Agenda packet — Cypress City Council, March 11, 2024 (part 1 of 2)

AGENDA

REGULAR MEETING

CYPRESS CITY COUNCIL
March 11, 2024
4:00 P.M. - Workshop
5:00 P.M. - General Session
6:00 P.M. - Public Hearing on District
Elections
www.cypressca.org 5275 Orange Avenue
Cypress, California
Interested in speaking to the City Council? Information about participating in the City Council meeting appears at the end of the agenda.

CALL TO ORDER
4:00 P.M.

Executive Board Room

ROLL CALL
Cypress City Council, also acting as the Ex-Officio Governing Board of Directors of the Cypress Recreation and Park District
Mayor Scott Minikus
Mayor Pro Tem Bonnie Peat
Council Member David Burke
Council Member Anne Mallari
Council Member Frances Marquez
ORAL COMMUNICATIONS ON CLOSED SESSION / WORKSHOP ITEMS (Limited to 30 minutes - three minutes per speaker. The City Council may adjust the time allotted per speaker.) The public may address the City Council on Closed Session/Workshop items prior to any action taken. Although Council Members may provide brief responses, the City Council may not engage in a discussion with members of the public during the meeting. Please complete a Speaker's Card to address the City Council in-person. Members of the public are encouraged to communicate with the City Council via email at [email protected] or by calling 714-229-6699.

WORKSHOP SESSION
Business Park Specific Plan Modernization

RECONVENE
5:00 P.M.

Council Chambers

PLEDGE OF ALLEGIANCE

REPORT OF CLOSED SESSION / WORKSHOP
City Manager/City Attorney

PRESENTATIONS
Introduction of New City Employees
Senator Newman District Representative Introduction
ORAL COMMUNICATIONS ON AGENDA ITEMS (Three minutes per speaker. The City Council may adjust the time allotted per speaker.)
The public may address the City Council on agenda items prior to any action taken. Although Council Members may provide brief responses, the City Council may not engage in a discussion with members of the public during the meeting. Please complete a Speaker's Card to address the City Council in-person. Please follow the instructions at the end of the agenda and wait for the Mayor/City Clerk to call on you to address the City Council virtually. Speakers providing in-person comments will be called first. Members of the public are encouraged to communicate with the City Council via email at [email protected] or by calling 714-229-6699.

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. Council Members voting no or abstaining on a Consent Calendar item may do so without removing the item from the Consent Calendar.

March 11, 2024 | Page 2

1. Approve Minutes - Meetings of January 29, February 12, and February 20, 2024 Prepared by: Alisha Farnell, City Clerk
Recommendation: Approve as submitted.

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

3. Certify Special Assessments Against 5321 Marion Avenue and 5692 Karen Avenue for the Collection of Nuisance Abatement Costs
Prepared by: Alicia Velasco, Planning Director
Recommendation: Adopt a Resolution certifying special assessments against 5321 Marion Avenue (APN 241-171-03) and 5692 Karen Avenue (APN 244-512-17) for collection of delinquent nuisance abatement costs.

4. Receive and File the Annual Comprehensive Financial Report for the Fiscal Year Ended June 30, 2023
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, 2023.

5. Receive and File the Audit Letter to the City Council for the Fiscal Year Ended June 30, 2023
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, 2023.

6. Receive and File the Cypress Recreation and Park District’s Financial Statements and Auditors' Report for the Fiscal Year Ended June 30, 2023 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, 2023.

7. Receive and File the Audit Letter to the District Board for the Fiscal Year Ended June 30, 2023
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, 2023.

March 11, 2024 | Page 3

8. Receive and File the Report on the City's Appropriations Limit for the Fiscal Year Ended June 30, 2023
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, 2023.

9. Receive and File the Independent Accountants’ Report on the Cypress Recreation and Park District’s Appropriations Limit for the Fiscal Year Ended June 30, 2023
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, 2023.

PUBLIC HEARING (Three minutes per speaker)
The public may address the City Council on public hearing items prior to any action taken.

Although Council Members may provide brief responses, the City Council may not engage in a discussion with members of the public during the meeting. Please complete a Speaker's Card to address the City Council in-person. Please follow the instructions at the end of the agenda and wait for the Mayor/City Clerk to call on you to address the City Council virtually. Speakers providing in-person comments will be called first.

Council Members should disclose communications with anyone relevant to a Public Hearing item.

10. Public Hearing to Amend Section 17-72 of Chapter 17 of the Municipal Code Regarding Park Regulations
Prepared by: Jeff Draper, Director of Recreation and Community Services Recommendation:

1. Conduct a public hearing to take testimony on amending Section 17-72 of Chapter 17 of the Municipal Code regarding park regulations; and

2. Approve the first reading, by title only, of an Ordinance amending Section 17-72 of Chapter 17 of the Municipal Code regarding park regulations and find the action exempt from the California Environmental Quality Act.

March 11, 2024 | Page 4
PUBLIC HEARING ON DISTRICT ELECTIONS - 6:00 P.M. (Three minutes per speaker) The public may address the City Council on public hearing items prior to any action taken.

Council Members should disclose communications with anyone relevant to a Public Hearing item.

11. Conduct a Public Hearing, Approve the Second Reading and Adopt an Ordinance Adding Article XII, Sections 2-135 through 2-138 to Chapter 2 of the Municipal Code Establishing a By-District Election System Prepared by: Fred Galante, City Attorney
Recommendation:

1. Conduct a public hearing to take testimony; and

2. Approve the second reading and adopt an Ordinance adding Article XII, Sections 2-135 through 2-138 to Chapter 2 of the Municipal Code establishing a by-district election system and adoption of an exemption from CEQA.

ITEMS REMOVED FROM CONSENT CALENDAR
ORAL COMMUNICATIONS (Three minutes per speaker. The City Council may adjust the time allotted per speaker.)
The public may address the City Council on any item within the subject matter jurisdiction of the City Council. Although Council Members may provide brief responses, the City Council may not discuss nor take action on items that are not on the agenda. Please complete a Speaker's Card to address the City Council in-person. Members of the public are encouraged to communicate with the City Council via email at [email protected] or by calling 714-229-6699.

COUNCIL MEMBER REPORTS FROM CITY-AFFILIATED BOARDS AND COMMITTEES

AND REMARKS

COUNCIL MEMBER ITEMS FOR FUTURE CONSIDERATION

CITY MANAGER REMARKS

ADJOURNMENT
March 11, 2024 | Page 5

ADJOURNMENT
The next meeting will be an adjourned Regular Meeting, to be held on Monday, March 25, 2024, beginning at 5:30 p.m. in the Executive Board Room.

Council Members and the public should promptly exit the Council Chambers and proceed through the Civic Center to the parking lot.

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 and City website not less than 72 hours prior to the meeting. Dated this 7th day of March, 2024.

________________________________
Alisha Farnell, City Clerk
March 11, 2024 | Page 6

PUBLIC PARTICIPATION
Members of the public can participate in the City Council meeting in the following ways:

1. Attend In-Person. First-come, first-served seating is available. All attendees must be free of any symptoms associated with contagious illnesses.

2. Attend Virtually via Webinar. Follow this link:
https://attendee.gotowebinar.com/register/3205000966344755545. Advanced registration is recommended.

The public may address the City Council virtually during Oral Communications on Agenda Items and Public Hearings. Virtual participants must click the 'hand raise' button prior to the end of the first in-person speaker to indicate they wish to address the City Council. Upon clicking the 'hand raise' button, please unmute your microphone and wait for the Mayor/City Clerk to call on you. = Hand Raise = Unmute

3. 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 the day of the meeting will be added to the City Council agenda as a Consent Calendar item.

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

5. Listen to the Meeting. Listen-only teleconferencing is available by calling (631) 992-3221 and entering Access Code 480-225-962. No registration or audio pin is necessary.

INVOCATION POLICY
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.

AMERICANS WITH DISABILITIES ACT
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.

March 11, 2024 | Page 7
CITY OF CYPRESS
CITY COUNCIL REPORT
City Council Regular 1.

FROM: Alisha Farnell, City Clerk
DATE: 03/11/2024
SUBJECT: Approve Minutes - Meetings of January 29, February 12, and February 20, 2024

RECOMMENDATION
Approve as submitted.

BUDGET IMPACT
None.

LEGAL REVIEW
None required.

APPROVED BY: Peter Grant, City Manager
Attachments
January 29, 2024 Special Meeting Minutes
February 12, 2024 Regular Meeting Minutes
February 20, 2024 Special Meeting Minutes

SPECIAL MEETING

CYPRESS CITY COUNCIL
JANUARY 29, 2024
4:30 P.M. – Closed Session
5:00 P.M. – General Session
6:00 P.M. – Public Hearing
A special meeting of the Cypress City Council was called to order at 4:30 p.m. by Mayor Minikus in the Council Chambers, 5275 Orange Avenue, Cypress, California.

STAFF PRESENT
City Manager Peter Grant
City Attorney Fred Galante
Director of Finance and Administrative Services Matt Burton Director of Public Works Doug Dancs
Director of Recreation and Community Services Jeff Draper Planning Director Alicia Velasco
Chief of Police Mark Lauderback
City Clerk Alisha Farnell
City Engineer Nick Mangkalakiri
IT Manager Adrian Smith
Lieutenant Scott Ausmus
Admin Services Technician II Pat Hough
Admin Services Technician II Tom Anderson
Office Assistant II Christina Dizol
Maintenance Specialist Tad Sawyer

ORAL COMMUNICATIONS ON CLOSED SESSION/ WORKSHOP ITEMS
(Limited to 30 minutes – three minutes per speaker. The City Council may adjust the time allotted per speaker.)
None.

CLOSED SESSION
The City Attorney announced the City Council would convene in Closed Session to discuss the following item:

THREAT TO PUBLIC SERVICES OR FACILITIES
Pursuant to Government Code Section 54957
Consultation with: Cypress Police Department, Chief of Police The City Attorney further announced that the second item listed on the Closed Session portion of the agenda, namely Conference with Legal Counsel – Existing Litigation regarding the matter of Fortis LLP v. Frances Marquez, City of Cypress, would not be discussed and a notice of cancellation of the item was posted.

Mayor Minikus recessed the meeting at 4:32 p.m.

RECONVENE
Mayor Minikus reconvened the public meeting in the Council Chambers at 5:03 p.m.

STAFF PRESENT
City Manager Peter Grant
City Attorney Fred Galante
City Clerk Alisha Farnell

REPORT OF CLOSED SESSION
The City Attorney stated that the City Council met in Closed Session and held a discussion on the first item listed on the Closed Session portion of the agenda, Threat to Public Services or Facilities in consultation with the Cypress Police Department, Chief of Police. He stated the Council received a briefing and no further reportable action was taken.

PRESENTATION
Ken Vecchiarelli from Golden State Water provided a presentation on upcoming projects.

ORAL COMMUNICATIONS ON AGENDA ITEMS
Nora Stein, Cypress, spoke regarding Agenda Items No. 2 & 3.

Esther Poch, Cypress, spoke regarding Agenda Items No. 1-3.

Wanda Youngsma, Cypress, spoke regarding Agenda Items No. 1-3.

Bob Youngsma, Cypress, spoke regarding Agenda Items No. 1-3.

Harumi Lucak, Cypress, spoke regarding Agenda Items No. 1-3.

Pearl Boelter, Cypress, spoke regarding Agenda Items No. 1-3.

Carolyn Balagot, Cypress, spoke regarding Agenda Items No. 1-3.

Marilyn Reames, Cypress, spoke regarding Agenda Items No. 1-3.

Beth Culver, Cypress, spoke regarding Agenda Items No. 1-3.

Paul Kokkinos, Cypress, spoke regarding Agenda Items No. 1-3.

Glen Button, Cypress, spoke regarding Agenda Items No. 1-3.

Paulo Morales, Cypress, spoke regarding Agenda Items No. 1-3.

Jon Peat, Cypress, spoke regarding Agenda Items No. 1-3.

Kelly K, Cypress, spoke regarding Agenda Items No. 1-3.

Helen Le, Cypress, spoke regarding Agenda Items No. 1-3.

Mayor Minikus adjusted the order of items to conduct the Public Hearing at the posted 6:00 p.m. start time.

PUBLIC HEARING – 6:00 P.M.

Item No. 4: Conduct a Public Hearing to Take Testimony Regarding the Composition of Potential City Council Election Districts Mayor Minikus opened the Public Hearing.

The City’s consultant, National Demographics Corporation, provided a report on this item.

City Council asked questions of the consultant.

Mayor Minikus invited members of the public to speak on this item.

Tim Keenan, Cypress, spoke regarding potential City Council election districts suggesting districts run east to west.

Bob Youngsma, Cypress, spoke regarding City Manager input on districts.

Wanda Youngsma, Cypress, spoke regarding difficulty using online mapping tool and asked questions regarding map names and who receives submitted maps.

Glenn Button, Cypress, spoke regarding difficulty using the mapping tool and asked questions regarding submission email requirements.

Edwin Kraemer, Cypress, spoke regarding the community of interest of the area adjacent to Lexington Park.

Helen Le, Cypress, thanked consultant for information and asked questions regarding when maps will be reviewed.

Kelly K, Cypress, spoke regarding the difficulty in creating maps that meet criteria requirements.

Esther Poch, Cypress, spoke regarding time allowed to submit maps.

No further comments were made.

The City’s consultant responded to public comments.

City Attorney made comments on the submission of maps.

Mayor Minikus closed the Public Hearing.

No action was taken.

Mayor Minikus recessed the meeting at 7:15 p.m.

Mayor Minikus reconvened the meeting at 7:22 p.m.

ITEMS FROM CITY COUNCIL MEMBERS
Item No. 1: Consider Admonishing Mayor Scott Minikus
Council Member Mallari provided a report on this item.

City Council discussion ensued.

A motion was made by Mayor Pro Tem Peat, and seconded by Council Member Mallari, to admonish Mayor Scott Minikus for statements made at the January 10, 2024, City Council Meeting.

The motion was unanimously carried by the following roll call vote:

AYES: 5 COUNCIL MEMBERS: Burke, Mallari, Marquez, Peat and Minikus NOES: 0 COUNCIL MEMBERS: None
ABSENT: 0 COUNCIL MEMBERS: None
Item No. 2: Discussion of Placing the Consideration of Applying Civility, Conduct, Ethics and Governance Policy sanctions on Mayor Scott Minikus on a Future Agenda
The City Attorney provided procedural guidance on proceeding with Agenda Items No. 2 and 3.

City Council asked questions of the City Attorney.

City Council discussion ensued.

A motion was made by Council Member Burke, and seconded by Mayor Pro Tem Peat, to dismiss Agenda Item No 2 with no action.

The motion was carried by the following roll call vote:

AYES: 4 COUNCIL MEMBERS: Burke, Mallari, Peat, and Minikus NOES: 1 COUNCIL MEMBERS: Marquez
ABSENT: 0 COUNCIL MEMBERS: None
Item No. 3: Discussion of Placing Consideration of Reorganizing the City Council on a Future Agenda
The City Attorney provided procedural guidance on this item.

City Council discussion ensued.

No action was taken.

ADJOURNMENT
Mayor Scott Minikus adjourned the meeting at 8:15 p.m. The next regular meeting will be held on Monday, February 12, 2024, beginning at 5:30 p.m. inside the Executive Board Room.
_______________________________

MAYOR OF THE CITY OF CYPRESS
ATTEST:
___________________________________

CITY CLERK OF THE CITY OF CYPRESS

REGULAR MEETING

CYPRESS CITY COUNCIL
FEBRUARY 12, 2024
3:30 P.M. –Closed Session
5:00 P.M. – General Session
6:00 P.M. – Public Hearing
A regular meeting of the Cypress City Council was called to order at 3:31 p.m. by Mayor Minikus in the Executive Board Room, 5275 Orange Avenue, Cypress, California.

Council Member Frances Marquez

STAFF PRESENT
City Manager Peter Grant
City Attorney Fred Galante
City Clerk Alisha Farnell

ORAL COMMUNICATIONS ON CLOSED SESSION / WORKSHOP ITEMS
None.

CLOSED SESSION
The City Attorney stated that the City Council would convene in Closed Session to discuss the following items:

CONFERENCE WITH LEGAL COUNSEL – EXISTING LITIGATION
Pursuant to Government Code Section 54956.9(d)(1)
Fortis LLP v. Frances Marquez, City of Cypress
Case No. 30-2022-01277792-CU-WM-CJC
Orange County Superior Court
CONFERENCE WITH LEGAL COUNSEL – EXISTING LITIGATION
Pursuant to Government Code Section 54956.9(d)(1)
Youngsma, et al. v. Cypress School District, et al.

Case No. 30-2021-01220176-CU-EI-CXC
Orange County Superior Court
Mayor Minikus recessed the meeting at 3:32 p.m.

RECONVENE
Mayor Minikus reconvened the City Council meeting at 5:03 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
Director of Recreation and Community Services Jeff Draper Chief of Police Mark Lauderback
City Clerk Alisha Farnell
City Engineer Nick Mangkalakiri
INVOCATION Pastor Trevor Cooper, First Baptist Church of Cypress, led the Invocation.

PLEDGE OF ALLEGIANCE Council Member Marquez led the Pledge of Allegiance.

REPORT OF CLOSED SESSION / WORKSHOP
The City Attorney reported that the City Council met in Closed Session and held a discussion regarding the first item listed on the agenda, namely Conference with Legal Counsel – existing litigation, the matter of Fortis LLP v. Frances Marquez. The City Attorney stated Council Member Marquez recused herself from the item and exited the room. The remaining City Council received an update and no further reportable action was taken.

Regarding the second Closed Session item listed on the agenda, namely Conference with Legal Counsel – existing litigation, the matter of Youngsma, et al. v. Cypress School District, et al. The City Attorney stated Mayor Pro Tem Peat rescued herself from the item and exited the room. The remaining City Council received an update and no further reportable action was taken.

PRESENTATIONS
The City Council presented a Key to the City to former Mayor Anna Piercy in recognition of her dedication and service to the Cypress community.

Howard Kummerman from Cypress College Foundation provided an update on the 49th Annual Americana Awards and introduced Cypress Citizen of the Year Jon Peat.

ORAL COMMUNICATIONS ON AGENDA ITEMS
Bob Youngsma, Cypress, spoke regarding Agenda Item No. 9.

Ed Kraemer, Cypress, spoke regarding Agenda Item No. 6.

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.

Council Member Marquez requested to pull Agenda Item No. 4.

A motion was made by Mayor Pro Tem Peat, and seconded by Council Member Mallari, to approve Consent Calendar items No. 1 through 3 and 5 through 8.

The motion was unanimously carried by the following roll call vote:

AYES: 5 COUNCIL MEMBERS: Burke, Mallari, Marquez, Peat and Minikus NOES: 0 COUNCIL MEMBERS: None
ABSENT: 0 COUNCIL MEMBERS: None
Item No. 1: Approve Minutes - Meetings of December 11, 2023, January 8, 2024, January 10, 2024 and January 22, 2024
Recommendation: Approve as submitted.

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 Revisions to the Boards, Commissions and Committees Policy Manual
Recommendation: Adopt a Resolution approving the tenth revision to the Boards, Commissions and Committees Policy Manual.

RESOLUTION NO. 6954

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CYPRESS,

AND ACTING AS EX-OFFICIO GOVERNING BOARD OF DIRECTORS

OF THE CYPRESS RECREATION AND PARK DISTRICT, ADOPTING

THE TENTH REVISION TO THE BOARDS, COMMISSIONS AND

COMMITTEES POLICY MANUAL
Item No. 5: Receive and File the Capital Improvement Program Update Recommendation: Receive and file the Capital Improvement Program update.

Item No. 6: Approve Plans and Specifications and Award Contracts for Residential Street Resurfacing, Project 349
Recommendation:

1. Approve Plans and Specifications for Residential Street Resurfacing, Project 349; and

2. Award a contract to R.J. Noble Company, for $952,610.03, and authorize a contingency of $143,000; and

3. Approve a Task Order for Construction Inspection Services to Ardurra Group Inc., for $126,840, and authorize a contingency of $19,000.

Item No. 7: Receive and File the Fiscal Year 2023-24 Mid-Year Budget Report and Approve Budget Adjustments
Recommendation:

1. Receive and file the FY 2023-24 Mid-Year Budget Report; and

2. Approve mid-year Budget adjustments:

City
a. Increase appropriations in the General Fund by $30,700 b. Increase appropriations in the City Capital Project Fund by $38,600 c. Increase appropriations in the Narcotics Asset Seizure Fund by $15,000 d. Increase appropriations in the Central Services Fund by $39,168 e. Transfer $1,400,000 from the RMRA Gas Tax Fund to the City Capital Project Fund for the annual residential rehabilitation program
f. Transfer $2,350,000 from the General Fund to the Infrastructure Fund g. Transfer $2,350,000 from the General Fund to the Employee Benefits Fund for Pension Trust Investment
h. Approve the receipt of $27,599 from the Park District as partial payment on the outstanding Repayment Agreement and Promissory Note with the City for the construction of Lexington Park
Recreation and Park District
i. Increase appropriations in the General Fund by $42,300 j. Transfer $27,599 from the Park Development Fund to the General Fund k. Approve a $27,599 payment to the City's Infrastructure fund to apply against the outstanding Repayment Agreement and Promissory Note between the City and Park District for the construction of Lexington Park.

Item No. 8: Adopt the FY 2024-25 Budget Calendar
Recommendation: Adopt the Fiscal Year 2024-25 budget calendar.

NEW BUSINESS
Item No. 9: Receive an Update on Trial Court's Decision in the Youngsma et al. v Cypress School District and City of Cypress lawsuit
The City Attorney provided a report on this item.

No action was taken.

ITEMS REMOVED FROM CONSENT CALENDAR
Item No. 4: Adopt the 2024 Federal and State Legislative Platform Council Member Marquez commented on this item.

City Council discussion ensued.

A motion was made by Mayor Pro Tem Peat, and seconded by Council Member Mallari, to adopt the 2024 Federal and State Legislative Platform.

The motion was carried by the following roll call vote:

AYES: 4 COUNCIL MEMBERS: Burke, Mallari, Peat and Minikus NOES: 0 COUNCIL MEMBERS: None
ABSTAIN: 1 COUNCIL MEMBERS: Marquez
Mayor Minikus recessed the meeting at 5:50 p.m.

Mayor Minikus reconvened the meeting at 6:02 p.m.

PUBLIC HEARING – 6:00 P.M.

Item No. 10: Conduct a Public Hearing to Take Testimony Regarding the Composition of Potential City Council Election Districts Mayor Minikus opened the Public Hearing.

The City’s consultant, National Demographic Corporation, provided a presentation on this item.

The City Attorney highlighted legal issues regarding this item.

City Council asked questions of the City Attorney and consultant.

Mayor Minikus invited members of the public to speak on this item.

Kevin Shenkman, Malibu, spoke regarding racial considerations in the composition of districts.

Beth Culver, Cypress, spoke regarding California Voting Rights Act.

Bob Youngsma, Cypress, spoke regarding the number of maps submitted and the need for a map workshop.

Glenn Button, Cypress, spoke regarding draft maps and future population growth.

Marilyn Reames, Cypress, spoke regarding different zip codes and their impact on district maps and future population growth.

Paul Kokkinos, Cypress, spoke regarding the need to make this process easier with a map-drawing workshop.

Brooke Nafarrate, Cypress, spoke regarding data questions with online mapping tool.

Cheryl Bhence, Cypress, spoke regarding redistricting when new census data is available and recommended maps 123,128,129,130 and 131.

Edwin Kraemer, Cypress, spoke regarding communities of interest such as Lexington Park neighborhood and supported maps 101,121 and 130.

Helen Le, Cypress, spoke regarding public hearing process and the need to review key terms at each meeting.

Brittany Cook, Cypress, spoke regarding the need for a map-drawing workshop and expressed support for maps 101,104,105, 116, 118, 119, 121, 124, 130, 131 and opposition for maps 102,112, 120, 122, 123 and 128.

No further comments were made.

Mayor Minikus closed the Public Hearing.

The City’s consultat responded to public comments.

The City Council asked questions of the consultant.

City Council discussion ensued.

No action was taken on this item.

ORAL COMMUNICATIONS
Bob Youngsma, Cypress, spoke regarding the January 22 City Council meeting.

COUNCIL MEMBER REPORTS FROM CITY-AFFILIATED BOARDS AND

COMMITTEES AND REMARKS
Council Member Burke:

No report.

Council Member Marquez:

Thanked the Public Works department for streetlight repair. Spoke regarding a traffic incident that occurred on Via Entrada and Orange Avenue. Congratulated Cypress Girls Soccer, Oxford Academy girls’ soccer and Cypress boys’ basketball on their recent wins.

Council Member Mallari:

Thanked the Recreation Department for creating the home plate sign presented to Anna Piercy. Thanked the City for securing a field at Lexington Park for Oxford Academy girls‘ soccer team. Will be participating in a live fire demonstration at OCFA Headquarters.

Mayor Pro Tem Peat:

Thanked the City and Public Works team for their efforts during the recent storm.

Mayor Minikus:

Thanked City and Public Works and acknowledged Pete Grant, City Manager, and his leadership team for being well prepared during the recent rain. Provided a tour of city hall to second graders from St. Irenaeus. Will be speaking at St. Irenaeus human trafficking walk.

COUNCIL MEMBER ITEMS FOR FUTURE CONSIDERATION
None.

CITY MANAGER REMARKS
Thanked the Recreation and Engineering staff for assisting to create the home plate recognition sign presented to Anna Piercy. Recognized Public Works and Police Departments for doing a great job in preparing for current and future storms. Spoke regarding the City’s ability to provide field space at Lexington Park for Oxford Academy girls’ soccer game. Reminded the public that City administrative offices will be closed on President’s Day.

The City Attorney spoke regarding Oral Communications.

Council Member Mallari asked questions of the City Attorney regarding communication with the community regarding the map-drawing process.

ADJOURNMENT – IN MEMORY OF ROBERT CAMPBELL
By motion of Council Member Mallari, and seconded by Council Member Burke, the Mayor adjourned the meeting at 8:07 p.m. The next regular meeting will be held on Monday, February 26, 2024, beginning at 5:30 p.m. inside the Executive Board Room. _______________________________

MAYOR OF THE CITY OF CYPRESS
ATTEST:
___________________________________

CITY CLERK OF THE CITY OF CYPRESS

SPECIAL MEETING

CYPRESS CITY COUNCIL
FEBRUARY 20, 2024
3:00 P.M.

A special meeting of the Cypress City Council was called to order at 3:00 p.m. by Mayor Minikus in the Council Chambers, 5275 Orange Avenue, Cypress, California.

Council Member Frances Marquez

STAFF PRESENT
City Manager Peter Grant
Assistant City Attorney Yecenia Vargas
Planning Director Alicia Velasco
City Clerk Alisha Farnell

ORAL COMMUNICATIONS ON CLOSED SESSION/ WORKSHOP ITEMS
(Limited to 30 minutes – three minutes per speaker. The City Council may adjust the time allotted per speaker.)
Bob Youngsma, Cypress, spoke regarding workshop timing and public attendance.

WORKSHOP SESSION
Housing Element Implementation Ballot Measure Education, Outreach and Communication Update
The Planning Director provided a presentation on this item.

City Council discussion ensued.

No action was taken.

CLOSED SESSION
The Assistant City Attorney announced that the City Council would convene in Closed Session to discuss the following item:

CONFERENCE WITH LABOR NEGOTIATOR
Pursuant to Government Code Section 54957.6
Agency Negotiators: City Manager and Director of Finance and Administrative Services Employee Groups: Cypress Employees’ Association, Cypress Maintenance Employees’ Association
Mayor Minikus recessed the meeting at 4:04 p.m.

RECONVENE
Mayor Minikus reconvened the public meeting in the Executive Board Room at 5:04 p.m.

REPORT OF CLOSED SESSION
The Assistant City Attorney stated that the City Council met in Closed Session and held a discussion on the item listed on the Closed Session agenda, Conference with Labor Negotiator concerning the employee groups Cypress Employees’ Association and Cypress Maintenance Employees’ Association. She stated the City Council received an update and no further reportable action was taken.

ADJOURNMENT
Mayor Scott Minikus adjourned the meeting at 5:05 p.m. The next regular meeting will be held on Monday, February 26, 2024, beginning at 5:30 p.m. inside 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 3.

FROM: Alicia Velasco, Planning Director
DATE: 03/11/2024
SUBJECT: Certify Special Assessments Against 5321 Marion Avenue and 5692 Karen Avenue for the Collection of Nuisance Abatement Costs

RECOMMENDATION
Adopt a Resolution certifying special assessments against 5321 Marion Avenue (APN 241-171-03) and 5692 Karen Avenue (APN 244-512-17) for collection of delinquent nuisance abatement costs.

DISCUSSION
Municipal Code Section 13-20 authorizes special assessments against a property to collect nuisance abatement costs. On August 1, 2023, the City removed junk, trash and debris in public view from 5321 Marion Avenue at a cost of $2,944.50; and on November 9, 2023, the City abated nuisance landscaping in the front and side yard at 5692 Karen Avenue at a cost of $1,910.15
The property owners have not responded to the City's repeated attempts to collect the abatement costs and have been notified the City will place a special assessment on each property. The City sent each property owner a notice by certified mail, regular mail and email that provided them the option to pay or appeal the assessment. Neither property owner responded to the notices.

The Orange County Auditor-Controller requires the City Council adopt the attached Resolution to place special assessments on the property tax bills: Assessor’s Parcel Number 241-171-03 (5321 Marion Avenue) and 244-512-17 (5692 Karen Avenue).

BUDGET IMPACT
The special assessments will recover $4,854.65 in the General Fund.

LEGAL REVIEW
None required.

APPROVED BY: Peter Grant, City Manager
Attachments
Resolution
RESOLUTION NO. ______

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CYPRESS

CERTIFYING SPECIAL ASSESSMENTS FOR COLLECTING DELINQUENT CITY

NUISANCE ABATEMENT COSTS FOR NUISANCE VIOLATIONS OF THE MUNICIPAL CODE
WHEREAS, the City Council has adopted Cypress Municipal Code (“CMC”) sections 13-20(a-d), authorizing the City to keep a record of expenses, including administrative and legal costs, incurred by the City in its removal of the nuisance and provide notice to the Property Owner of the costs owed to the City, with an opportunity to appeal the assessment of a lien of City’s abatement costs of the property-related nuisance violations of the CMC; and
WHEREAS, under CMC section 13-20(d), the City may enter a special assessment against the parcel of property in order to collect the cost of abatement, and transmit it to the County assessor and tax collector for inclusion on tax rolls; and WHEREAS, to compel code compliance, the City may seek to abate the nuisance and collect the costs incurred by means of a special assessment against the property where a property-related violation occurred as part of the nuisance abatement procedures authorized by Government code section 38773.5 and CMC section 13-20(d); and WHEREAS, the City Council desires to certify certain-property related nuisance abatement costs as delinquent and have them collected as a special assessment against the real property involved, for collection in the same manner as ordinary municipal ad valorem taxes, as provided in Section 38773.5 of the Government Code.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CYPRESS DOES FIND, DETERMINE, AND RESOLVE AS FOLLOWS:

Section 1. The foregoing recitals are true and correct and are hereby incorporated within this Resolution.

Section 2. The special assessments designated in “Exhibit A,” which is attached and incorporated herein by this reference, are hereby certified as being delinquent fines, penalties, and abatement costs owing to the City of Cypress and qualified for collection as special assessments under CMC section 13-20(d).

Section 3. The City Council, as part of the City’s nuisance abatement, program orders that these delinquent fines, penalties, and costs of abatement be collected as special assessments against the respective properties shown in “Exhibit A” pursuant to the provisions of CMC section 13-20(d) and Government Code section 38773.5.

Section 4. The City Council of the City of Cypress orders a copy of this resolution to be transmitted to the Orange County Treasurer-Tax Collector, who shall enter the amounts of the respective assessments against the respective parcels of land as they appear in the current assessment roll, and shall collect said assessments at the same time in the same manner as ordinary municipal ad valorem taxes, as provided in Section 38773.5 of the Government Code.

Section 5. The costs against any parcel of land listed in Exhibit “A” attached hereto shall be deemed discharged and released upon payment for said parcel of the property taxes for the above-referenced fiscal year.

PASSED, APPROVED AND ADOPTED by the City Council of the City of Cypress at a regular meeting held on the 11th day of March, 2024.

Scott Minikus, Mayor
ATTEST:

Alicia Farnell, City Clerk

STATE OF CALIFORNIA )

COUNTY OF ORANGE ) SS
I, ALICIA FARNELL, City Clerk of the City of Cypress, DO HEREBY CERTIFY that the foregoing Resolution was duly adopted at a regular meeting of the said City Council held on the 11th day of March, 2024, by the following roll call vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

Alicia Farnell, City Clerk
EXHIBIT “A”
List of Costs of Abatement and Respective Parcel of Land Parcel
Number Property Address Owner of Record
Amount of
Cost of
Abatement
241-171-
03 5321 Marion Avenue,
Cypress, CA 90630
Shirley S. Marquez Trust $2,944.50
244-512-
17 5692 Karen Avenue,
Cypress, CA 90630
Dennis C Buhrmann & Cheryl
A Buhrmann $1,910.15
CITY OF CYPRESS
CITY COUNCIL REPORT
City Council Regular 4.

FROM: Matt Burton, Director of Finance and Administrative Services DATE: 03/11/2024
SUBJECT: Receive and File the Annual Comprehensive Financial Report for the Fiscal Year Ended June 30, 2023

RECOMMENDATION
Receive and file the Annual Comprehensive Financial Report for the Fiscal Year Ended June 30, 2023.

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, 2023. 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 on 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 of financial 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 37 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 2022-23 award consideration.

BUDGET IMPACT
Sufficient amounts are included in the General Fund budget to pay for the cost of the annual audit and ACFR preparation.

LEGAL REVIEW
None required.

APPROVED BY: Peter Grant, City Manager
Attachments
Annual Comprehensive Financial Report for the Fiscal Year Ended June 30, 2023 City of Cypress
California
ANNUAL

COMPREHENSIVE

FINANCIAL
REPORT
For the Fiscal Year
Ended June 30, 2023 EndedJune30,20
For the Fiscal Year
Ended June 30, 2023
ANNUAL

COMPREHENSIVE

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

PROGRESS
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CITY OF CYPRESS
Annual Comprehensive Financial Report
For the Year Ended June 30, 2023
Table of Contents
Page
Numbers

INTRODUCTORY SECTION
Letter of Transmittal .............................................................................................................................................. i Directory of City Officials .................................................................................................................................... vii Organizational Chart .......................................................................................................................................... viii GFOA Certificate of Achievement for Excellence in Financial Reporting ............................................................ ix

FINANCIAL SECTION
Independent Auditors’ Report .............................................................................................................................. 1 Management's Discussion and Analysis ............................................................................................................ 5 Basic Financial Statements
Government Wide Financial Statements
Statement of New Position ................................................................................................................... 29 Statements of Activities and Changes in Net Position ......................................................................... 30 Fund Financial Statements
Balance Sheet – Governmental Funds ................................................................................................ 32 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position .......... 35 Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds ...... 36 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances Of Governmental Funds to the Statement of Activities ........................................................................ 38 Statement of Net Position – Proprietary Funds .................................................................................... 39 Statement of Revenues, Expenses, and Changes in Net Position – Proprietary Funds ..................... 40 Statement of Cash Flows – Proprietary Funds ..................................................................................... 41 Statement of Fiduciary Net Position – Fiduciary Funds ....................................................................... 42 Statement of Changes in Fiduciary Net Position – Fiduciary Funds .................................................... 43 Notes to Basic Financial Statements .................................................................................................... 45

CITY OF CYPRESS
Annual Comprehensive Financial Report
For the Year Ended June 30, 2023
Table of Contents
Page
Numbers
Required Supplementary Information
Notes to Required Supplementary Information .................................................................................... 91 Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual – General Fund ........................................................................................................................................ 92 Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual – Recreation and Park District Special Revenue Fund ........................................................................... 93 Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual – Streets Special Revenue Fund ............................................................................................................. 94 Schedule of Changes in Net Pension Liability and Related Ratios ...................................................... 95 Schedules of Proportionate Share of Net Pension Liability .................................................................. 96 Schedule of Changes in Net OPEB Liability and Related Ratios ......................................................... 98 Schedules of Plan Contributions ........................................................................................................ 100 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 .................................................................................................................. 104 Nonmajor Governmental Funds
Combining Balance Sheet .................................................................................................................. 106 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ......................... 110 Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual – Local Drainage and Special Revenue .............................................................. 113 Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual – Stanton Channel Maintenance District Special Revenue Fund ......................................................... 114

CITY OF CYPRESS
Annual Comprehensive Financial Report
For the Year Ended June 30, 2023
Table of Contents
Page
Numbers
Nonmajor Governmental Funds (Continued)
Schedule of Revenues, Expenditures and Changes in Fund Balances -Budget and ActualLighting District Special Revenue Fund ............................................................................................. 115 Schedule of Revenues, Expenditures and Changes in Fund Balances -Budget and ActualCATV PEG Grant Special Revenue Fund .......................................................................................... 116 Schedule of Revenues, Expenditures and Changes in Fund Balances -Budget and ActualAB 2766 Special Revenue Fund ........................................................................................................ 117 Schedule of Revenues, Expenditures and Changes in Fund Balances -Budget and ActualTraffic Safety Special Revenue Fund ................................................................................................. 118 Schedule of Revenues, Expenditures and Changes in Fund Balances -Budget and ActualSupplemental Law Enforcement Special Revenue Fund ................................................................... 119 Schedule of Revenues, Expenditures and Changes in Fund Balances -Budget and ActualNarcotics Asset Seizure Special Revenue Fund ................................................................................ 120 Schedule of Revenues, Expenditures and Changes in Fund Balances -Budget and ActualLow and Moderate Housing Assets Special Revenue Fund .............................................................. 121 Schedule of Revenues, Expenditures and Changes in Fund Balances -Budget and ActualPandemic Response Fund ................................................................................................................. 122 Internal Service Funds
Combining Statement of Net Position................................................................................................. 124 Combing Statement of Revenues, Expenses and Changes in Net Position ...................................... 126 Combining Statement of Cash Flows ................................................................................................. 128 Fiduciary Funds
Combining Statement of Fiducial Net Position – Custodial Funds ..................................................... 132 Combining Statement of Changes in Fiduciary Net Position – Custodial Funds ............................... 133

CITY OF CYPRESS
Annual Comprehensive Financial Report
For the Year Ended June 30, 2023
Table of Contents
Page
Numbers

STATISTICAL SECTION
Statistical Section Index
Financial Trends
Schedule 1 - Net Position by Component .......................................................................................... 138 Schedule 2 - Changes in Net Position ................................................................................................ 140 Schedule 3 - Fund Balances – Governmental Funds......................................................................... 142 Schedule 4 - Changes in Fund Balances – Governmental Funds ..................................................... 144 Revenue Capacity
Schedule 5 - Assessed Value and Estimated Actual Value of Taxable Property .............................. 146 Schedule 6 - Direct and Overlapping Property Tax Rates ................................................................. 147 Schedule 7 - Principal Property Tax Payers ....................................................................................... 148 Schedule 8 - Property Tax Levies and Collections ............................................................................. 149 Debt Capacity
Schedule 9 - Ratios of Outstanding Debt by Types ........................................................................... 150 Schedule 10 - Direct and Overlapping Governmental Activities Debt ................................................ 151 Schedule 11 - Legal Debt Margin Information .................................................................................... 152 Demographic and Economic Information
Schedule 12 - Demographic and Economic Statistics........................................................................ 154 Schedule 13 - Principal Employers ..................................................................................................... 155 Operating Information
Schedule 14 - Full-time Equivalent City Government Employees by Function/Program ................... 156 Schedule 15 - Operating Indicators by Function/Program ................................................................. 157 Schedule 16 - Capital Assets Statistics by Function/Program ........................................................... 158 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 ..................................................................................................................... 159 February 22, 2024
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, 2023. 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, 2023. The goal of the independent audit is 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, 2023 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. i
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, 2023, less than $750,000 was expended on Federal financial assistance programs and a single audit was not required.

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 49,818. 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.

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. ii
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 generated a significant percentage of City 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.

The local economy in Orange County has experienced strong economic growth and job creation for well over a decade. While the pandemic brought great economic uncertainties, the local economy proved resilient. The negative toll on Cypress’ revenue base was far less than feared, but the long-term economic impacts and the ongoing recovery period from the pandemic, will continue to be felt in the Orange County region for the foreseeable future.

The City has been financially vigilant and focused on building up its reserves and limiting growth in operations in order to be in a position to effectively handle periods of uncertainty.

This strategy has served Cypress well in the past decade as the City has been able to keep a balanced budget while maintaining service levels. Property taxes remain a stable source of income, while sales tax revenues are more volatile and unpredictable. Sales tax concerns exist due to relying on a small number of businesses to generate the majority of sales tax receipts, and experiencing significant revenue declines over the last fifteen years (when iii
compared to inflation). City leaders will continue to monitor revenue trends to best determine methods for strengthening the City’s economic base.

Ongoing volatility in the financial markets 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). Substantial decreases in value of CalPERS assets during periods of financial instability, combined with changes in actuarial assumptions and the discount rates to strengthen the pension system over the long-term, have been passed on to members of CalPERS in the form of higher payments for the foreseeable future. Cypress, like most other California cities, has seen its annual required contributions nearly double over the last six years.

In the last few years, inflation has taken center stage as the latest threat to the City’s financial health. The potential impacts to City expenditures cannot be overstated, as cost increases for all City services and projects have outpaced revenue growth and are expected to continue to do so.

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 $13.9 million has been accumulated in the General fund for contingencies and budget stabilization at June 30, 2023. In addition, a pension trust was established in 2017 in response to pension and budget stabilization concerns, and $23.0 million is invested in the trust at June 30, 2023. 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 remains fiscally responsible with regards to budget decisions in the future, accumulated fund balance and net position amounts are at a level which should allow the City to withstand negative short-term 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 high-level of services currently offered to its residents and businesses is uncertain due to economic instability and risk of recession, inflation, sales tax volatility and rising pension costs.

Another ongoing financial challenge remains funding the necessary maintenance and improvements required for the City’s facilities and infrastructure systems. The seven-year capital 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 quarter century by way of improvements and setting aside reserves, there are still a significant number of necessary investments 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 additional revenue sources to achieve the City’s goal of maintaining its infrastructure systems and facilities at high standards. One of the largest concerns iv
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. Due to all the uncertainties discussed previously regarding the City’s long-term financial health, 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 2023 through 2026 include the following (not in priority order):
x Maintain financial stability and promote economic activity. x Maintain high quality and high value services for the community. x Maintain infrastructure and facilities.
x Enhance and maintain public safety.
x Enhance recreation facilities and programs.

The City’s pursuit of these goals is achieved by establishing strategic objectives, which are incorporated into the annual budget. Most of the identified strategic objectives were completed during the past year and included rolling out a new online budget book, replacing the City’s telephone system with cloud-based technology, developing plans for the reconstruction of Arnold Cypress Park, initiating housing element implementation and associated public outreach, presenting options to accelerate pension trust funding to further offset CalPERS pension plan unfunded actuarial liabilities, implementing the first phase of the pandemic recovery plan’s business recovery and support program, and approving an agreement for security upgrades at city facilities.

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 factors discussed in detail earlier, the ability to continue setting aside sufficient General fund amounts to meet future capital needs will become increasingly difficult in the coming 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. Despite seeing improvements in the most recent forecast brought on by higher interest earnings, Cypress remains dogged by a modest, stubborn structural deficit. While these deficits are expected to be manageable, future challenges (both those that we are aware of and those that are currently unknown) make it difficult to create a five-year forecast that can be relied on with confidence.
v

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 Cypress for its Annual Comprehensive Financial Report for the fiscal year ended June 30, 2022. This is the 37th 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 and I want to extend my thanks to all the Finance staff involved in the process. Appreciation must also be extended to the Cypress City Council for their ongoing commitment to fiscal prudence and helping to put the City in a positon to be financially prepared for unforeseen challenges. This strategic approach has greatly benefited Cypress residents and businesses through the years and will continue to do so as new threats to the City’s fiscal stability evolve. 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 continues to be strong and it remains the highest priority so that Cypress will be able to thrive for generations to come.

Respectfully submitted,
Matt Burton
Director of Finance and Administrative Services
vi
Directory of
City Officials
City of Cypress, California
For the FiscalYear Ended June 30, 20
Legislative Body
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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
viii
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, 2022
Executive Director/CEO
ix

PROGRESS
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PROGRESS
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24422 Avenida de la Carlota, Suite 275
Laguna Hills, CA 92653
(949) 829-8299
www.lslcpas.com
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47 CITY OF CYPRESS
Notes to the Financial Statements
For the Year Ended June 30, 2023
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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 use the economic resources measurement focus and are used to report fiduciary activities in which the City acts as an agent. 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.

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.
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94 CITY OF CYPRESS
Schedule of Changes in Net Pension Liability and Related Ratios Miscellaneous Plan
As of June 30, for the Last Ten Fiscal Years
2018 2017 2016 2015
Measurement Date 6/30/2017 6/30/2016 6/30/2015 6/30/2014

TOTAL PENSION LIABILITY
Service cost $ 1,042,402 1,241,908 $ 983,336 $ $ 1,067,782 Interest on total pension liability 5,227,927 5,374,496 4,985,622 4,778,432 Changes of assumptions - 4,509,183 (1,246,317) -
Difference between expected and actual experience 177,725 (726,719) (249,155) - 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 69,194,323 72,533,703 67,629,844 64,573,441 Total pension liability-ending (a) 79,393,850 72,533,703 69,194,323 67,629,844

PLAN FIDUCIARY NET POSITION
Contributions-employer 1,242,386 1,298,683 997,118 859,007 Contributions-employee 552,260 622,404 529,141 529,155
Net investment income 274,070 6,191,774 1,253,565 8,456,694 Benefit payments, including refunds of employee
contributions (3,538,721) (3,108,674) (2,909,007) -
Net plan to plan resource movement - - (406) (2,789,811) Administrative expense (34,153) (81,255) (63,073) -
Net change in fiduciary net position 4,422,741 (1,003,967) (192,662) 7,055,045 Plan fiduciary net position-beginning 56,038,979 55,035,012 56,231,641 49,176,596 Plan fiduciary net position-ending (b) 59,457,753 55,035,012 56,038,979 56,231,641 Net pension liability/(asset) (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 74.9% 75.9% 81.0% 83.1%
Covered payroll $ 7,139,555 6,994,962 $ 6,359,007 $ $ 6,744,885 Plan net pension liability/(asset) as a percentage of
covered payroll 285.0% 245.1% 206.9% 169.0%
Notes to Schedule of Changes in the Net Pension Liability and Related Ratios:

Changes in Assumptions:

Fiscal year ended June 30, 2016:

Fiscal year ended June 30, 2018:

The discount rate was reduced from 7.65% to 7.15%.

Fiscal year ended June 30, 2019:

Benefit Changes : There were no changes to benefits.

Demographic assumptions and the inflation rate were changed in accordance with the CalPERS Experience Study and Review of Actuarial Assumptions - December 2017.

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).
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Refer to notes to basic financial statements.
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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.

The City's CalPERS Safety Plan's 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.

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. 7HUPLQDWHG2UDQJH&RXQW\(PSOR\HHV5HWLUHPHQW6\VWHP3ODQ 2&(56

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1 Fiscal year 2018 was the first year of GASB Statement No. 75 implementation; therefore only six years are shown.

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1$ 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. Refer to notes to basic financial statements.

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. 0LVFHOODQHRXV&RVW6KDULQJ0XOWLSOH(PSOR\HU3HQVLRQ3ODQ 6DIHW\&RVW6KDULQJ0XOWLSOH(PSOR\HU3HQVLRQ3ODQ
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123

CITY OF CYPRESS
Combining Statement of Net Position
Internal Service Funds
June 30, 2023
Assets:

Current:

Cash and investments $ 21,253,220 $ 686,161 $ 5,555,175 $ 2,257,280 Receivables:

Accounts 460 - 196,385 -
Accrued interest - - 31,715 -
Prepaid items 18,088 - - -
Inventory 10,073 - - -
Restricted:

Cash with fiscal agent - - 23,046,407 -
Total Current Assets 21,281,841 686,161 28,829,682 2,257,280 Noncurrent:

Construction in Progress 242,900 - - -
Capital assets - net of accumulated depreciation/amortization 3,305,791 407,537 - - Total Noncurrent Assets 3,548,691 407,537 - -
Total Assets 24,830,532 1,093,698 28,829,682 2,257,280
Deferred Outflows of Resources:

Deferred amount from PERS pension plans - - 26,970,953 - Deferred amount from OPEB - - 1,028,986 -
Deferred amount from OCERS pension plan - - 432,375 -
Total Deferred Outflows of Resources - - 28,432,314 -
Liabilities:

Current:

Accounts payable 166,932 - 27,406 -
Unearned revenues - - 702 -
Subscriptions 124,556 - - -
Accrued compensated absences - - 608,520 -
Accrued claims and judgments - - - 50,435
Total Current Liabilities 291,488 - 636,628 50,435
Noncurrent:

Subscriptions 534,335 - - -
Accrued compensated absences - - 1,824,747 -
Accrued claims and judgments - - - 151,305
Retiree's health payable - - 9,178,932 -
Net pension liability - - 61,876,486 -
Total Noncurrent Liabilities 534,335 - 72,880,165 151,305 Total Liabilities 825,823 - 73,516,793 201,740
Deferred Inflows of Resources:

Deferred amount from PERS pension plans - - 5,070,484 - Deferred amount from OCERS pension plan - - 37,384 -
Deferred amount from OPEB - - 1,898,143 -
Total Deferred Inflows of Resources - - 7,006,011 -
Net Position:

Investment in capital assets 2,889,800 407,537 - -
Restricted for PARS trust - - 23,046,407 -
Unrestricted 21,114,909 686,161 (46,307,215) 2,055,540
Total Net Position 24,004,709 1,093,698 (23,260,808) 2,055,540 Total Liabilities, Deferred Inflows of Resources, and Net Position 24,830,532 $ 1,093,698 $ 57,261,996 $ 2,257,280 $ Governmental Activities - Internal Service Funds
Central
Services
Recreation
District Central
Services
Employees'
Benefit
Liability
Insurance
124

CITY OF CYPRESS
Combining Statement of Net Position
Internal Service Funds
June 30, 2023
Assets:

Current:

Cash and investments
Receivables:

Accounts
Accrued interest
Prepaid items
Inventory
Restricted:

Cash with fiscal agent
Total Current Assets
Noncurrent:

Construction in Progress
Capital assets - net of accumulated depreciatio
Total Noncurrent Assets
Total Assets
Deferred Outflows of Resources:

Deferred amount from PERS pension plans
Deferred amount from OPEB
Deferred amount from OCERS pension plan
Total Deferred Outflows of Resources
Liabilities:

Current:

Accounts payable
Unearned revenues
Subscriptions
Accrued compensated absences
Accrued claims and judgments
Total Current Liabilities
Noncurrent:

Subscriptions
Accrued compensated absences
Accrued claims and judgments
Retiree's health payable
Net pension liability
Total Noncurrent Liabilities
Total Liabilities
Deferred Inflows of Resources:

Deferred amount from PERS pension plans
Deferred amount from OCERS pension plan
Deferred amount from OPEB
Total Deferred Inflows of Resources
Net Position:

Investment in capital assets
Restricted for PARS trust
Unrestricted
Total Net Position
Total Liabilities, Deferred Inflows of Resourc
Totals
$ 33,168,158 3,416,322 $
30,340 227,185
- 31,715
- 18,088
- 10,073
- 23,046,407
3,446,662 56,501,626
- 242,900
- 3,713,328
- 3,956,228
3,446,662 60,457,854
- 26,970,953
- 1,028,986
- 432,375
- 28,432,314
461 194,799
- 702
- 124,556
- 608,520
486,033 536,468
486,494 1,465,045
- 534,335
- 1,824,747
1,458,099 1,609,404
- 9,178,932
- 61,876,486
1,458,099 75,023,904
1,944,593 76,488,949
- 5,070,484
- 37,384
- 1,898,143
- 7,006,011
- 3,297,337
- 23,046,407
1,502,069 (20,948,536)
1,502,069 5,395,208
$ 88,890,168 3,446,662 $
Workers'
Compensation
Governmental Activities -
Internal Service Funds
125

CITY OF CYPRESS
Combining Statement of Revenues, Expenses
and Changes in Fund Net Position
Internal Service Funds
Year Ended June 30, 2023
Operating Revenues:

Charges for services $ 3,788,294 $ 67,400 $ 14,601,126 $ 617,000 Miscellaneous 11,757 - - 5,204
Total Operating Revenues 3,800,051 67,400 14,601,126 622,204 Operating Expenses:

Personnel services 1,254,136 - - -
Contractual services 222,803 9,193 3,743,387 -
Supplies and other services 1,189,544 - 4,363,850 453,897 Claims payments and changes in estimates - - - 53,205
Depreciation/amortization expense 790,217 54,868 - -
Total Operating Expenses 3,456,700 64,061 8,107,237 507,102 Operating Income (Loss) 343,351 3,339 6,493,889 115,102 Nonoperating Revenues (Expenses):

Interest income (expense) (272) - 1,163,026 -
Gain (loss) on disposal of capital assets 32,478 - - -
Total Nonoperating
Revenues (Expenses) 32,206 - 1,163,026 -
Income (Loss) Before Transfers 375,557 3,339 7,656,915 115,102 Transfers in 115,883 103,411 1,900,000 -
Transfers out - - - (1,030,280)
Changes in Net Position 491,440 106,750 9,556,915 (915,178) Net Position:

Beginning of Year 23,513,269 986,948 (32,817,723) 2,970,718 End of Fiscal Year $ 24,004,709 $ 1,093,698 $ (23,260,808) $ 2,055,540 Governmental Activities - Internal Service Funds
Central
Services
Recreation
District Central
Services
Employees'
Benefit
Liability
Insurance
126

CITY OF CYPRESS
Combining Statement of Revenues, Expenses
and Changes in Fund Net Position
Internal Service Funds
Year Ended June 30, 2023
Operating Revenues:

Charges for services
Miscellaneous
Total Operating Revenues
Operating Expenses:

Personnel services
Contractual services
Supplies and other services
Claims payments and changes in estimates
Depreciation/amortization expense
Total Operating Expenses
Operating Income (Loss)
Nonoperating Revenues (Expenses):

Interest income (expense)
Gain (loss) on disposal of capital assets
Total Nonoperating
Revenues (Expenses)
Income (Loss) Before Transfers
Transfers in
Transfers out
Changes in Net Position
Net Position:

Beginning of Year
End of Fiscal Year
Totals
$ 19,843,408 769,588 $
231,377 248,338
1,000,965 20,091,746
23,540 1,277,676
207,846 4,183,229
207,510 6,214,801
154,879 208,084
- 845,085
593,775 12,728,875
407,190 7,362,871
- 1,162,754
- 32,478
- 1,195,232
407,190 8,558,103
1,000,000 3,119,294
- (1,030,280)
1,407,190 10,647,117
94,879 (5,251,909)
$ 5,395,208 1,502,069 $
Governmental Activities -
Internal Service Funds
Workers'
Compensation
127

CITY OF CYPRESS
Combining Statement of Cash Flows
Internal Service Funds
Year Ended June 30, 2023
Cash Flows from Operating Activities:

Cash received from customers and users $ 67,400 3,801,255 $ 15, $ 076,628 $ 622,204 Cash paid to suppliers for goods and services (1,363,210) (9,193) (8,245,389) (453,897) Cash paid to employees for services (1,306,852) - (6,826,676) (47,559) Net Cash Provided (Used) by Operating Activities 1,131,193 58,207 4,563 120,748 Cash Flows from Non-Capital
Financing Activities:

Cash transfers out - - - (1,030,280)
Cash transfers in 115,883 103,411 1,900,000 -
Net Cash Provided (Used) by
Non-Capital Financing Activities 115,883 103,411 1,900,000 (1,030,280) Cash Flows from Capital
and Related Financing Activities:

Acquisition and construction of capital assets (761,800) (178,168) - - Proceeds from sales of capital assets 56,486 - - -
Net Cash Provided (Used) by
Capital and Related Financing Activities (705,314) (178,168) - - Cash Flows from Investing Activities:

Interest received (272) - 1,139,261 -
Net Cash Provided (Used) by
Investing Activities (272) - 1,139,261 -
Net Increase (Decrease) in Cash
and Cash Equivalents 541,490 (16,550) 3,043,824 (909,532) Cash and Cash Equivalents at Beginning of Year 20,711,730 702,711 25,557,758 3,166,812 Cash and Cash Equivalents at End of Year $ 21,253,220 $ 686,161 $ 28,601,582 $ 2,257,280 Reconciliation of Operating Income to Net Cash
Provided (Used) by Operating Activities:

Operating income (loss) $ 343,351 $ 3,339 $ 6,493,889 $ 115,102 Adjustments to reconcile operating income (loss)
net cash provided (used) by operating activities:

Depreciation/amortization 790,217 54,868 - -
(Increase) decrease in accounts receivable 1,204 - 474,800 - (Increase) decrease in inventories (5,176) - - -
(Increase) decrease in prepaid expense 23,654 - 8,010 - Increase (decrease) in accounts payable 30,659 - (146,162) - Increase (decrease) in accrued liabilities (52,716) - (101,968) - (Increase) decrease in pension-related deferred outflows - - (14,425,706) - (Increase) decrease in pension-related deferred inflows - - (21,794,796) - (Increase) decrease in pension-related liability - - 29,242,800 - (Increase) decrease in OPEB-related deferred outflows - - 224,313 - (Increase) decrease in OPEB-related deferred inflows - - (163,245) - (Increase) decrease in OPEB-related liability - - 163,865 - (Increase) decrease in unearned revenue - - 702 -
Increase (decrease) in claims and judgments - - - 5,646 Increase (decrease) in compensated absences - - 28,061 - Total Adjustments 787,842 54,868 (6,489,326) 5,646
Net Cash Provided (Used) by
Operating Activities $ 1,131,193 $ 58,207 $ 4,563 $ 120,748 Non-Cash Investing, Capital, and Financing Activities:

Gain/(Loss) on disposition of capital assets 24,009 $ - $ - $ - $ Governmental Activities - Internal Service Funds
Central
Services
Recreation
District Central
Services
Employees'
Benefit
Liability
Insurance
128

CITY OF CYPRESS
Combining Statement of Cash Flows
Internal Service Funds
Year Ended June 30, 2023
Cash Flows from Operating Activities:

Cash received from customers and users
Cash paid to suppliers for goods and services
Cash paid to employees for services
Net Cash Provided (Used) by Operating Activities
Cash Flows from Non-Capital
Financing Activities:

Cash transfers out
Cash transfers in
Net Cash Provided (Used) by
Non-Capital Financing Activities
Cash Flows from Capital
and Related Financing Activities:

Acquisition and construction of capital assets
Proceeds from sales of capital assets
Net Cash Provided (Used) by
Capital and Related Financing Activities
Cash Flows from Investing Activities:

Interest received
Net Cash Provided (Used) by
Investing Activities
Net Increase (Decrease) in Cash
and Cash Equivalents
Cash and Cash Equivalents at Beginning of Year
Cash and Cash Equivalents at End of Year
Reconciliation of Operating Income to Net Cash
Provided (Used) by Operating Activities:

Operating income (loss)
Adjustments to reconcile operating income (loss)
net cash provided (used) by operating activities:

Depreciation/amortization
(Increase) decrease in accounts receivable
(Increase) decrease in inventories
(Increase) decrease in prepaid expense
Increase (decrease) in accounts payable
Increase (decrease) in accrued liabilities
(Increase) decrease in pension-related deferred outflows (Increase) decrease in pension-related deferred inflows (Increase) decrease in pension-related liability
(Increase) decrease in OPEB-related deferred outflows
(Increase) decrease in OPEB-related deferred inflows
(Increase) decrease in OPEB-related liability
(Increase) decrease in unearned revenue
Increase (decrease) in claims and judgments
Increase (decrease) in compensated absences
Total Adjustments
Net Cash Provided (Used) by
Operating Activities
Non-Cash Investing, Capital, and Financing Activities:

Gain/(Loss) on disposition of capital assets
Totals
$ 973,121 $ 20,540,608
(572,222) (10,643,911)
(374,564) (8,555,651)
26,335 1,341,046
- (1,030,280)
1,000,000 3,119,294
1,000,000 2,089,014
- (939,968)
- 56,486
- (883,482)
- 1,138,989
- 1,138,989
1,026,335 3,685,567
2,389,987 52,528,998
$ 3,416,322 $ 56,214,565
$ 7, 407,190 $ 362,871
- 845,085
(27,844) 448,160
- (5,176)
- 31,664
(1,987) (117,490)
(835) (155,519)
- (14,425,706)
- (21,794,796)
- 29,242,800
- 224,313
- (163,245)
- 163,865
- 702
(87,547) (81,901)
(262,642) (234,581)
(380,855) (6,021,825)
$ 1, 26,335 $ 341,046
$ 24,009 - $
Workers'
Compensation
Governmental Activities -
Internal Service Funds
129

PROGRESS
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130
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131

CITY OF CYPRESS
Combing Statement of Net Position
Custodial Funds
June 30, 2023
Assets:

Cash and cash equivalents $ - $ 4,051,791 $ 4,051,791
Receivables:

Accounts - 20,043 20,043
Interest - 33,860 33,860
Prepaid items - 20,614 20,614
Total Assets - 4,126,308 4,126,308
Liabilities:

Current liabilities:

Accounts payable - 63,322 63,322
Unearned revenues - 39,131 39,131
Due to other governments - 987,005 987,005
Accrued leave payable - 78,253 78,253
Total current liabilities: - 1,089,458 1,089,458
Nonurrent liabilities:

Retirees' health payable - 918,751 918,751
Accrued leave payable - 234,761 234,761
Total noncurrent liabilities: - 1,153,512 1,153,512
Total Liabilities - 2,321,223 2,321,223
Net Position:

Restricted for member agencies - 1,805,085 1,805,085
Total Net Position $ - $ 1,805,085 $ 1,805,085
Total Custodial
Funds
Business and
Professional Center
Assessment
District
West Cities Police
Communications
Center Joint
Powers Authority
132

CITY OF CYPRESS
Combining Statement of Changes in Fiduciary Net Position Custodial Funds
Year Ended June 30, 2023
Additions:

Contributions:

Investment Income $ 557 $ 103,339 $ 103,896
Member contributions - 3,104,429 3,104,429
Other Revenue - 154,507 154,507
Total Additions 557 3,362,275 3,362,832
Deductions:

Dispatch services - 3,014,656 3,014,656
Debt service 4,845 - 4,845
Other expenses 5,868 - 5,868
Total Deductions 10,713 3,014,656 3,025,369
Changes in Net Position (10,156) 347,619 337,463
Net Position - Beginning of the Year 10,156 1,457,466 1,467,622 Net Position - End of the Year $ - $ 1,805,085 $ 1,805,085 Business and
Professional
Center
Assessment
District
West Cities Police
Communications
Center Joint
Powers Authority
Total Custodial
Funds
133

PROGRESS
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134
67$7,67,&$/6(&7,21
135

PROGRESS
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136

CITY OF CYPRESS
Statistical Section
Year ended June 30, 2023
Table of Contents
This part of the City of Cypress’ annual comprehensive financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City’s overall financial health.

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 138
Schedule 2 - Changes in Net Position 140
Schedule 3 - Fund Balances – Governmental Funds 142
Schedule 4 - Changes in Fund Balances – Governmental Funds 144 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 146 Schedule 6 - Direct and Overlapping Property Tax Rates 147 Schedule 7 - Principal Property Tax Payers 148
Schedule 8 - Property Tax Levies and Collections 149
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 150
Schedule 10 - Direct and Overlapping Governmental Activities Debt 151 Schedule 11 - Legal Debt Margin Information 152
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 154
Schedule 13 - Principal Employers 155
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 156 Schedule 15 - Operating Indicators by Function/Program 157 Schedule 16 - Capital Assets Statistics by Function/Program 158 Sources: Unless otherwise noted, the information in these schedules was derived from the City’s annual comprehensive 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, 2023.
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CITY OF CYPRESS
CITY COUNCIL REPORT
City Council Regular 5.

FROM: Matt Burton, Director of Finance and Administrative Services DATE: 03/11/2024
SUBJECT: Receive and File the Audit Letter to the City Council for the Fiscal Year Ended June 30, 2023

RECOMMENDATION
Receive and file the audit letter from Lance, Soll and Lunghard LLP to the City Council for the Fiscal Year ended June 30, 2023.

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, 2023. 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, 2023.

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 June 30, 2023
Management Representation Letter for the FYE June 30, 2023

Significant Audit Matters
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in Note 1 to the financial statements. As described in Note 1 to the financial statements, the City changed accounting policies related to subscription-based information technology arrangements by adopting Statement of Governmental Accounting Standards (GASB Statement) No. 96 in fiscal year 2022-2023. Accordingly, the cumulative effect of the accounting change as of the beginning of the year is reported in the Statement of Revenues, Expenses, and Changes in Net Position. We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period.

Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events.

Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the City’s financial statements were:

Management’s estimates of the net pension liability and net other postemployment benefits liability are based on actuarial valuation estimates. We evaluated the methods, assumptions, and data used to develop the actuarial valuation estimates 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.

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

Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. We are pleased to report that no such disagreements arose during the course of our audit.

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

Management Representations
We have requested certain representations from management that are included in the management representation letter dated February 20, 2024.

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

Other Matters
We applied certain limited procedures to management’s discussion and analysis, the budgetary comparison schedules for the General Fund and the major special revenue funds, and the required pension and other postemployment benefits schedules, 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 and individual fund financial statements and 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 other information included in the annual report which is comprised of the 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.

To the Honorable Mayor and Members of the City Council
City of Cypress, California
Future GASB Pronouncements
The following Government Accounting Standards Board (GASB) pronouncements will be effective for the following fiscal years’ audits and should be reviewed for proper implementation by management:

Fiscal Year 2023-2024
GASB Statement No. 99, Omnibus 2022.

Fiscal Year 2024-2025
GASB Statement No. 101, Compensated Absences.

Future Projects
Comprehensive Project, Financial Reporting Model.

Comprehensive Project, Revenue and Expense Recognition.

Major Project, Going Concern Uncertainties and Severe Financial Stress.

Major Project, Infrastructure Assets.

Practice Issue, Classification of Nonfinancial Assets.

Practice Issue, Risks and Uncertainties Disclosures.

Pre-Agenda Research Activities, Subsequent Events.

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

Very truly yours,
Brea, California

CITY OF CYPRESS
CITY COUNCIL REPORT
City Council Regular 6.

FROM: Matt Burton, Director of Finance and Administrative Services DATE: 03/11/2024
SUBJECT: Receive and File the Cypress Recreation and Park District’s Financial Statements and Auditors' Report for the Fiscal Year Ended June 30, 2023

RECOMMENDATION
Receive and file the District's Basic Financial Statements and Independent Auditors' Report for the Fiscal Year Ended June 30, 2023.

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, 2023. 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 Audited Financial Statements for FYE 6/30/23

CYPRESS RECREATION AND PARK DISTRICT
FOR THE FISCAL YEAR ENDED JUNE 30, 2023

BASIC FINANCIAL STATEMENTS AND
INDEPENDENT AUDITORS’ REPORT
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CYPRESS RECREATION AND PARK DISTRICT
Basic Financial Statements and Independent Auditors’ Report For the Fiscal Year Ended June 30, 2023
Table of Contents
Page
Number

REQUIRED SUPPLEMENTARY INFORMATION
Schedule of Proportionate Share of the Net Pension Liability – Defined Benefit Pension Plan .................................................................................................................... 54 Schedule of Changes in Net Pension Liability and Related Ratios – Defined Benefit Pension Plan ................................................................................................................... 56 Schedule of Contributions – Defined Benefit Pension Plan .......................................................................... 58 Schedule of Proportionate Share of the Net Pension Liability – OCERS - Defined Benefit Pension Plan ................................................................................................... 60 Schedule of Contributions – OCERS - Defined Benefit Pension Plan .......................................................... 62 Schedule of Changes in the Total OPEB Liability and Related Ratios ......................................................... 64 Budgetary Comparison Schedule – General Fund ....................................................................................... 66 Notes to Required Supplementary Information ............................................................................................. 67

COMBINING FUND STATEMENTS
Combining Statement of Net Position – Internal Service Funds ................................................................... 70 Combining Statement of Revenues, Expenditures and Changes in Net Position – Internal Service Funds ....................................................................................................... 71 Combining Statement of Cash Flows – Internal Service Funds ................................................................... 72 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 ...................................................................... 73

1611 E. Fourth Street, Suite 200
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The Woodlands, TX 77380
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11 CYPRESS RECREATION AND PARK DISTRICT
Statement of Net Position
Government
Governmental
Activities
Assets
Current Assets:

Cash and cash equivalents $ 17,835,441
Receivables:

Accounts 19,581
Taxes 109,138
Accrued interest 154,308
Prepaid costs 33,916
Inventories 1,714
Total Current Assets 18,154,098
Noncurrent Assets:

Capital assets:

Non-depreciable assets 10,254,248
Depreciable assets, net 27,392,218
Total Capital Assets 37,646,466
Total Assets 55,800,564
Deferred Outflows of Resources
Deferred amounts from pension plans 1,922,491
Deferred amounts from OPEB 51,450
Total Deferred Outflows of Resources 1,973,941
Liabilities
Current Liabilities:

Accounts payable and accrued liabilities 940,673
Unearned revenue 253,982
Accrued leave payable 27,797
Deposits payable 14,600
Unclaimed property 300
Total Current Liabilities 1,237,352
Noncurrent Liabilities:

Notes payable to the City of Cypress 5,023,162
Accrued leave payable 83,390
Total OPEB liability 459,151
Net pension liability 3,619,562
Total Noncurrent Liabilities 9,185,265
Total Liabilities 10,422,617
Deferred Inflows of Resources
Deferred amounts from pension plans 347,050
Deferred amounts from OPEB 94,908
Total Deferred Inflows of Resources 441,958
Net Position
Net investment in capital assets 32,623,304
Restricted 139,278
Unrestricted 14,147,348
Total Net Position $ 46,909,930
June 30, 2023
Primary
See Notes to Financial Statements.
12 CYPRESS RECREATION AND PARK DISTRICT
Statement of Activities
For the Fiscal Year Ended June 30, 2023
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 $ 6,483,662 $ 2,890,860 $ 62,665 $ (3,530,137) Total governmental activities $ 6,483,662 $ 2,890,860 $ 62,665 (3,530,137) Property taxes 7,080,645
Investment income 752,086
Other revenue 21,063
Total general revenues 7,853,794
Change in net position 4,323,657
Net position at beginning of year 42,586,273
Net position at end of year 46,909,930 $
General revenues:

Program Revenues
See Notes to Financial Statements.
13 THIS PAGE INTENTIONALLY LEFT BLANK
14 )81'),1$1&,$/67$7(0(176
Governmental Fund Financial Statements
Proprietary Fund Financial Statements
15 THIS PAGE INTENTIONALLY LEFT BLANK
16 *29(510(17$/)81'),1$1&,$/67$7(0(176
17 CYPRESS RECREATION AND PARK DISTRICT
Balance Sheet
Governmental Fund
June 30, 2023
General Fund
Assets
Cash and cash equivalents $ 16,175,927
Receivables:

Accounts 3,822
Taxes 109,138
Interest 154,308
Prepaid costs 33,916
Inventories 1,714
Total Assets $ 16,478,825
Liabilities and Fund Balance
Liabilities
Accounts payable and accrued liabilities $ 939,451
Unearned revenues 253,982
Deposits payable 14,600
Unclaimed property 300
Total Liabilities 1,208,333
Fund Balance
Nonspendable 35,630
Restricted 139,278
Committed 4,912,766
Assigned 9,955,928
Unassigned 226,890
Total Fund Balance 15,270,492
Total Liabilities and Fund Balance $ 16,478,825
See Notes to Financial Statements.
18 CYPRESS RECREATION AND PARK DISTRICT
Reconciliation of the Governmental Fund Balance Sheet
to the Statement of Net Position
June 30, 2023
Fund balance - total governmental fund $ 15,270,492
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 $407,537:

Non-depreciable $ 10,254,248
Depreciable, net 26,984,681 37,238,929
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. (576,329)
Long-term liabilities are not due and payable in the current period, and therefore not reported in the Governmental Fund Balance Sheet Notes payable to the City of Cypress (5,023,162)
Net Position of Governmental Activities $ 46,909,930
See Notes to Financial Statements.
19 CYPRESS RECREATION AND PARK DISTRICT
Statement of Revenues, Expenditures and Changes in Fund Balance Governmental Fund
For the Fiscal Year Ended June 30, 2023
General Fund
Revenues
Taxes $ 7,080,645
From other agencies 62,665
Charges for services 2,890,860
From use of property 752,086
Other revenue 21,063
Total Revenues 10,807,319
Expenditures
Current:

Parks and recreation 5,260,832
Contribution to City for infrastucture set-aside 382,160 Capital outlay 1,070,103
Debt service (See Note 13) 2,100,861
Total Expenditures 8,813,956
Excess (Deficiency) of Revenues
Over Expenditures 1,993,363
Other Financing Uses
Issuance of Notes Payable (See Note 13) 758,763
Transfers out (253,411)
Total Other Financing Uses 505,352
Net Change in Fund Balance 2,498,715
Fund Balance - Beginning of Year 12,771,777
Fund Balance - End of Year $ 15,270,492
See Notes to Financial Statements.
20 CYPRESS RECREATION AND PARK DISTRICT
Reconciliation of the Statement of Revenues, Expenditures and Changes to Fund Balance of the Governmental Fund
For the Fiscal Year Ended June 30, 2023
Net change in fund balance - total governmental fund $ 2,498,715 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 1,070,100
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, (770,200) 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 $54,868.

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. 182,944 Debt proceeds provide current financial resources to governmental funds, but issuing debt increases longǦterm liabilities in the Statement of Net Position, Payment of Notes Payable 2,100,861
Issuance of Notes Payable (758,763) 1,342,098
Change in Net Position of Governmental Activities $ 4,323,657 See Notes to Financial Statements.
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22 35235,(7$5<)81'),1$1&,$/67$7(0(176
23 CYPRESS RECREATION AND PARK DISTRICT
Statement of Net Position
Proprietary Funds
June 30, 2023
Governmental
ActivitiesInternal
Service Funds
Assets
Current:

Cash and cash equivalents $ 1,659,514
Other receivables
Accounts 15,759
Total Current Assets 1,675,273
Noncurrent:

Capital assets - net of accumulated depreciation 407,537 Total Noncurrent Assets 407,537
Total Assets 2,082,810
Deferred amounts from pension plans 1,922,491
Deferred amounts from OPEB 51,450
Total Deferred Outflows of Resources 1,973,941
Liabilities:

Current:

Accounts payable 1,222
Accrued compensated absences 27,797
Total Current Liabilities 29,019
Noncurrent:

Accrued compensated absences 83,390
Total OPEB liability 459,151
Net pension liability 3,619,562
Total Noncurrent Liabilities 4,162,103
Total Liabilities 4,191,122
Deferred Inflows of Resources:

Deferred amounts from pension plans 347,050
Deferred amounts from OPEB 94,908
Total Deferred Inflows of Resources 441,958
Net Position:

Invested in capital assets 407,537
Unrestricted (983,866)
Total Net Position $ (576,329)
See Notes to Financial Statements.
24 CYPRESS RECREATION AND PARK DISTRICT
Statement of Revenues, Expenses
and Changes in Net Position
Proprietary Funds
For the Fiscal Year Ended June 30, 2023
Governmental
ActivitiesInternal
Service Funds
Operating Revenues:

Charges for services $ 1,132,074
Total Operating Revenues 1,132,074
Operating Expenses:

Contractual services 887,599
Supplies and other services 260,074
Depreciation expense 54,868
Total Operating Expenses 1,202,541
Operating Income (Loss) (70,467)
Transfers in 253,411
Changes in Net Position 182,944
Net Position:

Beginning of Year (759,273)
End of Fiscal Year $ (576,329)
See Notes to Financial Statements.
25 CYPRESS RECREATION AND PARK DISTRICT
Statement of Cash Flows
Proprietary Funds
For the Fiscal Year Ended June 30, 2023
Governmental
ActivitiesInternal
Service Funds
Cash Flows from Operating Activities:

Receipts from user departments $ 1,175,932
Payments to suppliers for goods and services (1,592,607) Net Cash Provided (Used) by Operating Activities (416,675) Cash Flows from Non-Capital
Financing Activities:

Cash transfers in 253,411
Net Cash Provided (Used) by
Non-Capital Financing Activities 253,411
Cash Flows from Capital
and Related Financing Activities:

Acquisition and construction of capital assets (178,168) Net Cash Provided (Used) by
Capital and Related Financing Activities (178,168)
Net Increase (Decrease) in Cash
and Cash Equivalents (341,432)
Cash and Cash Equivalents at Beginning of Year 2,000,946 Cash and Cash Equivalents at End of Year $ 1,659,514
Reconciliation of Operating Income to Net Cash
Provided (Used) by Operating Activities:

Operating income (loss) $ (70,467)
Adjustments to Reconcile Operating Income (loss)
Net Cash Provided (used) by Operating Activities:

Depreciation 54,868
(Increase) decrease in accounts receivable 42,981
(Increase) decrease in prepaid expense 877
(Increase) decrease in deferred outflows amounts from OPEB 24,521 (Increase) decrease in deferred outflows amounts from pension plans (377,074) Increase (decrease) in accounts payable and accrued liabilities (2,285) Increase (decrease) in accrued leave payable (8,943)
Increase (decrease) in total OPEB liability (83,497)
Increase (decrease) in deferred inflows amounts from OPEB (30,046) Increase (decrease) in net pension liability 1,939,922
Increase (decrease) in deferred inflows amounts from pension plans (1,907,532) Total Adjustments (346,208)
Net Cash Provided (Used) by
Operating Activities $ (416,675)
See Notes to Financial Statements.
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Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2023
NOTE 3: CAPITAL ASSETS
The following is a summary of capital assets for governmental activities for the year ended June 30, 2023:

Balance at
June 30, 2022 Additions Deletions
Transfers of
CIP
Balance at
June 30, 2023
Capital assets, not being depreciated:

Land 9,201,564 $ - $ - $ - $ 9,201,564 $
Construction in progress 14,374,815 - - (13,322,131) 1,052,684 Total Capital Assets Not
being Depreciated 23,576,379 - - (13,322,131) 10,254,248 Capital assets, being depreciated:

Buildings and improvements 24,781,516 1,070,100 16,179 13,322,131 39,157,568 Internal Service - Equipment 753,372 178,168 2,325 - 929,215 Total Capital Assets,
being Depreciated 25,534,888 1,248,268 18,504 13,322,131 40,086,783 Less accumulated depreciation for:

Buildings and improvements 11,418,866 770,200 16,179 - 12,172,887 Internal Service - Equipment 469,135 54,868 2,325 - 521,678 Total Accumulated
Depreciation 11,888,001 825,068 18,504 - 12,694,565
Total Capital Assets,
Being Depreciated, Net 13,646,887 423,200 - 13,322,131 27,392,218 Capital Assets, Net 37,223,266 $ 423,200 $ - $ - $ 37,646,466 $ Depreciation expense for capital assets for the year ended June 30, 2023, is comprised of the following:

Governmental funds $ 770,200
Internal service funds 54,868
Total depreciation expense $ 825,068
Depreciation expense of $770,200 is allocated to recreation activities on the statement of activities.

NOTE 4: 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 (the "County") bills and collects the property taxes and remits them to the District in installments during the year. District 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 District 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 Educational Revenue Augmentation Fund in fiscal years 1992-93 and 1993-94. 37 &<35(665(&5($7,21$1'3$5.',675,&7
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Cypress City CouncilMarch 11, 2024

Cypress City Council
March 11, 2024