Agenda packet — Cypress City Council, January 10, 2022 (part 1 of 2)

AMENDED AGENDA

REGULAR MEETING

CYPRESS CITY COUNCIL
January 10, 2022
7:00 P.M.
www.cypressca.org Council Chambers
5275 Orange Avenue
Cypress, California

AGENDA AMENDMENTS
Removal of Notice regarding teleconference participation by Mayor Pro Tem Hertz-Mallari; Mayor Pro Tem Hertz-Mallari will participate in person
Agenda Item No. 19 - updated attachment titled Ordinance to correct typographical error Agenda Item No. 19 - added attachments titled Municipal Code Section 17-72 and Municipal Code Section 17-72 with Proposed Changes

PUBLIC PARTICIPATION
Consistent with current COVID-19 safety guidelines, members of the public can participate in this meeting as follows:

1. Attend In-Person. Limited first-come, first-served seating is available. All in-person attendees are required to wear a face covering regardless of vaccination status, adhere to social distancing and seating restrictions, and must be free of any symptoms associated with COVID-19.

2. Attend Virtually via Webinar. This option provides the ability to provide live public comments during Oral Communications or Public Hearings and view slideshow presentations. Please register at https://attendee.gotowebinar.com/register/6122665004293924109 to receive an email containing a link to join the webinar. Advance registration is recommended.

3. Watch the Meeting. The City Council meeting can be viewed live on Spectrum Cable Channel 36 or on the City's website at www.cypressca.org/watchlive.

4. Listen to the Meeting. The public may participate via the listen-only teleconference mode by calling (213) 929-4212 and entering Access Code 167-641-153 when prompted. No registration or audio pin is necessary.

5. Submit Public Comments Prior to the Meeting. The public may submit comments via email to [email protected]. Comments submitted by 3:00 p.m. on January 10, 2022 will be added to the City Council agenda as a Consent Calendar item.

CALL TO ORDER
7:00 P.M.

Council Chambers

ROLL CALL
Cypress City Council, also acting as the Ex-Officio Governing Board of Directors of the Cypress Recreation and Park District
Mayor Paulo Morales
Mayor Pro Tem Anne Hertz-Mallari
Council Member Frances Marquez
Council Member Scott Minikus
Council Member Jon Peat

PLEDGE OF ALLEGIANCE
INVOCATION Neighborhood Church
The City Council does not endorse the content of the invocation and does not endorse the invocational speaker’s particular faith, belief and/or religious denomination. The City Council has an established neutral policy for selecting and scheduling invocational speakers. The City Council’s policy on invocations is available from the City Clerk.

PRESENTATIONS
Introduction of New City Employees
ORAL COMMUNICATIONS (Limited to 30 minutes – three minutes per speaker, unless extended by the City Council)
The public may address the City Council on any matters prior to any action taken on the agenda. Although Council Members may provide brief responses, the City Council may not discuss or take action on items that are not on its agenda.

If you would like to address the City Council in person, please complete a Speaker's Card. If you would like to address the City Council via the meeting webinar, please click the 'hand raise' button, unmute your microphone and wait for the Mayor or City Clerk to call on you. = Hand Raise = Unmute
Speakers providing comments in person will be called first. Speakers are requested to limit their comments to no more than three minutes.

Alternatively, comments may be submitted to [email protected] prior to 3:00 p.m. on January 10, 2021. All comments submitted via email prior to the deadline will be added to the agenda as a Consent Calendar item.

January 10, 2022 | Page 2

CONSENT CALENDAR
All matters listed on the Consent Calendar are to be approved with one motion unless a Council Member requests separate action on a specific item.

1. Receive and File Public Comments Submitted for the January 10, 2022 City Council Meeting
Prepared by: Alisha Farnell, City Clerk
Recommendation: Receive and file submitted public comments.

2. Introduce and/or Adopt All Ordinances and Resolutions Presented for Consideration by Title Only and to Waive Further Reading

3. Approve Minutes - Meeting of December 13, 2021
Prepared by: Alisha Farnell, City Clerk
Recommendation: Approve as submitted.

4. Approve Final Tract Map No. 19114
Prepared by: Doug Dancs, Director of Public Works
Recommendation: Approve Final Tract Map No. 19114 and authorize the City Clerk to sign the record map.

5. Approve the Urban Area Security Initiative Sub-Recipient Agreement with the City of Anaheim
Prepared by: Mark Lauderback, Chief of Police
Recommendation:

1. Approve the Fiscal Year 2020 Urban Area Security Initiative (UASI) Sub-Recipient Agreement with the City of Anaheim; and

2. Authorize the City Manager to execute all UASI related documents.

6. Approve the Successor Agency's Recognized Obligation Payment Schedule for the Period of July 1, 2022 through June 30, 2023 (ROPS 22-23) Prepared by: Matt Burton, Director of Finance and Administrative Services Recommendation: Adopt a Resolution approving the Recognized Obligation Payment Schedule for the period of July 1, 2022 through June 30, 2023 (ROPS 22-23) for the Successor Agency to the Dissolved Cypress Redevelopment Agency.

January 10, 2022 | Page 3

7. Approve a Spending Plan for American Rescue Plan Act Allocations Prepared by: Matt Burton, Director of Finance and Administrative Services Recommendation:

1. Approve a Spending Plan for the $11,723,277 of Coronavirus State and Local Fiscal Recovery Funds allocated to the City as part of the American Rescue Plan Act which categorizes these amounts as revenue replacement to the maximum extent allowed by U.S. Treasury Guidelines; and

2. Increase budgeted transfers out from the Pandemic Response Fund to the City's General Fund by $4,577,000 for eligible 2020 revenue replacement in accordance with American Rescue Plan Act and U.S. Treasury guidelines; and

3. Increase budgeted transfers out of the General Fund to the Infrastructure Fund by $1.2 million; and

4. Increase budgeted transfers out of the General Fund to the Employee Benefits Fund by $1.2 million; and

5. Decrease budgeted transfers out of the Pandemic Response Fund by $625,000 to the City's General Fund ($240,000), Lighting District Fund ($200,000), City Capital Projects Fund ($75,000) and City Central Services Fund ($110,000) for ARPA amounts included in the FY 2021-22 adopted budget.

8. Award a Contract for Lexington Park Landscape Maintenance Services Prepared by: Doug Dancs, Director of Public Works
Recommendation: Award an initial two year and four month contract to BrightView Landscape Services, Inc. for $214,849, with a contingency of $32,228, for Lexington Park Landscape Maintenance Services.

9. Receive and File the Annual Comprehensive Financial Report for the Fiscal Year Ended June 30, 2021
Prepared by: Matt Burton, Director of Finance and Administrative Services Recommendation: Receive and file the Annual Comprehensive Financial Report for the Fiscal Year Ended June 30, 2021.

10. Receive and File the Audit Letter to the City Council for the Fiscal Year Ended June 30, 2021
Prepared by: Matt Burton, Director of Finance and Administrative Services Recommendation: Receive and file the Audit Letter from Lance, Soll and Lunghard LLP to the City Council for the Fiscal Year ended June 30, 2021.

January 10, 2022 | Page 4

11. Receive and File the Report on the City's Appropriations Limit for the Fiscal Year Ended June 30, 2021
Prepared by: Matt Burton, Director of Finance and Administrative Services Recommendation: Receive and file the attached Independent Accountants’ Report on Agreed-Upon Procedures Applied to the City's Appropriations Limit Worksheet for the Fiscal Year ended June 30, 2021.

12. Receive and File the Cypress Recreation and Park District’s Financial Statements and Auditors' Report for the Fiscal Year Ended June 30, 2021 Prepared by: Matt Burton, Director of Finance and Administrative Services Recommendation: Receive and file the District's Basic Financial Statements and Independent Auditors' Report for the Fiscal Year Ended June 30, 2021.

13. Receive and File the Audit Letter to the District Board for the Fiscal Year Ended June 30, 2021
Prepared by: Matt Burton, Director of Finance and Administrative Services Recommendation: Receive and file the Audit Letter from Lance, Soll and Lunghard LLP to the Cypress Recreation and Park District Board of Directors for the Fiscal Year ended June 30, 2021.

14. Receive and File the Independent Accountants’ Report on the Cypress Recreation and Park District’s Appropriations Limit for the Fiscal Year Ended June 30, 2021
Prepared by: Matt Burton, Director of Finance and Administrative Services Recommendation: Receive and file the attached Independent Accountants’ Report on Agreed-Upon Procedures Applied to the Appropriations Limit Worksheet for the Fiscal Year ended June 30, 2021.

15. Receive and File the Investment Report for the Month Ended November 30, 2021 Prepared by: Matt Burton, Director of Finance and Administrative Services Recommendation: Receive and file the attached investment report.

16. Receive and File the Strategic Plan Six-Month Objectives Update Prepared by: Peter Grant, City Manager
Recommendation: Receive and file the strategic plan six-month objectives update.

January 10, 2022 | Page 5

17. Approve Register of Warrants, Transfers, and Wires Issued for the Period of November 27, 2021 through December 17, 2021
Prepared by: Matt Burton, Director of Finance and Administrative Services Recommendation: Approve the attached payment register summarized below for the period of November 27, 2021 through December 17, 2021:

Electronic Funds Transfers 10222 through 10339
Warrants 58345 through 58433
Payroll Transfers W1462 through W1464

NEW BUSINESS

18. Approve an Agreement to Conduct a Community Survey and Establish a City Council Ad Hoc Subcommittee to Assist with the Development of Survey Questionnaire
Prepared by: Alisha Farnell, City Clerk
Recommendation:

1. Approve the attached agreement with True North Research, Inc. for $29,798 to conduct a community survey; and

2. Adopt a Resolution creating an ad hoc subcommittee to advise and assist with the development of the community survey questionnaire, appointing two members of the City Council to the ad hoc subcommittee, and establishing its duration and duties.

19. Consider Lexington Park Operating Policies, Field Allocations, and Rental Rates Prepared by: Jeff Draper, Director of Recreation and Community Services Recommendation:

1. Introduce for first reading an Ordinance, by title only, amending Chapter 17-72 of the Cypress Municipal Code regarding synthetic turf; and

2. Set a public hearing for February 14, 2022, to consider revisions to the Recreation and Park District master fee schedule, to establish Lexington Park athletic field rental fees, pavilion rental fees, food truck fees, and equipment storage fees.

January 10, 2022 | Page 6

ITEMS FROM CITY COUNCIL MEMBERS

20. Consider California Voting Rights Act - City Council Election Format Community Forums Informational Presentation
Agendized by: Ad Hoc Subcommittee - Mayor Paulo Morales and Council Member Jon Peat
Recommendation: Approve California Voting Rights Act - City Council Election Format Community Forums informational presentation.

ORAL COMMUNICATIONS (Five minutes per speaker, unless extended by the City Council) The public may address the City Council on any matters prior to any action taken on the agenda. Although Council Members may provide brief responses, the City Council may not discuss or take action on items that are not on its agenda.

COUNCIL MEMBER REPORTS AND REMARKS

CITY MANAGER REMARKS

ADJOURNMENT
The next meeting will be an adjourned Regular Meeting, to be held on Monday, January 24, 2022, beginning at 5:30 p.m. in the Executive Board Room.

I hereby certify under penalty of perjury under the laws of the State of California, that the foregoing Agenda was posted on the City Hall bulletin board not less than 72 hours prior to the meeting. Dated this 7th day of January, 2022.

________________________________
Alisha Farnell, City Clerk
January 10, 2022 | Page 7
In compliance with the Americans With Disabilities Act, if you need special assistance to participate in this meeting, you should contact the City Clerk at (714) 229-6685 at least 72 hours prior to the meeting to enable the City to make reasonable arrangements to assure accessibility to this meeting.

January 10, 2022 | Page 8
CITY OF CYPRESS
CITY COUNCIL REPORT
City Council Regular 1.

FROM: Alisha Farnell, City Clerk
DATE: 01/10/2022
SUBJECT: Receive and File Public Comments Submitted for the January 10, 2022 City Council Meeting

RECOMMENDATION
Receive and file submitted public comments.

BUDGET IMPACT
None.

LEGAL REVIEW
None required.

APPROVED BY: Peter Grant, City Manager
CITY OF CYPRESS
CITY COUNCIL REPORT
City Council Regular 3.

FROM: Alisha Farnell, City Clerk
DATE: 01/10/2022
SUBJECT: Approve Minutes - Meeting of December 13, 2021

RECOMMENDATION
Approve as submitted.

BUDGET IMPACT
None.

LEGAL REVIEW
None required.

APPROVED BY: Peter Grant, City Manager
Attachments
December 13, 2021 City Council Minutes

REGULAR MEETING

CYPRESS CITY COUNCIL
DECEMBER 13, 2021
6:00 P.M.

A regular meeting of the Cypress City Council was called to order at 6:00 p.m. by Mayor Peat in the Executive Board Room, 5275 Orange Avenue, Cypress, California.

ROLL CALL
Cypress City Council, also acting as the Ex-Officio Governing Board of Directors of the Cypress Recreation and Park District
Mayor Jon Peat
Mayor Pro Tem Paulo Morales
Council Member Anne Hertz
Council Member Frances Marquez – absent
Council Member Scott Minikus

STAFF PRESENT
City Manager Peter Grant
City Attorney Fred Galante
City Clerk Alisha Farnell
Office Assistant Christina Dizol

ORAL COMMUNICATIONS
None.

CLOSED SESSION
The City Attorney reported that the City Council would meet in Closed Session as follows:

CONFERENCE WITH LEGAL COUNSEL – ANTICIPATED LITIGATION
Pursuant to Government Code Section 54956.9(d)(2)
Significant exposure to litigation – one potential case Claim of California Voting Rights Act violation from Southwest Voter Education Project Mayor Peat recessed the meeting at 6:02 p.m.

RECONVENE
Mayor Peat called to order the 7:00 p.m. session of the City Council meeting at 7:15 p.m.

STAFF PRESENT
City Manager Peter Grant
City Attorney Fred Galante
Director of Finance and Administrative Services Matt Burton Director of Public Works Doug Dancs
Chief of Police Mark Lauderback
Planning Director Alicia Velasco
City Clerk Alisha Farnell
Communications and Marketing Analyst Brooke Straus
Office Assistant Christina Dizol
PLEDGE OF ALLEGIANCE Mayor Peat led the Pledge of Allegiance.

INVOCATION Deacon Jerry Pyne, St. Irenaeus Catholic Church, led the Invocation.

REPORT OF WORKSHOP AGENDA/CLOSED SESSION
The City Attorney reported that the City Council met in Closed Session and held a discussion on the item listed on the Closed Session agenda, namely conference with Legal Counsel, one item of anticipated litigation under the heading significant exposure to litigation, a claim of California Voting Rights Act violation from Southwest Voter Education Project. He stated the City Council received a briefing on the status of that threat of litigation and no further reportable action was taken.

ORAL COMMUNICATIONS
None.

CONSENT CALENDAR
All matters listed on the Consent Calendar are to be approved with one motion unless a Council Member requests separate action on a specific item.

It was moved by Mayor Pro Tem Morales, and seconded by Council Member Minikus, to approve Consent Calendar items No. 1 through 8.

The motion was carried by the following roll call vote:

AYES: 4 COUNCIL MEMBERS: Hertz, Minikus, Morales and Peat NOES: 0 COUNCIL MEMBERS: None
ABSENT: 1 COUNCIL MEMBERS: Marquez
Item No. 1: Receive and File Public Comments Submitted for the December 13, 2021 City Council Meeting
Recommendation: Receive and file submitted public comments.

Item No. 2: Introduce and/or Adopt All Ordinances and Resolutions Presented for Consideration by Title Only and to Waive Further Reading Item No. 3: Approve Minutes – Meeting of November 22, 2021 Recommendation: Approve as submitted.

Item No. 4: Approve 2022 City Council Meeting Schedule
Recommendation: Approve 2022 City Council meeting schedule.

Item No. 5: Approve Purchase of Replacement Network Firewalls Recommendation: Approve the purchase of five replacement network firewalls from ADS Consulting Group Inc. for $38,574.50.

Item No. 6: Approve the Purchase of an Industrial Refrigerator and Freezer Recommendation:

1. Approve the purchase of an industrial refrigerator and freezer not to exceed $35,000 from the lowest responsible bidder; and

2. Increase estimated revenues and appropriations in the District’s Capital Replacement Fund by $35,000; and

3. Decrease estimated revenues and appropriations in the City’s General Fund by $35,000
Item No. 7: Approve Participation in the National Opioid Settlements Recommendation:

1. Approve Settlement Participation Form for the City’s participation in the National Opioid Settlement with McKesson Corporation, Cardinal Health, Inc., and AmerisourceBergen Corporation; and

2. Approve Settlement Participation Form for the City’s participation in the National Opioid Settlement with Johnson & Johnson, Janssen Pharmaceuticals, Inc., OrthoMcNeil-Janssen Pharmaceuticals, Inc., and Janssen Pharmaceuticals, Inc.; and

3. Approve the California State-Subdivision Agreement Regarding Distribution and Use of Settlement Funds – Distributor Settlement; and

4. Approve the California State-Subdivision Agreement Regarding Distribution and Use of Settlement Funds – Janssen Settlement; and

5. Adopt a Resolution approving and authorizing the City Manager to execute the documents identified in Recommendation Nos. 1 through 4; and

6. Authorize the City Manager to carry out all necessary acts such that the City can participate in the National Opioid Settlements, including, both not limited to, the transmittal of the executed documents in Recommendation Nos. 1 through 4.

Item No. 8: Approve Register of Warrants, Transfers, and Wires Issued for the Period of November 6, 2021 through November 26, 2021
Recommendation: Approve the attached payment register summarized below for the period of November 6, 2021 through November 26, 2021:
∑ Electronic Funds Transfers 10011 through 10221
∑ Warrants 58158 through 58344
∑ Payroll Transfers W1461

NEW BUSINESS
Item No. 9: City Council Reorganization
The City Clerk opened the nominations for Mayor.

It was moved by Council Member Hertz, and seconded by Mayor Peat, to nominate Mayor Pro Tem Morales to the office of Mayor.

Mayor Pro Tem Morales was elected Mayor by the following roll call vote:

AYES: 4 COUNCIL MEMBERS: Hertz, Minikus, Morales and Peat NOES: 0 COUNCIL MEMBERS: None
ABSENT: 1 COUNCIL MEMBERS: Marquez
Council Member Peat announced a statement by Council Member Marquez requesting to continue her committee assignments from the previous year.

The City Clerk opened the nominations for Mayor Pro Tem.

It was moved by Council Member Minikus, and seconded by Council Member Peat, to nominate Council Member Hertz to the office of Mayor Pro Tem.

Council Member Hertz was elected Mayor Pro Tem by the following roll call vote:

AYES: 4 COUNCIL MEMBERS: Hertz, Minikus, Morales and Peat NOES: 0 COUNCIL MEMBERS: None
ABSENT: 1 COUNCIL MEMBERS: Marquez
Incoming Mayor Paulo Morales thanked everyone for his selection as Mayor and acknowledged the City Councils accomplishments and growth over the past 7 years. He spoke of the City Council commitment and dedication to the City and looks forward to the upcoming year.

Incoming Mayor Pro Tem Anne Hertz thanked outgoing Mayor Peat for his service and stated she is looking forward to working with newly elected Mayor Morales. She spoke of her commitment to engage with residents and looks forward to the upcoming year. She thanked everyone for the opportunity to serve as Mayor Pro Tem.

Outgoing Mayor Jon Peat thanked the community and his colleagues for the opportunity to serve as Mayor over the past year. He spoke regarding his year of service as Mayor and thanked City staff for their outstanding work.

District Representative Scott Do presented a certificate of recognition to outgoing Mayor Jon Peat on behalf of State Senator Josh Newman.

Field Representative Lily Jimenez presented a certificate to recognition to outgoing Mayor Jon Peat on behalf of Assemblywoman Sharon Quirk-Silva.

Mayor Morales presented a plaque to outgoing Mayor Jon Peat.

Item 10: City Council Appointments to Organizations and Committees Mayor Morales made the following appointments:

COMPENSATED:

Orange County Fire Authority Anne Hertz – Representative Orange County Sanitation District Paulo Morales – Representative Anne Hertz – Alternate
Orange County Mosquito & Vector Scott Minikus – Representative Control District
NON-COMPENSATED:

West Cities Police Communications Center Paulo Morales – Representative Jon Peat – Alternate
League of California Cities Paulo Morales – Representative General Assembly Anne Hertz – Alternate
League of California Cities Paulo Morales – Representative Orange County Division Anne Hertz – Alternate
Orange County City Selection Committee Paulo Morales – Representative Anne Hertz – Alternate
Orange County Council of Governments Scott Minikus – Representative General Assembly Frances Marquez – Alternate
Orange County Library Advisory Board Anne Hertz – Representative Jon Peat - Alternate
Santa Ana River Flood Protection Agency Jon Peat – Representative Scott Minikus – Alternate
Southern California Association of Scott Minikus – Representative Governments – General Assembly Frances Marquez – Alternate Bridges at Kraemer Place Community Jon Peat – Representative Advisory Board
Joint Forces Training Base Cities Group Scott Minikus – Representative Paulo Morales – Alternate
Economic Development Ad Hoc Anne Hertz
Subcommittee Jon Peat
City/Anaheim Union High School Anne Hertz
District Ad Hoc Subcommittee Jon Peat
City/Cypress College Ad Hoc Subcommittee Paulo Morales
Jon Peat
City/Cypress School District Ad Hoc Anne Hertz
Subcommittee Scott Minikus
Veteran Recognition Ad Hoc Subcommittee Frances Marques Scott Minikus
It was moved by Council Member Minikus, and seconded by Council Member Peat, to confirm the Mayor’s appointments to organizations and committees and adopt a resolution designating and appointing a representative to the Orange County Fire Authority Board of Directors.

The motion was carried by the following roll call vote:

AYES: 4 COUNCIL MEMBERS: Minikus, Peat, Hertz and Morales NOES: 0 COUNCIL MEMBERS: None
ABSENT: 1 COUNCIL MEMBERS: Marquez
RESOLUTION NO. 6869

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

CYPRESS, CALIFORNIA, DESIGNATING AND APPOINTING ITS

REPRESENTATIVE TO THE ORANGE COUNTY FIRE
AUTHORITY’S BOARD OF DIRECTORS
ORAL COMMUNICATIONS (Five minutes per speaker, unless extended by the City Council)
None.

COUNCIL MEMBER REPORTS AND REMARKS
Council Member Minikus:

Participated in a California Highway Patrol toy drive held at Joe Schmoe’s restaurant.

Wished everyone a Happy Holiday season.

Council Member Peat:

Attended the ground breaking ceremony for the Orange County Veterans Cemetery located in Anaheim Hills. Wished everyone a Happy Holiday season.

Mayor Pro Tem Hertz:

Thanked the Recreation department for their work with the Holiday Sing and Tree Lighting Celebration. Wished everyone a Happy Holiday season.

Mayor Morales:

Acknowledged the Recreation department for their work on the Holiday Sing and Tree Lighting event. Wished everyone a Happy Holiday season.

CITY MANAGER REMARKS
The City Attorney wished everyone a Happy Holiday season.

The City Manager stated that City Hall would be closed December 23, 2021 through January 2, 2022. He announced a Special City Council Meeting to be held on December 27, 2021. Wished everyone a Happy Holiday season.

ADJOURNMENT
Mayor Peat adjourned the meeting at 7:52 p.m. to an adjourned Regular Meeting, to be held on Monday, January 10, 2022, beginning at 5:30 p.m. in the Executive Board Room. _______________________________

MAYOR OF THE CITY OF CYPRESS
ATTEST:
___________________________________

CITY CLERK OF THE CITY OF CYPRESS
CITY OF CYPRESS
CITY COUNCIL REPORT
City Council Regular 4.

FROM: Douglas Dancs, Director of Public Works
DATE: 01/10/2022
SUBJECT: Approve Final Tract Map No. 19114

RECOMMENDATION
Approve Final Tract Map No. 19114 and authorize the City Clerk to sign the record map.

DISCUSSION
The California Subdivision Map Act governs the subdivision of land, or real property, for the purpose of sale, leasing or financing. Under this law, local government has approval authority over the subdivision process. A tract map is required for condominium purposes.

At the May 10, 2021 meeting, the City Council approved a Vesting Tentative Tract Map 19114. That map provided for the development of 135 multi-family homes. The project, developed by Melia Homes, is located on an approximately seven-acre site southwest of Vessels Circle and north of Winners Circle within the Los Alamitos Race Course.

The Final Tract Map substantially conforms with Tentative Tract Map No. 19114 and all conditions of approval imposed by the City Council have been bonded for or completed. Tract Map filing fees have been paid and the Tract Map has been checked and found to be technically correct.

BUDGET IMPACT
None.

LEGAL REVIEW
None required.

APPROVED BY: Peter Grant, City Manager
Attachments
Tract Map 19114
Agenda Report - Tentative Tract Map

The Agenda Report for Tentative Tract Map 19114 can be accessed here:
https://bit.ly/3pTQsK8
CITY OF CYPRESS
CITY COUNCIL REPORT
City Council Regular 5.

FROM: Mark Lauderback, Chief of Police
DATE: 01/10/2022
SUBJECT: Approve the Urban Area Security Initiative Sub-Recipient Agreement with the City of Anaheim

RECOMMENDATION

1. Approve the Fiscal Year 2020 Urban Area Security Initiative (UASI) Sub-Recipient Agreement with the City of Anaheim; and

2. Authorize the City Manager to execute all UASI related documents.

DISCUSSION
The Urban Area Security Initiative provides federal funding to cities to prevent, respond to, and recover from threats or acts of terrorism. In Orange County, the Cities of Anaheim and Santa Ana, in their capacity as a "Core City" for the Anaheim/Santa Ana Urban Area, received and accepted a FY 2020 Urban Area Security Initiative grant. Anaheim and Santa Ana have the responsibility to enhance the preparedness and response capabilities of the entire urban area of Orange County by administering grant-supported training and funding. In even years such as FY 2020, the City of Anaheim acts as the lead fiscal agent. Each city in Orange County, including Cypress, as a sub-recipient, may receive UASI funding for projects, services, and training based on availability.

In previous years, Cypress has received UASI funding for personal protective equipment for first responders, security technology for critical asset protection, and terrorism-related training. The FY 2020 UASI provides the Cypress Police Department the opportunity to attend regional training exercises and request equipment purchases. Procurement for any equipment purchases would be handled through the Anaheim/Santa Ana UASI Grant Office while training would be reimbursed. The current performance period for the FY 2020 UASI Grant runs through March 31, 2023. To be eligible for potential funding, all grant related documents are due back to the Anaheim UASI Grant Office by January 28, 2022.

BUDGET IMPACT
A total of $5 million in FY 2020 UASI funding is available to the Anaheim and Santa Ana A total of $5 million in FY 2020 UASI funding is available to the Anaheim and Santa Ana working group. If Cypress is allocated FY 2020 UASI funding, a recommendation to approve additional appropriations and increase estimated revenues will be presented to the City Council for consideration.

LEGAL REVIEW
The agreement was reviewed by the City Attorney and approved as to form.

APPROVED BY: Peter Grant, City Manager
Attachments
UASI Subrecipient Agreement

AGREEMENT
SUB-RECIPIENT: CITY OF CYPRESS
City Contract Number

TABLE OF CONTENTS
Section Description Page
I

INTRODUCTION
§101. Parties to the Agreement 3
§102. Representatives of the Parties and Service of Notices 3 §103. Independent Party 4
§104. Conditions Precedent to Execution of this Agreement 4 II

TERM AND SERVICES TO BE PROVIDED
§201. Time of Performance 5
§202. Use of Grant Funds 5
III

PAYMENT
§301. Payment of Grant Funds and Method of Payment 9
IV

STANDARD PROVISIONS
§401. Construction of Provisions and Titles Herein 10
§402. Applicable Law, Interpretation and Enforcement 10 §403. Integrated Agreement 10
§404. Excusable Delays 10
§405. Breach 11
§406. Prohibition Against Assignment or Delegation 11
§407. Permits 11
§408. Bonds 11

TABLE OF CONTENTS
Section Description Page
§409. Indemnification 11
§410. Conflict of Interest 12
§411. Restriction on Disclosures 13
§412. Statutes and Regulations Applicable to All Grant Contracts 13 §413. Federal, State, and Local Taxes 17
§414. Inventions, Patents and Copyrights 17
§415. MBE/WBE 19
V

DEFAULTS, SUSPENSION, TERMINATION, AND AMENDMENTS
§501. Defaults 20
§502. Amendments 20
V

ENTIRE AGREEMENT
§601. Complete Agreement 21
§602. Number of Pages and Attachments 21
Execution (Signature) Page 22

EXHIBITS
Exhibit A CalOES FY2020 Grant Assurances
Exhibit B Certification Regarding Debarment, Suspension and Other Responsibility Matters
Exhibit C Certification Regarding Lobbying
1 Agreement Number:__________

AGREEMENT FOR TRANSFER OR PURCHASE OF EQUIPMENT/SERVICES OR FOR

REIMBURSEMENT OF TRAINING COSTS
FOR FY2020 URBAN AREAS SECURITY INITIATIVE (UASI)

BETWEEN

THE CITY OF ANAHEIM

AND CITY OF CYPRESS
THIS AGREEMENT is made and entered into this ___ day of _______ 20___, by and between the CITY OF ANAHEIM, a municipal corporation (the “CITY”), and CITY OF CYPRESS (the “SUB-RECIPIENT” or “Contractor”).

W I T N E S S E T H
WHEREAS, CITY, acting through the Anaheim Police Department in its capacity as a Core City for the Anaheim/Santa Ana Urban Area under the FY2020 Urban Areas Security Initiative, has applied for, received and accepted a grant entitled “FY 2020 Urban Areas Security Initiative” from the federal Department Of Homeland Security (DHS), Federal Emergency Management Agency (FEMA), through the State of California Governor’s Office of Emergency Services (CalOES), to enhance countywide emergency preparedness (the “grant”), as set forth in the grant guidelines and assurances that are incorporated to this Agreement by reference and located at:
“U.S. Department of Homeland Security “Fiscal Year 2020 Homeland Security Grant Program (HSGP) Notice of Funding Opportunity (NOFO)” https://www.fema.gov/sites/default/files/2020-08/fema_homeland-security-grantprogram-nofo_fy-2020.pdf California Office of Emergency Services “FY2020 Homeland Security Grant Program: California Supplement to Federal Program Guidance and Application Kit”
https://www.caloes.ca.gov/GrantsManagementSite/Documents/FY%202020%20H SGP%20State%20Supplement.pdf
Copies of the grant guidelines shall be retained in the Anaheim/Santa Ana Grant Office.

WHEREAS, this financial assistance is administered by the CITY OF ANAHEIM (“CITY”) and is overseen by the California Governor’s Office of Emergency Services (“CalOES”); and
WHEREAS, this financial assistance is being provided to address the unique equipment, training, planning, and exercise needs of large urban areas, and to assist them in building an enhanced and sustainable capacity to prevent, respond to, and recover from threats or acts of terrorism; and
2 WHEREAS, the Anaheim/Santa Ana Urban Area (“ASAUA”) consists of 34 cities in Orange County, including the City of Anaheim and the City of Santa Ana, the County of Orange, Santa Ana Unified School District Police, California State University, Fullerton, University of California, Irvine, Municipal Water District of Orange County, and the Orange County Fire Authority; and
WHEREAS, the Office of Grants Management (“OGM”) awarded a FY2020 UASI Grant of $5,056,750 (“Grant Funds”) to the CITY OF ANAHEIM, as a Core City, for use in the ASAUA; and
WHEREAS, the CITY has designated the Chief of Police, or his designee and the Anaheim Police Department, Emergency Management Director (“UASI Grant Office”) to provide for terrorism prevention and emergency preparedness; and WHEREAS, the UASI Grant Office now wishes to distribute FY2020 UASI Grant Funds throughout the ASAUA, as further detailed in this Agreement (“Agreement”) to CITY OF CYPRESS (“SUB-RECIPIENT”) and others;
WHEREAS, the CITY and SUB-RECIPIENT are desirous of executing this Agreement as authorized by the City Council and the Chief of Police which authorizes the CITY to prepare and execute the Agreement.

NOW, THEREFORE, IT IS MUTUALLY AGREED AS FOLLOWS:
3 I

INTRODUCTION
§101. Parties to the Agreement
The parties to this Agreement are:

A. The CITY, a municipal corporation, having its principal office at 425 South Harbor Boulevard, Anaheim, CA 92805; and
B. CITY OF CYPRESS, a municipal corporation, 5275 Orange Ave, Cypress, CA 90630
§102. Representatives of the Parties and Service of Notices A. The representatives of the respective parties who are authorized to administer this Agreement and to whom formal notices, demands and communications shall be given are as follows:

1. The representative of the City of Anaheim shall be, unless otherwise stated in the Agreement:

Richard LaRochelle, Lieutenant
Anaheim Police Department
425 South Harbor Boulevard
Anaheim, CA. 92805
Phone: (714) 765-3833
Fax: (714) 765-1616
[email protected]

2. The representative of CITY OF CYPRESS shall be:

Name:______________________
Title: _______________________
Sub Recipient Name: __________________________
Sub Recipient Address: _________________________
City____________ State: _______________ Zip:___________ Phone: _____________________
E-mail: _____________________
B. Formal notices, demands and communications to be given hereunder by either party shall be made in writing and may be effected by personal delivery or by registered or certified mail, postage prepaid, return receipt requested and shall be deemed communicated as of the date of mailing. 4 C. If the name of the person designated to receive the notices, demands or communications or the address of such person is changed, written notice shall be given, in accord with this section, within five (5) business days of said change.
§103. Independent Party
SUB-RECIPIENT is acting hereunder as an independent party, and not as an agent or employee of the CITY OF ANAHEIM. No employee of SUB-RECIPIENT is, or shall be an employee of the CITY OF ANAHEIM by virtue of this Agreement, and SUB-RECIPIENT shall so inform each employee organization and each employee who is hired or retained under this Agreement. SUB-RECIPIENT shall not represent or otherwise hold out itself or any of its directors, officers, partners, employees, or agents to be an agent or employee of the CITY OF ANAHEIM. §104. Conditions Precedent to Execution of This Agreement SUB-RECIPIENT shall provide copies of the following documents to the CITY OF ANAHEIM, unless otherwise exempted.

A. Grant Assurances in accordance with section 413C of this Agreement attached hereto as Exhibit A and made part hereof.

B. Certifications Regarding Ineligibility, Suspension and Debarment as required by Executive Order 12549 in accordance with Section 413A12 of this Agreement and attached hereto as Exhibit B and made a part hereof.

C. Certifications and Disclosures Regarding Lobbying in accordance with Section 413A4 of this Agreement and attached hereto as Exhibit C and made a part hereof. SUB-RECIPIENT shall also file a Disclosure Form at the end of each calendar quarter in which there occurs any event requiring disclosure or which materially affects the accuracy of the information contained in any Disclosure Form previously filed by SUB-RECIPIENT.
5 II

TERM AND SERVICES TO BE PROVIDED
§201. Time of Performance
The term of this Agreement shall commence on 8/31/2021 and end on 3/31/2023 or upon the final disbursement of all of the Grant Amount (as defined in Section 301) and any additional period of time as is required to complete any necessary close out activities. Said term is subject to the provisions herein.
§202. Use of Grant Funds
A. CITY may, a) transfer to SUB-RECIPIENT, equipment or services purchased with grant funds and in accordance with grant guidelines set forth above; or, b) reimburse SUB-RECIPIENT for purchase of authorized equipment, exercises, services or training upon receiving prior written approval from CITY or its designee and in accordance with grant guidelines and in full compliance with all of the SUB-RECIPIENT’S purchasing and bidding procedures. SUB-RECIPIENT shall specify the equipment, services, exercises and training to be purchased using the Application for Project Funding. A paper copy of this document will be provided to SUBRECIPIENT by CITY. In addition, a compact disc with a copy of the document will be provided to SUB-RECIPIENT by CITY. If additional copies of the document are needed, SUB-RECIPIENT may contact the Anaheim Grant Coordinator and it will be provided.

B. SUB-RECIPIENT shall provide any reports requested by the CITY regarding the performance of the Agreement. Reports shall be in the form requested by the CITY, and shall be provided in a timely manner.

C. SUB-RECIPIENT shall provide the CITY a copy of its most current procurement guidelines and follow its own procurement requirements as long as they meet the minimum federal requirements. Federal procurement requirements for the FY2020 UASI Grant can be found at 2 Code of Federal Regulations (CFR) Part 200 “Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards.” D. The Authorized Equipment List (AEL) is a list of the allowable equipment which may be purchased pursuant to this Agreement and is located at https://www.fema.gov/authorized-equipment-list, and incorporated to this Agreement by reference. A copy of the AEL shall be retained in the Anaheim/Santa Ana Grant Office. Unless otherwise stated in program guidance any equipment acquired pursuant to this Agreement shall meet all mandatory regulations and/or DHS-adopted standards to be eligible for purchase using grant funds.

Any equipment acquired or obtained with Grant Funds:
6 1. Shall be made available under the California Disaster and Civil Defense Master Mutual Aid Agreement in consultation with representatives of the various fire, emergency medical, hazardous materials response services, and law enforcement agencies within the jurisdiction of the applicant;

2. Shall be consistent with needs as identified in the National Priorities and Core Capabilities, the State Homeland Security Strategy and the Anaheim/Santa Ana Urban Area and Orange County Operational Area Homeland Security Grants Strategy, the Threat Hazard Identification and Risk Assessment (THIRA), the State
Preparedness Report; and deployed in conformance with those plans;

3. Shall be made available pursuant to applicable terms of the California Disaster and Civil Defense Master Mutual Aid Agreement and deployed with personnel trained in the use of such equipment in a manner consistent with the California Law Enforcement Mutual Aid Plan or the California Fire Services and Rescue Mutual Aid Plan;

4. Shall be subject to the requirements of Title 2 CFR Part 200.313 and 200.314. For the purposes of this subsection, “Equipment” is defined as nonexpendable property that is not consumed or does not lose its identity by being incorporated into another item of equipment, which costs $5,000 or more per unit, or is expected to have a useful life of one (1) year or more.

5. Shall be used by SUB-RECIPIENT in the program or project for which it was acquired as long as needed, whether or not the project or program continues to be supported by Federal funds. When no longer useful for the original program or project, the Equipment may be used in other activities currently or previously supported by a Federal agency.

6. Shall be made available for use on other projects or programs currently or previously supported by the Federal Government, providing such use will not interfere with the work on the projects or program for which it was originally acquired. First preference for other use shall be given to other programs or projects supported by the awarding agency.

7. Shall be recorded on a ledger. The record shall include: (a) description of the item of Equipment, (b) serial number or other identification number, (c) the source of funding for the property (including FAIN); (d) who holds the title, (e) date of acquisition; (f) the per unit acquisition cost of the Equipment, (g) percentage of federal participation in the project costs for the Federal award under which the property was acquired, (h) location, and (i)use and 7 condition of Equipment, and (j) ultimate disposition data including the date of disposal and sale price of the property. Records must be retained pursuant to 2 CFR Part 200.313.

8. All equipment obtained under this Agreement shall have an ASAUA identification decal affixed to it, and, when practical, shall be affixed where it is readily visible.

9. A physical inventory of the Equipment shall be taken and the results reconciled with the Equipment records at least once every two years.

Inventory shall also be taken prior to any UASI, State or Federal monitor visits.

10.SUB-RECIPIENT shall exercise due care to preserve and safeguard equipment acquired with grant funds from damage or destruction and shall provide regular maintenance and such repairs for said equipment as necessary, in order to keep said equipment continually in good working order. Such maintenance and servicing shall be the sole responsibility of SUB-RECIPIENT, who shall assume full responsibility for maintenance and repair of the equipment throughout the life of said equipment.

11.SUB-RECIPIENT shall identify a Point-of-Contact (POC) to be responsible for all Equipment prior to the receipt of the item(s). POC will serve as the custodian of the Equipment. SUB-RECIPIENT shall notify the CITY of any change in the POC and assume the responsibility of advising the new custodian of all UASI grant program guidelines and requirements.

12.SUB-RECIPIENT shall contact the ASAUA Grant Office prior to initiating the disposition process. Disposal of equipment shall be conducted pursuant to 2 CFR Part 200.313. The ASAUA will contact the awarding agency for disposition instructions, if necessary, prior to any action being taken.

E. Any training paid pursuant to this Agreement shall conform to the guidelines as listed in FY2020 Homeland Security Grant Program, as set forth above. All training expenses must be pre-authorized by CalOES at
https://www.caloes.ca.gov/CaliforniaSpecializedTrainingInstituteSite/Documen ts/HSG%20Funds%20Tracking%20Number%20Request%20Form.pdf. A catalogue of Grantor approved and sponsored training courses is available at https://cdp.dhs.gov/.

F. Any exercise paid pursuant to this Agreement shall conform to the guidelines as listed in FY2020 Homeland Security Grant Program, as set forth above.

Detailed Homeland Security Exercise and Evaluation Program Guidance is available at https://www.fema.gov/media-library/assets/documents/32326.

G. Any planning paid pursuant to this Agreement shall conform to the guidelines 8 as listed in FY2020 Homeland Security Grant Program, as set forth above.

H. Any organizational activities paid pursuant to this Agreement shall conform to the guidelines as listed in FY2020 Homeland Security Grant Program, as set forth above.
9 III

PAYMENT
§301. Payment of Grant Funds and Method of Payment
A. CITY may, a) transfer to SUB-RECIPIENT, equipment or services purchased with grant funds; or, b) reimburse SUB-RECIPIENT for the purchase of authorized equipment, exercises, services or training upon receiving prior written approval from CITY or its designee and in accordance with grant guidelines and in full compliance with all of the SUB-RECIPIENT’S purchasing and bidding procedures. SUB-RECIPIENT shall specify the equipment, exercises, services or training to be purchased using the Application for Project Funding. A copy of this document will be provided to SUB-RECIPIENT by CITY. If additional copies of the document are needed, SUB-RECIPIENT may contact the Anaheim Grant Coordinator and it will be provided. Funds may be used for planning, exercises, organizational and training activities, and the purchase of equipment as described in Section 202 above.

B. SUB-RECIPIENT shall provide invoices to the CITY requesting payment and all supporting documentation. Each reimbursement request shall be accompanied by the Reimbursement Request for Grant Expenditures detailing the expenditures made by SUB-RECIPIENT as authorized by Section 202 above. Each reimbursement request shall be submitted to the Anaheim UASI Grant Office. For equipment for which SUB-RECIPIENT is requesting reimbursement, all appropriate back-up documentation must be attached to the reimbursement form, including invoices, proof of payment, packing slips, and Equipment Reimbursement Worksheet. For training reimbursements, SUBRECIPIENT must include a copy of any certificates issued or a copy of the class roster verifying training attendees, proof that a CalOES tracking number has been assigned to the course, timesheets and payroll registers for all training attendees, receipts for travel expenses related to the training, and Training Reimbursement Worksheet. For regional project reimbursements, SUB-RECIPIENT must include approval from the lead agency for all submitted invoices.

C. Payment of final invoice shall be withheld by the CITY until the SUBRECIPIENT has turned in all supporting documentation and completed the requirements of this Agreement.

D. It is understood that the CITY makes no commitment to fund this Agreement beyond the terms set forth herein.

E. Funding for all periods of this Agreement is subject to the continuing availability to the CITY of federal funds for this program. The Agreement may be terminated immediately upon written notice to SUB-RECIPIENT of a loss or reduction of federal grant funds.
10 IV

STANDARD PROVISIONS
§401. Construction of Provisions and Titles Herein
All titles or subtitles appearing herein have been inserted for convenience and shall not be deemed to affect the meaning or construction of any of the terms or provisions hereof. The language of this Agreement shall be construed according to its fair meaning and not strictly for or against either party. The word "Sub-recipient" herein and in any amendments hereto includes the party or parties identified in this Agreement. The singular shall include the plural. If there is more than one Sub-recipient as identified herein, unless expressly stated otherwise, their obligations and liabilities hereunder shall be joint and several. Use of the feminine, masculine, or neuter genders shall be deemed to include the genders not used.
§402. Applicable Law, Interpretation and Enforcement
Each party's performance hereunder shall comply with all applicable laws of the United States of America, the State of California, and the CITY. This Agreement shall be enforced and interpreted under the laws of the State of California and the CITY.

If any part, term or provision of this Agreement shall be held void, illegal, unenforceable, or in conflict with any law of a federal, state or local government having jurisdiction over this Agreement, the validity of the remaining portions of provisions shall not be affected thereby.
§403. Integrated Agreement
This Agreement sets forth all of the rights and duties of the parties with respect to the subject matter hereof, and replaces any and all previous agreements or understandings, whether written or oral, relating thereto. This Agreement may be amended only by a written instrument executed by both parties hereto. §404. Excusable Delays
In the event that performance on the part of any party hereto shall be delayed or suspended as a result of circumstances beyond the reasonable control and without the fault and negligence of said party, none of the parties shall incur any liability to the other parties as a result of such delay or suspension.

Circumstances deemed to be beyond the control of the parties hereunder shall include, but not be limited to, acts of God or of the public enemy; insurrection; acts of the Federal Government or any unit of State or Local Government in either sovereign or contractual capacity; fires; floods; epidemics; quarantine 11 restrictions; strikes, freight embargoes or delays in transportation; to the extent that they are not caused by the party's willful or negligent acts or omissions and to the extent that they are beyond the party's reasonable control. §405. Breach
Except for excusable delays, if any party fails to perform, in whole or in part, any promise, covenant, or agreement set forth herein, or should any representation made by it be untrue, any aggrieved party may avail itself of all rights and remedies, at law or equity, in the courts of law. Said rights and remedies are cumulative of those provided for herein except that in no event shall any party recover more than once, suffer a penalty or forfeiture, or be unjustly compensated.
§406. Prohibition Against Assignment or Delegation
SUB-RECIPIENT may not, unless it has first obtained the written permission of the CITY:

A. Assign or otherwise alienate any of its rights hereunder, including the right to payment; or
B. Delegate, subcontract, or otherwise transfer any of its duties hereunder. §407. Permits
SUB-RECIPIENT and its officers, agents and employees shall obtain and maintain all permits and licenses necessary for SUB-RECIPIENT performance hereunder and shall pay any fees required therefore. SUB-RECIPIENT further certifies to immediately notify the CITY of any suspension, termination, lapses, non-renewals or restrictions of licenses, certificates, or other documents. §408. Bonds
SUB-RECIPIENT must purchase a performance bond for any equipment item over $250,000 or any vehicle (including aircraft or watercraft) financed with homeland security funds. SUB-RECIPIENT must provide a copy of performance bond to CITY no later than the time of reimbursement.
§409. Indemnification
To the fullest extent of the law, SUB-RECIPIENT agrees to indemnify, defend, and hold harmless the City of Anaheim, its officers, agents, employees, representatives and designated volunteers from and against any and all claims, demands, defense costs, or liability of any kind or nature arising out of or resulting from, or any way connected with SUB-RECIPIENT’S acts, errors or omissions in the performance of SUB-RECIPIENT’S services or use of grant funds under the terms of this Agreement.
12 §410. Conflict of Interest
A. SUB-RECIPIENT covenants that none of its directors, officers, employees, or agents shall participate in selecting, or administrating any subcontract supported (in whole or in part) by Federal funds where such person is a director, officer, employee or agent of the subcontractor; or where the selection of subcontractors is or has the appearance of being motivated by a desire for personal gain for themselves or others such as family business, etc.; or where such person knows or should have known that:

1. A member of such person's immediate family, or domestic partner or organization has a financial interest in the subcontract;

2. The subcontractor is someone with whom such person has or is negotiating any prospective employment; or

3. The participation of such person would be prohibited by the California Political Reform Act, California Government Code §87100 et seq. if such person were a public officer, because such person would have a "financial or other interest" in the subcontract.

B. Definitions:

1. The term "immediate family" includes but is not limited to domestic partner and/or those persons related by blood or marriage, such as husband, wife, father, mother, brother, sister, son, daughter, father in law, mother in law, brother in law, sister in law, son in law, daughter in law.

2. The term "financial or other interest" includes but is not limited to:
a. Any direct or indirect financial interest in the specific contract, including a commission or fee, a share of the proceeds, prospect of a promotion or of future employment, a profit, or any other form of financial reward.
b. Any of the following interests in the subcontractor
ownership: partnership interest or other beneficial interest of five percent or more; ownership of five percent or more of the stock; employment in a managerial capacity; or
membership on the board of directors or governing body.

C. The SUB-RECIPIENT further covenants that no officer, director, employee, or agent shall solicit or accept gratuities, favors, anything of monetary value from any actual or potential subcontractor, supplier, a party to a sub agreement, (or persons who are otherwise in a position to benefit from the actions of any officer, employee, or agent).

D. The SUB-RECIPIENT shall not subcontract with a former director, officer, or employee within a one year period following the termination of the relationship 13 between said person and the Contractor.

E. Prior to obtaining the CITY’S approval of any subcontract, the SUBRECIPIENT shall disclose to the CITY any relationship, financial or otherwise, direct or indirect, of the SUB-RECIPIENT or any of its officers, directors or employees or their immediate family with the proposed subcontractor and its officers, directors or employees.

F. For further clarification of the meaning of any of the terms used herein, the parties agree that references shall be made to the guidelines, rules, and laws of the SUB-RECIPIENT, State of California, and Federal regulations regarding conflict of interest.

G. The SUB-RECIPIENT warrants that it has not paid or given and will not pay or give to any third person any money or other consideration for obtaining this Agreement.

H. The SUB-RECIPIENT covenants that no member, officer or employee of SUB-RECIPIENT shall have interest, direct or indirect, in any contract or subcontract or the proceeds thereof for work to be performed in connection with this project during his/her tenure as such employee, member or officer or for one year thereafter.

I. The SUB-RECIPIENT shall incorporate the foregoing subsections of this Section into every agreement that it enters into in connection with this project and shall substitute the term "subcontractor" for the term "SUB-RECIPIENT" and "sub subcontractor" for "Subcontractor".
§411. Restriction on Disclosures
Any reports, analysis, studies, drawings, information, or data generated as a result of this Agreement are to be governed by the California Public Records Act (California Government Code Sec. 6250, et seq.).
§412. Statutes and Regulations Applicable To All Grant Contracts A. Compliance With Grant Assurances
To obtain the Grant Funds, the Grantor required an authorized representative of the CITY to sign certain promises regarding the way the Grant Funds would be spent (“Grant Assurances”), attached hereto as Exhibit A. By signing these Grant Assurances, the CITY became liable to the Grantor for any funds that are used in violation of the grant requirements. SUB-RECIPIENT shall be liable to the Grantor for any funds the Grantor determines SUB-RECIPIENT used in violation of these Grant Assurances. SUB-RECIPIENT shall indemnify and hold harmless the CITY for any sums the Grantor determines SUBRECIPIENT used in violation of the Grant Assurances.

B. SUB-RECIPIENT shall comply with all applicable requirements of state, federal, county and SUB-RECIPIENT laws, executive orders, regulations, program and 14 administrative requirements, policies and any other requirements governing this Agreement. SUB-RECIPIENT shall comply with state and federal laws and regulations pertaining to labor, wages, hours, and other conditions of employment. SUB-RECIPIENT shall comply with new, amended, or revised laws, regulations, and/or procedures that apply to the performance of this Agreement. These requirements include, but are not limited to:

1. Office of Management and Budget (OMB) Circulars
SUB-RECIPIENT shall comply with 2 Code of Federal Regulations (CFR) Part 200 (Uniform Administrative, Cost Principles, and Audit Requirements for Federal Awards).

2. Single Audit Act
If Federal funds are used in the performance of this Agreement, SUB-RECIPIENT shall adhere to the rules and regulations of the Single Audit Act, 31 USC Sec. 7501 et seq.; Title 2 Code of Federal Regulations, Part 200, Subpart F Audit Requirements; and any administrative regulation or field memos implementing the Act. When reporting under on the FY2020 UASI Grant
Program under the Single Audit Act, SUB-RECIPIENT shall use Catalog of Federal Domestic Assistance (CFDA) Program
Number 97.067 “Homeland Security Grant Program”; Grant
Identification Number 2020-0095; and identify the City of Anaheim as the Pass-Through.

3. Records Maintenance
Records, in their original form, shall be maintained in accordance with requirements prescribed by the CITY with respect to all matters covered on file for all documents specified in this Agreement.

Original forms are to be maintained on file for all documents specified in this Agreement. Such records shall be retained for a period of three (3) years after the CITY receives notification of grant closeout from CalOES, and after final disposition of all pending matters. "Pending matters" include, but are not limited to, an audit, litigation or other actions involving records. The CITY may, at its discretion, take possession of, retain and audit said records. Records, in their original form pertaining to matters covered by this Agreement, shall at all times be retained within the County of Orange unless authorization to remove them is granted in writing by the CITY.

4. Subcontracts and Procurement
SUB-RECIPIENT shall comply with the federal and SUBRECIPIENT standards in the award of any subcontracts. For purposes of this Agreement, subcontracts shall include but not be limited to purchase agreements, rental or lease agreements, third party agreements, consultant service contracts and 15 construction subcontracts.

SUB-RECIPIENT shall ensure that the terms of this Agreement with the CITY are incorporated into all Subcontractor Agreements. The SUB-RECIPIENT shall submit all Subcontractor Agreements to the CITY for review prior to the release of any funds to the subcontractor. The SUB-RECIPIENT shall withhold funds to any subcontractor agency that fails to comply with the terms and conditions of this Agreement and their respective Subcontractor Agreement.

5. Civil Rights
SUB-RECIPIENT shall comply with all Federal statutes relating to nondiscrimination. These include but are not limited to: (a) Title VI of the Civil Rights Act of 1964 (P.L. 88-352) which prohibits discrimination on the basis of race, color or national origin; (b) Title IX of the Education Amendments of 1972, as amended (20 U.S.C. §§1681- 1683, and 1685-1686), which prohibits discrimination on the basis of sex; (c) Section 504 of the Rehabilitation Act of 1973, as amended (29 U.S.C. §794), which prohibits discrimination on the basis of handicaps; (d) The Age Discrimination act of 1975, as amended (42 U.S.C. §§6101-6107), which prohibits discrimination on the basis of age; (e) the Drug Abuse Office and Treatment Act of 1972 (P.L. 92-255), as amended, relating to nondiscrimination on the basis of drug abuse; (f) the Comprehensive Alcohol Abuse and Alcoholism Prevention, Treatment and Rehabilitation act of 1970 (P.L. 91-616) as amended, relating to nondiscrimination on the basis of alcohol abuse or alcoholism; (g) §§523 and 527 of the Public Health Service Act of 1912 (42 U.S.C. §§290 dd-3 and 290 ee 3), as amended, relating to confidentiality of alcohol and drug abuse patient records; (h) Title VIII of the Civil Rights Act of 1968 (42 U.S.C. §§3601, et seq.), as amended, relating to non-discrimination in the sale, rental or financing of housing; (i) any other nondiscrimination provisions in the specific statute(s) under which application for Federal assistance is being made; (j) the requirements of any other nondiscrimination statute(s) which may apply to the application; and (k) P.L. 93-348 regarding the protection of human subjects involved in research, development, and related activities supported by this award of assistance.

6. Telecommunications (2 CFR 200.216)
SUBRECIPIENT will comply with FEMA Policy 405-143-1,
Prohibitions on Expending FEMA Award Funds on Covered
Telecommunication Equipment or Services (Interim), which prohibits grant recipients and subrecipients from obligating or expending loan or grant funds to procure or obtain, extend or renew a contract to procure or obtain, or to enter into a contract (or 16 extend or renew a contract) to procure or obtain equipment, services, or systems that uses covered telecommunications equipment or services as a substantial or essential component of any system, or as critical technology as part of any system.

C. Statutes and Regulations Applicable To This Particular Grant SUB-RECIPIENT shall comply with all applicable requirements of state and federal laws, executive orders, regulations, program and administrative requirements, policies and any other requirements governing this particular grant program. SUB-RECIPIENT shall comply with new, amended, or revised laws, regulations, and/or procedures that apply to the performance of this Agreement. These requirements include, but are not limited to:

1. Title 2 Code of Federal Regulations (CFR) Part 200; EO 12372; Department of Justice (DOJ) Office of Judicial Programs (OJP) Office of the Comptroller, U.S. Department of Homeland Security, Preparedness Directorate Financial Management Guide; U.S.

Department of Homeland Security, Office of Grants and Training, FY 2020 Homeland Security Grant Program –Notice of Funding Opportunity; ODP WMD Training Course Catalogue; and DOJ Office for Civil Rights.

Standardized Emergency Management System (SEMS)
requirements as stated in the California Emergency Services Act, Government Code Chapter 7 of Division 1 of Title 2, § 8607.1(e) and CCR Title 19, §§ 2445-2448.

Provisions of 44 CFR applicable to grants and cooperative agreements, including Part 18, Administrative Review Procedures; Part 20, Criminal Justice Information Systems; Part 22, Confidentiality of Identifiable Research and Statistical Information; Part 23, Criminal Intelligence Systems Operating Policies; Part 30, Intergovernmental Review of Department of Justice Programs and Activities; Part 35, Nondiscrimination on the Basis of Disability in State and Local Government Services; Part 38, Equal Treatment of Faith-based Organizations; Part 42, Nondiscrimination/Equal employment Opportunities Policies and Procedures; Part 61, Procedures for Implementing the National Environmental Policy Act; Part 63, Floodplain Management and Wetland Protection
Procedures; Part 64, Floodplain Management and Wetland
Protection Procedures; Federal laws or regulations applicable to federal Assistance Programs; Part 69, New Restrictions on Lobbying; Part 70, Uniform Administrative Requirements for Grants and Cooperative Agreements (including sub-awards) with Institutions of Higher Learning, Hospitals and other Non-Profit Organizations; and Part 83, Government- Wide Requirements for a Drug Free
Workplace (grants).
17 2. Travel Expenses
SUB-RECIPIENT as provided herein may be compensated for SUBRECIPIENT’S reasonable travel expenses incurred in the performance of this Agreement, to include travel and per diem, unless otherwise expressed. Travel including in-State and out-ofState travel shall not be reimbursed without prior written authorization from the UASI Grant Office.

SUB-RECIPIENT’S travel and per diem reimbursement costs shall be reimbursed based on the SUB-RECIPIENT’S travel policies and procedures. If SUB-RECIPIENT does not have established travel policies and procedures, SUB-RECIPIENT‘S reimbursement rates shall not exceed the amounts established under 5 U.S.C 5701-11, (“Travel and Subsistence Expenses; Mileage
Allowances”), or by the Administrator of General Services, or by the President (or his or her designee) pursuant to any provisions of such subchapter must apply to travel under federal awards (48 CFR 31.205-46(a)).

3. Noncompliance
SUB-RECIPIENT understands that failure to comply with any of the above assurances may result in suspension, termination or reduction of grant funds, and repayment by SUB-RECIPIENT to CITY of any unlawful expenditures.
§413. Federal, State and Local Taxes
Federal, State and local taxes shall be the responsibility of SUB-RECIPIENT as an independent party and not as a CITY employee.
§414. Inventions, Patents and Copyrights
A. Reporting Procedure for Inventions
If any project produces any invention or discovery (Invention) patentable or otherwise under title 35 of the U.S. Code, including, without limitation, processes and business methods made in the course of work under this Agreement, the SUB-RECIPIENT shall report the fact and disclose the Invention promptly and fully to the CITY. The CITY shall report the fact and disclose the Invention to the Grantor. Unless there is a prior agreement between the CITY and the Grantor, the Grantor shall determine whether to seek protection on the Invention. The Grantor shall determine how the rights in the Invention, including rights under any patent issued thereon, will be allocated and administered in order to protect the public interest consistent with the policy (“Policy”) embodied in the Federal Acquisition Regulations System, which is based on Ch. 18 of title 35 U.S.C. Sections 200, et seq. (Pub. L. 95-517, Pub. L. 98-620, 37 CFR part 401); Presidential Memorandum 18 on Government Patent Policy to the Heads of the Executive Departments and Agencies, dated 2/18/1983); and Executive Order 12591, 4/10/87, 52 FR 13414, 3 CFR, 1987 Comp., p. 220 (as amended by Executive Order 12618, 12/22/87, 52 FR 48661, 3 CFR, 1987 Comp., p. 262). SUB-RECIPIENT hereby agrees to be bound by the Policy, and will contractually require its personnel to be bound by the Policy.

B. Rights to Use Inventions
CITY shall have an unencumbered right, and a non-exclusive, irrevocable, royalty- free license, to use, manufacture, improve upon, and allow others to do so for all government purposes, any Invention developed under this Agreement.

C. Copyright Policy

1. Unless otherwise provided by the terms of the Grantor or of this Agreement, when copyrightable material (“Material”) is developed under this Agreement, the author or the CITY, at the CITY’S discretion, may copyright the Material. If the CITY declines to copyright the Material, the CITY shall have an unencumbered right, and a non-exclusive, irrevocable, royalty- free license, to use, manufacture, improve upon, and allow others to do so for all government purposes, any Material developed under this Agreement.

2. The Grantor shall have an unencumbered right, and a non-exclusive, irrevocable, royalty-free license, to use, manufacture, improve upon, and allow others to do so for all government purposes, any Material developed under this Agreement or any Copyright purchased under this Agreement.

3. SUB-RECIPIENT shall comply with all applicable requirements in the Code of Federal Regulations related to copyrights and copyright policy.

D. Rights to Data
The Grantor and the CITY shall have unlimited rights or copyright license to any data first produced or delivered under this Agreement. “Unlimited rights” means the right to use, disclose, reproduce, prepare derivative works, distribute copies to the public, and perform and display publicly, or permit others to do so; as required by 48 CFR 27.401. Where the data are not first produced under this Agreement or are published copyrighted data with the notice of 17 U.S.C.

Section 401 or 402, the Grantor acquires the data under a copyright license as set forth in 48 CFR 27.404(f)(2) instead of unlimited rights. (48 CFR 27.404(a)).

E. Obligations Binding on Subcontractors
SUB-RECIPIENT shall require all subcontractors to comply with the obligations of this section by incorporating the terms of this section into all subcontracts. 19 §415. Minority, Women, And Other Business Enterprise Outreach Program It is the policy of the CITY to provide minority business enterprises (MBEs), women business enterprises (WBEs) and all other business enterprises an equal opportunity to participate in the performance of all SUB-RECIPIENT contracts, including procurement, construction and personal services. This policy applies to all Contractors and Sub-Contractors.
20 V

DEFAULTS, SUSPENSION, TERMINATION, AND AMENDMENTS
§501. Defaults
Should SUB-RECIPIENT fail for any reason to comply with the contractual obligations of this Agreement within the time specified by this Agreement, the CITY reserves the right to terminate the Agreement, reserving all rights under state and federal law.
§502. Amendments
Any change in the terms of this Agreement, including changes in the services to be performed by SUB-RECIPIENT and any increase or decrease in the amount of compensation which are agreed to by the CITY and SUB-RECIPIENT shall be incorporated into this Agreement by a written amendment properly executed and signed by the person authorized to bind the parties thereto.

SUB-RECIPIENT agrees to comply with all future CITY directives, or any rules, amendments or requirements promulgated by the CITY affecting this Agreement.
21 VI

ENTIRE AGREEMENT
§601. Complete Agreement
This Agreement contains the full and complete Agreement between the two parties. Neither verbal agreement nor conversation with any officer or employee of either party shall affect or modify any of the terms and conditions of this Agreement.
§602. Number of Pages and Attachments
This Agreement is executed in three (3) duplicate originals, each of which is deemed to be an original. This Agreement includes twenty-two (22) pages and three (3) Exhibits which constitute the entire understanding and agreement of the parties.
22 IN WITNESS WHEREOF, the City and CITY OF CYPRESS have caused this Agreement to be executed by their duly authorized representatives on the date first set forth above.

ATTEST:

By:______________________________
CITY OF ANAHEIM, a municipal Corporation
of the State of California
By:_________________________________
Theresa Bass
Clerk of the Council
Jorge Cisneros
Chief of Police

SUB-RECIPIENT

CITY OF CYPRESS
DUNS No. 01-0680866
APPROVED AS TO FORM:

By:______________________________
Kristin Pelletier
Sr. Asst. City Attorney
By: ______________________________
Printed Name ______________________
Title
______________________________

APPROVED AS TO FORM
By:______________________________
Printed Name ______________________
Title
______________________________
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EXHIBIT A
California Governor’s Office of Emergency Services
FY2020 Grant Assurances
(All HSGP Applicants)
As the duly authorized representative of the Applicant, I hereby certify that the Applicant has the legal authority to apply for federal assistance and the institutional, managerial and financial capability (including funds sufficient to pay any non-federal share of project cost) to ensure proper planning, management, and completion of the project described in this application, within prescribed timelines.

I further acknowledge that the Applicant is responsible for reviewing and adhering to all requirements within the:
(a) Applicable Federal Regulations (see below);
(b) Federal Program Notice of Funding Opportunity (NOFO); (c) Federal Preparedness Grants Manual;
(d) California Supplement to the NOFO; and
(e) Federal and State Grant Program Guidelines.

Federal Regulations
Government cost principles, uniform administrative requirements, and audit requirements for federal grant programs are set forth in Title 2, Part 200 of the Code of Federal Regulations (C.F.R.). Updates are issued by the Office of Management and Budget (OMB) and can be found at http://www.whitehouse.gov/omb/.

State and federal grant award requirements are set forth below. The Applicant hereby agrees to comply with the following:

1. Proof of Authority
The Applicant will obtain proof of authority from the city council, governing board, or authorized body in support of this project. This written authorization must specify that the Applicant and the city council, governing board, or authorized body agree:
(a) To provide all matching funds required for the grant project and that any cash match will be appropriated as required;
(b) Any liability arising out of the performance of this agreement shall be the responsibility of the Applicant and the city council, governing board, or authorized body; (c) Grant funds shall not be used to supplant expenditures controlled by the city council, governing board, or authorized body;
(d) Applicant is authorized by the city council, governing board, or authorized body to apply for federal assistance, and the institutional, managerial and financial capability (including funds sufficient to pay the non-federal share of project cost, if any) to ensure proper planning, management and completion of the project described in this application; and
(e) Official executing this agreement is authorized by the Applicant.

This Proof of Authority must be maintained on file and readily available upon request.

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2. Period of Performance
The period of performance is specified in the Award. The Applicant is only authorized to perform allowable activities approved under the award, within the period of performance.

3. Lobbying and Political Activities
As required by Section 1352, Title 31 of the United States Code (U.S.C.), for persons entering into a contract, grant, loan, or cooperative agreement from an agency or requests or receives from an agency a commitment providing for the United States to insure or guarantee a loan, the Applicant certifies that:
(a) No federal appropriated funds have been paid or will be paid, by or on behalf of the undersigned, to any person for influencing or attempting to influence an officer or employee of an agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any federal grant, the making of any federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any federal contract, grant, loan, or cooperative agreement.
(b) If any funds other than federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this federal contract, grant, loan, or cooperative agreement, the undersigned shall complete and submit Standard Form-LLL, “Disclosure Form to Report Lobbying”, in accordance with its instructions. (c) The undersigned shall require that the language of this certification be included in the award documents for all subawards at all tiers (including subcontracts, subgrants, and contracts under grants, loans, and cooperative agreements) and that all subrecipients shall certify and disclose accordingly.

The Applicant will also comply with provisions of the Hatch Act (5 U.S.C. §§ 1501- 1508 and §§ 7324-7328) which limit the political activities of employees whose principal employment activities are funded in whole or in part with federal funds.

Finally, the Applicant agrees that federal funds will not be used, directly or indirectly, to support the enactment, repeal, modification or adoption of any law, regulation or policy without the express written approval from the California Governor’s Office of Emergency Services (Cal OES) or the federal awarding agency.

4. Debarment and Suspension
As required by Executive Orders 12549 and 12689, and 2 C.F.R. § 200.213 and codified in 2 C.F.R. Part 180, Debarment and Suspension, the Applicant will provide protection against waste, fraud, and abuse by debarring or suspending those persons deemed irresponsible in their dealings with the federal government. The Applicant certifies that it and its principals, recipients, or subrecipients:
(a) Are not presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from covered transactions by any federal department or agency; (b) Have not within a three-year period preceding this application been convicted of or had a civil judgment rendered against them for commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public (federal, state, or local) transaction or contract under a public transaction; violation of federal or state Initials ______
antitrust statutes or commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, or receiving stolen property; (c) Are not presently indicted for or otherwise criminally or civilly charged by a governmental entity (federal, state, or local) with commission of any of the offenses enumerated in paragraph (2)(b) of this certification; and (d) Have not within a three-year period preceding this application had one or more public transaction (federal, state, or local) terminated for cause or default.

Where the Applicant is unable to certify to any of the statements in this certification, he or she shall attach an explanation to this application.

5. Non-Discrimination and Equal Employment Opportunity
The Applicant will comply with all state and federal statutes relating to non-discrimination, including:
(a) Title VI of the Civil Rights Act of 1964 (Public Law (P.L.) 88-352 and 42 U.S.C. § 2000d et. seq.) which prohibits discrimination on the basis of race, color, or national origin and requires that recipients of federal financial assistance take reasonable steps to provide meaningful access to persons with limited English proficiency (LEP) to their programs and services;
(b) Title IX of the Education Amendments of 1972, (20 U.S.C. §§ 1681-1683, and 1685- 1686), which prohibits discrimination on the basis of sex in any federally funded educational program or activity;
(c) Section 504 of the Rehabilitation Act of 1973, (29 U.S.C. § 794), which prohibits discrimination against those with disabilities or access and functional needs; (d) Americans with Disabilities Act (ADA) of 1990 (42 U.S.C. §§ 12101- 12213), which prohibits discrimination on the basis of disability and requires buildings and structures be accessible to those with disabilities and access and functional needs; (e) Age Discrimination Act of 1975, (42 U.S.C. §§ 6101-6107), which prohibits discrimination on the basis of age;
(f) Public Health Service Act of 1912 (42 U.S.C. §§ 290 dd—2), relating to confidentiality of patient records regarding substance abuse treatment;
(g) Title VIII of the Civil Rights Act of 1968 (42 U.S.C. § 3601 et seq.), relating to nondiscrimination in the sale, rental or financing of housing as implemented by the Department of Housing and Urban Development at 24 C.F.R. Part100. The prohibition on disability discrimination includes the requirement that new multifamily housing with four or more dwelling units—i.e., the public and common use areas and individual apartment units (all units in buildings with elevators and ground-floor units in buildings without elevators)— be designed and constructed with certain accessible features (See 24 C.F.R. § 100.201);
(h) Executive Order 11246, which prohibits federal contractors and federally assisted construction contractors and subcontractors, who do over $10,000 in Government business in one year from discriminating in employment decisions on the basis of race, color, religion, sex, sexual orientation, gender identification or national origin; (i) Executive Order 11375, which bans discrimination on the basis of race, color, religion, sex, sexual orientation, gender identification, or national origin in hiring and employment in both the United States federal workforce and on the part of government contractors;
(j) California Public Contract Code § 10295.3, which prohibits discrimination based on domestic partnerships and those in same sex marriages;
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(k) DHS policy to ensure the equal treatment of faith-based organizations, under which all applicants and recipients must comply with equal treatment policies and requirements contained in 6 C.F.R. Part 19;
(l) California’s Fair Employment and Housing Act (FEHA) (California Government Code §§12940, 12945, 12945.2), as applicable. FEHA prohibits harassment and discrimination in employment because of ancestry, familial status, race, color, religious creed (including religious dress and grooming practices), sex (which includes pregnancy, childbirth, breastfeeding and medical conditions related to pregnancy, childbirth or breastfeeding), gender, gender identity, gender expression, sexual orientation, marital status, national origin, ancestry, mental and physical disability, genetic information, medical condition, age, pregnancy, denial of medical and family care leave, or pregnancy disability leave, military and veteran status, and/or retaliation for protesting illegal discrimination related to one of these categories, or for reporting patient abuse in tax supported institutions;
(m) Any other nondiscrimination provisions in the specific statute(s) under which application for federal assistance is being made; and
(n) The requirements of any other nondiscrimination statute(s) that may apply to this application.

6. Drug-Free Workplace
As required by the Drug-Free Workplace Act of 1988 (41 U.S.C. § 701 et seq.), the Applicant certifies that it will maintain a drug-free workplace and a drug-free awareness program as outlined in the Act.

7. Environmental Standards
The Applicant will comply with state and federal environmental standards, including:
(a) California Environmental Quality Act (CEQA) (California Public Resources Code §§ 21000- 21177), to include coordination with the city or county planning agency; (b) CEQA Guidelines (California Code of Regulations, Title 14, Division 6, Chapter 3, §§ 15000- 15387);
(c) Federal Clean Water Act (CWA) (33 U.S.C. § 1251 et seq.), which establishes the basic structure for regulating discharges of pollutants into the waters of the United States and regulating quality standards for surface waters; (d) Federal Clean Air Act of 1955 (42 U.S.C. § 7401) which regulates air emissions from stationary and mobile sources;
(e) Institution of environmental quality control measures under the National Environmental Policy Act (NEPA) of 1969 (P.L. 91-190); the Council on Environmental Quality Regulations for Implementing the Procedural Provisions of NEPA; and Executive Order 12898 which focuses on the environmental and human health effects of federal actions on minority and low-income populations with the goal of achieving environmental protection for all communities;
(f) Evaluation of flood hazards in floodplains in accordance with Executive Order 11988; (g) Executive Order 11514 which sets forth national environmental standards; (h) Executive Order 11738 instituted to assure that each federal agency empowered to enter into contracts for the procurement of goods, materials, or services and each federal agency empowered to extend federal assistance by way of grant, loan, or contract shall undertake such procurement and assistance activities in a manner that will result in effective enforcement of the Clean Air Act and the Federal Water Pollution Control Act Executive Order 11990 which requires preservation of wetlands; (i) The Safe Drinking Water Act of 1974, (P.L. 93-523); (j) The Endangered Species Act of 1973, (P.L. 93-205);
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(k) Assurance of project consistency with the approved state management program developed under the Coastal Zone Management Act of 1972 (16 U.S.C. §§1451 et seq.);
(l) Conformity of Federal Actions to State (Clear Air) Implementation Plans under Section 176(c) of the Clean Air Act of 1955, as amended (42 U.S.C. §§7401 et seq.); (m) Wild and Scenic Rivers Act of 1968 (16 U.S.C. § 1271 et seq.) related to protecting components or potential components of the national wild and scenic rivers system.

The Applicant shall not be: 1) in violation of any order or resolution promulgated by the State Air Resources Board or an air pollution district; 2) subject to a cease and desist order pursuant to § 13301 of the California Water Code for violation of waste discharge requirements or discharge prohibitions; or 3) determined to be in violation of federal law relating to air or water pollution.

8. Audits
For subrecipients expending $750,000 or more in federal grant funds annually, the Applicant will cause to be performed the required financial and compliance audits in accordance with the Single Audit Act Amendments of 1996 and Title 2 of the Code of Federal Regulations, Part 200, Subpart F Audit Requirements.

9. Access to Records
In accordance with 2 C.F.R. § 200.336, the Applicant will give the awarding agency, the Comptroller General of the United States and, if appropriate, the state, through any authorized representative, access to and the right to examine all records, books, papers, or documents related to the award. The Applicant will require any subrecipients, contractors, successors, transferees and assignees to acknowledge and agree to comply with this provision.

10. Conflict of Interest
The Applicant will establish safeguards to prohibit the Applicant’s employees from using their positions for a purpose that constitutes or presents the appearance of personal or organizational conflict of interest, or personal gain.

11. Financial Management
False Claims for Payment - The Applicant will comply with 31 U.S.C §§ 3729-3733 which sets forth that no subrecipient, recipient, or subrecipient shall submit a false claim for payment, reimbursement or advance.

12. Reporting - Accountability
The Applicant agrees to comply with applicable provisions of the Federal Funding Accountability and Transparency Act (FFATA) (P.L. 109-282), specifically (a) the reporting of subawards obligating $25,000 or more in federal funds and (b) executive compensation data for first-tier subawards. This includes the provisions of FFATA, which includes requirements for executive compensation, and also requirements implementing the Act for the non-federal entity at 2 C.F.R. Part 25 Financial Assistance Use of Universal Identifier and Central Contractor Registration and 2 C.F.R. Part 170 Reporting Subaward and Executive Compensation Information.

13. Whistleblower Protections
The Applicant also must comply with statutory requirements for whistleblower protections at 10 U.S.C. § 2409, 41 U.S.C. § 4712, and 10 U.S.C. § 2324, 41 U.S.C. § 4304 and § 4310.

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14. Human Trafficking
The Applicant will comply with the requirements of Section 106(g) of the Trafficking Victims Protection Act of 2000, as amended (22 U.S.C. § 7104) which prohibits grant award recipients or a subrecipient from: (1) engaging in trafficking in persons during the period of time that the award is in effect; (2) procuring a commercial sex act during the period of time that the award is in effect; (3) using forced labor in the performance of the award or subawards under the award.

15. Labor Standards
The Applicant will comply with the following federal labor standards:
(a) The Davis-Bacon Act (40 U.S.C. §§ 276a to 276a-7), as applicable, and the Copeland Act (40 U.S.C. § 3145 and 18 U.S.C. § 874) and the Contract Work Hours and Safety Standards Act (40 U.S.C. §§ 327-333), regarding labor standards for federally-assisted construction contracts or subcontracts, and
(b) The Federal Fair Labor Standards Act (29 U.S.C. § 201 et al.) as they apply to employees of institutes of higher learning (IHE), hospitals and other non-profit organizations.

16. Worker’s Compensation
The Applicant must comply with provisions which require every employer to be insured to protect workers who may be injured on the job at all times during the performance of the work of this Agreement, as per the workers compensation laws set forth in California Labor Code §§ 3700 et seq.

17. Property-Related
If applicable to the type of project funded by this federal award, the Applicant will:
(a) Comply with the requirements of Titles II and III of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (P.L. 91-646) which provide for fair and equitable treatment of persons displaced or whose property is acquired as a result of federal or federally-assisted programs. These requirements apply to all interests in real property acquired for project purposes regardless of federal participation in purchase;
(b) Comply with flood insurance purchase requirements of Section 102(a) of the Flood Disaster Protection Act of 1973 (P.L. 93-234) which requires subrecipients in a special flood hazard area to participate in the program and to purchase flood insurance if the total cost of insurable construction and acquisition is $10,000 or more; (c) Assist the awarding agency in assuring compliance with Section 106 of the (d) National Historic Preservation Act of 1966, as amended (16 U.S.C. § 470), Executive Order 11593 (identification and protection of historic properties), and the Archaeological and Historic Preservation Act of 1974 (16 U.S.C. §469a-1 et seq.); and (e) Comply with the Lead-Based Paint Poisoning Prevention Act (42 U.S.C. § 4831 and 24 CFR Part 35) which prohibits the use of lead-based paint in construction or rehabilitation of residence structures.

18. Certifications Applicable Only to Federally-Funded Construction Projects For all construction projects, the Applicant will:
(a) Not dispose of, modify the use of, or change the terms of the real property title or other interest in the site and facilities without permission and instructions from the awarding agency. Will record the federal awarding agency directives and will include a covenant Initials ______
in the title of real property acquired in whole or in part with federal assistance funds to assure nondiscrimination during the useful life of the project; (b) Comply with the requirements of the awarding agency with regard to the drafting, review and approval of construction plans and specifications; and (c) Provide and maintain competent and adequate engineering supervision at the construction site to ensure that the complete work conforms with the approved plans and specifications and will furnish progressive reports and such other information as may be required by the assistance awarding agency or State.

19. Use of Cellular Device While Driving is Prohibited
Applicants are required to comply with California Vehicle Code sections 23123 and 23123.5.

These laws prohibit driving motor vehicle while using an electronic wireless communications device to write, send, or read a text-based communication. Drivers are also prohibited from the use of a wireless telephone without hands-free listening and talking, unless to make an emergency call to 911, law enforcement, or similar services.

20. California Public Records Act and Freedom of Information Act The Applicant acknowledges that all information submitted in the course of applying for funding under this program, or provided in the course of an entity’s grant management activities that are under Federal control, is subject to the Freedom of Information Act (FOIA), 5 U.S.C. § 552, and the California Public Records Act, California Government Code section 6250 et seq. The Applicant should consider these laws and consult its own State and local laws and regulations regarding the release of information when reporting sensitive matters in the grant application, needs assessment, and strategic planning process.

HOMELAND SECURITY GRANT PROGRAM (HSGP) –

PROGRAM SPECIFIC ASSURANCES / CERTIFICATIONS

21. Acknowledgment of Federal Funding from DHS
All recipients must acknowledge their use of federal funding when issuing statements, press releases, requests for proposals, bid invitations, and other documents describing projects or programs funded in whole or in part with federal funds.

22. Activities Conducted Abroad
All recipients must ensure that project activities carried on outside the United States are coordinated as necessary with appropriate government authorities and that appropriate licenses, permits, or approvals are obtained.

23. Best Practices for Collection and Use of Personally Identifiable Information (PII) DHS defines personally identifiable information (PII) as any information that permits the identity of an individual to be directly or indirectly inferred, including any information that is linked or linkable to that individual. All recipients who collect PII are required to have a publically-available privacy policy that describes standards on the usage and maintenance of PII they collect. Recipients may also find the DHS Privacy Impact Assessments: Privacy Guidance and Privacy template a useful resource respectively.

24. Copyright
All recipients must affix the applicable copyright notices of 17 U.S.C. §§ 401 or 402 and an acknowledgement of U.S. Government sponsorship (including the award number) to any work first produced under federal financial assistance awards.

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25. Duplication of Benefits
Any cost allocable to a particular federal financial assistance award provided for in 2 C.F.R.

Part 200, Subpart E may not be charged to other federal financial assistance awards to overcome fund deficiencies, to avoid restrictions imposed by federal statutes, regulations, or federal financial assistance award terms and conditions, or for other reasons. However, these prohibitions would not preclude recipients from shifting costs that are allowable under two or more awards in accordance with existing federal statutes, regulations, or the federal financial assistance award terms and conditions.

26. Energy Policy and Conservation Act
All recipients must comply with the requirements of 42 U.S.C. § 6201 which contain policies relating to energy efficiency that are defined in the state energy conservation plan issued in compliance with this Act.

27. Federal Debt Status
All recipients are required to be non-delinquent in their repayment of any federal debt.

Examples of relevant debt include delinquent payroll and other taxes, audit disallowances, and benefit overpayments. See OMB Circular A-129.

28. Fly America Act of 1974
All recipients must comply with Preference for U.S. Flag Air Carriers: (air carriers holding certificates under 49 U.S.C. § 41102) for international air transportation of people and property to the extent that such service is available, in accordance with the International Air Transportation Fair Competitive Practices Act of 1974 (49 U.S.C. § 40118) and the interpretative guidelines issued by the Comptroller General of the United States in the March 31, 1981, amendment to Comptroller General Decision B- 138942.

29. Hotel and Motel Fire Safety Act of 1990
In accordance with Section 6 of the Hotel and Motel Fire Safety Act of 1990, all Applicants must ensure that all conference, meeting, convention, or training space funded in whole or in part with federal funds complies with the fire prevention and control guidelines of the Federal Fire Prevention and Control Act of 1974, as amended, 15 U.S.C. § 2225a.

30. Non-supplanting Requirement
All recipients who receive federal financial assistance awards made under programs that prohibit supplanting by law must ensure that federal funds do not replace (supplant) funds that have been budgeted for the same purpose through non- federal sources.

31. Patents and Intellectual Property Rights
Unless otherwise provided by law, recipients are subject to the Bayh-Dole Act, Pub. L. No. 96- 517, as amended, and codified in 35 U.S.C. § 200 et seq. All recipients are subject to the specific requirements governing the development, reporting, and disposition of rights to inventions and patents resulting from financial assistance awards located at 37 C.F.R. Part 401 and the standard patent rights clause located at 37 C.F.R. § 401.14.

32. SAFECOM
All recipients who receive federal financial assistance awards made under programs that provide emergency communication equipment and its related activities must comply with the SAFECOM Guidance for Emergency Communication Grants, including provisions on technical standards that ensure and enhance interoperable communications.

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33. Terrorist Financing
All recipients must comply with Executive Order 13224 and U.S. law that prohibit transactions with, and the provisions of resources and support to, individuals and organizations associated with terrorism. Recipients are legally responsible to ensure compliance with the Order and laws.

34. Reporting of Matters Related to Recipient Integrity and Performance If the total value of the recipient’s currently active grants, cooperative agreements, and procurement contracts from all federal assistance offices exceeds $10,000,000 for any period of time during the period of performance of this federal financial assistance award, you must comply with the requirements set forth in the government-wide Award Term and Condition for Recipient Integrity and Performance Matters located at 2 C.F.R. Part 200, Appendix XII, the full text of which is incorporated here by reference in the award terms and conditions.

35. USA Patriot Act of 2001
All recipients must comply with requirements of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act (USA PATRIOT Act), which amends 18 U.S.C. §§ 175–175c.

36. Use of DHS Seal, Logo, and Flags
All recipients must obtain permission from their DHS Financial Assistance Office, prior to using the DHS seal(s), logos, crests or reproductions of flags or likenesses of DHS agency officials, including use of the United States Coast Guard seal, logo, crests or reproductions of flags or likenesses of Coast Guard officials.

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IMPORTANT
The purpose of the assurance is to obtain federal and state financial assistance, including any and all federal and state grants, loans, reimbursement, contracts, etc. The Applicant recognizes and agrees that state financial assistance will be extended based on the representations made in this assurance. This assurance is binding on the Applicant, its successors, transferees, assignees, etc. Failure to comply with any of the above assurances may result in suspension, termination, or reduction of grant funds.

All appropriate documentation, as outlined above, must be maintained on file by the Applicant and available for Cal OES or public scrutiny upon request. Failure to comply with these requirements may result in suspension of payments under the grant or termination of the grant or both and the subrecipient may be ineligible for award of any future grants if the Cal OES determines that any of the following has occurred: (1) the recipient has made false certification, or (2) violates the certification by failing to carry out the requirements as noted above.

All of the language contained within this document must be included in the award documents for all subawards at all tiers. All recipients are bound by the Department of Homeland Security Standard Terms and Conditions 2020, Version 10.1, hereby incorporated by reference, which can be found at: https://www.dhs.gov/publication/fy15-dhs-standard-terms-and-conditions.

The undersigned represents that he/she is authorized to enter into this agreement for and on behalf of the Applicant.

Subrecipient:____________________________________________________________ Signature of Authorized Agent: ______________________________________________ Printed Name of Authorized Agent: __________________________________________ Title: ______________________________________ Date: ______________________

EXHIBIT B

CERTIFICATION REGARDING DEBARMENT, SUSPENSION AND OTHER

RESPONSIBILITY MATTERS
Applicants should refer to the regulations cited below to determine the certification to which they are required to attest. Applicants should also review the instructions for certification included in the regulations before completing this form. Signature of this form provides for compliance with certification requirements under the applicable CFR covering New Restrictions on Government-wide Debarment and Suspension (Nonprocurement). The certification shall be treated as a material representation of fact upon which reliance will be placed when the Agency determines to award the covered transaction or cooperative agreement.

As required by Executive Order 12549, Debarment and Suspension, and implemented under the applicable CFR, for prospective participants in covered transactions, as defined in the applicable CFR A. The applicant certifies that it and its principals:
(a) Are not presently debarred, suspended, proposed for debarment, declared ineligible, sentenced to a denial of Federal benefits by a State or Federal court, or voluntarily excluded from covered transactions by any Federal department or agency;
(b) Have not within a three-year period preceding this application been convicted of or had a civil judgment rendered against them for commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public (Federal, State, or local) transaction or contract under a public transaction; violation of Federal or State antitrust statutes or commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, or receiving stolen property;
(c) Are not presently indicted for or otherwise criminally or civilly charged by a government entity (Federal State or local) with commission of any of these offenses enumerated in paragraph (1) (b) of this certification; and
(d) Have not within a three-year period preceding this application had one or more public transactions (Federal, State or local) terminated for cause or default; and B. Where the applicant is unable to certify to any of the statements in this certification, he or she shall attach an explanation to this application.
_____________________________ Address:_____________________________ Authorized Agent Signature
_____________________________ ______________________________ Printed or Typed Name
______________________________ ______________________________ Title

INSTRUCTIONS FOR CERTIFICATION

1. By signing and submitting this document, the prospective recipient of Federal assistance funds is providing the certification as set out below.

2. The certification in this clause is a material representation of fact upon which reliance was placed when this transaction was entered into. If it is later determined that the prospective recipient of Federal assistance funds knowingly rendered an erroneous certification, in addition to other remedies available to the Federal Government, the department or agency with which this transaction originated may pursue available remedies, including suspension and/or debarment.

3. The prospective recipient of Federal assistance funds shall provide immediate written notice to the person to whom this agreement is entered, if at any time the prospective recipient of Federal assistance funds learns that its certification was erroneous, when submitted or has become erroneous by reason of changed circumstances.

4. The terms "covered transaction," "debarred," "suspended," "ineligible," "lower tier covered transaction," "participant," "person," "primary covered transaction," "principal," "proposal," and "voluntarily excluded," as used in this clause, have the meanings set out in the Definitions and Coverage sections of rules implementing Executive Order 12549.

5. The prospective recipient of Federal assistance funds agrees by submitting this proposal that, should the proposed covered transaction be entered into, it shall not knowingly enter into any lower tier covered transaction with a person who is debarred, suspended, declared ineligible, or voluntarily excluded from participation in this covered transaction, unless authorized by the department or agency with which this transaction originated.

6. The prospective recipient of Federal assistance funds further agrees by submitting this proposal that it will include the clause titled "Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion Lower Tier Covered Transactions," without modification, in all lower tier covered transactions and in all solicitations for lower tier covered transactions.

7. A participant in a covered transaction may rely upon a certification of a prospective participant in a lower tier covered transaction that it is not debarred, suspended, ineligible, or voluntarily excluded from the covered transaction, unless it knows that the certification is erroneous. A participant may decide the method and frequency by which it determines the eligibility of its principals. Each participant may, but is not required to, check the List of Parties Excluded from Procurement or Non Procurement Programs.

8. Nothing contained in the foregoing shall be construed to require establishment of a system of records in order to render in good faith the certification required by this clause. The knowledge and information of a participant is not required to exceed that which is normally possessed by a prudent person in the ordinary course of business dealings.

9. Except for transactions authorized under Paragraph 5 of these instructions, if a participant in a covered transaction knowingly enters into a lower tier covered transaction with a person who is suspended, debarred, ineligible, or voluntary excluded from participation in this transaction, in addition to other remedies available to the Federal Government, the department or agency with which this transaction originated may pursue available remedies, including suspension and/or debarment.

EXHIBIT C

CERTIFICATION REGARDING LOBBYING
Certification for Contracts, Grants, Loans and Cooperative Agreements The undersigned certifies, to the best of his or her knowledge and belief, that:

1. No Federal appropriated funds have been paid or will be paid, by or on behalf of the undersigned, to any person for influencing or attempting to influence an officer or employee of an agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan or cooperative agreement.

2. If any funds other than Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this Federal contract, grant, loan, or cooperative agreement, the undersigned shall complete and submit Standard Form LLL "Disclosure Form to Report Lobbying" in accordance with its instructions.

3. The undersigned shall require that the language of this certification be included in the award documents for all subawards at all tiers (including subcontracts, subgrants, and contracts under grants, loans, and cooperative agreements) and that all subrecipients shall certify and disclose accordingly.

4. This certification is a material representation of fact upon which reliance was placed when this transaction was made or entered into. Submission of this certification is a prerequisite for making or entering into this transaction imposed by Section 1352, Title 31, U.S. Code. Any person who fails to file the required certification shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure.

The Subrecipient, as identified below, certifies or affirms the truthfulness and accuracy of each statement of its certification and disclosure, if any. In addition, the Subrecipient understands and agrees that the provisions of 31 U.S.C. Chap. 38, Administrative Remedies for False Claims and Statements, apply to this certification and disclosure, if any.

AGREEMENT NUMBER: ________________

CONTRACTOR/BORROWER/AGENCY

NAME AND TITLE OF AUTHORIZED REPRESENTATIVE

SIGNATURE DATE
CITY OF CYPRESS
CITY COUNCIL REPORT
City Council Regular 6.

FROM: Matt Burton, Director of Finance and Administrative Services DATE: 01/10/2022
SUBJECT: Approve the Successor Agency's Recognized Obligation Payment Schedule for the Period of July 1, 2022 through June 30, 2023 (ROPS 22-23)

RECOMMENDATION
Adopt a Resolution approving the Recognized Obligation Payment Schedule for the period of July 1, 2022 through June 30, 2023 (ROPS 22-23) for the Successor Agency to the Dissolved Cypress Redevelopment Agency.

SUMMARY
In accordance with State law, the responsibilities of the Oversight Board to the Dissolved Cypress Redevelopment Agency were transitioned to the County Oversight Board. Prior to the County Oversight Board's consideration for approval, the Cypress Successor Agency must adopt the Recognized Obligation Payment Schedule for the period of July 1, 2022 to June 30, 2023 (ROPS 22-23).

All enforceable obligations of the Cypress Successor Agency were paid in full during FY 2019-20 and the State Department of Finance (DOF) has previously disallowed receiving Redevelopment Property Tax Trust Fund (RPTTF) amounts to pay the necessary administrative costs associated with the ongoing dissolution process. The DOF indicates they will continue to deny approval of RFTTF amounts in the future; therefore, no amounts are requested as part of ROPS 22-23 and the associated ROPS 22-23 filing is being initiated solely to meet State requirements.

DISCUSSION
On December 29, 2011, the California Supreme Court upheld Assembly Bill x1 26 (the Dissolution Act) and directed all redevelopment agencies in the State be dissolved effective February 1, 2012. Subsequent modifications to the dissolution process were enacted with the passage of Assembly Bill 1484 in 2012 and Senate Bill 107 in 2015.

In compliance with the Dissolution Act, the Cypress City Council elected to serve as the Successor Agency to the dissolved Cypress Redevelopment Agency with the responsibility of winding up its affairs and undertaking the administrative tasks required for the dissolution winding up its affairs and undertaking the administrative tasks required for the dissolution process. A provision of the amended dissolution legislation requires the annual adoption of a Recognized Obligation Payment Schedule (ROPS) by the Oversight Board. Effective in July 2018, State law transitioned the responsibilities of individual Successor Agency Oversight Boards to a single County Oversight Board. As a result of this change, the Successor Agency Board is required to approve the ROPS prior to submitting to the County Oversight Board for consideration.

All enforceable obligations of the Successor Agency were paid in full as of June 30, 2020 and, as required by State law, the Cypress Successor Agency initiated the dissolution process with the Orange County Auditor Controller (CAC) immediately thereafter. Due to the Successor Agency being party to a long-term receivable due in 2029, the dissolution process requires approval by several agencies, including the County Oversight Board, CAC, DOF and the Federal Department of Housing and Urban Development (HUD).

The Cypress Successor Agency is the first successor agency in Orange County to request dissolution and the County Oversight Board has been unable to provide guidance on how to effectively expedite the dissolution process. Despite the dissolution turning into a complicated and time-consuming process, the DOF disallowed Cypress' County Oversight Board approved ROPS 21-22 request to reimburse the Successor Agency for necessary administrative costs directly associated with the dissolution. The DOF indicated they will continue to disallow any such requests in the future; therefore, the ROPS 22-23 does not request any amounts for reimbursement.

The attached ROPS 22-23 schedules have been prepared, as required by the State, using an online spreadsheet template provided by the State of California Department of Finance (DOF). While the Successor Agency will continue to incur administrative costs, primarily personnel and legal costs associated with the dissolution, these costs will have to be paid by the City of Cypress' General Fund. Due to the lack of direction provided by the County Oversight Board, and the existence of the outstanding note receivable, it is unclear when the dissolution process will be finalized. It appears an annual ROPS (requesting zero reimbursements) will need to be filed annually until the note is paid in full in 2029 - unless the County Oversight Board can determine a method for dissolution which the CAC, DOF and HUD can agree to prior to that date.

In order to comply with the requirements and timelines of the redevelopment dissolution legislation and avoid financial penalties, staff recommends the Successor Agency Board adopt the attached Resolution approving the ROPS 22-23 for the period from July 1, 2022 through June 30, 2023 and authorize ROPS 22-23 be submitted to the County Oversight Board for approval at its meeting of January 25, 2022. Once approved by the County Oversight Board, staff will submit ROPS 22-23 to the DOF, the California State Controller, and the County Auditor-Controller by the February 1, 2022 deadline.

BUDGET IMPACT
No amounts are requested by the Successor Agency for reimbursement with ROPS 22-23, as the DOF has previously disallowed reimbursements to pay for necessary administrative costs associated with the dissolution process. Any future costs associated with the pending dissolution and the annual ROPS filings will have to be paid by the City's General Fund.

LEGAL REVIEW
The Successor Agency’s attorney has reviewed the report.

APPROVED BY: Peter Grant, City Manager
Attachments
Resolution - ROPS 22-23
Exhibit A - ROPS 22-23
SUCCESSOR AGENCY BOARD RESOLUTION NO.

A RESOLUTION OF THE SUCCESSOR AGENCY TO THE DISSOLVED CYPRESS

REDEVELOPMENT AGENCY APPROVING THE RECOGNIZED OBLIGATION PAYMENT SCHEDULE (ROPS 22-23) FOR THE PERIOD JULY 1, 2022 THROUGH JUNE 30, 2023
WHEREAS, as part of the 2011-2012 State budget bill, the California Legislature enacted and the Governor signed, a budget trailer bill, ABx1 26, requiring that each redevelopment agency be dissolved; and
WHEREAS, an action challenging the constitutionality of ABx1 26 was filed in the California Supreme Court and on December 29, 2011, the Court modified and upheld ABx1 26, thereby causing the dissolution of all redevelopment agencies in the State of California, including the Cypress Redevelopment Agency (“RDA”), as of February 1, 2012; and
WHEREAS, the City of Cypress, pursuant to the terms of ABx1 26, became the successor agency to the dissolved RDA (“Successor Agency”) with the responsibility to wind up the affairs of the dissolved RDA under the terms of ABx1 26; and WHEREAS, the Oversight Board to the Successor Agency to the dissolved Cypress Redevelopment Agency has been appointed pursuant to the provisions of Health & Safety Code Section 34179; and
WHEREAS, on June 27, 2012, the Legislature enacted and the Governor signed into law, to be effective immediately, Assembly Bill 1484 (“AB 1484”), which amended ABx1 26 and defined the Successor Agency as a separate public entity from the City; and WHEREAS, on September 22, 2015, the Legislature enacted and the Governor signed into law, to be effective immediately, Senate Bill 107 (“SB 107”), which further amended ABx1 26 and AB 1484; and
WHEREAS, ABx1 26 as amended by AB 1484 and SB 107 is hereinafter referred to as the “Amended Dissolution Act;” and
WHEREAS, effective July 1, 2018 responsibilities of the Oversight Board to the Successor Agency to the dissolved Cypress Redevelopment Agency have transitioned to the County Oversight Board; and
WHEREAS, prior to consideration for approval by the County Oversight Board, the Successor Agency Board is required to review and approve a Recognized Obligation Payment Schedule (ROPS 22-23) prepared by the Successor Agency covering the fiscal year from July 1, 2022 through June 30, 2023 that lists all enforceable obligations (if any) of the dissolved RDA as defined in the Amended Dissolution Act for the period, and for each twelve month period thereafter; and
WHEREAS, at its public meeting of January 10, 2022, the Successor Agency Board reviewed and considered the Recognized Obligation Payment Schedule (ROPS 22-23), attached to this Resolution and Staff Report submitted concurrently with this Resolution; and
WHEREAS, all legal prerequisites to the adoption of this Resolution have occurred.

NOW, THEREFORE, BE IT RESOLVED by the Successor Agency Board as follows:

SECTION 1. The Recitals set forth above are true and correct and incorporated herein by reference.

SECTION 2. The Successor Agency Board hereby approves the Recognized Obligation Payment Schedule (ROPS 22-23) for the period July 1, 2022 through June 30, -2-
2023, as set forth in Exhibit “A” to this Resolution and by this reference incorporated herein.

SECTION 3. The Board Secretary, or the Successor Agency Executive Director (as the person appointed by action of the Oversight Board at its meeting of March 20, 2012, to be the designated contact person to the Department of Finance), shall transmit the approved Recognized Obligation Payment Schedule to the County Oversight Board, Department of Finance, State Controller, and County Auditor-Controller in compliance with the requirements of the Amended Dissolution Act. The staff of the Successor Agency shall take such other and further actions and sign such other and further documents as appropriate to effectuate the intent of this Resolution and to implement the Recognized Obligation Payment Schedule approved hereby on behalf of the Successor Agency. The Successor Agency Board further authorizes and directs the Executive Director to make any technical modifications to the Recognized Obligation Payment Schedule as may be required by the County Oversight Board, Department of Finance, and/or State Controller, including any formatting or technical changes required by any of the foregoing bodies.

Any such modifications or changes shall not require re-approval by the Successor Agency Board.

SECTION 4. If any section, subsection, sentence, clause, or phrase of this Resolution is for any reason held by a court of competent jurisdiction to be invalid, such decision shall not affect the validity of the remaining portions of this Resolution. The Board hereby declares that it would have adopted this Resolution and each section, subsection, sentence, clause, or phrase thereof irrespective of the fact that any one or more section, subsection, sentence, clause, or phrase be declared invalid.

PASSED, APPROVED AND ADOPTED by the Successor Agency Board at a meeting held on the 10th day of January, 2022.
________________________________

CHAIR, SUCCESSOR AGENCY BOARD
ATTEST:
______________________________________

SECRETARY, SUCCESSOR AGENCY BOARD

STATE OF CALIFORNIA

COUNTY OF ORANGE ) SS

CITY OF CYPRESS )
I, ALISHA FARNELL, Secretary to the Successor Agency Board, do hereby certify that the foregoing Resolution was adopted at a regular meeting of the Successor Agency Board, held on the 10th day of January, 2022, by the following roll call vote:

AYES: BOARD MEMBERS:

NOES: BOARD MEMBERS:

ABSENT: BOARD MEMBERS:
______________________________________

SECRETARY, SUCCESSOR AGENCY BOARD
Recognized Obligation Payment Schedule (ROPS 22-23) - Summary Filed for the July 1, 2022 through June 30, 2023 Period Successor Agency: Cypress
County: Orange
Current Period Requested Funding for Enforceable
Obligations (ROPS Detail)
22-23A Total
(July -
December)
22-23B Total
(January -
June)
ROPS 22-23
Total
A Enforceable Obligations Funded as Follows (B+C+D) $ - $ - $ - B Bond Proceeds - - -
C Reserve Balance - - -
D Other Funds - - -
E Redevelopment Property Tax Trust Fund (RPTTF) (F+G) $ - $ - $ -

F RPTTF - - -
G Administrative RPTTF - - -
H Current Period Enforceable Obligations (A+E) $ - $ - $ - Certification of Oversight Board Chairman:

Name Title
Pursuant to Section 34177 (o) of the Health and Safety
code, I hereby certify that the above is a true and
accurate Recognized Obligation Payment Schedule for
the above named successor agency. /s/
Signature Date
Cypress
Recognized Obligation Payment Schedule (ROPS 22-23) - ROPS Detail July 1, 2022 through June 30, 2023

A B C D E F G H I J K L M N O P Q R S T U V W
Item
# Project Name Obligation Type
Agreement
Execution
Date
Agreement
Termination
Date
Payee Description Project
Area
Total
Outstanding
Obligation
Retired
ROPS
22-23
Total
ROPS 22-23A (Jul - Dec)
22-23A
Total
ROPS 22-23B (Jan - Jun)
22-23B
Total
Fund Sources Fund Sources
Bond
Proceeds
Reserve
Balance
Other
Funds RPTTF Admin RPTTF
Bond
Proceeds
Reserve
Balance
Other
Funds
RPTTF
Admin
RPTTF
$- $- $- $- $- $- $- $- $- $- $- $- $- $-
3 Employee
Costs
Admin
Costs
07/01/
2020
06/30/2021 City
Employees
Payroll costs for staff
engaged in
Redevelopment and
Successor Agency
activities for period
July 2020 to June
2022
All - Y $- - - - - - $- - - - - - $-
4 Legal
Services
Admin
Costs
07/01/
2020
06/30/2021 Rutan &
Tucker/
Aleshire &
Wynder/
Other
Legal Services for
the Successor
Agency
All - Y $- - - - - - $- - - - - - $-
6 Administrative/
Office
Supplies
Admin
Costs
07/01/
2020
06/30/2021 Various
Vendors
Telephone, postage,
printing/copying,
computer usage and
office supplies
associated with the
RDA and Successor
Agency
All - Y $- - - - - - $- - - - - - $-
7 Land Lease Admin
Costs
04/01/
2001
03/31/2021 OCTA Lease of Land/ ROW
for parking
Lincoln
Avenue
Project
Area
- Y $- - - - - - $- - - - - - $-
Cypress
Recognized Obligation Payment Schedule (ROPS 22-23) - Report of Cash Balances July 1, 2019 through June 30, 2020
(Report Amounts in Whole Dollars)
Pursuant to Health and Safety Code section 34177 (l), Redevelopment Property Tax Trust Fund (RPTTF) may be listed as a source of payment on the ROPS, but only to the extent no other funding source is available or when payment from property tax revenues is required by an enforceable obligation.

A B C D E F G H
ROPS 19-20 Cash Balances
(07/01/19 - 06/30/20)
Fund Sources
Comments
Bond Proceeds Reserve Balance Other Funds RPTTF
Bonds issued
on or before
12/31/10
Bonds issued
on or after
01/01/11
Prior ROPS
RPTTF and
Reserve
Balances retained
for future
period(s)
Rent, grants,
interest, etc.

Non-Admin
and Admin
1 Beginning Available Cash Balance (Actual 07/01/19)
RPTTF amount should exclude "A" period distribution
amount.
104,855 96,715
2 Revenue/Income (Actual 06/30/20)
RPTTF amount should tie to the ROPS 19-20 total
distribution from the County Auditor-Controller
40,622 1,864,505
3 Expenditures for ROPS 19-20 Enforceable Obligations
(Actual 06/30/20)
9,188 1,935,694
4 Retention of Available Cash Balance (Actual 06/30/20) RPTTF amount retained should only include the amounts
distributed as reserve for future period(s)
5 ROPS 19-20 RPTTF Prior Period Adjustment
RPTTF amount should tie to the Agency's ROPS 19-20 PPA
form submitted to the CAC
No entry required 25,526
6 Ending Actual Available Cash Balance (06/30/20)
C to F = (1 + 2 - 3 - 4), G = (1 + 2 - 3 - 4 - 5)
$- $- $- $136,289 $-
Cypress
Recognized Obligation Payment Schedule (ROPS 22-23) - Notes July 1, 2022 through June 30, 2023
Item # Notes/Comments
3 4
6 7
CITY OF CYPRESS
CITY COUNCIL REPORT
City Council Regular 7.

FROM: Matt Burton, Director of Finance and Administrative Services DATE: 01/10/2022
SUBJECT: Approve a Spending Plan for American Rescue Plan Act Allocations

RECOMMENDATION

Treasury Guidelines; and

3. Increase budgeted transfers out of the General Fund to the Infrastructure Fund by $1.2 million; and

4. Increase budgeted transfers out of the General Fund to the Employee Benefits Fund by $1.2 million; and

SUMMARY
The City Council held a workshop on November 22, 2021 to discuss spending options for the $11.7 million of one-time Coronavirus State and Local Fiscal Recovery Funds the City will receive as part of the American Rescue Plan Act (ARPA). The City Council provided direction at the workshop to develop a spending plan which utilizes the full allocation (to the extent eligible) to replace lost revenues and pay for general services as allowed by U.S.

Treasury guidelines.

The recommended ARPA spending plan creates additional one-time unrestricted and unassigned resources which can be invested in the community. Programs and projects consistent with the City's strategic plan and ARPA's intent, with a cost of nearly $14 million, were identified and discussed at the workshop. $2.4 million is recommended to be invested in accordance with the City's fiscal strategies, with the balance of the programs and projects considered as part of future annual budgets or considered individually by the City Council.

DISCUSSION
American Rescue Plan Act Overview
The American Rescue Plan Act (ARPA), a $1.9 trillion emergency stimulus spending bill developed in response to the COVID-19 pandemic, became law in March 2021. The ARPA includes $350 billion of Coronavirus State and Local Fiscal Recovery Funds of pandemic-related financial assistance for state and local governments, with $130 billion dedicated exclusively to local governments. ARPA funds are less restrictive than previous pandemic monies made available to local governments and are allocated to cities based on population. The City of Cypress will receive a total of $11,723,277 paid in two equal installments in 2021 and 2022.

ARPA amounts must be expended or committed (through the award of a contract) after March 3, 2021 but before December 31, 2024. Any committed amounts which remain unexpended at the end of 2024 are required to be fully expended by December 31, 2026.

Recipients must expend the funds in accordance with U.S. Department of Treasury guidelines and eligible expenditures must fall within one of the following categories:

Replace lost revenues (if recipient meets eligibility criteria) Supporting public health expenditures by responding to/mitigating the COVID-19 emergency
Providing premium pay to essential workers
Address negative economic impacts caused by the pandemic by supporting the community, including local businesses and non-profits
Investment in specific types of infrastructure (water, sewer, broadband) Recommended Spending Plan for Cypress
The spending category which allows ARPA monies to replace lost revenues and use for general services is the least restrictive option and yields the greatest flexibility in providing resources directly to the community. Determining if an agency has revenue losses involves a complicated formula which establishes pre-pandemic base year general revenues and extrapolates a revenue growth factor out to future periods. Aside from the specific exclusion of a handful of revenue sources identified in the guidelines, general revenues comprise all annual revenues of the City. If eligible losses are computed using the formula contained in the U.S. Treasury guidelines, there is no requirement to demonstrate the losses are a direct result of the pandemic. For 2020, Cypress was determined to have losses of nearly $4.6 million.

FY 2018-19
Base Year
Revenue
Annual
Growth
Factor
2020
Adjusted Base
Revenue
(A)
2020
Actual
Revenues
(B)
2020
Revenue
Loss
(A-B)
$50.6M 5.02% $54.5M $49.9M ($4.6M)
Additional annual losses are projected for 2021 through 2024 which, in total, are expected to far exceed Cypress' $11.7 million ARPA allocation. Therefore, it is recommended Cypress' full ARPA allocation be used to replace lost revenues and spent on general, eligible government services. Advantages of this recommended ARPA spending plan include:

Proceeds can pay for general government services, which includes regular operations.

Frees up unrestricted/discretionary resources for other purposes/opportunities.

Least administratively burdensome spending option.

The City Council has greater local control in determining how to use additional resources that are freed up, including project selection and establishing timelines.

The City Council determines program guidelines and tracking requirements, rather than the federal government, associated with the additional discretionary spending which can occur due to the availability of additional resources.

If it is subsequently determined cumulative revenue losses through 2024 will not exceed Cypress' $11.7 million ARPA allocation, future one-time programs will be adjusted to ensure they are eligible for ARPA funding in accordance with U.S. Treasury guidelines.

Use of One-Time Resources Resulting from Recommended ARPA Spending Plan The significance of being able to use revenue losses to pay for general government services, and free up discretionary resources for other purposes, cannot be understated. The City Council has the unique opportunity to invest in programs and projects using resources that otherwise would be unavailable due to paying for general services, resulting in the ability to create several programs/projects that would normally not be possible due to a lack of funding.

At the November 22 workshop, approximately $14 million of investment and expenditure recommendations were presented and discussed. These uses are consistent with the City's strategic plan goals and are designed to be consistent with the intent of ARPA, which prioritizes assisting the local government's recovery from the effects of the pandemic.

Program/Project Description Amount
Recover General Fund Pandemic Spending for:

Future Infrastructure and Facilities $ 1,200,000
Investment in Pension Trust 1,200,000
Maintain Infrastructure and Facilities:

Reclaimed Water Service to Arnold Cypress Park 4,500,000 Private Arterial Wall Rehabilitation 1,800,000
Electric Vehicle Charging Stations at City Facilities 500,000 Maintenance Yard Privacy Screening 350,000
Bicycle Master Plan 100,000
Myra Avenue Pump Station No. 1 Assessment 75,000
Maintain High-Quality and High-Value Services for
Community:

Additional Non-Profit Support 500,000
One-Time Employee Premium Pay 300,000
Information Technology Upgrades 65,000
Subsidy to Eligible Households to Offset Solid Waste
Cost Increases
50,000
Promote Economic Activity:

Additional Business Recovery and Support 1,000,000
Economic Development Program Staffing (Five
Years)
1,000,000
Drought Response Incentive Program 500,000
Business Parks Specific Plans Modernization 200,000
Welcome Back Special Event for Business Parks 25,000
Enhance and Maintain Public Safety:

Emergency Vehicle Traffic Signal Preemption 500,000
Update City Continuity Plan 50,000
Total $13,915,000
Recover General Fund Pandemic Spending
Approximately $2.4 million of General Fund monies were expended on unreimbursed pandemic-related response, which consisted of small business recovery grants, non-profit support, community meals programs, advocacy and other operating costs. These costs were funded with available General Fund unassigned fund balance reserves which would typically be invested in accordance with the City's fiscal strategies. These strategies provide that available reserves be evenly split between future infrastructure and facility improvements and investment in the City's pension trust. It is recommended $1.2 million be directed to each of these purposes.

Reclaimed Water Service to Arnold Cypress Park
Reclaimed water service provides an alternative to potable water for park irrigation and is not subject to restrictions during a state declared drought emergency. None of Cypress' parks are connected to reclaimed water lines and this project would connect Arnold Cypress Park to the City of Cerritos' water line that serves Forest Lawn.

Private Arterial Wall Rehabilitation
The project would assist with the rehabilitation of existing, privately-owned block walls along arterial streets that are 50+ years old and have fallen into disrepair. Items for improvement include peeling paint and structural instability.

Electric Vehicle Charging Stations at City Facilities
This project would install new electric vehicle charging stations at the Civic Center, Community Center and Senior Center. Currently, no vehicle charging stations are available at any city facility.

Maintenance Yard Privacy Screening
The Maintenance Yard is adjacent to residences. This project would install large privacy hedges/trees along the eastern boundary of the Yard to enhance the visual appearance and reduce noise.

Bicycle Master Plan
This project would identify improvements to the existing bicycle route system. The plan would be incorporated into upcoming development projects with the goal of increasing bicycle ridership and safety.

Myra Avenue Pump Station No. 1 Assessment
This evaluation and option analysis for the design and construction of the Myra Avenue Pump Station No. 1 is included in both the FY 2021-22 Capital Improvement Program and Budget with an ARPA funding source. It is recommended the funding source be reclassified to discretionary General Fund monies.

Additional Non-Profit Support
The City Council approved $300,000 of direct pandemic-related support to non-profits serving Cypress in January 2021. This allocation would set-aside an additional $500,000 for future support to local non-profits.

One-Time Employee Premium Pay
The City Council approved premium pay (ranging from $5,000 to $6,000 per employee) for non-represented employees and employee groups that negotiated new collective bargaining agreements in 2021. There is one group of employees that have not received any premium pay and that group's contract will expire in June 2022. It is recommended a similar amount per employee be earmarked and made available during the upcoming negotiations.

Information Technology Upgrades
A recent cybersecurity audit recommended $65,000 of enhancements to better protect the City's information technology systems against outside attack.

Subsidy to Eligible Households to Offset Solid Waste Contract Cost Increases Effective in 2022, State law requires all local agencies implement an organics recycling program which will significantly increase residential trash rates. This program would provide rebates to low-income households to offset a portion of the organic waste increases.

Additional Business Recovery and Support
In 2021, the City Council approved $1.25 million to assist local businesses impacted by the pandemic. The programs consisted of small business and home occupation resiliency grants, as well as building fee waivers for businesses. The response to these programs has been positive and funding remains available. However, it is recommended an additional $1 million be set-aside to fund additional business recovery efforts once the initial $1.25 million is expended.

Economic Development Program Staffing (Five Years)
The full-time position committed to Cypress economic development activities was eliminated over a decade ago in response to the financial challenges associated with the Great Recession and the dissolution of redevelopment agencies. Since that time, economic development efforts have largely been handled by the City Manager and through consultants. In order to enhance consistency and continuity, it is recommended the full-time position dedicated to economic development be restored. This funding would provide for the position for approximately five years.

Drought Response Incentive Program
The City's business parks were developed approximately 30 years ago and much of the landscaping does not meet current State water-usage requirements. The recommended program would provide incentives to install new, drought-tolerant landscaping which would meet State requirements and enhance the appearance of the business park properties.

Business Parks Specific Plans Modernization
The FY 2021-22 Budget includes $200,000 of ARPA funding to update and modernize the various business park specific plans which were adopted over 30 years ago. The revised plans will support efforts to attract and retain businesses and jobs, while also responding to market and land use pattern changes, including those brought on by pandemic. It is recommended the funding source be reclassified from ARPA to discretionary General Fund monies.

Welcome Back Special Event for Business Parks
The last two years have challenged the entire community and those that work for Cypress businesses. Once the pandemic is over, it is important to acknowledge and thank Cypress businesses for their efforts in continuing to serve the community during this period of uncertainty. This welcome back event would be organized by the Recreation and Park District, held in one of the business parks, and feature food trucks, live entertainment and other activities.

Emergency Vehicle Traffic Signal Preemption
Vehicle pre-emption devices at various intersections will allow emergency vehicles to have priority on-demand green lights when approaching intersections. $200,000 was included in the FY 2021-22 Capital Improvement Program and Budget with an ARPA funding source. $500,000 is recommended for this project and the initial ARPA funding source be reclassified to discretionary General Fund monies.

Update City Continuity Plan
The Cypress Police department, working with a federally-funded consultant, oversaw the creation of the City's Continuity Plan in 2012. The Continuity Plan is a comprehensive planning document meant to ensure City-wide operations continue during, and after, an emergency or disaster. The document is due for an update and needs to coordinate with the newly created Information Systems Disaster Recovery Plan.

As part of the workshop, the City Council determined Council Members should provide any alternative program/project recommendations to the City Manager by December 22 for consideration with the January 10 agenda report. One alternative program/project was submitted by Council Member Marquez and is attached. This alternative program is not recommended because the Council Member did not respond to a request for additional/clarifying information and the program is not consistent with the type of service or activity typically paid using City resources. Should the City Council determine to make changes/additions to the recommended projects/programs, another project/program discussed previously would have to be adjusted by an equal amount to stay within the $13.9 million earmarked for one-time, discretionary spending.

Since there are no time restrictions on when these investments must occur, the majority of the $13.9 million will be incorporated into future annual budgets, Seven-Year Capital Improvement Programs, and City Council meetings.

An informational webpage will be created in the coming weeks to provide the community an overview of the ARPA spending plan, along with a summary of the $13.9 million recommended for discretionary investment in the coming years.

BUDGET IMPACT
The recommended use of ARPA monies to replace lost revenues and spend on general services is expected to free up $11.7 million of unassigned fund balances in the City's General Fund over the next three years. These fund balance amounts are available at the City Council's discretion and nearly $4.7 million is eligible to be transferred to the General Fund in January 2022.

A portion ($2.4 million) of these unassigned General Fund fund balances are recommended for investment in future capital improvements and the pension trust. The remaining available unassigned fund balances will be earmarked for a variety of programs and projects which will be developed over the next several years. These new programs and projects will be incorporated into future budgets or considered individually for appropriation by the City Council at a later time.

The FY 2021-22 Budget includes $625,000 of program and project funding with ARPA monies and was prepared before it was determined the City was eligible to use the full ARPA allocation for revenue replacement. Therefore, it is recommended the $625,000 in budgeted transfers using ARPA monies be reduced and project funding for these items instead use discretionary General Fund amounts.

LEGAL REVIEW
None.

APPROVED BY: Peter Grant, City Manager
Attachments
Alternative Spending Plan Submitted by Council Member Marquez Peter,
You asked us if we had ideas for using the ARPA monies. Our youth have struggled throughout the pandemic and I think that the proposal below would help them in a myriad of ways via academic writing improvement and mental health. Sangeeta Swendson who teaches for our Parks and Recreation Programs sent this proposal to me. Please let me know what you think.

Sincerely,
Frances
Teen Intervention Writing Program
Write On!
Contact: Sangeeta Swendson

INTRODUCTION
Thank you for considering this proposal for a vital educational and personal intervention program for teens within our city. This document will elaborate on the specific program design, goals, and objectives of the proposed program.

First, I would like to introduce myself and my small business, Write On! My family and I have lived in Cypress for 22 years. For over nine years, my small business Write On! has provided encouraging and engaging writing classes privately and as a contract instructor for the city of Cypress, Parks and Recreation Department. These year-round writing programs and summer themed camps were also co-sponsored by the cities of Los Alamitos, Long Beach, and La Palma. For the past nine years, Write On! provided monthly classes that combined writing, ecology, marine science, and civic involvement. Parents were thrilled with the results, and kids loved attending. Our summer writing camps have had long waiting lists, and we have consistently obtained at least a nine out of ten on evaluations from parents and students. In addition, I have helped many teens from our city create highly competitive college essays with a collaborative writing process, and these teens have gained admission into some of the top universities. At Write On! We love working with children and teens from our city, and we continue to discover that writing is an incredible tool for engaging and transforming the teen spirit.

As the director and owner of Write On! I utilize my background and training both as a writing expert and as a therapist who has worked with kids and teens, particularly those who struggle in school or live with learning issues, adhd, or autism. My bachelor’s degree is from the University of California, Irvine in Comparative Literature, and my master’s degree is from UCLA’s School of Public Policy and Social Welfare. Before starting my own business, I worked for ten years as a therapist with kids, teens, and adults and saw firsthand how anxiety and depression affect learning outcomes and academic performance. With the current Covid pandemic, the struggles of our teens have increased and the academic performance for many has plummeted. I can use my training and experience to implement an intervention program which is effective and enjoyable for teens.

BACKGROUND, PROGRAM DESIGN, GOALS, & OBJECTIVES
Background Information & Current Need
Covid and the ensuing lockdowns have impacted the lives of kids, teens, and adults. Needless to say, meaningful interventions must continue to be made available particularly for teens who have often been at higher risk than the general population. Adolescent years are a formative time when peers and social networks become a priority, and teens find their place in the world through positive friendships and supportive relationships. When the ability to socialize and connect with others is taken away, teens experience negative developmental, educational, and relational consequences which can have long term effects unless we intervene.

During the pandemic, education was offered virtually, without the opportunity to learn with a hands-on, sensory approach. Some teens adapted to this new educational style while others fell far behind in their academic skills at a critical point in life. In addition, as educators, we have long realized that students’ levels of anxiety or depression affect their ability to learn, focus, and pay attention. Unfortunately, during the pandemic, the rates of teen depression and anxiety rose considerably as documented by several research studies. In designing an enriching, impactful academic program for teens, we must take into account all of these fundamental variables and address the multiple educational and developmental needs of adolescents.

Many academic tutorials and resources exist online, like Khan Academy, which can help students fill gaps in their math and science skills. However, learning how to write well, communicate effectively, and critically think through a variety of topics and prompts are skills best taught in-person and by someone who has appropriate training and experience in writing. Furthermore, the educational and personal benefits of expressing one’s thoughts and feelings through writing are now being recognized explicitly by experts. When teens can write and create meaningful stories about their life experiences and reflect on what they have learned or how they have changed, then they not only acquire valuable academic writing skills, but also they take charge of their personal life narratives. Research has also shown that writing about even painful challenges through the lens of gratitude can create healthier, more resilient teens.

Program Design
Write On! will provide multiple 8-week, intensive narrative writing sessions in small group format for 50-64 teens which focus on creating self-reflective stories about their experiences, challenges, and obstacles through the lens of gratitude, personal growth, and recognition of skill development. By creating personal narratives, teens will not only increase their writing skills and critical thinking abilities, but also they will connect with peers through positive interactions as they share stories and increase their sense of belonging to a community. Writing is a transformative tool for reducing depression and anxiety through personal storytelling. Stories have been a long-held human tradition and at times a necessity for the struggles of the human spirit, and they hold the power to help our teens make meaning out of their difficult pandemic experiences.

Program Goals
The proposed intervention program by Write On! will have the following program goals:

1. Increase teens’ academic skills, specifically in the area of writing and critical thinking, in order to prepare them for the academic challenges ahead such as writing their college essays and class assignments

2. Connect teens with each other in a supportive, encouraging environment in order to reduce isolation, depression, and anxiety

3. Create personal stories in the form of narrative writing with a choice of prompts that include reflecting on experiences, challenges, and obstacles through the lens of gratitude, personal growth, and recognition of skill development Program Objectives
The Write On! Teen Intervention Writing Program will be designed around the following measurable objectives:

1. Provide four 8-week writing sessions for teens, ages 13-18, in small group settings with 6-8 teens, separated by age groups

2. Write On! will serve a total of 50-64 teens throughout the year

3. Students will increase their writing skills in the area of narrative writing and grammar, as assessed by self-reporting of writing ability and academic confidence in this area

4. Program will connect teens with other peers through sharing of stories, working collaboratively, and creating a positive, encouraging group environment in order to reduce the level of isolation experienced by participants.

5. Through narrative writing and reflections, program will reduce self-reported levels of depression and anxiety

6. Pre and post evaluations will be conducted with participants to measure objectives three through five above, and this data will be analyzed to measure whether objectives have been met
Program Location
The program will require the city of Cypress to donate space at the Cypress Community Center during cold weather months for group meetings. During warmer months, groups can take place outdoors at locations that teens frequent, such as Starbucks or local parks
Program Dates
8-week sessions, serving 50-64 teens total:

Wednesdays, ages 13-15, 4-6 p.m, 6-8 teens in each group Session 1: Feb 2- March 30 (no meeting March 16)
Session 2: April 6-May 25
Session 3: June 8-July 27
Session 4: Sept 7-Oct 26
Saturdays, ages 16-18, 10-12 p.m., 6-8 teens in each group Session 1: Feb 5-March 26
Session 2: April 2-May 21
Session 3: June 11- July 30
Session 4: Sept 10- Oct 29

PROGRAM PERSONNEL
Director, Part-time employee, 25 hours/ week, $50 per hour, $5,000/month, total $40,000
● Must have a bachelor’s degree in writing or related field and a master’s degree in a similar field, business, communications, or public health ● Creates all curriculum materials and designs lesson plans for each session ● Conducts background research and creates training materials for important program concepts such as narrative writing, working with teens, and teaching concepts effectively
● Trains social media liaison about program goals, activities, and job responsibilities as well as public relations skills
● Conducts interviews, skills testing, reference checks, and background clearances in order to hire teachers, social media consultant, and support staff ● Creates training materials for teachers regarding program goals, objectives, teaching skills, positive discipline techniques, group behavior, and how to create encouraging and engaging teen interactions
● Conducts trainings for all employees regarding program implementation, interpersonal skills, positive behavior modification, and redirection techniques needed to work with teens while building a positive rapport ● Leads weekly teacher and staff meetings to discuss student progress and address any challenges. Promotes group cohesion and support. ● Designs pre and post program evaluation measures and assessment tool to measure student progress with program goals
● Will supervise instructors through weekly meetings and through regular visitation of classes to monitor quality and implementation of program design ● Will work closely with social media consultant and data analyst ● Will act as liaison with funding sources, submitting updates and information as needed
● Will monitor budgets, submit payroll, and maintain records for employee work hours
● Will comply with all city, state, and federal requirements ● Will maintain appropriate liability insurance, workers’ compensation insurance, payroll services and submissions to IRS
● Answers queries from enrolled families, potential clients, media, and resolves any issues which may arise between clients, staff, and other personnel Writing Instructors, two part-time employees, 12 hours/week, $30/hour, $2880/month, total $34,560
● Must have or be working towards a degree in English, Writing, Composition, Literary Analysis, or similar field at a four-year university ● Must have experience working with teens
● Must have experience teaching writing or tutoring
● Must present a pleasant demeanor and have skills to build rapport with teens ● Will set up classes and clean up after
● Will edit essays outside of class to provide grammar and content feedback, particularly feedback related to making meaningful interpretations of life events ● Will implement lesson plans and monitor student progress ● Will create positive group interactions between teens, encouraging constructive feedback and creating a safe environment for sharing stories Social Media Consultant, Contractor, $25/hour; 4 hours/week; $400/mo, Total: $3,200 ● Creates ads and promotes program on social media regularly to recruit teens each month
● Designs, maintains, and updates program website for parents to obtain more information
● Responds to inquiries on social media from teens and their families ● Attends events to take pictures and gather sample work with student consent ● Participates in all trainings regarding program goals and implementation as well as working with teens in an encouraging, engaging manner Data Analyst, Contractor, $35/hour, 30 total, $1,050
● Will assist director to design a data-based evaluation tool which can be used pre and post program to assess a student’s progress toward program goals ● Will track responses from each session’s participants and tabulate final results by creating charts that showcase changes for participants and for entire program based on objectives and goals
Other Costs
Payroll Services: $60/month
Liability Insurance: Write On! maintains liability insurance Workers’ Compensation Insurance: Write On! maintains workers’ compensation insurance
Fingerprinting: $500
Copies of training materials, curriculum, lesson plans, flyers, student handouts, pre and post evaluations, final reports etc: $800
Students’ Writing Supplies: $800
Snacks for Students: $400
Total Budget: $82,000
CITY OF CYPRESS
CITY COUNCIL REPORT
City Council Regular 8.

FROM: Douglas Dancs, Director of Public Works
DATE: 01/10/2022
SUBJECT: Award a Contract for Lexington Park Landscape Maintenance Services

RECOMMENDATION
Award an initial two year and four month contract to BrightView Landscape Services, Inc. for $214,849, with a contingency of $32,228, for Lexington Park Landscape Maintenance Services.

DISCUSSION
The construction of Lexington Park is near completion. The construction contract has a 90-day landscape establishment and maintenance period. After the period expires in early spring, Public Works will assume responsibility for landscape maintenance.

The maintenance contract includes mowing, renovating and fertilizing natural turf, providing synthetic turf maintenance and sanitization, striping natural turf multi-use sports fields, trimming and replacing plants and shrubs, checking and repairing the irrigation system and removing landscape and trash debris from walkways, planters and parking lots.

The contractor will also empty trash receptacles and clean benches, bleachers and picnic tables throughout the park.

Public Works held a mandatory pre-bid meeting last October and eight contractors were deemed eligible to submit a bid. The City received two bids prior to the submittal deadline and BrightView Landscape Services, Inc. was identified as the low bidder. Since this is a new type of facility, a contingency was included in the event additional essential services are identified. A summary of the project award information is attached. BrightView currently maintains the landscape for Lake Forest's large sports park in addition to working for multiple other agencies.

The initial term of the contract is two years and four months to coincide with the City's fiscal year and will run through June 30, 2024, with an option for up to three, one-year extensions.

BUDGET IMPACT
The estimated annual cost for this contract, including contingency, is $105,890. Sufficient The estimated annual cost for this contract, including contingency, is $105,890. Sufficient amounts are included in the District's budget to pay the costs for the remainder of the fiscal year and future budgets will incorporate the annual costs of the agreement.

LEGAL REVIEW
The City Attorney has reviewed and approved the contract to form.

APPROVED BY: Peter Grant, City Manager
Attachments
Award Information
Award Information – Lexington Park Landscape Maintenance Services Description: The project scope provides landscape maintenance services at Lexington Park.

Project Location: Lexington Park
Bid Opening Date: November 3, 2021
Contract Working Days: Initial term not to exceed two (2) calendar years and four (4) months, with the City’s sole discretion to extend the initial term for three (3) extended terms of one (1) additional calendar year each. No increases, including Consumer Price Index increases shall be sought by the Contractor or allowed by the City during the maximum term length of five (5) years and four (4) months.

Bidders Annual Bid
Amount
Contingency
(15%)
Total Annual
Cost

1. BrightView Landscape Services $ 92,078 $ 13,812 $ 105,890

2. S.C. Yamamoto Landscape Services $ 216,230 $ 32,435 $ 248,665 Apparent Low Bidder: BrightView Landscape Services, Inc., Santa Ana – Annual Bid Amount $92,078; Contingency $13,812; Total Annual Cost $105,890 Qualified to Perform Work: Yes, staff confirmed bid was responsive.

Contractor’s License Registration with DIR
Valid at Time of Award: Yes Contractor: Yes
Valid at Time of Bid: Yes Sub-Contractor: N/A
Experience: The apparent low bidder has performed this type of work for multiple government agencies in Southern California, including Lake Forest, Cerritos, Costa Mesa and La Mirada.

CITY OF CYPRESS
CITY COUNCIL REPORT
City Council Regular 9.

FROM: Matt Burton, Director of Finance and Administrative Services DATE: 01/10/2022
SUBJECT: Receive and File the Annual Comprehensive Financial Report for the Fiscal Year Ended June 30, 2021

RECOMMENDATION
Receive and file the Annual Comprehensive Financial Report for the Fiscal Year Ended June 30, 2021.

SUMMARY
The Director of Finance is required to annually submit a complete financial statement and report to the City Council. Additionally, the State requires all California cities undergo an annual audit. Attached is the City's Annual Comprehensive Financial Report (ACFR) for the Fiscal Year ended June 30, 2021. The Basic Financial Statements contained in the ACFR have been audited by the firm of Lance, Soll and Lunghard, LLP. Based on the results of this audit, the City has received an unqualified, or “clean”, opinion.

DISCUSSION
The ACFR is comprised of three major sections: Introductory, Financial, and Statistical. Each of these sections contains required information in a prescribed format.

The Introductory Section contains a transmittal letter, a Directory of City Officials, and an Organizational Chart.

The Financial Section incorporates critical information on the financial condition of the City and includes all the information in the ACFR which is part of the scope of the audit, as well as required supplementary information and supplemental schedules. The Financial Section includes the basic financial statements, note disclosures and a management discussion and analysis (MD&A) narrative. The basic financial statements contain two types of statements: the government-wide financial statements and the fund financial statements. The government-wide financial statements present a broad overview of the City’s financial information on a full accrual basis, similar to the private sector, which provides a long-term perspective of the City's finances. The fund financial statements are presented on a modified accrual basis focusing on a short-term view of the City’s current and available financial resources. When both sets of financial statements are reviewed in conjunction with the other information presented in the statements are reviewed in conjunction with the other information presented in the Financial Section (note disclosures and the MD&A), the reader of the ACFR should be able to gain a thorough and complete picture of the City’s financial condition.

The Statistical Section includes a variety of financial and demographic information related to financial trends, revenue and debt capacity, and operating and economic data. The contents of the Statistical Section are intended to provide the reader with additional analysis to help in the understanding of the overall financial health of the City.

The audit process also includes a Report on Internal Control Over Financial Reporting and on Compliance and Other Matters, found at the end of the ACFR. No material weaknesses in internal controls were identified by the auditors.

The City has received national recognition for the past 35 years for its ACFR by receiving a "Certificate of Achievement of Excellence in Financial Reporting” from the Government Finance Officers Association of the United States and Canada (GFOA). The current year’s ACFR has been submitted to the GFOA for FY 2020-21 award consideration.

BUDGET IMPACT
City staff prepares the ACFR and sufficient appropriations are included in the budget to pay for the cost of the annual audit.

LEGAL REVIEW
None required.

APPROVED BY: Peter Grant, City Manager
Attachments
Annual Comprehensive Financial Report for the Fiscal Year Ended June 30, 2021 For the Fiscal Year
Ended June 30, 2021
City of Cypress
California
ANNUAL

COMPREHENSIVE

FINANCIAL
REPORT
Prepared by the
Department of Finance &
Administrative Services
ANNUAL

COMPREHENSIVE

FINANCIAL
REPORT
For the Fiscal Year
Ended June 30, 2021

CITY OF CYPRESS
Comprehensive Annual Financial Report
Year ended June 30, 2021
Table of Contents

INTRODUCTORY SECTION
Letter of Transmittal 8
Directory of City Officials 14
Organizational Chart 15
GFOA Certificate of Achievement for Excellence in Financial Reporting 16

FINANCIAL SECTION
Independent Auditors’ Report 18
Management’s Discussion and Analysis 21
Basic Financial Statements
Government-wide Financial Statements:

Statement of Net Position 49
Statement of Activities and Changes in Net Position 50
Fund Financial Statements:

Balance Sheet – Governmental Funds 51
Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position 53
Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds 54
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 56 Statement of Net Position – Proprietary Funds 57
Statement of Revenues, Expenses and Changes in Net Position - Proprietary Funds 58
Statement of Cash Flows - Proprietary Funds 59
Statement of Fiduciary Net Position – Fiduciary Funds 60 Statement of Changes in Fiduciary Net Position – Fiduciary Funds 61 Notes to Basic Financial Statements 62
Required Supplementary Information
Budgets and Budgetary Accounting 110
Budgetary Comparison Schedule (Budgetary Basis), General Fund 111 Budgetary Comparison Schedule (Budgetary Basis), Recreation and Park District Special Revenue Fund 112
Budgetary Comparison Schedule (Budgetary Basis), Streets Special Revenue Fund 113 California Public Employees’ Retirement Systems (CalPERS) 114 Terminated Orange County Employees Retirement System Plan (OCERS) 122 Post-Employment Health Care Benefits 124
3 CITY OF CYPRESS
Comprehensive Annual Financial Report
Year ended June 30, 2021
Table of Contents, Continued

FINANCIAL SECTION (CONTINUED)
Supplemental Schedules
Combining and Individual Fund Financial Statements and Schedules:

Other Major Governmental Funds
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual – City Capital Projects Fund 127
Nonmajor Governmental Funds
Combining Balance Sheet 129
Combining Statement of Revenues, Expenditures and Changes in Fund Balances 131 Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual – Pandemic Response Special Revenue Fund 133 Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual – Local Drainage Special Revenue Fund 134 Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual – Stanton Channel Maintenance District Special Revenue Fund 135
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual – Lighting District Special Revenue Fund 136 Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual – Cable TV PEG Grant Special Revenue Fund 137 Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual – AB 2766 Special Revenue Fund 138
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual – Traffic Safety Special Revenue Fund 139 Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual – Supplemental Law Enforcement Special Revenue Fund 140
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual – Narcotics Asset Seizure Special Revenue Fund 141 Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual – Low and Moderate Housing Assets Special Revenue Fund 142
4 CITY OF CYPRESS
Comprehensive Annual Financial Report
Year ended June 30, 2021
Table of Contents, Continued

FINANCIAL SECTION (CONTINUED)
Combining and Individual Fund Financial Statements and Schedules (Continued):

Internal Service Funds
Combining Statement of Net Position 144
Combing Statement of Revenues, Expenses and Changes in
Net Position 146
Combining Statement of Cash Flows 148
Fiduciary Funds
Combining Statement of Fiducial Net Position – Custodial Funds 151 Combining Statement of Changes in Fiduciary Net Position – Custodial Funds 152

STATISTICAL SECTION
Statistical Section Index 154
Financial Trends
Schedule 1 - Net Position by Component 155
Schedule 2 - Changes in Net Position 157
Schedule 3 - Fund Balances – Governmental Funds 159
Schedule 4 - Changes in Fund Balances – Governmental Funds 161 Revenue Capacity
Schedule 5 - Assessed Value and Estimated Actual Value of Taxable Property 163 Schedule 6 - Direct and Overlapping Property Tax Rates 164 Schedule 7 - Principal Property Tax Payers 165
Schedule 8 - Property Tax Levies and Collections 166
Debt Capacity
Schedule 9 - Ratios of Outstanding Debt by Types 167
Schedule 10 - Direct and Overlapping Governmental Activities Debt 168 Schedule 11 - Legal Debt Margin Information 169
Demographic and Economic Information
Schedule 12 - Demographic and Economic Statistics 171
Schedule 13 - Principal Employers 172
Operating Information
Schedule 14 - Full-time Equivalent City Government Employees by Function/Program 173 Schedule 15 - Operating Indicators by Function/Program 174 Schedule 16 - Capital Assets Statistics by Function/Program 175 5 CITY OF CYPRESS
Comprehensive Annual Financial Report
Year ended June 30, 2021
Table of Contents, Continued
INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER

FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER

MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS

PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING
STANDARDS 176
6 Introductory Section
7 December 20, 2021
To the City Manager, Honorable Mayor, Members of the City Council and Residents of the City of Cypress, California:

We are pleased to submit to you the Annual Comprehensive Financial Report (ACFR) of the City of Cypress for the fiscal year ended June 30, 2021. This report is published in accordance with local ordinance and state law requirements that financial statements be presented in conformity with accounting principles generally accepted in the United States of America and audited in accordance with auditing standards generally accepted in the United States of America by a firm of licensed certified public accountants.

This ACFR consists of management’s representations concerning the finances of the City of Cypress. Consequently, management assumes full responsibility for the completeness and reliability of all of the information presented in this report. To provide a reasonable basis for making these representations, management of the City of Cypress has established a comprehensive internal control framework designed both to protect the City’s assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the City of Cypress’ financial statements. Because the cost of internal controls should not outweigh their benefits, the City of Cypress’ comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. The report is presented in three sections: Introductory, Financial and Statistical.

While there have been no significant changes in the City’s fiscal policies that impact the current year financial statements, we urge readers of the report to pay particular attention to the overview and analysis presented in the Management’s Discussion and Analysis (MD&A) found in the financial section of the ACFR.

City policy requires its financial statements be audited by independent certified public accountants. The firm of Lance, Soll, and Lunghard, LLP has performed the audit for the fiscal year ended June 30, 2021. The goal of the independent audit was to provide reasonable assurance the financial statements of the City of Cypress are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor concluded there was a reasonable basis for rendering an unmodified opinion that the City of Cypress’ financial statements for fiscal year ended June 30, 2021 are fairly presented in conformity with accounting principles generally accepted in the United States of America. The Independent Auditors' Report is presented as the first component of the financial section of this report. 8 As a recipient of federal, state and county financial assistance, the City of Cypress is responsible for having an adequate internal control structure is in place to ensure compliance with applicable laws and regulations related to such programs. This internal control structure is subject to periodic evaluation by management. In years when over $750,000 is expended on Federal financial assistance programs, the City is required to undergo an annual single audit in conformity with the provisions of the Federal Single Audit Act Amendments of 1996 and the Office of Management and Budget Circular A-133 regulating Single Audits, and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States.

For the year ended June 30, 2021, more than $750,000 was expended on Federal financial assistance programs and a single audit was required. Information related to this single audit will be available in the City of Cypress’ separately issued Single Audit Report.

CITY OF CYPRESS PROFILE
The City of Cypress, incorporated in July 1956, is located in the northwestern part of Orange County, California, where two of the nation’s largest metropolitan areas, Los Angeles and Orange counties, meet. Cypress is primarily a residential community occupying 6.7 square miles of land and serving a population of 48,531. In addition to its residential communities, Cypress has an 800-acre business park that includes a diverse array of well-known companies. People are drawn to Cypress for its quality housing, business park, educational facilities, citizen-oriented social and recreational activities, and progressive City government.

Some of the major attractions in Cypress include: Los Alamitos Race Course, Forest Lawn Memorial Park, and Cypress Community College.

The City of Cypress is a charter city and operates under the Council-Manager form of government. Policymaking and legislative authority are vested in the City Council, which consists of a Mayor, Mayor Pro Tem, and three Council Members. The City Council, among other things, is responsible for the City’s ordinances, operating resolutions, adoption of the annual budget, appointing commissions and committees, and hiring the City Manager, the City Clerk and the City Attorney. The City Manager is responsible for implementing the policies, ordinances and directives of the City Council, for overseeing the day-to-day operations of the City, and for appointing the Directors of the City’s departments. The City Council is elected on a nonpartisan basis. Council Members are elected to four-year staggered terms and may serve a maximum of two terms. The Mayor and Mayor Pro Tem are selected annually by the Council Members.

The City of Cypress provides a full range of services, including police protection; the construction and maintenance of streets, public facilities and other infrastructure; sanitary sewer; building safety regulations and inspections; and recreational activities and cultural events. The City is a member of the Orange County Fire Authority which provides fire protection and emergency medical aid services. Independent special districts provide educational and library services, while private entities offer utility services to Cypress residents.
9 The annual budget serves as the foundation for the City of Cypress’ financial planning and control. The City operates on a fiscal year basis, beginning July 1 and ending June 30. The budget is prepared under the supervision of the City Manager and submitted to the City Council for deliberation and adoption prior to the beginning of the fiscal year.

The City follows these procedures in establishing the budgetary data reflected in the financial statements: After January 1, department directors prepare estimates for required appropriations for the fiscal year commencing the following July 1. The proposed budget includes estimated expenditures and forecasted revenues for the fiscal year. The data is presented to the City Manager for review. The operating budget includes a summary of the proposed expenditures and financial resources, as well as data for the preceding fiscal period. Prior to July 1, the budget is legally enacted through passage of an adopting resolution. Upon adoption by the City Council, the City maintains budgetary controls to ensure compliance with legal provisions embodied in the annual budget. The City Manager may make transfers of appropriations within a department if within the same fund. However, appropriation transfers between departments, funds or relating to personnel costs or capital purchases require approval by the City Council, as do any supplemental appropriations.

Budget to actual comparisons are provided in this report for each individual government fund for which an appropriated annual budget has been adopted. With the exception of the General fund, where budgetary control is maintained at the department level, budgetary control is maintained at the fund level. Additional budget information is presented in the Notes to the Basic Financial Statements and Required Supplementary Information Sections of the financial section of this report.

FACTORS AFFECTING FINANCIAL CONDITION
The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the specific environment within which the City of Cypress operates.

Local economy. Cypress is home to a wide range of businesses, particularly in the 800- acre Cypress Business Park, which has historically provided over 50% of the City’s General fund revenues. Major industries with headquarters or divisions located within the City’s boundaries include electronic equipment, managed healthcare, horseracing and flooring distribution. A variety of professional businesses, aerospace, hotels, and other retail businesses are also based in Cypress.

Over the last decade, the local economy in Orange County had experienced strong economic growth and job creation. While the arrival of the COVID-19 pandemic in March 2020 jolted economies across the nation and brought with it huge uncertainties, the local economy has proved resilient. The negative toll on Cypress has been far less than feared, but the long-term economic impacts of the pandemic, and associated recovery period, are still likely to last years in the Orange County region.

During the period between the great recession and the start of the pandemic, the City had focused on building up its reserves and limiting growth in operations in order to be in a 10 position to effectively handle periods of uncertainty. This strategy served Cypress well during the last 18 months as the City has been able to keep a balanced budget while maintaining service levels. Property taxes are expected to continue as a stable source of income, while sales tax revenues remain more volatile and unpredictable. Sales tax concerns have existed for well over a decade due to significant revenue declines (when compared to inflation), and were further exacerbated by two events triggered in 2020 which saw the departure of one of the City’s major generators and the start of the COVID-19 pandemic. City leaders continue to monitor revenue trends to best determine methods for strengthening the City’s economic base.

The losses incurred by the financial markets as part of the Great Recession continue to have a direct impact on the City, most significantly in the form of required annual pension costs associated with being a member of the California Public Employees’ Retirement System (CalPERS). The substantial decrease in the value of CalPERS assets during the financial crisis, and subsequent changes in actuarial assumptions and expected returns since that time, will be passed on to members of CalPERS in the form of higher payments for the foreseeable future. Cypress, like most other California cities, will at a minimum see its annual required contributions nearly double over a five-year period which began in FY 2017-

18. Despite being subjected to all the aforementioned issues outside the control of the City’s decision makers, the City has effectively managed its budget and used the positive results of past economic growth to build up fund balances and net position. It has been the City’s practice to set-aside a portion of these fund balances and net position for potential future budget shortfalls and contingencies, and to offset significant long-term liabilities. Nearly $16.9 million has been accumulated in the General fund for contingencies and budget stabilization at June 30, 2021. In addition, a pension trust was established in 2017 in response to pension and budget stabilization concerns, and over $17.9 million is invested in the trust at June 30, 2021. The pension trust provides a vehicle to restrict and invest monies for future pension obligations, while maintaining asset control at the local level.

The remaining fund balances and net position are available for use on non-operating expenditures and provide for the payment of any other long-term obligations. Assuming the City continues making sound budget decisions going forward, accumulated fund balance and net position amounts are at a level which should allow the City to withstand any shortterm negative economic impacts without affecting the primary service levels currently provided to its residents and businesses. However, the City’s long-term ability to maintain the current high-levels of service remain in a state of uncertainty due to economic contraction, sales tax volatility and rising pension costs.

Another financial challenge remains funding the necessary maintenance and improvements required for the City’s facilities and infrastructure systems. The seven-year funding plan is updated annually based on the most recent condition assessments of the various infrastructure systems and facilities. While significant progress has been made in the last 20 years by way of improvements and setting aside reserves, there are still a significant number of improvements necessary to improve aging city and park facilities and storm drainage infrastructure. The funding plans for these assets, as well as the other infrastructure components (sidewalks, trees, streets, traffic signals), indicates a need for 11 additional revenue sources to achieve the City’s goal of maintaining its infrastructure systems and facilities at high standards. One of the largest concerns continues to be the lack of a dedicated revenue source (outside the General fund) to pay for facilities and storm drainage improvements identified in the condition assessments. For the reasons discussed previously related to pandemic economic impacts, sales tax uncertainty and pension challenges, it continues to be necessary to identify viable future funding solutions (other than the General fund) in order to address the issues facing aging infrastructure systems and facilities.

Long-term financial planning. The City of Cypress seeks to assure a high quality of life for its residents and businesses. As such, strategic planning is utilized to establish major goals and objectives of the City which provide principal guidance for the budget established by the City Council. The three year goals established for 2019 through 2022 include the following (not in priority order):
 Maintain financial stability and promote economic activity.  Maintain high quality and high value services for the community.  Maintain infrastructure and facilities.
 Enhance and maintain public safety.
 Enhance recreation facilities and programs.

The City’s pursuit of these goals has resulted in establishing strategic objectives, which are incorporated into the annual budget. The large majority of these strategic objectives were completed during the past year and included hiring a new police chief, creating a neighborhood preservation pilot program, awarding contracts for the construction of Lexington Park and the Police Department modernization project, and a variety of pandemic-response initiatives.

The City of Cypress maintains a seven-year Capital Improvement Program to plan for capital and infrastructure needs, and evaluates its annual budget in coordination with longer-term revenue projections. It is the City’s policy to fund capital projects by accumulating and setting aside a portion of excess General fund revenues over General fund expenditures, for future infrastructure needs in the City’s Capital Projects fund. However, due to the pandemic uncertainties, sales tax concerns and higher required pension contributions discussed earlier, the ability to continue setting aside General fund amounts for future capital needs will become increasingly difficult over the next several years.

In addition, a five-year forecast for the General fund is included in the budget. This forecast provides a longer term analysis, which when viewed in conjunction with the current year budget, creates parameters for charting a prudent and sustainable financial course. Over the past year, the forecast has improved greatly but future challenges (both those that we are aware of and those that are currently unknown) make it difficult to create a reliable fiveyear forecast.

AWARDS AND ACKNOWLEDGEMENTS
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of 12 Cypress for its Annual Comprehensive Financial Report for the fiscal year ended June 30, 2020. This is the 35th consecutive year that the City has received this prestigious award.

The Certificate of Achievement is a national award that recognizes conformance with the highest standards for preparation of state and local government financial reports.

In order to receive a Certificate of Achievement, a governmental unit must publish an easily readable and efficiently organized ACFR. The report must satisfy both accounting principles generally accepted in the United States of America and applicable legal requirements.

A Certificate of Achievement is valid for a period of one year only. We believe our current report continues to conform to the Certificate of Achievement Program requirements, and we will be submitting it to GFOA to determine its eligibility for another certificate.

The preparation of this report could not have been accomplished without the dedicated service of the entire staff of the City’s Finance Division. The last two years have been full of challenges and unprecedented uncertainty, and I want to extend my thanks to all the Finance staff that assisted and contributed to the preparation of this report. Appreciation also must continue to be extended to the Cypress City Council for their ongoing commitment to maintaining the highest standards of professionalism in the management of the City’s finances. Their foresight to plan ahead and put the City in a positon to be financially prepared for unforeseen challenges such as the COVID-19 pandemic, has greatly benefited Cypress residents and businesses during the recovery period. I look forward to working with the City Manager and the City Council on ensuring the City’s short-term and long-term fiscal health remains strong so that current and future generations will be able to flourish.

Respectfully submitted,
Matt Burton
Director of Finance and Administrative Services
13 Directory of
City Officials
City of Cypress, California
For the FiscalYear Ended June 30, 2021
Legislative Body
Peter Grant
Matt Burton
Mark Lauderback
Doug Dancs
Alicia Velasco
Jeff Draper
Alisha Farnell
Staff Members
City Manager
Director of Finance & Admin. Services
Chief of Police
Director of Public Works
Director of Planning
Director of Rec. & Comm. Services
City Clerk
Jon Peat
Paulo Morales
Anne Hertz
Frances Marquez, PhD
Scott Minikus
Mayor
Mayor Pro-Tem
Council Member
Council Member
Council Member
14 City of Cypress

ORGANIZATIONAL CHART
City Clerk
Community
Development Police
Public Works
Recreation & Parks
Finance &
Administrative Services
City Manager
PEOPLE
of

CYPRESS
Commissions CITY COUNCIL City Attorney
15 Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Cypress
California
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2020
Executive Director/CEO
16 Financial Section
17 Lance, Soll & Lunghard, LLP 203N.BreaBlvd.,Suite 203 Brea,CA92821 Phone: 714.672.0022 INDEPENDENT AUDITORS’ REPORT
To the Honorable Mayor and Members of the City Council
City of Cypress, California
Report on the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities, the business-type activities, , each major fund, and the aggregate remaining fund information of City of Cypress, California, (the City) as of and for the year ended June 30, 2021, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Cypress, California, as of June 30, 2021, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

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

Responsibilities of Management 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; and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for twelve months beyond the date of the financial statements. 18 To the Honorable Mayor and Members of the City Council City of Cypress, California
Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with the GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if, there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

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

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

Other Reporting Responsibilities
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, the budgetary comparison schedules for the general fund and recreation and park district special revenue fund, and streets special revenue fund, the schedules of plan contributions, the schedules of proportionate share of the net pension liability, and the schedule of changes in total OPEB liability and related ratios be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. 19 To the Honorable Mayor and Members of the City Council City of Cypress, California
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The combining and individual nonmajor fund financial statements and schedules are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements.

The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements and schedules are fairly stated, in all material respects in relation to the basic financial statements as a whole.

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

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 20, 2021 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.

Brea, California
December 20, 2021
20 CITY OF CYPRESS
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2021
As management of the City of Cypress (City), we offer readers of the City’s financial statements this overview and analysis of the financial activities for the fiscal year ended June 30, 2021. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found in the introductory section of this report, and with the City’s financial statements, which follow this discussion.

Financial Highlights
 The assets and deferred outflows of resources of the City exceed its liabilities and deferred inflows of resources at the close of the fiscal year ended June 30, 2021 by $316,501,237 (net position). Of this amount, $88,119,499 (unrestricted net position) may be used to meet the government’s ongoing obligations to citizens and creditors.
 The City’s total net position increased by $3,018,940 during the fiscal year.  As of June 30, 2021, the City’s governmental funds reported combined ending fund balances of $133,359,964, a decrease of $2,984,608 in comparison with the prior year. A total of $1,060,000 is unassigned within the General fund and is available for spending at the government’s discretion, while a deficit fund balance of $226,304 is included in the nonmajor governmental funds (unassigned fund balance of the governmental funds).
 As of June 30, 2021, the total fund balance of the General fund was $25,192,662.

Of this total, $8.3 million has been committed by the City Council as part of a stabilization agreement to be used should General fund revenues decrease or expenditures increase unexpectedly due to unforeseen factors or emergencies. In addition to these commitments, a total of $15.7 million of the fund balance has been assigned – including for use on future capital improvements, investment in the City’s pension trust, and potential future budget shortfalls. While these assigned amounts are not legally restricted, it continues to be the City Council’s practice to set-aside and annually transfer surplus amounts (if available) both to the City’s Capital Project Fund for future infrastructure improvement projects as outlined in the City’s Seven-Year Capital Improvement Plan and to invest in the City’s pension trust.

Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements, which are comprised of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements (which includes the required supplementary information). This report also contains other supplementary information in addition to the basic financial statements themselves. 21 CITY OF CYPRESS
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2021
Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of the City’s finances, in a manner similar to a private-sector business.

The statement of net position presents information on all of the City’s assets, deferred outflows of resources, liabilities and deferred inflows of resources, with the difference between assets/deferred outflows and liabilities/deferred inflows reported as net position.

Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City of Cypress is improving or deteriorating.

The statement of activities presents how the government’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g. unpaid accrued interest).

Both of the government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all, or a significant portion, of their costs through user fees and charges (business-type activities). The governmental activities of the City include general government, community development, public safety, public works and recreation. The business-type activities of the City are related to the sanitary sewer system.

The government-wide financial statements include not only the City itself (known as the primary government), but also two legally separate entities: the Cypress Recreation and Park District (District), and the Cypress Recreation and Community Services Foundation (Foundation). The City is financially accountable for both the District and the Foundation, and the financial information for these blended component units is reported within the financial information presented for the primary government itself.

The government-wide financial statements can be found in the financial section of this report immediately following Management’s Discussion and Analysis (MD&A).

Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds.

Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable 22 CITY OF CYPRESS
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2021
resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financing requirements.

Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the governmentwide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both the governmental fund balance sheet and governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.

The City maintains various individual governmental funds. Information is presented separately in the governmental funds balance sheet and in the governmental funds statement of revenues, expenditures, and changes in fund balances for the General fund, the Recreation and Park District Special Revenue fund, the Streets Special Revenue fund and the City Capital Projects fund, all of which are considered to be major funds. Data from the other governmental funds are combined into a single, aggregated presentation.

Individual fund data for each of the nonmajor governmental funds is provided in the form of combining statements elsewhere in this report.

The City adopts an annual appropriated budget for each of its major funds. The required supplementary information section of the basic financial statements includes budgetary comparison schedules for the General fund, the Recreation and Park District Special Revenue fund and the Streets Special Revenue fund to demonstrate budgetary compliance with the annual budget. A budgetary comparison schedule has been provided elsewhere in this report for the other major governmental fund, the City Capital Projects fund.

The basic governmental fund financial statements can be found in the financial section of this report immediately following the government-wide financial statements.

As part of this annual discussion and analysis, management will discuss financial highlights of the City’s General fund, all other major funds, and any funds experiencing a significant change in fund balances or any other noteworthy activity.

Proprietary funds. The City maintains two different types of proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City uses an enterprise fund to account for its sanitary sewer system. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City’s various functions. The City uses internal service funds to account for its central services, the District’s central services, employee benefits, liability insurance and workers’ compensation insurance. 23 CITY OF CYPRESS
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2021
Because these services benefit governmental functions, they have been included in governmental activities within the government-wide financial statements.

Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the business-type activities of the Sewer fund, which is considered a major fund of the City. The internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of combining statements elsewhere in this report.

The basic proprietary fund financial statements can be found immediately following the basic governmental fund financial statements.

Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the governmentwide financial statement because the resources of those funds are not available to support the City’s own programs. The City’s two types of fiduciary funds are custodial funds and a private-purpose trust fund. The custodial funds are used for assets held in a custodial capacity and cannot be used to support the City’s own programs, the West Cities Police Communications Joint Powers Authority and the Business and Professional Assessment District. The private-purpose trust fund is used to account for the activities of the Successor Agency to the Cypress Redevelopment Agency (Successor Agency) which was established upon the dissolution of the Cypress Redevelopment Agency (Agency). The basic fiduciary fund financial statements can be found immediately following the basic proprietary fund financial statements.

Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the basic financial statements can be found in the financial section of this report immediately following the basic fiduciary fund financial statements.

Other information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information. The required supplementary information section includes the City’s progress in funding its obligation to provide pension benefits and post-retirement health care benefits to its employees, and the previously discussed budgetary comparison schedules for the General fund, the Recreation and Park District Special Revenue fund and the Streets Special Revenue fund. Required supplementary information can be found immediately following the notes to the basic financial statements.

The combining statements (referred to previously in connection with nonmajor governmental funds and the internal service funds) are presented immediately following the required supplementary information.
24 CITY OF CYPRESS
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2021
The blended component units (referred to earlier in connection with the government-wide financial statements), although legally separate, function at the discretion and direction of the City’s management. Their financial position and results of operations, therefore, have been included as an integral part of the primary government, and are presented in the fund financial statements.

Government-wide Financial Analysis
The government-wide financial statements provide long-term and short-term information about the City’s overall financial condition. This analysis addresses the financial statements of the City as a whole.

Net position of the City increased by just over $3.0 million (1.0 percent) to $316.5 million at June 30, 2021, of which $185.6 million is invested in capital assets such as land, buildings and improvements, equipment, and infrastructure. Of the remaining total, $42.8 million is restricted to specifically stipulated spending agreements originated by law, contract or other agreements with external parties. The remaining $88.1 million classified as unrestricted net position increased by $2.2 million (2.6 percent) from $85.9 million at June 30, 2020, and while subject to being designated for specific purposes as approved by the City Council and management, these amounts may be used to meet the City’s ongoing obligations. The increase in unrestricted net position is due to several factors, including tax revenues exceeding estimates and realizing budget savings associated with personnel vacancies.

Assets:

Current and other assets $ 193,239,901 $ 186,713,423 $ 5,363,075 $ 3,907,597 $ 198,602,976 $ 190,621,020 Capital assets 166,272,625 160,408,903 19,322,767 19,672,894 185,595,392 180,081,797 Total assets 359,512,526 347,122,326 24,685,842 23,580,491 384,198,368 370,702,817 Deferred Outflows of Resources:

Deferred outflows - pension & OPEB 15,161,001 15,511,309 - 15,161,001 - 15,511,309 Total deferred outflows 15,161,001 15,511,309 - 15,161,001 - 15,511,309 Liabilities:

Long-term liabilities outstanding 15,203,699 14,016,790 - 15,203,699 - 14,016,790 Net pension liability 53,272,251 48,981,312 - 53,272,251 - 48,981,312 Other liabilities 9,554,930 4,160,852 109,282 36,082 9,664,212 4,196,934 Total liabilities 78,030,880 67,158,954 109,282 36,082 78,140,162 67,195,036 Deferred Inflows of Resources:

Deferred inflows - pension & OPEB 4,717,970 5,536,793 - - 4,717,970 5,536,793 Total deferred outflows 4,717,970 5,536,793 - - 4,717,970 5,536,793 Net Position:

Net invested in capital assets 166,272,625 160,408,903 19,322,767 19,672,894 185,595,392 180,081,797 Restricted 37,532,553 43,597,947 5,253,793 3,871,515 42,786,346 47,469,462 Unrestricted 88,119,499 85,931,038 - 88,119,499 - 85,931,038 Total net position $ 291,924,677 $ 289,937,888 $ 24,576,560 $ 23,544,409 $ 316,501,237 $ 313,482,297 2021 2020
Governmental Activites
2021 2020
Business-type Activites
2021

CITY OF CYPRESS
Summary of Net Position
As of June 30, 2021 and 2020
2020
Total
25 CITY OF CYPRESS
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2021
The City’s investment in capital assets (less any related outstanding debt used to acquire those assets) is the largest portion of the City’s net position and represents 58.6 percent of total net position, which is a slight increase from the percentage of overall net position at the conclusion of the prior year. While the City uses these capital assets to provide services to citizens; these assets are not available for future spending.

The following revenue impacts contributed to the change in net position for governmental activities for the fiscal year ended June 30, 2021:
 The City’s program revenues totaled 23.1 percent of total revenues and decreased by 4.6 percent from the prior year. Charges for services (which include items such as planning and building fees, city services, and recreation user fees) experienced increases due to a rebound in activity declines (especially in development activity) brought on late last fiscal year by the COIVD-19 pandemic. Grants and contributions tend to fluctuate year-to-year based on availability and project timing.

This past year, operating grants and contributions decreased primarily due to the prior year, one-time availability of $1.7 million in federal CARES Act monies for use in responding to the pandemic and providing grants to local businesses.  The City’s general revenues represent 76.8 percent of total revenues. General revenues decreased by 5.5 percent from the prior year. Sales taxes, which represent 23.0 percent of total revenues and experienced ongoing declines due to the pandemic and the loss of a major generator in October 2020, were not as Revenues
Program Revenues:

Charges for services $ 3,719,781 $ 2,637,587 $ 1,861,974 $ 1,733,202 $ 5,581,755 $ 4,370,789 Operating grants and contributions 3,862,387 5,998,794 37 39 3,862,424 5,998,833 Capital grants and contributions 1,869,583 1,488,480 - - 1,869,583 1,488,480 General Revenues:

Sales tax 11,249,720 11,969,246 - - 11,249,720 11,969,246 Property taxes 18,720,345 18,532,454 30,499 30,076 18,750,844 18,562,530 Other taxes 5,221,855 5,655,368 - - 5,221,855 5,655,368 Other 2,282,935 3,476,313 27,924 67,624 2,310,859 3,543,937 Total Revenues 46,926,606 49,758,242 1,920,434 1,830,941 48,847,040 51,589,183 Expenses
General government 6,295,641 6,082,701 - - 6,295,641 6,082,701 Community development 2,100,332 1,915,912 - - 2,100,332 1,915,912 Public safety 19,428,392 19,357,512 - - 19,428,392 19,357,512 Public works 13,865,043 11,597,788 - - 13,865,043 11,597,788 Recreation 5,303,581 5,003,445 - - 5,303,581 5,003,445
Sewer - - 888,283 871,750 888,283 871,750
Total Expenses 46,992,989 43,957,358 888,283 871,750 47,881,272 44,829,108 Excess of revenues over expenses
before special item (66,383) 5,800,884 1,032,151 959,191 965,768 6,760,075 Special Item
Gain on sale of land held for resale 2,053,172 - - - 2,053,172 - Total Special Item 2,053,172 - - - 2,053,172 - Increase (Decrease) in Net Position 1,986,789 5,800,884 1,032,151 959,191 3,018,940 6,760,075 Net Position
Beginning Net Position 289,937,888 284,137,004 23,544,409 22,585,218 313,482,297 306,722,222 Ending Net Position $ 291,924,677 $ 289,937,888 $ 24,576,560 $ 23,544,409 $ 316,501,237 $ 313,482,297 2020
Total
2021 2020

CITY OF CYPRESS
Changes in Net Position
For the fiscal year ended June 30, 2021 and 2020
Business-type Activites
2021 2020
Governmental Activites
2021
26 CITY OF CYPRESS
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2021
negatively impacted during FY 2020-21 as initially feared. The resiliency of the economy, the various government stimulus packages and the positive impact of online sales all contributed to better than expected results. Property tax revenues, the City’s largest revenue source, continued to grow due to the strong real estate market and its impact on assessed values. Other general revenues experienced declines due to declines in the market interest rate earned on cash balances throughout the year which resulted in significantly lower interest earnings. In addition, interest revenues were further offset due to adjusting all investments to market value at June 30, 2021. This adjustment resulted in paper losses that will never be realized since the City’s practice is to hold all investments to maturity.

Transient occupancy taxes (TOT), which are classified as other taxes, are the revenue source most negatively impacted by the pandemic. Due to the lack of tourism and business travel throughout the last fiscal year, these TOT revenues remain far below pre-pandemic levels.

All revenues from governmental activities are summarized in the following graph.

Revenues by Source – Governmental Activities
The following revenue items contributed to the change in net position for business-type activities for the fiscal year ended June 30, 2021:
 Program revenues for the sewer system are the major revenue source for the City’s lone business-type activity. Charges for sewer services comprised 97 percent of total revenues and increased by 7.4 percent from the prior year. Since 27 CITY OF CYPRESS
MANAGEMENT’S DISCUSSION AND ANALYSIS
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sewer fees are directly tied to water consumption, any significant annual change can likely be attributed to precipitation levels experienced throughout the last year.

The current sewer fee collections represent a dedicated revenue source which provides full-funding for ongoing maintenance and annual capital improvements to the City’s sewer system.
 General revenues for business-type activities are largely limited to investment earnings on cash balances and a small amount of property tax that is allocated to the City and is restricted to use for sewer purposes.

All revenues from business-type activities are summarized in the following graph.

Revenues by Source – Business-type Activities
Total expenses for governmental activities increased by approximately $3.0 million for the fiscal year ended June 30, 2021, (6.9 percent), compared to the prior year.  General government expenses increased due to implementing several new pandemic response programs to assist local business, non-profit organizations and a hot meal program for eligible residents. These new programs committed over $2.1 million of new funding and are in addition to the $1.2 million business grant program established in the prior year which used federal CARES Act monies to assist local businesses impacted by the COVID-19 pandemic.  Community Development expenses increased as necessary contract plan check and inspection services for development activity was higher due to a larger volume of development activity occurring within the City, as well as contract costs 28 CITY OF CYPRESS
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JUNE 30, 2021
associated with state-mandated housing element updates which are required every eight years.
 Public safety (police) continues to account for the largest portion (41.3 percent) of total expenses related to governmental activities. Public safety expenses increased slightly from the prior year, and the increases are attributed to personnel cost increases related to the impacts of labor agreements with the Cypress Police Officers’ Association and the Cypress Police Management Association. The department continued to have several police officer vacancies throughout the year, which helped curtail the year over year increases.
 Public works expenses increased nearly $2.3 million and was caused by many factors, with the largest component (approximately $1.7 million) related to incurring higher costs for recurring street maintenance projects. These projects, which include roadway paving and curb and sidewalk maintenance, tend to fluctuate year to year based the scale and timing of projects. In addition to completing many new projects budgeted in FY 2020-21, several large-scale projects were delayed in Spring 2020 due to the pandemic and completed in the fiscal year ended June 30, 2021. Rising electricity costs for street and traffic signal lighting costs, higher water costs for irrigating parks, and personnel cost increases due to having a full-time Public Works Director for the first time in a decade, also contributed to the year over year increase in expenses.
 Recreation expenses increased 6.0 percent due to reinstituting many programs which had been abruptly halted in March 2020 due to the pandemic. This stoppage eliminated part-time staffing costs, payments for contract class instructors and decreased the need for some facility maintenance. While COVID-19 continues to impact recreation programming, alternative forms of programming have been developed which enabled operations to get back to some degree of normal in the fiscal year ended June 30, 2021.
 Total expenses for business-type activities increased $16,533 (1.9 percent).

Ongoing investments to improve the sewer system have occurred over the last several years, and the modest increase in expenses is largely attributable to incurring depreciation on recent capital improvements.

Financial Analysis of the Governmental Funds
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.

Governmental funds. The focus of the City’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information may be useful in assessing the City’s financing requirements and operating needs.
29 CITY OF CYPRESS
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As of the end of the current fiscal year, the City’s governmental funds reported total combined ending fund balances of $133,359,964, a decrease of $2,984,608 from the fund balances at June 30, 2020. The decrease in fund balances is largely the result of heavy investment in a variety of capital projects, including the construction of a new park and an extensive police department modernization.

Total fund balance is broken down into five categories – ranging from nonspendable to unassigned. Over $6.3 million of the City’s total fund balance at June 30, 2021 is classified as nonspendable and relates mostly to the $5.9 million of outstanding interfund advances between the District and the City Capital Projects Fund that were issued in the last year and will not be repaid for several years. Restricted fund balance amounts total $19.2 million and decreased by $8.6 million from the prior year and equal 14.4 percent of total fund balance. The large decline in restricted fund balance is due to increased capital expenditures on streets and facilities using non-discretionary sources, as well as the impacts to the District from the construction of Lexington Park and the new interfund advances discussed earlier. The restricted amounts at June 30, 2021 can only be used for specific purposes, with the major restrictions being limited for recreation uses, street maintenance and improvements and street lighting. Committed fund balance amounts total $21.1 million (15.8 percent) and increased by nearly $1.8 million in the past year.

The increase in committed fund balance is due to having more City Council approved contracts outstanding at the end of the fiscal year. These unexpended contract amounts tend to vary from year to year depending on the status of major capital projects (such as improvements to the City’s streets and facilities) at the end of the fiscal year, and the current year increase is largely attributed to the outstanding contract balances associated with the police department remodel and Lexington Park. An additional $86.2 million of fund balance is categorized as assigned. These assignments of fund balance are made by City management for specific purposes – with the large majority of the assignments being for future capital improvements, pension trust investment and potential future budget shortfalls. It continues to be the City’s strategy to set aside available resources in order to provide a funding mechanism to pay for future improvements to the City’s infrastructure and public facilities, as well as accumulating monies to offset unfunded pension liabilities. The remaining amount of fund balance is categorized as unassigned and is available in the General fund for any purpose the City Council deems appropriate.

Proprietary funds. The City’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. The City’s major proprietary fund is the Sewer enterprise fund. Net position of the Sewer fund at the end of the fiscal year ending June 30, 2021 totaled $24.6 million, which is just over $1.0 million higher than the prior year. The increase in net position is largely attributed to allocating resources for the ongoing investment in the sanitary sewer system through capital improvement projects.
30 CITY OF CYPRESS
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Major Fund Financial Highlights
General Fund
The General fund is the primary operating fund of the City. At June 30, 2021, the total fund balance of the General fund was $25,192,662 (compared to $23,043,179 at the beginning of the year). The fund balance of the General fund is composed of five different categories – nonspendable, restricted, committed, assigned and unassigned. The City continues to implement the practice of accumulating monies for future infrastructure improvements in the City Capital Projects fund through transfers out of the General fund, as well as setting aside monies to invest in the City’s pension trust. A total of $1.3 million was transferred out for future infrastructure needs, and an additional $150,000 for pension trust investment, during the fiscal year ended June 30, 2021. It is important to note the annual General Fund monies transferred to the City Capital Projects fund for the intended purpose of providing infrastructure improvements are available for other uses at the City Council’s discretion should the need arise.

As a measure of the General fund’s liquidity, it may be useful to compare the total of assigned and unassigned fund balances to total fund expenditures since assigned and unassigned amounts are essentially available for any purpose. Total assigned and unassigned fund balance represents 55.6 percent (up from 51.6 percent the previous year) of the total expenditures in the General fund. As mentioned, the largest component of assigned fund balance is for future capital infrastructure investments. Despite the City Council’s and management’s policy to actively set-aside monies for future infrastructure needs, the annual General fund amounts expected to be available for transfer to the City’s Capital Project fund will likely be insufficient to pay for all future capital needs due to projected expenditure growth outpacing projected revenue growth.

For the fiscal year ended June 30, 2021, cash and investments in the General fund totaled $26,599,861, an increase of $4,844,264 from the prior fiscal year. The increase was largely due to revenues exceeding budget and realizing personnel-related budget savings due to staffing vacancies throughout the year, as well as deferring transfers of prior year accumulations for capital projects and pension trust investments due to budget uncertainties associated with the pandemic. These deferred transfer amounts will be available for transfer in future years if budget deficits in the General fund brought on by revenue declines never materialize.
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Total General fund revenues for the fiscal year ended June 30, 2021 decreased by over $3.2 million from the prior year. Individual components of this change are highlighted as follows:
 Sales tax receipts, historically the largest revenue source of the General fund, decreased by nearly $675,000 from the prior year. The pandemic’s negative impact on sales tax revenue, combined with the loss of one of Cypress’ largest producers in October 2020, has resulted in declines but not as dramatic as initially feared.
 Annual property tax revenue continued to grow due to increases in the City’s secured property tax base resulting from the ongoing strength of the real estate market. The General fund also received over $5.1 million in property taxes in lieu of Motor Vehicle License Fees (MVLF), which represented an increase over the prior year.
 Other taxes were down due to experiencing a full-year of COVID-19 induced transient occupancy declines. The drop in these revenues was expected, as nonessential travel continued to be limited due to the pandemic.  Licenses and permit revenues, as well as charges for services, increased due to higher building development activity when compared to the prior year. These Revenues
Taxes:

Sales $ 11,579,445 $ 12,252,711 $ (673,266) Property 11,398,114 11,215,393 182,721 Other 5,568,782 5,976,206 (407,424)
Total taxes 28,546,341 29,444,310 (897,969)
Licenses and permits 884,938 628,630 256,308
Fines and forfeitures 257,141 191,122 66,019
From use of property (547,569) 1,428,560 (1,976,129)
From other agencies 240,412 2,086,190 (1,845,778)
Charges for services 3,481,808 2,536,320 945,488
Other 419,100 196,465 222,635
Total Revenues 33,282,171 36,511,597 (3,229,426)
Expenditures
General government 5,291,414 5,206,978 84,436
Community development 1,852,108 1,680,340 171,768
Public safety 17,222,083 17,035,531 186,552
Public works 5,869,347 5,428,655 440,692
Total Expenditures 30,234,952 29,351,504 883,448
Net Transfers (898,347) (6,461,615) 5,563,268
Increase (decrease) in fund balance $ 2,148,872 $ 698,478 $ 1,450,394 Change

CITY OF CYPRESS
Summary of Changes in Fund Balances - General Fund
For the fiscal year ended June 30, 2021 and 2020
2021 2020
32 CITY OF CYPRESS
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revenues tend to vary year to year, and development activity in the City has remained strong during the pandemic.
 The large year over year decline in revenue from use of property resulted from two factors. First, the market interest rate earned on the City’s cash reserves continued to decline causing lower interest receipts. In addition, the required year end adjustment to record investments at their fair market value on June 30, 2021 caused total annual revenues from the use of property to be negative. It should be noted that the City’s investment policy provides for all investments to be held to maturity, so the loss required to be recorded at year end will never be realized.  Revenue from other agencies decreased due to receiving pandemic-related federal grants in the fiscal year ended June 30, 2020. These one-time monies were primarily used to assist local businesses and reimburse the City for costs associated with responding to the pandemic.
 Other revenues were higher in the fiscal year ended June 30, 2021 due to a onetime receipt of $350,000 for street and traffic infrastructure maintenance as part of a conditional use permit. The $350,000 was transferred to the City Capital Projects fund and will be used for median improvements.

Changes in General fund expenditures, by function, occurred as follows during the year ended June 30, 2021:
 General government expenditures increased by $84,436 (1.6 percent). While the year over year increase is modest, there were significant one-time pandemic response expenditures incurred in both years. In the prior year, slightly over $1.1 million of federal CARES Act monies was expended for a small business grant assistance program. The program was designed to immediately assist local businesses impacted by the COVID-19 pandemic and over 150 Cypress businesses received grants of up to $7,500. In the fiscal year ended June 30, 2021, the City committed $1.9 million of General fund monies for additional small business resiliency grants and business recovery programs, a hot community hot meal program and support for local non-profit partners. Approximately half of the $1.9 million was expended through the end of the year, and it is anticipated the remaining balance will be spent in the coming year.
 Community development expenditures increased due to incurring higher contract costs to provide building inspections and plan check services. As mentioned in the discussion on revenue impacts, development activity bounced back strong from prior year declines. While development activity in the City remains high despite the ongoing impacts of the pandemic, the actual costs necessary to provide these services tend to vary from year to year based on the regional economy and its impact on development in the City, as well as the actual timing of providing services on major individual projects within the City.
 Public safety (police) expenditures increased by $186,552 (1.1 percent) when compared to the prior fiscal year. Cost increases associated with implementing negotiated salary and benefit increases for sworn officers accounted for the majority of the additional expenditures.
33 CITY OF CYPRESS
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 Public works expenditures rose by $440,692 (8.1 percent) due to several factors, including having a full-time department director dedicated exclusively to public works for the first time in nearly a decade, more engineering plan check contract costs due to high activity levels, as well as higher park maintenance costs.

Specifically, the cost to irrigate the City’s parks increased due to higher water prices and extremely dry weather conditions. All costs associated with park maintenance is reimbursed to the City’s General fund by the Park District.

General fund net transfers out decreased by nearly $5.6 million as compared to the prior fiscal year and are summarized as follows:
 The General fund transferred $725,000, as compared to $500,000 in the prior year, to the City’s Capital Projects fund for current year projects. Additionally, $1.3 million of accumulated fund balance, down from $4.3 million in the prior year, was transferred from the General fund to the City’s Capital Projects fund for future infrastructure projects.
 $150,000 was transferred to the City’s Internal Service Employee Benefits fund during the past year, compared to $3.4 million in the prior year. This annual transfer is used to fund the City’s pension trust which was established in 2017 to help offset the City’s growing pension liabilities.
 As discussed above, the decreases to transfers from the General fund for future capital and pension trust investments were significantly less than prior years. The decreases were a result of two factors: $1.9 million of available fund balance amounts were allocated for pandemic response efforts and approximately $2.1 million was set-aside to offset projected budget deficits.  The Civic Center Refinancing and Improvement Project Lease Revenue Bonds were paid off in full in Fiscal Year 2018-19. The debt service fund held $871,929 of reserves originally established with City General fund monies. With the debt being extinguished, the debt service fund was closed and the residual fund balance was transferred back to the General fund in Fiscal Year 2019-20.

General Fund Budgetary Highlights
Differences between the original appropriations budget and the final amended budget totaled a net increase of $3,495,479. The annual carryover of appropriations to the new fiscal year for encumbrances and services not completed in the prior fiscal year accounted for $561,840 of the change. The majority of the carryover appropriations related to unexpended contingency amounts and unexpended grant awards. The remaining major changes in appropriations are summarized as follows:
 $50,000 increase in Legislative for consulting assistance with COVID-19 related educational, advocacy and recovery efforts.
 $1.9 million increase in Administration for establishing pandemic-related assistance to businesses, non-profits and a hot meal program for eligible residents using available fund balance in the General fund.
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 $237,061 of increases in Planning for contract costs associated with the Statemandated update of the Housing Element which is required every ten years.  $226,300 of contract costs increases in Building associated with providing inspection and plan check services. Inspection and plan check services tend to fluctuate year-to-year based on many factors, including the overall health of the economy. The additional inspection and plan check appropriations were fully offset by increases in revenues in the General fund.
 $145,000 in Engineering for solid waste consulting services to assist in the creation and implementation of a State-mandated organics recycling program.  $138,300 in Maintenance for irrigating City parks. Rising water costs, combined with a dry winter, resulted in actual water costs exceeding the original budget.

Total actual General fund revenues exceeded the final amended revenue budget by $1,814,261. Overall, significant sales tax and property tax overages were partially offset by revenues from the use of property (interest) and revenue from other agencies (grants) being less than the amended budget. Initial forecasts during the start of the pandemic, along with losing a major generator, indicated major sales tax declines for the fiscal year ended June 30, 2021. Despite these two negative impacts, revenues remained strong throughout the year exceeded budget by more than $1.7 million. Interest earnings (classified as revenues from use of property) on idle General fund cash balances fell short of budget by nearly $1.2 million. While the rate earned on cash balances has declined to historic lows in the last year, the majority of the shortfall is a result of adjusting investments to their market value at June 30, 2021 as required by accounting guidelines. Since the City’s investment policy provides for all investments to be held to maturity, these additional losses will never be realized. Revenue from other agencies consists primarily of grant allocations and $360,000 of police and housing assistance grants remained unexpended at the end of fiscal year. In addition, a budgeted annual payment of $201,500 from the County for waste revenue sharing was delayed and not recorded as revenue in FY 2020-21.

Total operating expenditures were nearly $5.1 million below the final amended budget (before any carryover amounts to the fiscal year ended June 30, 2022) and these savings were attributed across all departments throughout the City. The reason for the large budget variance is similar to prior fiscal years, in that the largest component is related to personnel savings and the periods several departments had staffing vacancies during the course of the year. The bulk of these staffing vacancies are associated with positions (such as police officers) in which active recruitments are ongoing and the periods of vacancy are temporary. Further savings were realized due to a large portion of the onetime amounts budgeted for COVID-19 assistance not being expended prior to June 30, 2021. These unexpended amounts have been carried over and are expected to be expended in the new fiscal year.
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Other Major Funds and Other Funds
Management annually discusses financial highlights of the City’s major funds and any other funds experiencing significant changes in fund balance during the year. Also included in the annual discussion are any activities management considers relevant to the operations of the City.

Recreation and Park District Special Revenue Fund
The Recreation and Park District special revenue fund is the sole operating fund of the Cypress Recreation and Park District. At the end of the current fiscal year, total fund balance was $6,342,546 as compared to $11,948,616 at the beginning of the year. The fund balance represents 151.7 percent (compared with 302.4 percent from the previous year) of the fund’s total current Recreation operating expenditures and the large majority of the fund balance is categorized as restricted. The large decrease in restricted fund balance is a direct result of the construction of Lexington Park and the advances from the City Capital Projects Fund used to pay for the project. While the $5.8 million of advances offset fund balance, it is important to note repayment will not occur for several years and will use future receipts of park development fees – not the cash reserves currently held by the District. The fund balance restrictions at June 30, 2021 are separated into amounts that are required to be used for improvements to open space, for use on youth league renovations and those amounts that may be used for general recreation activities. Since the bulk of the District’s operations are funded with annual property tax revenues, a portion of the restricted fund balance for general recreation usage is needed to meet cash flow shortages between property tax receipts. The remaining restricted amounts (for both open space and recreation) are being accumulated for future non-recurring expenditures such as facility and infrastructure improvements. During the fiscal year ended June 30, 2018, the City Council approved the transfer of $2.2 million to the District for use on future capital facility improvements. To date, no improvements have been applied against the $2.2 million and it is categorized as committed fund balance of the District since these monies were transferred from the General Fund of the City and are not legally restricted.

For the fiscal year ended June 30, 2021, the cash and investments balance in the Recreation and Park District special revenue fund was $14,823,555, an increase of $1,865,473 from the prior fiscal year. Total receivables at the end of the fiscal year were $147,048, an increase from the prior year total of $134,140. The increase in receivables is attributed to higher registration fees outstanding than the prior year, which experienced a decline due to the pandemic. Larger receivables occurred despite recording lower interest receivable amounts resulting from declines in the market rate earned on cash balances.
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JUNE 30, 2021
Total Recreation and Park District Special Revenue fund revenues for the fiscal year ended June 30, 2021 decreased by $329,796 from the prior year. Individual components of this change are highlighted as follows:
 Property tax revenues, the District’s largest revenue source, were basically unchanged. Increases associated with the positive impacts to property tax revenues resulting from rising assessed values were offset by the amount of residual property tax paid to the District. After several years of increasing, these residual amounts declined in the last year as Successor Agency activities continued to wind down.
 Revenues from the use of property decreased due to significantly lower interest earnings caused by declines in the market interest rates earned on cash reserves.

In addition, COVID-19 pandemic restrictions severely limited facility rentals throughout the fiscal year ended June 30, 2021.
 Despite dealing with a variety of pandemic-related challenges in providing recreation programming, charges for services were basically unchanged when compared to the prior year. In March 2020, the COVID-19 pandemic halted traditional recreation programming for the remainder of the year causing sharp declines in revenues associated with this typically busy period of the year. While the easing of pandemic restrictions and the development of alternate programming caused revenues to bounce back over the past year, the activity levels remain well below a typical year. In addition, no park development fees were received in the prior fiscal year compared to $93,684 received during the fiscal year ended June Revenues
Taxes:

Property $ 5,958,449 $ 5,958,510 $ (61) From use of property 101,041 414,655 (313,614) From other agencies 32,300 54,498 (22,198)
Charges for services 468,056 462,268 5,788
Other 4,938 3,649 1,289
Total Revenues 6,564,784 6,893,580 (328,796)
Expenditures
Recreation 4,181,884 3,951,650 230,234
Capital outlay 6,894,042 3,450,867 3,443,175
Total Expenditures 11,075,926 7,402,517 3,673,409
Excess of revenues over expenditures (4,511,142) (508,937) (4,002,205) Net transfers (1,094,928) (1,194,443) 99,515
Increase in fund balance $ (5,606,070) $ (1,703,380) $ (3,902,690)

CITY OF CYPRESS
Change
Summary of Changes in Fund Balances
Recreation and Park District Special Revenue Fund
For the fiscal year ended June 30, 2021 and 2020
2021 2020
37 CITY OF CYPRESS
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2021
30, 2021. These fees vary year to year based on housing development activity within the City.

Notable changes in expenditures during the fiscal year ended June 30, 2021 follow:
 Recreation expenditures increased just over $230,000 (5.0 percent) due to a partial rebound from pandemic-related declines in part-time personnel and payments to contract class instructors, as well as negotiated salary and benefit increases for full-time employees.
 Capital expenditures rose by $3,443,175 due primarily to breaking ground and spending $5.4 million on the construction of Lexington Park. When completed in FY 2021-22, this project will create two large sports fields and other amenities with a total cost of approximately $13 million. In addition to the investment in Lexington Park, $600,000 was expended for ADA compliant playground resurfacing at seven parks.

District net transfers decreased slightly and totaled a net outflow of nearly $1.1 million.

These transfers occur each year and are comprised of multiple components. First, the District annually transfers additional property tax amounts to the City that were previously apportioned to the Agency. The City Council established this repayment when the State disallowed loans from the City to the Agency which had been used to pay for several recreation capital projects (including the construction of the Senior Center and the remodel of the Community Center). The other recurring component relates to a $150,000 annual transfer to the employees’ benefits internal service fund to help offset any unfunded pension liability owed to the Orange County Employees Retirement System (OCERS). This liability represents monies owed on behalf of vested District employees who earned OCERS pension benefits prior to 2000 when all employees were enrolled in CalPERS.
38 CITY OF CYPRESS
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Streets Special Revenue Fund
The Streets Special Revenue Fund accounts for receipts and expenditures of money apportioned under Streets and Highway Code (Highway Users’ Tax), the Road Repair and Accountability Act of 2017, Measure M2 sales tax revenues, and Traffic Mitigation Fees charged by the City. These funds are used to maintain and improve streets and traffic signals.

Total revenues for the fiscal year ended June 30, 2021 decreased $146,413 from the prior fiscal year. The largest recurring income source in this fund is revenue from other agencies which includes State Gas Tax, Road Repair and Accountability Act of 2017 and County Measure M2 allocations. Fees for traffic mitigation declined $130,712 year over year and these annual receipts tend to fluctuate based on development activity in the City.

Total expenditures and net transfers also tend to vary from year-to-year depending on resource availability and the specific timing and scope of recurring projects such as the arterial and residential street rehabilitation and concrete/sidewalk improvements.

Expenditures for street rehabilitation and concrete/sidewalk improvements increased from $810,546 to $2,228,221 in the past year. In addition, extensive median improvements along Lincoln Avenue utilized $535,000 of restricted Gas Tax monies resulting in the year over year increase to net transfers.

Revenues
From use of property $ 32,765 $ 110,712 $ (77,947) From other agencies 2,929,680 2,933,107 (3,427) Charges for services 8,789 139,501 (130,712)
Other revenue 65,673 - 65,673
Total Revenues 3,036,907 3,183,320 (146,413)
Expenditures
Public works 2,228,221 810,546 1,417,675
Capital outlay 111,922 152,828 (40,906)
Total Expenditures 2,340,143 963,374 1,376,769
Net Transfers (1,906,455) (1,423,498) (482,957)
Increase (decrease) in fund balance $ (1,209,691) $ 796,448 $ (2,006,139)

CITY OF CYPRESS
Summary of Changes in Fund Balances
Streets Special Revenue Fund
For the fiscal year ended June 30, 2021 and 2020
2021 2020 Change
39 CITY OF CYPRESS
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2021
City Capital Projects Fund
The City Capital Projects Fund provides a cost center for City projects funded (either partially or in full) with General fund monies. In accordance with City Council policy, an annual transfer is made from the General fund to the Capital Projects Fund to pay for a portion of the projects approved as part of the Seven-Year Capital Improvement Program.

Annual transfers are also made from the General fund to accumulate monies for future projects. The following table summarizes the activity during the past two years.

Total revenues for the fiscal year ended June 30, 2021 decreased $920,704 from the prior fiscal year. The decrease is a result of significantly lower interest earnings on idle cash balances due to a large decline in the market interest rate earned on the City’s investment portfolio. While no other revenues were received in the past year, it is not uncommon for the City’s revenues from other agencies (grant monies) to fluctuate from year to year based on eligibility and availability.

Total expenditures tend to vary from year-to-year depending on the status of nonrecurring projects such as public facility renovations, median improvements and other major infrastructure improvements such as storm drainage construction. Substantial project delays caused by the pandemic in the fiscal year ended June 30, 2020 resulted in several projects spilling over into the fiscal year ended June 30, 2021. In addition to these additional costs, the year over year increase is also attributable to the median improvements on Lincoln Avenue and Katella Avenue as well as incurring nearly $3.1 million on the multi-year Police Department building modernization project.

Revenues
From use of property $ 443,888 $ 1,364,592 $ (920,704) Total Revenues 443,888 1,364,592 (920,704) Expenditures
Public works 940,847 688,699 252,148
Capital outlay 4,642,503 608,532 4,033,971
Total Expenditures 5,583,350 1,297,231 4,286,119
Net Transfers 6,363,157 6,576,863 (213,706)
Special Item
Gain on sale of land held for resale 2,053,172 2,053,172 - Increase (decrease) in fund balance $ 3,276,867 $ 6,644,224 $ (3,367,357) Change

CITY OF CYPRESS
Summary of Changes in Fund Balances
For the fiscal year ended June 30, 2021 and 2020
City Capital Projects Fund
2021 2020
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MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2021
The annual amounts shown as net transfers are comprised of transfers in from various restricted funds of the City and two transfers from the General fund. While total net transfers were consistent from year to year, the specific components comprising these annual amounts differed greatly.

Transfers in from restricted funds were significantly higher than the prior year due to using over $2 million of one-time federal asset seizure monies to pay for a portion of the Police Department building modernization project. The two annual General fund transfers represent the annual funding requirement approved by the City Council to fund current year projects, while the other component allocates monies for future infrastructure improvements that will be appropriated in upcoming years. The amount available for future improvements is directly tied to available General fund surplus amounts from the prior fiscal year. Available surplus amounts from FY 2019-20, and transferred to the City Capital Projects fund in FY 2020-21, were $2.7 million lower than the prior year.

Fund balance was also impacted by the sale of land held for resale during the fiscal year ended June 30, 2021. The sale of the 13 acres of land held in the City Capital Projects fund resulted in a one-time, extraordinary gain of more than $2 million. The proceeds of the sale of the land will be used for future infrastructure and facility improvements.

Sewer Enterprise Fund
The Sewer Enterprise fund accounts for the maintenance and improvements made to the City’s sewer system. The primary revenue source associated with this fund is fees collected from users of the sewer system. The Sewer fund is an enterprise fund in accordance with the requirements of GASB Statement No. 54 and all infrastructure assets associated with the sanitary sewer system are recorded as assets in the Sewer fund and the full-accrual method of accounting is used to account for sewer activities within the fund. The net position increased by slightly more than $1.0 million during the year. The following is a comparison of the enterprise activity in the fund for the past two years:
41 CITY OF CYPRESS
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2021
Total Sewer fund operating revenues for the fiscal year ended June 30, 2021 are comprised primarily of sewer fee revenues, which increased by $128,772 from the prior year. Sewer fees are charged to both residential and commercial accounts based on water consumption.

Maintenance expenditures decreased due to preforming the comprehensive update to the Sewer System Management Plan (SSMP) during the fiscal year ended June 30, 2020.

This required update occurs every five years with cost of nearly $100,000.

Most non-operating revenues and expenses have remained consistent over the past two years. However, interest income decreased by nearly $41,000 in the fiscal year ended June 30, 2021 due to the City’s investment portfolio earning a lower rate of return than the prior year.

Capital Asset and Debt Administration
Capital assets. The City’s investment in capital assets as of June 30, 2021 amounts to $185,595,392 (net of accumulated depreciation) and consists of $166,272,625 for governmental activities and $19,322,767 for business-type activities. The investment in capital assets for governmental activities includes land, buildings and improvements, vehicles and equipment, furniture and fixtures, roads, storm drains, sidewalks, street lights, and construction in progress. The investment in business-type activities is limited to the City’s sanitary sewer system. The City’s overall investment in capital assets increased during the past fiscal year by nearly $12.2 million (3.7 percent) before Operating Revenues
Charges for services $ 1,861,974 $ 1,733,202 $ 128,772 Other 2,779 1,611 1,168 Total Operating Revenues 1,864,753 1,734,813 129,940
Operating Expenditures
Sewer Maintenance 298,261 325,269 (27,008)
Depreciation 590,022 546,481 43,541
Total Operating Expenditures 888,283 871,750 16,533
Non-Operating Revenues (Expenses)
Property Taxes 30,499 30,076 423
From other agencies 37 39 (2)
Interest income 25,145 66,013 (40,868)
Total Non-operating Revenues 55,681 96,128 (40,447)
Increase (Decrease) in net position $ 1,032,151 $ 959,191 $ 72,960

CITY OF CYPRESS
Change
Summary of Changes in Net Position
Business-type Activities - Sewer Enterprise Fund
For the fiscal year ended June 30, 2021 and 2020
2021 2020
42 CITY OF CYPRESS
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2021
depreciation. The following table summarizes capital asset activity for the fiscal year ended June 30, 2021.

Major governmental activities capital asset transactions during the fiscal year ended June 30, 2021 included the following:
 The large increase to construction in progress at year end is due to Americans with Disabilities Act (ADA) playground surfacing upgrades at several parks, construction of Lexington Park, and the Police Department modernization and seismic retrofit project not being completed at June 30, 2021.  Additions to buildings and improvements of $1.7 million include heating, air conditioning and ventilation system replacements and exterior building improvements at the Civic Center, as well as new restrooms and shade structures at Evergreen Park.
 The increase to machinery and equipment is attributed to the implementation of an electronic building permit and plan review system, replacement of desktop monitors city-wide, replacement of two police department motorcycles, and audio/video enhancements at the Community Center.
 Infrastructure additions of $1.4 million are comprised of capitalizing prior year construction in progress amounts as well as parkway improvements incurred in the fiscal year ended June 30, 2021.

Major business-type activities capital asset transactions during the most recent fiscal year included the following:
 The completion of $135,000 of sewer capacity and condition improvement projects at various locations. In addition, nearly $106,000 of capital improvement projects were incurred and recorded as construction in progress at June 30, 2021.

Governmental Activities:

Capital Assets, Not Depreciated:

Land $ 9,734,882 $ 9,734,882 $ $ - - $ 9,734,882 $ 9,734,882 Construction in Progress 13,185,847 4,245,096 105,742 - 13,291,589 4,245,096 Total, Not Depreciated 22,920,729 13,979,978 105,742 - 23,026,471 13,979,978 Capital Assets, Being Depreciated:

Buildings and Improvements 38,390,119 36,677,316 - - 38,390,119 36,677,316 Machinery and Equipment 11,209,381 11,173,408 - - 11,209,381 11,173,408 Infrastructure 233,683,122 232,446,976 34,445,054 34,310,901 268,128,176 266,757,877 Total, Being Depreciated 283,282,622 280,297,700 34,445,054 34,310,901 317,727,676 314,608,601 Less Accumulated Depreciation:

Buildings and Improvements (20,093,724) (18,961,658) - - (20,093,724) (18,961,658) Machinery and Equipment (7,720,733) (7,162,215) - - (7,720,733) (7,162,215) Infrastructure (112,116,269) (107,744,902) (15,228,029) (14,638,007) (127,344,298) (122,382,909) Total Accumulated Depreciation (139,930,726) (133,868,775) (15,228,029) (14,638,007) (155,158,755) (148,506,782) Total Depreciated, Net 143,351,896 146,428,925 19,217,025 19,672,894 162,568,921 166,101,819 Governmental Activities Capital
Assets, Net $ 166,272,625 $ 160,408,903 $ 19,322,767 $ 19,672,894 $ 185,595,392 $ 180,081,797 Total
2021 2020
Summary of Capital Assets
As of June 30, 2021 and 2020
2021 2020
Governmental Activities Business-type Activities
2021 2020
43 CITY OF CYPRESS
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2021
Additional information on the City’s capital assets can be found in the Capital Assets and Depreciation note (7) in the notes to the basic financial statements section of this report.

Long-Term debt. The City had total debt outstanding of $68,475,950 at June 30, 2020.

The following schedule summarizes the City’s long-term liabilities.

Long-term debt activity during the fiscal year ended June 30, 2021 included:
 Claims payable increased significantly due to several new workers’ compensation cases remaining open at June 30, 2021.
 Compensated absences increased by $234,852. The increase is attributable to employees building their leave balances back up after the COVID-19 pandemic forced the City to close facilities between March and June 2020. These closures resulted in many employees using accrued leave time which caused compensated absences liabilities to experience a large decline in the prior year.  In conjunction with GASB 75, the City had an actuarial valuation performed to determine the liability for other postemployment benefit (OPEB) plans as of June 30, 2021. The results of this actuarial valuation resulted in the City’s liability for retiree’s health benefits staying relatively unchanged. Any changes in liability from year to year is due to many factors, including the lowering of the discount rate, as well as the ongoing impact of the actuarial requirement of an “implied subsidy” which results when the premiums paid by both active employees and retirees are the same. In these situations, such as with the City, the underlying assumption is the value of benefits to retirees exceeds those provided to active employees.  The City’s pension liability associated with its defined benefit plans increased by nearly $4.3 million during the fiscal year ended June 30, 2021. These increases are directly attributable to the results of the annual actuarial valuations performed by the plan’s administrators, CalPERS and OCERS.

The City has set aside slightly more than $3 million in the Employees Benefits Internal Service Fund to offset and pay a portion of both the OPEB and pension liabilities.

However, these monies have not been placed in an irrevocable trust and therefore are not considered funded assets for actuarial purposes. In addition to these cash balances, 2021 2020 Change
Claims Payable $ 2,301,334 $ 1,338,923 $ 962,411
Compensated Absences 2,295,261 2,060,409 234,852
Retiree's Health Benefits 10,607,104 10,617,458 (10,354) Accrued Pension Liability 53,272,251 48,981,312 4,290,939 Total $ 68,475,950 $ 62,998,102 $ 5,477,848
Summary of Long-Term Debt
As of June 30, 2021 and 2020
44 CITY OF CYPRESS
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2021
$17.9 million is invested in the City’s pension trust as of June 30, 2021. These trust amounts are legally restricted and may only be used to pay annual pension obligations.

Additional information on the City’s long-term debt, pension plans and other postemployment retirement benefits can be found in the Long-Term Debt note (8), the Other Long-Term Liabilities note (9), the Public Employees’ Retirement System (CalPERS) note (10), the Terminated Orange County Employees Retirement System (OCERS) Defined Benefit Pension Plan note (12) and the Post-Employment Health Care Benefits note (13) in the notes to the basic financial statements section of this report.

Economic Factors and their impact on future City Budgets Cypress has achieved enviable fiscal health through strategic financial management and oversight. Its long history of fiscal discipline has enabled Cypress to weather economic downturns; maintain a commitment to first class infrastructure; and see Cypress repeatedly recognized as one of Southern California’s best cities to raise a family.

However, the last two years have brought extraordinarily uncertain times. The FY 2020- 21 Budget was prepared under the specter of economic calamity. The State of California faced a $50 billion deficit and unemployment was projected to rival the Great Depression.

Fortunately, a year later we were in a far better place when preparing the FY 2021-22 Budget - the State had a $15 billion one-time surplus, the national unemployment rate had stabilized and the City had been allocated $11.7 million of Federal American Rescue Plan Act monies to assist with responding to the pandemic.

Thanks to prudent, but difficult decisions made over the last decade, the City’s financial condition was especially strong entering the pandemic and the City Council used that strength to protect and serve the community. Inside the City organization, the City Council’s commitment and preparation had an equally important impact. The City was able to contain COVID-19’s impact on our employees, enabling us to serve the community without interruption. We maintained our high quality services and avoided employee pay cuts, furloughs or lay-offs.

This discipline and its resulting successes did not go unnoticed. In March, former State Senator John Moorlach triumphed Cypress for having the strongest unrestricted net (fiscal) position of Orange County’s 34 cities. The community should be proud to note that Senator Moorlach has prepared this analysis three times in recent years and Cypress has taken the top spot twice.

In FY 2021-22, while our attention turns, optimistically, to recovery we continue to prepare to respond to the pandemic’s long-term impacts on the economy, consumer behavior and public health. Fortunately, the City is in an improved long-term financial position when compared to last year even before accounting for the $11.7 million American Rescue Plan Act allocation.
45 CITY OF CYPRESS
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2021
While the FY 2021-22 Budget is effectively balanced – it relies on slightly more than $100,000 from reserves to fund a portion of one-time projects and capital outlay acquisitions and a $1.55 million General Fund contribution toward capital projects and infrastructure – the City must remain vigilant about its finances. In particular, sales tax and the business parks are more important to the City’s financial condition than ever before. The Budget is increasingly dependent upon sales tax - a volatile revenue source highly reliant on revenues generated by just a handful of businesses. Our biggest and most successful business parks are now more than 40 years old and how and where people work post-pandemic could disrupt the City’s employment base and the considerable economic activity and revenues generated by the business parks. As we emerge from the pandemic, inflation is also a concern as it drives up costs much faster than some revenues (a function of Proposition 13)
Revenues. The City’s projected revenues for Fiscal Year 2021-22 are $41.7 million and do not include any tax rate increases from the previous year. The Fiscal Year 2021-22 revenues included in the budget are 9.9 percent higher than the Fiscal Year 2020-21 adopted revenue budget.

The revenue uncertainties associated with the COVID-19 pandemic, especially in regards to forecasting sales tax and transient occupancy tax, made developing the Fiscal Year 2021-22 budget challenging. However, revenues have been projected conservatively and realistically, taking into account the best information available from the City’s sales tax consultant, the League of California Cities, the State Department of Finance, year-to-date receipts, and economic forecasts.

The City’s largest General fund revenue sources remain property tax ($11.7 million including State backfills) and sales tax ($11.3 million). Together, these two sources comprise over two-thirds of General Fund revenues. Budgeted sales tax revenues have increased by $2.0 million (21.6 percent) from the FY 2020-21 Budget. The increase is the result of the impact of the pandemic and the loss of one of the City’s largest generators in late 2020 not being as severe as initially feared.

While not nearly as large as property taxes and sales tax, transient occupancy tax (TOT) is a major component of Other Taxes in the General Fund. The TOT declines due to COVID-19 have been ongoing and significant. It is difficult to predict how and when TOT revenues may fully rebound, but TOT is projected to increase by $300,000 (19%) when compared to the FY 2020-21 Budget.

Expenditures. Fiscal Year 2021-22 expenditures accomplish Strategic Plan goals and operating costs grow in response to a variety of factors largely outside the City’s control (higher pension contributions, state mandates, contract cost increases due to inflation, etc.) Major expenditure highlights in the Fiscal Year 2021-22 Budget are as follows:
 Maintaining current service levels.
46 CITY OF CYPRESS
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2021
 Funding required CalPERS pension cost increases of $600,000.  Incorporating negotiated employee salary and benefit increases.  Year one of the City’s updated Seven Year Capital Improvement Program which totals $6.3 million.
 Capital Outlay funding of slightly more than $1.2 million to acquire and/or replace computer software/hardware items, vehicles and various tools and equipment, the majority of which is utilized by the Police Department. Most capital outlay amounts are being funded with accumulated monies specifically set-aside in the equipment replacement/technology investment internal service funds for these purchases.

Requests for Information
This financial report is designed to provide a general overview of the financial position of the City for all interested parties. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Finance Department, 5275 Orange Avenue, Cypress, CA 90630. 47 BASIC FINANCIAL STATEMENTS
48 ASSETS
Cash and investments $ 168,874,271 $ 5,204,070 $ 174,078,341 Restricted cash and investments 17,913,583 17,913,583 - Receivables:

Taxes 3,037,639 104 3,037,743
Interest 112,609 3,350 115,959
Notes, net of allowance 208,381 - 208,381
Accounts 1,484,868 1,484,868 -
Prepaid items 184,446 155,551 339,997
Inventory 2,396 - 2,396
Assets available for resale 1,421,708 1,421,708 -
Capital assets
Non-depreciable:

Land 9,734,882 9,734,882 -
Construction in progress 13,185,847 105,742 13,291,589
Depreciable, net of accumulated depreciation:

Building and improvements 18,296,395 18,296,395 -
Machinery and equipment 3,488,648 3,488,648 -
Infrastructure 121,566,853 19,217,025 140,783,878
TOTAL ASSETS 359,512,526 24,685,842 384,198,368

DEFERRED OUTFLOWS OF RESOURCES
Deferred amount from pension plans 11,850,207 11,850,207 - Deferred amount from OPEB 1,635,626 1,635,626 -
Deferred amount from OCERS 1,675,168 1,675,168 -
TOTAL DEFERRED OUTFLOWS OF RESOURCES 15,161,001 15,161,001 -

LIABILITIES
Accounts payable and other accrued liabilities 7,460,487 109,282 7,569,769 Deposits 1,346,062 1,346,062 -
Unclaimed property 64,339 - 64,339
Unearned revenue 435,676 - 435,676
Due to bondholders 153,575 - 153,575
Due to other governments 94,791 - 94,791
Long-term liabilities:

Due within one year
Claims payable 575,500 - 575,500
Compensated absences 573,800 - 573,800
Due in more than one year
Claims payable 1,725,834 1,725,834 -
Retirees' health payable 10,607,104 10,607,104 -
Compensated absences 1,721,461 1,721,461 -
Net pension liability 53,272,251 53,272,251 -
TOTAL LIABILITIES 78,030,880 109,282 78,140,162

DEFERRED INFLOWS OF RESOURCES
Deferred amount from pension plans 2,946,263 2,946,263 - Deferred amount from OPEB 738,709 - 738,709
Deferred amount from OCERS 1,032,998 1,032,998 -
TOTAL DEFERRED INFLOWS OF RESOURCES 4,717,970 4,717,970 -

NET POSITION
Net invested in capital assets 166,272,625 19,322,767 185,595,392 Restricted:

Pension trust 17,913,583 17,913,583 -
Public safety 1,233,921 1,233,921 -
Public works 11,984,792 11,984,792 -
Recreation 4,108,546 4,108,546 -
Sanitary sewer 5,253,793 - 5,253,793
Other 2,291,711 2,291,711 -
Unrestricted 88,119,499 88,119,499 -
TOTAL NET POSITION $ 291,924,677 $ 24,576,560 $ 316,501,237

See Accompanying Notes to the Basic Financial Statements.

CITY OF CYPRESS

STATEMENT OF NET POSITION
June 30, 2021
Activities
Governmental Business-type
Activities Total
49 Capital
Charges for Grants and
Expenses Services Contributions
Governmental Activities:

General government $ 6,295,641 $ 498,954 $ 789,594 $ 76,083 $ (4,931,010) $ $ (4,931,010) - Community development 2,100,332 1,557,209 48,250 - (494,873) - (494,873) Public safety 19,428,392 406,077 1,069,066 (17,953,249) - (17,953,249) - Public works 13,865,043 770,403 1,836,280 1,793,500 (9,464,860) (9,464,860) - Recreation 5,303,581 487,138 119,197 (4,697,246) - (4,697,246) - Total Governmental Activities 46,992,989 3,719,781 3,862,387 1,869,583 (37,541,238) (37,541,238) - Business-type Activities:

Sewer 888,283 1,861,974 37 - - 973,728 973,728
Total $ 47,881,272 $ 5,581,755 $ 3,862,424 $ 1,869,583 $ (37,541,238) $ 973,728 $ (36,567,510) General Revenues:

Taxes:

Property tax, levied for general purpose 6,261,310 - 6,261,310 Property tax, levied for recreation purposes 5,958,450 - 5,958,450 Property tax, levied for lighting purposes 1,363,781 - 1,363,781 Property tax, levied for sewer purposes - 30,499 30,499 Property tax, backfill of vehicle license fees 5,136,804 - 5,136,804 Sales tax 11,249,720 11,249,720 -
Transient occupancy tax 1,648,030 - 1,648,030
Franchise tax 1,753,459 - 1,753,459
Other taxes 1,820,366 - 1,820,366
Total taxes 35,191,920 30,499 35,222,419
Investment earnings 2,245,090 25,145 2,270,235
Miscellaneous 37,845 2,779 40,624
Total General Revenues 37,474,855 58,423 37,533,278
Change in Net Position, Before Special Items (66,383) 1,032,151 965,768 Special Items:

Gain on sale of land held for resale (Note 24) 2,053,172 - 2,053,172 Total Special Items 2,053,172 - 2,053,172
Change in Net Position 1,986,789 1,032,151 3,018,940
Net Position at Beginning of Year 289,937,888 23,544,409 313,482,297 Net Position at End of Year $ 291,924,677 $ 24,576,560 $ 316,501,237 See Accompanying Notes to the Basic Financial Statements.

CITY OF CYPRESS

STATEMENT OF ACTIVITIES
For the fiscal year ended June 30, 2021
Net (Expense) Revenues and
Total
Business-type
Activities
Program Revenues
Governmental
Activities
Grants and
Contributions
Operating
Changes in Net Position
50 ASSETS
Cash and investments $ 26,599,861 $ 14,823,555
Receivables:

Taxes 2,634,099 65,508
Interest 34,592 10,174
Notes, net of allowance 100,356 -
Accounts 298,246 71,366
Prepaids 79,380 33,301
Inventory - 699
Due from other funds 23,053 -
Advances to other funds 226,304 -
Assets available for resale - -

TOTAL ASSETS $ 29,995,891 $ 15,004,603

LIABILITIES, DEFERRED INFLOWS OF RESOURCES,

AND FUND BALANCES

LIABILITIES:

Accounts payable and other accrued liabilities $ 2,748,801 $ 2,677,224 Deposits 1,345,112 950
Unclaimed property 64,039 300
Unearned revenue 259,788 138,888
Due to other funds - -
Advances from other funds - 5,844,695
Due to bondholders 153,575 -
Due to other governments 94,791 -

TOTAL LIABILITIES 4,666,106 8,662,057

DEFERRED INFLOWS OF RESOURCES:

Unavailable revenue 137,123 -

TOTAL DEFERRED INFLOWS OF RESOURCES 137,123 -
FUND BALANCES:

Nonspendable 400,475 34,000
Restricted 28,944 4,108,546
Committed 8,277,669 -
Assigned 15,425,574 2,200,000
Unassigned 1,060,000 -

TOTAL FUND BALANCES 25,192,662 6,342,546

TOTAL LIABILITIES, DEFERRED INFLOWS OF
RESOURCES, AND FUND BALANCES $ 29,995,891 $ 15,004,603
See Accompanying Notes to the Basic Financial Statements.

CITY OF CYPRESS

BALANCE SHEET

GOVERNMENTAL FUNDS
June 30, 2021
General Park District
Special Revenue
Major Funds
Recreation and
51 $ 4,609,299 $ 81,962,247 $ 8,754,569 $ 136,749,531
323,043 - 14,989 3,037,639
3,834 54,091 6,963 109,654
- - 108,025 208,381
201,154 188,000 68,766 827,532
- 37,000 - 149,681
- - - 699
- - - 23,053
- 5,844,695 - 6,070,999
- - 1,421,708 1,421,708
$ 5,137,330 $ 88,086,033 $ 10,375,020 $ 148,598,877
$ 114,143 $ 838,524 $ 154,065 $ 6,532,757
- - - 1,346,062
- - - 64,339
- 37,000 - 435,676
- - 23,053 23,053
- - 226,304 6,070,999
- - - 153,575
- - - 94,791
114,143 875,524 403,422 14,721,252
135,481 225,000 20,057 517,661
135,481 225,000 20,057 517,661
- 5,881,695 - 6,316,170
4,887,706 10,177,845 - 19,203,041
12,824,144 - 21,101,813 -
68,279,670 - 85,905,244 -
- - (226,304) 833,696
4,887,706 86,985,509 9,951,541 133,359,964
$ 5,137,330 $ 88,086,033 $ 10,375,020 $ 148,598,877
Major Funds (Continued)
Total
Nonmajor
Governmental
Funds
Special Revenue
Streets
City
Fund
Capital Projects
52 Fund Balances of Governmental Funds $ 133,359,964
Amounts reported for governmental funds in the Balance Sheet differ from the amounts reported in the Statement of Net Position for governmental activities due to the following:

Capital assets of governmental activities are not financial resources and, therefore, are not reported in the governmental funds. Except for the internal service fund amount of $3,598,457 which is included in the amount reported below, the capital assets net of accumulated depreciation were equal to the following amount. 162,674,168
Unavailable revenue is comprised of long-term receivables, which are not current available resources, and grants, which are resources not received within the proper revenue recognition period, and are therefore offset by deferred inflow of resources amounts equal to the receivable in the governmental funds. 517,661
Internal service funds are used by management to charge the costs of certain activities (including central services, employee benefits, liability insurance, and workers compensation insurance) to individual funds. The assets, deferred outflows of resources, liabilities, and deferred inflows of resources of the internal service funds are included in the Statement of Net Position for governmental activities. (4,627,116)
Net Position of Governmental Activities $ 291,924,677
See Accompanying Notes to the Basic Financial Statements.

CITY OF CYPRESS

RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS

TO THE STATEMENT OF NET POSITION
June 30, 2021
53 REVENUES: General
Taxes $ 28,546,341 $ 5,958,449
Licenses and permits 884,938 -
Fines and forfeitures 257,141 -
From use of property (547,569) 101,041
From other agencies 240,412 32,300
Charges for services 3,481,808 468,056
Other revenue 419,100 4,938
TOTAL REVENUES 33,282,171 6,564,784

EXPENDITURES:

Current:

General government 5,291,414 -
Community development 1,852,108 -
Public safety 17,222,083 -
Public works 5,869,347 -
Recreation - 4,181,884
Capital outlay - 6,894,042
TOTAL EXPENDITURES 30,234,952 11,075,926

EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 3,047,219 (4,511,142)
OTHER FINANCING SOURCES (USES):

Transfers in 1,323,260 -
Transfers out (2,221,607) (1,094,928)

TOTAL OTHER FINANCING
SOURCES (USES) (898,347) (1,094,928)

NET CHANGE IN FUND BALANCES
BEFORE EXTRAORDINARY ITEM 2,148,872 (5,606,070)
SPECIAL ITEM:

Gain on sale of land held for resale - -
NET CHANGE IN FUND BALANCES 2,148,872 (5,606,070)
FUND BALANCE - BEGINNING OF YEAR 23,043,790 11,948,616
FUND BALANCES - END OF YEAR $ 25,192,662 $ 6,342,546
See Accompanying Notes to the Basic Financial Statements.

Revenue

CITY OF CYPRESS

STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS
For the fiscal year ended June 30, 2021
Special
Major Funds
Recreation and
Park District
54 $ $ - $ 1,439,864 - $ 35,944,654
- - - 884,938
- - 88,845 345,986
32,765 443,888 58,585 88,710
2,929,680 - 901,407 4,103,799
8,789 - 93,111 4,051,764
65,673 - 321,373 811,084
3,036,907 443,888 2,903,185 46,230,935
- - 194,355 5,485,769
- - 40,105 1,892,213
- - 179,132 17,401,215
2,228,221 940,847 1,018,011 10,056,426
- - - 4,181,884
111,922 4,642,503 157,134 11,805,601
2,340,143 5,583,350 1,588,737 50,823,108
696,764 (5,139,462) 1,314,448 (4,592,173)
6,395 6,363,157 - 7,692,812
(1,912,850) - (2,909,034) (8,138,419)
(1,906,455) 6,363,157 (2,909,034) (445,607)
(1,209,691) 1,223,695 (1,594,586) (5,037,780)
- 2,053,172 - 2,053,172
(1,209,691) 3,276,867 (1,594,586) (2,984,608)
6,097,397 83,708,642 11,546,127 136,344,572
$ 4,887,706 $ 86,985,509 $ 9,951,541 $ 133,359,964
Streets
City
Major Funds (Continued)
Special
Capital Projects
Fund Total
Nonmajor
Governmental
Funds
Revenue
55 Net Change in Fund Balances - Total Governmental Funds $ (2,984,608) 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 as follows:

Governmental funds report capital outlays as expenditures. However, in the Statement of Activities, the cost of those assets is allocated over their estimated useful lives as depreciation expense, or are allocated to the appropriate functional expense when the cost is below the capitalization threshold. This activity is reconciled as follow:

Cost of assets capitalized 11,805,601
Depreciation expense (less $831,671 recorded in the Internal Service Funds) (5,503,432) Certain revenues in the governmental funds are classified as deferred inflows of resources because they are not collected within the prescribed time period after yearend to provide for current operations. However, the revenues are included under the accrual basis used in the government-wide statements and are as follows:

Unavailable revenue 153,007
Internal service funds are used by management to charge the costs of certain activities (including central services, employee benefits, liability insurance, and workers compensation insurance) to individual funds. The changes in net position of the internal service funds are reported with governmental activities. (1,483,779)
Change in Net Position of Governmental Activities $ 1,986,789 See Accompanying Notes to the Basic Financial Statements.

CITY OF CYPRESS

RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO

THE STATEMENT OF ACTIVITIES
For the fiscal year ended June 30, 2021
56 ASSETS
CURRENT ASSETS:

Cash and cash equivalents $ 5,204,070 $ 32,124,740
Restricted cash and cash equivalents - 17,913,583
Receivables:

Taxes 104 -
Interest 3,350 2,955
Accounts - 657,336
Prepaid items 155,551 34,765
Inventory - 1,697
TOTAL CURRENT ASSETS 5,363,075 50,735,076
NON-CURRENT ASSETS:

Construction in progress 105,742 25,711
Equipment (Net) - 3,572,746
Infrastructure (Net) 19,217,025 -
TOTAL NON-CURRENT ASSETS 19,322,767 3,598,457
TOTAL ASSETS 24,685,842 54,333,533

DEFERRED OUTFLOWS OF RESOURCES
Deferred amount from pension plans - 11,850,207
Deferred amount from OPEB - 1,635,626
Deferred amount from OCERS - 1,675,168
TOTAL DEFERRED OUTFLOWS OF RESOURCES - 15,161,001

LIABILITIES
CURRENT LIABILITIES:

Accounts payable and other accrued liabilities 109,282 927,730 Claims payable - 575,500
Compensated absences, current portion - 573,800
TOTAL CURRENT LIABILITIES 109,282 2,077,030
LONG-TERM LIABILITIES:

Claims payable - 1,725,834
Retirees' health payable - 10,607,104
Compensated absences - 1,721,461
Net pension liability - 53,272,251
TOTAL LONG-TERM LIABILITIES - 67,326,650
TOTAL LIABILITIES 109,282 69,403,680

DEFERRED INFLOWS OF RESOURCES
Deferred amount from pension plans - 2,946,263
Deferred amount from OPEB - 738,709
Deferred amount from OCERS - 1,032,998
TOTAL DEFERRED INFLOWS OF RESOURCES - 4,717,970

NET POSITION
Invested in capital assets 19,322,767 3,598,457
Restricted:

Pension trust - 17,913,583
Sanitary sewer 5,253,793 -
Unrestricted - (26,139,156)
TOTAL NET POSITION $ 24,576,560 $ (4,627,116)
See Accompanying Notes to the Basic Financial Statements.

CITY OF CYPRESS

STATEMENT OF NET POSITION
June 30, 2021

PROPRIETARY FUNDS
Enterprise
Funds
Sewer
Fund
Activities -
Business-type
Internal Service
Funds
Governmental
Activities -
57 Governmental
Activities -
Internal Service
Funds
OPERATING REVENUES:

From other agencies $ $ 97,617 -
Charges for services 1,861,974 17,764,649
Other revenue 2,779 232,407
TOTAL OPERATING REVENUES 1,864,753 18,094,673

OPERATING EXPENSES:

Personnel services - 1,352,564
Contractual services - 12,878,819
Supplies and other services - 5,845,965
Claim payments and changes in estimates - 1,478,421
Sewer maintenance 298,261 -
Depreciation 590,022 831,671
TOTAL OPERATING EXPENSES 888,283 22,387,440
OPERATING INCOME 976,470 (4,292,767)

NON-OPERATING REVENUES (EXPENSES):

Taxes 30,499 -
From other agencies 37 -
Interest income 25,145 2,362,039
Gain (loss) on disposal of equipment - 1,342
TOTAL NON-OPERATING REVENUES (EXPENSES) 55,681 2,363,381

INCOME BEFORE TRANSFERS 1,032,151 (1,929,386)

TRANSFERS:

Transfers in - 445,607
TOTAL TRANSFERS - 445,607
CHANGE IN NET POSITION 1,032,151 (1,483,779)
NET POSITION - BEGINNING OF YEAR 23,544,409 (3,143,337) NET POSITION - END OF YEAR $ 24,576,560 $ (4,627,116)
See Accompanying Notes to the Basic Financial Statements.

CITY OF CYPRESS

STATEMENT OF REVENUES, EXPENSES AND

CHANGES IN NET POSITION

PROPRIETARY FUNDS
For the fiscal year ended June 30, 2021
Enterprise
Funds
Sewer
Fund
Activities -
Business-type
58 CASH FLOWS FROM OPERATING ACTIVITIES:

Cash received from users $ 1,865,396 $ 18,259,138
Cash payments to suppliers for goods and services (62,309) (14,902,981) Cash payments to employees (162,752) (1,319,557)

NET CASH PROVIDED BY
OPERATING ACTIVITIES 1,640,335 2,036,600
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:

From taxes and other agencies 30,536 -
Transfers in - 445,607

NET CASH PROVIDED BY NONCAPITAL
FINANCING ACTIVITIES 30,536 445,607
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:

Proceeds from disposal of capital assets - 7,853
Acquisition of capital assets (239,895) (302,948)

NET CASH USED BY CAPITAL AND
RELATED FINANCING ACTIVITIES (239,895) (295,095)
CASH FLOWS FROM INVESTING ACTIVITIES:

Interest on investments 25,145 2,362,039
NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES 25,145 2,362,039 INCREASE (DECREASE) IN CASH AND INVESTMENTS 1,456,121 4,549,151 CASH AND INVESTMENTS - BEGINNING OF YEAR 3,747,949 45,489,172 CASH AND INVESTMENTS - END OF YEAR $ 5,204,070 $ 50,038,323

RECONCILIATION OF OPERATING INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:

Operating income $ 976,470 $ (4,292,767)
Adjustments to reconcile operating income to net cash provided by operating activities:

Depreciation 590,022 831,671
Changes in assets and liabilities:

Accounts receivable decreased (increased) 643 (39,147)
Prepaid items decreased (increased) - 177,198
Inventory decreased (increased) - 10,061
(Gain)/loss on disposal of capital assets - (1,343)
Deferred outflows decreased (increased) - 350,308
Accounts payable and other accrued liabilities increased (decreased) 73,200 437,041 Capital asset addition in accounts payable increased (decreased) - (95,445) Insurance claims payable increased (decreased) - 962,411 Accrued retirees' health payable increased (decreased) - (10,354) Accrued leave payable increased (decreased) - 234,850
Accrued pension liability increased (decreased) - 4,290,939 Deferred inflows increased (decreased) - (818,823)
TOTAL ADJUSTMENTS 663,865 6,329,367
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 1,640,335 $ 2,036,600 See Accompanying Notes to the Basic Financial Statements.

CITY OF CYPRESS

STATEMENT OF CASH FLOWS

PROPRIETARY FUNDS
For the fiscal year ended June 30, 2021
Governmental
Activities -
Business-type
Enterprise
Funds
Sewer
Fund
Activities -
Internal Service
Funds
59 ASSETS
Cash and cash equivalents $ 224,428 $ 3,290,364
Restricted cash and investments - 161,771
Interest receivable 145 2,292
Accounts receivable 40,800
Prepaid items - 108,661
Notes receivable 428,092 -

TOTAL ASSETS 652,665 3,603,888

LIABILITIES
Current liabilities
Accounts payable and other accrued liabilities - 152,406 Unearned revenue - 35,719
Bonds payable - 165,000
Accrued leave payable - 68,645
Noncurrent liabilities
Bonds payable - 170,000
Accrued leave payable - 205,934
Retirees' health payable - 696,197
Due to other governments - 1,236,973
TOTAL LIABILITIES - 2,730,874

NET POSITION HELD IN TRUST
Restricted for:

Other governments 652,665 -
Assessment district improvements - 29,946
Member agencies - 843,068

TOTAL NET POSITION HELD IN TRUST $ 652,665 $ 873,014
See Accompanying Notes to the Basic Financial Statements.

CITY OF CYPRESS

STATEMENT OF FIDUCIARY NET POSITION

FIDUCIARY FUNDS
June 30, 2021
City of Cypress
Redevelopment
Successor
Agency to the
Custodial
Funds
Purpose Trust
Fund
Agency Private
60 Successor
Agency to the
City of Cypress
Redevelopment
Agency Private
Purpose Trust Custodial
Fund Funds
ADDITIONS:

Member contributions $ - $ 2,912,274
Investment income 10,857 18,789
Other revenue - 142,776
TOTAL ADDITIONS 10,857 3,073,839
DEDUCTIONS:

Dispatch services 2,795,858 -
Debt service - 23,512
Other expenses - 5,672
TOTAL DEDUCTIONS 2,825,042 -
CHANGE IN NET POSITION 10,857 248,797

NET POSITION - BEGINNING OF YEAR,
AS ORIGINALLY REPORTED 641,808 -
Restatement (Note 23) - 624,217

NET POSITION - BEGINNING OF YEAR,
AS RESTATED 641,808 624,217
NET POSITION - END OF YEAR $ 652,665 $ 873,014
See Accompanying Notes to the Basic Financial Statements.

CITY OF CYPRESS

STATEMENT OF CHANGES IN FIDUCIARY NET POSITION

FIDUCIARY FUNDS
For the fiscal year ended June 30, 2021
61 CITY OF CYPRESS
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2021
(1) Summary of Significant Accounting Policies
A. Reporting Entity
The City of Cypress (City) is a municipal corporation, incorporated in 1956, and governed by an elected five-member council which, along with the Cypress Recreation and Park District (District), and Cypress Recreation and Community Services Foundation (Foundation), comprise the reporting entity. As required by generally accepted accounting principles, these financial statements present the City and its component units, entities for which the City is considered to be financially accountable.

The District, although a legally separate entity, is in substance part of the City’s operations and, accordingly, District data are combined with the data of the City within these financial statements.

The balances and transactions of the District and Foundation are blended within this report in all fund types except the General Fund. Separate financial statements are prepared for the District and are available from the City. A description of the District and Foundation and discussion of the criteria used for inclusion in the reporting entity follows.

Cypress Recreation and Park District
The Cypress Recreation and Park District was formed in 1949 to provide park and recreational facilities for the areas now known as the cities of Cypress and La Palma and adjacent unincorporated areas plus small portions of the adjacent cities of Los Alamitos, Buena Park and Anaheim. The District was under the control of the Orange County Board of Supervisors until 1971, when the City of La Palma and the other aforementioned cities withdrew from the District. On June 29, 1971, the District was established as a subsidiary district of the City, effective July 1, 1971. The members of the City Council act as the governing board of the District. The District is managed by employees of the City and overhead expenses are billed to the District each year. The fiscal year-end is June 30, the same as the City.

Cypress Recreation and Community Services Foundation
The Cypress Recreation and Community Services Foundation was created in 2019 to support and enhance safe, attractive, and high quality recreation facilities, programs, and services in the City of Cypress. The Foundation is organized and operates under section 501(c)(3) of the Internal Revenue Code as a charitable organization. The members of the City Council act as the Board of Directors for the Foundation. The Foundation is managed by employees of the City. The fiscal year-end is also June 30.

B. Accounting and Reporting Policies
The City has conformed to the pronouncements of the Governmental Accounting Standards Board (GASB), which are primary authoritative statements of accounting principles generally accepted in the United States of America applicable to state and local governments.

C. Basis of Accounting, Measurement Focus and Financial Statement Presentation Government–Wide Financial Statements
The government-wide financial statements (i.e., the Statement of Net Position and the Statement of Activities) report information on all of the non-fiduciary activities of the primary government and its component units. Generally, the effect of interfund activity has been removed from the governmentwide financial statements, except for interfund services provided and used. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. 62 CITY OF CYPRESS
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2021
(1) Summary of Significant Accounting Policies (Continued) C. Basis of Accounting, Measurement Focus, Financial Statement Presentation (Continued) The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are expenses that are clearly identifiable with a specific program, project, function or segment. Program revenues of the City include: 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment, and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment of the City.

Internally dedicated resources are reported as general revenues rather than as program revenues.

Likewise, general revenues include all taxes and other items that are properly not included among program revenues.

The government-wide financial statements are reported using the flow of economic resources measurement focus and the accrual basis of accounting. With the flow of economic resources measurement focus, all assets, deferred outflows of resources, liabilities, and deferred inflows of resources associated with the government are included on the statement of net position. Net position is segregated into three primary components: net investment in capital assets, restricted net position and unrestricted net position. Under 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. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the providers have been met.

Governmental Fund Financial Statements
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. With the current financial resources measurement focus, only current assets and deferred outflows of resources, and current liabilities and deferred inflows of resources, are generally included on the balance sheet. Under 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.

Expenditures generally are recorded when a liability is incurred, as under accrual accounting.

However, debt service expenditures, as well as expenditures related to other long-term liabilities, are recorded only when payment is due.

Property taxes, franchise taxes, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual, and are therefore recognized as revenues of the current fiscal period. Grant funds earned but not received are reported as a receivable and deferred inflow of resources, and grant funds received before the revenue recognition criteria have been met are reported as unearned revenue. Other revenue items are considered to be measurable and available only when cash is received by the City.

Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds are reported as separate columns in the fund financial statements. 63 CITY OF CYPRESS
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2021
(1) Summary of Significant Accounting Policies (Continued) C. Basis of Accounting, Measurement Focus, Financial Statement Presentation (Continued) The City reports the following major governmental funds:

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

The Recreation and Park District Special Revenue Fund – This fund accounts for all resources, and operating and capital project activity of the Cypress Recreation and Park District. The primary resources of the District include a portion of the base property tax rate and user fee revenues.

The Streets Special Revenue Fund – This fund accounts for receipts and expenditures of money apportioned under the State of California Streets and Highway Code Sections 2103, 2105, 2106, 2107 and 2107.5 (Gas Tax) and Section 2032(h) (Road Maintenance and Rehabilitation Act); Measure “M2” money from Orange County; and Traffic Mitigation Fees charged by the City.

The City Capital Projects Fund – This fund accounts for construction of major transportation infrastructure and public facilities. The resources of the fund are limited to transfers from the City’s General fund and grant reimbursements for eligible projects.

The City reports the following major proprietary fund:

The Sewer Fund – This fund accounts for all of the operating and capital project activities associated with the City’s sanitary sewer system. The resources of the fund are primarily fees charged to the users of the system.

Additionally, the City reports the following fund types:

Governmental Funds
The Special Revenue Funds – These funds account for the proceeds of specific revenue sources that are legally restricted to expenditures for specified purposes.

Proprietary Funds
Internal Service Funds – Internal Service Funds are used to account for the financing of goods and services provided by one department of the City to other departments or agencies of the City on a pro-rata cost-sharing basis. The City currently uses internal service funds for the following activities:
central services (which includes print shop, information systems, phone and equipment maintenance, building and grounds maintenance for the City’s Civic Center and Corporate Yard, fleet maintenance for City vehicles and equipment, and for accumulating and expending monies for capital equipment acquisition and replacement), recreation central services (which includes the District’s maintenance of equipment and the accumulation and expending of monies for the acquisition and replacement of District capital equipment items), employees’ benefits, general liability insurance, and workers’ compensation.
64 CITY OF CYPRESS
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2021
(1) Summary of Significant Accounting Policies (Continued) C. Basis of Accounting, Measurement Focus, Financial Statement Presentation (Continued) Proprietary funds are accounted for using the economic resources measurement focus and use the accrual basis of accounting. Under this method, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred. All proprietary funds are accounted for on a cost of services or economic resources measurement focus. This means that all assets, deferred outflows of resources, liabilities, and deferred inflows of resources (whether current or noncurrent) associated with their activity are included on the Statement of Net Position. Proprietary fund type operating statements present increases (revenues) and decreases (expenses) in total net position.

Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the enterprise fund are charges to customers for use of the sanitary sewer system, while the principal operating revenues of the internal service funds are charges to departments in the governmental funds of the City for services. Operating expenses for the enterprise fund and the internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses.

The City’s internal service funds are presented in the proprietary funds financial statements. Because the principal users of the internal services are the City’s governmental activities, the financial statements of the internal service funds are consolidated into the governmental activities column when presented in the government-wide financial statements. To the extent possible, the cost of these services is reported in the appropriate functional activity (general government, public safety, public works, etc.)
Fiduciary Funds
Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are reported in a separate Statement of Fiduciary Net Position. These funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the City’s operations. Fiduciary funds are reported using the accrual basis of accounting.

Custodial Funds – Custodial funds are used to report fiduciary activities in which the City acts as an agent. These funds do not involve measurement of the results of City operations. The City’s custodial funds include the Cypress Business and Professional Center Assessment District and amounts held on behalf of the West Cities Communication Center Joint Powers Authority.

Private-Purpose Trust Funds – A Private-Purpose Trust fund is used to account for the activities of the Successor Agency to the Cypress Redevelopment Agency in which the City acts as an agent.

Net position is reported as net position held in trust. Under the accrual basis of accounting, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred.

D. Cash and Investments
Investments are classified within the financial statements as “Cash and investments” and are stated at fair value, which is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. All investment income, including changes in the fair value of investments, is recognized as revenue in the operating statement.
65 CITY OF CYPRESS
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2021
(1) Summary of Significant Accounting Policies (Continued) D. Cash and Investments (Continued)
All cash and investments of proprietary funds are held in the City’s investment pool. Therefore, all cash and investments in the proprietary funds are considered cash and cash equivalents for purposes of the statement of cash flows as these cash pools have the general characteristics of a demand deposit account.

Restricted Cash and Investments
The City established a Post-Employment Benefits Trust (Trust) as a tax-exempt trust within the meaning of Section 115 of the Internal Revenue Service Code to accumulate resources for the CalPERS pension obligations. The trust may also be used to stabilize the amount of General Fund resources needed to meet future required contributions to CalPERS. The balances and activities of the Trust are irrevocably dedicated to funding future obligations to CalPERS. These amounts are reflected as restricted cash and investments in the Employees’ Benefit Internal Service Fund.

E. Inventories and Prepaid Amounts
Inventories are valued at average cost and consist primarily of fuel and postage. The City follows the consumption method for inventory control whereby inventory items are reported as expenditures when consumed rather than when purchased.

Certain payments to vendors reflect costs applicable to a future accounting period and are recorded as prepaid items in both government-wide and fund financial statements. Prepaid items are recorded as expenditures/expenses when consumed rather than when purchased.

F. Advances to Other Funds
Long-term interfund advances are reported as a receivable in the advancing fund, and a long-term liability is recorded in the fund receiving the advance.

G. Capital Assets
Capital assets, which include land, machinery and equipment (vehicles, computers, etc.), buildings and improvements, and infrastructure assets (street systems, storm drains, sewer systems, etc.), are reported in governmental activities column of the government-wide financial statements. Capital assets are defined by the City as all land and buildings, vehicles, computers and equipment with an initial individual cost of more than $1,000; and improvements and infrastructure assets with costs of more than $10,000, and a life in excess of one year. Purchased or constructed assets are recorded at historical cost or estimated historical cost. Donated or annexed capital assets are recorded at acquisition value at the date of donation or annexation.

The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Depreciation is recorded in the government-wide financial statements on a straight-line basis over the estimated useful life of the assets as follows:

Building and Improvements 10 to 40 years
Machinery and Equipment 3 to 10 years
Infrastructure 20 to 65 years
66 CITY OF CYPRESS
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2021
(1) Summary of Significant Accounting Policies (Continued) H. Compensated Absences
Compensated leave for all permanent employees is paid by the Employees’ Benefit Internal Service Fund. The accrued leave payable represents the estimated liability for all accrued vacation, compensatory time, and 50% of the sick leave, as noted below, for all employees of the reporting entity. However, amounts greater than 50% of the sick leave have been accrued for certain Police Association members eligible for Service Retirement. The Employee Benefit Fund is funded by payroll charges to other funds based on benefits earned during that year. Compensated absences are primarily considered a long-term liability, as accruals earned in each fiscal year are generally sufficient to cover leave taken during the same fiscal year. An estimate has been made for the portion of the liability at fiscal year-end that will be due within one year for any employees terminating employment and receiving a payoff of their accrued leave balances.

Permanent employees may accumulate unlimited sick leave hours. Employees with 5 or more years of service terminated for any reason, and having 60 days or more of accumulated sick leave (equal to 480 hours), will be paid for 50% of their accumulated sick leave. Employees with 5 or more years of service terminated for any reason, and having between 240 hours and 480 hours, will be paid for 50% of their accumulated sick leave in excess of 240 hours. Employees having less than 240 hours will not be paid for their accumulated sick leave. The accumulation of vacation leave is generally limited to twice an employees’ annual accrual. Employees who terminate for any reason are paid 100% of their accumulated vacation pay.

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

In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.

J. 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 have been determined by an independent actuary.

For this purpose, benefit payments are recognized when currently due and payable in accordance with the benefit terms. The Employees’ Benefit Internal Service Fund, which is funded primarily through charges from the General Fund, is typically used to liquidate OPEB liabilities. 67 CITY OF CYPRESS
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2021
(1) Summary of Significant Accounting Policies (Continued) J. Other Postemployment Benefits (OPEB) (Continued)
Generally accepted accounting principles require that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used:

Valuation Date June 30, 2021
Measurement Date June 30, 2021
Measurement Period July 1, 2020 to June 30, 2021
Gains and losses related to changes in total OPEB liability are recognized in OPEB expense systematically over time. Amounts are first recognized in OPEB expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to OPEB and are to be recognized in future OPEB expense.

The recognition period may differ depending on the source of the gain or loss. The net difference between projected and actual earnings on OPEB plan investments are amortized over a closed 5- year period. The City, however, does not have an OPEB trust, so there are no deferred inflows or outflows related to this item. All other amounts are amortized over the expected average remaining service lifetime of plan participants.

K. Net Position and Fund Equity
In the government-wide financial statements and the proprietary fund financial statements, net position is classified in the following categories:

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

Restricted Net Position – This component of net position is restricted by external creditors, grantors, contributors, or laws or regulations of other governments.

Unrestricted Net Position – This component of net position consists of all net position that does not meet the definition of “net investment in capital assets” or “restricted net position.” In the governmental fund financial statements, fund balances are classified in the following categories in accordance with GASB Statement No. 54:

Nonspendable – Nonspendable fund balances encompass Items that cannot be spent because they are not in spendable form, such as prepaid items, inventories, and long-term receivables, and items that are legally or contractually required to be maintained intact, such as principal of an endowment or revolving loan funds.

Restricted – Restricted fund balances encompass the portion of net fund resources subject to externally enforceable legal restrictions. This includes externally imposed restrictions by creditors, such as through debt covenants, grantors, contributors, laws or regulations of other governments, as well as restrictions imposed by law through constitutional provisions or enabling legislation. 68 CITY OF CYPRESS
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2021
(1) Summary of Significant Accounting Policies (Continued) K. Net Position and Fund Equity (Continued)
Committed – Committed fund balances encompass the portion of net fund resources, the use of which is constrained by limitations that the government imposes upon itself at its highest level of decision making, normally the governing body, and that remain binding unless removed in the same manner.

The City Council is considered the highest authority for the City and the adoption of a formal resolution or the formal award of a contract by the City Council is required to establish a fund balance commitment. Additionally, commitments (other than those associated with the award of a contract) can only be modified or rescinded by the adoption of a formal resolution of the City Council.

Assigned – Assigned fund balances encompass the portion of net fund resources reflecting the government’s intended use of resources. Assignment of resources can be done by the highest level of decision making or by an official designated for that purpose. The City Council has adopted a resolution that authorizes the Director of Finance to assign fund balances.

Unassigned – Unassigned fund balances encompass the residual balance for the City’s General Fund and includes all spendable amounts not contained in other classifications. In other funds, the unassigned classification is used only to report a deficit balance resulting from overspending for specific purposes for which amounts had been restricted, committed, or assigned.

L. Spending Policy
In the government-wide financial statements, when expenses are incurred for purposes for which both restricted and unrestricted net position are available, the City’s policy is to apply restricted net position first.

In the governmental fund financial statements, when expenditures are incurred for purposes for which all categories of fund balances are available, the City’s general policy is to apply the expenditures against fund balance in the following order: restricted, committed, assigned, and unassigned.

M. 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 certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates and assumptions.
69 CITY OF CYPRESS
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2021
(1) Summary of Significant Accounting Policies (Continued) N. New Accounting Pronouncements
Current Year Standards:

The City adopted the following new accounting pronouncements:
 GASB Statement No. 84 – “Fiduciary Activities”, effective for periods beginning after December 15, 2019.
 GASB Statement No. 90 – “Majority Equity Interests – an amendment of GASB Statement No. 14 and No. 61” becomes effective for fiscal years beginning after December 15, 2019.  GASB Statement No. 98 – “The Annual Comprehensive Financial Report” was implemented earlier than required.

Pending Accounting Pronouncements:

GASB has issued the following statements which may impact the City’s financial reporting requirements in the future:
 GASB Statement No. 87 – “Leases” becomes effective for fiscal years beginning after June 15, 2021.
 GASB Statement No. 89 – “Accounting for Interest Cost Incurred before the End of a Construction Period”, effective for periods beginning after December 15, 2020.  GASB Statement No. 91 – “Conduit Debt Obligations” becomes effective for fiscal years beginning after December 15, 2021.
 GASB Statement No. 94 – ”Public-Private and Public-Public Partnerships and Availability Payment Arrangements” becomes effective for fiscal years beginning after June 15, 2022.  GASB Statement No. 96 – “Subscription-Based Information Technology Arrangements” becomes effective for fiscal years beginning after June 15, 2022.

O. Deferred Outflows/Inflows of Resources
In addition to assets, the Statement of Net Position and governmental funds’ Balance Sheet will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to future periods and so will not be recognized as an outflow of resources (expenditure) until that time. The deferred outflows of resources relate to pensions and other postemployment benefits.

There are various deferred outflow amounts related to CalPERS pensions. First is the amount of employer contributions made after the measurement date of the net pension liability, which will be recognized in the following fiscal year. The second item is a deferred outflow related to pensions for the net difference between projected and actual earnings on pension plan investments, which will be amortized over five years. Other items include the difference between expected and actual experience, changes in assumptions, and the adjustments due to differences in proportions. These amounts are amortized over a closed period equal to the average of the expected remaining service lives of all employees that are provided with pensions determined for the June 30, 2020 measurement date, which is 3.8 years for both Safety Plan and Miscellaneous Plan members. 70 CITY OF CYPRESS
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2021
(1) Summary of Significant Accounting Policies (Continued) O. Deferred Outflows/Inflows of Resources (Continued)
The deferred outflows related to the OCERS pension plan is the combined difference between expected and actual experience and assumption changes, which will be recognized over the average expected remaining service lives of all employees that are provided with pensions through OCERS, which for this measurement period is 5.81 years.

The deferred outflows related to other postemployment benefits is combined of the difference between expected and actual experience and assumption changes. These amounts are amortized over the average expected remaining active and inactive service lives as of the June 30, 2021 measurement date, which is 8.4 years.

In addition to liabilities, the Statement of Net Position and governmental funds’ Balance Sheet may report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to future period(s) and so will not be recognized as an inflow of resources (revenue) until that time.

The City reported three items in this category. The first item, which arises only under the modified accrual basis of accounting, is unavailable revenues, which is reported only in the governmental funds’ Balance Sheet. The governmental funds report unavailable revenues from one source, accounts receivable. Unavailable revenues are primarily capital project grants, or other revenues, which have been earned, but not received within 60 days after year-end. This amount is deferred and recognized as an inflow of resources in the period that the amounts become available.

The second item is a deferred inflow related to pensions. For CalPERS pensions, the deferred inflow is the result of differences in expected and actual actuarial experience, changes in actuarial assumptions, adjustments due to changes in proportions, and differences between employer’s contributions, the proportionate share of contributions, and differences between projected and actual earnings. The changes in projected and actual investment earnings are recognized over five years, beginning with the year in which they occur. The remaining items are amortized over a closed period equal to the average of the expected remaining service lives of all employees that are provided with pensions. For CalPERS pensions, the remaining service life as determined for the June 30, 2020 measurement date is 3.8 years for both the Safety Plan and the Miscellaneous Plan.

The deferred inflow related to the OCERS pension plan is the net difference between projected and actual earnings on pension plan investments, which will be recognized over a period of five years, beginning with the year in which they occur.

The third item is a deferred inflow related to other postemployment benefits. The deferred inflow is the result of changes in actuarial assumptions. This amount is amortized over a closed period equal to the expected average remaining service lives of plan participants. 71 CITY OF CYPRESS
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2021
(1) Summary of Significant Accounting Policies (Continued) P. Pensions
For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the City’s fiduciary net position in the California Public Employees’ Retirement System (CalPERS) and Orange County Employees Retirement System (OCERS) plans and additions to/deductions from the plans’ fiduciary net position have been determined on the same basis as they are reported by CalPERS and OCERS, respectively. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. The Employees’ Benefit Internal Service Fund, which is funded primarily through charges from the General Fund and the Recreation and Park District General Fund, is typically used to liquidate CalPERS and OCERS pension liabilities, respectively.
(2) Property Taxes
Property taxes include assessments on both secured and unsecured property. Secured property taxes attach as an enforceable lien on property as of January 1. Taxes are levied on July 1 and are payable in two installments on December 10 and April 10. The County of Orange (County) bills and collects the property taxes and remits them to the City in installments during the year. City property tax revenues are recognized when levied to the extent that they result in current receivables, defined as being received within 60 days after year-end.

The County is permitted by State Law (Proposition 13) to levy taxes at 1% of full market value (at time of purchase) and can increase the property tax rate no more than 2% per year. The City receives a share of this basic levy proportionate to what it received in the 1976 to 1978 period adjusted by State mandated transfers to the various school districts in fiscal years ended June 30, 1993 and June 30, 1994.
(3) Cash and Investments
The City follows the practice of pooling cash and investments for all funds. Certain restricted funds that are held and invested by independent outside custodians through contractual bond indenture agreements are not pooled, and are reported as restricted cash and investments.

Investment income earned on pooled cash and investments is allocated quarterly to the various funds based on the average cash balance in each fund. Investment income from cash and investments with fiscal agents is credited directly to the fund earning the income. 72 CITY OF CYPRESS
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2021
(3) Cash and Investments (Continued)
Authorized Investments
Under provision of the City’s annually adopted investment policy, and in accordance with Section 53601 of the California Government Code, the City may deposit and invest in the following:
 Securities of the U.S. Government
 Federal Agency Issues
 Certificates of Deposit (or Time Deposits) placed with commercial banks and/or savings and loan companies
 Bankers’ Acceptances
 Commercial Paper
 Negotiable Certificates of Deposit
 Medium-term Corporate Notes
 Local Agency Investment Fund (LAIF)
 Investment Trust of California (CalTRUST)
 Money Market Mutual Fund
 Passbook Savings Account Demand Deposits
A five-year maximum maturity for each investment is allowed unless an extension of maturity is expressly permitted by the City Council, with the exception of Certificates of Deposit, Bankers’ Acceptances, and Commercial Paper, which are one year, 180 days, and 270 days respectively.

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

Deposits and Risks
At June 30, 2021, the carrying amount of the City’s demand deposits was $3,594,735. The bank balances of these funds totaled $4,081,967 and were either covered by federal depository insurance or were held in collateralized accounts. If there were amounts not covered by federal depository insurance, the California Government Code requires California banks and savings and loans associations to secure a City’s deposit by pledging government securities with a value of 110% of a City’s deposits, or by pledging first trust deed mortgage notes having a total value of 150% of the City’s total deposits.
73 CITY OF CYPRESS
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2021
(3) Cash and Investments (Continued)
Deposits and Risks (Continued)
The following is a summary of pooled cash and investments, including restricted cash and investments, as of June 30, 2021:

Restricted cash and investments held by the fiscal agent which are reported in governmental activities include the pension trust fund, which includes restricted pension obligations. In the fiduciary agency fund, restricted cash and investments relate to monies held by fiscal agents for special assessment bonds.

Cash and investments, as of June 30, 2021, consist of the following deposits, and investments and maturities:

The City’s investment policy and the California Government Code generally limit the amount that can be invested in any one issuer, except for U.S. Treasury securities and U.S. government-sponsored enterprises. At June 30, 2021, investments in Federal Home Loan Bank securities totaling $9,783,424 represented 5.10% of the City’s investments (other than external investment pools). The Federal Home Loan Bank is a government-sponsored enterprise and there is no limit on the percentage of the portfolio that can be invested in this category.

Fiduciary
Funds
Governmental Business-type Statement of
Activities Activities Net Position Totals
Cash and investments $ 168,874,271 $ 5,204,070 $ 3,514,792 $ 177,593,133 Restricted cash and investments 17,913,583 161,771 - 18,075,354 Totals $ 186,787,854 $ 5,204,070 $ 3,676,563 $ 195,668,487 Government Wide Statement
of Net Position
12 Months 13 to 24 25 to 60 More than
Amount or Less Months Months 60 Months
Deposits:

Demand Deposits 3,594,738 $ 3,594,738
Restricted Deposits 1,668 1,668
Investments:

State of California Local Agency
Investment Fund 136,011,284 136,011,284
CalTrust Short Term Fund 2,005,329 2,005,329
CalTrust Medium Term Fund 21,996,522 21,996,522
Federal Farm Credit Bank 4,001,040 $ 4,001,040
Federal Home Loan Bank 9,984,220 9,984,220
Restricted Cash and Investments: -
Money Market Accounts 160,103 160,103
PARS Mutual Funds 17,913,583 17,913,583
Total Cash and Investments 195,668,487 $ $ 181,683,227 $ 13,985,260 - $ $ - Remaining Maturity
74 CITY OF CYPRESS
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2021
(3) Cash and Investments (Continued)
Deposits and Risks (Continued)
Interest Rate Risk. As a means of limiting its exposure to fair value losses arising from rising interest rates, the City’s investment policy provides that final maturities of securities cannot exceed five years.

At June 30, 2021, the City’s pooled cash and investment portfolio had a maturity of less than one year with an average life of the portfolio of approximately 117 days.

Credit Risk. State law limits investments in commercial paper and corporate bonds to the top two ratings issued by nationally recognized statistical rating organizations (NRSROs). It is the City’s practice to limit its investments in these investment types to the top rating issued by NRSROs, including raters Standard & Poor’s and Moody’s Investors Service. At June 30, 2021, the City’s money market mutual accounts were rated AAAm by Standard & Poor’s. The Federal Farm Credit Bank and Federal Home Loan Bank investments were rated AA+ rated by Standard & Poor’s and Aaa by Moody’s. The California Local Agency Investment Fund (LAIF) is not rated, but has a separate investment policy governed by Government Code Sections 16480-16481.2 that provides credit standards for its investments. There is no minimum legal rating.

Custodial Credit Risk. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party.

All securities owned by the City with the exception of LAIF and CalTRUST are deposited in trust for safekeeping with a custodial bank. Securities are not held in broker accounts. The California Government Code and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits: California Government Code requires a financial institution to secure deposits made by local governments by pledging securities in an undivided collateral pool held by a depository regulated under state law. The fair value of pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the governments. The investment in a Repurchase Agreement is uninsured with the collateral for the repurchase agreement held in the name of the bank but not the name of the City. For investments identified herein as held by a fiscal agent, the trustee selects the investment under the terms of the applicable trust agreement, acquires the investment, and holds the investment on behalf of the City.

External Investment Pool
The City is a voluntary participant in LAIF, which is an external investment pool regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California through which local governments may pool investments. The City and the District each may invest up to $75,000,000 in the fund. Investments in LAIF are considered highly liquid, as deposits can be converted to cash within 24 hours without loss of interest.

The City values its investments in LAIF at a fair value provided by LAIF. LAIF determines fair value on its investment portfolio based on market quotations for those securities where market quotations are readily available, and on amortized cost or best estimate for those securities where market value is not readily available. At June 30, 2021 the factor used was 1.00008297. The City’s investment with LAIF includes a portion of pool funds invested in structured notes and asset-backed securities. As of June 30, 2021, the City had total deposits of $136,000,000 invested in LAIF, with a fair value of $136,011,284. LAIF had invested 1.10% of its portfolio in structured notes and medium-term assetbacked securities. 75 CITY OF CYPRESS
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2021
(3) Cash and Investments (Continued)
External Investment Pool (Continued)
The City also participates in the Investment Trust of California (CalTrust), a joint powers authority and public agency established by its members under the provisions of Section 6509.7 of the California Government Code. Members and participants are limited to California public agencies. CalTrust is governed by a Board of Trustees comprised of experienced local agency finance professionals, members of the governing body, or officers or personnel of public agency CalTrust members. The City reports its investment in CalTrust at the fair value amount provided by CalTrust, which is the same as the value of the pool shares. There is no legal minimum or maximum investment in CalTrust, however, the City has set a policy limit of $50,000,000.

Fair Value Measurements
The City categorizes its fair value measurement within the fair value hierarchy established by Generally Accepted Accounting Principles. The hierarchy is based on the relative inputs used to measure the fair value of the investments. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

The three levels of the fair value hierarchy are described as follows:

Level 1: Inputs to the valuation methodology are unadjusted quoted prices for identical assets in active markets that the City has the ability to access.

Level 2: Inputs to the valuation methodology include:
 Quoted prices for similar assets in active markets;
 Quoted prices for identical or similar assets in inactive markets;  Inputs other than quoted prices that are observable for the asset;  Inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurement. Unobservable inputs reflect the City’s own assumptions about the inputs market participants would use in pricing the asset (including assumptions about risk). Unobservable inputs are developed based on the best information available in the circumstances and may include the City’s own data.

The asset’s level within the hierarchy is based on the lowest level of input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

The determination of what constitutes observable requires judgment by the City’s management. City management considers observable data to be that market data which is readily available, regularly distributed or updated, reliable, and verifiable, not proprietary, and provided by multiple independent sources that are actively involved in the relevant market.

The categorization of an investment within the hierarchy is based upon the relative observability of the inputs to its fair value measurement and does not necessarily correspond to City management’s perceived risk of that investment.
76 CITY OF CYPRESS
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2021
(3) Cash and Investments (Continued)
Fair Value Measurements (Continued)
The methods described may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. The use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

When available, quoted prices are used to determine fair value. When quoted prices in active markets are available, investments are classified within Level 1 of the fair value hierarchy. When quoted prices in active markets are not available, fair values are based on evaluated prices received by the City’s asset broker or custodian.

The following is a description of the recurring valuation methods and assumptions used by the City to estimate the fair value of its investments.

The City’s management has valued the Federal Farm Credit Bank and Federal Home Loan Bank in Level 2 based on quoted prices for similar assets. LAIF, Money Market and Mutual Funds are uncategorized.
(4) Notes Receivable
Changes in Notes Receivable
The following is a summary of note receivable transactions for governmental activities for the year ended June 30, 2021:

Home Loans
The dissolved Cypress Redevelopment Agency (Agency) administered two loan programs to assist qualified low and/or moderate income applicants. Upon dissolution of the Agency, the administration and the outstanding notes associated with these two loan programs were transferred to the City’s Low and Moderate Housing Assets Special Revenue Fund. The Home Equity Loan Program (HELP I) provided loans in the form of notes up to $25,000 for down payment assistance to eligible first time homebuyers. Payments on the notes were deferred for the first five (5) years with no interest during the deferral period. The loan becomes due and payable on a monthly basis in years 6 through 30 with a 5% interest rate assessed during the amortization period. Effective with the dissolution of the Agency on February 1, 2012, the HELP I program assets were transferred to the City’s Low and Moderate Housing Assets Fund and no new HELP I loans are expected to be issued.

Balance Balance Due Within Due in More
Description July 1, 2020 Additions Deletions June 30, 2021 One Year than One Year Home Loans $ 707,279 $ 20,000 $ (145,181) $ 582,098 $ 10,000 $ 572,098 Housing Covenants 9,971,138 222,750 10,193,888 - 10,193,888 - Other Notes 5,994 - (428) 5,566 428 5,138 Subtotal 10,684,411 242,750 (145,609) 10,781,552 10,428 10,771,124 Less: Allow ance (10,437,212) (242,750) 106,791 (10,573,171) (10,573,171) - Total $ 247,199 $ (38,818) - $ $ 208,381 $ 10,428 $ 197,953 Classification
77 CITY OF CYPRESS
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2021
(4) Notes Receivable (Continued)
Home Loans (Continued)
The Home Enhancement Loan Program (HELP II) provides loans to assist single family homeowners with home improvement costs. Moderate income applicants are eligible for loans of up to $20,000 with a 5% interest rate and payment deferred for the full 15-year term of the loan. The loans become due and payable in full upon sale, transfer of title, cash out refinances, or the end of the loan term, whichever comes first. Lower income applicants can qualify for no interest, forgivable loans of up to $20,000. The principal amounts for the forgivable loans are reduced by ten percent (10%) annually and are completely forgiven after ten years. Some of the HELP II notes are eligible for federal grant reimbursement to the City upon issuance and are recorded in the General Fund. Effective with the dissolution of the Agency on February 1, 2012, the HELP II program assets previously funded by the Agency were transferred to the City’s Low and Moderate Housing Assets Special Revenue Fund. Any new loan issuances will be limited to those that are funded with federal grant reimbursements and recorded in the General Fund.

In the fund financial statements and government-wide statements for all loans, a note receivable is recorded when issued to the homeowner and is decreased upon repayment. The City holds notes due from homeowners totaling $202,816 (which is net of an allowance of $379,282 for forgivable loans) at June 30, 2021 in both the fund financial statements and the government-wide statements.

Housing Covenants
The City holds notes receivable totaling $10,193,888 (including accrued interest) related to affordability covenants entered into by the dissolved Agency associated with the following five projects described below. Upon dissolution of the Agency on February 1, 2012, the notes were transferred to the City and are recorded in the Low and Moderate Housing Assets Special Revenue Fund.

In 2004, the 13-unit Lincoln Glen townhome project was constructed in the Lincoln Avenue Redevelopment Project Area. To address the inclusionary affordability requirement triggered by the development, five (5) units were restricted for sale to affordable households. Silent second first-time homebuyer loans were provided to secure long term (45 year) affordability covenants on these units.

The loans provide for interest to accrue at a rate of 7% per year. Two (2) units received $57,700 loans and were reserved for low income households (80% or less of County median income), and three (3) units received $37,350 loans and were reserved for moderate income households (up to 120% of County median income). Four of the loans (and their associated affordability covenants) were recorded in late 2004 and the remaining loan closed in early 2005. These loans, totaling $227,450 plus accrued interest of $444,020 at June 30, 2021, will be forgiven at the end of the 45 year covenant term.

To address the inclusionary affordability requirement triggered by the construction of the 63-unit Lincoln Square town project in 2007, ten (10) units received $35,000 silent second loans which covenanted them as affordable to moderate income households for a period of 45 years. All the loans were recorded in 2007 and provide for interest to accrue at a rate of 7% per year. All of the loans, totaling $350,000 plus accrued interest of $517,062 at June 30, 2021, are forgivable at the end of the covenant term.
78 CITY OF CYPRESS
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2021
(4) Notes Receivable (Continued)
Housing Covenants (Continued)
In 2004, the Agency entered into an affordable housing agreement to provide a $774,473 loan to Habitat for Humanity of Orange County to acquire a property and build seven (7) townhome units known as the Cypress Heather development. The units were sold to very low income families (with incomes not exceeding 50% of the County’s median). Each family assumed one-seventh of the Agency’s loan with Habitat and these loans were recorded in 2007 and secured 45 year affordability covenants on the units. The loans provide for interest to accrue at a rate of 7% and be added to the loan principal each year. The loans, totaling $774,473 plus accrued interest of $1,091,887 at June 30, 2021, are forgivable at the end of the 45 year term.

In 2009, the Agency entered into an agreement to purchase long-term affordability covenants at the Tara Village apartment complex. The agreement provided a $6,788,996 loan to the owner of the apartment complex in exchange for reserving 80 units for rental to lower income households for 55 years, with 40 units reserved for very low income families and 40 units reserved for low income families. The loan is forgivable at the end of the covenant term.

In the fund financial statements, a note receivable is recorded upon initial funding of the loan with a corresponding amount recorded as an allowance for uncollectable amount since these notes will likely be forgiven prior to payment being due. This results in no impact to the fund balance reported in the fund financial statements. Similarly in the government-wide statements, a note receivable is recorded when issued to the homeowner and would be decreased upon a repayment. However since all the loans associated with covenants are forgivable and will likely never be repaid, an allowance for forgivable loans of $10,193,888 has fully offset the amount reported as notes receivable in the government-wide statements at June 30, 2021.
(5) Interfund Transactions
Interfund Balances
The following summarizes the total due to and from other funds as of June 30, 2021:

The outstanding balances between funds result from interfund borrowings and to cover cash flow deficits resulting from annual operating transfers to other funds.

General
Fund Total
Non-major Governmental Funds 23,053 $ $ 23,053
Total $ 23,053 $ 23,053
Due To Due From
79 CITY OF CYPRESS
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2021
(5) Interfund Transactions (Continued)
Interfund Advances
On February 26, 2018, the City approved an advance of $490,874 from the General Fund to the AB 2766 Trip Reduction Fund for the purchase of a compressed natural gas sewer cleaning truck. The advance occurred on May 3, 2019 after the sewer truck was received and payment was made. The advance is to be repaid, at zero percent interest, by annual payments from the Assembly Bill 2766 revenues which are to be used to reduce air pollution from motor vehicles. The use of this funding was approved by the South Coast Air Quality Management District. During fiscal year 2020-21, $64,337 was repaid, leaving a remaining balance of $226,304 at June 30, 2021. It is anticipated the advance will be fully repaid by fiscal year 2024-25.

On January 28, 2019, the City approved an advance of up to $900,000 from the City Capital Projects Fund to the Cypress Recreation and Park District Special Revenue Fund for the design of a 9-acre sports park. The District will pay interest annually on June 30 at the California Local Agency Investment Fund (LAIF) rate. The principal will be repaid on or before June 30, 2024 from future park development fees (if available), and the five-year term can be extended by mutual agreement. During fiscal year 2020-21, additional advances for design costs totaled $3,013, bringing the total outstanding advance to $426,409 at June 30, 2021. Interest of $2,215 was earned and paid on the outstanding balance, based on an average LAIF rate of 0.522%.

On February 8, 2021, the City approved an advance of up to $12,800,000 from the City Capital Projects Fund to the Cypress Recreation and Park District Special Revenue Fund for the construction of the 9-acre sports park, subsequently named Lexington Park. The District will pay interest annually on June 30 at the California LAIF rate. The principal will be repaid from anticipated park development fees (if available) on or before June 30, 2025, and the five-year term can be extended by mutual agreement. During fiscal year 2020-21, advances for construction costs began in March and totaled $5,418,286 at June 30, 2021. Interest of $1,781 was earned and paid on the outstanding balance, based on an average LAIF rate of 0.522%.

Nonmajor Speical
Governmental Revenue
AB 2766 Trip Recreation and Park
Reduction Fund District Fund Total
General Fund $ 226,304 $ 226,304 - $
Capital Projects Fund - 5,844,695 5,844,695
Total $ 226,304 $ 5,844,695 $ 6,070,999
Advances to Advances from
80 CITY OF CYPRESS
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2021
(5) Interfund Transactions (Continued)
Interfund Transfers
With City Council approval, resources may be transferred from one City fund to another. The purpose of transfers is to move funding from its original source to the fund in which the authorized expenditures occur. Transfers between funds during the fiscal year ended June 30, 2021 are as follows:

The transfer to the General Fund from the Streets Fund provided resources for street maintenance.

The transfer to the General Fund from the non-major Governmental Funds provided resources for Traffic Safety, cable television equipment, administrative costs associated with the Stanton Channel Maintenance District and Lighting District funds, and CARES Act reimbursements for COVID-19 expenditures.

The transfers to the Capital Projects Fund – City from the General Fund were for capital projects approved by City Council as part of the first year of the Seven-Year Capital Improvement Program and for the set-aside of monies for future capital improvement projects.

The transfer to the Capital Projects Fund – City from the Recreation and Park District Fund are former Agency property tax increment amounts that are now allocated to the District due to the dissolution of the Agency. These amounts are being transferred to repay capital project expenditures benefitting the District.

The transfer to the Capital Projects Fund – City from the Streets Fund provided funding for eligible capital improvements for residential street resurfacing, concrete and sidewalk rehabilitation, and median restoration.

The transfer to the Capital Projects Fund – City from the non-major Governmental Funds provided funding for the Police Modernization/Seismic Retrofit project.

The transfer to the Streets Special Revenue Fund from the non-major Governmental Funds provided funds for street widening to accommodate the new sports park.

Recreation Non-major
General and Park Streets Governmental
Fund District Fund Fund Funds Totals
General Fund $ - $ 596,702 - $ $ 726,558 $ 1,323,260
Capital Projects
Fund - City 2,050,000 845,780 1,316,148 2,151,229 6,363,157 Special Revenue
Funds - Streets - - 6,395 - 6,395
Internal Service Funds 171,607 249,148 24,852 - 445,607 Totals $ 2,221,607 $ 1,094,928 $ 1,912,850 $ 2,909,034 $ 8,138,419 Transfers Out Transfers In
81 CITY OF CYPRESS
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2021
(5) Interfund Transactions (Continued)
Interfund Transfers (Continued)
The transfer from the General Fund to the Internal Service Funds provided $150,000 to the Employees’ Benefit Fund for investment in the pension trust, and $21,607 for capital equipment.

The transfers to the Internal Service Funds from the various City operating funds provided $150,000 for future OCERS pension costs and resources for the initial purchase of capital outlay items in the City’s Central Services Funds.
(6) Assets Available for Resale
During the fiscal year ended June 30, 2004, the former Redevelopment Agency acquired a parcel of land with a cost of $1,421,708 located at 5732 Lincoln Avenue. At the time of purchase, it was the intent of the Agency to resell this parcel for the development of low and moderate income housing units. The parcel was transferred to the City upon dissolution of the Agency on February 1, 2012. As of June 30, 2021, the City maintains ownership of the parcel of land and $1,421,708 is classified as assets available for resale in the Low and Moderate Housing Assets Fund.

On November 15, 2006, the Agency purchased approximately 13.33 acres of land located at the northwest corner of Winners Circle and Katella Avenue. The basis of the land was $20,257,703 and it was the intent of the Agency to enter a Development and Disposition Agreement with a developer for retail development that was consistent with the goals of the Agency. On March 8, 2011, the Agency sold the land to the City for its appraised value of $18,580,000, however, the land was written down to its fair market value of $12,500,000 in fiscal year 2014-15, based on a broker opinion of value. Due to additional investments in the property, the cost basis grew to $12,712,962.

In November 2019, the City entered into a Disposition and Development Agreement for the sale of the property to SP Acquisition, LLC for a mixed-use development project. The property was sold on November 23, 2020 for $15,250,000.
(7) Capital Assets and Depreciation
In accordance with GASB 34, the City has reported all capital assets including infrastructure in the Government-Wide Statement of Net Position. The City elected to use the basic approach (as defined by GASB 34) for all infrastructure reporting in which depreciation expense and accumulated depreciation has been recorded. At June 30, 2021, the City’s capital assets consisted of the following:
82 CITY OF CYPRESS
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2021
(7) Capital Assets and Depreciation (Continued)
The following is a summary of changes in the capital assets for governmental activities during the fiscal year:

Capital Assets, Not Depreciated:

Land $ 9,734,882 $ $ 9,734,882 -
Construction in Progress 13,185,847 105,742 13,291,589
Total, Not Depreciated 22,920,729 105,742 23,026,471
Capital Assets, Being Depreciated:

Buildings and Improvements 38,390,119 38,390,119 -
Machinery and Equipment 11,209,381 11,209,381 -
Infrastructure 233,683,122 34,445,054 268,128,176
Total, Being Depreciated 283,282,622 34,445,054 317,727,676 Less Accumulated Depreciation:

Buildings and Improvements (20,093,724) (20,093,724) -
Machinery and Equipment (7,720,733) - (7,720,733)
Infrastructure (112,116,269) (15,228,029) (127,344,298) Total Accumulated Depreciation (139,930,726) (15,228,029) (155,158,755) Total Depreciated, Net 143,351,896 19,217,025 162,568,921 Total Capital Assets, Net $ 166,272,625 $ 19,322,767 $ 185,595,392 Activities Activities Total
Governmental Business-type
Balance Balance
June 30, 2020 Additions Deletions June 30, 2021
Capital Assets, Not Depreciated:

Land $ 9,734,882 $ $ - $ 9,734,882 -
Construction in Progress 4,245,096 10,223,403 (1,282,652) 13,185,847 Total, Not Depreciated 13,979,978 10,223,403 (1,282,652) 22,920,729 Capital Assets, Being Depreciated:

Buildings and Improvements 36,677,316 1,712,803 38,390,119 - Machinery and Equipment 11,173,408 315,635 (279,662) 11,209,381 Infrastructure 232,446,976 1,236,146 233,683,122 -
Total, Being Depreciated 280,297,700 3,264,584 (279,662) 283,282,622 Less Accumulated Depreciation:

Buildings and Improvements (18,961,658) (1,132,066) (20,093,724) - Machinery and Equipment (7,162,215) (831,670) 273,152 (7,720,733) Infrastructure (107,744,902) (4,371,367) (112,116,269) - Total Accumulated Depreciation (133,868,775) (6,335,103) 273,152 (139,930,726) Total Depreciated, Net 146,428,925 (3,070,519) (6,510) 143,351,896 Governmental Activities Capital
Assets, Net $ 160,408,903 $ 7,152,884 $ (1,289,162) $ 166,272,625 Governmental Activities
83 CITY OF CYPRESS
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2021
(7) Capital Assets and Depreciation (Continued)
Depreciation expense was charged to functions/programs of governmental activities for the fiscal year ended June 30, 2021 as follows:

Construction Commitments
The City has active construction projects as of June 30, 2021. The projects include traffic signals, streets, and sewers. At fiscal year-end, the City’s encumbrances with contractors were as follows:

The following is a summary of changes in the capital assets for business-type activities during the fiscal year:

General Government $ 339,644 Recreation 661,743
Public Safety 113,267
Public Works 4,388,778
Internal Service Funds Depreciation (Charged to Programs Based on Usage) 831,671 Total Depreciation Expense - Governmental Activities $ 6,335,103 Remaining
Commitment
Streets Fund $ 674,306
Lighting Fund 92,236
Capital Projects Fund - City 3,187,711 Sewer Fund 17,578 Totals $ 3,971,831
Balance Balance
June 30, 2020 Additions Deletions June 30, 2021
Capital Assets, Not Depreciated:

Construction in Progress $ $ 105,742 - $ $ 105,742 -
Total, Not Depreciated - 105,742 - 105,742
Capital Assets, Being Depreciated:

Infrastructure 34,310,901 134,153 34,445,054 -
Total, Being Depreciated 34,310,901 134,153 34,445,054 - Less Accumulated Depreciation:

Infrastructure (14,638,007) (590,022) (15,228,029) -
Total Accumulated Depreciation (14,638,007) (590,022) (15,228,029) - Total Depreciated, Net 19,672,894 (455,869) 19,217,025 - Business-type Activities Capital Assets, Net $ 19,672,894 $ (350,127) $ $ 19,322,767 -
Business-type Activities
84 CITY OF CYPRESS
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2021
(7) Capital Assets and Depreciation (Continued)
Depreciation expense for business-type activities for the fiscal year ended June 30, 2021 was charged as follows:
(8) Long-Term Debt
There is no City-obligated debt outstanding as of June 30, 2021, nor was there any activity related to City-obligated debt during fiscal year 2020-21.

Non-City Obligations - Cypress Business and Professional Center Limited Obligation Improvement Bonds
On February 18, 1998, $2,160,000 of Limited Obligation Improvement Bonds were issued to finance the acquisition of certain improvements within the Cypress Business and Professional Center Assessment District (Assessment District) of the City. Assessments to secure the bonds are to be levied only on parcels within the Assessment District for the cost of improvements with these assessments being payable over 25 years (term of debt issued). The bonds are limited obligations of the Assessment District payable solely from the special assessment or funds held pursuant to the trust indenture. Neither the faith and credit, nor the taxing power of the City, is pledged to the payment of the bonds. The City has no obligation beyond the cash balances in the Agency Fund for any delinquent Assessment District bond payments. The City acts solely as an agent for levying the assessments and paying the bondholders. At June 30, 2021, the District held in the Custodial Fund cash and investments totaling $364,811, including $160,103 held in bond reserves and $204,708 held for future improvements and other costs. The outstanding assessment bonds at June 30, 2021 totaled $335,000.
(9) Other Long-Term Liabilities
During the year ended June 30, 2021, in addition to the lease revenue bonds in Note 8, net pension liability in Notes 10 and 12, other postemployment benefits in Note 13, and claims payable in Note 15, the City had the following changes in Other Long-Term Liabilities:

All compensated absence amounts above relate to the internal service funds and are generally liquidated by the General Fund through charges from the internal service funds.

Sewer $ 590,022 Total Depreciation Expense - Business-type Activities $ 590,022 Balance Balance Due Within Due in More
Description July 1, 2020 Additions Deletions June 30, 2021 One Year than One Year Compensated Absences 2,060,409 $ $ 1,500,098 $ (1,265,246) $ 2,295,261 $ 573,800 $ 1,721,461 $ 2,060,409 $ 1,500,098 $ (1,265,246) $ 2,295,261 $ 573,800 $ 1,721,461 Classification
85 CITY OF CYPRESS
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2021
(10) Public Employees’ Retirement System (CalPERS)
A. General Information about the Pension Plan
Plan Descriptions: All qualified permanent and probationary employees are eligible to participate in the City’s Safety (Police) or the Miscellaneous (all other employees) cost-sharing multiple-employer defined benefit pension plan, administered by the California Public Employees Retirement System (CalPERS). CalPERS acts as a common investment and administrative agent for participating public entities within the State of California. Benefit provisions and all other requirements are established by state statute and city resolution. CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.

Benefits Provided: CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries.

Benefits are based on years of credited service, equal to one year of full-time employment. Members with five years of total service are eligible to retire at age 50 to 62 with statutorily reduced benefits.

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 the plan are applied as specified by the Public Employees’ Retirement Law. The plans’ provisions and benefits in effect at June 30, 2021, are summarized as follows:

Hire date
Prior to January 1,
2013
On or After
January 1, 2013
Benefit formula 2.0% at 55 2.0% at 62
Benefit vesting schedule 5 years of service 5 years of service Benefit payments monthly for life monthly for life
Retirement age 50-63 52-67
Monthly benefits, as a percentage of eligible compensation 1.426% - 2.418% 1.000% - 2.500% Required employee contribution rates 7.000% 6.750%
Required employer contribution rates:

Normal cost rate 11.192% 10.357%
Payment of unfunded liability $1,597,613 $6,194
Hire date
Prior to January 1,
2013
On or After
January 1, 2013
Benefit formula 3.0% at 50 2.7% at 57
Benefit vesting schedule 5 years of service 5 years of service Benefit payments monthly for life monthly for life
Retirement age 50 50-57
Monthly benefits, as a percentage of eligible compensation 3.00% 2.00% - 2.70% Required employee contribution rates 9.000% 13.750%
Required employer contribution rates:

Normal cost rate 25.540% 13.884%
Payment of unfunded liability $1,928,684 $3,297
Miscellaneous
Safety
86 CITY OF CYPRESS
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2021
(10) Public Employees’ Retirement System (CalPERS) (Continued) A. General Information about the Pension Plan (Continued) Employees Covered: At June 30, 2019, the following employees were covered by the benefit terms of the Plan:

Contributions: Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employees be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through CalPERS’ annual actuarial valuation process. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount necessary to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. Employer rates may change if plan contracts are amended.

Payments made by the City to satisfy contribution requirements identified by the pension plan as member contributions are classified as plan member contributions.

B. Net Pension Liability
The City’s net pension liability for each Plan is measured as the proportionate share of the net pension liability. The net pension liability of each Plan is measured as of June 30, 2020, and the total pension liability for each Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2019 rolled forward to June 30, 2020 using standard update procedures. A summary of principal assumptions and methods used to determine the net pension liability is shown below.

Actuarial Assumptions: The total pension liability in the June 30, 2019 actuarial valuation was determined using the following actuarial assumptions:

Miscellaneous Safety
Active Members 81 49
Transferred Members 83 28
Terminated Members 67 22
Retired Members and Beneficiaries 231 121
Total 462 220
Valuation Date
Measurement Date
Actuarial Cost Method
Actuarial Assumptions:

Discount Rate
Inflation
Salary Increases
Mortality Rate Table (1) Derived using CalPERS membership data for all funds Post Retirement Benefit Increase
Power Protection Allowance Floor on Purchasing Power
applies, 2.50% thereafter
Varies by entry age and service
The lesser of contract COLA or 2.50% until Purchasing
June 30, 2019
June 30, 2020
Entry-Age Normal Cost Method

7.15%

2.50%
87 CITY OF CYPRESS
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2021
(10) Public Employees’ Retirement System (CalPERS) (Continued) B. Net Pension Liability (Continued)
(1) The mortality table used was developed based on the CalPERS-specific date. The probabilities of mortality are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015.

Pre-retirement and post-retirement mortality rates include 15 years of projected mortality improvement using 90% of scale MP-2016 published by the Society of Actuaries. For more details on this table, please refer to the CalPERS Experience Study and Review of Actuarial Assumptions report from December 2017 that can be found on the CalPERS website.

Change of Assumptions: There were no changes in assumptions.

Discount Rate: The discount rate used to measure the total pension liability was 7.15 percent. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

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

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

Assumed Real Return Real Return
Asset Years Years
Asset Class Allocation 1-10 (a) 11+ (b)
Global equity 50.00% 4.80% 5.98%
Fixed Income 28.00% 1.00% 2.62%
Inflation assets 0.00% 0.77% 1.81%
Private equity 8.00% 6.30% 7.23%
Real assets 13.00% 3.75% 4.93%
Liquidity 1.00% 0.00% (0.92%)
Total 100.00%
88 CITY OF CYPRESS
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2021
(10) Public Employees’ Retirement System (CalPERS) (Continued) B. Net Pension Liability (Continued)
(a) An expected inflation of 2.00 percent was used for this period. (b) An expected inflation of 2.92 percent was used for this period.

C. Changes in the Net Pension Liability
Proportionate Share of Net Pension Liability: As of June 30, 2020, the City reported net pension liabilities for its proportionate shares of the net pension liability of each Plan as follows:

The City’s net pension liability for both the Safety and Miscellaneous Plans is measured as the proportionate share of the net pension liability. The net pension liability is measured as of June 30, 2020, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2019 rolled forward to June 30, 2020 using standard update procedures. The City’s proportion of the net pension liability was based on a projection of the City’s long-term share of contributions to the Plans relative to the projected contributions of all participating employers, as actuarially determined. The City’s proportionate share of the net pension liability for the Plans as of June 30, 2019 and 2020 was as follows:

Sensitivity of the Net Pension Liability to Changes in the Discount Rate: The following presents the net pension liability of each plan, as well as what the net pension liability would be if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate:

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

Proportionate Share
of Net Pension Liability
Safety Plan $ 30,471,506
Miscellaneous Plan 22,615,628
Total Net Pension Liability $ 53,087,134
Miscellaneous Safety
Proportion - June 30, 2019 0.48157% 0.43217%
Proportion - June 30, 2020 0.47213% 0.42911%
Change - Increase (Decrease) (0.00944%) (0.00306%)
Miscellaneous Safety
Discount Rate Plan Plan Total
1 % Decrease 6.15% $34,503,146 $44,913,437 $79,416,583
Current Discount Rate 7.15% 22,615,628 30,471,506 53,087,134 1 % Increase 8.15% 12,793,345 18,620,536 31,413,881
Net Pension Liability
89 CITY OF CYPRESS
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2021
(10) Public Employees’ Retirement System (CalPERS) (Continued) D. Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions For the year ended June 30, 2021, the City recognized pension expense of $3,794,591 in the Miscellaneous Plan; $5,018,361 in the Safety Plan; and $29,368 in the Terminated OCERS Plan (Note 12) for a total of $8,842,320. At June 30, 2021, the City reported deferred outflows and deferred inflows of resources related to pensions as follows:

Deferred Deferred
Outflows Inflows
Miscellaneous Plan of Resources of Resources
City contributions subsequent to measurement date $ 2,230,654 $ - Changes of assumptions - (161,304) Differences between expected and actual experience 1,165,450 - Net difference between projected and actual earnings on pension plan investments 671,833 - Adjustments due to differences in proportions 742,022 - Changes in proportion and differences between contributions and proportionate share of - (1,387,119)
Total $ 4,809,959 $ (1,548,423)
Deferred Deferred
Outflows Inflows
Safety Plan of Resources of Resources
City contributions subsequent to measurement date $ 3,130,711 $ - Changes of assumptions (101,501) Differences between expected and actual experience 2,362,912 - Net difference between projected and actual earnings on pension plan investments 662,274 - Adjustments due to differences in proportions 884,351 - Changes in proportion and differences between contributions and proportionate share of - (1,296,339)
Total $ 7,040,248 $ (1,397,840)
Deferred Deferred
Outflows Inflows
Total PERS Pension Plans of Resources of Resources
City contributions subsequent to measurement date $ 5,361,365 $ - Changes of assumptions - (262,805) Differences between expected and actual experience 3,528,362 - Net difference between projected and actual earnings on pension plan investments 1,334,107 - Adjustments due to differences in proportions 1,626,373 - Changes in proportion and differences between - contributions and proportionate share of - (2,683,458) Total $ 11,850,207 $ (2,946,263)
90 CITY OF CYPRESS
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2021
(10) Public Employees’ Retirement System (CalPERS) (Continued) D. Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
The amount reported as deferred outflows of resources related to contributions subsequent to the measurement date of $2,230,654 for the Miscellaneous Plan and $3,130,711 for the Safety Plan, totaling $5,361,365, will be recognized as a reduction of the net pension liability in the year ending June 30, 2022. The amount reported as deferred inflows, net of the remaining deferred outflows, will be recognized as pension expense as follows:

E. Payable to the Pension Plan
At June 30, 2021, the City had no outstanding contributions to the pension plan required for the year ended June 30, 2021.
(11) Other Defined Contribution Pension Plans
Nationwide Retirement Solutions Deferred Compensation Plan Under the Omnibus Budget Reconciliation Act of 1990 (OBRA), the City is required to provide a retirement plan to all City employees, including part-time temporary and seasonal employees. OBRA law allows the City to provide any retirement plan in which benefits are comparable to those provided under Social Security and meet certain criteria or “safe harbor formulas” for defined benefit retirement systems. To comply with this Federal law, the City currently provides a 457 deferred compensation plan through Nationwide Retirement Solutions for part-time temporary and seasonal employees.

These employees pay a mandatory contribution of 7.5% of their compensation to the plan, which may be withdrawn upon employment separation.

For the year ended June 30, 2021, the City’s payroll covered by the plan was $50,034. Employee contributions to the plan totaled $3,753. The City does not contribute to the plan. (12) Terminated Orange County Employees Retirement System Defined Benefit Pension Plan A. General Information about the Pension Plan
Plan Description: The Cypress Recreation and Park District (District) participated in the Orange County Employees’ Retirement System (OCERS), a cost-sharing multiple-employer defined benefit pension plan, for employees’ service prior to October 12, 2000.

Miscellaneous Plan Safety Plan Total
Measurement Periods Deferred Outflows/ Deferred Outflows/ Deferred Outflows/ Ending June 30, (Inflows) of Resources (Inflows) of Resources (Inflows) of Resources 2021 $ (46,379) $ 549,912 $ 503,533
2022 363,476 947,046 1,310,522
2023 391,556 682,902 1,074,458
2024 322,229 331,836 654,065
Thereafter - - -
$ 1,030,882 $ 2,511,696 $ 3,542,578
91 CITY OF CYPRESS
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2021
(12) Terminated Orange County Employees Retirement System Defined Benefit Pension Plan (Continued)
A. General Information about the Pension Plan (Continued) OCERS was established in 1945, under the provisions of the County Employees Retirement Law of 1937. OCERS is governed by a ten-member Board of Retirement comprised of nine voting members and one alternate member. Board membership consists of four members appointed by the County of Orange Board of Supervisors and five members elected by the members of the pension system – two by the general members, two by the safety members (one voting and one alternate), and one by the retired members. The County of Orange Treasurer-Tax Collector, who is elected by the voters registered in the County, serves as an ex-officio member. The OCERS Board of Retirement is responsible for establishing policies governing the administration of the retirement plan, making disability determinations, assuring benefit payments, establishing investment policies, and monitoring execution of its policies.

OCERS issues a publicly available financial report that includes financial statements and required supplementary information for the cost-sharing plans administered by OCERS. The report can be obtained online at www.ocers.org, or from its executive office at 2223 Wellington Avenue, Santa Ana, CA 92701.

Benefits Provided: OCERS provides retirement, disability, and death benefits to safety and general members. Safety membership includes those members serving in active law enforcement, fire suppression, and probation officers. General membership applies to all other occupations, including all eligible District employees. Plan retirement benefits are tiered based upon date of OCERS membership. Members employed prior to September 21, 1979 are designated as Tier I members and will have their highest one-year average salary used to determine their retirement allowance. Tier II members, hired on or after September 21, 1979 will have their highest three-year average salary used to determine their retirement allowance. Member rate groups are determined by the employer, bargaining unit, and benefit plan. The benefit plan represents the benefits formula and tier that will be used in calculating a retirement benefit.

Employees Covered: The plan was closed to new members as of October 12, 2000. After that date, all existing and new District employees were enrolled in the CalPERS Miscellaneous Plan. At December 31, 2020, the following employees were covered by the benefit terms of the OCERS Plan:

Contributions: The participating entities in OCERS share proportionately in all risks and costs, including benefit costs. The District’s discontinuance of the OCERS plan precludes the District from sharing the risks and costs of the plan in the same manner as actively participating entities, but the District remains liable for its share of pension liabilities. To ensure the District pays its fair share of the costs associated with its eligible employees, OCERS and the District entered into a Withdrawing Employer and Continuing Contribution Agreement (Agreement) on October 15, 2018.

Retired members or beneficiaries currently receiving benefits 22 Vested terminated members entitled to, but not yet receiving 5 Active members 0
Total 27
92 CITY OF CYPRESS
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2021
(12) Terminated Orange County Employees Retirement System Defined Benefit Pension Plan (Continued)
A. General Information about the Pension Plan (Continued) Per the terms of the Agreement, the District paid OCERS $740,000 on October 16, 2018 to satisfy the estimated net pension liability as of December 31, 2016 and interest accrued on that liability through October 16, 2018. Beginning December 31, 2020 and at least every three years thereafter, OCERS will recalculate the then current unfunded actuarial accrued liability attributable to the District.

For purposes of the recalculation, the District’s employees are treated as a closed group and the District’s assets and liabilities will be segregated from the remaining assets of the retirement system.

Based on the recalculation, in the event there is any new pension liability, the District shall satisfy the obligation to OCERS within three years following the effective date of the recalculation, including accrued interest. If the recalculation determines there is a surplus attributable to the District, it shall remain with OCERS as a credit against future pension liabilities.

B. Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources As of December 31, 2020, the District reported a net pension liability for the OCERS plan of $185,117.

The net pension liability was measured as of December 31, 2020, and 2019. The Plan’s Fiduciary Net Position (plan assets) was valued as of the measurement date while the Total Pension Liability (TPL) was determined based upon rolling forward the TPL from actuarial valuations as of December 31, 2019 and 2018, respectively.

The District’s net pension liability as of December 31, 2019 and 2020 was as follows:

Actuarial Assumptions: The actuarial valuation was determined using the following actuarial assumptions:

Valuation Date December 31, 2019
Measurement Date December 31, 2020, rolled forward on an actuarial basis
Actuarial Experience Study Three-year period ended December 31, 2019 and dated August 6, 2020.

Actuarial Cost Method Entry age normal
Actuarial Assumptions:

Inflation 2.50%
Salary increases General: 4.0% to 11.0%, varies by
service, including inflation
Investment rate of return 7.00%, net of pension plan investment expense, including inflation.

Discount Rate 7.00%
OCERS
Net Pension Liability - December 31, 2019 262,415
Net Pension Liability - December 31, 2020 185,117
Change - Increase (Decrease) (77,298)
93 CITY OF CYPRESS
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2021
(12) Terminated Orange County Employees Retirement System Defined Benefit Pension Plan (Continued)
B. Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources (Continued)
Mortality Assumptions: The underlying mortality assumptions used in the actuarial valuation were based on the results of the actuarial experience study for the period January 1, 2017 through December 31, 2019 using the Public Retirement Plans Mortality tables (Pub-2010) published by the Society of Actuaries. Within the Pub-2010 family of mortality tables, OCERS has adopted both the General and Safety Amount-Weighted Above-Median Mortality Tables (adjusted for OCERS experience), projected generationally with the two-dimensional mortality improvement scale MP2019, and adjusted separately for healthy and disabled for both general and safety members.

Discount Rate: The discount rate used to determine the TPL was 7.00% as of December 31, 2020 and 2019. The projection of cash flows used to determine the discount rate assumed plan member contributions will be made at the current contribution rate and employer contributions will be made at rates equal to the actuarially determined contribution rates. For this purpose, only employer contributions intended to fund benefits for current plan members and their beneficiaries are included.

Projected employer contributions that are intended to fund the service costs for future plan members and their beneficiaries, as well as projected contributions from future plan members, are not included.

Based on those assumptions, the Plan’s Fiduciary Net Position was projected to be available to make all projected future benefit payments for current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the TPL as of both December 31, 2020 and 2019.

Long-Term Expected Rate of Return: The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of inflation) are developed for each major asset class. These returns are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage, adding expected inflation and subtracting expected investment expenses and a risk margin. The target allocation and projected arithmetic real rates of return for each major asset class, after deducting inflation but before deducting investment expenses are shown in the following table. This information was used in the derivation of the longterm expected investment rate of return assumption for the December 31, 2020 actuarial valuation.

This information will change every three years based on the actuarial experience study. 94 CITY OF CYPRESS
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2021
(12) Terminated Orange County Employees Retirement System Defined Benefit Pension Plan (Continued)
B. Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources (Continued)
Asset Class Target
Allocation
Long-Term Expected
Real Rate of Return
Large Cap Equity 23.10% 5.43%
Small Cap Equity 1.90% 6.21%
International Developed Equity 13.00% 6.67%
Emerging Markets Equity 9.00% 8.58%
Core Bonds 9.00% 1.10%
High Yield Bonds 1.50% 2.91%
TIPS 2.00% 0.65%
Emerging Market Debt 2.00% 3.25%
Corporate Credit 1.00% 0.53%
Long Duration Fixed Income 2.50% 1.44%
Real Estate 3.01% 4.42%
Private Equity 13.00% 9.41%
Value Added Real Estate 3.01% 7.42%
Opportunistic Real Estate 0.98% 10.18%
Energy 2.00% 9.68%
Infrastructure (Core Private) 1.50% 5.08%
Infrastructure (Non-Core Private) 1.50% 8.92%
CTA – Trend Following 2.50% 2.38%
Global Macro 2.50% 2.13%
Private Credit 2.50% 5.47%
Alternative Risk Premia 2.50% 2.50%
Total 100.0%
Sensitivity of the Net Pension Liability to Changes in the Discount Rate: The following presents the net pension liability of the OCERS plan, as well as what the net pension liability would be if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate:

Pension Plan Fiduciary Net Position: Detailed information about the pension plan’s fiduciary net position is available in the separately-issued OCERS financial reports. 1% Decrease Current Rate 1% Increase

6.00% 7.00% 8.00%
$1,528,495 $185,117 ($909,942)
Net Pension Liability
Discount Rate
95 CITY OF CYPRESS
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2021
(12) Terminated Orange County Employees Retirement System Defined Benefit Pension Plan (Continued)
C. Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions For the year ended June 30, 2021, the District recognized pension expense of $29,368 in the OCERS Plan. At June 30, 2021, the District reported deferred outflows and deferred inflows of resources related to pensions as follows:

The amounts reported as deferred inflows, net of the remaining deferred outflows, will be recognized as pension expense as follows:

D. Payable to the Pension Plan
At June 30, 2021, the City had no outstanding contributions to the pension plan required for the year ended June 30, 2021.
(13) Post-Employment Health Care Benefits
Plan Description
The City, through a single-employer defined benefit plan, provides post-employment health care benefits to eligible retirees through the CalPERS healthcare program entitled Public Employees’ Medical and Hospital Care Act (PEMHCA). All eligible employees become participants in PEMHCA in the month following their date of hire. Upon retirement, the City pays the PEMHCA minimum amount ($143 per month in 2021) for all eligible retirees who choose to continue with their coverage through PEMHCA. Retired PEMHCA members receiving benefits make contributions at premium rates identical to active City employees, less the PEMHCA minimum.

Deferred Deferred
Outflows Inflows
OCERS Plan of Resources of Resources
Differences between expected and actual experience $ 1,628,200 $ - Net difference between projected and actual earnings on pension plan investments (1,020,653)
Changes of assumptions 46,968 (12,345)
Total $ 1,675,168 $ (1,032,998)
OCERS Plan
Measurement Periods Deferred Outflows/
Ending June 30, (Inflows) of Resources
2022 $ (57,059)
2023 743,400
2024 (54,174)
2025 (6,482)
2026 16,485
Thereafter -
$ 642,170
96 CITY OF CYPRESS
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2021
(13) Post-Employment Health Care Benefits (Continued)
Plan Description (Continued)
In addition to the PEMHCA minimum amount, certain members of all retiree groups with at least ten years of continuous service receive a Supplemental Health Care Benefit directly from the City. The benefits are based on negotiated memorandums of understanding with the various employee associations. The City provides a monthly contribution from $100 to $300 based on years of continuous service and employee classification, which can be used by the retiree to either continue their health care benefits as may be available under the City’s current health care contract through PEMHCA or to use the monthly contribution amount to purchase alternative health care benefits. The Supplemental Health Care Benefit terminates for retirees on the date the retiree reaches age 65 or becomes Medicare eligible whichever comes first. This plan is closed to new members. New employees are only eligible for the PEMHCA benefit and the Retiree Health Savings plan.

All other City employees that are either ineligible or have elected out of the above Supplemental Health Care Benefit are members of the City’s Retiree Health Savings defined-contribution plan in which the City contributes monthly amounts on behalf of the employee to an account in the employee’s name. These monthly contributions are $75 per month or $185 per month for full-time employees based on employee association.

Employees Covered
As of the June 30, 2021 actuarial valuation, the following current and former employees were covered by the benefit terms under the OPEB plans:

Contributions
The minimum contribution for PEMHCA is established and amended by CalPERS. The City’s contribution towards the Supplemental Health Care Benefit and Retiree Health Savings OPEB plans are established by Memoranda of Understanding with the applicable employee bargaining units and may be amended by agreements between the City and the bargaining units.

The City pays the monthly contribution for all employees and retirees on a pay-as-you-go basis. As of June 30, 2021, 67 retirees were receiving the PEMHCA benefit and the cost to the City for the year ended June 30, 2021 was $112,240. The City paid an additional $97,612 to 30 retirees during the year for the Supplemental Health Care Benefit. For the measurement date ended June 30, 2021, the City’s cash contributions were $209,852, which were recognized as a reduction to the OPEB liability.

While the City does not directly make contributions above the required pay-as-you-go amounts, the ability of the retiree to obtain health insurance at an active employee rate constitutes a significant economic benefit to the retiree, called an implicit subsidy. The implicit subsidy is considered to be an other post-employment benefit (OPEB) of the City. For the year ended June 30, 2021, the City’s contribution towards the implicit subsidy was $250,216.

Defined
Contribution
Supplemental Retiree
PEMHCA Health Care Health
Minimum Benefit Savings
Active Employees 120 15 104
Eligible Retirees - Enrolled 67 28 n/a
Eligible Retirees - Not Enrolled 78 0 n/a
Defined Benefit Plans
97 CITY OF CYPRESS
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2021
(13) Post-Employment Health Care Benefits (Continued)
Contributions (Continued)
The Retiree Health Savings Plan (RHS) is a defined contribution plan. Eligible employees receive either $85 or $175 per month, depending on bargaining unit, deposited in an individual Retiree Health Savings Account. During the fiscal year ended June 30, 2021, the City paid $122,760 into RHS accounts for eligible employees. The monthly payments are recognized as expenditures when the payments are made into the RHS. Because the RHS is a defined contribution plan there is no unfunded liability associated with it.

Total OPEB Liability
The City’s total OPEB liability of $10,607,104 was based on an actuarial valuation as of June 30, 2021, a measurement date of June 30, 2020 and a discount rate of 2.16%. The total OPEB liability was determined using the following assumptions:

Notes:
(1) The discount rate was based on the Bond Buyer 20-year bond General Obligation Index. (2) Mortality rates were based on the 2017 CalPERS Mortality Tables for Safety and Miscellaneous Employees, as appropriate for the population.

Actuarial Cost Method Entry Age, Level Percent of Pay
Actuarial Assumptions
Discount Rate (1)
As of 6/30/20 2.16%, net of investment expenses
Inflation 2.50%
Salary increases 2.75%
Mortality rate (2)
Healthcare cost trend rates 4.00%
Medical CPI 4.00% (used to project CalPERS statutory minimum benefit) Retirees' share of cost Retirees pay the balance of the premium after statutory minimum benefit, Supplemental Health Care Benefits, if any, and PEMHCA administrative fees contributed by the City. 98 CITY OF CYPRESS
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2021
(13) Post-Employment Health Care Benefits (Continued)
Changes in the OPEB Liability
The changes in the Total OPEB liability for the Plan are as follows:
* The interest assumption changed from 2.20% to 2.16%. Assumed rates of retirement, termination, and mortality have been updated to align with those currently being used by the statewide pension systems. Medical trend in future years has been updated to 4.0% for all years from 6.0% tiered down by 0.5% per year to 4.5% in all future years. The Medical CPI assumption was changed to 4.0% in all years from 3.50% in all years.

Sensitivity of the Total OPEB Liability to Changes in the Discount Rate The following presents the total OPEB liability as of June 30, 2021 calculated using the discount rate of 2.16%, as well as what the total OPEB liability would be if it were calculated using a discount rate that is one percentage point lower (1.16%) or one percentage point higher (3.16%) than the current rate:

Sensitivity of the Total OPEB Liability to Changes in the Health Care Cost Trend Rates The following presents the total OPEB liability as of June 30, 2021, as well as what the total OPEB liability would be if it were calculated using health care cost trend rates that are one percentage point lower or one percentage point higher than the current health care cost trend rates:

OPEB Expense
The annual OPEB expense can be calculated as the change in the amounts reported on the Statement of Net Position that are not attributable to employer contributions. It is the change in total liability minus the changes in deferred outflows plus the changes in deferred inflows. For the fiscal year ended June 30, 2021, the City recognized OPEB expense of $849,920.

Balance at June 30, 2020 (measurement date 6/30/20) $10,617,458 Changes recognized for the measurement period:

Service cost 382,033
Interest 232,699
Difference between expected and actual experience 428,577 Changes of assumptions *
(593,595)
Benefit payments, including implicit subsidy (460,068)
Net changes (10,354)
Balance at June 30, 2021 $10,607,104
1% Decrease Current Rate 1% Increase

1.16% 2.16% 3.16%
Total OPEB Liability $12,047,139 $10,607,104 $9,434,582 1% Decrease Current Rates 1% Increase

3.00% 4.00% 5.00%
Total OPEB Liability $9,233,835 $10,607,104 $12,348,461 99 CITY OF CYPRESS
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2021
(13) Post-Employment Health Care Benefits (Continued)
Deferred Outflows/Inflows of Resources Related to OPEB
As of the fiscal year ended June 30, 2021, the City reported deferred outflows and deferred inflows of resources related to OPEB from the following sources:

OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB Amounts reported as deferred outflows and deferred inflows of resources will be recognized in OPEB expense as follows:
(14) Public Agency Retirement Services (PARS) Post-Employment Benefits Trust The City established the PARS Post-Employment Benefits Trust (Trust) as a tax-exempt trust within the meaning of Section 115 of the Internal Revenue Service Code to accumulate resources to “stabilize” the amount of General Fund resources that it will need to meet future contribution requirements to the California Public Employees Retirement System (PERS). The balances and activities of the Trust are not part of the pension plan. Instead, the assets will benefit the employer through reduced future cash flow demands on the General Fund resources and continue to be assets of the City. At June 30, 2021, $17,913,583 in restricted cash and investment in the Employees’ Benefit Internal Service Fund is restricted for pension contribution stabilization. (15) Self Insurance
At June 30, 2021 the City was self-insured for workers’ compensation and general liability. The selfinsured portion for workers’ compensation and general liability is limited to the first $300,000 and $150,000 respectively, of liability per occurrence. Coverage in excess of these amounts is maintained in layers to a maximum of $43,000,000 for general liability and the statutory limit for workers compensation (of which $3,000,000 per occurrence is for each employee accident or disease) through the California Insurance Pool Authority (CIPA). CIPA is a consortium of 13 cities in Southern California, established to pool resources, share risks, purchase excess insurance and to share costs for professional risk management and claims administration. Member agencies make payments based on underwriting estimates. Each agency may be assessed the difference between funds available and the $33,000,000 annual aggregate in proportion to their annual premiums.

Deferred Deferred
Outflows Inflows
of Resources of Resources
Differences between expected and actual experience $ 413,430 $ 103,412 Changes of assumptions 1,222,196 635,297
Total $ 1,635,626 $ 738,709
Fiscal Year Deferred Outflows/
Ending June 30, (Inflows) of Resources
2022 $ 235,188
2023 235,188
2024 280,703
2025 212,631
2026 (19,645)
Thereafter (47,148)
100

CITY OF CYPRESS
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2021
(15) Self Insurance (Continued)
The Governing Board is comprised of one member from each City and is responsible for the selection of management, and for the budgeting and financial management of CIPA. No determination has been made as to each participant’s proportionate share of the fund equity as of June 30, 2021. Upon termination of CIPA, and after settlement of all claims, any excess or deficit will be divided among the cities in proportion to the amount of their contributions.

Liabilities associated with the self-insurance program area are accrued when incurred in the internal service funds (using the accrual basis of accounting). The amount accrued represents estimates of amounts to be paid for reported claims and incurred-but-not-yet-reported claims based upon past experience, modified for current trends and information. While the ultimate amount of losses incurred through June 30, 2021 is dependent on future developments, based upon information from the City Attorney, the City’s claims administrators and others involved with the administration of programs, City management believes the accrual is adequate to cover such losses. Settled claims have not exceeded commercial coverage during the last three years. There have been no significant reductions in insurance coverage from the prior year.

All City departments participate in the self-insurance program. Payments made to the Liability Insurance and Workers’ Compensation Internal Service Funds are based on estimates of amounts needed to pay prior and current year claims and to establish a reserve for catastrophic losses. At June 30, 2020, the Liability Insurance Fund and the Workers’ Compensation Fund had reserves for catastrophic losses of $2,413,627 and $624,520, respectively, which are reported as net position in these funds. The claims liabilities of $599,524 and $1,701,810 reported in the Liability Insurance and Workers’ Compensation Funds, respectively, at June 30, 2021, are based on the requirements of Governmental Accounting Standards Board Statement No. 10, which requires that the liability for claims be reported if information prior to the issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated.

Changes in the claims liability amounts during the fiscal years ended June 30, 2020 and June 30, 2021 are as follows:

Liability Workers'
Total
Balance at July 1, 2019 $ 459,083 $ 1,596,600 $ 2,055,683 Current year claims 264,056 138,430 402,486
Changes in estimates (130,593) (586,167) (716,760)
Claims payments (264,056) (138,430) (402,486)
Balance at June 30, 2020 $ 328,490 $ 1,010,433 $ 1,338,923 Balance at July 1, 2020 $ 328,490 $ 1,010,433 $ 1,338,923 Current year claims 316,659 134,697 451,356
Changes in estimates 271,034 691,377 962,411
Claims payments (316,659) (134,697) (451,356)
Balance at June 30, 2021 $ 599,524 $ 1,701,810 $ 2,301,334 Insurance Compensation
101

CITY OF CYPRESS
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2021
(15) Self Insurance (Continued)
Copies of CIPA’s annual financial statements may be obtained from its offices located at 366 San Miguel Drive, Suite 312, Newport Beach, CA 92660.
(16) Classification of Net Position
Net Position
The City’s Net Position at June 30, 2021 is summarized as follows:

Governmental Business-type
Activities Activities Totals
Net Investment in Capital Assets $ 166,272,625 $ 19,322,767 $ 185,595,392 Restricted for:

Public Safety 1,233,921 1,233,921 - Public Works-Street Maintenance and Improvements 4,887,706 4,887,706 - Public Works-Street Lighting 5,727,940 5,727,940 - Public Works-Local Drainage Improvements 831,570 - 831,570 Public Works-Community Develop. Block Grant 360,481 - 360,481 Public Works-Other 177,095 - 177,095
Total - Public Works 11,984,792 11,984,792 - Sanitary Sewer System 5,253,793 - 5,253,793 Recreation 3,955,015 3,955,015 - Recreation-Open Space Improvements 152,529 - 152,529 Recreation-Facility and Service Enhancements 1,002 - 1,002 Total-Recreation 4,108,546 4,108,546 - Other-Pension Trust 17,913,583 17,913,583 - Other-Promotional Activities 28,944 - 28,944 Other-Low and Moderate Income Housing 1,584,332 1,584,332 - Other-Cable Television Equipment 628,125 - 628,125 Other-Community Development Block Grant 26,173 - 26,173 Other-Office of Traffic Safety Grant 21,232 - 21,232
Other-Department of Justice Grant 2,905 - 2,905
Total-Other 2,291,711 - 2,291,711
Unrestricted 88,119,499 - 88,119,499
Total Net Position $ 291,924,677 $ 24,576,560 $ 316,501,237 Government Wide Statement
of Net Position
102

CITY OF CYPRESS
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2021
(16) Classification of Net Position (Continued)
Net Investment in Capital Assets – This net position amount represents capital assets, net of accumulated depreciation and reduced by outstanding debt attributed to acquisition, construction, or improvement of the assets.

Restricted for Public Safety – These funds are restricted for law enforcement purposes, supplementing but not supplanting other public safety funding.

Restricted for Public Works – Street Maintenance and Improvements – This restriction represents amounts received from State and Local governments and developers that are required to be used for the construction and maintenance of streets within the City.

Restricted for Public Works – Street Lighting – This restriction represents property tax amounts assessed for expenditures for streetlights, traffic signal maintenance and construction.

Restricted for Public Works – Local Drainage Improvements – These amounts received from developers are restricted for expenditures for master planned drainage projects.

Restricted for Public Works – Community Development Block Grant – These amounts are restricted for residential street resurfacing improvements.

Restricted for Public Works – Other Purposes – These amounts are restricted to support a variety of grant funded and special programs as designated by law, the grant terms, or administrative regulations.

Restricted for Sanitary Sewer System – These amounts received from system users are restricted for maintenance and capital expenditures for the City’s sanitary sewer system.

Restricted for Recreation – This restriction represents amounts required to be used for future Recreation and Park District operating and capital activities.

Restricted for Recreation - Open Space Improvements – This restriction represents amounts received from developers that are required to be used for Recreation and Park District open space use.

Restricted for Recreation – Facility and Service Enhancements – This restriction represents amounts received from grants or other funding that are required to be used for the support of Recreation and Park District facilities, programs and services.

Restricted for Other – Pension Trust – This restriction represent the balance of the Pension Trust, a tax-exempt, irrevocable pension trust designed to pre-fund retirement plan obligations.

Restricted for Other - Promotional Activities – This restriction represents amounts contributed to the City by developers for the promotion of the City.

Restricted for Other - Low and Moderate Income Housing – This restriction represents amounts received to the City from the Agency upon dissolution that are required to be used for the rehabilitation and/or replacement of low and moderate income housing within the City.

Restricted for Other - Cable Television Equipment – These amounts are restricted to provide enhancements to the City’s equipment used for video PEG access services as designated by the terms of the cable franchise transfer agreement.

Restricted for Other – Community Development Block Grant – This restriction represents federal grant funds to be used for housing loans.
103

CITY OF CYPRESS
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2021
(16) Classification of Net Position (Continued)
Restricted for Other – Office of Traffic Safety Grant – This restriction represents federal grant funds to be used to prevent serious injuries and deaths resulting from vehicle crashes on California highways.

Restricted for Other – Department of Justice Grant – This restriction represents federal grant funds to be used for the purchase of bulletproof vests for public safety personnel. . (17) Classifications of Fund Balances
The City has adopted the provisions of GASB Statement No. 54, “Fund Balance and Governmental Fund Type Definitions”. GASB 54 establishes fund balance classifications based largely upon the extent to which a government is bound to observe constraints imposed upon the use of the resources reported in governmental funds. The governmental fund statements conform to the new classification and are summarized as follows.

Recreation Nonmajor
General and Park Streets City Capital Governmental
Fund District Fund Fund Projects Fund Funds Totals
Nonspendable
Prepaids $ 79,380 $ 33,301 $ - $ 37,000 $ - $ 149,681
Inventory - 699 - - - 699
Notes Receivable 94,791 - - - - 94,791
Advances from Other Funds 226,304 - - 5,844,695 - 6,070,999 Total Nonspendable 400,475 34,000 - 5,881,695 - 6,316,170 Restricted
Notes Receivable - - - - 108,025 108,025
Community Promotion 28,944 - - - - 28,944
Open Space - 152,529 - - - 152,529
Youth League Renovations - 84,632 - - - 84,632
Senior Center Enhancements - 30,077 - - - 30,077
Facility and Service Enhancements - 1,002 - - - 1,002
Recreation - 3,840,306 - - - 3,840,306
Streets - - 4,887,706 - - 4,887,706
Local Drainage - - - - 831,570 831,570
Landscape Maintenance - - - - 171,957 171,957
Street Lighting - - - - 5,727,940 5,727,940
Cable Television Equipment - - - - 628,125 628,125
Police - - - - 1,233,921 1,233,921
Low and Moderate Income Housing - - - - 1,476,307 1,476,307 Total Restricted 28,944 4,108,546 4,887,706 - 10,177,845 19,203,041 Committed
Stabilization Agreement 8,277,669 - - - - 8,277,669
Captial Improvements - - - 12,824,144 - 12,824,144
Total Committed 8,277,669 - - 12,824,144 - 21,101,813
Assigned
Future Capital Improvements 4,031,609 2,200,000 - 68,279,670 - 74,511,279 Investment in Pension Trust 2,000,000 - - - - 2,000,000 Business Relocation Stabilization 2,500,000 - - - - 2,500,000 Budget Stabilization 4,100,000 - - - - 4,100,000
Storm Drainage 1,080,420 - - - - 1,080,420
Carryover Appropriations 1,713,545 - - - - 1,713,545
Total Assigned 15,425,574 2,200,000 - 68,279,670 - 85,905,244 Unassigned 1,060,000 - - - (226,304) 833,696
Total Fund Balances $ 25,192,662 $ 6,342,546 $ 4,887,706 $ 86,985,509 $ 9,951,541 $ 133,359,964 104

CITY OF CYPRESS
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2021
(17) Classifications of Fund Balances (Continued)
The stabilization agreement amount of $8,277,669 presented as committed fund balance in the General Fund has been formally approved by the City Council and is for unforeseen situations (such as a temporary revenue interruption due to business activity or disaster). The amount is equal to 25% of the General Fund’s original annual operating budget for the upcoming fiscal year and may only be used should annual estimated revenues decrease by a minimum of 10 percent or annual expenditures are estimated to increase by over 10 percent. In addition to these variances in revenues or expenditures, it is further established that in order for these fund balance amounts to be expended such variances must create a situation in which the City’s ability to provide basic services (as defined by the City Council) is threatened. Further, City Council authorization is required for use of this amount.
(18) Contingent Liabilities
Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantor agencies, principally the Federal government. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures which may be disallowed by the grantor cannot be determined at this time although the City expects such amounts, if any, to be immaterial. The City is a defendant in various other lawsuits. Although the outcome of these lawsuits is not presently determinable, in the opinion of the City attorney, the resolution of these matters will not have a material adverse effect on the financial condition of the City.
(19) Joint Venture
On December 23, 1996, the West Cities Communications Center Joint Powers Authority (JPA) was created under a joint exercise of powers agreement. It was formed to consolidate law enforcement communications for the cities of Cypress, Los Alamitos and Seal Beach. The governing board consists of one member appointed from each participating agency. The approval of budget and assumption of financial obligations must be approved by all members. The participant contributions are City of Cypress 45.3%, City of Los Alamitos 24.4% and the City of Seal Beach 30.3%.

The purpose of the JPA is to save the participants some individual expense through the sharing of communication obligations. The JPA intends to utilize the personnel and resources of the member agencies to provide financial, legal, personnel, risk management and other services as needed. The City of Cypress provides the JPA with financial and human resources services. The City has no equity interest in the JPA and does not receive a share of the operating results. Accordingly, the assets and liabilities of the JPA are shown in the City’s Custodial Fund. Separate audited financial statements of the West Cities Communications Center Joint Powers Authority are available by contacting the City of Cypress, P.O. Box 609, Cypress, CA 90630.
105

CITY OF CYPRESS
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2021
(20) Successor Agency
The Cypress Redevelopment Agency (Agency) was activated in May 1979 by the City and dissolved as of February 1, 2012. The primary purpose of the Agency was to eliminate blighted areas within the City by encouraging development of residential, commercial, industrial, recreational and public facilities. The City’s Council members acted as the Agency directors and City staff acted as the Agency’s staff. The City and Agency were financially interdependent. The City made loans to the Agency to use on redevelopment projects and property tax revenues of the Agency were used to repay the loans. The fiscal year-end was June 30, the same as the City. As a result of legislation that dissolved all redevelopment agencies in the State, all assets and liabilities of the former Agency were transferred to either the City of Cypress or the Successor Agency to the City of Cypress Redevelopment Agency on February 1, 2012.

The non-housing assets and liabilities of the dissolved Redevelopment Agency were transferred to the Successor Agency to the Dissolved Cypress Redevelopment Agency on February 1, 2012 as a result of the dissolution of the former Redevelopment Agency. The City is acting in a fiduciary capacity for these non-housing assets and liabilities. All outstanding liabilities of the Successor Agency were satisfied during the previous fiscal year, 2019-20, and therefore the Successor Agency has no outstanding liabilities as of June 30, 2021.

Notes Receivable
The following is a summary of notes receivable transactions for Successor Agency activities for the fiscal year ended June 30, 2021:

The Redevelopment Agency had a promissory note from National Church Residences of Cypress, California for payment of offsite improvements and construction costs relating to the Cypress Sunrise Apartments. Upon dissolution of the Agency on February 1, 2012, the note was transferred to the Successor Agency. The promissory note was initially issued for up to $192,455 in September 1987 and due to mature February 1, 2029. On September 24, 1987, an amount of $120,384 was issued based on actual required assistance followed by a payment of $16,573 (September 29, 1987) leaving a net principal outstanding of $103,761. The note is not payable, in whole or in part, either to principal or interest, prior to February 1, 2029. The interest rate on the note is 9.25% per annum and is not compounded. The outstanding interest accrued on the note though June 30, 2021 is $324,331. The total combined principal and interest outstanding on the note at June 30, 2021 is $428,092.

Upon maturity and repayment of the note, the amount received will be remitted to the County of Orange for distribution to the affected taxing entities. At that time, the Successor Agency can be dissolved.

Balance Balance Due Within Due in More
Description July 1, 2020 Additions Deletions June 30, 2021 One Year than One Year Other Notes $ 418,495 $ 9,597 $ - $ 428,092 $ 428,092 - $ Total $ 418,495 $ 9,597 $ - $ 428,092 $ 428,092 - $
Classification
106

CITY OF CYPRESS
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2021
(21) Economic Assistance Agreement – Tax Abatement
On November 27, 2017 the City Council adopted Ordinance No. 1171, approving a Third Amendment to a development agreement with a commercial landlord located in the City. The purpose of the amendment is to provide a sales tax reimbursement to the landlord in exchange for attracting and retaining a tenant who can provide significant employment opportunities to Cypress residents and increase sales tax revenue to the City.

To be eligible for a sales tax reimbursement the landlord was required to enter into a lease with a qualified tenant who could reasonably be expected to generate gross sales tax revenue to the City of at least $10 million over any 10-year period during the term of the lease.

Effective January 1, 2018, the City pays a monthly sales tax reimbursement payment to the landlord, who in turn credits the amount toward the tenant’s lease. The payment amount is based on annual sales tax generated by the tenant as follows:

If the sales tax generated falls below the $700,000 minimum annual threshold, the reimbursement payments are suspended until sales tax meets or exceeds the minimum annual threshold. The agreement also includes periodic cumulative review periods to ensure the City receives sufficient sales tax revenue to meet predefined minimum thresholds over defined time periods. If the sales tax received during these review periods does not meet the minimum threshold, the tenant is required to pay the City the amount of the shortfall in accordance with the following schedule:

During the fiscal year ended June 30, 2021, the landlord received $450,000 in economic assistance under this Third Amendment.
(22) Other Required Fund Disclosures
The Employees’ Benefit Internal Service Fund had a deficit net position of ($31,713,582) at June 30, 2021 primarily due to the net pension liability associated with the City’s CalPERS pension plans. The City has made all required annual contributions toward this long-term liability, and has committed to set-aside additional monies in the form of a trust to reduce or offset the liability.

The AB 2766 Special Revenue Fund had a deficit fund balance of ($226,304) at June 30, 2021 due to the purchase of a compressed natural gas sewer cleaning truck. The General Fund advanced $490,874 to the AB 2766 Fund for the purchase. The AB 2766 Fund will repay the advance with annual payments from the AB 2766 revenues, which are to be used to reduce air pollution from motor vehicles. The remaining balance of the advance at June 30, 2021 was ($226,304).

Minimum Cumulative
Cumulative Review Period Threshold
January 1, 2018 - June 30, 2019 $1,500,000
July 1, 2019 - June 30, 2024 $5,000,000
July 1, 2024 - June 30, 2029 $5,000,000
Annual Reimbursement
Annual Sales Tax Generated Payment to Landlord
$0 - $699,999 $0
$700,000 - $799,999 $360,000
$800,000 and up $450,000
107

CITY OF CYPRESS
Notes to the Basic Financial Statements, Continued
For the Fiscal Year Ended June 30, 2021
(23) Prior Period Adjustments
The City implemented GASB Statement No. 84 – Fiduciary Activities during fiscal year 2020-21. The City previously reported the activities of the Cypress Business and Professional Center and the West Cities Communication Center Joint Powers Authority as Agency Funds. As a result of the implementation, those funds are now categorized as Custodial Funds. Accounting changes adopted to conform to the provisions of this statement were applied retroactively, resulting in a prior period adjustment of $624,217. The beginning net position of the Custodial Funds has been restated to include this adjustment.
(24) Special Item
On November 23, 2020, the City sold 13.33 acres of land located at the northwest corner of Winners Circle and Katella to SP Acquisition, LLC for a gross sales price of $15,250,000. The land was previously held for resale in the City Capital Projects Fund at a cost basis of $12,712,962. Transaction costs associated with the sale totaled $483,866, therefore, the City realized a gain of $2,053,172. 108

REQUIRED SUPPLEMENTARY

INFORMATION
109

CITY OF CYPRESS
Required Supplementary Information
For the Fiscal Year Ended June 30, 2021
(1) Budgets and Budgetary Accounting
A. Budgetary Control and Budgetary Accounting
Annual budgets are adopted on a basis consistent with generally accepted accounting principles for all governmental funds. The City follows these procedures in establishing the budgetary data reflected in the financial statements: After January 1, department heads prepare estimates for required appropriations for the fiscal year commencing the following July 1. The proposed budget includes estimated expenditures and forecasted revenues for the fiscal year. The data is presented to the City Manager for review. Prior to June 1, the City Manager submits to the City Council a proposed operating budget for the fiscal year commencing the following July 1. The operating budget includes a summary of the proposed expenditures and financial resources of the City, as well as historical data for the preceding two fiscal periods. Prior to July 1, the budget is legally enacted through passage of an adopting resolution. All of the Governmental Funds have legally adopted budgets.

The City Manager is authorized to transfer budgeted amounts as follows: (1) Appropriations budgeted within a department or activity and capital outlay, may be transferred between accounts within the department; (2) Transfers of appropriations between departments and funds, and additional appropriation of fund balances may be made only by authority of the City Council. For budgeting purposes, the general fund is composed of several departments with budgetary control at the department level, while all other budgeted funds are considered a single department with budgetary control at the fund level. Formal budgetary integration is employed as a management control device during the fiscal year for governmental fund types. The budgets are adopted on a basis consistent with generally accepted accounting principles. Budgeted amounts contained within this report are the original and final amended amounts, as approved by the City Council. No budgetary comparisons are presented for the Internal Service and Fiduciary funds.

B. Encumbrances
Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of monies are recorded in order to reserve that portion of the applicable appropriation, is employed as an extension of formal budgetary integration in the General Fund, Special Revenue Funds, and the Capital Projects Fund. Encumbrances outstanding at year-end do not constitute expenditures or liabilities.

Since unexpended and encumbered appropriations of the governmental funds automatically lapse at the end of the fiscal year, they are not included in reported expenditures and the authorization for expenditure must be reestablished through inclusion in the subsequent year’s appropriation.

C. Budgetary Comparison Schedules
The following are the budget comparison schedules for the General Fund, the Recreation and Park District Special Revenue Fund, and the Streets Special Revenue Fund. 110

CITY OF CYPRESS
Budgetary Comparison Schedule, General Fund
Variance with
Final BudgetPositive
Original Actual (Negative)
REVENUES:

Taxes $ 25,494,600 $ 25,494,600 $ 28,546,341 $ 3,051,741 Licenses and permits 590,310 829,310 884,938 55,628
Fines and forfeitures 115,000 115,000 257,141 142,141
From use of property 628,768 628,768 (547,569) (1,176,337) From other agencies 566,484 899,273 240,412 (658,861)
Charges for services 2,975,570 3,444,070 3,481,808 37,738 Other revenue 57,500 57,500 419,100 361,600
TOTAL REVENUES 30,428,232 31,468,521 33,282,171 1,813,650

EXPENDITURES:

Current:

General government - Legislative 738,195 817,062 681,094 135,968 General government - Administration 1,832,207 3,926,213 2,559,201 1,367,012 General government - Finance 2,030,770 2,070,814 2,051,119 19,695 Community development - Planning 1,402,362 1,843,023 1,114,181 728,842 Community development - Building 624,270 851,970 737,927 114,043 Public safety - Police 18,943,334 19,194,823 17,222,083 1,972,740 Public works - Engineering 1,552,667 1,750,679 1,560,942 189,737 Public works - Maintenance 4,691,612 4,856,312 4,308,405 547,907 TOTAL EXPENDITURES 31,815,417 35,310,896 30,234,952 5,075,944

EXCESS OF REVENUES
OVER EXPENDITURES (1,387,185) (3,842,375) 3,047,219 6,889,594 OTHER FINANCING SOURCES (USES):

Transfers in 860,825 985,851 1,323,260 337,409
Transfers out (1,577,019) (2,248,467) (2,221,607) 26,860

TOTAL OTHER FINANCING
SOURCES (USES) (716,194) (1,262,616) (898,347) 364,269
NET CHANGE IN FUND BALANCE $ (2,103,379) $ (5,104,991) 2,148,872 $ 7,253,863 FUND BALANCE - BEGINNING OF YEAR 23,043,790
FUND BALANCE - END OF YEAR $ 25,192,662
Budgeted Amounts
Final
Required Supplementary Information, Continued
For the Fiscal Year Ended June 30, 2021
111
Budgetary Comparison Schedule, Recreation and Park District Special Revenue Fund Final BudgetPositive
Original Actual (Negative)
REVENUES:

Taxes $ 5,710,000 $ 5,710,000 $ 5,958,449 $ 248,449
From use of property 313,500 313,500 101,041 (212,459)
From other agencies 74,100 74,100 32,300 (41,800)
Charges for services 1,023,270 1,023,270 468,056 (555,214) Other revenue 3,500 3,500 4,938 1,438
TOTAL REVENUES 7,124,370 7,124,370 6,564,784 (559,586)

EXPENDITURES:

Current:

Recreation 5,159,333 5,301,894 4,181,884 1,120,010
Capital outlay 14,957,000 15,524,957 6,894,042 8,630,915 TOTAL EXPENDITURES 20,116,333 20,826,851 11,075,926 9,750,925

EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES (12,991,963) (13,702,481) (4,511,142) 9,191,339 OTHER FINANCING SOURCES (USES):

Transfers out (873,205) (873,205) (1,094,928) (221,723)

TOTAL OTHER FINANCING
SOURCES (USES) (873,205) (873,205) (1,094,928) (221,723)

NET CHANGE IN FUND BALANCE $ (13,865,168) $ (14,575,686) (5,606,070) $ 8,969,616 FUND BALANCE - BEGINNING OF YEAR 11,948,616
FUND BALANCE - END OF YEAR $ 6,342,546
Budgeted Amounts
Final
Variance with

CITY OF CYPRESS
Required Supplementary Information, Continued
For the Fiscal Year Ended June 30, 2021
112
Budgetary Comparison Schedule, Streets Special Revenue Fund REVENUES:

From use of property $ 33,000 $ 33,000 $ 32,765 $ (235) From other agencies 2,944,044 2,944,044 2,929,680 (14,364) Charges for services 500 500 8,789 8,289
Other revenue - 55,000 65,673 10,673
TOTAL REVENUES 2,977,544 3,032,544 3,036,907 4,363

EXPENDITURES:

Current:

Public works 1,985,000 2,836,030 2,228,221 607,809
Capital outlay 1,000,000 1,064,606 111,922 952,684
TOTAL EXPENDITURES 2,985,000 3,900,636 2,340,143 1,560,493

EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES (7,456) (868,092) 696,764 1,564,856

OTHER FINANCING USES:

Operating transfers in 350,000 350,000 6,395 (343,605)
Transfers out (1,116,000) (2,989,660) (1,912,850) 1,076,810

TOTAL OTHER
FINANCING USES (766,000) (2,639,660) (1,906,455) 733,205

NET CHANGE IN FUND BALANCE $ (773,456) $ (3,507,752) (1,209,691) $ 2,298,061

FUND BALANCE - BEGINNING OF YEAR 6,097,397
FUND BALANCE - END OF YEAR $ 4,887,706
Original Final Actual (Negative)
Budgeted Amounts Positive
Final BudgetVariance with

CITY OF CYPRESS
Required Supplementary Information, Continued
For the Fiscal Year Ended June 30, 2021
113

CITY OF CYPRESS
Required Supplementary Information, Continued
For the Fiscal Year Ended June 30, 2021
(2) California Public Employees’ Retirement System (CalPERS) City of Cypress Miscellaneous Plan
Schedule of Proportionate Share of the Net Pension Liability Last Ten Fiscal Years (1)
Notes to Schedule:

Benefit Changes: There were no changes to benefits.

Changes in Assumptions:

Fiscal year ended June 30, 2016:

Amounts reported reflect an adjustment of the discount rate from 7.50% (net of administrative expenses) to 7.65% (without a reduction for pension plan administrative expense).

Fiscal year ended June 30, 2018:

The discount rate was reduced from 7.65% to 7.15%.

Fiscal year ended June 30, 2019:

Demographic assumptions and the inflation rate were changed in accordance with the CalPERS Experience Study and Review of Actuarial Assumptions – December 2017.

(1) The City’s CalPERS Miscellaneous Plan was previously administered and reported as an agent multiple-employer plan, however, because the number of active members in the plan fell below 100, it is now administered as a cost-sharing multiple-employer plan, effective with the reporting for the fiscal year ended June 30, 2019.
2021 2020 2019

0.53616% 0.52186% 0.50778%
$ 22,615,628 $ 20,897,731 $ 19,136,711
$ 6,072,109 $ 6,385,921 $ 6,863,694
372.45% 327.25% 278.81%

74.71% 75.87% 76.84%
$ 2,980,733 $ 2,722,708 $ 2,418,263
Plan's proportionate share of the net pension liability as a percentage of covered payroll
Plan's proportionate share of the fiduciary net position as a percentage of the Plan's total pension liability
Plan's proportionate share of aggregate employer contributions Plan's proportion of the net pension liability
Plan's proportionate share of the net pension liability Plan's Covered Payroll
114

CITY OF CYPRESS
Required Supplementary Information, Continued
For the Fiscal Year Ended June 30, 2021
(2) California Public Employees’ Retirement System (CalPERS) (Continued) City of Cypress Miscellaneous Plan (Continued)
Schedule of Changes in the Net Pension Liability and Related Ratios Last Ten Fiscal Years (1)
Notes to Schedule:

Benefit Changes: There were no changes to benefits.

Changes in Assumptions:

Fiscal year ended June 30, 2016:

Amounts reported reflect an adjustment of the discount rate from 7.50% (net of administrative expenses) to 7.65% (without a reduction for pension plan administrative expense).

Fiscal year ended June 30, 2018:

The discount rate was reduced from 7.65% to 7.15%.

Fiscal year ended June 30, 2019:

Demographic assumptions and the inflation rate were changed in accordance with the CalPERS Experience Study and Review of Actuarial Assumptions – December 2017. 2018 2017 2016 2015
Total Pension Liability:

Service cost $ 1,241,908 $ 1,042,402 $ 983,336 $ 1,067,782 Interest on total pension liability 5,374,496 5,227,927 4,985,622 4,778,432 Differences between expected and actual experience (726,719) 177,725 (249,155) - Changes in assumptions 4,509,183 (1,246,317) - - Changes in benefits - - - - Benefit payments, including refunds of employee contributions (3,538,721) (3,108,674) (2,909,007) (2,789,811) Net Change in Total Pension Liability 6,860,147 3,339,380 1,564,479 3,056,403 Total Pension Liability - Beginning of Year 72,533,703 69,194,323 67,629,844 64,573,441 Total Pension Liability - End of Year (a) $ 79,393,850 $ 72,533,703 $ 69,194,323 $ 67,629,844 Plan Fiduciary Net Position:

Contributions - employer $ 1,298,683 $ 1,242,386 $ 997,118 $ 859,007 Contributions - employee 552,260 622,404 529,141 529,155 Net investment income 6,191,774 274,070 1,253,565 8,456,694 Benefit payments (3,538,721) (3,108,674) (2,909,007)
Administrative expense (81,255) (34,153) (63,073)
Plan to plan resource movement - - (2,789,811) (406) Net Change in Plan Fiduciary Net Position 4,422,741 (1,003,967) (192,662) 7,055,045 Plan Fiduciary Net Position - Beginning of Year 55,035,012 56,038,979 56,231,641 49,176,596 Plan Fiduciary Net Position - End of Year (b) $ 59,457,753 $ 55,035,012 $ 56,038,979 $ 56,231,641 Net Pension Liability - Ending (a)-(b) $ 19,936,097 $ 17,498,691 $ 13,155,344 $ 11,398,203 Plan fiduciary net position as a percentage of the
total pension liability 74.89% 75.88% 80.99% 83.15%
Covered Payroll $ 6,994,962 $ 7,139,555 $ 6,539,007 $ 6,744,885 Net pension liability as percentage of
covered payroll 285.01% 245.09% 201.18% 168.99%
115

CITY OF CYPRESS
Required Supplementary Information, Continued
For the Fiscal Year Ended June 30, 2021
(2) California Public Employees’ Retirement System (CalPERS) (Continued) City of Cypress Miscellaneous Plan (Continued)
Schedule of Plan Contributions
Last Ten Fiscal Years (1)
(1) Historical information is required only for measurement periods for which GASB 68 is applicable. The fiscal year ended June 30, 2015 was the first year of implementation.
2021 2020 2019 2018 2017 2016 2015
$ 2,230,654 $ 2,002,390 $ 1,729,721 $ 1,487,869 $ 1,298,683 $ 1,244,868 $ 1,001,586 (2,230,654) (2,002,390) (1,729,721) (1,487,869) (1,298,683) (1,244,868) (1,001,586) $ - $ - $ - $ - $ - $ - $ - $ 6,135,709 $ 6,072,109 $ 6,385,921 $ 6,863,694 $ 6,994,942 $ 7,139,555 $ 6,539,007

36.36% 32.98% 27.09% 21.68% 18.57% 17.44% 15.32%
Actuarially determined contribution
Contributions in relation to the actuarially
determined contributions
Contribution deficiency (excess)
Covered Payroll
Contributions as a percentage of covered
payroll
116

SCHEDULE OF PLAN CONTRIBUTIONS
Last Ten Fiscal Years *
*Historical information is required only for measurement periods for which GASB 68 is applicable. The fiscal year ended June 30, 2015 was the first year of implementation.

Notes to Schedule:

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

Actuarial cost method Entry age Entry age Entry age Entry age Entry age Entry age Entry age Amortization method (1) (1) (1) (1) (1) (1) (1)
Asset valuation method Fair Value Fair Value Fair Value Fair Value Fair Value Fair Value 15-Year Smoothed Market
Inflation 2.50% 2.75% 2.75% 2.75% 2.75% 2.75% 2.75%
Salary increases (2) (2) (2) (2) (2) (2) (2)
Investment rate of return 7.15% (3) 7.375% (3) 7.375% (3) 7.50% (3) 7.50% (3) 7.50% (3) 7.50% (3) Retirement age (4) (4) (4) (4) (4) (4) (4)
Mortality (5) (5) (5) (5) (5) (5) (5)
(1) Level percentage of payroll, closed
(2) Depending on age, service, and type of employment
(3) Net of pension plan investment expense, including inflation (4) 50 - 63 (2,0% at 55); 52 - 67 (2.0% at 62)
(5) Mortality assumption are based on mortality rates resulting from the most recent CalPERS Experience Study adopted by the CalPERS Board. 117

0.45737% 0.44567% 0.43772% 0.42375% 0.42470% 0.41016% 0.39621% $ 30,471,506 $ 27,821,165 $ 25,683,654 $ 25,320,193 $ 21,996,187 $ 16,900,538 $ 14,861,787 $ 5,590,681 $ 5,953,364 $ 5,823,413 $ 5,539,232 $ 5,634,190 $ 5,200,954 $ 5,075,058 545.04% 467.32% 441.04% 457.11% 390.41% 324.95% 292.84%

71.35% 72.54% 73.38% 72.73% 73.87% 79.00% 80.99%
$ 3,927,236 $ 3,222,885 $ 2,986,119 $ 2,331,004 $ 2,149,038 $ 2,163,119 $ 1,792,684 Plan's proportion of the net
pension liability
Plan's proportionate share of the
net pension liability
Plan's Covered Payroll
Plan's proportionate share of the
net pension liability as a
percentage of covered payroll
Plan's proportionate share of the
fiduciary net position as a
percentage of the Plan's total
pension liability
Plan's proportionate share of
aggregate employer contributions
118

CITY OF CYPRESS
Required Supplementary Information, Continued
For the Fiscal Year Ended June 30, 2021
(2) California Public Employees’ Retirement System (CalPERS) (Continued) City of Cypress Safety Plan (Continued)
Schedule of Proportionate Share of the Net Pension Liability Last Ten Fiscal Years (*)
Notes to Schedule:

Benefit Changes: There were no changes to benefits.

Changes in Assumptions:

Fiscal year ended June 30, 2016:

Amounts reported reflect an adjustment of the discount rate from 7.50% (net of administrative expenses) to 7.65% (without a reduction for pension plan administrative expense).

Fiscal year ended June 30, 2018:

The discount rate was reduced from 7.65% to 7.15%.

Fiscal year ended June 30, 2019:

Demographic assumptions and the inflation rate were changed in accordance with the CalPERS Experience Study and Review of Actuarial Assumptions – December 2017.
*Historical information is required only for measurement periods for which GASB 68 is applicable. The fiscal year ended June 30, 2015 was the first year of implementation.
119

SCHEDULE OF CONTRIBUTIONS
Last Ten Fiscal Years*
*Historical information is required only for measurement periods for which GASB 68 is applicable. The fiscal year ended June 30, 2015 was the first year of implementation.
2021 2020 2019 2018 2017 2016 2015
$ 3,130,711 $ 2,821,054 $ 2,546,099 $ 2,222,915 $ 1,967,405 $ 1,807,579 $ 1,503,960 (3,130,711) (2,821,054) (2,546,099) (2,222,915) (1,967,405) (1,807,579) (1,503,960) $ - $ - $ - $ - $ - $ - $ - $ 5,651,021 $ 5,590,681 $ 5,953,364 $ 5,823,413 $ 5,539,232 $ 5,634,190 $ 5,200,954

55.40% 50.46% 42.77% 38.17% 35.52% 32.08% 28.92%
Contribution deficiency (excess)
Covered Payroll
Contractually required contribution
(actuarially determined)
Contributions in relation to the actuarially
determined contributions
Contributions as a percentage of covered
payroll
120

Notes to Schedule:

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

Actuarial cost method Entry age Entry age Entry age Entry age Entry age Entry age Entry age Amortization method (1) (1) (1) (1) (1) (1) (1)
Asset valuation method Fair Value Fair Value Fair Value Fair Value Fair Value Fair Value 15-Year Smoothed Market
Inflation 2.50% 2.75% 2.75% 2.75% 2.75% 2.75% 2.75%
Salary increases (2) (2) (2) (2) (2) (2) (2)
Investment rate of return 7.15% (3) 7.375% (3) 7.375% (3) 7.50% (3) 7.50% (3) 7.50% (3) 7.50% (3) Retirement age (4) (4) (4) (4) (4) (4) (4)
Mortality (5) (5) (5) (5) (5) (5) (5)
(1) Level percentage of payroll, closed
(2) Depending on age, service, and type of employment
(3) Net of pension plan investment expense, including inflation (4) 50 (3.0% at 50); 50 - 57 (2.7% at 57)
(5) Mortality assumption are based on mortality rates resuting from the most recent CalPERS Experience Study adopted by the CalPERS Board. 121

CITY OF CYPRESS
Required Supplementary Information
For the Fiscal Year Ended June 30, 2021
(3) Terminated Orange County Employees Retirement System Plan (OCERS) Schedule of Proportionate Share of the Net Pension Liability Last Ten Fiscal Years (1)
Notes to Schedule:
(1) The Cypress Recreation and Park District (District) withdrew from OCERS in October 2000. At that time, OCERS did not have a policy addressing how the District’s liability would be funded, nor was a liability recognized by the District. The District and OCERS entered into a Withdrawing Employer and Continuing Contribution Agreement on October 15, 2018, therefore fiscal year 2018- 19 is the first year reporting the OCERS pension liability. 2021 2020 2019

0.00400% 0.00500% 0.00700%
$ 185,117 $ 262,415 $ 408,781
$ - $ - $ - n/a n/a n/a

96.03% 94.23% 90.81%
n/a n/a n/a
Plan's proportion of the net pension liability
Plan's proportionate share of the net pension liability Plan's Covered Payroll
Plan's proportionate share of the net pension liability as a percentage of covered payroll
Plan's proportionate share of the fiduciary net position as a percentage of the Plan's total pension liability
Plan's proportionate share of aggregate employer
contributions
122

CITY OF CYPRESS
Required Supplementary Information, Continued
For the Fiscal Year Ended June 30, 2021
(3) Terminated Orange County Employees Retirement System Plan (OCERS) (Continued)
Schedule of Plan Contributions
Last Ten Fiscal Years (1)
Methods and Assumptions Used to Determine Contribution Rates:

In accordance with the Withdrawing Employer and Continuing Contribution Agreement between the Cypress Recreation and Park District (District) and OCERS, OCERS will recalculate the District’s unfunded accrued actuarial liability commencing December 31, 2020, and every three years thereafter. Based on this recalculation, the District shall satisfy any new obligation required within three years of the recalculation date. The next UAAL payment is due on or before December 31, 2023.

In determining the net pension liability, the valuation value of assets (VVA) as of December 31, 2019 is rolled forward to December 31, 2020 for the actual contributions, benefit payments and return on the VVA during 2020. The VVA is then marked to the Plan’s Fiduciary Net Position as of December 31, 2020. The total pension liability is obtained from internal valuation results by rolling forward the total pension liability from December 31, 2019.
2021 2020 2019
$ - $ 739,966 - $
- (739,966) - $ - $ - $ - $ - $ - $ - n/a n/a n/a
Valuation Date 12/31/2018 12/31/2017 12/31/2016
Contribution deficiency (excess)
Covered Payroll
Contractually required contribution (actuarially
determined)
Contributions in relation to the actuarially determined contributions
Contributions as a percentage of covered payroll
123

CITY OF CYPRESS
Required Supplementary Information, Continued
For the Fiscal Year Ended June 30, 2021
(4) Post-Employment Health Care Benefits
Schedule of Changes in the Total OPEB Liability and Related Ratios for the Measurement Period Ended June 30
Last Ten Fiscal Years (1)
Notes to Schedule:

Benefit Changes: None
Changes in Assumptions: The discount rate, which is based on the Bond Buyer 20-year bond General Obligation Index, decreased from 2.20% to 2.16%. (1) Historical information is required only for measurement periods for which GASB 75 is applicable. Fiscal Year 2018 was the first year of implementation. Future years’ information will be displayed up to 10 years as information becomes available.

GASB 75 also requires the presentation of a 10-year schedule of contributions if an actuarially determined contribution is calculated. The City’s plan is not funded by an OPEB trust, therefore an actuarially determined contribution is not calculated nor presented here.
2021 2020 2019 2018
Total OPEB Liability:

Service cost $ 382,033 $ 370,906 $ 293,425 $ 304,903
Interest on the total OPEB liability 232,699 232,807 330,023 306,496 Actual and expected experience difference 428,577 (155,120) 63,400 10,351 Changes in assumptions (593,595) 1,491,035 447,917 (324,881) Changes in benefit terms - - - - Benefit payments, including implicit subsidy (460,068) (394,969) (397,959) (329,123) Net Change in Total OPEB Liability (10,354) 1,544,659 736,806 (32,254) Total OPEB Liability - Beginning of Year 10,617,458 9,072,799 8,335,993 8,368,247 Total OPEB Liability - End of Year (a) $ 10,607,104 $ 10,617,458 $ 9,072,799 $ 8,335,993 Plan fiduciary net position as a percentage of the
Total OPEB liability 0.00% 0.00% 0.00% 0.00%
Covered-employee payroll $ 13,846,871 $ 14,180,802 $ 14,518,971 $ 14,482,504 Total OPEB liability as percentage of
covered- employee payroll 76.60% 74.87% 62.49% 57.56%
124
Supplemental Schedules
125

CITY OF CYPRESS
Budgetary Comparison Schedules for Other Major Governmental Fund June 30, 2021
Budgetary comparison schedules are presented as part of the basic financial statements for the General Fund and all Major Special Revenue Funds as provided for by GASB 34.

The budgetary comparison schedules for the remaining Major Fund is presented to aid in additional analysis and is not a required part of the basic financial statements. The other Major Fund is as follows:

City Capital Projects – To account for construction of major transportation infrastructure and public facilities.
126
Final BudgetPositive
Original Actual (Negative)
REVENUES:

From use of property $ 750,000 $ 750,000 $ 443,888 $ (306,112) From other agencies - 225,000 - (225,000)
TOTAL REVENUES 750,000 975,000 443,888 (531,112)

EXPENDITURES:

Current:

Public works 225,000 1,272,252 940,847 331,405
Capital outlay 2,295,000 10,003,859 4,642,503 5,361,356 TOTAL EXPENDITURES 2,520,000 11,276,111 5,583,350 5,692,761

EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES (1,770,000) (10,301,111) (5,139,462) 5,161,649 OTHER FINANCING SOURCES:

Transfers in 2,737,000 7,790,660 6,363,157 (1,427,503)

TOTAL OTHER
FINANCING SOURCES 2,737,000 7,790,660 6,363,157 (1,427,503)

NET CHANGE IN FUND BALANCE
BEFORE SPECIAL ITEM 967,000 (2,510,451) 1,223,695 3,734,146 SPECIAL ITEM:

Gain on sale of land held for resale (Note 24) - 2,053,172 - 2,053,172 NET CHANGE IN FUND BALANCE $ 967,000 $ (2,510,451) 3,276,867 $ 5,787,318 FUND BALANCE - BEGINNING OF YEAR 83,708,642
FUND BALANCE - END OF YEAR $ 86,985,509
Budgeted Amounts
Final
Variance with

CITY OF CYPRESS

SCHEDULE OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCE - BUDGET AND ACTUAL

CITY CAPITAL PROJECTS FUND
For the fiscal year ended June 30, 2021
127

CITY OF CYPRESS
Nonmajor Governmental Funds
June 30, 2021
The combining statements for Nonmajor Governmental Funds represent a consolidation of the information for specific funds contained in the Supplementary Financial Statements.

These statements, along with the budgetary comparison schedules, summarize the financial information contained in the other Special Revenue Funds.

Special Revenue Fund Descriptions
Special Revenue Funds are used to account for taxes and other revenues required to be set aside in accordance with law or administrative regulation for a specific purpose. A brief description of each of the City’s Special Revenue Funds follows:

Pandemic Response – To account for the Coronavirus Aid, Relief, and Economic Security (CARES) Act and the American Rescue Plan Act revenues received from county, state and federal sources in response to the COVID-19 pandemic.

Local Drainage – To account for developer receipts and expenditures for master planned drainage projects.

Stanton Channel Maintenance District – To account for a special assessment for maintenance of the Stanton Channel landscaped berm in the business park.

Lighting District – To account for property taxes assessed specifically for expenditures for city street lights, traffic signal maintenance and construction.

CATV PEG Grant - To account for monies received from the City’s cable franchise transfer agreement that are restricted to use for costs associated with the City’s video PEG access services.

AB 2766 – To account for receipts and expenditures of money funded under AB 2766 legislation for emission reduction.

Traffic Safety – To account for receipts of vehicle code violation fines and expenditures for traffic safety.

Supplemental Law Enforcement – To account for receipts and expenditures of money funded under AB 3229 legislation for law enforcement.

Narcotics Asset Seizure – To account for funds seized by the Police Department during narcotic investigations and allocated to the City.

Low and Moderate Housing Assets – To account for housing assets transferred to the City upon the dissolution of the Redevelopment Agency on February 1, 2012. 128
Channel
Local Maintenance
Drainage District
ASSETS
Cash and investments $ - $ 831,023 $ 175,042 $ 5,788,094 $ 609,619 Receivables:

Taxes - - - 14,989 -
Interest 50 547 - 3,966 -
Notes, net of allowance - - - - -
Accounts 14,919 - - 10,138 18,506
Land Held for Resale - - - - -
TOTAL ASSETS $ 14,969 $ 831,570 $ 175,042 $ 5,817,187 $ 628,125

LIABILITIES AND FUND BALANCES

LIABILITIES:

Accounts payable and other accrued liabilities $ - $ - $ 3,085 $ 84,109 $ - Unavailable revenues 14,919 - - 5,138 -
Due to other funds 50 - - - -
Advances to other funds - - - - -

TOTAL LIABILITIES 14,969 - 3,085 89,247 -

FUND BALANCE:

Restricted - 831,570 171,957 5,727,940 628,125
Unassigned - - - - -
TOTAL FUND BALANCES - 831,570 171,957 5,727,940 628,125

TOTAL LIABILITIES
AND FUND BALANCES $ 14,969 $ 831,570 $ 175,042 $ 5,817,187 $ 628,125 Special Revenue Funds
Pandemic
Stanton
Response Peg Grant

COMBINING BALANCE SHEET

CITY OF CYPRESS
Lighting
District
June 30, 2021

NONMAJOR GOVERNMENTAL FUNDS
CATV
129
Traffic
AB 2766 Safety
$ - $ - $ 6,195 $ 1,290,025 $ 54,571 $ 8,754,569
- - - - - 14,989
- - 39 2,230 131 6,963
- - - - 108,025 108,025
16,359 6,644 - 613 1,587 68,766
- - - - 1,421,708 1,421,708
$ 16,359 $ 6,644 $ 6,234 $ 1,292,868 $ 1,586,022 $ 10,375,020 $ - $ - $ 6,234 $ 58,947 $ 1,690 $ 154,065
- - - - - 20,057
16,359 6,644 - - - 23,053
226,304 - - - - 226,304
242,663 6,644 6,234 58,947 1,690 423,479
- - - 1,233,921 1,584,332 10,177,845
(226,304) - - - - (226,304)
(226,304) - - 1,233,921 1,584,332 9,951,541
$ 16,359 $ 6,644 $ 6,234 $ 1,292,868 $ 1,586,022 $ 10,375,020 Seizure
Low &
Special Revenue Funds (Continued)
Narcotics
Asset
Supplemental
Law
Total
Funds
Governmental
Moderate
Housing
Assets
Nonmajor
Enforcement
130
REVENUES:

Taxes $ - $ - $ - $ 1,363,781 $ 76,083
Fines and forfeitures - - - - -
From use of property 505 4,656 - 32,448 -
From other agencies 675,035 - - 5,302 -
Charges for services - 7,372 85,739 - -
Other revenue 611 - - 13,885 -
TOTAL REVENUES 676,151 12,028 85,739 1,415,416 76,083

EXPENDITURES:

Current:

General government 194,355 - - - -
Community development - - - - -
Public safety - - - - -
Public works - - 57,805 960,206 -
Capital outlay - - 2,800 154,334 -
TOTAL EXPENDITURES 194,355 - 60,605 1,114,540 -

EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 481,796 12,028 25,134 300,876 76,083

OTHER FINANCING USES:

Transfers out (481,796) - (9,091) (173,576) (4,497)
TOTAL OTHER FINANCING USES (481,796) - (9,091) (173,576) (4,497)

NET CHANGE IN FUND BALANCES - 12,028 16,043 127,300 71,586

FUND BALANCE - BEGINNING OF YEAR - 819,542 155,914 5,600,640 556,539 FUND BALANCES - END OF YEAR $ - $ 831,570 $ 171,957 $ 5,727,940 $ 628,125 Pandemic
Response Drainage

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

NONMAJOR GOVERNMENTAL FUNDS
Maintenance
For the fiscal year ended June 30, 2021
Local
Stanton
Channel
District
CATV
Peg Grant
Special Revenue Funds

CITY OF CYPRESS
District
Lighting
131
$ - $ - $ - $ - $ - $ 1,439,864
- 88,845 - - - 88,845
- - 257 18,104 2,615 58,585
64,339 - 156,731 - - 901,407
- - - - - 93,111
- - - 300,415 6,462 321,373
64,339 88,845 156,988 318,519 9,077 2,903,185
- - - - - 194,355
- - - - 40,105 40,105
- - 156,988 22,144 - 179,132
- - - - - 1,018,011
- - - - - 157,134
- - 156,988 22,144 40,105 1,588,737
64,339 88,845 - 296,375 (31,028) 1,314,448
- (88,845) - (2,151,229) - (2,909,034)
- (88,845) - (2,151,229) - (2,909,034)
64,339 - - (1,854,854) (31,028) (1,594,586)
(290,643) - - 3,088,775 1,615,360 11,546,127
$ (226,304) $ - $ - $ 1,233,921 $ 1,584,332 $ 9,951,541 Special Revenue Funds (Continued)
Supplemental
Safety
Nonmajor
Total
Narcotics
Low &
Law Housing
Assets
Traffic
Moderate
AB 2766 Enforcement Seizure Funds
Asset Governmental
132
REVENUES:

From use of property $ $ - $ 505 - $ 505
Charges for services 675,036 - 675,035 (1)
Other revenue - - 611 611
TOTAL REVENUES 675,036 - 676,151 1,115

EXPENDITURES:

Current:

General government 194,355 - 194,355 -
TOTAL EXPENDITURES 194,355 - 194,355 -

EXCESS OF REVENUES
OVER EXPENDITURES 480,681 - 481,796 1,115

OTHER FINANCING USES:

Transfers out (125,103) - (481,796) (356,693)

TOTAL OTHER
FINANCING USES (125,103) - (481,796) (356,693)

EXCESS (DEFICIENCY) OF REVENUES

OVER EXPENDITURES
AND OTHER FINANCING USES $ - $ 355,578 - $ (355,578)

FUND BALANCE - BEGINNING OF YEAR -
FUND BALANCE - END OF YEAR $ -

CITY OF CYPRESS

SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCES - BUDGET AND ACTUAL

PANDEMIC RESPONSE SPECIAL REVENUE FUND
For the fiscal year ended June 30, 2021
Variance with
Final BudgetBudgeted Amounts Positive
Original Final Actual (Negative)
133
REVENUES:

From use of property $ 9,000 $ 9,000 $ 4,656 $ (4,344)
Charges for services 5,000 5,000 7,372 2,372
TOTAL REVENUES $ 14,000 $ 14,000 12,028 $ (1,972)

FUND BALANCE - BEGINNING OF YEAR 819,542
FUND BALANCE - END OF YEAR $ 831,570
Positive
Final BudgetVariance with
Original Final Actual (Negative)
For the fiscal year ended June 30, 2021

CITY OF CYPRESS

SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCES - BUDGET AND ACTUAL

LOCAL DRAINAGE SPECIAL REVENUE FUND
Budgeted Amounts
134
REVENUES:

Charges for services $ 87,690 $ 87,690 $ 85,739 $ (1,951) TOTAL REVENUES 87,690 87,690 85,739 (1,951)

EXPENDITURES:

Current:

Public works 52,010 63,600 57,805 5,795
Capital outlay - 2,800 2,800 -
TOTAL EXPENDITURES 52,010 66,400 60,605 5,795

EXCESS OF REVENUES
OVER EXPENDITURES 35,680 21,290 25,134 3,844

OTHER FINANCING USES:

Transfers out (7,802) (8,222) (9,091) (869)

TOTAL OTHER
FINANCING USES (7,802) (8,222) (9,091) (869)

EXCESS (DEFICIENCY) OF REVENUES

OVER EXPENDITURES
AND OTHER FINANCING USES $ 27,878 $ 13,068 16,043 $ 2,975

FUND BALANCE - BEGINNING OF YEAR 155,914
FUND BALANCE - END OF YEAR $ 171,957
Positive
Final BudgetVariance with
Original Final Actual (Negative)
For the fiscal year ended June 30, 2021

CITY OF CYPRESS

SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCES - BUDGET AND ACTUAL

STANTON CHANNEL MAINTENANCE DISTRICT SPECIAL REVENUE FUND Budgeted Amounts
135
REVENUES:

Taxes $ 1,316,500 $ 1,316,500 $ 1,363,781 $ 47,281
From use of property 60,000 60,000 32,448 (27,552)
From other agencies 5,740 5,740 5,302 (438)
Other revenue 10,000 10,000 13,885 3,885
TOTAL REVENUES 1,392,240 1,392,240 1,415,416 23,176

EXPENDITURES:

Current:

Public works 920,154 1,097,204 960,206 136,998
Capital outlay 360,000 504,298 154,334 349,964
TOTAL EXPENDITURES 1,280,154 1,601,502 1,114,540 486,962

EXCESS OF REVENUES
OVER EXPENDITURES 112,086 (209,262) 300,876 510,138

OTHER FINANCING USES:

Transfers out (542,023) (593,668) (173,576) 420,092

TOTAL OTHER
FINANCING USES (542,023) (593,668) (173,576) 420,092

EXCESS (DEFICIENCY) OF REVENUES

OVER EXPENDITURES
AND OTHER FINANCING USES $ (429,937) $ (802,930) 127,300 $ 930,230

FUND BALANCE - BEGINNING OF YEAR 5,600,640
FUND BALANCE - END OF YEAR $ 5,727,940
Original Final Actual (Negative)
Budgeted Amounts Positive
Final BudgetVariance with
For the fiscal year ended June 30, 2021

CITY OF CYPRESS

SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCES - BUDGET AND ACTUAL

LIGHTING DISTRICT SPECIAL REVENUE FUND
136
REVENUES:

Taxes $ 80,000 $ 80,000 $ 76,083 $ (3,917)
TOTAL REVENUES 80,000 80,000 76,083 (3,917)

OTHER FINANCING USES:

Transfers out - (4,497) (4,497) -

TOTAL OTHER
FINANCING USES - (4,497) (4,497) -

EXCESS (DEFICIENCY) OF REVENUES
AND OTHER FINANCING USES $ 80,000 $ 75,503 71,586 $ (3,917)

FUND BALANCE - BEGINNING OF YEAR 556,539
FUND BALANCE - END OF YEAR $ 628,125
Positive
Final BudgetVariance with
Original Final Actual (Negative)
For the fiscal year ended June 30, 2021

CITY OF CYPRESS

SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCES - BUDGET AND ACTUAL

CABLE TV PEG GRANT SPECIAL REVENUE FUND
Budgeted Amounts
137
REVENUES:

From other agencies $ 62,000 $ 62,000 $ 64,339 $ 2,339
TOTAL REVENUES 62,000 62,000 64,339 2,339

OTHER FINANCING USES:

Transfers out (62,000) (62,000) - 62,000

TOTAL OTHER
FINANCING USES (62,000) (62,000) - 62,000

EXCESS (DEFICIENCY) OF REVENUES
OVER OTHER FINANCING USES $ $ - - $ 64,339 64,339

FUND BALANCE - BEGINNING OF YEAR (290,643)
FUND BALANCE - END OF YEAR $ (226,304)
Positive
Final BudgetVariance with
Original Final Actual (Negative)
For the fiscal year ended June 30, 2021

CITY OF CYPRESS

SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCES - BUDGET AND ACTUAL
AB 2766 SPECIAL REVENUE FUND
Budgeted Amounts
138
REVENUES:

Fines and forfeitures $ 120,000 $ 120,000 $ 88,845 $ (31,155) TOTAL REVENUES 120,000 120,000 88,845 (31,155)

OTHER FINANCING USES:

Transfers out (120,000) (120,000) (88,845) 31,155

TOTAL OTHER
FINANCING USES (120,000) (120,000) (88,845) 31,155

EXCESS (DEFICIENCY) OF REVENUES
AND OTHER FINANCING USES $ - $ - - $ -

FUND BALANCE - BEGINNING OF YEAR -
FUND BALANCE - END OF YEAR $ -
Original Final Actual (Negative)
Budgeted Amounts Positive
Final BudgetVariance with
For the fiscal year ended June 30, 2021

CITY OF CYPRESS

SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCES - BUDGET AND ACTUAL

TRAFFIC SAFETY SPECIAL REVENUE FUND
139
REVENUES:

From use of property $ 300 $ 300 $ 257 $ (43)
From other agencies 120,124 156,688 156,731 43
TOTAL REVENUES 120,424 156,988 156,988 -

EXPENDITURES:

Current:

Public safety 120,424 156,988 156,988 -
TOTAL EXPENDITURES 120,424 156,988 156,988 -

EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES $ - $ - - $ -

FUND BALANCE - BEGINNING OF YEAR -
FUND BALANCE - END OF YEAR $ -
Positive
Final BudgetVariance with
Original Final Actual (Negative)
For the fiscal year ended June 30, 2021

CITY OF CYPRESS

SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCES - BUDGET AND ACTUAL

SUPPLEMENTAL LAW ENFORCEMENT SPECIAL REVENUE FUND
Budgeted Amounts
140
REVENUES:

From use of property $ 14,500 $ 14,500 $ 18,104 $ 3,604 Other revenue 10,000 10,000 300,415 290,415
TOTAL REVENUES 24,500 24,500 318,519 294,019

EXPENDITURES:

Current:

Public safety 74,548 74,548 22,144 52,404
TOTAL EXPENDITURES 74,548 74,548 22,144 52,404

EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES (50,048) (50,048) 296,375 346,423

OTHER FINANCING USES:

Transfers out (2,650,000) - (2,151,229) 498,771

TOTAL OTHER
FINANCING USES (2,650,000) - (2,151,229) 498,771

EXCESS (DEFICIENCY) OF REVENUES

OVER EXPENDITURES
AND OTHER FINANCING USES $ (50,048) $ (2,700,048) (1,854,854) $ 845,194

FUND BALANCE - BEGINNING OF YEAR 3,088,775
FUND BALANCE - END OF YEAR $ 1,233,921
Original Final Actual (Negative)
Budgeted Amounts Positive
Final BudgetVariance with
For the fiscal year ended June 30, 2021

CITY OF CYPRESS

SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCES - BUDGET AND ACTUAL

NARCOTICS ASSET SEIZURE SPECIAL REVENUE FUND
141

CITY OF CYPRESS

SCHEDULE OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCE - BUDGET AND ACTUAL

LOW AND MODERATE HOUSING ASSETS SPECIAL REVENUE FUND
Final BudgetPositive
Original Actual (Negative)
REVENUES:

From use of property $ 3,000 $ 3,000 $ 2,615 $ (385)
Other revenue 6,480 6,480 6,462 (18)
TOTAL REVENUES 9,480 9,480 9,077 (403)

EXPENDITURES:

Current:

Community Development 39,657 39,657 40,105 448
TOTAL EXPENDITURES 39,657 39,657 40,105 448

EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES $ (30,177) $ (30,177) (31,028) $ (851)

FUND BALANCE - BEGINNING OF YEAR 1,615,360
FUND BALANCE - END OF YEAR $ 1,584,332
Variance with
Budgeted Amounts
Final
For the fiscal year ended June 30, 2021
142

CITY OF CYPRESS
Internal Service Funds
June 30, 2021
The Internal Service Funds are used to finance and account for goods and services provided by one City department to other City departments on a cost-reimbursement basis, including depreciation.

Central Services – To account for the costs of the strategic technology plan, building maintenance, vehicle and equipment maintenance, print production, and accumulated equipment replacement funds.

Recreation District Central Services – To account for the costs of building maintenance, vehicle and equipment maintenance, and accumulated equipment replacement funds for the Recreation District.

Employees’ Benefit – To account for employee fringe benefits.

Liability Insurance – To account for the cost of the City’s public liability/risk management program.

Workers’ Compensation Insurance – To account for the cost of the City’s workers’ compensation insurance program.
143
Recreation
District
Central Central
Services Services
ASSETS
CURRENT ASSETS:

Cash and investments $ 19,770,718 $ 785,587
Restricted cash and investments - -
Receivables:

Interest - -
Accounts 97,886 -
Prepaid items 21,531 4,256
Inventory 1,697 -
TOTAL CURRENT ASSETS 19,891,832 789,843
NON-CURRENT ASSETS:

Equipment (Net) 3,313,945 284,512
TOTAL NON-CURRENT ASSETS 3,313,945 284,512
TOTAL ASSETS 23,205,777 1,074,355

DEFERRED OUTFLOWS OF RESOURCES
Deferred amount from pension plans - -
Deferred amount from OPEB - -
Deferred amount from OCERS - -

TOTAL DEFERRED OUTFLOWS OF RESOURCES - -

LIABILITIES
CURRENT LIABILITIES:

Accounts payable and other accrued liabilities 136,368 95,445 Claims payable - -
Compensated absences - -
TOTAL CURRENT LIABILITIES 136,368 95,445
LONG-TERM LIABILITIES:

Claims payable - -
Retirees' health payable - -
Compensated absences - -
Net pension liability - -

TOTAL LONG-TERM LIABILITIES - -
TOTAL LIABILITIES 136,368 95,445

DEFERRED INFLOWS OF RESOURCES
Deferred amount from pension plans - -
Deferred amount from OPEB - -
Deferred amount from OCERS - -

TOTAL DEFERRED INFLOWS OF RESOURCES - -
NET POSITION:

Net invested in capital assets 3,313,945 284,512
Restricted:

Pension trust - -
Unrestricted 19,755,464 694,398
TOTAL NET POSITION $ 23,069,409 $ 978,910

CITY OF CYPRESS

COMBINING STATEMENT OF NET POSITION

INTERNAL SERVICE FUNDS
June 30, 2021
144
Employees' Liability Workers'
Benefit Insurance Compensation Total
$ 6,210,899 $ 3,022,624 $ 2,334,912 $ 32,124,740
17,913,583 - - 17,913,583
2,955 - - 2,955
555,636 - 3,814 657,336
8,978 - - 34,765
- - - 1,697
24,692,051 3,022,624 2,338,726 50,735,076
- - - 3,598,457
- - - 3,598,457
24,692,051 3,022,624 2,338,726 54,333,533
11,850,207 - - 11,850,207
1,635,626 - - 1,635,626
1,675,168 - - 1,675,168
15,161,001 - - 15,161,001
674,048 9,473 12,396 927,730
- 150,000 425,500 575,500
573,800 - - 573,800
1,247,848 159,473 437,896 2,077,030
- 449,524 1,276,310 1,725,834
10,607,104 - - 10,607,104
1,721,461 - - 1,721,461
53,272,251 - - 53,272,251
65,600,816 449,524 1,276,310 67,326,650
66,848,664 608,997 1,714,206 69,403,680
2,946,263 - - 2,946,263
738,709 - - 738,709
1,032,998 - - 1,032,998
4,717,970 - - 4,717,970
- - - 3,598,457
17,913,583 - - 17,913,583
(49,627,165) 2,413,627 624,520 (26,139,156)
$ (31,713,582) $ 2,413,627 $ 624,520 $ (4,627,116)
145
Recreation
District
Central Central
Services Services
OPERATING REVENUES:

From other agencies $ 97,617 $ -
Charges for services 3,912,569 34,050
Other revenue 3,346 -
TOTAL OPERATING REVENUES 4,013,532 34,050

OPERATING EXPENSES:

Personnel services 1,330,296 -
Contractual services 409,787 8,549
Supplies and other services 995,698 -
Claim payments and changes in estimates - -
Depreciation 805,918 25,753
TOTAL OPERATING EXPENSES 3,541,699 34,302

OPERATING INCOME (LOSS) 471,833 (252)

NON-OPERATING REVENUES (EXPENSES):

Interest income - -
Gain (loss) on disposal of equipment 1,655 (313)
TOTAL NON-OPERATING REVENUES (EXPENSES) 1,655 (313)

INCOME (LOSS) BEFORE TRANSFERS 473,488 (565)

TRANSFERS:

Transfers in 38,856 99,148
TOTAL TRANSFERS 38,856 99,148
CHANGE IN NET POSITION 512,344 98,583
NET POSITION - BEGINNING OF YEAR 22,557,065 880,327
NET POSITION - END OF YEAR $ 23,069,409 $ 978,910

CITY OF CYPRESS

COMBINING STATEMENT OF REVENUES, EXPENSES

AND CHANGES IN NET POSITION

INTERNAL SERVICE FUNDS
For the fiscal year ended June 30, 2021
146
Employees' Liability Workers'
Benefit Insurance Compensation
$ - $ - $ $ 97,617 -
12,600,668 556,000 661,362 17,764,649
- 213,625 15,436 232,407
12,600,668 769,625 676,798 18,094,673
- - 22,268 1,352,564
12,370,448 - 90,035 12,878,819
4,321,886 359,180 169,201 5,845,965
- 587,693 890,728 1,478,421
- - - 831,671
16,692,334 946,873 1,172,232 22,387,440
(4,091,666) (177,248) (495,434) (4,292,767)
2,362,039 - 2,362,039 -
- - - 1,342
2,362,039 - 2,363,381 -
(1,729,627) (177,248) (495,434) (1,929,386)
307,603 - - 445,607
307,603 - - 445,607
(1,422,024) (177,248) (495,434) (1,483,779)
(30,291,558) 2,590,875 1,119,954 (3,143,337)
$ (31,713,582) $ 2,413,627 $ 624,520 $ (4,627,116)
Total
147
Recreation
District
Central Central
Services Services
CASH FLOWS FROM OPERATING ACTIVITIES:

Cash received from users $ 3,969,873 $ 34,050
Cash payments to suppliers for goods and services (1,441,011) (39,785) Cash payments to employees (1,308,885) -

NET CASH PROVIDED BY
OPERATING ACTIVITIES 1,219,977 (5,735)
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:

Transfers in 38,856 99,148

NET CASH PROVIDED BY NONCAPITAL
FINANCING ACTIVITIES 38,856 99,148
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:

Proceeds from disposal of capital assets 7,853 -
Acquisition of capital assets (269,124) (33,824)

NET CASH (USED) BY CAPITAL AND
RELATED FINANCING ACTIVITIES (261,271) (33,824)
CASH FLOWS FROM INVESTING ACTIVITIES:

Interest on investments - -

NET CASH PROVIDED BY INVESTING ACTIVITIES - -

INCREASE IN CASH AND
CASH EQUIVALENTS 997,562 59,589
CASH AND INVESTMENTS - BEGINNING OF YEAR 18,773,156 725,998 CASH AND INVESTMENTS - END OF YEAR $ 19,770,718 $ 785,587

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

Operating income (loss) $ 471,833 $ (252)
Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities:

Depreciation 805,918 25,753
Changes in assets and liabilities:

Accounts receivable decreased (increased) (96,427) (4,256) Prepaid items decreased (increased) 30,610 -
Inventory decreased (increased) 10,061 -
(Gain)/loss on disposal of capital assets (1,655) 312
Deferred outflows decreased (increased) - -
Accounts payable and other accrued liabilities increased (decreased) (363) 68,153 Capital asset addition in accounts payable increased (decreased) - (95,445) Insurance claims payable increased (decreased) - -
Accrued retirees' health payable increased (decreased) - - Accrued leave payable increased (decreased) - -
Accrued pension liability increased (decreased) - -
Deferred inflows increased (decreased) - -
TOTAL ADJUSTMENTS 748,144 (5,483)
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES $ 1,219,977 $ (5,735)

CITY OF CYPRESS

COMBINING STATEMENT OF CASH FLOWS

INTERNAL SERVICE FUNDS
For the fiscal year ended June 30, 2021
148
Employees' Liability Workers'
Benefit Insurance Compensation
$ 12,779,532 $ 769,625 $ 706,058 $ 18,259,138
(12,212,232) (751,366) (458,587) (14,902,981)
- - (10,672) (1,319,557)
567,300 18,259 236,799 2,036,600
307,603 - - 445,607
307,603 - - 445,607
- - - 7,853
- - - (302,948)
- - - (295,095)
2,362,039 - - 2,362,039
2,362,039 - - 2,362,039
3,236,942 18,259 236,799 4,549,151
20,887,540 3,004,365 2,098,113 45,489,172
$ 24,124,482 $ 3,022,624 $ 2,334,912 $ 50,038,323
$ (4,091,666) $ (177,248) $ (495,434) $ (4,292,767)
- - - 831,671
32,276 - 29,260 (39,147)
146,588 - - 177,198
- - - 10,061
- - - (1,343)
350,308 - - 350,308
433,182 (75,527) 11,596 437,041
- - - (95,445)
- 271,034 691,377 962,411
(10,354) - - (10,354)
234,850 - - 234,850
4,290,939 - - 4,290,939
(818,823) - - (818,823)
4,658,966 195,507 732,233 6,329,367
$ 567,300 $ 18,259 $ 236,799 $ 2,036,600
Total
149

CITY OF CYPRESS
Fiduciary Funds
June 30, 2021
The Fiduciary Funds are used to report assets held in a trustee or custodial capacity for others and therefore cannot be used to support the City’s own programs.

Custodial Funds – To account for assets that are held in a custodial relationship. The City’s custodial funds include cash held with fiscal agents for non-city debt obligations, and amounts held on behalf of the West Cities Communication Center Joint Powers Authority.
150

ASSETS
Cash and cash equivalents $ 204,708 $ 3,085,656 $ 3,290,364 Restricted cash and investments 160,103 1,668 161,771
Interest receivable 135 2,157 2,292
Accounts receivable - 40,800 40,800
Prepaid items - 108,661 108,661

TOTAL ASSETS 364,946 3,238,942 3,603,888

LIABILITIES
Current liabilities
Accounts payable and other accrued liabilities - 152,406 152,406 Unearned revenue - 35,719 35,719
Bonds payable 165,000 - 165,000
Accrued leave payable - 68,645 68,645
Noncurrent liabilities
Bonds payable 170,000 - 170,000
Accrued leave payable - 205,934 205,934
Retirees' health payable - 696,197 696,197
Due to other governments - 1,236,973 1,236,973
TOTAL LIABILITIES 335,000 2,395,874 2,730,874

NET POSITION HELD IN TRUST
Restricted for:

Assessment district improvements 29,946 - 29,946
Member agencies - 843,068 843,068

TOTAL NET POSITION HELD IN TRUST $ 29,946 $ 843,068 $ 873,014 Center Joint
Powers Authority
Total
District Funds
Assessment Custodial
Professional Police
Center Communications

CITY OF CYPRESS

COMBINING STATEMENT OF FIDUCIARY NET POSITION

CUSTODIAL FUNDS
June 30, 2021
Business and West Cities
151
Total
Custodial
Funds
ADDITIONS:

Member contributions $ 63,933 $ 2,848,341 $ 2,912,274
Investment income 989 17,800 18,789
Other revenue - 142,776 142,776
TOTAL ADDITIONS 64,922 3,008,917 3,073,839
DEDUCTIONS:

Dispatch services 2,795,858 - 2,795,858
Debt service 23,512 - 23,512
Other expenses 5,672 - 5,672
TOTAL DEDUCTIONS 29,184 2,795,858 2,825,042
CHANGE IN NET POSITION 35,738 213,059 248,797

NET POSITION - BEGINNING OF YEAR,

AS ORIGINALLY REPORTED - - -
Restatement (Note 23) (5,792) 630,009 624,217

NET POSITION - BEGINNING OF YEAR,
AS RESTATED (5,792) 630,009 624,217
NET POSITION - END OF YEAR $ 29,946 $ 843,068 $ 873,014

CITY OF CYPRESS

COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET POSITION

CUSTODIAL FUNDS
For the fiscal year ended June 30, 2021
Business and
Professional
Center
Assessment
District
West Cities
Police
Communications
Center Joint
Powers Authority
152
Statistical Section
153

CITY OF CYPRESS
Statistical Section
Year ended June 30, 2021
Table of Contents
This part of the City of Cypress’ comprehensive annual report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City’s overall financial health.

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

Schedule 1 - Net Position by Component 155
Schedule 2 - Changes in Net Position 157
Schedule 3 - Fund Balances – Governmental Funds 159
Schedule 4 - Changes in Fund Balances – Governmental Funds 161 Revenue Capacity
These schedules contain information to help the reader assess the City’s property tax.

Schedule 5 - Assessed Value and Estimated Actual Value of Taxable Property 163 Schedule 6 - Direct and Overlapping Property Tax Rates 164 Schedule 7 - Principal Property Tax Payers 165
Schedule 8 - Property Tax Levies and Collections 166
Debt Capacity
These schedules present information to help the reader assess the affordability of the City’s current levels of outstanding debt and the City’s ability to issue additional debt in the future.

Schedule 9 - Ratios of Outstanding Debt by Types 167
Schedule 10 - Direct and Overlapping Governmental Activities Debt 168 Schedule 11 - Legal Debt Margin Information 169
Demographic and Economic Information
These schedules offer demographic and economic indicators to help the reader understand the environment within which the City’s financial activities take place.

Schedule 12 - Demographic and Economic Statistics 171
Schedule 13 - Principal Employers 172
Operating Information
These schedules contain services and infrastructure data to help the reader understand how the information in the City’s financial report relates to the services the City provides and the activities it performs.

Schedule 14 - Full-time Equivalent City Government Employees by Function/Program 173 Schedule 15 - Operating Indicators by Function/Program 174 Schedule 16 - Capital Assets Statistics by Function/Program 175 Sources: Unless otherwise noted, the information in these schedules was derived from the City’s comprehensive annual financial reports for the relevant year.

Note: The City of Cypress did not have General Bonded Debt Outstanding or Pledged Revenue during the Fiscal Year Ended June 30, 2021.
154
2021 2020 2019 2018

GOVERNMENTAL ACTIVITIES
Net invested in capital assets $ 166,272,625 $ 160,408,903 $ 162,147,445 $ 162,818,741 Restricted for:

Debt service - - - 522,200
Capital projects - - - -
Specific projects and programs 37,532,553 43,597,947 39,458,651 36,012,698 Total restricted 37,532,553 43,597,947 39,458,651 36,534,898 Unrestricted 88,119,499 85,931,038 82,530,908 75,803,724 Total governmental activities net position $ 291,924,677 $ 289,937,888 $ 284,137,004 $ 275,157,363

BUSINESS-TYPE ACTIVITIES
Net invested in capital assets $ 19,322,767 $ 19,672,894 $ 19,764,241 $ 20,004,444 Restricted for:

Specific projects and programs 5,253,793 3,871,515 2,820,977 1,463,331 Total business-type activities net position $ 24,576,560 $ 23,544,409 $ 22,585,218 $ 21,467,775

TOTAL GOVERNMENTAL AND BUSINESS-TYPE ACTIVITIES
Net invested in capital assets $ 185,595,392 $ 180,081,797 $ 181,911,686 $ 182,823,185 Restricted for:

Debt service - - - 522,200
Capital projects - - - -
Specific projects and programs 42,786,346 47,469,462 42,279,628 37,476,029 Total restricted 42,786,346 47,469,462 42,279,628 37,998,229 Unrestricted 88,119,499 85,931,038 82,530,908 75,803,724 Total governmental and business-type activities net position $ 316,501,237 $ 313,482,297 $ 306,722,222 $ 296,625,138 Notes: 1) Restricted net position amounts related to land held for resale in Governmental Activities have been reclassified to unrestricted net position as of June 30, 2013 to more properly reflect how the proceeds may be used by the City.

CITY OF CYPRESS
Fiscal Year
Schedule 1

LAST TEN FISCAL YEARS

NET POSITION BY COMPONENT
155
2017 2016 2015 2014 2013 2012
$ 161,714,951 $ 153,270,346 $ 154,805,926 $ 154,957,177 $ 154,793,254 $ 157,517,879 979,010 420,185 400,000 380,000 360,000 340,000
- - - - - 24,637,468
25,872,294 26,169,565 24,651,239 24,407,720 23,839,841 23,039,847 26,851,304 26,589,750 25,051,239 24,787,720 24,199,841 48,017,315 89,651,389 107,623,380 101,970,622 111,781,610 110,120,627 81,849,469 $ 278,217,644 $ 287,483,476 $ 281,827,787 $ 291,526,507 $ 289,113,722 $ 287,384,663 $ 19,788,397 $ 18,245,712 $ 15,801,861 $ 14,516,549 $ 13,330,876 $ 11,598,019 524,701 930,903 2,281,112 2,174,616 1,864,593 2,066,778 $ 20,313,098 $ 19,176,615 $ 18,082,973 $ 16,691,165 $ 15,195,469 $ 13,664,797 $ 181,503,348 $ 171,516,058 $ 170,607,787 $ 169,473,726 $ 168,124,130 $ 169,115,898 979,010 420,185 400,000 380,000 360,000 340,000
- - - - - 24,637,468
26,396,995 27,100,468 26,932,351 26,582,336 25,704,434 25,106,625 27,376,005 27,520,653 27,332,351 26,962,336 26,064,434 50,084,093 89,651,389 107,623,380 101,970,622 111,781,610 110,120,627 81,849,469 $ 298,530,742 $ 306,660,091 $ 299,910,760 $ 308,217,672 $ 304,309,191 $ 301,049,460 156
2021 2020 2019 2018
EXPENSES - GOVERNMENTAL ACTIVITIES:

General government $ 6,295,641 $ 6,082,701 $ 4,683,324 $ 4,634,173 Community development 2,100,332 1,915,912 2,200,508 2,545,902 Public safety 19,428,392 19,357,512 17,423,654 17,185,826 Public works 13,865,043 11,597,788 10,800,313 13,608,594 Recreation 5,303,581 5,003,445 5,042,590 5,296,640
Interest on long-term debt - - 1,300 25,145
Total government activities expenses 46,992,989 43,957,358 40,151,689 43,296,280 PROGRAM REVENUES - GOVERNMENTAL ACTIVITIES:

Charges for services:

General government 498,954 154,716 388,378 477,787
Community development 1,557,209 899,680 1,156,997 1,125,447 Public safety 406,077 268,225 324,497 221,319
Public works 770,403 741,487 740,542 723,444
Recreation 487,138 573,479 1,727,459 1,509,692
Operating grants and contributions 3,862,387 5,998,794 3,728,589 3,625,304 Capital grants and contributions 1,869,583 1,488,480 1,299,265 1,029,329 Total governmental activities program revenues 9,451,751 10,124,861 9,365,727 8,712,322 NET (EXPENSE/REVENUE) - GOVERNMENTAL ACTIVITIES (37,541,238) (33,832,497) (30,785,962) (34,583,958) GENERAL REVENUES AND OTHER CHANGES IN NET POSITION - GOVERNMENTAL ACTIVITIES:

Taxes
Property taxes, levied for general purpose 6,261,310 6,273,159 5,703,464 5,373,717 Property taxes, levied for recreation purposes 5,958,450 5,958,511 5,435,431 5,133,137 Property taxes, levied for lighting purposes 1,363,781 1,358,550 1,240,367 1,173,368 Property taxes, backfill of vehicle license fees 5,136,804 4,942,234 4,708,074 4,429,211 Tax increment for redevelopment activities - - - -
Sales tax 11,249,720 11,969,246 12,616,015 11,141,720
Transient occupancy tax 1,648,030 2,185,978 2,761,917 2,836,842 Franchise tax 1,753,459 1,727,101 1,686,218 1,660,665
Other taxes 1,820,366 1,742,289 1,750,241 1,728,281
Total taxes 35,191,920 36,157,068 35,901,727 33,476,941 Investment earnings 2,245,090 3,423,255 3,806,673 1,281,234 Contributed capital - - - 1,460,026
Miscellaneous 37,845 53,058 57,203 55,078
Total governmental activities 37,474,855 39,633,381 39,765,603 36,273,279 SPECIAL ITEMS:

Market value adjustment - land held for resale - - - -
Gain on sale of land held for resale 2,053,172 - - -
Total special items 2,053,172 - - -
EXTRAORDINARY ITEMS:

Gain (Loss) on Dissolution of Redevelopment Agency - - - - Gain on approval of repayment agreement - - - -
Loss on dissolution of interfund advance - - - -
Loss on disallowance of interest on advance to former
Redevelopment Agency - - - -
Loss on re-entered loan settlement agreement - - - -
Total extraordinary items - - - -
CHANGE IN NET POSITION - GOVERNMENTAL ACTIVITIES $ 1,986,789 $ 5,800,884 $ 8,979,641 $ 1,689,321 EXPENSES - BUSINESS-TYPE ACTIVITIES:

Sewer $ 888,283 $ 871,750 $ 897,761 $ 795,737
Total business-type activities expenses 888,283 871,750 897,761 795,737 PROGRAM REVENUES - BUSINESS-TYPE ACTIVITIES:

Charges for services 1,861,974 1,733,202 1,721,787 1,829,427 Operating grants and contributions 37 39 98,050 43
Capital grants and contributions - - - -
Total business-type activities program revenues 1,862,011 1,733,241 1,819,837 1,829,470 NET (EXPENSE/REVENUE) - BUSINESS-TYPE ACTIVITIES 973,728 861,491 922,076 1,033,733 GENERAL REVENUES AND OTHER CHANGES IN NET POSITION - BUSINESS TYPE ACTIVITIES:

Taxes
Property taxes, levied for sewer purposes 30,499 30,076 29,978 30,885 Total taxes 30,499 30,076 29,978 30,885
Investment earnings 25,145 66,013 162,156 84,346
Miscellaneous 2,779 1,611 3,233 5,713
Total business-type activities 58,423 97,700 195,367 120,944 CHANGE IN NET POSITION - BUSINESS-TYPE ACTIVITIES $ 1,032,151 $ 959,191 $ 1,117,443 $ 1,154,677 CHANGE IN NET POSITION - TOTAL PRIMARY GOVERNMENT $ 3,018,940 $ 6,760,075 $ 10,097,084 $ 2,843,998

CITY OF CYPRESS
Fiscal Year
Schedule 2

LAST TEN FISCAL YEARS

CHANGES IN NET POSITION
157
2017 2016 2015 2014 2013 2012
$ 4,688,064 $ 4,186,025 $ 3,762,129 $ 4,037,449 $ 3,844,511 $ 3,857,195 2,092,444 2,045,322 1,792,626 1,717,272 1,658,699 3,320,115 15,793,707 14,193,759 13,823,314 14,119,456 14,079,824 13,587,310 11,949,123 11,467,198 11,818,556 11,971,891 11,554,300 13,566,497 5,077,877 4,659,025 4,675,847 4,857,577 4,664,614 4,682,406 48,597 70,731 89,610 107,166 123,439 835,794
39,649,812 36,622,060 35,962,082 36,810,811 35,925,387 39,849,317 517,051 247,368 155,590 98,802 46,683 80,389
957,395 1,038,354 767,379 663,525 604,456 505,215
217,567 190,861 229,721 223,771 284,904 279,847
773,597 820,048 854,062 832,916 836,641 851,917
1,489,518 1,499,750 1,160,898 1,389,596 1,303,395 1,323,717 4,550,919 4,474,668 3,549,872 3,648,027 3,822,397 3,691,857 1,462,551 693,977 856,247 1,315,906 1,071,101 2,500,542 9,968,598 8,965,026 7,573,769 8,172,543 7,969,577 9,233,484 (29,681,214) (27,657,034) (28,388,313) (28,638,268) (27,955,810) (30,615,833) 4,838,954 4,634,994 4,735,392 4,589,439 4,847,103 4,344,609 4,598,132 4,420,347 4,450,954 4,224,593 4,778,959 4,066,201 1,055,329 1,015,521 1,013,028 962,631 1,086,568 919,917 4,241,925 4,061,360 3,835,515 3,678,802 3,560,389 3,493,682 - - - - - 2,291,317
11,346,462 12,435,166 11,891,754 11,846,002 10,827,664 11,361,495 2,711,306 2,558,974 2,209,939 1,980,228 1,926,322 2,098,309 1,607,621 1,728,236 1,724,232 1,650,481 1,629,706 1,616,534 1,745,849 1,647,782 1,678,288 1,617,097 1,656,695 1,642,429 32,145,578 32,502,380 31,539,102 30,549,273 30,313,406 31,834,493 694,455 748,457 344,668 439,186 218,964 300,116
- - - - - -
69,209 61,886 65,861 62,594 348,499 32,293
32,909,242 33,312,723 31,949,631 31,051,053 30,880,869 32,166,902 - - (6,308,460) - - -
- - - - - -
- - (6,308,460) - - -
- - - - - 19,125,525
- - 25,323,775 - - -
- - - - - (23,920,000)
- - - - (1,196,000) -
(12,493,860) - - - - -
(12,493,860) - 25,323,775 - (1,196,000) (4,794,475)
$ (9,265,832) $ 5,655,689 $ 22,576,633 $ 2,412,785 $ 1,729,059 $ (3,243,406) $ 706,843 $ 757,503 $ 724,257 $ 740,444 $ 704,109 $ 675,977 706,843 757,503 724,257 740,444 704,109 675,977
1,768,183 1,714,658 2,025,759 2,197,154 2,131,506 1,869,452 46 66,716 46,387 55 55 58
- - - 4,990 3,055 6,727
1,768,229 1,781,374 2,072,146 2,202,199 2,134,616 1,876,237 1,061,386 1,023,871 1,347,889 1,461,755 1,430,507 1,200,260 24,060 27,651 14,232 10,879 73,185 10,866
24,060 27,651 14,232 10,879 73,185 10,866
48,316 34,865 26,886 23,062 26,980 30,498
2,721 7,255 2,801
75,097 69,771 43,919 33,941 100,165 41,364
$ 1,136,483 $ 1,093,642 $ 1,391,808 $ 1,495,696 $ 1,530,672 $ 1,241,624 $ (8,129,349) $ 6,749,331 $ 23,968,441 $ 3,908,481 $ 3,259,731 $ (2,001,782) 158
2021 2020 2019 2018

GENERAL FUND
Nonspendable $ 400,475 $ 4,106 $ 8,105 $ 54,299
Restricted 28,944 140,521 51,035 73,252
Committed 8,277,669 7,752,199 7,399,045 7,152,556
Assigned 15,425,574 14,086,964 13,827,127 8,018,278
Unassigned 1,060,000 1,060,000 1,060,000 860,000
Total General Fund $ 25,192,662 $ 23,043,790 $ 22,345,312 $ 16,158,385

ALL OTHER GOVERNMENTAL FUNDS
Nonspendable $ 5,915,695 $ 3,242 $ 28,946 $ 26,013
Restricted 19,174,097 27,679,541 27,277,048 26,328,454
Committed 12,824,144 11,600,900 9,332,740 10,568,404
Assigned 70,479,670 74,307,742 70,811,712 67,828,083
Unassigned (226,304) (290,643) - -
Total all other Governmental Funds $ 108,167,302 $ 113,300,782 $ 107,450,446 $ 104,750,954 Notes: 1) Nonspendable fund balance amounts related to land held for resale in All Other Governmental Funds have been reclassified to assigned fund balance as of June 30, 2013 to more properly reflect how the proceeds may be used by the City.

Fiscal Year

CITY OF CYPRESS

FUND BALANCES - GOVERNMENTAL FUNDS

LAST TEN FISCAL YEARS
Schedule 3
159
2017 2016 2015 2014 2013 2012
$ 57,474 $ 8,759 $ 6,411 $ 9,387 $ 14,359 $ -
73,252 73,252 73,252 73,252 73,252 73,252
6,982,083 6,885,909 6,520,344 6,299,394 6,075,680 6,548,929 11,199,276 11,766,464 13,078,088 11,116,273 8,011,729 23,946,209 921,728 289,297 170,783 121,919 115,976 141,412
$ 19,233,813 $ 19,023,681 $ 19,848,878 $ 17,620,225 $ 14,290,996 $ 30,709,802 $ 71,608 $ 59,660 $ 56,300 $ 11,233 $ 10,602 $ 26,059,176 26,466,768 27,039,278 25,513,795 24,960,766 24,331,702 21,157,903 9,174,885 17,680,891 9,437,504 11,908,872 14,378,531 9,600,496 62,830,965 71,429,444 76,745,521 55,006,639 54,988,809 15,190,884 - - - - - -
$ 98,544,226 $ 116,209,273 $ 111,753,120 $ 91,887,510 $ 93,709,644 $ 72,008,459 160
2021 2020 2019 2018
REVENUES:

Taxes
Property tax $ 18,720,344 $ 18,532,454 $ 17,087,338 $ 16,109,436 Sales tax 11,579,445 12,252,711 12,332,551 11,141,720
Transient occupancy tax 1,648,030 2,185,978 2,761,917 2,836,842 Franchise tax 1,829,542 1,806,177 1,766,326 1,740,802
Other taxes 2,167,293 2,063,126 2,095,035 2,052,850
Licenses and permits 884,938 628,630 806,907 675,894
Fines and forfeitures 345,986 277,716 390,365 275,909
From use of property 88,710 3,511,171 3,890,564 1,660,035 From other agencies 4,103,799 5,300,369 3,878,871 3,856,558 Charges for services 4,051,764 3,293,571 4,317,800 4,700,201 Other revenues 811,084 652,143 673,986 701,596
Total Revenues 46,230,935 50,504,046 50,001,660 45,751,843 EXPENDITURES:

General government 5,485,769 5,206,978 4,131,110 4,037,765 Community development 1,892,213 1,714,979 2,056,311 2,351,459 Public safety 17,401,215 17,225,985 16,174,228 15,762,018 Public works 10,056,426 7,732,879 7,394,724 10,081,750
Recreation 4,181,884 3,951,650 4,158,366 4,498,225
Capital outlay 11,805,601 4,495,945 4,251,602 2,275,198 Debt service
Principal retired - - 475,000 445,000
Interest and charges - - 13,175 36,826
Total expenditures 50,823,108 40,328,416 38,654,516 39,488,241 Excess of revenues over (under) expenditures (4,592,173) 10,175,630 11,347,144 6,263,602 OTHER FINANCING SOURCES (USES):

Transfers in 7,692,812 8,335,896 6,468,442 9,020,684
Transfers out (8,138,419) (11,962,712) (8,929,167) (12,152,986) Total other financing sources (uses) (445,607) (3,626,816) (2,460,725) (3,132,302) Net change in fund balances before extraordinary items (5,037,780) 6,548,814 8,886,419 3,131,300 SPECIAL ITEMS:

Market value adjustment - land held for resale - - - -
Gain on sale of land held for resale 2,053,172 - - -
Total special items 2,053,172 - - -
EXTRAORDINARY ITEMS:

Gain (loss) on dissolution of Redevelopment Agency - - - - Gain on approval of repayment agreement - - - -
Loss on disallowance of interfund advance - - - -
Loss on disallowance of interest on advance
to former Redevelopment Agency - - - -
Loss on re-entered loan settlement agreement - - - -
Total extraordinary items - - - -
Net change in fund balances $ (2,984,608) $ 6,548,814 $ 8,886,419 $ 3,131,300 Debt service as a percentage of noncapital expenditures 0.0% 0.0% 1.4% 1.3% Schedule 4
Fiscal Year

CITY OF CYPRESS

CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS

LAST TEN FISCAL YEARS
161
2017 2016 2015 2014 2013 2012
$ 14,734,339 $ 14,132,221 $ 14,034,888 $ 13,455,467 $ 15,485,431 $ 15,115,726 11,451,407 12,540,112 11,681,865 11,846,003 10,827,665 11,361,494 2,711,306 2,558,974 2,209,939 1,980,228 1,926,322 2,098,309 1,665,820 1,774,268 1,770,259 1,693,524 1,671,897 1,653,857 2,061,297 1,957,223 1,986,873 1,909,589 1,899,759 1,864,700 700,437 700,510 455,781 381,992 380,256 293,642
289,271 239,845 254,997 270,593 336,389 316,412
1,027,004 1,044,996 594,030 659,310 478,573 507,151
3,113,673 3,021,416 3,178,481 3,886,307 3,438,718 4,741,322 4,397,340 4,376,424 3,963,964 4,244,710 4,125,461 4,045,603 1,585,339 1,401,191 788,618 695,557 1,226,084 1,067,188 43,737,233 43,747,180 40,919,695 41,023,280 41,796,555 43,065,404 4,380,176 4,147,614 3,555,118 3,802,168 3,570,736 3,515,586 2,070,995 2,160,255 1,772,835 1,776,411 1,646,044 2,947,396 15,508,454 14,861,961 13,905,373 14,073,067 13,868,047 13,099,957 9,541,509 9,630,040 9,625,309 9,789,620 9,183,658 11,010,797 4,612,076 4,450,788 4,305,974 4,452,120 4,206,914 4,112,982 11,813,186 2,295,678 4,386,607 5,079,667 2,328,613 5,851,169 420,000 400,000 380,000 360,000 340,000 325,000
59,622 80,131 98,350 115,266 130,749 842,457
48,406,018 38,026,467 38,029,566 39,448,319 35,274,761 41,705,344 (4,668,785) 5,720,713 2,890,129 1,574,961 6,521,794 1,360,060 8,189,632 7,466,801 7,991,193 5,725,391 25,579,555 13,613,644 (8,481,902) (9,556,558) (8,098,884) (5,793,257) (25,622,970) (13,771,829) (292,270) (2,089,757) (107,691) (67,866) (43,415) (158,185) (4,961,055) 3,630,956 2,782,438 1,507,095 6,478,379 1,201,875 - - (6,308,460) - - -
- - - - - -
- - - - - -
- - - - - 19,125,525
- - 25,323,775 - - -
- - - - - (23,920,000)
- - - - (1,196,000) -
(12,493,860) - - - - -
(12,493,860) - 25,323,775 - (1,196,000) (4,794,475)
$ (17,454,915) $ 3,630,956 $ 28,106,213 $ 1,507,095 $ 5,282,379 $ 1,201,875

1.3% 1.3% 1.4% 1.4% 1.4% 3.3%
162
Fiscal Year Total Taxable Total
Ended Public Unsecured Assessed Direct Tax
June 30, Secured * Utility * Valuation * Value * Rate
2021 $ 7,872,105 $ 2,268 $ 300,844 $ 8,175,217 1.0000
2020 $ 7,516,002 $ 2,268 $ 347,290 $ 7,865,560 1.0000
2019 $ 7,181,037 $ 2,268 $ 309,590 $ 7,492,895 1.0000
2018 $ 6,755,533 $ 595 $ 292,957 $ 7,049,085 1.0000
2017 $ 6,452,310 $ 792 $ 297,917 $ 6,751,019 1.0000
2016 $ 6,180,488 $ 792 $ 282,370 $ 6,463,650 1.0000
2015 $ 5,831,344 $ 1,371 $ 271,503 $ 6,104,218 1.0000
2014 $ 5,581,655 $ 1,371 $ 271,782 $ 5,854,808 1.0000
2013 $ 5,389,098 $ 1,371 $ 275,885 $ 5,666,354 1.0000
2012 $ 5,314,822 $ 1,371 $ 243,997 $ 5,560,190 1.0000
Source: Orange County Assessor's Office
Note: In 1978, the voters of the State of California passed Proposition 13 which limited property taxes to a total maximum rate of 1% based on the assessed value of the property being taxes. Each year, the assessed value of propety may be increased by an inflation factor (up to 2%). However, property is re-assessed to its current value when a change of ownership occurs. Other factors that may cause re-assessment include new construction, tenant improvements and appeals of value by the owner.

The assessed value data shown above represents the only data currently available with respect to the actual market value of taxable property and are subject to the limitations described above. * Amount in Thousands

CITY OF CYPRESS

ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY Schedule 5

LAST TEN FISCAL YEARS
163
Fiscal Year General
Ended Basic Obligation Total School Water
June 30, Rate Debt Service Direct Districts District
2021 1.0000 - 1.0000 0.1049 0.0035
2020 1.0000 - 1.0000 0.0933 0.0035
2019 1.0000 - 1.0000 0.1002 0.0035
2018 1.0000 - 1.0000 0.0822 0.0035
2017 1.0000 - 1.0000 0.0950 0.0035
2016 1.0000 - 1.0000 0.1045 0.0035
2015 1.0000 - 1.0000 0.0642 0.0035
2014 1.0000 - 1.0000 0.0700 0.0035
2013 1.0000 - 1.0000 0.0731 0.0035
2012 1.0000 - 1.0000 0.0593 0.0037
Source: Orange County Assessor's Office
Note: The City's basic property tax rate may only be increased by a majority vote of the City's residents. Rates for debt service are set based on each year's requirements. * Overlapping rates are those of local and county governments that apply to property owners within the City of Cypress. Not all overlapping rates apply to all Cypress property owners.

City Direct Rates Overlapping Rates *

CITY OF CYPRESS

DIRECT AND OVERLAPPING PROPERTY TAX RATES
Schedule 6

LAST TEN FISCAL YEARS
164
Percentage Percentage
of Total City of Total City
Taxable Taxable Taxable Taxable
Assessed Assessed Assessed Assessed
Taxpayer Value Rank Value Value Rank Value
Warland Investments $ 246,293,752 1 3.01% 200,236,654 1 3.64% Cypress Corporate Center 81,801,889 2 1.00% 69,149,119 3 1.26% G & IX Cypress Campus LP 77,892,667 3 0.95% -- --
Katella Holder Street LLC 65916192 4 0.81% -- --
GPD Cypress Investors LLC 57500000 5 0.70% -- --
Los Alamitos Racecourse 52,145,073 6 0.64% 37,138,528 5 0.68% Inland American Cypress Katella 51,012,197 7 0.62% 34,365,532 6 0.63% Yamaha Motor Corp USA Inc 38,251,688 8 0.47% 34,273,108 7 0.62% IHP Los Alamitos Owner LLC 34,804,072 9 0.43% -- --
Cadigan Peppertree LLC 34,180,894 10 0.42% -- --
Mitsubishi Motor Sales -- -- 79,073,214 2 1.44%
RREEF America REIT -- -- 59,477,858 4 1.08%
CRP-2 Holdings Cypress -- -- 34,174,833 8 0.62%
Costco Wholesale Group -- -- 25,172,370 9 0.46%
USA Build LLC -- -- 25,140,000 10 0.46%
Total $ 739,798,424 9.05% $ 598,201,216 10.89%
Source: California Municipal Statistics, Inc. and Orange County Assessor's Office

CITY OF CYPRESS

PRINCIPAL PROPERTY TAX PAYERS
Schedule 7
2021 2012

CURRENT YEAR AND NINE YEARS AGO
165
Fiscal Year Taxes Levied Delinquent
Ended for the Percentage Tax Percentage
June 30, Fiscal Year Amount of Levy Collections Amount of Levy 2021 $ 22,876,805 $ 22,743,440 99.42% 174,530 $ $ 22,917,970 100.18% 2020 $ 21,444,968 $ 21,202,595 98.87% 90,515 $ $ 21,293,110 99.29% 2019 $ 20,072,714 $ 19,889,386 99.09% 137,711 $ $ 20,027,097 99.77% 2018 $ 18,670,282 $ 18,516,004 99.17% 89,692 $ $ 18,605,696 99.65% 2017 $ 17,883,255 $ 17,742,578 99.21% 100,982 $ $ 17,843,560 99.78% 2016 $ 17,146,468 $ 16,994,275 99.11% 144,980 $ $ 17,139,255 99.96% 2015 $ 16,102,137 $ 15,896,810 98.72% 159,324 $ $ 16,056,134 99.71% 2014 $ 15,425,028 $ 15,239,350 98.80% 299,068 $ $ 15,538,418 100.74% 2013 $ 14,687,798 $ 14,475,122 98.55% 202,617 $ $ 14,677,739 99.93% 2012 $ 14,424,137 $ 14,107,672 97.81% 245,320 $ $ 14,352,992 99.51% Source: County of Orange Auditor-Controller
Notes: Includes General, Special Revenue and Debt Service Funds.

These amounts consist of "prior year" taxes (excluding penalties and interest) remitted in the subsequent fiscal year from Fiscal Year 2004-05 forward; the Orange County Auditor Controller's Office aggregates these payments and does not provide detail on allocations to particular years. Penalties and interest were not recorded separately prior to Fiscal Year 2004-05.

CITY OF CYPRESS

PROPERTY TAX LEVIES AND COLLECTIONS
Fiscal Year of the Levy
Collected within the
Total Collections to Date
Schedule 8

LAST TEN FISCAL YEARS
166
Fiscal Year Lease Percentage
Ended Revenue of Personal Per
June 30, Bonds Income * Capita **
2021 $ - 0.00% $ -
2020 $ - 0.00% $ -
2019 $ - 0.00% $ -
2018 $ 475,000 0.03% $ 10
2017 $ 920,000 0.06% $ 19
2016 $ 1,340,000 0.08% $ 27
2015 $ 1,740,000 0.11% $ 36
2014 $ 2,120,000 0.14% $ 43
2013 $ 2,480,000 0.16% $ 51
2012 $ 2,820,000 0.18% $ 58
Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statement.
* See Schedule 12 for personal income.
** See Schedule 12 for population data.

Schedule 9

RATIOS OF OUTSTANDING DEBT BY TYPE

CITY OF CYPRESS
Governmental Activities

LAST TEN FISCAL YEARS
167
Estimated Sharing of
Debt Percentage Overlapping
Direct and Overlapping Tax and Assessment Debt: Outstanding Applicable (1) Debt Metropolitan Water District $ 26,830,000 0.250% $ 67,075 North Orange County Joint Community College District 245,604,001 5.611% 13,780,840 Garden Grove Unified School District 463,236,550 3.484% 16,139,161 Los Alamitos USD School Facilities Improvement District No. 1 201,205,227 2.370% 4,768,564 Anaheim Union High School District 266,058,955 13.773% 36,644,300 Centralia School District 39,948,544 2.500% 998,714
Cypress School District 36,643,033 85.297% 31,255,408
Savanna School District 40,732,918 12.970% 5,283,059
City of Cypress 1915 Act Bonds 335,000 100.000% 335,000 Total Direct and Overlapping Tax and Assessment Debt $ 109,272,121 Direct and Overlapping General Fund Debt:

Orange County General Fund Obligations $ 381,885,000 1.247% $ 4,762,106 Orange County Pension Obligations 485,318,204 1.247% 6,051,918 Orange County Board of Education Certificates of Participation 12,310,000 1.247% 153,506 North O.C. Regional Occupational Program Certificates of Part. 8,590,000 5.043% 433,194 Anaheim Union High School District Certificates of Participation 31,605,000 13.773% 4,352,957 Los Alamitos Unified School District Certificates of Participation 36,529,430 2.129% 777,712 Cypress School District Certificates of Participation 4,469,000 85.297% 3,811,923 City of Cypress General Fund Obligations 100.000% - -
Total Gross Direct and Overlapping Tax and Assessment Debt $ 20,343,316 Overlapping Tax Increment Debt (Successor Agency): $ 2,550,000 7.344% 187,272 Total Direct Debt $ -
Total Overlapping Debt $ 129,802,709
Combined Total Debt $ 129,802,709 (2)
Source: California Municipal Statistics, Inc.
(1) The percentage of overlapping debt applicable to the City is estmated using taxable assessed property value. Applicable percentages were estimated by determining the portion of the overlapping District's assessed value that is within the boundaries of the City divided by the District's total taxable assessed value. (2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non-bonded capital lease obligations. Qualified Zone Academy Bonds are included based on principal due at maturity.

CITY OF CYPRESS

DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
Schedule 10
168
2021 2020 2019 2018
LEGAL DEBT MARGIN CALCULATION:

Assessed valuation $ 8,175,217 $ 7,865,560 $ 7,492,895 $ 7,049,085 Conversion percentage 25% 25% 25% 25%
Adjusted assessed valuation $ 2,043,804 $ 1,966,390 $ 1,873,224 $ 1,762,271 Debt limit percentage 15% 15% 15% 15%
Debt limit 306,571 294,959 280,984 264,341
Total Net Debt Applicable to Limit - - - -
Legal debt margin $ 306,571 $ 294,959 $ 280,984 $ 264,341 Total Net Debt Applicable to Limit 0.00% 0.00% 0.00% 0.00% as a percentage of Debt Limit
Note: The Government Code of the State of Califonia provides for a legal debt limit of 15 percent of gross assessed valuation. However, this provision was enacted when assess valuation was based upon 25 percent of market value. Effective with the 1981-82 fiscal year, each parcel is now assessed at 100 percent of market value (as of the most recent change in ownership for that parcel). The computations shown above reflect a conversion of assessed valuation data for each fiscal year from the current full valuation perspective to the 25 percent level that was in effect at the time the legal debt margin was enacted.

Fiscal Year

CITY OF CYPRESS

LEGAL DEBT MARGIN INFORMATION
Schedule 11
(In thousands)
169
2017 2016 2015 2014 2013 2012
$ 6,751,019 $ 6,463,650 $ 6,104,218 $ 5,854,808 $ 5,666,354 $ 5,560,190 25% 25% 25% 25% 25% 25%
$ 1,687,755 $ 1,615,913 $ 1,526,055 $ 1,463,702 $ 1,416,589 $ 1,390,048 15% 15% 15% 15% 15% 15%
253,163 242,387 228,908 219,555 212,488 208,507
- - - - - -
$ 253,163 $ 242,387 $ 228,908 $ 219,555 $ 212,488 $ 208,507

0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
170
Personal Per
Fiscal Year Income Capita
Ended (thousands Personal Median School Unemployment
June 30, Population of dollars) Income Age Enrollment ** Rate 2021 48,531 $ 1,957,777 $ 40,341 * 3,540 41.8 9.5%
2020 49,272 $ 1,841,471 $ 37,374 * 3,813 41.7 15.4%
2019 49,833 $ 1,790,699 $ 35,934 * 3,923 41.7 2.4%
2018 49,978 $ 1,713,796 $ 34,291 * 3,957 41.9 3.4%
2017 49,655 $ 1,645,120 $ 33,131 * 3,969 41.7 2.4%
2016 49,535 $ 1,642,473 $ 33,019 * 3,942 41.1 3.0%
2015 48,874 $ 1,568,904 $ 32,101 * 3,990 40.6 3.8%
2014 48,886 $ 1,553,597 $ 31,780 * 3,916 40.4 5.3%
2013 48,547 $ 1,562,340 $ 32,182 * 3,879 39.9 6.0%
2012 48,273 $ 1,530,013 $ 31,695 * 3,916 39.8 9.2%
Source: MuniServices, LLC/an Avenu Insights & Analytics Company, California Dept of Finance, U.S. Census Bureau, California Department of Education, and Employment Development Department * Amount is estimated based on latest available information. ** Includes Cypress Elementary enrollment only. Cypress residents enrolled in middle and high schools are enrolled through the Anaheim Union High School District and the enrollment breakdown by individual city is not available.

CITY OF CYPRESS

DEMOGRAPHIC AND ECONOMIC STATISTICS
Schedule 12

LAST TEN FISCAL YEARS
171
Percentage Percentage
of Total City of Total City
Employer Employees Rank Employment Employees Rank Employment Amazon 1 1,300 5.35% -- --
UnitedHealth Group 2 1,117 4.60% 2,311 1 8.37%
Siemens Corporation 3 760 3.13% 700 3 2.54%
Cypress School District 4 594 2.44% -- --
Cypress College 5 468 1.93% 824 2 2.99%
Costco - Cypress 6 406 1.67% 261 8 0.95%
Safran Cabin (frmly C&D Zodiac) 350 7 1.44% -- --
Hybrid Apparel 8 312 1.28% -- --
Yamaha Motors Corporation 9 308 1.27% 380 5 1.38%
Christie Digital Systs USA 10 279 1.15% 405 4 1.47%
Mitsubishi Motor Sales -- -- 6 350 1.27%
Vans -- -- 7 300 1.09%
Manhattan Beachwear -- -- 9 228 0.83%
Target - Cypress -- -- 10 160 0.58%
Total 5,894 24.26% 5,919 21.47%
Source: MuniServices, LLC/an Avenu Insights & Analytics Company, City Planning Department and State of California Employment Development Department
2012

CITY OF CYPRESS

PRINCIPAL EMPLOYERS

CURRENT YEAR AND NINE YEARS AGO
Schedule 13
2021
172
2021 2020 2019 2018 2017 2016 2015 2014 2013 2012
General Government
Administrative 5.3 5.3 5.3 5.3 6.0 6.0 6.0 8.9 8.9 9.9
Finance 14.2 14.2 14.2 14.2 15.0 15.0 15.0 13.0 13.0 13.0 Community Development 5.5 5.5 5.5 6.5 7.5 7.5 8.0 8.0 10.0 9.0 Police
Officers 58.0 58.0 57.0 57.0 57.0 57.0 57.0 55.0 55.0 55.0 Civilians 23.8 22.8 22.8 22.8 23.4 24.4 24.4 23.9 23.4 23.4 Public Works
Engineering 9.0 9.0 10.5 8.5 10.1 10.1 10.0 10.0 10.0 11.0 Maintenance 19.5 20.1 20.1 26.4 27.0 27.0 28.6 27.7 30.7 32.7 Parks and Recreation 28.8 29.2 30.0 28.2 28.4 28.4 28.8 28.8 28.8 28.5 Total 164.1 164.1 163.4 170.9 174.4 175.4 177.8 175.3 178.8 183.5 Source: City of Cypress adopted budget.

Schedule 14
Fiscal Years as of June 30
Function/Program

CITY OF CYPRESS

FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES

BY FUNCTION/PROGRAM

LAST TEN FISCAL YEARS
173
2021 2020 2019 2018 2017 2016 2015 2014 2013 2012
Police
Physical arrests 778 1,232 834 1,091 1,130 856 856 1,237 913 1,123 Parking violations 8,675 4,436 6,264 5,287 3,660 4,587 4,818 3,752 5,999 3,738 Traffic violations 2,368 2,353 3,754 4,260 3,290 2,878 1,830 2,626 3,445 2,860 Public Works - Maintenance
Potholes repaired 235 108 59 109 13 53 56 213 72 200
Parks and Recreation
Athletic field permits issued 2,698 4,812 6,783 7,197 8,383 7,975 8,786 10,541 9,175 9,731 Class participants 3,738 13,319 6,370 13,823 10,739 12,110 11,796 13,233 13,308 13,380 Facility rentals 653 10 1,127 895 1,225 1,334 1,255 1,460 1,559 1,255 Source: Various City Departments
Function/Program

CITY OF CYPRESS

OPERATING INDICATORS BY FUNCTION/PROGRAM

LAST TEN FISCAL YEARS
Schedule 15
Fiscal Years as of June 30
174
2021 2020 2019 2018 2017 2016 2015 2014 2013 2012
Police
Stations 1 1 1 1 1 1 1 1 1 1
Patrol units 19 19 19 19 19 19 19 19 19 19
Public Works - Maintenance
Streets (miles) 111 111 111 111 111 111 111 111 111 111 Streetlights 302 302 302 302 303 303 303 303 303 303
Traffic signals 61 61 61 61 60 60 57 57 57 57
Parks and Recreation
Acreage 93 93 93 93 85 82 82 82 82 82
Playgrounds 19 19 19 19 19 18 18 18 18 18
Baseball/softball diamonds 9 9 9 8 8 8 8 8 8 8
Soccer/football fields 2 2 1 1 1 1 1 1 1 1
Pickleball fields 6 - - - - - - - - -
Community centers 1 1 1 1 1 1 1 1 1 1
Senior centers 1 1 1 1 1 1 1 1 1 1
Source: Various City Departments
Function/Program

CITY OF CYPRESS

CAPITAL ASSETS STATISTICS BY FUNCTION/PROGRAM

LAST TEN FISCAL YEARS
Schedule 16
Fiscal Years as of June 30
175
Lance, Soll & Lunghard, LLP 203N.BreaBlvd.,Suite 203 Brea,CA92821 Phone: 714.672.0022 INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL

OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS

BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE

WITH GOVERNMENT AUDITING STANDARDS
To the Honorable Mayor and Members of the City Council
City of Cypress, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Cypress, California (the City), as of and for the year ended June 30, 2021, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated December 20, 2021.

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

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

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

Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
176
To the Honorable Mayor and Members of the City Council
City of Cypress, California
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Brea, California
December 20, 2021
177
CITY OF CYPRESS
CITY COUNCIL REPORT
City Council Regular 10.

FROM: Matt Burton, Director of Finance and Administrative Services DATE: 01/10/2022
SUBJECT: Receive and File the Audit Letter to the City Council for the Fiscal Year Ended June 30, 2021

RECOMMENDATION
Receive and file the Audit Letter from Lance, Soll and Lunghard LLP to the City Council for the Fiscal Year ended June 30, 2021.

SUMMARY
The City's auditors have completed the annual audit and the results of the audit were favorable. In addition to receiving a "clean" audit opinion, the auditors did not encounter any items of concern which need to be reported to the City Council or management.

DISCUSSION
Audit Letter
Auditing standards require auditors to issue an Audit Letter to communicate any significant findings, disagreements with management, and difficulties performing the audit. This Audit Letter must be issued to the City Council even if no problems are identified.

The attached Audit Letter was issued by Lance, Soll and Lunghard LLP (LSL) in conjunction with its audit work performed on the City, including the Cypress Recreation and Park District, for the fiscal year ended June 30, 2021. Accompanying the Audit Letter is the City’s Management Representation Letter which summarizes management’s responsibilities for providing the information necessary to conduct the audit and prepare the financial statements. LSL did not encounter any significant issues or other matters that need to be communicated to the City Council or management.

Audit Report on Internal Control Matters
Auditing standards also provide guidance to the auditors regarding how internal control-related matters should be communicated to management and the City Council.

During the annual audit, the auditors review and observe the City’s internal controls and During the annual audit, the auditors review and observe the City’s internal controls and operations to determine if there are any deficiencies. If any internal control related matters are noted, an Audit Report detailing these noted deficiencies must be provided to the City Council.
.

No deficiencies in the internal control structure, or any other matters deemed to be reportable to the governing board and management, were identified by LSL during the course of their audit. Therefore, no Audit Report was required to be issued for the fiscal year ended June 30, 2021.

BUDGET IMPACT
The Audit Letter and Audit Report on Internal Control Matters (if required) are included as part of the cost of the annual audit and sufficient amounts have been included in the budget to pay for the audit.

LEGAL REVIEW
None required.

APPROVED BY: Peter Grant, City Manager
Attachments
Audit Letter for the FYE 6/30/21
Management Representation Letter for the FYE 6/30/21

Lance, Soll & Lunghard, LLP 203N.BreaBlvd.,Suite 203 Brea,CA92821 Phone: 714.672.0022 December 20, 2021
To the Honorable Mayor and Members of the City Council
City of Cypress, California
We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Cypress, California (the City) for the year ended June 30, 2021. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards, Government Auditing Standards and the Uniform Guidance, as well as certain information related to the planned scope and timing of our audit.

We have communicated such information in our letter to you dated December 20, 2021. Professional standards also require that we communicate to you the following information related to our audit.

Significant Audit Findings and Other Issues
Qualitative Aspects of Significant Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in the notes to the financial statements As described in Note 23 to the financial statements, the city changed accounting policies related to fiduciary fund accounting by adopting Statement of Governmental Accounting Standards (GASB Statement) No. 84, Fiduciary Activities, in the year ended June 30, 2021. Accordingly, the cumulative effect of the accounting change as of the beginning of the year is reported in the Statement of Revenues, Expenditures and Changes in Fund Balances, Governmental Funds and the Statement of Changes in Fiduciary Net Position.

All significant transactions have been recognized in the financial statements in the proper period.

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

Management’s estimates of its net pension liability and total other post-employment benefits liability based on actuarial valuation specialist assumptions. We evaluated the key factors and assumptions used to develop the net pension liability and total other post-employment benefits liability in determining that they are reasonable in relation to the financial statements taken as a whole.

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

Significant Unusual Transactions
Management is responsible for the policies and practices used to account for significant unusual transactions. No significant unusual transactions have occurred during fiscal year 2020-2021.

To the Honorable Mayor and Members of the City Council
City of Cypress, California
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing our audit.

Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management. No misstatements were found.

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

Circumstances that Affect the Form and Content of the Auditor’s Report New auditing standards were implemented in fiscal year 2020-2021 related to Statement of Auditing Standards 134, Auditor Reporting and Amendments, Including Amendments Addressing Disclosures in the Audit of Financial Statements, through Statement of Auditing Standards 140, Supplementary Information in Relation to the Financial Statements as a Whole. These standards updated the form and content of the financial statement auditor’s report. The purpose of the change was to present an easier format for users to understand the results of the audit and management’s responsibilities.

Management Representations
We have requested certain representations from management that are included in the management representation letter dated December 20, 2021.

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

Other Audit Findings or Issues Discussed with Management We generally discuss a variety of matters, including the significant events or transactions that occurred during the year, business conditions affecting the City and business plans and strategies that may affect the risks of material misstatements, the application of accounting principles and auditing standards, with management each year prior to retention as the City’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention.

To the Honorable Mayor and Members of the City Council
City of Cypress, California
Other Matters
We applied certain limited procedures to management’s discussion and analysis, the budgetary comparison schedules for the general fund and recreation and park district special revenue fund, and streets special revenue fund, the schedules of plan contributions, the schedules of proportionate share of the net pension liability, and the schedule of changes in total OPEB liability and related ratios which are required supplementary information (RSI) that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We did not audit the RSI and do not express an opinion or provide any assurance on the RSI.

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

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

The following new Governmental Accounting Standards Board (GASB) pronouncements were effective for fiscal year 2020-2021 audit:

GASB Statement No. 84, Fiduciary Activities.

GASB Statement No. 90, Majority Equity Interests - an Amendment of GASB Statement Nos. 14 and 61.

GASB Statement No. 98, Annual Comprehensive Financial Report.

The following GASB pronouncements are effective in the following fiscal years’ audits and should be reviewed for proper implementation by management:

Fiscal year 2022
GASB Statement No. 87, Leases.

GASB Statement No. 89, Accounting for Interest Cost Incurred before the End of a Construction Period.

GASB Statement No. 97, Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans.

To the Honorable Mayor and Members of the City Council
City of Cypress, California
Fiscal year 2023
GASB Statement No. 91, Conduit Debt Obligations.

GASB Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangement.

GASB Statement No. 96, Subscription-Based Information Technology Arrangements.

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

Very truly yours,
Brea, California

CITY OF CYPRESS
CITY COUNCIL REPORT
City Council Regular 11.

FROM: Matt Burton, Director of Finance and Administrative Services DATE: 01/10/2022
SUBJECT: Receive and File the Report on the City's Appropriations Limit for the Fiscal Year Ended June 30, 2021

RECOMMENDATION
Receive and file the attached Independent Accountants’ Report on Agreed-Upon Procedures Applied to the City's Appropriations Limit Worksheet for the Fiscal Year ended June 30, 2021.

DISCUSSION
All governments in California are required to have specific review procedures performed by independent accountants on the annual Appropriation Limit. Attached is a copy of the Independent Accountants’ Report of Agreed-Upon Procedures Applied to the Appropriations Limit Worksheet for the Fiscal Year ended June 30, 2021, prepared by the City's independent accountants, Lance, Soll and Lunghard LLP (LSL). LSL did not note any exceptions during the course of performing the agreed-upon procedures.

Under Article XIIIB of the California Constitution, appropriations limitations are based on the City's 1978-79 actual appropriations adjusted annually by a formula utilizing the percentage growth in California Per Capita Income and either the growth in the City's or the County's population.

The City used the population growth in the County of Orange to calculate the FY 2020-21 appropriation limitation of $84,907,506. The total appropriations subject to the limitation for FY 2020-21 were $25,665,666, which was $59,241,840 (69.8%) below the calculated appropriation limit.

BUDGET IMPACT
The review of the Appropriation Limit is included in the overall cost of the City’s annual audit and sufficient amounts are included in the budget to pay for the audit.

LEGAL REVIEW
None required.

APPROVED BY: Peter Grant, City Manager
Attachments
Report on the City's Appropriation Limit for the FYE 6/30/21

INDEPENDENT ACCOUNTANTS' REPORT ON AGREED-UPON

PROCEDURES APPLIED TO APPROPRIATIONS LIMIT WORKSHEETS
To the Honorable Mayor and Members of the City Council
City of Cypress, California
We have performed the procedures enumerated below to the accompanying Appropriations Limit Worksheet No. 6 (or other alternative computation) of the City of Cypress, California (the City), for the year ended June 30, 2021. These procedures, which were agreed to by the City of Cypress and the League of California Cities (as presented in the publication entitled Agreed-Upon Procedures Applied to the Appropriations Limitation Prescribed by Article XIII-B of the California Constitution), were performed solely to assist the City of Cypress in meeting the requirements of Section 1.5 of Article XIII-B of the California Constitution. The City of Cypress's management is responsible for the Appropriations Limit Worksheet No. 6 (or other alternative computation).

This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of those parties specified in this report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose.

The procedures performed and our findings were as follows:

1. We obtained the completed Worksheets No. 1 through No. 7 (or other alternative computations) and compared the limit and annual adjustment factors included in those worksheets 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 worksheets to those that were selected by a recorded vote of the City Council.

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

2. For the accompanying Appropriations Limit Worksheet No. 6, we multiplied line A, last year's limit, by line D, ratio of change, and agreed the resulting amount to line E, this year's limit.

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

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 our procedures.

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 our procedures.

Lance, Soll & Lunghard, LLP 203N.BreaBlvd.,Suite 203 Brea,CA92821 Phone: 714.672.0022 To the Honorable Mayor and Members of the City Council
City of Cypress, California
We were not engaged to and did not perform an audit, the objective of which would be the expression of an opinion on the accompanying Appropriations Limit Worksheet No. 6. Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you. No procedures have been performed with respect to the determination of the appropriations limit for the base year, as defined by the League publication entitled Article XIIIB Appropriations Limitation Uniform Guidelines.

This report is intended solely for the use of the City of Cypress, California and should not be used by those who have not agreed to the procedures and taken responsibility for the sufficiency of the procedures for their purposes. However, this report is a matter of public record and its distribution is not limited.

Brea, California
July 12, 2021

CITY OF CYPRESS
2020-2021

APPROPRIATIONS LIMIT CALCULATION
A. 2019-2020 APPROPRIATIONS LIMIT: $ 81,366,142
B. 2020-2021 CHANGE IN CALIFORNIA PER
CAPITA PERSONAL INCOME: 3.73%
C. 2020-2021 CHANGE IN POPULATION: 0.60%
D. RATIO OF CHANGE (1.0373 X 1.0060): x 1.04352380
E. 2020-2021 APPROPRIATIONS LIMIT: $ 84,907,506
($ 81,366,142 X 1.04352380)
CITY OF CYPRESS
CITY COUNCIL REPORT
City Council Regular 12.

FROM: Matt Burton, Director of Finance and Administrative Services DATE: 01/10/2022
SUBJECT: Receive and File the Cypress Recreation and Park District’s Financial Statements and Auditors' Report for the Fiscal Year Ended June 30, 2021

RECOMMENDATION
Receive and file the District's Basic Financial Statements and Independent Auditors' Report for the Fiscal Year Ended June 30, 2021.

DISCUSSION
The Director of Finance is required to annually submit a complete set of financial statements for the Cypress Recreation and Park District (District) to the Board of Directors. The State also requires the District undergo an annual financial audit. Attached is the District’s Basic Financial Statements and Independent Auditors' Report for the Fiscal Year ended June 30, 2021. The report has been prepared, and an audit opinion issued, by the firm of Lance, Soll and Lunghard LLP (LSL). The District has received an unqualified, or “clean”, opinion from LSL for the audit period.

The report presents the activity of the District for the fiscal year. In accordance with the requirements of the Governmental Accounting Standards Board, the report presents a Management’s Discussion and Analysis (MD&A) and the basic financial statements for the District. The basic financial statements contain two types of statements: 1) the government-wide financial statements, and 2) the fund financial statements. The government-wide financial statements present the District’s information on a full accrual basis which attempts to provide a long-term view of the District’s financial position. The fund financial statements are presented on a modified accrual basis which focuses on a short-term view of the District’s current and available financial resources. When both sets of financial statements are reviewed in conjunction with the notes to the basic financial statements, a complete picture of the District’s financial condition is developed for the reader of the report.

BUDGET IMPACT
The cost of the audit includes the preparation of the financial statements and sufficient The cost of the audit includes the preparation of the financial statements and sufficient amounts are included in the District's budget to pay for these services.

LEGAL REVIEW
None required.

APPROVED BY: Peter Grant, City Manager
Attachments
Cypress Recreation and Park District Basic Financial Statements and Independent Auditors' Report for the FYE 6/30/21
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CYPRESS RECREATION AND PARK DISTRICT
BASIC FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS’ REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2021

TABLE OF CONTENTS
Page
Number
INDEPENDENT AUDITORS’ REPORT........................................................................................... 1 MANAGEMENT’S DISCUSSION AND ANALYSIS ......................................................................... 5

BASIC FINANCIAL STATEMENTS
Government-Wide Financial Statements:

Statement of Net Position................................................................................................... 13 Statement of Activities ........................................................................................................ 14 Fund Financial Statements:

Balance Sheet - Governmental Fund ................................................................................. 19 Reconciliation of the Governmental Fund Balance Sheet
to the Statement of Net Position......................................................................................... 20 Statement of Revenues, Expenditures and Changes in Fund Balance - Governmental Fund............................................................................................ 21 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balance of the Governmental Fund to the Statement of Activities ........................................................................................................ 22 Statement of Net Position – Proprietary Funds .................................................................. 25 Statement of Revenues, Expenses and Changes in
Net Position – Proprietary Funds........................................................................................ 26 Statement of Cash Flows – Proprietary Funds................................................................... 27 Notes to Basic Financial Statements....................................................................................... 31

CYPRESS RECREATION AND PARK DISTRICT
BASIC FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS’ REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2021

TABLE OF CONTENTS
Page
Number

REQUIRED SUPPLEMENTARY INFORMATION
Schedule of proportionate Share of the Net Pension Liability – Defined Benefit Pension Plan............................................................................................... 63 Schedule of Changes in Net Pension Liability and Related Ratios – Defined Benefit Pension Plan.............................................................................................. 65 Schedule of Contributions – Defined Benefit Pension Plan .................................................... 66 Schedule of Proportionate Share of the Net Pension Liability – OCERS - Defined Benefit Pension Plan ............................................................................. 68 Schedule of Contributions – OCERS - Defined Benefit Pension Plan .................................... 69 Schedule of Changes in the Total OPEB Liability and Related Ratios ................................... 70 Budgetary Comparison Schedule – General Fund.................................................................. 71 Notes to Required Supplementary Information ....................................................................... 73

COMBINING FUND STATEMENTS
Combining Statement of Net Position – Internal Service Funds ............................................. 78 Combining Statement of Revenues, Expenditures and Changes in Net Position – Internal Service Funds ................................................................................. 79 Combining Statement of Cash Flows – Internal Service Funds.............................................. 80 Independent Auditors’ Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ............................................ 81 INDEPENDENT AUDITORS’ REPORT
To the Board of Directors
Cypress Recreation and Park District
City of Cypress, California
Report on the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities, the major fund, and the aggregate remaining fund information of the Cypress Recreation and Park District (the District), a component unit of the City of Cypress, California, as of and for the year ended June 30, 2021, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents.

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the major fund, and the aggregate remaining fund information of the Cypress Recreation and Park District, as of June 30, 2021, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

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

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the District’s ability to continue as a going concern for twelve months beyond the date of the financial statements.

Lance, Soll & Lunghard, LLP 203 N. Brea Blvd., Suite 203 Brea, CA 92821 Phone: 714.672.0022 To the Board of Directors
Cypress Recreation and Park District
City of Cypress, California
Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with the GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users made on the basis of these financial statements.

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

Other Reporting Responsibilities
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, the budgetary comparison schedule for the General Fund, the schedule of changes in net pension liability and related ratios – defined benefit plan, the schedule of contributions – defined benefit plan, the schedule of proportionate share of the net pension liability – OCERS – defined benefit plan, the schedule of contributions – OCERS- defined benefit plan, and the schedule of change in the total OPEB liability and related ratios on pages 5-8 and 63-71 be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information 2 To the Board of Directors
Cypress Recreation and Park District
City of Cypress, California
because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the District’s basic financial statements. The combining fund financial statements are presented for purposes of additional analysis and are not a required part of the basic financial statements.

The combining fund financial statements 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 schedules are fairly stated, in all material respects in relation to the basic financial statements as a whole.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 20, 2021, on our consideration of the District’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 District’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 District’s internal control over financial reporting and compliance.

Brea California
December 20, 2021
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4 CYPRESS RECREATION AND PARK DISTRICT
Management’s Discussion and Analysis
June 30, 2021
The discussion and analysis of the Cypress Recreation and Park District’s (District's) financial performance provides an overall review of the District's financial activities for the fiscal year ended June 30, 2021. The intent of this discussion and analysis is to look at the District's financial performance as a whole. Readers should also review the basic financial statements, as well as the prior year's report ending June 30, 2020, to enhance their understanding of the District's financial performance.

The financial section of this report has been prepared to show the results of the financial administration, financial condition, and operations of the District. The combined financial statements in this report have been audited by the firm of Lance, Soll and Lunghard LLP, whose opinion is included.

BASIS OF ACCOUNTING AND FUND GROUPINGS
The government-wide financial statements are presented on an “economic resources” measurement focus and, accordingly, all of the District’s assets, deferred outflows of resources, liabilities, and deferred inflows of resources, including capital assets and long-term liabilities, are reflected in the accompanying Statement of Net Position. The Statement of Activities presents changes in net position. The government-wide financial statements also are structured to reflect the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred.

The governmental fund financial statements are presented on a spending or “current financial resources” measurement focus. Accordingly, only current assets and current liabilities are included on the Balance Sheet. The Statement of Revenues, Expenditures and Changes in Fund Balance present increases (revenue and other financing sources) and decreases (expenditures and other financing uses) in fund balances. The governmental fund statements are also presented using the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recognized in the accounting period in which they become both measurable and available to pay for expenditures of the current period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to other long-term liabilities, are recorded only when payment is due. The District maintains funds in accordance with generally accepted accounting principles set forth by the GASB and other rule-making entities.

The District maintains two internal service funds. Internal service funds are an accounting device used to accumulate and allocate costs internally among the District’s various functions. The District uses internal service funds to account for its central services and employee benefits.

Because these services benefit governmental functions, they have been included within governmental activities in the government-wide financial statements.

The internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for each of the two internal service funds are provided in the form of combining statements elsewhere in this report. The basic proprietary fund financial statements can be found immediately following the basic governmental fund financial statements.
5 CYPRESS RECREATION AND PARK DISTRICT
Management’s Discussion and Analysis
June 30, 2021

FINANCIAL DISCUSSION
In the governmental fund financial statements, the District reported a deficiency in revenues and other financing sources over expenditures and other financing uses of $184,772. At the end of the current fiscal year, the nonspendable fund balance of the District was $34,000, the restricted fund balance was $268,240 (compared to $526,302 at the beginning of the year), the committed fund balance was $2,684,680 (compared to $2,532,600 at the beginning of the year), the assigned fund balance was $8,955,928 (compared to $8,655,928 at the beginning of the year), while total fund balance was $12,187,242 (compared to $11,948,618 at the beginning of the year). The total fund balance that is not restricted, committed or nonspendable (comprised of assigned and unassigned fund balance amounts) represents 183.0 percent (compared with 179.7 percent from the previous year) of the fund’s total current expenditures. Since the bulk of the District’s operations are funded with annual property tax revenues, a portion of the assigned fund balance is needed to meet cash flow shortages between property tax receipts. The majority of the remaining assigned fund balance amounts are available to cover potential contingency needs of the District, offset retiree pension liabilities and pay for future facility and park infrastructure improvement projects.

For the fiscal year ended June 30, 2021, the District’s balance of cash and cash equivalents was $14,823,556, an increase of $1,865,473 from the prior fiscal year. Total receivables at the end of the fiscal year were $147,047, which is a decrease of $12,907 from the prior year total of $134,140.

Revenues
Taxes $ 5,958,451 $ 5,958,510 $ (59)
From other agencies 32,300 54,498 (22,198)
Charges for services 468,056 462,268 5,788
From use of property 101,042 414,657 (313,615)
Other revenue 4,938 3,649 1,289
Total Revenues 6,564,787 6,893,582 (328,795)
Expenditures
Parks and recreation 4,181,888 3,945,307 236,581
Contribution to City for
infrastructure set-aside 845,780 1,000,570 (154,790)
Capital outlay 6,894,042 3,457,210 3,436,832
Total Expenditures 11,921,710 8,403,087 3,518,623
Other Financing Uses
Special item - proceeds from the issuance
of notes from the City of Cypress 5,421,299 423,396 4,997,903 Transfers out (249,148) (193,873) (55,275)
Total Other Financing Uses 5,172,151 229,523 4,942,628
Increase (decrease) in fund balance $ (184,772) $ (1,279,982) $ 1,095,210 Summary of Changes in Fund Balances
General Fund
For the fiscal year ended June 30, 2021 and 2020
2021 2020 Change
6 CYPRESS RECREATION AND PARK DISTRICT
Management’s Discussion and Analysis
June 30, 2021
Total Recreation and Park District revenues for the fiscal year ended June 30, 2021 decreased by $328,795 from the prior year. Individual changes during the past year to the District’s major revenues are highlighted as follows:
¾ Property tax revenues, the District’s largest revenue source, were basically unchanged from the prior year. Increases associated with the positive impacts to property tax revenues resulting from rising assessed values were offset by the amount of residual property tax paid to the District. After several years of increasing, these residual amounts declined in the last year as Successor Agency activities continued to wind down. ¾ Despite dealing with a variety of pandemic-related challenges in providing recreation programming, charges for services were basically unchanged when compared to the prior year. In March 2020, the COVID-19 pandemic halted traditional recreation programming for the remainder of the year causing sharp declines in revenues associated with this typically busy period of the year. While the easing of pandemic restrictions and the development of alternate programming caused revenues to bounce back over the past year, the activity levels remained well below a typical year. In addition, no park development fees were received in the prior fiscal year compared to $93,684 received during the fiscal year ended June 30, 2021. These fees vary year to year based on housing development activity within the City.
¾ Revenues from the use of property decreased due to significantly lower interest earnings caused by declines in the market interest rates earned on cash reserves. In addition, COVID-19 pandemic restrictions severely limited facility rentals throughout the fiscal year ended June 30, 2021.

Notable changes in expenditures and other financing sources during the year ended June 30, 2021 follow:
¾ Recreation expenditures increased just over $236,000 (6.0 percent) due to a partial rebound from pandemic-related declines in part-time personnel and payments to contract class instructors, as well as negotiated salary and benefit increases for full-time employees.
¾ Contribution to the City for infrastructure set-aside experienced declines associated with the decrease in residual property tax revenues discussed earlier. The District annually contributes all residual property tax amounts that were previously apportioned to the former Redevelopment Agency. This repayment was established when the State disallowed loans from the City to the former Redevelopment Agency which had been used to pay for several recreation capital projects (including the construction of the Senior Center and the remodel of the Community Center).
¾ Capital expenditures rose by $3,436,832 due primarily to breaking ground and spending $5.4 million on the construction of Lexington Park. When completed in FY 2021-22, this project will create two large sports fields and other amenities with a total cost of approximately $13 million. In addition to the investment in Lexington Park, $600,000 was expended for ADA compliant playground resurfacing at seven parks. ¾ A special item is reported to record the receipt of note proceeds from the City of Cypress which are authorized up to $13.7 million to pay for the design and construction of Lexington Park. Through June 30, 2021, note proceeds of $5,844,695 have been received by the District and expended on the park. These notes will be repaid using park development revenues generated in conjunction with the eventual development of the Los Alamitos Race Course property.
7 CYPRESS RECREATION AND PARK DISTRICT
Management’s Discussion and Analysis
June 30, 2021
¾ Transfers out were $55,275 more than the prior year and are comprised of two recurring transfers, including a $150,000 annual transfer to the employees’ benefits internal service fund to help offset any unfunded pension liability owed to the Orange County Employees Retirement System (OCERS). This liability represents monies owed on behalf of vested District employees who earned OCERS pension benefits prior to 2000 when all employees were enrolled in CalPERS. In addition, annual transfers occur to pay for new capital outlay items purchased in the District’s Central Services Internal Service Fund.

District General Fund Budgetary Highlights
Net increases between the original appropriations budget and the final amended budget totaled $710,518. These budget increases are primarily related to the annual carryover of appropriations to the new fiscal year for encumbrances and purchases not completed in the prior fiscal year, with the majority of these carryovers related to a variety of capital improvements. These projects include the design of Lexington Park, playground resurfacing and city-wide enhancements at various parks.

REQUEST FOR INFORMATION
This financial report is designed to provide our citizens, taxpayers, creditors and investors with a general overview of the District's finances and to show the City's accountability for the money it receives. Questions concerning any of the information provided in this report or requests for additional information should be addressed to the City of Cypress, Finance Department, 5275 Orange Avenue, Cypress, California 90630.
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12 CYPRESS RECREATION AND PARK DISTRICT

STATEMENT OF NET POSITION
Government
Governmental
Activities
Assets
Current Assets:

Cash and cash equivalents $ 16,759,359
Receivables:

Accounts 109,690
Taxes 65,508
Accrued interest 10,173
Prepaid costs 38,116
Inventories 699
Total Current Assets 16,983,545
Noncurrent Assets:

Capital assets:

Non-depreciable assets 17,641,313
Depreciable assets, net 12,620,333
Total Capital Assets 30,261,646
Total Assets 47,245,191
Deferred Outflows of Resources
Deferred amounts from pension plans 2,329,397
Deferred amounts from OPEB 104,033
Total Deferred Outflows of Resources 2,433,430
Liabilities
Current Liabilities:

Accounts payable and accrued liabilities 2,826,752
Unearned revenue 138,888
Accrued leave payable 30,300
Deposits payable 950
Total Current Liabilities 2,996,890
Noncurrent Liabilities:

Notes payable to the City of Cypress 5,844,695
Accrued leave payable 90,939
Total OPEB liability 674,656
Net pension liability 3,270,826
Total Noncurrent Liabilities 9,881,116
Total Liabilities 12,878,006
Deferred Inflows of Resources
Deferred amounts from pension plans 1,244,267
Deferred amounts from OPEB 46,984
Total Deferred Inflows of Resources 1,291,251
Net Position
Investment in capital assets 30,261,646
Restricted 268,240
Unrestricted 4,979,478
Total Net Position $ 35,509,364
JUNE 30, 2021
Primary
See Notes to Financial Statements
13 CYPRESS RECREATION AND PARK DISTRICT

STATEMENT OF ACTIVITIES
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
Net (Expenses)
Revenue and
Changes in Net
Position
Operating
Charges for Grants and Governmental
Functions/Programs Expenses Services Contributions Activities Primary government:

Governmental activities:

Recreation $ 5,705,634 $ 468,056 $ 32,300 $ (5,205,278) Total governmental activities $ 5,705,634 $ 468,056 $ 32,300 (5,205,278) Property taxes 5,958,451
Investment income 101,042
Other revenue 4,938
Total general revenues 6,064,431
Change in net position 859,153
Net position at beginning of year 34,650,211
Net position at end of year $ 35,509,364
Program Revenues
General revenues:

See Notes to Financial Statements
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Governmental Fund Financial Statements
Proprietary Fund Financial Statements
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18 CYPRESS RECREATION AND PARK DISTRICT

BALANCE SHEET

GOVERNMENTAL FUND
JUNE 30, 2021
General Fund
Assets
Cash and cash equivalents $ 14,823,556
Receivables:

Accounts 71,366
Taxes 65,508
Interest 10,173
Prepaid costs 33,301
Inventories 699
Total Assets $ 15,004,603
Liabilities and Fund Balance
Liabilities
Accounts payable and accrued liabilities $ 2,677,523
Unearned revenues 138,888
Deposits payable 950
Total Liabilities 2,817,361
Fund Balance
Nonspendable 34,000
Restricted 268,240
Committed 2,684,680
Assigned 8,955,928
Unassigned 244,394
Total Fund Balance 12,187,242
Total Liabilities and Fund Balance $ 15,004,603
See Notes to Financial Statements
19 CYPRESS RECREATION AND PARK DISTRICT

RECONCILIATION OF THE GOVERNMENTAL FUND BALANCE SHEET

TO THE STATEMENT OF NET POSITION
JUNE 30, 2021
Fund balance - total governmental fund $ 12,187,242
Amounts reported for governmental activities in the statement of net position are different because:

Capital assets used in governmental funds are not current financial resources and therefore are not reported in the Governmenal Fund Balance Sheet. This amount does not inlcude the internal service funds amounts of $284,514:

Non-depreciable $ 17,641,313
Depreciable, net 12,335,819 29,977,132
Internal service funds are used by management to charge the costs of certain activities to individual funds. The assets and liabilities of the internal service funds are included in governmental activities in the Government-Wide Statement of Net Position. (810,315)
Long-term advances from the City of Cypress (5,844,695) Net Position of Governmental Activities $ 35,509,364
See Notes to Financial Statements
20 CYPRESS RECREATION AND PARK DISTRICT

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE

GOVERNMENTAL FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
General Fund
Revenues
Taxes $ 5,958,451
From other agencies 32,300
Charges for services 468,056
From use of property 101,042
Other revenue 4,938
Total Revenues 6,564,787
Expenditures
Current:

Parks and recreation 4,181,888
Contribution to City for infrastucture set-aside 845,780 Capital outlay 6,894,042
Total Expenditures 11,921,710
Excess of Expenditures
Over Revenues (5,356,923)
Other Financing Uses
Special item - Issuance of Notes Payable (See Note 13) 5,421,299 Transfers out (249,148)
Total Other Financing Uses 5,172,151
Net Change in Fund Balance (184,772)
Fund Balance - Beginning of Year 11,948,618
Prior period adjustment (See Note 14) 423,396
Fund Balance - Beginning of Year (as adjusted) 12,372,014 Fund Balance - End of Year $ 12,187,242
See Notes to Financial Statements
21 CYPRESS RECREATION AND PARK DISTRICT

RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES TO FUND BALANCE OF THE GOVERNMENTAL FUND
JUNE 30, 2021
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
Net change in fund balance - total governmental fund (184,772) $ Amounts reported for governmental activities in the Statement of Activities are different because:

Governmental funds report capital outlays as expenditures. However, in the Statement of Activities, the costs of those assets is allocated over their estimated useful lives as depreciation expense. This is the amount by which capital outlays exceeded depreciation in the current period.

Capital outlay 6,894,042
Depreciation expense on capital assets is reported in the Government-Wide Statement of Activities, but it does not require the use of current finacial resources. Therefore, (661,744) depreciation expense is not reported as expenditures in the Governmental Fund. This amount does not include the depreciation expense for internal service funds in the amount of $25,753.

Internal service funds are used by management to charge the costs of certain activities such as insurance and fleet management, to individual funds. The change in net position of the internal service fund is reported with governmental activities. 232,926 Issuance of long-term notes payable to the City of Cypress are not reported as expenditures in the Governmetnal Fund (5,421,299)
Change in Net Position of Governmental Activities $ 859,153 See Notes to Financial Statements
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24 CYPRESS RECREATION AND PARK DISTRICT

STATEMENT OF NET POSITION

PROPRIETARY FUNDS
JUNE 30, 2021
Governmental
ActivitiesInternal
Service Funds
Assets
Current:

Cash and cash equivalents $ 1,935,803
Other receivables
Accounts 38,324
Prepaid costs 4,815
Total Current Assets 1,978,942
Noncurrent:

Capital assets - net of accumulated depreciation 284,514 Total Noncurrent Assets 284,514
Total Assets 2,263,456
Deferred Outflows of Resources:

Deferred amounts from pension plans 2,329,397
Deferred amounts from OPEB 104,033
Total Deferred Outflows of Resources 2,433,430
Liabilities, Deferred Inflows of Resources, and Net Position:

Liabilities:

Current:

Accounts payable 149,229
Accrued compensated absences 30,300
Total Current Liabilities 179,529
Noncurrent:

Accrued compensated absences 90,939
Total OPEB liability 674,656
Net pension liability 3,270,826
Total Noncurrent Liabilities 4,036,421
Total Liabilities 4,215,950
Deferred Inflows of Resources:

Deferred amounts from pension plans 1,244,267
Deferred amounts from OPEB 46,984
Total Deferred Inflows of Resources 1,291,251
Net Position:

Investment in capital assets 284,514
Unrestricted (1,094,829)
Total Net Position $ (810,315)
25 CYPRESS RECREATION AND PARK DISTRICT

STATEMENT OF REVENUES, EXPENSES

AND CHANGES IN NET POSITION

PROPRIETARY FUNDS
YEAR ENDED JUNE 30, 2021
Governmental
ActivitiesInternal
Service Funds
Operating Revenues:

Charges for services $ 1,025,498
Total Operating Revenues 1,025,498
Operating Expenses:

Contractual services 740,290
Supplies and other services 275,365
Depreciation expense 25,753
Total Operating Expenses 1,041,408
Operating Income (Loss) (15,910)
Nonoperating Revenues (Expenses):

Gain (loss) on disposal of capital assets (312)
Total Nonoperating
Revenues (Expenses) (312)
Income Before Transfers (16,222)
Transfers in 249,148
Changes in Net Position 232,926
Net Position:

Beginning of Year (1,043,241)
End of Fiscal Year $ (810,315)
26 CYPRESS RECREATION AND PARK DISTRICT

STATEMENT OF CASH FLOWS

PROPRIETARY FUNDS
YEAR ENDED JUNE 30, 2021
Governmental
ActivitiesInternal
Service Funds
Cash Flows from Operating Activities:

Receipts from user departments $ 1,039,938
Payments to suppliers for goods and services (937,578)
Net Cash Provided (Used) by Operating Activities 102,360 Cash Flows from Non-Capital
Financing Activities:

Cash transfers in 249,148
Net Cash Provided (Used) by
Non-Capital Financing Activities 249,148
Cash Flows from Capital
and Related Financing Activities:

Acquisition and construction of capital assets (33,825) Net Cash Provided (Used) by
Capital and Related Financing Activities (33,825)
Net Increase (Decrease) in Cash
and Cash Equivalents 317,683
Cash and Cash Equivalents at Beginning of Year 1,618,120 Cash and Cash Equivalents at End of Year $ 1,935,803
Reconciliation of Operating Income to Net Cash
Provided (Used) by Operating Activities:

Operating income (loss) $ (15,910)
Adjustments to Reconcile Operating Income (loss)
Net Cash Provided (used) by Operating Activities:

Depreciation 25,753
(Increase) decrease in accounts receivable 1,258
(Increase) decrease in prepaid expense 8,926
(Increase) decrease in deferred outflows amounts from OPEB 15,35 7 (Increase) decrease in deferred outflows amounts from pension plans 695,185 Increase (decrease) in accounts payable and accrued liabilities (1,084) Increase (decrease) in accrued leave payable 6,257
Increase (decrease) in total OPEB liability (121,653)
Increase (decrease) in deferred inflows amounts from OPEB 24,878 Increase (decrease) in net pension liability 128,070
Increase (decrease) in deferred inflows amounts from pension plans (664,677) Total Adjustments 118,270
Net Cash Provided (Used) by
Operating Activities $ 102,360
Non-Cash Investing, Capital, and Financing Activities:

Gain/(Loss) on disposition of capital assets $ (312)
Capital asset acquisitions in accounts payable 95,132
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Cypress City CouncilJanuary 10, 2022

Cypress City Council
January 10, 2022