AGENDA
Garden Grove City Council
Tuesday, January 14, 2025
6:30 PM
Community Meeting Center
11300 Stanford Avenue
Garden Grove, California 92840
Stephanie Klopfenstein
Mayor
Joe DoVinh
Mayor Pro Tem – District 4
George S. Brietigam
Council Member – District 1
Phillip Nguyen
Council Member – District 2
Cindy Tran
Council Member – District 3
Yesenia Muñeton
Council Member – District 5
Ariana Arestegui
Council Member – District 6
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.
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 t he record, and proceed to address the City 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.
1
AGENDA
ROLL CALL: COUNCIL MEMBER BRIETIGAM, COUNCIL MEMBER NGUYEN, COUNCIL MEMBER TRAN, COUNCIL MEMBER MUÑETON, COUNCIL MEMBER ARESTEGUI, MAYOR PRO
TEM DOVINH, MAYOR KLOPFENSTEIN
INVOCATION
PLEDGE OF ALLEGIANCE TO THE FLAG OF THE UNITED STATES OF AMERICA
PRESENTATIONS
1. Community Spotlight in recognition of the goodwill ambassadors representing Anyang, Republic of Korea, as part of the 36th annual Garden Grove Sister City Exchange Program.
[Item 3/2025]
ORAL COMMUNICATIONS (TO BE HELD SIMULTANEOUSLY WITH OTHER
LEGISLATIVE BODIES)
RECESS
CONDUCT OTHER LEGISLATIVE BODIES' BUSINESS
RECONVENE
CONSENT ITEMS (CONSENT ITEMS WILL BE ACTED ON SIMULTANEOUSLY
WITH ONE MOTION UNLESS SEPARATE DISCUSSION AND/OR ACTION IS
REQUESTED BY A COUNCIL MEMBER)
2. Adoption of a Proclamation recognizing January 13, 2025, as Korean American Day in Garden Grove. (Action Item)
[Item 500/2024]
3. Adoption of a Resolution designating Authorized Agents of the City for the Emergency Management Performance Grant for grant cycles 2024-2025, 2025- 2026, and 2026-2027. (Action Item)
[Item 9/2025]
4. Approval of the Third Amendment to the Agreement with the County of Orange for Families and Communities Together (FaCT) Grant Program Funding for the Magnolia Park Family Resource Center. (Action Item)
[Item 521/2024]
5. Authorize the issuance of a purchase order to Advexure, LLC to purchase Unmanned Aerial Systems and supporting equipment for the Police Department’s UAS Program. (Cost: $74,851.63) (Action Item) [Item 520/2024] 2
6. Receive and file the annual financial reports and auditor’s communication related to Fiscal Year 2023-24 annual audit. (Action Item)
[Item 522/2024]
7. Receive and file warrants. (Action Item)
[Item 10/2025]
PUBLIC HEARINGS (MOTION TO APPROVE WILL INCLUDE ADOPTION OF EACH RESOLUTION UNLESS OTHERWISE STATED.)
8. Adoption of a Resolution denying an appeal filed by Supporters Alliance for Environmental Responsibility (SAFER) and upholding the Planning Commission’s Decision to approve Site Plan No. SP-145-2024 and Lot Line Adjustment No. LLA-033-2024. (Continued from the December 10, 2024 City Council meeting) (Action Item)
[Item 497/2024 - 1]
COMMISSION/COMMITTEE MATTERS
9. Consideration of Appointments to the Audit Committee and outside Committees. (Continued from the December 10, 2024 City Council meeting) (Action Item)
[Item 457/2024 - 1]
10. Adoption of a Resolution appointing a City Council Member to the Orange County Fire Authority Board of Directors. (Continued from the December 10, 2024 City Council meeting) (Action Item)
[Item 458/2024 - 1]
MATTERS FROM THE MAYOR, CITY COUNCIL MEMBERS, AND CITY MANAGER
ADJOURNMENT
The next Regular Meeting is scheduled for Tuesday, January 28, 2025, at 5:30 p.m. in the Community Meeting Center, 11300 Stanford Avenue, Garden Grove, California, 92840.
Happy Birthday Mayor Pro Tem DoVinh!
3 Item 500/2024
Final
City of Garden Grove
INTER-DEPARTMENT MEMORANDUM
To:
Lisa L. Kim From: Lizabeth Vasquez
Dept:
City Manager Dept: City Clerk
Date: 1/14/2025
Subject: Adoption of a Proclamation recognizing January 13, 2025, as Korean American Day in Garden Grove. (Action Item)
Attached is a Proclamation recognizing January 13, 2025, as Korean American Day in Garden Grove, recommended for adoption.
ATTACHMENT(S)
1. Proclamation
4 Proclamation
Korean American Day
January 13, 2025
WHEREAS, On January 13, 2003, United States President George W. Bush proclaimed the 100 th anniversary of the arrival of the first Korean immigrants to the United States; and
WHEREAS, In 2005, the United States Congress unanimously passed resolutions to recognize Korean Americans who have made significant contributions to economic vitality in the United States . Since then, states across the country have declared January 13 as an annual cele bration of Korean American Day; and
WHEREAS, January 13, 1903 marks the day the first group of Korean immigrants came to the United States in Honolulu, Hawaii, on the S.S. Gaelic. This year marks the 1 22nd anniversary of their arrival and the 22nd anniversary of Korean American Day in the United States; and
WHEREAS, The year 2025 is the 72nd anniversary of the United States and Republic of Korea’s security alliance; and
WHEREAS, Today, more than 2 million Korean Americans call the United States their home, and in Garden Grove, our Korean American community is prominent and vibrant; and
WHEREAS, The City is very proud of the professional and cultural contributions made by Korean American business owners and residents in Garden Grove that have helped enrich our community’s cultural diversity; and
WHEREAS, Garden Grove’s 36-year Sister City relationship with Anyang, Republic of Korea was built on mutual respect and admiration for our respective cultures; and
WHEREAS, The Korean American Fe deration of Orange County and the Korean American Chamber of Commerce of Orange County have been integral in helping many Korean American business owners and residents in Garden Grove become productive and proud citizens.
NOW, THEREFORE, WE, the Garden Grove City Council, do hereby proclaim January 13, 2025 as Korean American Day in Garden Grove, and do hereby recognize the contributions made by Korean Americans, and encourage all citizens to celebrate our community’s vibrant diversity.
January 14, 2025
5 Item 9/2025
Final
City of Garden Grove
INTER-DEPARTMENT MEMORANDUM
To:
Lisa L. Kim From: Chief El-Farra
Dept:
City Manager Dept: Police
Date: 1/14/2025
Subject: Adoption of a Resolution designating Authorized Agents of the City for the Emergency Management Performance Grant for grant cycles 2024-2025, 2025- 2026, and 2026-2027. (Action Item)
OBJECTIVE
To have the City Council adopt the Resolution designating Authorized Agents of the City for the Fiscal Years 2024-2026 Emergency Management Performance Grant (EMPG).
BACKGROUND
Through the EMPG grant the Police Department receives reimbursement funds from the Department of Homeland Security and sub-awarded through the California Office of Emergency Services for a comprehensive all hazards emergency preparedness program.
DISCUSSION
The California Office of Emergency Services (CalOES) requires that a resolution be adopted every three years at the ma ximum. The attached Resolution provides for the three named positions that will be authorized to sign for the City in matters that pertain to executing documents for reimbursements from emergency declarations and preparedness programs.
FINANCIAL IMPACT
There is no financial impact to adopt the resolution designating authorized agents of the City for the fiscal years 2024 through 2026 Emergency Management Performance Grant.
RECOMMENDATION
It is recommended that the City Council:
Adopt the attached Resolution designating Authorized Agents of the City for the purpose of obtaining federal financial assistance provided by the federal Department of Homeland Security financial assistance and reimbursement. 6 Item 9/2025
ATTACHMENT(S)
1. Resolution
7 STAT
E OF CALIFORNIA
GOVERNO
R’S OFFICE OF EMERGENCY SERVICES
Cal OES 130
Cal OES ID No: ______________________
DESIGNATION
OF APPLICANT'S AGENT RESOLUTION
FOR NON-STATE AGENCIES
BE IT
RESOLVED BY THE OF THE
(Governi
ng Body) (Name of Applicant)
THAT , OR
(Title of A
uthorized Agent)
, OR
(Title of A
uthorized Agent)
(Title of Authorized Agent)
is hereby aut
horized to execute for and on behalf of the , a public entity (Name of Appli
cant)
esta
blished under the laws of the State of California, this application and to file it with the California Governor’s Office of Emergency Services for the purpose of obtaining certain federal financial assistance under Public Law 93-288 as amended by the Robert T. Stafford Disaster Relief and Emergency Assistance Act of 1988, and/or state financial assistance under the California Disaster Assistance Act.
THAT the ________________________________________________, a public entity established under the laws of the State of California, (Name of Appli
cant)
hereby authorizes it
s agent(s) to provide to the Governor’s Office of Emergency Servicesfor all matters pertaining to such state disaster assistance the assurances and agreements required.
Please check the appropriate box below:
This is a universal resolution and is effective for all open and future disasters up to three (3) years following the date of approval below.
This is a disaster specific resolution and is effective for only disaster number(s) ________________________ Pas
sed and approved this day of , 20
(Nam
e and Title of Governi
ng Body Representative)
(Name and Title of Governi
ng Body Representative)
(Name and Title of Governi
ng Body Representative)
CERTI
FICATION
I, , duly appointed and of
(Name) (
Title)
, do here
by certify that the above is a true and correct copy of a (Nam
e of Applicant)
Resolution passed
and approved by the of the
(Governi
ng Body) (Name of Applicant)
on the day of , 20 25 .
(Title
)
(Si
gnature)
Cal OE
S 130 (Rev.9/13)
8 STATE OF CALIFORNIA
GOVERNOR’S OFFICE OF EMERGENCY SERVICES
Cal
OES
130
-
Instructions
Cal
OES
Form
1 30 Instructions
A Designation of Applicant’s Agent Resolution for Non
-
State Agencies is required
of all Applicants to be eligible to
receive funding.
A new resolution must be submitted if
a previously submitted Resol
ution is older than three (3) years
from the last date of approval, is invalid or has not been submitted.
When
co
m
p
leting
the
Cal
OES
Form
130,
Applicants
should
fill
i
n
the
blanks
on
page
1. The
blanks
are
to
be
filled
in
as
follows:
Resolution
Section:
Governing
B
o
d
y
:
This
is
t
h
e
gro
u
p
responsible
for
a
p
point
i
ng
and
approvi
n
g
the
Authorized Agents.
Exa
m
ples
include: Board
of
D
i
rectors,
City
Council,
Bo
a
rd
of
S
u
perv
i
sors,
Board of Education, etc.
Name of Applicant
:
The public entity
established under the laws of the State of California.
Examples include:
School
District, Office of Education, Ci
t
y
, Coun
t
y or
Non
-
profit
agenc
y
that
has
ap
p
lied
for
the
grant
, such as:
City
of
San Diego
,
Sacra
m
ento
Count
y, Burbank Unified School Dist
rict, Napa County Office of Education
, University Southern California
.
Authorized Agent
:
These
are
the
individuals
that
are
a
u
thorized
by
the
Governing
Body
to
eng
a
ge
with the Federal Emergency
Management Agency and
the
Governor’s Office of Emergency
Services
regarding
grants
applied
for
b
y
the
Applican
t.
There
are
t
w
o
wa
y
s
of
co
m
p
l
e
ting
this
section:
1 .
Titles
Onl
y
:
If
the
Governing
Body
so
c
hooses,
the
ti
t
les
of
the
Authorized
Agents
w
ould
be entered
here,
not
their
names.
This
allows
the
do
c
u
m
ent
to
re
m
a
in
valid
(for 3 years)
if
an
Au
t
horized
Agent leaves
the
position
and
is
r
e
placed
by
another
individual in the same title
.
If
“Titles
Only”
is
the
chosen
method,
this docu
m
ent
must
be
accompanied
by
a
c
over
letter
naming
the
Au
t
horized
Agents
by
na
m
e
a
n
d
title.
This
cover
letter
can
b
e
c
o
m
p
leted
by
any
a
u
t
ho
r
ized
person
within
the
agency
and
does
not
require
t
h
e
Governing Bo
d
y
’s
signa
t
u
re.
2 .
Names
and
Titles:
If
the
Governing
Body
so
cho
o
ses,
the
names
a
n
d
titles
of
the
Authorized
Agents
would
be
listed.
A
new
Cal
OES
Form
1 30
will be required
if
any
of
t
h
e
Authorized
Agents
are replaced,
leave
the
position
listed
on
the
document or their title changes.
Governing Body
Representativ
e
:
These
are
the
na
m
e
s
and
titles
of
the
approv
i
ng
B
oard
M
e
mbers.
Exa
m
ples include
:
Chai
r
m
an
o
f
the
Board,
Director,
Superintendent,
etc.
The names and titles
cannot
be
one
of the
designated Autho
r
ized Agents, and a minimum of
two or more
approving board members need to be listed.
Certification
Section:
Name and
Titl
e
:
This
is
the
indiv
i
dual
that
was
in
attendance
and
recorded
the
Resolution
creation
and
approval.
Exa
m
ples
i
nclude:
Ci
t
y
Clerk,
Secretary
to
the
B
o
ard
of
Directors,
Coun
t
y
Clerk,
etc.
This
person
can
n
o
t
be
one
of
the
designated
Authorized
Agents
or Approving Board Member (if a person holds two positions such as City Manager and Secretary to the Board and the City Manager is to be listed as an Authorized Agent, then the same person holding the
Secretary position would sign the document as S
ecretary to the Board (not City Manager)
to
eli
m
i
n
ate
“Self
C
e
rtification.”
Pa
g
e 2
Cal
OES
130 (
Rev.
9 /13
)
9 Item 521/2024
Final
City of Garden Grove
INTER-DEPARTMENT MEMORANDUM
To:
Lisa L. Kim From: John Montanchez
Dept:
City Manager Dept: Community Services
Date: 1/14/2025
Subject: Approval of the Third Amendment to the Agreement with the County of Orange for Families and Communities Together (FaCT) Grant Program Funding for the Magnolia Park Family Resource Center. (Action Item)
OBJECTIVE
To request that the City Council approve the Third Amendment to the Agreement with the County of Orange Social Services Agency to receive Families and Communities Together (FaCT) grant funding for the Magnolia Park Family Resource Center (MPFRC).
BACKGROUND
Since 1999, the City has been the lead agency for the Garden Grove Community Collaborative, which provides the community with family preservation services at the MPFRC.
The majority of the funding for the Center comes through a grant from the County of Orange, FaCT Program. The original grant received in 1999 was extended in 2003, then in 2005, then in 2010, then in 2015, and once again in 2020 as part of a competitive grant process. County funded services provided by MPFRC include counseling, case management, information and referral, family su pport services, parent education, domestic violence prevention and treatment services, and childcare services.
On March 4, 2020, City Council approved an Agreement with the County of Orange to receive FaCT grant funding for the MPFRC that covered a three-year period from July 1, 2020, through June 30, 2023. The grant funding available for each one-year period is $300,000, for a total amount of $900,000 for the three-year period, with the option to extend two (2) additional one-year periods, without competitive bid process, at the sole discretion of the County. The City’s General Fund provided matching funds in the amount of $124,030 each year, which was part of the adopted budget. The City continued to serve as the lead fiscal agency for this grant, and pr ovide family support services, case management, strengthening family workshops, parent education, clinical supervision, information and referral, community outreach services, and teen programming. Other family services were provided through the Garden Grove Community Collaborative that involves partner agencies from the community.
The grant funded partners include Interval House for domestic violence prevention and treatment services; Human Options for differential response supportive services, and 10 Item 521/2024
counseling services; and Team of Advocates for Special Kids (TASK) for parent workshops and Individualized Education Plan (IEP) clinics and services.
In May 2022, the City Council approved the First Amendment to the Agreement to increase grant funding by $70,800 for fiscal year 2022 -2023, for a total grant amount of $370,800 that included additional services provided by the MPFRC and Garden Grove Community Collaborative. Then on February 14, 2023, City Council approved the Second Amendment to the Agreement to extend the Agreement for two additional years from July 1, 2023, through June 30, 2025 with grant funding in the amount of $370,800 each fiscal year for the remaining contracted partner agencies, the City of Garden Grove, Human Options, Inc., and Interval House. The City’s General Fund provided matching funds in the amount of $130,000 each year, during fiscal year 2023-24 and fiscal year 2024-25.
DISCUSSION
Attached is the Third Amendment to the Agreement with the County of Orange Social Services Agency to increase grant funding by $20,000 for the remainder of fiscal year 2024-25, for a total grant amount of $390,800 that will include additional Emergency Assistance services.
FINANCIAL IMPACT
As lead agency, the City will be overseeing the program and fiscal operations of the grant.
For the remainder of fiscal year 2024-25, the total grant amount will be $390,800 for services through management of the Garden Grove Community Collaborative. During fiscal year 2024-25, the City’s General Fund will match an estimated amount of $130,000, which is included in the department’s existing operating budget. The Program will receive an additional $20,000 in grant funding, and accordingly, appropriations will be increased for the same amount in the FACT Fund.
RECOMMENDATION
It is recommended that the City Council:
Approve the attached Third Amendment to the Agreement with the County of Orange Social Services Agency to receive Families and Communities Together (FaCT ) grant funding for the Magnolia Park Family Resource Center (MPFRC); and Authorize the City Manager to sign the Third Amendment, including making any minor modifications during the contract period for the operation and implementation of the contract services.
By: Janet Pelayo, Deputy Director
ATTACHMENT(S)
1. Third Amendment to FaCT Agreement
11 FCK0220-A3 Page 1 of 13 December 17, 2024
AMENDMENT THREE TO AGREEMENT
BETWEEN
COUNTY OF ORANGE
AND
CITY OF GARDEN GROVE
AND
HUMAN OPTIONS, INC.
AND
INTERVAL HOUSE
FOR THE PROVISION OF FAMILY RESOURCE CENTER SERVICES
THIS AMENDMENT THREE, made and entered into upon execution of all necessary signatures, is to that certain AGREEMENT Number FCK0220 between the parties hereto, hereinafter referred to as the “Agreement ” and is by and between the COUNTY OF ORANGE, hereinafter referred to as “COUNTY,” and City of Garden Grove, a California municipal agency; Human Options, Inc., a California non-profit corporation; and Interval House, a California non - profit corporation, hereinafter collectively referred to as “MAGNOLIA PARK FAMILY RESOURCE CENTER” or “CONTRACTOR.” City of Garden Grove, Human Options, Inc., and Interval House, may each also be referred to as “Contractor Partner Agencies.” COUNTY and CONTRACTOR may be referred to individually as “Party” and collectively as “the Parties.”
W I T N E S S E T H
WHEREAS, on July 1, 2020, COUNTY and CONTRACTOR entered into an Agreement for the provision of Family Resource Center Services, for the term of July 1, 2020, through June 30, 2023;
WHEREAS, on August 1, 2020, COUNTY and CONTRACTOR modified the Agreement to add Network Security and Privacy Liability Insurance;
WHEREAS, AMENDMENT ONE was issued to increase funding for the provision of additional Family Resource Center Services to clients; amend Subparagraph 21.1 of the 12 FCK0220-A3 Page 2 of 13 December 17, 2024
Agreement; amend Subparagraphs 4.15, 5.8, 6.4, 8.6, 14.1, 14.4, and Paragraph 15 of Exhibit A of the Agreement;
WHEREAS, Contractor Partner Agency TASK, has elected not to renew the Agreement with the COUNTY and the remaining Contractor Partner Agencies, the City of Garden Grove, Human Options, Inc., and Interval House, desire to renew the Agreement with the County and assume all contractual obligations of TASK;
WHEREAS, AMENDMENT TWO was issued to renew the Agreement for an additional two (2) years from July 1, 2023, through June 30, 2025, w ith the remaining Contractor Partner Agencies; amend Paragraph 1, 13, and Subparagraphs 21.1, and 21.2 of the Agreement; amend Paragraph 5 and Subparagraphs 5.9, 5.11, 14.1, 14.3, and 14.4 of Exhibit A of the Agreement; remove Subparagraph 5.12 of Exhibit A of the Agreement; and remove all references to TASK; WHEREAS, COUNTY desires to increase funding for the provision of additional Family Resource Center Services to clients; amend Paragraph s 5, 7, 15, 32, 35, and Subparagraphs 9.4.3 and 21.1 of the Agreement; add Paragraph 4 5 to the Agreement; amend Subparagraphs 3.2, 6.4,
8.6, 14.1, and 14.4 of Exhibit A of the Agreement; and add Attachments B and C to the Agreement; WHEREAS, CONTRACTOR agrees to continue to provide such services under the terms and conditions set forth in this Agreement; and
ACCORDINGLY, THE PARTIES AGREED AS FOLLOWS:
1. Paragraph 5 of the Agreement is hereby amended to read as follows:
5. COMPLIANCE WITH LICENSING STANDARDS AND LAWS
5.1 CONTRACTOR warrants that it and its personnel, described in Paragraph 28 of this Agreement, who are subject to individual registration and/or licensing requirements, have all necessary licenses and permits required by the laws of the United States, State of California (hereinafter r eferred to as “State”), County of Orange, and all other appropriate governmental agencies to perform the services 13 FCK0220-A3 Page 3 of 13 December 17, 2024
described in this Agreement, and agrees to maintain, and require its personnel to maintain, these licenses and permits in effect for the durat ion of this Agreement.
Further, CONTRACTOR warrants that its employees shall conduct themselves in compliance with such laws and licensure requirements, including, without limitation, compliance with laws applicable to sexual harassment and ethical behavior. CONTACTOR must notify ADMINISTRATOR within one (1) business day of any change in license or permit status (e.g., becoming expired, inactive, etc.).
5.2 CONTRACTOR represents and warrants that services to be provided under this Contract shall fully comply, at CONTRACTOR’s expense, with all standards, laws, statutes, restrictions, ordinances, requirements, and regulations (collectively “laws”), including, but not limited to, those issued by COUNTY in its governmental capacity and all other laws applicable t o the services at the time services are provided to and accepted by COUNTY. CONTRACTOR acknowledges that COUNTY is relying on CONTRACTOR to ensure such compliance, and pursuant to the requirements of the Insurance and Indemnification section, CONTRACTOR agrees that it shall defend, indemnify and hold COUNTY and COUNTY Indemnitees harmless from all liability, damages, costs and expenses arising from or related to a violation of such laws.
CONTRACTOR shall remain in compliance and in good standing, maintaini ng current and active business entity and/or nonprofit registration status, with all applicable federal, state and local registration requirements at the time of execution of the contract through the duration of the term of the Contract, and shall provide annual confirmation of current and active status to COUNTY through the term of the Contract.
In the performance of this Agreement, CONTRACTOR shall comply with all applicable provisions of the California Welfare and Institutions Code (WIC); Title 45 of the Code of Federal Regulations (CFR); implementing regulations under 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards; Title 48 CFR Section 31.2; and all applicable laws and regulations of the United States, State of California, County of Orange, and County of Orange Social Services Agency, and all administrative regulations, 14 FCK0220-A3 Page 4 of 13 December 17, 2024
rules, and policies adopted thereunder, as each and all may now exist or be hereafter amended.
5.2.1 For federally funded Agreements in the amount of $25,000 or more, CONTRACTOR certifies that its officers and/or principals are not debarred or suspended from federal financial assistance programs and/or activities.
5.3 CONTRACTOR shall cooperate with the California Department of Social Services (CDSS) on the implementation, monitoring, and evaluation of the State’s Child Abuse and Neglect Prevention and Intervention Program, and shall comply, to the mutual satisfaction of COUNTY and CDSS, with any and all reporting and evaluation requirements established by CDSS.
2. Paragraph 7 of the Agreement is hereby amended to read as follows:
7. SUBCONTRACTS
7.1 No performance of this Agreement or any portion thereof may be subcontracted or otherwise delegated by CONTRACTOR, in whole or in part, without first obtaining the prior written consent of. COUNTY. Any attempt by CONTRACTOR to subcontract or delegate any performance of this Contract without the prior express written consent of COUNTY shall be invalid and shall constitute a material breach of this Agreement , and any attempted assignment or delegation in derogation of this paragraph shall be void.
In the event that CONTRACTOR is authorized by COUNTY to subcontract, this Contract shall take precedence over the terms of the agreement between CONTRACTOR and subcontractor, and any agreement between CONTRACTOR and a subcontractor shall incorporate by reference the terms of this Contract.
CONTRACTOR shall remain responsible for the performance of this Contract and indemnification of COUNTY notwithstanding the COUNTY’s consent to CONTRACTOR’s request for approval of a subcontractor. Under no circumstances shall COUNTY be required to directly monitor the performance of any subcontractor. All work performed by a subcontractor must be monitored by CONTRACTOR and must meet the approval of the County of Orange pursuant to the terms of this Contract.
7.1.1 Subcontracts of $50,000 or less
15 FCK0220-A3 Page 5 of 13 December 17, 2024
7.1.1.1 CONTRACTOR shall develop a standard form Purchase Order, subject to prior written approval of ADMINISTRATOR, to be utilized for the purchase of services by CONTRACTOR when the cumulative total cost of the services to be provided by any organization is anticipated to be fifty thousand dollars ($50,000) or less during the term of this Agreement. The basis for costs incurred by any such Purchase Order(s) shall be the actual cost of providing services or the usual and customary charges established by the organization(s) providing the services.
7.1.2 Subcontracts in excess of $50,000
7.1.2.1 CONTRACTOR shall develop and submit for approval to ADMINISTRATOR a system for the procurement of subcontracts with any organization in which the total cumulative cost of services provided by any single organization is anticipated to exceed fifty thousand dollars ($50,000) during the term of this Agreement. CONTRACTOR’s proposed procurement system
shall take into consideration such factors as: degree of price competition; pricing policies and techniques; experience and quality of service; methods of evaluating subcontractor responsibility; relationship of subcontractor to CONTRACTOR; and planning, award, and post-award management of subcontracts, including internal audit procedures and monitoring of
subcontractor’s performance until completion of services.
7.1.2.2 Upon ADMINISTRATOR’s approval of CONTRACTOR’s
proposed procurement system, CONTRACTOR shall comply with such procurement system in obtaining subcontracts with a total cost in excess of fifty thousand dollars ($50,000) during the term of this Agreement. In addition, CONTRACTOR shall obtain ADMINISTRATOR’s written consent prior to entering into a subcontract with any organization when the total cumul ative cost of services to be provided by that organization is anticipated to 16 FCK0220-A3 Page 6 of 13 December 17, 2024
exceed fifty thousand dollars ($50,000) during the term of this Agreement.
7.1.2.3 CONTRACTOR and its subcontractor(s) shall establish and maintain accurate and complete financial records related to services provided under the terms of this Agreement. Such records may be subject to the satisfaction of ADMINISTRATOR, and to the examination and audit by ADMINISTRATOR or designee, for a period of five (5) years, or until any pending audit is completed.
3. Subparagraph 9.4.3 of the Agreement is hereby amended to read as follows:
9.4.3 The following websites provide Civil Rights information, publications and/or forms:
9.4.3.1 https://www.cdss.ca.gov/Portals/9/FMUForms/M-
P/PUB470.pdf?ver=2021-05-10-164956-817 (Pub 470 - Your rights Under Adult Protective Services)
9.4.3.2 http://www.cdss.ca.gov/inforesources/Civil-Rights/Your-Rights-Under- California-Welfare-Program ( Pub 13 – Your Rights Under California Welfare Programs)
9.4.3.3 http://ssa.ocgov.com/about/services/contact/complaints/comply [Social Services Agency (SSA) Contractor and Vendor Compliance page]
4. Paragraph 15 of the Agreement is hereby amended to read as follows:
15. CONFLICT OF INTEREST
15.1 CONTRACTOR shall exercise reasonable care and diligence to prevent any actions or conditions that could result in a conflict with the best interests of COUNTY. This obligation shall apply to CONTRACTOR, CONTRACTOR’s officers, directors, employees, agents, and subcontractors associated with accomplishing work and services hereunder. CONTRACTOR’s efforts shall include, but not be limited to establishing precautions to prevent its employees, agents, and subcontractors from providing or offering gifts, entertainment, payments, loans or other considerations which could be deemed to influence or appear to influence COUNTY staff or elected officers from acting in the best interests of COUNTY. 17 FCK0220-A3 Page 7 of 13 December 17, 2024
15.2 CONTRACTOR shall notify COUNTY, in writing, of any potential or actual conflicts of interest between CONTRACTOR and COUNTY that may arise prior to, or during the period of, Contract performance, including, but not limited to, whether any known COUNTY public officer’s child is an officer or director of, or has an ownership interest of ten (10) percent or more in, CONTRACTOR. While CONTRACTOR will be required to provide this information without prompting from COUNTY any time there is a change regarding conflict of interest, CONTRACTOR must also provide an update to COUNTY upon request by COUNTY.
15.3 County of Orange Board of Supervisors policy prohibits its employees from engaging in activities involving a conflict of interest. CONTRACTOR shall not, during the period of this Agreement , employ any COUNTY employee for any purpose.
5. Subparagraph 21.1 of the Agreement is hereby amended to read as follows:
21.1 Maximum Contractual Obligation
The maximum obligation of COUNTY under this Agreement shall not exceed the amount of $1,742,400, or actual allowable costs, whichever is less. The estimated annual amount for each twelve (12) month period is as follows:
21.1.1 Year One: $310,000 for July 1, 2020, through June 30, 2021;
21.1.2 Year Two: $300,000 for July 1, 2021, through June 30, 2022;
21.1.3 Year Three: $370,800 for July 1, 2022, through June 30, 2023;
21.1.4 Year Four: $370,800 for July 1, 2023, through June 30, 2024; and
21.1.5 Year Five: $390,800 for July 1, 2024, through June 30, 2025.
6. Paragraph 32 of the Agreement is hereby amended to read as follows:
32. SECURITY
CONTRACTOR shall abide by the requirements in Attachments B and C which are hereby incorporated by reference into this Agreement and are attached hereto.
7. Paragraph 35 of the Agreement is hereby amended to read as follows:
35. SERVICES DURING EMERGENCY AND/OR DISASTER
18 FCK0220-A3 Page 8 of 13 December 17, 2024
35.1 CONTRACTOR acknowledges that service usage may surge during or after an emergency or disaster. For purposes of this Agreement, an emergency is defined as a sudden, urgent, usually unexpected occurrence or event requiring immediate action to protect the health and well -being of COUNTY residents. A disaster is defined as an occurrence that has resulted in property damage, deaths, and/or injuries to a community. Emergencies and/or disasters as described above may require resources or support beyond the local government’s capability and will typically involve a proclamation of a local emergency by the local governing body (e.g., city council, County Board of Supervisors, or S tate) and may be declared at the federal level by the President of the United States.
35.2 CONTRACTOR agrees to collaborate with COUNTY, on an urgent basis, to adjust service delivery in a manner that assists COUNT Y in meeting the needs of clients COUNTY identifies as being impacted by emergencies and/or disasters. Time limited adjustments may include , but are not limited to: providing se rvices at different location(s); assigning staff to work days or hours beyond typical work schedules or that may exceed contracted Full -Time Equivalents (FTEs); reassigning staff to an assignment in which their experience or skill is needed; and prioritizing services for staff as requested by COUNTY.
35.3 CONTRACTOR shall service COUNTY during emergencies and/or declared disaster under the same terms and conditions that apply during non- emergency/disaster conditions.
35.4 Emergency Publicity & Outreach: In response to natural disasters and local emergencies, at the direction of th e COUNTY, CONTRACTOR shall assist the COUNTY with publicity of COUNTY provided emergency benefits informational materials and messaging, to provide CONTRACTOR’s clientele with helpful emergency benefits and resource information during emergencies.
8. Paragraph 45 is hereby added to the Agreement to read as follows:
45. COOPERATIVE CONTRACT
45.1 This Contract is a cooperative contract and may be utilized by all County of Orange departments.
45.2 The provisions and pricing of this Contract may be extended, at the option of 19 FCK0220-A3 Page 9 of 13 December 17, 2024
Contractor, to any Municipal, County, Public Utility, Hospital, Educational Institution, or any other non-profit or governmental organization (the “Cooperative Program”). Parties in a Cooperative Program wishing to use this Contract will be responsible for issuing their own purchase documents / price agreements, providing for their own acceptance, and making any subsequent payments. Contractor shall be required to include in any agreement entered into with another agency or entity that is entered into pursuant to the provisions and pricing of this Contract a clause that binds the parties to the agreement to “indemnify, defend with counsel approved in writing by the County of Orange , California (“County”), and hold County, its elected and appointed officials, officers, employees, agents and those special districts and agencies which County’s Board of Supervisors acts as the governing Board (“County Indemnitees”) harmless from any cla ims, demands or liability of any kind or nature, including but not limited to personal injury or property damage, arising from or related to the services, products or other performance provided” under the agreement. Failure to so include this clause voids the Contract’s extension to a Cooperative Program and will be considered a material breach of this Contract and grounds for immediate Contract termination. The cooperative entities are responsible for obtaining all certificates of insurance and bonds requi red. The County of Orange makes no guarantee of usage by other users of this Contract.
9. Subparagraph 3.2 of Exhibit A of the Agreement is hereby amended to read as follows:
3.2 CONTRACTOR’s holiday schedule shall not exceed the following holiday schedule which is as follows: New Year’s Day, Martin Luther King Jr. Day, President Lincoln’s Birthday, Presidents’ Day, Memorial Day, Independence Day, Labor Day, Native American Day , Veterans Day, Thanksgiving Day, Friday after Thanksgiving Day, and Christmas Day.
CONTRACTOR shall obtain prior written approval from ADMINISTRATOR for any closure outside of the holiday schedule and the hours listed in Subparagraph 3.1 of this Exhibit. Any unauthorized closure shall be deemed a material breach of this Agreement, pursuant to Paragraph 19, and shall not be reimbursed.
10. Subparagraph 6.4 of Exhibit A of the Agreement is hereby amended to read as follows:
6.4 CONTRACTOR shall use EA funds to meet the basic needs of PARTICIPANTS in support of services as described herein. Allowable costs include emergency food, 20 FCK0220-A3 Page 10 of 13 December 17, 2024
emergency clothing, diapers, medicine, hygiene items, household items, transportation payment assistance to access services, safety items, housing payment assistance and utility payment assistance, or o ther allowable costs , as approved in advance by ADMINISTRATOR. All purchases from EA funds in excess of five hundred dollars ($500) per FAMILY must be requested in advance and in writing for approval by ADMINISTRATOR. Housing payment assistance and utility payment assistance in excess of one thousand dollars ($1,000) per FAMILY shall be provided no more than one (1) time per fiscal year for each FAMILY, or as approved in advance and in writing by ADMINISTRATOR. CONTRACTOR shall research available community resource options prior to approving expenditures.
11. Subparagraph 8.6 of Exhibit A of the Agreement is hereby amended to read as follows:
8.6 In addition to the FaCT Registration form and/or FaCT Large Group Tracking form, the following assessment tool(s) required for each core service include:
Core Service Required Assessment Tool(s)
CMT CMT Tracking & Outcomes Log
Emergency Assistance Emergency Assistance Assessment
Information & Referral Services Information & Referral Tracking Log Family Support Services Family Development Matrix
Counseling Services Family Development Matrix
Parenting Education Family Development Matrix
Personal Empowerment Program PEP Pre/Post Test
12. Subparagraph 14.1 of Exhibit A of the Agreement is hereby amended to read as follows:
14.1 For the five (5) COUNTY fiscal years (July 1 through June 30) included during the term of this Agreement, the maximum budget for services provided pursuant to Exhibit A of this Agreement shall not exceed $1,742,400.
13. Subparagraph 14.4 of Exhibit A of the Agreement is hereby amended to read as follows:
14.4 The budget for services provided pursuant to Exhibit A of this Agreement is set forth as follows:
FRC Services
YEAR ONE YEAR
TWO
YEAR
THREE
YEAR
FOUR
YEAR FIVE
Direct Service Costs (1) $309,288 $299,288 $368,990 $368,990 $ 388,990 Indirect Costs (2) $ 712 $ 712 $ 1,810 $ 1,810 $ 1,810 21 FCK0220-A3 Page 11 of 13 December 17, 2024
TOTAL MAXIMUM
OBLIGATION:
$310,000 $300,000 $370,800 $370,800 $ 390,800
(1) Direct Service Costs are costs that are incurred and specifically allocable to the provision of services identified in this Agreement. Employee Benefits include contributions to 401k or retirement plans; health insurance; dental insurance; life insurance; long-term disability insurance; payroll taxes such as FICA, Federal Unemployment Tax, State Unemployment Tax, and Workers’ Compensation Tax, based on the currently prevailing rates ; and expense for accrued vacation time payout, for a separated employee, limited to the actual vacation time accrued during the fiscal year in which the expense is claimed, minus the actual vacation time used by the employee during said fiscal year.
(2) Indirect Costs are costs that are incurred for an organization’s common objectives and that cannot be readily identified with a particular final cost objective.
14. Attachment B is hereby added to the Agreement and is attached as follows.
15. Attachment C is hereby added to the Agreement and is attached as follows.
16. The Parties agree that separate copies of this Amendment may be signed by each of the Parties, and this Amendment will have the same force and effect as if the original had been signed by all Parties.
17. All other terms and conditions of the Contract shall remain the same and in full force and in effect.
22 FCK0220-A3 Page 12 of 13 December 17, 2024
IN WITNESS WHEREOF, the Parties hereto have executed this Amendment Three to Agreement on the date set forth opposite their signatures. If Contractor is a corporation, Contractor shall provide two signatures as follows: 1) the first signature must be either the Chairman of the Board, the President, or any Vice President; 2) the second signature must be that of the Secretary, an Assistant Secretary, the Chief Financial Officer, or any Assistant Treasurer. In the alternative, a single corporate signature is acceptable when accompanied by a corporate resolution or by- laws demonstrating the legal authority of the signature to bind the company.
Contractor: CITY OF GARDEN GROVE
__________________________________ __________________________________ Print Name Title
__________________________________ __________________________________ Signature Date
__________________________________ __________________________________ Print Name Title
__________________________________ __________________________________ Signature Date
Contractor: HUMAN OPTIONS, INC.
__________________________________ __________________________________ Print Name Title
__________________________________ __________________________________ Signature Date
Contractor: INTERVAL HOUSE
__________________________________ __________________________________ Print Name Title
__________________________________ __________________________________ Signature Date
23 FCK0220-A3 Page 13 of 13 December 17, 2024
County of Orange, a political subdivision of the State of California
Deputized Designee Signature:
__________________________________ _______Deputy Purchasing Agent _______ Print Name Title
__________________________________ __________________________________ Signature Date
APPROVED AS TO FORM
COUNTY COUNSEL
COUNTY OF ORANGE, CALIFORNIA
__________________________________ ___ Deputy County Counsel________ Print Name Title
__________________________________ __________________________________ Signature Dat e 24 FMK1520-A3 Page 1 of 6 November 13, 2024
ATTACHMENT B
COUNTY OF ORANGE INFORMATION TECHNOLOGY SECURITY PROVISIONS All Contractors with access to County data and/or systems shall establish and maintain policies, procedures, and technical, physical, and administrative safeguards designed to (i) ensure the confidentiality, integrity, and availability of all County data and any other confidential information that the Contractor receives, stores, maintains, processes, transmits, or otherwise accesses in connection with the provision of the contracted services, (ii) protect against any threats or hazards to the security or integrity of County data, systems, or other confidential information, (iii) protect against unauthorized access, use, or disclosure of personal or County confidential information, (iv) maintain reasonable procedures to prevent, detect, respond, and provide notification to the County regarding any internal or external security breaches, (v) ensure the return or appropriate disposal of personal information or other confidential information upon contract conclusion (or per retention standards set forth in the contract), and (vi) ensure that any subcontractor(s)/agent(s) that receives, stores, maintains, processes, transmits, or otherwise accesses County data and/or system(s) is in compliance with statements and the provisions of statements and services herein.
1. This County of Orange Information Technology Security Provisions document provides a high-level guide for contractors to understand the resiliency and cybersecurity expectations of the County. The County of Orange S ecurity Guidelines follow the latest National Institute of Standards and Technology (NIST) 800- 53 framework to ensure the highest levels of operational resiliency and cybersecurity.
Contractor, Contractor personnel, Contractor’s subcontractors, any person performing work on behalf of Contractor, and all other agents and representatives of Contractor will, at all times, comply with and abide by all County of Orange Information Technology Security Provisions (“Security Provisions”) that pertain to Contractor(s) in connection with the Services performed by Contractor(s) as set forth in the scope of work of this Contract. Any violations of the Security Provisions shall, in addition to all other available rights and remedies available to County, be cause for immediate termination of this Contract. Such Security Provisions include, but are not limited to, Attachment “C” - County of Orange Information Technology Security Guidelines, as applicable.
Contractor shall use industry best practices and methods with regard to confidentiality, integrity, availability, and the prevention, detection, response, and elimination of threat, by all appropriate means, of fraud, abuse, and other inappropriate or unauthorized access to County data and/or system(s) accessed in the performance of Services under this Contract.
2. The Contractor shall implement and maintain a written information security program that contains reasonable and appropriate security measures designed to safeguard the confidentiality, integrity, availability, and resiliency of County data and/or system(s). The Contractor shall review and update its information security program in accordance with contractual, legal, and regulatory requirements. Contractor shall provide to County a copy of the organization’s information security program and/or policies.
25 FMK1520-A3 Page 2 of 6 November 13, 2024
3. Information Access: Contractor shall use appropriate safeguards and security measures to ensure the confidentiality and security of all County data.
County may require all Contractor personnel, subcontractors, and affiliates approved by County to perform work under this Contract to execute a confidentiality and non- disclosure agreement concerning access protection and data security in the form provided by County.
County shall authorize, and Contractor shall issue, any necessary information- access mechanisms, including access IDs and passwords, and in no event shall Contractor permit any such mechanisms to be shared or used by other than the individual Contractor p ersonnel, subcontractor, or affiliate to whom issued. Contractor shall provide each Contractor personnel, subcontractors, or affiliates with only such level of access as is required for such individual to perform his or her assigned tasks and functions.
Throughout the Contract term, upon request from County but at least once each calendar year, Contractor shall provide County with an accurate, up-to-date list of those Contractor personnel and/or subcontractor personnel having access to County systems and/or County data, and the respective security level or clearance assigned to each such Contractor personnel and/or subcontractor personnel. County reserves the right to require the removal and replacement of Contractor personnel and/or subcontractor personnel at the County’s sole discretion. Removal and replacement shall be performed within 14 calendar days of notification by the County.
All County resources (including County systems), County data, County hardware, and County software used or accessed by Contractor: (a) shall be used and accessed by such Contractor and/or subcontractors personnel solely and exclusively in the performance of their assigned duties in connection with, and in furtherance of, the performance of Contractor’s obligations hereunder; and (b) shall not be used or accessed except as expressly permitted hereunder, or commercially exploited in any manner whatsoever, by Contractor or Contractor’s personnel and subcontractors, at any time.
Contractor acknowledges and agrees that any failure to com ply with the provisions of this paragraph shall constitute a breach of this Contract and entitle County to deny or restrict the rights of such non- complying Contractor personnel and/or subcontractor personnel to access and use the County data and/or system (s), as County in its sole discretion shall deem appropriate.
4. Data Security Requirements: Without limiting Contractor’s obligation of confidentiality as further described in this Contract, Contractor must establish, maintain, and enforce a data privacy program and an information and cyber security program, including safety, physical, and technical security and resiliency policies and procedures, that comply with the requirements set forth in this Contract and, to the extent such programs are consistent with and not less protective than the requirements set forth in this Contract and are at least equal to applicable best industry practices and standards (NIST 800-53).
Contractor also shall provide technical and organizational safeguards against accidental, unlawful, or unauthorized access or use, destruction, loss, alteration, disclosure, transfer, commingling, or processing of such information that ensure a level of security appropriate to the risks presented by the processing of County Data,
26 FMK1520-A3 Page 3 of 6 November 13, 2024
Contractor personnel and/or subcontractor personnel and affiliates approved by County to perform work under this Contract may use or disclose County personal and confidential information only as permitted in this Contract. Any other use or disclosure requires express approval in writing by the County of Orange. No Contractor personnel and/or subcontractor personnel or affiliate shall duplicate, disseminate, market, sell, or disclose County personal and confidential information except as allowed in this Contract. Contra ctor personnel and/or subcontractor personnel or affiliate who access, disclose, market, sell, or use County personal and confidential information in a manner or for a purpose not authorized by this Contract may be subject to civil and criminal sanctions contained in applicable federal and state statutes.
Contractor shall take all reasonable measures to secure and defend all locations, equipment, systems, and other materials and facilities employed in connection with the Services against hackers and others who may seek, without authorization, to disrupt, damage, modify, access, or otherwise use Contractor systems or the information found therein; and prevent County data from being commingled with or contaminated by the data of other customers or their user s of the Services and unauthorized access to any of County data.
Contractor shall also continuously monitor its systems for potential areas where security could be breached. In no case shall the safeguards of Contractor’s data privacy and information and cyber security program be less stringent than the safeguards used by County. Without limiting any other audit rights of County, County shall have the right to review Contractor’s data privacy and information and cyber security program prior to commencement of Services and from time to time during the term of this Contract.
All data belongs to the County and shall be destroyed or returned at the end of the contract via digital wiping, degaussing, or physical shredding as directed by County.
5. Enhanced Security Measures: County may, in its discretion, designate certain areas, facilities, or solution systems as ones that require a higher level of security and access control. County shall notify Contractor in writing reasonably in advance of any s uch designation becoming effective. Any such notice shall set forth, in reasonable detail, the enhanced security or access- control procedures, measures, or requirements that Contractor shall be required to implement and enforce, as well as the date on whic h such procedures and measures shall take effect.
Contractor shall and shall cause Contractor personnel and subcontractors to fully comply with and abide by all such enhanced security and access measures and procedures as of such date.
6. General Security St andards: Contractor will be solely responsible for the information technology infrastructure, including all computers, software, databases, electronic systems (including database management systems , email systems, auditing, and monitoring systems) and networks used by or for Contractor (“Contractor Systems”) to access County r esources (including County systems), County data or otherwise in connection with the Services and shall prevent unauthorized access to County r esources (including County systems) or County data through the Contractor Systems.
27 FMK1520-A3 Page 4 of 6 November 13, 2024
a) Contractor System(s) and Security: At all times during the contract term, Contractor shall maintain a level of security with regard to the Contractor Systems, that in all events is at least as secure as the levels of security that are common and prevalent in the industry and in accordance with industry best practices (NIST 800-53). Contractor shall maintain all appropriate administrative, physical, technical, and procedural safeguards to secure County data from data breach, protect County data and the Services from loss, corruption, unauthorized disclos ure, and from hacks, and the introduction of viruses, disabling devices, malware, and other forms of malicious and inadvertent acts that can disrupt County’s access and use of County data and the Services.
b) Contractor and the use of Email: Contractor, including Contractor’s employees and subcontractors, that are provided a County email address must only use the County email system for correspondence of County business. Contractor, including Contractor’s employees and subcontractors, must not access or use personal, non- County Internet (external) email systems from County networks and/or County computing devices. If at any time Contractor’s performance under this Contract requires such access or use, Contractor must submit a written request to County with justification for access or use of personal, non-County Internet (external) email systems from County networks and/or computing devices and obtain County’s express prior written approval.
Contractors who are not provided with a County email address, but need to transmit County data will be required to maintain and transmit County data in accordance with this Agreement.
7. Security Failures: Any failure by the Contractor to meet the requirements of this Contract with respect to the security of County data, including any related backup, disaster recovery, or other policies, practices or procedures, and any breach or violation by Contractor or its subcontractors or affiliates , or their employees or agents, of any of the foregoing, shall be deemed a material breach of this Contract and may result in termination and reimbursement to County of any fees prepaid by County prorated to the date of such termination. The remedy provided in this paragraph shall not be exclusive and is in addition to any other rights and remedies provided by law or under the Contract.
8. Security Breach Notification: In the event Contractor becomes aware of any act, error or omission, negligence, misconduct, or security incident including unsecure or improper data disposal, theft, loss, unauthor ized use and disclosure or access, that compromises or is suspected to compromise the security, availability, confidentiality, and/or integrity of County data or the physical, technical, administrative, or organizational safeguards required under this Contract that relate to the security, availability, confidentiality, and/or integrity of County data, Contractor shall, at its own expense, (1) immediately (or within 24 hours of potential or suspected breach), notify the County’s Chief Information Security Officer and County Privacy Officer of such occurrence; (2) perform a root cause analysis of the actual, potential, or suspected breach; (3) provide a remediation plan that is acceptable to County within 30 days 28 FMK1520-A3 Page 5 of 6 November 13, 2024
of verified breach, to address the occurrence of the breach and prevent any further incidents; (4) conduct a forensic investigation to determine what systems, data, and information have been affected by such event; and (5) cooperate with County and any law enforcement or regulatory officials investiga ting such occurrence, including but not limited to making available all relevant records, forensics, investigative evidence, logs, files, data reporting, and other materials required to comply with applicable law or as otherwise required by County and/or any law enforcement or regulatory officials, and (6) perform or take any other actions required to comply with applicable law as a result of the occurrence (at the direction of County).
County shall make the final decision on notifying County officials, entities, employees, service providers, and/or the general public of such occurrence, and the implementation of the remediation plan. If notification to particular persons is required under any law or pursuant to any of County’s privacy or security policies, then notifications to all persons and entities who are affected by the same event shall be considered legally required. Contractor shall reimburse County for all notification and related costs incurred by County arising out of or in connection with any such occurrence due to Contractor’s acts, errors or omissions, negligence, and/or misconduct resulting in a requirement for legally required notifications.
In the case of a breach , Contractor shall provide third- party credit and identity monitoring services to each of the affected individuals for the period required to comply with applicable law, or, in the absence of any legally required monitoring services, for no less than twelve (12) months following the date of notification to such individuals.
Contractor shall indemnify, defend with counsel approved in writing by County, and hold County and County Indemnitees harmless from and against any and all claims, including reasonable attorney’s fees, costs, and expenses incidental thereto, which may be suffered by, accrued against, charged to, or recoverable from County in connection with the occurrence.
Notification shall be sent to:
Andrew Alipanah, MBA, CISSP
Chief Information Security Officer
721 S. Parker St.
Suite 200
Orange, CA 92868
Phone: (714) 567-7611
[email protected]
Linda Le, CHPC, CHC, CHP
County Privacy Officer
721 S. Parker St.
Suite 200
Orange, CA 92868
Phone: (714) 834-4082
[email protected]
9. Security Audits: Contractor shall maintain complete and accurate records relating to its system and Organization Controls (SOC) Type II audits or equivalent’s data protection practices, internal and external audits, and the security of any of County-hosted content, including any confidentiality, integrity, and availability operations (data hosting, backup, disaster recovery, external dependencies management, vulnerability testing, penetration testing, patching, or other related policies, practices, standards, or procedures). 29 FMK1520-A3 Page 6 of 6 November 13, 2024
Contractor shall inform County of any internal/external security audit or assessment performed on Contractor’s operations, information and cyber security program, disaster recovery plan, and prevention, detection, or response protocols that are related to hosted County content, within sixty (60) calendar days of such audit or assessment. Contractor will provide a copy of the audit report to County within thirty (30) days after Contractor’s receipt of request for such report(s).
Contractor shall reasonably cooperate with all County security reviews and testing, including but not limited to penetration testing of any cloud- based solution provided by Contractor to County under this Contract. Contractor shall implement any required s afeguards as identified by County or by any audit of Contractor’s data privacy and information/cyber security program.
In addition, County has the right to review Plans of Actions and Milestones (POA&M) for any outstanding items identified by the SOC 2 T ype II report requiring remediation as it pertains to the confidentiality, integrity, and availability of County data. County reserves the right, at its sole discretion, to immediately terminate this Contract or a part thereof without limitation and without liability to County if County reasonably determines Contractor fails or has failed to meet its obligations under this section.
10. Business Continuity and Disaster Recovery (BCDR):
For the purposes of this section, “Recovery Point Objectives” means the maximum age of files (data and system configurations) that must be recovered from backup storage for normal operations to resume if a computer, system, or network goes down as a result of a hardware, program, or communications failure (establishing the data backup schedule and strategy). “Recovery Time Objectives” means the maximum duration of time and a service level within which a business process must be restored after a disaster (or disruption) in order to avoid unacceptable consequences associated with a loss of functionality.
The Contractor shall maintain a comprehensive risk management program focused on managing risks to County operations and data, including mitigation of the likelihood and impact of an adverse event occurring that would negatively af fect contracted services and operations of the County. Business continuity management will enable the Contractor to identify and minimize disruptive risks and restore and recover hosted County business-critical services and/or data within the agreed terms following an adverse event or other major business disruptions. Recovery and timeframes may be impacted when events or disruptions are related to dependencies on third- parties. The County and Contractor will agree on Recovery Point Objectives and Recovery Time Objectives (as needed)) and will periodically review these objectives. Any disruption to services of system will be communicated to the County within 4 hours, and every effort shall be undertaken to restore contracted services, data, operations, security, and functionality.
All data and/or systems and technology provided by the Contractor internally and through third- party vendors shall have resiliency and redundancy capabilities to achieve high availability and data recoverability. Contractor Systems shall be designed, where practical and possible, to ensure continuity of service(s) in the event of a disruption or outage. 30 County of Orange
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ATTACHMENT C
1 ASSET MANAGEMENT
Asset management establishes an organization’s inventory of fixed and controlled assets and defines how these assets are managed during their lifecycle to ensure sustained productivity in support of the organization’s critical services. An event that disrupts an asset can inhibit the organization from achieving its mission. An asset management program helps identify appropriate strategies that shall allow the assets to maintain productivity during disruptive events. There are four broad categories of assets : people, information, technology, and facilities.
The Cybersecurity Program strives to achieve and maintain appropriate protection of IT assets. Loss of accountability of IT assets could result in a compromise or breach of IT systems and/or a compromise or breach of sensitive or privacy data. All vendors who contract with the County of Orange ("County") shall work cooperatively to assist County in achieving the objectives and abide by the applicable terms under these Guidelines at all times during the term of its contract with County.
1.1 GOALS AND OBJECTIVES
1.1.1 Services are identified and prioritized.
1.1.2 Assets are inventoried, and the authority and responsibility for these assets is established.
1.1.3 The relationship between assets and the services they support is established.
1.1.4 The asset inventory is managed.
1.1.5 Access to assets is managed.
1.1.6 Information assets are categorized and managed to ensure the sustainment and protection of the critical service.
1.1.7 Facility assets supporting the critical service are prioritized and managed.
1.2 ASSET MANAGEMENT POLICY STATEMENTS
1.2.1 Services Inventory
1.2.1.1 Departments shall maintain an inventory of its services. This listing shall be used by the department to assist with its risk management analysis.
1.2.2 Asset Inventory – Information
1.2.2.1 All information that is created or used within the County’s trusted environment in support of County business activities shall be considered the property of the County. All County property shall be used in compliance with this policy.
1.2.2.2 County information is a valuable asset and shall be protected from unauthorized disclosure, modification, or destruction. Prudent information security standards and practices shall be implemented to ensure that the integrity, confidentiality, and availability of County information are not compromised. All County information shall be protected from the time of its creation through its useful life and authorized disposal.
1.2.2.3 Departments shall establish internal procedures for the secure handling and storage of all electronically maintained County information that is owned or controlled by the department. 31 County of Orange
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1.2.3 Asset Inventory - Technology (Devices, Software)
1.2.3.1 Departments shall maintain an inventory of all department managed devices that connect to County network resources or processes, stores, or transmits County data including but not limited to:
• Desktop computers,
• Laptop Computers,
• Tablets (iPads and Android devices),
• Mobile Phones (basic cell phones),
• Smart Phones (iPhones, Blackberry, Windows Phones and Android Phones), • Servers,
• Storage devices,
• Network switches,
• Routers,
• Firewalls,
• Security Appliances,
• Internet of Things (IoT) devices,
• Printers,
• Scanners,
• Kiosks and Thin clients,
• Mainframe Hardware, and
• VoIP Phones.
1.2.3.2 Asset inventory shall map assets to the services they support.
1.2.3.3 Departments shall adopt a standard naming convention for devices (naming convention to be utilized as devices are serviced or purchased) that, at a minimum, includes the following:
• Department (see Appendix A for an example Department Listing) • Facility (see Appendix B for an example Facility Listing) • Device Type (see Appendix C for an example Device Type Listing)
1.2.3.4 Each department shall ensure that all software used on County systems and in the execution of County business shall be used legally and in compliance with licensing agreements.
1.2.4 Asset Inventory - Facilities
1.2.4.1 Departments shall maintain an inventory of its facilities. This listing shall be used by the department to assist with its risk management analysis.
1.2.4.2 Departments shall identify the facilities used by its critical services.
1.2.5 Access Controls
1.2.5.1 Departments shall establish a procedure that ensures only users with legitimate business needs to access County IT resources are provided with user accounts.
1.2.5.2 Access to County information systems and information systems data shall be based on each user’s access privileges. Access controls shall ensure that even legitimate users cannot access stored information unless they are authorized to do so. Access control should start by denying access to everything, and then explicitly granting access according to the “need to know” principle.
1.2.5.3 Access to County information and County information assets should be based on the principle 32 County of Orange
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of “least privilege,” that is, grant no user greater access privileges to the information or assets than County responsibilities demand.
1.2.5.4 The owner of each County system, or their designee, provides written authorization for all internal and external user access.
1.2.5.5 All access to internal County computer systems shall be controlled by an authentication method involving a minimum of a user identifier (ID) and password combination that provides verification of the user’s identity.
1.2.5.6 All County workforce members are to be assigned a unique user ID to access the network.
1.2.5.7 A user account shall be explicitly assigned to a single, named individual. No group or shared computer accounts are permissible except when necessary and warranted due to legitimate business needs. Such need shall be documented prior to account creation and accounts activated only when necessary.
1.2.5.8 User accounts shall not be shared with others including, but not limited to, someone whose access has been denied or terminated.
1.2.5.9 Departments shall conduct regular reviews of the registered users’ access level privileges.
System owners shall provide user listings to departments for confirmation of user’s access privileges.
1.2.6 Asset Sanitation/Disposal
1.2.6.1 Unless approved by County management, no County computer equipment shall be removed from the premises.
1.2.6.2 Prior to re-deployment, storage media shall be appropriately cleansed to prevent unauthorized exposure of data.
1.2.6.3 Surplus, donation, disposal or destruction of equipment containing storage media shall be appropriately disposed according to the terms of the equipment disposal services contract.
1.2.6.4 Sanitization methods for media containing County information shall be in accordance with NSA standards (for example, clearing, purging, or destroying).
1.2.6.5 Disposal of equipment shall be done in accordance with all applicable County, state or federal surplus property and environmental disposal laws, regulations or policies. 33 County of Orange
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2 CONTROLS MANAGEMENT
The Controls Management domain focuses on the processes by which an organization plans, defines, analyzes, and assesses the controls that are implemented internally. This process helps the organization ensure the controls management objectives are satisfied.
This domain focuses on the resilience controls that allow an organization to operate during a time of stress.
These resilience controls are implemented in the organization at all levels and require various levels of management and staff to plan, define, analyze, and assess.
2.1 GOALS AND OBJECTIVES
2.1.1 Control objectives are established.
2.1.2 Controls are implemented.
2.1.3 Control designs are analyzed to ensure they satisfy control objectives.
2.1.4 Internal control system is assessed to ensure control objectives are met.
2.2 CONTROL MANAGEMENT POLICY STATEMENTS
2.2.1 Physical and Environmental Security
2.2.1.1 Procedures and facility hardening measures shall be adopted to prevent attempts at and detection of unauthorized access or damage to facilities that contain County information systems and/or processing facilities.
2.2.1.2 Restricted areas within facilities that house sensitive or critical County information systems shall, at a minimum, utilize physical access controls designed to permit access by authorized personnel only.
2.2.1.3 Physical protection measures against damage from external and environmental threats shall be implemented by all departments as appropriate.
2.2.1.4 Access to any office, computer room, or work area that contains sensitive information shall be physically restricted from unauthorized access.
2.2.1.5 Access points such as delivery and loading areas and other points where unauthorized persons may enter the premises shall be controlled and, if possible, isolated from information processing facilities to avoid unauthorized access. An example of this would be separating the two areas by a badge-only accessible door.
2.2.1.6 Continuity of power shall be provided to maintain the availability of critical equipment and information systems.
2.2.1.7 Power and telecommunications cabling carrying data or supporting information services shall be protected from interception or damage. Different, yet appropriate methods shall be utilized for internal and external cabling.
2.2.1.8 Equipment shall be properly maintained to ensure its continued availability and integrity.
2.2.1.9 All shared IT infrastructure by more than one department shall meet countywide security policy for facility standards, availability, access, data & network security. 34 County of Orange
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2.2.2 Network Segmentation
NOTE: This section is applicable to Departments that manage their own network devices.
2.2.2.1 Segment (e.g., VLANs) the network into multiple, separate zones (based on trust levels of the information stored/transmitted) to provide more granular control of system access and additional intranet boundary defenses. Whenever information flows over a network of lower trust level, the information shall be encrypted.
2.2.2.2 Segment the network into multiple, separate zones based on the devices (servers, workstations, mobile devices, printers, etc.) connected to the network.
2.2.2.3 Create separate network segments (e.g., VLANs) for BYOD (bring your own device) systems or other untrusted devices.
2.2.2.4 The network infrastructure shall be managed across network connections that are separated from the business use of that network, relying on separate VLANs or, preferably, on entirely different physical connectivity for management sessions for network devices.
2.2.3 Mobile Computing Devices
To ensure that Mobile Computing Devices (MCDs) do not introduce threats into systems that process or store County information, departments’ management shall:
2.2.3.1 Establish and manage a process for authorizing, issuing and tracking the use of MCDs.
2.2.3.2 Permit only authorized MCDs to connect to County information assets or networks that store, process, transmit, or connects to County information and information assets.
2.2.3.3 Implement applicable access control requirements in accordance with this policy, such as the enforcement of a system or device lockout after 15 minutes of inactivity requiring re-entering of a password to unlock.
2.2.3.4 Install an encryption algorithm that meets or exceeds industry recommended encryption standard for any MCD that will be used to store County information. See Section on Encryption.
2.2.3.5 Ensure that MCDs are configured to restrict the user from circumventing the authentication process.
2.2.3.6 Provide security awareness training to County employees that informs MCD users regarding MCD restrictions.
2.2.3.7 Label MCDs with County address and/or phone number so that the device can be returned to the County if recovered.
2.2.3.8 The installation of any software, executable, or other file to any County computing device is prohibited if that software, executable, or other file downloaded by, is owned by, or was purchased by an employee or contractor with his or her own funds unless approved by the department. If the device (“i” device or smartphone, only) complies with the mobile device management security standards (see section 9.2.3 Mobile Computing Devices), this is not applicable.
2.2.4 Personally Owned Devices
Personal computing devices include, but are not limited to, removable media such as thumb or USB drives, external hard drives, laptop or desktop computers, cellular phones, or personal digital assistants (PDA's) owned by or purchased by employees, contract personnel, or other non-County users.
2.2.4.1 The connection of any computing device not owned by the County to a County network (except the Public Wi-Fi provided for public use) or computing device is prohibited unless previously 35 County of Orange
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approved.
2.2.4.2 The County authorizes the use of personal devices to access resources that do not traverse the County network directly. Such resources include County’s Microsoft Office 365 environment, OC Expediter, and VTI timesheet applications, to name a few. Access to some agency specific applications, e.g., applications that are subject to compliance regulations may require prior approval of the County CISO and the associated Department Head.
2.2.4.3 The County will respect the privacy of a user’s voluntary use of a personally owned device to access County IT resources.
2.2.4.4 The County will only request access to the personally owned device in order to implement security controls; to respond to litigation hold (aka: e-discovery) requests arising out of administrative, civil, or criminal directives, Public Record Act requests, and subpoenas; or as otherwise required or permitted by applicable state or federal laws. Such access will be performed by an authorized technician or designee using a legitimate software process.
2.2.5 Logon Banners and Warning Notices
2.2.5.1 At the time of network login, the user shall be presented with a login banner.
2.2.5.2 All computer systems that contain or access County information shall display warning banners informing potential users of conditions of use consistent with state and federal laws.
2.2.5.3 Warning banners shall remain on the screen until the user takes explicit actions to log on to the information system.
2.2.5.4 The banner message shall be placed at the user authentication point for every computer system that contains or accesses County information. The banner message may be placed on an initial logon screen in situations where the logon provides access to multiple computer systems.
2.2.5.5 At a minimum, banner messages shall provide appropriate privacy and security information and shall contain information informing potential users that:
• User is accessing a government information system for conditions of use consistent with state and federal information security and privacy protection laws. • System usage may be monitored, recorded, and subject to audit. • Unauthorized use of the system is prohibited and subject to criminal and civil penalties. • Use of the system indicates consent to monitoring and recording.
2.2.6 Authentication
2.2.6.1 Authenticate user identities at initial connection to County resources.
2.2.6.2 Authentication mechanisms shall be appropriate to the sensitivity of the information contained.
2.2.6.3 Users shall not receive detailed feedback from the authenticating system on failed logon attempts.
2.2.7 Passwords
2.2.7.1 County approved password standards and/or guidelines shall be applied to access County systems. These standards extend to mobile devices (see Section 9.2.4 Mobile Computing Devices for additional guidance on mobile devices) and personally owned devices used for work (see Section 9.2.5 Personally Owned Devices for additional guidance on personally owned devices).
2.2.7.2 Passwords are a primary means to control access to systems and shall therefore be selected, used, and managed to protect against unauthorized discovery or usage. Passwords shall satisfy the following complexity rule:
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• Passwords will contain a minimum of one upper case letter • Passwords will contain a minimum of one lower case letter • Passwords will contain a minimum of one number: 1- 0
• Passwords will contain a minimum of one symbol: !,@,#,$,%,^,&,*,(,) • Password characters will not be sequential (Do not use: ABCD , This is ok: ACDB) • Passwords characters will not be repeated in a row (Do not use: P@$$S. This is ok:
P@$S$)
• COMPLEX PASSWORD EXAMPLE: P@$SWoRd13
2.2.7.3 Passwords shall have a minimum length of 8 characters.
2.2.7.4 Passwords shall not be reused for twelve iterations.
2.2.7.5 Departments shall require users to change their passwords periodically (e.g., every 90 days at the maximum). Changing passwords more often than 90 days is encouraged.
2.2.7.6 Network and application systems shall be configured to enforce automatic expiration of passwords at regular intervals (e.g., every 90 days at the maximum) when the technology is feasible or available.
2.2.7.7 Newly created accounts shall be assigned a randomly generated password prior to account information being provided to the user.
2.2.7.8 No user shall give his or her password to another person under any circumstances. Workforce members who suspect that their password has become known by another person shall change their password immediately and report their suspicion to management in accordance with Section 12: Incident Management.
2.2.7.9 Users who have lost or forgotten their passwords shall make any password reset requests themselves without using a proxy (e.g., another County employee) unless approved by management. Prior to processing password change requests, the requester shall be authenticated to the user account in question. (e.g., Verification with user’s supervisor or the use of passphrases can be used for this authentication process.) New passwords shall be provided directly and only to the user in question.
2.2.7.10 When technologically feasible, a new or reset password shall be set to expire on its initial use at log on so that the user is required to change the provided password to one known only to them.
2.2.7.11 All passwords are to be treated as sensitive information.
2.2.7.12 User Accounts shall be locked after five consecutive invalid logon attempts within a 24- hour period. The lockout duration shall be at least 30 minutes or until a system administrator enables the user ID after investigation. These features shall be configured as indicated when the technology is feasible or available.
2.2.7.13 All systems containing sensitive information shall not allow users to have multiple concurrent sessions on the same system when the technology is feasible or available.
2.2.8 Inactivity Timeout and Restricted Connection Times
2.2.8.1 Automatic lockouts for system devices, including workstations and mobile computing devices (refer to Section 9.2.4 Mobile Computing Devices), after no more than 15 minutes of inactivity.
2.2.8.2 Automated screen lockouts shall be used wherever possible using a set time increment (e.g., 15 minutes of non-activity). In situations where it is not possible to automate a lockout, operational procedures shall be implemented to instruct users to lock the terminal or equipment so that unauthorized individuals cannot make use of the system. Once logged on, workforce members shall not leave their computer unattended or available for someone else to use. 37 County of Orange
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2.2.8.3 When deemed necessary, user logins and data communications may be restricted by time and date configurations that limit when connections shall be accepted.
2.2.9 Account Monitoring
2.2.9.1 Access to a County network and its resources shall be strictly controlled, managed, and reviewed to ensure only authorized users gain access based on the privileges granted. (e.g., Kiosks provide physical and public access to County networks. These shall be secured to ensure County resources are not accessed by unauthorized users.)
2.2.9.2 The control mechanisms for all types of access to County IT resources by contractors, customers or vendors are to be documented.
2.2.9.3 Monitor account usage to determine dormant accounts that have not been used for a given period, such as 45 days, notifying the user or user’s manager of the dormancy.
2.2.9.4 After a longer period, such as 60 days, the account shall be disabled by the system when the technology is feasible or available.
2.2.9.5 On a periodic basis, such as quarterly or at least annually, departments shall require that managers match active employees and contractors with each account belonging to their managed staff. Security or system administrators shall then determine whether to disable accounts that are not assigned to active employees or contractors.
2.2.10 Administrative Privileges
2.2.10.1 Systems Administrators shall use separate administrative accounts, which are different from their end user account (required to have an individual end user account), to conduct system administration tasks.
2.2.10.2 Administrative accounts shall only be granted to individuals who have a job requirement to conduct systems administration tasks.
2.2.10.3 Administrative accounts shall be requested in writing and must be approved by the Department Head or designated representative (e.g., DISO) using the Security Review and Approval Process.
2.2.10.4 Systems Administrator accounts that access County enterprise-wide systems or have enterprise-wide impact shall be approved by the CISO using the Security Review and Approval Process.
2.2.10.5 Systems Administrators shall use separate administrative accounts to manage Mobile Device Management (MDM) platforms but may use the local user’s credentials when configuring a mobile phone or tablet device.
2.2.10.6 All passwords for privileged system-level accounts (e.g., root, enable, OS admin, application administration accounts, etc.) shall comply with Section 9.2.8.
2.2.11 Remote Access
2.2.11.1 Departments shall take appropriate steps, including the implementation of appropriate encryption, user authentication, and virus protection measures, to mitigate security risks associated with allowing users to use remote access or mobile computing methods to access County information systems.
2.2.11.2 Remote access privileges shall be granted to County workforce members only for legitimate business needs and with the specific approval of department management. 38 County of Orange
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2.2.11.3 All remote access implementations that utilize the County’s trusted network environment and that have not been previously deployed within the County shall be submitted to and reviewed by OCIT Enterprise Privacy and Cybersecurity. A memorandum of understanding (MOU) shall be utilized for this submittal and review process. This is required for any Suppliers utilizing remote access to conduct maintenance.
2.2.11.4 Remote sessions shall be terminated after 15 minutes of inactivity requiring the user to authenticate again to access County resources.
2.2.11.5 All remote access infrastructures shall include the capability to monitor and record a detailed audit trail of each remote access attempt.
2.2.11.6 All users of County networks and computer systems are prohibited from connecting and/or activating unauthorized dial-up or broadband modems on workstations, laptops, or other computing devices that are simultaneously connected to any County network.
2.2.11.7 Periodic assessments shall be performed to identify unauthorized remote connections. Results shall be used to address any vulnerabilities and prioritized according to criticality.
2.2.11.8 Users granted remote access to County IT infrastructure shall follow all additional policies, guidelines and standards related to authentication and authorization as if they were connected locally. For example, this applies when mapping to shared network drives.
2.2.11.9 Users attempting to use external remote access shall utilize a County-approved multi-factor authentication process.
2.2.11.10 All remote access implementations that involve non-County infrastructures shall be reviewed and approved by both the department DISO and OCIT Enterprise Privacy and Cybersecurity.
This approval shall be received prior to the start of such implementation. The approval shall be developed as a memorandum of understanding (MOU).
2.2.11.11 Remote access privileges to County IT resources shall not be given to contractors, customers or vendors unless department management determines that these individuals or organizations have a legitimate business need for such access. If such access is granted, it shall be limited to those privileges and conditions required for the performance of the specified work.
2.2.12 Wireless Access
2.2.12.1 Departments shall take appropriate steps, including the implementation of appropriate encryption, user authentication, device authentication and malware protection measures, to mitigate risks to the security of County data and information systems associated with the use of wireless network access technologies.
2.2.12.2 Only wireless systems that have been evaluated for security by both department management and OCIT Enterprise Privacy and Cybersecurity shall be approved for connectivity to County networks.
2.2.12.3 County data that is transmitted over any wireless network shall be protected in accordance with the sensitivity of the information.
2.2.12.4 All access to County networks or resources via unapproved wireless communication technologies is prohibited. This includes wireless systems that may be brought into County facilities by visitors or guests. Employees, contractors, vendors and customers are prohibited from connecting and/or activating wireless connections on any computing device that are simultaneously connected to any County network, either locally or remotely.
2.2.12.5 Each department shall make a regular, routine effort to ensure that unauthorized wireless networks, access points, and/or modems are not installed or configured within its IT environments. Any unauthorized connections described above shall be disabled immediately. 39 County of Orange
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2.2.13 System and Network Operations Management
2.2.13.1 Operating procedures and responsibilities for all County information processing facilities shall be formally authorized, documented, and updated.
2.2.13.2 Departments shall establish controls to ensure the security of the information systems networks that they operate.
2.2.13.3 Operational system documentation for County information systems shall be protected from unauthorized access.
2.2.13.4 System utilities shall be available to only those users who have a business case for accessing the specific utility.
2.2.14 System Monitoring and Logging
2.2.14.1 Systems operational staff shall maintain appropriate log(s) of activities, exceptions and information security events involving County information systems and services.
2.2.14.2 Each department shall maintain a log of all faults involving County information systems and services.
2.2.14.3 Logs shall be protected from unauthorized access or modifications wherever they reside.
2.2.14.4 The clocks of all relevant information processing systems and attributable logs shall be synchronized with an agreed upon accurate time source such as an established Network Time Protocol (NTP) service.
2.2.14.5 Auditing and logging of user activity shall be implemented on all critical County systems that support user access capabilities.
2.2.14.6 Periodic log reviews of user access and privileges shall be performed in order to monitor access of sensitive information.
2.2.15 Malware Defenses
2.2.15.1 Departments shall implement endpoint security on computing devices connected to the County network. Endpoint security may include one or more of the following software: anti -virus, anti- spyware, personal firewall, host-based intrusion detection (IDS), network-based intrusion detection (IDS), intrusion prevention systems (IPS), and whitelisting and blacklisting of applications, web sites, and IP addresses.
2.2.15.2 Special features designed to filter out malicious software contained in either email messages or email attachments shall be implemented on all County email systems.
2.2.15.3 Where feasible, any computing device, including laptops and desktop PCs, that has been connected to a non-County infrastructure (including employee home networks) and subsequently used to connect to the County network shall be verified that it is free from viruses and other forms of malicious software prior to attaining connectivity to the County network.
2.2.16 Data Loss Prevention
2.2.16.1 Departments shall implement host-based Data Loss Prevention (DLP) to reduce the risk of data breach related to sensitive information.
2.2.16.2 Departments shall deploy encryption software on mobile devices containing sensitive. See Section 9.2.19 Encryption for additional guidance.
2.2.17 Data Transfer
2.2.17.1 Agreements shall be implemented for the exchange of information between the County and other entities. As well as between departments.
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2.2.17.2 County information accessed via electronic commerce shall have security controls implemented based on the assessed risk.
2.2.18 Encryption
2.2.18.1 The decision to use cryptographic controls and/or data encryption in an application shall be based on the level of risk of unauthorized access and the sensitivity of the data that is to be protected.
2.2.18.2 The decision to use cryptographic controls and/or data encryption on a hard drive shall be based on the level of risk of unauthorized access and the sensitivity of the data that is to be protected.
2.2.18.3 Where appropriate, encryption shall be used to protect confidential (as defined by County policy) application data that is transmitted over open, untrusted networks, such as the Internet.
2.2.18.4 When cryptographic controls are used, procedures addressing the following areas shall be established by each department:
• Determination of the level of cryptographic controls
• Key management/distribution steps and responsibilities
2.2.18.5 Encryption keys shall be exchanged only using secure methods of communication.
2.2.19 System Acquisition and Development
2.2.19.1 Departments shall identify all business applications that are used by their users in support of primary business functions. This includes all applications owned and/or managed by the department as well as other business applications that are used by the department but owned and/or managed by other County organizations. All business applications used by a department shall be documented in the department’s IT security plan as well as their Business Impact Analysis (BIA).
2.2.19.2 An application owner shall be designated for each internal department business application.
2.2.19.3 All access controls associated with business applications shall be commensurate with the highest level of data used within the application. These same access controls shall also adhere to the policy provided in Section 7: Access Control.
2.2.19.4 Security requirements shall be incorporated into the evaluation process for all commercial software products that are intended to be used as the basis for a business application. The security requirements in question shall be based on requirements and standards specified in this policy.
2.2.19.5 In situations where data needs to be isolated because there would be a conflict of interest (e.g., DA and OCPD data cannot be shared), data security shall be designed and implemented to ensure that isolation.
Business Requirements
2.2.19.6 The business requirements definition phase of system development shall contain a review to ensure that the system shall adhere to County information security standards.
System Files
2.2.19.7 Operating system files, application software and data shall be secured from unauthorized use or access.
2.2.19.8 Clear-text data that results from testing shall be handled, stored, and disposed of in the same 41 County of Orange
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manner and using the same procedures as are used for production data.
2.2.19.9 System tests shall be performed on data that is constructed specifically for that purpose.
2.2.19.10 System testing shall not be performed on operational data unless the necessary safeguards are in place.
2.2.19.11 A combination of technical, procedural and physical safeguards shall be used to protect application source code from unintentional or unauthorized modification or destruction. All County proprietary information, including source code, needs to be protected through appropriate role-based access controls. An example of this is a change control tool that records all changes to source code including new development, updates, and deletions, along with check-in and check-out information.
System Development & Maintenance
2.2.19.12 The development of software for use on County information systems shall have documented change control procedures in place to ensure proper versioning and implementation.
2.2.19.13 When preparing to upgrade any County information systems, including an operating system, on a production computing resource; the process of testing and approving the upgrade shall be completed in advance in order to minimize potential security risks and disruptions to the production environment.
2.2.19.14 Any outside suppliers used for maintenance that are visitors to the facility are to be escorted and monitored while performing maintenance to critical systems. This does not apply to contractors that are assigned to work at the facility.
2.2.19.15 Systems shall be hardened, and logs monitored to ensure the avoidance of the introduction and exploitation of malicious code.
2.2.19.16 All County workforce members shall not create, execute, forward, or introduce computer code designed to self-replicate, damage, or impede the performance of a computer’s memory, storage, operating system, or application software.
2.2.19.17 In conjunction with other access control policies, any opportunity for information leakage shall be prevented through good system design practices.
2.2.19.18 Departments are responsible for managing outsourced software development related to department-owned IT systems.
System Requirements
Any system that processes or stores County Information shall:
2.2.19.19 Baseline configuration shall incorporate Principle of Least Privilege and Functionality.
2.2.19.20 Systems shall be deployed where feasible to utilize existing County authentication methods.
2.2.19.21 Session inactivity timeouts shall be implemented for all access into and from County networks.
2.2.19.22 All applications are to have access controls unless specifically designated as a public access resource.
2.2.19.23 Meet the password requirements defined in Section 9.2.8: Passwords.
2.2.19.24 Strictly control access enabling only privileged users or supervisors to override system controls or the capability of bypassing data validation or editing problems.
2.2.19.25 Monitor special privilege access, e.g., administration accounts.
2.2.19.26 Restrict authority to change master files to persons independent of the data processing function. 42 County of Orange
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2.2.19.27 Have access control mechanisms to prevent unauthorized access or changes to data, especially, the server file systems that are connected to the Internet, even behind a firewall.
2.2.19.28 Be capable of routinely monitoring the access to automated systems containing County Information.
2.2.19.29 Log all modifications to the system files.
2.2.19.30 Limit access to system utility programs to necessary individuals with specific designation.
2.2.19.31 Maintain audit logs on a device separate from the system being monitored.
2.2.19.32 Delete or disable all default accounts.
2.2.19.33 Restrict access to server file-system controls to ensure that all changes such as direct write, write access to system areas and software or service changes shall be applied only through the appropriate change control process.
2.2.19.34 Restrict access to server-file-system controls that allow access to other users’ files.
2.2.19.35 Ensure that servers containing user credentials shall be physically protected, hardened and monitored to prevent inappropriate use.
2.2.20 Procurement Controls
2.2.20.1 Breach notification requirements clause to be included in new or renewal contracts (once policy is effective) for systems containing sensitive information.
Contractor shall report to the County within 24 hours as defined in this contract when Contractor becomes aware of any suspected data breach of Contractor’s or Sub-Contractor’s systems involving County’s data.
2.2.20.2 Departments shall review all procurements and renewals for software and equipment (hosted/managed by the vendor) that transmits, stores, or processes sensitive information to ensure that vendors and contractors are aware of and are in compliance with County’s cybersecurity policies if applicable. Departments shall obtain documentation supporting the business partners, contractors, consultants, or vendors compliance with County’s cybersecurity policies such as:
• SOC 1 Type 2
• SOC 2 Type 2
• Security Certifications (ISO, PCI, etc.)
• Penetration Test Results
2.2.21 IT Services Provided to Public
2.2.21.1 Public access to County electronic information resources shall provide desired services in accordance with safeguards designed to protect County resources. All County electronic information resources are to be reviewed at least quarterly.
2.2.22 Removable Media
2.2.22.1 When no longer required, the contents of removable media shall be permanently destroyed or rendered unrecoverable in accordance with applicable department, County, state, or federal record disposal and/or retention requirement
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3 CONFIGURATION & CHANGE MANAGEMENT
Configuration and Change Management (CCM) is the process of maintaining the integrity of hardware, software, firmware, and documentation related to the configuration and change management process.
CCM is a continuous process of controlling and approving changes to information or technology assets or related infrastructure that support the critical services of an organization. This process includes the addition of new assets, changes to assets, and the elimination of assets.
Cybersecurity is an integral component to information systems from the onset of the project or acquisition through implementation of:
• Application and system security
• Configuration management
• Change control procedures
• Encryption and key management
• Software maintenance, including but not limited to, upgrades, antivirus, patching and malware detection response systems
As the complexity of information systems increases, the complexity of the processes used to create these systems also increases, as does the probability of accidental errors in configuration. The impact of these errors puts data and systems that may be critical to business operations at significant risk of failure that could cause the organization to lose business, suffer damage to its reputation, or close completely. Having a CCM process to protect against these risks is vital to the overall security posture of the organization.
3.1 GOALS AND OBJECTIVES
3.1.1 The lifecycle of assets is managed.
3.1.2 The integrity of technology and information assets is managed.
3.1.3 Asset configuration baselines are established.
3.2 CONFIGURATION & CHANGE MANAGEMENT POLICY STATEMENTS
3.2.1 Changes to all information processing facilities, systems, software, or procedures shall be strictly controlled according to formal change management procedures.
3.2.2 Changes impacting security appliances managed by OCIT (e.g., security architecture, security appliances, County firewall, Website listings, application listings, email gateway, administrative accounts) shall be reviewed by OCIT Enterprise Privacy and Cybersecurity in accordance with the County Security Review and Approval Process.
3.2.3 Only authorized users shall make any changes to system and/or software configuration files.
3.2.4 Only authorized users shall download and/or install operating system software, service- related software (such as web server software), or other software applications on County computer systems without prior written authorization from department IT management. This includes, but is not limited to, free software, computer games and peer-to-peer file sharing software.
3.2.5 Each department shall develop a formal change control procedure that outlines the process to be used for identifying, classifying, approving, implementing, testing, and documenting changes to its IT resources.
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3.2.6 Each department shall conduct periodic audits designed to determine if unauthorized software has been installed on any of its computers.
3.2.7 As appropriate, segregation of duties shall be implemented by all County departments to ensure that no single person has control of multiple critical systems and the potential for misusing that control.
3.2.8 Production computing environments shall be separated from development and test computing environments to reduce the risk of one environment adversely affecting another.
3.2.9 System capacity requirements shall be monitored, and usage projected to ensure the continual availability of adequate processing power, bandwidth, and storage.
3.2.10 System acceptance criteria for all new information systems and system upgrades shall be defined, documented, and utilized to minimize risk of system failure. 45 County of Orange
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4 VULNERABILITY MANAGEMENT
The Vulnerability Management domain focuses on the process by which organizations identify, analyze, and manage vulnerabilities in a critical service’s operating environment.
4.1 GOALS AND OBJECTIVES
4.1.1 Preparation for vulnerability analysis and resolution activities is conducted.
4.1.2 A process for identifying and analyzing vulnerabilities is established and maintained.
4.1.3 Exposure to identified vulnerabilities is managed.
4.1.4 The root causes of vulnerabilities are addressed.
4.2 VULNERABILITY MANAGEMENT POLICY STATEMENTS
4.2.1 Departments shall develop and maintain a vulnerability management process as part of its Cybersecurity Program.
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5 CYBERSECURITY INCIDENT MANAGEMENT
Information Security Incident Management establishes the policy to be used by each department in planning for, reporting on, and responding to computer security incidents. For these purposes an incident is defined as any irregular or adverse event that occurs on a County system or network. The goal of incident management is to mitigate the impact of a disruptive event. To accomplish this goal, an organization establishes processes that:
• detect and identify events
• triage and analyze events to determine whether an incident is underway • respond and recover from an incident
• improve the organization’s capabilities for responding to a future incident This domain defines management controls for addressing cyber incidents. The controls provide a consistent and effective approach to Cyber Incident Response aligned with Orange County’s Cyber Incident Response Plan, to include:
• Collection of evidence related to the cyber incident as appropriate • Reporting procedures including any and all statutory reporting requirements • Incident remediation
• Minimum logging procedures
• Annual testing of the plan
5.1 GOALS AND OBJECTIVES
5.1.1 A process for identifying, analyzing, responding to, and learning from incidents is established.
5.1.2 A process for detecting, reporting, triaging, and analyzing events is established.
5.1.3 Incidents are declared and analyzed.
5.1.4 A process for responding to and recovering from incidents is established.
5.1.5 Post-incident lessons learned are translated into improvement strategies.
5.2 CYBERSECURITY INCIDENT MANAGEMENT POLICY STATEMENTS
5.2.1 Cybersecurity incident management procedures shall be established within each department to ensure quick, orderly, and effective responses to security incidents. In the event a department has not established these procedures, the department may adopt the County’s Cyber Incident Response Plan. The steps involved in managing a security incident are typically categorized into six stages:
5.2.2 System preparation
5.2.3 Problem identification
5.2.4 Problem containment
5.2.5 Problem eradication
5.2.6 Incident recovery
5.2.7 Lessons learned
5.2.8 The DISO shall act as the liaison between applicable parties during a cybersecurity incident. The DISO shall be the department’s primary point of contact for all IT security issues. 47 County of Orange
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5.2.9 A directory or phone tree shall be created listing all department cybersecurity incident liaison contact information.
5.2.10 Departments shall conduct periodic (at least annually) cybersecurity incident scenario sessions for personnel associated with the cybersecurity incident handling team to ensure that they understand current threats and risks, as well as their responsibilities in supporting the cybersecurity incident handling team.
5.2.11 Departments shall develop and document procedures for reporting cybersecurity incidents. For example, all employees, contractors, vendors and customers of County information systems shall be required to note and report any observed or suspected security weaknesses in systems to management. In the event a department has not established these procedures, the department may adopt the County’s Cyber Incident Response Plan.
5.2.12 Each department shall familiarize its employees on the use of its cybersecurity incident reporting procedures.
5.2.13 Contact with local authorities, including law enforcement, shall be conducted through an organized, repeatable process that is both well documented and communicated.
5.2.14 Contact with special interest groups, including media and labor relations, shall be conducted through an organized, repeatable process that is both well documented and communicated.
5.2.15 Where a follow-up action against an entity after a cybersecurity incident shall involve civil or criminal legal action, evidence shall be collected, retained, and presented to conform to the rules for evidence as demanded by the relevant jurisdiction(s). At the Department’s discretion, they may obtain the services of qualified external professionals to complete these tasks.
5.2.16 Departments shall report cybersecurity incidents to the Central IT Service Desk in accordance with the County’s Cyber Incident Reporting Policy.
5.2.17 Confirmed cybersecurity incidents that meet the criteria defined in the Significant Incident/Claim Reporting Protocol shall be reported by the County’s Chief Information Security Officer to the Chief Information Officer (CIO), County Executive Officer (CEO), and the Board of Supervisors within 24 hours of determination that a cybersecurity incident has occurred. 48 County of Orange
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6 SERVICE CONTINUITY MANAGEMENT
Service continuity planning is one of the more important aspects of resilience management because it provides a process for preparing for and responding to disruptive events, whether natural or man- made.
Operational disruptions may occur regularly and can scale from so small that the impact is essentially negligible to so large that they could prevent an organization from achieving its mission. Services that are most important to an organization’s ability to meet its mission are considered essential and are focused on first when responding to disruptions. The process of identifying and prioritizing services and the assets that support them is foundational to service continuity.
Service continuity planning provides the organization with predefined procedures for sustaining essential operations in varying adverse conditions, from minor interruptions to large-scale incidents. For example, a power interruption or failure of an IT component may necessitate manual workaround procedures during repairs. A data center outage or loss of a business or facility housing essential services may require the organization to recover business or IT operations at an alternate location.
The process of assessing, prioritizing, planning and responding to, and improving plans to address disruptive events is known as service continuity. The goal of service continuity is to mitigate the impact of disruptive events by utilizing tested or exercised plans that facilitate predictable and consistent continuity of essential services.
This domain defines requirements to document, implement and annually test plans, including the testing of all appropriate cybersecurity provisions, to minimize impact to systems or processes from the effects of major failures of information systems or disasters via adoption and annual testing of:
• Business Continuity Plan
• Disaster Recovery Plan
• Cyber Incident Response Plan
Business Continuity is intended to counteract interruptions in business activities and to protect critical business processes from the effects of significant disruptions. Disaster Recovery provides for the restoration of critical County assets, including IT infrastructure and systems, staff, and facilities.
6.1 GOALS AND OBJECTIVES
6.1.1 Service continuity plans for high-value services are developed.
6.1.2 Service continuity plans are reviewed to resolve conflicts between plans.
6.1.3 Service continuity plans are tested to ensure they meet their stated objectives.
6.1.4 Service continuity plans are executed and reviewed.
6.2 SERVICE CONTINUITY MANAGEMENT POLICY STATEMENTS
6.2.1 Backups of all essential electronically maintained County business data shall be routinely created and properly stored to ensure prompt restoration.
6.2.2 Each department shall implement and document a backup approach for ensuring the availability of critical application databases, system configuration files, and/or any other electronic information critical to maintaining normal business operations within the department.
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6.2.3 The frequency and extent of backups shall be in accordance with the importance of the information and the acceptable risk as determined by each department.
6.2.4 Departments shall ensure that locations where backup media are stored are safe, secure, and protected from environmental hazards. Access to backup media shall be commensurate with the highest level of information stored and physical access controls shall meet or exceed the physical access controls of the data’s source systems.
6.2.5 Backup media shall be labeled and handled in accordance with the highest sensitivity level of the information stored on the media.
6.2.6 Departments shall define and periodically test a formal procedure designed to verify the success of the backup process.
6.2.7 Restoration from backups shall be tested initially once the process is in place and periodically afterwards. Confirmation of business functionality after restoration shall also be tested in conjunction with the backup procedure test.
6.2.8 Departments shall retain backup information only as long as needed to carry out the purpose for which the data was collected, or for the minimum period required by law.
6.2.9 Alternate storage facilities shall be used to ensure confidentiality, integrity and availability of all County systems.
6.2.10 Each department shall develop, periodically update, and regularly test business continuity and disaster recovery plans in accordance with the County’s Business Continuity Management Policy.
6.2.11 Departments shall review and update their Risk Assessments (RAs) and Business Impact Analyses (BIAs) as necessary, determined by department management (annually is recommended). As detailed in Section 14: Risk Assessment and Treatment, RAs include department identification of risks that can cause interruptions to business processes along with the probability and impact of such interruptions and the consequences to information security.
A BIA establishes the list of processes and systems that the department has deemed critical after performing a risk analysis.
6.2.12 Continuity plans shall be developed and implemented to provide for continuity of business operations in the event that critical IT assets become unavailable. Plans shall provide for the availability of information at the required level and within the established Recovery Time Objective (RTO) and their location, as alternate facilities shall be used to maintain continuity.
6.2.13 Each department shall maintain a comprehensive plan document containing its business continuity plans. Plans shall be consistent, address information security requirem ents, and identify priorities for testing and maintenance. Plans shall be prepared in accordance with the standards established by the County’s Business Continuity Management Policy.
Each department shall define failure prevention protocols to maintain confidentiality, integrity and availability. Departments shall automate failover procedures where applicable and maintain adequate (predictable) levels of ancillary components to meet this provision.
50 Item 520/2024
Final
City of Garden Grove
INTER-DEPARTMENT MEMORANDUM
To:
Lisa L. Kim From: Chief El-Farra
Dept:
City Manager Dept: Police
Date: 1/14/2025
Subject: Authorize the issuance of a purchase order to Advexure, LLC to purchase Unmanned Aerial Systems and supporting equipment for the Police Department’s UAS Program. (Cost: $74,851.63) (Action Item)
OBJECTIVE
To obtain City Council approval to purchase Unmanned Aerial Systems and supporting equipment from Advexure, LLC through the Sourcewell competitive bid program, Contract #011223-ADX.
BACKGROUND
The Garden Grove Police Department has implemented an Unmanned Aerial Systems (UAS) Program. The UAS team will utilize Unmanned Aerial Systems to enhance both public safety and officer safety by providing aerial support during a variety of operations. The ability to gain an aerial view over dangerous situations reduces the risk to officers, improves searching and documentation capabilities, and aids in the safe apprehension of criminals. The UAS may be equipped with high-definition cameras, thermal imaging cameras, or a combination thereof to provide mission-critical information.
The UAS Team requires a variety of aircraft to effectively and successfully operate in different environments. Some examples of expected operations include providing an overhead view of a specific area or incident for ground personnel, safely clearing the interior of buildings, providing detailed documentation of crime and accident scenes, and searching for lost or missing persons.
DISCUSSION
Sourcewell nationally solicits, eva luates, and awards contracts through a competitive bid process. Advexure’s Sourcewell Cooperative Purchasing Contract #011223 -ADX meets the City’s procurement policy as a piggyback contract per GGMC 2.50.060(E).
51 Item 520/2024
FINANCIAL IMPACT
Funding for the purchase of the Unmanned Aerial Systems and supporting equipment is included in the Department’s FY 2024-25 operating budget (Fund 202); there will be no impact to the General Fund.
RECOMMENDATION
It is recommended that the City Council:
Authorize the use of Advexure’s Sourcewell Cooperative Purchasing Contract #011223-ADX to forego the competitive bidding process.
Authorize the Finance Director, or designee, to issue a purchase order in the amount of $74,851.63 to Advexure, LLC to purchase UAS equipment for the Police Department’s UAS Program.
Prepared by: Lieutenant Bob Stephenson
ATTACHMENT(S)
1. Advexure Quote
52 /
Advexure Unmanned Systems
9281 Irvine Blvd
Irvine, CA 92618 USA
Tax ID: 47-4174938 | CAGE: 8FF59
www.advexure.com | (855) 625-2055
BILLING
Daniel Camara
Garden Grove Police Department
11301 Acacia Pkwy
Garden Grove, CA 92840
United States
SHIPPING
Daniel Camara
Garden Grove Police Department
11301 Acacia Pkwy
Garden Grove, CA 92840
United States
SALES QUOTE
QUOTE # D5560
ISSUED 12/05/2024
EXPIRES 60 Days
TERMS Net 30
ITEM / DESCRIPTION SKU QTY UNIT PRICE AMOUNT
DJI Matrice 30T Thermal Combo w/ Care
Enterprise
Basic
Included: (1) DJI Matrice 30T Aircraft (1) DJI RC
Plus Remote Controller (2) TB30 Flight
Batteries (1) BS30 Battery Station (3) Pairs of
1671 Propellers (Two installed on aircraft, one
spare pair) (1) USB-C Cable (1) USB-C to USB-C
Cable (1) Carrying Case (1) Screws and Tools
DJI-M30TCB x2 $ 9,637.00 $ 19,274.00
DJI Matrice 30 TB30 Intelligent Flight Battery
5,880 mAh LiPo battery for DJI M30/M30T DJI-M30TB30 x10 $ 329.00 $ 3,290.00 DJI WB37 Intelligent Battery
2S 4920mAh battery DJI-CSB37 x2 $ 59.00 $ 118.00
JZ M30 Quick Search Kit (Spotlight & Speaker)
for DJI Matrice 30 Series JD-M30 x1 $ 1,399.00 $ 1,399.00 DJI RC Plus Shoulder Harness Strap & Bracket
Kit
Included: (1) Strap (1) Bracket (including screws)
DJI-RCPLSK x2 $ 39.00 $ 78.00
DJI Matrice 30 Standard (1671) Propeller Pair
Includes: (1) CW Propeller (1) CCW Propeller (6)
Screw
DJI-M30P9 x6 $ 49.00 $ 294.00
DJI Mavic 3 Thermal w/ DJI Care Enterprise
Basic (2 Years)
Includes: (1) M3T Aircraft (1) RC Pro Enterprise
Smart Controller (1) Mavic 3 Intelligent Flight
Battery (3) Mavic 3 Enterprise Propellers (Pairs)
(1) 64GB Lexar microSD Card (1) USB-C Power
Adapter (100W) (1) Power Adapter AC Cable
(100W) (1) USB-C Cable (1) USB-C to USB-C
Cable (1) Protector Case
DJI-M3TB2 x3 $ 5,748.00 $ 17,244.00
DJI Mavic 3 Enterprise Battery Kit
Includes: (3) Flight Batteries (1) 100W Battery
Charging Hub (1) USB Type-C to Type-C Cable
DJI-M3EP5 x3 $ 519.00 $ 1,557.00
53 /
ITEM / DESCRIPTION SKU QTY UNIT PRICE AMOUNT
DJI Mavic 3 Intelligent Flight Battery
5,000mAh battery for Mavic 3 series DJI-MAV3BT x3 $ 159.00 $ 477.00 DJI Mavic 3 Enterprise Speaker DJI-M3EP2 x1 $ 159.00 $ 159.00 JZ U3 Spotlight & Speaker for DJI Mavic 3
Enterprise Series JD-U3 x1 $ 1,099.00 $ 1,099.00
DJI Mavic 3 Enterprise Series Low-Noise
Propellers DJI-M3ELNP x10 $ 19.00 $ 190.00
DJI Mini 4 Pro Fly More Combo Plus (DJI RC 2)
Includes: (1) DJI Mini 4 Pro (1) DJI RC 2 Remote
Controller (3) Intelligent Flight Battery Plus (1)
Two-Way Charging Hub (1) Shoulder Bag (1)
USB-C Cable (3) Spare Propellers (Pair) (18)
Screws (1) Screwdriver (1) Type-C to Type-C PD
Cable (1) Gimbal Protector (1) Propeller Holder
DJI-MN4PCP-RC2 x9 $ 1,159.00 $ 10,431.00
DJI Mini 4 Pro / Mini 3 Series Intelligent Flight
Battery Plus DJI-MN3BP x16 $ 95.00 $ 1,520.00
DJI Care Refresh (DJI Mini 4 Pro)
2 Years DJI-CMN4P-2Y x9 $ 125.00 $ 1,125.00
DJI Mini 3/4 Pro Propellers DJI-MN3PRPS x20 $ 9.00 $ 180.00 DJI Avata 2 Fly More Combo (Three Batteries)
(1) DJI Avata 2 (1) DJI Goggles 3 (1) DJI RC Motion
3 (3) DJI Avata 2 Intelligent Flight Battery (1) DJI
Avata 2 Two-Way Charging Hub (1) DJI Sling Bag
(4) DJI Avata 2 Propellers (Pair) (16) DJI Avata 2
Propeller Screw (1) DJI Avata 2 Gimbal
Protector (1) DJI Goggles 3 Foam Padding (1) DJI
Goggles 3 Additional Forehead Pad (1) DJI
Goggles 3 -2.0D Corrective Lenses (Pair) (1)
USB-C OTG Cable (1)Type-C to Type-C PD Cable
(1) DJI RC Motion 3 Lanyard (1) Screwdriver
DJI-AVA2-FMC3 x4 $ 1,199.00 $ 4,796.00
DJI Avata 2 Intelligent Flight Battery
(1) DJI Avata 2 Intelligent Flight Battery DJI-AVA2-BT x12 $ 129.00 $ 1,548.00 DJI FPV Remote Controller 3
Standard joystick controller for DJI Avata 2 DJI-FPV-RC3 x4 $ 199.00 $ 796.00 DJI Avata 2 Propellers
(2) DJI Avata 2 Propellers (Pair) (8) M2×8.7mm
Screw
DJI-AVA2-PRP x10 $ 9.00 $ 90.00
DJI Care Refresh (DJI Avata 2)
2 Years DJI-CAVA2-2Y x4 $ 99.00 $ 396.00
54 /
ITEM / DESCRIPTION SKU QTY UNIT PRICE AMOUNT
FoxFury DJI Avata 2 Light Kit
(1) DJI Avata 2 Mount (2) D10 Light Head (2)
Micro USB Cable (1) D3060 Light Head (1) USB-C
Cable (1) D Series Flat Mounting Pad (1) 5915
VHB Tape
FF-AVA2-TLK x4 $ 169.99 $ 679.96
PIX4Dmapper: Photogrammetry Software for
Drone Mapping
Perpetual (Single Device)
PIX4D-MAPPP x1 $ 5,990.00 $ 5,990.00
Firehouse "Micro" Pro Series Strobes [3 Pack,
Multi-Color] x3 $ 85.00 $ 255.00
FHT DJI Mavic 3 Payload Drop Kit x1 $ 69.99 $ 69.99
Advexure Enterprise Lifetime Premium Support
COMPLIMENTARY: As one of the longest serving
and most reputable UAV/drone dealers and
distributors in North America, Advexure's
enterprise solutions division commits itself to
seven days a week, 365 days a year dedicated
enterprise level support available near 24 hours
a day by phone, email and live chat. Learn more
about the Advexure Experience here, and
research our service reputation for yourself.
ADV-ELPS x1 $ 0.00 $ 0.00
Advexure Public Safety Fleet Services: Aircraft
Setup, Prep, and Firmware Update Service
COMPLIMENTARY: Aircraft Setup, Prep, and
Firmware Update Service. Aircraft will be fully
setup, configured and tested prior to
fulfillment. Complimentary full tech check by
Advexure's manufacturer certified technicians
prior to fulfillment which includes a complete
airworthiness checkover, firmware updates,
and ease of operation prep so your system is
fully ready to fly upon arrival.
ADV-ASPF x1 $ 0.00 $ 0.00
Advexure Sourcewell Cooperative Purchasing
Contract #011223-ADX (Exp: 3/2027)
Satisfy your legal procurement requirements
with Advexure's Sourcewell government
contract, providing a compliant, convenient and
competitive procurement solution which can
expedite your purchasing process.
x1 $ 0.00 $ 0.00
SUBTOTAL $ 73,055.95
Sourcewell Contract -
Account #32278 -$ 3,652.79
SHIPPING $ 0.00
SALES TAX $ 5,448.47
TOTAL $ 74,851.63
THANK YOU FOR CHOOSING ADVEXURE
Visit us online at advexure.com
Questions? Email [email protected]
55 /
The contents of this quotation and any attachments are CONFIDENTIAL for the client listed and may contain sensitive and proprietary information from Advexure LLC. The information may also be legally privileged. Any use, disclosure, reproduction, or dissemination of this transmission is strictly prohibited without prior written consent. 56 Item 522/2024
Final
City of Garden Grove
INTER-DEPARTMENT MEMORANDUM
To:
Lisa L. Kim From: Patricia Song
Dept:
City Manager Dept: Finance
Date: 1/14/2025
Subject: Receive and file the annual financial reports and auditor’s communication related to Fiscal Year 2023-24 annual audit. (Action Item)
OBJECTIVE
For the City Council to receive and file the annual financial reports and auditor’s communication related to Fiscal Year 2023-24 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, 2024.
DISCUSSION
The annual audits of the financial statements of the City and its component units were completed on Decemb er 30, 2024. 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, 2024. 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 a nd 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 57 Item 522/2024
manner. There was no material weakness cited by the auditors during their review of the City internal control over its financial reporting.
Professional auditing standards require independent auditors to communicate with the City Council regarding various matters related to the audit. These include the auditors' responsibilities, the scope and timing of the audit, compliance requirements, identified audit risks, the City's significant accounting practices, any difficulties encountered during the audit, misstatements in the financial reports, disagreements between the auditors and City management, and other relevant information pertaining to the audit engagement. Please refer to Attachment 4 for the auditors' communication letter.
The audited financials show that for Fiscal Year 2023 -24, the City overall had a positive operating result of $34.9 million, due to increases in charges for services, grant funding, and higher investment earnings. Governmental activities’ revenues exceeded expenses by $16.8 million, and business-type activities had an increase of $18.1 million to its net position.
The General Fund is the primary operating fund of the City. For Fiscal Year 2023 -24, expenditures exceeded revenues by $19.5 million in the General Fund, primarily due to two significant one-time costs: the defeasance of the Garden Grove Public Financing Authority Lease Revenue Bonds, Series 2015A, on December 5, 2023, and the $11.9 million purchase of an office building in the Civic Center Plaza. The $20.8 million defeasance cost was recorded under Principal Retirement within debt service expenditures, while the acquisition cost of the office building was reported under Community and Economic Development for Fiscal Year 2023-24.
Total General Fund expenditures increased by $45.0 million compared to the previous fiscal year. Besides the above one -time spending, expenditures reported in Public Right -of-Way increased by $7.4 million from last year as the City continued to accelerate its pavement management program.
Public Safety expenditures also rose by $4.8 million, or 4.6%, from the previous year. In addition to ongoing efforts to expand the police workforce, the City made significant investments in several GGPD-led programs that directly benefit the community.
For the fiscal year ended June 30, 2024, the General Fund reported total revenue of $185.0 million, reflecting an increase of $6.4 million compared to the previous fiscal year. This growth was primarily driven by higher investment earnings resulting from favorable market interest rate conditions.
Total revenue from taxes was $159.6 million, this i s a slight decrease of $0.3 million from the prior year. Property tax, sales and use tax, and transient occupancy tax generated $152.3 million, or 82.3% of total General Fund revenues for the current fiscal year. Other taxes, in the amount of $7.3 million, included business license tax, franchise tax, and certain pass - through taxes.
Other revenues including licenses and permits, fines, penalties and forfeitures, charges for services, and investment income resulted in a combined total of $25.4 million for the fiscal year ended June 30, 2024.
58 Item 522/2024
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 o r 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 additional revenue sources during the year.
Higher than expected tax revenues and investment earnings, as well as unanticipated recoveries contributed to an $18.3 million favorable variance in revenue for Fiscal Year 2023-
24. The majority of the $32.7 million favorable variance in expenditures resulted from unspent appropriations for capital projects, which will be carried forward to future years.
FINANCIAL IMPACT
There is no fiscal impact to receive and file the auditor’s reports related to Fiscal Year 2023- 24 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 2023-24 (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)
ATTACHMENT(S)
Attachment 1 - City of Garden Grove Annual Comprehensive Financial Report (ACFR) for Fiscal Year 2023-24
Attachment 2 - Report on Agreed-Upon Procedures Applied to Appropriation Limit Worksheets – City of Garden Grove
59 Item 522/2024
Attachment 3 - Report on Internal Control and Compliance of the Air Quality Improvement Fund
Attachment 4 - Auditor Communications to the City Council
60 61
For the fiscal year ended
June 30, 2024
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
62 This page is intentionally blank.
63 Introductory Section
Introductory
Section
64 CITY OF GARDEN GROVE
ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
TABLE OF CONTENTS
INTRODUCTORY SECTION
Letter of Transmittal.........................................................................................................
GFOA Certificate of Achievement for Excellence in Financial Reporting...................................
Organization Chart............................................................................................................
List of Elected Officials......................................................................................................
FINANCIAL SECTION
PAGE
i xi xii xiii
Independent Auditor’s Report. ........................................................................................... 1 Management's Discussion and Analysis (Unaudited)............................................................. 5 Basic Financial Statements
Government-wide Financial Statements:
Statement of Net Position............................................................................................. 25 Statement of Activities................................................................................................. 26 Fund Financial Statements:
Governmental Funds Financial Statements:
Balance Sheet. ......................................................................................................... 28 Reconciliation of Balance Sheet of Governmental Funds to the Statement of Net Position....................................................................................... 29 Statement of Revenues, Expenditures, and Changes in Fund Balances........................... 30 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities........................ 31 Proprietary Funds:
Statement of Net Position............................................................................................. 32 Statement of Revenues, Expenses and Changes in Fund Net Position.............................. 33 Statement of Cash Flows.............................................................................................. 35 Private-Purpose Trust Fund:
Statement of Fiduciary Net Position.............................................................................. 39 Statement of Changes in Fiduciary Net Position............................................................. 40 Notes to Basic Financial Statements................................................................................ 41
Required Supplementary Information
Budgetary Comparison Schedules:
General Fund........................................................................................................
Navigation Center Special Revenue Fund.....................................................................
Schedule of Changes in the Net Pension Liability and Related Ratios - Agent Multiple 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....................................................................
98 99
100
104
108
109
65 CITY OF GARDEN GROVE
ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Other Supplementary Information
Nonmajor Governmental Funds:
Combining Balance Sheet...................................................................................................
Combining Statement of Revenues, Expenditures and Changes in Fund Balances.....................
Nonmajor Governmental Funds and Major Capital Projects Fund Schedules of Revenues, Expenditures and Changes in Fund Balance Budget and Actual:
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........................................................................
Air Quality Improvement Special Revenue Fund...........................................................
Garden Grove Tourism Improvement District Special Revenue Fund....................................
Other Grants and Contributions Special Revenue Funds......................................................
Street Rehabilitation Special Revenue Fund......................................................................
Home Grant Special Revenue Fund...................................................................................
Housing Authority Assets Capital Projects Fund................................................................
Housing Successor Agency Low/Mod Capital Projects Fund.............................................
Public Safety Capital Projects Fund...................................................................................
Nonmajor Enterprise Funds:
Combining Statement of Net Position..................................................................................
Combining Statement of Revenues, Expenses and Changes in Fund Net Position..................
Combining Statement of Cash Flows....................................................................................
Internal Service Funds:
Combining Statement of Net Position...................................................................................
Combining Statement of Revenues, Expenses and Changes in Fund Net Position..................
Combining Statement of Cash Flows....................................................................................
STATISTICAL SECTION (UNAUDITED)
Government-wide Information:
Net Position by Component - Last Ten Fiscal Years..................................................................
Changes in Net Position - Last Ten Fiscal Years.......................................................................
Fund and Other Information:
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.............................................................
Pledged-Revenue Coverage - Last Ten Fiscal Years..................................................................
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.......................................................
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67 CITY OF GARDEN GROVE, CA
i
December 30, 2024
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, 2024. The ACFR is published to serve two purposes. First, 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 the 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, 2024.
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, management 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 benefits, 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 68 City of Garden Grove Letter of Transmittal
ii
information about the City’s finances and operations, as well as demographic and economic data.
The independent audit of the financial statements 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 continuing disclosure to the bond holders as covenanted by certain City bond issues.
Community Profile
The City of Garden Grove incorporated on June 18, 1956. It is located in central Orange County approximately 25 miles southeast of downtown Los Angeles. With a current population of approximately 168,234, it is the fifth largest city in Orange County and the 31st largest in the State of California.
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 adopted Ordinance No. 2866 changing the City’s at-large system of electing City Council members to a By-District 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 appoints 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 safety, street and park maintenance, water, sewer, recreation, traffic/transportation, public improvements, planning, zoning, code enforcement, business license, and other general municipal services. The City began contracting with Orange County Fire Authority to provide fire protection and paramedic services on 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 69 City of Garden Grove Letter of Transmittal
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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 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 appropriations or move appropriations between funds. The City Manager is authorized to transfer appropriations within a fund between various programs and/or departments.
Demographic and Economic Information
Demographically, the City of Garden Grove has one of the highest population densities in the County. The community is highly diversified with a median age of
40.8 years. With a 2023 population of 168,234, the City is the 5th largest city in the Orange County and the 18th largest in California. The City’s median household income in 2024 was $92,647, 14.9% above the national average. The City is benefiting from higher education levels of its residents. In 2023, over 75.0% of the population completed high school, and 26.7% received bachelor’s degree or higher. The City has highly rated public schools. Median home price in Garden Grove is $668,013.
Garden Grove has an urban suburban mix feel, with many restaurants, coffee shops, and parks.
Employment rate in Garden Grove is 58.6% in 2023, slightly lower than the state level of 60.2%. The majority of the workers are employed by private companies,
11.5% work for government agencies, and 6.7% are self-employed.
With limited opportunities for large-scale new development, Garden Grove continues to facilitate reinvestment of underutilized commercial properties. Through its ongoing commitment to stimulate the local economy by facilitating business retention and expansion 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
In June 2024, S&P Global Ratings assigned an ‘AA’ long-term rating to the Garden Grove Public Finance Authority’s $140 million Series 2024A lease revenue bonds. This rating highlights the City’s strong financial position and the effectiveness of its fiscal policies.
In its rating report, S&P Global Ratings commended the City of Garden Grove, noting the following:
Growing economic base, with extremely strong per capita market value; Historically positive operations that have supported the maintenance of very strong available reserves and very strong liquidity;
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Financial policies and practices that are considered strong and include realistic budget assumptions; and
Manageable debt burden with minimal debt service costs.
In recent years, the City has made substantial investments to enhance its infrastructure, focusing on street pavement, building maintenance, civic center revitalization, and community park improvements. These efforts were strategically funded through a balanced approach of debt financing and cash contributions, ensuring long-term financial stability. The City’s robust reserves provide a buffer against short-term budgetary volatility, supported by a comprehensive framework of fiscal policies and practices.
In Fiscal Year 2023, the City allocated $13.1 million to address critical staffing and infrastructure needs. Building on this, in Fiscal Year 2024, the City established a Building and Facilities Internal Service Fund to systematically collect funds for the preventative maintenance of citywide buildings and facilities. This initiative was launched with a one-time $3.0 million transfer from the General Fund and further supported by a $600,000 annual allocation incorporated into the base budget as an ongoing priority. These additional funding measures are essential to fulfilling the City’s commitment to a fiscally and operationally resilient future.
The City remains dedicated to advancing fiscal policy, enhancing financial management, and adopting best practices in budgeting. By prudently managing expenditures and prioritizing resource efficiency, the City continues to uphold its promise to serve the community effectively.
Long-term Financial Planning
The City has consistently upheld responsible fiscal management practices. In alignment with its municipal code, a five-year forecast covering operating revenues, expenditures, labor usage, and the capital improvement plan is integrated into the biennial budget process. This forecast includes an analysis of key revenue and expenditure components and outlines proposed measures to address any anticipated funding gaps. The City’s biennial budget is developed within the context of this forward-looking financial framework.
The City has consistently demonstrated strong fiscal stewardship by proactively addressing the broader state-wide fiscal challenges that often directly impact Garden Grove. These efforts include:
Making annual contributions to an irrevocable Section 115 Pension Trust to manage the City’s unfunded pension liability;
Updating the Debt Management Policy to enhance transparency, secure optimal credit ratings, minimize borrowing costs, preserve financial flexibility, and optimize capital funding strategies; and
71 City of Garden Grove Letter of Transmittal
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Prioritizing the establishment and funding of a Building and Structure Rehabilitation Internal Service Fund to ensure the long-term maintenance of City facilities.
In addition, the City remains committed to pursuing and securing grant funding to enhance its programs and services. Since Fiscal Year 2023, the City has obtained $38.4 million in grants, strategically allocated to initiatives addressing critical social, environmental, safety, infrastructure, and economic challenges across the community.
To promote long-term fiscal sustainability, the City has undertaken the adoption of several significant fiscal policies in recent years. These policies establish a framework to ensure a balanced budget, maintain healthy reserves, address pension liabilities, and plan for future infrastructure needs. These policies collectively guide the City in formulating responsible budgets and standardizing practices to ensure the efficient use of resources. Looking ahead, the City plans to develop additional policies on user fees, cost recovery, and cost allocation for administrative and support functions.
These will further enhance the comprehensive financial policy framework.
Financial Policies and Practices
The City has adopted various critical financial policies and practices with the goal of building a fiscally resilient government over the long-term.
Capital Asset Renewal and Replacement Reserves Policy
The purpose of the Capital Asset Renewal and Replacement Reserves Policy is to ensure adequate funding for the renewal and replacement of the City’s capital assets to protect the public investment and achieve the assets’ maximum useful life. The Policy is intended to promote proactive financial management by increasing awareness of the ongoing need for capital replacement and encouraging long-term capital planning.
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. 72 City of Garden Grove Letter of Transmittal
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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 ensure the funds break even and operate efficiently, maintain two months cash flow and $500,000 in reserves for contingencies, approach 5 percent of system 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 principal 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 Municipal 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
In 2024, the City Council adopted the Amended City of Garden Grove’s Debt Management Policy to align with best practices, ensure compliance with all applicable laws and regulations, enhance transparency, and further strengthen its ability to manage debt effectively.
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Tax Abatement Program
One of the City Council’s priorities for Fiscal Year 2023-24 was to support local businesses through economic development initiatives. To achieve this, the City and its former Redevelopment Agency entered into several tax abatement agreements aimed at fostering a strong, diverse, and sustainable local economy.
A tax abatement is an agreement in which the government agrees to forgo certain tax revenues in exchange for a commitment by the other party to undertake specific actions that contribute to economic development or provide other benefits to the community. These agreements are designed to improve local conditions, stimulate economic growth that would not otherwise occur, and serve as a key redevelopment tool. Tax abatements help encourage rehabilitation and revitalization of targeted areas or industries.
The potential benefits of tax abatements include creating short- and long-term employment opportunities for local residents, attracting new businesses or enhancing existing ones, drawing in new residents (which can generate additional tax revenue), creating a tax-revenue stream from previously vacant or underdeveloped properties, improving safety and commerce, and increasing property values in surrounding areas.
Details about the City’s two tax abatement programs, authorized by the City Council, are disclosed in Note 16 of the Notes to Basic Financial Statements.
Major Initiatives
The City’s 2021 Economic Development Strategic Plan identified key priorities and activities that focused on economic recovery and sustainability. The Garden Grove Office of Economic Development was accredited by the International Economic Development Council (IEDC) for its many achievements in these areas. The City was the first agency to receive this prestigious recognition in the State of California.
The City has continued to advance its economic development initiatives, focusing on local investment, job creation and retention, and small business sustainability. In November 2024, the City introduced a free online business tool called Garden Grove Business Analytics Insights. This platform offers business intelligence and market research analysis to entrepreneurs, startups, and existing businesses aiming to gain deeper insights into the local market. The initiative is designed to empower small businesses to make data-driven decisions that improve operations, foster success, and drive growth.
In July 2024, the City re-launches its “Foods of Garden Grove” initiative, highlighting over 100 of Garden Grove’s most acclaimed and customer-favored international food and drink establishments. The initiative, furthering the City’s efforts to support its small-business community, offers a virtual food tour from the City’s recognized ethnic enclaves, including Garden Grove’s Little Saigon and Orange County’s Koreatown, as 74 City of Garden Grove Letter of Transmittal
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well as Latin eateries, local favorites, and Michelin Guide honorees. The re-launch aims to further highlight the expansive dining options that define Garden Grove’s vibrant and diverse food culture, hometown spirit, and progressive vision for the future. The City also launched the inaugural Foods of Garden Grove Live event on October 4, 2024 hosting a variety of local restaurant offerings to nearly 4,000 people.
The City's Housing Element was certified by the California Department of Housing and Community Development (HCD) on December 12, 2023, affirming the City's compliance with California's Housing Element Law. Although Garden Grove is a fully built-out city, its leaders remain committed to pursuing opportunities that support diverse and innovative housing options. City leaders have identified strategies to promote housing development, including increasing residential densities along mixed-use and commercial corridors and establishing a transit-oriented development hub near the OC Streetcar terminus station at Harbor Boulevard and Westminster Avenue. These efforts emphasize infill development — both stand-alone residential and mixed-use projects — within “high resource” areas across the city. These areas are characterized by access to transit, proximity to parks and schools, and abundant opportunities for shopping and community engagement.
The City’s housing initiatives are anchored with programs and services designed to improve neighborhoods by leveraging funds from federal and state programs including Community Development Block Grant, HOME Investment Partnerships Program, Emergency Solutions Grants, and the CARES Act funds. The City continues to offer housing 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. In August 2024, the First-time Home Buyer Program was extended to allow moderate income household to obtain interest-free loans.
On June 5, 2024, the City of Garden Grove, in collaboration with the cities of Fountain Valley, Westminster, and the County of Orange, celebrated the grand opening of the Central Cities Navigation Center. This referral-based transitional facility provides emergency housing and comprehensive wrap-around services for individuals experiencing homelessness within the three cities. Operating 24/7, the Center offers up to 85 beds. Customers at the Center receive essential services, including three daily meals, access to laundry facilities, pet accommodations, and transportation to and from the facility. This landmark initiative marks a historic milestone in the City’s ongoing efforts to address homelessness and support community members in need.
The City continues to invest in its critical infrastructure. On May 14, 2024, the City of Garden Grove, in partnership with developer Edgemoor Infrastructure & Real Estate, design-builder Clark Construction Group, and architect AC Martin, celebrated the groundbreaking for Phase 1 of the Garden Grove Civic Center Revitalization Project. This phase features the construction of a new 103,000-square-foot Garden Grove Police Department public safety facility and a four-level parking structure on a
2.75-acre site at the corner of Acacia Parkway and Euclid Street within the Civic Center. Phase 2 will involve demolishing the existing police department building to create a 3.7-acre reimagined Civic Center Park. The entire project is estimated at 75 City of Garden Grove Letter of Transmittal
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$152 million, financed through a lease revenue bond. Phase 1 is expected to be completed by Fall 2026, with Phase 2 following approximately a year later.
Simultaneously, Re-Imagine Garden Grove continued its Phase 1 construction of Cottage Industries, an adaptive reuse of twelve residential properties in the civic center area for retail, restaurants, and outdoor entertainment.
On April 9, 2024, the City celebrated the grand opening of a newly renovated, citrus farm-themed playground at Magnolia Park. The play area features rubberized surfacing and vibrant, citrus-themed structures designed for children aged 2 to 5 and 5 to 12. Highlights include colorful play structures, a two-story spiraling slide, an inclusive orbital spinner, and an ADA-accessible swing set. Surrounding the playground, new outdoor fitness equipment allows caregivers to stay active while keeping an eye on their children. This exciting renovation was made possible largely through a grant from the State, enhancing the park’s accessibility and appeal for families.
The City’s industrial area observed unprecedented demand with transactions yielding record sales resulting in less than 2% vacancy rates. Prologis secured project approvals for the construction of a new 148,284 square foot industrial building.
Rexford Industrial is adding another project for a new 97,470 square foot industrial building along with associated site improvements.
These major initiatives and developments reflect the City of Garden Grove's commitment to enhancing the quality of life for its residents while fostering economic growth and sustainability. By investing in public safety, community spaces, adaptive reuse, and industrial expansion, the City is creating a vibrant, connected, and resilient community. These initiatives not only address current needs but also lay the foundation for a prosperous future, ensuring Garden Grove remains a desirable place to live, work, and thrive.
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 (ACFR) for the fiscal year ended June 30, 2023. This was the 39th 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 reporting, 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 Finance. Staff members have our sincere 76 City of Garden Grove Letter of Transmittal
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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,
Lisa L. Kim, City Manager Patricia Song, Finance Director 77 Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Garden Grove
California
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2023
Executive Director/CEO
xi
78 City of Garden Grove
Organizational Chart
COMMUNITY
DEVELOPMENT
COMMUNITY
SERVICES
ECONOMIC
DEVELOPMENT &
HOUSING
HUMAN RESOURCES
FINANCE
INFORMATION
TECHNOLOGY
POLICE
PUBLIC WORKS
THE PEOPLE OF
GARDEN GROVE
MAYOR AND CITY
COUNCIL
CITY MANAGER
CITY ATTORNEY
ASSISTANT CITY
MANAGER
xii
79 CITY OF GARDEN GROVE
George S. Brietigam III
Council Member - District 1
Joe DoVinh
Council Member - District 4
Kim B. Nguyen-Penaloza
Council Member - District 6
John R. O’Neill
Council Member - District 2
Stephanie Klopfenstein
Council Member - District 5
Cindy Ngoc Tran
Mayor Pro Tem - District 3
CITY COUNCIL
CITY OFFICIALS
Steve Jones
Mayor
Assistant City Manager
Economic Development Director
Lisa Kim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . City Manager Matthew West . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Assistant City Manager Omar Sandoval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . City Attorney Niki Wetzel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Community Development Director John Montanchez . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Community Services Director Ursula Luna-Reynosa . . . . . . . Asst. City Mgr./Economic Development & Housing Director Patricia Song . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Finance Director Laura Stover . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Human Resources Director Anand Rao. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Information Technology Director Amir El-Farra. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Police Chief William Murray . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Public Works Director xiii
80 Financial Section
Financial
Section
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82 Independent Auditor’s Report
City Council
City of Garden Grove
Garden Grove, California
Report on the Audit of the Financial Statements
Opinions
We have audited the 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, 2024, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.
In our opinion, the accompanying financial statements 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, as of June 30, 2024, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards , issued by the Comptroller General of the United States.
Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.
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Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS and Government Auditing Standards, we:
Exercise professional judgment and maintain professional skepticism throughout the audit.
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control.
Accordingly, no such opinion is expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control–related matters that we identified during the audit.
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 statements. Such information is the responsibility of management and, 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 historical context. We have applied certain limited procedures to the required supplementary information in accordance with GAAS, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic 2 84
financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The combining and individual nonmajor fund financial statements and certain budgetary comparison schedules 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 management and was 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 financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements and certain budgetary comparison schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole.
Other Information
Management is responsible for the other information included in the Annual Comprehensive Financial Report. The other information comprises introductory section and statistical section but does not include the financial statements and our auditor's report thereon. Our opinions on the financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.
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Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards , we have also issued our report dated December 31, 2024, on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.
Irvine, California
December 30, 2024
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CITY OF GARDEN GROVE, CA
5 MANAGEMENT’S DISCUSSION AND ANALYSIS
Fiscal Year Ended June 30, 2024
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, 2024, to assist users of this report to gain a better understanding of the City’s financial health and history. The information presented 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, 2024, comply with all applicable statements issued by the Governmental Accounting Standards Board (GASB).
Government-Wide
The City’s total assets and deferred outflows of resources exceeded its liabilities and deferred inflows of resources at June 30, 2024 by $935.7 million (net position).
The overall City’s net position increased by $34.9 million from the previous fiscal year due to increases in charges for services, grant funding, and higher investment earnings. Combined revenues from governmental activities and business-type activities exceeded government-wide expenses by $34.9 million.
Total expenses for governmental activities amounted to $216.3 million for the fiscal year ended June 30, 2024. These expenses were funded by program revenues of $52.2 million, taxes totaling $163.9 million, other income of $1.6 million, and investment earnings of $15.4 million. For the current year, revenues from governmental activities exceeded expenses by $16.8 million, increasing the governmental activities’ net position from $690.1 million at the beginning of the year to $706.9 million at June 30, 2024.
For business-type activities, program revenues exceeded expenses by $13.0 million. Among the total program revenue of $116.7 million, $62.5 million was from charges for services and $54.2 million from grants and contributions.
Combined with investment earnings of $5.1 million, the net position for business-type activities increased by $18.1 million from the previous year to $228.8 million on June 30, 2024.
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Management’s Discussion and Analysis (continued)
June 30, 2024
6 Fund Based
As of the end of the current fiscal year, the City’s governmental funds reported a combined ending fund balance of $381.2 million, an increase of $127.4 million from the previous year. The net increase was primarily due to proceeds from the issuance of the Garden Grove Public Financing Authority Lease Revenue Bonds, Series 2024A. The par amount of the 2024 lease revenue bonds was $140.0 million.
Among the total fund balance of $381.2 million reported at the close of the fiscal year, $249.6 million, or 65.5% was either non-spendable or restricted for specific purposes. In accordance with best practices of prudent financial management, the City also committed $27.9 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 statement 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.
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 development, parks and greenbelts, community planning and development, and municipal support functions. Property and sales taxes, transient occupancy tax, business licenses and permits, investment income, 88 CITY OF GARDEN GROVE
Management’s Discussion and Analysis (continued)
June 30, 2024
7 and state and federal grants fund these activities. The City has two component units:
the Garden Grove Sanitary District, which operates its sewer utility, and the Garden Grove Housing Authority, which oversees the federal Section 8 housing program.
These activities 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 activities 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 resources for particular purposes or to show that it is meeting legal responsibilities for using certain taxes, grants, and other revenues.
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 in results 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.
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Management’s Discussion and Analysis (continued)
June 30, 2024
8 Proprietary funds
When the City charges customers for the services it provides – whether to external customers or 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 position 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 internal 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 the 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 including the General Fund and the major special revenue fund budgetary comparison schedules, and 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.
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Management’s Discussion and Analysis (continued)
June 30, 2024
9 GOVERNMENT-WIDE FINANCIAL ANALYSIS
The government-wide financial analysis focuses on the City’s net position and changes in the net position of the governmental and business-type activities during the fiscal year.
Despite a $45.5 million increase in government-wide expenses compared to the prior year, total program and general revenues exceeded expenses by $34.9 million, resulting in a net position increase to $935.7 million as of June 30, 2024.
Among the total net position, $843.4 million represented net investment in capital assets. These capital assets are essential for City operations, which include land, buildings, machinery and equipment, and infrastructure. The 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.
Net position may be restricted for capital projects, debt payments, and/or special programs such as public safety and public right of way. The total restricted net position as of June 30, 2024, was $230.0 million.
The graph below illustrates the various components of the City’s net position at fiscal year ended June 30, 2024.
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Management’s Discussion and Analysis (continued)
June 30, 2024
10 The schedule below is a condensed version of the City’s statement of net position for fiscal year ended June 30, 2024, with comparative data from the previous fiscal year:
A condensed statement of change in net position with comparative amounts on revenues and expenses for the current and prior year is presented on the following page.
City of Garden Grove's Net Position(in millions)Governmental activities Business-type activities Total2024 2023 2024 2023 2024 2023Current and other assets 541.1$ 401.1$ 124.9$ 114.7$ 666.0$ 515.8$ Capital assets 696.7 655.4 180.5 172.8 877.2 828.2 Total assets1,237.8 1,056.5 305.4 287.5 1,543.2 1,344.0 Unamortized loss on refunding - - 0.1 0.1 0.1 0.1 OPEB related items 19.4 22.2 2.6 3.5 22.0 25.7 Pension related items 73.7 79.2 8.0 9.2 81.7 88.4 Total deferred outflows93.1 101.4 10.7 12.8 103.8 114.2 Long-term debt 208.9 74.8 38.5 41.0 247.4 115.8 Total OPEB liability 37.8 36.1 5.2 5.7 43.0 41.8 Net pension liability 327.7 313.1 29.8 30.1 357.5 343.2 Other liabilities 29.0 21.9 11.6 9.8 40.6 31.7 Total liabilities603.4 445.9 85.1 86.6 688.5 532.5 Unamortized gain on refunding - - 0.1 0.1 0.1 0.1 Lease related items 5.8 3.9 - - 5.8 3.9 OPEB related items 13.8 15.2 1.9 2.4 15.7 17.6 Pension related items 1.0 2.8 0.2 0.5 1.2 3.3 Total deferred inflows20.6 21.9 2.2 3.0 22.8 24.9 Net investment in capital assets 700.6 635.5 142.8 132.7 843.4 768.2 Restricted 230.1 74.6 - - 230.1 74.6 Unrestricted (223.8) (20.0) 86.0 78.0 (137.8) 58.0 Total net position706.9$ 690.1$ 228.8$ 210.7$ 935.7$ 900.8$ 92 CITY OF GARDEN GROVE
Management’s Discussion and Analysis (continued)
June 30, 2024
11 Governmental Business-TypeActivities Activities Total2024 2023 2024 2023 2024 2023Revenues:Program revenues:Charges for services 20.2$ 17.7$ 62.5$ 58.8$ 82.7$ 76.5$ Operating contributions and grants 30.5 24.5 54.2 47.5 84.7 72.0 Capital contributions and grants 1.5 2.4 - - 1.5 2.4 General revenues:Taxes:Property taxes 65.5 66.4 - - 65.5 66.4 Sales and use taxes 60.1 60.1 - - 60.1 60.1 Transient occupancy taxes 28.5 28.0 - - 28.5 28.0 Other taxes 9.8 9.5 - - 9.8 9.5 Investment earnings 15.4 4.2 5.1 1.3 20.5 5.5 Other income 1.6 1.4 - - 1.6 1.4 233.1 214.2 121.8 107.6 354.9 321.8 Expenses:Public safety - Fire 31.9 31.2 - - 31.9 31.2 Public safety - Police 97.8 75.1 - - 97.8 75.1 Traffic safety 6.8 5.8 - - 6.8 5.8 Public right of way 23.7 21.1 - - 23.7 21.1 Community buildings & drainage 7.3 7.9 - - 7.3 7.9 Parks & community services 10.1 10.1 - - 10.1 10.1 Community & economic development 23.2 18.1 - - 23.2 18.1 Municipal support 14.3 13.9 - - 14.3 13.9 Water utility - - 38.1 32.6 38.1 32.6 Sewer utility - - 8.5 6.7 8.5 6.7 Solid waste disposal - - 2.2 2.0 2.2 2.0 Housing program - - 52.6 46.7 52.6 46.7 Golf course - - 2.3 2.2 2.3 2.2 Interest on long-term debt 1.2 1.1 - - 1.2 1.1 Total Expenses 216.3 184.3 103.7 90.2 320.0 274.5 Income (loss) before transfers 16.8 29.9 18.1 17.4 34.9 47.3 Transfers - 0.4 - (0.4) - - Change in net position 16.8 30.3 18.1 17.0 34.9 47.3 Net position - beginning of year 690.1 659.8 210.7 193.7 900.8 853.5 Net position - end of year 706.9$ 690.1$ 228.8$ 210.7$ 935.7$ 900.8$ Total revenuesCity of Garden Grove's Changes in Net Position(in millions) 93 CITY OF GARDEN GROVE
Management’s Discussion and Analysis (continued)
June 30, 2024
12 Governmental Activities
Total resources available during the year to finance governmental operations were $923.2 million. This amount consists of the beginning net position of $690.1 million, program revenues of $52.2 million, and general revenues of $180.9 million. With total expenses of $216.3 million, the net position for governmental activities increased by $16.8 million and ended at $706.9 million as of June 30, 2024.
Total revenues from governmental activities amounted to $233.1 million for the current fiscal year. Tax revenues totaled $163.9 million, remaining consistent with the previous year. While tax revenues plateaued following several years of rapid growth post-pandemic, investment earnings increased by $11.2 million from last year, driven by favorable interest rate market conditions. Program revenues contributed $52.2 million, reflecting a $7.6 million increase from the prior year. This growth included a $2.5 million rise in charges for services, attributed to updated fees, and a $6.0 million increase in grant revenue. A breakdown of revenue sources reported in the governmental activities is shown below.
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Management’s Discussion and Analysis (continued)
June 30, 2024
13 The chart on below illustrates the two-year comparison of total revenues for the governmental activities.
Total expenses for governmental activities for the fiscal year ended June 30, 2024, increased by 17.4%, reaching $216.3 million compared to the prior year. This increase was primarily driven by several capital improvement projects and the acquisition of capital assets.
The chart below shows a breakdown of the cost of each major municipal function.
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Management’s Discussion and Analysis (continued)
June 30, 2024
14 The cost of public safety functions (police and fire) totaled $129.7 million, or 60.0% of overall governmental activities’ expenses. Public safety is primarily funded by property taxes, sales tax, transient occupancy tax, and other general revenues. Total public safety spending occupied 79.1% of total revenue from taxes.
Traffic safety, public-right-of-way, community buildings, and drainage programs are responsible for the maintenance and construction of transportation system as well as city facilities, with funding provided by the 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 $163.9 million, the remaining balance was paid by various program revenues, including $20.2 million by those who directly benefited from the programs, $30.5 million from other governments and organizations that subsidized certain programs with operating grants and contributions, and $1.5 million from capital grants and contributions. Other income including investment earnings totaled $17.0 million for the current year, and also contributed to support the various governmental activities.
A two-year comparison of total expenses for governmental activities is shown below.
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Management’s Discussion and Analysis (continued)
June 30, 2024
15 Highlights of the major revenue sources and expenses for governmental activities are listed below:
Program revenues accounted for 22.4% of total revenues generated by governmental activities. In the current year, program revenues totaled $52.2 million, reflecting an increase of $7.6 million compared to the previous year.
Charges for services rose by $2.5 million, while grants and contributions saw a $5.1 million increase.
Taxes accounted for 70.3% of total revenues from governmental activities, totaling $163.9 million for the current year. The amount is consistent with the prior year. Following several years of rapid growth, tax revenues have begun to stabilize. Transient occupancy tax revenue increased by $0.5 million, reaching a historic high of $28.5 million.
Total governmental expenses were $216.3 million, reflecting an increase of $32.0 million or 17.4% from the prior year as the City continued to implement its initiatives in fighting homelessness, revitalizing the civic center, and improving its infrastructure. The funding sources for these initiatives were made available by the one-time fiscal relief money allocated to the City from previous years.
Cost for fire protection and emergency medical response services totaled $31.9 million, representing 14.7% of total governmental expenses. Public Safety – Police expenses were reported at $97.8 million, or 45.2% of overall expenses for governmental activities.
In the current fiscal year, significant resources were committed to the Civic Center Revitalization/Public Safety Facility project, which included acquiring properties in the Civic Center Plaza. As the project advanced into the construction phase, expenditures in Public Safety – Police increased by $22.7 million compared to the prior year.
Community and economic development efforts and street infrastructure improvements accounted for $23.2 million and $23.7 million, respectively, representing the third and fourth largest expenditures for governmental activities.
The City continues to implement its accelerated pavement management program to enhance citywide pavement conditions. In addition, as part of the Civic Center Revitalization Master Plan, the City has acquired several properties in the Civic Center Plaza in recent years. The most recent acquisition, completed during the current fiscal year, was a 69,353-square-foot office building purchased for $11.9 million.
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Management’s Discussion and Analysis (continued)
June 30, 2024
16 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.
Business-Type Activities
The City’s net position for business-type activities increased by $18.1 million during the fiscal year ended June 30, 2024. Revenues from business-type activities exceeded expenses by $18.1 million, bringing the total net position to $210.7 million at year-end.
The City completed a water rate study in November 2023, resulting in the implementation of new water rates effective January 1, 2024. Charges for services in the current fiscal year increased by $3.7 million due to the updated rates, which were primarily driven by mandates from new state legislation including the removal of per- and polyfluoroalkyl substances (PFAS).
The Housing program is the largest component in the business-type activities by revenue and cost of operations. The Garden Grove Housing Authority reported revenues from operating grants and contributions of $54.2 million, an increase of $6.0 million from the previous year. The cost of the Housing Section 8 program also increased by $5.9 million and totaled $52.6 million for the year ended June 30, 2024.
Total expenses for all business-type activities for the fiscal year ended June 30, 2024, amounted to $103.7 million, reflecting an increase of $13.5 million from the prior year. The cost of delivering water to the City’s residents rose by $5.5 million, primarily due to the implementation of water treatment plants across all City wells to remove PFAS from the local water supply. Additionally, as the City continues to advance its Housing programs and secure more federal funding, the number of vouchers issued increased during the fiscal year, resulting in a $5.9 million rise in program costs.
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Management’s Discussion and Analysis (continued)
June 30, 2024
17 The graph below shows the expenses of each business-type function compared to the program revenues generated specifically from its operations.
As shown in the statement of activities, the amount paid by users of the systems were $62.5 million, reported as charges for services. Revenues from operating grants and contributions were $54.2 million, for the City’s Housing Section 8 program. The total program revenue reported for the year was $116.7 million.
Total resources available during the year to finance business-type activities were $332.5 million. This amount consists of net position at July 1, 2023, in the amount of $210.7 million, and total revenues of $121.8 million. After funding total expenses of $103.7 million, the net position for business-type activities increased by $18.1 million to $228.8 million at June 30, 2024.
The chart below presents revenues and expenses in the business-type activities for the past five years, excluding transfers and extraordinary items.
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Management’s Discussion and Analysis (continued)
June 30, 2024
18 FUND FINANCIAL ANALYSIS
General Fund
The General Fund is the primary operating fund of the City. The General Fund accounts for essential municipal services including public safety (police and fire), public works, community planning, economic development, and community and park services. These services are primarily funded by tax revenues and funding is dependent upon revenues collected during the same period the services are provided.
For the fiscal year ended June 30, 2024, the General Fund reported total revenue of $185.0 million, reflecting an increase of $6.4 million compared to the previous fiscal year. This growth was primarily driven by higher investment earnings resulting from favorable market interest rate conditions.
Total revenue from taxes was $159.6 million, this is a slight decrease of $0.3 million from the prior year. Property tax, sales and use tax, and transient occupancy tax generated $152.3 million, or 82.3% of total General Fund revenues for the current fiscal year. Other taxes, in the amount of $7.3 million, included business license tax, franchise tax, and certain pass-through taxes.
Other revenues including licenses and permits, fines, penalties and forfeitures, charges for services, and investment income resulted in a combined total of $25.4 million for the fiscal year ended June 30, 2024.
The graph below illustrates General Fund revenues by major sources:
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CITY OF GARDEN GROVE
Management’s Discussion and Analysis (continued)
June 30, 2024
19 A two-year comparison of each General Fund revenue source for the fiscal years ended June 30, 2024 and June 30, 2023 is presented below:
Compared to the previous year, the largest increase was in investment earnings. The City strategically leveraged its strong cash position in the higher interest rate environment, structuring the portfolio by reinvesting investment income and rebalancing maturities to maximize returns.
Revenues from combined property tax and sales and use tax saw a slight decrease of $1.1 million compared to the prior year. In recent years, the City experienced rapid growth in both assessed valuation and consumer spending as the economy rebounded from the pandemic. The City experienced similar conditions this year, but the revenues have begun to stabilize. Meanwhile, transient occupancy tax reached another historic high, generating $28.5 million for the City – an increase of $427,000 from the previous year.
On the expenditure side, the General Fund reported total expenditures of $204.5 million for the fiscal year ended June 30, 2024. The largest expenditure category was Public Safety, with Fire at $31.6 million and Police at $76.6 million. Combined, Public Safety totaled $108.2 million, representing 53.0% of overall General Fund expenditures, including debt service and capital outlay.
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Management’s Discussion and Analysis (continued)
June 30, 2024
20 The graph below illustrates General Fund expenditures by category:
Total General Fund expenditures increased by $45.0 million compared to the previous fiscal year, primarily due to two significant one-time costs: the defeasance of the Garden Grove Public Financing Authority Lease Revenue Bonds, Series 2015A, on December 5, 2023, and the $11.9 million purchase of an office building in the Civic Center Plaza. The $20.8 million defeasance cost was recorded under Principal Retirement within debt service expenditures, while the acquisition cost of the office building was reported under Community and Economic Development for Fiscal Year 2023-24.
Community and Economic Development expenditures totaled $30.5 million, an $11.0 million increase from the previous year. As previously stated, the increase was attributed to the acquisition of an office building in December 2023, as part of the Civic Center Master Plan. The total acquisition cost of $11.9 million was reported as capital outlay in the General Fund.
Public Right-of-Way expenditures increased by $7.4 million compared to the prior year as the City accelerated its pavement improvement program. Total Public-Right- of Way amounted to $18.6 million, representing 9.1% of overall General Fund expenditures for Fiscal Year 2023-24.
Public Safety expenditures rose by $4.8 million, or 4.6%, from the previous year. In addition to ongoing efforts to expand the police workforce, the City made significant investments in several GGPD-led programs that directly benefit the community.
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Management’s Discussion and Analysis (continued)
June 30, 2024
21 A two-year comparison of each General Fund expenditure category is shown below:
For Fiscal Year 2023-24, General Fund expenditures exceeded revenues by $19.5 million, primarily due to the one-time cost on debt defeasance of $20.8 million, and capital asset acquisition totaled $11.9 million. After taking into account other financing sources and a net transfer totaling $1.7 million, the fund balance decreased by $17.8 million for the year, from $183.3 million at the beginning of the year, to an ending balance of $165.5 million as of June 30, 2024.
The table below shows a three-year trend analysis on the fund balance of the General Fund. For additional information, please refer to the Notes to Basic Financial Statements.
City of Garden Grove's General Fund Fund BalanceThree-Year Trend Information(in millions)FY 2023-24FY 2022-23FY 2021-22Fund Balances:Nonspendable14.1$ 18.7$ 10.6$ Restricted11.6 7.3 6.2 Committed38.8 25.7 22.5 Assigned3.2 2.9 2.7 Unassigned97.8 128.7 120.2 Total Fund Balance165.5$ 183.3$ 162.2$ Fund Balance - Beginning183.3$ 162.2$ 112.4$ Excess/(deficiency) revenues over expenditures(19.5) 19.2 49.2 Transfers1.0 (4.4) 0.6 Other financing sources0.7 6.3 - Fund Balance - Ending165.5$ 183.3$ 162.2$ 103
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Management’s Discussion and Analysis (continued)
June 30, 2024
22 CAPITAL ASSETS
The capital assets of the City are those assets that 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. On June 30, 2024, net capital assets totaled $697.6 million for governmental activities, and $180.5 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 8) for additional information.
The table below presents comparative summary on the City’s capital assets:
DEBT ADMINISTRATION
In December 2023, the City strategically defeased the Garden Grove Public Financing Authority Lease Revenue Bonds, Series 2015A with a principal amount of $20.8 million. The defeasance not only realized cash flow savings of nearly $11.0 million, but more importantly, released encumbrances on properties in the Civic Center Area, which paved the way for a housing development project, and accelerated progress on the Civic Center Revitalization initiative.
In June 2024, the City successfully issued the Garden Grove Public Financing Authority Lease Revenue Bonds, Series 2024A, with a par amount of $140.0 million.
Leveraging its strong credit rating, the City secured a bond premium of $11.7 million.
The 2024 lease revenue bonds were issued for a 30-year term with an average coupon rate of 4.6% and a true interest cost of 4.0%.
City of Garden Grove's Capital AssetsNet of Depreciation (in millions)Governmental ActivitiesBusiness-type Activities Total2024 2023 2024 2023 2024 2023Land 427.7$ 421.1$ 5.1$ 5.1$ 432.8$ 426.2$ Streets 166.6 147.1 - - 166.6 147.1 Storm drainage 24.3 22.1 - - 24.3 22.1 Water system - - 96.6 87.9 96.6 87.9 Sewer system - - 69.3 68.3 69.3 68.3 Buildings and improvements 41.2 24.5 0.4 0.4 41.6 24.9 Furniture, machinery & equipment 15.6 16.3 0.2 0.2 15.8 16.5 SBITA assets* 0.1 0.1 0.2 0.2 0.3 0.3 Construction in progress 20.5 23.6 8.2 10.5 28.7 34.1 Right to use assets 0.7 0.6 0.5 0.1 1.2 0.7 Total Capital Assets696.7$ 655.4$ 180.5$ 172.7$ 877.2$ 828.1$ * Beginning balances of Subscription-based IT Assets (SBITA) were restated per GASB Statement No. 96. 104
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Management’s Discussion and Analysis (continued)
June 30, 2024
23 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 9).
GENERAL FUND BUDGETARY HIGHLIGHTS
General Fund appropriations were initially adopted at $170.2 million for Fiscal Year 2023-24. Final appropriations increased by $67.0 million, bringing the total to $237.2 million. The additional appropriations were allocated to fund the bond defeasance, capital asset acquisitions, a development agreement, and the continuation of various capital projects, including:
$20.8 million to defease the Garden Grove Public Financing Authority Lease Revenue Bonds Series 2015A;
$17.0 million for the Civic Center Revitalization/Public Safety Facility project; $12.8 million to acquire the Euclid building in the Civic Center Plaza; $1.0 million for a development agreement (Site C);
$1.0 million for tenant improvements to the Purcell building; and $14.0 million carried over from the previous year to continue the Pavement Management Acceleration Program.
Below is a summary of changes made to the adopted budget:
As of June 30, 2024, the City’s General Fund ended the fiscal year with a net favorable variance of $52.6 million. Higher than expected tax revenues and investment earnings, as well as unanticipated recoveries contributed to an $18.3 million favorable variance in revenue. The majority of the $32.7 million favorable variance in City of Garden Grove's Outstanding Debt(in millions)Governmental ActivitiesBusiness-type ActivitiesTotal2024 2023 2024 2023 2024 2023Lease revenue bonds140.0$ 20.7$ -$ -$ 140.0$ 20.7$ Leases payable0.7 0.6 0.5 0.1 1.2 0.7 Revenue bonds- - 33.1 34.7 33.1 34.7 Certificates of participation- - - 0.9 - 0.9 SBITA payable*0.1 0.1 0.2 0.3 0.3 0.4 Unamortized bond premium11.7 1.2 3.8 4.0 15.5 5.2 Total Outstanding Debt152.5$ 22.6$ 37.6$ 40.0$ 190.1$ 62.6$ * Beginning balances of Subscription-based IT Assets (SBITA) were restated per GASB Statement No. 96. 2024Original Budget 170,235,400$ Supplemental Changes 66,989,917 Final Budget 237,225,317$ 105
CITY OF GARDEN GROVE
Management’s Discussion and Analysis (continued)
June 30, 2024
24 expenditures resulted from unspent appropriations for capital projects, which will be carried forward to future years.
The table below shows the budget variance in each category, revenue, expenditure, and transfers:
The City strives to develop a budget that accurately aligns available resources and operational needs. As unforeseen situations arise during the year, budget variances are carefully reviewed, analyzed, and programmed to address various community needs.
CONTACTING THE CITY’S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, customers, investors, and creditors with a general overview of the City’s finances and to demonstrate the City’s accountability for the money it receives. If you have questions about this report or need 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].
General Fund Budget to Actual Comparison(in millions)Transfer & BudgetRevenue Expenditure Other Sources VarianceFinal Budget 166.7$ 237.2$ 0.2 Actual 185.0 204.5 1.8 Favorable/(Unfavorable) Budget Variance 18.3$ 32.7$ 1.6$ 52.6$ 106
Basic Financial
Statements
Basic Financial
Statements
107
Primary Government
Governmental Business-type
Activities Activities Total
ASSETS
Cash and investments 300,888,982 $ 122,306,093 $ 423,195,075 $ Cash and investments with fiscal agents 156,385,593 1,542,564 157,928,157 Cash and investments with pension trust 4,530,056 - 4,530,056 Taxes receivable 13,569,203 325,336 13,894,539 Accounts receivable 1,207,252 7,359,390 8,566,642 Interest receivable 780,607 325,205 1,105,812 Intergovernmental receivable 4,781,403 - 4,781,403 Internal balances 9,712,680 (7,162,680) 2,550,000 Inventory 526,793 23,702 550,495 Deposits and prepaid items 523,032 132,824 655,856 Notes receivable, net 34,198,643 - 34,198,643 Leases receivable 6,047,401 - 6,047,401 Due from Successor Agency 5,044,260 - 5,044,260 Land held for resale 2,819,063 - 2,819,063 Prepaid bond insurance costs 86,710 - 86,710 Capital assets:
Land 427,699,660 5,142,500 432,842,160 Construction in progress 20,479,563 8,181,536 28,661,099 Depreciable capital assets, net 248,563,874 167,177,131 415,741,005 Total assets 1,237,844,775 305,353,601 1,543,198,376
DEFERRED OUTFLOWS OF RESOURCES
Unamortized loss on refunding of debt - 60,605 60,605 OPEB related items 19,370,617 2,650,591 22,021,208 Pension related items 73,762,699 8,013,930 81,776,629 Total deferred outflows 93,133,316 10,725,126 103,858,442
LIABILITIES
Accounts payable 14,975,921 8,088,886 23,064,807 Accrued liabilities 3,379,844 728,646 4,108,490 Refundable deposits 3,427,854 2,714,465 6,142,319 Interest payable 435,327 54,130 489,457 Unearned revenue 4,175,217 - 4,175,217 Noncurrent liabilities:
Intercity loans payable 2,550,000 - 2,550,000 Due within one year 18,711,143 2,814,441 21,525,584 OPEB liability short-term 4,267,608 584,526 4,852,134 Due in more than one year 190,238,218 35,675,716 225,913,934 OPEB liability 33,568,228 4,597,777 38,166,005 Net pension liability 327,724,382 29,803,736 357,528,118 Total liabilities 603,453,742 85,062,323 688,516,065
DEFERRED INFLOWS OF RESOURCES
Unamortized gain on refunding of debt - 128,652 128,652 Lease related 5,822,057 - 5,822,057 OPEB related items 13,803,450 1,890,632 15,694,082 Pension related items 988,000 189,141 1,177,141 Total deferred inflows 20,613,507 2,208,425 22,821,932
NET POSITION
Net investment in capital assets 700,605,501 142,798,163 843,403,664 Restricted for:
Public safety 155,893,654 - 155,893,654 Public right of way 15,395,426 - 15,395,426 Drainage 351,963 - 351,963 Community planning and development 43,812,976 - 43,812,976 Community services 14,623,109 - 14,623,109 Unrestricted (223,771,787) 86,009,816 (137,761,971) Total net position 706,910,842 $ 228,807,979 $ 935,718,821 $ The notes to basic financial statements are an integral part of this statement.
CITY OF GARDEN GROVE
STATEMENT OF NET POSITION
JUNE 30, 2024
25 108
Program Revenue
Operating
Charges for Grants and
Functions/programs Expenses Services Contributions
Governmental activities:
Fire 31,871,361 $ 674,442 $ 233,856 $
Police 97,761,421 3,551,052 3,790,476 Traffic safety 6,814,093 1,289,947 120,303 Public right of way 23,731,060 350,593 16,223,509 Drainage 1,460,930 - -
Community buildings 5,810,440 4,241,640 23,367 Community services 7,643,086 592,871 - Economic development 2,611,930 - 233,346 Parks and greenbelts 2,486,590 1,327,328 83,510 Community planning and
development 20,535,862 4,890,090 4,210,948 Municipal support 14,290,716 3,238,114 5,604,167 Interest on long term debt 1,248,626 - - Total governmental activities 216,266,115 20,156,077 30,523,482 Business-type activities:
Water utility 38,078,468 44,200,824 -
Sewage collection 8,550,061 11,968,047 - Housing authority 52,633,490 - 54,151,706 Solid waste disposal 2,175,151 4,073,137 - Golf course 2,259,418 2,287,514 -
Total business-type activities 103,696,588 62,529,522 54,151,706 Total 319,962,703 $ 82,685,599$ 84,675,188$
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
Gain on sale of capital assets
Miscellaneous
Gain on defeasance of debt
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, 2024
26 109
Net (Expense) Revenue and
Changes in Net Position
Capital
Grants and Governmental Business-type
Contributions Activities Activities Total
-$ (30,963,063) $ - $ (30,963,063) $ - (90,419,893) - (90,419,893) 297,314 (5,106,529) - (5,106,529) - (7,156,958) - (7,156,958) 96,115 (1,364,815) - (1,364,815) - (1,545,433) - (1,545,433) - (7,050,215) - (7,050,215) - (2,378,584) - (2,378,584) 1,143,852 68,100 - 68,100 - (11,434,824) - (11,434,824) - (5,448,435) - (5,448,435) - (1,248,626) - (1,248,626) 1,537,281 (164,049,275) - (164,049,275) - - 6,122,356 6,122,356 - - 3,417,986 3,417,986 - - 1,518,216 1,518,216 - - 1,897,986 1,897,986 - - 28,096 28,096 - - 12,984,640 12,984,640
1,537,281$ (164,049,275)$ 12,984,640$ (151,064,635)$
60,132,338 - 60,132,338
65,442,744 - 65,442,744
2,961,225 - 2,961,225
6,654,896 - 6,654,896
28,500,576 - 28,500,576
212,513 - 212,513
15,383,841 5,117,360 20,501,201
17,812 - 17,812
531,257 - 531,257
1,058,930 - 1,058,930
180,896,132 5,117,360 186,013,492
16,846,857 18,102,000 34,948,857
690,063,985 210,705,979 900,769,964
706,910,842$ 228,807,979 $ 935,718,821 $
27 110
Civic
Navigation Center Nonmajor Total
General Center Revitalization Governmental Governmental Fund Fund Fund Funds Funds
ASSETS
Cash and cash investments 141,383,810 $ - $ 9,164 $ 36,459,968 $ 177,852,942 $ Cash and cash investments with fiscal agents 46 5,749,042 150,636,505 - 156,385,593 Cash and investments with pension trust 4,530,056 - - - 4,530,056 Taxes receivable 12,770,729 - - 798,474 13,569,203 Accounts receivable 950,408 - - 218,495 1,168,903 Interest receivable 373,180 - - 100,596 473,776 Intergovernmental receivable 1,254,213 - - 3,527,105 4,781,318 Intercity loans receivable, net 11,587,481 - - - 11,587,481 Due from other funds 3,939,826 - - - 3,939,826 Due from Successor Agency - - - 5,044,260 5,044,260 Deposits and prepaid items 178,624 2,127 - 33,588 214,339 Notes receivable, net 2,300,056 - - 31,898,587 34,198,643 Leases receivable 6,047,401 - - - 6,047,401 Land held for resale 2,300,000 - - 519,063 2,819,063 Total assets 187,615,830 $ 5,751,169 $ 150,645,669 $ 78,600,136 $ 422,612,804 $
LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES Liabilities:
Accounts payable 6,329,907 $ 605,435 $ 5,067,856 $ 1,447,576 $ 13,450,774 $ Accrued liabilities 2,890,575 - 31,506 284,647 3,206,728 Refundable deposits 3,427,854 - - - 3,427,854 Intercity loan payable 2,260,619 - - - 2,260,619 Notes payable - - - 2,550,000 2,550,000 Unearned revenue - 1,254,649 - 2,920,568 4,175,217 Due to other funds 102,581 974,139 2,889,949 80,578 4,047,247 Total liabilities 15,011,536 2,834,223 7,989,311 7,283,369 33,118,439 Deferred inflows of resources:
Unavailable revenue 1,250,197 - - 1,192,011 2,442,208 Lease related 5,822,057 - - - 5,822,057 Total Deferred inflows 7,072,254 - - 1,192,011 8,264,265 Fund balances:
Non-Spendable:
Intercity loan 11,587,481 - - - 11,587,481 Prepaid items 178,624 2,127 - 33,588 214,339 Land held for resale 2,300,000 - - - 2,300,000 Restricted:
Public safety 29,205 - 150,636,505 5,227,875 155,893,585 Fire protection 56,158 - - - 56,158 Public right of way 107,300 - - 15,288,126 15,395,426 Drainage - - - 351,963 351,963 Community planning and development 6,387,492 - - 37,733,257 44,120,749 Community services 213,445 2,914,819 - 11,494,845 14,623,109 Municipal support and services 232,193 - - - 232,193 Pension trust 4,530,056 - - - 4,530,056 Committed:
Stability reserve 27,900,000 - - - 27,900,000 Designated revenue reserve 10,922,458 - - - 10,922,458 Assigned:
Post-employment benefits 1,000,000 - - - 1,000,000 Building improvements 1,300,000 - - - 1,300,000 General plan 944,595 - - - 944,595 Unassigned 97,843,033 - (7,980,147) (4,898) 89,857,988 Total fund balances 165,532,040 2,916,946 142,656,358 70,124,756 381,230,100 Total liabilities, deferred inflows of resources, and
fund balances 187,615,830 $ 5,751,169 $ 150,645,669 $ 78,600,136 $ 422,612,804 $ The notes to basic financial statements are an integral part of this statement.
CITY OF GARDEN GROVE
BALANCE SHEET
GOVERNMENTAL FUNDS
JUNE 30, 2024
28 111
Fund balances - total governmental funds (page 28) 381,230,100 $ Capital assets 1,064,810,554
Accumulated depreciation (381,748,856)
2,442,208
72,636,373
Long term debt (140,410,217)
Bond premium (11,707,425)
Prepaid bond insurance 86,710
Accrued interest payable (433,154)
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. (249,143,649)
Net position of governmental activities 706,910,842$
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 long 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. (30,851,802)
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, 2024
Amounts reported for governmental activities in the statement of net position are different because:
29 112
CITY OF GARDEN GROVE
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Civic
Navigation Center Nonmajor Total
General Center Revitalization Governmental Governmental Fund Fund Fund Funds Funds
REVENUES:
Taxes 159,566,000 $ - $ - $ 4,445,373 $ 164,011,373 $ Licenses and permits 3,035,509 - - 157,476 3,192,985 Fines, forfeits and penalties 2,720,851 - - 467,340 3,188,191 Investment earnings 7,048,121 3,450 - 2,301,940 9,353,511 Charges for current services 7,530,683 - - 3,668,449 11,199,132 From other agencies 181,780 4,509,191 - 21,574,095 26,265,066 Other revenues 4,920,194 4,001,297 - 650,119 9,571,610 Total revenues 185,003,138 8,513,938 - 33,264,792 226,781,868 EXPENDITURES:
Current:
Fire 31,604,001 - - - 31,604,001 Police 76,613,400 - - 2,200,557 78,813,957 Traffic safety 2,810,327 - - 3,150,479 5,960,806 Public right of way 18,550,550 - - 15,393,358 33,943,908 Community buildings 3,653,662 5,633,927 - - 9,287,589 Community services 5,923,389 - - 1,319,171 7,242,560 Economic development - - - 2,618,673 2,618,673 Parks and greenbelts 1,696,554 - - 1,933,279 3,629,833 Community planning and development 30,553,889 - 7,980,148 6,278,740 44,812,777 Municipal support 11,671,662 - - 538,029 12,209,691 Debt service:
Principal retirement 20,772,213 - - 5,735 20,777,948 Interest 684,551 - 387,541 30,092 1,102,184 Total expenditures 204,534,198 5,633,927 8,367,689 33,468,113 252,003,927 Excess of revenues
over expenditures (19,531,060) 2,880,011 (8,367,689) (203,321) (25,222,059) OTHER FINANCING SOURCES (USES):
Issuance of debt 695,362 - 151,024,047 - 151,719,409 Transfers in 2,305,933 - - 1,246,057 3,551,990 Transfers out (1,246,057) (20,000) - (1,412,378) (2,678,435) Total other financing (uses) 1,755,238 (20,000) 151,024,047 (166,321) 152,592,964 Net change in fund balances (17,775,822) 2,860,011 142,656,358 (369,642) 127,370,905 Fund balances, beginning of year 183,307,862 56,935 - 70,494,398 253,859,195 Fund balances, end of year 165,532,040 $ 2,916,946 $ 142,656,358 $ 70,124,756 $ 381,230,100 $ The notes to basic financial statements are an integral part of this statement. 30 113
Net change in fund balances - total governmental funds 127,370,905 $ Capital outlay 52,919,621
Depreciation expense (12,152,724)
Bond principal payment 20,683,557
Change in accrued interest (119,837)
Issuance of Lease Revenue bonds (151,719,409)
Amortization of bond premium and deferred items (4,179) Gain on the defeasance of debt 1,058,930
191,904
(802,974)
(2,954,428)
(17,624,509)
Change in net position of governmental activities 16,846,857$ The notes to basic financial statements are an integral part of this statement.
The issuance of long-term debt 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. 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, 2024
Amounts reported for governmental activities in the statement of activities are different because:
31 114
This page is intentionally blank.
115
Governmental
Activities -
Water Sewage Housing Total Nonmajor Total Enterprise Internal Service Utility Collection Authority Funds Funds Funds
ASSETS
Current assets:
Cash and cash investments 46,958,285 $ 50,894,549 $ 4,401,505 $ 20,051,754 $ 122,306,093 $ 123,036,040 $ Cash and cash investments with fiscal agents 1,542,564 - - - 1,542,564 - Taxes receivable - 52,416 - 272,920 325,336 - Accounts receivable 5,361,664 1,960,491 24,142 13,093 7,359,390 38,349 Interest receivable 129,517 134,045 10,608 51,035 325,205 306,831 Intergovernmental receivable - - - - - 85 Due from other funds - - - - - 126,940 Inventory - - - 23,702 23,702 526,793 Deposits and prepaid items 20,816 68,637 13,319 30,052 132,824 308,693 Total current assets 54,012,846 53,110,138 4,449,574 20,442,556 132,015,114 124,343,731 Noncurrent assets:
Intercity loans receivable, net - - - - - 3,061,631 Capital assets:
Land 1,471,805 537,984 - 3,132,711 5,142,500 - Construction in progress 4,664,996 3,516,540 - - 8,181,536 716,369 Depreciable capital assets, net 97,143,186 69,377,056 25,600 631,289 167,177,131 12,965,030 Total noncurrent assets 103,279,987 73,431,580 25,600 3,764,000 180,501,167 16,743,030 Total assets 157,292,833 126,541,718 4,475,174 24,206,556 312,516,281 141,086,761
DEFERRED OUTFLOWS OF RESOURCES
Unamortized loss on refunding of debt 60,605 - - - 60,605 - OPEB related items 1,492,565 360,275 591,880 205,871 2,650,591 849,219 Pension related items 4,091,353 1,781,104 1,560,611 580,862 8,013,930 2,116,988 Total deferred outflows 5,644,523 2,141,379 2,152,491 786,733 10,725,126 2,966,207
LIABILITIES
Current liabilities:
Accounts payable 6,812,469 836,666 31,325 408,426 8,088,886 1,525,147 Accrued liabilities 469,391 176,916 63,155 19,184 728,646 173,116 Refundable deposits 575,885 - 117,105 2,021,475 2,714,465 - Interest payable 33,107 20,214 11 798 54,130 2,173 Due to other funds 11,257 2,974 1,459 406 16,096 3,423 Current portion of long-term obligations
Subscription-based IT payable 63,000 - - - 63,000 11,224 Leases payable - - 11,014 125,236 136,250 83,278 Accrued compensated absences 529,498 300,045 - - 829,543 7,609,598 Claims payable - - - - - 7,503,317 OPEB liability 329,151 79,450 130,525 45,400 584,526 187,275 Long-term debt 1,033,192 752,456 - - 1,785,648 - Total current liabilities 9,856,950 2,168,721 354,594 2,620,925 15,001,190 17,098,551 Noncurrent liabilities:
Noncurrent portion of long-term obligations:
Subscription-based IT payable 126,000 - - - 126,000 43,950 Leases payable - - 11,077 319,475 330,552 267,095 Accrued compensated absences 16,377 9,280 - - 25,657 556,680 Claims payable - - - - - 40,756,577 Intercity loans payable 9,037,481 - - - 9,037,481 801,012 Long-term debt 23,857,528 11,335,979 - - 35,193,507 - Net pension liability 15,215,707 6,623,911 5,803,899 2,160,219 29,803,736 7,873,057 OPEB liability 2,589,039 624,941 1,026,688 357,109 4,597,777 1,473,074 Total noncurrent liabilities 50,842,132 18,594,111 6,841,664 2,836,803 79,114,710 51,771,445 Total liabilities 60,699,082 20,762,832 7,196,258 5,457,728 94,115,900 68,869,996
DEFERRED INFLOWS OF RESOURCES
Unamortized gain on refunding of debt - 128,652 - - 128,652 - OPEB related items 1,064,628 256,979 422,180 146,845 1,890,632 605,737 Pension related items 96,562 42,037 36,833 13,709 189,141 49,965 Total deferred inflows 1,161,190 427,668 459,013 160,554 2,208,425 655,702
NET POSITION
Net investment in capital assets 78,260,872 61,214,493 3,509 3,319,289 142,798,163 13,275,852 Unrestricted 22,816,212 46,278,104 (1,031,115) 16,055,718 84,118,919 61,251,418 Total net position 101,077,084 $ 107,492,597 $ (1,027,606) $ 19,375,007 $ 226,917,082 74,527,270 $ Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds 1,890,897 Net position of business-type activities 228,807,979 $
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, 2024
Business-Type Activities
32 116
Water Sewage Housing
Utility Collection Authority
Operating revenues:
Charges for services - $ - $ - $ Water sales 43,971,993 - - Section 8 grant revenue - - 54,073,324 Solid waste disposal fees - - - Property assessments - 4,402,876 - Sewer user fees - 7,565,171 - Other 228,831 - 78,382 Total operating revenues 44,200,824 11,968,047 54,151,706
Operating expenses:
Salaries and benefits 9,807,866 3,615,670 2,620,675 Contractual services 6,954,458 1,789,690 240,396 Liability claims - - - Materials and supplies 270,117 257,178 354,989 Water production expenses 14,227,462 - - Housing - - 49,402,802 Golf course operations - - - Depreciation and amortization 4,109,613 1,966,982 14,644 Total operating expenses 35,369,516 7,629,520 52,633,506
Operating income 8,831,308 4,338,527 1,518,200
Nonoperating revenues (expenses):
Investment income 2,009,093 2,127,669 175,804 Gain (loss) on disposal of assets (115,944) - - Other nonoperating revenues (expenses) (233,817) - - Interest expense (1,102,371) (434,456) 16 Total nonoperating (expenses) revenues 556,961 1,693,213 175,820 Income before transfers and capital contributions 9,388,269 6,031,740 1,694,020 Capital contributions - - - Transfers in 53,211 - - Transfers out - (53,211) - Change in net position 9,441,480 5,978,529 1,694,020 Total net position (deficit), beginning of year 91,635,604 101,514,068 (2,721,626) Total net position (deficit), end of year 101,077,084$ 107,492,597 $ (1,027,606) $ 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.
Business-Type Activities
- 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, 2024
33 117
Governmental
Activities -
Total Nonmajor Total Enterprise Internal Service
Funds Funds Funds
2,287,514$ 2,287,514 $ 23,532,409 $
- 43,971,993 -
- 54,073,324 -
3,454,444 3,454,444 -
599,664 5,002,540 -
- 7,565,171 -
19,029 326,242 392,232
6,360,651 116,681,228 23,924,641
789,773 16,833,984 7,440,363
1,368,544 10,353,088 3,906,693
- - 15,564,301
16,834 899,118 1,748,552
- 14,227,462 -
- 49,402,802 -
2,098,660 2,098,660 -
150,125 6,241,364 2,168,600
4,423,936 100,056,478 30,828,509
1,936,715 16,624,750 (6,903,868)
804,794 5,117,360 5,000,280
- (115,944) 17,812
- (233,817) -
(10,633) (1,547,444) (22,426)
794,161 3,220,155 4,995,666
2,730,876 19,844,905 (1,908,202)
- - 235,878
- 53,211 -
- (53,211) (873,555)
2,730,876 19,844,905 (2,545,879)
16,644,131 77,073,149
19,375,007$ 74,527,270 $
(1,742,905)
18,102,000$
Business-Type Activities
- Enterprise Funds
34 118
Water Sewage
Utility Collection
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers and user departments 44,057,731 $ 11,854,974 $ Payments to suppliers (20,408,066) (2,015,846)
Payments to employees (9,488,682) (3,772,551)
Payments for employee benefits - -
Net cash provided by operating activities 14,160,983 6,066,577
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Cash received from other funds - -
Cash paid to other funds (810,808) 377
Net cash (used) provided by noncapital financing activities (810,808) 377
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Purchases of capital assets (4,049,858) (6,358,429) Proceeds from sale of capital assets (115,023) 28,183 Principal paid on capital debt (1,933,192) (680,000) Interest paid on capital debt (1,097,206) (519,124)
Net cash (used) by capital and related financing activities (7,195,279) (7,529,370)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest earnings 934,611 1,039,957
Increase (decrease) in fair value of investments 1,040,308 1,076,678 Net cash provided by investing activities 1,974,919 2,116,635 Net (decrease) increase in cash and cash equivalents 8,129,815 654,219 Cash and cash equivalents, beginning of year 45,115,221 48,176,699 Cash and cash equivalents, end of year 53,245,036 $ 48,830,918 $ 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, 2024
Business-Type Activities
- Enterprise Funds
35 119
Governmental
Activities -
Housing Total Nonmajor Total Enterprise Internal Service Authority Funds Funds Funds
54,131,776$ 7,319,367 $ 117,363,848 $ 23,902,640 $ (49,996,908) (3,440,584) (75,861,404) (17,043,527) (2,965,687) (828,100) (17,055,020) (6,201,780) - - - (1,142,189) 1,169,181 3,050,683 24,447,424 (484,856)
134 115 249 729,928 - - (810,431) (1,310,193) 134 115 (810,182) (580,265)
- - (10,408,287) (2,558,352) - - (86,840) 86,112 (10,949) (123,909) (2,748,050) (83,278) 11 (9,842) (1,626,161) (22,438)
(10,938) (133,751) (14,869,338) (2,577,956)
86,843 384,681 2,446,092 2,456,528 85,210 409,922 2,612,118 2,531,293 172,053 794,603 5,058,210 4,987,821 1,330,430 3,711,650 13,826,114 1,344,744 2,940,550 16,294,704 112,527,174 121,746,686 4,270,980$ 20,006,354 $ 126,353,288 $ 123,091,430 $ (continued)
Business-Type Activities
- Enterprise Funds
36 120
Water Sewage
Utility Collection
Reconciliation of operating income to net cash
provided by operating activities:
Operating income 8,831,308 $ 4,338,527 $
Adjustments to reconcile operating income
to net cash provided by operating activities:
Depreciation and amortization expense 4,109,613 1,966,982 Other nonoperating revenues (expenses) (180,606) (81,394) Decrease (increase) in taxes receivable - 7,129 Decrease (increase) in accounts receivable 54,319 (120,202) Decrease (increase) in intergovernmental receivable - - Decrease (increase) in inventory - - Decrease (increase) in prepaid expenses (3,319) (60,022) Increase (decrease) in accounts payable 997,147 136,400 Increase (decrease) in subscription-based IT payable (63,000) - Increase (decrease) in accrued compensated absences (23,638) (51,489) Increase (decrease) in accrued liabilities 59,932 36,038 Increase (decrease) in refundable deposits 36,405 - 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 (280,418) (38,704) Increase (decrease) in net pension liability and related changes in deferred outflows and inflows of resources 623,240 (66,688) Total adjustments 5,329,675 1,728,050
Net cash provided by operating activities 14,160,983 $ 6,066,577 $ 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, 2024
Business-Type Activities
- Enterprise Funds
37 121
Governmental
Activities-
Housing Total Nonmajor Total Enterprise Internal Service Authority Funds Funds Funds
1,518,200$ 1,936,715 $ 16,624,750 $ (6,903,868) $ 14,644 150,125 6,241,364 2,168,600 - - (262,000) - - (37,573) (30,444) - 7,148 484,974 426,239 (21,978) - - - (23) - (6,843) (6,843) (46,817) - (13,735) (77,076) 163,533 (3,701) 64,032 1,193,878 - - - (63,000) - - - (75,127) 879,917 4,980 6,173 107,123 321,331 (27,078) 511,315 520,642 (1,561,704) - - - 32,364 - - - 3,917,983 (463,835) 17,908 (765,049) (11,181) 118,823 (62,408) 612,967 576,987 (349,019) 1,113,968 7,822,674 6,419,012 1,169,181$ 3,050,683 $ 24,447,424 $ (484,856) $ Business-Type Activities
- Enterprise Funds
38 122
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, 2024
ASSETS
Current assets:
Cash and cash investments 10,653,030 $
Cash and cash investments with fiscal agents 4,097,040
Accounts receivable 1,950
Interest receivable 22,733
Total current assets 14,774,753
Noncurrent assets:
Prepaid bond insurance costs 320,206
Land held for resale 849,639
Total noncurrent assets 1,169,845
Total assets 15,944,598
DEFERRED OUTFLOWS OF RESOURCES
Unamortized loss on refunding of debt 181,630
Total deferred outflows 181,630
LIABILITIES
Current liabilities:
Accounts payable 402,340
Accrued liabilities 5,801
Interest payable 481,750
Current portion of long-term obligations 6,416,557
Total current liabilities 7,306,448
Noncurrent liabilities:
Noncurrent portion of long-term obligations:
Long-term obligations 44,757,892
Total noncurrent liabilities 44,757,892
Total liabilities 52,064,340
NET POSITION
Held in trust for redevelopment dissolution (35,938,112) $ The notes to basic financial statements are an integral part of this statement. 39 123
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, 2024
ADDITIONS
Taxes 8,294,158 $
Investment earnings 344,630
Other revenues 11,450
Total additions 8,650,238
DEDUCTIONS
Program expenses 1,139,455
Administrative expenses 359,711
Interest and fiscal agency expenses 1,408,781
Total deductions 2,907,947
CHANGE IN NET POSITION 5,742,291
NET POSITION, BEGINNING OF YEAR (41,680,403)
NET POSITION, END OF YEAR (35,938,112)$
The notes to basic financial statements are an integral part of this statement. 40 124
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125
CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2024
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 component 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 Sanitary 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.
41 126
CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2024
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 significantly 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.
42 127
CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2024
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
3. 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
Housing Authority Fund
The Housing Authority Fund accounts for revenues and expenses pertaining to the Federal Section 8 Housing Program.
Navigation Center Fund
This fund was established to account for the City's project to develop and operate a multi-party Central Cities Navigation Center (CCNC). The CCNC will provide emergency housing along income and healthcare services to help individuals experiencing homelessness.
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.
Civic Center Revitalization Fund
This fund was established to account for the City's project to develop a new public safety facility for the Garden Grove Police Department, a new parking structure, and a redesigned Civic Center Park.
43 128
CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
3. Additionally, the City reports the following fund types:
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, communication replacement services, and building and structure rehabilitation services provided to City departments on a cost reimbursement basis.
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, investment 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. 44 129
CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
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.
Deposits 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 average quarterly cash and investment balances.
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 Payables
Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either “due to/from other funds” (i.e., the current portion of 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 and trust assets are to be used exclusively for payment of pension liabilities. Assets held in the trust are reported as restricted cash investments in the General Fund.
45 130
CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
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
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.
The City uses the purchase method to record prepaid items.
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:
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, 2024 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. 46 131
CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
4. Assets, Liabilities, and Net Position or Fund Balance (continued) e.
Assets Years
Buildings 30
Building improvements 20
Street infrastructure:
Pavement 30
Curbs & gutters 50
Sidewalks 50
Medians 50
Traffic signals 20
Walls 50
Driveways 50
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
Right-to-use assets varies
Subscription-based IT assets varies
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, represent a consumption of net assets that applies to 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. 47 132
CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
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 hierarchy are described as follows:
Level 1 - Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets.
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, represent an acquisition of net assets 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 five types of items which qualify for reporting in this category. Three of the items are deferred items from pension-related items, deferred charges related to OPEB and deferred items from lease- related items. The fourth 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 fifth 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 Compensated Absences
The City accounts for compensated absences (unpaid vacation, annual leave, comp time and sick leave) in an internal service (Employee Benefits) fund and the enterprise funds.
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.
Long-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.
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:
48 133
CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
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
•
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 by 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.
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, 2024, fund balance for governmental funds are made up of the followings:
49 134
CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
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. 50 135
CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
4. Assets, Liabilities, and Net Position or Fund Balance (continued) l.
Valuation Date June 30, 2022
Measurement Date June 30, 2023
Measurement Period July 1, 2022 - June 30, 2023
m.
Valuation Date June 30, 2023
Measurement Date June 30, 2023
Measurement Period July 1, 2022 - June 30, 2023
n.
The City monitors changes in circumstances that would require a remeasurement of its leases, and will remeasure the lease receivable and deferred inflows of resources if certain changes occur that are expected to significantly affect the amount of the lease receivable.
Leases
At the commencement of the lease, the City initially measures the lease receivable at the present value of payments expected to be received during the lease term.
Subsequently, the lease receivable is reduced by the principal portion of lease payments received. The deferred inflow of resources are initially measured as the initial amount of the lease receivable, adjusted for lease payments received at or before the lease commencement date. Subsequently, the deferred inflows of resources are recognized as revenue over the life of the lease term.
Key estimates and judgments include how the City determines the discount rate it uses to discount the expected lease receipts to present value, lease term and lease receipts.
The City used the estimated incremental borrowing rate as the discount rate for leases.
The lease term includes the noncancellable period of the lease. Lease receipts included in the measurement of the lease receivable is composed of fixed payments from the lessee.
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-Employment 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:
51 136
CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
4. Assets, Liabilities, and Net Position or Fund Balance (continued) o.
B. STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
1. Subscription-based Information Technology (IT) Arrangements Budgetary Information
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.
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, 2024, the Street Lighting Special Revenue Fund and the Public Safety Capital Project Fund reported expenditures in excess of appropriations of $734,721 and $16,292 respectively.
The City is a participant in subscription-based IT arrangements as detailed in Note 9.
The City recognizes subscription-based payables and right-to-use IT assets in the financial statements.
At the commencement of the arrangement, the City initially measures the payable at the present value of payments expected to be paid during the arrangement term.
Subsequently, the payable is reduced by the principal portion of payments made. The right-to-use assets are initially measured at the initial amount of the subscription- based IT payable. Subsequently, the right-to-use assets are amortized over the life of the arrangement term.
52 137
CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
B. STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY (continued)
2. Type of Fund
Housing Authority Enterprise
Successor Redevelopment Agency Fiduciary
Public Safety Capital Projects
Workers' Compensation Internal Service
Risk Management Internal Service
The Workers' Compensation Fund, an internal service fund, has a deficit fund balance of $1,692,011. The City anticipates future funding to this fund.
The Risk Management Fund, an internal service fund, has a deficit fund balance of $1,556,173. The City anticipates future funding to this fund.
The Public Safety Fund, a capital project fund, has a deficit fund balance of $38,336. The deficit is due to a transfer made to the General Fund to defease the 2015A Lease Revenue Bond.
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, 2024:
Deficit Fund Balance
The Housing Authority Fund, an enterprise fund, has a deficit fund balance of $1,027,606.
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 $35,938,112. The deficit is due to covenant obligations pursuant to developer disposition agreements and Education Revenue Augmentation Fund and Supplemental Education Revenue Augmentation Fund payables to the Housing Successor Agency.
Fund Deficit Fund Balance
(1,027,606)$
(38,336)$
(35,938,112)$
(1,692,011)$
(1,556,173)$
53 138
CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2023
C. DETAILED NOTES ON ALL FUNDS
1. Statement of net position
Cash and investments 423,195,075$
Cash and investments with fiscal agent 157,928,157
Cash and investments for pension trust 4,530,056
585,653,288
Successor Agency (Private Purpose Trust Fund)
Cash and investments 10,653,030
Cash and investments with fiscal agent 4,097,040
14,750,070
Total Cash and Investments 600,403,358$
Cash on hand 44,309$
Deposits with financial institutions 25,144,851
Investments 575,214,198
Total Cash and Investments 600,403,358$
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, 2024 are classified in the accompanying financial statements as follows:
54 139
CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
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 20% 25%
Negotiated Certificates of Deposit 3 years 20% None
Commercial Paper 270 days 25% ** 10%
Medium Term Notes 5 years 30% None
Mutual Funds N/A 20% 10%
Mortgage-backed Securities 5 years 20% None
Repurchase Agreement (Overnight) 14 days ** 10% None
Passbook Savings Account N/A None None
Maximum Percentage 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
Investments Authorized by 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
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 Type
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.
55 140
CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
C. DETAILED NOTES ON ALL FUNDS (continued)
1. U.S. Treasury 3.28
U.S. Agency Securities
FAMCMTN 3.06
FFCB 2.69
FHLB 2.03
FHLMC MTN 1.23
FHLMC Multifamily Structured 1.29
PEFCO 3.29
TVA 3.71
Mortgage-backed Security (Residential) 2.25
Mortgage-backed Security (Commercial) 3.22
Money Market Funds
Commercial Paper 0.30
Corporate Bonds 2.14
Corporate Bonds (Amortizing) 2.07
Municipal Bonds 1.85
Municipal Note 1,693,384 0.66
Munipal Bond (Amortizing) 924,685 1.00
Supranationals 1.40
Local Agency Investment Fund (LAIF)
Restricted cash and investments:
Investment Pool (PARS)
Held by fiscal Agent:
Money Market Funds
Total
Amount Aaa AAA
Aa1 - Aa3
AA+ - AA-
A1 - A3
A+ - A- Not Rated
U.S. Treasury Note 77,775,388 $ N/A 77,775,388 $ - $ - $ - $ - $ U.S. Agency Securities
FAMCMTN 8,040,344 N/A - - - - 8,040,344 FFCB 56,070,841 N/A - 56,070,841 - - - FHLB 23,979,821 N/A - 23,979,821 - - - FHLMC MTN 2,835,360 N/A - 2,835,360 - FHLMC Multifamily Structured 566,610 N/A - 566,610 - - - PEFCO 2,314,578 N/A - 2,314,578 - - - TVA 4,891,000 N/A - 4,891,000 - - - Mortgage-backed Security (Residential) 2,687,080 N/A - 2,687,080 - - - Mortgage-backed Security (Commercial) 16,162,826 N/A - 16,162,826 - - - Money Market Funds 5,400,892 AAA - 5,400,892 - - - Commercial Paper 13,768,272 A1/P1 - - - 13,768,272 - Corporate Bonds 59,857,272 A - 9,676,007 7,277,328 42,903,937 - Corporate Bonds (Amortizing) 2,005,662 A - 2,005,662 - - - Municipal Bonds 38,638,987 A - 17,049,965 21,589,022 - - Municipal Note 1,693,384 A - 1,693,384 - - - Municipal Bond (Amortizing) 924,685 A - 924,685 - - - Supranationals 18,662,265 AA - 18,662,265 - - - Local Agency Investment
Fund (LAIF) 72,383,670 N/A - - - - 72,383,670 Restricted cash and investments:
Investment Pool (PARS) 4,530,056 N/A - - - - 4,530,056 Held by fiscal agent:
Money Market Fund 162,025,205 AAA - 162,025,205 - - - Total 575,214,198$ 77,775,388$ 326,946,181$ 28,866,350$ 56,672,209$ 84,954,070$ Cash and Investments (continued)
Weighted
Average
Maturity
(in years)Authorized Investment Type Amount
$77,775,388
162,025,205
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:
$575,214,198
8,040,344
56,070,841
23,979,821
566,610
2,314,578
2,835,360
38,638,987
18,662,265
72,383,670
4,530,056
4,891,000
5,400,892
13,768,272
59,857,272
2,687,080
16,162,826
2,005,662
56 141
CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
C. DETAILED NOTES ON ALL FUNDS (continued)
1. FHLB U.S. Agency Securities
FFCB U.S. Agency Securities
Investment in State Investment Pool
The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The fair value of the City’s investment in this pool is reported in the accompanying financial statements at amounts based upon the City’s pro- rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis.
Cash and Investments (continued)
Concentration of Credit Risk
The investment policy of the City contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code.
Investments in any one issuer (other than U.S. Treasury securities, mutual funds, and external investment pools) that represent 5% or more of total City investments are as follows:
Issuer Investment Type Investment Amount
23,979,821$
56,070,841
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.
57 142
CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
C. DETAILED NOTES ON ALL FUNDS (continued)
1. Total
Significant Other
Observable Inputs
(Level 2)
Significant
Unobservable
Inputs (Level 3)
U.S. Treasury 77,775,388$ 77,775,388$ -$ -$ Commercial Paper 13,768,272 - 13,768,272 - Corporate Bonds 59,857,272 - 59,857,272 - Corporate Bonds
(Amortizing) 2,005,662 - 2,005,662 - Municipal Bonds 38,638,987 - 38,638,987 - Municipal Note 1,693,384 - 1,693,384 - Municipal Bond
(Amortizing) 924,685 - 924,685 - Supranationals 18,662,265 - 18,662,265 - U.S. Agency Securities
FHLB 8,040,344 - 8,040,344 - FFCB 56,070,841 - 56,070,841 - FHLB 23,979,821 - 23,979,821 - FHLMC MTN 2,835,360 2,835,360 -
FHLMC MULTIFAMILY
STRUCTURED 566,610 - 566,610 - PEFCO 2,314,578 - 2,314,578 - TVA 4,891,000 - 4,891,000 - Mortgage-backed
Securities (Res.) 2,687,080 - 2,687,080 - Mortgage-backed
Securities (Com.) 16,162,826 - 16,162,826 - Total 330,874,375 $ 77,775,388 $ 253,098,987 $ - $ The total amount invested by all public agencies in LAIF as of June 30, 2024 was $23.0 billion.
LAIF is part of the California Pooled Money Investment Account (PMIA), which at June 30, 2024 had a balance of $179.4 billion.
Cash and Investments (continued)
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)
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, 2024, the City reported $4,530,056 in cash and investments for pension trust. The pension trust assets are managed by 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. 58 143
CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
C. DETAILED NOTES ON ALL FUNDS (continued)
2. a.
b.
c.
d. 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 February 1, 2012.
$ 18,970,000
Loan from General Fund to the former redevelopment agency:
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
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
Intercity Loans Receivable/Payable at June 30, 2024 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. $ 9,037,481
Loan from General Fund to the former redevelopment agency:
59 144
CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
C. DETAILED NOTES ON ALL FUNDS (continued)
2. e
f
g
h
Less Allowance
Total Intercity Loans Receivable 39,957,131
(25,308,019)
Total Intercity Loans Receivable, net 14,649,112$
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 heating, 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%.
2,260,619
Intercity Loans Receivable/Payable at June 30, 2024 (continued) Loan from Water Utility Fund to the former redevelopment agency:
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. 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. 801,012
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
Loan from General Fund to Housing Capital Project Fund:
In June 2023, the City Council approved a loan between the Housing Capital Project Fund and the General Fund for $8,550,000 for the purchase of City property for development of affordable housing. The Housing Authority will pay this amount back to the City in the form of a Promissory Note at a rate of 5% per annum.
2,550,000
60 145
CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
C. DETAILED NOTES ON ALL FUNDS (continued)
3. 4.
5,044,260$
5. a.
General Fund 1,049,877 $ 102,581 $
Navigation Center Fund - 974,139
Nonmajor Governmental Funds - 80,578
Internal Service Funds 126,940 3,423
Water Utility - 11,257
Sewage Collection - 2,974
Housing Authority - 1,459
Nonmajor Enterprise Funds - 406
Total 1,176,817 $ 1,176,817 $
Due From
Other Funds
Due To Other
Funds
The former Redevelopment Agency has loans from the Low
Income Housing Assets Capital Project Fund, that were used to make the “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 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).
The amount due from the Successor Agency at June 30, 2024 is $6,054,260, which represents $5,044,260 of SERAF.
Interfund Receivables, Payables, and Transfers
Due From Successor Agency
Governmental Activities
As of June 30, 2024, the City has 15 leases; two digital billboards and 13 building leases located throughout Garden Grove. The interest rate for each lease range from 0.308% to 2.536%. The initial lease agreement term ranges from 29 - 360 months. One building lease has an option to extend for an additional two 12 month periods; and one building lease has an option to extend for nine 60 month periods. The total amount of lease revenue recognized in the current reporting period from leases is $906,811 and the total amount of interest received related to the leases was $107,417. The balance of the lease receivables at June 30, 2024 is $6,047,401. The City has a deferred inflow of resources associated with these leases that will be recognized as revenue over the term of the leases. The balance of deferred inflow of resources at June 30, 2024, is $5,822,057.
Leases Receivable
The composition of interfund receivable/payable balances as of June 30, 2024 61 146
CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
C. DETAILED NOTES ON ALL FUNDS (continued)
5. b.
General
Fund
Nonmajor
Governmental
Funds Total
General Fund -$ 1,246,057$ 1,246,057$ 20,000 - 20,000
Nonmajor Governmental Funds 1,412,378 - 1,412,378 Internal Service Funds 873,555 - 873,555 Total 2,305,933$ 1,246,057$ 3,551,990$
Transfers from the Employee Benefit Internal Service Fund were made in the amount of $873,555 to the Section 115 Pension Trust Fund to fund future City pension obligations.
A transfer was made to the General Fund from the Tri-City Navigation Fund in the amount of $20,000 to cover the administrative cost of the City.
Transfers from the General Fund were made to subsidize the Garden Grove Cable Fund in the amount of $621,101. In addition, the General Fund made a transfer to the Street Lighting District Fund in the amount of $624,956 to subsidize the operating costs.
A transfer from the Public Safety Capital Project Fund to the General Fund was made for $511,457 due to defeasance of the 2015A Lease Revenue Bond.
Transfers to the General Fund generated by the Garden Grove Tourism Improvement District Special Revenue Fund in the amount of $856,891 were made to fund future City projects. A transfer from the Asset Forfeiture Fund to the General Fund was made to the General Fund was made for $44,030 in regards to the Equitable Sharing Program. The total amount of the transfers from the Nonmajor Governmental Funds to the General Fund were $1,412,378.
Interfund Receivables, Payables, and Transfers (continued) The composition of interfund transfer balances for the year ended Transfers out:
Navigation Center Fund
Transfers in:
follows:
The interfund payable balances represent routine and temporary cash flow assistance from the General Fund and 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. 62 147
CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
C. DETAILED NOTES ON ALL FUNDS (continued)
6. a.
b.
c.
d.
e.
At June 30, 2024, nine MAP agreements are reflected in the Housing Successor 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% annually. 109,756
Notes receivable at June 30, 2024, consisted of the following:
Neighborhood Stabilization Program (NSP) Loan – Other
Grants and Contributions Major Special Revenue Fund:
At June 30, 2024, ten 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. $ 390,528
Mortgage Assistance Program (MAP) Loan – Other
nonmajor governmental funds:
Single Family Rehab (Deferred Loan) - Other nonmajor
governmental funds:
At June 30, 2024 twelve 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. 272,852
CalHome Mortgage Assistance (CalHome) Loan - Other
Grants and Contributions Major Special Revenue Fund:
At June 30, 2024, twenty-seven CalHome Agreements are
reflected in the Other Grants and Contributions Major Special Revenue Fund. 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. 1,583,736 Rental rehabilitation – Other nonmajor governmental
funds:
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. 1,246,499 63 148
CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
C. DETAILED NOTES ON ALL FUNDS (continued)
6. f.
g.
h.
i.
j.
At June 30, 2024, eleven 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. $ 130,321 Notes receivable at June 30, 2023, consisted of the following: (continued) ADDI Down Payment Rehab (ADDI) Loan – Other Grants and
Contributions Major Special Revenue Funds:
Rental rehabilitation - Other nonmajor governmental funds:
The Low and Moderate Income Housing Asset capital projects fund holds three 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. 1,850,843
Rental rehabilitation – Other Grants and Contributions Major Special Revenue Funds and Other nonmajor governmental
funds:
The City has entered into two 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. 6,330,672
Rental construction – Other nonmajor governmental funds:
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 $1.6 million was disbursed in June 2017 and is payable to the Housing Successor Agency Fund.
Its maturity will be the fifty-fifth anniversary of the date of the Release of Construction Covenants.
4,592,621
Affordable housing agreement – General Fund:
The City has entered into an Affordable Housing Agreement with a developer wherein the developer has agreed to comply to certain affordability covenants including the reimbursement to the City of forgone property taxes which would have been payable for the property, increasing at the rate of approximately 2% annually. 538,501 64 149
CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
C. DETAILED NOTES ON ALL FUNDS (continued)
6. k.
l.
m.
1,400,000
n.
o.
Less Allowance
Total Notes Receivable, net 34,198,643$
Stipulation for Summary Judgment:
The City has entered into an agreement with a low income housing provider to pay damages due to breach of contract pursuant to a summary judgment. The agreement stipulates that the housing provider will pay a total sum of $271,697 over five years with an annual interest rate of 2%. 56,268
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 $2,453,305 will be due at the end of the loan term or the maturity date of December 1, 2029. $ 3,107,015 Notes receivable at June 30, 2024, consisted of the following: (continued) Conveyance of Property Loan Agreement – Other nonmajor
governmental funds:
(1,546,974)
Affordable housing agreement – Home Fund:
The City has entered into an Affordable Housing Loan Agreement utilizing HOME funds for the purpose of assisting the developer with the construction of new low-income housing for City residents. The note bears an interest rate of 0% and is to be repaid in full at the end of the 55-year affordability period. Loan repayment is based on residual receipts and is contingent upon the release of construction covenants for the project. The loan amount is $1,400,000 and $1,260,000 of the loan was disbursed as of June 30, 2024.
Orchard Grove:
The City has entered into an affordable housing agreement with a developer where the City has provided a loan for $12,521,321 to the developer bearing interest at 3% per year over 57 years. 12,676,312 Total Notes Receivable 35,745,617
Small Business Assistance Program – General fund and
Other Grants and Contributions Major Special Revenue
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 $1,890,000. The notes bear an interest rate equal to 0% or the highest rate permitted by applicable law compounded annually. 1,459,693 65 150
CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
C. DETAILED NOTES ON ALL FUNDS (continued)
7. 8.
Beginning
Balance Increases Decreases
Ending
Balance
Governmental activities
Capital assets, not being depreciated:
Land 421,095,891$ 6,603,769$ -$ 427,699,660$ Construction in progress 23,630,809 54,475,428 (57,626,675) 20,479,562 444,726,700 61,079,197 (57,626,675) 448,179,222 Capital assets, being depreciated:
Infrastructure
Street system 423,621,039 28,276,738 (903,716) 450,994,061 Storm drain assets 75,851,672 3,718,381 - 79,570,053 Buildings and park assets 58,571,576 18,330,617 - 76,902,193 Right-to-use asset - buildings 122,129 173,948 (122,129) 173,948 Right-to-use asset - equipment 459,799 - - 459,799 Right-to-use asset - vehicles 188,539 137,625 - 326,164 SBITA assets 126,753 118,082 (34,772) 210,063 Furniture and equipment 37,510,806 2,538,572 (548,866) 39,500,512 Total capital assets, being depreciated 596,452,313 53,293,963 (1,609,483) 648,136,793 Less accumulated depreciation for:
Infrastructure
Street system (276,481,761) (7,898,780) - (284,380,541) Storm drain assets (53,774,730) (1,498,669) - (55,273,399) Buildings and park assets (34,063,019) (1,629,527) - (35,692,546) Right-to-use asset - buildings (67,939) (54,351) 122,125 (165) Right-to-use asset - equipment (21,276) (93,551) - (114,827) Right-to-use asset - vehicle (57,808) (86,406) - (144,214) SBITA assets (35,576) (59,477) 6,311 (88,742) Furniture and equipment (21,264,822) (3,122,690) 509,027 (23,878,485) Total accumulated depreciation (385,766,931) (14,443,451) 637,463 (399,572,919) Total capital assets, being depreciated, net 210,685,382 38,850,512 (972,020) 248,563,874 Governmental activities capital assets, net 655,412,082$ 99,929,709 $ (58,598,695) $ 696,743,096 $ Business-type activities
Capital assets, not being depreciated:
Land 5,142,500$ -$ -$ 5,142,500$ Construction in progress 10,487,044 12,432,011 (14,737,519) 8,181,536 15,629,544 12,432,011 (14,737,519) 13,324,036 Capital assets, being depreciated:
Building and structures 757,365 20,352 - 777,717 Water system 158,727,017 12,788,758 - 171,515,775 Sewer system 127,587,108 4,909,424 (1,984,181) 130,512,351 Right-to-use asset - equipment 108,614 - - 108,614 Right-to-use asset - vehicle 54,778 511,041 565,819 SBITA assets 315,000 - - 315,000 Machinery and equipment 655,795 67,677 - 723,472 Total capital assets, being depreciated 288,205,677 18,297,252 (1,984,181) 304,518,748 Less accumulated depreciation for:
Building and structures (338,874) (25,427) - (364,301) Water system (70,860,463) (4,022,436) - (74,882,899) Sewer system (59,287,984) (1,953,964) - (61,241,948) Right-to-use asset - equipment (51,113) (25,556) - (76,669) Right-to-use asset - vehicle (21,910) (113,397) (135,307) SBITA assets (63,000) (63,000) - (126,000) Machinery and equipment (476,909) (37,584) - (514,493) Total accumulated depreciation (131,100,253) (6,241,364) - (137,341,617) Total capital assets, being depreciated, net 157,105,424 12,055,888 (1,984,181) 167,177,131 Business-type activities capital assets, net 172,734,968$ 24,487,899 $ (16,721,700) $ 180,501,167 $ 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, 2024 are $2,819,063 and $849,639, respectively.
Capital Assets
Capital asset activity for the year ended June 30, 2024 was as follows:
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CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
C. DETAILED NOTES ON ALL FUNDS (continued)
8. Governmental Business-type
Activities Activities
Police Protection 611,220$ -$
Traffic safety 742,559 -
Right of way 7,156,220 -
Drainage 1,498,669 -
Community buildings 1,634,969 -
Municipal support 631,214 -
Water - 4,109,613
Sewage collection - 1,966,982
Golf course - 150,125
Housing Authority - 14,644
Internal service fund 2,168,600 -
Total 14,443,451$ 6,241,364$
9. a.
Beginning
Balance Additions Reductions Ending Balance
Due Within
One Year
Governmental activities
Lease Revenue Bonds, Series 2015A 20,715,000 $ - $ (20,715,000) $ - $ - $ Add: Premium 1,177,930 - (1,177,930) - - Lease Revenue Bonds, Series 2024A - 140,000,000 - 140,000,000 1,755,000 Add: Premium - 11,707,425 - 11,707,425 390,248 Leases payable 637,981 263,063 (179,447) 721,597 190,066 SBITA payable 66,269 114,036 (86,138) 94,167 40,831 Governmental activities
long-term debt 22,597,180 152,084,524 (22,158,515) 152,523,189 2,376,145 Other non-current liabilities:
Claims payable 44,341,911 12,570,211 (8,652,228) 48,259,894 8,413,710 Compensated absences 7,844,947 8,743,694 (8,422,363) 8,166,278 7,921,289 Governmental activities
long-term liabilities 74,784,038 $ 173,398,429 $ (39,233,106) $ 208,949,361 $ 18,711,144 $ Business-type activities
Water Revenue COP 2015 930,000 $ - $ (930,000) $ - $ - $ Water Revenue Bond 2020 22,800,000 - (890,000) 21,910,000 920,000 Add: Premium/(Discount) 3,093,912 - (113,192) 2,980,720 113,192 Sewer Revenue Refunding Bond 2017 11,905,000 - (680,000) 11,225,000 715,000 Add: Premium/(Discount) 935,891 - (72,456) 863,435 72,456 Leases payable 90,619 511,041 (134,858) 466,802 36,517 SBITA payable 252,000 - (63,000) 189,000 63,000 Other non-current liabilities:
Compensated absences 930,327 712,472 (787,599) 855,200 829,543 Business-type activities
long-term liabilities 40,937,749 $ 1,223,513 $ (3,671,105) $ 38,490,157 $ 2,749,708 $ Private-purpose trust fund
2016 Tax Allocation Bond 30,610,000 $ - $ (2,160,000) $ 28,450,000 $ 2,265,000 $ Add: Premium/(Discount) 3,698,356 - (360,815) 3,337,541 360,815 2014 Tax Allocation Bond 15,230,000 - (3,170,000) 12,060,000 3,330,000 Add: Premium/(Discount) 1,973,391 - (315,743) 1,657,648 315,742 2008 Subordinate Note 760,000 - (135,000) 625,000 145,000 Loan Payable to City 5,054,260 - (10,000) 5,044,260 - Private-purpose trust fund
long-term liabilities 57,326,007 $ - $ (6,151,558) $ 51,174,449 $ 6,416,557 $ Capital Assets (continued)
Depreciation expense was charged to functions/programs of the primary government as follows:
Long-term Debt
Following is a summary of long-term debt transactions for the City for the year ended June 30, 2024:
67 152
CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
C. DETAILED NOTES ON ALL FUNDS (continued)
9. b.
140,000,000$
Unamortized bond premium 11,707,425
Total lease revenue bonds 151,707,425$
173,945$
362,979
184,673
Total leases payable 721,597
The City entered into 14 vehicle leases between the dates of July 2021 through June 2024. As of June 30, 2024, the value of the lease liability is $184,673. The City is required to make monthly fixed payments ranging from $369 to $940. The leases have interest rates ranging from 0.426% to 3.631%. The vehicles lease terms range from 24 months to 60 months.
The City entered into two equipment leases in July 2022 and May 2023. As of June 30, 2024, the value of the lease liability is $362,980. The City is required to make fixed monthly payments of $578 and $8,728 on the two leases. The initial lease terms were 46 and 60 months. The leases have interest rates of
0.817% and 2.467%.
Long-term Debt (continued)
Governmental Long-term Debt at June 30, 2024 consisted of the following:
Lease Revenue Bonds, Series 2024 A
On June 1, 2024, the Garden Grove Public Financing Authority issued $140,000,000 of Lease Revenue Bonds, Series 2024A. The Bonds were issued to finance the design and construction of certain public capital improvements to be located on City-owned property located at Acacia Parkway, east of Euclid Street, in the City, including an approximately 100,000 square foot safety facility, a four-level parking structure that will provide approximately 350 parking spaces, and a reconfigured 2.8-acre Civic Center Park, as well as the demolition of the existing police headquarters. Principal payments on the bonds are due annually on April 1 each year, ranging from $1,755,000 to $8,415,000, and continuing until April 1, 2054. Interest is payable semiannually, beginning on October 1, 2024, with an interest rate of 5.00% over the life of the bonds.
Such bonds are subject to Federal arbitrage regulations, however, no arbitrage liability is reported at June 30, 2024.
Leases Payable - Governmental Activities
The City entered into one building lease extension in June 2024.
As of June 30, 2024, the value of the lease liability is $173,945.
The City is required to make monthly fixed payments of $4,860.
The lease has an interest rate of 2.426%. The lease term is 36 months. The lease has an optional 12 month extension.
68 153
CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
C. DETAILED NOTES ON ALL FUNDS (continued)
9. 94,167$
Total SBITA payable 94,167
Total Governmental Long Term Debt 152,523,190$
As of June 30, 2024, the City has recognized a liability of $94,167 related to these subscription-based IT arrangements. This liability represents the total estimated cost of the remaining subscription period, as determined by the contract terms and usage data.
Long-term Debt (continued)
SBITA Payable - Governmental Activities
The City has entered into subscription-based information technology (IT) arrangements with various vendors. These arrangements are governed by Governmental Accounting
Standards Board Statement No. 96, Subscription-Based IT Arrangements.
69 154
CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
c.
9. 21,910,000$
Unamortized bond premium 2,980,720
Total 2020 revenue bonds 24,890,720$
Proprietary long-term debt at June 30, 2024 consisted of the following 2020 Revenue Bonds - Water Utility Enterprise Fund
$23,220,000 Refunding Revenue Bonds, Series 2020 were issued on November 3, 2020, for the advance refunding of the remaining outstanding balance of the previously issued $16,625,000 Water Revenue Bonds, Series 2010. The refunding was undertaken to reduce the City's total debt service payments over the next 10 years by $2.7 million. The net proceeds of $15.6 million will be used to finance the acquisition, expansion, construction, and improvement of certain additional water facilities of the water system of the City. Principal payments for 2020 Revenue Bonds range from $420,000 to $1,160,000 and are due annually each December 15 through fiscal year 2051. Interest is payable semi- annually on June 15 and December 15, at rates ranging from 3.0% to
4.0% over the life of the bonds. The refunding resulted in a net present value saving of $1.63 million, or 15.3% of the refunded bonds. Such certificates are subject to Federal arbitrage regulations; however, no arbitrage liability is reported at June 30, 2024.
These bonds are to be secured and to be serviced from revenues derived by the ownership and operations of the water system including all connection charges and fees collected by the City through the fiscal year 2051. At June 30, 2024 total interest and principal remaining on the bonds is $31,774,213. The Utility covenants that rates and charges for the water service will be sufficient to yield net revenues equal to 125% of the debt service coming due and payable during the next succeeding bond year. Revenue recognized during the year was $44.2 million against debt service payments of $1,696,175. The following analysis shows the test result for compliance with this covenant:
70 155
CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
C. DETAILED NOTES ON ALL FUNDS (continued)
9. c.
Operating Revenue 44,200,824 $
Non-operating revenues -
Gross revenue 44,200,824
(32,398,356)
Net revenues 11,802,468 $
Debt service requirement for next year:
$1,696,175 x 125% 2,120,219$
11,225,000$
Unamortized bond premium 863,435
Total 2017 revenue refunding bond 12,088,435$
The certificates are secured and to be serviced from the total revenues for the fiscal year excluding any proceeds of taxes or assessments restricted by law and less the operations and maintenance costs excluding depreciation through the fiscal year 2036.
Long-term Debt (continued)
Proprietary long-term debt at June 30, 2024 consisted of the following items:
(continued)
On March 1, 2017, the Garden Grove Sanitary District issued $15,970,000 in bonds to provide funds to refinance the District’s obligations to the 2006 Sewer Revenue Certificate of Participation.
The Certificates were issued to finance the rehabilitation, replacement and improvement of the wastewater collection system of the Garden Grove Sanitation District. The 2017 Bonds are due in annual principal installments of $615,000 to $1,160,000 beginning June 15, 2017 through 2036. Interest rates range from 2.0% to
5.0% and is payable semiannually on June 15 and December 15.
The net proceeds of the bond issue were used to provide for the prepayment of the 2006 Certificates. The reacquisition price was less than the net carrying amount of the old debt by $206,922.
This amount is being reflected as a deferred inflow of resources and amortized over the life of the refunding debt.
2020 Revenue Bonds - Water Utility Enterprise Fund - Debt Service Coverage (continued)
2017 Refunding Sewer Revenue Bond – Sewage Collection
Less: Expenses (excluding depreciation
amortization, interest and fiscal charges)
71 156
CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
C. DETAILED NOTES ON ALL FUNDS (continued)
9. c.
Operating Revenue 11,968,047 $
Non-operating revenues -
Gross revenue 11,968,047
(5,715,749)
Net revenues 6,252,298 $
Debt service requirement for next year:
$1,200,125 x 115% 1,380,144$
22,090$
412,701
32,011
Total leases payable 466,802
189,000$
Total SBITA payable 189,000
Total Proprietary Long Term Debt 37,634,957$
The Utility covenants that rates and charges for the sewer service will be sufficient to yield net revenues equal to 115% of the debt Less: Expenses (excluding depreciation
amortization, interest and fiscal charges)
SBITA Payable - Business-Type Activities
Long-term Debt (continued)
Proprietary long-term debt at June 30, 2024 consisted of the following items:
(continued)
2017 Refunding Sewer Revenue Bond – Sewage Collection
Enterprise fund - Debt Service Coverage
The City has entered into subscription-based information technology (IT) arrangements with Nobel Systems Inc. This arrangement is governed by Governmental Accounting Standards Board Statement No. 96, Subscription-Based IT Arrangements.
Leases Payable - Business-Type Activities
The City entered into two vehicle leases in April 2019. As of June 30, 2024, the value of the lease liability is $22,090. The City is required to make monthly fixed payments of $463 per lease. The leases have an interest rate of 0.577%. The remaining lease term of is one year.
Willowick Golf Management, LLC, through authorization from the City, entered into a lease arrangement in the amount of $108,614 for golf maintenance equipment October 2020. As of June 30, 2023, the value of the lease liability is $57,579. The City is required to make monthly fixed payments of $2,136. The leases have an interest rate of
0.1459%. The estimated remaining lease term is 27 months.
As of June 30, 2024, the City has recognized a liability of $189,000 related to this subscription-based IT arrangement. This liability represents the total estimated cost of the remaining subscription period, as determined by the contract terms and usage data.
Troon Golf, LLC, through authorization from the City, entered into two new vehicle leases in July 2023. As of June 30, 2023, the value of the lease liabilities is $412,701. The City is required to make monthly fixed payments of $9,010. The leases have an interest rate of 2.310%. The remaining lease term is 48 months.
72 157
CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
C. DETAILED NOTES ON ALL FUNDS (continued)
9. d.
28,450,000$
Unamortized bond premium 3,337,541
Total Tax Allocation Bond Issue of 2016 31,787,541$
12,060,000$
Unamortized bond premium 1,657,648
Total Tax Allocation Bond Issue of 2014 13,717,648$
Tax Allocation Bonds Issue of 2016
$42,000,000 Tax allocation bonds were issued on March 17, 2016.
The SRDA issued the “2016 Bonds” in the aggregate principal amount necessary to provide net proceeds of $42,000,000 to fund the Water Park Hotel pursuant to the first amended and restated disposition and development agreement dated April 13, 2010. The bonds are due in annual principal installments of $1,975,000 to $3,450,000. Interest on the bonds will be payable semiannually each April 1 and October 1, commencing October 1, 2016. The rates ranging from 1.0% to 5.0%. The “2016 Bonds” will be payable on a parity with the debt service on the 2014 Bonds to the extent set forth in the 2016 Bond Indenture. Such certificates are subject to federal arbitrage regulations. No arbitrage liability is reported at June 30, 2024.
Long-term Debt (continued)
Private-purpose trust activity long-term debt at June 30, 2024 consisted of the following items:
Tax Allocation Refunding Bonds Issue of 2014
$38,810,000 Tax allocation refunding bonds were issued on July 16, 2014. The bonds were issued for the purpose of refunding the Garden Grove Agency for Community Development’s previously issued $57,025,000 community project tax allocation refunding bonds, Series 2003. Proceeds of the Series 2014 bonds will also be used (i) to fund a debt service reserve fund for the 2014 Bonds and (ii) to pay costs incurred in connection with the issuance, sale, and delivery of the 2014 Bonds.
Principal payments ranging from $1,580,000 to $3,330,000 are due annually through the year 2029. Interest is due semi-annually on October 1 and April 1, at rates ranging from 1.0% to 5.0%.
Such bonds are subject to Federal arbitrage regulations; however, no liability is reported at June 30, 2024.
73 158
CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
C. DETAILED NOTES ON ALL FUNDS (continued)
9. d.
625,000$
On June 1, 2008, the former redevelopment agency for Community Development entered into a note purchase agreement in the amount of $2,015,000, to refund a note issued to Katella Cottages LLC under a Disposition and Development Agreement dated May 11, 2004. The Note has an annual interest rate of 6% with principal payments due annually on October 1 through October 1, 2027. Principal payments range from $120,000 to $170,000.
Upon the dissolution of the former redevelopment agency at February 1, 2012, the outstanding balance of the bonds was transferred to the Successor Agency.
Subordinate Note
Long-term Debt (continued)
Private-purpose trust activity long-term debt at June 30, 2024 consisted of the following items: (continued)
74 159
CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
C. DETAILED NOTES ON ALL FUNDS (continued)
9. d.
5,044,260$
Total Private Purpose Trust Funds Long Term Debt 51,174,449$ e.
Principal Interest Total
2025 1,755,000$ 5,416,774$ 7,171,774$ 2026 2,230,000 6,522,550 8,752,550 2027 2,345,000 6,411,050 8,756,050 2028 2,460,000 6,293,800 8,753,800 2029 2,585,000 6,170,800 8,755,800 2030-2034 14,980,000 28,783,000 43,763,000 2035-2039 19,120,000 24,643,750 43,763,750 2040-2044 24,410,000 19,361,000 43,771,000 2045-2049 31,145,000 12,617,500 43,762,500 2050-2054 38,970,000 4,798,400 43,768,400 Total 140,000,000$ 121,018,624$ 261,018,624$ Principal Interest Total
2025 245,117$ 14,892$ 260,009$ 2026 220,389 9,464 229,853 2027 171,034 4,317 175,351 2028 85,058 1,053 86,111 721,598$ 29,726$ 751,324$ Principal Interest Total
2025 40,831$ 2,183$ 43,014$ 2026 24,797 1,205$ 26,002 2027 14,023 633$ 14,656 2028 14,516 127 14,643 94,167$ 4,148$ 98,315$ Year
Ending
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 payments and “Supplemental”
Education Revenue Augmentation Fund payments for the fiscal year 2009-10 ($7,906,610) and 2010-11 ($1,626,274). In
accordance with Assembly Bill X1 26, existing agreements between the City and the former redevelopment agency have previously been invalidated. In fiscal year 2017-18, the California Department of Finance changed its previous
determination and has now approved the repayment of the ERAF and SERAF loans ($13,254,260) as an enforceable obligation. At June 30, 2021 the Successor Agency has repaid $6,200,000 of the loan balance. The amount due to the City at June 30, 2024 is $5,054,260, which represents $5,044,260 of SERAF.
Long-term Debt (continued)
Private-purpose trust activity long-term debt at June 30, 2024 consisted of the following items: (continued)
Loan Payable to City
The scheduled annual requirements to amortize all governmental long-term debt outstanding as of June 30, 2024 including interest payments are as follows:
Year
Ending
SBITA Payable - Governmental Activities
Lease Revenue Bonds 2024A
Year
Ending
Leases Payable - Governmental Activities
75 160
CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
C. DETAILED NOTES ON ALL FUNDS (continued)
9. f.
Principal Interest Total
2025 920,000$ 776,175$ 1,696,175$ 2026 960,000 738,575 1,698,575 2027 1,000,000 699,375 1,699,375 2028 1,035,000 658,675 1,693,675 2029 1,080,000 616,375 1,696,375 2030-2034 3,845,000 2,518,375 6,363,375 2035-2039 3,035,000 1,955,500 4,990,500 2040-2044 3,670,000 1,300,425 4,970,425 2045-2049 4,420,000 551,800 4,971,800 2050-2051 1,945,000 48,938 1,993,938 Total 21,910,000 $ 9,864,213 $ 31,774,213 $ Principal Interest Total
2025 715,000$ 485,125$ 1,200,125$ 2026 750,000 449,375 1,199,375 2027 785,000 411,875 1,196,875 2028 825,000 372,625 1,197,625 2029 870,000 331,375 1,201,375 2030-2034 5,000,000 996,400 5,996,400 2035-2036 2,280,000 120,400 2,400,400 Total 11,225,000 $ 3,167,175 $ 14,392,175 $ Principal Interest Total
2025 136,249$ 8,611$ 144,860$ 2026 119,441 6,192 125,633 2027 104,337 3,777 108,114 2028 106,775 1,341 108,116 Total 466,802$ 19,921$ 486,723$ Principal Interest Total
2025 63,000$ -$ 63,000$ 2026 63,000 - 63,000 2027 63,000 - 63,000 Total 189,000 $ - $ 189,000 $ Year Ending
June 30
SBITA Payable - Business Type Activities
Year Ending
June 30
2017 Sewer Refunding Revenue Bonds
Long-term Debt (continued)
The scheduled annual requirements to amortize all proprietary long-term debt outstanding as of June 30, 2024 including interest payments are as follows:
Year Ending
June 30
2020 Water Revenue Bonds
Year Ending
June 30
Leases Payable - Business Type Activities
76 161
CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
C. DETAILED NOTES ON ALL FUNDS (continued)
9. g.
Principal Interest Total
2025 2,265,000$ 1,229,875$ 3,494,875$
2026 2,380,000 1,113,750 3,493,750
2027 2,500,000 991,750 3,491,750
2028 2,625,000 863,625 3,488,625
2029 2,755,000 729,125 3,484,125
2030-2034 15,925,000 1,516,625 17,441,625 Total 28,450,000 $ 6,444,750 $ 34,894,750 $ Principal Interest Total
2025 3,330,000$ 519,750$ 3,849,750$
2026 1,955,000 387,625 2,342,625
2027 1,955,000 289,875 2,244,875
2028 1,610,000 200,750 1,810,750
2029 1,580,000 121,000 1,701,000
2030 1,630,000 40,750 1,670,750
Total 12,060,000 $ 1,559,750 $ 13,619,750 $ Principal Interest Total
2025 145,000$ 33,150$ 178,150$
2026 150,000 24,300 174,300
2027 160,000 15,000 175,000
2028 170,000 5,100 175,100
Total 625,000 $ 77,550 $ 702,550 $ Year Ending
June 30
Subordinate Note 2008
Long-term Debt (continued)
The scheduled annual requirements to amortize all the Successor Agency long- term debt outstanding as of June 30, 2024 including interest payments are as follows:
Year Ending
June 30
Tax Allocation Refunding Bonds Issue of 2016
Year Ending
June 30
Tax Allocation Refunding Bonds Issue of 2014
77 162
CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
C. DETAILED NOTES ON ALL FUNDS (continued)
10. Compensated Absences
The City accounts for compensated absences (unpaid vacation, annual leave, unused holiday, compensated time off, and sick leave) in the Employee Benefit internal service fund and the enterprise funds. The balance for accrued compensated absences at June 30, 2024 is $9,021,478.
Vacation accrues for all employee groups at 10 hours per month after one year of service, 12 hours per month after nine years, 14 hours per month after 14 years, 17.25 hours per month after 19 years, and 20.50 hours per month after 24 years. The maximum an employee may accumulate is an amount equivalent to two full calendar years of service.
The maximum management may accumulate is an amount equivalent to two full calendar years of service plus 40 hours.
Sick leave is accumulated on the basis of eight hours for each month of service beginning from the date of hire for all employee groups other than police. Police employees accumulate on the basis of 10 hours for each month of service beginning from the date of hire. The City has adopted a policy for payment of unused sick leave benefits at time of retirement. Employees can be paid 50% for all unused hours up to 1,000, police employees 100% of up to 750 unused hours, and management employees 50% of all unused hours. Studies have indicated that only 13.95% of all accumulated sick leave is actually used by employees, therefore, the sick leave liability is estimated at 13.95% of the total accumulated benefit, or $2,179,180 at June 30, 2024.
A calculated fringe benefit rate, which includes accrued compensated absences, workers’ compensation, retirement and medical benefits, is applied to all labor charges. The resulting funds are deposited into internal service funds and are set aside for corresponding liabilities, which are fully funded by sufficient cash and investment in that fund. Compensated absences are liquidated using the employee benefits internal service fund’s available net position.
78 163
CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
C. DETAILED NOTES ON ALL FUNDS (continued)
10. Compensated Absences (continued)
Governmental funds:
Beginning
Balance Additions Reductions
Ending
Balance
Due Within
One Year
6,046,925$ 7,204,198 $ (7,095,929) $ 6,155,194 $ 5,970,537 $ Sick Leave 1,798,022 1,539,496 (1,326,434) 2,011,084 1,950,752 Total 7,844,947$ 8,743,694$ (8,422,363)$ 8,166,278$ 7,921,289$ Enterprise funds:
Beginning
Balance Additions Reductions
Ending
Balance
Due Within
One Year
752,498$ 492,204 $ (557,598) $ 687,104 $ 666,491 $ Sick Leave 177,829 220,268 (230,001) 168,096 163,052 Total 930,327 $ 712,472 $ (787,599) $ 855,200 $ 829,543 $ Totals 8,775,274$ 9,456,166 $ (9,209,962) $ 9,021,478 $ 8,750,832 $
11. Risk Management
The City also has a self-insured program for its tort and civil liabilities. The City is self-insured for the first $2 million per occurrence. Excess liability insurance is carried thereafter to $33 million per occurrence with commercial insurers. Claims administration and adjusting services are provided by contract with a third-party administrator specializing in public entity liability.
Representation in matters of litigation is performed through the retaining of outside law firms and is supervised by the city attorney. This self-insurance program is accounted for in the Risk Management internal service fund.
The City estimates a general liability for claims outstanding, including claims incurred but not reported, on June 30, 2024, in the amount of $10,519,665 which has been included as liabilities in the Risk Management internal service fund.
Vacation, Annual
Leave, Benefits, and
Comp Time
Vacation, Annual
Leave, Benefits, and
The City utilizes a program to self-insure for workers’ compensation liability for the first $1 million, per occurrence, for injury or occupational illness to City employees pursuant to Workers’ Compensation Laws of the State of California. The City contracts with a third party who administers the program and acts as the representative of the City in claim hearings and litigation. Excess coverage is placed with a joint powers authority for losses from $1 million up to the statutory limit per occurrence. This self-insurance program is accounted for in the Workers’ Compensation internal service fund. There is an estimated liability of $37,740,229 for workers' claims outstanding including claims incurred but not reported on June 30, 2024, which has been included as liabilities in the Workers’ Compensation internal service fund.
The City is a defendant in various lawsuits. Attempts are made to settle these cases or proceed to trial as recommended by the attorney. The City believes that it has meritorious defenses to the allegations contained in the cases. However, the City has accrued and reserved reasonable amounts based on the actuarial analysis and attorney recommendations to cover the potential losses to the extent the exposures are deemed probable and estimable. 79 164
CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
C. DETAILED NOTES ON ALL FUNDS (continued)
11. Risk Management (continued)
Worker's Compensation 2024 2023
Liability, July 1 37,481,873 $ 39,565,247 $
Cost and claims incurred 6,944,278 2,660,807 Claim payments (6,685,922) (4,744,181)
Liability, June 30 37,740,229$ 37,481,873$
Due within one year 4,807,611 $ 5,010,907 $
Due in more than one year 32,932,618 32,470,966 37,740,229$ 37,481,873$
Risk Management
Liability, July 1 6,860,038 $ 6,912,099 $
Cost and claims incurred 5,625,933 120,439
Claim payments (1,966,306) (172,500)
Liability, June 30 10,519,665$ 6,860,038$
Due within one year 3,606,099$ 2,492,410$
Due in more than one year 6,913,566 4,367,628 10,519,665$ 6,860,038 $
Settled claims have not exceeded any of the City’s coverage amounts in any of the last three fiscal years and there were no reductions in the City’s insurance coverage during the year ended June 30, 2024. Changes in the aggregate liability for claims for fiscal year ended June 30, 2024 and June 30, 2023 are as follows:
80 165
CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
C. DETAILED NOTES ON ALL FUNDS (continued)
12. a.
•
•
•
•
Prohibits certain cash payment from being counted as compensation; and Increases retirement age for all new public employees.
Each employee contributes toward his or her retirement based upon the retirement formula. Under PEPRA, the mandated employee contribution rate is one half of the normal cost as determined annually by CalPERS for the City when the actuarial valuation of the plans are performed. Active PEPRA plan members in the Miscellaneous Plan of the City are required to contribute 7.75% of reportable earnings for a 2.0% at 62 retirement plan. Active PEPRA plan members in the Safety Plan of the City are required to contribute 13.75% of reportable earnings for a 2.7% at 57 retirement plan. Active "Classic" plan members in the Miscellaneous Plan of the City are required to contribute 8.00% of reportable earnings for a 2.5% at 55 retirement plan. Active "Classic" plan members in the Safety Plan of the City are required to contribute 9.00% of reportable earnings for a 3.0% at 50 retirement plan.
The required employer contribution rates for fiscal year ended June 30, 2024 under PEPRA are the same as the employer contribution rates for existing miscellaneous employees and public safety employees.
Public Employees' Retirement System
General Information about the Pension Plans
Plan Description - The City of Garden Grove’s defined benefit pension plans, the Miscellaneous Plan of the City of Garden Grove and the Safety Plan of the City of Garden Grove, provide retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. The Miscellaneous Plan of the City of Garden Grove and the Safety Plan of the City of Garden Grove are part of the Public Agency portion of the California Public Employees Retirement System (CalPERS), an agent multiple-employer plan administered by CalPERS, which acts as a common investment and administrative agent for participating public employers within the State of California. A menu of benefit provisions as well as other requirements are established by State statutes within the Public Employees’ Retirement Law. The City selects optional benefit provisions from the benefit menu by contract with CalPERS and adopts those benefits through local ordinance. CalPERS issues a separate Annual Comprehensive Financial Report.
Copies of CalPERS’ annual financial report may be obtained from the CalPERS Executive Office, 400 P Street, Sacramento, CA 95814.
On September 12, 2012, the California Governor signed the California Public Employees’ Pension Reform Act of 2013 (PEPRA) into law. PEPRA took effect January 1, 2013. Key components of the legislation are as follows:
Establishes PEPRA which applies to all public employers and public pension plans on and after January 1, 2013 (except specific exemptions); Establishes new retirement tiers/benefits for new public employees; 81 166
CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
C. DETAILED NOTES ON ALL FUNDS (continued)
12. a.
Hire date
Prior to
January 1, 2013
On or after
January 1, 2013
Benefit formula 2.5% @ 55 2.0% @ 62
Benefit vesting schedule 5 years service 5 years service Benefit payments monthly for life monthly for life
Retirement age 50-55 52 - 67
Monthly benefits, as a % of eligible
compensation 2.0% to 2.5% 1.0% to 2.5%
Required employee contribution rates 8.00% 6.75%
Required employer contribution rates 42.55% 42.55%
Hire date
Prior to
January 1, 2013
On or after
January 1, 2013
Benefit formula 3.0% @ 50 2.7% @ 57
Benefit vesting schedule 5 years service 5 years service Benefit payments monthly for life monthly for life
Retirement age 50 50 - 57
Monthly benefits, as a % of eligible
compensation 3.00% 2.0% to 2.7%
Required employee contribution rates 9.00% 13.75%
Required employer contribution rates 96.18% 96.18%
Misc Safety
Inactive employees or beneficiaries
currently receiving benefits 708 512 Inactive employees entitled to but
not yet receiving benefits 495 156 Active employees 386 172
Total 1,589 840
Employees covered - At June 30, 2022 (actuarial valuation date), the following employees were covered by the benefit terms for each Plan:
Public Employees' Retirement System (continued)
General Information about the Pension Plans (continued) Benefits provided - CalPERS provides service retirement and disability benefits, annual cost of living adjustments, and death benefits to plan members who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law.
The Plans’ provisions and benefits in effect at June 30, 2024, are summarized as follows:
Miscellaneous
Safety
82 167
CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
C. DETAILED NOTES ON ALL FUNDS (continued)
12. a.
b. Net Pension Liability
Actuarial Cost Method
Actuarial Assumptions
Discount Rate 6.90%
Inflation 2.30%
Salary Increase Varies by Entry Age and Service
Mortality Rate Table1
Derived using CalPERS' membership data for all funds
1 Public Employees' Retirement System (continued)
General Information about the Pension Plans (continued) Contributions - Section 20814(c) of the California Public Employees’ Retirement Law (PERL) requires that the employer contribution rates for all public employers are determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through CalPERS’ annual actuarial valuation process. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability.
The employer is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. Employer contribution rates may change if plan contracts are amended. Payments made by the employer to satisfy contribution requirements that are identified by the pension plan terms as plan member contribution requirements are classified as plan member contributions.
Actuarial Methods and Assumptions Used to Determine Total The June 30, 2022 valuation was rolled forward to determine the June 30, 2022 total pension liability, based on the following actuarial methods and assumptions:
Post Retirement Benefit
Increase
The lessor of contract COLA up to 2.30% until Purchasing Power Protection Allowance Floor on Purchasing Power applies, 2.30% thereafter
The mortality table used was developed based on CalPERS-specific data. The probabilities of mortality are based on the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. Mortality rates incorporate full generational mortality improvement using 80% of Scale MP-2020 published by the Society of Actuaries. For more details on this table, please refer to the 2021 experience study report from November 2021 that can be found on the CalPERS website.
Entry Age Actuarial Cost Method
83 168
CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
C. DETAILED NOTES ON ALL FUNDS (continued)
12. b. Net Pension Liability (continued)
Long-term Expected Rate of Return
Assumed
Asset
Allocation Real Return2
30.00% 4.54%
12.00% 3.84%
13.00% 7.28%
5.00% 0.27%
5.00% 0.50%
10.00% 1.56%
5.00% 2.27%
5.00% 2.48%
5.00% 3.57%
15.00% 3.21%
-5.00% -0.59%
1 An expected inflation of 2.30% used for this period.
2 Figures are based on the 2021 Asset Liability Management study.
Discount Rate
Private Debt
The discount rate used to measure the total pension liability was 6.90%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability.
Public Employees' Retirement System (continued)
Global Equity - Cap-weighted
The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.
In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations using historical returns of all funds over the next 20 years using a building-block approach. The expected rate of return was then adjusted to account for assumed administrative expenses of 10 Basis points. The expected real rates of return by asset class are as follows:
Private Equity
Real Assets
Leverage
Global Equity - Non-Cap-weighted
Asset Class1
Treasury
Mortgage-backed Securities
Investment Grade Corporates
High Yield
Emerging Market Debt
84 169
CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
C. DETAILED NOTES ON ALL FUNDS (continued)
12. b. Net Pension Liability (continued)
Amortization of Deferred Outflows and Deferred Inflows of Resources Net Difference between 5 year straight-line amortization projected and actual
earnings on investments
All other amounts
The expected average remaining service lifetime (EARSL) is calculated by dividing the total future service years by the total number of plan participants (active, inactive, and retired). Note that inactive employees and retirees have remaining service lifetimes equal to zero. Also note that total future service is based on the members’ probability of decrementing due to an event other than receiving a cash refund.
Public Employees' Retirement System (continued)
The amortization period differs depending on the source of the gain or loss:
Straight-line amortization over the expected average
remaining service lifetime (EARSL) of all members that
are provided with benefits (active, inactive, and retired) as of the beginning of the measurement period
Under GASB 68, gains and losses related to changes in total pension liability and fiduciary net position are recognized in pension expense systematically over time.
The first amortized amounts are recognized in pension expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to pensions and are to be recognized in future pension expense.
85 170
CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
C. DETAILED NOTES ON ALL FUNDS (continued)
12. Public Employees' Retirement System (continued)
c.
The following table shows the balances related to pension at June 30, 2024:
Miscellaneous Safety
Plan Plan Total
Net Pension Liability 114,905,246$ 242,622,872$ 357,528,118$ Deferred Outflows 30,896,886$ 50,879,742$ 81,776,628$ Deferred Inflows 729,214$ 447,926$ 1,177,140$ Pension Expense 18,187,981$ 35,600,481$ 53,788,462$ The following table shows the changes in the Net Pension Liability for each plan:
Miscellaneous Plan:
Total Pension
Liability
(a)
Plan Fiduciary Net
Position
(b)
Net Pension
Liability/(Asset)
(c) = (a) - (b)
378,802,390$ 266,005,723 $ 112,796,667 $
Changes in the year:
6,106,608 - 6,106,608 25,862,669 - 25,862,669 2,370,241 - 2,370,241 Contribution - employer - 13,425,034 (13,425,034) Contribution - employee - 2,485,490 (2,485,490) Net Investment income - 16,516,024 (16,516,024) (18,809,311) (18,809,311) -
Administrative expense - (195,608) 195,608 Net changes 15,530,207 13,421,629 2,108,578 Balance at June 30, 2023 394,332,597$ 279,427,352 $ 114,905,245 $ refunds of employee
contributions
Balance at June 30, 2022
Changes in Net Pension Liability
Service cost
Interest on the total pension
liability
Difference between actual and
expected experience
Benefit payments, including
Increase (Decrease)
86 171
CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
C. DETAILED NOTES ON ALL FUNDS (continued)
12. Public Employees' Retirement System (continued)
c.
Safety Plan:
Total Pension
Liability
(a)
Plan Fiduciary
Net Position
(b)
Net Pension
Liability/(Asset)
(c) = (a) - (b)
Balance at June 30, 2022 $ 621,683,495 391,190,319$ 230,493,176 $ Changes in the year:
Service cost 8,103,319 - 8,103,319 Interest on the total pension
liability 42,652,235 - 42,652,235 Difference between actual
and expected experience 9,718,381 - 9,718,381 Contribution - employer - 21,548,966 (21,548,966) Contribution - employee - 2,936,409 (2,936,409) Net Investment income - 24,146,527 (24,146,527) Benefit payments, including
refunds of employee
contributions (34,610,411) (34,610,411) -
Administrative Expense - (287,663) 287,663 Net changes 25,863,524 13,733,828 12,129,696 Balance at June 30, 2023 $ 647,547,019 404,924,147$ 242,622,872 $ Changes in Net Pension Liability (continued)
Increase (Decrease)
87 172
CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
C. DETAILED NOTES ON ALL FUNDS (continued)
12. Public Employees' Retirement System (continued)
c.
Miscellaneous Safety
1% Lower 5.90% 5.90%
Net Pension Liability 168,130,364$ 331,275,097 $ Current Discount Rate 6.90% 6.90%
Net Pension Liability 114,905,245$ 242,622,872 $ 1% Higher 7.90% 7.90%
Net Pension Liability 71,103,266$ 170,409,840 $ d.
Deferred Outflows of
Resources
Deferred Inflows of
Resources
13,697,429$ - $
measurement date
Changes in assumptions 3,068,131 - Differences between expected
and actual experiences 1,458,610 (729,214) Net difference between projected and
actual earnings on pension plan
investments 12,672,716 -
Total 30,896,886$ (729,214) $
Miscellaneous Plan
Pension contributions subsequent to
Sensitivity of the Net Pension Liability to Changes in the Discount Rate– The following presents the net pension liability of each Plan, calculated using the discount rate for each Plan, as well as what the net pension liability would be if it were calculated using a discount rate that is 1 percentage-point lower or 1 percentage-point higher than the current rate:
The Net Pension Liabilities for the City’s pension plans have been primarily liquidated by funding from the General, Water, Sewage Collection and Housing Authority funds based on their proportionate personnel costs of the year.
Changes in Net Pension Liability (continued)
Pension expenses and deferred outflows/inflows of resources related to pensions
At June 30, 2024, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
Pension Plan Fiduciary Net Position – Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports and can be obtained on the CalPERS website.
88 173
CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
C. DETAILED NOTES ON ALL FUNDS (continued)
12. Public Employees' Retirement System (continued)
d.
Deferred Outflows of
Resources
Deferred Inflows of
Resources
Pension contributions subsequent to
measurement date 22,386,536$ -$
Changes in assumptions 4,210,264 -
Differences between expected
and actual experiences 5,831,029 (447,926) Net difference between projected and
actual earnings on pension plan
investments 18,451,913 -
Total 50,879,742 $ (447,926) $
Miscellaneous Plan Safety Plan
Measurement Periods Ended June 30
Deferred
Outflow/(Inflows)
of Resources
Deferred
Outflow/(Inflows) of
Resources
2024 5,514,988 $ 10,885,976 $
2025 1,835,783 3,676,375
2026 8,775,664 12,989,018
2027 343,808 493,911
13. Other Postemployment Benefits
a. Plan Descriptions
The City administers an other post-employment benefit (OPEB) plan which is subject to changes based on the discretion of the Council. The plan is not administered through a trust or equivalent arrangement.
PEMHCA: The City provides an agent multiple-employer defined benefit healthcare plan to retirees through the California Public Employee Retirement System (CalPERS) under the California Public Employees Medical and Hospital Care Act (PEMHCA), commonly referred to as PERS Health.
Pension expenses and deferred outflows/inflows of resources related to pensions (continued)
Safety Plan
The $13,697,886 and $22,386,536 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the fiscal year ending June 30, 2025. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:
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NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
C. DETAILED NOTES ON ALL FUNDS (continued)
13. Other Postemployment Benefits (continued)
b. Employees Covered
Number of
Participants
Inactive Employees Receiving Benefit Payments 288
-
Participating Active Employees 567
Total Number of Participants 855
c. Contributions
d.
Employees are eligible for retiree health benefits if they retire from the City on or after age 50 (unless disabled) and are eligible to begin drawing a PERS pension. The benefits are available only to employees who retire from the City.
As of the June 30, 2023 actuarial valuation, the following current and former employees were covered by the City plan:
The contributions for the City’s other post-employment benefits are based on pay-as- you-go financing requirements.
The contribution requirements of plan members and the City are established and may be amended by the City Council. The City must agree to make a defined monthly payment towards the cost of each retiree’s coverage. The City’s contribution rates were $157 and $151 per month for each retiree for the calendar years ended 2024 and 2023, respectively.
For the fiscal year ended June 30, 2024, the City contributed $536,693 to the plan.
Inactive Employees Entitled to But Not Yet Receiving Benefit Payments
Actuarial Methods and Assumptions Used to Determine Total OPEB Liability The City’s total OPEB liability was determined by an actuarial valuation dated June 30, 2023, based on the following actuarial methods and assumptions:
ACTUARIAL METHODS AND ASSUMPTIONS:
ACTUARIAL COST METHOD: GASB 74/75 require use of the entry age actuarial cost method.
Entry age is based on the age at hire for eligible employees. The attribution period is determined as the difference between the expected retirement age and the age at hire.
The APVPBP (Actuarial Present Value of Projected Benefit Payments) and present value of future service costs are determined on an employee by employee basis and then aggregated.
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NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
C. DETAILED NOTES ON ALL FUNDS (continued)
13. Other Postemployment Benefits (continued)
d.
MORTALITY
Participant Type Mortality Tables
Police
Firefighters
Miscellaneous
Actuarial Methods and Assumptions Used to Determine Total OPEB Liability (continued)
2021 CalPERS Mortality for Safety Employees
2021 CalPERS Retiree Mortality for Safety Employees
2021 CalPERS Mortality for Miscellaneous and Schools
Employees
To the extent that different benefit formulas apply to different employees of the same class, the service cost is based on the benefit plan applicable to the most recently hired employees (including future hires if a new benefit formula has been agreed to and communicated to employees). This greatly simplifies administration and accounting; as well as resulting in the correct service cost for new hires.
SUBSTANTIVE PLAN: As required under GASB 74/75 the valuation is based on the substantive plan. The formulation of the substantive plan was based on a review of written plan documents as well as historical information provided by the City regarding practices with respect to employer and employee contribution and other relevant factors.
INFLATION: 2.50% per year. Actuarial standards require using the same rate for OPEB that is used for pension.
PAYROLL INCREASE: 2.75% per year.
ECONOMIC ASSUMPTIONS:
INVESTMENT RETURN/DISCOUNT RATE: 3.65% per year net of expenses. This is based on the Bond Buyer 20 Bond Index. The interest assumption changed from
3.54% to 3.65%.
TREND: 4% per year. The long-term trend assumption is based on the conclusion that, while medical trend will continue to be cyclical, the average increase over time cannot continue to outstrip general inflation by a wide margin. Trend increases in excess of general inflation result in dramatic increases in unemployment, the number of uninsured and the number of underinsured. These effects are nearing a tipping point which will inevitably result in fundamental changes in health care finance and/or delivery which will bring increases in health care costs more closely in line with general inflation. We do not believe it is reasonable to project historical trend vs. inflation differences several decades into the future.
IMPLICIT RATE SUBSIDY: GASB 74/75 require use of claim costs or age-adjusted premiums approximating claims costs to determine the plan's liability. Adjusting premiums for age creates an Implicit Subsidy and is reflected as part of the plan's liability. In addition, the common approach amongst actuaries in California is to include an implicit subsidy as part of the liability and as such the City requested to have reflected age-adjusted premiums in the calculation of the actuarial values.
Implicit Subsidy is considered a benefit and should be included in OPEB valuation and its recognition will increase OPEB liability.
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CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
C. DETAILED NOTES ON ALL FUNDS (continued)
13. Other Postemployment Benefits (continued)
d.
Future Retirees Post -65
e. Recognition of Deferred Outflows and Inflows of Resources $1,848
The participation rates per the actuarial report for all employee types for the group that is less than age 65 (Non-Medicare) and for the group that is more than age 65 (Medicare) is 70 percent.
Participant Type
Fire Fighters PEMHCA Minimum: $1,848
Implicit Subsidy: $16,509
Future Retirees Pre-65
2021 CalPERS 3%@50 Rates for Sworn Fire Employees or
PEPRA rates, as appropriate
2021 CalPERS 2.5%@55 Rates for Miscellaneous Employees
or PERPRA rates, as appropriate
Service Requirement Tables
General Employees
Firefighters
SERVICE REQUIREMENT
Employee Type
Actuarial Methods and Assumptions Used to Determine Total OPEB Liability (continued)
RETIREMENT RATES
Employee Type
Police Officers 2021 CalPERS 3%@50 Rates for Sworn Police Employees or PEPRA rates, as appropriate
Retirement Rate Tables
Changes in the Total OPEB Liability (TOL) arising from certain sources are recognized on a deferred basis. Under GASB 74 & 75 OPEB expense includes service cost, interest cost, change in total OPEB liability due to plan changes; all adjusted for deferred inflows and outflows.
General
Retiree liabilities are based on actual retiree premium plus an implicit rate subsidy of
86.3% of non-Medicare medical premium. Liabilities for active participants are based on the first year costs shown below, which include the implicit rate subsidy. Subsequent years' costs are based on first year costs adjusted for trend and limited by any City contribution caps.
100% at 5 Years of Service
100% at 5 Years of Service
100% at 5 Years of Service
Police
Firefighters
COSTS FOR RETIREE COVERAGE
Police Officers
Miscellaneous
Employees
$1,848
PEMHCA Minimum: $1,848
Implicit Subsidy: $16,509
$1,848
PEMHCA Minimum: $1,848
Implicit Subsidy: $11,245
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CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
C. DETAILED NOTES ON ALL FUNDS (continued)
13. Other Postemployment Benefits (continued)
e.
•
•
•
•
Deferred Outflows of
Resources
Deferred Inflows
of Resources
$ 536,693 $ -
21,444,997 (7,301,041)
Difference between expected and actual
experience 39,518 (8,393,041) Total $ 22,021,208 $ (15,694,082)
Measurement
Periods Ended
June 30
Deferred
Outflows/(Inflows) of
Resources
2024 $ 1,614,794
2025 1,614,794
2026 1,614,794
2027 1,614,794
2028 1,677,487
Thereafter (2,346,230)
Liability changes resulting from changes in economic and demographic assumptions are also deferred based on the average working lifetime.
The $536,693 reported as deferred outflows of resources related to contributions subsequent to the June 30, 2023 measurement date will be recognized as a reduction of the total OPEB liability during the fiscal year ending June 30, 2025. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as OPEB expense as follows:
OPEB Expense a Deferred Outflow/Inflow of Resources to OPEB Liability changes resulting from plan changes, for example, cannot be deferred.
For the fiscal year ended June 30, 2023, the City recognized OPEB expense of $4,787,003. As of fiscal year ended June 30, 2024, the City reported deferred outflows of resources related to OPEB from the following sources:
OPEB contributions subsequent to measurement
Changes of assumptions
Investment gains and losses can be deferred five years.
Experience gains and losses can be deferred over the expected average remaining service lives (EARSL) of plan participants. In calculating the EARSL, terminated employees (primarily retirees) are considered to have working lifetime of zero. This often make the EARSL, quite short.
Recognition of Deferred Outflows and Inflows of Resources (continued) The TOL can arise in several ways - e.g., as a result of plan changes or changes in actuarial assumptions. TOL can also arise from actuarial gains and losses. Actuarial gains and losses result from differences between actuarial assumptions and the actual plan experience.
Under GASB 74 and 75, a portion of actuarial gain and losses can be deferred as follows:
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CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
C. DETAILED NOTES ON ALL FUNDS (continued)
13. Other Postemployment Benefits (continued)
f.
g.
Increase (Decrease)
Total OPEB
Liability (TOL)
41,806,355$
Changes recognized for the measurement period:
Service Cost 1,676,163
Interest on TOL 1,477,304
Employer Contributions as Benefits (1,799,520)
Experience (Gains)/Losses 43,757
Assumption Changes (185,920)
Net Changes 1,211,784
Balance at June 30, 2024 43,018,139 $
h.
Discount Rate
1% Lower Valuation Discount
Rate
Discount Rate
1% Higher
OPEB Liability $48,768,159 $43,018,139 $38,260,298
The following presents the OPEB liability with a discount rate that is one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 2023:
Balance at June 30, 2023
Total OPEB Liability
If actuarial assumptions are borne out by experience, the City will fully accrue retiree benefits by expensing an amount each year that equals the service cost. If no accruals had taken place in the past, there would be a shortfall of many years’ accruals, accumulated interest and forfeitures for terminated or deceased employees. This shortfall is called the Total OPEB Liability (TOL). The TOL is calculated as the APVPBP (Actuarial Present Value of Projected Benefit Payments) minus the present value of future service costs.
Changes in the OPEB Liability
The changes in the OPEB liability for the City are as follows:
Sensitivity of OPEB Liability to Changes in the Discount Rate Changes in Total OPEB Liability as of June 30, 2024
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CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
C. DETAILED NOTES ON ALL FUNDS (continued)
13. Other Postemployment Benefits (continued)
i.
Trend Rate 1%
Lower Valuation Trend
Trend Rate 1%
Higher
OPEB Liability $37,162,041 $43,018,139 $50,409,969
14. Commitments and Contingencies
a. Grants
b. Construction Commitments
Remaining
Spent-to-date Commitment
Com. & Econ. Dev. Imp. 8,285,590 $ 100,077 $
Facility Improvements - 300,000
Park Improvements 1,237,746 11,367,054
Sewer Improvements 3,558,271 7,150,945
Street Improvements 19,284,245 8,023,655
Traffic Improvements 78,511 1,274,389
Water Improvements 4,053,499 8,958,701
Total 36,497,862 $ 37,174,821 $
Sensitivity of OPEB Liability to Changes in the Trend Rate The following presents the OPEB liability of the City if it were calculated using healthcare cost trend rates that are one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 2023:
Under the terms of federal, county and state grants, periodic audits are required and certain costs may be questioned as not appropriate expenditures under the terms of the grants. Such audits could lead to reimbursements to the grantor agencies. If some expenditures were disallowed, the City believes such disallowances, if any, would be immaterial.
The City has active construction projects as of June 30, 2024. City project commitments includes street improvements, storm drain improvements, building improvements, and park improvements. Proprietary fund project commitments include water main improvements, water reservoir rehabilitation projects and sewer main improvements. At fiscal year-end, the City’s construction project commitments with contractors are as follows:
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CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
C. DETAILED NOTES ON ALL FUNDS (continued)
14. Commitments and Contingencies (continued)
c. Contract Commitments
15. Joint Venture
16. Tax Abatements
In 2016, the City approved an Amended and Restated Operating Covenant Agreement with California Fuels and Lubricants for business retention purposes pursuant to Senate Bill 562. The Amended Agreement effective July 1, 2016 provides for economic development assistance in form of varying revenue sharing ratios of the amount of sales tax revenue generated in excess of $200,000 annually for a period of 20 years. For Fiscal Year 2023-24, California Fuels and Lubricants received assistance payments of $654,341.
The City entered into an agreement with the Orange County Fire Authority (OCFA) on April 9, 2019 for OCFA to provide fire and emergency medical services to the City starting on August 16, 2019. OCFA will lease specified apparatus at no cost and fire stations at $1 per year per station. Annually, the City will pay its share of OCFA’s vehicle replacement program. The City will also pay a monthly fee of $2,175,475 for the fire and emergency medical services. The monthly amount is subject to change on an annual basis and is due at the beginning of each month.
The City participates in the Anaheim-Garden Grove-Orange Fire Training Facility Authority, a joint powers authority created to finance fire training and dispatching facilities. The City Council of each city appoints one representative to the three- member Board of Directors. The City’s proportionate share is 22.0%. Because the City is not financially accountable, the training facility is not considered part of the City’s reporting entity. Separate financial statements are not issued.
The City of Garden Grove enters into various tax abatement agreements for the purpose of attracting and retaining businesses within the City. The Garden Grove Agency for Community Development also entered into three such agreements specific to hotel developments that are now the enforceable obligations of the Successor Agency pursuant to the 2011 Redevelopment Agency Dissolution Act. 96 181
CITY OF GARDEN GROVE
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
FISCAL YEAR ENDED JUNE 30, 2024
C. DETAILED NOTES ON ALL FUNDS (continued)
16. Tax Abatements (continued)
In 2017, the City entered into an agreement with Garden Grove Automotive, Inc (GGA) to acquire the site and continue to sell Kia automobiles. Subject to the contingency that GGA fulfills the covenants of the agreement and generate enough sales tax revenue during the fiscal year, the City has agreed to pay an amount equal to 35% of the sales tax revenue in excess of $150,000. The amount paid at June 30, 2024 was $37,500.00.
97 182
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183
Variance with
Original Final Final Budget
Budgeted Budgeted Actual Positive
Amounts Amounts Amounts (Negative)
REVENUES:
Taxes 151,598,800 $ 151,598,800 $ 159,566,000 $ 7,967,200 $ Licenses and permits 2,497,400 2,497,400 3,035,509 538,109 Fines, forfeits and penalties 1,924,500 1,924,500 2,720,851 796,351 Investment earnings 1,488,700 1,488,700 7,048,121 5,559,421 Charges for current services 7,086,000 7,086,000 7,530,683 444,683 From other agencies - - 181,780 181,780 Other revenues 2,080,300 2,080,300 4,920,194 2,839,894 Total revenues 166,675,700 166,675,700 185,003,138 18,327,438 EXPENDITURES:
Current:
Fire 31,759,700 31,759,700 31,604,001 155,699 Police 80,552,400 80,570,200 76,613,400 3,956,800 Traffic safety 4,497,700 4,652,700 2,810,327 1,842,373 Public right of way 10,576,000 24,557,700 18,550,550 6,007,150 Community buildings 4,120,000 4,140,000 3,653,662 486,338 Community services 6,833,200 6,851,700 5,923,389 928,311 Parks and greenbelts 1,957,500 1,957,500 1,696,554 260,946 Community planning and development 15,107,100 47,611,500 30,553,889 17,057,611 Municipal support 13,232,800 13,208,700 11,671,662 1,537,038 Debt service:
Principal retirement 565,000 20,881,617 20,772,213 109,404 Interest 1,034,000 1,034,000 684,551 349,449 Total expenditures 170,235,400 237,225,317 204,534,198 32,691,119 Excess (deficiency) of revenues
over (under) expenditures (3,559,700) (70,549,617) (19,531,060) 51,018,557 OTHER FINANCING SOURCES (USES):
Transfers in 223,600 223,600 2,305,933 2,082,333 Transfers out - - (1,246,057) (1,246,057) Issuance of leases - - 695,362 695,362 Total other financing sources (uses) 223,600 223,600 1,755,238 1,531,638 Net change in fund balance (3,336,100) (70,326,017) (17,775,822) 52,550,195 Fund balance, beginning of year 183,307,862 183,307,862 183,307,862 - Fund balance, end of year 179,971,762 $ 112,981,845 $ 165,532,040 $ 52,550,195 $
See accompanying note to required supplementary information.
CITY OF GARDEN GROVE
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
98 184
Variance with
Original Final Final Budget
Budgeted Budgeted Actual Positive
Amounts Amounts Amounts (Negative)
REVENUES:
Investment earnings (loss) - $ - $ 3,450 $ 3,450 $ From other agencies - - 4,509,191 4,509,191 Other revenues 710,000 710,000 4,001,297 3,291,297 Total revenues 710,000 710,000 8,513,938 7,803,938 EXPENDITURES:
Current:
Community buildings 1,143,800 13,795,700 5,633,927 8,161,773 Total expenditures 1,143,800 13,795,700 5,633,927 8,161,773 Excess (deficiency) of revenues
over (under) expenditures (433,800) (13,085,700) 2,880,011 15,965,711 OTHER FINANCING SOURCES (USES):
Transfers out - - (20,000) 20,000 Total other financing sources (uses) - - (20,000) 20,000 Net change in fund balance (433,800) (13,085,700) 2,860,011 15,985,711 Fund balance, beginning of year 56,935 56,935 56,935 - Fund balance, end of year (376,865) $ (13,028,765) $ 2,916,946 $ 15,985,711 $
CITY OF GARDEN GROVE
NAVIGATION CENTER SPECIAL REVENUE FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
99 185
Measurement Period 2023 2022 2021 2020
TOTAL PENSION LIABILITY
Service cost 6,106,608 $ 6,003,691 $ 5,217,353 $ 5,053,242 $ Interest on total pension liability 25,862,669 24,841,644 24,233,252 23,364,470 Changes of benefit terms - - - 2,033,512 Changes of assumptions - 11,834,221 - - Difference between expected and actual experience 2,370,241 (2,812,686) 1,014,736 (1,623,742) Benefit payments, including refunds of employee contributions (18,809,311) (18,129,856) (17,406,313) (17,321,101) Net change in total pension liability 15,530,207 21,737,014 13,059,028 11,506,381 Total pension liability - beginning 378,802,390 357,065,376 344,006,348 332,499,967 Total pension liability - ending (a) 394,332,597$ 378,802,390 $ 357,065,376 $ 344,006,348 $
PLAN FIDUCIARY NET POSITION
Contribution - Employer 13,425,034 $ 12,360,011 $ 11,171,129 $ 10,190,871 $ Contribution - Employee 2,485,490 2,371,491 2,341,219 2,282,163 Net investment income 16,516,024 (22,166,332) 54,526,902 11,708,962 Benefit payments, including refunds of employee contributions (18,809,311) (18,129,856) (17,406,313) (17,321,101) Net Plan to Plan Resource Movement - - - - Administrative Expense (195,608) (181,744) (241,104) (331,053) Other Miscellaneous Income/(Expense) 1 - - - - Net change in fiduciary net position 13,421,629 (25,746,430) 50,391,833 6,529,842 Plan fiduciary net position - beginning 2 266,005,723 291,752,153 241,360,320 234,830,478 Plan fiduciary net position - ending (b) 279,427,352$ 266,005,723 $ 291,752,153 $ 241,360,320 $ Plan net pension liability - ending (a) - (b) 114,905,245$ 112,796,667 $ 65,313,223 $ 102,646,028 $ Plan fiduciary net position as a percentage of the total pension liability 70.86% 70.22% 81.71% 70.16% Covered payroll 3 32,703,258$ 30,863,494 $ 29,694,668 $ 28,436,925 $ Plan net pension liability as a percentage of covered payroll 351.36% 365.47% 219.95% 360.96% 1 2
3 Includes any beginning of year adjustment.
AGENT MULTIPLE EMPLOYER DEFINED BENEFIT PENSION PLANS
THE LAST TEN FISCAL YEARS
Miscellaneous
During Fiscal Year 2017-18, as a result of Governmental Accounting Standards Board Statement (GASB) No. 75, Accounting and Financial Reporting for Postemployment Benefit Plans other than Pensions (GASB 75), CalPERS reported its proportionate share of activity related to postemployment benefits for participation in the State of California's agent OPEB plan. Accordingly, CalPERS recorded a one-time expense as a result of the adoption of GASB 75.
Additionally, CalPERS employees participate in various State of California agent pension plans and during Fiscal Year 2017-18, CalPERS recorded a correction to previously reported financial statements to properly reflect its proportionate share of activity related to pensions in accordance with GASB Statement No. 68, Accounting and Financial Reporting for Pensions (GASB68).
CITY OF GARDEN GROVE
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS Notes to Schedule of Changes in Net Pension Liability and Related Ratios:
Includes one year's payroll growth using 2.75 percent payroll growth assumption for fiscal years ended June 30, 2018-21, 3.00 percent payroll growth assumption for fiscal years ended June 30, 2014-17.
Benefit Changes: The figures above generally include any liability impact that may have resulted from voluntary benefit changes that occurred on or before the Measurement Date. However, offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes) that occurred after the Valuation Date are not included in the figures above, unless the liability impact is deemed to be material by the plan actuary.
Changes of Assumptions: There were no assumption changes in 2023. Effective with the June 30, 2021 valuation date (June 30, 2022 measurement date), the accounting rate was reduced from 7.15% to 6.90%. In determining the long-term expected rate of return, CalPERS took into account long-term market return expectations as well as the expected pension fund cash flows. In addition, demographic assumptions and the price inflation assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. The accounting discount rate was 7.15% for measurement dates June 30, 2017 through June 30. 2021, 7.65% for measurement dates June 30, 2015 through June 30, 2016, and 7.50% for measurement date June 30, 2014.
In 2022, SB 1168 increased the standard retiree lump sum death benefit from $500 to $2,000 for any death occurring on or after July 1, 2023. The impact, if any, is included in the changes of benefit terms. 100
186
2019 2018 2017 2016 2015 2014
5,475,558$ 5,401,390 $ 5,295,064 $ 4,717,431 $ 4,505,053 $ 4,722,338 $ 22,545,983 21,444,843 20,965,466 20,513,676 19,499,703 18,697,528 - - - - - - - (1,737,101) 17,855,824 - (4,893,202) - 3,673,870 (4,057,535) (5,244,453) 1,501,168 (1,007,886) - (16,224,456) (14,088,814) (13,540,154) (12,581,087) (12,134,038) (11,490,804) 15,470,955 6,962,783 25,331,747 14,151,188 5,969,630 11,929,062 317,029,012 310,066,229 284,734,482 270,583,294 264,613,664 252,684,602 332,499,967$ 317,029,012 $ 310,066,229 $ 284,734,482 $ 270,583,294 $ 264,613,664 $ 9,162,242$ 8,199,628 $ 7,579,342 $ 6,646,792 $ 5,948,472 $ 5,101,581 $ 2,158,717 2,429,785 2,308,262 2,242,990 2,281,790 2,070,127 14,721,760 17,695,861 21,554,042 1,004,774 4,419,750 29,571,239 (16,224,456) (14,088,814) (13,540,154) (12,581,087) (12,134,038) (11,490,804) (10,044) 36,458 (64,848) (69,973) - - (160,695) (330,147) (286,986) (120,179) (221,880) - 522 (626,954) - - - - 9,648,046 13,315,817 17,549,658 (2,876,683) 294,094 25,252,143 225,182,432 211,866,615 194,316,867 197,193,550 196,899,456 171,647,313 234,830,478$ 225,182,432 $ 211,866,525 $ 194,316,867 $ 197,193,550 $ 196,899,456 $ 97,669,489$ 91,846,580 $ 98,199,704 $ 90,417,615 $ 73,389,744 $ 67,714,208 $
70.63% 71.03% 68.33% 68.24% 72.88% 74.41%
30,347,270$ 29,746,612 $ 29,037,915 $ 28,573,176 $ 27,094,801 $ 27,060,561 $ 321.84% 308.76% 338.18% 316.44% 270.86% 250.23%
Miscellaneous
101
187
Measurement Period 2023 2022 2021 2020
TOTAL PENSION LIABILITY
Service cost 8,103,319 $ 7,909,848 $ 6,799,165 $ 8,470,387 $ Interest on total pension liability 42,652,235 40,930,945 39,978,657 38,866,660 Changes of benefit terms - - - 1,572,470 Changes of assumptions - 21,051,324 - - Difference between expected and actual experience 9,718,381 (2,239,626) 280,017 (691,163) Benefit payments, including refunds of employee contributions (34,610,411) (32,808,974) (31,360,647) (31,097,422) Net change in total pension liability 25,863,524 34,843,517 15,697,192 17,120,932 Total pension liability - beginning 621,683,495 586,839,978 571,142,786 554,021,854 Total pension liability - ending (a) 647,547,019$ 621,683,495 $ 586,839,978 $ 571,142,786 $
Contribution - Employer 21,548,966 $ 19,491,065 $ 17,486,345 $ 15,875,859 $ Contribution - Employee 2,936,409 2,837,409 2,746,214 2,639,127 Net investment income 24,146,527 (32,867,582) 81,895,715 17,702,544 Benefit payments, including refunds of employee contributions (34,610,411) (32,808,974) (31,360,647) (31,097,422) Net Plan to Plan Resource Movement - - - - Administrative Expense (287,663) (270,860) (364,019) (507,220) Other Miscellaneous Income/(Expense) 1 - - - - Net change in fiduciary net position 13,733,828 (43,618,942) 70,403,608 4,612,888 Plan fiduciary net position - beginning 2 391,190,319 434,809,261 364,405,653 359,792,765 Plan fiduciary net position - ending (b) 404,924,147$ 391,190,319 $ 434,809,261 $ 364,405,653 $ Plan net pension liability - ending (a) - (b) 242,622,872$ 230,493,176 $ 152,030,717 $ 206,737,133 $ Plan fiduciary net position as a percentage of the total pension liability 62.53% 62.92% 74.09% 63.80% Covered payroll 3 23,978,722$ 23,476,513 $ 21,764,291 $ 27,964,303 $ Plan net pension liability as a percentage of covered payroll 1011.83% 981.80% 698.53% 739.29% 1 2
3 In 2022, SB 1168 increased the standard retiree lump sum death benefit from $500 to $2,000 for any death occurring on or after July 1, 2023. The impact, if any, is included in the changes of benefit terms.
Changes of Assumptions: There were no assumption changes in 2023. Effective with the June 30, 2021 valuation date (June 30, 2022 measurement date), the accounting rate was reduced from 7.15% to 6.90%. In determining the long-term expected rate of return, CalPERS took into account long- term market return expectations as well as the expected pension fund cash flows. In addition, demographic assumptions and the price inflation assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. The accounting discount rate was 7.15% for measurement dates June 30, 2017 through June 30. 2021, 7.65% for measurement dates June 30, 2015 through June 30, 2016, and
7.50% for measurement date June 30, 2014.
Safety
Includes any beginning of year adjustment.
Notes to Schedule of Changes in Net Pension Liability and Related Ratios:
During Fiscal Year 2017-18, as a result of Governmental Accounting Standards Board Statement (GASB) No. 75, Accounting and Financial Reporting for Postemployment Benefit Plans other than Pensions (GASB 75), CalPERS reported its proportionate share of activity related to postemployment benefits for participation in the State of California's agent OPEB plan. Accordingly, CalPERS recorded a one-time expense as a result of the adoption of GASB 75.
Additionally, CalPERS employees participate in various State of California agent pension plans and during Fiscal Year 2017-18, CalPERS recorded a correction to previously reported financial statements to properly reflect its proportionate share of activity related to pensions in accordance with GASB Statement No. 68, Accounting and Financial Reporting for Pensions (GASB68).
Includes one year's payroll growth using 2.75 percent payroll growth assumption for fiscal years ended June 30, 2018-21, 3.00 percent payroll growth assumption for fiscal years ended June 30, 2014-17.
Benefit Changes: The figures above generally include any liability impact that may have resulted from voluntary benefit changes that occurred on or before the Measurement Date. However, offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes) that occurred after the Valuation Date are not included in the figures above, unless the liability impact is deemed to be material by the plan actuary.
CITY OF GARDEN GROVE
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS
AGENT MULTIPLE EMPLOYER DEFINED BENEFIT PENSION PLANS
THE LAST TEN FISCAL YEARS
102
188
2019 2018 2017 2016 2015 2014
9,117,082$ 8,706,648 $ 8,648,153 $ 7,378,575 $ 7,025,519 $ 7,433,857 $ 37,632,892 36,094,312 35,007,255 33,944,797 32,447,673 31,439,433 - - - - - - - (2,221,006) 29,556,856 - (4,660,010) - 4,129,559 (961,074) (2,081,126) 2,203,036 (8,032,852) - (29,007,470) (26,226,816) (24,371,140) (22,718,361) (21,846,674) (20,185,546) 21,872,063 15,392,064 46,759,998 20,808,047 4,933,656 18,687,744 532,149,791 516,757,727 469,997,729 449,189,682 444,256,026 425,568,282 554,021,854$ 532,149,791 $ 516,757,727 $ 469,997,729 $ 449,189,682 $ 444,256,026 $ 15,698,349$ 14,147,727 $ 13,302,274 $ 11,468,654 $ 10,155,643 $ 9,427,732 $ 2,644,271 2,873,704 2,823,680 2,915,098 2,611,738 2,439,710 22,658,615 27,492,574 33,837,324 1,532,436 6,960,883 47,553,580 (29,007,470) (26,226,816) (24,371,140) (22,718,361) (21,846,674) (20,185,546) 10,044 (37,788) - - - - (248,366) (516,231) (452,000) (190,840) (352,473) - 808 (980,332) - - - - 11,756,251 16,752,838 25,140,138 (6,993,013) (2,470,883) 39,235,476 348,036,514 331,283,676 306,143,539 313,136,552 315,607,435 276,371,959 359,792,765$ 348,036,514 $ 331,283,677 $ 306,143,539 $ 313,136,552 $ 315,607,435 $ 194,229,089$ 184,113,277 $ 185,474,050 $ 163,854,190 $ 136,053,130 $ 128,648,591 $
64.94% 65.40% 64.11% 65.14% 69.71% 71.04%
29,663,516$ 28,541,707 $ 28,541,707 $ 28,636,267 $ 27,481,750 $ 26,325,623 $ 654.77% 645.07% 649.84% 572.19% 495.07% 488.68%
Safety
103
189
Schedule of Plan Contributions for the Fiscal Years Ended June 30 2024 2023 2022 2021
Actuarially determined contributions $ 13,697,429 $ 13,424,666 $ 12,359,003 $ 11,167,273 Contributions in relation to the
actuarially determined contributions (13,697,429) (13,424,666) (12,359,003) (11,167,273) Contribution deficiency (excess) $ - $ - $ - $ - Covered payroll $ 34,257,389 $ 32,703,258 $ 30,863,494 $ 29,694,668 Contributions as a percentage of
covered payroll 39.98% 41.05% 40.04% 37.61%
Notes to Schedule of Plan Contributions:
Valuation date:
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry Age Actuarial Cost Method
Amortization method/period For details, see June 30, 2020 Funding Valuation Report.
Asset valuation method
Inflation
Salary Increases Varies by entry age and service
Payroll growth
Investment rate of return
Retirement age
Mortality
Other information For changes to previous year's information, refer to past GASB 68 reports.
Miscellaneous
2.30%
2.75%
Fair value of assets. For details, see June 30, 2020 Funding Valuation Report.
The probabilities of mortality are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015. Mortality rates include 15 years of projected mortality improvement using 90% of Scale MP-2016 published by the Society of Actuaries.
6.90%, net of pension plan investment administrative expenses; includes inflation.
The probabilities of retirement are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015.
CITY OF GARDEN GROVE
6/30/2022
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF CONTRIBUTIONS
AGENT MULTIPLE EMPLOYER DEFINED BENEFIT PENSION PLANS
THE LAST TEN FISCAL YEARS
104
190
2020 2019 2018 2017 2016 2015
$ 10,190,871 $ 9,153,245 $ 8,199,628 $ 7,579,342 $ 6,646,792 $ 5,948,472 (10,190,871) (9,153,245) (8,199,628) (7,579,342) (6,646,792) (5,948,472) $ - $ - $ - $ - $ - $ - $ 28,436,925 $ 30,347,270 $ 29,746,612 $ 29,037,915 $ 28,573,176 $ 27,094,801
35.84% 30.16% 27.56% 26.10% 23.26% 21.95%
Miscellaneous
105
191
Schedule of Plan Contributions for the Fiscal Years Ended June 30 2024 2023 2022 2021 2020
Actuarially determined contributions $ 22,386,536 $ 21,548,966 $ 19,491,065 $ 17,489,949 15,875,859 $ Contributions in relation to the
actuarially determined contributions (22,386,536) (21,548,966) (19,491,065) (17,489,949) (15,875,859) Contribution deficiency (excess) $ - $ - $ - $ - - $ Covered payroll $ 25,158,091 $ 23,978,722 $ 23,476,513 $ 21,764,291 $ 27,964,303 Contributions as a percentage of
covered payroll 88.98% 89.87% 83.02% 80.36% 56.77%
Notes to Schedule:
Valuation date:
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry Age Actuarial Cost Method
Amortization method/period For details, see June 30, 2020 Funding Valuation Report.
Asset valuation method Fair value of assets. For details, see June 30, 2020 Funding Valuation Report.
Inflation
Salary Increases
Payroll growth
Investment rate of return
Retirement age
Mortality
Other information For changes to previous year's information, refer to past GASB 68 reports.
Safety
6/30/2022
2.50%
Varies by entry age and service
2.75%
7.00%, net of pension plan investment administrative expenses; includes inflation.
The probabilities of mortality are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015. Mortality rates include 15 years of projected mortality improvement using 90% of Scale MP- 2016 published by the Society of Actuaries.
The probabilities of retirement are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015.
CITY OF GARDEN GROVE
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF CONTRIBUTIONS
AGENT MULTIPLE EMPLOYER DEFINED BENEFIT PENSION PLANS
THE LAST TEN FISCAL YEARS
106
192
2019 2018 2017 2016 2015
$ 15,691,168 $ 14,147,727 $ 13,302,273 $ 11,468,654 $ 10,155,643 (15,691,168) (14,147,727) (13,302,273) (11,468,654) (10,155,643) $ - $ - $ - $ - $ - $ 29,663,516 $ 28,541,707 $ 28,636,267 $ 27,481,750 $ 26,325,623
52.90% 49.57% 46.45% 41.73% 38.58%
Safety
107
193
2023 2022 2021 2020 2019 2018 2017
TOTAL OPEB LIABILITY
Service cost 1,676,163 $ 2,250,612 $ 2,563,528 $ 1,831,165 $ 627,266 $ 669,889 $ 651,960 $ Interest on Total OPEB Liability 1,477,304 1,056,801 1,219,928 1,596,249 695,181 695,599 610,096 Employer Contributions - - - - (467,790) (420,642) - Expected Minus Actual Benefit Payments - - - - 22,763 - - Experience (Gains)/Losses 43,757 14 (11,665,240) (94,837) (216,121) - - Changes in Assumptions (185,920) (8,394,004) 3,457,450 8,191,623 26,892,575 (922,346) - Benefit payments (1,799,520) (1,815,415) (2,112,394) (2,036,122) - - (391,489) 1,211,784 (6,901,992) (6,536,728) 9,488,078 27,553,874 22,500 870,567 41,806,355 48,708,347 55,245,075 45,756,997 18,203,123 18,180,623 17,310,056 43,018,139$ 41,806,355 $ 48,708,347 $ 55,245,075 $ 45,756,997 $ 18,203,123 $ 18,180,623 $ Plan fiduciary net position as a percentage of the total OPEB liability 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 62,261,150 58,884,749 56,905,216 56,638,122 55,122,260 55,704,304 57,674,182 Total OPEB liability as a percentage of covered-employee payroll 69.09% 71.00% 85.60% 97.54% 83.01% 32.68% 31.52% Notes to Schedule:
Net change in total OPEB liability
Total OPEB liability - beginning
Total OPEB liability - ending
Covered-employee payroll
*Historical information is required only for measurement periods for which GASB 75 is applicable. Future years' information will be displayed up to 10 years as information becomes available. ** Liabilities reflect an implicit rate subsidy for Pre-Medicare retirees. GASB 74 and 75 require use of claims costs or age-adjusted premiums approximating claims costs to determine the plan's liability. Adjusting premiums for age creates Implicit Subsidy and is reflected as part of the plan's liability.
The plan currently has no assets accumulated in a trust to pay related benefits.
Measurement Period
CITY OF GARDEN GROVE
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF CHANGES IN THE TOTAL OPEB LIABILITY AND RELATED RATIOS for the Measurement Periods Ended June 30
THE LAST TEN FISCAL YEARS*
108
194
CITY OF GARDEN GROVE
NOTE TO REQUIRED SUPPLEMENTARY INFORMATION
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
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.
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.
109
195
Other Supplemental
Information
Other
Supplemental
Information
196
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197
CITY OF GARDEN GROVE
SPECIAL REVENUE FUNDS
Public Safety Fund
Revenues received from the City's share of drug forfeit and seizure money, revenues received from the state under SB172, and various police grants are accounted for in this fund. These funds are used to help support the City's public safety operations.
State Gas Tax Fund
State gasoline taxes received by the City are accounted for in this fund. Revenue received is used for street maintenance, construction, and/or right of way acquisition.
Developer Fees Fund
Traffic mitigation and developer fees used to alleviate traffic and sewer problems caused by new development, cultural art fees to be used for City cultural arts projects and programs, park fees which are to be used for park development, drainage fees which are to be used to alleviate City drainage problems are some of the fees that are accounted for in the fund.
Garden Grove Cable Fund
This fund represents a grant from a private cable corporation of 2% and its cable usage revenue.
Expenditures are for public, educational, and governmental access.
Street Lighting Fund
The purpose of this fund is to provide an accounting for the installation, operation, and maintenance of street lighting within the City. Revenues for this fund are received from property taxes collected by the County of Orange.
Park Maintenance
The purpose of this fund is to provide an accounting for the maintenance of parks within the City.
Revenues for this fund are received from property taxes collected by the County of Orange.
Main Street District Fund
This fund is used to account for the maintenance of improvements on Main Street in downtown Garden Grove. Revenue for this fund are received from a property tax levy on the main street area.
Air Quality Improvement Fund
This fund is used to account for revenue received from the South Coast Air Quality Management District for the primary purpose of establishing a ride share program for City employees.
Other Grants and Contributions
The City is the recipient of numerous other federal, state, and county grants, plus contributions from other sources. These grants and contributions are accounted for in this fund. 110
198
CITY OF GARDEN GROVE
SPECIAL REVENUE FUNDS (CONTINUED)
Garden Grove Tourism Improvement District
This fund is used to account for the tourism marketing efforts through the Anaheim/Orange County Visitors and Convention Bureau and other activities and improvements that promote tourism in the Garden Grove Tourism Improvement District area.
Street Rehabilitation Fund
This fund is used to account for revenues received and expenditures made for various street rehabilitation projects.
HOME Grant Special Revenue Fund
The HOME Grant special revenue fund is used to account for the revenues received and expenditures made for the housing assistance program, which is funded by the U.S. Department of Housing and Urban Development.
CAPITAL PROJECTS FUNDS
Housing Authority Assets Fund
Capital projects with the Civic Center area are accounted for in this fund.
Housing Successor Agency Low/Mod Fund
Capital projects for low and moderate income housing are accounted for in this fund.
Public Safety Fund
Capital projects with Public Safety are accounted for in this fund. 111
199
Public State Developer Garden Grove
Safety Gas Tax Fees Cable
ASSETS
Cash and investments 3,983,936 $ 6,135,301 $ 14,011,566 $ 10,392 $ Cash with fiscal agents - - - - Taxes receivable 74,500 407,274 - - Accounts receivable - - 55,794 5,090 Interest receivable 10,407 16,216 36,645 - Due from Successor Agency - - - - Deposits and prepaid items 13,756 - - 5,162 Intergovernmental receivable - 773,765 - - Notes receivable, net - - - - Land held for resale - - - - Total assets 4,082,599 $ 7,332,556 $ 14,104,005 $ 20,644 $
Liabilities:
Accounts payable 10,200 $ 133,896 $ 140,801 $ 9,760 $ Accrued liabilities 4,774 65,350 33,877 10,517 Unearned revenue - - - - Due to other funds 250 2,531 - 103 Intercity loan payable - - - - Note payable - - - - Total liabilities 15,224 201,777 174,678 20,380 Deferred Inflows of Resources:
Unavailable revenue - - - - Total deferred inflows - - - - Fund balances:
Non-Spendable:
Deposits and Prepaid items 13,756 - - 5,162 Restricted:
Public safety 4,053,619 - - - Public right of way - 7,130,779 589,928 - Drainage - - 351,963 - Community planning and development - - 2,590,954 - - - 10,396,482 - Unassigned - - - (4,898) Total fund balances 4,067,375 7,130,779 13,929,327 264 Total liabilities and fund balances 4,082,599 $ 7,332,556 $ 14,104,005 $ 20,644 $ Community services
LIABILITIES AND FUND BALANCES
CITY OF GARDEN GROVE
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2024
Special Revenue Funds
112
200
Street Park Main Street Air Quality
Lighting Maintenance District Improvement
135,054$ 44,714 $ 124,680 $ 237,572 $ - - - - 15,056 6,227 - - - - - - - 288 345 680 - - - - - - - - - - - - - - - - - - - - 150,110$ 51,229 $ 125,025 $ 238,252 $ 138,019$ 17,549 $ 3,437 $ 28,375 $ 5,004 11,625 - 3,329 - - - - 74 737 - 34 - - - - - - - - 143,097 29,911 3,437 31,738 - - - - - - - - - - - - - - - - 7,013 - 121,588 206,514 - - - - - 21,318 - - - - - - - - - - 7,013 21,318 121,588 206,514 150,110$ 51,229 $ 125,025 $ 238,252 $ Special Revenue Funds
113
201
GG Tourism Other
Improvement Grants and Street
District Contributions Rehabilitation
ASSETS
Cash and investments 312,433 $ 4,379,530 $ 5,067,802 $ Cash with fiscal agents - - - Taxes receivable 295,417 - - Accounts receivable - 65,060 - Interest receivable - 14,062 11,101 Due from Successor Agency - - - Deposits and prepaid items - 14,670 - Intergovernmental receivable - 2,035,719 599,050 Notes receivable, net - 5,519,548 - Land held for resale - - - Total assets 607,850 $ 12,028,589 $ 5,677,953 $
Liabilities:
Accounts payable 340,920 $ 427,752 $ 120,446 $ Accrued liabilities - 127,776 19,664 Unearned revenue - 2,920,568 - Due to other funds - 867 197 Intercity loan payable - - - Note payable - - - Total liabilities 340,920 3,476,963 140,307 Deferred Inflows of Resources:
Unavailable revenue - 1,192,011 - Total deferred inflows - 1,192,011 - Fund balances:
Non-Spendable:
Prepaid items - 14,670 - Restricted
Public safety - 1,212,592 - Public right of way - 1,694,658 5,537,646 Drainage - - - 266,930 3,339,332 -
- 1,098,363 -
Unassigned - - - Total fund balances 266,930 7,359,615 5,537,646 Total liabilities and fund balances 607,850 $ 12,028,589 $ 5,677,953 $
CITY OF GARDEN GROVE
Special Revenue Funds
LIABILITIES AND FUND BALANCES
Community planning and development
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS (CONTINUED)
JUNE 30, 2024
Community services
114
202
Total
HOME Grant Housing Housing Nonmajor
Special Revenue Authority Successor Agency Public Governmental Fund Assets Low/Mod Safety Funds
220,069$ 791,358 $ 1,005,561 $ - $ 36,459,968 $ - - - - - - - - - 798,474 87,963 1,714 2,874 - 218,495 3 2,028 8,821 - 100,596 - - 5,044,260 - 5,044,260 - - - - 33,588 118,571 - - - 3,527,105 16,648,545 2,001,824 7,728,670 - 31,898,587 - - 519,063 - 519,063 17,075,151$ 2,796,924 $ 14,309,249 $ - $ 78,600,136 $
60,591$ - $ 15,830 $ - $ 1,447,576 $ 1,796 - 935 - 284,647 - - - - 2,920,568 37,429 - 20 38,336 80,578 - - - - - - - 2,550,000 - 2,550,000 99,816 - 2,566,785 38,336 7,283,369 - - - - 1,192,011 - - - - 1,192,011 - - - - 33,588 - - - (38,336) 5,227,875 - - - - 15,288,126 - - - - 351,963 16,975,335 2,796,924 11,742,464 - 37,733,257 - - - - 11,494,845 - - - - (4,898) 16,975,335 2,796,924 11,742,464 (38,336) 70,124,756 17,075,151$ 2,796,924 $ 14,309,249 $ - $ 78,600,136 $ Capital Project Funds
115
203
Public State Developer Garden Grove
Safety Gas Tax Fees Cable
REVENUES:
Taxes 1,000,054 $ - $ - $ - $ Licenses and permits - - 157,476 - Fines, forfeits and penalties 122,598 - - - Investment earnings (loss) 161,078 244,622 590,110 - Charges for current services - - 1,564,997 - From other agencies 594,868 9,140,910 - - Other revenues - 2,200 55,794 47,252 Total revenues 1,878,598 9,387,732 2,368,377 47,252 EXPENDITURES:
Current:
Police 930,380 - - - Traffic safety - 66,372 66,401 - Public right of way 2,237 8,729,901 39,615 - Community services - - - 641,129 Economic development - - - - Parks and greenbelts - - 1,170,177 - Community planning and development - - 287,626 - Municipal support - - 4,000 - Debt service:
Principal - - - - Interest and fiscal charges - - - 30,085 Total expenditures 932,617 8,796,273 1,567,819 671,214 Excess (deficiency) of revenues
over (under) expenditures 945,981 591,459 800,558 (623,962) OTHER FINANCING SOURCES (USES):
Transfers in - - - 621,101 Transfers out (44,030) - - - Total other financing sources (uses) (44,030) - - 621,101 Net change in fund balances 901,951 591,459 800,558 (2,861) Fund balance, beginning of year 3,165,424 6,539,320 13,128,769 3,125 Fund balance, end of year 4,067,375 $ 7,130,779 $ 13,929,327 $ 264 $ Special Revenue Funds
CITY OF GARDEN GROVE
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
116
204
Street Park Main Street Air Quality
Lighting Maintenance District Improvement
-$ - $ - $ - $ - - - - - - - - - 3,218 6,180 12,719 1,373,050 703,782 26,620 -
- - - 172,670 - - - - 1,373,050 707,000 32,800 185,389 - - - - 2,102,938 - - - - - 114,054 - - - - - - - - - - 763,102 - - - - - - 27,633 - - 506,396 - - - - - - - - 2,130,571 763,102 114,054 506,396 (757,521) (56,102) (81,254) (321,007) 624,956 - - - - - - - 624,956 - - - (132,565) (56,102) (81,254) (321,007) 139,578 77,420 202,842 527,521 7,013$ 21,318 $ 121,588 $ 206,514 $ Special Revenue Funds
117
205
GG Tourism Other
Improvement Grants and Street
District Contributions Rehabilitation HOME Grant
REVENUES:
Taxes 3,445,319 $ - $ - $ - $ Licenses and permits - - - - Fines, forfeits and penalties - 344,742 - - Investment earnings - 426,670 168,696 312,520 Charges for current services - - - - From other agencies - 7,416,929 3,756,706 492,012 Other revenues - 158,616 378,757 7,500 Total revenues 3,445,319 8,346,957 4,304,159 812,032 EXPENDITURES:
Current:
Police - 1,253,885 - - Traffic safety - 495,044 419,724 - Public right of way - 3,754,185 2,753,366 - Community services - 513,933 164,109 - Economic Development 2,618,673 - - - Parks and greenbelts - - - - Community planning and development - 1,650,174 - 3,063,602 Municipal support - - - - Debt service:
Principal - 5,735 - - Interest and fiscal charges - 7 - - Total expenditures 2,618,673 7,672,963 3,337,199 3,063,602 Excess (deficiency) of revenues
over (under) expenditures 826,646 673,994 966,960 (2,251,570) OTHER FINANCING SOURCES (USES):
Transfers in - - - - Transfers out (856,891) - - - Total other financing sources (uses) (856,891) - - - Net change in fund balances (30,245) 673,994 966,960 (2,251,570) Fund balance, beginning of year 297,175 6,685,621 4,570,686 19,226,905 Fund balance, end of year 266,930 $ 7,359,615 $ 5,537,646 $ 16,975,335 $
CITY OF GARDEN GROVE
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS (CONTINUED)
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Special Revenue Funds
118
206
Total
Housing Housing Nonmajor
Authority Successor Agency Public Governmental
Assets Low/Mod Safety Funds
-$ - $ - $ 4,445,373 $ - - - 157,476 - - - 467,340 105,243 270,872 12 2,301,940 - - - 3,668,449 - - - 21,574,095 - - - 650,119 105,243 270,872 12 33,264,792 - - 16,292 2,200,557 - - - 3,150,479 - - - 15,393,358 - - - 1,319,171 - - - 2,618,673 - - - 1,933,279 - 1,277,338 - 6,278,740 - - - 538,029 - - - 5,735 - - - 30,092 - 1,277,338 16,292 33,468,113 105,243 (1,006,466) (16,280) (203,321) - - - 1,246,057 - - (511,457) (1,412,378) - - (511,457) (166,321) 105,243 (1,006,466) (527,737) (369,642) 2,691,681 12,748,930 489,401 70,494,398 2,796,924$ 11,742,464 $ (38,336) $ 70,124,756 $ Capital Project Funds
119
207
Variance with
Original Final Final Budget
Budgeted Budgeted Actual Positive
Amounts Amounts Amounts (Negative)
REVENUES:
Taxes 700,000 $ 700,000 $ 1,000,054 $ 300,054 $ Fines, forfeits and penalties 350,000 350,000 122,598 (227,402) Investment earnings (loss) - - 161,078 161,078 From other agencies 350,000 350,000 594,868 244,868 Total revenues 1,400,000 1,400,000 1,878,598 478,598 EXPENDITURES:
Current:
Police 826,000 1,288,300 930,380 357,920 Traffic safety - - 2,237 (2,237) Total expenditures 826,000 1,288,300 932,617 355,683 Excess (deficiency) of revenues
over (under) expenditures 574,000 111,700 945,981 834,281 OTHER FINANCING SOURCES (USES):
Transfers in - - (44,030) (44,030) Transfers out - - - - Total other financing sources (uses) - - (44,030) (44,030) Net change in fund balance 574,000 111,700 901,951 790,251 Fund balance, beginning of year 3,165,424 3,165,424 3,165,424 - Fund balance, end of year 3,739,424 $ 3,277,124 $ 4,067,375 $ 790,251 $
CITY OF GARDEN GROVE
PUBLIC SAFETY SPECIAL REVENUE FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
120
208
Variance with
Original Final Final Budget
Budgeted Budgeted Actual Positive
Amounts Amounts Amounts (Negative)
REVENUES:
Investment earnings (loss) - $ - $ 244,622 $ 244,622 $ From other agencies 9,155,900 9,155,900 9,140,910 (14,990) Other revenues - - 2,200 2,200 Total revenues 9,155,900 9,155,900 9,387,732 231,832 EXPENDITURES:
Current:
Traffic safety 69,500 69,500 66,372 3,128 Public right of way 7,511,400 12,877,200 8,729,901 4,147,299 Total expenditures 7,580,900 12,946,700 8,796,273 4,150,427 Excess (deficiency) of revenues
over (under) expenditures 1,575,000 (3,790,800) 591,459 4,382,259 -
Net change in fund balance 1,575,000 (3,790,800) 591,459 4,382,259 Fund balance, beginning of year 6,539,320 6,539,320 6,539,320 - Fund balance, end of year 8,114,320 $ 2,748,520 $ 7,130,779 $ 4,382,259 $
CITY OF GARDEN GROVE
STATE GAS TAX SPECIAL REVENUE FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
121
209
Variance with
Original Final Final Budget
Budgeted Budgeted Actual Positive
Amounts Amounts Amounts (Negative)
REVENUES:
Licenses and permits 100,000 $ 100,000 $ 157,476 $ 57,476 $ Investment earnings (loss) - - 590,110 590,110 Charges for current services 1,440,000 1,440,000 1,564,997 124,997 Other revenues - - 55,794 55,794 Total revenues 1,540,000 1,540,000 2,368,377 828,377 EXPENDITURES:
Current:
Traffic safety 75,000 75,000 66,401 8,599 Public right of way 215,000 1,401,400 39,615 1,361,785 Community services 1,025,000 1,025,000 - 1,025,000 Parks and greenbelts 3,105,000 5,802,000 1,170,177 4,631,823 Community planning and development 223,800 1,416,200 287,626 1,128,574 Municipal support 3,800 3,800 4,000 (200) Total expenditures 4,647,600 9,723,400 1,567,819 8,155,581 Excess (deficiency) of revenues
over (under) expenditures (3,107,600) (8,183,400) 800,558 8,983,958 Net change in fund balance (3,107,600) (8,183,400) 800,558 8,983,958 Fund balance, beginning of year 13,128,769 13,128,769 13,128,769 - Fund balance, end of year 10,021,169 $ 4,945,369 $ 13,929,327 $ 8,983,958 $
CITY OF GARDEN GROVE
DEVELOPER FEES SPECIAL REVENUE FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
122
210
Variance with
Original Final Final Budget
Budgeted Budgeted Actual Positive
Amounts Amounts Amounts (Negative)
REVENUES:
Other revenues 161,200 $ 161,200 $ 47,252 $ (113,948) $ Total revenues 161,200 161,200 47,252 (113,948) EXPENDITURES:
Current:
Community services 798,500 798,500 641,129 157,371 Debt service:
Interest 121,600 121,600 30,085 91,515 Total expenditures 920,100 920,100 671,214 248,886 Excess (deficiency) of revenues
over (under) expenditures (758,900) (758,900) (623,962) 134,938 OTHER FINANCING SOURCES (USES):
Transfers in 712,900 712,900 621,101 (91,799) Total other financing sources (uses) 712,900 712,900 621,101 (91,799) Net change in fund balance (46,000) (46,000) (2,861) 43,139 Fund balance, beginning of year 3,125 3,125 3,125 - Fund balance, end of year (42,875) $ (42,875) $ 264 $ 43,139 $
CITY OF GARDEN GROVE
GARDEN GROVE CABLE SPECIAL REVENUE FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
123
211
Variance with
Original Final Final Budget
Budgeted Budgeted Actual Positive
Amounts Amounts Amounts (Negative)
REVENUES:
Charges for current services 1,357,200 $ 1,357,200 $ 1,373,050 $ 15,850 $ Total revenues 1,357,200 1,357,200 1,373,050 15,850 EXPENDITURES:
Current:
Traffic safety 1,352,300 1,352,300 2,102,938 (750,638) Municipal support 27,700 27,700 27,633 67 Total expenditures 1,380,000 1,380,000 2,130,571 (750,571) Excess (deficiency) of revenues
over (under) expenditures (22,800) (22,800) (757,521) (734,721) -
OTHER FINANCING SOURCES (USES):
Transfers in - - 624,956 624,956 Total other financing sources (uses) - - 624,956 624,956 Net change in fund balance (22,800) (22,800) (132,565) (109,765) Fund balance, beginning of year 139,578 139,578 139,578 - Fund balance, end of year 116,778 $ 116,778 $ 7,013 $ (109,765) $
CITY OF GARDEN GROVE
STREET LIGHTING SPECIAL REVENUE FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
124
212
Variance with
Original Final Final Budget
Budgeted Budgeted Actual Positive
Amounts Amounts Amounts (Negative)
REVENUES:
Investment earnings (loss) - $ - $ 3,218 $ 3,218 $ Charges for current services 711,100 711,100 703,782 (7,318) Total revenues 711,100 711,100 707,000 (4,100) EXPENDITURES:
Current:
Parks and greenbelts 941,000 941,000 763,102 177,898 Total expenditures 941,000 941,000 763,102 177,898 Excess (deficiency) of revenues
over (under) expenditures (229,900) (229,900) (56,102) 173,798 Net change in fund balance (229,900) (229,900) (56,102) 173,798 Fund balance, beginning of year 77,420 77,420 77,420 - Fund balance, end of year (152,480) $ (152,480) $ 21,318 $ 173,798 $
CITY OF GARDEN GROVE
PARK MAINTENANCE SPECIAL REVENUE FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
125
213
Variance with
Original Final Final Budget
Budgeted Budgeted Actual Positive
Amounts Amounts Amounts (Negative)
REVENUES:
Investment earnings (loss) - $ - $ 6,180 $ 6,180 $ Charges for current services 26,700 26,700 26,620 (80) Total revenues 26,700 26,700 32,800 6,100 EXPENDITURES:
Current:
Public right of way 40,900 149,900 114,054 35,846 Total expenditures 40,900 149,900 114,054 35,846 Excess (deficiency) of revenues
over (under) expenditures (14,200) (123,200) (81,254) 41,946 Net change in fund balance (14,200) (123,200) (81,254) 41,946 Fund balance, beginning of year 202,842 202,842 202,842 - Fund balance, end of year 188,642 $ 79,642 $ 121,588 $ 41,946 $
CITY OF GARDEN GROVE
MAIN STREET DISTRICT SPECIAL REVENUE FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
126
214
Variance with
Original Final Final Budget
Budgeted Budgeted Actual Positive
Amounts Amounts Amounts (Negative)
REVENUES:
Investment earnings (loss) - $ - $ 12,719 $ 12,719 $ From other agencies 222,000 222,000 172,670 (49,330) Total revenues 222,000 222,000 185,389 (36,611) EXPENDITURES:
Current:
Municipal support 524,000 853,000 506,396 346,604 Total expenditures 524,000 853,000 506,396 346,604 Excess (deficiency) of revenues
over (under) expenditures (302,000) (631,000) (321,007) 309,993 Net change in fund balance (302,000) (631,000) (321,007) 309,993 - Fund balance, beginning of year 527,521 527,521 527,521 - Fund balance, end of year 225,521 $ (103,479) $ 206,514 $ 309,993 $
CITY OF GARDEN GROVE
AIR QUALITY IMPROVEMENT SPECIAL REVENUE FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
127
215
Variance with
Original Final Final Budget
Budgeted Budgeted Actual Positive
Amounts Amounts Amounts (Negative)
REVENUES:
Taxes 3,589,600 $ 3,589,600 $ 3,445,319 $ (144,281) $ Total revenues 3,589,600 3,589,600 3,445,319 (144,281) EXPENDITURES:
Current:
Economic development 2,871,700 2,871,700 2,618,673 253,027 Total expenditures 2,871,700 2,871,700 2,618,673 253,027 Excess (deficiency) of revenues
over (under) expenditures 717,900 717,900 826,646 108,746 OTHER FINANCING SOURCES (USES):
Transfers out - - (856,891) (856,891) Total other financing sources (uses) - - (856,891) (856,891) Net change in fund balance 717,900 717,900 (30,245) (748,145) Fund balance, beginning of year 297,175 297,175 297,175 - Fund balance (deficit), end of year 1,015,075 $ 1,015,075 $ 266,930 $ (748,145) $
CITY OF GARDEN GROVE
GARDEN GROVE TOURISM IMPROVEMENT DISTRICT SPECIAL REVENUE FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
128
216
Variance with
Original Final Final Budget
Budgeted Budgeted Actual Positive
Amounts Amounts Amounts (Negative)
REVENUES:
Fines, forfeits and penalties 700,000 $ 700,000 $ 344,742 $ (355,258) $ Investment earnings (loss) - - 426,670 426,670 From other agencies 3,869,300 5,663,631 7,416,929 1,753,298 Other revenues - - 158,616 158,616 Total revenues 4,569,300 6,363,631 8,346,957 1,983,326 EXPENDITURES:
Current:
Police 668,800 2,753,853 1,253,885 1,499,968 Traffic safety 463,400 463,400 495,044 (31,644) Public right of way 4,973,800 15,122,400 3,754,185 11,368,215 Community services 1,705,600 1,705,600 513,933 1,191,667 Community planning and development 2,326,600 7,604,800 1,650,174 5,954,626 Parks and greenbelts - 204,800 - 204,800 Debt service:
Principal retirement - - 5,735 (5,735) Interest - - 7 (7) Total expenditures 10,138,200 27,854,853 7,672,963 20,181,890 Excess (deficiency) of revenues
over (under) expenditures (5,568,900) (21,491,222) 673,994 22,165,216 Net change in fund balance (5,568,900) (21,491,222) 673,994 22,165,216 Fund balance, beginning of year 6,685,621 6,685,621 6,685,621 - Fund balance, end of year 1,116,721 $ (14,805,601) $ 7,359,615 $ 22,165,216 $
CITY OF GARDEN GROVE
OTHER GRANTS AND CONTRIBUTIONS SPECIAL REVENUE FUNDS
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
129
217
Variance with
Original Final Final Budget
Budgeted Budgeted Actual Positive
Amounts Amounts Amounts (Negative)
REVENUES:
Investment earnings (loss) - $ - $ 168,696 $ 168,696 $ From other agencies 3,745,100 3,745,100 3,756,706 11,606 Other revenues - - 378,757 378,757 Total revenues 3,745,100 3,745,100 4,304,159 559,059 EXPENDITURES:
Current:
Traffic safety - - 419,724 (419,724) Public right of way 4,276,500 6,310,900 2,753,366 3,557,534 Community services 205,000 205,000 164,109 40,891 Total expenditures 4,481,500 6,515,900 3,337,199 3,178,701 Excess (deficiency) of revenues
over (under) expenditures (736,400) (2,770,800) 966,960 3,737,760 -
Net change in fund balance (736,400) (2,770,800) 966,960 3,737,760 Fund balance, beginning of year 4,570,686 4,570,686 4,570,686 - Fund balance, end of year 3,834,286 $ 1,799,886 $ 5,537,646 $ 3,737,760 $
CITY OF GARDEN GROVE
STREET REHABILITATION SPECIAL REVENUE FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
130
218
Variance with
Original Final Final Budget
Budgeted Budgeted Actual Positive
Amounts Amounts Amounts (Negative)
REVENUES:
Investment earnings (loss) - $ - $ 312,520 $ 312,520 $ From other agencies 737,300 737,300 492,012 (245,288) Other revenues - - 7,500 7,500 Total revenues 737,300 737,300 812,032 74,732 EXPENDITURES:
Current:
Community planning and development 3,377,300 3,550,200 3,063,602 486,598 Total expenditures 3,377,300 3,550,200 3,063,602 486,598 Excess (deficiency) of revenues
over (under) expenditures (2,640,000) (2,812,900) (2,251,570) 561,330 Net change in fund balance (2,640,000) (2,812,900) (2,251,570) 561,330 Fund balance, beginning of year 19,226,905 19,226,905 19,226,905 - Fund balance, end of year 16,586,905 $ 16,414,005 $ 16,975,335 $ 561,330 $
CITY OF GARDEN GROVE
HOME GRANT SPECIAL REVENUE FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
131
219
Variance with
Original Final Final Budget
Budgeted Budgeted Actual Positive
Amounts Amounts Amounts (Negative)
REVENUES:
Investment earnings (loss) - $ - $ 105,243 $ 105,243 $ Total revenues - - 105,243 105,243 EXPENDITURES:
Current:
Economic development 37,000 37,000 - 37,000 37,000 37,000 - 37,000 Excess (deficiency) of revenues
over (under) expenditures (37,000) (37,000) 105,243 142,243 Net change in fund balance (37,000) (37,000) 105,243 142,243 Fund balance, beginning of year 2,691,681 2,691,681 2,691,681 - Fund balance, end of year 2,654,681 $ 2,654,681 $ 2,796,924 $ 142,243 $
CITY OF GARDEN GROVE
HOUSING AUTHORITY ASSETS CAPITAL PROJECTS FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
132
220
Variance with
Original Final Final Budget
Budgeted Budgeted Actual Positive
Amounts Amounts Amounts (Negative)
REVENUES:
Investment earnings (loss) - $ - $ 270,872 $ 270,872 $ Total revenues - - 270,872 270,872 EXPENDITURES:
Current:
Community planning and development 566,600 2,664,600 1,277,338 1,387,262 Total expenditures 566,600 2,664,600 1,277,338 1,387,262 Excess (deficiency) of revenues
over (under) expenditures (566,600) (2,664,600) (1,006,466) 1,658,134 Net change in fund balance (566,600) (2,664,600) (1,006,466) 1,658,134 Fund balance, beginning of year 12,748,930 12,748,930 12,748,930 - Fund balance, end of year 12,182,330 $ 10,084,330 $ 11,742,464 $ 1,658,134 $
CITY OF GARDEN GROVE
HOUSING SUCCESSOR AGENCY LOW/MOD CAPITAL PROJECTS FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
133
221
Variance with
Original Final Final Budget
Budgeted Budgeted Actual Positive
Amounts Amounts Amounts (Negative)
REVENUES:
Investment earnings - $ - $ 12 $ 12 $ Total revenues - - 12 12 EXPENDITURES:
Current:
Police - - 16,292 (16,292) Total expenditures - - 16,292 (16,292) Excess (deficiency) of revenues
over (under) expenditures - - (16,280) (16,280) Transfers out - - (511,457) 511,457 Total other financing sources (uses) - - (511,457) 511,457 Net change in fund balance - - (527,737) (527,737) Fund balance, beginning of year 489,401 489,401 489,401 - Fund balance, end of year 489,401 $ 489,401 $ (38,336) $ (527,737) $
CITY OF GARDEN GROVE
PUBLIC SAFETY CAPITAL PROJECTS FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
134
222
CITY OF GARDEN GROVE
NONMAJOR ENTERPRISE FUNDS
Solid Waste Disposal Fund
The Solid Waste Disposal fund accounts for the operation of trash and solid waste collections and disposal services.
Golf Course Fund
The fund was established to account for operations of the Willowick Golf Course. 135
223
Solid Waste Golf Total Nonmajor
Disposal Course Enterprise Funds
ASSETS
Current Assets:
Cash and cash investments 19,817,674 $ 234,080 $ 20,051,754 $ Taxes receivable 272,920 - 272,920 Accounts receivable - 13,093 13,093 Interest receivable 51,035 - 51,035 Inventory - 23,702 23,702 Prepaid Items - 30,052 30,052 Total current assets 20,141,629 300,927 20,442,556 Noncurrent Assets:
Capital assets
Land - 3,132,711 3,132,711 Construction in progress - - - Depreciable capital assets, net - 631,289 631,289 Total noncurrent assets - 3,764,000 3,764,000 Total assets 20,141,629 4,064,927 24,206,556
DEFERRED OUTFLOWS OF RESOURCES
OPEB related 205,871 - 205,871 Pension related 580,862 - 580,862 Total Deferred Outflows 786,733 - 786,733
LIABILITIES
Current Liabilities:
Accounts payable 236,759 171,667 408,426 Accrued liabilities 19,184 - 19,184 Interest payable - 798 798 Refundable deposits 2,021,475 - 2,021,475 Due to other funds 406 - 406 OPEB liability 45,400 - 45,400 Current portion of long term liabilities
Leases payable - 125,236 125,236 Total current liabilities 2,323,224 297,701 2,620,925 Noncurrent liabilities:
Leases payable - 319,475 319,475 Net pension liability 2,160,219 - 2,160,219 OPEB liabilitiy 357,109 - 357,109 Total noncurrent liabilities 2,517,328 319,475 2,836,803 Total liabilities 4,840,552 617,176 5,457,728
DEFERRED INFLOWS OF RESOURCES
OPEB related 146,845 - 146,845 Pension related 13,709 - 13,709 Total Deferred Inflows 160,554 - 160,554
NET POSITION
Net investment in capital assets - 3,319,289 3,319,289 Unrestricted 15,927,256 128,462 16,055,718 Total net position 15,927,256 $ 3,447,751 $ 19,375,007 $
CITY OF GARDEN GROVE
COMBINING STATEMENT OF NET POSITION
NONMAJOR ENTERPRISE FUNDS
JUNE 30, 2024
136
224
Solid Waste Golf Total Nonmajor
Disposal Course Enterprise Funds
Operating revenues:
Charges for services - $ 2,287,514 $ 2,287,514 $ Solid waste disposal fees 3,454,444 - 3,454,444 Property assessments 599,664 - 599,664 Other 19,029 - 19,029 Total operating revenues 4,073,137 2,287,514 6,360,651
Operating expenses:
Salaries and benefits 789,773 - 789,773 Contractual services 1,368,544 - 1,368,544 Materials and supplies 16,834 - 16,834 Golf course operations - 2,098,660 2,098,660 Depreciation - 150,125 150,125 Total operating expenses 2,175,151 2,248,785 4,423,936
Operating income (loss) 1,897,986 38,729 1,936,715
Nonoperating revenues:
Investment income (loss) 804,602 192 804,794 Interest expense - (10,633) (10,633) Total nonoperating revenue 804,602 (10,441) 794,161 Change in net position 2,702,588 28,288 2,730,876 Total net position, beginning of year 13,224,668 3,419,463 16,644,131 Total net position, end of year 15,927,256$ 3,447,751 $ 19,375,007 $
CITY OF GARDEN GROVE
COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION
NONMAJOR ENTERPRISE FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
137
225
Solid Waste Golf Total Nonmajor
Disposal Course Enterprise Funds
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 5,031,606 $ 2,287,761 $ 7,319,367 $ Payments to suppliers (1,368,638) (2,071,946) (3,440,584) Payments to employees (828,100) - (828,100) Net cash provided (used) by operating
activities 2,834,868 215,815 3,050,683
CASH FLOWS FROM NON CAPITAL -
FINANCING ACTIVITIES
Cash paid to other funds 115 - 115 Net cash provided (used) by non capital
financing activities 115 - 115
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Purchases of capital assets - - - Principal payments on capital debt - (123,909) (123,909) Interest paid on capital debt - (9,842) (9,842) Net cash (used) by capital and
related financing activities - (133,751) (133,751)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest earnings 384,310 371 384,681 Increase (decrease) in fair value of investments 409,922 - 409,922 Net cash provided by investing activities 794,232 371 794,603 Net increase (decrease) in cash and
cash equivalents 3,629,215 82,435 3,711,650 Cash and cash equivalents, beginning of year 16,143,059 151,645 16,294,704 Cash and cash equivalents, end of year 19,772,274 $ 234,080 $ 20,006,354 $ Reconciliation of operating income (loss)
to net cash provided (used) by operating
activities:
Operating income (loss) 1,897,986 $ 38,729 $ 1,936,715 $ Adjustments to reconcile operating
income (loss) to net cash provided (used)
by operating activities:
Depreciation expense - 150,125 150,125 Changes in assets and liabilities:
(Increase) decrease in taxes receivable (37,573) - (37,573) (Increase) decrease in accounts receivable 484,727 247 484,974 (Increase) decrease in inventory - (6,843) (6,843) (Increase) decrease in prepaid expense - (13,735) (13,735) Increase (decrease) in accounts payable 16,740 47,292 64,032 Increase (decrease) in accrued liabilities 6,173 - 6,173 Increase (decrease) in refundable deposits 511,315 - 511,315 Increase (decrease) in OPEB liability and related
changes in deferred outflows and inflows of resources 17,908 - 17,908 Increase (decrease) in net pension liability and related changes in deferred outflows and inflows of resources (62,408) - (62,408) Total adjustments 936,882 177,086 1,113,968 Net cash provided (used) by operating
activities 2,834,868 $ 215,815 $ 3,050,683 $
CITY OF GARDEN GROVE
COMBINING STATEMENT OF CASH FLOWS
NONMAJOR ENTERPRISE FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
138
226
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227
CITY OF GARDEN GROVE
INTERNAL SERVICE FUNDS
Workers’ Compensation Fund
The City’s self-funded workers’ compensation program, which is accounted for in this fund, is financed by charges to all City departments based on number and classification of employees. Expenses include operating costs and all payments relating to injured employees.
Fleet Management Fund
The costs of operating and maintaining City owned vehicles and other gasoline-powered equipment are accounted for in this fund. The fund is financed by charges to the various City departments for actual cost plus a contributory sum for vehicles/equipment replacement. Actual costs include depreciation, maintenance and other factors necessary for the provision of the service.
Employee Benefits Fund
This fund encompasses all other employee benefits such as retirement contributions, health, dental, disability, life insurance, and sick leave, vacation, and other paid leaves. Revenues for this fund are derived from periodic charges to all departments based on the number of employees, length of service, and insurance coverage. Funds are used to pay actual expenses and to accrue existing liabilities.
Information Systems Fund
This fund encompasses the cost of operating and maintaining the City's computer system. The fund is financed by charges to the various City departments based on computer usage.
Warehouse Operations Fund
This fund is used to account for the provision of materials and supplies to the various City departments. Financing is provided by the user City departments by payment of costs of material and supplies plus an overhead charge.
Telephone System Fund
This fund accounts for the operation of the City’s telephone system. The financing comes from charges to the various City departments based on actual toll charges and the lease cost prorated on the number of instruments.
Risk Management Fund
This fund is used to account for the City’s self-insured liability program and for the purchase of various types of property and casualty insurance protection as required by the City. The funds are used to pay any liability losses, program operating costs, insurance premiums and insurance deductibles.
Revenues for this fund are generated from assessments made to all City departments for their pro-rata share of the total costs of the insurance administration program.
Communication Replacement Fund
This fund is used to account for both the operating and capital costs of the City’s communication system in relation to the county-wide 800MHZ backbone project. Funds are used to pay for the City’s backbone costs and the capital costs incurred to upgrade its communications equipment to integrate with the county-wide communications system. The financing comes from charges to the various City departments based on an allocation of actual costs. Actual costs include depreciation and maintenance.
Building and Structure Rehabilitation Fund
This fund accounts for various City building and structure repairs and rehabilitation projects. Revenue into the fund is derived from charges to City Departments based on occupied square footage. 139
228
Workers' Fleet Employee Information
Compensation Management Benefits Systems
ASSETS
Current Assets:
Cash and cash investments 36,123,519 $ 41,087,466 $ 24,974,913 $ 6,120,866 $ Accounts receivable, net 15,000 5,289 18,060 - Interest receivable 93,331 108,455 59,355 15,811 Intergovernmental receivable 85 - - - Due from other funds 126,940 - - - Inventory - 52,411 - - Prepaid items - 2,701 50,363 245,817 Total current assets 36,358,875 41,256,322 25,102,691 6,382,494 Noncurrent Assets:
Intercity loans receivable - 801,012 - - Capital assets:
Construction in progress - 716,369 - - Depreciable capital assets, net - 11,270,831 - 451,452 Total noncurrent assets - 12,788,212 - 451,452 Total assets 36,358,875 54,044,534 25,102,691 6,833,946
DEFERRED OUTFLOWS OF RESOURCES
OPEB related - 257,339 - 591,880 Pension related - 632,784 - 1,484,204 Total Deferred Outflows - 890,123 - 2,076,084
LIABILITIES
Current Liabilities:
Accounts payable 278,714 251,713 670,396 25,766 Accrued liabilities 31,943 34,028 22,778 64,297 Interest payable - - - 2,173 Due to other funds - 2,344 - 511 Current portion of long term liabilities
Subscription-based IT payable - - - 11,224 Leases payable - - - 83,278 Accrued compensated absences - - 7,609,598 - OPEB liability - 56,750 - 130,525 Claims payable 5,010,907 - - - Total current liabilities 5,321,564 344,835 8,302,772 317,774 Noncurrent liabilities:
Accrued compensated absences - - 556,680 - Claims payable 32,729,322 - - - Subscription-based IT payable - - - 43,950 Leases payable - - - 267,095 Intercity loans payable - - - - Net pension liability - 2,353,317 - 5,519,740 OPEB liability - 446,386 - 1,026,688 Total noncurrent liabilities 32,729,322 2,799,703 556,680 6,857,473 Total liabilities 38,050,886 3,144,538 8,859,452 7,175,247
DEFERRED INFLOWS OF RESOURCES
OPEB related - 183,557 - 422,180 Pension related - 14,935 - 35,030 Total Deferred Inflows - 198,492 - 457,210
NET POSITION
Net investment in capital assets - 11,987,200 - 45,905 Unrestricted (1,692,011) 39,604,427 16,243,239 1,231,668 Total net position (1,692,011) $ 51,591,627 $ 16,243,239 $ 1,277,573 $
CITY OF GARDEN GROVE
COMBINING STATEMENT OF NET POSITION
INTERNAL SERVICE FUNDS
JUNE 30, 2024
140
229
Building and
Warehouse Telephone Risk Communication Structure
Operations System Management Replacement Rehab Total
626,440$ 2,190,778 $ 6,859,044 $ 1,771,453 $ 3,281,561 $ 123,036,040 - - - - - 38,349 1,608 5,678 18,116 4,477 - 306,831 - - - - - 85 - - - - - 126,940 474,382 - - - - 526,793 - 9,812 - - - 308,693 1,102,430 2,206,268 6,877,160 1,775,930 3,281,561 124,343,731 - - 2,260,619 - - 3,061,631 - - - - - 716,369 - - - 1,000,082 242,665 12,965,030 - - 2,260,619 1,000,082 242,665 16,743,030 1,102,430 2,206,268 9,137,779 2,776,012 3,524,226 141,086,761 - - - - - 849,219 - - - - - 2,116,988 - - - - - 2,966,207 117,152 16,463 164,943 - - 1,525,147 9,327 1,471 9,272 - - 173,116 - - - - - 2,173 485 11 72 - - 3,423 - - - - - 11,224 - - - - - 83,278 - - - - - 7,609,598 - - - - - 187,275 - - 2,492,410 - - 7,503,317 126,964 17,945 2,666,697 - - 17,098,551 - - - - - 556,680 - - 8,027,255 - - 40,756,577 - - - - - 43,950 - - - - - 267,095 - - - 801,012 - 801,012 - - - - - 7,873,057 - - - - - 1,473,074 - - 8,027,255 801,012 - 51,771,445 126,964 17,945 10,693,952 801,012 - 68,869,996 - - - - - 605,737 - - - - - 49,965 - - - - - 655,702 - - - 1,000,082 242,665 13,275,852 975,466 2,188,323 (1,556,173) 974,918 3,281,561 61,251,418 975,466$ 2,188,323 $ (1,556,173) $ 1,975,000 $ 3,524,226 $ 74,527,270 $ 141
230
Workers' Fleet Employee Information
Compensation Management Benefits Systems
Operating revenues:
Charges for services 6,430,715 $ 2,498,944 $ 4,748,724 $ 4,635,000 $ Other - - - - Total operating revenues 6,430,715 2,498,944 4,748,724 4,635,000
Operating expenses:
Salaries and benefits 1,281,373 1,526,996 351,446 3,354,722 Contractual services 26,427 658,805 372 497,341 Liability claims 7,728,257 - - - Materials and supplies - 1,457,523 - 280,785 Depreciation - 1,748,037 - 119,066 Total operating expenses 9,036,057 5,391,361 351,818 4,251,914
Operating income (loss) (2,605,342) (2,892,417) 4,396,906 383,086
Nonoperating revenues (expenses):
Investment income (loss) 1,498,368 1,771,191 769,667 250,114 Gain (loss) on disposal of assets - 17,812 - - Interest expense - - - (9,600) Total nonoperating revenue
(expenses) 1,498,368 1,789,003 769,667 240,514 Income (loss) before
transfers and capital contributions (1,106,974) (1,103,414) 5,166,573 623,600 Capital contributions - 235,878 - - Transfers in - - - - Transfers out - - (873,555) - Change in net position (1,106,974) (867,536) 4,293,018 623,600
Total net position, beginning of year (585,037) 52,459,163 11,950,221 653,973 Total net position, end of year (1,692,011)$ 51,591,627 $ 16,243,239 $ 1,277,573 $
CITY OF GARDEN GROVE
COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION
INTERNAL SERVICE FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
142
231
Building and
Warehouse Telephone Risk Communication Structure
Operations System Management Replacement Rehab Total
387,600$ 460,800 $ 3,770,526 $ 600,100 $ - $ 23,532,409 $ - - 332 - 391,900 392,232 387,600 460,800 3,770,858 600,100 391,900 23,924,641 394,364 70,645 460,817 - - 7,440,363 78,264 183,209 2,462,232 15 28 3,906,693 - - 7,836,044 - - 15,564,301 - 2,517 7,727 - - 1,748,552 - - - 301,497 - 2,168,600 472,628 256,371 10,766,820 301,512 28 30,828,509
(85,028) 204,429 (6,995,962) 298,588 391,872 (6,903,868)
26,562 90,070 389,874 72,080 132,354 5,000,280 - - - - - 17,812 - - - (12,826) - (22,426) 26,562 90,070 389,874 59,254 132,354 4,995,666 (58,466) 294,499 (6,606,088) 357,842 524,226 (1,908,202) - - - - - 235,878 - - - - - - - - - - - (873,555) (58,466) 294,499 (6,606,088) 357,842 524,226 (2,545,879) -
1,033,932 1,893,824 5,049,915 1,617,158 3,000,000 77,073,149 975,466$ 2,188,323 $ (1,556,173) $ 1,975,000 $ 3,524,226 $ 74,527,270 $ 143
232
Workers' Fleet Employee Information
Compensation Management Benefits Systems
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from user departments 6,415,692 $ 2,493,655 $ 4,745,806 $ 4,635,000 $ Payments to suppliers (7,192,241) (2,315,049) (372) (791,309) Payments to employees (1,281,373) (1,407,313) 321,331 (2,908,599) Payments for employee benefits - - (1,142,189) - Net cash (used) provided by operating
activities (2,057,922) (1,228,707) 3,924,576 935,092
CASH FLOWS FROM NON CAPITAL
FINANCING ACTIVITIES
Cash received from other funds - 637,335 - - Cash paid to other funds (36,346) - (873,555) 226 Net cash (used) provided by non capital
financing activities (36,346) 637,335 (873,555) 226
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Purchases of capital assets - (2,467,866) - (90,486) Proceeds from sale of capital assets - 57,650 - 28,462 Proceeds from leases - - - - Principal paid on capital debt - - - (83,278) Interest paid on capital debt - - - (9,612) Net cash (used) by capital and
related financing activities - (2,410,216) - (154,914)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest earnings 748,631 898,979 281,326 119,903 Increase (decrease) in fair value of investments 749,651 871,134 476,751 126,994 Net cash provided by investing activities 1,498,282 1,770,113 758,077 246,897 Net increase (decrease) in cash and
cash equivalents (595,986) (1,231,475) 3,809,098 1,027,301 Cash and cash equivalents, beginning of year 36,719,505 42,262,191 21,165,815 4,963,040 Cash and cash equivalents, end of year 36,123,519 $ 41,030,716 $ 24,974,913 $ 5,990,341 $ Reconciliation of operating income (loss)
to net cash provided (used) by operating
activities:
Operating income (loss) (2,605,342) $ (2,892,417) $ 4,396,906 $ 383,086 $ Adjustments to reconcile operating
income (income) to net cash (used) provided
by operating activities:
Depreciation expense - 1,748,037 - 119,066 Changes in assets and liabilities:
(Increase) decrease in accounts receivable (15,000) (5,289) (2,918) - (Increase) decrease in intergovernmental receivable (23) - - - (Increase) decrease in inventory - 24,379 - 166 (Increase) decrease in prepaid expense 16,939 1,386 157,189 (19,348) Increase (decrease) in accounts payable 278,714 (234,905) 663,295 (51,565) Increase (decrease) in compensated absences - - 321,331 - Increase (decrease) in accrued liabilities 8,434 10,419 (1,611,227) 25,200 Increase (decrease) in refundable deposits - - - 32,364 Increase (decrease) in claims payable 258,356 - - - changes in deferred outflows and inflows of resources - (27,645) - 16,464 changes in deferred outflows and inflows of resources - 147,328 - 429,659 Total adjustments 547,420 1,663,710 (472,330) 552,006 Net cash (used) provided by operating
activities (2,057,922) $ (1,228,707) $ 3,924,576 $ 935,092 $
CITY OF GARDEN GROVE
COMBINING STATEMENT OF CASH FLOWS
INTERNAL SERVICE FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
144
233
Building and
Warehouse Telephone Risk Communication Structure
Operations System Management Replacement Rehab Total
387,600$ 460,800 $ 3,772,087 $ 600,100 $ 391,900 $ 23,902,640 $ (77,101) (195,111) (6,472,301) (15) (28) (17,043,527) (394,364) (70,645) (460,817) - - (6,201,780) - - - - - (1,142,189) (83,865) 195,044 (3,161,031) 600,085 391,872 (484,856) 137 - 92,456 - - 729,928 - (11) - (400,507) - (1,310,193) 137 (11) 92,456 (400,507) - (580,265)
- - - - - (2,558,352) - - - - - 86,112 - - - - - - - - - - - (83,278) - - - (12,826) - (22,438)
- - - (12,826) - (2,577,956)
13,701 43,624 249,437 35,347 65,580 2,456,528 12,913 45,607 145,509 35,960 66,774 2,531,293 26,614 89,231 394,946 71,307 132,354 4,987,821 (57,114) 284,264 (2,673,629) 258,059 524,226 1,344,744 683,554 1,906,514 9,532,673 1,513,394 3,000,000 121,746,686 626,440$ 2,190,778 $ 6,859,044 $ 1,771,453 $ 3,524,226 $ 123,091,430 $
(85,028)$ 204,429 $ (6,995,962) $ 298,588 $ 391,872 $ (6,903,868) $ - - - 301,497 - 2,168,600 - - 1,229 - - (21,978) - - - - - (23) (71,362) - - - - (46,817) - (9,812) 17,179 - - 163,533 67,859 2,176 154,343 - - 879,917 - - - - - 321,331 4,666 (1,749) 2,553 - - (1,561,704) - - - - - 32,364 - - 3,659,627 - - 3,917,983 - - - - - (11,181) - - - - - 576,987 1,163 (9,385) 3,834,931 301,497 - 6,419,012 (83,865)$ 195,044 $ (3,161,031) $ 600,085 $ 391,872 $ (484,856) $
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Statistical Section
Statistical
Section
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Financial Trends
Schedule I - Net Position by Component
Schedule II - Changes in Net Position
Schedule III - Balance of Governmental Funds
Schedule IV - Changes in Fund Balances of Governmental Funds Schedule V - General Government Major Tax Revenues by Source Revenue Capacity
Schedule VI - Assessed Value and Estimated Actual Value of Taxable Property Schedule VII - Property Tax Rates Direct and Overlapping Governments Schedule VIII - Principal Property Tax Payers
Schedule IX - Property Tax Levies and Collections
Debt Capacity
Schedule X - Ratios of Outstanding Debt by Type
Schedule XI - Ratios of General Bonded Debt Outstanding Schedule XII - Direct and Overlapping Bonds and Debt
Schedule XIII - Legal Debt Margin Information
Schedule XIV - Pledged-Revenue Coverage
Demographics and Economic Information
Schedule XV - Demographic and Economic Statistics
Schedule XVI - Principal Employers
Operating Information
Schedule XVII - Full-Time and Part-Time City Employees by Department Schedule XVIII - Operating Indicators by Function
Schedule XIX - Capital Assets Statistics by Function
Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year.
The City implemented GASB 34 in FY 2002; the government-wide schedules include information beginning in that year.
The City implemented GASB 54 in FY 2011; the balance of governmental funds schedule include information beginning in that year.
The City implemented GASB 65 in FY 2013; as a result, effective FY 2013, the names of Schedule I and Schedule II are changed to "Net Position by Component" and "Changes in Net Position", respectively.
The City implemented GASB 68 in FY 2015; the government-wide schedules include information beginning in that year.
Provides service and infrastructure information to assist readers using the City's financial statement to understand how it relates to the services and activities performed by the City.
This part of the City of Garden Grove Comprehensive Annual Financial Report provides detailed information to better understand information presented within the Financial Statements, note disclosures, and required supplementary information say about the City’s overall financial health.
Statistical Section
These schedules contain trend information to assist the reader understand and assess how the City’s financial position has changed over time.
These schedules contain information to help the reader assess the City’s most significant local revenue source, the property tax.
This information is intended to assist the user in understanding and assessing the affordability of the City's outstanding debt and the City's ability to issue additional debt.
This information assists the reader in understanding the socioeconomic environment within which the City's financial activities take place.
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238
SCHEDULE I
CITY OF GARDEN GROVE
NET POSITION BY COMPONENT
LAST TEN FISCAL YEARS
(Accrual Basis of Accounting)
(In Thousands)
2015 2016 2017 2018
Governmental activities:
Net investment in
capital assets 642,786$ 641,661$ 631,964$ 622,932$ Restricted 17,848 21,967 24,613 65,456 Unrestricted (83,857) (88,223) (86,633) (111,538) Total governmental
activities net position 576,777$ 575,405$ 569,944$ 576,850$ Business-type activities:
Net investment in
capital assets 111,947$ 117,488$ 118,371$ 119,954$ Restricted - - - -
Unrestricted 29,703 26,011 28,288 29,677 Total business-type
activities net position 141,650$ 143,499$ 146,659$ 149,631$ Primary government:
Net investment in
capital assets 754,733$ 759,149$ 750,335$ 742,886$ Restricted 17,848 21,967 24,613 65,456 Unrestricted (54,154) (62,212) (58,345) (81,861) Total primary government
net position 718,427$ 718,904$ 716,603$ 726,481$ Source: Finance Department, City of Garden Grove
Fiscal Year
The City of Garden Grove implemented GASB 63 and GASB 65 for the fiscal year ended June 30, 2013, and GASB 68 for the fiscal year ended June 30, 2015. 147
239
Fiscal Year
2019 2020 2021 2022 2023 2024
621,163$ 619,138$ 617,316$ 618,070$ 633,327$ 700,606$ 69,820 72,470 75,669 77,360 74,580 230,076 (104,976) (108,833) (94,620) (35,673) (17,843) (223,772) 586,007$ 582,775$ 598,365$ 659,757$ 690,064$ 706,910$ 125,805$ 132,671$ 120,399$ 129,173$ 132,656$ 142,798$ - - - - - - 32,485 37,725 63,654 64,562 78,050 86,010 158,290$ 170,396$ 184,053$ 193,735$ 210,706$ 228,808$ 746,968$ 751,809$ 737,715$ 747,243$ 765,983$ 843,404$ 69,820 72,470 75,669 77,360 74,580 230,076 (72,491) (71,108) (30,966) 28,889 60,207 (137,762) 744,297$ 753,171$ 782,418$ 853,492$ 900,770$ 935,718$ 148
240
SCHEDULE II
CITY OF GARDEN GROVE
CHANGES IN NET POSITION
LAST TEN FISCAL YEARS
(Accrual Basis of Accounting)
(In Thousands)
2015 2016 2017 2018
Expenses:
Governmental activities:
Fire 21,939$ 20,700$ 23,934$ 27,428$
Police 50,837 47,309 53,783 64,245
Traffic safety 3,517 3,001 4,425 5,088 Public right of way 16,903 16,917 18,456 18,952 Drainage 1,445 1,453 1,438 1,561
Community buildings 4,973 4,691 4,998 5,096 Community services 4,797 4,606 5,184 5,677 Economic Development 1,944 2,333 4,271 3,099 Parks and greenbelts 2,146 1,957 1,861 5,628 Community planning and development 7,837 5,633 6,989 9,590 Municipal support 7,609 6,151 8,434 8,721 Interest on long-term debt 862 1,962 1,212 1,133 Total governmental activities
expenses 124,809 116,713 134,985 156,218
Business-type activities:
Water utility 30,003 26,982 31,109 35,410 Sanitary District 8,128 8,095 8,709 9,671 Mobile home parks/RV park - - - - Housing authority 30,707 36,947 30,390 33,130 Golf course
Total business-type activities expenses 68,838 72,024 70,208 78,211 Total primary government expenses 193,647 188,737 205,193 234,429 Program revenues:
Governmental activities:
Charges for services:
Fire 1,011 1,683 1,347 1,830
Police 3,019 2,717 3,150 3,599
Traffic safety 1,351 1,347 1,356 1,355 Public right of way 272 391 394 406 Drainage - - - - Community buildings - - 401 - Community services 986 768 1,015 1,145 Economic development - - 108 - Parks and greenbelts 1,264 1,226 1,265 834 Community planning and development 1,839 2,320 2,031 3,605 Municipal support 2,656 3,109 3,555 3,730 Operating grants and contributions 13,295 15,819 14,868 14,771 Capital grants and contributions 6,032 3,569 497 2,329 Total governmental activities program
revenues 31,725 32,949 29,987 33,604
Business-type activities:
Charges for services:
Water 33,145 29,158 32,130 35,595
Sanitary District 12,095 12,339 12,939 12,837 Mobile home parks - - - - Golf course - - - -
Operating grants and contributions 30,726 31,730 31,379 31,461 Capital grants and contributions - - - - Total business-type activities program
revenues 75,966 73,227 76,448 79,893
Total primary government program
revenues 107,691 106,176 106,435 113,497
Net revenues (expenses):
Governmental activities (93,084) (83,764) (104,998) (122,614) Business-type activities 7,128 1,203 6,240 1,682 Total net revenues (expenses) (85,956)$ (82,561)$ (98,758)$ (120,932)$
Fiscal Year
149
241
2019 2020 2021 2022 2023 2024
27,053$ 32,910$ 29,810$ 27,035$ 31,188$ 31,871$ 62,965 76,176 78,689 64,172 75,053 97,762 5,214 5,734 5,947 5,839 5,786 6,814 19,108 17,499 18,389 16,553 21,099 23,731 1,464 1,396 1,547 1,589 1,488 1,461 4,552 4,802 4,958 4,780 6,423 5,810 5,684 6,268 5,250 5,090 7,102 7,643 3,235 2,950 2,595 3,595 4,323 2,612 2,367 2,190 2,161 2,295 2,966 2,487 8,235 9,352 10,521 9,248 13,837 20,536 10,812 9,914 9,360 7,595 13,927 14,291 1,049 1,112 1,083 1,058 1,107 1,248 151,738 170,303 170,310 148,849 184,299 216,266 34,062 37,937 36,220 35,862 32,579 38,078 9,554 9,509 8,984 10,424 8,741 10,726 - - - - - - 34,218 37,038 39,631 43,524 46,706 52,633 1,479 1,589 1,763 2,218 2,259 77,834 85,963 86,424 91,573 90,244 103,696 229,572 256,266 256,734 240,422 274,543 319,962 1,329 698 596 740 705 674 3,293 3,470 3,058 2,889 3,324 3,551 1,350 1,352 1,356 1,365 1,293 1,290 450 362 272 429 372 351 - - - - - 510 508 230 444 4,242 1,446 761 682 968 833 593 - - - -
678 776 754 577 857 1,327 4,360 3,275 4,252 4,118 4,885 4,890 3,646 3,256 3,456 1,806 5,436 3,238 21,660 22,125 49,746 49,242 24,534 30,523 3,739 3,036 1,906 3,442 2,392 1,537 42,461 39,619 66,308 66,020 44,631 52,216 36,966 38,575 42,246 43,256 40,912 44,201 14,002 14,413 13,959 15,966 15,956 16,041 - - - - - - - 1,243 1,837 1,744 2,001 2,288 34,417 37,376 41,155 43,400 47,472 54,152 - - - - - - 85,385 91,607 99,197 104,366 106,341 116,682 127,846 131,226 165,505 170,386 150,972 (109,277) (130,684) (104,002) (82,829) (139,666) (164,050) 7,551 5,644 12,773 12,793 16,097 12,985 (101,726)$ (125,040)$ (91,229)$ (70,036)$ (123,569)$ (151,065)$ (Continued)
Fiscal Year
150
242
SCHEDULE II
CITY OF GARDEN GROVE
CHANGES IN NET POSITION (Continued)
LAST TEN FISCAL YEARS
(Accrual Basis of Accounting)
(In Thousands)
2015 2016 2017 2018
General revenues and other changes in net position:
Governmental activities:
Taxes:
Sales taxes 19,251$ 22,052$ 21,793$ 20,737$
Property taxes 36,972 40,574 42,113 47,033 Transient occupancy taxes 17,217 20,897 25,121 25,983 Other taxes 7,761 8,214 8,314 8,660 Motor vehicle taxes, levied
for general purposes 72 71 79 93 Investment income 2,005 3,344 1,337 1,870 Other general revenues 534 7,270 488 622 Gain/(Loss) on sale of capital assets 3 5 2,774 5 - 5 - Transfers (7) - 292 581 Capital Contribution - - - - Special Item - - - 30,058 Total governmental activities 83,808 105,196 99,537 135,637 Business-type activities:
Investment income 523 428 142 410 Gain/(Loss) on sale of capital assets 169 59 - - Other general revenues 29 159 182 208 Discontinued operations - - - - Transfers 7 - (292) (581) Total business-type activities 728 646 32 37 Total primary government 84,536 105,842 99,569 135,674 Changes in net position
Governmental activities (9,276) 21,432 (64,513) 135,637 Business-type activities 7,856 1,849 13,017 37 Total primary government (1,420)$ 23,281$ (51,496)$ 135,674$ 1 2
3 4
5 FY12-13: The $2.3 million capital contribution was related to the transfer of land from the Successor Agency Trust fund to the General fund.
FY13-14: The $1.0 million loss in governmental activities represents a one-time loss due to the disposal of land.
Source: Finance Department, City of Garden Grove
The City of Garden Grove implemented GASB 63 and GASB 65 for the fiscal year ended June 30, 2013.
Fiscal Year
FY11-12: The $18.9 million loss in governmental activities represents a one-time loss as a result of the dissolution of Redevelopment Agency in 2012.
FY11-12: The $2.9 million loss in business-type activities represents a one-time loss due to the transfer of the remaining net position of RV Park enterprise fund to the Successor Agency Trust fund.
FY11-12: The $20.4 million was primarily related to the $19.6 million transfer from the Mobile Home Park enterprise fund to the General fund as a result of the discontinuance of operations of the Mobile Home Park fund.
151
243
2019 2020 2021 2022 2023 2024
24,612$ 43,122$ 49,305$ 59,703$ 60,104$ 60,132$ 49,356 50,765 55,004 59,509 66,366 65,443 26,285 18,277 7,136 24,509 28,016 28,501 8,350 8,010 5,866 8,027 9,287 9,615 213
85 139 128 199 176 - 7,666 9,067 1,739 (8,007) 4,238 15,384 766 1,672 233 242 34 531 - - - - 1,352 18 1,000 50 178 39 400 - - - - - - - - - - - - 1,059 118,120 131,102 119,589 144,221 169,973 180,896 1,917 2,658 253 (3,072) 1,273 5,117 - - - - - - 191 204 810 - - - - - - - - - (1,000) (50) (178) (39) (400) - 1,108 2,812 885 (3,111) 873 5,117 119,228 133,914 120,474 141,110 170,846 186,013 (12,564) 27,100 15,589 61,392 30,307 16,846 6,752 15,585 13,657 9,682 16,970 18,102 (5,812)$ 42,685$ 29,246$ 71,074$ 47,277$ 34,948 Fiscal Year
152
244
SCHEDULE III
CITY OF GARDEN GROVE
BALANCE OF GOVERNMENTAL FUNDS
THE LAST TEN FISCAL YEARS
(Modified Accrual Basis of Accounting)
(In Thousands)
2015 2016 2017 2018
General fund:
Reserved -$ -$ -$ -$ Non-Spendable:
Agency reimbursement agreement - - - - COP reimbursement agreement - - - - Intercity loan 13,375 13,375 13,414 13,456 Land held for resale - - - - Prepaid items - 13 10 17 Deposits - - - - Restricted:
Public safety - - 103 84 Public right of way - - - - Community services - - 161 166 Community planning and development - - 7 2,764 Municipal support - - 15 35 Pension Trust - - - - Committed:
Post-Employment Benefits - - - - Community planning and development - - - - Designated revenue reserve
Stability reserve - - - - Assigned:
Post-Employment Benefits 1,000 1,000 1,000 1,000 Garden Grove tourism improvement 231 314 404 - Property tax lawsuit 500 500 500 500 Building improvements 1,300 1,300 1,300 1,300 General Plan 273 239 325 301 Paramedic Tax - - - 617 Other purposes - - - - Unreserved - - - - Unassigned 16,330 18,331 22,629 29,428 Total general fund 33,009$ 35,072$ 39,868$ 49,668$ All other governmental funds:
Reserved -$ -$ -$ -$ Non-Spendable:
Intercity loan - - - - Land held for resale - - - - Prepaid items - - - - Deposits - - - - Restricted:
Fire - - - -
Police 1,754 9,260 9,521 5,336 Public right of way 5,358 7,639 8,434 9,021 Drainage 647 754 529 412 Community services 180 196 945 2,370 Community planning and development 10,385 16,712 18,080 48,376 Municipal support - 755 - - Committed:
Community planning and development - - - - Assigned:
Post-Employment Benefits - - - - Property tax lawsuit - - - - Building improvements - - - - Other purposes - - - - Unreserved, reported in:
Special revenue funds - - - - Debt service funds - - - - Capital projects funds - - - - Unassigned (755) (4) 466 - Total all other governmental funds 17,569$ 35,312$ 37,975$ 65,515$ Source: Finance Department, City of Garden Grove
The City of Garden Grove implemented GASB 54 for the fiscal year ended June 30, 2011.
Fiscal Year
153
245
2019 2020 2021 2022 2023 2024
-$ -$ -$ -$ -$ -$ - - - - - - - - - - 12,793 12,102 8,873 8,197 13,048 11,587 - 2,300 2,300 2,300 2,300 2,300 21 40 90 85 3,330 179 - - - -
90 90 90 90 95 85 - - - - - 107 177 177 177 177 192 213 3,469 4,039 4,039 4,261 4,841 6,388 57 57 48 48 41 232 - 662 1,635 1,635 2,129 4,530 - - - -
- - - -
10,922
- 22,500 22,500 22,500 25,700 27,900 1,000 1,000 1,000 1,000 1,000 1,000 - - - - - 500 500 - - - 1,300 1,300 1,300 1,300 1,300 1,300 262 357 428 428 576 945 - - - - - - - - - - - - - - - - - - 47,448 37,206 69,951 120,244 128,755 97,844 67,117$ 82,330$ 112,431$ 162,265$ 183,307$ 165,532$ -$ -$ -$ -$ -$ - - - - - - - 519 - - - 195 238 31 12 36 - - - -
- - - - - - 3,210 4,103 4,064 3,682 3,650 155,864 11,502 10,355 12,195 12,347 14,662 15,288 273 76 129 107 264 352 4,505 5,841 6,401 8,166 42,340 14,409 48,098 44,971 45,947 47,945 9,570 37,734 - - - 1,264 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - (40) (59) (18) (4) 53 (7,985) 67,548$ 65,482$ 69,475$ 73,538$ 70,551$ 215,698$ Fiscal Year
154
246
SCHEDULE IV
CITY OF GARDEN GROVE
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
(Modified Accrual Basis of Accounting)
(In Thousands)
2015 2016 2017
Revenues:
Taxes 81,823$ 92,268$ 98,042$
Licenses and permits 1,139 1,554 1,687 Fines, forfeitures and penalties 2,629 2,222 2,622 Investment earnings 1,546 1,285 1,275 Charges for current services 9,528 9,943 10,041 From other agencies 15,945 15,991 11,640 Other revenues 2,079 11,071 3,847
Total revenues 114,689 134,334 129,154
Expenditures
Current:
Fire 21,672 23,195 23,707
Police 49,389 51,942 53,168
Traffic safety 3,102 2,959 4,215
Public right of way 6,886 7,515 7,257 Drainage - - -
Community buildings 3,408 3,317 3,185 Community services 4,793 5,470 4,852 Economic development 1,944 2,333 2,757 Parks and greenbelts 2,247 2,217 1,939 Community planning and
development 7,359 7,229 6,497
Municipal support 7,600 8,012 7,903 Capital outlay 9,032 7,371 6,754
Debt service:
Principal retirement 1,937 2,097 3,342 Interest 1,199 939 1,184
Total expenditures 120,568 124,596 126,760 Excess (deficiency) of revenues
over (under) expenditures (5,879) 9,738 2,394 Other financing sources (uses):
Transfers in 7,761 11,783 1,396
Transfers out (3,558) (11,683) (1,296)
Issuance of debt - 25,962 -
Gain/(Loss) on sale of capital
assets 22 1,735 4,965
Contribution to Housing
Authority - - -
Extraordinary Gain/(Loss) - - - Payment to bond escrow agent - (17,462) - Total other financing
sources (uses) 4,225 10,335 5,065
Special Item
Net change in fund balances (1,654)$ 20,073$ 7,459$ Debt service as a percentage of
noncapital expenditures 2.8% 2.6% 3.8%
Source: Finance Department, City of Garden Grove
Fiscal Year
155
247
2018 2019 2020 2021 2022 2023 2024
103,090$ 114,078$ 119,853$ 118,044$ 150,869$ 164,058$ 164,011$ 2,005 2,645 2,647 2,419 2,763 3,155 3,193 3,134 2,850 3,157 2,859 2,546 3,318 3,188 1,846 4,344 6,402 793 (4,594) 2,265 9,354 11,945 15,122 11,180 11,670 13,301 12,252 11,199 12,047 13,599 17,884 47,729 45,322 25,048 26,265 4,193 3,940 4,386 3,003 3,494 2,191 9,572 138,260 156,578 165,509 186,517 213,701 212,287 226,782 25,067 24,483 27,975 28,470 26,975 30,933 31,604 56,128 56,282 64,770 68,032 71,121 75,134 78,814 3,925 4,282 4,471 4,997 5,663 6,183 5,961 7,197 7,107 7,155 17,543 19,057 22,610 33,944 66 - - - - - 3,421 3,007 2,781 3,164 3,713 10,569 9,287 4,687 4,855 5,333 4,839 5,767 6,578 7,243 3,099 3,212 2,950 2,609 3,592 4,314 2,618 2,325 2,300 2,057 2,607 2,952 2,904 3,630
7,982 7,124 8,130 10,588 11,095 26,487 44,813 7,626 9,353 8,467 8,684 9,011 10,108 12,210 10,938 13,635 14,021 - - 573 580 495 494 592 630 20,778 1,087 1,064 1,137 1,112 1,094 1,152 1,102 134,121 137,284 149,742 153,139 160,632 197,602 252,004 4,139 19,294 15,767 33,378 53,069 14,685 (25,222) 2,826 1,403 4,380 1,346 2,275 9,212 3,552 (1,253) (1,303) (7,357) (629) (1,448) (12,894) (2,678) - - - - - 278 151,719 - - 874 - - 6,775 - - - - - - - - - - - - - - - - - - - - - - 1,573 100 (2,103) 717 827 3,371 152,593 30,029 - - -
35,741$ 19,394$ 13,664$ 34,095$ 53,896$ 18,056$ 127,371$
1.3% 1.3% 1.2% 1.1% 1.1% 1.0% 9.1%
Fiscal Year
156
248
Business Transient Motor
Fiscal Sales Property Franchise Operation Occupancy Vehicle Year Tax Tax Tax Tax Tax Tax Total
2015 19,251,431 36,972,309 2,532,706 5,228,239 17,216,510 71,970 81,273,165
2016 22,051,778 40,574,176 2,577,292 5,636,389 20,897,283 70,518 91,807,436 2017 21,792,872 42,113,373 2,532,462 5,781,098 25,121,419 79,429 97,420,653 2018 20,736,558 47,032,917 2,408,395 6,251,994 25,982,696 92,789 102,505,349 2019 29,371,450 49,355,823 2,404,867 5,945,451 26,285,461 84,911 113,447,963 2020 43,122,113 50,764,849 2,414,897 5,595,421 18,277,467 138,627 120,313,374 2021 49,305,114 55,004,385 2,331,476 3,534,201 7,136,525 128,205 117,439,906 2022 59,702,605 59,508,746 2,538,622 5,489,432 24,508,840 199,254 151,947,499 2023 60,103,880 66,366,493 2,863,122 6,423,628 28,016,033 176,351 163,949,507 2024 60,132,338 65,442,744 2,961,225 6,654,896 28,500,576 212,513 163,904,292 Source: Finance Department, City of Garden Grove
SCHEDULE V
CITY OF GARDEN GROVE
GENERAL GOVERNMENT MAJOR TAX REVENUES BY SOURCE
LAST TEN FISCAL YEARS
157
249
City Successor Agency
Fiscal Year Taxable Taxable Total
Ended Assessed Assessed Direct Tax
June 30 Secured Unsecured Value Secured 1 Unsecured 1 Value 1 Rate 2015 10,538,784 356,435 10,895,219 2,897,658 328,394 3,226,052 1.145% 2016 10,568,876 234,280 10,803,156 3,070,910 317,449 3,388,359 1.151% 2017 12,226,724 364,776 12,591,500 3,579,711 363,489 3,943,200 1.150% 2018 12,873,943 335,785 13,209,728 3,797,471 366,576 4,164,047 1.189% 2019 12,373,687 263,636 12,637,323 3,801,697 361,772 4,163,469 1.183% 2020 13,000,870 232,485 13,233,355 3,913,862 391,616 4,305,478 1.184% 2021 14,167,631 252,597 14,420,228 4,270,427 468,777 4,739,204 1.185% 2022 15,071,294 278,284 15,349,578 4,359,480 446,933 4,806,413 1.094% 2023 16,030,786 364,320 16,395,106 4,635,798 475,012 5,110,810 1.178% 2024 16,815,678 386,089 17,201,767 4,817,389 503,017 5,320,406 1.179% 1 The Redevelopment Agency was dissolved in February 2012.
The Successor Agency was created to close out the Redevelopment Agency.
Source: Orange County Assessor's Office/HdL Coren & Cone
NOTE:
In 1978, the voters of the State of California passed Proposition 13, which limited property taxes to a total maximum rate of 1% based on the assessed value of the property being taxed. Each year, the assessed value of property may be increased by an "inflation factor" (limited to a maximum increase of 2%). With few exceptions, property is only re-assessed at the time that it is sold to a new owner. At that point, the new assessed value is reassessed at the purchase price of the property sold. The assessed valuation data shown above represents the only data currently available with respect to the actual market value of taxable property and is subject to the limitations described above.
SCHEDULE VI
CITY OF GARDEN GROVE
ASSESSED VALUE AND ESTIMATED ACTUAL VALUES OF TAXABLE PROPERTY
LAST TEN FISCAL YEARS
(In Thousands)
158
250
Metropolitan Sanitation
Fiscal Basic City Water Orange and School
Year Levy Paramedic District County Water Services Other Total 2015 1.0000 0.07000 0.00350 - - 0.07163 - 1.14513 2016 1.0000 0.07000 0.00350 - - 0.07748 - 1.15098 2017 1.0000 0.07000 0.00350 - - 0.07603 - 1.14953 2018 1.0000 0.08000 0.00350 - - 0.10599 - 1.18949 2019 1.0000 0.08000 0.00350 - - 0.09900 - 1.18250 2020 1.0000 0.08000 0.00350 - - 0.10022 - 1.18372 2021 1.0000 0.08000 0.00350 - - 0.10137 - 1.18487 2022 1.0000 0.08000 0.00350 - - 0.01004 - 1.09354 2023 1.0000 0.08000 0.00350 - - 0.09430 - 1.17780 2024 1.0000 0.08000 0.00350 - - 0.09569 - 1.17919 Section 135.
Source: Orange County Tax Rates Book
Property tax in California is levied in accordance with Article 13A of the State Constitution at $1 per $100 county-wide assessed valuations plus other voter approved debt. Rates shown above are $100 of assessed valuation. The one percent is allocated pursuant to State law to the appropriate units of local government.
SCHEDULE VII
CITY OF GARDEN GROVE
PROPERTY TAX RATES
DIRECT AND OVERLAPPING GOVERNMENTS
LAST TEN FISCAL YEARS
Assessed values are expressed as 100% of "full value" as prescribed by California Revenue and Taxation Code 159
251
Percent of Percent of
Total City Total City
Taxable Taxable Taxable Taxable
Assessed Assessed Assessed Assessed
Taxpayer Value Value Value Value
GWGG LLC 253,007,914$ 1.16%
Investel Harbor Resorts LLC 138,923,684 0.64%
Landmark Hotels II LLC 89,447,262 0.41%
Rexford Industrial Realty LP 87,428,290 0.40%
New Age Brookhurst LLC 83,499,911 0.38%
TNA Distributions LLC 62,815,445 0.29%
Khanna Enterprises Limited 61,353,542 0.28%
Park Grove Fee Owner LLC 57,127,813 0.26%
House Foods Holding USA INC 36,970,308 0.17%
SPS Techonolgies LLC 2,922,352 0.01%
Landmark Marriott Suites 99,542,060 0.97%
American Lodging 56,316,887 0.55%
Chatham Rigg LLC 42,624,653 0.42%
Newage Garden Grove 42,590,097 0.42%
HGGA Promedade 42,022,116 0.41%
Ohi Resort Hotels 40,579,806 0.40%
Walton CWCA Garden Grove 29,546,615 0.29%
Swedlow Inc. 25,786,166 0.25%
Car Noa GGT 25,194,000 0.25%
CRP-2 Monarch 25,097,993 0.25%
873,496,521$ 4.01% 429,300,393 $ 4.19%
BB Promenade
Source: Hdl Coren & Cone The City of Garden Grove Top Ten Property Taxpayers
SCHEDULE VIII
CITY OF GARDEN GROVE
PRINCIPAL PROPERTY TAX PAYERS
CURRENT YEAR AND TEN YEARS AGO
2024 2015
160
252
City Percent Ratio of Ratio of
Tax of Total Tax Delinquent
Rate Total Current Current Delinquent Total Collections Outstanding Taxes Fiscal (Per Tax Tax Taxes Tax Tax to Total Delinquent to Total Year $100) Levied Collections Collected Collections Collections Tax Levy Taxes Tax Levy 2015 0.0025 21,411,687 20,704,013 96.7 237,945 20,941,958 97.8 230,751 1.1% 2016 0.0025 22,611,366 21,721,987 96.1 213,997 21,935,984 97.0 517,198 2.3% 2017 0.0025 23,155,878 22,914,391 99.0 206,984 23,121,375 99.9 326,133 1.4% 2018 0.0025 26,376,092 25,752,153 97.6 174,164 25,926,316 98.3 134,739 0.5% 2019 0.0025 26,866,637 26,606,288 99.0 202,200 26,808,488 99.8 176,785 0.7% 2020 0.0025 28,019,537 27,164,413 96.9 567,147 27,731,560 99.0 248,420 0.9% 2021 0.0025 30,281,268 26,169,198 86.4 3,616,591 29,785,789 98.4 197,557 0.7% 2022 0.0025 31,282,250 30,586,260 97.8 305,759 30,892,019 98.8 1,817,047 5.8% 2023 0.0025 34,509,263 33,301,324 96.5 255,498 33,556,822 97.2 1,960,347 5.7% 2024 0.0025 34,935,620 34,067,597 97.5 362,382 34,429,979 98.6 505,642 1.4% Source: Orange County Property Tax Ledger
Finance Department, City of Garden Grove
SCHEDULE IX
CITY OF GARDEN GROVE
PROPERTY TAX LEVIES AND COLLECTIONS
LAST TEN FISCAL YEARS
In implementing Article XIIIa of the State Constitution, the Revenue and Taxation Code provides for a single Basic Tax Rate Levy for County/City/School/Special Districts and other rates necessary to retire bonded and other indebtedness. 161
253
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254
TotalLeaseCertificatesFiscal Year
GovernmentalRevenueof ParticipationEnded
LoansBonds2002June 30 Leases 1 SBITA 2
Activities
2015 17,210,000 - 4,128,913 812,176 - 22,151,089 2016 - 25,568,492 2,895,399 546,422 - 29,010,313 2017 - 25,104,126 69,826 622,676 - 25,796,628 2018 - 24,624,760 23,732 589,293 - 25,237,785 2019 - 24,120,394 - 373,317 - 24,493,711 2020 - 23,601,028 - 229,928 - 23,830,956 2021 - 23,056,662 - 113,963 - 23,170,625 2022 - 22,487,297 - 167,990 - 22,655,287 2023 - 21,892,930 - 637,981 22,530,911 2024 - 151,707,425 - 721,598 94,167 152,523,190 1 2
3 Source: Finance Department, City of Garden Grove
These ratios are calculated using personal income and population for the prior calendar year.
GASB no. 87 implemented in fiscal year 2022
GASB no. 96 implemented in fiscal year 2023
SCHEDULE X
CITY OF GARDEN GROVE
RATIOS OF OUTSTANDING DEBT BY TYPE
LAST TEN FISCAL YEARS
Governmental Activities
162
255
DebtPercentageTotalTotalSewerWater
Perof PersonalPrimaryBusiness-typeRevenueRevenue
BondsBonds Leases 1 SBITA 2
IncomeGovernmentActivities Capita 3
23,884,150 19,220,388 - - 43,104,538 65,255,627 0.13% 373 20,775,000 18,365,000 - - 39,140,000 68,150,313 0.14% 384 19,571,107 16,740,627 - - 36,311,734 62,108,362 0.12% 352 18,039,382 16,148,171 - - 34,187,553 59,425,338 0.11% 336 16,381,152 15,535,716 - - 31,916,868 56,410,579 0.10% 322 14,667,922 14,908,260 - - 29,576,182 53,407,138 0.09% 306 29,697,566 14,406,843 - - 44,104,409 67,275,034 0.11% 390 28,342,104 13,558,347 - - 41,900,451 64,555,738 0.10% 379 26,823,912 12,840,891 39,664,803 62,195,714 0.09% 363 24,890,720 12,088,435 466,802 189,000 37,634,957 190,158,147 0.27% 1112 Business-type Activities
163
256
SCHEDULE XI
CITY OF GARDEN GROVE
Percent ofTaxLeaseFiscal Year
Ended Certificates of Revenue Allocation Assessed Per
TotalBondsBondsParticipationJune 30 Value 1 Capita
2015 17,210 - - 17,210 0.12% 98 2016 - 25,568 - 25,568 0.18% 144 2017 - 25,104 - 25,104 0.15% 142 2018 - 24,625 - 24,625 0.14% 139 2019 - 24,120 - 24,120 0.14% 138 2020 - 23,601 - 23,601 0.13% 135 2021 - 23,057 - 23,057 0.12% 134 2022 - 22,487 - 22,487 0.12% 132 2023 - 21,893 - 21,893 0.11% 128 2024 - 151,707 - 151,707 0.67% 887
Source: Finance Department, City of Garden Grove
1 Assessed value has been used because the actual value of taxable property is not readily available in the State of California.
RATIOS OF GENERAL BONDED DEBT OUTSTANDING
LAST TEN FISCAL YEARS
(In Thousands, except Per Capita)
Outstanding General Bonded Debt
General bonded debt is debt payable with governmental fund resources and general obligation bonds recorded in enterprise funds (of which, the City has none).
164
257
SCHEDULE XII
CITY OF GARDEN GROVE
2023-24 Assessed Valuation: 21,616,412,958
Total Debt City's Share of
OVERLAPPING TAX AND ASSESSMENT DEBT: 6/30/2024 % Applicable (1) Debt 6/30/24 Metropolitan Water District 18,210,000 0.006 101,612 Coast Community College District 886,956,084 6.191 54,911,451 North Orange County Joint Community College District 291,560,678 2.307 6,726,305 Rancho Santiago Community College District 154,276,441 6.410 9,889,120 Rancho Santiago Community College District School Facilities Improvement District No. 1 144,765,000 10.854 15,712,793 Garden Grove Unified School District 517,805,000 58.040 300,534,022 Orange Unified School District 276,295,000 1.335 3,688,538 Anaheim Union High School District 229,078,955 0.080 183,263 Huntington Beach Union High School District 137,329,998 1.274 1,749,584 Anaheim School District 345,875,685 0.098 338,958 Magnolia School District 17,868,305 0.234 41,812 Westminster School District 155,518,449 7.140 11,104,017 TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT 404,981,475
DIRECT AND OVERLAPPING GENERAL FUND DEBT:
Orange County General Fund Obligations 440,385,000 0.028 12,366,011 Orange County Board of Education General Fund Obligations 10,030,000 2.808 281,642 North Orange Regional Occupation Program Certificates of Participation 7,350,000 0.029 2,132 Coast Community College District General Fund Obligations 1,075,000 6.191 66,553 Coast Community College District Pension Obligation Bonds 925,000 6.191 57,267 Orange Unified School District Certificates of Participation 8,440,000 1.335 112,674 Orange Unified School District Benefit Obligations 56,260,000 1.335 751,071 Anaheim Union High School District Certificates of Participation 28,320,000 0.080 22,656 Huntington Beach Union High School District Certificates of Participation 51,436,090 1.274 655,296 Magnolia School District General Fund Obligations 11,874,403 0.234 27,786 Westminster School District Certificates of Participation 24,475,000 7.140 1,747,515 City of Garden Grove General Fund Obligations 140,000,000 100.000 152,523,190 TOTAL DIRECT AND OVERLAPPING GENERAL FUND DEBT 168,613,793 OVERLAPPING TAX INCREMENT DEBT (Successor Agencies): 41,135,000 100% 41,135,000 TOTAL DIRECT DEBT 152,523,190
TOTAL OVERLAPPING DEBT 462,207,078
COMBINED TOTAL DEBT 614,730,268 (2)
(1) The percentage of overlapping debt applicable to the city is estimated using taxable assessed property value. Applicable percentages were estimated by determining the portion of the overlapping district's assessed value that is within the boundaries of the city divided by the district's total taxable assessed value.
(2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non-bonded lease obligations. Qualified Zone Academy Bonds are included based on principal due at maturity.
Ratios to 2023-24 Assessed Valuation:
Total Overlapping Tax and Assessment Debt 1.87%
1 Total Direct Debt
152,523,190
0.71%
2 Combined Total Debt
2.84%
Ratios to Redevelopment Successor Agencies Incremental Valuation 4,712,720,513 Total Overlapping Tax Increment Debt 0.87%
Source: California Municipal Statistics, Inc. / MuniServices, LLC
CITY OF GARDEN GROVE
DIRECT AND OVERLAPPING BONDS AND DEBT
JUNE 30, 2024
165
258
SCHEDULE XIII
CITY OF GARDEN GROVE
LEGAL DEBT MARGIN INFORMATION
LAST TEN FISCAL YEARS
Fiscal Year
2015 2016 2017 2018
Assessed valuation 10,895,219$ 10,803,156$ 12,591,500$ 13,209,728$ Conversion percentage 25% 25% 25% 25%
Adjusted assessed valuation 2,723,805 2,700,789 3,147,875 3,302,432 Debt limit percentage 15% 15% 15% 15%
Debt limit 408,571 405,118 472,181 495,365 Total net debt applicable to limit:
General obligation bonds - - - - Legal debt margin 408,571$ 405,118$ 472,181$ 495,365$ Total debt applicable to the limit
as a percentage of debt limit 0.0% 0.0% 0.0% 0.0%
1 Source: Orange County Assessor's Office/HdL Coren & Cone
The Government Code of the State of California provides for a legal debt limit of 15% of gross assessed valuation. However, this provision was enacted when assessed valuation was based upon 25% of market value. Effective with the 1981-82 fiscal year, each parcel is now assessed at 100% of market value (as of the most recent change in ownership for that parcel). The computations shown above reflect a conversion of assessed valuation data for each fiscal year from the current full valuation perspective to the 25% level that was in effect at the time that the legal debt margin was enacted by the State of California for local governments located within the state.
166
259
Fiscal Year
2019 2020 2021 2022 2023 2024
12,637,323$ 13,233,355$ 14,420,228$ 15,349,578$ 16,395,106$ 17,201,767$ 25% 25% 25% 25% 25% 25%
3,159,331 3,308,339 3,605,057 3,837,395 4,098,777 4,300,442 15% 15% 15% 15% 15% 15%
473,900 496,251 540,759 575,609 614,816 645,066 - - - - - - 473,900$ 496,251$ 540,759$ 575,609$ 614,816$ 645,066$
0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
167
260
Resources
Fiscal Gross Available for
RevenueYear Expenses 1 Debt Service Principal Interest Total Coverage 2015 33,573,575 25,146,241 8,427,334 1,430,000 1,225,677 2,655,677 3.17 2016 29,519,804 25,781,906 3,737,898 1,490,000 1,165,202 2,655,202 1.41
2017 32,345,481 26,404,580 5,940,901 1,515,000 861,491 2,376,491 2.50 2018 35,946,867 30,301,866 5,645,001 1,570,000 817,465 2,387,465 2.36 2019 37,832,009 28,891,265 8,940,744 1,600,000 775,290 2,375,290 3.76 2020 39,490,046 31,574,927 7,915,119 1,655,000 724,740 2,379,740 3.33 2021 40,621,520 31,439,166 9,182,354 1,705,000 899,621 2,604,621 3.53 2022 43,256,322 31,628,164 11,628,158 955,000 894,825 1,849,825 6.29 2023 40,911,604 28,154,739 12,756,865 1,405,000 875,425 2,280,425 5.59 2024 44,200,824 31,259,903 12,940,921 1,820,000 821,675 2,641,675 4.90 Source: Finance Department, City of Garden Grove
1 2
Debt Service Requirement
SCHEDULE XIV
CITY OF GARDEN GROVE
PLEDGED-REVENUE COVERAGE
LAST TEN FISCAL YEARS
Water Revenue Bonds
In FY 16/17 the City refunded 2006 Sewer COP with the issuance of the Garden Grove Sanity District, Revenue Refunding bonds, Series 2017.
The City entered into a sewer revenue bond agreement on April 1, 2006; the first year's interest was prorated from bond commencement. The debt amortization started in FY09-10 with an annual principal repayment on June 15.
Total operating expense less depreciation and amortization. 168
261
SCHEDULE XIV
CITY OF GARDEN GROVE
PLEDGED-REVENUE COVERAGE (Continued)
LAST TEN FISCAL YEARS
Resources
Fiscal Gross Available for
Year Revenue Expenses Debt Service Principal 2 Interest 2 Total Coverage 2015 10,242,532 3,814,961 6,427,571 535,000 927,941 1,462,941 4.39 2016 10,521,214 3,880,996 6,640,218 560,000 906,541 1,466,541 4.53
2017 10,356,150 4,424,966 5,931,184 580,000 884,141 1,464,141 4.05 2018 10,641,504 5,009,287 5,632,217 520,000 676,575 1,196,575 4.71 2019 11,951,932 5,152,423 6,799,509 540,000 660,975 1,200,975 5.66 2020 12,673,629 4,993,491 7,680,138 555,000 639,375 1,194,375 6.43 2021 10,868,065 4,113,918 6,754,147 590,000 611,625 1,201,625 5.62 2022 12,025,031 5,958,254 6,066,777 615,000 582,125 1,197,125 5.07 2023 11,845,037 4,599,376 7,245,661 645,000 551,375 1,196,375 6.06 2024 11,968,047 5,662,538 6,305,509 680,000 519,125 1,199,125 5.26 (Continued)
Sewer Revenue Bond
Debt Service Requirement
169
262
SCHEDULE XIV
CITY OF GARDEN GROVE
PLEDGED-REVENUE COVERAGE (Continued)
LAST TEN FISCAL YEARS
Fiscal Tax
Year Increment 1 Principal Interest Total Coverage
2015 20,526,084 2,195,000 2,130,406 4,325,406 4.75 2016 15,837,862 2,360,000 1,526,300 3,886,300 4.08 2017 18,484,197 2,430,000 1,454,450 3,884,450 4.76 2018 17,693,119 2,505,000 1,380,425 3,885,425 4.55 2019 17,445,206 2,380,000 1,295,250 3,675,250 4.75 2020 18,868,786 2,685,000 1,193,950 3,878,950 4.86 2021 11,170,386 2,795,000 1,084,350 3,879,350 2.88 2022 3,301,040 2,905,000 514,225 3,419,225 0.97 2023 1,126,186 3,015,000 836,875 3,851,875 0.29 2024 8,294,158 3,170,000 682,250 3,852,250 2.15 Source: Finance Department, City of Garden Grove
2014 Tax Allocation Refunding Bonds
Debt Service Requirement
1 Due to the dissolution of the Redevelopment Agency in February 2012, the Tax Increment is now deposited in the City of Garden Grove RPTTF project area. 170
263
SCHEDULE XIV
CITY OF GARDEN GROVE
PLEDGED-REVENUE COVERAGE (Continued)
LAST TEN FISCAL YEARS
Fiscal Tax
Year Increment 1 Principal Interest Total Coverage
2015 -
2016 -
2017 18,484,197 1,716,504 1,716,504 10.77
2018 17,693,119 1,652,250 1,652,250 10.71
2019 17,445,206 1,652,250 1,652,250 10.56
2020 18,868,786 1,652,250 1,652,250 11.42
2021 11,170,386 1,900,000 1,614,250 3,514,250 3.18 2022 3,301,040 1,975,000 1,536,750 3,511,750 0.94 2023 1,126,186 2,055,000 1,445,875 3,500,875 0.32 2024 8,294,158 2,160,000 1,340,500 3,500,500 2.37 Source: Finance Department, City of Garden Grove
2016 Tax Allocation Bonds
Debt Service Requirement
1 Due to the dissolution of the Redevelopment Agency in February 2012, the Tax Increment is now deposited in the City of Garden Grove RPTTF project area. 171
264
Per
Personal Capita
Fiscal Income Personal Unemployment
Year Population (in thousands) Income Rate
2015 174,774 4,924,023 28,307 4.2% 2016 177,303 4,999,605 28,606 4.4% 2017 176,277 5,087,579 28,694 4.8% 2018 176,896 5,243,712 29,747 3.4% 2019 175,155 5,490,131 31,344 3.3% 2020 174,801 5,763,401 32,971 14.9% 2021 172,476 5,972,287 34,627 7.7% 2022 170,526 6,275,992 36,804 3.6% 2023 171,183 6,723,012 39,274 3.6% 2024 171,024 6,985,438 40,845 4.3% Source: State Employment Development Department
California Department of Finance
Center for Demographic Research / Fullerton.edu / Ycharts.com
SCHEDULE XV
CITY OF GARDEN GROVE
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN CALENDAR YEARS
172
265
SCHEDULE XVI
CITY OF GARDEN GROVE
PRINCIPAL EMPLOYERS
CURRENT YEAR AND TEN YEARS AGO
Percent of Percent of
Number of Total Number of Total
Employer Employees Employment Employees Employment
Great Wolf Lodge Southern California 700 0.83%
Air Industries Company 625 0.74% 681 0.76%
Garden Grove Hospital Medical Center 516 0.61%
Hyatt Regency Orange County 424 0.50% 350 0.39%
GKN Aerospace Transparency Systems Inc 409 0.48% 335 0.37% Safran Cabin Inc 350 0.41%
Costco #126 326 0.38%
Full Clip 310 0.37%
Walmart #4171 290 0.34% 412 0.46%
Saint Gobain Performance Plastics Corp. 226 0.27% 363 0.40% American Apparel Knit & Dye 535 0.60%
Prime Healthcare Services 516 0.58%
Office Max, Inc. 360 0.40%
Kaiser Foundation Health 317 0.35%
NBTY Acquisition, LLC 298 0.33%
Total employment as used above represents the total employment of all employers located within City limits.
Source: Business Tax Division, City of Garden Grove
2024 2015
173
266
Department 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 1744333335302929109City Manager
30223137373537375358Community Development
13411597106116157153146147151Community Services
31--------Economic Development
34343133363738384140Finance
0 **- *- *- *103106106111111Fire
17191718202020201919Information Technology
1111111112121111109Personnel
272264260281282263293289272273Police
166153150176184186198198196194Public Works
Total 864 859 874 885 843 722 695 630 662 712 Full time employees 633 632 640 641 642 560 538 510 519 526 186143120157162201244234227231Part time employees
Source: Budget Division, City of Garden Grove
* On August 16, 2019 Garden Grove Fire Department transitioned to the Orange County Fire Authority (OCFA).
SCHEDULE XVII
CITY OF GARDEN GROVE
FULL-TIME AND PART-TIME CITY EMPLOYEES
BY DEPARTMENT
LAST TEN FISCAL YEARS
174
267
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Police:
Arrests Report 6,478 5,468 6,358 7,476 6,112 5,436 4,439 4,921 5,250 6,134 Traffic citations issued 9,604 9,890 9,114 11,114 8,598 7,403 3,921 6,264 6,575 3,797 Fire:
13,09215,297 15,14215,13414,62726,785Number of emergency calls * 13,557 * 14,936 * 15,70615,476 * Public Right-of-Way:
Parking citations issued 28,017 25,500 27,127 33,797 34,508 28,430 45,931 35,746 34,520 38,317 Permits issued 605 546 482 566 563 560 700 757 665 563
Community Services:
Number of recreation classes 2,416 1,918 1,947 1,701 2,057 1,932 977 1,038 1,590 2,082 Housing vouchers 2,337 2,337 2,337 2,337 2,337 2,337 2,337 2,337 2,325 2,362 Community Planning and Development
Building permits issued 2,041 2,259 2,233 3,066 3,986 3,954 4,723 5,133 6,488 6,262 Water:
Number of accounts 33,834 33,870 33,892 33,893 33,911 34,054 34,150 34,292 34,376 34,550 Average daily consumption 20,391 17,563 17,946 20,249 18,298 18,038 18,669 17,815 16,927 16,784 (thousands of gallons)
Solid Waste Disposal:
Number of accounts 33,658 33,968 33,966 33,786 33,700 33,542 33,213 33,720 33,853 33,105 Drainage:
Channels cleaned (miles) 5 5 5 5 5 5 5 5 5 5
Municipal Support:
Passports issued 1 247 N/A N/A N/A N/A N/A N/A N/A N/A N/A Source: City of Garden Grove
1 Passport services discontinued as of July 1, 2015.
* On August 16, 2019 Garden Grove Fire Department transitioned to the Orange County Fire Authority (OCFA).
SCHEDULE XVIII
CITY OF GARDEN GROVE
OPERATING INDICATORS
BY FUNCTION
LAST TEN FISCAL YEARS
175
268
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Police:
Stations 1 1 1 1 1 1 1 1 1 1 Fire:
Fire stations 7 7 7 7 7 7 7 7 7 7 * Public Right-of-Way:
Streets (miles) 305 305 305 305 305 305 305 305 305 305 Community Services:
Parks 16 19 19 20 19 19 19 19 19 19 Park acreage 142 137 137 140 124 124 124 124 124 124 Community centers 2 2 2 2 9 9 9 9 9 9 Water:
Water mains (miles) 433 433 433 433 433 433 433 433 433 433 Number of connections 34,294 34,313 34,336 34,347 34,380 34,459 34,447 34,447 34,689 34,903 Sewage Collection:
Sanitary sewers (miles) 320 320 320 320 320 320 320 320 320 320 Drainage:
Storm drains (miles) 35 35 35 35 35 35 35 35 35 35 Source: City of Garden Grove
* On August 16, 2019 Garden Grove Fire Department transitioned to the Orange County Fire Authority (OCFA). However, the City retains the ownership of the Fire stations and OCFA leases for $1 per year for each facility.
SCHEDULE XIX
CITY OF GARDEN GROVE
CAPITAL ASSETS STATISTICS
BY FUNCTION
LAST TEN FISCAL YEARS
176
269
INDEPENDENT ACCOUNTANT’S REPORT
The Honorable Mayor and City Council
City of Garden Grove, California
We have performed the procedures enumerated below on the City of Garden Grove, California (City) appropriations limit worksheets for compliance with the requirements of Section 1.5 of Article XIIIB of the California Constitution for the year ended June 30, 2024.
The City is responsible for compliance with Section 1.5 of Article XIIIB of the California Constitution.
The City has agreed to and acknowledged that these procedures are appropriate to meet the intended purpose of evaluating compliance with the requirements of Section 1.5 of Article XIIIB of the California Constitution and the League of California Cities publication entitled Article XIIIB Appropriations Limitation Uniform Guidelines for the year ended June 30, 2024. This report may not be suitable for any other purpose. The procedures performed may not address all the items of interest to a user of this report and may not meet the needs of all users of this report and, as such, users are responsible for determining whether the procedures performed are appropriate for their purposes.
The procedures and the associated findings are as follows:
1. We obtained the worksheets referred to above and compared the limit and annual adjustment factors included in those worksheets to the limit and annual adjustment factors that were adopted by resolution of the City Council. We also compared the population and inflation options included in the aforementioned worksheets to those that were selected by a recorded vote.
Results: There was a variance between the Council approved appropriations limit for fiscal year 2024 (Resolution No. 9804-23) and our recalculated appropriation limitation for fiscal year 2024. This was caused by a difference in the Growth Factor used to adjust for the current year’s limit. The difference is the current year limit is detailed below:
270
The Honorable Mayor and City Council
City of Garden Grove, California
2. We recalculated the mathematical computations reflected in the City’s worksheets.
Results: No exceptions were noted as a result of our procedures.
3. We compared the current year information used to determine the current year limit and agreed it to worksheets prepared by the City and to information provided by the State Department of Finance.
Results: No exceptions were noted as a result of our procedures.
4. We compared the amount of the prior year appropriations limit presented in the worksheets to the amount adopted by the City Council for the prior year.
Results: No exceptions were noted as a result of our procedures.
We were engaged by the City to perform this agreed-upon procedures engagement and conducted our engagement in accordance with standards established by the American Institute of Certified Public Accountants. We were not engaged to and did not conduct an examination or review, the objective of which would be the expression of an opinion or conclusion, respectively on the worksheets referred to above. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you. No procedures have been performed with respect to the determination of the appropriation limit for the base year, as defined by the League publication entitled Article XIIIB Appropriations Limitation Uniform Guidelines.
We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements related to our agreed-upon procedures engagement.
Appropriations limit basis as approved by City Council 181,575,583$ Calculation of factor for FY24 1.0340 City Council approved limit for fiscal year 2024 187,749,153$ Appropriations limit from fiscal year 2023 181,575,583$ *Calculation of factor for FY24 1.0443 Limit for fiscal year 2024 189,618,575$ Variance 1,869,422$ * Derived from the fiscal year 2023 limit. Used to adjust for the fiscal year 2024 limit. 271