Agenda packet, regular meeting — Fremont City Council, May 14, 2024

City Council Chambers
3300 Capitol Avenue
Fremont, CA

Fremont City Council

Lily Mei, Mayor
Yang Shao, Vice Mayor
Teresa Keng, District 1
Desrie Campbell, District 2
Jenny Kassan, District 3
Raj Salwan, District 5
Teresa Cox, District 6

City Staff

Karena Shackelford, City Manager
Rafael Alvarado, Jr., City Attorney
Christina Briggs, Assistant City Manager
Brian Stott, Assistant City Manager
Allen DeMers, Deputy City Manager

Kim Beranek, Community Services Director
Geneva Bosques, Communications and
Legislative Affairs Director
Zoraida Diaz, Fire Chief
Tina Gallegos, Human Resources Director
Susan Gauthier, City Clerk
Hans Larsen, Public Works Director
Donovan Lazaro, Economic Development Director
David Persselin, Finance Director
Dan Schoenholz, Community Dev. Director
Suzanne Shenfil, Human Services Director
Sanford Taylor, Information Technology Director
Sean Washington, Chief of Police

Fremont City Council Agenda and
Report
May 14, 2024

General Order of Business

1. Preliminary
• Call to Order
• Salute to the Flag
• Roll Call
• Announcements-Mayor and/or City Manager
• Report Out of Closed Session (if applicable)

2. Consent Calendar

3. Ceremonial Items

4. Public Communications

5. Scheduled Items
• Public Hearings
• Appeals
• Reports from Commissions, Boards and
Committees

6. Other Business

7. Items Referred by Councilmembers
• Council Referrals
• Appointments to Boards, Commissions,
Committees
• Legislative Actions
• Report on Committee Assignments

8. Adjournment

Order of Discussion
Generally, the order of discussion after introduction of an item by the Mayor will include comments and
information by staff followed by City Council questions and inquiries. The applicant, or their authorized
representative, or interested citizens, may they speak
on the item; each speaker may only speak once to each
item. At the close of public discussion, the item will be considered by the City Council and action taken. Items
on the agenda may be moved from the order listed.

Consent Calendar
Items on the Consent Calendar are considered to be
routine by the City Council and will be enacted by one
motion and one vote. There will be no separate
discussion of these items unless a Councilmember or
citizen so requests, in which case the item will be
removed from the Consent Calendar and considered
separately. Additionally, other items without a “Request to Speak – Speaker Card” card in opposition may be
added to the consent calendar. The City Attorney will
read the title of ordinances to be adopted.

Spoken Public Communications and/or
Public Comment is limited to speakers
attending the meeting in-person in
City Council Chambers.

Agenda and Report - Fremont City Council Meeting - May 14, 2024

May 14, 2024 Fremont City Council Page 2
IMPORTANT NOTICE REGARDING THE CITY COUNCIL MEETING.

The live stream of the meeting may be viewed on the City of Fremont’s website at www.Fremont.gov/Channel27, which provides a link to the live stream; or, via Comcast Channel 27.

Please note at this time, Channel 27 is only available to Comcast cable subscribers. The public may also view the meeting via Zoom, or attend in-person in the Council Chamber. The lobby doors open approximately 15 minutes prior to the start of the meeting. The public is strongly encouraged but not required to wear masks.

Attending May 14, 2024 City Council meeting online via Zoom https://us06web.zoom.us/s/81525704700 Meeting ID: 815 2570 4700

Addressing the Council

Spoken Public Communications / Public Comment is limited to persons attending the Council Meeting in the City Council Chambers.

How to submit Public Communications / Public Comment by email prior to the meeting:

Send an email to [email protected] by 4:00 p.m. the day of the meeting. Please identify the agenda item number & letter, and meeting date in the subject line of your email or specify that it is not related to an agenda item. Emails will be compiled into files by agenda item number/letter, distributed to the City Council and staff, and published in the City's Agenda Center on www.fremont.gov. If you wish to share an attachment/exhibit, submit the pdf formatted document(s) to the email above by the noted deadline.

Electronic comments on agenda items for the City Council meeting may only be submitted by email. Comments via text and social media (Facebook, Twitter, etc.) will not be accepted.

How to provide Spoken Public Comment during the meeting for items on the agenda:

Attend meeting in-person in the Council Chamber, fill out a “Request to Speak – Speaker Card” with the agenda item number & letter, and submit to the City Clerk. When the Mayor calls for the item on which you wish to speak, step to the podium to address the City Council. Please limit your remarks on matters related to the agency and to the time limit allotted.

How to provide Spoken Public Comment during the meeting for items not on the agenda (Oral Communications):

Any person desiring to speak on a matter which is not scheduled on this agenda may do so under the Oral Communications section of Public Communications. Attend the meeting in-person in the Council Chamber and submit your speaker card to the City Clerk prior to the commencement of Oral communications. Only those who have submitted cards prior to the beginning of Oral Communications will be permitted to speak. Please be aware the California Government Code prohibits the City Council from taking any immediate action on an item which does not appear on the agenda, unless the item meets stringent statutory requirements. The Mayor may limit the time allotted for public speakers, and each speaker may only address the Council once on each agenda item.

The City Council Agendas may be accessed online: https://www.fremont.gov/government/agenda-center

Availability of Public Records
All disclosable public records relating to an open session item on this agenda that are distributed by the City to all or a majority of the City Council less than 72 hours prior to the meeting will be available for public inspection in specifically labeled binders located in the lobby of Fremont City Hall, 3300 Capitol Avenue during normal business hours, at the time the records are distributed to the City Council.

Information about the City or items scheduled on the Agenda and Report may be referred to:

Address: City Clerk
City of Fremont
3300 Capitol Avenue, Bldg. A
Fremont, California 94538
Telephone: (510) 284-4060

If you are an individual with a disability and need a reasonable modification or accommodation pursuant to the Americans with Disabilities Act, or if you do not have access to email or the internet, please contact the City Clerk’s Office at (510) 284-4060 or [email protected] at least two working days prior to the meeting for assistance.

Your interest in the conduct of our City’s business is appreciated.

May 14, 2024 Fremont City Council Page 3
Revised Agenda
Fremont City Council Regular Meeting
May 14, 2024
City Council Chambers, 3300 Capitol Avenue, Building A
7:00 PM

TELECONFERENCE NOTICE

Pursuant to Government Code Section 54953(b), the following meeting will include teleconference participation by Councilmember Kassan from:

Bay Club Hotel
Quarter Deck Room
2131 Shelter Island Drive
San Diego, CA 92106

1. Preliminary
A. Call to Order
B. Salute the Flag
C. Roll Call
D. Announcements-Mayor and/or City Manager
E. Report Out of Closed Session (if applicable)

2. Consent Calendar
Items on the Consent Calendar are considered to be routine by the City Council and will be enacted by one motion and one vote. There will be no separate discussion of these items unless a Councilmember or citizen so requests, in which event the item will be removed from the Consent Calendar and considered separately. Additionally, other items without a “Request to Address Council” card in opposition may be added to the consent calendar. The City Attorney will read the title of ordinances to be adopted.

A. Motion To: Waive Further Reading of Proposed Ordinances (This permits reading the title only in lieu of reciting the entire text.) B. Approval of Minutes - None.

C. PURCHASE REPLACEMENT SOFTWARE FOR THE CITY’S DOCUMENT MANAGEMENT SYSTEM - Authorize the City Manager, or her Designee, to Enter into Agreements with ECS Imaging, Inc. for Implementation Services and Software Licenses and Maintenance and Support of the LaserFiche Software System.

Contact Persons:

Name: James Wong Sanford Taylor
Title: Senior Systems
Analyst/Programmer
IT Director
Dept: Information Technology
Services
Information Technology Services
Phone: (510) 494-4812 510-494-4802
E-Mail: [email protected] [email protected]

May 14, 2024 Fremont City Council Page 4
RECOMMENDATIONS:

1. Authorize the City Manager or her designee to execute an Agreement with ECS in the amount of $151,419 to provide implementation and professional services, and Year 1 of ongoing annual maintenance and support for the Document Management Software System, LaserFiche.

2. Authorize the City Manager or her designee to execute a Maintenance and Support Agreement with ECS for the LaserFiche Software System, in an amount not to exceed $54,789.50. This amount includes subscription costs in the amount of $26,973.75 for Year 2; and $27,815.75 for Year 3. These amounts include the maximum annual 3% escalator.

D. 2024 CAPE AND SLURRY SEAL PROJECT - Approval of Plans and Specifications; Award of Contract to VSS International, Inc. in the Amount of $5,767,000 (Including 5% Contingency) for the 2024 Cape and Slurry Seal Project (PWC8195-W2); Appropriation Actions; Make Findings of CEQA Exemption.

Contact Persons:

Name: Edward Nakayama Hans Larsen
Title: Senior Civil Engineer Public Works Director
Dept: Public Works Public Works
Phone: 510-494-4775 510-494-4722
E-Mail: [email protected] [email protected]

RECOMMENDATION: Approval of the following actions related to the 2024 Cape and Slurry Seal Project (PWC8195-W2):

1. Approve the plans and specifications for the project.

2. Accept the bid and award the construction contract to the lowest responsive and responsible bidder, VSS International, Inc. in the amount of $5,493,000, allocate a 5% construction contingency in the amount of $274,000 for a total construction contract amount of $5,767,000, and authorize the City Manager or designee to execute the contract.

3. Appropriate unallocated fund balance in ACTC Fund 515 ($325,000) to PWC8195.

4. Appropriate unallocated fund balance in ACTC Fund 520 ($75,000) to PWC8195.

5. Reallocate $80,000 from PWC9037-531 to PWC8195-531.

6. Find this project is exempt from CEQA review pursuant to CEQA Guidelines section 15301 as the repair, maintenance or minor alteration of existing facilities involving no or negligible expansion of the use beyond that presently existing.

E. FISCAL YEAR 2022/23 FINANCIAL AUDIT - Transmittal and Acceptance of Fiscal Year 2022/23 Audit Reports
Contact Persons:

Name: Hein Hein Hein Myat David Persselin
Title: Accounting Manager Finance Director
Dept: Finance Department Finance Department
Phone: 510-494-4602 510-494-4631
E-Mail: [email protected] [email protected]

RECOMMENDATION: Receive financial audit reports for Fiscal Year 2022/23 and file.

May 14, 2024 Fremont City Council Page 5
F. FUNDING FOR EAST BAY GREENWAY PROJECT - Authorization to Receive Federal Grant Funds and Reallocate Local Matching Funds for Design Work Related to the “East Bay Greenway: Irvington to Fremont BART” Project (PWC9101) for a Combined Total Funding Amount of $320,000; Appropriation Actions; Make Findings of CEQA Exemption
Contact Persons:

Name: Mirabel Aguilar Hans Larsen
Title: Senior Civil Engineer Public Works Director
Dept: Public Works Public Works
Phone: 510-494-4761 510-494-4722
E-Mail: [email protected] [email protected]

RECOMMENDATION: Approval of the following actions related to the East Bay Greenway: Irvington to Fremont BART Project (PWC9101):

1. Recognized and appropriate $37,449 in federal funds to PWC9101-522.

2. Reallocate $282,551 from PWC9041-515 to PWC9101-515.

3. Find that the actions are exempt from environmental review as a separate and independent base for CEQA compliance, under CEQA Guidelines, Section 15378 (administrative and funding activity not a “project” under CEQA) and Section 15061 (no possibility the activity may have significant effect on the environment).

3. Ceremonial Items
A. Proclamation: Arbor Day, May 14, 2024

4. Public Communications
A. Oral and Written Communications
INDUSTRIAL DEVELOPMENT AUTHORITY - None.

PUBLIC FINANCING AUTHORITY - None.

CONSIDERATION OF ITEMS REMOVED FROM CONSENT CALENDAR

5. Scheduled Items - None.

6. Other Business
A. FY 2024/25 PROPOSED OPERATING BUDGET - Presentation of Fiscal Year 2024/25 Proposed Operating Budget for the City of Fremont Contact Persons:

Name: David Persselin
Title: Finance Director
Dept: Finance Department
Phone: 510-494-4631
E-Mail: [email protected]

RECOMMENDATION: Accept staff’s budget presentation and provide comments.

May 14, 2024 Fremont City Council Page 6

7. Items Referred by Councilmembers
A. Councilmember Referrals - None.

B. Appointments to Boards, Commissions, Committees - None.

C. Legislative Actions - None.

D. Report on Committee Assignments

8. Adjournment
May 14, 2024 Fremont City Council Page 7

ACRONYMS

ABAG Association of Bay Area Governments GIS Geographic Information System ACE Altamont Commuter Express GPA General Plan Amendment ACFCD Alameda County Flood Control District HARB Historical Architectural Review Board ACTC Alameda County Transportation
Commission
HBA Home Builders Association
HRC Human Relations Commission
ACWD Alameda County Water District ICMA International City/County Management Association ARB Art Review Board
BAAQMD

BART
Bay Area Air Quality Management
District
Bay Area Rapid Transit District
JPA Joint Powers Authority
LLMD Lighting and Landscaping Maintenance
District
BCDC Bay Conservation & Development
Commission
LOCC League of California Cities
LOS Level of Service
BMPs Best Management Practices MOU Memorandum of Understanding BMR Below Market Rate MTC Metropolitan Transportation
Commission
CALPERS California Public Employees’ Retirement
System
NEPA
NLC
National Environmental Policy Act
National League of Cities
CBC
CDD
California Building Code
Community Development Department
NPDES National Pollutant Discharge Elimination
System
CC & R’s Covenants, Conditions & Restrictions NPO Neighborhood Preservation Ordinance CDBG Community Development Block Grant PC Planning Commission CEQA California Environmental Quality Act PD Planned District CERT Community Emergency Response Team PDA Priority Development Area CIP Capital Improvement Program PUC Public Utilities Commission CNG Compressed Natural Gas PVAW Private Vehicle Accessway COF City of Fremont PWC Public Works Contract
COPPS Community Oriented Policing and Public
Safety
RFP Request for Proposals
RFQ Request for Qualifications
CSAC California State Association of Counties RHNA Regional Housing Needs Allocation CTC California Transportation Commission ROP Regional Occupational Program dB Decibel RRIDRO Residential Rent Increase Dispute
Resolution Ordinance DEIR Draft Environmental Impact Report DU/AC Dwelling Units per Acre RWQCB Regional Water Quality Control Board EBRPD East Bay Regional Park District SACNET

Southern Alameda County Narcotics
Enforcement Task Force EDAC Economic Development Advisory Commission (City)
EIR
EIS
Environmental Impact Report (CEQA)
Environmental Impact Statement
STIP State Transportation Improvement
Program

ERAF
(NEPA)
Education Revenue Augmentation Fund
TCRDF Tri-Cities Recycling and Disposal Facility
TOD Transit Oriented Development
EVAW
FAR
Emergency Vehicle Accessway
Floor Area Ratio
TS/MRF Transfer Station/Materials Recovery
Facility
FEMA Federal Emergency Management Agency UBC See CBC
FFD Fremont Fire Department VTA Santa Clara Valley Transportation Authority
FMC Fremont Municipal Code WMA Waste Management Authority FPD Fremont Police Department
FRC Family Resource Center ZA Zoning Administrator
FUSD Fremont Unified School District ZTA Zoning Text Amendment

May 14, 2024 Fremont City Council Page 8

UPCOMING MEETING AND CHANNEL 27

BROADCAST SCHEDULE
Date Time Meeting Type Location
Cable
Channel
27 May 14, 2024 7:00 p.m. City Council Meeting Council
Chambers Live
May 21, 2024 7:00 p.m. City Council Meeting Council
Chambers Live
May 28, 2024 5:30 p.m. CC/FUSD Liaison Committee
Meeting FUSD Hosts Live
June 4, 2024 7:00 p.m. City Council Meeting Council
Chambers Live
June 11, 2024 7:00 p.m. City Council Meeting Council
Chambers Live
June 18, 2024 7:00 p.m. City Council Meeting Council
Chambers Live
June 25, 2024 5:30 p.m. CC/FUSD Liaison Committee
Meeting City Hosts Live
July 2, 2024 7:00 p.m. City Council Meeting Council
Chambers Live
July 9, 2024 7:00 p.m. City Council Meeting Council
Chambers Live
July 16, 2024 7:00 p.m. City Council Meeting Council
Chambers Live
July 23, 2024 CANCELLED: CC/FUSD
Liaison Committee Meeting
August Recess Council in Recess until
September

Fremont City Council Meeting: 05/14/24 07:00 PM
3300 Capitol Avenue Div/Dept: Information Technology Services Fremont, CA 94538 Category: Agreements and Contracts

SCHEDULED
Sponsors:

COUNCIL STAFF REPORT (ID # 5113) DOC ID: 5113
Updated: 5/9/2024 6:32 PM by Susan Gauthier Page 1
PURCHASE REPLACEMENT SOFTWARE FOR THE CITY’S DOCUMENT
MANAGEMENT SYSTEM - Authorize the City Manager, or her Designee, to Enter into Agreements with ECS Imaging, Inc. for Implementation Services and Software Licenses and Maintenance and Support of the LaserFiche Software System.

Contact Persons:

Name: James Wong Sanford Taylor
Title: Senior Systems
Analyst/Programmer
IT Director
Div/Dept: Information Technology Services Information Technology Services Phone: (510) 494-4812 510-494-4802
E-Mail: [email protected] [email protected]

Executive Summary: The City of Fremont (City) has utilized the Cimage Document Management System (DMS) since the year 2000. The Document Management System is a repository that stores all the City’s Plans, Permits, Police Department Digital Evidence, City Contracts, and Legislative History. The software system is used by all of the City’s departments and is critical for the City to do business. There have been several upgrades and customizations over the years; however, the software system no longer meets the City’s needs.

The implementation, first-year software licenses, and ongoing annual maintenance cost for the new Laserfiche Document Management System for the period of June 1, 2024, through May 31, 2025, is $151,419. The Ongoing Annual Maintenance and Support for Years 2 and 3 is $54,789.50. The total project cost is $206,208.50. The amount of the implementation, license costs, and ongoing annual maintenance exceeds $100,000 and requires City Council approval.

BACKGROUND: The City has employed the use of Cimage Document Management System since 2000. Although the City has performed numerous upgrades and customizations, the current, 20+ year old Document Management System no longer meets the City’s needs.

A new Document Management System will facilitate contract signage and storage through integration with DocuSign. Also, integration with the City’s permitting system Accela will help automate the storage of plans and permits in accordance with the City’s record retention schedule. The new software system will have full-text retrieval built natively into the software, providing for enhanced search capabilities, and a portal for accessibility to public-facing documents. These new features will provide staff the tools to better adapt to the City's and the public's future needs.

DISCUSSION/ANALYSIS: An interdepartmental project team, comprised of City staff from City Manager, Fire, Community Development, City Attorney and Information Technology Services departments developed a list of functional requirements for a new Document Management System. In July 2023, the City issued a Request for Proposals that was posted

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Council Staff Report (ID # 5113) Meeting of May 14, 2024 Updated: 5/9/2024 6:32 PM by Susan Gauthier Page 2
on BidSync.com. In response to the RFP #24-004, the City received six proposals from the following software companies and software system integrators:

Company Proposed System
ECS Imaging, Inc. Laserfiche
Complete Paperless Solutions Laserfiche
Global Solutions Laserfiche
GRM Visual Vault
Softdocs Etrieve
SoftSages Technology Elise

The proposals were evaluated by the interdepartmental project team using the following criteria: (a) ability for the proposed system to meet the functional requirements in the RFP; (b) able to integrate with DocuSign and Accela systems; (c) public-facing web portal for document search; (d) full-text retrieval capability for enhanced searches (e) understanding the scope of work to be completed; (f) On-premise vs. Cloud SAAS product; (g) responsiveness to the RFP requirements; and (h) costs of software licensing and services.

After the evaluation, the City invited the top two proposers (ECS Imaging, Inc. and Complete Paperless Solutions, Inc.) to demonstrate the capabilities of their Document Management System solution to the interdepartmental project team and representatives from the user departments during a proof-of-concept demonstration over one-half day for each proposer. City staff also conducted reference checks for the top two proposers. After the reference checks and proof-of-concept demonstrations, the City selected ECS Imaging, Inc. as the top proposer with the system that best meets the City’s needs.

The agreement for professional services and Year 1 ongoing annual maintenance and support with ECS Imaging, Inc. will include the following:

Total professional services and Year 1 maintenance Agreement: $151,419 • One-Time Project Costs: $125,400
o Implementation Services $ 54,900
o Data Conversion Services $ 50,000
o Configuration Services $ 10,500
o Contingency $ 10,000

• Ongoing Annual Maintenance and Support: $26,019
o Year 1 $26,019

The maintenance agreement, also paid to ECS, is for on -going support of the LaserFiche software for Years 2 and 3 and will include the following:

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Council Staff Report (ID # 5113) Meeting of May 14, 2024 Updated: 5/9/2024 6:32 PM by Susan Gauthier Page 3
Total Ongoing Annual Maintenance and Support Agreement: $54,789.50 o Year 2 $26,973.75 (3% escalator or CPI, whichever is lower) o Year 3 $27,815.75 (3% escalator or CPI, whichever is lower)

Total Project Cost (implementation, Year 1, 2, 3 ongoing maintenance and support): $206,208.50

FISCAL IMPACT: The estimated one-time project cost not-to-exceed amount is $125,400, as previously described, and the annual software maintenance and support not to exceed amount is $80,808.50 for a three-year term.

The one-time costs ($125,400) and the first year of maintenance and support ($26,019) will be funded by the Information Technology Services Capital Replacement Fund (Fund 625).

The ongoing annual software support costs will be requested in the Information Technology Services Department operating budget as part of the City’s annual budget process.

ENVIRONMENTAL REVIEW: The renewal of computer software licenses is exempt from and not subject to review under the California Environmental Quality Act (CEQA) because, without limitation, it is not a “project” as defined in CEQA Guidelines Section 15378(b)(2) and/or 15378(b)(5) and as it can be seen with certainty that there is no possibility that the activity may have a significant effect on the environment per CEQA Guidelines Section 15061(b)(3), each as a separate and independent basis for CEQA compliance

ATTACHMENTS: None.

RECOMMENDATIONS:

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Fremont City Council Meeting: 05/14/24 07:00 PM
3300 Capitol Avenue Div/Dept: Public Works
Fremont, CA 94538 Category: Agreements and Contracts

SCHEDULED
Sponsors:

COUNCIL STAFF REPORT (ID # 5158) DOC ID: 5158
Updated: 5/9/2024 6:43 PM by Susan Gauthier Page 1
2024 CAPE AND SLURRY SEAL PROJECT - Approval of Plans and Specifications; Award of Contract to VSS International, Inc. in the Amount of $5,767,000 (Including 5% Contingency) for the 2024 Cape and Slurry Seal Project (PWC8195- W2); Appropriation Actions; Make Findings of CEQA Exemption.

Contact Persons:

Name: Edward Nakayama Hans Larsen
Title: Senior Civil Engineer Public Works Director
Div/Dept: Public Works Public Works
Phone: 510-494-4775 510-494-4722
E-Mail: [email protected] [email protected]

Executive Summary: The purpose of this report is to initiate a project to perform pavement preventive maintenance work at various locations citywide, consisting of 131 street segments and totaling 18 miles in length.

BACKGROUND: The City’s Public Works and Maintenance Departments jointly monitor the pavement condition of all streets and annually perform two types of pavement treatments:

• Preventive maintenance treatments – Treatments include cape seals, slurry seals, and crack seals, which involve the application of sealant materials over pavements to extend the pavement life at a relatively low cost.
• Rehabilitation treatments – Treatments include pavement overlays and pavement base repairs, which involve the replacement of all or portions of pavements at a relatively high cost.

The City has allocated a greater amount of resources towards the more economical preventive maintenance treatments in order to address needs on more of the City’s streets.

The preventive maintenance treatments cannot address every defect that exists on a particular street segment, but they do improve and extend the life of the pavement before having to resort to more costly rehabilitation work.

DISCUSSION:

Pavement Preventive Maintenance Project: This project will perform preventive maintenance in the form of cape and slurry seal treatments to 131 street segments, consisting of approximately 18 centerline miles of roadway and covering 3.8 million square feet of pavement surface. The pavement area covered equates to approximately 4% of the entire street network. A map and a list of locations is provided in the LINKS section of this report.

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Council Staff Report (ID # 5158) Meeting of May 14, 2024 Updated: 5/9/2024 6:43 PM by Susan Gauthier Page 2
Bid Results: Bids were received on April 16, 2024. The bidders with their respective bid amounts are shown below. The Engineer’s Estimate is $4,800,000.

Bidder Bid Amount

1. VSS International, Inc. $ 5,493,000.00

2. Pavement Coatings, Inc. $ 5,614,927.15

3. American Pavement Systems, Inc. $ 5,831,774.00

The low bidder, VSS International, Inc. submitted a responsive bid and all documents are in order. The contractor is a responsible bidder experienced in this type of work and has satisfactorily completed contracts of similar nature with the City and other nearby local agencies.

The bid submitted by VSS International, Inc. is higher than the Engineer’s Estimate due to the increase in current market price for striping components, which are necessary for a significant portion of this project.

The project’s total costs and funding are summarized in the table below:

Project Costs and Funding:

Estimated Project Costs:

Construction Contract - Low Bid $5,493,000
Construction Contract Contingency 274,000
Construction Inspection and Administration 800,000
Construction Materials Testing 20,000
TOTAL ESTIMATED PROJECT COSTS $6,587,000

Source of Funding:

PWC8195-501 Capital Improvements Fund $2,081,000
PWC8195-515 ACTC Measure BB Local Streets 1,858,000
PWC8195-520 ACTC Measure BB Bike and Ped 300,000
PWC8195-525 Misc. State Revenue 250,000
PWC8234-134 SB1 RMRA State Gas Tax 2103 873,000 *
PWC8874-520 ACTC Measure BB Bike and Ped 528,000
PWC8874-521 Transportation Development Act 210,000
PWC8944-520 ACTC Measure B Bike and Ped 7,000
PWC9037-531 Traffic Impact Fee (Recommended)
Unallocated Measure BB, Fund 515 (Recommended)
Unallocated Measure BB, Fund 520 (Recommended)
80,000
325,000
75,000

TOTAL FUNDS AVAILABLE $6,587,000

* Amount adjusted to account for 2024 Pavement Rehabilitation Project contract cost referenced in 4/2/24 Council Agenda item 2F. Of the $2.819 million available in this fund, $1.946 million is planned to be used for the Pavement Rehabilitation project contract leaving $873,000 available for this Cape and Slurry Seal project.

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Council Staff Report (ID # 5158) Meeting of May 14, 2024 Updated: 5/9/2024 6:43 PM by Susan Gauthier Page 3
With the recommended appropriation/reallocation of funds as proposed above, there are sufficient funds budgeted and appropriated for this project.

Safe and Complete Streets: This project includes modifications to provide multi-modal roadways consisting of narrower vehicular lanes, buffered bike lanes, enhanced crosswalks, bulb out treatments at intersections, and other improvements in conformance to current design practices for safe and complete streets. These modifications are included in select arterial, collector, and residential streets. The major arterial streets where these modifications are planned include the following:

1. Deep Creek Road from Alvarado Boulevard to Nancy Place

2. Irvington Avenue from Grimmer Boulevard to Chapel Way

3. Fremont Boulevard from Auto Mall Parkway to South Grimmer Boulevard

4. Christy Street from Stewart Avenue to Albrae Street

5. Cushing Parkway from Fremont Boulevard to the bridge leading to Pacific Commons

Traffic Control: Due to the size and scope of this project, City residents and the traveling public will experience some inconvenience during construction. To minimize exposure of vehicles to the work, staff and the contractor will need to limit access and use of the roadways during construction. Individual traffic lanes and, if necessary, the entire width of the street will be closed to traffic briefly in order to perform the pavement work. To mitigate the impact of traffic delays on the public, any lane or street closures will only be allowed during specified hours outside of the morning and evening peak commute hours. The contractor is required to prepare traffic control plans. City staff will review and approve all traffic control plans prior to construction and will monitor traffic control work during construction to minimize the impact to the public. Nearby businesses and residences will also receive notices informing them of the work and any parking restrictions that may be implemented. The contractor will be required to post signs for parking restrictions on project streets no less than 72 hours before the start of work. For locations near schools the contractor will be required to perform the work when school is either not in session or during periods outside of the peak hours when the school pick up or drop off is occurring.

FISCAL IMPACT: The total estimated cost for the project construction is $6,587,000. The total cost includes the cost for the construction contract, a 5% construction contingency, the construction management and inspection services, and City project administration.

The pavement preventive maintenance work along with the safe and complete streets elements are funded by four funding sources: 1) Pavement Maintenance account (PWC8195), 2) Pavement Rehabilitation account (PWC8234), 3) Bikeway Improvement account (PWC8874), and 4) Pedestrian Improvements account (PWC8944). Funding was appropriated for these purposes through the Capital Improvement Program.

In addition, to fully fund the project, staff recommends appropriations of unallocated fund balances from two Alameda County Transportation Commission (ACTC) funding sources: 1) $325,000 from the Measure BB Local Streets Fund (Fund 515); and 2) $75,000 from the Measure BB Bicycle/Pedestrian Fund (Fund 520); as well as a reallocation of $80,000 from the Walnut Avenue/Liberty Street Intersection Improvement Project (PWC9037). Pavement maintenance work scheduled with the Walnut Avenue/Liberty Street Intersection Improvement Project (in the amount of $80,000) had to be deleted from the construction

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Council Staff Report (ID # 5158) Meeting of May 14, 2024 Updated: 5/9/2024 6:43 PM by Susan Gauthier Page 4
contract due to weather delays and are now included with the 2024 Cape and Slurry Seal project.

ENVIRONMENTAL REVIEW: This project is exempt from California Environmental Quality Act (CEQA) review pursuant to CEQA Guidelines section 15301 as the repair, maintenance or minor alteration of existing facilities involving no or negligible expansion of the use beyond that presently existing.

ATTACHMENTS: None.

LINKS:

Project Map:
https://www.fremont.gov/home/showdocument?id=15498&t=638496633998578466

Street List:
https://www.fremont.gov/home/showdocument?id=15496&t=638496632529449869

RECOMMENDATION: Approval of the following actions related to the 2024 Cape and Slurry Seal Project (PWC8195-W2):

1. Approve the plans and specifications for the project.

3. Appropriate unallocated fund balance in ACTC Fund 515 ($325,000) to PWC8195.

4. Appropriate unallocated fund balance in ACTC Fund 520 ($75,000) to PWC8195.

5. Reallocate $80,000 from PWC9037-531 to PWC8195-531.

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Fremont City Council Meeting: 05/14/24 07:00 PM
3300 Capitol Avenue Div/Dept: Finance Department
Fremont, CA 94538 Category: Presentations

SCHEDULED
Sponsors:

COUNCIL STAFF REPORT (ID # 5155) DOC ID: 5155
Updated: 5/9/2024 6:38 PM by Susan Gauthier Page 1
FISCAL YEAR 2022/23 FINANCIAL AUDIT - Transmittal and Acceptance of Fiscal Year 2022/23 Audit Reports
Contact Persons:

Name: Hein Hein Hein Myat David Persselin
Title: Accounting Manager Finance Director
Div/Dept: Finance Department Finance Department
Phone: 510-494-4602 510-494-4631
E-Mail: [email protected] [email protected]

Executive Summary: The independent audit of the City’s Annual Comprehensive Financial Report for the fiscal year ended June 30, 2023 by the certified public accounting firm of Macias Gini & O’Connell LLP was completed on December 28, 2023 and posted to the City website. The Single Audit Report, which is required for the City’s major federal programs, was completed by the auditor on March 27, 2024. In addition, there are other audits that the City is required to undergo; these are generally financial and compliance audits of different sources of funds that the City receives. All of these audits and procedures resulted in unmodified (“clean”) opinions from the City’s independent auditors. Staff recommends that the City Council receive and file the audit reports.

BACKGROUND: Best financial practices as well as various financing covenants and regulations associated with restricted funding sources require the City to prepare and publish a complete set of financial statements each year, prepared in conformance with generally accepted accounting principles (GAAP). These financial statements, referred to as the Annual Comprehensive Financial Report or “ACFR”, are also audited by a firm of licensed certified public accountants. The ACFR for the fiscal year ended June 30, 2023, has been prepared by the City and audited by the certified public accounting firm of Macias Gini & O’Connell LLP (MGO). The ACFR and audit of the City’s financial statements were completed and posted on the City’s website on December 28, 2023, with the link provided to the City Council.

MGO has issued an unmodified (“clean”) opinion on the ACFR, which states that the financial statements are presented fairly in all material respects. In addition to the opinion letter included in the ACFR document, MGO has prepared a separate Report to the City Council.

The purpose of the MGO Report is to communicate the scope of audit procedures performed, significant findings, and other information, such as any disagreements with management, audit adjustments, and significant estimates that are not communicated in the audited financial statements.

Following completion of the ACFR, it was submitted to the Government Finance Officers Association (GFOA) Certificate for Excellence in Financial Reporting program. The GFOA is a nationally recognized nonprofit professional association serving more than 20,000 finance professionals in the United States and Canada, and the Certificate of Achievement is the highest form of recognition in the area of governmental accounting and financial reporting.

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Council Staff Report (ID # 5155) Meeting of May 14, 2024 Updated: 5/9/2024 6:38 PM by Susan Gauthier Page 2
In addition to the audit of the City’s financial statements and the MGO Report to the City Council, MGO also prepared a compliance report for each of the City’s major federal programs, the City’s internal controls over compliance, and the City’s schedule of expenditures of federal awards. This report, referred to as the Single Audit Report, is required under the audit provisions of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), which applies to all governments that expend $750,000 or more per fiscal year in federal grant awards. In FY 2022/23 the City’s federal expenditures totaled $8.8 million.

The Single Audit Report is specifically designed to assure federal grantor agencies from which the City receives funds that internal controls and compliance with the regulations are maintained, and that appropriate financial statements are properly prepared and submitted when due. The Single Audit Report was completed by MGO on March 27, 2024, with an unmodified opinion of compliance for all major grant programs and a finding of no material internal control weaknesses. If the auditors had found any material internal control weaknesses, they would have been required to report those directly to the City Council and to the federal government.

The FY 2022/23 audit and related reports indicate the City continues to have no material internal control weaknesses.

DISCUSSION/ANALYSIS: The City’s financial statements provide information about the finances of the City in its entirety, as well as information about individual funds. The ACFR is organized into the three sections summarized below.

Introductory Section

The Introductory Section includes the Letter of Transmittal, which is designed to complement the Management’s Discussion and Analysis (the “MD&A”) section, and these sections should be read together to better understand the City’s financial position.

Financial Section

The Financial Section begins with the Independent Auditor’s Report, followed by the MD&A, which serves as an executive summary of the financial statements. Following the MD&A are the Government-Wide Financial Statements, which are designed to provide a broad overview of the City’s finances similar to a private sector business. These statements show the June 30, 2023, fiscal year balances and overall results of operations for all City funds.

The Statement of Activities identifies functions of the City that are principally supported by taxes and those that receive program revenues. All of the City’s activities are considered to be governmental in nature and, as a result, no business-type activities are reported in these statements. Governmental activities are those that are principally supported by taxes and program revenues. The governmental activities of the City include general government operations, police services, fire services, human services, capital assets maintenance and operations, recreation and leisure services, community development and environmental services, and interest on long-term debt.

Following the Government-Wide Financial Statements are Fund Financial Statements for all major and non-major funds of the City. A major fund is one of material significance and is

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Council Staff Report (ID # 5155) Meeting of May 14, 2024 Updated: 5/9/2024 6:38 PM by Susan Gauthier Page 3
determined through prescribed calculations. The General Fund is always considered a major fund by definition. Non-major funds are combined in the Fund Financial Statements for presentation purposes.

The fund-level statements are followed by the Notes to the Basic Financial Statements, which contain information on such topics as: Significant Accounting Policies, Cash and Investments, Capital Assets, Long-Term Obligations, Retirement Benefits, and Other Post- Employment Benefits (OPEB).

The Required Supplementary Information provides budgetary comparison schedules for the General Fund and the major special revenue funds, a discussion of the City’s approach to accounting for its street network infrastructure, schedules reporting changes in the net pension liability and pension contributions, and similar schedules for the net OPEB liability and OPEB contributions.

The Supplementary Section presents fund financial statements for the non-major governmental funds, the internal service funds, and the custodial funds. It also includes financial statements for each of the programs constituting the Human Services Fund.

Statistical Section

The last section of the ACFR, which is unaudited, contains schedules of statistical data about the City of Fremont in five major categories: Financial Trends, Revenue Capacity, Debt Capacity, Demographic and Economic Information, and Operating Information. These schedules, generally covering a ten-year period, provide operating context for the financial data presented in the financial section of the ACFR.

The Annual Comprehensive Financial Report is available on the City’s Financial Information web page, and the ACFR opinion letter, the Report to the City Council, and the Single Audit Report are attached to this staff report. Copies are also available for review in the City Clerk’s Office and in the Finance Department.

FISCAL IMPACT: Unmodified audit reports and no material internal control weaknesses are an indication that City funds are being spent appropriately, as intended by the City Council and grantor agencies, and in compliance with federal and state laws. They also help maintain the City’s favorable bond ratings.

ENVIRONMENTAL REVIEW: None required.

LINK to Attachment:

• Annual Comprehensive Financial Report for the Fiscal Year Ended June 30, 2023

ATTACHMENTS:
• 2023 Single Audit Report
• 2023 ACFR Opinion Letter
• 2023 Report to the City Council

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Council Staff Report (ID # 5155) Meeting of May 14, 2024 Updated: 5/9/2024 6:38 PM by Susan Gauthier Page 4
RECOMMENDATION: Receive financial audit reports for Fiscal Year 2022/23 and file.

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CITY OF FREMONT
S
ingle Audit Report
F
or the Year Ended June 30, 2023

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Attachment: 2023 Single Audit Report (5155 : FY 2022/23 Financial Audit)

CITY OF FREMONT
Single Audit Report
For the Year Ended June 30, 2023

Table of Contents

Page

Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards ............................................................. 1

Independent Auditor’s Report on Compliance For Each Major Federal Program; Report on Internal Control Over Compliance; and Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance .................................. 3

Schedule of Expenditures of Federal Awards ............................................................................................... 7

Notes to the Schedule of Expenditures of Federal Awards ........................................................................... 8

Schedule of Findings and Questioned Costs ................................................................................................. 9

Corrective Action Plan ................................................................................................................................ 12

Summary Schedule of Prior Audit Findings ............................................................................................... 13

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Attachment: 2023 Single Audit Report (5155 : FY 2022/23 Financial Audit) www.mgocpa.com Macias Gini & O’Connell LLP
2121 N California Blvd. Suite 750
Walnut Creek, CA 94596
1 Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards H
onorable Mayor and Members
of the City Council
City of Fremont, California
W
e have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards , issued by the Comptroller General of the United States (Government Auditing Standards ), the financial statements of the governmental activities, each major fund, and the aggregate remaining fund informati on of the City of Fremont, California (City), as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated December 28, 2023.

Rep
ort on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.

A d
eficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent , or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those c harged with governance.

O
ur consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or signifi cant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified.

Rep
ort on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements . However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express suc h an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

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Attachment: 2023 Single Audit Report (5155 : FY 2022/23 Financial Audit) 2 Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance wi th Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Wa
lnut Creek, California
December 28, 2023

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Attachment: 2023 Single Audit Report (5155 : FY 2022/23 Financial Audit) www.mgocpa.com Macias Gini & O’Connell LLP
2121 N California Blvd. Suite 750
Walnut Creek, CA 94596
3 Independent Auditor’s Report on Compliance for Each Major Federal Program; Report on Internal Control Over Compliance; and Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance H
onorable Mayor and Members
of the City Council
City of Fremont, California
Rep
ort on Compliance for Each Major Federal Program
O
pinion on Each Major Federal Program
W
e have audited the City of Fremont , California’s (City) compliance with the types of compliance requirements identified as subject to audit in the OMB Compliance Suppleme nt that could have a direct and material effect on each of the City’s major federal programs for the year ended June 30, 2023. The City’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs.

I
n our opinion, the City complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2023.

B
asis for Opinion on Each Major Federal Program
W
e conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America (GAAS); the standards applicable to financial audits contained in Government Audit Standards issued by the Comptroller General of the United States ( Government Audit Standards ); and the audit requirements of Title 2 U.S. Code of Federal Regulation Part 200 , Uniform Administrative Requirements, Costs Principles, and Audit Requiremen ts for Fe deral Awards (Uniform Guidance). Our responsibilities under those standards and the Uniform Guidance are further described in the Auditor’s Responsibilities for the Audit of Compliance section of our report.

W
e are required to be independent of the City and to meet our other ethical responsibilities, in accordance with 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 opinion on compl iance for each major federal program. Our audit does not provide a legal determination of the City’s compliance with the compliance requirements referred to above.

Responsibilities of Management for Compliance
M
anagement is responsible for compliance wi th the re quirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules and provisions of contracts or grant agreements applicable to the City’s federal programs.

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Attachment: 2023 Single Audit Report (5155 : FY 2022/23 Financial Audit) 4 Auditor’s Responsibilities for the Audit of Compliance Ou
r objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fr aud or err or, and express an opinion on the City’s compliance based on our audit. 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 GAAS, Government A uditing St andards, and the Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting material noncompliance 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. Noncompliance with the compliance requirements referred to above is considered material if there is a substantial likelihood that, individually or in the aggregate, it would i nfluence the judgment made by a reasonable user of the report on compliance about the City’s compliance with requirements of each major federal program as a whole.

I
n performing an audit in accordance with GAAS, Government Auditing Standards , and the Un iform Guidance, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material noncompliance, whether due to fraud or error, and desi gn a
nd perform audit procedures responsive to tho se risks. Such procedures include examining, on a test basis, evidence regarding the City’s compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances. • Obtain an unde rstanding of the City’s internal control over compliance relevant to the audit i n or
der to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion of the effectiveness of the City’s internal control over compliance. Accordingly, no such opinion is expressed.

We are required to communicate with those charged with governance regarding, among other matt ers, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit.

Ot
her Matter
T
he results of our auditing procedures disclosed an instance of noncompliance which is required to be reported in accordance with the Uniform Guidance and which is described in the accompanying schedule of findings and questioned costs as item 2023 -001. Our opinion on each major federal program is not modified with respect to this matter.

Go
vernment Auditing Standards requires the auditor to perform limited procedures on the City’s response to the noncompliance findings identified in our compliance audit described in the accompanying schedule of findings and questioned costs. The City ’s response was not subjected to the other auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response.

Rep
ort on Internal Control Over Compliance
Our considerat ion of internal control over compliance was for the limited purpose described in the Auditor’s Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be materi al weaknesses or sig nificant deficiencies in internal control over complianc e and therefore , material weak nesses or significant deficiencies may exist that were not identified . We did not identify any deficiencies in internal control over compliance that we consider to be mat erial weaknesses. However, as discussed below, we did

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Attachment: 2023 Single Audit Report (5155 : FY 2022/23 Financial Audit) 5 identify certain deficiencies in internal control over compliance that we consider to be significant deficiencies.

A d
eficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requir ement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompl iance wit h a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of com pliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. We consider the deficien cy in internal control over complia nce described in t he accompanying schedule of findings and questioned costs as item 2023-001, to be a significant deficiency.

O
ur audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed.

Government Auditing Standards requires the auditor to perform limited procedures on the City’s response to th e internal control over compliance findings identified in our compliance audit described in the accompanying schedule of findings and questioned costs. The City ’s response was not subjected to the other auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response.

T
he purpose of this report on internal control over complia nce is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.

R
eport on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance We have audited the financial statements of the governmental activities, each major fun d, and the aggregate remaining fund information of the City, as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements.

We issued our report thereon dat ed December 28 , 2023, which contained unmodified opinions on those financial statements. Our audit was pe rformed for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as requir ed by the Uniform Guidance and is not a required part of the basic financial statements. Such i nformation 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 financial statements and certain add itional proc edures, 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 schedule of expenditures of federal awards is fairly stated, in all material respects, in relation to the basic financial statements as a whole.

W
alnut Creek, California
March 27, 2024

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Attachment: 2023 Single Audit Report (5155 : FY 2022/23 Financial Audit) 6 T
he page intentionally left blank

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Attachment: 2023 Single Audit Report (5155 : FY 2022/23 Financial Audit)

CITY OF FREMONT
Schedule of Expenditures of Federal Awards
For the Year Ended June 30, 2023
Assistance Grant Identifying Number or Federal Amount Passed to Federal Grantor/Pass-Through Grantor/Federal Program Title Listi ng Number Pass-Through Entity Number Expenditures Subrecipients U.S. Department of Agriculture
Direct Program:

SNAP Cluster:

State Administrative Matching Grants for the Supplemental Nutrition Assistance Program 10.561 18-7013 27,118 $ - $ Total U.S. Department of Agriculture 27,118 - U.S. Department of Housing and Urban Development
Direct Programs:

CDBG - Entitlement Grants Cluster:

Community Development Block Grants/Entitlement Grants 14.218 B-20 -MC-06-0011 298,105 246,941 Community Development Block Grants/Entitlement Grants 14.218 B-22 -MC-06-0011 979,140 491,680 COVID-19 - Community Development Block Grants/Entitlement Grants 14.218 B-20-MW-06-0011 247,845 - Subtotal CDBG - Entitlement Grants Cluster 1,525,090 738,621 Home Investment Partnerships Program 14.239 M-23-DC-06-0001 254,38 8 75,000 Total U.S. Department of Housing and Urban Development 1,779,478 813,621 U.S. Department of Justice
Direct Program:

Public Safety Partnership and Community Policing Grants 16.710 n/ a 250,000 - Pass-Through Alameda County Sheriff's Office:

Edward Byrne Memorial Justice Assistance Grant Program 16.738 201 9-DJ-BX-0689 13,604 - Edward Byrne Memorial Justice Assistance Grant Program 16.738 202 0-DJ-BX-0777 3,077 - Edward Byrne Memorial Justice Assistance Grant Program 16.738 15P BJA-21-GG-01242-JAGX 1,002 - Total U.S. Department of Justice 267,683 - U.S. Department of Transportation
Pass-Through State of California Department of Transportation:

Highway Planning and Construction 20.205 04-5322 878,433 - Pass-Through California Office of Traffic Safety
Highway Safety Cluster:

National Priority Safety Programs 20.616 PT23031 30,626 - National Priority Safety Programs 20.616 PT22173 7,957 - Subtotal Highway Safety Cluster 38,583 - Total U.S. Department of Transportation 917,016 - U.S. Department of Treasury
Direct Programs:

Volunteer Income Tax Assistance (VITA) Matching Grant Program 21 .009 V13076 55,000 - COVID-19 - Emergency Rental Assistance Program 21.023 n/a 1,284,55 7 - Pass-Through California Business, Consumer Services, and Housin g Agency COVID-19 - Emergency Rental Assistance Program 21.023 21-ERAP-200 13 1,862,677 - Subtotal Emergency Rental Assistance Program 3,147,234 - Total U.S. Department of Treasury 3,202,234 - U.S. Department of Health and Human Services
Pass-Through Alameda County Area Agency on Aging:

Special Programs for the Aging, Title III, Part D, Disease Prevention and Health Promotion Services 93.043 900111 80,000 - National Family Caregiver Support, Title III, Part E 93.052 900111 84,594 - Aging Cluster:

Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and Senior Centers 93.044 900111 161,920 - COVID-19 - Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and Senior Centers 93.044 901939 5,105 - Pass-Through Alameda County - Oakland Community Action Partners hip:
477 Cluster:

Community Services Block Grant 93.569 21F-4002 44,194 - Pass-Through Alameda County Behavioral Health Care Services:

Block Grants for Prevention and Treatment of Substance Abuse 93. 959 900111 395,902 - Medicaid Cluster:

Medical Assistance Program:

Pass-Through State of California Department of Health and Human Services:

Targeted Case Management - Linkages 93.778 01-19EVRGRN 148,608 - Targeted Case Management - Community 93.778 01-19EVRGRN 197,753 - Alameda County Health Care Services - Medi-Cal Administrative Activities 93.778 19-96008 684,001 - Pass-Through State of California Department of Aging:

Multipurpose Senior Services Program 93.778 MS-2223-37 422,965 - Subtotal Medicaid Cluster 1,453,327 -
Total U.S. Department of Health and Human Services 2,225,042 - U.S. Department of Homeland Security
Direct Program:

Hazard Mitigation Grant 97.039 001-26000 48,601 - Assistance to Firefighters Grant 97.044 EMW-2020-FG-19137 185,995 - Assistance to Firefighters Grant 97.044 EMW-2021-FG-05855 117,958 - Homeland Security Grant Program 97.067 2021-0081 14,363 - Pass-Through County of Alameda:

Homeland Security Grant Program:

FEMA- CERT 97.067 2018-0054 14,195 -
Subtotal Homeland Security Grant Program 28,558 - Total U.S. Department of Homeland Security 381,112 - Total Expenditures of Federal Awards 8,799,683$ 813,621$ See accompanying notes to the schedule of expenditures of federal awards. 7 2.E.a
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Attachment: 2023 Single Audit Report (5155 : FY 2022/23 Financial Audit)

CITY OF FREMONT
Notes to the Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2023
8 (1) GENERAL
T
he accompanying S chedule of E xpenditures of F ederal Awards (SEFA) presents the act ivity of the federal award programs of the City of Fremont, California (City). The City’s reporting entity is defined in Note 1 to its basic financial statements. The information in the SEFA is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Admini strative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Th e SEF
A includes all federal awards received directly from federal agencies and federal awards passed - through other governmental agencies.
(2
) BASIS OF ACCOUNTING
T
he accompanying SEFA is presented using the modified accrual basis of accounting for grants as described in Note 1 to the City’s basic financial statements. The City did not elect to use the 10% de mi
nimis cost rate as covered in 2 CFR section 200.414 Indirect (F&A) costs.

As a r
esult of the COVID-19 pandemic, many new federal programs have been established and fundi ng ha
s been added to existing federal programs. Expenditures funded from the following acts are denoted by t
he prefix COVID-19 in the federal program title in the SEFA (as applicable):
• C
oronavirus Preparedness and Response Supplemental Appropriations Act • Families First Coronavirus Response Act
• Coronavirus Aid, Relief, and Economic Security Act (CARES Act) • Coronavirus Response and Relief Supplemental Appropriations Act (CRRSAA) • American Rescue Plan Act (ARP)
(3
) RELATIONSHIP TO THE BASIC FINANCIAL STATEMENTS
E
xpenditures of federal awards are reported in the City’s basic financial statements as expenditures in th e gove
rnmental funds. Federal award expenditures agree or can be reconciled with the amounts reported in the City’s basic financial statements.
(4
) RELATIONSHIP TO FEDERAL FINANCIAL REPORTS
A
mounts reported in the SEFA agree to or can be reconciled with the amounts reported in the related federal financial reports.

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Attachment: 2023 Single Audit Report (5155 : FY 2022/23 Financial Audit)

CITY OF FREMONT
Schedule of Findings and Questioned Costs
For the Year Ended June 30, 2023
9 Section I Summary of Auditor’s Results
F
inancial Statements
Type of auditor’s report issued on whether the financial statements audited were prepared in accordance with U.S.

GAAP:

Unmodified

Internal control over financial reporting:
♦ Material weakness(es) identified? No
♦ Significant deficiency(ies) identified? None reported Noncompliance material to the financial statements noted? No Federal Awards
Internal control over major programs:
♦ Material weakness(es) identified? No
♦ Significant deficiency(ies) identified? Yes
Type of auditor’s report issued on compliance for the major federal programs:

Unmodified

Any audit findings disclosed that are required to be reported in accordance with Uniform Guidance? No

Identification of major federal programs:

Assistance
Listing Numbers Name of Federal Program or Cluster

14.218

20.205

21.023

93.778
Community Development Block Grants/Entitlement Grants
Highway Planning and Construction
Emergency Rental Assistance Program
Medical Assistance Program
Dollar threshold used to distinguish between type A
and type B programs: $750,000
Auditee qualified as a low-risk auditee? Yes
S
ection II Financial Statements Findings
None reported.

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Attachment: 2023 Single Audit Report (5155 : FY 2022/23 Financial Audit)

CITY OF FREMONT
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2023
10 Section III Federal Awards Findings and Questioned Costs Fi
nding 2023-001 Wa ge Rate Requirements
(Significant Deficiency in Internal Control Over Compliance) P
rogram Identification:

Awar
ding Agency: U.S. Department of Housing and Urban Development Program Name: Community Development Block Grants/Entitlement Grants Assistance Listing Number: 14.218
Award Number: B-20-MC-06-0011
Award Year: Fiscal Year Ended June 30, 2021
C
riteria:

Title
29 - Labor Part 5 – Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction (Also Labor Standards Provisions Applicable to Nonconstruction Contracts Subject to the Contract Work Hours and Safety Standards Act), Subpart A – Davis-Bacon and Related Acts Provisions and Procedures §5.5 Contract provisions and related matters. (
a) T
he agency head shall cause or require the contracting officer to insert in full in any contract in excess of $2,000 which is entered into for the actual construction, alteration and/or repair, including painting and decorating, of a public buildin g or public work, or building or work financed in whole or in part from federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contrib ution (except where a different meaning is expressly indicated), and which is subject to the labor standards provisions of any of the acts listed in §5.1, the following clauses (or any modifications thereof to meet the particular needs of the agency, provided, that such modifications are first approved by the Department of Labor):
(1) M
inimum wages. (i) All laborers and mechanics employed or working upon the site of the work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Sec retary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics. (ii
) (
A) The contractor shall submit weekly for each week in which any contract work is performed a copy of all payrolls to t he agency that is a party to the contract, but if the agency is not such a party, th e co
ntractor will submit the payrolls to the applicant, sponsor, or owner, as the case may be, for transmission to the agency. The payrolls submitted shall set out accurately and completely all of the information required to be maintained under 29 CFR 5.5(a)(3)(i), except that full social security number s an
d home addresses shall not be included on weekly transm ittals. Instead the payrolls shall only need t o i
nclude an individually identifying number for each employee (e.g., the last four digits of the employee ’s so
cial security number).

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Attachment: 2023 Single Audit Report (5155 : FY 2022/23 Financial Audit)

CITY OF FREMONT
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2023
11 Fi
nding 2023-001 Wa ge Rate Requirements (Continued)
C
ondition:

D
uring our audit of the City’s compliance with the Wage Rate Requirements for the CDBG Program, we selected a statistically valid sample of five certified payroll reports from a population of approximately 31 certified payrolls for the construction pe riod November 9, 2022 through June 21, 2023. We noted that the City did not receiv e the required certified payroll prior to the City authorizing disbursement of funds to the prime contractors for 4 of the items selected.

C
ause of Condition:

T
he City typi cally makes monthly payments to contractors. Although contractors are required to submit certified payrolls on a timely basis, the C ity did not carefully review and verify required documents were received before approval for payment.

Effe
ct:

T
he City, wh o is responsible fo r ov erseeing compliance with the Wage Rate Requirements, did not consistently verify the laborers and mechanics employed by the contractors were paid prevailing wage rates before payment was released to the contractors. There is a risk t hat federal funds may be paid to contractors who do not comply with the Wage Rate Requirements, resulting in unallowable costs.

Qu
estioned Costs:

Qu
estioned costs are the payments made to the contractor during the period, which total $223,435.

Rec
ommendation:

W
e recommen d th at the C ity evaluate the effectiveness of its current internal control policies and procedures. In addition, we recommend that the City establish inte rnal control policies and procedures over withholding payment until the certified payrolls are received.

Vi
ews of Responsible Officials and Corrective Action Plan:

M
anagement’s response is reported in “Corrective Action Plan” included on the next page of this report.

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Attachment: 2023 Single Audit Report (5155 : FY 2022/23 Financial Audit) Finance Department
3300 Capitol Avenue, P.O. Box 5006, Fremont, CA 94537-5006 510 494-4610 ph | 510 494-4611 fax | www.fremont.gov
12 Corre
ctive Action Plan
For the Year Ended June 30, 2023
Refe
rence Number: 2023-001
Awarding Agency: U.S. Department of Housing and Urban Development Program Name: Community Development Block Grants/Entitlement Grants Assistance Listing Number: 14.218
Award Number: B-20-MC-06-0011
Award Year: Fiscal Year Ended June 30, 2021
Category of Finding: Wage Rate Requirements
Type of Finding: Significant Deficiency in Internal Control Over Compliance Status: Corrective Action in Progress
Corrective Action Plan: The City concurs with the recommendation. To ensure compliance, the City wil l carefully review and verify the required certified payroll before authorizing payment and disbursement of funds for the federally funded projects.

Responsible Party for Corrective Action Plan: Project managers responsible for federally funded projects Implementation Date of Corrective Action Plan: January 1, 2024

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Attachment: 2023 Single Audit Report (5155 : FY 2022/23 Financial Audit)

CITY OF FREMONT
Summary Schedule of Prior Audit Findings and Corrective Action Plan For the Year Ended June 30, 2023
13 Financial Statements and Federal Awards Findings
T
here were no financial statements nor federal awards findings for the year ended June 30, 2022.

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Attachment: 2023 Single Audit Report (5155 : FY 2022/23 Financial Audit)

ACFR for the Fiscal Year Ended June 30, 2023 | 13
Financial Section

Independent Auditor’s Report
Honorable Mayor and the Members of the City Council of
City of Fremont, California

Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the City of Fremont, California (City), as of and for the fiscal year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.

In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the City as of June 30, 2023, and the respective changes in financial position, and, where applicable, cash flows thereof for the fiscal year then ended in accordance with accounting principles generally accepted in the United States of America.

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

Emphasis of Matter
As discussed in Note 1 to the financial statements, as of July 1, 2022, the City implemented Governmental Accounting Standards Board (GASB) Statement No. 96, Subscription-Based Information Technology Arrangements. Our opinions are not modified with respect to this matter.

Other Matter
Prior-Year Comparative Information
The financial statements include summarized prior-year comparative information. Such information does not include all of the information required to constitute a presentation in accordance with accounting principles generally accepted in the United States of America. Accordingly, such information should be read in conjunction with the City’s financial statements for the fiscal year ended June 30, 2022, from which such summarized information was derived.

Macias Gini & O’Connell LLP 2121 N. California Blvd., Suite 750 Walnut Creek, CA 94596 www.mgocpa.com

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Attachment: 2023 ACFR Opinion Letter (5155 : FY 2022/23 Financial Audit) Independent Auditors’ Report
14 | City of Fremont, California
Report on Summarized Comparative Information
We have previously audited the City’s 2022 financial statements, and we expressed unmodified opinions on the respective financial statements of the governmental activities, each major fund, and the aggregate remaining fund information in our report dated December 23, 2022. In our opinion, the summarized comparative information presented herein as of and for the fiscal year ended June 30, 2022, is consistent, in all material respects, with the audited financial statements from which it has been derived.

Responsibilities of Management for the Financial Statements The City’s 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 the City’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.

Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our 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 GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS and Government Auditing Standards, we:

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

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

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Attachment: 2023 ACFR Opinion Letter (5155 : FY 2022/23 Financial Audit) Independent Auditors’ Report
ACFR for the Fiscal Year Ended June 30, 2023 | 15
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, the budgetary comparison schedules, the modified approach for the City’s infrastructure information, the schedules of changes in the net pension liability and related ratios, the schedules of pension plan contributions, the schedule of changes in the net OPEB liability and related ratios, and the schedule of OPEB plan contributions, as listed in the table of contents, be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the GASB who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with GAAS, 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 the City’s basic financial statements. The combining and individual fund financial statements and schedules are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the 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 GAAS. In our opinion, the individual and combining fund financial statements and schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Other Information
The City’s management is responsible for the other information included in the annual comprehensive financial report. The other information comprises the introductory and statistical sections but does not include the basic financial statements and our auditor’s report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon.

In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material 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.

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Attachment: 2023 ACFR Opinion Letter (5155 : FY 2022/23 Financial Audit) Independent Auditors’ Report
16 | City of Fremont, California
Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 28, 2023, on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.

Walnut Creek, California
December 28, 2023

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Attachment: 2023 ACFR Opinion Letter (5155 : FY 2022/23 Financial Audit)

CITY OF FREMONT, CALIFORNIA
R
eport to Those Charged With Governance
F
or the Year Ended June 30, 2023

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Attachment: 2023 Report to the City Council (5155 : FY 2022/23 Financial Audit) www.mgocpa.com Macias Gini & O’Connell LLP
2121 N California Blvd. Suite 750
Walnut Creek, CA 94596
1 December 28, 2023
T
o the Honorable Mayor and Members
of the City Council of the City of Fremont
Fremont, California
W
e are pleased to present this report related to our audit of the governmental activities, each major fund, and the aggregate remaining fund information of the City of Fremont (City), as of and for the year ended June 30, 2023. This report summarizes certain matters required by professional standards to be communicated to you in your oversight responsibility for the City’s financial reporting process.

T
his report is intended solely for the information and use of the City Council and management, and is not intended to be, and should not be, used by anyone other than these specified parties. It will be our pleasure to respond to any questions you have about this report. We appreciate the opportunity to continue to be of service to the City.

Wa
lnut Creek, California

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Attachment: 2023 Report to the City Council (5155 : FY 2022/23 Financial Audit)

2 TABLE OF CONTENTS
Required Communications 3
Exhibit:

Exhibit A— Recent Accounting Pronouncements 10

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Attachment: 2023 Report to the City Council (5155 : FY 2022/23 Financial Audit)

3 REQUIRED COMMUNICATIONS
Auditing standards generally accepted in the United States of America (AU-C 260, The Auditor’s Communication With Those Charged With Governance ) require the auditor to promote effective two -way communication between the auditor and those charged with governance. Consistent with this requirement, the following summarizes our responsibilities regarding the financial statement audit s as well as observations arising from our audit s that are significant and relevant to your responsibility to oversee the financial reporting process.

Our Responsibilities With Regard to the Financial Statement Audit

Our responsibilities under auditing standards generally accepted in the United States of America and Government Auditing Standards issued by the Comptroller General of the United States have been described to you in our engagement letter dated June 12, 2023. Our audit of the City’s financial statements does not relieve management or those charged with governance of their responsibilities, which are also described in that letter.

Overview of the Planned Scope and Timing of the Financial Statement Audits

We conducted our audit s consistent with the planned scope and timing in our engagement letter dated June 12, 2023.

Accounting Policies and Practices

Preferability of Accounting Policies and Practices
Under accounting principles generally accepted in the United States of America, in certain circumstances, management may select among alternative accounting practices. In our view, in such circumstances, management has selected the preferable accounting practice.

Adoption of, or Change in, Accounting Policies
Management has the ultimate responsibility for the appropriateness of the accounting pol icies used by the City. A summary of the significant policies adopted by the City is included in Note 1 to the financial statements. As described in Note 1. H. to the financial statements, the f ollowing is a description of Governmental Accounting Standards board (GASB) Statements that the City implemented during the year:

• GASB Statement No. 91 – Conduit Debt Obligations
This statement provides a single method of reporting conduit debt obligations by issuers and eliminates diversity in practice associated with (1) commitments extended by issuers, (2) arrangements associated with conduit debt obligations, and (3) related note disclosures. This statement achieves those objectives by clarifying the existing definition of a conduit debt obligation; establishing that a conduit debt obligation is not a liability of the issuer; establishing standards for accounting and financial reporting of additional commitments and voluntary commitments extended by issuers and arrangements associated with conduit debt obligations; and improving required note disclosures. The statement did not have a significant impact on the City’s financial statements for the year ended June 30, 2023.

• GASB Statement No. 94 - Public-Private and Public -Public Partnerships and Availability Payment Arrangements
This statement is to improve financial reporting by addressing issues related to public-private and public-public partnership arrangements (PPPs). As used in this statement, a PPP is an arrangement in which a government (the transferor) contracts with an o perator (a governmental or nongovernmental entity) to provide public services by conveying control of the right to operate or use a nonfinancial

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Attachment: 2023 Report to the City Council (5155 : FY 2022/23 Financial Audit)

4 asset, such as infrastructure or other capital asset (the underlying PPP asset), for a period of time in an exchange or exchange -like transaction. Some PPPs meet the definition of a service concession arrangement (SCA), which the Board defines in this stat ement as a PPP in which (1) the operator collects and is compensated by fees from third parties; (2) the transferor determines or has the ability to modify or approve which services the operator is required to provide, to whom the operator is required to provide the services, and the prices or rates that can be charged for the services; and (3) the transferor is entitled to significant residual interest in the service utility of the underlying PPP asset at the end of the arrangement. This statement also pro vides guidance for accounting and financial reporting for availability payment arrangements (APAs). As defined in this statement, an APA is an arrangement in which a government compensates an operator for services that may include designing, constructing, financing, maintaining, or operating an underlying nonfinancial asset for a period of time in an exchange or exchange -like transaction. The statement did not have a significant impact on the City’s financial statements for the year ended June 30, 2023.

• GASB Statement No. 96 – Subscription-Based Information Technology Arrangements This statement provides guidance on the accounting and financial reporting for subscription-based information technology arrangements (SBITAs) for government end users (governments). This statement (1) defines a SBITA; (2) establishes that a SBITA results in a right-to-use subscription asset— an intangible asset—and a corresponding subscription liability; (3) provides the capitalization criteria for outlays other than subscription payments, including implementation costs of a SBITA; and (4) requires note disclosures regarding a SBITA. To the extent relevant, the standards for SBITAs are based on the standards established in Statement No. 87, Leases, as amended. A SBITA is defined as a contract that conveys control of the right to use another party’s (a SBITA vendor’s) information technology (IT) software, alone or in combination with tangible capital assets (the underlying IT assets), as specified in the contract for a period of time in an exchange or exchange -like transaction. The subscription term includes the period during which a government has a noncancelable right to use the underlying IT assets. The subscription term also includes periods covered by an option to extend (if it is reasonably certain that the government or SBITA vendor will exercise that option) or to terminate (if it is reasonably certain that the government or SBITA vendor will not exercise that option). Under this statement, a government generally should recognize a right -to-use subscription asset —an intangible asset —and a corresponding subscription liability. The application of this statement impacted the City’s financial statements and footnote disclosures for the year ended June 30, 2023.

• GASB Statement No. 99 – Omnibus 2022
The objectives of this statement are to enhance comparability in accounting and financial reporting and to improve the consistency of authoritative literature by addressing: (1) Classification and reporting of derivative instruments within the scope of St atement No. 53, Accounting and Financial Reporting for Derivative Instruments, that do not meet the definition of either an investment derivative instrument or a hedging derivative instrument; (2) Clarification of provisions in Statement No. 87, Leases, as amended, related to the determination of the lease term, classification of a lease as a short -term lease, recognition and measurement of a lease liability and a lease asset, and identification of lease incentives; (3) Clarification of provisions in Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements, related to (a) the determination of the public -private and public- public partnership (PPP) term and (b) recognition and measurement of installment payments and the transfer of the underlying PPP asset; (4) Clarification of provisions in Statement No. 96, Subscription- Based Information Technology Arrangements, related to the subscription-based information technology arrangement (SBITA) term, classification of a SBITA as a short -term SBITA, and recognition and measurement of a subscription liability; (5) Extension of the period during which the London Interbank Offered Rate (LIBOR) is considered an appropriate benchmark interest rate for the qualitative evaluation of the effectiveness of an interest rate swap that hedges the interest rate risk of taxable debt; (6) Accounting for the distribution of benefits as part of the Supplemental Nutrition Assistance Program (SNAP); (7) Disclosures related to nonmonetary transactions; (8) Pledges of future revenues when

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5 resources are not received by the pledging government; (9) Clarification of provisions in Statement No. 34, Basic Financial Statements — and Management’ s Discussion and Analysis— for State and Local Governments, as amended, related to the focus of the government -wide financial statements; (10) Terminology updates related to certain provisions of Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position; and (11) Terminology used in Statement 53 to refer to resource flows statements.

The required effective dates of this Statement are as follows: Items (5), (6), (7), (8), (9), (10), and (11) were implemented starting FY 2022; items (2), (3), and (4) related to leases, PPPs, and SBITAs were implemented for FY 2023 reporting purposes. The required changes are reflected in the City’s financial statements and notes to the statements, as necessary . Item (1), which is related to financial guarantees and the classification and reporting of derivative instruments within the scope of Statement No. 53 is required to take effect for financial statements starting with the year ending June 30, 2024, however, the City chose to implement the full Statement for the year ended June 30, 2023. The statement did not have a significant impact on the City’s financial statements for the year ended June 30, 2023.

• GASB Statement No. 100 – Accounting Changes and Error Corrections – an Amendment of GASB Statement No. 62
The objective of this statement is to enhance accounting and financial reporting requirements for accounting changes and error corrections to provide more understandable, reliable, relevant consistent, and comparable information for making decisions or assessing accountability. The application of this statement did not have a significant impact on the City’s financial statements for the fiscal year ended June 30, 2023.

Significant Accounting Policies
We did not identify any significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus.

Significant Unusual Transactions
We did not identify any significant unusual transactions.

Management’s Judgments and Accounting Estimates
Accounting estimates are an integral part of the preparation of financial statements and are based upon management’s current judgment. The process used by management encompasses their knowledge and experience about past and current events, and certain assumptions about future events. You may wish to monitor throughout the year the process used to determine and record these accounting estimates.

The following is summary information about the process used by management in formulating particularly sensitive accounting estimates and about our conclusions regarding the reasonableness of those estimates:

Significant Accounting Estimates
Measurement of
investments at fair value
The City’s investments are accounted for in accordance with the provisions of GASB Statement No. 72, Fair Value Measurement and Application, and accordingly, its fair value measurements are categorized within the fair value hierarchy established by the standard.

The following levels indicate the hierarchy of inputs used to measure fair value and the primary valuation methodologies used for f inancial instruments measured at fair value on a recurring basis:

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Attachment: 2023 Report to the City Council (5155 : FY 2022/23 Financial Audit)

6 Significant Accounting Estimates
o Level 1 – Investments whose values are based on quoted prices (unadjusted) for identical assets in active markets that a government can access at the measurement date.

o Level 2 – Investments whose values are based on inputs – other than quoted prices including prices included within level 1 – that are observable for an asset, either directly or indirectly.
o Level 3 – Investments whose values are based on
unobservable inputs for an asset and may require a degree of professional judgment.

All the City’s investments are measured using level 2 inputs, except for investments in U.S Treasuries which are measured using level 1 inputs, and California Local Agency Investment Fund, money market mutual funds, and equity mutual funds which are not subject to fair value hierarchy.

MGO compared investment values from quoted market information and using pricing applications and models obtained from custodian bank, fiscal agents or other sources and determined that they were reasonable.

Depreciation and
amortization of capital
assets, including
depreciation/amortization
methods and useful lives
assigned to
depreciable/amortizable
property
Useful lives for depreciable capital assets were determined by management based on the nature of the capital asset. Depreciation was calculated based on the straight-line method.

MGO assessed the reasonableness of the useful lives based on the nature of the capital assets and performed substantive analytical procedures on depreciation expense and determined the estimates were reasonable.

Estimated allowance for
losses on notes and loans
receivable
The allowance for losses on notes and loans receivable was based on management’s estimate regarding the likelihood of collectability.

MGO assessed the reasonableness of the allowances based on the nature of the notes and loans receivable and performed substantive analytical procedures on the balances and determined the estimates were reasonable.

Accrual of compensated
absences
The accruals of compensated absences are based on accrued eligible hours of vacation and other compensated leave for eligible employees.

MGO assessed the reasonableness of the accrual based on the nature of the compensated absences and performed substantive analytical procedures on the balances and determined the accrual was reasonable.

Net pension and Other
Post-Employment Benefits
(OPEB) liabilities,
The pension balances are based on actuarial valuations performed by the California Public Employees’ Retirement System’s independent

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7 Audit Adjustments and Uncorrected Misstatements

There were no uncorrected or corrected misstatements that were material to the financial statements.

Departure From the Auditor’s Standard Report

There were no departures from the Auditor’s Standard Report.

Significant Accounting Estimates
contributions, expenses,
and other related balances
actuaries. The OPEB balances are based on actuarial valuations performed by the City’s OPEB actuary, Foster & Foster.

MGO agreed the calculations to the actuarial valuations developed through CalPERS and Foster & Foster and tested the reasonableness of allocations to various City funds.

Claims loss reserve The City is exposed to a variety of risks of loss due to general liability, workers’ compensation and other claims, and records an estimate of these losses based on actuarial studies performed by third -party actuaries. These studies are prepared based on t he City’s prior claims history, which is used as a basis for extrapolating losses for known and incurred but not reported claims. Actual loss experience may vary from these estimates.

MGO reviewed the actuarial valuations and the related assumptions used in the City’s calculations for these liabilities, and determined them to be reasonable.

Pollution remediation
obligations
The accruals of pollution remediation obligations are based on analyses performed by the City’s management.

MGO assessed the reasonableness of the accrual based on the nature of the remediation projects and performed substantive analytical procedures on the balances and determined the accrual was reasonable.

Discount rate used for the
calculation of lease
liability, lease receivable,
and SBITA liability

The discount rates for the calculation of the lease receivable are based on the City’s bank prime loan rate in effect on the lease inception date as shown in the Federal Reserve Board Selected Interest Rates – H.15 report.

The discount rates for the calculation of the SBITA liability are based on the money market update (MMD) tax-exempt General Obligation rates at SBITA inception date.

MGO evaluated the City’s methodology and assumptions behind the estimates and verified on a test-basis that the discount rates had been appropriately applied in the City’s calculation of the lease and SBITA balances.

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8 Disagreements With Management
We encountered no disagreements with management over the application of significant accounting principles, the basis for management’s judgments on any significant matters, the scope of the audit or significant disclosures to be included in the City’s financial statements.

Consultations With Other Accountants
We are not aware of any consultations management had with other accountants about accounting or auditing matters.

Significant Issues Discussed With Management
No significant issues arising from the audit were discussed or were the subject of correspondence with management.

Significant Difficulties Encountered in Performing the Audit We did not encounter any significant difficulties in dealing with management during the audit.

Shared Responsibilities for Independence
Independence is a joint responsibility and is managed most effectively when management, audit committees (or their equivalents), and audit firms work together in considering compliance with American Institute of Certified Public Accountants (AICPA) and Government Accountability Office (GAO) independence rules.

For MGO to fulfill its professional responsibility to maintain and monitor independence, management, the Board of Commissioners, and MGO each play an important role.

Our Responsibilities

1. AICPA and GAO rules require independence both of mind and in appearance when providing audit and other attestation services. MGO is to ensure that the AICPA and GAO’s General Requirements for performing non-attest services are adhered to and included in all letters of engagement.

2. Maintain a system of quality management over compliance with independence rules and firm policies.

The City’s Responsibilities

1. Timely inform MGO, before the effective date of transactions or other business changes, of the following:
a. New affiliates, directors, or officers.
b. Changes in the organizational structure or the reporting entity impacting affiliates such as subsidiaries, partnerships, related entities, investments, joint ventures, component units, and jointly governed organizations.

2. Provide necessary affiliate information such as new or updated structure charts, as well as financial information required to perform materiality calculations needed for making affiliate determinations.

3. Understand and conclude on the permissibility, prior to the City and its affiliates, officers, directors, or persons in a decision-making capacity, engaging in business relationships with MGO.

4. Not entering into arrangements of nonaudit services resulting in MGO being involved in making management decisions on behalf of the City.

5. Not entering into relationships resulting in close family members of MGO covered persons, temporarily or permanently acting as an officer, director, or person in an accounting, financial reporting or compliance oversight role at the City.

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Attachment: 2023 Report to the City Council (5155 : FY 2022/23 Financial Audit)

9 EXHIBIT A
Recent Accounting Pronouncements

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Attachment: 2023 Report to the City Council (5155 : FY 2022/23 Financial Audit)

10 RECENT ACCOUNTING PRONOUNCEMENTS
The following accounting pronouncements have been issued as of the date of this communication but are not yet effective and may affect the future financial reporting by the City.

Pronouncement Summary
GASB Statement No.
101, Compensated
Absences
The objective of this statement is to better meet the information needs of financial statement users by updating the recognition and measurement guidance for compensated absences. That objective is achieved by aligning the recognition and measurement guidance under a unified mod el and by amending certain previously required disclosures.

Statement No. 101 is effective for the City’s year ending June 30, 2025.

GASB Statement No.
102, Certain Risk
Disclosures
The objective of this statement is t o provide users of government financial statements with essential information about risks related to a government’s vulnerabilities due to certain concentrations or constraints.

Statement No. 102 is effective for the City’s year ending June 30, 2025.

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Attachment: 2023 Report to the City Council (5155 : FY 2022/23 Financial Audit) Fremont City Council Meeting: 05/14/24 07:00 PM
3300 Capitol Avenue Div/Dept: Public Works
Fremont, CA 94538 Category: Public Projects

SCHEDULED
Sponsors:

COUNCIL STAFF REPORT (ID # 5148) DOC ID: 5148
Updated: 5/9/2024 7:55 AM by Dina Lewis Page 1
FUNDING FOR EAST BAY GREENWAY PROJECT - Authorization to Receive Federal Grant Funds and Reallocate Local Matching Funds for Design Work Related to the “East Bay Greenway: Irvington to Fremont BART” Project (PWC9101) for a Combined Total Funding Amount of $320,000; Appropriation Actions; Make Findings of CEQA Exemption
Contact Persons:

Name: Mirabel Aguilar Hans Larsen
Title: Senior Civil Engineer Public Works Director
Div/Dept: Public Works Public Works
Phone: 510-494-4761 510-494-4722
E-Mail: [email protected] [email protected]

Executive Summary: The purpose of this report is to facilitate the allocation of additional funding to support development of the East Bay Greenway trail segment connecting the planned Irvington BART Station area to the Fremont BART Station area. In September 2023, the City Council approved a funding grant from the Alameda County Transportation Commission (ACTC) for project design in the amount of $1,033,000. At this time, project matching funds are proposed to be allocated in the amount of $37,449 from federal sources and $282,551 from City sources (reallocated from the Regional Projects Funding Match appropriation).

BACKGROUND: The “East Bay Greenway: Irvington to Fremont BART” project (PWC9101) proposes to construct a segment of the East Bay Greenway regional trail, extending from the Irvington District to Fremont Central Park, as well as a new trail connection between the East Bay Greenway to the Fremont BART station. The East Bay Greenway is a priority regional trail project in Alameda County connecting the cities of Oakland, San Leandro, Hayward, Union City and Fremont. In south Fremont, the East Bay Greenway connects with the Bay Trail and extends into the cities of Milpitas, San Jose, and Santa Clara. The East Bay Greenway alignment in the Fremont area links together the BART stations of Union City, Fremont, Irvington (planned), and Warm Springs/South Fremont. Due to the near-term development of nearly 900 units of affordable housing close to the Irvington BART station in advance of the Irvington BART Station completion, priority is being given to complete the East Bay Greenway from Irvington to the Fremont BART station so that the Irvington community has more convenient access to the BART system at the existing Fremont BART station.

On September 19, 2023, the City Council accepted a $1,033,000 grant from ACTC for the East Bay Greenway: Irvington to Fremont BART project and authorized the City Manager to execute a Project Funding Agreement (PFA). At this time, additional funding for the project has been identified to provide a required funding match.

DISCUSSION/ANALYSIS: Recently, the Metropolitan Transportation Commission (MTC) identified a source of unused federal transportation funds in the amount of $37,433 that could be applied to projects that align with MTC priorities. In partnership with ACTC, Fremont requested using these funds for the East Bay Greenway: Irvington to Fremont

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Council Staff Report (ID # 5148) Meeting of May 14, 2024 Updated: 5/9/2024 7:55 AM by Dina Lewis Page 2
BART project. While the funding amount is relatively small, the use of these funds has the strategic advantage of “federalizing” the project, so that a federal environmental clearance can be prepared and then the project can then better compete for future federal opportunities for construction funding. It is recommended that the City Council accept the federal funds for the project.

The previously approved grant from ACTC (for $1,033,000) also requires that the City secure a 25% funding match for the project. A previously approved allocation of State funds in the amount of $25,000 has already been appropriated to the project. With the new federal funding amount of $37,433, there remains an additional need for matching funds in the amount of $282,551. It is recommended that the City Council approve the reallocation of funds from the City’s Regional Projects Funding Match appropriation (PWC9041), in the amount of $282,551, to complete the required funding match.

The next steps for advancing the East Bay Greenway: Irvington to Fremont BART project include the following: 1) execute Project Funding Agreement with ACTC for environmental clearance and design phase and the identification of all funding sources; 2) select a consultant to prepare State and federal environmental clearances and project design (proposed for Council consideration in Fall 2024); and 3) seek funding for project construction.

FISCAL IMPACT: The recommended actions in this staff report will provide funding in the amount of $1,378,000 for the East Bay Greenway: Irvington to Fremont BART project (PWC9101). New funding appropriations include accepting federal funds in the amount of $37,433 and reallocating City funds in the amount of $282,551 to PWC9101 from PWC9041, an existing appropriation titled “Regional Projects Funding Match” and using funds from Measure BB (Fund 515). Past appropriations include accepting an ACTC grant in the amount of $1,033,000 and an allocation of State funds in the amount of $25,000. The proposed project funding appropriation will enable the procurement of design consultant services for the project. Additional funding required for City staff support will be identified when the consultant agreement comes to the City Council for approval in Fall 2024.

ENVIRONMENTAL REVIEW: The recommended funding actions are exempt from the requirements of the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Sections 15061(b)(3) and 15378(b) as it can be seen with certainty that these activities do not have the potential for causing a significant effect on the environment. The project will undergo environmental review in compliance with CEQA.

ATTACHMENTS: None.

RECOMMENDATION: Approval of the following actions related to the East Bay Greenway:

Irvington to Fremont BART Project (PWC9101):

1. Recognized and appropriate $37,449 in federal funds to PWC9101-522.

2. Reallocate $282,551 from PWC9041-515 to PWC9101-515.

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Fremont City Council Meeting: 05/14/24 07:00 PM
3300 Capitol Avenue Div/Dept: Finance Department
Fremont, CA 94538 Category: Budget

SCHEDULED
Sponsors:

COUNCIL STAFF REPORT (ID # 5149) DOC ID: 5149
Updated: 5/9/2024 4:44 PM by Dina Lewis Page 1
FY 2024/25 PROPOSED OPERATING BUDGET - Presentation of Fiscal Year 2024/25 Proposed Operating Budget for the City of Fremont Contact Persons:

Name: David Persselin
Title: Finance Director
Div/Dept: Finance Department
Phone: 510-494-4631
E-Mail: [email protected]

Executive Summary: The FY 2024/25 Proposed Operating Budget has been developed and is presented for the City Council’s review and comment. Public hearings on the proposed budget are scheduled for June 4, 2024, and June 11, 2024, with adoption anticipated at the conclusion of the second public hearing.

BACKGROUND:

This proposed budget addresses a near-term revenue shortfall brought about by the State’s overpayment of sales tax revenue to the City during FY 2022/23. We expect the State to reallocate approximately $19.5 million of revenue over the last quarter of FY 2023/24 and the first quarter of FY 2024/25. Combined with reduced ongoing sales tax revenue estimates, those reallocations will require the use of one-time funds to maintain the current level of services to the community in FY 2024/25.

The City Council’s prudent decisions to set aside the General Fund unreserved ending fund balance from FY 2022/23, to increase the General Fund Budget Uncertainty Reserve at the beginning of FY 2023/24, and to further augment the Budget Uncertainty Reserve at mid- year, provide the resources needed to offset the near-term revenue shortfall. The General Fund forecast indicates that ongoing revenues will again be sufficient to cover ongoing expenditures, without the further use of reserves, beginning in FY 2025/26.

DISCUSSION/ANALYSIS:

Fiscal Year 2024/25 Proposed Operating Budget
Combined with $15.1 million from the Budget Uncertainty Reserve, General Fund budgeted resources of $261.2 million will support total budgeted expenditures of $276.3 million.

As the City will be experiencing a revenue shortfall, the proposed budget includes very few General Fund service enhancements. One of the highlights of FY 2024/25 will be the activation of the City’s new fire truck company in early 2025. Additional service proposals include increased spending for business district activation, higher funding for the special event sponsorship program to accommodate expanded events and higher fees, and a new police lieutenant position to focus on public accountability, enhanced policing standards, emergency preparedness, and support for community field operations.

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Outside the General Fund, integrated waste management fees will fund more frequent homeless encampment cleanups, and contracts with the County will pay for additional staff to serve youth and family services clients at the Fremont Family Resource Center.

These proposed additions to the operating budget respond to City Council and community priorities by funding fiscally-sustainable initiatives designed to enhance public safety, address homelessness, and increase the vitality of our business districts.

The proposed operating budget also incorporates a cost-neutral shift of the City’s Environmental Services Division from the Community Services Department to the Community Development Department, which currently houses the City’s environmental sustainability function. The combined resources will better position the organization to pursue the City Council’s goal of prioritizing environmental sustainability.

General Fund Reserves
The FY 2024/25 Proposed Operating Budget maintains the General Fund Contingency Reserve at 16.7% of budgeted expenditures and transfers out, or $46.1 million, a level consistent with City Council policy and the recommended practice of the Government Finance Officers Association of the United States and Canada.

The proposed budget anticipates that the $30.0 million Budget Uncertainty Reserve will be drawn down in the current year, leaving a balance of $24.4 million at the beginning of FY 2024/25.

FISCAL IMPACT: The City Council is not being asked to take action tonight on the FY 2024/25 Proposed Operating Budget other than to provide comments to staff. An initial public hearing will be held on June 4, 2024, with a second public hearing and adoption of the budget scheduled for June 11, 2024.

ENVIRONMENTAL REVIEW: This agenda item is not subject to the requirements of the California Environmental Quality Act (CEQA) per CEQA Guidelines Section 15378 as it is not defined as a “project.”

LINK: The FY 2024/25 Proposed Operating Budget is posted on the City’s website at https://www.fremont.gov/government/departments/finance/financial-reports.

RECOMMENDATION: Accept staff’s budget presentation and provide comments.

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Fremont City CouncilMay 14, 2024

Fremont City Council
May 14, 2024