AVAILABILITY OF PUBLIC RECORDS:
All public record to an open session item on this agenda, which are not exempt from disclosure pursuant to the California Public Records Act, that are distributed to a majority of the legislative body will be available for public inspection at the City Clerk’s Office, City Hall located at 333 90 th Street, Daly City, CA during normal business hours, at the same time that the public records are distributed or made available to the legislative body.
CITY OF DALY CITY
Regular Meeting - CITY COUNCIL
AGENDA
Monday, February 27, 2023 - 7:00 PM
City Hall Council Chambers – 2nd Floor
City Hall, 333 – 90th Street
Daly City, CA 94015
To watch the live telecast:
https://www.youtube.com/DalyCityVideoMeetings or https://www.dalycity.org/agendas
Public Participation:
There are two ways to submit public comment: (1) submit written comments by meeting day, and (2) attend the meeting in person.
1. To submit a comment in writing, please visit www.dalycity.org/agendas and complete the Public Comment form. In the comment field box, include the item number and/or title of the item as well as your comments. Public Comments may also be emailed to [email protected] by including “Public Comment” in the subject line. All written comments received by 4:00 pm on meeting day will be provided to the City Council prior to the meeting. Comments are not read aloud into the record.
Please note: Any written comments received after 4:00 p.m. on the meeting date is not guaranteed to be received by the City Council prior to the meeting.
2. To speak at the meeting in person, please complete a Speaker Card located at the entrance to the Council Chambers and submit to a Staff Member as early in the meeting as possible.
Persons with disabilities who require auxiliary aids or services in attending or participating in this meeting should call the office of the City Clerk at 991-8078 as soon as possible.
CALL TO ORDER:
PLEDGE TO THE FLAG:
ROLL CALL:
PRESENTATIONS:
1. Commendation - San Mateo County Poet Laureate Jorge Argueta
2. Presentation by PlaceWorks (City Consultant) on New Commercial - Mixed Use (C-MU) for Mission Street and Geneva Avenue
Agenda – City Council
Monday, February 27, 2023
APPROVAL OF MINUTES:
3. Regular Meeting of February 13, 2023
APPROVAL OF AGENDA:
PUBLIC APPEARANCES/ORAL COMMUNICATIONS:
NOTE: Speakers are limited to two minutes, unless modified by the Mayor.
The Council cannot take action on any matter raised under this item.
CONSENT AGENDA
All items listed on the Consent Agenda are considered to be routine and may be approved by one roll call vote of the City Council. There shall be no separate discussion of the matters on the Consent Agenda unless requested by a member of the City Council. If discussion is required, that item will be removed from the Consent Agenda and will be considered separately at the end of the Agenda.
Communications:
4. Accept 2022 Qtr 4 Investment Report
5. Accept Fiscal Year 2022 Annual Comprehensive Financial Report
Resolutions:
6. Accept Proposed Title Changes of Administrative Secretary to Executive Administrative Assistant and Legal Secretary to Executive Legal Office Assistant
7. Adopt Resolution of Annual Delegation of Authority to City Treasurer to Invest City Funds
8. Accept of Board of State and Community Corrections (BSCC) Officer Wellness and Mental Health Grant Funds for Officer Wellness and Mental Health Resources
9. Accept $450,000 in One Bay Area Grant 2 Funds and Authorize the City Manager to Execute the Program Supplement for the Southgate Avenue and School Street Safety Improvements Project
10. Authorize the City Manager to Execute Amendment No. 3 to the Professional Services Agreement for the Mussel Rock 2019 Gabion Wall and Stormwater Maintenance Project
11. Authorize Staff to Submit a Grant Application to City/County Association of Governments of San Mateo County and San Mateo County Transportation Authority for the FY 2023/2024 and FY 2024/2025 San Mateo County Shuttle Program
END OF CONSENT AGENDA
Agenda – City Council
Monday, February 27, 2023
RESOLUTIONS:
12. Consider partnership with the San Francisco Host Lions Club districtwide “Strides for Diabetes Awareness Walk” at Gellert Park
STAFF: Leilani Ramos
RECOMMENDATION: Adopt Resolution by Roll Call Vote
APPOINTMENTS: Board/Commission Membership Committee Appointments
13. Appoint Director of the Bay Area Water Supply and Conservation Agency (BAWSCA) and the Regional Finance Authority (RFA)
STAFF: Leilani Ramos
RECOMMENDATION: Motion to Appoint
Adopt Resolution by Roll Call Vote
REPORTS:
14. Council Committee
15. City Council
16. Staff
ADJOURNMENT:
Commendation
San Mateo County Poet Laureate Jorge Argueta
WHEREAS,Jorge Argueta is a Salvadoran award-winning poet and author of many highly acclaimed bilingual children’s books and short stories, covering themes related to Latino culture and traditions, nature, and the immigrant experience; and
WHEREAS,Jorge grew up in Santo Domingo de Guzmán, El Salvador, learning stories of his indigenous heritage and their belief in a human-nature connection, instilling in him great respect for the environment and appreciation for oral tradition; and
WHEREAS,Jorge has written numerous children’s books, short stories as well as poems that have been included in textbooks and anthologies; and
WHEREAS,his children’s books are written in poetry form, in two languages (English and Spanish), and reflect the Latino experience and heritage; he also writes about the Nahuatl Indians and their deep appreciation and respect for nature; and
WHEREAS,Jorge’s adult poems cover themes of the hardships of growing up in El Salvador during wartime and the difficulties experienced by immigrants in the United States; and
WHEREAS,Jorge has spent over 15 years as a workshop and classroom presenter, speaking about the power of poetry on children’s lives and has won multiple awards for his work in literature; and WHEREAS,on December 13 th, 2022, the San Mateo County Board of Supervisors appointed Jorge Argueta of Daly City as the County’s poet laureate for a two-year term, citing his ability to use poetry to create bridges among diverse communities, and recently had an inaugural event at the John Daly Library in Daly City to celebrate his appointment.
NOW, THEREFORE, I, RAYMOND A. BUENAVENTURA, Mayor, and
members of the City Council, do herby commend JORGE ARGUETA on all his outstanding achievements and becoming the new Poet Laureate in San Mateo County and extend sincere congratulations. Best wishes for success in all your future endeavors!
Signed and sealed by the Mayor and City Council
of the City of Daly City, this 27th of February 2023.
Raymond A. Buenaventura, Mayor
Juslyn C. Manalo, Vice Mayor
Dr. Roderick Daus-Magbual, Councilmember
Pamela DiGiovanni, Councilmember
Glenn R. Sylvester, Councilmember
CITY OF DALY CITY
MINUTES – REGULAR MEETING – CITY COUNCIL
FEBRUARY 13, 2023
--------------------------------
Note on Public Comments: For this meeting, members of the Council and the public had the option of attending in person or submitting public comments via email to the City Clerk’s Office prior to the public meeting. Persons with disabilities who require auxiliary aids or services in attending or participating in this meeting were instructed to call the office of the City Clerk at 991-8078 prior to the meeting.
Visit https://www.youtube.com/@DalyCityVideoMeetings/streams to view the City Council meetings
The meeting was called to order by Mayor Buenaventura at 7:01 P.M.
ROLL CALL: Councilmembers Present:
Raymond A. Buenaventura, Mayor
Juslyn C. Manalo, Vice Mayor
Roderick Daus-Magbual
Pamela DiGiovanni
Glenn R. Sylvester
Staff Present:
Thomas Piccolotti, City Manager
Rose L. Zimmerman, City Attorney
K. Annette Hipona, City Clerk
PRESENTATIONS:
Proclamation - Black History Month
(Leslie DuBridge, Daly City Cultural Arts Administrator)
APPROVAL OF MINUTES:
Regular Meetings of January 23, 2023
It was moved by Vice Mayor Manalo, seconded by Councilmember Daus-Magbual and carried to approve the minutes of January 23, 2023, as amended.
APPROVAL OF AGENDA:
It was moved by Councilmember DiGiovanni, seconded by Councilmember Sylvester and carried to approve the agenda.
CONSENT AGENDA:
It was moved by Councilmember Sylvester, seconded by Vice Mayor Manalo and carried to approve the consent agenda with the exception of items # 4, 5, and 6, which were pulled for further discussion.
Resolutions:
Final Acceptance of the Subdivision Improvements for Major Subdivision SUB -4-17-12723 (the Juniper Project Subdivision)
Resolution 23- 25, Accepting Subdivision Improvements For Major Subdivision ( SUB-4-17- 12723) For The Juniper Project Subdivision – 3301 Junipero Serra Boulevard
CITY OF DALY CITY
MINUTES – REGULAR MEETING – CITY COUNCIL
FEBRUARY 13, 2023
2 Accept Grant Deed for the Tita Alice Bulos Community Hub from City Ventures Homebuilding, LLC
Director of Public Works Richard Chiu provided the staff report and addressed questions regarding who would maintain the exterior of the facility , potential uses for the building and tenants, whether there are exemptions on HOA fees, the amount of parking spaces, cost of recovery, and a potential space in the hub to showcase artwork. Samantha Hauser, City Ventures, expressed support for the hub and was grateful to staff and the Council for the project collaboration.
It was moved by Mayor Buenaventura, seconded by Vice Mayor Manalo and carried by voice vote to adopt the following resolution:
Resolution 23-26, Approving Acceptance Of Grant Deed For The Tita Alice Bulos Community Hub At The Juniper Subdivision
Appropriate Funds and Authorize the City Manager to Execute a Professional Services Agreement with Kimley-Horn and Associates Inc. for the RO 256 Streetlight Conversion Project
Director Chiu provided the staff report which proposes for Kimley-Horn and Associates to conduct design services to convert the series circuit streetlights to a parallel circui t, a more common c ircuit. Mr.
Chiu addressed questions on repair and conversion options, the proposed area for conversion, and the estimated timeframe for the design process.
It was moved by Councilmember DiGiovanni, seconded by Councilmember Da us-Magbual and carried by voice vote to adopt the following resolution:
Resolution 23-27, Authorizing Execution Of Professional Services Agreement With Kimley-Horn And Associates, Inc.
Amend Daly City's Conflict of Interest Code as to Positions
City Clerk Annette Hipona provided the staff report to comply with FPPC requirements by having designated positions submit a Form 700, Statement of Economic Interests, annually.
It was moved by Councilmember DiGiovanni, seconded by Councilmember Sylvester and carried by voice vote to adopt the following resolution:
Resolution 23-28, Amending Daly City’s Conflict Of Interest Code As To Positions
Request Use of Federal Asset Forfeiture Funds to Purchase Vehicle Immobilization Devices for the Police Department
Resolution 23-29, Authorizing Use Of Federal Asset Forfeiture (DEA) Funds To Purchase Vehicle Immobilization Devices For The Police Department
Request Use of Federal Asset Forfeiture Funds to Purchase Replacement Firearms for the Police Department
CITY OF DALY CITY
MINUTES – REGULAR MEETING – CITY COUNCIL
FEBRUARY 13, 2023
3 Resolution 23-30, Authorizing Use Of Federal Asset Forfeiture ( DEA) Funds To Purchase Replacement Firearms For The Police Department
Approve Daly City's 2022 Mandated Life and Safety Compliance Inspections Report
Resolution 23-31, Acknowledging North County Fire Authority Regarding The Inspecti on Of Certain Occupancies Required To Perform Annual Inspections In Such Occupancies Pursuant To Sections 13146.2 And 13146.3 Of The California Health And Safety Code
END OF CONSENT AGENDA
PUBLIC HEARINGS:
Public Hearing on Removal of Commercial Vehicle Parking on the East Side of Bayshore Boulevard
Director Chiu requested the public hearing be continued to the regular City Council meeting of March 13, 2023 in order for the department to perform additional outreach for the item.
It was moved by Vice M ayor Manalo, seconded by Councilmember DiGiovanni and carried by voice vote to continue the hearing to the meeting of March 13, 2023.
Introduce Ordinance Amending the Daly City Municipa l Code Re: Commissioners and Board Members Compensation and Adopt Resolution Setting Compensation for Commissioners and Board Members
Councilmember Daus-Magbual recused himself and left the Council Chambers at 7:55 P.M.
City Attorney Rose Zimmerman provided the staff report to add Chapter 2.60 to the Municipal Code to allow for commissioner and board member compens ation to be set by resolution. Mayor Buenaventura opened the public hearing. There were no public comments.
Mayor Buenaventura addressed questions on the impetus of the ordinance and staff addressed questions on the compensation amount of $50/meeting, whether other cities provide similar compensation, the monthly cap on Library Board members, why committees are not included in the stipend, whether the stipend is based on attendance, and the potential budget for the item ($10,000-$18,000 annually).
It was moved by Vice Mayor Manalo, seconded by Councilmember Sylvester and carried to close the public hearing.
It was moved by Mayor Buenaventura and seconded by Vice Mayor Manalo for the City Attorney to read the ordinance by title only. The motion failed via the following vote:
Ayes: Manalo, Buenaventura
Noes: DiGiovanni, Sylvester
Recused: Daus-Magbual
Councilmember Daus-Magbual rejoined the meeting at 8:09 P.M.
CITY OF DALY CITY
MINUTES – REGULAR MEETING – CITY COUNCIL
FEBRUARY 13, 2023
4 COMMUNICATIONS:
Consider and Select Artwork for the National Fitness Campaign Fitness Court® Lincoln Park Location
Assistant to the City Manager Leilani Ramos requested the Council to review two artwork submissions, consider the Arts & Culture Commission’ s rec ommendation, and select artwork for t he National Fitness Court located at Lincoln Park.
Ms. Ramos addressed questions on where the artwork would be installed within the park, whether both submissions can be utilized, why Artist No. 1 was selected by the Arts & Culture Commission, whether Artist No. 2’s submission can be redone digitally, and how Artist No. 2’s artwork can also be highlighted.
The Council provided direction to staff to select Artist No. 1’s artwork for the National Campaign Fitness Court located at Lincoln Park.
AWARD OF BIDS/CONTRACTS:
Award of Contract for the Construction, Development and Testing of the Margate Well
Acting Director of Water and Wastewater Resources Joshua Cosgrove provided the staff report and the recommendation to select the lowest responsible bid from Maggiora Bros. Drilling, Inc. in the amount of $1,512,400 and a 15% contingency amount of $227,000. Staff addressed questions on ownership of the well, whether the project could raise utility costs, potential space for recreation facilities on site, factors that held back the project, the wholesale price of water, and how often the department tests for lead and salinity.
It was moved by Councilmember Sylvester, seconded Councilmember DiGiovanni and carried by unanimous roll call vote to adopt the following resolution:
Resolution 23-32, Authorizing Execution Of Construction Contract With Maggiora Bros. Drilling, Inc., For The Construction, Development And Testing Of The Margate Well
APPOINTMENTS:
It was moved by Councilmember Daus-Magbual, seconded by Vice Mayor Manalo and carried by voice vote to appoint Elaine Villasper to the Arts & Culture Commission.
REPORTS:
City Council
Councilmember DiGiovanni acknowledged Valentine’s Day, supported a call-in option for members of the public who are not able to attend meetings in person and want to provide public comment, and noted that staff is looking into local station Channel 27 to air future meetings for accessibility.
CITY OF DALY CITY
MINUTES – REGULAR MEETING – CITY COUNCIL
FEBRUARY 13, 2023
5 Staff
City Manager Thomas Piccolotti gave kudos to the Water and Wastewater Resources Department staff for their work on bringing the Margate Well project to fruition.
ADJOURNMENT:
Mayor Buenaventura adjourned the meeting at 8:58 PM in memory of Karen Daus-Capalaran, Jacob Brandon Garcia, Gloria Rosella Tamos, Eduardo “Eddie” Rosete, Ademan “Adee” Angeles, Charles Preston Morrow, and Janet Abelson.
Approved as submitted, this 27th
City Clerk
day of February , 2023.
Raymond A. Buenaventura
Mayor
CITY OF DALY CITY / SANITATION DISTRICT
Pooled Cash Investments
As of December 31, 2022
City Treasurer
INSTITUTION
ACCOUNT
NUMBER
/CUSSIP
TYPE OF
INVESTMENT TERM MATURITY
DATE
INTEREST
RATE
CURRENT
YIELD SHARES HELD COST MARKET VALUE TAXED COST UNREALIZED
GAIN/LOSS
Market Value
Factor
PERCENT OF
PORTFOLIO
Local Agency Investment Fund City of Daly City 98-41-238 Pooled 2.173% 8,283,301$ 8,283,301$ 8,129,143$ 8,129,143$ (154,158)$ 0.9814 3.65% Sacramento, CA Investment
Local Agency Investment Fund Sanitation District 70-41-005 Pooled 2.173% 400,870$ 400,870$ 393,410$ 393,410$ (7,460)$ 0.9814 0.18% Sacramento, CA Investment
County of San Mateo Investment Pool 03364 Pooled 2.1480% 188,143,341$ 188,143,341$ 182,103,940$ 182,103,940$ (6,039,401)$ 0.9679 82.99% Redwood City, CA Investment
Total Pooled Investment 196,827,512$ 196,827,512$ 190,626,492$ 190,626,492$ (6,201,020)$ US Bank
FHL 3134GWUG9 BOND 9/24/2025 0.57% 0.64% 1,000,000$ 978,059$ 895,700$ 983,771$ (88,071)$ FARMERMAC 31422XGQ9 BOND 10/26/2026 0.94% 1.06% 1,000,000$ 880,726$ 889,010$ 886,821$ 2,189$ Fed Farm Credit 3133ENEY2 BOND 7/24/2023 0.45% 0.46% 5,000,000$ 4,853,705$ 4,877,300$ 4,888,482$ (11,182)$ Federal Home Loan Bank 3130A3DU5 BOND 3/12/2027 3.00% 3.14% 1,380,000$ 1,329,579$ 1,318,935$ 1,332,380$ (13,445)$ Federal Home Loan Bank 3130ATBC0 BOND 2/14/2025 3.58% 3.65% 1,180,000$ 1,161,381$ 1,158,241$ 1,163,329$ (5,088)$ Federal Home Loan Bank 3130AMLL4 BOND 5/26/2026 0.95% 1.07% 1,020,000$ 1,020,000$ 907,198$ 1,022,387$ (115,189)$ Federal Home Loan Bank 3133837F2 BOND 8/30/2023 2.16% 2.20% 1,000,000$ 1,012,423$ 983,180$ 1,006,598$ (23,418)$ Federal Home Loan Bank 3130A3VC5 BOND 12/8/2023 2.25% 2.30% 1,510,000$ 1,495,774$ 1,474,772$ 1,500,197$ (25,425)$ Federal Home Loan Bank 3130ASBU2 BOND 9/23/2024 3.00% 3.10% 1,000,000$ 994,004$ 968,600$ 997,228$ (28,628)$ Federal Home Loan Bank 3130AT3H8 BOND 3/8/2024 3.38% 3.43% 2,000,000$ 2,000,000$ 1,966,260$ 2,000,000$ (33,740)$ US Treasury Note 9128CCG4 BOND 6/15/2024 0.25% 0.27% 1,000,000$ 956,041$ 938,520$ 970,818$ (32,298)$ GNMA 36200MQW6 GNMA'S 7/15/2033 4.50% 4.56% 47,442$ 47,442$ 46,762$ 54,749$ (7,986)$ GNMA 32691HTQ7 GNMA'S 3/15/2034 5.50% 5.37% 37,597$ 37,597$ 38,531$ 37,597$ 934$ GNMA 36291YRM1 GNMA'S 3/15/2035 5.50% 5.43% 2,003$ 2,003$ 2,030$ 2,003$ 27$ GNMA 36295WJ24 GNMA'S 3/15/2038 5.00% 4.96% 23,921$ 23,921$ 24,117$ 23,921$ 195$ GNMA 36202E6D6 GNMA'S 6/20/2039 4.50% 4.51% 290,447$ 290,447$ 289,877$ 290,447$ (569)$ SubTotal Government Obligations 17,491,409$ 17,083,102$ 16,779,033$ 17,160,728$ (381,695)$ 7.72% Alabama Bank 01025RAD1 CD 2 YR 11/22/2024 4.90% 4.87% 249,000$ 249,000$ 250,337$ 249,000$ 1,337$ Alliant Credit Union 01882MAA0 CD 5 YR 12/30/2027 4.85% 4.80% 248,000$ 248,000$ 250,765$ 248,000$ 2,765$ Ally Bank 02007GQH9 CD 4 YR 4/28/2026 2.85% 3.01% 246,000$ 246,000$ 232,989$ 246,000$ (13,011)$ American Express 02589AA44 CD 3 YR 3/17/2023 0.85% 0.86% 247,000$ 247,000$ 245,303$ 247,000$ (1,697)$ Austin Telco Fed Credit Union 052392CC9 CD 2 YR 11/27/2006 5.05% 4.97% 248,000$ 248,000$ 252,114$ 248,000$ 4,114$ Bank Hapaolim 06251A2Q2 CD 5 YR 12/15/2025 0.50% 0.56% 249,000$ 249,000$ 221,164$ 249,000$ (27,836)$ Barclays Bank 06740KPB7 CD 3 YR 3/10/2025 1.70% 1.81% 247,000$ 247,000$ 232,227$ 247,000$ (14,773)$ Baycoast Bank 072727BG4 CD 5 YR 3/31/2025 0.90% 0.98% 247,000$ 247,000$ 227,680$ 247,000$ (19,320)$ Bell Bank 07815ABD8 CD 3 YR 3/24/2023 0.85% 0.86% 247,000$ 247,000$ 245,123$ 247,000$ (1,877)$ BMO Harris Bank 05600XBQ2 CD 5 YR 12/18/2025 0.50% 0.56% 249,000$ 249,000$ 220,997$ 249,000$ (28,003)$ Captiol One Bank 14042TCX3 CD 3 YR 3/27/2023 1.00% 1.01% 248,000$ 248,000$ 246,170$ 248,000$ (1,830)$ Captiol One Natl Assoc 14042RQB0 CD 5 YR 11/17/2026 1.10% 1.25% 248,000$ 248,000$ 217,565$ 248,000$ (30,435)$ Community Commerce Bank 2037GBC2 CD 3 YR 7/28/2025 3.00% 3.12% 249,000$ 249,000$ 239,409$ 249,000$ (9,591)$ Discover Bank 254673B70 CD 5 YR 4/28/2025 2.80% 2.91% 246,000$ 246,000$ 236,352$ 246,000$ (9,648)$ EnerBank 29278TLL2 CD 3.5 YR 3/13/2023 1.80% 1.78% 245,000$ 245,000$ 243,863$ 245,000$ (1,137)$ Fidelity Co Operative Bank 316077EVA CD 3 YR 12/22/2025 4.85% 4.84% 248,000$ 248,000$ 248,702$ 248,000$ 702$ First-Citizens Bank 319477AN5 CD 3 YR 10/28/2025 4.70% 4.68% 244,000$ 244,000$ 244,759$ 244,000$ 759$ First Financial Bank 32022RSG3 CD 5 YR 8/2/2027 3.30% 3.49% 249,000$ 249,000$ 235,679$ 249,000$ (13,322)$ First Foundation Bank 32026UZR0 CD 2 YR 12/16/2024 4.50% 4.51% 244,000$ 244,000$ 243,534$ 244,000$ (466)$ First Foundation Bank 32026UYX8 CD 2 YR 11/21/2024 4.80% 4.78% 244,000$ 244,000$ 244,847$ 244,000$ 847$ First National Bank of America 32110YYH2 CD 5 YR 7/29/2027 3.45% 3.62% 249,000$ 249,000$ 237,245$ 249,000$ (11,755)$ Forbright Bank 34520LAY9 CD 5 YR 12/15/2027 4.00% 4.11% 248,000$ 248,000$ 241,416$ 248,000$ (6,584)$ Goldman Sachs Bank 38149MXJ7 CD 5 YR 7/28/2026 0.95% 1.08% 249,000$ 249,000$ 219,444$ 249,000$ (29,556)$ JP Morgan Chase 48128UQJ1 CD 5 YR 10/30/2025 0.50% 0.56% 249,000$ 249,000$ 222,270$ 249,000$ (26,730)$ Live Oak 538036NE0 CD 5 YR 2/10/2026 0.50% 0.57% 249,000$ 249,000$ 219,596$ 249,000$ (29,404)$ Luana Savings 549104TK3 CD 5 YR 11/18/2025 0.40% 0.45% 249,000$ 249,000$ 221,172$ 249,000$ (27,828)$ Medallion Bank 58404DJN2 CD 5 YR 1/29/2026 0.45% 0.51% 249,000$ 249,000$ 219,508$ 249,000$ (29,492)$ Morgan Stanley 61690UQU7 CD 5 YR 12/26/2024 1.90% 2.00% 247,000$ 247,000$ 234,425$ 247,000$ (12,575)$ 1 of 3
CITY OF DALY CITY / SANITATION DISTRICT
Pooled Cash Investments
As of December 31, 2022
City Treasurer
INSTITUTION
ACCOUNT
NUMBER
/CUSSIP
TYPE OF
INVESTMENT TERM MATURITY
DATE
INTEREST
RATE
CURRENT
YIELD SHARES HELD COST MARKET VALUE TAXED COST UNREALIZED
GAIN/LOSS
Market Value
Factor
PERCENT OF
PORTFOLIO
Morgan Stanley 61768U2E6 CD 3.25 YR 1/27/2024 0.30% 0.31% 249,000$ 249,000$ 238,024$ 249,000$ (10,976)$ Mountain America 62384RAQ9 CD 2 YR 10/15/2024 4.75% 4.74% 249,000$ 249,000$ 249,610$ 249,000$ 610$ Nelnet Bank 64034KBE0 CD 5 YR 3/9/2027 1.90% 2.11% 247,000$ 247,000$ 221,922$ 247,000$ (25,078)$ Newburyport Savings Bank 651023FQ1 CD 4 YR 10/6/2026 4.00% 4.08% 244,000$ 244,000$ 239,103$ 244,000$ (4,897)$ Oklahoma Credit Union 67886WAC1 CD 2 YR 11/22/2024 4.85% 4.83% 249,000$ 249,000$ 250,111$ 249,000$ 1,111$ Parkway Bank 70153RLK2 CD 2 YR 10/7/2024 4.05% 4.09% 244,000$ 244,000$ 241,692$ 244,000$ (2,308)$ Prime Alliance 74160NHE3 CD 3 YR 3/27/2023 1.00% 1.01% 248,000$ 248,000$ 246,170$ 248,000$ (1,830)$ Promiseone 74348HAG3 CD 5 YR 3/26/2025 0.90% 0.98% 247,000$ 247,000$ 227,598$ 247,000$ (19,402)$ Raymond James 75472RAU5 CD 3 YR 12/30/2024 1.85% 1.95% 247,000$ 247,000$ 234,094$ 247,000$ (12,906)$ Sallie Mae Bank 7954506X8 CD 5 YR 6/30/2026 0.90% 1.02% 249,000$ 249,000$ 219,620$ 249,000$ (29,380)$ Sharonview Federal Credit 819866BR4 CD 3 YR 10/31/2025 4.85% 4.83% 249,000$ 249,000$ 250,150$ 249,000$ 1,150$ State Bank of India, NY 856285XK2 CD 5 YR 9/28/2026 1.10% 1.25% 248,000$ 248,000$ 218,575$ 248,000$ (29,425)$ Synchrony Bank 87165ET98 CD 5 YR 9/3/2026 0.90% 1.03% 248,000$ 248,000$ 217,424$ 248,000$ (30,576)$ Synovus Bank 87164DUU2 CD 2 YR 12/16/2024 4.50% 4.51% 244,000$ 244,000$ 243,534$ 244,000$ (466)$ Texas Exchange Bank 88241TPD6 CD 3 YR 10/28/2025 4.70% 4.70% 249,000$ 249,000$ 249,115$ 249,000$ 115$ Toyota 89235MLE9 CD 5 YR 7/29/2026 0.95% 1.08% 249,000$ 249,000$ 219,424$ 249,000$ (29,576)$ Traid Business 89580DAK8 CD 2.25 YR 8/12/2024 3.10% 3.17% 249,000$ 249,000$ 243,129$ 249,000$ (5,871)$ UBS Bank 90348JP61 CD 5 YR 7/8/2026 0.90% 1.02% 249,000$ 249,000$ 219,215$ 249,000$ (29,785)$ United Heritage 91334AAE3 CD 3 YR 11/4/2025 4.70% 4.68% 249,000$ 249,000$ 250,135$ 249,000$ 1,135$ US Alliance 90352RCU7 CD 5 YR 9/30/2027 4.00% 4.10% 249,000$ 249,000$ 242,668$ 249,000$ (6,332)$ Washington St 939769AC9 CD 1 YR 12/29/2023 5.00% 4.98% 248,000$ 248,000$ 248,883$ 248,000$ 883$ Wells Fargo Bank 9497633X2 CD 2 YR 11/29/2024 4.85% 4.83% 248,000$ 248,000$ 249,121$ 248,000$ 1,121$ SubTotal Corporate Obligations Corporate Issues Sub-Total 12,383,000$ 12,383,000$ 11,813,970$ 12,383,000$ (569,031)$ 5.46% Non-Pooled Total 29,874,409$ 29,466,102$ 28,593,003$ 29,543,728$ (950,725)$ * * *
Grand Total Investments 226,701,921$ 226,293,614$ 219,219,495$ 220,170,220$ (7,151,745)$ 100% Our profolio conforms to our Statement of Investement Policy and is in compliance with Government Code Section 53646, which requires the ability to meet its expediture requirements for the next six months.
Market Value information provided by Local Agency Investment Fund, San Mateo County Investment Pool, and Union Bank. 2 of 3
Shares Held
Current Quarter
203,661,027$ 221,339,492$
226,701,921$ 203,661,027$
23,040,894$
Shares Held Market Value
Percentage of
Portfolio
12,383,000$ 11,813,970$ 5.46%
17,491,409$ 16,779,033$ 7.72%
196,827,512$ 190,795,821$ 86.82%
226,701,921$ 219,388,825$ 100.00%
New Purchases in Quarter ending December 31, 2022
CUSIP TYPE TERM PURCHASE DATE
INTEREST
RATE AMOUNT
NEWBURYPORT SAVING BANK 651023FQ1 CD 4 YR 10/6/2022 4.00% 244,000$ PARKWAY BANK 70153RLK2 CD 2 YR 10/6/2022 4.05% 244,000$ FARMERMAC 31422XGQ9 BOND 4 YR 10/12/2022 0.94% 1,000,000$ Federal Home Loan Bank 313ATBC0 BOND 2 YR 4 MO 10/12/2022 4.30% 1,180,000$ MOUNTAIN AMERICA 62384RAQ9 CD 5 YR 10/14/2022 4.70% 249,000$ FED FARM CREDIT 3133ENEY2 BOND 9 MO 10/28/2022 4.52% 5,000,000$ TEXAS EXCHANGE BANK SSB 88241TPD6 CD 3 YR 10/28/2022 4.70% 249,000$ FIRST CITIZENS BANK/TRUST 319477AN5 CD 3 YR 10/28/2022 4.70% 244,000$ SHARONVIEW 819866BR4 CD 3 YR 10/31/2022 5.00% 249,000$
UNITED HERITAGE 91334AAE3 CD 3 YR 11/4/2022 4.75% 249,000$ FIRST FOUNDATION BANK 32026UYX8 CD 2YR 11/21/2022 4.80% 244,000$ ALABAMA CREDIT 01025RAD1 CD 2 YR 11/22/2022 4.90% 249,000$ OHLAHOMAS CREDIT 67886WAC1 CD 2 YR 11/22/2022 4.90% 249,000$ AUSTIN TELCO 052392CC9 CD 4 YR 11/28/2022 5.05% 248,000$ WELLSFARGO BANK 9497633X2 CD 2 YR 11/28/2022 4.85% 248,000$ FORBRIGHT BANK 34520LAY9 CD 5 YR 12/15/2022 4.00% 248,000$ FIRST FOUNDATION BANK 32026UZR0 CD 2 YR 12/15/2022 4.50% 244,000$ SYNOVOUS BANK 87164DUU2 CD 2 YR 12/16/2022 4.50% 244,000$ FIDELITY CO-OPERATIVE BANK 316077EV4 CD 3 YR 12/21/2022 4.85% 248,000$ WASHINGTON STATE 939769AC9 CD 1 YR 12/29/2022 5.00% 248,000$ ALLIANT CU 01882MAA0 CD 5 YR 12/30/2022 4.85% 248,000$
Matured Investments in Quarter ending December 31, 2022
CUSIP TYPE TERM MATURITY DATE
INTEREST
RATE AMOUNT
MERRICK BANK 59013KEL6 CD 3 YR 12/30/2022 2% 247,000.00$ Beginning Value
CITY OF DALY CITY
NORTH SAN MATEO COUNTY SANITATION DISTRICT
Principal Portfolio Summary
Fiscal Year 2022-2023
Quarter ending December 31, 2022
NAME
Ending Value
Investment Loss/Gain
Government Obligations
Corporate Obligations
Pooled Investments
NAME
Shares Held
Government Obligations
Corporate Obligations
Pooled Investments
City Council Meeting Agenda Report Item #
Meeting Date: February 27, 2023
Subject: Presentation of the Fiscal Year 2022 Annual Comprehensive Financial Report Recommended Action
Acceptance by motion of the fiscal year 2022 Annual Comprehensive Financial Report.
Background
The financial records of the City of Daly City are subject to an annual independent audit, which is performed by Maze & Associates. The audit is performed in conformance with generally accepted auditing standards in the United States and includes a comprehensive review of the financial records and the internal control procedures in place which safeguard the City’s assets.
Discussion
The Independent Auditor’s Report contained in the Annual Comprehensive Financial Report (ACFR) indicates that the financial statements present fairly, in all material respects, the financial position of the City as of June 30, 2022. This opinion is considered “clean” or “unmodified”, which means that the financial records reflect appropriately the financial activity of fiscal year 2022.
The ACFR contains the financial activity of all of the City’s funds and account groups. It is presented in a manner designed to fairly set forth the financial position and results of operations of the City as measured by the financial activity of various funds. All disclosures necessary to enable the reader to gain maximum understanding of the City's financial activities are included.
Each year the ACFR is submitted to the Government Finance Officers Association award program for the Certificate of Achievement for Excellence in Financial Reporting. Daly City received the award for the prior fiscal year 2021 and staff anticipates that the City will be successful in attaining the award for fiscal year 2022.
Summary/Conclusion
Staff recommends acceptance of the fiscal year 2022 Annual Comprehensive Financial Report. Staff is available to provide any additional information desired by the Mayor or Councilmembers.
Respectfully submitted,
Timothy J. Nevin
Director of Finance and
Administrative Services
Attachments: Fiscal Year 2022 Annual Comprehensive Financial Report
Annual Comprehensive
Financial Report
For the Fiscal Year
Ended June 30, 2022
City of Daly City,
California
CITY OF DALY CITY, CALIFORNIA
ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED
JUNE 30, 2022
Prepared by
DEPARTMENT OF FINANCE
AND
ADMINISTRATIVE SERVICES
Tim Nevin
Director
CITY OF DALY CITY
ANNUAL COMPREHENSIVE FINANCIAL REPORT
TABLE OF CONTENTS
I INTRODUCTORY SECTION
Page
Letter of Transmittal
................................................................................................................................. v Organization Structure .............................................................................................................................. xvi City Council and Administration and Department Heads ....................................................................... xvii Certificate of Achievement for Excellence in Financial Reporting ........................................................ xviii
II FINANCIAL SECTION
Independent Auditor’s Report .................................................................................................................. 1 Management’s Discussion and Analysis ................................................................................................. 5 Basic Financial Statements:
Government-wide Financial Statements:
Statement of Net Position ........................................................................................................ 20 Statement of Activities ..................................................................................................... ........ 21 Fund Financial Statements:
Governmental Funds:
Balance Sheet ........................................................................................................................ 24 Reconciliation of the Governmental Funds Balance Sheet with the Statement of Net Position ................................................................................................ 25 Statement of Revenues, Expenditures, and Changes in Fund Balances .............................. 26 Reconciliation of the Net Change in Fund Balances - Total Governmental Funds with the Statement of Activities ........................................................................... 27 i
CITY OF DALY CITY
ANNUAL COMPREHENSIVE FINANCIAL REPORT
TABLE OF CONTENTS
Page
Statement of Revenues, Expenditures, an d Changes in Fund Balance – Budget and Actual:
Ge neral Fund ............................................................................................................................ 28
Gas Tax Special Revenue Fund ......................................................................................... 30
Grants Special Revenue Fund ............................................................................................ 31
Measures A and W Special Revenue Fund ....................................................................... 32
Proprietary Funds:
Statement of Net Position ................................................................................................. 33
Statement of Revenues, Expenses and Changes in Fund Net Position ............................ 34
Statement of Cash Flows .................................................................................................. 35
Fiduciary Funds:
Statement of Fiduciary Net Position ..................................................................................38
Statement of Changes in Fiduciary Net Position ...............................................................39
Notes to Basic Financial Statements .......................................................................................... 41
Required Supplementary Information:
Schedule of Changes in the Net Pension Liability and Related Ratios – Pension Plans ........... 88
Schedule of Contributions - Pension Plans ................................................................................ 90
Schedule of Changes in the Net OPEB Liability and Related Ratios ........................................ 91
Schedule of Contributions – Other Post-Employment Benefits Plan. ....................................... 92
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CITY OF DALY CITY
ANNUAL COMPREHENSIVE FINANCIAL REPORT
TABLE OF CONTENTS
Page
Supplemental Information:
General Fund:
Combining Fund Balance Sheet .......................................................................................... 94 Combining Fund Schedule of Revenues, Expenditures and Changes in Fund Balance ..... 95 Major Governmental Funds Other than General Fund and Special Revenue Funds:
Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual:
Capital Projects Fund .......................................................................................................... 98 Nonmajor Governmental Funds:
Combining Balance Sheet ................................................................................................. 100 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances ........................................................................................................... 101 Combining Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual ......................................................................... 102 Internal Service Funds:
Combining Statement of Net Position ............................................................................... 106 Combining Statement of Revenues, Expenses and Changes in Fund Net Position .......... 108 Combining Statement of Cash Flows ................................................................................ 110 Custodial Funds:
Combining Statement of Net Position .............................................................................. 114 Combining Statement of Changes in Net Position ........................................................... 115 iii
CITY OF DALY CITY
ANNUAL COMPREHENSIVE FINANCIAL REPORT
TABLE OF CONTENTS
Page
III STATISTICAL SECTION
Net Position by Component - Last Ten Fiscal Years .......................................................................... 119 Changes in Net Position - Last Ten Fiscal Years ................................................................................ 120 Fund Balances of Governmental Funds - Last Ten Fiscal Years ........................................................ 124 Changes in Fund Balance of Governmental Funds – Last Ten Fiscal Years ..................................... 126 Assessed Value of Taxable Real Property - Last Ten Fiscal Years .................................................... 128 Direct and Overlapping Property Tax Rates - Last Ten Fiscal Years ................................................. 129 Principal Property Tax Payers – Current Year and Nine Years Ago .................................................. 130 Property Tax Levies and Collections – Last Ten Fiscal Years ........................................................... 131 Ratio of Outstanding Debt by Type – Last Ten Fiscal Years ............................................................. 132 Ratio of General Bonded Debt by Type – Last Ten Fiscal Years ....................................................... 133 Computation of Direct and Overlapping Debt .................................................................................... 134 Computation of Legal Bonded Debt Margin ....................................................................................... 135 Water Utility Fund - Number of Connections by Users as of June 30, 2022 .................................... 136 Water Utility Fund - Certificates of Participation Historical Revenues, Expenditures and Bond Coverage – Last Ten Fiscal Years .................................................................................................... 136 Demographic and Economic Statistics - Last Ten Fiscal Years ......................................................... 138 Principal Employers – Current Year and Ten Years Ago ................................................................... 139 Full-Time City Government Employees by Function – Last Ten Fiscal Years ................................. 140 Operating Indicators by Function/Program – Last Ten Fiscal Years .................................................. 142 Capital Asset Statistics by Function/Program – Last Ten Fiscal Years .............................................. 144 iv
City of Daly City
333 – 90TH STREET
DALY CITY, CALIFORNIA 94015-1895
v
January 24, 2023
Honorable Mayor
Members of the City Council
Citizens of Daly City
We are pleased to present the Annual Comprehensive Financial Report (ACFR) of the City of Daly City for the Fiscal Year (FY) ended June 30, 2022. The goal of the independent audit is to provide reasonable assurance that the financial statements are free of material misstatements and presented in conformity with generally accepted accounting principles (GAAP).
The City has contracted with Maze and Associates, independent Certified Public Accountants (CPAs), to perform the audit of these financial statements. The auditors have issued an “unmodified” opinion on the City of Daly City’s financial statements. This is the most favorable conclusion and is commonly known as an “unmodified” or “clean” opinion.
The auditor’s report is located at the front of the financial section of this report.
This letter of transmittal is designed to complement the Management’s Discussion and Analysis (MD&A) and should be read in conjunction with it. The MD&A can be found immediately following the report of the independent auditors.
Management assumes full responsibility for the completeness and reliability of the information contained in this report, based on a comprehensive framework of internal controls that are established for this purpose. Since the cost of internal controls should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements.
The independent audit is part of a broader federally mandated Single Audit, designed to meet the requirements of federal grantor agencies. The standards governing Single Audits require the independent auditor to report on the fair presentation of the financial statements as in the normal audit, but also require the independent auditor to report on the City’s internal controls and compliance with legal requirements specific to the federal grants. These reports are part of the separately issued Single Audit Report that is provided to the appropriate federal agencies.
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PROFILE OF THE CITY
The City of Daly City is one of the largest cities in San Mateo County with an estimated population of 102,875 as of January 2022. Daly City is an urbanized, coastal community located at the northern edge of San Mateo County, comprising approximately 7.7 square miles of substantially developed area. The City is known as the "Gateway to the Peninsula", and its area extends to the Pacific Ocean on the west, and nearly to San Francisco Bay on the East. Daly City abuts San Bruno Mountain, a State and County Park, which features the highest peak in the area’s hilly terrain. It is strategically located and is central to major growth areas of San Francisco and San Mateo counties.
Daly City was incorporated on March 22, 1911, as a General Law City. It is governed by a council-manager form of government. There are five council members who serve overlapping terms of four years, and the City Council, in turn, elects one of the council members to serve as Mayor each year. The City Council appoints the City Manager and the City Attorney. The City Manager is the chief executive officer. It is the City Manager's responsibility to hire department heads for each of the City functions, to propose the biennial budget, to coordinate and oversee all activities of the organization, and to implement the laws, policies, and budgets adopted by the City Council.
The City of Daly City is a full-service city providing a full range of municipal services.
These services include police, fire, library, recreation, street construction and maintenance, traffic signalization and control, engineering, code enforcement, parks operations and maintenance, general administration, planning, and community development. The City also provides water services and sanitary sewer services. Operating and capital costs for these services are maintained in enterprise funds and are funded by user rates or debt proceeds.
The ACFR includes all funds and accounts of the City of Daly City and its blended component units. The financial statements include the financial activities of the City, the North San Mateo County Sanitation District, the Daly City Public Facilities Financing Corporation, and the Daly City Housing Development Finance Agency. The financial operations of the City and the other entities included in this financial report are closely related. City Council members serve as the governing board of the District, Corporation and Agency. The City Manager also serves as the General Manager of the Sanitation District, which is included in the proprietary fund types as an enterprise fund.
The budget serves as the foundation for the City’s financial planning and control. Using the Guiding Principles and Priorities established by the City Council, departments submit budget proposals to the City Manager for review. The City Manager’s Proposed Budget is presented to the City Council during public budget meetings. Changes as directed by the City Council are made and the budget is submitted for final adoption before July 1, the beginning of the next budget cycle. When completing a biennial budget cycle, budgets for each of the two years covered are appropriated separately. Departments are responsible for
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managing within the City Council appropriated budget. Budget amendments are often necessary due to changes in economic conditions and other circumstances occurring during the first year of a biennial budget.
FACTORS AFFECTING FINANCIAL CONDITION
Economic Indicators
According to the Federal Open Market Committee, United States GDP in 2022 is expected to grow 0.2% whereas the average GDP change in 2021 was 5.5%, compared to -2.3% in 2020 and 2.6% in 2019. Although the flat growth rate is an improvement over the negative growth rates resulting from the COVID-19 pandemic, the rates still reflect a possible future recession. Also due to the pandemic, California unemployment hit a record high of 16.4% in May 2020 and then reached a new low of 3.4% in May of 2022 as the State recovered.
However, the return to low unemployment may not last as the Federal Reserve increases interest rates in response to rising inflation. As of August 2022, the unemployment rate had risen to 4.1%. The greatest risks to the forecast of the U.S. economy stem from supply chain and labor supply concerns, future variants of the COVID-19 virus, rising interest rates and concerns over inflation, and the ongoing conflict in Ukraine. Any or all of these could negatively impact exports and business investment.
In California, especially in the San Franci sco Bay Area, housing prices continue to be increasingly expensive and unaffordable, particularly for first time homebuyers. The U.S.
Home Price Growth on a year-over–year basis as measured by the Case-Shiller 20-City Composite Home Price Index has continued to increase at a steady pace with a 15.8% increase in July 2022, compared with a 19.9% increase in July 2021. The housing market continues to be equally challenging for California renters, many of whom need to spend more than half of their income on rent. Housing market research suggests that continued limited supply compared to demand is one of the major causes of high housing costs in the coastal California region.
Local Economy and Fiscal Challenges
General Fund revenues for FY 2022 increased by $22.9 million to $112.7 million. This is primarily due to an increase of $8.6 million in sales taxes because of a rebound in sales taxes following the pandemic and the addition of Measure Q revenues, an increase in property taxes due to a one-time payment of previous shortfalls in In-Lieu Vehicle License Fees, and the recognition of $8.5 million in one-time American Rescue Plan Act (ARPA) funds. General Fund expenditures increased by $10.8 million to $106.6 million, of which about $9.5 million was due to salary and benefit increases resulting from negotiated cost of living increases and new Measure Q positions.
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Enterprise Funds
The City’s two major enterprise funds, the Water Utility Fund and Sanitation District Fund, derive revenue from water usage.
Revenues for the Water Utility Fund increased by $2.3 million to $26.2 million in FY 2022 mainly due to an annual water rate increase. Expenses decreased $1.6 million to $15.1 million in FY 2022 reflecting a decrease in the PERS liability for the Water Utility Fund.
Sanitation District Fund operating revenues increased by only $0.2 million to $23.8 million in FY 2022, remaining mostly flat. Although the Sanitation District adopted a 5% increase in rates in FY 2022, water usage was down leading to the flat revenues.
Operating expenses decreased by $7.7 million to $20.7 million in FY 2022 because of the decrease in the PERS liability for the Sewer Enterprise Fund.
LONG RANGE FINANCIAL PLANNING
The City employs a ten-year financial fore casting model to ensure accountability of service levels and to plan for future challenges. Long-range financial planning enables the City to foresee potential budget issues, giving the City sufficient time to respond to and analyze the long-term financial impact, as well as to take appropriate action before a problem develops. In addition, the long-range financial planning serves as a key planning tool for future budgets and decision-making.
Many of the fiscal drivers within the ten-year forecast are outside the City’s control. This includes changes in the national and local economy; federal and state legislation; and CalPERS actuarial assumptions, investment returns, and the resulting impact on employer contribution rates. In addition, due to the passage of Propositions 13, 218, and 26 in California, the City has no ability to institute taxes and assessments without voter approvals. For a ballot measure to be successful, there must be broad community support for the use of the tax and an outside group who will champion the tax or assessment increase.
Given the current and forecast budget challenges, the City has implemented a multi- pronged approach to address long-term fiscal challenges and to ensure the sustainability of the City’s finances into the future.
1. Evaluate General Fund and other reserves . The City’s Reserves policy is to maintain General Fund unassigned fund bala nce equal to 17% of annual operating expenditures. Maintaining the reserve target of 17% requires closely monitoring the balance between revenues and expenses on an ongoing basis. The General Fund reserve provides a buffer to the City in the event of unexpected reductions in revenues or increases in costs.
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2. Identify other potential sources of revenues. Over the next ten years, General Fund expenses will continue to increase beyond the City’s ability to fund with current revenue sources. The City was successful with ballot measures on a cannabis business license tax and increases for transient occupancy tax and business license tax in the November 2018 General Election. In addition, the Daly City voters approved Measure Q – the Daly City Local Recovery and Relief Measure – in November 2020, which added a transaction and use tax of one-half cent to the total sales tax rate as of April 2021. The City will continue to identify other potential sources of new revenue and evaluate City fees to ensure cost recovery of services provided.
3. Promote economic development and business expansion. While Daly City is largely built out, there are several development opportunities on the former Daly City Redevelopment Agency parcels. If realized, they will generate new sales, property, business license and transient occupancy taxes. In FY 2022, the City continued to explore a proposed development on the former Redevelopment Agency parcels. Additionally, the City plans to update its economic development strategy to identify new opportunities for expanding and diversifying the economic base to ensure long-term fiscal sustainability.
4. Pre-fund Pension and Other Post-Employment Benefits (OPEB). In April 2017, the City Council authorized participation in the Section 115 Trust Program which allowed the City to set aside funds towards OPEB costs and help reduce the unfunded liability.
The City continued to contribute to this Program in FY 2022. In May 2017, the City Council also authorized participation in a Section 115 Trust to pre-fund pension costs and prepare for pension increases due to changes in CalPERS actuarial assumptions and discount rates.
The Section 115 Trust Program will provide the City with an alternative to sending funds to CalPERS that will allow for greater control of the assets held in the trust and risk tolerance level for the investment. Other potential benefits include pension rate stabilization. Assets in the Trust Program can be transferred to CalPERS at the City’s discretion, which could reduce large fluctuations in employer contributions to CalPERS.
5. Complete comprehensive asset condition assessment and capital improvement plan. In 2017, the Public Works Department started the process by completing the Facilities Condition Assessment. The project included development of an automated inventory of City facilities, evaluation of existing conditions of facilities, prioritization of deficient conditions, and development of short- and long-range maintenance needs.
Since then, the Public Works Department has completed the ADA Self Evaluation and Transition Plan, has developed the Parks and Open Space Master Plan, and has updated the City’s Pavement Management System Report. The findings from the above planning documents will be incorporated into a future Capital Improvement Plan for budgeting purposes. Future planning studies to be performed include a Storm Drain Master Plan, Water Master Plan, Sanitary Sewer Master Plan, and Seismic Evaluation of Critical
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Facilities. Results of these studies will identify needed work to properly maintain the City’s infrastructure. It is imperative to have a comprehensive understanding of the infrastructure needs of the City, so that resources can be identified, and a long-term budget plan developed.
MAJOR INITIATIVES
During FY 2022, under the leadership of the City Council, several outstanding key programs and projects were successfully undertaken by the City.
Economic and Community Development
The Economic and Community Development Department has continued to provide its regular services throughout the pandemic, while implementing a variety of new programs and policies. Aside from the typical permit issuance and building inspections, the Building Division brought forward a new ordinance that creates an expedited permit process for the installation of new electrical vehicle charging stations. Planning Division and Economic Development staff worked to amend the Home Occupation Ordinance to allow Micro-Enterprise Home Kitchen Operations within residents’ homes, creating new business opportunities for residents. Additionally, Economic Development staff initiated the retail cannabis permitting program and processed four cannabis applications throughout the City and expects to have cannabis retailers open for business by the end of 2022. The Housing Division continued to administer the federal funding that was provided to help households that were aff ected by COVID-19 through rental assistance, food distribution, and mental health services. The Housing Division has also initiated efforts to establish a low-income daycare facility on City property using ARPA funds. Many significant construction projects initiated and/or completed construction; including a Carvana vehicle vending facility, three drive-through restaurants, faculty housing at M. Pauline Brown Elementary School, and a significant retrofit of DC Station to allow for life science businesses.
Library and Recreation Services
The Department of Library and Recreation Services continued to return to the “new normal”. On July 1, 2021, the Recreation Division began offering rental facilities so the Daly City community could reserve spaces for personal gatherings and events. In the first full year back after our closure to the public, we were able to secure 326 rentals in a modified setting. The Afterschool Youth Recreation Program served 908 participants at five school locations, while the Summer Youth Recreation Program served over 1,026 youth at three recreation locations. The senior lunch program continued providing five (5) home-cooked meals with all the components to qualify for the San Mateo County Congregate Meal Program. Through the Grab & Go, modified Home Delivery, Second Course, and in-person programs, the senior services unit was able to serve over 54,440 meals to those in need. Our athletic leagues and programs, such as Youth Basketball and Mini Hoops, were modified to serve our participants in a safe and meaningful way and
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served over 644 participants. We continued to provide our modified “drive-through” special events, including the popular Trunk or Treat and Frosty Fest events, sharing happiness with over 500 youth. Spring Fun Day was the first community event that was back in-person, and it served over 410 participants. Our contract instructors provided in- person, fitness-focused enrichment classes to our Daly City community, serving over 12,607 participants. Over 258 volunteers and volunteens were welcomed back as well and accumulated over 8,421 hours of volunteer/volunteen service.
By the beginning of FY 2022, the Library Division had all four facilities open to the public with full operating hours at Serramonte Main and Westlake Libraries. The John Daly and Bayshore Libraries opened to five days a week as of February 28, 2022, after operating with a two to three day-a-week schedule since 2013, due to the approval of Measure Q by Daly City voters. With library buildings open once again, there were 135,132 visits from community members in FY 2022. Circulation of physical materials was 337,729, 14% below FY 2019, the last full year of regular operations, and eBooks and other electronic materials usage increased over 20% to its highest level, 76,446. The Library transitioned from virtual programs back to in-person programs in May 2022. Staff provided 103 virtual programs during the year with an attendance of 1,572 and, starting in the summer, hosted 78 in-person programs with 4,671 attending. Resumption of in- person programs kicked off with a full schedule of hands-on Summer Learning programs for youth and weekly early literacy story times at all four libraries.
North County Fire Authority
The North County Fire Authority (NCFA) ac hieved an overall “Customer Satisfaction” rating of 98% in the delivery of emergency and non-emergency services. NCFA developed and implemented a Pandemic Response Plan covering preparedness, response, personnel protective equipment, illnesses, operational readiness, and continuity of operations. The NCFA provided high quality Basic Life Support and Advanced Life Support (ALS) assessment and interventions to emergency medical incidents utilizing our paramedic fire engine and truck companies, in which over half of total EMS calls benefited and served senior citizens. The NCFA achieved an average response time of 5 minutes and 36 seconds for a fire engine or truck company to arrive at all emergency incidents.
Fire Prevention Services completed pre-fire engineering and plan check reviews and inspections for new construction projects, tenant improvements, alarm installations and suppression systems, additionally completed a fire “cause and origin” analysis and investigation for all fire incidents. Further, NCFA completed annual mandated and required fire and life safety code complia nce inspections covering all business, multi- family and permitted occupancies. NCFA presented throughout the year Basic Emergency Preparedness, Individual and Family Preparedness seminars, as well as Community Emergency Response Team (CERT) classes through a virtual format due to
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the COVID pandemic. NCFA provided fire engine companies and chief officers to numerous major wildfire incidents throughout the State of California.
Police Department
The Police Department maintains our commitment towards service-based policing, often leading the industry in community engagement, policing tactics, and policy adaptation.
We continue to participate in local and regional task forces focused on drug, vehicle theft, and gang prevention. We partnered with local agencies in a Multidisciplinary Accident Investigation Team (MAIT), sharing resources during complex collision investigations.
We remain committed to our supportive partnerships with the Community Overcoming Relationship Abuse (CORA), the Homeless Outreach Team (HOT), and other County entities providing invaluable services to our community.
Our Body Worn Camera program has been active for one year and our vehicle mounted cameras have been active for several months, supporting community trust through transparency. We are compliant with the Racial and Identity Profiling Act (RIPA – AB953, 2015), a requirement for our agency which began in 2022, and we are successfully uploading new reporting requirements through the California Based Incident Reporting System (CIBRS).
The Police Department was the first agency in the region to train all sworn staff in Active Bystandership for Law Enforcement (ABLE), a Georgetown Law program geared towards preventing mistakes, misconduct, and promoting officer health and wellbeing for improved community relationships. We continue to maintain a relationship with the Stanford University SPARQ (Social Psychological Answers to Real-World Questions) program, who provided communications training to officers for improved citizen contacts and community relations.
Our Mental Health Clinician supported by Star Vista has been imbedded with the Department for one year and the relationship is proving to be beneficial for the department and the community. The clinician handles upwards of 20+ calls for service every month and provides support to officers in the field when responding on calls for those suffering from a mental health crisis. The co-respons e model has supported de-escalation and a more holistic outcome targeting the needs of those requiring our service.
Public Works Department
The Public Works Department completed several capital improvement projects and continued to provide routine services to the public such as street sweeping, traffic signal and street light maintenance, park maintenance and litter and debris removal. The Department continues to focus on preventative measures to maintain and maximize the useful lifespan of City owned assets such as City vehicles, equipment, and facilities. In addition, Public Works continues to institute protective measures at all City facilities to
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protect City employees, residents, and business customers from the COVID-19 virus.
Installation of air purifiers and increased cleaning protocols continued at all City facilities.
Some completed projects by the Public Works Department include: the Southgate/Callan Traffic Signal Installation Project, the Daly City Traffic Signal Management System Project, the 2019-20 Original Daly City Civic Center Slurry Seal Project, the Gellert Park Restroom, installing a new restroom and site utilities as part of the overall Gellert Park Renovations Project, and the Tennis & Basketball Court Surface Rehabilitation Project.
Work also commenced on the ADA Sidewalk and Parking Lot Improvements Project, the Southgate Avenue and School Street Safety Improvements Project, the Skyline Slurry Seal Project, the Vision Zero Community Outreach Program, the Daly City Crosswalk Enhancement Project, and the Bayshore Public Wi-Fi Project.
The Public Works Department also continues to seek grant funds for the City and was successful in securing additional funds for the John Daly/Skyline Intersection Improvements, Polaris Park, Margate Park, Serramonte Library Improvements, Bayshore Generator Replacement, and Southgate/School Street Quick Strike Improvements.
Department of Water and Wastewater Resources
The Department of Water and Wastewater Resources (DWWR) continued to meet all public health and regulatory requirements associated with the production, treatment, and distribution of high-quality drinking water, along with the collection, treatment, re-use, and disposal of wastewater on behalf of the citizens of Daly City and the North San Mateo County Sanitation District. The Department continued to manage the critically important regional water, wastewater, and stormwater project, the Vista Grande Drainage Basin Improvement Project. DWWR is working diligently with our project partners, the San Francisco Public Utilities Commission (SFPUC), the County of San Mateo, Caltrans, the Olympic Club, and many others in anticipation of a bid date in 2023 and construction start date in 2024.
Drinking water projects continued to be of the highest priority because of the severe drought that endured throughout 2022. A major groundwater pumping project was initiated in January 2022 to construct treatment modifications to the Westlake Pump Station to accommodate additional groundwater from new wells in Daly City. This is a joint project with the SFPUC, and they are reimbursing Daly City for the $5 million cost to construct. Another important groundwater pumping project was approved and funded through ARPA in 2022 to add a new well to Daly City’s water system. Additionally, significant capital improvements were made at the North San Mateo County Sanitation District Wastewater Treatment and Collection F acilities that include concrete structural rehabilitation to the Secondary Clarifiers and Maintenance Building, replacement of carbon media in the plant air scrubbers, and upgrades to the electrical and control systems at the Colma Lift Station. Finally, through California’s Water and Wastewater Arrearage
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Payment Program, funded by ARPA, we were able to provide financial assistance totaling over half a million dollars to residents for unpa id water and wastewater bills related to the COVID-19 pandemic.
AWARDS
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 Daly City for its Annual Comprehensive Financial Report (ACFR) for the fiscal year ended June 30, 2021. This was the 35th consecutive year that the City of Daly City has received this prestigious award.
To be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized annual comprehensive financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our current ACFR continues to meet the Certificate of Achievement Program’s requirements, and we are submitting it to the GFOA to determine its eligibility for another certificate.
In addition, the City also received the GFOA’s Award for Distinguished Budget Presentation for its Comprehensive Operating and Capital Budget for FY 2023. To qualify for the Distinguished Budget Presentation Award, the City’s budget document was judged to be proficient in several categories including policy documentation, financial planning and organization.
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ACKNOWLEGEMENTS
The preparation of the Annual Comprehensive Financial Report on a timely basis was made possible by the dedicated efforts of the Accounting Division of the Department of Finance and Administrative Services. Each individual has our sincere appreciation for the professionalism, dedication and contributions made in the preparation of this report.
Credit must also be given to the Mayor, City Council members and City Department Directors for their support in maintaining the highest standards of professionalism in the management of the City of Daly City’s finances.
Respectfully submitted,
Thomas J. Piccolotti Timothy J. Nevin
City Manager Director of Finance and
A d m i n i s t r a t i v e S e r v i c e s
CITIZENS OF
DALY CITY
CITY CLERK
MAYOR &
COUNCIL
CITY
TREASURER
CITY ATTORNEY
PLANNING
COMMISSION
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COMMISSION
PERSONNEL
BOARD
SMALL
BUSINESS
COMMISSION
LIBRARY BOARD OF
TRUSTEES
ARTS &
CULTURE
COMMISSION
BICYCLE & PEDESTRIAN
ADVISORY COMMITTEE
YOUTH
ADVISORY
COMMITTEE
MOBILE HOME
RENT REVIEW
COMMISSION
CITY MANAGER
ECONOMIC &
COMMUNITY
DEVELOPMENT
FINANCE &
ADMINISTRATIVE
SERVICES
FIRE
HUMAN
RESOURCES
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RECREATION
SERVICES
POLICE
PUBLIC WORKS
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WASTEWATER
RESOURCES
CITY OF DALY CITY
ORGANIZATIONAL STRUCTURE
FISCAL YEAR 2022
CITY OF DALY CITY
CITY COUNCIL
JUNE 30, 2022
Dr. Rod Daus-Magbual, Mayor
Raymond A. Buenaventura, Vice Mayor
Glenn R. Sylvester
Pamela DiGiovanni
Juslyn C. Manalo
K. Annette Hipona
City Clerk
Daneca Halvorson
City Treasurer
ADMINISTRATION AND DEPARTMENT HEADS
Thomas J. Piccolotti
Rose Zimmerman
Richard Chiu Jr.
Cameron Christensen
Timothy Nevin
Tatum Mothershead
Ron Myers
Thomas J. Piccolotti
Natalie Sakkal
Interim City Manager
City Attorney
Director of Public Works
Acting Police Chief
Director of Finance and Administrative Services
Director of Economic & Community Development
Fire Chief
Director of Water & Wastewater Resources
Director of Human Resources
xvii
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Daly City
California
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2021
Executive Director/CEO
xviii
INDEPENDENT AUDITOR’S REPORT
Honorable Mayor and Members of the
City Council of the City of Daly City, California
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the g overnmental activities, the
business-type activities, each major fund, and the aggregate remaining fund information of the City of Daly City, California, as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the Table of Contents.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund informatio n of the City as of June 30, 2022, and the respective changes in financial position and, where applicable, cash flows thereof and the respective budgetary comparisons lis ted in the Table of Contents as part of the basic financial statements for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditi ng standards generally accepted in the United States of America and the standards applicable to financial audits co ntained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in th e Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We ar e required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirement relating to our audit. We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinions.
Responsibilities of Management’s for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error.
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In preparing the financial statements, manageme nt is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulti ng from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if, individually or in the aggregate, they could reasonably be expected to influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards, we:
Exercise professional judgment and maintain professional skepticism throughout the audit.
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, no such opinion is expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by manage ment, as well as evaluate the overall presentation of the financial statements.
Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
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Change in Accounting Principles
Management adopted the provisions of the following Governmental Accounting Standards Board Statement No. 87 – Leases, which became effective during the year ended June 30, 2022 and required the restatement certain balances as discussed in Note 12E to the financial statements:
The emphasis of this matters does not constitute a modification to our opinions.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that Management’s Discussion and Analysis and other Required Supplementary Information as listed in the Table of Contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who consid ers it to be an essential part of financial reporting for placing the basic financial statemen ts in an appropriate operational, economic or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for co nsistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on th e financial statements that collectively comprise the City’s basic financia l statements. The accompanying Supplementary Information, as listed in the Table of Contents, is presented for purposes of additional analysis and is not a required part of the basic financial stat ements. Such information is the responsibility of management and was derived from and relates di rectly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of Am erica. In our opinion, the Supplementary Information is fairly stated, in all material respects, in relation to the basic financial statements as a whole.
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Other Information
Management is responsible for the other informa tion included in the annual report.
The other
information comprises the Introductory Section and Statistical Section listed in the Table of Contents, but does not include the basic financial statements and our auditor’s report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon.
In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inco nsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exits, we are required to describe it in our report.
Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated January 24, 2023, on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.
Pleasant Hill, California
January 24, 2023
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MANAGEMENT’S DISCUSSION AND ANALYSIS
This narrative overview and analysis of the City of Daly City’s financial results provides an overview of the City’s financial activities for the year ended June 30, 2022.
FISCAL YEAR 2022 FINANCIAL HIGHLIGHTS
• At June 30, 2022, net position totaled $175.6 million, an increase of $32.9 million from the prior year total of $142.6 million for both Governmental and Business-Type activities. • Net Position of governmental activities in Fiscal Year (FY) 2022 was $63.1 million compared to $45.1 million in FY 2021, an increase of $17.9 million. • Net Pension and OPEB Liabilities of governmental activities decreased by $58.8 million to $142.8 million in FY 2022 from $201.7 million in FY 2021. • Net Position of business-type activities in FY 2022 was $112.5 million compared to $97.4 million in FY 2021, an increase of $15 million.
• Net Pension and OPEB Liabilities of business-type activities decreased by $17.9 million to $10.7 million in FY 2022 from $28.6 million in FY 2021. • In FY 2022, total City revenues, including program and general revenues, were $182.1 million, while total expenses were $149.2 million.
• Governmental activities program revenues were $41.7 million in FY 2022 compared with $35.2 million in FY 2021. Business-type activities program revenues were $53.1 million in FY 2022 compared with $47.9 million in FY 2021.
• Governmental activities general revenues were $85.8 million in FY 2022 compared with $71.3 million in FY 2021, an increase of $14.4 million over the prior year. Part of this is a $5.5 million increase in property taxes, due to a one-time payment of a previous year’s shortfalls in In-Lieu Vehicle License Fees. Another large part of this increase is $8.6 million in additional sales tax revenues from the rebound in sales tax revenue following the COVID-19 pandemic and the recognition of a full year of the new Measure Q revenues. Business-type activities general revenues were $1.6 million in FY 2022, a decrease of $1.4 million over the prior year. • Unrestricted net position of governmental funds changed from negative ($87.7) million in FY 2021 to negative ($74.5) million in FY 2022, primarily due to an increase in total assets of $24.4 million and a decrease of $58.8 million in ne t pension and OPEB liabilities and related deferred outflows/inflows of resources.
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OVERVIEW OF THE ANNUAL COMPREHENSIVE FINANCIAL REPORT
This Annual Comprehensive Financial Report (ACFR) is in three sections:
1) Introductory Section containing the Transmittal Letter and miscellaneous other information
2) Financial Section containing the Independent Auditor’s Report, this Management’s Discussion and Analysis, the Basic Financial Statements, which include the Government- wide and the Fund Financial Statements, along with the Notes to these financial statements, Required Supplementary Information, and Combining Statements for Non-major Governmental Funds and Fiduciary Funds
3) Statistical Section containing financial trend data and general statistical information about the City
The Basic Financial Statements
The Basic Financial Statements are comprised of the City-wide Financial Statements and the Fund Financial Statements, including the Notes thereto. These two sets of financial statements provide two different views of the City’s financial activities and financial position.
The Government-wide Financial Statements provide a longer-term view of the City’s activities as a whole and are comprised of the Statement of Net Position and the Statement of Activities. The Statement of Net Position provides information about the financial position of the City as a whole, including all its capital assets and long-term liabilities on the full accrual basis, like that used by private corporations. The Statement of Activities provides information about all the City’s revenues and all its expenses, also on the full accrual basis, with the emphasis on measuring net revenues or expenses of each of the City’s programs. The Statement of Activities explains in detail the change in net position for the year.
All the City’s activities are grouped into governmental activities and business-type activities, as explained below. All the amounts in the Statement of Net Position and the Statement of Activities are separated into governmental activities and business-type activities to provide a summary of these two types of activities of the City as a whole.
The Fund Financial Statements report the City’s operations in more detail than the government- wide statements and focus primarily on the short-term activities of the City’s General Fund and other major funds. The Fund Financial Statements measure only current revenues and expenditures and fund balances; they exclude capital assets, long-term debt, and other long-term amounts.
Major funds account for the major financial activities of the City and are presented individually, while the activities of non-major funds are presented in summary, with subordinate schedules presenting the detail for each of these other funds.
The fiduciary statements provide financial information about the assets for which the City acts solely as custodian in its capacity as a fiscal agent.
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The Government-Wide Financial Statements
The Statement of Net Position and the Statement of Activities present information about the following:
• Governmental activities - All the City’s basic services are governmental activities, including general government, public safety, public works, streets and infrastructure, culture and recreation, and economic and community development. These services are supported by general City revenues such as taxes, and by specific program revenues. • Business-type activities - All the City’s enterprise activities are reported here, including water, sewer, and solid waste transport. Unlike governmental services, these services are supported by charges paid by users based on the amount of the service they use.
Government-wide financial statements are prepared on the accrual basis, which means they measure the flow of all economic resources of the City as a whole.
Fund Financial Statements
The Fund Financial Statements provide detailed information about each of the City’s most significant funds, called major funds. Each major fund is presented individually, with all non- major funds summarized and presented only in a single column. Subordinate schedules present the detail of these non-major funds. Major funds present the major activities of the City for the year and may change from year to year because of changes in the pattern of the City’s activities.
Governmental fund financial statements are prepared on the modified accrual basis, which means they measure only current financial resources and uses. Capital assets and other long-lived assets, along with long-term liabilities, are not presented in the governmental fund financial statements.
Enterprise fund financial statements are prepared on the full accrual basis, and include all their assets and liabilities, both current and long-term.
Since the City’s internal service funds provide goods and services only to the City’s governmental and business-type activities, their activities are repor ted only in total at the fund level. Internal service funds cannot be major funds because their revenues are derived from other City funds.
These revenues are eliminated in the City-wide financial statements and any related profits or losses are returned to the activities which created them, along with any residual net position of the internal service funds.
Comparisons of budget and actual financial information are presented only for the General Fund and other major funds that are special revenue funds.
Fiduciary Statements – The City is the fiscal agent for a few small local agencies. Fiduciary activities are reported in the separate Statement of Fiduciary Net Position. These activities are excluded from the City’s other financial statements because the City cannot use these assets to finance its own operations.
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FINANCIAL ACTIVITIES OF THE CITY AS A WHOLE
This analysis focuses on the net position and changes in net position of the City’s governmental activities and business-type activities (Tables 1, 2, and 3) presented in the City-wide Statement of Net Position and Statement of Activities that follow.
Table 1
Net Position at June 30
(in thousands)
Governmental Activities
The City’s net position from governmental activities increased from $45.1 million in FY 2021 to $63.1 million in FY 2022. The increase in the Net Position reflected in the Statement of Activities, is also shown in Table 1. Increases and decreases of individual assets and liabilities include:
• Governmental cash and investments increased $13.9 million from $156.4 million in FY 2021 to $170.3 million in FY 2022. The City’s net position in cash and investments increased because of an increase in governmental revenues including increased sales tax revenues resulting from a rebound in the City’s sales tax revenues as they begin to return to pre-COVID 19 levels and the recognition of a full year of Measure Q revenues. The City’s net position also increased due to a one-time payment of In-Lieu Vehicle License fees from previous year’s shortfalls. In addition, the City received $12.6 million again this year as its second installment of American Rescue Plan Act (ARPA) federal grant funds. 8
• Also on the asset side, other assets increased significantly in FY 2022 to $42.8 million from $31.2 million in FY 2021. This is mostly due to the implementation of GASB 87 in FY 2022. Within the City’s General Fund, the City estimates the value of leases receivables to be $9.1 million.
• In FY 2022, liabilities also decreased significantly by $57.2 million due to several factors.
First, long-term debt decreased because $0.39 million in Housing and Urban Development Section 108 Loan and $3.6 million in Pension Obligation Bonds were retired. Second, net pension and OPEB liabilities decreased $58.8 million because the market value for the City’s pension fund and OPEB trust account increased significantly following strong market returns for the year ending June 30, 2021, the year used to calculate net pension and OPEB liabilities for FY 2022. Finally, the City also received the second tranche of American Rescue Plan Act Funds ($12.6 million), which wa s added to the City’s other liabilities as unearned revenue until the City recognizes the funding.
• Restricted net position increased $5.2 million. The unrestricted net position improved by $13.3 million from $87.7 million in FY 2021 to $74.5 million in FY 2022. The City’s unrestricted net position was negatively impacted in fiscal year 2014-15 with the implementation of GASB 68, which continues to require the disclosure of the City’s unfunded pension liability. The unrestricted net position improved in FY 2022 because of the strong returns from the market as of June 30, 2021, which helped reduce the City’s unfunded pension liability for FY 2022.
Business-type Activities
The net position of business-type activities in creased $15 million to a total of $112.5 million in FY 2022 from $97.5 million in FY 2021. Increases and decreases of individual assets and liabilities are as follows:
• Cash and investments increased $3.6 million in FY 2022, mostly because of an increase in Water Utility revenues, a result of the 9.5% water rate increase. The Sanitation District revenues remained flat in FY 2022 despite a 5% increase is sanitary sewer rates because of the low water usage in FY 2022. At the same time, the Water Utility and Sanitation District received additional grant revenues that added to the cash balance including revenues from the Water and Wastewater Arrearage Payment Program funded by the American Rescue Plan Act.
• In FY 2022, other assets also increased because of the implementation of GASB 87.
Between the three Enterprise funds: the Water Utility, Sanitation District, and Civic Center funds, the estimated value of leases receivables is $9.4 million. Due to the changes resulting from GASB 87, the Civic Center enterprise fund is also now classified as a major fund in the Proprietary Funds Statement of Net Position.
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• Long-term debt decreased $0.9 million due to ongoing debt payments. Investments in infrastructure and major capital improvements continued in FY 2022, though no significant projects were completed. Construction in progress increased to over $10 million, but overall capital assets decreased for the year by $1.7 million as current year depreciation expenses exceeded capital additions.
• Unrestricted net position improved $13.9 million to $45.3 million in FY 2022. Like in the governmental activities funds, the unrestricted net position improved significantly in FY 2022 because of the strong returns from the market as of June 30, 2021, which reduced the Enterprise funds net pension and OPEB liabilities.
Changes in Net Position
Total governmental activities revenue in FY 2022 amounted to $127.5 million compared to $106.5 million in FY 2021, an increase of $20.9 million in FY 2022 due to a variety of factors. This included a one-time increase in property taxes from the payment of In-Lieu Vehicle License Fee revenues from previous fiscal years, the retu rn of sales tax revenues following the COVID-19 pandemic, a full year of new Measure Q revenues, and $8.5 million in American Rescue Plan Act funding that the City recognized during the fiscal year. Governmental expenses decreased by $3.2 million in FY 2022 because of salary savings due to staff vacancies, mainly in the Police Department.
Total business-type activities revenues increased $3.7 million in FY 2022 due to an increase in water utility rate revenues and operating grants and contributions. The expenses decreased $8.8 million due to a decrease in the net pension and OPEB liability for FY 2022.
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Table 2
Changes in Net Position
For Years Ended June 30
(in thousands)
Governmental Activities
Table 3 splits the revenues of the City’s governmental programs into five main areas. Table 4 splits the expenses of the governmental programs into six main areas. The distributions correspond to the programs in the Statement of Activities in which the total Change in Net Position, defined as total program cost less the revenues generated by those specific activities, is negative $(70.2) million.
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Table 3
Governmental Activities - Revenues
For the Year Ended June 30, 2022
(in thousands)
Table 4
Governmental Activities - Expenses
For the Year Ended June 30, 2022
(in thousands)
General
Government,
$1,691
Public Safety,
$12,263
Public Works,
$16,204
Culture &
Recreation,
$4,251
Economic &
Community
Development,
$7,266
Governmental Activities - Revenues
General
Government,
$14,340
Public Safety,
$58,798
Public Works,
$16,153
Culture & Recreation,
$14,580
Economic & Community
Development,
$7,501
Interest on long-term debt,
$729
Governmental Activities - Expenses
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THE CITY’S FUND FINANCIAL STATEMENTS
Governmental Funds
At June 30, 2022, the City’s major governmental funds consisted of the General Fund, Gas Tax Fund, Grants Fund, Measures A and W Fund, and Capital Projects Fund. The focus of the governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City’s financial status.
The General Fund’s total fund balance increased $7.1 million to $70 million in FY 2022 compared to $62.9 million in FY 2021.
General Fund revenues for FY 2022 increased by $22.9 million to $112.7 million from $89.8 million in FY 2021 due to several factors. To begin, the City recognized $8.5 million in one-time American Rescue Plan Act funds during FY 2022 and realized a one-time increase in property taxes from the payment of In-Lieu Vehicle License Fee revenues from previous fiscal years. At the same time, sales tax revenues improved in FY 2022 because of new sales tax revenues from Measure Q and a rebound in sales tax revenues following the pandemic lows. General Fund expenditures increased by $10.8 million to $106.6 million in FY 2022 due to increases in benefits and salaries in accordance with memoranda of understanding, a return to regular programming for the Recreation and Library Department following the COVID-19 pandemic, and new expenditures related to the added Measure Q services. Although the General Fund showed an increase in expenditures, the expenditures were $16.5 million lower than the budget of $123.1 million. This is primarily due to salary savings within the Police Department and elsewhere within the City where the City has seen a high number of vacant positions.
In FY 2022, the Gas Tax Special Revenue Fund total fund balance decreased by $3.7 million to $8.8 million. The balance in this fund represents funds that are legally required to be spent on local roadway projects. All such amounts are budgeted for future expenditure as laid out in the multi- year capital improvement plan. The fund balance decreased in FY 2022 because the City moved Measure A and Measure W funds out of the Gas Tax Special Revenue Fund and into their own funds for better tracking of capital project expenses. After removing the Measure A and W funds from the Gas Tax Fund, its revenues decreased in FY 2022 by $1.2 million because the City received less in Federal Grant funds. Gas Tax Special Revenue Fund expenditures decreased $3.9 million in FY 2022.
The Capital Projects Fund total fund balance decreased $1.3 million in FY 2022 to $27.1 million compared to $28.4 million in FY 2021. This fund is designated for specific capital projects that will benefit the community. Capital Projects F und revenues decreased $1 million in FY 2022 to $1.8 million. Capital Projects Fund expenditures increased $0.6 million in FY 2022.
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Enterprise Funds
The City has three major enterprise funds: the Water Utility Fund, the Sanitation District Fund and the Civic Center Fund.
Water Utility operating revenues in FY 2022 increased $2.3 million to $26.2 million compared to FY 2021 due to an increase in revenues related to a 9.5% water rate increase. Operating expenses decreased $1.6 million in FY 2022 to $15.1 million because of a reduction in the net pension and OPEB liabilities.
Sanitation District operating revenues increased $0.2 million to $23.8 million in FY 2022 because water usage decreased even though the sanitary sewer rates increased by 5%. Operating expenses decreased by $7.7 million to $20.7 million in FY 2022 primarily due to the reduction in net pension and OPEB liabilities.
The Civic Center Fund became a major fund this year due to the implementation of GASB 87 and the addition of leases receivables for building leases within the Fund. The Civic Center Fund assets increased by $9.4 million to $14 million in FY 2022 due to the leases receivables adjustments.
General Fund Budgetary Highlights
The City typically uses a biennial budgeting process. Two individual budget years are proposed to the City Council at the same time, with mid-budget adjustments at the end of the first of the two years. This process provides more opportunity for long-term planning but does require adjustments based on changing economic conditions. However, due to the continuing economic uncertainties created by the COVID-19 pandemic, the City completed a one-year budget process for FY 2022.
Revenues were close to budget in FY 2022 because some revenues were less than expected and others were more. The City budgeted $5.9 million more in American Rescue Plan Act funds that was recognized in FY 2022. At the same time sales tax revenues were better than budgeted and the City received a one-time payment of additi onal In-Lieu Vehicle License fees from previous year’s shortfalls that was not in the budget. Expenditures were below final budgeted amounts by $16.5 million, mostly because of staffing vacancies.
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Table 5
General Fund
Statements of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual
For the Year Ended June 30, 2022
(in thousands)
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CAPITAL ASSETS
At the end of FY 2022 the City had $165.3 million, net of accumulated depreciation, invested in a broad range of capital assets, as shown in Table 6 below (further detail may be found in Note 4 to the financial statements):
Table 6
Capital Assets Net of Depreciation at June 30
(in thousands)
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DEBT ADMINISTRATION
Each of the City’s debt issues is discussed in detail in Note 5 to the financial statements. At June 30, the City’s debt was comprised of:
Table 7
Outstanding Debt
(in thousands)
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ECONOMIC FACTORS
During fiscal year (FY) 2021-22, the City did start to see a recovery in revenues as the City and its businesses returned to more normal operations following the COVID-19 health emergency. The City experienced an increase in sales taxes in FY 2022, bringing it closer to pre-pandemic levels.
The City also received a full year of Measure Q revenues in FY 2022, which also increased overall sales tax revenues. This new sales tax revenue resulted from the passage of Measure Q - the Daly
City Local Recovery & Relief Measure, approved by voters in November 2020. Unfortunately, expenditures continued to rise for the City as inflation and other supply and demand factors began to affect the cost of labor as well as services and supplies. The City was fortunate to receive a total of $25.3 million in American Rescue Plan Act funds to support the City’s recovery.
ADDITIONAL INFORMATION
This Annual Comprehensive Financial Report is intended to provide citizens, taxpayers, investors, and creditors with a general overview of the City’s finances. Questions about this Report should be directed to the Department of Finance and Administrative Services, 333 90th Street, Daly City California, 94015. Additional information about the City of Daly City, including our budget documents, can be found at www.dalycity.org.
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STATEMENT OF NET POSITION AND
STATEMENT OF ACTIVITIES
The Statement of Net Position and the Statement of Activities summarize the entire City’s financial activities and financial position. They are prepared on the same basis as is used by most businesses, which means they include all the City’s assets and deferred outflows of resources and all its liabilities and deferred inflows of resources, as well as all its revenues and expenses. This is known as the full accrual basi s—the effect of all the City’s transactions is taken into account, regardless of whether or when cash changes hands, but all material internal transactions between City funds have been eliminated.
The Statement of Net Position reports the difference between the City’s total assets and deferred outflows of resources and the City’s total liabilities and deferred inflows of resources, including all the City’s capital assets and all its long-term debt. The Statement of Net Position focuses the reader on the composition of the City’s Net Position, by subtracting total liabilities from total assets.
The Statement of Net Position summarizes the financial position of all of the City’s Governmental Activities in a single column. The City’s Governmental Activities include the activities of its General Fund, along with all its Special Revenue, Capital Projects and Debt Service Funds.
The Statement of Activities reports increases and decr eases in the City’s Net Position. It is also prepared on the full accrual basis, which mean s it includes all the City’s revenues and all its expenses, regardless of when cash changes hands. This differs from the “modified accrual” basis used in the Fund financial statements, which reflect only current assets, current liabilities, available revenues and measurable expenditures.
The Statement of Activities presents the City’s expenses first, listed by program. Program revenues—that is, revenues which are generated directly by these programs—are then deducted from program expenses to arrive at the net expense of each governmental program. The City’s general revenues are then listed in the Governmental Activities and the Change in Net Position is computed and reconciled with the Statement of Net Position. 19
CITY OF DALY CITY
STATEMENT OF NET POSITION
Governmental Business-Type
Activities Activities Total
ASSETS
Cash and investments (Note 1G) $170,326,137 $55,220,505 $225,546,642 Cash with fiscal agent (Note 1G) 1,447 11,325 12,772
Restricted cash (Note 1G) 4,332,892 4,332,892
Accounts receivable, net 12,713,457 8,161,457 20,874,914 Inventories (Note 1H) 235,108 2,071,279 2,306,387
Prepaids (Note 1H) 361,843 5,580 367,423
Internal balances (Note 6) (1,070,547) 1,070,547
Notes receivable (Note 13) 1,623,472 1,623,472
Loan receivable from Successor Agency (Note 14C) 12,142,785 12,142,785 Leases receivable (Note 7) 9,055,050 9,418,273 18,473,323 Property held for development (Note 1C) 3,366,888 3,366,888 Capital assets (Note 4):
Nondepreciable capital assets 38,821,656 12,888,969 51,710,625 Depreciable capital assets, net 59,162,652 54,445,599 113,608,251 Total Assets 311,072,840 143,293,534 454,366,374
DEFERRED OUTFLOWS OF RESOURCES
Related to pension (Note 8D) 25,947,378 1,702,126 27,649,504 Related to OPEB (Note 9E) 4,269,185 659,921 4,929,106
Total Deferred Outflows of Resources 30,216,563 2,362,047 32,578,610
LIABILITIES
Accounts payable 9,551,005 3,270,033 12,821,038
Accrued payroll 980,253 155,300 1,135,553
Deposits payable 8,280,192 28,600 8,308,792
Unearned revenue 16,675,088 96,575 16,771,663
Interest payable 63,076 14,138 77,214
Compensated absences (Note 1K):
Due within one yea
r 5,642,074 856,478 6,498,552
Due in more than one year 7,238,739 1,806,083 9,044,822 Accrued claims payable (Note 11):
Due within one year 2,544,159 2,544,159
Due in more than one year 7,942,841 7,942,841
Net OPEB liability, due in more than one year (Note 9C) 33,148,542 5,124,032 38,272,574 Net pension liability, due in more than one year (Note 8C) 109,680,889 5,593,963 115,274,852 Lease payable (Note 7)
Due within one year 29,703 29,703
Long-term debt (Note 5):
Due within one year 4,543,710 893,252 5,436,962
Due in more than one year 5,411,856 1,196,793 6,608,649 Total Liabilities 211,732,127 19,035,247 230,767,374
DEFERRED INFLOWS OF RESOURCES
Related to pension (Note 8D) 53,075,512 4,448,827 57,524,339 Related to OPEB (Note 9E) 4,437,737 685,977 5,123,714
Related to leases (Note 7) 8,924,675 9,010,667 17,935,342 Total Deferred Inflows of Resources 66,437,924 14,145,471 80,583,395 NET POSITION (Note 12)
Net investment in capital assets 96,249,039 65,244,523 161,493,562 Restricted for:
Debt service 1,447 11,325 12,772
Streets and roads 17,899,089 17,899,089
Infrastructure 11,026,935 11,026,935
Qualified capital outlay 1,875,638 1,875,638
Affordable housing 9,163,365 9,163,365
Other 3,260,927 3,260,927
Total Restricted Net Position 41,351,763 1,886,963 43,238,726 Unrestricted (74,481,450) 45,343,377 (29,138,073)
Total Net Position $63,119,352 $112,474,863 $175,594,215 See accompanying notes to financial statements
JUNE 30, 2022
20
CITY OF DALY CITY
FOR THE YEAR ENDED JUNE 30, 2022
Net (Expense) Revenue and
Changes in Net Position
Operating Capital
Charges for Grants and Grants and Governmental Business-type Functions/Programs Expenses Services Contributions Contributions Activities Activities Total Governmental Activities:
General government $14,340,037 $724,161 $670,948 $295,813 ($12,649,115) ($12,649,115) Public safety 58,797,739 5,430,260 6,833,343 (46,534,136) (46,534,136) Public works 16,152,556 4,118,081 5,684,740 6,401,169 51,434 51,434 Culture and recreation 14,579,848 1,495,986 1,755,464 1,000,000 (10,328,398) (10,328,398) Economic and community development 7,500,998 4,171,831 3,094,415 (234,752) (234,752) Interest on long-term debt 729,892 (729,892) (729,892)
Total Governmental Activities 112,101,070 15,940,319 18,038,910 7,696,982 (70,424,859) (70,424,859) Business-type Activities:
Water Utility 15,284,885 25,984,982 580,920 $11,281,017 11,281,017 Civic Cente
r 935,680 1,341,880 406,200 406,200
Transfer Station
Sanitation District 20,832,712 23,623,875 1,538,496 4,329,659 4,329,659 Total Business-type Activities 37,053,277 50,950,737 2,119,416 16,016,876 16,016,876 Total $149,154,347 $66,891,056 $20,158,326 $7,696,982 (70,424,859) 16,016,876 (54,407,983) General revenues:
Taxes:
Property tax 45,611,135 2,415,701 48,026,836
Sales tax 24,157,170 24,157,170
Utility users tax 6,008,575 6,008,575
Franchise fees 4,909,174 4,909,174
Other taxes 7,587,013 7,587,013
Investment earnings (4,574,540) (1,374,982) (5,949,522) Gain from sale of capital assets 34,303 1,503 35,806
Miscellaneous 2,059,402 517,376 2,576,778
Transfers (Note 6) 2,574,893 (2,574,893)
Total general revenues and transfers 88,367,125 (1,015,295) 87,351,830 Change in Net Position 17,942,266 15,001,581 32,943,847 Net Position-Beginning 45,177,086 97,473,282 142,650,368 Net Position-Ending $63,119,352 $112,474,863 $175,594,215 See accompanying notes to financial statements
STATEMENT OF ACTIVITIES
Program Revenues
21
FUND FINANCIAL S
TATEMENTS
Major funds are defined generally as having significant activities or balances in the current year. 23
CITY OF DALY CITY
GOVERNMENTAL FUNDS
BALANCE SHEET
JUNE 30, 2022
Other Total
Measures Capital Governmental Governmental
General Gas Tax Grants A and W Pro jects Funds Funds
ASSETS
Cash and investments (Note 1G) $74,168,916 $8,773,301 $251,697 $8,844,684 $28,835,601 $6,454,357 $127,328,556 Restricted cash and investments (Note 1G) 4,332,892 4,332,892 Accounts receivable, net 10,574,057 550,979 984,193 221,095 48,654 286,053 12,665,031 Due from other funds (Note 6) 22,786 22,786
Prepaids (Note 1H) 360,359 1,484 361,843
Inventories (Note 1H) 18,150 23,317 41,467
Notes receivable (Note 13) 200,000 425,875 997,597 1,623,472 Loan receivable from Successor Agency (Note 14C) 12,142,785 12,142,785 Leases receivable (Note 7) 9,055,050 9,055,050
Property held for development (Note 1C) 3,366,888 3,366,888 Total Assets $110,874,995 $9,347,597 $1,661,765 $9,065,779 $28,885,739 $11,104,895 $170,940,770
LIABILITIES
Accounts payable $7,069,198 $490,294 $49,716 $787,430 $259,378 $8,656,016 Accrued payroll 884,727 23,993 1,524 4,963 915,207
Due to other funds (Note 6) 22,786 22,786
Deposits payable 8,276,191 4,001 8,280,192
Unearned revenue 15,675,088 1,000,000 16,675,088
Total Liabilities 31,905,204 514,287 51,240 1,787,430 291,128 34,549,289
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - loans 425,875 997,597 1,423,472
Related to leases 8,924,675 8,924,675
Total Deferred Inflows of Resources 8,924,675 425,875 997,597 10,348,147
FUND BALANCES
Fund Balance (Note 12)
Nonspendable 12,728,449 23,317 1,484 12,753,250
Restricted 5,332,892 8,809,993 1,184,650 $9,065,779 11,026,935 9,816,170 45,236,419 Assigned 1,055,425 16,069,890 17,125,315
Unassigned 50,928,350 50,928,350
Total Fund Balances 70,045,116 8,833,310 1,184,650 9,065,779 27,098,309 9,816,170 126,043,334 Total Liabilities, Deferred Inflows of
Resources and Fund Balances $110,874,995 $9,347,597 $1,661,765 $9,065,779 $28,885,739 $11,104,895 $170,940,770 See accompanying notes to financial statements
24
CITY OF DALY CITY
Reconciliation of the
GOVERNMENTAL FUNDS - BALANCE SHEET
with the
STATEMENT OF NET POSITION
JUNE 30, 2022
Total fund balances reported on the Governmental Funds Balance Sheet $126,043,334 Amounts reported for Governmental Activities in the Statement of Net Position are different from those reported in the Governmental Funds above because of the following:
CAPITAL ASSETS
Capital assets used in Governmental Activities are not current assets or financial resources and therefore are not reported in the Governmental Funds. 89,233,292
ALLOCATION OF INTERNAL SERVICE FUND NET POSITION
Internal service funds are not governmental funds. However, they are used by management to charge the costs of certain activities, such as insurance, central services and maintenance to individual governmental funds. The net current assets of the internal service funds are therefore included in Governmental Activities in the following line items in the Statement of Net Position.
Cash and investments 42,999,028
Accounts receivable 48,426
Prepaids
Deferred outflows 365,504
Inventories 193,641
Internal balances (1,070,547)
Capital assets 8,751,016
Accounts payable (894,989)
Accrued payroll (65,046)
Interest payable (58,806)
Accrued claims payable (10,487,000)
Compensated absences (827,236)
Net OPEB liability (2,837,926)
Deferred inflows (379,926)
Long-term debt - due within one yea
r (4,125,710)
Long-term debt - due in more than one year (5,411,856)
ACCRUAL OF NONCURRENT REVENUES AND EXPENSES
Revenues which are deferred on the Fund Balance Sheets because they are not available currently are taken into revenue in the Statement of Activities. 1,423,472
DEFERRED INFLOWS AND OUTFLOWS
The deferred outflows below are not current assets or financial resources; and the deferred inflows are not due and payable in the current period and therefore are not reported in the Governmental Funds.
Deferred outflows 29,851,059
Deferred inflows (57,133,323)
LONG TERM ASSETS AND LIABILITIES
The liabilities below are not due and payable in the current period and therefore are not reported in the funds:
Long-term debt (418,000)
Leases payable (29,703)
Interest payable (4,270)
Net OPEB liability (30,310,616)
Net pension liability (109,680,889)
Compensated absences (12,053,577)
NET POSITION OF GOVERNMENTAL ACTIVITIES
$63,119,352
See accompanying notes to financial statements
25
CITY OF DALY CITY
GOVERNMENTAL FUNDS
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED JUNE 30, 2022
Other Total
Measures Capital Governmental Governmental
General Gas Tax Grants A and W Projects Funds Funds
REVENUES
Property tax $45,611,135 $45,611,135
Gas tax $4,726,833 4,726,833
Sales tax 24,157,170 $3,655,779 27,812,949
Utility users tax 6,008,575 6,008,575
Franchise fees 4,909,174 4,909,174
Other taxes 7,587,013 7,587,013
Licenses and permits 3,015,932 3,015,932
Fines and forfeitures 2,329,138 2,329,138
Rents and interest (1,525,051) (258, 781) $3,513 (126,080) ($791,722) $25,488 (2,672,633) Federal programs and grants 8, 539,854 717,306 572,031 331, 282 1,334,119 11,494,592 Receipts from other agencies 1,262,931 404,473 963,184 123,137 2,753,725 Charges and fees 6,657,369 1,253,250 1,988,967 59,358 9,958,944 Miscellaneous 4,186,233 36, 416 465 187,427 443,129 4,853,670 Total Revenues 112,739,473 6,879,497 1, 539,193 3,529,699 1,839,091 1,862,094 128,389,047
EXPENDITURES
Current:
General government 13,432,444 5,000 4,862 13,442,306
Public safety 68,607,651 212,349 8,825 68,828,825
Public works 6,014,764 3,950,245 19,295 9,984,304
Culture and recreation 13,126,801 223,825 13,350,626
Economic and community development 5,379,260 640,850 1,456,012 7,476,122 Capital projects 2,179, 563 278,202 3,697,359 6,155,124 Debt service:
Principal 68,851 390,000 458,851
Interest 3,310 14,824 18,134
Total Expenditures 106,633,081 6,129,808 1,360,226 4,862 3,697,359 1,888,956 119,714,292
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 6,106,392 749,689 178, 967 3,524,837 (1,858,268) (26,862) 8,674,755
OTHER FINANCING SOURCES (USES)
Transfers in (Note 6) 3,945,949 2, 334,350 309,154 5,818,566 996,655 4,240,709 17,645,383 Transfers (out) (Note 6) (2,917,358) (6 ,739,109) (277,624) (468,219) (3,990,884) (14,393,194) Total Other Financing Sources (Uses) 1,028,591 (4,404,759) 309,154 5,540,942 528,436 249,825 3,252,189 NET CHANGES IN FUND BALANCES 7,134,983 (3 ,655,070) 488,121 9,065,779 (1 ,329,832) 222,963 11,926,944 BEGINNING FUND BALANCES 62,910,133 12, 488,380 696,529 28,428,141 9,593,207 114,116,390 ENDING FUND BALANCES $70,045,116 $8,833,310 $1,184,650 $9,065,779 $27,098,309 $9,816,170 $126,043,334 See accompanying notes to financial statements
26
CITY OF DALY CITY
Reconciliation of the
NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS
with the
STATEMENT OF ACTIVITIES
The schedule below reconciles the Net Changes in Fund Balances reported on the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balance, which measures only changes in current assets and current liabilities on the modified accrual basis, with the Change in Net Position of Governmental Activities reported in the Statement of Activities, which is prepared on the full accrual basis.
NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS $11,926,944 Amounts reported for governmental activities in the Statement of Activities are different because of the following:
CAPITAL ASSETS TRANSACTIONS
Governmental Funds report capital outlays as expenditures. However, in the Statement of Activities the cost of those assets is capitalized and allocated over their estimated useful lives and reported as depreciation expense.
The capital outlay expenditures are therefore added back to fund balance. 2,200,028 Depreciation expense is deducted from fund balance
(Depreciation expense is net of internal service fund depreciation of $1,191,156 which has already been allocated to serviced funds). (4,741,224) Retirements are deducted from fund balance (12,405)
LONG TERM DEBT PROCEEDS AND PAYMENTS
Bond proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the Statement of Net Position.
Repayment of bond principal is an expenditure in the governmental funds, but in the Statement of Net Position the repayment reduces long-term liabilities.
Repayment of debt principal is added back to fund balance 390,000 Repayment of lease principal is added back to fund balance 68,851 Interest accrued is deducted from fund balance 3,820
ACCRUAL OF NONCURRENT ITEMS
The amounts below included in the Statement of Activities do not provide or (require) the use of current financial resources and therefore are not reported as revenue or expenditures in governmental funds:
Unavailable revenue 5,066
Compensated absences (559,819)
OPEB expense 1,538,389
Pension expense 2,572,277
ALLOCATION OF INTERNAL SERVICE FUND ACTIVITY
Internal service funds are used to charge the costs of certain activities, such as equipment acquisition, maintenance, and insurance to individual funds.
The portion of the net revenue (expense) of these internal service funds arising out of their transactions with governmental funds is reported with governmental activities, because they service those activities.
Change in net position of all internal service funds 4,550,339 CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES $17,942,266 See accompanying notes to financial statements
FOR THE YEAR ENDED JUNE 30, 2022
27
CITY OF DALY CITY
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2022
Variance with
Budgeted Amounts Final Budget
Positive
Original Final Actual Amounts (Negative)
REVENUES
Property tax $37,124,281 $43,134,815 $45,611,135 $2,476,320 Sales tax 21,250,054 21,750,054 24,157,170 2,407,116
Utility users tax 5,874,200 5,874,200 6,008,575 134,375 Franchise fees 4,682,274 4,682,274 4,909,174 226,900
Other taxes 7,193,600 7,193,600 7,587,013 393,413
Licenses and permits 2,358,766 2,358,766 3,015,932 657,166 Fines and forfeitures 3,364,668 3,364,668 2,329,138 (1,035,530) Rents and interest 2,116,896 2,116,896 (1,525,051) (3,641,947) Federal programs and grants 12,627,672 14,377,672 8,539,854 (5,837,818) Receipts from other agencies 6,505,595 1,297,949 1,262,931 (35,018) Charges and fees 5,723,118 5,746,118 6,657,369 911,251
Miscellaneous 224,037 272,119 4,186,233 3,914,114
Total Revenues 109,045,161 112,169,131 112,739,473 570,342
EXPENDITURES
Current Operations:
General Government
Legislative:
Salaries and benefits 256,255 256,255 233,419 22,836
Services and supplies 43,591 43,591 37,527 6,064
Other charges 35,331 35,331 15,012 20,319
Total Legislative 335,177 335,177 285,958 49,219
Legal:
Salaries and benefits 1,182,205 1,182,205 1,135,823 46,382 Services and su
pplies 687,938 713,448 206,526 506,922
Other charges 8,788 6,703 3,359 3,344
Total Legal 1,878,931 1,902,356 1,345,708 556,648
Administrative:
Salaries and benefits 8,731,353 8,782,328 8,449,345 332,983 Services and supplies 2,824,544 3,134,031 2,760,407 373,624 Capital outlay
Other charges 1,282,844 1,345,571 591,026 754,545
Total Administrative 12,838,741 13,261,930 11,800,778 1,461,152 Total General Government 15,052,849 15,499,463 13,432,444 2,067,019 Public Safety
Police:
Salaries and benefits 40,433,038 40,433,038 32,925,431 7,507,607 Services and su
pplies 6,259,953 6,351,061 6,215,499 135,562
Capital outlay 393,268 390,841 202,352 188,489
Other charges 518,408 549,908 542,583 7,325
Total Police 47,604,667 47,724,848 39,885,865 7,838,983 Fire:
Salaries and benefits 27,130,114 27,110,114 25,436,848 1,673,266 Services and supplies 2,971,637 2,930,895 2,839,156 91,739 Capital outlay 280,000 340,000 309,589 30,411
Other charges 181,470 175,470 136,193 39,277
Total Fire 30,563,221 30,556,479 28,721,786 1,834,693
Total Public Safety 78,167,888 78,281,327 68,607,651 9,673,676 (Continued)
28
CITY OF DALY CITY
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2022
Variance with
Budgeted Amounts Final Budget
Positive
Original Final Actual Amounts (Negative)
Public Works
Salaries and benefits 5,281,444 5,281,444 4,260,735 1,020,709 Services and supplies 1,805,454 1,911,012 1,680,712 230,300 Other charges 93,175 93,175 73,317 19,858
Total Public Works 7,180,073 7,285,631 6,014,764 1,270,867 Culture and Recreation
Salaries and benefits 8,549,631 8,766,972 7,189,274 1,577,698 Services and supplies 5,704,271 5,870,291 5,688,051 182,240 Capital outlay 15,000 177,000 158,681 18,319
Other charges 95,857 95,857 90,795 5,062
Total Culture and Recreation 14,364,759 14,910,120 13,126,801 1,783,319 Economic and Community Development
Salaries and benefits 3,933,876 3,933,876 3,531,244 402,632 Services and supplies 1,268,301 3,068,268 1,806,760 1,261,508 Other charges 63,988 163,988 41,256 122,732
5,266,165 7,166,132 5,379,260 1,786,872
Debt service:
Principal 68,851 (68,851)
Interest 3,310 (3,310)
72,161 (72,161)
Total Expenditures 120,031,734 123,142,673 106,633,081 16,509,592
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES (10,986,573) (10,973,542) 6,106,392 17,079,934
OTHER FINANCING SOURCES (USES)
Transfers in 3,425,897 3,945,949 3,945,949
Transfers out (1,150,920) (4,576,549) (2,917,358) 1,659,191 Total Other Financing Sources (Uses) 2,274,977 (630,600) 1,028,591 1,659,191 NET CHANGE IN FUND BALANCE ($8,711,596) ($11,604,142) 7,134,983 $18,739,125 BEGINNING FUND BALANCE 62,910,133
ENDING FUND BALANCE $70,045,116
See accompanying notes to financial statements
Total Economic and Community Devel
29
CITY OF DALY CITY
GAS TAX SPECIAL REVENUE FUND
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2022
Variance with
Budgeted Amounts Final Budget
Positive
Original Final Actual Amounts (Negative)
REVENUES
Gas tax $7,763,798 $4,733,450 $4,726,833 ($6,617)
Sales tax 2,592,709
Rents and interest 70,000 70,000 (258,781) (328,781)
Federal programs and grants 750,704 717,306 (33,398)
Receipts from other agencies 300,000 2,566,933 404,473 (2,162,460) Charges and services 1,122,890 1,067,106 1,253,250 186,144 Miscellaneous 9,500 9,500 36,416 26,916
Total Revenues 11,858,897 9,197,693 6,879,497 (2,318,196)
EXPENDITURES
Public works 4,636,455 4,636,864 3,950,245 686,619
Capital projects 10,105,737 20,470,194 2,179,563 18,290,631 Total Expenditures 14,742,192 25,107,058 6,129,808 18,977,250
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES (2,883,295) (15,909,365) 749,689 16,659,054
OTHER FINANCING SOURCES (USES)
Transfers in 5,236,000 12,084,656 2,334,350 (9,750,306) Transfers out (360,936) (6,739,108) (6,739,109) (1)
Total Other Financing Sources (Uses) 4,875,064 5,345,548 (4,404,759) (9,750,307) NET CHANGE IN FUND BALANCE $1,991,769 ($10,563,817) (3,655,070) $6,908,747 BEGINNING FUND BALANCE 12,488,380
ENDING FUND BALANCE $8,833,310
See accompanying notes to financial statements
30
CITY OF DALY CITY
GRANTS SPECIAL REVENUE FUND
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2022
Variance
Positive
Original Final Actual (Negative)
REVENUES
Rents and interest $3,152 $3,152 $3,513 $361
Federal programs and grants 1,505,909 572,031 (933,878) Receipts from other agencies 423,003 1,139,912 963,184 (176,728) Miscellaneous revenue 465 465
Total Revenues 426,155 2,648,973 1,539,193 (1,109,780)
EXPENDITURES
General Government
Administrative:
Services and supplies 5,000 5,000
Total General Government 5,000 5,000
Public Safety
Salaries and benefits 168,845 168,845 164,748 4,097
Services and supplies 50,000 137,195 26,539 110,656
Capital outlay 50,000 150,000 6,568 143,432
Other charges 37,337 14,494 22,843
Total Public Safety 268,845 493,377 212,349 281,028
Public Works
Capital Outlay 641,350 278,202 363,148
Total Public Works 641,350 278,202 363,148
Culture and Recreation
Salaries and benefits 211,440 314,376 190,033 124,343
Services and supplies 36,373 58,613 33,792 24,821
Total Culture and Recreation 247,813 372,989 223,825 149,164 Economic and Community Development
Salaries and benefits 77,488 82,073 (4,585)
Services and supplies 79,429 37,708 41,721
Other charges 1,551,021 521,069 1,029,952
Total Economic and Community Development 1,707,938 640,850 1,067,088 Total Expenditures 516,658 3,220,654 1,360,226 1,860,428
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES (90,503) (571,681) 178,967 750,648
OTHER FINANCING SOURCES (USES)
Transfers in 309,154 309,154
NET CHANGE IN FUND BALANCE ($90,503) ($262,527) 488,121 $750,648 BEGINNING FUND BALANCE 696,529
ENDING FUND BALANCE $1,184,650
Budgeted AmountsSee accompanying notes to financial statements 31
CITY OF DALY CITY
MEASURES A AND W SPECIAL REVENUE FUND
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2022
Variance
Positive
Original Final Actual (Negative)
REVENUES
Sales taxes $2,592,709 $3,655,779 $1,063,070
Rents and interest (126,080) (126,080)
Total Revenues 2,592,709 3,529,699 936,990
EXPENDITURES
General Government
Administrative:
Services and supplies 4,862 4,862
Total Expenditures 4,862 4,862
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 2,587,847 3,524,837 936,990
OTHER FINANCING SOURCES (USES)
Transfers in 5,818,566 5,818,566
Transfers out (8,922,696) (277,624) 8,645,072
NET CHANGE IN FUND BALANCE ($516,283) 9,065,779 $9,582,062
BEGINNING FUND BALANCE
ENDING FUND BALANCE $9,065,779
Budgeted Amounts
See accompanying notes to financial statements
32
CITY OF DALY CITY
PROPRIETARY FUNDS
STATEMENT OF NET POSITION
JUNE 30, 2022
Business-type Activities-Enterprise Funds Governmental
Nonmajor - Activities-
Water Sanitation Civic Transfer Internal Service
Utility Distric t Center Station Totals Funds
ASSETS
Current Assets:
Cash and investments (Note 1G) $21,721,484 $30,295,663 $1,658,041 $1,545,317 $55,220,505 $42,997,581 Cash with fiscal agent (Note 1G) 11,325 11,325 1,447
Accounts receivable, net (Note 1I) 6,796,056 1,325,358 40,043 8,161,457 48,426 Inventories (Note 1H) 409,219 1,662,060 2,071,279 193,641 Prepaids 5,580 5,580
Total Current Assets 28,938,084 33, 288,661 1,698,084 1,545,317 65,470,146 43,241,095 Noncurrent Assets:
Advance to other funds (Note 6) 2,570,647 2,570,647
Leases receivable (Note 7) 9,418,273 9,418,273
Capital Assets (Note 4):
Land 839,856 233,547
1,695,762 93,384 2,862,549 378,343
Buildings 272,379 893,519 5,568,728 1,184,278 7,918,904 35,817 Sewage facilities 59,413,041 59,413,041
Wells and pump stations 9,074,783 9,074,783
Water reservoirs 12,715,925 12,715,925
Mains and subsurface lines 21,074,931 26,871,004 47,945,935 Equipment 6,949,163 9,849,124 936,705 20,912 17,755,904 25,412,332 Furniture and fixtures 37,154 114,174 151,328 63,104
Construction in progress 40,337 9,986,083 10,026,420 179,803 Total Capital Assets 51,004,528 107,360,492 8,201,195 1,298,574 167,864,789 26,069,399 Less accumulated depreciation (28,556,567) (65, 478,857) (5,289,607) (1,205,190) (100,530,221) (17,318,383) Net Capital Assets 22,447,961 41, 881,635 2,911,588 93,384 67,334,568 8,751,016 Total Noncurrent Assets 22,447,961 44,452,282 12,329, 861 93,384 79,323,488 8,751,016 Total Assets 51,386,045 77,740,943 14,027,945 1,638,701 144,793,634 51,992,111
DEFERRED OUTFLOWS OF RESOURCES
Related to pension (Note 8D) 443,961 1,258,165 1,702,126 Related to OPEB (Note 9) 182,747 477,174 659,921 365,504 Total Deferred Outflows 626,708 1,735,339 2,362,047 365,504
LIABILITIES
Current Liabilities:
Accounts payable 1,508,309 1,736,512 25,212 3,270,033 894,989 Accrued payroll 47,423 107,877 155,300 65,046
Deposits payable 28,600 28,600
Interest payable 2,108 12,030 14,138 58,806
Unearned revenue 96,575 96,575
Accrued claims payable (Note 11) 2,544,159
Compensated absences (Note 1K) 270,714 585,764 856,478
Long-term debt (Note 5) 625,000 268,252 893,252 4,125,710 Total Current Liabilities 2,482,154 2,807,010 25,212 5,314,376 7,688,710 Noncurrent Liabilities:
Compensated absences (Note 1K) 125,509 1,680,574 1,806,083 827,236 Accrued claims payable (Note 10) 7,942,841
Net OPEB liability (Note 9) 1,418,963 3,705,069 5,124,032 2,837,926 Net Pension Liability (Note 8C) 1,459,058 4,134,905 5,593,963 Long-term debt (Note 5) 640,000 556,793 1,196,793 5,411,856 Advance from other funds (Note 6) 2,570,647 2,570,647
Total Noncurrent Liabilities 6,214,177 10,077,341 16,291,518 17,019,859 Total Liabilities 8,696,331 12, 884,351 25,212 21,605,894 24,708,569
DEFERRED INFLOWS OF RESOURCES
Related to pension (Note 8D) 1,160,375 3,288,452 4,448,827 Related to OPEB (Note 9) 189,963 496,014 685,977 379,926 Related to leases (Note 7) 9,010,667 9,010,667
Total Deferred Inflows 1,350,338 3,784,466 9,010,667 14,145,471 379,926 NET POSITION (Note 12)
Net investment in capital assets 21,182,961 41,056,590 2,911,588 93,384 65,244,523 7,463,450 Restricted for:
Debt service 11,325 11,325 1,447
Qualified capital outlay 1,875,638 1,875,638
Unrestricted 20,771,798 19,875,237 2,080,478 1,545,317 44,272,830 19,804,223 Total Net Position $41,966,084 $62,807, 465 $4,992,066 $1,638,701 111,404,316 $27,269,120 Some amounts reported for business-type activities in the statement of net position are different because certain internal service fund assets and liabilities are included in business-type activities 1,070,547 Net position of business-type activities $112,474,863
See accompanying notes to financial statements
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CITY OF DALY CITY
PROPRIETARY FUNDS
STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN FUND NET POSITION
FOR THE YEAR ENDED JUNE 30, 2022
Business-type Activities-Enterprise Funds Governmental
Nonmajor - Activities-
Water Sanitation Civic Transfer Internal Service
Utility Distric t Center Station Totals Funds
OPERATING REVENUES
Water sales $25,984,982 $254,959 $26,239,941
Sewer service charges 23,153,073 23,153,073
Connection charges 215,843 215,843
Rental income $1,341,880 1,341,880
Charges to City departments $25,878,146
Other revenues 201,605 141,384 59,807 $114,580 517,376 356,691 Total Operating Revenues 26,186,587 23,765,259 1,401,687 114,580 51,468,113 26,234,837
OPERATING EXPENSES
Salaries and benefits 1,370,052 3,403,284 4,773,336 6,892,468 Services and supplies 1,740,271 11,321,967 502,714 13,564,952 4,224,032 Water purchases 7,917,436 7,917,436
Utilities 1,101,949 1,852,540 199,035 3,153,524 508,417 Insurance 275,869 700,824 19,925 996,618 2,898,646
Claims and settlements 3,587,995
Depreciation (Note 4) 1,226,189 2,433,940 190,695 3,850,824 1,191,156 Other charges 1,505,617 937,193 2,442,810 652,766
Total Operating Expenses 15,137,383 20,649,748 912,369 36,699,500 19,955,480 Operating Income (Loss) 11,049,204 3,115,511 489,318 114,580 14,768,613 6,279,357
NONOPERATING REVENUES (EXPENSES)
Property taxes 2,415,701 2,415,701
Intergovernmental 580,920 1,538,496 2,119,416 246,616
Gain on sale of capital assets 1,503 1,503 34,303
Interest income (606,733) (724,320) (43,929) (1,374,982) (889,026) Interest expense (58,462) (23,352) (81,814) (715,578)
Total Nonoperating Revenues (Expenses) (84,275) 3,208,028 (43,929) 3,079,824 (1,323,685) Income (Loss) Before Transfers 10,964,929 6,323,539 445,389 114,580 17,848,437 4,955,672 Transfers in (Note 6) 1,792,828 5,829 1,798,657 551,605 Transfers (out) (Note 6) (2,678,853) (1,516,000) (64,117) (114,580) (4,373,550) (1,228,901) Net transfers (2,678,853) 276,828 (58,288) (114,580) (2,574,893) (677,296) CHANGE IN NET POSITION 8,286,076 6,600,367 387,101 15,273,544 4,278,376 BEGINNING NET POSITION 33,680,008 56,207,098 4,604,965 1,638,701 96,130,772 22,990,744 ENDING NET POSITION $41,966,084 $62,807,465 $4,992,066 $1,638,701 111,404,316 $27,269,120 Net change in net position 15,273,544
Some amounts reported for business-type activities in the statement of activities are different because the net revenue (expense) of certain internal service funds is reported with business-type activities. (271,963)
Change in net position of business-type activities $15,001,581 See accompanying notes to financial statements
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CITY OF DALY CITY
PROPRIETARY FUNDS
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2022
Governmental
Nonmajor - Activities-
Sanitation Civic Transfe r Internal Service
Water Utility Distric t Center Station Totals Funds
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers $24,167,064 $23,857,896 $968,561 $114,580 $49,108,101 $26,233,143 Payments to suppliers (12,040,179) (14,558,992) (712,778) (27,311,949) (6,404,733) Payments to employees (4,173,658) (11,559,156) (15,732,814) (6,833,475) Claims paid (3,250,995)
Cash Flows from Operating Activities 7,953,227 (2,260,252) 255,783 114,580 6,063,338 9,743,940
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Property tax 2,415,701 2,415,701 246,616
Intergovernmental 580,920 1,635,071 2,215,991
Principal paid on noncapital debt (3,560,000)
Interest paid on noncapital debt (696,317)
Advance from other funds (2,526,873) (2,526,873)
Advance to other funds 2,526,873 2,526,873
Transfers in 1,792,828 5,829 1,798,657 551,605
Transfers out (2,678,853) (1,516,000) (64,117) (114,580) (4,373,550) (1,228,901) Cash Flows from (used for) Noncapital Financing Activities (4,624,806) 6,854,473 (58,288) (114,580) 2,056,799 (4,686,997)
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Proceeds from sale of capital assets 1,503 1,503 34,303 Acquisition of capital assets (124,613) (2,065,941) (2,190,554) (2,550,489) Principal paid on capital debt (615,000) (261,709) (876,709) (195,490) Interest paid on capital debt (59,487) (27,170) (86,657) (39,599) Cash Flows from (used for) Capital and
Related Financing Activities (799,100) (2,353,317) (3,152,417) (2,751,275) CASH FLOWS FROM INVESTING ACTIVITIES:
Interest income (expense) (606,733) (724,320) (43,929) (1,374,982) (889,026) Net Cash Flows 1,922,588 1,516,584 153,566 3,592,738 1,416,642 Cash and investments at beginning of period 19,810,221 28,779,079 1,504,475 1,545,317 51,639,092 41,582,386 Cash and investments at end of period $21,732,809 $30,295,663 $1,658,041 $1,545,317 $55,231,830 $42,999,028 Reconciliation of Operating Income (Loss) to Cash Flows from Operating Activities:
Operating income (loss) $11,049,204 $3,115,511 $489,318 $114,580 $14,768,613 $6,279,357 Adjustments to reconcile operating income (loss) to cash flows from operating activities:
Depreciation 1,226,189 2,433,940 190,695 3,850,824 1,191,156 Change in assets and liabilities:
Accounts receivable, net (2,029,123) 92,637 (25,520) (1,962,006) (1,694) Inventories (16,094) (110,716) (126,810) (32,605)
Prepaids 2,373 (1,606) 767 1,483,056
Accounts payable 514,684 365,854 8,896 889,434 428,677
Accrued payroll 17,414 29,276 46,690 21,982
Deposits payable 9,600 9,600
Accrued claims payable 337,000
Compensated absences 2,958 287,213 290,171 90,163
Leases-related activity (407,606) (407,606)
Due to OPEB system (26,568) (292,507) (319,075) (53,152) Due to retirement system (2,797,410) (8,179,854) (10,977,264) Cash Flows from Operating Activities $7,953,227 ($2,260,252) $255,783 $114,580 $6,063,338 $9,743,940 See accompanying notes to financial statements
Business-type Activities-Enterprise Funds
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FIDUCIARY FUNDS
FIDUCIARY FUNDS
These funds are used to account for assets held by the City as an agent for individuals, private organizations, and other governments. The financial activities of these funds are excluded from the City-wide financial statements, but are presented in separate Fiduciary Fund financial statements.
SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY PRIVATE PURPOSE TRUST
The fund is used to account for the activities of the Successor Agency to the former Redevelopment Agency of the City.
CUSTODIAL FUNDS
These funds report resources, not in a trust, that are held by the City for other parties outside of the City’s reporting entity.
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CITY OF DALY CITY
FIDUCIARY FUNDS
STATEMENT OF FIDUCIARY NET POSITION
JUNE 30, 2022
Successor Agency Custodial Funds
to the External
Redevelopment Agency Custodial Investment
Private-Purpose Trust Funds Pool Fund
ASSETS
Cash and investments (Note 1G) $208,592 $2,343,951 $302,622 Receivables 2,532,000
Total Assets 208,592 4,875,951 302,622
LIABILITIES
Accounts payable 4,352,822
Deposits payable 4,050
Loans payable to City (Note 14C) 12,142,785
Total Liabilities 12
,146,835 4,352,822
NET POSITION
Restricted for:
Other agencies and organizations (11,938,243) 523,129
Pool participan
t 302,622
Total Net Position ($11,938,243) $523,129 $302,622
See accompanying notes to financial statements
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CITY OF DALY CITY
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
FOR THE YEAR ENDED JUNE 30, 2022
Successor Agency Custodial Funds
to the External
Redevelopment Agency Custodial Investment
Private-Purpose Trust Funds Pool Fund
ADDITIONS
Taxes $1,187,765
Receipts from other agencies $80,191
Rents and interest 7,500 ($40,059)
Other receipts 4,556,375
Total additions 1,195,265 80,191 4,516,316
DEDUCTIONS
Services and supplies 6,598
Culture and recreation 1,354
Other payments 2,385 5,188,427
Total deductions 8,983 1,354 5,188,427
CHANGE IN NET POSITION 1,186,282 78,837 (672,111)
NET POSITION
Net Position (Deficit) - Beginning (13,124,525) 444,292 974,733 Net Position (Deficit) - Ending ($11,938,243) $523,129 $302,622 See accompanying notes to financial statements
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CITY OF DALY CITY
ANNUAL COMPREHENSIVE FINANCIAL REPORT
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2022
NOTE 1.
DESCRIPTION OF FUNDS AND SUMMARY OF ACCOUNTING POLICIES The City of Daly City (City) was incorporated on March 22, 1911 and operates under a council-manager form of government. Daly City is a general law city, and provides the following services: public safety (police and fire), highways and streets, water, sanitary sewer, social services, library, recreation, public improvements, planning and zoning, and general administrative services.
The Basic Financial Statements include financial information for entities which are directly or indirectly governed by the City Council. The entities included are the City, the North San Mateo County Sanitation District, the Daly City Public Facilities Financing Corporation and the Daly City Joint Powers Financing Authority (see Note 2).
The accounting policies of the City conform with generally accepted accounting principles as they apply to governments. The following is a summary of the more significant policies.
A. BASIS
OF PRESENTATION
The City’s Basic Financial Statements are prepared in conformity with accounting principles generally accepted in the United States of America. The Governmental Accounting Standards Board is the acknowledged standard setting body for establishing accounting and financial reporting standards followed by governmental entities in the U.S.A. These standards require that the financial statements described below be presented.
Government-wide Statements: The Statement of Net Position and the Statement of Activities display information about the primary government (the City and its blended component units). These statements include the financial activities of the overall City government, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities.
Interfund services provided and used are not eliminated in the process of consolidation. These statements distinguish between the governmental and business-type activities of the City.
Governmental activities are generally financed through taxes, intergovernmental revenues, and other nonexchange transactions. Business-type activities are fi nanced in whole or in part by fees charged to external parties.
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The Statement of Activities presents a comparison between direct expenses and program revenues for each function of the City’s governmental activities and for each segment of the business-type activities of the City. Direct expenses are those that are sp ecifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Program revenues include charges paid by the recipients of goods or services offered by the programs, grants and contributions that are restricted to meeting the operational needs of a particular program and fees, grants and contributions that are restricted to financing the acquisition or construction of capital assets. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.
Fund Financial Statements: The fund financial statements provide information about the City's funds, including fiduciary funds and blended component units. Separate statements for each fund category— governmental, proprietary, and fiduciary—are presented. The emphasis of fund financial statements is on major individual governmental and enterprise funds, each of which is displayed in a separate column. All remaining governmental and enterprise funds are aggregated and reported as nonmajor funds.
Proprietary fund operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially equal values. Nonoperating revenues, such as subsidies and investment earnings, result from nonexchange transactions or ancillary activities.
B. MAJOR FUNDS
Major funds are defined as funds which have either assets, liabilities, revenues or expenditures/expenses equal to ten percent of their fund-type total and five percent of the grand total of governmental and enterprise funds. Major governmental and business-type funds are identified and presented separately in the fund financial statements. All other funds, called nonmajor funds, are combined and reported in a single column, regardless of their fund type. The General Fund is always a major fund, and the City may select other funds it believes should be presented as major funds. The City selected the Gas Tax Fund for presentation as a major fund because of its importance and because it often qualifies as a major fund.
The City reported the following major governmental funds in the accompanying financial statements:
GENERAL FUND is the general operating fund of the City. It is used to account for all financial resources traditionally associated with governments which are not required to be accounted for in a separate fund.
GAS TAX SPECIAL REVENUE FUND is used to account for gas tax monies allocated by the State to the City for the streets and roads program.
GRANTS SPECIAL REVENUE FUND is used to account for miscellaneous grant monies, such as HOME, law enforcement special grants, and after school safety grants.
MEASURES A AND W SPECIAL REVENUE FUND is used to account for the City’s portion of the Measure A special half cent sales tax receipts restricted for maintaining local streets and roads improvements and the City’s portion of the Measure W special half cent sales tax receipts restricted for congestion relief and transit improvements.
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CAPITAL PROJECTS FUND is used to account for financial resources to be used for the acquisition or construction of major capital facilities or infrastructure other than those financed by proprietary funds.
The City reported the following enterprise funds as major funds in the accompanying financial statements:
WATER UTILITY FUND is used to account for activity related to providing water service to the community.
SANITATION DISTRICT FUND is used to account for activity related to providing residents with sanitary sewer services.
CIVIC CENTER FUND is used to account for rental activity of real property owned by the City in the Civic Center area.
The City also reports the following fund types:
Internal Service Funds - These funds account for motor vehicles, central services, telephone, building maintenance, information services, self-i nsurance and pension bond payments. All of these services are provided to other departments on a cost-reimbursement basis.
Fiduciary Funds - The Successor Agency to the Redevelopm ent Agency Private-Purpose Trust Fund accounts for the accumulation of resources to be used for payments at appropriate amounts and times in the future. Custodial Funds are used to account for assets held by the City for Billing Services and Supporters of Senior Center and monies held for an external investment pool for the San Mateo Pre- Hospital Emergency Medical Services Group, none of which are held in trust. In addition, The financial activities of these funds are excluded from the government-wide financial statements because they are not directly or indirectly governed by the City Council.
C. PROPERTY HELD FOR DEVELOPMENT
Property held for development is stated at the lower of historical cost or net realizable value (equal to agreed upon sales price if a disposition and development agreement has been reached with a developer).
D. BASIS OF ACCOUNTING
The government-wide, proprietary, and fiduciary fund financial statements are reported using the economic resources measurement focus and the full accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place.
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Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The City considers all revenues reported in the governmental funds to be available if the revenues are collected within sixty days after year-end. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt, including lease liabilities, as well as claims and judgments, and compensated absences, which are recognized as expenditures to the extent they have matured. Governmental capital asset acquisitions are reported as expenditures in governmental funds, including entering into contracts giving the City the right to use leased assets. Proceeds of governmental long-term debt and financing through leases are reported as other financing sources.
In addition to assets, the statement of net position or balance sheet will report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net assets that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then.
In addition to liabilities, the statement of net position or balance sheet will report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net assets or fund balance that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City has one item, which arises only under a modified accrual basis of accounting, that qualifies for reporting in this category. Accordingly, the item, unavailable revenue, is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues from loans and deferred amounts related to leases. These amounts are deferred and rec ognized as an inflow of resources in the period that the amounts become available.
Property taxes and sales taxes are considered measurable and available when in the hands of intermediary collecting governments and are recognized as revenue at that time. The primary revenue sources which are susceptible to accrual include taxes, rents, licenses, interest, grants and contributions. Fines and penalties and other revenues are recorded as revenues when received in cash because they are generally not measurable until actually received.
The City may fund programs with a combination of cost-reimbursement grants, categorical block grants, and general revenues. Thus, both restricted and unrestricted net position may be available to finance program expenditures. The City’s policy is to first apply restricted grant resources to such programs, followed by general revenues if necessary.
Certain indirect costs are included in program expenses reported for individual functions and activities. Nonexchange transactions , in which the City gives or receives value without directly receiving or giving equal value in exchange, include taxes, grants, entitlements, and donations. On an accrual basis, revenue from taxes is recognized in the fiscal year for which the taxes are levied.
Revenue from grants, entitlements, and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.
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E. BUDGETS, BUDGETARY ACCOUNTING AND ENCUMBRANCES
The City uses a biennial budget process whereby two individual annual budgets are adopted by City Council for all funds and component units other than the Custodial Funds. Due to the COVID-19 pandemic and ongoing economic uncertainties, the City moved to a one-year budget cycle starting in FY2021. The City is monitoring and evaluating the economic climate in hopes of switching back to a biennial budget process. Budgets are subject to public hearing before they are adopted by the City Council. Budgets are prepared on the basis of generally accepted accounting principles (GAAP basis).
The City is not legally required to prepare budgets for any of its funds, but does so as a matter of managerial policy. Budgets submitted to the City Council include both proposed appropriations and the means of financing them. The City Council approves total appropriations on a departmental basis.
The City Manager is authorized and directed to make any changes or transfers of appropriations within any Department of the City and from one Department to another as deemed necessary or feasible, as long as the total appropriations of the funds are not exceeded. Additional appropriations not included in the original budget resolutions require approval by the City Council. Budgeted amounts shown are as adopted and amended by the City Council. Individual amendments were not material in relation to the original appropriations. Budgets for the City's proprietary funds are considered as memorandum budgets used for the purpose of management control. These nonappropriated budgets are not included in the Basic Financial Statements.
The City uses an encumbrance system as an extension of normal budgetary accounting. Under this system purchase orders, contracts and other commitments for the expenditure of monies are recorded to reserve that portion of applicable appropriations. Encumbrances outstanding at year-end are recorded as an assignment of fund equity since they do not constitute expenditures or liabilities.
Outstanding encumbrances at year end are automatically reappropriated the following year.
Unencumbered and unexpended appropriations for other than capital outlay lapse at year-end.
However, the Capital Projects Fund is not budgeted on a project-length basis. Only the budget estimated to be spent in the current fiscal year is appropriated, even if the project will continue into future fiscal years. The City prepares a ten year capital plan, and each project year budget (GAAP Basis) is appropriated separately on an on-going basis.
F. FAIR VALUE MEASUREMENTS
Fair value is defined as 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. The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The fair value hierarchy categorizes the inputs to valuation techniques used to measure fair value into three levels based on the extent to whic h inputs used in measuring fair value are observable in the market.
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 inputs are inputs, other than quoted prices included within level 1, that are observable for an asset or liability, either directly or indirectly.
Level 3 inputs are unobservable inputs for an asset or liability. 45
If the fair value of an asset or liability is measured using inputs from more than one level of the fair value hierarchy, the measurement is considered to be based on the lowest priority level input that is significant to the entire measurement.
G. CASH AND INVESTMENTS
The City’s investments are carried at fair value, as required by generally accepted accounting principles. The City adjusts the carrying value of its investments to reflect their fair value at each fiscal year end, and it includes the effects of these adjustments in income for that fiscal year.
The City pools cash from all sources and all funds, except restricted cash and cash and investments with fiscal agents, so the pool of funds can be inve sted consistent with goals for safety and liquidity, while maximizing yield. Cash is pooled so individual funds can make expenditures at any time.
Investment income is allocated among funds on th e basis of average daily cash and investment balances in each fund, unless there are specific legal or contractual requirements to do otherwise.
Cash and investments are classified in the financial statements as shown below, based on whether or not their use is restricted under the terms of City debt instruments or Agency agreements:
Cash and investments $225,546,642
Cash with fiscal agent 12,772
Restricted cash and investments 4,332,892
Cash and investments of the City 229,892,306
Cash and investments in Fiduciary Funds (separate statement):
Private-purpose Trust Fund 208,592
Custodial Funds 2,343,951
Custodial Funds - External investment pool 302,622
Total cash and investments $232,747,471
Investments Authorized by the California Government Code and the City’s Investment Policy The City’s Investment Policy and the California Go vernment Code allow the City to invest in the following, provided the credit ratings of the issuers are acceptable to the City and approved percentages a
nd maturities are not exceeded. The following table also identifies certain provisions of the California Government Code, or the City’s Investment Policy where the City’s Investment Policy is more restrictive, that addresses interest rate risk, credit risk and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustee that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City’s Investment Policy.
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Minimum Maximum Maximum
Maximum Credit in Investment
Authorized Investment Type Maturity Quality Portfolio In One Issuer U. S. Treasury Bonds, Notes and Bills or
Certificates of Indebtedness 5 Years N/A No Limit No Limit U.S. Government Agency Securities and
U.S. Government Sponsored Enterprise Agencies 5 Years * N/A No Limit No Limit State of California Local Agency
Investment Fund (LAIF Pool) Upon Demand N/A
$75,000,000
per account
$75,000,000
per account
San Mateo County Treasurer's Pool Upon Demand N/A No Limit No Limit State of California Treasury Notes or Bonds 5 Years A No Limit 5% California Local Agency Obligations 5 Years A 30% 5%
Bankers' Acceptances 180 Days N/A 40% 5%
Commercial Paper 270 Days A1/P1 25% 5%
Negotiable Certificates of Deposit 5 Years A 30% No Limit Non-Negotiable Certificates of Deposit 5 Years A 30% No Limit FDIC Insured/Collateralized Time Certificates of Deposit 5 Years N/A 30% 5% Money Market Mutual Funds Upon Demand AAAm 15% 5%
Passbook Savings Account None N/A No Limit No Limit
Repurchase Agreements 1 year N/A 15% 5%
Reverse Repurchase Agreements 92 Days N/A 15% 5%
* However, the City Council specifically grants the authority to the City Treasurer to invest a maximum of $14,000,000 of the City’s portfolio in Government National Mortgage Association securities which, at the time of investment, have terms remaining to maturity in excess of five years.
Public Agencies Post-Employment Trust
On May 22, 2017, the City Council adopted resolu tion 17-58 approving the adoption of the Public Agencies Post-Employment Trust administered by Public Agency Retirement Services (PARS). The Trust is an irrevocable trust and qualifies as an Internal Revenue Section 115 Trust. This Trust will assist the City in mitigating the CalPERS contribution rate volatility. Investments of funds held in Trust are governed by the Investment Guideline Document for the investment account and by the agreement for administrative services with PARS, rather than the general provisions of the California Government Code of the City’s investment policy. The City elected a discretionary in vestment approach which allows the City to maintain oversight of the inve stment management, control on target yield and the portfolio’ risk of tolerance, under the Moderately Conservative Index PLUS investment option. The assets in the Trust will eventually be used to fund pension plan obligations.
Investments Authorized by Debt Agreements
The City must maintain required amounts of cash an d investments with trustees or fiscal agents under the terms of certain debt issues. These funds are unexpended bond proceeds or are pledged as reserves to be used if the City fails to meet its obligations under these debt issues. The California Government Code requires these funds to be invested in accordan ce with City ordinance, bond indentures or State statute.
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The following table identifies the investment types th at are authorized for investments held by fiscal agents. The table also identifies certain provisions of these debt agreements:
Minimum Maximum Maximum
Maximum Credit In Investment
Authorized Investment Type Maturity Quality Portfolio In One Issuer U. S. Treasury Bonds, Notes and Bills N/A N/A No Limit No Limit U.S. Government Agency Securities and
U.S. Government Sponsored Enterprise N/A AAA No Limit No Limit State Obligations
N/A
Highest Rating
Category No Limit No Limit
Commercial Paper 270 Days A No Limit No Limit
Negotiable Certificates of Deposit 365 days A-1+ No Limit No Limit Money Market Mutual Funds N/A AAAm No Limit No Limit
Bankers Acceptances 360 days A-1+ No Limit No Limit
Local Obligations
N/A
Highest Rating
Category No Limit No Limit
State of California Local Agency
Investment Fund (LAIF Pool) Upon Demand N/A No Limit No Limit Municipal Obligations N/A AAA No Limit No Limit
Repurchase Agreements N/A A No Limit No Limit
Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Normally, the longer the maturity of an investment the greater the sensitivity of its fair value to changes in market interest rates.
Information about the sensitivity of the fair values of the City’s cash and investments (including investments held by bond trustees) to market interest rate fluctuations is provided by the following table that shows the distribution of the City’s cash and investments by maturity:
Less than One to More than
Investment Type One Year Five Years Five Years Total
U.S. Treasury Note $948,280 $948,280
U.S. Government Agency Securities 3,850,525 $451,398 4,301,923 Money Market Mutual Funds $12,793 12,793
California Local Agency Investment Fund 21,042,774 21,042,774 San Mateo County Investment Pool 181,302,386 181,302,386 Negotiable Certificates of Deposit 1,960,065 5,061,079 7,021,144 PARS Moderately Conservative Index PLUS Fund 4,332,892 4,332,892 Total Investments $208,650,910 $9,859,884 $451,398 218,962,192 Cash in Bank and On Hand 13,785,279
Total Cash and Investments $232,747,471
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The City is a participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The City reports its investment in LAIF at the fair value amount provided by LAIF, which is the same as the value of the pool share. The balance is available for withdrawal on demand, and is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. Each regular LAIF account is permitted to have up to 15 transactions per month, with a minimum transaction amount of $5,000, a maximum transaction amount of $75 million and at least 24 hours advance notice for withdrawals of $10 million or more. Bond proceeds accounts are subject to a one-time deposit with no cap and are set up with a monthly draw down schedule. Included in LAIF’s investment portfolio are collateralized mortgage obligations, mortgage-b acked securities, other asset-backed securities, loans to certain state funds, United States Treasury Notes and Bills, and floating rate securities issued by federal agencies, government-sponsored enterprises, and corporations. At June 30, 2022, these investments have an average maturity of 311 days.
The City is a participant in the San Mateo County Investment Pool (SMCIP) that is regulated by California Government Code Section 53600 under the oversight of the Treasurer of the County of San Mateo. The City reports its investment in SMCIP at the fair value amount provided by SMCIP. The balance available for withdrawal is based on the accounting records maintained by SMCIP, which are recorded on an amortized cost basis. Included in SMCIP’s investment portfolio are U.S. Treasury Notes, obligations issued by agencies of the U.S. Government, LAIF, corporate notes, commercial paper, collateralized mortgage obligations, mortgage-backed securities, other asset-backed securities, and floating rate securities issued by federal agencies, government-sponsored enterprises, and corporations. At June 30, 2022, these investments matured in an average of 1.45 years.
Money Market Mutual Fund investments are available for withdrawal on demand.
Fair Value Investments
Generally accepted accounting principles require governments to present investments at fair value.
The City adjusts the carrying value of its investment to reflect the fair value at each fiscal year-end, and it includes the effect of this adjustment in income for that fiscal year.
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Credit Risk
Credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. The actual ratings as of June 30, 2022 are provided by Standard and Poor’s except as noted.
Total
Investment Type AAAm AA+/AA/A-1 Investments
U.S. Government Agency Securities $2,930,165 $2,930,165 Money Market Mutual Funds $1,446 11,347 12,793
San Mateo County Investment Pool 181,302,386 181,302,386 Total $1,446 $184,243,898 184,245,344
Not rated:
U.S. Government Agency Securities 1,371,758
California Local Agency Investment Fund 21,042,774
Negotiable Certificates of Deposit 7,021,144
PARS Moderately Conservative Index PLUS Fund 4,332,892
Exempt:
U.S. Treasury Note 948,280
Total Investments $218,962,192
Custodial Credit Risk
The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (for example, broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party.
The City’s investment policy requires that securities transactions be executed on a delivery vs. payment basis. Funds are not wire-transferred until s ecurities are delivered into safekeeping with the City's third party custodian. The custodial relationship is subject to an agreement for services which may be separate from the agreement for other banking services. The safekeeping requirement does not apply to securities which are physically delivered to the City.
Fair Value Hierarchy
The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The fair value hierarchy, which has three levels, is based on the valuation inputs used to measure an asset’s fair value. The following provides a summary of the hierarchy used to measure fair value:
Level 1 - Quoted prices in active markets for identical assets that the City has the ability to access at the measurement date. Level 1 assets may include debt and equity securities that are traded in an active exchange market and that are highly liquid and are actively traded in over-the-counter markets.
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Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets in active markets, quoted prices for identical or similar assets in markets that are not active, or other inputs that are observable, such as interest rates and curves observable at commonly quoted intervals, implied volatilities, and credit spreads. For financial reporting purposes, if an asset has a specified term, a Le vel 2 input is required to be observable for substantially the full term of the asset.
Level 3 - Unobservable inputs should be developed using the best information available under the circumstances, which might include the City’s own data. The City should adjust that data if reasonable available information indicates that other market participants would use different data or certain circumstances specific to the City are not available to other market participants.
The following is a summary of the fair value hierarchy of the fair value of investments of the City as of June 30, 2022:
Investment Type Level 1 Level 2 Total
Investments by Fair Value Level:
U.S. Treasury Note $948,280 $948,280
U.S. Government Agency Securities $4,301,923 4,301,923
Negotiable Certificates of Deposit 7,021,144 7,021,144
Subtotal $948,280 $11,323,067 12,271,347
Investments Measured at Amortized Cost:
Money Market Mutual Funds 12,793
PARS Moderately Conservative Index PLUS Fund 4,332,892
Investments Not Subject to the Fair Value Hierarchy:
California Local Agency Investment Fund 21,042,774
San Mateo County Investment Pool 181,302,386
Total Investments $218,962,192
The U.S. Treasury Note classified in Level 1 of the fair value hierarchy are valued using quoted prices in an active market for identical assets. All investments classified in Level 2 were valued using prices provided by the City’s custodian bank.
H. INVENTORY AND PREPAIDS
Inventory is valued at cost, using the first-in, first-out method. For the General Fund, inventories consist of consumable supplies, and do not constitute available spendable resources, even though they are a component of net current assets. For proprietary funds, inventories represent materials and supplies for operations. The consumption method of accounting is applied to inventories.
Prepaids represent services that are paid for in advance. For governmental funds, prepaids do not constitute available spendable resources even though they are a component of net current assets. The consumption method of accounting is applied to prepaids.
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I. WATER UTILITY ACCOUNTS RECEIVABLE
The City bills usage to water utility customers on a bimonthly basis in arrears. At any given time, an average of one month's usage is unread and unbilled. These unbilled estimated usages have been recognized as revenue and receivables in the financial statements of the Water Utility enterprise fund.
J. ADVANCES TO OTHER FUNDS AND AGENCIES
Current portions of interfund loans receivable (reporte d in "due from" asset accounts) are considered available spendable resources.
K. ACCUMULATED UNPAID VACATION, COMPENSATORY AND SICK LEAVE Accumulated unpaid employee benefits are accrued at year-end. If vacation or compensatory leave is not taken by employees during their employment, the City is obligated to make cash payments to them on termination or retirement at the salary rates then in effect. City employees receive from thirteen to twenty-eight days of vacation each year.
Full-time City employees receive one working day of sick leave for each month of employment.
Employees who terminate for reasons other than death, retirement or abolishment of position lose all accumulated sick leave. Upon death, retirement after the age of 50 and 5 years of service or abolishment of position the City is obligated to pay 50% of unused sick leave, up to from 750 to 1,392 hours, depending on the bargaining unit, at the salary rate then in effect. The value of vested sick leave liability for all employees qualified for retirement on June 30 of each year is accrued.
The City’s liability for compensated absences is recorded in various governmental funds or proprietary funds as appropriate. The liability for compensa ted absences is determined annually. For all governmental funds, compensated absences are reported only if they are still outstanding following an employee’s resignation or retirement.
The changes in the liability for compensated absences were as follows:
Governmental
Activities
Business Type
Activities Total
Balance July 1, 2021 $12,230,831 $2,372,390 $14,603,221 Additions 8,244,739 1,343,333 9,588,072 Payments (7,594,757) (1,053,162) (8,647,919) Balance June 30, 2022 $12,880,813 $2,662,561 $15,543,374 Due within one year $5,642,074 $856,478 $6,498,552
Compensated absences are liquidated by the fund that has recorded the liability. Governmental activities compensated absences are liquidated primarily by the General Fund.
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L. CLAIMS AND JUDGMENTS
The City has recognized a liability for workers' compensation and general liability claims in the Self-Insurance Internal Service Fund. This liability reflects the costs of claims determined to be probable of assertion and measurable in amount.
M. PROPERTY TAX LEVY, COLLECTION, MAXIMUM RATES
Article 13 of the California State Constitution provides for a maximum general property tax rate statewide of $1.00 per $100 of assessed value, and may be adjusted by no more than two percent per year unless the property is sold or transferred, in which case it is then assessed at sales price. Assessed value is calculated at 100% of sales price as defined by the above referenced Article 13.
The State Legislature has determined the method of distribution of receipts from the $1.00 tax levy among the county, cities, school districts and other districts. Counties, cities and school districts may levy such additional tax rate as is necessary to provide for voter-approved debt service. San Mateo County assesses properties, bills for, and collects property taxes on the following schedule:
SECURED
UNSECURED
Valuation dates March 1 March 1
Lien/levy dates January 1 January 1
Due Dates 50% on November 1 July 1
50% on February 1
Delinquent as of December 10 August 31
April 10
The term "unsecured" refers to taxes on property not secured by liens on real property. Property taxes levied are recorded as revenue and receivables, ne t of estimated uncollectible amounts, in the fiscal year of levy. Property taxes which cannot be recorded as current year revenues, in accordance with the modified accrual basis of accounting, have been recorded as unearned revenues.
N. USE OF ESTIMATES
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
O. NEW FUNDS
The City established the Measures A and W Special Revenue Fund during the year ended June 30, 2022. The activity was previously reported in the Gas Tax Special Revenue Fund.
The City established the Affordable Housing Special Revenue Fund during the year ended June 30, 2022. The activity was previously reported in the Low and Moderate Income Housing Special Revenue Fund.
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NOTE 2.
REPORTING ENTITY
The City's Basic Financial Statements include the financial activities of the City, the North San Mateo County Sanitation District, the Daly City Public Facilities Financing Corporation and the Daly City Housing Development Finance Agency. These entit ies are controlled by governing boards consisting of the City Council and are reported as blended component units. Council members are financially accountable for these entities’ operations and approve fees, debt issues and adopt budgets. Blended component units, although legally separate entities ar e, in substance, part of the government’s operations, thus, data from these units are combined with that of the primary government.
The North San Mateo County Sanitation District became a subsidiary district of the City on July 1, 1985. The activities of the District are reported in the Sanitation District Enterprise Fund. The District does not issue separate financial statements.
The activities of the Daly City Public Facilities Financing Corporation (Corporation) are included in the basic financial statements of the Water Utility Enterprise Fund in proportion to the activities carried out on its behalf because the City Council sits as the Board of this entity. The City established the Corporation to facilitate the issuance of Certificates of Participation, currently consisting of various expansion and upgrade projects in the Water Utility. The Corporation acts as a conduit for the leasing of the associated facilities of the utility in order to allow the issuance of its Certificates of Participation (See Note 5). The Corporation does not issue separate financial statements.
The activities of the Daly City Housing Developmen t Finance Agency (Finance Agency) are included in the Affordable Housing and the Low and Moderate Income Housing Assets Special Revenue Funds.
The City established the Finance Agency in 1985 pursuant to California Health and Safety Code (HSC) Division 24, Part 2, Chapter 1, to addres
s the housing needs of the City and the Finance
Agency serves as the Housing Successor to the former Daly City Redevelopment Agency. The primary activity of the Finance Agency is to develop nonsubsidized multifamily rental housing development financing pursuant to Section 34312.3 of the HSC that is owned, operated and managed by private and other agencies, not the Finance Agen cy. The Finance Agency is administered by a Governing Board whose members are the City Council of the City of Daly City, and the City also performs all accounting and administrative functions for the Finance Agency. The Finance Agency does not issue separate financial statements.
The City and the Sanitation District established the Daly City Joint Powers Financing Authority (Financing Authority) in March 2022 pursuant to the Joint Exercise of Powers Act (commencing at Government Code Section 6500) to provide assistance with public financings, including, among others, General Fund lease financings and enterprise fund financings. The Financing Authority is administered by a Governing Board whose members are the City Council of the City of Daly City, and the City also performs all accounting and administrative functions for the Financing Authority. The Financing Authority does not issue separate financial statements. The Financing Authority did not have any activity during the year ended June 30, 2022.
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NOTE 3.
COMMITMENTS AND CONTINGENCIES
A. CONSTRUCTION CONTRACTS
At June 30, 2022, the City had made commitments of approximately $7.8 million for construction work, legal and consulting fees, and purchases of supplies and equipment, which includes the encumbrances in Note 3C below.
B. LITIGATION
The City is subject to litigation arising in the normal course of business. In the opinion of the City Attorney, there is no pending litigation which is likely to have a material adverse effect on the financial position of the City.
C. ENCUMBRANCES
The City uses an encumbrance system as an extension of normal budgetary accounting for governmental funds. Under this system, purchase orders, contracts, and other commitments for the expenditure of monies are recorded in order to reserve that portion of applicable appropriations.
Encumbrances outstanding at year-end are recorded as restricted, committed or assigned fund balance, depending on the classification of the resources to be used to liquidate the encumbrance, since they do not constitute expenditures or liabilities.
Outstanding encumbrances at year-end are automatically
reappropriated for the following year. Unencumbered and unexpended appropriations lapse at year- end. Encumbrances outstanding as of June 30, 2022 were $1,055,425 in the General Fund, $565,843 in the Gas Tax Special Revenue Fund, $75,934
in the Grants Special Revenue Fund, $1,284,221 in the
Capital Projects Fund, and $842,466 in nonmajor governmental funds.
D. FEDERAL AND STATE GRANT PROGRAMS
The City participates in Federal and State grant programs. These programs have been audited by the City’s independent accountants in accordance with the provisions of the Federal Single Audit Act as amended and applicable State requirements. No cost disallowances were proposed as a result of these audits. However, these programs are still subject to further examination by the grantors and the amount, if any, of expenditures which may be disallowed by the granting agencies cannot be determined at this time. The City expects such amounts, if any, to be immaterial.
NOTE 4.
CAPITAL ASSETS
All capital assets are valued at historical cost or estimated historical cost if actual historical cost is not available, except for intangible right to
‐use lease assets, the measurement of which is discussed in Note 7 below. Donated capital assets, donated works of art and similar items, and capital assets received in a service concession arrangement are reported at acquisition value. The City’s policy is to capitalize all assets with costs exceeding $25,000 for all classes of capital assets with useful lives exceeding two years. Prior to July 2020, the City’s policy was to capitalize costs exceeding $25,000 for infrastructure and $5,000 for all other classes of capital assets. 55
The City depreciates capital assets over their estimated useful lives. The purpose of depreciation is to spread the cost of capital assets equitably among all users over the life of these assets. The amount charged to depreciation expense each year represents that year’s pro rata share of the cost of capital assets.
Depreciation is calculated using the straight-line method, which means the cost of the asset is divided by its expected useful life in years and the result is charged to expens e each year until the asset is fully depreciated. The City has assigned the useful lives listed below to capital assets:
Buildings and Improvements 20-50 years Sewage Collection Facilities 10-50 years Streets and Infrastructure 20-60 year s Sewage Disposal and Treatment Facilities
15-50 years
Park Structures and Improvements 10-30 years Sanitation Subsurface Lines and Water Mains
25 years
Vehicles, Equipment, Furniture
and Fixtures
5-20 years Wells and Pump Stations 40-50 years
Right to Use Leased Building 2 year s Water Reservoirs 40-99 years
The City capitalizes major asset purchases and improvements which increase the useful life of the related assets. Minor purchases and routine repair and maintenance costs are charged directly to expense.
Major outlays for capital assets an d improvements are capitalized as pr ojects are constructed. Interest incurred during the construction phase is reflected in the capitalized value of the asset constructed, net of interest earned on the invested proceeds over the same period.
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A. CAPITAL ASSET ADDITIONS AND RETIREMENTS
Capital assets at June 30 comprise:
Balance
June 30, 2021 Balance
(as Restated) Additions Retirements Transfers June 30, 2022 Governmental activities:
Capital assets not being depreciated:
Land $27,856,486 $27,856,486
Construction in progress 16,383, 805 $2,297,149 ($12,405) ($7,703,379) 10,965,170 Total capital assets not being depreciated 44,240,291 2,297,149 (12, 405) (7,703,379) 38,821,656 Capital assets being depreciated:
Buildings & improvements 59,226,591 59,226,591
Right-to-use building 98,554 98,554
Streets & infrastructure 85,226,375 7,371,977 92,598,352 Park structures & improvements 8,030,071 8,030,071
Vehicles & equipment 29, 474,251 2,453,368 (646,450 ) 331,402 31,612,571 Furniture & fixtures 458,590 458,590
Total capital assets being depreciated 182,514,432 2,453,368 ( 646,450) 7,703,379 192,024,729 Less accumulated depreciation for:
Buildings & improvements 37,176,438 1,577,041 38,753,479 Right-to-use building 69,567 69,567
Streets & infrastructure 64,001,754 2,491,749 66,493,503 Park structures & improvements 4,498,668 349,788 4,848,456 Vehicles & equipment 21,461,132 1,441,406 ( 646,450) 22,256,088 Furniture & fixtures 438,155 2,829 440,984
Total accumulated depreciation 127,576,147 5,932,38 0 (646,450) 132,862,077 Net depreciable assets 54,938,285 (3,479,012) 7,7 03,379 59,162,652 Governmental activity capital assets, net $99,178,576 ($1,181,86 3) ($12,405) $97,984,308
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Balance Balance
June 30, 2021 Additions Transfers June 30, 2022
Business-type activities:
Capital assets not being depreciated:
Land $2,862,549 $2,862,549
Construction in progress 8,993,568 $2,068,707 ( $1,035,855) 10,026,420 Total capital assets not being depreciated 11,856,117 2,068,707 (1,035,855) 12,888,969 Capital assets being depreciated:
Buildings & improvements 7,918,904 7,918,904
Sewage facilities 59,021,605 391,436 59,413,041
Mains & subsurface lines 47,945,935 47,945,935
Water reservoirs 12,715,925 12,715,925
Wells & pump stations 9,074,783 9,074,783
Equipment 16,989,638 121,847 644,419 17,755,904
Furniture & fixtures 151,328 151,328
Total capital assets being depreciated 153,818,118 121,847 1,035,855 154,975,820 Less accumulated depreciation for:
Buildings & improvements 6,280,005 166,401 6,446,406
Sewage facilities 40,968,987 1,164,857 42,133,844
Mains & subsurface lines 26,047,640 1,572,064 27,619,704 Water reservoirs 5,865,144 159,293 6,024,437
Wells & pump stations 4,703,056 190,172 4,893,228
Equipment 12,713,191 590,717 13,303,908
Furniture & fixtures 101,374 7,320 108,694
Total accumulated depreciation 96,679,397 3,850,824 100,530,221 Net depreciable assets 57,138,721 (3,728,977) 1,035,855 54,445,599 Business-type activity capital assets, net $68,994,838 ($1,660,270) $67,334,568
B. CAPITAL ASSET CONTRIBUTIONS
Some capital assets may be acquired using federal and state grant funds, or they may be contributed by developers or other governments. These contributi ons are accounted for as revenues at the time the capital assets are contributed.
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C. DEPRECIATION ALLOCATION
Depreciation expense is charged to functions and pr ograms based on the usage of the related assets.
The amounts allocated to each function or program are as follows:
Governmental Activities
General government $190,877
Public safety 374,769
Public works 2,632,437
Culture and recreation 1,543,141
Capital assets held by the City's internal service
funds charged to the various functions based on their
usage of the assets 1,191,156
Total Governmental Activities $5,932,380
Business-Type Activities
Water Utility $1, 226,189
Sanitation District 2,433,940
Civic Center 190,695
Total Business-Type Activities $3,850,824
NOTE 5.
LONG-TERM DEBT
Changes in Long-Term Debt for the fiscal year ended June 30, 2022, are as follows:
Original Issue Balance Balance Current
Amount June 30, 2021 Retirements June 30, 2022 Portion
Governmental Activities Debt
Housing & Urban Development Section 108 Loan
0.35%-2.49%, due FY 2023 (Direct Borrowing) $4,500,000 $808,000 $390,000 $418,000 $418,000 2004 Series A-1 Pension Obligation Bonds
2.650%-5.896%, due FY 2024 36,235,000 11,810,000 3,560,000 8,250,000 3,925,000 Community First National Bank Lease-Fire Pumpers
2.670%, due FY 2028 1,483,056 1,4 83,056 195,490 1,287,566 200,710 Total Governmental Activities 14,101,056 4,145,490 9,955,566 4,543,710 Business-Type Activities Debt
State Water Resources Control Board Loan
2.5%, due FY 2025 (Direct Borrowing) 4,450,128 1,086,754 261,709 825,045 268,252 2012 Water Revenue Refunding Bond
2.0%-3.0%, due FY 2024 6,890,000 1 ,880,000 615,000 1,265,000 625,000 Total Business-Type Activities 2,966,754 876,709 2,090,045 893,252 Total City Long-Term Debt $17,067,810 $5,022,199 $12,045,611 $5,436,962
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During fiscal 2004, the City entered into a $4,500,000 note payable agreement guaranteed under the Department of Housing and Urban Development’s (HUD) Section 108 Loan Guarantee Program.
Proceeds from the note were used to finance the design and construction of the Bayshore Community Center. Principal payments are due annually on August 1; interest payments are due semi-annually on August 1 and February 1. Debt service is payable from future Federal Block Grant monies. The City has pledged certain future grants revenue under Section 106 and Section 108(q) for which the City may become eligible and program income generated directly from the use of the loan funds to repay the note. On April 27, 2015, the City refinanced the outstanding principal balance of the loan of $2,670,000 in order to obtain a lower interest rate. The City realized an interest savings of approximately $384,328. As of June 30, 2022, total principal and interest remaining on the note is $423,121. For fiscal year 2022, principal and interest paid were $404,824 and total block grant revenues were $1,330,183.
On June 1, 2004, the City, through the California Statewide Communities Development Authority, issued $36,235,000 of Taxable Pension Obligation Bonds, Series A-1, to prepay the City’s unfunded PERS accrued actuarial liability of $35,600,000. The City’s outstanding debt under the Taxable Pension Obligation Bonds is unsecured, however it is subject to mandatory sinking fund contributions each year beginning June 1, 2017 for the current year principal amount. Events of default include non- payment of interest or principal when due. The City shall have 60 days to cure any default. There have been no events of default since the Bonds were issue d. Principal is due annually on June 1 and interest is due semiannually on June 1 and December 1, through June 1, 2024. Debt service is payable from available City resources. For fiscal year 2022, principal and interest paid were $4,256,317.
On December 18, 2020, the City entered into a lease financing agreement in the amount of $1,483,056 with Community First National Bank, to acquire two fire pumpers. Events of default on the lease include non-payment of principal and interest when due. A penalty of 10% per year of the amount due will be added on all amount due, and, after five days written notice, the lessor has the right to take possession of the equipment. There have been no events of default since the lease was issued.
Principal and interest are due annually starting on December 18, 2021, with annual payments of $235,088 through 2027. The lease bears an interest rate of 2.670%. For fiscal year 2022, principal and interest paid were $235,089.
On November 18, 2003, the City received a loan in the amount of $4,450,128, plus accrued interest, from the California State Water Resources Control Board. Proceeds from the loan were used for construction of tertiary treatment facilities and distribution pipelines in the City’s Sanitation District.
Principal and interest are due annually on December 1 through December 1, 2024. As long as the loan is outstanding, the City has pledged the Sanitation District Enterprise Fund revenues, net of the operations and maintenance expenses, but excluding depreciation, as defined in the loan agreement.
The City’s outstanding debt under the California State Water Resources Control Board are secured by a pledge of net revenues as previously defined. Even ts of default include non-payment of interest or principal when due. The City shall have 10 days to cure any default. A penalty of one-tenth of one percent (0.1%) of the amount due will be added for each day of nonpayment. There have been no events of default since the loan was issued. As of June 30, 2022, total principal and interest remaining on the note is $866,639. For fiscal year 2022, principal and interest paid were $288,879 and total
Sanitation District Enterprise net revenues were $7,263,328.
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On September 10, 2012, the City authorized the sale of $6,890,000 of 2012 Water Revenue Refunding Bonds to refinance the outstanding balance of the 2004 Certificates of Participation. Principal payments are due annually on June 1 and intere st is due semiannually on June 1 and December 1, commencing June 1, 2013, through June 1, 2024. The City has pledged Water Utility Enterprise Fund revenues, net of the operations and maintenance expenses but excluding depreciation, for debt service, as defined in the indenture. The City’s outstanding debt under the Water Revenue Refunding Bonds is secured by a pledge of net revenues as previously defined. Events of default include non-payment of interest or principal when due, or failing to maintain a debt coverage ratio of at least 1.00. The Trustee of the Bonds shall immediately notify the City upon the occurrence and during the continuance of any default. The City has 60 days to correct any defa ult. The Trustee may declare the Bonds to become immediately due and payable if the City is unable to cure the default. Prior to any judgment or decree for the payment of the amount due has been obtained or entered, the City shall deposit with the Trustee a sum sufficient to pay all matured principal and unpaid interest prior to the default declaration, with a 10% interest rate per annum on the outstanding amount, to cure the default. There have been no events of default since the Bonds we re issued. As of June 30, 2022, total principal and interest remaining on the bonds is $1,303,100. For fiscal year 2022, principal and interest paid were $652,600 and total Water Utility Enterprise Fund net revenues were $9,570,727.
Annual debt service requirements are shown below for all long-term debt with specified repayment terms:
HUD Section 108 Loan Pension Obligation Bonds Fire Apparatus Pumpers Lease Year ending June 30 Principal Interest Princip al Interest Princ ipal In terest Principal Interest
2023 $418,000 $5,121 $3,925,0 00 $486,420 $200,710 $34, 378 $4,543,710 $525,919 2024 4,325,000 255,002 206,0 69 29,019 4,531,069 284,021 2025 211,571 23,517 211,571 23,517
2026 217,220 17,868 217,220 17,868
2027 223,020 12,068 223,020 12,068
2028 228,976 6,113 228,976 6,113
$418,000 $5,121 $8,250,000 $741,422 $1,287,566 $122, 963 $9,955,566 $869,506 Governmental Activities
Total
Business-Type Activities
SWRCB Loan Water Revenue Refunding Bond
Year ending June 30 Principal Interest Principal Interest Principal Interest 2023 $268,252 $20,626 $625,000 $25,300 $893,252 $45,926 2024 274,959 13,920 640,000 12,800 914,959 26,720
2025 281,834 7,048 281,834 7,048
$825,045 $41,594 $1,265,000 $38,100 $2,090,045 $79,694
Total
The City is subject to a debt limit that is 3.75% of the total assessed value of property, net of exempt real property. At June 30, 2022 that amount was $ 540,553,502. As of June 30, 2022, the City did not have any outstanding debt applicable to the limit.
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CONDUIT DEBT
The Finance Agency has assisted private-sector entities by sponsoring their issuance of debt for purposes the City deems to be in the public interest. These debt issues are secured solely by the property financed by the debt. The City and Finance Agency are not legally or morally obligated to pay these debts or be the purchaser of last resort of any foreclosed properties secured by these debts, nor is it obligated to advance City or Finance Agency funds to repay these debts in the event of default by any of these issuers. At June 30, 2022, the balance of this issuers’ outstanding debt was as follows:
Franciscan Moblie Home Park Acquisition Project:
Senior Revenue Refunding Bonds, Series 2007A $38,330,000 Subordinate Revenue Refunding Bonds, Series 2007B 4,450,000 Third Tier Revenue Refunding Bonds, Series 2007C 7,100,000 Fourth Tier Revenue Bonds, Series 2002D 829,000
NOTE 6.
CURRENT INTERFUND BALANCES
Current interfund balances arise in the normal course of business and are expected to be repaid shortly after the end of the fiscal year. The purpose of these interfunds was to cover deficit cash in receiving funds. At June 30, 2022, Community Block Grant Special Revenue Fund owed the General Fund $
22,786.
INTERFUND ADVANCE
On November 13, 2018, the City Council authorized an appropriation of $5,000,000 to maintain water utility operating fund or capital fund reserve balances in compliance with City policy or to fund water utility capital improvement or maintenance projects included in the City’s then current Capital Improvement Plan. Funding for this project was pr ovided by an advance from the Sanitation District Enterprise Fund to the Water Utility Enterprise Fund. The loan and all accrued interest is repayable on or before June 30, 2023, beginning on July 1, 2021, and the loan bears interest at the end of each fiscal year at the quarterly LAIF rate. At June 30, 2022, the balance of the advance was $ 2,570,647, including
accrued interest.
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INTERFUND TRANSFERS
Transfers between funds during the fiscal year ended June 30, 2022 were as follows:
Fund Making Transfer Fund Receiving Transfer Transfer Amount General Fund Gas Tax Special Revenue Fund $1,639,422
Grants Special Revenue Fund 309,154
Capital Projects Fund 514,370
Non Major Governmental Funds 237,553
Internal Service Fund - Motor Vehicles 150,000
Internal Service Fund - Central Services 43,367
Internal Service Fund - Information Systems 23,492
Gas Tax Special Revenue Fund General Fund 360,937
Measures A and W Special Revenue Fund 5,818,566
Capital Projects Fund 482,285
Sanitation District Enterprise Fund 77,321
Measures A and W Special Revenue Fund Gas Tax Special Revenue Fund 277,624 Capital Projects Fund General Fund 171
Gas Tax Special Revenue Fund 417,304
Civic Center Enterprise Fund 5,829
Internal Service Fund - Motor Vehicles 9,661
Internal Service Fund - Information Systems 35,254
Water Utility Enterprise Fund General Fund 961,298
Sanitation District Enterprise Fund 1,715,507
Internal Service Fund - Information Systems 2,048
Sanitation District Enterprise Fund General Fund 1,231,352 Internal Service Fund - Motor Vehicles 278,500
Internal Service Fund - Information Services 6,148
Civic Center Enterprise Fund General Fund 64,117
Non Major Enterprise Fund General Fund 114,580
Non Major Governmental Funds Non Major Governmental Funds 3,990,884 Internal Service Fund - Motor Vehicles General Fund 600,394 Non Major Governmental Funds 12,272
Internal Service Fund - Central Services General Fund 11,532 Internal Service Fund - PBX General Fund 13,163
Internal Service Fund - Building Maintenance General Fund 133,493 Internal Service Fund - Information Services 3,135
Internal Service Fund - Information Services General Fund 227,235 Internal Service Fund - Self-Insurance General Fund 227,677 $19,995,645
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The purpose of the majority of transfers is to provide general support to another fund. General Fund transfers out typically represent a subsidy or in the case of grants, a match of another fund’s expenditures. In addition, in fiscal year 2022, the Gas Tax Special Revenue Fund and the Affordable Housing Special Revenue Fund made transfers to the Measures A and W Special Revenue Fund and the Low and Moderate Income Housing Assets Special Revenue Fund, respectively, to separately report the activity in these new funds.
INTERNAL BALANCES
Internal balances are presented in the governmental-wide financial statements only. They represent the net interfund receivables and payables remaining after the elimination of all such balances within governmental and business-type activities.
NOTE 7.
LEASES
A. POLICIES
A lease is defined as a contract that conveys cont rol of the right to use another entity’s nonfinancial asset (the underlying asset) as specified in the contract for a period of time in an exchange or exchange-like transaction.
Examples of nonfinancial assets include buildings, land, vehicles, and equipment. The City recognizes lease receivables or liabilities with an initial, individual value of $25,000 or more.
Lessee - The City is a lessee for a noncancellable lease of office space, as well as the financed purchase discussed in Note 5. The City recognizes a lease liability and an intangible right‐to‐use lease asset (lease asset) in the government‐wide financial statements.
At the commencement of a lease, the City initially measures the lease liability at the present value of payments expected to be made during the lease term. Subsequently, the lease liability is reduced by the principal portion of lease payments made. The lease asset is initially measured as the initial amount of the lease liability, adjusted for lease payments made at or before the lease commencement date, plus certain initial direct costs. Subsequentl y, the lease asset is amortized on a straight ‐line basis over its useful life.
Key estimates and judgments related to leases include how the City determines (1) the discount rate it uses to discount the expected lease payments to present value, (2) lease term, and (3) lease payments as follows:
The City uses the interest rate charged by the lessor as the discount rate. When the interest rate charged by the lessor is not provided, the City generally uses its estimated incremental borrowing rate as the discount rate for leases.
The lease term includes the noncancellable period of the lease. Lease payments included in the measurement of the lease liability are composed of fixed payments and purchase option price that the City is reasonably certain to exercise. 64
The City monitors changes in circumstances that would require a remeasurement of its lease and will remeasure the lease asset and liability if certain changes occur that are expected to significantly affect the amount of the lease liability.
Lease assets are reported with other capital assets and lease liabilities are reported with long-term debt on the statement of net position.
Lessor - The
City is a lessor for noncancellable leases of buildings and facilities. The City recognizes a lease receivable and a deferred inflow of resources in the government ‐wide and fund financial statements.
At the commencement of a lease, the City initially measures the lease receivable at the present value of payments expected to be received during the lease term. Subsequently, the lease receivable is reduced by the principal portion of lease paymen ts received. The deferred inflow of resources is initially measured as the initial amount of the lease receivable, adjusted for lease payments received at or before the lease commencement date. Subsequently, the deferred inflow of resources is recognized as revenue over the life of the lease term.
Key estimates and judgments include how the City determines (1) the discount rate it uses to discount the expected lease receipts to present value, (2) lease term, and (3) lease receipts as follows:
The City uses its estimated incremental borrowing rate as the discount rate for leases. The lease term includes the noncancellable period of the lease. Lease receipts included in the measurement of the lease receivable is composed of fixed payments from the lessee.
The City monitors changes in circumstances that would require a remeasurement of its lease, and will remeasure the lease receivable and deferred inflow s of resources if certain changes occur that are expected to significantly affect the amount of the lease receivable.
B. LEASES RECEIVABLE
The balances related to leases receivable and deferred inflows of resources as of June 30, 2022 were:
Deferred
Lease Inflows of
Receivable Resources
General Fund
Property easement $79,511 $79,511
Communication sites 8,567,203 8,450,106
Facilities leases 408,336 395,058
Civic Center Enterprise Fund
Facilities leases 9,418,273 9,010,667
Total $18,473,323 $17,935,342
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Property Easement – The City entered into an easement agreement in December 2020 to facilitate the acquisition of an easement for parking access and utilities. As of June 30, 2022, the lease had two years remaining, with annual payments of $40,000. Payments under the agreement begin in October 2022, therefore the City did not recognize lease or interest revenue during the current fiscal year related to this lease. Also, the City has deferred in flows of resources related to this lease that will be recognized over the lease term.
Communication Site Leases – The City leases various locations to third parties for the provisions of mobile/wireless communications services. During the year ended June 30, 2022, the City had nine leases, with original lease terms ranging from five to fifty-five years, including the optional extension periods, and as of June 30, 2022, the leases had 2 to 50 years remaining. The City recognized $384,815 in lease revenue and $167,938 in interest revenue during the current fiscal year related to these leases. Also, the City has deferred inflows of re sources associated with these leases that will be recognized as revenue over the lease term.
Facilities Leases – The City leases various facilities to third parties. During the year ended June 30, 2022, the City had six leases, with original lease te rms ranging from three to twelve years and as of June 30, 2022, the leases had 1 to 15.5 years remaining. The City recognized $1,036,384 in lease revenue and $500,147 in interest revenue during the curre nt fiscal year related to these leases. Also, the City has deferred inflows of resources associated with these leases that will be recognized as revenue over the lease term.
C. LEASE PAYABLE
A summary of governmental activities lease transactions for the fiscal year ended June 30, 2022, are as follows:
Balance
June 30, 2021 Balance Current
(as restated) Retirements June 30, 2022 Portion
Governmental Activities
Lease Payable
MKD Cedar Hill $98,554 $68,851 $29,703 $29,703
Building Lease – The City entered into a five year lease agreement with MKD Cedar Hill as lessee for the use of office space that commenced in Novemb er 2017. An initial lease liability was recorded in the amount of $98,554 during the current fiscal year . as of June 30, 2022, the value of the lease liability was $29,703. The City is required to make monthly principal and interest payments of $6,014. The lease bears the City’s incremental borrowing rate of 4.92%. The value of the right-to-use asset as of the end of the current fiscal ye ar was $98,554 and had accumulated amortization of $69,567.
The future principal and interest lease payments as of June 30, 2022, were as follows:
For the Year
Ended June 30 Principal Interest Tota l
2023 $29,703 $366 $30,069
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NOTE 8.
RETIREMENT PLAN
A. GENERAL INFORMATION ABOUT THE PENSION PLANS
Plan Descriptions – A
ll qualified permanent and probationary employees are eligible to participate in the City’s separate Safety (police and fire) and Miscellaneous (all other) Plans, agent multiple- employer defined benefit pension plans administere d by the California Public Employees’ Retirement System (CalPERS), which acts as a common investme nt and administrative agent for its participating member employers. Benefit provisions under the Plans are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.
Benefits Provided – CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries.
Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligible to re tire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law.
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The
Plans’ provisions and benefits in effect at June 30, 2022, are summarized as follows:
Mi s cel l aneous
Hire date
Prior to
January 1, 2013
On or after
January 1, 2013
Benefit formula 3% @ 60 2% @ 62
Benefit vesting schedule 5 years service 5 years service Benefit paym ents m onthly for life m onthly for life
Retirement age 50-60 52-67
Monthly benefits, as a % of eligible com pensation 2.0%-3.0% 1.0%-2.5% Required em ployee contribution rates 8.00% 6.50%
Required em ployer contribution rates 12.69% * 12.69% * Required Unfunded Accrued Liab ility Contribution $6,490,352 *Effective February 15, 2014, members in the Teamsters Local 856 Public Safety Dispatchers and P
olice Assistants were required to pay an additional 5.41% for their share of pension costs an
d members in the Teamsters Local 856 Clerical/Technical unit pay an additional 5.51% for t
heir share of pension costs.
Safety
Hire date
Prior to
January 1, 2013
On or after
January 1, 2013
Benefit formula 3% @ 55 2.7% @ 57
Benefit vesting schedule 5 years service 5 years service Benefit paym ents m onthly for life m onthly for life
Retirement age 50-55 50-57
Monthly benefits, as a % of eligible com pensation 2.4%-3.0% 2.0%-2.7% Required em ployee contribution rates 9.00% 11.50%
Required em ployer contribution rates 18.01% * 18.01% * Required Unfunded Accrued Liab ility Contribution $8,013,267 *Effective July 11, 2020, members in the Daly City Police Officers Association and Daly City P
olice Managem ent Bargaining Unit were required to pay an additional 3.0% for their share of
pension costs.
Beginning in fiscal year 2016, CalPERS collects employe r contributions for each Plan as a percentage
of payroll for the normal cost portion as noted in the rates above and as a dollar amount for contributions toward the unfunded liability (UAL). The dollar amounts are billed on a monthly basis, or the City can elect to make a lump-sum payment at the beginning of the fiscal year. The City’s required contributions for the unfunded liability in the Miscellaneous and Safety Plans for the year ended June 30, 2022 were $6,490,352
and $8,013,267, respectively, which were made under the lump- sum payment option.
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Employees Covered – The following employees were covered by the benefit terms for each Plan as of the most recent actuarial valuation date of June 30, 2020 and measurement date of June 30, 2021:
Miscellaneous Safety
Inactive employees or beneficiaries currently receiving benefits 525 336 Inactive em ployees entitled to but not yet receiving benefits 414 102 Active em ployees 276 153
Total 1,215 591
Contributions
– Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. Funding contributions for both Plans are determined annually on an actuarial basis as of June 30 by CalPERS.
The actuarially determined rate is the estimated am ount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the diffe rence between the actuarially determined rate and the contribution rate of employees. Employer contribution rates may change if plan contracts are amended. Payments made by the employer to satisfy contribution requirements that are identified by the pension plan terms as plan member contribution requirements are classified as plan member contributions.
The City’s Contributions to the Plans for the year ended June 30, 2022 were $9,832,915 for the Miscellaneous Plan and $12,263,576 for the Safety Plan.
B. NET PENSION LIABILITY
The City’s net pension liability for each Plan is measured as the total pension liability, less the pension plan’s fiduciary net position. The net pension liability of each Plan is measured as of June 30, 2021, using an annual actuarial valuation as of June 30, 2020 rolled forward to June 30, 2021 using standard update procedures. A summary of principal assumptions and methods used to determine the net pension liability is shown below.
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Actuarial Assumptions – The total pension liabilities in the June 30, 2020 actuarial valuations were determined using the following actuarial assumptions:
Valuation Date June 30, 2020
Measurement Date June 30, 2021
Actuarial Cost Method Entry-Age Normal Cost Method
Actuarial As s umptions :
Discount Rate 7.15%
Inflation 2.50%
Payroll G rowth 2.75%
Projected Salary Increase V aries by Entry Age and Service Investm ent Rate of Return 7.15% (1)
Mortality Derived us ing CalPERS Members hip Data for all Funds (2) Pos t Retirement Benefit Increas e
The lesser of contract COLA or 2.50% until Purchasing
Protection Allowance floor on purchasing power applies,
2.50% thereafter
(1)
N
et of pension plan investm ent ex penses, including inflation (2) The mortality table used was developed based on CalPERS' specific data. The probabilities of mortality are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015. Pre- retirement and post-retirement mortality rates include 15 years of projected mortality improvement using 90% of Scale MP-2016 published by the Society of Actuaries. For m ore details on this table, please refer to the CalPERS Ex perience Study and Review of Actuarial Assum ptions report from December 2017 that can be found on the CalPERS website.
The underlying mortality assumptions and all other actuarial assumptions used in the June 30, 2020 valuation were based on the results of a December 2017 actuarial experience study for the period 1997 to 2015. Further details of the Experience Study can be found on the CalPERS website at www.calpers.ca.gov.
Discount Rate – The discount rate used to measure the total pension liability for each Plan was 7.15%.
The projection of cash flows used to determine the discount rate for each Plan assumed that contributions from all plan members in the Public Employees Retirement Fund (PERF) will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determine d. Based on those assumptions, each Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members for all plans in the PERF. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability for each Plan.
The long-term expected rate of return on pension plan investments was determined using a building- block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. 70
In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows. Using historical returns of all the funds’ asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11+ years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the rounded single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equal to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses.
The table below reflects the long-term expected real rates of return by asset class.
Asset C l ass (a)
Assum ed
Asset
Allocation
Real Return
Years 1 - 10 (b)
Real Return
Y ears 11+ (c)
Public Equity 50.0% 4.80% 5.98%
Fixed Income 28.0% 1.00% 2.62%
Inflation Assets 0.0% 0.77% 1.81%
Private Equity 8.0% 6.30% 7.23%
Real Assets 13.0% 3.75% 4.93%
Liquidity 1.0% 0.00% -0.92%
Total 100.0%
(a) I
n the CalPERS Annual Com prehensive Financial Report, Fix ed Incom e is included in G
lobal Debt Securities; Liquidity is included in Short-Term Investm ents; Inflation Assets are included in both G lobal Equity Securities and G lobal Debt Securities. (b) A
n ex pected inflation of 2.0% used for this period.
(c) A
n ex pected inflation of 2.92% used for this period.
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C. CHANGES IN THE NET PENSION LIABILITY
The changes in the Net Pension Liability for each Plan follow:
Miscellaneous Plan:
Increase (Decrease)
Total Pension
Liability
Plan Fiduciary
Net Position
Net Pension
Liability/(Asset)
Balance at June 30, 2020 (Measurement Date) $344,188,975 $267,865,833 $76,323,142 Changes in the year:
Service cost 4,750,071 4,750,071
Interest on the total pension liability 24,305,480 24,305,480 Differences between actual and expected experience 2,730,394 2,730,394 Plan to Plan Resource Movement
Contributions - employer 8,924,993 (8,924,993)
Contributions - employees 2,129,297 (2,129,297)
Net investment income 59,983,132 (59,983,132)
Benefit payments, including refunds of employee
contributions (18,715,236) (18,715,236)
Other Miscellaneous Expense
Administrative Expense (267,582) 267,582
Net changes 13,070,709 52,054,604 (38,983,895)
Balance at June 30, 2021 (Measurement Date) $357,259,684 $319,920,437 $37,339,247 Safety Plan:
Increase (Decrease)
Total Pension
Liability
Plan Fiduciary
Net Position
Net Pension
Liability/(Asset)
Balance at June 30, 2020 (Measurement Date) $363,985,149 $252,126,108 $111,859,041 Changes in the year:
Service cost 5,977,808 5,977,808
Interest on the total pension liability 25,785,538 25,785,538 Changes in assumptions
Differences between actual and expected experience 3,789,911 3,789,911 Plan to Plan Resource Movement
Contributions - employer 10,622,105 (10,622,105)
Contributions - employees 2,777,982 (2,777,982)
Net investment income 56,328,465 (56,328,465)
Benefit payments, including refunds of employee
contributions (20,254,165) (20,254,165)
Other Miscellaneous Expense
Administrative Expense (251,859) 251,859
Net changes 15,299,092 49,222,528 (33,923,436)
Balance at June 30, 2021 (Measurement Date) $379,284,241 $301,348,636 $77,935,605 TOTAL - BOTH PLANS $736,543,925 $621,269,073 $115,274,852 72
Sensitivity of the Net Pension Liability to Changes in the Discount Rate – The following presents the net pension liability of the City for each Plan, calcula ted using the discount rate for each Plan, as well as what the City’s net pension liability would be if it were calculated using a discount rate that is 1- percentage point lower or 1-percentage point higher than the current rate:
Miscellaneous Safety Total
1% Decrease 6.15% 6.15% 6.15%
Net Pens ion Liability $82,832,680 $125,247,685 $208,080,365 Current Discount Rate 7.15% 7.15% 7.15%
Net Pens ion Liability $37,339,247 $77,935,605 $115,274,852 1% Increase 8.15% 8.15% 8.15%
Net Pens ion Liability ($414,416) $38,598,903 $38,184,487 Pension Plan Fiduciary Net Position – Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports.
D. PENSION EXPENSE AND DEFERRED OUTFLOWS/INFLOWS OF RESOURCES
RELATED TO PENSIONS
Pension expense is the change in net pension liability from the previous fiscal year to the current fiscal year less adjustments. Deferred outflows and deferre d inflows of resources related to pensions are certain changes in total pension liabilities and fiduciary net position that are to be recognized in future pension expense. For the year ended June 30, 2022 the City recognized pension expense of $1,184,126 for the Miscellaneous Plan and $7,362,824 for the Safety Plan, for total pension expense of $8,546,950. At June 30, 2022, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
Miscellaneous Plan:
Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to measurement date $9,832,915 Differences between actual and expected experience 1,528,631 Cha
nges in assumptions
Net differences between projected and actual earnings on plan investments ($29,695,554)
Total $11,361,546 ($29,695,554)
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Safety Plan:
Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to measurement date $12,263,576 Differences between actual and expected experience 4,024,382 Cha
nges in assumptions
Net differences between projected and actual earnings on plan investments ($27,828,785)
Total $16,287,958 ($27,828,785)
Total Miscellaneous and Safety Plans $27,649,504 ($57,524,339) The amount of $22,096,491 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2023. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:
Y ear Ended
June 30 Miscellaneous Plan Safety Plan Total
2023 ($6,201,425) ($4,532,160) ($10,733,585)
2024 (6,613,286) (5,001,852) (11,615,138)
2025 (7,125,004) (6,554,815) (13,679,819)
2026 (8,227,208) (7,715,576) (15,942,784)
Annual Am ortization
E. SUBSEQUENT EVENT - REDUCTION OF CALPERS DISCOUNT RATE On July 12, 2021, CalPERS reported a preliminary 21.3% net return on investments for fiscal year 2020-21.
Based on the thresholds specified in CalPERS Funding Risk Mitigation policy approved by the CalPERS Board in 2015, the excess return of 14.3% prescribes a reduction in investment volatility that corresponds to a reduction in the discount rate used for funding purposes of 0.20%, from 7.00% to
6.80%. Since CalPERS was in the final stages of the four-year Asset Liability Management (ALM) cycle, the CalPERS Board elected to defer any changes to the asset allocation until the ALM process concluded, and the board could make its final decision on the asset allocation in November 2021.
On November 17, 2021, the board adopted a new strategic asset allocation.
The new asset allocation
along with the new capital market assumptions, economic assumptions and administrative expense assumption support a discount rate of 6.90% (net of investment expense, but without a reduction for administrative expense) for financial reporting purposes. This includes a reduction in the price inflation assumption from 2.50% to 2.30% as recommended in the November 2021 CalPERS Experience Study and Review of Actuarial Assumptions. This study also recommended modifications to retirement rates, termination rates, mortality rate s and rates of salary increases that were adopted by the CalPERS Board. These new assumptions will be reflected in the CalPERS GASB 68 accounting valuation reports for the June 30, 2022, measurement date. 74
NOTE 9.
POST EMPLOYMENT BENEFITS OTHER THAN PENSION
The City provides certain health care benefits for employees who retire directly from the City with at least five years of service with the City and wh o are vested in the California Public Employees Retirement System (CalPERS). The City participates in the CalPERS health care plan which is governed under the California Public Employees H ealth and Medical Care Act (PEHMCA). Required retiree medical plan contributions are also governed by PEHMCA for member agencies. The City joined the California Employers' Retiree Benefit Tr ust (CERBT), an agent multiple-employer plan administered by CALPERS, consisting of an aggregation of single-employer plans. The CERBT issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained from the California Public Employees' Retirement System, CERBT, P.O. Box 942703, Sacramento, CA 94229-2703.
The City contributes up to a fixed dollar amount for retiree medical benefits, which varies by employee bargaining group and coverage level as governed by PEHMCA. Benefits continue for surviving spouses in amounts as required by PEHMCA. Should an eligible retiree opt out of the CalPERS medical plan, they will receive $120 to $125 per month in lieu of contributions to the CalPERS plan.
As of the June 30, 2021 measurement date, approximately 496 retirees were eligible and were receiving retiree health care benefits from the City and approximately 38 inactive employees entitled to but not yet receiving benefit payments. There were approximately 437 active full time employees that should they meet requirements will be eligible to receive health care benefits upon retirement.
For the year ended June 30, 2022, the City contributed $ 4,453,620 to the Plan, which was comprised of
benefit premiums of $2,530,620, prefunding contributions of $ 1,000,000 and implied subsidy benefit payments of $923,000.
A. FUNDING POLICY AND ACTUARIAL ASSUMPTIONS
The total OPEB liability was determined as part of a June 30, 2020 actuarial valuation using the entry age normal actuarial cost method. This is a projected benefit cost method, which takes into account those benefits that are expected to be earned in the future as well as those already accrued. The actuarial assumptions included 2.50% inflation rate, 5.50% investment rate of return, 2.75% projected annual salary increase, and a medical trend of 6.50% (Non-Medicare), 5.65% (Medicare-Non-Kaiser) and 4.6% (Medicare-Kaiser) in 2023 decreasing to an ultimate rate of 3.75% in 2076. The actuarial methods and assumptions used include techniques that smooth the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets.
Actuarial calculations reflect a long-term perspective and actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future.
Actuarially determined amounts are subject to revision at least biannually as results are compared to past expectations and new estimates are made about the future. The City’s OPEB unfunded actuarial accrued liability is being amortized as a level percentage of projected payroll using a 30 year closed amortization period for an initial June 30, 2008 Unfunded Accrued Actuarial Liability (UAAL), a 20 year closed amortization period for method assumptions and plan changes and 15 years for gains and losses, with a maximum of a 30 year combined closed period. 75
B. NET OPEB LIABILITY
Actuarial Methods and Assumptions – The City’s net OPEB liability was measured as of June 30, 2021 and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation dated June 30, 2021.
The long-term expected rate of return on OPEB pl
an investments was determined using a building-block
method in which expected future re al rates of return (expected return s, net of OPEB plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table:
Long-Term
Target Expected Real
Asset Class Allocation Rate of Retur n
Global Equity 40% 4.56%
Fixed Income 43% 0.78%
TIPS 5% -0.08%
Commodities 4% 1.22%
REITs 8% 4.06%
Assumed Long-Term Rate of Inflation 2.50%
Expected Long-Term Net Rate of Return 5.50%
Discount Rate – The discount rate used to measure the total OPEB liability was 5.5%. The projection of cash flows used to determine the discount rate assu med that City contributions will be made at rates equal to the actuarially determined contribution rates. Based on those assumptions, the OPEB plan’s fiduciary net position was projected to be available to make all projected OPEB payments for current active and inactive employees and beneficiaries. Therefore, the long-term expected rate of return on OPEB plan investments was applied to all periods of projected benefit payments to determine the total OPEB liability.
Changes of Assumptions – For the measurement date of June 30, 2021, the discount rate decreased from 6.25% to 5.5%, the inflation rate decreased from 2.75% to 2.50%, the payroll growth rate decreased from 3.00% to 2.75%, and the mortality improvement scale was updated to Scale MP- 2021.
In addition, the City changed from CERBT’s Investment Strategy 2 to 1 effective August 23, 2022, to take advantage of typically higher returns in Strategy 1. 76
C. CHANGES IN NET OPEB LIABILITY
The changes in the net OPEB liability follows:
Total OPEB Plan Fiduciary Net OPEB
Liability Net Position Liability/(Asset)
(a) (b) (a) - (b
)
Balance at June 30, 2021 $56,925,096 $14,815,070 $42,110,026 Changes Recognized for the Measurement Period:
Service Cost 1,480,458 1,480,458
Interest on the total OPEB liability 3,541,517 3,541,517 Changes in benefit terms 0
Differences between expected and actual experience (1,048,749) (1,048,749) Changes of assumptions 581,149 581,149
Contributions from the employer 5,482,594 (5,482,594)
Net investment income 2,914,658 (2,914,658)
Administrative expenses (5,425) 5,425
Benefit payments (3,482,594) (3,482,594) 0
Net changes 1,071,781 4,909,233 (3,837,452)
Balance at June 30, 2022 (June 30, 2021 Measurement Date) $57,996,877 $19,724,303 $38,272,574 Increase (Decrease)
Detailed information about the OPEB plan’s fiduciary net position is available in the separately issued Plan financial report that may be obtained from the CERBT. The benefit payments above include impli
ed subsidy benefit payments in the amount of $866,000.
D. SENSITIVITY OF THE NET OPEB LIABILITY TO CHANGES IN THE DISCOUNT RATE
AND HEALTHCARE COST TREND RATES
The following presents the net OPEB liability of the City, as well as what the City's net OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point lower or 1-percentage- point higher than the current discount rate:
Net OPEB Liability/(Asset)
Discount Rate -1%
Current
Discount Rate Discount Rate +1%
(4.5%) (5.5%) (6.5%)
$45,184,006 $38,272,574 $32,479,102
The following presents the net OPEB liability of the City, as well as what the City's net OPEB liability would be if it were calculated usin g healthcare cost trend rates that are 1-percentage-point lower or 1- percentage-point higher than the current healthcare cost trend rates:
Net OPEB Liability/(Asset)
Current
Healthcare Cost
1% Decrease Trend Rates 1% Increase
$34,914,167 $38,272,574 $42,239,461
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E. OPEB EXPENSE AND DEFERRED OUTFLOWS/INFLOWS OF RESOURCES RELATED
TO OPEB
For the year ended June 30, 2022, the City recognized OPEB expense of $2,543,004. At June 30, 2022, the City reported deferred outflows and inflows of resources related to OPEB from the following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
$4,453,620
Difference between expected and actual experience ($2,897,299) Changes in assumptions 475,486 (669,779)
Net differences between projected and actual earnings on plan investments (1,556,636)
Total $4,929,106 ($5,123,714)
Employer contributions made subsequent to the measurement date $4,453,620 reported as deferred outflows of resource
s related to contributions subsequent to the
measurement date will be recognized as a reduction of the OPEB liability in the year ended June 30, 2023. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized as part of OPEB expense as follows:
Y ear Annual
Ended June 30 Am ortization
2023 ($1,538,660)
2024 (1,539,989)
2025 (981,204)
2026 (
545,870)
2027 (
42,505)
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NOTE 10.
DEFERRED COMPENSATION PLAN
City employees may defer a portion of their compensation under a City sponsored deferred compensation plan created in accordance with Internal Revenue Code Section 457. Under this plan, participants are not taxed on the deferred portion of their compensation until distributed to them; distributions may be made only at termination, retirement, death or in an emergency as defined by the Internal Revenue Service.
The Plan is part of the public agency agent multiple-employer defined contribution plan that is administered by CalPERS. Benefit provisions unde
r the Plan are established by City Resolution.
The laws governing deferred compensation plan assets require plan assets to be held by a trust for the exclusive benefit of plan participants and their beneficiaries. Since the assets held under these plans are not the City’s property and are not subject to City control, they have been excluded from these financial statements.
The City has no liability for any losses incurred by the Plan and does not participate in any gains, but does have the duty of due care that would be required of an ordinary prudent investor. The City has a contract with Mission Square to manage and invest the assets of the Plan. The administrator pools the assets of the Plan with those of other participants and does not make separate investments for the City. The assets in the Plan are the sole property of the participants or their beneficiaries. Since the assets held under the Plan are not the City’s property and are not subject to claims by general creditors of the City, they have been excluded from these financial statements. The Plan requires investments to be stated at fair market value and it requires all gains and losses on Plan investments to accrue directly to participant accounts.
The City adopted a Resolution that requires a monthly deferred compensation contribution of $1,000 for the City Manager. The City does not make any other contributions to the Plan. The City’s required contributions for the year ended June 30, 2022 totaled $12,000. 79
NOTE 11.
SELF-INSURANCE
The Self-Insurance Internal Service Fund was established in 1979 to provide for payment of costs associated with the City’s risk management program s. Fund revenues consist of interest earnings, reimbursements of claims paid by the Fund and charges to other funds. The latter is intended to match the charges for insurance premiums for coverage in ex cess of self-insured amounts, estimated payments resulting from self-insurance programs, operating expenses and the provision of reserves for pending and possible future claims.
The City has a self-insured retention for the first $250,000 of general and automobile liability claims and maintains a $25,000 deductible for property losses. Losses in excess of the retention up to $25,000,000 on general and automobile liability are covered by purchased excess insurance. The City purchases combined property, boiler and machinery and automobile comprehensive insurance covering all but the deductible on the full value of City property. Settlements have never exceeded insurance coverage. The City expenses the incurred liabilities for claims in cases where such amounts are reasonably determinable and where the likelihood of liability exists. Included are estimates for incurred but not reported claims, which are calculated based on claims experience.
The City is a member of Public Risk Innovation, Solutions, and Management (PRISM), a joint powers authority (JPA) which provides excess workers’ compensation liability claims coverage above the City’s self-insured retention of $350,000 per occurrence. Losses above the self-insured retention are pooled with excess reinsurance purchased to provide coverage to statutory limits. During the fiscal year ended June 30, 2022, the City contributed $627,877
to PRISM for current year coverage. Audited financial
statements for PRISM are available from PRISM at 75 Iron Point Circle, Suite 200, Folsom, CA 95630.
The City’s present value liability for uninsured claims including a provision for claims incurred but not reported using a discount rate of 2% was computed as follows based on claims experience for the years ended June 30, 2022 and 2021:
2022 2021
Beginning balance of claims payable $10,150,000 $9,194,000 Increase in estimated claims liability 3,587,995 3,415,361 Claims paid (3,250,995) (2,459,361)
Ending balance of claims payable $10,487,000 $10,150,000 Current Portion $2,544,159 $2,452,655
The undiscounted claims totaled $11,569,000 at June 30, 2022.
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NOTE 12.
NET POSITION AND FUND BALANCE
A. NET POSITION
Net Position is the excess of all the City’s assets and deferred outflows over all its liabilities and deferred inflows, regardless of fund. Net Position is divided into three captions. These captions apply only to Net Position and are described below:
Net Investment in Capital Assets describes the portion of Net Position which is represented by the current net book value of the City’s capital assets, less the outstanding balance of any debt issued to finance these assets.
Restricted describes the portion of Net Position which is restricted as to use by the terms and conditions of agreements with outside parties, governmental regulations, laws, or other restrictions which the City cannot unilaterally alter. These principally include developer fees received for use on capital projects, debt service requirements and amounts required to be set aside for low and moderate income housing.
Unrestricted describes the portion of Net Position which is not restricted as to use.
B. GOVERNMENTAL FUND BALANCES
The City’s fund balances are classified in accorda nce with generally accepted accounting principles, Fund Balance Reporting and Governmental Fund Type Definitions, which requires the City to classify its fund balances based on spending constraints imposed on the use of resources.
For programs with multiple funding sources, the City prioritizes and expends funds in the following order: Restricted, Committed, Assigned, and Unassigned. Each category in the following hierarchy is ranked according to the degree of spending constraint.
Nonspendables represents balances set aside to indicate items do not represent available, spendable resources even though they are a component of assets. Fund balances required to be maintained intact, such as Permanent Funds, and assets not expected to be converted to cash, such as prepaids, notes receivable, and land held for redevelopment are included. However, if proceeds realized from the sale or collection of nonspendable assets are restricted, committed or assigned, then Nonspendable amounts are required to be presented as a component of the applicable category.
Restricted fund balances have external restrictions imposed by creditors, grantors, contributors, laws, regulations, or enabling legislation which requires the resources to be used only for a specific purpose.
Encumbrances and nonspendable amounts subject to restrictions are included along with spendable resources.
Committed fund balances have constraints imposed by formal action of the City Council by resolution which may be altered only by formal action in the same manner. Encumbrances and nonspendable amounts subject to council commitments are included along with spendable resources.
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Assigned fund balances are amounts constrained by the City’s intent to be used for a specific purpose, but are neither restricted nor committed. Intent is expressed by the City Council by resolution or its designee (City Manager) and may be changed at the discretion of the City Council by resolution. This category includes encumbrances; Nonspendables, when it is the City’s intent to use proceeds or collections for a specific purpose, and residual fund balances, if any, of Special Revenue, Capital Projects and Debt Service Funds which have not been restricted or committed.
Unassigned fund balance represents residual amounts that have not been restricted, committed, or assigned. This includes the residual general fund balance and residual fund deficits, if any, of other governmental funds.
Detailed classifications of the City’s Fund Balances, as of June 30, 2022, are below:
Other
General Gas Measures Capital Governmental
Fund Balance Classifications Fund Tax Grants A and W Projects Funds Total Nonspendables:
Items not in spendable form:
Inventories $18,150 $23,317 $41,467
Petty cash 7,155 7,155
Prepaids 360,359 $1,484 361,843
Loan receivable 200,000 200,000
Loan receivable from
Successor Agency 12,142,785 12,142,785
Total Nonspendable 12,728,449 23,317 1,484 12,753,250
Restricted for:
Pension benefits 4,332,892 4,332,892
Gas Tax Projects 8,809,993 8,809,993
Capital Projects 1,000,00 0 $9,065,779 11,026,935 21,092,714 Affordable Housing $5,101,756 5,101,756
Low and Moderate Income
Housing Assets 4,061,609 4,061,609
555,562 555,562
Traffic Safety 97,242 97,242
Grants $1,184,650 1 1,184,651
Total Restricted 5,332,892 8,809,993 1,184,650 9,065,779 11,026,93 5 9,816,170 45,236,419 Assigned to:
Capital Projects 16,069,890 16,069,890
Other Contracts 1,055,425 1,055,425
Total Assigned 1,055,425 16,069,890 17,125,315
Unassigned:
Contingency Fund 1,000,000 1,000,000
Operating Reserve 18,000,000 18,000,000
Unassigned 31,928,350 31,928,350
Total Unassigned 50,928,350 50,928,350
Total Fund Balances $70,045,116 $8,833,310 $1,18 4,650 $9,065,779 $27,098,30 9 $9,816,170 $126,043,334 Linda Vista Benefit Assessment
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C. MINIMUM FUND BALANCE POLICY
The City Council adopted a General Fund Reserve Po licy in July 2020 to establish target reserve levels and the methodology for calculating reserve leve ls. The Policy also establishes criteria for the use of reserves and a process to replenish reserves.
The Policy requires the City to strive to maintain the following fund balances:
1) Contingency Fund
The City shall maintain a minimum Contingency Fund reserve equal to $1,000,000 within its General Fund to provide a financial cushion to cover revenue shortfalls resulting from unexpected economic changes or recessionary periods or to provide funds in the event of major unplanned expenditures the City could face as a result of natural or man-made disasters such as earthquakes, windstorms, landslides, floods, wildfires, natural gas leaks, or terrorist attacks.
The balance of the Contingency Fund Reserve was $1,000,000 at June 30, 2022 and is reported
as a component of General Fund unassigned fund balance. 2) General Fund Operating Reserve
The City shall maintain a minimum General Fund operating reserve equal to two months (17%), and a targeted reserve equal to three months (25%), of General Fund annual operating expenditures plus recurring (i.e., not one-time) transfers to other funds for that fiscal year.
These reserves will be used to provide adequate cash flow and budget contingencies.
The balance of the Operating Reserve was $1 8 million at June 30, 2022 and is reported as a component of General Fund unassigned fund balance.
If reserves are projected to fall below, or unexpectedly fall below, the minimum levels as set by this policy, the City shall include within its annual budget a plan to restore reserves to the minimum levels within two years based on its long-range financial forecast. Such a plan may include, but not be limited to, revenue enhancements, service delivery changes, expenditure controls/cost shifts, and/or service level reductions. At no time shall reserves be planned to fall below zero for any operating or capital fund.
D. NET POSITION RESTRICTED FOR QUALIFIED CAPITAL OUTLAY The City established a Reserve for Qualified Capital Outlay in the Sanitation District Enterprise Fund and transferred into it amounts from fiscal years 2019 to 2022 necessary to ensure compliance with State Gann Limit provisions. These funds will be used solely to pay for Gann Limit excludable capital expenses. To qualify, they must be for assets with a value greater than $100,000 and a useful life of at least 10 years.
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E. RESTATEMENT
The City implemented the provisions of Governmental Accounting Standards Board Statement No. 87, Leases, during the year ended June 30, 2022. As a result, the City determined that beginning the balances of leases receivable and deferred inflows of resources related to leases were $19,356,538 and the balances of the lease payable and intangible right-to-use asset was $98,554 as of July 1, 2021 and restated and increased the balances in that amount, and the net effect on beginning net position was zero. See the Leases disclosure in Note 7.
NOTE 13.
LOANS AND NOTES RECEIVABLE
Housing Rehabilitation Program - The City administers a housin g rehabilitation program using Housing and Community Development Block Grant (CDBG) and Cal Home funds that is accounted for in the Community Block Grant Special Revenue Fund and Grants Special Revenue Fund. Under this program, individuals with incomes below a certain le vel are eligible to receive low interest loans, secured by deeds of trust or mobile home liens, fo r construction work on their homes. Although these loans and notes are expected to be repaid, their bala nce has been offset by unavailable revenue as they are not expected to be repaid during the next fiscal year.
During fiscal year 2022, the City made loans to
4 participants under this program and the CDBG and Cal
HOME loan program activity is as follows:
Beginning Balance $1,418,406
New loans 82,145
Loan repayments (65,881)
Loans forgiven (11,198)
Ending Balance $1,423,472
Daly City Partnership Loan – In October 2021, the City made a loan of $200,000 to the Daly City Partnership, a nonprofit corporation, to administer the services provided for the rental support and case management services for very low income residents negative impacted by the COVID-19 pandemic, by supporting cash flow during the administration of those programs. The loan does not bear interest and is repayable on or before December 31, 2022.
NOTE 14.
ACTIVITIES OF THE SUCCESSOR AGENCY TO THE FORMER REDEVELOPMENT AGENCY
The activities of the Successor Agency are report ed in the Successor Agency to the Redevelopment Agency Private-Purpose Trust Fund as the activities are under the control of the Oversight Board. The City provides administrative services to the Successo r Agency to wind down the affairs of the former Redevelopment Agency.
Information presented in the following footnotes re presents assets and liabilities of the Successor Agency.
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A. CASH
Cash and investments of the Successor Agency as of June 30, 2022 are discussed in Note 1H above.
Information presented in the following footnotes represents other assets and liabilities of the Successor Agency as of June 30, 2022.
B. LONG RANGE PROPERTY MANAGEMENT PLAN APPROVAL
On December 14, 2015 the Successor Agency received confirmation from the DOF that the DOF had reviewed and approved the Successor Agency’s Long Range Property Management Plan (LRPMP).
C. LOANS BETWEEN THE CITY AND THE SUCCESSOR AGENCY
Due to the dissolution of the Redevelopment Agency, loans payable, totaling $23,842,357, from the Redevelopment Agency to the General Fund were
written off as of June 30, 2012. In May 2016 the
State Department of Finance (DOF) confirmed and approved repayment of the loan payment from the former Redevelopment Agency to the City General Fund totaling $13,775,503, payable at the statutory interest rate of 3% of the outstanding amount. In October 2016, the City received confirmation and approval of an additional repayment of the loan from the former Redevelopment Agency to the City General Fund totaling $4,579,613. These loans are recorded as a loan receivable in the City’s General Fund and is classified as nonspendable fund balance as it cannot be appropriated against until funds are received from the State. The balance of the loans as of June 30, 2022 is $12,142,785.
NOTE 15.
SUBSEQUENT EVENT
On October 11, 2022, the City entered into a lease financing agreement in the amount of $1,830,457 with Community First National Bank, to acquire two fire engines. Principal and interest are due annually starting on January 15, 2024, with annual payments of $306,115 through 2030. The lease bears an interest rate of 3.81%.
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REQUIRED SUPPLEMENTARY INFORMATION
AGENT MULTIPLE-EMPLOYER DEFINED BENEFIT PENSION PLANS AND OPEB PLANS:
SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS This schedule reports the beginning and ending balances of the total pension liability, the plan assets available for pension benefits (called plan net position), and the net pension liability, as well as the change in those amounts during the year presented by cause (similar to the note disclosure). It also reports the total pension liability, plan net positi on, net pension liability, a ratio of plan net position divided by the total pension liability, the payroll amount for current employees in the plan (covered payroll), and a ratio of the net pension liability divided by covered-employee payroll.
SCHEDULE OF CONTRIBUTIONS – PENSION PLANS
This schedule reports the agent multiple-employer’s contributions to the plan which are actuarially determined, the employer’s actual contributions, the difference between the actual and actuarially determined contributions, and a ratio of the actual contributions divided by covered payroll.
SCHEDULE OF CHANGES IN THE NET OPEB LIABILITY AND RELATED RATIOS This schedule reports the beginning and ending balances of the total OPEB liability, the plan assets available for OPEB benefits (called plan net position), and the net OPEB liability, as well as the change in those amounts during the year presented by cause (similar to the note disclosure). It also reports the total OPEB liability, plan net positi on, net OPEB liability, a ratio of plan net position divided by the total OPEB liability, the payroll amount for current employees in the plan (covered- employee payroll), and a ratio of the net OPEB liability divided by covered-employee payroll.
SCHEDULE OF CONTRIBUTIONS – OPEB PLAN
This schedule reports the agent multiple-employer’s contributions to the plan which are actuarially determined, the employer’s actual contributions, the difference between the actual and actuarially determined contributions (ADC) or contractually required contributions if the ADC has not been calculated, and a ratio of the actual contributions divided by covered-employee payroll. 87
SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS As of fiscal year ending June 30, 2022
Last 10 Years*
SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS
MISCELLANEOUS
Measurement Period 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019 2019-2020 2020-2021 Total Pension Liability
Service Cost $4,928,638 $4,355,451 $4,356,641 $4,961,492 $4,820,144 $4,846,377 $4,734,206 $4,750,071 Interest 19,456,167 20,028,375 20,453,457 21,126,222 21,405,533 22,557,657 23,372,961 24,305,480 Differences between expected and actual experience (5,096,599) (6,329,013) (1,376,656) 1,006,212 5,081,458 432,569 2,730,394 Changes in assumptions (4,888,600) 17,607,198 (9,036,830) Changes in benefits
Benefit payments, including refunds of employee
contributions (11,304,889) (12,134,586) (12,862,999) (13,610,749) (14,549,197) (15,864,061) (16,891,285) (18,715,236) Net change in total pension liability 13,079,916 2,264,041 5,618,086 28,707,507 3,645,862 16,621,431 11,648,451 13,070,709 Total pension liability - beginning 262,603,681 275,683,597 277,947,638 283,565,724 312,273,231 315,919,093 332,540,524 344,188,975 Total pension liability - ending (a) $275,683,597 $277,947,638 $283,565,724 $312,273,231 $315,919,093 $332,540,524 $344,188,975 $357,259,684 Plan fiduciary net position
Contributions - employer $3,860,928 $3,732,343 $4,446,777 $5,539,675 $6,152,860 $7,068,468 $8,214,918 $8,924,993 Contributions - employee 2,090,754 1,959,273 2,019,542 2,110,207 2,068,466 2,144,408 2,252,506 2,129,297 Net investment income 34,374,839 5,074,277 1,142,662 24,378,978 19,945,939 16,443,055 12,936,801 59,983,132 Benefit payments, including refunds of employee
contributions (11,304,889) (12,134,586) (12,862,999) (13,610,749) (14,549,197) (15,864,061) (16,891,285) (18,715,236) Other miscellaneous income (expense) (708,784) 585
Administrative Expense (255,289) (138,235) (326,924) (373,237) (179,872) (368,964) (267,582) Plan to Plan Resource Movement (493) (585) 54,276
Net change in plan fiduciary net position 29,021,632 (1,624,475) (5,392,253) 18,091,187 12,535,462 9,666,859 6,143,976 52,054,604 Plan fiduciary net position - beginning 199,423,445 228,445,077 226,820,602 221,428,349 239,519,536 252,054,998 261,721,857 267,865,833 Plan fiduciary net position - ending (b) $228,445,077 $226,820,602 $221,428,349 $239,519,536 $252,054,998 $261,721,857 $267,865,833 $319,920,437 Net pension liability - ending (a)-(b) $47,238,520 $51,127,036 $62,137,375 $72,753,695 $63,864,095 $70,818,667 $76,323,142 $37,339,247 Plan fiduciary net position as a percentage of the total pension liability 82.86% 81.61% 78.09% 76.70% 79.78% 78.70% 77.83% 89.55% Covered payroll $24,443,972 $22,658,681 $22,823,982 $23,568,915 $22,688,822 $24,144,928 $24,817,517 $24,973,064 Net pension liability as percentage of covered payroll 193.25% 225.64% 272.25% 308.68% 281.48% 293.31% 307.54% 149.52% Notes to Schedule:
* Fiscal year 2015 was the 1st year of implementation.
Source: CalPERS Accounting Valuation
Changes in assumptions.
In 2016, 2018, 2019, 2020 and 2021 there were no changes. In 2017, the accounting discount rate reduced from 7.65 percent to 7.15 percent. In 2015, amounts reported reflect an adjustment of the discount rate from
7.5 percent (net of administrative expense) to 7.65 (without a reduction for pension plan administrative expense). In 2014, amounts reported were based on the 7.5 percent discount rate. All other assumptions for the June 30, 2014 measurement date were the same as those used for the June 30, 2015 and 2016 measurement dates.
Benefit changes.
The figures above do not include any liability impact that may have resulted from plan changes which occurred after June 30. This applies for voluntary benefit changes as well as any offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes).
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SAFETY
Measurement Period 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019 2019-2020 2020-2021 Total Pension Liability
Service Cost $5,018,136 $4,776,984 $4,859,775 $5,566,167 $5,314,299 $5,562,199 $5,837,397 $5,977,808 Interest 19,532,405 20,368,130 21,118,384 21,794,377 22,455,535 23,732,977 24,739,728 25,785,538 Differences between expected and actual experience (455,068) (1,021,524) 293,934 (978,042) 7,441,738 3,245,246 3,789,911 Changes in assumptions (4,770,631) 17,425,044 (632,875) Changes in benefits
Benefit payments, including refunds of
employee contributions (12,996,278) (13,776,270) (14,939,167) (15,643,224) (17,110,200) (17,828,231) (19,366,927) (20,254,165) Net change in total pension liability 11,554,263 6,143,145 10,017,468 29,436,298 9,048,717 18,908,683 14,455,444 15,299,092 Total pension liability - beginning 264,421,131 275,975,394 282,118,539 292,136,007 321,572,305 330,621,022 349,529,705 363,985,149 Total pension liability - ending (a) $275,975,394 $282,118,539 $292,136,007 $321,572,305 $330,621,022 $349,529,705 $363,985,149 $379,284,241 Plan fiduciary net position
Contributions - employer $4,225,009 $4,630,110 $5,309,673 $6,087,507 $6,986,096 $8,259,177 $9,741,720 $10,622,105 Contributions - employee 2,632,654 1,864,455 1,917,899 1,935,079 2,062,297 2,040,072 2,186,070 2,777,982 Net investment income 33,622,839 4,997,920 1,208,758 23,497,877 18,994,354 15,591,708 12,209,629 56,328,465 Benefit payments, including refunds of employee
contributions (12,996,278) (13,776,270) (14,939,167) (15,643,224) (17,110,200) (17,828,231) (19,366,927) (20,254,165) Administrative Expense (249,064) (134,719) (316,566) (358,363) (171,174) (349,203) (251,859) Other Miscellaneous Expense (680,537) 556
Plan to Plan Resource Management 493 341 (556)
(54,276)
Net
change in plan fiduciary net position 27,484,224 (2,532,356) (6,637,556) 15,561,014 9,893,091 7,837,832 4,421,289 49,222,528 Plan fiduciary net position - beginning 196,098,570 223,582,794 221,050,438 214,412,882 229,973,896 239,866,987 247,704,819 252,126,108 Plan fiduciary net position - ending (b) $223,582,794 $221,050,438 $214,412,882 $229,973,896 $239,866,987 $247,704,819 $252,126,108 $301,348,636 Net pension liability - ending (a)-(b) $52,392,600 $61,068,101 $77,723,125 $91,598,409 $90,754,035 $101,824,886 $111,859,041 $77,935,60 5 Plan fiduciary net position as a percentage of the total pension liability 81.02% 78.35% 73.39% 71.52% 72.55% 70.87% 69.27% 79.45% Covered payroll $19,652,763 $19,567,377 $19,784,134 $19,829,558 $20,477,192 $21,410,816 $22,001,988 $23,722,063 Net pension liability as percentage of covered payroll 266.59% 312.09% 392.86% 461.93% 443.20% 475.58% 508.40% 328.54% Notes to Schedule:
* Fiscal year 2015 was the 1st year of implementation.
Source: CalPERS Accounting Valuation
Changes in assumptions.
In 2016, 2018, 2019, 2020 and 2021 there were no changes. In 2017, the accounting discount rate reduced from 7.65 percent to 7.15 percent. In 2015, amounts reported reflect an adjustment of the discount rate from
7.5 percent (net of administrative expense) to 7.65 (without a reduction for pension plan administrative expense). In 2014, amounts reported were based on the 7.5 percent discount rate. All other assumptions for the June 30, 2014 measurement date were the same as those used for the June 30, 2015 and 2016 measurement dates.
Benefit changes.
The figures above do not include any liability impact that may have resulted from plan changes which occurred June 30. This applies for voluntary benefit changes as well as any offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes).
SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS As of fiscal year ending June 30, 2022
Last 10 Years*
SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS 89
MISCELLANEOUS
Fiscal Year Ended June 30 2015 2016 2017 2018 2019 2020 2021 2022 Actuarially determined contribution $4,637,116 $6,771,305 $5,540,220 $6,146,305 $7,064,967 $8,236,678 $8,901,914 $9,382,915 Contributions in relation to the actuarially
determined contributions (4,637,116) (6,771,305) (5,540,220) (6,146,305) (7,064,967) (8,236,678) (8,901,914) (9,382,915) Contribution deficiency (excess)
Covered payroll $22,658,681 $22,823,982 $23,568,915 $22,688,822 $24,144,928 $24,817,517 $24,973,064 $27,629,117 Contributions as a percentage of covered payroll 20.47% 29.67% 23.51% 27.09% 29.26% 33.19% 35.65% 33.96% Notes to Schedule
Valuation date: 6/30/2012 6/30/2013 6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019
SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS As of fiscal year ending June 30, 2022
Last 10 Years*
SCHEDULE OF CONTRIBUTIONS
SAFETY
Fiscal Year Ended June 30 2015 2016 2017 2018 2019 2020 2021 2022 Actuarially determined contribution $4,225,009 $5,309,673 $6,090,350 $6,985,429 $8,263,084 $9,742,714 $10,620,215 $12,263,576 Contributions in relation to the actuarially
determined contributions (4,225,009) (5,309,673) (6,090,350) (6,985,429) (8,263,084) (9,742,714) (10,620,215) (12,263,576) Contribution deficiency (excess)
Covered payroll $19,567,377 $19,784,134 $19,829,558 $20,477,192 $21,410,816 $22,001,988 $23,722,063 $26,760,075 `
Contributions as a percentage of covered payroll 21.59% 26.84% 30.71% 34.11% 38.59% 44.28% 44.77% 45.83% Notes to Schedule
Valuation date: 6/30/2012 6/30/2013 6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019
SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS As of fiscal year ending June 30, 2022
Last 10 Years*
SCHEDULE OF CONTRIBUTIONS
90
Measurement Date Ended June 30 2017 2018 2019 2020 2021 Total OPEB Liability
Service Cost $1,470,697 $1,514,818 $1,560,263 $1,455,663 $1,480,458 Interest 3,449,729 3,567,790 3,690,181 3,500,744 3,541,517 Changes in benefit terms - - - - - Differences between expected and actual experience - - (4,588,272) - (1,048,749) Changes of assumptions - - (281,571) (865,013) 581,149 Benefit payments (2,980,461) (3,170,657) (3,168,930) (3,445,074) (3,482,594) Net change in total OPEB liability 1,939,965 1,911,951 (2,788,329) 646,320 1,071,781 Total OPEB liability - beginning 55,215,189 57,155,154 59,067,105 56,278,776 56,925,096 Total OPEB liability - ending (a) $57,155,154 $59,067,105 $56,278,776 $56,925,096 $57,996,877 Plan fiduciary net position
Contributions - employer $5,980,461 $4,170,657 $3,16 8,930 $5,445,074 $5,482,594 Contributions - employee - - - - - Net investment income 557,870 604,302 799,047 653,960 2,914,658 Administrative expense (4,247) (18,096) (2,447) (6,040) (5,425) Benefit payments (2,980,461) (3,170,657) (3,168,930) (3,445,074) (3,482,594) Net change in plan fiduciary net position 3,553,623 1,586,206 796,600 2,647,920 4,909,233 Plan fiduciary net position - beginning 6,230,721 9,784,344 11,370,550 12,167,150 14,815,070 Plan fiduciary net position - ending (b) $9,784,344 $11,370,550 $12,167,150 $14,815,070 $19,724,303 Net OPEB liability - ending (a)-(b) $47, 370,810 $47,696,555 $44,111,626 $42,110,026 $38,272,574 Plan fiduciary net position as a percentage of the total OPEB liability 17.12% 19.25% 21.62% 26.03% 34.01% Covered-employee payroll $50,082,473 $49,471,054 $50,975,693 $51,740,099 $54,458,885 Net OPEB liability as a percentage of covered-employee payroll 94.59% 96.41% 86.53% 81.39% 70.28% * Fiscal year 2018 was the first year of implementation.
City of Daly City, Agent Multiple-Employer Defined Benefit OPEB Plan As of fiscal year ending June 30, 2022
Last 10 Years*
SCHEDULE OF CHANGES IN THE NET OPEB LIABILITY AND RELATED RATIOS
91
Fiscal Year Ended June 30, 2022 2021 2020 2019 2018
Actuarially determined contributions $5,021,000 $4,873,000 $5,264,000 $5,109,000 Contractually required contributions (a) $4,185,306
Contributions in relation to the
contractually required or actuarially
determined contributions (4,453,620) (5,4 82,594) (5,445,074) (3,168,930) (4,185,306) Contribution deficiency (excess) $567,380 ($609,594) ($181,074) $1,940,070 $0 Covered-employee payroll $63,519,016 $54,4 58,885 $51,740,099 $50,975,693 $49,471,054 Contributions as a percentage of
covered-employee payroll 7.01% 10.07% 10.52% 6.22% 9.70% * Fiscal year 2018 was the first year of implementation. (a) The City did not obtain an actuarially determined contribution calculation in fiscal year 2018, therefore the contractually required contributions were reported.
City of Daly City, Agent Multiple-Employer Defined Benefit OPEB Plan As of fiscal year ending June 30, 2022
Last 10 Years*
SCHEDULE OF CONTRIBUTIONS
92
GENERAL FUND
The General Fund is the general operating fund of the City. It is used to account for all financial resources traditionally associated with governments which are not required to be accounted for in a separate fund. It comprises of the following activities: General, Special Deposits, and Traffic Enforcement.
93
CITY OF DALY CITY
GENERAL FUND
COMBINING FUND BALANCE SHEET
JUNE 30, 2022
Special Traffic Total
General Deposits Enforcement General Fun d
ASSETS
Cash and investments $60,458,485 $13,045,664 $664,767 $74,168,916 Restricted cash and investments 4,332,892 4,332,892
Accounts receivable, net 10,500,745 65,680 7,632 10,574,057 Due from other funds 22,786 22,786
Prepaids 360,359 360,359
Inventories 18,150 18,150
Loan receivable 200,000 200,000
Loan receivable from Successor Agency 12,142,785 12,142,785 Leases receivable 9,055,050 9,055,050
Total Assets $97,091,252 $13,111,344 $672,399 $110,874,995
LIABILITIES
Accounts payable $2,669,900 $4,399,298 $7,069,198
Accrued payroll 884,727 884,727
Deposits payable 8,276,191 8,276,191
Unearned revenue 15,675,088 15,675,088
Total Liabilities 19,229,715 12,675,489 31,905,204
DEFERRED INFLOWS OF RESOURCES
Related to leases 8,924,675 8,924,675
FUND BALANCES
Fund Balance
Nonspendable 12,728,449 12,728,449
Restricte
d 5,332,892 5,332,892
Assigned 1,055,425 1,055,425
Unassigned 49,820,096 435,855 $672,399 50,928,350
Total Fund Balances 68,936,862 435,855 672,399 70,045,116 Total Liabilities, and Fund Balances $97,091,252 $13,111,344 $672,399 $110,874,995 94
CITY OF DALY CITY
GENERAL FUND
COMBINING FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE FOR THE YEAR ENDED JUNE 30, 2022
Total
Special Traffic General
General Deposits Enforcements Funds
REVENUES
Property tax $45,611,135 $45,611,135
Sales tax 24,157,170 24,157,170
Utility users tax 6,008,575 6,008,575
Franchise fees 4,909,174 4,909,174
Other taxes 7,587,013 7,587,013
Licenses and permits 3,015,932 3,015,932
Fines and forfeitures 2,263,332 $65,806 2,329,138
Rents and interest (1,525,051) (1,525,051)
Federal programs and grants 8,539,854 8,539,854
Receipts from other agencies 1,262,931 1,262,931
Charges and fees 6,646,169 $11,200 6,657,369
Miscellaneous 4,184,906 1,327 4,186,233
Total Revenues 112,661,140 12,527 65,806 112,739,473
EXPENDITURES
Current:
General government 13,432,444 13,432,444
Public safety 68,607,651 68,607,651
Public works 6,014,764 6,014,764
Culture and recreation 13,126,681 120 13,126,801
Economic and community development 5,379,260 5,379,260
Debt service:
Principal 68,851 68,851
Interest 3,310 3,310
Total Expenditures 106,632,961 120 106,633,081
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 6,028,179 12,407 65,806 6,106,392
OTHER FINANCING SOURCES (USES)
Proceeds from sale of property
Transfers in 3,945,778 171 3,945,949
Transfers (out) (2,917,358) (2,917,358)
Total Other Financing Sources (Uses) 1,028,420 171 1,028,591 NET CHANGES IN FUND BALANCES 7,056,599 12,578 65,806 7,134,983 BEGINNING FUND BALANCES 61,880,263 423,277 606,593 62,910,133 ENDING FUND BALANCES $68,936,862 $435,855 $672,399 $70,045,116 95
MAJOR GOVERNMENTAL FUNDS, OTHER THAN
GENERAL FUND AND SPECIAL REVENUE FUNDS
The Capital Projects Fund is used to account for financial resources to be used for the acquisition, construction or rehabilitation of major capital assets other than those financed by Proprietary Funds.
97
CITY OF DALY CITY
CAPITAL PROJECTS FUND
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2022
Variance
Positive
Budget Actual (Negative)
REVENUES
Rents and interest ($791,722) ($791,722)
Federal programs and grants $7,003,500 331,282 (6,672,218) Receipts from other agencies 6,271,750 123,137 (6,148,613) Charges and fees 2,109,190 1,988,967 (120,223)
Miscellaneous 500,000 187,427 (312,573)
Total Revenues 15,884,440 1,839,091 (14,045,349)
EXPENDITURES
Capital projects 26,319,213 3,697,359 22,621,854
Total Expenditures 26,319,213 3,697,359 22,621,854
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES (10,434,773) (1,858,268) 8,576,505
OTHER FINANCING SOURCES (USES)
Transfers in 2,028,926 996,655 (1,032,271)
Transfers (out) (4,141,529) (468,219) 3,673,310
Total Other Financing Sources (Uses) (2,112,603) 528,436 2,641,039 NET CHANGE IN FUND BALANCES ($12,547,376) (1,329,832) $11,217,544 BEGINNING FUND BALANCE 28,428,141
ENDING FUND BALANCE $27,098,309
98
NONMAJOR GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS
Special Revenue Funds are used to account for th e proceeds of specific revenue sources (other than special assessments, expendable trusts, or major capital projects) that are legally restricted to expenditures for specified purposes or for which separate accounting is required by administrative action.
The City's Special Revenue Funds are as follows:
Low and Moderate Income Housing Assets – to account for the activities of the Housing Successor Agency to the Daly City Redevelopment Agency. Community Block Grant - to account for monies received by the City as a participant in the federal Community Development Block Grant (CDBG) program. Linda Vista Benefit Assessment - to account for the charges and for the costs of maintenance of storm drains in the Linda Vista Subdivision.
Traffic Safety – to account for grant funds and vehicle impound fees authorized by State law specifically to provide traffic safety programs.
Affordable Housing – to account for the activities of the D aly City Housing Development
Finance Agency.
99
CITY OF DALY CITY
NONMAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET
JUNE 30, 2022
SPECIAL REVENUE FUNDS
Total
Low and Moderate Communit y Linda Vista Nonmajor
Income Housing Block Benefit Traffic Affordable Governmental Assets Grant Assessment Safet y Housing Funds
ASSETS
Cash and investments $5,107,439 $555,562 $96,635 $694,721 $6,454,357 Accounts receivable, net $285,446 607 286,053
Notes receivable 997,597 997,597
Property held for development 3,366,888 3,366,888
Total Assets $5,107,439 $1,283, 043 $555,562 $97,242 $4,061,609 $11,104,895
LIABILITIES
Accounts payable $259,378 $259,378
Accrued payroll $1,682 3,281 4,963
Due to other funds 22,786 22,786
Deposits payable 4,001 4,001
Total Liabilities 5,683 285,445 291,128
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - loans 997,597 997,597
FUND BALANCES
Restricte
d 5,101,756 1 $555,562 $97,242 $4,061,609 9,816,170
Total Fund Balances 5,101,756 1 555,562 97,242 4,061,609 9,816,170 Total Liabilities, Deferred Inflows of
Resources and Fund Balances $5,107,439 $1,283,043 $555,562 $97,242 $4,061,609 $11,104,895 100
CITY OF DALY CITY
NONMAJOR GOVERNMENTAL FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED JUNE 30, 2022
SPECIAL REVENUE FUNDS
Total
Low and Moderate Community Linda Vista Nonmajor
Income Housing Bloc k Benefit Traffic Affordable Governmental Assets
Grant Assessment Safety Housing Funds
REVENUES
Sales tax
Rents and interest $39,804 ($15,237) $921 $25,488
Federal programs and grants $1,330,183 3,936 1,334,119
Charges and fees 44,379 $14,979 59,358
Miscellaneous 128,563 312,604 1,962 443,129
Total Revenues 168,367 1,642,787 29,142 14,979 6,819 1,862,094
EXPENDITURES
Public safety 8,825 8,825
Public works 19,295 19,295
Economic and community development 44,517 1,237,848 173,647 1,456,012 Debt service:
Principal 390,000 390,000
Interest 14,824 14,824
Total Expenditures 44,517 1,642,672 19,295 8,825 173,647 1,888,956
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 123,850 115 9,847 6,154 (166,828) (26,862)
OTHER FINANCING SOURCES (USES)
Transfers in 12,272 4,228,437 4,240,709
Transfers out (3,990,884) (3,990,884)
Total Other Financing Sources (Uses) (3,990,884) 12,272 4,228,437 249,825 NET CHANGE IN FUND BALANCES (3,867,034) 115 9,847 18,426 4,061,609 222,963 BEGINNING FUND BALANCES 8,968,790 (114) 545,715 78,816 9,593,207 ENDING FUND BALANCES $5,101,756 $1 $555,562 $97,242 $4,061,609 $9,816,170 101
CITY OF DALY CITY
BUDGETED NONMAJOR GOVERNMENTAL FUNDS
COMBINING SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2022
COMMUNITY BLOCK GRANT
Variance Variance
Positive Positive
Budget Actual (Negative) Budget Actual (Negative)
REVENUES
Sales tax
Rents and interest $70,000 $39,804 ($30,196)
Federal programs and grants $2,274,209 $1,330,183 ($944,026) Receipts from other agencies 505,828 (505,828)
Charges and fees
Miscellaneous 5,350 128,563 123,213 294,085 312,604 18,519 Total Revenues 75,350 168,367 93,017 3,074,122 1,642,787 (1,431,335)
EXPENDITURES
Public Safety
Services and supplies
Capital outlay
Other charges
Total Public Safety
Public Works
Services and supplies
Capital outlay
Other charges
Total Public Works
Economic and Community Development
Salaries and benefits 431,627 413,138 18,489
Services and supplies 74,500 44,517 29,983 943,451 575,611 367,840 Other charges 4,200,000 4,200,000 894,219 202,589 691,630 Capital outlay 400,000 46,510 353,490
Debt Service:
Principal 390,000 390,000
Interest 14,824 14,824
Total Economic and Community Development 4,274,500 44,517 4,229,983 3,074,121 1,642,672 1,431,449 Total Expenditures 4,274,500 44,517 4,229,983 3,074,121 1,642,672 1,431,449
EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES (4,199,150) 123,850 4,323,000 1 115 114
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out (450,362) (3,990,884) (3,540,522)
Total Other Financing Sources (Uses) (450,362) (3,990,884) (3,540,522) NET CHANGE IN FUND BALANCES ($4,649,512) (3,867,034) $782,478 $1 115 $114 BEGINNING FUND BALANCES 8,968,790 (114)
ENDING FUND BALANCES $5,101,756 $1
INCOME HOUSING ASSETS
LOW AND MODERATE
102
LINDA VISTA
BENEFIT ASSESSMENT TRAFFIC SAFETY
Variance Variance Variance
Positive Positive Positive
Budget Actual (Negative) Budget Actual (Negative) Budget Actual (Negative) $5,264 ($15,237) ($20,501) $5,000 $921 (4,079)
3,936 3,936
44,381 44,379 (2) $40,182 $14,979 ($25,203)
16,000 1,962 (14,038)
49,645 29,142 (20,503) 40,182 14,979 (25,203) 21,000 6,819 (14,181) 45,007 3,537 41,470
1,256 1,256
7,300 5,288 2,012
53,563 8,825 44,738
16,942 16,652 290
4,000 2,084 1,916
500 559 (59)
21,442 19,295 2,147
113,365 150,093 (36,728)
245,873 23,554 222,319
359,238 173,647 185,591
21,442 19,295 2,147 53,563 8,825 44,738 359,238 173,647 185,591 28,203 9,847 (18,356) (13,381) 6,154 19,535 (338,238) (166,828) 171,410 12,272 12,272 687,915 4,228,437 3,540,522
12,272 12,272 687,915 4,228,437 3,540,522
$28,203 9,847 ($18,356) ($1,109) 18,426 $19,535 $349,677 4,061,609 $3,711,932 545,715 78,816
$555,562 $97,242 $4,061,609
AFFORDABLE HOUSING
103
INTERNAL SERVICE FUNDS
Internal Service Funds are used to finance and account for special activities and services performed by a designated department for other departments in the City on a cost reimbursement basis.
The concept of major funds does not extend to internal service funds because they do not do business with outside parties. For the Statement of Activities, the net revenues or expenses of each internal service fund are eliminated by netting them against the operations of the other City departments which generated them. The remaining balance sheet items are consolidated with these same funds in the Statement of Net Position. However, internal service funds are still presented separately in the Fund financial statements.
The City's Internal Service Funds are:
Motor Vehicles - to account for the purchase and maintenance of all motor vehicles provided as a service to City departments.
Central Services - to account for and allocate costs related to providing mail messenger services for City departments.
PBX - to account for services provided for the operation and maintenance of the City's telephone system.
Building Maintenance - to account for services provided for the maintenance of City facilities. Information Services - to account for the distribution of computer hardware, software and operating costs to various City departments.
Self-Insurance - to account for the costs of workers compensation, automotive, and general liability claims against the City.
PERS Contributions - to account for the long-term debt, prepaid PERS contributions and repayments from benefiting City funds and departments resulting from the City’s PERS Obligation Bond issue.
105
CITY OF DALY CITY
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF NET POSITION
JUNE 30, 2022
Motor Central Building
Vehicles
Services PBX Maintenance
ASSETS
Current Assets:
Cash and investments $7,141,037 $319,990 $349,311 $3,075,579 Cash with fiscal agent
Accounts receivable, net 23,434 70
Inventories 129,115 64,526
Total Current Assets 7,293,586 319,990 349,311 3,140,175 Capital Assets:
Land
Buildings 35,817
Equipment 19,366,109 9,370 1,025,840 132,467
Furniture and fixtures 16,490
Construction in progress
Total Capital Assets 19,401,926 9,370 1,025,840 148,957 Less Accumulated Depreciation (12,393,223) (9,370) (934,999) (82,864) Net Capital Assets 7,008,703 90,841 66,093
Total Assets 14,302,289 319,990 440,152 3,206,268
DEFERRED OUTFLOWS OF RESOURCES
Related to OPEB 86,297 25,382 192,900
LIABILITIES
Current Liabilities:
Accounts payable 224,965 5,713 5,356 161,786
Accrued payroll 8,129 2,219 36,077
Interest payable 18,271
Accrued claims payable
Lease payable 200,710
PERS obligation bonds
Total Current Liabilities 452,075 7,932 5,356 197,863
Long-Term Liabilities:
Compensated absences 182,468 428,962
Accrued claims payable
Net OPEB Liabilit
y 670,066 197,078 1,497,794
Lease payable 1,086,856
PERS obligation bonds
Total Long-Term Liabilities 1,939,390 197,078 1,926,756 Total Liabilities 2,391,465 205,010 5,356 2,124,619
DEFERRED INFLOWS OF RESOURCES
Related to OPEB 89,705 26,384 200,516
NET POSITION
Net investment in capital assets 5,721,137 90,841 66,093 Restricted for debt service
Unrestricte
d 6,186,279 113,978 343,955 1,007,940
Total Net Position (Deficit) $11,907,416 $113,978 $434,796 $1,074,033 106
Information Self-
PERS
Services Insurance Contributions Total
$5,058,627 $17,089,355 $9,963,682 $42,997,581
1,447 1,447
24,922 48,426
193,641
5,058,627 17,114,277 9,965,129 43,241,095
378,343 378,343
35,817
4,878,546 25,412,332
46,614 63,104
179,803 179,803
5,104,963 378,343 26,069,399
(3,897,927) (17,318,383)
1,207,036 378,343 8,751,016
6,265,663 17,492,620 9,965,129 51,992,111
55,849 5,076 365,504
231,446 14,656 251,067 894,989
14,310 4,311 65,046
40,535 58,806
2,544,159 2,544,159
200,710
3,925,000 3,925,000
245,756 2,563,126 4,216,602 7,688,710
166,456 49,350 827,236
7,942,841 7,942,841
433,572 39,416 2,837,926
1,086,856
4,325,000 4,325,000
600,028 8,031,607 4,325,000 17,019,859
845,784 10,594,733 8,541,602 24,708,569
58,044 5,277 379,926
1,207,036 378,343 7,463,450
1,447 1,447
4,210,648 6,519,343 1,422,080 19,804,223
$5,417,684 $6,897,686 $1,423,527 $27,269,120
107
CITY OF DALY CITY
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN FUND NET POSITION
FOR THE YEAR ENDED JUNE 30, 2022
Motor Central Building
Vehicles Services PBX Maintenance
OPERATING REVENUES
Charges to City departments $4,592,957 $253,498 $278,515 $5,281,673 Other revenues 268,754 761 5,989
Total Operating Revenues 4,861,711 253,498 279,276 5,287,662
OPERATING EXPENSES
Salaries and benefits 1,199,552 101,664 3,412,746
Services and supplies 1,624,918 112,959 56,775 1,197,130 Utilities 15,782 167 161,821 282,470
Insurance 565,706 214 6,803
Claims and settlements
Depreciation 994,156 2,595 7,073
Other charges 10,034 3,852 6,310
Total Operating Expenses 4,410,148 218,856 221,191 4,912,532 Operating Income (Loss) 451,563 34,642 58,085 375,130
NONOPERATING REVENUES (EXPENSES)
Intergovernmental 34,185 4,345 146,588
Interest income (203,193) (8,535) (9,262) (83,524)
Gain on sale of capital assets 34,303
Interest expense (36,752)
Total Nonoperating Revenues (Expenses) (171,457) (4,190) (9,262) 63,064 Income (Loss) Before Transfers 280,106 30,452 48,823 438,194 Transfers in 438,161 43,367
Transfers out (612,666) (11,532) (13,163) (136,628)
Net Transfers (174,505) 31,835 (13,163) (136,628)
Change in Net Position 105,601 62,287 35,660 301,566
BEGINNING NET POSITION (DEFICITS) 11,801,815 51,691 399,136 772,467 ENDING NET POSITION (DEFICITS) $11,907,416 $113,978 $434,796 $1,074,033 108
Information Self- PERS
Services Insurance Contributions Total
$3,245,885 $7,467,479 $4,758,139 $25,878,146
81,187 356,691
3,245,885 7,548,666 4,758,139 26,234,837
1,668,222 510,284 6,892,468
892,909 336,841 2,500 4,224,032
47,441 736 508,417
270 2,325,653 2,898,646
3,587,995 3,587,995
187,332 1,191,156
626,803 5,767 652,766
3,422,977 6,767,276 2,500 19,955,480
(177,092) 781,390 4,755,639 6,279,357
51,598 9,900 246,616
(145,503) (439,906) 897 (889,026)
34,303
(678,826) (715,578)
(93,905) (430,006) (677,929) (1,323,685)
(270,997) 351,384 4,077,710 4,955,672
70,077 551,605
(227,235) (227,677) (1,228,901)
(157,158) (227,677) (677,296)
(428,155) 123,707 4,077,710 4,278,376
5,845,839 6,773,979 (2,654,183) 22,990,744
$5,417,684 $6,897,686 $1,423,527 $27,269,120
109
CITY OF DALY CITY
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2022
Motor Central Building
Vehicles
Services PBX Maintenance
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers $4,868,216 $253,498 $279,276 $5,287,592 Payments to suppliers (611,515) (115,775) (213,240) (1,406,874) Payments to employees (1,196,514) (116,202) (3,439,797) Claims pai
d
Cash Flows from (used for) Operating Activities 3,060,187 21,521 66,036 440,921
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Principal paid on noncapital debt
Interest paid on noncapital debt
Intergovernmental 34,185 4,345 146,588
Interfund receipts 438,161 43,367
Interfund payments (612,666) (11,532) (13,163) (136,628) Cash Flows from (used for) Noncapital
Financing Activities (140,320) 36,180 (13,163) 9,960
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Acquisition of capital assets (2,277,250) (93,436)
Proceeds from sale of capital assets 34,303
Principal paid on capital debt (195,490)
Interest paid on capital debt (39,599)
Cash Flows from (used for) Capital and Related
Financing Activities (2,478,036) (93,436)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest income (expense) (203,193) (8,535) (9,262) (83,524) Net Cash Flows 238,638 49,166 (49,825) 367,357
Cash and investments at beginning of period 6,902,399 270,824 399,136 2,708,222 Cash and investments at end of period $7,141,037 $319,990 $349,311 $3,075,579 Reconciliation of operating income (loss) to net cash flows from operating activities:
Operating income (loss) $451,563 $34,642 $58,085 $375,130 Adjustments to reconcile operating income (loss) to net cash flows from operating activities:
Depreciation 994,156 2,595 7,073
Change in assets and liabilities:
Receivables, net 6,505 (70)
Inventories (26,588) (6,017)
Prepaids 1,483,056
Accounts payable 148,457 1,417 5,356 91,856
Accrued claims payable
Accrued payroll 1,056 1,020 14,977
Compensated absences 12,153 33,491
OPEB related items (10,171) (15,558) (75,519)
Cash Flows from (used for) Operating Activities $3,060,187 $21,521 $66,036 $440,921 110