Agenda packet — Hawthorne City Council, April 25, 2023 (part 2 of 3)

AGENDA ITEM NO. 15

CITY OF HAWTHORNE
City Council

AGENDA BILL
For the meeting of April 25, 2023
Originating Department: Finance
City Manager: __________
Vontray Norris
Dir. of Finance: ___________
Felice Lopez
SUBJECT:

Receive and file the Single Audit Report for FY 2021-2022.

RECOMMENDED MOTION:

Staff recommends that the City Council receive and file the Single Audit Report for FY 2021-2022.

DISCUSSION:

The City's independent auditors, Rogers, Anderson, Malody & Scott, LLP, have completed their annual audit of the City's fiscal activities for the fiscal year ended June 30, 2022. The annual Single Audit Report is being submitted for the City Council's review and approval. The Single Audit Report was submitted to the Federal Audit Clearinghouse and State Controller's Office by the March 31, 2023, deadline.

The Single Audit Report is required for all federal and state funded programs. These programs are audited in conformity with the provisions of the Single Audit Act of 1984 and the U.S. Office of Management and Budget (OMB) Circular A-133, Audits and State and Local Governments. The auditors did not identify any deficiencies in internal control over compliance that are considered to be material weaknesses. However, two procedural findings were identified. A corrective action plan was submitted to ensure that regulations are followed.

FISCAL IMPACT:

None.

NOTICING PROCEDURES:
72 hours posted notice pursuant to the Ralph M. Brown Act

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ATTACHMENT(S):

1. 2022 Single Audit Report
City of Hawthorne, California
Single Audit Report on Federal Awards
Year Ended June 30, 2022
City of Hawthorne
Single Audit Report on Federal Awards
Table of Contents
Page
Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ......................................................... 1 Report on Compliance for Each Major Federal Program; Report on Internal Control Over Compliance; and Report on Schedule of Expenditures of Federal Awards Required in Accordance with the Uniform Guidance .......................................................... 3 Schedule of Expenditures of Federal Awards .......................................................................... 7 Notes to the Schedule of Expenditures of Federal Awards ...................................................... 8 Schedule of Findings and Questioned Costs:

Section I: Summary of Auditor's Results ............................................................................ 9 Section II: Financial Statements Findings ........................................................................ 10 Section III: Federal Awards Findings and Questioned Costs ........................................... 11

Summary Schedule of Prior Audit Findings ........................................................................... 12 Corrective Action Plan ........................................................................................................... 13 -1-

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
Independent Auditor’s Report
To the Honorable Mayor and Members of City Council
City of Hawthorne, California
We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Hawthorne (the City) as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated January 26, 2023.

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

A deficiency in internal control exists when the design or operation of a control does not allow management or employees in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the City’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
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Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. We identified a certain deficiency in internal control, described in the accompanying Schedule of Findings and Questioned Costs as item 2022-001 that we consider to be a significant deficiency.

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

We noted certain matters that we have reported to management of City in a separate letter dated January 26, 2023.

Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

San Bernardino, California
January 26, 2023 (except for the significant deficiency noted in the Report on Internal Control over Financial Reporting above, for which the date is March 24, 2023) -3-

REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL
PROGRAM; REPORT ON INTERNAL CONTROL OVER
COMPLIANCE; AND REPORT ON SCHEDULE OF

EXPENDITURES OF FEDERAL AWARDS IN ACCORDANCE

WITH THE UNIFORM GUIDANCE
Independent Auditor’s Report
To the Honorable Mayor and Members of City Council
City of Hawthorne, California
Report of Compliance for Each Major Federal Program
Opinion on Each Major Federal Program
We have audited the City of Hawthorne’s (the City) compliance with the types of compliance requirements identified as subject to audit in the OMB Compliance Supplement that could have a direct and material effect on each of the City’s major federal programs for the year ended June 30, 2022. The City’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs.

In our opinion, the City complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2022.

Basis for Opinion on Each Major Federal Program
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America (GAAS); the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards); and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Our responsibilities under those standards and the Uniform Guidance are further described in the Auditor’s Responsibilities for the Audit of Compliance section of our report.
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We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for each major federal program. Our audit does not provide a legal determination of the City’s compliance with the compliance requirements referred to above.

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

Auditor’s Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the City’s compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material, if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the City’s compliance with the requirements of each major federal program as a whole.

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

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

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Other Matters
The results of our auditing procedures disclosed an instance of noncompliance which is required to be reported in accordance with the Uniform Guidance and are described in the accompanying schedule of findings and questioned costs as item 2022-002. Our opinion on each major federal program is not modified with respect to these matters.

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

Report on Internal Control Over Compliance
A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.

Our consideration of internal control over compliance was for the limited purpose described in the Auditor’s Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance. Given these limitations, during our audit we did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified.

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

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

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Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements. We issued our report thereon, dated January 26, 2023, which contained unmodified opinions on those financial statements. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by the Uniform Guidance and is 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 and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditures of federal awards is fairly stated in all material respects in relation to the basic financial statements as a whole.

San Bernardino, California
March 24, 2023 (except for our report on the Schedule of Expenditures of Federal Awards, for which the date is January 26, 2023)
City of Hawthorne
Schedule of Expenditures of Federal Awards
Year Ended June 30, 2022
See accompanying notes to the schedule of expenditures of federal awards. -7-
Federal
Federal Grantor/ Assistance Agency or Amount
Pass-Through Grantor/ Listing Pass-Through Federal Provided to Program Title Number Number Expenditures Subrecipients
U.S. Department of Housing and Urban Development
Direct Assistance:

Community Development Block Grant Cluster 14.218 B-09-MC-06-0519 489,158 $ 182,602 $ COVID-19 CARES Act - CDBG 14.218 312,518 - Total - Assistance Listing 14.218 801,676 182,602 Home Investment Partnership Program (HOME) 14.239 M-09-MC-06-0513 28,552 - Total - Assistance Listing 14.239 28,552 - CDBG 108 Guaranteed Loan 14.248 Various 387,356 - Total - Assistance Listing 14.248 387,356 - Housing Assistance Payment Program Section 8 14.871 HAPP Various 8,030,227 - COVID-19 Housing Assistance Payment - CARES Act 2020 14.871 CA126AF0209 81,819 - Passed through the County of Los Angeles and Other Cities:

Housing Assistance Payment Program Section 8 14.871 Various 3,172,854 - Total - Assistance Listing 14.871 11,284,900 - Total U.S. Department of Housing and Urban Development 12,502,484 182,602 U.S. Department of Justice Direct Assistance:

Bureau of Assistance:

Coronavirus Emergency Supplement Funding Program 16.034 2020-VD-BX-1535 70,528 - Total - Assistance Listing 16.034 70,528 - Edward Byrne Justice Assistance Grant - 2020 16.738 2019-DJ-BX-0866 39,876 - Total - Assistance Listing 16.738 39,876 - Equitable Sharing Program (Federal Asset Forfeiture Program) 16.922 CA0192800 1,039,746 - Total - Assistance Listing 16.922 1,039,746 - Total U.S. Department of Justice 1,150,150 - U.S. Department of Transportation Direct Assistance:

Federal Aviation Administration:

Airport Rescue Grant 20.106 3-06-0101-022-2021 122 Taxiway Rehab Project 21 20.106 3-06-0101-021-2021 1,276,533 Airport Improvement Program - Noise Study (Part 150) 20.106 3-06-0101-015-2015 7,910 - Total - Assistance Listing 20.106 1,284,565 - Passed through the State of California:

Office of Traffic Safety
Selective Traffic Enforcement Program 20.600 PT20057 163,530 - Selective Traffic Enforcement Program 20.600 MC20003 113,378 - Total - Assistance Listing 20.600 276,908 - Total U.S. Department of Transportation 1,561,473 - U.S Department of Treasury Direct Assistance:

American Rescue Plan Act 21.027 1,747,309 - Total - Assistance Listing 21.027 1,747,309 - Total U.S. Department of Treasury 1,747,309 - Federal Emergency Management Agency (FEMA) Direct Assistance:

Robert T. Stafford Disaster Relief and Emergency Assistance Act COVID-19 Reimbursable Emergency Protective Measures 97.036 106,649 - Total - Assistance Listing 97.036 106,649 - Total Federal Emergency Management Agency 106,649 - Total Expenditures of Federal Awards 17,068,065 $ 182,602 $ City of Hawthorne
Notes to the Schedule of Expenditures of Federal Awards Year Ended June 30, 2022
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NOTE 1: BASIS OF PRESENTATION
The accompanying Schedule of Expenditures of Federal Awards (SEFA) includes the federal award activity of the City of Hawthorne (the City) that are reimbursable under federal programs of the federal government for the year ended June 30, 2022. The information in this SEFA is presented in accordance with Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the SEFA presents only a selected portion of the operations of the City, it is not intended to and does not present the financial position, changes in net position or fund balance, or cash flows of the City. For the purposes of this schedule, federal financial assistance includes both federal financial assistance received directly from a federal agency, as well as federal funds received indirectly by the City from a nonfederal agency or other organization. Only that portion of program expenditures reimbursable with such federal funds are reported in the accompanying schedule. Program expenditures in excess of the maximum federal reimbursement authorized or the portion of the program expenditures that were funded with state, local or other non-federal funds are excluded from the accompanying schedule.

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Expenditures reported on the SEFA are reported on the modified accrual basis of accounting.

Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the SEFA, if any, represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. The City has elected to use the 10-percent de minimis indirect cost rate, where applicable, allowed under the Uniform Guidance.

NOTE 3: SUBRECIPIENTS
During the fiscal year ended June 30, 2022, the City disbursed $182,602 of federal awards to several subrecipients.

NOTE 4: FUNDING AUDITED AS A MAJOR PROGRAM
Assistance Listing 20.205, Highway Planning and Construction, incorrectly included local funds passed through the County of Los Angeles totaling $2,689,244 and was audited as a major program. This program has therefore been removed from the Schedule of Expenditures of Federal Awards. See item 2022-001 in the Schedule of Findings and Questioned Costs.

City of Hawthorne
Schedule of Findings and Questioned Costs
Year Ended June 30, 2022
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Section I - Summary of Auditor's Results
Financial Statements
Internal control over financial reporting:

Material weakness identified? Yes X No
Significant deficiencies identified
that are not considered to be
material weaknesses? X Yes None Reported
Noncompliance material to financial
statements noted? Yes X No
Federal Awards
Internal control over major programs:

Material weakness identified? Yes X No
Significant deficiencies identified
that are not considered to be
material weaknesses? Yes X None Reported
Any audit findings disclosed that
are required to be reported in
accordance with 2 CFR 200.516(a)? X Yes No
Identification of major programs:

Assistance Listing Number

14.871

21.027

20.106

20.205
Dollar threshold used to distinguish
between type A and type B programs: $750,000
Auditee qualified as low-risk auditee? X Yes No
Type of auditor's report issued on compliance for major programs: Unmodified Name of Federal Program
Type of report the auditor issued on whether the financial statements audited were prepared in accordance with GAAP: Unmodified
Housing Assistance Payment Program Section 8
American Rescue Plan Act
Airport Improvement Program
Highway Planning and Construction
City of Hawthorne
Schedule of Findings and Questioned Costs
Year Ended June 30, 2022
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Section II: Financial Statement Findings
2022-001 – SEFA Preparation
Significant Deficiency
Criteria
The SEFA should contain all federal expenditures for the period under audit. Proper SEFA preparation is integral to the single audit as it forms the basis for the single audit.

Condition
During the audit, it was identified that expenditures reported on the SEFA were incorrectly included as they were locally funded.

Cause
The City did not verify that the SEFA contained only federal awards, therefore causing a program to be audited as major when it would not have qualified otherwise.

Effect
The City could have overstated its federal expenditures for the period and misreported to all related federal agencies.

Questioned Costs
No questioned costs.

Identification as a Repeat Finding
This is a new finding for fiscal year 2022.

Recommendation
We recommend the City carefully review the SEFA during preparation to ensure it accurately contains all federal expenditures for the period, and only federal expenditures. This could include maintaining schedules of federal and locally sourced funding as it is received.

Views of Responsible Officials
See attached Corrective Action Plan.

City of Hawthorne
Schedule of Findings and Questioned Costs
Year Ended June 30, 2022
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Section III: Federal Awards Findings and Questioned Costs 2022-002 – Reporting
Noncompliance
Federal Program
Housing Assistance Payment Program Section 8, Assistance Listing No. 14.871 Criteria
Per Section 4 L (1) Financial Reporting of the OMB Uniform Guidance Compliance Supplement, the public housing agency (PHA) must submit timely GAAP-based unaudited and audited financial information electronically to HUD.

Condition
During the audit, we noted the unaudited financial information submitted to HUD for the year ended June 30, 2022, contained a misstatement due to error.

Cause
The City erroneously overstated revenues and understated expenses for the program when preparing the reports.

Effect
The City could have been providing inaccurate information regarding its financial performance to the granting agency.

Questioned Costs
No questioned costs.

Identification as a Repeat Finding
This is a new finding for fiscal year 2022.

Recommendation
We recommend the City carefully review all information submitted to HUD to ensure accuracy of the information filed, as well as maintain backup of information used to compile the reports.

Views of Responsible Officials
See attached Corrective Action Plan.

City of Hawthorne
Summary Schedule of Prior Audit Findings
Year Ended June 30, 2022
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Financial Statement Findings
No prior year findings to report.

Federal Awards Findings and Questioned Costs
Finding 2021-001 Noncompliance
Corrective action was appropriately taken by the City.
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CITY OF HAWTHORNE 4455 West 126th Street ·Hawthorne, California 90250-4482

RESPONSE TO 2022 SINGLE AUDIT
2022-001-SEFA Preparation
Corrective Action Plan
The city is aware that a non-federal grant was included; this issue has been addressed and the item corrected for future filings. Personnel have been made aware and additional staff is planned to be hired to add another layer of review prior to submission. Procedurally, Finance staff will meet quarterly and at year end with department heads and/or designated department grant managers to review any new and/or amendments to grant agreements. We begin with the year-end meetings August 1, 2023, and then followed by another meeting November 1, 2023. Additionally, review will be focused on clarifying or identifying if the source of funds is local or federal.

Thank you,
Felice Lopez
Finance Director
(310) 349-2923
[email protected]

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CITY OF HAWTHORNE 4455 West 126th Street ·Hawthorne, California 90250-4482 RESPONSE TO 2022 SINGLE AUDIT
2022-002-Reporting
Corrective Action Plan
Finance staff will review trial balances and expenditures versus expected program funding quarterly and at year end internally and with department’s grant coordinator. This will begin August 1, 2023, followed by another year end meeting November 1, 2023. Additionally, expected new internal new hire will add an extra layer of review to the process.

Thank you,
Felice Lopez
Finance Director
(310) 349-2923
[email protected]

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AGENDA ITEM NO. 16

CITY OF HAWTHORNE
City Council

AGENDA BILL
For the meeting of April 25, 2023
Originating Department: Public Works
City Manager: __________
Vontray Norris
Dir. of Public Works: ___________
Akbar Farokhi
SUBJECT:

Approval of a Purchase Order to South Bay Ford in the Amount of $340,000 for the Purchase of Five Replacement Police Patrol Vehicles.

RECOMMENDED MOTION:

Staff recommends that the City Council approve a purchase order to Southbay Ford in the amount of $340,000 for the purchase of five replacement Police Patrol vehicles DISCUSSION:

Police officers rely on their vehicles to respond quickly and safely to emergencies. The proposed purchase will replace police units in the inventory whose miles are too high for the type of daily services it needs to patrol the City. These vehicles must be replaced because they are more prone to malfunction.

Due to the pandemic, Ford, Chevy and Dodge stopped their production of parts and vehicles.

These agencies temporarily opened their order banks, but due to high demand, they sell out instantly , which caused a police vehicle shortage. Fifty percent of our police vehicle inventory is over 100,000 miles and is becoming undependable. The high mileage and multiple years in service require constant repairs, which also become challenging due to discontinued or obsolete parts. These five 2024 Ford Police Interceptor vehicles will replace aging or damaged ones.

We recommend this emergency procurement to ensure we maintain an adequate fleet size to provide enough vehicles to respond to emergencies and other incidents. Replacing these vehicles with new ones help ensure the safety of both police officers and the community they serve.

FISCAL IMPACT:

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None. The amount of $340,000 is available in the current fiscal year’s adopted budget and will be paid with the approved and allocated Equipment funds.

NOTICING PROCEDURES:
72 hours posted notice pursuant to the Ralph M. Brown Act ATTACHMENT(S):

1. Quotes

2. Blanket Purchase Order

Memo 4/17/2023
To : Akbar Farokhi
Director of Public works
Selena Acuna
Engineering
From : Jose G. Gutierrez
Equipment Division
RE: Police Patrol vehicle EMERGENCY PROCUREMENT

Hello Mr. Akbar and Selena,
I need to recommend we purchase 5 additional (2024 Ford police interceptors) Police Patrol vehicles due to mileage is accumulating very fast. Some vehicles are in service 24 hours (2 shifts) due to vehicle shortage. We have had a few vehicles involved is traffic accidents and are deemed totals due to severe damage. Not only are the miles accumulating, idle hours are adding to miles on drive train. Example a vehicle with 115k miles and 3500 hours would realistically have approximately 210,000 miles.

Formula: Engine hours x 60 = Approximate mileage.

We are in a Police Vehicle Shortage and need to get your help in acquiring a Blanket purchase order for when Ford opens its order bank. Over 50% of our Police Patrol vehicles are now at 100K or over miles and are becoming undependable. This year we have also lost 2 cars to Traffic accidents and were totaled by our insurance company and we were not able to replace them. We are not the only agency that is in this situation due to electronic parts needed for Ford to build the units.

July 2022 Ford Opened their order bank to place orders for their 2023 Police vehicles but had too may orders so the ordering was closed within two weeks. This situation did not give us enough time to get our paperwork together to have Council approve the purchase. Chevy had the same situation but their ordering was only open for a couple of hours as I was told by a Chevy dealer.

Due to the pandemic Ford, Chevy and Dodge stopped their production of Police Vehicles and this caused the shortage. 50% of the orders for 2021 and 2022 were cancelled, leaving us and other Agencies in this situation.

I am recommending this as an “EMERGENCY PROCUREMENT”.I have asked South Bay Ford to give us an estimated pricing for the 2024 model that ford will offering this coming year (2023) so we have a purchase order ready and will not be left out when Ford starts taking the orders on their 2024 models. South Bay ford has been our supplier for Police Patrol vehicles for the last couple of years due to their competitive pricing.

South Bay ford Estimated price for 2024 Ford Utility Police Interceptor is $67,537.88 per unit (total for 5 units $337,689.40). Estimate Attached.

Respectfully,
Jose G. Gutierrez
Equipment Division
Master Mechanic
5100 W. Rosecrans Avenue, Hawthorne, California 90250 (310) 706-6000 December 2, 2022
City of Hawthorne
Public Works Equipment Division
4455 West 126th St
Hawthorne, CA 90250
Reference: Request for Estimate
Attention: Mr. Jose Gutierrez
Dear Mr. Gutierrez,
On behalf of the employees of South Bay Ford we are pleased to submit our response to the City of Hawthorne’s Request for Estimate for a 2024 Ford Police Interceptors Utility with 3.3L Hybrid Engine and all Black exterior paint.

Item
#
Vehicle and Required Options Statement of
Compliance
A. 2024 FORD UTILITY POLICE INTERCEPTOR (K8A) Comply
B. Engine 3.3L Hybrid V-6 (99W) Comply
C. 10 – Speed Automatic Transmission (44B) Comply
D. Preferred Equipment Package (500A) Comply
E. BLIS/Heated Side Mirrors (55B)/(54Z) Comply
F. Dark Car Feature (43D) Comply
G. Dome Light Red/White (17T) Comply
H. Ford SYNC (Standard) Comply
I. Rear Door Handle & Lock (68G) Comply
J. Engine Idle (47A) Comply
K. Rear Camera on Demand (19V) Comply
L. Global Lock (18D) Comply
M. Keyed Alike – 1248x (59B) Comply
N. Noise Suppression Bonds (60R) Comply
O. Rear View Camera (87R) Comply
P. Reverse Sensing (76R) Comply
Q. Spot Lamps LED (51V) Comply
R. Deflector Plate (76D) Comply
S. Ballistic Door Panels (90E) Comply
T. Forward Warning Auxiliary Light (21L) Comply
U. Pre-wiring for Grille LED Lights, Siren and Speakers (60A) Comply V. Headlamp Housing (86P) Comply
W. Front License Plate Bracket (153) Comply
X. Agate Black (UM) Comply
Y. Charcoal Black Interior – Cloth Front / Vinyl Rear (96) Comply Z. 50 State Emissions (425) Comply
5100 W. Rosecrans Avenue, Hawthorne, California 90250 (310) 706-6000 Bay Ford Price Estimate FOB City of Hawthorne Maintenance Yard $61,149.32 Sales Tax (10.25%) $6,267.81
Documentation Fee $85.00
Tire Fee $8.75
Exempt Plates $27.00

Total Unit Price $67,537.88
This price estimate is not an offer to sell at this price, it is an estimate of what South Bay Ford thinks this vehicle will sell for when the 2024 Order Bank opens next year. The price basis is our estimate at MSRP.

We at South Bay Ford appreciate the opportunity to respond to your request for estimate. If you require additional information or clarification to our bid please contact me at my office (310) 706- 6086, email at [email protected] or my mobile (310) 720-0462.

Sincerely,
Jerald T. Johnson
Government Fleet Manager
South Bay Ford

PUBLIC WORKS DEPARTMENT
Vendor Name Agreement 2023 Amounts Account Number Description Southbay Ford In process $340,000.00 600-3103-000-0-0-47304, 600-3103-000- 0-0-47404 Purchase of Five replacement vehicles.

Total: $340,000.00

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AGENDA ITEM NO. 17

CITY OF HAWTHORNE
City Council

AGENDA BILL
For the meeting of April 25, 2023
Originating Department: Public Works
City Manager: __________
Vontray Norris
Dir. of Public Works: ___________
Akbar Farokhi
SUBJECT:

Progress Payment #4 in the amount of $682,094.25 due to Martinez Landscape Company, Inc of Sylmar, CA for General Maintenance (Project #22-05).

RECOMMENDED MOTION:

Staff recommends that the City Council approve this Progress Payment #4 to Martinez Landscape Company, Inc of Sylmar, CA.

DISCUSSION:

This contract involves the City’s Weed Abatement Program and other Landscape and General Maintenance needs, including concrete and asphalt replacement, sidewalk, curb and gutter replacement. This payment includes tree plating, removal, and maintenance to the medians along Hawthorne Blvd, Prairie Ave, Inglewood Ave and Imperial Hwy. These contracts maintenance activities supplement the work performed by City Staff on an as-needed basis.

This contract also included the construction of the Bridge of Hope Community Housing Project which provided 12 insulated shelter units with locked doors and windows, secure ventilation, electricity, wall mounted heater, air conditioning, fire extinguisher, smoke detectors, carbon monoxide detectors, slip resistant floors and storage. The 3,800 square foot lot was redesigned to provide interim shelter for unhoused individuals in the community.

This work also includes change orders of additional work to the Bridge of Hope Community Housing Project and the monthly rental fees for the Homeless Division Trailer.

FISCAL IMPACT:

Page 2 of 2 ends

None. Funds for this payment in the amount of $682,094.25 are available in the adopted Fiscal Year 2022-23 budget and will be paid for with approved and allocated funds from Proposition C, Measure R, and Non-Gas Tax funds.

NOTICING PROCEDURES:
72 hours posted notice pursuant to the Ralph M. Brown Act ATTACHMENT(S):

1. Progress Payment #4

Page 1 of 2 ends

AGENDA ITEM NO. 18

CITY OF HAWTHORNE
City Council

AGENDA BILL
For the meeting of April 25, 2023
Originating Department: Public Works
City Manager: __________
Vontray Norris
Dir. of Public Works: ___________
Akbar Farokhi
SUBJECT:

Application Approval and Agreement of Hazard Mitigation Grant Program DR-4569-021-025R Between the City of Hawthorne and the California Governor’s Office of Emergency Services and the Federal Management Agency for the City of Hawthorne Seismic Retrofit project, Phase I.

RECOMMENDED MOTION:

Staff recommends that the City Council accept the grant and approve and authorize the City Manager to execute the Funding Agreement and all future amendments and appropriate $328,158.48 from the General Fund balance to Account Number 850 for the project.

DISCUSSION:

The City of Hawthorne sought funding and was awarded this grant to seismically retrofit four City-owned structures, including the Hawthorne Memorial Center, Hawthorne Water Tower, Hawthorne City Yard, and Hawthorne City Hall. The City will update and strengthen the lateral force-resisting system of each structure to meet current seismic safety standards. Phase 1 will include project planning, design, permitting, and geotechnical studies, and Phase 2 will focus on project construction. Geotechnical studies include the excavation of eight bores. No additional ground disturbance or other physical project construction activities are proposed in Phase 1.

This project is currently under the design phase, and this phase of the project will be completed by May 2024. This agenda item will allow the City Manager to execute the funding agreement, allowing staff to continue design and engineering for this critical improvement. The total project cost for Phase I is estimated to be $430,708.

FISCAL IMPACT:

Page 2 of 2 ends

An appropriation of $328,158.48 is necessary. The City will be reimbursed by the California Governor’s Office of Emergency Services and the Federal Emergency Management Agency for these expenditures.

NOTICING PROCEDURES:
72 hours posted notice pursuant to the Ralph M. Brown Act ATTACHMENT(S):

1. Notification of Application Approval

2. Agreement
Cal OES 89 (Rev. 04/25/17)) 1

PROJECT ASSURANCES FOR FEDERAL ASSISTANCE

HAZARD MITIGATION GRANTS
Note: Certain of these assurances may not be applicable to your project or program. If you have questions, please contact California Governor’s Office of Emergency Services (Cal OES).

Further, certain federal assistance awarding agencies may require applicants to certify to additional assurances. If such is the case, you will be notified.

As the duly authorized representative of the applicant, I certify that the applicant:

1. Has the legal authority to apply for federal assistance, and the institutional, managerial and financial capability (including funds sufficient to pay the non-federal share of project costs) to ensure proper planning, management and completion of the project described in this application.

2. Will give the awarding agency, the Comptroller General of the United States, Federal Office of Inspector General 2 CFR 200.336, and if appropriate, the state, through any authorized representative, access to and the right to examine all records, books, papers, or documents related to the assistance; and will establish a proper accounting system in accordance with generally accepted accounting standards or agency directives.

3. Will not dispose of, modify the use of, or change the terms of the real property title, or other interest in the site and facilities without permission and instructions from the awarding agency. Will record the federal interest in the title of real property in accordance with awarding agency directives and will include a covenant in the title of real property acquired in whole or in part with federal assistance funds to assure nondiscrimination during the useful life of the project.

4. Will comply with the requirements of the assistance-awarding agency with regard to the drafting, review and approval of construction plans and specifications.

5. Will provide and maintain competent and adequate engineering supervision at the construction site to ensure that the complete work conforms with the approved plans and specifications and will furnish progress reports and such other information as may be required by the assistance awarding agency or state.

6. Will initiate and complete the work within the applicable time frame after receipt of approval of the awarding agency.

7. Will establish safeguards to prohibit employees from using their positions for a purpose that constitutes or presents the appearance of personal or organizational conflict of interest, or personal gains.

8. Will comply with the Lead-Based Paint Poisoning Prevention Act (42 U.S.C. §§ 4801 et seq.), which prohibits the use of lead based paint in construction or rehabilitation of residence structures.

Cal OES 89 (Rev. 04/25/17)) 2

9. Will comply with all federal statues relating to nondiscrimination. These include but are not limited to: (a) Title VI of the Civil Rights Act of 1964 (P.L. 88-352) which prohibits discrimination on the basis of race, color or national origin; (b) Title IX of the Education Amendments of 1972, as amended (20 U.S.C. §§ 1681-1683 and 1685-1686) which prohibits discrimination on the basis of sex; (c) Section 504 of the Rehabilitation Act of 1973, as amended (29 U.S.C. § 794) which prohibit discrimination on the basis of handicaps; (d) the Age Discrimination Act of 1975, as amended (42 U.S.C. §§ 6101- 6107) which prohibits discrimination on the basis of age; (e) the Drug Abuse Office and Treatment Act of 1972 (P.L. 93-255) as amended, relating to nondiscrimination on the basis of drug abuse; (f) the Comprehensive Alcohol Abuse and Alcoholism Prevention, Treatment and Rehabilitation Act of 1970 (P.L. 91-616) as amended, relating to nondiscrimination on the basis of alcohol abuse or alcoholism; (g) §§ 523 and 527 of the Public Health Service Act of 1912 (42 U.S.C. 290 dd-3 and 290 ee-3), as amended, relating to confidentiality of alcohol and drug abuse patient records; (h) Title VIII of the Civil Rights Act of 1968 (42 U.S.C. § 3601 et seq.), as amended, relating to nondiscrimination in the sale rental or financing of housing; (i) any other nondiscrimination provisions in the specific statute(s) under which application for federal assistance is being made, and (j) the requirements on any other nondiscrimination statute(s) which may apply to the application.

10. Will comply, or has already complied, with the requirements of Titles II and III of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (P.L. 91-646) which provides for fair and equitable treatment of persons displaced or whose property is acquired as a result of federal and federally assisted programs. These requirements apply to all interests in real property acquired for project purposes regardless of federal participation in purchases.

11. Will comply with the flood insurance purchase requirements of Section 102(a) of the Flood Disaster Protection Act of 1973 (P.L. 93-234) which requires recipients in a special flood hazard area to participate in the program and to purchase flood insurance if the total cost of insurable construction and acquisition is $5,000 or more.

12. Will comply with environmental standards which may be prescribed pursuant to the following: (a) institution of environmental quality control measures under the National Environmental Policy Act of 1969 (P.O. 91-190) and Executive Order (EO) 11514; (b) notification of violating facilities pursuant to EO 11738; (c) protection of wetlands pursuant to EO 11990; (d) evaluation of flood hazards in floodplains in accordance with EO 11988; (e) assurance of project consistency with the approved state management program developed under the Coastal Zone Management Act of 1972 (16 U.S.C. §§ 1451 et seq.); (f) conformity of federal actions to State (Clean Air) Implementation Plans under Section 176(c) of the Clean Air Act of 1955, as amended (42 U.S.C. § 7401 et seq.); (g) protection of underground sources of drinking water under the Safe Drinking Water Act of 1974, as amended, (P.L. 93-523); and (h) protection of endangered species under the Endangered Species Act of 1973, as amended, (P.O. 93-205).

13. Will comply with the Wild and Scenic Rivers Act of 1968 (16 U.S.C. §§ 1271 et seq.) related to protecting components or potential components of the national wild and scenic rivers system.

Cal OES 89 (Rev. 04/25/17)) 3

14. Will assist the awarding agency in assuring compliance with Section 106 of the National Historic Preservation Act of 1966, as amended (16 U.S.C. 470), EO 11593 (identification and preservation of historic properties), and the Archaeological and Historic Preservation Act of 1974 (16 U.S.C. 469a-1 et seq.).

15. Will comply with Standardized Emergency Management (SEMS) requirements as stated in the California Emergency Services Act, Government Code, Chapter 7 of Division 1 of Title 2, Section 8607.1(e) and CCR Title 19, Sections 2445, 2446, 2447 and 2448.

16. Subrecipients expending $750,000 or more in federal grant funds annually are required to secure an audit pursuant to OMB Uniform Guidance 2 CFR Part 200, Subpart F. Will cause to be performed the required financial and compliance audits in accordance with the Single Audit Act of 1984 and the Single Audit Act Amendments of 1996.

17. Will disclose in writing any potential conflict of interest to the Federal awarding agency or pass-through entity in accordance with §200.112.

18. Will comply with all applicable requirements of all other federal laws, Executive Orders, regulations and policies governing this program.

19. Has requested through the State of California, federal financial assistance to be used to perform eligible work approved in the subrecipient application for federal assistance. Will, after the receipt of federal financial assistance, through the State of California, agree to the following:
a. The state warrant covering federal financial assistance will be deposited in a special and separate account, and will be used to pay only eligible costs for projects described above;
b. To return to the State of California such part of the funds so reimbursed pursuant to the above numbered application, which are excess to the approved actual expenditures as accepted by final audit of the federal or state government. c. In the event the approved amount of the above numbered project application is reduced, the reimbursement applicable to the amount of the reduction will be promptly refunded to the State of California.

20. The non-Federal entity for a Federal award must disclose, in a timely manner, in writing to the Federal awarding agency or pass-through entity all violations of Federal criminal law involving fraud, bribery, or gratuity violations potentially affecting the Federal award §200.113. Failure to make required disclosures can result in any of the remedies described in §200.338 Remedies for noncompliance, including suspension or debarment.

21. Will not make any award or permit any award (subaward or contract) to any party which is debarred or suspended or is otherwise excluded from or ineligible for participation in Federal assistance programs under Executive Order 12549 and 12689, “Debarment and Suspension.

Cal OES 89 (Rev. 04/25/17)) 4
“I, the official named below, CERTIFY UNDER PENALTY OF PERJURY that I am duly authorized by ____________________________________________________________ (Name of Organization)
to enter into this agreement for and on behalf of said subrecipient, and by my signature do bind the subrecipient to the terms thereof .
___________________________________________________ _________________________________________ Printed Name of Authorized Applicant’s Agent Title
__________________________________________________ _________________________________________ Signature of Authorized Applicant’s Agent Date
Authorization
I, , do hereby certify as the authorized representative or Printed Name
officer of _____________________________________, that the information contained in this Name of Organization
application is true and correct.
___________________________ ______________________________ _________________ Title Signature Date
Vontray Norris City Manager 4/17/2023 Vontray Norris City Manager 4/17/2023 City of Hawthorne City of Hawthorne 3650 SCHRIEVER AVENUE  MATHER, CA 95655

RECOVERY FINANCIAL PROCESSING UNIT
(916) 845-8110
March 10, 2023
Akbar Farokhi
Public Works Manager
Hawthorne, City of
4455 West 126th Street
Hawthorne, CA 90250
Subject: Notification of Subapplication Approval
Hazard Mitigation Grant Program
FEMA-4569-DR-CA, Project #PJ0021, FIPS #037-32548
Supplement #24
Dear Mr. Farokhi:

The California Governor’s Office of Emergency Services (Cal OES) received notification that the Federal Emergency Management Agency (FEMA) has approved your organization’s subaward application in the amount of $307,648.58. A copy of the FEMA award package is enclosed for your records.

In order to receive payment as a grant subrecipient, your organization must have the following on file with the Recovery Financial Processing Unit:
 A valid, current (approved within the last 3 years) Governing Body Resolution
 A Project Assurances for Federal Assistance agreement  A Supplemental Grant Subaward Information sheet
 A current Federal Funding Accountability and Transparency Act (FFATA) Financial Disclosure form. This form must be submitted each fiscal year.  An active registration with the federal System for Award Management (SAM) website. The registration must remain active for the duration of this grant subaward.

For your convenience, this subapplication approval package includes the required post-obligation documents as well as guides to completing and renewing a SAM registration. Please complete the documents and mail copies to the address listed at the end of this letter, keeping the originals with your records.

Alternatively, you may scan and email the completed documents to the Recovery Financial Processing Unit at [email protected].

Electronic copies of the post-obligation documents can also be requested at the same address.

GAVIN NEWSOM

GOVERNOR

NANCY WARD

DIRECTOR
Mr. Farokhi

Page 2 ends

3650 SCHRIEVER AVENUE  MATHER, CA 95655

RECOVERY FINANCIAL PROCESSING UNIT
(916) 845-8110
Payments will be made on a reimbursement basis using the enclosed Hazard Mitigation Reimbursement Request Form. A ten percent (10%) retention will be withheld from all reimbursement payments and will be released as part of the subaward closeout process.

Reimbursements can be made only for items listed on the approved subaward application. Expenditures for any other work should be separately maintained and are the sole responsibility of the subrecipient. Any funds received in excess of current needs or approved amounts, or those found owed as a result of a final inspection or audit, must be refunded to the State within 30 days of receipt of an invoice from Cal OES.

When mailing documents to the Recovery Financial Processing Unit, please use the following address:

California Governor’s Office of Emergency Services
Attention: Recovery Financial Processing Unit
3650 Schriever Avenue
Mather, CA 95655
For further assistance regarding post-obligation documents or the reimbursement request process, please contact the Recovery Financial Processing Unit at (916) 845-8110 or at [email protected]. For program-related questions, please contact the Hazard Mitigation Grants Programs Unit at (916) 328-7450.

Recovery Financial Processing Unit
Enclosures
c: Subrecipient’s Project File
*The Recovery Financial Processing Unit has the City’s universal Resolution No. 8186, passed on 4/14/20, on file. A copy of the resolution is included in this package for your review. With the written permission of an Authorized Agent, the resolution can be applied to this project.
3650 SCHRIEVER AVENUE  MATHER, CA 95655

RECOVERY FINANCIAL PROCESSING UNIT
(916) 845-8110
March 10, 2023
Akbar Farokhi
Public Works Manager
Hawthorne, City of
4455 West 126th Street
Hawthorne, CA 90250
Subject: Notification of Approval for Subrecipient Management Cost Funding Hazard Mitigation Grant Program
FEMA-4569-DR-CA, Project #PJ0021, FIPS #037-32548
Supplement #24
Dear Mr. Farokhi:

The California Governor’s Office of Emergency Services (Cal OES) received notification that the Federal Emergency Management Agency (FEMA) has approved $20,509.90 in funding for subrecipient management costs (SRMC).

SRMC are costs incurred while administering a Hazard Mitigation grant subaward.

A copy of FEMA’s letter is enclosed for your records.

Payments are made on a reimbursement basis using the specialized Subrecipient Management Cost Reimbursement Request Form. Subrecipients are reminded to document their SRMC separately from direct project expenditures. To qualify for SRMC reimbursement, subrecipients must first incur and seek reimbursement for direct project expenditures via the specialized Project Expenditures Reimbursement Request Form. Reimbursement for SRMC is capped at five percent of a project’s cumulative direct project expenditures. Please note that your organization must maintain an active registration in the SAM.gov (System for Award Management) database for the duration of this grant subaward.

Please read the enclosed supplement. In accordance with Title 44 Code of Federal Regulations, Part 206.440, if you disagree with FEMA’s obligated amount or scope of work listed in the supplement, you can appeal. All appeals must be in writing and received by Cal OES within 60 days from the receipt of this letter.

If you have any questions or need assistance, please contact the Recovery Financial Processing Unit at (916) 845-8110 or at
[email protected].

Recovery Financial Processing Unit
Enclosures
c: Subrecipient’s Project File

GAVIN NEWSOM

GOVERNOR

NANCY WARD

DIRECTOR
February 17, 2023
Ryan Buras, Director
Governor's Authorized Representative
California Governor's Office of Emergency Services
3650 Schriever Avenue
Mather, CA 95655
Reference: Application Approval, HMGP DR-4569-021-025R
City of Hawthorne, California
City of Hawthorne Seismic Retrofit, Phase 1
FIPS Code: 037-32548, Supplement 24
Dear Ryan Buras:

U.S. Department of Homeland Security
Region 9
I 11 I Broadway, Suite 1200
Oakland, California 94607
FEMA
We approve and issue Hazard Mitigation Grant Program (HMGP) funds for the City of Hawthorne, HMGP DR-4569-021-025R, City of Hawthorne Seismic Retrofit, Phase 1.

The total project cost for Phase 1 is $410,198.11. As shown in the enclosed Obligation Report - Supplement 24, we are obligating $307,648,58 for the 75 percent Federal share; the 25 percent nonFederal share is $102,549.53. We are obligating $20,509.90 for the 100 percent Federal share of Subrecipient Management Costs (SRMC). These funds are available in SmartLink for immediate and eligible disbursements. The following is a summary of the approved funding:

Pro_ject Phase: Federal Share: Non-Federal Share: Total Pro.iect Cost:

Phase 1, Supplement $307,648.58 $102,549.53 $410,198.11 24 Phase 1, SMRC $20,509.90 $ 0.00 $20,509.90
This HMGP project approval and obligation of funds are subject to the following conditions:

1. Scope of Work (SOW)-The City of Hawthorne will seismically retrofit four City-owned structures including the Hawthorne Memorial Center, Hawthorne Water Tower, Hawthorne City Yard, and Hawthorne City Hall. The city will update and strengthen the lateral force resisting system of each structure to meet current seismic safety standards. Phase 1 will include project planning, design, permitting, and geotechnical studies and Phase 2 will focus on project construction. Geotechnical studies include the excavation of eight bores. No additional ground disturbance or other physical project construction activities are proposed as part of Phase 1. www.fema.gov

RECEIVED
FEB 23 2023

FINANCIAL PROCESSING UNIT
Ryan Buras
February 17, 2023

Page 2 ends

The following Phase 1 activities and deliverables are expected:

Phase 1 Activity Estimated Timeline
Project Planning & Permitting 7 Months
60% Desij?;n 2 Months
Geotechnical Studies 6 Months
Please provide the above-referenced deliverables once completed to the assigned FEMA Grants Management Specialist for review and inclusion within the official grant file.

2. Phase 1 Completion Date - The work schedule included with the project application indicates that Phase 1 will take 15 months to complete. All Phase 1 project deliverables must be submitted to the assigned FEMA HMA Specialist by the Phase 1 completion date. Please inform the subrecipient that work completed after this date is not eligible for federal funding, and that federal funds may be de-obligated for work completed outside the completion date when there is no approved time extension.

3. Phase 2 Approval - Please inform the sub-recipient that Phase 2 approval is contingent on programmatic review and Environmental and Historical Preservation (EHP) approval. Phase 2 activities may not commence until written approval has been received. Any Phase 2 activities completed prior to approval may be de-obligated. In addition, if Phase 2 is unapproved, federal funds may be de-obligated for previously completed Phase 1 activities.

4. Record of Environmental Considerations (REC) - Phase 1 of this project has been determined to be Categorically Excluded from the need to prepare either an Environmental Impact Statement or Environmental Assessment in accordance with FEMA Instruction 108-1-1 and FEMA Directive 108-1-1 as authorized by DHS Instruction Manual 023-01-001- 01, Revision 1.

Categorical Exclusion a4 (information gathering, data analysis and processing, information dissemination, review, interpretation, and development of documents) has been applied. Particular attention should be given to the project conditions before and during project implementation.

Failure to comply with these conditions may jeopardize federal assistance including funding.

Please reference the enclosed REC for further information.

5. Standard Conditions - This project approval is subject to the enclosed Standard Mitigation Grant Program (HMGP) Conditions, amended August 2018. Please note that federal funds may be de-obligated for work that does not comply with these conditions.

If you have any questions or need further assistance please contact Jocelyn Madison-Kelly, Grants Management Specialist, by email [email protected], or phone (202) 717-0135.

Sincerely,
Digitally signed by KATHRYN J

KATHRYN J LIPIECKI LIPIECKI
Kathryn Lipiecki
Director, Mitigation Division
FEMA Region 9
Date: 2023.02.17 08:13:22 -08'00'
Ryan Buras
February 17, 2023

Page 3 ends

Enclosures (3):

Obligation Report - Supplement 24
Record of Environmental Considerations (REC)
Standard Mitigation Grant (HMGP) Conditions
cc: Ron Miller, Acting State Hazard Mitigation Officer, California Governor's Office of Emergency Services
Blythe Denton, Acting State Hazard Mitigation Officer, California Governor's Office of Emergency Services
Robert McCord, Chief, Hazard Mitigation Assistance Branch, FEMA Region 9 2/15/2023
8:50AM
Disaster FEMA
No Project No

FEDERAL EMERGENCY MANAGEMENT AGENCY

HAZARD MITIGATION GRANT PROGRAM
Obligation
Amendment State
No Application ID
Action
No
Supplemental
HMGP-OB-01
No State ----------�--------- Recipient
4569 25 ·R 0 21
Subrecipient: Hawthorne
Subrecipient FIPS Code: 037-32548
Total Amount
Previously Allocated
$307,648.58
Project Amount
Total Amount
Previously Obligated
$307,648.58
Subrecipient Management
Cost Amount
$307,648.58
1 ____ � $20_,_5_o9_.9�o
Comments
Date: 02/13/2023 User Id: SSCOTT39
24 CA St ate wide
Project Title : Seismic Retrofitting Four City Buildings 2021 Total Amount Total Amount Available
Pending Obligation for New Obligation
$0.00 $0.00
Total Obligation IFMIS Date IFMIS Status FY
$328, 158.48
1 02/14/2023 Accept 2023
Comment: Approved funding for HMGP 4569-21-25R- Los Angeles County-Hawthorne-Seismic Retrofitting Four City Buildings for $307,648.58 Federal Share and $20,509.90 Sub Recipient Management Costs.

Authorization
Preparer Name: STEVEN SCOTT
HMO Authorization Name: JOCELYN MADISON-KELLY
Preparation Date: 02/13/2023
HMO Authorization Date: 02/14/2023

Page 1 of 1 ends

02/10/2023
19:42:37

FEDERAL EMERGENCY MANAGEMENT AGENCY
RECORD OF ENVIRONMENTAL CONSIDERATION (REC}
REC-01
Project HMGP-4569-0025-CA (4569-021-025) (1)
Title: Seismic Retrofitting Four City Buildings 2021

NEPA DETERMINATION
Non Compliant Flag: No
EA Public Notice Date:

EA Draft Date:

EAFonsi
EA Final Date:

Level: CATEX
EIS Notice of Intent EIS ROD Date:

CATEX CATEGORIES
Comment The City of Hawthorne (City or Subrecipient), located in southwest Los Angeles County, proposes to seismically retrofit four City-owned structures including the Hawthorne Memorial Center (33.916833, - 118.341714) at 3901 W El Segundo Boulevard; Hawthorne Water Tower (33.918142, -118.357831) at 12601 Ramona Avenue; Hawthorne City Yard (33.918842, -118.358683) at 12500 Eucalyptus Avenue; and Hawthorne City Hall (33.918547, -118.354300) at 4455 West 126th Street. The City will update or strengthen the lateral force resisting system of each structure to meet current seismic safety standards.

The Hawthorne Memorial Center is a one-story event center of reinforced masonry bearing/shear walls and reinforced concrete bearing/shear walls build in 1963. It would be upgraded with new 12-inch reinforced concrete shear walls from ground to roof, new 36-inch concrete footings, new steel collectors at the roof, and horizontal trusses to brace the ends of the building. The Hawthorne Water Tower is a 130-foot-tall steel plate cantilevered water tower built in 1957. It will receive a new steel special concentric braced frame (SCBF) around its perimeter as well as new micropiles and a pile foundation at SCBF columns. The City Yard Building is a 1-story above grade maintenance yard of reinforced masonry bearing/shear walls built in 1954. The tops of the walls will be anchored to the roof diaphragm and the building mezzanines will be removed or retrofitted. Hawthorne City Hall is a 2-story above grade and 1-story below grade reinforced concrete shear wall office building built in 1977. It will receive new 12-inch special reinforced concrete shear walls from basement to roof level, new 36-inch-deep footings below the shear walls, and new concrete collectors around the building perimeter. Mechanical, electrical, and plumbing systems will be braced or anchored at each structure per current standards.

The project will occur in two phases. Phase 1 will include project planning, design, permitting, and geotechnical studies and Phase 2 will focus on project construction. Geotechnical studies would include the excavation of eight bores, including two each at the Hawthorne Memorial Center (33.916979, - 118.342025 and 33.916732, -118.341596), Hawthorne Water Tower (33.918102, -118.357940 and

33.918079, -118.357751), Hawthorne City Yard (33.918715, -118.358833 and 33.918723, - 118.358514), and Hawthorne City Hall (33.918538, -118.354596 and 33.918586, -118.354014). The bores would be excavated using hand augers, a truck-mounted hollow-stem drilling machine, or a trackmounted drilling machine. They would measure a maximum 8 inches in diameter and extend to depths of 20 feet (Hawthorne City Yard), 30 feet (Hawthorne Memorial Hall and City Hall), or 75 feet (Hawthorne Water Tower). Staging and access would occur from existing paved areas, and bores would be placed in heavily landscaped areas or areas that have been graded and paved. No additional ground disturbance or other physical project construction activities are proposed as a part of Phase 1, and none are permitted without prior notice to FEMA. This review covers only Phase 1 project activities and does not cover Phase 2 construction, which will require a separate review.

This project has been determined to be Categorically Excluded from the need to prepare either an Environmental Impact Statement or Environmental Assessment in accordance with FEMA Instruction 108-1-1 and FEMA Directive 108-1-1 as authorized by DHS Instruction Manual 023-01-001-01, Revision

1. Categorical Exclusions A4 (information gathering, data analysis and processing, information dissemination, review, interpretation, and development of documents) and A7 (the commitment of resources, personnel, and funding to conduct audits, surveys, and data collection of a minimally intrusive nature) have been applied. Particular attention should be given to the project conditions before and during project implementation. Failure to comply with these conditions may jeopardize federal assistance including funding. - lholm2 - 02/09/2023 01 :32:45 GMT Catex Category Code
a4
Description Selected
(a4) Information gathering, data analysis and processing, information Yes NOTE: All times are GMT using a 24-hour clock.
dissemination, review, interpretation, and development of documents. If any of these activities result in proposals for further action, those proposals must be covered by an appropriate CATEX. Examples include but are not limited to: (a) Document mailings, publication and

Page 1 of 5 ends

EXTRAORDINARY
Description
distribution, training and information programs, historical and cultural demonstrations, and public affairs actions. (b) Studies, reports, proposals, analyses, literature reviews; computer modeling; and non-intrusive intelligence gathering activities.

Selected
(a7) The commitment of resources, personnel, and funding to conduct audits, Yes surveys, and data collection of a minimally intrusive nature. If any of these commitments result in proposals for further action, those proposals must be covered by an appropriate CATEX. Examples include, but are not limited to: (a) Activities designed to support the improvement or upgrade management of natural resources, such as surveys for threatened and endangered species, wildlife and wildlife habitat, historic properties, and archeological sites; wetland delineations; timber stand examination; minimal water, air, waste, material and soil sampling; audits, photography, and interpretation. (b) Minimally-intrusive geological, geophysical, and gee-technical activities, including mapping and engineering surveys. (c) Conducting Facility Audits, Environmental Site Assessments and Environmental Baseline Surveys, and (d) Vulnerability, risk, and structural integrity assessments of infrastructure.

Extraordinary Circumstance Code Description Selected?
No Extraordinary Circumstances were selected

ENVIRONMENTAL LAW/ EXECUTIVE ORDER
Environmental Law/
Executive Order
Clean Air Act (CAA)
Coastal Barrier Resources Act
(CBRA)
Status Description
Completed Project is located in a non-attainment area
Completed Coordination required with applicable state
administering agency - Review concluded
Completed Project is not on or connected to CBRA Unit
or otherwise protected area - Review
concluded
NOTE: All times are GMT using a 24-hour clock.

Comment
The project is in Los Angeles County within a
non-attainment area for lead, particulate matter
(PM-2.5), and 8-hour ozone according to the
U.S. Environmental Protection Agency (USEPA)
(https://www3.epa.gov/airquality/greenbook/ancl.
html), updated January 31, 2023. Based on the
scope of work, the potential emissions from
project activities are clearly below de minimis
thresholds for the General Conformity rule. Thus,
the project is exempt from a conformity
determination. - lholm2 - 02/09/2023 00:57:14
GMT

Page 2 of 5 ends

02/10/2023
19:42:37
FEDERAL EMERGENCY MANAGEMENT AGENCY REC-01
RECORD OF ENVIRONMENTAL CONSIDERATION (REC}
Project HMGP-4569-0025-CA (4569-021-025) (1)
Title: Seismic Retrofitting Four City Buildings 2021
Environmental Law/
Executive Order
Clean Water Act (CWA)
Coastal Zone Management Act
(CZMA)
Executive Order 11988 -
Floodplains
Executive Order 11990 -
Wetlands
Executive Order 12898 -
Environmental Justice for Low
Income and Minority Populations
Status Description
Completed Project would not affect any water of the U.S. - Review concluded
Completed Project is not located in a coastal zone area and does not affect a coastal zone area -
Review concluded
Comment
Completed No effect on floodplain/flood levels and Per Flood Insurance Rate Map (FIRM) panel project outside floodplain - Review concluded 06037C1790F dated September 26, 2008, all four project structures (Hawthorne Memorial
Center, Hawthorne Water Tower, Hawthorne
City Yard, and Hawthorne City Hall) are located
outside of the Special Flood Hazard Area ( 100-
year floodplain, base floodplain) and outside of
the floodplain. See Attached Maps. - lholm2 -
02/09/2023 01 :10:01 GMT
Completed
Completed
No effects on wetlands and project outside
wetlands - Review concluded
Low income or minority population in or near
project area
Completed No disproportionately high and adverse
impact on low income or minority population -
Review concluded
Per the U.S. Fish and Wildlife Service Wetland
Mapper viewed on February 4, 2023, all four
project structures (Hawthorne Memorial Center,
Hawthorne Water Tower, Hawthorne City Yard,
and Hawthorne City Hall) are located outside of
wetlands and not likely to result in any potential
direct impacts that will adversely affect wetlands.

See Attached Maps. - lholm2 - 02/09/2023
01:10:23 GMT
Minority or low-income populations were
identified through program coordination and
public involvement, state EJ community lists or
maps, or EJSCREEN reports for the area
encompassing the project location. A review of
the Phase 1 project scope of work revealed no
adverse effects on these populations. Therefore,
no additional review for potential EJ concerns is
required. The maps, reports, and other
information are saved to the project file. - lholm2
- 02/09/2023 01 :10:43 GMT
Endangered Species Act (ESA) Completed Listed species and/or designated critical habitat present in areas affected directly or
indirectly by the federal action
The proposed action is to provide funding to the
Subrecipient for Phase 1 project design,
permitting, and limited geotechnical boring within
previously disturbed areas near the Hawthorne
Memorial Center, Hawthorne Water Tower,
Hawthorne City Yard, and Hawthorne City Hall.

These actions would result in no impacts to
endangered species. Endangered Species Act
(ESA) review will need to be completed prior to
implementing subsequent phases of the project.

The Phase 1 scope of work will not
NOTE: All times are GMT using a 24-hour clock. Page 3 of 5 02/10/2023
19:42:37
FEDERAL EMERGENCY MANAGEMENT AGENCY REC-01
RECORD OF ENVIRONMENTAL CONSIDERATION (REC}
Project HMGP-4569-0025-CA (4569-021-025) (1)
Title: Seismic Retrofitting Four City Buildings 2021
Environmental Law/
Executive Order
Farmland Protection Policy Act
(FPPA)
Fish and Wildlife Coordination
Act(FWCA)
Status Description
Completed No effect to species or designated critical
habitat (See comments for justification)
Review concluded
Completed Project does not affect designated prime or
unique farmland - Review concluded
Completed Project does not affect, control, or modify a waterway/body of water - Review concluded
Migratory Bird Treaty Act (MBTA) Completed Project located within a flyway zone Magnuson-Stevens Fishery
Conservation and Management
Act (MSA)
Completed Project does not have potential to take
migratory birds - Review concluded
Completed Project not located in or near Essential Fish Habitat - Review concluded
National Historic Preservation Act Completed
(NHPA)
Applicable executed Programmatic
Agreement. Activity meets Programmatic
Allowance (enter date and# in comments) -
Review concluded
NOTE: All times are GMT using a 24-hour clock.

Comment
destroy or adversely modify suitable habitat and
will not affect any other listed or proposed
species under the jurisdiction of the U.S. Fish
and Wildlife Service and National Marine
Fisheries Service (the Services). It is therefore
determined the proposed action would have "No
Effect" on listed species and consultation with
the Services under Section 7 of the ESA is not
required. See attached No Effect Determination.
- lholm2 - 02/09/2023 00:53:58 GMT
The project is in the Flyway, however, based on
the project scope of work there is no potential for
take of migratory birds. - lholm2 - 02/09/2023
00:58:29 GMT
The Undertaking, which includes Phase 1 project
design, permitting, and limited geotechnical
boring within previously disturbed areas, was
reviewed by Lisa Holm, who meets the
applicable Secretary of the Interior Professional
Qualifications Standards in accordance with
Stipulation I.B.1.a. of the Programmatic
Agreement among the Federal Emergency
Management Agency (FEMA), State Historic
Preservation Office (SHPO) and California Office
of Emergency Services (Cal OES), signed
October 30, 2019. The Undertaking is consistent
with Second Tier Programmatic Allowance
I1.A.5.b (geotechnical boring in previously
disturbed soils with low potential to reveal
archaeological deposits) per Appendix B of the
Agreement. Thus, the Undertaking does not
require SHPO review or

Page 4 of 5 ends

02/10/2023
19:42:37

FEDERAL EMERGENCY MANAGEMENT AGENCY
RECORD OF ENVIRONMENTAL CONSIDERATION (REC}
REC-01
Project HMGP-4569-0025-CA (4569-021-025) (1)
Title: Seismic Retrofitting Four City Buildings 2021
Environmental Law/
Executive Order
Wild and Scenic Rivers Act
(WSR)

CONDITIONS
Status Description
Completed Project is not along and does not affect Wild and Scenic River - Review concluded
Special Conditions required on implementation of Projects:

Comment
notification per Stipulation I1.A.1 of the
Agreement. - lholm2 - 02/09/2023 00:53:33 GMT
The Subrecipient is responsible for complying with all other applicable subparts of the CAA. Failure to comply with these conditions may jeopardize federal assistance including funding. Any change to the approved scope of work will require re-evaluation for compliance with the Clean Air Act.

Source of condition: Clean Air Act (CAA)
Source of condition: Clean Air Act (CAA) Monitoring Required: No Standard Conditions:

Any change to the approved scope of work will require re-evaluation for compliance with NEPA and other Laws and Executive Orders.

This review does not address all federal, state and local requirements. Acceptance of federal funding requires recipient to comply with all federal, state and local laws. Failure to obtain all appropriate federal, state and local environmental permits and clearances may jeopardize federal funding.

If ground disturbing activities occur during construction, applicant will monitor ground disturbance and if any potential archeological resources are discovered, will immediately cease construction in that area and notify the State and FEMA.

NOTE: All times are GMT using a 24-hour clock. Page 5 of 5 Standard Mitigation Grant Program (HMGP) Conditions
FEMA Region IX, August, 2018
The following list applies to Recipients and Subrecipients accepting HMGP funds from the Federal Emergency Management Agency (FEMA) of the Department of Homeland Security (DHS):

1. Applicable Federal, State, and Local Laws and Regulations. The Recipient/Subrecipient must comply with all applicable Federal, State, and Local laws and regulations, regardless of whether they are on this list or other project documents. DHS financial assistance Recipients and Subrecipients are required to follow the provisions of the State HMGP Administrative Plan, applicable Hazard Mitigation Assistance Uniform Guidance, and Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards located in Title 2 of the Code of Federal Regulations (CFR) Part 200, adopted by DHS in 2 CFR 3002.

2. Financial Management Systems. The Recipient and Subrecipient must maintain financial management systems to account for and track funds, as referenced in 2 CFR 200.302.

3. Match or Cost Share. Non-federal match or cost share must comply with 2 CFR 200.306, the scope of work (SOW), and any agreements among the Subrecipient, the Recipient, and FEMA.

4. Budget Changes. Unanticipated adjustments are permitted within the approved total cost. However, if costs exceed the federal share, the Subrecipient must notify the Governor's Authorized Representative (GAR) of overruns before implementation. The GAR shall submit a written request for approval to FEMA Region IX. The subaward must continue to meet HMGP requirements, including cost effectiveness and cost share. Refer to 2 CFR 200.308 for additional information.

5. Real Property and Land. The acquisition, use, and disposition must comply with 2 CFR 200.311.

6. Equipment. The acquisition, use, and disposition must comply with 2 CFR 200.313.

7. Supplies. Upon project completion, FEMA must be compensated for unused supplies, exceeding $5,000 (fair market value), and not needed for other federal programs. Refer to 2 CFR 200.314.

8. Procurement. Procurement procedures must be in conformance with 2 CFR 200.318-320.

9. Monitoring and Reporting Program Performance. The Recipient and Subrecipient must submit quarterly progress reports, as referenced in the 2 CFR 200.328 and State HMGP Administrative Plan.

10. Records Retention. In accordance with 2 CFR 200.333, financial/ programmatic records related to expenditures must be maintained at least 3 years after the date of Recipient's final expenditure report.

11. Enforcement and Termination. If the Recipient or Subrecipient fails to comply with the award or subaward terms, whether stated in a Federal statute or regulation, the State HMGP Administrative Plan, subpplication, a notice of award, an assurance, or elsewhere, FEMA may take one or more of the actions outlined in 2 CFR 200.338, including termination or partial termination of the award or subaward outlined in 2 CFR 200.339.

12. Allowable Costs. Funds are to be used for allowable costs in compliance with 2 CFR 200.403, the approved SOW, and any agreements among the Subrecipient, Recipient, and FEMA. 1 13. Non-Federal Audit. The Recipient and Subrecipient are responsible for obtaining audits in accordance with the Single Audit Act of 1984, in compliance with 2 CFR 200.501.

14. Debarred and Suspended Parties. Recipients and Subrecipients are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, and 2 CFR 180. These regulations restrict federal financial assistance awards, subawards, and contracts with parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in the federal assistance programs or activities.

15. Equipment Rates. Rates claimed for use of Subrecipient-owned equipment in excess of the FEMAapproved rates must be approved under State guidelines issued by the State Comptroller's Office or must be certified by the Recipient to include only those costs attributable to equipment usage less any fixed overhead and/or profit.

16. Duplication of Funding between Public Assistance (PA) and HMGP. Funding for PA Section 406 and HMGP Section 404 are permitted on the same facility/location, but the activities identified under each program must be distinct with separately accounted funds. At closeout, FEMA may adjust the funding to ensure the Subrecipient was reimbursed for eligible work from only one funding source.

17. Historic Properties and Cultural Resources. In compliance with 2 CFR 800, if a potential historic property or cultural resource is discovered during construction, the Subrecipient must cease work in the area and take all reasonable measures to avoid or minimize harm to the discovered property/resource. During construction, the Subrecipient will monitor ground disturbance activity, and if any potential archeological resources are discovered, will immediately cease work in that area, and notify the Recipient and FEMA. Construction in the area may resume with FEMA's written approval after FEMA's consultation, if applicable, with the State Historic Preservation Officer (SHPO).

18. NEPA and Changes to the Scope of Work (SOW). To comply with the National Environmental Policy Act (NEPA), and other Laws and Executive Orders, any change to the approved SOW shall be re-evaluated before implementation. Construction associated with a SOW change, prior to FEMA approval, may be ineligible for funding. Acceptance of federal funding requires environmental permits and clearances in compliance with all appropriate federal, state and local laws, and failure to comply may jeopardize funding.

Within their authority, the Recipient and Subrecipient must use of all practicable means, consistent with other essential policies, to create and maintain productive harmony for people and nature, and fulfill the social, economic, and other needs of present and future generations of Americans. 2 1
Choudhary, Aqsah@CalOES
From: Rahimi, Arash@CalOES
Sent: Thursday, February 23, 2023 4:12 PM
To: CalOES HM Grants Payments; Gowin, Scott@CalOES; Miller, Ron@CalOES; Denton, Blythe@CalOES; Marsh, Stephanie (Contractor)@CalOES.ca.gov; Roggio, Anthony@CalOES
Cc: Renteria, Alfredo@CalOES; Singh, Danitzia@CalOES
Subject: DR4569-PA0021-025, Period of Performance (POP) Determination Attachments: HMGP Approval Package for DR4569-021-025R Phase One.pdf Follow Up Flag: Follow up
Flag Status: Flagged
Categories: Aqsah
DR#: 4569
Project #: PA0021
Subrecipient: City of Hawthorne Seismic Retrofit, Phase 1 Team:

This email serves to confirm the subaward POP end-date for the above referenced project as: 5/16/2024
This date was determined as follows:

Date of FEMA Award Letter (aka obligation letter, Application Approval): 2/17/2023 Does FEMA Award Letter include Subaward POP end-date (aka project completion date)? (Yes/No) NO
If yes, what is Subaward POP End-date:

If no, calculate what a full-term POP end-date would be:

Number of months requested by subrecipient: 15 months
Full-term POP (Date of FEMA Award Letter + Number of Months Requested - 1day),(2/17/2023+15 months-1 day)= 5/16/2024
Current overall Grant POP end-date: 1/10/2026
Does the full-term POP fit within the current overall grant POP? (Yes/No) YES If yes, the (full-term) subaward POP end-date is: 5/16/2024 2 If no, (i.e. the full-term POP end-date is beyond the current overall POP enddate) then current overall POP end-date is the same as current subaward POP end-date. HM Financial Specialist will initiate a Time extension request for a new Overall POP end-date that will accommodate the full-term of the subaward. Once the time extension is approved by FEMA, the HM Grant Specialist will initiate internal approvals of the individual subaward.

Sincerely,
Arash Rahimi,
Hazard Mitigation Financial Specialist
Recovery - Hazard Mitigation Assistance Branch
California Governor’s Office of Emergency Services
Office: (916) 845-8491 [email protected]
Phone: (916) 823-6002
Hazard Mitigation | California Governor's Office of Emergency Management

Page 1 of 2 ends

AGENDA ITEM NO. 19

CITY OF HAWTHORNE
City Council

AGENDA BILL
For the meeting of April 25, 2023
Originating Department: City Manager
City Manager: __________
Vontray Norris
SUBJECT:

Appropriation of $150,000 in funds to Non-Profits in the City of Hawthorne RECOMMENDED MOTION:

Staff Recommends that the City Council authorize City Manager to allocate funds to the City of Hawthorne Non-Profits.

DISCUSSION:

The City of Hawthorne comprises numerous non-profit organizations whose missions involve improving residents' quality of life. These local non-profits help make Hawthorne thrive.

Organizations like these are necessary for community members who depend on their product(s) and/or services to make ends meet or become productive members of our society. The City of Hawthorne has allocated $150,000 in funds provided by Community Partners to assist our local non-profit organizations. These funds are being granted to non-profit organizations that positively impact the City Of Hawthorne. These five non-profit organizations have shown a commitment to the Hawthorne residents, and we hope that with the money granted, they can continue to do great work in our city.

Staff recommends that City Council approve the allocation of grant money to the following organization(s): American Youth Soccer Organization – District 21, Hollypark Little League, and Wounded Heroes in the amounts of $5,000 respectively.

FISCAL IMPACT:
$15,000.00
NOTICING PROCEDURES:
72 hours posted notice pursuant to the Ralph M. Brown Act

Page 2 of 2 ends

ATTACHMENT(S):

None

Page 1 of 6 ends

AGENDA ITEM NO. 20

CITY OF HAWTHORNE
City Council

AGENDA BILL
For the meeting of April 25, 2023
Originating Department: Finance
City Manager: __________
Vontray Norris
Dir. of Finance: ___________
Felice Lopez
SUBJECT:

Annual Comprehensive Financial Report of the City of Hawthorne for the Fiscal Year Ended June 30, 2022.

RECOMMENDED MOTION:

Staff recommends that the City Council receive and file the Annual Comprehensive Financial Report of the City of Hawthorne for the Fiscal Year ended June 30, 2022.

DISCUSSION:

The General Fund actual revenues exceeded budgeted revenues by approximately $16.9 million in Fiscal Year 2021-2022. The excess revenue was primarily due to an increase in tax revenues of $18.5 million. This resulted in an increase of 12.9% in General Fund revenues compared with the prior fiscal year 2020-2021. Revenue projections for FY 2021-2022 were based on conservative estimates to account for modest economic growth. The General Fund expenditures for Fiscal Year 2021-2022 came in slightly lower than the amended budget by approximately $2.9 million.

Page 2 of 6 ends

The lower than anticipated expenditure amounts were in part due to a decrease in expenditures in the Parks & Recreation department of $1 million, Administrative Services of $898 thousand, and Public Works department of $700 thousand. The Police department and Mayor & City Council had expenditures over budget of $529 thousand and $490 thousand respectively.

The City’s unrestricted fund balance for the General Fund increased from $44.6 million at year

Page 3 of 6 ends

end June 30, 2020 to $57.8 million at year end June 30, 2021. The City’s unrestricted fund balance at fiscal year end June 30, 2022 for the General Fund was $78,747,034. This is approximately 108.8% of the total General Fund Expenditures. The required fund Balance for Fiscal Year 2021- 22 was $19.8 million, or 3 months (25%) of budgeted expenditures.

Page 4 of 6 ends

The City’s long term debt at fiscal year-end totaled $141 million. A decrease of $6 million during the fiscal year was primarily in the 2019 Pension Obligation Bonds (“POB”).

The City’s operational liabilities, which include Compensated absences, OPEB, pension-related debt and claims and judgments, total $135.6 million. This is a reduction of $18.1 million primarily in OPEB Liability. Debt service payments for Fiscal Year 2021-22 totaled $5,284,000 as follows:

Debt Service Payment Amount
2011 Revenue Bonds $663,000
SBRPCA Lease $191,000
Certificates of Participation (Refinance of 2015 POB and Police Facility) $1,690,000
2019 Pension Obligation Bonds $2,740,000
Total $5,284,000
As determined by the latest actuarial valuation, the City’s OPEB Liability decreased by almost $17 million to a total of $121,828,966. The City currently pays the postemployment health insurance on a pay as you go basis, with payments totaling $3,263,442 in Fiscal Year 2021-2022. Staff evaluated options for prefunding OPEB liability and the Council authorized the PARS IRS approved Section 115 Trust, which was established in November of 2022.

Page 5 of 6 ends

The City’s net position, at June 30, 2022, totaled $44.1 million. The total net position increased from the prior fiscal year 2020-21 by $81,134,797 primarily due to the increase in sales taxes and from the unrealized change in the net pension liability.

The following contributing items have impacted the overall net position:
· Taxes increased by $18.5 million
· Charges for Services revenue increased by $188 thousand · Fines and Forfeitures revenue increased by $669 thousand · Parks & Recreation expenditures decreased by $1 million · Administrative Services expenditures decreased by $898 thousand · Public works expenditures decreased by $700 thousand
The following table reflects the change in net position from fiscal year 2020-21 to fiscal year 2021-

22.

Page 6 of 6 ends

FISCAL IMPACT:

None.

NOTICING PROCEDURES:
72 hours posted notice pursuant to the Ralph M. Brown Act ATTACHMENT(S):

1. Fiscal Year 21-22 ACFR
City of Hawthorne,
California

ANNUAL COMPREHENSIVE

FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2022
Prepared by the Hawthorne Finance Department
City of Hawthorne,
California

ANNUAL COMPREHENSIVE

FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2022
Prepared by the Hawthorne Finance Department
City of Hawthorne
Annual Comprehensive Financial Report
For the Fiscal Year Ended June 30, 2022

TABLE OF CONTENTS
INTRODUCTORY SECTION:

Letter of Transmittal ............................................................................................................... i Organizational Chart .............................................................................................................viii List of Principal Officials ....................................................................................................... ix GFOA Certificate of Achievement for Excellence in Financial Reporting ...............................x FINANCIAL SECTION:

Independent Auditor's Report ...............................................................................................1 Management's Discussion and Analysis ...............................................................................5 Basic Financial Statements:

Government-Wide Financial Statements:

Statement of Net Position .......................................................................................20 Statement of Activities ............................................................................................21 Fund Financial Statements
Balance Sheet – Governmental Funds ...................................................................23 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position .................................................................................25 Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds ........................................................................................26 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities ..............28 Proprietary Funds
Statement of Net Position .......................................................................................29 Statement of Revenues, Expenses and Changes in Fund Net Position ..................30 Statement of Cash Flows ........................................................................................31 Fiduciary Funds
Statement of Fiduciary Net Position ........................................................................32 Statement of Changes in Fiduciary Net Position .....................................................33 Notes to Basic Financial Statements ............................................................................34 Required Supplementary Information:

Budgetary Comparison Schedule by Department
General Fund ........................................................................................................101 Hawthorne Housing Authority Special Revenue Fund ...........................................103 American Rescue Plan Act Fund ..........................................................................104 City of Hawthorne
Annual Comprehensive Financial Report
For the Fiscal Year Ended June 30, 2022
TABLE OF CONTENTS, (Continued)
FINANCIAL SECTION, (Continued):

Required Supplementary Information, (continued):

California Public Retirement System
Schedule of Changes in Net Pension Liability and Related Ratios ........................105 Schedule of Plan Contributions – Agent Plan ........................................................107 Schedule of City’s Proportionate Share of the Plan’s Net Pension Liability and Related Ratios as of the Measurement Date ............................................108 Schedule of Plan Contributions – Cost Sharing Plan ............................................109 Schedule of Changes in the Net OPEB Liability and Related Ratios .....................110 Notes to Required Supplementary Information .....................................................111 Supplementary Information:

Non-Major Governmental Funds:

Combining Balance Sheet ....................................................................................116 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ................................................................................................126 Schedule of Revenues, Expenditures, and Changes Fund Balance – Budget and Actual
Street Lighting Special Revenue Fund ............................................................136 Gas Tax Special Revenue Fund .....................................................................137 Street Special Revenue Fund .........................................................................138 Asset Forfeiture Special Revenue Fund ..........................................................139 COPS Special Revenue Fund .........................................................................140 California Office of Traffic Safety Special Revenue Fund ................................141 Local Law Enforcement Block Grant Special Revenue Fund ..........................142 2009 Street Improvement Special Revenue Fund ...........................................143 MTA Measure R Special Revenue Fund..........................................................144 Proposition A Special Revenue Fund ..............................................................145 MTA Measure M Special Revenue Fund .........................................................146 Proposition C Special Revenue Fund ..............................................................147 Air Quality Special Revenue Fund ..................................................................148 California Used Oil Recycling Special Revenue Fund .....................................149 California Beverage Container Recycling Special Revenue Fund ...................150 Hawthorne Boulevard Mobility Improvement Special Revenue Fund ..............151 CATV Peg Special Revenue Fund ..................................................................152 Housing Asset Special Revenue Fund.............................................................153 HOME Grant Special Revenue Fund ...............................................................154 Community Development Block Grant Special Revenue Fund ........................155 FEMA Grant Special Revenue Fund................................................................156 MTA Measure W Special Revenue Fund .........................................................157 SB2 Planning Grant Special Revenue Fund.....................................................158 LEAP Grant Special Revenue Fund.................................................................159 Development Impact Capital Projects Fund ....................................................160 State Park Improvement Capital Projects Fund................................................161 City of Hawthorne
Annual Comprehensive Financial Report
For the Fiscal Year Ended June 30, 2022
TABLE OF CONTENTS, (Continued)
FINANCIAL SECTION, (Continued):

Public Financing Authority Debt Service Fund ................................................162 2016 Refunding Bonds Debt Service Fund .....................................................163 2016 Direct Placement Lease Financing Fund ................................................164 2019 Pension Obligation Bond Debt Service Fund...........................................165 Internal Service Funds:

Combining Statement of Net Position ...................................................................166 Combining Statement of Revenues, Expenses and
Changes in Fund Net Position .........................................................................167 Combining Statement of Cash Flows ....................................................................168 STATISTICAL SECTION (UNAUDITED):

Net Position by Component ..............................................................................................170 Changes in Net Position ...................................................................................................172 Fund Balances of Governmental Funds ...........................................................................176 Changes in Fund Balances of Governmental Funds .........................................................178 Assessed Value and Estimated Actual Value of Taxable Property ...................................180 Direct and Overlapping Property Tax Rates .....................................................................181 Principal Property Taxpayers ...........................................................................................183 Property Tax Levies and Collections ................................................................................184 Ratios of Outstanding Debt by Type .................................................................................185 Ratios of General Bonded Debt Outstanding ....................................................................186 Legal Debt Margin Information .........................................................................................187 Pledged-Revenue Coverage ............................................................................................189 Direct and Overlapping Debt ............................................................................................190 Demographic and Economic Statistics .............................................................................192 Principal Employers ..........................................................................................................193 Full-Time and Part-Time Employees by Function .............................................................194 Operating Indicators by Function ......................................................................................195 Capital Asset Statistics by Function/Program ...................................................................197 January 26, 2023
Honorable Mayor, City Council and Citizens of the City of Hawthorne:

It is a pleasure to submit the Annual Comprehensive Financial Report (ACFR) of the City of Hawthorne for the fiscal year ended June 30, 2022. The financial statements are presented in conformity with generally accepted accounting principles (GAAP) and audited in accordance with Generally Accepted Auditing Standards by an independent auditing firm of licensed certified public accountants. Pursuant to that requirement, we hereby issue the Annual Comprehensive Financial Report of the City of Hawthorne for the fiscal year ended June 30, 2022.

While traditionally addressed to the governing legislative body of the City, this report is also intended to provide relevant financial information to the citizens of the City of Hawthorne, City staff, creditors, investors and other concerned readers. We encourage all readers to contact the Finance Department with any questions or comments concerning this report.

Purpose and Management Responsibility – The report consists of management's representations concerning the finances of the City of Hawthorne. Management assumes full responsibility for the completeness and reliability of all the information presented. To provide a reasonable basis for making these representations, management of the City of Hawthorne has established a comprehensive internal control framework that is designed to both protect the government's assets from loss, theft or misuse and to compile sufficient reliable information for the preparation of the financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the City of Hawthorne's framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement.

As management, we assert that to the best of our knowledge and belief, this financial report is complete and reliable in all material respects and is reported in a manner designed to present fairly the financial position and results of operations of the various funds and component units of the City of Hawthorne.

The City is responsible for the completeness and fairness of the information presented in this report. To provide a basis for making these representations, management of the City has established an internal control system that consist of defined responsibility, authority and procedures.
-i-

ELECTORATE

CITY TREASURER'S OFFICE
Gregory Fallon

CITY COUNCIL
Cable Usage Corporation / Housing Authority
Parking Authority / Redevelopment Agency

CITY CLERK'S OFFICE
Paul Jimenez
Phone (310) 349-2910 Phone (310) 349-2915

CITY ATTORNEY
Robert Kim
Phone (310) 349-2960

CITY MANAGER
Vontray Norris
Phone (310) 349-2910

COMMUNITY SERVICES
Vacant
Phone (310) 349-1640

PLANNING
Gregg McClain
Phone (310) 349-2970

POLICE SERVICES
Chief Michael Ishii
Phone (310) 349-2810

FINANCE - GENERAL LEDGER & GRANTS
Felice Lopez
Phone (310) 349-2920

BUILDING & SAFETY
Vacant
Phone (310) 349-2990

PUBLIC WORKS / ENGINEERING
Akbar Farokhi

HUMAN RESOURCES
Erika Lampkin
Phone (310) 349-2950

REVENUE & A/P MANAGER
Vacant
Phone (310) 349-2980 Phone (310) 349-2935

PW GRANTS, MAINTENANCE & FLEET
Akbar Farokhi HOUSING - CDBG/HOME
Kimberly Mack
Phone (310) 349-1600 Phone (310) 349-2980
-viii-

CITY OF HAWTHORNE

LIST OF PRINCIPAL OFFICIALS
(as of June 30, 2022)
City Council
Mayor Alex Vargas
Pro Mayor Tem
Councilmember
Councilmember
Councilmember
Olivia Valentine
Angie Reyes-English
Alex Monteiro
L. David Patterson
Administration
City Manager
City Treasurer
City Attorney
City Clerk
Vontray Norris
Gregory Fallon
Robert Kim
Paul Jimenez
Department Heads
Chief of Police
Finance Director
Revenue & A/P Manager
Michael Ishii
Felice Lopez
Vacant
Public Works/Engineering Director
Human Resources Director
Planning Director
Alan Leung
Erika Lampkin
Greg McClain
Building & Safety Director Vacant
Community Services Director
Housing & CDBG/Home Manager
Public Works Grants/Maintenance Manager
Airport Manager
Vacant
Kimberly Mack
Akbar Farokhi
Guido Fernandez
-ix-
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Hawthorne
California
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2021
Executive Director/CEO
-x-
This page intentionally left blank.

Independent Auditor’s report
To the Honorable Mayor and Members of the City Council
City of Hawthorne, California
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Hawthorne (the City), as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.

In our opinion, the accompanying financial statements present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City, as of June 30, 2022, and the respective changes in financial position and, where applicable, cash flows thereof for the fiscal year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. -1-
Responsibilities of Management for the Financial Statements The City’s 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 the City’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.

Other Matters
As discussed in Note 1 to the financial statements, in the year ended June 30, 2022, the City adopted new accounting guidance under Governmental Accounting Standards Board (GASB) Statement No. 87, Leases. Our opinions are not modified with respect to this matter.

Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS 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, 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.
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We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control–related matters that we identified during the audit.

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the required supplementary information, including the management’s discussion and analysis and the schedules listed in the table of contents, be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the 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 of Hawthorne's basic financial statements. The combining and individual nonmajor fund financial statements and schedules are presented for purposes of additional analysis and are not a required part of the basic financial statements.

The combining and individual nonmajor fund financial statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements and the nonmajor fund budgetary comparison schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole.
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Other Information Included in the Annual Comprehensive Financial Report Management is responsible for the other information included in the annual report. The other information comprises the introductory and statistical sections of the Annual Comprehensive Financial Report but does not include the financial statements and our auditor's report thereon.

Our opinions on the financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated January 26, 2023 on our consideration of the City of Hawthorne’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 to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering City of Hawthorne's internal control over financial reporting and compliance.

San Bernardino, California
January 26, 2023
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City of Hawthorne
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2022
As management of the City of Hawthorne, we offer readers of the City of Hawthornes’ financial statements this narrative overview and analysis of the financial activities of the City of Hawthorne for the fiscal year ended June 30, 2022. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, and the accompanying basic financial statements.

FINANCIAL HIGHLIGHTS



At June 30, 2022, the City’s net position (assets plus deferred outflows of resources less liabilities and deferred inflows of resources) was $44 million. Of this amount, $(117.6) million is unrestricted.

The City of Hawthorne total net position increased from the prior fiscal year by $81,134,797 primarily due to the increase in sales taxes and from the unrealized change in the net pension liability.

At the close of the current fiscal year, the City of Hawthorne governmental funds reported combined fund balances of $108,786,289, an increase of $20,632,171 in comparison with the prior year. Approximately 69% of this amount, $75,487,939, is unassigned fund balance.
 At the end of the current fiscal year, unrestricted fund balance (the total of the committed, assigned, and unassigned components of fund balance) for the General Fund was $78,853,215 or approximately 108.89% of total General Fund expenditures.

OVERVIEW OF THE ANNUAL COMPREHENSIVE FINANCIAL REPORT (ACFR) The City is required to present its financial statement in accordance with Generally Accepted Accounting Principles (GAAP) as promulgated by the Government Accounting Standards Board (GASB) pronouncements. The discussion and analysis provided here is intended to serve as an introduction to the City of Hawthorne basic financial statements. The City of Hawthorne basic financial statements consist of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to basic financial statements. This report also includes supplementary information intended to furnish additional detail to support the basic financial statements themselves.
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City of Hawthorne
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2022
Government-Wide Financial Statements
The government-wide financial statements are designed to provide readers with a broad overview of the City of Hawthorne finances, in a manner similar to a private-sector business.

The statement of net position presents financial information on all of the City of Hawthorne assets, liabilities, and deferred inflows/outflows 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 of Hawthorne is improving or declining.

The statement of activities presents information showing how the City of Hawthorne 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, with the use of the accrual basis of accounting, revenues and expenses are reported in this statement 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 of Hawthorne 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 of Hawthorne include general government, community development, public safety, highways, streets, and parks, and culture and recreation. The business-type activities of the City of Hawthorne include the City’s Airport, Sewer and Storm Drain, and Storm Water.

The basic financial statements include the City (Primary government) and all legally separate entities (component units) for which the government is financially accountable. The City’s component units consist of the following: The Housing Authority of the City of Hawthorne, The Parking Authority of the City of Hawthorne, and the Hawthorne Public Financing Authority.

These component units have been included in the basic financial statements as an integral part of the primary government using the blended method.

The government-wide financial statements can be found on pages 20-22 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 of Hawthorne, 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 of Hawthorne can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. -6-
City of Hawthorne
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2022
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 government-wide 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 governments 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 City of Hawthorne nearterm financing decisions. Both the governmental fund Balance Sheet and the governmental funds Statement of Revenues, Expenditures, and Changes in Fund Balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.

The major governmental funds include the General Fund, the Hawthorne Housing Authority Fund, and the American Rescue Plan Act Fund, which are reported in detail in the governmental Fund Financial Statements. All other funds are shown in the aggregate as other non-major funds. Individual fund data for other non-major governmental fund is provided in the form of supplementary information elsewhere in the report.

The basic governmental fund financial statements can be found on pages 23-28 of this report.

Proprietary Funds - The City of Hawthorne maintains two types of proprietary funds: enterprise funds and internal service 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 Airport, Sewer and Storm Drain, and Storm Water operations. Internal service funds are an accounting mechanism used to accumulate and allocate costs internally among the City’s various functions. The City uses internal service funds to account for its Risk Management and Vehicles & Equipment Replacement. Because these services benefit both the governmental and the business-type activities, they have been allocated between governmental and business-type 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 enterprise funds and internal service funds are each combined into a single aggregated presentation by fund type in the proprietary fund financial statements. Individual fund data for the enterprise funds and internal service funds is provided in the form of supplementary information elsewhere in the report.

The basic proprietary fund financial statements can be found on pages 29-31 of this report. -7-
City of Hawthorne
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2022
Fiduciary Funds - Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the City’s own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. Trust funds use the flow of economic resources measurement focus and the accrual basis of accounting. The Custodial Fund also uses the accrual basis of accounting and are custodial in nature. The fiduciary funds also include the Successor Agency to the Dissolved Hawthorne Redevelopment Agency in addition to agency funds. The Successor Agency is presented as a Private Purpose Trust Fund in this report.

The fiduciary fund financial statements can be found on pages 32-33 of this report.

Notes to Basic 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 basic financial statements can be found on pages 34-99 of this report.

Other Information - In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning budgetary comparison schedules, the City’s proportionate share of the net pension liability and the related schedule of contributions, and schedule of changes in the Net OPEB Liability and related ratios.

Required supplementary information can be found on 100-111 of this report.

GOVERNMENT-WIDE OVERALL FINANCIAL ANALYSIS
The government-wide financial statements provide information about the City’s overall financial picture from the perspective of all the City’s governmental and business-type funds combined together. This form of financial reporting is intended to provide a perspective similar to that found in the private sector with its basis in full accrual accounting and elimination or reclassification of internal activities. The government-wide financial statements provide longterm and short-term information about the City’s overall financial condition. This analysis addresses the financial statements of the City as a whole.

Statement of Net Position – Net position may serve over time as a useful indicator of a government’s financial condition. In the case of the City, assets and deferred outflows exceeded liabilities and deferred inflows by $54.1 million at June 30, 2022. Approximately $128.4 million of the City’s net position reflect its investment in capital assets (e.g., land, buildings, machinery, and equipment), 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 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.
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City of Hawthorne
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2022
A portion of the City’s net position, $33.2 million represents resources that are subject to external restrictions on how they may be used. The remaining balance is a deficit in unrestricted net position of, $(107.5) million, is for unrestricted uses in accordance with finance-related legal requirements. This deficit reflects liabilities which exceeds assets on hand and is related mainly due to pension and OPEB liabilities, and long-term liabilities for funding the unfunded pension obligation.

At the end of the 2022 fiscal year, the City is able to report positive balances in all categories of net position for the government as a whole except for unrestricted net position.

Governmental
Activities
Business-Type
Activities Total
2022 2021 2022 2021 2022 2021
Current and other assets
Capital assets, net
$ 200,975,821
133,965,587
$ 101,756,821
132,946,718
$ 24,638,850
11,008,202
$ 5,183,967
8,638,581
$ 225,614,671
144,973,789
$ 106,940,788
141,585,299
Total assets 334,941,408 234,703,539 35,647,052 13,822,548 370,588,460 248,526,087 Deferred outflows
of resources 86,827,037 81,640,808 100,180 153,228 86,927,217 81,794,036 Non-current liabilities
Other liabilities
276,481,368
24,113,461
300,457,170
11,094,991
86,182
960,367
143,070
149,925
276,567,550
25,073,828
300,600,240
11,244,916
Total Liabilities 300,594,829 311,552,161 1,046,549 292,995 301,641,378 311,845,156 Deferred inflows
of resources 93,069,954 55,537,247 18,739,070 7,242 111,809,024 55,544,489 Net position
Net investment in
capital assets
Restricted
117,437,597
33,234,687
115,055,399
30,843,595
11,008,202
-
8,638,581
-
128,445,799
33,234,687
123,693,980
30,843,595
Unrestricted (122,568,622) (196,644,055) 4,953,411 5,036,958 (117,615,211) (191,607,097) Total net position $ 28,103,662 $ (50,745,061) $ 15,961,613 $ 13,675,539 $ 44,065,275 $ (37,069,522) Governmental Activities. The City’s net position from governmental activities totaled $28.1 million. The cost of all governmental activities this year was $52.7 million. However, as shown in the Statement of Activities, the amount that the taxpayers ultimately financed for these activities was only $68.6 million because some of the cost was paid by those who directly benefited from the programs ($13.6 million), or by other governments and organizations that subsidized certain programs with operating and capital grants and contributions ($32.5 million).

Overall, the City’s governmental program revenues were $46.2 million. The City paid for the remaining “public benefit” portion of governmental activities with $19.45 million in taxes (some of which could only be used for certain programs) and with $(0.4) million of other revenues, such as interest earnings and general entitlements.

The most significant governmental expense for the City was in providing for Community development, which incurred expenses of $14.1 million.
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City of Hawthorne
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2022
Increase
(Decrease)
From
Percent
Increase
(Decrease)
Percent
2022 of Total 2021
Revenue Source
Charges for services
Operating contributions and grants
Capital contributions and grants
Property taxes
Sales taxes
Transient occupancy taxes
Franchise taxes
Business License taxes
Utility Users tax
Other
$ 13,669,916
19,767,825
12,796,774
21,799,982
38,271,401
6,071,367
2,536,844
9,456,866
7,459,343
(417,178)

10.4%

15.0%

9.7%

16.6%

29.1%

4.5%

1.9%

7.2%

5.7%
-0.3%
$ 1,992,888
1,671,142
1,870,257
1,006,065
6,087,304
1,884,935
258,932
3,163,299
621,491
(1,226,622)

14.6%

8.5%

14.6%

4.6%

15.9%

31.0%

10.2%

33.4%

8.3%
294.0%
Total revenue $ 131,413,140 100% $ 17,329,691 13.2%

GOVERNMENTAL ACTIVITIES
Revenue by Source
Fiscal Year 2021-22
Other General
Revenue and
Transfers, -0.3% Business License
Tax, 7.2% Charges for
Services, 10.4%
Franchise, UUT &
TOT, 12.1% Operating
Contributions and
Grants, 15.0%
Capital
Contributions and
Grants, 9.7%
Sales Taxes,

29.1%
Property Taxes,

16.6%
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City of Hawthorne
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2022
Increase
(Decrease)
From
Percent
Increase
(Decrease)
Percent
2022 of Total 2021
Function
General government
Public safety
Community development
Parks and recreation
Public works
$
$
10,495,723
8,867,389
14,158,033
3,234,730
11,318,323
4,699,446

20.0%

16.8%

26.8%

6.1%

21.4%

8.9%
$
$
(2,580,412)
(55,554,867)
(1,976,200)
(354,158)
83,590
-24.6%
-626.5%
-14.0%
-10.9%

0.7%
Interest on long-term debt (182,601) -3.9%
Total expenses 52,773,644 100% (60,564,648) -114.8%

GOVERNMENTAL ACTIVITIES
Expenses by Function
Fiscal Year 2021-22
Interest on LongPublic Works, Term Debt, 8.9%

21.4% General
Government,

20.0%
Highways, Streets
and Parks, 6.1%
Public Safety,

16.8%
Community
Development,

26.8%
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City of Hawthorne
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2022
Business-type Activities. Revenues of the City’s business-type activities were $3.9 million for the fiscal year ending June 30, 2022. Expenses for the City’s business-type activities were $1.4 million and transfers out of $0.2 million for the year, resulting in a net increase in net position of $2.2 million. The net revenues are the result of several factors, including the following:

The City’s Airport recorded total revenue of $2.4 million. Expenses for the City’s Airport were $0.8 million, resulting in a decrease in net position before transfers of $1.6 million.

The most significant expenses of the Airport are $0.3 million for administration and general, $0.1 million for contractual services and $0.3 million in depreciation.

The City’s Sewer Maintenance services recorded charges for service of $1.4 million, while expenses totaled $0.6 million, resulting in an increase in net position before transfers of $0.8 million. The most significant expenses of the Sewer Fund are $0.3 million for administration.

The City’s Storm Water services recorded charges for services of $37 thousand. No expenses were incurred, resulting in an increase in net position of $37 thousand.

The increase in net position from business-type activities was primarily due to a decrease in contractual services expense.
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City of Hawthorne
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2022

STATEMENT OF ACTIVITIES
Governmental
Activities
Business-Type
Activities Total
2022 2021 2022 2021 2022 2021
Revenues
Program revenues:

Charges for services
Operating contributions and
grants
Capital contributions and grants
General revenues:

Property taxes
Sales taxes
Transient occupancy taxes
Franchise taxes
$ 13,669,916 $ 11,677,028 $ 2,340,274 $ 2,341,973 $ 16,010,190 $ 14,019,001 19,767,825
12,796,774
18,096,683
10,926,517
1,143,678
-
81,008
-
20,911,503
12,796,774
18,177,691
10,926,517
21,799,982
38,271,401
6,071,367
2,536,844
9,456,866
7,459,343
(417,178)
20,793,917
32,184,097
4,186,432
2,277,912
6,293,567
6,837,852
809,444
-
-
-
-
-
-
-
-
-
-
-
-
21,799,982
38,271,401
6,071,367
2,536,844
9,456,866
7,459,343
44,816
20,793,917
32,184,097
4,186,432
2,277,912
6,293,567
6,837,852
825,296
Business License taxes
Utility Users tax
Other 461,994 15,852
Total Revenues 131,413,140 114,083,449 3,945,946 2,438,833 135,359,086 116,522,282 Expenses
General government
Public safety
Community development
Parks and recreation
Public works
Interest on long-term debt
Airport
Sewer and storm drain
10,495,723
8,867,389
14,158,033
3,234,730
11,318,323
4,699,446
-
13,076,135
64,422,256
16,134,233
3,588,888
11,234,733
4,882,047
-
-
-
-
-
-
-
-
-
-
-
-
-
10,495,723
8,867,389
14,158,033
3,234,730
11,318,323
4,699,446
808,620
13,076,135
64,422,256
16,134,233
3,588,888
11,234,733
4,882,047
1,155,254
706,086
808,620
642,025
1,155,254
- - 706,086 642,025
Total Expenses 52,773,644 113,338,292 1,450,645 1,861,340 54,224,289 115,199,632 Increase in Net Position
Before Transfers 78,639,496
209,227
745,157
211,167
2,495,301
(209,227)
577,493
(211,167)
366,326
81,134,797
-
1,322,650
Transfers in/(out) -
Change in Net Position
Net Position, Beginning
Net Position, Ending
78,848,723
(50,745,061)
28,103,662
956,324 2,286,074
13,675,539
15,961,613
81,134,797
(37,069,522)
44,065,275
1,322,650
(38,392,172)
(37,069,522)
(51,701,385)
(50,745,061)
13,309,213
$ $ $ $ 13,675,539 $ $

FINANCIAL ANALYSIS OF GOVERNMENTAL FUNDS
As noted earlier, the City of Hawthorne uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.

Governmental Funds.

The focus of the City of Hawthorne’s governmental fund is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City of Hawthorne financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year.
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City of Hawthorne
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2022
In particular, 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 of Hawthorne itself, or a group or individual that has been delegated authority to assign resources for use for particular purposes by the City of Hawthorne’s Council.

At June 30, 2022, the City of Hawthorne governmental funds reported combined fund balances of $108.7 million, an increase of $20.6 million in comparison with the prior year. Approximately 69% of this amount ($75.4 million) constitutes unassigned fund balance. The remainder of the fund balance is either nonspendable or restricted.

Major Funds
The General Fund is the chief operating fund of the City of Hawthorne. At the end of the current fiscal year, unassigned fund balance of the General Fund was $78.7 million. As a measure of the General Fund’s liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total General Fund expenditures. Unassigned fund balance represents approximately 122.65% of the total General Fund expenditures, while total fund balance represents approximately 108.89% of that same amount.

The fund balance of the City of Hawthorne General Fund increased by $19 million during the current fiscal year. As discussed earlier in connection with governmental activities, the increase was due primarily to the increase in sales taxes.

The Hawthorne Housing Authority Special Revenue Fund is used to account for the housing assistance programs for the qualified low-income residents. This fund ended the year with a fund balance of $439 thousand, a decrease of $84 thousand from the fiscal year 2021. The decrease was mainly due to a decrease in the operating grant received from the Section 8 voucher program.

The American Rescue Plan Act is used to provide relief to the City for the negative impacts caused from the COVID-19 Pandemic.
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City of Hawthorne
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2022
Proprietary Funds
The City of Hawthorne proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail.

Airport Fund accounts for the operation of the City’s airport, which is operated in a manner similar to a private airport. At the end of the year, the net position amounted to $9.1 million. The total change in net position for the Airport Fund was positive $1.5 million. The change was mainly due to the unrealized change in the net pension liability.

Sewer and Storm Drain Fund accounts for the operation of the City’s sewer services. At the end of the year, the net position amounted to $6.5 million. The total change in net position for the Sewer and Storm Drain Fund was $702 thousand. The change was mainly due to the unrealized change in the net pension liability.

Storm Water Fund accounts for the operation of the City’s storm water services. At the end of the year, the net position amounted to $264 thousand. The total change in net position for the Storm Water Fund was $37 thousand. The change was due to the increased storm water inspection fees.

GENERAL FUND BUDGETARY HIGHLIGHTS
During the year, the City’s adopted General Fund revenue and expenditure budgets were amended. The operating expenditure budget was increased by $3.7 million due to the implementation of COVID-19 and the Community related programs and services, for a total amended expenditure budget of $75 million for Fiscal Year 2021-2022. These amendments to original budgeted appropriations were authorized by City Council during the mid-year review.

Other minor amendments to reallocate appropriations among departments took place. The movement of the appropriations between departments was not significant and did not increase the overall operating budget.

The General Fund revenues exceeded budgeted revenues by approximately $7 million in Fiscal Year 2021-2022. The excess revenue was primarily due to an increase in tax and special assessments revenues.

The General Fund expenditures came in slightly lower than the amended budget by approximately $2.9 million. The lower than anticipated expenditure amounts were in part due to a decrease in expenditures in the Parks and recreation department of $1.0 million, in the Administrative services department of $898 thousand, and Public words department of $699 thousand. The following departments had expenditures over budget: Mayor and City Council - $490 thousand, Police - $529 thousand, and Capital outlay - $332 thousand.

The overall General Fund Budget for Fiscal Year 2021-2022 was approximately $19.8 million more favorably than projected due to the additional revenues, as noted above. -15-
City of Hawthorne
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2022
Estimated
Revenues
70,369,000
Actual Revenues Difference
Taxes $ $ 88,866,674 18,497,674
1,553,744
1,269,922
3,021,149
3,268,876
(1,243,570)
350,000
$
Licenses and permits
Intergovernmental
Charges for services
Fines and forfeitures
Use of money and property
Contributions
2,508,400
1,274,660
2,833,198
2,600,000
250,000
(954,656)
(4,738)
187,951
668,876
(1,493,570)
350,000 -
Miscellaneous 1,810,000 1,849,783 39,783
$
$
81,995,258 $
$
98,936,578 $
$
16,941,320
Appropriated
Expenditures
12,713,312
52,720,708
2,975,993
Actual
Expenditures
11,453,845
53,249,352
2,191,278
3,704,975
1,463,847
354,526
Difference
General government
Public safety
Community development
Parks and recreation
Public works
1,259,467
(528,644)
784,715
1,013,734
699,956
4,718,709
2,163,803
Capital outlay 22,626 (331,900)
$ 75,315,151 $ 72,417,823 $ 2,897,328

CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets. Capital assets including infrastructure of the City are those assets that are used in the performance of the City’s functions. At June 30, 2022, net capital assets totaled $133.9 million for governmental activities and $11 million for business-type activities, net of accumulated depreciation on capital assets, which is recognized in the Government-wide Financial Statements.
-16-
City of Hawthorne
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2022
This investment in capital includes land, building, improvements other than buildings, infrastructure (Prairie Ave Project, Holly & Ramona Park Improvement, Street Inlet Improvement, Taxiway Rehab and Sewer Construction etc.) and machinery and equipment (Police vehicle replacement, etc.). The total increase in the City’s investment in capital asset for Fiscal Year 2021-2022 was $3.3 million compared to prior year.

Governmental
Activities
Business-Type
Activities Total
2022 2021 2022 2021 2022 2021
Land $ 6,966,028
20,307,011
3,266,631
99,028,117
3,916,022
481,778
$ 6,966,028
21,781,286
3,376,999
95,096,812
4,131,257
1,594,336
$ 37,314
957,105
-
7,140,419
-
$ 37,314
1,008,500
-
7,468,007
-
$ 7,003,342
21,264,116
3,266,631
106,168,536
3,916,022
$ 7,003,342
22,789,786
3,376,999
102,564,819
4,131,257
Buildings and Improvements
Furniture and Equipment
Infrastructure
Investment in Joint Venture (RCC)
Construction in progress 2,873,364 124,760 3,355,142 1,719,096 Total $ 133,965,587 $ 132,946,718 $ 11,008,202 $ 8,638,581 $ 144,973,789 $ 141,585,299 Additional information on the City of Hawthorne’s capital assets can be found in Note 4 on pages 54-56 of this report.

Long-term liabilities. At the end of the current fiscal year, the City had total bonded debt outstanding of $140.9 million. The remainder of the City of Hawthorne’s long-term obligations comprises lease payable, loan payable, compensated absences, OPEB, pension-related debt, and claims and judgments.

City of Hawthorne’ Outstanding Liabilities
Governmental
Activities
Internal Service
Activities
Business-Type
Activities
Total
2022 2021 2022 2021 2022 2021 2022 2021
Long-TermDebt:

Bond $
$
139,487,806
44,749
$
$
144,926,388
109,678
$
$
- $
$
- $
$
-
-
-
-
$
$
-
-
-
-
$ 139,487,806
97,840
$ 144,926,388
Leasepayable 250,142
Loan payable
Total
53,091
-
140,464
1,400,000 -
140,932,555
1,757,898
146,793,964
1,400,000 1,757,898
53,091 140,464 $ 140,985,646 $ 146,934,428
OperationalLiabilities:

Compensatedabsences
OPEB
$ 7,740,177 $ 4,892,486
139,733,637
4,453,777
-
$ 86,397 $ 67,596
-
$ 86,182 $ 69,725 $ 7,912,756
121,828,966
-
$ 5,029,807
139,733,637
4,589,984
121,828,966 -
-
- -
73,345
-
Net PensionLiability
Claims and Judgment payable
Total
- 62,862
4,312,384
-
- 5,840,182 - 5,840,182 4,312,384
$ 129,569,143 $ 149,079,900 $ 5,926,579 $ 4,442,842 $ 86,182 $ 143,070 $ 135,581,904 $ 153,665,812 The City’s total long-term liabilities decreased by $5.9 million during the current fiscal year, primarily due to the decrease in the OPEB liability in the fiscal year.

Additional information on the City of Hawthorne' long-term liabilities can be found in Note 6, 7, 8, 9, 12, and 13 of this report.
-17-
City of Hawthorne
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2022

ECONOMIC FACTORS AND NEXT YEAR'S BUDGET
Real GDP increased 3.2% at the end of the third quarter of 2022, after showing a decrease of .6% in the second quarter of 2022. The City continues to focus on maintaining a conservative outlook, particularly with respect to revenues. In the case of the City of Hawthorne, slow and steady growth is projected at this point. The City's largest General Fund revenue source, Sales Tax, grew by 18.9% ($6,087,303) in FY 2022 compared to FY 2021.

The City of Hawthorne has been fortunate to have a stable and diverse economic base, which has somewhat shielded its economy from downturns in any one specific category. Despite the slowing economy, the City of Hawthorne continued to see an increase in Sales Tax revenue in fiscal year 2021-22. The City's top five revenue sources are Sales Tax, Vehicle License Fees, Property Tax, Business License Tax, and Utility Users Tax. According to the February 2022 Economic Forecast prepared by the Los Angeles County Economic Development Corporation, " The next two years will likely be characterized by economic recovery, the rate of which remains tied to the pandemic as well as to federal monetary policy decisions. Vaccine and booster efficacy against future potential virus variants will be a principal determinant affecting the impact of the COVID-19 virus on future recovery and therefore on whether the recovery forecasts will materialize. In addition, well thought out and executed monetary policy is essential to avoid negatively affecting the economic recovery process as the Federal Reserve plans to attack inflation in 2022."
California's unemployment rate decreased to 4.10% in November 2022. This is a decrease of

1.7% from the November 2021 rate of 5.8%. The unemployment rate is expected to be an average of 4.1% - 4.5% over the next 3 years. The Southern California job market hit record employment in October 2022 at 4%. October also marks the first time So. Cal. Jobs exceeded the February 2020 average, the last month before Covid-19.

According to Employment Development Department data the average unemployment rate in Los Angeles County for November 2022, was estimated at 4.6%, a decrease of 1.6% compared to November 2021 of 6.2%.

In developing the budget for fiscal year 2021-22, the first priority was to build on City Council's direction to reduce general fund expenditures and seek opportunities for new revenues. In order to continue to retain and attract business, the City must strive to maintain a business friendly approach.

The City of Hawthorne's financial outlook remains positive. The recommended fiscal year 2021- 22 budget is balanced and in compliance with the City Council's amended General Fund Reserve Policy and the recently adopted Fiscal Management Policy. The City continues to operate efficiently and effectively, all while continuing to provide outstanding services for the community.
-18-
City of Hawthorne
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2022

REQUESTS FOR INFORMATION
This financial report is designed to provide a general overview of the City of Hawthorne's finances for all those with an interest in the government's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Finance Department, 4455 West 126th Street, Hawthorne, California, 90250.
-19-

BASIC FINANCIAL STATEMENTS
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City of Hawthorne
Statement of Net Position
June 30, 2022
Governmental
Activities
Business-Type
Activities Total
Assets
Cash and investments
Cash and investments with fiscal agents
$ 106,869,368
14,998,498
$ 4,908,848
-
$ 111,778,216
14,998,498
Receivables:

Accounts
Taxes
Interest
Leases
Due from Successor Agency
Inventories
12,789,723
596,809
128,999
3,509,956
328,743
498,608 13,288,331
596,809
174,343
21,269,983
328,743
-
45,344
17,760,027
-
83,963 - 83,963
Net pension asset
Capital assets, not being depreciated
Capital assets, net of accumulated depreciation
61,669,762
7,447,806
126,517,781
1,426,023
2,910,678
8,097,524
63,095,785
10,358,484
134,615,305
Total assets 334,941,408 35,647,052 370,588,460
Deferred Outflows of Resources
Unamortized loss on defeasance of debt
Pension related
313,905
62,826,243
23,686,889
86,827,037
-
100,180
-
313,905
62,926,423
23,686,889
86,927,217
OPEB related
Total deferred outflows of resources 100,180
Liabilities
Accounts payable
Accrued liabilities
Accrued interest
2,206,807
1,196,980
626,851
533,978
27,041
-
2,740,785
1,224,021
626,851
Unearned revenue
Deposits payable
15,007,953
5,074,870
379,084
20,264
15,387,037
5,095,134
Non-current liabilities:

Due within one year
Claims and judgments
Compensated absences
Long-term lease payable
Long-term debt
1,168,036
1,565,315
81,876
- 1,168,036
1,582,551
81,876
17,236
-
6,650,449 - 6,650,449
Due in more than one year
Claims and judgments
Compensated absences
Long-term lease payable
Long-term debt
4,672,146
6,261,259
15,964
134,237,357
121,828,966
- 4,672,146
6,330,205
15,964
134,237,357
121,828,966
68,946
-
-
Total OPEB liability -
Total liabilities 300,594,829 1,046,549 301,641,378
Deferred Inflows of Resources
Pension related
OPEB related
64,759,408
24,783,564
3,526,982
93,069,954
1,138,186
-
17,600,884
18,739,070
65,897,594
24,783,564
21,127,866
111,809,024
Lease related
Total deferred inflows of resources
Net Position (deficit)
Net investment in capital assets
Restricted for:
117,437,597 11,008,202 128,445,799
Public safety 1,441,602
7,937,659
439,384
-
-
-
-
-
-
1,441,602
7,937,659
439,384
Community development
Parks and recreation
Public works
Capital improvements
Debt service
16,267,086
4,906,446
2,242,510
(122,568,622)
16,267,086
4,906,446
2,242,510
Unrestricted 4,953,411 (117,615,211)
Total net position (deficit) $ 28,103,662 $ 15,961,613 $ 44,065,275 The accompanying notes are an integral part of these financial statements. -20-
City of Hawthorne
Statement of Activities
For the Fiscal Year Ended June 30, 2022
Program Revenues
Charges Operating
for
Services
Capital
Grants and
Contributions
Grants and
Functions/Programs Contributions
Governmental activities:

General government
Public safety
Expenses
$ 10,495,723
8,867,389
14,158,033
3,234,730
11,318,323
4,699,446
$ 4,405,413 $ 7,788,457
1,230,959
6,953,616
-
3,794,793
-
$ -
5,501,164 -
1,432,020
562,525
1,768,794
-
Community development
Parks and recreation
Public works
9,228,655
-
3,568,119
Interest on long-term debt -
Total governmental activities 52,773,644 13,669,916 19,767,825 12,796,774 Business-type activities:

Airport 808,620
642,025
-
849,531
1,454,015
36,728
1,143,678 -
-
-
Sewer and storm drain
Storm water
-
-
Total business-type activities
Total Primary Government
1,450,645 2,340,274 1,143,678 -
$ 54,224,289 $ 16,010,190 $ 20,911,503 $ 12,796,774
General revenues:

Taxes:

Property taxes
Sales taxes
Transient occupancy taxes
Franchise taxes
Business license taxes
Utility users tax
Miscellaneous revenue
Use of money and property
Transfers in/(out):

Total general revenues and transfers
Change in Net Position
Net Position (Deficit), Beginning
Net Position (Deficit), Ending
The accompanying notes are an integral part of these financial statements. -21-
Net (Expense) Revenue and Changes in Net Position
Governmental
Activities
Business-Type
Activities Total
$ 1,698,147
(2,135,266)
3,456,258
(2,672,205)
(2,186,617)
(4,699,446)
$ -
-
-
-
-
-
$ 1,698,147
(2,135,266)
3,456,258
(2,672,205)
(2,186,617)
(4,699,446)
(6,539,129) - (6,539,129)
-
-
-
1,184,589
811,990
36,728
1,184,589
811,990
36,728
- 2,033,307
2,033,307
2,033,307
(6,539,129) (4,505,822)
21,799,982
38,271,401
6,071,367
2,536,844
9,456,866
7,459,343
749,456
(1,166,634)
209,227
85,387,852
-
-
-
-
-
-
21,799,982
38,271,401
6,071,367
2,536,844
9,456,866
7,459,343
1,211,450
(1,166,634)
-
461,994
-
(209,227)
252,767 85,640,619
78,848,723 2,286,074 81,134,797
(50,745,061)
28,103,662
13,675,539
15,961,613
(37,069,522)
$ $ $ 44,065,275
-22-
City of Hawthorne
Balance Sheet – Governmental Funds
June 30, 2022
Special
Revenue Funds
Hawthorne
Housing Authority
American Rescue
General Plan Act
ASSETS
Cash and investments
Cash and investments with fiscal agents
Receivables:
$ 71,932,991
-
$ 1,094,136
-
$ -
13,519,555
Accounts
Taxes
Interest
Leases
Due from Successor Agency
Due from other funds
10,061,744
569,946
94,082
19,613 -
- -
-
-
-
-
25 -
-
3,509,956
-
2,822,522 -
Inventories 69,652 - -
Total assets $
$
89,060,893 $
$
1,113,749 $
.
13,519,580

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES AND FUND BALANCES
Liabilities:

Accounts payable
Accrued liabilities
576,325
1,073,813
19,065
22,046
473,672
-
$ 1,151
-
Unearned revenue
Deposits payable
- 13,513,519
5,030,558 -
Due to other governments
Due to other funds
-
-
- -
139,969 -
Total liabilities 6,680,696 654,752 13,514,670
Deferred Inflows of Resources:

Unavailable revenue
Lease related
- 19,613
-
19,613
-
-
-
3,526,982
Total deferred inflows of resources 3,526,982
Fund Balances (Deficit):

Nonspendable
Restricted
69,652
36,529
78,747,034
78,853,215
-
439,384
-
-
4,910
-
4,910
Unassigned
Total fund balances 439,384
Total liabilities, deferred inflows of
resources and fund balances $ 89,060,893 $ 1,113,749 $ 13,519,580 The accompanying notes are an integral part of these financial statements. -23-
Nonmajor
Governmental
Funds
Total
Governmental
Funds
$ 32,226,688 $ 105,253,815
1,478,943 14,998,498
2,683,506 12,764,863
26,863
34,892
596,809
128,999
-
328,743
-
3,509,956
328,743
2,822,522
- 69,652
$ 36,779,635 $ 140,473,857
$ 1,446,201
77,787
1,020,762
44,312
$ 2,042,742
1,173,646
15,007,953
5,074,870
- -
2,682,553
5,271,615
2,822,522
26,121,733
2,019,240
-
2,019,240
2,038,853
3,526,982
5,565,835
- 69,652
33,228,698
75,487,939
108,786,289
32,747,875
(3,259,095)
29,488,780
$ 36,779,635 $ 140,473,857
-24-
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City of Hawthorne
Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position June 30, 2022
Fund balances of governmental funds $ 108,786,289
Amounts reported for governmental activities in the statement of net position are different because:

Capital assets net of depreciation have not been included as financial resources of the governmental funds. This amount excludes capital assets reported in the internal service funds. 132,531,614
Net pension asset is not a current financial resource, therefore is not recorded 60,447,550 in the governmental funds.

Deferred outflows and inflows of resources related to pensions have not been reported in the governmental funds. These amounts exclude pension related deferred outflow and inflows reported in the internal service funds.

Pension related deferred outflows of resources $ 62,740,381 (63,783,895)
23,686,889
(24,783,564)
Pension related deferred inflows of resources
Other post-employment benefits related deferred outflows of resources Other post-employment benefits related deferred inflows of resources (2,140,189) Long-term liabilities are not due and payable in the current period and are not reported in the governmental funds.

Bonds payable (139,487,806)
(7,740,177)
(121,828,966)
(44,749)
Compensated absences
Other post-employment benefits obligation
Lease payable
Section 108 loan payable (1,400,000) (270,501,698)
313,905
Governmental funds report the effect of gains or losses on debt refundings when the debt is first issued, whereas these amounts are deferred and amortized in the statement of activities.

Unamortized loss on defeasance of debt
Unavailable revenues are not available to pay for current expenditures, therefore, are deferred in the governmental funds but are recognized as revenues in the statement of activities 2,038,853
(626,851)
Accrued interest payable for the interest due on long-term debt has not been reported in the governmental funds.

Internal service funds are used to charge the cost of activities to individual funds.

The assets and liabilities are included in governmental activities in the statement of net position. (2,745,811)
Net position (deficit) of governmental activities $ 28,103,662 The accompanying notes are an integral part of these financial statements. -25-
City of Hawthorne
Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds
For the Fiscal Year Ended June 30, 2022
Special
Revenue Funds
Hawthorne
Housing Authority
American Rescue
General Plan Act
Revenues
Taxes $ 88,866,674
1,553,744
1,269,922
3,021,149
3,268,876
(1,243,570)
350,000
$ -
-
$ -
Licenses and permits -
Intergovernmental
Charges for services
Fines and forfeitures
Use of money and property
Contributions
11,111,866 1,747,309
77,810 -
-
-
-
-
95 -
Miscellaneous 1,849,783
98,936,578
10,947
11,200,718
4,910
Total revenues 1,752,219
Expenditures
Current:

General government
Public safety
Community development
Parks and recreation
Public works
11,453,845
53,249,352
2,191,278
3,704,975
1,463,847
354,526
-
-
371,855
-
-
-
-
-
11,092,323
-
-
Capital outlay -
Debt service:

Principal retirement
Interest and fiscal charges
Total expenditures
-
-
-
-
-
-
72,417,823 11,092,323 371,855
Excess (deficiency) of revenues
over (under) expenditures 26,518,755 108,395 1,380,364
Other Financing Sources (Uses)
Transfers in
Transfers out
1,467,681
(8,907,765)
(7,440,084)
- -
(192,578)
(192,578)
(1,375,454)
Total other financing sources (uses) (1,375,454)
Net changes in fund balances
Fund Balances, Beginning
Fund Balances, Ending
19,078,671
59,774,544
78,853,215
(84,183)
523,567
439,384
4,910
-
$ $ $ 4,910
The accompanying notes are an integral part of these financial statements. -26-
Nonmajor
Governmental
Funds
Total
Governmental
Funds
$ 582,580
434,148
14,281,420
279,754
1,216,538
557,336
$ 89,449,254
1,987,892
28,410,517
3,378,713
4,485,414
(686,139)
1,504,290
28,519
18,884,585
1,854,290
1,894,159
130,774,100
44,920
1,627,059
2,335,881
-
11,259,667
882,798
11,870,620
54,876,411
15,619,482
3,704,975
12,723,514
1,237,324
5,638,129
4,866,191
26,654,645
5,638,129
4,866,191
110,536,646
(7,770,060) 20,237,454
10,907,650
(1,504,817)
9,402,833
12,375,331
(11,980,614)
394,717
1,632,773
27,856,007
29,488,780
20,632,171
88,154,118
$ $ 108,786,289
-27-
City of Hawthorne
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities For the Fiscal Year Ended June 30, 2022
Net changes in fund balances - total governmental funds $ 20,632,171 Amounts reported for governmental activities in the statement of activities are different because:

Governmental funds report capital outlay as expenditures. However in the statement of activities, the cost of those assets is allocated over their estimated useful lives as depreciation expense. This is the amount of capital assets and depreciation expense recorded in the current period.

This amount excludes capital acquisitions/disposals and depreciation expense reported in the internal service fund.

Capital additions $ 5,892,439
Depreciation expense, net of deletions of capital assets (4,819,023) 1,073,416 639,040
Certain revenues in the governmental funds are deferred inflows of resources because they are measurable but not available under the modified accrual basis of accounting. However, the revenues are included on the accrual basis used in the government-wide statements. This amount represents the change during the year:

Grants and other reimbursement revenue
The issuance of long-term debt provides current financial resources to governmental funds, while the repayment of the principal of long term debt consumes the current financial resources of governmental funds.

Neither transaction, however, has an effect on net position:

Principal payments on long-term debt 5,283,129
Principal payments of capital leases 64,929
Principal payments of notes payable 357,898
Changes in pension related items 57,046,405 62,752,361
Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds:

Change in compensated absences
Changes in other post-employment benefits related items Change in accrued interest
(2,847,691)
(1,998,867)
57,555
Amortization of bond discount (8,498)
Amortization of bond premium
Amortization of deferred amount on refunding
163,951
(46,263) (4,679,813)
Internal service funds are used by management to charge the costs of certain activities to individual funds. The net revenue (expense) of the internal service funds is included in the statement of activities. (1,568,452) Changes in net position of governmental activities $ 78,848,723 The accompanying notes are an integral part of these financial statements. -28-
City of Hawthorne
Statement of Net Position
Proprietary Funds
June 30, 2022
Governmental
Activities -
Sewer and
Storm Drain
Internal Service
Airport Storm Water Total Funds
Assets
Current assets:

Cash and investments
Receivables:

Accounts
Leases
Interest
Net pension assets
Inventories
$ 954,841 $ 3,689,496 $ 264,511 $ 4,908,848 $ 1,615,553 434,908
17,760,027
45,344
801,988
-
19,997,108
63,700 -
-
-
-
-
498,608
17,760,027
45,344
1,426,023
-
24,860
- -
-
624,035
-
-
1,222,212
14,311
Total current assets 4,377,231 264,511 24,638,850 2,876,936 Noncurrent assets:

Capital assets, not depreciated
Capital assets, net of depreciation
Total noncurrent assets
1,621,020
6,179,454
7,800,474
1,289,658
1,918,070
3,207,728
-
-
-
2,910,678
8,097,524
11,008,202
-
1,433,973
1,433,973
Total assets 27,797,582
56,341
7,584,959
43,839
264,511
-
35,647,052
100,180
4,310,909
85,862
Deferred Outflows of Resources
Pension related
Liabilities
Current liabilities:

Accounts payable
Accrued liabilities
Unearned revenue
Deposits payable
Compensated absences
Claims and judgements payable
Lease
5,578
14,580
379,084
20,264
17,236
-
528,400
12,461
-
-
-
-
-
-
-
-
533,978
27,041
379,084
20,264
17,236
-
164,065
23,334
- -
-
-
-
-
-
17,279
1,168,036
53,091
1,425,806
- -
Total current liabilities 436,742 540,861 977,603
Noncurrent liabilities:

Compensated absences
Claims and judgements
Total noncurrent liabilities
68,946
-
68,946
-
-
-
-
-
-
68,946
-
68,946
69,118
4,672,146
4,741,263
Total liabilities 505,688 540,861 - 1,046,549 6,167,069 Deferred Inflows of Resources
Pension related
Lease related
640,110
17,600,884
18,240,994
498,076
-
498,076
-
-
-
1,138,186
17,600,884
18,739,070
975,513
-
Total deferred inflows of resources 975,513
Net position (deficit)
Net investment in capital assets
Unrestricted (deficit)
7,800,474
1,306,767
3,207,728
3,382,133
- 11,008,202
4,953,411
1,380,882
264,511 (4,126,693)
Total net position $ 9,107,241 $ 6,589,861 $ 264,511 $ 15,961,613 $ (2,745,811) The accompanying notes are an integral part of these financial statements. -29-
City of Hawthorne
Statement of Revenues, Expenses and Changes in Fund Net Position Proprietary Funds
For the Fiscal Year Ended June 30, 2022
Governmental
Activities -
Sewer and
Storm Drain
Internal Service
Airport Funds
849,531
1,143,678
461,994
Storm Water Total
Operating Revenues
Sales and service charges
Intergovernmental
$ $ 1,454,015 $ 36,728 $ 2,340,274
1,143,678
461,994
$ 8,600,161
-
105,988
-
-
-
Miscellaneous -
Total operating revenues 2,455,203 1,454,015 36,728 3,945,946 8,706,149 Operating Expenses
Administration and general
Materials and supplies
Contractual services
Cost of sales and services
Depreciation
335,207
30,319
89,152
36,472
317,470
364,881
32,044
128,038
55,549
61,513
-
-
-
-
-
700,088
62,363
217,190
92,021
1,955,592
480,798
7,361,321
-
378,983 291,400
Total operating expenses 808,620
1,646,583
1,646,583
642,025
811,990
811,990
- 1,450,645
2,495,301
2,495,301
10,089,111
(1,382,962)
(1,382,962)
Operating income (loss)
Change in net position (deficit) before
transfers
36,728
36,728
Transfers
Transfers in
Transfers out
Total transfers
7,078
(106,019)
(98,941)
1,001
(111,287)
(110,286)
-
-
-
8,079
(217,306)
(209,227)
1,610
(187,100)
(185,490)
Change in net position 1,547,642 701,704 36,728 2,286,074 (1,568,452) Net Position
Net Position (Deficit), Beginning 7,559,599
9,107,241
5,888,157
6,589,861
227,783 13,675,539 (1,177,359)
Net Position (Deficit), Ending $ $ $ 264,511 $ 15,961,613 $ (2,745,811) The accompanying notes are an integral part of these financial statements. -30-
City of Hawthorne
Statement of Cash Flows
Proprietary Funds
For the Fiscal Year Ended June 30, 2022
Governmental
Activities
Internal
Sewer and Service
Airport Storm Drain Storm Water Total Funds
Cash flows from operating activities
Cash received from customers and users
Cash paid to suppliers for goods and services
Cash paid to employees for services
$ 2,210,773
(91,899)
$ 1,515,154
331,292
$ 36,728 $ 3,762,655
239,393
$ 8,740,292
(8,042,789)
(729,793)
-
(587,698) (536,619) - (1,124,317)
Net cash provided (used) by operating activities 1,531,176 1,309,827 36,728 2,877,731 (32,290) Cash flows from noncapital financing activities
Cash paid to other funds
Cash received from other funds
Transfer from debt service funds
Transfer to debt service funds
(310,000)
-
7,078
-
-
-
-
-
-
(310,000)
-
8,079
-
310,000
1,610
(187,100)
1,001
(106,019) (111,287) (217,306)
Net cash used for noncapital financing activities (408,941) (110,286) - (519,227) 124,510 Cash flows from capital and related financing activities Acquisition and construction of capital assets
Payments on capital lease
(1,458,946)
-
(1,289,658)
-
-
-
(2,748,604)
-
(236,853)
(87,373)
Net cash used for capital and related financing activities Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents, beginning of year
(1,458,946)
(336,711)
1,291,552
954,841
(1,289,658)
(90,117)
- (2,748,604)
(390,100)
5,298,948
4,908,848
(324,226)
(232,006)
1,847,559
1,615,553
36,728
227,783
264,511
3,779,613
Cash and cash equivalents, end of year $ 3,689,496
$
$
$
$
$
$
$
$
$
Reconciliation of operating income (loss) to net cash
provided (used) by operating activities:

Operating income (loss) 1,646,583
317,470
811,990
61,513
36,728
-
2,495,301
378,983
(1,382,962)
291,400
Adjustments to reconcile operating income (loss) to
net cash provided (used) by operating activities:

Depreciation
(Increase) decrease in assets/deferred outflows:

Accounts receivable
Interest receivable
Lease receivable
Deferred outflows of resources - pension
Net pension asset
(364,728)
(45,344)
332,704
29,834
61,139 -
-
-
-
-
(303,589)
(45,344)
332,704
53,048
(1,499,368)
34,143
-
-
-
-
23,214
(656,131)
45,467
(843,237) (1,285,074)
Increase (decrease) in liabilities/deferred inflows:

Accounts payable
Accrued liabilities
Due to other governments
Claims and judgements payable
Unearned revenue
(28,018) 513,455 -
-
-
-
-
-
-
485,437 (253,181)
480
-
-
324,785
-
(260) 220
-
-
324,785
-
-
-
-
-
-
-
2,012
1,527,798
-
Deposits payable -
Compensated absences 16,457 16,457 18,801
Net pension liability
Deferred inflows of resources - pension
Deferred inflows of resources - leases
Total adjustments
636,037
(491,847)
(115,407)
494,907
-
497,837
-
-
-
1,130,944
(491,847)
382,430
969,306
-
1,350,672
Net cash provided (used) by operating activities $
$
1,531,176 $ 1,309,827 $ 36,728 $
$
2,877,731 $ (32,290)
Schedule of Noncash investing, capital and related
financing activities
Lease of asset 18,092,731 $
$
-
-
$
$
-
-
18,092,731 $
$
-
Deferred inflows - Leases $ (18,092,731) $ (18,092,731) - The accompanying notes are an integral part of these financial statements. -31-
City of Hawthorne
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2022
Successor Agency
to the Dissolved
Redevelopment
Agency Community
Private Purpose
Trust Fund
Facilities Districts
Custodial Fund
Assets
Cash and investments
Receivables:
$ 1,932,975 $ 747,747
Taxes
Interest
- 24,159
2,328 1,101
Restricted assets:

Cash and investments with fiscal agents
Total assets
2 3,188,418
1,935,305 3,961,425
Deferred Outflows of Resources
Deferred amount on refunding 1,021,459 -
Liabilities
Accounts payable
Accrued liabilities
Interest payable
Advances from City of Hawthorne
Due to City of Hawthorne
Long-term liabilities:

Due within one year
Due in more than one year
Total liabilities
-
3,449
346,750
45,806,286
328,743
2,889
-
-
-
-
1,893,386
55,501,273
103,879,887
-
-
2,889
Fiduciary Net Position (Deficit)
Restricted for other agencies
Unrestricted net position
Total fiduciary net position
- 3,958,536
-
3,958,536
(100,923,123)
$ (100,923,123) $
The accompanying notes are an integral part of these financial statements. -32-
City of Hawthorne
Statement of Changes in Fiduciary Net Position
Fiduciary Funds
For the Fiscal Year Ended June 30, 2022
Successor Agency
to the Dissolved
Redevelopment
Agency
Private-Purpose
Trust Fund
Community
Facilities Districts
Custodial Fund
Additions
Taxes $ 4,064,521 $ -
Use of money and property 2,452
Miscellaneous revenue
Tax collection for other agencies
Contribution collection for other agencies
Total additions
37,100
13,454 -
-
-
2,450,643
2,124,128
4,115,075 4,577,223
Deductions
Administrative expenses
Contractual services
Debt service:
215,076
1,395,943
70,602
-
Principal payments
Interest and fiscal charges
Payment to refunded bond escrow
Total deductions
- 1,799,400
753,899
1,416,233
4,040,134
1,885,463
3,496,482
Change in fiduciary net position 618,593
Net position (deficit), beginning
Net position (deficit), ending
537,089
3,421,447
3,958,536
(101,541,716)
$ (100,923,123) $
The accompanying notes are an integral part of these financial statements. -33-
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City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
1) ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Entity
The City of Hawthorne was incorporated on July 25, 1922, as a general law city and operates under a Council/City Manager form of government. It is governed by an elected five-member council.

As required by generally accepted accounting principles, these financial statements present the financial activities of the City of Hawthorne (the primary government) and its component units.

The component units discussed below are included in the City's reporting entity because of the significance of their operational or financial relationship with the City. These entities are legally separate from each other. However, the City of Hawthorne elected officials have a continuing full or partial accountability for fiscal matters of the other entities. The financial reporting entity consists of: 1) the City, 2) organizations for which the City is financially accountable, and 3) organizations for which the nature and significance of their relationship with the City are such that exclusions would cause the City's financial statements to be misleading or incomplete.

An organization is fiscally dependent on the primary government if it is unable to adopt its budget, levy taxes or set rates or charges, or issue bonded debt without approval by the primary government. In a blended presentation, component units’ balances and transactions are reported in a manner similar to the balances and transactions of the City. Component units are presented on a blended basis when the component unit's body is substantially the same as the City’s or the component unit provides services almost entirely to the City.

Housing Authority of the City of Hawthorne (Hawthorne Housing Authority) The Housing Authority of the City of Hawthorne is a public agency created by the City in 1984 to administer housing assistance programs for qualified low-income residents. The Housing Authority is governed by the City Council. The Housing Authority's administrative functions are performed by City employees. The financial activity of the Housing Authority is included in the City's financial statements as the Housing Authority Special Revenue Fund. Separate financial statements were not prepared for the Housing Authority of the City of Hawthorne.

Parking Authority of the City of Hawthorne (Parking Authority) The Parking Authority is a public financing agency created by the City to provide parking facilities for the City's Redevelopment Plaza Project. The City Council serves as the Parking Authority's governing board and is, therefore, responsible for the fiscal and administrative activities of this related entity. The financial activity of the Parking Authority is reported in the City's financial statements in the Community Facilities District Fund which is a custodial fund.

Separate financial statements were not prepared for the Parking Authority. -34-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
1) ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (continued)
Description of Entity, (continued)
Hawthorne Public Financing Authority (Authority)
The Authority was formed as a result of a joint powers agreement between the City of Hawthorne (the City) and the Community Redevelopment Agency of the City of Hawthorne (the Agency). The purpose of the Authority is to provide financing for the acquisition, construction and improvements of capital assets and infrastructure, working capital requirements, or liability or other insurance programs of any local Agency. The Authority is governed by a Board of Directors, composed of the five members of the City’s City Council. The financial activity of the Authority is reported in the City’s financial statements as the Hawthorne Public Financing Authority Debt Service Fund. Separate financial statements were not prepared for the Hawthorne Public Financing Authority.

Government-wide and Fund Financial Statements
The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the non-fiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements, however, interfund services provided and used are not eliminated in the process of consolidation. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable.

The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment.

Program revenues include: 1) charges to customers or applicants who purchase, use or directly benefit from goods, services or privileges provided by a given function or segment, and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Internally dedicated resources, such as taxes, are reported as general revenues rather than program revenues.

Separate financial statements are provided for governmental funds, proprietary funds and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. -35-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
1) ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (continued)
Measurement Focus, Basis of Accounting and Financial Statement Presentation Measurement focus is commonly used to describe the types of transactions and events that are reported in a fund's operating statement. Once it has been determined whether a fund is to measure changes in total economic resources or changes in current financial resources, the next issue to be addressed is the timing of the recognition of transactions and events. The technical term that describes the criteria governing the timing of the recognition of transactions and events is basis of accounting.

The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.

Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 90 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due.

Property taxes, franchise taxes, licenses and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the government.

Grants, entitlements or shared revenues recorded in governmental funds are recognized as revenue in the accounting period when they become susceptible to accrual, i.e., both measurable and available (modified accrual basis). Grants received before the revenue recognition criteria have been met are reported as unearned revenue, a liability account. Such resources not received are reported as a receivable if the revenue recognition criteria have been met.
-36-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
1) ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (continued)
Measurement Focus, Basis of Accounting and Financial Statement Presentation, (continued)
The City reports the following major governmental funds:
 The General Fund is the City's primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund.


The Hawthorne Housing Authority Special Revenue Fund is used to account for the housing assistance programs for the qualified low-income residents.

The American Rescue Plan Act Fund is used to provide relief to the City for the negative impacts caused from the COVID-19 Pandemic.

The City's fund structure also includes the following fund types:

Special Revenue Funds are used to account for the proceeds of specific revenue sources that are legally restricted to expenditure for specific purposes.

Fiduciary Funds are used to account for assets held by the City as an agent for individuals, private organizations, other governmental units and/or other funds. These funds report a Statement of Fiduciary Net Position and a Statement of Changes in Fiduciary Net Position. The City has the following Fiduciary Funds:


Custodial Fund- This fund accounts for money and property held by the City as trustee or custodian. This fund reports the assets, liabilities, and activities of the Community Facilities Districts. The Custodial Funds account for assets held for specific uses that are not part of the City's operating activities; specifically, monies held by the City as an agent for property owners with special assessments and monies collected from individuals, private organizations or other governments who have made special deposits with the City for various purposes.

Successor Agency Private Purpose Trust Fund - Private Purpose Trust Fund is a fiduciary fund type used by the City to report trust arrangements under which principal and income benefit other governments. This fund reports the assets, liabilities, and activities of the Successor Agency to the Dissolved Hawthorne Redevelopment Agency. -37-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
1) ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (continued)
Measurement Focus, Basis of Accounting and Financial Statement Presentation, (continued)
The City reports the following major proprietary funds:


The Airport Fund accounts for the operation of the City's airport, which is operated in a manner similar to a private airport.

The Sewer and Storm Drain Fund accounts for the operation of the City’s sewer services.
 The Storm Water Fund accounts for the operation of the City’s storm water services.

Additionally, the City reports the following fund type:
 Internal Service Funds account for financial transactions related to repair, replacement and maintenance of City-owned equipment and the City's self-insurance programs.

These services are provided to other departments or agencies of the City on a cost reimbursement basis.

The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The City has elected to follow all pronouncements of the GASB.

Use of Estimates
The preparation of basic financial statements in conformity with accounting principles generally accepted in the United States of America requires City management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenditures during the reporting period. Actual results could differ from those estimates.
-38-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
1) ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (continued)
Fund Balance Reporting
Fund balance classifications are comprised of a hierarchy based primarily on the extent to which a government is bound to observe constraints imposed upon the use of the resources reported in governmental funds, described as follows:

Nonspendable fund balance includes amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact. The City’s nonspendable fund balance represents inventories, prepaid items, and long-term advances, the collectability of which is not assured.

Restricted fund balance includes resources that are subject to externally enforceable legal restrictions. It includes amounts that can be spent only for the specific purposes stipulated by constitution, external resource providers, or through enabling legislation. All special revenue funds are classified as restricted.

Committed fund balance includes amounts that can be used only for the specific purposes determined by a formal action of the City’s highest level of decision-making authority. The City does not have committed fund balances as of June 30, 2022.

Assigned fund balance includes funds that are set aside for specific purposes by the City’s highest level of decision making authority or a body or official that has been given the authority to assign funds. The City does not have assigned fund balances as of June 30, 2022.

Unassigned fund balance is the residual classification for the City’s fund balance and includes all spendable amounts not contained in the other classifications. This category also provides the resources necessary to meet unexpected expenditures and revenue shortfalls. The General Fund is the only fund that reports a positive unassigned fund balance amount.

The City Council, as the City’s highest level of decision-making authority, may commit fund balance for specific purposes pursuant to constraints imposed by formal actions taken.

Committed amounts cannot be used for any other purpose unless the City Council removes or changes the specific use through the same type of formal action taken to establish the commitment. The City Council considers a resolution to constitute a formal action of the City Council for the purposes of establishing committed fund balance.

The City Council delegates the authority to assign fund balance to the City Manager for purposes of reporting in the annual financial statements. -39-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
1) ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (continued)
Fund Balance Reporting, (continued)
The City considers the restricted fund balances to have been spent when an expenditure is incurred for purposes for which both unrestricted and restricted fund balance is available. The City considers unrestricted fund balances to have been spent when an expenditure is incurred for purposes for which amounts in any of the unrestricted classifications of fund balance could be used. When expenditures are incurred for purposes for which amounts in any of the unrestricted fund balance classifications could be used, it is the policy of the City to reduce the committed amounts first, followed by assigned amounts, and then unassigned amounts.

Net Position
Classifications of Net Position are as follows:

Net investment in capital assets - This represents the City's total investment in capital assets, net of accumulated depreciation and outstanding debt obligations related to those capital assets.

Restricted net position - Restricted net position include resources in which the City is legally or contractually obligated to spend resources in accordance with restrictions imposed by external third parties or by enabling legislation adopted by the City.

Unrestricted net position - Unrestricted net position represents resources available to be used for transactions relating to the general operations of the City, and may be used at the discretion of the governing board, as designated, to meet current expenses or for specific future purposes.

Flow Assumption for Net Position
Sometimes the City will fund outlays for a particular purpose from both restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted net position and unrestricted net position in the governmentwide and proprietary fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the government’s policy to consider restricted net position to have been depleted before unrestricted net position is applied.
-40-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
1) ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (continued)
Cash and Cash Equivalents
For purpose of the statement of cash flows, the City considers cash and cash equivalents as short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. The City follows the practice of pooling cash and investments of all funds. Since cash and investments are pooled, the City utilizes the assumption that cash and investments in the Enterprise and Internal Service Funds are cash and cash equivalents.

Investments
Investments for the City as well as for its component units are reported at fair value, and all investment income; including changes in the fair value of investments, is recognized as revenue in the operating statements. The City's policy is generally to hold investments until maturity or until fair values equal or exceed cost. The State Treasurer's Investment Pool operates in accordance with appropriate state laws and regulations. The reported value of the pool is the same as the fair value of the pool shares.

Receivables and Payables
Activities between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either due to/from other funds (i.e., the current portion of interfund loans) or advances to/from other funds (i.e., the non-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.

Advances to Successor Agency, as reported in the fund financial statements, are offset by unavailable revenue account in applicable governmental funds to indicate that they are not available for appropriation and are not expendable available financial resources.

All trade and property tax receivables are shown net of allowance for uncollectibles. -41-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
1) ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (continued)
Inventories
Inventories of materials and supplies are carried at cost on a first-in, first-out basis. The City uses the consumption method of accounting for inventories. Special reporting treatments are also applied to governmental fund inventories to indicate that they do not represent available spendable resources, even though they are a component of net current assets. Such amounts are generally offset by fund balance nonspendable accounts.

Prepaid Costs and Land Held for Resale
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements, using the consumption method. Land purchased for resale is capitalized as inventory at acquisition costs or net realizable value if lower. The fund balances in the governmental funds have been classified as nonspendable for amounts equal to prepaid costs and land held for resale in the fund-level statements since these amounts are not available to the City's current operations.

Capital Assets
Capital assets, which include property, plant, equipment, intangible assets and infrastructure assets (e.g., roads, bridges, sidewalks and similar items), are reported in the applicable governmental or business-type activities columns in the government-wide financial statements.

Capital assets are defined by the City as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of five years. Such assets are recorded at historical cost if purchased or constructed. Donated capital assets are recorded at the estimated acquisition value at the time of acquisition. The City has reported its general infrastructure assets which include streets, sidewalks, storm drains, curbs and gutters, handicap ramps and trails.
-42-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
1) ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (continued)
Capital Assets, (continued)
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized.

Major outlays for capital assets and improvements are capitalized as projects or as constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed.

The provision for depreciation of capital assets of the primary government, as well as its component units, is computed using the straight-line method over the following estimated useful lives:

Years
Curbs and gutters
Parks
Sewer
Sidewalks
Streets
Traffic signs and signals
Machinery and equipment
Vehicles
40 50
40 40
50 30
5-50
5 Buildings 40
Deferred Outflows and Inflows of Resources
A deferred outflow of resources is defined as a consumption of net assets that applies to future periods. A deferred inflow of resources is defined as an acquisition of net assets that applies to future periods Refer to Note 17 for the list of deferred inflows and deferred outflows of resources the City has recognized as of June 30, 2022, excluding pension and OPEB related amounts.

Claims and Judgments
The City is partially self-insured for general liability and workers' compensation claims. The City records estimated liabilities for such claims filed or estimated to be filed for incidents which have occurred. The City's claims and judgments payable are recorded in the City's Insurance Reserve Internal Service Fund.
-43-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
1) ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (continued)
Employee Compensated Absences
Vacation pay is payable to employees at the time a vacation is taken or upon termination of employment. Employees may accrue a maximum of half their annual accrual rate. Upon termination an employee will be paid for any unused accrued vacation pay. Sick leave is payable when an employee is unable to work because of illness. Upon retirement, employees are entitled to receive the full value of their accumulated sick leave time.

Only the short-term liability for compensated absences (the amount due to employees for future absences, such as vacation and compensatory time, which are attributable to services already rendered) is reported as a current liability in the governmental funds and only if they have matured, for example, as a result of employee resignations and retirements; the long-term liability is reported in the government-wide financial statements. The short-term liability is the amount that will be liquidated with current financial resources and is expected to be paid during the next fiscal year. All of the liability for compensated absences applicable to proprietary funds is reported in those funds.

The long-term portion of compensated absences payable has been accrued for the Governmental Activities on the Government-Wide Financial Statement. Also, compensated absences are generally liquidated by the General Fund. There is no fixed payment schedule to pay these liabilities.

Property Tax Revenue
Property tax revenue is recognized in the fiscal year for which the taxes have been levied providing they become available. Available means then due, or past due and receivable within the current period and collected within the current period or expected to be collected soon enough thereafter (not to exceed 60 days) to be used to pay liabilities of the current period. The County of Los Angeles collects property taxes for the City. Tax liens attach annually as of 12:01 A.M. on the first day in January preceding the fiscal year for which the taxes are levied. Taxes are levied on both real and personal property as it exists on that date. The tax levy covers the fiscal period July 1 to June 30. All secured personal property taxes and one-half of the taxes on real property are due November 1; the second installment is due February 1. All taxes are delinquent, if unpaid, on December 10 and April 10, respectively. Unsecured personal property taxes become due on March 1 each year and are delinquent, if unpaid, on August 31. -44-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
1) ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (continued)
Pensions
For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Plan and additions to/deductions from the Plan’s fiduciary net position have been determined on the same basis. For this purpose, benefit payments (including refunds of employee contributions) are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value.

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

Valuation Date (VD) June 30, 2020
Measurement Date (MD)
Measurement Period (MP)
June 30, 2021
July 1, 2020 to June 30, 2021
Other Post-Employment Benefits (OPEB)
For purposes 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 plan (OPEB Plan) and additions to/deductions from the OPEB Plan’s fiduciary net position have been determined on the same basis. For this purpose, benefit payments are reported at fair value.

GASB 65 requires that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used.

Valuation Date (VD) June 30, 2021
Measurement Date (MD)
Measurement Period (MP)
June 30, 2021
July 1, 2020 to June 30, 2021
New Accounting Pronouncements
During the fiscal year ended June 30, 2022, the City implemented the following GASB standard:

GASB Statement No. 87 – The Governmental Accounting Standards Board (GASB) has issued Statement No. 87, Leases. The primary objective of this statement is to improve guidance regarding the identification of lease activities for accounting and financial reporting purposes and how those activities should be reported in the financial statements. -45-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
2) CASH AND INVESTMENTS, (continued)
Cash and investments are classified in the accompanying financial statements as follows:

Statement of net position:

Cash and investments $ 111,778,216
Cash and investments with fiscal agents 14,998,498
Statement of fiduciary net position:

Successor Agency to the Dissolved RDA
Cash and investments
Cash and investments with fiscal agents
Community Facilities District
1,932,975
2 Cash and investments 747,747
Cash and investments with fiscal agents 3,188,418
Total $ 132,645,856
Cash and investments at June 30, 2022, consisted of the following:

Cash and cash equivalents:

Petty cash
Demand deposits - City
Demand deposits - Successor Agency
Total cash and cash equivalents
$ 3,489
47,214,443
211,870
47,429,802
Investments:

Local Agency Investment Fund
Negotiable Certificates of Deposit
U.S. Government Bonds
Corporate Bonds
69,366,259
6,235,894
2,342,099
441,480
Fidelity Money Market
Held by Bond Trustee
Total investments
2,162,958
4,667,363
85,216,053
Total $ 132,645,855
The City maintains a cash and investment pool that is available for use for all funds. Each fund type's position in the pool is reported on the combined balance sheet as cash and investments.

The City has adopted an investment policy, which authorizes it to invest in various investments. -46-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
2) CASH AND INVESTMENTS, (continued)
Investments
Under provision of the City's investment policy, and in accordance with the California Government Code, the following investments are authorized:

Authorized by
Investment
Policy
Maximum
Percentage
of Portfolio
Maximum
Investment
In One Issuer
Maximum
Authorized Investment Type Maturity
U.S. Treasury Obligation
U.S. Agency Securities
Banker's Acceptances
Commercial Paper
Certificate of Deposit
Medium-Term Notes
Money Market Mutual Funds
Local Agency Investment Fund
Negotiable Certificates of Deposits
Mutual Funds
Local Government Investment Pool
Supranational
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
5 years
5 years
180 days
270 days
5 years
5 years
N/A
N/A
5 years
N/A
None
75%
40%
25%
None
30%
20%
None
30%
20%
20%
30%
20%
None
30%
30%
10%
None
5%
None
$75 million
None
10%
N/A
5 years
N/A
None
None
Asset Backed Securites 10%
Investments Authorized by Debt Agreements
The above investments do not address investment of debt proceeds held by a bond trustee.

Investments of debt proceeds held by a bond trustee are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the City's investment policy.

Investments in State Investment Pool
The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. LAlF is overseen by the Local Agency Investment Advisory Board, which consists of five members, in accordance with State statute. The State Treasurer's Office audits the fund annually. The fair value of the portion in the investment pool is the same as the value of the pool shares.
-47-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
2) CASH AND INVESTMENTS, (continued)
Credit Risk
The City's investment policy limits investments in commercial paper to those rated "A-1” or higher by Standard and Poor's (S&P) or by Moody's. Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization.

Presented below is the minimum rating required by the City’s Investment Policy and the actual rating as of June 30, 2022:

Minimum
Legal
Investment Type Amount Rating AAA Not Rated
External Investment Pools -
Local Agency Investment Fund
Negotiable Certificates of Deposits
U.S. Government Bonds
Med - Term Notes
$ 69,366,259
6,235,894
2,342,099
441,480
N/A
N/A
N/A
N/A
N/A
$ - $ 69,366,259
6,235,894
2,342,099
441,480
-
-
-
-
Fidelity Money Market 2,162,958 2,162,958
Held by Bond Trustee:

Money Market Mutual Funds
Investment Agreements
3,940,238
727,125
N/A
N/A
-
-
3,940,238
727,125
Total $ 85,216,053 $ 9,019,473 $ 76,196,580
Custodial Credit Risk
The California Government Code requires California financial institutions to secure a City's deposits by pledging government securities with a value of 110% of a City's deposits. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of a City's total deposits. The City Treasurer may waive the collateral requirement for deposits which are fully insured up to $250,000 by the FDIC. The collateral for deposits in federal and state chartered banks is held in safekeeping by an authorized Agent of Depository recognized by the State of California Department of Banking. These securities are physically held in an undivided pool for all California public agency depositors. Under Government Code Section 53655, the placement of securities by a financial institution with an "Agent of Depository" has the effect of perfecting the security interest in the name of the local governmental agency. Accordingly, all collateral held by California Agents of Depository are considered to be held for, and in the name of, the local governmental agency.

The custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover deposits or will not be able to recover collateral securities that are in the possession of an outside party. At June 30, 2022, the City deposits (bank balances) were collateralized under California Law. -48-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
2) CASH AND INVESTMENTS, (continued)
Concentration of Credit Risk
The City's investment policy imposes restrictions on the percentage that the City can invest in certain types of investments. As of June 30, 2022, there were no investments in any one issuer that represents 5% or more of the total City’s investments. Investments guaranteed by the U.S. government and investments in mutual funds and external investment pools are excluded from this requirement.

Interest Rate Risk
The City's investment policy limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. The City has elected to use the segmented time distribution method of disclosure for its interest rate risk.

As of June 30, 2022, the City had the following investments and original maturities:

Less than
1 year
1 to 3
years
3 to 5
Investment Types years
External Investment Pools -
Local Agency Investment Fund
Negotiable Certificates of Deposits
U.S. Government Bonds
Med - Term Notes
Fidelity Money Market
Held by Bond Trustee:

Money Market Mutual Funds
Investment Agreements
Total Investments
Total
$ 69,366,259 $ - $
$
- $ 69,366,259
6,235,894
2,342,099
441,480
299,355 5,936,539
2,342,099
441,480
-
-
-
-
-
-
-
2,162,958 2,162,958
3,940,238
727,125
$ 76,495,935
-
-
-
-
-
3,940,238
727,125
$ 8,720,118 $ 85,216,053
-49-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
2) CASH AND INVESTMENTS, (continued)
Fair Value Measurements
GASB Statement No. 72, Fair Value Measurements and Application, establishes a fair value hierarchy consists of three broad levels: Level 1 inputs consist of quoted prices (unadjusted) for identical assets and liabilities in active markets that a government can access at the measurement date, Level 2 inputs consist of inputs other than quoted prices that are observable for an asset or liability, either directly or indirectly, that can include quoted prices for similar assets or liabilities in active or inactive markets, or market-corroborated inputs, and Level 3 inputs have the lowest priority and consist of unobservable inputs for an asset or liability. The valuation method used for rental properties is the Leased Fee Market method, which is dependent on the income generated from the rental properties.

The following table presents the balances of the assets measured at fair value on a recurring basis as of June 30, 2022:

Fair Value Measurement Using
Investments by Fair Value Level Total Level 1 Level 2 Level 3 Negotiable Certificates of Deposit
U.S. Government Bonds
Med - Term Notes
$ 6,235,894
2,342,099
441,480
$
$
-
-
-
-
$6,235,894
2,342,099
441,480
$
$
-
-
-
Investment Agreements 727,125 727,125 -
Total Investments by Fair Value Level 9,746,598 - $9,746,598 - Not subject to the Fair Value Hierarchy:

Local Agency Investment Fund
Fidelity Money Market
69,366,259
2,162,958
Held by Bond Trustee:

Money Market Mutual Funds 3,940,238
Total $ 85,216,053
-50-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
3) LEASES RECEIVABLE
For the year ended June 30, 2022, the financial statements include the adoption of GASB Statement No. 87, Leases. The primary objective of this statement is to enhance the relevance and consistency of information about governments' leasing activities. This statement establishes a single model for lease accounting based on the principle that leases are financings of the right to use an underlying asset. Under this Statement, a lessee is required to recognize a lease liability and an intangible right-to-use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources. For additional information, refer to the disclosures below.

On July 1, 2021, City entered into a 253-month lease as Lessor for the use of Verizon Wireless/Jim Thorpe Park. An initial lease receivable was recorded in the amount of $76,747.

As of June 30, 2022, the value of the lease receivable is $73,469. The lessee is required to make monthly fixed payments of $3,278. The lease has an interest rate of 2.3980%. The value of the deferred inflow of resources as of June 30, 2022, was $73,117, and the City recognized lease revenue of $3,631 during the fiscal year. The lessee has 3 extension option(s), each for 60 months.

On July 1, 2021, the City entered into a 319-month lease as Lessor for the use of Oceangate Commerce Center. An initial lease receivable was recorded in the amount of $495,875. As of June 30, 2022, the value of the lease receivable is $477,831. The lessee is required to make annual fixed payments of $26,000. The lease has an interest rate of 2.5220%. The value of the deferred inflow of resources as of June 30, 2022, was $477,259, and the City recognized lease revenue of $18,617 during the fiscal year. The lessee has 2 extension option(s), each for 60 months.

On July 1, 2021, the City entered into a 113-month lease as Lessor for the use of Cingular Wireless/Jim Thorpe Park. An initial lease receivable was recorded in the amount of $436,985.

As of June 30, 2022, the value of the lease receivable is $399,260. The lessee is required to make monthly fixed payments of $3,578. The lease has an interest rate of 1.5270%. The value of the deferred inflow of resources as of June 30, 2022, was $390,770, and the City recognized lease revenue of $46,215 during the fiscal year. The lessee has 1 extension option(s), each for 60 months.

On July 1, 2021, the City entered into a 126-month lease as Lessor for the use of TMobile/Eucalyptus Park. An initial lease receivable was recorded in the amount of $354,056. As of June 30, 2022, the value of the lease receivable is $326,282. The lessee is required to make monthly fixed payments of $2,723. The lease has an interest rate of 1.6810%. The value of the deferred inflow of resources as of June 30, 2022, was $320,407, and the City recognized lease revenue of $33,648 during the fiscal year. The lessee has 2 extension option(s), each for 60 months.
-51-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
3) LEASES RECEIVABLE, (continued)
On July 1, 2021, the City entered into a 198-month lease as Lessor for the use of 5100 W Rosecrans Avenue. An initial lease receivable was recorded in the amount of $851,456. As of June 30, 2022, the value of the lease receivable is $797,686. The lessee is required to make annual variable principal and interest payments of $70,000 based on a CPI index of 0.00%.

The lease has an interest rate of 3.6500%. The value of the deferred inflow of resources as of June 30, 2022, was $799,922, and the City recognized lease revenue of $51,534 during the fiscal year.

On July 1, 2021, City entered into a 53-month lease as Lessor for the use of 13310 Hawthorne Blvd. An initial lease receivable was recorded in the amount of $138,809. As of June 30, 2022, the value of the lease receivable is $105,585. The lessee is required to make annual fixed payments of $33,765. The lease has an interest rate of 0.8930%. The value of the deferred inflow of resources as of June 30, 2022, was $107,519, and City recognized lease revenue of $31,291 during the fiscal year.

On July 1, 2021, the City entered into a 68-month lease as Lessor for the use of Crenshaw Blvd. An initial lease receivable was recorded in the amount of $308,770. As of June 30, 2022, the value of the lease receivable is $251,175. The lessee is required to make annual fixed payments of $60,100. The lease has an interest rate of 1.2170%. The value of the deferred inflow of resources as of June 30, 2022, was $254,281, and the City recognized lease revenue of $54,489 during the fiscal year.

On July 1, 2021, the City entered into a 317-month lease as Lessor for the use of 14900 Hindry Avenue. An initial lease receivable was recorded in the amount of $543,579. As of June 30, 2022, the value of the lease receivable is $492,657. The lessee is required to make annual fixed payments of $26,000. The lease has an interest rate of 2.5010%. The value of the deferred inflow of resources as of June 30, 2022, was $523,025, and the City recognized lease revenue of $20,553 during the fiscal year. The lessee has 3 extension option(s), each for 60 months.

On July 1, 2021, the City entered into a 241-month lease as Lessor for the use of Cingular Wireless/Eucalyptus Park. An initial lease receivable was recorded in the amount of $611,075.

As of June 30, 2022, the value of the lease receivable is $586,011. The lessee is required to make monthly variable principal and interest payments of $3,175 based on a CPI index of

0.00%. The lease has an interest rate of 2.3780%. The value of the deferred inflow of resources as of June 30, 2022, was $580,682, and the City recognized lease revenue of $30,393 during the fiscal year. The lessee has 3 extension option(s), each for 60 months.

On July 1, 2021, the City entered into a 234-month lease as Lessor for the use of Zelman Airport Lease. An initial lease receivable was recorded in the amount of $1,797,512. As of June 30, 2022, the value of the lease receivable is $1,720,763. The lessee is required to make monthly fixed payments of $9,588. The lease has an interest rate of 2.3780%. The value of the deferred inflow of resources as of June 30, 2022, was $1,705,332, and the City recognized lease revenue of $92,180 during the fiscal year. The lessee has 3 extension option(s), each for 60 months.
-52-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
3) LEASES RECEIVABLE, (continued)
On July 1, 2021, the City entered into a 491-month lease as Lessor for the use of Hawthorne Municipal Airport. An initial lease receivable was recorded in the amount of $15,910,384. As of June 30, 2022, the value of the lease receivable is $15,655,514. The lessee is required to make monthly variable principal and interest payments of $52,348 based on a CPI index of

0.00%. The lease has an interest rate of 2.5830%. The value of the deferred inflow of resources as of June 30, 2022, was $15,522,244, and the City recognized lease revenue of $388,137 during the fiscal year. The lessee has 2 extension option(s), each for 60 months.

On July 1, 2021, the City entered into a 400-month lease as Lessor for the use of HHO/Tarmac Airport Lease. An initial lease receivable was recorded in the amount of $384,836. As of June 30, 2022, the value of the lease receivable is $383,750. The lessee is required to make monthly fixed payments of $1,500. The lease has an interest rate of 2.5830%. The value of the deferred inflow of resources as of June 30, 2022, was $373,304, and the City recognized lease revenue of $11,531 during the fiscal year.
.
-53-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
4) CAPITAL ASSETS
Capital asset activity was as follows for the year ended June 30, 2022:

Governmental activities: Balance Balance
June 30, 2021 Additions Deletions June 30, 2022
Capital assets, not being depreciated:

Land $ 6,966,028
1,594,336
$ - $ - $ 6,966,028
Construction in progress 5,417,462 (6,530,020) 481,778
Total capital assets, not being
depreciated 8,560,364 5,417,462
-
(6,530,020)
-
7,447,806
Capital assets, being depreciated:

Structures and improvements
Machinery and equipment:

City
55,113,808 55,113,808
9,686,068
6,210,758
372,254
236,853
-
- 10,058,322
Equipment replacement/vehicles 6,397,543
Parking Authority - structures
Infrastructure
(50,068)
16,359,554
159,557,697
7,335,446
- 16,359,554
166,087,717
7,345,499
6,530,020
102,723
-
Investment in joint venture (RCC) (92,670)
Total capital assets, being depreciated 254,263,331 7,241,850 (142,738) 261,362,443 Less accumulated depreciation for:

Structures and improvements (33,332,522) (1,474,275) - (34,806,797) Machinery and equipment:

City (7,975,851)
(4,722,238)
(16,181,292)
(64,460,885)
(3,204,189)
(416,954)
(291,400)
(11,121)
- (8,392,805)
(4,963,570)
(16,192,413)
(67,059,600)
(3,429,477)
Equipment replacement/vehicles
Parking Authority - structures
Infrastructure
50,068
-
(2,598,715) -
Investment in joint venture (RCC) (317,958) 92,670
Total accumulated depreciation (129,876,977) (5,110,423) 142,738 (134,844,662) Total capital assets, being
depreciated, net 124,386,354 2,131,427
7,548,889
- 126,517,781
Total governmental activities $ 132,946,718 $ $ (6,530,020) $133,965,587 -54-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
4) CAPITAL ASSETS, (continued)
Business-type activities: Balance
June 30, 2021
Balance
Additions Deletions June 30, 2022
Capital assets, not being depreciated:

LLand $ 37,314
124,760
$ - $ -
-
$ 37,314
Construction in progress 2,748,604 2,873,364
Total capital assets, not being
depreciated 162,074 2,748,604 - 2,910,678
Capital assets, being depreciated:

Structures and improvements
Machinery and equipment
Infrastructure:
3,020,109
28,130
-
-
-
-
3,020,109
28,130
Airport
Storm and sewer drain
10,723,022
13,032,235
-
-
-
-
10,723,022
13,032,235
Total capital assets, being depreciated 26,803,496 - - 26,803,496 Less accumulated depreciation for:

Structures and improvements
Machinery and equipment
Infrastructure:
(2,011,609)
(28,130)
(51,395)
-
-
-
(2,063,004)
(28,130)
Airport
Storm and sewer drain
(5,234,598)
(11,052,652)
(266,075)
(61,513)
-
-
(5,500,673)
(11,114,165)
Total accumulated depreciation (18,326,989) (378,983) - (18,705,972) Total capital assets, being
depreciated, net 8,476,507
8,638,581
(378,983)
2,369,621
-
-
8,097,524
Total business-type activities $ $ $ $ 11,008,202
Depreciation expense was charged to functions/programs of the primary government as follows:

Governmental Activities:

General government
Public safety
Public works
Community development
Parks and recreation
Internal service fund-equipment replacement
$ 610,084
1,355,816
2,621,317
84,030
147,776
291,400
Total depreciation expense – governmental activities $
$
5,110,423
Business-type Activities:

Structures and improvements - Airport
Infrastructure:
51,395
Airport
Sewer and storm drain
266,075
61,513
Total depreciation expense – business-type activities $ 378,983 -55-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
4) CAPITAL ASSETS, (continued)
Assets acquired through leases are as follows:

Machinery and equipment
Less: Accumulated Depreciation
$
$
1,003,640
(781,269)
222,371
5) INTERFUND ACTIVITY
The following represents the City’s interfund activity for the fiscal year ended June 30, 2022.

Current Interfund Balances
Current interfund balances arise in the normal course of business and are expected to be repaid shortly after the end of the year. The following is a summary of current interfund balances as of June 30, 2022:

Interfund Balances
Receivable Fund
General Fund
Amount Payable Fund Amount
$ 2,822,522 Major Funds:

Hawthorne Housing Authority
Non-Major Funds:
$ 139,969
Community Development Block Grant
California Office of Traffic Safety
Leap Grant
Permanent Local Housing Allocation
Local Law Enforcement Block Grant
State Park Improvement Grant
SB2 Planning Grant
390,758
97,146
130,706
5,047
253,115
18,865
249,289
2019 Pension Obligation Bond 1,537,627
Totals $ 2,822,522 $ 2,822,522
The loans from the General Fund to the major and non-major funds were made to eliminate short-term cash deficits.
-56-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
5) INTERFUND ACTIVITY, (continued)
Advances to Successor Agency
Advances to Successor Agency
Receivable Fund
General Fund
Payable Fund
Successor Agency
Amount
Private Purpose Trust Fund $ 45,806,286
In prior fiscal years, the City of Hawthorne advanced money to the Former Redevelopment Agency to cover the cost of operations. In June 2011, AB X1 26 dissolved the former Redevelopment Agency, effective (after some litigation on the matter) February 1, 2012. As part of the dissolution process set forth in that bill and a later bill clarifying and modifying the terms of the dissolution (Assembly Bill 1484, adopted in June 2012), the existing loan from the City to the Agency was considered by the Department of Finance to be unenforceable. The successor agency to the former redevelopment agency has sought reconsideration by the Department of Finance as to the enforceability of the loan. Because of the uncertainty of collection by the General Fund, full loan amount of the loan of $45,806,286 (including $26,084,619 of accrued interest) has been reserved as potentially uncollectible as of June 30, 2022.
-57-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
5) INTERFUND ACTIVITY, (continued)
Interfund Transfers
Funds Transfers in Transfers out
Major Funds:

General $ 1,467,681 $ 8,907,765
192,578
1,375,454
Hawthorne Housing Authority
American Rescue Plan Act
Non-Major Funds:

Street Lighting
Gas Tax
Street
Proposition A
MTA Measure M
MTA Measure R
Proposition C
California Used Oil Recycling
California Beverage Container Recycling
Housing Asset
HOME Grant
CDBG
-
-
-
-
8,608
1,004,777
192,731
23,896
28,062
7,135
43,408
2,553
2,550
5,362
1,381
12,143
65,562
106,649
-
904,734
-
-
-
-
-
-
-
-
-
-
-
MTA Measure W
FEMA Grant
Public Financing Authority
2016 Refunding Bonds
2016 Direct Placement Lease Financing
2019 Pension Obligation Bond
Internal Service Funds:

Equipment Replacement
Insurance Reserve
Enterprise Funds:

Airport
725,880
2,228,617
245,276
6,803,143
-
-
-
1,610
-
91,651
95,449
7,078
1,001
106,019
Sewer and Storm Drain 111,287
$ 12,385,020 $ 12,385,020
The transfer to the 2019 Pension Obligation Bond fund was to fund the debt services payments, including $5,978,224 from the General Fund, $145,059 from the Hawthorne Housing Authority Fund, and the non-major funds for the remainder -58-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
5) INTERFUND ACTIVITY, (continued)
Interfund Transfers, (continued)
The transfer from the General Fund in the amount of $971,156 consists of $725,880 for debt service on the 1997/2011 COP bonds/Public Finance Authority and $245,276 for debt service on the 2007 SBPRCA Series B bonds/2016 Direct Placement Leasing.

The transfer of $2,228,617 to the 2016 Refunding Bonds fund was for debt service payments, including $1,958,385 from the General Fund, $47,519 from the Hawthorne Housing Authority Fund, and the non-major funds for the remainder.

The transfer from the Gas Tax Fund to the Street Fund in the amount of $900,000 was to fund eligible projects and programs in the Street Fund.
6) LONG-TERM DEBT
The following is a summary of changes in long-term debt for the year ended June 30, 2022:

Balance Balance Due Within
June 30, 2021 Additions Deletions June 30, 2022 One Year Governmental Activities:

Bonds Payable:

Governmental Funds:

Revenue bonds - 2011 Series A - direct placement $ 1,354,129 1,884,150
23,300,000
$ - $ (662,629) $ 691,500
1,693,650
21,610,000
$ 691,500
2016 Direct Placement Lease Financing
2016 Certificates of Participation
Plus (less) deferred amounts:

Issuance premium
-
-
(190,500) 192,500
(1,690,000) 2,085,000
1,529,588
(76,479)
-
-
-
-
(163,951)
8,498
1,365,637
(67,981)
162,951
Issuance discount 8,498
2019 Pension Obligation Bonds - direct placement
Total bonds payble
116,935,000
144,926,388
(2,740,000)
(5,438,582)
114,195,000
139,487,806
2,800,000
5,940,449
Notes Payable:

Governmental Funds:

Loan payable - West Basin - direct borrowing
Section 108 loan payable - direct borrowing
Total notes payable
2,898
1,755,000
-
-
-
-
(2,898)
(355,000)
(357,898)
- -
1,400,000
1,400,000
710,000
710,000
6,650,449
1,757,898
Total long-term debt $ 146,684,286 $ $ (5,796,480) $ 140,887,806 $ The City has a legal debt limit of 15% of gross Assesed valuation, or $352,671,698 in fiscal year 2021-2022. None of the City’s general obligation bonds are applicable to this limit. 2011 Series A Revenue Bonds
In March 2011, the Hawthorne Public Financing Authority issued 2011 Series A Revenue Bonds in the amount $6,227,391 with an interest rate of 4.265% per annum, maturing on July 1, 2022. The proceeds of the bonds were used to refinance the 1997 Capital Improvement Program by acquiring in lieu of redemption outstanding 1997 Certificates of Participation. This transaction defeased the outstanding 1997 Certificates of Participation of $6,735,000. Total principal and interest remaining on the bonds as of June 30, 2022 is $706,246 payable through 2023.
-59-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
6) LONG-TERM DEBT, (continued)
2011 Series A Revenue Bonds, (continued)
The indenture establishes a valid first and exclusive lien on and pledge of the City’s Revenues (as such term is defined in the Indenture) and other funds pledged thereby for the security of the Bonds, in accordance with the terms of the Indenture.

Upon default, the Bonds are subject to mandatory redemption in whole on any date or in part on any Interest Payment Date, from the proceeds of a mandatory redemption of the Certificates under the Trust Agreement from the Net Proceeds of insurance, title insurance, condemnation, or eminent domain award to the extent credited towards the prepayment of the Lease payments by the City pursuant to the Lease Agreement, at a redemption price equal to the principal amount of the Bonds to be redeemed, together with accrued interest to the redemption date, without premium. The Bonds are not subject to optional redemption prior to maturity.

Following is a summary of the debt service requirements to maturity:

Year Ending
June 30,
2023
Principal
691,500
691,500
Interest
14,746
14,746
Total
706,246
706,246
$
$
$
$
$
Total $
2016 Direct Placement Lease Financing
In August 2016, the 2016 Direct Placement Lease Financing was issued in the amount of $2,730,900 to refund $2,755,000 in SBRPCA 2007 Series B Bonds. The bonds consisting of serial bonds maturing in annual installments of $143,350 to $233,450. The bonds bear interest at 2.650%. Total principal and interest remaining on the bonds as of June 30, 2022 is $1,901,619 payable through 2030.

The obligation of the City to make Lease Payments pursuant to the Lease Agreement does not constitute a debt of the City or of the State of California or of any political subdivision thereof within the meaning of any constitutional or statutory debt limitation or restriction and does not constitute an obligation for which the City is obligated to levy or pledge any form of taxation or for which the City has levied or pledged any form of taxation. The City will pay Lease Payments from its general funds. No amounts in the general funds of the City will be segregated, set aside or pledged to the payment of the Lease Payments and no amounts will be reasonably expected to be used directly or indirectly to pay Lease Payments. The 2016 Direct Placement Lease Financing is subject to optional redemption prior to maturity. -60-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
6) LONG-TERM DEBT, (continued)
2016 Direct Placement Lease Financing, (continued)
If the City fails to perform any of its obligations under the Lease Agreement, the Sublessor may take such action as may be necessary to cure such failure, including the advancement of money, and the City shall be obligated to repay all such advances as additional rental as provided for under the terms of the agreement, with interest at the rate set forth in Section

4.3(c) of the agreement.

The total debt service requirements to maturity as of June 30, 2022, are as follows:

Year Ending
June 30, Principal
192,500
Interest
44,882
Total
2023 237,382
2024
2025
2026
2027
$ $ $
$
199,300
205,850
207,100
213,150
675,750
39,780
34,499
29,044
23,556
36,208
239,080
240,349
236,144
236,706
2028-2032 711,958
Total $ 1,693,650 $ 207,969 1,901,619
2016 Certificate of Participation Series A and Series B Series A Certificates
In May 2016, The City issued $12,645,000 Series A Certificates of Participation to provide funds to (a) refinance the obligations of the City under a lease agreement by and between the California Infrastructure and Economic Development Bank and the City, executed in 2001 to finance the costs of construction of the City of Hawthorne Police Headquarters, (b) pay a portion of the costs of the reserve fund municipal bond insurance policy in lieu of cash funding a reserve fund for the Certificates and (3) pay delivery costs incurred in connection with the execution, delivery, and sale of the Series A Certificates. Total principal and interest remaining on the bonds as of June 30, 2022 is $15,992,100 payable through 2031.

The Series A Certificates maturing on August 1, 2026, are not subject to optional redemption prior to maturity. The Series A Certificates maturing on and after August 1, 2027, are subject to optional redemption prior to maturity in whole or in part on any date in such order of maturity as shall be designated by the City (or, if the City shall fail to so designate the order of redemption, in pro rata among maturities) and by lot within a maturity, on or after August 1, 2026, at a redemption price equal to the principal amount of the Certificates to be redeemed, together with accrued interest, without premium, to the date fixed for redemption, from the proceeds of the optional prepayment of Series A Lease Payments made by the City pursuant to the Lease Agreement.
-61-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
6) LONG-TERM DEBT, (continued)
2016 Certificate of Participation Series A and Series B, (continued) Series B Certificates
In May 2016, the City issued $17,470,000 Series B Certificates of Participation to provide funds to (a) refinance the obligations with respect to the City of Hawthorne Pension Obligation Bonds, Series 2005, (b) pay a portion of the costs of the Reserve Policy and (c) pay delivery costs incurred in connection with the execution, delivery and sale of the Series B Certificates. Total principal and interest remaining on the bonds as of June 30, 2022 is $9,560,378 payable through 2031.

The Series B Certificates are not subject to optional redemption prior to maturity.

The obligation of the City to make the Lease Payments under the Lease Agreement for the 2016 Certificate of Participation Series A and Series B does not constitute an obligation of the City for which the City is obligated to levy or pledge any form of taxation or for which the City has levied or pledged any form of taxation. The obligation of the City to make Lease Payments does not constitute a debt of the City, the State of California or any political subdivision thereof within the meaning of any constitutional or statutory debt limitation or restriction.

Although the Lease Agreement does not create a pledge, lien or encumbrance upon the funds of the City, the City is obligated under the Lease Agreement to pay the Lease Payments from any source of legally available funds and the City has covenanted in the Lease Agreement that, for so long as the Property is available for its use, it will make the necessary annual appropriations within its budget for the Lease Payments. The City is currently liable and may become liable on other obligations payable from general revenues, some of which may have a priority over the Lease Payments, or which the City, in its discretion, may determine to pay prior to the Lease Payments.

Whenever any Event of Default shall have happened and be continuing, it shall be lawful for the Corporation to exercise any and all remedies available pursuant to law or granted pursuant to the Lease Agreement; provided, however, that notwithstanding anything in the Lease Agreement or in the Trust Agreement to the contrary, there shall be no right under any circumstances to accelerate the Lease Payments or otherwise declare any Lease Payments not then in default to be immediately due and payable. Each and every covenant in the Lease Agreement to be kept and performed by the City is expressly made a condition and upon the breach thereof, the Corporation may exercise any and all rights of entry and reentry upon the Property, and also, at its option, with or without such entry, may terminate the Lease Agreement; provided, that no such termination shall be effected either by operation of law or acts of the parties to the Lease Agreement, except only in the manner expressly provided in the Lease Agreement. In the event of such default and notwithstanding any re-entry by the Corporation, the City shall, as expressly provided in the Lease Agreement, continue to remain liable for the payment of the Lease Payments and/or damages for breach of the Lease Agreement and the performance of all conditions contained in the Lease Agreement and, in any event such rent and/or damages shall be payable to the Corporation at the time and in the manner as provided on the Lease Agreement.
-62-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
6) LONG-TERM DEBT, (continued)
2016 Certificate of Participation Series A and Series B, (continued) The total debt service requirements to maturity as of June 30, 2022, are as follows:

Year Ending
June 30,
Series A
Principal
Series B
Principal
Total
Interest
505,800
505,800
505,800
505,800
420,000
903,900
Interest Principal Interest
2023
2024
2025
2026
2027
$ -
-
-
-
$ $ 2,085,000
2,150,000
2,215,000
2,290,000
225,000
-
$ 246,275 $ 2,085,000 $ 752,075
184,298
116,624
44,525
3,656
-
2,150,000
2,215,000
2,290,000
2,370,000
10,500,000
690,098
622,424
550,325
423,656
903,900
2,145,000
2028-2032 10,500,000
Total $ 12,645,000 $ 3,347,100 $ 8,965,000 $ 595,378 $ 21,610,000 $ 3,942,478 2019 Pension Obligation Bonds
On September 24, 2019, the City of Hawthorne issued 2019 Taxable Pension Obligation Bonds, Series 2019 in the amount of $121,865,000. The 2019 Bonds were placed with U.S.

Bank National Association. The bonds were issued to (a) finance a portion of the City’s unfunded accrued liability to the California Public Employees’ Retirement System (CalPERS) for the benefit of the City’s employees and to pay a portion of current normal costs, and (b) pay the costs incurred in connection with the issuance of the bonds. The bonds bear variable interest rates ranging from 2.115% to 3.299% and are payable semiannually on June 1 and December 1 of each year, commencing June 1, 2020 until maturity or earlier redemption. The bonds mature in fiscal year 2049. Total principal and interest remaining on the bonds as of June 30, 2022 is $180,179,397.

The obligations of the City under the Bonds, including the obligation to make all payments of interest and principal when due, are obligations of the City imposed by law and are absolute and unconditional, without any right of set-off or counterclaim. The Bonds do not constitute an obligation of the City for which the City is obligated to levy or pledge any form of taxation.

Neither the Bonds nor the obligations of the City to make payments on the Bonds constitute an indebtedness of the City, the State of California, or any of its political subdivisions in contravention of any constitutional or statutory debt limitation or restriction.

For the purpose of paying the principal of and interest on the Bonds, the City Council has covenanted under the Trust Agreement, to take such actions annually as are necessary or appropriate to cause the debt service on the Bonds due in any fiscal year to be included in the budget for such fiscal year and to make the necessary appropriations therefor from any legally available funds, including the General Fund, to ensure that sufficient sums are available to pay the annual principal of and interest on the Bonds as the same become due. -63-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
6) LONG-TERM DEBT, (continued)
2019 Pension Obligation Bonds, (continued)
The Bonds maturing on or before June 1, 2029, are not subject to optional redemption prior to their respective stated maturities. The Bonds maturing on and after June 1, 2030, are subject to optional redemption from any source of available funds of the City, prior to their respective maturities, in whole or in part among maturities as specified by the City, and by lot within a maturity, on any date on or after June 1, 2029, at a redemption price equal to the principal amount of the Bonds to be redeemed, plus accrued interest thereon to the date of redemption, without premium.

The Bonds maturing on June 1, 2039 and June 1, 2044, are also subject to mandatory sinking fund redemption on June 1 in the years, and in the amounts, as set forth in the Official Statement at a redemption price equal to one hundred percent (100%) of the principal amount thereof to be redeemed (without premium), together with interest accrued thereon to the date fixed for redemption.

The following events constitute Events of Default under the Trust Agreement: (a) if default shall be made in the due and punctual payment of the principal of any Bond when and as the same shall become due and payable, whether at maturity as therein expressed, by declaration or otherwise; (b) if default shall be made in the due and punctual payment of any installment of interest on any Bond when and as such interest installment shall become due and payable; (c) if default shall be made by the City in the observance of any of the covenants, agreements or conditions on its part in the Trust Agreement or in the Bonds contained, and such default shall have continued for a period of thirty (30) days after written notice thereof to the City; or (d) if the City shall file a petition seeking reorganization or arrangement under the federal bankruptcy laws or any other applicable law of the United States of America, or if a court of competent jurisdiction shall approve a petition, seeking reorganization of the City under the federal bankruptcy laws or any other applicable law of the United States of America, or if, under the provisions of any other law for the relief or aid of debtors, any court of competent jurisdiction shall assume custody or control of the City or of the whole or any substantial part of its property. A Bondholder may exercise any remedies available pursuant to the law or the Trust Agreement if an event of default occurs under the Trust Agreement. -64-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
6) LONG-TERM DEBT, (continued)
2019 Pension Obligation Bonds, (continued)
The total debt service requirements to maturity as of June 30, 2022, are as follows:

Year Ending
June 30, Principal Interest Total
2023
2024
2025
2026
2027
$ 2,800,000 $ 3,872,958 $ 6,672,958
2,865,000
2,930,000
3,000,000
3,075,000
16,680,000
19,445,000
23,090,000
27,695,000
12,615,000
3,810,686
3,744,103
3,672,670
3,598,030
16,682,086
13,918,814
10,272,971
5,679,421
732,659
6,675,686
6,674,103
6,672,670
6,673,030
33,362,086
33,363,814
33,362,971
33,374,421
13,347,659
2028-2032
2033-2037
2038-2042
2043-2047
2048-2049
Total $ 114,195,000 $ 65,984,397 $ 180,179,397
Loan Payable – West Basin
On November 26, 2008, the City of Hawthorne entered into a loan agreement with West Basin Municipal Water District. The loan is to provide the City assistance for the cost of retrofit improvements for the irrigation system at the Jim Thorpe Park. The loan amount was $100,000 of which the Metropolitan Water District contributed $9,500 on behalf of the City. The loan is subject to an interest rate of 5% per annum and is to be repaid within 13 years. Principal payments are due semi-annually on June 1 and December 1. As of June 30, 2022, this loan agreement was paid in full.
-65-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
6) LONG-TERM DEBT, (continued)
Section 108 Loan
Section 108 Loan of $7,800,000 was advanced to the City for commercial rehabilitation on CDBG projects. The loan is guaranteed by the Secretary of Housing and Urban Development.

Total principal payments of $355,000 is due semi-annually on February 1 and August 1. The notes mature from 2012 to 2024 and bear varying interest rates. Total principal and interest remaining on the loan as of June 30, 2022 is $1,475,553.

The City has pledged as security for the repayment of the note, the following: (a) all allocations or grants which have been made or for which the Borrower may become eligible under Section 106 of the Act, as well as any grants which are or may become available to the Borrower pursuant to Section 108(q); (b) Program income, as defined at 24 CFR 570.500(a)(or any successor regulation), directly generated from the use of the Guaranteed Loan Funds; (c) Other security as described in paragraph 15, et seq., or incorporated herein by paragraph C hereof, as applicable; (d) All proceeds (including insurance and condemnation proceeds) from any of the foregoing; and (e) All funds or investments in the accounts established pursuant to paragraphs 1 and 6 of the contract.

A default under this note shall occur upon failure by the borrower to pay principal or interest on this note when due to the Trustee. On any Interest Due Date on or after the first permissible Optional Redemption Date, if either (i) a Borrower defaults on the payment of any interest or principal amount when due or (ii) the Secretary gives notice of a final decision to declare the Borrower in default pursuant to the following paragraph, then the Secretary may, but is not obligated to, make an acceleration payment to the Trustee equal to the unpaid Aggregate Principal Amount of the note, together with accrued and unpaid interest thereon to such Interest Due Date.
-66-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
6) LONG-TERM DEBT, (continued)
Section 108 Loan, (continued)
The total debt service requirements to maturity as of June 30, 2022, are as follows:

Year Ending
June 30, Principal
710,000
Interest
34,756
Total
2023 744,756
2024
2025
$
$
$
$
$
$
355,000
335,000
30,730
10,067
385,730
345,067
Total 1,400,000 75,553 1,475,553
7) LEASES PAYABLE
The following is a summary of changes in leases for governmental activities for the year ended June 30, 2022:

Balance
June 30, 2021
Balance
June 30, 2022
Due Within
Additions Deletions One Year
Lease Payable:

Governmental Funds
Lease payable - AT&T
Lease payable - Ricoh Copier Lease
Internal Service Funds
Lease payable - Radio Lease
Total capital leases
$ 39,880
69,798
$
$
-
-
$
$
(39,880)
(25,049)
$ - $
$
-
44,749 28,785
140,464
250,142
-
-
(87,373)
(152,302)
53,091
97,840
53,091
$ $ 81,876
-67-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
7) LEASES PAYABLE, (continued)
Lease Payable - AT&T
In 2017, the City entered into a lease with AT&T Capital services, Inc. to acquire equipment.

These assets have been capitalized with the obligation shown in the statement of net position.

A of June 30, 2022, this lease was paid in full.

Lease Payable - Radio Lease
In December 2018, the City entered into a lease agreement with Ricoh USA Inc. to acquire copier equipment. These assets have been capitalized with the obligation shown in the statement of net position. The following is a schedule by year of future minimum lease payments under the lease agreement as of June 30, 2022:

Year Ending
June 30, Principal
53,091
53,091
Interest
920
920
Total
54,011
54,011
2023 $
$
$
$
$
Total $
Lease Payable - Ricoh Copier Lease
In February 2019, the City entered into a lease with First American Commercial Bancorp, Inc. to acquire equipment. These assets have been capitalized with the obligation shown in the statement of net position. The following is a schedule by year of future minimum lease payments under the lease agreement as of June 30, 2022:

Year Ending
June 30, Principal Interest
4,458
Total
2023 33,243
2024
$
$
28,785
15,964
$
$
$
$
657 16,621
Total 44,749 5,115 49,864
-68-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
8) COMPENSATED ABSENCES
The following is a summary of changes in compensated absences for the year ended June 30, 2022:

Balance
June 30, 2021
Balance
June 30, 2022
Due Within
Additions Deletions One Year
Governmental Funds $ 4,892,486
67,596
$
$
16,691,460
136,635
$
$
(13,843,769)
(117,834)
$ 7,740,177
86,397
$
$
1,548,035
Internal Service Funds 17,279
Business-Type Activities
Total compensated absences
69,725 120,455 (103,998) 86,182 17,236
$ 5,029,807 16,948,550 (14,065,601) $ 7,912,756 1,582,551 As discussed in Note 1 of the financial statements for governmental fund types, the City's liability for vested and unpaid compensated absences (accrued vacation and sick pay) that exceeds expendable, available financial resources is reported in long-term liabilities. The accrual is calculated in accordance with GASB Code Section C60.109. For governmental activities, the liability will be paid in future years by the General Fund, and for business-type activities, the liability will be paid by the Airport Fund. 9) CLAIMS AND JUDGMENTS
The following is a summary of changes in claims and judgments for the year ended June 30, 2022:

Balance
June 30, 2021
Balance
June 30, 2022
Due Within
Additions One Year
1,527,798
Deletions
Internal Service Funds:

Claims and judgements $ 4,312,384 $ $ - $ 5,840,182 $ 1,168,036 As of June 30, 2022, the City is party to certain lawsuits. After reviewing these lawsuits with legal counsel, management has estimated the potential claims against the City not covered by insurance resulting from such litigation, and has recorded a liability in the Internal Service Fund. At June 30, 2022, total estimated claims payable were $5,840,182. -69-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
10) NON-CITY OBLIGATION DEBT - SPECIAL ASSESSMENT BONDS Assessment District Bonds
During the year ended June 30, 1992, two Community Facilities Districts (Districts) were established by the former Community Redevelopment Agency (Agency) of the City of Hawthorne. Bonds have been issued to finance certain capital costs which have a special and direct benefit to the related property owners. Under the terms and conditions of these bonds, the Agency acts as agent for the property owners in collecting the special taxes and forwarding the collections to the bond holders. These bonds have been subsequently refunded by the issuance of 2010 Special Tax Refunding Bonds in the amount of $13,180,000. As of June 30, 2022, the bonds outstanding from these Community Facility Districts totaled $5,420,000.

On April 20, 2005, the District issued the 2004-1 (Fusion at South Bay) 2005 Special Tax Bonds totaling $3,880,000 to acquire an easement and certain public facilities of benefit to the District. As of June 30, 2022, the bonds outstanding from this Community Facility District totaled $2,785,000.

On November 21, 2006, the City of Hawthorne issued the 2006 Special Tax Bonds totaling $14,755,000 for its Community Facilities District No. 2006-1 (Three Sixty Degrees @ South Bay) (the “District”), to finance the acquisition of an easement and certain public facilities in the vicinity of the District. The bonds are payable solely from Special Tax Revenues levied upon the District. On January 23, 2020, the City of Hawthorne, for and on behalf the District, issued the 2020 Special Tax Rending Bonds in the amount of $9,435,000 to (i) refund the outstanding City of Hawthorne Community Facilities District No. 2006-1 (Three Sixty Degrees @ South Bay) 2006 Special Tax Bonds, (ii) fund a reserve fund for the Bonds, and (iii) pay costs of issuing the Bonds. The Bonds are payable from the proceeds of an annual Special Tax (as defined in the Fiscal Agent Agreement) being levied on certain property located within the District, and from certain funds pledged under the Fiscal Agent Agreement. The Special Tax is being levied according to a rate and method of apportionment of Special Taxes approved in 2006.
-70-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
10) NON-CITY OBLIGATION DEBT - SPECIAL ASSESSMENT BONDS, (continued) Interest on the Bonds is payable on March 1 and September 1 of each year, commencing on September 1, 2020. The Bonds are subject to optional redemption and redemption from Special Tax Prepayments prior to their respective maturities. As of June 30, 2022, the bonds outstanding from this Community Facility District totaled $9,200,000.

Such bonds do not constitute an indebtedness of either the City or the Agency, and are payable solely from special taxes collected from property owners within the Districts. In the opinion of City and Agency officials, these bonds are not payable from any revenues or assets of the City or Agency and none of the full faith and credit of the City, the Agency, the Districts, the State or any political subdivision thereof is obligated to the payment of the principal or interest on the bonds. Accordingly, no liability has been recorded as long-term debt.

The remainder of the page is intentionally left blank
-71-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
11) NET POSITION CLASSIFICATIONS
Net position for governmental activities and business-type activities is classified as (1) net investment in capital assets, (2) restricted, (3) unrestricted. The details of the Net Position as of June 30, 2022 are presented below:

Governmental
Activities
Business-Type
Activities Total
Net Investment in Capital Assets:

Capital assets, net of accumulated depreciation $ 133,965,587 $ 11,008,202 $ 144,973,789 Less capital related debt balances:

Revenue bonds - 2011 Series A
2016 Direct Placement Lease Financing
2016 Certificate of Participation - Series A
Leases payable
(691,500)
(1,693,650)
(12,645,000)
(97,840)
(1,400,000)
(16,527,990)
-
-
-
-
-
-
(691,500)
(1,693,650)
(12,645,000)
(97,840)
(1,400,000)
(16,527,990)
Loans payable
Total Net Investment in Capital Assets 117,437,597 11,008,202 128,445,799 Restricted for:

Public safety 1,441,602
7,937,659
439,384
16,267,086
4,906,446
2,242,510
-
-
-
-
-
-
1,441,602
7,937,659
439,384
16,267,086
4,906,446
2,242,510
Community development
Parks and recreation
Public works
Capital improvements
Debt service
Total Restricted
Unrestricted
Total
33,234,687 - 33,234,687
(122,568,622) 4,953,411
15,961,613
(117,615,211)
$ 28,103,662 $ $ 44,065,275
12) RETIREMENT PLANS
A) General Information about the Pension Plans
Plan Descriptions
The Plans consist of an agent multiple-employer defined benefit pension plan and a public agency cost-sharing multiple-employer defined benefit pension plan administered by the California Public Employees’ Retirement System (CalPERS). -72-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
12) RETIREMENT PLANS, (continued)
A) General Information about the Pension Plans, (continued) Miscellaneous – Agent, Multiple-Employer Defined Benefit Pension Plan 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 plan’s June 30, 2018 Annual Actuarial Valuation Report (funding valuation). Details of the benefits provided can be obtained in Appendix B of the actuarial valuation report. This report and CalPERS’ audited financial statements are publicly available reports that can be obtained at CalPERS’ website, at www.calpers.ca.gov.

Safety – Cost Sharing, Multiple-Employer Defined Benefit Pension Plan All qualified permanent and probationary employees are eligible to participate in the Public Agency Cost-Sharing Multiple-Employer Defined Benefit Pension Plan (Plan) administered by the California Public Employees’ Retirement System (CalPERS.) The Plan consists of individual rate plans (benefit tiers) within a safety risk pool (police and fire) and a miscellaneous risk pool (all other). Plan assets may be used to pay benefits for any employer rate plan of the safety and miscellaneous pools. Accordingly, rate plans within the safety or miscellaneous pools are not separate plans under GASB Statement No. 68.

Individual employers may sponsor more than one rate plan in the miscellaneous or safety risk pools. The City sponsors two safety plans in safety risk pools. Benefit provisions under the Plan are established by State statute and the City resolution. CalPERS issues publicly available reports that include a full description of the pension plan regarding benefit provisions, assumptions and membership information that can be found on the CalPERS’ website, at www.calpers.ca.gov.

Benefits Provided
CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full-time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 5 years of service. The death benefit is one of the following: The Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law.
-73-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
12) RETIREMENT PLANS, (continued)
A) General Information about the Pension Plans, (continued) The Plan operates under the provisions of the California Public Employees’ Retirement Law (PERL), the California Public Employees’ Pension Reform Act of 2013 (PEPRA), and the regulations, procedures and policies adopted by the CalPERS Board of Administration. The Plan’s authority to establish and amend the benefit terms are set by the PERL and PEPRA and may be amended by the California state legislature and in some cases require approval by the CalPERS Board.

The Plans’ provisions and benefits in effect at June 30, 2022, are summarized as follows:

Miscellaneous
Prior to
January 1, 2013

2.7% @ 55
5 years service
monthly for life
50 - 55
On or after
January 1, 2013
2% @ 62
5 years service
monthly for life
52 - 57
Hire date
Benefit formula
Benefit vesting schedule
Benefit payments
Retirement age
Monthly benefits, as a % of eligible compensation
Required employee contribution rates
Required employer contribution rates

2.0% to 2.7%

7..71%

1.0% to 2.5%

6.750%

12.34% 12.34%
Safety
Prior to
January 1, 2013
3% @ 55
5 years service
monthly for life
50 On or after
January 1, 2013

2.7% @ 57
5 years service
monthly for life
50 - 57
Hire date
Benefit formula
Benefit vesting schedule
Benefit payments
Retirement age
Monthly benefits, as a % of eligible compensation
Required employee contribution rates
Required employer contribution rates

3.0%

8.99%

25.59%

2.0% to 2.7%

13.75%

13.98%
Employees Covered
At June 30, 2020 (valuation date), the following employees were covered by the benefit terms:

Miscellaneous
348
Safety
Inactive employees or beneficiaries
currently receiving benefits
Inactive employees entitled to but
not yet receiving benefits
238
278
174
51 Active employees 89
Total 800 378
-74-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
12) RETIREMENT PLAN, (continued)
A) General Information about the Pension Plans, (continued) Contributions
Section 20814(c) of the California Public Employees’ Retirement Law (PERL) requires that the employer contribution rates for all public employers 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.

Miscellaneous – Agent, Multiple-Employer Defined Benefit Pension Plan The total plan contributions are determined through CalPERS’ annual actuarial valuation process. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The employer is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. Employer contribution rates may change if plan contracts are amended. Payments made by the employer to satisfy contribution requirements that are identified by the pension plan terms as plan member contribution requirements are classified as plan member contributions.

Employer Contributions to the Plan for the fiscal year ended June 30, 2022, were $1,598,786.

Safety – Cost Sharing, Multiple-Employer Defined Benefit Pension Plan For public agency cost-sharing plans covered by either the Miscellaneous or Safety risk pools, the Plan’s actuarially determined rate is based on the estimated amount necessary to pay the Plan’s allocated share of the risk pool’s costs of benefits earned by employees during the year, and any unfunded accrued liability. The employer is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. Employer contribution rates may change if plan contracts are amended.

Payments made by the employer to satisfy contribution requirements that are identified by the pension plan terms as plan member contribution requirements are classified as plan member contributions. Employer Contributions to the Plan for the fiscal year ended June 30, 2022, were $2,851,665. The actual employer payments of $2,397,913 made to CalPERS by the City during the measurement period ended June 30, 2021, differed from the City’s proportionate share of the employer’s contributions of $14,679,275 by $12,281,362 which is being amortized over the expected average remaining service lifetime in the Public Agency Cost-Sharing Multiple Employer Plan. -75-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
12) RETIREMENT PLAN, (continued)
B) Net Pension Liability / (Asset)
The City’s net pension liability for the Plan is measured as the total pension liability, less the pension plan’s fiduciary net position. The net pension liability of the Plan is measured as of June 30, 2021, using an annual actuarial valuation as of June 30, 2020. A summary of principal assumptions and methods used to determine the net pension liability is as follows.

Actuarial Methods and Assumptions Used to Determine Total Pension Liability Valuation Date June 30, 2020
Measurement Date
Actuarial Cost Method
June 30, 2021
Entry Age Normal in accordance with
the requirements of GASB 68
Asset Valuation Method Fair Value of Assets
Actuarial Assumptions:

Discount Rate 7.15%
Inflation 2.500%
Salary Increases Varies by Entry Age and Service
Derived using CALPERS' membership data for
all Funds
Mortality Rate Table (1)
Post Retirement Benefit Increase The lesser of contract COLA or 2.50% until Purchasing Power Protection Allowance floor
on purchasing power applies, 2.50% thereafter.
(1) The mortality table used was developed based on CalPERS’ specific data. The probabilities of mortality are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015. Pre-retirement and Postretirement mortality rates include 15 years of projected mortality improvement using 90% of Scale MP-2016 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 December 2017 that can be found on the CalPERS website.

All other actuarial assumptions used in the June 30, 2020 valuation were based on the results of an actuarial experience study for the period from 1997 to 2015, including updates to salary increase, mortality and retirement rates. The Experience Study report can be obtained at CalPERS’ website, at www.calpers.ca.gov.
-76-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
12) RETIREMENT PLAN, (continued)
B) Net Pension Liability / (Asset), (continued)
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 shortterm and long-term market return expectations as well as the expected pension fund cash flows. Using historical returns of all the funds’ asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11+ years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the rounded single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equal to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses.

The expected real rates of return by asset class are as follows:

Real Return
Years 1 - 102
Real Return
Year 11+3
Current Target
Asset Class Allocation 1
Public equity
Fixed income
Inflation assets
Private equity
Real assets
Liquidity

50.0%

28.0%

0.0%

8.0%

13.0%

1.0%

4.80%

1.00%

0.77%

6.30%

3.75%

0.00%

5.98%

2.62%

1.81%

7.23%

4.93%
(0.92%)
Total 100%
1 In the System's ACFR, Fixed Income is included in Global Debt Securities; Liquidity is included in Short-Term Investments; Inflation Assets are included in both Global Equity Securities and Global Debt Securities.
2 An expected inflation of 2.0% used for this period
An expected inflation of 2.92% used for this period 3
Change of Assumptions
There were no change of assumptions for measurement date June 30, 2021. -77-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
12) RETIREMENT PLAN, (continued)
B) Net Pension Liability / (Asset), (continued)
Discount Rate
The discount rate used to measure the total pension liability for PERF C was 7.15%. 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.

Subsequent Events
On July 12, 2021, CalPERS reported a preliminary 21.3% net return on investments for fiscal year 2020-21. Based on the thresholds specified in CalPERS Funding Risk Mitigation policy, the excess return of 14.3% prescribes a reduction in investment volatility that corresponds to a reduction in the discount rate used for funding purposes of 0.20%, from

7.00% to 6.80%. Since CalPERS was in the final stages of the four-year Asset Liability Management (ALM) cycle, the board elected to defer any changes to the asset allocation until the ALM process concluded, and the board could make its final decision on the asset allocation in November 2021.

On November 17, 2021, the board adopted a new strategic asset allocation. The new asset allocation along with the new capital market assumptions, economic assumptions and administrative expense assumption support a discount rate of 6.90% (net of investment expense but without a reduction for administrative expense) for financial reporting purposes. This includes a reduction in the price inflation assumption from 2.50% to 2.30% as recommended in the November 2021 CalPERS Experience Study and Review of Actuarial Assumptions. This study also recommended modifications to retirement rates, termination rates, mortality rates and rates of salary increases that were adopted by the board. These new assumptions will be reflected in the GASB 68 accounting valuation reports for the June 30, 2022, measurement date.

Pension Plan Fiduciary Net Position
Information about the pension plan’s assets, deferred outflows of resources, liabilities, deferred inflows of resources, and fiduciary net position are presented in CalPERS’ audited financial statements, which are publicly available reports that can be obtained at CalPERS’ website, at www.calpers.ca.gov. The plan’s fiduciary net position and additions to/deductions from the plan’s fiduciary net position have been determined on the same basis used by the pension plan, which is the economic resources measurement focus and the accrual basis of accounting. Benefits and refunds are recognized when due and payable in accordance with the terms of the plan. Investments are reported at fair value. -78-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
12) RETIREMENT PLAN, (continued)
B) Net Pension Liability / (Asset), (continued)
The plan fiduciary net position disclosed in the GASB 68 accounting valuation report may differ from the plan assets reported in the funding actuarial valuation report due to several reasons. First, for the accounting valuations, CalPERS must keep items such as deficiency reserves, fiduciary self-insurance and Other Post-Employment Benefits (OPEB) expense included as assets. These amounts are excluded for rate setting purposes in the funding actuarial valuation. In addition, differences may result from early Annual Comprehensive Financial Report closing and final reconciled reserves.

C) Proportionate Share of Net Pension Liability / (Asset) Miscellaneous – Agent, Multiple-Employer Defined Benefit Pension Plan The following table shows the changes in net pension liability over the measurement period.

Increase (Decrease)
Plan Fiduciary Net Net Pension Liability /
Total Pension Liability (Asset)
(a)
Position
(b) (c) = (a) - (b)
Balance at: 6/30/2020 (VD) 1,474,824
Changes Recognized for the
Measurement Period:
$ 208,286,296 $ 206,811,472 $
•
•
Service Cost
Interest on the Total
Pension Liability
2,478,272 -
-
2,478,272
14,602,910 14,602,910
• Differences between
Expected and Actual
Experience 699,629
-
- 699,629
•
•
Contributions from the
Employer
Contributions from
Employees
Net Investment Income
Benefit Payments,
including Refunds of
Employee Contributions
Administrative Expense
Other Miscellaneous Income/(Expense)1
1,612,478 (1,612,478)
-
-
1,047,853
45,476,553
(1,047,853)
• (45,476,553)
•
(11,977,102)
-
(11,977,102)
(206,592)
-
•
•
206,592
-
5,803,709
214,090,005
- -
Net Changes during 2020-21
Balance at: 6/30/2021 (MD)
35,953,190
242,764,662
(30,149,481)
$ $ $ (28,674,657)
1 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.

Valuation Date (VD), Measurement Date (MD).
-79-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
12) RETIREMENT PLANS, (continued)
C) Proportionate Share of Net Pension Liability / (Asset), (continued) Safety – Cost Sharing, Multiple-Employer Defined Benefit Pension Plan The following table shows the Plan’s proportionate share of the net pension liability over the measurement period.

Increase (Decrease)
Plan Total Pension Plan Fiduciary Net Plan Net Pension Liability Liability Position / (Asset)
(a) (b) (c ) = (a) - (b)
Balance at: 6/30/2020 (MD)
Balance at: 6/30/2021 (MD)
Net Changes during 2020-21
$
$
234,415,126
240,341,030
5,925,904
$
$
231,299,965
274,762,158
43,462,193
$
$
3,115,161
(34,421,128)
(37,536,289)
Valuation Date (VD), Measurement Date (MD).

The City’s net pension liability for the Plan is measured as the proportionate share of the net pension liability. The net pension liability of the Plans is measured as of June 30, 2021, and the total pension liability for the Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2020. The City’s proportion of the net pension liability was determined by CalPERS using the output from the Actuarial Valuation System and the fiduciary net position, as provided in the CalPERS Public Agency CostSharing Allocation Methodology Report, which is a publicly available report that can be obtained at CalPERS’ website, at www.calpers.ca.gov. The City’s proportionate share of the net pension liability for the safety Plan as of June 30, 2020 and 2021, measurement date was as follows:

Safety
Proportionate Share of NPL - June 30, 2020
Proportionate Share of NPA - June 30, 2021
Change - Decrease

0.04676%
(0.98080%)
(1.02756%)
-80-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
12) RETIREMENT PLANS, (continued)
C) Proportionate Share of Net Pension Liability / (Asset), (continued) Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the City’s proportionate share of the net pension liability of each Plan as of the measurement date, calculated using the discount rate of 7.15 percent, as well as what the net pension liability would be if it were calculated using a discount rate that is 1 percentage-point lower (6.15 percent) or 1 percentage-point higher (8.15 percent) than the current rate:

Discount Rate - 1% Current Discount Discount Rate + 1%
(6.15%) Rate (7.15%) (8.15%)
Miscellaneous Plan's
Net Pension Asset $
$
(1,959,833) $
(2,069,151) $
(28,674,657) $
(34,421,128) $
(50,789,407)
(60,994,281)
Safety Plan's Net
Pension Asset
Amortization of Deferred Outflows and Deferred Inflows of Resources Under GASB Statement No. 68, gains and losses related to changes in total pension liability and fiduciary net position are recognized in pension expense systematically over time.

The first amortized amounts are recognized in pension expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to pensions and are to be recognized in future pension expense. -81-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
12) RETIREMENT PLANS, (continued)
C) Proportionate Share of Net Pension Liability / (Asset), (continued) The amortization period differs depending on the source of the gain or loss:

Difference between
projected and actual
earnings
5 year straight-line amortization
All other amounts Straight-line amortization over the
average expected remaining services
lives of all members that are provided
with benefits (active, inactive and
retired) as of the beginning of the
measurement period
For the agent, multiple employer plan, 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). For the cost sharing, multiple employer plan, the EARSL is calculated by dividing the total future service years by the total number of plan participants (active, inactive, and retired) in the Public Agency Cost Sharing MultipleEmployer Plan (PERF C).

The EARSL for the miscellaneous agent plan for the measurement date ending June 30, 2021, is 2.3 years, which was obtained by dividing the total service years of 1,872 (the sum of remaining service lifetimes of the active employees) by 800 (the total number of participants: active, inactive, and retired). Inactive employees and retirees have remaining service lifetimes equal to 0. Total future service is based on the members’ probability of decrementing due to an event other than receiving a cash refund.

The EARSL for the PERF C for the measurement period ending June 30, 2021, is 3.7 years, which was obtained by dividing the total service years of 561,622 (the sum of remaining service lifetimes of the active employees) by 150,648 (the total number of participants: active, inactive, and retired). Inactive employees and retirees have remaining service lifetimes equal to 0. Also note that total future service is based on the members’ probability of decrementing due to an event other than receiving a cash refund. -82-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
12) RETIREMENT PLANS, (continued)
D) Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions
As of the start of the measurement period (July 1, 2020), the City’s total net pension liability was $4,589,985. For the measurement period ending June 30, 2021 (the measurement date), the City incurred a total pension credit of $53,179,995. A breakdown of the pension expense and deferred outflows and deferred inflows of resources related to each pension plan is as follows:

Miscellaneous – Agent, Multiple-Employer Defined Benefit Pension Plan As of the start of the measurement period (July 1, 2020), the net pension liability is $1,474,824. For the measurement period ending June 30, 2021 (the measurement date), the City incurred a pension credit of $4,741,187 for the miscellaneous plan. A complete breakdown of the pension expense is as follows:

Description
Service Cost
Amount
$ 2,478,272
Interest on the Total Pension Liability
Differences Between Expected and Actual Experience
Contributions - Employees
Projected Earnings on Pension Plan Investments
Recognized Differences Between Projected and
Actual Earnings on Plan Investments
Administrative Expenses
14,602,910
225,893
(1,047,853)
(14,425,135)
(6,781,866)
206,592
Total Pension Expense $ (4,741,187)
Safety – Cost Sharing, Multiple-Employer Defined Benefit Pension Plan As of the start of the measurement period (July 1, 2020), the net pension liability for the safety plans is $3,115,161. For the measurement period ending June 30, 2021 (the measurement date), the City incurred a pension credit of $48,438,808 for the safety plan. -83-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
12) RETIREMENT PLAN, (continued)
D) Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions, (continued)
As of June 30, 2022, the City has deferred outflows and deferred inflows of resources related to pensions as follows:

Miscellaneous
Deferred
Safety
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Outflows of
Resources
Deferred Inflows
of Resources
Differences between Expected and
Actual Experience
Changes of Assumptions
$ 415,637
-
$ -
-
$ -
-
$ (5,880,820)
-
Net Difference between Projected and
Actual Earnings on Pension Plan
Investments
Change in Employer's Proportion
Difference in Actual vs Projected Contributions
Pension Contributions Subsequent to
Measurement Date
-
-
-
(22,886,770) 20,487,188
8,444,795
29,128,352
-
-
-
(27,869,966)
(9,260,038)
1,598,786
2,014,423
- 2,851,665 -
$ $ (22,886,770) $ 60,912,000 $ (43,010,824)
These amounts above are net of outflows and inflows recognized in the 2020-21 measurement period expense. The $1,598,786 and $2,851,665 reported as deferred outflows of resources related to the contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in upcoming fiscal year. Other amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recognized in future pension expense as follows:

Fiscal Year
Ended
June 30,
2023
Deferred Outflows/(Inflows) of
Resources, Net
Miscellaneous
$ (5,416,649)
(5,296,058)
(5,548,144)
(6,210,282)
-
Safety
2,366,238
3,118,291
3,927,193
5,637,789
-
$
2024
2025
2026
2027
Thereafter - -
E) Payable to the Pension Plan
At June 30, 2022, the City reported a payable of $0 for the outstanding amount of contributions to the pension plans required for the year then ended. -84-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
13) OTHER POST-EMPLOYMENT EMPLOYEE BENEFITS
Plan Description
The City provides certain postemployment health care benefits under a single employer defined benefit plan, in accordance with the various City Council Resolutions: No. 966, No. 5967, No. 5978, No. 5983, No. 5984, No. 6022 and No. 6046, to the following three employee categories:
general, fire and police.

The following is a description of the eligibility requirements, the term of the benefits, and the postemployment health benefits available to eligible employees:

General
All employees who have retired from a classification covered by the memorandum of understanding, are receiving retirement benefits from PERS, and have a minimum of 10 years of full-time employment, shall be entitled to enroll in a PERS health plan. The City agrees to reimburse an amount equal to the coverage for the plan in which the employee is enrolled. This benefit commences upon the employee's retirement date and ceases when the employee becomes ineligible for coverage under the PERS health benefits plan.

Fire
All employees who have retired from a classification covered by the memorandum of understanding, are receiving retirement benefits from PERS and have a minimum of 15 years of full-time employment, shall be entitled to enroll in a PERS health plan. The City agrees to reimburse an amount equal to the cost of the coverage for the plan in which the employee is enrolled. This benefit commences upon the employee's retirement date and ceases when the employee becomes ineligible for coverage under the PERS health benefits plan. The City began contracting with the County of Los Angeles beginning in February 1997. Therefore, this benefit pertained only to those employees retiring before February 1997.

Police
All employees who have retired, have at least 20 years of service in the Hawthorne Police Department, and have reached the age of 50, shall be entitled to enroll in a PERS health plan.

The City agrees to pay for health insurance for the retired employee and his or her dependent spouse or family less the retiree contribution of $14.15 per month for 2-party coverage or $23.99 per month for family coverage.

A qualified retiree shall be covered by this provision as long as he/she is eligible for PERS health insurance coverage. The dependent spouse of a qualified retiree shall be covered until he/she reaches the age of 65. Any employee who retires with less than the minimum requirements as noted above shall be offered the opportunity to continue their participation in the group health insurance (PERS) in effect at that time. The City does not provide dental, vision, Medicare Part B, or life insurance as part of the plan. -85-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
13) OTHER POST-EMPLOYMENT EMPLOYEE BENEFITS, (continued) Employees Covered
As of the June 30, 2021 actuarial valuation, the following current and former employees were covered by the benefit terms under the Plan:

Active employees 266
272
59 Inactive employees or beneficiaries currently receiving benefits Inactive employees entitled to, but not yet receiving benefits Total 597
Funding Policy
The contribution requirements of plan members and the City are established and may be amended by the City, City Council and/or the employee association. Currently, contributions are not required from plan members.

The City pays for postemployment health insurance on a pay-as-you-go basis (no prefunding).

For fiscal year 2021-22, the City paid $3,207,614 for other postemployment benefits.

Total OPEB Liability
The City’s total OPEB liability was measured as of June 30, 2021 and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation using the Alternative Measurement Method dated June 30, 2021 that was rolled forward to determine the June 30, 2021 total OPEB liability, based on the following actuarial methods and assumptions:

Actuarial Assumptions
Actuarial Valuation Date
Contribution Policy
Discount Rate
June 30, 2021 Measurement Date (MD)
June 30, 2021
No pre-funding

2.16% at MD June 30, 2021
(Bond Buyer 20-Bond Index)

2.21% at MD June 30, 2020
(Bond Buyer 20-Bond Index)
General Inflation 2.50% annually
Mortality, Retirement,
Disability, Termination
Salary increases
Based on CalPERS 2000-2019 Experience Study
Aggregate - 2.75% annually
Merit - CalPERS 2000-2019 Experience Study
Medical Trend
Non-Medicare – 6.5% for 2023, decreasing to an
ultimate rate of 3.75% in 2076.

Medicare (Non-Kaiser) – 5.65% for 2023,
decreasing to an ultimate rate of 3.75% in 2076.

Medicare (Kaiser) - 4.6% for 2023, decreasing to
an ultimate rate of 3.75% in 2076
Healthcare Participation Actives: 95%
Retirees: 100% if covered, 5% re-elect at 65 if
waived.
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City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
13) OTHER POST-EMPLOYMENT EMPLOYEE BENEFITS, (continued) Discount Rate
A discount rate of 2.16 percent was used in the valuation for measurement date June 30, 2021.

Changes in the OPEB Liability
The changes in the total OPEB liability for the Plan are as follows:

Total OPEB
Liability
Balance at June 30, 2021
(6/30/2020 measurement date)
Changes recognized for the measurement period:

Service cost
$ 139,733,637
5,252,506
Interest 3,168,811
Actual vs. expected experience
Changes of assumptions
Benefit payments
(14,253,534)
(8,870,441)
(3,202,013)
Net changes (17,904,671)
Balance at June 30, 2022
(6/30/2021 measurement date) $ 121,828,966
Sensitivity of the Total OPEB Liability to Changes in the Discount Rate The following presents the total OPEB liability of the City if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 2021:
1% Decrease
(1.16%)
Current Discount
Rate (2.16%)
1% Increase
(3.16%)
Total OPEB Liability $ 145,774,554 $ 121,828,966 $ 103,301,431 -87-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
13) OTHER POST-EMPLOYMENT EMPLOYEE BENEFITS, (continued) Sensitivity of the Total OPEB Liability to Changes in the Health Care Trend Rates The following presents the total OPEB liability of the City if it were calculated using health care cost trend rates that are one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 2021:

Current Healthcare
1% Decrease
101,712,291
Cost Trend Rates 1% Increase
Total OPEB Liability $ $ 121,828,966 $ 148,159,520
OPEB Plan Fiduciary Net Position
As the City is not prefunding with an OPEB trust, Plan Fiduciary Net Position was $0 at the June 30, 2021 measurement date. The City does not have assets accumulated in a trust that meets the criteria of GASB 75 to pay related benefits.

Recognition of Deferred Outflows and Deferred Inflows of Resources Gains and losses related to changes in total OPEB liability and fiduciary net position are recognized in OPEB expense systematically over time. Amounts are first 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 net difference between projected and actual earnings on OPEB plan investments is amortized using the straight-line method over 5 years, while all other amounts are amortized over the expected average remaining service lifetime (EARSL) of plan participants.

OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB For the fiscal year ended June 30, 2022, the City recognized OPEB expense of $5,269,481 with details as follows:

Total
Service Cost
Interest
Administrative Expense
Recognition of deferred outflows/(inflows)
Experience
$
$
5,252,506
3,168,811
7,133
(4,110,219)
Assumptions 951,250
OPEB Expense 5,269,481
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City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
13) OTHER POST-EMPLOYMENT EMPLOYEE BENEFITS, (continued) OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB, (continued)
As of fiscal year ended June 30, 2022, the City reported deferred outflows of resources related to OPEB from the following sources:

Deferred Outflows
of Resources
Deferred Inflows
of Resources
Difference between expected and actual experience
Changes of assumptions
$ - $ 15,464,130
9,319,434
-
20,416,275
Contributions to OPEB plan subsequent to the measurement date 3,270,614 Total $ 23,686,889 $ 24,783,564
The $3,270,614 reported as deferred outflows of resources related to contributions subsequent to the June 30, 2021 measurement date will be recognized as a reduction of the total OPEB liability in the upcoming year. Other amounts reported as deferred outflows or inflows of resources related to OPEB will be recognized as expense as follows:

Deferred
Fiscal Year Ended
June 30
Outflows/(Inflows)
of Resources
2023
2024
$ (1,257,969)
195,031
763,385
(1,590,166)
(2,477,570)
-
2025
2026
2027
Thereafter
$ (4,367,289)
Changes In Assumptions
The changes in assumptions as of the measurement date of June 30, 2021, were: The discount rate was updated from 2.21% to 2.16% based on municipal bond rate as of the measurement date.

The demographic assumptions were updated to CalPERS 2000-2019 Experience Study. The 25- basis point inflation rate decrease. The participation for dependents and waived retirees were updated. The medical trend rate for Kaiser Senior Advantage decreased. The Medicare Advantage implied subsidy was removed. The mortality improvement scale was updated to Scale MP-2021. -89-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
13) OTHER POST-EMPLOYMENT EMPLOYEE BENEFITS, (continued) OPEB Related Subsequent Events
The subsequent events as of the measurement date of June 30, 2021, was: The City set up a PARS balanced strategy trust April 29, 2022 and intended on making a $3.5 million initial contribution in October.
14) INSURANCE
The City is exposed to various risks of loss related to torts, theft of, damage to, and destruction of assets, errors and omissions, injuries to employees, and natural disasters. The City established the Insurance Reserve Fund to account for and finance its uninsured risks of loss and records its risk in long-term debt.

The Insurance Reserve Fund provides coverage for up to a maximum of $250,000 for each workers' compensation claim and $250,000 for each general liability claim. The City is a member of the Independent Cities Risk Management Authority (ICRMA) for its excess liability insurance coverage and workers' compensation coverage and purchases commercial insurance for claims in excess of coverage provided by the fund for all other risks of loss.

Settled claims have not exceeded this commercial coverage in any of the past three fiscal years.

All funds of the City except the fiduciary funds participate in the program and make payments to the fund based on actuarial estimates of the amounts needed to pay prior year and current year claims. The claims liability of $5,840,182 reported in the Insurance Reserve Fund at June 30, 2022, is based on the requirements of Governmental Accounting Standards Board Statement No. 10, which requires that a liability for claims be reported if information prior to the issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated.

Changes in the Insurance Reserve Fund's claims liability amounts in the fiscal years 2020, 2021, and 2022, were as follows:

Beginning
Balance
Changes in
Estimates
Claims
Payments
Ending
Fiscal Year Balances
2019-2020
2020-2021
2021-2022
$ 4,037,710
2,973,235
4,312,384
$ 529,798
2,718,450
1,527,798
$ (1,594,273) $ 2,973,235
(1,379,301)
-
4,312,384
5,840,182
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City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
15) COMMITMENT AND CONTINGENCIES
Construction Commitments
The following material construction commitments existed at June 30, 2022:

Remaining Commitments
Fund
Major Funds:

General Fund
Hawthorne Housing Authority
Non-major Funds
Internal Services Funds:

Equipment Replacement
Insurance Reserve
Enterprise Funds:

Airport
as of June 30, 2022
$ 638,592
$
304,748
43,043
40,400
7,923
1,034,706
Litigation
The City of Hawthorne has been named as a defendant in numerous lawsuits and claims arising in the course of operations. In the aggregate, these claims seek monetary damages in significant amounts. To the extent the outcome of such litigation has been determined to result in probable financial loss to the City, such loss has been accrued in the accompanying combined financial statements.
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City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
16) JOINT VENTURES
South Bay Regional Public Communications Authority (SBRPCA) The City is a member of the South Bay Regional Public Communications Authority (SBRPCA), a joint powers authority of the Cities of Hawthorne, Gardena, Manhattan Beach and El Segundo. SBRPCA was formed October 14, 1975, for the purpose of financing a public safety communications system for the member cities. The governing board is composed of the mayor of each member city. During fiscal year 2021-22, the City was assessed $2,661,063, which was paid to SBRPCA for the operations and maintenance of the consolidated regional public safety services communications system that SBRPCA provides to its member cities.

The City’s share of SBRPCA capital assets is recorded as a component of the City’s capital assets (see note 4). Ownership percentages are determined by joint agreement. As of June 30, 2022, the following Member Agencies have the following approximate ownership interest:

City of Hawthorne
City of Gardena

32.08%

45.07%
City of Manhattan Beach 22.85%
As of and for the year ended June 30, 2022, SBRPCA's preliminary financial information is as follows:

Net Position
Total assets $ 14,202,918
Total deferred outflows of resources 3,129,376
Total liabilities (13,305,360)
Total deferred inflows of resources (984,928)
Total net position $ 3,042,006
Change in Net Position
Operating revenues
Operating expenses
$ 10,731,249
(12,368,139)
Operating income (1,636,890)
Nonoperating revenues (expenses)
Change in net position
8,509
(1,628,381)
Beginning net position, as restated 4,670,387
Ending net position $ 3,042,006
Complete financial statements for the SBRPCA may be obtained from the City's Finance Department.

Should SBRPCA liquidate, all members would receive their equity in the SBRPCA based upon their cumulative contributions.
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City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
17) DEFERRED OUTFLOWS/INFLOWS OF RESOURCES
The City recognizes deferred outflows of resources in the City’s financial statements pertaining to the unamortized loss on defeasance of debt and pension contributions made subsequent to the measurement date. The unamortized loss on defeasance of debt is recognized as a component of interest expense in a systematic and rational manner over the remaining life of the old debt or the life of the new debt, whichever is shorter.

The deferred inflows of resources pertains to unavailable revenues which represent receivables that were not received within the availability period and the difference between actual and projected income on pension plan investments.

Governmental
Activities Balance
at June 30, 2022
Deferred outflows of resources
Unamortized loss on defeasance of debt $ 313,905
Governmental
Funds
at June 30, 2022
Deferred inflows of resources
Unavailable Revenue - Receivables that were not
received within the availability period and were
not recognized as revenues $ 2,038,853
Refer to Note 12 for deferred outflows and inflows of resources related to pensions and Note 13 for deferred outflows and inflows of resources related to other post-employment benefits. -93-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
18) SUCCESSOR AGENCY TRUST FOR ASSETS OF FORMER REDEVELOPMENT AGENCY The accompanying financial statements also include the Private-purpose Trust Fund for the Successor Agency to the City’s former Redevelopment Agency (Successor Agency). The City, as the Successor Agency, serves in a fiduciary capacity, as custodian for the assets and to wind down the affairs of the former Redevelopment Agency. Its assets are held in trust for the benefit of the taxing entities within the former Redevelopment Agency’s boundaries and as such, are not available for the use of the City.

Disclosure of Successor Agency Debts
The following is a summary of changes in long-term debt for the year ended June 30, 2022:

Balance Balance Due Within
June 30, 2021 Additions One Year
-
Deletions June 30, 2022
Bonds payable - Direct placement
Tax allocation bonds $ 22,365,000 $ $ (1,560,000) $ 20,805,000 $ 1,645,000 Plus deferred amounts:

Issuance premium 3,974,173
26,339,173
-
-
(248,386)
(1,808,386)
3,725,787
24,530,787
248,386
Total bonds payable 1,893,386
Notes payable - Direct borrowing 32,032,002 1,125,000 (293,130) 32,863,872 - $ 58,371,175 $ 1,125,000 $ (2,101,516) $ 57,394,659 $ 1,893,386 Tax Allocation Bonds
Redevelopment Project Area 2:
2016 Tax Allocation Bonds
2016 Project Area No. 2 Tax Allocations Bonds, Series 2016 was issued to (a) refund certain outstanding bonds issued by the former Community Redevelopment Agency of the City of Hawthorne (the “Former Agency”), the proceeds of which were used to finance and refinance redevelopment activities of the Former Agency, (b) purchase a municipal bond insurance policy in lieu of funding a debt service reserve fund for the Bonds, and (c) provide for the costs of issuing the Bonds. The Bonds are payable from and secured by a first lien on the Tax Revenues, as defined in the Indenture, and moneys in certain funds and accounts established under the Indenture. The bonds consist of $29,785,000 serial bonds with an annual maturity dates from September 1, 2016 through September 1, 2036, bearing interest ranging from

2.00% to 5.00%.
-94-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
18) SUCCESSOR AGENCY TRUST FOR ASSETS OF FORMER REDEVELOPMENT AGENCY, (continued)
Disclosure of Successor Agency Debts, (continued)
As of June 30, 2022, total principal and interest outstanding on this 2016 Tax Allocation Bonds is $28,685,125.

The Successor Agency shall not submit a Last and Final ROPS without the prior written consent of Assured Guaranty Municipal Corp., or any successor thereto.

If an Event of Default has occurred under the Indenture and is continuing, the Trustee may, and, if requested in writing by the Owners of a majority in aggregate principal amount of the Bonds then Outstanding the Trustee shall, (a) declare the principal of the Bonds, together with the accrued interest thereon, to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable, anything in the Indenture or in the Bonds to the contrary notwithstanding, and (b) the Trustee shall, subject to the Indenture, exercise any other remedies available to the Trustee and the Bond Owners in law or at equity.

The following schedule summarizes the debt service to maturity requirements for bonds outstanding as of June 30, 2022:

Year Ending
June 30, Principal Interest
999,125
914,875
826,500
756,750
2,977,125
1,363,750
42,000
Total
2023
2024
2025
2026
2027
$ 1,645,000
1,725,000
1,810,000
980,000
5,695,000
7,270,000
1,680,000
$ $ 2,644,125
2,639,875
2,636,500
1,736,750
8,672,125
8,633,750
1,722,000
2028-2032
2033-2037
Total $ 20,805,000 $ 7,880,125 $ 28,685,125
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City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
18) SUCCESSOR AGENCY TRUST FOR ASSETS OF FORMER REDEVELOPMENT AGENCY, (continued)
Note Payable
AutoNation/Costco Note – A first implementation agreement to a Disposition and Development Agreement (DDA) was entered with certain developers in August 2000, paying interest at 9.0%.

The developers had advanced to the Agency $5,500,000 and cancelled a note owed by the Agency (the Costco note) for approximately $7,000,000. In return, the Agency executed a promissory note to the developers for $12,500,000. Sources for repayment of this note consist of Mello-Roos tax refunds, sales tax and transient occupancy tax refunds to the extent these taxes are generated within the project site. As of June 30, 2022, the outstanding balance on this note totaled $32,863,872.

The Agency pledged the Tax Increment to payment of the special taxes on the Refunding Bonds and repayment of the Agency Note pursuant to Health and Safety Code Sections 33641 and 33671.5 and other applicable provisions of law. The Tax Increment shall be subordinate to the Agency’s obligations to make debt service payments on any Tax Allocation Bonds.

The Agency shall deposit or cause all Tax Increments to be deposited in a special fund administered by a trustee that shall be the fiscal agent for the Refunding Bonds.

Commitments and Contingencies
The Successor Agency has assumed a commitment of the former Hawthorne Redevelopment Agency, pertaining to the Oceangate Development.

The Developer is reimbursed 25% of the sales tax generated from parcels two to four and 40% from parcels five and six for 15 years; commencing January 1, 1999. All Mello-Roos taxes received in excess of $506,800 are refunded to the Developer until the 1998 Special Tax Refunding bonds are fully repaid and all tax increments received, except from parcel one, less the low- and moderate-income housing set-aside amount which is refunded to the Developer for a period of 30 years.
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City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
18) SUCCESSOR AGENCY TRUST FOR ASSETS OF FORMER REDEVELOPMENT AGENCY, (continued)
Tax Abatements
The Community Redevelopment Agency of the City of Hawthorne (the City) entered into an agreement with Oceangate Properties, Inc. on July 23, 2001. The Developer leases certain real property located at 13900 Hawthorne Boulevard on which the Developer operates a facility for the retail sale of new and used automobile and light trucks known as “South Bay Ford”. At the time of the agreement the Developer will be the owner of certain real property (“Parcel 1”) located in the City. Parcel 1 and the Hawthorne Boulevard Property were both located within the Hawthorne Redevelopment Project No. 2 in the City and are subject to the provisions of the Redevelopment Plan for the project adopted by the City Council of the City on November 26, 1984, by Ordinance No. 1330, as amended. In connection with the Owner Participation Agreement, as amended by the fifth implementation agreement dated April 12, 1999, hereinafter collectively referred to as the “OPA”. In connection with the OPA, the Agency and the City entered into a cooperation and Loan agreement (“Cooperation Agreement”), pursuant to which the City agreed the make a loan to the Agency to be used by the Agency to make certain payments required by the OPA. Pursuant to the OPA, the site was subdivided into eight (8) parcels: Parcels 1, 2, 3, 4A, 4B, 5, 6A, and 6B. The Developer and the Agency have entered into a “Sixth Implementation Agreement” which amends and restates the provisions of the OPA governing the redevelopment of Parcel 1, and the City and the Agency have entered into a Revised Cooperation and Loan Agreement revising the provisions of the Cooperation Agreement with respect to Parcel 1 only. Pursuant to the Sixth Implementation Agreement, the Developer intends to develop a facility for the retail sale and/or leasing of new automobiles and/or light trucks on Parcel 1 and relocate the Developer’s new car sales operations to Parcel 1. The Developer further intends to continue to use the Hawthorne Boulevard Property for the sale of used vehicles and for service, parts and warranty purposes.

In connection with the sale of Parcel 1 to the Developer, the Developer’s immediate predecessor in interest, Mission-Oceangate, a California general Partnership (“Mission”), has assigned to the Developer its right to received periodic payments of “Sales Tax Generation” and “Net Tax Increment” from Parcels 2-6 as defined in the revised method of financing to the first implementation. In addition, Mission has assigned to the Developer its right to receive periodic payments of “Mello-Roos Reimbursement” from Parcel 1. The thirty (30) year term for the Agency’s payment of Net Tax Increment to the Developer commenced on July 1, 1992 and will terminate on September 30, 2022. The thirty (30) year term for the payment of Sales Tax Generation to the Developer commenced on July 1, 1992 and will terminate on July 1, 2022. -97-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
18) SUCCESSOR AGENCY TRUST FOR ASSETS OF FORMER REDEVELOPMENT AGENCY, (continued)
Tax Abatements, (continued)
Payments of Parcel 1 Net Tax Increment Revenue shall be made annually in arrears on or before September 30 of each fiscal year. Payments of Parcel 1 Apportioned Sales Tax Generation shall be made quarterly in arrears, on October 1 (for the first quarter of the calendar year), January 1 (for the second quarter of the preceding calendar year), April 1 (for the third quarter of the preceding year) and July 1 (for the fourth quarter of the preceding calendar year).

Payments of Parcel 1 Apportioned Sales Tax Generation attributable to leasing activity shall be made annually in arrears on July 1 (for the preceding year), provided, however, that if the Developer is able to document to the Agency’s satisfaction on a quarterly basis the amount of Parcel 1 Apportioned Sales Tax Generation attributable to leasing activity, then such payments attributable to leasing activity shall be made at the same time (on a quarterly basis) as other payments of Parcel 1 Apportioned Sales Tax Generation.

Parcel 1 Net Tax Increment Revenue shall be paid to the Agency pursuant to California Health and Safety Code Section 33670(b) that is attributable to assessed value of Parcel 1 in excess of $8,240,000 less any portion of such Parcel 1 Net Tax Increment Revenues required to be deposited in the Agency’s Low- and Moderate-Income Housing Fund.

Parcel 1 Apportioned Sales Tax Generation shall be defined as an amount equal to the applicable portion of tax revenues actually received by the City from the application of BradleyBurns Local Sales and Use Tax Law on the privilege of selling and leasing tangible personal property at retail on transactions occurring on Parcel 1 and cannot exceed the sum of the Parcel 1 Apportioned Sales Tax Generation Annual Cap and carry over payment. -98-
City of Hawthorne
Notes to Basic Financial Statements
For the Fiscal Year Ended June 30, 2022
19) OTHER REQUIRED DISCLOSURES
Deficit in Fund Balance
The following funds have deficits in fund balance or net position at June 30, 2022:

Fund
Nonmajor Governmental Funds:

Amount
Special Revenue Funds:

Street Lighting $ (21,572)
(107,357)
(253,115)
(190,103)
(424,053)
(5,516)
California Office of Traffic Safety
Local Law Enforcement Block Grant
Community Development Block Grant
RPSOD Jim Thorpe Holly Glenn
Permanent Local Housing Allocation
SB2 Planning Grant (249,289)
LEAP Grant (130,706)
Capital Projects Fund:

State Park Improvement Grant
Debt Service Fund:
(339,762)
2019 Pension Obligation Bond
Internal Service Fund:
(1,537,622)
Insurance Reserve (5,675,971)
The City intends to fund these deficits with future revenue, transfers and reductions of expenditures/expenses.
-99-

REQUIRED SUPPLEMENTARY

INFORMATION
City of Hawthorne
Required Supplementary Information
General Fund
Major Governmental Funds
General Fund is used to account for financial resources traditionally associated with general government operations, which are not required legally or by financial management to be accounted for in another fund.
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City of Hawthorne
Budgetary Comparison Schedule by Department
General Fund
For the Fiscal Year Ended June 30, 2022
Budgeted Amounts Actual
Amounts
Variance with
Original Final Final Budget
Revenues
Taxes $ 68,869,000
2,458,400
1,274,660
2,209,998
2,600,000
150,000
$ 70,369,000
2,508,400
1,274,660
2,833,198
2,600,000
250,000
$ 88,866,674
1,553,744
1,269,922
3,021,149
3,268,876
(1,243,570)
350,000
$ 18,497,674
(954,656)
(4,738)
Licenses and permits
Intergovernmental
Charges for services
Fines and forfeitures
Use of money and property
Contributions
187,951
668,876
(1,493,570)
200,000 350,000 -
Miscellaneous 1,715,000
79,477,058
1,810,000
81,995,258
1,849,783
98,936,578
39,783
Total revenues 16,941,320
Expenditures
Current:

General government:

Mayor and City Council
City clerk
City manager
City treasurer
5,492,614
223,746
469,291
28,781
5,579,741
223,746
643,108
28,781
6,069,954
144,331
362,417
27,363
(490,213)
79,415
280,691
1,418
City attorney
Administrative services
Public safety:
562,962
5,604,939
562,962
5,674,974
73,148
4,776,632
489,814
898,342
Police 49,411,272 52,720,708 53,249,352 (528,644)
Community development:

Planning
Building and safety
Parks and recreation
Public works
1,730,475
1,245,518
4,648,037
2,107,803
22,626
1,730,475
1,245,518
4,718,709
2,163,803
22,626
1,233,577
957,701
3,704,975
1,463,847
354,526
496,898
287,817
1,013,734
699,956
(331,900)
2,897,328
Capital outlay
Total expenditures 71,548,064 75,315,151 72,417,823
Excess (deficiency) of revenues over
(under) expenditures 7,928,994 6,680,107 26,518,755 19,838,648 Other Financing Sources (Uses)
Transfers in
Transfers out
- 11,445,620
(7,754,835)
3,690,785
1,467,681
(8,907,765)
(7,440,084)
(9,977,939)
(1,152,930)
(11,130,869)
(7,754,835)
Total other financing sources (uses) (7,754,835)
Net change in fund balance
Fund Balance, Beginning
Fund Balance, Ending
174,159
59,774,544
10,370,892
59,774,544
70,145,436
19,078,671
59,774,544
8,707,779
-
$ 59,948,703 $ $ 78,853,215 $ 8,707,779
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City of Hawthorne
Required Supplementary Information
Major Special Revenue Funds
Major Special Revenue Funds
Hawthorne Housing Authority Special Revenue Fund is used to account for the housing assistance programs for the qualified low-income residents.

American Rescue Plan Act Fund is used to provide relief to the City for the negative impacts caused from the COVID-19 Pandemic.
-102-
City of Hawthorne
Budgetary Comparison Schedule
Hawthorne Housing Authority Special Revenue Fund
For the Fiscal Year Ended June 30, 2022
Budgeted Amounts Actual
Amounts
Variance with
Original Final Final Budget
Revenues
Intergovernmental
Use of money and property
Charges for services
Miscellaneous
$ 12,515,315 $ 12,515,315
-
$ 11,111,866
95 $ (1,403,449)
95 (1,214,934)
8,527
-
- 1,292,744
2,420
77,810
2,420 10,947
Total revenues 12,517,735 13,810,479 11,200,718 (2,609,761) Expenditures
Current:

Community development
Total expenditures
12,351,865
12,351,865
13,644,609
13,644,609
11,092,323
11,092,323
2,552,286
2,552,286
Excess (deficiency) of revenues over
(under) expenditures 165,870 165,870 108,395 (57,475)
Other Financing Uses
Transfers out (202,560)
(202,560)
(202,560)
(202,560)
(192,578)
(192,578)
9,982
Total other financing uses 9,982
Net change in fund balance
Fund Balance, Beginning
Fund Balance, Ending
(36,690)
523,567
(36,690)
523,567
(84,183)
523,567
(47,493)
-
$ 486,877 $ 486,877 $ 439,384 $ (47,493)
-103-
City of Hawthorne
Budgetary Comparison Schedule
American Rescue Plan Act Fund
For the Fiscal Year Ended June 30, 2022
Budgeted Amounts
Original Final
Actual
Amounts
Variance with
Final Budget
Revenues
Charges for services
Miscellaneous
Total revenues
$ -
-
-
$ 15,260,827
-
15,260,827
$ 1,747,309
4,910
1,752,219
$ (13,513,518)
4,910
(13,508,608)
Expenditures
Current:

General government:

Total expenditures
-
-
3,815,207
3,815,207
371,855
371,855
3,443,352
3,443,352
Excess (deficiency) of revenues over
(under) expenditures - 11,445,620 1,380,364 (10,065,256) Other Financing Sources (Uses)
Transfers out -
-
(11,445,620)
(11,445,620)
(1,375,454)
(1,375,454)
10,070,166
Total other financing sources (uses) 10,070,166
Net change in fund balance
Fund Balance, Beginning
Fund Balance, Ending
-
-
-
-
-
-
4,910
-
4,910
-
$ $ $ 4,910 $ 4,910
-104-
City of Hawthorne
Required Supplementary Information
Schedule of Changes in Net Pension Liability and Related Ratios Last Ten Years*
Miscellaneous Plan
Measurement Period 2013-14 2014-15 2015-16 2016-17

TOTAL PENSION LIABILITY
Service Cost $ 2,388,303
12,438,551
$ 2,320,007
12,647,730
(3,637,760)
(3,045,664)
(8,707,272)
$ 2,435,899
13,024,281
(990,439)
-
$ 2,423,798
13,232,559
(1,869,811)
10,775,154
(9,562,803)
Interest
Difference Between Expected and Actual Experience
Changes of Assumptions
Benefit Payments, Including Refunds of Employee Contributions -
-
(8,546,377) (9,518,736)
Net Change in Total Pension Liability
Total Pension Liability - Beginning
Total Pension Liability - Ending (a)
6,280,477
168,926,377
175,206,854
(422,959)
175,206,854
174,783,895
4,951,005
174,783,895
179,734,900
14,998,897
179,734,900
194,733,797

PLAN FIDUCIARY NET POSITION
Contributions - Employer
Contributions - Employee
Net Investment Income
2,197,052
-
1,118,891
2,628,948
1,100,494
3,019,296
2,956,754
1,074,004
700,955
3,304,427
973,001
14,402,918
Benefit Payments, Including Refunds of Employee Contributions Net Plan to Plan Resource Movement
Administrative Expenses
20,960,975
(8,546,377)
-
(8,707,272)
(36,608)
(154,341)
(9,518,736) (9,562,803)
-
(194,723)
-
(83,347)
Other Miscellaneous Income/(Expense)1
Net Change in Fiduciary Net Position
Plan Fiduciary Net Position - Beginning2
- - - -
15,730,541 (2,149,483) (4,870,370) 8,922,820
123,176,915 138,907,456 136,757,973 131,887,603
Plan Fiduciary Net Position - Ending (b) 138,907,456 136,757,973 131,887,603 140,810,423 Plan Net Position Liability / (Asset) - Ending (a) - (b) $ $
36,299,398

82.23%
$
$
38,025,922

78.24%
$
$
47,847,297

73.38%
$
$
53,923,374

72.31%
Plan Fiduciary Net Position as a Percentage of the Total Pension Liability / (Asset)
Covered Payroll3
13,000,397
279.22%
13,145,259
289.27%
14,172,919
337.60%
12,670,141
Plan Net Pension Liability / (Asset) as a Percentage of Covered Payroll 425.59% *Historical information is required only for measurement periods for which GASB 68 is applicable. Measurement date 6/30/2014 (fiscal year 2015) was the first year of implementation. Future years' information will be displayed up to 10 years as information becomes available. 1 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). 2 Includes any beginning of year adjustment.
3 Includes one year’s payroll growth using 2.75 percent payroll growth assumption for fiscal years ended June 30, 2018-19; 3.00 percent payroll growth assumption for fiscal years ended June 30, 2014-17.

Notes to Schedule:

Changes in Benefit Terms: There were no changes to benefit terms that applied to all members of the Public Agency Pool. Additionally, the figures above do not include any liability impact that may have resulted from Golden Handshakes that occurred after the June 30, 2020 valuation date, unless the liability impact is deemed to be material to the Public Agency Pool.

Changes in Assumptions: There were no assumption changes for 2021. For 2020, the Plan adopted a new amortization policy effective with the 2019 actuarial valuation.

The new amortization policy shortens the period over which actuarial gains and losses are amortized from 30 years to 20 years with the payments computed as a level dollar amount. In addition, the new policy does not utilize a five-year ramp-up and ramp-down on UAL bases attributable to assumption changes and non-investment gains/losses. The new policy also does not utilize a five-year ramp-down on investment gains/losses. These changes apply only to new UAL bases established on or after June 30, 2019. There were no changes in assumptions in 2019. In 2018, demographic assumptions and inflation rate were changed in accordance to the CalPERS Experience Study and Review of Actuarial Assumptions December 2017. There were no changes in the discount rate in 2019. In 2017, the accounting discount rate was reduced from 7.65 percent to 7.15 percent. In 2016, there were no changes in the discount rate. 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.
-105-
2017-18 2018-19 2019-20 2020-21
$ 2,499,955
13,468,820
(1,608,731)
(888,445)
$ 2,467,368
13,791,792
(1,116,355)
-
$ 2,391,450
14,191,317
154,829
$ 2,478,272
14,602,910
699,629
- -
(10,222,978) (10,415,096) (11,161,427) (11,977,102)
3,248,621
194,733,797
197,982,418
4,727,709
197,982,418
202,710,127
5,576,169
202,710,127
208,286,296
5,803,709
208,286,296
214,090,005
3,987,019
990,915
11,595,557
4,555,596
997,444
9,470,424
57,022,354
1,002,245
9,133,158
1,612,478
1,047,853
45,476,553
(10,222,978)
(341)
(10,415,096)
(581)
(11,161,427) (11,977,102)
- -
(219,421) (104,563) (212,912) (206,592)
(416,685) 341 - -
5,714,066 4,503,565 55,783,418 35,953,190
140,810,423 146,524,489 151,028,054 206,811,472
146,524,489 151,028,054 206,811,472 242,764,662
$
$
51,457,929

74.01%
$
$
51,682,073

74.50%
$
$
1,474,824

99.29%
$
$
(28,674,657)
113.39%
12,808,459
401.75%
12,552,747
411.72%
12,358,915

11.93%
12,768,014
-224.58%
-106-
City of Hawthorne
Required Supplementary Information
Schedule of Plan Contributions – Agent Plan
Last Ten Years*
Miscellaneous Plan
Contributions in
Relation to the
Actuarially
Determined
Contribution
Contributions as
a Percentage of
Covered
Payroll
Actuarially
Determined
Contribution
Contribution
Deficiency
(Excess)
Employer's
Covered
Payroll
Fiscal
Year
Measurement
Date
6/30/2015
6/30/2016
6/30/2017
6/30/2018
6/30/2019
6/30/2020
6/30/2021
6/30/2022
6/30/2014
6/30/2015
6/30/2016
6/30/2017
6/30/2018
6/30/2019
6/30/2020
6/30/2021
$ 2,628,948
2,956,754
3,304,427
3,987,019
4,555,596
5,392,780
1,612,478
1,598,786
$ (2,628,948)
(2,956,754)
(3,304,427)
(3,987,019)
(4,555,596)
(57,022,354)
(1,612,478)
(1,598,786)
$ -
-
-
-
$ 13,145,259
14,172,919
12,670,141
12,808,459
12,552,747
12,358,915
12,768,014
11,191,429

20.00%

20.86%

26.08%

31.13%

36.29%

43.63%

12.63%

14.29%
-
(51,629,574)
-
-
*Historical information is required only for measurement periods for which GASB 68 is applicable. Measurement date 6/30/2014 (fiscal year 2015) was the first year of implementation. Future years' information will be displayed up to 10 years as information becomes available.

Notes to Schedule:

The actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year 2021-22 were from the June 30, 2020 Funding Valuation Report.

Actuarial Cost Method
Amortization Method/Period
Asset Valuation Method
Actuarial Assumptions:

Discount Rate
Entry Age Normal
For details, see June 30, 2020 Funding Valuation Report.

Fair Value of Assets

7.15%
Inflation 2.50%
Salary Increases Varies by Entry Age and Service
Mortality Rate Table The mortality table used was developed based on CalPERS’ specific data. The probabilities of mortality are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015. Preretirement and Post-retirement mortality rates include 15 years of projected mortality improvement using 90% of Scale MP-2016 published by the Society of Actuaries.

The lesser of contract COLA or 2.50% until Purchasing Power Protection Allowance floor on purchasing power applies, 2.50% thereafter.

Post Retirement Benefit Increase
-107-
City of Hawthorne
Required Supplementary Information
Schedule of City’s Proportionate Share of the Plan’s Net Pension Liability and Related Ratios as of the Measurement Date
Last Ten Years*
Safety Plan
Employer's
Proportionate
Share of the
Collective Net
Pension Liability
/ (Asset) as a
percentage of
the Employer's
Covered Payroll
Pension Plan's
Fiduciary Net
Position as a
percentage of
the Total
Employer's
Proportionate
Share of the
Collective Net
Pension Liability /
(Asset)
Employer's
Proportion of the
Collective Net
Pension Liability / Employer's
Covered Payroll
Pension Liability
/ (Asset) (Asset)1 Measurement Date
6/30/2014
6/30/2015
6/30/2016
6/30/2017
6/30/2018
6/30/2019
6/30/2020
6/30/2021

0.56329%

0.60260%

0.61630%

0.61251%

0.63994%

0.64788%

0.02863%
-0.63645%
$ 35,050,308
41,362,512
53,325,378
60,744,172
61,666,264
66,388,233
3,115,161
$ 7,923,329
9,859,032
9,229,395
8,569,976
7,590,002
10,129,496
8,106,797
8,335,602
442.37%
419.54%
577.78%
708.80%
812.47%
655.40%

38.43%

81.42%

78.28%

72.80%

70.97%

71.33%

70.47%

98.67%
(34,421,128) -412.94% 114.32%
1 Proportion of the net pension liability represents the plan's proportion of PERF C, which includes both the Miscellaneous and Safety Risk Pools excluding the 1959 Survivors Risk Pool.
*Historical information is required only for measurement periods for which GASB 68 is applicable. Measurement date 6/30/2014 (fiscal year 2015) was the first year of implementation. Future years' information will be displayed up to 10 years as information becomes available.
-108-
City of Hawthorne
Required Supplementary Information
Schedule of Plan Contributions – Cost Sharing Plan
Last Ten Years*
Safety Plan
Contributions in
Relation to the
Actuarially
Determined
Contribution
Actuarially
Determined
Contribution
Contribution
Deficiency
(Excess)
Contributions as
a Percentage of
Covered Payroll
Measurement
Date
Employer's
Fiscal Year Covered Payroll
6/30/2015
6/30/2016
6/30/2017
6/30/2018
6/30/2014
6/30/2015
6/30/2016
6/30/2017
$ 2,714,348 $ (2,714,348)
(3,638,229)
(4,092,276)
(4,728,485)
$ -
-
-
-
$ 9,859,032
9,229,395
8,569,976
7,590,002

27.53%

39.42%

47.75%

62.30%
3,638,229
4,092,276
4,728,485
6/30/2019
6/30/2020
6/30/2021
6/30/2022
6/30/2018
6/30/2019
6/30/2020
6/30/2021
5,532,655
6,347,166
2,397,913
2,851,665
(5,532,655)
(73,465,481)
(2,397,913)
(2,851,665)
- 10,129,496
8,106,797
8,335,602
9,084,823

54.62%

78.29%

28.71%

31.39%
(67,118,315)
-
-
*Historical information is required only for measurement periods for which GASB 68 is applicable. Measurement date 6/30/2014 (fiscal year 2015) was the first year of implementation. Future years' information will be displayed up to 10 years as information becomes available.

Notes to Schedule:

Changes in Assumptions: There were no assumption changes for 2021. For 2020, the Plan adopted a new amortization policy effective with the 2019 actuarial valuation. The new amortization policy shortens the period over which actuarial gains and losses are amortized from 30 years to 20 years with the payments computed as a level dollar amount. In addition, the new policy does not utilize a five-year ramp-up and ramp-down on UAL bases attributable to assumption changes and non-investment gains/losses. The new policy also does not utilize a fiveyear ramp-down on investment gains/losses. These changes apply only to new UAL bases established on or after June 30, 2019. There were no changes in assumptions in 2019. In 2018, demographic assumptions and inflation rate were changed in accordance to the CalPERS Experience Study and Review of Actuarial Assumptions December 2017. There were no changes in the discount rate in 2019. In 2017, the accounting discount rate was reduced from 7.65 percent to 7.15 percent. In 2016, there were no changes in the discount rate. 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. -109-
City of Hawthorne
Required Supplementary Information
Schedule of Changes in the Net OPEB Liability and Related Ratios Last Ten Years*
Fiscal Year
Measurement Period
2017-18
2016-17
2018-19
2017-18
2019-20
2018-19
2020-21
2019-20
2021-22
2020-21
Total OPEB Liability
Service cost $ 4,251,000 $ 3,574,000 $ 3,405,180 $ 3,555,411 $ 5,252,506 Interest 3,360,000 3,863,000 4,148,492 3,830,827 3,168,811 Differences between expected and
actual experience
Changes of assumptions
Benefit payments
Net change in total OPEB liability
Total OPEB liability - beginning
Total OPEB liability - ending
- - (8,450,705)
5,945,521
(2,926,000)
2,122,488
105,254,000
107,376,488
- (14,253,534)
(8,870,441)
(3,202,013)
(17,904,671)
139,733,637
121,828,966
(14,185,000)
(2,713,000)
(9,287,000)
115,015,000
105,728,000
(5,105,000)
(2,806,000)
(474,000)
105,728,000
105,254,000
27,930,290
(2,959,379)
32,357,149
107,376,488
$ 139,733,637
$
$
$
$
$
$
$
$
Covered-employee payroll $
(1) 24,186,000
437.1%
25,246,508
416.9%
25,373,487
423.2%
27,111,119
515.4%
27,282,854
Total OPEB liability as a percentage of covered-employee payroll 446.5% (1) Notes to schedule:

The City does not have assets accumulated in a trust that meets the criteria of GASB 75 to pay related benefits. (1) Covered-employee payroll represented above is based on covered-employee payroll provided by the employer. GASB 75 defines covered-employee payroll as the total payroll of employees that are provided OPEBs through the OPEB plan. Contributions are not based on a measure of pay, therefore, coveredemployee payroll is used in this schedule.

Significant changes in assumptions:

In fiscal year ended June 30, 2022 (Measurement date June 30, 2021), the discount rate was updated to 2.16% from prior years' rate of 3.50% based on municipal bond rate as of the measurement date.
*Historical information is required only for measurement periods for which GASB 75 is applicable. Future years' information will be displayed up to 10 years as information becomes available.
-110-
City of Hawthorne
Notes to Required Supplementary Information
June 30, 2022
General Budget Policies
The City Council approves each year's budget submitted by the City Manager prior to the beginning of the new fiscal year. Public hearings are conducted prior to its adoption by the Council. Supplemental appropriations, where required during the period, are also approved by the Council. Intradepartmental budget changes are approved by the City Manager.

Expenditures may not exceed appropriations at the department level, which is the legal level of control. During the year, several supplementary appropriations were necessary. At fiscal yearend, all operating budget appropriations lapse.

Budgets for all governmental type funds are adopted on a basis consistent with generally accepted accounting principles. Annual budgets are adopted for the General, Special Revenue, Capital Project and Debt Service Funds, with the exception of the following Special Revenue Funds:1) Homeless Prevention and Rapid Re-housing Program (HPRP); 2) Edward Byrne Memorial Justice Assistance Program; 3) American Down Payment Dream Program; 4) RPSOD Jim Thorpe Holly Glenn Fund; 5) SB 1383 Local Assistance Grant Fund; 6) Permanent Local Housing Allocation Fund. The only Capital Project fund that did not have an annual adopted budget was the Community Service Center Fund.

Excess of Expenditures over Appropriations
Excesses of expenditures over appropriations at the department level are as follows:

Fund Appropriations Expenditures Excess
Major Governmental Fund
General Fund:

General government:

Mayor and City Council
Public safety:
$ 5,579,741 $ 6,069,954 $ (490,213)
Police
Capital outlay
52,720,708
22,626
53,249,352
354,526
(528,644)
(331,900)
Nonmajor Governmental Funds
Special Revenue Fund:

Street Lighting
Public works 688,791 693,854 (5,063)
-111-

SUPPLEMENTARY INFORMATION
City of Hawthorne
Non-Major Governmental Funds
Special Revenue Funds
Special revenue funds are used to account for specific revenues that are legally restricted to expenditure for particular purposes.

Street Lighting Fund is used to account for the cost of providing lighting and intersection safety lighting on all City streets. The Engineering Division provides engineering and administration for the street lighting assessment district.

Gas Tax Fund is used to account for the City’s share of revenues derived from the State Highway Users Tax Account Sections 2105, 2106, 2107 and 2107.5. Gasoline taxes must be used for maintenance and improvement of City streets, which serve as State and County thoroughfares.

Street Fund is used to account for all related revenues and expenditures, including street repair, reconstruction and maintenance, which are not required to be accounted for in the City's State Gas Tax Fund.

Asset Forfeiture Fund is used to account for all revenues and expenditures related to monies and property seized by the Police Department in drug related incidents. These funds may only be expended on activities used to enhance law enforcement activities.

COPS Fund is used to account for money appropriated statewide and to be used for the supplemental funding of front line law enforcement. These services include personnel, equipment, and programs that meet front line law enforcement objectives.

The California Office of Traffic Safety Fund is used to assist in offsetting the personnel costs for the Sobriety Checkpoint Program and the Seat Belt Compliance Program. No budget was legally adopted for the fund.

Edward Byrne Memorial Justice Assistance Program Fund is used to account for financial assistance provided to local law enforcement's agencies to expand efforts in addressing alcohol-related problems. No budget was legally adopted for the fund.

Local Law Enforcement Block Grant Fund is used to account for both Federal (90%) and City (10%) funds. This program allows for local law enforcement to provide equipment, technology and other materials directly related to law enforcement functions. 2009 Street Improvements Fund is used to account for the City's roadway improvement projects from street and intersection widening to pavement rehabilitations/reconstructions, upgrade or replacement of traffic signals, improvement of street grading and drainage and concrete improvement including ADA accessibility as well as sidewalks and curbs/gutters throughout the City. Funding for such projects are varied and usually received through competitive grants based on availability.

MTA Measure R Fund is an ongoing maintenance and Capital Improvement Transportation Fund.
-112-
City of Hawthorne
Non-Major Governmental Funds, Continued)
Special Revenue Funds, (continued)
Proposition A Fund is used to account for revenues received by the State; funneled to the City through the Los Angeles County Metropolitan Transit Authority. The City uses these funds for Dial-A-Ride, Recreational Transit and Bus Stop Maintenance. Excess of these funds are traded with other Los Angeles County municipalities for General Funds.

MTA Measure M Fund is used to account for the ongoing maintenance and Capital Improvement Transportation Fund.

American Down Payment Dream Fund is used to eliminate the obstacles to lower income families by providing upfront down payment and closing costs assistance. No budget was legally adopted for the fund.

Proposition C Fund is used to account for a second half-cent sales tax approved by the voters, the proceeds of which are used to improve transit service and operations, reduce traffic congestion, improve air quality and efficiently operate and improve the condition of streets and highways utilized by public transit.

Air Quality Fund is used to support the South Coast Air Quality Management District's (SCAQMD) imposition of an additional vehicle registration fee and to receive fee revenues for implementing programs to reduce air pollution from motor vehicles.

California Used Oil Recycling Fund is used to account for all the revenues and expenditures associated with grant funds received from the State Integrated Waste Management Board to promote the recycling of used motor oil.

California Beverage Container Recycling Fund is used to account for all the revenues and expenditures associated with grant funds received from the Department of Conservation.

Program is funded by (CRV) California Redemption Value Funds.

Hawthorne Blvd Mobility Improvement Program Fund is used to account for the project that will improve the storm drain system along Hawthorne Blvd., between El Segundo Blvd. and Rosecrans Ave. to eliminate local flooding and will install large infiltration chambers in three preselected areas under center medians for diverting runoff from Dominguez Channel to underground water supply. All traffic signals will be replaced and upgraded throughout the project limits and a new traffic signal will be constructed at the intersection of Hawthorne Blvd. and 141st Street. All center medians will be completely reconstructed with new designs to accommodate new dedicated left turn pockets and as result, entire landscape areas will be replaced with newly designed landscape and irrigation systems. New trees will be planted. 105,000 square feet of new sidewalks and entire pavement structural system will be replaced throughout the project limits.

CATV Peg Fund is used to account for monies received from the City’s cable television franchisee.

Housing Asset Fund accounts for assets used for low and moderate income housing activities in accordance with the applicable housing-related regulations -113-
City of Hawthorne
Non-Major Governmental Funds, Continued)
Special Revenue Funds, (continued)
HOME Grant Fund is used to account for HOME Fund grants received from the U.S.

Department of Housing & Urban Development. These funds are to be used predominantly to aid low & moderate income residents with their housing needs.

Community Development Block Grant Fund is used to account for Federal grants received from the Department of Housing and Urban Development (HUD). Grant activity is administered by the Community Development Department and is predominantly restricted to activities in ‘target areas’.

HPRP Funds is used to account for transactions related to the Homeless Prevention and Rapid Re-housing Program. The aim of the program is to assist homeless households and those at risk of homelessness. No budget was legally adopted for the fund.

FEMA Grant Fund is used to provide the city with assistance for the management, control and reduction of immediate threats to public health and safety.

RPSOD Jim Thorpe Holly Glenn Fund is used to rehabilitee and improve the Jim Thorpe Parks. No budget was legally adopted for the fund.

SB 1383 Local Assistance Grant Fund is used to aid in implementing CalRecycle regulations associated with capacity planning, collection, edible food recovery, and education & outreach.

No budget was legally adopted for the fund.

Permanent Local Housing Allocation Fund is used to address local community housing needs. No budget was legally adopted for the fund.

CARES Act Fund is used to provide direct economic aid to State and Local governments negatively impact by the COVID-19 pandemic.

MTA Measure W Fund is used to account for the ongoing maintenance and Capital Improvement Transportation Fund.

SB2 Planning Grant Fund is used to implement the Safety and Environmental Justice Elements of the Housing Element to advance policies and strategies that address climate resiliency, sustainability, and equity and fair access to housing, job, healthy groceries, and mobility options.

LEAP Grant Fund is used to implement a development permit tracking system and complete the 6th cycle Housing Element and RHNA allocation.

Capital Projects Funds
Capital projects funds are used to account for the acquisition and construction of major capital facilities other than those financed by proprietary funds. -114-
City of Hawthorne
Non-Major Governmental Funds, Continued)
Capital Projects Funds, (continued)
Development Impact Fund is used to account for both the collection and expenditures of impact fees imposed on all developments within the City boundaries. These fees are used to defray the costs associated with infrastructure improvements due to new developments.

Community Services Center Fund is used to account for cost of upgrading the Community Center, including a new senior center, a multipurpose room and designated bus turnout. The upgrades are to facilitate pedestrian accessibility and to provide local and regional transit services for senior and disabled citizens. No budget was legally adopted for the fund.

State Park Improvement Grant Fund is to provide a clean, safe, and accessible environment for the community members. The project scope includes removal of deteriorated play equipment and installation of new equipment, reconfiguration of walking paths and fitness zone to increase accessibility.

Debt Service Funds
Debt service funds are used to account for debt service transactions including revenue collection and payments of principal and interest on long-term obligations.

Public Financing Authority Fund is used to account for debt issued for the purpose of financing capital improvements throughout the City. In 1992, the Authority issued $10 million in Certificates of Participation to provide financing for acquisitions, construction, and improvements within the City. In 1997, these certificates were refunded by the 1997 Certificate of Participation.

Funds are transferred from the General Fund to make the debt service payments. 2016 Refunding Bonds is used to account for the debt service on the 2016 Certificate of Participation Series A and Series B bonds.
2016 Direct Placement Lease Financing Fund is used to account for the debt service on the 2016 Direct Placement Lease Financing.
2019 Pension Obligation Bond Fund is used to account for the debt service on the 2019 Taxable Pension Obligation Bonds.
-115-
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City of Hawthorne
Combining Balance Sheet
Non-Major Governmental Funds
June 30, 2022
Special Revenue Funds
Street
Lighting
Gas
Tax Street
2,334,346
ASSETS
Cash and investments
Cash and investments with fiscal agents
Receivables:
$ 16,673 $ 1,107,328
-
$
- -
Accounts
Taxes
Interest
Due from Successor Agency
Total assets
-
19,738
56 469,240 4,750
7,125
2,737
-
1,263
- - -
$
$
36,467 $
$
1,577,831 $
$
2,348,958

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES AND FUND BALANCES
Liabilities:

Accounts payable 56,446 327,799 74,060
Accrued liabilities 1,593 12,903 24,538
Unearned revenue - - -
Deposits payable - - -
Due to other governments
Due to other funds
-
-
-
-
-
-
Total liabilities 58,039 340,702 98,598
Deferred Inflows of Resources:

Unavailable revenue - - -
Fund Balances (Deficit):

Restricted
Unassigned
- 1,237,129
-
2,250,360
(21,572) -
Total fund balances (21,572) 1,237,129 2,250,360
Total liabilities, deferred inflows of
resources, and fund balances $ 36,467 $ 1,577,831 $ 2,348,958 -116-
(continued)
Special Revenue Funds
California Edward Byrne
Memorial Justice
Assistance Program
Local Law
Enforcement
Block Grant
Asset Office of
Forfeiture COPS Traffic Safety
$ 908,055 $ 492,878 $ -
-
$ 17
-
$ -
- - -
16,494 - 2,993
-
-
-
-
-
-
-
110,404
-
-
-
-
617
-
-
-
-
$
$
924,549 $
$
493,495 $
$
2,993 $
$
17 $
$
110,404
13,008 -
-
-
-
-
-
-
7,007
673
2,531
-
-
17 -
-
-
-
-
-
-
-
-
-
-
-
-
-
-
97,146
107,357
253,115
13,008 17 253,115
- - 2,993 - 110,404
911,541
-
493,495
-
- -
-
-
(107,357) (253,115)
911,541 493,495 (107,357) - (253,115)
$ 924,549 $ 493,495 $ 2,993 $ 17 $ 110,404
-117-
City of Hawthorne
Combining Balance Sheet
Non-Major Governmental Funds
June 30, 2022
Special Revenue Funds
2009 Street
Improvements
MTA
Measure R
Proposition
A
ASSETS
Cash and investments
Cash and investments with fiscal agents
Receivables:
$ 3,197,284 $ 2,103,432
-
$ 3,058,421
- -
Accounts 1,056,852 - -
Taxes
Interest
Due from Successor Agency
Total assets
-
3,829
-
-
2,931
-
-
3,609
-
$
$
4,257,965 $
$
2,106,363 $
$
3,062,030

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES AND FUND BALANCES
Liabilities:

Accounts payable 18,300 - 62,779
Accrued liabilities 15,966 511 3,686
Unearned revenue - - -
Deposits payable - - -
Due to other governments
Due to other funds
-
-
-
-
-
-
Total liabilities 34,266 511 66,465
Deferred Inflows of Resources:

Unavailable revenue 952,150 - -
Fund Balances (Deficit):

Restricted
Unassigned
3,271,549
-
2,105,852
-
2,995,565
-
Total fund balances 3,271,549 2,105,852 2,995,565
Total liabilities, deferred inflows of
resources, and fund balances $ 4,257,965 $ 2,106,363 $ 3,062,030 -118-
(continued)
Special Revenue Funds
American
Down Payment
Dream Program
California
Used Oil
Recycling
MTA
Measure M
Proposition
C
Air
Quality
$ 1,270,606 $ 15,600
-
$ 2,753,003
-
$ 152,294 $ 170,340
- - -
- - - 28,614 -
-
1,511
-
-
-
-
-
3,189
-
-
159
-
-
202
-
$
$
1,272,117 $
$
15,600 $
$
2,756,192 $
$
181,067 $
$
170,542
2,446
2,392
-
-
-
-
-
-
11,868
4,419
140
-
-
-
-
-
-
-
22,436
-
-
-
-
-
-
-
-
- -
4,838 - 16,287 140 22,436
- - - - -
1,267,279
-
15,600
-
2,739,905
-
180,927
-
148,106
-
1,267,279 15,600 2,739,905 180,927 148,106
$ 1,272,117 $ 15,600 $ 2,756,192 $ 181,067 $ 170,542
-119-
City of Hawthorne
Combining Balance Sheet
Non-Major Governmental Funds
June 30, 2022
Special Revenue Funds
Hawthorne Blvd
Mobility Improv.

Program
California
Beverage Container
Recycling CATV Peg
487,131
ASSETS
Cash and investments
Cash and investments with fiscal agents
Receivables:
$ 141,127
-
$ 223,721
-
$
-
Accounts 17,498 - 29,589
Taxes
Interest
Due from Successor Agency
Total assets
-
168
-
-
264
-
-
-
-
$
$
158,793 $
$
223,985 $
$
516,720

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES AND FUND BALANCES
Liabilities:

Accounts payable
Accrued liabilities
Unearned revenue
Deposits payable
Due to other governments
Due to other funds
200
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total liabilities 200 -
Deferred Inflows of Resources:

Unavailable revenue 17,498 - -
Fund Balances (Deficit):

Restricted
Unassigned
141,095
-
223,985
-
516,720
-
Total fund balances 141,095 223,985 516,720
Total liabilities, deferred inflows of
resources, and fund balances $ 158,793 $ 223,985 $ 516,720 -120-
(continued)
Special Revenue Funds
Community
Housing
Asset
HOME
Grant
Development
Block Grant
HPRP
Funds
FEMA
Grant
$ 7,156,923 $ 1,356,634 $ -
-
$ 15,153
-
$ 1,304
- - -
-
-
12,124 481,259 -
-
-
- - -
8,446
328,743
7,494,112
-
-
-
-
-
-
-
-
$
$
$
$
1,368,758 $
$
481,259 $
$
15,153 $
$
1,304
12,460 7,339
78 872,158
103,352
5,592
-
17,897
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
40 -
26,415 -
-
-
-
- 390,758
38,915 879,575 517,599
328,743 - 153,763 - -
7,126,454
-
489,183
-
- 15,153
-
1,304
(190,103) -
7,126,454 489,183 (190,103) 15,153 1,304
$ 7,494,112 $ 1,368,758 $ 481,259 $ 15,153 $ 1,304
-121-
City of Hawthorne
Combining Balance Sheet
Non-Major Governmental Funds
June 30, 2022
Special Revenue Funds
SB1383 Local
Assistance
RPSOD
Jim Thorpe
Holly Glenn
Permanent
Local Housing
Grant Allocation
ASSETS
Cash and investments
Cash and investments with fiscal agents
Receivables:
$ -
-
$ 123,637
-
$ -
-
Accounts
Taxes
Interest
Due from Successor Agency
Total assets
-
-
-
-
-
-
-
-
-
5,516
-
-
-
$
$
$
$
123,637 $
$
5,516

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES AND FUND BALANCES
Liabilities:

Accounts payable 424,053 - 469
Accrued liabilities - - -
Unearned revenue - 123,637 -
Deposits payable - - -
Due to other governments
Due to other funds
-
-
-
-
-
5,047
Total liabilities 424,053 123,637 5,516
Deferred Inflows of Resources:

Unavailable revenue - - 5,516
Fund Balances (Deficit):

Restricted
Unassigned
- -
-
-
(424,053) (5,516)
Total fund balances (424,053) - (5,516)
Total liabilities, deferred inflows of
resources, and fund balances $ - $ 123,637 $ 5,516
-122-
(continued)
Capital
Special Revenue Funds
SB2
Projects Funds
CARES
Act
MTA
Measure W
Planning
Grant
LEAP
Grant
Development
Impact
$ 37
37 $ 541,342 $ -
-
$ -
-
$ 3,851,994
- - -
-
-
-
-
- -
-
-
-
-
110,176 -
-
769
-
-
-
-
-
4,578
-
$
$
$
$
542,111 $
$
$
$
110,176 $
$
3,856,572
-
-
-
-
-
-
-
3,578
5,379
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
249,289
249,289
130,706
8,957 130,706
-
-
- - 110,176 -
37 37
533,154
-
- - 3,856,572
(249,289) (130,706) -
533,154 (249,289) (130,706) 3,856,572
$ 37 $ 542,111 $ - $ 110,176 $ 3,856,572
-123-
City of Hawthorne
Combining Balance Sheet
Non-Major Governmental Funds
June 30, 2022
Capital Projects Fund Debt Service Funds
Community State Park Public
Improvement
Grant
Services
Center
Financing
Authority
ASSETS
Cash and investments
Cash and investments with fiscal agents
Receivables:
$ -
-
$ -
-
$ 252,475
1,478,937
Accounts
Taxes
Interest
-
-
-
-
-
337,997 -
-
-
-
-
298
Due from Successor Agency -
Total assets $
$
$
$
337,997 $
$
1,731,710

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES AND FUND BALANCES
Liabilities:

Accounts payable
Accrued liabilities
Unearned revenue
Deposits payable
Due to other governments
Due to other funds
-
-
-
-
-
-
-
320,897 -
-
-
-
-
-
-
-
-
-
-
18,865
Total liabilities 339,762
Deferred Inflows of Resources:

Unavailable revenue - 337,997 -
Fund Balances (Deficit):

Restricted
Unassigned
-
-
- 1,731,710
(339,762) -
Total fund balances - (339,762) 1,731,710
Total liabilities, deferred inflows of
resources, and fund balances $ - $ 337,997 $ 1,731,710
-124-
(concluded)
Debt Service Funds
2016
Direct Placement
Lease Financing
2016
Refunding
Bonds
2019
Pension Obligation
Bond
Total Nonmajor
Governmental
Funds
$ 449,508 $ 45,425
-
$ - $ 32,226,688
1 5 1,478,943
-
-
-
-
-
-
-
-
2,683,506
26,863
34,892
328,743
36,779,635
261
-
449,770
5 -
$
$
$
$
45,430 $
$
5 $
- $
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,446,201
77,787
1,020,762
44,312
-
1,537,627
1,537,627
2,682,553
5,271,615
- - - 2,019,240
449,770
-
45,430
-
- 32,747,875
(1,537,622) (3,259,095)
449,770 45,430 (1,537,622) 29,488,780
$ 449,770 $ 45,430 $ 5 $ 36,779,635
-125-
This page intentionaly left blank
City of Hawthorne
Combining Statement of Revenues, Expenditures and Changes in Fund Balance Non-Major Governmental Funds
For the Fiscal Year Ended June 30, 2022
Special Revenue Funds
Street
Lighting
Gas
Tax Street
Revenues
Taxes $ 582,580 $ -
-
$ -
Licenses and permits -
Intergovernmental
Charges for services
Fines and forfeitures
Use of money and property
Contributions
-
132,000 3,794,793 97,812
- 196,465
-
-
- -
84 -
-
1,939
-
-
5,782
-
Miscellaneous -
Total revenues 714,664 3,796,732 300,059
Expenditures
Current:

General government
Public safety
-
-
-
-
-
-
Community development
Public works
Capital outlay
-
693,854
-
-
1,650,079
-
-
1,450,184
-
Debt service:

Principal retirement
Interest and fiscal charges
Total expenditures
-
-
-
-
-
-
693,854 1,650,079 1,450,184
Excess (deficiency) of revenues
over (under) expenditures 20,810 2,146,653 (1,150,125)
Other Financing Sources (Uses)
Transfers in
Transfers out
- - 904,734
(192,731)
712,003
(8,608)
(8,608)
(1,004,777)
Total other financing sources (uses) (1,004,777)
Net change in fund balances 12,202
(33,774)
(21,572)
1,141,876
95,253
(438,122)
2,688,482
2,250,360
Fund Balances (Deficit), Beginning
Fund Balances (Deficit), Ending $ $ 1,237,129 $
-126-
(continued)
Special Revenue Funds
California Edward Byrne
Memorial Justice
Assistance Program
Local Law
Enforcement
Block Grant
Asset Office of
Forfeiture COPS Traffic Safety
$ -
-
-
-
$ -
-
$ -
-
$ -
-
-
-
-
-
-
-
-
$ -
-
-
-
-
-
-
-
-
214,183 273,915
-
-
-
-
-
-
-
1,216,538
-
-
1,278
-
28,484 -
1,245,022 215,461 273,915
- - - -
-
-
-
-
-
1,039,746 200,000 276,909 110,404
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,039,746 200,000 276,909 110,404
205,276 15,461 (2,994) - (110,404)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
205,276
706,265
911,541
15,461
478,034
493,495
(2,994)
(104,363)
(107,357)
-
-
-
(110,404)
(142,711)
$ $ $ $ $ (253,115)
-127-
City of Hawthorne
Combining Statement of Revenues, Expenditures and Changes in Fund Balance Non-Major Governmental Funds
For the Fiscal Year Ended June 30, 2022
Special Revenue Funds
2009 Street
Improvements
MTA
Measure R
Proposition
A
Revenues
Taxes $ -
-
$ -
-
$ -
Licenses and permits -
Intergovernmental
Charges for services
Fines and forfeitures
Use of money and property
Contributions
270,762 1,365,038 2,194,563
- -
-
1,096
-
7,041
-
-
-
9,119
1,498,470
-
-
5,820
Miscellaneous -
Total revenues 1,778,351 1,370,858 2,202,700
Expenditures
Current:

General government
Public safety
Community development
Public works
-
-
-
-
-
-
-
-
3,032,830
-
-
1,222,472
-
165,593
Capital outlay 813,173
Debt service:

Principal retirement
Interest and fiscal charges
Total expenditures
-
-
-
-
-
-
3,032,830 978,766 1,222,472
Excess (deficiency) of revenues
over (under) expenditures (1,254,479) 392,092 980,228
Other Financing Sources (Uses)
Transfers in
Transfers out
-
-
-
- -
(7,135)
(7,135)
(23,896)
Total other financing sources (uses) (23,896)
Net change in fund balances (1,254,479)
4,526,028
3,271,549
384,957
1,720,895
2,105,852
956,332
2,039,233
2,995,565
Fund Balances (Deficit), Beginning
Fund Balances (Deficit), Ending $ $ $
-128-
(continued)
Special Revenue Funds
American
Down Payment
Dream Program
California
Used Oil
Recycling
MTA
Measure M
Proposition
C
Air
Quality
$ -
-
$ -
-
-
-
-
-
-
-
-
$ -
-
$ -
-
$ -
-
1,544,698 1,820,345 110,833 13,199
-
-
-
-
-
-
-
-
2,870
-
-
6,225
-
-
382
-
-
400
-
-
1,547,568 1,826,570 111,215 13,599
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,081,847
-
-
1,277,431
-
100,840 -
10,646
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,081,847 1,277,431 100,840 10,646
465,721 - 549,139 10,375 2,953
- -
-
-
- -
-
-
-
(28,062)
(28,062)
(43,408)
(43,408)
(2,553)
(2,553)
437,659
829,620
- 505,731
2,234,174
2,739,905
10,375
170,552
180,927
400
147,706
148,106
15,600
$ 1,267,279 $ 15,600 $ $ $
-129-
City of Hawthorne
Combining Statement of Revenues, Expenditures and Changes in Fund Balance Non-Major Governmental Funds
For the Fiscal Year Ended June 30, 2022
Special Revenue Funds
California
Beverage Container
Recycling
Hawthorne Blvd
Mobility Improv.

Program CATV Peg
Revenues
Taxes $ -
-
-
-
$ -
-
-
-
-
$ -
Licenses and permits
Intergovernmental
Charges for services
Fines and forfeitures
Use of money and property
Contributions
87,479
-
-
-
-
-
-
-
355
-
-
548
-
Miscellaneous -
Total revenues 355 548 87,479
Expenditures
Current:

General government
Public safety
Community development
Public works
-
-
-
-
-
-
-
-
-
-
-
-
-
14,949
Capital outlay -
Debt service:

Principal retirement
Interest and fiscal charges
Total expenditures
-
-
-
-
-
-
-
14,949 -
Excess (deficiency) of revenues
over (under) expenditures (14,594) 548 87,479
Other Financing Sources (Uses)
Transfers in
Transfers out
- -
-
-
-
-
-
(2,550)
Total other financing sources (uses) (2,550)
Net change in fund balances (17,144)
158,239
141,095
548
223,437
223,985
87,479
429,241
516,720
Fund Balances (Deficit), Beginning
Fund Balances (Deficit), Ending $ $ $
-130-
(continued)
Special Revenue Funds
Community
Housing
Asset
HOME
Grant
Development
Block Grant
HPRP
Funds
FEMA
Grant
$ -
-
-
$ -
-
$ -
-
$ -
-
-
-
-
-
-
-
-
$ -
-
28,494 1,035,269 188,345
51,849 -
-
-
-
-
- -
357,202 80,921 70,545 47
-
-
-
-
-
-
-
-
409,051 109,415 1,105,814 188,392
39,430 -
-
-
-
-
-
-
-
-
-
-
-
-
-
-
129,514 27,171 789,534
-
-
-
-
-
-
-
-
-
-
355,000
32,356
1,176,890
-
-
-
-
-
168,944 27,171 -
240,107 82,244 (71,076) - 188,392
- - - -
-
-
-
(5,362)
(5,362)
(1,381)
(1,381)
(12,143)
(12,143)
(106,649)
(106,649)
234,745
6,891,709
7,126,454
80,863
408,320
489,183
(83,219)
(106,884)
(190,103)
- 81,743
(80,439)
1,304
15,153
$ $ $ $ 15,153 $
-131-
City of Hawthorne
Combining Statement of Revenues, Expenditures and Changes in Fund Balance Non-Major Governmental Funds
For the Fiscal Year Ended June 30, 2022
Special Revenue Funds
RPSOD
Jim Thorpe
Holly Glenn
SB1383 Local
Assistance
Grant
Permanent
Local Housing
Allocation
Revenues
Taxes $ -
-
-
-
-
-
-
-
-
$ -
-
-
-
-
-
-
-
-
$ -
-
-
-
-
-
-
-
-
Licenses and permits
Intergovernmental
Charges for services
Fines and forfeitures
Use of money and property
Contributions
Miscellaneous
Total revenues
Expenditures
Current:

General government
Public safety
Community development
Public works
-
-
-
-
-
-
-
-
-
424,053 5,516
-
-
-
Capital outlay -
Debt service:

Principal retirement
Interest and fiscal charges
Total expenditures
-
-
-
-
-
-
-
424,053 5,516
Excess (deficiency) of revenues
over (under) expenditures (424,053) - (5,516)
Other Financing Sources (Uses)
Transfers in
Transfers out
-
-
-
-
-
-
-
-
Total other financing sources (uses) -
Net change in fund balances (424,053)
-
-
-
-
(5,516)
Fund Balances (Deficit), Beginning -
Fund Balances (Deficit), Ending $ (424,053) $ $ (5,516) -132-
(continued)
Capital
Special Revenue Funds
SB2
Projects Fund
CARES
Act
MTA
Measure W
Planning
Grant
LEAP
Grant
Development
Impact
$ -
-
-
-
-
-
-
-
-
$ -
-
$ -
-
-
-
-
-
-
-
-
$ -
-
-
-
-
-
-
-
-
$ -
346,669
786,894 -
-
-
-
-
1,532
-
-
9,492
-
-
788,426 356,161
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
803
-
-
656,126
-
110,176
-
- 69,625
-
-
-
-
-
-
-
-
-
-
-
-
656,126 110,176 70,428
- 132,300 - (110,176) 285,733
-
-
-
- -
-
-
-
-
-
-
-
-
(65,562)
(65,562)
- 66,738
466,416
533,154
- (110,176)
(20,530)
285,733
3,570,839
3,856,572
37 37
(249,289)
$ $ $ (249,289) $ (130,706) $
-133-
City of Hawthorne
Combining Statement of Revenues, Expenditures and Changes in Fund Balance Non-Major Governmental Funds
For the Fiscal Year Ended June 30, 2022
Debt
Capital Projects Fund
Community
Service Funds
Public
Services
Center
State Park
Improvement
Financing
Authority
Revenues
Taxes $ -
-
-
$ -
-
$ -
-
-
-
-
Licenses and permits
Intergovernmental
Charges for services
Fines and forfeitures
Use of money and property
Contributions
410,277
3,656
-
-
-
-
-
-
- 666
-
-
-
Miscellaneous 35
Total revenues 3,656 410,312 666
Expenditures
Current:

General government
Public safety
Community development
Public works
-
-
-
-
5,286
-
-
-
-
-
3,656
-
748,274
-
Capital outlay -
Debt service:

Principal retirement
Interest and fiscal charges
Total expenditures
-
-
-
-
662,629
43,623
3,656 748,274 711,538
Excess (deficiency) of revenues
over (under) expenditures - (337,962) (710,872)
Other Financing Sources (Uses)
Transfers in
Transfers out
-
-
-
-
-
-
725,880
-
Total other financing sources (uses) 725,880
Net change in fund balances -
-
-
(337,962)
(1,800)
15,008
1,716,702
1,731,710
Fund Balances (Deficit), Beginning
Fund Balances (Deficit), Ending $ $ (339,762) $
-134-
(concluded)
Debt Service Funds
2016
Direct Placement
Lease Financing
Total
Non-major
Governmental
Funds
2016
Refunding
Bonds
2019
Pension Obligation
Bond
$ -
-
-
$ -
-
-
-
-
$ -
-
-
$ 582,580
434,148
14,281,420
279,754
1,216,538
557,336
1,504,290
28,519
18,884,585
6,585
-
387
-
-
20,103
-
48 48
473
-
-
-
-
6,972 20,576
-
-
-
-
-
204 -
-
-
-
-
44,920
1,627,059
2,335,881
11,259,667
882,798
-
-
-
-
1,690,000
806,643
2,496,643
190,500
49,930
240,634
2,740,000
3,933,639
6,673,639
5,638,129
4,866,191
26,654,645
(2,489,671) (240,586) (6,653,063) (7,770,060)
2,228,617
-
2,228,617
245,276
-
245,276
6,803,143
-
6,803,143
10,907,650
(1,504,817)
9,402,833
(261,054)
710,824
449,770
4,690
40,740
45,430
150,080
(1,687,702)
(1,537,622)
1,632,773
27,856,007
$ $ $ $ 29,488,780
-135-
City of Hawthorne
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
Street Lighting Special Revenue Fund
For the Fiscal Year Ended June 30, 2022
Budgeted Amounts
Original Final
Actual
Amounts
Variance with
Final Budget
Revenues
Taxes $ 515,700
130,000
300
$ 515,700
130,000
300
$ 582,580
132,000
84 $ 66,880
2,000
(216)
Intergovernmental
Use of money and property
Total revenues 646,000 646,000 714,664 68,664
Expenditures
Current:

Public works
Total expenditures
688,791
688,791
688,791
688,791
693,854
693,854
(5,063)
(5,063)
Excess (deficiency) of revenues over
(under) expenditures (42,791) (42,791) 20,810 63,601
Other Financing Uses
Transfers out (14,465)
(14,465)
(14,465)
(14,465)
(8,608)
(8,608)
5,857
Total other financing uses 5,857
Net change in fund balance (57,256)
(33,774)
(91,030)
(57,256)
(33,774)
(91,030)
12,202
(33,774)
(21,572)
69,458
Fund Balance (Deficit), Beginning -
Fund Balance (Deficit), Ending $ $ $ $ 69,458
-136-
City of Hawthorne
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
Gas Tax Special Revenue Fund
For the Fiscal Year Ended June 30, 2022
Budgeted Amounts
Original Final
Actual
Amounts
Variance with
Final Budget
Revenues
Intergovernmental
Use of money and property
Total revenues
$ 3,887,057
100
3,887,157
$ 3,887,057
100
3,887,157
$ 3,794,793
1,939
3,796,732
$ (92,264)
1,839
(90,425)
Expenditures
Current:

Public works
Total expenditures
1,927,658
1,927,658
1,927,658
1,927,658
1,650,079
1,650,079
277,579
277,579
Excess (deficiency) of revenues over
(under) expenditures 1,959,499 1,959,499 2,146,653 187,154 Other Financing Uses
Transfers out (1,043,359)
(1,043,359)
(1,043,359)
(1,043,359)
(1,004,777)
(1,004,777)
38,582
Total other financing uses 38,582
Net change in fund balance
Fund Balance Beginning
Fund Balance, Ending
916,140
95,253
916,140
95,253
1,141,876
95,253
225,736
-
$ 1,011,393 $ 1,011,393 $ 1,237,129 $ 225,736
-137-
City of Hawthorne
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
Street Special Revenue Fund
For the Fiscal Year Ended June 30, 2022
Budgeted Amounts
Original Final
Actual
Amount
Variance with
Final Budget
Revenues
Intergovernmental
Charges for services
Use of money and property
Miscellaneous
$ 80,100
194,000
13,000
180,000
467,100
$ 80,100
194,000
13,000
180,000
467,100
$ 97,812 $ 17,712
2,465
(7,218)
(180,000)
(167,041)
196,465
5,782
-
Total revenues 300,059
Expenditures
Current:

Public works
Total expenditures
1,919,406
1,919,406
1,919,406
1,919,406
1,450,184
1,450,184
469,222
469,222
Excess (deficiency) of revenues over
(under) expenditures (1,452,306) (1,452,306) (1,150,125) 302,181 Other Financing Sources (Uses)
Transfers in
Transfers out
900,000
(250,246)
649,754
900,000
(250,246)
649,754
904,734
(192,731)
712,003
4,734
57,515
Total other financing sources (uses) 62,249
Net change in fund balance
Fund Balance, Beginning
Fund Balance, Ending
(802,552)
2,688,482
1,885,930
(802,552)
2,688,482
1,885,930
(438,122)
2,688,482
2,250,360
364,430
-
$ $ $ $ 364,430
-138-
City of Hawthorne
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
Asset Forfeiture Special Revenue Fund
For the Fiscal Year Ended June 30, 2022
Budgeted Amounts
Original Final
Actual
Amount
Variance with
Final Budget
Revenues
Fines and forfeitures
Miscellaneous
Total revenues
$ 1,040,000 $ 1,040,000
-
1,040,000
$ 1,216,538
28,484
1,245,022
$ 176,538
28,484
205,022
-
1,040,000
Expenditures
Current:

Public safety
Capital outlay
Total expenditures
931,030
100,000
1,031,030
982,417
100,000
1,082,417
1,039,746
-
1,039,746
(57,329)
100,000
42,671
Excess (deficiency) of revenues
over (under) expenditures 8,970
8,970
(42,417)
(42,417)
706,265
663,848
205,276
205,276
706,265
911,541
247,693
247,693
-
Net change in fund balance
Fund Balance, Beginning
Fund Balance, Ending
706,265
$ 715,235 $ $ $ 247,693
-139-
City of Hawthorne
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
COPS Special Revenue Fund
For the Fiscal Year Ended June 30, 2022
Budgeted Amounts
Original Final
Actual
Amount
Variance with
Final Budget
Revenues
Intergovernmental
Use of money and property
Total revenues
$ 230,000
4,000
234,000
$ 230,000
4,000
234,000
$ 214,183
1,278
215,461
$ (15,817)
(2,722)
(18,539)
Expenditures
Current:

Public safety
Total expenditures
200,000
200,000
200,000
200,000
200,000
200,000
-
-
Excess (deficiency) of revenues over
(under) expenditures 34,000
34,000
34,000
34,000
15,461
15,461
(18,539)
(18,539)
-
Net change in fund balance
Fund Balance, Beginning
Fund Balance, Ending
478,034
512,034
478,034
512,034
478,034
$ $ $ 493,495 $ (18,539)
-140-
City of Hawthorne
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
California Office of Traffic Safety Special Revenue Fund For the Fiscal Year Ended June 30, 2022
Budgeted Amounts
Original Final
Actual
Amount
Variance with
Final Budget
Revenues
Intergovernmental
Total revenues
$ 418,203
418,203
$ 336,050
336,050
$ 273,915
273,915
$ (62,135)
(62,135)
Expenditures
Current:

Public safety
Total expenditures
418,153
418,153
340,320
340,320
276,909
276,909
63,411
63,411
Excess (deficiency) of revenues
over (under) expenditures 50
50 (4,270)
(4,270)
(2,994)
(2,994)
1,276
1,276
-
Net change in fund balance
Fund Balance (Deficit), Beginning
Fund Balance (Deficit), Ending
(104,363)
(104,313)
(104,363)
(108,633)
(104,363)
$ $ $ (107,357) $ 1,276
-141-
City of Hawthorne
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
Local Law Enforcement Block Grant Special Revenue Fund
For the Fiscal Year Ended June 30, 2022
Budgeted Amounts
Original Final
Actual
Amount
Variance with
Final Budget
Revenues
Intergovernmental
Total revenues
$ 118,872
118,872
$ 229,276
229,276
$ -
-
$ (229,276)
(229,276)
Expenditures
Current:

Public safety
Capital outlay
Total expenditures
- 110,404
48,346
158,750
110,404
-
110,404
-
48,346
48,346
48,346
48,346
Excess (deficiency) of revenues over
(under) expenditures 70,526
70,526
70,526
70,526
(110,404)
(110,404)
(142,711)
(253,115)
(180,930)
(180,930)
-
Net change in fund balance
Fund Balance (Deficit), Beginning
Fund Balance (Deficit), Ending
(142,711)
(72,185)
(142,711)
$ $ (72,185) $ $ (180,930)
-142-
City of Hawthorne
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
2009 Street Improvements Special Revenue Fund
For the Fiscal Year Ended June 30, 2022
Budgeted Amounts
Original Final
Actual
Amounts
Variance with
Final Budget
Revenues
Intergovernmental
Use of money and property
Contributions
$ 8,880,000 $ 8,880,000
13,000
-
$ 270,762 $ (8,609,238)
(3,881)
1,498,470
(7,114,649)
13,000
-
8,893,000
9,119
1,498,470
Total revenues 8,893,000 1,778,351
Expenditures
Current:

Public works
Total expenditures
3,703,000
3,703,000
3,703,000
3,703,000
3,032,830
3,032,830
670,170
670,170
Excess (deficiency) of revenues
over (under) expenditures 5,190,000
5,190,000
4,526,028
9,716,028
5,190,000
5,190,000
4,526,028
9,716,028
(1,254,479)
(1,254,479)
4,526,028
3,271,549
6,444,479
(6,444,479)
-
Net change in fund balance
Fund Balance, Beginning
Fund Balance, Ending $ $ $ $ (6,444,479)
-143-
City of Hawthorne
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
MTA Measure R Special Revenue Fund
For the Fiscal Year Ended June 30, 2022
Budgeted Amounts
Original Final
Actual
Amount
Variance with
Final Budget
Revenues
Intergovernmental
Contributions
Total revenues
$ 1,044,000
13,000
1,057,000
$ 1,044,000
13,000
1,057,000
$ 1,365,038
5,820
1,370,858
$ 321,038
(7,180)
313,858
Expenditures
Current:

Public works
Capital outlay
Total expenditures
380,023
700,000
1,080,023
380,023
700,000
1,080,023
165,593
813,173
978,766
214,430
(113,173)
101,257
Excess (deficiency) of revenues over
(under) expenditures (23,023) (23,023) 392,092 415,115
Other Financing Uses
Transfers out (43,014)
(43,014)
(43,014)
(43,014)
(7,135)
(7,135)
35,879
Total other financing uses 35,879
Net change in fund balance
Fund Balance, Beginning
Fund Balance, Ending
(66,037)
1,720,895
1,654,858
(66,037)
1,720,895
1,654,858
384,957
1,720,895
2,105,852
450,994
-
$ $ $ $ 450,994
-144-
City of Hawthorne
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
Proposition A Special Revenue Fund
For the Fiscal Year Ended June 30, 2022
Budgeted Amounts
Original Final
Actual
Amount
Variance with
Final Budget
Revenues
Intergovernmental
Charges for services
Use of money and property
Total revenues
$ 1,674,000 $ 1,674,000
6,300
13,000
1,693,300
$ 2,194,563
1,096
7,041
2,202,700
$ 520,563
(5,204)
(5,959)
509,400
6,300
13,000
1,693,300
Expenditures
Current:

Public works
Total expenditures
1,461,214
1,461,214
1,461,214
1,461,214
1,222,472
1,222,472
238,742
238,742
Excess (deficiency) of revenues
over (under) expenditures 232,086 232,086 980,228 748,142 Other Financing Uses
Transfers out (43,636)
(43,636)
(43,636)
(43,636)
(23,896)
(23,896)
19,740
Total other financing uses 19,740
Net change in fund balance
Fund Balance, Beginning
Fund Balance, Ending
188,450
2,039,233
2,227,683
188,450
2,039,233
2,227,683
956,332
2,039,233
2,995,565
767,882
-
$ $ $ $ 767,882
-145-
City of Hawthorne
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
MTA Measure M Special Revenue Fund
For the Fiscal Year Ended June 30, 2022
Budgeted Amounts
Original Final
Actual
Amounts
Variance with
Final Budget
Revenues
Intergovernmental
Use of money and property
Total revenues
$ 1,170,000
2,000
1,172,000
$ 1,170,000
2,000
1,172,000
$ 1,544,698
2,870
1,547,568
$ 374,698
870
375,568
Expenditures
Current:

Public works
Total expenditures
1,179,464
1,179,464
1,179,464
1,179,464
1,081,847
1,081,847
97,617
97,617
Excess (deficiency) of revenues over
(under) expenditures (7,464) (7,464) 465,721 473,185
Other Financing Uses
Transfers out (53,071)
(53,071)
(53,071)
(53,071)
(28,062)
(28,062)
25,009
Total other financing uses 25,009
Net change in fund balance
Fund Balance, Beginning
Fund Balance, Ending
(60,535)
829,620
769,085
(60,535)
829,620
769,085
437,659
829,620
498,194
-
$ $ $ 1,267,279 $ 498,194
-146-
City of Hawthorne
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
Proposition C Special Revenue Fund
For the Fiscal Year Ended June 30, 2022
Budgeted Amounts
Original Final
Actual
Amount
Variance with
Final Budget
Revenues
Intergovernmental
Use of money and property
Total revenues
$ 1,377,000
14,000
1,391,000
$ 1,377,000
14,000
1,391,000
$ 1,820,345
6,225
1,826,570
$ 443,345
(7,775)
435,570
Expenditures
Current:

Public works
Total expenditures
1,428,048
1,428,048
1,428,048
1,428,048
1,277,431
1,277,431
150,617
150,617
Excess (deficiency) of revenues
over (under) expenditures (37,048) (37,048) 549,139 586,187 Other Financing Uses
Transfers out (22,286)
(22,286)
(22,286)
(22,286)
(43,408)
(43,408)
(21,122)
Total other financing uses (21,122)
Net change in fund balance
Fund Balance, Beginning
Fund Balance, Ending
(59,334)
2,234,174
2,174,840
(59,334)
2,234,174
2,174,840
505,731
2,234,174
2,739,905
565,065
-
$ $ $ $ 565,065
-147-
City of Hawthorne
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
Air Quality Special Revenue Fund
For the Fiscal Year Ended June 30, 2022
Budgeted Amounts
Original Final
Actual
Amount
Variance with
Final Budget
Revenues
Intergovernmental
Use of money and property
Total revenues
$ 100,000
1,000
101,000
$ 100,000
1,000
101,000
$ 110,833
382
111,215
$ 10,833
(618)
10,215
Expenditures
Current:

Community development
Total expenditures
106,840
106,840
106,840
106,840
100,840
100,840
6,000
6,000
Excess (deficiency) of revenues over
(under) expenditures (5,840)
(5,840)
(5,840)
(5,840)
10,375
10,375
16,215
16,215
-
Net change in fund balance
Fund Balance, Beginning
Fund Balance, Ending
170,552
164,712
170,552
164,712
170,552
$ $ $ 180,927 $ 16,215
-148-
City of Hawthorne
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
California Used Oil Recycling Special Revenue Fund
For the Fiscal Year Ended June 30, 2022
Budgeted Amounts
Original Final
Actual
Amounts
Variance with
Final Budget
Revenues
Intergovernmental
Use of money and property
Total revenues
$ 19,800 $ 19,800 $ 13,199
400
13,599
$ (6,601)
400
(6,201)
- -
19,800 19,800
Expenditures
Current:

Public works
Total expenditures
22,709
22,709
22,709
22,709
10,646
10,646
12,063
12,063
Excess (deficiency) of revenues
over (under) expenditures (2,909) (2,909) 2,953 5,862
Other Financing Uses
Transfers out (4,274)
(4,274)
(4,274)
(4,274)
(2,553)
(2,553)
1,721
Total other financing uses 1,721
Net change in fund balance
Fund Balance, Beginning
Fund Balance, Ending
(7,183)
147,706
140,523
(7,183)
147,706
140,523
400
147,706
148,106
7,583
-
$ $ $ $ 7,583
-149-
City of Hawthorne
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
California Beverage Container Recycling Special Revenue Fund For the Fiscal Year Ended June 30, 2022
Budgeted Amounts
Original Final
Actual
Amounts
Variance with
Final Budget
Revenues
Intergovernmental
Use of money and property
Total revenues
$ 19,800 $ 19,800 $ - $ (19,800)
355
(19,445)
- - 355
19,800 19,800 355
Expenditures
Current:

Public works
Total expenditures
34,713
34,713
34,713
34,713
14,949
14,949
19,764
19,764
Excess (deficiency) of revenues over
(under) expenditures (14,913) (14,913) (14,594) 319
Other Financing Uses
Transfers out (8,705)
(8,705)
(8,705)
(8,705)
(2,550)
(2,550)
6,155
Total other financing uses 6,155
Net change in fund balance
Fund Balance, Beginning
Fund Balance, Ending
(23,618)
158,239
134,621
(23,618)
158,239
134,621
(17,144)
158,239
141,095
6,474
-
$ $ $ $ 6,474
-150-
City of Hawthorne
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
Hawthorne Boulevard Mobility Improvement Program Special Revenue Fund For the Fiscal Year Ended June 30, 2022
Budgeted Amounts
Original Final
Actual
Amounts
Variance with
Final Budget
Revenues
Use of money and property
Total revenues
$ -
-
$ -
-
$ 548
548
$ 548
548
Expenditures
Current:

Public works
Total expenditures
42,000
42,000
42,000
42,000
-
-
42,000
42,000
Excess (deficiency) of revenues over
(under) expenditures (42,000)
(42,000)
223,437
181,437
(42,000)
(42,000)
223,437
181,437
548
548
42,548
42,548
-
Net change in fund balance
Fund Balance, Beginning
Fund Balance, Ending
223,437
$ $ $ 223,985 $ 42,548
-151-
City of Hawthorne
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
CATV Peg Special Revenue Fund
For the Fiscal Year Ended June 30, 2022
Budgeted Amounts
Original Final
Actual
Amounts
Variance with
Final Budget
Revenues
Licenses and permits
Total revenues
$ 120,000
120,000
$ 120,000
120,000
$ 87,479
87,479
$ (32,521)
(32,521)
Expenditures
Capital outlay 30,000
30,000
30,000
30,000
-
-
30,000
Total expenditures 30,000
Excess (deficiency) of revenues over
(under) expenditures 90,000
90,000
90,000
90,000
87,479
87,479
(2,521)
(2,521)
-
Net change in fund balance
Fund Balance, Beginning
Fund Balance, Ending
429,241
519,241
429,241
519,241
429,241
$ $ $ 516,720 $ (2,521)
-152-
City of Hawthorne
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
Housing Asset Special Revenue Fund
For the Fiscal Year Ended June 30, 2022
Budgeted Amounts
Original Final
Actual
Amounts
Variance with
Final Budget
Revenues
Charges for services
Use of money and property
Total revenues
$ - $ - $ 51,849
357,202
409,051
$ 51,849
(100,367)
(48,518)
457,569
457,569
457,569
457,569
Expenditures
Current:

General government
Community development
Total expenditures
200,000
197,140
397,140
226,940
197,140
424,080
39,430
129,514
168,944
187,510
67,626
255,136
Excess (deficiency) of revenues over
(under) expenditures 60,429 33,489 240,107 206,618
Other Financing Uses
Transfers out (19,784)
(19,784)
(19,784)
(19,784)
(5,362)
(5,362)
14,422
Total other financing uses 14,422
Net change in fund balance
Fund Balance, Beginning
Fund Balance, Ending
40,645
6,891,709
6,932,354
13,705
6,891,709
6,905,414
234,745
6,891,709
7,126,454
221,040
-
$ $ $ $ 221,040
-153-
City of Hawthorne
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
HOME Grant Special Revenue Fund
For the Fiscal Year Ended June 30, 2022
Budgeted Amounts
Original Final
Actual
Amounts
Variance with
Final Budget
Revenues
Intergovernmental
Use of money and property
Total revenues
$ 4,223,452
45,000
4,268,452
$ 6,390,150
45,000
6,435,150
$ 28,494
80,921
109,415
$ (6,361,656)
35,921
(6,325,735)
Expenditures
Current:

Community development
Total expenditures
4,263,360
4,263,360
6,430,058
6,430,058
27,171
27,171
6,402,887
6,402,887
Excess (deficiency) of revenues over
(under) expenditures 5,092 5,092 82,244 77,152
Other Financing Uses
Transfers out (5,092)
(5,092)
(5,092)
(5,092)
(1,381)
(1,381)
3,711
Total other financing uses 3,711
Net change in fund balance
Fund Balance, Beginning
Fund Balance, Ending
- - 80,863
408,320
489,183
80,863
408,320 -
408,320
408,320
$ $ 408,320 $ $ 80,863
-154-
City of Hawthorne
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
Community Development Block Grant Special Revenue Fund
For the Fiscal Year Ended June 30, 2022
Budgeted Amounts
Original Final
Actual
Amounts
Variance with
Final Budget
Revenues
Intergovernmental
Use of money and property
Total revenues
$ 3,923,110 $ 3,923,110
-
3,923,110
$ 1,035,269
70,545
1,105,814
$ (2,887,841)
70,545
(2,817,296)
-
3,923,110
Expenditures
Current:

Community development
Debt service:
3,530,662 3,577,136 789,534 2,787,602
Principal retirement
Interest and fiscal charges
Total expenditures
355,000
32,356
355,000
32,356
355,000
32,356
-
-
3,918,018 3,964,492 1,176,890 2,787,602
Excess (deficiency) of revenues over
(under) expenditures 5,092 (41,382) (71,076) (29,694)
Other Financing Uses
Transfers out (5,092)
(5,092)
(5,092)
(5,092)
(12,143)
(12,143)
(7,051)
Total other financing uses (7,051)
Net change in fund balance - (46,474)
(106,884)
(153,358)
(83,219)
(106,884)
(190,103)
(36,745)
Fund Balance (Deficit), Beginning -
Fund Balance (Deficit), Ending
(106,884)
$ (106,884) $ $ $ (36,745)
-155-
City of Hawthorne
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
FEMA Grant Special Revenue Fund
For the Fiscal Year Ended June 30, 2022
Budgeted Amounts
Original Final
Actual
Amounts
Variance with
Final Budget
Revenues
Intergovernmental
Use of money and property
Total revenues
$ -
-
-
$ 214,471 $ 188,345
47 188,392
$ (26,126)
47 (26,079)
-
214,471
Expenditures
Current:

Public safety
Total expenditures
-
-
214,471
214,471
-
-
214,471
214,471
Excess (deficiency) of revenues over
(under) expenditures - - 188,392 188,392
Other Financing Uses
Transfers out -
-
-
-
(106,649)
(106,649)
(106,649)
Total other financing uses (106,649)
Net change in fund balance
Fund Balance (Deficit), Beginning
Fund Balance, Ending
- - 81,743
(80,439)
1,304
81,743
(80,439) -
(80,439)
(80,439)
$ $ (80,439) $ $ 81,743
-156-
City of Hawthorne
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
MTA Measure W Special Revenue Fund
For the Fiscal Year Ended June 30, 2022
Budgeted Amounts
Original Final
Actual
Amounts
Variance with
Final Budget
Revenues
Intergovernmental
Use of money and property
Total revenues
$ 747,000
-
747,000
$ 747,000
-
747,000
$ 786,894
1,532
788,426
$ 39,894
1,532
41,426
Expenditures
Current:

Public Works
Total expenditures
951,648
951,648
951,648
951,648
656,126
656,126
295,522
295,522
Excess (deficiency) of revenues over
(under) expenditures (204,648) (204,648) 132,300 336,948 Other Financing Uses
Transfers out (140,154)
(140,154)
(140,154)
(140,154)
(65,562)
(65,562)
74,592
Total other financing uses 74,592
Net change in fund balance
Fund Balance, Beginning
Fund Balance, Ending
(344,802)
466,416
121,614
(344,802)
466,416
121,614
66,738
466,416
533,154
411,540
-
$ $ $ $ 411,540
-157-
City of Hawthorne
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
SB2 Planning Grant Special Revenue Fund
For the Fiscal Year Ended June 30, 2022
Budgeted Amounts
Original Final
Actual
Amounts
Variance with
Final Budget
Revenues
Intergovernmental
Total revenues
$ -
-
$ 86,763
86,763
$ -
-
$ (86,763)
(86,763)
Expenditures
Current:

Community development
Total expenditures
-
-
118,785
118,785
-
-
118,785
118,785
Excess (deficiency) of revenues over
(under) expenditures -
-
(32,022)
(32,022)
-
-
32,022
Net change in fund balance 32,022
Fund Balances (Deficit), Beginning
Fund Balance (Deficit), Ending
(249,289)
(281,311)
(249,289)
(249,289)
-
$ - $ $ $ 32,022
-158-
City of Hawthorne
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
LEAP Grant Special Revenue Fund
For the Fiscal Year Ended June 30, 2022
Budgeted Amounts
Original Final
Actual
Amounts
Variance with
Final Budget
Revenues
Intergovernmental
Total revenues
$ -
-
$ 279,470
279,470
$ -
-
$ (279,470)
(279,470)
Expenditures
Current:

Community development
Total expenditures
-
-
380,335
380,335
110,176
110,176
270,159
270,159
Excess (deficiency) of revenues over
(under) expenditures -
-
(100,865)
(100,865)
(110,176)
(110,176)
(9,311)
Net change in fund balance (9,311)
Fund Balances (Deficit), Beginning
Fund Balance (Deficit), Ending
(20,530) (20,530) -
$ - $ (121,395) $ (130,706) $ (9,311)
-159-
City of Hawthorne
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
Development Impact Capital Projects Fund
For the Fiscal Year Ended June 30, 2022
Budgeted Amounts
Original Final
Actual
Amounts
Variance with
Final Budget
Revenues
Licenses and permits
Use of money and property
Total revenues
$ 700,000
32,000
732,000
$ 700,000
32,000
732,000
$ 346,669
9,492
356,161
$ (353,331)
(22,508)
(375,839)
Expenditures
Current:

Community development
Capital outlay
50,804
600,000
650,804
50,804
600,000
650,804
803
69,625
70,428
50,001
530,375
Total expenditures 580,376
Excess (deficiency) of revenues over
(under) expenditures 81,196
81,196
81,196
81,196
285,733
285,733
204,537
204,537
-
Net change in fund balance
Fund Balance, Beginning
Fund Balance, Ending
3,570,839
3,652,035
3,570,839
3,652,035
3,570,839
$ $ $ 3,856,572 $ 204,537
-160-
City of Hawthorne
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
State Park Improvement Capital Projects Fund
For the Fiscal Year Ended June 30, 2022
Budgeted Amounts
Original Final
Actual
Amounts
Variance with
Final Budget
Revenues
Intergovernmental
Miscellaneous
Total revenues
$ 748,000
-
748,000
$ 748,000
-
748,000
$ 410,277
35 410,312
$ (337,723)
35 (337,688)
Expenditures
Current:

Community development
Total expenditures
748,000
748,000
748,000
748,000
748,274
748,274
(274)
(274)
Excess (deficiency) of revenues over
(under) expenditures -
-
-
-
(337,962)
(337,962)
(337,962)
Net change in fund balance (337,962)
Fund Balances (Deficit), Beginning
Fund Balance (Deficit), Ending
(1,800)
(1,800)
(1,800)
(1,800)
(1,800) -
$ $ $ (339,762) $ (337,962)
-161-
City of Hawthorne
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
Public Financing Authority Debt Service Fund
For the Fiscal Year Ended June 30, 2022
Budgeted Amounts
Original Final
Actual
Amounts
Variance with
Final Budget
Revenues
Use of money and property
Total revenues
$ 4,000
4,000
$ 4,000
4,000
$ 666
666
$ (3,334)
(3,334)
Expenditures
Current:

General government
Debt service:
9,404 9,404 5,286 4,118
Principal retirement
Interest and fiscal charges
Total expenditures
662,628
71,257
743,289
662,628
71,257
743,289
662,629
43,623
711,538
(1)
27,634
31,751
Excess (deficiency) of revenues over
(under) expenditures (739,289) (739,289) (710,872) 28,417 Other Financing Sources
Transfers in 717,930
717,930
717,930
717,930
725,880
725,880
7,950
Total other financing sources 7,950
Net change in fund balance
Fund Balance, Beginning
Fund Balance, Ending
(21,359)
1,716,702
1,695,343
(21,359)
1,716,702
1,695,343
15,008
1,716,702
1,731,710
36,367
-
$ $ $ $ 36,367
-162-
City of Hawthorne
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
2016 Refunding Bonds Debt Service Fund
For the Fiscal Year Ended June 30, 2022
Budgeted Amounts
Original Final
Actual
Amounts
Variance with
Final Budget
Revenues
Charges for services
Use of money and property
Total revenues
$ - $ - $ 6,585
387
6,972
$ 6,585
87 6,672
300
300
300
300
Expenditures
Debt service:

Principal retirement
Interest and fiscal charges
Total expenditures
2,102,814
441,581
2,544,395
2,102,814
441,581
2,544,395
1,690,000
806,643
2,496,643
412,814
(365,062)
47,752
Excess (deficiency) of revenues over
(under) expenditures (2,544,095) (2,544,095) (2,489,671) 54,424 Other Financing Sources
Transfers in 2,544,395
2,544,395
2,544,395
2,544,395
2,228,617
2,228,617
(315,778)
Total other financing sources (315,778)
Net change in fund balance
Fund Balance, Beginning
Fund Balance, Ending
300
710,824
711,124
300
710,824
711,124
(261,054)
710,824
449,770
(261,354)
-
$ $ $ $ (261,354)
-163-
City of Hawthorne
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
2016 Direct Placement Lease Financing Debt Service Fund For the Fiscal Year Ended June 30, 2022
Budgeted Amounts
Original Final
Actual
Amounts
Variance with
Final Budget
Revenues
Use of money and property
Total revenues
$ 400
400
$ 400
400
$ 48
48 $ (352)
(352)
Expenditures
Current:

General government
Debt service:
5,704 5,704 204 5,500
Principal retirement
Interest and fiscal charges
Total expenditures
190,500
49,930
246,134
190,500
49,930
246,134
190,500
49,930
240,634
-
-
5,500
Excess (deficiency) of revenues over
(under) expenditures (245,734) (245,734) (240,586) 5,148 Other Financing Sources
Transfers in 242,398
242,398
242,398
242,398
245,276
245,276
2,878
Total other financing sources 2,878
Net change in fund balance
Fund Balance, Beginning
Fund Balance, Ending
(3,336)
40,740
37,404
(3,336)
40,740
37,404
4,690
40,740
45,430
8,026
-
$ $ $ $ 8,026
-164-
City of Hawthorne
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
2019 Pension Obligation Bond Debt Service Fund
For the Fiscal Year Ended June 30, 2022
Budgeted Amounts
Original Final
Actual
Amounts
Variance with
Final Budget
Revenues
Charges for services
Use of money and property
Total revenues
$ 20,103 $ 20,103 $ 20,103
473
20,576
$ -
- - 473
20,103 20,103 473
Expenditures
Debt service:

Principal retirement
Interest and fiscal charges
Total expenditures
2,740,000
3,937,030
6,677,030
2,740,000
3,937,030
6,677,030
2,740,000
3,933,639
6,673,639
-
3,391
3,391
Excess (deficiency) of revenues over
(under) expenditures (6,656,927) (6,656,927) (6,653,063) 3,864 Other Financing Sources
Transfers in 7,441,853
7,441,853
7,441,853
7,441,853
6,803,143
6,803,143
(638,710)
Total other financing sources (638,710)
Net change in fund balance 784,926
(1,687,702)
(902,776)
784,926
(1,687,702)
(902,776)
150,080
(1,687,702)
(1,537,622)
(634,846)
Fund Balances (Deficit), Beginning -
Fund Balance (Deficit), Ending $ $ $ $ (634,846)
-165-
City of Hawthorne
Combining Statement of Net Position
Internal Service Funds
June 30, 2022
Equipment
Replacement
Insurance
Assets Reserve Total
Current Assets:

Cash and investments
Receivables:
$ 1,615,553 $ - $ 1,615,553
Accounts
Inventories
247
14,311
24,613 24,860
- 14,311
Net pension asset
Total current assets
552,875
2,182,986
669,337
693,950
1,222,212
2,876,936
Noncurrent assets:

Capital assets, net of accumulated depreciation
Total noncurrent assets
1,433,973
1,433,973
-
-
1,433,973
1,433,973
Total assets 3,616,959 693,950 4,310,909
Deferred Outflows of Resources
Pension related 38,840 47,022 85,862
Liabilities
Current liabilities:

Accounts payable
Accrued liabilities
Compensated absences
Claims and judgements
Capital lease
133,339
11,533
17,279
-
53,091
215,242
30,726
11,801
-
164,065
23,334
17,279
1,168,036
53,091
1,425,806
1,168,036
-
Total current liabilities 1,210,563
Noncurrent liabilities:

Compensated absences
Claims and judgements
Total noncurrent liabilities
69,118
-
69,118
- 69,118
4,672,146
4,741,263
4,672,146
4,672,146
Total liabilities 284,360
441,279
5,882,709 6,167,069
Deferred Inflows of Resources
Pension related 534,234 975,513
Net Position
Net investment in capital assets
Unrestricted
1,380,882
1,549,278
- 1,380,882
(5,675,971) (4,126,693)
Total net position (deficit) $ 2,930,160 $ (5,675,971) $ (2,745,811) -166-
City of Hawthorne
Combining Statement of Revenues, Expenses and Changes in Fund Net Position Internal Service Funds
For the Fiscal Year Ended June 30, 2022
Equipment
Replacement
Insurance
Reserve Total
Operating Revenues
Sales and service charges
Miscellaneous
$ 2,098,716
30,988
$ 6,501,445
75,000
$ 8,600,161
105,988
Total operating revenues 2,129,704 6,576,445 8,706,149
Operating Expenses
Administration and general
Materials and supplies
Contractual services
Depreciation
1,546,824
479,285
61,536
408,768
1,513
7,299,785
-
1,955,592
480,798
7,361,321
291,400 291,400
Total operating expenses
Operating income (loss)
2,379,045
(249,341)
7,710,066 10,089,111
(1,133,621) (1,382,962)
Change in net position before
transfers (249,341) (1,133,621) (1,382,962)
Transfers
Transfers in
Transfers out
Total transfers
1,610
(91,651)
(90,041)
- 1,610
(187,100)
(185,490)
(95,449)
(95,449)
Change in net position (339,382) (1,229,070) (1,568,452) Net Position
Net position (deficit), beginning 3,269,542
2,930,160
(4,446,901)
(5,675,971)
(1,177,359)
Net position (deficit), ending $ $ $ (2,745,811)
-167-
City of Hawthorne
Combining Statement of Cash Flows
Internal Service Funds
For the Fiscal Year Ended June 30, 2022
Equipment
Replacement
Insurance
Reserve Total
Cash flows from operating activities
Cash received from customers and users
Cash paid to suppliers for goods and services
Cash paid to employees for services
$ 2,141,394
(1,796,755)
(467,058)
(122,419)
$ 6,598,898
(6,246,034)
(262,735)
90,129
$ 8,740,292
(8,042,789)
(729,793)
Net cash provided (used) by operating activities (32,290) Cash flows from noncapital financing activities
Cash received from other funds
Transfer from debt service funds
Transfer to debt service funds
310,000
1,610
(91,651)
-
-
310,000
1,610
(95,449) (187,100)
Net cash (used) provided by noncapital
financing activities 219,959 (95,449) 124,510
Cash flows from capital and related financing activities Acquisition of capital assets
Payments on capital lease
(236,853)
(87,373)
(324,226)
-
-
-
(236,853)
(87,373)
Net cash used for capital and related financing activities (324,226) Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year
(226,686)
1,842,239
1,615,553
(5,320)
5,320
-
(232,006)
1,847,559
$ 1,615,553
$
$
$
$
Reconciliation of operating income (loss) to net cash
provided (used) by operating activities:

Operating income (loss) (249,341)
291,400
(1,133,621)
-
$ (1,382,962)
291,400
Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities:

Depreciation
(Increase) decrease in operating assets:

Accounts receivable
Deferred outflows of resources
Net pension asset
11,690
20,567
(581,311)
22,453
24,900
(703,763)
34,143
45,467
(1,285,074)
Increase (decrease) in operating liabilities:

Accounts payable
Accrued liabilities
(74,353)
1,657
(178,828)
355
(253,181)
2,012
Claims and judgements payable
Compensated absences
Deferred inflows of resources
Total adjustments
- 1,527,798
-
530,835
1,223,750
1,527,798
18,801
969,306
1,350,672
18,801
438,471
126,922
Net cash provided (used) by operating activities $ (122,419) $ 90,129 $ (32,290) -168-

STATISTICAL SECTION
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City of Hawthorne
Statistical Section
This section of the City’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 says about the government’s overall financial health.

CONTENTS Page
Financial Trends 170
These schedules contain trend information to help the reader understand how the City's financial performance and well being have changed over time.

Revenue Capacity 180
185
These schedules contain information to help the reader assess one of the City's most significant local revenue source, the property tax.

Debt Capacity
These schedules present information to help the reader assess the affordability of the City's current levels of outstanding debt and its ability to issue additional debt in the future.

Demographic and Economic Information 192
195
These schedules offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place.

Operating Information
These schedules contain service and infrastructure data to help the reader understand how the information in the City's financial report relates to the services the government provides and the activities it performs.

Sources: Unless otherwise noted, the information in these schedules is derived from the annual comprehensive financial reports for the relevant year.
-169-
City of Hawthorne
Net Position by Component
Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Year
2013 2014 2015 2016
Governmental Activities:

Net investment in capital assets
Restricted for:
$ 47,629,536 $ 88,248,555 $ 98,764,480 $ 98,816,219
Public safety 238,528
23,633,197
-
154,050
24,107,637
-
205,942
6,983,229
-
293,845
3,211,422
-
Community development
Parks and recreation
Public works
Capital improvements
Debt service
- - - 5,821,832
4,428,834
1,989,372
(104,694,912)
9,866,612
2,633,641
1,765,455
37,773,141
3,459,998
1,746,659
2,718,192
4,028,388
1,751,788
(100,463,431)
11,270,396
Unrestricted
Total governmental activities net position $ 113,673,498 $ 120,435,091 $ $ Business-type activities:

Net investment in capital assets
Unrestricted
Total business-type activities net position
$
$
10,495,271
334,901
10,830,172
$
$
10,883,092
1,060,109
11,943,201
$
$
10,761,597
(446,027)
10,315,570
$
$
10,443,914
770,871
11,214,785
Primary Government:

Net investment in capital assets
Restricted for:
$ 58,124,807 $ 99,131,647 $ 109,526,077 $ 109,260,133
Public safety 238,528
23,633,197
-
154,050
24,107,637
-
205,942
6,983,229
-
293,845
3,211,422
-
Community development
Parks and recreation
Public works
Capital improvements
Debt service
- - - 5,821,832
4,428,834
1,989,372
(103,924,041)
21,081,397
2,633,641
1,765,455
38,108,042
3,459,998
1,746,659
3,778,301
4,028,388
1,751,788
(100,909,458)
21,585,966
Unrestricted
Total primary government net position $ 124,503,670 $ 132,378,292 $ $ Source: City of Hawthorne, Finance Department
-170-
Fiscal Year
2017 2018 2019 2020 2021 2022
$ 104,229,572 $ 105,088,517 $ 113,929,703 $ 115,535,476 $ 115,055,399 $ 117,437,597 1,400,432
4,086,416
-
539,905
6,417,462
-
908,793
7,686,125
-
2,132,992
7,489,182
221,702
1,220,865
7,628,820
523,567
1,441,602
7,937,659
439,384
6,174,648
4,243,801
1,776,572
(114,897,815)
7,013,626
6,772,717
4,974,337
1,785,449
(199,077,160)
(73,498,773)
7,328,057
3,787,315
2,287,599
(195,983,739)
(60,056,147)
12,391,232
4,273,286
2,443,670
(196,188,925)
14,519,981
4,466,496
2,483,866
(196,644,055)
16,267,086
4,906,446
2,242,510
(122,568,622)
$ $ $ $ (51,701,385) $ (50,745,061) $ 28,103,662
$
$
10,034,549
1,479,009
11,513,558
$
$
9,657,296
863,905
10,521,201
$
$
9,269,159
994,105
10,263,264
$
$
8,894,639
4,414,574
13,309,213
$
$
8,638,581
5,036,958
13,675,539
$
$
11,008,202
4,953,411
15,961,613
$ 114,264,121 $ 114,745,813 $ 123,198,862 $ 124,430,115 $ 123,693,980 $ 128,445,799 1,400,432
4,086,416
-
539,905
6,417,462
-
908,793
7,686,125
-
2,132,992
7,489,182
221,702
1,220,865
7,628,820
523,567
1,441,602
7,937,659
439,384
6,174,648
4,243,801
1,776,572
(113,418,806)
18,527,184
6,772,717
4,974,337
1,785,449
(198,213,255)
(62,977,572)
7,328,057
3,787,315
2,287,599
(194,989,634)
(49,792,883)
12,391,232
4,273,286
2,443,670
(191,774,351)
14,519,981
4,466,496
2,483,866
(191,607,097)
16,267,086
4,906,446
2,242,510
(117,615,211)
$ $ $ $ (38,392,172) $ (37,069,522) $ 44,065,275
-171-
City of Hawthorne
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Year
2013 2014 2015 2016
Expenses:

Governmental Activities:

General government
Public safety
Community development
Parks and recreation
Public works
$ 7,750,941
41,129,544
20,364,753
1,687,789
13,134,894
2,297,756
86,365,677
$ 7,768,606
43,840,245
14,003,502
2,019,805
14,077,746
2,189,013
83,898,917
$ 9,677,945
48,115,574
15,380,435
2,097,720
14,921,503
2,084,801
92,277,978
$ 9,959,013
47,961,278
11,948,791
3,539,851
10,020,953
2,862,959
86,292,845
Interest on long-term debt
Total governmental activities expenses
Business-type activities:

Airport
Sewer and storm drain
Total business-type activities expenses
981,673
881,843
1,863,516
901,405
1,126,983
2,028,388
949,809
1,581,953
2,531,762
931,989
838,433
1,770,422
Total primary government expenses 88,229,193 85,927,305 94,809,740 88,063,267 Program Revenues:

Governmental Activities:

General government (1)
Public safety
Community development (1)
Parks and recreation
7,388,347
5,273,480
17,592,931
787,003
10,358,083
6,310,867
19,140,595
801,753
9,966,590
5,595,120
21,395,006
785,977
11,770,484
9,250,179
7,923,370
663,082
Public works
Total governmental activities program revenues
8,115,365
39,157,126
6,982,951
43,594,249
7,104,305
44,846,998
4,682,406
34,289,521
Business-type activities:

Airport
Sewer and storm drain
977,941
1,634,149
2,612,090
1,456,803
1,684,614
3,141,417
919,129
1,648,704
2,567,833
860,162
1,459,572
Total business-type activities program revenues 2,319,734 Total primary government program revenues 41,769,216 46,735,666 47,414,831 36,609,255 Net (expenses) revenues:

Governmental activities
Business-type activities
(47,208,551)
748,574
(40,304,668)
1,113,029
(47,430,980)
36,071
(52,003,324)
549,312
Total primary government net (expenses)/revenues
Notes:
(46,459,977) (39,191,639) (47,394,909) (51,454,012)
(1) Beginning in fiscal year 2009-2010, all costs relating to the construction inspection function are reported under community development instead of highways, streets, and parks. Also, the storm water management function is under general government instead of highways, streets, and parks.

Source: City of Hawthorne, Finance Department
-172-
Fiscal Year
2017 2018 2019 2020 2021 2022
$ 11,094,220
54,633,003
12,849,025
3,827,432
$ 14,701,855 $ 14,732,354 $ 11,217,900 $ 13,076,135 $ 10,495,723 54,381,340 8,867,389
15,498,320
4,521,785
54,981,502
14,471,029
4,365,183
59,715,116
15,845,559
3,832,039
64,422,256
16,134,233
3,588,888
14,158,033
3,234,730
12,051,189
918,037
10,335,197
1,348,742
13,563,064
1,003,660
10,587,442
4,903,784
11,234,733
4,882,047
11,318,323
4,699,446
95,372,906 100,787,239 103,116,792 106,101,840 113,338,292 52,773,644 1,131,440
933,015
2,064,455
1,230,891
2,342,547
3,573,438
1,745,924
884,469
2,630,393
1,603,543
709,837
2,313,380
1,155,254
706,086
1,861,340
808,620
642,025
1,450,645
97,437,361 104,360,677 105,747,185 108,415,220 115,199,632 54,224,289 11,224,984
5,460,890
12,460,275
642,713
11,003,976
5,673,185
13,194,352
709,246
11,202,311
6,089,974
14,155,829
637,610
10,219,365
5,006,103
16,745,927
445,260
10,261,589
5,999,374
17,223,580
307,385
12,193,870
6,732,123
17,614,291
562,525
9,318,132
39,106,994
6,181,485
36,762,244
13,830,239
45,915,963
12,524,253
44,940,908
6,908,300
40,700,228
9,131,706
46,234,515
908,988
1,448,366
2,357,354
1,009,726
1,559,160
2,568,886
882,878
1,482,507
2,365,385
1,497,105
1,335,231
2,832,336
1,023,571
1,399,410
2,422,981
1,993,209
1,490,743
3,483,952
41,464,348 39,331,130 48,281,348 47,773,244 43,123,209 49,718,467 (56,265,912)
292,899
(64,024,995)
(1,004,552)
(57,200,829)
(265,008)
(61,160,932)
518,956
(72,638,064)
561,641
(6,539,129)
2,033,307
(55,973,013) (65,029,547) (57,465,837) (60,641,976) (72,076,423) (4,505,822) -173-
City of Hawthorne
Changes in Net Position, (continued)
Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Year
2013 2014 2015 2016
General Revenues and Other Changes in Net
Positions:

Governmental activities:

Taxes:

Property taxes
Sales taxes
Transient occupancy taxes
Franchise taxes
Business license taxes
Utility users tax
$ 15,011,710
12,928,878
2,680,392
1,767,044
4,901,207
6,737,474
249,778
38,244
$ 13,767,847
13,103,430
2,765,262
1,801,311
4,962,181
6,954,818
21,086
$ 15,582,864
14,521,823
3,357,279
1,833,145
4,947,687
6,842,540
115,589
159,031
-
$ 14,693,230
14,721,975
4,806,401
1,809,159
6,419,659
6,667,384
Other taxes -
Miscellaneous revenue
Gain on sale of assets
Use of money and proprety
Transfers in/(out)
176,333
-
13,993
1,060,219
- -
25,340 9,017
-
69,833
- - -
Total governmental activities 44,340,067 43,566,261 47,368,975 50,247,860 Business-type activities:

Miscellaneous
Use of money and property
Transfers in/(out)
-
-
-
-
-
-
-
-
-
-
23,963
-
-
Total business-type activities - 23,963
Total primary government 44,340,067 43,566,261 47,368,975 50,271,823 Change in Net Position:

Governmental activities
Business-type activities
(2,868,484)
748,574
3,261,593
1,113,029
(62,005)
36,071
(1,755,464)
573,275
Total primary government $ (2,119,910) $ 4,374,622 $ (25,934) $ (1,182,189) Source: City of Hawthorne, Finance Department
-174-
Fiscal Year
2017 2018 2019 2020 2021 2022
$ 17,000,228 $ 17,212,040 $ 18,297,687
28,408,757
5,970,823
2,171,334
6,921,485
6,358,691
-
$ 19,494,231
28,627,941
5,548,885
1,980,644
7,851,079
6,476,401
-
$ 20,793,917
32,184,097
4,186,432
2,277,912
6,293,567
6,837,852
-
$ 21,799,982
38,271,401
6,071,367
2,536,844
9,456,866
7,459,343
-
16,856,609
5,200,111
1,724,565
5,615,982
6,613,873
-
18,498,130
5,412,476
1,765,717
6,314,957
6,726,815
-
1,649,614
-
11,507,607
-
2,104,588
-
850,007
177,628
620,764
-
749,456
-
40,189
-
54,701,171
100,699
-
67,538,441
410,090
-
70,643,455
999,325
(2,490,447)
69,515,694
188,680
211,167
73,594,388
(1,166,634)
209,227
85,387,852
5,874
-
-
12,195 7,071
-
-
36,546
-
2,490,447
2,526,993
15,852
-
(211,167)
(195,315)
461,994
-
(209,227)
252,767
-
-
5,874 12,195 7,071
54,707,045 67,550,636 70,650,526 72,042,687 73,399,073 85,640,619 (1,564,741)
298,773
3,513,446
(992,357)
13,442,626
(257,937)
8,354,762
3,045,949
956,324
366,326
78,848,723
2,286,074
$ (1,265,968) $ 2,521,089 $ 13,184,689 $ 11,400,711 $ 1,322,650 $ 81,134,797 -175-
City of Hawthorne
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
Fiscal Year
2013 2014 2015 2016
General Fund:

GASB 54:

Nonspendable
Restricted
Unassigned
$ 72,607
-
17,081,233
17,153,840
$ 21,186 $ 4,223,582
-
11,846,918
16,070,500
$ 3,217,524
-
10,763,286
13,980,810
-
17,825,388
Total General Fund 17,846,574
All Other Governmental Funds:

GASB 54:

Nonspendable
Restricted
Unassigned
335,181
15,412,581
(1,874,224)
13,873,538
12,414,769
(1,463,709.00)
10,951,060
13,462,455
(1,973,549)
11,488,906
15,071,577
(3,391,518)
Total all other governmental funds 11,680,059
Total governmental funds $ 28,104,900 $ 29,335,480 $ 27,750,559 $ 27,854,348 Source: City of Hawthorne, Finance Department
-176-
Fiscal Year
2017 2018 2019 2020 2021 2022
$ 53,986 $ 49,432 $ 52,198 $ 80,632 $ 1,900,896
36,529
57,837,119
59,774,544
$ 69,652
- - - - 36,529
78,747,034
78,853,215
16,615,228
16,669,214
26,066,029
26,115,461
37,202,338
37,254,536
44,563,186
44,643,818
-
17,790,488
(625,215)
-
21,191,173
(911,566)
- 20,318
28,952,064
(2,123,366)
26,849,016
- -
21,997,889
(760,486)
21,237,403
30,807,066
(2,427,492)
28,379,574
33,192,169
(3,259,095)
17,165,273 20,279,607 29,933,074
$ 33,834,487 $ 46,395,068 $ 58,491,939 $ 71,492,834 $ 88,154,118 $ 108,786,289 -177-
City of Hawthorne
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
Fiscal Year
2013 2014 2015 2016
Revenues:

Taxes $ 49,001,010
2,696,368
23,735,974
1,981,251
2,978,968
447,973
1,810,060
3,777,822
86,429,426
$ 48,842,096
2,988,845
18,331,224
2,241,294
3,424,944
373,828
301,155
6,605,953
83,109,339
$ 52,613,639
3,890,427
26,682,989
2,170,626
3,527,228
446,438
365,361
6,793,843
96,490,551
$ 54,107,964
2,291,930
16,469,698
2,500,544
3,934,011
471,056
188,206
5,279,485
85,242,894
Licenses and permits
Intergovernmental
Charges for services
Fines and forfeitures
Use of money and property
Contributions
Miscellaneous
Total Revenues
Expenditures:

Current:

General government (1)
Public safety
Community development (1)
Parks and recreation
Public works
5,780,090
39,296,404
19,665,363
1,506,952
10,275,219
924,301
6,187,963
41,134,364
13,209,207
1,801,650
11,336,465
2,418,275
7,299,439
42,841,325
14,241,571
1,703,966
11,755,008
13,571,753
9,517,701
43,038,523
12,590,103
3,467,866
8,202,451
Capital outlay 2,438,251
Debt service:

Principal retirement
Interest and fiscal charges
Bond issuance costs
Total expenditures
3,372,594
2,454,056
-
3,501,557
2,289,278
-
3,741,924
2,224,946
-
4,010,186
2,658,786
941,625
83,274,979 81,878,759 97,379,932 86,865,492
Excess/(deficiency) of Revenues Over Expenditures 3,154,447 1,230,580 (889,381) (1,622,598) Other financing sources (uses):

Issuance of debt
Payment to bond escrow agent
Proceeds from disposal of assets
Capital Lease proceeds
Transfers in
-
-
-
-
-
-
-
-
-
31,803,741
(29,910,984)
-
-
3,927,563
(3,927,563)
-
-
3,995,825
(3,995,825)
-
- -
4,034,710
(4,730,250)
(695,540)
5,894,967
(5,894,967)
1,892,757
Transfers out
Total other financing sources (uses)
Net Change in Fund Balances $ 3,154,447

7.97%
$ 1,230,580

7.97%
$ (1,584,921)

6.25%
$ 270,159
Debt service as a percentage of noncapital expenditures 7.89% Notes:
(1) Beginning in fiscal year 2009-2010, all costs relating to the construction inspection function are reported under community development instead of highways, streets, and parks. Also, the storm water management function is under general government instead of highways, streets, and parks.

Source: City of Hawthorne, Finance Department
-178-
Fiscal Year
2017 2018 2019 2020 2021 2022
$ 58,115,240
2,535,471
22,245,586
2,412,936
5,850,331
530,465
873,620
5,392,496
97,956,145
$ 63,954,559
3,384,070
21,283,289
2,325,798
3,101,340
580,685
888,145
12,435,535
107,953,421
$ 75,799,317
4,121,946
22,515,800
2,631,104
4,241,409
937,192
3,670,175
4,093,289
118,010,232
$ 73,088,871
3,861,839
24,208,218
2,605,973
4,621,263
1,420,058
4,640,773
2,025,498
116,472,493
$ 76,549,888
2,268,593
25,920,897
2,465,164
2,996,112
782,986
492,799
1,782,379
113,258,818
$ 89,449,254
1,987,892
28,410,517
3,378,713
4,485,414
(686,139)
1,854,290
1,894,159
130,774,100
9,388,771
46,173,983
12,747,063
3,654,856
13,565,765
3,164,810
10,130,387
49,374,104
14,603,141
3,743,089
11,786,057
2,183,616
12,073,085
50,438,881
13,807,096
3,767,113
18,750,519
3,360,606
32,079,731
120,366,980
24,445,268
10,795,897
21,327,728
2,408,275
10,589,644
47,760,972
15,033,877
2,901,385
9,776,751
1,070,437
11,870,620
54,876,411
15,619,482
3,704,975
12,723,514
1,237,324
5,473,428
980,189
108,692
2,365,154
1,207,292
-
2,414,644
1,142,617
-
4,718,303
3,694,549
1,112,189
4,861,023
4,995,712
-
5,638,129
4,866,191
-
95,257,557 95,392,840 105,754,561 220,948,920 96,989,801 110,536,646 2,698,588 12,560,581 12,255,671 (104,476,427) 16,269,017 20,237,454 2,730,900
-
-
-
-
-
-
-
121,865,000
-
-
-
-
-
-
-
-
-
- 8,602
-
8,423,404
(12,819,684)
117,477,322
550,651
2,759,313
(2,759,313)
3,281,551
-
2,804,428
(2,804,428)
-
-
2,950,318
(3,109,118)
(158,800)
11,510,975
(11,118,708)
392,267
12,375,331
(11,980,614)
394,717
$ 5,980,139

7.34%
$ 12,560,581

4.05%
$ 12,096,871

4.40%
$ 13,000,895

3.89%
$ 16,661,284

10.53%
$ 20,632,171

10.04%
-179-
City of Hawthorne
Assessed Value and Estimated Actual Value of Taxable Property (1) Last Ten Fiscal Years
Fiscal
Year
Ended
June 30,
Taxable
Less: Exemptions Assessed Value
Direct Tax
Secured Unsecured Rate (2)
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
$ 5,576,281,164
5,778,996,631
5,975,266,047
6,360,930,083
6,761,280,688
7,149,882,995
7,532,179,160
7,971,171,054
8,394,513,934
8,771,167,546
$ 293,802,204
262,583,724
271,246,528
261,718,287
586,347,166
639,095,098
732,745,553
728,823,022
871,235,153
740,382,503
$ (39,085,229) $ 5,830,998,139 0.24470
(40,374,408)
(38,278,306)
(38,794,555)
(70,829,245)
(62,805,701)
(75,014,723)
(69,188,809)
(89,168,195)
(106,971,423)
6,001,205,947
6,208,234,269
6,583,853,815
7,276,798,609
7,726,172,392
8,189,909,990
8,630,805,267
9,176,580,892
9,404,578,626

0.09106

0.09115

0.09137

0.09174

0.09127

0.09104

0.08950

0.08648

0.08939
Notes:
(1) In 1978 the voters of the State of California passed Proposition 13 which limited property 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 increase of 2%). With few exceptions, property is only re-assessed at the time that it is sold to a new owner. At that point, the new assessed value is re-assessed at the purchase price of the property sold. The assessed valuation data shown above represents the only data currently available with respect to the actual fair value of taxable property and is subject to the limitations described above. (2) Tax Rate Area 13-115.

Source: Los Angeles County Assessor 2020/21 Combined Tax Rolls -180-
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City of Hawthorne
Direct and Overlapping Property Tax Rates (1)
Last Ten Fiscal Years
(rate per $100 of assessed value)
Fiscal Year
2013 2014 2015 2016
City basic rate 0.09484 0.09484 0.09484 0.09484
Redevelopment agency
Overlapping Rates
El Camino Community College
Hawthorne School District
Inglewood Unified School District
La Community College District
Lawndale Elementary School District
Lennox School District
Los Angeles Unified School District
Metropolitan Water District
Wiseburn School District
Wiseburn-Centinela Unified

0.01849

0.11286

0.12139

0.04875

0.04919

0.08064

0.17561

0.00350

0.09129

0.05906

0.01750

0.10797

0.15614

0.04454

0.04651

0.08118

0.14644

0.00350

0.11672

0.04369

0.01742

0.10620

0.14992

0.04017

0.04334

0.08464

0.14688

0.00350

0.13062

0.16730

0.01745

0.10176

0.12761

0.03575

0.04207

0.08456

0.12971

0.00350

0.13341

0.14481
Total Direct Rate 0.24470 0.09106 0.09115 0.09137
Notes:
(1) Tax rates are for Tax Rate Area 13-115.
(2) In 1978, California voters passed Proposition 13 which sets the property tax rate at a 1% fixed amount. This 1% is shared by all taxing agencies in which the subject property resides. In addition to the 1% fixed amount, property owners are charged taxes as a percentage of assessed property values for the payment of various voter-approved bonds.

Source: HdL Coren & Cone, Los Angeles County Assessor 2011/12-2021/22 Tax Rate Table -181-
Fiscal Year
2017 2018 2019 2020 2021 2022

0.09484 0.09484 0.00000 0.09484 0.09484 0.09484

0.02294

0.09553

0.11351

0.03596

0.04064

0.09078

0.13110

0.00350

0.10166

0.16592

0.02120

0.08818

0.11675

0.04599

0.06143

0.16337

0.12219

0.00350

0.11222

0.13062

0.02223

0.08395

0.13079

0.04621

0.06385

0.16522

0.12323

0.00350

0.10532

0.17572

0.02155

0.11025

0.09832

0.02717

0.06343

0.17202

0.12552

0.00350

0.11111

0.15734

0.02362

0.10069

0.09294

0.04016

0.06246

0.17062

0.13993

0.00350

0.08507

0.18371

0.02264

0.09933

0.14381

0.04376

0.05494

0.16888

0.11323

0.00350

0.08631

0.17242

0.09174 0.09127 0.09104 0.08950 0.08648 0.08939
-182-
City of Hawthorne
Principal Property Taxpayers
Current Year and Nine Years Ago
2021/2022
Percentage
2012/2013
Percentage
of Total City
Taxable
Assessed
Value
of Total City
Taxable
Assessed
Value
Taxable
Assessed Value
(1)
Taxable
Assessed Value
Taxpayer Rank (1) Rank
6 SPACE EXPLORATION TECHNOLOGIES CORP

DCT CARGO LLC
$ 444,469,347
87,649,735
85,240,067
72,265,597
63,840,925
62,163,388
58,098,154
55,569,800
53,074,210
47,057,888
1 2
3 4
5 6
7 8
9 4.73 % %

0.93 0.91

0.77 0.68

0.66 0.62

0.59 0.56

0.50 $ 42,648,741 0.73

HOLSTRON DC ASSETS

MOGUL HOSPITALITY PARTNERS HAWTHORNE LLC

BSP ZELMAN HAWTHORNE LLC

COSTCO WHOLESALE CORPORATION

EQUITY HOLDINGS LLC
15000 AVIATION VENTURES LLC

RT ROCKET ROAD LLC
41,107,223
54,747,088
7 1

0.70 0.94
FALCON LANDING 10

RS HAWTHORNE LLC

HEARTHSTONE MULTI ASSET ENTITY

M & A GABAEE
49,809,886
46,864,783
44,025,843
42,777,897
40,469,631
38,508,073
32,519,987
2 3
4 5
8 0.85

0.80 0.76

0.73 0.69

0.66 0.56

WILLIAM LYON HOMES

TRIUMPH AEROSTRUCTURES VOUGHT AIRCRAFT

OCEANGATE PROPERTY LLC

EDWARD AND MARILYN JENKINS TRUST
9 10
Total $ 1,029,429,111 10.95 % $ 433,479,152 7.42 %
Note:

The amounts shown above include assessed value date for both the City and the Successor Agency (former Redevelopment Agency).

Source: GdL Coren & Core, Los Angeles County Assessor 2020/2021 Combined Tax Rolls -183-
City of Hawthorne
Property Tax Levies and Collections
Last Ten Fiscal Years
Fiscal
Year
Ended
June 30,
Collected within the Fiscal
Year of the Levy
Percentage
of Levy
Taxes Levied
for the Fiscal
Year
Collections in
Subsequent
Years
Total Collections to Date
Amount Amount Percentage
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
$ 5,683,467
5,860,446
6,088,145
6,479,711
7,170,731
7,600,938
8,045,958
8,468,355
8,979,687
9,198,418
$ 6,633,338
5,115,351
5,513,166
5,109,479
6,339,236
6,731,784
7,121,892
8,048,688
8,658,320
9,083,898
116.71 $ 1,395
14,415
-
$ 6,634,733
5,129,766
5,513,166
5,109,479
6,339,236
7,081,786
7,253,967
8,264,855
8,888,976
9,704,865
116.74

87.53 90.56

78.85 88.40

93.17 90.16

97.60 98.99
105.51

87.29 90.56

78.85 88.40

88.57 88.52

95.04 96.42

98.76 -
-
350,002
132,075
216,167
230,657
620,967
Source: Los Angeles County Auditor and Controller Office. -184-
City of Hawthorne
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
Governmental Activities (1)
General
Obligation
Bonds
Percentage
of Personal
Income
Fiscal
Year
Revenue
Bonds
Notes
Payable
Total Primary
Government
Per
Leases Capita
52,460
Loans Payable
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
$ -
-
-
$ 9,057,452
8,454,052
7,828,114
7,174,930
4,353,127
3,178,249
2,595,505
1,987,302
1,354,129
691,500
$ -
-
-
$ $ 4,303,708
3,942,366
3,580,698
3,218,691
2,856,328
2,493,585
2,130,448
1,766,893
1,757,898
1,400,000
$ 13,413,620
12,434,065
11,431,031
42,085,171
40,312,544
37,680,421
35,407,323
152,180,550
146,934,428
140,985,646

0.008

0.007

0.023

0.022

0.019

0.017

0.068
N/A
155
143
130
480
454
429
407
1,749
N/A
1,624
37,647
22,219
6,778
482,893
378,119
682,255
471,793
250,142
97,840
31,684,772
30,032,646
29,211,468
27,752,015
145,887,562
141,688,109
137,102,656
-
2,587,550
2,419,000
2,247,100
2,067,000
1,884,150
1,693,650 0.064
Note:
(1) General bonded debt is debt payable with governmental fund resources. Details regarding the City's outstanding debt can be found in the notes to basic financial statements.

Source: City of Hawthorne, Finance Department
-185-
City of Hawthorne
Ratios of General Bonded Debt Outstanding
Last Ten Fiscal Years
Total Gross
General
Obligation
Bonds
Amounts
Restricted for
Principal
Total Net
General
Obligation
Bonds
Percent of
Assessed
Value (2)
Fiscal
Year
Revenue Bonds
Repayments (1) Total Per Capita
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
$ -
-
-
$ -
-
-
$ -
-
-
$ 9,057,452
8,454,052
7,828,114
7,174,930
4,353,127
3,178,249
2,618,249
1,987,303
1,354,129
691,500
$ 9,057,452
8,454,052
7,828,114
36,870,330
32,609,201
30,604,268
28,082,664
25,896,271
140,558,372
135,551,646

0.16%

0.14 0.13

0.59 0.47

0.42 0.37

1.71 1.56

1.47 $ 106
98 90
419
372
345
345
1,702
1,616
1,588
31,684,772
30,032,646
29,211,468
27,752,014
26,352,538
141,688,109
137,102,656
1,989,372
1,776,572
1,785,449
2,287,599
2,443,570
2,483,866
2,242,510
29,695,400
28,256,074
27,426,019
25,464,415
23,908,968
139,204,243
134,860,146
Notes:
(1) The revenue bonds are secured by lease payments to be made by the City (2) Assessed value has been used because actual value of taxable property is not readily available in the State of California.

Source: City of Hawthorne, Finance Department
-186-
City of Hawthorne
Legal Debt Margin Information
Last Ten Fiscal Years
Fiscal Year
2013 2014 2015
$ 6,208,234,269
25%
2016
$ 6,583,853,815
25%
Total assessed valuation
Conversion percentage
Adjusted assessed valuation
Debt limit percentage
Debt limit
$ 5,830,998,139
25%
$ 6,001,205,947
25%
1,457,749,535
15%
1,500,301,487
15%
1,552,058,567
15%
1,645,963,454
15%
218,662,430 225,045,223 232,808,785 246,894,518
Total net debt applicable to limit:

General obligation bonds - - - -
Legal debt margin $ 218,662,430 $ 225,045,223 $ 232,808,785 $ 246,894,518 Total debt applicable to the limit
as a percentage of debt limit 0.000% 0.000% 0.000% 0.000% Note:

The Government Code of the State of California provides for a legal debt limit of 15% of gross assessed valuation.

However, this provision was enacted when assessed valuation was based upon 25% of fair value. Effective with the 1981-82 fiscal year, each parcel is now assessed at 100% of fair value (as of the most recent change in ownership for that parcel). The computations shown above reflect a conversion of assessed valuation data for each fiscal year from the current full valuation perspective to the 25% level that was in effect at the time that the legal debt margin was enacted by the State of California for local governments located within the State.

Source: City Finance Department
County of Los Angeles Tax Assessor's Office
-187-
Fiscal Year
2017
$ 7,276,798,609
25%
2018
$ 7,726,172,392
25%
2019 2020 2021 2022
$ 8,189,909,990
25%
$ 8,630,805,267
25%
$ 9,176,580,892
25%
$ 9,404,578,626
25%
1,819,199,652
15%
1,931,543,098
15%
2,047,477,498
15%
2,157,701,317
15%
2,294,145,223
15%
2,351,144,657
15%
272,879,948 289,731,465 307,121,625 323,655,198 344,121,783 352,671,698 - - - - - -
$ 272,879,948 $ 289,731,465 $ 307,121,625 $ 323,655,198 $ 344,121,783 $ 352,671,698

0.000% 0.000% 0.000% 0.000% 0.000% 0.000%
-188-
City of Hawthorne
Pledged-Revenue Coverage
Last Ten Fiscal Years
Revenue Bonds (1)
Debt Service (2)
Fiscal Year Revenue
1,000,848
Principal Interest
417,157
Coverage
2013 1.01
2014
2015
2016
2017
2018
2019
2020
2021
2022
$ $ 574,939 $
998,192
999,499
1,249,488
3,744,990
976,241
897,558
973,932
1,003,000
19,698
603,400
625,939
653,184
823,428
730,152
754,644
608,203
633,172
662,628
403,110
387,708
370,536
409,710
187,849
199,655
110,698
84,758

0.99 0.99

1.22 3.04

1.06 0.94

1.35 1.40
57,754 0.03
Notes:
(1) Revenue bonds are secured by lease payments to be made by the City (2) Debt service shown is annual debt service.

Source: City of Hawthorne, Finance Department
-189-
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City of Hawthorne
Direct and Overlapping Debt
As of June 30, 2022
Estimated
Share of
Overlapping
Percentage
Applicable
Gross Bonded
Debt Balance
Direct Debt

HAWTHORNE RICOH COPIER
HAWTHORNE 2016 COP
100.000%
100.000%
100.000%
100.000%
100.000%
100.000%
100.000%
$ 44,748
22,907,656
1,693,650
114,195,000
53,092
$ 44,748
22,907,656
1,693,650
114,195,000
53,092
HAWTHORNE 2016 DIRECT PLACEMENT LEASE FINANCING
HAWTHORNE 2019 PENSION OBLIGATION BONDS

HAWTHORNE RADIO LEASE
HAWTHORNE REVENUE BONDS 2011 SERIES A
HAWTHORNE SECTION 108 LOAN PAYABLE
691,500
1,400,000
691,500
1,400,000
Total Direct Debt 140,985,646
Overlapping Debt

METROPOLITAN WATER DISTRICT
HAWTHORNE SD DS 1997 SERIES B
HAWTHORNE SD DS 1997 SERIES C
HAWTHORNE SD DS 2004 2005 SERIES A
HAWTHORNE SD DS 2004 SERIES 2005B
HAWTHORNE SD DS 2008,2009 SERIES A
HAWTHORNE SD DS 2008 2012 SERIES B
HAWTHORNE SD DS REF BONDS 2004 2015 SERIES A
HAWTHORNE SD DS 2018 SERIES A

56.900%

96.993%

19.973%

7.755%
9,835,780
171,329
1,907,421
204,276
55,971
166,178
1,850,074
198,134
1,727,427
7,218,706
9,701,770
5,320,000
34,140,000
2,810,000
4,885,000
8,855,000
5,020,000
9,205,000
7,140,000
5,870,000
447,784
1,675,491
7,001,673
9,410,083
5,160,052
33,113,569
2,725,516
4,738,131
1,768,586
1,002,632
1,838,491
1,426,054
1,172,400
34,726
HAWTHORNE SD DS 2018 SERIES B
HAWTHORNE SD DS REF BONDS 2019
LAWNDALE ELEMENTARY SD DS 2016 SERIES A 2017
LAWNDALE ELEMENTARY SD DS 2017 REF BOND
LAWNDALE ELEMENTARY SD DS 2016 SERIES B 2018
LAWNDALE ELEMENTARY SD DS 2020 REF BOND
LAWNDALE ELEMENTARY SD DS 2016 SERIES C 2020
LENNOX SD DS 1998 SERIES A
LENNOX SD DS 1998 SERIES 2002B 7.755% 925,536 71,777
LENNOX SD DS 1998 SERIES 2012A QSCB
LENNOX SD DS 2007 SERIES 2016

7.755%

7.755%
2,695,000
381,056
209,001
29,551
LENNOX SD DS 2016 REF BONDS
LENNOX SD DS 2016 SERIES 2017
LENNOX SD DS 2007 SERIES 2020

7.755%

7.755%
1,388,746
1,360,000
29,671,628
8,825,000
20,700,000
15,724,364
461,455
107,699
105,470
2,301,079
5,052,790
11,851,870
9,003,049
264,208
1,488,641
1,554,484
858,831
15,338,724
78,376,930
18,428,495
19,282,169
42,014,093
15,370,215
9,051,947
424,010
5,784,002
3,855,674
2,905,906
3,026,304
2,601,312
3,926,016
1,742
CENTINELA-WISEBURN UNION HSD 2002 REF BOND A
CENTINELA-WISEBURN UNION HSD 2004 REF BOND A
CENTINELA-WISEBURN UNION HSD 2008 SERIES A
CENTINELA-WISEBURN UNION HSD 2010, 12 SERIES B
CENTINELA-WISEBURN UNION HSD 2008 2013 SERIES B
CENTINELA-WISEBURN UNION HSD DS 2008 2014 SERIES C
CENTINELA-WISEBURN UNION HSD 2008, 2014 SERIES D
CENTINELA-WISEBURN UNION HSD 2016 REF BOND
CENTINELA-WISEBURN UNION HSD 2016 REF BOND C
CENTINELA-WISEBURN SFID DS 2016 2017A
CENTINELA-WISEBURN SFID DS 2016 2018B
CENTINELA-WISEBURN SFID DS 2020A
CENTINELA-WISEBURN UNION USD 2020 REF BOND
EL CAMINO CCD DS 2002 SERIES 2012C
EL CAMINO CCD DS 2012 REF BONDS
EL CAMINO CCD DS 2012 SERIES 2016 A
EL CAMINO CCD DS 2016 REF BONDS

57.255%

35.058%

57.255%

65.430%

0.082%
2,600,000
2,715,000
1,500,000
26,790,000
136,890,000
52,565,000
55,000,000
119,840,000
26,845,000
138,337,927
6,480,000
88,395,000
58,925,000
44,410,000
46,250,000
39,755,000
60,000,000
2,115,000
EL CAMINO CCD DS 2012 SERIES 2018B
EL CAMINO CCD DS 2012 SERIES 2020C
EL CAMINO CCD DS 2020 REF BONDS
EL CAMINO CCD DS 2012 SERIES 2021D
LA CCD DS 2003 TAXABLE SERIES 2004B
Notes:
[1] This fund is a portion of a larger agency and is responsible for debt in areas outside the city Source: HdL Coren & Core, Los Angeles County Assessor 2020/2021 Combined Tax Rolls -190-
City of Hawthorne
Direct and Overlapping Debt, (continued)
As of June 30, 2022
Estimated
Share of
Overlapping
Percentage
Applicable
Gross Bonded
DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT: Debt Balance Overlapping Debt (Continued)
LA CCD DS 2001 TAXABLE SERIES 2004A
LA CCD DS 2008, 2009 TAXABLE SER B
LA CCD DS 2008, 2010 TAX SERIES D
LA CCD DS 2008, 2010 TAX SER E (BABS)
LA CCD DS 2013
LA CCD DS 2013 REF BONDS
LA CCD DS 2008 SERIES G
LA CCD DS 2015 REF SERIES A
LA CCD DS 2015 REF SERIES B
LA CCD DS 2015 REF SERIES C
LA CCD DS 2008 SERIES I
LA CCD DS 2008 SERIES J
LA CCD DS 2016 REF BONDS
LA CCD DS 2020 REF BONDS
LA CCD DS 2016 SERIES C
INGLEWOOD USD DS 2007 REF BONDS
INGLEWOOD USD DS 2012 SERIES A
INGLEWOOD USD DS 2016 REF BONDS
INGLEWOOD USD DS 2012 SERIES B
INGLEWOOD USD DS 2012 SERIES C

0.082%

0.038%

0.101%

15.128%

15.13%
31,555,000
75,000,000
125,000,000
900,000,000
13,000,000
8,380,000
30,765,000
144,260,000
14,965,000
178,565,000
184,220,000
173,020,000
239,880,000
1,750,350,000
275,440,000
18,720,000
1,200,000
29,000,000
22,970,000
30,000,000
26,545,000
75,000,000
200,000,000
207,560,000
363,005,000
806,795,000
477,630,000
772,955,000
115,480,000
60,710,000
27,435,000
17,090,000
20,480,000
100,155,000
713,850,000
95,430,000
164,550,000
359,570,000
238,230,000
498,240,000
109,935,000
921,240,000
108,220,000
1,007,820,000
135,105,000
299,825,000
81,115,000
29,955,000
151,450,000
603,245,000
108,865,000
108,375,000
74,215,000
893,005,000
673,280,000
254,209
25,995
61,784
102,973
741,409
10,709
6,903
25,344
118,840
12,328
147,100
151,758
142,532
197,610
1,441,917
226,904
7,140
458
11,061
8,761
11,442
INGLEWOOD USD DS 2021 REF BONDS
INGLEWOOD USD DS 2020 SERIES A
LOS ANGELES UNIF DS 2002 SERIES E (BABS)
LOS ANGELES UNIF DS 2005 SERIES H
10,124
28,605
201,394
209,006
365,535
812,417
480,959
778,342
116,285
61,133
27,626
17,209
20,623
100,853
718,825
96,095
165,697
362,076
239,890
501,712
110,701
927,660
108,974
1,014,843
136,047
301,914
81,680

LOS ANGELES UNIF MEASURE R SERIES KRY BABS
LOS ANGELES UNIF MEASURE Y 2009 SERIES KRY BABS
LOS ANGELES UNIF MEASURE R 2010 SERIES RY BABS
LOS ANGELES UNIF MEASURE Y 2010 SERIES RY BABS
LOS ANGELES UNIF DS 2005 2010 SERIES J-1 QSCBS
LOS ANGELES UNIF DS 2005 2010 SERIES J-2 QSCBS
LOS ANGELES UNIF DS 2012 REFUNDING BOND SERIES A
LOS ANGELES UNIF DS 2014 REF BOND SERIES A
LOS ANGELES UNIF DS 2014 REF BOND SERIES B
LOS ANGELES UNIF DS 2014 REF BOND SERIES C
LOS ANGELES UNIF DS 2014 REF BOND SERIES D
LOS ANGELES UNIF DS 2015 REF BONDS SERIES A
LOS ANGELES UNIF DS 2008 SERIES A 2016
LOS ANGELES UNIF DS 2016 REF BONDS SERIES A
LOS ANGELES UNIF DS 2016 REF BONDS SERIES B
LOS ANGELES UNIF DS 2017 REF BONDS SER A PROP BB
LOS ANGELES UNIF DS 2017 REF BONDS SER A MEAS K
LOS ANGELES UNIF DS 2005 SERIES M 1 2018
LOS ANGELES UNIF DS 2008 SERIES B 1 2018
LOS ANGELES UNIF DS 2019 REF 2002 SER D MEAS K
LOS ANGELES UNIF DS 2019 REF 2004 SER I MEAS R
LOS ANGELES UNIF DS 2019 REF 2005 SER F MEAS Y
LOS ANGELES UNIF MEASURE R 2020 SERIES RYQ
LOS ANGELES UNIF MEASURE Y 2020 SERIES RYQ
LOS ANGELES UNIF MEASURE Q 2020 SERIES RYQ
LOS ANGELES UNIF DS MEASURE Q SER C 2020
LOS ANGELES UNIF 2020 REF A MEAS K
LOS ANGELES UNIF 2020 REF A MEAS R
LOS ANGELES UNIF 2020 REF A MEAS Y
LOS ANGELES UNIF 2021 REF A PROP BB
LOS ANGELES UNIF 2021 REF A MEAS Q
WISEBURN USD DS 1997 SERIES A
30,164
152,505
607,449
109,624
109,130
74,732
899,228
677,972
38,456
111,231
3,704,066
49,838
4,380,998
1,917,040
656,541
711,001
5,099,542
WISEBURN USD DS 1997 SERIES 1999A
WISEBURN USD DS 2000 SERIES 2001
735,280
24,485,351
329,452
28,960,135
12,672,394
4,340,000
WISEBURN USD SD DS 2010 2010 SERIES A
WISEBURN USD DS 2010 2012 SERIES C
WISEBURN USD SD DS 2010 2011 SERIES B
WISEBURN USD DS 2010 2013 SERIES D
WISEBURN USD DS REF BONDS 2015 SERIES A
WISEBURN USD DS REF BONDS 2016 SERIES A
4,700,000
33,710,000
Total overlapping debt $ 16,108,842,026 357,402,460
Total Direct and Overlapping Debt $498,388,106
2021/22 Assesed Valuation: $7,106,565,152 After Deducting $2,201,414,509 Incremental Value.

Debt To Assessed Valuation Ratios: Direct Debt
Overlapping Debt
Total Debt

2.04%

5.18%

7.22%
Notes:
[1] This fund is a portion of a larger agency and is responsible for debt in areas outside the city Source: HDL Coren & Core, Los Angeles County Assessor 2020/2021 Combined Tax Rolls [2] Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the city.

The percentage of overlapping debt applicable is estimated by using taxable assessed values. Applicable percentages were estimated by determining the portion of another governmental unit’s taxable assessed value that is within the city’s boundaries and dividing it by each unit’s total taxable assessed value. -191-
City of Hawthorne
Demographic and Economic Statistics
Last Ten Calendar Years
Population
Percentage
Change
Per Capita
Personal
Income
Fiscal
Year
Square
Miles
Personal Income
(In Thousands)
Unemployment
Population Rate
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021

6.08 6.08

6.08 6.08
85,474
86,644
86,685
88,003
87,662
88,772
87,854
86,903
86,999
86,841

0.50%

1.37%

0.05%

1.52%
-0.39%

1.27%
-1.03%
-1.08%

0.11%
-0.18%
$ 1,674,179
1,710,093
1,715,583
1,755,987
1,801,255
1,841,485
1,958,750
2,078,695
2,233,826
2,219,718
$ 19,587
19,737
19,791
19,954
20,548
20,744
22,296
23,920
25,676
25,561

12.1%

10.0%

7.4%

6.0%

4.7%

5.2%

4.8%

4.4%

15.1%

10.4%
Sources:

HdL Coren & Cone
-192-
City of Hawthorne
Principal Employers
Current Year and Nine Years Ago
2022
Rank
2013
Rank
Percent of
Total
Employment
(1)
Percent of
Total
Employment
(1)
Number of
Employees
Number of
Employer Employees
Space Exploration Technologies (1)
Amazon Fulfillment Center
Hawthorne School District
Wiseburn Unified School District (2)
City of Hawthorne
Home Depot
OSI Systems Inc
Expeditors
Teledyne Relays
6,277
825
1,000
455
230
253
277
257
248
250
1 2
3 4
5 6
7 8
9 14.56%

1.91%

2.32%

1.06%

0.53%

0.59%

0.64%

0.60%

0.58%

0.00%

0.00%
Ring Headquarters 10 0.00%
Total 10,072
43,100

23.37% - 0.00%
Total City Employment (3)
Source: MuniServices, LLC / Avenu Insights & Analytics
Source: 2017, previously published ACFR, historical data is unavailable. *Includes FT, and PT Employment
(1) Total City Labor Force provided by EDD Labor Force Data. -193-
City of Hawthorne
Full-time and Part-time Employees by Function
Last Ten Fiscal Years
Function/Program: 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 General government
Public safety
Public works, streets maint
Comm dev-planning, building, housing
Recreation & Comm-serv, parks
132
106
42 27
127
139
109
43 34
103
132
108
46 32
94 120
112
47 28
84 130
100
48 26
99 129
99 45
27 92
141
97 45
30 100
123
98 43
27 90
131
94 40
29 89
133
97 43
31 71
Total 434 428 412 391 403 392 413 381 383 375
Source: City of Hawthorne, Finance Department
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City of Hawthorne
Operating Indicators by Function
Last Ten Years
Function/Program 2012-13 2013-14 2014-15
General Government:

Number of business licenses issued
Number of requests for public information
Number of new hires including part-time
Number of invoices processed
5,662
62 45
10,863
5,473
56 62
11,000
5,021
158
57 10,007
Public Safety:

Police:

Number of emergency calls 56,130
N/A
60,115
N/A
57,348
N/A
Fire:

Contracts with the Los Angeles
Highways and Streets:

Number of street lights added in current year
Number of traffic signals added in current year
Miles of streets swept
Miles of centerline streets added
Storm drain structures cleaned and repaired
- 1 -
-
15,184
-
-
15,184
-
1 15,184
-
993 993 993
Culture and Recreation:

Number of facility rentals 811
24,123
80 565
18,750
783
23,987
100
563
18,750
Number of swim program participants
Number of adult sports participants
Number of youth sports participants
Number of senior nutrition program meals served
Community Development:

Number of building permits issued
Approximate number of building inspections conducted
Number of new business licenses issued
681
10,143
702
673
9,893
611
716
8,845
719
Source: Various City Departments.
-195-
2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 6,221
152
5,992
223
5,752
201
6,588
179
6,001
188
6,016
276
5,351
233
97 95 84 96 39 80 62
9,478 21,887 20,958 19,501 19,486 18,842 19,218
51,402
N/A
40,002
N/A
39,703
N/A
40,658
N/A
42,221
N/A
42,395
N/A
1 41,298
N/A
- 1 2 - 3 -
-
15,184
-
1 15,184
-
-
15,184
-
2 15,184
-
-
15,184
-
- -
15,184 15,184
- -
993 993 993 997 997 997 997
867
24,280
80 889
25,494
80 847
30,625
30 1,044
30,520
2,458
300
11,757
1,708
95 21,352
200
1,350
18,043
2,972
577 605 701 3,490 2,442 200 4,268
18,750 18,750 16,841 17,290 13,125 34,272 29,120
712
7,020
839
594
4,000
764
775
6,200
669
695
6,475
930
644
4,000
686
802
3,323
531
629
4,180
479
-196-
City of Hawthorne
Capital Asset Statistics by Function/Program
Last Ten Fiscal Years
Function/Program
Public Safety:
2013 2014 2015
Police (1)
Number of police stations
Number of emergency vehicles
1 80
1 79
1 76
Fire
Number of fire stations (1)
Number of emergency vehicles
N/A
N/A
N/A
N/A
N/A
N/A
Highways and Streets:

Miles of streets (2) 91 91 91
Number of street lights 3,639 3,639 3,639
Culture and Recreation:

Parks 10

50.38 1
10 50.38
1 10

50.38 1
Acres of park land
Pools
Notes:
(1) The Fire station is owned by LA County. We contract the fire service (2) The number includes both California Edison Owned street lights and street light owned by City of Hawthorne
Sources: Various City departments.
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2016 2017 2018 2019 2020 2021 2022
1 1 1 1 1 1 1
99 96 96 101 113 105 105
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
91 91 91 91 91 91 91
3,639 3,639 3,639 3,639 3,639 3,645 3,645
10 50.38
1 10

50.38 1
10 50.38
1 10

47.14 2
10 47.14
2 10

57.06 2
10 57.06
2 -198-
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Hawthorne City CouncilApril 25, 2023

Hawthorne City Council
April 25, 2023