Agenda packet — Gardena City Council, December 12, 2023 (part 2 of 11)

CITY OF GARDENA CLASS SPECIFICATION
Gardena, CA December 2023

DEPUTY CITY MANAGER
(Job Description)
Description
Under direction of the City Manager, the Deputy City Manager will be responsible to lead and manage a current City Department; lead and assist in the development of City programs and policies; approve and advance special projects requiring collaboration with staff at all levels within the City; and serve as acting City Manager as required.

Representative Duties
 Serve as project manager for special projects and coordinate interdepartmental efforts for achieving the City Council’s policy directions and strategic goals;
 Work collaboratively with the City Manager, Department Directors, Managers and City Council to promote and measure progress towards the City’s strategic goals;
 Play a leadership and interdepartmental coordinating role and serve as the project manager for internal and external facing City strategic goals;
 Prepare special studies and reports relating to any phase of municipal government operation;  Will direct, plan, maintain, and oversee the operations, staffing, budget, and planning of a City Department;  Serve as Acting City Manager when the City Manager is unavailable;  Attend and participate in professional group meetings; maintain awareness of new trends and developments in the field of public administration; incorporate new developments as appropriate.

Qualifications
Graduation from an accredited college or university with a Bachelor’s degree in Public or Business Administration or a related field. Seven (7) years of progressively responsible professional experience in municipal administration.

A Master’s degree in Public or Business Administration or a related field is desirable and may be substituted for one year of experience.

Knowledge of:
 Thorough knowledge of the principals and practices of public administration and local government;  Applicable Federal, State, and local laws, rules and regulations;  Working knowledge of all local government operations and budgeting;  Project management techniques and procedures;
 Internal and external facing strategic program development, implementation and policymaker/community engagement;
 Principles and practices of supervision and professional development Ability to:
 Deal effectively with all City officials, Department directors, Legislative Officials/Staff and the general public;  Manage multiple and complex projects and initiatives related to the City’s strategic goals;  Communicate effectively, both orally and in writing;
 Facilitate interdepartmental projects and initiatives;  Coordinate policy analysis, research, and outreach related to City projects and programs;  Establish and maintain cooperative working relationships with all City staff and elected officials;  Provide thoughtful, responsive and timely service to internal and external customers;  Provide effective leadership
Physical Demands and Working Conditions
Work is performed primarily in a standard office setting with frequent interruptions, also some travel to different sites; incumbent may be required to work extended hours including evenings, weekends, and holidays.

Page 2 of 2 ends

Primary functions require sufficient physical ability and mobility to work in an office setting; to stand or sit for prolonged periods of time; to occasionally stoop, bend, kneel, crouch, reach and twist; to lift, carry, push and/or pull light to moderate amounts of weight; to operate office equipment requiring repetitive hand movement and fine coordination including use of a computer keyboard; and to verbally communicate to exchange information.

License
Must have and maintain a valid California Class C Driver’s License.

Special Conditions
At-Will Appointment
Conflict of Interest Statement
City of Gardena
Gardena City Council Meeting

AGENDA REPORT SUMMARY
Agenda Item No. 8.H
Section: CONSENT CALENDAR
Meeting Date: December 12,
2023
TO: THE HONORABLE MAYOR AND MEMBERS OF THE GARDENA CITY COUNCIL AGENDA TITLE: SECOND READING AND ADOPTION OF ORDINANCE NO. 1859 , Amending Section 2.66.090 (Compensation) of Chapter 2.66 (Gardena Economic Business Advisory Commission) and Section 2.68.110 (Compensation) of Chapter 2.68 (Gardena Beautification Commission) of Title 2 (Administration and Personnel) of the Gardena Municipal Code
CONTACT: CITY MANAGER
COUNCIL ACTION REQUIRED:

RECOMMENDATION AND STAFF SUMMARY:

During the October 10, 2023, City Council meeting, a directive was given to staff by Councilwoman Francis and seconded by Councilmember Love for staff to prepare an Ordinance to allow for the Gardena Economic Business Advisory Commission (GEBAC) and Gardena Beautification Commission to receive compensation similar to other City Commissions.

Currently, members of the Human Services, Recreation and Parks, and Senior Citizens Commissions as well as Rent Mediation Board are compensated $50.00 per month, if in attendance at their regularly scheduled monthly meeting. Members of the Youth Commission are compensated $25.00 per month if in attendance at their regularly scheduled monthly meeting and members of the Planning Commission are compensated $50.00 per regularly scheduled meeting attended. Members of all the previously mentioned Commissions/Boards may also be reimbursed for any reasonable and necessary expenses incurred by them in their performance of Commission duties, provided such expenses have been authorized in the City Council's adopted budget.

As it pertains to GEBAC, proposed Ordinance No. 1859 amends the Gardena Municipal Code to allow for members of GEBAC to be compensated in an amount established by resolution of the council. Resolution No. 6646 would establish that members of GEBAC are compensated $50.00 per month, if in attendance at their regularly scheduled monthly meeting. GEBAC members may also be reimbursed for any reasonable and necessary expenses incurred by them in their performance of Commission duties, provided such expenses have been authorized in the City Council's adopted budget.

With regards to Gardena Beautification Commission, proposed Ordinance No. 1859 amends the Gardena Municipal Code to allow for members of Gardena Beautification Commission, with the exception of any member of the Gardena City Council, to be compensated in an amount established by resolution of the council. Pursuant to Government Code Section 36516 unless specifically authorized by state law, a city council may not enact an ordinance to pay itself a salary for serving on other boards and commissions. Because there is no state law that allows for the Gardena City Council to pay itself to serve on the Gardena Beautification Commission, no compensation may be received by any councilmember that is a member of the Gardena Beautification Commission. Resolution No. 6646 would establish that members of the Gardena Beautification Commission are compensated $50.00 per month, if in attendance at their regularly scheduled monthly meeting, with the exception of any member of the Gardena City Council. Gardena Beautification Commission members may also be reimbursed for any reasonable and necessary expenses incurred by them in their performance of Commission duties, provided such expenses have been authorized in the City Council's adopted budget.

Ordinance No. 1859 was introduced at the November 14, 2023, City Council meeting by Mayor Pro Tem Henderson.

Staff respectfully recommends that the City Council Adopt Ordinance No. 1859.

FINANCIAL IMPACT/COST:

Gardena Economic Business Advisory Commission: $3,300 per year from General Fund.

Gardena Beautification Commission: $4,800 per year from General Fund.

ATTACHMENTS:

ORDINANCE No. 1859.rtf.pdf
APPROVED:
___________________________________
Clint Osorio, City Manager
1 ORDINANCE NO. 1859

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY

OF GARDENA, CALIFORNIA, AMENDING SECTION

2.66.090 (COMPENSATION) OF CHAPTER 2.66
(GARDENA ECONOMIC BUSINESS ADVISORY
COMMISSION) AND SECTION 2.68.110
(COMPENSATION) OF CHAPTER 2.68 (GARDENA
BEAUTIFICATION COMMISSION) OF TITLE 2
(ADMINISTRATION AND PERSONNEL) OF THE

GARDENA MUNICIPAL CODE

THE CITY COUNCIL OF THE CITY OF GARDENA, CALIFORNIA, DOES HEREBY ORDAIN, AS FOLLOWS:

SECTION 1. Section 2.66.90 of the Gardena Municipal Code is amended to read, as follows:

2.66.090 Compensation.

The members of the Gardena Economic Business Advisory Commission shall be compensated in an amount established by resolution of the council. Members of the GEBAC shall receive no compensation. However, the members shall be reimbursed for any expense incurred in the performance of their duties.

SECTION 2. Section 2.68.110 of the Gardena Municipal Code is amended to read, as follows:

2.68.110 Compensation.

The members of the Gardena Beautification Commission shall be compensated in an amount established by resolution of the council; however, no member of the Gardena City Council shall be compensated for serving on the Gardena Beautification Commission. Members of the Gardena beautification commission shall receive no compensation. However, the members shall be reimbursed for any expense incurred in the performance of their duties.

SECTION 3. Severability. If any section, subsection, subdivision, paragraph, sentence, clause or phrase of this ordinance, or any part thereof is for any reason held to be unconstitutional, such decision shall not affect the validity of the remaining portion of this ordinance or any part thereof. The City Council hereby declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause or phrase thereof, irrespective of the fact that any one or more section, subsection, subdivision, paragraph, sentence, clause or phrase be declared unconstitutional.

DocuSign Envelope ID: B8EBFA9E-93AC-482C-AB81-25A8AD455541 ORDINANCE NO. 1859
2 SECTION 4. Certification. The City Clerk shall certify the passage of this ordinance and shall cause the same to be entered in the book of original ordinances of said City; shall make a minute passage and adoption thereof in the records of the meeting at which time the same is passed and adopted; and shall, within fifteen (15) days after the passage and adoption thereof, cause the same to be published as required by law, in a publication of general circulation.

SECTION 5. Effective Date. This ordinance shall not become effective or be in force until thirty (30) days from and after the date of its adoption.

Passed, approved, and adopted this day of , 2023.

TASHA CERDA, Mayor
ATTEST:

MINA SEMENZA, City Clerk
APPROVED AS TO FORM:

CARMEN VASQUEZ, City Attorney
DocuSign Envelope ID: B8EBFA9E-93AC-482C-AB81-25A8AD455541 City of Gardena
Gardena City Council Meeting

AGENDA REPORT SUMMARY
Agenda Item No. 8.I
Section: CONSENT CALENDAR
Meeting Date: December 12,
2023
TO: THE HONORABLE MAYOR AND MEMBERS OF THE GARDENA CITY COUNCIL AGENDA TITLE: Acceptance and Notice of Completion for the Traffic Detour and Temporary Pavement for UPRR Improvements Phase of the Artesia Boulevard Arterial Improvement Project from Western Avenue to Vermont Avenue, JN 935.

CONTACT: PUBLIC WORKS
COUNCIL ACTION REQUIRED:

RECOMMENDATION AND STAFF SUMMARY:

Staff respectfully recommends that the City Council accept the work performed by Ruiz Concrete and Paving, Inc. (RCPI) and order the recordation of the Notice of Completion for the Traffic Detour and Temporary Pavement for UPRR Improvements Phase of the Artesia Boulevard Arterial Improvement Project from Western Avenue to Vermont Avenue, JN 935.

This project implemented a traffic detour plan during the Railroad rehabilitation work and paved the adjacent roadway to allow for a transition to the modified railroad tracks.

Sufficient funds to complete this project were appropriated by the Council during the Fiscal Year 2022-2023 Capital Improvement Budget.

FINANCIAL IMPACT/COST:

Amount of Expense: $191,162.50
Source of Funds: Project Budget: $2,523,000 (Measure R Highway) and $1,650,000 (Prop C).

ATTACHMENTS:

NOC__UPRRRehabPavingPH1_JN935.pdf
APPROVED:
___________________________________
Clint Osorio, City Manager

RECORDING REQUEST BY AND MAIL TO:

Mina Semenza, City Clerk
City of Gardena
1700 W. 162nd Street
Gardena, CA 90247

SPACE ABOVE THIS LINE RESERVED FOR RECORDER'S USE

NOTICE OF COMPLETION
NOTICE IS HEREBY GIVEN, that:

1. The undersigned is the duly authorized representative of the City of Gardena, a Municipal Corporation of the State of California located within the County of Los Angeles in said State at 1700 West 162 Street, Gardena, California 90247.

2. That on the 3 day of April 2023 the City Council of said City entered into contract with Ruiz Concrete and Paving, Inc. whose address is 344 Temple Ave., Long Beach, CA 90804 for the improvement titled JN 935 Phase1 - UPRR Railroad Rehabilitation and Paving in accordance with City of Gardena Plans and Specifications.

3. That all of the work and improvement was located at Artesia Blvd. Railroad Crossing in said City. The owner of the location is the City of Gardena.

4. That all of the work and improvement contemplated in and under said contract was substantially completed on Oct 16, 2023 .

5. That the City Council formally accepted this work and improvement on December 12, 2023 .

The undersigned, being first duly sworn, states: That he is the duly authorized representative of the City of Gardena, the political subdivision of the State of California which conducted the proceedings for the improvement titled JN 935 Phase1 - UPRR Railroad Rehabilitation and Paving in said City, that he has read the foregoing "Notice of Completion" and knows the facts recited therein are true.

IN WITNESS THEREOF, I have hereunto subscribed my name as the duly authorized representative of said City this day of 2023.

City of Gardena
William Mendoza
City of Gardena
Gardena City Council Meeting

AGENDA REPORT SUMMARY
Agenda Item No. 8.J
Section: CONSENT CALENDAR
Meeting Date: December 12,
2023
TO: THE HONORABLE MAYOR AND MEMBERS OF THE GARDENA CITY COUNCIL AGENDA TITLE: Approve Purchase of Mobile Bus Chargers for $157,914 and Authorize a Program Total of $173,705
CONTACT: TRANSPORTATION
COUNCIL ACTION REQUIRED:

RECOMMENDATION AND STAFF SUMMARY:

In March of 2022, City Council approved the purchase of seven zero-emission, battery electric buses which are scheduled to arrive in early 2024. In November 2023, Council also approved the purchase of seven depot chargers which will be a part of the overall electric charging, solar and battery storage project that is currently in the design phase.

In order to provide temporary charging while the charging infrastructure is being constructed, GTrans wishes to purchase three mobile chargers. These mobile chargers will also be used in our maintenance bays to charge electric buses and vehicles as needed during routine repairs or preventative maintenance, as well as for a general backup. GTrans has selected the Heliox 50kW charger as the best option for our operation. This particular unit is used by a multitude of transit agencies across the US, including at LA Metro. The chargers can be used for our buses, vans and our electric service vehicles. While not intended to serve as a replacement for depot fast charging for buses in regular service, these mobile chargers will allow us to immediately deploy and rotate our new electric buses in service until the charging station is ready for operation, in early 2025.

These Buy America compliant Heliox 50kW chargers are available through the State of Virginia Cooperative from Gillig, at a cost of $47,200 per charger for a total of $157,914, inclusive of freight and sales tax. The mobile chargers will come with CCS-1 connectors and a two-year warranty. The FTA encourages grant recipients to procure goods and services jointly with other recipients or participate in purchasing cooperatives to obtain better pricing through volume purchases. The chargers are available now, and will be ready to use with the electric buses arriving in early 2024. GTrans also wishes to include a 10 percent contingency, or $15,791, to account for any unforeseen changes, only to be approved in advance by GTrans staff.

Therefore staff recommends that Council authorize GTrans to purchase Heliox 50kW chargers, related components, two-year warranty from Gillig for a total $157,914, and a program total of $173,705 which includes a 10 percent contingency. Staff also recommends authorizing the City Manager, or his designee to sign any subsequent documents required by the purchase.

FINANCIAL IMPACT/COST:

GTrans has local, state and federal capital funds available and designated for the purchase of these chargers, and included in FY24 capital budget previously approved by the City Council.

There is no impact to the General Fund.

ATTACHMENTS:

Gardena, CA (Heliox, 50kW, 120123RZ2).pdf
Heliox Mobile 50 UL Leaflet - Digital.pdf
Commonwealth of Virginia Letter to GTrans.pdf
APPROVED:
___________________________________
Clint Osorio, City Manager

CHARGER EQUIPMENT
December 1, 2023
Prepared By: Ryan Zulewski
451 Discovery Drive, Livermore, CA 94551 | www.gillig.com | 510.264.5000 Dana Pynn
Transit Administrative Officer
City of Gardena GTrans
13999 S. Western Avenue
Gardena, CA 90249
NOTE: Purchasing via State of Virginia Contract; Contract Code CTR010076 for IFB #6447 Dear Dana,
GILLIG is pleased to submit the following pricing for Heliox equipment and associated services for use with your GILLIG Battery Electric buses. This pricing has been assembled in coordination with Heliox and represents our proposed equipment options based on the scoping information you have provided to date.

Charging Equipment Quantity Unit Price Total
Hardware
Heliox 50kW Charger SP
• CCS-1 Connector
• FTA Buy-America Compliant 3 47,200 141,600
Warranty
Standard 2 Year Warranty Included Included
Software
Services & Other
Estimated Freight 1,800 1,800
Hardware $141,600
Warranty $0
Software $0
Services & Other $0
Freight $1,800
Estimated Sales Tax $14,514
GRAND TOTAL $157,914
The availability of charging equipment may be affected by production lead times, completion of independent safety certifications, and design development. GILLIG does not guarantee the availability of charging equipment.

GILLIG makes no warranty of any kind whatsoever, expressed, or implied; and all implied warranties of merchantability and fitness for a particular purpose which exceed the aforesaid obligation are hereby disclaimed by GILLIG and excluded from any agreement.

Payment to GILLIG is due upon shipment of the equipment described herein.

Quote is valid for 30 days unless extended by an authorized GILLIG representative.

Mobile
50 kW
Simple. Durable. Portable.

With durable and portable design, the
Heliox Mobile DC charger is built with the
daily activities of service and maintenance
personnel in mind. And with no fixed
installation required, you’ll save thousands
on infrastructure costs as well.

Perfect for getting started with EV or
scaling up. Simply connect to a 480V AC
wall socket and start charging.

With a compact design and no fixed
installation, Mobile 50 can be moved to
charge anywhere it can be plugged in.

Manufactured and tested in the United States
ensuring Buy America Act compliance.

All product designs and specifications are subject to change without notice Mobile 50 kW
Durable: A strong metal casing and wheel system means Mobile 50 kW stands up to daily wear and tear in ways other portable chargers simply cannot. And with a NEMA 3R rated enclosure, Mobile can be safely operated both indoors and outside.

Future-proof: The Mobile 50 kW is the perfect EV charging companion, now and in the future. No matter what direction your business is headed, this charger will always be by your side, providing reliable charging when and where you need it.

Charging standard: SAE J1772 (CCS type-1)
Communication standard: DIN70121 / ISO15118-1/2/3
Compliance and safety: UL 2202 / UL 2231
Power factor above 50% rated: >0.98
Peak efficiency: 96.2%
Dielectric withstand: 3000 V
Network cellular: 4G modem
Back office: OCPP 1.6J
Temperature range: -4 to 104 °F
Operational noise level: <55 dB(A) @ 40”
System weight: 270 lbs.

Dimensions: H: 36“, W: 20“, D 20“
Protection NEMA 3R
Environment operating: ISO 12944: C4 H
General
Input
Output

96.2%
Efficiency
www.heliox-energy.com
[email protected]
Input connections, Frequency: 3P + G, 47-63 Hz
Input current limit values: 15 A / 25 A / Max. (user selected) Full load / idle input power: 54 kVA / 15 VA
Input line-line voltage range: 480 V AC +/- 10%, 60 Hz
Input max. AC phase current: 65 A, inrush current limited Output DC voltage range: 100 - 1000 V
Rated DC output power: 50 kW
Output power limits: 11 kW (@ 15 A AC input current)
19 kW (@ 25 A AC input current)
50 kW (@ Max. input current)
Maximum DC output current: 80 A
One charger, three settings
Raise or lower your charger input with the turn of a
dial, enabling you to activate sessions in situations
where power supply may be limited.

Actual power maybe impacted due to vehicle parameters
DC Voltage (V)
DC Current (A)
800
400
1000
200
0 0 20 40 60 80
600
V max
I min I max
V min
P max
100%
50%
25%
Consolidated Laboratory • Engineering & Buildings • Fleet • Graphics • Mail • Purchases & Supply • Real Estate • Surplus COMMONWEALTH of VIRGINIA
Department of General Services
Division of Purchases and Supply
J. Peter Stamps, CPPO, VCM, VCO
Director P. O. Box 1199
Richmond, VA 23218-1199
Kelly J. Langley, CPPO, CPPB, VCM, VCO Voice: (804) 786-3842 Deputy Director
December 4, 2023
Rachel Yoo
Transit Administrative Supervisor
City of Gardena GTrans
13999 S. Western Ave
Gardena, CA 90249
Reference: CTR010076 Vehicle Low Floor Transit Buses, Commuter Coach Buses, and Trolleys, Heavy Duty, 12 Year (29 ft. – 60 ft. sizes) – Gillig LLC
The Commonwealth of Virginia’s contract CTR010076 with Gillig LLC, was competitively bid and awarded. The provisions for authorization and consent for GTrans, City of Gardena to utilize is incorporated by reference. Public bodies outside of the Commonwealth of Virginia are not required to obtain approval or acknowledgement from the Commonwealth of Virginia to referenced contract.

Pamela Copeland, VCO, VCARM
Statewide Sourcing and Contracting Officer
Department of General Services
Division of Purchases and Supply
1111 East Broad Street
Patrick Henry Bldg., 6th Floor
Richmond VA 23219
804-786-4068

PLANNING AND ENVIRONMENTAL

QUALITY COMMISSION
Regular PEQC Meeting Notice and Agenda
Website: www.cityofgardena.org
Tuesday, December 5, 2023 – 7:00 PM
1700 W. 162nd Street, Gardena, California

REPORT OF ACTIONS

6. OTHER BUSINESS

6.A GENERAL PLAN CONFORMITY #2-23
General Plan Conformity Determination for the Purchase of Two Parcels Totaling Approximately 19,200 sf Located at 1112 W. Gardena Blvd. (APNs:
6111-004-032, 033)
PC Conformance Report-1112 Gardena Blvd.pdf
PC Resolution No. 21-23 1112 Gardena.pdf
Commission Action: The Planning Commission approved Resolution No. PC 21- 23, by a vote of 5-0, setting forth the Commission’s General Plan conformity report in accordance with Government Code section 6540.2.

6.B GENERAL PAN CONFORMITY #3-23
General Plan Conformity Determination for the Purchase of a Parcel Totaling Approximately 5,500 sf Located at 15016 Nader Place, also known as 15016 Daphne Ave (APNs: 4064-023-024)
PC Conformance Report-Nader's Place.pdf
PC Resolution No. 22-23 15016 Naders Place.pdf
Commission Action: The Planning Commission approved Resolution No. PC 22- 23, by a vote of 5-0, setting forth the Commission’s General Plan conformity report in accordance with Government Code section 6540.2.

City of Gardena
Gardena City Council Meeting

AGENDA REPORT SUMMARY
Agenda Item No. 12.A
Section: DEPARTMENTAL

ITEMS - ADMINISTRATIVE

SERVICES
Meeting Date: December 12,
2023
TO: THE HONORABLE MAYOR AND MEMBERS OF THE GARDENA CITY COUNCIL AGENDA TITLE: Approve Citywide Classification and Total Compensation Study Contract with Gallagher Benefit Services, Incorporated (Doing Business as Koff & Associates) in the amount of $205,940 and a project total of $236,831
COUNCIL ACTION REQUIRED:

Staff Recommendation: Approve Proposal
RECOMMENDATION AND STAFF SUMMARY:

In 2019, the City launched a citywide classification study with Koff & Associates, to develop an updated and well-structured classification system that is legally compliant, internally aligned, and reflective of current roles and responsibilities, duties and qualifications.

The COVID-19 Pandemic struck mid-study in 2020, impacting employment levels and service levels, by way of layoffs and furloughs. The study came to a halt.

The City is once again undertaking this project, as job descriptions serve as an essential tool for the City to effectively manage its workforce. Job descriptions lay the framework for developing effective recruitment and selection procedures, conducting objective performance appraisals, designing training plans and succession planning, and providing employees an understanding of their role within the City. With the passing of time, positions evolve and require assessment of current responsibilities and qualifications. These changes can be due to a number of items, including organizational changes, legal requirements and technological advancements.

The City has worked with Koff & Associates to analyze their prior work performed, in order to salvage and utilize any of the work that may still be relevant. In addition to the Classification study portion of job descriptions, the City has added a second and equally important component, a Total Compensation Study. In order to attract and retain a qualified and talented workforce, it is important to maintain parity in the labor market. This study will evaluate pay as well as benefits in one comprehensive package to show how competitive the City is compared to the median market.

A 15% contingency is being requested for this project for an additional $30,891, to accommodate any unforeseen expenditures that may arise during this complex project. Such expenditures would not be allowed unless agreed upon and approved in advance by the City.

The total project is estimated to be completed in 32 weeks Therefore, staff respectfully recommends that the City Council approve the Classification and Total Compensation Study with Koff & Associates, in the amount of $205,940 with a project total of $236,831, which includes a 15% contingency.

FINANCIAL IMPACT/COST:

Fund Type FY 2023-2024 FY 2024-2025 Total
General
Fund
$140,288 $46,763 $187,050
Gtrans Fund $35,229 $11,743 $46,972
Sewer Fund $2,106 $702 $2,809
Total $177,623 $59,208 $236,831
ATTACHMENTS:
12-12-23-Gallagher Benefit Services Inc- Contract Agreement.pdf APPROVED:
___________________________________
Clint Osorio, City Manager
Consultant Agreement with Koff & Associates, Inc. Page 1

AGREEMENT BETWEEN

THE CITY OF GARDENA
AND
GALLAGHER BENEFIT SERVICES, INC.

This contract, hereinafter referred to as Agreement is entered into this 1st day of December, 2023, by and between THE CITY OF GARDENA (“City”) and Gallagher Benefit Services, Inc., a Delaware Corporation (“Consultant”). Based on the mutual promises and covenants contained herein, the Parties hereto agree, as follows.

1. Recitals.

A. Whereas, City requires the services of a professional to complete a citywide classification and compensation study; and
B. Whereas, Consultant has represented that it is qualified by virtue of experience, training, education and expertise to provide these services; and
C. Whereas, City has determined that the public interest, convenience and necessity require the execution of this Agreement.

D. WHEREAS, no official or employee of City has a financial interest, within the provisions of sections 1090-1092 of the California Government Code, in the subject matter of this Agreement.

2. Services.

A. The services to be performed by Consultant shall consist of the following (“Services”): As specified in Exhibit “A”, attached hereto and incorporated herein by reference, unless otherwise instructed by City.

B. The Services shall be performed in accordance with the Project Schedule set forth in Exhibit A. Consultant shall not be liable for any failure or delay in furnishing proposed Services resulting from fire, explosion, flood, storm, Act of God, governmental acts, orders or regulations, hostilities, civil disturbances, strikes, labor difficulties, difficulty in obtaining parts, supplies, or shipping facilities, inability to obtain or delays in obtaining suitable material or facilities required for performance, temporary unavailability of qualified personnel, failure by City to provide appropriate access to equipment or personnel, or other causes beyond Consultant’s reasonable control.

3. Additional Services. If City determines that additional Services are required to be provided by Consultant in addition to the Services set forth above, City shall authorize Consultant to perform such additional Services in writing (“Additional Services”). Such Additional Services shall be specifically described and approved by City in writing prior to the performance thereof. Consultant shall be compensated for such Additional Services DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F Consultant Agreement with Koff & Associates, Inc. Page 2 in accordance with the amount agreed upon in writing by the Parties. No compensation shall be paid to Consultant for Additional Services which are not specifically approved by City in writing.

4. Consultant’s Proposal. This Agreement shall include Consultant’s proposal or bid which is incorporated herein as Exhibit A. In the event of any inconsistency between the terms of the proposal and this Agreement, this Agreement shall govern.

5. Timing of Performance. Time is of the essence with respect to Consultant’s performance of the Services required by this Agreement. Consultant shall diligently and timely pursue and complete the performance of the Services required of it by this Agreement as set forth in Exhibit A. City, in its sole discretion, may extend the time for performance of any Service.

6. Compensation. Compensation for the Services shall be billed as set forth in Exhibit A, attached hereto. The Compensation is inclusive of all costs that may be incurred by Consultant in performance of the Services, including but not limited to such items as travel, copies, delivery charges, phone charges, and facsimile charges, unless otherwise. In no event shall compensation under this Agreement exceed Two Hundred Five Thousand Nine Hundred Forty Dollars and 00/00 ($205,940.00) without the prior written authorization of the City Council.

7. Term of Agreement/Termination. This Agreement shall commence on the Effective Date and continue for a period of one (1) year, ending on November 30, 2024, unless previously terminated as provided herein or as otherwise agreed to in writing by the parties.

A. This Agreement shall be effective as of the date of execution by the City and shall remain in effect until all Services are completed or until terminated as provided for herein.

B. City may terminate this Agreement without cause by providing written notice to Consultant not less than ten days prior to an effective termination date. City’s only obligation in the event of termination will be payment of fees and allowed expenses incurred up to and including the effective date of termination.

C. Unless for cause, Consultant may not terminate this Agreement. If Consultant is terminating this Agreement for cause, it must provide the City with thirty (30) days written notice.

D. Upon receipt of a termination notice, Consultant shall: (1) promptly discontinue all Services, unless the notice directs otherwise; and (2) within ten (10) days, deliver to City all files, data, reports, estimates, summaries, and such other information and materials as may have been accumulated or prepared to date by Consultant in performing the Services under this Agreement, whether completed or in progress.

Consultant shall provide these documents by both hard copy and in electronic format if DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F Consultant Agreement with Koff & Associates, Inc. Page 3 available. In the event of termination for other than cause attributable to Consultant, Consultant shall be entitled to reasonable compensation for the Services it performs up to the date of termination and shall be deemed released from liability for any work assigned but not completed as of the effective date of termination.

8. Agreement Administrator. For purposes of this Agreement, City designates Ray Beeman or designee as the Agreement Administrator who shall monitor Consultant’s performance under this Agreement. Consultant shall be notified in writing of any deficiency in the performance of this Agreement in a timely manner by Agreement Administrator Consultant shall have five (5) business days from receipt of the notification to cure any deficiency to the reasonable satisfaction of the Agreement Administrator. All costs for such corrections shall be borne by Consultant and shall not increase Consultant’s fees due hereunder. Should the Agreement Administrator determine that Consultant has not performed its obligation as stated in this Agreement in a satisfactory manner, City may terminate this Agreement for cause as specified in Section- Term of Agreement/Termination. All notices, invoices or other documents shall be addressed to the Agreement Administrator, as well as all substantive issues relating to this contract.

City reserves the right to change this designation upon written notice to Consultant.

9. Invoices and Payments.

A. Payment shall be made upon receipt and approval of invoices for Services rendered. In order for payment to be made, Consultant’s invoice must include an itemization as to the services rendered, date(s) of service, direct and/or subcontract costs, and be submitted on an official letterhead or invoice with Consultant’s name, address, and telephone number referenced.

B. The Agreement Administrator shall review the invoices to determine whether services performed and documents submitted are consistent with this Agreement. Payment shall be made within forty-five (45) days following receipt of the invoice or the Agreement Administrator shall provide Consultant with a written statement objecting to the charges and stating the reasons therefore.

C. Payment by City under this Agreement shall not be deemed a waiver of defects, even if such defects were known to City at the time of payment.

10. Records/Audit.

A. Consultant shall be responsible for ensuring accuracy and propriety of all billings and shall maintain all supporting documentation for a minimum of three (3) years from the completion date of the Services under this agreement the following records:

1. All accounts and records, including personnel, property and financial, adequate to identify and account for all costs pertaining to this Agreement and assure proper accounting for all funds;
DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F Consultant Agreement with Koff & Associates, Inc. Page 4

2. Records which establish that Consultant and any subconsultant who renders Services under this Agreement are in full compliance with the requirements of this Agreement and all federal, state and local laws and regulations

3. Any additional records deemed necessary by City to assume verification of full compliance with this Agreement.

B. City shall have the right to audit Consultant’s invoices and all supporting documentation for purposes of compliance with this Agreement for a period of three years following the completion of Services under this Agreement.

C. Upon reasonable notice from City or any other governmental agency, Consultant shall cooperate fully with any audit of its billings conducted by, or of, City and shall permit access to its books, records and accounts as may be necessary to conduct such audits.

11. Successors and Assignment. This Agreement covers professional services of a specific and unique nature. Except as otherwise provided herein, Consultant shall not assign or transfer its interest in this Agreement or subcontract any services to be performed without amending this Agreement. This Agreement shall be binding upon the heirs, executors, administrators, successors and assigns of the parties hereto.

12. Change in Name, Ownership or Control. Consultant shall notify the Agreement Administrator, in writing, of any change in name, ownership or control of Consultant’s firm or subconsultant. Change of ownership or control of Consultant’s firm may require an amendment to the Agreement.

13. Key Personnel. City has relied upon the professional training and ability of Consultant to perform the Services hereunder as a material inducement to enter into this Agreement. Consultant shall provide properly skilled professional and technical personnel to perform all Services under this Agreement. In the event that City, in its sole discretion, at any time during the Agreement, desires the removal of any person or persons assigned by Consultant to perform Services pursuant to this Agreement, Consultant shall remove any such person immediately upon receiving notice from City.

14. Performance By Consultant. Consultant shall maintain or exceed the level of competency presently maintained by other similar practitioners in the State of California, for professional and technical soundness, accuracy and adequacy of all work, advice and material furnished under this Agreement.

15. Use of Materials.

A. City shall make available to Consultant such materials from its files as may be required by Consultant to perform Services under this Agreement. Such materials shall remain the property of City while in Consultant’s possession. Upon termination of this Agreement and payment of outstanding invoices of Consultant, or completion of work DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F Consultant Agreement with Koff & Associates, Inc. Page 5 under this Agreement, Consultant shall return to City any property of City in its possession and any calculations, notes, reports, electronic files, or other materials prepared by Consultant in the course of performance of this Agreement.

B. City may utilize any material prepared or work performed by Consultant pursuant to this Agreement, including computer software, in any manner, which City deems proper without additional compensation to Consultant. Consultant shall have no responsibility or liability for any revisions, changes, or corrections made by City, or any use or reuse pursuant to this paragraph unless Consultant accepts such responsibility in writing.

16. Nonuse of Intellectual Property of Third Parties. Consultant shall not use, disclose or copy any intellectual property of any third parties in connection with work carried out under this Agreement, except for intellectual property for which Consultant has a license.

Consultant shall indemnify and hold City harmless against all claims raised against City based upon allegations that Consultant has wrongfully used intellectual property of others in performing work for City, or that City has wrongfully used intellectual property developed by Consultant pursuant to this Agreement.

17. Ownership of Work Product. All documents or other information created, developed, or received by Consultant shall, for purposes of copyright law, be deemed works made for hire for City by Consultant and shall be the sole property of City.

Consultant shall provide City with copies of these items upon demand, and in any event, upon termination of this Agreement. Notwithstanding the foregoing, City shall own all final deliverables provided to City by Consultant as part of the services provided under this Agreement, provided however, Consultant shall retain sole and exclusive ownership of all right, title, and interest in, and to, its intellectual property and derivatives thereof which no data or Confidential Information of the City was used to create and which was developed entirely using Consultant’s own resources, including any and all pre-existing or independently developed know-how, methods, processes and other materials prepared by Consultant. To the extent Consultant’s intellectual property is necessary for the City to use the deliverables provided under this Agreement, Consultant grants to City a non-exclusive, royalty-free license to Consultant’s intellectual property solely for City’s use of such deliverables.

18. Confidentiality Clause. Consultant acknowledges that some of the material and information that may come into its possession or knowledge in connection with this Agreement or its performance may consist of information that is exempt from disclosure to the public or other unauthorized persons under either state or federal statutes ("Confidential Information"). Confidential Information includes, but is not limited to, names, addresses, Social Security numbers, e-mail addresses, telephone numbers, financial profiles, credit card information, driver's license numbers, medical data, law enforcement records, agency source code or object code, agency security data, or information identifiable to an individual that relates to any of these types of information.

Consultant agrees to hold Confidential Information in strictest confidence and not to make use of Confidential Information for any purpose other than the performance of this DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F Consultant Agreement with Koff & Associates, Inc. Page 6 Agreement, to release it only to authorized employees or Sub-consultants requiring such information for the purposes of carrying out this Agreement, and not to release, divulge, publish, transfer, sell, disclose, or otherwise make the information known to any other party without City's express written consent or as provided by law. Consultant agrees to release such information or material only to employees or Sub-consultants who have signed a nondisclosure agreement. Consultant agrees to implement physical, electronic, and managerial safeguards to prevent unauthorized access to Confidential Information. "Personal information" including, but not limited to, "Protected Health Information" (PHI) under Health Insurance Portability And Accountability Act (HIPAA), individuals' names, addresses, phone numbers, birth dates, and social security numbers collected, used, or acquired in connection with this Agreement shall be protected against unauthorized use, disclosure, modification or loss.

HIPAA establishes national minimum standards for the use and disclosure of certain health information. The Consultant must comply with all HIPAA requirements and rules when determined applicable by the City. If City determines that (1) City is a "covered entity" under HIPAA, and that (2) Consultant will perform "business associate" services and activities covered under HIPAA, then at City's request, Consultant agrees to execute City's Agreement in compliance with HIPAA.

Consultant shall ensure its directors, officers, employees, Sub-consultants or agents use personal information solely for the purposes of accomplishing the services set forth herein. Consultant and its Sub-consultants agree not to release, divulge, publish, transfer, sell or otherwise make known to unauthorized persons personal information without the express written consent of the City or as otherwise required by law.

Any breach of this provision may result in termination of the Agreement and demand for return of all personal information. Moreover, Consultant will indemnify and hold the City harmless from and against all losses and damages resulting from any unauthorized or improper disclosure, dissemination or use of the information as a result, in whole or in part, of Consultant’s action or inaction.

19. Legal Requirements.

A. Consultant shall secure and maintain all licenses or permits required by law, including a City business license, and shall comply with all ordinances, laws, orders, rules, and regulations pertaining to the work.

B. Consultant warrants that it shall perform the Services required by this Agreement in compliance with all applicable Federal and California employment laws, including, but not limited to, those laws related to minimum hours and wages; occupational health and safety; fair employment and employment practices; workers’ compensation insurance and safety in employment; and all other Federal, State and local laws and ordinances applicable to the services required under this Agreement. Consultant shall indemnify and hold harmless City from and against all DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F Consultant Agreement with Koff & Associates, Inc. Page 7 claims, demands, payments, suits, actions, proceedings, and judgments of every nature and description including attorneys’ fees and costs, presented, brought, or recovered against City for, or on account of any liability under any of the above-mentioned laws, which may be incurred by reason of Consultant’s performance under this Agreement.

C. Consultant covenants that there shall be no discrimination based upon race, color, creed, religion, sex, marital status, age, handicap, national origin or ancestry, or any other category forbidden by law in performance of this Agreement.

20. Conflict of Interest and Reporting.

A. Consultant shall at all times avoid conflicts of interest or the appearance of a conflict of interest in the performance of this Agreement. If required, Consultant shall comply with the City’s Conflict of Interest reporting requirements. Consultant understands that pursuant to Gardena Municipal Code sections 2.24.020H and 2.24.025G, it is forbidden to make any contribution to a candidate or committee of a candidate for a municipal office of the City, or to an officeholder, until the completion of Services to be performed under this Agreement.

B. Consultant and its representatives shall refrain from lobbying City of Gardena officials, employees and representatives for the duration of this Agreement.

21. Guarantee and Warranty. Consultant warrants to City that the material, analysis, data, programs and Services to be delivered or rendered hereunder will be of the kind and quality designated and will be performed by qualified personnel. Without waiver of City’s other rights or remedies, City may require Consultant to re-perform any of said Services, which were not performed in accordance with these standards. Consultant shall perform the remedial Services at its sole expense.

22. Insurance.

A. Commencement of Work. Consultant shall not commence work under this Agreement until it has obtained City approved insurance. Before beginning work hereunder, during the entire period of this Agreement, for any extensions hereto, and for periods after the end of this Agreement as may be indicated below, Consultant must have and maintain in place all of the insurance coverage required in this Section. Consultant’s insurance shall comply with all items specified by this Agreement. Any subcontractors shall be subject to all of the requirements of this Section and Consultant shall be responsible to obtain evidence of insurance from each subcontractor and provide it to City before the subcontractor commences work.

B. Insurance Company Requirements. All insurance policies used to satisfy the requirements imposed hereunder shall be issued by insurers admitted to do business in the State of California. Insurers shall have a current Best’s rating of not less than A- :VI, unless otherwise approved by City.

DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F Consultant Agreement with Koff & Associates, Inc. Page 8 C. Coverage, Limits and Policy Requirements. Consultant shall maintain the types of coverage and limits indicated below:

1. Commercial General Liability Insurance - a policy for occurrence coverage for bodily injury, personal injury and property damage, with coverage at least as broad as Insurance Services Office Form CG 00 01, with no special limitations affecting City. The limit for all coverage under this policy shall be no less than one million dollars ($1,000,000.00) per occurrence.

2. Commercial Auto Liability Insurance - a policy with coverage at least as broad as Insurance Services Office form CA 0001, including Symbol 1 (any auto). The limit for bodily injury and property damage liability shall be no less than one million dollars ($1,000,000.00) per accident.

3. Policy Requirements. The policies set forth above shall comply with the following, as evidenced by the policies or endorsements to the policies:
a. The City, its appointed and elected officers, employees, agents and volunteers shall be added as additional insured to the Commercial General Liability policy.
b. Any cancelled or non-renewed policy will be replaced with no coverage gap and a current Certificate of Insurance will be provided to the City. c. For any claims with respect to the Services covered by this Agreement, Consultant’s Commercial General Liability insurance coverage shall be primary insurance as respects the City, its elected and appointed officers, employees, agents and volunteers. Any insurance or self-insurance maintained by the City, its elected and appointed officers, employees, agents and volunteers shall be excess of Consultant’s insurance and shall not contribute with it.

4. Worker’s Compensation and Employer’s Liability Insurance - a policy which meets all statutory benefit requirements of the Labor Code, or other applicable law, of the State of California. The minimum coverage limits for said insurance shall be no less than one million dollars per claim. The policy shall be issued by an insurance company which is admitted to do business in the State of California.

5. Professional Errors & Omissions - a policy with minimum limits of one million dollars ($1,000,000.00) per claim and aggregate. This policy shall be issued by an insurance company which is admitted to do business in the State of California.

D. Additional Requirements. The procuring of such required policies of insurance shall not be construed to limit Consultant’s liability hereunder or to fulfill the indemnification provisions and requirements of this Agreement. There shall be no recourse against City for payment of premiums or other amounts with respect thereto.

City shall notify Consultant in writing of changes in the insurance requirements. If DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F Consultant Agreement with Koff & Associates, Inc. Page 9 Consultant does not deposit copies of acceptable insurance endorsements with City incorporating such changes within sixty (60) days of receipt of such notice, Consultant shall be deemed in default hereunder.

E. Deductibles. Any deductible or self-insured retention over $25,000 per occurrence must be declared to and approved by City.

F. Verification of Compliance. Consultant shall furnish City with original endorsements effecting coverage required by this Agreement. The endorsements are to be signed by a person authorized by the insurer to bind coverage on its behalf. All endorsements are to be received and approved by City before work commences.

G. Termination for Lack of Required Coverage. If Consultant, for any reason, fails to have in place, at all times during the term of this Agreement, including any extension hereto, all required insurance and coverage, City may immediately obtain such coverage at Consultant’s expense and/or terminate this Agreement.

23. Indemnity.

A. Consultant assumes all risk of injury to its employees, agents, and contractors, including loss or damage to property.

B. Consultant agrees to defend, indemnify, hold free and harmless the City, its elected officials, officers, agents, employees and volunteers, at Consultant’s sole expense, from and against any and all claims, actions, suits or other legal proceedings brought against the City, its elected officials, officers, agents, employees and volunteers arising out of the performance of the Consultant, its employees, and/or authorized subcontractors, of the work undertaken pursuant to this Agreement. The defense obligation provided for hereunder shall apply without any advance showing of negligence or wrongdoing by the Consultant, its employees, and/or authorized subcontractors, but shall be required whenever any claim, action, complaint, or suit asserts as its basis the negligence, errors, omissions or misconduct of the Consultant, its employees, and/or authorized subcontractors, and/or whenever any claim, action, complaint or suit asserts liability against the City, its elected officials, officers, agents, employees and volunteers based upon the work performed by the Consultant, its employees, and/or authorized subcontractors under this Agreement, whether or not the Consultant, its employees, and/or authorized subcontractors are specifically named or otherwise asserted to be liable. Notwithstanding the foregoing, the Consultant shall not be liable for the defense or indemnification of the City for claims, actions, complaints or suits arising out of the sole negligence or willful misconduct of the City. This provision shall supersede and replace all other indemnity provisions contained either in the City’s specifications or Consultant’s Proposal, which shall be of no force and effect. NOTWITHSTANDING ANYTHING TO

THE CONTRARY IN THIS AGREEMENT, CONSULTANT SHALL NOT BE LIABLE FOR

ANY SPECIAL, INDIRECT, CONSEQUENTIAL, LOST PROFITS, OR PUNITIVE

DAMAGES SUSTAINED OR INCURRED IN CONNECTION WITH THIS AGREEMENT, WHETHER OR NOT SUCH DAMAGES ARE FORESEEABLE.

DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F Consultant Agreement with Koff & Associates, Inc. Page 10 C. No official, employee, agent or volunteer of City shall be personally liable for any default or liability under this Agreement.

24. Independent Contractor. Consultant agrees to furnish consulting services in the capacity of an independent contractor and neither Consultant nor any of its employees shall be considered to be an employee or agent of City.

25. PERS Eligibility Indemnification. In the event that Consultant or any employee, agent, or subcontractor of Consultant providing Services under this Agreement claims or is determined by a court of competent jurisdiction or the California Public Employees Retirement System (PERS) to be eligible for enrollment in PERS as an employee of the City, Consultant shall indemnify, defend, and hold harmless City for the payment of any employee and/or employer contributions for PERS benefits on behalf of Consultant or its employees, agents, or subcontractors, as well as for the payment of any penalties and interest on such contributions, which would otherwise be the responsibility of City.

Notwithstanding any other agency, state or federal policy, rule, regulation, law or ordinance to the contrary, Consultant and any of its employees, agents, and subcontractors providing service under this Agreement shall not qualify for or become entitled to, and hereby agree to waive any claims to, any compensation, benefit, or any incident of employment by City, including but not limited to eligibility to enroll in PERS as an employee of City and entitlement to any contribution to be paid by City for employer contribution and/or employee contributions for PERS benefits.

26. Notices. Any notice or communication given under this Agreement shall be effective when deposited, postage prepaid, with the United States Postal Service and addressed to the contracting parties. Name, address, telephone and facsimile numbers of the parties are as follows:

City of Gardena:
1700 West 162nd Street
Gardena, California 90247-3732
Attn: Ray Beeman
Title: Director of Administrative Services
Email: [email protected]
Telephone: (310) 217-9502
To Consultant: Gallagher Benefit Services, Inc.
2835 Seventh Street
Berkeley, CA 94710
Attn: Georg S. Krammer
Email: [email protected]
Telephone: (510) 658-5633
Either party may change the information to which notice or communication is to be sent DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F Consultant Agreement with Koff & Associates, Inc. Page 11 by providing advance written notice to the other party.

27. Severability. If any provision of this Agreement shall be held illegal, invalid, or unenforceable, in whole or in part, such provision shall be modified to the minimum extent necessary to make it legal, valid, and enforceable, and the legality, validity, and enforceability of the remaining provisions shall not be affected thereby.

28. Jurisdiction and Venue. This Agreement shall be deemed a contract under the laws of the State of California and for all purposes shall be interpreted in accordance with such laws. Both parties hereby agree and consent to the exclusive jurisdiction of the courts of the State of California and that the venue of any action brought hereunder shall be Los Angeles County, California.

29. Waiver. No delay or failure by either Party to exercise or enforce at any time any right or provision of this Agreement shall be considered a waiver thereof or of such Party’s right thereafter to exercise or enforce each and every right and provision of this Agreement. To be valid a waiver shall be in writing but need not be supported by consideration. No single waiver shall constitute a continuing or subsequent waiver.

30. Electronic Signatures. The parties hereby acknowledge and agree that electronic records and electronic signatures, as well as facsimile signatures, used in connection with the execution of this Agreement and electronic signatures, facsimile signatures or signatures transmitted by electronic mail in so-called pdf format shall be legal and binding and shall have the same full force and effect as if a paper original of this Agreement had been delivered and had been signed using a handwritten signature.

City and Consultant (i) agree that an electronic signature, whether digital or encrypted, of a party to this Agreement is intended to authenticate this writing and to have the same force and effect as a manual signature, (ii) intend to be bound by the signatures (whether original, faxed or electronic) on any document sent or delivered by facsimile or, electronic mail, or other electronic means, (iii) are aware that the other party will reply on such signatures, and (iv) hereby waive any defenses to the enforcement of the terms of this Agreement based on the foregoing forms of signature. If this Agreement has been executed by electronic signature, all parties executing this document are expressly consenting under the United States Federal Electronic Signatures in Global and National Commerce Act of 2000 ("E-SIGN") and California Uniform Electronic Transactions Act ("UETA")(Cal. Civ. Code § 1633.1, et seq.), that a signature by fax, email or other electronic means shall constitute an Electronic Signature to an Electronic Record under both E-SIGN and UETA with respect to this specific transaction.

31. Joint Drafting. Each party acknowledges that it has had an adequate opportunity to review each and every provision in this Agreement and to submit the same to counsel and other consultants for review and comment and that the parties jointly drafted this Agreement. No provision of this Agreement or any Assignment shall be construed more strictly against one party than the other party by reason that one or the other party proposed, drafted or modified such provision or any other existing or proposed provision.

DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F Consultant Agreement with Koff & Associates, Inc. Page 12

32. Public Records Act Disclosure. Consultant has been advised and is aware that this Agreement and all reports, documents, information and data, including, but not limited to, computer tapes, discs or files furnished or prepared by Consultant, or any of its subcontractors, pursuant to this Agreement and provided to City may be subject to public disclosure as required by the California Public Records Act (California Government Code section 7920.000 et seq.). Exceptions to public disclosure may be those documents or information that qualify as trade secrets, as that term is defined in the California Government Code section 7924.510, and of which Consultant informs City of such trade secret. The City will endeavor to maintain as confidential all information obtained by it that is designated as a trade secret. The City shall not, in any way, be liable or responsible for the disclosure of any trade secret including, without limitation, those records so marked if disclosure is deemed to be required by law or by order of the Court.

33. Authority to Execute. The persons executing this Agreement on behalf of the parties warrant that they are duly authorized to execute this Agreement.

34. Attorney’s Fees. In the event that legal action is necessary to enforce the provisions of this Agreement, or to declare the rights of the parties hereunder, the parties agree that the prevailing party in the legal action shall be entitled to recover attorney’s fees and court costs from the opposing party.

35. Section Headings. The Section headings used in this Agreement are for reference purposes only and shall have no binding effect.

36. Entire Agreement. This Agreement contains the entire understanding between City and Consultant. Any prior agreement, promises, negotiations or representations not expressly set forth herein are of no force or effect. Subsequent modifications to this Agreement shall be effective only if in writing and signed by both parties. This Agreement may be signed by the parties hereto in separate counterparts, including both counterparts that are executed on paper and counterparts that are in the form of electronic signatures.

Electronic signatures include facsimile or email electronic signatures. Each executed counterpart shall be deemed an original. All counterparts, taken together, constitute the executed Agreement.

37. Section Headings. The Section headings used in this Agreement are for reference purposes only and shall have no binding effect.

38. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original. All counterparts shall be construed together and shall constitute one agreement.

Signatures Next Page
DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F November 15, 2023
Classification and
Total Compensation
Study Proposal
City of Gardena

KOFF & ASSOCIATES, A GALLAGHER COMPANY
GEORG S. KRAMMER
Managing Director, Compensation and Rewards Consulting
2835 Seventh Street
Berkeley, CA 94710
www.KoffAssociates.com
[email protected]
Tel: 510.658.5633
Fax: 510.652.5633
EXHIBIT A DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F 2835 Seventh Street, Berkeley, California 94710 | 510.658.5633 | www.KoffAssociates.com November 15, 2023
Mr. Ray Beeman, CPA
Director of Administrative Services
1700 West 162nd Street
Gardena, CA 90247
Dear Mr. Beeman:

Thank you for the opportunity to provide a proposal for a Classification and Total Compensation Study for the City of Gardena (“City”). We are most interested in assisting the City with this important study and feel that we are uniquely qualified to provide value to your organization based on our experience working with other cities, counties, special districts, joint-powers associations, and other public agencies.

Koff & Associates, now a Gallagher company, is an experienced Human Resources and Recruitment Services firm providing human resources services to cities, counties, special districts, courts, educational institutions, and other public agencies for 39 years. The firm has achieved a reputation for working successfully with management, employees, and governing bodies. We believe in a high level of dialogue and input from study stakeholders and our proposal speaks to that level of effort. Our firm’s extra effort has resulted in close to 100% implementation of all our classification and compensation studies.

Koff & Associates ensures that each of our projects is given the appropriate resources and attention, resulting in a high level of quality control, excellent communication between clients and our office, commitment to meeting timelines and budgets, and a consistently high-caliber work product.

As a Managing Director of Koff & Associates, I would assume the role of Project Director and be responsible for the successful completion of project. I can be reached at our Berkeley address and the phone number listed on the cover page. My email is [email protected].

This proposal will remain valid for at least 90 days from the date of submittal. Please call if you have any questions or wish additional information. We look forward to the opportunity to provide professional services to the City of Gardena.

Sincerely,
Georg S. Krammer
Managing Director, Compensation and Rewards Consulting
DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F Classification and Total Compensation Study Proposal
City of Gardena
2835 Seventh Street, Berkeley, California 94710 | 510.658.5633 | www.KoffAssociates.com

TABLE OF CONTENTS
Firm Qualifications 1
Team Member Qualifications 2
References 3
Executive Summary, Approach, Methodology 5
Time Requirements 20
Cost Proposal 21
Contractual Considerations 25
- Memorandum of Insurance
Signature Page
Appendix
- Staff Resumes
- Scope of Work by Department
DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F Classification and Total Compensation Study Proposal
City of Gardena
2835 Seventh Street, Berkeley, California 94710 | 510.658.5633 | www.KoffAssociates.com 1 FIRM QUALIFICATIONS
Koff & Associates (“K&A”) is a full-spectrum, public-sector human resources and recruitment services firm that was founded in 1984 by Gail Koff; K&A has been assisting cities, counties, special districts, other public agencies, and non-profit organizations with their human resources needs for 39 years.

On April 30, 2021, we merged with Arthur J. Gallagher and are now officially a Gallagher Division. Our headquarters are in Berkeley, CA, and we have satellite offices in Southern California, the Central Valley, the Sacramento Region, and the Western Region.

We are familiar with the various public sector organizational structures, agency missions, operational and budgetary requirements, and staffing expectations. We have extensive experience working in both union and non-union environments (including service as the management representative in meet and confer and negotiation meetings), working with City Councils, County Commissions, Boards of Directors, Boards of Supervisors, Boards of Trustees, Merit Boards, and Joint Power Authorities.

The firm’s areas of focus are classification and compensation studies (approximately 70% of our workload); executive search and staff recruitments; organizational development/assessment studies; performance management and incentive compensation programs; development of strategic management tools; policy/procedure development and employee handbooks; training and development; public agency consolidations and separations; Human Resources audits; and serving as off-site Human Resources Director for smaller public agencies that need the expertise of a Human Resources Director but do not need a full-time, on-site professional.

Without exception, all our classification and compensation studies have successfully met all of our intended commitments; communications were successful with employees, supervisors, management, and union representatives; and we were able to assist each agency in successfully implementing our recommendations. All studies were brought to completion within stipulated time limits and proposed budgets.

Our long list of clients (please see https://koffassociates.com/our-clients/) is indicative of our firm’s reputation as being a quality organization that can be relied on for producing comprehensive, sound, and cost-effective recommendations and solutions. K&A has a reputation for being “hands on” with the ability and expertise to implement its ideas and recommendations through completion in both union and nonunion environments.

K&A relies on our stellar reputation and the recommendations and referrals of past clients to attract new clients. Our work speaks for itself and our primary goal is to provide professional and technical consulting assistance with integrity, honesty and a commitment to excellence. We are very proud of the fact that in working with hundreds of public agency clients and completing hundreds of classification and/or compensation and other types of studies, we have only had a handful of formal appeals in our entire history.

No subcontractors will be assigned to this study.

TEAM MEMBER QUALIFICATIONS
All members of our team have worked on multiple comprehensive classification and total compensation studies and are well acquainted with the wide array of public sector organizational structures, compensation structures, classification plans, as well as the challenges and issues that arise when conducting studies such as this one for the City.

KEY PERSONNEL
Our project team will be led by Co-Project Directors Georg Krammer (Managing Director), and Debbie Owen (Project Manager). They will coordinate all of K&A’s efforts, attend all meetings with the City, and be responsible for all work products and deliverables.

CONSULTANTS
Lindsay Christopher (Senior Consultant), Kari Mercer (Senior Consultant), Alyssa Thompson (Senior Consultant), Monica Garrison-Reusch (Consultant), Arlene Gibbs (Associate Consultant), Sarah Nunes (Consultant), Ariele Rodriguez (Associate Consultant), Janna Dinkelspiel (Associate Consultant), Edi Hsi (Associate Consultant), Nicolle Wynia-Eide (Consultant), Kelly Barns (Associate Consultant), Cindy Harary (Consultant) and Renate Tiner (Associate Consultant) will conduct classification analysis and interviews with employees and management, compensation data collection and analysis, internal job analysis, develop recommendations and implementation strategies.

WORKLOAD
We currently have a team of 25 HR consultants and five administrative support staff – resources that we are able to pool base on each project’s needs, to execute projects and to meet clients’ needs and expectations. Each time we are selected as the successful bidder on a project, we strategize to determine project timelines, deliverable deadlines, and the resources that are required to produce the deliverables as promised. We are poised to accommodate the City’s classification and compensation study and plan to devote the necessary resources for the successful execution of the project.

Biographies of the specific staff who will be assigned to this study can be found in the Appendix.

DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F Classification and Total Compensation Study Proposal
City of Gardena
2835 Seventh Street, Berkeley, California 94710 | 510.658.5633 | www.KoffAssociates.com 3 REFERENCES
Agency & Project Contact
City of Coachella (population: 44,953)
Several Classification and Compensation Studies in 2008, 2014, 2016, and 2017.

Ms. Sandy Krause
HR Manager
(760) 398-3502, ext. 132
1515 Sixth Street
Coachella, CA 92236
[email protected]
City of Corona (Population: 168,819)
Citywide Classification and Total Compensation Study, completed 2022.

Ms. Angela Rivera
Chief Talent Officer
(951) 279-3501
400 S. Vicentia Ave.,
Corona, CA 92882
[email protected]
City of El Monte (population: 116,109)
Citywide Classification, Compensation and Organizational Study, completed 2020
Ms. Kristen Enomoto
Sr. Management Analyst, HR/RM
Department
(626) 580-2044
11333 Valley Boulevard
El Monte, CA 91731
[email protected]
City of El Segundo
Ongoing classification and compensation studies since 2020.

Rebecca Redyk
Human Resources Director
350 Main Street
El Segundo, CA 90245
310-524-2335
[email protected]
City of Hemet (Population: 78,657)
Several compensation studies since 2019; most recent completed 2021. Currently, a classification study is underway in 2023.

Ms. Norma Rangel
Human Resources Analyst
(951) 229-2287
445 E Florida Avenue
Hemet, CA 92543
[email protected]
City of Lomita (population: 20,514)
Classification and Compensation Study, completed 2022.

HR Audit, completed 2016.

Gary Y. Sugano
Assistant City Manager
(310) 325-7110, x121
24300 Narbonne Avenue
Lomita, CA 90717
[email protected]
DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F Classification and Total Compensation Study Proposal
City of Gardena
2835 Seventh Street, Berkeley, California 94710 | 510.658.5633 | www.KoffAssociates.com 4 City of Menifee (population: 77,519)
Classification and Compensation Study, ongoing 2023.

Classification and Compensation Study, completed 2017.

Citywide Classification and Total Compensation Study, completed 2011.

Mr. Bruce Foltz
Finance Director, City of El Monte
(626) 580-2075
11333 Valley Blvd,
El Monte, CA 91731
[email protected]
Please note: During the Studies, Mr. Foltz
was our contact at City of Menifee. Mr.

Foltz is now Finance Director at the City
of El Monte.

City of Murrieta (population: 111,674)
Citywide Classification and Total Compensation Study, completed 2019.

Ms. Stacey Stevenson
Deputy City Manager
(951) 461-6004
1 Town Square
Murrieta, CA 92562
[email protected]
Please note: Ms. Stevenson was K&A’s
reference when she was at City of
National City. She is now the Deputy
City Manager at the City of Murrieta.

City of Newport Beach
Various classification and compensation studies since 2019.

Ms. Jyll C Ramirez
Senior HR Analyst
(949) 644-3306
100 Civic Center Drive
Newport Beach, CA 92660
[email protected]
City of Santa Monica (Population: 91,577)
Ongoing Classification and Compensation Studies for Public Works Department’s Water Resources Division since 2020. Organizational Assessment for Water Resources Division completed in 2020.

Ms. Sunny Wang, P.E.

Water Resources Manager
(310) 458-8230
2500 Michigan Ave, Building 1
Santa Monica, CA 90404
[email protected]
City of Upland
Classification and Compensation Study, 2023
Ms. Theresa (Terry) Doyle
Deputy Director of Human
Resources/Risk Management
(909)931-4376
460 N. Euclid Avenue
Upland, CA 91786
[email protected]
DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F Classification and Total Compensation Study Proposal
City of Gardena
2835 Seventh Street, Berkeley, California 94710 | 510.658.5633 | www.KoffAssociates.com 5 EXECUTIVE SUMMARY, APPROACH, METHODOLOGY
The City desires human resources assistance to conduct an objective analysis of its current classification and compensation practices; recommend changes that result in equitable, competitive and legally defensible classification and pay practices that will enrich the attraction and retention of qualified individuals as well as enhance opportunities for growth and professional development; evaluate the current employee benefit and compensation plan against local and regional markets, and comparable employers; and provide recommendations for adjustments.

The City employs approximately 500 full- and part-time employees in seven City departments:
[1] Elected and Administrative Offices;
[2] Administrative Services;
[3] General Services;
[4] Recreation and Human Services;
[5] Community Development;
[6] Transportation; and
[7] Police.

There are three bargaining units:
[1] Gardena Municipal Employees Association;
[2] Gardena Management Employees Organization; and
[3] Gardena Police Officers Association.

K&A conducted a classification study for the City in 2019 and developed recommendations for a classification plan, classification concepts, position allocations, and 77 new/updated classification descriptions. The study was then put on pause and City now wishes to resume the classification study and add a total compensation study component. The scope of work for this study is limited to a specified number of positions in each department, and the classification description work associated with that scope, as outlined in Appendix B; there are approximately 138 positions for the classification study only, and any ongoing reference to that work is limited to only those 138 positions; however, the total compensation study is City-wide for all classifications.

The study’s first level of effort is to initially develop an updated and well-structured classification system and classification descriptions for all study positions that are legally compliant (including Fair Labor Standards Act (“FLSA”) and Americans with Disabilities Act (“ADA”) requirements), internally aligned, reflective of contemporary standards, and accurately descriptive of current roles, responsibilities, duties, and qualifications. The classification analysis process includes orientation and briefing sessions with study employees, management, Human Resources, union representation, and other stakeholders, as appropriate; the completion of a position description questionnaire by study employees; and interviews with supervisors and management to address any classification issues. All participating employees will be allocated to an appropriate classification; draft classification descriptions will be developed, and sent back to the City management for additional feedback and concurrence.

A second level of effort will be to review the City’s compensation structure for the studied classifications and to conduct a total compensation market survey (salaries plus benefits) using a set of appropriate comparator agencies. The identification of comparator agencies, benchmark classifications, and benefits to be collected is an iterative process that includes all stakeholders. We have found this open discussion philosophy to be critical to our success for organizational buy-in. Once the external data development is DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F Classification and Total Compensation Study Proposal
City of Gardena
2835 Seventh Street, Berkeley, California 94710 | 510.658.5633 | www.KoffAssociates.com 6 completed, we will make specific recommendations for internal equity for non-benchmarked classifications and classifications without a large enough market sampling.

The compensation study will contain specific recommendations regarding the integration of all study classifications into the City’s compensation structure, with the goal of developing a clearly designed, internally equitable format that is flexible for career opportunity and future growth. Our study will make recommendations regarding a salary structure that takes the City’s compensation preferences into consideration as well as the appropriate placement of each classification on the City’s salary schedule.

The study includes a significant number of meetings with the Study Project Team, Human Resources, employees, union representation, and the City Council, as desired. We have expertise in labor/management relations and understand the importance of active participation by all stakeholders to ensure a successful outcome. The meetings and “stakeholder touch-points” that we recommend ensure understanding of the project parameters, enhance accurate intake and output of information, and create a collaborative and interactive approach resulting in greater buy-in for study recommendations. This interactive approach has resulted in almost 100% implementation success of K&A’s studies.

The majority of our clients are unionized and our larger city and county clients typically have multiple unions. Due to the multitude of stakeholder groups who are affected by any compensation study K&A conducts, our team understands the importance of accurate and validated data that withstands any scrutiny, effective and ongoing communication throughout each effort, and collaboration with the various stakeholder groups to ensure organizational buy-in to our findings and recommendations. We have developed a unique methodology of stakeholder “touchpoints” and collaboration that has made us highly successful and effective and has earned our team respect, agreement, and understanding from all stakeholders. In addition, we adjust and customize our methodology based on each individual client’s unique needs and circumstances.

We also recognize that both the City and union representatives have obligations to employees and members to ensure that any study is conducted in a fair and equitable manner. Our project work plans are designed for transparency and we strongly encourage dialog with all stakeholders on study deliverables so they in turn can express their concerns; we all have a shared goal of ensuring the process followed is fair and equitable.

This intense and comprehensive stakeholder engagement and our transparent study processes are also a mechanism of quality control. The fact that our information, data, and recommendations have to be able to withstand utmost scrutiny by diverse stakeholders require an in-depth multi-step quality control process for deliverables. This involves K&A team member validation of classification analyses and compensation data, K&A Project Manager review of all classification and compensation analyses, recommendations and deliverables, and finally K&A Principal (Project Director) review of deliverables before submittal to the client.

Study Objectives
Classification Objectives :
 To analyze and update the City’s classification system and each study position’s classification description and structure through a comprehensive process of job analysis and evaluation, including review of existing documentation, position description questionnaire completion, employee interviews, management interviews, analysis of existing positions DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F Classification and Total Compensation Study Proposal
City of Gardena
2835 Seventh Street, Berkeley, California 94710 | 510.658.5633 | www.KoffAssociates.com 7 and working situations, analysis of levels of duties and responsibilities, and other professional methods, as appropriate;
 To recommend each study position for title change or reclassification (as appropriate), create new classifications (if applicable), eliminate outdated classifications (if applicable), and consolidate classifications assigned to similar functional areas (as appropriate);  To provide for growth and flexibility of assignment within the new classification structure, where feasible, in recognition that some job duties and responsibilities may evolve over time, as well as to provide adequate career paths and class series/job families that will foster career service within the City;
 To clearly state definitions of job classifications, the typical job functions, and minimum required and preferred/desired qualifications such as education, prior work experience, knowledge, skills, abilities, licenses, certifications, and physical demands and working conditions;
 To provide a classification structure that ensures regulatory compliance, including allocation of each study position to the correct classification with appropriate FLSA designation as well as meeting ADA and EEO regulations;  To provide for adequate educational, review, and appeal processes that will result in a product that is understood by all levels of personnel and is internally equitable; and  To ensure sufficient documentation and training throughout the study, on methods used to determine appropriate classification and level, methods for logical progression of movement between classifications, classification concepts and distinguishing characteristics, as well as the delivery of final reports and recommendations to guide the organization in implementing, managing, and maintaining the classification system.

Compensation Objectives:
 To make recommendations regarding a list of appropriate, logical and defensible comparator agencies, benchmark classifications, and benefits to be collected prior to beginning the compensation portion of the study;
 To collect accurate salary and benefit data from the approved group of comparator agencies and to ensure that the information is analyzed in a manner that is clear and comprehensible to the Study Project Team, Human Resources, management, employees, union representation, and the City Council;
 To carefully analyze the scope and level of duties and responsibilities, requirements for successful work performance, and other factors for survey classes, according to generally accepted compensation practices;
 To review the City’s compensation structure and practices and develop compensation recommendations that will assist the City in recruiting, motivating, and retaining competent staff;
 To develop solutions that address pay equity issues, analyze the financial impact of addressing pay equity issues, and create a market adjustment implementation strategy supporting the City’s goals, objectives, and budget considerations;  To evaluate benefit offerings in the labor market and make recommendations for better alignment and/or different benefit offerings as indicated by the analysis and best practices;
 To create a comprehensive final report summarizing the compensation study approach and methodology, analytical tools, findings, and recommended compensation structure; DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F Classification and Total Compensation Study Proposal
City of Gardena
2835 Seventh Street, Berkeley, California 94710 | 510.658.5633 | www.KoffAssociates.com 8  To recommend appropriate internal salary relationships and allocate classes to salary ranges in a comprehensive salary range plan; and
 To ensure sufficient documentation and training throughout the study, on methods used to determine appropriate salary ranges, methods for logical progression of movement within the salary scale for each classification, and other practices, so that our recommendations can be implemented and maintained in a competent and fair manner.

Overall Objectives:
 To review and understand all current documentation, rules, regulations, policies, budgets, procedures, class descriptions, organizational charts, memoranda of understanding, personnel policies, wage and salary schedules, and related information so that our recommendations can be operationally incorporated with a minimum of disruption;  To conduct start-up Study Project Team meetings with management, study project staff, and other stakeholders to discuss any specific concerns with respect to the development of classification and compensation recommendations; finalize study plans and timetables; conduct orientation sessions with management, union leadership, and study employees in order to educate and explain the scope of the study and describe what are and are not reasonable study expectations and goals;
 To work collaboratively and effectively with the City and its stakeholders while at the same time maintaining control and objectivity in the conduct of the study;  To develop a classification and compensation structure that meets all legal requirements, that is totally non-discriminatory, and that easily accommodates organizational change, growth, and operational needs;
 To document all steps in the process and provide documentation and training for Human Resources and other staff, as appropriate, in classification and compensation analysis methodologies so that the City can integrate, maintain, administer, and defend any recommended changes after the initial implementation; and  To provide effective ongoing communications throughout the duration of the project and continued support after implementation.

Methodology / Work Plan / Deliverables
This section of the proposal identifies the actual work plan. We believe that our detailed explanation of methodology and work tasks clearly distinguishes our approach and comprehensiveness.

Our approach is to complete the classification and job evaluation before completing the compensation review. The reasons for this include:
 The description of the work performed and the requirements for that work are, in the minds of the employees and their supervisors, inextricably associated with the “worth of that work” or compensation, which is often a highly emotional issue. Separating the two phases of the study, even though elements of phases may be conducted concurrently, tends to produce more objective classification results.  The compensation review will be completed when there is a full understanding of the work of the City, thereby ensuring that the data developed from the labor market and the City’s classifications is accurate.

Given these parameters, our approach is as follows:

DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F Classification and Total Compensation Study Proposal
City of Gardena
2835 Seventh Street, Berkeley, California 94710 | 510.658.5633 | www.KoffAssociates.com 9 PHASE I: CLASSIFICATION STUDY
Deliverable A: Meetings with Study Project Team and Management Staff, Initial Documentation Review, and Development of Communications and Engagement Plan This phase includes identifying the City’s Study Project Team, contract administrator, and reporting relationships. Our team of Project Managers and H.R. Associates will conduct an orientation and briefing session with the Study Project Team to explain process and methodology; create the specific work plan and work schedule; identify subsequent tasks to be accomplished; reaffirm the primary objectives and specific end products; determine deadline dates for satisfactory completion of the overall assignment; determine who will be responsible for coordinating/scheduling communications with employees, management, union representation, and the Council; and develop a timetable for conducting the same.

In preparation for this study, we conducted initial meetings with Department Heads to communicate any areas of concerns and pain points they are experiencing with the current classification and compensation system, and to identify those classifications/positions that needed to be studied or revisited since the 2019 study. Included in this task will be the gathering of written documentation, identifying current incumbents, and assembling current class descriptions, organizational charts, salary schedules, budgets, memoranda of understanding (“MOU”), personnel policies, previous classification and compensation studies, and any other relevant documentation to gain a general understanding of City operations.

City terminology and methods of current classification and compensation procedures, as well as the written questionnaire instrument for the classification study that will be used in the job analysis phase will be reviewed and agreed to. We will discuss methodology, agree to formats for class descriptions and compensation results, identify appropriate comparator agencies, benchmark classifications, and benefits to be surveyed for compensation survey purposes. We will respond to any questions that may arise from the various stakeholders.

We will develop a communications and engagement plan to foster organizational buy-in and acceptance of study outcomes and consultant recommendations throughout the project by City stakeholders including employees. The goal of the communications and engagement plan is to build positive and effective relationships with the study stakeholders and achieve consensus whenever possible and to strive to understand and take into consideration stakeholders’ ideas, opinions, desires, and issues, and to fully address their concerns. The variety of communication and engagement channels will help inform, consult, involve, collaborate with, and empower City stakeholders and ensure that our methodology and “stakeholder touch-points” are followed and executed at each study milestone.

We are committed to working closely with City study advisors (Human Resources, City leadership, employee representatives, if any, and other stakeholders) to understand the needs of the mutual constituencies (employees) and to ensure that the Study Project Team, K&A team, management, and any employee representatives meet the highest standards of stakeholder interaction, including communicating clearly, politely, honestly, and promptly, and treating everyone fairly, equally, and with respect.

The communications and engagement plan will enable us to respond to questions or concerns in a timely and professional manner. Our typical communication model includes at least weekly or biweekly written status updates to keep the City informed on where we are for every element of the project. Over the last two years, we have learned that most communication can be managed through email and teleconferences DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F Classification and Total Compensation Study Proposal
City of Gardena
2835 Seventh Street, Berkeley, California 94710 | 510.658.5633 | www.KoffAssociates.com 10 and that the work we do can be accomplished successfully and, in fact, more efficiently, by performing it virtually and remotely.

In addition, the study includes a significant number of meetings with the Study Project Team, Human Resources, management, study employees, and the City Council, as desired. The meetings and “stakeholder touchpoints” that we recommend ensure understanding of the project parameters, enhance accurate intake and output of information, and improve a collaborative and interactive approach that will result in greater buy-in for study recommendations. This interactive approach, although time-consuming, has resulted in almost 100% implementation success of K&A’s studies.

Deliverable B. Orientation Meetings with Employees
We will facilitate orientation meetings with study employees and distribute our Position Description Questionnaire (“PDQ”) to start the classification portion of the study. While these meetings are not mandatory, they form the beginning of the educational process that continues throughout the study. We will discuss the importance of the employees’ involvement in the study and their participation in PDQ completion and job analysis interviews. Project processes will be explained, expectations will be clarified, and elements that are not a part of the study will also be covered. Questions will be answered and a detailed explanation and examples for completing the PDQ will be given.

The Position Description Questionnaire (“PDQ”) will be discussed with the Study Project Team and customized as needed to meet the study objectives prior to distributing copies to employees.

In the past, we have typically conducted these orientation sessions in person, onsite, and at various client locations. We have experience in conducting business virtually and have found that it can be a much more efficient and cost effective approach of our clients. We can provide the City with many technological options to ensure a smooth process, as we have with many of our clients during the last two years.

Examples include:
 Orientations: Providing more flexible options for employee orientation sessions by offering fewer options per day over a higher number of days to accommodate employee schedules; onsite meetings require a larger number of daily sessions over a more limited number of days.  FAQs: Preparing a series of FAQ's for each study which are made available to employees after the orientation sessions.
 Recording meetings: Videotaping our employee orientation sessions (we also do this for onsite sessions) for employees who cannot attend a session; or simply recording a video-conference orientation session that employees could watch later.
 Chat lines: Training our staff on the use of communication tools such as chat lines; we intersperse our employee orientation session presentations with multiple points when questions can be asked.
 Post-meeting help: Remaining in the orientation session for about 5-10 minutes after it has "officially" ended in the event some employees want to stay behind to ask questions.  Safeguards: For employee interviews, as we generally do, we prepare the schedules of dates and times for each employee and the client coordinates scheduling employees with departments, using agreed upon meeting options for employees. Safeguards are in place to ensure that only the employee/ employees (for group interviews) in that time slot can access the meeting, such as virtual "waiting rooms."
 Telephone support: Providing a direct telephone number for the K&A Project Manager to departments in the event there are scheduling or access issues.

DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F Classification and Total Compensation Study Proposal
City of Gardena
2835 Seventh Street, Berkeley, California 94710 | 510.658.5633 | www.KoffAssociates.com 11  Time between meetings: Scheduling 10-15 minutes between meetings, versus on-site back-toback meetings; this change results in slightly fewer meetings per day, but provides a less "hurried" nature to the meetings; and because the meetings are not onsite, clients do not need to reserve multiple meeting rooms for multiple days.

Our clients have received these operational changes very positively. We continue to ask our clients for feedback so we can implement continuous improvements. We recognize not all clients have the same technology as we do, which means we must provide viable technology options. While we provide multiple options, the expertise of our associates in asking relevant and probing questions of each study participant to better understand each employee's work is critical to the job evaluation interview process (see more information regarding employee interviews below). Our client-centric approach and methodology does not change with the venue.

Deliverable C. Collection and Review of PDQs
We recommend giving employees in the same classification the option of collaborating on completing a PDQ together, if the employees so choose. At the same time, we will invite employees to complete an individual PDQ if they prefer and if they wish to be interviewed separately. We provide an electronic version of our questionnaire so that employees can more easily complete it. Employees complete the questionnaire and then send it to their supervisor for review, comment, and signature. We typically require a second level of review by the next level of management in the reporting structure. This ensures that all staff have an opportunity to provide information as to what the nature of the job is for each job classification.

Upon receipt of the PDQs in our office, K&A staff will review and analyze the PDQs in detail along with other documentation to obtain an understanding of the duties and responsibilities assigned to each position.

Deliverable D. Interviews with Employees, Supervisors, and Management Interviews will be scheduled with employees. Because this is a critical step in the information-gathering and educational process, we typically recommend scheduling interviews with at least one employee, in each classification. We expect that the majority of interviews will be individual. However, we do invite employees in multi-incumbent classifications to choose either individual interviews or to be interviewed together as a group, if the work they perform is sufficiently similar. We want to ensure that the process is designed to make employees feel comfortable to speak openly and to have a voice, whether they prefer to speak with us individually or as a group.

Interviews will then be held with supervisory and management staff (division managers, department heads, etc.), who will clarify their own responsibilities and/or confirm the information we have received in the interviews with their staff (we allow more time for these interviews).

The purpose of the interviews is to clarify and supplement the questionnaire data and to respond to potential perception differences regarding roles, tasks, scope, and supervisory responsibilities. The appropriateness of the following will be assessed:
 Work being completed and relationships of positions to each other within a division/department as well as across the organization; and  Classification structure and reporting structure.

DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F Classification and Total Compensation Study Proposal
City of Gardena
2835 Seventh Street, Berkeley, California 94710 | 510.658.5633 | www.KoffAssociates.com 12 Deliverable E. Classification Concept and Preliminary Allocation Prior to developing detailed class descriptions, our job evaluation will result in a classification concept and employee allocation document that will be submitted to the City for review and approval. We will compare changes in business need and operations, as well as any reorganizations, with the established classification system and job families as well as review internal relationships between classificationsto define the reasons for, and effects of, the proposed changes.

Our job analysis method is the whole position analysis approach. Objective factors in the whole position job analysis methodology include:

1. Decision making/judgment

2. Difficulty and complexity of work

3. Supervisory responsibilities

4. Non-supervisory responsibilities

5. Minimum qualifications

6. Working conditions/risk factors

7. Contacts
This document will list broad class concepts and highlight where significant changes may be recommended, such as creating or collapsing class series in the same functional area and/or separating or combining classifications assigned to different functional areas. We will review and analyze potential career ladders and promotional opportunities, including clearly delineated and distinguished levels within classification series. We will also review, and update established titling guidelines for the studied classifications for appropriate and consistent titling.

A detailed, incumbent-specific allocation list for each position included in the study will be prepared, specifying current and proposed classification title and the impact of our recommendations (reclassification – upgrade or downgrade, title change, or no change).

After we have completed this process, a meeting will be arranged to review any recommended changes to the classification plan with the Study Project Team and department heads.

Deliverable F. Draft Class Description Development
After preliminary approval of the class concepts and allocation lists, new and/or updated class descriptions will be developed for each proposed classification, following the format approved by the City.

From the review of the PDQs and employee interviews, we will update duties, responsibilities, and minimum qualifications of each class specification, as necessary. We will develop new class specifications if duties, responsibilities, and minimum qualifications have changed significantly, and/or if we recommend new classifications/class levels, and/or if operational changes, business needs, or reorganizations, have occurred.

Following EEO Uniform Guidelines, we will review, analyze, and update, as appropriate, knowledge, skills, abilities, education and experience, position definitions, purpose, distinguishing characteristics, supervision received and exercised, position functions and special requirements including licensing and certifications that are required and desirable. We will address relevance and hierarchical consistency of each classification and each class series.

DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F Classification and Total Compensation Study Proposal
City of Gardena
2835 Seventh Street, Berkeley, California 94710 | 510.658.5633 | www.KoffAssociates.com 13 We will also review and update physical demands based on the most typical job functions of each classification in accordance with the ADA.

Finally, we will review each classification’s typical job functions and determine exempt vs. non-exempt status in accordance with “white collar” exemptions under the FLSA.

Deliverable G. Facilitation of Draft Class Description Review and Employee Feedback Process A draft copy of the revised/new class description with allocation recommendation will be submitted to the Project Team and subsequently to each department head so they may provide comments and concerns regarding any modifications to the classification structure and specifications.

Deliverable H. Classification Plan and Draft of Interim Report and Final Report A Draft Interim Report of the Classification Study will be completed and submitted to the Study Project Team for review and comment. The report will contain:
 Classification recommendations for each studied position, including documentation regarding study goals and objectives, classification methodology, approach, and process as well as all findings, analysis, and resulting recommendations;  The recommended allocation list, classification title changes, job family and career ladder/career growth issues, reporting relationships, and other factors will all be included;
 The recommended classification structure will be in alignment with current business/ operational needs of the City; and
 Classification concepts and guidelines as well as methods used to determine appropriate classification and level, methods for logical progression of movement between classifications, distinguishing characteristics and other pertinent information for implementation and continued maintenance of the recommendations will be detailed.

Once we have received the City’s comments regarding the Draft Interim Report and have made any necessary changes, a Final Classification Report will be developed.

PHASE II: TOTAL COMPENSATION STUDY
Deliverable A. List of Comparator Agencies, Benchmark Classifications, and Benefits to be Collected During the initial meeting with the Study Project Team, we will discuss and agree to the compensation study factors. We will confirm appropriate, logical and defensible comparator agencies that will be included in the external market survey, which will be the foundation for ensuring that the City’s salaries for the studied classifications are competitively aligned with the external labor market. We will also confirm those classifications that will be surveyed in the market (i.e., benchmark classifications), with the intention of internally aligning the remaining classifications with those that were surveyed.

Finally, we will determine the list of benefits that the City wants to include in the total compensation data gathering process.

1. Determination of Comparator Agencies
The selection of comparator agencies is a critical step in the study process. It is our understanding that the City has bargaining unit agreements which stipulate agencies to be used in surveys, and the budget proposed for this study assumes up to 12 comparator agencies. We typically use the DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F Classification and Total Compensation Study Proposal
City of Gardena
2835 Seventh Street, Berkeley, California 94710 | 510.658.5633 | www.KoffAssociates.com 14 following factors to identify appropriate comparators and will receive approval before proceeding with the total compensation study.

Our recommended methodology is that we involve management, Human Resources, employee representation, and the City Council, in the decision-making process of selecting which comparable agencies are included, PRIOR to beginning the study. Our experience has shown that this is the most successful approach. The factors that we typically review when selecting and recommending appropriate comparator agencies include:
 Organizational type and structure – While various organizations may provide overlapping services and employ some staff having similar duties and responsibilities, the role of each organization is somewhat unique, particularly in regard to its relationship to the citizens it serves and level of service expectation. During this iterative process, the City’s current/ previous list of comparators, if any, and the advantages/disadvantages of including them or others would be discussed.
 Similarity of population served, City demographics, City staff, and operational budgets – These elements provide guidelines in relation to resources required (staff and funding) and available for the provision of services.
 Scope of services provided – While having an organization that provides all of the services at the same level of citizen expectation is ideal for comparators, as long as the majority of services are provided in a similar manner, sufficient data should be available for analysis.

When reviewing this factor, the City’s unique services would be evaluated in order to ensure that the majority of comparators provide the same services. This ensures that each comparator yields a sufficient number of matches for the City’s jobs.  Labor market – The reality of today’s labor market is that many agencies are in competition for the same pool of qualified employees, because large portions of the workforce don’t live in the communities they serve, are accustomed to lengthy commutes, and are more likely to consider changing jobs in a larger geographic area than in the past. Therefore, the geographic labor market area (where the City may be recruiting from or losing employees to) is taken into consideration when selecting potential comparator organizations. As part of this analysis, we will determine whether the City has identified agencies that it competes with for qualified talent; those agencies are taken into consideration for purposes of our analysis. It is important to understand and consider the City’s competitive landscape and include agencies in the study to whom the City loses talent.
 Cost-of-living – The price of housing and other cost-of-living related issues are some of the biggest factors in determining labor markets. We review overall cost-of-living of various geographic areas, median house prices, and median household incomes to determine the appropriateness of various potential comparator agencies.

We typically recommend using 10-12 comparator agencies for all survey benchmarks in order to achieve statistical significance but are flexible and can easily use a different approach based on the City’s preferences.

2. Determination of Benchmark Classifications
In the same collaborative manner as described in Step 1 above, we will work with the City’s stakeholders to select those classifications that will be surveyed. “Benchmark classes” are ordinarily chosen to reflect a broad spectrum of class levels. In addition, those that are selected normally include classes that are most likely to be found in other similar DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F Classification and Total Compensation Study Proposal
City of Gardena
2835 Seventh Street, Berkeley, California 94710 | 510.658.5633 | www.KoffAssociates.com 15 agencies, and therefore provide a sufficient valid data sample for analysis. Internal relationships will be determined between the benchmarked and non-benchmarked classifications and internal equity alignments will be made for salary recommendation purposes. Due to the fact that the labor market typically yields reliable data, we recommend using approximately 60-65% of all classifications as benchmarks but we are happy to use a different model.

3. Determination of Salary and Benefits Data to Be Collected In addition to base salaries, benefit data elements for a total compensation study normally include at least the following (which are generally available to all staff in a specific job classification):
 Monthly Salary – The top of the normal, published salary range. All figures are presented on a monthly or annual basis. We normalize the salary data to reflect number of hours in the work week and/or roll-up of retirement or other benefits in base salaries.  Employee Retirement – This includes two figures: the amount of the employee’s State or other public or private retirement contribution that is contributed by the agency and the amount of the agency’s Social Security contribution.
 Insurance – This typically includes Health, Dental, Vision, and other insurance coverage.  Leave – Other than sick leave, which is usage-based, leave is the amount of days off for which the organization is obligated. We will discuss with the City whether leave days/hours should be converted to direct salary cost in dollars or represented in days/hours.  Vacation: The number of vacation days available to all employees after five years of employment.
 Holidays: The number of holidays (including floating) available to the employee on an annual basis.
 Administrative/Personal Leave: Administrative leave is normally the number of days available to management staff to compensate for the lack of payment for overtime.

Personal leave may be available to other groups of employees to augment vacation or other time off.
 Deferred Compensation – We report any employer contribution made on the employee’s behalf, whether dollar amount or percentage of salary, which does not require an employeematching contribution. We can also report employer contributions that do require an employee match and would do so as a separate report.
 Other – This category includes any other benefits that are available to all employees within a classification and not already specifically detailed.

Deliverable B. Data from Comparators and Preliminary Analysis of Data K&A does not collect market compensation data by merely sending out a written questionnaire. We find that such questionnaires are often delegated to the individual in the department with the least experience in the organization and given a low priority. Our experienced compensation analysts conduct all of the data collection and analysis to ensure validity of the data and quality control. This approach also ensures that we compare job description to job description and not just job titles, therefore ensuring true “matches” of at least 70%, which is the percentage we use to determine whether to include a comparator classification or not.

As mentioned above in the Classification methodology, our job analysis method is the whole position analysis approach.

DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F Classification and Total Compensation Study Proposal
City of Gardena
2835 Seventh Street, Berkeley, California 94710 | 510.658.5633 | www.KoffAssociates.com 16 We typically collect classification descriptions, organization charts, salary schedules, personnel policies, budgets, master plans, operational information, MOUs, and other information via website, by telephone, or by an onsite interview. With the prior knowledge from the data gathered directly from each comparator agency and our experience in the public sector human resources field, our compensation analysts make preliminary “matches” and then schedules appointments by telephone, or sometimes in person, with knowledgeable individuals to answer specific questions. We find that information collected using these methods has a very high validity rate and allows us to substantiate the data for employees, management, and governing bodies.

Data will be entered into spreadsheet format designed for ease of interpretation and use. The information will be presented in a format that will identify the comparator positions used for each classification comparison. Information will be calculated based upon both average and median figures allowing the City to make informed compensation decisions. Other elements of the compensation survey report are agencies surveyed; comparable class titles; salary range maximum/control point; number of observations; and percent of the City’s salary range is above/below the market values.

In addition, we will include any type of statistical representation and analysis that the City desires such as 60th, 70th, or any other percentiles per the City’s compensation philosophy.

Benefits data will be displayed in an easy-to-read format. You will receive three sets of spreadsheets per classification, one with base pay, one with the benefits detail, and one with total compensation statistical data. In addition, we are often asked to collect “other” benefits (as listed in the benefits section above), which we typically report on a separate spreadsheet.

Deliverable D. Draft Compensation Findings/Additional Analysis/Study Project Team Meetings As part of our transparent approach and communication strategy to ensure organizational buy-in to the study, we share the market survey with the organization. We first distribute our draft findings to the Study Project Team. After their preliminary review, K&A will meet with the Study Project Team and other stakeholders (including Human Resources, management, employees) to clarify data, to receive requests for reanalysis of certain comparators, and to answer questions and address concerns. This provides an opportunity for the Study Project Team and other stakeholders to review and question any of our recommended benchmark comparator matches. If questions arise, we conduct follow-up analysis to reconfirm our original analysis and/or make corrections as appropriate.

Deliverable E. Analysis of Internal Relationships and Alignment To determine internal equity for all studied positions, considerable attention will be given to this phase of the project. It is necessary to develop an internal position hierarchy based on the organizational value of each classification. Again, we utilize the whole position analysis methodology as described earlier.

By reviewing those factors, we will make recommendations regarding vertical salary differentials between classes in a class series, for example, as well as across departments. This analysis will be integrated with the results of the compensation survey and the City’s existing compensation plan.

The ultimate goal of this critical step in the process is to address any potential internal equity issues and concerns with the current compensation system, including compaction issues between certain classifications. We will create a sound and logical compensation structure for the various levels within each class series, so that career ladders are not only reflected in the classification system but also in the compensation system, with pay differentials between levels that allow employees to progress on a clear DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F Classification and Total Compensation Study Proposal
City of Gardena
2835 Seventh Street, Berkeley, California 94710 | 510.658.5633 | www.KoffAssociates.com 17 path of career growth and development. Career ladders will be looked at vertically, as well as horizontally, to reflect the City’s classification structure that was developed during the classification phase of the study, and to identify/resolve any compaction issues.

Deliverable F. Compensation Structure
Depending on data developed as a result of the internal analysis, we will review and make recommendations regarding internal alignment and the salary structure (set of salary ranges, salary differentials, steps within ranges, and/or alternative compensation plans) within which the classes are allocated, based upon the City’s preferred compensation model. In addition, we will develop externally competitive benefit comparisons for all classifications.

We will conduct a competitive pay analysis using the market data gathered to assist in the determination of external pay equity and the recommendation of a new base compensation structure, if desired. We will conduct a comparative analysis to illustrate the relationships between current pay practices and the newly determined market conditions and develop solutions to address pay equity issues, analyze the financial impact of addressing pay equity issues, and create a market adjustment implementation strategy supporting City goals, objectives, and budget considerations.

Draft recommendations will be discussed with the Study Project Team and management for discussions and decisions on overall pay philosophy and the practicality of acceptance and prior to developing an Interim Report.

Deliverable G. Final Report and Guidelines for Implementation Volume II (Draft Interim Report of the Compensation Study) will be completed and submitted to the Study Project Team for review and comment. The report will provide detailed compensation findings, documentation, and recommendations. The report will include:
 An executive summary of the compensation study results;  A set of all market data spreadsheets;
 A proposed Salary Range Placement document;
 A procedure to address employees whose base pay exceeds the maximum of their newly assigned pay range;
 Implementation issues and cost projections surrounding our recommendations; and  A guide for rules, policies and procedures for the City in implementing, managing and maintaining the compensation system, as appropriate.

Once all of the City’s questions/concerns are addressed and discussed, a Final Classification and Compensation Report will be created and submitted in the City’s preferred format. The Final Report will incorporate any appropriate revisions identified and submitted during the review of the draft report.

Deliverable H. Formal Appeals Process
Should the City have a formal appeals process regarding the allocation of positions to classifications and of classifications to salary ranges, this proposal does not cover time regarding a formal appeal process.

As mentioned above, however, our internal process usually addresses any of these issues.

Deliverable I. Final Presentation
Our proposal includes multiple meetings and weekly oral and written status/progress updates to the Study Project Team and a final presentation to the team, department heads, and the City Manager.

In order to conduct this study in the most timely and cost-effective manner, we ask for support in the following areas:
 Timely provision of written documentation, such as current class specifications, union contracts, organizational charts, budget documents, requests for audits, past studies, etc.;  Assistance in the notification and scheduling of orientation and other meetings and the provision of adequate interview space and resources;
 Assistance in the compilation of current descriptions with the PDQ; collecting and forwarding questionnaires; and in ensuring that materials are complete and returned in a timely manner;  Assistance in scheduling study project team, bargaining unit, management, employee audit, and other meetings; and
 Meeting agreed-upon timelines.

In terms of time commitment for City staff, we understand that the City hires an outside consultant to conduct and coordinate the entire effort. Therefore, it is our goal to reduce the time commitment of City staff as much as possible and to only request assistance in the coordination of some of the steps in the process, such as scheduling employee orientation meetings, duplicating PDQs, scheduling employee interviews/desk audits, disseminating information, and in general, being a channel of communication between our firm and employees.
 Communication with the City:

Our typical communication model includes at least weekly or biweekly written status updates to keep the City informed on where we are during each phase of the project.

In addition, the study includes a significant number of meetings with the Study Project Team, human resources, management, employees, and other stakeholders, as desired. The meetings and “stakeholder touch-points” that we recommend ensure understanding of the project parameters, enhance accurate intake and output of information, and foster a collaborative and interactive approach that will result in greater buy-in for study recommendations. This interactive approach, although time-consuming, has resulted in almost 100% implementation success of K&A’s studies.  Post-Implementation Consultation and Support:

We are committed to providing the City with the highest-quality product and service. Providing ongoing consultation and support after study implementation is a service that is included in our professional fees and a continued relationship-building aspect of our client relationship that we highly value.

We often find that clients will call or email with follow-up questions and to discuss certain aspects of the study, ask why decisions and recommendations were made, and other important components of the study. We consider post-implementation support as part of our customer service.

Should the City request any additional onsite meetings and/or training after implementation of the study and/or other specific, identifiable work efforts, such as position reclassification studies, creating new class descriptions, or conducting annual surveys, we would honor our composite hourly rate for actual hours spent at the City. However, from experience, we expect that most follow-up support will be conducted via telephone, email and is absolutely included in our “Not To Exceed Fee” for this project.

The meetings and communications with stakeholders that we recommend ensure understanding of the project parameters, enhance accurate intake and output of information, and encourage a collaborative and interactive approach that will result in greater buy-in for study recommendations. This interactive approach, although time-consuming, has resulted in almost 100% implementation success of K&A’s studies.

We believe in an interactive and collaborative process with the whole organization and in a high level of stakeholder contact and interaction to ensure organizational buy-in of the study throughout the entire process. Following are the major milestones at which we touch base with Human Resources, employees, managers, employee representation, and other stakeholders, as appropriate:
 Initial study kick-off and employee/management orientation meetings;  PDQ completion and review;
 Employee and management interviews;
 Management, and Human Resources review of draft class descriptions;  Contact with management to address final classification issues;  Stakeholder input regarding a list of appropriate comparator agencies, benchmark classifications, and benefits to be collected;
 City stakeholder review of compensation study data and contact with them to address any challenges to the market comparables we identified for each classification;  Stakeholder input on internal salary relationship analysis and recommendations; and  Stakeholder input regarding final compensation plans and structure recommendations.

These steps will ensure that the study results in a product that is accepted and trusted by all levels within the organization. Beyond sound mechanics, our approach includes sufficient communication steps to ensure that the study methodology is understood and the results are regarded as expert, impartial, and fair.

DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F Classification and Total Compensation Study Proposal
City of Gardena
2835 Seventh Street, Berkeley, California 94710 | 510.658.5633 | www.KoffAssociates.com 20 TIME REQUIREMENTS
Our professional experience is that classification and compensation studies of this scope and for this size organization take approximately eight months to complete, allowing for adequate PDQ completion, interview time, classification description review and/or development, compensation data collection and analysis, review steps by the City, the development of final reports, any appeals, and presentations.

The following is a suggested timeline (which can be modified based on the City’s needs):

Deliverables Phase I - Classification Study Completion
A. Meetings with Study Project Team and Management Staff and Initial Documentation Review Week 1
B. Orientation Meetings with Employees and Distribution of PDQ Week 3 C. Collection and Review of PDQs Week 9
D. Interviews with Employees, Supervisors, and Management; Position Allocations for Study Employees Week 12
E. Meetings with Department Heads re Final Recommendations Week 16 F. Draft Class Description Development Week 22
G. Facilitation of Draft Class Description Review Week 24 H. Classification Plan and Draft of Interim Report and Final Report Week 32 I. Final Presentation As Scheduled
Deliverables Phase II – Total Compensation Study Completion A. List of Comparator Agencies and Benchmark Classifications Week 3 B. Data Collection, Analysis and Preliminary Data Review Week 20 C. Draft Compensation Findings and Meeting with Project Team Week 22 D. Internal Job Analysis Week 26
E. Compensation Structure Development Week 26
F. Preparation of Draft Final and Final Report and Deliverables Week 32 G. Final Presentation As Scheduled
DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F Classification and Total Compensation Study Proposal
City of Gardena
2835 Seventh Street, Berkeley, California 94710 | 510.658.5633 | www.KoffAssociates.com 21 COST PROPOSAL
We have often found our process requires a very high level of time commitment, which sometimes results in a higher proposal cost. We believe that our methodology and implementation success rate is attributable to the significantly greater level of contact we have with employees, employee representation, management, and the governing body. The time we commit to working with the employees (orientations and briefings, meetings with employees via personal interviews, sharing of compensation survey data, management review and feedback processes, etc.) results in significantly greater buy-in throughout the process and no formal appeals at the end of the study.

In fact, our firm has only had a handful of formal appeals to any of our studies in our 39 years in business.

It has been our experience that the money and time invested in stakeholder communication throughout the study are money and time saved during implementation. Numerous times our firm has been hired after an agency has gone through an unsuccessful study whose results were rejected or appealed and whose implementation was very controversial. The result was a divided organization with hostility and animosity between employees/employee representation and management. Whenever our firm was hired after such an unfortunate experience, study stakeholders were amazed at our open and all-inclusive process, our efforts to elicit equal stakeholder input, and our development of recommendations that were accepted as fair and reasonable and understood by management, employees, and the governing body.

Our success rate is also attributable to the fact that we have 39 years of experience working with employees of all types of backgrounds, educational levels, and work experiences, and we are accustomed to successfully communicating with and educating them throughout the process.

Over the last few years, K&A and all our clients have become accustomed to conducting our organizational, classification, and compensation studies virtually. From that experience, we have learned that studies can be conducted successfully by using virtual technologies and performing the work remotely. We have also learned that this represents a significant cost savings for our clients, both in terms of consultant travel time and travel expenses, as well as less disruption and reduced non-productivity for the client’s workforce. We have several technological solutions that can easily facilitate the entire process (see proposal narrative above). Conducting meetings and orientations virtually means that the client’s employees do not have to spend time traveling from one location to another and will not be pulled away from their workstations for lengthy periods of time. They can simply click on a link or call in from a phone to participate. This approach also represents significantly less logistical planning on part of the client in order to reserve meeting rooms and making space available for large employee groups, as well as multiple consultants coming onsite to conduct interviews within a condensed period of time. Conducting orientations and interviews virtually provides us with much more flexibility in scheduling and accommodating multiple different shifts and schedules among a large workforce.

In addition, K&A strives to be as “green” an organization as possible and we are certainly concerned about our carbon footprint. We find that multiple trips to client sites that can sometimes involve multiple consultants flying on planes and/or driving cars, is not as environmentally conscious as we would like to be. Considering the effectiveness of virtual meetings, especially when meetings are only one hour or oneand-a-half hours at a time, onsite travel does appear to create a larger footprint than necessary. This can especially be true for final presentations to leadership teams and governing bodies that are often less than 60, or even 30, minutes long.

DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F Classification and Total Compensation Study Proposal
City of Gardena
2835 Seventh Street, Berkeley, California 94710 | 510.658.5633 | www.KoffAssociates.com 22 For purposes of this cost proposal, we are assuming that all meetings and presentations will be conducted virtually/remotely and no onsite travel to City offices will occur. Should the City desire onsite meetings, we will be happy to provide our per diem cost for onsite meetings based on travel time and market rate travel cost at the time.

Task/
Deliverable
Phase I - Classification Study
Estimated No. of Positions to be Reviewed – 138 Cost
A. Meetings with Study Project Team and Management Staff and Documentation Review $1,480
B.

Orientation Meetings with Employees and Distribution of PDQs; note that PDQ’s will be short version to facilitate completion and that 138 positions have been identified as requiring this level of review (see Attachment A); where possible we will use focus group sessions in Public Works (no new PDQ’s required for this group but we will review those from the original study) and Recreation and Human Services $4,440
C. Collection and Review of PDQs - based on 130 PDQ’s to be reviewed $7,400 D.

Interviews with Employees, Supervisors, and Management- based on an interview rate of 80% - or a total of 120 employees, using group/focus group sessions where needed; the budget for this task includes allocations for proposed study positions in Appendix A only.

Current employees who did not complete a PDQ (including those who joined the City after the initial study) will be placed in the most relevant classification recommended in the original study and/or will be assigned to the same classification as their current peers.

New classification specifications and/or changed allocations will be provided only for the total number of positions identified in Appendix A.
$28,860
E.

Meetings with Department Heads to Discuss Original Classification Plan and Concepts and Extent of Final Recommended Classifications – research and resolve classification and allocation recommendation issues.
$8,510
F.

Draft Class Description Development
Completed: We have developed 77 of the original 103 classifications recommended from the 2019; based on department feedback, we anticipate another 60 will need to be prepared (for a total of 137); and some modification of the original 77 will be needed.

Work to be done: Develop approximately 60 new classification specifications; minor revisions to 77 classification specifications
$37,370
G.

Facilitation of Draft Class Description Review and Feedback Process Proposed work: We recommend working with HR and Management to review all 134 classifications; due to the amount of time that has passed, we anticipate this process to take a more significant amount of time, i.e., approximately one hour per classification.

Not included: At this time, we are not budgeting time to work with individual employees to receive feedback from them regarding the new classifications, $24,790
DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F Classification and Total Compensation Study Proposal
City of Gardena
2835 Seventh Street, Berkeley, California 94710 | 510.658.5633 | www.KoffAssociates.com 23 Task/
Deliverable
Phase I - Classification Study
Estimated No. of Positions to be Reviewed – 138 Cost
we anticipate that the City would handle that; this is due to the fact that 165 have left the City since the last study and 87 employees are new. If the City would like our assistance, we would do this work at our standard hourly rate.

H. Classification Plan and Draft of Interim Report and Final Report $6,660 I. Final Presentation (virtual meeting) $740
Additional unanticipated meetings with study stakeholders $1,850 Total Classification Project Fee $122,100
Combined professional and clerical composite total $122,100 Task/
Deliverable Phase II - Compensation Study Cost
A. Initial Documentation Review, Meetings with Study Project Team and Management Staff
$2,220
B. List of Comparator Agencies, Benchmark Classifications, and Benefits to Be Collected
$2,960
C.

Data Collection, Analysis and Preliminary Data Review
Up to 75 benchmarks, up to 12 comparator agencies, total compensation, including benefits
$55,500
D. Draft Compensation Findings and Meeting with Project Team $12,800 E. Internal Job Analysis $2,220
F. Compensation Structure Development $2,960
G. Preparation of Draft Final and Final Report and Deliverables $2,960 H. Final Presentation (Virtual) $1,110
Anticipated hours for additional unscheduled meetings and phone calls $1,110 Combined professional and clerical composite total $83,840 Expenses are included in the composite hourly rate: N/A Expenses include but are not limited to duplicating documents, binding reports, phone, supplies, postage, parking, meals, travel time, etc.

TOTAL PROJECT COST NOT TO EXCEED: $205,940
Our cost proposal does not include time to support the City during any labor negotiations that may follow this study. If we are needed for this work, our composite hourly rate will apply and we will charge on a time-and-materials basis.

DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F Classification and Total Compensation Study Proposal
City of Gardena
2835 Seventh Street, Berkeley, California 94710 | 510.658.5633 | www.KoffAssociates.com 24 Billing Structure
The following is how the City will be invoiced upon the completion of each milestone:

Milestone Phase I - Classification Deliverables Amount
Milestone #1 10% of total project fee will be charged upon execution of the contract $12,210 Milestone #2 Completion of Deliverables A, B, C and D $37,962 Milestone #3 Completion of Deliverables E and F $41,292 Milestone #4 Completion of Deliverable G $22,311
Milestone #5 Remainder of project fee upon delivery of final report - Deliverables H and I, and additional meeting fee $8,325
Milestone Phase II - Compensation Deliverables Amount
Milestone #1 10% of total project fee will be charged upon execution of the contract $8,384 Milestone #2 Completion of Deliverables A, B, and C $54,612 Milestone #3 Remainder of project fee upon delivery of final report – Deliverables D, E, F, G and H and additional meetings
$20,844
TOTAL: $205,940
DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F Classification and Total Compensation Study Proposal
City of Gardena
2835 Seventh Street, Berkeley, California 94710 | 510.658.5633 | www.KoffAssociates.com 25 CONTRACTUAL CONSIDERATIONS
We will be pleased to sign the City’s professional services agreement for a Classification and Compensation Study. We respectfully request that the City will allow for a period of negotiation of certain terms in the professional services contract related to liability, indemnity, insurance, and other terms. We have found that we have always come to an agreement with all of our clients in the past and appreciate the City’s flexibility in reviewing certain terms in a collaborative fashion between our legal counsels.

It is our practice to provide the coverage below in lieu of the City contract insurance language. We therefore propose to replace the insurance language in the RFP’s sample agreement with coverage language provided by Gallagher as follows (we attach our Memorandum of Insurance for your review as well):

Gallagher shall at all times during the term of this Agreement and for a period of two (2) years thereafter, obtain and maintain in force the following minimum insurance coverages and limits at its own expense:
• Commercial General Liability (CGL) insurance on an ISO form number CG 00 01 (or equivalent) covering claims for bodily injury, death, personal injury, or property damage occurring or arising out of the performance of this Agreement, including coverage for premises, products, and completed operations, on an occurrence basis, with limits no less than $2,000,000 per occurrence; • Workers Compensation insurance with statutory limits, as required by the state in which the work takes place, and Employer’s Liability insurance with limits no less than $1,000,000 per accident for bodily injury or disease. Insurer will be licensed to do business in the state in which the work takes place;
• Automobile Liability insurance on an ISO form number CA 00 01 covering all hired and non-owned automobiles with limit of $1,000,000 per accident for bodily injury and property damage; • Umbrella Liability insurance providing excess coverage over all limits and coverages with a limits no less than $10,000,000 per occurrence or in the aggregate; • Errors & Omissions Liability insurance, including extended reporting conditions of two (2) years with limits of no less than $5,000,000 per claim, or $10,000,000 in the aggregate; • Cyber Liability, Technology Errors & Omissions, and Network Security & Privacy Liability insurance, including extended reporting conditions of two (2) years with limits no less than $2,000,000 per claim and in the aggregate, inclusive of defense cost; and
• Crime insurance covering third-party crime and employee dishonesty with limits of no less than $1,000,000 per claim and in the aggregate.
• All commercial insurance policies shall be written with insurers that have a minimum AM Best rating of no less than A-VI, and licensed to do business in the state of operation. Any cancelled or nonrenewed policy will be replaced with no coverage gap, and a Certificate of Insurance evidencing the coverages set forth in this section shall be provided to Client upon request.

DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F Classification and Total Compensation Study Proposal
City of Gardena
2835 Seventh Street, Berkeley, California 94710 | 510.658.5633 | www.KoffAssociates.com Signature Page
Koff & Associates intends to adhere to all of the provisions described above.

This proposal is valid for 90 days.

Respectfully submitted,
By: KOFF & ASSOCIATES
State of California

Georg S. Krammer November 15, 2023
Managing Director, Compensation and Rewards Consulting
DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F

APPENDIX A
K&A Staff Resumes
DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F Key Personnel Biographies
Georg S. Krammer, M.B.A., S.P.H.R.

Managing Director
Georg brings over 22 years of management-level human resources experience to Koff & Associates with an emphasis in classification and compensation design; market salary studies; organizational development; executive recruitment; performance management; and employee relations, in the public sector and in large corporations as well as small, minority-owned businesses.

After obtaining a Master of Arts in English and Russian and teaching credentials at the University of Vienna, Austria, Georg came to the United States to further his education and experience and attained his Master of Business Administration from the University of San Francisco. After starting his HR career in Wells Fargo’s college recruiting department, he moved on to HR management positions in the banking and high-tech consulting industries. He had five years in the private sector where he served as an HR Manager, and Administrative Officer, and then HR Director before entering the public sector. With his wide-ranging and deep experience as a well-rounded senior HR generalist, his education in business and teaching, his depth and breadth of experience with public sector HR needs, programs, and functions, Georg’s contribution to K&A’s variety of projects greatly complements the Koff & Associates Human Resources and Recruitment Services team.

He has spearheaded several hundred classification, compensation, organizational, strategic planning, etc., studies for hundreds of cities, towns, counties, and special districts throughout the State of California and has contributed to more than quadrupling the size of Koff & Associates as a result of the success of his projects and the subsequent expansion of the business through referrals from satisfied clients. Georg joined K&A in 2003 and has been the firm’s Chief Executive Officer since 2005.

In the last few years, Georg has been the Project Director/Key Personnel for classification and/or compensation studies, organizational assessments, and other HR projects, at the following agencies:
• Cities/Towns: Alameda, American Canyon, Anaheim, Arroyo Grande, Bellflower, Campbell, Citrus Heights, Coachella, Concord, Cotati, Gilroy, La Cañada Flintridge, Lomita, Los Altos, Los Altos Hills, Menifee, Menlo Park, Morro Bay, Murrieta, National City, Newport Beach, Oakland, Oxnard, Palm Desert, Perris, Pleasant Hill, Port Hueneme, Redlands, Redwood City, Sacramento, San Diego, San Jose, San Marino, Santa Ana, Santa Barbara, Santa Clara, Saratoga, Sausalito, Seal Beach, Spokane (Washington), Vallejo, West Sacramento, Westminster, Yucca Valley, Yreka • Counties: Bernalillo (New Mexico), Fresno, Monterey, Orange, Placer, San Joaquin, Sonoma, and Trinity.
• Courts: Habeas Corpus Resource Center, Superior Court of Kern County, Superior Court of Orange County, Superior Court of Santa Barbara.
• Education: College of the Sequoias, Excelsior Charter Schools, First 5 Alameda, Foothill-De Anza Community College District, Riverside Community College District, West Valley Mission Community College District.
• Special Districts:
o Air Quality: Monterey Bay Air Resources District, South Coast Air Quality Management District o Community Services District: Cosumnes CSD, Desert Recreation District, Hayward Area Recreation and Park District, Helendale Community Services District, Heritage Ranch Community Services District, Incline Village General Improvement District, Phelan-Pinon Hills Community Services District, Town of Discovery Bay CSD, Truckee Donner Recreation & Park District, Tualatin Hills Park & Recreation District
DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F o Fire and Police Protection: East Contra Costa Fire Protection District, Orange County Fire Authority, Sacramento Metropolitan Fire District
o Housing/Economic Development: Alameda Housing Authority, Housing Authority of the City of San Buenaventura, Housing Authority of the County of Alameda, Housing Authority of County of Santa Barbara, Housing Authority of County of San Luis Obispo, Oakland Housing Authority, Santa Clara County Housing Authority, San Bernardino County Housing Authority o Open Space: Local Agency Formation Commission (LAFCO) of Santa Clara County o Public Utilities: East Bay Municipal Utility District, Inland Empire Utilities Agency, North Tahoe Public Utility District, Southern California Public Power Authority o Transportation: Alameda County Transportation Commission, El Dorado County Transit Authority, Golden Gate Bridge Highway and Transportation District, Livermore Amador Valley Transit Authority, Long Beach Transit, Marin Transit District, Metropolitan Transportation Commission, Ontario International Airport, Orange County Transportation Authority, Port of Hueneme, Port of Long Beach, Port of Oakland, Riverside County Transportation Commission, Sacramento Area Council of Governments, Sacramento Regional Transit District, San Bernardino County Transportation Authority, San Bernardino International Airport, San Francisco Bay Area Water Emergency Transportation Authority, Santa Barbara County Association of Governments, Santa Clara Valley Transportation Authority, Sonoma-Marin Area Rail Transit, Transportation Corridor Agencies, Western Riverside Council of Governments o Wastewater: California Association of Sanitation Agencies, Central Marin Sanitation Agency, Encina Wastewater Authority, Leucadia Wastewater District, Napa Sanitation District, Ojai Valley Sanitary District, Orange County Sanitation District, Oro Loma Sanitary District, Truckee Sanitary District, Union Sanitary District, Vallejo Flood and Wastewater District o Water: Bay Area Water Supply & Conservation Agency, Beaumont Cherry Valley Water District, Central Coast Water Authority, Cucamonga Valley Water District, Eastern Municipal Water District, Joshua Basin Water District, Marina Coast Water District, Metropolitan Water District of Southern California, Min-Peninsula Water District, Mojave Water Agency, Monte Vista Water District, Mt. View Sanitary District, Oakwood Lake Water District, Paradise Irrigation District, Rancho California Water District, San Bernardino Valley Water Conservation District, Santa Clarita Valley Water Agency, Sonoma County Water Agency, South Coast Water District, State Water Contractors, Sweetwater Authority, Trabuco Canyon Water District, Vallecitos Water District, Valley County Water District, West Basin Municipal Water District, Western Municipal Water District, Zone 7 Water Agency
o Other: Cooperative Agricultural Support Services Authority, Los Angeles County Employees Retirement Agency, Orange County Mosquito & Vector Control District Debbie Owen, CCP
Project Manager
Debbie has over 28 years of experience providing classification and compensation services to public sector clients spanning local government sectors including cities, counties, special districts, and transit agencies.

Prior to beginning her public sector career, Debbie worked as a Compensation and Benefits Specialist in the private sector for five years.

In 1992, Debbie obtained her certification as a Certified Compensation Professional (“CCP”) from the American Compensation Association (now WorldatWork); to ensure current knowledge of compensation and benefits program trends and best practices, she maintains active membership in the WorldatWork organization.

DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F Debbie’s practitioner and project management experience has been primarily focused on the design and development of classification and compensation programs for a diverse range of public sector clients with varying project needs. For the last 20 years, Debbie has served in a project management capacity, working with clients to evaluate their classification and compensation systems and needs; she directs and reviews the work of project teams to provide clients with high quality deliverables consistent with best practices; and she prepares/delivers presentations designed to inform clients on study processes, activities, methodologies and outcomes.

Since joining K&A, Debbie has worked on classification and/or compensation studies, organizational assessments, and other HR projects for the following agencies, either as Co-Project Director or as a Project Manager:
• Cities/Towns: Bakersfield, Campbell, Coachella, Davis, El Monte, Gardena, Hemet, Long Beach, Murrieta, National City, Newman, Palm Desert, San José, Redwood City, Santa Clara, Seattle (WA), Spokane (WA), West Sacramento, Yreka. • Counties: Contra Costa, El Dorado, Fresno, Humboldt, Mendocino, Sonoma, Trinity. • Education: Los Angeles Unified School District, Riverside Community College District Victor Valley Community College District, Yuba Community College District. • Special Districts:
o Community Services Districts: El Dorado Hills Community Services District, Livermore Area Recreation and Parks District.
o Housing/Economic Development: Housing Authority of the County of San Bernardino, Housing Authority of Santa Clara County, Los Angeles County Development Agency (LACDA), San Diego Housing Commission. o Public Utilities: Sacramento Municipal Utility District. o Transportation: AC Transit, El Dorado County Transit Authority, Port of Oakland, San Francisco Bay Area Water Emergency Transportation Authority, Bay Area Rapid Transit (BART), Orange County Transportation Authority (OCTA), San Mateo County Transit District.
o Wastewater/Water: Beaumont-Cherry Valley Water District, Coachella Valley Water District, Cucamonga Valley Water District, Eastern Municipal Water District, Inland Empire Utility District, Leucadia Wastewater District, Napa Sanitation District, Sammamish Plateau Water District (WA), Sonoma County Water Agency, State Water Contractors, Sweetwater Authority, Trabuco Canyon Water District, Truckee Sanitary District, Western Municipal Water District. • Other: California State Auditor’s Office, Contra Costa County Employee Retirement Association, Orange County Mosquito and Vector Control District, Tri-City Mental Health Authority.

Debbie will serve as the Co-Project Director for this study; together with Georg, she will coordinate all of K&A’s efforts, will attend all meetings with the City, and will be responsible for all work products and deliverables.

Kari Mercer, SPHR
Project Manager
Kari has over 13 years of human resources experience serving on staff for private and public sector organizations in addition to serving in a consulting capacity. Her experience includes work in classification DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F and compensation, labor relations, MOU administration, policy development and administration, recruitment and examination, and general human resources administration.

As a human resources consultant, Kari has specialized in managing and conducting a diverse range of classification and compensation studies for public sector agencies throughout California and agencies in Arizona, New Mexico, Texas, and Maryland. As a project manager, she provides leadership to project teams and works closely with client stakeholder groups to ensure quality deliverables and successful project outcomes.

Since joining Koff & Associates, Kari has worked on a wide variety of classification and compensation projects for the following agencies:
• Cities/Towns: Anaheim, Arroyo Grande, Atascadero, Belmont, Hayward, Madera, Manteca, Merced, Milpitas, Oakland, Perris, Pleasant Hill, Redwood City, San Pablo, Santa Clara, Saratoga, Seal Beach, Seaside, Tracy, Vallejo
• Counties: El Dorado, Fresno, Humboldt, Merced, Monterey, Orange, San Joaquin • Special Districts: Coachella Valley Public Cemetery District, Cosumnes Community Services District, First 5 of Alameda County, Foothill-DeAnza Community College District, Housing Authority of the City of Santa Barbara, Housing Authority of the County of San Bernardino, Livermore Area Recreation and Park District, Mendocino Coast Recreation and Park District, Port of Oakland, Orange County Fire Authority, Santa Clara County Housing Authority, Superior Court of California-Kern County, Sweetwater Authority, Travis Unified School District, Truckee Sanitary District, West Valley Mission Community College District, Valley County Water District
She earned her B.S. degree in Business Administration with an emphasis on Human Resources Management at California State University, Fresno and is a certified Senior Professional in Human Resources (SPHR). Kari serves as a Personnel Commissioner for the City of Clovis and is a member of Central California SHRM.

Kari will provide managerial project support throughout this effort, including classification analysis, interviews with employees and management, compensation data collection and analysis, internal job analysis, development of recommendations, and implementation strategies.

Alyssa Thompson, Ph. D.

Senior Consultant
Alyssa has over 22 years of human resources experience in classification and compensation analysis and development, performance management, affirmative action program development, and recruitment.

Alyssa also has experience in designing and conducting quantitative and qualitative research studies.

Since joining K&A in 2007, Alyssa has led and worked on well over 300 classification, compensation, organizational assessment, and recruitment projects for cities, counties, and special districts, including but not limited to some of these more recent projects:
• Cities and Towns: Concord, Danville, Discovery Bay, Fremont, Hayward, Hillsborough, Los Altos Hills, Monterey, Napa, Oakland, Orange, Palm Desert, Piedmont, Redlands, Sacramento, San Diego, Santa Barbara, Santa Rosa, Vallejo • Counties: Bernalillo (New Mexico), Humboldt, Orange, Placer, San Joaquin, San Mateo, Solano, Tehama, Tuolumne
DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F • Special Districts:
o Community Services District: Cosumnes CSD, Hayward Area Recreation and Park District, Heritage Ranch CSD, Tualatin Hills Park & Recreation District (OR) o Fire and Police Protection: Sacramento Metropolitan Fire District o Housing/Economic Development: Housing Authority of the County of Alameda, Oakland Housing Authority, San Diego Housing Commission, Santa Clara County Housing Authority
o Open Space: Midpeninsula Regional Open Space District o Public Utilities: East Bay Municipal Utility District, Northern California Power Agency o Transportation: Alameda County Transportation Commission, Livermore Amador Valley Transit Authority, Metropolitan Transportation Commission, Ontario International Airport, Port of Hueneme, Port of Long Beach, Riverside County Transportation Commission, SACOG (Sacramento Area Council of Governments), Western Riverside Council of Governments
o Wastewater: Central Contra Costa Sanitary District, Central Marin Sanitation Agency, Encina Wastewater Authority, Orange County Sanitation District, Vallejo Flood and Wastewater District
o Water: Alameda County Water District, Bay Area Water Supply & Conservation Agency, Coastside County Water District, Contra Costa Water District, Dublin San Ramon Services District, Mid-Peninsula Water District, San Bernardino Valley Water Conservation District, Santa Clara Valley Water District, Santa Clarita Valley Water Agency, South Coast Water District, Valley County Water District, Zone 7 Water Agency
• Education: Alameda Unified School District, Berkeley Unified School District, Cutler-Orosi Unified School District, Foothill-De Anza Community College District, Mount San Antonio College, Salinas Union High School District, Travis Unified School District, West Valley Mission Community College District
• Courts: Habeas Corpus Resource Center, Superior Court of California-County of Orange She earned a Bachelor’s degree in Psychology with a minor in Sociology-Organizational Studies from the University of California, Davis, and a Ph.D. in Organizational Psychology from Alliant International University.

Alyssa will provide consultant support throughout the effort, including classification analysis, interviews with employees and management, compensation data collection and analysis, internal job analysis, development of recommendations, and implementation strategies.

Lindsay Christopher
Senior Consultant
Lindsay’s professional qualifications include ten years of experience working in the public sector, mostly with Alameda County. In her role as Human Resources Analyst, she was responsible for classification and compensation projects, as well as recruitment and selection, in a Civil Service, merit-based, environment.

Mostly recently, she continued to focus on classification and compensation projects at East Bay Regional Park District.

Since joining K&A in 2019, Lindsay has worked on studies for the following:

DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F • Cities: Gardena, Hemet, Milpitas, Tracy, Corona, Seattle (Library), Napa, Dinuba, Town of Truckee, san Leandro, Pleasant Hill, San Jose, Upland, Phoenix,
• Counties: Humboldt, Butte, Kings, San Diego, Contra Costa • Special Districts: Contra Costa County Employees’ Retirement Association, Greater LA County Vector Control District, Orange County Sanitation District, Purissima Hills Water District, Marin Municipal Water District, Housing Authority of the City of Santa Barbara, Tri-City Mental Health Authority, Victor Valley College, Buena Park Library District, East Bay Regional Park District, Tualatin Hills Park and Recreation District, Valley Water, San Luis and Delta Mendota Water Authority, Desert Recreation District, Santa Clara Valley Water District, Regional Government Services, Compton Community College District, Port of Oakland, LA County Development Agency, Albuquerque Housing Authority, Metropolitan Transportation Commission A Bay Area native, Lindsay earned her B.A. degree in Sociology with a concentration in Criminology from San Jose State University.

Lindsay will provide Senior H.R. Associate support throughout this effort, including classification analysis, interviews with employees and management, compensation data collection and analysis, internal job analysis, development of recommendations, and implementation strategies.

Monica Garrison-Reusch, B.A., M.B.A.

Consultant
Monica has over 15 years of human resource program experience, all of which have been spent serving as either a team consultant or project manager on projects working with public sector agencies. Monica’s primary professional focus over the last several years has been on classification and compensation practices.

Prior to joining K&A, Monica performed classification and compensation consulting services as either a team member or project manager on varied projects including large scale studies done for the Counties of Madera, Sacramento, Bernalillo (in New Mexico), and the California State Department of Personnel Administration. Monica also developed and served as a Co-Trainer for a two-day course on Classification and Compensation.

Monica’s depth of experience allows her to provide a broad range of human resources services to public agencies. She specializes in compensation projects focusing on both base salary and total compensation analysis studies. Monica has also worked on project teams conducting classification studies and organizational analysis, including performing the full range of classification analysis and conducting indepth survey and analysis of organizational structures and past organizational practices.

Since joining K&A, Monica has worked on studies for the following clients:
• Cities: Cotati, Crescent City, Pleasant Hill, Sacramento, Vallejo • Counties: El Dorado, Mendocino, Monterey, Trinity
• State: California State Auditor’s Office
• Special Districts: AC Transit, Cosumnes Community Services District, East Bay Municipal Utility District, Eastern Municipal Water District, El Dorado County Transit Authority, First 5 Contra Costa County, First 5 Santa Clara County, Hayward Area Recreation and Park District, Livermore Amador Valley Transit Authority, Mendocino Coast Rec and Park District, Mojave Water Agency, North Tahoe Public Utility District, Orange County Transportation Authority, State Water Contractors, Trabuco Canyon Water District DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F She earned an MBA with an emphasis in Marketing at Golden Gate University and a Bachelor of Science in Business Administration from the University of Southern California.

Monica will provide Senior H.R. Associate support for this project, including classification analysis, interviews with employees and management, compensation data collection and analysis, internal job analysis, development of recommendations, and implementation strategies.

Arlene Marks Gibbs, BS, MPA, SPHR, IPMA-CP
Associate Consultant
Arlene Gibbs possesses over thirty years of Human Resources management experience including spending over twenty years in the public sector working for both large and small education, municipal and special district organizations in California.

Her public sector experience includes serving as the Chief Human Resources Officer for San Diego State University which is the largest California State University campus with over 6,700 faculty and staff. While at San Diego State, Arlene led the HR Directors Committee for the 23 campus system of HR service delivery. Her experience also includes senior and executive HR management roles with several small and large public agencies including the City of San Jose, the City of Tustin as well as air and water/wastewater special districts.

Arlene’s experience includes all facets of Human Resources, Employee & Labor Relations. She is an experienced labor contract negotiator having negotiated many public sector labor agreements while serving as the Chief Spokesperson/Labor Negotiator. In addition, her experience includes managing recruitment and selection processes for all types of public sector positions, handling employee benefits functions, responding to labor and employee relations issues, coordinating classification and compensation studies, complying with labor laws, conducting personnel investigations, and managing a wide variety of general human resources functions.

Arlene holds a Masters’ Degree in Public Administration from California State University Northridge and a Bachelor of Science Degree in Business Administration with an emphasis in Labor Relations from California State University Long Beach. She also is certified as an IPMA-CP and as a Senior Professional in Human Resources (SPHR).

Arlene has also led and participated in local, regional as well as statewide efforts in small and large agencies with the League of California Cities, IPMA as well as serving as a resource for City, County, State and Local Boards, Councils, Committees and Commissions.

Some of the K&A classification and compensation projects Arlene has worked on include but are not limited to:
• Cities/Counties/Towns: County of Butte, City of Bellflower, City of Concord, City of Cupertino, Humboldt County, City of Los Altos, Town of Los Altos Hills, and the City of Pinole.
• Special Districts: Dublin San Ramon Services District, Garfield County Public Library District (CO), Coachella Valley Water District, Foothill De Anza Community College District, and the Los Angeles County Development Authority.

Arlene will provide Senior H.R. Associate support throughout each effort, including classification analysis, interviews with employees and management, compensation data collection and analysis, internal job analysis, development of recommendations, and implementation strategies.

DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F Sarah Nunes, M.A.

Consultant
Sarah’s professional qualifications include over 19 years of public sector experience with the Human Resources Department of the City of San José. Starting at the analyst level and eventually rising to Division Manager, she gained experience in recruitment and selection, classification and compensation, and general human resources administration.

Since joining Koff & Associates in 2017, Sarah has worked on Classification and Compensation studies for the following agencies:

• Cities/Counties/Towns: Antioch, Calistoga, Campbell, Concord, Foster City, Kings Co., Los Altos, Laguna Beach, Los Gatos, Milpitas, Monte Sereno, Newport Beach, Palo Alto, Perris, Piedmont, Phoenix, Pleasant Hill, Rio Dell, San Diego, San Jose, San Mateo, Santa Cruz, Saratoga, Seattle
• Special Districts: Central Fire Protection District of Santa Cruz, Housing Authority of the County of Alameda, Local Agency Formation Commissions of Santa Clara and Sonoma County, Metropolitan Transportation Commission, Napa Sanitation District, Ojai Valley Sanitary District, Orange County Fire Authority, Orange County Sanitation District, San Francisco Bay Area Water Emergency Transportation Authority (“WETA”), San Mateo Transit District, Santa Clara Valley Open Space Authority, Santa Clara Valley Water District, West Valley Sanitation District
Sarah earned her B.A. degree in Anthropology from Beloit College, in Wisconsin, and was awarded her M.A. in Anthropology from California State University, in Chico.

Sarah will provide H.R. Associate support for this project, including classification analysis, interviews with employees and management, comparator analysis, compensation data collection and analysis, internal job analysis, development of recommendations, and implementation strategies.

Ariele Rodriguez, M.A.

Associate Consultant
Ariele has eighteen years of public and private-sector human resources and management work experience including seven years as a project consultant performing base and total compensation studies for CPS HR Consulting. Her work experience includes compensation, classification, employee relations, labor relations, performance management, management training, adult education/college instruction, and conducting workplace investigations.

Since joining K&A in August of 2020, Ariele has worked on the following classification and/or compensation projects:
• Cities/Towns: Santa Rosa
Prior to joining K&A, Ariele worked on base or total compensation projects for the following agencies:
• Cities/Towns: Anaheim, Bell, Carson, Commerce, El Segundo, Half Moon Bay, Henderson, Hercules, Lancaster, Livingston, Millbrae, Murphy (TX), Oakland, Ontario, Palmdale, Perris, Redding, Richland Hills (TX), Rio Dell, Riverside, Sacramento, San Jose, San Luis (AZ), Santa Ana, Santa Clarita, Stockton, Tehachapi, Thousand Oaks, DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F • Counties: Del Norte, Fresno, Imperial, Lake, Madera, Marion, Monterey, Montgomery, North, Placer, Sonoma, Ventura
• Special Districts: Alameda County Superior Court, California Department of Corrections and Rehabilitation, California Department of Public Health, CAL FIRE, CalVans, Central California Alliance for Health, Department of Transportation, Department of Water Resources, East Bay Regional Park District, Elk Grove Water District, Hayward USD, Hidden Valley Lake CSD, High Speed Rail, Kern Superior Court, Kings County Firefighters Assoc, LA County Sanitation, LACERA, Lakeside USD, League of CA Cities, Las Virgenes MWD, Merced USD, Montgomery College, Merit System Protection Board (MD), North County Transit District, Orange County Transportation Agency, CA Public Employment Relations Board, Rio Linda Elverta CWD, Sacramento Superior Court, Sacramento Area Flood Control Agency, San Diego Association of Governments, Santa Ana Water Resources, Sacramento Municipal Utilities District, Stanislaus Superior Court, CA State Bar, Ventura Regional Sanitation District, Western Area Power Administration Since joining K&A in August of 2020, Ariele has worked on recruitments for the following agencies:
• City of Richmond, City of Sacramento, Dublin San Ramon Services District Prior to joining K&A, Ariele performed full cycle recruiting for a large state-funded social services agency for six years. In this time, she screened, interviewed, hired, and performed onboarding duties for over 200 employees at all levels from clerical to executive. Additionally, she performed employee relations and labor relations work, conducted internal investigations, created and presented management training, wrote and delivered adverse employment actions, and served as liaison to the local SEIU chapter.

Ariele earned her B.A. degree in Interpersonal and Small Group Communication Studies and M.A. degree in Organizational and Instructional Communication Studies from California State University, Sacramento.

She holds the HR professional certification SHRM-CP and is certified in Basic Mediation Skills.

Janna Dinkelspiel
Associate Consultant
Janna Dinkelspiel came to Koff & Associates in August 2022 with over 15 years’ experience in private and public sector human resources. Most recently Janna was a Senior Employee Relations Analyst in a municipality where she gained well rounded experience in recruitment and retention, employee relations, labor relations, policy development, performance management, training and development and classification and compensation. Janna was the City’s subject matter expert for classification and compensation while conducting and implementing three large-scale compensation studies for the City, as well as assisting the executive team with creation of a compensation policy.

Janna has a degree in Business Administration from the University of Washington and holds a Senior Professional Human Resources Certificate from HRCI.

Edward Hsi
Associate Consultant
Edward Hsi has over 5 years of public-sector human resources experience with over 4 years in classification and compensation. His experience includes public sector work for California Public Utilities Commission and Glendale Community College. Edward joined Koff and Associates in November 2022.

DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F Prior to joining Koff and Associates in 2022 he worked as a Classification and Compensation Analyst for Glendale Community College including taking part in managing, coordinating and participating in its District-wide classification study.

Edward earned his B.A. degree in Psychology at the University of California, Riverside and his M.S. degree in Industrial/Organizational Psychology at San Jose State University.

Kelly Barns
Associate Consultant
Kelly Barns has over 17 years of experience in a variety of leadership and technical public-sector human resources and risk management roles, from analyst to, Risk Manager to, Assistant Director and Director of Human Resources in municipal government. While a well-rounded practitioner and generalist with experience in talent acquisition, labor relations, classification and compensation, policy and contract development, performance management, employee engagement, Leaves and ADA administration and management, training and development, workplace investigations, health and safety, workers’ compensation, employee benefits, liability administration and management, and general Human Resources and Risk Management administration. Kelly joined Koff & Associates in March 2022.

Kelly has a degree in Business Administration and Management, is a Human Resources Certified Professional through International Public Management Association of Human Resources (IPMA-CP) and has a Senior Professional Human Resources Certificate (SPHR).

Kelly will provide Human Resources Associate support throughout each project role, primarily consist of project and technical support in, classification analysis, interviews with employees and management, compensation data collection and analysis, internal job analysis, and development of recommendations.

Kelly has a passion for engaging, collaborating with, and supporting clients, strengthening employee relations and community partnerships.

Cindy Harary, B.A.

Consultant
Cindy’s professional qualifications include over 32 years of experience in the Human Resources field, primarily in classification and compensation. She spent the first 11 years in the public sector working for the City of Whittier, California, where she started out in their Public Works Department before moving to the Human Resources Department. She gained experience in classification and compensation, recruitment and selection, employee training and development, labor relations, and general human resources administration.

For the next 16 years, Cindy worked as a Human Resources Consultant for a consulting firm where she specialized in conducting classification and compensation studies for multiple public sector agencies including cities, counties, and special districts as well as several private sector clients. Some of the Orange County Cities she worked on in partnership with other consultants at that firm were: Cities of Brea, Laguna Beach, Lake Forest, La Palma, Los Alamitos, Placentia, San Clemente, Stanton and Tustin. In Los Angeles County, her work includes: Cities of Corona, Downey, El Monte, Manhattan Beach, and Upland. Finally, in San Bernardino County she has worked on the City of Rancho Cucamonga.

Since joining Koff & Associates in 2015, Cindy has worked on Classification and/or Compensation studies for:

DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F • Cities/Towns: Anaheim, Big Bear Lake, Campbell, Carmel, Corona, Danville, Davis, Indian Wells, Laguna Niguel, Los Altos, Manteca, Menifee, Murrieta, National City, San Diego, Santa Ana, Santa Barbara, Seal Beach, Tracy, Yucca Valley • Counties: Orange
• Education: Compton College
• Special Districts: Alameda Housing Authority, Altadena Library District, Bay Area Water Supply and Conservation Agency, Cosumnes Community Services District, Eastern Municipal Water District, Encina Wastewater Authority, Housing Authority of Alameda County, Housing Authority County of San Bernardino, Housing Authority for the County of Santa Barbara, Humboldt Waste Management Authority, Inland Empire Utilities Agency, Monte Vista Water District, North Coast County Water District, Orange County Fire Authority, Orange County Mosquito & Vector Control District, Oro Loma Sanitary District, Port of Hueneme, Rincon del Diablo Municipal Water District, Riverside County Transportation Commission, Santa Clarita Valley Water Agency, South Coast Air Quality Management District, Sweetwater Authority, Trabuco Canyon Water District, Vallecitos Water District, Water Replenishment District of Southern California, Western Municipal Water District
Cindy earned her B.A. degree in Broadcast Journalism at California State University, Long Beach.

Cindy will provide H.R. Associate support throughout this effort, including classification analysis, interviews with employees and management, compensation data collection and analysis, internal job analysis, development of recommendations, and implementation strategies.

Renate Tiner, B.Sc.

Associate Consultant
Renate’s professional qualifications include five years of both non-profit and private sector Human Resources experience. Starting in Human Resources administration and rising into Human Resources management, she gained experience in full-cycle recruitment, orientation and on-boarding, Health and Safety, Worker’s Compensation, licensing and accreditation, policy development, and general Human Resources administration. Renate has a total of 10 years’ experience.

Since joining Koff & Associates in 2017, Renate has worked on Classification and Compensation Studies for the following agencies:
• Cities: Bellflower, Concord, Cupertino, El Monte, Hillsborough, Los Altos, Mt. Shasta, Piedmont, Rohnert Park, San Diego, Sausalito, West Sacramento, Calistoga, Foster City, Pittsburg, Perris, Santa Crus, Town of Truckee, Hayward, Rio Dell, County of Butte • Special Districts: Alameda County Transportation Commission, Bay Area Water Supply and Conservation Agency, Eastern Municipal Water District, Dublin-San Ramon Services District, Foothill-De Anza Community College District, Groveland Community Services District, Los Angeles County Employees Retirement Association, Metropolitan Transportation Commission, Midpeninsula Regional Open Space District, Port of Long Beach, Riverside Community College District, and San Joaquin County Superior Court, Truckee Donner Public Utility District, Monterey Peninsula Regional Open Space District, Santa Clara Valley Open Space Authority, Triunfo Water & Sanitation District, Port of Stockton, Antelope Valley-East Kern Water Agency, Coachella Valley Water District, Foothill Municipal Water District, Orange County Sanitation District, Los Angeles Unified DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F School District, Tahoe Transportation District, San Luis & Delta Mendota Water Authority, Habeas Corpus Resource Center
Renate earned her B.Sc. degree in Psychology from the University of Northern British Columbia, in Prince George BC, Canada. She was a Canadian Human Resource Professional (CHRP) Candidate before moving to the United States.

She will provide H.R. Associate support throughout this effort, including classification analysis, interviews with employees and management, compensation data collection and analysis, internal job analysis, development of recommendations, and implementation strategies.

Nicolle Wynia-Eide
Consultant
Nicolle Wynia-Eide has over 25 years of experience in the Human Resources profession including work in Classifica�on and Compensa�on, Total Rewards, Benefits, and general human resources administra�on, the majority of which was in public sector. She has experience in designing and conduc�ng small and large scall classifica�on and compensa�on studies, pay equity evalua�ons, and organiza�onal development.

Prior to joining Koff & Associates in 2023 she was a Senior Classifica�on and Compensa�on Consultant for a large nonprofit heath care agency. Her public sector roles have included Human Resources Analyst for the City of Beaverton (Oregon) and 13 years working with and then supervising the Classifica�on and Compensa�on team for the City of Portland.

Nicolle has a degree in Biology from Lewis and Clark College and a Human Resources Cer�fica�on for Portland State University. She earned her Cer�fied Compensa�on Professional in 2007 and her Senior Professional Human Resources Cer�ficate (SPHR) in 2012. She is also a member of World at Work.

DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F

APPENDIX B
Scope of Work by Department
DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F City of Gardena
List of Positions to be Reviewed by Department
Department Number of Positions for
Review/New Specs or
Major Re-Writes
Comments/Class Specs Currently Developed
Administrative
Services (Finance, HR
and IT)
18/7 All positions to complete a PDQ; 9 class specs were written for the initial study; anticipate 7 new specs will be required and or major re-writes to original specs
City Wide
Administrative
Positions
14/10 Recommend all positions complete a PDQ; expect to write 10 new class specs (none were developed in the
first study)
City Manager – Clerk
of the Board
0 Does not anticipate staff need to be re-reviewed. Some title changes; minor revisions to 3 class specs.

Community
Development
6/6 Does not anticipate many staff need to be re-reviewed but there are some new positions which need new
specs and/or major revisions; expect 6 new class specs
or rewrites
Police 25/8 Review maintenance position (PDQ required); Police Records Technician (3 individuals completing group
PDQ); Police Records Assistant (3 individuals
completing group PDQ); Police Services Officer (Jailer) (3 individuals completing a group PDQ – approximately
10 Jailers); 7 individual PDQ’s and interviews from
various administrative classes. Approximately 25
employees in these classes.

Public Works 30/4 There will be consolidation of maintenance positions into 3 broad maintenance classifications plus leads and this will affect about 30 positions; suggest we use the original PDQ’s from these functional areas and levels and conduct 4 focus/group interviews with 4-5 incumbents
in each to be sure all work elements are captured. Class specs have been developed for original series, and will need some re-work for consolidation; no comments
were made on engineering classes so presume little, if
any work, is needed on this class series; note Home
Improvement series may not be necessary; no
comments on director, manager and supervisory class
specs, so again presume not much re-work needed.

Recreation and
Human Services
50/20 This department needs major work; original study
interviewed positions but the department was
undergoing significant changes; only the Director spec
was written originally, and the PDQ’s are now outdated
based on organizational changes; anticipate interviews
for 25-30 people (groups where possible) and 20 new
class specs.

DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F Department Number of Positions for
Review/New Specs or
Major Re-Writes
Comments/Class Specs Currently Developed
Transportation 14/7 Includes positions whose jobs have changed etc. and new classes created; about 11 of the specs written have not changed (minor revisions); 7 new ones, or some
with more revisions are needed; 3 paratransit classes
are subject to a new operating model so impact not
known.

DocuSign Envelope ID: C702B174-42AA-462D-A780-FF4EF1C0B64F City of Gardena
Gardena City Council Meeting

AGENDA REPORT SUMMARY
Agenda Item No. 12.B
Section: DEPARTMENTAL

ITEMS - ADMINISTRATIVE

SERVICES
Meeting Date: December 12,
2023
TO: THE HONORABLE MAYOR AND MEMBERS OF THE GARDENA CITY COUNCIL AGENDA TITLE: City of Gardena Audit Reports for Fiscal Year Ended June 30, 2023; Annual Comprehensive Financial Report (ACFR), Family Child Care and GTrans COUNCIL ACTION REQUIRED:

Staff Recommendation: Receive and File Audit Reports for Fiscal Year 2022-2023 RECOMMENDATION AND STAFF SUMMARY:

Presented for the City Council to receive and file are the audited financial reports for the fiscal year ended June 30, 2023, as prepared by the City's contracted auditing firm, The Pun Group, LLP, an independent public accounting firm fully licensed and qualified to perform audits of state and local governments within the State of California. The goal of the independent audit is to provide reasonable assurance that the financial statements of the City for the fiscal year ended June 30,2023, are free of material misstatement. There were no findings in the audit of the financial statements.

Annual Comprehensive Financial Report (ACFR), June 30, 2023 The financial statements included in the ACFR represent all City funds. City management is responsible for the accuracy of the data, the fairness and completeness of the presentation, and the inclusion of all disclosures that are necessary for the reader to understand the City's operations. The report contains a citywide view of all governmental and business-type activities, as well as a focus on the financial position and operating results of the City's major funds.

The auditors issued an unmodified opinion that based upon their audit, the City's financial statements are presented fairly, as of June 30, 2023, and changes in the financial position and cash flows are in accordance with Generally Accepted Accounting Principles (GAAP) in the United States.

Family Child Care Program Report, June 30, 2023
Issued with an unmodified opinion that the financial statements are presented fairly, in all material respects, the financial position of the Family Child Care Program as of June 30, 2023, and the results of its operations for the year ended in conformity with Generally Accepted Principles (GAAP) in the United States.

GTrans Enterprise Fund, June 30, 2023
Issued with an unmodified opinion that the financial statements are presented fairly, in all material respects, the financial position of GTrans as of June 30, 2023, and the results of its operations and cash flows for the year then ended in conformity with Generally Accepted Accounting Principles (GAAP) in the United States.

FINANCIAL IMPACT/COST:

No Financial Impact
ATTACHMENTS:

Attachment #1 - Annual Comprehensive Financial Report June 30, 2023.pdf Attachment #2 - Child Care Program Report June 30, 2023.pdf Attachment #3 - GTrans Report June 30, 2023.pdf
APPROVED:
___________________________________
Clint Osorio, City Manager

ANNUAL

COMPREHENSIVE

FINANCIAL REPORT
FISCAL YEAR ENDED JUNE 30, 2023

CITY OF GARDENA, CALIFORNIA

PREPARED BY

THE ADMINISTRATIVE SERVICES DEPARTMENT
Clint Osorio
City Manager
And
Raymond Beeman
Director of Administrative Services
* * * * * * * * * * * * * * * * * * * *

City of Gardena
Annual Comprehensive Financial Report
For the Year Ended June 30, 2023
Table of Contents
Page
INTRODUCTORY SECTION (Unaudited)
Letter of Transmittal ................................................................................................................................................ i GFOA Certificate of Achievement for Excellence in Financial Reporting ........................................................... ix Organization Chart ................................................................................................................................................. x Commissions, Boards, Committees, Etc. .............................................................................................................. xi Officials of the City of Gardena, California ......................................................................................................... xii

FINANCIAL SECTION
Independent Auditors’ Report on the Financial Statements ............................................................................ 1 Management’s Discussion and Analysis (Required Supplementary Information) (Unaudited) ................... 5 Basic Financial Statements:

Government-Wide Financial Statements:

Statement of Net Position ........................................................................................................................ 20 Statement of Activities ............................................................................................................................ 22 Fund Financial Statements:

Governmental Fund Financial Statements:

Balance Sheet .................................................................................................................................... 28 Reconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Position .................................................................. 31 Statement of Revenues, Expenditures, and Changes in Fund Balances ........................................... 32 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the
Government-Wide Statement of Activities and Changes in Net Position .................................. 34 Proprietary Fund Financial Statements:

Statement of Net Position ................................................................................................................. 36 Statement of Revenues, Expenses, and Changes in Net Position ..................................................... 39 Statement of Cash Flows .................................................................................................................. 40 Index to Notes to the Basic Financial Statements .......................................................................................... 45 Notes to the Basic Financial Statements ........................................................................................................ 47 City of Gardena
Annual Comprehensive Financial Report
For the Year Ended June 30, 2023
Table of Contents (Continued)
Page
FINANCIAL SECTION (Continued)
Required Supplementary Information (Unaudited):

Budgetary Comparison Schedule – General Fund ....................................................................................... 101 Budgetary Comparison Schedule – Economic Development Grants Special Revenue Fund ...................... 102 Notes to the Budgetary Comparison Schedule ............................................................................................ 103 Schedule of Changes in Net Pension Liability and Related Ratios – CalPERS Miscellaneous Plan .......... 104 Schedule of City’s Proportionate Share of the Net Pension Liability and Related Ratios – CalPERS Safety Plan........................................................................................... 106 Schedule of Contributions – Pensions –
CalPERS Miscellaneous Plan ................................................................................................................ 108 CalPERS Safety Plan ............................................................................................................................. 110 Schedule of Changes in Net OPEB Liability and Related Ratios:

Governmental Activities Retiree Healthcare Plan ................................................................................. 112 GTrans Retiree Healthcare Plan ............................................................................................................ 114 Sewer Retiree Healthcare Plan .............................................................................................................. 116 Schedule of Contributions – Other Postemployment Benefits Plans:

Governmental Activities Retiree Healthcare Plan ................................................................................. 118 GTrans Retiree Healthcare Plan ............................................................................................................ 120 Sewer Retiree Healthcare Plan .............................................................................................................. 122 Supplementary Information:

Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual:

City Capital Projects Fund..................................................................................................................... 127 Nonmajor Governmental Funds:

Combining Balance Sheet ..................................................................................................................... 130 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances ............................. 133 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual:

Consolidated Lighting District Special Revenue Fund ................................................................... 136 Prop C Local Return Special Revenue Fund .................................................................................. 137 Gas Tax Special Revenue Fund ...................................................................................................... 138 Public Safety Grants Special Revenue Fund ................................................................................... 139 Public Works Grants Special Revenue Fund .................................................................................. 140 Human Services Grants Special Revenue Fund .............................................................................. 141 Community Development Block Grant (CDBG) Special Revenue Fund ....................................... 142 American Rescue Plan Special Revenue Fund ............................................................................... 143 All Debt Service Funds:

Combining Statement of Balance Sheet ................................................................................................ 146 Combining Schedule of Revenues, Expenditures, and Changes in Fund Balances .............................. 148 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual:
2006 Refunding COPs, Series A Debt Service Fund ...................................................................... 150 2007 Refunding Revenue Bonds SBRPCA Debt Service Fund ..................................................... 151 2014 Taxable Lease Revenue Refunding Bonds Debt Service Fund ............................................. 152 2017 Lease Financing Bonds - Debt Service Fund ......................................................................... 153 2020 Taxable Pension Obligation Bonds - Debt Service Fund ....................................................... 154 2021 Lease Revenue Bonds ............................................................................................................ 155 City of Gardena
Annual Comprehensive Financial Report
For the Year Ended June 30, 2023
Table of Contents (Continued)
Page
Supplementary Information (Continued):

Internal Service Funds:

Combining Statement of Net Position ................................................................................................... 159 Combining Statement of Revenues, Expenses and Changes in Net Position ........................................ 160 Combining Statement of Cash Flows .................................................................................................... 161 STATISTICAL SECTION (Unaudited)
Net Position by Component ................................................................................................................................ 166 Changes in Net Position ..................................................................................................................................... 168 Fund Balances of Governmental Funds .............................................................................................................. 172 Changes in Fund Balances – Governmental Funds ............................................................................................ 174 Governmental Revenues by Sources .................................................................................................................. 176 General Governmental Expenditures by Function ............................................................................................. 178 Assessed Valuation and Actual Value of Taxable Property ............................................................................... 180 Assessed Value of Property by User Code ......................................................................................................... 182 Assessed Value and Estimated Value of Taxable Property ................................................................................ 184 Construction and Bank Deposits ........................................................................................................................ 186 Property Tax Rates – All Overlapping Governments ......................................................................................... 188 Direct and Overlapping Property Tax Rates ....................................................................................................... 190 Ten Largest Property Taxpayers ........................................................................................................................ 192 Top 25 Sales Tax Producers ............................................................................................................................... 193 Property Tax Levies, Tax Collections, and Delinquency ................................................................................... 194 Card Club Gross Revenue Fee ........................................................................................................................... 195 Utility Users Tax Received ................................................................................................................................ 196 Taxable Sales by Category ................................................................................................................................. 197 Ratio of Outstanding Debt by Type .................................................................................................................... 198 Pledged-Revenue Coverage ................................................................................................................................ 201 Ratio of General Bonded Debt Outstanding ....................................................................................................... 202 Direct and Overlapping Bonded Debt ................................................................................................................ 203 Legal Debt Margin Information ......................................................................................................................... 204 Debt Service Payment Schedule ......................................................................................................................... 206 Demographic and Economic Statistics ............................................................................................................... 209 Ten Principal Employers .................................................................................................................................... 210 Unemployment Rates ......................................................................................................................................... 211 Full-Time and Part-Time City Employees by Function ..................................................................................... 212 Employee Union Representation ........................................................................................................................ 213 Operating Indicators by Function ....................................................................................................................... 214 Capital Asset Statistics by Function ................................................................................................................... 215 Independent Auditors’ Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ............................................................ 217 City of Gardena
Annual Comprehensive Financial Report
For the Year Ended June 30, 2023
(This page is intentionally left blank)
December 7, 2023
Members of the City Council,
and Citizens of Gardena

ANNUAL COMPREHENSIVE FINANCIAL REPORT
FISCAL YEAR 2022-2023

LETTER OF TRANSMITTAL
It is our pleasure to submit the Annual Comprehensive Financial Report (ACFR) of the City of Gardena (the City) for the fiscal year ended June 30, 2023 (FY 22-23). The report is intended to update readers on the status of the City’s financial position and results of operations for the past fiscal year.

Management assumes full responsibility for the completeness and reliability of the information contained in this report, based upon a comprehensive framework of internal control that it has established for this purpose. Because the cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements. This ACFR has been prepared in accordance with Generally Accepted Accounting Principles (GAAP) in the United States of America as promulgated by the Government Accounting Standards Board (GASB).

The report contains a Citywide view of all governmental and business-type activities, as well as a focus on the financial position and operating results of the City’s major funds.

The City’s financial statements have been audited by The Pun Group LLP, an independent public accounting firm fully licensed and qualified to perform audits of the State and local governments within the State of California. The financial statements included in this ACFR represent all City funds.

The goal of the independent audit is to provide reasonable assurance that the financial statements of the City for the fiscal year ended June 30, 2023, are free of material misstatement. The auditors concluded, based upon the audit, that there was a reasonable basis for rendering an unmodified opinion that the City’s financial statements for the fiscal year ended June 30, 2023, were fairly presented in conformity with GAAP. The independent auditor’s report is presented as the first component of the financial section of the ACFR. Management’s Discussion and Analysis (MD&A) immediately follows the independent auditor’s report and provides a narrative introduction, overview, and analysis of the basic financial statements. The MD&A complements this letter of transmittal and should be read in conjunction with it.
i

PROFILE OF THE GOVERNMENT
The City of Gardena is located just miles from the beautiful California coast, near the interchange of the Harbor, San Diego, and Gardena freeways, and just 13 miles south of the City of Los Angeles, in the South Bay Area. Gardena is a part of the Los Angeles-Long Beach-Glendale Metropolitan Statistical Area.

Gardena has the singular distinction of having within its borders both the first legal card club licensed in the State of California, granted in 1936, and the newest club in the state, which opened in 2000. At one time only five-card draw and lowball poker could be played. During the 1960s, Gardena was the only City in Los Angeles County to have legal gambling. In the mid-1980s, a tremendous Asian influence arrived with the introduction of a number of California games. A complete listing is contained in the City of Gardena Resolution No. 6581.

The City of Gardena, incorporated on September 11, 1930 as a general law City, operates under the Council-Manager form of government. Policy-making and legislative authority are vested in a governing council consisting of four members of the City Council and a Mayor elected on a non- partisan basis at-large for four-year terms, with an election every two years. The Council is responsible for, among other things, establishing policy, passing ordinances, adopting an annual budget, appointing members to various City Commissions and Boards and hiring the City Manager and City Attorney. The City Manager is responsible for carrying out the policies and ordinances of the City Council, for overseeing the day-to-day operations of the government, and for appointing the heads of the various departments.

Gardena offers a full range of municipal services, including police and code enforcement; recreation and human services; public works; streets and parks; planning and building services; engineering; transportation services (enterprise fund); and general administration. Fire services are contracted with Los Angeles County.

BUDGET PROCESS
The City is required to adopt an initial budget for the fiscal year no later than June 30 preceding the beginning of the fiscal year on July 1. This annual budget serves as the foundation for the City of Gardena’s financial planning and control. The budget is prepared by fund, function (e.g. public safety), and department (e.g., police). Department heads may transfer resources within a department as they see fit. The City of Gardena adopts biennial budget, but the second fiscal year is being adopted in the subsequent fiscal year in the same manner and process.

The City’s annual budget process commences in February with the distribution of the updated Budget Manual that details the City’s general budgetary policy and the specific goals and objectives for the upcoming fiscal year. Departments are given specific instructions and timelines, the City’s chart of accounts, a rate schedule for apportioned costs such as liability and health insurance, and budget forms and formats.

The Director of Administrative Services, in coordination with all operating departments, provides the City Manager with proposed revenue projections. These revenue estimates are reviewed with the department budget requests to determine available funding levels for the fiscal ii
year. Supplemental requests for new personnel, services or capital/equipment purchases are subject to City Manager review and approval before becoming part of the proposed operating budget. This process applies to all governmental and enterprise funds.

The City Manager and Director of Administrative Services meet with the Department Heads to review all operating expenditures, budget change requests, department’s goals and programs for the upcoming fiscal year. After this final review and approval by the City Manager, a proposed budget will be presented to the Finance Committee for review and recommendation.

Budget study sessions and a public hearing are then presented to City Council in May. A separate community budget forum will follow to present the proposed budget and address questions from the stakeholders. Then budget is adopted by a resolution prior to June 30.

Throughout the fiscal year, actual expenditures and revenues are being presented to the Finance Committee for review on quarterly basis. The budget can be amended as necessary to meet the City’s needs during the fiscal year. The City Council has the legal authority to amend the budget at any time. Department Heads may only authorize expenditures based on appropriations approved by City Council. Actual expenditures may exceed budget appropriations by line-item.

However, total expenditures within each fund may not exceed the total appropriation for that fund. The City Manager has the authority and discretion to approve interdepartmental appropriation transfers if they are within the same fund.

LOCAL ECONOMIC CONDITIONS AND OUTLOOK
Top 5 sources of General Fund revenue account for 76.5% or $61M. The remaining revenues account for 23.5% of the total and are represented by a broad range of sources.

Sales Tax
Sales Tax represents the single largest source of General Fund revenue at $28.2M or 35.4%. It is made up from the 6 categories below. The general retail category includes department stores, gas

35.4%

10.8% 12.5% 9.9%

7.9%

23.5%
General Fund Revenues by Source
Fiscal Year Ended June 30, 2023
Sales Tax
Property Tax
Card Clubs Tax
Vehicle License Fee
Utility User Tax
Other
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stations, general merchandise, restaurants, and hotels. General retail is the largest economic sector which generates 39% of the sales tax for Gardena. For fiscal year 2022-23, actual sales tax exceeds budget by 12.2% or $3M. For Measure G 0.75%, the fiscal year actual of $12.6M includes a onetime payment. Overall, the City of Gardena’s sales per capita is higher than Los Angeles County average and consistently outperforms projections, a strong indicator of a vibrant local economy and strong business support.

Property Tax
Gardena has a diverse land use for its 6 square miles. The City has a total assessed valuation of $8.65B, an increase of 7.2% over prior year. Of the City’s 14,430 parcels, 87.7% are residential, 9.3% are commercial/industrial and the remaining 3% for other miscellaneous uses.

Property tax is the second highest source of General Fund revenue at 12.5% or $9.9M. The yearover-year increase of 8.7% and 11% over the budget amount from increased assessment value and recent developments in the City. Overall, the City and the South Bay region are experiencing an increase in housing prices.

Card Club Tax
City of Gardena is fortunate to have two card clubs within the City limits, Lucky Lady Casino and Hustler Casino. The City receives 12% of the gross revenue from both casinos. For the fiscal year 2022-23, the City collected card club tax of $8.6M or 10.8% of General Fund revenue. This reflect a decrease of 2.3% or $200K vs the budgeted amount.

Vehicle License Fee (VLF)
The City receives $7.9M or 9.9% of the General Fund revenue. This is the fourth largest source of General Fund revenue.

When a vehicle is registered in California, a license fee is charged by the State of California. This

14.4%

17.2%

5.0%

39.0%

6.9% 17.5%
Sales Tax by Economic Categories
Fiscal Year Ended June 30, 2023
Autos & Transportation
Building & Construction
Food & Drugs
General Retails
Business & Industry
Misccellaneous
iv
fee includes a small administrative fee and a property tax in-lieu fee. The in-lieu fee is based on the depreciated value of the vehicle and declines over the useful life of the vehicle. This in-lieu fee is allocated to cities and counties based on a per capita basis.

In 2005, the VLF was permanently reduced to 0.65% from 2.0% of the vehicle’s fair market value.

Any loss to cities by this rate reduction at that time was made up with an allocation from the Couty’s Educational Revenue Augmentation Fund property tax account. This allocation will grow with any corresponding growth in the City’s secured property tax valuation.

Utility User Tax (UUT)
The Utility User Tax revenue received by the City is based on adopted ordinances. The current UUT rate is 5% for telecommunications (wired and wireless), electricity, gas, and water. Effective in 2016, the UUT rate for prepaid wireless is 3.5%.

For the fiscal year, the City received $6.3M or 7.9% of the total General Fund revenue. This is an increase of $1.4M or 28.9% when compared to the budget. The main factor for the increase is due to higher utility prices and increased usage from the recent extreme weather.

The top 5 General Fund revenue sources account for 76.5%, which is comparable to prior fiscal year. The remaining 23.5% comprise of various sources including business license tax, franchise tax, transient occupancy tax (TOT), charges, license and permits, use of money & property, miscellaneous and intergovernmental. Use of money & property revenue has increased by $2.6M mainly due to higher interest income and the reversal of fair value market adjustment. Overall, the total General Fund revenue increased by 6.1% or $4.6M. This modest increase is mainly attributed to the increase in sales tax revenue, indicative of a healthy local economic condition.

LONG-TERM FINANCIAL PLANNING AND MAJOR INITIATIVES
As a result of the City’s fiscally conservative approach taken these past couple of years, the City finds itself in a financially stable position, which allowed the City in its adopted budget for fiscal year 2023-2024, to budget for and add a total of 27 additional positions to the City’s staffing resources ( 11-Full Time and 16-Part Time), as well as investments in seniors, youth and community service programs and the largest Capital Improvement Program budget in the Cities history with over $50 million.

The City maintains an existing lease rating of “A+” rating from Standard & Poor’s and an “A1” rating with Moody’s for its general fund lease supported debt as of June 30, 2023. The City’s issuer ratings are “AA- with S&P and “Aa3” with Moody’s. Which is reflective of a stable fiscal outlook and the expectation that Gardena will continue to maintain balanced operational costs with substantial fiscal reserves.

Aligning with the City’s vision of making Gardena as one of the most desired communities to live, do business, work, and play in the South Bay region. The City will maintain a safe community environment by implementing Building Development Safety and Security Standards, as well as continue street and sidewalk improvements Citywide.

To further the City’s vision, in 2021 the City took a proactive approach to take advantage of the v
historical low interest rates and used its excellent issuer credit rating of AA- with S & P to obtain a Lease Revenue Bond in the amount of $15 Million dollars with a 20-year term at 1.98% true interest cost over the life of the bond. These bonds will be used to fund various capital projects including the Gardena Community Aquatic & Senior Center, a multigenerational community building to provide public access and recreational activities to residents.

In November of 2022, the City of Gardena was awarded the prestigious Eddy Award for the “Most Business-Friendly City” (population over 60,000) from the Los Angeles County Economic Development Corporation (LAEDC). This was the City’s third time being nominated for the award and first ever win. Since 1966, the LAEDC Eddy awards celebrate individuals, organizations, and educational institutions that demonstrate exceptional contributions to inclusive economic development in the region. LAEDC also recognizes local cities in categories based on their population size for creating environments that foster creation and growth of enterprises that provide good jobs and build wealth for our communities.

In June 2023, the National Civic League nominated the City of Gardena as an All-America City Award finalist. Gardena was one of the 19 cities nominated for the 2023 All-American City Award.

The City won the award in 1980 and was one of few cities to have received this award in California. The All-America City Award recognizes communities that leverage civic engagement, collaboration, inclusiveness, and innovation to successfully address local issues.

CAPITAL IMPROVEMENT PROJECTS
The City continues to devote significant resources to maintenance and improvement of its top rated streets and roads. Gardena’s current street pavement condition index (PCI) of 81 is one of the highest in California.

The fiscal year 2022-23 capital budget is highlighted by the two major community projects: The Community Aquatic & Senior Center and a new Mas Fukai Park building. The City is aggressively reinvesting in the community via various infrastructure projects by adopting $40.5M CIP budget for 40 different projects. It was the single largest CIP budget to date in City history. 50% of the budget is dedicated for parks and facilities, 46.9% for road and street projects and the remaining

3.1% is for sewer and stormwater projects.

Most of the projects are multi-year projects so at the end of the fiscal year only 4 of the 40 budgeted projects were completed. Two street projects were completed; the 170th Street Improvement and Pedestrian Safety Improvements, which significantly enhanced safety for street sidewalks and ramps on various intersections in the City.

Significant progress has been made with the two community projects. The Community Aquatic & Senior Center project is moving forward to the construction phase with the target completion date of Fall 2025. As for the Mas Fukai Park building, the initial design has been presented to the City Council.

In June 2023, the City adopted its Fiscal Year 2023-24 CIP budget of $50.9M, the single largest fiscal year CIP budget in the City’s history. With 55% or $28M of the CIP budget for park and facility projects including the construction of the Community Aquatic & Senior Center. $21.8M or 43% for 19 street projects; including $3.7M for the Artesia Boulevard Traffic Signal Improvement project. This project will significantly address existing and future traffic conditions as well as improving landscape on a major City’s corridor. vi

PENSION & OPEB STABILIZATION FUNDS
The City issued $101M in Taxable Pension Obligation Bonds in 2020 at 3.29% to save the City $51M over the 19-year life of the bond. The City adopted an Unfunded Accrued Liability (UAL) Policy to address future pension liability. Under this policy, UAL Funds were created so each fiscal year the City must budget a contribution toward future pension liability. As of June 30, 2023, these funds have a balance of $2.2M.

With the desire to address Other Post-Employment Benefits (OPEB) liability and take advantage of higher interest yields, in 2017 the City established California Employers’ Retiree Benefit Trust (CERBT) accounts, IRC Section 115 Trust Accounts, with CalPERS. During the fiscal year 2022- 23, the City made a $1.75M contribution to the trust. As of June 30, 2023, the City’s CERBT trust has a combined balance of $7.2M, $1.9M from the City and $5.3M from GTrans’ CERBT account.

CASH MANAGEMENT
The City manages a pooled investment program for all funds in which temporarily idle cash is invested in a variety of instruments. The investment program is managed in accordance with the Investment Policy approved by the City Council on an annual basis. Safety, liquidity, and yield, in that order, are the objectives of the investment program. Investments are diversified among investment tools including certificates of deposit, Federal agency securities, State of California Local Agency Investment Fund (LAIF), corporate medium-term notes, money market mutual funds, California Asset Management Program (CAMP) Pool.

At the fiscal year end on June 30, 2023, the City had a total investment portfolio of $84.8M. Almost half of the portfolio is with CAMP, which is completely liquid and increased investment earnings substantially. The investment report is presented to City Council for review and approval monthly. It is also made available on the Financial Transparency Dashboard at www.cityofgardena.org.

RISK MANAGEMENT
The City maintains self-insurance programs for worker’s compensation and general liability insurance up to a maximum of $750,000 per occurrence. General liability claims that exceed the Self-Insured Retention (SIR) are covered by Public Risk Innovatin Solutions Management (PRISM). Worker’s compensation claims that exceed the SIR are insured by the PRISM up to the California statutory limits for workers’ compensation. For the City’s transit department, GTrans, the SIR is $250,000 and is being covered by California Transit Indemnity Pool (CalTIP).

The City also carries stop-loss insurance of individual health benefit claims in excess of $75,000 for Medicare retirees and $50,000 for all other members. The City contracts with third party administrators who manage the claims filed against the City. vii

RELEVANT FINANCIAL POLICIES
The City has adopted a set of financial policies. GASB Statement No. 54, titled “Fund Balance Policy for the General Fund is the policy that provides the users of the financial statements greater information about the availability of reported fund balance and the City’s commitment of financial resources. Note 13 of the Notes to Basic Financial Statements, presents more detailed information about the five categories of fund balance – non-spendable, restricted, committed, assigned and unassigned fund balance.

During the current fiscal year, the City adopted new accounting procedures and policy to comply with the new Governmental Accounting Standard Board (GASB) Statement 96 for software subscriptions. The object of this statement is to better meet the information needs of financial statements users by improving accounting and financial reporting for software subscriptions.

This Statement will enhance the relevance of consistency of information about government’s subscription activities.

AWARDS and ACKNOWLEDGEMENTS
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Gardena for its ACFR for the fiscal year ended June 30, 2022. This was the thirty-seventh consecutive year that the government has achieved this prestigious award. In order to be awarded a Certificate of Achievement, the government had to publish an easily readable and efficiently organized ACFR that satisfied both generally accepted accounting principles and applicable program requirements.

A Certificate of Achievement for Excellence in Financial Reporting is valid for a period of one year only. However, we believe that our current ACFR continues to meet the Certificate of Achievement for Excellence in Financial Reporting Program’s requirements, and we are submitting it to the GFOA to determine its eligibility for another certificate.

The preparation of this report could not have been accomplished without the collaborative assistance of the Department Heads and staff in all City departments. First and foremost, we want to recognize the dedicated employees of the Administrative Services Department. Their professional expertise and unassuming commitment to excellence is constantly manifested in the quality of the City’s financial records and reporting. Appreciation is also expressed to the audit staff of The Pun Group, LLP, for their advice and assistance in the preparation of this report.

Finally, we would like to thank the members of the City Council for their support in planning and conducting the financial operations of the City in a responsible and progressive manner.

Respectfully submitted, Respectfully submitted,
Clint D. Osorio, MPA Ray Beeman, CPA
City Manager Director of Administrative Services
viii
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Gardena
California
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2022
Executive Director/CEO
ix

CITY OF GARDENA ORGANIZATION CHART

CITIZENS OF GARDENA
CITY
CLERK
(Elected)

MAYOR & CITY

COUNCIL
(Elected)
CITY

TREASURER
(Elected)
CITY

MANAGER
(Appointed)
Elected &
Executive Offices
– Legislation
– Public Information
– Communication
Services
– Strategic Planning
– Elections
– Public Policy Support
– Organizational
Leadership &
Development
Transportation
(Enterprise Fund)
GTRANS
– Administrative
– Transportation
– Maintenance
– Vehicle Maintenance
– Special Transit
Police
– Operations
– Support Services
– Patrol Bureau
– Detective Bureau
– Special Investigations
– Transit Security
– Parking Enforcement
Contracted
Services
– Los Angeles County
Consolidated Fire
Protection District
– SBRPCA –
Emergency Dispatch
CITY

ATTORNEY
(Contracted)
Commissions
& Committees
Public Works
– Street Maintenance
– Traffic Signals and
Signs
– Sanitation
– Equipment
Maintenance
– Engineering
– Sewer Maintenance
– Buildings/Facility
Maintenance
– Parks Maintenance
and Special Projects
– Civic Center
Grounds
– Tree Trimming
– Handy Worker
Program
Administrative Services
– Grants Administration
– Financial Services
– Purchasing/Contract
Management
– Information Systems
– Cable Television/Public Access
– Payroll
– Budget
– Audits
– Personnel and Labor Relations
– Risk Management
Community Development
– Inspections
– Building Services
– Permits and Licenses
– Planning and Special Studies
– Development Services
– Building and Entitlement
Records
– Animal Control
– Economic Development
– Code Enforcement
Recreation &
Human Services
– Youth and Family
Services
– Family Child Care
– Senior Citizens
– Socialization
Center
– Sports and
Aquatics
– Developmentally
Disabled
– Special Events
Classes
– Recreation and
Leisure Activities
– Custodial
Services
x

CITY OF GARDENA
COMMISSIONS, BOARDS, COMMITTEES, ETC.

MAYOR & CITY

COUNCIL
(Elected)
Human Services
Commission
Gardena Youth
Commission
Recreation and
Parks Commission
Planning &
Environmental
Quality
Commission
Senior Citizens
Commission

APPOINTED

COMMISSIONS
Board of Appeals
Gardena
Rent Mediation
Board
City of Gardena
Financing
Agency
Housing Appeals
Board

AGENCIES/
BOARDS
Gardena Police
Foundation

NON-APPOINTED

COMMITTEES/

ASSOCIATIONS
Charitable Fund
Benefiting Gardena
Board
Gardena Sister City
Association
Gardena Valley
Affiliated Committee
on Aging
Gardena Economic
Business Advisory
Council

APPOINTED

ADVISORY
GROUPS
Gardena Traffic
Committee
Gardena Finance
Committee
Gardena
Beautification
Committee
xi

ELECTED OFFICIALS & EXECUTIVE STAFF
FISCAL YEAR 2022 – 2023

CITY OF GARDENA
ELECTED OFFICIALS .

Mayor…………………………………………………………………..Tasha Cerda
Mayor Pro Tem………………………………………………... Mark E. Henderson
Councilmember………………………………………………… Rodney G. Tanaka
Councilmember………………………………………………… Paulette C. Francis
Councilmember………………………………………………………...Wanda Love
City Clerk…………………………………………………………… Mina Semenza
City Treasurer………………………………………………………… Guy H. Mato
EXECUTIVE STAFF & ADMINISTRATION OFFICIALS .

City Manager ......................................................................................... Clint Osorio City Attorney ................................................................................. Carmen Vasquez Chief of Police .................................................................................. Michael Saffell Director of Administrative Services ..................................................... Ray Beeman Director of Community Development ………………………........... Greg Tsujiuchi Director of Public Works ......................................................................... Allan Rigg Director of Recreation and Human Services ................................... Stephany Santin Director of Transportation .................................................................... Ernie Crespo Assistant Fire Chief – LA County Fire District .................................. Brian Bennett xii
200 E. Sandpointe Avenue, Suite 600
Santa Ana, California 92707
INDEPENDENT AUDITORS’ REPORT
To the Honorable Mayor and the Members of the City Council of the City of Gardena
Gardena, California
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Gardena, California (the “City”), as of and for the year ended June 30, 2023, and the related notes to the basic financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City, as of June 30, 2023, 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 (“Government Auditing Standards”). Our responsibilities under those standards are further described in the Auditors’ 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.

Other Matters
Change in Accounting Principle
As described in Note 1 to the financial statements, the City adopted new accounting guidance, Governmental Accounting Standards Board (“GASB”) Statement No. 96, Subscription-based Information Technology Arrangements . Our opinion is not modified with respect to this matter.

To the Honorable Mayor and the Members of the City Council of the City of Gardena
Gardena, California

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

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about City’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.

Auditors’ 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 auditors’ report that includes our opinion.

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.

To the Honorable Mayor and the Members of the City Council of the City of Gardena
Gardena, California

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3 Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis, the Budgetary Comparison Schedules – General Fund and Major Special Revenue Funds, the Schedule of Changes in Net Pension Liability and Related Ratios, the Schedule of City’s Proportionate Share of the Net Pension Liability and Related Ratios, the Schedules of Contributions – Pensions, the Schedules of Changes in Net Other Postemployment Benefits Liability and Related Ratios, and the Schedules of Contributions – Other Postemployment Benefits as listed in the table of contents be presented to supplement the basic financial statements.

Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the Required Supplementary Information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The combining and individual nonmajor fund financial statements are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with GAAS and Government Auditing Standards. In our opinion, the combining and individual nonmajor fund financial statements are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

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

In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report. 4 To the Honorable Mayor and the Members of the City Council of the City of Gardena
Gardena, California

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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 7, 2023, on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.

Santa Ana, California
December 7, 2023
City of Gardena
Management’s Discussion and Analysis (Unaudited)
As management of the City of Gardena (City), California, we offer readers of the City’s financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended June 30, 2023. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found in the introductory section of this report, as well as with the City’s financial statements, which follow this discussion.

Financial Highlights
♦ The liabilities and deferred inflows of resources of the City exceeded its assets and deferred outflows of resources at the close of the 2022-2023 fiscal year by ($18,994,010), which resulted in the City having a negative net position. The negative positions were due primarily to GASB Statements No. 68, Accounting and Financial Reporting for Pensions, GASB No. 75 Accounting and Financial Reporting for Postemployment benefits other than pensions and Long-Term Liabilities -Due in more than one year. The Net Pension Liabilities and Other post-employment benefits (OPEB) were included within the government-wide financial statements for both governmental and business-type financial reporting. At the close of 2022-2023 fiscal year, the City’s Net Pension Liabilities were $16,120,826 and $3,233,030 for governmental and business-type activities for a total of $19,353,856. The City’s Other post-employment benefit liabilities were $64,768,264 and $8,020,898 for governmental and business-type activities for a total of $72,789,162. The Long-Term Liabilities were $136,971,162 and $23,001,398 for governmental and business-type activities, respectively for a total of $159,972,560 including the amounts both due in one year and due in more than one year. of which $94,620,000 is for the 2020 Taxable Pension Obligation Bonds; $73,832,926 for governmental and $20,787,074 for business-type activities. The Long-Term Liabilities due in more than one year were of $124,731,948 and $21,553,550 for governmental and business-type activities, respectively for a total of $146,285,498.
♦ The City’s total net position decreased by $11,722,047 in 2022-2023. Net position of governmental activities decreased by $11,732,421 while net position of business type activities increased by $10,374. The changes for governmental activities were due primarily to 1) Additional Sales Tax Revenue compared to the prior year in the amount of around $3 million as the economy continued to improve. 2) The Utility User Tax increased by $1.4 million from additional usage and higher utility prices. 3) The City’s OPEB liability decreased by $11.5 million due to higher discount rate used for the actuarial valuation. 4) The City’s expenses increased by about $46 million mainly due to the increase in pension liabilities.
♦ At the close of the 2022-2023 fiscal year, the City’s governmental funds reported combined fund balances of $86,505,397, an increase of $12,835,393 in comparison to the prior year. General Fund increased by $8,312,823. The increase is due primarily to increases in Sales Tax Revenue for the Bradley Burns and Measure G sales tax revenue, which was higher than prior year by about $1.7 Million. The City’s Use of Money and Property, primarily its return on investments increase by $3.4 million compared to the prior year because of higher investment returns and a greater fair market value on its investments. The City’s General Fund expenditures, increased by approximately $5.5 million compared to the prior year as the City was over budget in the general fund by $992k. The Economic development grants special revenue fund increased by $200k, as a result of the City receiving additional Park in Lieu revenue due to the increase in City projects. The City Capital Projects fund remained the same ending fund balance compared to the last year. The City Debt Service fund increased by $396k as it maintained its principal and interest payments throughout the fiscal year.
5 City of Gardena
Management’s Discussion and Analysis (Unaudited) (Continued) Financial Highlights (Continued)
♦ At the end of the 2022-2023 fiscal year, the unrestricted fund balance (the total of the committed, assigned, and unassigned components of fund balance) for the General Fund was $49,811,191 or approximately 77% of total General Fund expenditures.
♦ The City’s long-term debt decreased by $4,887,660 compared to prior year based on the City paying the annual debt service principal payments for the applicable debts during the fiscal year. In 2021- 2022, the City issued a 2021 Lease Revenue Bond in the amount of $13.2 million dollars with a 20- year term at 1.98% true interest cost over the life of the bond.

Overview of the Financial Statements
The discussion and analysis provided here are intended to serve as an introduction to the City’s basic financial statements. The City’s basic financial statements consist of three components: 1) governmentwide financial statements; 2) fund financial statements; and 3) the notes to financial statements. This report also includes supplementary information intended to furnish additional detail to support the basic financial statements themselves.

Government-wide Financial Statements. The government-wide financial statements are designed to provide readers with a broad overview of the City’s finances, in a manner similar to a private-sector business.

The statement of net position presents financial information about all of the City’s assets, deferred outflows of resources, liabilities, and deferred inflows of resources, with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating.

The statement of activities presents information showing how the City’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave).

Both of the government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City include general government, public safety, public works, community development, and recreation and human services. The business-type activities of the City include GTrans and the City's Sewer Maintenance Program.

The government-wide financial statements can be found on pages 20-23 of this report.

Fund Financial Statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance related legal requirements. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds.
6 City of Gardena
Management’s Discussion and Analysis (Unaudited) (Continued) Overview of the Financial Statements (Continued)
Governmental Funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the governmentwide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in assessing a government’s near-term financing requirements.

Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions.

Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.

The City maintains thirteen (13) individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the General Fund, the Economic Development Grants Special Revenue Fund, City Debt Service Fund, and the Capital Projects Fund, which are considered to be major funds. Data from the other ten (9) governmental funds are combined into a single aggregated presentation.

Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements in the combining and individual fund statements and schedules section of this report.

The City adopts an annual appropriated budget for its general fund. A budgetary comparison statement has been provided for the general fund to demonstrate compliance with this budget.

The governmental fund financial statements can be found on pages 28-34 of this report.

Proprietary Funds. The City maintains two (2) different types of proprietary funds. Enterprise Funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City uses enterprise funds to account for its transit operation and for its sewer maintenance. Internal Service Funds are an accounting device used to accumulate and allocate costs internally among the City’s various functions. The City uses internal service funds to account for the management of its retained risks which includes liability insurance, workers’ compensation, and health insurance. Because all of these services predominantly benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements.

Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the transit operation and for the sewer maintenance, both of which are considered to be major funds of the City.

Conversely, internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds are provided in the form of combining statements in the combining and individual fund statements and schedules section of this report.

The proprietary fund financial statements can be found on pages 36-41 of this report. 7 City of Gardena
Management’s Discussion and Analysis (Unaudited) (Continued) Overview of the Financial Statements (Continued)
Notes to the Financial Statements. The notes provide additional information that is necessary to acquire a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 45-97 of this report.

Other Information. In addition to the basic financial statements and accompanying notes, this report also presents required supplementary information concerning the City’s funding its obligation to provide pension and OPEB benefits to its employees and includes Budgetary Comparison schedules for the General Fund and the Economic Development Grants Special Revenue Fund. Required supplementary information can be found on pages 101-123 of this report The combining statements, referred to earlier in connection with nonmajor governmental funds and internal service funds, are presented immediately following the required supplementary information.

Combining and individual fund statements and schedules can be found on pages 130-161 of this report.

Government-wide Overall Financial Analysis
As noted earlier, net position, over time, may serve as a useful indicator of a government’s financial position. In the case of the City, liabilities and deferred inflows of resources exceeded assets and deferred outflows of resources by $18,944,010 at the close of the 2022-2023 fiscal year. 2023 2022* 2023 2022* 2023 2022*
Current and Non Current assets $ 122,943,977 $ 108,775,385 $ 12,305,902 $ 11,074,930 $ 135,249,879 $ 119,850,315 Aggregate net pension assets 38,527,341 - 10,712,038 - 49,239,379 - Capital assets 59,480,793 55,244,042 60,259,791 60,069,599 119,740,584 115,313,641 Total Assets: 182,424,770 202,546,768 72,565,693 81,856,567 254,990,463 284,403,335 Deferred outflow of resources related to pensions 37,950,104 42,960,563 7,455,416 1,293,367 45,405,520 44,253,930 Deferred outflow of resources related to OPEB 13,643,783 13,080,884 2,596,215 1,198,735 16,239,998 14,279,619 Total deferred outflows of resources: 51,593,887 56,041,447 10,051,631 2,492,102 61,645,518 58,533,549 Current liabilities 25,405,457 33,278,888 20,378,849 18,174,777 45,784,306 51,453,665 Non-current liabilities
Long-term liabilities-Due in more than one year 124,731,948 120,071,123 21,553,550 22,558,077 146,285,498 142,629,200 Aggregate net pension liabilities 16,120,826 3,233,030 - 19,353,856 - - Aggregate net other postemployment benefits liabilities 64,768,264 76,280,979 8,020,898 6,448,522 72,789,162 82,729,501 Subtotal Non-current liabilities 205,621,038 196,352,102 32,807,478 29,006,599 238,428,516 225,358,701 Total Liabilities: 231,026,495 229,630,990 53,186,327 47,181,376 284,212,822 276,812,366 Deferred inflows of resources related to pensions 33,463,248 57,719,674 1,910,303 9,584,820 35,373,551 67,304,494 Deferred inflows of resources related to OPEB 14,968,157 4,944,373 1,025,461 1,097,614 15,993,618 6,041,987 Total deferred outflows of resources: 48,431,405 62,664,047 2,935,764 10,682,434 51,367,169 73,346,481 Net Investment in Capital
Assets 43,557,695 40,126,502 59,138,198 59,701,427 102,695,893 99,827,929 Restricted 26,022,626 21,665,716 - 26,022,626 - 21,665,716 Unrestricted (deficit) (115,019,564) (95,499,040) (32,642,965) (33,216,568) (147,662,529) (128,715,608) Total Net Position: $ (45,439,243) $ (33,706,822) $ 26,495,233 $ 26,484,859 $ (18,944,010) $ (7,221,963) * 2022 balances were restated due to the implementation of GASB 96 Governmental Activities Business-type Activities TOTAL

CITY OF GARDENA NET POSITION
8 City of Gardena
Management’s Discussion and Analysis (Unaudited) (Continued) Government-wide Overall Financial Analysis (Continued)
By far, the largest portion of the City’s net position reflects its net investment in capital assets (e.g., land, buildings, machinery, equipment, vehicles, and infrastructure), less any related outstanding debt that was used to acquire those assets. The City uses these capital assets to provide a variety of services to its citizens. Accordingly, these assets are not available for future spending. Although the City’s investment in capital assets is reported net of related debt, it should be noted that the resources used to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.

The City’s largest liabilities are their Long-term liabilities - Due in more than one year, which increased from $120,071,123 in 2021-2022 to $124,731,948 in fiscal year 2022-2023, or an increase of $4,660,825, mainly from the increase in claim payables, compensated absences, and the recording of subscription liability due to the implementation of GASB 96 Subscription-Based Information Technology Arrangements (“SBITA”). The other additional long-term liabilities are Other Post-Employment Benefits (OPEB) of $64,768,264, a decrease of $11.5 million compared to the prior year; this decrease is related to the increase of actuarial discount rate from 2.16% to 3.54%. for 20-year Municipal Bond Index, which helped reduce the estimated liabilities. These two liabilities total $189,500,212 for Governmental Activities, or 82%, of the total liability balance of $231,026,495 at June 30, 2023. The remaining noncurrent liability is the pension liability, which has an increase to $16,120,826 from having a net pension asset in the amount of $38,527,341 in fiscal year 2021-2022..

An additional portion of the City’s net position (Restricted) represents resources that are subject to external restrictions on how they may be used. The remaining balance of $ (147,662,529) is unrestricted and if positive, may be used to meet the government’s ongoing obligations to its citizens and creditors which include the net debt, net pension liabilities, and OPEB liabilities.

At the end of the 2022-2023 fiscal year, the City is able to report positive balances in all reported categories of net position with the exception of unrestricted, both for the government as a whole, as well as for its separate governmental and business-type activities. The negative in unrestricted net position is a result of 1) Long term Liabilities- Due in more than one year which includes the pension bond debt as a result of the 2020 Taxable Pension Obligation Bond 2) GASB 75, which is for other post-employment benefit liabilities; 3) GASB 68, which is for pension liabilities.

The City’s overall net position decreased by $11,722,047 from the prior fiscal year. The reasons for this overall decrease are discussed in the below sections for governmental activities and business-type activities.

Governmental Activities. During 2022-2023 fiscal year, net position for governmental activities decreased by $11,732,421 from the prior fiscal year for an ending balance of $(45,439,243). The decrease in the overall net position was primarily related to: 1) Total public safety expenses increased by $50.3 million compared to the prior year, which is due primarily to pension expense adjustment, lead overall expenses to increase by $46 million or 72% compared to the prior year. Revenues were up $1.6 million or 2% compared to the prior year.
9 City of Gardena
Management’s Discussion and Analysis (Unaudited) (Continued) Government-wide Overall Financial Analysis (Continued)

10 City of Gardena
Management’s Discussion and Analysis (Unaudited) (Continued) Government-wide Overall Financial Analysis (Continued)
Business-type Activities. In the 2022-2023 fiscal year, the City’s business-type activities increased the net position by $10,374 compared to the prior year balance for the fiscal year ended June 30, 2023. Businesstype activities revenue increased by $379k or 1.3% compared to the prior year for a total of $30,636,211 in revenues at year-end. In comparison to the prior fiscal year, the charges for services increased by $12,201 or 0.3% with charges for services remaining constant with prior years. Operating grants and contributions increased by $726,078 or 3.3% compared to the prior fiscal year, primarily due to increased liability claims and higher fuel prices. Therefore, GTrans used more operating subsidies to cover the shortfall. Capital grants and contributions decreased by $728,784 or 18.6% primarily due higher capital related expenses incurred in fiscal year 21-22 for the installation of the CNG station; the project is nearing completion resulting a decrease in the capital grants and contributions from the fiscal year 2021-2022 to the fiscal year 2022-2023. Investment income and miscellaneous increased by $369,394 or 540% compared to the prior year due to the City exploring additional investment options within its investment policy and earning significantly higher interest rates. Expenses for operations increased by $719,806 or 2.4% compared to prior year, which was largely due cost of living expenses paid to employees, higher increased liability claims and higher fuel prices.

Financial Analysis of Governmental Funds
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.

Governmental Funds. The focus of the City’s governmental funds is to provide information about near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City’s financing requirements. In particular, an unassigned fund balance may serve as a useful measure of a government’s net resources available for discretionary use as they represent the portion of fund balance which has not yet been limited to use for a particular purpose by either an external party, the City itself, or a group or individual that has been delegated authority to assign resources for use for particular purposes by the City’s Council.

On June 30, 2023, the City’s governmental funds reported combined fund balances of $86,503,397 an increase of $12,835,393 or 17% in comparison with the prior year. Approximately (0.1%) of this amount is ($47,129) and constitutes an unassigned fund balance, which is available for spending at the government’s discretion. The remainder of the fund balance is either nonspendable, restricted, committed, or assigned to indicate that it is: 1) not in spendable form $638,503; 2) restricted for purposes $36,402,832 ; 3) committed for purposes $26,848,674 ; or 4) assigned for purposes $22,662,517.

The General Fund is the chief operating fund of the City. At the end of the 2022-2023 fiscal year, the unassigned fund balance of the General Fund was $300,000, while the total fund balance increased from $41,825,774 to $50,138,597, an increase of $8,312,823 or a 20% increase from the prior year. As a measure of the General Fund’s liquidity, it may be useful to compare both the unassigned fund balance and the total fund balance to total general fund expenditures. Unassigned fund balance represents approximately 0.5% of total general fund expenditures, while total fund balance represents approximately 77% of that same amount.
11 City of Gardena
Management’s Discussion and Analysis (Unaudited) (Continued) Financial Analysis of Governmental Funds (Continued)
The fund balance of the City’s General Fund increased by $8,312,823 during the 2022-2023 fiscal year. The Top 5 Revenue generators, which make up 74% of the General Fund Original Adopted Budget for Fiscal Year 2022-2023, was up $5.7 million compared to the budgeted amount or 10% ; 1) Sales Tax revenue for the Bradley Burns 1.0% was up $807k compared to budget and Sales Tax from Measure G .75% was up $2.3 million compared to the budget for a total increase of overall sales tax of $3.1 million as a majority of the sales tax generators did significantly better than expected ; 2) Card Club revenue was down $207k compared to the budget as mainly due to slow recovery from Lucky Lady Casino; 3) Property Taxes were up $981k compared to budget with the continued thriving development in the City and higher housing prices in the region; 4) Utility Users Tax increased by $1.4 million from higher utility prices; and 5) Motor Vehicle In-Lieu increased by $443k from the budget primarily based on updated fee rates.

The Economic Development Grants Special Revenue Fund, a major fund, had an increase of $213k in fund balance during the fiscal year primarily due to an additional park in lieu related fees for the various development projects within the city that were completed in the fiscal year.

The Debt Service Fund, a major fund, had an increase of $396k in fund balance during the fiscal year, due to the interest income from remaining project balance in the 2021 Lease Revenue Bond. The 2021 Lease Revenue Bond will be used to fund a portion of the new Gardena Community Aquatic & Senior Center, the cost of acquiring and renovating an existing building to be converted into a new Community Center and various park improvements.

The Capital Projects Fund, a major fund, had a fund balance of $301,897. During the fiscal year, the expenditures for this fund were being reimbursed by the project funding sources such as local and state grants. Therefore, no changes in the fund balance for the fiscal year.

Proprietary Funds. The City’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail.

Unrestricted net position of GTrans at the end of the fiscal year was $(24,503,020) and for the Sewer Fund was $2,530,500. The total decrease in net position for GTrans was $522k and the Sewer Fund net position increased by $568k, respectively. GTrans decrease in net position was due to the increases in transit operation. The Sewer Fund increase is based on the delay in starting several capital projects and the expenditures savings related to that.

General Fund Budgetary Highlights
The final budget for revenue was not amended and stayed the same as the original adopted budget of $72,607,910. Actual revenue compared to the final budget was up by $7.2 million or 10% compared to the final budget. This is primarily a result of an increase in sales tax revenue compared to the budget of about $3 million, an increase of $1.4 million for utility users tax compared to budget and overall, a rebound for the economy. A detailed budgetary comparison schedule for the year ended June 30, 2023, is presented as required supplementary information following the notes to the financial statements. 12 City of Gardena
Management’s Discussion and Analysis (Unaudited) (Continued) General Fund Budgetary Highlights (Continued)
The final amended budget for combined General Fund expenditures was the same as the original budget, of $63,812,789. Actual expenditures were more than the final budget by around $990k or 1.6% percent, which was primarily the result of additional capital expenditures. A detailed budgetary comparison schedule for the year ended June 30, 2023, is presented as required supplementary information following the notes to the financial statements.

Capital Assets and Debt Administration
Capital Assets. The City’s investment in capital assets for its governmental and business-type activities as of June 30, 2023, amounts to $119,740,584 (net of accumulated depreciation and amortization). This investment in capital assets includes land, buildings, machinery, equipment, vehicles, park facilities, roads, highways, and right to use assets – lease and SBITA assets. The total increase in capital assets compared to prior year was $4,426,943 or 3.8%, primarily due to more capital projects being started in 2022-2023 fiscal year.
13 City of Gardena
Management’s Discussion and Analysis (Unaudited) (Continued) Capital Assets and Debt Administration (Continued)
Major capital asset eventsduring the 2022-2023 fiscal year included the following:
• Acquisition of a property locate at 1731 W 162nd Street • Completion of 170th Street Improvement project
• Completion of Pedestrian Safety Improvement project
• Acquisition of a new street sweeper truck
Additional information on the City’s capital assets can be found in Note 7 on pages 67-68 of this report.

Long-term Debt. At the end of the 2022-2023 fiscal year, the City had total bonded debt outstanding of $130,485,822. The City’s long-term debt decreased by $4,887,660 or 3.6% compared to prior year based on the City paying the annual debt service principal payments for the applicable debts below during the fiscal year.

Additional information about the City’s long-term debt can be found in Note 8 on pages 69-76 of this report.

Economic Factors and Next Year’s Budget and Rates
As a result of the City’s fiscally conservative approach taken these past couple of years, the City finds itself in a financially stable position, which allowed the City in its adopted budget for fiscal year 2023-2024, to budget for and add a total of 20 full-time equivalent (FTE) positions, as well as investments in seniors, youth and community service programs and the largest budgeted Capital Improvement Program in the Cities history with over $50 million budgeted for the next fiscal years. 14 City of Gardena
Management’s Discussion and Analysis (Unaudited) (Continued) Economic Factors and Next Year’s Budget and Rates (Continued) The City adopted Fiscal Year 2023-2024 budget on June 27, 2023. The General Fund Revenue Budget for 2023-2024 was $82,002,199 with expenditures of $81,831,342 for a surplus of $170,857.

In 2023-2024 the Top 5 Adopted Budgeted General Fund revenue sources, which make up 73% of the City’s General Fund, include: 1) Sales and Use Tax - $27.2 million (33%), 2) Property Taxes - $9.9 million (12%), 3) Card Club Gross Revenue Fees - $9.2 million (11%) 4) Vehicle License Fees - $7.9 million (10%), and 5) Utility Users Tax - $6.1 million (7%).

In 2023-2024 the General Fund expenditures were $81,831,342, with the Police Department making up $34.8 million or 43%, Non-Departmental (including the Fire Department and our South Bay Regional Public Communications Authority) $14.6 million or 18%, Transfers Out at $8.6 million or 11%, Public Works at $7 million or 9%, Recreation and Human Services at $5.1 million or 6%, Debt Service Payments at $3 million or 4%, Elected and City Managers Offices at $2.9 million or 3%, Community Development Department at $3 million or 3% and the Administrative Services Department at $2.7 million or 3%.

As we look to futures years the economy and threats on an economic slowdown loom, however the City is well prepared to face these events if they do occur as we are very fortunate to have a stable diverse economic base, which somewhat shields our economy from downturns in any specific category.

Requests for Information
This financial report is designed to provide our citizens, taxpayers, customers, investors, and creditors with a general overview of the City’s and to show the city’s accountability for the money it receives. If you have questions about this report or need additional financial information, contact the Administrative Services Department, 1700 W. 162nd Street, Gardena, CA 90247. 15 City of Gardena
Annual Comprehensive Financial Report
For the Year Ended June 30, 2023
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16 BASIC FINANCIAL STATEMENTS
17 City of Gardena
Annual Comprehensive Financial Report
For the Year Ended June 30, 2023
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18 GOVERNMENT-WIDE

FINANCIAL STATEMENTS
19 Governmental Business-Type
Activities Activities Total
ASSETS
Current assets:

Cash and investments 77,295,313 $ 25,240,370 $ 102,535,683 $ Receivables, net 9,828,824 465,249 10,294,073
Due from other governments 1,640,783 3,525,434 5,166,217 Internal balances 17,763,827 (17,763,827) -
Prepaid items 94,032 611,065 705,097
Inventories 744,644 42,815 787,459
Total current assets 12,305,902 107,182,627 119,488,529 Noncurrent assets:

Restricted cash and investments:

Cash with fiscal agent 13,807,281 - 13,807,281
Loans receivable 1,954,069 - 1,954,069
Capital assets:

Capital assets, not being depreciated 18,595,006 20,760,839 39,355,845 Capital assets, being depreciated 39,310,031 39,183,008 78,493,039 Intangible asset, being amortized 1,575,756 315,944 1,891,700 Total capital assets 59,480,793 60,259,791 119,740,584
Total noncurrent assets 60,259,791 75,242,143 135,501,934 Total assets 72,565,693 182,424,770 254,990,463

DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows of resources related to pensions 37,950,104 7,455,416 45,405,520 Deferred outflows of resources related to other postemployment benefits 13,643,783 2,596,215 16,239,998 Total deferred outflows of resources 10,051,631 51,593,887 61,645,518 Primary Government
City of Gardena
Statement of Net Position
June 30, 2023
See accompanying Notes to the Basic Financial Statements. 20 Governmental Business-Type
Activities Activities Total

LIABILITIES
Current liabilities:

Accounts payable 4,034,667 1,190,158 5,224,825
Accrued liabilities 442,528 110,148 552,676
Salaries and benefits payable 565,327 244,222 809,549
Retention payable 116,252 - 116,252
Deposits payable 3,901,464 - 3,901,464
Unearned revenue 3,167,314 17,386,473 20,553,787
Accrued interest payable 938,691 - 938,691
Compensated absences - due within one year 1,853,798 384,281 2,238,079 Claims payable - due within one year 4,811,358 - 4,811,358 Long-term debt - due within one year 5,574,058 1,063,567 6,637,625 Total current liabilities 20,378,849 25,405,457 45,784,306 Noncurrent liabilities:

Compensated absences - due in more than one year 7,371,178 1,537,123 8,908,301 Claims payable - due in more than one year 13,529,000 - 13,529,000 Long-term debt - due in more than one year 103,831,770 20,016,427 123,848,197 Aggregate net pension liabilities 16,120,826 3,233,030 19,353,856 Aggregate net other postemployment benefits liabilities 64,768,264 8,020,898 72,789,162 Total noncurrent liabilities 32,807,478 205,621,038 238,428,516 Total liabilities 53,186,327 231,026,495 284,212,822

DEFERRED INFLOWS OF RESOURCES
Deferred inflows of resources related to pensions 33,463,248 1,910,303 35,373,551 Deferred inflows of resources related to other postemployment benefits 14,968,157 1,025,461 15,993,618 Total deferred inflows of resources 2,935,764 48,431,405 51,367,169

NET POSITION
Net investment in capital assets 43,557,695 59,138,198 102,695,893 Restricted for:

Law enforcement 1,414,499 - 1,414,499
Local street improvements 14,126,722 - 14,126,722
Economic development 6,965,240 - 6,965,240
Other purposes 1,219,550 - 1,219,550
Capital projects 301,897 - 301,897
Debt service - 1,994,718 1,994,718
Total restricted 26,022,626 - 26,022,626
Unrestricted (deficit) (115,019,564) (32,642,965) (147,662,529) Total net position (deficit) $ 26,495,233 (45,439,243) $ (18,944,010) $ Primary Government
City of Gardena
Statement of Net Position (Continued)
June 30, 2023
See accompanying Notes to the Basic Financial Statements. 21 Operating Capital Total
Charges for Grants and Grants and Program
Functions/Programs Expenses Services Contributions Contributions Revenues Governmental activities:

General government 7,470,021 $ 4,149,501 $ 933,906 $ - $ 5,083,407 $ Public safety 77,971,300 1,251,096 906,496 46,616 2,204,208 Public works 10,737,606 396,408 2,608,302 3,153,416 6,158,126 Recreation and human services 8,229,820 3,647,400 1,137,758 - 4,785,158 Community development 2,266,794 2,521,913 228,246 129,796 2,879,955 Interest and fiscal charges 3,773,164 - - - -
Total governmental activities 11,966,318 110,448,705 5,814,708 3,329,828 21,110,854 Business-type Activities:

GTrans 28,643,376 1,793,580 22,744,442 3,186,920 27,724,942 Sewer 1,466,607 2,473,501 - - 2,473,501
Total business-type activities 4,267,081 30,109,983 22,744,442 3,186,920 30,198,443 Total primary government $ 16,233,399 140,558,688 $ 28,559,150 $ 6,516,748 $ 51,309,297 $ City of Gardena
Statement of Activities
For the Year Ended June 30, 2023
Program Revenues
See accompanying Notes to the Basic Financial Statements. 22 Governmental Business-Type
Functions/Programs Activities Activities Total
Governmental activities:

General government (2,386,614) $ - $ (2,386,614) $
Public safety (75,767,092) - (75,767,092)
Public works (4,579,480) - (4,579,480)
Recreation and human services (3,444,662) - (3,444,662) Community development 613,161 - 613,161
Interest and fiscal charges (3,773,164) - (3,773,164)
Total governmental activities - (89,337,851) (89,337,851) Business-type Activities:

GTrans (918,434) - (918,434)
Sewer 1,006,894 - 1,006,894
Total business-type activities 88,460 - 88,460
Total primary government 88,460 (89,337,851) (89,249,391) General revenues and transfers:

General revenues:

Taxes:

Property taxes 9,985,883 - 9,985,883
Sales taxes 29,662,286 - 29,662,286
Business license 2,733,939 - 2,733,939
Utility users taxes 6,317,851 - 6,317,851
Franchise taxes 3,275,380 - 3,275,380
Card club - 8,633,144 8,633,144
Other taxes - 5,882,066 5,882,066
Total taxes 66,490,549 - 66,490,549
Vehicle license - unrestricted 8,073,890 - 8,073,890
Investment income (loss) 1,881,428 437,768 2,319,196
Miscellaneous - 643,709 643,709
Total general revenues 437,768 77,089,576 77,527,344
Transfers (515,854) 515,854 -
Changes in net position 10,374 (11,732,421) (11,722,047) Net position (deficit) - beginning of year 26,484,859 (33,706,822) (7,221,963) Net position (deficit) - end of year $ 26,495,233 (45,439,243) $ (18,944,010) $ Net (Expense) Revenue and
Changes in Net Position
City of Gardena
Statement of Activities (Continued)
For the Year Ended June 30, 2023
See accompanying Notes to the Basic Financial Statements. 23 City of Gardena
Annual Comprehensive Financial Report
For the Year Ended June 30, 2023
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24 FUND FINANCIAL STATEMENTS
Governmental Fund Financial Statements
Proprietary Fund Financial Statements
Fiduciary Fund Financial Statements
25 City of Gardena
Annual Comprehensive Financial Report
For the Year Ended June 30, 2023
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26 GOVERNMENTAL FUND

FINANCIAL STATEMENTS
General Fund - To account for and report all financial resources not accounted for and reported in another fund.

City Debt Service Fund - To account for and report financial resources that are restricted, committed or assigned to expenditure for principal and interest.

Nonmajor Governmental Funds - To account for the aggregate of all the nonmajor governmental funds.

Economic Development Grants Special Revenue Fund - To account for the fourteenth funds used for housing, environmental issues, and land use improvement. Six of the funds receive pass-through funding from the California U.S. Department of Housing and Urban Development ("HUD") or program income to assist cities and counties to create and retain affordable housing and community projects. Eligible activities include housing rehabilitation loans to benefit lower income owners and loans for development of the lowincome senior rental property. One fund is used to provide park or recreational facilities using fees received from the developers as required by the City's ordinance. Two funds receive funding from the U.S. Environmental Protection Agency ("EPA"). These grants are used to empower communities and other stakeholders in economic redevelopment to work together in a timely manner to prevent, assess, safely clean up, and sustainably use brownfields (previously unusable land) reuse contaminated properties. Two funds receive funding from the California Department of Housing and Community Development (“HCD”) to assist local government for the preparation, adoption, and implementation of planning and process improvements that streamline housing approvals and accelerate housing production. One fund to account for development impact fee to provide infrastructure and facility improvements as required by City’s ordinance. One fund to account for a community project grant from the California Department of Technology (DOT).

City Capital Projects Fund - Represents the financial resources that are restricted, committed or assigned to expenditures for capital outlay.
27 Economic
Development City
General Grants Special Capital City
Fund Revenue Projects Debt Service
ASSETS
Cash and investments 38,039,882 $ 4,926,269 $ 1,946,318 $ - $ Cash and investments with fiscal agents - - 13,807,281
Receivables:

Accounts 928,809 216,071 -
Taxes 7,263,471 - -
Interest 49,661 - -
Employees 36,526 - -
Loans - 1,954,069 -
Inventories 42,815 - -
Prepaid items and deposits 284,591 - 291,500
Due from other governments - - -
Due from other funds 10,024,791 - -
Total assets $ 7,096,409 56,670,546 $ 1,946,318 $ 14,098,781 $

LIABILITIES, DEFERRED INFLOWS OF L

RESOURCES AND FUND BALANCES
Liabilities:

Accounts payable 1,749,770 $ 32,454 $ 1,528,644 $ - $
Accrued liabilities 126,101 - 291
Salaries and benefits payable 542,368 - -
Due to other funds - 261,773 349,271
Unearned revenue 114,128 - -
Retention payable - 475 115,777 -
Deposits payable 3,901,464 - -
Total liabilities 294,702 6,433,831 1,644,421 349,562
Deferred inflows of resources:

Unavailable revenue 98,118 86,275 - -
Total deferred inflows of resources 86,275 98,118 - -
Fund balances:

Nonspendable 327,406 - - 291,500
Restricted - 6,715,432 301,897 13,746,868
Committed 26,848,674 - - -
Assigned 22,662,517 - - -
Unassigned (deficit) 300,000 - - (289,149)
Total fund balances 6,715,432 50,138,597 301,897 13,749,219 Total liabilities, deferred inflows of
resources, and fund balances $ 7,096,409 56,670,546 $ 1,946,318 $ 14,098,781 $ (Continued)
Major Funds
City of Gardena
Balance Sheet
Governmental Funds
June 30, 2023
See accompanying Notes to the Basic Financial Statements. 28 Nonmajor Total
Governmental Governmental
Funds Funds
ASSETS
Cash and investments $ 64,817,257 19,904,788 $
Cash and investments with fiscal agents 13,807,281 -
Receivables:

Accounts 2,322,128 1,177,248
Taxes 7,414,774 151,303
Interest 49,661 -
Employees 36,526 -
Loans 1,954,069 -
Inventories 42,815 -
Prepaid items and deposits 595,688 19,597
Due from other governments 1,640,783 1,640,783
Due from other funds 10,024,791 -
Total assets $ 102,705,773 22,893,719 $

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES AND FUND BALANCES
Liabilities:

Accounts payable $ 3,938,707 627,839 $
Accrued liabilities 129,438 3,046
Salaries and benefits payable 565,327 22,959
Due to other funds 2,931,409 2,320,365
Unearned revenue 3,167,314 3,053,186
Retention payable 116,252 -
Deposits payable 3,901,464 -
Total liabilities 14,749,911 6,027,395
Deferred inflows of resources:

Unavailable revenue 1,450,465 1,266,072
Total deferred inflows of resources 1,450,465 1,266,072 Fund balances:

Nonspendable 638,503 19,597
Restricted 36,402,832 15,638,635
Committed 26,848,674 -
Assigned 22,662,517 -
Unassigned (deficit) (47,129) (57,980)
Total fund balances 86,505,397 15,600,252
Total liabilities, deferred inflows of
resources, and fund balances $ 102,705,773 22,893,719 $ (Concluded)
City of Gardena
Balance Sheet (Continued)
Governmental Funds
June 30, 2023
See accompanying Notes to the Basic Financial Statements. 29 City of Gardena
Annual Comprehensive Financial Report
For the Year Ended June 30, 2023
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30 Total Fund Balances - Total Governmental Funds $ 86,505,397 Amounts reported for governmental activities in the statement of net position are different because:

Capital assets, not being depreciated 18,595,006 $
Capital assets, depreciable 117,086,015
Less accumulated depreciation (77,775,984)
Right-to-use lease assets 729,511
Right-to-use lease assets accumulated amortization (272,476) Right-to-use subscription assets 1,456,363
Right-to-use subscription assets accumulated amortization (337,642) 59,480,793 (938,691)
(5,574,058)
(103,831,770)
(1,853,798)
(7,371,178)
37,950,104
(16,120,826)
(33,463,248)
13,643,783
(64,768,264)
(14,968,157)
4,420,205
1,450,465
Net position of governmental activities $ (45,439,243)
Aggregate net pension liabilities
Pension related deferred inflows of resources
Net other postemployment benefits liability and the related deferred outflows of resources and deferred inflows of resources are not due and payable in the current period or not available for current expenditures and are not reported in the governmental fund financial statements:

OPEB related deferred outflows of resources
Compensated absences - due within one year
Compensated absences - due in more than one year
Revenues earned but not available to pay for current expenditures for governmental funds are unavailable.

City of Gardena
Reconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Position
June 30, 2023
Capital assets used in governmental activities are not financial resources and are not reported in the funds:

Long-term liabilities were not due and payable in the current period. Therefore, they were not reported in the Governmental Funds' Balance Sheet.

Interest is recognized when due, and therefore, interest payable is not reported in the governmental funds.

Internal service funds are used by management to charge the costs of general liability, workers' compensation and health benefit claims to individual funds. The assets and liabilities of the internal service funds are included in the governmental activities in the Government-Wide Statement of Net Position (net of $10,670,445 allocated to business-type activities).

Amount reported in government-wide statement of position:

Long-term debt - due within one year
Long-term debt - due in more than one year
Aggregate net OPEB liabilities
OPEB related deferred inflows of resources
Net pension liability and the related deferred outflows of resources and deferred inflows of resources are not due and payable in the current period or not available for current expenditures and are not reported in the governmental fund financial statements:

Pension related deferred outflows of resources
See accompanying Notes to the Basic Financial Statements. 31 Economic
Development City
General Grants Special Capital City
Fund Revenue Projects Debt Service
REVENUES:

Taxes 68,777,353 $ - $ - $ - $
Licenses and permits 2,158,749 - - -
Intergovernmental 689,683 275,975 - -
Charges for services 5,659,983 64,000 - -
Fines, forfeitures, and penalties 927,536 270,000 - -
Use of money and property 978,751 94,535 - 416,554
Miscellaneous 613,793 54 - -
Total revenues 704,564 79,805,848 - 416,554
EXPENDITURES:

Current:

General government 6,200,328 - - -
Public safety 42,010,381 - - -
Public works 6,887,999 - - -
Recreation and human services 4,005,992 - - -
Community development 2,620,660 183,002 - -
Capital outlay 2,454,195 - 6,345,749 -
Debt service:

Principal retirement 592,688 - - 4,389,799
Interest and fiscal charges 32,659 - - 3,715,933
Total expenditures 183,002 64,804,902 6,345,749 8,105,732

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 521,562 15,000,946 (6,345,749) (7,689,178) OTHER FINANCING SOURCES (USES):

Transfers in 3,277,369 1,729 6,345,749 8,142,958
Transfers out (11,044,788) (310,525) - (57,771)
Proceeds from sale of assets 31,153 - - -
Issuance of debt 1,048,143 - - -
Total other financing sources (uses) (308,796) (6,688,123) 6,345,749 8,085,187 NET CHANGES IN FUND BALANCES 212,766 8,312,823 - 396,009 FUND BALANCES:

Beginning of year 41,825,774 6,502,666 301,897 13,353,210 End of year $ 6,715,432 50,138,597 $ 301,897 $ 13,749,219 $ (Continued)
Major Funds
City of Gardena
Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds
For the Year Ended June 30, 2023
See accompanying Notes to the Basic Financial Statements. 32 Nonmajor Total
Governmental Governmental
Funds Funds
REVENUES:

Taxes $ 74,247,538 5,470,185 $
Licenses and permits 2,158,749 -
Intergovernmental 12,265,983 11,300,325
Charges for services 5,723,983 -
Fines, forfeitures, and penalties 1,235,414 37,878
Use of money and property 1,881,431 391,591
Miscellaneous 720,310 106,463
Total revenues 98,233,408 17,306,442
EXPENDITURES:

Current:

General government 6,208,151 7,823
Public safety 42,327,977 317,596
Public works 8,435,997 1,547,998
Recreation and human services 8,221,690 4,215,698
Community development 2,837,108 33,446
Capital outlay 8,816,842 16,898
Debt service:

Principal retirement 5,052,989 70,502
Interest and fiscal charges 3,750,867 2,275
Total expenditures 85,651,621 6,212,236

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 12,581,787 11,094,206
OTHER FINANCING SOURCES (USES):

Transfers in 18,089,299 321,494
Transfers out (18,917,929) (7,504,845)
Proceeds from sale of assets 34,093 2,940
Issuance of debt 1,048,143 -
Total other financing sources (uses) 253,606 (7,180,411) NET CHANGES IN FUND BALANCES 12,835,393 3,913,795
FUND BALANCES:

Beginning of year 73,670,004 11,686,457
End of year $ 86,505,397 15,600,252 $
(Concluded)
City of Gardena
Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Governmental Funds
For the Year Ended June 30, 2023
See accompanying Notes to the Basic Financial Statements. 33 Net change in fund balances - total governmental funds: $ 12,835,393 Amounts reported for governmental activities in the Statement of Activities are different because:
7,755,245
The net effect of disposal of capital assets. (3,577)
(3,514,917)
(28,843)
(466,145)
2,051,830
(35,402,200)
Principal repayments of long-term debt $ 5,052,989
Interest accrual on loans payables (86,224)
Proceeds from issuance of long-term debt (1,048,143)
Amortization of bond premium 106,654
Amortization of bond discount 4,011,392 (13,884)
1,092,895
(63,494)
Change in net position of governmental activities $ (11,732,421) Capital outlay ($1,061,597) of capital outlay expenditures were for current public works expenditures for repairs and maintenance and therefore, were not capitalized).

City of Gardena
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-Wide Statement of Activities and Changes in Net Position For the Year Ended June 30, 2023
Acquisition of capital assets was reported as expenditures in the governmental funds. However, in the Government-Wide Statement of Activities, the cost of those assets was allocated over the estimated useful lives as depreciation expense. The following was the amount of capital assets recorded in the current period:

Internal service funds were used by management to charge the costs of certain activities, such as insurance, to individual funds. The net revenue of the internal service funds was reported with governmental activities (net of ($35,737) allocated to business-type activities).

Unavailable revenue is not recognized as revenue in the governmental funds since the revenue is not available to fund expenditures of the current year.

The fund financial statements record interest expenditures on the current financial resources measurement focus whereas the Government-Wide financial statements recognize interest expense on the accrual basis.

The reconciling amount was the change in accrued interest from the prior year.

Proceeds from long-term debt provided current financial resources to governmental funds, but issuing debt increased long-term liabilities in the Government-Wide Statement of Net Position. Repayment of bond principal was an expenditure in the governmental funds, but the repayment reduced long-term liabilities in the Government-Wide Statement of Net Position.

Depreciation and amortization expenses on capital, lease, and subscription assets were reported in the Government-Wide Statement of Activities, but they did not require the use of current financial resources.

Therefore, depreciation and amortization expenses were not reported as an expenditure in the governmental funds.

Long-term compensated absences expense was reported in the Government-Wide Statement of Activities, but it did not require the use of current financial resources. Therefore, the change in long-term compensated absences was not reported as an expenditure in the governmental funds.

Other postemployment benefits and pension expenses were reported in the Government-Wide Statement of Activities, but it did not require the use of current financial resources. Therefore, the increase in other postemployment benefits liability and net pension liabilities were not reported as an expenditure in the governmental funds.

Pension credit net of contribution made after measurement date reported in deferred outflows of resources in the Government-Wide Statement of Net Position but reported as pension expenditures in the governmental funds in the amount of $4,130,399.

OPEB expense net of contribution made after measurement date reported in deferred outflows of resources in the Government-Wide Statement of Net Position but reported as OPEB expenditures in the governmental funds in the amount of $4,966,034.

See accompanying Notes to the Basic Financial Statements. 34 Internal Service Funds - To account for financing of goods and services provided by one department (general liability, workers’ compensation, and health benefits) to other departments of the City on a cost-reimbursement basis.

PROPRIETARY FUND

FINANCIAL STATEMENTS
GTrans Enterprise Fund - To account for user charges, fees, federal, state and county grants and all operating costs associated with the operation of the City’s bus line.

Sewer Enterprise Fund (Nonmajor) - To account for user charges, fees and all operating costs associated with the operation, maintenance, upgrade and periodic reconstructions of the City’s sanitary sewer system. 35 Governmental
Activities
GTrans Nonmajor Sewer Internal
Enterprise Fund Enterprise Fund Total Service Funds
ASSETS
Current assets:

Cash and investments 21,522,326 $ 3,718,044 $ 25,240,370 $ 12,478,056 $ Restricted cash - - - -
Accounts receivable, net 248,542 216,707 465,249 5,735
Due from other governments 3,525,434 - 3,525,434 -
Inventories 744,644 - 744,644 -
Prepaid items and deposits 71,866 22,166 94,032 15,377
Total current assets 3,956,917 26,112,812 30,069,729 12,499,168 Noncurrent assets:

Capital assets, net 59,036,668 1,223,123 60,259,791 -
Total noncurrent assets 1,223,123 59,036,668 60,259,791 - Total assets 5,180,040 85,149,480 90,329,520 12,499,168

DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows of resources related to pensions 7,026,121 429,295 7,455,416 - Deferred outflows of resources related to other
postemployment benefits 85,736 2,510,479 2,596,215 -
Total deferred outflows of resources 515,031 9,536,600 10,051,631 - (Continued)
City of Gardena
Statement of Net Position
Proprietary Funds
June 30, 2023
Business-Type Activities
See accompanying Notes to the Basic Financial Statements. 36 Governmental
Activities
GTrans Nonmajor Sewer Internal
Enterprise Fund Enterprise Fund Total Service Funds

LIABILITIES
Current liabilities:

Accounts payable 1,183,962 6,196 1,190,158 95,960
Accrued liabilities 109,128 1,020 110,148 313,090
Salaries and benefits payable 229,701 14,521 244,222 -
Due to other funds 7,093,382 - 7,093,382 -
Unearned revenue 17,386,473 - 17,386,473 -
Compensated absences, due within one year 360,173 24,108 384,281 - Lease payable, due within one year 13,353 - 13,353 -
Subscription payable, due within one year 100,280 24,997 125,277 - Long-term debt, due within one year 883,679 41,258 924,937 - Claims payable, due within one year - - - 4,811,358
Total current liabilities 112,100 27,360,131 27,472,231 5,220,408 Noncurrent liabilities:

Compensated absences, due in more than one year 1,440,692 96,431 1,537,123 - Claims payable, due in more than one year - - - 13,529,000 Long-term debt, due in more than one year 19,109,460 906,967 20,016,427 - Aggregate net pension liability 3,046,867 186,163 3,233,030 - Aggregate net other postemployment benefits liabilities 7,726,172 294,726 8,020,898 - Total noncurrent liabilities 1,484,287 31,323,191 32,807,478 13,529,000 Total liabilities 1,596,387 58,683,322 60,279,709 18,749,408

DEFERRED INFLOWS OF RESOURCES
Deferred inflows of resources related to pensions 1,800,304 109,999 1,910,303 - Deferred inflows of resources related to other
postemployment benefits 286,045 739,416 1,025,461 -
Total deferred inflows of resources 396,044 2,539,720 2,935,764 -

NET POSITION
Net investment in capital assets 57,966,058 1,172,140 59,138,198 - Unrestricted (deficit) (24,503,020) 2,530,500 (21,972,520) (6,250,240) Total net position $ 3,702,640 33,463,038 $ 37,165,678 $ (6,250,240) $ Net position reconciliation:

Net position of proprietary funds $ 3,702,640 33,463,038 $ 37,165,678 $ (6,250,240) $ Adjustment to reflect the consolidation of .
internal service fund activities related to the
GTrans and Sewer 16,967 (10,687,412) (10,670,445) 10,670,445 Net position of business-type activities 22,775,626 $ 3,719,607 $ 26,495,233 $ Net position related to governmental activities $ 4,420,205 (Concluded)
June 30, 2023
Business-Type Activities
City of Gardena
Statement of Net Position (Continued)
Proprietary Funds
See accompanying Notes to the Basic Financial Statements. 37 City of Gardena
Annual Comprehensive Financial Report
For the Year Ended June 30, 2023
(This page is intentionally left blank)
38 Governmental
Activities
GTrans Nonmajor Sewer Internal
Enterprise Fund Enterprise Fund Total Service Funds
OPERATING REVENUES:

Charges for services 1,571,058 $ 2,473,501 $ 4,044,559 $ 13,692,956 $ Other - 195,866 195,866 1,502,247
Total operating revenues 2,473,501 1,766,924 4,240,425 15,195,203 OPERATING EXPENSES:

Salaries and benefits 15,950,503 873,242 16,823,745 -
Insurance claims - - - 8,670,952
General and administrative 6,223,928 324,541 6,548,469 6,755,223 Depreciation and amortization 3,504,186 160,952 3,665,138 - Other operating expenses 2,305,674 79,075 2,384,749 243,140 Total operating expenses 1,437,810 27,984,291 29,422,101 15,669,315 OPERATING INCOME (LOSS) 1,035,691 (26,217,367) (25,181,676) (474,112) NONOPERATING REVENUES (EXPENSES):

Local transportation fund 7,023,418 - 7,023,418 -
Other local assistance 10,192,921 - 10,192,921 -
Federal transit assistance 4,100,000 - 4,100,000 -
State transit assistance fund 1,428,103 - 1,428,103 -
Interest income 361,480 76,288 437,768 186,786
Interest expense (622,323) (29,822) (652,145) -
Gain on sale of capital assets 26,656 - 26,656 -
Total nonoperating revenues (expenses) 46,466 22,510,255 22,556,721 186,786

INCOME (LOSS) BEFORE
CONTRIBUTIONS AND TRANSFERS 1,082,157 (3,707,112) (2,624,955) (287,326) CONTRIBUTIONS AND TRANSFERS:

Capital contributions 3,186,920 - 3,186,920 -
Transfers in 49,281 - 49,281 2,986,852
Transfers out (563,168) (1,967) (565,135) (1,642,368)
Total contributions and transfers (513,887) 3,184,953 2,671,066 1,344,484 CHANGES IN NET POSITION 568,270 (522,159) 46,111 1,057,158 NET POSITION (DEFICIT):

Beginning of year 33,985,197 3,134,370 37,119,567 (7,307,398) End of year $ 3,702,640 33,463,038 $ 37,165,678 $ (6,250,240) $ Change in net position reconciliation:

Change in net position of proprietary funds $ 568,270 (522,159) $ 46,111 $ 1,057,158 $ Adjustment to reflect the consolidation of
internal service fund activities related to the
GTrans and Sewer 1,025 (36,762) 35,737 (35,737)
Change in net position of business-type activities $ 569,295 (558,921) $ 10,374 $ Change in net position related to governmental activities 1,092,895 $ City of Gardena
Statement of Revenues, Expenses, and Changes in Net Position Proprietary Funds
For the Year Ended June 30, 2023
Business-Type Activities
See accompanying Notes to the Basic Financial Statements. 39 Governmental
Activities
GTrans Nonmajor Sewer Internal
Enterprise Fund Enterprise Fund Total Service Funds
CASH FLOWS FROM OPERATING ACTIVITIES:

Receipts from customers and users 1,647,206 $ 2,472,412 $ 4,119,618 $ 13,892,956 $ Receipts from claims and recoveries - - - 1,502,247
Payments for insurance claims - - - (7,134,219)
Payments to suppliers (8,633,791) (415,897) (9,049,688) (7,499,435) Payments to employees (16,188,619) (940,504) (17,129,123) - Other receipts 195,866 - 195,866
Net cash provided by (used in) operating activities 1,116,011 (22,979,338) (21,863,327) 761,549

CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES:

Transfers from other funds - 49,281 49,281 2,986,852
Transfers to other funds (1,967) (563,168) (565,135) (1,642,368) Payments received from other funds 5,301,595 - 5,301,595 - Principal payments on long term debt (1,043,788) (61,898) (1,105,686) - Interest paid (622,323) (29,822) (652,145) -
Transit assistance funds received 25,139,677 - 25,139,677 - Net cash provided by (used in)
noncapital financing activities (605,607) 28,773,194 28,167,587 1,344,484

CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:

Acquisition of capital assets (3,186,920) (443,177) (3,630,097) - Proceeds from sale of capital assets 26,656 - 26,656 -
Receipt from capital grants 3,186,920 - 3,186,920 -
Net cash provided by (used in) capital
and related financing activities (443,177) 26,656 (416,521) - CASH FLOWS FROM INVESTING ACTIVITIES:

Interest received 76,288 361,480 437,768 186,786
Net cash provided by investing activities 76,288 361,480 437,768 186,786 Net change in cash and cash equivalents 143,515 6,181,992 6,325,507 2,292,819 CASH AND CASH EQUIVALENTS:

Beginning of year 15,340,334 3,574,529 18,914,863 10,185,237 End of year $ 3,718,044 21,522,326 $ 25,240,370 $ 12,478,056 $ (Continued)
City of Gardena
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2023
Business-Type Activities
See accompanying Notes to the Basic Financial Statements. 40 Governmental
Activities
GTrans Nonmajor Sewer Internal
Enterprise Fund Enterprise Fund Total Service Funds

RECONCILIATION OF OPERATING INCOME
(LOSS) TO NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES:

Operating income (loss) (26,217,367) $ 1,035,691 $ (25,181,676) $ (474,112) $ Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities:

Depreciation and amortization expenses 3,504,186 160,952 3,665,138 - (Increase) decrease in:

Accounts receivable 76,148 (1,089) 75,059 200,000
Inventory 81,743 - 81,743 -
Prepaid items and deposits (19,848) (7,439) (27,287) (8,873) Deferred outflows of resources - pensions (5,799,993) (362,056) (6,162,049) - Deferred outflows of resources - OPEB (1,396,023) (1,457) (1,397,480) - Increase (decrease) in:

Accounts payable (106,353) (5,862) (112,215) (156,828)
Accrued liabilities (59,731) 1,020 (58,711) (319,676)
Accrued payroll (459,134) (21,469) (480,603) -
Compensated absences 18,091 (54,111) (36,020) -
Net pension liability 13,202,012 743,055 13,945,067 -
Net other postemployment benefits liability 1,813,748 (241,372) 1,572,376 - Deferred inflows of resources - OPEB (330,593) 258,440 (72,153) - Deferred inflows of resources - pensions (7,286,224) (388,292) (7,674,516) - Deposits payable - - - (15,695)
Claims payable - - - 1,536,733
Total adjustment 3,238,029 80,320 3,318,349 1,235,661
Net cash provided by (used in) operating activities $ 1,116,011 (22,979,338) $ (21,863,327) $ 761,549 $ (Concluded)
Business-Type Activities
Statement of Cash Flows (Continued)
Proprietary Funds
For the Year Ended June 30, 2023
City of Gardena
See accompanying Notes to the Basic Financial Statements. 41 City of Gardena
Annual Comprehensive Financial Report
For the Year Ended June 30, 2023
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42 43

NOTES TO THE BASIC

FINANCIAL STATEMENTS
44 City of Gardena
Annual Comprehensive Financial Report
For the Year Ended June 30, 2023
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City of Gardena
Index to the Notes to the Basic Financial Statements
For the Year Ended June 30, 2023
45 Note 1 – Summary of Significant Accounting Policies ..................................................................................... 47 A. Financial Reporting Entity .................................................................................................................. 47 B. Basis of Accounting and Measurement Focus .................................................................................... 47 C. Cash, Cash Equivalents and Investments ............................................................................................ 50 D. Cash and Investments with Fiscal Agents ........................................................................................... 50 E. Fair Value Measurement ..................................................................................................................... 50 F. Interfund Transactions......................................................................................................................... 50 G. Inventories and Prepaid Items ............................................................................................................. 51 H. Capital Assets ...................................................................................................................................... 51 I. Deferred Outflows and Inflows of Resources ..................................................................................... 52 J. Interest Payable ................................................................................................................................... 52 K. Unearned Revenue .............................................................................................................................. 52 L. Compensated Absences ....................................................................................................................... 52 M. Leases .................................................................................................................................................. 52 N. Pensions............................................................................................................................................... 53 O. Other Postemployment Benefits (“OPEB”) ........................................................................................ 54 P. Claims Payable .................................................................................................................................... 54 Q. Subscription Based Information Technology Arrangements Liabilities ............................................. 54 R. Long-Term Debt .................................................................................................................................. 55 S. Property Taxes .................................................................................................................................... 55 T. Net Position and Fund Balances .......................................................................................................... 56 U. Use of Estimates .................................................................................................................................. 57 V. Implementation of New GASB Pronouncements ............................................................................... 57 Note 2 – Stewardship, Compliance and Accountability .................................................................................... 58 A. Deficit Net Position ............................................................................................................................. 58 B. Expenditures in Excess of Appropriations .......................................................................................... 58 Note 3 – Cash and Investments ............................................................................................................................ 59 A. Deposits ............................................................................................................................................... 60 B. Investments ......................................................................................................................................... 61 C. Fair Value Measurement ..................................................................................................................... 62 D. Risk Disclosures .................................................................................................................................. 62 Note 4 – Other Receivables .................................................................................................................................. 63 A. YMCA Receivables ............................................................................................................................ 63 B. State Mandated Claims Reimbursement ............................................................................................. 63 Note 5 – Loans Receivable .................................................................................................................................... 64 A. Home-Owner Occupied Deferred Loans ............................................................................................. 64 B. Spring Park Senior Villa Developer Loan ........................................................................................... 64 Note 6 – Interfund Transactions .......................................................................................................................... 64 A. Government-Wide Financial Statements ............................................................................................ 64 B. Fund Financial Statements .................................................................................................................. 65 City of Gardena
Index to the Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023
46 Note 7 – Capital Assets ......................................................................................................................................... 67 A. Governmental Activities ..................................................................................................................... 67 B. Business-Type Activities..................................................................................................................... 68 Note 8 – Long-Term Liabilities ............................................................................................................................ 69 A. Governmental Activities ..................................................................................................................... 69 B. Business-Type Activities..................................................................................................................... 75 Note 9 – Self-Insurance Programs ....................................................................................................................... 77 A. Self-Insurance Programs of the City ................................................................................................... 77 B. Purchased Insurance ............................................................................................................................ 77 C. Adequacy of Protection ....................................................................................................................... 77 Note 10 – Retirement Plans .................................................................................................................................. 78 A. California Public Employee’s Retirement System (“CalPERS”) ........................................................ 78 B. Public Agency Retirement System (“PARS”)..................................................................................... 87 Note 11 – Other Postemployment Benefits (“OPEB”) ....................................................................................... 87 Note 12 – Deferred Compensation Plan .............................................................................................................. 95 Note 13 – Net Position and Fund Balances ......................................................................................................... 95 A. Government-Wide Financial Statements ............................................................................................ 95 B. Fund Financial Statements .................................................................................................................. 96 Note 14 – Jointly Governed Organization .......................................................................................................... 97 Note 15 – Commitments and Contingencies ....................................................................................................... 97 City of Gardena
Notes to the Basic Financial Statements
For the Year Ended June 30, 2023
47 Note 1 – Summary of Significant Accounting Policies
The basic financial statements of the City of Gardena, California, (the “City”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) as applied to governmental agencies. The Governmental Accounting Standards Board (“GASB”) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. The following is a summary of the significant policies:

A. Financial Reporting Entity
The City was incorporated September 11, 1930, under the General Laws of the State of California. The City is governed by an elected five-member council.

Blended Component Unit
In evaluating how to define the City for financial reporting purposes, management has considered all potential component units. The primary criteria for including a potential component unit within the reporting entity are the governing body’s financial accountability and a financial benefit or burden relationship and whether it is misleading to exclude. A primary government is financially accountable and shares a financial benefit or burden relationship, if it appoints a voting majority of an organization’s governing body and it is able to impose its will on the organization, or if there is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on the primary government. A primary government may also be financially accountable if an organization is fiscally dependent on the primary government regardless of whether the organization has a separately elected governing board, a governing board appointed by a higher level of government, or a jointly appointed board, and there is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on the primary government.

Management determined that the following component unit should be blended based on the criteria above:

Although the following is legally separate from the City, it has been “blended” as though it is part of the City because the component unit’s governing body is substantially the same as the City’s and there is a financial benefit or burden relationship between the City and the component unit; management of the City has operational responsibilities for the component unit; and/or the component unit provides services entirely, or almost entirely, to the City or otherwise exclusively, or almost exclusively, benefits the City, even though it does not provide services directly to it.

City of Gardena Financing Agency - The City of Gardena Financing Agency (“the Agency”) was created primarily to finance the acquisition of a public parking structure. The members of the City Council serve as the governing board of the Agency and there is a financial benefit or burden relationship between the City and the Agency. The Agency does not issue separate financial statements.

The City had no discretely presented component units.

B. Basis of Accounting and Measurement Focus
The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for by providing a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures or expenses, as appropriate. City resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled.

City of Gardena
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
48 Note 1 – Summary of Significant Accounting Policies (Continued) B. Basis of Accounting and Measurement Focus (Continued) Government-Wide Financial Statements
The Government-Wide Financial Statements are presented on an “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all of the City’s assets, deferred outflows of resources, liabilities, and deferred inflows of resources, including capital assets, as well as infrastructure assets, and long-term liabilities, are included in the accompanying Statement of Net Position. The Statement of Activities presents changes in net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred. Fiduciary activities are not included in these statements.

Certain types of transactions are reported as program revenues for the City in three categories:
• Charges for services
• Operating grants and contributions
• Capital grants and contributions
Certain eliminations have been made in regards to interfund activities, payables and receivables. All internal balances in the Statement of Net Position have been eliminated except those representing balances between the governmental activities and the business-type activities, which are presented as internal balances and eliminated in the total primary government column. In the Statement of Activities, internal service fund transactions have been eliminated; however, those transactions between governmental and business-type activities have not been eliminated. The following interfund activities have been eliminated:
• Due from and to other funds
• Transfers in and out
Governmental Fund Financial Statements
All governmental funds are accounted for on a spending or “current financial resources” measurement focus and the modified accrual basis of accounting. Accordingly, only current assets and current liabilities are included on the Balance Sheet. The Statement of Revenues, Expenditures and Changes in Fund Balances present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in fund balances.

Under the modified accrual basis of accounting, revenues are recognized in the accounting period in which they become both measurable and available to finance expenditures of the current period.

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 these purposes, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. The primary revenue sources, which have been treated as susceptible to accrual by the City, are property taxes, other local taxes, franchise fees, forfeitures and penalties, motor license fees, rents and concessions, interest revenue, and state and federal grants and subventions. Expenditures are recorded in the accounting period in which the related fund liability is incurred.

Reconciliations of the fund financial statements to the Government-Wide Financial Statements are provided to explain the differences.

Certain indirect costs are included as part of the program expenses reported for individual functions and activities.

City of Gardena
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
49 Note 1 – Summary of Significant Accounting Policies (Continued) B. Basis of Accounting and Measurement Focus (Continued) Governmental Fund Financial Statements (Continued)
The City reports the following major governmental funds:
 General Fund - The General Fund is used to account for and report all financial resources not accounted for and reported in another fund.
 Economic Development Grants Special Revenue Fund - The Economic Development Grants Special Revenue Fund is used to account for and report of housing, environmental activities, and land use improvement, including funding received from the U.S. Department of Housing and Urban Development (HUD), the U.S. Environmental Protection Agency, and California Department of Housing & Community Development (HCD) and to account for fees received from developers to fund park and recreation facilities.
 City Capital Projects Fund - Represents the financial resources that are restricted, committed or assigned to expenditures for capital outlay.
 City Debt Service Fund - The City Debt Service Fund is used to account for and report financial resources that are restricted, committed or assigned to expenditure for principal and interest.

Proprietary Fund Financial Statements
Proprietary funds are accounted for using the “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all assets and liabilities (whether current or noncurrent) are included on the Statement of Net Position. The Statement of Revenues, Expenses and Changes in Net Position presents increases (revenues) and decreases (expenses) in total net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred.

Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the proprietary funds are charges to customers for sales and services. Operating expenses for the proprietary funds include the costs of sales and services, administrative expenses and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.

A separate column representing internal service funds is also presented in these statements. However, internal service balances and activities have been combined with the governmental activities and business-type activities in the Government-Wide Financial Statements. The City’s internal service funds include three individual funds which provide services directly to other City funds. These areas of service include general liability, workers’ compensation, and health benefits.

The City reports the following proprietary funds:
 GTrans Enterprise Fund - The GTrans Fund accounts for user charges, fees, federal, state and county grants and all operating costs associated with the operation of the City’s bus line.

City of Gardena
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
50 Note 1 – Summary of Significant Accounting Policies (Continued) B. Basis of Accounting and Measurement Focus (Continued) Proprietary Fund Financial Statements (Continued)
 Sewer Enterprise Fund (Nonmajor) - The Sewer Fund accounts for user charges, fees and all operating costs associated with the operation, maintenance, upgrade and periodic reconstruction of the City’s sanitary sewer system.
 Internal Service Funds – The Internal Service Funds account for financing of goods and services provided by one department (general liability, workers’ compensation, and health benefits) to other departments of the City on a cost-reimbursement basis.

The City considers the GTrans Enterprise Fund to be a major fund for the year ended June 30, 2023.

C. Cash, Cash Equivalents, and Investments
The City’s cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments with original maturity of three months or less from the date of acquisition. All cash and investments of proprietary funds are held in the City's investment pool. These cash pools have the general characteristics of a demand deposit account, therefore, all cash and investments in the proprietary funds are considered cash and cash equivalents for Statement of Cash Flows purposes.

Investments are stated at fair value.

D. Cash and Investments with Fiscal Agents
Cash and investments with fiscal agents are restricted for the redemption of bonded debt and for acquisition and construction of capital projects.

E. Fair Value Measurement
U.S. GAAP defines fair value, establishes a framework for measuring fair value and establishes disclosure about fair value measurement. Investments, unless otherwise specified at fair value in the financial statements, are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Levels of inputs are as follows:
 Level 1 – Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date.
 Level 2 – Inputs, other than quoted prices included in Level 1, that are observable for the assets or liabilities through corroboration with market data at the measurement date.  Level 3 – Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the assets or liabilities at the measurement date.

F. Interfund Transactions
Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as “due from/to other funds” (i.e., current portion of interfund loans). Any residual balances outstanding between the governmental activities and business-type activities are reported in the Government-Wide Financial Statements as “internal balances”.

City of Gardena
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
51 Note 1 – Summary of Significant Accounting Policies (Continued) G. Inventories and Prepaid Items
Inventories within the various fund types consist of materials and supplies which are valued at cost on a first-in, first-out basis. Reported expenditures reflect the consumption method of recognizing inventory-related expenditures.

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

A nonspendable fund balance has been reported in the governmental funds to show that inventories and prepaid items do not constitute “available spendable resources,” even though they are a component of current assets.

H. Capital Assets
In the Government-Wide Financial Statements, capital assets are recorded at cost where historical records are available and at an estimated original cost where no historical records exist. Donated capital assets are valued at their acquisition value. City policy has set the capitalization threshold for reporting capital assets at $5,000.

The City defines infrastructure assets as the basic physical assets that allow the City to function. The assets include streets, bridges, sidewalks, drainage systems, and lighting systems, etc. Each major infrastructure system can be divided into subsystems. For example, the street system can be subdivided into pavement, curb and gutters, sidewalks, medians, streetlights, landscaping and land. These subsystems were not delineated in the basic financial statements. The appropriate operating department maintains information regarding the subsystems.

Major outlays for capital assets and improvements are capitalized as projects are constructed. Capital assets acquired under capital lease are capitalized at the net present value of the total lease payments.

For all infrastructure systems, the City elected to use the “Basic Approach”.

The intangible right‐to‐use asset includes lease assets or subscription-based information technology arrangements (“SBITA”) assets (“subscription asset”). These intangible assets are recorded at the amount of the initial measurement of the lease liabilities or SBITA liabilities (“subscription liabilities”) and adjusted by any lease made to the lessor or subscription payments to the SBITA vendor at or before the commencement of the lease or subscription term, less any incentives received from the lessor or SBITA vendor at or before the commencement of the lease or subscription term along with any initial direct costs that are ancillary charges necessary to place the lease assets into service or subscription implementation costs. Lease assets are amortized using the straightline method over the shorter of the lease term or the useful life of the underlying asset, unless the lease contains a purchase option that the City has determined is reasonably certain of being exercised. In this case, the lease asset is amortized over the useful life of the underlying asset. Subscription assets are amortized over the shorter of the subscription term or the useful life of the underlying Information Technology assets.

Capital assets used in operations are depreciated over their estimated useful lives using the straight-line method.

The lives used for depreciation purposes are as follows:

Buildings/structures and improvements 40 years
Machinery and equipment 3-15 years
Buses 12 years
Furniture and fixtures 3-10 years
Infrastructure 30-60 years
City of Gardena
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
52 Note 1 – Summary of Significant Accounting Policies (Continued) I. Deferred Outflows and Inflows of Resources
The statement of net position and balance sheet – governmental funds reports separate sections for deferred outflows of resources and deferred inflows of resources, when applicable.

Deferred Outflows of Resources represent a consumption of net assets that applies to future periods.

Deferred Inflows of Resources represent an acquisition of net assets that applies to future periods.

J. Interest Payable
In the Government-wide Financial Statements, interest payable on long-term debt is recognized as the liability incurred for governmental activities and business-type activities.

In the Fund Financial Statements, only proprietary fund types recognize the interest payable when the liability is incurred.

K. Unearned Revenue
Unearned revenue is recognized for transactions for which revenue has not yet been earned. Typical transactions recorded as unearned revenues are prepaid charges for services and grants received but not yet earned.

L. Compensated Absences
It is the City’s policy to accrue annual leave when incurred in the Government-wide Financial Statements and the proprietary funds. In governmental funds, the costs for annual leave that are expected to be liquidated with expendable available financial resources are reported as an expenditure and reported as a liability of the governmental fund only if they have matured.

A liability is recorded for unused sick leave balances only to the extent that it is probable that the unused balances will result in termination payments. This is estimated by including in the liability the unused balances of employees currently entitled to receive termination benefits, as well as those who are expected to become eligible to receive termination benefits as a result of continuing their employment with the City. Other amounts of unused sick leave are excluded from the liability since their payment is contingent solely upon the occurrence of a future event (illness) which is outside the control of the City and the employee.

M. Leases
The City has a policy to recognize a lease liability and a right-to-use asset (lease asset) in the financial statements with an initial, individual value of $5,000 or more with a lease term greater than one year. Variable payments based on future performance or usage of the underlying assets are not included in the measurement of the lease liability.

At the commencement of a lease, the lease liability is measured at the present value of payments expected to be made during the lease term. Subsequently, the lease liability is reduced by the principal portion of lease payments made.

City of Gardena
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
53 Note 1 – Summary of Significant Accounting Policies (Continued) M. Leases (Continued)
Lease assets are recorded at the amount of the initial measurement of the lease liabilities and modified by any lease payments made to the lessor at or before the commencement of the lease term, less any lease incentives received from the lessor at or before the commencement of the lease term along with any initial direct costs that are ancillary charges necessary to place the lease assets into service. Lease assets are amortized using the straight– line method over the shorter of the lease term or the useful life of the underlying asset, unless the lease contains a purchase option that the State has determined is reasonably certain of being exercised. In this case, the lease asset is amortized over the useful life of the underlying asset.

Key estimates and judgments related to leases include how the City determines (1) the discount rate it uses to discount the expected lease payments to present value, (2) lease term, and (3) lease payments. • The City uses the interest rate charged by the lessor as the discount rate. When the interest rate charged by the lessor is not provided, the City generally uses its estimated incremental borrowing rate as the discount rate for leases.
• The lease term includes the noncancelable period of the lease, plus any option periods that are reasonably certain to be exercised.
• Lease payments included in the measurement of the lease liability are composed of fixed payments and purchase option price that the City is reasonably certain to exercise. The City monitors changes in circumstances that would require a remeasurement of a lease and will remeasure any lease asset and liability if certain changes occur that are expected to significantly affect the amount of the lease liability.

Lease assets are reported as right-to-use along with other capital assets and lease liabilities are reported on the statement of net position.

N. 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 plans and additions to/deductions from the plans’ fiduciary net position have been determined on the same basis as they are reported by the plans. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with benefit terms. Investments are reported at fair value.

The following timeframes are used for pension reporting:

Valuation Date June 30, 2021
Measurement Date June 30, 2022
Measurement Period July 1, 2021 to June 30, 2022
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. The amortization period differs depending on the source of the gain or loss. The difference between projected and actual earnings is amortized straight-line over 5 years. All other amounts are amortized straight-line over the average expected remaining service lives of all members that are provided with benefits (active, inactive, and retired) as of the beginning of the measurement period.

City of Gardena
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
54 Note 1 – Summary of Significant Accounting Policies (Continued) O. Other Postemployment Benefits (“OPEB”)
For the purpose of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the City’s OPEB Plan and additions to/deductions from the OPEB Plan’s fiduciary net position have been determined on the same basis as they are reported by the Plan. For this purpose, the OPEB Plan recognizes benefit payments when due and payable in accordance with the benefit terms. Investments are reported at fair value, except for money market investments, which are reported at amortized cost.

The following timeframes are reported OPEB reporting:

OPEB
Valuation Date June 30, 2022
Measurement Date June 30, 2022
Measurement Period July 1, 2021 to June 30, 2022
Gains and losses related to changes in total OPEB liability and fiduciary net position are recognized in OPEB expense systematically over time. The first amortized amounts are recognized in OPEB expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to OPEB and are to be recognized in future OPEB expense. The amortization period differs depending on the sources of gain or loss. The difference between projected and actual earnings is amortized on a straight-line basis over 5 years. All other amounts are amortized on a straight-line basis over the average expected remaining service lives of all members that are provided with benefits (active, inactive, and retired) at the beginning of the measurement period.

P. Claims Payable
Claims payable in the Internal Service Fund represents estimates of claims against the City. The estimated claims payable represents the City’s best estimate of the amount to be paid on workers’ compensation and general liability claims. Losses for claims incurred but not reported are also recorded if the probable amount of loss can be reasonably estimated. The City is self-insured for general liability in the amount of $750,000 per claim and $250,000 per claim for GTrans. In addition, City also self-insured for workers’ compensation for $750,000 per claim for both the City and GTrans. Losses in excess of $750,000 for the City and $250,000 for GTrans, up to $25,000,000 for general liability, and in excess of $750,000 for both the City and GTrans, up to the statutory limit for workers’ compensation, are covered by outside insurance.

Q. Subscription Based Information Technology Arrangements Liabilities The City recognizes subscription liabilities with an initial, individual value of $5,000 or more with a subscription term greater than one year in the government-wide and proprietary fund financial statements. Variable payments based on future performance of the City, usage of the underlying IT assets, or number of user seats are not included in the measurement of the subscription liability.

At the commencement of a subscription, the City initially measures the subscription liability at the present value of subscription payments expected to be made during the subscription term. Subsequently, the lease liability is reduced by the principal portion of subscription payments made.

City of Gardena
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
55 Note 1 – Summary of Significant Accounting Policies (Continued) Q. Subscription Based Information Technology Arrangements Liabilities (Continued) Key estimates and judgments related to subscription liabilities include how the City determines (1) the discount rate it uses to discount the expected subscription payments to present value, (2) subscription term, and (3) subscription payments.
• The City uses the interest rate charged by the SBITA vendor as the discount rate. When the interest rate charged by the lessor is not provided, the City generally uses its estimated incremental borrowing rate as the discount rate for subscription liabilities. • The subscription term includes the noncancellable period of the SBITA. Subscription payments included in the measurement of the subscription liability are composed of fixed payments.

The City monitors changes in circumstances that would require a remeasurement of its SBITA and will remeasure any subscription asset or liability if certain changes occur that are expected to significantly affect the amount of the subscription liability.

R. Long-Term Debt
In the Government-Wide Financial Statements and Proprietary Fund Financial Statements, long-term debt and other long-term obligations are reported as liabilities in the appropriate activities. Bond premium and discounts are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are expensed when incurred.

The governmental fund financial statements do not present long-term liabilities. Consequently, long-term debt is shown as a reconciling item in the Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide Statement of Net Position.

S. Property Taxes
Under California law, property taxes are assessed and collected by the counties for up to 1% of assessed property value, plus other increases approved by the voters. Property taxes collected are pooled and then allocated to the cities based on complex formulas. The following are key dates pertaining to property taxes:

January 1 Lien Date
June 30 Levy Date
November 1 and February 1 Due Dates
December 10 and April 10 Collection Dates
Distribution Dates:

November 18, 2022 Unsecured, redemptions, and SB813 taxes December 20, 2022 Homeowners' exemption, secured, and SB813 taxes January 20, 2023 Homeowners' exemption, secured, and SB813 taxes February 17, 2023 Redemptions, secured, and SB813 taxes March 18, 2023 Secured and SB813 taxes
April 20, 2023 Secured and SB813 taxes
May 19, 2023 Redemptions, homeowners' exemption, secured, and SB813 taxes June 20, 2023 Homeowners' exemption, SB813 taxes
July 20, 2023 Secured and SB813 taxes
August 20, 2023 Secured, redemptions, unsecured, and SB813 taxes City of Gardena
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
56 Note 1 – Summary of Significant Accounting Policies (Continued) T. Net Position and Fund Balances
In the Government-Wide Financial Statements and proprietary fund financial statements, net position is classified as follows:

Net Investment in Capital Assets – This component of net position consists of capital assets, net of accumulated depreciation and amortization, reduced by the outstanding balances of retention payable and debt that are attributable to the acquisition, construction, or improvement of those assets.

Restricted – This component of net position consists of restricted assets reduced by liabilities and deferred outflows and inflows of resources related to those assets.

Unrestricted – This component of net position is the amount of the assets, deferred outflows of resources, liabilities, and deferred inflows of resources that are not included in the determination of net investment in capital assets or the restricted component of net position.

In the Governmental Fund Financial Statements, fund balances are classified as follows:

Nonspendable – Nonspendable fund balances are items that cannot be spent because they are not in spendable form, such as prepaid items and inventories, or items that are legally or contractually required to be maintained intact, such as principal of an endowment or revolving loan funds.

Restricted – Restricted fund balances encompass the portion of net fund resources subject to externally enforceable legal restrictions. This includes externally imposed restrictions by creditors, such as through debt covenants, grantors, contributors, laws or regulations of other governments, as well as restrictions imposed by law through constitutional provisions or enabling legislation.

Committed – Committed fund balances encompass the portion of net fund resources, the use of which is constrained by limitations that the government imposes upon itself at its highest level of decision making, normally the governing body, and that remain binding unless removed in the same manner. The City Council is considered the highest authority for the City. Adoption of a resolution by the City Council is required to commit resources or to rescind the commitment.

Assigned – Assigned fund balances encompass the portion of net fund resources reflecting the government’s intended use of resources. Assignment of resources can be done by the highest level of decision making or by a committee or official designated for that purpose. The City Council has authorized by resolution the City Manager or the City Fiscal Officer for that purpose.

Unassigned – This amount is for any portion of the fund balances that do not fall into one of the above categories. The General Fund is the only fund that reports a positive unassigned fund balance amount. In other governmental funds, it is not appropriate to report a positive unassigned fund balance amount. However, in governmental funds other than General Fund, if expenditures incurred for specific purposes exceed the amounts that are restricted, committed or assigned to those purposes, it may be necessary to report a negative unassigned fund balance in that fund.

Spending Policy
Government-Wide Financial Statements and the Proprietary Fund Financial Statements When expenses are incurred for purposes for which both restricted and unrestricted components of net position are available, the City’s policy is to apply the restricted component of net position first, then the unrestricted component of net position as needed.

City of Gardena
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
57 Note 1 – Summary of Significant Accounting Policies (Continued) T. Net Position and Fund Balances (Continued)
Spending Policy (Continued)
Governmental Fund Financial Statements
When expenditures are incurred for purposes for which all restricted, committed, assigned and unassigned fund balances are available, the City’s policy is to apply in the following order, except for instances wherein an ordinance specifies the fund balance:
 Restricted
 Committed
 Assigned
 Unassigned
U. Use of Estimates
The preparation of the basic financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

V. Implementation of New GASB Pronouncements
In May 2019, GASB issued Statement No. 91, Conduit Debt Obligations, to provide a single method of reporting conduit debt obligations by issuers and eliminate diversity in practice associated with (1) commitments extended by issuers, (2) arrangements associated with conduit debt obligations, and (3) related note disclosures. This Statement achieves those objectives by clarifying the existing definition of a conduit debt obligation; establishing that a conduit debt obligation is not a liability of the issuer; establishing standards for accounting and financial reporting of additional commitments and voluntary commitments extended by issuers and arrangements associated with conduit debt obligations; and improving required note disclosures. Implementation of this Statement did not have a significant effect to the City’s financial statements for the fiscal year ended June 30, 2023.

In March 2020, GASB issued Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements (GASB Statement No. 94), to improve financial reporting by addressing issues related to public-private and public-public partnership arrangements (PPPs). Implementation of this Statement did not have a significant effect to the City’s financial statements for the fiscal year ended June 30, 2023.

In May 2020, GASB issued Statement No. 96, Subscription-Based Information Technology Arrangements (GASB Statement No. 96), to better meet the information needs of financial statement users by (a) establishing uniform accounting and financial reporting requirements for SBITAs; (b) improving the comparability of financial statements among governments that have entered into SBITAs; and (c) enhancing the understandability, reliability, relevance, and consistency of information about SBITAs. Under this Statement, a government is required to recognize a subscription liability and an intangible right-to-use subscription asset. The effective date of GASB Statement No. 96 is for fiscal years beginning after June 15, 2022. Implementation of this Statement resulted in restatement of beginning balance of capital assets (Note 7) and long-term debt liabilities (Note 8) at July 1, 2022.

City of Gardena
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
58 Note 1 – Summary of Significant Accounting Policies (Continued) V. Implementation of New GASB Pronouncements (Continued) In March 2022, GASB issued Statement No. 99, Omnibus 2022, to enhance comparability in accounting and financial reporting and to improve the consistency of authoritative literature by addressing (1) practice issues that have been identified during implementation and application of certain GASB Statements and (2) accounting and financial reporting for financial guarantees. Implementation of this Statement did not have a significant effect to the City’s financial statements for the fiscal year ended June 30, 2023 Note 2 – Stewardship, Compliance and Accountability
A. Deficit Net Position
In the Government-Wide Financial Statements, the City had a deficit unrestricted net position at June 30, 2023 for its governmental activities of $(115,019,564) and business-type activities of $(32,642,965). The deficit was mainly due to the reporting of the aggregate net pension liabilities, the aggregate net OPEB liabilities and the pension obligation bonds issued to pay for the unfunded pension liabilities. The aggregate net pension liabilities reported were $16,120,826 and $3,233,030 for governmental activities and business-type activities, respectively.

The aggregate net OPEB liabilities were $64,768,264 and $8,020,898 for governmental activities and businesstype activities, respectively. The Pension Obligation Bonds were $73,832,926 and $20,787,074 for governmental activities and business-type activities, respectively.

The following funds had a deficit fund balance/net position at June 30, 2023:

Nonmajor Governmental Funds:

Public Safety Grants Special Revenue Fund (57,980) $
Internal Service Funds:

Workers' Compensation Fund (11,493,125)
In addition, the GTrans Enterprise had deficit unrestricted net position of $(24,503,020) at June 30, 2023.

The net position balance includes both short and long-term liabilities. The deficit balances are expected to be recovered through future interfund transfers and other revenues as applicable for this purpose.

B. Expenditures in Excess of Appropriations
The following funds had expenditures in excess of appropriations:

Excess of
Expenditures over
Fund Appropriations Expenditures Appropriations
Major Governmental Funds:

General Fund
General government:

Non-departmental $ 1,015,399 $ 1,488,894 $ 473,495
Public works 6,634,386 6,887,999 253,613
Community development 2,618,308 2,620,660 2,352
Capital outlay 888,000 2,454,195 1,566,195
Debt service:

Principal 592,688 - 592,688
Interest and fiscal charges - 32,659 32,659
City of Gardena
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
59 Note 2 – Stewardship, Compliance and Accountability (Continued) B. Expenditures in Excess of Appropriations (Continued) Excess of
Expenditures over
Fund Appropriations Expenditures Appropriations
2006 Refunding COPs, Series A Debt Service Fund
Interest and fiscal charges 401,340 402,117 777
2014 Taxable Lease Revenue Refunding Bonds Debt Service Fund Debt service:

Interest and fiscal charges 441,011 441,157 146
2020 Taxable Pension Obligation Bonds Debt Service Fund Debt service:

Principal retirement 2,859,250 2,859,799 549
Nonmajor Governmental Funds:

Gas Tax Special Revenue Fund
Public works 565,660 597,910 32,250
Debt service:

Principal retirement - 19,606 19,606
Public Safety Grants Special Revenue Fund
Public safety 276,126 303,884 27,758
Debt service:

Principal retirement - 4,463 4,463
Public Works Grants Special Revenue Fund
Recreation and human services 10,000 17,910 7,910
Human Services Grants Special Revenue Fund
Capital Outlay - 10,000 10,000
Debt service:

Principal retirement 4,346 10,147 5,801
Note 3 – Cash and Investments
The City maintains a cash and investment pool, which includes cash balances and authorized investments of all funds.

Certain restricted funds which are held and invested by independent outside custodians through contractual agreements are not pooled. These restricted funds include cash and investments with fiscal agents.

The City had the following cash and investments at June 30, 2023:

Governmental Business-Type
Activities Activities Total
Cash and investments $ 77,295,313 $ 25,240,370 $ 102,535,683 Cash and investments held by fiscal agents 13,807,281 13,807,281 - Total cash and investments $ 91,102,594 $ 25,240,370 $ 116,342,964 Government-Wide Financial Statement
City of Gardena
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
60 Note 3 – Cash and Investments (Continued)
The City’s cash and investments at June 30, 2023, in more detail:

Cash:

Petty cash 7,200 $
Demand deposits 18,270,532
Total cash and cash equivalents 18,277,732
Investments:

Money market mutual fund 48,133,970
U.S. Treasury 14,363,188
Negotiable certificates of deposit 2,632,368
Corporate notes 6,194,599
Local Agency Investment Fund 5,216,245
U.S. Government sponsored enterprise securities 5,969,728 Foreign negotiable certificates of deposit 1,747,853
Total investments 84,257,951
Total cash and investments 102,535,683
Cash and investments with fiscal agents 13,807,281
Total $ 116,342,964
A. Deposits
The carrying amounts of the City’s demand deposits were $18,270,532 at June 30, 2023. Bank balances at that date were $20,193,388, the total amount of which was collateralized or insured with accounts held by the pledging financial institutions in the City’s name as discussed below.

The California Government Code requires California banks and savings and loan associations to secure the City’s cash deposits by pledging securities as collateral. This Code states that collateral pledged in this manner shall have the effect of perfecting a security interest in such collateral superior to those of a general creditor. Thus, collateral for cash deposits is considered to be held in the City's name.

The market value of pledged securities must equal at least 110% of the City's cash deposits. California law also allows institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the City’s total cash deposits. The City may waive collateral requirements for cash deposits, deposits, which are fully insured up to $250,000 by the Federal Deposit Insurance Corporation (“FDIC”). The City did not waive the collateral requirement for deposits insured by FDIC.

The City follows the practice of pooling cash and investments of all funds, except for funds required to be held by fiscal agents under the provisions of bond indentures. Interest income earned on pooled cash and investments is allocated on an accounting period basis to the various funds based on the period-end cash and investment balances. Interest income from cash and investments with fiscal agents is credited directly to the related fund.

City of Gardena
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
61 Note 3 – Cash and Investments (Continued)
B. Investments
Under the provisions of the City’s investment policy, and in accordance with California Government Code, the following investments are authorized:

Maximum Maximum
Maximum Percentage Investment in
Authorized Investment Type Maturity of Portfolio * One Issuer Municipal securities 5 years 30% 5%
United States treasury obligations 5 years No Limit No Limit U.S. Government sponsored enterprise securities 5 years No Limit 25% Bankers' acceptances 180 days 40% 5%
Commercial paper 270 days 25% 5%
Negotiable certificates of deposit 5 years 30% 5%
Federally insured time deposits 5 years 20% Federally Insured Collateralized time deposits 5 years 20% Federally Insured Certificate of deposit placement service ("CDARS") 5 years 30% Federally Insured Local Agency Investment Fund ("LAIF") N/A No Limit No Limit Medium-term notes 5 years 30% 5%
Asset-Backed, Mortgage-Backed, Mortgage PassThrough Securities, and Collateralized Mortgage 5 years 20% 5% Mutual funds N/A 20% 10%
Money market mutual funds N/A 20% 20%
Supranationals 5 years 30% 10%
Investment Trust of California ("CalTrust") N/A No Limit No Limit N/A - Not Applicable
* Excluding amounts held by bond trustees that are not subject to California Government Code restrictions.

The City is a participant in LAIF which is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The City’s investments with LAIF at June 30, 2023, included a portion of the pool funds invested in Structured Notes and Asset-Backed Securities:

Structured Notes: debt securities (other than asset-backed securities) whose cash flow characteristics (coupon rate, redemption amount, or stated maturity) depend upon one or more indices and/or that have embedded forwards or options.

Asset-Backed Securities: generally, mortgage-backed securities that entitle their purchasers to receive a share of the cash flows from a pool of assets such as principal and interest repayments from a pool of mortgages (for example, Collateralized Mortgage Obligations) or credit card receivables.

As of June 30, 2023, the City had $5,216,245 invested in LAIF, which had invested 2.78% of the pool investment funds in Structured Notes and Asset-Backed Securities. The fair value of the City’s portion in the pool is the same as the value of the pool shares and reported at amortized cost.

City of Gardena
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
62 Note 3 – Cash and Investments (Continued)
C. Fair Value Measurement
At June 30, 2023, investments are reported at fair value. The following table presents the fair value measurements of investments on a recurring basis and the levels with GASB 72 fair value hierarchy in which the fair value measurements fall at June 30, 2023:

Quoted Prices
in Active Significant
Markets for Other Observable
Identical Assets Inputs
Investment Type (Level 1) (Level 2) Uncategorized(3) Total Money market mutual fund $ - $ 48,133,970 - $ $ 48,133,970 U.S. Treasury 14,363,188 - 14,363,188 -
Negotiable certificates of deposit (1) 2,632,368 - - 2,632,368 Corporate notes(1) 6,194,599 - - 6,194,599
Local Agency Investment Fund - - 5,216,245 5,216,245
U.S. Government sponsored enterprise securities (1) 5,969,728 - - 5,969,728 Foreign negotiable certificates of deposit (2) 1,747,853 - - 1,747,853 Cash and investments with fiscal agents:

Money market mutual fund - 13,807,281 - 13,807,281
Total $ 14,363,188 $ 16,544,548 $ 67,157,496 $ 98,065,232 (1) Pricing based on Institutional Bond Quotes - evaluations based on various market and industry inputs. (2) Pricing based on Intercontinental Exchange Extel Financial Ltd - evaluations based on various market factors. (3) Cash and cash equivalent.

Measurement Input
D. Risk Disclosures
Interest Rate Risk - As a means of limiting its exposure to fair value losses arising from rising interest rates, the City’s investment policy limits investments to a maximum maturity of five years. At June 30, 2023, the City had the following investment maturities:

Investment Type Fair Value Less Than 1 Year 1 to 2 Years 2 to 3 Years 3 to 4 Years 4 to 5 Years Money market mutual fund $ 48,133,970 $ 48,133,970 $ - $ - $ - $ - U.S. Treasury 14,363,188 4,541,608 2,737,475 3,405,764 1,881,690 1,796,651 Negotiable certificates of deposit 2,632,368 451,050 224,567 432,165 1,184,113 340,473 Corporate notes 6,194,599 1,771,818 1,726,336 1,047,712 640,955 1,007,778 Local Agency Investment Fund 5,216,245 5,216,245 - - - - U.S. Government sponsored enterprise securities 5,969,728 2,932,525 1,099,474 790,217 1,147,512 - Foreign negotiable certificates of deposit 1,747,853 873,609 874,244 - - - Cash and investments with fiscal agents:

Money market mutual fund 13,807,281 13,807,281 - - - -
Total $ 98,065,232 $ 77,728,106 $ 6,662,096 $ 5,675,858 $ 3,706,758 $ 4,292,414 Investment Maturities (in Years)
Custodial Credit Risk - For deposits, custodial credit risk is the risk that, in the event of the failure of a depository financial institution, the City 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. For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer), the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party.

City of Gardena
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
63 Note 3 – Cash and Investments (Continued)
D. Risk Disclosures (Continued)
Credit Risk - State law limits investments in commercial paper and corporate bonds to the top two ratings issued by nationally recognized statistical rating organizations (NRSROs). It is the City’s policy to limit its investments in these investment types to the top rating issued by Standard & Poor’s and Moody’s Investors Service. At June 30, 2023, the City’s credit risks, expressed on a percentage basis, were as follows:

Moody's S&P's % of Investments
Credit Credit with Interest
Investment Type Rating Rating Rate Risk
Local Agency Investment Fund Not Rated Not Rated 6.19%
U.S. Treasury AAA Not Rated 17.05%
U.S. Government sponsored enterprise securities AAA AA+ 7.09% Negotiable certificates of deposit Not Rated Not Rated 3.12% Foreign negotiable certificates of deposit A2 Aa 2.07%
Corporate notes A A 7.35%
Money market mutual fund P-1 Aa 57.13%
Total 100.00%
Credit Quality Distribution for Securities
with Credit Exposure as a Percentage of Total Investments Concentration of Credit Risk - The City’s investment policy states that no more than 5% of the City’s total investment portfolio shall be invested in a single type or with a single financial institution. The only exception to these limits shall be the investment in U.S. Treasury and authorized pools. There are no investments in any one issuer than the external investment pools that represent 5% or more of total City investments.

Note 4 – Other Receivables
A. YMCA Receivables
In February 1994, the City entered into a long-term lease contract to lease land to the YMCA for construction of a new YMCA facility that would benefit the community. The facility opened on February 6, 1995 with a 30-year lease term, ending in 2024. Under the terms of the agreement, the maximum amount that the City could receive was $1,400,000. This amount is payable in monthly payments, with annual rent adjustments over a 30-year lease term. In January 2023, the monthly payment was increased from $71 to $367 per month. At the adjustment date, annual rent was equal to total rent of $1,400,000 less all previous payments, multiplied by the six-month average LAIF interest rate. The lease includes two 25-year options to renew and an option to purchase the land at the end of the lease for the amount of $1,400,000 reduced by the amount already paid as of the time of purchase. As of June 30, 2023, future lease payments from the YMCA, including interest, were $369,299. Since the City has not earned the revenue for the future lease payments, there was no revenue recognized or receivables reported at June 30, 2023 for these future lease payments.

B. State Mandated Claims Reimbursement
The City recorded an outstanding receivable of $731,858 for the State Mandated Claims Reimbursement (SB90 Claims) from the State of California (the “State”). The payments of the mandated claims reimbursement are subject to State approval and management cannot estimate the timing and amount of the payments that will be made and reported an allowance for doubtful accounts in the amount of $731,858. As a result, both the General Fund in the governmental fund financial statements and governmental activities in the government-wide financial statements reported zero balances for accounts receivable associated with the State Mandated Claims Reimbursement as of June 30, 2023.

City of Gardena
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
64 Note 5 – Loans Receivable
Loans receivable consists of Home-Owner Occupied Deferred Loans and Spring Park Senior Villa Developer Loan as following:

Balance Balance
July 1, 2022 Additions Deletions Allowance June 30, 2023 Home-Owner Occupied Deferred Loans
CalHOME $ 372,094 $ - $ - $ 372,094 - $
State HOME Loans 1,594,850 (12,875) - 1,581,975 -
Subtotal 1,966,944 (12,875) - 1,954,069 -
Spring Park Senior Villa Developer Loan 3,632,103 86,224 (3,718,327) - - Total $ 5,599,047 $ 86,224 $ (12,875) $ (3,718,327) $ 1,954,069 A. Home-Owner Occupied Deferred Loans
The City issues deferred payment loans to home owners funded by the Federal Home Investment Partnerships Program (“HOME Program”) and CalHOME to improve the living conditions of the lower income families.

These loans are to be repaid to the City, and the repayments of the loans are used to fund future home-owner occupied deferred loans. As of June 30, 2023, the outstanding loan balance is $1,954,069.

B. Spring Park Senior Villa Developer Loan
The City entered into a development agreement on August 1, 2013, with Spring Park Senior Villa, Inc., a nonprofit organization for the development of the Spring Park Senior Villa in the City. The agreement provided funding for the development of 36 rental units and one manager unit (“the Project”) up to $2,874,115 for construction. The loan bears 3% simple interest over a term of 55 years. The repayment of the loan is based on the residual receipts of the rental units. The affordability covenant also expires in 55 years after completion of the project. As of June 30, 2023, the City funded $2,874,115 for the development of the project and accrued interest in the amount of $844,212 which was required by the State of California. This results the City in reporting loans receivable in the amount of $3,718,327. However, management estimated that the loans will not be repaid due to negative residual receipts and reported an allowance for doubtful accounts in the amount of $3,718,327.

As a result, both the Economic Development Grants Special Revenue Fund in the governmental fund financial statements and governmental activities in the government-wide financial statements reported zero balances for loans receivable associated with the Spring Park Senior Villa as of June 30, 2023.

Note 6 – Interfund Transactions
A. Government-Wide Financial Statements
Internal Balances - At June 30, 2023, the City had the following internal receivable and payable, which represents internal service charges between the governmental activities and business-type activities:

Internal Payable
Business-Type
Internal Receivable Activities
Governmental Activities 17,763,827 $
City of Gardena
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
65 Note 6 – Interfund Transactions (Continued)
A. Government-Wide Financial Statements (Continued)
Transfers – For the year ended June 30, 2023, the City had the following transfers:

Transfers Out
Business-Type
Transfers In Activities
Governmental Activities $ 515,854
The purposes of the transfers were for subsidizing the governmental activities for public works engineering job costs and administrative costs.

B. Fund Financial Statements
Due From/To Other Funds - At June 30, 2023, the City had the following due from/to other funds:

Due From Other Funds
Due To Other Funds General Fund
Governmental Funds:

Economic Development Grants
Special Revenue Fund 261,773 $
City Debt Service Fund 349,271
Nonmajor Governmental Funds 2,320,365
Proprietary Fund:

GTrans Enterprise Fund 7,093,382
Total $ 10,024,791
The above amounts resulted from temporary reclassifications made at June 30, 2023 to cover cash shortfalls.

Transfers In/Out – During the year ended June 30, 2023, the City had the following transfers in/out, which arise in the normal course of operations:

Economic Nonmajor
Development Sewer
General Grants Special City Capital City Nonmajor Enterprise Internal Transfers Out Fund Revenue Projects Fund Debt Service Governmental Fund Service Funds Total Governmental Funds:

General Fund $ 1,729 - $ $ 854,898 $ 8,018,634 $ 319,527 $ 1,850,000 - $ $ 11,044,788 Economic Development Grants
Special Revenue Fund - 310,525 - - - 310,525 -
Debt Service Fund - 57,771 - - - 57,771 -
Nonmajor Governmental
Funds 2,642,735 4,694,021 - 118,808 49,281 7,504,845 -
Enterprise Funds:

GTrans - - - 1,967 - - 1,967 -
Sewer 134,634 428,534 - - - - 563,168 -
Internal Service Funds 500,000 - 5,516 - - 1,136,852 - 1,642,368 Total $ 3,277,369 $ 1,729 $ 6,345,749 $ 8,142,958 $ 321,494 $ 49,281 $ 2,986,852 $ 21,125,432 Transfers In
Governmental Funds Enterprise Funds
City of Gardena
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
66 Note 6 – Interfund Transactions (Continued)
B. Fund Financial Statements (Continued)
Transfers In/Out (Continued)
General Fund transferred $1,729 to Economic Development Fund to cover the unclaimed expenditures, $854,898 to the City Capital Projects Fund to fund the deferred maintenance projects, $8,018,634 to Debt Service Fund for debt service payments and bank admin fees, $319,527 to Nonmajor Governmental Funds to cover deficit grants funds and FEMA 10% matching requirement, and $1,850,000 to Internal Service Funds to pay as you go general liability and workers’ compensation liability.

Economic Development Grants Special Revenue funds transferred $310,525 to Nonmajor Governmental Funds to fund capital projects.

Transfers of $57,771 from Debt Service Fund to the City Capital Projects Fund was to fund for community projects.

Nonmajor Governmental Funds transfers to the General Fund consists of $969,295 for fiscal year 2023 ARPA claims and qualified expenditures, $829,080 for job costs relating capital projects, $75,500 for police department expenditures, $222,466 for street sweeping program, $521,932 for tree maintenance and street maintenance program, and $24,462 for grant reimbursements and administration. Transfers from Nonmajor Governmental Funds of $4,694,021 to the City Capital Projects Fund are for grant funded projects, $118,808 to Debt Service Funds are for debt service payments in lieu of PERS UAL, and $49,281 to reimburse Nonmajor Sewer Enterprise Fund for street sweeping supplies and maintenance.

GTrans Enterprise Funds transferred $1,967 to Nonmajor Governmental Fund to cover FEMA 10% matching requirement.

Sewer Enterprise Funds transfers consists of transfer of $134,634 to the General Fund for job costs related to capital projects and $428,534 to City Capital Projects Fund to fund the sewer funded capital projects.

Internal Service Funds transfers consists of transfer of $500,000 to City OPEB fund to reduce OPEB liability, $5,516 to Debt Service Fund for debt service payments in lieu of PERS UAL, and $1,136,852 to Internal Service Funds to pay as you go workers’ compensation liability for $400,000 and pay as you general liability for $736,852.

City of Gardena
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
67 Note 7 – Capital Assets
A. Governmental Activities
A summary of changes in the capital assets for the governmental activities for the year ended June 30, 2023 is as follows:

Balance
July 1, 2022 Balance
(As Restated) Additions Deletions Transfers June 30, 2023 Capital assets, not being depreciated:

Land $ 11,544,572 $ 275,777 $ - $ 11,820,349 - $
Monuments 63,893 - - 63,893 -
Construction in progress 2,247,985 4,582,051 (119,272) - 6,710,764 Total capital assets, not being depreciated 13,856,450 4,857,828 (119,272) - 18,595,006 Capital assets, being depreciated:

Buildings/structures and improvements 26,264,560 351,949 - 26,616,509 - Machinery and equipment 12,848,293 598,834 (190,898) 13,256,229 - Infrastructure:

Street lights network 5,491,961 - - 5,491,961 -
Traffic lights network 12,940,788 - - 12,940,788 -
Roadway network 57,773,073 888,183 119,272 - 58,780,528 Total capital assets, being depreciated 115,318,675 1,838,966 (190,898) 117,086,015 119,272 Less accumulated depreciation for:

Buildings/structures and improvements (19,179,441) (648,223) - (19,827,664) - Machinery and equipment (9,884,473) (1,024,951) 187,321 (10,722,103) - Infrastructure: -
Street light network (1,033,916) (43,080) - (1,076,996) - Traffic lights network (12,676,832) (12,570) - (12,689,402) - Roadway network (32,234,727) (1,225,092) - (33,459,819) - Total accumulated depreciation (75,009,389) (2,953,916) 187,321 (77,775,984) - Total capital assets, being depreciated, net 40,309,286 (1,114,950) (3,577) 119,272 39,310,031 Intangible assets, being amortized
Right-to-use lease assets 531,835 357,226 (159,550) 729,511 - Right-to-use subscription assets 755,138 701,225 - 1,456,363 - Total intangible assets, being amortized 1,286,973 1,058,451 (159,550) 2,185,874 - Less accumulated amortization for:

Right-to-use lease assets (208,667) (223,359) 159,550 (272,476) - Right-to-use subscription assets (337,642) - - (337,642) - Total accumulated amortization (208,667) (561,001) 159,550 (610,118) - Total intangible assets, being amortized, net 1,078,306 497,450 - 1,575,756 - Governmental activities capital assets, net $ 55,244,042 $ 4,240,328 $ (3,577) $ 59,480,793 - $ Governmental Activities
Depreciation and amortization expenses were charged to functions/programs of the governmental activities for the fiscal year ended June 30, 2023 as follows:

Depreciation Amortization
General government 823,977 $ 224,590 $
Public safety 626,742 198,226
Public works 1,426,704 48,467
Community development - 37,170
Recreation and human services 76,493 52,548
Total depreciation expense $ 2,953,916 $ 561,001
City of Gardena
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
68 Note 7 – Capital Assets (Continued)
B. Business-Type Activities
A summary of changes in the capital assets for the business-type activities for the year ended June 30, 2023 is as follows:

Balance
July 1, 2022 Balance
(As Restated) Additions Deletions Transfers June 30, 2023 Capital assets, not being depreciated:

Land $ 12,956,405 $ - $ - $ 12,956,405 - $
Construction in progress 4,870,249 3,182,735 (248,550) - 7,804,434 Total capital assets, not being depreciated 17,826,654 3,182,735 (248,550) - 20,760,839 Capital assets, being depreciated:

Buildings/structures and improvements 39,893,428 - - 39,893,428 - Buses 44,887,487 (1,536,982) - 43,375,270 24,765
Machinery and equipment 12,153,152 443,176 (30,508) 196,935 12,762,755 Furniture and fixtures 1,625,521 (12,482) - 26,850 1,639,889 Infrastructure 11,184,496 - - 11,184,496 -
Total capital assets, being depreciated 109,744,084 443,176 (1,579,972) 108,855,838 248,550 Less accumulated depreciation for:

Buildings/structures and improvements (13,809,262) (1,022,908) - (14,832,170) - Buses (32,391,832) (1,250,894) 1,536,982 (32,105,744) - Machinery and equipment (9,497,604) (1,029,746) 30,508 (10,496,842) - Furniture and fixtures (1,530,935) (57,306) 12,482 (1,575,759) - Infrastructure (10,628,626) (33,689) - (10,662,315) -
Total accumulated depreciation (67,858,259) (3,394,543) 1,579,972 (69,672,830) - Total capital assets, being depreciated, net 41,885,825 (2,951,367) 248,550 - 39,183,008 Intangible assets, being amortized
Right-to-use lease assets 304,112 26,484 (304,112) 26,484 - Right-to-use subscription assets 205,064 202,935 - 407,999 - Total intangible assets, being amortized 509,176 229,419 (304,112) 434,483 - Less accumulated amortization for:

Right-to-use lease assets (152,056) (165,298) 304,112 (13,242) - Right-to-use subscription assets (105,297) - - (105,297) - Total accumulated amortization (152,056) (270,595) 304,112 (118,539) - Total intangible assets, being amortized, net 357,120 (41,176) - 315,944 - Business-type activities capital assets, net $ 60,069,599 $ 190,192 $ - $ 60,259,791 - $ Business-Type Activities
Depreciation and amortization expenses for business-type activities for the year ended June 30, 2023 was charged as follows:

Depreciation Amortization
Gtrans major enterprise fund $ 3,253,834 $ 250,352
Sewer nonmajor enterprise fund 140,709 20,243
Total depreciation expense $ 3,394,543 $ 270,595
City of Gardena
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
69 Note 8 – Long-Term Liabilities
A. Governmental Activities
A summary of changes in long-term liabilities for governmental activities for the year ended June 30, 2023 is as follows:

Balance
July 1, 2022 Balance Due within Due in more
(As Restated) Additions Deletions June 30, 2023 One Year One Year 2006 Refunding Certificates of
Participation Series A - publicly offered 6,565,000 $ - $ (625,000) $ 5,940,000 $ 665,000 $ 5,275,000 $ 2007 Refunding Revenue
Bonds, Series A - publicly offered 1,315,000 - (120,000) 1,195,000 125,000 1,070,000 2014 Taxable Lease Revenue
Refunding Bonds - publicly offered 8,815,000 - (65,000) 8,750,000 70,000 8,680,000 Bond discount - 2014 Taxable
Lease Revenue Refunding Bonds (192,173) - 13,884 (178,289) (13,884) (164,405) 2017 Direct Purchase Lease
- Private placement 565,000 (280,000) - 285,000 285,000 - 2016 SCE On-Bill Financing Loan
- Direct borrowing 43,361 (14,296) - 29,065 14,296 14,769 2020 Taxable Pension Obligation
Bonds - publicly offered 76,692,725 (2,859,799) - 73,832,926 3,285,063 70,547,863 2021 Lease Revenue Bonds
- Publicly offered 12,880,000 (440,000) - 12,440,000 465,000 11,975,000 Bond premium - 2021 Lease
Revenue Bonds 2,008,657 (106,654) - 1,902,003 106,654 1,795,349 Loan payable 3,632,103 86,224 3,718,327 - 3,718,327 -
Lease payable 337,409 346,917 (224,691) 459,635 157,234 302,401 Subscription liabilites 755,138 701,226 (424,203) 1,032,161 414,695 617,466 Claims payable 16,803,625 8,658,461 (7,121,728) 18,340,358 4,811,358 13,529,000 Compensated absences 8,758,831 4,378,870 (3,912,725) 9,224,976 1,853,798 7,371,178 Total $ 138,979,676 $ 14,171,698 $ (16,180,212) $ 136,971,162 $ 12,239,214 $ 124,731,948 Typically, the General Fund has been used to liquidate the liability for compensated absences, claims payable, and net other postemployment benefits.
2006 Certificates of Participation, Series A – Original Issuance $12,495,000 In June 2006, the Agency issued the 2006 Refinancing Project, Series A Taxable Certificates of Participation in the amount of $12,495,000. The purpose of the issue was to refinance the City’s 1999 Certificates of Participation in connection with a Memorandum of Understanding (“MOU”) entered into with certain financial institutions.

Pursuant to the MOU, the Agency paid the financial institutions $19 million (the “Initial Amount”) as prepayment of the 1999 Certificates, of which $18 million were funded by the 2006 Series A and B Certificates and the balance of $1 million from other available City funds. Upon payment of the Initial Amount, the 1999 Leases as well as the pledges and security interests granted in connection with the 1999 Leases will be terminated and the City’s obligations under the Reimbursement Agreement for the 1999 Certificates will be terminated. The Initial Payment represents approximately 75% of the principal owed.

Interest rates for the 2006A Certificates range from 5.98% to 6.38% with principal maturing through July 1, 2030.

Mandatory prepayment of the 2006 Series A Certificates occurred in July 2008 and will occur again in July 2030.

The certificates of participation debt service payments will be made from the debt service funds.

City of Gardena
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
70 Note 8 – Long-Term Liabilities (Continued)
A. Governmental Activities (Continued)
2006 Certificates of Participation, Series A – Original Issuance $12,495,000 (Continued) The amount outstanding at June 30, 2023 totaled $5,940,000. The annual debt service requirements on these certificates are as follows:

Fiscal Year Principal Interest Total
2024 $ 665,000 $ 357,759 $ 1,022,759
2025 705,000 314,056 1,019,056
2026 750,000 267,641 1,017,641
2027 800,000 218,196 1,018,196
2028 850,000 165,561 1,015,561
2029-2031 2,170,000 169,070 2,339,070
Total $ 5,940,000 $ 1,492,283 $ 7,432,283
2007 Refunding Revenue Bonds, Series A – Original Issuance $2,800,000 In January 2007, the City issued the South Bay Regional Public Communications Authority Refunding Revenue Bonds, 2007 Series A in the amount of $2,800,000. The purpose of the bonds was to advance refund the South Bay Regional Public Communications Authority Revenue Bonds, 2001 Series A, to provide a reserve fund for the Bonds, and to pay certain costs of issuance of the Bonds. The 2001 Series A Bonds were fully redeemed as of January 1, 2012.

The bonds accrue interest at rates between 5% and 5.125%. Interest on the bonds is payable semiannually on each January 1 and July 1, commencing July 1, 2007. Principal payments are due in annual installments ranging from $70,000 to $175,000, commencing July 1, 2007 through January 1, 2031. The bonds are subject to optional and mandatory redemption prior to maturity. The refunding revenue bonds debt service payments will be made from the debt service funds.

The amount outstanding at June 30, 2023 totaled $1,915,000. The annual debt service requirements on these bonds are as follows:

Fiscal Year Principal Interest Total
2024 $ 125,000 $ 60,575 $ 185,575
2025 130,000 54,325 184,325
2026 135,000 47,825 182,825
2027 145,000 41,075 186,075
2028 155,000 33,825 188,825
2029-2031 505,000 52,232 557,232
Total $ 1,195,000 $ 289,857 $ 1,484,857
City of Gardena
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
71 Note 8 – Long-Term Liabilities (Continued)
A. Governmental Activities (Continued)
2014 Taxable Lease Revenue Refunding Bonds – Original Issuance $9,110,000 In December 2014, the City issued the Taxable Lease Revenue Refunding Bonds, Series 2014 in the amount of $9,110,000 to current refund 2006 Certificate of Participation, Series B. The current refunding resulted in an economic gain in the amount of $1,637,398 and saving in debt service payments in the amount of $2,360,051.

The current refunding resulted in no deferred gains or losses as the bond proceeds net of the issuance discount was sufficient to cover repayment of 2006 Certificates of Participation, Series B, the interests due, and the issuance cost on the 2014 Taxable Lease Revenue Refunding Bonds.

The bonds bear interest at rates between 3.95% and 5%. Interest on the bonds is payable annually on each May 1 and November 1. Principal payments are due in annual installments ranging from $55,000 to $1,430,000, commencing May 1, 2018 through May 1, 2036. The bonds are subject to optional and mandatory redemption prior to maturity. The refunding revenue bonds debt service payments will be made from the debt service funds.

The amount outstanding at June 30, 2023 totaled $8,750,000. The annual debt service requirements on these bonds as follows:

Fiscal Year Principal Interest Total
2024 $ 70,000 $ 435,799 $ 505,799
2025 70,000 433,034 503,034
2026 75,000 429,709 504,709
2027 75,000 426,148 501,148
2028 80,000 422,586 502,586
2029-2033 4,605,000 1,776,289 6,381,289
2034-2036 3,775,000 359,250 4,134,250
Total $ 8,750,000 $ 4,282,814 $ 13,032,814
2017 Direct Purchase Lease
In June 2017, the City issued the Direct Purchase Lease in the amount of $1,635,000 to currently refund 2006 Certificate of Participation, Series C. The economic gain on the current refunding was $112,585 and the saving in debt service payments is $89,363.

The bonds bear interest at 2.07%. Interest on the bonds is payable annually on each July 1. Principal payments are due in annual installments ranging from $245,000 to $285,000, commencing July 1, 2018 through July 1, 2023. The refunding revenue bonds debt service payments will be made from the debt service funds.

In the event of default, the lender may exercise any one or more of the following remedies (a) enforcement of payments without termination, (b) termination of lease, (c) proceeding at law or in equity, or (d) remedies under the lease and facilities lease.

The amount outstanding at June 30, 2023 totaled $285,000. The annual debt service requirements on these bonds as follows:

Fiscal Year Principal Interest Total
2024 $ 285,000 $ 2,950 $ 287,950
City of Gardena
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
72 Note 8 – Long-Term Liabilities (Continued)
A. Governmental Activities (Continued)
2016 SCE On-Bill Financing Loan
On April 4, 2016, the City entered into a loan agreement with Southern California Edison (“SCE”) for the Energy Management Solutions Incentives Application. The agreement provides zero- percent interest financing for the installation of certain energy efficient equipment for up to $126,580, of which is to be repaid over ten years through the Customer’s electric utility bills.

SCE may determine the loan to be breached and the City to be in default if the City (1) sells, assigns or otherwise transfers ownership, possession or title of the site or the equipment, (2) fails to pay the money payment when due, (3) closes, discontinues or otherwise causes the termination of the service account(s), or (4) otherwise breaches this agreement, and the breach is not cured as specified therein. Following a breach, SCE shall have the right to declare the entire unpaid balance of the loan obligation due and payable.

The amount outstanding at June 30, 2023 totaled $29,065. The annual debt service requirements on this loan as follows:

Fiscal Year Principal Interest Total
2024 $ 14,296 $ - $ 14,296
2025 7,769 - 7,769
2026 7,000 - 7,000
Total $ 29,065 $ - $ 29,065
2020 Taxable Pension Obligation Bonds – Original Issuance $101,490,000 ($79,193,585 for Governmental Activities)
In November 2020, the City issued the Taxable Pension Obligation Bonds, Series 2020 in the amount of $101,490,000. The purpose of the bonds was to finance a portion of the City’s unfunded accrued actuarial liability to the California Public Employees’ Retirement System (CalPERS) for the benefit of the City’s employees and to pay the costs of issuance of the bonds. Of the original $101,490,000 of bond principal issued, $79,193,585 was allocated to governmental activities and $22,296,415 was allocated to business-type activities.

The bonds accrue interest at rates between 1.081% and 3.363%. Interest on the bonds is payable semiannually on each April 1 and October 1, commencing April 1, 2021. Principal payments are due in annual installments ranging from $2,995,000 to $7,525,000, commencing April 1, 2021 through April 1, 2039. The bonds are not subject to optional and mandatory redemption prior to maturity. The bond debt service payments will be made from the debt service funds.

City of Gardena
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
73 Note 8 – Long-Term Liabilities (Continued)
A. Governmental Activities (Continued)
2020 Taxable Pension Obligation Bonds – Original Issuance $101,490,000 ($79,193,585 for Governmental Activities) (Continued)
The amount outstanding for the governmental activities at June 30, 2023 totaled $73,832,926. The annual debt service requirements for the governmental activities on these bonds are as follows:

Fiscal Year Principal Interest Total
2024 $ 3,285,063 $ 2,256,000 $ 5,541,063
2025 3,745,440 2,206,659 5,952,099
2026 3,960,023 2,142,911 6,102,934
2027 4,038,053 2,061,097 6,099,150
2028 4,131,689 1,965,558 6,097,247
2029-2033 22,476,540 8,025,107 30,501,647
2034-2038 26,323,422 4,167,588 30,491,010
2039 5,872,696 226,300 6,098,996
Total $ 73,832,926 $ 23,051,220 $ 96,884,146
2021 Lease Revenue Bonds – Original Issuance $13,155,000 In September 2021, the City of Gardena Financing Agency issued the Lease Revenue Bonds, Series 2021 in the amount of $13,155,000. The purpose of the bonds was to fund various capital projects including the Gardena Community Aquatic & Senior Center, the Community Center, and various Park Improvement projects.

The bonds bear interest at rates between 3% and 5%. Interest on the bonds is payable annually on each May 1.

Principal payments are due in annual installments ranging from $275,000 to $915,000, commencing May 1, 2022 through May 1, 2041. The bonds are subject to optional and mandatory redemption prior to maturity. The revenue bonds debt service payments will be made from the debt service funds. The unspent project fund is in the amount of $11,752,150 at June 30, 2023.

The amount outstanding at June 30, 2023 totaled $12,440,000. The annual debt service requirements on these bonds as follows:

Fiscal Year Principal Interest Total
2024 $ 465,000 $ 476,000 $ 941,000
2025 490,000 452,750 942,750
2026 510,000 428,250 938,250
2027 540,000 402,750 942,750
2028 565,000 375,750 940,750
2029-2033 3,270,000 1,432,600 4,702,600
2034-2038 3,940,000 760,650 4,700,650
2039-2041 2,660,000 161,250 2,821,250
Total $ 12,440,000 $ 4,490,000 $ 16,930,000
City of Gardena
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
74 Note 8 – Long-Term Liabilities (Continued)
A. Governmental Activities (Continued)
Loans Payable
On August 1, 2013, the City entered into a loan agreement with the State of California Department of Housing and Community Development (“California HCD”) for the funding of the Spring Park Senior Villa. The agreement provides funding for the development of the project for up to $2,974,115, of which, $2,874,115 is to be used for construction costs in the form of a construction loan and $100,000 to be used for activity delivery and administration costs in the form of grants. If the HOME-assisted rental housing does not meet the minimum affordability period of 55 years per the City’s agreement with the California HCD, the repayment of all HOME funds to the State is required of the City. As of June 30, 2023, the City funded $2,874,115 for the development of the project and accrued interest in the amount of $884,212. This results in the loans payable in the amount of $3,718,327 to the California HCD. Please refer to Note 5B for additional information.

Lease Payable
The City has entered leases for the building, vehicle, and machine uses. The terms of the agreements range from 18 months to 60 months. The calculated interest rates used were between 0.185% to 3.305% based on the term of the agreements.

Principal and interest payments to maturity at June 30, 2023 are as follows:

Fiscal Year Principal Interest Total
2024 $ 157,234 $ 9,164 $ 166,398
2025 97,214 7,105 104,319
2026 70,105 5,307 75,412
2027 52,690 3,596 56,286
2028 46,624 1,876 48,500
2029 - 2032 35,768 2,655 38,423
Total $ 459,635 $ 29,703 $ 489,338
Subscription Liabilities
The City has entered into subscriptions for information technology arrangements. The terms of the arrangements range from 24 to 60 months with implicit rates used between 0.552% to of 3.305%. Principal and interest to maturity are as follows:

Fiscal Year Principal Interest Total
2024 $ 414,695 $ 24,246 $ 438,941
2025 417,459 14,150 431,609
2026 135,589 4,183 139,772
2027 64,418 1,283 65,701
Total $ 1,032,161 $ 43,862 $ 1,076,023
Legal Debt Margin
The City is subject to legal debt margin and the City’s legal debt limit was in the amount of $302,781,508 at June 30, 2023.

City of Gardena
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
75 Note 8 – Long-Term Liabilities (Continued)
A. Governmental Activities (Continued)
Compensated Absences
The long-term portion of compensated absences payable has been accrued for the Governmental Activities on the Government-Wide Financial Statements. In prior years, the General Fund has typically been used to liquidate the liability. The balance outstanding at June 30, 2023 was $9,224,976.

B. Business-Type Activities
The following is a summary of changes in long-term liabilities for business-type activities for the year ended June 30, 2023:

Balance
July 1, 2022 Balance Due within Due in more
(As Restated) Additions Deletions June 30, 2023 One Year One Year 2020 Taxable Pension Obligation
Bonds - publicly offered 21,592,275 $ $ (805,201) - $ $ 20,787,074 $ 924,937 $ 19,862,137 Lease payable 158,923 26,483 (172,053) 13,353 13,353 -
Subscription liabilities 205,064 202,935 (128,432) 279,567 125,277 154,290 Compensated absences 1,957,424 1,091,857 (1,127,877) 1,921,404 384,281 1,537,123 Total $ 23,913,686 $ 1,321,275 $ (2,233,563) $ 23,001,398 $ 1,447,848 $ 21,553,550 2020 Taxable Pension Obligation Bonds – Original Issuance $101,490,000 ($22,296,415 for Business-Type Activities)
In November 2020, the City issued the Taxable Pension Obligation Bonds, Series 2020 in the amount of $101,490,000. The purpose of the bonds was to finance a portion of the City’s unfunded accrued actuarial liability to the California Public Employees’ Retirement System (CalPERS) for the benefit of the City’s employees and to pay the costs of issuance of the bonds. Of the original $101,490,000 of bond principal issued, $79,193,585 was allocated to governmental activities and $22,296,415 was allocated to business-type activities.

The amount outstanding for the business-type activities at June 30, 2023 totaled $20,787,074. The annual debt service requirements for the business-type activities on these bonds are as follows:

Fiscal Year Principal Interest Total
2024 $ 924,937 $ 635,196 $ 1,560,133
2025 1,054,560 621,303 1,675,863
2026 1,114,978 603,355 1,718,333
2027 1,136,948 580,319 1,717,267
2028 1,163,312 553,420 1,716,732
2029-2033 6,328,459 2,259,536 8,587,995
2034-2038 7,411,575 1,173,418 8,584,993
2039 1,652,305 63,716 1,716,021
Total $ 20,787,074 $ 6,490,263 $ 27,277,337
City of Gardena
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
76 Note 8 – Long-Term Liabilities (Continued)
B. Business-Type Activities (Continued)
Lease Payable
The City’s business-type activities have entered leases for the machine uses. The terms of the agreements range from 18 months to 60 months. The calculated interest rates used were between 0.185% to 3.305% based on the term of the agreements.

Principal and interest payments to maturity at June 30, 2023 are as follows:

Fiscal Year Principal Interest Total
2024 $ 13,353 $ 147 $ 13,500
Subscription Liabilities
The City’s business-type activities has entered into subscriptions for information technology arrangements. The terms of the arrangements range from 24 to 60 months with implicit rates used between 0.552% to of 3.305%.

Principal and interest to maturity are as follows:

Fiscal Year Principal Interest Total
2024 $ 125,277 $ 7,145 $ 132,422
2025 126,910 4,028 130,938
2026 16,097 850 16,947
2027 11,283 373 11,656
Total $ 279,567 $ 12,396 $ 291,963
Compensated Absences
All vested vacation and compensatory leave time is recognized as an expense and as a liability in the businesstype funds at the time the liability vests. GTrans and the Sewer Enterprise funds have been used to liquidate the liability. The balance outstanding at June 30, 2023 was $1,921,404.

City of Gardena
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
77 Note 9 – Self-Insurance Programs
A. Self-Insurance Programs of the City
The City is self-insured for the first $750,000 of each workers’ compensation claim for both the GTrans and the City, $750,000 each general liability claim and $250,000 of each GTrans claim against the City. In addition, the City carries insurance of individual general liability claims in excess of $750,000 to $25,000,000 with Public Risk Innovation Solutions Management (“PRISM”). Additionally, the City has health insurance coverage for the employees and their families with an annual maximum amount of $1 million for all services.

The City carries stop-loss insurance of individual health benefit claims in excess of $75,000 for Medicare retirees and $50,000 for all other members. At June 30, 2023, $18,340,358 has been accrued for the City’s self-insurance programs, of which $4,811,358 is considered to be current. Said accruals represent estimates of amounts to be paid for reported claims and incurred but unreported claims based upon past experience, modified for current trends and information. While the ultimate amounts of losses incurred through June 30, 2023 are dependent on future developments, based upon information provided from the City Attorney, outside counsel and others involved with the administration of the programs, City management believes that the aggregate accrual is adequate to cover such losses. For the prior three (3) fiscal years, no settlements exceeded the City’s insurance coverage.

Changes in the balances of claims liabilities during the past three years are as follows:

Expenses and
Beginning Changes in Claims Ending Due within Due in more Balance Estimates Payments Balance One Year than One Year 2020-2021 9,412,603 $ $ 1,243,589 $ (51,718) $ 10,604,474 $ 8,389,641 $ 2,214,833 2021-2022 10,604,474 6,221,285 (22,134) 16,803,625 12,477,264 4,326,361 2022-2023 16,803,625 8,658,461 (7,121,728) 18,340,358 4,811,358 13,529,000 Claims Payable
B. Purchased Insurance
Property Insurance - Several insurance companies underwrite this insurance protection. The City is currently insured according to a schedule of covered property submitted by the City to Alliant Property Insurance Company. Total all-risk property insurance coverage is $100 million. There is a $25,000 per loss deductible.

Crime Insurance - The City purchases crime insurance coverage with a limit of $1 million per occurrence. This policy provides coverage for all City employees. There is a $2,500 per loss deductible.

C. Adequacy of Protection
During the past three fiscal years none of the above programs of protection have had settlements or judgments that exceeded pooled or insured coverage. There have been no significant reductions in insured liability coverage from coverage in the prior year.

City of Gardena
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
78 Note 10 – Retirement Plans
A. California Public Employees’ Retirement System (“CalPERS”) The following is the summary of net pension liability and related deferred outflows of resources and deferred inflows of resources at June 30, 2023 and pension expense for the year then ended.

Governmental Business-Type
Activities Activities Total
Deferred outflows of resources:

Pension contribution made after measurement date:

Miscellaneous 1,003,640 $ 931,360 $ 1,935,000 $
Safety 3,126,759 - 3,126,759
Total pension contribution made after measurement date 4,130,399 931,360 5,061,759 Change in assumptions:

Miscellaneous 1,907,975 1,770,566 3,678,541
Safety 1,274,182 - 1,274,182
Total change in assumptions 3,182,157 1,770,566 4,952,723 Difference in projected and actual earnings on pension investments:

Miscellaneous 5,122,398 4,753,490 9,875,888
Safety 1,995,544 - 1,995,544
Total difference in projected and actual earnings on pension investments 7,117,942 4,753,490 11,871,432 Differences between expected and actual experience
Safety 522,995 - 522,995
Adjustment due to differences in proportions:

Safety 1,569,333 - 1,569,333
Difference between City's contribution and proportionate share of contributions:

Safety 21,427,278 - 21,427,278
Total deferred outflows of resources $ 7,455,416 37,950,104 $ 45,405,520 $ Aggregate net pension liabilities:

Miscellaneous 3,483,938 $ 3,233,030 $ 6,716,968 $
Safety 12,636,888 - 12,636,888
Total aggregate net pension liabilities $ 3,233,030 16,120,826 $ 19,353,856 $ Deferred inflows of resources:

Differences between expected and actual experience:

Miscellaneous 2,058,555 $ 1,910,303 $ 3,968,858 $
Safety 137,226 - 137,226
Total differences between expected and actual experience 2,195,781 1,910,303 4,106,084 Difference between City's contribution and proportionate share of contributions:

Safety 9,613,995 - 9,613,995
Adjustment due to differences in proportions:

Safety 21,653,472 - 21,653,472
Total deferred inflows of resources $ 33,463,248 $ 1,910,303 $ 35,373,551 Pension Expense:

Miscellaneous $ 1,005,018 $ 1,039,862 $ 2,044,880
Safety 38,527,581 38,527,581 -
Total pension expense $ 39,532,599 $ 1,039,862 $ 40,572,461 City of Gardena
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
79 Note 10 – Retirement Plans (Continued)
A. California Public Employees’ Retirement System (“CalPERS”) (Continued) General Information about the Pension Plan
Plan Description
The City contribution to the California Public Employees Retirement System (“CalPERS”), an agent multipleemployer defined benefit pension plan for miscellaneous employees and a cost-sharing multiple-employer defined benefit plan for safety employees. CalPERS acts as a common investment and administrative agent for participating public entities within the State of California. Benefit provisions and all other requirements are established by state statue and City ordinance. A full description of the pension plan regarding number of employees covered, benefit provisions, assumptions (for funding, but not accounting purposes), and membership information are listed in the June 30, 2020 Annual Actuarial Valuation Report. This report and CalPERS’ audited financial statements are publicly available reports that can be obtained at CalPERS’ website under Forms and Publications.

Benefit Provided
CalPERS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. A classic CalPERS member or PEPRA Safety member becomes eligible for service retirement upon attainment of age 50 with at least 5 years of credited service. PEPRA miscellaneous members become eligible for service retirement upon attainment of age 52 with at least 5 years of service. The service retirement benefit is a monthly allowance equal to the product of the benefit factor, years of service, and final compensation.

The final compensation is the monthly average of the member’s highest 36 or 12 consecutive months’ full-time equivalent monthly pay. Retirement benefits for classic miscellaneous employees are calculated as 2% of average final 12 months compensation. Retirement benefit for PEPRA miscellaneous employees are calculated as 2% of the average final 36 months compensation. Retirement benefits for classic safety employees are calculated as 3% of the average final 12 months compensation. Retirement benefits for PEPRA safety employees are calculated as

2.7% of average final 36 months.

Participant is eligible for non-industrial disability retirement if the participant becomes disabled and has at least 5 years credited service. There is no special age requirement. The standard non-industrial disability retirement benefit is a monthly allowance equal to 1.8 percent of final compensation, multiplied by service.

Industrial disability benefits are not offered to miscellaneous employees. The City provides industrial disability retirement benefit to safety employees. The industrial disability retirement benefit is a monthly allowance equal to 50 percent of final compensation.

An employee's beneficiary may receive the basic death benefit if the employee becomes deceased while actively employed. The employee must be actively employed with the City to be eligible for this benefit. An employee's survivor who is eligible for any other pre-retirement death benefit may choose to receive that death benefit instead of this basic death benefit. The basic death benefit is a lump sum in the amount of the employee's accumulated contributions, where interest is currently credited at 7.5 percent per year, plus a lump sum in the amount of one month's salary for each completed year of current service, up to a maximum of six months' salary. For purposes of this benefit, one month's salary is defined as the member's average monthly full-time rate of compensation during the 12 months preceding death. Upon the death of a retiree, a one-time lump sum payment of $500 will be made to the retiree’s designated survivor(s), or to the retiree’s estate.

City of Gardena
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
80 Note 10 – Retirement Plans (Continued)
A. California Public Employees’ Retirement System (“CalPERS”) (Continued) General Information about the Pension Plan (Continued)
Benefit Provided (Continued)
Benefit terms provide for annual cost-of-living adjustments to each employee’s retirement allowance. Beginning the second calendar year after the year of retirement, retirement and survivor allowances will be annually adjusted on a compound basis by 2 percent.

Employees Covered by Benefit Terms
At June 30, 2021, the valuation date, the following employees were covered by the benefit terms:

Miscellaneous
Classic PEPRA
Active employees 293 59 27
Transferred and terminated employees 374 50 8
Retired Employees and Beneficiaries 420 244 0
Total 1,087 353 35
Plans
Safety
Contributions
Section 20814(c) of the California Public Employees’ Retirement Law (“PERL”) requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through 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. The required contribution rates are as follow:

Classic PEPRA Classic PEPRA
Employer Contribution Rate 9.250% 9.250% 25.590% 13.980% Employee Contribution Rate 7.000% 6.750% 9.000% 13.750% Classic PEPRA Classic PEPRA
Employer Contribution Rate 9.180% 9.180% 25.640% 13.660% Employee Contribution Rate 7.000% 6.750% 9.000% 13.750% Miscellaneous Safety
Measurement Period June 30, 2022
Plans
Miscellaneous Safety
Current Fiscal Year Ended June 30, 2023
Plans
City of Gardena
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
81 Note 10 – Retirement Plans (Continued)
A. California Public Employees’ Retirement System (“CalPERS”) (Continued) Net Pension Liability
Actuarial Methods and Assumption Used to Determine Total Pension Liability The June 30, 2021 valuation was rolled forward to determine the June 30, 2022 total pension liability, based on following actuarial methods and assumptions:

Actuarial Cost Method
Actuarial Assumptions:

Discount Rate
Inflation
Salary Increases
Mortality Rate Table1
Post Retirement Benefit Increase
Varies by Entry Age and Service
Derived using CalPERS’ Membership Data for all Funds.

The lesser of contract COLA or 2.30% until Purchasing Power Protection Allowance floor on purchasing power applies, 2.30% thereafter
1 The mortality table used for June 30, 2022 was developed based on CalPERS-specific data. The probabilities of mortality are based on the 2021 CalPERS Experience Study for the period from 2001 to 2019. Pre-retirement and Postretirement mortality rates include 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 CalPERS Experience Study and Review of Actuarial Assumptions report from Novermber 2021 that can be found on the CalPERS website.

Entry Age Actuarial Cost Method

6.90%

2.300%
Change of Assumptions
Effective with the June 30, 2021 valuation date (2022 measurement date), the accounting discount 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. Projected returns for all asset classes are estimated, combined with risk estimates, and are used to project compound (geometric) returns over the long term. The discount rate used to discount liabilities was informed by the long-term projected portfolio return. In addition, demographic assumptions and the inflation rate assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions.

Long-term Expected Rate of Return
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 of the funds’ asset classes, expected compound (geometric) returns were calculated 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.

City of Gardena
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
82 Note 10 – Retirement Plans (Continued)
A. California Public Employees’ Retirement System (“CalPERS”) (Continued) Net Pension Liability (Continued)
Long-term Expected Rate of Return (Continued)
The expected real rates of return by asset class are as followed:

Asset Class1
Assumed Asset
Allocation
Real Return
Years 1 - 101, 2
Global Equity - Cap-weighted 30.00% 4.54%
Global Equity - Non-cap-weighted 12.00% 3.84%
Private Equity 13.00% 7.28%
Treasury 5.00% 0.27%
Mortgage-backed Securities 5.00% 0.50%
Investment Grade Corporates 10.00% 1.56%
High Yield 5.00% 2.27%
Emerging Market Debt 5.00% 2.48%
Private Debt 5.00% 3.57%
Real Assets 15.00% 3.21%
Leverage -5.00% -0.59%
100.00%
1 An expected inflation of 2.30% used for this period.
2 Figures are based on the 2021 Asset Liability Management study.

Discount Rate
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.

City of Gardena
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
83 Note 10 – Retirement Plans (Continued)
A. California Public Employees’ Retirement System (“CalPERS”) (Continued) Changes in the Net Pension Liability
The following table shows the changes in net pension liability for the City’s Miscellaneous Plan recognized over the measurement period.

Total Pension Plan Fiduciary Net Net Pension
Liability Position Liability
(a) (b) (c) = (a) - (b)
Balance at June 30, 2021 (Valuation Date) $ 182,840,031 $ 204,584,123 $ (21,744,092) Changes recognized for the measurement period:

Service Cost 3,211,338 - 3,211,338
Interest on the total pension liability 12,420,366 12,420,366 - Changes of benefit terms - - -
Difference between expected and actual experience (4,506,679) (4,506,679) - Changes of assumptions 5,350,605 - 5,350,605
Plan to plan resource movement - - -
Contributions from the employer - 2,100,703 (2,100,703) Contributions from employees - 1,242,880 (1,242,880)
Net investment income (15,201,569) - 15,201,569
Benefit payments, including refunds of employee
contributions (10,568,643) (10,568,643) -
Administrative expense - (127,444) 127,444
Other miscellaneous income/(expense) - - -
Net changes during July 1, 2021 to June 30, 2022 5,906,987 (22,554,073) 28,461,060 Balance at June 30, 2022 (Measurement Date) $ 188,747,018 $ 182,030,050 $ 6,716,968 Miscellaneous Plan
Increase (Decrease)
Proportionate Share of Net Pension Liability and Pension Expense The following table shows the City’s safety plan’s proportionate share of the risk pool collective net pension liability over the measure period.

Total Pension Plan Fiduciary Net Net Pension
Liability Position Liability (asset)
(a) (b) (c) = (a) - (b)
Balance at June 30, 2021 (Valuation Date) 229,573,818 $ 257,069,105 $ (27,495,287) $ Balance at June 30, 2022 (Measurement Date) 245,640,403 233,003,515 12,636,888 Net Changes during 2021-2022 16,066,585 (24,065,590) 40,132,175 Safety Plan
Increase (Decrease)
City of Gardena
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
84 Note 10 – Retirement Plans (Continued)
A. California Public Employees’ Retirement System (“CalPERS”) (Continued) Changes in the Net Pension Liability (Continued)
Proportionate Share of Net Pension Liability and Pension Expense (Continued) The following is the approach established by the plan actuary to allocate the net pension liability and pension expense to the individual employers within the risk pool. (1) In determining a cost-sharing plan’s proportionate share, total amounts of liabilities and assets are first calculated for the risk pool as a whole on the valuation date (June 30, 2021). The risk pool’s fiduciary net position (“FNP”) subtracted from its total pension liability (“TPL”) determines the net pension liability (“NPL”) at the valuation date.
(2) Using standard actuarial roll forward methods, the risk pool TPL is then computed at the measurement date (June 30, 2022). Risk pool FNP at the measurement date is then subtracted from this number to compute the NPL for the risk pool at the measurement date. For purposes of FNP in this step and any later reference thereto, the risk pool’s FNP at the measurement date denotes the aggregate risk pool’s FNP at June 30, 2022 less the sum of all additional side fund (or unfunded liability) contributions made by all employers during the measurement period (2021-2022). (3) The individual plan’s TPL, FNP and NPL are also calculated at the valuation date. TPL is allocated based on the rate plan’s share of the actuarial accrued liability. FNP is allocated based on the rate plan’s share of market value assets.
(4) Two ratios are created by dividing the plan’s individual TPL and FNP as of the valuation date from (3) by the amounts in step (1), the risk pool’s total TPL and FNP, respectively. (5) The plan’s TPL as of the Measurement Date is equal to the risk pool TPL generated in (2) multiplied by the TPL ratio generated in (4). The plan’s FNP as of the Measurement Date is equal to the FNP generated in (2) multiplied by the FNP ratio generated in (4) plus any additional side fund (or unfunded liability) contributions made by the employer on behalf of the plan during the measurement period. (6) The plan’s NPL at the Measurement Date is the difference between the TPL and FNP calculated in (5).

Deferred outflows of resources, deferred inflows of resources, and pension expense are allocated based on the City’s share of net pension liability at the end of measurement date.

The City’s proportionate share of the net pension liability was as follows:

June 30, 2021 -0.508390%
June 30, 2022 0.109403%
Change - Increase (Decrease) 0.617793%
City of Gardena
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
85 Note 10 – Retirement Plans (Continued)
A. California Public Employees’ Retirement System (“CalPERS”) (Continued) Changes in the Net Pension Liability (Continued)
Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the net pension liability of the plans as of the measurement date, calculated using the discount rate of 6.90%, as well as what the net pension liability would be if it were calculated using a discount rate that is 1 percentage-point lower (5.90%) or 1 percentage-point higher (7.90%) than the current rate:

Discount Rate - 1% Current Discount Discount Rate + 1%
(5.90%) Rate (6.90%) (7.90%)
Miscellaneous Plan 31,558,549 $ 6,716,968 $ (13,690,648) $ Safety Plan 46,559,444 $ 12,636,888 $ (138,960,837) $
Plan's Net Pension Liability (asset)
Pension Plan Fiduciary Net Position
Detailed information about the plan’s fiduciary net position is available in the separately issued CalPERS financial report.

Pension Expense (Credit) and Deferred Outflows and Deferred Inflows of Resources Related to Pensions For the year ended June 30, 2023, the City recognized pension expense in the amounts of $2,044,880 and $38,527,581 for the miscellaneous plan and safety plan, respectively.

As of measurement date of June 30, 2022, the City has deferred outflows and deferred inflows of resources related to pensions as follows:

Deferred outflows Deferred inflows
of Resources of Resources
Pension contribution made after measurement date 1,935,000 $ - $ Changes of assumptions 3,678,541 -
Difference between expected and actual experience - (3,968,858) Net difference between projected and actual earning on
pension plan investments 9,875,888 -
Total 15,489,429 $ (3,968,858) $
Miscellaneous Plan
City of Gardena
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
86 Note 10 – Retirement Plans (Continued)
A. California Public Employees’ Retirement System (“CalPERS”) (Continued) Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions (Continued)
Deferred outflows Deferred inflows
of Resources of Resources
Pension contribution made after measurement date 3,126,759 $ - $ Changes of assumptions 1,274,182 -
Difference between expected and actual experience 522,995 (137,226) Difference between projected and actual earnings on
pension plan investments 1,995,544 -
Adjustment due to differences in proportions 1,569,333 (21,653,472) Difference between City contributions and
proportionate share of contributions 21,427,278 (9,613,995) Total $ 29,916,091 $ (31,404,693)
Safety Plan
The amounts above are net of outflows and inflows recognized in the 2021-22 measurement period expense.

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). The EARSL for the miscellaneous plan and the safety risk pool for the 2021-22 measurement period is 3.2 and 3.7 years, which was obtained by dividing the total service years of 3,447 and 574,665 (the sum of remaining service lifetimes of the active employees) by 1,087 and 153,587 (the total number of participants: active, inactive, and retired), respectively. $1,935,000 and $3,126,759 reported as deferred outflows of resources related to pensions for miscellaneous plan and safety plan, respectively, resulting from the City’s contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability and collectively net pension liability, respectively, in the year ending June 30, 2024.

Other amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recognized in the future pension expense as follows:

Measurement Periods
Ended June 30 Miscellaneous Plan Safety Plan
2023 $ 1,233,724 $ (2,226,956)
2024 1,537,321 (2,068,692)
2025 1,003,948 (1,537,019)
2026 5,810,578 1,217,306
2027 - -
Thereafter - -
$ 9,585,571 $ (4,615,361)
Deferred Outflows/ (Inflows) of Resources
City of Gardena
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
87 Note 10 – Retirement Plans (Continued)
B. Public Agency Retirement System (“PARS”)
Defined Contribution Pension Plan
For all of its part-time employees who are not eligible for coverage under the CalPERS pension plan, the City provides pension benefits through a defined contribution plan. In a defined contribution plan, benefits depend solely on amounts contributed to the plan plus investment earnings. The plan is administered as part of the Public Agency Retirement Systems (“PARS”). The PARS Trust Agreement may be amended by a two-thirds majority or greater of the Member Agencies. The plan conforms to the requirements under Internal Revenue Code 401(a) and has received a favorable Letter of Determination from the Internal Revenue Service.

All part-time employees are eligible to participate from the date of employment. Federal legislation requires contributions of at least 7.5 percent to a retirement plan, and City Council resolved to match the employees’ contributions up to 3.75 percent. The City’s contributions for each employee (and interest earned by the accounts) are fully vested immediately. For the year ended June 30, 2023 the City’s payroll covered by the plan was $832,258. The City made employer contributions in the amount of $30,431. There were 74 participants of the Plan as of June 30, 2023.

The assets of the defined contribution pension plan are those of the part-time employees and are not included in the accompanying financial statements.

Note 11 – Other Postemployment Benefits (“OPEB”)
At June 30, 2023, total OPEB liability and related deferred outflows of resources and deferred inflows of resources are as follows:

Governmental Business-Type
Activities Activities Total
Deferred outflows of resources:

OPEB contribution made after measurement date 4,966,034 $ 734,925 $ 5,700,959 $ Change in assumptions 7,779,416 137,399 7,916,815
Differences between expected and actual experience 885,249 1,337,270 2,222,519 Differences in projected and actual earnings 13,084 386,621 399,705 Total deferred outflows of resources $ 2,596,215 13,643,783 $ 16,239,998 $ Total other postemployment benefit liabilities $ 8,020,898 64,768,264 $ 72,789,162 $ Deferred inflows of resources:

Change in assumptions 13,762,804 $ 639,876 $ 14,402,680 $ Differences between expected and actual experience 1,205,353 385,585 1,590,938 Total deferred inflows of resources $ 1,025,461 14,968,157 $ 15,993,618 $ OPEB expense $ 837,668 2,914,204 $ 3,751,872 $
City of Gardena
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
88 Note 11 – Other Postemployment Benefits (“OPEB”) (Continued) General Information about the OPEB Plan
Plan Description
The City provides retiree healthcare benefits for employees who retire simultaneously from CalPERS and the City and who meet the qualifying criteria negotiated by the various City labor groups. The OPEB plan is a single employer plan with a trust, but without special funding situation, or non-employer contribution entities. The City offers insurance coverage from Kaiser Permanente and a self-insured PPO.

Miscellaneous employees hired prior to July 1, 2002 must be 55 years of age and have at least 13 years of full-time service with the City. Effective July 1, 2002, miscellaneous (non-management) employees must have at least 20 years of full-time service to qualify. Safety employees must be 50 years of age and have 25 years of full-time service in the police or fire department of the City. In October 2000, City fire services transferred to contracted services with the Los Angeles County Fire District. Postemployment benefits continue only for fire personnel retiring from service prior to that date.

The City’s health plan year runs February through January with open-enrollment every January prior to the start of the new plan year. The monthly benefits to be paid by the City are $1,498 and $1,329 per month for the calendar years 2023 and 2022, respectively.

Eligibility
All of the Plan’s employees became participants in accordance with a negotiated Memorandum of Understanding (“MOU”) as negotiated by each group or bargaining unit. In order to receive benefits, eligible employees must meet the minimum requirements defined in their MOU. At June 30, 2022 valuation date, the following numbers of participants were covered by the benefit terms:

Governmental
Activities GTrans Sewer
Inactives currently receiving benefits 191 43 -
Inactives entitled to benefit payments - - -
Active employees 219 101 4
Total 410 144 4
Plans
Contributions
Governmental
Activities Gtrans Total
Benefit payments 3,216,034 $ 724,778 $ 3,940,812 $
Trust contributions 1,750,000 - 1,750,000
Total 4,966,034 $ $ 724,778 $ 5,690,812
Fiscal Year Ended June 30, 2023
City of Gardena
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
89 Note 11 – Other Postemployment Benefits (“OPEB”) (Continued) Net OPEB Liability
The City’s Net OPEB liability was measured as of June 30, 2022, and total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation as of June 30, 2022.

Significant Actuarial Assumptions Used for Total OPEB Liability The total OPEB liability, measured as of June 30, 2022, was determined using the following actuarial assumptions:

Actuarial Cost Method
Actuarial Assumptions:

Actuarial Valuation Date June 30, 2022
Valuation of Fiduciary Net Position
Recognition of deferred inflows and outflows of
resources
Salary Increases
Discount Rate
Inflation Rate
Investment Rate of Return
Healthcare Cost Trend Rate (City Plan)
Healthcare Cost Trend Rate (Kaiser)
Preretirement Mortality:

Miscellaneous
Safety
Preretirement Mortality:

Miscellaneous
Safety

6.25%, net OPEB plan investment expense

2.50%
Entry Age, Level Percent of Pay
Governmental Activities and Gtrans: Fair value assets.

Sewer: No assets held in an irrevocable trust as of the measurement date.

Closed period equal to the average of the expected remaining service lives of all employees provided with OPEB.

2.75%
Governmental Activities and Sewer: 3.54%
Gtrans: 6.25%

6.50% for 2022, 6.00% for 2023, 5.50% for 2024, 5.25% for 2025-2029, 5.00% for 2030-2039, 4.75% for 2040-2049, 4.50% for 2050-2069 and 4.00% for 2070 and later years.

Preretirement Mortality Rates for Public Agency Miscellaneous from CalPERS Experience Study (2000-2019).

Preretirement Mortality Rates for Public Agency Police and Fire from CalPERS Experience Study (2000-2019).

Post-retirement Mortality Rates for Public Agency
Miscellaneous from CalPERS Experience Study (2000-2019).

Post-retirement Mortality Rates for Public Agency Police and Fire from CalPERS Experience Study (2000-2019).

Actuarial assumptions used in the June 30, 2022 valuation were based on a review of the plan experience during the period June 30, 2022 to June 30, 2022.

Total OPEB Liability
Change in Assumptions
Discount rate changed from 2.16% at June 30, 2021 to 3.54% at June 30, 2022 for the governmental activities and Sewer Enterprise’s plans. No change in discount rate for GTrans Plan. Medical plan assumption, trend rate assumption, demographic assumption and mortality improvement scale were updated.

City of Gardena
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
90 Note 11 – Other Postemployment Benefits (“OPEB”) (Continued) Total OPEB Liability (Continued)
Discount Rate
a. A long-term expected rate of return on OPEB plan investments – to the extent that the OPEB plan’s fiduciary net position (if any) is projected to be enough to make projected benefit payments and assets are expected to be invested using a strategy to achieve that return.
b. A yield or index rate for 20-year, tax-exempt general obligation municipal bonds with an average rating of AA/Aa or higher – to the extent that the conditions in (a) are not met. To determine a resulting single (blended) rate, the amount of the plan’s projected fiduciary net position (if any) and the amount of projected benefit payments is compared in each period of projected benefit payments. The discount rate used to measure the City’s total OPEB liability is based on these requirements and the following information:

Long-Term Bond Buyer
Expected Return of 20-Bond GO
Reporting Date Measurement Date Plan Investments Index Discount Rate June 30, 2023 June 30, 2022 6.25% 3.54% 3.54%
The discount rate used to measure total OPEB liability for Governmental Activities and Sewer was 3.54%. The discount rate used to measure the total OPEB liability for GTrans was 6.25% percent.

Investment Policy
The City’s policy regarding the allocation of the plan’s invested assets is established and may be amended by City management. The City participates in the California Employers' Retiree Benefit Trust (CERBT), a Section 115 trust fund dedicated to prefunding Other Postemployment Benefits for all eligible California public agencies.

The City has adopted the CERBT Strategy 1 portfolio with an objective to seek returns that reflect the broad investment performance of the financial markets through capital appreciation and investment income. The portfolio is invested in various asset classes in percentages approved by the CalPERS Board.

Asset Class Component Target Allocation
Expected Real
Rate of Return
Global Equity 57.00% +/-2% MSCI All Country Would Index IMI (net) Fixed Income 27.00% +/-2% Bloomberg Barclays Long Liability Index Treasury Inflation-Protected Securities 5.00% +/-2% Bloomberg Barclays Barclays US TIPS Index Real Estate Ivestment Trusts 8.00% +/-2%
Commodities 3.00% +/-2% S&P GSCI Total Return Index
Cash 0.00% +2% 91 Day Treasury Bill
100.00%
FTSE EPRA/NAREIT Developed Liquid Index (net)
Benchmark
City of Gardena
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
91 Note 11 – Other Postemployment Benefits (“OPEB”) (Continued) Total OPEB Liability (Continued)
Long-Term Expected Rate of Return
The long-term expected rate of return on OPEB plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of investment expense and inflation) are developed for each major asset class. The calculated investment rate of return was set equal to the expected ten-year compound (geometric) real return plus inflation (rounded to the nearest 25 basis points, where appropriate). The table below provides the long-term expected real rates of return by asset class (based on published capital market assumptions).

Change in Net OPEB Liability.

Asset Class
Assumed Asset
Allocation Real Rate of Return
Global ex-U.S. Equity 59.00% 4.80%
U.S. Fixed 25.00% 1.80%
TIPS 5.00% 1.60%
Real Estate 8.00% 3.70%
Commodities 3.00% 1.90%
100.00%
Rate of Return
For the year ended on the measurement date, the annual money-weighted rate of return on investments, net of investment expense, was -13.38 percent. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts invested.

Change in Net OPEB Liability
The following presents the changes in the net OPEB liability for the governmental activities’ Retiree Health Plan:

Total OPEB Fiduciary Net OPEB
Liability Net Position Liability
(a) (b) (c) = (a) - (b)
Balance at June 30, 2021 76,481,166 $ 200,187 $ 76,280,979 $ Changes recognized for the measurement period:

Service Cost 2,815,579 - 2,815,579
Interest on the total pension liability 1,688,245 - 1,688,245 Differences between expected and actual experience 303,548 - 303,548 Changes in assumptions and other inputs (14,060,251) - (14,060,251) Contributions - employer - 2,286,676 (2,286,676)
Net investment income - (26,789) 26,789
Benefits payments (2,286,676) (2,286,676) -
Administrative expenses - (51) 51
Net changes during July 1, 2021 to June 30, 2022 (11,539,555) (26,840) (11,512,715) Balance at June 30, 2022 (Measurement Date) $ 64,941,611 $ 173,347 $ 64,768,264 Increase (Decrease)
City of Gardena
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
92 Note 11 – Other Postemployment Benefits (“OPEB”) (Continued) Change in Net OPEB Liability (Continued)
The following presents the changes in the net OPEB liability for the GTrans Enterprise’s retiree OPEB Plan:

Total Pension Plan Fiduciary Net Net OPEB
Liability Position Liability
(a) (b) (c) = (a) - (b)
Balance at June 30, 2021 11,625,436 $ 5,713,012 $ 5,912,424 $ Changes recognized for the measurement period:

Service cost 300,182 - 300,182
Interest on the total OPEB liability 718,462 - 718,462
Differences between expected and actual experience 1,378,033 - 1,378,033 Changes in assumptions (475,092) - (475,092)
Contributions - employer - 873,696 (873,696)
Net investment income - (764,412) 764,412
Benefit payments (873,696) (873,696) -
Administrative expenses - (1,447) 1,447
Net changes during July 1, 2021 to June 30, 2022 1,047,889 (765,859) 1,813,748 Balance at June 30, 2022 (Measurement Date) 12,673,325 $ 4,947,153 $ 7,726,172 $ Increase (Decrease)
The following presents the changes in the net OPEB liability for the Sewer Enterprise Fund (nonmajor):

Total Pension Plan Fiduciary Net Net OPEB
Liability Position Liability
(a) (b) (c) = (a) - (b)
Balance at June 30, 2021 536,098 $ - $ 536,098 $
Changes recognized for the measurement period:

Service Cost 32,554 - 32,554
Interest on the total OPEB liability 12,283 - 12,283
Differences between expected and actual experience (214,606) - (214,606) Changes in assumptions (71,603) - (71,603)
Contributions - employer - - -
Net investment income - - -
Benefit payments - - -
Administrative expenses - - -
Net changes during July 1, 2021 to June 30, 2022 (241,372) - (241,372) Balance at June 30, 2022 (Measurement Date) 294,726 $ - $ 294,726 $ Increase (Decrease)
City of Gardena
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
93 Note 11 – Other Postemployment Benefits (“OPEB”) (Continued) Change in Net OPEB Liability (Continued)
Sensitivity of the net OPEB Liability to Changes in the Discount Rate The following presents the net OPEB liability of the governmental activities and the Sewer’s Retiree Health Plans, as well as what the governmental activities and the Sewer Enterprise’s total OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point lower (2.54 percent) or 1-percentage- point higher (4.54 percent) than the current discount rate:

Discount Rate - 1% Current Discount Discount Rate + 1%
(2.54%) Rate (3.54%) (4.54%)
Governmental Activities $ 74,529,563 $ 64,768,264 $ 56,811,044 Sewer $ 345,103 $ 294,726 $ 253,883
Plan's Net OPEB Liability
The following presents the net OPEB liability of the GTrans Enterprise Retiree Health Plan, as well as what the GTrans Enterprise Retiree Health Plan’s total OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point lower (5.25 percent) or 1-percentage- point higher (7.25 percent) than the current discount rate:

Discount Rate - 1% Current Discount Discount Rate + 1%
(5.25%) Rate (6.25%) (7.25%)
$ 7,726,172 9,418,573 $ 6,324,936 $
Plan's Net OPEB Liability
OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB Sensitivity of the Net OPEB Liability to Changes in the Health Care Cost Trend Rates The following presents the total OPEB liability of the City, GTrans, and Sewer, as well as what the City’s, GTrans’, and Sewer’s total OPEB liability would be if it were calculated using healthcare cost trend rates that are 1-percentagepoint lower or 1-percentage-point higher than the current healthcare cost trend rates:
1% Decrease Current Trend 1% Increase
Governmental Activities $ 55,571,695 $ 64,768,264 $ 76,563,587 GTrans $ 6,123,471 $ 7,726,172 $ 9,712,583
Sewer $ 240,811 $ 294,726 $ 365,490
Plan's Net OPEB Liability
City of Gardena
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
94 Note 11 – Other Postemployment Benefits (“OPEB”) (Continued) OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB (Continued)
For the measurement period ended June 30, 2022, the governmental activities recognized expense of $2,914,204. At June 30, 2023, the City reported deferred outflows of resources and deferred inflows of resources related to governmental activities OPEB from the following sources:

Deferred outflows Deferred inflows
of resources of resources
Difference between expected and actual experience 885,249 $ $ (13,762,804) Changes in assumptions 7,779,416 (1,205,353)
Net difference between projected and actual earnings
on plan investments 13,084 -
Employer contributions made subsequent to
the measurement date 4,966,034 -
Total $ 13,643,783 $ (14,968,157)
For the measurement period ended June 30, 2022, GTrans recognized expense of $811,910. At June 30, 2023, the City reported deferred outflows of resources and deferred inflows of resources related to GTrans OPEB from the following sources:

Deferred outflows Deferred inflows
of resources of resources
Difference between expected and actual experience $ 1,325,250 $ (185,400) Changes in assumptions 73,830 (554,016)
Net difference between projected and actual earnings
on plan investments 386,621 -
Employer contributions made subsequent to
the measurement date 724,778 -
Total $ 2,510,479 $ (739,416)
For the measurement period ended June 30, 2022, Sewer recognized expense of $25,758. At June 30, 2023, the City reported deferred outflows of resources and deferred inflows of resources related to Sewer OPEB from the following sources:

Deferred outflows Deferred inflows
of resources of resources
Difference between expected and actual experience $ 12,020 $ (200,185) Changes in assumptions 63,569 (85,860)
Employer contributions made subsequent to
the measurement date 10,147 -
Total $ 85,736 $ (286,045)
The difference between projected OPEB plan investment earnings and actual earnings is amortized over a five-year period. The remaining gains and losses are amortized over the expected average remaining service life. The expected average remaining service life is 7.8 years, 8.2 years, and 14.2 years for the governmental activities, the GTrans, and the Sewer, respectively, which was determined as of June 30, 2022, the beginning of the measurement period, for employees covered by the OPEB plan benefit terms.

City of Gardena
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
95 Note 11 – Other Postemployment Benefits (“OPEB”) (Continued) OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB (Continued)
$4,966,034, $724,778, and $10,147 reported as deferred outflows of resources related to OPEB under the governmental activities, GTrans, and Sewer, respectively resulting from the City’s contributions subsequent to the measurement date will be recognized as a reduction of the net OPEB liability in the year ending June 30, 2024. Other amount reported as deferred inflows of resources related to OPEB will be recognized in the future OPEB expense as follows:

Measurement
Periods
Ended June 30 Governmental Activities GTrans Sewer
2023 $ (578,159) $ 147,837 $ (16,079)
2024 (297,311) 143,094 (14,079)
2025 (49,412) 115,226 (14,079)
2026 (520,792) 311,828 (14,079)
2027 (1,670,111) 88,239 (16,449)
Thereafter (3,174,623) 240,061 (135,691)
$ (6,290,408) $ 1,046,285 $ (210,456)
Deferred Outflows/(Inflows) of Resources
Note 12 – Deferred Compensation Plan
The City offers its employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457. The plan, available to all City employees, permits them to defer a portion of their salaries until future years. The deferred compensation is not available to employees until termination, retirement, death or unforeseeable emergency. The plan assets are under the participants control and are principally invested in demand deposits and mutual funds and are held in trust for the exclusive benefit of the participants and their beneficiaries. The plan assets are not included in the accompanying financial statements. At June 30, 2023, the amount held by the Trustee for the City employees is $29,129,835.

Note 13 – Net Position and Fund Balances
A. Government-Wide Financial Statements
Net Investment in Capital Assets
The following is the calculation of net investment in capital assets at June 30, 2023:

Governmental Business-Type
Activities Activities
Capital Assets, net of
accumulated depreciation and amortization 59,480,793 $ 60,259,791 $ Less: outstanding principal on capital related debt, net (25,914,575) (292,920) Add: Unspent debt proceeds 11,752,150 -
Less: capital assets related accounts payable (1,644,421) (828,673) Less: retention payable (116,252) -
Net investments in capital assets $ 43,557,695 $ 59,138,198 City of Gardena
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
96 Note 13 – Net Position and Fund Balances (Continued) B. Fund Financial Statements
Fund Balance Classification:

At June 30, 2023, fund balances are classified in the governmental funds as follows:

Economic
Development Nonmajor Total
General Grants Special City Capital City Debt Governmental Governmental Fund Revenue Fund Projects Fund Service Fund Funds Funds Nonspendable:

Inventories 42,815 $ - $ - $ - $ - $ 42,815 $
Prepaid items and deposits 284,591 - - 291,500 19,597 595,688 Total nonspendable - 327,406 - 291,500 19,597 638,503
Restricted:

Economic development - 6,715,432 - - - 6,715,432
Debt service - - - 1,994,718 - 1,994,718
Law enforcement - - - - 752,261 752,261
Local street improvements - - - - 9,940,829 9,940,829
Community development - - - - 163,533 163,533
Capital projects - - 301,897 11,752,150 4,379,819 16,433,866 Other purposes - - - - 402,193 402,193
Total restricted 6,715,432 - 301,897 13,746,868 15,638,635 36,402,832 Committed:

Emergency contingency 13,196,711 - - - - 13,196,711
Senior and Aquatic Center Project 10,944,000 - - - - 10,944,000 Pension stabilization fund - 2,707,963 - - - 2,707,963
Total committed 26,848,674 - - - 26,848,674 -
Assigned:

ERP and vehicle replacement 3,995,481 - - - 3,995,481 - Equipment replacement 8,168,595 - - - 8,168,595 -
Future debt service payments 8,498,441 - - - 8,498,441 - Benefit liability stabilization 2,000,000 - - - 2,000,000 - Total assigned 22,662,517 - - - 22,662,517 -
Unassigned: 300,000 - (289,149) - (57,980) (47,129)
Total fund balance $ 50,138,597 $ 6,715,432 $ 301,897 $ 13,749,219 $ 15,600,252 $ 86,505,397 City of Gardena
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
97 Note 14 – Jointly Governed Organization
South Bay Regional Public Communications Authority
The City is a member of the South Bay Regional Public Communications Authority (“SBRPCA”), which provides financing and equipment for a police communications system for the City and the other member municipalities of SBRPCA - Hawthorne and Manhattan Beach. SBRPCA financial statements can be obtained from the SBRPCA at 4440 West Broadway, Hawthorne, California 90250.

Revenues, expenses and indebtedness incurred by the SBRPCA relating to services associated with central dispatch are divided by member agencies in accordance with set percentages; however, expenses incurred relating to specific equipment and services requested by an individual member agency for use by its own public safety services are paid entirely by that member agency. As of June 30, 2023, the City’s percentage interest is 32.08%.

As of and for the year ended June 30, 2023, the latest available information, SBRPCA’s audited financial information is as follows:

Total assets $ 14,297,651
Total deferred outflows of resources 5,674,146
Total liabilities 12,659,596
Total deferred inflows of resources 2,123,049
Net position $ 5,189,152
Total revenues $ 13,196,777
Total expenses (11,930,301)
Change in net position $ 1,266,476
Note 15 – Commitments and Contingencies
The City participates in a number of federal and state assisted grant programs, which are subject to program compliance audits by the grantors or their representatives. Final closeout audits of these programs have not yet been completed. Accordingly, the City’s ultimate compliance with applicable grant requirements will be established at some future date. Expenditures, if any, which may be disallowed by the granting agencies cannot be determined at this time, although the City expects such amounts, if any, to be immaterial.

The City is currently a party to various claims and legal proceedings. In management’s opinion, the ultimate liabilities, if any, resulting from such claims and proceedings, will not materially affect the City’s financial position.

The City had outstanding construction commitments in the amount of $35,243,250 as of June 30, 2023. 98 City of Gardena
Annual Comprehensive Financial Report
For the Year Ended June 30, 2023
(This page is intentionally left blank)

REQUIRED SUPPLEMENTARY

INFORMATION (UNAUDITED)
99 City of Gardena
Annual Comprehensive Financial Report
For the Year Ended June 30, 2023
(This page is intentionally left blank)
100
Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Taxes $ 62,775,245 $ 62,775,245 $ 68,777,353 $ 6,002,108 Licenses and permits 1,875,038 1,875,038 2,158,749 283,711 Intergovernmental 532,500 532,500 689,683 157,183
Charges for services 5,407,723 5,407,723 5,659,983 252,260 Fines, forfeitures and penalties 1,185,368 1,185,368 927,536 (257,832) Use of money and property 330,000 330,000 978,751 648,751 Miscellaneous 502,036 502,036 613,793 111,757
Total revenues 72,607,910 72,607,910 79,805,848 7,197,938 EXPENDITURES:

Current:

General government:

City Clerk 555,370 555,370 501,569 53,801
City treasurer 301,534 301,534 278,342 23,192
Executive office 1,943,791 1,943,791 1,499,967 443,824
Administrative services 2,548,085 2,548,085 2,431,556 116,529 Non-departmental 1,015,399 1,015,399 1,488,894 (473,495) Public safety:

Police 30,237,239 30,507,239 29,755,809 751,430
L.A. County Fire District 12,854,048 12,584,048 12,254,572 329,476 Public works 6,634,386 6,634,386 6,887,999 (253,613)
Recreation and human services 4,216,629 4,216,629 4,005,992 210,637 Community development 2,618,308 2,618,308 2,620,660 (2,352) Capital outlay 888,000 888,000 2,454,195 (1,566,195)
Debt service:

Principal retirement - - 592,688 (592,688)
Interest and fiscal charges - - 32,659 (32,659)
Total expenditures 63,812,789 63,812,789 64,804,902 (992,113)

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 8,795,121 8,795,121 15,000,946 6,205,825 OTHER FINANCING SOURCES (USES):

Transfers in 4,739,000 4,739,000 3,277,369 (1,461,631)
Transfers out (10,291,664) (10,291,664) (11,044,788) (753,124) Proceed from sale of assets 10,000 10,000 31,153 21,153 Proceeds from debt issuance - 1,048,143 - 1,048,143
Total other financing sources (uses) (5,542,664) (5,542,664) (6,688,123) (1,145,459) NET CHANGE IN FUND BALANCE $ 3,252,457 3,252,457 $ 8,312,823 5,060,366 $ FUND BALANCE:

Beginning of Year 41,825,774
End of Year $ 50,138,597
Required Supplementary Information (Unaudited)
Budgetary Comparison Schedule
City of Gardena
For the Year Ended June 30, 2023
General Fund
101
Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Intergovernmental $ 3,050,280 $ 3,050,280 $ 275,975 $ (2,774,305) Charges for services - - 64,000 64,000
Fines, forfeitures and penalties 200,000 200,000 270,000 70,000 Use of money and property 20,000 20,000 94,535 74,535
Miscellaneous - - 54 54
Total revenues 3,270,280 3,270,280 704,564 (2,565,716)
EXPENDITURES:

Current:

Community development 1,340,280 1,340,280 183,002 1,157,278 Total expenditures 1,340,280 1,340,280 183,002 1,157,278

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 1,930,000 1,930,000 521,562 (1,408,438) OTHER FINANCINGSOURCES (USES):

Transfers in (3,054,730) - 1,729 1,729
Transfers out (3,054,730) (3,054,730) (310,525) 2,744,205 Total other financing sources (uses) (3,054,730) (3,054,730) (308,796) 2,745,934 NET CHANGE IN FUND BALANCE $ (1,124,730) (1,124,730) $ 212,766 1,337,496 $ FUND BALANCE:

Beginning of Year 6,502,666
End of Year $ 6,715,432
City of Gardena
Required Supplementary Information (Unaudited)
Budgetary Comparison Schedule (Continued)
For the Year Ended June 30, 2023
Economic Development Grants Special Revenue Fund
102
Note 1 - Budgetary Control and Accounting Policy




 Appropriations lapse at year-end to the extent they have not been expended, except for capital projects appropriations which lapse when individual projects are completed.

The budget is prepared under the City Manager’s direction and adopted by the City Council, generally prior to June 30 of each year. It is revised periodically during the year by the City Council. The budget presented in the financial statements includes the original and final amounts.

The budget serves as a policy document for the deliverance of public services; however, expenditures are individually approved by the City Council. The City Manager is authorized to transfer amounts within individual fund budgets without the approval of City Council. Additional appropriations during the year may be submitted to the City Council for review and approval.

Budget information is presented for the governmental fund types. Budgeted revenue amounts represent the original budget modified by Council-authorized adjustments during the year, which were contingent upon new, or additional revenue sources.

Budgeted expenditure amounts represent original appropriations adjusted for supplemental appropriations during the year.

Total expenditures of each governmental fund may not legally exceed fund appropriations, and total expenditures for each department (for example: police department, public works department, community development department, etc.) may not legally exceed departmental appropriations. The City does not employ encumbrance accounting. The budgets conform, in all material respects, to U.S. GAAP.

The City’s budget is a detailed operating plan, which identifies estimated costs and results in relation to estimated revenues. The budget includes (1) the programs, projects, services, and activities to be provided during the fiscal year, (2) the estimated resources (inflows) and amounts available for appropriation and (3) the estimated charges to appropriations (outflows). The budget represents a process through which policy decisions are made, implemented, and controlled. The City’s policy prohibits expending funds for which there is no legal appropriation.

The City’s procedures for preparing the budgetary data reflected in the financial statements are:

City of Gardena
Required Supplementary Information (Unaudited)
Notes to the Budgetary Comparison Schedule
For the Year Ended June 30, 2023
The City adopts annual budgets for the General Fund, special revenue funds, and debt service funds as well as adopts project length budgets for projects within the City Capital Projects Fund. During the year ended June 30, 2023, the City did not adopt a budget for the Asset Forfeiture Special Revenue Fund.
103
Measurement period 2013-141 2014-15 2015-16 2016-17 2017-18 Total pension liability
Service cost 2,713,029 $ 2,672,238 $ 2,740,901 $ 3,129,118 $ 3,173,762 $ Interest 9,625,167 10,024,136 10,454,955 10,781,297 11,153,035 Changes of benefit terms - - - - -
Changes of assumptions - (2,344,195) - 8,715,907 (778,396) Differences between expected and actual experience - (500,092) (36,375) (553,030) 122,851 Benefit payments, including
refunds of employee contributions (6,617,452) (6,931,772) (7,193,626) (7,669,492) (8,486,647) Net change in total pension liability 2,920,315 5,720,744 5,965,855 14,403,800 5,184,605 Total pension liability - beginning 136,008,515 130,287,771 138,928,830 144,894,685 159,298,485 Total pension liability - ending (a) $ 138,928,830 136,008,515 $ 144,894,685 $ 159,298,485 $ 164,483,090 $ Pension fiduciary net position
Contributions - employer 1,628,415 $ 2,016,919 $ 2,317,060 $ 2,645,234 $ 3,015,630 $ Contributions - employee 1,181,161 1,242,246 1,321,368 1,327,795 1,405,045 Net investment income 17,430,461 2,536,012 604,797 12,260,577 10,029,125 Benefit payments, including
refunds of employee contributions (6,617,452) (6,931,772) (7,193,626) (7,669,492) (8,486,647) Net plan to plan resource movement - - (1,234) 11,249 (291) Administrative expense - (128,654) (69,658) (164,291) (186,505) Other miscellaneous income/ (expense)2 - - - - (354,176) Net change in plan fiduciary net position (1,265,249) 13,622,585 (3,021,293) 8,411,072 5,422,181 Plan fiduciary net position - beginning
3 115,562,210 101,939,625 114,296,961 111,275,668 119,686,740 Plan fiduciary net position - ending (b) $ 114,296,961 115,562,210 $ 111,275,668 $ 119,686,740 $ 125,108,921 $ Plan net pension liability - ending (a) - (b) $ 24,631,869 20,446,305 $ 33,619,017 $ 39,611,745 $ 39,374,169 $ Plan fiduciary net position as a percentage 84.97% 82.27% 76.80% 75.13% 76.06% of the total pension liability
Covered payroll
4 $ 18,094,788 17,651,457 $ 19,012,911 $ 19,306,012 $ 19,929,430 $ Plan net pension liability as a percentage
of covered payroll 115.83% 136.13% 176.82% 205.18% 197.57% Notes to Schedule:

City of Gardena
Required Supplementary Information (Unaudited)
Schedule of Changes in Net Pension Liability and Related Ratios For the Year Ended June 30, 2023
Last Ten Fiscal Years
1 Historical information is presented only for measurement periods for periods after GASB 68 implementation in 2013-14. Additional years of information will be displayed as it becomes available.

California Public Employees' Retirement System ("CalPERS") - Miscellaneous Plan 2 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 (GASB 68). 3 Includ es o ne year’s payroll growth using 2.80% payroll growth assumption for fiscal year ended June 30, 2022; 2.75% payroll growth assumption for fiscal years ended June 30, 2018-21;

3.00% payroll growth assumption for fiscal years ended June 30, 2014-17.

Changes of Assumptions: Effective with the June 30, 2021 valuation date (2022 measurement date), the accounting discount rate was reduced from 7.15% to 6.90%. In determining the longterm expected rate of return, CalPERS took into account long-term market return expectations as well as the expected pension fund cash flows. Projected returns for all asset classes are estimated, combined with risk estimates, and are used to project comp ound (geometric) returns over the long term. The discount rate used to discount liabilities was informed by the long-term projected portfolio return. In addition, demographic assumptions and the inflation rate assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. The ac counting discount rate was 7.15% for measurement dates 2017 through 2021, 7.65% for measurement dates 2015 through 2016, and 7.50% for measurement date 2014.

Benefit Changes: The figures above generally include any liability impact that may have resulted from voluntary benefit changes that occurre d 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.
104
Measurement period 2018-19 2019-2020 2020-2021 2021-2022 Total pension liability
Service cost $ 3,162,100 $ 3,329,543 $ 3,190,091 $ 3,211,338 Interest 11,820,982 12,201,071 12,451,995 12,420,366
Changes of benefit terms - - - -
Changes of assumptions - - 5,350,605 -
Differences between expected and actual experience 3,672,690 (593,300) (1,841,509) (4,506,679) Benefit payments, including
refunds of employee contributions (8,816,825) (9,498,332) (10,721,565) (10,568,643) Net change in total pension liability 9,838,947 5,438,982 3,079,012 5,906,987 Total pension liability - beginning 164,483,090 174,322,037 179,761,019 182,840,031 Total pension liability - ending (a) $ 179,761,019 174,322,037 $ 182,840,031 $ 188,747,018 $ Pension fiduciary net position
Contributions - employer 3,688,807 $ 4,397,533 $ 46,940,155 $ 2,100,703 $ Contributions - employee 1,457,546 1,611,737 1,203,298 1,242,880 Net investment income 8,130,102 6,417,192 35,069,162 (15,201,569) Benefit payments, including
refunds of employee contributions (8,816,825) (9,498,332) (10,721,565) (10,568,643) Net plan to plan resource movement - - - -
Administrative expense (89,280) (182,534) (132,085) (127,444) Other miscellaneous income/ (expense)2 - 291 - -
Net change in plan fiduciary net position 2,745,596 4,370,641 72,358,965 (22,554,073) Plan fiduciary net position - beginning
3 129,479,562 125,108,921 132,225,158 204,584,123
Plan fiduciary net position - ending (b) $ 132,225,158 129,479,562 $ 204,584,123 $ 182,030,050 $ Plan net pension liability - ending (a) - (b) $ 47,535,861 44,842,475 $ (21,744,092) $ 6,716,968 $ Plan fiduciary net position as a percentage 74.28% 73.56% 111.89% 96.44% of the total pension liability
Covered payroll
4 $ 21,343,226 20,102,352 $ 20,567,963 $ 18,319,096 $
Plan net pension liability as a percentage
of covered payroll 223.07% 222.72% -105.72% 36.67%
City of Gardena
Required Supplementary Information (Unaudited)
Schedule of Changes in Net Pension Liability and Related Ratios (Continued) For the Year Ended June 30, 2023
Last Ten Fiscal Years
California Public Employees' Retirement System ("CalPERS") - Miscellaneous Plan (Continued) 105
Measurement period June 30, 20141 June 30, 2015 June 30, 2016 June 30, 2017 June 30, 2018 City Proportion of the Net Pension Liability 0.65549% 0.65832% 0.62924% 0.61206% 0.62701% City's Proportionate Share of
the net Pension Liability 40,787,661 $ 45,186,413 $ 54,448,433 $ 60,699,742 $ 60,419,894 $ City's Covered Payroll 9,078,779 $ 9,351,143 $ 10,491,839 $ 10,435,515 $ 11,232,919 $ City's Proportionate Share of the Net Pension
Liability as a Percentage of Its Covered Payroll 449.26% 483.22% 518.96% 581.67% 537.88% Plan's Proportionate Share of the Fiduciary Net Position as a Percentage of the Total Pension Liability 75.54% 77.40% 68.79% 68.27% 69.50% Last Ten Fiscal Years
City of Gardena
Required Supplementary Information (Unaudited)
Schedule of the City's Proportionate Share of the Net Pension Liability and Related Ratios For the Year Ended June 30, 2023
1 Historical information is presented only for measurement periods for periods after GASB 68 implementation in 2013-14. Additional years of information will be displayed as it becomes available.

California Public Employees' Retirement System ("CalPERS") - Safety Plan 106
Measurement period June 30, 2019 June 30, 2020 June 30, 2021 June 30, 2022 City Proportion of the Net Pension Liability 0.55899% 0.56472% -0.50839% 0.10940% City's Proportionate Share of
the net Pension Liability $ 57,280,320 $ 61,443,923 $ (27,495,287) $ 12,636,888 City's Covered Payroll $ 12,156,428 $ 11,992,232 $ 11,768,395 $ 12,233,930 City's Proportionate Share of the Net Pension
Liability as a Percentage of Its Covered Payroll 471.19% 512.36% -233.64% 103.29% Plan's Proportionate Share of the Fiduciary Net Position as a Percentage of the Total Pension Liability 72.58% 72.05% 111.98% 94.86% Last Ten Fiscal Years
California Public Employees' Retirement System ("CalPERS") - Safety Plan (Continued) City of Gardena
Required Supplementary Information (Unaudited)
Schedule of the City's Proportionate Share of the Net Pension Liability and Related Ratios (Continued) For the Year Ended June 30, 2023
107
2013-14 2014-15 2015-16 2016-17 2017-18
Actuarially determined contribution 1,628,415 $ 2,016,919 $ 2,317,060 $ 2,645,234 $ 3,015,630 $ Contributions in relation to
the actuarially determined contribution1 (1,628,415) (2,016,919) (2,317,060) (2,645,234) (3,015,630) Contribution deficiency (excess) $ - $ - $ - $ - $ -
Covered payroll2 $ 18,094,788 17,651,457 $ 19,012,911 $ 19,306,012 $ 19,929,430 $ Contributions as a percentage of covered payroll2 9.23% 11.15% 12.19% 13.70% 15.13% Notes to Schedule:

Methods and assumptions used to determine contribution rates:

Actuarial cost method Entry Age Normal Cost Method
Amortization method Level percentage of payroll
Asset valuation method Fair value
Inflation 2.50%
Salary increases Varies by entry age and service
Payroll Growth 2.750%
Investment rate of return
Retirement age
Mortality
The probabilities of mortality are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015. Pre-retirement and Post-retirement mortality rates include 15 years of projected mortality improvement using 90% of Scale MP-2016 published by the Society of Actuaries.

City of Gardena
Required Supplementary Information (Unaudited)
Schedule of Contributions - Pensions
For the Year Ended June 30, 2023
1 Employers are assumed to make contributions equal to the actuarially determined contributions. However, some employers may choose to make additional contributions towards their unfunded liability. Employer contributions for such plans exceed the actuarially determined contributions.

The actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year 2021-22 were derived from the June 30, 2019 funding valuation report.

7.00% net of pension plan investment and administrative expenses; includes Inflation.

The probabilities of retirement are based on the 2017 CalPERS Experience study for the period from 1997 to 2015.

California Public Employees' Retirement System ("CalPERS") - Miscellaneous Plan Last Ten Fiscal Years
2 Include es o ne year’s payroll growth using 2.80% payroll growth assumption for fiscal year ended June 30, 2022; 2.75% payroll growth assumption for fiscal years ended June 30, 2018-21; 3.00% payroll growth assumption for fiscal years ended June 30, 2014-17. 108
2018-19 2019-20 2020-213 2021-22 2022-23
Actuarially determined contribution 3,688,807 $ 4,397,533 $ 4,625,188 $ 2,100,703 $ 1,935,000 $ Contributions in relation to
the actuarially determined contribution1 (3,688,807) (4,397,533) (46,940,155) (2,100,703) (1,935,000) Contribution deficiency (excess) $ - $ (42,314,967) - $ $ - $ - Covered payroll2 $ 21,343,226 20,102,352 $ 20,567,963 $ 18,319,096 $ 18,832,031 $ Contributions as a percentage of covered payroll2 18.35% 20.60% 228.22% 11.47% 10.28% Required Supplementary Information (Unaudited) (Continued) Schedule of Contributions - Pensions (Continued)
For the Year Ended June 30, 2023
Last Ten Fiscal Years
California Public Employees' Retirement System ("CalPERS") - Miscellaneous Plan (Continued) 3 During FY2020-21, the City contributed $42,022,534 additional funds to CalPERS via proceeds of the 2020 Taxable Pension Obligation Bonds.

City of Gardena
109
2013-14 2014-15 2015-16 2016-17 2017-18
Actuarially determined contribution 3,930,218 $ 4,265,350 $ 4,917,350 $ 5,401,275 $ 6,093,811 $ Contributions in relation to the
actuarially determined contribution (3,930,218) (4,265,350) (4,917,350) (5,401,275) (6,093,811) Contribution deficiency (excess) - $ - $ - $ - $ - $
Covered payroll 1 $ 9,351,143 9,078,779 $ 10,491,839 $ 10,435,515 $ 11,232,919 $ Contributions as a percentage of covered payroll 43.29% 45.61% 46.87% 51.76% 54.25% Notes to Schedule:

Changes of Assumptions: Effective with the June 30, 2021 valuation date (2022 measurement date), the accounting discount 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. Projected returns for all asset classes are estimated, combined with risk estimates, and are used to project comp ound (geometric) returns over the long term. The discount rate used to discount liabilities was informed by the long-term projected portfolio return. In addition, demographic assumptions and the inflation rate assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. The ac counting discount rate was 7.15% for measurement dates 2017 through 2021, 7.65% for measurement dates 2015 through 2016, and 7.50% for measurement date 2014. None in 2019-2021. In 2018, demographic assumptions and inflation rate were changed in accordance to the CalPERS Experience Study and Review of Assumptions December 2017. There were no changes in the discount rate. In 2017, the discount rate was reduced from 7.65 percent to 7.15 percent. In 2016, there were no changes. In 2015, amounts reported reflect an adjustment of the discount rate from 7.5 percent (net of administrative expense) to 7.65 percent (without a reduction for pension plan administrative expense). In 2014, amounts reported were based on the 7.5 percent discount rate.

City of Gardena
Required Supplementary Information (Unaudited)
Schedule of Contributions - Pensions (Continued)
For the Year Ended June 30, 2023
1 Payroll from 2021-22 was assumed to increase by the 2.8 percent payroll growth assumption.

Change in Benefit Terms: There was no change in benefit terms.

California Public Employees' Retirement System ("CalPERS") - Safety Plan Last Ten Fiscal Years
110
2018-19 2 2019-20 2020-21 3 2021-22 2022-23
Actuarially determined contribution 6,617,559 $ 6,185,808 $ 8,595,603 $ 2,950,604 $ 3,126,759 $ Contributions in relation to the
actuarially determined contribution3 (6,185,808) (12,677,559) (60,369,859) (2,950,604) (3,126,759) Contribution deficiency (excess) $ (6,060,000) $ (51,774,256) - $ $ - $ - Covered payroll $ 12,156,428 $ 11,992,232 $ 11,768,395 $ 12,233,930 $ 12,576,480 Contributions as a percentage of covered payroll 104.29% 51.58% 512.98% 24.12% 24.86% California Public Employees' Retirement System ("CalPERS") - Safety Plan (Continued) 2 During FY2018-19, the City contributed $6,060,000 to CalPERS to proceed with the 20 year fresh start of the unfunded liability to the safety plan. 3 During FY2020-21, the City contributed $51,774,256 additional funds to CalPERS via proceeds of the 2020 Taxable Pension Obligation Bonds.

City of Gardena
Required Supplementary Information (Unaudited)
Schedule of Contributions - Pensions (Continued)
For the Year Ended June 30, 2023
Last Ten Fiscal Years
111
Measurement period 2016-171 2017-18 2018-19 2019-20 2020-21 Total OPEB liability
Service cost 2,001,000 $ 1,619,506 $ 1,649,332 $ 1,902,932 $ 2,450,797 $ Transfers to Sewer - (288,000) - - -
Interest 1,888,000 2,141,404 2,284,925 2,265,606 1,663,721 Changes of benefit terms - - - - -
Changes of assumptions (7,755,000) (4,569,074) 3,665,059 10,099,593 654,965 Differences between expected and actual experience - 2,253,827 - (2,109,370) - Benefit payments, including refunds (2,162,000) (2,247,465) (2,251,080) (2,075,527) (2,237,985) Other - funding rates used by benefits paid 580,000 - - - - Net change in total OPEB liability (1,089,802) (5,448,000) 5,348,236 10,083,234 2,531,498 Total OPEB liability - beginning of the year 59,608,000 65,056,000 58,518,198 63,866,434 73,949,668 Total OPEB liability - end of the year (a) $ 58,518,198 59,608,000 $ 63,866,434 $ 73,949,668 $ 76,481,166 $ OPEB fiduciary net position
Contributions - employer - $ 2,247,465 $ 2,401,080 $ 2,075,527 $ 2,237,985 $ Contributions - employee - - - - -
Net investment income - - 1,792 5,361 43,168
Benefit payments, including refunds - (2,247,465) (2,251,080) (2,075,527) (2,237,985) Administrative expense - - (1) (74) (59)
Other changes - - - - -
Net change in plan fiduciary net position - - 151,791 5,287 43,109 Plan fiduciary net position - beginning of year - - - 151,791 157,078 Plan fiduciary net position - end of year (b) $ - - $ 151,791 $ 157,078 $ 200,187 $ Plan net OPEB liability - end of year (a) - (b) $ 58,518,198 59,608,000 $ 63,714,643 $ 73,792,590 $ 76,280,979 $ Plan fiduciary net position as a percentage
of the total OPEB liability 0.00% 0.00% 0.24% 0.21% 0.26% Covered employee payroll
2 $ 23,523,270 25,500,000 $ 24,650,894 $ 25,558,730 $ 22,948,265 $ Plan net OPEB liability as a percentage of
covered employee payroll 233.76% 248.77% 258.47% 288.72% 332.40% Notes to Schedule:

Changes of benefit terms: There were no changes of benefit terms in 2022.

Changes of assumptions: In 2022, the accounting discount rate increase from 2.16 percent to 3.54 percent. In addition, the demographic assumptions and the inflation rate assumption were changed in accordance with the 2002-2019 CalPERS Experience Study and Review of Actuarial Assumptions In 2021, the accounting discount rate decrease from 2.21 percent to 2.16 percent. In 2020, the accounting discount rate decreased from 3.50 percent to 2.21 percent. In 2019, the accounting discount rate increased from 3.87 percent to 3.50 percent. In 2018, the accounting discount rate increased from 3.58 percent to 3.87 percent. In 2017, the accounting discount rate increased from 2.85 percent to 3.58 percent. 1 Historical information is presented for measurement periods after GASB 75 implementation in 2016-17. Additional years' information will be displayed as it becomes available.

City of Gardena
Required Supplementary Information (Unaudited)
Schedule of Changes in Net OPEB Liability and Related Ratios For the Year Ended June 30, 2023
Last Ten Fiscal Years
Governmental Activities Retiree Healthcare Plan
112
Measurement period 2021-22
Total OPEB liability
Service cost $ 2,815,579
Transfers to Sewer -
Interest 1,688,245
Changes of benefit terms -
Changes of assumptions (14,060,251)
Differences between expected and actual experience 303,548 Benefit payments, including refunds (2,286,676)
Other - funding rates used by benefits paid -
Net change in total OPEB liability (11,539,555)
Total OPEB liability - beginning of the year 76,481,166 Total OPEB liability - end of the year (a) $ 64,941,611 OPEB fiduciary net position
Contributions - employer $ 2,286,676
Contributions - employee -
Net investment income (26,789)
Benefit payments, including refunds (2,286,676)
Administrative expense (51)
Other changes -
Net change in plan fiduciary net position (26,840)
Plan fiduciary net position - beginning of year 200,187 Plan fiduciary net position - end of year (b) $ 173,347 Plan net OPEB liability - end of year (a) - (b) $ 64,768,264 Plan fiduciary net position as a percentage
of the total OPEB liability 0.27%
Covered employee payroll
2 $ 24,154,486
Plan net OPEB liability as a percentage of
covered employee payroll 268.14%
Notes to Schedule:

Changes of benefit terms: There were no changes of benefit terms in 2022.

Governmental Activities Retiree Healthcare Plan (Continued) 1 Historical information is presented for measurement periods after GASB 75 implementation in 2016-17. Additional years' information will be displayed as it becomes available.

City of Gardena
Required Supplementary Information (Unaudited)
Schedule of Changes in Net OPEB Liability and Related Ratios (Continued) For the Year Ended June 30, 2023
Last Ten Fiscal Years
113
Measurement period 2016-171 2017-18 2018-19 2019-20 2020-21 Total OPEB liability
Service cost 232,000 $ 238,960 $ 291,129 $ 299,863 $ 340,578 $ Interest 598,000 629,344 661,199 706,976 691,860
Changes of benefit terms - - - - -
Changes of assumptions - (357,602) - 117,261 -
Differences between expected and actual experience - 301,185 - (294,459) - Benefit payments, including refunds (462,000) (494,701) (289,528) (276,271) (272,358) Other - funding rates used by benefits paid 190,000 - - - - Net change in total OPEB liability 317,186 558,000 662,800 553,370 760,080 Total OPEB liability - beginning of year 9,332,000 8,774,000 9,649,186 10,311,986 10,865,356 Total OPEB liability - end of year (a) $ 9,649,186 9,332,000 $ 10,311,986 $ 10,865,356 $ 11,625,436 $ OPEB fiduciary net position
Contributions - employer 462,000 $ 4,516,245 $ 289,528 $ 276,271 $ 272,358 $ Contributions - employee - - - - -
Net investment income - 60,118 251,747 152,987 1,231,806 Benefit payments, including refunds (462,000) (494,701) (289,528) (276,271) (272,358) Administrative expense - (505) (874) (2,115) (1,696)
Other changes - - - - -
Net change in plan fiduciary net position 4,081,157 - 250,873 150,872 1,230,110 Plan fiduciary net position - beginning of year - - 4,081,157 4,332,030 4,482,902 Plan fiduciary net position - end of year (b) $ 4,081,157 - $ 4,332,030 $ 4,482,902 $ 5,713,012 $ Plan net OPEB liability - end of year (a) - (b) $ 5,568,029 9,332,000 $ 5,979,956 $ 6,382,454 $ 5,912,424 $ Plan fiduciary net position as a percentage
of the total OPEB liability 0.00% 42.30% 42.01% 41.26% 49.14% Covered employee payroll $ 10,316,000 9,759,000 $ 9,798,690 $ 10,811,701 $ 8,791,518 $ Plan net OPEB liability as a percentage of
covered employee payroll 95.62% 53.97% 61.03% 59.03% 67.25% Notes to Schedule:

Changes of benefit terms: There were no changes of benefit terms in 2022.

Changes of assumptions: In 2022, there were no changes in discount rate; however, the demographic assumptions and the inflation rate assumption were changed in accordance with the 2002-2019 CalPERS Experience Study and Review of Actuarial Assumptions In 2020, the discount rate changed from 6.75 percent to 6.25 percent and the inflation assumption was changed from 2.75 percent per year to 2.50 percent. In 2019, There were no changes in assumptions. In 2018, medical plan at retirement assumption updated, trend rate updated, demographic assumptions were updated to CalPERS 1997-2015 Experience Study, and mortality improvement scale was updated to Scale MP-2018. In 2017, there were no changes.
1 Historical information is presented only for measurement periods after GASB 75 implementation in 2016-17.

City of Gardena
Required Supplementary Information (Unaudited)
Schedule of Changes in Net OPEB Liability and Related Ratios (Continued) For the Year Ended June 30, 2023
Last Ten Fiscal Years
GTrans Retiree Healthcare Plan
114
Measurement period 2021-22
Total OPEB liability
Service cost $ 300,182
Interest 718,462
Changes of benefit terms (873,696)
Changes of assumptions (475,092)
Differences between expected and actual experience 1,378,033 Benefit payments, including refunds -
Other - funding rates used by benefits paid -
Net change in total OPEB liability 1,047,889
Total OPEB liability - beginning of year 11,625,436
Total OPEB liability - end of year (a) $ 12,673,325
OPEB fiduciary net position
Contributions - employer $ 873,696
Contributions - employee -
Net investment income 357,018
Benefit payments, including refunds (873,696)
Administrative expense (1,447)
Other changes (1,121,430)
Net change in plan fiduciary net position (765,859)
Plan fiduciary net position - beginning of year 5,713,012 Plan fiduciary net position - end of year (b) $ 4,947,153 Plan net OPEB liability - end of year (a) - (b) $ 7,726,172 Plan fiduciary net position as a percentage
of the total OPEB liability 39.04%
Covered employee payroll $ 10,652,412
Plan net OPEB liability as a percentage of
covered employee payroll 72.53%
Notes to Schedule:

Changes of benefit terms: There were no changes of benefit terms in 2022.

GTrans Retiree Healthcare Plan (Continued)
1 Historical information is presented only for measurement periods after GASB 75 implementation in 2016-17.

City of Gardena
Required Supplementary Information (Unaudited)
Schedule of Changes in Net OPEB Liability and Related Ratios (Continued) For the Year Ended June 30, 2023
Last Ten Fiscal Years
115
Measurement period 2016-171 2017-18 2018-19 2019-20 2020-21 Total OPEB liability
Service cost - $ 16,001 $ 19,620 $ 22,199 $ 73,740 $
Transfers from the Governmental Activities - 288,000 - - - Interest - 10,883 11,678 12,351 11,482
Changes of benefit terms - - - - -
Changes of assumptions - (32,020) 17,238 64,526 5,084
Differences between expected and actual experience - (709) - 16,025 - Benefit payments, including refunds - - - - -
Other - funding rates used by benefits paid - - - - -
Net change in total OPEB liability 282,155 - 48,536 115,101 90,306 Total OPEB liability - beginning of year - - 282,155 330,691 445,792 Total OPEB liability - end of year (a) $ 282,155 - $ 330,691 $ 445,792 $ 536,098 $ OPEB fiduciary net position
Contributions - employer - $ - $ - $ - $ - $
Contributions - employee - - - - -
Net investment income - - - - -
Benefit payments, including refunds - - - - -
Administrative expense - - - - -
Other changes - - - - -
Net change in plan fiduciary net position - - - - -
Plan fiduciary net position - beginning of year - - - - - Plan fiduciary net position - end of year (b) $ - - $ - $ - $ - $ Plan net OPEB liability - end of year (a) - (b) $ 282,155 - $ 330,691 $ 445,792 $ 536,098 $ Plan fiduciary net position as a percentage 0.00% 0.00% 0.00% 0.00% 0.00% of the total OPEB liability
Covered employee payroll N/A 388,821 $ 482,665 $ 515,111 $ 497,972 $ Plan net OPEB liability as a percentage of
covered employee payroll N/A 72.57% 68.51% 86.54% 107.66% Notes to Schedule:

Changes of benefit terms: There were no changes of benefit terms in 2022.

Changes of assumptions: In 2022, the accounting discount rate increase from 2.16 percent to 3.54 percent. In 2020, the accounting discount rate decrease from 2.21 percent to 2.16 percent. In 2020, the accounting discount rate decreased from 3.50 percent to 2.21 percent. In 2019, the accounting discount rate increased from 3.87 percent to 3.50 percent. In 2018, the accounting discount rate increased from 3.58 percent to 3.87 percent. In 2017, the accounting discount rate increased from 2.85 percent to 3.58 percent. 1 Historical information is presented only for measurement periods after GASB 75 implementation in 2016-17.

City of Gardena
Required Supplementary Information (Unaudited)
Schedule of Changes in Net OPEB Liability and Related Ratios (Continued) For the Year Ended June 30, 2023
Last Ten Fiscal Years
Sewer Retiree Healthcare Plan
116
Measurement period 2021-22
Total OPEB liability
Service cost $ 32,554
Transfers from the Governmental Activities -
Interest 12,283
Changes of benefit terms -
Changes of assumptions (71,603)
Differences between expected and actual experience (214,606) Benefit payments, including refunds -
Other - funding rates used by benefits paid -
Net change in total OPEB liability (241,372)
Total OPEB liability - beginning of year 536,098
Total OPEB liability - end of year (a) $ 294,726
OPEB fiduciary net position
Contributions - employer $ -
Contributions - employee -
Net investment income -
Benefit payments, including refunds -
Administrative expense -
Other changes -
Net change in plan fiduciary net position -
Plan fiduciary net position - beginning of year -
Plan fiduciary net position - end of year (b) $ -
Plan net OPEB liability - end of year (a) - (b) $ 294,726 Plan fiduciary net position as a percentage 0.00%
of the total OPEB liability
Covered employee payroll $ 386,209
Plan net OPEB liability as a percentage of
covered employee payroll 76.31%
Notes to Schedule:

Changes of benefit terms: There were no changes of benefit terms in 2022.

Sewer Retiree Healthcare Plan (Continued)
1 Historical information is presented only for measurement periods after GASB 75 implementation in 2016-17.

City of Gardena
Required Supplementary Information (Unaudited)
Schedule of Changes in Net OPEB Liability and Related Ratios (Continued) For the Year Ended June 30, 2023
Last Ten Fiscal Years
117
2016-171 2017-18 2018-19 2019-20 2020-21
Actuarially determined contribution 5,029,000 $ N/A 3,631,000 $ 3,867,000 $ 3,941,000 $ Contributions in relation to
the actuarially determined contribution (2,162,000) (2,247,465) (2,557,088) (2,075,527) (2,237,985) Contribution deficiency (excess) 2,867,000 $ (2,247,465) $ 1,073,912 $ 1,791,473 $ 1,703,015 $ Covered employee payroll N/A 23,523,270 $ 24,650,894 $ 25,558,730 $ 22,948,265 $ Contributions as a percentage of covered employee
payroll N/A N/A 10.37% 8.12% 9.75%
Notes to Schedule:

Methods and assumptions used to determine contribution rates:

Actuarial cost method Entry Age Normal, Level % of pay
Discount rate: Level % of pay
Long-term expected return 6.25%
Municipal bond index 3.54%
GASB 75 3.54%
Salary increases 2.75%
Withdrawal
Pre-retirement mortality
Postretirement mortality
Retirement
Medical trend
Governmental Activities Retiree Healthcare Plan
City of Gardena
Required Supplementary Information (Unaudited)
Schedule of Contributions - Other Postemployment Benefits Plans For the Year Ended June 30, 2023
Last Ten Fiscal Years
1 Historical information is presented only for measurement periods after GASB 75 implementation in 2016-17.

Pre-Medicare - 6.5% for 2022, decreasing on an ultimate rate of 4.00% in 2070+ Medicare City Plan - 6.0% for 2022, decreasing on an ultimate rate of 4.00% in 2070+ Medicare Kaiser - 4.5% for 2022, decreasing on an ultimate rate of 4.00% in 2070+ Miscellaneous - Terminated Refund and Terminated Vested Rates for Public Agency Miscellaneous from CalPERS Experience Study (2000-2019).

Safety - Terminated Refund and Terminated Vested Rates for Public Agency Police from CalPERS Experience Study (2000-2019).

Miscellaneous - Preretirement Mortality Rates for Public Agency Miscellaneous from CalPERS Experience Study (2000-2019).

Safety - Preretirement Mortality Rates for Public Agency Police and Fire from CalPERS Experience Study (2000-2019).

Miscellaneous - Classic - Service Retirement Rates for Public Agency Miscellaneous—2.00% at 55—from CalPERS Experience Study (2000-2019).

Miscellaneous - PEPRA - Service Retirement Rates for Public Agency Miscellaneous—2.00% at 62—from CalPERS Experience Study (2000-2019).

Police - Classic - Service Retirement Rates for Public Agency Police—3.00% at 50— CalPERS Experience Study (2000-2019).

Police - PEPRA - Service Retirement Rates for Public Agency Police—2.70% at 57— CalPERS Experience Study (2000-2019).

The actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year 2022-23 were derived from the June 30, 2022 funding valuation report.

Miscellaneous - Post-retirement Mortality Rates for Public Agency Miscellaneous from CalPERS Experience Study (2000-2019).

Safety - Post-retirement Mortality Rates for Public Agency Police and Fire from CalPERS Experience Study (2000-2019).
118
2021-22 2022-23
Actuarially determined contribution $ 5,012,263 4,211,000 $ Contributions in relation to
the actuarially determined contribution (2,286,676) (4,966,034) Contribution deficiency (excess) $ 46,229 1,924,324 $
Covered employee payroll $ 24,818,734 24,154,486 $
Contributions as a percentage of covered employee
payroll 9.47% 20.01%
Governmental Activities Retiree Healthcare Plan (Continued) City of Gardena
Required Supplementary Information (Unaudited)
Schedule of Contributions - Other Postemployment Benefits Plans (Continued) For the Year Ended June 30, 2023
Last Ten Fiscal Years
119
2016-171 2017-18 2018-19 2019-20 2020-21
Actuarially determined contribution 848,000 $ 785,000 $ 721,000 $ 776,000 $ 848,000 $ Contributions in relation to
the actuarially determined contribution (462,000) (4,516,544) (532,056) (276,271) (272,358) Contribution deficiency (excess) 386,000 $ (3,731,544) $ 188,944 $ 499,729 $ 575,642 $ Covered employee payroll 9,759,000 $ 10,316,000 $ 9,798,690 $ 10,811,701 $ 8,791,518 $ Contributions as a percentage of covered employee
payroll 4.73% 43.78% 5.43% 2.56% 3.10%
Notes to Schedule:

Methods and assumptions used to determine contribution rates:

Actuarial cost method Entry Age Normal, Level % of pay
Discount rate: Level % of pay
Long-term expected return 6.25%
Municipal bond index 3.54%
GASB 75 6.25%
Salary increases 2.75%
Withdrawal
Pre-retirement mortality
Postretirement mortality
Retirement
Miscellaneous - Terminated Refund and Terminated Vested Rates for Public Agency Miscellaneous from CalPERS Experience Study (2000-2019).

Miscellaneous - Post-retirement Mortality Rates for Public Agency Miscellaneous from CalPERS Experience Study (2000-2019).

City of Gardena
Required Supplementary Information (Unaudited)
Schedule of Contributions - Other Postemployment Benefits Plans (Continued) For the Year Ended June 30, 2023
Last Ten Fiscal Years
The actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year 2022-23 were derived from the June 30, 2022 funding valuation report.

Miscellaneous - Classic - Service Retirement Rates for Public Agency Miscellaneous—2.00% at 55—from CalPERS Experience Study (2000-2019).

Miscellaneous - PEPRA - Service Retirement Rates for Public Agency Miscellaneous—2.00% at 62—from CalPERS Experience Study (2000-2019).

Miscellaneous - Preretirement Mortality Rates for Public Agency Miscellaneous from CalPERS Experience Study (2000-2019).

GTrans Retiree Healthcare Plan
1 Historical information is presented only for measurement periods after GASB 75 implementation in 2016-17. 120
2021-22 2022-23
Actuarially determined contribution $ 899,000 $ 954,864 Contributions in relation to
the actuarially determined contribution (873,696) (724,778) Contribution deficiency (excess) $ 25,304 $ 230,086
Covered employee payroll $ 10,484,293 $ 10,954,353
Contributions as a percentage of covered employee
payroll 8.33% 6.62%
GTrans Retiree Healthcare Plan (Continued)
City of Gardena
Required Supplementary Information (Unaudited)
Schedule of Contributions - Other Postemployment Benefits Plans (Continued) For the Year Ended June 30, 2023
Last Ten Fiscal Years
121
2016-171 2017-18 2018-19 2019-20 2020-21
Actuarially determined contribution - $ - $ 25,000 $ 26,000 $ 46,000 $ Contributions in relation to
the actuarially determined contribution - - - - -
Contribution deficiency (excess) - $ - $ 25,000 $ 26,000 $ 46,000 $ Covered employee payroll N/A 388,821 $ 482,665 $ 515,111 $ 497,972 $ Contributions as a percentage of covered employee
payroll N/A N/A 0.00% 0.00% 0.00%
Notes to Schedule:

Methods and assumptions used to determine contribution rates:

Actuarial cost method Entry Age Normal, Level % of pay
Discount rate: Level % of pay
Long-term expected return 6.25%
Municipal bond index 3.54%
GASB 75 3.54%
Salary increases 2.75%
Withdrawal
Pre-retirement mortality
Postretirement mortality
Retirement
Sewer Retiree Healthcare Plan
City of Gardena
Required Supplementary Information (Unaudited)
Schedule of Contributions - Other Postemployment Benefits Plans (Continued) For the Year Ended June 30, 2023
Last Ten Fiscal Years
1 Historical information is presented only for measurement periods after GASB 75 implementation in 2016-17.

Miscellaneous - Terminated Refund and Terminated Vested Rates for Public Agency Miscellaneous from CalPERS Experience Study (2000-2019).

Safety - Terminated Refund and Terminated Vested Rates for Public Agency Police from CalPERS Experience Study (2000-2019).

Miscellaneous - Post-retirement Mortality Rates for Public Agency Miscellaneous from CalPERS Experience Study (2000-2019).

Safety - Post-retirement Mortality Rates for Public Agency Police and Fire from CalPERS Experience Study (2000-2019).

The actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year 2022-23 were derived from the June 30, 2022 funding valuation report.

Miscellaneous - Preretirement Mortality Rates for Public Agency Miscellaneous from CalPERS Experience Study (2000-2019).

Safety - Preretirement Mortality Rates for Public Agency Police and Fire from CalPERS Experience Study (2000-2019).

Miscellaneous - Classic - Service Retirement Rates for Public Agency Miscellaneous—2.00% at 55—from CalPERS Experience Study (2000-2019).

Miscellaneous - PEPRA - Service Retirement Rates for Public Agency Miscellaneous—2.00% at 62—from CalPERS Experience Study (2000-2019).

Police - Classic - Service Retirement Rates for Public Agency Police—3.00% at 50— CalPERS Experience Study (2000-2019).

Police - PEPRA - Service Retirement Rates for Public Agency Police—2.70% at 57— CalPERS Experience Study (2000-2019).
122
2021-22 2022-23
Actuarially determined contribution $ 32,004 48,000 $
Contributions in relation to
the actuarially determined contribution (10,147) -
Contribution deficiency (excess) $ 21,857 48,000 $
Covered employee payroll $ 386,578 $ 397,209
Contributions as a percentage of covered employee
payroll 0.00% 2.55%
Sewer Retiree Healthcare Plan (Continued)
City of Gardena
Required Supplementary Information (Unaudited)
Schedule of Contributions - Other Postemployment Benefits Plans (Continued) For the Year Ended June 30, 2023
Last Ten Fiscal Years
123
City of Gardena
Annual Comprehensive Financial Report
For the Year Ended June 30, 2023
(This page is intentionally left blank)
124

SUPPLEMENTARY INFORMATION
125
City of Gardena
Annual Comprehensive Financial Report
For the Year Ended June 30, 2023
(This page is intentionally left blank)
126
Original Final Variance with
Budget Budget Actual Final Budget
EXPENDITURES:

Capital outlay $ 40,504,947 $ 41,688,130 $ 6,345,749 $ 35,342,381 Total expenditures 40,504,947 41,688,130 6,345,749 35,342,381 OTHER FINANCING SOURCES:

Transfers in 40,504,947 41,688,130 6,345,749 (35,342,381) Total other financing sources 40,504,947 41,688,130 6,345,749 (35,342,381) NET CHANGE IN FUND BALANCE $ - $ - - $ -
FUND BALANCE:

Beginning of year 301,897
End of year $ 301,897
City of Gardena
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual City Capital Projects Fund
For the Year Ended June 30, 2023
127
City of Gardena
Annual Comprehensive Financial Report
For the Year Ended June 30, 2023
(This page is intentionally left blank)
128
Human Services Grants Special Revenue Fund - Represents seven funds. Two of the funds provide meals to the elderly and disabled funded by Aging Program. These meals are served at the Nakaoka Center or delivered directly to the participants. One grant provides for a socialization program for elderly persons suffering from Alzheimer's Disease or dementia. The two Family Child Care grants are funded by the California Department of Education Social Services (“CDSS”) and provides daycare and early education to qualified families. Once fund to account for the Los Angeles County Measure H Homeless grant to provide homeless prevention and referral services.

Community Development Block Grant (CDBG) Special Revenue Fund - To account for funding from HUD to fund programs that benefit low income, elderly or disabled individuals. A number of programs are funded with these monies, including an at-risk youth program, code enforcement, a handy worker program for small home repairs and access ramps, projects to improve or eliminate slum blight conditions, as well as assistance for landlords in designated areas to improve living conditions for qualified tenants.

Gas Tax Special Revenue Fund - To account for funding from the State of California for the state and county gas tax allocation and the Senate Bill No. 1 (SB1) allocation.

Public Works Grants Special Revenue Fund - Represents fourteenth funds used to implement various capital improvements projects. The Artesia Boulevard Landscaping Assessment is received from property assessments and restricted to funding district landscaping activities. Several funds to account for various grants received from the California Department of Transportation or Caltrans to implement programs that promote pedestrian friendly areas, street and signal improvements. The Measure Proposition A Park Bond Safe neighborhood Parks Proposition of 1992 and 1996 is received from Los Angeles County Regional Park and Open Space District to be used for acquisition and improvements to parks. The South Coast AQMD fund is monies received from the motor vehicle tax to be expended on programs to reduce air pollution, which is necessary to comply with the California Clean Air Act of 1988. Measure R & Measure M funds are derived from Los Angeles County 1/2 cent sales tax approved by voters to meet the transportation needs of Los Angeles County. The program is to be used for transportation projects that have been approved by the Los Angeles County Metropolitan Transportation Authority ("MTA"). The Measure W fund is derived from Los Angeles County 2.5 cents parcel tax approved by voters in November 2018 to increase local water supply, improve water quality, and protect public health. This fund is use for Municipal Separate Storm Sewer System (“MS4”) programs and projects. Proposition 68 Fund to account for grant monies received from the Statewide Park Development and Community Revitalization Program (“SPP”) to create new parks and recreation opportunities in underserved communities.

American Rescue Plan Special Revenue Fund - To account for revenues and activities for American Rescue Plan Act funding which was provided to fund additional relief for individuals and businesses affected by the coronavirus pandemic.

NONMAJOR

GOVERNMENTAL FUNDS
Public Safety Grants Special Revenue Fund - Represents twenty-two funds used to fund various police activities. Four of the grants receive funding from the California Office of Traffic Safety. These grants fund sobriety checkpoints, saturation patrols, seatbelt enforcement, warrant/probation sweeps and additional activities to raise public awareness and reduce alcohol involved fatalities. Two grants from the U.S. Department of Justice provides funding for technological programs and equipment to improve public safety issues. One grant from Board of State and Community Corrections (“BSCC”) for establishing officer wellness units and support.

Finally, The COPS grant and Traffic Safety grant are funds earmarked for any police activity that will increase public safety. The Federal Emergency Management Agency (“FEMA”) Coronavirus Pandemic Public Assistance Program provides support to meet emergency needs during the COVID-19 pandemic. The State Homeland Security Grant Program (“HSGP”) provides funding to prevent terrorism and other catastrophic events and to prepare local governments for the threats and hazards that pose the greatest risk to the security of the community.

Consolidated Lighting District Special Revenue Fund - To account for monies received from property assessments restricted to fund district lighting activities.

Prop C Local Return Special Revenue Fund - To account for monies derived from Los Angeles County 1/2% sales tax, received from MTA and expended on streets and roads heavily used by public transit.

Asset Forfeiture Special Revenue Fund - To account for monies that were seized from criminal activities and is to be used solely for law enforcement purposes.
129
Consolidated Prop C
Lighting Local Gas Asset
District Return Tax Forfeiture
ASSETS
Cash and investments 731,524 $ 3,981,659 $ 4,899,333 $ 752,261 $ Receivables:

Accounts - - 374,611 -
Taxes 17,637 - 133,666 -
Prepaid items and deposits - - 4,803 -
Due from other governmental agencies - - - -
Total assets $ 749,161 $ 3,981,659 $ 5,412,413 $ 752,261 Liabilities:

Accounts payable $ 52,211 $ - $ 65,195 $ -
Accrued liabilities - - - -
Salaries and benefits payable - 530 1,553 -
Due to other funds - - 78,112 -
Retention payable - - - -
Unearned revenue - - - -
Total liabilities 52,211 530 144,860 -
Deferred inflows of resources:

Unavailable revenue - - - -
Total deferred inflows of resources - - - -
Fund Balances:

Nonspendable - - 4,803 -
Restricted 696,950 3,981,129 5,262,750 752,261
Unassigned (deficit) - - - -
Total fund balances 696,950 3,981,129 5,267,553 752,261 Total liabilities, deferred inflows of
resources, and fund balances $ 3,981,659 749,161 $ 5,412,413 $ 752,261 $ (Continued)

RESOURCES AND FUND BALANCES
City of Gardena
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2023

LIABILITIES, DEFERRED INFLOWS OF
Special Revenue Funds
130
Community
Development
Public Safety Public Works Human Services Block Grant
Grants Grants Grants (CDBG)
ASSETS
Cash and investments 598,157 $ 4,761,665 $ 964,687 $ 162,316 $ Receivables:

Accounts 699,080 - 102,340 1,217
Taxes - - - -
Prepaid items and deposits - 12,610 2,184 -
Due from other governmental agencies 28,854 1,353,362 225,123 33,444 Total assets $ 6,127,637 1,326,091 $ 1,294,334 $ 196,977 $ Liabilities:

Accounts payable 5,295 $ 25,897 $ 479,241 $ - $
Accrued liabilities - - 3,046 -
Salaries and benefits payable - 1,532 19,344 -
Due to other funds 716,538 1,222,168 270,103 33,444
Retention payable - - - -
Unearned revenue - - - -
Total liabilities 721,833 1,249,597 771,734 33,444
Deferred inflows of resources:

Unavailable revenue 662,238 485,611 118,223 -
Total deferred inflows of resources 662,238 485,611 118,223 - Fund Balances:

Nonspendable - 12,610 2,184 -
Restricted 4,379,819 - 402,193 163,533
Unassigned (deficit) (57,980) - - -
Total fund balances (57,980) 4,392,429 404,377 163,533
Total liabilities, deferred inflows of
resources, and fund balances $ 1,326,091 $ 6,127,637 $ 1,294,334 $ 196,977 (Continued)

RESOURCES AND FUND BALANCES

LIABILITIES, DEFERRED INFLOWS OF
City of Gardena
Combining Balance Sheet (Continued)
Nonmajor Governmental Funds
June 30, 2023
Special Revenue Funds
131
Special
Revenue Fund
Total
American Nonmajor
Rescue Governmental
Plan Funds
ASSETS
Cash and investments $ 19,904,788 3,053,186 $
Receivables:

Accounts 1,177,248 -
Taxes 151,303 -
Prepaid items and deposits 19,597 -
Due from other governmental agencies 1,640,783 -
Total assets $ 22,893,719 3,053,186 $
Liabilities:

Accounts payable $ 627,839 - $
Accrued liabilities 3,046 -
Salaries and benefits payable 22,959 -
Due to other funds 2,320,365 -
Retention payable - -
Unearned revenue 3,053,186 3,053,186
Total liabilities 6,027,395 3,053,186
Deferred inflows of resources:

Unavailable revenue 1,266,072 -
Total deferred inflows of resources 1,266,072 -
Fund Balances:

Nonspendable - 19,597
Restricted 15,638,635 -
Unassigned (deficit) - (57,980)
Total fund balances 15,600,252 -
Total liabilities, deferred inflows of
resources, and fund balances $ 3,053,186 $ 22,893,719
(Concluded)

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES AND FUND BALANCES
City of Gardena
Combining Balance Sheet (Continued)
Nonmajor Governmental Funds
June 30, 2023
132
Consolidated Prop C
Lighting Local Gas Asset
District Return Tax Forfeiture
REVENUES:

Taxes 823,039 $ 2,424,138 $ - $ - $
Intergovernmental - - 3,066,942 -
Fines, forfeitures, and penalties - - - -
Use of money and property 12,331 80,886 86,373 14,094
Miscellaneous - - 42,412 -
Total revenues 2,505,024 835,370 3,195,727 14,094
EXPENDITURES:

Current:

General government - - 7,823 -
Public safety - - - 13,712
Public works 636,162 34,534 597,910 -
Recreation and human services - - - -
Community development - - - -
Capital outlay - - - -
Debt service:

Principal retirement 14,296 - 19,606 -
Interest and fiscal charges - - - -
Total expenditures 34,534 650,458 625,339 13,712

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 184,912 2,470,490 2,570,388 382
OTHER FINANCING SOURCES (USES):

Proceeds from sale of assets - - - -
Transfers in - - - -
Transfers out (67,636) (1,890,382) (711,685) -
Total other financing sources (uses) (67,636) (1,890,382) (711,685) - NET CHANGES IN FUND BALANCES 117,276 580,108 1,858,703 382 FUND BALANCES (DEFICIT):

Beginning of year 579,674 3,401,021 3,408,850 751,879
End of year $ 696,950 $ 3,981,129 $ 5,267,553 $ 752,261 (Continued)
Special Revenue Funds
City of Gardena
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds
For the Year Ended June 30, 2023
133
Community
Development
Public Safety Public Works Human Services Block Grant
Grants Grants Grants (CDBG)
REVENUES:

Taxes - $ 2,223,008 $ - $ - $
Intergovernmental 466,363 2,840,205 3,961,472 67,722
Fines, forfeitures, and penalties 37,878 - - -
Use of money and property 11,810 93,668 19,197 1,558
Miscellaneous - 8,969 55,082 -
Total revenues 5,165,850 516,051 4,035,751 69,280
EXPENDITURES:

Current:

General government - - - -
Public safety 303,884 - - -
Public works - 279,392 - -
Recreation and human services - 17,910 4,197,788 -
Community development - - - 33,446
Capital outlay - 6,898 10,000 -
Debt service:

Principal retirement 4,463 21,990 10,147 -
Interest and fiscal charges - 2,270 5 -
Total expenditures 328,460 308,347 4,217,940 33,446

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 4,837,390 207,704 (182,189) 35,834 OTHER FINANCING SOURCES (USES):

Proceeds from sale of assets - 2,940 - -
Transfers in 2,881 7,973 258,959 51,681
Transfers out (96,462) (3,668,837) (100,548) -
Total other financing sources (uses) (93,581) (3,657,924) 158,411 51,681 NET CHANGES IN FUND BALANCES 114,123 1,179,466 (23,778) 87,515 FUND BALANCES (DEFICIT):

Beginning of year (172,103) 3,212,963 428,155 76,018
End of year $ (57,980) $ 4,392,429 $ 404,377 $ 163,533
(Continued)
Special Revenue Funds
City of Gardena
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Nonmajor Governmental Funds
For the Year Ended June 30, 2023
134
Special
Revenue Fund
Total
American Nonmajor
Rescue Governmental
Plan Funds
REVENUES:

Taxes $ 5,470,185 - $
Intergovernmental 11,300,325 897,621
Fines, forfeitures, and penalties 37,878 -
Use of money and property 391,591 71,674
Miscellaneous 106,463 -
Total revenues 17,306,442 969,295
EXPENDITURES:

Current:

General government 7,823 -
Public safety 317,596 -
Public works 1,547,998 -
Recreation and human services 4,215,698 -
Community development 33,446 -
Capital outlay 16,898 -
Debt service:

Principal retirement 70,502 -
Interest and fiscal charges 2,275 -
Total expenditures 6,212,236 -

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 11,094,206 969,295
OTHER FINANCING SOURCES (USES):

Proceeds from sale of assets - 2,940
Transfers in - 321,494
Transfers out (969,295) (7,504,845)
Total other financing sources (uses) (969,295) (7,180,411) NET CHANGES IN FUND BALANCES 3,913,795 -
FUND BALANCES (DEFICIT):

Beginning of year 11,686,457 -
End of year $ 15,600,252 - $
(Concluded)
City of Gardena
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Nonmajor Governmental Funds
For the Year Ended June 30, 2023
135
Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Taxes $ 836,545 $ 836,545 $ 823,039 $ (13,506)
Use of money and property 2,500 2,500 12,331 9,831
Total revenues 839,045 839,045 835,370 (3,675)
EXPENDITURES:

Current:

Public works 774,749 774,749 636,162 138,587
Debt service:

Principal retirement 14,296 14,296 14,296 -
Total expenditures 789,045 789,045 650,458 138,587

EXCESS OF REVENUES OVER
EXPENDITURES 50,000 50,000 184,912 134,912
OTHER FINANCING USES:

Transfers out (300,000) (300,000) (67,636) 232,364
Total other financing uses (300,000) (300,000) (67,636) 232,364 NET CHANGE IN FUND BALANCE $ (250,000) $ (250,000) 117,276 $ 367,276 FUND BALANCE:

Beginning of year 579,674
End of year $ 696,950
City of Gardena
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Consolidated Lighting District Special Revenue Fund
For the Year Ended June 30, 2023
136
Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Taxes $ 1,221,151 $ 1,221,151 $ 2,424,138 $ 1,202,987
Use of money and property 20,000 20,000 80,886 60,886
Total revenues 1,241,151 1,241,151 2,505,024 1,263,873
EXPENDITURES:

Current:

Public works 37,947 37,947 34,534 3,413
Total expenditures 37,947 37,947 34,534 3,413

EXCESS OF REVENUES OVER
EXPENDITURES 1,203,204 1,203,204 2,470,490 1,267,286
OTHER FINANCING USES:

Transfers out (4,050,000) (4,720,000) (1,890,382) 2,829,618 Total other financing uses (4,050,000) (4,720,000) (1,890,382) 2,829,618 NET CHANGE IN FUND BALANCE $ (2,846,796) $ (3,516,796) 580,108 $ 4,096,904 FUND BALANCE:

Beginning of year 3,401,021
End of year $ 3,981,129
City of Gardena
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Prop C Local Return Special Revenue Fund
For the Year Ended June 30, 2023
137
Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Intergovernmental $ 3,176,857 $ 3,176,857 $ 3,066,942 $ (109,915) Use of money and property - 86,373 86,373
Miscellanous 27,500 27,500 42,412 14,912
Total revenues 3,204,357 3,204,357 3,195,727 (8,630)
EXPENDITURES:

Current:

General government 15,140 15,140 7,823 7,317
Public works 565,660 565,660 597,910 (32,250)
Debt service:

Principal retirement - - 19,606 (19,606)
Total expenditures 580,800 580,800 625,339 (44,539)

EXCESS OF REVENUES OVER
EXPENDITURES 2,623,557 2,623,557 2,570,388 (53,169)
OTHER FINANCING USES:

Transfers out (5,664,047) (5,687,230) (711,685) 4,975,545 Total other financing uses (5,664,047) (5,687,230) (711,685) 4,975,545 NET CHANGE IN FUND BALANCE $ (3,040,490) $ (3,063,673) 1,858,703 $ 4,922,376 FUND BALANCE:

Beginning of year 3,408,850
End of year $ 5,267,553
City of Gardena
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Gas Tax Special Revenue Fund
For the Year Ended June 30, 2023
138
Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Intergovernmental $ 276,126 $ 276,126 $ 466,363 $ 190,237 Fines, forfeitures, and penalties 75,000 75,000 37,878 (37,122) Use of money and property 500 500 11,810 11,310
Total revenues 351,626 351,626 516,051 164,425
EXPENDITURES:

Current:

Public safety 276,126 276,126 303,884 (27,758)
Debt service:

Principal retirement - - 4,463 (4,463)
Total expenditures 276,126 276,126 308,347 (32,221)

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 75,500 75,500 207,704 132,204
OTHER FINANCING SOURCES (USES):

Transfers in - - 2,881 2,881
Transfers out (75,500) (75,500) (96,462) (20,962)
Total other financing (sources) uses (75,500) (75,500) (93,581) (18,081) NET CHANGE IN FUND BALANCE $ - $ - 114,123 $ 114,123
FUND BALANCE (DEFICIT):

Beginning of year (172,103)
End of year $ (57,980)
City of Gardena
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Public Safety Grants Special Revenue Fund
For the Year Ended June 30, 2023
139
Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Taxes $ 2,055,503 $ 2,055,503 $ 2,223,008 $ 167,505
Intergovernmental 17,487,170 17,487,170 2,840,205 (14,646,965) Use of money and property 23,000 23,000 93,668 70,668
Miscellaneous - - 8,969 8,969
Total revenues 19,565,673 19,565,673 5,165,850 (14,399,823) EXPENDITURES:

Current:

Public works 675,077 643,359 279,392 363,967
Recreation and human services 10,000 10,000 17,910 (7,910) Capital outlay 31,836 31,836 6,898 24,938
Debt service:

Principal retirement - 26,825 21,990 4,835
Interest and fiscal charges - 4,893 2,270 2,623
Total expenditures 716,913 716,913 328,460 388,453

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 18,848,760 18,848,760 4,837,390 (14,011,370) OTHER FINANCING USES:

Proceeds from sale of assets - - 2,940 2,940
Transfers in - - 7,973 7,973
Transfers out (19,990,670) (20,480,670) (3,668,837) 16,811,833 Total other financing uses (19,990,670) (20,480,670) (3,657,924) 16,822,746 NET CHANGE IN FUND BALANCE $ (1,141,910) $ (1,631,910) 1,179,466 $ 2,811,376 FUND BALANCE:

Beginning of year 3,212,963
End of year $ 4,392,429
City of Gardena
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Public Works Grants Special Revenue Fund
For the Year Ended June 30, 2023
140
Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Intergovernmental $ 4,284,052 $ 4,284,052 $ 3,961,472 $ (322,580) Use of money and property 4,000 4,000 19,197 15,197
Miscellaneous 31,000 31,000 55,082 24,082
Total revenues 4,319,052 4,319,052 4,035,751 (283,301)
EXPENDITURES:

Current:

Recreation and human services 4,354,917 4,350,174 4,197,788 152,386 Capital Outlay - 10,000 (10,000)
Debt service:

Principal retirement - 4,346 10,147 (5,801)
Interest and fiscal charges - 397 5 392
Total expenditures 4,354,917 4,354,917 4,217,940 136,977

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (35,865) (35,865) (182,189) (146,324) OTHER FINANCING SOURCES:

Transfers in 30,255 30,255 258,959 228,704
Transfers out 30,255 - (100,548) (100,548)
Total other financing sources 30,255 30,255 158,411 128,156 NET CHANGE IN FUND BALANCE $ (5,610) $ (5,610) (23,778) $ (18,168) FUND BALANCE:

Beginning of year 428,155
End of year $ 404,377
City of Gardena
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Human Services Grants Special Revenue Fund
For the Year Ended June 30, 2023
141
Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Intergovernmental $ 980,001 $ 980,001 $ 67,722 $ (912,279) Use of money and property - - 1,558 1,558
Total revenues 980,001 980,001 69,280 (910,721)
EXPENDITURES:

Current:

Community development 980,001 980,001 33,446 946,555
Total expenditures 980,001 980,001 33,446 946,555

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES - - 35,834 35,834
OTHER FINANCING SOURCES (USES):

Transfers in - - 51,681 51,681
Transfers out - - - -
Total other financing sources (uses) - - 51,681 51,681
NET CHANGE IN FUND BALANCE $ - $ - 87,515 $ 87,515
FUND BALANCE:

Beginning of year 76,018
End of year $ 163,533
City of Gardena
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Community Development Block Grant (CDBG) Special Revenue Fund For the Year Ended June 30, 2023
142
Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Intergovernmental $ 2,300,000 $ 2,300,000 $ 897,621 $ (1,402,379) Use of money and property - - 71,674 71,674
Total revenues 2,300,000 2,300,000 969,295 (1,330,705)
OTHER FINANCING USES:

Transfers out (2,300,000) (2,300,000) (969,295) 1,330,705 Total other financing uses (2,300,000) (2,300,000) (969,295) 1,330,705 NET CHANGE IN FUND BALANCE $ - $ - - $ -
FUND BALANCE:

Beginning of year -
End of year $ -
City of Gardena
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual American Rescue Plan Special Revenue Fund
For the Year Ended June 30, 2023
143
City of Gardena
Annual Comprehensive Financial Report
For the Year Ended June 30, 2023
(This page is intentionally left blank)
144
DEBT SERVICE FUNDS:
2021 Lease Revenue Bonds Fund - To account for the accumulated funds for the payment of interest and principal for the lease revenue bonds issued in 2021.
2020 Taxable Pension Obligation Bonds Fund - To account for the accumulated funds for the payment of interest and principal for the pension obligation bonds issued in 2020.
2017 Lease Financing Bonds Fund - To account for the accumulated funds for the payment of interest and principal for the refunding bonds issued in 2017.

CITY DEBT SERVICE FUNDS
To account for the accumulation of resources for, and the payment of, interest and principal on general long-term debt, including certificates of participation and refunding revenue bonds, and capital leases. 2006 Refunding COPs, Series A Fund - To account for the accumulated funds for the payment of interest and principal for the certificates issued in 2006.
2007 Refunding Revenue Bonds SBRPCA Fund - To account for the accumulated funds for the payment of interest and principal for the refunding bonds issued in 2007.
2014 Taxable Lease Revenue Refunding Bonds Fund - To account for the accumulated funds for the payment of interest and principal for the refunding bonds issued in 2014.
145
2006 2007 2014 2017
Refunding Refunding Taxable Lease
COPs, Revenue Bonds Lease Revenue Financing
Series A SBRPCA Refunding Bonds Bonds
ASSETS
Cash and investments with fiscal agents $ 1,815,137 $ 216,760 $ 7 $ - Prepaid items and deposits - 1,010 1,206 287,950
Total assets $ 1,815,137 $ 217,770 $ 1,213 $ 287,950

LIABILITIES AND

FUND BALANCES
Liabilities:

Accrued liabilities $ 291 $ - $ - $ -
Due to other funds - 1,010 1,206 287,950
Total liabilities 291 1,010 1,206 287,950
Fund Balances:

Nonspendable - 1,010 1,206 287,950
Restricted 1,814,846 215,750 - -
Unassigned (deficit) - (1,199) - (287,950)
Total fund balances (deficit) 1,814,846 216,760 7 -
Total liabilities and
fund balances $ 1,815,137 $ 217,770 $ 1,213 $ 287,950
City of Gardena
Combining Balance Sheet
All Debt Service Funds
June 30, 2023
146
2020 2021
Taxable Pension Lease
Obligation Obligation
Bonds Bonds Total
ASSETS
Cash and investments with fiscal agents $ 20,974 $ 11,754,403 $ 13,807,281 Prepaid items and deposits 917 417 291,500
Total assets $ 21,891 $ 11,754,820 $ 14,098,781

LIABILITIES AND

FUND BALANCES
Liabilities:

Due to other funds $ - $ - $ 291
Due to other funds 917 58,188 349,271
Total liabilities 917 58,188 349,562
Fund Balances:

Nonspendable 917 417 291,500
Restricted 20,057 11,696,215 13,746,868
Unassigned (deficit) - (289,149) -
Total fund balances (deficit) 20,974 11,696,632 13,749,219 Total liabilities and
fund balances $ 21,891 $ 11,754,820 $ 14,098,781
City of Gardena
Combining Balance Sheet (Continued)
All Debt Service Funds
June 30, 2023
147
2006 2007 2014 2017
Refunding Refunding Taxable Lease
COPs, Revenue Bonds Lease Revenue Financing
Series A SBRPCA Refunding Bonds Bonds
REVENUES:

Use of money and property $ 32,137 $ 5,664 $ 2 $ -
Total revenues 32,137 5,664 2 -
EXPENDITURES:

Debt service:

Principal retirement 625,000 120,000 65,000 280,000
Interest and fiscal charges 402,117 68,138 441,157 8,508 Total expenditures 1,027,117 188,138 506,157 288,508

REVENUES OVER
(UNDER) EXPENDITURES (994,980) (182,474) (506,155) (288,508) OTHER FINANCING SOURCES (USES):

Transfers in 1,034,463 218,850 506,157 288,508
Transfers out - - - -
Total other financing sources 1,034,463 218,850 506,157 288,508 CHANGES IN FUND BALANCES 39,483 36,376 2 -
FUND BALANCES:

Beginning of the year 1,775,363 180,384 5 -
End of the year $ 216,760 1,814,846 $ 7 $ - $
City of Gardena
Combining Schedule of Revenues, Expenditures, and Changes in Fund Balances All Debt Service Funds
For the Year Ended June 30, 2023
148
2020 2021
Taxable Pension Lease
Obligation Revenue
Bonds Bonds Total
REVENUES:

Use of money and property $ 20,949 $ 357,802 $ 416,554
Total revenues 20,949 357,802 416,554
EXPENDITURES:

Debt service:

Principal retirement 2,859,799 440,000 4,389,799
Interest and fiscal charges 2,295,930 500,083 3,715,933 Total expenditures 5,155,729 940,083 8,105,732

REVENUES OVER
(UNDER) EXPENDITURES (5,134,780) (582,281) (7,689,178)
OTHER FINANCING SOURCES (USES):

Transfers in 5,154,897 940,083 8,142,958
Transfers out (57,771) - (57,771)
Total other financing sources 5,154,897 882,312 8,085,187 CHANGES IN FUND BALANCES 20,117 300,031 396,009
FUND BALANCES:

Beginning of the year 11,396,601 857 13,353,210
End of the year $ 11,696,632 20,974 $ 13,749,219 $
City of Gardena
Combining Schedule of Revenues, Expenditures, and Changes in Fund Balances (Continued) All Debt Service Funds
For the Year Ended June 30, 2023
149
Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Use of money and property $ - - $ 32,137 $ 32,137 $
Total revenues - - 32,137 32,137
EXPENDITURES:

Debt Service:

Principal retirement 625,000 625,000 625,000 -
Interest and fiscal charges 401,340 401,340 402,117 (777) Total expenditures 1,026,340 1,026,340 1,027,117 (777)

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (1,026,340) (1,026,340) (994,980) 31,360 OTHER FINANCING SOURCES:

Transfers in 1,026,340 1,026,340 1,034,463 8,123
Total other financing sources 1,026,340 1,026,340 1,034,463 8,123 NET CHANGE IN FUND BALANCE $ - $ - 39,483 $ 39,483
FUND BALANCE:

Beginning of year 1,775,363
End of year $ 1,814,846
City of Gardena
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual 2006 Refunding COPs, Series A Debt Service Fund
For the Year Ended June 30, 2023
150
Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Use of money and property $ - $ - $ 5,664 $ 5,664
Total revenues - - 5,664 5,664
EXPENDITURES:

Debt Service:

Principal retirement 120,000 120,000 120,000 -
Interest and fiscal charges 68,545 68,545 68,138 407
Total expenditures 188,545 188,545 188,138 407

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (188,545) (188,545) (182,474) 6,071 OTHER FINANCING SOURCES:

Transfers in 188,545 188,545 218,850 30,305
Total other financing sources 188,545 188,545 218,850 30,305 NET CHANGE IN FUND BALANCE $ - $ - 36,376 $ 36,376
FUND BALANCE:

Beginning of year 180,384
End of year $ 216,760
City of Gardena
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual 2007 Refunding Revenue Bonds SBRPCA Debt Service Fund
For the Year Ended June 30, 2023
151
Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Use of money and property $ - $ - $ 2 $ 2
Total revenues - - 2 2
EXPENDITURES:

Debt Service:

Principal retirement 65,000 65,000 65,000 -
Interest and fiscal charges 441,011 441,011 441,157 (146) Total expenditures 506,011 506,011 506,157 (146)

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (506,011) (506,011) (506,155) (144) OTHER FINANCING SOURCES:

Transfers in 506,011 506,011 506,157 146
Total other financing sources 506,011 506,011 506,157 146 NET CHANGE IN FUND BALANCE $ - $ - 2 $ 2
FUND BALANCE:

Beginning of year 5
End of year $ 7
City of Gardena
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual 2014 Taxable Lease Revenue Refunding Bonds Debt Service Fund For the Year Ended June 30, 2023
152
Original Final Variance with
Budget Budget Actual Final Budget
EXPENDITURES:

Debt Service:

Principal retirement $ 280,000 $ 280,000 $ 280,000 $ -
Interest and fiscal charges 8,798 8,798 8,508 290
Total expenditures 288,798 288,798 288,508 290
OTHER FINANCING SOURCES:

Transfers in 288,798 288,798 288,508 (290)
Total other financing sources 288,798 288,798 288,508 (290) NET CHANGE IN FUND BALANCE $ - $ - - $ -
FUND BALANCE:

Beginning of year -
End of year $ -
City of Gardena
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual 2017 Lease Financing Bonds - Debt Service Fund
For the Year Ended June 30, 2023
153
Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Use of money and property $ 4,020 $ 4,020 $ 20,949 $ 16,929 Intra governmental reimbursements 5,151,543 5,151,543 (5,151,543) - Total revenues 5,155,563 5,155,563 20,949 (5,134,614)
EXPENDITURES:

Debt Service:

Principal retirement 2,859,800 2,859,250 2,859,799 (549) Interest and fiscal charges 2,295,763 2,296,313 2,295,930 383 Total expenditures 5,155,563 5,155,563 5,155,729 (166)

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES - (5,134,780) - (5,134,780)
OTHER FINANCING SOURCES:

Transfers in - 5,154,897 - 5,154,897
Total other financing sources - 5,154,897 - 5,154,897
NET CHANGE IN FUND BALANCE $ - $ - 20,117 $ 20,117
FUND BALANCE:

Beginning of year 857
End of year $ 20,974
City of Gardena
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual 2020 Taxable Pension Obligation Bonds Debt Service Fund For the Year Ended June 30, 2023
154
Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Use of money and property $ - $ - $ 357,802 $ 357,802
Total revenues - - 357,802 357,802
EXPENDITURES:

Debt Service:

Principal retirement 440,000 440,000 440,000 -
Interest and fiscal charges 500,500 500,500 500,083 417 Total expenditures 940,500 940,500 940,083 417

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (940,500) (940,500) (582,281) 358,219 OTHER FINANCING SOURCES:

Transfers in 940,500 940,500 940,083 (417)
Transfers out (6,020,000) (6,020,000) (57,771) 5,962,229 Total other financing sources (5,079,500) (5,079,500) 882,312 5,961,812 NET CHANGE IN FUND BALANCE $ (6,020,000) $ (6,020,000) 300,031 $ 6,320,031 FUND BALANCE:

Beginning of year 11,396,601
End of year $ 11,696,632
City of Gardena
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual 2021 Lease Revenue Bonds
For the Year Ended June 30, 2023
155
City of Gardena
Annual Comprehensive Financial Report
For the Year Ended June 30, 2023
(This page is intentionally left blank)
156
Liability Insurance Fund - To finance and account for the City's general liability claims program.

Workers' Compensation Fund - To finance and account for the workers' compensation claims program.

Health Benefit Fund - To finance and account for the health benefit claims program.

INTERNAL SERVICE FUNDS
The Internal Service Fund accounts for financing of goods and services provided by one department to other departments of the City on a cost-reimbursement basis.

Internal Service Funds include:
157
City of Gardena
Annual Comprehensive Financial Report
For the Year Ended June 30, 2023
(This page is intentionally left blank)
158
Liability Workers' Health
Insurance Compensation Benefit Total
ASSETS
Current Assets:

Cash and investments 4,637,227 $ 2,724,577 $ 5,116,252 $ 12,478,056 $ Accounts receivables 5,735 - - 5,735
Prepaid items and deposits 1,625 2,146 11,606 15,377
Total current assets 2,726,723 4,644,587 5,127,858 12,499,168 Total assets 2,726,723 4,644,587 5,127,858 12,499,168

LIABILITIES
Current liabilities:

Accounts payable 93,410 736 1,814 95,960
Accrued liabilities 257,537 32,112 23,441 313,090
Claims payable - due within one year 1,308,000 2,827,000 676,358 4,811,358 Total current liabilities 2,859,848 1,658,947 701,613 5,220,408 Noncurrent liabilities:

Claims payable - due in more than one year 11,360,000 2,169,000 - 13,529,000 Total noncurrent liabilities 11,360,000 2,169,000 - 13,529,000 Total liabilities 14,219,848 3,827,947 701,613 18,749,408

NET POSITION
Unrestricted (deficit) 816,640 (11,493,125) 4,426,245 (6,250,240) Total net position (deficit) $ (11,493,125) 816,640 $ 4,426,245 $ (6,250,240) $ City of Gardena
Combining Statement of Net Position
Internal Service Funds
June 30, 2023
159
Liability Workers' Health
Insurance Compensation Benefit Total
OPERATING REVENUES:

Charges for services 1,903,564 $ 1,791,688 $ 9,997,704 $ 13,692,956 $ Other 1,317,192 37,837 147,218 1,502,247
Total operating revenues 1,829,525 3,220,756 10,144,922 15,195,203 OPERATING EXPENSES:

Insurance claims 2,406,348 3,349,888 2,914,716 8,670,952 General and administrative 877,448 462,670 5,415,105 6,755,223 Other operating expenses 51,273 87,705 104,162 243,140
Total operating expenses 3,900,263 3,335,069 8,433,983 15,669,315 OPERATING INCOME (LOSS) (114,313) (2,070,738) 1,710,939 (474,112) NONOPERATING REVENUES:

Interest income 35,551 38,548 112,687 186,786
Total nonoperating revenues 35,551 38,548 112,687 186,786 INCOME (LOSS) BEFORE TRANSFERS (78,762) (2,032,190) 1,823,626 (287,326) TRANSFERS:

Transfers in 1,856,821 1,130,031 2,986,852 -
Transfers out (1,583) (3,933) (1,636,852) (1,642,368)
Total transfers 1,855,238 1,126,098 (1,636,852) 1,344,484 CHANGES IN NET POSITION 1,776,476 (906,092) 186,774 1,057,158 NET POSITION (DEFICIT):

Beginning of year (959,836) (10,587,033) 4,239,471 (7,307,398) End of year $ 816,640 $ (11,493,125) $ 4,426,245 $ (6,250,240) City of Gardena
Combining Statement of Revenues, Expenses, and Changes in Net Position Internal Service Funds
For the Year Ended June 30, 2023
160
Liability Workers' Health
Insurance Compensation Benefit Total
CASH FLOWS FROM OPERATING ACTIVITIES:

Receipts from users 1,903,564 $ 1,991,688 $ 9,997,704 $ 13,892,956 $ Receipts from claims recoveries 1,317,192 37,837 147,218 1,502,247 Payments for insurance claims (1,879,061) (2,352,946) (2,902,212) (7,134,219) Payments to suppliers (1,326,468) (539,235) (5,633,732) (7,499,435) Net cash provided by (used in) operating activities (862,656) 15,227 1,608,978 761,549

CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES:

Transfers from other funds 1,130,031 1,856,821 - 2,986,852 Transfers to other funds (3,933) (1,583) (1,636,852) (1,642,368) Net cash provided by (used in)
noncapital financing activities 1,126,098 1,855,238 (1,636,852) 1,344,484 CASH FLOWS FROM INVESTING ACTIVITIES:

Interest received 38,548 35,551 112,687 186,786
Net cash provided by investing activities 38,548 35,551 112,687 186,786 Net change in cash and cash equivalents 1,906,016 301,990 84,813 2,292,819 CASH AND CASH EQUIVALENTS:

Beginning of year 2,731,211 2,422,587 5,031,439 10,185,237 End of year $ 4,637,227 $ 2,724,577 $ 5,116,252 $ 12,478,056

RECONCILIATION OF OPERATING INCOME
(LOSS) TO NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES:

Operating income (loss) $ (114,313) $ (2,070,738) $ 1,710,939 $ (474,112) Adjustments to reconcile operating income (loss) to
net cash provided by (used in) operating activities:
(Increase)decrease in accounts receivable 200,000 - 200,000 - (Increase)decrease in prepaid items and deposits (1,315) - (7,558) (8,873) Increase (decrease) in accounts payable (152,517) (6,125) 1,814 (156,828) Increase (decrease) in accrued liabilities (243,915) 17,265 (93,026) (319,676) Increase (decrease) in deposits payable - - (15,695) (15,695) Increase (decrease) in claims payable 527,287 996,942 12,504 1,536,733 Total adjustment 129,540 1,208,082 (101,961) 1,235,661
Net cash provided by (used in) operating activities $ (862,656) 15,227 $ 1,608,978 $ 761,549 $ City of Gardena
Combining Statement of Cash Flows
Internal Service Funds
For the Year Ended June 30, 2023
161
City of Gardena
Annual Comprehensive Financial Report
For the Year Ended June 30, 2023
(This page is intentionally left blank)
162

STATISTICAL SECTION
Fiscal Year 2022-23
163

STATISTICAL SECTION
Fiscal Year 2022-23
(This page is intentionally left blank)
164
Page
Financial Trends - These tables contain trend information that may assist the reader in the City's current financial performance by placing it in historical perspective.
- Net Position by Component 166
- Changes in Net Position 168
- Fund Balances of Governmental Funds 172
- Changes in Fund Balances - Governmental Funds 174
Revenue Capacity - These tables contain information that may help in assessing the viability of the City's most significant revenue sources, the property and sales taxes. - Governmental Revenues by Sources 176
- General Governmental Expenditures by Function 178
- Assessed Valuation and Actual Value of Taxable Property 180 - Assessed Value of Property by User Code 182
- Assessed Value and Estimated Value of Taxable Property 184 - Construction and Bank Deposits 186
- Property Tax Rates - All Overlapping Governments 188
- Direct and Overlapping Property Tax Rates 190
- Ten Largest Property Taxpayers 192
- Top 25 Sales Tax Producers 193
- Property Tax Levies, Tax Collections, and Delinquency 194 - Card Club Gross Revenue Fee 195
- Utility Users Tax Received 196
- Taxable Sales by Category 197
Debt Capacity - These tables present information that may assist the reader in analyzing the affordability of the City's current levels of outstanding debt and the City's ability to issue debt in the future. - Ratio of Outstanding Debt by Type 198
- Pledged - Revenue Coverage 201
- Ratio of General Bonded Debt Outstanding 202
- Direct and Overlapping Bonded Debt 203
- Legal Debt Margin Information 204
- Debt Service Payment Schedule 206
Demographic and Economic Information - These tables offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place. - Demographic and Economic Statistics 209
- Ten Principal Employers 210
- Unemployment Rates 211
Operating Information - These tables contain service and infrastructure indicators that can inform one's understanding how the information in the City's financial statements relate to the services the City provides and the activities it performs.
- Full-Time and Part-Time City Employees by Function 212 - Employee Union Representation 213
- Operating Indicators 214
- Capital Asset Statistics by Function 215

CONTENTS

CITY OF GARDENA

STATISTICAL SECTION
Fiscal Year 2022-23
This part of the City of Gardena's annual comprehensive financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information say about the government's overall financial health.
165
2022-23 2021-22 2020-21 2019-20 2018-19
Governmental Activities
Net Investment in Capital Assets $ 43,557,695 $ 40,126,502 $ 28,550,313 $ 30,055,713 $ 47,404,733 Restricted for:

Debt Service 1,994,718 1,617,913 1,681,507 1,708,162 1,669,313 Employment and Training Services - - - - -
Law Enforcement 1,414,499 1,459,666 1,593,265 1,080,052 1,344,114 Local Street Improvements 14,126,722 10,385,580 9,329,940 7,956,523 7,130,678 Economic Development 6,965,240 6,914,470 5,783,794 4,393,701 5,306,507 Capital Projects 301,897 273,887 273,887 273,887 295,912 Other Purposes 1,219,550 1,014,200 662,807 689,290 657,424 Specific Projects and Programs - - - - -
Total Restricted: 26,022,626 21,665,716 19,325,200 16,101,615 16,403,948 Unrestricted(2) (115,019,564) (95,499,040) (114,185,399) (126,640,099) (131,787,090) Total governmental activities net position ($45,439,243) ($33,706,822) ($66,309,886) ($80,482,771) ($67,978,409) Business-type Activities
Net Investment in Capital Assets $59,138,198 $59,701,427 $60,014,796 $50,474,813 $53,054,448 Unrestricted(2) (32,642,965) (33,216,568) (34,052,901) (32,350,671) (29,646,082) Total business-type activities net position $26,495,233 $26,484,859 $25,961,895 $18,124,142 $23,408,366 Primary Government
Net Investment in Capital Assets $102,695,893 $99,827,929 $88,565,109 $80,530,526 $100,459,181 Restricted 26,022,626 21,665,716 19,325,200 16,101,615 16,403,948 Unrestricted(2) (147,662,529) (128,715,608) (148,238,300) (158,990,770) (161,433,172) Total Primary Government Net Position: (18,944,010) $ (7,221,963) $ (40,347,991) $ (62,358,629) $ (44,570,043) $ NOTE: (1) Accounting standards require that net position be reported in three components in the financial statements: net investment in capital assets, restricted, and unrestricted. Net position are considered restricted only when (1) an external party, such as the State of California or the federal government, places a restriction on how the revenues may be used, or (2) enabling legislation is enacted by the City.

Fiscal Year
City of Gardena
Net Position by Component (1)
Last Ten Fiscal Years Ended June 30, 2023
(accrual basis of accounting)
Source: City of Gardena, Administrative Services Department - Finance Division 166
2017-18(2) 2016-17 2015-16 2014-15 2013-14
Governmental Activities
Net Investment in Capital Assets 27,748,135 $ 28,138,906 $ 27,897,717 $ 26,430,711 $ 21,675,303 $ Restricted for:

Debt Service 1,916,945 1,924,432 2,679,363 2,965,697 3,471,506 Employment and Training Services 5,287 43,611 164,116 300,190 397,593 Law Enforcement 921,976 914,062 1,251,314 1,701,810 2,186,672 Local Street Improvements 6,060,770 6,205,701 7,072,378 7,930,518 7,049,906 Local Street Improvements 6,006,024 1,986,202 2,394,395 2,292,714 - Economic Development 571,089 295,912 301,546 - -
Other Purposes 633,275 651,830 289,859 447,605 478,453
Specific Projects and Programs - - - - -
Total Restricted: 16,115,366 12,021,750 14,152,971 15,638,534 13,584,130 Unrestricted (107,886,487) (99,400,392) (60,913,888) (67,531,463) (64,355,607) Total governmental activities net position ($64,022,986) ($59,239,736) ($18,863,200) ($25,462,218) ($29,096,174) Business-type Activities
Net Investment in Capital Assets $56,261,253 $60,150,166 $62,151,750 $67,684,810 $70,809,060 Unrestricted (27,969,730) (27,390,162) (21,068,543) (18,107,410) (15,654,544) Total business-type activities net position $28,291,523 $32,760,004 $41,083,207 $49,577,400 $55,154,516 Primary Government
Net Investment in Capital Assets $84,009,388 $88,289,072 $90,049,467 $94,115,521 $92,484,363 Restricted 16,115,366 12,021,750 14,152,971 15,638,534 13,584,130 Unrestricted (135,817,893) (126,790,554) (81,982,431) (85,638,873) (79,990,151) Total Primary Government Net Position: (35,693,139) $ (26,479,732) $ 22,220,007 $ 24,115,182 $ 26,078,342 $ NOTE: (1) Accounting standards require that net position be reported in three components in the financial statements: net investment in capital assets, restricted, and unrestricted. Net position are considered restricted only when (1) an external party, such as the State of California or the federal government, places a restriction on how the revenues may be used, or (2) enabling legislation is enacted by the City.
(2) 2017 balances were restated due to implementation of GASB 75 Fiscal Year
City of Gardena
Net Position by Component (Continued) (1)
Last Ten Fiscal Years Ended June 30, 2023
(accrual basis of accounting)
Source: City of Gardena, Administrative Services Department - Finance Division 167
2022-23 2021-22 2020-21 2019-20 2018-19
Expenses
Governmental Activities
General Government $ 7,470,021 $ 7,771,663 $ 7,807,099 $ 7,383,173 $ 8,609,254 Public Safety 77,971,300 27,964,662 47,363,640 47,760,821 43,617,238 Public Works 10,737,606 11,239,762 7,543,698 10,958,845 11,717,321 Recreation and Human Services 8,229,820 7,566,226 6,766,739 6,600,989 6,395,004 Community Development 2,266,794 5,946,949 2,986,934 2,692,644 2,662,554 Interest and fiscal charges 3,773,164 3,888,463 2,532,013 1,156,041 1,191,118 Total governmental activities expenses: 110,448,705 64,377,725 75,000,123 76,552,513 74,192,489 Business-type Activities
GTrans 28,643,376 27,966,497 29,505,837 31,024,629 28,646,739 Sewer 1,466,607 1,423,680 1,190,734 1,651,788 1,512,189 Total business-type activities expenses: 30,109,983 29,390,177 30,696,571 32,676,417 30,158,928 Total primary government expenses: 140,558,688 93,767,902 105,696,694 109,228,930 104,351,417 Program Revenues
Governmental Activities
Charges for services:

General Government 4,149,501 8,769,328 5,333,187 4,072,004 4,107,289 Public Safety 1,251,096 1,236,057 1,240,360 1,338,121 1,862,764 Public Works 396,408 534,045 378,834 351,732 351,463
Recreation and Human Services 3,647,400 3,647,094 2,750,536 3,801,562 2,962,339 Community Development 2,521,913 3,139,836 2,499,553 2,246,297 1,687,652 Interest and fiscal charges - - - - -
Operating Grants and Contributions 5,814,708 4,081,043 14,663,306 3,351,864 3,142,207 Capital Grants and Contributions 3,329,828 2,511,878 3,017,989 1,621,611 2,037,030 Total governmental activities program revenues: 21,110,854 23,919,281 29,883,765 16,783,191 16,150,744 Business-type Activities
Charges for services:

GTrans 1,793,580 1,643,970 135,875 1,766,952 2,382,758
Sewer 2,473,501 2,610,910 2,685,365 2,323,753 2,016,346 Operating Grants and Contributions 22,744,442 22,018,364 20,725,314 21,277,188 20,612,788 Capital Grants and Contributions 3,186,920 3,915,704 14,856,026 1,962,998 1,086,741 Total business-type activities program revenues: 30,198,443 30,188,948 38,402,580 27,330,891 26,098,633 Total primary government revenues: $ 51,309,297 $ 54,108,229 $ 68,286,345 $ 44,114,082 $ 42,249,377 City of Gardena
Changes in Net Position
Last Ten Fiscal Years Ended June 30, 2023
(accrual basis of accounting)
Fiscal Year
Source: City of Gardena, Administrative Services Department - Finance Division 168
2017-18 2016-17 2015-16 2014-15 2013-14
Expenses
Governmental Activities
General Government 6,177,468 $ 5,848,247 $ 5,730,664 $ 6,239,825 $ 11,808,280 $ Public Safety 41,420,762 38,700,824 36,304,203 35,912,110 32,551,301 Public Works 7,120,106 6,956,766 8,545,467 9,846,657 10,300,134 Recreation and Human Services 9,742,993 9,154,921 6,777,838 6,677,536 6,147,992 Community Development 2,938,656 2,796,216 2,538,835 2,675,341 7,470,002 Interest and fiscal charges 1,241,054 1,382,078 1,365,398 1,805,649 1,466,193 Total governmental activities expenses: 68,641,039 64,839,052 61,262,405 63,157,118 69,743,902 Business-type Activities
GTrans 27,804,739 28,195,640 26,410,211 26,643,082 23,188,943 Sewer 1,432,695 1,760,303 1,046,864 1,021,131 849,779
Total business-type activities expenses: 29,237,434 29,955,943 27,457,075 27,664,213 24,038,722 Total primary government expenses: 97,878,473 94,794,995 88,719,480 90,821,331 93,782,624 Program Revenues
Governmental Activities
Charges for services:

General Government 3,864,795 3,504,735 3,298,306 3,022,929 3,013,410 Public Safety 1,312,945 1,422,001 1,174,116 1,337,761 1,404,006 Public Works 418,667 615,289 513,495 340,541 384,600
Recreation and Human Services 2,685,240 2,979,625 2,315,212 2,238,445 2,092,788 Community Development 1,724,501 1,771,754 2,187,082 1,432,560 2,922,090 Interest and fiscal charges - - - - -
Operating Grants and Contributions 3,719,048 2,048,938 2,067,123 2,963,405 7,092,380 Capital Grants and Contributions 2,002,799 1,268,576 1,918,489 7,167,801 3,531,787 Total governmental activities program revenues: 15,727,995 13,610,918 13,473,823 18,503,442 20,441,061 Business-type Activities
Charges for services:

GTrans 2,459,105 2,482,516 2,685,573 3,346,233 3,434,257 Sewer 1,790,296 954,552 673,199 727,054 922,304
Operating Grants and Contributions 19,855,368 17,462,145 16,905,476 17,353,740 15,518,103 Capital Grants and Contributions 576,031 3,120,351 1,850,968 832,350 1,470,222 Total business-type activities program revenues: 24,680,800 24,019,564 22,115,216 22,259,377 21,344,886 Total primary government revenues: 40,408,795 $ 37,630,482 $ 35,589,039 $ 40,762,819 $ 41,785,947 $ City of Gardena
Fiscal Year
Changes in Net Position (Continued)
Last Ten Fiscal Years Ended June 30, 2023
(accrual basis of accounting)
Source: City of Gardena, Administrative Services Department - Finance Division 169
2022-23 2021-22 2020-21 2019-20 2018-19
Net (expense)/revenue: (1)
Governmental activities (89,337,851) (40,458,444) (46,089,053) (59,769,322) (58,041,745) Business-type activities 88,460 798,771 7,676,625 (5,345,526) (4,060,295) Total net revenues (expenses): (89,249,391) (39,659,673) (38,412,428) (65,114,848) (62,102,040) General Revenue and Other Changes in Net Position
Governmental activities
Taxes:

Property taxes 9,985,883 9,186,838 8,799,364 8,205,539 7,735,545 Sales tax 29,662,286 27,908,699 23,760,125 12,440,147 13,466,178 Business license 2,733,939 2,647,094 2,508,287 2,438,304 2,843,375 Utility user taxes 6,317,851 5,481,395 4,970,799 4,801,229 4,955,645 Franchise taxes 3,275,380 3,075,659 2,809,101 2,816,277 2,777,572 Card club taxes 8,633,144 10,544,947 3,999,147 4,874,457 8,101,583 Other taxes 5,882,066 4,626,009 3,764,716 3,920,393 4,354,725 Vehicle license - unrestricted 8,073,890 7,485,678 7,203,563 6,788,130 6,378,321 Investment income 1,881,428 (1,520,476) (57,164) 1,036,057 1,061,732 Miscellaneous 643,709 3,281,484 2,730,183 690,353 1,384,272 Gain on sale of assets - - (190,979) (863,795) 10,622
Transfers 515,854 344,181 (35,204) 117,869 978,428
Total governmental activities 77,605,430 73,061,508 60,261,938 47,264,960 54,047,998 Business-type activities
Investment income 437,768 68,374 125,924 162,760 155,566 Miscellaneous - - - - -
Gain (loss) on sale of assets - - - 16,411 -
Transfers (515,854) (344,181) 35,204 (117,869) (978,428) Total business-type activities: (78,086) (275,807) 161,128 61,302 (822,862) Total primary government: 77,527,344 72,785,701 60,423,066 47,326,262 53,225,136 Change in Net Position
Governmental activities (11,732,421) 32,603,064 14,172,885 (12,504,362) (3,993,747) Business-type activities 10,374 522,964 7,837,753 (5,284,224) (4,883,157) Total primary government: (11,722,047) $ 33,126,028 $ 22,010,638 $ (17,788,586) $ (8,876,904) $ (1) Net (expense)/revenue is the difference between the expenses and program revenues of a function or program. It indicates the degree to which a function or program is supported with its own fees and program specific grants versus its reliance upon funding from taxes and other general revenues.
-A number in parentheses are net expenses, indicating that expenses were greater than program revenues and therefore, general revenues were needed to finance that function or program. -Numbers without parentheses are net revenues, meaning that program revenues were more than sufficient to cover expenses.

City of Gardena
Fiscal Year
Changes in Net Position (Continued)
Last Ten Fiscal Years Ended June 30, 2023
(accrual basis of accounting)
Source: City of Gardena, Administrative Services Department - Finance Division 170
2017-18 2016-17 2015-16 2014-15 2013-14
Net (expense)/revenue: (1)
Governmental activities (52,913,044) (51,228,234) (47,788,582) (44,653,676) (49,302,841) Business-type activities (4,556,634) (5,936,379) (5,341,859) (5,404,836) (2,693,836) Total net revenues (expenses): (57,469,678) (57,164,613) (53,130,441) (50,058,512) (51,996,677) General Revenue and Other Changes in Net Position
Governmental activities
Taxes:

Property taxes 7,150,957 7,130,426 6,729,849 6,402,520 6,192,249 Sales tax 11,006,901 11,204,697 11,227,326 9,965,476 9,472,341 Business license 2,727,532 2,606,279 2,536,438 2,547,148 2,218,097 Utility user taxes 5,088,450 5,147,736 5,212,410 5,335,375 5,383,285 Franchise taxes 2,609,219 2,440,108 2,534,820 2,417,342 2,351,576 Card club taxes 8,071,001 8,975,991 9,057,202 9,517,550 9,467,078 Other taxes 3,985,315 3,855,705 3,479,372 3,136,222 2,965,176 Vehicle license - unrestricted 5,994,920 5,677,909 5,445,385 5,166,984 4,958,745 Investment income 158,902 129,187 499,279 248,773 270,187 Miscellaneous 1,134,729 2,261,772 2,566,919 3,329,396 2,643,424 Gain on sale of assets 201,560 883,201 1,877,151 - -
Transfers 38,632 9,898 3,221,449 200,846 408,925
Total governmental activities 48,168,118 50,322,909 54,387,600 48,267,632 46,331,083 Business-type activities
Investment income 124,243 77,618 55,492 24,196 11,333
Miscellaneous 2,542 18,512 13,623 4,370 2,733
Gain (loss) on sale of assets - - - - (2,600,806)
Transfers (38,632) (9,898) (3,221,449) (200,846) (408,925) Total business-type activities: 88,153 86,232 (3,152,334) (172,280) (2,995,665) Total primary government: 48,256,271 50,409,141 51,235,266 48,095,352 43,335,418 Change in Net Position
Governmental activities (4,744,926) (905,325) 6,599,018 3,613,956 (2,971,758) Business-type activities (4,468,481) (5,850,147) (8,494,193) (5,577,116) (5,689,501) Total primary government: (9,213,407) $ (6,755,472) $ (1,895,175) $ (1,963,160) $ (8,661,259) $ (1) Net (expense)/revenue is the difference between the expenses and program revenues of a function or program. It indicates the degree to which a function or program is supported with its own fees and program specific grants versus its reliance upon funding from taxes and other general revenues.
-A number in parentheses are net expenses, indicating that expenses were greater than program revenues and therefore, general revenues were needed to finance that function or program. -Numbers without parentheses are net revenues, meaning that program revenues were more than sufficient to cover expenses.

City of Gardena
Changes in Net Position (Continued)
Last Ten Fiscal Years Ended June 30, 2023
(accrual basis of accounting)
Fiscal Year
Source: City of Gardena, Administrative Services Department - Finance Division 171
2022-23 2021-22 2020-21 2019-20 2018-19
General Fund
Nonspendable (1) $ 352,425 327,406 $ 1,214,022 $ $ 302,361 $ 333,803 Restricted (1) - - - - -
Committed (1) 26,936,620 26,848,674 18,697,703 7,310,676 13,287,448 Assigned (1) 14,236,728 22,662,517 8,670,503 2,848,416 2,622,256 Unassigned (1) 300,001 300,000 200,000 173,122 271,377
Total General Fund: $50,138,597 $41,825,774 $28,782,228 $10,634,575 $16,514,884 All Other Governmental Funds
Nonspendable (1) $ 329,979 311,097 $ 342,428 $ $ 350,432 $ 308,741 Restricted (1) 31,699,951 36,402,832 16,660,769 15,682,481 16,089,466 Committed (1) - - - - -
Assigned (1) - - - - -
Unassigned (1) (347,129) (185,700) (1,298,092) (81,218) - Total all other governmental funds: $ 36,366,800 $ 31,844,230 $ 15,705,105 $ 15,951,695 $ 16,398,207 NOTES:
(1) New reporting requirements per GASB 54.

Source: City of Gardena, Administrative Services Department - Finance Division Fiscal Year
City of Gardena
Fund Balances of Governmental Funds
Last Ten Fiscal Years Ended June 30, 2023
(modified accrual basis of accounting)
General Fund

57.96%
All Other
Governmental
Funds

49.82%
Fund Balances
Fiscal Year Ended June 30, 2023
172
2017-18 2016-17 2015-16 2014-15 2013-14
General Fund
Nonspendable (1) $ 294,133 385,931 $ 189,819 $ 179,244 $ 181,457 $ Restricted (1) 5,287 43,611 164,116 327,752 57,980
Committed (1) 19,315,675 19,413,135 17,542,367 7,274,423 7,274,423 Assigned (1) 3,609,547 3,936,266 2,773,686 7,579,856 4,357,472 Unassigned (1) 200,000 200,000 200,000 400,362 238,582
Total General Fund: $23,516,440 $23,887,145 $20,869,988 $15,761,637 $12,109,914 All Other Governmental Funds
Nonspendable (1) $ - 16,769,655 $ - $ 4,734 $ - $
Restricted (1) 10,073,376 11,726,127 13,048,054 13,526,150 - Committed (1) 3,765,323 3,776,154 3,051,323 2,658,379 - Assigned (1) - - (20,809) 179,079 377,900
Assigned (1) - - - - -
Total all other governmental funds: $ 16,769,655 $ 13,838,699 $ 15,481,472 $ 16,283,190 $ 16,562,429 NOTES:
(1) New reporting requirements per GASB 54.

Source: City of Gardena, Administrative Services Department - Finance Division Fiscal Year
City of Gardena
Fund Balances of Governmental Funds (Continued)
Last Ten Fiscal Years Ended June 30, 2023
(modified accrual basis of accounting)

15.90 16.28

15.48 13.84

16.77 16.40

15.95 15.71

31.84 0.00
0 5
10 15
20 25
30 35
2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 (in Millions)
Fiscal Year
Fund Balances
All Other Governmental Funds
Last Ten Fiscal Years
173
2022-23 2021-22 2020-21 (2) 2019-20 2018-19
Revenues:

Taxes $ 74,247,538 $ 70,663,462 $ 57,968,745 $ 46,128,710 $ 50,827,680 Licenses and permits 2,158,749 2,900,062 2,389,538 1,646,059 1,735,711 Use of money and property 1,881,431 (1,517,780) (56,416) 1,036,059 1,061,734 Intergovernmental 12,265,983 13,689,853 16,142,006 7,157,208 7,409,245 Fines, forfeitures, and penalties 1,235,414 3,660,686 3,168,468 1,112,890 2,261,549 Charges for services 5,723,983 5,448,044 5,188,250 6,142,402 5,270,787 Miscellaneous 720,310 5,245,065 1,664,391 831,773 892,283 Total Revenues: 98,233,408 100,089,392 86,464,982 64,055,101 69,458,989 Expenditures:

Current:

General government 6,208,151 5,296,661 5,325,270 6,576,421 6,004,196 Public safety 42,327,977 41,545,473 37,558,085 41,295,066 45,783,773 Public works 8,435,997 7,868,811 6,776,073 8,372,502 8,058,427 Recreation and Human resources 8,221,690 7,318,062 6,232,436 6,155,882 6,138,238 Community development 2,837,108 3,061,632 2,789,072 2,474,928 2,382,263 Capital outlay 8,816,842 8,929,107 5,199,699 3,636,782 6,127,264 Debt service:

Principal 5,052,989 3,850,985 1,173,158 967,696 902,804 Interest and fiscal charges 3,750,867 3,899,642 2,340,735 1,155,814 1,198,262 Total Expenditures: 85,651,621 81,770,373 67,394,528 70,635,091 76,595,227 Excess of Revenues over (under) Expenditures 12,581,787 18,319,019 19,070,454 (6,579,990) (7,136,238) Other Financing Sources (Uses):

Proceeds of long-term debt - - - - -
Proceeds from sale of assets 34,093 127,623 3,492 46,241 16,413 Proceeds from debt issuance 15,391,848 - 79,193,585 - - Issuance of capital leases - - - - -
Costs of Bond issuance - - - - -
Contribution to pension trust - (78,731,264) - - -
Issuance of new debt 1,048,143 - - - -
Issuance discount - - - - -
Issuance of loans - - - 86,223 86,223
Transfers in 18,089,299 16,400,118 12,724,862 7,476,706 9,013,583 Transfers out (18,917,929) (21,055,937) (14,360,066) (7,356,001) (8,350,155) Total Other Financing Sources (Uses): 253,606 10,863,652 (1,169,391) 253,169 766,064 Net change in fund balances $ 12,835,393 $ 29,182,671 $ 17,901,063 $ (6,326,821) $ (6,370,174) Debt service as a percentage of
noncapital expenditures: (1) 10.41% 9.66% 5.39% 3.14% 2.87% NOTE:
(1) Ratio is calculated by dividing total debt service expenditures by total non-capital expenditures (difference between total expenditures and capitalized capital outlay expenditures) (2) Cost of bond issuance was reclassified into interest and fiscal charges from other financing uses Source: City of Gardena, Administrative Services Department - Finance Division Fiscal Year
City of Gardena
(modified accrual basis of accounting)
Last Ten Fiscal Years Ended June 30, 2023
Changes In Fund Balances - Governmental Funds
174
2017-18 2016-17 2015-16 2014-15 2013-14
Revenues:

Taxes 47,527,518 $ 46,847,209 $ 46,222,802 $ 44,488,617 $ 43,008,547 $ Licenses and permits 1,694,670 1,800,752 1,521,379 1,109,169 1,023,180 Use of money and property 158,902 129,186 499,278 248,773 270,187 Intergovernmental 6,201,645 5,549,872 5,705,627 11,575,383 11,983,118 Fines, forfeitures, and penalties 1,124,079 1,102,235 1,794,049 1,433,758 1,226,243 Charges for services 5,070,020 5,155,573 4,545,874 4,208,616 4,146,210 Miscellaneous 1,197,011 2,944,050 1,807,155 3,141,148 2,754,989 Total Revenues: 62,973,845 63,528,877 62,096,164 66,205,464 64,412,474 Expenditures:

Current:

General government 5,025,047 4,914,416 4,886,467 5,108,064 4,938,101 Public safety 37,851,314 36,977,198 34,674,068 32,542,544 32,069,172 Public works 4,012,134 4,064,485 5,584,816 5,352,388 5,395,817 Recreation and Human resources 9,194,054 8,631,034 6,498,830 6,135,402 6,086,777 Community development 2,734,299 2,757,861 2,533,734 2,594,007 7,499,226 Capital outlay 3,794,206 3,349,481 8,332,649 8,064,783 6,075,302 Debt service:

Principal 627,898 2,703,105 754,158 9,228,535 844,172
Interest and fiscal charges 1,227,659 1,431,641 1,369,936 2,029,383 1,482,716 Total Expenditures: 64,466,611 64,829,221 64,634,658 71,055,106 64,391,283 Excess of Revenues over (under) Expenditures (1,492,766) (1,300,344) (2,538,494) (4,849,642) 21,191 Other Financing Sources (Uses):

Proceeds of long-term debt - - - - 2,521,577
Proceeds from sale of property 423,735 1,024,538 4,990,156 - - Proceeds from debt issuance - - - - -
Issuance of capital leases - - - - 201,829
Costs of Bond issuance - - - - -
Contribution to pension trust - - - - -
Issuance of new debt - 1,635,000 - 9,110,000 -
Issuance discount - - - (297,460) -
Issuance of loans 86,223 86,223 311,026 408,740 -
Transfers in 6,747,282 6,487,933 11,143,623 10,368,953 7,765,591 Transfers out (6,708,650) (6,558,966) (9,599,678) (11,368,107) (7,994,802) Total Other Financing Sources (Uses): 548,590 2,674,728 6,845,127 8,222,126 2,494,195 Net change in fund balances (944,176) $ 1,374,384 $ 4,306,633 $ 3,372,484 $ 2,515,386 $ Debt service as a percentage of
noncapital expenditures: (1) 3.03% 6.64% 3.51% 17.16% 3.81% NOTE:
(1) Ratio is calculated by dividing total debt service expenditures by total non-capital expenditures (difference between total expenditures and capitalized capital outlay expenditures) Source: City of Gardena, Administrative Services Department - Finance Division Fiscal Year
City of Gardena
Changes In Fund Balances - Governmental Funds (Continued) Last Ten Fiscal Years Ended June 30, 2023
(modified accrual basis of accounting)
175
Permits, Fines Uses of
Fiscal Licenses and Money and
Year Taxes and Fees Forfeitures Property
2013-14 43,008,547 1,023,180 1,226,243 270,187
2014-15 44,488,617 1,109,169 1,433,758 248,773
2015-16 46,222,802 1,521,379 1,794,049 499,278
2016-17 46,847,209 1,800,752 1,102,235 129,186
2017-18 47,527,518 1,694,670 1,124,079 158,902
2018-19 50,827,680 1,735,711 2,261,549 1,061,734
2019-20 46,128,710 1,646,059 1,112,890 1,036,059
2020-21 57,968,745 2,389,538 3,168,468 (56,416)
2021-22 70,663,462 2,900,062 3,660,686 (1,517,780)
2022-23 74,247,538 2,158,749 1,235,414 1,881,431
Source: City of Gardena, Administrative Services Department - Finance Division City of Gardena
Governmental Revenues By Sources
Last Ten Fiscal Years
Taxes

75.58%
Permits/Licenses

2.20%
Fine/Forfeitures

1.26%
Use of
Money/Property

1.92%
Inter-Governmental

8.74% Service Charges

5.83%
Other Revenue

0.73%
General Revenues by Sources
Fiscal Year Ended June 30, 2023
176
Charges
Fiscal Inter- for Other
Year Governmental Services Revenues Total
2013-14 11,983,118 4,146,210 2,754,989 64,412,474
2014-15 11,575,383 4,208,616 3,141,148 66,205,464
2015-16 5,705,627 4,545,874 1,807,155 62,096,164
2016-17 5,549,872 5,155,573 2,944,050 63,528,877
2017-18 6,201,645 5,070,020 1,197,011 62,973,845
2018-19 7,409,245 5,270,787 892,283 69,458,989
2019-20 7,157,208 6,142,402 831,773 64,055,101
2020-21 16,142,006 5,188,250 1,664,391 86,464,982
2021-22 13,689,853 5,448,044 5,245,065 100,089,392
2022-23 12,265,983 5,723,983 720,310 98,233,408
Source: City of Gardena, Administrative Services Department - Finance Division City of Gardena
Governmental Revenues By Sources (Continued)
Last Ten Fiscal Years
$64.4M $66.2M $62.1M $63.5M $63.M
$69.5M $64.1M
$86.5M
$100.1M $98.2M
0 20,000,000
40,000,000
60,000,000
80,000,000
100,000,000
120,000,000
2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 Fiscal Year
General Revenues by Sources
Last Ten Fiscal Years
177
Recreation
and
Fiscal General Public Public Human
Year Government Safety Works Services
2013-14 4,938,101 32,069,172 5,395,817 6,086,777
2014-15 5,108,064 32,542,544 5,352,388 6,135,402
2015-16 4,886,467 34,674,068 5,584,816 6,498,830
2016-17 4,914,416 36,977,198 4,064,485 8,631,034
2017-18 5,025,047 37,851,314 4,012,134 9,194,054
2018-19 6,004,196 45,783,773 8,058,427 6,138,238
2019-20 6,576,421 41,295,066 8,372,502 6,155,882
2020-21 5,325,270 37,558,085 6,776,073 6,232,436
2021-22 5,296,661 41,545,473 7,868,811 7,318,062
2022-23 6,208,151 42,327,977 8,435,997 8,221,690
Note: These figures include all governmental fund types and exclude other financing sources (uses). (General, Special Revenue, Capital Projects and Debt Service Funds) (1) These figures include Lease/Bonds, Payments for Debt Services and excluding Cost of bonds issuance and escrow payments.
(2) 2021 cost of bond issuance was reclassified into debt service from other financing uses Source: City of Gardena, Administrative Services Department - Finance Division City of Gardena
General Governmental Expenditures By Function
Last Ten Fiscal Years
General
Government

7.25%
Public Safety

49.42%
Public Works

9.85%
Recreation/ Human
Services

9.60%
Community
Development

3.31%
Capital Outlay

10.29% Debt Services

10.28%
General Governmental Expenditures
by Function
Fiscal Year ended June 30, 2023
178
Fiscal Community Capital Debt
Year Development Outlay Service (1)(2) Total
2013-14 7,499,226 6,075,302 2,326,888 64,391,283
2014-15 2,594,007 8,064,783 11,257,918 71,055,106
2015-16 2,533,734 8,332,649 2,124,094 64,634,658
2016-17 2,757,861 3,349,481 4,134,746 64,829,221
2017-18 2,734,299 3,794,206 1,855,557 64,466,611
2018-19 2,382,263 6,127,264 2,101,066 76,595,227
2019-20 2,474,928 3,636,782 2,123,510 70,635,091
2020-21 2,789,072 5,199,699 3,513,803 67,394,438
2021-22 3,061,632 8,929,107 7,750,627 81,770,373
2022-23 2,837,108 8,816,842 8,803,856 85,651,621
Note: These figures include all governmental fund types and exclude other financing sources (uses). (General, Special Revenue, Capital Projects and Debt Service Funds) (1) These figures include Lease/Bonds, Payments for Debt Services and excluding Cost of bonds issuance and escrow payments.
(2) 2021 cost of bond issuance was reclassified into debt service from other financing uses Source: City of Gardena, Administrative Services Department - Finance Division City of Gardena
General Governmental Expenditures By Function (Continued) Last Ten Fiscal Years
$64.4M
$71.1M
$64.6M $64.8M $64.5M
$76.6M
$70.6M $67.4M
$81.8M
$85.7M
0 10,000,000
20,000,000
30,000,000
40,000,000
50,000,000
60,000,000
70,000,000
80,000,000
90,000,000
2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 Fiscal Year
Total General Governmental Expenditures
Last Ten Fiscal Years
179
Fiscal Improve- Personal Improve- Personal Other
Year Land ments Property Total Land ments Property Exemptions Total 2013-14 3,447,381 500 0 3,447,881 2,610,426,775 2,096,160,323 20,014,837 (93,299,293) 4,633,302,642 2014-15 3,447,381 500 0 3,447,881 2,733,522,040 2,198,829,256 21,125,783 (101,657,690) 4,851,819,389 2015-16 256,548 500 0 257,048 2,901,287,675 2,302,898,593 21,733,418 (100,791,312) 5,125,128,374 2016-17 256,548 500 0 257,048 3,059,313,278 2,408,565,245 21,982,639 (101,483,543) 5,388,377,619 2017-18 256,548 500 0 257,048 3,259,570,366 2,534,031,367 22,671,336 (97,785,800) 5,718,487,269 2018-19 256,548 500 0 257,048 3,514,987,541 2,674,639,058 22,263,329 (106,481,118) 6,105,408,810 2019-20 256,548 500 0 257,048 3,745,803,302 2,836,862,048 22,530,962 (99,222,153) 6,505,974,159 2020-21 379,899 4,167 0 384,066 4,005,949,237 3,004,367,152 24,551,498 (105,940,809) 6,928,927,078 2021-22 213,049 0 0 213,049 4,213,320,667 3,080,008,549 27,201,792 (100,843,365) 7,219,687,643 2022-23 213,049 0 0 213,049 4,581,077,862 3,256,656,564 27,312,819 (83,188,820) 7,781,858,425 Source: (1) L.A. County Assessor 2022/23 Combined Tax Rolls (2) Hdl Coren & Cone.

City of Gardena
Assessed Valuation (1) and Actual Value of Taxable Property Last Ten Fiscal Years

STATE ASSESSED LOCALLY ASSESSED

SECURED -UTILITY SECURED
In 1978, California voters passed Proposition 13 which set the property tax at a 1.00% fixed amount. This 1.00% is shared by all the taxing agencies for which the subject property resides within. In addition to 1.00% fixed amount, property owners are charged taxes as a percentage of assessed property values for the payment of any voter approved bonds.

Taxation Code.

Assessed valuation is based on 100% of full value in accordance with Section 135 of the California Revenue and Land

56.15%
Improvements

41.42%
Personal Property

2.43%
Assessed Valuation by Categories
(Total Secured and Unsecured)
Fiscal Year Ended June 30, 2023
180
HomeBefore Taxable % Total Owner
Fiscal Improve- Personal Other Other Assessed INCR. Direct Property Year ments Property Exemptions Total Exemptions Value (DECR.) Rate (2) Tax Relief 2013-14 145,965,185 175,158,651 (108,000) 321,015,836 5,051,173,652 4,957,766,359 3.61% 0.11856% 50,015,653 2014-15 140,748,595 174,403,010 (89,000) 315,062,605 5,272,076,565 5,170,329,875 4.29% 0.11837% 49,327,059 2015-16 149,004,701 178,788,974 (82,000) 327,711,675 5,553,970,409 5,453,097,097 5.47% 0.11809% 48,873,792 2016-17 130,722,770 167,676,863 (82,000) 298,317,633 5,788,517,843 5,686,952,300 4.29% 0.11790% 48,088,576 2017-18 125,455,566 161,242,825 (47,000) 286,651,391 6,103,228,508 6,005,395,708 5.60% 0.11766% 47,602,798 2018-19 125,099,278 166,925,685 (77,300) 291,947,663 6,504,171,939 6,397,613,521 6.53% 0.11737% 46,936,370 2019-20 123,980,060 170,442,727 (73,400) 294,349,387 6,899,876,147 6,800,580,594 6.30% 0.11711% 46,368,399 2020-21 119,705,782 174,999,947 (36,400) 294,669,329 7,329,957,682 7,223,980,473 6.23% 0.11685% 45,437,387 2021-22 120,700,759 169,061,580 (1,154,249) 288,608,090 7,610,506,396 7,508,508,782 3.94% 0.11672% 44,954,554 2022-23 122,253,280 171,000,192 (1,151,403) 292,102,069 8,158,513,766 8,074,173,543 7.53% 0.11644% 44,725,326 Source: (1) L.A. County Assessor 2022/23 Combined Tax Rolls (2) Hdl Coren & Cone.

TOTALS
City of Gardena
Assessed Valuation (1) and Actual Value of Taxable Property (Continued) Last Ten Fiscal Years

LOCALLY ASSESSED

UNSECURED
In 1978, California voters passed Proposition 13 which set the property tax at a 1.00% fixed amount. This 1.00% is shared by all the taxing agencies for which the subject property resides within. In addition to 1.00% fixed amount, property owners are charged taxes as a percentage of assessed property values for the payment of any voter approved bonds.

Assessed valuation is based on 100% of full value in accordance with Section 135 of the California Revenue and Taxation Code.
$4,958 $5,170 $5,453 $5,687
$6,005
$6,398
$6,801
$7,224 $7,509
$8,074
0 1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 (In Millions)
Fiscal Year
Total Assessed Valuation
(Taxable Values)
Last Ten Fiscal Years
181
CATEGORY 2022-23 2021-22 2020-21 2019-20 2018-19
Residential $5,247,758,428 $4,857,419,242 $4,671,664,590 $4,397,530,388 $4,139,852,554 Commercial 1,074,201,133 1,027,450,526 1,006,453,482 936,892,089 888,959,749 Industrial 1,208,490,671 1,117,152,653 1,037,251,905 964,891,072 889,298,836 Govt. Owned 22 - - - -
Recreational 42,678,387 41,518,155 40,966,262 40,263,960 39,491,086 Institutional 114,427,704 94,990,583 89,836,280 76,976,001 74,813,850 Miscellaneous 88 - - - -
Vacant land 66,945,560 66,349,257 69,851,264 75,744,666 62,990,225 SBE Nonunitary 213,049 213,049 384,066 257,048 257,048
Possessory Int. 27,356,432 14,807,227 12,903,295 13,675,983 10,002,510 Unsecured 292,102,069 288,608,090 294,669,329 294,349,387 291,947,663 Unknown - - - - -
8,074,173,543 7,508,508,782 7,223,980,473 6,800,580,594 6,397,613,521 Homeowner Exemption (1) - - - - -
TOTALS: $8,074,173,543 $7,508,508,782 $7,223,980,473 $6,800,580,594 $6,397,613,521 Source: L.A. County Assessor 2013/14-2022/23 Combined Tax Rolls, HdL, Coren & Cone and is subject to the limitation just mentioned.
-Exempt values are not included in Total.
(1) In 2006-07 certain report formatting changes have been made to comply with GASB 44 standard reporting requirements; therefore, the net of Homeowner Exemption is separated from previous years.

Notes: In 1978 the voters of the State of California passed Proposition 13 which limited taxes to a total maximum rate of 1% based upon 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 of 2%). With few exemptions, property is only reassessed as a result of new construction or at the time it is sold to a new owner. At that point, the property is reassessed based upon the added value of the construction or at the purchase price (market value) or economic value 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 Fiscal Year
City of Gardena
Assessed Value of Property by User Code
Last Ten Fiscal Years
182
CATEGORY 2017-18 2016-17 2015-16 2014-15 2013-14
Residential $3,879,882,318 $3,623,545,163 $3,441,407,499 $3,247,456,567 $3,069,926,331 Commercial 831,348,140 791,527,339 750,255,119 715,396,379 680,433,002 Industrial 834,753,358 796,231,706 763,622,835 735,316,073 726,907,557 Govt. Owned 5,250,000 - - - -
Recreational 38,342,794 38,760,141 39,348,412 38,689,706 38,596,521 Institutional 78,834,725 69,798,622 65,412,639 62,243,721 68,337,737 Miscellaneous 451,519 442,667 - - -
Vacant land 46,086,466 54,308,182 57,298,803 46,471,775 43,043,588 SBE Nonunitary 257,048 257,048 257,048 3,447,881 3,447,881 Possessory Int. 8,787,949 8,513,799 7,783,045 6,245,168 6,057,906 Unsecured 286,651,391 298,317,633 327,711,675 315,062,605 321,015,836 Unknown - - 22 - -
6,005,395,708 5,686,952,300 5,453,097,097 5,170,329,875 4,957,766,359 Homeowner Exemption (1) - - - - -
TOTALS: $6,005,395,708 $5,686,952,300 $5,453,097,097 $5,170,329,875 $4,957,766,359 Source: L.A. County Assessor 2013/14-2022/23 Combined Tax Rolls, HdL, Coren & Cone -Exempt values are not included in Total.
reporting requirements; therefore, the net of Homeowner Exemption is separated from previous years. (1) In 2006-07 certain report formatting changes have been made to comply with GASB 44 standard and is subject to the limitation just mentioned.
above represents the only data currently available with respect to the actual market value of taxable property maximum rate of 1% based upon 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 of 2%). With few exemptions, property is only reassessed as a result of new construction or at the time it is sold to a new owner. At that point, the property is reassessed based upon the added value of the construction or at the purchase price (market value) or economic value of the property sold. The assessed valuation data shown Notes: In 1978 the voters of the State of California passed Proposition 13 which limited taxes to a total Fiscal Year
City of Gardena
Assessed Value of Property by User Code (Continued)
Last Ten Fiscal Years
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 $3,070 $3,247
$3,441
$3,623
$3,879 $4,140 $4,398 $4,672 $4,857 $5,248
(in Millions)
Fiscal Year
Assessed Value - Taxable Property
Last Ten Fiscal Years
Residential
Commercial
Vacant land
All others
183
Fiscal
Year Residential Commercial Industrial Agriculture Recreational Institutional Govt. Owned Vacant land 2013-14 3,069,926 680,433 726,908 - 38,597 68,338 - 43,043 2014-15 3,247,457 715,396 735,316 - 38,690 62,244 - 46,472 2015-16 3,441,407 750,255 763,623 - 39,348 65,413 - 57,299 2016-17 3,623,545 791,527 796,232 - 38,760 69,798 5,250 54,308 2017-18 3,879,882 831,348 834,753 - 38,342 78,834 - 46,086 2018-19 4,139,853 888,960 889,299 - 39,491 74,814 - 62,990 2019-20 4,397,530 936,892 964,891 - 40,264 76,976 - 75,745 2020-21 4,671,665 1,006,453 1,037,252 - 40,967 89,836 - 69,851 2021-22 4,857,419 1,027,451 1,117,153 - 41,518 94,991 - 66,349 2022-23 5,247,759 1,074,201 1,208,491 - 42,678 114,428 - 66,946 NOTES: Report formatting changes have been made to comply with GASB 44 standard reporting requirements.

Public Utility values are not included in this report.
(1) Tax Rate Areas: TRA 000576
-Tax rate limit: A state constitutional amendment (Proposition 13) provided that the tax rate was limited to 1% of full cash values, levied only by the County and shared with all other jurisdictions. All other jurisdictions and the County can levy a tax rate for voter-approved debt.
(2) Estimated Actual Value is derived from a series of calculations comparing median assessed values from 1940 to current median sales price and the Factor of Taxable Assessed Value is the result. This factor is changing from year to year; however, since the previous fiscal years calculating data is not available, the fiscal year 2007-08 factor is used.

Source: L.A. County Assessor 2013/14-2022/23 Combined Tax Rolls, HdL, Coren & Cone City of Gardena
Assessed Value and Estimated Value of Taxable Property
Last Ten Fiscal Years
(in thousands)
184
Total Factor of
Direct Estimated Taxable
Fiscal SBE Tax Taxable Assessed
Year Nonunitary Possessory Int. Unsecured Misc. TOTAL Rate (1) Value (2) Value 2013-14 3,448 6,058 321,015 - 4,957,766 0.11856 6,612,222 1.33371 2014-15 3,448 6,245 315,062 - 5,170,330 0.11837 6,895,721 1.33371 2015-16 257 7,783 327,712 - 5,453,097 0.11809 7,272,850 1.33371 2016-17 257 8,514 298,317 442 5,686,950 0.11790 7,584,742 1.33371 2017-18 257 8,787 286,651 - 6,004,940 0.11790 8,008,849 1.33371 2018-19 257 10,002 291,948 - 6,397,614 0.11737 8,532,562 1.33371 2019-20 257 13,676 294,349 - 6,800,580 0.11711 9,070,002 1.33371 2020-21 384 12,903 294,669 - 7,223,980 0.11685 9,634,694 1.33371 2021-22 213 14,807 288,608 - 7,508,509 0.11672 10,014,174 1.33371 2022-23 213 27,356 292,102 - 8,074,174 0.11644 10,768,607 1.33371 NOTES: Report formatting changes have been made to comply with GASB 44 standard reporting requirements.

Source: L.A. County Assessor 2013/14-2022/23 Combined Tax Rolls, HdL, Coren & Cone Assessed Value and Estimated Value of Taxable Property (Continued) City of Gardena
Last Ten Fiscal Years
(in thousands)
185
Fiscal No. of No. of No. of
Year Permits Valuation Permits Valuation Permits Valuation 2013-14 650 11,943,363 232 10,733,859 2 225,600
2014-15 785 11,173,245 295 10,524,008 2 63,500
2015-16 1,126 18,042,192 253 12,303,725 2 26,500
2016-17 1,161 10,988,165 269 16,919,670 9 7,091,565
2017-18 964 18,379,450 264 25,034,187 15 1,069,280
2018-19 1,107 23,699,914 220 10,676,880 11 437,850
2019-20 927 33,001,214 164 11,378,321 10 88,468
2020-21 737 82,991,894 105 10,605,434 5 1,712,440
2021-22 1,041 49,722,116 146 20,804,846 2 320,000
2022-23 1,070 30,141,588 122 13,599,849 5 1,862,509
Sources: (1) City of Gardena, Community Development Department. (2) City of Gardena-FDIC-Insured Institutions as of 06/30/2023 City of Gardena
Construction and Bank Deposits
(Miscellaneous Information)
Last Ten Fiscal Years
CONSTRUCTION (1)
Residential Commercial Industrial
2,078 2,445
3,010
3,152
2,951
3,038
2,723
1,915
2,167
1,700
0 500
1,000
1,500
2,000
2,500
3,000
3,500
2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 Fiscal Year
Number of Permits
Last Ten Fiscal Years
186
Bank
Fiscal No. of No. of Deposits (2)
Year Permits Valuation Permits Valuation (in Thousands) 2013-14 1,194 10,000 2,078 22,912,822 1,694,573
2014-15 1,363 966,527 2,445 22,727,280 1,656,979
2015-16 1,629 3,010 - 30,372,417 2,311,146
2016-17 1,713 3,152 - 34,999,400 1,913,039
2017-18 1,708 2,951 - 44,482,917 1,913,039
2018-19 1,700 3,038 - 34,814,644 1,980,803
2019-20 1,622 2,723 - 44,468,003 2,285,338
2020-21 1,068 310,030 1,915 95,619,798 2,483,396
2021-22 978 109,000 2,167 70,955,962 2,618,588
2022-23 503 117,273 1,700 45,721,219 2,484,565
Sources: (1) City of Gardena, Community Development Department. (2) City of Gardena-FDIC-Insured Institutions as of 06/30/2023 City of Gardena
Construction and Bank Deposits (Continued)
(Miscellaneous Information)
Last Ten Fiscal Years
All others Total
CONSTRUCTION (1)
22,913
22,727
30,372
34,999
44,483
34,815
44,468
95,620
70,956 45,721
0 20,000
40,000
60,000
80,000
100,000
120,000
2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 (in Thousands)
Fiscal Year
Permit Valuation
Last Ten Fiscal Years
(in thousands)
187
Los Angeles
Fiscal Los Angeles Unified School
Year General County District
2013-14 1.000000 0.000000 0.146440
2014-15 1.000000 0.000000 0.146880
2015-16 1.000000 0.000000 0.129710
2016-17 1.000000 0.000000 0.131100
2017-18 1.000000 0.000000 0.122190
2018-19 1.000000 0.000000 0.123230
2019-20 1.000000 0.000000 0.125520
2020-21 1.000000 0.000000 0.139930
2021-22 1.000000 0.000000 0.113230
2022-23 1.000000 0.000000 0.121070
(1) Tax Rate Areas: TRA 000576
-Tax rate limit: A state constitutional amendment (Proposition 13) provided that the tax rate was limited to 1% of full cash values, levied only by the County and shared with all other jurisdictions. All other jurisdictions and the County can levy a tax rate for voter-approved debt.

Source: L.A. County Assessor 2013/14-2022/23 Combined Tax Rolls, HdL, Coren & Cone City of Gardena
Property Tax Rates (1) - All Overlapping Governments
Last Ten Fiscal Years
(Rate per $100 of Taxable Value)

0.0000

0.1000

0.2000

0.3000

0.4000

0.5000

0.6000

0.7000

0.8000

0.9000

1.0000

0.0000

0.1211

0.0249

0.0000

0.0035
Tax Rates
Governments
Property Tax Rates -All Overlapping Governments
Fiscal Year ended June 30, 2023

GENERAL
LA
COUNTY
LA USD
LACCD
LACFC
MWD
188
Los Angeles Los Angeles
Community County Metropolitan
Fiscal College Flood Water
Year District Control District Total
2013-14 0.044540 0.000000 0.003500 1.194480
2014-15 0.040170 0.000000 0.003500 1.190550
2015-16 0.035750 0.000000 0.003500 1.168960
2016-17 0.035960 0.000000 0.003500 1.170560
2017-18 0.045990 0.000000 0.003500 1.171680
2018-19 0.046210 0.000000 0.003500 1.172940
2019-20 0.027170 0.000000 0.003500 1.156190
2020-21 0.040160 0.000000 0.003500 1.183590
2021-22 0.043760 0.000000 0.003500 1.160490
2022-23 0.024880 0.000000 0.003500 1.149450
(1) Tax Rate Areas: TRA 000576
-Tax rate limit: A state constitutional amendment (Proposition 13) provided that the tax rate was limited to 1% of full cash values, levied only by the County and shared with all other jurisdictions. All other jurisdictions and the County can levy a tax rate for voter-approved debt.

Source: L.A. County Assessor 2013/14-2022/23 Combined Tax Rolls, HdL, Coren & Cone City of Gardena
Property Tax Rates (1) - All Overlapping Governments (Continued) Last Ten Fiscal Years
(Rate per $100 of Taxable Value)

1.1945

1.1906

1.1690 1.1706

1.1717 1.1729

1.1562

1.1836

1.1605

1.1495

1.120

1.130

1.140

1.150

1.160

1.170

1.180

1.190

1.200
2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 Tax Rates
Fiscal Year
Total Overlapping Governments
Last Ten Fiscal Years
189
Agency 22-23 21-22 20-21 19-20 18-19
City of Gardena Tax District 1 0.11160 % 0.11160 % 0.11160 % 0.11160 % 0.11160 % Children's Institutional Tuition Fund 0.00285 % 0.00285 % 0.00285 % 0.00285 % 0.00285 % County Sanitation District No. 5 Operations 0.01256 % 0.01256 % 0.01256 % 0.01256 % 0.01256 % County School Services 0.00144 % 0.00144 % 0.00144 % 0.00144 % 0.00144 % County School Service Fund Los Angeles 0.00001 % 0.00001 % 0.00001 % 0.00001 % 0.00001 % Development Center for Handicapped Minors -LA Unified School District 0.00127 % 0.00127 % 0.00127 % 0.00127 % 0.00127 % Educational Augmentation Fund Impound 0.16240 % 0.16240 % 0.16240 % 0.16240 % 0.16240 % Educational Augmentation Fund (ERAF) Impound 0.07820 % 0.07820 % 0.07820 % 0.07820 % 0.07820 % LA City Community College District 0.03070 % 0.03070 % 0.03070 % 0.03070 % 0.03070 % LA County Community College Children's Center Fund 0.00000 % 0.00032 % 0.00032 % 0.00032 % 0.00032 % LA County Accumulative Capital Outlays 0.00012 % 0.00012 % 0.00012 % 0.00012 % 0.00012 % LA County Fire - Ffw 0.00747 % 0.00747 % 0.00747 % 0.00747 % 0.00747 % LA County Flood Control Dr. Improvement District 0.00178 % 0.00178 % 0.00178 % 0.00178 % 0.00178 % LA County Library 0.02380 % 0.02380 % 0.02380 % 0.02380 % 0.02380 % LA County Flood Control Maintenance 0.01007 % 0.01007 % 0.01007 % 0.01007 % 0.01007 % Los Angeles Children's Center Fund 0.00371 % 0.00371 % 0.00371 % 0.00371 % 0.00371 % LA County General 0.32520 % 0.32520 % 0.32520 % 0.32520 % 0.32520 % Los Angeles Unified School District 0.22590 % 0.22590 % 0.22590 % 0.22590 % 0.22590 % Greater L A Co Vector Control 0.00038 % 0.00038 % 0.00038 % 0.00038 % 0.00038 % Water Replacement District of Southern California 0.00018 % 0.00018 % 0.00018 % 0.00018 % 0.00018 % Total Prop. 13 Rate: 1.00000 % 1.00000 % 1.00000 % 1.00000 % 1.00000 % TOTAL DIRECT RATE (Producing Revenue for The City)(1): 0.11644 % 0.11672 % 0.11685 % 0.11711 % 0.11737 % County of Los Angeles(1) 0.00000 % 0.00000 % 0.00000 % 0.00000 % 0.00000 % Notes: General fund tax rates are representative and based upon the direct and overlapping rates for the largest General Fund tax rates area (TRA) by net taxable value.

Total Direct Rate (1) is weighted average of all individual direct rates applied by the government preparing the statistical section information. The percentages presented in the columns above do not sum across rows.

RDA rate is based on the largest RDA tax rate area (TRA) and includes only rate(s) from indebtedness adopted prior to 1989 per California State statute. RDA direct and overlapping rates are applied only to the incremental property values.

In 1978, California voters passed Proposition 13 which set the property tax at a 1.00% fixed amount. This 1.00% is shared by all the taxing agencies for which the subject property resides within. In addition to 1.00% fixed amount, property owners are charged taxes as a percentage of assessed property values for the payment of any voter approved bonds.

Gardena City CouncilDecember 12, 2023

Gardena City Council
December 12, 2023