Garden Grove City Council
February 22, 2022

AGENDA
Garden Grove City
Council
Tuesday, February 22,
2022
6:30 PM
Community Meeting
Center, 11300 Stanford
Avenue, Garden Grove,
California 92840
Steve Jones
Mayor
Diedre Thu-Ha Nguyen
Mayor Pro Tem - District 3
George S. Brietigam
Council Member - District 1
John R. O'Neill
Council Member - District 2
Patrick Phat Bui
Council Member - District 4
Stephanie Klopfenstein
Council Member - District 5
Kim B. Nguyen
Council Member - District 6
COVID-19 Information : Members of the public can address the City Council during the public comment portion of the meeting in person or via e-mail. If you plan to attend the meeting in person, masks or face coverings are required to be worn if you are not vaccinated. If you feel ill or are showing symptoms of COVID-19, please consider submitting comments by e-mail. Instructions are available on the City's website at https://ggcity.org/city-council/meetings-participation

Meeting Assistance
: Any person requiring auxiliary aids and services, due to a disability, to address the City Council, should contact the City Clerk's Office 72 hours prior to the meeting to arrange for accommodations. Phone: (714) 741-5040.

Agenda Item Descriptions
: Are intended to give a brief, general description of the item. The City Council may take legislative action deemed appropriate with respect to the item and is not limited to the recommended action indicated in staff reports or the agenda.

Documents/Writings
: Any revised or additional documents/writings related to an item on the agenda distributed to all or a majority of the Council Members within 72 hours of a meeting, are made available for public inspection at the same time (1) in the City Clerk's Office at 11222 Acacia Parkway, Garden Grove, CA 92840, during normal business hours; (2) on the City's website as an attachment to the City Council meeting agenda; and (3) at the Council Chamber at the time of the meeting.

Public Comments
: Members of the public who attend the meeting in-person and would like to address the City Council are requested to complete a pink speaker card indicating their name and address, and identifying the subject matter they wish to address. This card should be given to the City Clerk before the meeting begins. General comments are made during "Oral Communications" and should be limited to matters under consideration and/or what the City Council has jurisdiction over.

Persons wishing to address the City Council regarding a Public Hearing matter will be called to the podium at the time the matter is being considered. Members of the public participating via teleconference should review the instructions on the City's website pertaining to Live Virtual Public Comments at https://ggcity.org/city-council/meetings-participation

Manner of Addressing the City Council
: After being called by the Mayor, you may approach the podium, it is requested that you state your name for the record, and proceed to address the City

GARDEN GROVE
Council. All remarks and questions should be addressed to the City Council as a whole and not to individual Council Members or staff members. Any person making impertinent, slanderous, or profane remarks or who becomes boisterous while addressing the City Council shall be called to order by the Mayor.If such conduct continues, the Mayor may order the person barred from addressing the City Council any further during that meeting.

Time Limitation
: When any group of persons wishes to address the City Council on the same subject matter, the Mayor may request a spokesperson be chosen to represent the group, so as to avoid unnecessary repetition.At the City Council's discretion, a limit on the total amount of time for public comments during Oral Communications and/or a further limit on the time allotted to each speaker during Oral Communications may be set.

PLEASE SILENCE YOUR CELL PHONES DURING THE MEETING.

AGENDA

ROLL CALL: COUNCIL MEMBER BRIETIGAM, COUNCIL MEMBER

O'NEILL, COUNCIL MEMBER BUI, COUNCIL MEMBER KLOPFENSTEIN, COUNCIL MEMBER K. NGUYEN, MAYOR PRO TEM D. NGUYEN , MAYOR JONES

INVOCATION

PLEDGE OF ALLEGIANCE TO THE FLAG OF THE UNITED STATES OF

AMERICA

1. PRESENTATIONS

1.a. Information on the 47th Annual Americana Awards as presented by the Executive Director Howard Kummerman of the Cypress College Foundation.

2. ORAL COMMUNICATIONS (to be held simultaneously with other legislative bodies)
RECESS

CONDUCT OTHER LEGISLATIVE BODIES' BUSINESS

RECONVENE

3. CONSENT ITEMS
(Consent Items will be acted on simultaneously with one motion unless separate discussion and/or action is requested by a Council Member .)

3.a. Approval of an agreement with the County of Orange for the 2021 Edward Byrne Memorial Justice Assistance Grants (JAG)
Program; and allocation of JAG Grant Funds to the Police Department. (Grant Amount: $38,548.85) ( Action Item)

3.b. Receive and file annual financial reports and auditor’s communication related to the Fiscal Year 2020-21 annual audit.

(Action Item)

3.c. Receive and file minutes from the meeting held on February 8, 2022. (Action Item)

3.d. Receive and file warrants. ( Action Item)

4. PUBLIC HEARINGS
(Motion to approve will include adoption of each Resolution unless otherwise stated.)

4.a. Third Public Hearing regarding the Redistricting Process post 2020 Census. (Action Item)

5. ITEMS FOR CONSIDERATION

5.a. Award a contract to All Cities Engineering, Inc., for Project CP1285000 - Alwood Avenue and Anthony Avenue Water
Improvements Project. (Cost: $1,560,288) ( Action Item)

6. MATTERS FROM THE MAYOR, CITY COUNCIL MEMBERS, AND CITY

MANAGER

6.a. Statewide temporary emergency drought regulations update and compliance efforts as requested by City Manager Stiles. ( Action Item)

7. ADJOURNMENT
The next Regular City Council Meeting is Tuesday, March 8, 2022, at 5:30 p.m. in the Community Meeting Center, 11300 Stanford Avenue, Garden Grove, California, 92840.

Agenda Item - 3.a.

City of Garden Grove

INTER-DEPARTMENT MEMORANDUM
To: Scott C. Stiles From: Tom DaRè
Dept.: CIty Manager Dept.: Police
Subject: Approval of an agreement with
the County of Orange for the
2021 Edward Byrne Memorial
Justice Assistance Grants (JAG)
Program; and allocation of JAG
Grant Funds to the Police
Department. (Grant Amount:
$38,548.85) (Action Item)
Date: 2/22/2022

OBJECTIVE
To obtain City Council approval of an agreement with the County of Orange for the acceptance and allocation of Justice Assistance Grant funds of approximately $38,549.

BACKGROUND
In FY 2005-06, Congress combined the Local Law Enforcement Block Grant Program (primarily funding cities) with the Edward Byrne Memorial Grant (primarily funding states and counties), to provide funds for the Justice Assistance Grant (JAG). All eligible Orange County cities under this program now file a joint application with the County to receive their share of these funds.

DISCUSSION
Grant year 2021 JAG funds will be used to purchase equipment to update/upgrade the Department’s mobile surveillance unit, including, but not limited to, items such as camera systems and networking and monitoring equipment. Much of the current equipment is quite old by technological standards, and upgrading the equipment will allow for more effective collection and retention of evidence to aid in prosecution of felony offenses.

For the 2018 JAG grant year, the Department of Justice requested for the first time that the County set aside three percent of JAG funds for NIBRS (FBI National Incident-Based Reporting System) compliance. For that first year, the County, as the fiscal agent, used three percent of the total award to pay for NIBRS-related training for the County and city sub recipients. For grant years 2019 and 2020 the County continued to retain the NIBRS set-aside funds, however, the DOJ requires that each city manage their own portion of the award dedicated to NIBRS compliance.

Therefore, the County revised its allocation tables for funds awarded in grant years 2019 and 2020 to reflect the addition of NIBRS set-aside funds in each city’s total allocation. The Police Department will use its NIBRS set-aside funds for training.

City Council previously approved MOUs with the County for JAG grant years 2019 and 2020.

Funds to be appropriated per this request are as follows:

Grant Year Allocation Admin
Fees
(10%)
City retains NIBRS (3%) Project Funds Total
Approp

(10%)
2021 40,428.00 4,043.00 36,385.00 1,212.84 35,172.16
2020 958.45
2019 1,205.40
3,376.69 35,172.16 38,548.85

FINANCIAL IMPACT
Using JAG money to help fund the above described programs creates no burden on the City’s General Fund.

RECOMMENDATION
It is recommended that the City Council:

Approve the Agreement with the County of Orange for the 2021 Edward Byrne Memorial Justice Assistance Grant (JAG) program, and allocate JAG grant funds for grant years 2019, 2020 and 2021 as noted above to the Police Department’s FY 2021-22 budget; and

Authorize the City Manager to execute the agreement with the County of Orange and make minor changes or modifications thereto as needed.

ATTACHMENTS:

Description Upload Date Type File Name
JAG 2021 MOU 2/14/2022 Agreement JAG_2021_MOU.pdf
2021 JAG Certifications 2/14/2022 Backup Material 2021_JAG_Certs_signed.pdf 2021 JAG Award Documents 2/14/2022 Backup Material 2021_JAG_Award_Docs.pdf

•
•

MEMORANDUM OF UNDERSTANDING BETWEEN THE COUNTV OF ORANGE (SHERI FF) AND THE CITV OF GARDEN GROVE TO DISTRIBUTE THE 2021 EDWARD BVRNE MEMORIAL FUND- JUSTICE ASSISTAN<;~ GRANT '1JAG"
AWARD #lSPBJA-21-GG .. 01188-JAGX AWARD DATE: 10/08/2021 ACCEPTANCE DATE: 12/07/2021 I. Participants
Participants here to acknowledge the County of orange as lead fiscal agent In charge of programmatic oversight and administration of funds and compHance over all eligible participant law enforcement agencies, hereinafter referred to lndlvldually as '
1 Party" and jointly as "the Parties."
II. Purpose
The purpose of th is Memorandum of Understanding (MOU) Is to support of the o bjectlves of the Office of Justice Programs, expressly those Identified as Priority Purpose Areas (PPAs) for the term of this award.

Ill. Program Oven,lew and Description of Pro/ect(s}
The Edward Byrne Memorial Justice Assistance Grant Program (JAG) allows states and units of local government, Including tribes, to support a broad range of criminal Justice related activities based on their own state and local needs and conditions. Equipment purchases or funded initiatives such as overtime, task forces, drug programs, lnfonnation sharing, etc. will be aimed at reducing crime and/or enhancing public/officer safety.

JAG funds can be used for state and local initiatives, technical assistance, training, personnel, equipment, supplies, contractual support, and Information systems for crimlnar Justice, including for any one or more of the following purpose areas: 1) law enforcement programs; 2) prosecution and court programs; 3) prevention and education programs; 4) corrections and community corrections programs; 5) drug treatment and enforcement programs; 6) planning, evaluation, and technology lmprov~ment programs; 7) crime victim and wltne~s programs (other than compensation); and 8) mental health programs and related law enforcement and corrections programs, including behavioral programs and crisis Intervention teams. The County of Orange (Sheriff) will determine validity of each project Included in the application 1of2

MEMORANDUM OF UNDERSTANDING BETWEEN THE COUNTY OF ORANGE (SHERIFF) AND THE CITY OF GARDEN GROVE TO DISTRIBUTE THE 2021 EDWARD BYRNE MEMORIAL FUND - JUSTICE ASSISTANCE GRANT "JAG"
AWARD #lSPBJA-21-GG-01188-JAGX AWARD DATE: 10/08/2021 ACCEPTANCE DATE: 12/07/2021 and subsequent awards. JAG funding will be used to support criminal justice initiatives that fall under one or more of the allowable program areas above.

This award is subject to all terms and conditions of the grant and admini strative and financial requirements, including the tim ely submission of all financial and programmatic report s, resolution of all interim audit findings, and the maintenance of a minimum level of cash-on­ hand. Should you not adhere to these requirem ents, you wil l be in violation of the terms of this agreement and the award will be subject to termination for cause or other administrative action as appropr iate.

THE UNDERSIGNED PARTIES HERETO ACKNOWLEDGE THE RECEIPT OF FUNDS FROM THE DEPARTMENT OF JUSTICE AND TRANSFER OF FUNDS FROM COUNTY TO MUNICIPAL GOVERNMENTS.

COUNTY OF ORANGE
ORANGE COUNTY SHERIFF DON BARNES on behalf of

COUNTY EXECUTIVE OFFICER, FRANK KIM

ORANGE COUNTY SHERIFF'S DEPARTMENT

FINANCIAL/ADMINISTRATIVE SERVICES DIVISION

FINANCIAL DIRECTOR

GARDEN GROVE CITY

GARDEN GROVE POLICE DEPARTMENT

CITY MANAGER
2 of 2

AUTHORIZED SIGNATORY

AUTHORIZED SIGNATORY
~OASTOFOHM
OfflCE Of TttE COUNTY COUNSt:.

OAANGf COUN"TV, CALIFOAMA

U.S. DEPARTMENT OF JUSTICE

OFFICE OF JUSTICE PROGRAMS
Edward Byrne Justice Assistance Grant Program FY 2021 Local Solicitation Certifications and Assurances by the Chief Executive of the Applicant Government On behalf of the applicant unit of local government named below, in support of that locality's application for an award under the FY 2021 Edward Byrne Justice Assistance Grant ("JAG") Program, and further to 34 U.S.C. § 10153(a) , I certify to the Office of Justice Programs ("OJP"), U.S. Department of Justice ("USDOJ"), that all of the following are true and correct:

1. I am the chief executive of the applicant unit of local government named below, and I have the authority to make the following representations on my own behalf as chief executive and on behalf of the applicant unit of local government. I understand that these representations will be relied upon as material in any OJP decision to make an award, under the application described above, to the applicant unit of local government.

2. I certify that no federal funds made available by the award (if any) that 0JP makes based on the application described above will be used to supplant local funds, but will be used to increase the amounts of such funds that would, in the absence of federal funds, be made available for law enforcement activities.

3. I assure that the application described above (and any amendment to that application) was submitted for review to the governing body of the unit of local government (e.g., city council or county commission}, or to an organization designated by that governing body, not less than 30 days before the date of this certification.

4. I assure that, before the date of this certification- (a) the application described above (and any amendment to that application) was made public; and (b) an opportunity to comment on that application (or amendment) was provided to citizens and to neighborhood or community-based organizations, to the extent applicable law or established procedure made such an opportunity available.

5. I assure that, for each fiscal year of the award (if any) that 0JP makes based on the application described above, the applicant unit of local government will maintain and report such data, records, and information (programmatic and financial), as 0JP may reasonably require.

6. I have carefully reviewed 34 U.S.C. § 10153(a)(5), and, with respect to the programs to be funded by the award (if any), I hereby make the certification required by section 10153(a)(5), as to each of the items specified therein.

Date of Certification
ScoH: C. Sti\t6
Printed Name of Chief Executive Titleo Chief Exe utive
Ci~ rf ~ lM':~en &Y1YL
Applicant Unit of Local Government
Rev. May 11, 2021

U.S. DEPARTMENT OF JUSTICE

OFFICE OF JUSTICE PROGRAMS
Edward Byrne Justice Assistance Grant Program FY 2021 Local Solicitation Certifications and Assurances by the Chief Executiv e of the Appli cant Government On behalf of the applicant unit of local government named below, in support of that locality's application for an award under the FY 2021 Edward Byrne Justice Assistance Grant (" JAG' ) Program, and further to 34 U.S.C. § 10153(a), I certify to the Office of Justice Programs ("OJP"), U.S. Department of Justice ('USDOJ"), that all of the following are true and correct:

1. I am the chief executive of the applicant unit of local government named below, and I have the authority to make the following representations on my own behalf as chief executive and on behalf of the applicant unit of local government. I understand that these representations will be relied upon as material in any OJP decision to make an award, under the application described above, to the applicant unit of local government.

2. I certify that no federal funds made available by the award (if any) that OJP makes based on the applicat ion described above will be used to supplant local funds, but will be used to increase the amounts of such funds that would, in the absence of federal funds, be made available for law enforcement activities.

3. I assure that the application described above (and any amendment to that application) was submitted for review to the governing body of the unit of local government (e.g., city council or county commission), or to an organization designated by that governing body, not less than 30 days before the date of this certification .

4. I assure that, before the date of this certification- (a) the application described above (and any amendment to that application) was made public; and (b) an opportunity to comment on that application (or amendment) was provided to citizens and to neighborhood or community-based organizations, to the extent applicable law or established procedure made such an opportunity available.

5. I assure that, for each fiscal year of the award (if any) that OJP makes based on the application described above, the applicant unit of local government will maintain and report such data, records, and information (programmatic and financial), as OJP may reasonably require.

6. I have carefully reviewed 34 U.S.C. § 10153(a)(5), and, with respect to the programs to be funded by the award (if any), I hereby make the certification required by section 10153(a)(5), as to each of the items specified therein.

Digitally ~gned by Fr•nl< Kim
ON: cn•Frank Kim. o,.County or
Orange, ou=CEO,
cmall=frank.ldmOocgov.com,
c=i US
O.to: 2021.07.29 09-.23:08--0TOO'
Signature of Chief Executive of the Applicant Unit of
Local Government
Frank Kim
Printed Name of Chief Executive
Cot,,N, 'f OF Ol'tAN6 t-i S/-H. Bl Et· - CORQ f\,l f R, Name of Applicant Unit of Local Government
7/29/21
Date of Certification
CEO
Title of Chief Executive
~~OAS TO FORM
.--.. ...,.,_ rvv .. ~ COUNSS.
~ VVUf)I I T. CALIFORNIA
By ~c,0 ~
~puly
Dam: ·7 /.2 & /22/
7 I
Rev. May 11, 2021

• • Award Letter
October 8, 2021
Dear Monique Vansuch,
On behalf of Attorney General Merrick B. Garland, It Is my pleasure to lnfonn you the Office of Justice Programs (OJP) has approved the appllcaUon submitted by ORANGE, COUN1Y OF for an award under the funding opportunity entitled 2021 BJA FY 21 Edward Byrne Memorial Justice Assistance Grant (JAG) Program - Local Sollcltatfon. The approved award amount Is $427.301.

Review the Award Instrument below carefully and femlllarlze yourself with all conditions and requirements before accepting your award. The Award Instrument Includes the Award Offer (Award Information, Project lnfonnatlon, Flnanclal Information, and Award Conditions) and Award Acceptance.

Please note that award requfrements Include not only the conditions and limitations set forth In the Award Offer, but also compDance with assufl)ncas and certifications that relate to conduct during the period of performance for the award. These requirements encompass flnanclal, administrative. and programmatic matters, as well as other Important matters {e.g., specific restrictions on use of funds). Therefore, all key staff should reoelva the award conditions, the assurances and certifications, and the application as approved by OJP, so that they understand the award requirements. Information on all pertinent award requirements also must be provided to any subreclplent of the award.

Should you accept the award and then fall to comply with an award requirement, DOJ wfll pursue appropriate remedies for non-compllaa:ace, which may Include termination of the award and/or a requirement to repay award funds.

To accept the award, the Authorized Representatlve(s) must accept all parts of the Awam Offer in the Justice Grants System (JustGran1s), Including by executing the required declaration and certlflcatlon, within 45 days from the award date.

Congratulatlons, and·we look foiward to working with. you.

Maureen Henneberg
Deputy Assistant Attorney General
Office for Clvll Rights Notice for All Recipients
The Office for CMI Rights (OCR), Office of Justice Programs (OJP), U.S. Deparbnent of Justice

(POJ) has been delegated the responslblllty for ensuring that recipients of federal flnanolal assistance from the OJP, the Office of Community Oriented Policing Services (COPS), and the Office on Violence Against Women (OVW) are not engaged In discrimination prohibited by law.

Several federal cMI rights laws. such as TIUe VI, of the Clyll Rights Act of 1964 ~nd Section 504 of the Rehebllitetlon Act of 1973, require reclplehts of federal flnanclal asslstanoa to give assurances that they will comply with those Jaws. Taken together, these civil rights laws prohibit recipients of federal financial assistance from DOJ from discriminating In services and employment because of race, color, national origin, religion, dlsablllty, sex, and, for grants authorized under the Vlolenoa Against Women Act, sexual orJentatlon end gender Identity.

Recipients are also proh~blted from discriminating In services because of age. For a complete review of these clvJI rights laws and nondiscrimination requirements, In connection with DOJ awards, see https:1/oJp.gov/fundlng/Explore/LegalOvervlew/ClvllRfghtsR~ulrements.htm.

Under ~e delegation of authority, the OCR Investigates allegations of discrimination against recipients from lndMduals, entitles, or groups. In addition, the OCR conducts llmlted compliance reviews and audits based on regulatory criteria. These reviews and audits permit the OCR to evaluate whether reclpfents of flnanolal assistance from the_ Department are providing services In a nondiscriminatory manner to their service population or have employment practices that meet equal-opportunity standards.

If you are a recipient of grant awards under the Omnibus Crime Control and Safe Streets Act or the Juvenile Justice and Delinquency Prevention Act and your agency Is part of a criminal Justice system, there are two addftlonal obligations that may apply In connection with the awards: (1) complylng with the regulatlon relating to Equal Employment Opportunity Programs (EEOPs); and (2) submitting findings of discrimination to OCR. For addltronal Information regarding the EEOP requirement,. see 28 CFR Part 42, subpart E, and for additional Information regarding requirements when there Is an adverse finding. see 28 C.F.R. §§ 42.204(0), ·.206(c) ~ • -
The OCR Is available to help you and your organization meet the cMI rights requirements that are asso~lated with DOJ grant funding. If you would llke the OCR to assist you In fulfilling your organization's clvH rights or nondJscrlmlnatlon responsibilities as a recipient of federal financial assistance, please do not hesitate to contact the OCR at [email protected].

Memorandum Regarding NEPA
NEPA Letter "fype
. OJP - Ongoing NEPA Compliance Incorporated Into Further Developmental Stages NEPA Letter
Incorporates NEPA compllance In Further D~elopmental Stages The Edward Byrne Memorial Justice Assistance Grant Prosram (JAG) allows states and local governments to support a broad range of actiVltfes to prevent and control aime and to Improve the crlmfna1Jus1.1ce system, some ofwhh:h could have envlronmental Impacts, All recipients of JAG funding must assist BJA In complying with NEPA and other related federal environmental Impact analvses requirements In the use of grant funds, whether the funds are used directly by the grantee or by a subgra ntee or thfrd party. Accordlngl¼ prlor to obUptlng funds for any of the specified activities, the grantee must first detenn(ne tf any of the specified actfVltles wlll be funded by the grant.

The specified actlVltfes requiring environmental analysis are:
a. New construction;
b. Any renovation or remodeling of a property located In an environmentally or hlstortcally sensitive area, lnclud(ng properties located within a 100-year flood plaln, a wetland, or habitat for endangered species, or a property listed on or eflglble for llstf ng on the National Register of Hlstorlc Places; c, A renovation, lease, or any proposed use of a bulldlng or faclllty that wlll either (a) result In a change In Its basic prior use or (b) slgntflcantly change Its size; d. Implementation of a new program lnvolvlng the use of chemicals other than chemlcals that are (a) purchased as an lncldental component of a funded act:Mty and (b) traditionally used, for example, In office, household, recreational, or education environments; and e. Implementation of a program relating to clandestine methamphetamlne laboratory operations, Including the Identification, seizure, or closure of clandestine methamphetamlne laboratories.

Complylng with NEPA may require the preparation of an Environmental Assessment and/or an Environmental Impact Statement, as directed bv BJA. Further, for programs relating to methamphetamlne laboratorv operations, the preparation of a detailed Mitigation Plan wlll be required. For more lnfonnatlon about Mitigation Plan requirements, please see hnps;//www.bla.goy/fundJntclneRIJmnl,
Please be sure to carefully review the grant conditions on your award document, as It may contain NEPA Coordinator
First Name
Orbin
• • Award Information
. . . .

MlddleName
,,
Last Name
Teny
This award Is offered subject to the conditions or llmltatlons set forth In the Award lnfonnatl~n, Project Information, Flnanclal Information, and Award Condit.tons. .&Recipient Information
Recipient Name

ORANGE, COUNTY OF
DUNS Number
111950874
Street 1 Street2

ii
10 f:IVIC: r!FNTFR Pl 7 STF 107
City

SANTAANA
ZJp/Postal Code
• 92701
County/Parish
State/U.S. Territory
Callfomla
Country
United States
Province
___ .......... -............. ~--------
AAward Detalls
Federal Award Date
10/8/21
Award Number
15PBJA-21--GG-01188-JAGX
Federal Award Amount
$427,301.00
Award Type
lnltlal
Supplement Number
00 Funding Instrument Type
Grant
Assistance Listing Number Assistance Listings Program Title

16.738

F QR T F I II
Statutory Authority
TIiie I of Pub. L. No. 90-361 (generally codified at34 u.s.c.10151 .. 10726), lncludlng subpart 1 of part E (codified at34 U.S.C.10151-10168}i see also 28 U.S.C. 630C(a).

I have read and understand the Information presented In 'lhls section of the Federal Award lnstrumee,t.

•• Project Information
This award Is offered subject to th~ condHlons or llmltatlons set forth In the Award Information, Project lrifonnatlon, Flnanclal Information, and Award Conditions.

Sollcltatlon Tltle Awarding Agency
2021 BJA FY 21 Edward Byrne Memorlal OJP
Justice Assistance Grant (JAG) Program • Program Office Local Sollcltatlon BJA
Application Number
GRANT13429778
Grant Manager Name Phone Number
202-598 .. 7139
Elaine Smokes
E-maD Address
[email protected]
Project Title
County of Orange Sherlff...Coroner - BJA FY 2021 Edward Byrne Memorial Justice Assistance Grant Program - Local Sollcltatlon
Perfonnance Period
Start Date
.10/01/2020
Budget Period Start
Date
10/01/2020
Project Description
Performance Period End
Date •
09/30/2024
Budget Period End Date
09/30/2024
The Edward Byrne Memorlal Justice Assistance Grant (JAG) Program allows s1ates and units of local govemment, Including tribes, to support a broad range of activities to prevent and control crime based on their own state and local needs and conditions.

Grant funds can be used for state and local Initiatives, technical assistance, training, personnel, equipment, supplies, contraotual support, and Information systems for criminal Justice, Including for any one or more of the following program areas: 1} law

Ii!
enfor~ment programs; 2) prosecution and court programs: 3) prevention and education programs; 4) corrections and community corrections programs; 5) drug treatment and enforcement programs; 6) planning, evaluation. and technology Improvement programs: and 7) crime vlcUm and witness programs (other than compensation) and 8) mental health programs and related law enforcement and corrections programs, Including behavioral programs and crisis lnteaventlon teams.

This JAG award wm be used to support crlmlnal Justice Initiatives that fall under one or more of the allowable program areas above. Funded programs or Initiatives may Include multljurlsdlotlonal drug and gang task forces, crime prevention and domestic vfolence programs, courts, corrections, treabnent, Justice Information sharing lnttlatlves, or other programs aimed at reducing crime and/or enhancing publlc/offlcer safety.

I have raad and understand the Information p,esented In this section of the Federal Award Instrument.
•· Flnanclal Information
This award Is offered subject to the conditions or flmltatlona set forth In the Award Information, Project Information, Flnanclal Information, and Award Conditions.

I have read and understand the /nfonnatlon presented In this section of the Federal Award Instrument.
• • Award Conditions
This award Is offered subject to the conditions orllmltatlons set forth In the Award

lnfonnatJon, Project Information, Flnanclal Information, and Award Conditions. ~1
Applloablllty of Part 200 Uniform Requirements
The Uniform Administrative Requirements, Cost Prlnclples, and Audit Requirements In 2 C .. F.R. Part 200, as adopted and supplemented by DOJ In 2 C.F.R, Part 2800 (together, the "Part 200 Uniform Requirements") apply to this FY 2021 award from OJP.

The Part 200 Uniform Requirements were first adopted by DOJ on December 26, 2014. If this FY 2021 award supplements funds previously awarded by. OJP under the same award number (e.g., funds awarded during or before December 2014). the Part 200 Uniform Requirements apply with respect to all funds under that award number (regardless of the award date, and regardless of whether derlvedlrom the lnlUal award or a supplemental award) that are obligated on or after the aooeptanoe date of this FY 2021 award.

For more lnformaUon and resources on the Part 200 Unifonn Requirements as they relate to OJP awards and subawards ("subgrants"). see the OJP website at https://ojp.gov/funding/Part200UnlformRequlrements.htm.

Record retention and access: Records pertinent to the award that the recipient (end any subreclplent ("subgrantee
11 ) at any tier) must retain - typlcaDy for a period of 3 years from the date of submission of the final expenditure report (SF 425). unless a different retention period applies - and to which the recipient (and any subreclplent ("subgrantee") at any tier) must provide access, Include performance measurement Information, in addition to the financial . records, supporting documents, statistical records, and other pertinent records Indicated at 2 C.F.R 200.333.

In the event that an award-related quesflon arises from documents or other materials prepared or distributed by OJP that may appear to conflicf with, or differ In some way from, the provisions of the Part 200 Unlfonn Requirements, the recipient Is to coptact OJP promptly for darfftcatton.
~
Requirement to report actual or imminent breach of personally ldentlflable Information (PH) The recipient (and any •subrecipient" at any lier) must have written procedures In place to respond In the event of an actual or Imminent "breach
0 (0MB M-17-12) If It (or a subreclpfent)­
.. (1) creates, collects, uses, processes, stores, maintains, disseminates, discloses, or disposes of "Personally Identifiable lnfonnatlon (PH)" (2 CFR 200.1) within the scope of an OJP grant­ funded program or activity, or (2) uses or operates a "Federal Information system" '(OMB Circular A-130). The recipient's breach procedures must include a requirement to report actual or imminent breach of PII to an OJP Program Manager no later than 24 hours after an occurrence of an actual breach, or the detection of an Imminent breach. 'isl3
Required training for Grant Award Administrator and Flnanclal Manager The Grant Award Administrator and all Financial Managers for this award must have successfully completed an "OJP flnanclal management and grant administration training" by

120 days after the date of the reclplenfs acceptance of the award. Successful comple11on of such a training on or after January 1, 2019, will satisfy this condition.

In the event that etther the Grant Award Administrator or a Flnanolal Manager for this award changes during the period of performance, the· new Grant Award Administrator or Flnanolal Manager must have successft:illy completed an
11 OJP flnanclal management and grant
administration training" by 120 calendar days after the date the Entity Admlnlstrator enters updated Grant Awa.rd Administrator or Ffnanolal Manager information In JustGrants.

Successful oompletlon of such a training on or after January 1, 2019, wlll satisfy this condition.

A 11st of OJP trainings that OJP wlll consider "OJP finanolal management and grant administration training" for purposes of this condition Is available at https://www.oJp.gov/tralnlng/fmts.htm. All trainings that saUsfy this condition Include a session. on grant fraud prevention and detection.

The recipient should anticipate that OJP wHI Immediately withhold ("freeze") award funds If the recipient falls to comply with this condition. The recipient's fallure to comply also may lead OJP to Impose additional appropriate conditions on this award. 'isl4
Safe policing and Jaw enforcement subreclplents.

If this award is a discretionary award, the recipient agrees that It wtll not make any subawards to State, local, college, or university law enforcement agencies unless such agencies have been certified by an approved independent oredentialfng body or have started the certmcation process. To become certified, law enforcement agencies must meet two mandatory conditions:
(1) the agency's use of force pollcles adhere to all applicable f~eral, state. and local laws; and (2) the agency's use of force policies prohibit chokeholds except In situations where use of deadly force Is allowed by law. For detailed information on this certification requirement, see https://cops.usdoJ.gov/SafePoliclngEO.
~
Effect of faUure to address audit Issues
The reoipJent understands and agrees that the DOJ awarding agency (OJP or OVW, as appropriate) may withhold award funds, or may Impose other related requirements. If {as determined by the DOJ awarding agency) the recipient does not satisfactorily and promptly address outstanding Issues from audits required by the Part 200 Unlfonn Requirements (or by the terms of this award}, or other outstanding issues that arise In connection with audits, Investigations, or reviews of DOJ awards.
tel& •
Requirements of the award; remedies for non--compliance or for materially false statements The conditions of this award are material requirements of the award. Compliance with any assurances or certifications submitted by or on behalf of the recipient that relate to conduct during the period of perfonnanoe also Is a materlal requirement of this award.

Limited Exceptions. In certain special circumstances, the U.S. Department of Justice C'DOJ") may detennlne that It wlll not enforce, or enforce only In part, one or more requirements otherwise applfcable to the award. Any such exceptions regarding enforoement, Including any

such exceptions made during the period of perfonnanca, are (or wlll be during the period of performance) set out through the .Office of Justice Programs ("OJP 11 ) webpaga entitled "Legal
Notices: Special circumstances as to particular award conditions" (ojp.gov/fundlng/Explore/LegalNotlces-AwardReqts.htm), and incorporated by reference Into the award.

By sfgnlng and aooeptlng this award on behalf of the recipient, the authorized recipient official accepts all material requirements of the award, and speclfl~lly adopts, as If personally executed by the authorized recipient offlolal, all assurances or oertlflcatlons submitted by or on behalf of the recipient that relate to conduct during the period of performance.

Fallure to COl'.l"IPIY with one or more award requirements - whether a condition set out In full below, a condition Incorporated by reference below, or an assurance or certJflcatlon related to conduct during tf1e award period - may result In OJP taking appropriate action with respect to 1he recipient and the award. Among other things, the. OJP may withhold award funds, disallow costs, or suspend .or terminate the award. DOJ, lncludlng OJP, also may take other legal action as appropriate.

Any materially false, fictitious, or fraudulent statement to the federal government related to this award (or concealment or omission of a material fact) may be the subject of crlrnlnal prosecution (lncludlng under 18 U.S.C. 1001 and/or 1621, and/or 34 U.S.C. 10271-10273), and also may lead to Imposition of civil penalties and administrative remedies for false clalms or otherwise (lnoludlng under 31 U.S.C. 3729«3730 and 3801 .. 3812).

Shourd any provision of a requirement of this award be held to be lnvalld or unenforceable by Its terms, that provision shall first be applied with a limited construction so as to give It the maximum effect permitted by law. Should It be held, Instead, tha1 the provision Is utterly Invalid or -unenforceable, such provision shall be deemed severable from this award. ~7
Compffance with DOJ regulations pertaining to cMI rights and nondiscrimination - 28 C.F.R.

Part 38
The recipient, and any subrecipfent c•subgrantee") at any tier, must comply with all applicable requirements of 28 C.F.R. Part 38 (as may be applicable from time to time), speolflcally Including any appllcable requirements regarding written notice to program beneficiaries and prospective program beneficiaries. =
Currently, among other things, 28 C.F.R. Part 38 Includes rules that prohibit specific forms of discrimination on the basis of reflglon, a rellglous bellaf, a refusal to hold a religfous belief, or refusal to attend or participate In a religlous practice. Part 38. currently. also sets out rules and requirements that pertain to recipient and subrectpient ("subgrantee 11 ) organizations that
engage In or conduct expllcltly rellglous activities, as well as rules and requirements that pertain to recipients and subreclpfents that are falth--based or relfgfous organlzaUons.

The text of 28 C.F.R. Part 38 Is available via the Electronic Code of Federal Regulations (currently accessible at https://www.ecfr.gov/cgHlln/ECFR?page=browse), by browsing to Title 28-Judlcial Administration, Chapter 1, Part 38, under e-~FR "current" data. ffla
Compliance with DOJ regulations pertaining to civil rights and nondiscrimination - 28 C.F.R.

Part42

The recipient, and any subreciplent (1'subgrantee
11 ) at any tier, must comply with all app11cable
requirements of 28 C.ER. Part 42, spaolficaHy Including any appllcable requirements In Subpart E of 28 C.F.R. Part 42 that relate to an equal employment opportunity program. ~9
Compliance with DOJ regulatlons pertalnh1g to civil rights and nondiscrimination .. 28 C.F.R.

Part64
The recipJent, and any subreclplent (nsubgrantee
11 ) at any tier, must comply with all appDcable
requirements of 28 C.F.R. Part 54, which relates to nondiscrimination on the basis of sex In certain .. education programs. n
~10
Compllance with 41 U.S.C. 4712 ~ncfudlng prohlblflons on reprisal; notice to employees) The recipient (and any subreclplent at any tier) must comply with, and Is subject to, all applicable provisions of 41 U.S.C. 4712, Including all applicable provisions that prohibit. under • specified circumstances, discrimination against an employee as reprisal for the employee's disclosure of lnfonnatlon related to gross mismanagement of a federal grant. a gross waste of federal funds, an abuse of authority relating to a federal grant, a substantial and specific danger to public health or safety, or a vlolatlon of law, rule, or regulation related to a federal grant.

The recipient also must Inform Its employees, In writing (and In the predominant native language of the workforce), of employee rights and remedies under 41 U.S.C. 4712.

Should a question arise as to the appllcablDty of the provisions of 41 U.S.C. 4712 to this ,ward, the recipient Is to contact the DOJ awarding agency (OJP or OVW, as appropriate) for guidance.
~11
CompJlance with applicable rules regarding approval, planning, and reporting of. conferences, meetings, trainings, and other events
The recipient and any subreclplent rsubgrantee") at any tier, must comply with all applicable laws, regulations, polloles, end offlolal DOJ guidance 0ncludlng specific cost limits, prior approval and reporUng requirements, where applicable) governing the use of federal. funds for expenses related to conferences (as that term Is defined by DOJ), Including the provision of food and/or beverages at such conferences, and costs of attendance at such conferences. lnfonnatlon on the pertinent DOJ definition of conferences and the rules appllcabJe to this award appears In the DOJ Grants Financlal Gulde (currently, as section 3.10 of "Postaward Requirements" In the "POJ Grants Flnanclal Gulde").
~12
Requirement for data on perfonnance and effectiveness under the award Toa recipient mtJst collect and maintain data that measure the performance and effectiveness of work under this award. The data must be provided to OJP In the manner {includlng within

the tlmeframes) specified by OJP In the program solicttation or other applicable written guidance. Data colleoUon supports compliance with the Government Performance and Results Act (GPRA) and the GPRA Modemfzatlon Act of 2010, and other appllcable laws. ~3
Requirements related to nde mlnlmls" Indirect cost rate A recipient that Is ellglble under the Part 200 Unlfonn Regulrements and other applicable law to use the
11 de mlnlmfs" Indirect cost rate described In 2 C.F.R. 200.414(f), and thateleots to use the "de mlnimls" indirect oost rate. must advise OJP In writing of both Its eHglbHity and Its eleotlon, and must comply with all associated requirements In the Part 200 Uniform Requfrements. The "de mlrilmls" rate may be applied only to modified total direct costs (MTDC) as defined by the Part 200 Uniform Requirements. 'i5114
Determination of suitability to interact with participating minors SCOPE. This condition applies to this award If It Is Indicated -In the application forthe award (as approved by DOJ)(or In the applfcatlon for any subaward, at any tier), the DOJ funding announcement (solloltatlon), or an associated federal statute - that a purpose of some or all of the activities to be carried out under the award (whether by the reolplent, or a subreclplent at any tier) ts to benefit a set of Individuals under 18 years of age.

The recipient, and any subreclplent at any tier, must make determinations of suitability before certain lndlvfduals may Interact with participating minors. This requirement applies regardless of an lndlvldual's employment status.
' The details of this requirement are posted on the OJP web site at https:/JoJp.gov/funding/Explore/fnteraot-Mlnors.htm (Award condition: Detennlnatlon of suttablllty required, In advance, for certain Individuals who may interact vvith participating minors), and are Incorporated by reference here.
'§15
Requirement to disclose whether recipient Is designated "high risk• by a federal grant-:maklng agency outsJde of DOJ
If the recipient Is designated "high rlsk
11 by a federal grant-making agency outside of DOJ1
currently or at any time during the course of the period of performance under this award, the recipient must disclose that fact and certain related Information to OJP by email at [email protected]. For purposes of this disclosure, high risk Includes any status under which a federal awarding agency provides addltlonal oversight due to the reciplenrs past performance, or other programmatic or financial concerns with the recipient.

The reclplenrs disclosure must Include the following: 1. The federal awarding agency that currently designates the recipient high risk. 2. The date the recipient was designated high risk,

3. The hJgh--nsk point of contact at that federal awarding agency (name, phone number, and emall address), and 4. The reasons for the high-risk statlls, as set out by the federal awarding agency.
'5116
Compliance with DOJ Grants Financial Gulde

References to the DOJ Grants Flnanolal Gulde are to the DOJ Grants Flnanclal Gulde as posted on the OJP website (currently, the
11 DOJ Grants Flnanolal Gulde" available at
https://oJp.gov/flnanclalgulde/DOJ/lndex.htm), Including any updated version that may "8 posted during the period of perfonnanoe. The recipient agrees to comply with the DOJ Grants Financial Gulde.
~7
Encouragement of pollcles to ban text messaging while driving Pursuant to Executive Order 13518, "Federal Leadership on Reducing Text Messaging Whlle Driving/' 74 Fed. Reg. 51225 (October 1, 2009), DOJ encourages reclplents and subreclptents ("subgrantees") to a~opt and enforce pollcles banning employees from text messaging whlle driving any vehicle during the course of performing work funded by this award, and to estabflsh workplace safety poUoles and conduct education. awareness, and other outreach to decrease crashes caused by distracted drivers.
~18
Compliance with general appropriations-law resbictlons on the use of federal funds (FY 2021) The recipient, and any subreolplent ("subgrantee
11 ) at any tier, must comply with all applicable
restrictions on the use of federal funds set out In federal appropriations statutes. Pertinent restrictions. lnoludlng from various •general provisions• In the Consolidated Appropriations Aot, 2021, ere se( out at https://oJp.gov/funding/Explore/FY21ApproprlationsResbictlons.htm, and are Incorporated by reference here.

Should a question arise as to whether a particular use of federal funds by a recipient (or a subreclplent) wourd or might fall within the scope of an appropriations-law restriction, the recipient is to contact OJP for guidance, and may not proceed without the express prior written approval of OJP. .
~19
Potential Imposition of addltlonal requirements
The recipient agrees to comply with any additional requirements that may be imposed by the DOJ awarding agency (OJP or OVW, as appropriate} during the period of performance for this award, If the recipient Is designated as •hfgh .. rfsk" for purposes of the DOJ high-risk grantee ~ •
~o
Employment ellglblnty verification for hiring under the award

1. The recipient (and any subreclplent at any tier} must- A. Ensure that, as part of the hiring process for any position within the United States that Is or . wm be funded Qn whole or In part) with award funds, the recipient (or any subreclpient) properly verifies the employment eUgibl(lty of the lndlvlclual who Is being hired, consistent with the provisions of 8 U.S.C. 1324a(a)(1).

B. Notify all persons assocJated with the recipient (or any subreclplent) who are or wJII be

Involved In activities under thls·award of both-
(1} this award requirement for verification of emploY":'ant ellglblllty, and (2) the associated provisions In 8 U.S.C. 1324a(a){1) that, generally speaking, make It unlawful, in the-United States, to hire (or recruit for employment) certain aliens.

C. Provide training (to the extent necessary) to those persons required by this condition to be notified of 1he award requirement for employment ellglblllty verification and of the associated provisions of 8 U.S.C.1324a(a)(1). •
D. As part of the recordkeeping for the award (Including pursuant to the Part 200 Uniform Requirements), maintain records of all employment e(lglbHlty verifications pertinent to compliance with this award condition In accordance with Form 1..e record retention requirements, as well as records of all pertinent notifications and trainings.

2. Monitoring
The recipient's monitoring responslbllltles Include monitoring of subreclplent compliance with this condition.

3. Allowable costs .

To the extent that such costs are not reimbursed under any other federal program, award funds may be obligated for the reasonable, necessary, and allocable costs (If any) of actions designed to ensure compliance with this condHlon.

4. Rules of construction
A. Staff Involved In the hiring process
For pu1poses of this condition, persons '\vho are or wlll be Involved In activities under this award" specifically Includes (w]thout llmltatlon) any and all recipient (or any subreclplent) officials or other staff who are or will be Involved In the hiring process with respect to a position that Is or wlll be funded (In whole or In part) with award funds.

B. Employment elfglblfity conflnnation with E-Verffy
For purposes of satisfying the requirement of this condition regarding verification of employment ellglblllty, the recipient (or any subreclplent) may choose to participate In, and use, e .. verlfy (www.e-verlfy.gov), provided an appropriate person authorized to act on behalf of the recipient (or subreclplent) uses E-Verlfy (and follows the proper E-Verify procedures, includfng In the event of a •Tentative Nonconfinnation• or a aFfnal Nonoonffnnatlon") to conflnn employment eligibflity for each hiring for a position in the United States that is or will be furided On wh~le or In part)_ with award funds.

C. "United States" speclflcally Includes the District of Columbla, Puerto Rico, Guam, the Virgin Islands of the Untted States, and the Commonwealth of the Northern Mariana Islands.

D. Nothing In this condition shall be understood to authorize or require any recipient, any subreclpfent at any tier, or any person or other entity, to vlolate any federal law, Including any appUcable civil rights or nondiscrimination law.

E. Nothing In this condition, Including In paragraph 4.B., shall be understood to relieve any

recipient, any subreolpfent at any tier, or any person or other entity, of any obllgatlon otherwise Imposed by Jaw, lncludfng 8 U.S.C. 1324a(a)(1),
Questions about e .. verlfy should be directed to DHS. For more Information about E-Verlfy visit the E•Verlfy website (https://www.e .. ver1fy.gov/) or email e .. verlfy at e .. [email protected]. E .. Verlfy employer agents oan emall E-Verlfy at e .. [email protected].

Questions about the meaning or scope of this condition should be directed to OJP, before award acceptance.
'el21
Restrictions and certifications regarding non .. disclosure agreements and related matters No recipient or subreolplent ("subgrantee") under this award, or entity th~t receives a procurement contract or subcontract with any funds under this award, may require any employee or contractor to sign an lntemal confidentiality agreement or statement that prohibits or otherwise restricts, or purports to prohibit or restrict, the reporting (In accordance with law) of waste, fraud, or abuse to an Investigative or law enforcement representative of a federal deparbnent or agency authorized to receive such lnformaUon.

The foregorng 1s not Intended, and shall not be understood by the agency making this award, to contravene requirements applicable to Standard Fonn 312 (which relates to classlfled . lnfonnatlon), Form ~14 (which relates to sensitive compartmented lnfonnatlon), or any other form Issued by a federal deparbnent or agency govemlrig the nondisclosure of classlfled lnfonnatlon.

1. In accepting this award, the recipient-
a. represents that It neither requires nor has required rntemal confidentiality agreements or statements from employees or contractors that currently prohibit or otherwise currenUy restrict (or purport to prohibit or restrict) employees or contractors from reporting waste, fraud. or abuse as desorlbed above; and
b. certifies that, if it learns or Is notified that it is or has been requiring Its employees or contractors to execute agreements or statements that prohibit or otherwise restrict (or purport to prohibit or restrict), reporting of waste, fraud, or abuse as described above, It will Immediately stop any further obllgatlons of award funds, wlll provide prompt written notification to the federal agency making this award, and wlU resume (or perrntt resumption of) such obligations only If expressly authorized to do so by that agency.

2. If the recipient does or Is authorized under this award to make subawards ("subgrants"), procurement contracts. or both-
a. It represents that-
(1) It has determined that no other entity that th~ recipient's applf catfon proposes may or will receive award funds (whether through a subaward ("subgrant"), procurement contract, or subcontract under a procurement contract) either requires or has required internal oonfldentfallty agreements or statements from employees or contractors that currenUy prohibit or otherwise currently restrict (or purport to prohibit or restrfot) employees or contractors from reporting waste, fraud, or abuse as described above; and (2) Jt has made appropriate Inquiry, or otherwise has an adequate factual basis, to support this

representation; and
b. It certifies that. If It leams or Is notified that any subreclplent, contractor, or subcontractor· entity that receives funds under this .award is or has been requiring ~ employees or contractors to execute agreements or statements that prohibit or otherwise restrict (or purport to prohibit or restrict), reporting of waste, fraud, or abuse as described above, It will lmmedlately·stop any further obllgatlons of award funds ~o or by that entity. will provide prompt written notification to the federal agency making this award, and wlll resume (or permlt resumption of) such obligations only If expressly authorized to do so by that agency. \sb2
Redasslfloatfon of various statutory provisions to a new Title 34 of the United States Code On September 1, 2017, various statutory provisions previously codified elsewhere In the U.S.

Coda ware edltorlally reclassffled (that Is, moved and renumbered) to a new Title 34, entitled "Crime Control and Law Enforcement. a The reclasslfloatlon encompassed a number of statutory provisions pertinent to OJP awards (that Is, OJP grants and oooperatlve agreements), Including many provisions previously codified In 11tle 42 of the U.S. Code.

Effective as of September 1, 20171 any reference In this award document to a statutory provision that has been reclassified to the new Title 34 of the U.S. Code Is to be read as a reference to that sta(utory provision as reolasslfled to Title 34. This rule of construction speolftoally Includes references set out In award conditions, references set out In material incorporated by reference 1hrough award conditions, and references set out In other award requirements.
\sb3
OJP Training Guiding Principles
Any training or training materials that the recipient - or any subreclplent f 1 subgrantee
11 ) at any
tier - develops or delivers with OJP award funds must adhere to the OJP Training Guiding Principles for Grantees and Subgrantees, available at
https:/lojp.gov/fundf ng/lmplementrrralnlngPrfnclplesForGrantees-Subgrantees.htm. \sb4.

All subawards ("subgrants") must have specific federal au1horization The recipient, and any subreclplent ("subgrantee") at any tier. must comply with all applicable requirements for authorization of any subaward. This condlUon applles to agreements that - for purposes of federal grants administrative requirements ... OJP considers a 11 subaward" (and
therefore does not consider a procurement "contract").

The details of the requirement for authorization of any subaward are posted on the OJP web site at https:1/ojp.gov/fundlng/Explore/SubawardAuthorization.htm (Award condition: AH subawards ("subgrants") must have specific federal authorization), and are Incorporated by reference here.
'el25
Requirements related to System for Award Management and Universal Identifier Requirements

The recipient must comply with applicable requirements regarding the System for Award Management (SAM), currently accessible at https:/Jvvww.sam.gov/. This Includes applicable requirements regarding registration with SAM, as well as maintaining the currency of Information In SAM. •
The recipient also must comply with applicable restrictions on subawards f'subgrants") to first .. tier subreclplents (flrst .. tler "subgrantees"), Including restrictions on subawards to entities that do not acquire and provide (to the recipient) the unique entity Identifier required for SAM registration.

The detalJs of the recipient's obligations related to SAM and to unique entity Identifiers are posted on the OJP web site at https://ojp.gov/fundlng/Explore/SAM.htm (Award condition:

System for Award Management (SAM) and Unfversal ldenfifier Requirements), and are Incorporated by reference here. • •
This condition does not apply to an award to an lndlvlduaJ who received the award as a natural person (I.e., unrelated to any business or non-profit organization that he or she may own or operate In his or her name) .
• 1el2a
Restrictions on •1obbylng•
In general, as a matter of federal law, federal funds awarded by OJP may not be used by the reclplant1• or any subreclplent f'subgrantee") at any tier, either directly or lndfrecUy, to support or oppose the enactment, repeal, modification, or adoption of any law. regulation, or policy, at any level of govemment. See 18 U.S,C. 1913. (There may be exceptions If an applicable federal statute specifically authorizes certain activities that otherwise would be barred by law.) An-other federal law generally prohibits federal funds awarded by OJP from being used by the recipient or any subreclpient at any tier, to pay any person to Influence (or attempt to Influence) a federal agency, a Member of Congress, or Congress (or an offlolal or employee of any of them) with respect to the awarding of a federal grant or cooperative agreement, subgrant, contract, subcontract, or loan, or with respect to acHons such as renewing, extending, or modifying any such award. See 31 U,S.C. 1362. Certain excepUons to this law apply, Including an exception that applies to Indian tribes and tribal organizations.

Should any question arise as to whether.a particular use offederal funds by a recipient (or subrecfpient) would or might faU within the scope of these prohibitions, the recipient is to contact OJP for guidance, and may not proceed without the express prior written approval of OJP. •
~7
Specific post-award approval required to use a noncompetitive approach tn any procurement contract that would exceed $250,000
The recipient. and any subreclpleht ("subgrantee") at any tier, must comply with all eppllcable requirements to obtain specific advance approval to use a noncompetitive approach in any procurement contract that would exceed the SimpHfled Acquisition Threshold (cu1Tently, $250,000). This condition applies to agreements that ..... for purposes of federal grants administrative requirements - OJP considers a procurement 11 contract
11 (end therefore does
not consider a subaward).

The details of the requirement for advance approval to use a noncompetitive approach In a procurement contract under an OJP award are posted on the OJP web site at https://ojp.gov/fundln_g/~lore/NoncompetltlveProourement.htm (Award CQndltton: Specific post .. award approval required to use a noncompetfflve approach In a procurement contract (If contract would exceed $250,000)), and are incorporated by reference here. ~8
Requirements pertaining to prohibited conduct related to trafficking In persons (Including reporting requirements and OJP authority to terminate award) The recipient, and any subreolplent (•subgrantee") at any tier, must comply with ell applloable requirements (Including requirements to report allegations) pertaining to prohibited conduct related to the traffaoking of persons, whether on the part of recipients, subreclplents ("subgrantees"), or Individuals defined (for purposes of this condition) as "employees11 of the recipient or of any subreclplent
The details of the recipient's obligations related to prohibited conduct related to trafficking In persons are posted on the OJP web site at https://oJp.gov/funding/ExpJore/ProhlbltedConduct­ Traffloklng.htm (Award condition: Prohibited conduct by recipients and subrec1plents related to trafficking In persons (lncludfng reporting requirements and OJP authority to terminate award)), and ere Incorporated by reference here.
'ffl29
Requirement to-report potentially dupJJoative funding
If the recipient ouJTenfly has other active awards of federal funds, or If the recipient receives any other award of federal funds during the period of performance for this award, the recipient promptly cnust determine whether funds from any of those other federal awards have been, are being, or are to be used (in whole or In part) for one or more of the Identical cost Items for whJch funds are provided under this award. If so, the recipient must prompUy notify the DOJ awarding agency (OJP or OVW, as appropriate) In writing of the potential dupllcatlon, and, If so requested by the DOJ awarding agency, must seek a budget--modlficatlon or chenge--of .. project-scope Grant Award Modification (GAM) to elfmlnate any Inappropriate dupllcatlon of funding.
. .

ReporHng potential fraud, waste, and abuse, and similar misconduct The recipient, and any subrecipients (•subgrantees°) at any tier, must promptly refer to the DOJ Office of the Inspector General (OIG) any credible evidence that a principal, employee, agent, subreclplent, contractor, subcontractor, or other person has, In connection with funds under this award- (1) submftt_ed a claim that violates the False Claims Act: or (2) committed a crimlnal or oivll vlolaUon of laws pertaining to fraud, conflict of fnterest1 bribery. gratuity, or slmllar misconduct. •
Potential fraud, waste, abuse1 or misconduct Involving or relating to funds under this award should be reported to the OIG by-(1) onllne submission accesslble via the OIG webpage at https://olgJustloe_gov/hotline/contact-grants.htm (select •submit Report Online•); (2) mail directed to: U.S. Deparbnent of Justice, Office of the Inspector General, Investigations Division, ATTN: Grantee Reporting, 950 Pennsylvania Ave., NW, Washington, DC 20530;

and/or (3) by facsimile directed to the DPJ OIG Investigations Division (Attn: Grantee Reporting) at (202) 616 .. 9881 (fax).

Additional Information Is available from the DOJ OIG website at https://olg.Justlce.gov/hotllne. ~1
FFATA reporting: Subawards and executive compensation
The recipient must comply with appllcable requirements to report first .. tier subawards ("subgrants•) of $30,000 or more and, In certain circumstances, to report the· names and total compensation of the five most highly compensated executives of the recipient and first-tier subreclplents (flrst .. tJer "subgranteesn) of award funds. The details of recipient obligations, which derive from the Federal Fundlng.Accountablllty and Transparency Act of 2006 (FFATA), are posted on the OJP web site at https://ojp.gov/fundlng/Explore/FFATA.htm (Award • condition: Reporting Subawards and Executive Compensation). and are Incorporated by reference here.

This condHlon, Including Its reporting requirement, does not apply to- (1) an award of less than $30,000, or (2} an aw~rd made to an Individual who received the award as a natural person (I.e., unrelated to any business or non .. proflt organization that he or she may own or operate In his or her name).
~2
Cooperating with OJP Monitoring
The recipient agrees to cooperate with OJP monitoring of this award ·pursuant to OJP's guldellnes, protocols, and procedures. and to cooperate with OJP (including the grant manager for this award and the Office of Chief Ffnancial Officer (OCFO)) requests related to such monitoring, Including requests related to desk reviews and/or site visits. The recipient agrees to provide to OJ.p all documentation necessary for OJP to complete (ts monitoring tasks, Including documentation related to any subawards made under this award. Further, the recipient agrees to abide by reasonable deadlfnes set by OJP for providing the requested documents. Failure to cooperate with OJP's monitoring activities may resutt in actions that affect the recipient's DOJ awards, including, but not limited to: withholdings and/or other restrictions on the recipient's access to award funds; referral to the DOJ OIG for audit review; designation of the reclpJent as a DOJ High Risk grantee; or termination of an award(s). '833
Required monitoring of subawards
ll1e recipient must monitor subawards under this award In accordance with all applicable statutes, regulations, award conditions, and the DOJ Grants Financial Gulde, and must Include the applicable conditions of this award In any subaward. Among other things, the recipient Is responsible for oversight of subreclplent spending and monitoring of specific outcomes and benefits albibutable to use of award funds by subreclplents. The recipient agrees to submit, upon request. documentation of Its policies and procedures for monitoring of subawards under this award.
'is34
Use of program Income

Program Income (as defined In the Part 200 Uniform Requirements) must be used In accordance with the provisions of the Part 200 Uniform Requirements. Program Income earnings and expenditures both must be reported on the quarterly Federal Fina~clal Report, SF425.
~35
Justice lnfonnatfon Sharing
Information sharJng projects funded under this award must comply with DOJ 1 s Global Justice
lnfonnatlon Sharing Initiative (Global) guldellnes. The recipient (and any subreclplent at any Uer) must confonn to the Global Standards Package (GSP) and all constituent elements, where appHcable, as described at: https:/ / lt.ojp.gov/ gsp_grantcondltlon. The recipient (and any subraclplent at any tier) must document planned approaches to Information sharing and describe compliance with the GSP and appropriate privacy policy that protects shared Information, or provide detatled Justification for why an alternative approach Is recommended. ~36
Avoidance of dapllcaflon of networks
To avoid duplicating existing networks or IT systems In any Initiatives funded by BJA for law enforcement lnformaUon sharing systems which involve Interstate connectivity between Jurisdictions, such systems shall employ, to the extent possible, existing networks as the communication backbone to achieve Interstate connectivity, unless the recipient can demonstrate to the satisfaction of BJA that this requirement would not be cost effective or would Impair the functionality of an existing or proposed IT system. ~7
Compllanoe with 28 C.F.R. Part 23
With respect to any lnformatron technology system funded or supported by furads under this award, tbe recipient (and any subreclplent at any tier) must comply with 28 C.F.R. Part 23, Crlmlnal lntelllgenca Systems Operating Polldes, If OJP determines this regulation to be applicable. Should OJP determine 28 C.F.R. Part 23 to be applicable, OJP may, at its dlsoretlon, perform audits of the system. as per the regulatfon. Should any violation of 28 C.F.R. Part 23 occur, the recipient may be fined as per 34 U.S.C. 10231(c)-(d). The recipient may not saUsfy such a fine with federal funds.
~8
Protection of human research subjects
The recipient {and any subreclplent at any tler) must comply with the requirements of 28 C.F.R.

Part 46 and all OJP policies and procedures regarding the protection of human research subjects, fncltidlng obtainment of Institutional Review Board approval, tf appropriate, and subject Informed con~enl
'el39
Confidentiality of data

The recipient (and any ~ubreclplent at any tier} must comply with all confidentiality requirements of ~4 u.s.c. 10231 and 28 C.F.R. Part 22 that are applicable to colleotton, use, and revelation of data or Information. The recipient further agrees, as a condition of award approval, to submit a Privacy Certfflcate that Js In accord with requirements of 28 C.F.R. Part 22 and, in particular, 28 C.F.R. 22.23.
'el4o
Law enforcement task forces - required training
Within 120 days of award acceptance, each current member of a law enforcement task force funded with award funds who Is a task force commander, agency executive, task force officer, or other task force member of equivalent rank, must complete required online 0ntemet-based) task force training. Addltlonally, all future task foroe members must complete this training once during the period of perfonnance for this award, or once every four years tf multiple OJP awards Include this requirement •
The requfred training Is avalJable free of charge onllne through the BJA-funded Center for Task Force Integrity and Leadership (www.ctfli.org). The training addresses task force effectiveness, as well as other key Issues Including privacy and clvll Jfbertles/rfghts, task force performance measurement, personnel sef action, and task force· oversight and accountability. If award funds are used to support a task force, the recipient must compile and maintain a task force personnel roster, along with course completion certificates.

Addltfonal lnfonnatlon regarding the training Is avaUable through BJA's web site and the Center for Task Force Integrity and Leadership (www.ctfli.org). 'el41
Justification of consultant rate
Approval of this award does not Indicate approval of any consultant rate In excess of $650 ~r day. A detalled JustlflcaUon must be submitted to and approved by the OJP program office prior to obllgation or expenditure of such funds.
ffl42
11 Methods of Admlnlstratlonn .. monitoring compliance with oivll rights laws and nonctlscrlmJnation provisions
The recipient's monitoring responsibiJHies include monitoring of subreclplent compliance with appHcable federal cMJ rights laws and nondiscrimination provisions. Within 90 days of the date of award acceptance, the recipient must submit to OJP's Office for Civil Rights (at [email protected]) written Methods of Administration f'MOA ") for subreolplent monitoring with respect to civil rights requirements. In addition, upon request by OJP (or by another authorized federal agency), the recipient must make associated documentation available for 19Vlew.

The details of the reolpient's obligations related to Methods of Administration are posted on the OJP web site at https:l/oJp.gov/funding/Explore/StateMethodsAdmln-FY2017update.hfm (Award condition: "Methods of Admlnlstratlon
11 .. Requirements applfcable to States (FY 2017
• Update)), and are Incorporated by reference here ..

~3
The recipient understands that, In accepting this award, the Authorized Representative declares and certifies, among other thlngst that he or she possesses the requisite legal authority to accept the award on-behalf of the recipient entity and, In so doing, accepts (or adopts) all material requirements that relate to conduct throughout the period of performance under this award. The recipient further understands, and agrees, that It will not assign anyone to the role of Authorized Representative during the period of perfonnance under the award without first ensuring that the lndlvldual has the requisite legal authority. ffl14
Compliance wHh National Environmental Polley Act and related statutes Upon request, the recipient {and any subreclplent at any fler) must assist BJA In complying with the National Environmental Policy Act (NEPA), the National Historic Preservation Act, and other related federal environmental Impact analyses requirements in the use of these award funds, either dJrectly by the recipient or by a subrecipient. Accordingly, the recipient agrees to flrst determf ne If any of the following activities will be funded by the grant, prior to obllgatfng funds for any of these purposes. If It Is determined that any of the following activities will be funded by the-award, the recipient agrees to contact BJA The recipient understands that this condition applles to new activities as set out below, whether or not they are being specltically funded with these award funds. That Is, as long as the activity Is being conducted by the recipient, a subreclplent, or any third party, and the activity needs to be undertaken in order to use these award funds, this condition must first ba met. The activities covered by this condition are:
a. New oonstructlon;
b. Minor renovation or remodeling of a property located in an environmentally or historically sensitive area, Including properties located within a 100-year flood plaln, a wetland, or habitat for endangered species, or a property listed on or elfglble for llsUng on the National Register of Historic Places;
c. A renovation, lease, or any proposed use of a building or facHity that wiD eHher (a) result In a change In Hs baslo prior use or (b) slgnlflcantly change Its size; d. Implementation of a new program involving the use of chemicals other than chemlcals that are (a) purchased as an incidental component of a funded activity and (b) traditionally used, for example, in office, household, recreational, or education environments; and e. Implementation of a program relating to clandestine methamphetamlne laboratory • operations, including the Identification, seizure, or closure of clandestine methamphetamine laboratories.

The recipient understands and agrees that compJylng with NEPA may require the preparation of an Environmental Assessment and/or an Environmental Impact Statement, as directed by BJA. The recipient further understands and agrees to the requirements for Implementation of a Mitigation Plan, as detailed at https:/JbJa.gov/Funding/nepa.html. for programs relating to methamphetamfne laboratory operations.

Application of This Condition to Reoipienfs Existing Programs or Activities: For any of the recipient's or its subreciplents' existing programs or activities that will be funded by these

award funds, the recipient, upon specific request from BJA, agrees to cooperate with BJA In any preparation by BJA of a national or program environmental assessment of that funded program or activity.
~5
Establishment of trust fund
If award funds are being drawn down In advance, the recipient (or a subreclplent, with respect to a subaward) Is required to establish a trust fund account. Recipients (and subreclpients) must maintain advance payments of federal awards In Interest-bearing accounts, unless regulatory exclusions apply (2 C.F.R. 200.305(b)(8)). The trust fund, Including any Interest, may not be used to pay debts or expenses Incurred by other activities beyond the scope of the Edward Byrne Memorial Justice Assistance Grant Program (JAG). The recipient also agrees to obligate the award funds In the trust fund (Including any Interest earned) during the period of performance for the award and expend within 90 days thereafter. Any unobligated or unexpended funds, fncludlng Interest earned, must be returned to OJP at the time of closeout. ~6
All State and Local JAG recipients must submit quarterly Federal Financial Reports (SF-425).

Additionally, State JAG and Local JAG Category Two ($25K or more) must submit semi-annual . performance reports through JustGrants and Local JAG Category One (Less than $25K) must submit annual performance reports through JustGrants. Consistent with the Departmenrs responsibDities under the Government Performance and Results Act (GPRA) and the GPRA Modemfzatlon Act of 2010, the recipient must provide data that measure the results of Hs work.

The recipient must submit quarterly performance metrics reports through BJA's Performance Measurement Tool (PMT) website (www.bJaperformancetools.org). For more detailed Information on reporting and other JAG requirements, refer to the JAG reporting requirements webpage. Failure to submit required JAG reports by estabUshed deadlines may result in the freezing of grant funds and tuture High Risk designation. \§17
Required data on law enforcement agency training
Any law enforcement agency receiving direct or sub-awarded funding from this JAG award must submit qi.rarterty ac.countablllty metrics data related to training that officers have received on the use of force, racial and ethnic bias, de-escalatlon of conflict, and constructive engagement with the pubHc.
~8
Expenditures prohibited without waiver
No funds under this award may be expended on the purchase of Items prohibited by the JAG program statute, unless, as set forth at 34 U.S.C. 10152, the BJA Director certifies that extraordinary and exigent circumstances exist, making such expenditures ess~tlal to the maintenance of public safety and good order,
~9
Authorization to obligate (federal) award funds to reimburse certain project costs Incurred on or after October 1, 2020

The recipient may obligate (federal) award funds only after the recipient makes a vaffd acceptance of the award. As of the first day of the period of performance for the award (October 1, 2020), however, the recipient may choose to Incur project costs using non-federal funds, but any such project costs are Incurred at the recipient's risk untll, at a minim.um-(1) the recipient makes a valld acceptance of the award, and (2) all applicable withholding conditions are removed by OJP (via an Award Condttlon Modification (ACM)). (A withholding condition Is a condition in the award document that precludes the recfplent from obllgatlng, expending, or drawing down all or a portion of the award funds until the condition Is removed.) Except to the extent (If any) that an award condition expressly precludes reimbursement of project costs incurred
0 at-rlsk," If and when the recipient makes a valld acceptance of this award and OJP removes each applicable wJthholdlng condition through an Award Condition Modification (ACM), the recipient Is authorized to obUgate (federal) award funds to reimburse Itself for project costs Incurred •at-risk" earlier during the period of performance (such as project costs Incurred prior to award acceptance or prior to removal of an applicable wlthholdJng condition), provided that those project costs otherwise are allowable costs under the award.
'8so
If award funds are used for DNA testing of evldentiary materials, any resultlng ellglble DNA profiles must be uploaded to the Combined DNA Index System (°CODIS, 11 the DNA database
operated by the FBI) by a government DNA laboratory with access to CODIS. No profiles generated under this award may be entered or uploaded rnto any non..govemmental DNA database without prior express written approval from BJA. Award funds may not be used for the purchase of DNA equipment and supplies unless the resulting DNA profiles may be accepted for entry into CODIS. Booking agencies should work with their state CODIS agency to ensure all requirements are met for participation In Rapid DNA (see National Rapid -ONA Booking Operational Procedures Manual).
~51
Submission of ellglble records relevant to the National Instant Background Check System Consonant with federal statutes that pertain to firearms and background checks- lnoludlng 18 U.S.C. 922 and 34 U.S.C. ch. 409 - If the ~clpient (or any subreciplent.at any tier) uses this award to fund (In whole or In part) a specific project or program (such as a law enforcement. prosecuUon, or court program) that results in any court dispositions, Information, or other records that are "ellglble records" (under federal or State law) relevant to the National Instant Background Check System (NICS), or that has as one of Its purposes the establishment or Improvement of records systems that contain any court dispositions, lnfonnatlon, or other records that are "eligible recordsn (under federal or State law) relevant to the NICS, the recipient (or subreclplent, If applicable) must ensure that all such court dispositions. lnfonnatlon, or other records that are "eligible records" (under federal or State law) relevant to the NICS are promptly made available to the NICS or to the "State• repository/database that Is electronla\llY available to (and accessed by) the NICS, and - when appropriate - promptly • must update, correct, modify, or remove such NI CS-relevant "eligible records".

In the event of minor and transitory non-oompliance, the recipient may submit evidence to demonstrate diligent monitoring of compliance with this condition (Including subreclplent compliance). DOJ will give great weight to any such evidence fn any express written detennlnatfon regarding this condition.

'§52
Prohibition on use of award funds for match under BVP program JAG funds may not be used as the 50% match for purposes of the DOJ Bulletproof Vest Partnership (BVP) program.
'§53
Certification of body annor "mandatory wea~' policies
If recipient uses funds under this award to purchase body armor, the recipient must submit a signed certification that law enforcement agencies receiving body armor purchased wtth funds from this award have a written "mandatory wear" pollcy In effect. The recipient mus1 keep signed certifications on file for any subrecipf ants planning to utilize funds from this award for halllstlo-reslstant and stab-resistant body armor purchases. This policy must be In place for at least all uniformed officers before any funds from this award may be used by an agency for body armor. There are no requirements regarding the nature of the policy other than it be a mandatory wear pollcy for all uniformed officers while on duty. ~
Body armor - oompllan~ with NIJ standards and other requirements Balllstfo-reststant and stab .. resistant body annor purchased with JAG award funds may be purchased at any threat level. make or model, from any distributor _or manufacturer, as long as the body annor ha~ been tested and found to comply with appllcabla National Institute of Justice balllstlc or stab standards and Is listed on the NIJ Compliant Body Armor Model List (https://n)J.gov/topics/technology/body-annorJPages/compllant...t,alllstlo-armor.aspx). In addition, balllstlc--reslstant and sfab .. reslstant body armor purchased must be made In the United States and must be unlquely fitted, as set forth In 34 U.S.C. 10202(c)(1 )(A). The latest NIJ standard Information can be found here: https:/ / nlJ.gov/ topics/ technology/ body-armor/ pages/ safety-fnltlative.aspx.
•s
Body armor .. Impact on ellglbillty for other program funds The recipient understands that the use of funds under this award for purchase of body annor may Impact ellglblllty for funding under the Bulletproof Vest Partnership (BVP) program. a separate program operated by BJA, pursuant to the BVP statute at 34 USC 10631(0)(6}. ms&
BJA-JAG .. Withhordrng of Funds for AJ?pllcation Attachment Recipient may not expend or drawdown funds until the Bureau of Justice Assistance, Office of Justf ce Programs has received and approved the required application attachment(s) and has Issued an Award Condition Modification (ACM} releasing this award condition. ~57
BJA-JAG .. Wlthholdfng of Funds for Chief Executive CertfficaHon

Wlthholdlng of funds: Required certtflcatlon from the chief executive of the applicant government
The reclplen1 may not expend or draw down any award funds until the redplent submits the required "Certifications and Assurances by the Chief ExecutlVe of the Applicant Government:
properly-executed (as determined by OJP), and an Award Condition Modification has been Issued to remove this condition.
~58
BJA- JAG "Withho(dlng of Funds for MOU
With holding of funds: Memorandum of Understanding
The recipient may not expend or draw down any award funds untfl OJP has reviewed and approved the Memorandum of Understanding (MOU), and an Award Condition Modification has been Issued to remove this condltron.
~9
BJA-JAG Withholding for NIBRS 3 Percent set-aside - DISPARATE Withholding of funds: NIBRS set-aside In Disparate Jurisdictions The recipient may not expend or draw down any award funds until the recipient submits, and BJA reviews and acoepts, documentaffon of compDance with the required NIBRS a percent set--aside by the recipient and eaoh disparate subreclplent and an Award Condition ModlffcaHon has been Issued to remove this condHlon. For each Jurisdiction, Including the recipient and disparate subreclplents, such documentation may be eHher (1) a budget that clearly documents that the Jurisdiction has dedicated at least 3 percent of the total amount of their allocation to NIBRS compliance actlvlUes, or (2) documentaUon showing that the Jurisdiction has been certified as NIBRS compliant
~80
BJA .. JAG .. Withholding of funds for budget documentation Wlthholdlng of funds: Budget narrative or Information
The reef plant may not expend or draw down any award funds untll the recipient submits, and OJP reviews and accepts, the required budget lnfonnatlon or narrative for the award, and an Award Condition Modification has bean Issued to remove this condition.

No more data to load
I have read and understand the Information presented In this section of the Federal Award Instrument.

• • Award Acceptance
Declaration and Certification to the U.S. Deparbnent of Justice as to Acceptance
By checking the declaration and certification box below, I-- A. Deolare·to the U.S. Department of Justice (DOJ), under penalty of perjury, that I have authority to make fh1s declaration and certification on behalf of the applicant.

B. Certify to DOJ, under penalty of perjury, on behalf of myself and the applicant, to the best of my knowledge and belfef, that the following are true as of the date of this award acceptance: (1) I have conducted or there was conducted (Including by applloant's legal counsel as appropriate and made avaHable to me) a dlllgent review of all tenns and conditions of, and all supporting materials submitted In connection with, this award, Including any assurances and certifications (Including anything submitted In connection therewltti by a parson on behalf of the appllcant before, after, or at the time of the appllcatlon submission and any materials that accompany this acceptance and certificatfon); and (2) I have the legal authority to accept this award on behalf of the appllcant.

C. Aooept this award on behalf of the applicant.

D. Declare the followrng to DOJ, under penalty of perjury, on behalf of myself and the applicant (1) I understand that, In taking (or not taking) any action pursuant to this declaration and certlflcaUon, DOJ wlll rely upon this declaratlon and certffloatlon as a material representation; and (2) I understand that any materially false, fictitious, or fraudulent Information or statement In this declaration end certification (or concealment or omission of a material fact as to either) may be the subject·of crimfnal proseoution (including under 18 u.s.c. §§ 1001 and/or 1621, and/or 34 U.S.C. §§ 10271-10273), and also may subject me and the applicant to cMI ~naltles and administrative remedies under the federal False Claims Act (including under 31 U.S.C. §§ 3729--3730 and/or§§ 3801-3812) or otherwise. [~.App~ -
ntle of Approving Offlclal
Deputy Assistant Attorney
General
. . . ... - --·· -----. ---· -··· Name of Approving Offlclal Maureen Henneberg
Authorized Representative
. . . - -· --·-· --- . . . ] Signed Date And llme
9/16/21 3:31 PM
---------· _..,.. ___ .................... __ _
■ Declaration and Certification

Entity Acceptance
litle of Authorized Entity Official
Audit Manager
Name of Authorized Entity Orficial
Monique Vansuch
Signed Date And Time
10/22/2021 1 'l :38 AM
APRRO\E0.AS TO FOAM
OFFICE OF Tl'IE-coom COUNS8.. CWHGE OOUNTV, CALIFOANIA
lr~~£4L
a.: / ~

ORANGE COUNTY BOARD OF SUPERVISORS

MINUTE ORDER
Decem ber 07, 2021
Subm itting Agenc y/Department: County Executive Office Approve grant applications/awards submitted by Health Care Agency, Sheriff-Coroner, Public Defender and OC Community Resources and ratify grant applications/awards submitted by Sheriff-Coroner and retroactive grant applications/awards submitted by Sheriff-Coroner and OC Co111111unity Resources in 12/7/21 grant report and other actions as recorn111ended; adopt resolution authorizing Sheriff-Coroner or designee to execute grant assurance and related docu111ents to California Office of E111ergency Services for FY 2021 Homeland Security Grant Program ($3,216,641 ); and approving related actions under
Continued on attached page ...

The f o llo wi ng is a ction tak en by the Boa rd of Sup ervis ors :

APPROVED AS RECOMMENDED ~ OTHER □
Unanimous ~ (1) DO: Y (2) FOLEY: Y (3) WAGNER: Y (4) CHAFFEE: Y (5) BARTLETT: Y Vote Key: Y= Yes; N=No; A =Abstain; X =Excused; B. 0. =Board Order Documents accompanying this matte r:
~ Resolution(s) 21-140-21 -142
D Ordinances(s)
D Contract(s)
Item No. 30
Special Notes:

Copies sent to:

CEO/Legislative Affairs
Health Care Agency
She1·iff- C<Jro11er
Public Defe nder
OC Commun ity Resources
12/10121
I certify that the foregoing is a true and correct copy of the Minute Orde1· adopted by the Board of Supervisors , Orange County, State of California.

Ro i n Stieler, Clerk of the 1?oard
/
Agenda Item - 3.b.

City of Garden Grove

INTER-DEPARTMENT MEMORANDUM
To: Scott C. Stiles From: Patricia Song
Dept.: City Manager Dept.: Finance
Subject: Receive and file annual
financial reports and
auditor’s communication
related to the Fiscal Year
2020-21 annual audit.
(Action Item)
Date: 2/22/2022

OBJECTIVE
For the City Council to receive and file annual financial reports and auditor’s communication related to the Fiscal Year 2020-21 annual audit.

BACKGROUND
The City’s Municipal Code requires a complete financial statement and report be submitted to the City Council after the close of each fiscal year. In order to ensure the reliability of the information contained within the financial statements, the City contracted with an independent audit firm, Davis Farr LLP, to perform the annual financial audit. The goal of the audit is to provide reasonable assurance that the City’s financial statements are free from material misstatement. Davis Farr LLP issued an unmodified, or clean opinion for the City’s financial statements for the fiscal year ended June 30, 2021.

DISCUSSION
The annual audits of the financial statements of the City and its component units were completed on February 3, 2022. The financial statements were prepared in accordance with all applicable accounting standards in order to conform to Governmental Accounting Standards Board requirements. The independent auditor has issued an unmodified opinion of the City’s financial statements for the fiscal year ended June 30, 2021. An unmodified opinion concludes that the financial statements of the City are presented fairly, in all material respects, in accordance with generally accepted accounting principles.

In addition to reviewing and examining the City’s financial records, the auditors also reviewed the internal control framework of the City. Internal control is a set of activities, rules, and procedures implemented by the City to ensure the integrity of

financial and accounting information, promote accountability, and prevent fraud.

Internal control mechanism is embedded in the normal operating procedures, designed with the intent of safeguarding assets, minimizing errors, and ensuring that operations are conducted in an approved manner. There were no findings cited by the auditors during their review of the City internal control over its financial reporting. Additionally, there were no internal control related matters identified in the audit that would warrant a written communication to the City Council or City Management.

The audited financials show that for Fiscal Year 2020-21, the City overall had a positive operating result of $29.2 million, primarily due to the receipt of the State and Local Fiscal Recovery Funds (SLFRF) in the amount of $24.2 million. This amount represented 50% of the total SLFRF allocated to the City. The American Rescue Plan Act (ARPA) delivered $350 billion to state, local and tribal governments across the nation to fight the pandemic. The funds are for supporting local communities and assisting local governments with their fiscal recoveries. The City has programmed the SLFRF money in our fiscal year 2021 to 2023 biennial budget, to fund for essential government services including public safety and other critical services, such as public works and community services. This much needed one-time funding also enabled the City to plan for two major infrastructure based programs that will support the recovery and long-term growth of the community. They are the Pavement Management Acceleration Plan, and Public Facilities and Infrastructure Program. Both programs were included in the adopted Fiscal Years 2021-23 biennial budget.

The General Fund is the primary operating fund of the City. For Fiscal Year 2020-21, revenue exceeded expenditures by $29.5 million in the General Fund, largely due to the receipt of $24.2 million in SLFRF in May 2021. These funds were not spent by end of the fiscal year, and had been carried over to the next year to fund for the City’s Police personnel costs and other essential governmental services. Property tax revenue continues to be the top revenue source for the City, contributed $55.2 million in Fiscal Year 2020-21, which was an increase of $4.9 million from the previous year. Sales tax increased by $5.3 million, to $48.4 million. However, Transient Occupancy Tax (TOT) revenue suffered a significant reduction due to the pandemic. In Fiscal Year 2020-21, the amount of TOT reported was $7.2 million, which represented a 19.5 million decrease from the pre-pandemic level.

The City strives to develop a budget that accurately aligns available resources and operational needs. Therefore, all budget variances are carefully reviewed and analyzed. A budget variance is the difference between the budgeted amount of expense or revenue and the actual amount. The budget variance is favorable when the actual revenue is higher than budgeted or when the actual expense is less than budgeted. Budget variances can occur for a variety of controllable and uncontrollable reasons, such as personnel savings due to vacancies, increases or decreases in development related activities, unspent funding in the current year due to projects crossing over fiscal years, implementation of technology to reduce cost, and the identification of one-time and unexpected revenue sources during the year.

Comparing to the budgeted amounts, the General Fund had a net favorable budget

variance of $44.2 million for the fiscal year ended June 30, 2021. This was a combination of one-time revenue not originally expected (such as the SLFRF) and budget savings on expenditures including personnel cost savings due to vacancy.

The majority of the budget variance were due to the timing on spending the funds.

These unspent funds on projects and encumbrances were carried over to the next fiscal year.

FINANCIAL IMPACT
There is no fiscal impact to receive and file the auditor’s reports related to Fiscal Year 2020-21 annual financial audit. The fees for auditing services were provided for in the annual operating budgets.

RECOMMENDATION
It is recommended that the City Council receive and file the following reports and documentations:

City of Garden Grove Annual Comprehensive Financial Report (ACFR) for Fiscal Year 2020-21 (Attachment 1)
Report on Agreed-Upon Procedures Applied to Appropriation Limit Worksheets – City of Garden Grove (Attachment 2)
Report on Internal Control and Compliance of the Air Quality Improvement Fund (Attachment 3)
Auditor Communications to the City Council (Attachment 4) ATTACHMENTS:

Description Upload Date Type File Name
Attachment 1 -
Comprehensive Annual
Financial Report
2/7/2022 Exhibit GG_ACFR_2021.pdf
Attachment 2 - Report
on Appropriation Limit
Worksheets
2/4/2022 Exhibit GG_GANN_Report_2021.pdf
Attachment 3 - Report
on AQMD Compliance 2/4/2022 Exhibit GG_AQMD_2021.pdf
Attachment 4 - Auditor
Communication Letter 2/4/2022 Exhibit City_Council_Communications_2021.pdf

•
•
•
•
City of Garden Grove, California
JULY 1, 2020 - JUNE 30, 2021

ANNUAL COMPREHENSIVE

FINANCIAL REPORT
Main Street

This page is intentionally blank.

For the fiscal year ended
June 30, 2021

ANNUAL COMPREHENSIVE

FINANCIAL REPORT
City of Garden Grove
City of Garden Grove, 11222 Acacia Parkway, Garden Grove, CA 92840 Finance Department
Patricia Song
Finance Director

This page is intentionally blank.

CITY OF GARDEN GROVE

ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2021

INTRODUCTORY SECTION PAGE
i
ix
x
xi

FINANCIAL SECTION
1 4
Basic Financial Statements
Government-wide Financial Statements:
22 23
Fund Financial Statements:

Governmental Funds Financial Statements:
25 26
27 Reconciliation of the Statement of Revenues, Expenditures and Changes in 28 Proprietary Funds:
29 30
32 Private-Purpose Trust Fund:
36 37
38 Required Supplementary Information
Budgetary Comparison Schedules:
94 Schedule of Chan
ges in the Net Pension Liability and Related Ratios - Agent Multiple 95 99
103
104
Statement of Revenues, Expenses and Changes in Fund Net Position.................................

Statement of Cash Flows..............................................................................................

Statement of Fiduciary Net Position...............................................................................

General Fund..............................................................................................................

Statement of Changes in Fiduciary Net Position...............................................................

Notes to Basic Financial Statements.................................................................................

Employer Defined Benefit Pension Plans...........................................................................

Schedule of Contributions - Agent Multiple Employer Defined Benefit Pension Plans...............

Schedule of Changes in Total OPEB Liability and Related Ratios...........................................

Note to Required Supplemental Information.....................................................................

Statement of Net Position........................................................................................

Statement of Revenues, Expenditures, and Changes in Fund Balances.............................

TABLE OF CONTENTS
Letter of Transmittal........................................................................................................

GFOA Certificate of Achievement for Excellence in Financial Reporting....................................

Organization Chart...........................................................................................................

List of Elected Officials.....................................................................................................

Independent Auditor’s Report............................................................................................

Mana
gement's Discussion and Analysis (Unaudited)............................................................

Statement of Net Position............................................................................................

Statement of Activities.................................................................................................

Balance Sheet..........................................................................................................

Reconciliation of Balance Sheet of Governmental Funds to the Fund Balances of Governmental Funds to the Statement of Activities...........................

Statement of Net Position............................................................................................

CITY OF GARDEN GROVE

ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
Other Supplementary Information
Nonmajor Governmental Funds:
107
111
Nonmajor Governmental Funds and Major Capital Projects Fund Schedules of Revenues
, Expenditures and Changes in Fund Balance Budget and Actual:
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
Nonma
jor Enterprise Funds:
131
132
133
Internal Service Funds:
135
137
139

STATISTICAL SECTION (UNAUDITED)
Government-wide Information:
142
144
Fund and Other Information:
148
150
152
153
154
155
156
157
159
160
161
163
167
168
169
170
171
Demographic and Economic Statistics - Last Ten Calendar Years......................................

Principal Employers - Current Year and Ten Years Ago....................................................

Full-Time and Part-Time City Employees by Department - Last Ten Fiscal Years.................

Operating Indicators by Function - Last Ten Fiscal Years.................................................

Capital Asset Statistics by Function - Last Ten Fiscal Years..............................................

Pledged-Revenue Coverage - Last Ten Fiscal Years........................................................

Balance of Governmental Funds - Last Ten Fiscal Years..................................................

Changes in Fund Balances of Governmental Funds - Last Ten Fiscal Years.........................

General Government Major Tax Revenues by Source – Last Ten Fiscal Years.....................

Assessed Value and Estimated Actual Values of Taxable Property – Last Ten Fiscal Years....

Property Tax Rates - Direct and Overlapping Governments - Last Ten Fiscal Years..............

Principal Property Tax Payers - Current Year and Ten Years Ago......................................

Property Tax Levies and Collections - Last Ten Fiscal Years.............................................

Ratios of Outstanding Debt by Type - Last Ten Fiscal Years.............................................

Ratios of General Bonded Debt Outstanding..................................................................

Direct and Overlapping Bonds and Debt........................................................................

Legal Debt Margin Information - Last Ten Fiscal Years....................................................

Changes in Net Position - Last Ten Fiscal Years..............................................................

Other Grants and Contributions Special Revenue Fund...............................................

Garden Grove Tourism Improvement District Special Revenue Fund.............................

Street Rehabilitation Special Revenue Fund..............................................................

Home Grant Special Revenue Fund..........................................................................

Housing Successor Agency Capital Projects Fund.......................................................

Housing Authority Assets Capital Projects Fund.........................................................

Public Safety Capital Projects Fund..........................................................................

Combining Statement of Net Position.........................................................................

Combining Statement of Revenues, Expenses and Changes in Fund Net Position..............

Combining Statement of Cash Flows..........................................................................

Net Position by Component - Last Ten Fiscal Years.........................................................

Combining Statement of Net Position.........................................................................

Combining Statement of Revenues, Expenses and Changes in Fund Net Position..............

Combining Statement of Cash Flows..........................................................................

Air Quality Improvement Special Revenue Fund........................................................

Combining Balance Sheet.........................................................................................

Combining Statement of Revenues, Expenditures and Changes in Fund Balances.............

Public Safety Special Revenue Fund.........................................................................

State Gas Tax Special Revenue Fund.......................................................................

Developer Fees Special Revenue Fund.....................................................................

Garden Grove Cable Special Revenue Fund...............................................................

Street Lighting Special Revenue Fund......................................................................

Park Maintenance Special Revenue Fund..................................................................

Main Street District Special Revenue Fund................................................................

Introductory Section
Introductory
Section

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CITY OF GARDEN GROVE, CA

i

February
1, 2022

To the Honorable Mayor, City Council, and Citizens of the City Garden Grove:

It is with great pleasure that we present to you the City of Garden Grove’s Annual Comprehensive Financial Report (ACFR) for the fiscal year ended June 30, 2021. The ACFR is published to serve two purposes. Fi rst, it outlines accountability for public tax dollars and the services that are funded by these resources. Second, it communicates the results of operations and the City’s financial position to its constituents, and provides a vital framework for future decisions about programs and services.

In order to ensure the reliability of th e information contained herein, the City contracted with an independent audit firm, Davis Farr LLP, to perform the annual financial audit. The goal of the audit is to provide reasonable assurance that the City’s financial statements are free from material misstatement. Davis Farr LLP issued an unmodified opinion for the City’s financial statements for the fiscal year ended June 30, 2021.

Management is responsible for both the accuracy of the financial report and the completeness and fairness of the presentation. To provide a reasonable basis for making these representations, manage ment has established a comprehensive internal control framework that is designed both to protect the government’s assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the City’s financial statements in conformity with accounting principles generally accepted in the United States of America. Because the cost of internal controls should not outweigh their benefit s, the City’s comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects, including all disclosures necessary to enable the reader to gain a reasonable understanding of the City’s financial activities.

The ACFR is prepared using the financial reporting requirements outlined by the Governmental Accounting Standards Board (GASB) statements. Three sections are presented: the Introductory Section, the Financial Section , and the Statistical Section. This transmittal letter is included in the Introductory Section , and is designed to complement and should be read in conjunction with the Management’s Discussion and Analysis (MD&A), which is included in the Financial Section . The MD&A provides an overview of the City’s operations and how we performed financially. The auditor’s opinion letter and a complete set of financial statements are presented in the Financial Section . The Statistical Section presents historical

City of Garden Grove Letter of Transmittal
ii

information about the City’s finances an d operations, as well as demographic and economic data.

The independent audit of the financial stat ements of the City of Garden Grove was part of a broader, federally mandated audit of state and local governments (the “Single Audit”) designed to meet the special needs of federal granting agencies. The standards governing the Single Audit require the auditor to report not only on the fair presentation of the financial statements, but also on the City’s internal controls and compliance with legal requirements. These reports are available in the City of Garden Grove’s separately issued Single Audit Report.

The ACFR is a required component of conti nuing disclosure to th e bond holders as covenanted by certain City bond issues.

Community Profile

The City of Garden Grove is located in central Orange County approximately 25 miles southeast of downtown Los Angeles. With a current population of approximately 171,949, it is the fifth largest city in Orange County and the 31 st largest in the State
of California. The City incorporated on June 18, 1956.

The City spans an area of 17.9 square miles and is a general law city in the State of California. It has a Council-Manager form of government. On May 10, 2016, the City of Garden Grove adopted Ordinance No. 2866 changing the City’s at-large system of electing City Council members to a By-Dis trict election system and established the boundary lines of the six districts. While the Mayor continues to be elected at-large for a two-year term, the six City Council members are elected by districts for four- year staggered terms. The City Council engages the City Manager and City Attorney.

The City Manager has the responsibility for hiring the department directors and for administering the City's programs in accordance with the policies adopted by the City Council.

City Service and Budgetary Control

Garden Grove is a full service city. The services provided by the City include police, street and park maintenance, water, sewer, recreation, traffic/transportation, public improvements, planning, zoning, and general administrative services. The City began contracting with Orange County Fire Authority to provide fire protection and paramedic services since August 16, 2019. Also included in the City’s overall operations are the Garden Grove Housing Authority, the Garden Grove Sanitary District, Garden Grove Successor Agency, and the Garden Grove Public Financing Authority. Additional information on these component units is available in the Notes to the Basic Financial Statements.

A key element of the City’s financial management process is the development and approval of a biennial budget. Garden Grove Municipal Code requires the City Manager to prepare and submit the proposed budget and salary plan to the City Council for approval. The City Council conducts multiple public budget review

City of Garden Grove Letter of Transmittal
iii

sessions to obtain taxpayer input, prior to adopting the budget at a public meeting.

The legal level of budgetary control is at the fund level. The City Council may amend the budget to increase or decrease approp riations or move appropriations between funds. The City Manager is authorized to transfer appropriations within a fund between the various programs and/or departments.

Demographic and Economic Information

Demographically, the City of Garden Grove has one of the highest population density in the County. The community is highly diversified with a median age of 40.1 years.

With a 2021 population of 171,949, the City is the 31
st largest city in California and
the 154th largest city in the United States. The median household income in 2019 was $69,278, slightly above the national avera ge. The City is benefiting from higher education levels. In 2019, 74.7% of the population completed high school, and

22.3% received bachelor degree or higher. This is an increase of 40.4% comparing to 2000.

Between 2007 and 2017, total jobs in the Ci ty grew 12.6% (to 58,163). The City’s largest job sector is in Education, which accounts for 24% of total jobs, followed by Leisure and Hospitality (15.7%), Professional and Management (13.1%), and Manufacturing (12.3%).

With limited opportunities for large-scale new development, Garden Grove continues to facilitate reinvestment of underutiliz ed commercial properties. Through its ongoing commitment to stimulate the local economy, improve essential services, and expand its public safety labor force, the City of Garden Grove will continue to provide excellent services to its constituents and neighboring communities.

Financial Condition of the City

Economy nationwide has shown strong recovery from early COVID-19 pandemic slowdowns. Unemployment rate at the end of the fiscal year nationwide decreased to 5.9% from 11.2% in last year. However, improvement in overall economic condition does not directly translate to improved financial condition for local governments. For example, Transient and Occupancy Tax (TOT) has been one of the three main revenue sources for the City, with the leisure and hospitality industry being impacted the hardest during the pandemic, the City’s TOT revenue for the current fiscal year was down by over 74.1%, or $19.5 million from the pre-pandemic level.

The retail industry has been performing strong, resulting in a 14.3% increase in sales tax revenue. Home prices have seen a steady increase over the past year, property tax, the largest revenue source for the City, showed an 8.4% increase over the previous year. However, despite higher sa les and property tax revenues, the City’s overall general governmental revenue declined by 9.1%, or $12.0 million, comparing to the previous fiscal year.

City of Garden Grove Letter of Transmittal
iv

In addition to the declining revenue, the City is also seeing an increase in fixed cost for operating the city government. Pension cost is one of the primary contributors towards the overall cost increase. In addition to the discount rate decrease over the past few years, a new amortization po licy was adopted by CalPERS Board of Administration which went into effective in the June 30, 2019 actuarial valuation.

The new policy shortened the period over which actuarial gains and losses are amortized by 10 years, and removed the 5-year ramp for unfunded accrued liability (UAL) bases attributable to assumption changes and non-investment gains and losses. The steep increase in pension cost and other operating costs, such as contractual services, places significant financial pressure on the City. The Measure O local sales tax measure that was passed by the community in 2018 alleviated some of these financial pressures, yet with the negative economic impact from the pandemic, and the continued decline in state and federal funding for key local infrastructure, the City is still facing serious challenges in creating fiscal sustainability and maintaining service levels the community demands.

In May 2021, the City received $24.2 million of the State and Local Fiscal Recovery Funds (SLFRF). This amount represented 50% of the total SLFRF allocated to the City, as a part of the American Rescue Plan Act (ARPA). The ARPA delivered $350 billion to state, local and tribal governments across the nation to support their response to and recovery from the COVID-19 public health emergency. The funds are intended to help the state and local governments fight the pandemic, support communities and businesses, maintain vital public services, and recover from the pandemic. The $48.4 million SLFRF were programmed within the City’s fiscal years 2022 and 2023 biennial budget, to fund essential government services including public safety and other critical general services, such as public works and community services. The much needed SLFRF also enabled the City to plan for two major infrastructure-based programs that will support the long-term growth of the community. These programs are the Pavement Management Acceleration Plan, and Public Facilities and Infrastructure Program with focuses on improving the Garden Grove police facility and civic center.

On the budget front, we were able to adopt a balanced biennial budget for fiscal years 2022 and 2023 with the one-time SLFRF money. Overall City budget is $337.3 million for Fiscal Year 2021-22 and $302.7 million for Fiscal Year 2022-23. The General Fund operating budget is $140.8 million and $145.0 million for each year respectively.

As a commitment to fiscal stewardship, following the establishment of the Garden Grove Pension Funding Policy and General Fund Reserve Policy last fiscal year, the City Council approved another important fi nancial policy, the Infrastructure Funding Policy in June 2021. The Infrastructure F unding Policy will preserve the influx of federal funds and future one-time revenue sources by setting a framework on standards and funding priorities, and address the sustainability of critical City infrastructure assets.

The City is committed to continue to impr ove on fiscal policy and standard setting, implement best financial management practices, and manage spending in a prudent manner by improving efficiency and identifying cost saving/recovery opportunities.

City of Garden Grove Letter of Transmittal
v

Long-term Financial Planning

The City has consistently demonstrated responsible fiscal management practices. In accordance with the provisions of the City’s municipal code, a five-year forecast covering operating revenue and expenditures, labor usage, and capital improvement plan is incorporated in the biennial budget process. The forecast includes analysis of key revenue and expenditure components, and proposed measures to address any anticipated funding gaps. The City’s biennial budget is developed in the context of the five-year financial forecast.

To foster a culture of long-term fiscal sustainability, the City has started the process of adopting a series of important fiscal policies in recent years. These policies set a framework to ensure a balanced budget, maintain healthy reserves, appropriately fund the City’s pension liabilities, as well as planning for future infrastructure needs.

In August 2019, the City adopted the Pension Funding Policy, formally committing to proactively addressing its unfunded pension lia bility. With the close of Fiscal Year 2018-19, a General Fund reserve policy was added, setting a standard for a contingency reserve. During the adoption of fiscal years 2021-23 biennial budget, an Infrastructure Funding Policy was formally adopted by the City Council, establishing a framework to address the City’s infrastructure needs and enable strategic investments to accommodate future growth.

Together, these important policies will guide the City in formulating its budget responsibly and standardizing practices to achieve best use of City resources. In the future, policies on user fees and cost recovery and cost allocation for administrative and support functions, will also be developed and incorporated into the comprehensive financial policy framework.

Financial Policies and Practices

The City adopted various critical financial policies and practices with the goal of building a fiscally resilient government over the long-term.

Infrastructure Funding Policy

The Infrastructure Funding Policy sets a framework for policy standards and provides direction to systematically address the infrastructure deficit. It calls out several critical fiscal and asset planning or management practices to be developed over the next few years, including a Capital Replacement Reserves Policy, asset management plans for each major infrastructure type, and a comprehensive infrastructure plan.

Pension Funding Policy

The purpose of the Pension Funding Policy is to establish a systematic and disciplined method to accumulate resources to be used towards funding pension liability and future benefit payments, and to provide reasonable assurance that the cost of pension benefits will be funded in an equitable and sustainable manner.

City of Garden Grove Letter of Transmittal
vi

General Fund Reserve Policy

The City is committed to prudent fiscal practices and maintaining adequate General Fund reserves to ensure consistent, uninterrupted municipal services in the event of unexpected temporary revenue shortfalls or unpredicted one-time expenditures, as well as the credit worthiness of the City. In December 2019 the City Council adopted the General Fund Reserve Policy, which established the appropriate level of unassigned fund balance in the General Fund, set conditions warranting its use, and outlined the plan to replenish it if the balance fell below the policy level.

Enterprise Fund Business Principles

The City maintains a set of business principles for managing its enterprise fund operations. These principles are to en sure the funds break even and operate efficiently, maintain two months cash flow and $500,000 in reserves for contingencies, approach 5 percent of syst em value for replacement sinking funds, and maintain system and facilities up to industry standards by adequately funding new Capital Improvement Programs.

Investment Policy

The City maintains an investment policy that is updated annually and reviewed and approved by the City Council. The City’s investment objectives as outlined in the policy are in the following order: safety of principal, liquidity, and yield. To meet these objectives, the City attempts to obtain the highest yield on its investments consistent with the preservation of prin cipal and liquidity. The yield benchmark for the City is the 24-month moving average of the 2-year Constant Maturity Treasury.

The Investment Policy was certified by the California Muni cipal Treasurer’s Association in November 2020.

Purchasing Policy

The purpose for the City’s centralized purchasing policy is to procure needed supplies, services, and equipment at the utmost quality, within the required time, and at the best price for the City, in a manner consistent with legal requirements, good business practice, and proper fiscal control. The goal is to serve the public with integrity while maximizing the value of the tax dollar.

Debt Management Policy

On January 24, 2017, the City Council adopted a debt management policy in compliance with Senate Bill 1029 to improve public debt financial transparency. The objective of the debt policy is to achi eve sound administration of City debt by minimizing debt service and issuance costs, maintaining the highest reasonable credit rating, and ensuring complete financial di sclosure and compliance with State and Federal laws.

City of Garden Grove Letter of Transmittal
vii

Major Initiatives

The City’s underlying credit rating was upgraded by two notches to AA by Standard & Poor’s (S&P) in September 2021. The two-notch upgrade is a reflection of the City’s “very strong” (S&P’s highest qual itative category) financial management, liquidity, budgetary flexibility and debt and contingent liabilities. The City has taken active steps to strengthen our financial management practices and enhance budget performance in the recent years. In addition to adopting various fiscal policies, efforts have been invested in reducing unfunded pension liability, funding infrastructure gap, improving operational efficiency, and promoting transparency. An Internal Revenue Code Section 115 Trust was created to accumulate funds necessary to pay down our pension liability; an Infrastructure Funding Policy was established to comprehensively address our infrastructure deficit situation; an Enterprise Resources Planning (ERP) system was implemented to improve internal control and process efficiency; and various community outreach programs were launched on major initiatives, such as the development of Parks Master Plan, the 2021-2029 Garden Grove Housing Element Update, and the upcoming Civic Center Community Engagement.

Despite the economic challenges brought on by the COVID-19 pandemic, the City continued to advance its economic development initiatives in areas of local investment enhancement, job creation and retention priorities, and small business sustainability. With the help of the Coronavirus Aid, Relief, and Economic Security (CARES) Act funding, th e City launched JOBS 1
st Grant and Loan programs, Micro
Business Grant program, D1 Small Business Grants, and the JOBS 1st To-Go Program that collectively sustained over 600 small businesses in the City.

The City is committed to providing programs and services designed to improve neighborhoods with support from the Neighborhood Improvement and Conservation Commission and funding from the federa l and state agencies. Such funds are comprised of Community Development Block Grant, HOME Investment Partnerships Program, Emergency Solutions Grants, and the CARES Act funds. During the pandemic, additional resources were deployed to support family meal programs, street outreach, rapid rehousing and home less prevention programs. One of the City’s key initiatives during the year was the creation of the Workforce Activation & Readiness (WARP) program focusing on employment development. The City also continues several existing programs that have shown much success in the past, including the First-time Homebuyer Program, the Home Repair Program, Re-Roof Grant Program, and the Homeless Emergency Assistance and Rental Transition (HEART) Program. Several key affordable housing projects are near completion, such as Garden Brook Senior Village, which comprises of 394 affordable senior units with ancillary retail uses, and the City’s first permanent supportive housing project by American Family Housing.

A few notable development projects that commenced construction included:

Home2Suite by Hilton, Pavilions Plaza West to be anchored by Sprouts Famers Market and the Habit, Phase 2 of the West Grove Center with a new bowling alley, redevelopment of the Main Street Pavilion, Rally’s Burger, Raising Cane’s, 7 Leaves Café, Phuc Long Coffee & Tea, and AUM Beer.

City of Garden Grove Letter of Transmittal
viii

The Re-Imagine Garden Grove efforts incorp orated extensive active transportation activities that successfully resulted in th e opening of the City’s newest open space amenity, the Medal of Honor Bike and Pedestrian Trail. The trail connects the City’s downtown areas that will soon be home to Cottage Industries, an adaptive reuse of the twelve properties for retail, office, ar tesian and makers’ space. The first phase of the Farm Block will begin construction in 2022.

There remains high demand in the City’s industrial area with Rexford Industrial nearing completion of a 140,000 square feet of new industrial space, approval of multi-level mini storage facility, and expansion of House Foods West Coast operations.

Awards and Acknowledgements

The Government Finance Officers Association (GFOA) awarded the Certificate of Achievement for Excellence in Financial Reporting to the City of Garden Grove for its Annual Comprehensive Financial Report (ACF R) for the fiscal year ended June 30, 2020. This was the 36th consecutive year that the City has received this prestigious award. The Certificate of Achievement is the highest form of recognition in the area of governmental accounting and financial r eporting, and its attainment represents a significant accomplishment by a government and its management.

A Certificate of Achievement is valid for a period of one year only. We believe that our current ACFR continues to meet the award program requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. The preparation of the ACFR on a timely basis was made possible by the efficient and dedicated service of the staff in Financ e. Staff members have our sincere appreciation for their contributions to this report. We also acknowledge the assistance of Davis Farr LLP, in completing the ACFR.

We thank the Mayor, City Council, and the City’s executive management team for their strong leadership and support of the financial operations of the City and for maintaining the highest standards of professionalism in managing the City’s finances for the best interest of the citizens of Garden Grove.

Respectfully submitted,

______________________________
Scott C. Stiles, City Manager Patricia Song, Finance Director

Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City
of Garden Grove
California
For its Comprehensive Annual
Financial Report
For the Fiscal Year Ended
June 30, 2020
Executive Director/CEO
ix

e
~P-~
City of Garden Grove

THE PEOPLE OF GARDEN GROVE

MAYOR AND CITY COUNCIL

CITY ATTORNEYCITY MANAGER

INFORMATION

TECHNOLOGY

PUBLIC WORKS

DEPUTY CITY MANAGER
City of Garden Grove

MAYOR AND CITY COUNCIL

CITY ATTORNEYCITY MANAGER

ACM/COMMUNITY

AND ECONOMIC

DEVELOPMENT

COMMUNITY

SERVICES
HUMAN

RESOURCES

INFORMATION

TECHNOLOGY FINANCE
POLICE

ASSISTANT CITY MANAGER
x

.........................

I I I

CITY OF GARDEN GROVE
George S. Brietigam III
Council Member - District 1
Patrick Phat Bui
Council Member - District 4
Kim B. Nguyen
Council Member - District 6
John R. O’Neill
Council Member - District 2
Stephanie Klopfenstein
Council Member - District 5
Diedre Thu-Ha Nguyen
Mayor Pro Tem - District 3
City Council
City Officials
Steve Jones
Mayor
Scott Stiles
City Manager
Omar Sandoval
City Attorney
John Montanchez
Community Services Director
William Murray
Public Works Director
Patricia Song
Finance Director
Anand Rao
Information Technology Director
Laura Stover
Human Resources Director
Tom DaRé
Police Chief
Lisa Kim
Assistant City Manager/ Community
& Economic Development Director
Maria Stipe
Assistant City Manager
xi

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Financial Section
Financial
Section

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Independent Auditor’s Report

City Council
City of Garden Grove
Garden Grove, California

Report on the Financial Statements

We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Garden Grove, California (the City), as of and for the year ended June 30, 2021, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentati on of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applic able to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risk s of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expre ssing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion.

An audit also includes
evaluating the approp riateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

1

DavisFarr

CERTIFIED PUBLIC ACCOUNTANTS
Davis Farr LLP
18201 Von Karman Avenue I Suite 1100 I Irvine, CA 92612 Main: 949.474.2020 I Fax: 949.263.5520

Opinions

In our opinion, the financial statements referr ed to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Garden Grove, California, as of June 30, 2021, and the respective changes in financial position and, where applicable, cash flows thereof fo r the year then ended in accordance with accounting principles generally accepted in the United States of America.

Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, certain budgetary comparison information, Schedule of Changes in Net Pension Liability and Related Ratios, Schedule of Pension Contributions and the Schedule of Changes in Total OPEB liability and Related Ratios be presented to supplement the basic financial statem ents. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historic al context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basi c financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Other Information

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The combining and individual nonmajor fund financial statements , certain budgetary comparison schedules, the introductory section and the statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements.

The combining and individual nonmajor fund financial statements and certain budgetary comparison schedules are the responsibility of manage ment and were derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic fina ncial statements and certain additional procedures, including comparing and reconciling such information dire ctly to the underlying accounting and other records used to prepare the basic financial stat ements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements and certain budgetary comparison schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory section and the statistical section have not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on them.
2

Other Rep
orting Required by Government Auditing Standards

In accordance with Government Auditing Standards , we have also issued our report dated February 3, 2022 on our consideration of the City of Garden Grove’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 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 City of Garden Grove’s internal control over financial reporting and compliance.

Irvine, California
February 3, 2022

3

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CITY OF GARDEN GROVE, CA

MANAGEMENT’S DISCUSSION AND ANALYSIS

Fiscal Year Ended June 30,
2021

The City of Garden Grove’s Finance team has prepared this narrative overview and analysis of the financial activities of the City for the fiscal year ended June 30, 2021, to assist users of this report to gain a better understanding of the City’s financial health and history. The information pr esented here should be considered in conjunction with additional information furnished in the letter of transmittal and the accompanying financial statements.

FINANCIAL HIGHLIGHTS

The City of Garden Grove’s financial statements prepared for the fiscal year ended June 30, 2021 comply with all applicable statements issued by the Governmental Accounting Standards Board (GASB). GASB Statement No. 84, Fiduciary Activities, was implemented by the City during the fiscal year ended June 30, 2021. The objective of this Statement is to improve guidance regarding the identification of fiduciary activities for ac counting and financial report ing purposes and how those activities should be reported. The implem entation of this Statement will improve consistency and comparability by establishing specific criteria for identifying activities that should be reported as fiduciary ac tivities and clarifyi ng whether and how business-type activities should report their fiduciary ac tivities. Greater consistency and comparability enhance the value provided by the information reported in financial statements for assessing government accountability and stewardship.

Government-Wide

 The City’s total assets and deferred outflows of resources exceeded its liabilities and deferred inflows of resources at June 30, 2021 by $782.4 million (net position).

 The overall City’s net position increas ed by $29.2 million from the previous fiscal year largely due to the receipt of $24.2 million in the State and Local Fiscal Recovery Funds (SLFRF). This amount represented 50% of the total SLFRF allocated to the City, as a part of the American Rescue Plan Act (ARPA).

 Total expenses for governmental activities were $170.3 million for fiscal year ended June 30, 2021. The sources for these expenses came from program revenues of $66.3 million, taxes in the amount of $117.4 million, and other general revenue of $1.9 million. For the current year, revenues from governmental activities exceeded expe nses by $15.3 million, with a net transfer of $0.2 million, net position for governmental activities increased by $15.5 million from the previous year to $598.3 million at June 30, 2021.

4

CITY OF GARDEN GROVE
Management’s Discussion and Analysis (continued)
June 30, 2021

 For business-type activities, program revenues exceeded expenses by $12.8 million. Among the total program revenue of $99.2 million, $58.0 million was from charges for services, and $41.2 million from operating grants and contributions. Combined with investment earnings and other general revenues of $1.1 million, and net against the transf er to governmental activities in the amount of $0.2 million, net position for business-type activities increased by $13.7million from the previous year to $184.1 million at June 30, 2021.

Fund Based

 As of the end of the current fiscal year, the City’s governmental funds reported a combined ending fund balance of $181.9 million, an increase of $34.1 million from the previous year. The net increase was primarily due to the SLFRF allocation to the City as well as other financial aides provided related to the COVID-19 pandemic from the federal and state governments.

 Among the total fund balance of $181.9 million reported at the close of the fiscal year, $86.7 million, or 47.7% are either non-spendable or restricted for specific purposes. The City also committed $22.5 million as Stability Reserves in the General Fund. Please refer to Notes to Basic Financial Statements (Note 1) for additional information on the categorization of the governmental funds’ fund balances.

OVERVIEW OF THE FINANCIAL STATEMENTS

Government-Wide Financial Statements

The government-wide financial statements are designed to give users a broad overview of the City’s finances, similar to a private-sector business. They present the financial picture of the City from the economic resources measurement focus using the accrual basis of accounting.

There are two statements in the government-wide financial statements, the statement of net position, and the statem ent of activities. The statement of net position presents information on all of the City’s assets, deferred outflows of resources, liabilities, and deferred inflows of resources. The net difference between the total of assets and deferred outflows and the total of liabilities and deferred inflows is reported as net position. Increases or decreases in net position over time may serve as a useful indicator of whether the City’s financial position is improving or deteriorating. Other factors to consider are changes in the City’s property tax base and the condition of the City’s infrastructure assets. The statement of activities shows how the City’s net position changed during the fiscal year.

Both government-wide financial statements distinguish between functions that are primarily supported by taxes and intergovernmental revenues, and functions that are intended to recover all or a significant portion of their costs through user fees and charges. The first function is identified in the statements as governmental activities, while the latter is reported as business-type activities. 5

CITY OF GARDEN GROVE
Management’s Discussion and Analysis (continued)
June 30, 2021

Most of the City’s basic services are reported in the governmental activities category, including fire, police, traffic safety, public right of way, community buildings, community services, economic developm ent, parks and greenbelts, community planning and development, and municipal support functions. Property and sales taxes, transient occupancy tax, business licenses and permits, investment income, and state and federal grants finance these activities. The City operates its sewer utility through its component unit, the Garden Grove Sanitary District, and federal Section 8 housing program through anot her component unit, the Garden Grove Housing Authority. These ac tivities are reported in the business-type activities category along with water utility and solid waste disposal services.

The government-wide financial statements can be found on the pages immediately following this discussion in the Basic Financial Statements section.

Fund Financial Statements

A fund is a set of related accounts that is used to control resources that have been segregated to carry on specific activities or to attain certain objectives in accordance with special regulations, restrictions, or limitations. The City, like the state and other local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All City funds are divided into one of three categories: governmental funds, proprietary funds, or fiduciary funds.

The governmental fund financial statements are prepared using the current financial resources measurement focus and modified accrual basis of accounting. The proprietary and fiduciary ac tivities are prepared using the economic resources measurement focus and the accrual basis of accounting.

The fund financial statements provide detailed information about the most significant funds – not the City as a whole. Some funds are required to be established by State law and by bond covenants. However, management establishes many other funds to help manage and report money for particular purposes or to show that it is meeting legal responsibilities for using certain taxes, grants, and other money.

Governmental funds
Most of the City’s basic services are reported in governmental funds, which focus on how money flows into and out of those funds and the balances left at year-end that are available for spending. These funds are reported using an accounting method called modified accrual accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the City’s general government operations and the basic services it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to finance the City’s programs. The differences of re sults in the governmental fund financial statements to those in the government-wide financial statements are explained in a reconciliation schedule following each governmental fund financial statement. The governmental fund financial statements can be found in the Basic Financial Statements section of this report.
6

CITY OF GARDEN GROVE
Management’s Discussion and Analysis (continued)
June 30, 2021

Proprietary funds

When the City charges customers for the services it provides – whether to outside customers or to other units of the City – these services are generally reported in proprietary funds. Proprietary funds are reported in the same way that all activities are reported in the statement of net po sition and the statement of revenues, expenses and changes in fund net position. The City’s enterprise funds are the same as the business-type activities reported in the government-wide statements but provide more detail and additional information, such as cash flows. The City uses internal service funds (the other component of proprietary funds) to report activities that provide supplies and services for the City’s other programs and activities – such as the City’s self-insured worker’s compensation and risk management, fleet management, employee benefits, information systems, warehouse operation, and communication replacement funds. The internal service funds are reported with governmental activities in the government-wide financial statements. The proprietary fund financial statements can be found in the Basic Financial Statements section of this report.

Fiduciary funds

The City is the trustee, or fiduciary, for certain funds held to account for activities reported in this category which includes th e Successor Agency. The City’s fiduciary activities are reported in separate statements of fiduciary net position and statement of changes in fiduciary net position.

Notes to Basic Financial Statements

Notes to basic financial statements provide additional information that is essential to fully understand the data provided in the government-wide and fund financial statements. They are presented immediately following the Basic Financial Statements section of this report.

Other Information

In addition to the basic financial statements and the accompanying notes, this report also presents certain required supplementary information on the City’s budget process and the General Fund budgetary comparison schedule, the City’s progress in funding its obligation to provide pension and other post-employment benefits to its employees.

Combining and individual statements for non-major governmental and proprietary funds, internal service funds and the agency fiduciary fund are also presented in the Supplementary Information section of this report.

7

CITY OF GARDEN GROVE
Management’s Discussion and Analysis (continued)
June 30, 2021

GOVERNMENT- WIDE FINANCIAL ANALYSIS

The government-wide financial analysis focus on the City’s net position and changes in net position of the governmental and business-type activities during the fiscal year.

As noted earlier, the City’s net position as a whole increased by $29.2 million from the previous year. This is primarily due to the one-time infusion of federal aid in light of the COVID-19 pandemic. The City has been allocated $48.4 million of SLFRF, $24.4 million was received in May 2021. The government-wide net position reported $782.4 million as of June 30, 2021.

Among the total net position, $737.7 million represents net investment in capital assets. These capital assets are essential for City operations, which include land, buildings, machinery and equipment, and infrastructure. Net position invested in capital assets is not available for spending. Although the City’s investment in capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be liquidated to pay for the liabilities.

The remaining $44.7 million of total government-wide net position are composed of $75.6 million restricted funds and ($30.9) million unrestricted. Net position may be restricted for capital projects, debt payments, and/or special programs such as public safety and public right of way.

The graph below illustrates the various components of the City’s net position at fiscal year ended June 30, 2021.

8

City of Garden Grove's Net Position
June 30, 2021
Net Investment in Capital ----::::;;;
Assets

90.3%
Restricted for Community
Services

0.9%
Restricted for
Public Safety

0.5%
Restricted for Public Right
of Way

1.8%
Restricted for Community
Planning & Development

6.5%

CITY OF GARDEN GROVE
Management’s Discussion and Analysis (continued)
June 30, 2021

The schedule below is a condensed version of the City’s statement of net position for fiscal year ended June 30, 2021 with comparative data from the previous fiscal year:

A condensed statement of change in net position with comparative amounts on revenues and expenses for the current and prior year is presented on the following page.

City of Garden Grove's Net Position
(in millions)
Governmental activities Business-type activities Total
2021 2020 2021 2020 2021 2020
Current and other assets 314.9$ 281.4 $ 104.4 $ 74.6 $ 419.3 $ 356.0$ Capital assets 638.9 641.2 164.1 162.4 803.0 803.6 Total assets 953.8 922.6 268.5 237.0 1,222.3 1,159.6 Deferred charges on refunding - - 0.1 0.1 0.1 0.1 Deferred OPEB related items 26.2 21.9 3.4 2.8 29.6 24.7 Deferred pension related items 32.0 32.4 4.4 3.9 36.4 36.3 Total deferred outflows 58.2 54.3 7.9 6.8 66.1 61.1 Long-term debt 73.9 73.2 44.5 29.6 118.4 102.8 Net OPEB liability 48.9 40.5 6.3 5.2 55.2 45.7 Net pension liability 277.3 261.3 32.0 30.6 309.3 291.9 Other liabilities 11.0 13.0 8.9 6.9 19.9 19.9 Total liabilities 411.1 388.0 91.7 72.3 502.8 460.3 Deferred unamortized gain on refunding - - 0 .2 0.2 0.2 0.2 Deferred OPEB related items 0.8 0.8 0.1 0.1 0.9 0.9 Deferred pension related items 1.8 5.3 0.3 0.9 2.1 6.2 Total deferred inflows 2.6 6.1 0.6 1.2 3.2 7.3 Net investment in capital assets 617.3 619.1 120.4 132.7 737.7 751.8 Restricted 75.6 72.5 - - 75.6 72.5 Unrestricted (94.6) (108.8) 63.7 37.7 (30.9) (71.1) Total net position 598.3$ 582.8$ 184.1$ 170.4$ 782.4 $ 753.2$ 9

CITY OF GARDEN GROVE
Management’s Discussion and Analysis (continued)
June 30, 2021

Governmental Business-Type
Activities Activities Total
2021 2020 2021 2020 2021 2020
Revenues:

Program revenues:

Charges for services 14.7 $ 14.5 $ 58.0 $ 54.2 $ 72.7$ 68.7$ Operating contributions and grants 49.7 22.1 41.2 37.4 90.9 59.5 Capital contributions and grants 1.9 3.0 - - 1.9 3.0 General revenues:

Taxes:

Property taxes 55.0 50.8 - - 55.0 50.8 Sales and use taxes 49.3 43.1 - - 49.3 43.1 Transient occupancy taxes 7.1 18.8 - - 7.1 18.8 Other taxes 6.0 7.6 - - 6.0 7.6 Investment earnings 1.7 9.1 0.3 2.7 2.0 11.8 Other income 0.2 1.7 0.8 0.2 1.0 1.9 185.6 170.7 100.3 94.5 285.9 265.2 Expenses:

Public safety - Fire 29.8 32.9 - - 29.8 32.9 Public safety - Police 78.7 76.2 - - 78.7 76.2 Traffic safety 5.9 5.7 - - 5.9 5.7 Public right of way 18.4 17.5 - - 18.4 17.5 Community buildings & drainage 6.5 6.2 - - 6.5 6.2 Parks & community services 7.4 8.5 - - 7.4 8.5 Community & economic development 13.1 12.3 - - 13.1 12.3 Municipal support 9.4 9.9 - - 9.4 9.9 Water utility - - 36.2 37.9 36.2 37.9 Sewer utility - - 6.6 7.4 6.6 7.4 Solid waste disposal - - 2.4 2.1 2.4 2.1 Housing program - - 39.6 37.1 39.6 37.1 Golf course - - 1.6 1.5 1.6 1.5 Interest on long-term debt 1.1 1.1 - - 1.1 1.1 Total Expenses 170.3 170.3 86.4 86.0 256.7 256.3 Income (loss) before transfers 15.3 0.4 13.9 8.5 29.2 8.9 Transfers 0.2 - (0.2) - - - Change in net position 15.5 0.4 13.7 8.5 29.2 8.9 Net position - beginning of year 582.8 586.0 170.4 158.3 753.2 744.3 Restatement - (3.6) - 3.6 - - Net position - end of year 598.3 $ 582.8$ 184.1$ 170.4 $ 782.4 $ 753.2$ Total revenues
City of Garden Grove's Changes in Net Position
(in millions)
10

CITY OF GARDEN GROVE
Management’s Discussion and Analysis (continued)
June 30, 2021

Governmental Activities

Total resources available during the year to finance governmental operations were $768.6 million. This amount consists of the beginning net position of $582.8 million, program revenues of $66.3 million and general revenues of $119.3 million. Total uses in governmental activities during the year totaled $170.3 million. With a net transfer of $0.2 million, the net position for governmental activities increased by $15.5 million and ended at $598.3 million as of June 30, 2021.

The chart below presents governmental activity revenues and expenses for the past five years. Transfers and extraordinary items were not included in the revenues and expenses.

Total revenues from governmental activities was $15.3 million higher than total expenses for the year, due to the one-time COVID-19 relief funds received from the federal and state governments. General revenues from taxes declined by $2.9 million. Revenues from Transient Occupancy Tax (TOT) decreased by $11.7 million.

The impact is partially offset by the comb ined increase in sales and property taxes by $10.4 million, thanks to the strong performance in retail industry and steady increase in property value within the City.

Total cost of governmental activities for fiscal year ended June 30, 2021 was $170.3 million, consistent with the previous fiscal year. A total of $108.5 million, or 63.7% was for providing public safety police and fire services. The chart on next page shows a breakdown of the cost of each major municipal function.

11

200.0
180.0
'ii, 160.0
C 140.0 .Q
120.0
E 100.0 C
- 80.0
C
::s
0 60.0
E
~

40.0 20.0
Revenues and Expenses - Five-Year Trend
Governmental Activities
-- -- -
------------
T
v-
2017 2018 2019 2020 2021
Fiscal Year
[ -+- Revenues ---- Expenses

CITY OF GARDEN GROVE
Management’s Discussion and Analysis (continued)
June 30, 2021

The public safety function (police and fire ) is primarily funded by property taxes, sales tax, transient occupancy tax, and other general revenues. Traffic safety, public right of way, community buildings and drainage programs are responsible for maintenance and construction of transportation system as well as city facilities, with funding provided by gas tax, Measure M2, various federal, state and local grants, special assessment, as well as other general revenues. The funding source for parks and community services is primarily general revenues and some program fees.

Community and economic development functions are funded by development related revenues as well as general revenues such as taxes, fees and investment income.

Municipal support services (administration, legal, human resources, financial, and information technology) are primarily funded by charges to the direct operating functions they support through a cost allocation program.

Of the total cost of the governmental activities, the amount the taxpayers ultimately funded was $117.4 million, the remaining balance was paid by various program revenues, including $14.7 million by those who directly benefited from the programs, $49.7 million from other governments and organizations that subsidized certain programs with operating grants and cont ributions, and $1.9 million from capital grants and contributions.

12

Gove rnmental Activities Expenses
Year ended June 30, 2021
Community & economic development Municipal support &
interest on debt

6.2%
Parks & comm uni
services

4.3%
Community buildings
& drainage

3.8%
Traffic safety

3.5%
Public right of way

10.8%

7.7%
Public safety - Fire

17.5%
--- Public safety - Police

46.2%

CITY OF GARDEN GROVE
Management’s Discussion and Analysis (continued)
June 30, 2021

The following two charts illustrate the total revenue and expense for the governmental activities, excluding transfers for the fiscal years ended June 30, 2021 and June 30, 2020 respectively.

13

w C
0 .E
C
c ::,
0 ~
$140.0
$120.0
$100.0
$80.0
$60.0
$40.0
$20.0
$-
$80.0
___ $70.0
VI
C:
~ $60.0
.E$so.o
C:
~ 40.0
-C:
5 $30.0
J $20.0
$10.0
Revenue Sources - Two-Year Comparison
Governmental Activities
Taxes Charges for
Services
Operating
Contrtbutlons
& Grants
Capita!
Contrtbutions
& Grants
0 2021 0 2020
Investment
Earnings
Expenses - Two-Year Comparison
Governmental Activities
Other
$0.0 ~ = =:...--==:::a..,..--== =-,......;= = ....... = =:...--==:::a..,..--== =--= = ....... -===--,,- Pulllic safety Pulllic safety Traffic safety Pulllic rigtt Ccmmu,ity - Fire - Police of way blildings &
Drainage
Parks & Ccmmu,ity
ccmmrnity & ecooomic
services develo~ent
■ 2021 □ 2020 1
Muricipal
s14>port
Interest on
Long-te,m
Debt

CITY OF GARDEN GROVE
Management’s Discussion and Analysis (continued)
June 30, 2021

Highlights of the major revenue sources and expenses for governmental activities are listed below:

 Program revenues represent 35.7% of total revenues generated by governmental activities. Total program revenues for governmental activities in the current year were $66.3 million, an increase of $26.7 million from the previous year, primarily due to the inclusion of $24.2 million SLFRF received from the U.S. Department of Treasury in May 2021. These funds were programed to pay for public safety personnel cost, Category E1.9 outlined in the Treasury’s SLFRF reporting guidelines.

 Taxes comprised 63.3% of the total revenues from governmental activities. Total tax revenues were $117.4 million for the current year. Despite the sharp decline in TOT revenue in the amount of $11.7 million, overall tax revenues reported a slight decrease of $2.9 million of 2.4% comparing to the previous year. This was due to the $4.2 million increase in property taxes and $6.2 million in sales taxes comparing to Fiscal Year 2019-20. Property tax revenue represents 46.8% of total taxes, remain the largest general revenue source for the City. Sales tax totaled $49.3 million for the current year, including $23.3 million Measure O local sales tax revenue. The remaining $6.0 million revenue from taxes included franchise tax, business operations tax, and motor vehicle taxes.

 Total governmental expenses was $170.3 m illion, consistent with the prior year.

Cost for Fire protection and emergency medical response services was $29.8 million, representing 17.5% of total governmental expenses. Cost to provide police services was $78.7 million for fiscal year ended June 30, 2021, an increase of $2.5 million from the previous year, a direct result of the pandemic. More police workforce were allocated to respond to the public health and safety issues directly related to the pandemic, such as the early prisoner release and increased homelessness and mental health cases. Accordingly, the SLFRF were allocated to fund for the Police operations under the Treasury’s guidelines.

Business-Type Activities

The City’s net position in the business-t ype activities increased by $13.7 million, primarily due to increased operating revenue as a result of scheduled rate increase in Water and Sewer utilities. The overall net position reported in the business-type activities was $184.1 million as of June 30, 2021.

14

CITY OF GARDEN GROVE
Management’s Discussion and Analysis (continued)
June 30, 2021

The chart below presents revenues and expenses in the business-type activities for the past five years, excluding transfers and extraordinary items.

The graph below shows the expenses of each business-type function compared to the program revenues generated specifically from its operations.

Total expenses of all business-type activities for the fiscal year ended June 30, 2021 were $86.4 million, consistent with the previous year. As shown in the statement of activities, the amount paid by users of th e systems was $58.0 million, reported as charge for services. Revenues from operating grants and contributions were $41.2 million, for the City’s Housing Section 8 program. Total program revenue reported for the year was $99.2 million.
15

~
0 :J ...J
~
~
~
0 ~
$110
$100
$90
$80
$70
$60
$50
Revenues and Expenses - Five-Year Trend
Business-Type Activities
~
2017 2018 2019

FISCAL YEAR
--Revenues --Expenses
2020 2021
Program Revenues and Expenses- Business- Type Activities YearEndedJune30,2021
..

C
$50
~ $40
~
$30
$20
$10
so ~
□ Expenses D Program Revenues

CITY OF GARDEN GROVE
Management’s Discussion and Analysis (continued)
June 30, 2021

Total resources available during the year to finance business type activities were $270.7 million. This amount consists of net position at July 1, 2020 in the amount of $170.4 million, total revenues of $100.3 million, and a net transfer of $0.2 million to the governmental activities. After fu nding total expenses of $86.4 million, net position for business-type activities increased by $13.7 million to $184.1 million at June 30, 2021.

FUND FINANCIAL ANALYSIS
General Fund

The General Fund is the primary operating fund of the City. Fund balance increased by $30.1 million for the fiscal year ended J une 30, 2021, with an ending balance of $112.4 million.

Below is a three-year trend analysis on the fund balance of the General Fund. For additional information, please refer to the Notes to Basic Financial Statements.

For fiscal year ended June 30, 2021, operating revenues exceeded expenditures by $29.5 million. This was primarily due to the receipt of $24.2 million in SLFRF in May 2021. The SLFRF is a component of the American Rescue Plan Act (ARPA). The ARPA delivered $350 billion to state, local and tribal governments across the nation to support their response to and recovery from the COVID-19 public health emergency.

The amount allocated to the City was $48.4 million, and would be distributed in two equal installments. The City received 50% of the total allocation during the current fiscal year, and reported as current year’s revenues. The funds were used to fund for the City’s Police safety personnel costs and other essential governmental services provided during the current year.

City of Garden Grove's General Fund Fund Balance
Three-Year Trend Information
(in millions)
FY 2020-21 FY 2019-20 FY 2018-19
Fund Balances:

Nonspendable 11.3$ 14.4 $ 12.8$
Restricted 6.0 5.0 3.8
Committed 22.5 22.5 -
Assigned 2.7 3.2 3.1
Unassigned 69.9 37.2 47.4
Total Fund Balance 112.4$ 82.3 $ 67.1$
Fund Balance - Beginning 82.3$ 67.1 $ 49.7$
Excess revenues over expenditures 29.5 15.2 17.1 Transfers 0.6 (0.9) 0.3
Gain on sale of capital assets - 0.9 -
Fund Balance - Ending 112.4$ 82.3 $ 67.1$
16

CITY OF GARDEN GROVE
Management’s Discussion and Analysis (continued)
June 30, 2021

Overall General Fund revenues increased by $18.3 million or 13.5%, comparing to the previous year. In addition to the one-time COVID-19 relief funds received from the Treasury Department, property and sa les tax enjoyed a $4.9 million and $5.3 million increase thanks to the steady increase in property value and strong retail market during the year. However, TOT revenue decreased by $11.1 million, or 61.0% from the prior year, a direct result of the statewide shutdown during the pandemic.

The graph below illustrates General Fund revenues by major sources:

A two-year comparison of each General Fund revenue source for the fiscal years ended June 30, 2021 and June 30, 2020 is presented below:

17

Charges for
services

5.0%
Fines, penalties &
forfe itures

1.3%
Licenses. & permits

1.5%
General Fund Revenues
Year Ended June 30, 2021
Other

19.0%
Other taxes

3.3%
Transient occupany
taxes

4.5%
Property taxes

34.8%
Sales and use taxes

30.6%
General Fund Revenues - Two-Year Comparison
-;;;-
C
~
E
§..
c :,
~
$60.0
$50.0
$40.0
$30.0
$20.0
$10.0
$0.0
D2021
D2020

CITY OF GARDEN GROVE
Management’s Discussion and Analysis (continued)
June 30, 2021

Overall General Fund expenditures increased by $4.0 million compared to the previous year. The largest increase was in the Public Safety – Police and Community and Economic Development areas. Both functional areas had devoted significant amount of resources during the pandemic to maintain safety, provide assistance and support local businesses.

The graph below illustrates General Fund expenditures by category:

A two-year comparison of each General Fund expenditure category is shown below:

18

General Fund Expenditures
YearEndedlune30 , 2021
Community & economic
development
Municipal support

6.7%

6.8%
Debt service

1.2%
services

4.0%
Public safety • Fire

22.1%
Community buildings

2.5%
Public right of way

3.6% Traffic safety

2.1%
Public safety • Police

51.0%
General Fund Expenditures - Two Year Comparison

80.0 ~
C
.2
~ 60.0
:§.
c 40.0
:::,
0 E
~ 20.0

0.0 ■ 2021
■ 2020

CITY OF GARDEN GROVE
Management’s Discussion and Analysis (continued)
June 30, 2021

Other Major Governmental Fund

The Housing Successor Agency capital project fund reported a fund balance of $20.8 million as of June 30, 2021, reflecting a slight increase of $0.3 million from the previous year. The majority of the fund balance of the Housing Successor Agency fund reflected an amount due from the Successor Agency for $7.1 million, and long- term receivables from various housing organizations in the amount of $5.7 million as of June 30, 2021.

CAPITAL ASSETS

The capital assets of the City are those assets which are used in the performance of the City’s functions including infrastructure assets, buildings and facilities, furniture, machinery and equipment, land, and construction in progress. At June 30, 2021, net capital assets totaled $638.9 million fo r the governmental activities, and $164.1 million for the business-type activities respectively. Depreciation on capital assets is recognized in the government-wide financial statements. Please refer to Notes to Basic Financial Statements (Note 7) for additional information.

The table below presents comparative summa ry information on the City’s capital assets:

DEBT ADMINISTRATION

The City continued its efforts to reduce its long-term debt obligation. In addition to steadily paying down its outstanding long term obligations, the City implemented a Pension Funding Policy in August 2019 to proactively and effectively manage its unfunded pension liability. An IRC Section 115 Trust was established in November 2019 accordingly.

In November 2020, the City refunded its 2010 Water Revenues Bonds, and realized a net present value savings of $1.6 million, or 15.3% of the refunded debt.

City of Garden Grove's Capital Assets
Net of Depreciation (in millions)
Governmental
Activities
Business-type
Activities Total
2021 2020 2021 2020 2021 2020
Land 413.0$ 413.0 $ 5.1 $ 5.1 $ 418.1$ 418.1 $
Streets 155.9 155.0 - - 155.9 155.0 Storm drainage 25.1 26.6 - - 25.1 26.6 Water system - - 89.5 90.2 89.5 90.2 Sewer system - - 67.2 66.0 67.2 66.0 Buildings and improvements 25.1 26.2 0.3 0.3 25.4 26.5 Furniture, machinery & equipment 16.7 15.0 0.3 0.2 17.0 15.2 Construction in progress 3.1 5.4 1.7 0.5 4.8 5.9 Total Capital Assets 638.9$ 641.2 $ 164.1 $ 162.3 $ 803.0$ 803.5 $ 19

CITY OF GARDEN GROVE
Management’s Discussion and Analysis (continued)
June 30, 2021

The schedule of outstanding long-term debt with comparative amounts for the previous fiscal year is presented below. For additional information on the City’s long- term debt, please refer to Notes to Basic Financial Statements (Note 8).

GENERAL FUND BUDGETARY HIGHLIGHTS

General Fund appropriations were originally adopted at $133.4 million for Fiscal Year 2020-21. Final appropriations were increased by $0.3 million to $133.6 million. The additional appropriation was to fund the cost of a redistricting study as the result of the new census, the purchase of a police vehicle and the landscaping contract for the newly completed Medal of Honor bike trail.

Below is a summary of changes made to the adopted budget:

At June 30, 2021, the City’s General F und concluded the fiscal year with a net favorable variance of $44.2 million. The net favorable variance was a combination of one-time revenue not originally expected and budget savings on expenditures.

Included in the actual revenues were SLFRF money received during the year in the amount of $24.2 million, and the Coronavirus Aid, Relief, and Economic Security (CARES) Act funding that had been programmed by the City and would be carried over to the next fiscal year to complete the various projects and programs that were incorporated in the City’s fiscal years 2021-2023 biennial budget.

City of Garden Grove's Outstanding Debt
(in millions)
Governmental
Activities
Business-type
Activities Total
2021 2020 2021 2020 2021 2020
Lease revenue bonds 21.8$ 22.3 $ - $ - $ 21.8 $ 22.3$ Capital leases payable 0.1 0.2 0.1 - 0.2 0.2 Revenue bonds - - 36.4 24.4 36.4 24.4
Certificates of participation - - 2.9 3.8 2.9 3.8 Unamortized bond premium 1.3 1.3 4.4 1.4 5.7 2.7 Total Outstanding Debt 23.2$ 23.8$ 43.8 $ 29.6 $ 67.0 $ 53.4$ Original Budget 133,373,299$
Supplemental Changes 268,827
Final Budget 133,642,126$
20

CITY OF GARDEN GROVE
Management’s Discussion and Analysis (continued)
June 30, 2021

Table below shows the budget variance in each category, revenue, expenditure and transfers:

CONTACTING THE CITY’S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, customers, and investors and creditors with a general ov erview of the City’s finances and to demonstrate the City’s accountability for the money it receives. If you have questions about this report or need any additional financial information, please contact the City of Garden Grove’s Finance Department at 11222 Acacia Parkway, Garden Grove, California, 92840, phone number 714-741-5060, or e-mail [email protected].

City of Garden Grove Budget to Actual Comparison
(in millions)
Transfer & Budget
Revenue Expenditure Other Sources Variance
Final Budget 119.4 $ 133.6 $ - $
Actual 158.3 128.9 0.6
Favorable/(Unfavorable)
Budget Variance 38.9$ 4.7 $ 0.6 $ 44.2$ 21

Basic Financial
Statements
Basic Financial
Statements

This page is intentionally blank.

Primary Government
Governmental Business-type
Activities Activities Total
ASSETS
Cash and investments 239,729,363$ 88,187,833$ 327,917,196$ Cash and investments with
fiscal agents 1,564,255 15,558,211 17,122,466 Cash and investments with
pension trust 1,634,947 - 1,634,947 Taxes receivable 13,557,128 233,998 13,791,126 Accounts receivable 783,204 8,439,152 9,222,356 Interest receivable 1,017,992 377,748 1,395,740 Intergovernmental receivable 7,050,071 - 7,050,071 Internal balances 8,533,674 (8,533,674) - Inventory 429,835 7,671 437,506 Deposits and prepaid items 429,483 125,358 554,841 Notes receivable, net 30,188,400 4,041 30,192,441 Due from Successor Agency 7,054,260 - 7,054,260 Land held for resale 2,819,063 - 2,819,063 Prepaid bond insurance costs 98,898 - 98,898 Capital assets:

Land 412,953,682 5,142,500 418,096,182 Construction in progress 3,127,854 1,662,122 4,789,976 Depreciable capital assets, net 222,840,548 157,273,681 380,114,229 Total assets 953,812,657 268,478,641 1,222,291,298

DEFERRED OUTFLOWS OF RESOURCES
Unamortized loss on refunding of debt - 97,723 97,723 OPEB related items 26,237,550 3,377,977 29,615,527 Pension related items 31,945,193 4,425,796 36,370,989 Total deferred outflows 58,182,743 7,901,496 66,084,239

LIABILITIES
Accounts payable 4,897,038 6,900,582 11,797,620 Accrued liabilities 2,896,495 525,772 3, 422,267
Refundable deposits 2,687,217 1,391,388 4,078,605 Interest payable 330,927 61,937 392,864 Unearned revenue 155,492 - 155,492 Noncurrent liabilities:

Due within one year 16,071,195 2,504,776 18,575,971 Due in more than one year 57,770,731 42,005,949 99,776,680 OPEB liability 48,943,774 6,301,301 55,245,075 Net pension liability 277,337,072 32,046,089 309,383,161 Total liabilities 411,089,941 91,737,794 502,827,735

DEFERRED INFLOWS OF RESOURCES
Unamortized gain on refunding of debt - 161,039 161,039 OPEB related items 793,437 102,152 895,589 Pension related items 1,747,469 325,885 2,073,354 Total deferred inflows 2,540,906 589,076 3,129,982

NET POSITION
Net investment in capital assets 617,315,666 120,399,516 737,715,182 Restricted for:

Public safety 4,179,977 - 4,179,977 Public right of way 13,717,256 - 13,717,256 Drainage 128,954 - 128,954 Community planning and development 50,928,007 - 50,928,007 Community services 6,577,201 - 6,577,201 Municipal support and services 137,862 - 137,862 Unrestricted (94,620,370) 63,653,751 (30,966,619) Total net position 598,364,553$ 184,053,267$ 782,417,820$ The notes to basic financial statements are an integral part of this statement.

CITY OF GARDEN GROVE

STATEMENT OF NET POSITION
JUNE 30, 2021
22

Program Revenue
Operating
Charges for Grants and
Functions/programs Expenses Services Contributions
Governmental activities:

Fire 29,809,787$ 596,068$ 2,804,673$
Police 78,689,226 3,058,357 28,521,526
Traffic safety 5,947,430 1,356,413 114,378 Public right of way 18,389,135 272,442 13,742,841 Drainage 1,547,050 - -
Community buildings 4,957,639 230,336 34,612 Community services 5,250,355 682,138 - Economic development 2,594,984 - 36,506 Parks and greenbelts 2,161,318 754,604 73,994 Community planning and
development 10,520,579 4,252,437 2,993,476 Municipal support 9,359,965 3,456,379 1,423,532 Interest on long term debt 1,082,691 - - Total governmental activities 170,310,159 14,659,174 49,745,538 Business-type activities:

Water utility 36,220,147 42,245,543 -
Sewage collection 6,576,637 10,842,741 - Housing authority 39,631,198 - 41,155,458 Solid waste disposal 2,407,481 3,115,922 - Golf course 1,588,619 1,836,535 -
Total business-type activities 86,424,082 58,040,741 41,155,458 Total 256,734,241$ 72,699,915$ 90,900,996$
General revenues:

Taxes:

Sales taxes
Property taxes, levied for general purposes
Franchise taxes
Business operation taxes
Transient occupancy taxes
Motor vehicle taxes, unrestricted
Investment income
Miscellaneous
Transfers
Total general revenues and transfers
Change in net position
Net position, beginning of year
Net position, end of year
The notes to basic financial statements are an integral part of this statement.

CITY OF GARDEN GROVE

STATEMENT OF ACTIVITIES
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
23

Net (Expense) Revenue and
Changes in Net Position
Capital
Grants and Governmental Business-type
Contributions Activities Activities Total
-$ (26,409,046)$ -$ (26,409,046)$ - (47,109,343) - (47,109,343) 626,180 (3,850,459) - (3,850,459) - (4,373,852) - (4,373,852) 90,463 (1,456,587) - (1,456,587) - (4,692,691) - (4,692,691) - (4,568,217) - (4,568,217) - (2,558,478) - (2,558,478) 1,189,040 (143,680) - (143,680) - (3,274,666) - (3,274,666) - (4,480,054) - (4,480,054) - (1,082,691) - (1,082,691) 1,905,683 (103,999,764) - (103,999,764) - - 6,025,396 6,025,396 - - 4,266,104 4,266,104 - - 1,524,260 1,524,260 - - 708,441 708,441 - - 247,916 247,916 - - 12,772,117 12,772,117

1,905,683$ (103,999,764)$ 12,772,117$ (91,227,647)$

49,305,114 - 49,305,114
55,004,385 - 55,004,385
2,331,476 - 2,331,476
3,534,201 - 3,534,201
7,136,525 - 7,136,525
128,205 - 128,205
1,738,696 253,458 1,992,154
232,638 809,628 1,042,266
177,901 (177,901) -
119,589,141 885,185 120,474,326
15,589,377 13,657,302 29,246,679
582,775,176 170,395,965 753,171,141
598,364,553$ 184,053,267$ 782,417,820$
24

Housing Successor
Agency Nonmajor Total
General Capital Project Governmental Governmental
Fund Fund Funds Funds
ASSETS
Cash and cash investments 92,107,943$ 7,460,224$ 22,073,035$ 121,641,202$ Cash and cash investments with fiscal agents 46 - 1,564,209 1,564,255 Cash and investments with pension trust 1,634,947 - - 1,634,947 Taxes receivable 12,623,639 - 933,489 13,557,128 Accounts receivable 648,446 - 83,172 731,618 Interest receivable 367,618 32,165 108,613 508,396 Intergovernmental receivable 1,331,197 - 5,718,874 7,050,071 Intercity loans receivable, net 11,382,206 - - 11,382,206 Due from Successor Agency - 7,054,260 - 7,054,260 Deposits and prepaid items 89,964 - 238,457 328,421 Notes receivable, net 2,353,227 5,728,457 22,106,716 30,188,400 Land held for resale 2,300,000 519,063 - 2,819,063 Total assets 124,839,233$ 20,794,169$ 52,826,565$ 198,459,967$

LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES Liabilities:

Accounts payable 1,630,452$ 29,344$ 1,894,304$ 3,554,100$ Accrued liabilities 1,942,676 931 497,191 2,440,798 Refundable deposits 2,687,217 - - 2,687,217 Intercity loan payable 2,509,289 - - 2,509,289 Unearned revenue - - 155,492 155,492 Due to other funds 2,115,021 1,013 375,685 2,491,719 Total liabilities 10,884,655 31,288
2,922,672 13,838,615
Deferred inflows of resources:

Unavailable revenue 1,522,941 - 1,190,981 2,713,922 Total Deferred inflows 1,522,941 - 1,190,981 2,713,922 Fund balances:

Non-Spendable:

Intercity loan 8,872,917 - - 8,872,917 Prepaid items 89,964 - 238,457 328,421 Land held for resale 2,300,000 519,063 - 2,819,063 Restricted:

Public safety 90,596 - 4,064,586 4,155,182 Public right of way 280 - 12,194,919 12,195,199 Drainage - - 128,954 128,954 Community planning and development 4,038,775 20,243,818 25,703,750 49,986,343 Community services 176,535 - 6,400,666 6,577,201 Municipal support and services 47,566 - - 47,566 Pension trust 1,634,947 - - 1,634,947 Committed:

Stability reserve 22,500,000 - - 22,500,000 Assigned:

Post-employment benefits 1,000,000 - - 1,000,000 Building improvements 1,300,000 - - 1,300,000 General plan 428,622 - - 428,622 Unassigned 69,951,435 - (18,420) 69,933,015 Total fund balances 112,431,637 20,762,881 48,712,912 181,907,430 Total liabilities, deferred inflows of resources, and
fund balances 124,839,233$ 20,794,169$
52,826,565$ 198,459,967$
The notes to basic financial statements are an integral part of this statement.

CITY OF GARDEN GROVE

BALANCE SHEET

GOVERNMENTAL FUNDS
JUNE 30, 2021
25

Fund balances - total governmental funds (page 26) 181,907,430$ Capital assets 971,366,859
Accumulated depreciation (345,851,312)
2,713,922
74,493,620
Bonds payable (21,770,000)
Bond premium (1,286,662)
Capital lease payable (924)
Prepaid bond issuance costs 98,898
Accrued interest payable (330,908)
The pension liability is not due and payable in the current period and, therefore, is not reported in the balance sheet of the governmental funds.

Also, deferred inflows and outflows of resources related to pension costs are deferred and amortized in the statement of activities. This amount is the net effect of the treatment of net pension liability, deferred outflows of resources from pension contributions and deferred inflows of resources for the net difference between projected and actual earnings on pension plan investments. (240,452,674)
Net position of governmental activities 598,364,553$
The notes to basic
financial statements are an integral part of this statement.

Certain notes, grants, and accounts receivables are not available to pay for current period expenditures, and therefore are offset by deferred inflows of resources in the governmental funds.

Internal service funds are used by management to charge the costs of various city activities to individual governmental and business-like funds. The assets and liabilities of the internal service funds are included in governmental activities in the statement of net position.

The issuance of long term debt (e.g. bonds, leases) provides current financial resources to governmental funds, while the repayment of the principal of long term debt consumes the current financial resources of governmental funds.

Neither transaction, however, has any effect on net position. Also, governmental funds report the effect of premiums, discounts, and similar items when debt is issued, whereas these amounts are deferred and amortized in the statement of activities. This amount is the net effect of these differences in the treatment of lon
g term debt and related items.

The OPEB liability is not due and payable in the current period and, therefore, is not reported in the balance sheet of the governmental funds. Also, deferred inflows and outflows of resources related to OPEB costs are deferred and amortized in the statement of activities. This amount is the net effect of the treatment of OPEB liability and deferred outflows of resources from OPEB contributions. (22,523,696)
Capital assets used in governmental activities are not current financial resources, and therefore are not reported in the governmental funds balance sheet.

CITY OF GARDEN GROVE

RECONCILIATION OF BALANCE SHEET OF GOVERNMENTAL FUNDS

TO THE STATEMENT OF NET POSITION
JUNE 30, 2021
Amounts reported for governmental activities in the statement of net position are different because:
26

CITY OF GARDEN GROVE

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES

GOVERNMENTAL FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
Housing Successor
Agency Nonmajor Total
General Capital Project Governmental Governmental
Fund Fund Funds Funds
REVENUES:

Taxes 116,343,879$ -$ 1,699,899$ 118,043,778$ Licenses and permits 2,371,876 - 47,538 2,419,414 Fines, forfeits and penalties 2,120,682 - 738,138 2,858,820 Investment earnings 19,190 225,656 547,766 792,612 Charges for current services 7,938,035 - 3,731,491 11,669,526 From other agencies 27,210,933 - 20,518,391 47,729,324 Other revenues 2,427,898 271,697 303,517 3,003,112 Total revenues 158,432,493 497,353 27,586,740 186,516,586 EXPENDITURES:

Current:

Fire 28,470,151 - - 28,470,151 Police 65,733,881 - 2,298,549 68,032,430 Traffic safety 2,702,044 - 2,294,735 4,996,779 Public right of way 4,741,813 - 12,801,652 17,543,465 Community buildings 3,163,726 - ‐                         3,163,726 Community services 3,867,459 - 971,696 4,839,155 Economic development 2,236,894 - 372,361 2,609,255 Parks and greenbelts 1,348,492 - 1,258,476 2,606,968 Community planning and development 6,440,473 226,393 3,920,771 10,587,637 Municipal support 8,572,019 - 111,452 8,683,471 Debt service:

Principal retirement 493,697 - - 493,697 Interest 1,111,907 - - 1,111,907 Total expenditures 128,882,556 226,393 24,029,692 153,138,641 Excess of revenues
over expenditures 29,549,937 270,960 3,557,048 33,377,945 OTHER FINANCING SOURCES (USES):

Transfers in 948,996 - 397,369 1,346,365 Transfers out (397,369) - (231,386) (628,755) Total other financing (uses) 551,627 - 165,983 717,610 Net change in fund balances 30,101,564 270,960 3,723,031 34,095,555 Fund balances, beginning of year 82,330,073 20,491,921 44,989,881 147,811,875 Fund balances, end of year 112,431,637 $ 20,762,881 $ 48,712,912 $ 181,907,430 $ The notes to basic financial statements are an integral part of this statement. 27

Net change in fund balances - total governmental funds (page 28) 34,095,555$ Capital outlay 12,451,936
Depreciation expense (14,429,908)
Disposition of capital assets (281,958)
Bond principal payment 490,000
Capital lease principal payments 3,697
Change in accrued interest 8,167
Other debt related items 50,187
(1,827,137)
2,298,551
(3,871,722)
(13,397,991)
Change in net position of governmental activities 15,589,377$ The notes to basic financial statements are an integral part of this statement.

The issuance o f long-term debt prov ides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. This amount is the net effect of these differences in the treatment of long-term debt and related items.

Some revenues in statement of activities that do not provide current financial resources are not reported as revenues in the funds.

Internal service funds are used by management to charge the costs of certain activities, such as workers compensation, fleet management, employee benefits, telephones, information systems, risk management and warehouse operations to individual funds. The net expenses of these internal service funds are reported with governmental activities.

OPEB costs do not require the use of current financial resources and, therefore, are not reported as expenditures in the governmental funds.

Pension costs do not require the use of current financial resources and, therefore, are not reported as expenditures in the governmental funds.

Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives as depreciation expense. This is the amount by which depreciation expenses exceeded capital outlays in the current period.

CITY OF GARDEN GROVE

RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE FISCAL YEAR ENDED JUNE 30, 2021
Amounts reported for governmental activities in the statement of activities are different because:
28

This page is intentionally blank.

Governmental
Activities -
Water Sewage Housing Total Nonmajor Total Enterprise Internal Service Utility Collection Authority Funds Funds Funds
ASSETS
Current assets:

Cash and cash investments 26,968,573 $ 46,206,460 $ 2,883,148 $ 12,129,652 $ 88,187,833 $ 118,088,161 $ Cash and cash investments with fiscal agents 15,558,211 - - - 15,558,211 - Taxes receivable - 38,123 - 195,875 233,998 - Accounts receivable 6,807,449 1,434,417 8,120 189,166 8,439,152 51,586 Interest receivable 116,671 199,224 11,012 50,841 377,748 509,596 Due from other funds - - - - - 2,992,088 Inventory - - - 7,671 7,671 429,835 Prepaid items 1,187 13,607 13,319 97,245 125,358 101,062 Total current assets 49,452,091 47,891,831 2,915,599 12,670,450 112,929,971 122,172,328 Noncurrent assets:

Intercity loans receivable, net - - - - - 4,511,819 Notes receivable - 4,041 - - 4,041 - Capital assets:

Land 1,471,805 537,984 - 3,132,711 5,142,500 - Construction in progress 801,002 861,120 - - 1,662,122 577,976 Depreciable capital assets, net 89,886,485 67,223,197 14,757 149,242 157,273,681 12,828,561 Total noncurrent assets 92,159,292 68,626,342 14,757 3,281,953 164,082,344 17,918,356 Total assets 141,611,383 116,518,173 2,930,356 15,952,403 277,012,315 140,090,684

DEFERRED OUTFLOWS OF RESOURCES
Unamortized loss on refunding of debt 97,723 - - - 97,723 - OPEB related items 2,104,035 421,222 626,072 226,648 3,377,977 1,089,703 Pension related items 2,246,921 1,066,047 830,722 282,106 4,425,796 1,058,958 Total deferred outflows 4,448,679 1,487,269 1,456,794 508,754 7,901,496 2,148,661

LIABILITIES
Current liabilities:

Accounts payable 5,921,294 719,623 17,546 242,119 6,900,582 1,342,938 Accrued liabilities 217,115 229,748 55,300 23,609 525,772 455,697 Refundable deposits 507,853 - 329,005 554,530 1,391,388 - Interest payable 37,682 24,255 - - 61,937 19 Due to other funds 206,403 82,958 51,682 21,750 362,793 137,576 Current portion of long-term obligations
Capital leases - - - 25,498 25,498 113,039 Accrued compensated absences 594,603 129,027 - - 723,630 7,870,625 Claims payable - - - - - 7,517,241 Long-term debt 1,068,192 687,456 - - 1,755,648 - Total current liabilities 8,553,142 1,873,067 453,533 867,506 11,747,248 17,437,135 Noncurrent liabilities:

Noncurrent portion of long-term obligations:

Capital leases - - - 83,116 83,116 - Accrued compensated absences 18,391 3,991 - - 22,382 243,422 Claims payable - - - - - 35,040,013 Intercity loans payable 11,382,206 - - - 11,382,206 2,002,530 Long-term debt 28,342,104 13,558,347 - - 41,900,451 - Net pension liability 16,269,395 7,718,981 6,015,057 2,042,656 32,046,089 7,667,658 OPEB liability 3,924,864 785,738 1,167,903 422,796 6,301,301 2,032,715 Total noncurrent liabilities 59,936,960 22,067,057 7,182,960 2,548,568 91,735,545 46,986,338 Total liabilities 68,490,102 23,940,124 7,636,493 3,416,074 103,482,793 64,423,473

DEFERRED INFLOWS OF RESOURCES
Unamortized gain on refunding of debt - 161,039 - - 161,039 - OPEB related items 63,627 12,738 18,933 6,854 102,152 32,953 Pension related items 165,448 78,496 61,169 20,772 325,885 77,974 Total deferred inflows 229,075 252,273 80,102 27,626 589,076 110,927

NET POSITION
Net investment in capital assets 62,846,719 54,215,459 14,757 3,322,581 120,399,516 13,293,498 Unrestricted 14,494,166 39,597,586 (3,344,202) 9,694,876 60,442,426 64,411,447 Total net position 77,340,885$ 93,813,045$ (3,329,445)$ 13,017,457$ 180,841,942 77,704,945$ Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds 3,211,325 Net position of business-type activities 184,053,267$
The notes to basic financial statements are an integral part of this statement. - Enterprise Funds

CITY OF GARDEN GROVE

STATEMENT OF NET POSITION

PROPRIETARY FUNDS
JUNE 30, 2021
Business-Type Activities
29

Water Sewage
Utility Collection

Operating revenues:

Charges for services -$ -$
Water sales 42,153,357 -
Section 8 grant revenue - -
Solid waste disposal fees - -
Property assessments - 3,635,698
Sewer user fees - 7,207,043
Other 92,186 -
Total operating revenues 42,245,543 10,842,741

Operating expenses:

Salaries and benefits 7,894,814 2,478,471
Contractual services 7,591,654 1,522,551
Liability claims - -
Materials and supplies 604,533 112,896
Water production expenses 15,348,165 -
Housing - -
Golf course operations - -
Depreciation and amortization 3,769,423 1,838,358 Total operating expenses 35,208,589 5,952,276

Operating income 7,036,954 4,890,465

Nonoperating revenues (expenses):

Investment income 128,145 25,324
(Loss) on disposal of assets (48,048) (241,147) Other nonoperating revenues 11,989 -
Interest expense (1,036,866) (527,144)
Total nonoperating (expenses) revenues (944,780) (742,967) Income before transfers and capital contributions 6,092,174 4,147,498 Capital contributions - -
Transfers in - -
Transfers out (47,132) -
Change in net position 6,045,042 4,147,498
Total net position (deficit), beginning of year 71,295,843 89,665,547 Total net position (deficit), end of year 77,340,885$ 93,813,045$

Adjustment to reflect the consolidation of internal service fund activities to enterprise funds.

Change in net position of business-type activities.

The notes to basic financial statements are an integral part of this statement. - Enterprise Funds

CITY OF GARDEN GROVE

STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION

PROPRIETARY FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
Business-Type Activities
30

Governmental
Activities -
Housing Total Nonmajor Total Enterprise Internal Service Authority Funds Funds Funds
-$ 1,836,535$ 1,836,535 $ 69,596,490 $ - - 42,153,357 - 41,123,464 - 41,123,464 -
- 2,620,353 2,620,353 - - 495,569 4,131,267 - - - 7,207,043 - 31,994 666,870 791,050 772 41,155,458 5,619,327 99,863,069 69,597,262

2,641,738 1,267,800 14,282,823 52,819,817 153,514 1,132,600 10,400,319 1,686,037 - - - 9,228,816 88,330 7,081 812,840 1,542,531 - - 15,348,165 - 36,641,340 - 36,641,340 -
- 1,578,407 1,578,407 - 3,690 10,212 5,621,683 1,783,782 39,528,612 3,996,100 84,685,577 67,060,983

1,626,846 1,623,227 15,177,492 2,536,279

38,757 61,232 253,458 919,611 (102,586) -
(391,781) (551,243)
- - 11,989 - - - (1,564,010) (29,138) (63,829) 61,232 (1,690,344) 339,230 1,563,017 1,684,459 13,487,148 2,875,509 - - - 295,364 - - - 47,132 - - (47,132) (717,610) 1,563,017 1,684,459 13,440,016 2,500,395 (4,892,462) 11,332,998 75,204,550

(3,329,445)$ 13,017,457$ 77,704,945$
217,286
13,657,302$
Business-Type Activities
- Enterprise Funds
31

Water Sewage
Utility Collection

CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers and user departments 41,400,619 $ 10,907,278 $ Payments to suppliers (21,485,148) (1,894,053)
Payments to employees (6,499,346) (2,708,863)
Payments for employee benefits - -
Net cash provided by operating activities 13,416,125 6,304,362

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Cash received from other funds 23,608 3,839
Cash paid to other funds (719,742) -
Net cash (used) provided by noncapital financing activities (696,134) 3,839

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Purchases of capital assets (3,875,497) (3,559,050) Proceeds from sale of capital assets - - Payment on refunded debt (10,939,689) -
Issuance of capital debt 26,615,757 -
Principal paid on capital debt (935,000)           (590,000) Interest paid on capital debt (1,072,688) (611,626)

Net cash (used) by capital and related financing activities 9,792,883 (4,760,676)

CASH FLOWS FROM INVESTING ACTIVITIES
Interest earnings 298,958 631,917
Increase (decrease) in fair value of investments (206,356) (625,991) Net cash provided by investing activities 92,602 5,926 Net (decrease) increase in cash and cash equivalents 22,605,476 1,553,451 Cash and cash equivalents, beginning of year 19,921,308 44,653,009 Cash and cash equivalents, end of year 42,526,784 $ 46,206,460 $ The notes to basic financial statements are an integral part of this statement.

CITY OF GARDEN GROVE

STATEMENT OF CASH FLOWS

PROPRIETARY FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
Business-Type Activities
- Enterprise Funds
32

Governmental
Activities -
Housing Total Nonmajor Total Enterprise Internal Service Authority Funds Funds Funds
40,834,393$ 5,858,043$ 99,000,333$ 69,648,468$ (37,035,405) (2,610,933) (63,025,539) (11,205,550) (2,561,160) (880,255) (12,649,624) (14,312,113) - - - (39,088,335) 1,237,828 2,366,855 23,325,170 5,042,470

- 3,324 30,771 2,945,033 (10,311) - (730,053) (844,096) (10,311) 3,324 (699,282) 2,100,937

- (31,725) (7,466,272) (2,203,145) - - - 160,564 - - (10,939,689) - - - 26,615,757 - - (19,115) (1,544,115) (112,268) - (139) (1,684,453) (29,158)

- (50,979) 4,981,228 (2,184,007)

33,785 156,485 1,121,145 1,632,575 (2,521) (108,276) (943,144) (1,024,961) 31,264 48,209 178,001 607,614 1,258,781 2,367,409 27,785,117 5,567,014 1,624,367
9,762,243 75,960,927 112,521,147
2,883,148$ 12,129,652$ 103,746,044$ 118,088,161$ (continued)
Business-Type Activities
- Enterprise Funds
33

Water Sewage
Utility Collection
Reconciliation of operating income to net cash
provided by operating activities:

Operating income 7,036,954$ 4,890,465$
Adjustments to reconcile operating income
to net cash provided by operating activities:

Depreciation and amortization expense 3,769,423 1,838,358 Interest on capital debt - -
Other nonoperating revenues (expenses) (35,143) (28,183) Decrease (increase) in taxes receivable - 4,216 Decrease (increase) in accounts receivable (862,728) 59,721 Decrease (increase) in notes receivable - 600 Decrease (increase) in inventory - -
Decrease (increase) in prepaid expenses 676 6,758 Increase (decrease) in accounts payable 2,086,870 (290,284) Increase (decrease) in accrued compensated absences 612,994 133,018 Increase (decrease) in accrued liabilities 18,790 53,103 Increase (decrease) in refundable deposits 5,815 - Increase (decrease) in other current liabilities - - Increase (decrease) in claims payable - - Increase (decrease) in OPEB liability and related
changes in deferred outflows and inflows of resources 402,636 29,076 Increase (decrease) in net pension liability and related changes in deferred outflows and inflows of resources 379,838 (392,486) Total adjustments 6,379,171 1,413,897
Net cash provided by operating activities 13,416,125$ 6,304,362$ Non-cash capital and related financing activities
Refunding of capital related debt 10,862,923$
Issuance of capital lease
The notes to basic financial statements are an integral part of this statement.

CITY OF GARDEN GROVE

STATEMENT OF CASH FLOWS

PROPRIETARY FUNDS (CONTINUED)
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
Business-Type Activities
- Enterprise Funds
34

Governmental
Activities-
Housing Total Nonmajor Total Enterprise Internal Service Authority Funds Funds Funds
1,626,846$ 1,623,227 $ 15,177,492 $ 2,536,279 $ 3,690 10,212 5,621,683 1,783,782 - 139 139 - (102,586) - (165,912) (670,478) - (155,895) (151,679) - (2,062) 5,581 (799,488) 51,206 - - 600 - - 1,063 1,063 26,108 21,149 (45,832) (17,249) 110,205 (41,680) 183,808 1,938,714 1,720 - - 746,012 108,156 (15,785) (62,851) (6,743) 297,315 65,107 389,030 459,952 34,832 (397,429) - (397,429) - - - - 1,025,096 85,664 35,450 552,826 219,466 (5,086) 382,923 365,189 (481,217) (389,018) 743,628 8,147,678 2,506,191 1,237,828$ 2,366,855 $ 23,325,170 $ 5,042,470 $ 127,729$
Business-Type Activities
- Enterprise Funds
35

CITY OF GARDEN GROVE

STATEMENT OF FIDUCIARY NET POSITION

CITY OF GARDEN GROVE AS SUCCESSOR AGENCY

TO THE GARDEN GROVE REDEVELOPMENT AGENCY

PRIVATE PURPOSE TRUST FUND
JUNE 30, 2021
ASSETS
Current assets:

Cash and cash investments 26,006,060$
Cash and cash investments with fiscal agents 4,089,955
Accounts receivable 10,000
Interest receivable 112,128
Total current assets 30,218,143
Noncurrent assets:

Prepaid bond insurance costs 457,725
Land held for resale 25,249,639
Total noncurrent assets 25,707,364
Total assets 55,925,507

DEFERRED OUTFLOWS OF RESOURCES
Unamortized loss on refunding of debt 285,418
Total deferred outflows 285,418

LIABILITIES
Current liabilities:

Accounts payable 124,359
Accrued liabilities 8,247
Interest payable 666,325
Current portion of long-term obligations 5,676,557
Total current liabilities 6,475,488
Noncurrent liabilities:

Noncurrent portion of long-term obligations:

Long-term debt 65,202,566
Total noncurrent liabilities 65,202,566
Total liabilities 71,678,054

NET POSITION
Held in trust for redevelopment dissolution (15,467,129)$ The notes to basic financial statements are an integral part of this statement. 36

CITY OF GARDEN GROVE

STATEMENT OF CHANGES IN FIDUCIARY NET POSITION

CITY OF GARDEN GROVE AS SUCCESSOR AGENCY

TO THE GARDEN GROVE REDEVELOPMENT AGENCY

PRIVATE PURPOSE TRUST FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2021

ADDITIONS
Taxes 11,170,386$
Investment earnings 560,905
Other revenues 12,000
Total additions 11,743,291

DEDUCTIONS
Program expenses 13,365
Administrative expenses 155,379
Interest and fiscal agency expenses 2,713,975
Total deductions 2,882,719
CHANGE IN NET POSITION 8,860,572
NET POSITION, BEGINNING OF YEAR (24,327,701)
NET POSITION, END OF YEAR (15,467,129)$
The notes to basic financial statements are an integral part of this statement. 37

This page is intentionally blank.

CITY OF GARDEN GROVE

NOTES TO BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2021
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. Reporting Entity
a.
b.

The City of Garden Grove (the “City”) was incorporated June 18, 1956 as a general law full- service city. The City operates under a council-manager form of government and provides the following services: public safety (police, fire, and paramedics), highways and streets, social services, culture and recreation, parks, planning, zoning, housing, water, solid waste collection and disposal, sewage services and general administration. On May 10, 2016, the City of Garden Grove adopted Ordinance No. 2866 changing the City’s current at-large system of electing City Council Members to a by-district system. It took effect in fiscal year 2016-2017.

The Mayor is elected at-large. City Council members are elected by six districts, and he or she must reside within the designated district boundary.

Accounting principles, generally accepted in the United States of America, require that these financial statements present the City (the primary government) and its component units.

Component units generally are legally separate entities for which a primary government is financially accountable. Financial accountability ordinarily involves meeting both of the following criteria: the primary government is accountable for the potential component unit (e.g. the primary government appoints the voting majority of its board) and the primary government is able to impose its will upon the potential component unit, or there is a possibility that the potential component unit may provide specific financial benefits or impose specific financial burdens on the primary government. The component units discussed in this note are included in the City’s reporting entity because of the significance of their operational or financial relationships with the City.

Blended com
ponent units:

The Garden Grove Housing Authority (the “Housing Authority”) was established in October 1975, pursuant to the provisions of the Housing and Community Development Act of 1974 and is reported as an enterprise fund as if it were part of the primary government because the governing board is comprised of the City Council, although acting in a different capacity, and two Housing Authority tenants. The Housing Authority governing board approves the Housing Authority budget and the City provides staffing.

The Garden Grove Sanitary District (the “Sanitary District”) began its operations in 1924 as a special district operating under the authority of the State of California. The Health and Safety Code of California (the Sanitary District Act of 1923) is the governing law.

The Garden Grove Sanitary District provides the City of Garden Grove, a portion of the City of Santa Ana and County of Orange unincorporated areas with sewer maintenance services including cleaning of sewage collection line and inspection of sewage lines built within the district by developers. Garden Grove has an agreement with Republic Services to provide an exclusive franchise for Solid Waste Handling Services for residents and commercial establishments within the Garden Grove Sanitar y District. The
district became a subsidiary district and component unit of the City of Garden Grove on May 30, 1997. The Sanitary District is reported as two enterprise funds, the Sewage Collection enterprise fund and Solid Waste Disposal enterprise fund as if it were part of the primary government because the City Council, although acting in a different capacity, is the governing board. Council members approve the Sanitary District budget and the City provides staffing.
38

CITY OF GARDEN GROVE

NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2021
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

1. Reporting Entity (continued)
c.

2. Government-wide and Fund Financial Statements

3. Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. Under the economic resources measurement focus, all (both current and long-term) economic resources and obligations of the reporting government are reported in the government-wide financial statements. Basis of accounting refers to when revenues and expenses are recognized in the accounts and reported in the financial statements. Under the accrual basis of accounting, revenues, expenses, gains, losses, assets, and liabilities resulting from exchange and exchange-like transactions are recognized when the exchange takes place. Expenditure driven grants are recognized as revenue when the qualifying expenditures have been incurred and all other grant requirements have been met. Grant funds received before the revenue recognition criteria have been met are reported as unearned revenues.

The Garden Grove Public Financing Authority (the "Authority") was established on June 22, 1993 as a joint powers agency organized under the laws of the State of California.

The Authority was formed to assist in the financing of public and capital improvements.

The Authority’s financial data and transactions are included within enterprise funds. The Authority is administered by the Board who are the members of the City Council and the Mayor. Council members approve the Authority budget and the City provides staffing.

Separate reports are not issued for the Garden Grove Housing Authority, the Garden Grove Sanitary District, or the Garden Grove Public Financing Authority.

All components of the reporting entity are reported on a July 1 through June 30 fiscal year.

The government-wide financial statements (i.e. the statement of net position and the statement of activities) report information on all of the non-fiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support.

The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment, 2) operating grants and contributions that are restricted to meeting the operational requirement of a particular function or segment, and 3) capital grants and contributions that are restricted to meeting the capital requirement of a particular function or segment and other miscellaneous revenues that directly benefit a particular function. Taxes and other items not properly included among program revenues are reported instead as general revenues.

Separate financial statements are provided for governmental funds, proprietary funds and the fiduciary fund. Major governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. 39

CITY OF GARDEN GROVE

NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2021
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

3. Housing Authority Fund
The Housing Authority Fund accounts for revenues and expenses pertaining to the Federal Section 8 Housing Program.

Housing Successor Agency Capital Project Fund
Capital projects for low and moderate income housing are accounted for in this fund.

Water Utility Fund
The purpose of this fund is to account for the City’s water system. Resources of the fund are applied to construction, operation, maintenance and debt service obligations of the water system. Financing is provided by revenue of the water utility.

Sewage Collection Fund
The Garden Grove Sanitary District comprises two funds, the Sewage Collection Fund and the Solid Waste Disposal Fund. Resources of the Sewage Collection Fund are applied to the operation and maintenance of the City’s sewer system.

The General Fund is the government’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in other funds.

Measurement Focus, Basis of Accounting, and Financial Statement Presentation (continued)
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as in accrual accounting. However, debt service expenditures are recorded only when payment is due.

Property taxes, franchise taxes, licenses, revenues from other agencies and interest associated with the current fiscal year are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal year. All other revenue items are considered to be measurable and available only when cash is received by the government.

The City reports the following major governmental and enterprise funds:

General Fund
40

CITY OF GARDEN GROVE

NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2021
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

3. Additionally, the City reports the following fund types:

The Private-Purpose Trust Fund accounts for the fiduciary responsibilities that are assigned to the Successor Agency pursuant to the Dissolution Act.

As a general rule the effect of interfund activity has been eliminated from the government- wide financial statements. Exceptions to this general rule are payments-in-lieu of taxes and other charges between the government’s enterprise funds and various other governmental funds. Elimination of these charges would distort the direct costs and program revenues reported for the function concerned.

Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided; 2) fines, forfeitures and penalties; 3) grants and contributions that are restricted to meeting the operational or capital requirement of a particular function; and 4) other miscellaneous revenues that directly benefit a particular function and do not fit into any other category. General revenues include all taxes, inv
estment income, and gain on sale of assets.

Proprietary funds distinguish operating revenues and expenses from non-operating items.

Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations.

The principal operating revenues of the enterprise funds and internal service funds are charges to customers for sales and services. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation of capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses.

When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, then unrestricted resources as they are needed.

Private-Purpose Trust Fund
Measurement Focus, Basis of Accounting, and Financial Statement Presentation (continued)
Nonmajor Enterprise Funds
Other nonmajor enterprise funds consists of the Solid Waste Disposal Fund and the Golf Course Fund. The Solid Waste Disposal Fund accounts for the operation of trash and solid waste collections, and disposal services. The Golf Course Fund was established to account for the operations of the Willowick Golf Course.

Internal Service Funds
The internal service funds account for workers’ compensation, fleet management, employee benefits, information systems, warehouse operations, telephone system, risk management, and communication replacement services provided to City departments on a cost reimbursement basis.
41

CITY OF GARDEN GROVE

NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2021
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

4. Assets, Liabilities, and Net Position or Fund Balance a.
b.
c.

Utility accounts are billed on a bi-monthly basis. Receivables for water and sewer are recorded when consumption is billed. Unbilled receivables are recorded at fiscal year- end to adjust for the billing cycle and are included as accounts receivable in the Water and Sewer Funds. Sanitary refuse collection accounts are billed quarterly by the refuse hauler and payments are received by the refuse hauler.

Taxes Receivable
Property taxes in California are levied in accordance with Article 13A of the State Constitution at one percent of county-wide assessed valuations. This one percent is allocated pursuant to state law to appropriate units of local government. A voter- approved property tax of eight cents per hundred dollars actual value is levied against all property in the City for the purpose of providing emergency medical services.

Furthermore, the voters approved a one-cent sale tax measure that commits 100% of the revenue to the City.

De
posits and Investments
The City pools idle cash from all funds in order to maximize income from investment activities. Investments are recorded on the City’s books at fair value (quoted market price or best available estimate thereof). Interest income on investments is allocated to individual funds on the basis of monthly cash and investment balances except for the Employee Benefits, Warehouse Operations, and Telephone System Internal Service Funds by management decision.

The City’s cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments with original maturities of three months or less from the date of acquisition.

Receivables and Pa
yables
Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either “due to/from other funds” (i.e., the current portion of inter fund loans) or “intercity loan receivable/payable” (i.e., the non-current portion of inter fund loans). All other outstanding balances between funds are reported as “due to/from other funds”. Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as “internal balances”.

Intercity loans receivable, as reported in the fund financial statements, are offset by a non-spendable fund balance in applicable governmental funds to indicate that they are not in spendable form.

The City Council adopted a Pension Funding Policy in 2019. Accordingly, an Internal Revenue Services Section 115 Trust was established to prefund pension obligations. The trust is a tax-exempt irrevocable trust, trust assets are to be used exclusive for payment of pension liabilities. Assets held in the trust are reported as restricted cash investments in the General Fund.
42

CITY OF GARDEN GROVE

NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2021
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

4. Assets, Liabilities, and Net Position or Fund Balance (continued) c.

Lien Date: January 1
Levy Date: July 1
Due Date: First Installment - November 1
Second Installment - February 1
Delinquent Date: First Installment - After December 10
Second Installment - After April 10
November 13, 2020 7% - 10%
November 25, 2020 5% - 10%
December 23, 2020 30% - 35%
January 14, 2021 1% - 5%
March 11, 2021 5% - 7%
April 22, 2021 30% - 35%
May 20, 2021 1% - 5%
July 15, 2021 1% - 2% (Collections through June 30)
d.
e.

Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements.

Capital Assets
Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., streets, sidewalks, medians, traffic signals, storm drains) are reported in the applicable governmental or business-type activities columns in the government-wide financial statements and in the proprietary fund and fiduciary fund financial statements.

The government defines capital assets as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of two years. Such assets are capitalized at cost. Donated capital assets are recorded at acquisition value at the date of donation.

The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized.

Taxes Receivable
(continued)
The property tax calendar is as follows:

Taxes are collected by Orange County, and are remitted to the City periodically as follows (dates and percentages may vary slightly from year to year):

Inventory, Prepaid Items, and Land Held for Resale
Inventory is valued at cost using the first in, first out (FIFO) method. Inventory in the proprietary funds consists of expendable supplies held for future consumption. The cost is recorded as an expense as inventory items are consumed.

Land held for resale is valued at lower of cost or estimated net realizable value, determined upon execution of a disposition and development agreement, at June 30, 2021 and is located in the General Fund, Housing Successor Agency Capital Projects Fund, and the Successor Agency Trust Fund.

In the governmental fund statements, property tax revenue is recognized in the fiscal year for which taxes have been levied, provided that the revenue is collected in the current
period or will be collected within 60 days thereafter.
43

CITY OF GARDEN GROVE

NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2021
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

4. Assets, Liabilities, and Net Position or Fund Balance (continued) e.

Assets Years
Buildings3 0
Building improvements 20
Street infrastructure:

Pavement 30
Curbs & gutters 50
Sidewalks 50
Medians 50
Traffic signals 20
Walls 50
Driveways5 0
Storm drain infrastructure 50
Water infrastructure:

Fire hydrants 45
Pump stations 10
Reservoirs 65
Water mains 77
Water meters 25
Water pumps & meters 20
Wells 40
Sewer infrastructure 60
Vehicles 3-20
Furniture and equipment 10
f.

Capital Assets (continued)
Major outlays for capital assets and improvements are capitalized as projects when constructed. Prior to the implementation of GASB 89, the net interest costs incurred in the financing of projects during the construction period were only capitalized in the enterprise funds. Interest incurred during the construction phase of capital assets of business-type activities is reflected in the capitalized value of the asset constructed, net of interest earned on the invested proceeds of tax-exempt debt over the same period.

Plant, infrastructure, and equipment of the primary government is depreciated using the straight line method over the following estimated useful lives:

Deferred Outflows
/Inflows of Resources
In addition to assets, the statement of net position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so, will not be recognized as an outflow of resources (expense/expenditure) until then. The City has three types of items that qualify for reporting in this category. Two of the items are the deferred charge from pension- related items and deferred charges related to OPEB. The other item is the unamortized loss on refunding of debt which is reported in the government-wide statement of net position, proprietary funds’ statement of net position and statement of fiduciary net position. A deferred charge on refunding results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. 44

CITY OF GARDEN GROVE

NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2021
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

4. Assets, Liabilities, and Net Position or Fund Balance (continued) f.
g.
h.
i. Fair Value Measurements
Certain assets and liabilities are required to be reported at fair value. The fair value framework provides a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of fair value hierarch
y are described as follows:

Level 1 - Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly and fair value is determined through the use of models or other valuation methodologies including:

Deferred Outflows
/Inflows of Resources (continued)
In addition to liabilities, the statement of net position or balance sheet of governmental funds will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so, will not be recognized as an inflow of resources (revenue) until that time. The City has four types of items which qualify for reporting in this category. Two of the items are deferred items from pension-related items and deferred charges related to OPEB. The third item, unamortized gain on refunding of debt, is presented on the government-wide statement of net position and on the proprietary funds’ statement of net position. The fourth item, unavailable revenue, is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues from notes, accounts, and grant receivables. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available.

Accrued Com
pensated Absences
The City accounts for compensated absences (unpaid vacation, annual leave, comp time and sick leave) in an internal service (Employee Benefits) fund. A calculated fringe benefit rate, which includes accrued compensated absences, is applied to all labor charges. The resulting funds are deposited into the Employee Benefits internal service fund and are set aside for corresponding liabilities.

Lon
g-Term Obligation
In the government-wide financial statements, proprietary fund and fiduciary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund and fiduciary fund type statements of net position. Bond premiums and discounts, as well as prepaid insurance costs related to bond issuance costs, are deferred and amortized over the life of the bonds. Bonds payable are reported net of the applicable bond premium or discount. Prepaid insurance costs related to bond issuance costs are reported as prepaid insurance costs and amortized over the term of the related debt.
45

CITY OF GARDEN GROVE

NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2021
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

4. Assets, Liabilities, and Net Position or Fund Balance (continued) i.
•
•
•
j.

1. Government-wide Financial Statements
•
•
•

2. Fund Balances
• Nonspendable Fund Balance – includes amounts that are (a) not in spendable form, or (b) legally or contractually required to be maintained intact. The “not in spendable form” criterion includes items that are not expected to be converted to cash, for example: inventories, prepaid amounts, and long-term notes receivable.

In the government-wide financial statements, net position is classified in the following categories:

Net Investment in Capital Assets – This category groups all capital assets into one component of net position. Accumulated depreciation on these assets and the outstanding principal of related debt reduce this category.

Restricted Net Position – This category consists of restricted assets reduced by liabilities related to those assets.

Unrestricted Net Position – This category represents the net position of the City that are not externally restricted for any project or other purpose.

Restricted resources are used first to fund appropriations.

As prescribed by GASB Statement No. 54, governmental funds report fund balance in classifications based primarily on the extent to which the City is bound to honor constraints on the specific purposes for which amounts in the funds can be spent.

As of June 30, 2021, fund balance for governmental funds are made up of the followings:

Classification of Net Position and Fund Balances
Fair Value Measurements
(continued)
Quoted prices for similar assets or liabilities in active markets; Quoted prices for identical or similar assets or liabilities in markets that are inactive; inputs other than quoted prices that are observable for the asset or liability;
Inputs that are derived principally from or corroborated by observable market data b
y correlation or other means.

Level 3 - Inputs to the valuation methodology are unobservable and significant to the fair value measurement. These unobservable inputs reflect the City’s own assumptions about the inputs market participants would use in pricing the asset or liability (including assumptions about risk). These unobservable inputs are developed based on the best information available in the circumstances and may include the City’s own data. 46

CITY OF GARDEN GROVE

NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2021
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

4. Assets, Liabilities, and Net Position or Fund Balance (continued) j.

2. Fund Balances (continued)
•
•
•
•
k.
l.

Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures.

Accordingly, actual results could differ from those estimates.

Pensions
For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Plan and additions to/deductions from the Plan’s fiduciary net position have been determined on the same basis. For this purpose, benefit payments (including refunds of employee contributions) are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value.

Classification of Net Position and Fund Balances (continued) Restricted Fund Balance – includes amounts that can be spent only for the specific purposes stipulated by external resource providers, constitutionally or through enabling legislation. Restrictions may effectively be changed or lifted only with the consent of resource providers.

Committed Fund Balance – includes amounts that can only be used for the specific purposes determined by a formal action of the City’s highest level of decision-making authority, the City Council. Commitments may be changed or lifted only by the City taking the same formal action via an ordinance that imposed the constraint originally.

Assigned Fund Balance – comprises amounts intended to be used by the City for specific purposes that are neither restricted nor committed. Intent is expressed by the City Council to which the City Council has delegated the authority to assign amounts to be used for specific purposes.

Unassigned Fund Balance – is the residual classification for the General Fund and includes all amounts not contained in the other classifications. Unassigned amounts are technically available for any purpose. The General Fund is the only fund that reports a positive unassigned fund balance amount.

In circumstances when an expenditure is made for a purpose for which amounts are available in multiple fund balance classifications, fund balance is depleted in the order of restricted, committed, assigned, and unassigned. 47

CITY OF GARDEN GROVE

NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2021
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

4. Assets, Liabilities, and Net Position or Fund Balance (continued) l.

Valuation Date June 30, 2019
Measurement Date June 30, 2020
Measurement Period July 1, 2019 - June 30, 2020
m.

Valuation Date June 30, 2019
Measurement Date June 30, 2020
Measurement Period July 1, 2019 - June 30, 2020
B. STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY

1. The legal level of budgetary control is considered to be at the fund level since management can reassign resources within a fund without special approval from City Council. The City Manager is authorized to transfer budgeted amounts between departments within any fund; however, any revisions which alter the total appropriations of any fund must be approved by City Council. During the year ended June 30, 2021, the Street Lighting and Park Maintenance Special Revenue Funds reported expenditure in excess of appropriations of $174,590 and $13,065, respectively.

Under Article XIIIB of the California Constitution (the GANN Spending Limitation initiative), the City is restricted as to the amount of annual appropriations, and if certain proceeds of taxes exceed allowed appropriations, the excess must be refunded to the taxpayers either through revised tax rates or revised fee schedules.

The City budget report is prepared under the direction of the City Manager in accordance with generally accepted accounting principles (GAAP) and the requirements of Municipal Code Section 2.08.150. Annual budgets are legally adopted for the General Fund, special revenue funds, and capital projects funds. These funds are budgeted based on the modified accrual basis of accounting and include proposed expenditures and the means of financing them. The City Council approves the total budgeted appropriations and any amendments to total appropriations which may be required during the year. Revenues are budgeted by source, and expenditures are budgeted by program.

Pensions
(continued)
GASB 68 requires that the reported results must pertain to liability and asset information within certain defined timeframe. For this report, the following timeframes are used.

Other Post-Em
ployment Benefits (OPEB)
For purposes of measuring the OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense have been determined by an independent actuary. For this purpose, benefit payments are recognized when currently due and payable in accordance with the benefit terms.

Generally accepted accounting principles require that the reported results must pertain to liability and fiduciary net position information within certain defined timeframes. For this report, the following timeframes are used:

Budgetary Information
48

CITY OF GARDEN GROVE

NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2021
B. STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY (continued)

2. Type of Fund
Housing Authority Enterprise
Successor Redevelopment Agency Fiduciary
The County Auditor-Controller is charged with establishing a Redevelopment Property Tax Trust Fund (RPTTF) for each Successor Agency. The deposit in the RPTTF is used to pay Successor Agency obligations. It is expected that this deficit will be eliminated with future resources obtained from the RPTTF.

The following funds had a deficit at June 30, 2021:

Deficit Fund Balance
The Housing Authority fund, an enterprise fund, has a deficit fund balance of $3,329,445.

The deficit is due to prior period costs related to the revised allocation of the net pension liability in accordance with GASB 68 and due to prior period costs related to the revised allocation of the OPEB liability in accordance with GASB 75. Until Section 8 administrative revenue granted to the Housing Authority from the Department of Housing and Urban Development increases to enable the Housing Authority to pay down its pension and OPEB liability, there will continue to be a deficit in the Housing Authority Fund.

The City of Garden Grove as Successor Agency to the Garden Grove Redevelopment Agency Private Purpose Trust Fund (Successor Agency), a fiduciary fund, has a deficit balance of $15,467,129. The deficit is due to covenant obligations pursuant to developer disposition agreements and Education Revenue Augmentation Fund and Supplemental Education Revenue Augmentation Fund payables to the Housing Successor Agency.

Fund
Deficit Fund
Balance
(3,329,445)$
(15,467,129)$
49

CITY OF GARDEN GROVE

NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2021
C. DETAILED NOTES ON ALL FUNDS

1. Statement of net position
Cash and investments 327 ,917,196$
Cash and investments with fiscal agent 17,122,466
Cash and investments for pension trust 1,634,947
346,674,609
Successor Agency (Private Purpose Trust Fund)
Cash and investments 26,006,060
Cash and investments with fiscal agent 4,089,955
30,096,015
Total Cash and Investments 376,770,624 $
Cash on hand 44,623$
Deposits with financial institutions 8,843,387
Investments 367 ,882,614
Total Cash and Investments 376,770,624 $
Investments Authorized by the City's Investment Policy
The following table identifies the investment types that are authorized by the California Government Code and the City’s investment policy. The table also identifies certain provisions of the City’s investment policy that address interest rate risk, credit risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustee that are governed by the provisions of debt agreements of the City, rather than the general provision of the Government Code and City’s investment policy.

Cash and Investments
Cash and investments as of June 30, 2021 are classified in the accompanying financial statements as follows:
50

CITY OF GARDEN GROVE

NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2021
C. DETAILED NOTES ON ALL FUNDS (continued)

1. Maximum Maximum
Maximum Percentage Investment
Maturity Of Portfolio* in One Issuer
Securities of the U.S. Government
or its Agencies 5 years None None
Federal Home Loan Bank (FHLB) 5 years None None
Federal National Mortgage Association
(FNMA) 5 years None None
Federal Farm Credit Bank (FFCB) 5 years None None
Local Agency Investment Fund (LAIF) N/A None None
Certificates of Deposits (CD) N/A 30% 5%
Bankers Acceptances 180 days 30% 10%
Negotiated Certificates of Deposit N/A 30% 5%
Commercial Paper 10 days ** 15% ** 10%
Medium Term Notes 5 years 30% None
Mutual Funds N/A 20% 10%
Mortgage-backed Securities 5 years 20% None
Repurchase Agreement (Overnight) 30 days ** None None
Passbook Savings Account N/A None None
Maximum Percenta ge Investment in
Maturity of Portfolio One Issuer
U.S. Treasury None None None
Money Market Funds N/A None None
Investment Contracts 30 years None None
Securities of the U.S. Government
or its Agencies 5 years None None
Local Agency Investment Fund (LAIF) N/A None None
Provisions of the debt agreements, rather than the City’s investment policy, govern investment of debt proceeds held by bond trustee. The table below identifies the investment types that are authorized for investments held by bond trustee. The table also identifies certain provisions of these debt agreements that address interest rate risk, credit risk, and concentration of credit risk.

Authorized
Investment T
ype
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the City manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations. The City monitors the interest rate risk inherent in its portfolio by measuring the weighted average maturity of its portfolio. The City has no specific limitations with respect to this metric.

Investments Authorized b
y the Debt Agreements
Cash and Investments (continued)
Authorized
Investment Type
*Excluding amounts held by bond trustee that are not subject to City's investment policy ** Represents where the City's investment policy is more restrictive than the California Government Code The City investment policy allows for other investments that are, or may become, legal investments through the California Government Code
51

CITY OF GARDEN GROVE

NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2021
C. DETAILED NOTES ON ALL FUNDS (continued)

1. U.S. Treasury 1.85
U.S. Agency Securities
FHLB 2.49
FFCB 2.27
FNMA 2.91
FHLMC 2.13
FMCC 4.01
Money Market Funds 291,473 0.08
Commercial Paper 0.08
Corporate Bonds 3.33
Municipal Bonds 3.51
Supranationals 4.21
Local Agency Investment Fund (LAIF) 0.50
Restricted cash and investments:

Investment Pool (PARS) 2.10
Held by fiscal Agent:

Money Market Funds 0.50
Total
Amount AAA - Aaa AA+ - AA- A - A+ Not Rated
U.S. Treasury 49,260,621$ N/A 49,260,621$ -$ -$ -$ -$ U.S. Agency Securities
FHLB 56,612,012 N/A - - 56,612,012 - - FFCB 51,926,808 N/A - - 51,926,808 - FNMA 13,014,587 N/A - - 13,014,587 - FHLMC 3,343,403 N/A - - 3,343,403 - FMCC 3,547,038 N/A - - 3,547,038 - Money Market Funds 291,473 AA - - 291,473 - Commercial Paper 11,953,941 A - - - 11,953,941 - Corporate Bonds 15,876,921 A - 2,972,730 4,914,391 7,989,800 - Municipal Bonds 18,046,180 A - 7,676,600 7,869,805 2,499,775 - Supranationals 12,435,549 A - 4,942,950 7,492,599 - - Local Agency Investment
Fund (LAIF) 108,726,715 N/A - - - - 108,726,715 Restricted cash and investments:

Investment Pool (PARS) 1,634,947 N/A - - - - 1,634,947 Held by fiscal agent:

Money Market Fund 21,212,419 AAA - 21,212,419 - - - Total 367,882,614$ 49,260,621$ 36,804,699$ 149,012,116$ 22,443,516 $ 110,361,662 $ 21,212,419
1,634,947
367,882,614$
Disclosures Relating to Credit Risk
Minimum
Legal
RatingInvestment Type
Exempt from
Disclosure
Ratings as of Year End
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment.

This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by (where applicable) the California Government Code, the City’s investment policy, or debt agreements, and the actual rating as of year-end for each investment type. The column marked “Exempt From Disclosure” identifies those investment types for which GASB No. 40 does not require disclosure as to credit risk:

Cash and Investments
(continued)
Weighted
Average
Maturity (in
years)Authorized Investment Type Amount
49,260,621$
56,612,012
51,926,808
13,014,587
108,726,715
3,343,403
3,547,038
11,953,941
15,876,921
18,046,180
12,435,549
52

CITY OF GARDEN GROVE

NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2021
C. DETAILED NOTES ON ALL FUNDS (continued)

1. FHLB U.S. A gency Securities
FFCB U.S. A gency Securities
FNMA U.S. A gency Securities
56,612,012$
51,926,808
13,014,587
Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment of collateral securities that are in the possession of another party. The California Government Code and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits. The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The fair value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits.

Cash and Investments
(continued)
Concentration of Credit Risk
The investment policy of the City contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code.

Investments in any one issuer (other than U.S. Treasury securities, mutual funds, and external investment pools) that represent 5% or more of total City investments are as follows:

Issue
r Investment Type Investment Amount
53

CITY OF GARDEN GROVE

NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2021
C. DETAILED NOTES ON ALL FUNDS (continued)

1. Total
Significant Other
Observable Inputs
(Level 2)
Significant
Unobservable Inputs
(Level 3)
U.S. Treasury 49,260,621$ 49,260,621 $ - $ - $ Commercial Paper 11,953,941 - 11,953,941 - Corporate Bonds 15,876,921 - 15,876,921 - Municipal Bonds 18,046,180 - 18,046,180 - Supranationals 12,435,549 - 12,435,549 - U.S. Agency Securities
FHLB 56,612,012 - 56,612,012 - FFCB 51,926,808 - 51,926,808 - FNMA 13,014,587 - 13,014,587 - FHLMC 3,343,403 - 3,343,403 - FMCC 3,547,038 - 3,547,038 - Total 236,017,060$ 49,260,621$ 186,756,439$ -$ Fair Value Measurement and Application
The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are quoted prices for similar assets in active markets; Level 3 inputs are significant unobservable inputs.

Investment
Type
Quoted Process in
Active Markets for
Identical Assets
(Level 1)
Ratings as of Year End
Investment in Pension Trust Pool
The City has established a Section 115 Trust to accumulate resources to stabilize the City's pension liability and offset potential volatility in annual contributions to CalPERS. As of June 30, 2021, the City reported $1,634,947 in cash and investments for pension trust. The pension trust assets are managed by with the City's pension trust administrator, Public Agency Retirement Services (PARS). PARS is an external investment pool, is not rated and is not registered with the Securities Exchange Commission. The City selects the investment strategy and the pool is managed by the PARS Board. The fair value of the City's investments in the pool is reported in the accompanying financial statements at amounts based upon the City's pro-rata share of the fair value provided by PARS for the entire PARS portfolio.

The total amount invested by all public agencies in LAIF as of June 30, 2021 was $37.1 billion. LAIF is part of the California Pooled Money Investment Account (PMIA), which at June 30
, 2021 had a balance of $193.3 billion.

Cash and Investments (continued)
Investment in State Investment Pool
The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The fair value of the City’s investment in this pool is reported in the accompanying financial statements at amounts based upon the City’s pro- rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. 54

CITY OF GARDEN GROVE

NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2021
C. DETAILED NOTES ON ALL FUNDS (continued)

2. a.
b.
c. Loan from General Fund to the former redevelopment
On May 21, 1984 the City Council approved an agreement between the City and the Agency for Community Development Community Project capital projects fund wherein the Agency agreed to reimburse the City $2,405,511, plus any accruing unpaid interest at the annual rate of 10%, for capital improvements within the Agency’s redevelopment area which were initially paid for by the General Fund. On March 8, 2011, the City Council authorized a loan amortization schedule. Principal payments ranging from $761,037 to $1,114,235 are due annually. In accordance with Assembly Bill X1 26, existing agreements between the City and the former redevelopment agency have been invalidated. Therefore, the City has set up 100% allowance for this loan on February 1, 2012. 3,048,030 Intercit
y Loans Receivable/Payable at June 30, 2021 consisted of the following:

Loan from General fund to the Water Utility fund:

On July 1, 1998, the City established an intercity loan between the General Fund and Water Utility Fund in the amount of $14,145,092 for the repayment from the Water Utility Fund to the General Fund for street damage repairs throughout the City that have been a benefit to the Water Utility. The loan accrues interest at 4.1% per annum. Beginning July 1, 2018 monthly payments are $100,208 which includes principal and interest to be paid thru June 2033. $ 11,382,206 Loan from General Fund to the former redevelo
pment
The General fund has loaned to the former redevelopment agency a total of $2,863,113 to assist in funding the Agency’s operating budget since 2004. The loans accrue interest at a rate of 6.5% per annum. On March 8, 2011, City Council authorized a loan amortization schedule. Principal payments ranging from $699,984 to $900,505 are due annually. In accordance with Assembly Bill X1 26, existing agreements between the City and the former
redevelopment agency have been invalidated. Therefore, the City has set up 100% allowance for this loan on February 1, 2012. 2,539,989 55

CITY OF GARDEN GROVE

NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2021
C. DETAILED NOTES ON ALL FUNDS (continued)

2. d.
e.
f.
g.

Less Allowance
Total Intercity Loans Receivable 41,202,044
(25,308,019)
Total Intercity Loans Receivable, net 15,894,025$
Loan from Vehicle Replacement Fund to the Communications Replacement Fund:

On January 26, 2016 the City Council approved an agreement between the Vehicle Replacement Fund to the Communications Replacement Fund for the upgrade and purchase of communications equipment for the operation of the 800 MHZ public safety communications system. Current schedule reflects the FY15-16 debt service portfolio rate of 1.26% which will be applied to the FY16-17 debt service. The estimated average portfolio rate will be updated annually once the prior year average portfolio rate is available. The principal will be paid annually in the amount of $400,506 plus interest. The principal may be prepaid without penalty at any time. 2,002,530 Loan from Risk Management Fund to the General Fund:

In July 2018, the City Council approved the General Fund to borrow $2,850,550 from the Risk Management Fund to pay for the energy efficiency project. The amount borrowed will cover the cost of the heatin
g, ventilation, and air conditioning systems and lighting retrofit equipment and installation. The General Fund will repay the loan over 19 years at the simple interest rate of 3.6%. 2,509,289 The former redevelopment agency has a loan from the Water Utility Fund in the amount of $750,000. Interest is paid monthly at an annual rate of 10% and has no fixed amortization date. In accordance with Assembly Bill X1 26, existing agreements between the City and the former redevelopment agency have been
invalidated. Therefore, the City has set up 100% allowance for this loan on February 1, 2012. 750,000
Intercit
y Loans Receivable/Payable at June 30, 2021 (continued) Loan from the General Fund to the former redevelopment
On February 26, 2002 the City Council approved an agreement between the City and the Agency for Community Development Community Project capital projects fund wherein the City has agreed to advance funds to the Agency for the acquisition and development of certain property within the project areas. The advance is subject to repayment on demand and bears interest at a rate of 6.5%. The Agency is responsible for making payments on the City’s $22,735,000 Certificates of Participation Series A of 2002, (the Certificates), the proceeds of which were used to fund the advances from the City to the Agency. The Agency also reimbursed the City for the $683,739 of issuance costs related to the Certificates of Participation. In accordance with Assembly Bill X1 26, existing agreements between the City and the former redevelopment agency have been invalidated. Therefore, the City has set up 100% allowance for this loan on Februar
y 1, 2012. $ 18,970,000
Loan from Water Utility Fund to the former redevelopment agency:
56

CITY OF GARDEN GROVE

NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2021
C. DETAILED NOTES ON ALL FUNDS (continued)

3. $ 7,054,260

4. a.

General Fund -$ 2,115,021$
Housing Successor Agency - 1,013
Nonmajor Governmental Funds - 375,685
Internal Service Funds 2,992,088 137,576
Water Utility - 206,403
Sewage Collection - 82,958
Housing Authority - 51,682
Nonmajor Enterprise Funds - 21,750
Total 2,992,088$ 2,992,088$
The interfund payable balances represent routine and temporary cash flow assistance from the Workers’ Compensation internal service fund until the amounts receivable are collected to reimburse eligible expenditures. They also include fringe collected from other funds that are due to the Employee Benefit and Workers' Compensation internal service funds.

Due From Successor A
gency
The former Redevelopment Agency has five loans from the Low Income Housing Assets Capital Project Fund, that were used to make the fiscal year 2005-06 ($621,376) mandated Educational Revenue Augmentation Fund (ERAF) payments and
“Supplemental” Educational Revenue Augmentation (SERAF) payments for the fiscal year 2009-10 ($7,906,610) and 2010-11 ($1,626,274). These loans were due 10 years from when the loans were originally established except for 2009-10 and 2010- 11 loans which are due on May 10, 2015 and June 30, 2016, respectively. These loans which were previously invalidated, have been approved as an allowable Recognized Obligation payment by the State of California Department of Finance (DOF).

On June 12, 2018, the DOF approved the repayment of the original principal balance of $13,254,260 based on review of the April 27, 2018 Oversight Board (OB) Resolution No. 58-18. All accrued interest was therefore denied, OB Resolution No. 58-18 establishes and approves the repayment schedule of the funds borrowed from the Low and Moderate Income Housing Fund
(LMIHF) to make the ERAF and SERAF payment totaling
$3,721,376 and $9,532,884 respectively.

At June 30, 2021 the Successor Agency repaid $6,200,000 of the loan balance. The amount due from the Successor Agency at June 30, 2021 is $7,054,260, which represents $7,054,260 of SERAF.

Interfund Receivables
, Payables, and Transfers
The composition of interfund receivable/payable balances as of June 30, 2021 is as follows:

Due From
Other Funds
Due To Other
Funds
57

CITY OF GARDEN GROVE

NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2021
C. DETAILED NOTES ON ALL FUNDS (continued)

4. b.

General
Fund
Nonmajor
Governmental
Funds
Internal
Service
Funds Total
General Fund - $ 397,369$ - $ 397,369$ Nonmajor Governmental Funds 231,386 - - 231,386 Internal Service Funds 717,610 - - 717,610 Water Utility Fund - - 47,132 47,132 Total 948,996$ 397,369$ 47,132$ 1,393,497$
The Water Fund transferred $47,132 to the Fleet Management Internal Service Fund to partially pay for a new vehicle maintained by the Fleet Fund. The rest of the vehicle cost is paid for by the Fleet Management Internal Service Fund.

Transfers from the General Fund were made to subsidize the Garden Grove Cable Fund in the amount of $209,715 and to subsidize the Park Maintenance Assessment District in the amount of $13,064.

In addition, the General Fund made a transfer to the Street Lighting District in the amount of $174,590 to subsidize the operation costs.

Interfund Receivables, Payables, and Transfers (continued) The composition of interfund transfer balances for the year ended June 30, 2021 is as Transfers out:

Transfers from the Employee Benefit Internal Service Fund were made in the amount of $717,610 to the General Fund to fund future City Pension obligation.

Transfers to the General Fund generated by the Garden Grove Tourism Improvement District Special Revenue Fund in the amount of $231,386 were made to fund future City projects.

Transfers in:
58

CITY OF GARDEN GROVE

NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2021
C. DETAILED NOTES ON ALL FUNDS (continued)

5. a.
b.
c.
d.
e. Sin gle Family Rehab (Deferred Loan) - Housing Successor At June 30, 2021 eight Deferred Loan Agreements remain, which are reflected in the Housing Successor Agency fund. These loans provide up to $20,000 in down payment assistance in the form of a silent loan that requires no payment for 15 or 30 years. The loans carry 3% or 5% interest charges. There are five Homebuyer Assistance Loans that were issues for $50,000 each. These loans have a term of 45 years and bear a simple interest of 3%. At each anniversary, 1/45th of the principal and interest are forgiven. $ 362,644
CalHome Mortgage Assistance (CalHome) Loan - Other
nonmajor governmental funds:

At June 30, 2021, twenty-eight CalHome Agreements are
reflected in the nonmajor governmental funds. These loans provide up to $60,000 in down payment assistance in the form of a silent loan that requires no payment for 30 years. The loans carry 3% interest charges. 1,329,514
Rental rehabilitation – HOME Grant Revenue fund - Other nonmajor governmental fund:

The City has entered into a Housing Rehabilitation Agreement utilizing HOME funds for the purpose of assisting developers in the acquisition, substantial rehabilitation and continued operation of an existing 78-unit multifamily affordable housing project called Sycamore Court. Due to the multiple project funding sources, when completed the project will be subject to new income restrictions, occupancy and other affordable housing covenants.

Disbursement of loan proceeds of $1,200,000 were made in five installment payments commencing on June 2017. The Note bears simple interest at the rate of 3% per annum from the date of initial disbursement. Interest payments of $36,000 are due on an annual basis and no principal payments are required on the loan maturity date of September 30, 2033. 1,328,557 At June 30, 2021, nine MAP agreements are reflected in the Housing Sucessor Agency fund. These loans provide up to $40,000 in down payment assistance in the form of a silent loan that requires no payment for 5 up to 30 years. The loans carry interest between 0 to 3% annuall
y. 153,916
Notes receivable at June 30, 2021, consisted of the following:

Neighborhood Stabilization Program (NSP) Loan – Other
nonmajor governmental funds:

At June 30, 2021, thirteen NSP Agreements remain, which are reflected in the nonmajor governmental funds. These loans provide up to $40,000 in down payment assistance in the form of a silent loan that requires no payment for 30 years. The loans carry 0% interest charges. $ 433,028
Mortgage Assistance Program (MAP) Loan – Housing
Successor Agency Major Capital Project Fund:
59 Page 126 of 362

CITY OF GARDEN GROVE

NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2021
C. DETAILED NOTES ON ALL FUNDS (continued)

5. f.
g.
h.
i.
j. Rental construction – Housin g Successor Agency Major Capital The City has entered into a rental construction loan agreement utilizing HOME and Housing Successor Agency funds. The note was for the purpose of assisting the developer with the construction of new low-income housing for City residents. The note bears a simple annual interest rate of 3%. Loan repayment is based on residual receipts and is contingent upon the release of construction covenants for the project. The note commenced upon the initial disbursement of funds HOME in June 2015. An additional $1.6 million was disbursed in June 2017 and is payable to the Housing Successor Agency Fund. Its maturity will be the fifty-fifth anniversary of the date of the Release of Construction Covenants. 4,259,566
Affordable housing agreement – General Fund:

The City has entered into three Affordable Housing Agreements with developers wherein the developers have agreed to comply to certain affordability covenants including the reimbursement to the City of forgone property taxes which would have been payable for the property, increasing at the rate of approximately 2% annually. 2,353,227 The Low and Moderate Income Housing Asset capital projects fund holds six notes related to property rehabilitation loans, which have been used to assist developers in the rehabilitation of multifamily residential buildings located within the City for the purpose of providing adequate low income housing opportunities for City residents. 3,161,091
Rental rehabilitation – Housing Successor Agency Major
Capital Project Fund and Other nonmajor governmental funds:

The City has entered into thirteen Housing Rehabilitation Agreements utilizing CDBG funds, which are reflected in the Housing Successor Agency fund and other nonmajor governmental funds. These loans were for the purpose of assisting developers in the rehabilitation and operation of multifamily apartment buildings for the purpose of providing adequate low-income housing to City residents. Many of these buildings had suffered from serious structural deterioration, overcrowding and high crime. 14,329,696
At June 30, 2021, fourteen ADDI Agreements utilizing the American Dream Down payment Initiative funds are reflected in nonmajor governmental funds. These loans provide up to $30,000 in down payment assistance in the form of a silent loan that requires no payment for 15 years. The loans carry 0% interest charges. These loans are forgivable if the recipient complies with all conditions. $ 181,620 Notes receivable at June 30
, 2021, consisted of the following: (continued)
ADDI Down Payment Rehab (ADDI) Loan – Other nonmajor
governmental funds:

Rental rehabilitation - Housing Successor Agency Major
Capital Project Fund:
60

CITY OF GARDEN GROVE

NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2021
C. DETAILED NOTES ON ALL FUNDS (continued)

5. k.
l.
m.
n.

Less Allowance
Total Notes Receivable, net 30,188,400$
Small Business Assistance Program – General fund and
Other nonmajor governmental funds:

The City has entered into loan agreements through the Small Business Assistance Program utilizing CDBG funds as well as General Fund monies for a total loan amount of $450,000. The notes bear an interest rate equal to 0% or the highest rate permitted by applicable law compounded annually. 443,334 Private Sewer Lateral Loan A
greement – Sewer Fund:

The Garden Grove Sanitary District has entered into a Private Sewer Lateral Loan Agreement with The Helen Brooks Montgomery Revocable Trust on October 1, 2012, for an original amount of $10,000. The loan is due and payable at the simple annual interest rate of 2.24%. Monthly payments in the amount of $65.47 are required. Loan principal is amortized over the 15-year life and the principal portion of monthly payment reduces the loan payable. 4,041 Stipulation for Summary Judgement:

The City has entered into an agreement with a low income housing provider to pay damages due to breech of contract pursuant to a summary judgement. The agreement stipulates that the housing provider will pay a total sum of $271,697 over 5 years with an annual interest rate of 2%. 212,086
Total Notes Receivable 31,431,915
The City has entered into a financed sale agreement for the sale of twelve single-family residential parcels on March 12, 2016. The initial loan amount is $2,709,030. The note bears a simple annual interest rate of 4% in 60 equal monthly interest-only payments in the amount of $9,030 with a balloon payment on the 60th month.

On December 10, 2019 the City Council approved an amendment to defer interest payments for a period of 30 months. The new interest payment of $9,476 will begin on July, 2020. Principal and interest payment of $19,476 will begin on July 1, 2025. A balloon payment in the amount of $2,453,304.58 will be due at the end of the loan term or the maturity date of December 1, 2029. 2,879,595 Notes receivable at June 30
, 2021, consisted of the following: (continued)
Conveyance of Property Loan Agreement – Housing
Successor Agency Major Capital Project Fund and other non- major Capital Project Fund:

(1,243,515)
61

CITY OF GARDEN GROVE

NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2021
C. DETAILED NOTES ON ALL FUNDS (continued)

6. 7.

Beginning
Balance Increases Decreases
Ending
Balance
Governmental activities
Capital assets, not being depreciated:

Land 412,953,682$ -$ -$ 412,953,682$ Construction in progress 5,424,001 11,604,648 (13,900,795) 3,127,854 418,377,683 11,604,648 (13,900,795) 416,081,536 Capital assets, being depreciated:

Infrastructure
Street system 408,557,395 12,033,892 (3,818,984) 416,772,303 Storm drain assets 75,851,672 - - 75,851,672 Buildings and park assets 55,870,158 495,268 (227,695) 56,137,731 Furniture and equipment 30,829,979 3,902,424 (950,097) 33,782,306 Total capital assets, being depreciated 571,109,204 16,431,584 (4,996,776) 582,544,012 Less accumulated depreciated for:

Infrastructure
Street system (253,590,844) (10,954,827) 3,719,563 (260,826,108) Storm drain assets (49,241,338) (1,517,033) - (50,758,371) Buildings and park assets (29,618,389) (1,582,708) 209,755 (30,991,342) Furniture and equipment (15,857,222) (2,159,122) 888,701 (17,127,643) Total accumulated depreciation (348,307,793) (16,213,690) 4,818,019 (359,703,464) Total capital assets, being depreciated, net 222,801,411 217,894 (178,757) 222,840,548 Governmental activities capital assets, net 641,179,094$ 11,822,542$ (14,079,552)$ 638,922,084$ Business-type activities
Capital assets, not being depreciated:

Land 5,142,500 $ - $ - $ 5,142,500$ Construction in progress 479,980 7,565,314 (6,383,172) 1,662,122 5,622,480 7,565,314 (6,383,172) 6,804,622 Capital assets, being depreciated:

Building and structures 570,726 8,184 - 578,910 Water system 150,587,172 3,074,494 (913,669) 152,747,997 Sewer system 120,444,077 3,155,024 (900,124) 122,698,977 Machinery and equipment 569,792 151,270 - 721,062 Total capital assets, being depreciated 272,171,767 6,388,972 (1,813,793) 276,746,946 Less accumulated depreciated for:

Building and structures (299,234) (10,715) - (309,949) Water system (60,359,105) (3,743,708) 888,507 (63,214,306) Sewer system (54,398,770) (1,826,101) 687,159 (55,537,712) Machinery and equipment (370,139) (41,159) - (411,298) Total accumulated depreciation (115,427,248) (5,621,683) 1,575,666 (119,473,265) Total capital assets, being depreciated, net 156,744,519 767,289 (238,127) 157,273,681 Business-type activities capital assets, net 162,366,999$ 8,332,603$ (6,621,299)$ 164,078,303$ Total capital assets, not being depreciated
Total capital assets, not being depreciated
Land Held for Resale
The City and the Successor Agency land held for resale is an inventory of land intended to be sold to developers. The land is carried at the lower of cost or estimated net realizable value, as determined upon execution of a disposition and development agreement.

City land held for resale is comprised of inventory held by the General Fund and the Housing Successor Agency capital projects fund. City and Successor Agency land held for resale balances at June 30, 2021 are $2,819,063 and $25,249,639, respectively.

Capital Assets
Capital asset activity for the year ended June 30, 2021 was as follows:
62