CITY OF FORTUNA
FORTUNA, CALIFORNIA
ANNUAL FINANCIAL REPORT
JUNE 30, 2022
O'CONNOR & COMPANY
INTRODUCTORY SECTION
TABLE OF CONTENTS
PAGE
INTRODUCTORY SECTION
Table of Contents i
Letter of Transmittal
List of Principal Officials
Organization Chart vi
FINANCIAL SECTION
Independent Auditors' Report 1-3
Management's Discussion and Analysis - Required Supplementary Information (Unaudited) 4-12 Financial Statements:
Government-wide Financial Statements:
Statement of Net Position 13
Statement of Activities 14
Fund Financial Statements:
Governmental Funds - Balance Sheet 15
Governmental Funds - Statement of Revenues,
Expenditures, and Changes in Fund Balances 16
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds
to the Statement of Activities 17
Proprietary Funds - Statement of Net Position 18
Proprietary Funds - Statement of Revenues
xpenses, and Changes in Fund Net Positio 19
Proprietary Funds - Statement of Cash Flows 20
Statement of Fiduciary Net Position 21
Statement of Changes in Net Position - Private Purpose Trust Fund 22 Notes to Basic Financial Statements 23-45
i-1
TABLE OF CONTENTS (continued)
PAGE
REQUIRED SUPPLEMENTARY INFORMATION SECTION (Unaudited):
Statement of Revenues, Expenditures, and Changes ir
Fund Balances - Budget and Actual - General Fund 46
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 48
Schedule of Contributions - All Plans 49
SUPPLEMENTARY SECTION
Combining Statements and Individual Fund Schedules - Nonmajor Funds:
Combining Balance Sheet - Nonmajor Governmental Funds 50-51 Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds 52-53
Schedules of Revenues, Expenditures and Changes in Fund Balances Budget and Actual (Budgetary Basis) Nonmajor Governmental Funds 54-64 STATISTICAL SECTION (Unaudited) SCHEDULE PAGE
Financial Trends Information:
Net Position by Component - Last Ten Fiscal Years 1 65
Changes in Net Position - Last Ten Fiscal Years 2 66-67 Fund Balances Governmental Funds - Last Ten Fiscal Years 3 68 Changes in Fund Balances - Governmental Funds - Last Ten Fiscal Years 4 69 Revenue Capacity Information:
Assessed Value and Estimated Actual Value of Taxable Property - Last Ten Fiscal Years 5 70
Direct and Overlapping Property Tax Rates - Last Ten Fiscal Years 6 71 Principal Property Taxpayers - Current Year and Previous Nine Years 7 72 Property Tax Levies and Collections - Last Ten Fiscal Years 8 73 Sales Tax Revenue Base Data - Last Ten Fiscal Years 8A 74 Principal Sales Taxpayers - In Alphabetical Order -
Current and Previous Nine Years Ago 8B 75
i-2
TABLE OF CONTENTS (concluded)
STATISTICAL SECTION (concluded) SCHEDULE PAGE
Transient Occupancy Tax Revenue Base Data - Last Ten Fiscal Years 8C 76 Principal Transient Occupancy Taxpayers - In Alphabetical Order Last Ten Fiscal Years 8D 77
Water and Sewer Rates - Last Ten Fiscal Years 8E 78
Water and Wastewater Revenue Concentration Data - Last Ten Fiscal Years 8F Debt Capacity Information:
Ratio of Outstanding Debt by Type - Last Ten Fiscal Years 9 80 Ratio of General Bonded Debt Outstanding - Last Ten Fiscal Years 10 81 Direct and Overlapping Governmental Activities Debt - Current Year 11 82 Legal Debt Margin Information - Last Ten Fiscal Years 12 83 Pledged Revenue Coverage - Last Ten Fiscal Years 13 84
Demographic and Economic Information:
Demographic and Economic Statistics - Last Ten Fiscal Years 14 85 Principal Employers - Last Ten Fiscal Years 15 86
Operating Information:
Full Time Equivalent City Employees - Last Ten Fiscal Years 16 87 Operating Indicators - Last Ten Fiscal Years 88
Capital Asset Statistics - Last Ten Fiscal Years 18 89
i-3
City of Fortuna P.O. Box 545 • Fortuna, CA 95540
www.friendlyfortuna.com
April 24, 2023
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, 2022. 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, 2022
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, 2022. 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 |Ith Street 621 11th Street 5 Park Street 180 Dinsmore Drive ii
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; community 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. he budget process is the vehicle through which the city establishes goals and objectives, and prioritize he desired programs or services that the city provides and which can be financed by the city's anticipate 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 maintaining budgetary control is to ensure compliance with legal provisions embodied in the annual 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 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 ("ACFR") 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 $248.0 million over the year; greater than the previously highest recorded sales tax year - 2020/2021. 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 2022 decreased to 4.2% - the highest unemployment rate seen in the last 10 years was in 2021 when the unemployment rate was 7.9%. Property values remain stable with a slight increase as compared to the previous fiscal period. Looking forward, the city's 2022-23 budget reflects a 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 (/U/) /25-/610 tax (707) 723-7574 tax (707) 725-7576 Fax (707) 725-7651 621 11th Street 621 11th Street 5 Park Street 180 Dinsmore Drive i#
City of Fortuna P.O. Box 545 • Fortuna, CA 95540
www.triendlytortuna.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 2022 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 that project the City was able to move forward with the almost $2.5 million Hiliside Creek Flood Contro 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 attairs 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 as other business activity related to the Successor Agency.
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 responsibiy managing the City of Fortuna's financial Respectfully submitted,
Tell
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 62111th Street 621 11th Street 5 Park Street 180 Dinsmore Drive iv
CITY OF FORTUNA, CALIFORNIA
List of Principal Officials
June 30, 2022
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
City of Fortuna
Organizational Chart
Recents & Businessas of Forlinal
City Attorney
Finance Drecto
leutenant
nistrator
Aministratio enlor Accoant Cleri
Seinean astanes la
Supervise Disperch
3.15 FTE
Kennel Attendant
73 FTE
Lead Parks
2FT:
1 FTE
2 TE
FINANCIAL SECTION
1101 FIFTH AVENUE, SUITE 360
O'CONNOR & COMPANY SAN RAFAEL, CA 94901
PH. (415) 457-1215
FAX. (415) 457-6735
www.maocpa.com
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, business-type activities, In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, business-type activities, each major fund, and the aggregate remaining fund information of City of Fortuna, as of June 30, 2022, and the respective changes in financial position and where applicable, cash flows thereof, for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinions
Financial Statements section of our report. We are required to be independent of the City of Fortuna, and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Emphasis of a Matter
Implementation of New Accounting Standards
As discussed in Notes 1 and 4C to the financial statements, City of Fortuna implemented Governmental Accounting Standards Board Statement No. 87, Leases, which became effective for the year ended June 30, 2022 and had material effects on the financial statements. Our opinion is not modified with respect to this matter.
Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about City of Fortuna's ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.
Auditor's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinions.
Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with auditing standards generally accepted in the Unites States of America will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
- 1 -
Board of Directors
City of Fortuna - Page 2
In performing an audit in accordance with auditing standards generally accepted in the Unites States of America, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City of Fortuna's internal control. Accordingly, no such opinion is expressed. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. • Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about City of Fortuna's ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
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 required supplementary information listed in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who 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.
Supplementary 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 Supplementary Information, as listed in the Table of Contents, is presented for the purpose of additional analysis and is not a reguired part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements.
The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements are fairly stated in all material respects, in relation to the basic financial statements as a whole.
Other Information
Management is responsible for the other information included in the annual report. The other information comprises the Introductory Section and Statistical Section listed in the Table of Contents but does not include the basic financial statements and our auditor's report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon. - 2-
Board of Directors
City of Fortuna - Page 3
In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report. @ Connor & Compang
O'Connor & Company
San Rafael, California
April 24, 2023
- 3-
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 Conia on or ane a turi he ter a year an ero i report a reason chile ., which follow this section.
Financial Highlights
• The city's total net position continued to improve during the 2021-22 fiscal year with an increase of $2.58 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 $11.41 million in revenues during the 2021-22 fiscal year with $9.32 million in total expenditures, which resulted in an excess of revenues over expenditures of $2.09 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 $2.03 million of the $11.41 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 31st, 2033.
• The fiscal period ending June 30, 2022, resulted in a general fund balance of $12.52 million with $12.50 million reported as unassigned (See pg. 14-15 for details). The City has designated about $7.5 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 $6.26 million in user fees. Utility fees continue to support daily operations, debt service, and capital improvement projects. The net position of the water enterprise increased by 0.55 percent to $15.8 million and the wastewater enterprise net position increased by 1.4 percent to $26.3 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 func inancial 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. 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. - 4-
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
Sovernment-Wide Governmental Funds Proprietary Funds
Statement:
Scope Entire city government The activities of the city that is Activities the city operates similar to not proprietary or fiduciary, private businesses: Water, sewer, and Parks & Recreaio Dept. and transit.
Required • Statement of net position • Balance sheet • Statement of net position financial statements
• Statement of activities • Statement of revenues, • Salent of el pes, expenditures, expenditures, and changes
in fund balances
• Statement of cash nows
Accounting basis and Accrual accounting and Modified accrual accounting Accrual accounting and economic measurement focus economic resources focus and current financial resources resources focus focus
All assets and liabilities, both Only assets expected to be All assets and liabilities, both financia Type of asset/liability financial and capital, and short- depleted and liabilities that are and capital, including short-term and information term and long-term due and payable during the long-term liabilities. fiscal year. No capital assets
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, regardless of when cash is received or regardles or pen a is. expended.
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.
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.
- 5-
MANAGEMENT'S DISCUSSION AND ANALYSIS
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. - 6-
MANAGEMENT'S DISCUSSION AND ANALYSIS
FINANCIAL ANALYSIS OF THE CITY AS A WHOLE
Net Position. The city's total combined net position increased $2.58 million during the 2021-22 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 2022 2021 2022 2021 2022 2021
Current and other assets $ 34,074 $ 31,482 $ 22,879 $ 24,089 $ 56,953 $ 55,571 2.5% Capital assets, net 22,332 22,963 35,133 34,956 57,465 57,919 -0.8% Total assets 56,406 54,445 58,012 59,045 114,418 113,490 0.8% Pension related items 2,664 1,855 1,207 840 3,871 2,695 43.6% Total deferred outflows 2,664 1,855 1,207 840 3,871 2,695 43.6% Current liabilities 457 1,188 1,007 1,195 1,464 2,383 -38.6% Long-term liabilities 4,872 8.170 14,860 16,871 19,732 25,041 -21.2% Total liabilities 5,329 9,358 15,867 18,066 21,196 27,424 -22.7% Deferred inflows:
Deferred inflows: 4.924 282 1,195 86 6,119 368 1562.8%
Net position:
Invested in capital assets 22,324 22,939 23,163 22,437 45,487 45,376 0.2% Restricted 3,593 3,557 3,593 3,557 1.0%
Unrestricted 22,900 20,164 18,994 19,296 41,894 39,460 6.2% Total net position $ 48,817 $ 46,660 $ 42,157 $ 41,733 $ 90,974 $ 88,393 2.9% The net position of the city's governmental activities increased by 4.63 percent to $48.8 million during the 2021-22 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 decreased to $22.3 million at year- end, the decrease primarily due from assets being disposed of.
The net position of the city's business-type activities increased by approximately $0.40 million this fiscal year to $42.2 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 decreased overall by eight percent (8%) ending the year with a combined total of $21.66 million. In comparing revenues to the previous fiscal year, it is important to consider that there was a decrease in one time grants and contributions revenue of $2.2 million from the previous fiscal year. This decrease in capital grants and contributions nearly accounted for the entire decrease in overall revenues. (See Table A-2.)
- 7-
MANAGEMENT'S DISCUSSION AND ANALYSIS
City of Fortuna
Revenue Sources
8%
5%
4% • Charges for Services
38% •I Grants & Contributions
3%
# Sales Taxes
• Property Taxes
20%
• Transient Occupancy Tax
• Other Taxes
22% • All Other
The total cost of city programs and services decreased by $0.2 million to $19.1 million during fiscal year ending 2022, a decrease of one percent (1%). 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
2%
15%
13% • General Admin
• Public Safety
21% * Parks and Recreation
• Water & Sewer
40%
I Streets
9%
• All Other
- 8-
MANAGEMENT'S DISCUSSION AND ANALYSIS
Contributions decreased by eight percent (8%) during the 2021-22 fiscal year. A majority of this decrease was due to a fifty-three percent (53%) decrease in capital grant revenue. Business-type activities saw a otal of $8.5 million in revenues finance operating costs of $8.0 million, which provided cash flow for principa bayments on water and wastewater revenue bonds and continued investment in capital improvement 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
2022 2021 2022 2021 2022 2021
Revenues
Program revenues
Charges for services $ 1,854 $ 1,845 $ 6,274 $ 6,239 $ 8,128 $ 8,084 1% Operating Grants 2,486 2,018 2,486 2,018 23%
Capital Grants 2,351 5,008 2,351 5,008 -53%
General revenues
Taxes 7,301 6,996 7,301 6,996 4%
investment Earnings (75) 230 (281) (356) 291 -222%
Other 1,754 1,061 1,754 1,061 65%
Total revenues 13,185 15,140 8,479 8,318 21,664 23,458 -8% Expenses
General government 2,412 1,623 2,412 1,623 49%
Public safety 4,082 4,171 4,082 4,171 -2%
Streets 2,768 4,072 : 2,768 4,072 -32%
Parks and recreation 1,697 1,027 1,697 1,027 65%
Sanitation 64 414 64 414 -85%
Water 3,419 2,963 3,419 2,963 15%
Wastew ater 4,256 4,691 4,256 4,691 -9%
Transit 385 369 385 369 4%
Other
Total expenses 11,023 11,307 8,060 8,023 19,083 19,330 -1% Increase (Decrease) 2,162 3,833 419 295 2,581 4,128
Transfers (5) (4) 5 4
Change in net position 2,157 3,829 424 299 2,581 4,128 -37% Net Position, beginning, as restated 46,660 42,831 41,733 41,434 88,393 84,265 Prior Period Adjustment
Net Position, end of year $48,817 $46,660 $42,157 $41,733 $90,974 $88,393 3% The cost of the city's governmental activities this year was $11.0 million, a decrease of $0.3 million or -
2.5%, 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 $0.04 million or 0.5%, compared to last fiscal year as presented in Table A-2. Water and Wastewater expenses accounted for nearly all of the $0.04 million increase. These increased costs were primarily for capital outlay and infrastructure improvements. - 9-
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 ir 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 $11.41 million in tax, intergovernmental, fee and other revenues during the year.
These revenues supported $4.8 million in public safety programs, $1.7 million to support parks and recreation programs and services, and the remainder supported streets, capital improvement projects, and general administration. The general fund had a fund balance of $12.52 million at year-end.
On a budgetary basis, general fund revenues exceeded budget estimates by approximately $0.8 million.
Property, sales, and other tax revenues exceeded projections by nearly $1.4 million with license, permits, and miscellaneous revenues not exceeding projections by $600,000. In total, general fund expenditures and transfers were $1.3 million below approved budget appropriations.
The city's HOME grant fund continues to administer an approximate $10.0 million portfolio of federally funded housing loans. No new loans were extended during the vear.
The city continues to administer a $3.3 million portfolio of low-to-moderate income housing loans that were originally funded by Community Development Block Grants ("CDBG") 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 $3.8 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 $15,000 in fees during the 2021-22 fiscal period. Operating subsidies of over $344,000 combined with user fees supports the operating costs necessary to provided essential transportation services to city residents.
- 10 -
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 2022, the city has invested $57.4 million in a broad range of capital assets (net of accumulated to the basic financial statements.
Table A-3
apital Assets (net of depreciation
(in thousands of dollars
Percent
Governmental Activities Business-type Activities Total Change 2022 2021 2022 2021 2022 2021
Land $ 985 $ 667 $ 154 $ 154 $ 1,139 $ 821 39%
Construction in progress 545 3,883 2,169 1,936 2,714 5,819 -53% Water Wastew ater plant & system 54,849 53,981 54,849 53,981 2% Buildings, structures & systems 4.535 4,535 4,535 4,535 0% Machinery and equipment 1,707 1,656 2,458 2,405 4,165 4,061 3% Vehicles 1,446 1,446 1,895 1,397 3,341 2,843 18%
Infrastructure 26,111 22,082 26,111 22,082 18%
Improvements 1,968 1,968 1,968 1,968 0%
Total Capital Assets $37,297 $36,237 $61,525 $59,873 $98,822 S96,110 3% Less:
Accumulated depreciation (15,006) (13,316) (26,392) (24,916) (41,398) (38,232) 8% Capital Assets, net of
Accumulated depreciation $22,291 $22,921 $35,133 $34,957 $57,424 $57,878 -1% Long-Term Debt
The city ended the 2021-22 fiscal year with $12.0 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 $ 8,110
Water Fund 4,575,000
Wastewater Fund 7,395,000
City Total: $11,978,110
For further detail, see Notes to the Basic Financial Statements, Long-Term Debt, contained in the CAFR - 11-
MANAGEMENT'S DISCUSSION AND ANALYSIS
PENSION ACCOUNTING MATTERS
The City's overall actuarially determined net pension liability was $6.37 million at the end of fiscal year 2022. Compared to $11.05 million at the end of fiscal year 2021. 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
purchases, have been robust. The city continues to remain conservative, yet optimistic, in projecting revenues for the fiscal year 2022-23 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 2022-23 and beyond. As the city nonitors 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. - 12-
City of Fortuna
STATEMENT OF NET POSITION
June 30, 2022
Primary Government
Governmental Business Type
Activities Activities Total
ASSETS
Current assets:
Cash and investments 12,747,558 22,146,050 $ 34,893,608 Net receivables 3,683,747 581,047 4,264,794
Prepayments 3,717 3,717
Inventory 151.918 151,918
Total current assets 16,435,022 22,879,015 39,314,037
Noncurrent assets:
Notes receivable-long term 14,653,602 14,653,602
Loan receivable successor agency 1,964,893 1,964,893
Lease receivable 1,019,830 1,019,830
1,571,872 2,323.009 3,894,881
Capital assets not being depreciated
Capital assets being depreciated, net 20,760,397 32,809,537 53,569,934 Total noncurrent assets 39,970,594 35,132,546 75,103,140 Total assets 56,405,616 58,011,561 114,417,177
DEFERRED OUTFLOWS OF RESOURCES
Pension related items 2,663,802 1,207,350 3,871,152
LIABILITIES
Current liabilities:
Accounts payable 258,988 157,463 416,451
Accrued liabilities 122,102 - 122,102
Compensated absences 7,409 7,409
Deposits 67,457 73,645 141,102
Accrued interest payable 134,261 134,261
Leases and bonds due in one year 8,110 634,245 642,355
Total current liabilities 456,657 1,007,023 1,463,680
Noncurrent liabilities:
Compensated absences 369,639 23,015 392,654
Net pension liability 4,502,436 1,862,816 6,365,252
Revenue bonds due in more than one year 11,400,000 11,400,000 Premium from sale of bonds, net 1,574,040 1,574,040
Total noncurrent liabilities 4,872,075 14,859,871 19,731,946 Total liabilities 5,328,732 15,866,894 21,195,626
DEFERRED INFLOWS OF RESOURCES
Leases 1,001,870 1,001,870
Pension related items 3,921,746 1,195,179 5,116,925
Total deferred inflows 4,923,616 1,195,179 6,118,795
NET POSITION
Net investment in capital assets 22,324,159 23,162,546 45,486,705 Restricted for:
Affordable housing 435,819 435,819
Public works and streets 1,494,209 1,494,209
Economic development 1,662,770 1,662,770
Unrestricted 22,900,113 41,894,405
Total net position $ 48,817,070 $ 42,156,838 $ 90,973,908 The accompanying notes are an integral part of these financial statements. - 13-
City of Fortuna
STATEMENT OF ACTIVITIES
For the year ended June 30, 2022
Net (Expenses) Revenue anc
Program Revenues Changes in Net Position
Operating Capital City Government
Charges for Grants and Grants and Govemmental Business-type Functlons/Programs Expenses Services Contributions Contributions Activities Activities Total Govemmental activities:
General government $ 2,411,874 $ $ $ $ (2,411,874) $ $ (2,411,874) Public safety 4,082,365 30,896 (4,051,469) (4,051,469)
Public works & streets 2,767,529 951,453 2,351,031 534,955 534,955 Parks and recreation 1,697,162 B72,212 (824,950) (824,950) Sanitation 63,515 (63,515) (63,515)
Business development and housing
Interest on long-term debt
Total governmental activities 11.022,445 1,854,561 2.351,031 (6.816,853) (6,.816.853) Business-type activities:
Water 3,418,851 2,469,628 1,136,806 187,583 187,583
Wastewater 4,256,162 3,788,723 1,004,987 537,548 537,548 Transit 385,274 343,934 (25,963) (25,963)
Total business-type activities 8,060,287 6,273,728 2,485,727 699,168 699,168 Total City goverment 19.082.732 8,128,289 2,485,727 2,351.031 (6.816.853) 699,168 (6.117 685) Taral revenues and transters:
Property taxes 610,620 610,620
Sales taxes 4,339,191 4,339,191
951,039 951,039
45.512 45,512
1,354,606 1,354,606
1,753,685 1,753,685
(75,427) (281,252) (356,679)
(5,536) 5,536
Total general revenues and transfers 8,973,690 (275,716) 8,697,974 Change in net position 2,156,837 423,452 2,580,289
Net position, beginning 46,660,233 41,733,386 88,393,619 Net position, ending $ 48,817,070 42,156,838 90.973,908 The accompanying notes are an integral part of these financial statements. - 14 -
City of Fortuna
GOVERNMENTAL FUNDS
BALANCE SHEET
June 30, 2022
Other Total
General HOME City Housing Governmental Governmental
Fund Grants Fund Funds Funds
ASSETS
Cash and investments $ 9,538,461 $ 203,820 $ 191,384 $ 2,813,893 $ 12,747,558 Accounts receivable 1,234,913 393,072 1,627,985
Taxes receivable 2,055,762 2,055,762
Prepayments 3,717 3,717
Notes receivable 1,320 9,998,565 3.316,167 1,337,550 14,653,602 Loan receivable from successor agency 1,964,893 1,964,893 Lease receivable 1,019,830 1,019,830
Land held for resale 41.716 41,716
Total assets $15,818,896 $ 10,202,385 $ 3,549,267 $ 4,544,515 $ 34,115,063
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable $ 145,700 $ 1,101 $ $ 112,187 $ 258,988 Accrued liabilities 122,102 122,102
Deposits 67,457 67,457
Total liabilities 335,259 1,101 112,187 448,547
Deferred inflows of resources:
Lease 1,001,870 1,001,870
Long-term receivables 1,964,893 9,998,565 3,316,167 1,337,550 16,617,175 Total deferred inflows of resources 2,966,763 9,998,565 3,316,167 1,337,550 17,619,045 Fund balances:
Non-spendable 3,717 3,717
Restricted for economic development 1,662,770 1,662,770 Restricted for affordable housing 202,719 233,100 435,819 Restricted for streets and storm drains 1,494,209 1,494,209 Unassigned 12,513,157 (62,201) 12,450,956
Total fund balances 12,516,874 202,719 233,100 3,094,778 16,047,471 Total liabilities, deferred inflows of
resources and fund balances $15,818,896 $ 10,202,385 $ 3,549,267 $ 4,544,515 $ 34,115,063 Total Governmental Fund Balances $ 16,047,471
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 22,290,553 Long-term notes receivable do not provide current financial resources and are therefore reported as deferred inflows of resources 16,617,175 The net pension liability and related deferred outflows of resources and deferred inflows of resources do not provide or use current financial resources and are not reported in the funds (5,760,380) 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 (377,749)
Net Position of Governmental Activities $48,817,070
The accompanying notes are an integral part of these financial statements. - 15 -
City of Fortuna
GOVERNMENTAL FUNDS
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
For the year ended June 30, 2022
City Other Total
General HOME Housing Governmental Governmental
Fund Grants Fund Funds Funds
REVENUES
Property taxes $ 610,620 $ - $ $ $ 610,620
Sales taxes :
4,339,191 - 4,339,191
Other taxes 45,512 - - 45,512
Transient occupancy taxes 951,039 - 951,039
Property tax in lieu VLF 1,354,606 - - 1,354,606
Licenses and permits 951,453 - : 951,453
Fines and forfeits 30,896 - 30,896
Intergovernmental 864,904 1.486.127 2,351,031
Interest (32,949) (2,595) (2,437) (37,446) (75,427)
Charges for services 676,891 195,321 872,212
Miscellaneous 1,613,380 21,169 119,136 1,753,685
Total revenues 11,405,543 (2,595) 18,732 1,763,138 13,184,818
EXPENDITURES
Current:
General government 2,410,773 1,101 2,411,874
Public safety 4,754,485 4,754,485
Public works & streets 453,723 1,666,909 2,120,632
Parks and recreation 1,697,162 1,697,162
Health and welfare 63,515 63,515
Business development and housing
Capital outlay -
-
Debt service:
Principal 16,218 16,218
Interest
Total expenditures 9,316,143 1,101 1,746,642 11,063,886 Excess (deficiency) of revenues
over expenditures 2,089,400 (3,696) 18,732 16,496 2,120,932
OTHER FINANCING SOURCES (USES)
Capital lease financing
Transfers in 393,211 - 152,638 545,849
Transfers out (551,385) (551,385)
Total other financing sources (uses) (158,174) 152,638 (5,536) Net change in fund balances 1,931,226 (3,696) 18,732 169,134 2,115,396 Fund balances, July 1 10,585,648 206,415 214,368 2,925,644 13,932,075 Fund balances, June 30 $ 12,516,874 $ 202,719 $ 233,100 $ 3,094,778 $16,047,471 The accompanying notes are an integral part of these financial statements. - 16 -
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, 2022
Net change in fund balances - total governmental funds $ 2,115,396 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 ($1,060,247) exceeds depreciation ($1,690,926) in the current period. (630,679)
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. (5,314)
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. 196,597
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. 480,837 Changes in net position of governmental activities 2,156,837 The accompanying notes are an integral part of these financial statements. - 17 -
City of Fortuna
STATEMENT OF NET POSITION
Proprietary Funds
June 30, 2022
Enterprise Funds
Nonmajor
Water Wastewater Transit Fund Total
ASSETS
Current assets:
Cash and investments $ 8,077,237 $ 13,976,239 $ 92,574 $ 22,146,050 Net receivables 206,801 374,246 - 581,047
Inventory 132,838 19,080 151,918
Total current assets 8,416,876 14,369,565 92,574 22,879,015 Noncurrent assets:
Capital assets:
Capital assets not being depreciated:
Land 26,996 126,695 153,691
Construction in progress 440,443 1.728,875 2,169,318
Total capital assets not being depreciated 467,439 1,855,570 2,323,009 Capital assets being depreciated:
Collection system 9,299,609 9,299,609
Pumping system : 1,137,677 1,137,677
Treatment system 24,238,907 24,238,907
Distribution and treatment system 20,171,984 20,171,984 Equipment 850,640 1,607,474 2,458,114
Vehicles 980,776 603,148 310,870 1,894,794
Less accumulated depreciation (9,115,565) (17,075,804) (200,179) (26,391,548) Total capital assets being depreciated 12,887,835 19,811,011 110,691 32,809,537 Total noncurrent assets 13,355,274 21,666,581 110,691 35,132,546 Total assets 21,772,150 36.036,146 203,265 58.011,561
DEFERRED OUTFLOWS OF RESOURCES
Pension plan deferrals 494,250 666,273 46,827 1,207,350
LIABILITIES
Current liabilities:
Accounts payable 59,978 95,751 1,734 157,463
Compensated absences 1,786 5,608 15 7,409
Deposits 73,645 - - 73,645
Accrued interest payable 46,331 87,930 134,261
Premium from sale of bonds, net 17,758 46,487 64,245
Bonds and Notes due within one year 220,000 350,000 570,000 Total current liabilities 419,498 585,776 1,749 1,007,023 Noncurrent liabilities:
Compensated absences 5,548 17,421 46 23,015
Net pension liability 748,060 1,008,414 106,342 1,862,816 Revenue bonds and notes 4,355,000 7,045,000 11,400,000
Premium from sale of bonds, net 435,073 1,138,967 1,574,040 Total noncurrent liabilities 5,543,681 9,209,802 106,388 14,859,871 Total liabilities 5,963,179 9,795,578 108,137 15,866,894
DEFERRED INFLOWS OF RESOURCES
Pension plan deferrals 479,953 646.995 68,231 1,195,179 Total deferred inflows of resources 479,953 646,995 68,231 1,195,179
NET POSITION
Net investment in capital assets 8,780,274 14,271,581 110,691 Restricted 23.162.546
-
Unrestricted 7,042.994 11.988.265 (36.967) 18.994.292
Total net position $ 15,823,268 $ 26,259,846 $ 73.724 S 42,156,838 The accompanying notes are an integral part of these financial statements. - 18 -
City of Fortuna
STATEMENT OF REVENUES. EXPENSES. AND CHANGES IN FUND NET POSITION Proprietary Funds
June 30, 2022
Enterprise Funds
Nonmajor
Water Wastewater Transit Fund Total
OPERATING REVENUES
Sales of water $ 2,344,974 $ $ - $ 2,344,974
Service fees 97,630 3,721,586 12,943 3,832,159
Miscellaneous 27,024 67,137 2,434 96,595
Total operating revenues 2,469,628 3,788,723 15,377 6,273,728
OPERATING EXPENSES
Employee services 934,876 1,104,824 167,848 2,207,548
Contract services 483,322 884,851 174,197 1,542,370
Purchased power 221,488 287,277 508,765
Supplies and materials 978,291 776,162 23,912 1,778,365 Depreciation and amortization 613,449 847,929 19,317 1,480,695 Total operating expenses 3,231,426 3,901,043 385,274 7,517,743 Operating income (loss) (761,798) (112,320) (369,897) (1,244,015)
NON-OPERATING REVENUES (EXPENSES)
Operating subsidiaries 1,136,806 1,004,987 343,934 2,485,727 Interest expense (187,425) (355,119) (542,544)
Interest and investment revenue (101,512) (178,364) (1,376) (281,252) Net nonoperating revenues (expenses) 847,869 471,504 342,558 1,661,931 Income (loss) before contributions and
transfers 86,071 359,184 (27,339) 417,916
Contributions and transfers:
Transfer in 5,536 5,536
Transfer out
Net contributions and transfers 5,536 5,536
Change in net position 86,071 359,184 (21,803) 423,452
Total net position, July 1 15,737,197 25,900,662 95,527 41,733,386 Total net position, June 30 $ 15,823.268 $ 26.259,846 $ 73.724 $ 42,156,838 The accompanying notes are an integral part of these financial statements. - 19 -
City of Fortuna
PROPRIETARY FUNDS
STATEMENT OF CASH FLOWS
For The Year Ended June 30, 2022
Business-Type Activities-Enterprise Funds
Nonmajor
Water Wastewater Transit Fund Total
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers $ 2,467,700 $ 3,770,678 $ 15,377 $ 6,253,755 Payments to suppliers (1,683,071) (1,996,734) (362,772) (4,042,577) Payments to employees for services (1,196,385) (1.448,747) (197,758) (2,842,890) Net cash provided by operating activities (411.756) 325,197 (545,153) (631,712)
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Operating subsidiaries 1,136,814 1,005,058 343,934 2,485,806 Transfers in 5,536 5,536
Transfers out
Net cash provided (used) by noncapital financing activities 1,136,814 1,005,058 349,470 2,491,342
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Capital asset dispositions (37,523) 31,682 (5,841)
Payments on long-term debt principal (227,758) (386,489) (614,247) Interest paid on long-term debt (189,525) (358,519) (548,044) Purchases of capital assets (909,608) (741,059) (1,650,667) Net cash provided (used) by capital
and related financing activities (1,364,414) (1,454,385) (2,818,799)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received (101,512) (178,364) (1,376) (281,252) Net cash provided by investing activities (101,512) (178,364) (1,376) (281,252) Net increase (decrease) in cash and cash equivalents (740,868) (302,494) (197,059) (1,240,421) Cash and equivalents, July 1 8,818,105 14,278,733 289,633 23,386,471 Cash and equivalents, June 30 $ 8,077,237 $ 13,976,239 $ 92,574 $ 22,146,050 RECONCILIATION OF OPERATING INCOME TO Water Wastewater Nonmajor NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES Fund Fund Transit Fund Total Operating income $ 1761798)5 (112,320) $ (369,897) $ (1,244,015) Adjustments to reconcile operating income
to net cash provided (used) by operating activities
Depreciation and amortization expense 613,449 847,929 19,317 1,480,695 (Increase) decrease in deferred outflows of resources (150,096) (202,337) (14.221) (366,654) Accounts receivable (1,928) (18,045) (19,973)
Inventories (12,442) 825 (11,617)
Increase (decrease) in accounts payable 16,947 (49,269) (164,663) (196,985) Compensated absences (6,654) (367) (798) (7,819)
Deferred inflows of resources 445,408 600,427 63,320 1,109,155 Net pension liability (550,167) (741.646) (78,211) (1,370,024) Customer deposits (4,475) (4,475)
Net cash provided (used) by operating activities $ (411,756) $ 325,197 $ (545,153) S (631,712) Noncash Transactions
Bond premium amortization 17.758 S 46,487 $ 64,245
The accompanying notes are an integral part of these financial statements. - 20-
City of Fortuna
STATEMENT OF FIDUCIARY NET POSITION
AGENCY FUNDS
June 30, 2022
Private-Purpose
Trust Fund
Successor
Agency
to the RDA
Fund
Assets
Cash and investments $ 311,692
Due from other governments 105,845
Total assets 417,537
Liabilities
Accrued expenses 43,731
Long-term debt:
Due within one year 280,000
Due more than one year 9,648,086
Total liabilities 9,971,817
Net position (deficit):
Held in trust for private purposes $ (9,554,280)
The accompanying notes are an integral part of these financial statements. - 21 -
City of Fortuna
PRIVATE PURPOSE TRUST FUND
STATEMENT OF CHANGES IN NET POSITION
For the year ended June 30, 2022
Private-Purpose
Trust Fund
Successor
Agency
to the RDA
Fund
Additions
Property tax $ 842,709
Investment earnings 1
Total additions 842,710
Deductions
Current
Principal 265,000
Interest & other charges 92,353
Total deductions 357,353
Increase (decrease) in net position 485,357
Net position - beginning _(10,039,637)
Net position - ending $ (9,554,280)
The accompanying notes are an integral part of these financial statements. - 22 -
City of Fortuna
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2022
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 a separate legal entity created was dissolved effective 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 or 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 are 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 year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.
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. - 23-
City of Fortuna
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2022
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) C. Measurement Focus, Basis of Accounting and Basis of Presentation (continued) In the fund financial This means hat al a 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 their balance sheets. Proprietary fund type operating statements present increases (revenues) 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 or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to 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 measurable 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 major 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 tatements. Exceptions to this general rule are payments-in-lieu of taxes and other charges betwee he government's water and wastewater function and various other functions of the governmen Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned.
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 an contributions. Internally dedicated resources are reported as general revenues rather than as progran revenues. Likewise, general revenues include all taxes. - 24 -
City of Fortuna
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2022
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) C. Measurement Focus, Basis of Accounting and Basis of Presentation (concluded) 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.
Bond Premiums and 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 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 Successor 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.
Investments Authorized by the California Government Code and the Town's Investment Policy Maximum
Maximum Investment
Maximum Percentage in One
Authorized Investment Type Maturity of Portfolio Issuer _ocal Agency Investment Fund (State Pool N/A None $75 million N/A None None
N/A None None
edium-term Corporate Not 5 years 30% None
sured Passbook on Demand Deposits with Ban
N/A None $250,000
2 years None $250,000
oreign/Domesti 180 days 40% None
lutual Funds (must be comprised of eligib
N/A None None
N/A None None
City of Fortuna
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2022
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) D. Assets, Liabilities, Net Position or Equity (continued) Receivables and Payables
Activity between funds that are representative of lending/borrowing arrangements outstanding at the 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 are not expendable available financial resources.
All trade and property tax receivables are not shown net of an allowance for uncollectibles.
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.
Leases Receivable
The City is a lessor for leases of ground space. The City recognizes leases receivable and deferred inflows of resources in the financial statements. Variable payments based on future performance of the lessee or usage of the underlying asset are not included in the measurement of the lease receivable.
At the commencement of a lease, the City initially measures the lease receivable at the present value of payments expected to be received during the lease term. Subsequently, the lease receivable is reduced by the principal portion of lease payments received. The deferred inflows of resources are initially measured as the initial amount of the lease receivable, adjusted for lease payments receive at or before the lease commencement date. Subsequently, the deferred inflows of resources are recognized as revenue over the life of the lease term in a systematic and rational method.
Key estimates and judgments include how the City determines (1) the discount rate it uses to discount the expected lease receipts to present value, (2) lease term, and (3) lease receipts.
The City uses its estimated incremental borrowing rate as the discount rate for leases.
The lease term includes the non-cancellable period of the lease. Lease receipts included in the measurement of the lease receivable is composed of fixed payments from the lessee. - 26 -
City of Fortuna
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2022
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) D. Assets, Liabilities, Net Position or Equity (continued) 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 fund nanto future menunting periods and are recorded as prepaid items in both government wide and Capital Assets
Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, 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 Impiementation 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
Compensated Absences and Other Post-Employment Benefits (OPE) 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 Retirement 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. - 27 -
City of Fortuna
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2022
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) D. Assets, Liabilities, Net Position or Equity (continued) Bond Premiums Discounts/Issuance Costs For Governmental-Wide Financial Statements and Pursuant to GASB Statement 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, and GASB Statement 65, Items Previously Reported as Assets and Liabilities, the City recognizes 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 Public Employees Retirement System (PERS) and additions to or 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 payable in accordance with the benefit terms. Investments are reported at fair value.
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.
Net Position is the excess of all City 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:
Net Investment in Capital assets describes the portion of Net Position that 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 that is restricted as to use by the terms and conditions of agreements outside parties, governmental regulations, laws, or other restrictions that the City cannot unilaterally alter. These principally include developer fees received for use on capital projects, debt service 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. - 28 -
City of Fortuna
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2022
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (concluded) D. Assets, Liabilities, Net Position or Equity (concluded) 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 are those that can only be used for a specific purpose as determined by the City Council. Such may beloved 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 or 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, 2022. Deficits will be covered by future revenues and/or General Fund transfers.
Special Revenue Funds
Fund 240 Abatement
Fund 300 Special Grants
Fund 250 Business Improvement
The Special Revenue funds are expected to have their deficit eliminated through grant eimbursements for prior year expenditures and transfers from the General Fund.
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-wid statements of net position. One element of that reconciliation explains that "capital assets are no financial resources and are not reported in the funds." The details of this $22,290,553 difference are as follows:
Capital assets $ 37,297,071
Accumulated depreciation (15,006,518)
Net adjustment to increase fund balance — total governmental funds to arrive at net position - governmental activities $ 22,290,553 - 29 -
City of Fortuna
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2022
NOTE 2 - RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS (concluded) A. Explanation of Certain Differences Between the Governmental Fund Balance Sheet and the Government-wide Statement of Net Position (concluded)
Another element of the reconciliation explains that "long-term liabilities" are not due and payable in the as reperiod and are therefore not reported in the funds. The details of this (377, 749) difference are Long-Term Debt Obligations:
Capital leases $ (8,110)
Unpaid vacation and sick leave (369,639)
Net adjustment to decrease fund balance — total governmental funds to arrive at net position - governmental activities $ (377,749) 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 element 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 $41,441 difference and other significant components of the difference are as follows:
Capital outlay $ 1,060,247
Depreciation expense (1,690,926)
Repayment of long-term debt principal (5,314)
Long-term notes receivable 196,597
Net pension liability and related deferrals 480,837
Net adjustment to decrease net changes in fund balances — total governmental funds to arrive at changes in net position - governmental activities $ 41,441 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 budgetary 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 $1,300,509.
- 30 -
City of Fortuna
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2022
NOTE 4 - DETAILED NOTES ON ALL FUNDS
A. Cash Equivalents and Investments
Deposits and investments consisted of the following at June 30, 2022:
Statement of net position:
Cash and investments $ 34,893,608
Successor Agency (Fiduciary Funds) 311.692
Total cash and investments 35,205,300
Maturity 12
Cash and investments consist of the following: Months or Less Cash on hand 1,465
Deposits with financial institutions 11,378,674
Humboldt County 8,738,610
Investments in LAIF 15,086,551
Total cash and investments $ 35,205,300
California Law requires 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 piaces 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 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 AAA.
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 Fair Value Measurements
GASB Statement No. 72, Fair Value Measurements and Application, establishes a fair value hierarchy consisting of three broad levels: Level 1 inputs consist of quoted prices (unadjusted) for identical assets and liabilities in active markets that a government can access at the measurement date, Level 2 inputs consist of inputs other than quoted prices that are observable for an asset or liability, either directly or indirectly, that can include quoted prices for similar assets or liabilities in active or inactive markets, or market-corroborated inputs, and Level 3 inputs have the lowest priority and consist of unobservable inputs for an asset or liability. The valuation method used for rental properties is the Leased Fee Market method, which is dependent on the income generated from the rental properties. 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.
- 31 -
City of Fortuna
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2022
NOTE 4 - DETAILED NOTES ON ALL FUNDS (continued)
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 HOME & Wastewater
General City Housing Nonmajor Total and Transit
Fund Funds Funds Governmental Enterprise
Receivables:
Taxes $ 2,055,762 $ - $ $ 2,055,762 $ $
Accounts 1,234,913 393,072 1,627,985 206,801 374.246
Subtotal current 3.964,875 393.072 3.683,747 206,801 374,246 Loan receivable 1,964,893
Notes receivable 13,314,732 1,337,550 14,653,602
Net total receivables $5,256.888 $ 13,314,732 $ 1,730,622 $ 20.302,242 $ 206,801 $ 374,246 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 Long-term notes receivable of $14,653,602 consists of two notes relating to affordable housing projects for $9,998,565 (with accumulated and unpaid interest) and various other notes for $4,655,037 relating to business development and redevelopment projects. The notes for $9,998,565 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 $1,964,893 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 successor 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 in semiannual installments to the extent that funds are available under the formula- based method specified in 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. Leases Receivable
The City leases ground space to Verizon Wireless. The Lease began in July 1996 and has a term of 40 years and expires on June 30, 2036. Under the lease, Verizon pays the City $4,529 per month. Rent is increased every 12 months on July 1st by the change in the consumer price index.
The lease receivable is measured as the present value of the future minimum rent payments expected to be received during the lease term at a discount rate of 3%. The rate was determined using the estimated incremental borrowing rate.
In fiscal year 2022, the City recognized $71,568 of lease revenue and $740 of interest revenue under the leases. The expected future minimum lease payments to be received are as follows:
- 32 -
City of Fortuna
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2022
NOTE 4 - DETAILED NOTES ON ALL FUNDS (continued)
C. Leases Receivable (concluded)
Fiscal Year End Principal Interest Total
6/30/23 $ 55,751 $ 769 $ 56,520
6/30/24 57,987 801 58,788
6/30/25 60,308 832 61,140
6/30/26 62,709 867 63,576
6/30/27 65,222 898 66,120
6/30/28 67,838 934 68,772
6/30/29 70,548 972 71,520
6/30/30 73,364 1,012 74,376
6/30/31 76,300 1,052 77,352
6/30/32 79,353 1,095 80,448
6/30/33 82,525 1,139 83,664
6/30/34 85,829 1,183 87,012
6/30/35 89,260 1,232 90,492
6/30/36 92,836 1,280 94,116
Total $ 1,019,830 $ 14,066 1,033,896
Balance Balance
7/1/21 Increases Decreases 6/30/22
Lease Deferred Inflows Amortization $ 1,073,438 $ 71,568 $ 1,001,870 D. Capital Assets
Capital asset activity for the year ended June 30, 2022 was as follows:
Balance Balance
7/1/21 Increases Decreases 6/30/22
Governmental-type Activities
Capital assets not being depreciated:
Land $ 666,950 $ 318,016 $ 3,468,380 $ 984,966
Construction in progress 3,883,260 130.310 545,190
Total capital assets not being depreciated: 4,550,210 448,326 3,468,380 1,530,156 Capital assets being depreciated:
Buildings 4,535,329 4,535,329
Improvements 1,967,516 1,967,516
50,448 ...
Equipment 1,656,111 1.746159
Vehicles 1,446,171
Infrastructure-primarily street systems 22.081,487 4,029,853 26,111,340 Total capital assets being depreciated: 31,686,614 4.080,301 35.766,915 Less accumulated depreciation for:
Buildings (3,294,889) (132,682) (3,427,571)
Improvements (1,252,349) (64,133) : (1,316,482)
Equipment (1,518,443) (60,734) (1,579,177)
Vehicles (1,156,495) (127,810) (1,284,305)
Infrastructure (6,093.416) (1,305,567) (7,398,983)
Total accumulated depreciation (13,315,592) (1,690,926) (15,006.518) Net capital assets being depreciated, net 18,371,022 2,389.375 20.760,397 Governmental activities capital assets, net $ 22,921,232 $ 2,837,701 $ 3,468,380 $ 22,290,553 - 33-
City of Fortuna
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2022
NOTE 4 - DETAILED NOTES ON ALL FUNDS (continued)
D. Capital Assets (concluded)
Balance Balance
7/1/21 Additions Deletions 6/30/22
Business-type Activities
Capital assets not being depreciated:
Land $ 153,691 $ $ - $ 153,691
Construction in progress 1.935.986 304,629 71,297 2,169.318 Total capital assets not being depreciated: 2.089,677 304,629 71,297 2,323,009 Capital assets being depreciated:
Wastewater collection system 9,290,233 9,376 9,299,609
Wastewater pumping 1,137,677 1,137,677
Wastewater treatment plant 23,460,374 778,533 24,238,907 Water treatment and distribution 20,092,983 79,001 20,171,984 Equipment 2,405,092 58,860 5,838 2,458,114
Vehicles 1.397,392 497,402 1,894,794
Total capital assets, being depreciated: 57.783.751 1,423,172 5,838 59,201,085 Less accumulated depreciation for:
Wastewater system (16,196,192) (884,596) (4,982) (17,075,805) Water system (8,539,638) (576,782) (856) (9,115,564)
Transit system (180,862) (19,317) (200,179)
Total accumulated depreciation (24.916,692) (1,480,695) (5,838) (26.391,548) Net capital assets being depreciated, net 32,867,059 (57.523) 32,809,537 Business-type activities capital assets, net $ 34,956,736 247,106 71,297 $ 35,132,546 Depreciation was charged to functions/programs of the City as follows:
Government Activities:
Streets $ 1.690,926
Total depreciation expense - governmental activities $ 1,690,926 Business-type Activities:
Water $ 613,449
Wastewater 847,929
Transit 19.317
Total depreciation expense - business-type activities $ 1,480,692 E. Inter-fund Transfers and Intergovernmental Expenditures 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:
Transfer In Transfer Out
General Fund 393,211 $ 551,385
Transit 5,530
Abatement 20,000
Gas Tax 132,638
Total $ 551,385 $ 551,385
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.
- 34 -
City of Fortuna
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2022
NOTE 4 - DETAILED NOTES ON ALL FUNDS (continued)
F. Long-Term Debt
Water Revenue Bonds - During the 2007 fiscal year, the City's Public Financing Authority issued Sales roament plane prayed or secile The Fortuna Poic Francing An a red, 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 beer 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, 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.
Future debt service in the Wastewater Revenue Refunding Bonds, Series 2017 is as follows:
Period Ending Principal Interest Total Service
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
Total $ 7,395,000 3,123,344 $ 10,518,344
- 35-
City of Fortuna
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2022
NOTE 4 - DETAILED NOTES ON ALL FUNDS (continued)
F. Long-Term Debt (continued)
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 from 3.375% to 5.0%. The net proceeds of $6, 798,087 from the Wastewater Revenue Refunding Bonds, Series 2017 (including a $532,742 premium and after payment of $218,020 in underwriting fees and other issuance costs) were used to redeem the refunded bonds soon thereafter. The City refunded the 2007 Water revenue 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.
Future debt service in the Water Revenue Refunding Bonds, Series 2017 is as follows:
Period Ending Principal Interest Total
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
Total 4,575,000 1,504,875 6,079,875
Capital Lease and Loan Obligations - In fiscal year 2016, the City entered into two capital leases and a Future Loan
Year Ending June 30, Payment
2023 $ 8,110
Thereafter
Total future minimum lease payments 8,110
Less amount representing interest
Net present value future minimum payments 8,110
- 36 -
City of Fortuna
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2022
NOTE 4 - DETAILED NOTES ON ALL FUNDS (concluded)
F. Long-Term Debt (concluded)
Changes in Long-term liabilities - Long-term debt activity for the 2022 fiscal year was as follows:
Beginning Ending Due Within
Governmental Type Balance Additions Reduction Balance One year PGE Loan $ 24,328 $ $ 16,218 $ 8,110 $ 8,110
Compensated absences 348,107 21,532 369,639
Total $ 372,435 21,532 $ 16,218 $ 377,749 8,110
Beginning Ending Due Within
Business Type Balance Additions Deductions Balance One year 2017 Water Bonds $ 4,785,000 $ $ 210,000 $ 4,575,000 $ 210,000 2017 Wastewater Bonds 7,735,000 - 340,000 7,395,000 220,000 Bond premiums 1.702.533 64,245 1,638,288 64,245
Total $14,222,533 $ 614,245 $13,608,288 $ 494,245
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 $ - $ 7,409 $ 7,409
Non-current portion 369,639 23.015 392,654
Total $ 369,639 $ 30,424 $ 400,063
Governmental Business-Type
Activities Activities Totals
Beginning balance $ 348,107 $ 38,243 $ 386,350
Additions 21,532 120 21,652
Deletions 7,939 7,939
Ending Balance $ 369,639 $ 30,424 $ 400,063
NOTE 5 - OTHER INFORMATION
A. Risk Management
- 37-
City of Fortuna
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2022
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 insures 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 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.
- 38-
City of Fortuna
NOTES TO BASIC FINANCIAI STATEMENTS
June 30, 2022
NOTE 5 - OTHER INFORMATION (continued)
E. Public Employee Pension Plans
lan Description - The plans are a cost-sharing multiple-employer defined benefit pension plar administered by the California Public Employees Retirement System (CalPERS). The CalPERS is governed by a 13 member Board of Administration with six elected members, three appointed members and four ex 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 CaPERS 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 CaPERS 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, 2022, the City reported a liability of $6,365,252 for its proportionate share of the net pension liability for all plans. The net pension liability was measured as of June 30, 2021, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2020. 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, 2022, the City's proportion was 0.11769 percent compared to 0.10153 at June 30, 2021. For the June 30, 2022 fiscal year, the City recognized pension expense of $1,749,692. At June 30, 2022, 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 $ 2,858,052 $ Differences between actual and expected experience 880,818 Changes in assumptions
Net differences between projected and actual earnings
on plan investments 4,766,346
Change in employer's proportion 112,664 83,266
Change in proportions and differences between actual
contributions and proportionate share of contributions 19,618 267,313 Total $ 3,871,152 $ 5,116,925
- 39 -
City of Fortuna
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2022
NOTE 5 - OTHER INFORMATION (continued)
E. Public Employee Pension Plans (continued)
The $2,858,052 reported as deferred outflows of resources is related to pensions from City contributions Deferred Outflows
(Inflows) of
Year Ending June 30. Resources
2023 (813,012)
2024 (909,922)
2025 (1,065,687)
2026 (1,315,204)
2027
Thereafter
Total $ (4,103,825)
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 pension liability was based on the following actuarial methods and assumptions:
Valuation Date June 30, 2020
Measurement Date June 30, 2021
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 Derived using CaPERS membership data for all funds Post Retirement Benefit Increase Contract COLA up to 2.75% until purchasing power protection allowance floor on power applies, 2.75% thereafter
The mortality table used was developed based on CaPERS' 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.
Changes of Assumptions - There were no changes of assumptions for measurement date June 30, 2021.
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 rate 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 68 section.
- 40 -
City of Fortuna
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2022
NOTE 5 - OTHER INFORMATION (continued)
E. Public Employee Pension Plans (continued)
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 allocaton. These rates of return are net of administrative expenses.
New Real Return Real Return
Strategic Years 1-10 Years 11+
Asset Class (*) Ailocation (1) (2)
Global Equity 50.0% 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 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 each Plan, as well as what the City's proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1- percentage point higher than the current rate:
All Plans
1% Decrease 6.15%
Net Pension Liability $12,088,019
Current Discount Rate 7.15%
Net Pension Liability $6,365,252
1% Increase 8.15%
Net Pension Liability $1,647,507
The expected average remaining service lifetime (EARSL) is calculated by dividing the total future service years by the total number of plan participants (active, inactive, and retired) in the Public Agency Cost-Sharing Multiple-Employer Plan (PERF C).
- 41-
City of Fortuna
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2022
NOTE 5 - OTHER INFORMATION (continued)
E. Public Employee Pension Plans (concluded)
The EARSL for PERF C for the measurement period ending June 30, 2021, is 3.7 years, which was obtained by dividing the total service years of 561,622 (the sum of remaining service lifetimes of the active employees) by 150,648 (the total number of participants: active, inactive, and retired) in PERF C Inactive employees and retirees have remaining service lifetimes equal to 0. Total future service is based on the members' probability of decrementing due to an event other than receiving a cash refund Pension Plan Fiduciary Net Position - Detailed information about each pension plan's fiduciary net position is available in the separately issued CaPERS financial reports.
F. Restricted Net Position and Non-spendable Fund Balances Restricted Net Position
The $3,592,798 restricted amount for debt service, affordable housing, streets and other in the governmental activities statement of net position represents amounts to be used only for specific purposes and for which restrictions are imposed by laws, formal agreements or other governments and primarily relate to housing funds restricted by law to only certain specified uses. The $0 restricted for business-type activities represents 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 $ 3,717 $
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 Successor 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.
- 42-
City of Fortuna
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2022
NOTE 5 - OTHER INFORMATION (continued)
G. Successor Agency Trust for Assets of Former Redevelopment Agency (continued) 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.
Finance) and others are valid enforceable obligations payable by the successor agency trust under the requirements of the Bill.
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 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 November 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.
- 43 -
City of Fortuna
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2022
NOTE 5 - OTHER INFORMATION (continued)
G. Successor Agency Trust for Assets of Former Redevelopment Agency (continued) 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.
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 ranging 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 Period Ending Principal Interest Debt Service
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
$ 7,705,000 $ 2,647,244 $ 10,352,244
Loan City of Fortuna
On November 1, 2013, the City received from the State Department of Finance (DOF) a Finding of former redevelopment agency and the City be qualified as enforceable obligations of the Successo Agency under the laws governing the dissolution of the former agency. In addition, there is a - 44 -
City of Fortuna
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2022
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 approval of this loan as an enforceable obligation of the Successor Agency, but on May 16, 2014, the DOF rescinded this denial and the loan was approved as an enforceable obligation with an effective date of July 1, 2014, which date has approval of both the DOF and the Successor Agency's Oversight Board. The City and the Successor Agency reinstated this loan for financial reporting purposes in fiscal 2015. The original repayment schedule was as follows:
Year Ending June 30, Principal Interest Total
2023 293,807 6,193 300,000
2024-2030 1,671.086 84,859 1.755.945
Total $ 1,964,893 $ 91,052 2,055,945
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, 2022 were:
Beginning Ending Due Within
Private Purpose Trust Balance Additions Deductions Balance One year 2018 Tax Allocation Bonds $ 7,970,000 $ 265,000 $ 7,705,000 280,000 Bond premium 268,317 10,125 258,192 10,125
Loan City of Fortuna 2.063,220 98,327 1,964.893
$10,301,537 $ 373,452 $9,928,085 $ 290,125
- 45-
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, 2022
2022
Variance
With Final
Budgeted Amounts Budget
Original Final Actual Over (Under)
REVENUES
Property tax $ 496,200 $ 496,200 610,620 $ 114,420
Sales tax 3,589,200 3,589,200 4,339,191 749,991
Other taxes 35,000 35,000 45,512 10,512
Transient occupancy taxes 550,000 550,000 951,039 401,039 Property tax in lieu VLF 1,306,000 1,306,000 1,354,606 48,606 Licenses and permits 906,500 906,500 951,453 44,953
Fines and forfeitures 42,000 42,000 30,896 (11,104)
Intergovernmental 782,212 782,212 864,904 82,692
Investment earnings 109,676 109,676 (32,949) (142,625)
Charges for services 486,200 486,200 676,891 190,691
Miscellaneous 2,322,000 2,322,000 1,613,380 (708,620)
Total revenues 10,624,988 10,624,988 11,405,543 780,555
EXPENDITURES
General government 3,675,619 3,675,619 2,410,773 1,264,846 Public safety 4,386,841 4,386,841 4,754,485 (367,644)
Public works and streets 1,084,011 1,084,011 453,723 630,288 Parks and recreation 1,470,181 1,470,181 1,697,162 (226,981) Total expenditures 10,616,652 10,616,652 9,316,143 1,300,509 Excess (deficiency) of revenues
over expenditures 8,336 8,336 2,089,400 2,081,064
OTHER FINANCING SOURCES (USES)
Transfers in 723,168 723,168 393,211 (329,957)
Transfers out (842,016) (842,016) (551,385) 290,631
Total other financing sources and (uses) (118,848) (118,848) (158,174) (39,326) Net change in fund balance $ (110,512) $ (110,512) 1,931,226 $ 2,041,738 Fund balance - beginning (restated) 10,585,648
Fund balance - ending $ 12,516,874
- 46-
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, 2022
2022
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 (2,437) (2,937)
Charges for services
Miscellaneous 21,169 21,169 21,169
Total revenues 21,669 21,669 18,732 (2.937)
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 (3,331) (3,331) 18,732 22,063
OTHER FINANCING SOURCES (USES)
Transfers in -
Transfers out :
-
Total other financing sources and (uses)
Net change in fund balance $ (3,331) $ (3,331) 18,732 $ 22,063 Fund balance - beginning 214,368
Fund balance - ending $ 233,100
- 47-
City of Fortuna
SCHEDULE OF THE LOCAL GOVERNMENT'S PROPORTIONATE
SHARE OF THE NET PENSION LIABILITY - ALL PLANS
Miscellaneous Risk Pool
Fiscal Year End 2022 2021 2020 2019 2018 2017 2016 2015 Measurement Date 2021 2020 2019 2018 2017 2016 2015 2014 Proportion of the net pension liability 0.07% 0.05737% 0.05650% 0.05732% 0.05653% 0.05635% 0.05626% 0.04767% Proportion share of the net pension liability $ 3,520,361 $ 6,242,335 $ 5,789,728 $ 5,523,979 $ 5,606,420 $ 4,875,960 $ 3,861,523 $ 2,966,501 Covered - employee payroll $ 2,363,708 $ 2,354,031 $ 2,259,591 $ 2,183,738 $ 1,961,439 $ 1,956,851 $ 1,916,943 $ 1,766,612 Proportionate share of the net pension liability
as percentage of covered-employee payroll 148.93% 149.85% 145.84% 144.23% 164.81% 143.54% 117.12% 92.41% 'lan fiduciary net position as a percentag
of the total pension liabilit 85.65% 42.44% 42.84% 42.91% 42.27% 42.67% 45.58% 43.93% Safety Risk Pool
Fiscal Year End 2022 2021 2020 2019 2018 2017 2016 2015 Measurement Date 2021 2020 2019 2018 2017 2016 2015 2014 Proportion of the net pension liability 0.05% 0.04416% 0.04277% 0.04322% 0.04151% 0.04146% 0.04050% 0.03896% Proportion share of the net pension liability $ 2,844,891 $ 4,804,296 $ 4,382,118 $ 4,164,545 $ 4,117,086 $ 3,587,924 $ 2,779,976 $ 2,424,153 Covered - employee payroll $ 1,783,149 $ 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 159.54% 115.33% 110.39% 108.73% 121.02% 105.63% 84.32% 75.51% Plan fiduriary net position as a percentage
of the total pension liability 84.58% 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.
-48-
City of Fortuna
SCHEDULE OF CONTRIBUTIONS - ALL PLANS
June 30, 2022
Fiscal Year End 2022 2021 2020 2019 2018 2017 2016 2015 Miscellaneous Risk Pool
Contractually required contribution
(actuarially determined) $ 751,290 $ 930,044 $ 663,266 $ 771,079 $ 510,867 $ 451,381 $ 427,550 $ 352,387 Contributions in relation to the actuarially
determined contributions (1,886,886) (930,044) (663,266) (771,079) (510,867) (451,381) (427,550) (352,387) Contribution deficiency (excess) S (1.135,596)
Covered - employee payroll $ 2,334,871 $ 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 32.18% 39.35% 28.18% 34.12% 23.39% 23.01% 21.85% 18.38% Safety Risk Pool 2022 2021 2020 2019 2018 2017 2016 2015 Contractually required contribution
(actuarially determined) $ 566,762 $ 556,264 $ 468,825 $ 544,179 $ 369,424 $ 322,559 $ 296,164 $ 250,264 Contributions in relation to the actuarially
determined contributions 971.16 (468,825) (544,179) (369,424) (322,559) (296,164) (250,264) Contribution deficiency (excess) (404,40
Covered - employee payroll $ 1,761,394 $ 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 32.18% 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.
- 49 -
SUPPLEMENTAL SECTION
City of Fortuna
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
June 30, 2022
Special Revenue
Revenue
Assets
Cash and investments $ 59,505 $ 36,744 $ 326,755 $ 717,087 $ (19,776) (2,046) 573,010 309,134 858,768 $ 2,889,263 Receivables:
Accounts receivable 84,115
Notes receivable
Total assets
Liabilities
Liabilities
Accounts payable 452 $ 2,569 $ $ 40,158 $ $ 4,326 $ 578 $ 48,083 Uneamed revenue
Due to other funds
Total liabilities 48,083
Deferred inflows of resources
Long-term notes receivable 11,050 355,692 970.808 1,337,550 Fund balances
Restricted for:
Capital projects :
CCC facility
Economic development 573,683 860.027 1.433,710
Public safety & streets 69,007 38,722 326,755 676,929 73,662 309,134 1,494,209 Debt service
Unrestricted (2,624)
Total fund balances 69.007 3B,722 326,755 676.929 73,662 (2,624) 573,683 309,134 860,027 2.925,295 Total liabiities & fund
balances 69.459 S 41,291 S 326,755 S 728,137 S 4,326 73,662 S (2,046) 929,375 S 309,134 S 1.830,835 S 4.310.928 City of Fortuna
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
June 30, 2022
Special Revenue
HOPS,
Rodeo, &
CDBG McClean Fish and STIP/TEA Abatement Capital Proj. Special Unrestricted Small Parks FEMA Wildlife Fund Fund Fund Grants Totals Assets
Cash and investments 224,819 $ 4,241 $ (18,118) (40,218) (105,535) $ (21,453) $ (94,208) $ (24,898) $ 2,813,893 Receivables:
Accounts receivable 393,072
Notes receivable 1,337,550
Total assets $ 4.544.515
Liabilities
Liabilities
Accounts payable $ 45,043 $ $ 13,225 $ 112,187
Unearned revenue
Due to other funds
Total liabilities 45,043 13,225 112,187
Deferred inflows of resources
Long-term notes receivable 1,337,550
Fund balances
Restricted for:
Capital projects
CCC facility 224.819
Economic development 4,241 1,662,770
Public safety & streets 1,494,209
Debt service
Unrestricted (1) (21,453) (38,123) — (62,201)
Total fund balances 224,819 4,241 (1) (21,453) (38,123) 3.094.776 Total liabilities & fund
balances 224,819 4,241 S 5,836 S 45.042 $ (21,453) S (24,898) S4,544,515 - 51 -
City of Fortuna
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
June 30, 2022
Special Revenue
Unrestricted Total
Special
Revenue
Funds
Revenues
Intergovernmental $ 110,586 1,958 $ 294,768 $ 243,341 $ $ $ 650,653 Property taxes
Charges for services 24,751 95,552 44,685 93 30,240 195,321 Special assessments (727)
Interest (442) (4,246) (34,583)
Miscellaneous 119,136
Total revenues 24,025 930,527
Expenditures
Current:
Public works & streets 68,719 205,639 1,867 413,465 250,000 939,690 Economic development 2,717 55,040 57,757
Housing
Sanitation and recycling 27,888 27,888
Capital outlay
Debt service:
Principal 16,218 16,218
Interest
Total expenditures 27,888 68,719 205,639 1,867 429,683 250,000 2,717 55,040 1.041.553 Excess (deficiency) of
revenues over expenditures (3,863) 26,391 40.439 (44,943) 91 (132,638) (6,838) (2,624) 22,890 (3,936) (5,995) (111,026) Other Financing Sources
(Uses)
Transfers in 132,638 132,638
Transfers out
Total other financing
sources (uses)
Net change in fund balances
Fund balances, July 1 2E2522222222
Fund balances, June 30
- 52 -
City of Fortuna
COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
June 30,2022
Special Revenue
HOPS,
Rodeo, &
CDBO McClean Fish and STIP/TEA Abatement Special
Unrestricted Small Parks Catal ra Marking in
Revenues
Intergovernmental 5,000 $ 44,750$ $ 1,486,127
Charges for services
Special assessments :
Interest (2,863) (37,446)
Miscellaneous 119,136
Total revenues (2,863) 5,000 450,848 90,615 52,305 1,763,138 Expenditures
Current:
ublic works & street 44,750 403,796 50,541 75,725 1,514,502 Economic developmer 5,759 63.516
Public safety (1) (1)
Sanitation and recycling : : 124,519 152,407
Capital outlay
Debt service:
Principal 16,218
Interest
Total expenditures 5.759 44,750 124,519 403,796 (1) 50,541 75.725 1.746,642 Excess (deficiency) of
revenues over expenditures (2,863) (759) 67.437 47,052 40,074 (23,420) 16,496 (user Financing Sources
Transfers in 20,000 152,638
Transfers out
Total other financing
sources (uses) 20,000 152,638
- -
Net change in fund balances (2,863) (759) 67,437 47,052 20,001 40.074 (23.420) 169.134 (40.074) (14,703) 2,925.644
(38.123) $ 3,094,778
- 53-
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, 2022
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
Miscellaneous 135 135
Total revenues 29,000 29,000 27,302 (1,698)
Expenditures
Sanitation and recycling 40,479 40,479 17,844 22,635
Total expenditures 40,479 40,479 17,844 22,635
Excess (deficiency) of revenues
over expenditures $ (11,479) $ (11,479) 9,458 $ 20,937
Fund balance - beginning 63,414
Fund balance - ending $ 72,872
- 54 -
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, 2022
Variance
With Final
Budgeted Amounts Budget
Original Final Actual Over (Under)
Revenues
Charges for services: $ 46,000$ 46,000 $ 9,482 $ (36,518) Interest 254 581
Total revenues 46,000 46,000 9,736 (35,937)
Expenditures
Public works and streets 73,316 73,316 70,817 2,499
Total expenditures 73,316 73,316 70,817 2,499
Excess (deficiency) of revenues
over expenditures (27,316) (27,316) (61,081) (33,438)
Other financing sources (uses)
Transfers in (out) - - -
Net change in fund balance (27,316) $ (27,316) (61,081) 5 (33,438) Fund balance - beginning 73,412
Fund balance - ending $ 12,331
- 55 -
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, 2022
Variance
With Final
Budgeted Amounts Budget
Original Final Actual Over (Under)
Revenues
Charges for services: $ 24,000 $ 24,000 $ 44,685 • $ 20,685 Interest (4,246) (4,246)
Total revenues 24,000 24,000 40,439 16,439
Expenditures
Sanitation and recycling - -
Total expenditures -
Excess (deficiency) of revenues
over expenditures 24,000 24,000 40,439 16,439
Other financing sources (uses)
Transfers in (out) -
Net change in fund balance 24,000 $ 24,000 40,439 $ 16.439 Fund balance - beginning 286,316
Fund balance - ending $ 326,755
- 56-
City of Fortuna
IRANSPORTATION SB325 SPECIAL REVENUE FUND
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For the Fiscal Year Ended June 30, 2022
Variance
With Final
Budgeted Amounts Budget
Original Final Actual Over (Under)
Revenues
Intergovernmental $ 110,550 $ 110,550 $ 110,586 $ 36
Interest 4,000 4,000 (9,030) (13,030)
Miscellaneous 59,140 59,140
Total revenues 114,550 114,550 160,696 46,146
Expenditures
Public works & streets 342,550 342,550 205,639 136,911
Total expenditures 342,550 342,550 205,639 136,911
Excess (deficiency) of revenues
over expenditures (228,000) (228,000) (44,943) 183,057
Other financing sources (uses)
Transfers in :
Transfers (out) :
Total other financing sources (uses) - - - -
Net change in fund balance (228,000) $ (228,000) (44,943) $ 183,057 Fund balance - beginning 721,872
Fund balance - ending 676,929
- 57 -
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, 2022
Variance
With Final
Budgeted Amounts Budget
Original Final Actual Over (Under)
Revenues
Gas tax 2105 $ 69,558 $ 69,558 $ 294,768 $ 225,210
Gas tax 2106 50,927 50,927 (50,927)
Gas tax 2107 88,518 88,518 (88,518)
Gas tax 2107.5 3,000 3,000 : (3,000)
Gas tax 2103 106,749 106,749 (106,749)
Interest 2,277 2,277
Total revenues 318,752 318,752 297,045 (21,707)
Expenditures
Public works and streets 412,600 412,600 429,683 (17,083) Total expenditures 412,600 412,600 429,683 (17,083)
Excess (deficiency) of revenues
over expenditures (93,848) (93,848) (132,638) (38,790)
Other financing sources (uses)
Transfers in 93,848 93,848 132,638 96,090
Transfers (out)
Total other financing sources (uses) 93,848 93,848 132,638 96,090 Net change in fund balance $ - $ - 57,300
Fund balance - beginning
Fund balance - ending $
- 58-
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, 2022
Variance
With Final
Budgeted Amounts Budget
Original Final Actual Over (Under)
Revenues
Intergovernmental $ 236,178 $ 236,178 $ 243,341 $ 7,163 Interest (180) (180)
Miscellaneous : :
1 1
Total revenues 236,178 236,178 243,162 6,984
Expenditures
Public works & streets 250,000 250,000 250,000
Total expenditures 250,000 250,000 250,000
Excess (deficiency) of revenues
over expenditures (13,822) (13,822) (6,838) 6,984
Other financing sources (uses)
Transfers in
Transfers (out) : : : :
Total other financing sources (uses) - -
Net change in fund balance $ (13,822) $ (13,822) (6,838) $ 6,984 Fund balance - beginning 80,500
Fund balance - ending 5 73,662
- 59 -
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, 2022
Variance
With Final
Budgeted Amounts Budget
Original Final Actual Over (Under)
Revenues
Charges for service $ 24,000 $ 24,000 $ 30,240 $ 6,240
Interest (7,350) (7,350)
Miscellaneous
Total revenues 24,000 24,000 22,890 (1,110)
Expenditures
Public works & streets
Economic development 20,000 20,000 : 20,000
Total expenditures 20,000 20,000 - 20,000
Excess (deficiency) of revenues
over expenditures $ 4,000 $ 4,000 22,890 $ 18,890
Fund balance - beginning 550,793
Fund balance - ending $ 573,683
- 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, 2022
Variance
With Final
Budgeted Amounts Budget
Original Final Actual Over (Under)
Revenues
Interest $ $ (10,949) $ (10,949)
Miscellaneous 20,000 20,000 59,994 39,994
Total revenues 20,000 20,000 49,045 29,045
Expenditures
Economic development 835,000 835,000 55,040 779,960
Total expenditures 835,000 835,000 55,040 779,960
Excess (deficiency) of revenues
over expenditures (815,000) $ (815,000) (5,995) $ 809,005 Fund balance - beginning 866,022
Fund balance - ending $ 860,027
- 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, 2022
Variance
With Final
Budgeted Amounts Budget
Original Final Actual Over (Under)
Revenues
Interest $ $ $ (2,863) S (2,863)
:
Total revenues (2,863) (2,863)
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) (2,863) $ 12,137 Fund balance - beginning 227,682
Fund balance - ending $ 224,819
- 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, 2022
Variance
With Final
Budgeted Amounts Budget
Original Final Actual Over (Under)
Revenues
Intergovernmental $ 5,000$ 5,000$ 5,000 $ :
Interest
Total revenues 5,000 5,000 5,000
Expenditures
Economic development 5,759 (5,759)
Total expenditures 5,759 (5,759)
Excess (deficiency) of revenues
over expenditures 5,000 5,000 (759) (5,759)
Other financing sources (uses)
Transfers in -
: :
Transfers (out)
Total other financing sources (uses) -
Net change in fund balance $ 5,000 $ 5,000 (759) $ (5,759) Fund balance - beginning 5,000
Fund balance - ending $ 4,241
- 63-
City of Fortuna
FISH AND WILDLIFE SPECIAL REVENUE FUND
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Fiscal Year Ended June 30, 2022
Variance
With Final
Budgeted Amounts Budget
Original Final Actual Over (Under)
Revenues
Intergovernmental $ 400,000 $ 400,000 $ 191,956 $ (208,044) Interest
Total revenues 400,000 400,000 191,956 (208,044)
Expenditures
Sanitation and recycling 400,000 400,000 124,519 275,481 Total expenditures 400,000 400,000 124,519 275,481
Excess (deficiency) of revenues
over expenditures 67,437 -
Other financing sources (uses)
Transfers in
Transfers (out) :
Total other financing sources (uses) - -
Net change in fund balance $ - $ 67,4375 -
Fund balance - beginning (67,437)
Fund balance - ending $
- 64 -
STATISTICAL SECTION
Schedule 1
City of Fortuna
Net Position by Component
Ten Year Analysis
(Accrual basis of accounting)
Fiscal Years Ending June 30
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Governmental activities:
Net investment in capital assets under both
govermental and business type activities
and under primary government: $ 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 $22,324,159 Restricted
Debt Service 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 Alfordable Housing 10,836,293 12,569,397 12,867,208 11.745.661 11,870,221 351,981 420,783 435,819 Streets 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 1,494,209 Economic development 1,128,676 1,075,228 1,240,613 2,648,818 2,782,407 1,409,696 1,649,497 1,662,770 Other purposes 85,255 168,719 229,962 10,774 10,558
Unestricted 6,742,400 4,841.653 1,759,412 2,991,176 2,957,739 18,854,650 20,316.152 18.125,213 20,164,380 22,900,113 Total governmental activilies net position: S 29.454.974 S 30,384,988 S31.058.226 S32.833.929 $35.280.724 S38,311.897 S40.280.508 S42.831.315 S46.660.241 S48.817.070 Business-type activities:
Net investment in capital assets $ 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 $23,162,546 Restricted
Debt Service 1,729,894 1,730,269 1,721,570 1,724,364 1,723,124 Capital Projects 1,080,881 1,052,316 525,940
Other purposes
Unrestricted 15,878,312 14.826,409 16.665,027 18,282,153 18.962.159 18.007.098 18,512,484 19,360,266 19.296,574 18,994,292 Total business-type activities: S 36,371.718 $ 37.760.911 $ 37.402.714 $38.134.367 $39.468.719 S40,098,180 S40,827,590 S41,433,959 S41.733.309 $42.156.838 Primary Government - City-Wide Totals
Invested in capital assets, net of related debt S 22,285,032 $ 25,540,341 $ 25,240,231 $27,011,213 $30,631,429 $39,813,422 S40,312,128 $43,346,115 $45,375,355 $45,486,705 Restricted
Debl Service 2,648,676 2,759,960 2.862,756 2.976,876 3,086,952 Capital Projects 1,950,304 | 1,915,246 3,866,964 3.211.141 2,535,596 89 Affardable Housing 10,836,293 12,569,397 12,867,208 11.745.661 11,870,221 351,981 420,783 435,819 Economic Development 1.128,676 1,075,228 1,240,613 2,648,818 2,782,407 1.409,696 1,649,497 1,662,770 Streets 4,271,744 4,448,946 3,728,767 2,090,484 1,813,382 1,734,818 1,967,334 1,672,003 1.486,961 1,494,209 Other purposes 85,255 168,719 229,962 10,774 10,558
Unrestricted 22,620,712 19,668,062 18,424,439 21,273,329 21,919,898 36,861,748 38,828,636 37,485,479 39,460,954
41.894,405
Total primary goverment net position: 565.826,692 S 68,145.899 S 68.460,940 $70.968.296 S74.750,443 S78.410.077 $81.108.098 $84.265,274 $88.393.550 $90,973.908 Notes and Data Sources:
Stalement of Net Position
- 65-
Schedule 2
City of Fortuna
Changes in Net Positior
Accrual Basis of Accounting
Fiscal Years Ending June 30
Expenses: 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 S 1,030,061 $ 1,029,182 $ 1,685,735 $ 1,056,456 $ 1,171,423 $ 948,148 $ 1,023,535 S 1,551,022 S 1.622,797 $ 2,411,874 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 4,082,365 Streets 1,289,043 605,649 843,015 664,188 2,117,875 3,677,131 1,369,760 2,594,420 4,071,600 2,767,529 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 1,697,162 14,760 20,403 38,710 43,095 25,147 606,909 577,716 204,152 414.414 63,515 18,770 161,368 95,573 94,393 75,724 310,856
147,974 139,148 130,067 73,164 111,894 76,131 976
penses 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 11.022,445 Water 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 3.418,851 Wastewater 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 4,256,162 Transit 219,358 250,901 268,291 344,951 306,147 318,957 332,764 352,824 369.082 385.274 Total business-type activities expenses 4.639.055 5.049,858 5,247,182 5,883,758 5.911.913 7,053,645 7,697,677 7,396,660 8,023.289 8,060,287 Total City government expenses $11,372.446 $11,357,223 $12,380,580 S 12.107943 S14.274.616 S17693,555 S16.635,191 S17.839,249 S 19.330,356 S19.082.732 Program Revenues:
Governmental activities:
Charges for services:
General government $ 294,305 $ 382,856 S 339,963 $ 371,856 360,154 $ • $ - $ - $ - $ Public safety 427,063 522,289 542,.634 504,948 575,304 44,667 75,145 44,610 30,773 30,896 Streets 65,891 106,685 115.493 83,551 75,645 796,693 760,656 742,421 777,428 951,453 Parks and recreation 543,820 510,088 551,930 458,292 421,856 814,528 865,276 697.775 1,036,462 872,212 Sanitation 15,390 27,464 35,865 53,873 23,039
Redevelopment and housing 211,338 452,314 472,132 434,634 442,268 Operating grants and contributions 508,059 612,583 854,800 650,242 758,046 Capital grants and contributions 405,942 655,015 3.457,829 996,076 3,574,696 4,956,839 2,237,448 4,407,521 5,007,997 2,351,031 Total govemmental activities program revenues: 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 4.205,592 Business-type aulivities.
Charges for services:
Water 2,311,702 2,430,314 2,301,442 2,402,085 2,319,60 2,621,238 2,394,356 2,398,729 2,504,339 2,469,628 Wastewater 3.477,55 3,577,26: 3,572,915 3,536,518 3,513,375 4,023,978 3,646,004 3,512,378 3,717,201 3,788,723 Transit 14,307 12,427 11,782 14.796 26,279 17,390 21,169 16,815 17,674 15,377 197,566 232,199 249,663 279.140 290,697 880,162 1,796,450 1,395,602 2,018,214 2,485,727 peral grans an aro contine 129,728 197.255 297,282 393.468 987,984 Total Cuy gevem ect pregram reve revenues > 8 00.655 9120752 12433030 0170000 1718 940 3 12062.488 1778.504 13225834 3280428 1375156 • 66 -
Schedule 2
City of Fortuna
Changes in Net Position
(Accrual Basis of Accounting)
Fiscal Years Ending June 30
Net(Expense)Revenue:
Govemmental activities $ (4,261,583) $ (3,036.071) $ (762,752) $ (2,870,713) $ (2,131,695) S (4,027, 183) $ (4,998,989) $ (4,560,262) $ (4,454,407) $ (6,816,853) Business-type activities 1.491,802 1,399,600 1,185,902 742,250 1,226,027 489,123 160,302 (63,136) 234,139 699,168 Total City government 5 (2.769.781) S (1.636.471) $ 423.150 5(1.928.463) S (905,668) S (3.538.060) S (4.838.687) S (4.623.398) S (4.220.268) S (6,117.685) General Revenues and Other Changes in
in Net Position:
Governmental activities:
Taxes
Property taxes 733,373 437,180 $ 486,032 $ 423,766 s 419,613 $ 536,843 $ 485,385 S 527,434 $ 611,929 $ 610,620 Sales taxes 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 4,339,191 Transient occupancy taxes 524.544 524,542 537,055 610,627 683.432 695,921 612,993 549,218 755,125 951,039 Other taxes 382,018 382,136 391,784 417,310 443,133 136,328 24,193 36,371 28,551 45,512 Property Tax in lieu VLF 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 1,354,606 Unrestricted investment earnings 20,296 21,344 38,713 98,452 8,917 77,605 323,693 311,147 230,087 (75,427) Other general revenues 94,028 118.791 2,491,735 1,108,711 961,512 936,480 1,061,319 1,753,685 Transfers 6.517 1,254 10,723 10,597 10,559 22,478 (3,832) (5,691) (4,431) (5,536) Extraordinary tem: Dissolution of the Redevelopment
agency of the City of Fortuna 2,032,150
Total govemmental activities 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 8,973,690 Business-type activities
Unrestricted investment earings 161,816 565,280 663,814 60,780 (281,252) Transfers (6.517) (1,254) (10,723) (10,597) (10,559) (22,478) 3.832 5,691 4.431 5,536 Total business-type activities (6,517) (1,254) (10,723) (10,597) (10,559) 139,338 569.112 669,505 65,211 (275.716) Total City government $6,250,860 $ 3.964.831 $ 6,557.967 $ 4.435,819 S4,888,742 $ 7,197,699 § 7.536,712 $ 7,780,574 $ 8,348,544 $ 8,697,974 Change in net position:
Governmental activities $ 1,995,794 930,014 $ 5,805,938 $ 1,775,703 $ 2,767,606 $ 3,031,178 $ 1,968,611 $ 2,550,807 $ 3,828,926 $ 2,156,837 Business-type activities 1,485,285 1,398,346 423,452
Total City government $ 3.481.079 $ 2,328,360 $ 6.981.117 $ 2,507,356 $ 3,983,074 $ 3,659,639 $ 2,698,025 S 3,157,176 $ 4.128,276 $ 2,580,289 Notes and Data Sources:
Stalement of Activities
- 67 -
Schedule 3
City of Fortuna
Fund Balances - Governmental Funds
Ten Year Analysis
Fiscal Years Ending June 30
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
General Fund
Reserved
Nonspendable
Restricled
Unassigned
Total General Fund 3 1.20030 1297960 3 4815824 4855152 5230264 3 7095087 8315300 8 8.500000 10.587895 $ 12813,152.
All Other Governmental Funds
7,059,962 6,545,685 8,086,994
Unatal ali dier Govemental Fund 7058,952 0545,985 8 0,98,904 3 8,069918 7,295951 3 3360,065 3 3757244 9 3122,511 310810 8 3,080307 Total All Govermental Funds $ 12.712,391 S11.802,645 $13.720.918 $12.969.472$12.556.205 $ 10.484.446 $12.072.544 $11.625.511 $13.932.083 $ 16,047.471 Notes and Data Sources:
Balance Sheet
- 68
Schedule 4
City of Fortuna
Changes in Fund Balances - Governmental Funds
Ten Year Analysis
(Thousands of Dollars)
(Modified accrual basis of accounting)
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Revenues:
Taxes $ 3,116 $ 2,823 $ 3,001 $ 3,287 $ 3,812 $ 5,790 $ 5,686 $ 5,868 $ 6,997 $ 7,301 Licenses and permits 284 309 951
Fines and forfeits 83 72 76 57 47 44 75 45 31 31
Charges for services 1,082 1,159 1,204 993 967 815 865 698 1,036 872 Special assessments 52 53 56 55 253 60 -
Intergovernmental 1,842 2,211 2,302 2,654 5,029 4,957 2,237 4,408 5,008 2,351 Investment eamings 29 43 79 125 32 78 324 311 230 (75)
Other revenues 422 589 578 541 584 1,104 962 937 1,061 1,754 Total revenues: 6,793 7,170 7,580 8,021 11,088 13,645 10,910 13,009 15,140 13,185 Expenditures:
General government 1,472 996 1,607 1,146 1,045 719 1,023 1,551 1,623 2,411 Public safety 2,958 3,188 3,128 3,541 3,403 3,575 4,796 4,640 4,120 4,755 Parks and recreation 965 992 1,028 1,023 1,103 966 1,292 1,201 1,027 1,697 Highways and streets 585 526 626 578 741 2,423 1,575 5,817 5,722 2,121 Health and welfare 15 14 39 43 25 607 578 204 414 64
Economic development
and redevelopment 93 92 1.614 101 74 311
Capital outlay 912 910 2,281 4,333 4,749
Debt service:
Principal 215 220 240 316 323 2,313 53 37 16
Interest 151 143 134 125 116 76 -
Total expenditures: 7.366 7.081 8,534 9.154 11.163 15,739 9,318 13,450 12,906 11,064 Excess of revenues
over(under)
expenditures (573) 89 (954) (1,133) (75) (2,094) 1,592 (441) 2,234 2,121 Other Financing
Sources(Uses)
Capital Lease Financing : 2,900 370
Contribution from Success -
Transfers in 464 460 379 436 1,512 1,545 279 563 482 546 Transfers out (466) (459) (368) (425) (1,501) (1.523) (283) (569) (486) (551) Total other financing
sources(uses) (2) 1 2,911 381 11 22 14) 16) (4) (5)
Net change in fund
balances (575) $ 90 $ 1,957 $ 752) S (64) $ (2.072) $ 1,588 $ 447) $ 2,230 $ 2,116 Debt service as a
percentage of noncapital
expenditures 6.43% 21.74% 0.14%
Notes and Data Sources:
Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds - 69 -
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 as a Percentage
Year Secured Unsecured Tax Rate Taxable Value of Actual Value 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%
2022 1,128,128 60,854 1,188,982 1.00% 2,907,254 40.90%
Notes and Data Sources:
HdL, Coren & Cone, Humboldt County Assessor Combined Tax Rolls. - 70 -
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 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 City of Fortuna Tax And Fine Trust 0.0733
County of Humboldt General Tax District 0.1628 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 Distriet 0.1585 0.1585 0.1660 0,1585 0.1586 0.1586 0.1659 0.1643 0.1793 ERAF Share of Fortuna General Fund 0.0265 0.0265 0.0283 0.0266 0.0270 0.0270 0.0286 0.0284 0.0305 Fortuna Cemetery District 0.0041 0.0041 0.0041 0.0041 0.0041 0.0041 0.0041 0.0041 0.0041 0.0044 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 0.0467 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 0.00350,0039 Redwood Junior College District 0.0649 0.0649 0.0649 0.0649 0.0649 0.0649 0.0649 0.0649 0.06430,0700 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 0.0110 0.0110 0.0130 0.0100 0.00800.0080 0.0080 0.0080 0.0050 0.0030 Fortuna High Go Bonds 2000 0.0030 0.0080 0.0080 0.0200 0.0170 0.0170 0.0160 - 0.0170 0.0150 0.0130 Fortuna Elementary 0.0300 0.0310 0.0330 0.0390 0.0720 0.0640 0.0680 0.0620 Total Voter Approved Rate 0.0440 0.0500 0.0590 0.0580 0.0640 0.0960 0.0890 0.0B80 0.0780 Total Tax Rate 1.0440 1.0500 1.0520 1.0590 1.0580 1.0640 1.0960 1.0890 1.0880 1.0780 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 & Cone, and Humboldt County Assessor Tax Rate Tables - 71 -
Schedule 7
Principal Property Tax Payers - Top Ten Payers
Ranked In Order of Gross Assessed Values
Ten Year Analysis
(Dollar Amounts in Thousands)
2012-13
Percentage
of Total City
Taxable Taxable
Assessed Assessed
Taxpayer Value Rank Value
HCP SH ELP 3 Properties LLC $ 8,446 1 0.97%
Gagliardi Trust 6,736 2 0.77%
Fortuna Loop Inc. 5,944 3 0.68%
Giffra Ranch LLC 5,699 4 0.65%
Safeway Inc. 4,840 5 0.56%
Peterson Tractor Company 4,421 6 0.51%
Carl Marchetti Jr. Trust 4,284 0.49%
Wendt Construction Company Inc. 4,112 8 0.47%
Realty Income Corporation 3,849 9 0.44%
Leonardo Logging and Construction Inc. 3,739 10 0.43%
Total $ 52,070 5.98%
2021-22
Percentage
of Total City
Taxable Taxable
Assessed Assessed
Taxpayer Value Rank Value
Bear River Band of Rohnerville Rancheria $ 12,280 1 1.03% Mercer Fraser Company 8,916 2 0.75%
Eretz Fortuna Properties LP PT 8,317 3 0.70%
Bank of Amerlca NA & Donna Minardi 7,823 4 0.66%
Sarti Enterprises Delaware LLC 7,437 5 0.63%
White Circle Commerce LLC 6,890 6 0.58%
Carlos and Antonia Luna Trust 5,229 7 0.44%
Travis L Schneider and Stephanie M Bode 5,199 8 0.44%
Wendt Construction Company Inc. 4,878 9 0.41%
Realty Income Corporation 4,466 10 0.38%
Total $ 71,435 6.01%
Notes and Data Sources:
HdL, Coren & Cone
- 72-
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
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%
2022 552,367 552,367 100%
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 - 73-
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
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
2022 247,953,771 8.50% 1.75% 4,339,191
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, creating a new general use sales tax of 3/4%. This tax was implemented on April 1, 2017 and is effective for 16 years. - 74-
Schedule 8-B
City of Fortuna
Top 25 Sales Tax Producers
Comparison with
(In Alphabetical Order)
2012-2013 2021-2022
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 Forbusco Lumber Lumber/Building Materials Eel River Brewing Casual Dining Fortuna Chevron Service Stations Eel River Hydroponics Garden/Agricultural Supplies / Fortuna Gas 4 Less Service Stations Forbusco Lumber Lumber/Building Materials / Grocery Outlet Grocery Stores Fortuna Chevron Service Stations / Hummel Tire & Wheel Automotive Supply Stores Fortuna Ford Motors Used Auto Dealers r. Les Schwab Tire Center Automotive Supply Stores Fortuna Gas 4 Less Service Stations , McDonalds Quick-Service Restaurants Gary Crivellos Cars Used Auto Dealers / Mercer Fraser Contractors Hummel Tire & Wheel Automotive Supply Stores Garden/Agricultural Supplies L& M Renner Petroleum Prod/Equip Casual Dining
Les Schwab Tire Centers Automotive Supply Stores Farm/Construction Equip McDonalds Restaurants No Alcohol / Ray's Quality Cars Used Automotive Dealer Northcoast Horticulture Supply Garden/Agricultural Supplies (Rite Aid Drug Stores O'Reilly Auto Parts Automotive Supply Stores / Safeway Grocery Stores Liquor Peterson Tractor Farm/Construction Equip Sequoia Gas Service Stations Rays Food Place Grocery Stores Liquor Sunbelt Rentals Repair Shop/Equip. Rentals Rite Aid Drug Stores Tractor Supply Garden/Agricultural Supplies Rohnerville 76 Service Stations Valley Pacific Petroleum Petroleum Products 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 72.43% Paid By Top 25 Accounts 65.86% Period: July 2012 Thru June 2013 Period: July 2021 Thru March 2022 Notes and Data Sources:
HdL, Coren & Cone, California State Board of Equalization - 75-
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
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
2022 $ 9,510,390 10.00% 951,039
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. - 76 -
Schedule B-D
City of Fortuna
Principal Transient Occupancy Tax Payers
Ten Year Review
(In Alphabetical Order)
Fiscal Years Ending June 30
2018 2019 2020 2021 2022
Best Western Country Inn Best Western Country Inn Best Western Country Inn Best Western Country Inn Best Western Country Int Comfort Inn & Suites Comfort Inn & Suites Comfort Inn & Suites Comfort Inn & Suites Comfort Inn & Suite:
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 Hote 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 Mote Super 8 Motel Super 8 Motel Travel Inn Travel Inn Travel Inn Travel Inn Travel Inn
2013 2014 2015 2016 2017
Best Western Motel Best Western Country Inn Best Western Country Inn Best Western Country Inn Best Western Country Inn Comfort Inn Comfort Inn & Suites Comfort Inn & Suites Comfort Inn & Suites Comfort Inn & Suites Fortuna Travel Inn Holiday Inn Express Humboldt Redwood Inn Humboldt Redwood Inn Humboldt Redwood Inn National Nine National 9 Inn 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 The Redwood Fortuna The Redwood Fortuna Travel Inn Travel Inn Travel Inn Notes and Data Sources:
City Data
- 77-
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
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
2022 23.04 1.90 38.75 8.61
Notes and Data Sources:
City of Fortuna Fee Schedule
- 78-
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 2013 $ 1,634,059 4987 $ 787,063 545 $ 2,421,123 5532
2014 $ 1,535,339 5004 $ 785,263 549 $ 2,320,602 5553
2015 $ 1,458,261 $ 745,841 551 $ 2,204,102 5562
2016 $ 1,506,778 $ 742,145 551 $ 2,248,923 5567
2017 $ 1,514,301 $ 762,843 554 $ 2,277,144 5579
2018 $ 1,547,679 $ 783,156 554 $ 2,330,835 5631
2019 $ 1,577,636 $ 781,898 554 $2,359,534 5695
2020 $ 1,640,307 $ 795,649 557 $ 2,435,956 5712
2021 $ 1,636,317 5181 $ 788,066 557 $ 2,424,383 5738
2022 $ 1,570,849 5231 $ 796,468 558 $ 2,367,317 5789
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 2013 $ 2,497,156 4729 $ 815,325 495 $ 3,312,481 5224
2014 $ 2,623,430 4742 $ 840,563 498 $ 3,463,993 5240
2015 $ 2,596,862 4750 $ 840,563 498 $ 3,437,425 5248
2016 $ 2,588,628 4764 $ 826,449 499 $ 3,415,077 5263
2017 $ 2,609,255 4771 $ 842,141 501 $ 3,451,396 5272
2018 $ 2,651,219 4806 $ 855,685 503 $ 3,506,904 5309
2019 $ 2,676,609 4870 $ 858,663 504 $ 3,535,272 5374
2020 $ 2,659,708 4885 $ 847,436 507 $ 3,507,144 5392
2021 $ 2,640,931 4907 $ 851,112 508 $ 3,492,043 5415
2022 $ 2,668,383 4957 $ 864,674 509 $ 3,533,057 5466
- 79 -
Schedule 9
City of Fortuna
Ratios of Outstanding Debt By Type
Ten Year Review
(Dollars in Thousands except for Per Capita)
Government Activities Business-type Activities Total
General Capital Total City Debt Per Capita
Fiscal Obligation Redevelopment Lease Revenue City Per Personal Year Bonds Bonds Obligations Loans Bonds Debt Capita Population Income 2013 3,225 12,860 - 19,820 35,905 $ 3,021 11,885 22,990 2014 3,000 12,735 - 19,335 35,070 $ 2,924 11,994 21,127 2015 2,760 12,590 - 18,835 34,185 $ 2,850 11,994 21,127 2016 2,515 12,425 18,310 33,250 $ 2,806 11,848 21,654
2017 2,260 12,240 17,760 32,260 $ 2,691 11,989 20,302
2018 8,635 14,145 22,780 1,892 12,042 20,406
2019 8,450 13,550 22,000 $ 1,821 12,084 21,149
2020 8,220 - - 13,040 21,260 $ 1,754 12,123 22,207
2021 7,970 - - 12,520 20,490 $ 1,718 11,926 25,257
2022 7,705 - 11,970 19,675 $ 1,583 12,432 24,958
Notes and Data Sources:
Population: California State Department of Finance, Unemployment data: Califomia Development Department Income, Age and Education Date-US Census Bureau, most recent American Community Survey Source: Hdl, Coren & Cone
- 80-
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
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%
2021 - 7,970 7,970 0.69%
2022 - 7,705 - 7,705 0.65% 620
Notes and Data Sources:
See schedule 5 for total assessed values of property.
- 81 -
Schedule 11
Direct and Overlapping Governmental Activities Debt
As of June 30, 2022
CITY OF FORTUNA
2021-22 Assessed Property Valuation: ############
City of Fortuna
Total Debt Applicable Share of Debt
Overlapping Tax and Assessment Debt 6/30/2022 Percentage 6/30/2022 Redwoods Joint Community College District $ 22,115,000 56% $ 1,249,055 Fortuna Union High School District 9,899,210 48.8% 4,831,705 Fortuna Union School District 17,874,249 82.9% 14,811,318 Total Overlapping tax and Assessment Debt: $ 49,888,459 $ 20,892,078 Direct and Overlapping General Fund Debt
umboldt County General Fund Obligation $ 5,055,000 7.9% $ 398,081 lumboldt County Board of Education CO 5,975,443 7.9% 470,566 Total Direct and Overlapping General Fund Debt: $ 11,030,443 $ 868,647 Overlapping Tax Increment Debt: $ 7,705,000 100% $ 7,705,000 Total Direct Debt: $ $
Total Overlapping Debt: 68.623.902 29,465,725
Combined Total Debt: S 68,623,902 $ 29,465,725
Ratios to 2021-22 Assessed Valuation:
Total Overlapping Tax and Assessment Debt. 1.760%
Total Direct Debt ........ 0.000%
Combined Total Debt *.•...•. 2.480%
Ratios to Redevelopment Incremental Valuation:
Total Overlapping Tax Increment Debt.. 2.96%
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 district's assessed value that is within the boundaries of the city divided by the district's total taxable assessed value.
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 - 82 -
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
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%
2022 $ 178,347,300 - 0%
Legal Debt Margin Calculation for Fiscal Year 2022
Assessed value $ 1,188,982
Debt limit (15% of assessed value) 178,347
Less debt applicable to limit:
General obligation bonds
Total debt applicable to limit
Legal debt margin $ 178,347
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, - 83 -
Schedule 13
Water Revenue Bonds
Water Capital Less Net
Service Impact Operating Available Debt Service
Year Revenues Fees Expenses Revenue Principal Interest "Ratio 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 2016 2,402,085 64,231 1,414,885 1,051,431 200,000 328,798 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 2022 2,469,628 69,800 2,617,977 (78,549) 210,000 187,425 (0.20) Wastewater Revenue Bonds
Wastewater Capital Less Net
Service Impact Operating Available Debt Service
Year Revenues Fees Expenses Revenue Principal Interest *Ratio 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 2022 3,788,723 195,739 3,053,114 931,348 340,000 355,119 1.34 Successor Agency Revenue Bonds*
RPTTF Debt Service
Year Revenue Principal Interest *Ratio
2013 861,049 105,000 612,9/4 1.20
2014 750,654 125,000 608,350 1.02
2015 387,086 145,000 603,052 0.52
2016 778,067 150,000 473,099 1.25
2017 980,149 165,000 465,246 1.56
2018 1,092,080 185,000 422,369 1.80
2019 1, 118,426 185,000 284,663 2.38
2020 722,031 230,000 277,283 1.42
2021 980,158 250,000 270,188 1.88
2022 850,606 265,000 265,038 1.60
Notes and Data Sources:
a. "Ratio is determined by dividing Net Available Revenue by total payment (principle and interest) b. Minimum Debt Ratio Requirement is 1.25
c. Water & Wastewater revenues include operating revenues, interest revenues, and capital impact fees. d. Operating expenses exclude depreciation and amortization *The Successor Agency to the former Redevelopment Agency receives tax increment revenues only in the amount necessary to pay enforceable obligations.
Any surplus tax is then redistributed to the taxing agencies. - 84-
Schedule 14
City of Fortuna
Demographic and Economic Statistics
Ten Year Review
Per Capita 2 3
Fiscal 1 Personal Personal Unemployment Median
Year Population Income Income Rate Age
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
2022 12,432 310,275,000 $ 24,958 4.20% 40.3
Notes and Data Sources:
1 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
- 85 -
Schedule 1:
City of Fortuna
rincipal Employers (Ten Larges
n Alphabetical Orde
FYE 2022 FYE 2017
City of Fortuna City of Fortuna
Eel River Brewery Eel River Brewery
Emeitus Senior Living Eel River Disposal
Fortuna Rehab and Wellness Emeitus Senior Living
Fortuna Union Elementary School District Fortuna Rehab and Wellness Fortuna Union High School District Fortuna Union Elementary School District Ray's Food Place Fortuna Union High School District
Recology Eel River Ray's Food Place
Redwood Memorial Hospital Redwood Memorial Hospital
Safeway Safeway
FYE 2021 EYE 2016
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 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
tel River Brewery tel 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 Plac
Redwood Memorial Hospital Redwood Memorial Hospita
Safeway Safeway
EYE 2018 EYE 2013
City of Fortuna City of Fortuna
Eel River Brewery el River Brewer
Eel River Disposal el River Disposa
Emeitus Senior Living Emina Senio and Walness.
Fortuna Rehab and Wellness
Fortuna Union Elementary School District
Fortuna Union High School District
Ray's Food Place Redwood Memorial Hospital
Redwood Memorial Hospital
Safeway Safeway
- 86 -
Schedule 16
City of Fortuna
Full-Time Equivalent City Government Employees by Function/Program Ten Year Analysis
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Function/Program:
General government:
City Manager 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 5.00 5.00 5.00
Police 25.00 28.00
Community Development 4.20 4.00
Public Works 30.00
Parks and Recreation
River Lodge Conference Center k
Transit
Totals
- 87-
Schedule 17
City of Fortuna
Operating Indicators by Function/Program
Ten Year Analysis
Function/Program 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Police:
Physical arrest 1,134 1044 1088 963 1039 1098 1134 751 686 Traffic violations 720 649 439 267 351 563 724 250 412
Planning:
Building permits issued 366 357 334 354 367 387 333 341 353 333 Public works:
Street lane miles resurfaced 0.50 3.00 1.45 1.60 1.60 0.25 1.25 2.05 0.50 1.77 Riverlodge/Monday Club:
Community Events 408 386 376 347 335 326 346 253 57 303 Parks and Recreation:
Recreation Program
Admissions (1) 9,949 9,500 7,322 6,549 6,937 6,694 6,051 3,126 541 6,971 Water:
Number new connections 19 20 9 5 12 52 64 17 26 51
Daily average water
production in MGD 1.13 1.13 1.10 1.10 1.10 1.08 1.08 1.20 1.25 1.09 Daily average water
consumption in MGD 1.13 1.14 0.93 0.91 0.92 0.93 0.93 0.94 1.00 0.92 Wastewater:
Number new connections 14 15 8 15 9 37 65 18 23 51
Daily average treatment
in millions gallons(MGD) 1.90 1.90 1.16 1.03 1.60 1.42 1.42 1.15 1.14 1.05 (1) Starting in fiscal year 2014-15 the Recreation Program Admissions were calculated based on the number of people signed up for Recreation Programs.
- 88-
Schedule 18
City of Fortuna
Capital Asset Statistics by Function/Program
Ten Year Analysis
Function/Program 2015 2017 2022
Police:
Stations 1 1
Patrol units 15 15
Public Works:
Miles of streets 54 54 54 54 54 54 54 54 54 54
Streetlights 523 523 523 523 523 523 523 523 523 523
Traffic signals 5 5 5 5 5 5 5 5
Riverlodge/Monday Club
Community centers 2 2 2 2 2 2 2 2 2
Parks and Recreation:
Parks 2 2 2 2 2 2 2 2 2
Park acreage 85 85 85 85 85 85 85 85 85
Skate Pavilion 1
Museum 1 1 1 1
Water:
Number connections 5,532 5,553 5,562 5,567 5,579 5,631 5,695 5,712 5,738 5,789 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 5,224 5,240 5,248 5,263 5,272 5,309 5,374 5,392 5,415 5,466 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 - 89 -