Healdsburg City Council
January 18, 2022

CITY OF HEALDSBURG

CITY COUNCIL/REDEVELOPMENT SUCCESSOR AGENCY

REGULAR MEETING AGENDA
City Hall Council Chamber Meeting Date: January 18, 2022 401 Grove Street Time: 6:00 PM
Healdsburg, CA 95448 Date Posted: January 13, 2022
(707) 431-3317
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CORONAVIRUS (COVID-19) ADVISORY NOTICE
Consistent with Government Code section 54953(e), and in light of the declared state of emergency, the Regular Meeting will not be physically open to the public and all City Council Members will be teleconferencing into the meeting via Zoom. To maximize public safety while still maintaining transparency and public access, members of the public can listen to the meeting by using the hyperlink below and may provide public comment by Zoom during the public comment period.

How to Observe the Meetings
To maximize public safety while maintaining transparency and public access, the Healdsburg City Council will be using Zoom Webinar service to allow remote participation. Members of the public who only wish to watch the meeting live or recorded can do so by using the link http://healdsburgca.iqm2.com/Citizens/default.aspx or watching it on the City’s Facebook Page www.facebook.com/cityofhealdsburg.

To Watch the Meeting and Submit Public Comment as Part of the Zoom Webinar:

To join by computer, tablet, or mobile device:

1. Go to https://zoom.us/join and type in the Webinar ID: 829 6108 6054 or follow this link:
https://cityofhealdsburg-org.zoom.us/s/82961086054 (Pre-registration for the meeting is not required.)

2. Fill in your full name, verify you are not a robot (if required), and click “Join”.

3. If the meeting host has started the Webinar, you should join automatically. If the meeting host has not started the Webinar, remain in the Webinar and it will start shortly.

To join by phone:

1. Dial 669-900-9128 or 253-215-8782 or 346-248-7799.

2. Enter the meeting ID: 829 6108 6054 and press # #.

3. If the meeting host has started the meeting, you should join automatically. If the meeting host has not started the meeting, remain in the meeting and it will start shortly.

City Council/RSA Regular Meeting Agenda
January 18, 2022

To Submit Public Comment
By computer, tablet, or mobile device:

1. In the bottom center of the screen is a hand icon, click on “Raise Hand”. The hand icon will place you in line to speak.

2. When it is your turn to comment, the meeting moderator will call upon you to comment.

State your first name, last name, address, and comment. Each speaker will be given no more than three (3) minutes to make your comment.

3. When you are done commenting, please remember to lower hand.

By phone:

1. Press *9 to raise your hand.

2. When it is your turn to comment, the meeting moderator will call the last four digits of your phone number. Press *6 to speak at that time. State your first name, last name, address, and comment. Each speaker will be given no more than three (3) minutes to make your comment.

3. At the conclusion of your comments or when three minutes has passed, the meeting host will remove your ability to talk.

Americans with Disabilities Act Accommodations
Any member of the public who needs accommodations should email the City Clerk at [email protected] or by calling 707-431-3317. The City Clerk will use their best efforts to provide reasonable accommodations to provide as much accessibility as possible while also maintaining public safety in accordance with the city procedure for resolving reasonable accommodation requests. All reasonable accommodations offered will be listed on the city website at https://www.ci.healdsburg.ca.us/406/ada---public-accessibility.

City Council/RSA Regular Meeting Agenda
January 18, 2022

1. CALL TO ORDER/ROLL CALL
A. Pledge of Allegiance
B. Approval of Agenda

2. REPORT ON CLOSED SESSION(S)

3. ANNOUNCEMENTS/PRESENTATIONS

4. CITY MANAGER REPORTS
A. COVID-19 Update and 2021 Drought and Water Supply Update

5. PUBLIC COMMENTS ON ITEMS ON THE CONSENT CALENDAR AND NON

AGENDA ITEMS
This time is set aside to receive comments from the public regarding matters of general interest not on the agenda, but related to City Council/RSA business. Pursuant to the Brown Act, however, the City Council cannot consider any issues or take action on any requests during this comment period. Public comment on non-agenda items is limited to thirty (30) minutes total for all speakers, with each speaker given no more than three (3) minutes. If there are more than ten (10) audience/public comment speakers, the Mayor may reduce each speaker’s time from three (3) minutes so that all speakers have an equal time to speak. At the Mayor’s discretion, the public comment period may be extended past 30 minutes.

6. CONSENT CALENDAR
The following items listed on the Consent Calendar are considered routine in nature or have been previously reviewed by the Council and require little or no further discussion by the Council, public, or applicant and action will be taken by the City Council by a single motion. A Councilmember may request that an item be removed from the Consent Calendar and action taken separately. Consent by a majority of the Councilmembers present will be required in order to remove the item. In the event an item is removed, the matter will be considered immediately following the adoption of the Consent Calendar.

A. Approve the audited financial statements for the fiscal year ending June 30, 2021 By motion, approve the fiscal year 2020-21 audited financial statements based on an audit performed in accordance with Government Auditing Standards.

B. Destruction of Certain Records in the City Manager's/City Clerk's Office and Administrative Services Department
Adopt a Resolution authorizing the destruction of certain records in the City Manager's/City Clerk's Office and the Administrative Services Department.

City Council/RSA Regular Meeting Agenda
January 18, 2022

C. Conditionally award a contract for the Water Reclamation Facility Equalization Pond Solids Removal and Disposal Project for an amount of $205,692 Adopt a resolution conditionally awarding the Water Reclamation Facility Equalization Pond Solids Removal and Disposal Project, Project PWS942, to Clean Harbors Environmental Services, Inc. for an amount not to exceed $205,692, authorizing the City Manager to execute the contract, approve change orders up to 10% of the original bid amount, authorizing a budget augmentation of $226,262 within the Wastewater Fund and authorizing the transfer of $226,262 from the Wastewater Impact Fee Fund to the Wastewater Fund.

D. Adoption of Resolution Authorizing Remote Meetings
Adopt a Resolution authorizing remote meetings of the City Council and other legislative bodies.

7. PUBLIC HEARINGS
A. Amend the Healdsburg Municipal Code updating the Water Shortage Contingency Plan to better comply with statewide recommendations.

Introduce for first reading, by title only, waiving further reading of the text, an Ordinance of the City Council of the City of Healdsburg amending section 13.12.220 of the Healdsburg Municipal Code, Water Shortage Contingency Plan.

8. OLD BUSINESS
A. Project Homekey Grant Funding Acceptance
Staff recommends that the City Council adopt a Resolution to:

1. Find and determine that the acquisition and rehabilitation of the L&M Motel, 70 Healdsburg Avenue, and subsequent operation as interim housing, is not a project subject to the California Environmental Quality Act (CEQA) pursuant to State CEQA Guidelines Section 15061(b)(3) or alternatively is exempt from CEQA pursuant to State CEQA Guidelines Section 15310;

2. Accept the award of Project Homekey funding from the State of California Department of Housing and Community Development for the acquisition and operation of the L&M Motel, 70 Healdsburg Avenue, as interim housing.

3. Approve a Purchase and Sale Agreement between the City of Healdsburg and Sandra A. Bock for the purchase of the L&M Motel, 70 Healdsburg Avenue.

City Council/RSA Regular Meeting Agenda
January 18, 2022

4. Authorize the City Manager to enter into, execute, and deliver the Purchase and Sale Agreement and related documents to Sandra A. Bock and to take any other actions necessary to effectuate the terms and conditions of the Purchase and Sale Agreement.

5. Authorize the City Manager to enter into, execute, and deliver a Standard Agreement and related documents to the State of California and to take any other actions necessary to effectuate the terms and conditions of the Project Homekey funding.

B. Appointment of Parks and Recreation Commissioners and Senior Citizen Advisory Commissioners
By motion:

1. Appoint three applicants to the Parks and Recreation Commission for three (3) year terms due to expire January 1, 2025.

2. Re-appoint Jane Farkas to the Senior Citizen Advisory Commission for an additional three-year term due to expire 12/31/2024 and appoint Donald Taylor for a term of three years due to expire 12/31/2024.

9. NEW BUSINESS
A. Chamber of Commerce Professional Services Agreement
Adopt a Resolution approving a Professional Services Agreement with the Healdsburg Chamber of Commerce and authorizing the City Manager to execute the agreement.

10. COUNCIL REPORTS ON MATTERS OF INTEREST OCCURRING SINCE

PREVIOUS REGULAR MEETING/EXPENSE REIMBURSEMENT REPORTS

11. WRITTEN COMMUNICATIONS
A. Written Communication from Community Development Director Scott Duiven regarding Planning Commission actions taken on January 11, 2022.

No action required.

12. CLOSED SESSIONS

13. ADJOURN CITY COUNCIL / RSA MEETING

14. FUTURE AGENDA ITEMS
A. Future Agenda Items
City Council/RSA Regular Meeting Agenda
January 18, 2022

Some of the items planned for the February 7, 2022 Council Meeting include, but are not limited to:
• Park Naming Policy
• Community Response Grants
• Diversity, Equity and Inclusion Consultant PSA
• Special Event Policy and Municipal Code Update
• Reach Code Update
Some of the items planned for the February 22, 2022 Council Meeting include, but are not limited to:
• Q2 Fiscal update
• Pension Liability Funding Policy Review and Update
• Revision to Waste Delivery Agreement (WDA) with Republic Services • Development Agreement Amendment with Comstock
Some of the items planned for the March 7, 2022 Council Meeting include, but are not limited to:
• City Council Goal Setting Session
These agenda items may be delayed or removed before the meeting. Please review the agenda for that meeting when it is published to ensure that you can voice your opinion about issues you are concerned about.

CITY OF HEALDSBURG

CITY COUNCIL AGENDA STAFF REPORT
MEETING DATE: January 18, 2022
SUBJECT: Approve the audited financial statements for the fiscal year ending June 30, 2021
PREPARED BY: Andrew Sturmfels, Administrative Services Director STRATEGIC INITIATIVE(S):

Provide Effective Governance
RECOMMENDED ACTION(S):

By motion, approve the fiscal year 2020-21 audited financial statements based on an audit performed in accordance with Government Auditing Standards.

COMMUNITY ENGAGEMENT/OUTREACH:

Not applicable.

BACKGROUND:

The City is required by the State of California Government Code to complete an independent audit of its financial statements at the end of each fiscal year. The City prepares annual financial statements in accordance with generally accepted accounting principles. The City’s auditor has recently completed its audit of the City’s fiscal year 2020-21 statements and found no errors or issues with the City’s statements.

DISCUSSION/ANALYSIS:

Moss, Levy & Hartzheim LLP has completed the fiscal year 2020-21 audit of the City’s financial statements. Staff is pleased to report that, as in previous years, the auditor’s opinion on the City’s fiscal year 2020-21 financial statements is without exception or unqualified. That is, the auditor’s report is not restricted (qualified) in some manner, nor does it take exception to any of the information contained in the City’s financial statements. While a qualification or exception is not necessarily detrimental, staff is happy to report that the City’s financial statements continue to earn a “clean opinion.”
The Annual Financial Report includes Management’s Discussion and Analysis, which provides a simple narrative introduction, overview and analysis of the basic financial statements. The first two statements, the Statement of Net Position and the Statement of Activities, provide

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information about the activities of the City as a whole. These statements include all assets and liabilities using the accrual basis of accounting, which is similar to the accounting used by most private sector companies. All current year’s revenues and expenses are taken into account regardless of when cash is received or paid. Capital assets, including infrastructure and long-term liabilities, are included on a City-wide Statement of Net Position.

Overall, the City’s net position increased by $10.87 million. Over time, increases or decreases in net financial position may serve as a useful indicator of whether the financial position of the City is improving or declining. From the most basic view, the net position is the difference between the assets and the liabilities. The increase is mainly attributable to an increase in charges for services of $5.50 million, an increase in sales and use tax of 1.07 million, and an increase in transient occupancy tax of $941.75 thousand from the prior year levels.

The Balance Sheet and Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds are found on pages 18 and 20, and present information in a manner more consistent with how the City prepares its budget. The unassigned fund balance of the combined General Fund was $3.28 million, while the total fund balance was $20.65 million. The unassigned classification represents the fund balance that has not been legally restricted, committed, or assigned to specific purposes within the General Fund. The General Fund should be the only fund that reports a positive unassigned fund balance amount. For financial statement reporting purposes, the combined General Fund includes seven funds.

Following the basic financial statements is the Notes section beginning on page 31. The Notes provide a description of accounting policies used by the City and additional information regarding the financial statements.

The Required Supplementary Information Section of the report begins on page 83 and includes a Schedule of the Local Government’s Proportionate Share of the Net Pension Liability, Schedule of Pension Contributions, Schedule of Change in Net OPEB Liability and Related Ratios, Schedule of OPEB Contributions, and Schedule of Revenues, Expenditures and Changes in Fund Balances Budget to Actual. The Other Supplemental Information Section begins on page 91 and includes the Nonmajor Governmental Funds, General Fund Activities combining statements, Water Fund Activities combining statements, Sewer Fund Activities combining statements, Electric Fund Activities combining statements, Internal Service Funds combining statements and the Private-purpose Trust Funds combining statements.

Moss, Levy & Hartzheim LLP also provided the City with a Management Report. The Management Report is intended to provide management and those charged with governance with valuable information regarding the organization. In an audit of financial statements, professional standards require that auditors obtain an understanding of internal controls to the extent necessary to plan the audit. Auditors evaluate each internal control deficiency noted during the audit to determine whether the deficiency, or a combination of deficiencies, is severe enough to be considered a material weakness or significant deficiency.

The results of Moss, Levy & Hartzheim LLP’s tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

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ENVIRONMENTAL STEWARDSHIP:

Not applicable.

ALTERNATIVES:

Staff does not recommend any alternatives as the City is required by the State of California Government Code to complete an independent audit of its financial statements at the end of each fiscal year.

FISCAL IMPACT:

There is no fiscal impact as a direct result of the proposed action.

ENVIRONMENTAL ANALYSIS:

Pursuant to Title 14, the California Code of Regulations, Section 15378(b)(5) of the California Environmental Quality Act (“CEQA”) guidelines, the proposed action is an administrative activity of the City that will not result in direct or indirect physical changes to the environment.

ATTACHMENT(S):

Financial Statements FY 2020-21
Management Report FY 2020-21

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CITY OF HEALDSBURG
Financial Statements
Fiscal Year Ended June 30, 2021

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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

TABLE OF CONTENTS
PAGE

INTRODUCTORY SECTION
Table of Contents .............................................................................................................................. i

FINANCIAL SECTION
A. Independent Auditor’s Report ................................................................................................... 1 B. Management’s Discussion and Analysis ................................................................................... 4 C. Basic Financial Statements:

Government-wide Financial Statements:

Statement of Net Position ................................................................................................. 15 Statement of Activities ...................................................................................................... 16 Fund Financial Statements:

Balance Sheet – Governmental Funds .............................................................................. 18 Reconciliation of the Balance Sheet of
Governmental Funds to the Statement of Net Position .................................................. 19 Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds ...................................................................................................... 20 Reconciliation of the Statements of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities ......................... 21 Statement of Net Position – Proprietary Funds ................................................................. 22 Statement of Revenues, Expenses, and Changes in
Net Position – Proprietary Funds ................................................................................... 24 Statement of Cash Flows – Proprietary Funds .................................................................. 26 Statement of Fiduciary Net Position ................................................................................. 28 Statement of Changes in Fiduciary Net Position .............................................................. 29 Notes to Basic Financial Statements .................................................................................... 31

D. Required Supplemental Information:

Schedule of the Local Government’s Proportionate Share
of the Net Pension Liability .............................................................................................. 83 Schedule of Pension Contributions ...................................................................................... 84 Schedule of Change in Net OPEB Liability and Related Ratios .......................................... 85 Schedule of OPEB Contributions ......................................................................................... 86 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual:

General Fund .............................................................................................................. 87 Community Services Special Revenue Fund .............................................................. 88 Note to Required Supplementary Information ..................................................................... 89 E. Other Supplemental Information:

F. Nonmajor Governmental Funds:

Description of Nonmajor Governmental Funds ................................................................ 91 Combining Balance Sheet – Nonmajor Governmental Funds .......................................... 92 Combining Statement of Revenues, Expenditures, and
Changes in Fund Balances – Nonmajor Governmental Funds ...................................... 94

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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

TABLE OF CONTENTS
PAGE
FINANCIAL SECTION (Continued)
F. Nonmajor Governmental Funds:

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

Gas Tax Special Revenue Fund ................................................................................ 96 Public Safety Special Revenue Fund ........................................................................ 97 Strong Motion Education and Data Special Revenue Fund ..................................... 98 Area A Lighting and Landscaping Special Revenue Fund ....................................... 99 Media Center Special Revenue Fund ..................................................................... 100 Benjamin Way Maintenance District Special Revenue Fund ................................. 101 Housing Successor Agency Special Revenue Fund ............................................... 102 General Debt Service Fund ..................................................................................... 103 G. General Fund Activities:

Combining Balance Sheet ................................................................................................ 104 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances ........................................................................................................... 106 H. Water Fund Activities:

Combining Statement of Net Position .............................................................................. 108 Combining Statement of Revenues, Expenses, and Changes
in Net Position ............................................................................................................... 109 I. Sewer Fund Activities:

Combining Statement of Net Position .............................................................................. 110 Combining Statement of Revenues, Expenses, and Changes
in Net Position ............................................................................................................... 112 J. Electric Fund Activities:

Combining Statement of Net Position .............................................................................. 114 Combining Statement of Revenues, Expenses, and Changes
in Net Position ............................................................................................................... 115 K. Internal Service Funds:

Combining Statement of Net Position .............................................................................. 116 Combining Statement of Revenues, Expenses, and Changes
in Net Position ............................................................................................................... 117 Combining Statement of Cash Flows ............................................................................... 119 L. Fiduciary Funds:

Combining Statement of Fiduciary Net Position.............................................................. 120 Combining Statement of Changes in Fiduciary Net Position ........................................... 122 ii

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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21) OFFICES: BEVERLY HILLS ∙ CULVER CITY ∙ SANTA MARIA
MEMBER AMERICAN INSTITUTE OF C.P.A.’S ∙ CALIFORNIA SOCIETY OF MUNICIPAL FINANCE OFFICERS ∙ CALIFORNIA ASSOCIATION OF SCHOOL BUSINESS OFFICIALS

PARTNERS COMMERCIAL ACCOUNTING & TAX SERVICES GOVERNMENTAL AUDIT SERVICES RONALD A LEVY, CPA 9465 WILSHIRE BLVD., 3RD FLOOR 5800 HANNUM AVENUE, SUITE E CRAIG A HARTZHEIM, CPA BEVERLY HILLS, CA 90212 CULVER CITY, CA 90230 HADLEY Y HUI, CPA TEL: 310.273.2745 TEL: 310.670.2745
ALEXANDER C HOM, CPA FAX: 310.670.1689 FAX: 310.670.1689 ADAM V GUISE, CPA www.mlhcpas.com www.mlhcpas.com

TRAVIS J HOLE, CPA
Independent Auditor’s Report
The Members of the City Council of the
City of Healdsburg
Healdsburg, California
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Healdsburg, California (City) as of and for the fiscal year ended June 30, 2021, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.

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

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

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

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

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21) 2 Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Healdsburg, California, as of June 30, 2021, and the respective changes in financial position and where applicable, cash flows thereof, for the fiscal year then ended in conformity with accounting principles generally accepted in the United States of America.

Emphasis of Matter
As discussed in Note 1 of the notes to the basic financial statements, effective July 1, 2020, the Authority adopted the Governmental Accounting Standards Board (GASB) Statement No. 84, Fiduciary Activities. Our opinion is not modified with respect to this matter.

Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 4 through 14, Schedule of the City’s Proportionate Share of the Net Pension Liability, Schedule of Pension Contributions, the Schedule of Changes Net OPEB Liability and Related Ratios, and Schedule of OPEB Contributions on pages 83 through 86, and budgetary comparison information on pages 87 and 88 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The combining and individual nonmajor governmental fund financial statements, nonmajor governmental fund budgetary comparison schedules, and the combining General Fund Activities, Water Fund Activities, Sewer Fund Activities, Electric Fund Activities, Internal Service Funds, and Private-purpose Trust Funds are presented for purposes of additional analysis and are not required parts of the financial statements.

The combining and individual nonmajor governmental fund financial statements, nonmajor governmental fund budgetary comparison schedules, and the combining General Fund Activities, Water Fund Activities, Sewer Fund Activities, Electric Fund Activities, Internal Service Funds, and Private-purpose Trust Funds, 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 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 governmental fund financial statements, nonmajor governmental fund budgetary comparison schedules, and the combining General Fund Activities, Water Fund Activities, Sewer Fund Activities, Electric Fund Activities, Internal Service Funds, and Private-purpose Trust Funds are fairly stated, in all material respects, in relation to the financial statements as a whole.

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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21) 3 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 30, 2021, on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing and not to provide an opinion on the internal control over financial reporting or on compliance.

That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.

Moss, Levy & Hartzheim, LLP
Culver City, California
December 30, 2021

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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG
Management’s Discussion and Analysis
Fiscal Year Ended June 30, 2021
As management of the City of Healdsburg (“City”), we offer readers of the City’s financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended June 30, 2021. We encourage readers to consider the information presented here in conjunction with the accompanying Independent Auditor’s Report, the financial statements, and the accompanying notes to the financial statements.

Financial Highlights
 City assets exceeded liabilities by $213.90 million (net position) at June 30, 2021, an increase of $11.13 million, or 5.50% over the prior fiscal year.  The City’s current fiscal year change in net position of $10.90 million, compared to the prior fiscal year change in net position of $30.37 thousand, resulted in an increased net position of $10.87 million. The increase is mainly attributable to an increase in charges for services of $5.50 million, an increase in sales and use tax of $1.07 million and an increase in transient occupancy tax of $941.75 thousand from the prior year levels.  While the COVID-19 pandemic created economic uncertainty, tourism and business activities recovered more quickly than anticipated. Tourism revenue growth also benefited from the addition of a new luxury resort that opened in January of 2021. At the close of fiscal year 2020-21, City governmental funds reported combined ending fund balance of $20.65 million, an increase of $3.25 million or 18.66% from the prior fiscal year.  The unassigned portion of the total governmental funds balance grew from $1.65 million in FY 19-20 to $2.93 million in FY 20-21, an increase of $1.28 million or 77.58%. Strict cost controls, along with a faster than anticipated recovery were the key drivers for the year over year increase (Note 14, page 76)
 At the end of fiscal year 2020-21, unassigned fund balance for the General Fund was $3.29 million, or 22.40% of total General Fund expenditures. The General Fund Balance sheet is on page 18.

Overview of the Basic Financial Statements
This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements. The City’s basic financial statements are comprised of three components: 1) government-wide financial statements, 2) fund financial statements and 3) notes to the financial statements. This report also contains required supplementary information in addition to the basic financial statements themselves.

REQUIRED COMPONENTS OF THE ANNUAL FINANCIAL REPORT
Summary Detail
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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG
Management’s Discussion and Analysis
Fiscal Year Ended June 30, 2021
Government-wide Financial Statements. The government-wide financial statements are comprised of the Statement of Net Position and Statement of Activities. These two statements are designed to provide readers with a broad overview of the City’s finances utilizing the full accrual method of accounting, in a manner similar to a private-sector business. Under the full accrual method of accounting, transactions are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, assets, liabilities, revenues and expenses are reported in these statements for some items that will only result in cash flows in future fiscal periods (e.g. uncollected revenues and accrued but unpaid interest expense).

The Statement of Net Position presents information on all of the City’s assets and liabilities, including capital assets and long-term liabilities, with the difference between the two 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 as a whole is improving or deteriorating.

The Statement of Activities presents information showing how the City’s net position changed during the most recent fiscal year. Functional activities are highlighted in this statement, whereby direct and indirect functional costs are shown net of related program revenue. This statement shows the extent to which the various functions depend on general taxes and nonprogram revenues for support.

Both the government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City include general government, public safety, community development and housing, community services and streets capital projects. The business-type activities of the City include the water, sewer, and electric utilities, and other programs.

Fund Financial Statements. The fund financial statements focus on current available resources and are organized and operated on the basis of funds, each of which is defined as a fiscal and accounting entity with a self-balancing set of accounts established for the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulations, restrictions or limitations. All of the funds of the City can be divided into three categories:
governmental funds, proprietary funds, and fiduciary funds.

The City adopts an annual appropriated budget for all governmental and proprietary funds.

Budgetary comparison statements for the General Fund and all major special revenue funds are required supplemental information. The Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual – General Fund on page 87, reflect both the original and final budget figures for the General Fund. Additionally, budgetary schedules for the other governmental funds have been provided as required to demonstrate compliance with the budget. 5 6.A.a
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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG
Management’s Discussion and Analysis
Fiscal Year Ended June 30, 2021
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, the governmental funds financial statements utilize the modified accrual method of accounting, which focuses 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 evaluating the City’s near-term financial requirements.

The City maintains sixteen individual governmental funds. Information is presented separately in the Governmental Funds Balance Sheet and in the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances for the General Fund, Community Services, and Capital Projects - Streets as they are considered to be major funds. Data from the other governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of supplementary combining statements.

Proprietary Funds. Proprietary funds are generally used to account for services for which the City charges outside customers, or internal departments of the City. Proprietary funds provide the same type of information as shown in the government-wide statements, only in more detail.

The City maintains the following two types of proprietary funds:
 Enterprise Funds. These 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 the operations of water, sewer, electric, and airport.  Internal Service Funds. These funds are used to report activities that provide internal services for the City. The City uses internal service funds to account for its insurance and benefits, vehicle maintenance, information systems, and building maintenance. Because internal service funds predominantly benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements. The internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements.

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.

Notes to the Financial Statements. The notes provide additional information that is essential to a full understanding of the government-wide and fund financial statements.

Other Supplementary Information. In addition to the basic financial statements and accompanying notes, this report also presents combining statements referred to earlier in connection with other governmental funds and the internal service funds. Also included are the budgetary comparison Statement of Revenues, Expenditures, and Changes in Fund Balances for all other special revenue funds, capital project funds, and all debt service funds. 6 6.A.a
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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG
Management’s Discussion and Analysis
Fiscal Year Ended June 30, 2021
Government-Wide Financial Analysis. Net position may serve over time as a useful indicator of a government’s financial position. The following table reflects the condensed net position for both governmental and business-type activities.

By far the largest portion of the City’s net position (84.26%) reflects its net investment in capital assets (e.g. land, buildings, utility plants, machinery, equipment, vehicles, and infrastructure), net of any related outstanding debt used to acquire those assets. The City uses these assets to provide services to citizens; consequently, these assets are not available for future spending.

Although the City’s investment in capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves are not normally used to liquidate these liabilities.

Another portion of the City’s net position ($33.65 million or 15.73%) represents resources that are subject to external restrictions on how they may be used, noted above as restricted net position.

ASSETS 2021 2020 2021 2020 2021 2020
Current and other assets $ 31,076,885 $ 26,994,362 $ 47,534,827 $ 51,870,724 $ 78,611,712 $ 78,865,086 Capital assets 108,556,987 101,122,717 101,403,445 96,895,850 209,960,432 198,018,567 Total assets 139,633,872 128,117,079 148,938,272 148,766,574 288,572,144 276,883,653

DEFERRED OUTFLOWS OF RESOURCES
Deferred Amounts on Debt Refundings - - 766,356 821,095 766,356 821,095 Deferred Pension Related Items 5,265,801 5,502,127 2,265,986 2,095,947 7,531,787 7,598,074 Deferred OPEB Related Items 176,310 243,232 51,129 - 227,439 243,232 Total deferred outflows 5,442,111 5,745,359 3,083,471 2,917,042 8,525,582 8,662,401

LIABILITIES
Current Liabilities 5,152,995 3,992,585 3,219,709 3,649,091 8,372,704 7,641,676 Long-term liabilities 34,443,034 33,323,359 39,079,163 40,178,242 73,522,197 73,501,601 Total liabilities 39,596,029 37,315,944 42,298,872 43,827,333 81,894,901 81,143,277

DEFERRED INFLOWS OF RESOURCES
Deferred Pension Related Items 910,659 1,122,309 343,809 453,660 1,254,468 1,575,969 Deferred OPEB Related Items 37,882 55,776 10,987 - 48,869 55,776 Total deferred inflows 948,541 1,178,085 354,796 453,660 1,303,337 1,631,745

NET POSITION
Net Investment
in Capital Assets 107,260,715 99,462,564 72,961,799 66,461,588 180,222,514 165,924,152 Restricted 17,634,440 14,947,319 16,020,267 20,427,643 33,654,707 35,374,962 Unrestricted (20,363,742) (19,041,474) 20,386,009 20,513,392 22,267 1,471,918 Total net position $ 104,531,413 $ 95,368,409 $ 109,368,075 $ 107,402,623 $ 213,899,488 $ 202,771,032 Governmental Activities Business-type Activities Total Government

NET POSITION
June 30, 2021 and 2020
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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG
Management’s Discussion and Analysis
Fiscal Year Ended June 30, 2021
At the end of the current fiscal year, the City is able to report positive balances in all three categories of total net position, both for the government as a whole, as well as for its separate governmental activities and business-type activities. The same situation held true for the prior fiscal year.

The following table reflects the change in net position for both governmental and business-type activities.

The Change in Net Position shows how the government’s net position changed during fiscal year 2020-21 as compared to fiscal year 2019-20. The City’s current fiscal year change in net position of $10.90 million, compared to the prior fiscal year change in net position of $30.37 thousand, resulted in an increase of $10.87 million. The current year increase is a result of other revenues increasing $5.87 million, governmental charges for services increasing $1.52 million, business charges for services increasing $3.97 million, sales and use tax increasing $1.07 million, transient occupancy tax increasing $941.75 thousand, and capital grants increasing 2021 2020 2021 2020 2021 2020

PROGRAM REVENUES
Charges for Services $ 3,801,418 $ 2,278,022 $ 33,046,498 $ 29,073,708 $ 36,847,916 $ 31,351,730 Operating Grants 2,274,986 1,777,828 - 2,274,986 - 1,777,828 Capital Grants 1,232,968 640,628 97,589 166,538 1,330,557 807,166

GENERAL REVENUES
Property and Other Taxes 3,030,458 2,766,448 - 3,030,458 - 2,766,448 Sales and Use Taxes 8,069,870 6,995,107 - 8,069,870 - 6,995,107 Motor Vehicle in Lieu 1,570,322 1,475,012 - 1,570,322 - 1,475,012 Franchise Fees 604,013 557,757 - - 604,013 557,757
Business License Taxes 314,307 177,086 - - 314,307 177,086 Transient Occupancy Taxes 4,750,888 3,809,137 - 4,750,888 - 3,809,137 Use of Money and Property 823,296 513,637 364,392 1,186,418 1,187,688 1,700,055 Other Revenues (Misc) 5,979,537 109,768 - 5,979,537 - 109,768 TOTAL REVENUES $ 32,452,063 $ 21,100,430 $ 33,508,479 $ 30,426,664 $ 65,960,542 $ 51,527,094

EXPENSES
Governmental Activities
General Government $ 4,181,962 $ 3,955,126 $ - $ 4,181,962 - $ $ 3,955,126 Public Safety 9,668,455 10,866,228 - 9,668,455 - 10,866,228 Community Development 1,099,864 992,053 - 1,099,864 - 992,053 Community Services 3,655,094 4,882,178 - 3,655,094 - 4,882,178 Streets and Roads 5,056,824 2,315,010 - 5,056,824 - 2,315,010 Interest on Long Term Debt 258,000 135,428 - - 258,000 135,428 Unallocated Depreciation 2,426,750 2,280,873 - 2,426,750 - 2,280,873 Business Type Activities
Water - 5, - 489,695 4,948,168 5,489,695 4,948,168
Sewer - 9, - 212,612 8,769,856 9,212,612 8,769,856
Electric - 13, - 594,946 11,965,773 13,594,946 11,965,773 Non-Major Enterprise Funds (Airport) - - 419,697 386,034 419,697 386,034 TOTAL EXPENSES $ 26,346,949 $ 25,426,896 $ 28,716,950 $ 26,069,831 $ 55,063,899 $ 51,496,727

EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENSES BEFORE TRANSFERS $ 6,105,114 $ (4,326,466) $ 4,791,529 $ 4,356,833 $ 10,896,643 $ 30,367 Transfers
Transfers In (Out) $ 2,580,555 $ 947,724 $ (2,580,555) $ (947,724) $ - $ - TOTAL TRANSFERS $ 2,580,555 $ 947,724 $ (2,580,555) $ (947,724) $ - $ - CHANGE IN NET POSITION $ 8,685,669 $ (3,378,742) $ 2,210,974 $ 3,409,109 $ 10,896,643 $ 30,367 NET POSITION JULY 1 95,368,409 98,747,151 107,402,623 103,993,514 202,771,032 202,740,665 RESTATEMENT OF NET POSITION 477,335 - - (245,522) 2 - 31,813 NET POSITION JUNE 30 $ 95,368,409 104,531,413 $ 109,368,075 $ 107,402,623 $ 213,899,488 $ 202,771,032 $

CHANGE IN NET POSITION
FOR THE FISCAL YEARS ENDED JUNE 30, 2021 and 2020
Government Activities Business-Type Activities Totals
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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG
Management’s Discussion and Analysis
Fiscal Year Ended June 30, 2021
$523.40 thousand. These increases were further offset by a $5.56 million increase in expenses for business-type activities and $920.05 thousand increase in expenses for government-type activities.

Governmental Activities. Governmental activities increased $8.68 million during the fiscal year ended June 30, 2021. Revenue increased $11.35 million or 53.80%. Factors contributing to the current fiscal year increase include:
 Miscellaneous revenue increased $5.87 million
 Charges for services increased $1.52 million
 Sales and use tax increased $1.07 million
 Grants increased $1.09 million
 Transient occupancy taxes increased $941.75 thousand
 Capital grants increased $592.34 thousand
The chart below reflects information from the Statement of Activities, page 16 and 17, of the Financial Statements. The largest revenue source for governmental activities is sales and use tax (26.09%), followed by miscellaneous (19.33%), transient occupancy taxes (15.36%) and property taxes (14.88%).

REVENUES BY SOURCE – GOVERNMENTAL ACTIVITIES
FOR FISCAL YEAR ENDED JUNE 30, 2021
As for expenditures, public safety expenses are the most significant (36.70%) of all governmental activities expenses, followed by streets and roads (19.19%), general government (15.88%), and community services (13.87%). Depreciation expense is 9.21% of the total expenses for governmental activities. The chart below reflects information from the Financial Statements, Statement of Activities on page 16.
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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG
Management’s Discussion and Analysis
Fiscal Year Ended June 30, 2021
EXPENSES BY FUNCTION/PROGRAM – GOVERNMENTAL ACTIVITIES
FOR FISCAL YEAR ENDED JUNE 30, 2021

The chart below is a side-by-side comparison of program expense and revenue for governmental activities. For fiscal year 2020-21, program expenses exceeded program revenues for all governmental activity programs

COMPARISON OF EXPENSES AND PROGRAM REVENUES

GOVERNMENTAL ACTIVITIES
FOR FISCAL YEAR ENDED JUNE 30, 2021
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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG
Management’s Discussion and Analysis
Fiscal Year Ended June 30, 2021
Business-Type Activities. During the fiscal year ended June 30, 2021, business-type activities decreased the City’s net position by $2.58 million.
 Total revenue of $33.51 million is mainly comprised of charges for services of $33.05 million and use of money and property of $364.39 thousand.  Revenue exceeded operating expenses of $28.72 million, resulting in a current fiscal year net position increase of $2.68 million before transfers.  Transfers out of $2.58 million and a prior period restatement of $245.52 thousand resulted in the decrease in current year net position.

REVENUES BY SOURCE – BUSINESS-TYPE ACTIVITIES
FOR FISCAL YEAR ENDED JUNE 30, 2021
The chart below is a side-by-side comparison of program expense and revenue for business-type activities. For fiscal year 2020-21, program revenue exceeded program expenses for Water, Sewer and Electric.

EXPENSES AND PROGRAM REVENUES

BUSINESS-TYPE ACTIVITIES
FOR FISCAL YEAR ENDED JUNE 30, 2021
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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG
Management’s Discussion and Analysis
Fiscal Year Ended June 30, 2021
Governmental Funds. The City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. The focus of the City’s governmental funds is to provide information on near-term inflows, outflows and balances of spendable resources. Such information is useful in assessing the City’s 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.

As of June 30, 2021, the City’s governmental funds Balance Sheet on page 18, reported total ending fund balances of $20.65 million, an increase of $3.27 million from the prior fiscal year.

This increase is primarily attributed to a $2.06 million increase in sales and other tax revenue, and an increase in intergovernmental of $1.04 million.

Approximately 14.19% of the total ending fund balances ($2.93 million) is unassigned and available for spending in the future at the government’s discretion. The remainder of the fund balance is either nonspendable, restricted, committed, or assigned. The most significant of these reserved fund balances are restricted for pension stabilization, affordable housing, and community services, $5.5 million, $7.07 million, and $1.5 million, respectively.

General Fund revenues were $3.54 million (23.28%) more than in the prior fiscal year, and expenditures increased by $410.56 thousand (2.88%). The increase in revenues was the result of an increase in sales and other taxes of $1.37 million, an increase in license and permits of $754.30 thousand, an increase in property tax of $359.29 thousand, an increase in use of money and property of $361.42 thousand, and an increase in charges for services of $314.58 thousand.

Proprietary Funds. The City’s proprietary funds Revenues, Expenses, and Changes in Net Position, page 22 and 23, provide the same type of information found in the government-wide financial statements, but in more detail. The City’s major enterprise funds are Water, Sewer, and Electric. The major changes in enterprise net position are an increase in the Water Fund of $3.84 million to $21.00 million, a decrease in the Sewer Fund of $2.72 million to $45.44 million and an increase in the Electric Fund of $860.57 thousand to $39.23 million.

The Internal Service Funds had a decrease in net position of $269.36 thousand during the fiscal year, ending with a balance of $8.32 million. This decrease is attributable to a decrease in operating revenue of $692.58, an increase in operating expense of $857.73 thousand, and a decrease in investment income of $71.48 thousand. The operating revenue is made up of the service fees charged to each operating fund.
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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG
Management’s Discussion and Analysis
Fiscal Year Ended June 30, 2021

CAPITAL ASSET AND LONG-TERM LIABILITIES
Capital Assets. The City’s investment in capital assets for its governmental and business-type activities at June 30, 2021, amounted to $209.96 million (net of accumulated depreciation). This investment in capital assets includes land, buildings and improvements, equipment, vehicles, infrastructure, and construction in progress. Depreciation expense for the fiscal year totaled $7.07 million.

Additional information on the City’s capital assets can be found in Note 7 of the basic financial statements.

Long-Term Liabilities. The City’s outstanding long-term liabilities, including bonds, loans payable, net pension liability, claims, capital leases, OPEB, and compensated absences totaled $77.35 million at June 30, 2021. Of this total, $36.09 million (46.65%) was in governmental activities and $41.26 million (53.35%) was in business-type activities.

Additional information on the City’s long-term liabilities can be found in Note 8 of the basic financial statements.
2021 2020 2021 2020
Pension Obligation Bond $ 1,094,319 $ 1,582,633 $ 611,737 $ 884,723 Net Pension Liability 28,196,885 26,029,881 11,087,343 10,310,120 Certificates of Participation - - 1,630,000 1,755,000
HUSD Capital Lease Payable 1,274,207 1,404,307 - -
Revenue Bonds - - 25,937,367 27,514,751
Compensated Absences 2,507,123 2,273,171 - -
Successor Agency Payable 1,480,975 1,584,791 1,689,018 1,807,416 Capital Leases 22,065 255,846 - -
Claims Payable 441,634 575,367 - -
OPEB 1,069,929 1,279,607 310,279 -
Total $ 36,087,137 $ 34,985,603 $ 41,265,744 $ 42,272,010 Governmental Activities Business-type Activities
2021 2020 2021 2020
Land and Land Rights $ 20,193,298 $ 20,805,340 $ 1,245,877 $ 1,245,877 Right of Way 6,681,379 6,681,379 - -
Construction in Progress 2,283,574 9,954,405 3,706,959 7,917,971 Land Improvements 4,329,096 2,631,816 - -
Streets 71,169,219 54,150,948 - -
Buildings 32,716,886 32,716,886 3,040,870 3,040,870
Machinery and Equipment 10,638,032 10,091,553 3,364,496 3,037,947 Infrastructure 1,515,614 1,515,614 - -
Utility Systems - - 131,210,646 120,970,041
Drainage - - 11,787,810 10,525,492
Operations - - 4,046,891 3,627,134
Total $ 149,527,098 $ 138,547,941 $ 158,403,549 $ 150,365,332 Less Accumulated Depreciation (40,970,111) (37,425,224) (57,000,104) (53,469,482) Net Capital Assets $ 108,556,987 $ 101,122,717 $ 101,403,445 $ 96,895,850 Governmental Activities Business-type Activities
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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG
Management’s Discussion and Analysis
Fiscal Year Ended June 30, 2021
ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS
While the economy has improved substantially over the last year, significant uncertainty remains regarding the global COVID-19 pandemic and its economic impacts. The Consumer Price Index has increased substantially over the last year, resulting in cost increases for city-purchased goods and construction projects, while low bond yields impact the City’s ability to gain meaningful interest on retained earnings. Additionally, the City experienced a significant drought during the summer of 2021 and anticipates reductions in water supply and water revenue for the 2021-22 fiscal year. The City remains committed to evaluating our governmental practices, opportunities for greater operational efficiencies, and ensuring the best possible utilization of taxpayer provided resources. The 2021-22 fiscal year General Fund revenue projections continue to be conservative. Modest increases have been projected for transient occupancy taxes, sales taxes, and property taxes.

REQUESTS FOR INFORMATION
This financial report is designed to provide a general overview for all those with an interest in the City’s finances. Questions concerning any of the information provided in this report or requests for additional information should be addressed to Andrew Sturmfels, Administrative Services Director, City of Healdsburg, [email protected] or at 401 Grove Street, Healdsburg, CA 95448-4723.
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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21) Governmental Business-type
Activities Activities Total
ASSETS
Current Assets:

Cash and investments $ 12,671,651 $ 30,366,451 $ 43,038,102 Cash and investments with fiscal agents 731,533 2 731,535 Pension stabilization investments 5,692,743 2,413,333 8,106,076 Investment in NCPA Reserves 5,963,403 5,963,403
Accounts receivable 2,493,286 4,430,401 6,923,687
Loans and notes receivable 8,805,480 8,805,480
Interest receivable 15,972 32,899 48,871
Intergovernmental receivable 2,399,576 2,399,576
Internal balances (2,734,512) 2,734,512
Deposits 947,429 947,429
Inventory 16,058 1,582,093 1,598,151
Prepaid items 37,669 11,733 49,402
Total Current Assets 31,076,885 47,534,827 78,611,712
Non-current Assets:

Capital assets:

Not being depreciated 29,158,251 4,952,836 34,111,087
Being depreciated, net of accumulated depreciation 79,398,736 96,450,609 175,849,345 Total Non-current Assets 108,556,987 101,403,445 209,960,432 Total Assets 139,633,872 148,938,272 288,572,144

DEFERRED OUTFLOWS OF RESOURCES
Deferred loss on debt refunding 766,356 766,356
Pension related 5,265,801 2,265,986 7,531,787
OPEB related 176,310 51,129 227,439
Total Deferred Outflows of Resources 5,442,111 3,083,471 8,525,582

LIABILITIES
Current Liabilities:

Accounts payable and accrued liabilities 1,796,428 508,780 2,305,208 Retentions payable 294,562 112,202 406,764
Interest payable 262,544 262,544
Claims payable - current 137,942 137,942
Deposits payable 1,417,902 149,602 1,567,504
Compensated absences, due within one year 716,822 716,822 Capital lease, due within one year 158,465 158,465
Other long-term liabilities, due within one year 630,874 2,186,581 2,817,455 Total Current Liabilities 5,152,995 3,219,709 8,372,704 Non-current Liabilities
Compensated absences, due in more than one year 1,790,301 1,790,301 Claims payable, due in more than one year 303,692 303,692 Net pension liability 28,196,885 11,087,343 39,284,228
Capital lease, due in more than one year 1,137,807 1,137,807 Other long-term liabilities, due in more than one year 1,944,420 27,681,541 29,625,961 Other post-employment benefits liability 1,069,929 310,279 1,380,208 Total Non-current Liabilities 34,443,034 39,079,163 73,522,197 Total Liabilities 39,596,029 42,298,872 81,894,901

DEFERRED INFLOWS OF RESOURCES
Pension related 910,659 343,809 1,254,468
OPEB related 37,882 10,987 48,869
Total Deferred Inflows of Resources 948,541 354,796 1,303,337

NET POSITION
Net investment in capital assets 107,260,715 72,961,799 180,222,514 Restricted for:

Lighting and landscaping 252,636 252,636
Pension 4,598,424 2,413,333 7,011,757
Capital projects 13,606,934 13,606,934
Community services 1,640,382 1,640,382
Nonexpendable permanent endowments 200,000 200,000
Debt service 272,524 272,524
Streets and roads 776,817 776,817
Public safety 374,935 374,935
Housing 9,518,722 9,518,722
Unrestricted (20,363,742) 20,386,009 22,267
Total Net Position $ 104,531,413 $ 109,368,075 $ 213,899,488

CITY OF HEALDSBURG

STATEMENT OF NET POSITION
June 30, 2021
Primary Government
See Accompanying Notes to Basic Financial Statements
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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

STATEMENT OF ACTIVITIES
For the Fiscal Year Ended June 30, 2021
Program Revenues
Operating Capital
Charges for Grants and Grants and
Functions/Programs Expenses Services Contributions Contributions Governmental Activities:

General government $ 4,181,962 $ 1,737,558 $ 4,224 $-
Public safety 9,668,455 897,221 298,064
Streets and roads 5,056,824 441,801 608,447 982,388
Community development 1,099,864 108,121 873,959 812
Community services 3,655,094 616,717 490,292 249,768
Interest and fiscal charges 258,000
Unallocated depreciation 2,426,750
Total Governmental Activities 26,346,949 3,801,418 2,274,986 1,232,968 Business-type Activities:

Water 5,489,695 8,181,392
Sewer 9,212,612 10,064,684
Electric 13,594,946 14,485,551
Airport 419,697 314,871 97,589
Total Business-type Activities 28,716,950 33,046,498 97,589 Total Primary Government $ 55,063,899 $ 36,847,916 $ 2,274,986 $ 1,330,557 General Revenues:

Taxes:

Transient occupancy taxes
Sales taxes
Property taxes
Franchise taxes
Business license
Motor vehicle in lieu, unrestricted
Use of money and property
Miscellaneous
Transfers
Total General Revenues and Transfers
Change in Net Position
Net Position - Beginning of Fiscal Year
Prior Period Adjustments
Net Position - Beginning of Fiscal Year, Restated
Net Position - End of Fiscal Year
See Accompanying Notes to Basic Financial Statements
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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21) Governmental Business-type
Activities Activities Total
$ (2,440,180) $- $ (2,440,180)
(8,473,170) (8,473,170)
(3,024,188) (3,024,188)
(116,972) (116,972)
(2,298,317) (2,298,317)
(258,000) (258,000)
(2,426,750) (2,426,750)
(19,037,577) (19,037,577)
2,691,697 2,691,697
852,072 852,072
890,605 890,605
(7,237) (7,237)
4,427,137 4,427,137
(19,037,577) 4,427,137 (14,610,440)
4,750,888 4,750,888
8,069,870 8,069,870
3,030,458 3,030,458
604,013 604,013
314,307 314,307
1,570,322 1,570,322
823,296 364,392 1,187,688
5,979,537 5,979,537
2,580,555 (2,580,555)
27,723,246 (2,216,163) 25,507,083
8,685,669 2,210,974 10,896,643
95,368,409 107,402,623 202,771,032
477,335 (245,522) 231,813
95,845,744 107,157,101 203,002,845
$ 104,531,413$ 109,368,075$ 213,899,488

Net (Expenses) Revenues
and Changes in Net Position
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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21) Nonmajor Total
Governmental Governmental
General Streets Funds Funds
ASSETS:

Cash and investments $ 3,540,298 $ 674,813 $- $ 2,462,438 $ 6,677,549 Cash and investments with fiscal agents 731,533 731,533 Pension stabilization investments 5,006,915 493,645 192,183 5,692,743 Receivables:

Accounts and taxes 1,321,745 933,645 29,954 149,461 2,434,805 Interest 6,268 1,447 420 2,261 10,396
Intergovernmental 1,836,978 135,359 386,399 40,840 2,399,576 Due from other funds 1,197,829 1,197,829
Loans and notes receivable 481,063 53,245 8,263,545 8,797,853 Deposits 947,429 947,429
Inventory 8,569 8,569
Prepaid expenditures 21,172 21,172
Total Assets $ 14,359,697 $ 2,238,909 $ 670,770 $ 11,650,078 $ 28,919,454

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES
Liabilities:

Accounts payable and accrued liabilities $ 356,788 $ 153,291 $ 524,732 $ 199,666 $ 1,234,477 Due to other funds 2,719,512 625,000 119,236 170,431 3,634,179 Deposits payable 1,299,583 18,491 69,728 100 1,387,902
Retention payable 294,562 294,562
Total Liabilities 4,375,883 796,782 1,008,258 370,197 6,551,120 Deferred inflows of resources:

Unavailable revenue - interest 1,501,045 1,501,045
Unavailable revenue 168,330 53,300 221,630
Total deferred inflows of resources 168,330 1,554,345 1,722,675 Fund balances
Nonspendable:

Prepaid expenditures 21,172 21,172
Inventory 8,569 8,569
Legally/Contractually required to be
maintained intact 200,000 200,000
Restricted 6,651,608 1,273,797 9,102,309 17,027,714
Committed 436,565 436,565
Assigned 23,064 23,064
Unassigned 3,287,970 (346,057) (13,338) 2,928,575
Total Fund Balances 9,983,814 1,273,797 (337,488) 9,725,536 20,645,659 Total Liabilities, Deferred Inflows of
Resources, and Fund Balances $ 14,359,697 $ 2,238,909 $ 670,770 $ 11,650,078 $ 28,919,454

CITY OF HEALDSBURG

BALANCE SHEET

GOVERNMENTAL FUNDS
June 30, 2021
Community
Services
Special
Revenue Fund
Capital Projects
Fund
See Accompanying Notes to Basic Financial Statements
18 6.A.a
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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21) Fund balances for governmental funds $ 20,645,659
Amounts reported for governmental activities in the Statement of Net Position are different from those reported in the Governmental Funds because of the following:

Capital assets used in Governmental Activities are not current resources and, therefore, are not reported in the Governmental Funds Balance Sheet.

Capital assets $ 134,275,558
Less: accumulated depreciation (31,808,373) 102,467,185 Long-term debt liabilities, including bonds payable and interest payable, are not due and payable in the current period and therefore are not reported in the funds.

Pension obligation bond (1,094,319)
Capital leases payable (1,274,207)
Net pension liability (28,196,885)
Loan payable (1,480,975)
OPEB liability (1,069,929) (33,116,315)
Intergovernmental receivables which are not financial resources but are revenues under the full accrual method. 221,630
Internal service funds are used by management to charge the costs of certain activities, such as insurance and vehicle maintenance, to individual funds. The assets and liabilities of the internal service funds are included in governmental activities in the statement of net position. 8,318,639 Deferred outflows and inflows of resources relating to pensions: In governmental funds, deferred outflows and inflows of resources relating to pensions are not reported because they are applicable to future periods.

In the statement of net position, deferred outflows and inflows of resources relating to pensions are reported.

Deferred outflows of resources relating to pensions 5,265,801 Deferred inflows of resources relating to pensions (910,659) 4,355,142 Deferred outflows and inflows of resources relating to OPEB: In governmental funds, deferred outflows and inflows of resources relating to OPEB are not reported because they are applicable to future periods.

In the statement of net OPEB, deferred outflows and inflows of resources relating to OPEB are reported.

Deferred inflows of resources relating to OPEB (37,882) Deferred outflows of resources relating to OPEB 176,310 138,428 Interest on Long-term notes receivable are offset by deferred inflows in the governmental funds as they do not represent financial resources. 1,501,045
Net position of governmental activities $ 104,531,413

CITY OF HEALDSBURG

RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS

TO THE STATEMENT OF NET POSITION
June 30, 2021
See Accompanying Notes to Basic Financial Statements
19 6.A.a
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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21) Total
Governmental
General Streets Funds

REVENUES
Property taxes $ 4,600,749 $- $- $ 192,214 $ 4,792,963
Sales and other taxes 9,757,061 3,546,602 121,108 13,424,771 Development fees 134,748 142,609 422,681 109,421 809,459 Intergovernmental 292,602 256,445 805,290 745,865 2,100,202 Fines and forfeitures 34,892 34,892
Licenses and permits 1,628,977 3,070 1,632,047
Use of money and property 823,295 56,585 24,615 119,159 1,023,654 Charges for services 1,146,609 471,038 17,820 3,860 1,639,327 Other, donations, and reimbursements 356,705 506,112 264,510 345,164 1,472,491 Total Revenues 18,775,638 4,982,461 1,656,024 1,515,683 26,929,806

EXPENDITURES
Current:

General government 3,958,060 3,958,060
Public safety 10,191,803 60,503 10,252,306
Streets and roads 5,370,954 1,881 5,372,835
Community development 530,047 727,772 1,257,819
Community services 4,610,384 617 4,611,001
Debt service:

Principal retirement 722,230 722,230
Interest and fiscal charges 258,000 258,000
Total Expenditures 14,679,910 4,610,384 5,370,954 1,771,003 26,432,251 Excess of Revenues over
(under) Expenditures 4,095,728 372,077 (3,714,930) (255,320) 497,555

OTHER FINANCING SOURCES (USES)
Transfers in 845,022 828,114 4,235,067 776,531 6,684,734 Transfers out (2,224,207) (491,394) (203,131) (1,249,302) (4,168,034) Total Other Financing
Sources (Uses) (1,379,185) 336,720 4,031,936 (472,771) 2,516,700 Net Change in Fund Balances 2,716,543 708,797 317,006 (728,091) 3,014,255 Fund Balances (deficit), Beginning of
Fiscal Year 7,267,271 565,000 (654,494) 10,221,814 17,399,591 Prior Period Adjustments 231,813 231,813
Fund Balances (deficit), Beginning of
Fiscal Year (restated) 7,267,271 565,000 (654,494) 10,453,627 17,631,404 Fund Balances (deficit), End of Fiscal Year $ 9,983,814 $ 1,273,797 $ (337,488) $ 9,725,536 $ 20,645,659 Funds
Governmental
Nonmajor
Services

CITY OF HEALDSBURG

STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES

GOVERNMENTAL FUNDS
For the Fiscal Year Ended June 30, 2021
Community
Special Revenue
Fund
Capital Projects
Fund
See Accompanying Notes to Basic Financial Statements
20 6.A.a
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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21) Net change in fund balances - total governmental funds $ 3,014,255 Amounts reported for governmental activities in the statement of activities are different because:

Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of these assets is allocated over their estimated useful lives and reported as depreciation expense. The amount by which capital outlay exceeded depreciation in the current period as follows:

Capital outlay $9,856,950
Depreciation (2,426,750) 7,430,200
In governmental funds, repayments of long-term debt are reported as expenditures.

In the government-wide statements, repayments of long-term debt are reported as reductions of liabilities. 722,230
Other postemployment benefits reported in the governmental funds includes cash payments made into the trust fund and payments on behalf of retirees. In the Statement of Activities, OPEB expense includes the change in the net OPEB liability, and related change in OPEB amounts for deferred outflows of resources and deferred inflows of resources. (84,872)
Internal service funds are used by management to charge the costs of certain activities, such as insurance and vehicle maintenance, to individual funds. The net revenue (expense) of the internal service funds is reported with governmental activities. (269,364)
In governmental funds, pension costs are recognized when employer contributions are made.

In the statement of activities, pension costs are recognized on the accrual basis. This fiscal year, the difference between accrual-basis pension costs and actual employer contributions was: (2,191,680) Some revenues reported in the Statement of Activities are not considered available to finance current expenditures and therefore are not reported as revenues in the governmental funds. 64,900 Change in net position of governmental activities $ 8,685,669 For the Fiscal Year Ended June 30, 2021

CITY OF HEALDSBURG

RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,

AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS

TO THE STATEMENT OF ACTIVITIES
See Accompanying Notes to Basic Financial Statements
21 6.A.a
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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21) Water Sewer Electric Non-major
Fund Fund Fund Airport Fund
ASSETS
Current Assets:

Cash and investments $ 4,796,270 $ 6,500,533 $ 18,843,474 $ 226,174 Cash and investments with fiscal agents 2
Pension stabilization investments 576,528 845,220 991,585 Investment in NCPA Reserves 5,963,403
Accounts receivable 1,047,712 1,287,772 2,087,488 7,429 Loans and notes receivable
Interest receivable 4,797 8,340 19,525 237
Inventory 65,007 20,797 1,465,167 31,122
Due from other funds 2,519,645 1,374,756
Prepaid items 1,033 10,700
Total Current Assets 6,491,347 11,182,309 30,756,098 264,962 Noncurrent Assets:

Capital assets
Land 310,781 766,902 48,360 119,834
Construction in progress 2,362,939 395,409 948,608 3
Depreciable buildings and improvements, net 266,846 52,468 20,833 498,884 Depreciable utility systems, net 20,964,449 57,124,688 13,273,428 Depreciable operations, net 2,843,045
Depreciable equipment, net 308,321 671,167 426,480
Total Noncurrent Assets 24,213,336 59,010,634 14,717,709 3,461,766 Total Assets 30,704,683 70,192,943 45,473,807 3,726,728 Deferred Outflows of Resources:

Deferred loss on debt refunding 766,356
OPEB related 24,683 1,763 24,683
Pension related 669,496 669,496 926,994
Total deferred outflows of resources 694,179 1,437,615 951,677

LIABILITIES
Current Liabilities:

Accounts payable and accrued liabilities 158,948 36,184 299,750 13,898 Due to other funds 1,159,889
Deposits payable 12,940 1,100 119,407 16,155
Retentions payable 107,820 4,382
Bonds payable - current 775,508 1,175,133 117,244
Loan payable - current 118,696
Capital lease payable - current
Interest payable 68,283 190,038 4,223
Compensated absences
Total Current Liabilities 1,123,499 2,562,344 663,702 30,053 Noncurrent Liabilities
Bonds payable 5,746,339 20,238,586 126,294
Loan payable 1,570,322
Claims payable
OPEB 149,790 10,699 149,790
Net pension liability 3,275,806 3,275,806 4,535,731
Compensated absences
Total Noncurrent Liabilities 9,171,935 23,525,091 6,382,137 Total Liabilities 10,295,434 26,087,435 7,045,839 30,053 Deferred Inflows of Resources:

OPEB related 5,304 379 5,304
Pension related 101,580 101,580 140,649
Total deferred inflows of resources 106,884 101,959 145,953

NET POSITION
Net investment in capital assets 17,623,206 37,406,879 14,469,948 3,461,766 Restricted 2,970,404 6,873,380 6,176,483
Unrestricted 402,934 1,160,905 18,587,261 234,909
Total Net Position $ 20,996,544 $ 45,441,164 $ 39,233,692 $ 3,696,675

CITY OF HEALDSBURG

STATEMENT OF NET POSITION

PROPRIETARY FUNDS
June 30, 2021
Enterprise Funds
See Accompanying Notes to Basic Financial Statements
22 6.A.a
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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21) Governmental
Activities
Internal
Totals Service Funds
$ 30,366,451 $ 5,994,102
2 2,413,333
5,963,403
4,430,401 58,481
7,627
32,899 5,576
1,582,093 7,489
3,894,401
11,733 16,497
48,694,716 6,089,772
1,245,877
3,706,959
839,031 2,266,227
91,362,565
2,843,045
1,405,968 3,823,575
101,403,445 6,089,802
150,098,161 12,179,574
766,356
51,129
2,265,986
3,083,471
508,780 561,951
1,159,889 298,162
149,602 30,000
112,202
2,067,885
118,696
22,065
262,544
716,822
4,379,598 1,766,942
26,111,219
1,570,322
303,692
310,279
11,087,343
1,790,301
39,079,163 2,093,993
43,458,761 3,860,935
10,987
343,809
354,796
72,961,799 6,067,737
16,020,267
20,386,009 2,250,902
$ 109,368,075 $ 8,318,639

23 6.A.a
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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21) Water Sewer Electric Non-major
Fund Fund Fund Airport Fund

OPERATING REVENUES
Charges for services $ 6,059,350 $ 7,746,043 $ 12,613,485 $ 151,802 Development fees 225,573 431,289 87,433
Rental income 142,738
Intergovernmental 44,552 139 2,610 97,589
Other 1,851,917 1,887,213 1,782,023 20,331
Total Operating Revenues 8,181,392 10,064,684 14,485,551 412,460

OPERATING EXPENSES
Purchase of power 3,782,712
Salaries and benefits 2,432,680 3,057,487 2,915,007 30,055 Maintenance and operations 1,216,319 1,936,471 5,002,310 188,435 Administration 855,419 1,202,431 1,364,753 83,867
Depreciation 692,993 2,212,356 507,933 117,340
Total Operating Expenses 5,197,411 8,408,745 13,572,715 419,697 Operating Income (loss) 2,983,981 1,655,939 912,836 (7,237)

NON-OPERATING REVENUES (EXPENSES)
Investment income (loss) 68,139 69,439 225,954 860
Interest expense (292,284) (803,867) (22,231)
Total Non-operating Revenue (Expenses) (224,145) (734,428) 203,723 860 NET INCOME (LOSS) BEFORE TRANSFERS 2,759,836 921,511 1,116,559 (6,377)

TRANSFERS
Transfers in 1,707,002 324,796 780,800 56,500
Transfers out (512,238) (3,961,561) (918,259) (57,595)
Total Transfers 1,194,764 (3,636,765) (137,459) (1,095) Change in Net Position 3,954,600 (2,715,254) 979,100 (7,472) Net Position, Beginning of Fiscal Year 17,160,472 48,164,884 38,373,120 3,704,147 Prior Period Adjustments (118,528) (8,466) (118,528)
Net Position, Beginning of Fiscal Year, restated 17,041,944 48,156,418 38,254,592 3,704,147 Net Position, End of Fiscal Year $ 20,996,544 $ 45,441,164 $ 39,233,692 $ 3,696,675

CITY OF HEALDSBURG

STATEMENT OF REVENUES,

EXPENSES, AND CHANGES IN NET POSITION

PROPRIETARY FUNDS
For the Fiscal Year Ended June 30, 2021
Enterprise Funds
See Accompanying Notes to Basic Financial Statements
24 6.A.a
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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21) Governmental
Activities
Internal
Totals Service Funds
$ 26,570,680 $ 5,129,854
744,295
142,738
144,890
5,541,484 15,310
33,144,087 5,145,164
3,782,712
8,435,229 2,195,446
8,343,535 1,959,156
3,506,470 441,217
3,530,622 1,118,137
27,598,568 5,713,956
5,545,519 (568,792)
364,392 235,573
(1,118,382)
(753,990) 235,573
4,791,529 (333,219)
2,869,098 130,000
(5,449,653) (66,145)
(2,580,555) 63,855
2,210,974 (269,364)
107,402,623 8,588,003
(245,522)
107,157,101 8,588,003
$ 109,368,075 $ 8,318,639

25 6.A.a
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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21) Water Sewer Electric Non-major
Fund Fund Fund Airport Fund

CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers $ 6,363,871 $ 8,055,814 $ 12,520,545 $ 391,491 Receipts from other operating activities 1,851,917 1,887,213 1,782,023 20,331 Payments to suppliers (1,830,668) (3,546,811) (10,634,562) (299,125) Payments to employees (2,273,858) (2,909,699) (2,699,669) (30,055) Net Cash Provided by Operating Activities 4,111,262 3,486,517 968,337 82,642

CASH FLOWS FROM NON-CAPITAL AND RELATED

FINANCING ACTIVITIES
Interfund borrowing 113,313 113,313
Transfers in 1,707,002 324,796 780,800 56,500
Transfers out (512,238) (3,961,561) (918,259) (57,595)
Principal payment on debt (Pension obligation bonds) (82,042) (82,265) (227,077) Loans repaid (issued)
Net Cash Provided for (Used by) Non-Capital and
Related Financing Activities 1,112,722 (3,605,717) (251,223) (1,095)

CASH FLOWS FROM CAPITAL AND RELATED

FINANCING ACTIVITIES
Payments for capital lease
Principal payments on debt (656,000) (1,015,000)
Interest paid (299,108) (790,660) (22,527)
Acquisition and construction of capital assets (4,941,720) (2,342,524) (735,549) (18,424) Net Cash Used by Capital and Related Financing Activities (5,896,828) (4,148,184) (758,076) (18,424)

CASH FLOWS FROM INVESTING ACTIVITIES
Investment income 81,386 98,842 270,996 1,160
Net Cash Provided by Investing Activities 81,386 98,842 270,996 1,160 Increase (Decrease) in cash and cash equivalents (591,458) (4,168,542) 230,034 64,283 Cash and Cash Equivalents, Beginning of Fiscal Year 5,964,256 11,514,297 25,568,428 161,891 Cash and Cash Equivalents, End of Fiscal Year $ 5,372,798 $ 7,345,755 $ 25,798,462 $ 226,174

RECONCILIATION OF CASH AND CASH EQUIVALENTS
Cash and investments $ 4,796,270 $ 6,500,533 $ 18,843,474 $ 226,174 Cash and investments with fiscal agents 2
Pension stabilization investments 576,528 845,220 991,585 Investment in NCPA Reserves 5,963,403
Total Cash and Cash Equivalents $ 5,372,798 $ 7,345,755 $ 25,798,462 $ 226,174

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

Operating income (loss) $ 2,983,981 $ 1,655,939 $ 912,836 $ (7,237) Adjustments to reconcile operating income (loss) to
net cash provided by operating activities:

Depreciation 692,993 2,212,356 507,933 117,340
Changes in assets and liabilities:
(Increase) decrease in accounts receivables 34,396 (121,657) (182,983) (638) (Increase) decrease in inventory 9,926 3,477 (164,171) (16,569) (Increase) decrease in prepaid items 1,339 3,176 (10,700) (Increase) decrease in deferred outflows of resources - OPEB related 1,714 122 1,714 (Increase) decrease in deferred outflows of resources - pension related (50,239) (50,239) (69,561) Increase (decrease) in accounts payable
and accrued liabilities 115,979 (415,532) (237,332) (1,244) Increase (decrease) in deposits payable 6,006 970 22,140 (343) Increase (decrease) in retention payable 107,820 (94,724) (8,667) Increase (decrease) in claims payable
Increase (decrease) in OPEB 10,918 780 10,918
Increase (decrease) in net pension liabilitity 229,634 229,634 317,955 Increase (decrease) in compensated absences
Increase (decrease) in deferred inflows of resources - OPEB related (749) (53) (749) Increase (decrease) in deferred inflows of resources - pension related (32,456) (32,456) (44,939) Net Cash Provided by Operating Activities $ 4,111,262 $ 3,486,517 $ 968,337 $ 82,642

NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES
Amortization related to deferred loss on debt refunding $ - $ 54,740 $ - -$ Amortization of bond premium - 31,384 - -

CITY OF HEALDSBURG

STATEMENT OF CASH FLOWS

PROPRIETARY FUNDS
For the Fiscal Year Ended June 30, 2021
Enterprise Funds
See Accompanying Notes to Basic Financial Statements
26 6.A.a
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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21) Governmental
Activities
Internal
Totals Service Funds
$ 27,331,721 $ 5,399,542
5,541,484 15,310
(16,311,166) (2,554,980)
(7,913,281) (1,961,494)
8,648,758 898,378
226,626 298,162
2,869,098 130,000
(5,449,653) (66,145)
(391,384)
(841)
(2,745,313) 361,176
(233,781)
(1,671,000)
(1,112,295)
(8,038,217) (1,122,207)
(10,821,512) (1,355,988)
452,384 241,184
452,384 241,184
(4,465,683) 144,750
43,208,872 5,849,352
$ 38,743,189 $ 5,994,102
$ 30,366,451 $ 5,994,102
2 2,413,333
5,963,403
$ 38,743,189 $ 5,994,102
$ 5,545,519 $ (568,792)
3,530,622 1,118,137
(270,882) 283,556
(167,337) 2,224
(6,185) (14,787)
3,550
(170,039)
(538,129) (52,179)
28,773
4,429
(133,733)
22,616
777,223 30,000
233,952
(1,551)
(109,851)
$ 8,648,758 $ 898,378
$ - $ -
- -
27 6.A.a
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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21) Fiduciary Funds
ASSETS
Cash and investments $ 3,476,826
Cash and investments with fiscal agents 2,517,696
Interest receivable 3,515
Loans and notes receivable 3,273,167
Capital assets, net of depreciation 528,300
Total Assets 9,799,504

LIABILITIES
Accounts payable 106
Interest payable 650,824
Noncurrent liabilities
Due within one year 2,379,421
Due in more than one year 37,060,071
Total Liabilities 40,090,422

NET POSITION
Net position held in trust $ (30,290,918)

CITY OF HEALDSBURG

FIDUCIARY FUNDS
June 30, 2021

STATEMENT OF NET POSITION
See Accompanying Notes to Basic Financial Statements
28 6.A.a
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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21) Fiduciary Funds
Additions
Property taxes $ 1,567,616
Use of money and property 120,540
Total Revenues 1,688,156
Deductions
Community development 307,422
Interest expense 1,412,801
Total Deductions 1,720,223
Change in Net Position (32,067)
Net Position, beginning (30,027,038)
Net Position, ending $ (30,290,918)

CITY OF HEALDSBURG

STATEMENT OF CHANGES IN NET POSITION

FIDUCIARY FUNDS
For the Fiscal Year Ended June 30, 2021
See Accompanying Notes to Basic Financial Statements
29 6.A.a
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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

NOTES TO THE BASIC FINANCIAL STATEMENTS

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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
Note 1 Summary of Significant Accounting Policies
The financial statements of the City of Healdsburg (City) have been prepared in conformity with accounting principles generally accepted in the United States of America (USGAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standardsetting body for establishing governmental accounting and financial reporting principles. The more significant of the government’s accounting policies are described below.

A. Reporting Entity
The basic financial statements of the City of Healdsburg (City) include the financial activities of the City and its component unit: the Healdsburg Public Financing Authority (HPFA).

The criteria used in determining the scope of the reporting entity are based on the provisions of Governmental Accounting Standards Board Statement (GASB) No.14 as amended by GASB No. 39, No. 61 and No. 80. The City of Healdsburg is the primary government unit. Component units are those entities which are financially accountable to the primary government, either because the City appoints a voting majority of the component units’ Board or because the component unit will provide a financial benefit or impose a financial burden on the City.

The component unit has been accounted for as a “blended” component unit of the City. Despite being legally separate, the HPFA is so intertwined with the City that it is, in substance, part of the City’s operations. Accordingly, the balances and transactions of this component unit are reported within the funds of the City. HPFA transactions are recorded in the Sewer Enterprise Fund. The following criteria were used in determining that the component unit was blended:

The members of the City Council or other members appointed by the City Council act as governing body of the HPFA. In addition, the HPFA provide services, which benefit the City. No separate financial statements are issued for HPFA.

The City participates in one joint power activity and one pooled arrangement through formally organized and separate entities. The financial activities of the Northern California Power Agency and the Redwood Empire Municipal Insurance Fund are not included in the accompanying basic financial statements as they are administered by boards separate from and independent of the City.

The government-wide financial statements (i.e. the statement of net position and the statement of activities) report information on all of the nonfiduciary activities of the primary government and its component units. Certain eliminations have been made as prescribed by GASB Statement No. 34 regarding interfund activities, payables, and receivables. All internal balances in the Statement of Net Position have been eliminated except those representing balances between the governmental activities and the business-type activities, which are presented as internal balances. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and grant and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues.
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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
Note 1 Summary of Significant Accounting Policies (Continued) B. Government-wide and Fund Financial Statement
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.

Separate financial statements are provided for governmental funds, the proprietary fund, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds are reported as separate columns in the fund financial statements.

C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information about the reporting government as a whole except for its fiduciary activities. 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 (including its blended component units) is reported separately from discretely presented component units for which the primary government is financially accountable. The City has no discretely presented component units. For the most part, the effect of interfund activity has been removed from these statements.

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. Taxes and other items not properly included among program revenues are reported instead as general revenues.

The fund financial statements provide information about the City’s funds, including fiduciary funds and blended component units. Separate statements for each fund category – governmental, proprietary, and fiduciary – are presented. The emphasis of fund financial statements is on major individual funds, each of which is displayed in a separate column. All remaining governmental funds are aggregated and reported as nonmajor funds.

Proprietary fund financial statements include a Statement of Net Position, a Statement of Revenues, Expenses, and Changes in Net Position, and a Statement of Cash Flows for all proprietary funds.

Internal service funds are also presented in these statements. Internal service balances and activities have been allocated between governmental activities and business-type activities in the government-wide financial statements. These internal service funds account for charges to other funds and departments for insurance, maintenance, and information services.

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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
Note 1 Summary of Significant Accounting Policies (Continued) C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued) The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund financial statements and fiduciary fund statements. Under the economic resources measurement focus, all assets and liabilities (whether current or noncurrent) associated with their activity are included on their balance sheets. Operating statements present increases (revenues) and decreases (expenses) in total net position. Under the accrual basis of accounting, revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows.

Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. Nonexchange transactions, in which the City gives (or receives) value without directly receiving (or giving) equal value in exchange include property taxes, grants, entitlements, and donations. On the accrual basis, revenue from property taxes is recognized in the fiscal year in which the taxes are levied. Revenue from grants, entitlements, and donations are recognized in the fiscal year in which all the eligibility requirements have been satisfied.

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

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

Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under the current financial resources measurement focus, only current assets and current liabilities are generally included on their balance sheets. The reported fund balance (net current assets) is considered to be a measure of “available spendable resources”. Governmental fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Accordingly, they are said to present a summary of sources and uses of “available spendable resources” during a period. Noncurrent portions of long-term receivables due to governmental funds are reported on their balance sheets in spite of their spending measurement focus.

However, special reporting treatments are used to indicate that they should not be considered “available spendable resources” since they do not represent net current assets. Recognition of governmental fund type revenue represented by noncurrent receivables is deferred until they become current receivables.

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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
Note 1 Summary of Significant Accounting Policies (Continued) C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued) Under the modified accrual basis of accounting, revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, except for principal and interest on long-term liabilities, claims payable, and compensated absences which are recognized as expenditures to the extent they have matured.

Capital asset acquisitions are reported as expenditures in governmental funds and proceeds of longterm liabilities are reported as other financing sources.

Property taxes, sales 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.

Fiduciary funds focus on net position and changes in net position. Trust funds use the flow of economic resources measurement focus and the accrual basis of accounting, except for the recognition of certain liabilities of defined benefit pension plans. Agency funds also use the accrual basis of accounting, but, since they are custodial in nature and do not involve the measurement of results of operations, they do not have a measurement focus. The City has no agency funds.

Fund Classifications - The funds designated as major funds are determined by a mathematical calculation consistent with GASB Statement No. 34.

Major Governmental Funds
The General Fund is the primary operating fund of the City. It is used to account for all revenues and expenditures that are not required to be accounted for in another fund.

The Community Services Special Revenue Fund accounts for Transient Occupancy Tax funds received that are restricted for community services.

The Street Capital Project Fund accounts for the acquisition and construction of major streets and roads capital projects throughout the City.

Major Enterprise Funds
The Water Fund accounts for the activities of providing water utilities to the residents of the City.

The Sewer Fund accounts for the activities of providing sewer utilities to the residents of the City.

The Electric Fund accounts for the activities of the electric distribution operations. 3434

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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
Note 1 Summary of Significant Accounting Policies (Continued) C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued) The City’s fund structure includes the following fund types:

Governmental Fund Types
Special Revenue Funds are used to account for and report proceeds of specific revenue sources that are restricted or committed to expenditure for specified purposes other than debt service or capital projects. These funds are required by statute or ordinance to finance particular functions or activities of government.

Debt Service Funds are used to account for and report financial resources that are restricted, committed, or assigned to expenditures for principal, interest, and related costs on long-term obligations.

Capital Projects Funds are used to account for and report financial resources that are restricted, committed, or assigned to expenditures for capital outlays, including the acquisition or construction of capital facilities and other capital assets (other than those financed by proprietary funds and trust funds).

Permanent Funds are used to account for and report financial resources that are legally restricted to the extent that only earnings, and not principal, may be used for purposes that support City programs.

Proprietary Fund Types
Enterprise Funds are used to account for operations that are financed and operated in a manner similar to private business enterprises where the intent of the governing body is that the costs (expenses including depreciation) of providing goods or services to the general public on a continuing basis are financed or recovered primarily through user charges.

Internal Service Funds are used to account for the financing of special activities that provide services within the City. These activities include insurance and benefits, vehicle maintenance, information services, and building maintenance.

Fiduciary Fund Types
Private Purpose Trust Funds are used to report trust arrangements under which principal and income benefits to support private organizations or other governments.

Custodial Funds are used to account for assets held by the City as an agent for individuals, private organizations, or other governments.

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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
Note 1 Summary of Significant Accounting Policies (Continued) D. Assets, Deferred Outflows, Liabilities, Deferred Inflows, Net Position, or Equity Cash and Investments
The City pools idle cash from all funds for the purpose of increasing income through investment.

Earnings from such investments are allocated to the respective funds on the basis of applicable cash balances of each fund.

In compliance with the applicable State statute, the Statement of Investment Policy is adopted annually by the City Council. Investments authorized under the Investment Policy include:
• Local Agency Investment Fund (LAIF) – State of California Investment Pool • U.S. Treasury Obligations
• U.S. Government Agency Issues
• Certificates of Deposit
• Money Market Funds
The City adopted the provisions of Governmental Accounting Standards Board (GASB) Statement No. 31, “Accounting and Financial Reporting for Certain Investments and External Pools”, which require governmental entities to report certain investments at fair value in the balance sheet and recognize the corresponding change in the fair value of investments in the year in which the change occurred.

The City’s investments are carried at fair value which approximates cost. The fair value of equity and debt securities is determined based on sales prices or bid-and-asked quotations from SECregistered securities exchanges or NASDAQ dealers. LAIF determines the fair value of its portfolio quarterly and reports a factor to the City; the City applies that factor to convert its share of LAIF from amortized cost to fair value. Changes in fair value are allocated to each participating fund.

For purposes of the statement of cash flows for the proprietary fund, all highly liquid investments (including restricted assets) with a maturity of three months or less when purchased are considered cash equivalents.

Interfund Receivables and Payables
Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year is referred to as interfund receivables/interfund payables (i.e., the current portion of interfund loans) or advances to/from other funds (the noncurrent portion of interfund loans). All other outstanding balances between funds are reported as interfund receivables or interfund payables.

Encumbrances
Encumbrance accounting is employed as an extension of the budgetary process. This method records purchase orders, contracts, and other commitments for the expenditure of funds in order to reserve that portion of the applicable appropriation. The City Council honors encumbrances outstanding at fiscal year-end.
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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
Note 1 Summary of Significant Accounting Policies (Continued) D. Assets, Deferred Outflows, Liabilities, Deferred Inflows, Net Position, or Equity (Continued) Receivables and Payables
Advances between funds, as reported in the fund financial statements, are offset by a fund balance reserve account in the applicable governmental funds to indicate that they are not available for appropriation and are not expendable available financial resources.

All trade and tax receivables are shown net of an allowance for uncollectible accounts if applicable, and estimated refunds due.

Inventory
Inventory is valued at cost using the weighted average method. Inventory of the Enterprise Funds consists primarily of materials and supplies for utility operations.

Pensions
For purposes of measuring the net pension liability, deferred outflows and inflows of resources related to pensions, and pension expense, information about the fiduciary net position and additions to/deductions from the fiduciary net position have been determined on the same basis as they are reported by the CalPERS Financial Office. 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.

Other Postemployment Benefits (OPEB)
For purposes of measuring the total OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, generally accepted accounting principles require that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used: June 30, 2021 Valuation Date, June 30, 2021 Measurement Date, July 1, 2020 through June 30, 2021 Measurement Period. Investments are reported at fair value.

Property Taxes
Property Tax Levy, Collection and Maximum Rates - The State of California (State) Constitution Article XIII A provides that the combined maximum property tax rate on any given property may not exceed one percent of its assessed value unless an additional amount for general obligation debt has been approved by voters.

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CITY OF HEALDSBURG

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
Note 1 Summary of Significant Accounting Policies (Continued) D. Assets, Deferred Outflows, Liabilities, Deferred Inflows, Net Position, or Equity (Continued) Property Taxes (Continued)
Assessed value is calculated at 100 percent of market value as defined by Article XIII A and may be adjusted by no more than two percent per year unless the property is sold or transferred. The State Legislature has determined the method of distribution of receipts from a one percent tax levy among the counties, cities, school districts, and other districts.

Sonoma County assesses properties, bills for, and collects secured and unsecured property taxes as follows:

Secured Unsecured
Lien dates January 1 January 1
Levy dates July 1 July 1
Due dates 50% on November 1, 50% on February 1 July 1
Delinquent as of December 10 (for Nov.), April 10 (for Feb.) August 31 The term “unsecured” refers to taxes on personal property. These taxes are secured by liens on the property being taxed. The City accrues only those taxes, which are levied for the tax year and received within sixty days after fiscal year-end.

Property Tax Administration Fees – The State of California FY 1990-91 Budget Act authorized counties to collect an administrative fee for collection and distribution of property taxes. Property taxes are recorded as net of administrative fees withheld during the fiscal year.

Claims Payable
The City reports its risk activities in the Insurance and Benefit Service Fund for its workers compensation and Building Maintenance Fund for its general liability. When it is probable that a claim liability has been incurred at fiscal year-end, and the amount of the loss can be reasonably estimated, the City records the estimated loss, net of any insurance coverage under its self-insurance program. Estimated claims losses, if any, include an accrual for IBNR (“incurred but not reported”) claims. Small dollar claims are recorded as expenditures when paid.

Prepaid Items
Payments to vendors that reflect costs applicable to future accounting periods are recorded as prepaid items in both government-wide and fund financial statements.

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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
Note 1 Summary of Significant Accounting Policies (Continued) D. Assets, Deferred Outflows, Liabilities, Deferred Inflows, Net Position, or Equity (Continued) Capital Assets
Capital Assets (including infrastructure) are recorded at cost where historical records are available and at an estimated original cost where no historical records exist. Donated capital assets received prior to the implementation of GASB Statement No. 72 were recorded at fair value on the date of donation. Donated capital assets received subsequent to the implementation of GASB Statement No. 72 are recorded at acquisition value as of the date received. Generally, capital asset purchases in excess of $5,000 are capitalized if they have an expected useful life of 3 years or more.

Capital assets include additions to public domain (infrastructure) including certain improvements such as pavement, curb and gutter, sidewalks, traffic control devices, bridges, and right-of-way corridors within the City.

Capital assets used in operations are depreciated over their estimated useful lives using the straightline method in the Government-wide Financial Statements and in the Fund Financial Statements of the Proprietary Funds. Depreciation is charged as an expense against operations and accumulated depreciation is reported on the statement of net position. The lives used for depreciation purposes of each capital asset class are:

Buildings 10 - 30 years
Improvements other than buildings 10 years
Water distribution lines 10 - 50 years
Vehicles 3 -7 years
Machinery and equipment 10 years
Office furniture, computers, and equipment 3 - 10 years Leased property 5 - 10 years
Infrastructure 50 years
Deferred Outflows/Inflows of Resources
In addition to assets, the statement of net position and balance sheet of governmental funds will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period and so will not be recognized as an outflow of resources (expense/ expenditure) until then. The City has three types of items that qualify for reporting in this category.

The first item is the deferred loss on debt refunding which is reported in the government-wide statement of net position and the proprietary fund statement of net position. A deferred loss on debt refunding results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. The second item is the deferred assets of the City’s pension plans investments as determined by California Public Employees’ Retirement System (CalPERS) in accordance with GASB Statement No. 68, which is reported in the government-wide statement of net position and the proprietary fund statement of net position. The third item is the deferred inflows/outflows associated with the City’s OPEB plan in accordance with GASB Statement No. 75, which is reported in the government-wide statement of net position. Please see the accompanying Notes to the financial statements for more details on these amounts. 3939

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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
Note 1 Summary of Significant Accounting Policies (Continued) D. Assets, Deferred Outflows, Liabilities, Deferred Inflows, Net Position, or Equity (Continued) Deferred Outflows/Inflows of Resources (Continued)
In addition to liabilities, the statement of net position and balance sheet of governmental funds will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period and so will not be recognized as an inflow of resources (revenue) until that time. Please see the accompanying Notes to the financial statements for more details on these amounts.

Under the modified accrual basis of accounting, it is not enough that revenue has been earned if it is to be recognized as revenue of the current period. Revenue must also be susceptible to accrual; it must be both measurable and available to finance expenditures of the current fiscal period. If assets are recognized in connection with a transaction, but those assets are not yet available to finance expenditures of the current fiscal period, then the assets must be offset by a corresponding deferred inflow of resources. This type of deferred inflow is unique to governmental funds, since it is tied to the modified accrual basis of accounting, which is used only in connection with governmental funds.

Compensated Absences
Vested Vacation and Sick Leave obligations are fully funded and recorded in the Insurance and Benefit Internal Service Fund as accrued compensated absences.

Long-Term Obligations
In the government-wide financial statements, and proprietary type in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position.

Bonds payable are reported net of the applicable bond premium or discount. Amortization of bond premiums and discounts are included in interest expense. Debt from direct placements and direct borrowings are disclosed as such in the notes to the financial statements.

In the fund financial statements, governmental fund types recognize bond premiums and discounts during the period issued. The face amount of debt issued is reported as other financing sources.

Premiums received are reported as other financing sources, while discounts are reported as other financing uses.

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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
Note 1 Summary of Significant Accounting Policies (Continued) D. Assets, Deferred Outflows, Liabilities, Deferred Inflows, Net Position, or Equity (Continued) Net Position
GASB Statement No. 63 requires that the difference between assets added to the deferred outflows of resources and liabilities added to the deferred inflows of resources be reported as net position.

Net position is classified as either net investment in capital assets, restricted, or unrestricted.

In the government-wide financial statements, proprietary fund financial statements, and fiduciary fund financial statements, net position is reported in three categories: net investment in capital assets, restricted, and unrestricted. Net position that is net investment in capital assets consists of capital assets, net of accumulated depreciation, and reduced by the outstanding principal of related debt. Restricted net position represents the portion of net position that has external constraints placed on it by parties outside of the City, such as creditors, grantors, contributors, or laws and regulations of other governments, or through constitutional provisions or enabling legislation.

Unrestricted net position consists of net position that does not meet the definition of net investment in capital assets or restricted net position.

Fund Balance
Fund balance is divided into five classifications based primarily on the extent to which the City is bound to observe constraints imposed upon the use of the resources in the governmental funds. The classifications are as follows:

Nonspendable – The nonspendable fund balance category includes amounts that cannot be spent because they are not in spendable form, or legally or contractually required to be maintained intact.

The “not in spendable form” criterion includes items that are not expected to be converted to cash.

It also includes the long-term amount of interfund loans.

Restricted – Fund balance is reported as restricted when constraints placed on the use of resources are either externally imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments or is imposed by law through constitutional provisions or enabling legislation (City ordinances).

Enabling legislation authorizes the City to assess, levy, charge, or otherwise mandates payment of resources (from external resource providers) and includes a legally enforceable requirement that those resources be used only for the specific purposes stipulated in the legislation. Legal enforceability means that the City can be compelled by an external party-such as citizens, public interest groups, or the judiciary to use resources created by enabling legislation only for the purposes specified by the legislation.

Committed – The committed fund balance classification includes amounts that can be used only for the specific purposes imposed by formal action of the City Council, as resolutions and that remain binding unless removed in the same manner. The underlying action that imposed the limitation needs to occur no later than the close of the reporting period. In contrast to fund balance that is restricted by enabling legislation, committed fund balance classification may be 4141

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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
Note 1 Summary of Significant Accounting Policies (Continued) D. Assets, Deferred Outflows, Liabilities, Deferred Inflows, Net Position, or Equity (Continued) Fund Balance (Continued)
redeployed for other purposes with appropriate due process. Constraints imposed on the use of committed amounts are imposed by City Council, separate from the authorization to raise the underlying revenue; therefore, compliance with these constraints is not considered to be legally enforceable. Committed fund balance also incorporates contractual obligations to the extent that existing resources in the fund have been specifically committed for use in satisfying those contractual requirements.

Assigned – Amounts in the assigned fund balance classification are intended to be used by the City for specific purposes but do not meet the criteria to be classified as restricted or committed. In governmental funds other than the General Fund, assigned fund balance represents the remaining amount that is not restricted or committed. In the General Fund, assigned amounts represent intended uses established by City Council or a City official delegated that authority by City Charter or ordinance.

Unassigned – Unassigned fund balance is the residual classification for the General Fund and includes all spendable amounts not contained in the other classifications. In other governmental funds, the unassigned classification is used only to report a deficit balance resulting from overspending for specific purposes for which amounts had been restricted, committed, or assigned.

The City Council establishes, modifies or rescinds fund balance commitments and assignments by passage of a resolution. This is done through adoption of the budget and subsequent budget amendments that occur throughout the fiscal year.

The City’s policy is to apply restricted resources first when expenditures are incurred for purposes for which either restricted or unrestricted (committed, assigned, and unassigned) amounts are available.

Similarly, within unrestricted fund balance, committed amounts are reduced first followed by assigned, and then unassigned amounts when expenditures are incurred for purposes for which amounts in any of the unrestricted fund balance classifications could be used.

E. Estimates
The preparation of basic financial statements in conformity with accounting principles generally accepted in the United States of America requires 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 expenses/expenditures during the reporting period. Actual results could differ from those estimates.

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CITY OF HEALDSBURG

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
Note 1 Summary of Significant Accounting Policies (Continued) F. Future Accounting Pronouncements
Note 2 Stewardship, Compliance, and Accountability
A. Budgetary Control and Accounting

General Budget Policies:

The City Council reviews and adopts an annual budget for the General, Special Revenue, Debt Service, and Capital Projects Funds. The City Council holds public hearings and may modify the appropriations by general approval. Budgeted amounts may be transferred between departments with the City Manager’s approval. The legal level of expenditure control is at the fund level.

Operating appropriations lapse at the end of each fiscal year.

The budget is reported on the same basis as the fund types and on a basis consistent with accounting principles generally accepted in the United States of America. Additional appropriations or other changes during the fiscal year may be submitted by the department for Council review and approval.

GASB Statements listed below will be implemented in future financial statements:

Statement No. 87 "Leases" The provision of this statement is effective for fiscal years beginning after June 15, 2021.

Statement No. 89 "Accounting for Interest Cost Incurred before the End of a Construction Period"
The provision of this statement is effective for
fiscal years beginning after December 15, 2020.

Statement No. 91 "Conduit Debt Obligations" The provision of this statement is effective for fiscal years beginning after December 15, 2021.

Statement No. 92 "Omnibus 2020" The provision of this statement is effective for fiscal years beginning after June 15, 2021.

Statement No. 93 "Replacement of Interbank Offered Rates" The provision of this statement except for paragraphs 11b, 13, and 14 are effective for
fiscal years beginning after June 15, 2020.

Paragraph 11b is effective for fiscal years
beginning after December 31, 2021. Pragraphs
13 and 14 are effective for fiscal years beginning
after June 15, 2021.

Statement No. 94 "Public-Private and Public-Public Partnerships and Availability Payment Arrangements"
The provision of this statement is effective for
fiscal years beginning after June 15, 2022.

Statement No. 96 "Subscription-Based Information Technology Arrangements"
The provision of this statement is effective for
fiscal years beginning after June 15, 2022.

Statement No. 97 "Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section
457 Deferred Compensation Plans - an amendment of
GASB Statements No. 14 and No. 84, and a
supersession of GASB Statement No. 32"
The provision of this statement except for
paragrpahs 6-9 are effective for fiscal years
beginning after December 15, 2019. Paragraph
6-9 is effective for fiscal years beginning after
June 15, 2021.
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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
Note 2 Stewardship, Compliance, and Accountability (Continued) B. Excess Expenditures over Appropriations
Excess of expenditures over appropriations in individual funds are as follows:

C. Deficit Fund Balances
The North Area special revenue fund has a deficit fund balance of $13,338 that should be alleviated as additional development contributions and benefit assessments are received. The Streets capital projects fund has a deficit fund balance of $337,488 that should be alleviated as additional resources are made available from various sources both intergovernmental or from within the City.

Note 3 Cash and Investments
Cash and investments as of June 30, 2021 are classified in the accompanying financial statements as follows:

Final
Budget Expenditures Excess
Major Fund:

General fund:

Current:

Public safety 9,762,424$ 10,191,803$ 429,379$
Nonmajor Funds:

Gas Tax special revenue fund 1,881 1,881
Public Safety special revenue fund 50,000 60,503 10,503 Statement of net position:

Cash and investments 43,038,102 $
Restricted cash and investments with fiscal agents 731,535 Pension stabilization investments 8,106,076
Fiduciary funds:

Cash and investments 3,476,826
Restricted cash and investments with fiscal agents 2,517,696 Total cash and investments $ 57,870,235
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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
Note 3 Cash and Investments (Continued)
Cash and investments as of June 30, 2021 consist of the following:

The table below identifies the investment types that are authorized for the City of Healdsburg by the California Government Code (or the City’s investment policy, where more restrictive). The table also identifies certain provisions of the California Government Code (or the City’s investment policy, where more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustee that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California government Code or the City’s investment policy.

A. Investments Authorized by the California Government Code and the City’s Investment Policy Cash on hand $ 1,979
Deposits with financial institutions 7,613,556
Pension stabilization investments 8,106,076
Investments 42,148,624
Total cash and investments $ 57,870,235
Maximum Maximum
Maximum Percentage of Investment In
Authorized Investment Type Maturity Portfolio* One Issuer Bankers Acceptances 180 days 40% 10%
Certificates of Deposits 5 years 20% None
Negotiable Certificates of Deposit 5 years 30% None
Commercial Paper 270 days 25% 10%
State of California Local Agency
Investment Fund (State Pool) N/A Unlimited 75,000,000 $ Sonoma County Pooled Fund N/A 10% None
Medium Term Notes 5 years 30% None
Money Market Funds 90 days Unlimited None
Passbook Savings and Money
Market Accounts (Insured) None Unlimited None
U.S. Treasury Obligations None Unlimited None
U.S. Government Agency Issues None Unlimited None
Repurchase Agreements 30 days 10% None
Mortgage Pass-through and Asset
Backed Securities 5 years 20% None
* Excluding amounts held by bond trustee and the Pension Stabilization trustee that are not restricted by the California Government Code.
4545

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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
Note 3 Cash and Investments (Continued)
The investment policy allows for the above investments which have equal safety and liquidity as all other allowed investments. Maturity depends on the cash needs of the City.

B. Investments Authorized by Debt Agreements
Investment of debt proceeds held by bond trustees are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the City’s investment policy.

The table below identifies the Investment types that are authorized for investments held by bond trustee.

The table also identifies certain provisions of these debt agreements that address interest rate risk, credit risk, and concentration of credit risk.

C. Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the City manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations.

Maximum Maximum
Maximum Percentage of Investment In
Authorized Investment Type Maturity Portfolio One Issuer U.S. Treasury Obligations None None None
U.S. Government Sponsored
Enterprise Securities None None None
Bankers Acceptances 180 days 40% 10%
Commercial Paper 270 days 25% 10%
Money Market Funds N/A None None
Investment Contracts 30 years None None
Sonoma County Pooled Fund N/A 10% None
State of California Local Agency
Investment Fund (State Pool) N/A Unlimited 75,000,000 $ 4646

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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
Note 3 Cash and Investments (Continued)
Information about the sensitivity of the fair values of the City’s investments (including investments held by bond trustee) to market interest rate fluctuations is provided by the following table that shows the distribution of the City’s investments by maturity:

D. Investments with Fair Values Highly Sensitive to Interest Rate Fluctuations The City has no investments (including investments held by bond trustees) that are highly sensitive to interest rate fluctuations (to a greater degree than already indicated in the information provided above).

E. Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by (where applicable) the California Government Code, the City’s investment policy, or debt agreements, and the actual rating as of fiscal year end for each investment type.

12 Months 13 to 24 25-60 More Than
Totals or Less Months Months 60 Months
Certificates of Deposit $ 756,583 $ 756,583 $ - $ - -$
Federal Agency Securities 1,990,680 1,990,680
U.S. Treasury Securities 2,111,676 2,111,676
State Investment Pool 32,898,786 32,898,786
Medium Term Notes 1,141,668 1,141,668
Held by Fiscal Agents:

County Investment Pool 294,835 294,835
Money Market Mutual Funds 2,954,396 2,954,396
Total $ 42,148,624 $ 39,016,276 $ 1,141,668 $ 1,990,680 -$ Investment Type
Remaining maturity (in Months)
Minimum
Legal Not
Amount Rating AAA AA A Rated
Certificates of Deposit $ N/A 756,583 $ - $ - $ 756,583 - $ Federal Agency Securities 1,990,680 A 1,990,680
U.S. Treasury Securities 2,111,676 A 2,111,676
State Investment Pool 32,898,786 N/A 32,898,786
Medium Term Notes N/A 1,141,668 1,141,668
Held by Fiscal Agents:

County Investment Pool N/A 294,835 294,835
Money Market Mutual Funds 2,954,396 N/A 2,954,396
Total $ 42,148,624 $ 7,056,752 $ 1,141,668 -$ 33,950,204 $ Rating as of Fiscal Year End
Investment Type
4747

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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
Note 3 Cash and Investments (Continued)
F. Concentration of Credit Risk
The investment policy of the City contains limitations on the amount that can be invested in any one issuer. There are no investments in any one issuer (other than U.S. Treasury securities, mutual funds, and external investment pools) that represent 5% or more of total City investments. Since the City pooled all of its investments, there were no investments in any one issuer that represented 5% or more of total investments by reporting unit.

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

The City’s deposits with financial institutions in excess of federal depository insurance limits are legally required by the California Government Code, to be collateralized as noted above.

As of June 30, 2021, the City investments in the following investment types were held by the same broker-dealer (counterparty) that was used by the City to buy securities:

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

Amount
Certificates of deposit $ 756,583
Federal agency securities 1,990,680
U.S. Treasury securities 2,111,676
Medium term notes 1,141,668
Investment Type
4848

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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
Note 3 Cash and Investments (Continued)
I. Fair Value Measurement
The City categorizes its fair value measurements within the fair value hierarchy established by accounting principles generally accepted in the United States of America. These principles recognize a three-tiered fair value hierarchy, as follows:
 Level 1: Investments reflect prices quoted in active markets;  Level 2: Investments reflect prices that are based on a similar observable asset either directly or indirectly, which may include inputs in markets that are not considered active; and,  Level 3: Investments reflect prices based upon unobservable sources.

The City has the following recurring fair value measurements as of June 30, 2021:

The City also had investments in LAIF, money market mutual funds, and the Sonoma County Pool, however, these investments are not required to be measured under Level 1, 2 or 3.

J. Pension Stabilization Investment Program
Investments of funds held in the Pension Stabilization Investment Program are governed by the Investment Guidelines Document for the investment account and by the agreement for administrative services with the Public Agency Retirement Services (PARS), rather than the general provisions of the California Government Code or the City’s investment policy. The Pension Stabilization Investment Program’s investment policy is established and can be modified by the City. The goal of the Pension’s investment program is to provide a reasonable level of growth which, will result in sufficient assets to pay the present and future obligations of the City’s retirement Plan. The assets in this program will eventually be used to fund Pension Plan obligations for assets managed in the CalPERS Trust. The assets are also available to mitigate the potential negative impact of future rate hikes from CalPERS. The account’s risk tolerance has been rated moderately conservative, which demonstrates that the account can accept some price fluctuations to pursue its investment objectives.

Totals
Quoted Prices in
Active Markets
for Identical
Assets (Level 1)
Significant
Other
Observable
Inputs (Level 2)
Significant
Unobservable
Inputs (Level 3)
Medium term notes 1,141,668 $ $ - $ 1,141,668 $ -
Certificates of deposit 756,583 756,583
Debt Securities
U.S. Treasury securities 2,111,676 2,111,676
Federal agency securities 1,990,680 1,990,680
Total $ 6,000,607 $ 2,111,676 $ 3,888,931 $ -
Investments by fair value
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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
Note 3 Cash and Investments (Continued)
J. Pension Stabilization Investment Program (Continued) As for duration, the investment manager will maintain the portfolio duration within +/- 25% of the benchmark duration at all times. The benchmark duration is the BC Aggregate Bond benchmark. At June 30, 2021, the benchmark duration was 5.50, and the plan’s duration was 4.95. The target asset allocation of the portfolio is 20-40% to equity investments, 50-80% to fixed income investments, and 0- 20% to cash. Specifically identifiable investments are recorded by the Trustee in its records. All investments are either held by the counterparty or the counterparty’s trust department or agent, but not in the City’s name directly.

Pension volatility mitigation-contributions from the Fund can be either transferred to CalPERS or the City at the City’s discretion to offset fluctuations in the required annual contributions. Assets can be accessed anytime to fund the City’s pension obligations and defray reasonable expenses associated therewith.

The table below identifies the investment types that are authorized for investments held in the pension stabilization investment program. The table also identifies certain provisions of policy that address interest rate risk, credit risk, and concentration of credit risk.

Pension stabilization investments held and the percentage of the pension investment portfolio at June 30, 2021 was as follows:

Maximum
Investment
Mortgage-backed Securities 80%
Asset-back Securities 80%
Collateral Mortgage Obligations 80%
Commercial Mortgage-backed Securities 40%
U.S. Government Debt Obligations None
Corporate Debt Securities - U.S. or Foreign 80%
Eligible Instruments Issued Pursuant
to SEC Rule 144(a) 40%
Municipal Bonds 80%
Authorized Investment Type
Fair Value % of Portfolio
Equity Investments
iShares TR Core S&P 500 ETF $ 724,845 8.94%
iShares S&P 500 Value ETF 323,627 3.99%
iShares S&P 500 Growth ETF 283,938 3.50%
iShares Russell Mid Cap ETF 202,696 2.50%
iShares Russell 2000 Value ETF 197,764 2.44%
iShares Russell 2000 Growth ETF 198,235 2.45%
iShares MSCI EAFE ETF 354,387 4.37%
Vanguard FTSE Emerging Markets ETF 233,153 2.88%
Vanguard Real Estate ETF 92,629 1.14%
Fixed Income
Highmark Individual Fixed Income Strategy 5,416,257 66.82% Cash
First American Gov't Obligation Fund 78,545 0.97%
Total Pension Stabilization Investments $ 8,106,076 100% Pension Stabilization Investments
5050

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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
Note 3 Cash and Investments (Continued)
J. Pension Stabilization Investment Program (Continued) Information about the sensitivity of the fair values of the City’s pension stabilization investments to market interest rate fluctuations is provided by the following table that shows the distribution of the City’s investments by maturity:

Generally, credit risk is the risk that an issuer of an investment will not fulfil its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by (where applicable) the City’s pension stabilization investment policy and the actual rating, by Standard and Poor’s, as of fiscal year end for each investment type:

The pension stabilization investment policy of the City contains limitations on the amount that can be invested in any one issuer. Pension stabilization investments in any one issuer (other than U.S. Treasury securities, mutual funds, and external investment pools) that represent 5% or more of total City’s pension stabilization investments are as follows:

12 Months 13 to 24 25-60 More Than
Totals or Less Months Months 60 Months
U.S. Treasury Securities 1,221,141$ $ 152,226 $ 66,039 $ 193,095 809,781$ Money Market Mutual Funds 468,891 468,891
Federal Agency Securities 1,225,184 1,225,184
Municipal Bonds 26,867 26,867
Mutual Funds 2,611,275 2,611,275
Corporate Bonds 2,552,718 154,487 8,027 615,981 1,774,223 $ 8,106,076 $ 3,240,419 $ 220,526 $ 3,809,188 835,943 $ Investment Type
Remaining maturity (in Months)
Minimum
Legal Not
Amount Rating AAA AA A BBB Rated
U.S. Treasury Securities 1,221,141 $ BBB- 1,221,141 $ - $ -$ -$ -$ Money Market Mutual Funds 468,891 N/A 468,891
Federal Agency Securities 1,225,184 BBB- 1,225,184
Municipal Bonds BBB- 26,867 26,867
Mutual Funds 2,611,275 N/A 2,611,275
Corporate Bonds 2,552,718 BBB- 363,031 483,623 249,818 1,456,246 Total $ 8,106,076 $ 483,623 2,836,223 $ 249,818 $ 1,456,246 $ 3,080,166 $ Investment Type
Rating as of Fiscal Year End
Reported Interest
Amount Rate Maturity
FNMA/FHLMC US Government Agency Securities 1,225,184 $ 2.00% - 4.00% More than 60 Months Investment
Issuer Type
5151

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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
Note 3 Cash and Investments (Continued)
J. Pension Stabilization Investment Program (Continued) The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs.

The City’s pension stabilization investments have the following recurring fair value measurements as of June 30, 2021:

Note 4 Accounts Receivable
The following is a list of accounts receivable at June 30, 2021:

Totals
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
Significant
Other
Observable
Inputs (Level
2)
Significant
Unobservable
Inputs (Level 3)
Municipal bonds $ 26,867 $ $ 26,867 - -$
Corporate bonds 2,552,718 2,552,718
Debt Securities
U.S. Treasury securities 1,221,141 1,221,141
Federal agency securities 1,225,184 1,225,184
$ 5,025,910 $ 1,221,141 $ 3,804,769 $ -
Investments by fair value
Receivable Allowance Net
Governmental Activities:

Accounts 2,493,286 $ -$ 2,493,286 $
Intergovernmental 2,399,576 2,399,576
$ 4,892,862 -$ 4,892,862 $
Business-type Activities -
Accounts $ 4,430,401 -$ 4,430,401 $
5252

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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
Note 5 Notes and Loans Receivable
Notes receivable in the amount of $8,805,480 consists of the combination of the following:

Note 6 Interfund Activity
The following represents the interfund activity of the City for the fiscal year ended June 30, 2021:

A. Due To/ From Other Funds
Current interfund balances arise in the normal course of business and to assist funds with negative cash balance at the fiscal year end. They are expected to be repaid shortly after the end of the fiscal year.

The City allocates negative interest to funds that have a negative cash balance.

Amount
Governmental Activities:

Individuals $ 2,224,367
Business Stabilization Loans 531,063
Riverfield Homes 275,770
Healdsburg Family Limited Partnership 4,377,921
Healdsburg Pacific Associates 2,070,757
Burbank Housing 941,920
Monte Vina 4,255,061
Subtotal 14,676,859
Less: Allowance for uncollectible loans (5,932,251)
Mutual Agreement loan 53,245
Employee computer loans 7,627
Total net notes and loans receivable 8,805,480 $
Notes receivable
Interfund Interfund
Receivables Payables
General fund $ 1,197,829 $ 2,719,512
Community services special revenue fund 625,000
Streets capital projects fund 119,236
Sewer fund 2,519,645 1,159,889
Electric fund 1,374,756
Nonmajor governmental funds
North Area special revenue fund 15,000
Housing Successor Agency special revenue fund 155,431
Internal service fund
Building maintenance fund 298,162
Totals $ 5,092,230 $ 5,092,230
Major governmental funds
Major enterprise funds
5353

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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
Note 6 Interfund Activity (Continued)
B. Transfers
With council approval, resources may be transferred from one City fund to another. The purpose of the majority of transfers is to reimburse a fund that has made expenditures on behalf of another fund.

Transfers-in Transfers-out
General fund $ 845,022 $ 2,224,207
Community services special revenue fund 828,114 491,394 Streets capital projects fund 4,235,067 203,131
Water fund 1,707,002 512,238
Sewer fund 324,796 3,961,561
Electric fund 780,800 918,259
Nonmajor governmental funds
Gas Tax special revenue fund 1,125,325
Public Safety special revenue fund 50,000
Area A Lighting and Landscaping special revenue fund 1,423 Media Center special revenue fund 27,479
Housing Successor Agency special revenue fund
Misc Projects capital projects fund 95,075
General Debt Service debt service fund 726,531
Nonmajor enterprise fund
Airport fund 56,500 57,595
Internal service funds
Vehicle Maintenance fund 130,000 20,850
Information Services fund 33,513
Building maintenance fund 11,782
Totals $ 9,683,832 $ 9,683,832
Major governmental funds
Major enterprise funds
Fund
5454

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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
Note 7 Capital Assets
The City has reported all capital assets including infrastructure in the government-wide Statement of Net Position. The City elected to use the basic approach as defined by GASB Statement No. 34 for all infrastructures reporting, whereby depreciation expense and accumulated depreciation have been recorded.

A summary of changes in capital assets for the City’s governmental activities for the fiscal year ended June 30, 2021 is as follows:

Depreciation was charged to functions/programs of the primary government as follows:

Balance at
July 1, 2020 Additions Deletions
Balance at
June 30, 2021
Governmental Activities:

Capital assets, not being depreciated:

Land $ 20,805,340 $ (612,042) - $ $ 20,193,298
Right of ways 6,681,379 6,681,379
Construction in progress 9,954,405 4,904,380 (12,575,211) 2,283,574 Total capital assets,
not being depreciated 37,441,124 4,904,380 (13,187,253) 29,158,251 Capital assets, being depreciated:

Land Improvements 2,631,816 1,697,280 4,329,096
Streets 54,150,948 17,018,271 71,169,219
Buildings 32,716,886 32,716,886
Machinery and equipment 10,091,553 546,479 10,638,032
Infrastructure 1,515,614 1,515,614
Total capital assets, being depreciated 101,106,817 19,262,030 120,368,847 Less accumulated depreciation for:

Land Improvements (1,409,235) (266,642) (1,675,877)
Streets (15,532,778) (1,117,495) (16,650,273)
Buildings (14,516,497) (1,194,314) (15,710,811)
Machinery and equipment (5,651,772) (924,380) (6,576,152) Infrastructure (314,942) (42,056) (356,998)
Total accumulated depreciation (37,425,224) (3,544,887) (40,970,111) Total capital assets,
being depreciated, net 63,681,593 15,717,143 79,398,736 Governmental activities
capital assets, net $ 101,122,717 $ (13,187,253) 20,621,523 $ 108,556,987 $ Governmental Activities Amount
Unallocated $ 2,426,750
Internal service funds 1,118,137
Total $ 3,544,887
5555

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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
Note 7 Capital Assets (Continued)
A summary of changes in property, improvements, and equipment in the Enterprise Funds for the fiscal year ended June 30, 2021 is as follows:

Depreciation expense was charged to the following functions:

Balance at
July 1, 2020 Additions Deletions
Balance at
June 30, 2021
Business-types activities:

Capital assets, not being depreciated:

Land $ 1,245,877 $ - $ 1,245,877 - $
Construction in progress 7,917,971 4,050,368 (8,261,380) 3,706,959 Total capital assets, not being depreciated 9,163,848 4,050,368 (8,261,380) 4,952,836 Capital assets, being depreciated:

Buildings and improvements 3,040,870 3,040,870
Utility systems 120,970,041 10,240,605 131,210,646
Drainage 10,525,492 1,262,318 11,787,810
Machinery & equipment 3,037,947 326,549 3,364,496
Operations 3,627,134 419,757 4,046,891
Total capital assets, being depreciated 141,201,484 12,249,229 153,450,713 Less accumulated depreciation for:

Buildings and improvements (2,126,133) (75,705) (2,201,838) Utility systems (43,427,275) (3,004,001) (46,431,276)
Drainage (4,972,489) (232,127) (5,204,616)
Machinery & equipment (1,826,430) (132,100) (1,958,530) Operations (1,117,155) (86,689) (1,203,844)
Total accumulated depreciation (53,469,482) (3,530,622) (57,000,104) Total capital assets, being depreciated, net 87,732,002 96,450,609 8,718,607 Business-type activities capital assets, net 96,895,850 $ $ 12,768,975 $ (8,261,380) $ 101,403,445 Business-type Activities Amount
Water $ 692,993
Sewer 2,212,356
Electric 507,933
Airport 117,340
Total $ 3,530,622
5656

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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2021

Note 8 Long-Term Liability
A. Changes in Long-term Liability
Summary of changes in long-term liabilities for governmental activities is as follows:

Summary of changes in long-term liabilities for business-type activities is as follows:

Governmental Activities:

B. Pension Obligation Bonds

On September 7, 2012, the City issued $2,578,200 Series A and $6,339,200 Series B of 2012 Taxable Pension Obligation Bonds. The proceeds were used to pay costs of issuance totaling $108,042 and pay off the CalPERS Side Funds amounting to $2,546,762 (safety) and $6,262,596 (miscellaneous). The bonds carry interest rates of 4.25% and 4.37% for Series A and B respectively.

The final maturity is June 30, 2020 and June 30, 2023 for Series A and B respectively. Semi-annual payments of principal and interest are due each June 30 and December 31 for each issue.

Balance at Balance at Due Within
July 1, 2020 Additions Deletions June 30, 2021 One Year Governmental activities:

Other debt
$ 1,582,633 $ (488,314) - $ $ 1,094,319 $ 526,799
Successor Agency payable 1,584,791 (103,816) 1,480,975 104,075 Total other debt (592,130) 3,167,424 2,575,294 630,874
Direct borrowings and direct placements
HUSD capital lease 1,404,307 (130,100) 1,274,207 136,400 Capital leases payable 255,846 (233,781) 22,065 22,065
Total direct borrowings and direct placements 1,660,153 (363,881) 1,296,272 158,465 Total governmental long-term debt $ 4,827,577 $ (956,011) - $ $ 3,871,566 $ 789,339 Pension obligation bonds
Balance at Balance at Due Within
July 1, 2020 Additions Deletions June 30, 2021 One Year Business-type activities:

Other debt
2005D - CSCDA Water/Sewer $ 1,755,000 $ (125,000) - $ $ 1,630,000 $ 130,000 2014 Water Refunding Bonds 5,239,000 (531,000) 4,708,000 557,000 2015 Wastewater Refunding Bonds 21,805,000 (1,015,000) 20,790,000 1,055,000 Premium on bonds 470,751 (31,384) 439,367 31,384
Successor Agency payable 1,807,416 (118,398) 1,689,018 118,696 Pension obligation bonds 884,723 (272,986) 611,737 294,501 Total other long-term debt $ 31,961,890 $ (2,093,768) - $ $ 29,868,122 $ 2,186,581 5757

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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
Note 8 Long-Term Liability (Continued)
B. Pension Obligation Bonds (Continued)
Because the City’s enterprise funds are partially responsible for debt service on these bonds, the liability for the bonds is split between the governmental activities and business-type activities as follows: $1,094,319 in governmental activities, and $611,737 in business-type activities. Upon and during the continuance of an event of default, the principal of and interest accrued on all bonds may be declared to be due and payable immediately. Future minimum debt service requirements for the Series A and B bonds are as follows:

C. HUSD Capital Lease Payable
On February 1, 2014, the Healdsburg Public Financing Authority entered into a lease purchase agreement with the Healdsburg Unified School District (District) to purchase the Foss Creek School Property. As part of the agreement, the District loaned the City $2,095,007 to be paid over a 15- year period with an interest rate of 2.4%. The book value of the property acquired through this capital lease and accumulated depreciation at June 30, 2021 was $5,007,245 and $1,335,265, respectively. Upon and during the continuance of an event of default, the principal of and interest accrued on all leases may be declared to be due and payable immediately. The following represents the minimum required lease payments for the HUSD Capital Lease Payable:

Fiscal Year Principal Interest Total
2022 $ 821,300 62,279$ $ 883,579
2023 884,756 27,537 912,293
Totals 1,706,056 $ 89,816$ $ 1,795,872
Pension Obligation Bonds
Fiscal Year Principal Interest Total
2022 $ 136,400 29,773$ $ 166,173
2023 142,900 26,461 169,361
2024 149,800 22,990 172,790
2025 157,000 19,351 176,351
2026 164,500 15,539 180,039
2027-2029 523,607 21,870 545,477
Totals $ 1,274,207 $ 135,984 $ 1,410,191
HUSD Capital Lease Payable
5858

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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
Note 8 Long-Term Liability (Continued)
D. Capital Lease Payable
In March 2018, the City entered into a lease purchase agreement with Cisco Capital for the purchase and implementation of information technology related capital improvements. As part of the financing agreement, the City borrowed $536,831, to be paid over a 3-year period with a stated 0% interest rate. The lease matures on May 15, 2021. In July 2018, the City entered into additional lease purchase agreements for additional network backup equipment with Cisco Capital totaling $562,355, to be paid over 2 and 3 years. The book value of the capital improvements and accumulated depreciation on the assets were $1,099,186 and $482,771, respectively, as of June 30, 2021. Upon and during the continuance of an event of default, the principal of and interest accrued on all leases may be declared to be due and payable immediately. Future minimum debt service requirements on the lease are as follows:

E. Payable to the Successor Agency
In 2008, the former Redevelopment Agency of the City of Healdsburg (RDA) loaned the City of Healdsburg $4,495,000 ($2,395,000 to the Electric Fund for upgrades to Badger Substation and $2,100,000 to the Community Services Fund for long-term lease of a school facility) in accordance with executed loan agreements. In January 2012, the Board of Directors for the RDA adopted a resolution forgiving the loans between the RDA and the City. In June 2015, the California Department of Finance disallowed the forgiveness of the loans. The Successor Agency to the former RDA is now responsible for the collection of this loan payment. The loans are payable annually over a period of 20 years at an interest rate of .25%. As of June 30, 2021, the amount due from Governmental Activities and the Electric Fund was $1,480,975 and $1,689,018, respectively.

The Community Services Special Revenue fund is expected to be responsible for principal and interest payments for the portion related to Governmental Activities.

Fiscal Year Principal
2022 $ 22,065
Totals $ 22,065
Capital Leases Payable
Fiscal Year Principal Interest Total
2022 $ 222,771 7,925$ $ 230,696
2023 223,328 7,368 230,696
2024 223,886 6,810 230,696
2025 224,446 6,250 230,696
2026 225,007 5,689 230,696
2027-2031 1,133,504 19,977 1,153,481
2032-2035 917,051 5,738 922,789
Totals $ 3,169,993 $ 59,757 $ 3,229,750
Successor Agency Payable
5959

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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
Note 8 Long-Term Liability (Continued)
Business-type Activities:

F. 2005 Series D CSCDA Water/Sewer Revenue Bonds
In October 2005, the City, through the California Statewide Communities Development Authority, issued $6,505,000 in bonds to provide funds to defease the 1996 Sewer Improvement Certificates and the 2000 Series B Water and Sewer CSDA Certificates, which were originally issued to finance sewer improvements. Interest on the 2005 bonds is payable semiannually, on April 1 and October 1, with the principal payments due annually on October 1 of each year. Net revenues of the water and wastewater utilities are pledged as security for the bonds. Upon and during the continuance of an event of default, the principal of and interest accrued on all bonds may be declared to be due and payable immediately.

In July 2015, the City issued the 2015 Wastewater Revenue Refunding Bonds, which defeased the remaining Sewer Bonds of the 2005 CSDA Bonds of $2,440,000. The 2005 CSDA Sewer Bonds are considered to be defeased and the liability has been removed from long-term debt. See the 2015 Wastewater Revenue Refunding Bonds, Series A for more information on the refunding.

The following represents the future debt service requirements for the 2005 Series D CSCDA Water Revenue Bonds:

G. 2014 Water Refunding Bonds
In February 2014, the City issued $7,965,000 in Water Revenue Refunding Bonds, to refund the 2001 A and 2002 C outstanding bonds (current refunding). Proceeds from the 2014 bonds were placed in escrow to refund in full the 2001 A and 2002 C bonds, and to pay costs of issuance. The bonds carry interest rates in the range from 4.30% to 5%. The final maturity is October 1, 2032.

Semi-annual payments of principal and interest are due each April 1 and October 1. Upon and during the continuance of an event of default, the principal of and interest accrued on all bonds may be declared to be due and payable immediately. The following represents the future debt service:

Fiscal Year Principal Interest Total
2022 $ 130,000 $ 74,988 $ 204,988
2023 135,000 68,850 203,850
2024 145,000 61,850 206,850
2025 150,000 54,475 204,475
2026 160,000 46,725 206,725
2027-2031 910,000 109,238 1,019,238
Totals $ 1,630,000 $ 416,126 $ 2,046,126

2005 Series D CSCDA Water/Sewer Revenue Bonds
6060

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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
Note 8 Long-Term Liability (Continued)
G. 2014 Water Refunding Bonds (Continued)
H. 2015 Wastewater Revenue Refunding Bonds, Series A
In July 2015, the City issued $26,625,000 in Wastewater Revenue Refunding Bonds, Series A, to refund the 2005 and 2006 Wastewater Revenue bonds (current refunding). Proceeds from the 2015 bonds were placed in escrow to refund in full the 2005 and 2006 bonds, and to pay costs of issuance.

The bonds carry interest rates in the range from 2.0% to 3.75%. The final maturity is October 1, 2035. Semi-annual payments of principal and interest are due each April 1 and October 1. Upon and during the continuance of an event of default, the principal of and interest accrued on all bonds may be declared to be due and payable immediately. The following represents the future minimum debt service requirements for the 2015 Wastewater Revenue Refunding Bonds:

Fiscal Year Principal Interest Total
2022 $ 557,000 183,824$ $ 740,824
2023 583,000 160,169 743,169
2024 604,000 135,539 739,539
2025 462,000 113,420 575,420
2026 484,000 93,790 577,790
2027-2031 1,416,000 267,302 1,683,302
2032-2033 602,000 25,149 627,149 -
Totals $ 4,708,000 $ 979,193 $ 5,687,193
2014 Water Refunding Bonds
Fiscal Year Principal Interest Total
2022 $ 1,055,000 $ 739,050 $ 1,794,050
2023 1,095,000 696,050 1,791,050
2024 1,140,000 651,350 1,791,350
2025 1,190,000 604,750 1,794,750
2026 1,235,000 556,250 1,791,250
2027-2031 6,890,000 2,083,923 8,973,923
2032-2036 8,185,000 784,990 8,969,990
Totals 20,790,000 $ $ 26,906,363 6,116,363 $
2015 Wastewater Revenue Refunding Bonds, Series A
6161

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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
Note 8 Long-Term Liability (Continued)
I. Compensated Absences:

Compensated absences are liquidated by the Insurance and Benefit Internal Service Fund and are reported as a liability of the governmental activities. As of June 30, 2021, the City’s liability for earned vacation and compensation pay is $2,507,123.

Note 9 Pension Plan
For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Plans and additions to/deductions from the Plans' fiduciary net position have been determined on the same basis as they are reported by CalPERS Financial Office. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. Pension liabilities are typically liquidated in the General Fund for governmental activities or in the respective enterprise fund.

A. General Information about the Pension Plan
Plan Descriptions - All qualified employees are eligible to participate in the City’s Miscellaneous (all other) Plans, cost-sharing multiple employer defined benefit pension plans administered by the California Public Employees' Retirement System (CalPERS). Benefit provisions under the Plans are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.

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. PEPRA Miscellaneous members with five years of total service are eligible to retire at age 52 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 5 years of service. The death benefit is the Basic Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law. The Plans’ provisions and benefits in effect at June 30, 2021, are summarized as follows:

Miscellaneous Miscellaneous Miscellaneous
Classic Member 2nd Tier PEPRA
Hire date Prior to December 16,
2012
On and after
December 16, 2012
On or after
January 1, 2013
Benefit formula 2.5% @ 55 2% @ 62 2% @ 62
Benefit vesting schedule 5 years service 5 years service 5 years service Benefit payments monthly for life monthly for life monthly for life Retirement age 55 60 62
Monthly benefits, as a % of eligible compensation 2.5% 2% 2% Required employee contribution rates 8% 7% 7%
Required employer contribution rates 13.146% + $1,655,602 9.442% + $8,353 7.874% + $21,223 6262

6.A.a
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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
Note 9 Pension Plan (Continued)
A. General Information about the Pension Plan (Continued) Contributions - Section 20814(c) of the California Public Employees' Retirement Law 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 l following notice of a change in the rate. Funding contributions for the Plans are determined annually on an actuarial basis as of June 30 by CalPERS. 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 City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees.

For the fiscal year ended June 30, 2021, the contributions recognized as part of pension expense for the Plan were as follows:

B. Pension Liability, Pension Expenses and Deferred Outflow/Inflows of Resources Related to Pensions
As of June 30, 2021, the City reported net pension liabilities for its proportionate shares of the net pension liability of the Plan as follows:

Safety
Safety PEPRA
Hire date Prior to January 1,
2013
On and after
January 1, 2013
Benefit formula 3% @ 50 2.7% @ 57
Benefit vesting schedule 5 years service 5 years service Benefit payments monthly for life monthly for life
Retirement age 50 57
Monthly benefits, as a % of eligible compensation 3% 2.7% Required employee contribution rates 9% 11.5%
Required employer contribution rates 23.764% + $891,914 13.044% + $9,840 Miscellaneous Safety Total
Contributions - employer $ 2,453,615 $ 1,371,030 $ 3,824,645 Proportionate
Share of Net
Pension Liability
Miscellaneous $ 25,198,508
Safety 14,085,720
Total $ 39,284,228
6363

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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
Note 9 Pension Plan (Continued)
C. Net Pension Liability
The City’s net pension liability for each Plan is measured as the proportionate share of net pension liability. The net pension liability of the Plan is measured as of June 30, 2020, and the total pension liability for the Plan used to calculate the net pension liability was determined by actuarial valuation as of June 30, 2019 rolled forward to June 30, 2020 using standard update procedures. The City’s proportion of the net pension liability was based on a projection of the City’s long-term share of contributions to the pension plans relative to the projected contributions of all participating employers, actuarially determined. The City’s proportionate share of the net pension liability for the Plan as of June 30, 2019 and 2020 was as follows:

For the fiscal year ended June 30, 2021, the City recognized pension expense of $6,010,052, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Deferred outflows of resources were reported as $3,321,038 related to contributions subsequent to the measurement date and will be recognized as a reduction of the net pension liability in the fiscal year ended June 30, 2022. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions and will be recognized as pension expense as follows:

Proportion - June 30, 2019 0.35464%
Proportion - June 30, 2020 0.36105%
Change - Increase (Decrease) 0.00641%
Deferred Outflows Deferred Inflows
of Resources of Resources
Changes of Assumptions $ - $ 226,646
Differences between Expected and Actual Experience 2,390,830 Net differences between projected and actual
earnings on plan investments 1,054,704
Differences between employer's contributions and the
employer's proportionate share of contributions 1,027,822 Change in Employer's Proportion 765,215
Pension Contributions Made Subsequent to Measurement Date 3,321,038 Total $ 7,531,787 $ 1,254,468
Fiscal Year Ended
June 30 Amount
2022 $ 386,207
2023 1,159,786
2024 897,862
2025 512,426
Total $ 2,956,281
6464

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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
Note 9 Pension Plan (Continued)
C. Net Pension Liability (Continued)
Actuarial Assumptions - The total pension liabilities in the June 30, 2019 actuarial valuations were determined using the following actuarial assumptions:
(1) Depending on age, service and type of employment
(2) Net of pension plan investment expenses, including inflation All other actuarial assumptions used in the June 30, 2019 valuation were based on the results of an actuarial experience study for the fiscal years 1997 to 2015, including updates to salary increase, mortality, and retirement rates. The experience study report can be obtained at CalPERS’ website under Forms and Publications.

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 best-estimate ranges of 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, staff took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows. Such cash flows were developed assuming that both members and employers will make their required contributions on time and as scheduled in all future years. 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 (11-60 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 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 equivalent to the single equivalent rate calculated above and rounded down to the nearest one quarter of one percent.

Valuation Date June 30, 2019
Measurement Date June 30, 2020
Actuarial Cost Method Entry-Age Normal Cost Method
Actuarial Assumptions:

Discount Rate 7.15%
Inflation 2.50%
Payroll Growth 2.75%
Projected Salary Increase Varies By Age & Length of Service (1) Investment Rate of Return 7.50% (2)
Mortality Derived using CalPERS' Membership
Data for all Funds
6565

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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
Note 9 Pension Plan (Continued)
C. Net Pension Liability (Continued)
The table below reflects long-term expected real rate of return by asset class. The rate of return was calculated using the capital market assumptions applied to determine the discount rate and asset allocation.

These geometric rates of return are net of administrative expenses.

Discount Rate
The discount rate used to measure the total pension liability 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.

Assumed Asset
Allocation
Real Return
Years 1-10(b)
Real Return
Years 11+(c)
Global Equity 50.00% 4.80% 5.98%
Fixed Income 28.00% 1.00% 2.62%
Inflation Sensitive 0.00% 0.77% 1.81%
Private Equity 8.00% 6.30% 7.23%
Real Estate 13.00% 3.75% 4.93%
Liquidity 1.00% 0.00% -0.92%
Total 100.00%
(a) In the CalPERS's system, Fixed Income is included in Global Debt Securities; Liquidity is included Liquidity is included in Short-term Investments; Inflation Assets are included in both Global Equity Securities and Global Debt Securities.
(b) An expected inflation of 2.0% was used for this period (c) An expected inflation of 2.92% was used for this period Asset Class (a)
6666

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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
Note 9 Pension Plan (Continued)
C. Net Pension Liability (Continued)
Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount RateThe following presents the net pension liability/(asset) of the Plan as of the measurement date, calculated using the discount rate of 7.15 percent, as well as what the net pension liability/(asset) 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:

Pension Plan Fiduciary Net Position - Detailed information about each pension plan's fiduciary net position is available in the separately issued CalPERS financial reports.

Note 10 Risk Management
Risk Management
The City is exposed to various risk of losses related to torts; theft of, damage to, and destruction of assets; errors and omissions; and natural disasters. The City currently reports all of its risk management activities in its Insurance and Benefit internal service fund.

Risk Pool Arrangements
The City is an associate member of the Redwood Empire Municipal Insurance Fund (REMIF), a public entity pool comprised of fifteen northern California charter and associate member cities. REMIF is organized under a Joint Powers Agreement pursuant to the California Government Code. The purpose of REMIF is to arrange and administer programs of insurance for the pooling of self-insured losses and to purchase excess insurance coverage.

For each of its insurance programs, REMIF has a multilevel risk sharing arrangement. Initially each individual charter or associate member city participating in a program assumes its own losses up to a predetermined deductible level. Losses and claims in excess of the deductibles and within REMIF’s stated retention limits are paid out of a central pool maintained by REMIF. This central pool is funded by all of the cities participating in that program through premium assessments. REMIF purchases excess loss insurance policies (reinsurance) to provide coverage for losses and claims in excess of REMIF’s stated retention limits up to specified amounts. Losses and claims ceded to reinsurers would represent a contingent liability to REMIF if the reinsurers were unable to meet their existing obligations under the reinsurance agreements. Losses and claims which surpass the limits of the excess of loss insurance policies are the responsibility of the individual city in which the loss or claim originates.

REMIF programs do not insure the City’s losses resulting from events which occurred prior to March 1, 1993, the date on which the City became an associate member of REMIF.

Discount Rate -1% Current Discount Rate Discount Rate +1%

6.15% 7.15% 8.15%
Net Pension Liability - Misc $ 37,099,875 $ 25,198,508 $ 15,364,783 Net Pension Liability - Safety 20,444,262 14,085,720 8,867,934 Net Pension Liability - Total $ 57,544,137 $ 39,284,228 $ 24,232,717 6767

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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
Note 10 Risk Management (Continued)
The City of Healdsburg participates in the following three REMIF programs:

General Liability Insurance – Annual premiums are paid by the member cities and are adjusted retrospectively to cover costs. The City of Healdsburg self-insures for the first $5,000 of each loss and pays 100% of all losses incurred under $5,000. The City does not share or pay for losses of other cities under a range of between $5,000 to $25,000, depending on the entity’s deductible amount. Participating cities then share in the next $5,000 to $500,000 per loss occurrence. Specific coverage includes comprehensive and general automotive liability, personal injury, contractual liability, professional liability, and certain other coverage. REMIF is a member of the California Joint Powers Risk Management Authority, which provides REMIF with an additional $39,500,000 liability insurance coverage over and above REMIF retention level of $500,000.

Worker’s Compensation – Periodic deposits are paid by member cities and are adjusted retrospectively to cover costs. The City of Healdsburg is self-insured for the first $5,000 of each loss and pays 100% of all losses incurred under $5,000. The City does not share or pay for losses of other cities under $5,000.

Losses of $5,000 to $1,000,000 are prorated among all participating cities. Losses in excess of $1,000,000 are covered by excess insurance purchased by participating cities, as part of the pool, to State statutory limits.

Property Insurance – The City participates in REMIF’s property insurance program. The annual deposits paid by participating member cities are based upon deductibility levels and are not subject to retroactive adjustments. The City of Healdsburg has a deductible level of $100,000 and a coverage limit of $400,000,000 declared value.

The following is a summary of the financial statements of REMIF as of and for the fiscal year ended June 30, 2020:

6/30/2020*
Total Assets $ 34,311,556
Total Deferred Outflows 659,939
Total Liabilities 31,672,831
Total Deferred Inflows 185,787
Total Net Position 3,112,877
Total Revenues 30,510,306
Total Expenses 28,800,927
Increase in Net Position 1,709,379
* Latest information available
6868

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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
Note 10 Risk Management (Continued)
Changes in the Internal Service Funds claims liabilities amounts in fiscal year 2021, 2020, and 2019 were as follows:

The City is liable for $273,246 and $93,720 to be paid over 3 and 2 years, for the Workers’ Compensation and Liability program, respectively. The total claims liability of $441,634 includes the assessments of $152,078 and $289,556, Liability and Worker’s Compensation programs, respectively.

Note 11 Northern California Power Agency
Background
The City is a member of the Northern California Power Agency (NCPA), headquartered in Roseville, California. NCPA is a joint exercise of powers agency formed in 1968 under the Joint Exercise of Powers Act, Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (the “Act”). NCPA’s Members currently consist of twelve cities with publicly owned electric utility distribution systems, a public utility district, a city port department, and a transit district as Members, a water agency and a rural electric cooperative as associate Members. Under the terms of the NCPA Joint Powers Agreement entered into by all Members, NCPA possesses the general powers to acquire, purchase, generate, transmit, distribute and sell electrical capacity and energy. Specific powers include the power to enter into contracts, acquire and construct electric generating facilities, issue revenue bonds and notes and acquire property by eminent domain.

The member Services Agreements, dated as of February 12, 1981, and the Facilities Agreement, dated as of September 22, 1993, provide for the development of projects undertaken by NCPA in three separate phases: (i) the initial phase of general investigation funded by NCPA’s general fund; (ii) the second phase whereby Members of NCPA electing to participate in the project execute a project agreement to provide for the cost of development of the project (now referred to as an “NCPA Project”); and (iii) the third phase during which all remaining aspects, including financing, construction and operation of the NCPA Project are undertaken.

Organization and Management
NCPA’s governing body (the “Commission”) is composed of one representative from each Member, each such representative being designated a Commissioner. The Commission is given the general management of the affairs, property and business of NCPA and is vested with all powers of NCPA.

Under the NCPA Joint Powers Agreement, associate Members do not have a voting seat on the Commission, except as may be provided in a project agreement.

2021 2020 2019
Balance, beginning of fiscal year 575,367 $ 729,370 $ $ 833,811 Claims and adjustments 762,040 358,261 548,853
Claims payments (895,773) (512,264) (653,294)
Balance, end of fiscal year 441,634 $ $ 575,367 $ 729,370 69 6.A.a
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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
Note 11 Northern California Power Agency (Continued)
The management of NCPA is responsible for various areas of administration and planning of NCPA’s operations and affairs. The overall management is under the direction of NCPA’s General Manager, who serves at the discretion of the Commission. NCPA is organized into four separate divisions: (i) generation services, (ii) power management, (iii) legislative and regulatory, and (iv) administrative services.

Today, the organization is guided by an ethic of environmental stewardship, fiscal responsibility and community service, coupled with a strong sense of mission to advance the state of the art in renewable energy. Each NCPA Member has agreed to fund a pro rata share of certain assessments by NCPA and enter into power supply contract with NCPA to purchase power in support of bearing the costs of NCPA operations, energy and facilities. While governed by its Members, none of NCPA’s obligations are those of its Members unless expressly assumed by them. As computed by NCPA amounts paid by the City to NCPA during the fiscal year ending June 30, 2021 were $3.5 million for electric power acquisition charges and are reported as an expense of the Electric Utility Fund.

Additionally, the NCPA Commission identified and approved the funding of specific reserves for working capital, accumulated employee’s post-retirement medical benefits, and billed property taxes for the geothermal project. The Commission also identified a number of contingent liabilities that may or may not be realized, the cost of which in most cases is difficult to estimate at this time. One such contingent liability is the steam filed depletion which will require funding to cover debt service and operational cost in excess of the expected value of the electric power. The General Operating Reserve (the “GOR”) is intended to minimize the number and amount of individual reserves needed for each project, protect NCPA’s financial condition and maintain its credit worthiness. These funds are available on demand, but the City has left them with NCPA as a reserve against these contingencies identified by NCPA. The City’s GOR balance as computed by NCPA was $5,963,403 as of June 30, 2021. The most recent estimated funding recommended by NCPA equaled $1.14 million.

NCPA Power Pool
The City is a member of a power pool operated by NCPA that also includes the following Members:

Alameda, Biggs, Gridley, Lodi, Lompoc, Palo Alto, Plumas Sierra Rural Electric Cooperative, the Port of Oakland and Ukiah (each, an “NCPA Pool Member”). The ten NCPA Pool Members’ service areas are connected to the CAISO-controlled grid. NCPA operates a central dispatch facility at NCPA’s headquarters. The Central Dispatch Center balances loads and resources pursuant to CAISO tariff rules, for the ten NCPA Pool Members, and Santa Clara.

NCPA Geothermal Project
NCPA has developed a geothermal project (the “Geothermal Project”) located on federal land in certain areas of Sonoma and Lake Counties, California (the “Geysers Area”). NCPA formed two not-for-profit corporations controlled by its Members to own the generating plants of the Geothermal Project. NCPA manages the Geothermal Project for the corporations and is entitled to all the capacity and energy generated by the Geothermal Project.

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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
Note 11 Northern California Power Agency (Continued)
Combustion Turbine Project
The original project consisted of five combustion turbine units, each nominally rated at approximately 25 megawatts. Concurrent with the final project bond maturity, two units located in Roseville were acquired by an Agency member. The remaining project consists of two units in Alameda and one in Lodi. The project provides capacity during peak load periods and emergency capacity reserves. Excess capacity and energy from the project are also sold to other entities from time to time. The City is obligated to pay 3.5% of the debt service and operating costs.

Lodi Energy Center
The project is a 296 MW base load, combined cycle, natural gas-fired combustion turbine generating station (one gas turbine and one steam turbine) located in Lodi, California, next to the Capital Facilities Project discussed above. Pursuant to the Lodi Energy Center Power Sales Agreement, the Agency agreed to operate the LEC and has sold all of the capacity and energy of the LEC to thirteen participants (including four non-members) in accordance with their respective Generation Entitlements Share (GES). Each participant has agreed to unconditionally provide for its share of the operation and maintenance expenses and all capital improvements based on its GES.

NCPA Financial Information
NCPA’s financial statements are available on their website at www.ncpa.com.

Note 12 Other Post-Retirement Plan
The City reports the following total OPEB liability as of the June 30, 2021 measurement date:

Governmental Business-type
Activities Activities
Total OPEB liability: 1,069,929 $ 310,279 $
Total total OPEB liability $ 1,069,929 $ 310,279
Deferred outflows of resources:

Changes in assumptions $ 176,310 $ 51,129
Total deferred outflows of resources $ 176,310 $ 51,129 Deferred inflows of resources:

Differences between expected and
actual experiences $ 20,054 $ 5,815
Changes in assumptions 17,828 5,172
Total deferred inflows of resources $ 37,882 $ 10,987
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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
Note 12 Other Post-Retirement Plan (Continued)
Description
The City’s defined benefit OPEB plan, (the Plan), provides OPEB for all eligible miscellaneous and public safety employees of the City. The plan is a single-employer defined benefit OPEB plan administered by the City. The benefit terms are defined in the applicable Memorandum’s of Understanding for each bargaining unit and may be amended by City Council. No assets are accumulated in a trust that meets the criteria in paragraph 4 of Statement No. 75. The City funds the benefits on a pay-as-you-go basis. No assets are accumulated in a trust.

At retirement, employees can elect to receive Blue Cross, Sutter or Kaiser medical coverage through the City medical plan at the retiree’s expense. Retirees (service or disability retiring through CalPERS directly through the City who are age 50 or over and who have a minimum of 10 years of service with a REMIF City) are eligible to obtain medical coverage. While the City does not directly contribute towards the cost of insurance premiums for retirees, the ability to obtain coverage at an active employee rate constitutes a significant economic benefit to the retirees, called an ‘implicit subsidy” under GASB Statement No. 75. Medical coverage is provided for the surviving spouse of retired employees and the surviving spouse of active employees who upon death had attained age 50 and who had a minimum of 10 years of service with a REMIF City. The Plan does not provide a publicly available financial report.

As of June 30, 2020, actuarial valuation, the following current and former employees were covered by the benefit terms under the Plan:

Contributions
The City’s adopted policy is to contribute an amount sufficient to pay the current fiscal year’s premium.

See above section “Description” for more information.

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 total OPEB liability was determined by actuarial valuation dated June 30, 2020. The total OPEB liability in the June 30, 2021 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified:

Active employees 128
Inactive employees or beneficiaries currently receiving benefits16 Total 144
Actuarial Assumptions: June 30, 2021 Measurement Date
Discount Rate 2.16%
Inflation 2.75% annually
Salary Increases 3% per annum, in aggregate
Investment Rate of Return 3.50%
Mortality Rate CalPERS 1997-2015 Experience Study
Mortality Improvement Mortality projected fully generational with Scale MP-19 Medical Participation at Retirement Currently covered - 50%, Currently waived - 0% Healthcare Trend Rate 7.0% for 2022, decreasing to an ultimate rate of 4% in 2076 72 6.A.a
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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
Note 12 Other Post-Retirement Plan (Continued)
Discount Rate
The discount rate estimates investment earnings for assets earmarked to cover retiree health benefit liabilities. The discount rate depends on the nature of underlying assets for funded plans. The rate used for a funded plan is the real rate of return expected for plan assets plus long term inflation assumption.

For an unfunded plan, the discount rate is based on an index of 20-year General Obligation municipal bonds. For partially funded plans, the discount rate is a blend of the funded and unfunded rates. The discount rate used to measure the total OPEB liability was 2.16 percent.

Sensitivity to the total OPEB Liability to Changes in the Discount Rate and Healthcare Trend Rate
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 the measurement period ending June 30, 2021:

Total
OPEB
Liability
Balance at June 30, 2020 $ 1,279,607
Service Cost 70,471
Interest 29,725
Assumption Changes 10,405
Benefit Payments (10,000)
Net Change during 2020-21 100,601
Balance at June 30, 2021 $ 1,380,208
Changes in Total OPEB Liability as of June 30, 2021
Current
1% Lower
Discount Rate
(2.16%) 1% Higher
Total OPEB Liability 1,612,156 $ $ 1,380,208 $ 1,190,338 1% Lower
Current Trend
(7%) 1% Higher
Total OPEB Liability 1,154,539 $ $ 1,380,208 $ 1,662,289 Discount Rate
Healthcare Trend Rate
7373

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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
Note 12 Other Post-Retirement Plan (Continued)
Recognition of Deferred Outflows and Deferred Inflows of Resources and OPEB expense For the fiscal year ended June 30, 2021, the City recognized OPEB expense of $88,000. The City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB and will be recognized as pension expense as follows:

Note 13 Commitments and Contingencies
There are pending claims and litigation against the City, which are considered normal to the City’s operation. City management is of the opinion that potential claims against the City not covered by insurance resulting from such litigation would not materially affect the basic financial statements of the City beyond funded reserves.

The City has entered into long-term electric power purchase generation assets and electric transmission contracts. These contracts were entered into by NCPA on behalf of various members (see Note 11) including the City. Under the terms of its NCPA joint venture agreement, the City is contingently liable for a portion of the bonded indebtedness issued by these agencies under take-or-pay or similar agreements. The City’s estimated share of such debt outstanding at June 30, 2021 was $8.4 million.

Under certain circumstances, such as default or bankruptcy of other participants, the City may also be liable to pay a portion of the debt of these joint ventures on behalf of the other participants.

Deferred Outflows Deferred Inflows
of Resources of Resources
Changes in assumption 227,439 $ 25,869 $
Differences between expected
and actual experience 23,000
Total $ 227,439 $ 48,869
For the Recognized Net
Fiscal Year Deferred Outflows
Ending June 30, (Inflows) of Resources
2022 $ 19,291
2023 19,291
2024 19,291
2025 19,291
2026 19,291
Thereafter 82,115
Total $ 178,570
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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
Note 13 Commitments and Contingencies (Continued)
California-Oregon Transmission Project
The City is a member of the Transmission Agency of Northern California (TANC), a California joint powers agency. TANC, a combination of cities, Western Area Power Administration, and four other California Districts and authorities are participants in the California-Oregon Transmission Project (COTP). The COTP is a transmission project between southern Oregon and Central California. COTP provides a transmission path between the electric systems of the Pacific Northwest and those in California. The City’s share is 0.2456%. Each member of TANC is responsible for developing its own uses for its share of the COTP transfer capability.

Western Area Power Administration
In addition to commitments for power acquisitions through NCPA, the City has entered into a contract with the Western Area Power Administration (Western). Western is a federal Power Management Agency of the U.S. Department of Energy, which among other things is responsible for marketing electricity generated by the Central Valley Project. The contract with Western was renewed for the period January 1, 2005 through December 31, 2024. The City is actively seeking and new contract with Western to acquire power from 2025 through 2054.”
Construction Commitments
The estimated amount of remaining construction contract obligations at fiscal year-end is $3,604,214.

Note 14 Net Position and Fund Balances
GASB Statement No. 34, modified by GASB Statement No. 63, adds the concept of Net Position, which is measured on the full accrual basis, to the concept of Fund Balance, which is measured on the modified accrual basis.

Net Position
Net position is divided into three captions under GASB Statement No. 34. These captions apply only to net position as determined at the government-wide level, and are described below:

Net Investment in Capital Assets describes the portion of net assets which is represented by the current net book value of the City’s capital assets, less the outstanding balance of any debt issued to finance these assets.

Restricted describes the portion of net position which is restricted as to use by the terms and conditions of agreements with outside parties, governmental regulations, laws, or other restrictions which the City cannot unilaterally alter. These principally include debt service requirements, and redevelopment funds restricted to low and moderate income housing purposes.

Unrestricted describes the portion of net position which is not restricted as to use.

The government-wide statement of net position reports $33,654,707 of restricted net position. 75 6.A.a
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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
Note 14 Net Position and Fund Balances (Continued)
Fund Balances
Fund balance is classified as nonspendable, restricted, committed, assigned and/or unassigned based primarily on the extent to which the City is bound to observe constraints imposed upon the use of the resources in the government funds. The constraints placed on fund balance for the major governmental funds and all other governmental funds are presented as follows:

Fund Balances General
Community
Services
Streets
Capital
Project Fund
Nonmajor
Governmental
Funds Total
Nonspendable:

Prepaid expenditures 21,172$ $ - $ - -$ 21,172 $
Inventory 8,569 8,569
Legally/Contractually required
to be maintained intact 200,000 200,000
Total Nonspendable 8,569 21,172 200,000 229,741
Restricted for:

Lighting and landscaping 252,636 252,636
Community services 780,152 720,241 1,500,393
Affordable housing 412,835 6,652,870 7,065,705
Parking expansion 124,103 124,103
Public safety 268,543 106,392 374,935
Pension rate stabilization 5,006,915 493,645 5,500,560
Public works 947,429 947,429
Tree mitigation 15,886 15,886
Streets and roads 969,000 969,000
Strong motion 4,543 4,543
Debt service 272,524 272,524
Total Restricted 6,651,608 9,102,309 1,273,797 17,027,714 Committed for:

Capital improvement 436,565 436,565
Total Committed 436,565 436,565
Assigned for:

General plan update 23,064 23,064
Total Assigned 23,064 23,064
Unassigned: 3,287,970 (346,057) (13,338) 2,928,575
Total Fund Balances $ 9,983,814 $ 1,273,797 $ (337,488) 9,725,536$ 20,645,659$ 7676

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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
Note 15 Successor Agency to the Former Redevelopment Agency On December 29, 2011, the California Supreme Court upheld Assembly Bill 1X 26 (“the Bill”) that provides for the dissolution of all redevelopment agencies in the State of California. This action impacted the reporting entity of the City of El Centro that previously had reported a redevelopment agency within the reporting entity of the City as a blended component unit.

The Bill provides that upon dissolution of a redevelopment agency, either the city or other unit of local government will agree to serve as the “successor agency” to hold the assets until they are distributed to other units of state and local government. On January 17, 2012, the City Council elected to become the Successor Agency for the former redevelopment agency in accordance with the Bill as part of the City resolution number 12.

After enactment of the law, which occurred on June 28, 2011, redevelopment agencies in the State of California cannot enter into new projects, obligations or commitments. Subject to the control of a newly established oversight board, remaining assets can only be used to pay enforceable obligations in existence as the date of the dissolution (including the completion of any unfinished projects that were subject to legally enforceable contractual commitments).

In future fiscal years, successor agencies will only be allocated revenue in the amount that is necessary to pay the estimated annual installment payments on enforceable obligations of former redevelopment agency until all enforceable obligations of the prior redevelopment agency have been paid in full and all assets have been liquidated.

The Bill directs the State Controller of the State of California to review the propriety of any transfers of assets between redevelopment agencies and other public bodies that occurred after January 1, 2011.

If the public body that received such transfers is not contractually committed to a third party for the expenditure or encumbrance of those assets, the state Controller is required to order the available assets to be transferred to the public body designated as the successor agency by the Bill.

Management believes, in consultation with legal counsel, that the obligations of the former redevelopment agency due to the City are valid enforceable obligations payable by the successor agency trust under the requirements of the Bill. The City’s position on this issue is not a position of settled law and there is considerable legal uncertainty regarding this issue. It is reasonably possible that a legal determination may be made at a later date by an appropriate judicial authority that would resolve this issue unfavorably to the City.

In accordance with the timeline set forth in the Bill (as modified by the California Supreme Court on December 29, 2011) all redevelopment agencies in the State of California were dissolved and ceased to operate as a legal entity as of February 1, 2012.

Prior to that date, the final seven months of activity of the redevelopment agency continued to be reported in the governmental funds of the City. After the date of dissolution, the assets and activities of the dissolved redevelopment agency are reported in a fiduciary fund (private-purpose trust fund) in the financial statements of the City.

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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
Note 15 Successor Agency to the Former Redevelopment Agency (Continued) The transfer of the assets and liabilities of the former redevelopment agency as of February 1, 2012 (effectively the same date as January 31, 2012) from governmental funds of the City to fiduciary funds was reported in the governmental funds as an extraordinary loss (or gain) in the governmental fund financial statements. The receipt of these assets and liabilities as of January 31, 2012 was reported in the private-purpose trust fund as an extraordinary gain (or loss).

Because of the different measurement focus of the governmental funds (current financial resources measurement focus) and the measurement focus of the trust funds (economic resources measurement focus), the extraordinary loss (gain) recognized in the governmental funds was not the same amount as the extraordinary gain (loss) that was recognized in the fiduciary fund financial statements.

Capital asset activities for the fiscal year ended June 30, 2021 were as follows:

The following is a schedule of long-term liabilities for the fiscal year ended June 30, 2021:

Fiduciary Activities: Balance at Balance at
Capital assets, not being depreciated: July 1, 2020 Additions Deletions June 30, 2021 Land 528,300 $ -$ -$ 528,300 $
Total capital assets, not being depreciated 528,300 528,300 Fiduciary activities capital assets, net $ 528,300 -$ -$ 528,300 $ Balance at Balance at Due Within
July 1, 2020 Additions Reductions June 30, 2021 One Year Tax Allocation Bonds:
2002 Series B $ 1,075,000 -$ $ (70,000) $ 1,005,000 $ 70,000 2014 Series A 7,865,400 (541,500) 7,323,900 559,600
2014 Series B 3,096,200 (214,300) 2,881,900 221,600
2015 Series A 7,538,500 (441,100) 7,097,400 455,700
2015 Series B 3,652,600 (249,000) 3,403,600 255,900
2017 Refunding 16,140,000 (605,000) 15,535,000 660,000
Unamortized bond premium 2,349,313 (156,621) 2,192,692 156,621 Total other long-term debt 41,717,013 $ -$ (2,277,521) $ $ 39,439,492 $ 2,379,421 7878

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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
Note 15 Successor Agency to the Former Redevelopment Agency (Continued) A. 2002 Series B
In August 2004, the Agency issued $1,800,000 Series B 2002 Tax Allocation Bonds. The Bonds were issued for the purpose of providing funds to finance the construction of the Alliance Medical Clinic, which the Agency determined is a benefit to the Sotoyome Project Area. Interest on the bonds is at 4.75% with semiannual debt service payments due February 1 and August 1, with principal maturing annually August 1, 2005 through 2031. Upon and during the continuance of an event of default, the principal of and interest accrued on all bonds may be declared to be due and payable immediately. Debt service payments will be made from tax increment revenue received by the Trust. Future debt service on these bonds is as follows:

B. 2014 Series A and B
In May 2014, the Successor Agency issued $10,876,000 in 2014 Tax Allocation Refunding Bonds, Series A, to refund the outstanding 2002 Tax Allocation Bonds, Series A (current refunding).

Proceeds from the 2014 Series A bonds were used to refund in full the 2002 Series A bonds, to establish a reserve fund, and to pay costs of issuance. As a result, the 2002 Series A bonds are considered defeased and the liability has been removed from these financial statements.

In May 2014, the Successor Agency issued $4,279,400 in 2014 Tax Allocation Refunding Bonds, Series B, to refund the outstanding 2002 Tax Allocation Bonds, Series C (current refunding).

Proceeds from the 2014 Series B bonds were used to refund in full the 2002 Series C bonds, to establish a reserve fund, and to pay costs of issuance. As a result, the 2002 Series C bonds are considered defeased. Interest on the bonds is set at 3.4% with semi-annual debt service payments due on February 1 and August 1 of each year, with principal maturing annually August 1, 2014 through 2031. Upon and during the continuance of an event of default, the principal of and interest accrued on all bonds may be declared to be due and payable immediately. Debt service payments will be made from tax increment revenue received by the Trust. The following represents the future minimum debt service requirements:

Fiscal Year Principal Interest Total
2022 $ 70,000 46,075$ $ 116,075
2023 75,000 42,631 117,631
2024 80,000 38,950 118,950
2025 80,000 35,150 115,150
2026 85,000 31,231 116,231
2027-2031 500,000 89,063 589,063
2032 115,000 2,731 117,731
Totals $ 1,005,000 285,831$ $ 1,290,831
2002 Tax Allocation Bond Series B
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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
Note 15 Successor Agency to the Former Redevelopment Agency (Continued) B. 2014 Series A and B (Continued)
C. 2015 Series A and B
In January 2015, the Successor Agency issued $9,568,200 in 2015 Tax Allocation Refunding Bonds, Series A, and $4,750,800 in 2015 Tax Allocation Refunding Bonds, Series B, to refund the outstanding 2003 Tax Allocation Bonds, Series A and B (current refunding). Interest on the 2015 bonds is 4.25% with semi-annual debt service payments due on February 1 and August 1 of each year, with principal maturing annually August 1, 2015 through 2031. Upon and during the continuance of an event of default, the principal of and interest accrued on all bonds may be declared to be due and payable immediately. Future debt service payments will be made from tax increment revenue received by the Trust, and is as follows:

Fiscal Year Principal Interest Total
2022 $ 559,600 239,499$ $ 799,099
2023 577,200 220,174 797,374
2024 599,000 200,178 799,178
2025 619,400 179,465 798,865
2026 639,000 158,073 797,073
2027-2031 3,544,500 442,795 3,987,295
2032 785,200 13,348 798,548
Totals $ 7,323,900 $ 8,777,432 1,453,532 $
2014 Tax Allocation Bond Series A
Fiscal Year Principal Interest Total
2022 $ 221,600 94,217$ $ 315,817
2023 228,600 86,564 315,164
2024 235,400 78,676 314,076
2025 241,600 70,567 312,167
2026 252,500 62,167 314,667
2027-2031 1,392,600 173,897 1,566,497
2032 309,600 5,263 314,863
Totals $ 2,881,900 571,351$ $ 3,453,251
2014 Tax Allocation Bond Series B
8080

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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
Note 15 Successor Agency to the Former Redevelopment Agency (Continued) C. 2015 Series A and B (Continued)
D. 2017 Tax Allocation Refunding Bonds
In December 2017, the Successor Agency issued $17,150,000 in 2017 Tax Allocation Refunding Bonds to refund the outstanding 2010 Tax Allocation Bonds (advanced refunding). Proceeds from the 2017 Bonds were used to refund in full the 2010 Bonds and to pay issuance costs. As a result, the 2010 bonds are considered defeased and the liability has been removed from these financial statements. As of June 30, 2018, $21,103,793 was held in escrow to refund the 2010 Bonds. Interest on the 2017 bonds ranges from 2% to 5% with semi-annual debt service payments due on February 1 and August 1 of each year, with principal maturing annually August 1, 2018 through 2034.

The Successor Agency refunded the 2010 Bonds to reduce total debt service by approximately $3.6 million, and to obtain an economic gain (difference between the present values of the debt service payments on the old and new debt) of approximately $3 million. Upon and during the continuance of an event of default, the principal of and interest accrued on all bonds may be declared to be due and payable immediately. Future debt service payments will be made from tax increment revenue received by the Trust, and is as follows:

Fiscal Year Principal Interest Total
2022 $ 455,700 291,956$ $ 747,656
2023 464,700 272,397 737,097
2024 468,200 252,573 720,773
2025 481,300 232,396 713,696
2026 493,800 211,675 705,475
2027-2031 3,929,000 597,993 4,526,993
2032 804,700 17,100 821,800
Totals $ 7,097,400 $ 8,973,490 1,876,090 $
Fiscal Year Principal Interest Total
2022 $ 255,900 139,215$ $ 395,115
2023 267,500 128,093 395,593
2024 273,700 116,592 390,292
2025 289,500 104,624 394,124
2026 294,800 92,208 387,008
2027-2031 1,647,000 259,825 1,906,825
2032 375,200 7,973 383,173 -
Totals $ 3,403,600 848,530$ $ 4,252,130
2015 Tax Allocation Bond Series A
2015 Tax Allocation Bond Series B
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Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
Note 15 Successor Agency to the Former Redevelopment Agency (Continued) D. 2017 Tax Allocation Refunding Bonds (Continued)
Note 16 Prior Period Adjustments
The accompanying financial statements include adjustments that resulted in the restatements of beginning net position and fund balances. The following summarizes the effect of the prior period adjustments to beginning net position and fund balances as of July 1, 2020:

Fiscal Year Principal Interest Total
2022 $ 660,000 707,750$ 1,367,750$
2023 695,000 680,650 1,375,650
2024 740,000 648,250 1,388,250
2025 785,000 610,125 1,395,125
2026 835,000 569,625 1,404,625
2027-2031 3,660,000 2,312,875 5,972,875
2032-2035 8,160,000 756,350 8,916,350
Totals $ 15,535,000 $ 6,285,625 $ 21,820,625
2017 Tax Allocation Refunding Bond
Reason for adjustments
Governmental
Activities
Business-type
Activities
Reclassified fiduciary funds to permanent fund 231,813 $ - $ Other post-employment benefits liability 287,663 (287,663) Deferred outflow of resources - OPEB related (54,679) 54,679 Deferred inflow of resources - OPEB related 12,538 (12,538) $ (245,522) 477,335 $
Governmental
Nonmajor Fund
Water Sewer Electric Senior Center Trust
Enterprise Enterprise Enterprise Permanent
Reason for adjustments Fund Fund Fund Fund
Reclassified fiduciary funds to permanent fund - $ -$ -$ $ 231,813 Other post-employment benefits liability (138,872) (9,919) (138,872) Deferred outflow of resources - OPEB related 26,397 1,885 26,397 Deferred inflow of resources - OPEB related (6,053) (432) (6,053) $ (118,528) (8,466)$ $ (118,528) $ 231,813

Proprietary Funds
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REQUIRED SUPPLEMENTAL INFORMATION

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CITY OF HEALDSBURG

REQUIRED SUPPLEMENTAL INFORMATION
JUNE 30, 2021
Schedule of the Local Government’s Proportionate Share of the Net Pension Liability – Last 10 Years*
Notes to the Schedule:

Benefit Changes: The figures above do not include any liability impact that may have resulted from plan changes which occurred after the June 30, 2016 valuation date. This applies for voluntary benefit changes as well as any offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes).

Changes in Assumptions: In 2017, the discount rate changed from 7.65% to 7.15%. *Fiscal year 2015 was the 1st year of implementation, therefore only seven years are shown.

Proportionate Plan Fiduciary
Proportionate Share of the Net Net Position as a
Proportion of the Net Share of Net Covered Pension Liability % of the Total Measurement Date Pension Liability Pension Liability Payroll as a % of Payroll Pension Liability 2020 0.36105% $ 39,284,228 $ 14,438,000 272.09% 71.82%
2019 0.35464% 36,340,001 11,027,420 329.54% 72.41%
2018 0.34843% 33,575,940 10,170,288 330.14% 72.96%
2017 0.33985% 33,703,985 9,958,349 338.45% 71.61%
2016 0.33897% 29,331,189 9,243,834 317.31% 72.92%
2015 0.33530% 23,014,464 8,299,645 277.29% 77.62%
2014 0.28460% 17,713,031 7,808,757 226.84% 82.46%
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Packet Pg. 100 Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

REQUIRED SUPPLEMENTAL INFORMATION
JUNE 30, 2021
Schedule of Pension Contributions – Last 10 Years*
*Fiscal year 2015 was the 1st year of implementation, therefore only seven years are shown.

Contributions in
Contractually Relation to the Contribution Contribution as a Required Actuarially Determined Deficiency/ Covered % of Covered Fiscal Year Contributions Contributions (Excess) Payroll Payroll 2021 $ 3,321,038 $ (3,321,038) $ 16,188,697 - $ 20.51%
2020 3,824,645 (3,824,645) 14,438,000 26.49%
2019 3,263,776 (3,263,776) 11,027,420 29.60%
2018 2,791,313 (2,791,313) 10,170,288 27.45%
2017 2,494,953 (2,494,953) 9,958,349 25.05%
2016 2,208,239 (2,208,239) 9,243,834 23.89%
2015 1,707,064 (1,707,064) 8,299,645 20.57%
84 6.A.a
Packet Pg. 101 Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

REQUIRED SUPPLEMENTAL INFORMATION
JUNE 30, 2021
Schedule of the Change in Net OPEB Liability and Related Ratios - Last 10 Fiscal Years*

MEASUREMENT PERIOD 2021 2020 2019 2018

TOTAL OPEB LIABILITY
Service Cost $ 70,471 $ 56,673 $ 51,000 $ 52,000
Interest on the Total OPEB Liability 29,725 37,159 36,000 33,000 Difference between Expected and Actual Experience (31,683) Changes of Assumptions 10,405 220,458 53,000 (39,000)
Benefit Payments (10,000) (16,000) (16,000) (15,000)
Net Change in Total OPEB Liability 100,601 266,607 124,000 31,000 Total OPEB Liability - Beginning 1,279,607 1,013,000 889,000 858,000 Total OPEB Liability - Ending $ 1,380,208 $ 1,279,607 $ 1,013,000 $ 889,000 Plan Net OPEB Liability - Ending $ 1,380,208 $ 1,279,607 $ 1,013,000 $ 889,000 Plan Fiduciary Net Position as
a Percentage of the Total OPEB Liability n/a n/a n/a n/a Covered Payroll $ 16,188,697 $ 15,823,041 $ 14,438,000 $ 13,380,000 Net OPEB liability as a percentage of covered payroll 8.53% 8.09% 7.02% 6.64% Notes to Schedule
Changes in Assumptions:
*Fiscal year 2018 was the first year of implementation, therefore only four years are shown.

For fiscal year ended June 30, 2018, the discount rate changed from 3.58% to 3.87% For fiscal year ended June 30, 2020, the discount rate changed from 3.50% to 2.21% Mortality improvement scale was updated to Scale MP-2019 For fiscal year ended June 30, 2019, the discount rate changed from 3.87% to 3.50% For fiscal year ended June 30, 2021, the discount rate changed from 2.21% to 2.16% 85 6.A.a
Packet Pg. 102 Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

REQUIRED SUPPLEMENTAL INFORMATION
JUNE 30, 2021
Schedule of OPEB Contribution - Last 10 Fiscal Years
Per GASB 75 paragraph 57c., these disclosures are only required if the employer calculates an Actuarially Determined Contribution (ADC). The City does not currently calculate an ADC.

86 6.A.a
Packet Pg. 103 Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

SCHEDULE OF REVENUES, EXPENDITURES,

AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL

GENERAL FUND
For the Fiscal Year Ended June 30, 2021
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)

REVENUES
Property taxes $ 4,319,228 $ 4,385,037 $ 4,600,749 $ 215,712 Sales and other taxes 7,939,671 8,304,826 9,757,061 1,452,235 Development fees 75,000 75,000 134,748 59,748
Intergovernmental 129,000 275,264 292,602 17,338
Fines and forfeitures 121,000 121,000 34,892 (86,108)
License and permits 1,004,000 1,004,000 1,628,977 624,977 Use of money and property 399,717 399,717 823,295 423,578 Charges for services 861,276 1,075,005 1,146,609 71,604 Other, donations, and reimbursements 110,000 110,000 356,705 246,705 Total Revenues 14,958,892 15,749,849 18,775,638 3,025,789

EXPENDITURES
Current:

General government 3,990,927 4,035,355 3,958,060 77,295 Public safety 9,549,145 9,762,424 10,191,803 (429,379)
Community development 479,330 643,506 530,047 113,459
Total Expenditures 14,019,402 14,441,285 14,679,910 (238,625) Excess of Revenues over
(under) Expenditures 939,490 1,308,564 4,095,728 2,787,164

OTHER FINANCING SOURCES
(USES)
Transfers in 1,376,278 1,107,542 845,022 (262,520)
Transfers out (2,465,499) (3,116,266) (2,224,207) 892,059 Total Other Financing
Sources (Uses) (1,089,221) (2,008,724) (1,379,185) 629,539 Net Change in Fund Balance (149,731) (700,160) 2,716,543 3,416,703 Fund Balance, Beginning of
Fiscal Year 7,267,271 7,267,271 7,267,271
Fund Balance, End of Fiscal Year $ 7,117,540 $ 6,567,111 $ 9,983,814 $ 3,416,703 Budgeted Amounts
See Accompanying Note to Required Supplementary Information 87 6.A.a
Packet Pg. 104 Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE

BUDGET AND ACTUAL

COMMUNITY SERVICES SPECIAL REVENUE FUND
For the Fiscal Year Ended June 30, 2021
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)

REVENUES
Sales and other taxes $ 3,285,014 $ 2,486,858 $ 3,546,602 $ 1,059,744 Development fees 51,900 51,900 142,609 90,709
Intergovernmental 473,350 462,000 256,445 (205,555)
Licenses and permits 6,500 6,500 3,070 (3,430)
Use of money and property 11,318 11,318 56,585 45,267
Charges for services 412,665 412,665 471,038 58,373
Other, donations, and reimbursements 742,500 916,500 506,112 (410,388) Total Revenues 4,983,247 4,347,741 4,982,461 634,720

EXPENDITURES
Current:

Community services 4,794,032 5,249,065 4,610,384 638,681 Total Expenditures 4,794,032 5,249,065 4,610,384 638,681 Excess of Revenues over
(under) Expenditures 189,215 (901,324) 372,077 1,273,401

OTHER FINANCING

SOURCES (USES)
Transfers in - 1,239,503 828,114 (411,389)
Transfers out (209,886) (334,886) (491,394) (156,508)
Total Other Financing
Sources (Uses) (209,886) 904,617 336,720 (567,897)
Net Change in Fund Balance (20,671) 3,293 708,797 705,504 Fund Balance, Beginning of Fiscal Year 565,000 565,000 565,000 Fund Balance, End of Fiscal Year $ 544,329 $ 568,293 $ 1,273,797 $ 705,504

CITY OF HEALDSBURG
Budgeted Amounts
See Accompanying Note to Required Supplementary Information 88 6.A.a
Packet Pg. 105 Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

NOTE TO REQUIRED SUPPLEMENTARY INFORMATION
For the Fiscal Year Ended June 30, 2021

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Budgetary Data
Through the budget, the City Council sets the direction of the City, allocates its resources and establishes its priorities. The Annual Budget assures the efficient and effective uses of the City’s economic resources, as well as establishing that the highest priority objectives are accomplished.

The Annual Budget serves from July 1 to June 30, and is a vehicle that accurately and openly communicates these priorities to the community, businesses, vendors, employees and other public agencies. Additionally, it establishes the foundation of effective financial planning by providing resource planning, performance measures and controls that permit the evaluation and adjustment of the City’s performance.

The City collects and records revenue and expenditures within the following categories:
• Governmental Activities
• Business-Type Activities
The Governmental Funds include the General Fund, Special Revenue, Debt Service and Capital Projects funds. All funding sources are kept separate for both reporting and the use of money. The General Fund is where most City services are funded that are not required to be segregated.

Budgets and Budgetary Accounting
The City uses the following procedures in establishing the budgetary data reflected in the financial statements:

1. Prior to June 30 of each fiscal year, the City Manager submits to the City Council a proposed operating budget for the fiscal year commencing the following July 1.

The operating budget includes proposed expenditures and the means of financing them.

2. Public hearings are conducted at the City Hall to obtain citizen input.

3. Prior to July 1, the budget is adopted through passage of a resolution and is not included herein but is published separately.
89 6.A.a
Packet Pg. 106 Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

NOTE TO REQUIRED SUPPLEMENTARY INFORMATION
For the Fiscal Year Ended June 30, 2021

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

4. The City Manager is authorized to transfer budgeted amounts between departments within any fund. However, any revision that increases the total appropriations of any fund must be approved by the City Council. The appropriated budget is prepared by fund, function, and department.

5. Formal budgetary integration is employed as a management control device during the fiscal year for all funds.

6. Budgets for General, Special Revenue, Debt Service, and Capital Projects Funds are adopted on a basis consistent with accounting principles generally accepted in the United States of America.

7. The City does not formally adopt budgets for the North Area, Park Development fees, Parking Impact Fees, and Misc Projects non-major governmental funds.

8. The City does not formally adopt budgets for the permanent fund. 90 6.A.a
Packet Pg. 107 Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

OTHER SUPPLEMENTARY INFORMATION

6.A.a
Packet Pg. 108 Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

6.A.a
Packet Pg. 109 Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

NONMAJOR GOVERNMENTAL FUNDS

SPECIAL REVENUE FUNDS
Special Revenue Funds are used to account for specific revenues that are legally restricted to expenditure for particular purposes.

Gas Tax Fund – used to account for the expenditures financed by money apportioned under the Streets and Highways Code of the State of California.

North Area Fund – used to account for the activity of an assessment district with the purpose of funding the installation and maintenance of new roads, sewer systems and electrical, etc. when annexing into specific area of the City.

Benjamin Way Maintenance District Fund – used to track the revenue and expenditures for the repair and limited maintenance of Benjamin Way.

Public Safety Fund – used to account for grant revenue and expenditures used for equipment and training specific to police and fire, and to account for monies received by the California Department of Motor Vehicles to be expended on abatement, removal or the disposal of vehicle related public nuisances from private or public property.

Strong Motion Education and Data Fund – used to account for the expenditures funded by fees charged in accordance with the California Department of Conservation.

Area A Lighting and Landscaping Fund – used to account for revenue and expenditures related to the lighting and landscaping districts.

Media Center Fund – used to account for monies received by cable operators to support public education and government (PEG) channel facilities and activities.

Park Development Fees Fund – used to account for revenue and expenditures for the design and construction of park and park improvements required to mitigate the impact of new development.

Parking Impact Fees Fund – used to account for revenue and expenditures related to parking improvements and alternative transportation, including bicycle and pedestrian, improvements designed to reduce parking requirements for which the fees are charged.

Housing Successor Agency Fund – used to account for housing assets from the former Redevelopment Agency, including notes receivable.

PERMANENT FUND
Senior Center Trust Permanent Fund – used to account for and report financial resources that are legally restricted to the extent that only earnings, and not principal, may be used for purposes that support City programs.

CAPITAL PROJECTS FUND
Misc. Projects Capital Projects Fund – used to account for the acquisition and construction of miscellaneous major capital projects throughout the City.

DEBT SERVICE FUND
General Debt Service Fund – used to account for the accumulation of resources for and the payment of principal and interest on long-term debt.
91 6.A.a
Packet Pg. 110 Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21) Benjamin Way Strong Motion Area A
Gas North Maintenance Public Education Lighting and
Tax Area District Safety and Data Landscaping
ASSETS
Cash and investments $ 919,080 $ 1,662 $ 7,855 $ 106,392 $ 4,538 $ 251,067 Cash and investments with fiscal agents
Receivables:

Accounts and taxes 53,300 3,824
Interest 1,217 8 5 263
Intergovernmental 40,840
Loans and notes receivable
Total Assets $ 961,137 $ 54,962 $ 7,863 $ 106,392 $ 4,543 $ 255,154

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES
Liabilities:

Accounts payable $ - $- $- $- $- $ 2,518
Due to other funds 15,000
Deposit payable
Total Liabilities 15,000 2,518
Deferred inflow of resources:

Unavailable revenue - interest
Unavailable revenue 53,300
Total deferred inflows of resources 53,300
Fund Balances:

Nonspendable
Restricted 961,137 7,863 106,392 4,543 252,636
Committed
Unassigned (13,338)
Total Fund Balances (Deficits) 961,137 (13,338) 7,863 106,392 4,543 252,636 Total Liabilities, Deferred inflows of
Resources and Fund Balances $ 961,137 $ 54,962 $ 7,863 $ 106,392 $ 4,543 $ 255,154

CITY OF HEALDSBURG

COMBINING BALANCE SHEET

NONMAJOR GOVERNMENTAL FUNDS
June 30, 2021
Special Revenue Funds
92 6.A.a
Packet Pg. 111 Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21) Total
Park Parking Housing Senior Nonmajor
Media Development Impact Successor Center Misc General Governmental Center Fees Fees Agency Trust Projects Debt Service Funds $1 $ 611,036 $ 123,973 $- $ $ 100 $ 436,692 42 $ 2,462,438 294,835 436,523 175 731,533

9,617 4,114 78,606 149,461
638 130 2,261
40,840
8,263,545 8,263,545
$ 9,618 $ 615,788 $ 124,103 $ 8,342,151 $ 294,935 $ 436,565 $ 436,867 $ 11,650,078 $- $- $- $ 32,805 $- $- $ 164,343 $ 199,666
155,431 170,431
100 100
188,236 164,343 100 370,197
1,501,045 1,501,045
53,300
1,501,045 1,554,345
200,000 200,000
9,618 615,788 124,103 6,652,870 94,835 272,524 9,102,309 436,565 436,565
(13,338)
9,618 615,788 124,103 6,652,870 294,835 436,565 272,524 9,725,536 $ 9,618 $ 615,788 $ 124,103 $ 8,342,151 $ 294,935 $ 436,565 $ 436,867 $ 11,650,078

Fund
Debt Service
Special Revenue Funds
Capital Projects
Fund Fund
Permanent
93 6.A.a
Packet Pg. 112 Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21) Benjamin Way Strong Motion Area A
Gas North Maintenance Public Education Lighting and
Tax Area District Safety and Data Landscaping

REVENUES
Property taxes $ $- - $- $- $- $ 192,183
Development fees 1,300
Intergovernmental 495,865
Use of money and property 1,239 16 11 60
Charges for services 3,860
Other, donations, and reimbursements 9,686 432
Total Revenues 497,104 1,300 16 13,546 443 192,243

EXPENDITURES
Current:

Public safety 60,503
Streets and roads 1,881
Community development 200,006
Community services
Debt service:

Principal retirement
Interest and fiscal charges
Total Expenditures 1,881 60,503 200,006
Excess of Revenues Over
(Under) Expenditures 495,223 1,300 16 (46,957) 443 (7,763)

OTHER FINANCING SOURCES (USES)
Transfers in 50,000
Transfers out (1,125,325) (1,423)
Total Other Financing
Sources (Uses) (1,125,325) 50,000 (1,423)
Net Change in Fund Balances (630,102) 1,300 16 3,043 443 (9,186) Fund Balances (deficits), Beginning of Fiscal Year 1,591,239 (14,638) 7,847 103,349 4,100 261,822 Prior Period Adjustments
Fund Balances (deficits), Beginning of Fiscal
Year(restated) 1,591,239 (14,638) 7,847 103,349 4,100 261,822 Fund Balances (deficits), End of Fiscal Year $ 961,137 $ (13,338) $ 7,863 $ 106,392 $ 4,543 $ 252,636 Special Revenue Funds

CITY OF HEALDSBURG

COMBINING STATEMENT OF REVENUES, EXPENDITURES,

AND CHANGES IN FUND BALANCES

NONMAJOR GOVERNMENTAL FUNDS
For the Fiscal Year Ended June 30, 2021
94 6.A.a
Packet Pg. 113 Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21) Fund Fund Fund Total
Park Parking Housing Senior Nonmajor
Media Development Impact Successor Center Misc General Governmental Center Fees Fees Agency Trust Projects Debt Service Funds $- $- $- $- $- $- $ $ 192,214 31
60,931 47,190 109,421
250,000 745,865
1,770 388 48,861 66,702 111 1 119,159
3,860
37,241 132,330 165,475 345,164
37,241 62,701 47,578 431,191 66,702 111 165,507 1,515,683 60,503
1,881
524,086 3,680 727,772
617 617

722,230 722,230
258,000 258,000
617 524,086 3,680 980,230 1,771,003
37,241 62,084 47,578 (92,895) 63,022 111 (814,723) (255,320) 726,531 776,531
(27,479) (95,075) (1,249,302)
(27,479) (95,075) 726,531 (472,771)
9,762 62,084 47,578 (92,895) 63,022 (94,964) (88,192) (728,091) (144) 553,704 76,525 6,745,765 531,529 360,716 10,221,814 231,813 231,813
(144) 553,704 76,525 6,745,765 231,813 531,529 360,716 10,453,627 $ 9,618 $ 615,788 $ 124,103 $ 6,652,870 $ 294,835 $ 436,565 $ 272,524 $ 9,725,536 Captial Projects Debt Service
Special Revenue Funds
Permanent
95 6.A.a
Packet Pg. 114 Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES

IN FUND BALANCE - BUDGET AND ACTUAL
For the Fiscal Year Ended June 30, 2021
Variance
Actual
Budget (Negative)

REVENUES
Intergovernmental $ 519,834 $ 495,865 $ (23,969)
Use of money and property 13,049 1,239 (11,810)
Total Revenues 532,883 497,104 (35,779)

EXPENDITURES
Current:

Streets and roads 1,881 (1,881)
Total Expenditures 1,881 (1,881)
Excess of Revenues
Over (Under) Expenditures 532,883 495,223 (37,660)

OTHER FINANCING SOURCES (USES)
Transfers out (1,507,644) (1,125,325) 382,319
Total Other Financing Sources (Uses) (1,507,644) (1,125,325) 382,319 Net Change in Fund Balance (974,761) (630,102) 344,659
Fund Balance - Beginning of Fiscal Year 1,591,239 1,591,239 Fund Balance - End of Fiscal Year $ 616,478 $ 961,137 $ 344,659 Final Positive
Amount

GAS TAX SPECIAL REVENUE FUND
96 6.A.a
Packet Pg. 115 Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES

IN FUND BALANCE - BUDGET AND ACTUAL
For the Fiscal Year Ended June 30, 2021
Variance
Actual
Budget (Negative)

REVENUES
Charges for services $ $ 3,860 - $ 3,860
Other, donations, and reimbursements 9,686 9,686
Total Revenues 13,546 13,546

EXPENDITURES
Current:

Public safety 50,000 60,503 (10,503)
Total Expenditures 50,000 60,503 (10,503)
Excess of Revenues
Over (Under) Expenditures (50,000) (46,957) 3,043

OTHER FINANCING SOURCES (USES)
Transfers in 50,000 50,000
Total Other Financing Sources (Uses) 50,000 50,000
Net Change in Fund Balance 3,043 3,043
Fund Balance - Beginning of Fiscal Year 103,349 103,349 Fund Balance - End of Fiscal Year $ 103,349 $ 106,392 $ 3,043

PUBLIC SAFETY SPECIAL REVENUE FUND
Final Positive
Amount
97 6.A.a
Packet Pg. 116 Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES

IN FUND BALANCE - BUDGET AND ACTUAL
For the Fiscal Year Ended June 30, 2021
Variance
Actual
Budget (Negative)

REVENUES
Use of money and property $ $ 42 $ 11 (31)
Other, donations, and reimbursements 200 432 232
Total Revenues 242 443 201
Excess of Revenues
Over (Under) Expenditures 242 443 201
Fund Balance - Beginning of Fiscal Year 4,100 4,100
Fund Balance - End of Fiscal Year $ 4,342 $ 4,543 $ 201

STRONG MOTION EDUCATION AND DATA SPECIAL REVENUE FUND
Final Positive
Amount
98 6.A.a
Packet Pg. 117 Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES

IN FUND BALANCE - BUDGET AND ACTUAL

AREA A LIGHTING AND LANDSCAPING SPECIAL REVENUE FUND
For the Fiscal Year Ended June 30, 2021
Variance
Actual
Budget (Negative)

REVENUES
Property taxes $ 192,609 $ 192,183 $ (426)
Use of money and property 1,620 60 (1,560)
Total Revenues 194,229 192,243 (1,986)

EXPENDITURES
Current:

Community development 237,403 200,006 37,397
Total Expenditures 237,403 200,006 37,397
Excess of Revenues
Over (Under) Expenditures (43,174) (7,763) 35,411

OTHER FINANCING SOURCES (USES)
Transfers out (1,423) (1,423)
Total Other Financing Sources (Uses) (1,423) (1,423)
Net Change in Fund Balance (44,597) (9,186) 35,411
Fund Balance - Beginning of Fiscal Year 261,822 261,822 Fund Balance - End of Fiscal Year $ 217,225 $ 252,636 $ 35,411 Final Positive
Amount
99 6.A.a
Packet Pg. 118 Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES

IN FUND BALANCE - BUDGET AND ACTUAL

MEDIA CENTER SPECIAL REVENUE FUND
For the Fiscal Year Ended June 30, 2021
Variance
Actual
Budget (Negative)

REVENUES
Other, donations, and reimbursements $ 40,000 $ 37,241 $ (2,759) Total Revenues 40,000 37,241 (2,759)
Excess of Revenues
Over (Under) Expenditures 40,000 37,241 (2,759)

OTHER FINANCING SOURCES (USES)
Transfers out (40,000) (27,479) 12,521
Total Other Financing Sources (Uses) (40,000) (27,479) 12,521 Net Change in Fund Balance 9,762 9,762
Fund Balances (deficits), Beginning of Fiscal Year (144) (144) Fund Balances (deficits), End of Fiscal Year $ (144) $ 9,618 $ 9,762 Final Positive
Amount

CITY OF HEALDSBURG
100

6.A.a
Packet Pg. 119 Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES

IN FUND BALANCE - BUDGET AND ACTUAL

BENJAMIN WAY MAINTENANCE DISTRICT SPECIAL REVENUE FUND
For the Fiscal Year Ended June 30, 2021
Variance
Actual
Budget (Negative)

REVENUES
Use of money and property $ $ 82 $ 16 (66)
Total Revenues 82 16 (66)
Excess of Revenues
Over (Under) Expenditures 82 16 (66)
Fund Balance - Beginning of Fiscal Year 7,847 7,847
Fund Balance - End of Fiscal Year $ 7,929 $ 7,863 $ (66) Final Positive
Amount
101

6.A.a
Packet Pg. 120 Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES

IN FUND BALANCE - BUDGET AND ACTUAL

HOUSING SUCCESSOR AGENCY SPECIAL REVENUE FUND
For the Fiscal Year Ended June 30, 2021
Variance
Actual
Budget (Negative)

REVENUES
Intergovernmental $ 500,000 $ 250,000 $ (250,000)
Use of money and property 48,861 48,861
Other, donations, and reimbursements 50,000 132,330 82,330 Total Revenues 550,000 431,191 (118,809)

EXPENDITURES
Current:

Community development 561,356 524,086 37,270
Total Expenditures 561,356 524,086 37,270
Excess of Revenues
Over (Under) Expenditures (11,356) (92,895) (81,539)
Fund Balance - Beginning of Fiscal Year 6,745,765 6,745,765 Fund Balance - End of Fiscal Year $ 6,734,409 $ 6,652,870 $ (81,539) Final
Amount
Positive
102

6.A.a
Packet Pg. 121 Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES

IN FUND BALANCE - BUDGET AND ACTUAL

GENERAL DEBT SERVICE FUND
For the Fiscal Year Ended June 30, 2021
Variance
Actual
Budget (Negative)

REVENUES
Property taxes $ $ - $ 31 31
Use of money and property 1 1
Other, donations, and reimbursements 74,962 165,475 90,513 Total Revenues 74,962 165,507 90,545

EXPENDITURES
Debt service:

Principal retirement 722,230 722,230
Interest and fiscal charges 258,000 258,000
Total Expenditures 980,230 980,230
Excess of Revenues
Over (Under) Expenditures (905,268) (814,723) 90,545

OTHER FINANCING SOURCES (USES)
Transfers in 563,498 726,531 163,033
Total Other Financing Sources (Uses) 563,498 726,531 163,033 Net Change in Fund Balance (341,770) (88,192) 253,578
Fund Balance - Beginning of Fiscal Year 360,716 360,716 Fund Balance - End of Fiscal Year $ 18,946 $ 272,524 $ 253,578 Amount
Final Positive
103

6.A.a
Packet Pg. 122 Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21) ASSETS
Cash and investments $ 2,856,567 $ 123,265 $ 228,547 $ 63,792 Pension stabilization investments 5,006,915
Receivables:

Accounts and taxes 1,144,944
Interest 5,330 575 66
Intergovernmental 1,316,712 655 519,611
Due from other funds 298,162 625,000
Loans and notes receivable 481,063
Deposits 947,429
Prepaid expenditures 21,172
Total Assets $ 11,597,231 $ 123,920 $ 1,854,796 $ 63,858

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES
Liabilities:

Accounts payable and accrued liabilities $ 326,811 $ 4,805 $- $ 2,544 Due to other funds 2,719,512
Deposits payable 1,299,583
Total Liabilities 1,626,394 2,724,317 2,544
Fund Balances:

Nonspendable:

Prepaid expenditures 21,172
Restricted 5,954,344
Assigned 23,064
Unassigned 3,972,257 (2,600,397) 1,854,796 61,314
Total Fund Balances (Deficits) 9,970,837 (2,600,397) 1,854,796 61,314 Total Liabilities, Deferred inflows of
Resources and Fund Balances $ 11,597,231 $ 123,920 $ 1,854,796 $ 63,858 Capital Transaction Economic

CITY OF HEALDSBURG

COMBINING BALANCE SHEET

GENERAL FUND ACTIVITIES
June 30, 2021
General Replacement & Use Tax Development
104

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Packet Pg. 123 Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21) Total General
Fund
$ 103,231 $ 15,869 $ 268,263 $ 3,659,534
5,006,915

176,801 1,321,745
17 280 6,268
1,836,978
155,431 1,078,593
481,063
947,429
21,172
$ 435,463$ 15,886$ 268,543$ 14,359,697
$ 22,628 $- $- $ 356,788
2,719,512
1,299,583
22,628 4,375,883
21,172
412,835 15,886 268,543 6,651,608
23,064
3,287,970
412,835 15,886 268,543 9,983,814
$ 435,463$ 15,886$ 268,543$ 14,359,697

TOT Tree Fire Facilities
Housing Mitigation Impact Fees
105

6.A.a
Packet Pg. 124 Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

REVENUES
Property taxes $ 4,600,749 $ - $ - $ -
Sales and other taxes 6,755,097 2,322,932
Development fees 119,158
Intergovernmental 288,454 4,148
Fines and forfeitures 34,892
License and permits 1,628,977
Use of money and property 559,967 260,158 2,076
Charges for services 1,146,609
Other, donations, and reimbursements 348,621 4,719
Total Revenues 15,482,524 269,025 2,325,008

EXPENDITURES
Current:

General government 3,659,024 44,699 250,137
Public safety 10,191,803
Community development 97,557
Total Expenditures 13,850,827 44,699 250,137 97,557
Excess of Revenues Over
(Under) Expenditures 1,631,697 224,326 2,074,871 (97,557)

OTHER FINANCING SOURCES (USES)
Transfers in 711,279 113,743
Transfers out (546,094) (1,425,979) (237,686)
Total Other Financing
Sources (Uses) 165,185 113,743 (1,425,979) (237,686)
Net Change in Fund Balances 1,796,882 338,069 648,892 (335,243) Fund Balances (deficits), Beginning of Fiscal Year 8,173,955 (2,938,466) 1,205,904 396,557 Fund Balances (deficits), End of Fiscal Year $ 9,970,837 $ (2,600,397) $ 1,854,796 $ 61,314

CITY OF HEALDSBURG

GENERAL FUND ACTIVITIES

COMBINING STATEMENT OF REVENUES, EXPENDITURES,

AND CHANGES IN FUND BALANCES
For the Fiscal Year Ended June 30, 2021
Economic
Development
Transaction
General & Use Tax
Capital
Replacement
106

6.A.a
Packet Pg. 125 Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21) Total General
Fund
$- $ -
$ - $ 4,600,749
679,032 9,757,061
15,590 134,748
292,602
34,892
1,628,977
424 86 584 823,295
1,146,609
3,365 356,705
682,821 86 16,174 18,775,638
4,200 3,958,060
10,191,803
432,490 530,047
432,490 4,200 14,679,910
250,331 (4,114) 16,174 4,095,728
20,000 845,022
(14,448) (2,224,207)
(14,448) 20,000 (1,379,185)
235,883 15,886 16,174 2,716,543
176,952 252,369 7,267,271
$ 412,835$ 15,886$ 268,543$ 9,983,814
TOT
Housing
Fire Facilities
Impact Fees
Tree
Mitigation
107

6.A.a
Packet Pg. 126 Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21) Water Water Capital Water Debt Water Totals
Operations Replacement Service Capacity Water Fund

ASSETS AND DEFERRED OUTFLOWS OF RESOURCES
Current Assets:

Cash and investments $ 2,201,309 $ 985,586 $ 205,375 $ 1,404,000 $ 4,796,270 Pension stabilization investments 576,528 576,528
Accounts receivable 1,034,570 13,142 1,047,712
Interest receivable 3,332 1,465 4,797
Inventory 65,007 65,007
Prepaid items 1,033 1,033
Total Current Assets 3,881,779 985,586 205,375 1,418,607 6,491,347 Noncurrent Assets:

Capital assets
Land 310,781 310,781
Construction in progress 2,362,939 2,362,939
Depreciable buildings and improvements, net 266,846 266,846 Depreciable utility systems, net 20,964,449 20,964,449
Depreciable equipment, net 308,321 308,321
Total Noncurrent Assets 24,213,336 24,213,336
Total Assets 28,095,115 985,586 205,375 1,418,607 30,704,683 Deferred Outflows of Resources:

OPEB related 24,683 24,683
Pension related 669,496 669,496
Total deferred outflows of resources 694,179 694,179

LIABILITIES AND DEFERRED INFLOW OF RESOURCES
Current Liabilities:

Accounts payable and accrued liabilities 51,076 107,872 158,948 Deposits payable 12,940 12,940
Retention payable 107,820 107,820
Bonds payable - current 775,508 775,508
Interest payable 68,283 68,283
Total Current Liabilities 907,807 215,692 1,123,499
Noncurrent Liabilities
Bonds payable 5,746,339 5,746,339
OPEB 149,790 149,790
Net pension liability 3,275,806 3,275,806
Total Noncurrent Liabilities 9,171,935 9,171,935
Total Liabilities 10,079,742 215,692 10,295,434
Deferred Inflows of Resources:

OPEB related 5,304 5,304
Pension related 101,580 101,580
Total deferred inflows of resources 106,884 106,884

NET POSITION
Net investment in capital assets 17,623,206 17,623,206
Restricted 576,528 769,894 205,375 1,418,607 2,970,404
Unrestricted 402,934 402,934
Total Net Position $ 18,602,668 $ 769,894 $ 205,375 $ 1,418,607 $ 20,996,544

CITY OF HEALDSBURG

COMBINING STATEMENT OF NET POSITION

WATER FUND ACTIVITIES
June 30, 2021
108

6.A.a
Packet Pg. 127 Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21) Water Water Capital Water Debt Water Totals
Operations Replacement Service Capacity Water Fund

OPERATING REVENUES
Charges for services $ 6,059,350 $ - $ - $ - $ 6,059,350 Development fees 31,104 194,469 225,573
Intergovernmental 44,552 44,552
Other 1,851,917 1,851,917
Total Operating Revenues 7,986,923 194,469 8,181,392

OPERATING EXPENSES
Salaries and benefits 2,432,680 2,432,680
Maintenance and operations 1,183,872 1,832 30,615 1,216,319 Administration 855,419 855,419
Depreciation 692,993 692,993
Total Operating Expenses 5,164,964 1,832 30,615 5,197,411 Operating Income (loss) 2,821,959 (1,832) 163,854 2,983,981

NON-OPERATING REVENUES (EXPENSES)
Investment income (loss) 82,175 (15,714) 1,678 68,139
Interest expense (292,284) (292,284)
Total Non-operating Revenue (Expenses) (210,109) (15,714) 1,678 (224,145)

NET INCOME (LOSS) BEFORE CAPITAL
CONTRIBUTIONS AND TRANSFERS 2,611,850 (17,546) 165,532 2,759,836 CAPITAL CONTRIBUTIONS 2,913,677 (2,913,677)

TRANSFERS
Transfers in 1,501,627 205,375 1,707,002
Transfers out (205,375) (306,863) (512,238)
Total Transfers (205,375) 1,501,627 205,375 (306,863) 1,194,764 Change in Net Position 5,320,152 (1,429,596) 205,375 (141,331) 3,954,600 Net Position, Beginning of Fiscal Year 13,401,044 2,199,490 1,559,938 17,160,472 Prior Period Adjustments (118,528) (118,528)
Net Position, Beginning of Fiscal Year, restated 13,282,516 2,199,490 1,559,938 17,041,944 Net Position, End of Fiscal Year $ 18,602,668 $ 769,894 $ 205,375 $ 1,418,607 $ 20,996,544

CITY OF HEALDSBURG

COMBINING STATEMENT OF REVENUES,

EXPENSES, AND CHANGES IN NET POSITION

WATER FUND ACTIVITIES
For the Fiscal Year Ended June 30, 2021
109

6.A.a
Packet Pg. 128 Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21) Sewer Sewer Capital Sewer
Operations Drainage Replacement Capacity

ASSETS AND DEFERRED OUTFLOWS OF RESOURCES
Current Assets:

Cash and investments $ 1,855,566 $ - $ 2,450,477 $ 1,435,128 Cash and investments with fiscal agents 2
Pension stabilization investments 694,302 150,918
Accounts receivable 1,173,745 85,787 21,796
Interest receivable 4,621 1,436 1,494
Inventory 20,797
Due from other funds 1,159,889 1,359,756
Total Current Assets 4,908,922 236,705 3,811,669 1,458,418 Noncurrent Assets:

Capital assets
Land 682,880 84,022
Construction in progress 395,409
Depreciable buildings and improvements, net 52,468
Depreciable utility systems, net 50,541,494 6,583,194
Depreciable equipment, net 671,167
Total Noncurrent Assets 52,343,418 6,667,216
Total Assets 57,252,340 6,903,921 3,811,669 1,458,418
Deferred Outflows of Resources:

Deferred loss on debt refunding 766,356
OPEB related 1,763
Pension related 669,496
Total deferred outflows of resources 1,437,615

LIABILITIES AND DEFERRED INFLOWS OF RESOURCES
Current Liabilities:

Accounts payable and accrued liabilities 23,188 4,474 8,522 Due to other funds 1,159,889
Deposits payable 1,100
Bonds payable - current 1,175,133
Interest payable 190,038
Total Current Liabilities 1,389,459 1,164,363 8,522
Noncurrent Liabilities
Bonds payable 20,238,586
Other post-employment benefits liability 10,699
Net pension liability 3,275,806
Total Noncurrent Liabilities 23,525,091
Total Liabilities 24,914,550 1,164,363 8,522
Deferred Inflows of Resources:

OPEB related 379
Pension related 101,580
Total deferred inflows of resources 101,959

NET POSITION
Net investment in capital assets 30,739,663 6,667,216
Restricted 694,302 150,918 3,803,147 1,458,418
Unrestricted 2,239,481 (1,078,576)
Total Net Position $ 33,673,446 $ 5,739,558 $ 3,803,147 $ 1,458,418

CITY OF HEALDSBURG

COMBINING STATEMENT OF NET POSITION

SEWER FUND ACTIVITIES
June 30, 2021
110

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Packet Pg. 129 Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21) Drainage Totals
Capacity Sewer Fund
$ 759,362 $ 6,500,533
2 845,220
6,444 1,287,772
789 8,340
20,797
2,519,645
766,595 11,182,309
766,902
395,409
52,468
57,124,688
671,167
59,010,634
766,595 70,192,943
766,356
1,763
669,496
1,437,615
36,184
1,159,889
1,100
1,175,133
190,038
2,562,344
20,238,586
10,699
3,275,806
23,525,091
26,087,435
379
101,580
101,959
37,406,879
766,595 6,873,380
1,160,905
$ 766,595 $ 45,441,164

111

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Packet Pg. 130 Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21) Sewer Sewer Capital Sewer
Operations Drainage Replacement Capacity

OPERATING REVENUES
Charges for services $ 7,004,552 $ 741,491 $ - $ -
Development fees 315,607
Intergovernmental 139
Other 958,447 928,716 50
Total Operating Revenues 7,963,138 1,670,207 50 315,607

OPERATING EXPENSES
Salaries and benefits 2,662,804 394,683
Maintenance and operations 1,711,623 127,079 49,162 30,615 Administration 1,065,763 136,668
Depreciation 1,980,229 232,127
Total Operating Expenses 7,420,419 890,557 49,162 30,615 Operating Income (loss) 542,719 779,650 (49,112) 284,992

NON-OPERATING REVENUES (EXPENSES)
Investment income (loss) 98,429 15,830 (27,705) (10,631) Interest expense (803,867)
Total Non-operating Revenue (Expenses) (705,438) 15,830 (27,705) (10,631)

NET INCOME (LOSS) BEFORE CAPITAL
CONTRIBUTIONS AND TRANSFERS (162,719) 795,480 (76,817) 274,361 CAPITAL CONTRIBUTIONS 394,012 (394,012)

TRANSFERS
Transfers in 324,796
Transfers out (633,774) (24,796) (2,128,455)
Total Transfers (308,978) (24,796) (2,128,455)
Change in Net Position (77,685) 770,684 (470,829) (1,854,094) Net Position, Beginning of Fiscal Year 33,759,597 4,968,874 4,273,976 3,312,512 Prior Period Adjustments (8,466)
Net Position, Beginning of Fiscal Year, restated 33,751,131 4,968,874 4,273,976 3,312,512 Net Position, End of Fiscal Year $ 33,673,446 $ 5,739,558 $ 3,803,147 $ 1,458,418

CITY OF HEALDSBURG

COMBINING STATEMENT OF REVENUES,

EXPENSES, AND CHANGES IN NET POSITION

SEWER FUND ACTIVITIES
For the Fiscal Year Ended June 30, 2021
112

6.A.a
Packet Pg. 131 Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21) Drainage Totals
Capacity Sewer Fund
$ - $ 7,746,043
115,682 431,289
139
1,887,213
115,682 10,064,684
3,057,487
17,992 1,936,471
1,202,431
2,212,356
17,992 8,408,745
97,690 1,655,939
(6,484) 69,439
(803,867)
(6,484) (734,428)
91,206 921,511

324,796
(1,174,536) (3,961,561)
(1,174,536) (3,636,765)
(1,083,330) (2,715,254)
1,849,925 48,164,884
(8,466)
1,849,925 48,156,418
$ 766,595 $ 45,441,164
113

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Packet Pg. 132 Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21) Electric Capital Electric Electric Totals
Operations Replacement Public Benefit Capacity Electric Fund

ASSETS AND DEFERRED OUTFLOWS OF RESOURCES
Current Assets:

Cash and investments $ 14,904,188 $ 671,621 $ 2,640,301 $ 627,364 $ 18,843,474 Pension stabilization investments 991,585 991,585
Investment in NCPA Reserves 5,963,403 5,963,403
Accounts receivable 2,087,488 2,087,488
Interest receivable 16,112 2,759 654 19,525
Inventory 1,465,167 1,465,167
Due from other funds 15,000 1,359,756 1,374,756
Prepaid items 10,700 10,700
Total Current Assets 25,453,643 2,031,377 2,643,060 628,018 30,756,098 Noncurrent Assets:

Capital assets
Land 48,360 48,360
Construction in progress 948,608 948,608
Depreciable buildings and improvements, net 20,833 20,833 Depreciable utility systems, net 13,273,428 13,273,428
Depreciable equipment, net 426,480 426,480
Total Noncurrent Assets 14,717,709 14,717,709
Total Assets 40,171,352 2,031,377 2,643,060 628,018 45,473,807 Deferred Outflows of Resources:

OPEB related 24,683 24,683
Pension related 926,994 926,994
Total deferred outflows of resources 951,677 951,677

LIABILITIES AND DEFERRED INFLOWS OF RESOURCES
Current Liabilities:

Accounts payable and accrued liabilities 185,639 19,722 94,389 299,750 Deposits payable 119,407 119,407
Retention payable 936 3,446 4,382
Bonds payable - current 117,244 117,244
Loan payable - current 118,696 118,696
Interest payable 4,223 4,223
Total Current Liabilities 546,145 23,168 94,389 663,702 Noncurrent Liabilities
Bonds payable 126,294 126,294
Loan payable 1,570,322 1,570,322
OPEB 149,790 149,790
Net pension liability 4,535,731 4,535,731
Total Noncurrent Liabilities 6,382,137 6,382,137
Total Liabilities 6,928,282 23,168 94,389 7,045,839
Deferred Inflows of Resources:

OPEB related 5,304 5,304
Pension related 140,649 140,649
Total deferred inflows of resources 145,953 145,953

NET POSITION
Net investment in capital assets 14,469,948 14,469,948
Restricted 991,585 2,008,209 2,548,671 628,018 6,176,483 Unrestricted 18,587,261 18,587,261
Total Net Position $ 34,048,794 $ 2,008,209 $ 2,548,671 $ 628,018 $ 39,233,692

CITY OF HEALDSBURG

COMBINING STATEMENT OF NET POSITION

ELECTRIC FUND ACTIVITIES
June 30, 2021
114

6.A.a
Packet Pg. 133 Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21) Electric Capital Electric Electric Totals
Operations Replacement Public Benefit Capacity Electric Fund

OPERATING REVENUES
Charges for services $ 12,269,713 $ - $ 343,772 $ - $ 12,613,485 Development fees 21,328 66,105 87,433
Intergovernmental 2,610 2,610
Other 1,200,241 581,782 1,782,023
Total Operating Revenues 13,493,892 925,554 66,105 14,485,551

OPERATING EXPENSES
Purchase of power 3,782,712 3,782,712
Salaries and benefits 2,796,605 118,402 2,915,007
Maintenance and operations 4,296,823 207,534 497,953 5,002,310 Administration 1,364,753 1,364,753
Depreciation 507,933 507,933
Total Operating Expenses 12,748,826 207,534 616,355 13,572,715 Operating Income (loss) 745,066 (207,534) 309,199 66,105 912,836

NON-OPERATING REVENUES (EXPENSES)
Investment income 216,044 9,003 907 225,954
Interest expense (22,231) (22,231)
Total Non-operating Revenue (Expenses) 193,813 9,003 907 203,723

NET INCOME (LOSS) BEFORE CAPITAL
CONTRIBUTIONS AND TRANSFERS 938,879 (207,534) 318,202 67,012 1,116,559 CAPITAL CONTRIBUTIONS 659,038 (659,038)

TRANSFERS
Transfers in 5,343 775,457 780,800
Transfers out (737,459) (5,343) (175,457) (918,259)
Total Transfers (732,116) 775,457 (5,343) (175,457) (137,459) Change in Net Position 865,801 (91,115) 312,859 (108,445) 979,100 Net Position, Beginning of Fiscal Year 33,301,521 2,099,324 2,235,812 736,463 38,373,120 Prior Period Adjustments (118,528) (118,528)
Net Position, Beginning of Fiscal Year, restated 33,182,993 2,099,324 2,235,812 736,463 38,254,592 Net Position, End of Fiscal Year $ $ 34,048,794 $ 2,008,209 $ 2,548,671 $ 628,018 $ 39,233,692

CITY OF HEALDSBURG

COMBINING STATEMENT OF REVENUES,

EXPENSES, AND CHANGES IN NET POSITION

ELECTRIC FUND ACTIVITIES
For the Fiscal Year Ended June 30, 2021
115

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Packet Pg. 134 Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21) Vehicle Information Building
Maintenance Services Maintenance Totals
ASSETS
Current Assets:

Cash and investments $ 3,867,198 $ 1,271,976 $ 853,692 $ 1,236 $ 5,994,102 Accounts receivable 39,497 18,984 58,481
Loans and notes receivable 7,627 7,627
Interest receivable 4,646 930 5,576
Inventory 7,489 7,489
Prepaid items 16,497 16,497
Total Current Assets 3,886,182 1,284,111 878,746 40,733 6,089,772 Noncurrent Assets:

Capital assets
Depreciable buildings and improvements, net 2,266,227 2,266,227 Depreciable equipment, net 3,087,508 736,067 3,823,575
Total Noncurrent Assets 3,087,508 736,067 2,266,227 6,089,802 Total Assets 3,886,182 4,371,619 1,614,813 2,306,960 12,179,574

LIABILITIES
Current Liabilities:

Accounts payable and accrued liabilities 526,828 7,867 14,617 12,639 561,951 Due to other funds 298,162 298,162
Deposits payable 30,000 30,000
Capital lease payable - current 22,065 22,065
Claims payable - current 137,942 137,942
Compensated absences 716,822 716,822
Total Current Liabilities 1,381,592 37,867 36,682 310,801 1,766,942 Noncurrent Liabilities
Claims payable 303,692 303,692
Compensated absences 1,790,301 1,790,301
Total Noncurrent Liabilities 2,093,993 2,093,993
Total Liabilities 3,475,585 37,867 36,682 310,801 3,860,935

NET POSITION
Net investment in capital assets 3,087,508 714,002 2,266,227 6,067,737 Unrestricted 410,597 1,246,244 864,129 (270,068) 2,250,902 Total Net Position $ 410,597 $ 4,333,752 $ 1,578,131 $ 1,996,159 $ 8,318,639

CITY OF HEALDSBURG

COMBINING STATEMENT OF NET POSITION

INTERNAL SERVICE FUNDS
June 30, 2021
Benefit
Insurance and
116

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Packet Pg. 135 Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21) Insurance and Vehicle Information Building
Benefit Maintenance Services Maintenance Totals

OPERATING REVENUES
Charges for services $ 947,802 $ 1,299,589 $ 2,171,357 $ 711,106 $ 5,129,854 Other 15,310 15,310
Total Operating Revenues 947,802 1,314,899 2,171,357 711,106 5,145,164

OPERATING EXPENSES
Salaries and benefits 812,175 342,460 710,254 330,557 2,195,446 Maintenance and operations 400,450 1,036,910 521,796 1,959,156 Administration 133,323 170,564 137,330 441,217
Depreciation 596,335 261,305 260,497 1,118,137
Total Operating Expenses 812,175 1,472,568 2,179,033 1,250,180 5,713,956 Operating Income (loss) 135,627 (157,669) (7,676) (539,074) (568,792)

NON-OPERATING REVENUES (EXPENSES)
Investment income 3,247 487 231,839 235,573
Total Non-operating Revenue 3,247 487 231,839 235,573
INCOME (LOSS) BEFORE TRANSFERS 135,627 (154,422) (7,189) (307,235) (333,219)

TRANSFERS
Transfers in 130,000 130,000
Transfers out (20,850) (33,513) (11,782) (66,145)
Total Transfers 109,150 (33,513) (11,782) 63,855
Change in Net Position 135,627 (45,272) (40,702) (319,017) (269,364) Net Position, Beginning of Fiscal Year 274,970 4,379,024 1,618,833 2,315,176 8,588,003 Net Position, End of Fiscal Year $ 410,597 $ 4,333,752 $ 1,578,131 $ 1,996,159 $ 8,318,639

CITY OF HEALDSBURG

COMBINING STATEMENT OF REVENUES,

EXPENSES, AND CHANGES IN NET POSITION

INTERNAL SERVICE FUNDS
For the Fiscal Year Ended June 30, 2021
117

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Packet Pg. 136 Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21) Page Intentionally Left Blank
118

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Packet Pg. 137 Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21) Insurance and Vehicle Information Building
Benefit Maintenance Services Maintenance Totals

CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers $ 904,958 $ 1,376,960 $ 2,171,357 $ 946,267 $ 5,399,542 Receipts from other operating activities 15,310 15,310
Payments to suppliers (601,912) (1,281,295) (671,773) (2,554,980) Payments to employees (578,223) (342,460) (710,254) (330,557) (1,961,494) Net Cash Provided (Used) by Operating Activities 326,735 447,898 179,808 (56,063) 898,378

CASH FLOWS FROM NON-CAPITAL AND RELATED

FINANCING ACTIVITIES
Transfers in 130,000 130,000
Transfers out (20,850) (33,513) (11,782) (66,145)
Due to/from other funds 298,162 298,162
Loans repaid (issued) (841) (841)
Net Cash Provided (Used) for Non-Capital and
Related Financing Activities 109,150 (34,354) 286,380 361,176

CASH FLOWS FROM CAPITAL AND RELATED

FINANCING ACTIVITIES
Payments for capital lease (233,781) (233,781)
Cash received (loss) from sale of capital assets - -
Acquisition and construction of capital assets (546,479) (575,728) (1,122,207) Net Cash Provided (Used) for Capital and Related
Financing Activities (546,479) (233,781) (575,728) (1,355,988)

CASH FLOWS FROM INVESTING ACTIVITIES
Investment income 6,231 2,740 232,213 241,184
Net Cash Provided by Investing Activities 6,231 2,740 232,213 241,184 Increase (Decrease) in cash and cash equivalents 326,735 16,800 (85,587) (113,198) 144,750 Cash and Cash Equivalents, Beginning of Fiscal Year 3,540,463 1,255,176 939,279 114,434 5,849,352 Cash and Cash Equivalents, End of Fiscal Year $ 3,867,198 $ 1,271,976 $ 853,692 $ 1,236 $ 5,994,102

RECONCILIATION OF CASH AND CASH EQUIVALENTS
Cash and investments $ 3,867,198 $ 1,271,976 $ 853,692 $ 1,236 $ 5,994,102 Total Cash and Cash Equivalents $ 3,867,198 $ 1,271,976 $ 853,692 $ 1,236 $ 5,994,102

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

Operating income (loss) $ 135,627 $ (157,669) $ (7,676) $ (539,074) $ (568,792) Adjustments to reconcile operating income (loss) to
net cash provided (used) by operating activities:

Depreciation 596,335 261,305 260,497 1,118,137
Changes in assets and liabilities:
(Increase) decrease in accounts receivables 1,024 235,161 47,371 283,556 (Increase) decrease in inventory 2,224 2,224
(Increase) decrease in prepaid expenses (15,372) 585 (14,787) Increase (decrease) in accounts payable
and accrued liabilities 89,280 (70,363) (58,449) (12,647) (52,179) Increase (decrease) in claims payable (133,733) (133,733) Increase (decrease) in deposits payable 30,000 30,000
Increase (decrease) in compensated absences 233,952 233,952 Net Cash Provided (Used) by Operating Activities $ 326,735 $ 447,898 $ 179,808 $ (56,063) $ 898,378

INTERNAL SERVICE FUNDS
For the Fiscal Year Ended June 30, 2021

CITY OF HEALDSBURG

COMBINING STATEMENT OF CASH FLOWS
119

6.A.a
Packet Pg. 138 Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21) Post RDA Post RDA Plaza Flowers Community
Successor Debt Retirement Veterans Benefit
Agency Fund Trust Trust
Assets
Cash and investments $ 3,348,767 $ 2,993 $ 6,656 $ 39,860 Cash and investments
with fiscal agent 2,517,696
Interest receivable 3,392 41
Loans and notes receivable 3,273,167
Capital assets, net of depreciation 528,300
Total Assets 7,153,626 2,520,689 6,656 39,901
Liabilities
Accounts payable 106
Interest payable 650,824
Noncurrent liabilities
Due within one year 2,379,421
Due in more than one year 37,060,071
Total Liabilities 40,090,316 106
Net Position
Net position held in trust $ 7,153,626 $ (37,569,627) $ 6,550 $ 39,901

CITY OF HEALDSBURG

COMBINING STATEMENT OF FIDUCIARY NET POSITION

FIDUCIARY FUNDS
June 30, 2021
Private Purpose Trust Funds Custodial Funds
120

6.A.a
Packet Pg. 139 Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21) Colonel L.A.

Norton Memorial Cultural Center Senior Center
Trust Trust Trust Total
$ - $ 78,550 $ - $ 3,476,826
2,517,696
82 3,515
3,273,167
528,300
78,632 9,799,504
106
650,824
2,379,421
37,060,071
40,090,422
$ - $ 78,632 $ - $ (30,290,918)

Custodial Funds
121

6.A.a
Packet Pg. 140 Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21) Post RDA Post RDA Plaza Flowers Community
Successor Debt Retirement Veterans Benefit
Agency Fund Trust Trust
Additions
Property taxes $ 1,567,616.00 $ - $ - $ -
Use of money and property 829 119,550
Transfers 2,640,396
Total Revenues 1,568,445 2,759,946
Deductions
Community development 290,455 455 16,181
Interest expense 1,412,801
Transfers 2,640,396
Total Deductions 2,930,851 1,412,801 455 16,181
Change in Net Position (1,362,406) 1,347,145 (455) (16,181) Net Position, beginning 8,516,032 (38,916,772) 7,005 56,082 Prior period adjustments
Net Position, beginning, restated 8,516,032 (38,916,772) 7,005 56,082 Net Position, ending $ 7,153,626 $ (37,569,627) $ 6,550 $ 39,901

CITY OF HEALDSBURG

COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET POSITION

FIDUCIARY FUNDS
For the Fiscal Year Ended June 30, 2021
Private Purpose Trust Funds Custodial Funds
122

6.A.a
Packet Pg. 141 Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21) Colonel L.A.

Norton Memorial Cultural Center Senior Center
Trust Trust Trust Total
$ - $ - $ - $ 1,567,616
161 120,540
2,640,396
161 4,328,552
331 307,422
1,412,801
2,640,396
331 4,360,619
(331) 161 (32,067)
331 78,471 231,813 (30,027,038)
(231,813) (231,813)
331 (30,258,851) 78,471
$ - $ 78,632 $ - $ (30,290,918)
Custodial Funds
123

6.A.a
Packet Pg. 142 Attachment: Financial Statements FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

MANAGEMENT REPORT
AND
AUDITOR’S COMMUNICATION LETTER
June 30, 2021

6.A.b
Packet Pg. 143 Attachment: Management Report FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG
June 30, 2021

TABLE OF CONTENTS
Required Communication in Accordance with
Statement on Auditing Standards No. 114 .......................................................................... 1 Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards .................................... 4 Current Year Recommendations .................................................................................................. 6 Status of Prior Year Recommendations ...................................................................................... 6

6.A.b
Packet Pg. 144 Attachment: Management Report FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21) 1 OFFICES: BEVERLY HILLS ∙ CULVER CITY ∙ SANTA MARIA
MEMBER AMERICAN INSTITUTE OF C.P.A.’S ∙ CALIFORNIA SOCIETY OF MUNICIPAL FINANCE OFFICERS ∙ CALIFORNIA ASSOCIATION OF SCHOOL BUSINESS OFFICIALS

PARTNERS COMMERCIAL ACCOUNTING & TAX SERVICES GOVERNMENTAL AUDIT SERVICES RONALD A LEVY, CPA 9465 WILSHIRE BLVD., 3RD FLOOR 5800 HANNUM AVE., SUITE E CRAIG A HARTZHEIM, CPA BEVERLY HILLS, CA 90212 CULVER CITY, CA 90230 HADLEY Y HUI, CPA TEL: 310.273.2745 TEL: 310.670.2745
ALEXANDER C HOM, CPA FAX: 310.670.1689 FAX: 310.670.1689 ADAM V GUISE, CPA www.mlhcpas.com www.mlhcpas.com

TRAVIS J HOLE, CPA
December 30, 2021
Honorable Mayor and Members of the City Council
City of Healdsburg
Healdsburg, California
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 Healdsburg (City) as of and for the fiscal year ended June 30, 2021 and have issued our report thereon dated December 30, 2021.

Professional standards require that we provide you with the information about our responsibilities under auditing standards generally accepted in the United States of America and Government Auditing Standards, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated June 9, 2021. Professional standards also require that we communicate to you the following information related to our audit.

Significant Audit Findings
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in Note 1 to the financial statements. We noted no transactions entered into by the City during the fiscal year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period.

Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected.

The most sensitive estimates affecting the financial statements were the estimated historical cost and useful lives of certain capital assets, the funding progress and net pension liability of the CalPERS pension plan, the Other Post-employment Benefits (OPEB) actuarial values, the collectability of receivables (including accounts and notes receivable) and claims payable. Management’s estimates of the estimated historical cost and useful lives of certain capital assets are based on historical data and industry guidelines, while the funding progress and net pension liability of the CalPERS pension plan and the OPEB actuarial values are based on third party actuarial estimates. The amount of estimated collectability of receivables is based on historical data and the estimated claims payable is based on a third party consultant’s estimates. We evaluated the key factors and assumptions used to develop these estimates and determined that they are reasonable in relation to the financial statements taken as a whole.

The financial statement disclosures are neutral, consistent, and clear.

6.A.b
Packet Pg. 145 Attachment: Management Report FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21) 2 Difficulties Encountered in Performing the Audit
We encountered no difficulties in dealing with management in performing and completing our audit.

Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. Management has corrected all such misstatements. In addition, two of the misstatements detected as a result of audit procedures and corrected by management were material, either individually or in the aggregate, to the financial statements taken as a whole. These adjustments were for net pension liability and interest receivable.

Disagreements with Management
For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be a significant to the financial statements or the auditor’s report. We are pleased to report that no such disagreements arose during the course of our audit.

Management Representations
We have requested certain representations from management that are included in the management representation letter dated December 30, 2021.

Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to the City’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants.

Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the City’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention.

Other Matters
We applied certain limited procedures to the Management’s Discussion and Analysis, the Budgetary Comparison Schedule, the Schedule of the Plan’s Proportionate Share of the Net Liability and Related Ratios as of Measurement Date – Miscellaneous Plan, the Schedule of Contributions – Miscellaneous Plan, and the Schedule of Funding Progress for Post-Employment Benefits Other than Pensions, which are required supplementary information (RSI) that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding 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 did not audit the RSI and do not express an opinion or provide any assurance on the RSI.

With respect to the supplementary information accompanying the financial statements, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves.

6.A.b
Packet Pg. 146 Attachment: Management Report FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21) 3 Restrictions on Use
This information is intended solely for the use of management, the audit committee, the members of City Council, and others within the City, and is not intended to be, and should not be, used by anyone other these specified parties.

Moss, Levy & Hartzheim, LLP
Culver City, California

6.A.b
Packet Pg. 147 Attachment: Management Report FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21) 4 OFFICES: BEVERLY HILLS ∙ CULVER CITY ∙ SANTA MARIA
MEMBER AMERICAN INSTITUTE OF C.P.A.’S ∙ CALIFORNIA SOCIETY OF MUNICIPAL FINANCE OFFICERS ∙ CALIFORNIA ASSOCIATION OF SCHOOL BUSINESS OFFICIALS

PARTNERS COMMERCIAL ACCOUNTING & TAX SERVICES GOVERNMENTAL AUDIT SERVICES RONALD A LEVY, CPA 9465 WILSHIRE BLVD., 3RD FLOOR 5800 HANNUM AVE., SUITE E CRAIG A HARTZHEIM, CPA BEVERLY HILLS, CA 90212 CULVER CITY, CA 90230 HADLEY Y HUI, CPA TEL: 310.273.2745 TEL: 310.670.2745
ALEXANDER C HOM, CPA FAX: 310.670.1689 FAX: 310.670.1689 ADAM V GUISE, CPA www.mlhcpas.com www.mlhcpas.com

TRAVIS J HOLE, CPA
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND

ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS

PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Honorable Mayor and Members of City Council
City of Healdsburg, California

We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Healdsburg, California (City), as of and for the fiscal year ended June 30, 2021, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated December 30, 2021.

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) to determine the 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 entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

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 or significant deficiencies. However, material weaknesses or significant deficiencies may exist that have not been identified.

6.A.b
Packet Pg. 148 Attachment: Management Report FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21) 5 Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s financial statements are free of 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.

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.

Moss, Levy & Hartzheim, LLP
Culver City, California
December 30, 2021

6.A.b
Packet Pg. 149 Attachment: Management Report FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21) 6 CURRENT YEAR RECOMMENDATIONS
None reported.

STATUS OF PRIOR YEAR RECOMMENDATIONS
Other Matters
2020-01 Finding – Deficiencies in City Employees’ Personnel File During our test of payroll, we noted three (3) employees’ personnel action forms (PAF) were not retained in their personnel file. Without the proper documentation retained in the personnel record, we could not verify the employee’s position or pay-step.

Effect:

When there is a lack of proper personnel documentations, misappropriations could occur and go on occurring without detection.

Recommendations:

We recommend that the City to ensure that all personnel records are retained in accordance with City policies and procedures.

Current Status:

Implemented.

6.A.b
Packet Pg. 150 Attachment: Management Report FY 2020-21 (3449 : Approve the Audited Financial Statements for FY 2020-21)

CITY OF HEALDSBURG

CITY COUNCIL AGENDA STAFF REPORT
MEETING DATE: January 18, 2022
SUBJECT: Destruction of Certain Records in the City Manager's/City Clerk's Office and Administrative Services Department
PREPARED BY: Raina Allan, City Clerk
STRATEGIC INITIATIVE(S):

Provide Effective Governance
RECOMMENDED ACTION(S):

Adopt a Resolution authorizing the destruction of certain records in the City Manager's/City Clerk's Office and the Administrative Services Department.

COMMUNITY ENGAGEMENT/OUTREACH:

Not applicable.

BACKGROUND:

After the records destruction of 2021, it was discovered that there were several boxes of old records (2008 and prior) that were not destroyed as called for in the current retention schedule.

The subject records are no longer needed for administrative, operational, legal or fiscal purposes and have no historical value.

DISCUSSION/ANALYSIS:

Attached, for your review and consideration, are lists of records that staff recommends be destroyed pursuant to the citywide record retention schedule adopted by Resolution 70-2018. As required by the retention schedule, the City Attorney, City Manager, Administrative Services Director and City Clerk have reviewed and signed off on their respective list of records proposed to be destroyed.

ENVIRONMENTAL STEWARDSHIP:

Not applicable.

ALTERNATIVES:

The City Council may choose to not adopt the proposed resolution in which case the records will have to be retained for a longer period than the records retention policy requires.

6.B
Packet Pg. 151
Staff does not recommend this alternative as it could have fiscal impacts in terms of storage costs and set precedent as to a longer retention period.

FISCAL IMPACT:

Funding for this expenditure was included in the fiscal year 2021-22 adopted budget.

ENVIRONMENTAL ANALYSIS:

Pursuant to Title 14, the California Code of Regulations, Section 15378(b)(5) of the California Environmental Quality Act (“CEQA”) guidelines, the proposed action is an administrative activity of the City that will not result in direct or indirect physical changes to the environment; and is therefore not a project for purposes of CEQA.

ATTACHMENT(S):

Resolution
Attachment A - Aministration Records
Attachment B - Finance Records

6.B
Packet Pg. 152

CITY OF HEALDSBURG
RESOLUTION NO. _____-2022

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

HEALDSBURG AUTHORIZING THE DESTRUCTION OF
CERTAIN RECORDS IN THE CITY MANAGER’S/CITY
CLERK’S OFFICE AND ADMINISTRATIVE SERVICES

DEPARTMENT
WHEREAS, the City Council, by Resolution No. 70-2018, adopted a citywide records retention schedule and established the procedure for the destruction of records; and WHEREAS, the City Attorney, City Manager, Administrative Services Director, and City Clerk have reviewed the attached lists of records proposed to be destroyed and find that they can be destroyed pursuant to the established Records Retention Schedules, and in compliance with Section 34090 of the California Government Code; and
WHEREAS, adoption of the proposed resolution would not result in a direct or reasonably foreseeable indirect change in the physical environment and is therefore not a “project” for purposes of Section 21065 of the California Environmental Quality Act and no environmental review is necessary.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Healdsburg hereby authorizes the destruction of the certain records in: (1) the City Manager/City Clerk’s Office as reflected on Attachment “A;” and (2) the Administrative Services Department as reflected on Attachment “B;” and directs the City Clerk to make the necessary arrangements for the actual destruction of said records.

PASSED, APPROVED AND ADOPTED, this 18th day of January 2022, by the following vote:

AYES: Councilmembers: ( )
NOES: Councilmembers: ( )
ABSENT: Councilmembers: ( )
ABSTAINING: Councilmembers: ( )
SO ORDERED: ATTEST:

Osvaldo Jimenez, Mayor Raina Allan, City Clerk

6.B.a
Packet Pg. 153 Attachment: Resolution (3447 : Records Destruction - Administration and Finance)

6.B.b
Packet Pg. 154
Attachment: Attachment A - Aministration Records (3447 : Records Destruction - Administration and Finance) CITY OF HEALDSBURG RECORDS DESTRUCTION 2022
CITY MANAGER/CITY CLERK’S OFFICE

OLD RECORDS STORED AT THE CORPORATION YARD
Record and Box Title Date Box Number
Administration Working Files
- correspondence regarding property acquisition 1989-1996 96300CA Bill Duarte general correspondence 2000
Surplused vehicles maintenance files, inspections, mileage logs 2006-2014 Unsuccessful Statements of Qualifications – various projects 2007-2014 Bids/Specifications 1911-1973 74108CA
See attached transfer list for details
Airport working files and correspondence 2000-2008 2 Boxes CARE Applications 2012-2013
Boch Lawsuit (settled 2013) 2013
Commissions – Traffic Safety Committee Agendas 1979-1985 86085 Expired Agreements/Contracts Prior to 1985 254CA
Administration Working Files (Legal files) 2001-2008 353CA See attached transfer list for details
Redevelopment Projects/Programs 1987-1991 91156CA
See attached transfer list for details
Redevelopment Projects/Programs 1988-1995 91157CA
See attached transfer list for details
Redevelopment Projects/Programs 1982-1986 86047CA
See attached transfer list for details
Redevelopment Projects/Programs 1985-1999 96222CA
See attached transfer list for details
Cable Franchise Renewal 1999 348CA

6.B.b
Packet Pg. 155 Attachment: Attachment A - Aministration Records (3447 : Records Destruction - Administration and Finance) Legal Notices - Publication Proofs 1989-2005 93251CA
Subdivisions - General Correspondence 1989-1994 96201CA See attached transfer list for details
Subdivisions - General Correspondence 1988-1996 152CA
See attached transfer list for details
Subdivisions - General Correspondence 1978-1987 87053CA See attached transfer list for details
Subdivisions - General Correspondence 1989-1995 96200CA See attached transfer list for details
Redevelopment – Hotel site RFPs and RFP brochure 1986-1996 96272CA Municipal Planning and Development Correspondence 1978-1987 87227CA See attached transfer list for details
MOU Information – HPOA 1981-1984; IBEW 1976-1983 1981-1984 84134CA (correspondence, negotiation notes)
MOU Information – HPOA 1985-1989; IBEW 1984-1990 1984-1991 91131CA IAFF 1986-1991 (correspondence, negotiation notes)
HPOA MOU Negotiations Information 1998 98252CA
City Council Meeting recordings (cassette tapes) 1981-1991 91249CA North Area A Annexation - general correspondence 1987-1996 296CA 3 Boxes
Redevelopment Projects/Programs 1991-1996 96271CA
See attached transfer list for details

6.B.b
Packet Pg. 156 Attachment: Attachment A - Aministration Records (3447 : Records Destruction - Administration and Finance)

RECORDS TRANSFER LIST
Department: Division:
_____________________________________________________________________________ Box Title: Year Box Number
BIDS/Specifications 1911-1973 74108CA
_____________________________________________________________________________ Electric Substation equipment - correspondence and invoices 1973-1975 Instruction to bidders - Relocation of electric poles - Johnson Street 1927 Purchase of Holan Aerial Lift 1964
Bid – Centrifugal Pump - 1932
Bid – Roadster Automobile 1929
Bid – Purchase of Municipal improvement bonds maturing on 5/1/1943 Bid – Copper Gutter for East side of City Hall – 1931
Bid – Electric line truck 1964 and Electric equipment truck 193 Bid – Induction Motor 1930
Bid – Fire Siren 1928
Bid – Fire truck 1924
Bid – 1 ½ ton truck 1928
Bid – Automobile, light delivery chassis 1929
Bid – Fire Hose 1929
Bid – Electric lighting transformer 1921
Electric Induction Regular - Notice to bidders 1927
Bid – Submersible pump - 1956
Bid – Cedar Poles 1929 and 1931
Bid – Cedar Poles 1926
Bid – Street Sweeper 1958
Bid – Chlorinator 1931
Bid – Motor Driven centrifugal pump 1927
Rejected bids – construction of a Municipal Sewage Pumping and treatment works 1937 Bid – Paint portions of American Legion Building 1930
Bids – Police cars, 1959, 1961, 1964, and 1966
Bid – Electrolier system in business district 1925
Bid – Sale of Parking Meters 1967
Bid – Construction of pump pit at Municipal Pumping Plant 1927 Bid – Raw Sewage Pump1982
Bid – Police car 1983
Bid – ½ Ton pick-up truck 1983
Bid – Gas Chromatograph 1983
Bid – Utility billing 1965
Bid – Street paving 1915
Bid – Reinforced Concrete Pipe for Solar Terrace drain 1961 Bid – Reservoir improvements 1931
Bid – Furnish and install sewer pipe and sewer pump 1930 Bid – Unsuccessful bidders to furnish and install sewer pipe and sewer pump 1930 Bid – Sewer Rodding Machine 1969
Bid – Street Paving 1931
Bid – Water pipe and miscellaneous valves and fittings 1973

6.B.b
Packet Pg. 157 Attachment: Attachment A - Aministration Records (3447 : Records Destruction - Administration and Finance) Bid – Asphalt oil road surface on Front, Sherman, Lincoln, Grant, University, Center, Prince and First Streets 1929
Bid – Cast iron pipe 1969
Bid – Cast iron pipe 1926
Bid - Water mains and fittings 1929
Bid – Install pipeline and water mains from reservoir to University Street 1929 Bid – Install sewer pipe and furnish sewer pump 1930
Bid – Drill wells 1927
Bid – Removal of Electric poles on Johnson Street 1927
Standards for furnishing and installing water mains 1922 Standards for construction of City sewers 1911
Standards for street improvements 1915
Specifications – Chlorine Sterilization Equipment 1916
Standards for the construction of Curb & Gutter 1916
Fire truck apparatus specifications 1920
Standards for suppling and installing sewer pipes
Standards for Ornamental Street Lighting 1925
Standards for construction of sidewalks 1914
Instructions to bidders for the sewage disposal system extension project 1916 Standards for construction of sewer lines 1912 and 1914 Standards installing water pipes and water mains
Standards for supplying and installing water mains 1914 Standards for installing water mains and connecting same with hydrants – West Street 1918 Standards for installing water mains and connecting same with hydrants – Matheson Street 1919
Specifications for furnishing water pipes – West Street 1917 Specifications for furnishing water pipes – Matheson Street 1919 Gas Franchise with Pacific Public Service Corporation 1917 for 50-year term (Expired 1967) Remain in Office Total Retention Period Year to Destroy Date Sent to Storage 2022

6.B.b
Packet Pg. 158 Attachment: Attachment A - Aministration Records (3447 : Records Destruction - Administration and Finance)

6.B.b
Packet Pg. 159
Attachment: Attachment A - Aministration Records (3447 : Records Destruction - Administration and Finance)

6.B.b
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Attachment: Attachment A - Aministration Records (3447 : Records Destruction - Administration and Finance)

6.B.b
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Attachment: Attachment A - Aministration Records (3447 : Records Destruction - Administration and Finance)

6.B.b
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Attachment: Attachment A - Aministration Records (3447 : Records Destruction - Administration and Finance)

6.B.b
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Attachment: Attachment A - Aministration Records (3447 : Records Destruction - Administration and Finance)

6.B.b
Packet Pg. 164
Attachment: Attachment A - Aministration Records (3447 : Records Destruction - Administration and Finance)

6.B.b
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Attachment: Attachment A - Aministration Records (3447 : Records Destruction - Administration and Finance)

6.B.b
Packet Pg. 166
Attachment: Attachment A - Aministration Records (3447 : Records Destruction - Administration and Finance)

6.B.b
Packet Pg. 167
Attachment: Attachment A - Aministration Records (3447 : Records Destruction - Administration and Finance)

6.B.b
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Attachment: Attachment A - Aministration Records (3447 : Records Destruction - Administration and Finance)

6.B.b
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Attachment: Attachment A - Aministration Records (3447 : Records Destruction - Administration and Finance)

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Attachment: Attachment B - Finance Records (3447 : Records Destruction - Administration and Finance) CITY OF HEALDSBURG RECORDS DESTRUCTION 2022

ADMINISTRATIVE SERVICES DEPARTMENT

OLD RECORDS STORED AT THE CORPORATION YARD
Record and Box Title Date Box Number

BUSINESS LICENSE
Business License penalty runs and billing registers 2003-2008

FIXED ASSETS
Jane Creecy’s working files regarding fixed assets 1997-2003 3 Boxes Fixed Asset Ledgers - FA master ledger, 1996-1998 982025 FA general ledger, FA depreciation ledger
Individual Binders – not in boxes
- Fixed Asset Listing, Funds 102-103 FY 1994-95
- Fixed Asset Listing, Funds 137-154 FY 1994-95
- Fixed Asset Listing, Funds 104-138 FY 1995-96
- Fixed Asset Listing, Funds 102-103 FY 1995-96
Fixed Asset Master Funds 102-103, Book 1 FY 1996-97
Fixed Asset Master Funds 137-154, Book 2 FY 1996-97
Fixed Assets FY 2005-2006; 072247FA
2006-2007
Fixed assets 2002 & prior
Fixed Assets master lists FY 1978-79 thru 881054
1987-88

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GENERAL LEDGER
Revenue Ledger – Final audit 1978-1979 79219GL
See attached transfer list for details
General Ledger FY 1981-82 82227GL
See attached transfer list for details
Ledgers 1956-1077 77478GL
See attached transfer list for details
General Ledger printouts FY 1981 to 1990 458GL
Journal – CP Balance Sheet (individual not in box) 2001, 2002, 2003 Journal – CP Master Listing (individual not in box) 2003 Journal – CP GL batch transaction list (individual not in box) 2003 General Ledger Analysis 1995-1996 96821GL
General Ledger by fund 101-133 FY 1984-85 85537GL
Ledgers – Villa rents 1956-1974; 1956-1977 77478GL
- Treasurer’s Reports 1975-1977
- Officer’s Reports 1974-1976
- Receipts/Disbursements 1975-1977
General Ledger asset, liability, equity accounts FY 1991-92 92459GL - Funds 101-888; 1099 reporting for 1992
Annual Report to State Controller of financial transactions 1915-1973 73618GL See attached transfer list for details
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Tapes 1991 379GGL
General Ledger 1988-1989 89228GL
See attached transfer list for details
General Ledger 1989-1990 90285GL
See attached transfer list for details
General Ledger 1994-1995 95402GL
See attached transfer list for details
General Ledger Analysis Details Reports 1995-1996 96821GL See attached transfer list for details
General Ledger Printouts 1978-1988 881054GL
See attached transfer list for details

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Packet Pg. 172 Attachment: Attachment B - Finance Records (3447 : Records Destruction - Administration and Finance) MISCELLANEOUS – GENERAL FILES
CAFR Awards 1997-2008
STARS & Municipal Resource Consultants 2000
Sales tax analysis reports
Business Sales Tax Cards 1978-1985
Finance software floppy disks Prior to 1997
RDA Statement of Indebtedness 2001-02; 2011-12 122422GF

MISCELLANEOUS RECEIVABLES
State Controller’s Reports 2004-2005 & 082415
See attached transfer list for details 2007-2008
Kurt Hahn’s working files regarding Hotel, Post, 1981-1988 88347MR TAX Allocation Bonds, Debt Service
Grants Receivable 1993-1999 99631MR
See attached transfer list for details
CRA Operating Loan and other receivables FYs 1982-83 90450MR See attached transfer list for details to 1989-90
Hbg. Public Improvement Corporation (HPIC) Tax Returns 1987-2010 2373MR See attached transfer list for details
FEMA 1986 1986 861000MR
See attached transfer list for details
FEMA 1995 1995 95999MR
See attached transfer list for details
FEMA 1986; 1995; 1997 1986-1997 98998MR
See attached transfer list for details
Debt Service (Retired) 1990-1998 98878MR
See attached transfer list for details
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Grants Receivable 85-86 & Prior Years 86315MR
Grants - TDA, STA, Airport, FMHA Prior to 6/1981 81178MR

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Packet Pg. 173 Attachment: Attachment B - Finance Records (3447 : Records Destruction - Administration and Finance) Retired Debt Service – 1990-1998 98878MR
See attached transfer list for details
Community Redevelopment Agency FY 1985-1986 to 89437MR
See attached transfer list for details FY 1989-1990
Miscellaneous Receivables/Grants 1983 to 1988 88205MR
See attached transfer list for details
Administration Grant – Vineyard Plaza 1983 – 1985 85317MR Redevelopment Files – Kurt Hahn and Marge Becker 1983 – 1986 86316MR See attached transfer list for details
EPA Grant Files – Kurt Han and Marge Hiner 1984 – 1986 86352 MR See attached transfer list for details
Miscellaneous Receivables 1985-86 to 1988-89 89440MR
Miscellaneous Receivables Prior to 6/3/1981 81178MR
`See attached transfer list for details
Debt Service 1990-1995 2071MR
See attached transfer list for details
Grants Receivable 1985-1987 87929MR
See attached transfer list for details
EPA Grant 1982 82534MR
See attached transfer list for details
CRA Files 1988-1994 94544 MR
See attached transfer list for details

PAYROLL
Miscellaneous Payroll – FIT, SIT, SDI, SUT 1995-2005 1995-2005 ICMA wires 2004, W2’s 2001-04, master work 2005
Payroll Registers 7/1988 – 6/1989 89234PR
Validation Ledgers 1996-97; 1999-2000 021086
See attached transfer list for details 2001-2002
Payroll monthly reports (vacation, SIC/comp FY 1996-97 97623PR

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Packet Pg. 174 Attachment: Attachment B - Finance Records (3447 : Records Destruction - Administration and Finance) Payroll Registers FY 1991-92 92418PR
Payroll Registers FY 1977-78 78216PR
Payroll Taxes/reports 1987-1995 95589PR
See attached transfer list for details
Payroll Registers 1982-1992 92536PR
See attached transfer list for details
-------
Annual Earning Records 1988-1992 92593PR
See attached transfer list for details
Payroll Reports 2000-2001FY 01954PR
See attached transfer list for details

PURCHASING
Bids 2002-2003
Bids 2008
Purchase Orders FY 2010 – A through O FY 2010
Purchase Orders FY 2010 – P through Z FY 2010
Purchase Orders FY 2008-2009 L through Z FY 2008-2009
Purchase Orders A through Z FY 2008
Purchase Orders FY 2001
Inventory Master List 1998

RECEIPT BOOKS
Police Department Receipt Books 2001-2005 993RB
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CDC Receipt Books 2004-2005 052045RB

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UTILITY BILLING
Closed accounts – Utility Billing (small green box) 2001-2002 02949UB Utility Billing underbilling adjustment 2004-2005
Electronic Fund Transfers – Utilities EFT Back-up FYs 1996-97; 012065UB 1997-98; 1998-99
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Utility billing closed accounts 2001-2002 FY 02949UB
See attached transfer list for details

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CITY OF HEALDSBURG

CITY COUNCIL AGENDA STAFF REPORT
MEETING DATE: January 18, 2022
SUBJECT: Conditionally award a contract for the Water Reclamation Facility Equalization Pond Solids Removal and Disposal Project for an amount of $205,692
PREPARED BY: Patrick Fuss, Water/Wastewater Engineer
STRATEGIC INITIATIVE(S):

Maintain and Improve Infrastructure and Facilities
RECOMMENDED ACTION(S):

Adopt a resolution conditionally awarding the Water Reclamation Facility Equalization Pond Solids Removal and Disposal Project, Project PWS942, to Clean Harbors Environmental Services, Inc. for an amount not to exceed $205,692, authorizing the City Manager to execute the contract, approve change orders up to 10% of the original bid amount, authorizing a budget augmentation of $226,262 within the Wastewater Fund and authorizing the transfer of $226,262 from the Wastewater Impact Fee Fund to the Wastewater Fund.

COMMUNITY ENGAGEMENT/OUTREACH:

Not applicable.

BACKGROUND:

The Water Reclamation Facility (WRF) receives and treats all of the City’s sanitary wastewater conveyed to it through the sewage collection system. The sewage collection system has the capacity to deliver more flow to the WRF than the WRF can treat. The portion of peak flow in excess of treatment capacity, is routed to the equalization pond where the flow can be stored and them brought into the treatment plant for processing when peak flows have subsided.

The equalization pond also serves as a treatment element as well. If there is an upset in the treatment process, flow is routed to the equalization pond and stored until the issue is corrected and the stored flow can be slowly removed from the equalization pond for re-processing.

Similarly, when the centrifuge at the WRF, which dewaters the biosolids that must be periodically removed from the treatment process, was being serviced out of state, the waste biosolids were sent to the equalization pond.

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Wastewater and process streams are ladened with solids. When the flows are stored in the equalization pond, the solids tend to settle out. Over the years, approximately 2 feet of solids have accumulated in the equalization pond, and the portions of the accumulated solids tend to flow back to the treatment process with liquid being removed from the equalization pond. The accumulated solids are largely inert and displace biomass that actively treats the wastewater at the WRF.

Staff have found that fully emptying the equalization pond is impossible without disrupting the treatment process, and a significant portion of the storage volume of the equalization pond is unavailable for use due to a buildup of solids. The equalization pond provides a buffer from high flow and for process disruptions. Reduction in the equalization pond’s operational volume leaves the WRF vulnerable to overflow. Therefore, the solids should be removed to restore the equalization pond to full operational capacity.

DISCUSSION/ANALYSIS:

Staff have investigated approaches to clean the equalization pond. Removal of the solids by dredging or pumping of the solids slurry without damage to the liner appears to be possible, but it is specialized work that is outside of the ability of City Staff. Staff prepared a capital improvement project (PWS942) to remove and dispose of the solids. Project PWS942 was for bid and was advertised in accordance with City Purchasing Policy.

Bids were opened on December 9, 2021, and two bids were received. The lowest responsible, responsive bid was received from Clean Harbors Environmental Services, Inc. Clean Harbors Environmental Services, Inc., has experience in this type of work, and the bid price offered is within the engineer’s estimate for the work.

ENVIRONMENTAL STEWARDSHIP:

The Water Reclamation Facility is essential in treating wastewater generated by the City. The equalization pond is a key component in the Water Reclamation Facility, allowing for storage of excess flow and process upset streams within the Water Reclamation Facility. Restoration of the equalization pond to full capacity will aid the Water Reclamation Facility to operated effectively and efficiently to safeguard the environment.

ALTERNATIVES:

City Council may elect to not award the Equalization Pond Solids Removal and Disposal Project to Clean Harbors Environmental Services, Inc. If City Council makes this election, staff requests further direction from City Council.

FISCAL IMPACT:

The bid price for the Equalization Solids Removal and Disposal Project is $205,692.00. Staff recommends a 10% contingency of $20,570.00 be established to address unforeseen circumstances that may arise during implementation of this project. The total budget for the project will be established at $226,262.

City staff propose using Wastewater Development Impact Fees to fund this contract as the scope of the project is centered on increasing City water supply infrastructure. A Budget Amendment is

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included in Exhibit A of the proposed Resolution. The Budget Amendment includes a transfer of funds from the Wastewater Development Impact Fee Fund to the Wastewater Fund, along with a spending authority increase in the Wastewater Fund equal to the project cost plus contingency.

ENVIRONMENTAL ANALYSIS:

The work to be conducted under this project is maintenance of a publicly-owned wastewater treatment facility and falls under a Class 1 Categorical Exemption under California Code of Regulations, Title 14, Division 6, Chapter 3, Section 15301.

ATTACHMENT(S):

Resolution
Exhibit A

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CITY OF HEALDSBURG
RESOLUTION NO. _________

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

HEALDSBURG CONDITIONALLY AWARDING THE WATER

RECLAMATION FACILITY SOLIDS REMOVAL AND
DISPOSAL PROJECT, PROJECT PWS942, TO CLEAN
HARBORS ENVIRONMENTAL SERVICES INC. FOR AN
AMOUNT NOT TO EXCEED $205,692 AND AUTHORIZING

THE CITY MANAGER TO EXECUTE THE CONTRACT AND
APPROVE CHANGE ORDERS UP TO 10 % OF THE ORIGINAL

BID AMOUNT
WHEREAS, the City’s wastewater is treated at the Water Reclamation Facility; and WHEREAS, the Water Reclamation Facility is equipped with an equalization pond to accommodate peak flows in excess of the Facility’s capacity and to store process upsets for return to treatment; and
WHEREAS, the equalization pond has accumulated solids that are displacing the equalization pond usable volume and impair the usability of the equalization pond; and WHEREAS, City Staff has neither the equipment or expertise to remove the accumulated solids in the equalization pond; and
WHEREAS, City Staff solicited for and received formal bids for the Water Reclamation Facility Equalization Pond Solids Removal and Disposal Project, Project PWS942; and WHEREAS, Clean Harbors Environmental Services, Inc., provided the lowest responsive bid for the work, with a bid amount of $205.692; and
WHEREAS, Clean Harbors Environmental Services, Inc., is qualified to perform the work, regularly engages to do this type of work, and provided a reasonable bid for the City; and WHEREAS, the project is categorically exempt under California Environmental Quality Act, Title 14, Article 19, Section 15301, Class 1 for maintenance of an existing wastewater facility with no expansion of the existing use.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Healdsburg hereby:

1. Finds that the project is categorically exempt under California Environmental Quality Act and requires no further environmental review.

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