2022 during the wrap-up of the audit. This policies and procedures must delineate and address the requirements of the Uniform Guidance.
The considerable update and improvement of the City’s policies and procedures manual will provide the following benefits:
• Objectives, responsibilities, and authority would be clearly defined for all employees. • The task of conforming with the policies of various departments would be simplified if all the City’s updated policies and procedures are presented to the management in formal manuals. • Training of new employees would be facilitated by the existence of written operational guidelines and policies.
Exhibit A - Letter of Comments to Management 16 Page 150 of 160 Management Response:
The City agrees with the finding. The City has updated its Grant Administration Policies and Procedures and were adopted in June 2022 to comply with the Uniform Guidance. During the next fiscal year the City will be updating its general accounting written policies and procedures to align with the implementation of the new financial reporting system. Further, the City will be reviewing all policies and procedures on an annual basis to ensure that they are reflective of current practiced procedures.
2. Year-End Closing Process
Comments:
During the audit, the City provided various journal entries after the trial balance was provided to the auditors. Substantially, the journal entries were to record prior year audit adjustments and correct the beginning fund balances and net position of the City. The beginning fund and net position balances should have been reconciled with the prior year audited financial statements and these adjustments should have been made before the audit commenced. It is to be noted, however, that the City has taken its best effort to reconcile properly and accurately the account balances including beginning fund balances. Due to turnover in Finance Department during the fiscal year 2021, and lack of institutional knowledge, the City has to obtain additional information to reconcile the trial balance and beginning fund balances with the prior year audited financial statements.
Recommendation:
We recommend that the City establish and document proper reconciliation and review processes to record audit adjustments and reconcile account balances with the audited financial statements. before providing the trial balance to the auditors.
Management Response:
The City agrees with the finding. There was substantial turnover in the Finance Department during the fiscal year and into the subsequent fiscal year. Going forward the Finance Department will reconcile beginning fund balance as part of the year-end closing process to the audited financial statements before providing trial balance to the auditors. *****
This communication is intended solely for the information and use of the management and members of the City Council of the City of Cudahy and others within the entity and is not intended to be and should not be used by anyone other than these specified parties.
Glendale, California
July 7, 2022
Exhibit A - Letter of Comments to Management 17 Page 151 of 160 www.vasquez.cpa
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City of Cudahy
Independent Accountant's Report on Agreed-upon Procedures Applied to Appropriations Limit Worksheet No. 6
Year Ended June 30, 2021
Attachment C
City of Cudahy
Independent Accountant's Report on Agreed-upon Procedures Applied to Appropriations Limit Worksheet No. 6
Year Ended June 30, 2021
City of Cudahy
Appropriations Limit Worksheet No. 6
Table of Contents
PAGE
INDEPENDENT ACCOUNTANT'S REPORT ON AGREED-UPON
PROCEDURES 1
Appropriations Limit Worksheet No. 6 3
Notes to Appropriations Limit Worksheet No. 6 4
1 Independent Accountant's Report on
Agreed-upon Procedures Applied to
Appropriations Limit Worksheet No. 6
Honorable Mayor and Members of City Council
City of Cudahy
We have performed the procedures enumerated below to the accompanying Appropriations Limit Worksheet No. 6 of the City of Cudahy, California for the year ended June 30, 2021. The City of Cudahy's management is responsible for the accuracy of the Appropriations Limit Worksheet No. 6.
These procedures, which were agreed to and acknowledged by the City of Cudahy, California and the League of California Cities (as presented in the League publication entitled Agreed-upon procedures Applied to the Appropriations Limitation Prescribed by Article XIII B of the California Constitution) were appropriate to meet the requirements of Section 1.5 of Article XIII B of the California Constitution.
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 were as follows:
1. We obtained the completed Worksheet No. 6 for the year ended June 30, 2021 and compared the limit and annual adjustment factors included in that worksheet to the limit and annual adjustment factors that were adopted by resolution of the City Council. We also compared the population and inflation options included in the aforementioned worksheet to those that were selected by a recorded vote of the City Council.
Finding: No exceptions were noted as a result of this procedure.
2. For the accompanying Appropriations Limit Worksheet No. 6, we added last year's limit to the total adjustments, and compared the resulting amount to this year's limit.
Finding: No exceptions were noted as a result of this procedure.
3. We compared the current year information presented in the accompanying Appropriations Limit worksheet No. 6 to the other worksheets described in No. 1 above.
Finding: No exceptions were noted as a result of this procedure.
2 4. We compared the prior year appropriations limit presented in the accompanying Appropriations Limit Worksheet No. 6 to the prior year appropriations limit adopted by the City Council for the prior year.
Finding: No exceptions were noted as a result of this procedure.
We were engaged by the City of Cudahy, California to perform this agreed-upon procedures engagement and conducted our engagement in accordance with attestation standards established by the American Institute of Certified Public Accountants (AICPA).
We were not engaged to and did not conduct an examination or review engagement, the objective of which would be the expression of an opinion or conclusion, respectively, on the Appropriations Limit Worksheet No. 6. 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 of Cudahy, California 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.
Glendale, California
July 7, 2022
City of Cudahy
Appropriations Limit Worksheet No. 6
Year ended June 30, 2021
Unaudited; see Independent Accountant’s Report on Agreed-Upon Procedures applied to Appropriations Limit Worksheet No. 6 and Accompanying Notes. 3 $ 31,986,612
Inflation Population
Factor Factor Combined
(Note 3) (Note 4) Factor
1.0373 0.998900 1.0362 0.0362
1,156,603
Other adjustments -
Total adjustments 1,156,603
Appropriations limit for fiscal year ended June 30, 2021 $ 33,143,215 Appropriations limit for fiscal year ended June 30, 2020 Adjustments factors for the fiscal year ended June 30, 2021 Adjustment for inflation and population
City of Cudahy
Notes to Appropriations Limit Worksheet No. 6
Year ended June 30, 2021
4 NOTE 1 PURPOSE OF LIMITED PROCEDURES REVIEW
Under Article XIII B 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 XIII B, the annual calculation of the appropriations limit is subject to an agreed-upon procedures review in connection with the annual audit.
NOTE 2 METHOD OF CALCULATION
Under Section 10.5 of Article XIII B, of the California Constitution for fiscal years beginning on or after July 1, 1990, the appropriations limit is required to be calculated based on the limit for the fiscal year 1986-87, adjusted for the inflation and population factors discussed in Notes 3 and 4 below.
NOTE 3 INFLATION FACTORS
A California governmental agency may adjust its appropriations limit by either the annual percentage change in the 4th quarter per capita personal income (which percentages are 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 of Cudahy for the fiscal year 2020-2021 represents the annual percentage change in the State's per capita personal income.
NOTE 4 POPULATION FACTORS
A California governmental agency may adjust its appropriations limit by either the annual percentage change of the jurisdiction's own population, or the annual percentage change in population in the County where the jurisdiction is located. The factor adopted by the City of Cudahy for fiscal year 2020-2021 represents the annual percentage change in population for the County.
NOTE 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. The City of Cudahy had no such adjustments for the year ended June 30, 2021.
www.vasquez.cpa
Vasquez & Company LLP has over 50 years of experience in performing audit, accounting & consulting services for all types of nonprofit organizations, for-profit companies, governmental entities and publicly traded companies. Vasquez is a member of the RSM US Alliance. RSM US Alliance provides its members with access to resources of RSM US LLP. RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each are separate and independent from RSM US LLP. RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms. Members of RSM US Alliance have access to RSM International resources through RSM US LLP but are not member firms of RSM International. Visit rsmus.com/about us for more information regarding RSM US LLP and RSM International. The RSM™ logo is used under license by RSM US LLP. RSM US Alliance products and services are proprietary to RSM US LLP.
655 N Central Avenue, Suite 1550 • Glendale, California 91203-1437 • Ph. (213) 873-1700 • Fax (213) 873-1777