CITY OF FORTUNA
FORTUNA, CALIFORNIA
BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
INTRODUCTORY SECTION
TABLE OF CONTENTS
PAGE
INTRODUCTORY SECTION
Table of Contents i
Letter of Transmittal ii - iv
List of Principal Officials
Organization Chart vi
FINANCIAL SECTION
Independent Auditors' Report 1-2
Management's Discussion and Analysis 3-11
Basic Financial Statements:
Government-wide Financial Statements:
Statement of Net Position 12
Statement of Activities 13
Fund Financial Statements:
Governmental Funds - Balance Sheet 14
Governmental Funds - Statement of Revenues,
Expenditures, and Changes in Fund Balances 15
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds
to the Statement of Activities 16
Proprietary Funds - Statement of Net Position 17
Proprietary Funds - Statement of Revenues,
Expenses, and Changes in Fund Net Position 18
Proprietary Funds - Statement of Cash Flows 19
Statement of Fiduciary Net Position 20
Statement of Changes in Net Position - Private Purpose Trust Fund 21 Notes to Basic Financial Statements 22-44
i-1
TABLE OF CONTENTS (continued)
PAGE
REQUIRED SUPPLEMENTAL INFORMATION SECTION:
Statement of Revenues, Expenditures, and Changes in
Fund Balances - Budget and Actual - General Fund
Statement of Revenues, Expenditures, and Changes in
Fund Balances - Budget and Actual - City Housing Fund
Schedule of the Local Government's Proportionate Share
of the Net Pension Liability - All Plans
Schedule of Contributions - All Plans 48
SUPPLEMENTAL SECTION
Combining Statements and Individual Fund Schedules - Nonmajor Funds:
Combining Balance Sheet - Nonmajor Governmental Funds 49-50 Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds 51-52
Schedules of Revenues, Expenditures and Changes in Fund Balances Budget and Actual (Budgetary Basis) Nonmajor Governmental Funds 53-63
STATISTICAL SECTION SCHEDULE PAGE
Financial Trends Information:
Net Position by Component - Last Ten Fiscal Years 1 64
Changes in Net Position - Last Ten Fiscal Years 2 65-66 Fund Balances Governmental Funds - Last Ten Fiscal Years 3 67 Changes in Fund Balances - Governmental Funds - Last Ten Fiscal Years 4 68 Revenue Capacity Information:
Assessed Value and Estimated Actual Value of Taxable Property - Last Ten Fiscal Years 5 69
Direct and Overlapping Property Tax Rates - Last Ten Fiscal Years 6 70 Principal Property Tax Payers - Current Year and Previous Nine Years 7 71 Property Tax Levies and Collections - Last Ten Fiscal Years 8 72 i-2
TABLE OF CONTENTS (concluded)
STATISTICAL SECTION (concluded) SCHEDULE PAGE
Sales Tax Revenue Base Data - Last Ten Fiscal Years 8A 73 Principal Sales Tax Payers - In Alphabetical Order-
Current and Previous Nine Years Ago 8B 74
Transient Occupancy Tax Revenue Base Data - Last Ten Fiscal Years 8C 75 Principal Transient Occupancy Tax Payers - In Alphabetical Order- Last Ten Fiscal Years 8D 76
Water and Sewer Rates - Last Ten Fiscal Years 8E 77
Water and Wastewater Revenue Concentration Data - Last Ten Fiscal Years 8F 78 Debt Capacity Information:
Ratio of Outstanding Debt by Type - Last Ten Fiscal Years 9 79 Ratio of General Bonded Debt Outstanding - Last Ten Fiscal Years 10 80 Direct and Overlapping Governmental Activities Debt - Current Year 11 81 Legal Debt Margin Information - Last Ten Fiscal Years 12 82 Pledged Revenue Coverage - Last Ten Fiscal Years 13 83
Demographic and Economic Information:
Demographic and Economic Statistics - Last Ten Fiscal Years 14 84 Principal Employers - Last Ten Fiscal Years 15 85
Operating Information:
Full Time Equivalent City Employees - Last Ten Fiscal Years 16 86 Operating Indicators - Last Ten Fiscal Years 17 87
Capital Asset Statistics - Last Ten Fiscal Years 18 88
OTHER REPORTS
Report on Compliance over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with the Statutes, Rules, and Regulations of the California Transportation Development Act and the Allocation Instructions and Resolutions of the Local Transportation Commission. 89
i -3
City of Fortuna P.O. Box 545 • Fortuna, CA 95540
www.friendlyfortuna.com
April 4, 2022
Citizens of the City of Fortuna
Honorable Mayor and
Members of the City Council
We are pleased to submit the City of Fortuna's Comprehensive Annual Financial Report for the fiscal year ended June 30, 2021. The city follows a policy of hiring a licensed certified public accountant to conduct an annual audit and to prepare a complete set of financial statements in conformity with generally accepted accounting principles (GAAP). This annual report is published to fulfill that policy for the fiscal year ended June 30, 2021.
Management of the City of Fortuna assumes full responsibility for the completeness and reliability of the information contained in this report, based upon a comprehensive frame-work of internal control that the city has established for this purpose. Because the cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the city's financial statements are free of material misstatements.
The firm of R.J. Ricciardi, Inc. Certified Public Accountants, has issued an unqualified independent auditor's report on the City of Fortuna's financial statements for the fiscal year ended June 30, 2021. The independent auditor's report is located at the front of the financial section of this report.
Management's Discussion and Analysis ("MD&A") immediately follows the independent auditor's report and provides a narrative introduction, overview, and analysis of the basic financial statements. The MD&A complements this letter of transmittal and should be read in conjunction with it.
PROFILE OF THE CITY AND ITS OPERATIONS
The City of Fortuna is located on the North Coast of California seven (7) miles inland from the Pacific Ocean to the west and 253 miles north of San Francisco on U.S. Route 101. Fortuna is surrounded by national, state and county redwood parks and is the gateway to the redwood forests of Northern California. The City has a large number of events and festivals including Art & Wine in the Park, the Annual Fortuna Rodeo, Redwood AutoXpo, Apple Harvest, Hops in Humboldt Festival, and the Fortuna Concert Series. There are many holiday events for both young and old including concerts and parades.
The City of Fortuna was incorporated in 1906 and is home to approximately 12,000 individuals. The city's boundaries encompass 4.8 square miles with a population that has been growing by an average rate of one-percent (1%) annually over the last decade.
Education, health care, and government services are the largest employment categories followed by retail trade and construction. Timber harvesting and production is no longer the driving economic factor on the North Coast. Agriculture, health care, education, and government jobs have filled the void left by the timber industry with a mix of retail sales and hospitality services increasingly supporting our local economic growth.
The city operates under a council-manager form of government. Policy making and legislative authority are vested in the City Council consisting of the Mayor and four other elected Council members. The Council is responsible, among other matters, for passing ordinances, adopting the city budget, appointing committees, and hiring the City Manager. The City Manager is responsible for carrying out the policies and ordinances of the City Council, for overseeing the daily operations of the city, and for appointing other employees. The Council is elected to four year staggered terms, with 2-3 members elected every two years. The Mayor is selected by and serves at the pleasure of the City Council for a two-year term.
City Hall Police Department Parks and Recreation Public Works (707) 725-7600 (707) 725-7550 (707) 725-7620 (707) 725-7650 Fax (707) 725-7610 Fax (707) 725-7574 Fax (707) 725-7576 Fax (707) 725-7651 621 11th Street 621 11th Street 5 Park Street 180 Dinsmore Drive - її -
City of Fortuna P.O. Box 545 • Fortuna, CA 95540
www.friendlyfortuna.com
April 4, 2022
The city provides a full range of municipal services including police protection; construction and maintenance of city streets; storm drains, and similar infrastructure; park maintenance; communit recreation activities; water and wastewater utilities; and a transit system for seniors and disabled citizens who reside within city limits.
The annual budget serves as the foundation for the City of Fortuna's financial planning and control system.
The budget process is the vehicle through which the city establishes goals and objectives, and prioritizes the desired programs or services that the city provides and which can be financed by the city's anticipated revenue for the budget period. The annual budget is categorized by fund, function (e.g., supplies, services), and department (e.g., police, parks recreation). The budget is the means through which policy decisions are made, effected, controlled and monitored. The City Manager is responsible for submitting and recommending an operating budget and a capital improvements budget for City Council consideration and adoption. Throughout the year, the budget serves as a financial management tool and an operational plan for the delivery of city services and capital projects.
In addition to the budget planning process the city maintains budgetary controls. The city's objective in appropriated budget approved by the City Council. The City Manager is authorized to transfer budgeted amounts within funds as deemed necessary in order to meet the city's needs subject to policy defined in the city's administrative regulations. The City Council may amend the budget by resolution during the fiscal year.
The city maintains an encumbrance accounting system as one technique of accomplishing budgetary control. Purchase orders, contracts, and other commitments for expenditure of money are secured in order to reserve that portion of the applicable appropriation. Total expenditures of each fund may not exceed fund appropriations and total expenditures for each department may not exceed departmental appropriations.
Unencumbered amounts lapse at year-end and may be appropriated as part of the following year's budget.
Financial statements contained in the Annual Comprehensive Financial Report ("AFR") include budget to actual comparisons that are required supplementary information. Comparisons are presented for the general fund and other major governmental funds for which an appropriated annual budget has been adopted. Budget to actual comparisons are also presented for the city's non-major funds in the supplemental information section of this report.
LOCAL ECONOMY
The city's general fund sales tax revenue recognized growth this fiscal period. City-wide retail sales subject to tax grew to $245.5 million over the year; greater than the previously highest recorded sales tax year - 2019/2020. This is good news for the local economy as the aforementioned growth indicates a full recovery from the economic downtown that reached bottom in 2009.
The unemployment rate for 2021 increased to 7.9% - the highest unemployment rate seen in the last 10 years was in 2012 when the unemployment rate was 10.0%. Property values remain stable with a sligh increase as compared to the previous fiscal period. Looking forward, the city's 2021-22 budget reflects continued conservative approach. The city anticipates ongoing economic recovery and will carefully monitor revenue to match and prioritize city services within available revenues.
City Hall Police Department Parks and Recreation Public Works (707) 725-7600 (707) 725-7550 (707) 725-7620 (707) 725-7650 Fax (707) 725-7610 Fax (707) 725-7574 Fax (707) 725-7576 Fax (707) 725-7651 621 11th Street 621 11th Street 5 Park Street 180 Dinsmore Drive - ili-
City of Fortuna P.O. Box 545 • Fortuna, CA 95540
www.friendlyfortuna.com
April 4, 2022
MAJOR INITIATIVES
Capital Projects
The City of Fortuna is committed to investing in the city's future by improving and repairing essential water and sewer infrastructure projects, disability access improvements and more. Prior to fiscal year 2021 the city leveraged state grants, former Redevelopment Agency bond loan proceeds, and storm drainage funds to complete the nearly $6.5 million of improvements to the Rohner Creek Flood Control and Riparian Habitat Improvement Project. The project was successfully completed in fiscal year 2018. Upon the completion of that project the City was able to move forward with the almost $2.5 million Hillside Creek Flood Control Project which was completed in 2020. This project was 75% funded by a FEMA grant. Upon completion of these projects, in fiscal year 2021, the City submitted an updated Flood Mapping to FEMA and was successful in removing hundreds of homes out of the flood plain.
Redevelopment Dissolution
Pursuant to ABx 1 26 ("AB 26"), the Redevelopment Agency of the City of Fortuna ("Agency") was dissolved on February 1, 2012. The former Agency is now administered by the Successor Agency to the Former Redevelopment Agency of the City of Fortuna. The Successor Agency continues to wind down the affairs of the former Redevelopment Agency. The City of Fortuna Oversight Board was dissolved and replaced by a Countywide Oversight Board pursuant to Health and Safety Code Section 34179 (i). The new Countywide Oversight Board continues to meet regularly to review and approve the annual Recognized Obligation Payments Schedule (ROPs) request submitted to the California Department of Finance, as well
ACKNOWLEGEMENTS
The preparation of this report could not be accomplished without the efficient and dedicated service of the entire staff of the finance department, the auditing services of R.J. Ricciardi, Inc. CPA, and the cooperation of the various city departments. I would also like to acknowledge and thank the City Council and the City Manager for their continued support and leadership in responsibly managing the City of Fortuna's financial operations.
Respectfully submitted,
Peen
Aaron Felmlee, Finance Director
City Hall Police Department Parks and Recreation Public Works (707) 725-7600 (707) 725-7550 (707) 725-7620 (707) 725-7650 Fax (707) 725-7610 Fax (707) 725-7574 Fax (707) 725-7576 Fax (707) 725-7651 621 11th Street 621 11th Street 5 Park Street 180 Dinsmore Drive - iV -
CITY OF FORTUNA, CALIFORNIA
List of Principal Officials
June 30, 2021
City Council
Mayor Sue Long
Mayor Pro Tem Tami Trent
Council Member Mike Johnson
Council Member Mike Losey
Council Member Jeremy Stanfield
Appointed Officials
City Manager Merritt Perry
Finance Director Aaron Felmlee
Police Chief Casey Day
Public Works Director Brendan Byrd
Parks and Recreation Director Cameron Mull
City Clerk Siana Emmons
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City of Fortuna
Organizational Chart
Mayor & City Coundl
Clty Manager City Attorney
Paric & Rec Directo iv Clark / Huma Communty Developmen nurnot. Sapare niaisr
(Funded by Heasure E Cay Enginee?
(Department Head) anal men R i
(Department Head) RAS reTAN Hard
(Department Head) arIC O FTE (Ciy Hanae
Recreation Progrem Deputy City Engineer Senior Admin Assistant / Payroll / Beneft caury birector
aMnenam FIE (Rotucel to 0.: (Division Head) Seputy Cay Chri ammunity Develoome (Di( Eesd) •E eTAN 1 (Division Head)
R ordinator (gr) senbr Ac erent cherik Senior Administrative Coordsa FTE Assistant (CDD)
1 FTE
RAtarne Cerl Sergeant assigned to
Danrelfa de
Sergean (S orn) uper s FEs aten Recreation Workers
hamin bcektant
Acmunt Clarkel
elfective 8-3-20) 1 FTE
Police Officer (Swor) Dispatches
5 FTE
Kennel Altendant Museum Orter (PT) Acount Cerk I1
.SOTTE Laborato ry Directot Bullin Frepector
Dispatcher (FT
50 FT Senior Administratsee
Code Complance
Omcer (PT) (Funded
by r (casure E)
.50 FTE
Con menge Centt
Coordiner i1
Fieli CSO (Funded by Unteles Superhtendent General Servkes Superin Wd cha pant anar
Measure E) Olvision Head (Disis Head) tendent (Diwikion Head) Conference Center
FTE
Work7 FT(PT)
Bell CSO (PT)
Phr, Uarhank
.73 FTE Vehicle & Equipmen
Roc/ Transt: Admin Lesd Parks Lead Stroct Hahtcnand
Supervisor Maintenance Warker
ulAra
1 FTE
STe Superior Utilty Malntenance
FTE (L FTE FROZEN Worker TI1
Transit Dispatcher / parke Maledenarer Cry Carpenter Il1 Sta HantARAnGA
ONTC SI FEt (PT Worker III
1 FTE WD FEE"
WWTP Operator I:
Bus Drher It Parks Maintenance Siret Mainterance Warker 11" (1 FTÊ FROZEN)
Wiwe sasc
WWTP Operator 1/
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Parks Maintenarce
BUs Doe ' 146 (e"
(,64 FTE FROZEN)
-VI-
FINANCIAL SECTION
R. J. RICCIARDI, INC.
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITORS' REPORT
To the Honorable Members
of the City Council
City of Fortuna
Fortuna, California
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business-type activities, each najor fund, and the aggregate remaining fund information of City of Fortuna, as of and for the year ended June 30 021, and the related notes to the financial statements, which collectively comprise City of Fortuna's basic financia statements as listed in the table of contents.
Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial States of America.
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1101 FIFTH AVENUE, SUITE 360 SAN RAFAEL, CA 94901 TEL (415) 457-1215 FAX (415) 457-6735 www.rjrcpa.com Board of Directors
City of Fortuna - Page 2
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis, which follows this report letter, and the requited supplementary information listed in the table of contents be a pot ecs and tic eated sen iear a formation barted pa to be brenna statements, is requited by the Governmental Accounting Standards Board who considers it to be an essential part of the financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context.
We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise City of Fortuna's basic financial statements. The accompanying nonmajor fund combining financial statements, budget and actual schedules, schedules of capital assets, introductory and statistical sections are presented for purposes of additional analysis and are not a required part of the basic financial statements.
The nonmajor fund combining financial statements, budget and actual schedules, and schedules of capital assets are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and teconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the nonmajor fund combining financial statements, budget to actual schedules, and schedules of capital assets are fairly stated, in all material respects, in relation to the basic financial statements as a whole.
The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on them.
R.D. Ricciardi, Inc.
R.J. Ricciardi, Inc.
Certified Public Accountants
San Rafael, California
April 16, 2022
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MANAGEMENT'S DISCUSSION AND ANALYSIS
INTRODUCTION
This section of the City of Fortuna's annual financial report presents discussion and analysis of the city's financial performance during the fiscal year that ended on June 30, 2021. Please read this analysis in conjunction with the transmittal letter contained in the front of this report and the city's financial statements, which follow this section.
Financial Highlights
• The city's total net position continued to improve during the 2020-21 fiscal year with an increase of $4.13 million at the end of the fiscal period. Net position is the difference between the city's assets and liabilities. • The Successor Agency (Former Redevelopment Agency) continues to move forward with the completion of "winding down" the city's former redevelopment activities. • The city's general funds earned $9.41 million in revenues during the 2020-21 fiscal year with $7.26 million in total expenditures, which resulted in an excess of revenues over expenditures of $2.15 million. • The citizens of Fortuna approved a ¾ cent sales tax measure, Measure E, on the November 8, 2016 ballot. Revenues from Measure E accounted for $2.025 million of the $9.41 million total general fund revenues. Measure E is a general tax that went into effect on April 1, 2017 and is set to terminate on March 31s1, 2033.
• The fiscal period ending June 30, 2021, resulted in a general fund balance of $10.59 million with $10.58 million reported as unassigned (See pg. 14-15 for details). The City has designated about $5.06 million from the end of year unassigned fund balance as stabilization reserves for contingencies and cash flow shortfalls.
• The city's water and wastewater programs generated approximately $6.19 million in user fees and $50,000 in miscellaneous revenue this fiscal period for a total of $6.24 million in revenue. Utility fees continue to support daily operations, debt service, and capital improvement projects. The net position of the water enterprise increased by 0.18 percent to $15.7 million and the wastewater enterprise net position increased by 1.17 percent to $25.9 million indicating stable growth and management of the city's vital utility services.
OVERVIEW OF THE FINANCIAL STATEMENTS
The city's Comprehensive Annual Financial Report ("CAFR") consists of four main components: (1) the independent auditor's report and management's discussion and analysis; (2) the basic financial statements and notes to the financial statements; (3) required supplementary information; and (4) combining fund financial statements. The basic financial statements include two types of statements that present different views of the city; the government-wide and the fund financial statements. • The government-wide financial statements provide both long-term and short-term information regarding the city's overall financial status.
• The fund financial statements focus on individual parts of city government, reporting the city's operations in more detail than the government-wide statements.
The basic financial statements also include notes that provide additional information essential to understanding the data contained in the government-wide and fund financial statements. The statements and notes are followed by required supplementary information, including budgetary comparison schedules for the general fund and other major governmental funds. In addition to these required elements, we have included combining statements and schedules that provide details about the city's non-major funds. - 3-
MANAGEMENT'S DISCUSSION AND ANALYSIS
Figure A-1 summarizes the major features of the city's financial statements, including the portion of the city government they cover and the types of information they contain. The remainder of this overview section of management's discussion and analysis explains the structure and contents of each of the statements.
Figure A-1
Major Features of the City of Fortuna's Government-Wide and Fund Financial Statements Fund Statements
Government-Wide Governmental Funds Proprietary Funds
Statements
Scope Entire city goverment The activities of the city that is Activities the city operates similar to not proprietary or fiduciary, rivate businesses: Water, sewer, an Parks a Recreaio Dept. and transit.
Required • Statement of net position • Balance sheet • Statement of net position financial statements
• Statement of activities Statement of revenue * Stagent of venues, expenditures, xpenditures, and change
in fund balances
• Statement of cash flows
Accounting basis and Accrual accounting and Modified accrual accounting Pecures counting and economic measurement focus economic resources focus and current financial resources focus
All assets and liabilities, both Only assets expected to be Type of asset/iability financial and capital, and short- depleted and liabilities that are information term and long-term lue and payable during th long-term liabilities. iscal year. No capital asset
are included.
Type of All revenues earned or Revenues for which cash is •All revenues and expenditures inflow/outflow information received; and expenditures received during or soon after received/incurred during the fiscal year, incurred during fiscal period, the end of the year. regardless of when cash is received or regardless of when cash is Expenditures when goods or expended. received or expended. services have been received
and payment is due during the
fiscal year
Government-Wide Statements
Government-wide statements report information similar to those used by private-sector companies. Current year revenues and expenditures are accounted for in the statement of activities on a full accrual basis regardless of when cash is actually received or disbursed.
The government-wide financial statements provide a broad overview of the city's activities as a whole.
These financial statements are comprised of the:
1) Statement of Net Position - Includes all of the city's assets and liabilities and is used to measure total economic resources. Net position is the difference between the city's assets and liabilities.
Over time, increases or decreases in the net position is an indicator of whether the city's financial health is improving or deteriorating.
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MANAGEMENT'S DISCUSSION AND ANALYSIS
2) The Statement of Activities - Provides information regarding the city's total revenues and full accrual expenses and is critical in measuring the net revenues and expenses (including depreciation) of each of the city's programs.
The government-wide financial statements of the city are divided into two categories:
• Governmental activities - The majority of the city's basic services are reported as governmental activities, including general government, police, streets, public works, parks and recreation. Activities are primarily financed with property taxes, sales taxes, transient occupancy taxes, user charges and fees, and state and federal grants.
• Business-type activities - The city's water, wastewater, and transit systems are reported as business- type activities. These programs are financed with user fees and transit subsidies that are intended to cover the long-term costs of services including capital infrastructure and debt financing.
Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control and monitor resources that have been segregated or "restricted" for specific activities or objectives. The city, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the city can be divided into two categories: governmental funds and proprietary funds. The concept of major funds, and the determination of which are major funds is established by the Governmental Accounting Standards Board (GASB). • Governmental funds - Most of the city's basic services are included in governmental funds which focus on (1) How cash and other financial assets can readily be converted to cash flow; and (2) the balances left at year-end that are available for spending. Consequently, the governmental funds statements provide a detailed short-term view that helps determine whether there are more or fewer financial resources that can be spent in the near future to finance the city's programs. Because this information does not encompass the additional long-term focus of the government-wide statements, additional information is included at the bottom of the governmental funds statement, or on subsequent pages, that explain the relationship (or differences) between them. • Proprietary funds - Services for which the city charges customers a fee are generally reported in proprietary funds. Proprietary funds, like the government-wide statements, provide both long and short- term financial information. Similarly, the city's enterprise funds (one type of proprietary fund) are essentially equal to its business-type activities, but provide more detail and information such as cash flow.
MANAGEMENT'S DISCUSSION AND ANALYSIS
FINANCIAL ANALYSIS OF THE CITY AS A WHOLE
Net Position. The city's total combined net position increased $4. 13 million during the 2020-21 fiscal year.
See Table A-1 below:
Table A-1
City of Fortuna's Net Position
(in thousands of dollars)
Percentage
Governmental Activities Business-type Activities Total Change 2021 2020 2021 2020 2021 2020
Current and other assets $ 31,482 $ 29,031 $ 24,089 $ 23,863 $ 55,571 $ 52,894 5.1% Capital assets, net 22,963 21,313 34,956 35,114 57,919 56,427 2.6% Total assets 54,445 50,344 59,045 58,977 113,490 109,321 3.8% Pension related items 1,855 1,618 840 734 2,695 2,352 14.6% Total deferred outflows 1,855 1,618 840 734 2,695 2,352 14.6% Current liabilities 1,188 1,259 1,195 869 2,383 2,128 12.0% Long-term liabilities 8,170 7,482 16,871 17,289 25,041 24,771 1.1% Total liabilities 9,358 8,741 18,066 18,158 27,424 26,899 2.0% Deferred inflows:
Pension related items 282 390 86 119 368 509 -27.7%
Net position:
Invested in capital assets 22,939 21,272 22,437 22,074 45,376 43,346 4.7% Restricted 3.6%
Unrestricted 5.3%
Total net position $ 46,660 $ 42,831 $ 41,733 $ 41,434 $ 88,393 $ 84,265 4.9% The net position of the city's governmental activities increased by 8.94 percent to $46.7 million during the • 2020-21 fiscal year. The city currently does not have any long-term debt related to assets used in its governmental activities. Net capital assets for governmental activities increased to $22.9 million at year- end, the increase primarily due from street and drainage infrastructure improvements.
The net position of the city's business-type activities increased by approximately $0.30 million this fiscal year to $41.7 million. Assets generated from business-type activities are restricted to supporting the continuing operations of the city's utility and transit services., Combined Revenues and Expenditures
City revenues increased overall by twelve percent (12%) ending the year with a combined total of $23.46 million. In comparing revenues to the previous fiscal year, it is important to consider that there was an increase in one time grants and contributions revenue of $1.2 million from the previous fiscal year. This increase in capital grants and contributions nearly accounted for half the entire increase in overall revenues. (See Table A-2.)
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MANAGEMENT'S DISCUSSION AND ANALYSIS
City of Fortuna
Revenue Sources
6%
3% 6%
• Charges for Services
3% 34% • Grants & Contributions
• Sales Taxes
18% • Property Taxes
• Transient Occupancy Tax
• Other Taxes
30% • All Other
The total cost of city programs and services increased by $1.5 million to $19.3 million during fiscal year ending 2021, an increase of eight percent (8%). Streets funding had a large one-time project cost for fiscal year 2021 which resulted in an over $1.5 million increase in streets funding for fiscal year ending 2021 alone. Costs cover a variety of services with approximately 42% of total costs attributed to business-type activities (water, wastewater, and transit) and the remaining 58% related to general government, public safety, streets, parks and recreation programs, and other services provided to the community.
City of Fortuna
Functional Expenses
4%
8%
21% • General Admin
22% • Public Safety
a Parks and Recreation
• Water & Sewer
5%
• Streets
40% • All Other
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MANAGEMENT'S DISCUSSION AND ANALYSIS
Contributions increased by twelve percent (12%) during the 2020-21 fiscal year. A majority of this increase projects to maintain the city's water and wastewater infrastructure.
Table A-2
Changes in the City's Net Position
(in thousands of dollars)
Governmental Percent
Activities Business-type Totals City Wide Change
2021 2020 2021 2020 2021 2020
Revenues
Program revenues
Charges for services $ 1,845 $ 1,485 $ 6,239 $ 5,928 $ 8,084 $ 7,413 9% Operating Grants 2,018 1,395 2,018 1,395 45%
Capital Grants 5,008 4,403 - - 5,008 4,408 14%
General revenues
Taxes 6,996 5,869 6,996 5,869 19%
Investment Earnings 230 311 61 291 975 -70%
Other 1,061 936 1,061 936 13%
Total revenues 15,140 13,009 8,318 7,987 23,458 20,996 12% Expenses
General government 1,623 1,551 - 1,623 1,551 5%
Public safety 4,171 4,902 - 4,171 4,902 -15%
Streets 4,072 2,594 - 4,072 2,594 57%
Parks and recreation 1,027 1,201 1,027 1,201 -14%
Sanitation 414 204 414 204 103%
Water - 2,963 2,820 2,963 2,820 5%
Wastew ater : 4,691 4,214 4,691 4,214 11%
: 353 369 353 5%
Transit 369
Other
Total expenses _11,307 10,452 8,023 7,387 19,330 17,839 8% Increase (Decrease) 3,833 2,557 295 600 4,128 3,157
Transfers (4) (6) 4 6
Change in net position 3,829 2,551 299 606 4,128 3,157 31% Net Position, beginning, as restated 42,831 40,280 41,434 40,828 84,265 81,108 Prior Period Adjustment
Net Position, end of year $46,660 $42,831 $41,733 $41,434 $88,393 $84,265 5% The cost of the city's governmental activities this year was $11.3 million, an increase of $0.9 million or 8.2%, compared to last fiscal year as presented in Table A-2. The cost of the city's business type activities this year was $8.0 million, an increase of $0.6 million or 7.9%, compared to last fiscal year as presented in Table A-2. Water and Wastewater expenses accounted for nearly all of the $0.6 million increase. These increased costs were primarily for capital outlay and infrastructure improvements. - 8-
MANAGEMENT'S DISCUSSION AND ANALYSIS
FINANCIAL ANALYSIS OF THE FUND STATEMENTS
The city uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements and regulations. The fund financial statements focus on individual parts of city government in order to report city operations in more detail than the government-wide statements.
Governmental Funds
The general fund, HOME fund, and city housing fund are reported as major governmental funds. Other non-major governmental fund programs include gas tax(s), storm drain maintenance, federal and state grants, debt service, and capital projects.
The general fund reported $9.41 million in tax, intergovernmental, fee and other revenues during the year These revenues supported $4.1 million in public safety programs, $1.0 million to support parks anc recreation programs and services, and the remainder supported streets, capital improvement projects, and general administration. The general fund had a fund balance of $10.60 million at year-end.
On a budgetary basis, general fund revenues exceeded budget estimates by approximately $2.0 million.
Property, sales, and other tax revenues exceeded projections by nearly $1.5 million with license, permits, and miscellaneous revenues exceeding projections by the remaining $500,000. In total, general fund expenditures and transfers were $400,000 below approved budget appropriations.
The city's HOME grant fund continues to administer an approximate $9.8 million portfolio of federally funded housing loans. No new loans were extended during the year.
The city continues to administer a $3.2 million portfolio of low-to-moderate income housing loans that were originally funded by Community Development Block Grants ("DBG) and by set-aside requirements of the former redevelopment agency. Administration of these assets is a result of the city's ongoing commitment to support low and moderate income housing programs within city limits.
Business-Type Funds
The water fund earned $2.5 million in user fees during the year to support operating costs, debt service, and capital improvements.
The wastewater fund earned $3.7 million in user fees during the year to support operating costs, debt service, maintenance costs and investments in system improvements.
The nonmajor transit fund earned over $17,000 in fees during the 2020-21 fiscal period. Operating subsidies of over $317,000 combined with user fees supports the operating costs necessary to provided essential transportation services to city residents.
- 9 -
MANAGEMENT'S DISCUSSION AND ANALYSIS
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
The city continues to invest in improvements to maintain and improve the city's infrastructure. At the end of 2021, the city has invested $57.9 million in a broad range of capital assets (net of accumulated to the basic financial statements.
Table A-3
Capital Assets (net of depreciation)
(in thousands of dollars)
Percent
Governmental Activities Business-type Activities Total Change 2021 2020 2021 2020 2021 2020
Land $ 667 $ 808 $ 154 $ 154 $ 821 $ 962 -15%
Construction in progress 3,883 1,266 1,936 1,092 5,819 2,358 147% Nater /Wastew ater plant & systen 53,981 53,750 53,981 53,750 0% Buildings, structures & system 4,535 4,983 4,535 4,983 -9% -
Machinery and equipment 1,656 1,886 2,405 2,341 4,061 4,227 -4% Vehicles 1,446 1,408 1,397 1,352 2,843 2,760 3%
Infrastructure 22,082 21,162 - 22,082 21,162 4%
Improvements 1,968 1,968 - 1,968 1,968 0%
Total Capital Assets $36,237 $33,481 $59,873 $58,689 $96,110 $92,170 4% Less:
Accumulated depreciation (13,316) (12,210) (24,916) (23,575) (38,232) (35,785) 7% Capital Assets, net of
Accumulated depreciation $22,921 $21,271 $34,957 $35,114 $57,878 $56,385 3% Long-Term Debt
The city ended the 2020-21 fiscal year with $12.5 million in principal owed for the city's revenue bonds.
The following is a breakdown of the outstanding principal by fund:
General Fund - Capital leases and loans $ 24,328
Water Fund 4,785,000
Wastewater Fund 7,735,000
City Total: $ 12,544,328
For further detail, see Notes to the Basic Financial Statements, Long-Term Debt, contained in the CAFR. - 10 -
MANAGEMENT'S DISCUSSION AND ANALYSIS
PENSION ACCOUNTING MATTERS
The City's overall actuarially determined net pension liability was $11.05 million at the end of fiscal year 2021. Compared to $10.17 million at the end of fiscal year 2020. Additional information on the City's pension liability and related matters can be found in Note 5E to the CAFR.
ECONOMIC FACTORS AND NEXT YEAR'S BUDGET
For almost two-years, the COVID-10 pandemic has dominated lives and impacted virtually everyone. In addition to the toll in human life, COVID-19 brought with it a worldwide economic recession resulting in record high unemployment, business closures, and a drop in economic activity. The local and national economies are realizing strong recovery in some areas, while other sectors appear to be very slow to recover, furthering belief that a "K" type recovery/recession will continue to occur. Fortunately, the City has benefited from the upside of the recovery. Some sales tax categories, such as automobile sales and online purchases, have been robust. The city continues to remain conservative, yet optimistic, in projecting revenues for the fiscal year 2021-22 budget anticipating stable revenue growth through the next fiscal year.
Future year expenditures are expected to continue to face cost pressures in maintaining existing and essential services to city residents. In particular, energy, pension, and health benefit costs have increased significantly over the past decade and are projected to increase again in 2021-22 and beyond. As the city monitors budget results during the current fiscal period; Council and staff are mindful to be financially prudent when prioritizing the services that are sustainable with existing revenue streams such as property and sales tax, grants, and fees for services.
CONTACTING THE CITY'S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, customers, investors and creditors with a general overview of the city's finances and to demonstrate the city's accountability for the money it receives. If you have questions about this report or need additional financial information, contact the Finance Director, City of Fortuna, 621 Eleventh Street, P.O. Box 545, Fortuna, California 95540. - 11 -
City of Fortuna
STATEMENT OF NET POSITION
June 30, 2021
Primary Government
Governmental Business Type
Activities Activities Total
ASSETS
Current assets:
Cash and investments $ 11,724,543 $ 23,386,471 $ 35,111,014 Net receivables 3,332,206 561,074 3,893,280
Prepayments 3,968 3,968
Inventory 140,301 140,301
Total current assets 15,060,717 24,087,846 39,148,563
Noncurrent assets:
Notes receivable-long term 14,358,678 14,358,678
2,063,220 : 2,063,220
Loan receivable successor agency
Capital assets not being depreciated 4,591,926 2,089,677 6,681,603 Capital assets being depreciated, net 18,371,022 32,867,058 51,238,080 Total noncurrent assets 39,384,846 34,956,735 74,341,581 Total assets 54,445,563 59,044,581 113,490,144
DEFERRED OUTFLOWS OF RESOURCES
Pension related items 1,854,845 840,696 2,695,541
LIABILITIES
Current liabilities:
Accounts payable 1,050,267 354,448 1,404,715
Accrued liabilities 85,765 85,765
Compensated absences 7,939 7,939
35,638 78,120 113,758
Deposits
Accrued interest payable 139,761 139,761
Leases and bonds due in one year 16,218 614,245 630,463 Total current liabilities 1,187,888 1,194,513 2,382,401 Noncurrent liabilities:
Compensated absences 348,107 30,304 378,411
Net pension liability 7,813,791 3,232,840 11,046,631
Revenue bonds due in more than one year 11,970,000 11,970,000 Capital leases due in more than one year 8,110 8,110
Premium from sale of bonds, net 1,038,287 1,638,287
Total noncurrent liabilities 8,170,008 16,871,431 25,041,432 Total liabilities 2,357,896 18,065,944 27,423,840
DEFERRED INFLOWS OF RESOURCES
Pension related items 282,271 86,024 368,295
Total deferred inflows 282,271 86,024 368,295
NET POSITION
Net investment in capital assets 22,938,620 22,436,735 45,375,355 Restricted for:
Affordable housing 420,783 420,783
Public works and streets 1,486,961 1,486,961
Economic development 1,649,497 1,649,497
Unrestricted 20,164,380 39,460,954
Total net position 16,660,241 41,733,309 $ 88,393,550
The accompanying notes are an integral part of these financial statements. - 12 -
City of Fortuna
STATEMENT OF ACTIVITIES
For the year ended June 30, 2021
Net (Expenses) Revenue and
Program Revenues Changes in Net Position
City Government
Charges for Business-type
Functions/Programs Expenses Contributions Activities Total Governmental activities:
General government 1,622,797 $ $ $ (1,622,797) $ (1,622,797) Public safety 4,171,065 30,773 (4,140,292) (4,140,292)
Public works & streets 4,071,600 777,428 5,007,997 1,713,825 1,713,825 Parks and recreation 1,027,191 1,036,462 9,271 9,271
Sanitation +14,t14 (41+,+14) (+14,414)
Business development and housing
Interest on long-term debt
Total governmental activities 11,307,067 1,844,663 5,007,997 (4,454,407) (4,454,407) Business-type activities:
Water 2,963,179 2,504,339 465,195 6,355 6,355
Wastewater +, 691,028 3,717,201 1,236,324 262,497 262,497 Transit 369,082 17,674 316,695 (34,713) (34,713)
Total business-type activities 8,023,289 6,239,214 2,018,214 234,139 234,139 Total City government 19,330,356 8,083,877 2,018,214 5,007,997 (4.454,407) 234,132 (4.220.268) General revenues and transfers:
Taxes:
Property taxes 611,929 611,929
Sales taxes 4,295,71+ 4,295,714
Transient occupancy cares 755,125 755,125
Other taxes 28,551 28,551
Property tar in lieu VIF 1,305,039 1,305,039
Other income 1,061,319 1,061,319
Unrestricted investment earnings 230,087 60,780 290,867 Transfers (4,431) 4,431
Total general revenues and transfers 8,283,333 65,211 8,348,5H Change in net position 3,828,026 299,350 4,128,276
Net position, beginning 42,831,315. 41,433,952 84.265,274 Net position, ending 46.660,241 $ 41,733,309 ≤ 88,393,550 The accompanying notes are an integral part of these financial statements. - 13-
City of Fortuna
GOVERNMENTAL FUNDS
BALANCE SHEET
June 30, 2021
Other Total
General HOME City Housing Governmental Governmental
Fund Grants Fund Funds Funds
ASSETS
Cash and investments $ 8,902,416 $ 206,415 S 172,652 S 2,443,060 $ 11,724,543 Accounts receivable 1,291,772 1,355,076 2,646,848
Taxes receivable 685,358 : 685,358
Due from other funds 3,463 3,463
Prepayments 3,968 - 3,968
Notes receivable 1,320 9,793,815 3,183,561 1,379,982 14,358,678 Loan receivable from successor agency 2,063,220 2,063,220 Land held for resale 41,716 41,716
Total assets 12,951,517 $ 10,000,230 3,397,929 5,178,118 $ 31,527,794
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable $ 181,241 $ - $ $ 869,026 $ 1,050,267
Accrued liabilities 85,765 85,765
Due to other funds .... 3,463 3,463
Deposits 35,638 35,638
Total liabilities 302,644 872,489 1,175,133
Deferred inflows of resources:
Long-term receivables 2,063,220 2,793,815 3,183,561 1,379,982 16,420,578 Fund balances:
3,968 : 3,968
Restricted for economic development 1,619,497 1,649,497 Restricted for affordable housing : 206,415 214,368 420,783 Restricted for streets and storm drains 1,486,961 1,486,961 Unassigned 10,581,685 (210,811) 10,370,874
Total fund balances 10,585,653 206,415 214,368 2,925,647 13,932,083 Total liabilities, deferred inflows of
resources and fund balances 12,951,517 ≤ 10,000,230 S 3,397,922 5,178,118 $ 31,527,794 Total Governmental Fund Balances $ 13,932,083
Amounts reported for governmental activities in the
statement of net position are different because:
Capital assets used in governmental activities are not
financial resources and therefore are not reported in the funds 22,921,232 Long-term notes receivable do not provide current financial resources and are therefore reported as deferred inflows of resources 16,420,578 he net pension liability and related deferred outflows of resources and deferred inflow resources do not provide or use current financial resources and are not reported in the func (6,241,217) Some liabilities, including bonds, leases, compensated
absences, and accrued interest are not due and payable in the current period and are therefore not reported in the funds (372,435)
Net Position of Governmental Activities $ 46,660,241
The accompanying notes are an integral part of these financial statements. - 14-
City of Fortuna
GOVERNMENTAL FUNDS
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
For the yeat ended June 30, 2021
City Other Total
General HOME Housing Governmental Governmental
Fund Grants Fund Funds Funds
REVENUES
Property taxes 611,929 $ $ - $ 611,929
: :
Sales taxes 4,295,714 4,295,714
Other taxes 28,551 28,551
Transient occupancy taxes 755,125 755,125
Property tax in lieu VLF 1,305,039 1,305,039
Licenses and permits 777,428 - 777,428
Fines and forfeits 30,773 : 30,773
Intergovernmental 660,218 18,161 4,329,618 5,007,997
Interest 219,283 557 464 2,783 230,087
Charges for services 449,270 587,192 1,036,462
Miscellaneous 277,821 50,000 733,498 1,061,319
Total revenues 2,411,151 18,718 50,464 5,660,091 15,140,424
EXPENDITURES
Current:
General government 1,622,417 380 1,622,797
Public safety 4,120,076 - 4,120,076
Public works & streets 487,883 5,233,696 5,721,579
Parks and recreation 1,027,191 1,027,191
• 414,414
Health and welfare 414,414
Business development and housing
Capital outlay :
Debt service:
Principal :
Interest
Total expenditures 7,257,567 380 5,648,110 12,906,057
Excess (deficiency) of revenues
over expenditures 2,153,584 18,338 50,464 11,981 2,234,367
OTHER FINANCING SOURCES (USES)
Capital lease financing
Transfers in 338,549 143,136 481,685
Transfers out (486,116) (486,116)
Total other financing sources (uses) (147,567) 143,136 (4,431) Net change in fund balances 2,006,017 18,338 50,464 155,117 2,229,936 Fund balances, July 1 8,503,000 188,077 163,904 2,770,530 11,625,511 Prior period adjustment 76,636 76,636
Fund balances, July 1 restated 8,579,636 188,077 163,904 2,770,530 11,702,147 Fund balances, June 30 $ 10,585,653 206,415 214,368 $ 2,925,647 : $ 13,932,083 The accompanying notes are an integral part of these financial statements. - 15 -
City of Fortuna
RECONCILIATION OF THE STATEMENT OF REVENUES,
EXPENDITURES, AND CHANGES IN FUND BALANCES
OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
For the year ended June 30, 2021
Net change in fund balances - total governmental funds $ 2,229,936 The changes in net position reported for governmental activities in the statement of activities is different because:
Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays ($3,243,913) exceeds depreciation ($1,593,934) in the current period. 1,649,979
Repayment of the principal of long-term debt consumes the current financial resources of governmental funds. These transactions do not have any affect on net position. 6,908
The recording of accrued compensated absences does not require the use of current financial resources and, therefore, is not reported as expenditures in governmental funds. The liability is included in the statement of activities.
Long-term receivables are deferred in the funds until collected and available for use. In the statement of activities, no revenues are recognized from the collection of receivables. 216,831
The net change in pension expense either contributed to pension plan in current fiscal year not included on statement of activities; or expenses reported in statement of activities that do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. (274,728) Changes in net position of governmental activities 3,828,926 The accompanying notes are an integral part of these financial statements. - 16 -
City of Fortuna
STATEMENT OF NET POSITION
Proprietary Funds
June 30, 2021
Enterprise Funds
Nonmajor
Water Wastewater Transit Fund Total
ASSETS
Current assets:
Cash and investments $ 8,818,105 $ 14,278,733 S 289,633 $ 23,386,471 Net receivables 204,873 356,201 561,074
Inventory 120,396 19,905 140,301
Due from other funds
Total current assets 2,143,374 14,654,839 289,633 24,087,846 Noncurrent assets:
Capital assets:
Capital assets not being depreciated:
Land 26,996 126,695 : 153,691
Construction in progress 135,814 1,800,172 1,935,986
Total capital assets not being depreciated 162,810 1,926,867 2,089,677 Capital assets being depreciated:
Collection system 9,290,233 2,290,233
Pumping system 1,137,677 1,137,677
Treatment system 23,460,374 23,460,374
Distribution and treatment system 20,092,983 20,092,983 Equipment 822,065 1,583,027 2,405,092
Vehicles 483,373 603,148 310,870 1,397,391
Less accumulated depreciation (8,539,639) (16,196,191) (180,862) (24,916,692) Total capital assets being depreciated 12,858,782 19,878,268 130,008 32,867,058 Total noncurrent assets 13,021,592 21,805,135 130,008 34,956,735 Total assets 22,164,966 36,459,974 419,641 59,044,581
DEFERRED OUTFLOWS OF RESOURCES
Pension plan deferrals 344,154 463,936 32,606 840,696
LIABILITIES
Current liabilities:
Accounts payable 43,031 145,020 166,397 354,448
Compensated absences 2,904 4,857 178 7,939
Deposits 78,120 78,120
Accrued interest payable 48,431 91,330 : 139,761
Premium from sale of bonds, net 17,758 46,487 64,245
Bonds and Notes due within one year 210,000 340,000 550,000 Total current Liabilities 400,244 627,694 166,575 1,194,513 Noncurrent liabilities:
Compensated absences 11,084 18,539 681 30,304
Net pension liability 1,298,227 1,750,060 184,553 3,232,840 Revenue bonds and notes 4,575,000 7,395,000 11,970,000
Premium from sale of bonds, net 452,831 1,185,456 1,638,287 Total noncurrent liabilities 6,337,142 10,349,055 185,234 16,871,431 Total liabilities 6,737,386 10,976,749 351,809 18,065,944
DEFERRED INFLOWS OF RESOURCES
Bonds
Pension plan deferrals 34,545 146,568 4,911 86,024
Total deferred inflows of resources 34,545 46,568 4,911 86,024
NET POSITION
Net investment in capital assets 8,236,592 14,070,135 130,008 22,436,735 Restricted -
Unrestricted 7,500,597 11,830,458 (31,481) 19,296,574
Total net position 15,73,189 S. 25,900,503 95,527 41,733,302 The accompanying notes are an integral part of these financial statements. - 17 -
City of Fortuna
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION Proprietary Funds
June 30, 2021
Enterprise Funds
Nonmajor
Water Wastewater Transit Fund Total
OPERATING REVENUES
Sales of water $ 2,357,225 $ - $ - $ 2,357,225
Service fees 118,154 3,701,632 11,689 3,831,475
Miscellaneous 28,960 15,569 5,985 50,514
Total operating revenues 2,504,339 3,717,201 17,674 6,239,214
OPERATING EXPENSES
Employee services 1,127,918 1,394,093 151,449 2,673,460 Contract services 365,102 991,628 173,407 1,530,137
Purchased power 245,854 253,783 499,637
549,960 956,406 20,101 1,526,467
Supplies and materials
Depreciation and amortization 478,620 726,599 24,125 1,229,344 Total operating expenses 2,767,454 4,322,509 369,082 7,459,045 Operating income (loss) 263,115) (605,308) (351,408) (1,219,831)
NON-OPERATING REVENUES (EXPENSES)
Operating subsidiaries 465,195 1,236,324 316,695 2,018,214 Interest expense (195,725) (368,519) (564,244)
Interest and investment revenue 22,578 38,150 52 60,780 Net nonoperating revenues (expenses) 292,048 205,955 316,747 1,514,750 Income (loss) before contributions and transfers 28,933 300,647 (34,661) 294,919 Contributions and transfers:
Transfer in 4,431 4,431
Transfer out
Net contributions and transfers 4,431 4,431
Change in net position 28,933 300,647 (30,230) 299,350
Total net position, July 1 15,708,256 25,599,946 125,757 41,433,952 Total net position, June 30 $ 15,737,182 $ 25,900,593 $ 95,527 41,733,309 The accompanying notes are an integral part of these financial statements. - 18 -
City of Fortuna
PROPRIETARY FUNDS
STATEMENT OF CASH FLOWS
For The Year Ended June 30, 2021
Business-Type Activities-Enterprise l'unds
Nonmajor
Water Wastewater Transit Fund Total
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers $ 2,498,340 $ 3,689,457 $ 17,674 $ 6,205,471 Payments to suppliers (1,158,444) (2,122,815) (28,579) (3,309,838) Payments to employees for services (1,078,787) (1,331,243) (142,053) (2552,083) Net cash provided by operating activities 261,109 235,399 (152,958) 343,550
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Operating subsidiaries 465,195 1,236,324 316,695 2,018,214 Transfers in 4,431 4,431
Transfers out
Net cash provided (used) by noncapital financing activities 465,195 1,236,324 321,126 2,022,645
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Capital asset dispositions 38,254 141,503 179,757
Payments on long-term debt principal (217,758) (366,488) (584,246) Interest paid on long-term debt (197,725) (371,719) - (569,444) Purchases of capital assets (268,933) (983,210) (1,252,143) Net cash provided (used) by capital
and related financing activities (646,162) (1,579,914) - (2,226,076)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received 22,578 38,150 52 60,780
Net cash provided by investing activities 22,578 38,150 52 60,780 Net increase (decrease) in cash and cash equivalents 102,720 (70,041) 168,220 200,899 Cash and equivalents, July 1 8,715,385 14,348,774 121,413 23,185,572 Cash and equivalents, June 30 $ 8,818,105 $ 14,278,733 $ 289,633 S 23,386,471 RECONCILIATION OF OPERATING INCOME TO Water Wastewater Nonmajor NET CASH PROVIDED (USED BY OPERATING ACTIVITIES Fund : Fund Transit Fund Total Operating income $ (263,115) $ (605,308) $ (351,408) $ (1,219,831) Adjustments to reconcile operating income
to net cash provided (used) by operating activities
Depreciation expense 478,620 726,599 24,125 1,229,344
(Increase) decrease in deferred outflows of resources (43,831) (59,087) (4,153) (107,071) Accounts receivable (5,999) (27,744) (33,743)
Inventories 9,480 300 : 9,780
Interfund accounts
Increase (decrease) in accounts payable (3,828) 78,702 164,929 239,803 Compensated absences 3,350 1,136 810 5,296
Deferred inflows of resources (13,195) (17,787) (1,876) (32,858) Net pension liability 102,807 138,588 14,615 256,010
Customer deposits (3,180) (3,180)
Net cash provided (used by operating activities 261,102 $ 235,399 § (152,958) S 343,550 Noncash Transactions
Bond premium amortization $ 17,758 $ 46,487 S 64,245
The accompanying notes are an integral part of these financial statements. - 19 -
City of Fortuna
STATEMENT OF FIDUCIARY NET POSITION
AGENCY FUNDS
June 30, 2021
Private-Purpose
Trust Fund
Successor
Agency
to the RDA
Fund
Assets
Cash and investments $ 503,786
Due from other governments 250,000
Total assets 753,786
Liabilities
Accrued expenses 249,783
Long-term debt:
Due within one year 275,125
Due more than one year 10,026,412
Total liabilities 10,551,320
Net position (deficit):
Held in trust for private purposes $ (2,797,534)
The accompanying notes are an integral part of these financial statements. - 20 -
City of Fortuna
PRIVATE PURPOSE TRUST FUND
STATEMENT OF CHANGES IN NET POSITION
For the year ended June 30, 2021
Private-Purpose
Trust Fund
Successor
Agency
to the RDA
Fund
Additions
Property tax $ 972,261
Investment earnings 1
Total additions 972,262
Deductions
Current
Community development
Principal 250,000
Interest & other charges (27,582)
Total deductions 222,418
Increase (decrease) in net position 749,844
Net position - beginning (10,547,378)
Net position - ending $ (0,797,534)
The accompanying notes are an integral part of these financial statements. - 21-
City of Fortuna
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2021
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity
The City of Fortuna (the City) is a municipal corporation governed by an elected five-member City Council.
The accompanying financial statements present the government and its component units, entities for which the City is considered to be financially accountable.
Blended Component Units - The Fortuna Public Financing Authority is separate legal entity created for the urpose of improving the economic conditions of the City, making public improvements and providing inancing for these purposes. This entity is governed by the City Council of the City of Fortuna and i chief reposed it serie to the Chi poet uny is deportedne part of the is special revenue, February 1, 2012 and all residual assets and liabilities are reported as private purpose fiduciary funds.
B. Government-wide and Fund Financial Statements
The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the non-fiduciary activities of the City. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support.
The statement of activities demonstrates the degree to which the direct expenses of a given function or segments are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function ot segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues.
Fund Financial Statements - The underlying accounting system of the City is organized and operated on the basis of separate funds, each of which is considered to be a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures or expenses, as appropriate. Governmental resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled.
Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds are reported as separate columns in the fund financial statements.
C. Measurement Focus, Basis of Accounting and Basis of Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as ate the proprietary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows.
Property taxes are recognized as revenues in the yeat for which they are levied. Grants and similar items ate recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. - 22 -
City of Fortuna
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2021
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) C. Measurement Focus, Basis of Accounting and Basis of Presentation (continued) Proprietary Funds - the City's Enterprise Funds are proprietary funds. In the fund financial statements, proprietary funds are presented using the accrual basis of accounting. Revenues are recognized when they are earned, and expenses are recognized when the related goods or services are delivered. In the fund financial statements, proprietary funds are presented using the economic resources measurement focus. This means that all assets and all liabilities (whether current or non-current) associated with their activity are included on theit balance sheets. Proprietary fund type operating statements present increases (tevenues) and decreases (expenses) in total net position.
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period of soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due.
Because of their spending measurement focus, expenditure recognition for governmental fund types excludes amounts represented by non-current liabilities. Since they do not affect net current assets, such long-term amounts are not recognized as governmental fund type expenditures or fund liabilities.
Amounts expended to acquire capital assets are recorded as expenditures in the year resources were expended, rather than as fund assets. The proceeds of long-term debt are recorded as other financing source rather than as a fund liability. Amounts paid to reduce long-term indebtedness are reported as fund expenditures.
Property taxes, sales taxes, transient occupancy taxes, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. All other revenue items are considered to be incasurable and available only when cash is received by the government.
General Fund - the City's primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund.
HOME Grant Fund - To account for grants and loans related to multi-family affordable housing projects.
City Housing Fund - To account for low and moderate income housing programs, and the residual assets from the dissolution of the housing fund of the City's dissolved redevelopment agency.
The City reports the following majot proprietary funds:
Water and Wastewater Funds - To account for the sewage treatment plant, sewage pumping stations and collection systems, and the water distribution system.
As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are payments-in-lieu of taxes and other charges between the government's water and wastewater function and various other functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned.
- 23-
City of Fortuna
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2021
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) C. Measurement Focus, Basis of Accounting and Basis of Presentation (concluded) Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes.
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the City's water and wastewater enterprise funds are charges to the customers for sales and services. The enterprise funds also recognize as operating revenue the portion of tap fees, connection fees and impact fees intended to recover the cost of connecting new customers to the system. Operating expenses for enterprise funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.
Fiduciary Funds
Trust Funds and Agency Funds are used to account for assets held by the City as an agent or trustee for individuals, private organizations, and other governments. The Successot Agency Private-purpose Trust Funds account for receipt of incremental property tax and payment of enforceable obligations (debts) assumed by the Successor Agency from the former Redevelopment Agency. The financial activities of these funds are excluded from the Government-wide financial statements but are presented in separate Fiduciary Fund financial statements.
D. Assets, Liabilities, Net Position or Equity
Deposits and Investments
The City's cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments with original maturities of three months or less from the date of acquisition. State statutes authorize the City to invest in obligations of the U.S. Treasury, commercial paper, corporate bonds, repurchase agreements, the State Treasurer's Investment Pool, the Humboldt County Treasurer's Pool and other permitted investments
Investments for the City are reported at fair value. The State 'Treasurer's Investment Pool and the Humboldt County Treasurer's Pool operate in accordance with appropriate state laws and regulations. The reported value in the pools is the same as the fair value of the pool shares.
Receivables and Payables
Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either "due to/from other funds" (i.e., the current portion of interfund loans) or "advances to/from other funds" (ie., the non-current portion of interfund loans). All other outstanding balances between funds are reported as "due to/from other funds." Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as "internal balances." Advances between funds, as reported in the fund financial statements, are offset by a fund balance reserve account in applicable government funds to indicate that they are not available for appropriation and ate not expendable available financial resources.
All trade and property tax receivables are not shown net of an allowance for uncollectibles. - 24 -
City of Fortuna
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2021
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) D. Assets, Liabilities, Net Position or Equity (continued) Expenditures for long-term notes receivable are reported in the fund statements when made; and the related receivable is recorded as an asset in the fund statements but is offset by deferred inflows of resources accounts until the receivables are realized by the funds. Long-term receivables are recorded as assets in the statement of net position when the transaction is consummated by the City and are not offset by deferred inflows of resources accounts.
Property Taxes
Property taxes are levied as of March 1 on property values assessed as of the same date. State statutes provide that the property tax rate be limited generally to one percent of market value, be levied by only the County, and be shared by applicable jurisdictions. The County of Humboldt collects the taxes and distributes them to taxing jurisdictions on the basis of assessed valuations subject to voter-approved debt.
Property taxes are due on November 1 and March 1, and become delinquent on December 10 and April
10. The City receives property taxes pursuant to an arrangement with the County known as the "Teeter Plan". Under the plan, the County assumes responsibility for the collection of delinquent taxes and pays the full allocation to the City. The City recognizes property tax revenues in the fiscal year in which they are due to the City.
Inventories and Prepaid Items
All inventories are valued at cost using the first-in/first-out (FIFO) method. Inventories of governmental funds are recorded as expenditures when purchased. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements.
Capital Assets
Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., toads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the City as assets with an initial, individual cost of more than $5,000 for equipment and vehicles and $10,000 for other capital assets having an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed.
Donated capital assets are recorded at estimated fair market value at the date of donation. Under the GASB 34 Implementation Rules, the City was not required to record infrastructure assets existing or acquired prior to July 1, 2003; and the City has not recorded such assets. The City may elect to record such infrastructure assets in the future. The costs of normal maintenance and repairs that do not add to the value of an asset or materially extend assets lives are not capitalized.
Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed.
Property, plant, and equipment of the City are depreciated using the straight-line method over the following estimated useful lives:
Buildings and improvements 25 years
Public domain infrastructure 20 years
System infrastructure 15-50 years
Vehicles and equipment 5 years
- 25 -
City of Fortuna
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2021
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) D. Assets, Liabilities, Net Position or Equity (continued) Compensated Absences and Other Post-Employment Benefits (OPEB It is the City's policy to permit employees to accumulate earned but unused vacation and sick pay benefits.
There is a liability for a portion of unpaid accumulated sick leave since the City does have a policy to pay certain amounts when employees separate from service with the City. All vacation pay is accrued when incurred in the government-wide and proprietary fund financial statements. The unpaid sick leave is considered a general fund obligation, and it is recorded in the general fund only when current financial resources will be required. The entire liability is reported in the statement of net position for governmental activities in the government-wide financial statements. The City provides no post-employment benefits other than its participation in the Public Employees Retitement System (PERS).
Long-term Obligations
In the government-wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position.
Bond Premiums Discounts/Issuance Costs For Governmental-Wide Financial Statements and Proprietary Funds Financial Statements - issuance costs are recognized during the current period. Any bond premiums and discounts are capitalized and amortized over the life of the bonds. Bond proceeds, premiums and discounts are reported as other financing sources in the governmental fund financial statements.
Deferred Outflows and Inflows of Resources
deferred outflows and inflows of resources.
In addition to assets, the Statement of Net Position will sometimes report a separate section for deferred outflows of resources. A deferred outflow of resources is defined as a consumption of net position by the government that is applicable to a future reporting period. In addition to liabilities, the Statement of Net Position will sometimes report a separate section for deferred inflows of resources. A deferred inflow of resources is defined as an acquisition of net position by the City that is applicable to a future reporting period.
Pensions
For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the State of California Públic Employees Retirement System (PERS) and additions to ot deductions from the PERS fiduciary net position have been determined on the same basis as they are reported by the PERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and Use of Estimates
The financial statements have been prepared in conformity with U.S. generally accepted accounting principles, and as such, include amounts based on informed estimates and judgments of management with consideration given to materiality. Actual results could differ from those amounts.
Net Position
GASB Statement 34 added the concept of Net Position, which is measured on the full accrual basis, to the concept of Fund Balance, which is measured on the modified accrual basis. - 26 -
City of Fortuna
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2021
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) D. Assets, Liabilities, Net Position or Equity (concluded) Net Position is the excess of all City's assets over its liabilities, regardless of fund. Net Position is divided into three captions under GASB Statement 34. These captions apply only to Net Position, which is determined only at the Government-wide level, and are described below:
Invested in Capital, net of related debt describes the portion of Net Position the is represented by the current 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 the is restricted as to use by the terms and conditions of greements outside parties, governmental regulations, laws, or other restrictions that the City cann nilaterally alter. These principally include developer fees received for use on capital projects, debt servic requirements, and redevelopment funds restricted to low and moderate income purposes.
Unrestricted describes the portion of Net Position that is not restricted as to use.
Fund Balances - Governmental Funds
Fund balances for governmental funds are reported in classifications based primarily on the extent to which the City is bound to honor constraints about the specific purposes for which amounts in those funds can be spent. These classifications include (1) nonspendable, (2) restricted, (3) committed, (4) assigned and (5) unassigned amounts.
Nonspendable amounts are generally items not expected to be converted into cash within a short period of time such that the cash would not be available to pay reported liabilities of the current period. These nonspendable items typically include inventories, prepayments, long-term receivables not offset by deferred revenue accounts, and advances by the City to its component unit redevelopment agency. Restricted amounts include those where the constraints placed on the uses of resources are externally imposed by grantors, contributors, other governments or by laws and regulations. Committed amounts ate those that can only be used for a specific purpose as determined by the City Council. Such committed amounts may be redeployed for other uses only by the direction of the City Council. Assigned amounts are fund balance amounts constrained by the City's intent to be used for specific purposes as determined by the City's Finance Director or City Manager. Assigned amounts can be redeployed for other uses by direction of the City Manager or Finance Director. Unassigned fund balance amounts are the residual amounts of the General Fund only or funds having deficit fund balances.
When expenditures are incurred for which both restricted and unrestricted (committed, assigned of unassigned) amounts are available, the City considers restricted amounts to have been spent first. When expenditures are incurred for which any class of unrestricted fund balance could be used, the City considers committed amounts would be reduced first, followed by assigned amounts, and then unassigned amounts.
Fund Balance and Net Position Deficits
The following funds had deficit fund balances at June 30, 2021. Deficits will be covered by future revenues and/or General Fund transfers.
Special Revenue Funds
Fund 240 Abatement Fund 270 STIP/TEA
Fund 273 Engineering Fund 300 Special Grants
Fund 350 Capital Projects Fund 359 Fish and Wildlife
The Special Revenue funds are expected to have their deficit eliminated through grant reimbursements for prior year expenditures and transfers from the General Fund. - 27 -
City of Fortuna
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2021
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (concluded) E. Prior Period Adjustment
The priot period adjustment of $76,636 was to correct the accrual of the current government activitie. portion of compensated absences liability reported in the General Fund as of June 30, 2020, as follows Government
General Fund Activities
Fund balance, beginning of period 8,503,000 3 11,625,511 Prior period adjustment 76.636 76,636
Fund balance, beginning of period restated 8,579,636 $ 11,702,147 NOTE 2 - RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS A. Explanation of Certain Differences Between the Governmental Fund Balance Sheet and the Government-wide Statement of Net Position
The governmental fund balance sheet includes a reconciliation between fund balance — total governmental funds and net position — governmental activities as reported in the government-wide statements of net position. One lement of that reconciliation explains that "capital assets are not financial resources and are not reporter in the funds." The details of this $22,921,232 difference are as follows:
Capital assets $ 36,236,824
Accumulated depreciation (13,315,592)
Net adjustment to increase fund balance — total governmental funds to arrive at net position - governmental activities $ 22,921,232 Another element of the reconciliation explains that "long-term liabilities" are not due and payable in the current period and are therefore not reported in the funds. The details of this $(372,435) difference are as follows:
Long-Term Debt Obligations:
Capital leases $ (24,328)
Unpaid vacation and sick leave (348,107)
Net adjustment to decrease fund balance— total governmental funds to arrive at net position - governmental activities _ (372,435) B. Explanation of Certain Differences Between the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances and the Government-wide Statement of Activities The governmental fund statement of revenues, expenditures, and changes in fund balances includes a reconciliation between net changes in fund balances — total governmental funds and changes in net position of governmental activities as reported in the government-wide statement of activities. One clement of that reconciliation explains that "Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of these assets is allocated over their estimated useful lives and reported as depreciation expense." The details of this $1,598,990 difference and other significant components of the difference are as follows:
- 28-
City of Fortuna
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2021
NOTE 2 - RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENT (concluded) B. Explanation of Certain Differences Between the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances and the Government-wide Statement of Activities (concluded) Capital outlay $ 3,243,913
Depreciation expense (1,593,934)
Repayment of long-term debt principal 6,908
Long-term notes receivable 216,831
Net pension liability and related deferrals (274,728)
Net adjustment to decrease net changes in fund balances— total governmental funds to arrive at changes in net position - governmental activities 1,598,990 NOTE 3 - STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
A. Budgetary Information
Annual budgets are adopted on a basis consistent with generally accepted accounting principles for all governmental funds. All annual appropriations lapse at fiscal year-end. On or before the end of each fiscal year, all agencies of the City submit requests for appropriations to the City Manager so that a budget may be prepared. By May 15 of each year, the proposed budget is presented to the Council for review. The Council holds public hearings and a final budget must be prepared and adopted no later than June 30.
The appropriated budget is prepared by fund, function, and department. The City's department heads may make transfers of appropriations within a department. Transfers of appropriations between departments require the approval of the City Manager. The legal level of budgetaty control (i.e., the level at which expenditures may not legally exceed appropriations) is the fund level. The Council made no supplemental budgetary appropriations during the fiscal year. Encumbrance accounting is not employed in governmental funds. The General Fund expenditures were under appropriations by $417,123.
NOTE 4 - DETAILED NOTES ON ALL FUNDS
A. Cash Equivalents and Investments
Deposits and investments consisted of the following at June 30, 2021:
Statement of net position:
Cash and investments $ 35,111,014
Successor Agency (Fiduciary Funds) 503,786
Total cash and investments 35,614,800
Maturity 12
Cash and investments consist of the following; Months or Less Cash on hand $ 1,425
Deposits with financial institutions 13,050,364
Humboldt County 8,819,743
Investments in LAIF 13,743,268
Total cash and investments 35,614,800
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City of Fortuna
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2021
NOTE 4 - DETAILED NOTES ON ALL FUNDS (continued)
A. Cash Equivalents and Investments (concluded)
California Law requites banks and savings and loan associations to pledge government securities with a market value of 110% of the City's cash on deposit or first trust deed mortgage notes with a value of 150% of the deposit as collateral for these deposits. Under California Law, this collateral is held in the City's name and places the City ahead of general creditors of the institution.
Interest Rate Risk - As a means of limiting its exposure to fair value losses arising from rising interest rates, the City has a formal policy which limits City purchased investments to securities having a remaining maturity date from time of purchase to five years or less.
Credit Risk - The City's investment policy limits investments in mutual and money market funds to the top two ratings issued by nationally recognized statistical ratings organizations. Investments in obligations explicitly guaranteed by the U.S. Government are not considered to have credit risk and do not require the disclosure of credit quality. The Local Agency Investment Fund and Humboldt County Treasurer's Investment Pool are unrated. The JP Morgan Money Market Fund was rated AdA.
Concentration of Credit Risk - Investments explicitly guaranteed by the U.S. Government and investments in mutual funds, and external investment pools such as those held by the City are excluded from concentration of credit risk disclosures.
Custodial Credit Risk - For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty, the City will not be able to recover the value of its investments or the collateral securities that are in the possession of an outside party. Investments in mutual funds and external investment pools are not subject to custodial credit risk because these investments are not evidenced by specific securities.
Fair Value Measurements - The City categorizes its fair value measurements within the hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted market prices in active markets for identical assets; Level 2 inputs are significant other observable inputs, and Level 3 inputs are other significant unobservable inputs.
The City's investments in the Local Agency Investment Fund and Humboldt County Treasurer's Pool were an uncategorized input and not defined as a Level 1-3 input.
B. Receivables
Receivables as of year-end for the government's individual major and nonmajor funds in the aggregate, net of the applicable allowances for uncollectible accounts are as follows:
HOME& Wastewater
General City Housing Nonmajor Total Water and Transit
Fund Funds Funds Governmental Enterprise Enterprise
Receivables:
Taxes $ 685,358 $ - - $ 685,358 $ - $
Accounts 1,291,772 1,355,076 2,646,848 204,873 356,201
Subtotal current 1,977,130 1,355,076 3,332,206 204,873 356,201 Loan receivable 2,063,220 2,063,220
Notes receivable 1,320 12,977,376 1,379,982 14,358,678
Net total receivables $ 4,041,670 $ 12,977,376 $ 2,735,058 $ 19,754,104 $ 204,873 $ 350,201 Revenues of the water and wastewater enterprises are reported net of uncollectible amounts. Total uncollectible amounts related to revenues of the current period are not material at year-end. - 30 -
City of Fortuna
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2021
NOTE 4 - DETAILED NOTES ON ALL FUNDS (continued)
B. Receivables (concluded)
Long-term notes receivable of $14,358,678 consists of two notes relating to affordable housing projects for $9,793,815 (with accumulated and unpaid interest) and various other notes for $4,564,863 relating to business development and redevelopment projects. The notes for $9,793,815 bear interest at 3 percent per annum, mature in 55 years, and are repayable annually to the extent that the housing projects have residual receipts with the unpaid balance due at maturity. The notes are secured by a deed of trust on the housing projects. The other notes are generally repayable in monthly installments of principal and interest at various rates and terms.
The loan receivable of $2,063,220 in the General Fund is the amount determined to be an enforceable obligation of the successor agency to the former redevelopment agency of the City. When the redevelopment agency was dissolved in fiscal year 2012, previously approved loans between the City and the former redevelopment agency were deemed to not be an enforceable obligation of the successot agency under the dissolution rules and were written off at that time. The Dissolution Act further provided that after a successor agency receives a Finding of Completion by the California Department of Finance, such previously disallowed loans may be deemed to be enforceable obligations of the successor agency and repayable to the City. The successor agency has received its Finding of Completion and the Oversight Board has approved the loan agreement and its validity as an enforceable obligation. The loan is repayable it semiannual installments to the extent that funds are available under the formula-based method specified it the dissolution rules which also contain a provision that 20 percent of any such repayment shall be placed by the City in its Low and Moderate Income Housing Fund.
C. Capital Assets
Capital asset activity for the year ended June 30, 2021 was as follows:
Balance Balance
7/1/20 Increases Decreases 6/30/21
Governmental-type Activities
Capital assets not being depreciated:
Land $ 808,004 $ $ 141,054 $ 666,950
Construction in progress 1,266,210 3,092,644 482,524 3,883,260 Total capital assets not being depreciated: 2,074,214 3,099,644 623,648 4,550,210 Capital assets being depreciated:
Buildings 4,982,553 447,224 4,535,329
Improvements 1,967,516 1,967,516
Equipment 1,886,567 28,211 258,667 1,656,111
Vehicles 1,408,326 102,382 64,537 1,446,171
Infrastructure-primarily street systems 21,161,654 919,833 22,081,487 Total capital assets being depreciated: 31,406,616 1,050,426 770,428 31,686,014 Less accumulated depreciation for:
Buildings (3,251,634) (156,227) (112,972) (3,294,889)
Improvements (1,188,216) (64,133) (1,252,349)
Equipment (1,694,716) (111,815) (288,088) (1,518,443)
Vehicles (1,063,346) (157,685) (64,536) (1,156,495)
Infrastructure (5,011,665) (1,104,074) (22,323) (6,093,416) Total accumulated depreciation (12,209,577) (1,593,934) (487,919) (13,315,592) Net capital assets being depreciated, net 19,197,039 (543,508) 282,509 : 18,371,022 Governmental activities capital assets, net $ 21,271,253 $ 2,556,136 206,157 $ 22,921,232 - 31 -
City of Fortuna
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2021
NOTE 4 - DETAILED NOTES ON ALL FUNDS (continued)
C. Capital Assets (concluded)
Balance Balance
7/1/20 Additions Deletions 6/30/21
Business-type Activities
Capital assets not being depreciated:
Land $ 153,691 $ $ 153,691
1,091,543 362.521 18,078 1,935,986
construction in progres:
'otal capital assets not being depreciated: 1,245,234 862,521 18,078 2,089,677 Capital assets being depreciated:
Wastewater collection system 9,290,233 9,290,233
Wastewater pumping 1,137,677 1,137,677
/astewater treatment plan 23,460,374 23,460,374
238,993 8,212 20,092,983
later treatment and distributio 19,862,202
Equipment 2,340,828 105,536 41,272 2,405,092
Vehicles 1,352,298 45,094 1,397,392
Total capital assets, being depreciated: 57,443,612 382,623 49,484 57,783,751 Less accumulated depreciation for:
Wastewater system (15,340,454) (868,103) (12,365) (16,196,192) Water system (8,077,961) (498,796) (37,119) (8,539,638) Transit system (156,737) (24,125) (180,862)
Total accumulated depreciation (23,575,152) (1,391,024) (49,484) (24,916,692) Net capital assets being depreciated, net 33,868,460 (1,001,401) 32,867,059 Business-type activities capital assets, net $ 35,113,694 $ (138,880) $ 18,078 $ 34,256,736 Depreciation was charged to functions/programs of the City as follows:
Government Activities:
Streets 1,593,934
Total depreciation expense - governmental activities $ 1,593,934 Business-type Activities:
Water $ 478,620
Wastewater 726,599
Transit 24,125
Total depreciation expense - business-type activities 1,222,344 D. Inter-fund Transfers and Intergovernmental Expenditures Interfund transfers at June 30, 2021 were as follows:
Transfer In Transfer Out
General Fund 338,549 $ 486,116
Transit 4,431
25,000 :
Abatement
Gas tax 118,136
Total 486,116 $ 486,116
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City of Fortuna
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2021
NOTE 4 - DETAILED NOTES ON ALL FUNDS (continued)
D. Inter-fund Transfers and Intergovernmental Expenditures (concluded) The transfers out of the general fund were made for the purpose of providing debt service funds for repayment of long-term obligations.
The composition of inter-fund balances was as follows:
Due from Asset Due to Liability
General Fund 3,463
Engineering Fund 273 3,463
Total 3,463 3,463
The above balances generally resulted from a time lag between the dates that inter-fund goods and services are provided or reimbursable expenditures occur, transactions are recorded in the accounting system, and payment between funds are made.
E. Long-Term Debt
Water Revenue Bonds - During the 2007 fiscal year, the City's Public Financing Authority issued $8,085,000 in water revenue bonds, series 2006 for the purpose of providing long-term financing for the water treatment plant project of the City. The Fortuna Public Financing Authority entered into an installment sale agreement with the City whereby the City agreed to pay debt service on the bonds in exchange for financing.
The installment sale agreement between the City and its Public Financing Authority have been eliminated from these financial statements. The revenue bonds bear interest at rates from 3.375% to 5.0% and are payable each April 1 and October 1 through 2037. The bonds are secured by a pledge of the water system net revenues. These bonds were refunded by the Water Revenue Refunding Bonds, Series 2017.
Wastewater Revenue Bonds - During the 2007 fiscal year, the City's Public Financing Authority issued $13,820,000 in wastewater revenue bonds, series 2006 for the purpose of providing long-term financing for the wastewater treatment plant project of the City. The Fortuna Public Financing Authority entered into an installment sale agreement with the City whereby the City agreed to pay the debt service on the bonds in exchange for the financing. These bonds were refunded by the Wastewater Revenue Refunding Bonds, Series 2017.
Wastewater Revenue Refunding Bonds, Series 2017 - In November 2017, the City issued $8,740,000 in Wastewater Revenue Refunding Bonds, Series 2017 with interest rates ranging from 2.0% to 5.0%. The proceeds were used to refund the $11,010,000 of outstanding 2007 Wastewater revenue bonds which had interest rates ranging from 3.25% to 5.0%.
The net proceeds of $10,999,950 from the Wastewater Revenue Refunding Bonds, Series 2017 (including a $1,394,652 premium and after payment of $263,273 in underwriting fees and other issuance costs) were used to redeem the refunded bonds soon thereafter. The City refunded the 2007 Wastewater revenue bonds to obtain an economic gain (difference between the present value of debt service payments on the old and new debt) of $1,664,447.
- 33-
City of Fortuna
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2021
NOTE 4 - DETAILED NOTES ON ALL FUNDS (continued)
E. Long-Term Debt (continued)
Future debt service in the Wastewater Revenue Refunding Bonds, Series 2017 is as follows:
Period Ending Principal Interest Total Service
10/1/2021 $ 340,000 $ 365,319 $ 705,319
10/1/2022 350,000 351,719 701,719
10/1/2023 365,000 337,719 702,719
10/1/2024 375,000 322,469 697,469
10/1/2025 395,000 303,719 698,719
10/1/2026 415,000 283,969 698,969
10/1/2027 440,000 263,219 703,219
10/1/2028 460,000 241,219 701,219
10/1/2029 485,000 218,219 703,219
10/1/2030 510,000 193,969 703,969
10/1/2031 535,000 168,469 703,469
10/1/2032 560,000 141,719 701,719
10/1/2033 585,000 113,719 698,719
10/1/2034 615,000 84,469 699,469
10/1/2035 635,000 65,250 700,250
10/1/2036 670,000 33,500 703,500
7,735,000 3,488,663 11,223,663
Water Revenue Refunding Bonds, Series 2017 - In November 2017, the City issued $5,405,000 in Water Revenue Refunding Bonds, Series 2017 with interest rates ranging from 2.0% to 5.0%. The proceeds were used to refund the $6,750,000 of outstanding 2007 Water revenue bonds which had interest rates ranging trom bonds to obtain an economic gain (difference between the present value of debt service payments on the old and new debt) of $1,045,437.
- 34-
City of Fortuna
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2021
NOTE 4 - DETAILED NOTES ON ALL FUNDS (continued)
E. Long-Term Debt (continued)
Future debt service in the Water Revenue Refunding Bonds, Series 2017 is as follows:
Period Ending Principal Interest Total
10/1/2021 $ 210,000 $ 193,725 $ 403,725
10/1/2022 220,000 185,325 405,325
10/1/2023 225,000 176,525 401,525
10/1/2024 240,000 165,275 405,275
10/1/2025 250,000 153,275 403,275
10/1/2026 265,000 140,775 405,775
10/1/2027 275,000 127,525 402,525
10/1/2028 290,000 113,775 403,775
10/1/2029 305,000 99,275 404,275
10/1/2030 320,000 87,075 407,075
10/1/2031 335,000 74,275 409,275
10/1/2032 345,000 60,875 405,875
10/1/2033 360,000 47,075 407,075
10/1/2034 370,000 36,275 406,275
10/1/2035 380,000 24,713 404,713
10/1/2036 395,000 12,838 407,838
4,785,000 1,698,600 $ 6,483,600
Capital Lease and Loan Obligations - In fiscal year 2016, the City entered into two capital leases and a loan agreement with PG&E for the purpose of purchasing computer software, police vehicles and installation of a LED lighting system for an aggregate amount of $370,344. The leased equipment and lighting system have been capitalized by the City. The PG&E loan bears no interest. Future debt service is as follows:
Future Minimum Future Loan
Year Ending June 30, Lease Payments Payment
$ $ 16,218
- 8,110
Thereafter
Total future minimum lease payments 24,328
Less amount representing interest
Net present value future minimum payments $ 24,328
- 35-
City of Fortuna
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2021
NOTE 4 - DETAILED NOTES ON ALL FUNDS (concluded)
E. Long-Term Debt (concluded)
Changes in Long-term liabilities - Long-term debt activity for the 2021 fiscal year was as follows:
Beginning Ending Due Within
Governmental Type Balance Additions Reductions Balance One year PGE. Loan $ 40,547 $ 16,219 $ 24,328 $ 16,218
Compensated absences 262,160 85,947 348,107
Total $ 302,707 $ 85,947 $ 16,212 $ 372,435 16,218
Beginning Ending Due Within
Business Type Balance Additions Deductions Balance One year 2017 Water Bonds $4,985,000 $ $ 200,000 $ 4,785,000 $ 210,000 2017 Wastewater Bonds 8,055,000 320,000 7,735,000 340,000 Bond premiums 1,766,778 64,245 1,702,533 64,245
Total $14,806,778 $584,245 $14,222,533 614,245
Compensated Absences - It is the government's policy to permit employees to accumulate earned but unused vacation and sick leave benefits. There is a liability for a portion of unpaid accumulated sick leave since the City does have a policy to pay certain amounts when certain employees separate from service with the City.
All vacation and sick leave is accrued when incurred in the government-wide financial statements. The liability for vacation and sick leave is recorded in the fund financial statements only when immediately due and payable, such as amounts that arise from employee retirements.
Governmental Business-Type
Activities Activities Totals
Current portion $ - 7,939 $ 7,939
Non-current portion 348,107 30,304 378,411
Total 348,107 38,243 386,350
Governmental Business-Type
Activities Activities Totals
Beginning balance $ 338,796 $ 32,947 $ 371,743
Additions 14,586 5,296 19,882
Deletions (5,275) (5,275)
Ending Balance $ 348,107 38,243 386,350
NOTE 5 - OTHER INFORMATION
A. Risk Management
The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; and natural disasters for which the City carries insurance. The City is a member of the Redwood Empire Municipal Insurance Fund, a joint powers authority, which provides joint protection programs for public entities covering automobile, general liability, errors and omission losses, property and workers compensation claims. Under the program, the City has a $10,000 general liability retention limit similar to a deductible with the Fund being responsible for losses above that amount up to $500,000. - 36 -
City of Fortuna
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2021
NOTE 5 - OTHER INFORMATION (continued)
A. Risk Management (concluded)
The Fund carries excess liability coverage to a total of $40 million in excess of its $500,000 retention limit per occurrence through the California Joint Powers Risk Management Authority and its excess insurers.
The Fund covers workers compensation claims up to its self-insurance limit of $1 million. A purchased excess policy insutes the Fund for an additional $1 million to provide aggregate coverage of up to $2 million per claim. The City pays an annual premium to the Fund; the City may share in any surplus revenues or may be required to pay additional assessments based upon the Fund's operating results.
The Fund also provides property coverage up to $300 million per occurrence. Financial statements of the JPA Fund may be obtained from their administrative offices located at 414 W. Napa Street, Sonoma, California 95476. Liabilities of the City are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. Liabilities include an amount for claims that have been incurred but not reported (IBNRs). The result of the process to estimate the claims liability is not an exact amount as it depends on many complex factors, such as inflation, changes in legal doctrines, and damage awards. Accordingly, claims are reevaluated periodically to consider the effects of inflation, recent claim settlement trends (including frequency and amount of pay-outs), and other economic and social factors. The estimate of the claims liability also includes amounts for incremental claim adjustment expenses related to specific claims and other claim adjustment expenses regardless of whether allocated to specific claims.
Estimated recoveries, for example from salvage or subrogation, are another component of the claims liability estimate. Settlements have not exceeded coverage for each of the past three fiscal years.
B. Contingencies and Commitments
Litigation - The City is involved in litigation incurred in the normal course of conducting City business. City management believes that, based upon consultation with its counsel, these cases, in the aggregate, are not expected to result in a material adverse financial impact on the City.
C. Jointly Governed Organizations
Jointly governed organizations are legal entities or other organizations that result from a contractual arrangement and that are owned, operated, or governed by two or more participants as a separate and specific activity subject to joint control in which the participants retain an ongoing financial interest or ongoing financial responsibility. The City is a participant in the following organizations:
Redwood Empire Municipal Insurance Fund - The City is a member of the Insurance Fund. The Fund, under the terms of a Joint Powers Agreement with the City and several other cities and governmental agencies, provides insurance coverage for general liability, automobile liability, and workers compensation claims.
Under the arrangement, the Fund purchases liability, automobile liability, and workers compensation insurance and charges participating cities and governmental agencies in amounts planned to match expenses of insurance premiums, estimated payments resulting from self-insurance programs, and operating expenses. The City's obligations are limited to contributions to pay for related insurance premiums.
D. Other Post-Employment Benefits
The City provides no post-employment benefits other than those associated with the Public Employees Retirement System.
- 37 -
City of Fortuna
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2021
NOTE 5 - OTHER INFORMATION (continued)
E. Public Employee Pension Plans
Plan Description - The plans are a cost-sharing multiple-employer defined benefit pension plan administered by the California Public Employees Retirement System (CalPERS). The CaPERS is governec y a 13 member Board of Administration with six elected members, three appointed members and four e officio members, who include the State Treasurer, the State Controller, the Director of the California Department of Human Services, and a designee of the State Personnel Board Benefits Provided - The CalPERS provides retirement, disability and death benefits. Retirement benefits are defined as 2.5 percent of the employees final 12 months average compensation times the employee's years of service (2.0 percent for safety employees) Employees with 10 years of continuous service are eligible to retire at age 55 (age 50 for safety employees) Employees are eligible for service-related disability benefits regardless of the length of service. Five years of service is required for non-service-related disability eligibility. Disability benefits are determined in the same manner as retirement benefits but are payable immediately without an actuarial reduction. Pre-retirement death benefits equal an employee's final full- year salary. Both plans provide for a 2 percent Cost of Living Adjustment (COLA). The public safety plan is closed to new entrants.
Contributions - Section 20814 of the California Public Employees' Retirement Law (PERL) requires that the employer contribution rates for all public employees be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through the CalPERS annual actuarial valuation process. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The employer is required to contribute the difference between the actuarially determined rate and the contribution rate of employees.
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions - At June 30, 2021, the City reported a liability of $11,046,631 for its proportionate share of the net pension liability for all plans. The net pension liability was measured as of Tune 30. 2020, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2019. The City's proportion of the net pension liability was based on a projection of the City's long-term share of contributions to the pension plan relative to the projected contributions of all participating governments, actuarially determined. At June 30, 2021, the City' proportion was 0.10153 percent compared to 0.09927 at June 30, 2020. For the June 30, 2021 fiscal year the City recognized pension expense of $1,877,117. At June 30, 2021, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
Deferred Deferred
Outflows of Inflows of
All Plans Resources Resources
Pension contributions subsequent to the measurement date 1,486,308 Differences between actual and expected experience 694,234 60,526
Changes in assumptions
Net differences between projected and actual earnings
on plan investments 289,856
Change in employer's proportion 181,003 51,660
Change in proportions and differences between actual
contributions and proportionate share of contributions 44,140 256,102 Total 2,695,541 $ 368,295
- 38 -
City of Fortuna
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2021
NOTE 5 - OTHER INFORMATION (continued)
E. Public Employee Pension Plans (continued)
The $1,486,308 reported as deferred outflows of resources is related to pensions from City contributions made subsequent to the measurement date and will be recognized as a reduction of the net pension liabilit in the fiscal year ended June 20, 2022. Other amounts repotted as deferred outflows of resources anc deferred inflows of resources related to pensions will be recognized in pension expense as follows:
Deferred Outflows
(Inflows) of
Year Ending June 30, Resources
2022 131,920
2023 324,674
2024 243,085
2025 141,259
2026
Thereafter
Total 840,938
Actuarial Assumptions - For the measurement period ended June 30, 2020, the total pension liability was determined by rolling forward the June 30, 2019 total pension liability. The June 30, 2020 total pensios iability was based on the following actuarial methods and assumptions Valuation Date June 30, 2019
Measurement Date June 30, 2020
Measurement Period July 1, 2019 to June 30, 2020
Actuarial Cost Method Entry-Age Normal Cost Method
Actuarial Assumptions:
Discount Rate* 7.15%
Inflation 2.50%
Salary Increases Varies by Entry Age and Service
Mortality Rate Table Delived using CalPERS membership data for all funds Post Retirement Benefit Contract COLA up to 2.50% until purchasing power The mortality table used was developed based on CalPERS' specific data. The table includes 15 years of mortality improvements using Society of Actuaries Scale 90% of scale MP 2016. For more details on this table, please refer to the December 2017 experience study report (based on CaPERS demographic data from 1997 to 2015) that can be found on the CaPERS website.
Discount Rate - The discount rate used to measure the total pension liability was 7.15% for each Plan. To determine whether the municipal bond rate should be used in the calculation of a discount tate for each plan, CaPERS stress tested plans that would most likely result in a discount rate that would be different from the actuarially assumed discount rate. Based on the testing, none of the tested plans run out of assets.
Therefore, the current 7.15 percent discount rate is adequate and the use of the municipal bond rate calculation is not necessary. The long term expected discount rate of 7.15 percent will be applied to all plans in the Public Employees' Retirement Fund (PERF). The stress test results are presented in a detailed report called "GASB Crossover Testing Report" that can be obtained from the CaPERS website under the GASB - 39 -
City of Fortuna
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2021
NOTE 5 - OTHER INFORMATION (continued)
E. Public Employee Pension Plans (concluded)
In determining the long-term expected rate of return, CaPERS took into account both short-term and long- term market return expectations as well as the expected pension fund (PERF) cash flows. Using historical returns of all the Public Employees Retirement Funds' asset classes (which includes the agent plan and two cost-sharing plans or PERF A, B, and C funds), expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11-60 years) using a building-block approach.
Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each PERF fund. The expected rate of return was set by calculating the single equivalent expected return that arrived at the same present value of benefits of cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equivalent to the single equivalent rate calculated above and rounded down to the nearest one quarter of one percent.
The table below reflects the long-term expected real rate of return by asset class. The rate of return was calculated using the capital market assumptions applied to determine the discount rate and asset allocation.
These rates of return are net of administrative expenses New Strategic Real Return Real Return
Asset Class (*) Allocation Years 1-10 (1) Years 11+ (2) Global Equity 5000% 4.80% 5.98%
Global Fixed Income 28.0% 1.00% 2.62%
Inflation Sensitive 0.0% 0.77% 1.81%
Private Equity 8.0% 6.30% 7.23%
Real Estate 13.0% 3.75% 4.93%
Liquidity 1.0% 0.00% (0.92)%
Total 100%
(*) In the System's CAFR, Fixed Income is included in Global Debt Securities; Liquidity is included in Short-term Investments; Inflation Assets are included in both Global Equity Securities and Global Debt Securities. (1) An expected inflation of 2.0% used for this period. (2) An expected inflation of 2.92% used for this period.
Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate - The following presents the City's proportionate share of the net pension liability for each Plan, calculated using the discount rate for cach Plan, as well as what the City's proportionate share of the net pension liabilit would be if it were calculated using a discount rate that is i-percentage point lower of 1-percentage poin higher than the current rate:
All Plans
1% Decrease 6.15%
Net Pension Liability $16,550,322
Current Discount Rate 7.15%
Net Pension Liability $11,046,631
1% Increase 8.15%
Net Pension Liability $6,512,636
Pension Plan Fiduciary Net Position - Detailed information about each pension plan's fiduciary net position is available in the separately issued CaPERS financial reports. - 40 -
City of Fortuna
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2021
NOTE 5 - OTHER INFORMATION (continued)
F. Restricted Net Position and Non-spendable Fund Balances Restricted Net Position
The $3,557,241 restricted amount for debt service, affordable housing, streets and other in the governmenta. activities statement of net position represents amounts to be used only for specific purposes and for which indictions ate my lased by lave, formal efteenses. the the goved fen busine primarily tilate to bossin, spendable net resources in the wastewater and water funds restricted for debt service.
Non-spendable Fund Balances
The non-spendable fund balances in the governmental fund types represent amounts not available for immediate use to pay current liabilities and consist of:
Non-spendable Amounts General Fund Nonmajor Funds
Prepaid items 3,968
Total 3,968 KA
G. Successor Agency Trust for Assets of Former Redevelopment Agency The Dissolution Process
On December 29, 2011, the California Supreme Court upheld Assembly Bill 1X26 (the Bill) that provides for the dissolution of all redevelopment agencies in the State of California. This action impacted the financial reporting entity of the City of Fortuna that previously had reported a redevelopment agency within the financial reporting entity of the City as a blended component unit. The bill provides that upon dissolution of a redevelopment agency, either the city or another governmental unit of local government will agree to serve as the successor agency to hold assets until they are distributed to other units of State and local government. The City Council of the City of Fortuna elected to have the City become the Successot Agency for the former redevelopment agency and to become the housing successor for the agency.
After enactment of the law, which occurred on June 28, 2011, redevelopment agencies in the State of California cannot enter into new projects, obligations or commitments. Subject to the control of a newly established Oversight Board, remaining assets can only be used to pay enforceable obligations in existence at the date of dissolution (including the completion of any unfinished projects that were subject to legally enforceable contractual commitments).
In future fiscal years, successor agencies will only be allocated revenues in the amount that is necessary to pay the estimated annual installment payments on enforceable obligations of the former redevelopment agency until all enforceable obligations of the prior agency have been paid in full and all assets have been liquidated.
The Bill directs the State Controller of the State of California to review the propriety of any transfers of assets between the redevelopment agencies and other public bodies that occurred after January 1, 2011. If the public body that received such transfers is not contractually committed to a third party for the expenditure or encumbrance of those assets, the State Controller is required to order the available assets to be transferred to the public body designated as the Successor by the Bill.
Management believes, in consultation with legal counsel, that the obligations of the former redevelopment agency due to the City (including the amounts disallowed by the State Department of Finance) and others are valid enforceable obligations payable by the successor agency trust under the requirements of the Bill. - 41 -
City of Fortuna
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2021
NOTE 5 - OTHER INFORMATION (continued)
G. Successor Agency Trust for Assets of Former Redevelopment Agency (continued) The City's position on these issues is not a position of settled law and there is considerable legal uncertainty regarding these issues. It is reasonably possible that a legal determination may be made at a later date by an appropriate judicial or other authorized body that would resolve any of the dissolution matters unfavorable to the City.
In accordance with the timeline set forth in the Bill (As modified by the California Supreme Court on December 29, 2011) all redevelopment agencies in the State of California were dissolved and ceased to operate as a legal entity as of February 1, 2012.
Enforceable Obligations
2007 Revenue Bonds - Successor Agency Obligations
The City and its former component unit redevelopment agency entered into a loan agreement with the Fortuna Public Financing Authority (also a component unit of the City), dated October 1, 2007, wherein the Authority sold $17,500,000 in its revenue bonds, series 2007. From the sale of the Authority's Revenue bonds, $13,280,000 was loaned to the component unit redevelopment agency and $4,220,000 was loaned to the City. The loans receivable and payable between the City and the City's former redevelopment agency and the City's component unit Financing Authority have been eliminated from the accompanying financial statements.
From the bond proceeds, the former redevelopment agency deposited $2,525,000 into an Escrowed Project Fund Account until October 15, 2010, of the escrow bonds which bonds are defined as the bonds maturing November 1, 2038 with an interest rate of 4.9 percent. On October 15, 2010 the Trustee shall transfer all amounts then on deposit in the Escrowed Project Fund to the Principal Fund, to be applied to the mandatory redemption on November 1, 2010 of Escrow Bonds pursuant to Section 4.07 of the Trust Agreement. Notwithstanding the foregoing, the former Agency may postpone such redemption to any later date identified in a certificate of the former Agency which sets forth the new date for the transfer of amounts in the Escrowed Project Fund to the Principal Fund to be used to redeem Escrow Bonds pursuant to Section
4.07 of the Trust Agreement and which is accompanied by cash in an amount which is certified by the former Agency as sufficient, together with the earnings thereon, to pay interest on the portion of the Escrow Bonds which represent the funds then on deposit in the Escrowed Project Fund from November 1, 2010 to the redemption date as identified in such certificate of the Agency. The former Agency exercised its option to postpone this redemption until November 1, 2011. The redemption of the $2,525,000 was completed in fiscal 2014 by the Successor Agency.
The 2007 revenue bonds mature each November 1, commencing November 1, 2008 through 2038, bear interest at rates from 3.75 to 5.0 percent and consist of $5,365,000 in serial bonds, $4,110,000 in term bonds due November 2031, $2,525,000 in term bonds due Novembet 1, 2038 (the escrow bonds), and $5,500,000 in term bonds due November 1, 2038. The bonds are subject to early redemptions from certain prepayments, bonds maturing on or after November 1, 2018 are subject to optional early redemption, the escrow bonds are subject to mandatory early redemption on November 1, 2010 and the term bonds maturing November 1, 2031 and 2038 are subject to mandatory sinking fund redemptions on or after November 1, 2024 and 2032, respectively.
The former redevelopment agency had pledged future incremental property tax revenues to repay its $13,060,000 share of the 2007 revenue bonds. The agency's share of the revenue bonds was payable solely from the pledged tax increment revenues and from certain trust accounts held by the bond trustee. Total principal and interest remaining on the Successor Agency's share of the bonds is $19,798,835. These bonds were refunded by the Tax Allocation Refunding Bonds, Series 2018. - 42-
City of Fortuna
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2021
NOTE 5 - OTHER INFORMATION (continued)
G. Successor Agency Trust for Assets of Former Redevelopment Agency (continued) Successor Agency Tax Allocation Refunding Bonds, Series 2018 In February 2018, the City issued $8,635,000 in Tax Allocation Refunding Bonds, Series 2018 with interest rates ranging from 2.0% to 5.0%. The proceeds were used to refund the $9,760,000 of outstanding 2007 Revenue bonds which had interest rates tanging from 3.75% to 5.0%. The net proceeds of $10,075,743 from the Tax Allocation Refunding Bonds, Series 2018 (including a $303,756 premium and after payment of $367,169 in underwriting fees and other issuance costs) were used to redeem the refunded bonds soon thereafter. The City refunded the 2007 Revenue bonds to obtain an economic gain (difference between the Pas entordie of alb ding bend, Senis on the is and new deby of 1,451,235. Future debr scvice in the Period Ending Principal Interest Debt Service
11/1/2021 $ 265,000 $ 267,688 $ 532,688
11/1/2022 280,000 262,388 542,388
11/1/2023 295,000 255,388 550,388
11/1/2024 295,000 248,013 543,013
11/1/2025 320,000 233,263 553,263
11/1/2026 340,000 226,863 566,863
11/1/2027 360,000 220,063 580,063
11/1/2028 390,000 202,063 592,063
11/1/2029 420,000 182,563 602,563
11/1/2030 455,000 161,563 616,563
11/1/2031 495,000 138,813 633,813
11/1/2032 520,000 123,963 643,963
11/1/2033 545,000 108,363 653,363
11/1/2034 560,000 92,013 652,013
11/1/2035 580,000 75,213 655,213
11/1/2036 600,000 57,813 657,813
11/1/2037 615,000 39,063 654,063
11/1/2038 635,000 19,844 654,844
$ 7,970,000 2,914,931 $ 10,884,931
Loan City of Fortuna
On November 1, 2013, the City received from the State Department of Finance (DOF) a Finding of Completion Letter as regards the Successor Agency to the City's former redevelopment agency that had been dissolved effective Februaty 1, 2012. The DOF letter authorized the City to request a finding be made by the Oversight Board to the Successor Agency that the City's loan agreements between the former redevelopment agency and the City be qualified as enforceable obligations of the Successor Agency under the laws governing the dissolution of the former agency. In addition, there is a requitement that the accumulated and unpaid interest on any such loans be recalculated using a DOF specified method, that any future repayments, if approved, are to be made subject to a specified formula, and that there will be amounts available pursuant to the formula that will enable the repayments to be made. - 43 -
City of Fortuna
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2021
NOTE 5 - OTHER INFORMATION (continued)
G. Successor Agency Trust for Assets of Former Redevelopment Agency (concluded) In addition, all such loan agreements, recalculations of interest, and formula-based repayments, are subject to approval of the Successor Agency's Oversight Board and the DOF. The DOF had initially denied repayment schedule was as follows:
Year Ending June 30, Principal Interest Total
2022 $ 94,339 $ 11,506 $ 105,845
2023 293,807 6,193 300,000
2024-2030 1,675,074 84,859 1,759,933
Total 2,063,220 102,558 2,165,778
The degree to which the above repayment schedule will be realized by the Successor Agency is not determinable at this time.
Changes in Long-Term Enforceable Obligations
Changes in long-term enforceable obligations for the year ended June 30, 2021 were:
Beginning Ending Due Within
Private Purpose Trust Balance Additions Deductions Balance One year 2018 Tax Allocation Bonds $ 8,220,000 $ $ 250,000 $ 7,970,000 $ 265,000 278,443 - 10,126 268,317 10,125
2,301,681 238,461 2,063,220
$10,800,124 $ 498,587 $10,301,537 275,125
NOTE 6 - CONTINGENCY - CORONAVIRUS PANDEMIC
In December 2019, an outbreak of a novel strain of coronavirus (COVID-19) began to spread among various countries, including the United States. On March 11, 2020, the World Health Organization characterized COVID-19 as a pandemic. In addition, multiple jurisdictions in the U.S., including California, declared a state of emergency and issued shelter-in-place orders in response to the outbreak. The immediate impact to the City's operations includes restrictions on employees' and volunteers' ability to work, and it is anticipated that the impacts from this pandemic will continue for some time. As of the report date, the financial impact of the coronavirus outbreak cannot be measured. - 44-
REQUIRED SUPPLEMENTAL
INFORMATION SECTION
City of Fortuna
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For the fiscal year ended June 30, 2021
2021
- Variance
With Final
Budgeted Amounts Budget
Original Final Actual Over (Under)
REVENUES
Property tax 476,500 476,500 $ 611,929 $ 135,429
Sales tax 2,980,000 2,980,000 4,295,714 1,315,714
Other taxes 25,000 25,000 28,551 3,551
Transient occupancy taxes 475,000 475,000 755,125 280,125 Property tax in lieu VLF 1,166,000 1,166,000 1,305,039 139,039 Licenses and permits 916,022 916,022 777,428 (138,594)
Fines and forfeitures 48,000 48,000 30,773 (17,227)
Intergovernmental 591,733 591,733 660,218 68,485
Investment earnings 230,536 230,536 219,283 (11,253)
Charges for services 427,700 427,700 449,270 21,570
Miscellaneous 59,500 59,500 277,821 218,321
Total revenues 7,395,991 7,395,991 2,411,151 2,015,160
EXPENDITURES
General government 1,657,180 1,657,180 1,622,417 34,763 Public safety 3,983,989 3,983,989 4,120,076 (136,087)
Public works and streets 609,218 609,218 487,883 121,335 Parks and recreation 1,424,303 1,027,191
Business development and housing
Debt service:
Principal
Interest
Total expenditures 7,674,690 7,674,690 7,257,567
Excess (deficiency) of revenues
over expenditures (278,699) (278,699) 2,153,584 2,432,283
OTHER FINANCING SOURCES (USES)
Transfers in 883,704 883,704 338,549 (545,155)
Transfers out (913,704) (913,704) (486,116) 427,588
Total other financing sources and (uses) (30,000) (30,000) (147,567) (117,567) Net change in fund balance (308,699) $ (308,699) 2,006,017 $ 2,314,716 Fund balance - beginning 8,503,000
Prior period adjustment 76,636
Fund balance - beginning (restated) 8,579,036
Fund balance - ending $ 10,585,653
- 45 -
City of Fortuna
CITY HOUSING FUND
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For the Fiscal Year Ended June 30, 2020
2021
Variance
With Final
Budgeted Amounts Budget
Original Final Actual Over (Under)
REVENUES
Property tax $ - $ $ - $
Sales tax -
Other taxes - - -
Licenses and permits - -
Fines and forfeitures - -
Intergovernmental -
Investment earnings 500 500 464 (36)
Charges for services -
Miscellaneous 48,884 48,884 50,000 1,116
Total revenues 49,384 49,384 50,464 1,080
EXPENDITURES
General government - - -
Public safety - - -
Public works and streets - - -
Parks and recreation - -
Business development and housing - - -
Debt service:
Community development 25,000. 25,000 - 25,000
Recreation and leisure
Total expenditures 25,000 25,000 25,000
Excess (deficiency) of revenues
over expenditures 24,384 24,384 50,464 26,080
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total other financing sources and (uses) -
Net change in fund balance 24,384 $ 24,384 50,464 $ 26,080 Fund balance - beginning 163,904
Fund balance - ending $ 214,368
- 46 -
City of Fortuna
SCHEDULE, OF THE LOCAL GOVERNMENT'S PROPORTIONATE
SHARE OF THE NET PENSION LIABILITY - ALL PLANS
June 30, 2021
Miscellaneous Risk Pool
Eiscal Year End 2021 2020 2019 2018 2017 2016 2015
Measurement Date 2020 2019 2018 2017 2016 2015 2014
Proportion of the net pension liability 0.05737% 0.05650% 0.05732% 0.05653% 0.05635% 0.05626% 0.04767% Proportion share of the net pension liability $ 6,242,335 $ 5,789,728 $ 5,523,979 $ 5,606,420 $ 4,875,960 $ 3,861,523 $ 2,966,501 Covered - employee payroll $ 2,354,031 $ 2,259,591 $ 2,183,738 $ 1,961,439 $ 1,956,851 § 1,916,943 $ 1,766,612 oportionate share of the net pension liabili
i percentage of covered-employee payro 149.85% 145.84% 144.23% 164.81% 143.54% 117.12% 92.41% an fiduciary net position as a percentay
the total pension liabil 42.44% 42.84% 42.91% 42.27% 42.67% 45.58% 43.93% Safety Risk Pool
Fiscal Year End 2021 2020 2019 2018 2017 2016 2015
Measurement Date 2020 2019 2018 2017 2016 2015 2014
Proportion of the net pension liability 0.04416% 0.04277% 0.04322% 0.04151% 0.04146% 0.04050% 0.03896% Proportion share of the net pension liability $ 4,804,296 $ 4,382,118 4,164,545 $ 4,117,086 $ 3,587,924 $ 2,779,976 $ 2,424,153 Covered - employee payroll $ 1,811,735 $ 1,710,234 $ 1,646,327 $ 1,440,387 $ 1,439,929 $ 1,380,040 $ 1,443,632 Proportionate share of the net pension liability
as percentage of covered-employee payroll 115.33% 110.39% 108.73% 121.02% 105.63% 84.32% 75.51% Pian fiduciary net position as a percentage
of the total pension liability 32.66% 32.42% 32.35% 31.04% 31.39% 32.82% 35.89% NOTES TO SCHEDULE:
Fiscal year 2015 was the 1st year of implementation.
- 47-
City of Fortuna
SCHEDULE OF CONTRIBUTIONS - ALL PLANS
June 30, 2021
Fiscal Year End 2021 2020 2019 2018 2017 2016 2015
Miscellaneous Risk Pool
Contractually required contribution
actuarially determined) $ 230,044 $ 663,266 $ 771,079 $ 510,867 $ 451,381 $ 427,550 S 352,387 ontributions in relation to the actuariall
determined contributions (930,044) (663,266) (771,079) (510,867) (451,381) (427,550) (352,387) Contribution deficiency (excess) $
Covered - employee payroll $ 2,363,708 $ 2,354,031 $ 2,259,591 $ 2,183,738 $ 1,961,439 $ 1,956,851 $ 1,916,943 Contributions as a percentage
of covered-employee payroll 39.35% 28.18% 34.12% 23.39% 23.01% 21.85% 18.38% Safety Risk Pool
Contractually required contribution
(actuarially determined) $ 556,264 $ 468,825 $ 544,179 $ 369,424 $ 322,559 $ 296,164 $ 250,264 Contributions in relation to the actuarially
determined contributions (556,264) (468,825) (544,179) (369,424) (322,559) (296,164) (250,264 Contribution deficiency (excess)
Covered - employee payroll $ 1,783,149 $ 1,811,735 $ 1,710,234 $ 1,646,327 $ 1,440,387 $ 1,439,929 $ 1,380,040 Contributions as a percentage
of covered-employee payroll 31.20% 25.88% 31.82% 22.44% 22.39% 20.57% 18.13% NOTES TO SCHEDULE:
Fiscal year 2015 was the 1st year of implementation.
- 48-
SUPPLEMENTAL SECTION
City of Fortuna
COMBINING BALANCE. SHEET
NONMAJOR GOVERNMENTAL FUNDS
June 30, 2021
Special Revenue
Assets
Cash and investments 68,609 $ 9,036 $ 286,316 $ 672,074 $ (20,749) $ 39,546 $ 108 $ 550,232 $ 313,070 $ 865,192 $ 2,783,43- Reccivables:
Accounts receivable
Notes receivable 1,000,808 1,379,982
Total assets $ 73,085 S 13,323 $ 286,316 $ 786,890 $ 12,790 ≤ 5,392 $ 108 ≤ 918,841 $ 313,070 $ 1,866,830 5 4.357,153 Liabilities
Liabilities
Accounts payable 53,892 $ 108 $ $ 70,024
Unearned revenue
Due to other funds 3,463
Total liabilities 12,882 5,399 108 73,487
Deferred inflows of resources
Long-term notes receivable 11,126 368,048 1,000,808 1,379,982 Fund balances
Restricted for:
Capital projects
CCC facility
Economic development 550,793 866,022 1,416,815
Public safety & streets 72,871 12,331 286,316 721,872 80,501 313,070 1,486,961 Debt service
Unrestricted (92) — 50,03 31300 806002 300307
Total fund balances 7287113331 286316 721,372 80,501
Total liabilities & fund balances $ 73,085 § 13,323 $ 286,316 $ 786,390 $ 12,790 S 5,392 S ≤ 80,501 ≤ 108 $ 218,841 $ 313,070 $ 1,866,830 $ 4,357,153 - 49-
City of Fortuna
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
June 30, 2021
Special Revenue
Assets
Cash and investments $ 227,708 $ 5,000 $ 78 $ (14,46+ $ (418,296) $ (41,453) $ (87,870) $ (11,077) $ 2,443,060 Receivables:
Accounts receivable 1,355,076
Notes receivable 1,379,982
Total assets.
Liabilities
Liabilities
Accounts payable 26 $ 78 $ 52,973 $ 712,359 $ 29,940$ 3,626 $ 869,026 Unearned revenue
Due to other funds 3,463
Total liabilities 26 78. 52,973 712,352 29,940 3,626 872,489 Deferred inflows of resources
Long-term notes receivable 1,379,982
Fund balances
Restricted for:
Capital projects
CCC facility
Economic development 227,682 1,619,497
Public safety & streets 1,486,961
Debt service
Unrestricted (67,437) (417,053) (41,453) (40,073) (1-+,703) (210,811) Total fund balances 227,682 5,000 - (67,437 - (17,053) _ (41,453) (40,073)_ (14,703) — 2,925,617 Total liabilities & fund balances 227,708 ≤ 5,000 ≤ 78 2 _ I (116) 3 065306 (1.463) I (1013) 3 2 1077 9 3.78,18 - 50-
City of Fortuna
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
lune 30, 2021
Special Revenue
Revenues
$ - $ $ $ 112,269 $ 129,018 276,193 $ 234,743 $ 146,403 $ $ 888,026 Intergovernmental
Property taxes
Charges for services 27,004 2,482 18,0+5 532,661 587,192 Special assessments
Interest 163 254 990 3,477 128 297 1,318 456 2,094 2,177 Miscellaneous 135 654,462 78,200 - 733,498
Total revenues 27,302 2,736 19,035 770,208 129,018 276,321 225,041 533,979 146,859 80,094 2,218,493 Espenditures
Current:
Public works & streets 70,817 69,246 1,018,589 118,241 394,457 200,000 37 6,727 1,878,114 Economic development 360,000 15,847 375,847
Housing
Sanitation and recycling 17,844 : • . • 17,844
Capical outlay
Debt service:
Principal
Interest
Total expenditures 17,844 70,817 62,240 1,018,589 118,241 394,457 200,000 360,037 6,727 15,847. 3,271,805 Excess (deficiency) of
revenues over expenditures 9,458 (61,081) (50,211) (248,381) 10,777 (118,136) 25,041 173,942 140,132 65,147. - (53,312) Other Financing Sources
(Uses)
Transfers in 118,136 118,136
Transfers out
Total other financing
sources (uses) 118,136 118,136
Net change in fund balances 25,041 173,942 140,132 65,147 61,824 Fund balances, July 1 55,460 376,851 172,238 800,875 2,838,860 Fund balances, June 30 80,501 550,793 § 313,070 2 ≤ 866,022 $ 2,903,68+ - 51-
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
June 30, 2021
Special Revenue
HOPS,
Rodeo, &
CDBG Household McClean
Unrestricted Waste _Small Parks Compliance Safe Routes.
Revenues
Intergovemmental $ 5,000 $ 439,097 $ 1,211,021 1,083,02 4,329,618 587,192
Charges for services
Special assessments
Interest 606 9,783
Miscellaneous 733,498
Total revenues 5,000 439,997 1,211,021 1.083,602 668,790 32,582 5,660,091 606
Expenditures
Current:
Public works & streets $25,626 1,130,655 614,641 47,285 4.096.321 Economic development 4,89+ 380,741
Public safety ..... 33,673 33,673
Sanitation and recycling 1,119,531 1,137,375
Capital outlay
Debt service:
Principal
Interest
Total expenditures 4,89+ 425,626 1,119,531 1,130.655 33,673 614,641 47,285 5,6-48,110 Escess (deficiency) of
G06 106 14,371 91,490 (+7,053) (33,673) _ 54,142 (14,703) 11,981 revenues over expendituses
ces
(Uses)
25,000 143,136
cing
25,000 143.136
Net change in fund balances GOG 100 14,371 91.490 (47,053) (8,073) — 54,149 (14,703) - 155,117 Fund balances, July 1 227.076 4,894 (14,371) (158,9227) (32,780) (94,222 2,770,530 Fund balances, June 30 $ 227,682 5,000 (67,437 ≤ (47,053) $ (41,453) ≤ (40,073) § $ (14,703) ≤ 2025,6+7 - 52-
City of Fortuna
INTEGRATED WASTE SPECIAL REVENUE FUND
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For the year ended June 30, 2021
Variance
With Final
Budgeted Amounts Budget
Original Final Actual Over (Under)
Revenues
Charges for services: $ 24,000 $ 24,000 $ 27,004 $ 3,004 Intergovernmental 5,000 5,000 (5,000)
Interest 163 163
: 135 135
Miscellaneous
Total revenues 29,000 29,000 27,302 (1,698)
Expenditures
Sanitation and recycling 30,124 30,124 17,844 12,280
Total expenditures 30,124 30,124 17,844 12,280
Excess (deficiency) of revenues
over expenditures (1,124) $ (1,124) 9,458$ 10,582
Fund balance - beginning 63,414
Fund balance - ending 72,872
- 53 -
City of Fortuna
STORM DRAIN MAINTENANCE SPECIAL REVENUE FUND
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For the year ended June 30, 2021
Variance
With Final
Budgeted Amounts Budget
Original Final Actual Over (Under)
Revenues
Charges for services: $ 46,000 $ 46,000$ 9,482 $ (36,518) Interest 254 254
Total revenues 46,000 46,000 2,736 (36,264)
Expenditures
Public works and streets 71,059 71,052 70,817 242
Total expenditures 71,059 71,059 70,817 242
Excess (deficiency) of revenues
over expenditures (25,059) (25,059) (61,081) (36,022)
Other financing sources (uses)
Transfers in (out) -
Net change in fund balance $ (25,059) $ (25,059) (61,081) $ (36,022) Fund balance - beginning 73,412
Fund balance - ending $ 12,331
- 54 -
City of Fortuna
DRAINAGE FACILITY SPECIAL REVENUE FUND
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For the year ended June 30, 2021
Variance
With Final
Budgeted Amounts Budget
Original Final Actual Over (Under)
Revenues
Charges for services: $ 24,000 $ 24,000 $ 18,045 $ (5,955) Interest 290 990
Total revenues 24,000 24,000 19,035 (4,965)
Expenditures
Sanitation and recycling - 69,246 (69,240)
Total expenditures - - 69,246 (69,246)
Excess (deficiency) of revenues
over expenditures 24,000 24,000 (50,211) (74,211)
Other financing sources (uses)
Transfers in (out) - - -
Net change in fund balance 24,000 $ 24,000 (50,211) $ (74,211) Fund balance - beginning 336,527
Fund balance - ending $ 286,316
- 55-
City of Fortuna
IRANSPORTATION SB325 SPECLAL, REVENUE FUND.
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For the Fiscal Yeat Ended June 30, 2020
Variance
With Final
Budgeted Amounts Budget
Original Final Actual Over (Under)
Revenues
Intergovernmental $ 126,000 126,000 $ 112,269 $ (13,731) Interest 4,000 4,000 3,477 (523)
Miscellaneous 625,000 625,000 654,462 29,462
Total revenues 755,000 755,000 770,208 15,208
Expenditures
Parks and recreation 1,008,000 1,008,000 1,018,589 (10,589) Total expenditures 1,008,000 1,008,000 1,018,589 (10,589) Excess (deficiency) of revenues
over expenditures (253,000) (253,000) (248,381) 4,619
Other financing sources (uses)
Transfers in
Transfers (out)
Total other financing sources (uses)
Net change in fund balance $ (253,000) $ (253,000) (248,381) 8 4,612 Fund balance - beginning 970,253
Fund balance - ending 721,872
- 56-
City of Fortuna
GAS TAX 2105 SPECIAL REVENUE FUND
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For the year ended June 30, 2021
Variance
With Final
Budgeted Amounts Budget
Original Final Actual Over (Under)
Revenues
Gas tax 2105 $ 64,052 $ 64,052 $ 61,763$ (2,289)
Gas tax 2106 48,560 48,560 46,974 (1,586)
Gas tax 2107 77,055 77,055 83,575 6,520
Gas tax 2107.5 3,000 3,000 3,000
102,100 80,881 (21219)
Gas tax 2103 102,100
Interest 1,500 1,500 128 (1,372)
Total revenues 296,267 296,267 276,321 (19,940)
Expenditures
Public works and streets 456,750 456,750 394,457 62,293 Total expenditures 456,750 456,750 394,457 62,293
Excess (deficiency) of revenues
over expenditures (160,483) (160,483) (118,136) 42,347
Other financing sources (uses)
Transfers in 118,136 118,136
Transfers (out)
Total other financing sources (uses) 118,136 118,136
Net change in fund balance (160,483) $ (160,483) - $ 160,483 Fund balance - beginning
Fund balance - ending $
- 57 -
City of Fortuna
RMRA-SB1 SPECIAL REVENUE FUND
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For the year ended June 30, 2021
Variance
With Final
Budgeted Amounts Budget
Original Final Actual Over (Under)
Revenues
Intergovernmental $ 207,683 $ 207,683 $ 224,743 $ 17,060 Interest 500 500 297 (203)
Total revenues 208,183 208,183 225,041 16,857
Expenditures
Public works & streets 200,000 200,000 200,000
Total expenditures 200,000 200,000 200,000
Excess (deficiency) of revenues
over expenditures 8,183 8,183 25,041 16,857
Other financing sources (uses)
Transfers in
Transfers (out)
Total other financing sources (uses)
Net change in fund balance 8,183 $ 8,183 25,041 $ 16,857 Fund balance - beginning 55,460
Fund balance - ending $ 80,501
- 58 -
City of Fortuna
UNRESTRICTED BUSINESS REVOLVING LOAN SPECIAL REVENUE FUND
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For the year ended June 30, 2021
Variance
With Final
Budgeted Amounts Budget
Original Final Actual Over (Under)
Revenues
Charges for service $ 24,000 $ 24,000 $ 532,661 $ 508,661 Interest 1,318 1,318
Total revenues 24,000 24,000 533,979 509,972
Expenditures
Economic development 20,000 20,000 360,037 340,037
Total expenditures 20,000 20,000 360,037 340,037
Excess (deficiency) of revenues
over expenditures $ 4,000 $ 4,000 173,942 $ 169,942
Fund balance - beginning 376,851
Fund balance - ending $ 550,793
- 59-
City of Fortuna
REGIONAL SURFACE TRANSPORTATION & HSIP SPECIAL, REVENUE FUND
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For the year ended June 30, 2021
Variance
With Final
Budgeted Amounts Budget
Original Final Actual Over (Under)
Revenues
Intergovernmental: $ 7,000 $ 7,000 $ 146,403 $ 139,403
Interest 456 456
Total revenues 7,000 7,000 146,859 139,859
Expenditures
Public works and streets 7,000 7,000 6,727 273
Total expenditures 7,000 7,000 6,727 273
Excess (deficiency) of revenues
over expenditures 140,132 140,132
Other financing sources (uses)
Transfers in
: :
Transfers (out)
Total other financing sources (uses)
Net change in fund balance $ 140,132 $ 140,132
Fund balance - beginning 172,938
Fund balance - ending $ 313,070
- 60 -
City of Fortuna
CDBG BUSINESS SPECIAL REVENUE FUND
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For the year ended June 30, 2021
Variance
With Final
Budgeted Amounts Budget
Original Final Actual Over (Under)
Revenues
Interest $ $ - $ 2,094 $ 2,094
Miscellaneous 20,000 20,000 78,900 58,900
Total revenues 20,000 20,000 80,994 60,994
Expenditures
Economic development 505,000 505,000 15,847 489,153
Total expenditures 505,000 505,000 15,847 489,153
Excess (deficiency) of revenues
over expenditures $ (485,000) $ (485,000) 65,147$ 550,147 Fund balance - beginning 800,875
Fund balance - ending 866,022
- 61 -
City of Fortuna
CDBG UNRESTRICTED SPECIAL REVENUE FUND.
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For the year ended June 30, 2021
Variance
With Final
Budgeted Amounts Budget
Original Final Actual Over (Under)
Revenues
Interest $ $ 606 $ 606
Total revenues - 606 606
Expenditures
Economic development 15,000 15,000 15,000
Total expenditures 15,000 15,000 15,000
Excess (deficiency) of revenues
over expenditures (15,000) $ (15,000) 606 $ 15,606
Fund balance - beginning 227,076
Fund balance - ending $ 227,682
- 62 -
City of Fortuna
RECYCLE GRANT SPECIAL REVENUE FUND
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For the year ended June 30, 2021
Variance
With Final
Budgeted Amounts Budget
Original Final Actual Over (Under)
Revenues
Intergovernmental $ 5,000 $ 5,000$
Interest
Total revenues 5,000 5,000 5,000
Expenditures
Economic development 4,824 (4,894)
Total expenditures - 4,894 (4,894)
Excess (deficiency) of revenues
over expenditures 5,000 5,000 106 (4,894)
Other financing sources (uses)
Transfers in -
Transfers (out) - -
Total other financing sources (uses) - - -
Net change in fund balance $ 5,000 $ 5,000 106 $ (4,894) Fund balance - beginning 4,894
Fund balance - ending 5,000
- 63-
STATISTICAL SECTION
Schedule 1
City of Fortuna
Net Position by Component
Ten Year Analysis
(Accrual basis of accounting)
Fiscal Years Ending June 30
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Governmental activities:
Net investment in capital assets under both
govermental and business type activities
and under primary govemment: $ 4,937,137 $ 4,602,401 $ 5,388,424 $ 6,750,054 $ 8,883,363 $11,846,993 $17,722,340 $ 17,997,022 $21,272,422 $ 22,938,620 Restricted
Debt Service 297,486 918,782 1,029,691 1,141,186 1,252,512 1,363,828 Capital projects 869,423 862,930 3,341,024 3,211,141 2,535,596 89 Affordable Housing 8,158,025 10,836,293 12,569,397 12.867,208 11,745,661 11,870,221 351,981 420,783 Streets 4,085,929 4,271,744 4,448,946 3.728.767 2.090.484 1.913,382 1,734,818 1,967,334 1,672,003 1,486,961 Economic development 3,240,785 1,128,676 1,075,228 1.240,613 2,648,818 2,782,407 1,409,696 1,649,497 Other purposes 272,359 85,255 168,719 229,962 10,774 10,558 Unrestricted 6,587,974 6,742,400 4,841,653 1.759,412 2.991.178 2,957,739 18,854,650 20,316,152 18,125,213 20,164,380 Total governmental activities net position: $27.579.695 $ 29,454.974 5 30,384,988 $ 31,058.226 S32,833,929 $35,280,724 $ 38,311.897 S40,280.508 $ 42,831,315 S46,660,241 Business-type activities:
Net investment in capital assets $20,049,565 $ 17,682,631 20,151,917 18,490,177 18,127,850 18,784,436 22,091,082 22,315,106 22,073,693 $22,436,735 Restricted
Debt Service 1,408,538 1.729,894 1,730,269 1,721,570 1,724,364 11723,124
Capital Projects 1,144,405 1,080,881 1,052,316 525,940
Other purposes 15.878,312
Unrestricted 12,783,281 14,826,409 16,665,027 18,282,153 18.962,159 18.007.098 18,512,484 19,360,266 _19.296,574 Total business-type activities: $35,385,789 $ 36,371,718 $ 37.760,911 $ 37,402,714 $38,134,367 $39,469,719 $40,098.180 S40,827,590 $41,433,959 S41.733.309 Primary Government - City-Wide Totals
Invested in capital assets, net of related debt $24,986,702 $ 22,285,032 $ 25,540,341 $ 25,240,231 $27,011,213 $30,631,429 $39,813,422 $40,312,128 $43,346,115 $45,375,355 Restricted
Debt Service 1,706,024 2,648,676 2,759,960 2,862,756 3,086,952 Capital Projects 1,144,405 1,950,304 1.915,246 3,866,964 2,535,596 89 Affordable Housing 8.158,025 10,836,293 12,569,397 12,867,208 11,870,221 351,981 420.783 Economic Development 3,240,785 1,128,676 1.075,228 1.240,613 2,782,407 1.409,696 1,649.497 Streets 4,085,929 4,271,744 4,448,946 3.728,767 1,913,382 1,734,818 1,967,334 1,672,003 1,486,961 Other purposes 272,359 85,255 168,719 229,962 10,558 36,861,748 38,328,836 37,485,479 Unrestricted 19,371,255 22,620,712 19,668,062 18,424,439 21.919,898 39,460,954 Total primary government net position: S62,965,484 $ 65,826,692 $ 68,145,899 $ 68,460,940 570,968,296 $74,750,443 $78.410,077 $81,108,098 $84,265,274$88,393,550 - 64 -
Schedule 2
City of Fortuna
Changes In Net Position
Accrual Basis of Accounting
Fiscal Years Ending June 30
Expenses: 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 $ 1,175,737 $ 1,030,061 $ 1,029,182 $ 1,685,735 $ 1,056,456 $ 1,171,423 $ 948,148 $ 1,023,535 $ 1,551,022 $ 1,622,797 3,055,758 3,074,104 3,249,432 3,152,904 3,071,641 3,613,537 4,054,483 4,673,569 4,901,665 4,171,065 Streets 911,990 1,289,043 605,649 843,015 664,188 2,117,875 3,677,131 1,369,760 2,594,420 4,071,600 1,177,797 1,158,679 1,102,183 1,187,394 1,221,248 1,247,103 966,252 1,291,958 1,201,330 1,027,191 Sanitation 15,671 14,760 20,403 38,710 43,095 25,147 606,909 577,716 204,152 414,414 253,282 18,770 161,368 95,573 94,393 75,724 310,856 -
670.685 147.974 139,148 130,067 73,164 111,894 76,131 976 enses 7,260,920 6.733.391 6.307,365 7,133,398 6.224,185 8,362.703 10,639,910 8,937,514 10,452,589 11,307,067 Business-type activities:
Water 1,372,233 1,438,707 1,840,193 1.896,253 2,206,878 2,213,797 2,754,457 3,265,841 2,820,380 2,963,179 Wastewater 3,132,473 2,980,990 2,958,764 3,082,638 3,331,929 3,391,969 3,980,231 4,099,072 4,213,456 4,691,028 Transit 191,602 219,358 250,901 268.291 344,951 306,147 318,957 332,764 352,824 369,082 Total business-type activities expenses 4,696,308 4,639,055 5,049,858 5,247.182 5,883,758 5.911.913 7,053.645 7,697,677 7.386,660 8.023.289 Total City govemment expenses S11,957,228 $11.372.446 $11,357.223 $12.380,580 $12,107,943 $ 14.274.616 $ 17,693,555 $16,635,191 $ 17,839,249 $ 19.330.356 Program Revenues:
Govemmental activities:
Charges for services:
General govemment $ 7525529463055382,856 339,963 $ 371,856 $ 360,154 $ - $ 75,115 - $ Public safety 431,240 427,063 522,289 542 634 504,948 575,304 44,667 44,610 30,773 Streets 115,718 65,891 108,685 115,493 83,551 75,645 796,693 760,656 742,421 777,428 Parks and recreation 600,358 543,820 510,088 551,930 458,292 421,856 814,528 865,276 697,775 1,036,462 Sanitation 32,005 15,390 27,464 35,865 53,873 23,039
Redevelopment and housing 257,472 211,338 452,314 472,132 434,634 442,268 Operating grants and contributions 663,264 508,059 612,583 854,800 650,242 758,046 Capital grants and contributions 314,001 405,942 655,015 3,457,829 996,076 3,574,696 4.956,839 2.237,448 4.407,521 5.007,997 Total govarnmental activities program revenues: 2.489,313 2,471,808 3,271,294 6,370,646 3,553,472 6,231,008 6.612.727 3,938.525 5,892,327 6,852,660 Business-type activities:
Charges for services: 2,430,314 2,301,442 2,319,601 2,621,238 2,394,356 2,398,729 2,504,339 Water 2,282,744 2,311,702 2,402,085
Wastewater 3,574,632 3,477,554 3,577,263 3,572,915 3.536.519 3,513,379 4,023,978 3,646,004 3,512,378 3,717,201 Transit 10,596 14,307 12,427 11,782 14,796 26,279 17,390 21,169 16,815 17,674 Operating grants and contributior 169,960 197,566 232,199 249,663 279,140 290,697 880,162 1,796,450 1,395,602 2,018,214 Capital grants and contribution 312.312 129.728 197,255 297,282 393,468 987,984 tal business-type activities programs revenu → 8350367 S 8102057 0.20152 12133080 1002800051717948 517542768 3 1857, 879 31323631 S1870028 tal City government program revent
- 65-
Schedule 2
City of Fortuna
Changes In Net Position
Accrual Basis of Accounting
Fiscal Years Ending June 30
Net(Expense)Revenue:
Governmental activities 5 1-75,88 14291892 1903800 1762982) -372213) 2.1202) 07198) -89,98) 450-282) 4154197) Business-type activities
Total City government $ (3.117.671) $ (2,769,781) $ (1,636.471) S 423,150 $ (1.928,463) $ (905.668) $ (3,538,060) $ (4,838,687) $ (4,623,398) $ (4.220,268) neral Revenues and Other Changes
Net Positic
Govemmental activities:
Taxes:
Property taxes $ 383,326 $ 733,373 $ 437,180 $ 486,032 $ 423,766 $ 419,613 $ 536,843 $ 485,385 $ 527,434 $ 611,929 Incremental property taxes 558,994
Sales taxes 1,474,983 1,476,941 1,479,645 1,585,939 1,834,956 2,271,213 3,369,282 3,397,522 3,504,126 4,295,714 Transient occupancy taxes 516,376 524,544 524.542 537,055 610,627 683,432 695,921 612,993 549,218 755,125 Other taxes 354,924 382,018 382,136 391.784 417,310 443,133 136,328 24,193 36,371 28,551 Property Tax in lieu VLF 1,004,360 987,510 1,001,193 1,026,709 1,050,708 1,062,434 1,111,193 1,166,134 1,251,984 1,305,039 Unrestricted investment eamings 312,779 20,296 21,344 38,713 98,452 8,917 77,605 323,693 311,147 230,087 Other general revenues 36,302 94,028 118.791 2,491,735 1.108,711 961,512 936,480 1,061,319 Transfers 125,559 6,517 1,254 10,723 10,597 10,559 22,478 (3,832) (5,691) (4,431) Extreardinary item: Dissolution of the Redevolopmant
agency of the City of Fortuna 56,745 2,032,150
Total governmental activities 4,824,348 6,257,377 3,966,085 6,568,690 4,446,416 4,899,301 7,058,361 6,967,600 7,111,069 8,283,333 Business-type activities
Unrestricted investment eamings
Transfers (125,559)
Total business-type activities (125,559)
Total City government $ 4,698.789 $ 6,250,860 $ 3,964,831 $ 6,557,967 $ 4,435,819 $ 4,888,742 $ 7,197,699 $ 7.536.712 $ 7.780,574 $ 8,348,544.
Change in net position:
Govemmental activities 52:371 $ 1.485.284 $ 1390,346 $ 5,805138 $ 1.7303 2215468 5 3028.168 5 1-9.411 2555,369 $ 3.29,326 Business-type activities 1,528,377
Total City government $ 1,581,118 $ 3.481,079 $ 2,328,360 $ 6,981.117 $ 2,507,356 $ 3,983.074 $ 3,659,639 $ 2,698,025 $ 3,157.176 $ 4,128,276 - 66 -
Schedule 3
City of Fortuna
Fund Balances - Governmental Funds
Ten Year Analysis
Fiscal Yar Ending une 30 2018 2019 2020 2021
2012 2013 2014 2017
General Fund
Reserved
Unreserved
Nonspendable 44,181 33,306 26,137 27,206 24,392 26,445 19,319 2,003 2,291 3,968 Restricted 1,018,028 860,840
Committed
Unassigned 3 5885464 673439 6/20,080 4915924 497,584 23269 7,18367 8 3315300 8,5000 10581-685 3,968,257 3,845,878 8,500,709 Total General Fund
All Other Governmental Funds
7,059,952 6,515,685 8,986,994 8,089,918 7,295,95 3.369,065 33757,244 3,122,511 3,557.241 nasalAl Oner Govemmental Fund 5 6705082 $ 7.050,952 $ 6,545685 8 3,98994 3 8089918 $ 7,285951 8 3,99,065 $ 3,757249 8 3122511 8 310810) Total All Governmental Funds $12,600,556 $ 12.712,391 $11,802,645 $13.720.918 $12,969,472 $12,556,205 $ 10,484,446 $ 12,072,544 $ 11,625.511 $ 13.932,083 Notes and Data Sources:
1/ Effective 2013 committed funds reflected under General Fund are now shown in Other Governmental Funds - Capital Prolect Funds - 67 -
Schedule 4
City of Fortuna
Changes in Fund Balances - Governmental Funds
Ten Year Analysis
(Thousands of Dollars
Modified accrual basis of accounting
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Revenues:
Taxes 53288 $ 3188 $ 2.923 $ $3.001 $ 3287$ 3,812 $ 5,790 $ 5,686 $ 5,868 $ Licenses and permits 777
Fines and forfeits
Charges for services 1,036
Special assessments 5,00đ
Intergovernmental
Investment earnings 230
Other revenues 1,061
Total revenues: 7,741 6,793 7.170 7,580 8.021 11,088 13,645 10,910 13,009 15,140 Expenditures:
General government 1,060 1,472 996 1,607 1,146 1,045 3575 1,023 1,551 1,623 Public safety 2,987 2,958 3,188 3,128 3,541 3,403 4,796 4,640 4,120 Parks and recreation 1,121 965 992 1,028 1,023 1,103 966 1,292 1,201 1,027 Highways and streets 691 585 526 626 578 741 2,423 1,575 5,817 5,722 Health and welfare 16 15 14 39 43 25 607 578 204 414
Economic development
and redevelopment 425 93 92 114. 101 74 311
Education SERAF payments 2,281 4,749 : :
Capital outlay 910 1,618 4,333
Debt service:
Principal 305 215 220 240 316 323 2,313 53 37
Interest 763 151 143 • 134 125 116 76 1 :
Total expenditures: 7,659 7,366 7,081 8,534 9,154 11,163 15,739 9,318 13,450 12,906 Excess of revenues
over(under)
expenditures 82 (573) (954) (1,133) (75) (2,094) 1,592 (441) 2,234 Other Financing
Sources(Uses)
Capital Lease Financing : 2,900 :
Contribution from Successor 1,512
Transfers in 12,103 563 482
Transfers out (12,093) (368) (1,501) (283) (569) (486)
Total other financing
sources(uses) 10 (2) 2,911 381 11 22 (4) (6) (4)
Net change in fund
balances $ 92 $ (575) $ 90 $ 1,957 $ (752) $ (64) $ (2,072) $ 1,588 $ (447) $ 2,230 Debt service as a
percentage of noncapital
expenditures 14.50% 5.67% 5.88% 5.41% 6.42% 6.43% 21.74% 0.58% 0.28% 0.00% •
- 68 -
Schedule 5
City of Fortuna
Assessed Value and Estimated Actual Value of Taxable Property Ten Year Analysis
(In thousands of dollars)
Assessed Taxable Values Estimated Assessed Value
Fiscal Total Direct Actual as a Percentage
Year Secured Unsecured Totals Tax Rate Taxable Value of Actual Value 2012 827,882 35,988 863,870 1.00% 2,121,116 40.73%
2013 833,767 36,465 870,232 1.00% 2,136,510 40.73%
2014 847,801 35,502 883,303 1.00% 2,170,220 40.70%
2015 868,453 37,565 906,018 1.00% 2,224,797 40.72%
2016 887,691 39,721 927,412 1.00% 2,275,972 40.75%
2017 917,470 42,235 959,705 1.00% 2,354,011 40.77%
2018 942,807 42,444 985,251 1.00% 2,417,652 40.75%
2019 985,818 43,128 1,028,946 1.00% 2,526,156 40.73%
2020 1,047,984 53,733 1,101,717 1.00% 2,696,721 40.85%
2021 1,093,129 56,232 1,149,361 1.00% 2,813,154 40.86%
Notes and Data Sources:
HdL, Coren & Cone, Humboldt County Assessor Combined Tax Rolls. - 69-
Schedule 6
City of Fortuna
Direct and Overlapping Property Tax Rates
Ten Year Analysis
(Rates per $100 of assessed value)
10-Year Detail of Taxpayer Rates for General Fund Tax Rate Area 005-0000 (direct rate agencies in bold) Agency 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 City of Fortuna Tax And Fine Trust 0.0733 0.0733
County of Humboldt General Tax District - - 0,1628 0.1552 0.1627 0.1626 0.1626 0.1553 0.1532 0.1671 County Library 0.0302 0.0302 0.0302 0.0302 0.0302 0.0302 0.0302 0.0302 0.0299 0.0326 County School Service 0.0147 0.0147 0.0147 0.0147 0.0147 0.0147 0.0147 0.0147 0.0146 0.0159 ERAF Share of County General Tax District - 0,1585 0.1660 0.1585 0.1586 0.1586 0.1659 0.1643 0.1793 ERAF Share of Fortuna General Fund - 0.0265 0.0283 0.0266 0.0270 0.0270 0.0286 0.0284 0.0305
0.0041 0.0041 0.0041 0.0041 0.0041 0.0041 0.0041 0.0041 0.0044 Fortuna Cemetery District 0.0041
Fortuna Fire Protection 0.0417 0.0417 0.0417 0.0417 0.0417 0.0417 0.0417 0.0417 0.0412 0.0450 Fortuna Union High School District 0.2134 0.2134 0.2134 0.2134 0.2134 0.2134 0.2134 0.2134 0.2114 0.2306 Fortuna School District 0.2196 0.2196 0.2196 0.2196 0.2196 0.2196 0.2196 0.2196 0.2297 0.1598 Fortuna General Fund 0.3212 0.3212 0.0467 0.0450 0.0466 0.0463 0.0463 0.0447 0.0442 0.0487 Humboldt Bay Harbor Recreation 0.0093 0.0093 0,0093 0.0093 0,0093 0.0093 0.0093 0.0093 0.0092 0.0101 Humboldt Flood Zone 1-1 0.0056 0.0056 0.0056 0.0056 0.0056 0.0056 0.0056 0.0056 0.0035 0.0039 Redwood Junior College District 0.0649 0.0649 0.0649 0.0649 0.0649 0.0649 0.0649 0.0649 0.0643 0.0700 Rohner Community Park & Recreation Dist. 0.0020 0.0020 0.0020 0.0020 0.0020 0.0020 0.0020 0.0020 0.0020 0.0021 Total Prop. 13 Rate 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 CR 2005 Go Bond 0.0120 0.0110 0.0110 0.0130 0.0100 0.00800.0080 0.0080 0,0080 0.0050 Fortuna High Go Bonds 2000 0.0040 0.0030 0.0080 0.0080 0.0200 0.01700.0170 0.0160 0.0170 0.0150 Fortuna Elementary • 0.0310 0.0300 0.0310 0.0310 0.0290 0.0330 0.03900.0720 0.0640 0.0680 Rohnerville School District 2010 Go Bond 0.0260
Total Voter Approved Rate 0.0410 0.0520 0.0590 0.05B0 0.0640 0.0960 000890 0.0880
0.0730 0.0500
Total Tax Rate 1.0730 1.0440 1.0500 1.0520 1.0590 1.0580 1.0640 1.0960 1.0890 1.0880 Notes and Data Sources:
In 1978, California voters passed Proposition 13 which set the property tax rate at a 1.00% fixed amount. This 1.00% is shared by all taxing agencies for which the subject property resides within. In addition to the 1.00% fixed amount, property owners are assessed for voter approved bonds.
Source: HDL Coren & Gone, and Humboldt County Assessor Tax Rate Tables - 70 -
Schedule 7
Principal Property Tax Payers - Top Ten Payers
Ranked In Order of Gross Assessed Values
Ten Year Analysis
(Dollar Amounts in Thousands)
2011-12
Percentage
of Total City
Taxable Taxable
Assessed Assessed
Taxpayer Value Rank Value
Sequoia Springs Cottages LLC $ 8,280 1 0.96%
Gagliardi Trust 6,388 2 0.74%
Fortuna Loop Inc. 5,967 0.69%
Giffra Ranch LLC 5,588 4 0.65%
John H Fothergill Living Trust 5,229 5 0.61%
Safeway Inc. 5,000 6 0.58%
Carl Marchetti Jr. Trust 4,605 7 0.53%
Realty Income Corporation 3,773 8 0.44%
Leonardo Logging and Construction Inc. 3,620 9 0.42%
Bear River Band of Rohnerville Rancheria 3,514 0.41%
Total $ 51,964 6.02%
2020-21
Percentage
of Total City
Taxable Taxable
Assessed Assessed
Taxpayer Value Rank Value
Bear River Band of Rohnerville Rancheria $ 12,200 1 1.06% Mercer Fraser Company 8,924 2 0.78%
Eretz Fortuna Properties LP PT 8,240 3 0.72%
Bank of America NA & Donna Minardi 7,744 4 0.67%
Sarti Enterprises Delaware LLC 7,309 5 0.64%
White Circle Commerce LLC 6,700 6 0.58%
ARCP TS Fortuna LLC 5,605 7 0.49%
Travis L Schneider and Stephanie M Bode 5,151 8 0.45%
Wendt Construction Company Inc. 5,038 9 0.44%
Carlos and Antonia Luna Trust 4,906 10 0.43%
Total $ 71,817 6.25%
Notes and Data Sources:
HdL, Coren & Cone
- 71 -
Schedule 8
City of Fortuna
Property Tax Levies and Collections
Ten Year Analysis
Collected Within The Fiscal Year
of The Levy
Fiscal Year Percentage
Ended of
June 30 Taxes Levied Amount Levy
2012 1,461,754 1,461,754 100%
2013 1,594,422 1,594,422 100%
2014 412,502 437,180 106%
2015 486,032 486,032 100%
2016 423,766 423,766 100%
2017 419,613 419,613 100%
2018 487,024 487,024 100%
2019 444,411 444,411 100%
2020 491,394 491,394 100%
2021 546,042 546,042 100%
Notes and Data Sources:
Note: Effective 2014 Successor Agency (Former RDA) taxes are not included in annual total City of Fortuna Tax Collection records and County of Humboldt Assessor's Office - 72 -
Schedule 8-A
City of Fortuna
Sales Tax Revenue Base Data
Ten Year Review
Total
City-Wide Retail City Revenue
Fiscal Retail Sales Sales Direct Recognized
Year Subject to Tax Tax Rate Tax Rate By the City
2012 145,102,000 7.25% 1.00% 1,474,983
2013 151,910,000 7.50% 1.00% 1,476,941
2014 152,695,000 7.50% 1.00% 1,479,645
2015 158,593,900 7.50% 1.00% 1,585,939
2016 183,495,600 8.00% 1.00% 1,834,956
2017 (1) 129,783,600 8.50% 1.75% 2,271,213
2018 192,530,400 8.50% 1.75% 3,369,282
2019 194,144,114 8.50% 1.75% 3,397,522
2020 200,235,771 8.50% 1.75% 3,504,126
2021 245,469,371 8.50% 1.75% 4,295,714
Notes and Data Sources:
The City's direct retail sales tax rate is established by the State of California.
Any increase in the City's direct tax rate requires voter approval by City residents. (1) In November, 2016 City voters approved Measure E, crealing a new general use sales tax of 3/4%. This tax was implemented on April 1, 2017 and is effective for 16 years. - 73 -
Schedule 8-B
City of Fortuna
Top 25 Sales Tax Producers
Comparison with
(In Alphabetical Order)
2011-2012 2020-2021
Business Name Business Category Business Name Business Category Ace Hardware & Garden Building Materials Ace Hardware & Garden Lumber/Building Materials Beverage Plus Foods Convenience Stores/Liquor Beverage Plus Foods Convenience Stores/Liquor Burger King Quick-Service Restaurants Cigarette Payless Cigarette/Cigar Stores Daves 76 Service Stations Eel River Brewing Casual Dining Dollar Tree Variety Stores Eel Valley Appliance Electronics/Appliance Stores Eel River Brewing Casual Dining Forbusco Lumber Lumber/Building Materials Eel River Hydroponics Garden/Agricultural Supplies Fortuna Chevron Service Stations Forbusco Lumber Lumber/Building Materials Fortuna Gas 4 Less Service Stations Fortuna Chevron Service Stations Grocery Outlet Grocery Stores Fortuna Ford Motors Used Auto Dealers Hummel Tire & Wheel Automotive Supply Stores Fortuna Gas 4 Less Service Stations Les Schwab Tire Center Petroleum Prod/Equip Gary Crivellos Cars Used Auto Dealers McDonalds Automotive Supply Stores Hummel Tire & Wheel Automotive Supply Stores Mercer Fraser Restaurants No Alcohol L& M Renner Petroleum Prod/Equip Northcoast Horticulture Supply Contractors Les Schwab Tire Centers Automotive Supply Stores O'Reilly Auto Parts Garden/Agricultural Supplies McDonalds Restaurants No Alcohol Peterson Tractor Automotive Supply Stores Northcoast Horticulture Supply Garden/Agricultural Supplies Ray's Quality Cars Used Automotive Dealer O'Reilly Auto Parts Automotive Supply Stores Rite Aid Drug Stores Peterson Tractor Farm/Construction Equip Safeway Grocery Stores Liquor Rays Food Place Grocery Stores Liquor Sequoia Gas Service Stations Rite Aid Drug Stores Sunbelt Rentals Repair Shop/Equip. Rentals Rohnerville 76 Service Stations Tractor Supply Garden/Agricultural Supplies Safeway Grocery Stores Liquor Village Sport & Cycle Sporting Goods/Bike Stores Village Sport & Cycle Sporting Goods/Bike Stores Walgreens Drug Stores Walgreens Drug Stores Wyckoff Plumbing Plumbing/Electrical Services Percent of Fiscal Year Total Percent of Fiscal Year Total Paid By Top 25 Accounts 71.06% Paid By Top 25 Accounts 66.73% Period: July 2011 Thru June 2012 Period: July 2020 Thru March 2021 Notes and Data Sources:
HdL, Coren & Cone, California State Board of Equalization - 74 -
Schedule 8-C
City of Fortuna
Transient Occupancy Tax Revenue Base Data
Ten Year Review
Revenue Base City Revenue
Fiscal Room Revenues Direct Recognized
Year Subject to Tax Tax Rate By the City
2012 $ 5,163,760 10.00% 516,376
2013 $ 5,236,028 10.00% 523,603
2014 $ 5,245,420 10.00% 524,542
2015 $ 5,362,890 10.00% 536,289
2016 $ 6,106,268 10.00% 610,627
2017 $ 6,821,250 10.00% 682,125
2018 $ 6,959,210 10.00% 695,921
2019 $ 6,129,930 10.00% 612,993
2020 $ 5,492,180 10.00% 549,218
2021 $ 7,551,250 10.00% 755,125
Notes and Data Sources:
Transient Occupancy Tax ("TOT) adoption requires a majority approval of voters.
Any subsequent changes to the established TOT rate requires a 2/3 voter approval.
City of Fortuna voters approved Measure W in Nov. 2002 which increased the TOT tax rate from 8% to the current rate of 10%.
- 75 -
Schedule 8-D
City of Fortuna
Principal Transient Occupancy Tax Payers
Ten Year Review
(In Alphabetical Order)
Fiscal Years Ending June 30
2017 2018 2019 2020 2021
Best Western Country Inn Best Western Country Inn Best Western Country Inn Best Western Country Inn Best Western Country Inn Comfort Inn & Suites Comfort Inn & Suites Comfort Inn & Suites Comfort Inn & Suites Comfort Inn & Suites Humboldt Redwood Inn Humboldt Redwood Inn Humboldt Redwood Inn Humboldt Redwood Inn Humboldt Redwood Inn Redwood Riverwalk Hotel Redwood Riverwalk Hotel Redwood Riverwalk Hotel Redwood Riverwalk Hotel Redwood Riverwalk Hotel Riverwalk RV Park Riverwalk RV Park Riverwalk RV Park Riverwalk RV Park Riverwalk RV Park Six Rivers Motel Six Rivers Motel Six Rivers Motel Six Rivers Motel Six Rivers Motel Super 8 Motel Super 8 Motel Super 8 Motel Super 8 Motel Super 8 Motel Travel Inn Travel Inn Travel Inn Travel Inn Travel Inn
2012 2013 2014 2015 2016
Best Western Motel Best Western Motel Best Western Country Inn Best Western Country Inn Best Western Country Inn Comfort Inn Comfort Inn Comfort Inn & Suites Comfort Inn & Suites Comfort Inn & Suites Fortuna Travel Inn Fortuna Travel Inn Holiday Inn Express Humboldt Redwood Inn Humboldt Redwood Inn Holiday Inn Express National Nine National 9 Inn Redwood Riverwalk Hotel Redwood Riverwalk Hotel National Nine Riverwalk RV Park Riverwalk RV Park Riverwalk RV Park Riverwalk RV Park Riverwalk RV Park Six Rivers Motel Six Rivers Motel Six Rivers Motel Six Rivers Motel Six Rivers Motel Super 8 Motel Super 8 Motel Super 8 Motel Super 8 Motel Super 8 Motel The Redwood Fortuna The Redwood Fortuna Travel Inn Travel Inn Notes and Data Sources:
City Data
- 76-
Schedule 8-E
City of Fortuna
Water and Sewer Rates
Last Ten Fiscal Years
Water Sewer
Monthly Rate Monthly Rate
Fiscal Base Per 100 Base Per 100
Year Rate Cubic Feet Rate Cubic Feet
2012 23.04 1.90 38.75 8.61
2013 23.04 1.90 38.75 8.61
2014 23.04 1.90 38.75 8.61
2015 23.04 1.90 38.75 8.61
2016 23.04 1.90 38.75 8.61
2017 23.04 1.90 38.75 8.61
2018 23.04 1.90 38.75 8.61
2019 23.04 1.90 38.75 8.61
2020 23.04 1.90 38.75 8.61
2021 23.04 1.90 38.75 8.61
Notes and Data Sources:
City of Fortuna Fee Schedule
- 77 -
Schedule 8-F
City of Fortuna
Water and Sewer Rates
Last Ten Fiscal Years
Water Revenue Concentration Data
Residential Non-Residential Totals
Fiscal Revenue # of Revenue #of Revenue # of
Year In Dollars Connections In Dollars Connections In Dollars Connections 2012 $ 1,553,984 4970 $ 760,276 543 $ 2,314,260 5513
2013 $ 1,634,059 • 4987 $ 787,063 545 $ 2,421,123 5532
2014 $ 1,535,339 $ 549 $ 2,320,602 5553
2015 $ 1,458,261 $ 551 $ 2,204,102 5562
2016 $ 1,506,778 $ 551 $ 2,248,923 5567
2017 $ 1,514,301 $ 554 $ 2,277,144 5579
2018 $ 1,547,679 $ 554 $ 2,330,835 5631
2019 $ 1,577,636 $ 554 $ : 2,359,534 5695
2020 $ 1,640,307 5155 $ 795,649 557 $ 2,435,956 5712
2021 $ 1,636,317 5181 $ 788,066 557 $ 2,424,383 5738
Wastewater Revenue Concentration Data
Residential Non-Residential Totals
Fiscal Revenue #of Revenue #of Revenue #of
Year In Dollars Connections In Dollars Connections In Dollars Connections 2012 $ 2,553,294 4716 $ 859,951 494 $ 3,413,245 5210
2013 $ 2,497,156 4729 $ 815,325 495 $ 3,312,481 5224
2014 $ 2,623,430 $ 840,563 498 $ 3,463,993 5240
2015 $ 2,596,862 $ 840,563 498 $ 3,437,425 5248
2016 $ 2,588,628 $ 826,449 499 $ : 3,415,077 5263
2017 $ 2,609,255 $ 842,141 501 $ 3,451,396 5272
2018 $ 2,651,219 $ 855,685 503 $ 3,506,904 5309
2019 $ 2,676,609 $ 858,663 504 $ 3,535,272 5374
2020 $ 2,659,708 $ 847,436 507 $ : 3,507,144 5392
2021 $ 2,640,931 $ 851,112 508 $ 3,492,043 5415
- 78 -
Schedule 9
City of Fortuna
Ratios of Outstanding Debt By Type
Ten Year Review
(Dollars in Thousands except for Per Capita)
Total
Government Activities Business-type Activities City Debt as Total Capital Total Percentage of City Debt Per Capita
Fiscal Bondon Redevelosment Revenue City Personal Per Personal Year Bonds Obligations Bonds Debt Income Capita Income
3,440 12,965 - 20,285 36,690 13.50% $ 22,949
12,860 19,820 35,905 22,990
12,735 35,070 $
34,185 $
33,250 $
- 32,260 $
22,780 $
2019 22,000 $
2020 8,220 13,040 21,260 $
2021 - 7,970 - 12,520 20,490 6.80%
Notes and Data Sources:
Population: California State Department of Finance, Unemployment data: Callifornia Development Department Income, Age and Education Date-US Census Bureau, most recent American Community Survey Source: Hdi. Coren & Cone
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Schedule 10
City of Fortuna
Ratios of General Bonded Debt Outstanding
Ten Year Analysis
(Dollars in Thousands except for Per Capita)
General Bonded Debt Outstanding
Percentage of
General Tax Actual Taxable
Fiscal Obligation Revenue Allocation Value of Per
Year Bonds Bonds Bonds Total Property Capita
2012 3,440 12,965 16,405 1.90% 1,386
2013 3,225 12,860 16,085 1.85% 1,353
2014 3,000 12,735 15,735 1.78% 1,324
2015 2,760 12,590 15,350 1.69% 1,280
2016 2,515 12,425 - 14,940 1.61% 1,261
2017 2,260 12,240 14,500 1.51% 1,209
2018 8,635 - 8,635 0.88% 717
2019 8,450 - 8,450 0.82% 699
2020 8,220 8,220 0.75% 678
2021 7,970 - 7,970 0.69% 668
Notes and Data Sources:
See schedule 5 for total assessed values of property.
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Schedule 11
Direct and Overlapping Governmental Activities Debt
As of June 30, 2021
CITY OF FORTUNA
2020-21 Assessed Property Valuation: $ 1,149,361,276
City of Fortuna
Total Debt Applicable Share of Debt
Overlapping Tax and Assessment Debt 6/30/2021 Percentage 6/30/2021 Redwoods Joint Community College District $ 23,865,000 6.2% $ 1,486,790 Fortuna Union High School District 10,112,989 48.9% 4,949,600 Fortuna Union School District 15,382,629 83.3% 12,808,808 Total Overlapping tax and Assessment Debt: $ 49,360,618 $ 19,245,198 Direct and Overlapping General Fund Debt
Humboldt County General Fund Obligations $ 6,510,000 7.8% $ 508,626 Humboldt County Board of Education COP 2,845,000 7.8% 222,280 Total Direct and Overlapping General Fund Debt: $ 2,355,000 $ 730,906 Overlapping Tax Increment Debt: $ 7,970,000 100% $ 7,970,000 Total Direct Debt: $ $
Total Overlapping Debt: 66,685,618 27,946,104
Combined Total Debt: $ 66,685,618 $27,946,104
Ratios to 2020-21 Assessed Valuation:
Total Overlapping Tax and Assessment Debt. ....... 1.670% Total Direct Debt .......... ........ 0.000%
Combined Total Debt.......... ........ 2.430%
Ratios to Redevelopment Incremental Valuation:
Total Overlapping Tax Increment Debt. 3.23%
Notes and Data Sources:
a. The percentage of overlapping debt applicable to the city is estimated using taxable assessed property value.
Applicable percentages were estimated by determining the portion of the overlapping distric's assessed value that is within the boundaries of the city divided by the district's total taxable assessed value. b. Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue bonds and non-bonded capital lease obligations.
Source: Humboldt County Assessor Tax Rate Table and HdL, Coren & Cone - 81 -
Schedule 12
City of Fortuna
Legal Debt Margin Information
Ten Year Review
Total Debt
Applicable
Total Debt To Limit as
Fiscal Debt Applicable Percentage
Year Limit To Limit of Debt Limit
2012 $ 129,580,488 0%
2013 $ 130,534,727 0%
2014 $ 132,495,586 0%
2015 $ 135,902,700 0%
2016 $ 139,111,800 0%
2017 $ 143,955,750 0%
2018 $ 147,787,650 0%
2019 $ 154,341,900 - 0%
2020 $ 165,257,550 0%
2021 $ 172,404,150 0%
Legal Debt Margin Calculation for Fiscal Year 2021
Assessed value $ 1,149,361
Debt limit (15% of assessed value) 172,404
Less debt applicable to limit:
General obligation bonds
Total debt applicable to limit =
Legal debt margin 172,404
Notes and Data Sources:
California finance law states that the city's outstanding general obligation bonded debt should not exceed 15 percent of total assessed property value.
Source of Assessed Taxable Values: HdL, Coren and Cone, - 82 -
Schedule 13
City of Fortuna
Pledged Revenue Coverage
Ten Year Review
Water Revenue Bonds
Water Capital Less Net
Service Impact Operating Available Debt Service
Year Revenues Fees Expenses Revenue Principal Interest *Ratio 2012 2,282,744 84,435 1,068,732 1,298,447 170,000 358,798 2.46 2013 2,311,702 14,053 1,074,878 1,250,877 175,000 352,760 2.37 2014 2,337,351 54,582 1,049,050 1,342,883 185,000 345,998 2.53 2015 2,301,442 90,899 1,091,030 1,301,311 190,000 337,548 2.47 2016 2,402,085 64,231 1,414,885 1,051,431 200,000 328,798 1.99 2017 2,319,601 110,734 1,417,440 1,012,895 210,000 319,548 1.91 2018 2,621,238 127,259 2,020,616 727,881 220,000 251,799 1.54 2019 2,394,356 97,887 2,559,467 (67,224) 225,000 206,750 (0.16) 2020 2,398,729 40,615 2,137,358 301,986 195,000 202,700 0.76 2021 2,504,339 86,956 2,288,834 302,461 200,000 195,725 0.76 Wastewater Revenue Bonds
Wastewater Capital Less Net
Service Impact Operating Available Debt Service
Year Revenues Fees Expenses Revenue Principal Interest *Ratio 2012 3,574,632 176,530 1,845,457 1,905,705 280,000 582,673 221 2013 3,477,554 115,675 1,680,980 1,912,249 290,000 575,148 2.21 2014 3,490,890 39,952 1,685,519 1,845,323 300,000 564,073 2.14 2015 3,466,823 139,383 1,685,519 1,920,687 310,000 • 550,321 2.23 2016 3,526,664 157,956 2,045,983 1,638,637 325,000 536,073 1.90 2017 3,513,379 190,818 2,209,407 1,494,790 340,000 521,073 1.74 2018 4,023,978 238,579 2,700,738 1,561,819 355,000 439,470 1.97 2019 3,646,004 182,880 2,862,388 966,496 370,000 386,269 1.28 2020 3,512,378 112,088 3,105,133 519,333 315,000 379,694 0.75 2021 3,717,201 234,343 3,595,910 355,634 320,000 368,519 0.52 Successor Agency Revenue Bonds*
Debt Service
Principal Interest
95,000 617,449
105,000 612,974
125,000 608,350
145,000 603,052
150,000 473,099
165,000 465,246
185,000 422,369
185,000 284,663
230,000 277,283
250,000 270,188
Notes and Data Sources:
a. "Ratio is delermined by dividing Net Available Revenue by total payment (principle and interest) -83-
Schedule 14
City of Fortuna
Demographic and Economic Statistics
Ten Year Review
3 Per Capita 2 3
Fiscal 1 Personal Personal Unemployment Median
Year Population Income Income Rate Age
2012 11,840 267,691,000 $ 22,609 10.00% 38.2
2013 11,885 272,749,000 $ 22,949 7.40% 40.8
2014 11,902 273,627,000 $ 22,990 6.50% 42.6
2015 11,994 253,397,000 $ 21,127 6.80% 38.3
2016 11,848 256,553,000 $ 21,654 5.60% 38.1
2017 11,989 243,406,000 $ 20,302 4.90% 39.2
2018 12,042 245,724,000 $ 20,406 3.90% 39.4
2019 12,084 255,561,000 $ 21,149 4.20% 39.9
2020 12,123 269,218,000 $ 22,207 3.10% 39.9
2021 11,926 301,213,000 $ 25,257 7.90% 40.8
Notes and Data Sources:
Source: California State Department of Finance
2 Source: California Employment Development Department
3 Source: US Census Bureau, most recent American Community Survey Source: HdL, Coren & Cone
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Schedule 15
City of Fortuna
Principal Employers (Ten Largest)
(In Alphabetical Order)
FYE 2021 FYE 2016
City of Fortuna City of Fortuna
Eel River Brewer Eel River Brewery
Eel River Disposa
Fontina Real and Weliness Emeitus Senior Living
-ortuna Rehab and Wellness
Fortuna Union Elementary School District Fortuna Union Elementary School District Fortuna Union High School Distric Fortuna Union High School District Redwood Memorial Hospital
Safeway
FYE 2020 FYE 2015
City of Fortuna City of Fortuna
Eel River Brewery Eel River Brewery
Eel River Disposal Eel River Disposal
Emeitus Senior Living Emeitus Senior Living
Fortuna Rehab and Wellness Fortuna Rehab and Wellness
Fortuna Union Elementary School District Fortuna Union Elementary School District Fortuna Union High School District Fortuna Union High School District Ray's Food Place Ray's Food Place
Redwood Memorial Hospital Redwood Memorial Hospital
Safeway Safeway
FYE 2019 FYE 2014
City of Fortuna City of Fortuna
Eel River Brewery Eel River Brewery
Eel River Disposal Eel River Disposal
Emeitus Senior Living Emeitus Senior Living
Fortuna Rehab and Wellness Fortuna Rehab and Wellness
Fortuna Union Elementary School District Fortuna Union Elementary School District Fortuna Union High School District Fortuna Union High School District Ray's Food Place Ray's Food Place
Redwood Memorial Hospital Redwood Memorial Hospital
Safeway Safeway
FYE 2018 FYE 2013
Fortuna Rehab and Wellness
Fortuna Union Elementary School District Fortuna Union Elementary School District Fortuna Union High School District rtuna Union High School Dist y's Food Plac
Redwood Memorial Hospital
Safeway Safeway
FYE 2017 FYE 2012
City of Fortuna City of Fortuna
Eel River Brewery
Eel River Disposal Eel River Disposal
Emeitus Senior Living Fortuna Rehab and Wellness
Fortuna Rehab and Wellness Fortuna Union Elementary School District Fortuna Union Elementary School District Fortuna Union High School District Fortuna Union High School District Ray's Food Place
Ray's Food Place Redwood Memorial Hospital
Redwood Memorial Hospital Safeway
Sequoia Springs Assisted Living
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Schedule 16
City of Fortuna
Full-Time Equivalent City Government Employees by Function/Program Ten Year Analysis
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Function/Program:
General government:
City Manager 4.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 Finance 4.00 4.00 4.00 4.00 4.00 4.00 4.00 5.00 5.00 5.00 Police 26.00 25.00 24.00 24.00 24.00 23.00 28.00 28.00 27.00 26.00 Community Development 4.20 4.20 4.00 3.00 4.00 4.00 4.00 4.00 4.00 4.00 Public Works 30.50 30.00. 30.00 30.00 30.00 30.00 31.00 31.00 31.00 30.00 Parks and Recreation 7.50 7.50 7.00 6.00 6.00 6.00 9.00 9.00 8.00 8.00 River Lodge Conference Center K 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 Transit 2.00 2.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Totals 80.20 77.70 75.00 73.00 74.00 73.00 82.00 83.00 81.00 79.00 - 86 -
Schedule 17
City of Fortuna
Operating Indicators by Function/Program
Ten Year Analysis
Function/Program 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Police:
Physical arrest 1,154 1,134 1044 1088 963 1039 1098 1134 751 887 Traffic violations 765 720 649 439 267 351 563 724 250 412 Planning:
Building permits issued 328 366 357 334 354 367 387 333 341 353 Public works:
Street lane miles resurfaced 0.25 0.50 3.00 1.45 1.60 1.60 0.25 1.25 2.05 0.50 Riverlodge/Monday Club:
Community Events 404 408 386 376 347 335 326 346 253 57 Parks and Recreation:
Recreation Program
Admissions (1) 10,055 9,949 9,500 7,322 6,549 6,937 6,694 6,051 3,126 541 Water:
Number new connections 11 19 20 9 5 12 52 64 17 26
Daily average water
production in MGD 1.20 1.13 1.13 1.10 1.10 1.10 1.08 1.08 1.20 1.25 Daily average water
consumption in MGD 1.20 1.13 1.14 0.93 0.91 0.92 0.93 0.93 0.94 1.00 Wastewater:
Number new connections 11 14 15 8 15 9 37 65 18 23
Daily average treatment
in millions gallons(MGD) 1.10 1.90 1.90 1.16 1.03 1.60 1.42 1.42 1.15 1.14 (1) Starting in fiscal year 2014-15 the Recreation Program Admissions were calculated based on the number of people signed up for Recreation Programs.
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Schedule 18
City of Fortuna
Capital Asset Statistics by Function/Program
Ten Year Analysis
Function/Program 2012 2014 2015 2016 2017 2018 2019 2020 2021 Police:
Stations 1 1 1 1 1 1 1
Patrol units 15 15 15 15 15 15 15 15
Public Works:
Miles of streets 54 54 54 54 54 54 54 54 54 54
Streetlights 523 523 523 523 523 523 523 523 523
Traffic signals 5 5 5 5 5 5 5 5 5
Riverlodge/Monday Club
Community centers 2 2 2 2 2 2 2 2 2 2
Parks and Recreation:
Parks 2 2 2 2 2 2 2 2
Park acreage 85 85 85 85 85 85 85 85
Skate Pavilion 1 1 1 1 1 1 1
1 1 1 1 1 1 1
Museum
Water:
Number connections 5,513 5,532 5,553 5,562 5,567 5,579 5,631 5,695 5,712 5,738 Maximum plant capacity
in millions gallons 3.10 3.10 3.10 3.10 3.10 3.10 3.10 3.10 3.10 3.10 Wastewater:
Miles of sewers 42 42 42 42 42 42 42 42 42 42
Number connections 5,210 5,224 5,240 5,248 5,263 5,272 5,309 5,374 5,392 5,415 Maximum plant capacity
in millions gallons 1.50 1.50 1.50 1.50 1.50 1.50 1.50 1.50 1.50 1.50 - 88 -
OTHER REPORTS
R. J. RICCIARDI, INC.
CERTIFIED PUBLIC ACCOUNTANTS
REPORT ON COMPLIANCE OVER FINANCIAL
REPORTING BASED ON AN AUDIT OF FINANCIAL
STATEMENTS PERFORMED IN ACCORDANCE WITH
THE STATUTES, RULES, AND REGULATIONS OF THE
CALIFORNIA TRANSPORTATION DEVELOPMENT ACT
AND THE ALLOCATION INSTRUCTIONS AND RESOLUTIONS
OF THE LOCAL TRANSPORTATION COMMISSION
To the Honorable Members
of the City Council
City of Fortuna
Fortuna, California
We have audited the financial statements of the City of Fortuna allocated for non-transit purposes as of and for the year ended June 30, 2021 and have issued a report thereon dated April 16, 2022. We conducted our audit in accordance with auditing standards generally accepted in the United States of America.
As part of obtaining reasonable assurance about whether the City of Fortuna's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts.
Additionally, we performed tests to determine that expenditures paid by the City of Fortuna were made in accordance with the allocation instructions and resolutions of the Humboldt Council of Governments and in conformance with the California Transportation Development Act. Specifically, we performed each of the specific tasks identified in the California Code of Regulations Sections 6664, and 6666-6667 that are applicable to the City of Fortuna. In connection with out audit, nothing came to our attention that caused us to believe the Transportation Development Act Funds allocated for non-transit purposes to City of Fortuna failed to comply with the Statutes, Rules, and Regulations of the California Transportation Development Act and the allocation instructions and resolutions of the Humboldt Council of Governments. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion.
Also, as part of our audit, we performed tests of compliance to determine whether certain state funds were received and expended in accordance with the applicable bond act and the state accounting requirements.
This report is intended solely for the information and use of management of the City of Fortuna, the Humboldt Council n, and the State Controller's Office and should not b
se Governments, the Calforeia Departen eat of Transportation R.D. Ricciardi, Inc.
R.J. Ricciardi, Inc.
Certified Public Accountants
San Rafael, California
April 16, 2022
- 89 -
1101 FIFTH AVENUE, SUITE 360 SAN RAFAEL, CA 94901 TEL (415) 457-1215 FAX (415) 457-6735 www.rjrcpa.com