INTRODUCTORY SECTION
14.A
i
14.A
ii
14.A
iii
14.A
iv
14.A
CITIZENS
2020-2021
CITY COUNCIL
KARLEE MEYER-MAYOR
MALCOLM LILIENTHAL-MAYOR PRO-
TEM
VACANT-COUNCILMEMBER
RUSS BROWN-COUNCILMEMBER
LINDA KRUPA-COUNCILMEMBER
CITY MANAGER
CHRISTOPHER LOPEZ
CITY CLERK
JOHN PAUL MAIER
FINANCE DIRECTOR
LORENA ROCHA
INTERIM PUBLIC WORKS DIRECTOR
LYNN MERRILL
ACTING ENGINEERING DIRECTOR /
CITY ENGINEER
STEVE LORISO
CHIEF OF POLICE
EDDIE PUST
FIRE CHIEF
VACANT
SENIOR LIBRARIAN
KATHERINE CAINES
COMMUNITY DEVELOPMENT DIRECTOR
H.P . KANG
INTERIM CITY ATTORNEY
STEVEN GRAHAM
2020-2021
CITY TREASURER
GLADYS "SUE" SAVAGE
v
14.A
PRINCIPAL OFFICIALS OF THE CITY OF HEMET, CALIFORNIA
June 30, 2021
Elected and Administrative Officials
City Council
K a r l e e M e y e r M a y o r
Malcolm Lilienthal M a y o r P r o - T e m
R u s s B r o w n C ouncilmember
L i n d a K r u p a C ouncilmember
Vacant C ouncilmember
Other Elected Officials
G l a d y s “ S u e ” S a v a g e C i t y T r e a s u r e r
Administrative Officials
Christopher Lopez C i t y M a n a g e r
S t e v e n G r a h a m I n t e r i m C i t y A t t o r n e y L o r e n a R o c h a F i n a n c e D i r e c t o r H . P . K a n g C o m m u n i t y S e r v i c e s D i r e c t o r Eddie Pust Police Chief
Vacant F i r e C h i e f
Lynn Merrill I n t e r i m P W D i r e c t o r
S t e v e L o r i s o A c t i ng Engineering Director/City Engineer K a t h e r i n e C a i n e s S e n i o r L i b r a r i a n vi
14.A
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented
to
City of Hemet
California
For its
Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June
30, 2020
Executive Director/CEO
vii
14.A
FINANCIAL SECTION
14.A
Independent Auditors' Report
The Honorable City Council
City of Hemet, California
Report on the Financial Statements
We have audited the accompanying financial statements of the go vernmental activities, business-type activities, each major fund, and the aggregate remaining fund information of the City of Hemet, California, as of and for the year ended June 30, 2021, and the related not es to the financial statements, which collectively comprise the City of Hemet’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 presenta tion 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 materia l 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 of 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 materi al 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 sufficie nt and appropriate to provide a basis for our audit opinions.
1
14.A
Opinions
In our opinion, the financial statements referred to above pres ent fairly, in all material respects, the respective financial position of the governmental activities, business-type activities, each major fund, and the aggregate remaining fund information of the City of Hemet, California, as of June 30, 2021, and the respective changes in financial position, and, where applicable , cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Change in Accounting Principle
As reported in the financial statements, in fiscal year 2020-21, the City adopted new accounting guidance, GASBS 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, the budgetary comparison information, and other required supplementary information as listed in the table of contents be presented to supplement the basic financial statements.
Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, w hich consisted of inquiries of management about the methods of preparing the information and c omparing the information for consistency with management’s responses to our inquiries, the b asic 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 to 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 introductory section, the supplementary information as listed in the table of contents, and statistical section, are presented for purposes of additional analysis and are not a required part of the basic financial statements.
The combining statements and schedules listed in the supplementary information section of the table of contents are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the financial stat ements. 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 informatio n directly to the underlying accounting and other records used to prepare the financial statements or to the financial statement themselves, and other additional procedures in accordance with auditing standar ds generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation the basic financial statements as a whole.
2
14.A
The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated February 15, 2022, on our consideration of the City of Hemet’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 and should be considered in assessing the results of our audit.
February 15, 2022
3
14.A
City of Hemet
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2021
The following discussion and analysis of the financial performa nce of the City of Hemet provides an overview of the City’s financial activities for the fiscal year ended June 30, 2021. We encourage readers to consider the information presented here in conjunction with the transmittal letter and financial statements identified in the accompanying table of contents.
OVERVIEW OF THE FINANCIAL STATEMENTS
The annual report consists of five parts – 1) management’s discussion and analysis (this section), 2) the basic financial statements, 3) required supplementary information, 4) a supplementary section that presents combining statements for non-major governmental funds and internal service funds, a nd 5) a statistical section. The basic financial statements include two kinds of statements that present different views of the City; the government-wide financial statements and the fund financial statements.
Government-wide Financial Statements
The governmental fund statements provide readers with a broad overview of the City’s finances.
The Statement of Net Position presents financial information on all of the City’s assets/def erred outflows of resources and liabilities/deferred inflows, with the differe nce reported as net position (Exhibit 2). Over time, increases or decreases in net position can serve as a useful indicator of whether the financial position of the City is improving or deteriorating.
The Statement of Activities presents information regarding changes to the City’s net position during the most recent fiscal year (Exhibit 3). All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported for some items that will only result in cash flows in future fiscal periods.
In the Statement of Net Position and the Statement of Activities, we divide the City into two kinds of activities:
Governmental activities – Most of the City’s basic services are reported here. Sales taxes, property taxes, state subventions, and other revenues finance most of th ese activities. The governmental activities of the City include general government, police, fire , public works, community development, housing, parks and library.
Business-type activities – The City charges a fee to customers to help it cover all or most of the cost of the services accounted for these funds. The business-type activities of the City include water.
Fund Financial Statements
A fund is a grouping of related accounts used to maintain control over resources that have been segregated for specific activities or objec tives. The City uses fund accou nting to ensure and demonstrate compliance with finance-related legal requirements.
The fund financial statements provide detailed information about the City’s most significant funds – not the City as a whole. Some funds are required to be established by State law or by bond covenants. However, the City Council establishes many other funds to help it control and manage money for particular purposes or to show that it is meeting administrative responsibilities f or using certain taxes, grants, or other money.
All of the funds of the City can be divided into three categori es: Governmental Funds, Proprietary Funds, and Fiduciary Funds.
Governmental Funds:
Most of the City’s basic services are reported in governmental funds, which focus on how money flows into and out of those funds and the balances left at year end that are available for spending. These funds are reported using an accounting method called modified accrual accounting, which measures cash and all other current financial assets that can readily be converted to cash. The governmental fund statements provide a 4
14.A
City of Hemet
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2021
detailed short-term view of the City’s general government operations and the basic services it provides.
Governmental fund information he lps determine whether there are more or fewer financial resources that can be spent in the near future to finance the City’s programs. We describe the relationship or differences between governmental activities (reported in the Statement of Net Position and the Statement of Activities) and governmental funds in a reconciliation at the bottom of the fund financial statements.
Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial st atements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of reven ues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.
The City adopts an annual appropriation budget for its governmental funds. A budgetary comparison statement is provided for general and special revenue major funds to demonstrate compliance with budgets.
Proprietary Funds:
When the City charges customers for the services it provides – whether to outside customers or to other units of the City – these services are generally reported in proprietary funds. Proprietary funds are reported in the same way that all activities are reported in the Stateme nt of Net Position and the Statement of Activities.
Proprietary funds can be classified into two subcategories: enterprise funds and internal service funds.
Enterprise fund is reported as business-type activities in the government-wide financial statements.
In fact, the City’s enterprise fund is the same as the business -type activities we report in the government-wide statements but provide more detail and additional information, such as cash flows, for proprietary funds.
Internal service funds are an accounting device used to accumulate and allocate costs internally among the City’s various functions. The internal service funds account for the management of the City’s liability insurance and for medical and dental coverage for its employees; as well as, unemployment and other postemployment benefits, administrative services, vehicle and facility maintenance, city attorney and emergency services. Internal ser vice funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Because these services benefit governmental functions, they have been included within governmental activities in the government-wide financial statements.
Fiduciary Funds:
Fiduciary funds are used to account for resources held for the benefit of parties outside the City. The City is an agent for certain assets held for, and under the control of, other organizations and individuals. All of the City’s fiduciary activities are reported in a separate Stat ement of Fiduciary Net Position. We exclude these activities from the City’s other financial statements because the City cannot use these assets to finance its operations. The City is responsible for ensuring that the assets reported in these funds are used for their intended purposes.
Notes to the Financial Statements
The notes to financial statements provide additional information that is essential for a full understanding of the information provided in the government-wide and fund financial statements.
Exhibit 1 summarizes the major features of the City’s financial statements, including the portion of the City government they cover and the types of information they contain . The remainder of this overview section of management’s discussion and anal
ysis explains the structure and contents of each of the statements. 5
14.A
City of Hemet
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2021
Exhibit 1
Major Features of the City’s Government-wide and Fund Financial Statements
Fund Statements
Government-wide
Statements
Governmental Funds
Proprietary Funds
Fiduciary Funds
Scope Entire City
government (except
fiduciary funds) and
the City’s component
units
The activities of the City
that are not proprietary
or fiduciary
Activities the City
operates similar to
private businesses
Instances in which the
City is the trustee or
agent for someone
else’s resources
Required financial
statements
Statement of
net position
Statement of
activities
Balance sheet
Statement of
revenues,
expenditures and
changes in fund
balances
Statement of net
position
Statement of
revenues,
expenses and
changes in net
position
Statement of
cash flows
Statement of
fiduciary net
position
Statement of
changes in
fiduciary net
position
Accounting basis and
measurement focus
Accrual accounting
and economic
resources focus
Modified accrual
accounting and current
financial resources
focus
Accrual accounting
and economic
resources focus
Accrual accounting
and economic
resources focus
Type of asset/liability
information
All assets and
liabilities, both
financial and
capital, and short-
term and long-term
Only assets expected to
be used up and liabilities
that come due during the
year or soon thereafter;
no capital assets or long-
term debt included
All assets and
liabilities, both
financial and capital,
and short-term and
long-term
All assets and
liabilities, both short-
term and long-term;
the City’s fiduciary
funds do not currently
contain capital assets
althou
gh they can
Type of
inflow/outflow
information
All revenues and
expenses during
year, regardless of
when cash is
received or paid
Revenues for which
cash is received during
or soon after the end of
the year; expenditures
when goods or services
have been received and
payment is due during
the year or soon
thereafte
r
All revenues and
expenses during the
year, regardless of
when cash is
received or paid
All revenues and
expenses during year,
regardless of when
cash is received or
paid
6
14.A
City of Hemet
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2021
GOVERNMENT-WIDE FINANCIAL STATEMENTS
A summary of the government-wide statement of net position follows:
Exhibit 2
Net Position
(in Millions)
2021 2020 2021 2020 2021 2020
Current and other assets 128.6$ 103.4 $ 29.7$ 26.0 $ 158.3$ 129.4 $ Noncurrent assets 4.4$ 5.9 $ -$ - $ 4.4$ 5.9 $ Capital assets 303.8$ 308.6 $ 4.0$ 4.5 $ 307.8 $ 313.2 $ Total assets 436.8$ 418.0 $ 33.7$ 30.5 $ 470.5$ 448.5 $ Deferred outflows of resources:
OPEB DOR 3.8$ 1.6 $ 0.3$ 0.2 $ 4.1$ 1.8 $ Pension DOR 16.9$ 17.1 $ 0.7$ 0.5 $ 17.6$ 17.7 $ Total deferred
outflows of resources 20.7$ 18.7 $ 1.0$ 0.7 $ 21.7$ 19.5 $ Long-term debt outstanding 155.4$ 142.4 $ 8.9$ 10.0 $ 164.3$ 152.4 $ Other liabilities 22.6$ 20.9 $ 2.1$ 1.8 $ 24.7$ 22.7 $ Total liabilities 178.0$ 163.3 $ 11.0$ 11.8 $ 189.0$ 175.1 $ Deferred inflows of resources:
OPEB DIR 0.3$ 0.1 $ -$ - $ 0.3$ 0.1 $ Pension DIR 0.2$ 2.3 $ -$ 0.2 $ 0.2$ 2.5 $ Total deferred
inflows of resources 0.5$ 2.4 $ -$ 0.2 $ 0.5$ 2.6 $ Net Position:
Net Investment in Capital Assets 303.8$ 308.6 $ 4.0$ 4.5 $ 307.7 $ 313.2 $
Restricted 53.8$ 53.9 $ -$ - $ 53.8$ 53.9 $ Unrestricted (78.5)$ (91.5) $ 19.6$ 14.8 $ (58.9)$ (76.7) $ Total net position 279.1 $ 271.0 $ 23.6$ 19.4 $ 302.7$ 290.4 $ GovernmentActivities Activities
Governmental Total PrimaryBusiness-type
7
14.A
City of Hemet
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2021
A summary of the government-wide statement of activities follows:
Exhibit 3
Changes in Net Position
(in Millions)
2021 2020 2021 2020 2021 2020
Revenues
Program revenues:
Charges for services 16.0 $ 13.3 $ 12.1 $ 12.0 $ 28.1 $ 25.3 $ Operating grants/contributions 4.0 2.4 - 10.4 4.0 12.8 Capital grants/contributions 7.8 8.4 - - 7.8 8.4 General revenues:
Property taxes 8.0 7.9 - - 8.0 7.9 Transient occupancy taxes 0.9 0.8 - - 0.9 0.8 Sales taxes 17.5 13.6 - - 17.5 13.6 Measure U sales tax 14.8 11.7 - - 14.8 11.7 Motor vehicle in-lieu taxes 7.4 7.1 - - 7.4 7.1 Franchise and other taxes 5.5 5.2 - - 5.5 5.2 Investment income and misc. 0.3 1.4 - 0.3 0.3 1.7 Total revenues 82.3$ 71.8 $ 12.1 $ 22.7 $ 94.4 $ 94.5 $ Program expenses
General government 2.0$ 4.1 $ - $ - $ 2.0 $ 4.1 $ Public safety 37.1 39.3 - - 37.1 39.3 Public Safety Measure U 9.6 8.8 - - 9.6 8.8 Community development 5.4 5.1 - - 5.4 5.1 Public works 10.7 12.5 - - 10.7 12.5 Sanitation 2.4 1.8 - - 2.4 1.8 Parks and library 2.9 3.3 - - 2.9 3.3 Interest on long-term debt - - - - - - Water and refuse - - 10.2 9.8 10.2 9.8 Total expenses 70.2$ 75.0 $ 10.2 $ 9.8 $ 80.4 $ 84.8 $ Excess (deficiency) 12.1$ (3.1) $ 1.8 $ 12.9 $ 13.9 $ 9.7 $ Other Financing Sources (Uses)
Transfers In 0.2 $ 0.2 $ - $ - $ 0.2 $ 0.2 $ Transfers Out - - (0.2) (0.2) (0.2) (0.2) Total Other Financing Sources (Uses) 0.2$ 0.2 $ (0.2) $ (0.2) $ - $ - $ Beginning Net Position 271.0$ 273.8$ 19.4$ 5.8 $ 290.4$ 279.6$ Prior Period Adjustment * (4.2)$ 0.2 $ 2.6 $ 1.0 $ (1.6) $ 1.2 $ Ending Net Position 279.1 $ 271.0$ 23.6$ 19.4 $ 302.7$ 290.4$
* Please see details in Note 14 of the Basic Financial Statemen t GovernmentActivities Activities
Governmental Business-type Total Primary
8
14.A
City of Hemet
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2021
The increase or decrease in net position can provide an indication as to whether the overall financial position of the City improved or deteriorated during the year. The Net Position of the City’s governmental activities increased by 3.0% (from $271.0 million to $279.1 million, as restated) in 2021. Despite the ongoing impact of COVID-19 and the significant impact it had to citizens and b usinesses within the community, revenues have remained strong and surpassed fiscal year estimates. The unrestricted net position – the part of net position that can be used to finance daily operations without constraints established by debt covenants, enabling legislation, or other legal requirements – increased f rom a deficit of $91.5 million in 2020 to a deficit of $78.5 million in 2021. This increase is largely due to a change in the Pension and OPEB Allocation in Administrative Services and partly due to sales tax revenues.
Total Net Position – Governmental Activities
Exhibit 4
The Net Position of the City’s business-type activities increased by 21.6% (from $19.4 million to $23.6 million, as restated) in 2021. The increase was due in part to a GASB 75 adjustment that added approximately $2.8 million to fun d balance. Additionally, the g round water management budget was not fully expended and will be used in future years.
The net position (financial position) of the City changed as a result of the revenue and expense fluctuations described below for the governmental and business-type activities of the City.
Governmental Activities
Revenues for the City’s governmental activities saw an overall increase of $10.5 million in 2021. This can be attributed to the strong stream of sales taxes which alone g rew $7.0 million. In addition, Charges for Services have increased in conjunction with the increase in Community Development activity.
9
14.A
City of Hemet
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2021
Revenues by Source – Governmental Activities
Expenses by Function – Governmental Activities
10
14.A
City of Hemet
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2021
Business-Type Activities
The City’s business-type activities had an overall decrease in revenues of $10.6 million in 2021 compared to 2020. This is due to the la rge legal settlement in excess of $10 million that was accrued to fiscal year 2020.
GENERAL FUND BUDGET HIGHLIGHTS
The difference between the adopted budget and the final amended budget reflects a $4.7 million increase in appropriations, excluding operating transfers out, and can be briefly summarized as follows:
General Government budget increased approximately $800,000 larg ely due to Continuing Appropriations carried forward from the prior fiscal year which include a PEG fees project. Mid- year adjustments within the City Manager’s and City Clerk budgets are also included in this overall increase.
Public Safety budget increased by approximately $3.1 million la rgely due to Continuing Appropriations carried forward from the prior fiscal year which include a radio system replacement and an Apparatus Type 1 fire engine. Mid-year adjustments to purchase 5 Police motorcycles also increased the budget appropriations for the fiscal year. Community Development budget increased by approximately $800,00 0 due to Continuing Appropriations carried forward from the prior fiscal year which include SB2 Planning Grant Program. Mid-year adjustments to complete updates to the Housin g Element of the General Plan also increase budget appropriations for the fiscal year.
Actual revenues, excluding transfers in, received for the Gener al Fund were approximately $10.4 million higher than the adopted budget and are summarized as follows:
Taxes exceeded the budget by approximately $9.1 million primarily due to higher than anticipated sales taxes and Measure U transaction tax; as well as, franchise fee payments and property taxes as a result of increased assessed valuations.
Licenses and Permits along with Charges for Services exceeded t he budget by approximately $900,000 due to higher than anticipated development activity. Intergovernmental Revenue exceeded the budget by approximately $360,000 due to higher than anticipated State Motor Vehicle in Lieu Tax; as well as, Mutual Aid Reimbursement.
MAJOR FUNDS
As noted earlier, the City uses fund accounting to provide prop er financial management of the City’s resources and to demonstrate compliance with finance-related legal requirements.
Major Governmental Funds. The General Fund is the chief operating fund of the city. At the end of the current fiscal year, the General Fund’s total fund balance was $39.6 million. The fund balance increased $12.7 million. This increase was partly due to a $2.8 million i ncrease in Measure U funds. While many cities in the nation have been impacted by the COVID-19 pandemi c, the City of Hemet was fortunate to continue to see strong increases in property and sales taxes. H owever, the impact COVID-19 continues to have on interest rates will hinder the City’s potential growth in future fiscal years. This is mainly due to the impact on Retirement Unfunded Liabilities which can result in higher required annual contributions from the City.
Measure U sales tax collection increased $3.1 million for 2021 and the account balance increased from $13.4 million in 2020 to $16.2 million 2021. Of this balance, t here is $1.0 million reserved for ongoing projects, purchases; as well as, its portion of the 20% reserve requirement which calculates out to be approximately $1.9 million.
11
14.A
City of Hemet
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2021
A summary of the Measure U activities follows:
Major Special Revenue Fund. The Sewer and Storm Drain Fund provides Wastewater and Sanitati on services through the City. The net position of the Sewer and Storm Drain Fund increased due to a continued reduction in expenditures.
Major Capital Projects Fund. The Bridges/Streets/Traffic Facilities Fund accounts for the financial transactions for bridges, streets and traffic facilities in the development impact fees funded through developer contributions.
Major Enterprise Funds. Total net position of the Water Fund at the end of the year amounted to $23.6 million, an increase from $19.4 million in 2020. This increase was due in part to a prior period adjustment that restated the ending balance in fiscal year 2020 in the amo unt of $2.6 million, the majority of which is a GASB 75 adjustment.
Measure U Activity For the Year Ended June 30, 2021
Police Fire Total
Revenues:
Police 2/3, Fire 1/3 overall allocation 9,870,761 4,935,381 14,806,142 Expenditures:
Salary & Fringe Benefits (4,314,255) (3,144,828) (7,459,083) Operating Supplies & Services (210,720) (94,530) (305,250) Internal Service Charges (402,600) (114,204) (516,804) Capital Outlay (846,445) (471,879) (1,318,324) (5,774,020) (3,825,441) (9,599,461)
Measure U in Support of General Fund
Public Safety (2,253,867) (159,201) (2,413,068) Change in Fund Balance 1,842,874 950,739 2,793,613 Beginning Fund Balance 7,949,096 5,451,554 13,400,650 Nonspendable - 651,629 651,629
Committed 9,791,970 5,750,664 15,542,634
Ending Fund Balance 9,791,970 6,402,293 16,194,263 12
14.A
City of Hemet
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2021
CAPITAL ASSETS
Capital Assets
(net of depreciation, in millions)
A total of five capital projects were completed in fiscal year 2021:
Project Description Total Project Cost
CIP 5613; Warren & Auto Center Traffic Signal $369,606
CIP 5687; Kirby St. Improvements $493,840
CIP 5700; Whittier Ave Resurfacing $55,260
CIP 5703; 2019/20 Accessible Sidewalks & ADA $243,457
Additional information on the City’s capital assets can be found in Note 5 to the financial statements.
2021 2020 2021 2020 2021 2020
Land 12.3$ 12.3 $ - $ - $ 12.3 $ 12.3 $ Rights of way 190.5 190.5 - - 190.5 190.5 Buildings and improvements 14.3 14.9 2.9 4.2 17.2 19.1 Machinery and equipment 6.7 6.8 0.8 0.1 7.5 6.9 Infrastructure 76.2 80.1 - - 76.2 80.1 Construction in progress 3.8 4.0 0.3 0.2 4.1 4.2 Total 303.8$ 308.6$ 4.0$ 4.5$ 307.8$ 313.1$ TotalActivities Activities
Governmental Business-type
13
14.A
City of Hemet
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2021
LONG-TERM DEBT
Outstanding Debt
(in millions)
The net adjustment to long-term liabilities is an increase of $10.9 million mainly due to a continual increase in aggregate net pension liabilities and OPEB due to changes in actuarial assumptions and investment returns.
Contacting the City’s Financial Management
This financial report is designed to provide citizens, taxpayers, customers, investors and creditors with a general overview of the City’s finances and to show the City’s accountability for the money it receives. If you have questions about this re port or need additional financi al information, contact the City of Hemet Finance Division at 445 E. Florida Avenue, Hemet, California 92543.
2021 2020 2021 2020 2021 2020
OPEB 46.8$ 42.3 $ 3.3 5.8 $ 50.1 $ 48.1 $ Compensated absences 3.0 3.1 0.1 0.1 3.1 3.2 Claims Payable 2.8 2.0 - - 2.8 2.0 Aggregate Net Pension
liabilities 102.9 97.5 5.5 4.2 108.4 101.7 Capital Leases - - - - - - Total Long-Term Liabilities 155.4$ 144.8$ 8.9 $ 10.1$ 164.3 $ 154.9$ TotalActivities Activities
Governmental Business-t ype
14
14.A
THIS PAGE INTENTIONALLY LEFT BLANK
14.A
BASIC FINANCIAL STATEMENTS
14.A
Governmental Business-type
Activities Activities Total
ASSETS
Cash and Investments 113,815,857 $ 27,396,252 $ 141,212,109 $ Receivables:
Accounts 2,582,397 2,187,242 4,769,639 Taxes 453,392 - 453,392 Interest 1,507,949 - 1,507,949 Due from Other Governments 8,398,514 84,650 8,483,164 Due from Fiduciary Funds 1,051,331 - 1,051,331 Inventories 130,322 - 130,322 Prepaid Items 664,460 5,399 669,859 Notes Receivable 7,933,735 - 7,933,735 Allowance for Forgivable Notes (5,576,451) - (5,576,451) Land Held for Resale 2,076,419 - 2,076,419 Capital Assets:
Land 12,348,575 32,975 12,381,550 Rights of Way 190,468,181 - 190,468,181 Construction in Process 3,830,659 324,965 4,155,624 Other Capital Assets, Net 97,127,600 3,615,218 100,742,818 Total Assets 436,812,940 33,646,701 470,459,641
DEFERRED OUTFLOWS OF RESOURCES
Pension Related Items 16,898,295 711,841 17,610,136 OPEB Related Items 3,846,582 267,409 4,113,991 Total Deferred Outflows of Resources 20,744,877 979,250 21,724,127
LIABILITIES
Accounts Payable 5,875,696 602,820 6,478,516 Accrued Salaries and Benefits 2,068,791 56,531 2,125,322 Accrued Liabilities 15,123 5,399 20,522 Deposits 3,764,026 1,438,012 5,202,038 Unearned Revenue 10,837,172 - 10,837,172 Noncurrent Liabilities:
Due Within One Year 2,393,674 40,402 2,434,076 Due in More Than One Year 153,041,445 8,859,889 161,901,334 Total Liabilities 177,995,927 11,003,053 188,998,980
DEFERRED INFLOWS OF RESOURCES
Pension Related Items 185,368 5,121 190,489 OPEB Related Items 317,115 22,045 339,160 Total Deferred Inflows of Resources 502,483 27,166 529,649
NET POSITION
Net Investment in Capital Assets 303,775,015 3,973,158 307,748,173 Restricted for:
Community Development 7,788,639 - 7,788,639 Public Works 28,815,985 - 28,815,985 Public Safety 686,547 - 686,547 Sanitation 15,486,154 - 15,486,154 Libraries:
Expendable 27,227 - 27,227 Nonexpendable 1,000,000 - 1,000,000 Unrestricted (78,520,160) 19,622,574 (58,897,586) Total Net Position 279,059,407$ 23,595,732$ 302,655,139$ City of Hemet
Statement of Net Position
June 30, 2021
The accompanying notes are an integral part of this statement. 15
14.A
Charges Operating Capital
for Grants and Grants and
Functions/Programs Expenses Services Contributions Contributions Governmental Activities:
General Government 1,963,774 $ 2,588,818 $ 1,051,667 $ - $ Public Safety 46,711,261 1,892,385 2,891,614 232,856 Community Development 5,419,544 250,666 - - Public Works 10,727,690 6,926,361 64,216 7,117,877 Sanitation 2,437,344 4,339,059 - - Parks 1,052,244 - - 240,353 Libraries 1,892,497 2,053 31,752 166,497 Total Governmental Activities 70,204,354 15,999,342 4,039,249 7,757,583 Business-type Activities:
Water 10,222,097 12,113,635 - - Total Business-type Activities 10,222,097 12,113,635 - - Total Primary Government 80,426,451$ 28,112,977 $ 4,039,249 $ 7,757,583 $ General Revenues:
Taxes:
Property Taxes
Transient Occupancy Taxes
Sales Taxes
Motor Vehicle in Lieu Taxes (Unrestricted)
Franchise and Other Taxes
Investment Income
Miscellaneous
Transfers
Total General Revenues and Transfers
Change in Net Position
Net Position - Beginning of Year
Prior Period Adjustments
Net Position - End of Year
City of Hemet
Statement of Activities
Year Ended June 30, 2021
Program Revenues
The accompanying notes are an integral part of this statement. 16
14.A
Net (Expense) Revenue and Changes in Net Position
Governmental Business-type
Activites Activities Total
1,676,711$ - $ 1,676,711$
(41,694,406) - (41,694,406)
(5,168,878) - (5,168,878)
3,380,764 - 3,380,764
1,901,715 - 1,901,715
(811,891) - (811,891)
(1,692,195) - (1,692,195)
(42,408,180) - (42,408,180)
- 1,891,538 1,891,538
- 1,891,538 1,891,538
(42,408,180) 1,891,538 (40,516,642)
8,028,096 - 8,028,096
891,349 - 891,349
32,267,900 - 32,267,900
7,393,814 - 7,393,814
5,491,068 - 5,491,068
305,082 (1,968) 303,114
41,866 - 41,866
248,191 (248,191) -
54,667,366 (250,159) 54,417,207
12,259,186 1,641,379 13,900,565
271,000,757 19,359,815 290,360,572
(4,200,536) 2,594,538 (1,605,998)
279,059,407$ 23,595,732$ 302,655,139$
The accompanying notes are an integral part of this statement. 17
14.A
Capital
Projects
General Sewer and Storm Bridges/Streets
Fund Drain ARPA Traffic Facilities
ASSETS
Cash and Investments 35,491,469$ 15,477,379$ 10,837,311$ 5,239,599$ Receivables:
Accounts 1,028,589 1,113,861 - 14,782 Taxes 453,392 - - - Interest 206,349 - - - Due from Other Governments 6,430,556 181,182 - - Due from Other Funds - - - - Due from Fiduciary Fund 1,051,331 - - - Prepaid Items 664,460 - - - Advances to Other Funds - - - - Notes Receivable - - - - Allowance for Forgivable Notes - - - - Land Held for Resale - - - - Total Assets 45,326,146$ 16,772,422$ 10,837,311$ 5,254,381$
LIABILITIES
Accounts Payable 1,320,717$ 1,258,555$ -$ 38,600$ Accrued Salaries and Benefits 1,950,129 27,713 - - Accrued Liabilities 15,123 - - - Deposits 2,444,826 - - 1,136,657 Due to Other Funds - - - - Unearned Revenue - - 10,837,172 - Advances from Other Funds - - - - Total Liabilities 5,730,795 1,286,268 10,837,172 1,175,257
DEFERRED INFLOWS OF RESOURCES
Unavailable Revenues - Grants - - - -
FUND BALANCE (DEFICITS)
Nonspendable 664,460 - - - Restricted 1,498,954 15,486,154 139 4,079,124 Committed 23,775,625 - - - Assigned 1,945,392 - - - Unassigned 11,710,920 - - - Total Fund Balances (Deficits) 39,595,351 15,486,154 139 4,079,124 Total Liabilities, Deferred Inflows of
Resources and Fund Balances (Deficits) 45,326,146$ 16,772,422 $ 10,837,311 $ 5,254,381 $ City of Hemet
Balance Sheet
Governmental Funds
June 30, 2021
Special Revenue
The accompanying notes are an integral part of this statement. 18
14.A
Other Total
Governmental Governmental
Funds Funds
37,444,245$ 104,490,003$
271,347 2,428,579
- 453,392
1,301,600 1,507,949
1,786,776 8,398,514
761,917 761,917
- 1,051,331
- 664,460
- -
7,933,735 7,933,735
(5,576,451) (5,576,451)
2,076,419 2,076,419
45,999,588$ 124,189,848$
2,606,975$ 5,224,847$
48,854 2,026,696
- 15,123
182,543 3,764,026
761,917 761,917
- 10,837,172
- -
3,600,289 22,629,781
- -
1,000,000 1,664,460
37,595,211 58,659,582
- 23,775,625
3,906,491 5,851,883
(102,403) 11,608,517
42,399,299 101,560,067
45,999,588$ 124,189,848$
The accompanying notes are an integral part of this statement. 19
14.A
THIS PAGE INTENTIONALLY LEFT BLANK
14.A
Fund Balances of Governmental Funds 101,560,067$
Amounts reported for Governmental Activities in the Statement of Net Position are different because:
Capital assets used in governmental activities are not financial resources and therefore, are not reported in the funds.
Capital Assets 488,591,708
Accumulated Depreciation (185,513,923) 303,077,785
Other long-term assets are not available to pay for current period expenditures and, therefore, are reported as unavailable revenues in the funds. - Long-term liabilities including compensated absences and OPEB are not due and payable in the current period and, therefore, are not reported in the funds.
Compensated Absences (2,988,996)
Net Pension Liability (102,850,775)
Net OPEB Liability (46,803,659)
Amounts for deferred inflows and deferred outflows related to the City's Net Pension and Net OPEB Liablity are not reported in the funds.
Deferred Outflows Related to Pensions 16,898,295
Deferred Inflows Related to Pensions (185,368)
Deferred Outflows Related to OPEB 3,846,582
Deferred Inflows Related to OPEB (317,115)
Internal service funds are used by management to charge the costs of certain activities to individual funds. The assets and liabilities of the internal service funds must be added to the statement of net position. 6,822,591 Net Position of Governmental Activities 279,059,407$
City of Hemet
Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position
June 30, 2021
The accompanying notes are an integral part of this statement. 20
14.A
Capital
Projects
General Sewer and Storm Bridges/Streets
Fund Drain ARPA Traffic Facilities
REVENUES
Taxes 46,678,413$ -$ -$ -$ Licenses and Permits 2,104,137 - - - Intergovernmental Revenues 10,156,631 - - - Charges for Services 3,234,120 4,248,320 - 1,139,337 Fines and Forfeitures 234,000 - - - Investment Income 299,232 1,105 139 374 Miscellaneous 7,794 224 - 13,453 Total Revenues 62,714,327 4,249,649 139 1,153,164
EXPENDITURES
Current:
General Government 2,382,573 - - - Public Safety 41,120,793 - - - Community Development 4,209,904 - - - Public Works 17,884 - - 52,077 Sanitation - 2,437,344 - - Parks 1,052,244 - - - Libraries 1,467,264 - - - Capital Outlay - - - - Total Expenditures 50,250,662 2,437,344 - 52,077 Excess (Deficiency) of Revenues Over
Expenditures 12,463,665 1,812,305 139 1,101,087
OTHER FINANCING SOURCES (USES)
Transfers In 248,191 - - - Transfers Out (20,004) - - - Total Other Financing Sources (Uses) 228,187 - - - Net Change in Fund Balances 12,691,852 1,812,305 139 1,101,087 Fund Balances, Beginning 26,903,499 13,673,849 - 2,978,037 Prior Period Adjustmment - - - - Fund Balances, Ending 39,595,351$ 15,486,154$ 139$ 4,079,124$ City of Hemet
Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds
Year Ended June 30, 2021
Special Revenue
The accompanying notes are an integral part of this statement. 21
14.A
Other Total
Governmental Governmental
Funds Funds
2,336,742$ 49,015,155$
- 2,104,137
5,342,067 15,498,698
6,628,643 15,250,420
- 234,000
7,774 308,624
306,271 327,742
14,621,497 82,738,776
7,161 2,389,734
917,866 42,038,659
1,209,640 5,419,544
5,055,196 5,125,157
- 2,437,344
- 1,052,244
119,257 1,586,521
4,127,494 4,127,494
11,436,614 64,176,697
3,184,883 18,562,079
20,004 268,195
- (20,004)
20,004 248,191
3,204,887 18,810,270
39,439,564 82,994,949
(245,152) (245,152)
42,399,299$ 101,560,067$
The accompanying notes are an integral part of this statement. 22
14.A
Net Change in Fund Balances - Total Governmental Funds 18,810,270$ Amounts reported for Governmental Activities in the Statement of Activities are different because:
Governmental funds report capital outlay as expenditures. However, in the statement of activities, the costs of those assets is allocated over their estimated useful lives as depreciation expense. This is the amount by which depreciation exceeded capital outlays in the current period.
Capital Outlays 3,594,010
Depreciation Expense (7,170,555)
Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. (523,426)
Some expenses reported in the Statement of Activities do not require the use of current financial resources and are not reported as governmental fund expenditures.
Net Change in Compensated Absences 146,089
Net Change in Net Pension Liabilit
y (5,398,262)
Net Change in Net OPEB Liability (1,663,485)
Net Change in Deferred Outflows Pension Related Amounts (237,735) Net Change in Deferred Inflows Pension Related Amounts 2,156,899 Net Change in Deferred Outflows OPEB Related Amounts 2,130,831 Net Change in Deferred Inflows OPEB Related Amounts (202,699) Internal service funds are used by management to charge the costs of certain activities to individual funds. The net revenues (expenses) of the internal service funds is reported with governmental activities. 617,249 Change in Net Position of Governmental Activities 12,259,186 $
City of Hemet
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities
Year Ended June 30, 2021
The accompanying notes are an integral part of this statement. 23
14.A
Business-type Governmental
Activities Activities
Water Enterprise Internal Service
Fund Funds
ASSETS
Current Assets:
Cash and Investments 27,396,252$ 9,325,854$
Receivables:
Accounts 2,187,242 153,818
Due from Other Governmental Agencies 84,650 - Prepaid Assets 5,399 -
Inventories - 130,322
Total Current Assets 29,673,543 9,609,994
Noncurrent Assets:
Land 32,975 -
Construction in Progress 324,965 -
Capital Assets 35,785,917 5,628,505
Less: Accumulated Depreciation (32,170,699) (4,931,275) Total Noncurrent Assets 3,973,158 697,230
Total Assets 33,646,701 10,307,224
DEFERRED OUTFLOWS
Deferred Outflows Related to OPEB 267,409 - Deferred Outflows Related to Pensions 711,841 - Total Deferred Outflows of Resources 979,250 -
LIABILITIES
Current Liabilities:
Accounts Payable 602,820 650,849
Accrued Salaries and Benefits 56,531 42,095 Accrued Liabilities 5,399 -
Deposits 1,438,012 -
Compensated Absences Payable - Current Portion 40,402 - Claims and Judgments Payable - Current Portion - 1,646,425 Total Current Liabilities 2,143,164 2,339,369 Noncurrent Liabilities:
Compensated Absences Payable 121,206 -
Claims Payable - 1,145,264
Net OPEB Liability 3,253,730 -
Net Pension Liability 5,484,953 -
Total Noncurrent Liabilities 8,859,889 1,145,264 Total Liabilities 11,003,053 3,484,633
DEFERRED INFLOWS
Deferred Inflows Related to OPEB 22,045 - Deferred Inflows Related to Pensions 5,121 - Total Deferred Inflows of Resources 27,166 -
NET POSITION
Net Investment in Capital Assets 3,973,158 697,230 Unrestricted 19,622,574 6,125,361
Total Net Position 23,595,732$ 6,822,591$
City of Hemet
Statement of Net Position
Proprietary Funds
June 30, 2021
The accompanying notes are an integral part of this statement. 24
14.A
Business-type Governmental
Activities Activities
Water Enterprise Internal Service
Fund Funds
OPERATING REVENUES
Charges for Sales and Services 12,060,604 $ 16,100,969 $ Miscellaneous 53,031 106,301
Total Operating Revenues 12,113,635 16,207,270
OPERATING EXPENSES
Personnel Services 4,075,181 2,428,173
Parts and Supplies 114,221 1,047,986
Maintenance 829,508 1,019,842
Utilities 338,315 756,934
Water Purchases 448,382 -
Contracts, Rents and Leases 408,724 506,220 Insurance 164,100 7,043,856
Claims and Judgments - 2,640,393 General Office 297,900 -
Enterprise Assessments 2,780,196 -
Depreciation 765,570 146,617
Total Operating Expenses 10,222,097 15,590,021
Operating Income (Loss) 1,891,538 617,249
NONOPERATING REVENUES (EXPENSES)
Investment Income (1,968) -
Total Nonoperating Revenues (Expenses) (1,968) - Income (Loss) Before Transfers and
Capital Contributions 1,889,570 617,249
Transfers In - -
Transfers Out (248,191) -
SPECIAL ITEM
Pension and OPEB Allocation - 10,953,119 Change in Net Position 1,641,379 11,570,368
Total Net Position, Beginning 19,359,815 (4,747,777) Prior Period Adjustment 2,594,538 -
Total Net Position, Ending 23,595,732 $ 6,822,591 $ City of Hemet
Statement of Revenues, Expenses, and Changes in Net Position Proprietary Funds
Year Ended June 30, 2021
The accompanying notes are an integral part of this statement. 25
14.A
Business-type Governmental
Activities Activities -
Water Internal
Enterprise Fund Service
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from Customers and Users 22,164,139 $ - $ Cash Received from User Departments - 24,663,214 Cash Paid to Suppliers for Goods and Services (4,972,853) (18,530,757) Cash Paid to Employees for Services (2,833,704) (2,434,210) Cash Payments for Insurance and Claims - (1,799,267) Net Cash Provided (Used) by Operating Activities 14,357,582 1,898,980
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Cash Received From Other Funds - - Cash Paid to Other Funds (248,191) -
Net Cash Provided (Used) by Noncapital
Financing Activities (248,191) -
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES
Acquisition and Construction of Capital Assets (207,437) (35,379) Net Cash Provided (Used) by Capital and
Related Financing Activities (207,437) (35,379)
CASH FLOWS FROM INVESTING ACTIVITIES
Investment Income Received (1,968) -
Net Cash Provided (Used) by Investing Activities (1,968) - Net Increase (Decrease) in Cash and Cash Equivalents 13,899,986 1,863,601 Cash and Cash Equivalents - Beginning of the Year 13,496,266 7,462,253 Cash and Cash Equivalents - End of the Year 27,396,252$ 9,325,854$ Reconciliation of Operating Income (Loss) to
Net Cash Provided (Used) by Operating Activities:
Operating Income (Loss) 1,891,538$ 617,249$
Adjustments to Reconcile Operating Income to
Net Cash Provided by Operating Activities:
Depreciation 765,570 146,617
(Increase) Decrease in Accounts Receivable 10,093,422 8,455,944 (Increase) Decrease in Inventories - (27,248) (Increase) Decrease in Due from Other Governments (6,004) - (Increase) Decrease in Deferred Outflows - Pensions (194,584) - (Increase) Decrease in Deferred Outflows - OPEB (157,893) - Increase (Decrease) in Accounts Payable 408,493 (8,128,671) Increase (Decrease) in Accrued Salaries and Benefits 18,098 (6,037) Increase (Decrease) in Claims Payable - 841,126 Increase (Decrease) in Deposits Payable (36,914) -
Increase (Decrease) in Compensated Absences Payable 46,092 - Increase (Decrease) in Deferred Inflows - Pensions (140,536) - Increase (Decrease) in Deferred Inflows - OPEB 14,742 - Increase (Decrease) in Net Pension Liability 1,283,116 - Increase (Decrease) in Net OPEB Liability 372,442 -
NET CASH PROVIDED BY OPERATING ACTIVITIES 14,357,582$ 1,898,980 $ City of Hemet
Statement of Cash Flows
Proprietary Funds
Year Ended June 30, 2021
The accompanying notes are an integral part of this statement. 26
14.A
Successor Agency
OPEB Trust Custodial Private-purpose
Fund Funds Trust Fund
ASSETS
Cash and Investments - $ 1,632,306$ 655,173 $ Investments:
Balanced HighMark PLUS 2,215,420 - - Receivables:
Accounts - 2,131,464 - Notes - - 168,309 Land Held for Resale - - 2,208,773 Restricted Assets:
Cash and Investments with Fiscal Agents - 1,304,591 40,136 Total Assets 2,215,420 5,068,361 3,072,391
LIABILITIES
Accounts Payable - 1,774,611 338 Accrued Liabilities - - 7,497 Deposits Payable - - - Interest Payable - - 121,515 Due to City of Hemet - 1,051,331 - Bonds Payable - - 8,467,342 Total Liabilities - 2,825,942 8,596,692
NET POSITION
Held in Trust for Successor Agency - - (5,524,301) Held in Trust for Other Organizations,
Individuals, and Governments 2,215,420 2,242,419 - Total Net Position 2,215,420$ 2,242,419$ (5,524,301)$ City of Hemet
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2021
The accompanying notes are an integral part of this statement. 27
14.A
Successor
Agency
OPEB Trust Custodial Private-purpose
Fund Funds Trust Fund
ADDITIONS
Contributions:
Taxes and Assessments Collected for Others - $ 4,184,229$ 1,086,949 $ Developer Contributions - 2,122,321 - Employer Contributions 200,000 - - Investment Earnings:
Investment Income 438,403 15 15 Total Additions 638,403 6,306,565 1,086,964
DEDUCTIONS
Administrative Costs 10,720 - 128,574 Interest on Bonds - - 283,520 Payments on behalf of Others - 2,368,399 - Payments to Other Agencies for Charges Collected - 2,547,705 - Total Deductions 10,720 4,916,104 412,094 Change in Net Position 627,683 1,390,461 674,870 Net Position - Beginning of Year - - (6,199,171) Restatement of Net Position 1,587,737 851,958
Net Position - End of Year 2,215,420 $ 2,242,41 9$ (5,524,301)$ City of Hemet
Statement of Changes in Fiduciary Net Position
Fiduciary Funds
Year Ended June 30, 2021
The accompanying notes are an integral part of this statement. 28
14.A
City of Hemet
Notes to Financial Statements
Year Ended June 30, 2021
1) SUMMARY OF SIGNIFI CANT ACCOUNTING POLICIES
The City of Hemet, California was incorporated in 1910 as a ge neral law City. The City operates under a Council-Manager form of government and provides the following s ervices: public safety (police and fire), highways and streets, refuse and recycling collection, water, sewer maintenance, public library, parks, public improvements, planning and zoning, and general administrative services.
The financial statements of the City of Hemet have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establis hing governmental accounting and financial reporting principles. The more significant accounting policies are described below.
A) Description of Reporting Entity
In evaluating how to define the City for financial reporting pu rposes, management has considered all potential component units. The primary criteria for including a potential component unit within the reporting entity are the governing body’s financial accountability and a financial benefit or burden relationship and whether it is misleading to exclude. A primary government is financially accountable and shares a financial benefit or burden relationship, if it appoints a voting majorit y of the organization’s governing body and frequently has the ability to affect the organizations operations, or if there is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on the primary government. A primary government may also be financially accountable if an or ganization is fiscally dependent on the primary government regardless of whether the organization has a separately elected governing board, a governing board appointed by a higher level of government, or a jointly appointed board, and there is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on the primary government.
Management determined that the following entities should be reported as blended component units based on the criteria above. Although the following is legally separa te from the City, it has been “blended” as though it is part of the City because the component unit’s governing body is substantially the same as the City’s and there is a financial benefit or burden relationship between the City and the component unit; management of the City has operational responsibilities for the component unit; and/or the component unit provides services entirely, or almost entirely, to the City or otherwise exclusively, or almost exclusively, benefits the City, even though it does not provide services directly to it.
Hemet Housing Authority
The Hemet City Council is also the governing board of the Hemet Housing Authority; therefore the Authority is included within the reporting entity of the City. The authority was formed under the California Health and Safety Code Section 34200, et seq, to provide financing for sup plying safe and sanitary dwelling accommodations to persons of low income at affordable rents. Separate financial statements are not issued for the Housing Authority.
B) Implementation of Governmental Accounting Standards Board (GASB) Pronouncements
The Governmental Accounting Standards Board has issued the foll owing Statements, which may affect the City’s financial reporting requirements in the future:
29
14.A
City of Hemet
Notes to Financial Statements
Year Ended June 30, 2021
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
GASB 87 - Leases: This Statement requires recogn ition of certain lease assets and liabilities for leases that previously were classified as operating leases and recognized as inflows of resources or outflows of resources based on the payment provisions of the contract. It e stablishes a single model for lease accounting based on the foundational principle that leases are financings of the right to use an underlying asset. The requirements of this Statement are effective for rep orting periods beginning after December 15, 2020.
GASB 91 - Conduit Debt Obligations: The primary objectives of this Statement are to provide a sin gle method of reporting conduit debt obligations by issuers and eli minate diversity in practice. The requirements of this Statement are effective for reporting periods beginning after December 15, 2021.
C) Measurement Focus, Basis of Accounting, and Financial State ment Presentation
The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted f or by providing a separate set of self- balancing accounts that comprise its assets, deferred outflows of resources, liabilities, deferred inflows of resources, fund balance or net position, revenues and expenditures or expenses, as appropriate. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance with finance-related legal and contractual provisions. The minimum number of funds is maintained in accordance with legal and managerial requirements.
Government-Wide and Fund Financial Statements
The City’s Government-Wide Financial Statements include a Statement of Net Position and a Statement of Activities and Changes in Net Posi tion. These statements prese nt summaries of governmental and business-type activities for the City accompanied by a total column. Fiduciary activities of the City are not included in these statements.
These financial statements are presented on an “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all of the City’s assets, de ferred outflows of sources, liabilities, and deferred inflows of sources, including capital assets, as well as infrastructure assets, and long-term liabilities, are included in the accompanying Statement of Net Position. The Statement of Activities presents changes in Net Position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred.
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 and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function. Program revenues are netted with program expenses in the statement of activities to present the net cost of each program. Taxes and other items not included among program revenues are reported instead as general revenues.
Amounts paid to acquire capital assets are capitalized as asset s in the government-wide financial statements, rather than reported as an expense. Proceeds of long-term debt are recorded as a liability in the government-wide financial statements. Amounts paid to reduce lo ng-term indebtedness of the reporting government are reported as a reduction of the related liability, rather than as an expense.
30
14.A
City of Hemet
Notes to Financial Statements
Year Ended June 30, 2021
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are payments in-lieu of taxes where the amounts are reasonably equivalent in value to the interfund services provided and othe r charges between the government’s water and sewer function and various other functions of the governmen t. Elimination of these charges would distort the direct cost and program revenues reported for the various functions concerned.
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
The governmental fund financial statements are reported using t he current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and av ailable. 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 City considers revenues to be available if th ey are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures as well as expenditures related to compensated absences, and claims and judgments, are recorded only when payment is due. General capital asset acquisitions are reported as expenditures in governmental funds . Issuance of long-term debt and acquisitions under capital leases are reported as other financing sources.
Sales taxes, property taxes, fr anchise taxes, intergovernmental revenue and rental income associated with the current fiscal period are all considered to be suscept ible to accrual and so have been recognized as revenues of the current fiscal period to the extent normally collected within the availability period.
Other revenue items are considered to be measurable and availab le when cash is received by the government.
Non-current portions of long-term receivables due from governmental funds are reported on their balance sheets in spite of their spending measurement focus. Special re porting treatments are used to indicate, however, that they should not be considered “available spendable resources,” since they do not represent net current assets.
Proprietary and Fiduciary Funds
The City’s enterprise and internal service funds are considered proprietary funds. Proprietary funds and fiduciary funds are presented using the accrual basis of accounting. Revenues are recognized when they are earned and expenses are recognized when the related goods o r services are delivered. Proprietary funds are presented using the economic resources measurement focus . This means that all assets and all liabilities (whether current o r noncurrent) associated with their activity are included on their balance sheets. Proprietary fund type operating statements present incr eases (revenues) and decreases (expenses) in total net position.
31
14.A
City of Hemet
Notes to Financial Statements
Year Ended June 30, 2021
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
Proprietary fund operating revenues, such as charges for servic es, result from exchange transactions associated with the principal activity of the fund. Exchange tr ansactions are those in which each party receives and gives up essentially equal values. Non-operating r evenues, such as subsidies, taxes, and investment earnings result from nonexchange transactions or anc illary activities. Amounts paid to acquire capital assets are capitalized as assets in the enterprise fund financial statements, rather than reported as an expense. Proceeds of long-term debt are recorded as a lia bility in the enterprise fund financial statements, rather than as anothe r financing source. Amounts pa id to reduce long-term indebtedness of the enterprise fund are reported as a reduction of the related liability, rather than as an expense.
The custodial funds account for monies held for the benefit of other organizations and governments to which the City provides accounting and investing services. The private-purpose trust funds are reported using the economic resources measurement focus and the accrual basis of accounting.
D) Fund Classifications
The City reports the followi ng major governmental funds:
General Fund - This is the primary operating fund of the City. It accounts for all activities of the general government, except those required to be accounted for in another fund.
Sewer and Storm Drain Spec ial Revenue Fund - This fund accounts for the financial transactions of a City- wide program to maintain storm drains and sewer transmission lines. Revenues are intended to cover the maintenance costs for these lines, not all of the costs ass ociated with the replacement, and depreciation of these lines.
ARPA Special Revenue Fund – This fund accounts for the financi al transactions as prescribed under the Federal American Rescue Plan Act (ARPA) of 2021.
Bridges, Streets and Traffic Facilities Capital Projects Fund - This fund accounts for the financial transactions for bridges, streets and traffic facilities in the development impact fee report and is funded through developer contributions.
The City reports the following major enterprise funds:
Water - This fund accounts for the financial transactions of the City’s water utility service, including water production, transmission, and distribution system.
The City also reports th e following fund types:
Internal Service Funds - These funds account for the financing of goods or services provided by one department or agency to other departments or agencies of the City, on a cost reimbursement basis. These departments consist of administrative, facility maintenance, vehicle maintenance, workers’ compensation, dental, vision, retiree medical and liability insurance.
OPEB Trust Fund - These funds account for the prefunding of post-employment benefits other than pensions.
Custodial Funds - These funds account for resources held by th e City in a trustee capacity as an agent for individuals, private organizations, and/or other governments. Custodial Funds are custodial in nature and are held for the benefit of other individuals, organizations and/or governments. These funds consist of the Police Activities League, pass thru fees collected for the County, and a developer CFD. 32
14.A
City of Hemet
Notes to Financial Statements
Year Ended June 30, 2021
1) SUMMARY OF SIGNIFICANT ACCO UNTING POLICIES - Continued
Private-purpose Trust Fund - This fund is used to account for the balances and transactions of the Successor Agency to the former Hemet Redevelopment Agency.
E) Cash and Investments
Investments are reported in the accompanying balance sheet at fair value, except for certain certificates of deposit and investment contracts that are reported at cost because they are not transferable and they have terms that are not affected by changes in market interest rates.
Changes in fair value that occur during a fiscal year are recognized as investment income reported for that fiscal year. Investment income includes interest earnings, changes in fair value, and any gai ns or losses realized upon the liquidation, maturity, or sale of investments.
The City pools cash and investments of all funds, except for assets held by fiscal agents. Each fund’s share in this pool is displayed in the accompanying financial stateme nts as cash and investments. Investment income earned from pooled investments is allocated to those various funds based on each fund’s average cash and investment balance.
For purposes of the statement of cash flows, cash equivalents a re defined as short-term, highly liquid investments that are both readily convertible to known amounts of cash or were purchased so near their maturity that they present insignificant risk of change in value because of changes in interest rates. Cash and cash equivalents in the accompanying statements include the proprietary funds’ share of the cash and investment pool of the City of Hemet.
F) Receivables
Receivables include such items as taxes, intergovernmental revenues, charges for services, miscellaneous accounts receivable, and interest receivable. No allowance for doubtful accounts has been established, as the City believes all amounts are considered to be collectible in the normal course of business.
G) Inventory and Prepaid Items
All inventories are valued on the average cost method. Invento ry in the General Fund consists of City promotional items. Inventory in the Internal Service fund consists of hardware supplies, auto shop supplies, fuel and oil. Inventory in the Enterprise fund consists of exp endable supplies held for use by the water utility. All costs are recorded as an expenditure at the time the individual inventory items are consumed.
Prepaid items are payments made to vendors for services that wi ll benefit periods beyond the fiscal year ended using purchase method.
H) Interfund Transactions
Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either "due to/from other funds" (i.e., the current portion of interfund loans) or "advances to/from other funds " (i.e., the non-current portio n of interfund loans). Any residual balances outstanding between the governmen tal activities and business-ty pe activities are reported in the government-wide financial statements as "internal balances."
Advances between funds, as reported in the fund financial statements, are offset by a nonspendable fund balance account in applicable governmental funds to indicate th at they are not available for appropriation and are not expendable available financial resources.
33
14.A
City of Hemet
Notes to Financial Statements
Year Ended June 30, 2021
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
I) Forgivable Notes
Certain loans have been made by the City to third parties in or der to enhance the redevelopment, community development, economic development, and housing objectives of the City. Certain loans contain conditions for non-collection (after being held for a certain period of time, etc.). The City has recorded as an allowance for forgivable notes the estimate of the amounts that will not be collected on these loans.
J) Land Held for Resale
Land held for resale represents land, structures and their rel ated improvements that were acquired for resale in accordance with the objectives of the Redevelopment P rojects and grants. These costs will be charged to current year project expenditures when the related land and structures are sold. Land held for resale is valued at the lower of cost or expected net realizable value.
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements.
K) Capital Assets
Capital assets, which include property, plant, equipment, and i nfrastructure assets (e.g., roads, bridges, sidewalks, and similar items) are reported in the applicable go vernmental or business-type activities columns in the government-wide financial statements. Capital a ssets are defined by the government as assets with an initial, individual cost of more than $10,000 an d an estimated useful life in excess of two years except in the case of infrastructure-related capital projects, which would only be capitalized when total project costs are expected to exceed $50,000. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair value at the date of donation.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized.
Major outlays for capital assets and improvements are capitaliz ed as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed. No interest were costs capitalized during the current fiscal year.
Capital assets of the primary government, as well as the compon ent units, are depreciated using the straight-line method over the following estimated useful lives.
Buildin
gs and Improvements 25 - 50 years
Infrastructure
Roadwa y 20 - 75 years
Storm Drain 100 years
Water S ystem 30 years
Sewer S ystem 30 years
Machinery and Equipment
Vehicles 7 years
O f f i c e Equipment 5 years
Other E quipment 5 years
34
14.A
City of Hemet
Notes to Financial Statements
Year Ended June 30, 2021
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
L) Compensated Absences
It is the government’s policy to permit employees to accumulate earned but unused vacation and sick pay benefits. All vacation pay is accrued when incurred in the government-wide, proprietary, and fiduciary fund financial statements.
City employees receive from twelve to thirty-three (12-33) vacation days each year depending upon length of service and bargaining group. Vacation can be accumulated up to a maximum of two years for most City bargaining units; two years plus the current year's accumulation for other units. Unused vacation may be cashed in yearly per each bargaining unit's M.O.U. limitations or upon retirement. City and police employees receive eight (8) hours of sick leave for each month of employment. Management employees accrue six (6) days of sick leave per year. City fire fighters accrue twelve (12) hours per calendar month. City general employees' right to accrue sick leave is unlimited. Used sick leave may be cashed in upon retirement at a payment percentage of 25%, 50% or 75% determined by length of c ontinuous service and bargaining unit M.O.U.
City and police employees are allowed to accumulate compensatory leave time for unpaid overtime at 150% rate up to a forty (40) hour or eighty (80) hour maximum depending on M.O.U. limitations.
M) Claims and Judgments
The expenditures for claims are recognized when it is probable that the liability has been incurred at year- end and the amount of the loss can be reasonably estimated. Such claims are reported as liabilities in the Internal Service Funds and government-wide financial statements.
N) Pension
For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the plans and additions to/deductions from the plans’ fiduciary net position have been determined on the same basis as they are reported by the plans. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordanc e with benefit terms. Investments are reported at fair value.
O) 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 inform ation within certain defined timeframes. For this report, the following timeframes are used: January 1, 202 1 Valuation Date; June 30, 2021 Measurement Date; and July 1, 2020 through June 30, 2021 Measurement Period.
35
14.A
City of Hemet
Notes to Financial Statements
Year Ended June 30, 2021
1) SUMMARY OF SIGNIFICANT ACCO UNTING POLICIES - Continued
P) Deferred Outflows/Inflows of Resources
In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial stateme nt element represents consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/ expenditure) until then. The City has certain items that qualify for reporting in this category:
deferred outflows relating to the City’s net pension and OPEB liabilities.
In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City has only one type of item, which arises only under the modified accrual basis of accounting, which qualifies for repor ting in this category. Accordingly, the item, unavailable revenue, is reported in the governmental funds balance sheet. The governmental funds report unavailable revenues from property taxes, special assessments, grant receivables, long-term loans receivable, and other miscellaneous receivables. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. The City also reports deferred inflows relating to the net pension and OPEB liabilities.
Q) Net Position
In the government-wide and proprietary fund financial statements, net position is classified in the following categories:
Investment in Capital Assets – this category groups all capital assets, including infrastructure, into one component of net position. Accumulated depreciation and the ou tstanding balances of debt that are attributable to the acquisition, construction or improvement of those assets reduce this category.
Restricted Net Position – this category describes the portion of net position which is restricted as to use by the terms and conditions of agreements with outside parties, go vernmental regulation, laws, or other restrictions which the City cannot unilaterally alter.
Unrestricted – this category describes the portion of net position which is not restricted to use.
R) Net Position Flow Assumption
Sometimes the City will fund outlays for a particular purpose from both restricted (e.g. restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted – net position and unrestricted – net position in the statement of ne t position, a flow assumption must be made about the order in which the resources are considered to be applied.
It is the City’s policy to consider restricted – net position t o have been depleted before unrestricted – net position.
36
14.A
City of Hemet
Notes to Financial Statements
Year Ended June 30, 2021
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
S) Fund Balances
Fund balances in governmental funds are reported in classifica tions that comprise a hierarchy based primarily on the extent to which the City is bound to honor constraints on the specific purposes for which amounts in those funds can be spent. Sometimes the City will f und outlays for a particular purpose from both restricted and unrestricted resources (the total of commit ted, assigned, and unassigned fund balance). In order to calculate the amounts to report as restr icted, committed, assigned, and unassigned fund balance in the governmental fund financial statements a fl ow assumption must be made about the order in which the resources are considered to be applied. It is the government’s policy to consider restricted fund balance to have been depleted before using any of the components of unrestricted fund balance. Further, when the components of unrestricted fund balance can be used for the same purpose, committed fund balance is depleted first, followed by assigned fund balance. Unassigned fund balance is applied last.
The following classifications describe the relative strength of the spending constraints placed on the purposes for which resources can be used:
Nonspendable Fund Balance - Amounts that cannot be spent either because they are in nonspendable form or are required to be maintained intact.
Restricted Fund Balance - Amounts that are constrained to speci fic purposes by state or federal laws, or externally imposed conditions by grantors or creditors.
Committed Fund Balance - Amounts that may be specified by the C ity Council by ordinance or resolution to formally commit part of the City’s fund balances or future r evenues for a specific purpose(s) or program. To change or repeal any such commitment will require an additional formal City Council action utilizing the same type of action that was originally used.
The City's committed fund balance includes:
General Fund Emergency Operating Contingency:
Fund balance in the General Fund has been committed for emergen cy/fiscal emergency contingencies, as set by ordinance. Emergencies shall mean the actual or threatened conditions of disaster or of extreme peril to the safety of persons and prope rty within the City caused by such conditions as air pollution, fire, flood, storm, epidemic, riot or earthquake, or other conditions, including conditions resulting from a labor controversy, which conditions are likely to be beyond the control of the services, personnel, equipment and facilities of the City, requiring combined forces of other political subdivisions to combat. A fiscal emergency is defined by the City of Hemet Municipal Code Section 2-451. The amount of the commitment as set forth by the City of Hemet Municipal Code Section 2-452 is equal to at least 20% of General Fund budgeted expenditures.
Encumbrance accounting, under which purchase order, contracts a nd other commitments for the expenditures of monies are recorded in order to reserve that portion of the applicable appropriation, is employed as an extension of formal budgetary integration in the General, Special Revenue, and Capital Project funds. Encumbrances outstanding at year-end are reported as committed fund balances in the fund financial statements since they do not constitute expenditures or liabilities. 37
14.A
City of Hemet
Notes to Financial Statements
Year Ended June 30, 2021
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
Assigned Fund Balance – Assigned fund balances encompass the portion of net fund resources reflecting the government’s intended use of r esources, but are neither res tricted or committed. Assignment of resources can be done by the highest level of decision making or by a committee or official designated for that purpose. The City Council has by resolution authorized the City Manager to assign fund balance.
Unassigned Fund Balance - This amount is for any portion of the fund balances that do not fall into one of the above categories. The general fund is the only fund that r eports a positive unassigned fund balance amount. In other governmental fund s, it is not appropriate to report a positive unassigned fund balance amount. However, in governmental fund other than general fund, if expenditures incurred for specific purposes exceed the amounts that are restricted, committed, or assigned to those purposes, it may be necessary to report a negative unassigned fund balance in that fund.
T) Property Tax Calendar
Property taxes are assessed and collected each fiscal year according to the following property tax calendar:
Lien Date March 1
Levy Date July 1 to June 30
Due Date November 1, 1 st Installment February 1, 2nd Installment Collection Date December 1, 1 st Installment April 10, 2nd Installment
The City receives from the County of Riverside a percentage of the basic 1% maximum tax rate allowed on assessments collected and allocated by the County. Property tax assessments are recognized as revenue when they become both measurable and available to finance the e xpenditures of the reported fiscal year.
Material delinquent property taxes (net of estimated uncollecti bles) are also recorded as current year receivables. Substantially all of the property taxes associated with the reported fiscal year were considered to be both measurable and available to finance expenditures of that fiscal year. When material amounts of property taxes are considered to be measurable but not available to finance the expenditures of the reported fiscal year, they are recorded as a receivable and as deferred revenue (to be recognized as revenue in the year in which they become available).
A delinquency penalty of 6% is assessed by the County of Riverside. If taxes become delinquent, they are deeded to the State and may be sold by the County Tax Collector for taxes due plus 1% per month redemption fee. All property taxes are collected by the County of Riverside and collection fees are deducted by the County before tax revenue is remitted to the City. The assessed valuation is at “full cash value”.
U) Use of Estimates
The presentation of basic financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make est imates and assumptions that affect the reported amounts of assets and liabilities and disclosure of co ntingent assets and liabilities at the date of the financial statements and t he reported amounts of revenues a nd expenditures during the reporting period. Actual results could differ from those estimates.
38
14.A
City of Hemet
Notes to Financial Statements
Year Ended June 30, 2021
2) CASH AND INVESTMENTS
Cash and investments are classified in the accompanying financial statements as follows:
Cash and Investments consist of the following:
Investments Authorized by the California Government Code and the City’s Investment Policy
The table below identifies the in vestment types that are author ized by the City’s investment policy and the California Government Code. The table also identifies certain provisions of the California Government Code (or the City's investment policy, if more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. This table does not address investments of deb t 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.
*Based on state law requirement s or investment policy requirements, whichever is more restrictive.
Governmental Business-Type Fiduciary
Activities Activities Funds Total
Cash and Investments 113,815,857$ 27,396,252$ 2,287,479$ 143,499,588$ Restricted Cash and Investments - - 3,560,147 3,560,147 Total Cash and Investments 113,815,857$ 27,396,252$ 5,847,626$ 147,059,735$ Government-wide
Statement of Net Position
Cash on Hand 7,250$
Deposits with Financial Institutions 48,853,294
Investments 98,199,191
Total Cash and Investments 147,059,735$
Authorized Maximum Maximum
Investment Types by Investment Maximum Percentage Investment Authorized by State Law Policy Maturity* of Portfolio* in One Issue r* U.S. Treasury Obligations Yes None None None
U.S. Government Sponsored
Agency Securities Yes 5 years None None
Municipal Bonds Yes 5 years 20% None
Medium-Term Notes Yes 5 years 20% 5%
Collateralized Certificate of Deposit Yes 5 years None 25% Negotiable Certificates of Deposit Yes 5 years 30% None Banker's Acceptance Yes 180 days 40% None
Commercial Paper Yes 270 days 15% 10%
Money Market Mutual Funds Yes N/A 10% None
Repurchase Agreements Yes 30 days 10% None
Local Agency Investment Fund Yes N/A 90% $75,000,000
39
14.A
City of Hemet
Notes to Financial Statements
Year Ended June 30, 2021
2) CASH AND INVESTMENTS - Continued
Investments Authorized by Debt Agreements
Investment of debt proceeds held by bond trustee are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code o r 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, and concentration of credit risk.
Maximum Maximum
Authorized Maximum Percenta ge Investmen t
Investment Type Maturity Allowed In One Issuer
U.S. Treasury Obligations None None None
U.S. Agency Securities None None None
Banker’s Acceptances 30 daysN one N one
Commercial Paper 270 daysN one N one
Money Market Mutual Funds N/A None None
Municipal Obligations None None None
Repurchase Agreements 270 daysN one N one
Investment Contracts None None None
Local Agency Investment Fund
(LAIF)
N/A None None
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 is, 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.
Information about the sensitivity of the fair values of the City’s investments (including investments held by bond trustees) to market interest rate fluctuations is provided by the following table that shows the distribution of the City’s investments by maturity:
12 Months 13 to 36 37 to 60
Investment Type Total Or Less Months Months
U.S. Agency Securities 2,977,790 $ - $ - $ 2, 977,790$ LAIF 71,251,846 71, 251,846 - - Municipal Obligations 7,604,151 2, 756,054 3, 802,337 1, 045,760 Negotiable CD 6,365,184 1, 761,647 3, 332,584 1, 270,953 Medium Term Notes 6,480,210 - 4, 963,470 1, 516,740 Money Market Mutual Funds 2,215,420 2, 215,420 - - Held by Bond Trustees:
Money Market Mutual Funds 1,304,590 1, 304,590 - - Total 98,199,191 $ 79,289,557 $ 12,098,391 $ 6,811,243 $ Remaining Maturity (in Months)
40
14.A
City of Hemet
Notes to Financial Statements
Year Ended June 30, 2021
2) CASH AND INVESTMENTS - Continued
Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investm ent 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 or the City’s investment policy, or debt agreements, and t he actual rating as of fiscal year end for each investment type.
Concentration of Credit Risk
The investment policy of the City contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. There was no investments in any one issuer (other than U.S. Government Agencies, Supranationals, Money Market Fun ds, and external investment pools) that represent 5% or more of total City investments.
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 transact ion, a government will not be able to recover the value of its investment or collateral securities that are in th e 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 instit ution secure deposits made by state or local government units by pledging securities in an undivided collate ral pool held by a depository regulated under state law (unless so waived by t he governmental unit). The market value of the pledged securities in the collateral pool must equal at least 110% of the total amount de posited by the public agencies. California law also allows financial institutions to secure City deposits by p ledging first trust deed mortgage notes having a value of 150% of the secured public deposits. At June 30, 2021, the City deposits (bank balances were insured by the Federal Depository Insurance Corporation up to $250,000 and the remaining balances were collateralized under California law. Investments held by bond trustee are selected under the terms of the applicable trust agreement. For investments identified herein as held by bond trustee, the bond trustee selects the investment under the terms of the applicable trust agreemen t, acquires the investment, and holds the investment on behalf of the reporting government.
Minimum
Investment Type Amount Legal Rating AAA AA A BBB Unrated U.S. Agency Securities 2,977,790 $ N/A 2,977,790 $ - $ - $ - $ -$ LAIF 71,251,846 N/A - . - - 71,251,846 Municipal Obligations 7,604,151 A 2,864,214 4,739,937 - - - Negotiable CD 6,365,184 N/A - - - - 6,365,184 Medium Term Notes 6,480,210 A 1,032,360 2,070,820 2,854,830 522,200 - Money Market Mutual Funds 2,215,420 AAA 2,215,420 - - - - Held by Bond Trustees:
Money Market Mutual Funds 1,304,590 AAA 1,304,590 - - - - Total 98,199,191$ 10,394,374$ 6,810,757$ 2,854,830$ 522,200$ 77,617,030$ 41
14.A
City of Hemet
Notes to Financial Statements
Year Ended June 30, 2021
2) CASH AND INVESTMENTS - Continued
Fair Value of Investments
Investments (except those that may be reported at amortized cos t) are measured at fair value on a recurring basis. Recurring fair value measurements, are those that Governmental Accounting Standards Board (GASB) Statements require or permit in the statement of net position a t the end of each reporting period. Fair value measurements are categorized based on the valuation inputs used to measure an asset’s fair value: Level 1 inputs are quoted prices in active markets for identical assets ; Level 2 inputs are signifi cant other observable inputs; Level 3 inputs are significant unobservable inputs. Inv estment fair value measurements at June 30, 2021 are described below.
Investments categorized as Level 2 are valued based on matrix p ricing which use observable market inputs such as yield curves and market indices that are derived princi pally from or corroborated by observable market data by correlation to other means.
Investment in State Investment Pool
The City is a voluntary participant in the Local Agency Invest ment Fund (LAIF) that is regulated by the California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The fair value of the City’s investment in this pool is reported in the accompanying financial statements at amounts based on the City’s pro-rata share of the fair value provided by LAIF fo r the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for w ithdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. LAIF is not rated.
3) INTERFUND RECEIVALBES, PAYABLES AND TRANSFERS
The following represents the composition of interfund balances as of June 30, 2021:
Due To / From Other Funds
The Other Governmental Funds borrowed $761,917 from Other Gover nmental Funds as a result of routine, short-term interfund borrowing to eliminating temporary deficit cash balances.
Not subject to
Investment Type Total Level 2 Measurement
U.S. Agency Securities 2,977,790 $ 2, 977,790$ - $ LAIF 71,251,846 - 71, 251,846
Municipal Obligations 7,604,151 7, 604,151 - Negotiable CD 6,365,184 6, 365,184 -
Medium Term Notes 6,480,210 6, 480,210 -
Money Market Mutual Funds 2,215,420 - 2, 215,420 Held by Bond Trustees:
Money Market Mutual Funds 1,304,590 - 1, 304,590 Total 98,199,191 $ 23,427,335 $ 74,771,856 $
Measurement Input
42
14.A
City of Hemet
Notes to Financial Statements
Year Ended June 30, 2021
3) INTERFUND RECEIVAL BES, PAYABLES AND TRANSFERS - Continued
The Fiduciary Funds borrowed $1,051,331 from the General Fund as a result of routine, short-term borrowing to eliminate temporary deficit cash balances. These will be repaid when receivables are collected and restricted funds become available to repay.
Interfund Transfers
During the year, interfund transfers were made for purposes of financing administrative costs and capital improvements. Specifically, the following transfers were made:
4) NOTES RECEIVABLE
The City administers various residential rehabilitation and do wn payment assistance loan programs for low and moderate income families. In addition, the City has loaned monies to developers for affordable housing projects and entered into owner participation agreements. The loans have different stated interest rates, payback periods and may be forgivable assuming all conditions are met. These notes are long-term in nature and are recorded as notes receivable in the governmental funds balance sheet. At June 30, 2021 the outstanding balance of notes receivable totaled $7,933,735. The balance on the loans that will be forgiven by the City, assuming all requirements are met was $5,576,451, and is considered uncollec tible. The balance of loans receivable is recorded net of the uncollectible amount in the Statement of Net Position and the Governmental Funds Balance Sheet.
Nonmajor
General Governmental
TRANSFERS OUT Fund Funds Total
General Fund - $ 20,004$ 20,004 $ Water Enterprise Fund 248,191 - 248,191 248,191$ 20,004$ 268,195$
TRANSFERS IN
43
14.A
City of Hemet
Notes to Financial Statements
Year Ended June 30, 2021
5) CHANGES IN CAPITAL ASSETS
Capital assets activity for th e year ended June 30, 2021 is as follows:
Depreciation expense was charged to functions/programs of the primary government as follows:
Beginning Prior Period Ending
Governmental Activities: Balance Adjustment Additions Deletions Transfers Balance Capital Assets, Not Being Depreciated:
Land and Improvements 12,348,575$ -$ -$ -$ -$ 12,348,575$ Rights of Way 190,468,181 - - - - 190,468,181 Construction in Progress 4,025,341 (1,176,309) 2,143,789 - (1,162,162) 3,830,659 Total Capital Assets, Not
Being Depreciated 206,842,097 (1,176,309) 2,143,789 - (1,162,162) 206,647,415 Capital Assets Being Depreciated:
Building and Improvements 29,766,548 - - - - 29,766,548 Building and Improvements - ISF 75,899 - - - - 75,899 Machinery and Equipment 39,778,588 - 1,450,222 - - 41,228,810 Machinery and Equipment - ISF 5,517,228 - 35,378 - - 5,552,606 Infrastructure -
Pavement 145,744,076 - - - 477,280 146,221,356 Medians 163,384 - - - - 163,384 Sidewalks 18,911,308 - - - 243,457 19,154,765 Curb and Gutter 16,810,245 - - - 44,195 16,854,440 Traffic Signal 6,973,887 - - - 369,607 7,343,494 Street Lights 4,064,223 - - - - 4,064,223 Bridges 5,661,474 - - - - 5,661,474 Storm Drain/Retention Basins 11,458,176 - - - 27,623 11,485,799 Total Capital Assets Being
Depreciated 284,925,036 - 1,485,600 - 1,162,162 287,572,798 Less Accumulated Depreciation:
Building and Improvements (14,881,984) - (656,337) - - (15,538,321) Building and Improvements - ISF (72,646) - (857) - - (73,503) Machinery and Equipment (33,818,859) - (1,445,168) - - (35,264,027) Machinery and Equipment - ISF (4,712,012) - (145,760) - - (4,857,772) Infrastructure - -
Pavement (107,659,047) - (4,002,674) - - (111,661,721) Medians (78,967) - (5,446) - - (84,413) Sidewalks (5,218,211) - (253,774) - - (5,471,985) Curb and Gutter (4,763,762) - (224,431) - - (4,988,193) Traffic Signal (4,777,116) - (189,821) - - (4,966,937) Street Lights (2,974,495) - (150,074) - - (3,124,569)
Bridges (1,253,292) - (75,486) - - (1,328,778) Storm Drain/Retention Basins (2,917,635) - (167,344) - - (3,084,979) Total Accumulated Depreciation (183,128,026) - (7,317,172) - - (190,445,198) Total Capital Assets Being
Depreciated, Net 101,797,010 - (5,831,572) - 1,162,162 97,127,600 Total Capital Assets, Net 308,639,107$ (1,176,309)$ (3,687,783)$ -$ -$ 303,775,015$ General Government 602,025$
Public Safety 1,193,504
Public Works 5,069,050
Libraries 305,976
Internal Service 146,617
7,317,172$
44
14.A
City of Hemet
Notes to Financial Statements
Year Ended June 30, 2021
5) CHANGES IN CAPITAL ASSETS - Continued
Depreciation expense was charged to functions/programs of the primary government as follows:
6) LONG-TERM LIABILITIES
Changes in long-term liabilities for governmental activities and business-type activities are as follows:
*Beginning balance of the Net OPEB Liability was adjusted to reflect a correction to the allocation of the Net OPEB Liability to the Water Enterprise fund. See Note 14 for more information.
Beginning Ending
Business-type Activities: Balance Additions Deletions Balance Capital Assets, Not Being Depreciated:
Land 32,975$ -$ -$ 32,975$ Construction in Progress 137,448 207,437 (19,920) 324,965 Total Capital Assets, Not
Being Depreciated 170,423 207,437 (19,920) 357,940 Capital Assets Being Depreciated:
Buildings and Improvements 29,927,283 19,920 - 29, 947,203 Machinery and Equipment 5,838,714 - - 5, 838,714 Total Capital Assets Being
Depreciated 35,765,997 19,920 - 35, 785,917 Less Accumulated Depreciation:
Buildings and Improvements (26,613,991) (409,606) - (27, 023,597) Machinery and Equipment (4,791,138) (355,964) - (5, 147,102) Total Accumulated Depreciation (31,405,129) (765,570) - (32, 170,699) Total Capital Assets Being
Depreciated, Net 4,360,868 (745,650) - 3, 615,218 0 Total Capital Assets, Net 4,531,291$ (538,213)$ (19,920)$ 3,973,158$ Business-type Activities
Water 765,570$
Total Depreciation Expense 765,570$
Beginning Ending Due Within
Balance Adjustments* Additions Reductions Balance One Year Governmental Activities:
Compensated Absences 3,135,085$ -$ 1, 231,588$ (1,377,677)$ 2,988,996$ 747,249$ Claims Payable 1,950,563 - 14,130,791 (13,289,665) 2,791,689 1,646,425 Net OPEB Liability 42,258,886 2,881,288 1,663,485 - 46, 803,659 - Net Pension Liability 97,452,513 - 5, 398,262 - 102, 850,775 - Total 144,797,047$ 2,881,288$ 22,424,126$ (14,667,342)$ 155,435,119$ 2,393,674$ Business-type Activities:
Compensated Absences 115,516$ -$ 67,922$ (21,830)$ 161,608$ 40,402$ Net OPEB Liability 5,762,576 (2,881,288) 372,442 - 3, 253,730 - Net Pension Liability 4,201,837 - 1, 283,116 - 5, 484,953 - Total 10,079,929$ (2,881,288)$ 1,723,480$ (21,830)$ 8,900,291$ 40,402$ 45
14.A
City of Hemet
Notes to Financial Statements
Year Ended June 30, 2021
6) LONG-TERM LIABILITIES - Continued
The net pension and OPEB liabilities in the governmental activities are generally liquidated by the General Fund.
The net pension and OPEB liabilities in the business-type activities are liquidated by the Water Enterprise Fund.
Fiduciary Fund
Changes in long-term liabilities for Fiduciary Funds for the year ended June 30, 2021 is as follows:
2014 Tax Allocation Refunding Bonds
In December 2014, the Riverside County Public Financing Authori ty issued $11,110,000 Riverside County Public Financing Authority 2014 Tax Allocation Revenue Bonds (H emet Refunding Project) to 1) refund the Successor Agency Subordinate Tax Allocation Bonds, 1999 Series A and Tax Allocation Bonds, 2002 Series A, 2) to satisfy the reserve requirement and 3) to pay cost of issuance. Interest ranges from 3.00% to 5.00% is payable semiannually on March 1 and September 1 of each year , commencing March 1, 2015. Principal is due in annual installments of $580,000 to $870,000 through Sept ember 1, 2031. The outstanding balance at June 30, 2021 was $7,995,000.
The debt service to maturity is as follows:
Beginning Ending Due Within
Balance Additions Deletions Balance One Year
Tax Allocation Bonds:
Series 2014, Refunding 8,540,000$ -$ (545,000)$ 7,995,000$ 575,000$ Premium 518,541 - (46,199) 472,342 - Total 9,058,541$ -$ (591,199)$ 8,467,342$ 575,000$ Fiscal Year Ending
June 30, Principal Interest Total
2022 575,000$ 301,719$ 876,719 $
2023 610,000 272,094 882,094
2024 635,000 240,969 875,969
2025 670,000 208,344 878,344
2026 700,000 174,094 874,094
2027 735,000 145,569 880,569
2028 765,000 122,591 887,591
2029 780,000 97,962 877,962
2030 815,000 72,044 887,044
2031 840,000 44,655 884,655
2032 870,000 15,255 885,255
Totals 7,995,000$ 1,695,296 $ 9,690,296 $
46
14.A
City of Hemet
Notes to Financial Statements
Year Ended June 30, 2021
6) LONG-TERM LIABILITIES - Continued
Non-Commitment Debt
CFD No. 1999-1 Special Tax Refunding Bonds, Series 2006 (Heartland Project)
In July 2006, the City of Hemet authorized and provided for the issuance of special tax bonds for the Community Facilities District No. 1999-1. Proceeds of these bon ds are held by a fiscal agent and are being used to defease and refund the 1999-1 Heartland CFD Series 2001 A and Series 2002B bonds. The original issues were used to finance off-site improvements of a 1,417 ho me community with an 18-hole golf course.
This bond issue is not a legal obligation of the City as the Ci ty is only acting as an agent for the property owners in collecting the assessments. Neither the faith and cre dit nor the taxing power of the City is pledged to the payment of the bonds. Therefore, these bonds are not reported as a liability in the financial statements of the City. The outstanding balance on these bonds at June 30, 2021 is $6,260,000.
7) RISK MANAGEMENT AND SELF-INSURANCE PROGRAMS
The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disast ers. The City participates in municipal agency risk pools for their property and workers’ compensation coverage and uses a private carrier for excess liability coverage.
The City operates a self-insuranc e program for dental, vision, and retiree supplemental medical insurance costs.
The retiree supplemental medical plan, for employees hired prior to July 24, 1990 and who subsequently retire from the City, is only intended to bridge decreases in health coverage benefits as measured between current coverage benefits and the highest level of such benefits as conferred du ring the employee’s tenure. A separate internal service fund has been established to accumulate reserves and pay expenses of the program.
Type Limits Deductible
Excess Insurance Authority Propery $25,000,000 All risk various All Risk and Boiler Machinery Program sub-limits per policy Breakdown: Per Schedule
EIA Pool deductuble: $3,000,000 per occurrence, and
$10,000,000 annual aggregate excluding Earthquake and
Flood $400,000 per occurrence and annual aggregate fo
r
Auto Physical Damage, various deductibles apply
General Liability Program $25,000,000 total limit inclusive $250,000 SIR per occurrence, offense or of SIR wrongful act SIR
Primary Workers' Comp $125,000 None
Excess Workers' Comp $4,875,000 pooled layer (includes $125,000 $125,000 limit above)
Cyber Liability Program $2,000,000 aggregate limit of $50,000 SI R liability for each member/insured
$25,000,000 policy aggregate
limit of liability. $500,000 breach
response costs. Various limits apply
Cyber Liability Program Excess Layer 1 $15,000,000 aggregate lim it Excess limits layer is added $3,000,000 per member
Cyber Liability Program Excess Layer 2 $10,000,000 aggregate lim it Excess limits layer is added $2,000,000 per member
Crime $1,000,000 aggregate limit $2,500
47
14.A
City of Hemet
Notes to Financial Statements
Year Ended June 30, 2021
7) CLAIMS AND JUDGMENTS - Continued
Currently, the various operating funds provide the financial su pport of these programs. It is, however, hoped that once adequate reserve levels are achieved, the interest earnings will carry the administration costs.
Estimated City costs of claims for liability, workers’ compensation, dental, vision, and the retiree supplemental medical have been accrued as Claims and Judgments Payable in the accompanying financials statements.
For the past three years, settled claims have not exceeded the amount of insurance coverage. Liabilities for claims payable including workers’ compensation are typically liquidated by the internal service funds.
8) CITY EMPLOYEES RETIREMENT PLAN
Plan Descriptions
All qualified permanent and probationary employees are eligible to participate in the City’s separate Safety (police and fire) and Miscellaneous (all other) Plans, agent mu ltiple-employer defined benefit pension plans administered by the California Public Employees’ Retirement Sys tem (CalPERS), which acts as a common investment and administrative agent for its participating membe r employers. Benefit provisions under the plan are established by State statute and Local Government reso lution. CalPERS issues publicly available reports that include a full description of the pension plans re garding benefit provisions, assumptions and membership information that can be found on the CalPERS website: www.calpers.ca.gov
Benefits Provided
The Plans are agent multiple-employer defined benefit pension p lans administered by the California Public Employees’ Retirement System (Cal PERS). A full description of t he pension plan regarding number of employees covered, benefit provi sions, assumptions (for funding , but not accounting purposes), and membership information are listed in the plan’s June 30, 2019 A nnual Actuarial Valuation Report (funding valuation). Details of the benefits provided can be obtained in Appendix B of the actuarial valuation report. This report and CalPERS’ audited financial statements are publicly a vailable reports that can be obtained at CalPERS’ website.
Claim Payments
Beginning Claims and Other Ending
Balance Incurred Adjustments Balance
2018-2019 Total 1,311,708 $ 10, 315,274$ (9,248,383) $ 2,378,599 $ 2019-2020 Total 2,378,599 $ 16, 409,189$ (16,837,225) $ 1,950,563 $ Dental - Vision 31,898 335,871 ( 328,667) 39,102 Workers' Comp 442,287 758 (758) 442,287 Liability 1,476,378 13,794,160 (12,960,238) 2,310,300 2020-2021 Total 1,950,563$ 14,130,789$ (13,289,663)$ 2,791,689$ 48
14.A
City of Hemet
Notes to Financial Statements
Year Ended June 30, 2021
8) CITY EMPLOYEES RETIRE MENT PLAN - Continued
The Plans’ provisions that are in effect at June 30, 2021, are summarized as follows:
Employees Covered: At June 30, 2021, the following number of employees were covere d by the benefit terms for each Plan:
Prior to On or after
Hire date January 1, 2013 January 1, 2013
Benefit formula 2.7% @ 55 2% @ 62
Benefit vesting schedule 5 years service 5 years service Benefit payments monthly for life monthly for life
Retirement age 50-55 52
Monthly benefits, as a % of eligible compensation (1) (1) Required employee contribution rates 8% 7.25%
Required employer contribution rates 12.478% + $2,903,086 6.75% (1) - Depending on years of service
Prior to On or after
Hire date January 1, 2013 January 1, 2013
Benefit formula 3% @ 50 2.7% @ 50
Benefit vesting schedule 5 years service 5 years service Benefit payments monthly for life monthly for life
Retirement age 50-55 52
Monthly benefits, as a % of eligible compensation (1) (1) Required employee contribution rates 9% 14.00%
Required employer contribution rates 22.092% + $4,972,883 11.50% (1) - Depending on years of service
Miscellaneous
Safety
Miscellaneous Safety
Inactive employees or beneficiaries
currently receiving benfits 296 181
Inactive employees entitled to but not yet
receiving benefits 208 101
Active employees 154 118
49
14.A
City of Hemet
Notes to Financial Statements
Year Ended June 30, 2021
8) CITY EMPLOYEES RETIRE MENT PLAN - Continued
Contributions: Section 20814(c) of the California Public Employees’ Retiremen t Law (PERL) requires that the employer contribution rates for all public employers be det ermined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change i n the rate. The total plan contributions are determined through CalPERS’ annual actuarial valuation process. The actuarially determined rate is the estimated amount necessary to fi nance the costs of benefits ear ned by employees during the year, with an additional amount to finance any unfunded accrued liability. Th e employer is required to contribute the difference between the actuarially determined rate and the cont ribution rate of employees. Employer contribution rates may change if plan contracts are amended. It is the responsibility of the employer to make necessary accounting adjustments to reflect the impact due to a ny Employer-Paid Member Contributions or situations where members are paying a portion of the employer contribution.
Net Pension Liability
The City’s net pension liability for the Plan is measured as th e total pension liability, less the pension plan’s fiduciary net position. The net pension liability of the Plans is measured as of June 30, 2020, using an annual actuarial valuation as of June 30, 2019 rolled forward to June 30, 2020 using standard update procedures. A summary of principal assumptions and methods used to determine the net pension liability is shown below.
Actuarial Assumptions: The total pension liabilities in the June 30, 2019 actuarial v aluations were determined using the following actuarial assumptions:
All Plans
Valuation date June 30, 2019
Measurement date June 30, 2020
Actuarial cost method entry-age normal
Actuarial assumptions:
Discount rate 7.15%
Inflation 2.50%
Payroll growth (1)
Projected salary increase (1)
Investment rate of return 7.15%
Mortality (2)
Post Retirement (3)
(1) Depending on age, service and type of employment
(2) Derived using CalPERS’ Membership Data for all Funds. (3) The lesser contract COLA or 2.5% until Purchasing Power Protection Allowance floor on purchasing power applies,
2.5% thereafter
50
14.A
City of Hemet
Notes to Financial Statements
Year Ended June 30, 2021
8) CITY EMPLOYEES RETIRE MENT PLAN - Continued
The mortality table used was developed based on CalPERS-specifi c data. The probabilities of mortality are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015. Pre-retirement and Post- retirement mortality rates include 15 years of projected mortal ity improvement using 90% of Scale MP-2016 published by the Society of Actuaries. For more details on this table, please refer to the CalPERS Experience Study and Review of Actuarial Assumptions report from December 2017 that can be found on the CalPERS website.
Long-term Expected Rate of Return - The long-term expected rate of return on pension plan investm ents 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 expens e and inflation) are developed for each major asset class.
In determining the long-term expected rate of return, CalPERS t ook into account both short-term and long- term market return expectations as well as the expected pension fund cash flows. Using historical returns of all the funds’ asset classes, expected compound returns were ca lculated 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 rounded single equivalent exp ected return that arrived at the same present value of benefits for cash flows as the one calculated using bo th short-term and long-term returns. The expected rate of return was then set equal to the single equiva lent rate calculated above and adjusted to account for assumed administra tive expenses. The expected real rates of return by asset class are as follows:
Discount Rate - The discount rate used to measure the total pension liability f or PERF C was 7.15%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, act uarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected fu ture benefit payments of current plan members.
Therefore, the long-term expected rate of return on plan invest ments was applied to all periods of projected benefit payments to determine the total pension liability.
New Strategic Real Return Real Return
Asset Class Allocation Years 1 - 10 (1) Years 11+ (2)
Global Equity 50% 4.80% 5.98%
Global Fixed Income 28% 1.00% 2.62%
Inflation Assets - 0.77% 1.81%
Private Equity 8% 6.30% 7.23%
Real Assets 13% 3.75% 4.93%
Liquidity 1% - -0.92%
(1) An expected inflation of 2.0% used for this period. (2) An expected inflation of 2.92% used for this period. 51
14.A
City of Hemet
Notes to Financial Statements
Year Ended June 30, 2021
8) CITY EMPLOYEES RETIRE MENT PLAN - Continued
Changes in Net Pension Liability
The changes in the Net Pension Liability for the Miscellaneous Plan are as follows:
The changes in the Net Pension Liability for the Safety Plan are as follows:
Sensitivity of the Net Pension Liability to Changes in the Disc ount Rate: The following presents the net pension liability 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 would be if it were calc ulated 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 Plan Fiduciary Net Pension
Liability Net Position Liability/(Asset)
Balance at June 30, 2019 126,601,636$ 91,586,328$ 35,015,308$ Changes in the year:
Service cost 1,707,524 - 1,707,524 Interest on the total pension liability 8,871,075 - 8,871,075 Differences between expected and actual experience (58,526) - (58,526) Contributions from the employer - 3,788,951 (3,788,951) Contributions from employees - 724,261 (724,261) Net investment income - 4,584,933 (4,584,933) Benefit payments, including refunds (6,651,779) (6,651,779) - Administrative/other expense - (129,114) 129,114 Net changes 3,868,294 2,317,252 1,551,042 Balance at June 30, 2020 130,469,930$ 93,903,580$ 36,566,350$ Increase (Decrease)
Pension Plan Plan Fiduciary Net Pension
Liability Net Position Liability/(Asset)
Balance at June 30, 2019 187,804,561$ 121,165,519$ 66,639,042$ Changes in the year:
Service cost 3,877,702 - 3,877,702 Interest on the total pension liability 13,404,657 - 13,404,657 Differences between expected and actual experience 2,343,095 - 2,343,095 Contributions from the employer - 6,947,064 (6,947,064) Contributions from employees - 1,607,715 (1,607,715) Net investment income - 6,111,153 (6,111,153) Benefit payments, including refunds (9,217,556) (9,217,556) - Administrative/other expense - (170,814) 170,814 Net changes 10,407,898 5,277,562 5,130,336 Balance at June 30, 2020 198,212,459$ 126,443,081$ 71,769,378$ Increase (Decrease)
52
14.A
City of Hemet
Notes to Financial Statements
Year Ended June 30, 2021
8) CITY EMPLOYEES RETIRE MENT PLAN - Continued
Pension Plan Fiduciary Net Position: Detailed information about each pension plan’s fiduciary net p osition is available in the separately issued CalPERS financial reports.
Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
For the year ended June 30, 2021, the City recognized pension expense of $3,823,302 for the Miscellaneous Plan and $11,978,244 for the Safety Plan. At June 30, 2021, the City reported deferred outflows and deferred inflows for the Miscellaneous Plan from the following sources:
At June 30, 2021, the City reported deferred outflows and defer red inflows for the Miscellaneous Plan from the following sources:
$3,887,516 reported as deferred ou tflows of resources related to contributions subsequent to the measurement date will be recogni zed as a reduction of the net p ension liability in the year ended June 30, 2022. Other amounts reported as deferred outflows and deferred inflows related to pensions will be recognized as pension expense as follows:
Miscellaneous Safety
1% Decrease 6.15% 6.15%
Net Pension Liability 53,728,637$ 100,011,442$
Current Discount Rate 7.15% 7.15%
Net Pension Liability 36,566,350$ 71, 769,378$
1% Increase 8.15% 8.15%
Net Pension Liability 22,415,217$ 48, 794,380$
Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to measurement date 3,887,516$ - $ Differences between actual and expected experience 214,561 34,140 Changes in assumptions - -
Net differences between projected and actual
earnings on plan investments 643,530 -
Total 4,745,607 $ 34,140 $
Miscellaneous
Year Ending
June 30,
2022 (229,803)$
2023 220,883
2024 459,506
2025 373,365
2026 -
Thereafter -
Miscellaneous
53
14.A
City of Hemet
Notes to Financial Statements
Year Ended June 30, 2021
8) CITY EMPLOYEES RETIRE MENT PLAN - Continued
At June 30, 2021, the City reported deferred outflows and deferred inflows for the Safety Plan from the following sources:
$7,487,463 reported as deferred ou tflows of resources related to contributions subsequent to the measurement date will be recogni zed as a reduction of the net p ension liability in the year ended June 30, 2022. Other amounts reported as deferred outflows and deferred inflows related to pensions will be recognized as pension expense as follows:
9) OTHER POSTEMPLOYMENT BENEFITS (OPEB)
Plan Description
The City of Hemet Retiree Healthcare Plan administers a single-employer defined benefit plan which provides medical insurance benefits to eligible retirees and their spouses in accordance with various labor agreements.
Retiree medical health benefits are offered to eligible retiree s through Aetna and Kaiser. Dental and vision benefits are provided by the City and administered by Group Management Services. Eligibility is based on the contract. The City's plan does not issue a publicly available financial report.
Eligibility
Employees of the city are eligible for retiree health benefits if they are between 50-55 years of age or disability retire directly from the City as of the last day of work prior to retirement and are a vested member of CalPERS. Membership in the plan consisted of the following at J anuary 1, 2021, the date of the latest actuarial valuation:
Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to measurement date 7,487,463$ -$ Differences between actual and expected experience 4,475,190 - Changes in assumptions - 156,349 Net differences between projected and actual
earnings on plan investments 901,876 -
Total 12,864,529$ 156,349$
Safety
Year Ending
June 30,
2022 1,483,617$
2023 1,937,634
2024 1,298,309
2025 501,157
2026 -
Thereafter -
Safety
54
14.A
City of Hemet
Notes to Financial Statements
Year Ended June 30, 2021
9) OTHER POSTEMPLOYMENT BE NEFITS (OPEB) - Continued
Contributions
The obligation of the City to contribute to the plan is establi shed and may be amended by the City Council.
For the fiscal year ended June 30, 2021, the City’s average con tribution rate was not applicable. The initial contribution of $750,000 was made November 2016. An annual $200,000 contribution began in fiscal year 2018 to the OPEB Trust Account, administered by the Public Agen cy Retirement Systems (PARS). The City pays benefit payments outside of the trust. Employees are not required to contribute to the plan.
Net OPEB Liability
The City's net OPEB liability was measured as of June 30, 2021, and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation as of January 1, 2021.
Actuarial Methods and Assumptions
The total OPEB liability in the J anuary 1, 2021 actuarial valua tion was determined using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified.
Discount Rate
The discount rate used to measure the total OPEB liability was 5.75 percent. The projection of cash flows used to determine the discount rate assumed that City contribut ions will be made at rates equal to the actuarially determined contribution rates. Based on those assumptions, the OPEB plan’s fiduciary net position was projected to be available to make all projected OPEB paymen ts for current active and inactive employees. Therefore, the long-term expected rate of return on OPEB plan investments was applied to all periods of projected benefit payments to determine the total OPEB liability.
Retirees or spouses of retirees currently receiving benefits 238 Active employees 273
Total 511
Valuation Date January 1, 2021
Actuarial Cost Method Entry Age Normal, Level % of Pay
Mortality CalPERS 1997-2015 Experience Study
Mortality Improvement Fully generational with Scale MP-2020 Health Care Trend Rate 6.75% initial, 3.75% ultimate
Inflation Rate 2.50%
Discount Rate 5.75% at June 2021
6.25% at June 2020
Salary Increases 2.75% annually
Dental/Vision Trend 2.50% annually
55
14.A
City of Hemet
Notes to Financial Statements
Year Ended June 30, 2021
9) OTHER POSTEMPLOYMENT BE NEFITS (OPEB) - Continued
Change in the Net OPEB Liability
Sensitivity of the Net OPEB Liability to changes in the Discoun t Rate - The following presents the net OPEB liability of the City if it were calculated using a discount rate that is 1-perc entage-point lower or 1- percentage-point higher than the current discount rate:
Sensitivity of the Net OPEB Liability to changes in the Healthc are Cost Trend Rates - The following presents the net OPEB liability of the City, as well as what th e City’s Net OPEB would be if it were calculated using a healthcare cost trend rate that is 1-percentage-point l ower or 1-percentage-point higher than the current healthcare cost trend rate:
Target Allocation Expected Real
Asset Class PARS-Balance Rate of Return
Global Equity 60% 4.560%
All Fixed Income 35% 0.780%
Cash 5% -0.500%
Total 100.00%
Total OPEB Plan Fiduciary Net OPEB
Liability (TOL) Net Position Liability/(Asset)
Balance at June 30, 2020 49,609,199 $ 1, 587,737$ 48, 021,462$ Changes in the year:
Service cost 184,471 - 184,471 Interest on the total OPEB liability 2,987,576 - 2, 987,576 Employer contributions - 4, 253,811 (4, 253,811) Employee contributions - - - Actual investment income - 432,284 ( 432,284) Differences between expected and actual experience 465,835 - 465,835 Changes of assumptions 3,010,639 - 3, 010,639 Administrative Expense - (73, 501) 73,501 Benefit payments, including refunds (3,984,911) (3, 984,911) - Net changes 2,663,610 627,683 2, 035,927 Balance at June 30, 2021 52,272,809 $ 2, 215,420$ 50, 057,389$ Increase (Decrease)
Discount Rate Valuation Discount Rate
1% Lower Discount Rate 1% Higher
Net OPEB liability (asset) 55,605,410$ 50, 057,389$ 45, 374,690$ Current
Healthcare Cost
1% Decrease Trend Rate 1% Increase
Net OPEB liability (asset) 45,438,542$ 50,057,389$ 55,475,876$ 56
14.A
City of Hemet
Notes to Financial Statements
Year Ended June 30, 2021
9) OTHER POSTEMPLOYMENT BE NEFITS (OPEB) - Continued
OPEB Expense and Recognition of Deferred Outflows/Inflows of Resources Related to OPEB
Gains and losses related to changes in total OPEB liability and fiduciary net position are recognized in OPEB expense systematically over time. Amounts are first recognized in OPEB expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to OPEB and are to be recognized in future OPEB expense.
The recognition period differs depending on the source of the gain or loss:
Net difference between projected and actual
earnings on OPEB plan investments: 5 years
All other amounts: Expected aver age remaining service lifetime (EARSL) (5.5 years at July 1, 2018)
For the year ended June 30, 2021, the City recognized OPEB expe nse of $4,218,455. The City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:
Amounts reported as deferred outflows and deferred inflows of r esources related to OPEB will be recognized as an OPEB expense as follows:
Deferred Deferred
Outflows Inflows
Changes of Assumptions 3,736,049$ -$
Net differences between expected
and actual experience 377,942 86,942
Net differences between projected and actual
earnings on plan investments - 252,218 Total 4,113,991$ 339,160$
Year Ending
June 30,
2022 1,075,621$
2023 1,077,124
2024 835,277
2025 590,025
2026 196,784
Thereafter -
57
14.A
City of Hemet
Notes to Financial Statements
Year Ended June 30, 2021
10) FUND BALANCES
The details of the fund balances as of June 30, 2021 are presented below:
In November 2016, the citizens of Hemet voted to approve Measure U, a general 1% sales tax measure. While this Measure is considered a General Tax, the City’s Council passed a Resolution restricting the use of Measure U revenues to the addition and retention of Public Safety Personnel. Although the funds are housed within the General Fund, by Resolution, they are required to be tracked in separate accounts from General Fund revenues and expenditures. Any Measure U funds not spent at the end of the fiscal year are required to be reserved for future use of the Measure U program. Over the last two fiscal y ears, Measure U revenues have outpaced original projections. The details of the City’s Measure U program for the year ended June 30, 2021 are as follows:
Other
General Sewer and Bridges/Streets Governmental
Fund Storm Drain ARPA Traffic Facilities Funds Total
Nonspendable:
Prepaid Items 12,831 $ - $ - $ - $ - $ 12,831$ Prepaid Items - Measure U 651,629 - - - - 651,629 Library Endowment - - - - 1,000,000 1,000,000 Restricted for:
Public Access Channel 1,498,954 - - - - 1,498,954 Public Safety - - 139 - 811,401 811,540 Street Work - - - 4,079,124 11,676,440 15,755,564 Lighting and Landscaping - - - - 5,593,884 5,593,884 Housing Grants - - - - 7,788,639 7,788,639 Sewer Maintenance - 15,486,154 - - - 15,486,154 Indian Gaming Capital Projects - - - - 6,411 6,411 Development Impact Fees - - - - 11,545,661 11,545,661 Library Equipment - - - - 27,227 27,227 General Plan - - - - 145,548 145,548 Committed:
Economic Stabilization Reserve 8,232,991 - - - - 8,232,991 Measure U - Public Safety Personnel 15,542,634 - - - - 15,542,634 Assigned:
Equipment Replacement - - - - 3,897,927 3,897,927 Capital Replacement - - - - 8,564 8,564 Continuing Appropriations 1,945,392 - - - - 1,945,392 Unassigned 11,710,920 - - - (102,403) 11,608,517 Total Fund Balances 39,595,351$ 15,486,154$ 139$ 4,079,124$ 42,399,299$ 101,560,067$ 58
14.A
City of Hemet
Notes to Financial Statements
Year Ended June 30, 2021
10) FUND BALANCES - Continued
11) ENDOWMENTS
The City received an endowment in 2002 for $1,000,000. The prin cipal amount of $1,000,000 is to be held in perpetuity while interest earnings are to be used for the City' s library as stated in the resolution accepting the endowment. The endowment activity is accounted for in the permanent fund of the City with the principal amount reflected in nonspendable fund balance. In the government-wide financial statements, the principal amount is included in restricted net position as non-expendable. At June 30, 2021, net appreciation on investment of the principal balance amounted to $27,227, and is reported as restricted net position as expendable. California Senate Bill No. 1329 enacted Uniform Prudent Management of Institutional Funds Act (“UPMIFA’) that governing the ability to spend on the net appreciation of the endowment fund. The City also passed resolution No. 3715 to establish policy on the spending of investment income in that available funds may only be used to supplement normal budgeted City funds appropriated by the City for the operation and maintenance of the library and not to substitute for such funds. Available funds may be used for a variety of library purposes that enhances the functioning of the library after specifically approved on a case by case line-item basis by the City Council in advance of the expenditure.
12) DEFICIT NET POSITIONS AND FUND BALANCES
In the government-wide financial statements, the governmental activities had a deficit unrestricted net position of $78,520,160, caused to some extent by the net pension liability of $102,850,775 and the net OPEB liability of $46,803,659.
Police Fire Total
Revenues
Police 2/3, Fire 1/3 overall allocation 9,870,761$ 4,935,381$ 14,806,142$ Expenditures
Salary and Fringe Benefits 4,314,255 3,144,828 7,459,083 Operating Supplies and Services 210,720 94,530 305,250 Internal Service Charges 402,600 114,204 516,804 Capital Outlay 846,445 471,879 1,318,324 Total 5,774,020$ 3,825,441$ 9,599,461
Measure U in Support of General Fund Public Safety (2,253,867)$ (159,201)$ (2,413,068)$ Change in Measure U Operating Funds 1,842,874 950,739 2,793,613 Beginning Measure U Operating Funds 7,949,096 5,451,554 13,400,650 Prepaid Measure U Operating Funds - 651,629 651,629 Committed Measure U Operating Funds 9,791,970 5,750,664 15,542,634 Ending Measure U Operating Funds 9,791,970$ 6,402,293$ 16,194,263$ 59
14.A
City of Hemet
Notes to Financial Statements
Year Ended June 30, 2021
12) DEFICIT NET POSITIONS AND FUND BALANCES - Continued
Funds with deficit net positions and fund balances at June 30, 2021 are as follows:
The deficit net position for the Successor Agency Private Purpo se Trust Fund will be eliminated through continued repayment of debt through property tax revenue receiv ed. Local Law Enforcement Block Grant Special Revenue Fund will eliminate the deficit through a transfer from the General Fund Public Safety program.
Internal service funds deficits will be eliminated through cost recovery from the respective funds.
13) COMMITMENTS AND CONTINGENCIES
The City has been named as a defendant in certain other claims and litigation matters. In the opinion of City management, the outcome of such litigation is not expected to result in a material adverse effect to the financial condition of the City beyond that accrued in the City’s Self-funded Insurance Fund.
The City has received state and federal funds for specific purposes that are subject to review and audit by the grantor agencies. Although such audits could generate expendit ure disallowances under the terms of the grants, it is believed that any required reimbursements will not be material.
The estimated amount of remaining construction contract obligations at year-end is $13,801,583.
14) RESTATEMENT OF NET POSITION
The restatement of net position in the Statement of Activities is the result of the following adjustments:
(1) The allocation of the net OPEB liability and related deferr ed inflows and outflows was overstated in the Business-type Activities and Water Enterprise Fund with a net total of $2,779,075. The adjustment to the beginning balance is to correct the allocation between the Gove rnmental Activities and Business-type Activities.
Fiduciary Funds
Successor Agency Private Purpose Trust Fund 5,524,301 $ Other Governmental Funds:
Public Safety CFD 11,555 $
Local Law Enforcement Block Grant 90,848
Internal Service Fund
Liability Insurance 2,138,641 $
Governmental Business-type
Activities Activities
(2,779,075)$ (1) 2, 779,075$ (1)
(1,176,309) (2) ( 184,537)$ (4)
(245,152) (3) -
Total (4,200,536)$ 2,594,538$
60
14.A
City of Hemet
Notes to Financial Statements
Year Ended June 30, 2021
14) RESTATEMENT OF NET POSITION
(2) A restatement of ($1,176,309) was made to remove capital assets that were not capitalizable.
(3) A restatement of ($245,152) was to move assets previously reported in a governmental fund, more accurately reported in a custodial fund. This adjustment is al so reflected in the Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds.
(4) A restatement of ($184,537) was made to correct accounts receivable balances for customer accounts.
The restatement of net position in the Custodial Funds of $851,958 is the result of the implementation of GASB 84, Fiduciary Activities.
The restatement of net position in the OPEB Trust Fund of $1,587,737 is to record the beginning balance of the OPEB Trust Fund as of July 1, 2020. The OPEB Trust Fund was not included in prior year financial statements.
61
14.A
REQUIRED SUPPLEMENTARY INFORMATION
14.A
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes 35,807,400$ 37,555,957$ 46,678,413$ 9,122,456$ Licenses and Permits 1,371,250 1,527,900 2,104,137 576,237 Intergovernmental Revenue 8,011,150 9,794,379 10,156,631 362,252 Charges for Services 2,711,139 2,898,518 3,234,120 335,602 Fines and Forfeitures 253,500 266,100 234,000 (32,100)
Investment Income 262,000 254,500 299,232 44,732
Miscellaneous 24,100 14,100 7,794 (6,306) Total Revenues 48,440,539 52,311,454 62,714,327 10,402,873
EXPENDITURES
Current:
General Government 2,382,300 3,134,790 2,382,573 752,217 Public Safety 40,187,700 43,306,540 41,120,793 2,185,747 Community Development 4,012,900 4,771,055 4,209,904 561,151 Public Works - - 17,884 (17,884) Parks 1,086,700 1,116,502 1,052,244 64,258 Libraries 1,416,700 1,477,806 1,467,264 10,542 Capital Outlay - - - - Total Expenditures 49,086,300 53,806,693 50,250,662 3,556,031 Excess (Deficiency) of Revenues
over Expenditures (645,761) (1,495,239) 12,463,665 13,958,904
OTHER FINANCING SOURCES (USES)
Transfers In - - 248,191 248,191 Transfers Out - (20,000) (20,004) (4) Total Other Financing Sources (Uses) - (20,000) 228,187 248,187 Net Change in Fund Balances (645,761) (1,515,239) 12,691,852 14,207,091 Fund Balance, Beginning of Year 26,903,499 26,903,499 26,903,499 Fund Balance, End of Year 26,257,738$ 25,388,260 $ 39,595,351 $ 14,207,091 $ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - General Fund
Year Ended June 30, 2021
Budgeted Amounts
62
14.A
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES
Charges for Services 3,727,700 $ 3,727,700 $ 4,248,320 $ 520,620 $ Investment Income 32,000 32,000 1,105 (30,895) Miscellaneous - - 224 224 Total Revenues 3,759,700 3,759,700 4,249,649 489,949
EXPENDITURES
Current:
Sanitation 2,631,500 9,516,449 2,437,344 7,079,105
Total Expenditures 2,631,500 9,516,449 2,437,344 7,079,105 Excess (Deficiency) of Revenues
over Expenditures 1,128,200 (5,756,749) 1,812,305 7,569,054
OTHER FINANCING SOURCES (USES)
Transfers In - - - - Total Other Financing Sources (Uses) - - - - Net Change in Fund Balances 1,128,200 (5,756,749) 1,812,305 7,569,054 Fund Balance, Beginning of Year 13,673,849 13,673,849 13,673,849 - Fund Balance, End of Year 14,802,049 $ 7,917,100 $ 15,486,154 $ 7,569,054 $ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Sewer and Storm Drain Special Revenue Fund Year Ended June 30, 2021
Budgeted Amounts
63
14.A
City of Hemet
Required Supplementary Information
Year Ended June 30, 2021
Schedule of Changes in the Net Pension
Liability and Related Ratios
Agent Multiple-employer Plan - Miscellaneous
Total Pension Liability 2020 2019 2018
Service cost 1,707,524 $ 1,890,624 $ 1,857,379 $ Interest on total pension liability 8,871,075 8,592,385 8,241,843 Changes in assumptions - - (585,850) Differences between expected and actual experience (58,526) 827,595 (1,731,724) Benefit payments, including refunds (6,651,779) (6,218,552) (5,862,944) Net change in total pension liability 3,868,294 5,092,052 1,918,704 Total pension liability - beginning 126,601,636 121,509,584 119,590,880 Total pension liability - ending (a) 130,469,930 $ 126,601,636 $ 121,509,584 $ Plan Fiduciary Net Position
Contributions - employer 3,788,951 $ 3,789,256 $ 3,136,888 $ Contributions - employee 724,261 772,222 745,420 Net investment income 4,584,933 5,749,884 6,966,209 Benefit payments (6,651,779) (6,218,552) (5,862,944) Plan to Plan Resource Movement - - (204) Administrative/Other Expense (129,114) (62,278) (374,702) Net change in plan fiduciary net position 2,317,252 4,030,532 4,610,667 Plan fiduciary net position - beginning 91,586,328 87,555,796 82,945,129 Plan fiduciary net position - ending (b) 93,903,580 $ 91,586,328 $ 87,555,796 $ Net pension liability - ending (a) - (b) 36,566,350 $ 35,015,308 $ 33,953,788 $ Plan fiduciary net position as a percentage
of the total pension liability 71.97% 72.34% 72.06%
Covered payroll 8,953,980 $ 9,693,519 $ 9,531,865 $ Net pension liability as percentage of
covered payroll 408.38% 361.22% 356.21%
Notes to Schedule of Changes in Net Pension Liability and Related Ratios:
Changes in Assumptions: In 2017, the accounting discount rate reduced from 7.65 percent to 7.15 percent.
In 2016, there were no changes. In 2015, amounts reported reflected an adjustment of the discount rate from
7.5 percent (net of administrative expense) to 7.65 percent (without a reduction for pension plan administrative expense.) In 2014, amounts reported were based on the 7.5 percent discount rate.
Measurement Period
Benefit Changes: The figures above do not include any liability impact that may have resulted from plan changes which occurred after the June 30, 2019 valuation date. This applies to voluntary benefit changes as w
ell as any offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes). * Pension schedules are intended to show information for ten years, additional years’ information will be displayed as it becomes available.
64
14.A
2017 2016 2015 2014
1,931,287$ 1,729,490$ 1,871,677$ 1,873,983$ 8,110,383 7,937,191 7,613,775 7,253,346 6,866,966 - (1,903,393) - (1,473,269) (192,030) 353,826 - (5,834,147) (5,132,797) (4,856,565) (4,666,256) 9,601,220 4,341,854 3,079,320 4,461,073 109,989,660 105,647,806 102,568,486 98,107,413 119,590,880$ 109,989,660$ 105,647,806$ 102,568,486$ 2,990,210$ 2,647,176$ 2,503,520$ 2,191,066$ 743,649 743,644 780,189 871,668 8,615,176 396,714 1,739,990 11,594,247 (5,834,147) (5,132,797) (4,856,565) (4,666,256) (38,502) (382) (887) - (113,068) (47,522) (87,854) - 6,363,318 (1,393,167) 78,393 9,990,725 76,581,811 77,974,978 77,896,585 67,905,860 82,945,129$ 76,581,811$ 77,974,978$ 77,896,585$ 36,645,751$ 33,407,849$ 27,672,828$ 24,671,901$
69.36% 69.63% 73.81% 75.95%
9,581,222$ 9,353,143$ 9,860,790$ 9,398,580$ 382.47% 357.18% 280.63% 262.51%
Measurement Period
65
14.A
City of Hemet
Required Supplementary Information
Year Ended June 30, 2021
Schedule of Changes in the Net Pension
Liability and Related Ratios
Agent Multiple-employer Plan - Safety
Total Pension Liability 2020 2019 2018
Service cost 3,877,702 $ 3,746,584 $ 3,255,817 $ Interest on total pension liability 13,404,657 12,696,170 11,907,636 Changes in assumptions - - (582,760) Differences between expected and actual experience 2,343,095 4,092,051 2,318,140 Benefit payments, including refunds (9,217,556) (8,667,438) (8,277,450) Net change in total pension liability 10,407,898 11,867,367 8,621,383 Total pension liability - beginning 187,804,561 175,937,194 167,315,811 Total pension liability - ending (a) 198,212,459 $ 187,804,561 $ 175,937,194 $ Plan Fiduciary Net Position
Contributions - employer 6,947,064 $ 6,605,381 $ 5,494,582 $ Contributions - employee 1,607,715 1,569,835 1,429,167 Net investment income 6,111,153 7,562,691 9,055,192 Benefit payments (9,217,556) (8,667,438) (8,277,450) Plan to Plan Resource Movement - - (265) Administrative/Other Expense (170,814) (81,214) (483,180) Net change in plan fiduciary net position 5,277,562 6,989,255 7,218,046 Plan fiduciary net position - beginning 121,165,519 114,176,264 106,958,218 Plan fiduciary net position - ending (b) 126,443,081 $ 121,165,519 $ 114,176,264 $ Net pension liability - ending (a) - (b) 71,769,378 $ 66,639,042 $ 61,760,930 $ Plan fiduciary net position as a percentage
of the total pension liability 63.79% 64.52% 64.90%
Covered payroll 12,672,228 $ 11,986,001 $ 10,732,874 $ Net pension liability as percentage of
covered payroll 566.35% 555.97% 575.44%
Notes to Schedule of Changes in Net Pension Liability and Related Ratios:
Measurement Period
Benefit Changes: The figures above do not include any liability impact that may have resulted from plan changes which occurred after the June 30, 2018 valuation date. This applies to 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 accounting discount rate reduced from 7.65 percent to 7.15 percent.
In 2016, there were no changes. In 2015, amounts reported reflected an adjustment of the discount rate from
7.5 percent (net of administrative expense) to 7.65 percent (without a reduction for pension plan administrative ex
pense.) In 2014, amounts reported were based on the 7.5 percent discount rate. * Pension schedules are intended to show information for ten years, additional years’ information will be displayed as it becomes available.
66
14.A
2017 2016 2015 2014
2,874,210$ 2,471,569$ 2,394,505$ 2,495,555$ 11,326,420 10,976,376 10,402,942 9,879,182 10,043,106 - (2,726,343) - (1,131,468) 1,932,999 1,323,162 - (7,718,359) (7,544,599) (7,001,597) (6,313,012) 15,393,909 7,836,345 4,392,669 6,061,725 151,921,902 144,085,557 139,692,888 133,631,163 167,315,811$ 151,921,902$ 144,085,557$ 139,692,888$ 4,880,193$ 4,516,245$ 4,085,934$ 3,816,628$ 1,142,393 1,032,806 885,734 896,539 11,060,588 516,112 2,205,144 14,795,183 (7,718,359) (7,544,599) (7,001,597) (6,313,012) 38,502 382 887 - (144,246) (60,481) (111,835) - 9,259,071 (1,539,535) 64,267 13,195,338 97,699,147 99,238,682 99,174,415 85,979,077 106,958,218$ 97,699,147$ 99,238,682$ 99,174,415$ 60,357,593$ 54,222,755$ 44,846,875$ 40,518,473$
63.93% 64.31% 68.87% 70.99%
9,450,596$ 9,039,459$ 8,826,041$ 8,870,562$ 638.66% 599.85% 508.12% 456.77%
Measurement Period
67
14.A
City of Hemet
Required Supplementary Information
Year Ended June 30, 2021
Schedule of Contributions – Last 10 Years*
Agent Multiple-employer Plan – Miscellaneous Plan
Schedule of Contributions – Last 10 Years*
Agent Multiple-employer Plan – Safety Plan
Contributions in
Relation to the Contributions
Contractually Actuarially Contribution as a % of
Required Determined Deficiency/ Covered Covered
Fiscal Year Contributions Contributions (Excess) Payroll Payroll 2021 3,887,516$ (3, 887,516)$ -$ 8, 751,743$ 44.42% 2020 3,789,402 (3,789,402) - 9, 960,091 38.05% 2019 3,789,256 (3,789,256) - 9, 693,519 39.09% 2018 3,136,888 (3,136,888) - 9, 531,865 32.91% 2017 2,990,210 (2,990,210) - 9, 581,222 31.21% 2016 2,647,176 (2,647,176) - 9, 353,153 28.30% 2015 2,503,520 (2,503,520) - 9, 860,790 25.39% 2014 2,191,066 (2,191,066) - 9, 398,580 23.31% Contributions in
Relation to the Contributions
Contractually Actuarially Contribution as a % of
Required Determined Deficiency/ Covered Covered
Fiscal Year Contributions Contributions (Excess) Payroll Payroll 2021 7,487,463$ (7, 487,463)$ -$ 11, 376,556$ 65.81% 2020 6,947,140 (6,947,140) - 12, 315,616 56.41% 2019 6,605,381 (6,605,381) - 11, 986,001 55.11% 2018 5,494,582 (5,494,582) - 10, 732,874 51.19% 2017 4,880,193 (4,880,193) - 9, 450,596 51.64% 2016 4,516,245 (4,516,245) - 9, 039,459 49.96% 2015 4,085,934 (4,085,934) - 8, 826,041 46.29% 2014 3,816,628 (3,816,628) - 8, 870,562 43.03% 68
14.A
City of Hemet
Required Supplementary Information
Year Ended June 30, 2021
Schedule of Changes in the Net OPEB Liability and Related Ratios for the Measurement Periods Ended June 30
Last 10 Years*
* OPEB schedules are intended to show information for ten years, additional years’ information will be displayed as it becomes available.
2020 2019 2018 2017
Total OPEB Liability
Service cost 184,471$ 208,241$ 359,700$ 349,223$ Interest on total OPEB liability 2,987,576 3,035,365 2,919,091 2,936,563 Changes in assumptions 3,010,639 - 2,845,604 - Changes in benefits - - - - Differences between expected and actual experience 465,835 - (191,273) - Benefit payments, including refunds (3,984,911) (3,984,013) (3,858,552) (3,293,090) Net change in total OPEB liability 2,663,610 (740,407) 2,074,570 (7,304) Total OPEB liability - beginning 49,609,199 50,349,606 48,275,036 48,282,340 Total OPEB liability - ending (a) 52,272,809$ 49,609,199$ 50,349,606$ 48,275,036$ Plan Fiduciary Net Position
Contributions - employer 4,253,811$ 4,260,842$ 4,112,794$ 3,540,596$ Net Investment Income 432,284 66,550 64,025 61,075 Benefit payments (3,984,911) (3,984,013) (3,858,552) (3,293,090) Administrative Expense (73,501) (84,114) (56,932) (49,749) Net change in plan fiduciary net position 627,683 259,265 261,335 258,832 Plan fiduciary net position - beginning 1,587,737 1,328,472 1,067,137 808,305 Plan fiduciary net position - ending (b) 2,215,420$ 1,587,737$ 1,328,472$ 1,067,137$ Net OPEB liability - ending (a) - (b) 50,057,389$ 48,021,462$ 49,021,134$ 47,207,899$ Plan fiduciary net position as a percentage
of the total OPEB liability 4.2% 3.2% 2.6% 2.2%
Covered - employee payroll 25,724,365 23,502,304 23,892,668 23,441,109 Net OPEB liability as a percentage of
covered-employee payroll 194.59% 204.33% 205.17% 201.39% Me
asurement Period
69
14.A
City of Hemet
Notes to Required Supplementary Information
Year Ended June 30, 2021
BUDGETS AND BUDGETARY ACCOUNTING
The City uses the following procedures in establishing the bud getary data reflected in the financial statements:
After January 1, department heads prepare estimates for required appropriations for the fiscal year commencing the following July 1. The proposed budget includes estimated ex penditures and forecasted revenues for the fiscal year. The data is presented to the City Manager for review. The City Manager submits to the City Council a proposed operating budget for the upcoming fiscal year. The operating budget includes a summary of the proposed expenditures and financial resources of the City, as well as historical data for the preceding two fiscal periods. Public hearings are conducted to obtain taxpayer comments. The City Council is normally expected to adopt the budget prior to the beginning of the next fiscal period through passage of an adopting resolution. This appropriated budget covers substantially all City expenditures. There were no significant non-budgeted financial activities. All appropriated amounts are as originally adopted or as amended by the City Council and not subject to continuing appropriation lapse at year end.
The City Manager is authorized to transfer budgeted amounts between functions, departments and expenditure accounts within funds. Transfers of appropriations between fun ds may be made only by authority of the City Council. Formal budgetary integration is employed as a management control device during the fiscal year for the General, Special Revenue, Capital Projects, and Debt Service funds. Formal budgetary control is not employed for Debt Service funds because effective budgetary control is alternatively achieved through debt indenture provisions. It is the policy of the City of Hemet to only budget capital expenditure projects from existing capital projects funds fund balances. No annual reven ues are budgeted due to their annual volatility.
Budgets for the various funds are adopted on a basis consistent with generally accepted accounting principles (GAAP). Annual appropriated budgets are legally adopted for the General, Special Revenue, Capital Projects, and Debt Service fund types.
A budget was not adopted for the ARPA Special Revenue fund due to the timing of the Rescue Act by the Federal Government.
70
14.A
SUPPLEMENTARY INFORMATION
14.A
Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)
REVENUES
Charges for Services 265,320 $ 1,139,337 $ 874,017 $ Investment Income 30,000 374 (29,626)
Miscellaneous - 13,453 13,453 Total Revenues 295,320 1,153,164 857,844
EXPENDITURES
Current:
Public Works 1,959,384 52,077 1,907,307
Capital Outlay 2,496,126 - 2,496,126 Total Expenditures 4,455,510 52,077 4,403,433
Excess (Deficiency) of Revenues
over Expenditures (4,160,190) 1,101,087 5,261,277
OTHER FINANCING SOURCES (USES)
Transfers In - - - Transfers Out - - - Total Other Financing Sources (Uses) - - - Net Change in Fund Balances (4,160,190) 1,101,087 5,261,277 Fund Balance, Beginning of Year 2,978,037 2,978,037 -
Fund Balance, End of Year (1,182,153)$ 4,079,124$ 5,261,277$ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Bridges/Streets Traffic Facilities Capital Projects Fund Year Ended June 30, 2021
71
14.A
City of Hemet
Non-Major Governmental Funds
SPECIAL REVENUE FUNDS
Special revenue funds are used to account for revenue derived from specific taxes or other dedicated revenue sources (other than for major capital projects) that are restri cted by law or administrative action for expenditures for specified purposes.
Public Safety/Towing - This fund accounts for the financial transactions involving the use of monies collected for towing service as related to public safety.
Gas Tax Fund - Accounts for transactions as pr escribed by the State of California statute on California Streets and Highways; including receipts under Streets and Highways Cod e Section 2105, 2106, 2107, 2107.5 and SB300.
Measure A - Accounts for the use of Measure A tax monies for transit purposes.
Air Pollution Reduction - Accounts for the financial transactions per Regulation 15 of th e South Coast Air Quality Management District.
Lighting/Landscape Maintenance District - Accounts for the financial transactions of City-wide lighting a nd landscaping assessment district established by City Council.
Post Proposition 218 Lighting District - Accounts for the financial transactions of lighting districts voted by the citizens of those specified areas.
Post Proposition 218 Landscape District - Accounts for financial transactions of landscape districts voted in by the citizens of those specified areas.
Public Works CFD - Accounts for financial transactions of lighting, landscape and maintenance of specific areas established by the City Council.
Asset Seizure - Accounts for the financial transac tions associated with assets seized in narcotics investigations to be used for law enforcement purposes.
Public Safety Grants - Accounts for the financial transactions as prescribed by variou s State and Federal Police Grants.
Public Safety CFD - Accounts for the proceeds from t he Public Safety Community Faci lities District voted in by the citizens of those specific areas to be used specifically for public safety.
Citizen Option for Public Safety Programs (COPS) - Accounts for the financial transactions as prescribed by the State of California Grant under AB 3229.
Local Law Enforcement Block Grant (LLEBG) - Accounts for the financial transactions as prescribed by the U.S. Department of Justice Grant for the Local Law Enforcement Block Grant Program.
Community Development Block Grant - Accounts for the financial transactions as prescribed by the Federal Department of Housing and Urban Development for Community Development Block Grant Programs.
General Plan - Accounts for the financial transactions related to updating and maintaining the City’s general plan.
72
14.A
City of Hemet
Non-Major Governmental Funds - Continued
SPECIAL REVENUE FUNDS - Continued
HOME Program - Home Investment Partnership Program - Accounts for the financial transactions of the federally funded HOME program as administered by the State of C alifornia’s Department of Housing and Community Development.
CAL HOME Program - Accounts for the financial transactions of the State funded program to replace and rehabilitate mobile homes.
2001 - 2008 HOME Program - Accounts for the financial transactions of the Federally fun ded HOME program as administered by the State of California Department of Housing and Community Development.
Neighborhood Stabilization Program Grant - Accounts for the financial transactions as prescribed by the Federal Department of Housing and Urban Development for Neighborhood Stabilization Program Grants.
Housing Authority - This fund accounts for the revenue received from the City’s affordable housing programs which facilitate housing development and affordable housing opportunities.
Indian Gaming Grants - This fund accounts for the financial transactions of Indian Gaming Grants received by the City to be spent on specific programs or departments.
CAPITAL PROJECTS FUNDS
Public Meeting Facilities - Accounts for the financial transactions for the public meeti ng facilities identified in the development impact fee report and funded through developer contributions.
General Facilities - Accounts for the financial transactions for general faciliti es identified in the development impact fee report and funded through developer contributions.
Flood Control - Accounts for the financial transactions for flood control im provements identified in the development impact fee report and funded through developer contributions.
Law Enforcement Facilities - Accounts for the financial transactions for the purchase of equipment identified in the development impact fee report and funded through developer contributions.
Fire Facilities - Accounts for the financial trans actions for the purchase of equ ipment identified in the development impact fee report and funded through developer contributions.
Park Development - Accounts for the financial transactions for park acquisition s and development identified in the development impact fee report and funded through park dedication fees and state grants.
Valley Wide DVL Park - Accounts for the financial transactions for development iden tified in the development impact fee report and funded through developer contributions.
Library Facilities - Accounts for the financial transactions for expansion of lib rary facilities identified in the development impact fee report and funded through developer contributions.
Equipment Replacement - Accounts for accumulation of reserves for future replacement of rolling stock vehicles from other funds.
73
14.A
City of Hemet
Non-Major Governmental Funds - Continued
General Capital - Accounts for the financial transactions for the addition of new (non-replacement) equipment.
PERMANENT FUNDS
LaSalle Library Endowment - Accounts for an endowment given to the City of Hemet for the benefit of the Library. Only interest earned on the principal amount of $1,00 0,000 can be used for non-operating costs of the Library.
74
14.A
Lighting and
Public Air Pollution Landscaping
Safety/Towing Gas Tax Measure A Reduction Maintenance
ASSETS
Cash and Investments 156,709 $ 4,449,868 $ 7,081,622 $ 978,837 $ 2,105,913 $ Receivables:
Accounts - 104,786 - 28,280 46,994 Interest - - - - - Due from Other Governments - 287,743 673,960 - 66,785 Notes - - - - - Allowance for Forgivable Notes - - - - - Due from Other Funds - - - - - Land Held for Resale - - - - - Total Assets 156,709 $ 4,842,397 $ 7,755,582 $ 1,007,117 $ 2,219,692 $
LIABILITIES
Accounts Payable 349$ 118,672$ 1,800,812$ -$ 169,059$ Accrued Salaries and Benefits 1,569 7,024 2,148 - 6,139 Deposits - - - - - Due to Other Funds - - - - - Total Liabilities 1,918 125,696 1,802,960 - 175,198
DEFERRED INFLOWS OF RESOURCES
Unavailable Revenues - Grants - - - - - Total Deferred Inflows of Resources - - - - -
FUND BALANCE (DEFICITS)
Nonspendable - - - - - Restricted 154,791 4,716,701 5,952,622 1,007,117 2,044,494 Assigned - - - - - Unassigned - - - - - Total Fund Balances 154,791 4,716,701 5,952,622 1,007,117 2,044,494 Total Liabilities, Deferred Inflows of
Resources and Fund Balances (Deficits) 156,709$ 4,842,397$ 7,755,582$ 1,007,117 $ 2,219,692 $ City of Hemet
Combining Balance Sheet
Non-major Governmental Funds
June 30, 2021
Special Revenue
75
14.A
Post Post
Prop 218 Prop 218 Public Works Asset Public Public COPS Lighting Landscaping CFD Seizure Safety Grants Safety CFD AB 3229 1,230,798$ 2,394,017 $ 32,985 $ 150,549 $ 38,842 $ - $ 307,559$ 200 3,267 - - 84,070 - - - - - - - - - 19,556 108,756 - - 15,628 119,239 - - - - - - - - - - - - - - - - - - - - - 201,770 - - - - - - - 1,250,554$ 2,506,040$ 32,985$ 150,549$ 138,540$ 119,239$ 509,329$ 13,461$ 89,579$ 10,534 $ 4,440$ 65,144$ 4,359$ 11,840$ 1,239 14,950 - - - 9,513 - - 87,975 - 82,835 - 6,000 - - - - - - 110,922 - 14,700 192,504 10,534 87,275 65,144 130,794 11,840 - - - - - - - - - - - - - - - - - - - - - 1,235,854 2,313,536 22,451 63,274 73,396 - 497,489 - - - - - - - - - - - - (11,555) - 1,235,854 2,313,536 22,451 63,274 73,396 (11,555) 497,489 1,250,554$ 2,506,040$ 32,985$ 150,549$ 138,540$ 119,239$ 509,329$ Continued
Special Revenue
76
14.A
Local Law Community
Enforcement Development General HOME CalHome
Block Grant Block Grant Plan Program Grant
ASSETS
Cash and Investments - $ - $ 145,548$ 489,401$ 182,355$ Receivables:
Accounts - - - 250 - Interest - - - - - Due from Other Governments - 495,109 - - - Notes - - - 326,404 399,991 Allowance for Forgivable Notes - - - - - Due from Other Funds - - - 206,010 - Land Held for Resale - - - - - Total Assets - $ 495,109 $ 145,548 $ 1,022,065$ 582,346$
LIABILITIES
Accounts Payable - $ 278,355$ -$ -$ -$ Accrued Salaries and Benefits - 6,272 - - - Deposits - - - - - Due to Other Funds 90,848 206,010 - - - Total Liabilities 90,848 490,637 - - -
DEFERRED INFLOWS OF RESOURCES
Unavailable Revenues - Grants - - - - - Total Deferred Inflows of Resources - - - - -
FUND BALANCE (DEFICITS)
Nonspendable - - - - - Restricted - 4,472 145,548 1,022,065 582,346 Assigned - - - - - Unassigned (90,848) - - - - Total Fund Balances (90,848) 4,472 145,548 1,022,065 582,346 Total Liabilities, Deferred Inflows of
Resources and Fund Balances (Deficits) - $ 495,109 $ 145,548 $ 1,022,065$ 582,346$ Special Revenue
City of Hemet
Combining Balance Sheet
Non-major Governmental Funds - Continued
June 30, 2021
77
14.A
Indian Public
2001 - 2008 Housing Gaming Meeting General Flood
Home Grant NSP Program Authority Grants Facilities Facilities Control 942,466$ 20,104 $ 211,822 $ 6,411 $ 227,839 $ 775,564 $ 3,699,682 $ - - 3,500 - - - - 528,113 - 772,667 - - - - - - - - - - - 4,086,362 173,874 2,947,104 - - - - (4,128,113) - (1,448,338) - - - - - - - - - - 354,137 - 593,919 1,482,500 - - - - 1,428,828$ 787,897 $ 3,969,255 $ 6,411 $ 227,839 $ 775,564 $ 4,053,819 $ -$ 491$ - $ - $ - $ - $ 1,838$ - - - - - - - - - 5,733 - - - - - - - - - - - - 491 5,733 - - - 1,838 - - - - - - - - - - - - - - - - - - - - - 1,428,828 787,406 3,963,522 6,411 227,839 775,564 4,051,981 - - - - - - - - - - - - - - 1,428,828 787,406 3,963,522 6,411 227,839 775,564 4,051,981 1,428,828$ 787,897 $ 3,969,255 $ 6,411 $ 227,839 $ 775,564 $ 4,053,819 $ Continued
Special Revenue Capital Projects
78
14.A
Law Valley
Enforcement Fire Park Wide Library
Facilities Facilities Development DVL Park Facilities
ASSETS
Cash and Investments 162,349$ 3,954,115$ 1,938,339$ 161,501$ 663,825$ Receivables:
Accounts - - - - - Interest - - - - - Due from Other Governments - - - - - Notes - - - - - Allowance for Forgivable Notes - - - - - Due from Other Funds - - - - - Land Held for Resale - - - - - Total Assets 162,349$ 3,954,115$ 1,938,339$ 161,501$ 663,825$
LIABILITIES
Accounts Payable -$ - $ 11,263$ - $ 24,452$ Accrued Salaries and Benefits - - - - - Deposits - - - - - Due to Other Funds - 354,137 - - - Total Liabilities - 354,137 11,263 - 24,452
DEFERRED INFLOWS OF RESOURCES
Unavailable Revenues - Grants - - - - - Total Deferred Inflows of Resources - - - - -
FUND BALANCE (DEFICITS)
Nonspendable - - - - - Restricted 162,349 3,599,978 1,927,076 161,501 639,373 Assigned - - - - - Unassigned - - - - - Total Fund Balances 162,349 3,599,978 1,927,076 161,501 639,373 Total Liabilities, Deferred Inflows of
Resources and Fund Balances (Deficits) 162,349$ 3,954,115$ 1,938,339$ 161,501$ 663,825$ City of Hemet
Combining Balance Sheet
Non-major Governmental Funds - Continued
June 30, 2021
Capital Projects
79
14.A
Permanent
Fund
LaSalle
Capital Equipment General Library
Projects Replacement Capital Endowment Totals
-$ 3,897,927$ 8,564 $ 1,028,734$ 37,444,245 $ - - - - 271,347 - - - 820 1,301,600 - - - - 1,786,776 - - - - 7,933,735 - - - - (5,576,451) - - - - 761,917 - - - - 2,076,419 - 3,897,927$ 8,564 $ 1,029,554$ 45,999,588 $ -$ - $ - $ 2,327$ 2,606,975$ - - - - 48,854 - - - - 182,543 - - - - 761,917 - - - 2,327 3,600,289 - - - - - - - - - - - - - 1,000,000 1,000,000 - - - 27,227 37,595,211 - 3,897,927 8,564 - 3,906,491 - - - - (102,403) - 3,897,927 8,564 1,027,227 42,399,299 -$ 3,897,927$ 8,564 $ 1,029,554$ 45,999,588 $ Capital Projects
80
14.A
Lighting and
Public Air Pollution Landscaping
Safety/Towing Gas Tax Measure A Reduction Maintenance
REVENUES
Taxes - $ - $ 2,336,742$ - $ - $ Intergovernmental Revenue - 3,443,407 - 171,220 - Charges for Services 80,442 - - - 1,934,494 Investment Income 12 263 554 66 104
Miscellaneous - 89,352 - - 173,574 Total Revenues 80,454 3,533,022 2,337,296 171,286 2,108,172
EXPENDITURES
Current:
General Government - - - - - Public Safety 36,029 - - - - Community Development - - - - - Public Works - 1,543,790 - - 1,607,213 Libraries - - - - - Capital Outlay - - 3,869,195 40,378 - Total Expenditures 36,029 1,543,790 3,869,195 40,378 1,607,213 Excess (Deficiency) of Revenues
Over Expenditures 44,425 1,989,232 (1,531,899) 130,908 500,959
OTHER FINANCING SOURCES (USES)
Transfers In - 20,004 - - - Transfers Out - - - - - Total Other Financing Sources (Uses) - 20,004 - - - Net Change in Fund Balances 44,425 2,009,236 (1,531,899) 130,908 500,959 Fund Balances, Beginning of Year 110,366 2,707,465 7,484,521 876,209 1,543,535 Prior Period Adjustment - - - - - Fund Balances, End of Year 154,791$ 4,716,701 $ 5,952,622 $ 1,007,117 $ 2,044,494 $ Special Revenue
Year Ended June 30, 2021
City of Hemet
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non-Major Governmental Funds
81
14.A
Post Post
Prop 218 Prop 218 Public Works Asset Public Public COPS Lighting Landscaping CFD Seizure Safety Grants Safety CFD AB 3229 -$ - $ - $ -$ - $ -$ -$ - - - 3,840 304,596 - 202,251 395,490 1,978,285 35,000 - - 738,111 - 82 140 1 10 2 - 35 - 10,724 - - - - - 395,572 1,989,149 35,001 3,850 304,598 738,111 202,286 - - - - - - - - - - 4,440 300,997 576,400 - - - - - - - - 189,271 1,698,088 16,834 - - - - - - - - - - - - - - - - - 111,910 189,271 1,698,088 16,834 4,440 300,997 576,400 111,910 206,301 291,061 18,167 (590) 3,601 161,711 90,376
- - - - - - - - - - - - - - - - - - - - - 206,301 291,061 18,167 (590) 3,601 161,711 90,376
1,029,553 2,022,475 4,284 63,864 69,795 (173,266) 407,113 - - - - - - - 1,235,854$ 2,313,536$ 22,451$ 63,274$ 73,396 $ (11,555)$ 497,489$ Continued
Special Revenue
82
14.A
Local Law Community
Enforcement Development General HOME CalHome
Block Grant Block Grant Plan Program Grant
REVENUES
Taxes - $ - $ - $ -$ -$ Intergovernmental Revenue - 1,202,373 - - - Charges for Services - - 67,200 - - Investment Income - - 8 53 12 Miscellaneous - - - - - Total Revenues - 1,202,373 67,208 53 12
EXPENDITURES
Current:
General Government - - 7,161 - - Public Safety - - - - - Community Development - 1,202,373 - - 1,912 Public Works - - - - - Libraries - - - - - Capital Outlay - - - - - Total Expenditures - 1,202,373 7,161 - 1,912 Excess (Deficiency) of Revenues
Over Expenditures - - 60,047 53 (1,900)
OTHER FINANCING SOURCES (USES)
Transfers In - - - - - Transfers Out - - - - - Total Other Financing Sources (Uses) - - - - - Net Change in Fund Balances
- - 60,047 53 (1,900) Fund Balances, Beginning of Year (90,848) 4,472 85,501 1,022,012 584,246 Prior Period Adjustment - - - - - Fund Balances, End of Year (90,848)$ 4,472 $ 145,548 $ 1,022,065$ 582,346$ Year Ended June 30, 2021
City of Hemet
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non-Major Governmental Funds - Continued
Special Revenue
83
14.A
Indian Public
2001 - 2008 Housing Gaming Meeting General Flood
Home Grant NSP Program Authority Grants Facilities Facilities Control -$ - $ - $ - $ - $ - $ - $ - 14,380 - - - - - - - - - - 173,987 272,207 70 3 16 - 18 54 271 - - - - - - - 70 14,383 16 - 18 174,041 272,478 - - - - - - - - - - - - - - - 5,355 - - - - - - - - - - - - - - - - - - - - - - - - 31,089 5,564 - 5,355 - - - 31,089 5,564 70 9,028 16 - 18 142,952 266,914
- - - - - - - - - - - - - - - - - - - - - 70 9,028 16 - 18 142,952 266,914
1,428,758 778,378 3,963,506 6,411 227,821 632,612 3,785,067 - - - - - - - 1,428,828$ 787,406$ 3,963,522$ 6,411$ 227,839$ 775,564$ 4,051,981$ Continued
Capital ProjectsSpecial Revenue
84
14.A
Law Valley
Enforcement Fire Park Wide Library
Facilities Facilities Development DVL Park Facilities
REVENUES
Taxes -$ -$ -$ -$ -$ Intergovernmental Revenue - - - - - Charges for Services 106,437 126,318 198,671 41,529 162,976 Investment Income 8 92 143 10 47 Miscellaneous - - - - 3,474 Total Revenues 106,445 126,410 198,814 41,539 166,497
EXPENDITURES
Current:
General Government - - - - - Public Safety - - - - - Community Development - - - - - Public Works - - - - - Libraries - - - - 104,624 Capital Outlay - - 69,358 - - Total Expenditures - - 69,358 - 104,624 Excess (Deficiency) of Revenues
Over Expenditures 106,445 126,410 129,456 41,539 61,873
OTHER FINANCING SOURCES (USES)
Transfers In - - - - - Transfers Out - - - - - Total Other Financing Sources (Uses) - - - - - Net Change in Fund Balances 106,445 126,410 129,456 41,539 61,873 Fund Balances, Beginning of Year 55,904 3,473,568 1,797,620 119,962 577,500 Prior Period Adjustment - - - - - Fund Balances, End of Year 162,349$ 3,599,978 $ 1,927,076 $ 161,501 $ 639,373 $ Capital Projects
Non-Major Governmental Funds - Continued
Year Ended June 30, 2021
City of Hemet
Combining Statement of Revenues, Expenditures and Changes in Fund Balances 85
14.A
Permanent
Fund
LaSalle
Capital Equipment General Library
Projects Replacement Capital Endowment Totals
-$ - $ - $ - $ 2,336,742$ - - - - 5,342,067 - 317,496 - - 6,628,643 - 285 - 5,415 7,774 - 29,147 - - 306,271 - 346,928 - 5,415 14,621,497 - - - - 7,161 - - - - 917,866 - - - - 1,209,640 - - - - 5,055,196 - - - 14,633 119,257 - - - - 4,127,494 - - - 14,633 11,436,614 - 346,928 - (9,218) 3,184,883 - - - - 20,004 - - - - - - - - - 20,004 - 346,928 - (9,218) 3,204,887 245,152 3,550,999 8,564 1,036,445 39,439,564
(245,152) - - - (245,152) -$ 3,897,927$ 8,564 $ 1,027,227$ 42,399,299$ Capital Projects
86
14.A
Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)
REVENUES
Charges for Services 55,000 $ 80,442 $ 25,442 $ Investment Income 600 12 (588)
Miscellaneous - - - Total Revenues 55,600 80,454 24,854
EXPENDITURES
Current:
Public Safety 52,100 36,029 16,071
Capital Outlay - - - Total Expenditures 52,100 36,029 16,071
Excess (Deficiency) of Revenues
over Expenditures 3,500 44,425 40,925
OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out - - -
Total Other Financing Sources (Uses) - - - Net Change in Fund Balances 3,500 44,425 40,925
Fund Balance, Beginning of Year 110,366 110,366 -
Fund Balance, End of Year 113,866$ 154,791$ 40,925$ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Public Safety Towing Special Revenue Fund Year Ended June 30, 2021
87
14.A
Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)
REVENUES
Licenses and Permits - $ - $ - $ Intergovernmental Revenue 3,064,137 3,443,407 379,270
Investment Income 5,000 263 (4,737)
Miscellaneous - 89,352 89,352
Total Revenues 3,069,137 3,533,022 463,885
EXPENDITURES
Current:
Public Works 4,877,943 1,543,790 3,334,153
Capital Outlay - - - Total Expenditures 4,877,943 1,543,790 3,334,153
Excess (Deficiency) of Revenues
over Expenditures (1,808,806) 1,989,232 3,798,038
OTHER FINANCING SOURCES (USES)
Transfers In 20,000 20,004 4
Transfers Out - - -
Total Other Financing Sources (Uses) 20,000 20,004 4 Net Change in Fund Balances (1,788,806) 2,009,236 3,798,042 Fund Balances, Beginning of Year 2,707,465 2,707,465 -
Fund Balance, End of Year 918,659 $ 4,716,701 $ 3,798,042 $ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Gas Tax Special Revenue Fund
Year Ended June 30, 2021
88
14.A
Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)
REVENUES
Taxes 1,537,000 $ 2,336,742 $ 799,742 $
Investment Income 25,000 554 (24,446)
Charges for Services - - - Total Revenues 1,562,000 2,337,296 775,296
EXPENDITURES
Current:
Public Works - - - Capital Outlay 13,718,279 3,869,195 9,849,084
Total Expenditures 13,718,279 3,869,195 9,849,084 Excess (Deficiency) of Revenues
Over Expenditures (12,156,279) (1,531,899) 10,624,380 Fund Balance, Beginning of Year 7,484,521 7,484,521 -
Fund Balance, End of Year (4,671,758) $ 5,952,622 $ 10,624,380 $ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Measure A Special Revenue Fund
Year Ended June 30, 2021
89
14.A
Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)
REVENUES
Intergovernmental Revenue 212,575 $ 171,220 $ (41,355) $ Investment Income 2,000 66 (1,934)
Charges for Services - - - Total Revenues 214,575 171,286 (43,289)
EXPENDITURES
Current:
Public Works - - - Capital Outlay 78,092 40,378 37,714 Total Expenditures 78,092 40,378 37,714 Excess (Deficiency) of Revenues
Over Expenditures 136,483 130,908 (5,575) Fund Balance, Beginning of Year 876,209 876,209 -
Fund Balance, End of Year 1,012,692 $ 1,007,117 $ (5,575) $ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Air Pollution Reduction Special Revenue Fund Year Ended June 30, 2021
90
14.A
Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)
REVENUES
Taxes - $ - $ - $
Charges for Services 1,900,561 1,934,494 33,933
Investment Income - 104 104 Miscellaneous - 173,574 173,574
Total Revenues 1,900,561 2,108,172 207,611
EXPENDITURES
Current:
Public Works 1,729,867 1,607,213 122,654
Capital Outlay - - - Total Expenditures 1,729,867 1,607,213 122,654
Excess (Deficiency) of Revenues
over Expenditures 170,694 500,959 330,265
OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out - - - Total Other Financing Sources (Uses) - - - Net Change in Fund Balances 170,694 500,959 330,265
Fund Balance, Beginning of Year 1,543,535 1,543,535 -
Fund Balance, End of Year 1,714,22 9$ 2,044,494$ 330,265$ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Lighting/Landscaping Maintenance Special Revenue Fund Year Ended June 30, 2021
91
14.A
Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)
REVENUES
Taxes - $ - $ - $
Charges for Services 388,039 395,490 7,451 Investment Income - 82 82 Miscellaneous - - - Total Revenues 388,039 395,572 7,533
EXPENDITURES
Current:
Public Works 258,506 189,271 69,235
Capital Outlay - - - Total Expenditures 258,506 189,271 69,235
Excess (Deficiency) of Revenues
over Expenditures 129,533 206,301 76,768
OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out - - - Total Other Financing Sources (Uses) - - - Net Change in Fund Balances 129,533 206,301 76,768 Fund Balance, Beginning of Year 1,029,553 1,029,553 -
Fund Balance, End of Year 1,159,086 $ 1,235,854 $ 76,768 $ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Post Prop 218 Lighting Special Revenue Fund Year Ended June 30, 2021
92
14.A
Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)
REVENUES
Taxes - $ - $ - $
Charges for Services 1,922,601 1,978,285 55,684
Investment Income - 140 140 Miscellaneous - 10,724 10,724 Total Revenues 1,922,601 1,989,149 66,548
EXPENDITURES
Current:
Public Works 1,764,688 1,698,088 66,600
Capital Outlay - - - Total Expenditures 1,764,688 1,698,088 66,600
Excess (Deficiency) of Revenues
over Expenditures 157,913 291,061 133,148
OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out - - - Total Other Financing Sources (Uses) - - - Net Change in Fund Balances 157,913 291,061 133,148 Fund Balance, Beginning of Year 2,022,475 2,022,475 -
Fund Balance, End of Year 2,180,38 8$ 2,313,536$ 133,148$ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Post Prop 218 Landscape Special Revenue Fund Year Ended June 30, 2021
93
14.A
Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)
REVENUES
Charges for Services - $ 35,000$ 35,000 $ Intergovernmental Revenues - 1 1 Total Revenues - 35,001 35,001
EXPENDITURES
Current:
Public Works - 16,834 (16,834) Capital Outlay - - - Total Expenditures - 16,834 (16,834) Excess (Deficiency) of Revenues
Over Expenditures - 18,167 18,167 Fund Balance, Beginning of Year 4,284 4,284 - Fund Balance, End of Year 4,284 $ 22,451 $ 18,167 $ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Public Works CFD Special Revenue Fund Year Ended June 30, 2021
94
14.A
Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)
REVENUES
Taxes - $ -$ - $
Intergovernmental Revenues - 3,840 3,840 Investment Income 1,000 10 (990) Miscellaneous - - -
Total Revenues 1,000 3,850 2,850
EXPENDITURES
Current:
Public Safety 8,569 4,440 4,129
Capital Outlay - - -
Total Expenditures 8,569 4,440 4,129
Excess (Deficiency) of Revenues
over Expenditures (7,569) (590) 6,979
OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out - - -
Total Other Financing Sources (Uses) - - - Net Change in Fund Balances (7,569) (590) 6,979 Fund Balance, Beginning of Year 63,864 63,864 -
Fund Balance, End of Year 56,295 $ 63,274$ 6,979 $ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Asset Seizure Special Revenue Fund
Year Ended June 30, 2021
95
14.A
Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)
REVENUES
Taxes - $ -$ - $
Intergovernmental Revenues 586,444 304,596 (281,848) Investment Income - 2 2 Total Revenues 586,444 304,598 (281,846)
EXPENDITURES
Current:
Public Safety 593,994 300,997 292,997
Capital Outlay - - -
Total Expenditures 593,994 300,997 292,997
Excess (Deficiency) of Revenues
over Expenditures (7,550) 3,601 11,151
OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out - - -
Total Other Financing Sources (Uses) - - - Net Change in Fund Balances (7,550) 3,601 11,151 Fund Balance, Beginning of Year 69,795 69,795 -
Fund Balance, End of Year 62,245 $ 73,396$ 11,151$ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Public Safety Grants Special Revenue Fund Year Ended June 30, 2021
96
14.A
Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)
REVENUES
Intergovernmental Revenue - $ -$ -$ Charges for Services 585,000 738,111 153,111
Investment Income - - - Total Revenues 585,000 738,111 153,111
EXPENDITURES
Current:
Public Safety 576,400 576,400 -
Capital Outlay - - -
Total Expenditures 576,400 576,400 -
Excess (Deficiency) of Revenues
over Expenditures 8,600 161,711 153,111
OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out - - -
Total Other Financing Sources (Uses) - - - Net Change in Fund Balances 8,600 161,711 153,111
Fund Balance, Beginning of Year (173,266) (173,266) -
Fund Balance, End of Year (164,666)$ (11,555)$ 153,111$ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Public Safety CFD Special Revenue Fund Year Ended June 30, 2021
97
14.A
Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)
REVENUES
Taxes - $ -$ - $
Intergovernmental Revenues 330,699 202,251 (128,448) Investment Income - 35 35 Total Revenues 330,699 202,286 (128,413)
EXPENDITURES
Current:
Public Safety - - -
Capital Outlay 330,699 111,910 218,789
Total Expenditures 330,699 111,910 218,789
Excess (Deficiency) of Revenues
over Expenditures - 90,376 90,376
OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out - - -
Total Other Financing Sources (Uses) - - - Net Change in Fund Balances - 90,376 90,376 Fund Balance, Beginning of Year 407,113 407,113 -
Fund Balance, End of Year 407,113 $ 497,489$ 90,376 $ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - COPS/AB 3229 Special Revenue Fund
Year Ended June 30, 2021
98
14.A
Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)
REVENUES
Taxes - $ -$ - $
Intergovernmental Revenues - - - Total Revenues - - -
EXPENDITURES
Current:
Public Safety - - -
Capital Outlay - - -
Total Expenditures - - - Excess (Deficiency) of Revenues
over Expenditures - - -
OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out - - -
Total Other Financing Sources (Uses) - - - Net Change in Fund Balances - - - Fund Balance, Beginning of Year (90,848) (90,848) - Fund Balance, End of Year (90,848)$ (90,848)$ - $ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Local Law Enforcement Block Grant Special Revenue Fund Year Ended June 30, 2021
99
14.A
Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)
REVENUES
Taxes - $ -$ - $
Intergovernmental Revenues 2,000,411 1,202,373 (798,038) Total Revenues 2,000,411 1,202,373 (798,038)
EXPENDITURES
Current:
General Governmental - - - Community Development 2,738,199 1,202,373 1,535,826 Capital Outlay - - -
Total Expenditures 2,738,199 1,202,373 1,535,826
Excess (Deficiency) of Revenues
over Expenditures (737,788) - 737,788
OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out - - -
Total Other Financing Sources (Uses) - - - Net Change in Fund Balances (737,788) - 737,788 Fund Balance, Beginning of Year 4,472 4,472 - Fund Balance, End of Year (733,316)$ 4,472$ 737,788 $ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Community Development Block Grant Special Revenue Fund Year Ended June 30, 2021
100
14.A
Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)
REVENUES
Taxes - $ -$ - $
Charges for Services 27,000 67,200 40,200 Investment Income 500 8 (492) Total Revenues 27,500 67,208 39,708
EXPENDITURES
Current:
General Government 57,900 7,161 50,739
Capital Outlay - - -
Total Expenditures 57,900 7,161 50,739
Excess (Deficiency) of Revenues
over Expenditures (30,400) 60,047 90,447
OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out - - -
Total Other Financing Sources (Uses) - - - Net Change in Fund Balances (30,400) 60,047 90,447 Fund Balance, Beginning of Year 85,501 85,501 -
Fund Balance, End of Year 55,101 $ 145,548$ 90,447 $ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - General Plan Special Revenue Fund
Year Ended June 30, 2021
101
14.A
Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)
REVENUES
Taxes - $ - $ - $
Investment Income - 53 53 Total Revenues - 53 53
EXPENDITURES
Current:
Community Development - - - Capital Outlay - - - Total Expenditures - - - Excess (Deficiency) of Revenues
over Expenditures - 53 53
OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out - - -
Total Other Financing Sources (Uses) - - - Net Change in Fund Balances - 53 53 Fund Balance, Beginning of Year 1,022,012 1,022,012 -
Fund Balance, End of Year 1,022,012 $ 1,022,06 5$ 53$
City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - HOME Program Special Revenue Fund
Year Ended June 30, 2021
102
14.A
Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)
REVENUES
Investment Income - $ 12$ 12 $ Intergovernmental Revenues - - - Total Revenues - 12 12
EXPENDITURES
Current:
Community Development - 1,912 (1,912) Public Works - - -
Capital Outlay - - -
Total Expenditures - 1,912 (1,912) Excess (Deficiency) of Revenues
over Expenditures - (1,900) (1,900)
OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out - - -
Total Other Financing Sources (Uses) - - - Net Change in Fund Balances - (1,900) (1,900) Fund Balance, Beginning of Year 584,246 584,246 -
Fund Balance, End of Year 584,246 $ 582,346$ (1,900)$ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - CalHome Grant Special Revenue Fund
Year Ended June 30, 2021
103
14.A
Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)
REVENUES
Taxes - $ - $ - $
Intergovernmental Revenues - - - Investment Income 2,500 70 (2,430) Miscellaneous - - - Total Revenues 2,500 70 (2,430)
EXPENDITURES
Current:
Community Development - - - Public Works - - -
Capital Outlay - - - Total Expenditures - - - Excess (Deficiency) of Revenues
over Expenditures 2,500 70 (2,430)
OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out - - - Total Other Financing Sources (Uses) - - - Net Change in Fund Balances 2,500 70 (2,430) Fund Balance, Beginning of Year 1,428,758 1,428,758 -
Fund Balance, End of Year 1,431,25 8$ 1,428,828$ (2,430)$ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - 2001- 2008 Home Grant Special Revenue Fund Year Ended June 30, 2021
104
14.A
Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)
REVENUES
Taxes - $ - $ - $
Intergovernmental Revenues 6,000 14,380 8,380 Investment Income - 3 3 Miscellaneous - - - Total Revenues 6,000 14,383 8,383
EXPENDITURES
Current:
Public Works - - -
Community Development 9,365 5,355 4,010 Total Expenditures 9,365 5,355 4,010 Excess (Deficiency) of Revenues
over Expenditures (3,365) 9,028 12,393
OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out - - - Total Other Financing Sources (Uses) - - - Net Change in Fund Balances (3,365) 9,028 12,393 Fund Balance, Beginning of Year 778,378 778,378 - Fund Balance, End of Year 775,013 $ 787,406 $ 12,393 $ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Neighborhood Stabilization Program Grant Special Revenue Fund Year Ended June 30, 2021
105
14.A
Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)
REVENUES
Taxes - $ - $ - $
Intergovernmental Revenues - - - Investment Income - 16 16 Total Revenues - 16 16
EXPENDITURES
Current:
Public Works - - -
Capital Outlay - - - Total Expenditures - - - Excess (Deficiency) of Revenues
over Expenditures - 16 16
OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out - - - Total Other Financing Sources (Uses) - - - Net Change in Fund Balances - 16 16 Fund Balance, Beginning of Year 3,963,506 3,963,506 -
Fund Balance, End of Year 3,963,506 $ 3,963,522 $ 16 $ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Housing Authority Special Revenue Fund Year Ended June 30, 2021
106
14.A
Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)
REVENUES
Taxes - $ - $ - $
Intergovernmental Revenues - - - Investment Income - - - Total Revenues - - -
EXPENDITURES
Current:
Public Works - - -
Capital Outlay - - - Total Expenditures - - - Excess (Deficiency) of Revenues
over Expenditures - - -
OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out - - - Total Other Financing Sources (Uses) - - - Net Change in Fund Balances - - - Fund Balance, Beginning of Year 6,411 6,411 -
Fund Balance, End of Year 6,411 $ 6,411 $ - $ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Indian Gaming Grant Special Revenue Fund Year Ended June 30, 2021
107
14.A
Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)
REVENUES
Intergovernmental Revenues - $ -$ - $ Charges for Services - - - Investment Income 2,000 18 (1,982) Total Revenues 2,000 18 (1,982)
EXPENDITURES
Current:
Public Works - - -
Libraries - - -
Capital Outlay - - -
Total Expenditures - - - Excess (Deficiency) of Revenues
over Expenditures 2,000 18 (1,982)
OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out - - -
Total Other Financing Sources (Uses) - - - Net Change in Fund Balances 2,000 18 (1,982) Fund Balance, Beginning of Year 227,821 227,821 -
Fund Balance, End of Year 229,821 $ 227,839$ (1,982)$ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Public Meeting Facilities Capital Projects Fund Year Ended June 30, 2021
108
14.A
Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)
REVENUES
Intergovernmental Revenues - $ - $ - $ Charges for Services 70,200 173,987 103,787 Investment Income 15,000 54 (14,946) Miscellaneous - - - Total Revenues 85,200 174,041 88,841
EXPENDITURES
Current:
Public Works - - -
Capital Outlay 665,652 31,089 634,563
Total Expenditures 665,652 31,089 634,563 Excess (Deficiency) of Revenues
over Expenditures (580,452) 142,952 723,404
OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out - - - Total Other Financing Sources (Uses) - - - Net Change in Fund Balances (580,452) 142,952 723,404 Fund Balance, Beginning of Year 632,612 632,612 -
Fund Balance, End of Year 52,160 $ 775,564 $ 723,404 $ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - General Facilities Capital Projects Fund Year Ended June 30, 2021
109
14.A
Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)
REVENUES
Intergovernmental Revenues - $ - $ - $ Charges for Services 186,400 272,207 85,807 Investment Income 30,000 271 (29,729) Miscellaneous - - - Total Revenues 216,400 272,478 56,078
EXPENDITURES
Current:
Public Works 260,488 - 260,488 Capital Outlay 1,825,187 5,564 1,819,623 Total Expenditures 2,085,675 5,564 2,080,111 Excess (Deficiency) of Revenues
over Expenditures (1,869,275) 266,914 2,136,189
OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out - - -
Total Other Financing Sources (Uses) - - - Net Change in Fund Balances (1,869,275) 266,914 2,136,189 Fund Balance, Beginning of Year 3,785,067 3,785,067 -
Fund Balance, End of Year 1,915,792$ 4,051,981$ 2,136,189$ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Flood Control Capital Projects Fund Year Ended June 30, 2021
110
14.A
Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)
REVENUES
Intergovernmental Revenues - $ -$ - $ Charges for Services 42,400 106,437 64,037 Investment Income - 8 8 Total Revenues 42,400 106,445 64,045
EXPENDITURES
Current:
Public Works - - -
Capital Outlay - - -
Total Expenditures - - - Excess (Deficiency) of Revenues
over Expenditures 42,400 106,445 64,045
OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out - - -
Total Other Financing Sources (Uses) - - - Net Change in Fund Balances 42,400 106,445 64,045 Fund Balance, Beginning of Year 55,904 55,904 -
Fund Balance, End of Year 98,304 $ 162,349$ 64,045 $ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Law Enforcement Facilities Capital Projects Fund Year Ended June 30, 2021
111
14.A
Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)
REVENUES
Intergovernmental Revenues - $ - $ - $ Charges for Services 50,400 126,318 75,918 Investment Income 25,000 92 (24,908) Total Revenues 75,400 126,410 51,010
EXPENDITURES
Current:
Public Works - - -
Capital Outlay - - - Total Expenditures - - - Excess (Deficiency) of Revenues
over Expenditures 75,400 126,410 51,010
OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out - - - Total Other Financing Sources (Uses) - - - Net Change in Fund Balances 75,400 126,410 51,010 Fund Balance, Beginning of Year 3,473,568 3,473,568 -
Fund Balance, End of Year 3,548,96 8$ 3,599,978$ 51,010$ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Fire Facilities Capital Projects Fund Year Ended June 30, 2021
112
14.A
Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)
REVENUES
Intergovernmental Revenues - $ - $ - $ Charges for Services 130,800 198,671 67,871 Investment Income 20,000 143 (19,857) Total Revenues 150,800 198,814 48,014
EXPENDITURES
Current:
Public Works - - -
Capital Outlay 265,129 69,358 195,771
Total Expenditures 265,129 69,358 195,771 Excess (Deficiency) of Revenues
over Expenditures (114,329) 129,456 243,785
OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out - - -
Total Other Financing Sources (Uses) - - - Net Change in Fund Balances (114,329) 129,456 243,785 Fund Balance, Beginning of Year 1,797,620 1,797,620 -
Fund Balance, End of Year 1,683,291 $ 1,927,076 $ 243,78 5$ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Park Development Capital Projects Fund Year Ended June 30, 2021
113
14.A
Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)
REVENUES
Intergovernmental Revenues - $ -$ - $ Charges for Services 25,500 41,529 16,029 Investment Income 1,200 10 (1,190) Total Revenues 26,700 41,539 14,839
EXPENDITURES
Current:
Public Works - - -
Capital Outlay - - -
Total Expenditures - - - Excess (Deficiency) of Revenues
over Expenditures 26,700 41,539 14,839
OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out - - -
Total Other Financing Sources (Uses) - - - Net Change in Fund Balances 26,700 41,539 14,839 Fund Balance, Beginning of Year 119,962 119,962 -
Fund Balance, End of Year 146,662 $ 161,501$ 14,839 $ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Valley Wide DVL Park Capital Projects Fund Year Ended June 30, 2021
114
14.A
Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)
REVENUES
Intergovernmental Revenues - $ - $ - $ Charges for Services 66,200 162,976 96,776 Investment Income 4,000 47 (3,953) Miscellaneous - 3,474 3,474
Total Revenues 70,200 166,497 96,297
EXPENDITURES
Current:
Libraries 167,833 104,624 63,209
Capital Outlay - - - Total Expenditures 167,833 104,624 63,209
Excess (Deficiency) of Revenues
over Expenditures (97,633) 61,873 159,506
OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out - - - Total Other Financing Sources (Uses) - - - Net Change in Fund Balances (97,633) 61,873 159,506 Fund Balance, Beginning of Year 577,500 577,500 -
Fund Balance, End of Year 479,867 $ 639,373 $ 159,506 $ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Library Facilities Capital Projects Fund Year Ended June 30, 2021
115
14.A
Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)
REVENUES
Intergovernmental Revenues - $ - $ - $ Charges for Services 317,500 317,496 (4)
Investment Income 10,000 285 (9,715) Miscellaneous - 29,147 29,147
Total Revenues 327,500 346,928 19,428
EXPENDITURES
Current:
Public Works - - -
Capital Outlay - - - Total Expenditures - - - Excess (Deficiency) of Revenues
over Expenditures 327,500 346,928 19,428
OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out - - -
Total Other Financing Sources (Uses) - - - Net Change in Fund Balances 327,500 346,928 19,428 Fund Balance, Beginning of Year 3,550,999 3,550,999 -
Fund Balance, End of Year 3,878,49 9$ 3,897,927$ 19,428$ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Equipment Replacement Capital Projects Fund Year Ended June 30, 2021
116
14.A
Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)
REVENUES
Intergovernmental Revenues - $ -$ - $ Charges for Services - - - Investment Income - - - Total Revenues - - -
EXPENDITURES
Current:
General Governmental - - - Public Works - - -
Capital Outlay - - -
Total Expenditures - - - Excess (Deficiency) of Revenues
over Expenditures - - -
OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out - - -
Total Other Financing Sources (Uses) - - - Net Change in Fund Balances - - - Fund Balance, Beginning of Year 8,564 8,564 -
Fund Balance, End of Year 8,564 $ 8,564$ - $ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - General Capital Capital Projects Fund Year Ended June 30, 2021
117
14.A
Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)
REVENUES
Intergovernmental Revenues - $ - $ - $ Charges for Services - - - Investment Income - 5,415 5,415 Total Revenues - 5,415 5,415
EXPENDITURES
Current:
General Governmental - - - Libraries 19,000 14,633 4,367
Capital Outlay - - - Total Expenditures 19,000 14,633 4,367 Excess (Deficiency) of Revenues
over Expenditures (19,000) (9,218) 9,782
OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out - - - Total Other Financing Sources (Uses) - - - Net Change in Fund Balances (19,000) (9,218) 9,782 Fund Balance, Beginning of Year 1,036,445 1,036,445 -
Fund Balance, End of Year 1,017,44 5$ 1,027,227$ 9,782$ City of Hemet
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - LaSalle Library Endowment Permanent Fund Year Ended June 30, 2021
118
14.A
THIS PAGE INTENTIONALLY LEFT BLANK
14.A
City of Hemet
Internal Service Funds
INTERNAL SERVICE FUNDS
Administrative Services - Accounts for the central administrative services funded by i nterdepartmental allocation.
Workers' Compensation - Accounts for the financial transactions of a self-insured wo rkers' compensation program
Medical Insurance - Accounts for the financial transactions of a self-insured em ployer active employee medical, dental and vision insurance program.
Liability Insurance - Accounts for the financial transactions of an external liability program.
OPEB - Accounts for financial transactions of a self-insured employer retiree medical, dental and vision insurance program.
119
14.A
Workers' Medical
Admin. Compensation Insurance
Services Admin Admin
ASSETS
Current:
Cash and Investments 5,999,912 $ 2,259,035 $ 52,734 $ Accounts Receivable 65,342 - - Due from Other Funds - - - Due from Other Governments - - - Inventory 130,322 - -
Total Current Assets 6,195,576 2,259,035 52,734
Noncurrent Assets:
Construction in Progress - - - Capital Assets 5,628,505 - -
Less Accumulated Depreciation (4,931,275) - - Total Noncurrent Assets 697,230 - - Total Assets 6,892,806 2,259,035 52,734
LIABILITIES
Current Liabilities:
Accounts Payable 500,792 2,475 4,149 Accrued Salaries and Benefits 36,771 3,548 - Due to Other Funds - - - Current Portion of Long-term Liabilities:
Claims Payable - 221,143 16,580 Total Current Liabilities 537,563 227,166 20,729
Noncurrent Liabilities:
Claims Payable - 221,144 -
Total Noncurrent Liabilities - 221,144 - Total Liabilities 537,563 448,310 20,729
NET POSITION
Net Investment in Capital Assets 697,230 - - Unrestricted 5,658,013 1,810,725 32,005
Total Net Position 6,355,243$ 1,810,725 $ 32,005 $
City of Hemet
Combining Statement of Net Position
Internal Service Funds
June 30, 2021
120
14.A
Liability
Insurance OPEB Total
89,659$ 924,514 $ 9,325,854 $
86,364 2,112 153,818
- - -
- - -
- - 130,322
176,023 926,626 9,609,994
- - -
- - 5,628,505
- - (4,931,275) - - 697,230
176,023 926,626 10,307,224
2,588 140,845 650,849
1,776 - 42,095
- - -
1,386,180 22,522 1,646,425
1,390,544 163,367 2,339,369
924,120 - 1,145,264
924,120 - 1,145,264
2,314,664 163,367 3,484,633
- - 697,230
(2,138,641) 763,259 6,125,361
(2,138,641)$ 763,259 $ 6,822,591 $
121
14.A
Workers' Medical
Admin. Compensation Insurance
Services Admin Admin
OPERATING REVENUE
Charges for Services 7,471,758 $ 2,208,101 $ 273,690 $ Miscellaneous 105,474 - -
Total Operating Revenue 7,577,232 2,208,101 273,690
OPERATING EXPENSES
Personnel Services 2,169,363 125,206 -
Parts and Supplies 1,047,986 - -
Maintenance 1,019,842 - -
Utilities 756,934 - -
Contracts, Rents and Leases 404,923 21,159 27,712 Insurance 140,496 1,022,428 -
Claims and Judgments 806,546 758 300,956 General Office - - - Depreciation 146,617 - -
Total Operating Expenses 6,492,707 1,169,551 328,668 Operating Income (Loss) 1,084,525 1,038,550 (54,978)
NONOPERATING REVENUE (EXPENSES)
Interest Expense - - - Total Nonoperating Revenue (Expenses) - - - Income (Loss) Before Transfers
and Capital Contributions 1,084,525 1,038,550 (54,978)
Capital Contributions - - - Transfers In - - - Transfers Out - - -
SPECIAL ITEM
Pension and OPEB Allocation 10,953,119 - - Change in Net Position 12,037,644 1,038,550 (54,978)
Net Position, Beginning (5,682,401) 772,175 86,983
Net Position, Ending 6,355,243$ 1,810,725 $ 32,005 $ City of Hemet
Combining Statement of Revenues, Expenses and Changes in Net Position Internal Service Funds
Year Ended June 30, 2021
122
14.A
Liability
Insurance OPEB Total
1,490,112$ 4,657,308 $ 16,100,969 $
827 - 106,301
1,490,939 4,657,308 16,207,270
120,001 13,603 2,428,173
- - 1,047,986
- - 1,019,842
- - 756,934
52,426 - 506,220
1,292,564 4,588,368 7,043,856
1,532,133 - 2,640,393
- - -
- - 146,617
2,997,124 4,601,971 15,590,021
(1,506,185) 55,337 617,249
- - -
- - -
(1,506,185) 55,337 617,249
- - -
- - -
- - -
- - 10,953,119 (1,506,185) 55,337 11,570,368
(632,456) 707,922 (4,747,777)
(2,138,641)$ 763,259 $ 6,822,591 $
123
14.A
Workers' Medical
Admin. Compensation Insurance
Services Admin Admin
CASH FLOWS FROM OPERATING ACTIVITIES
Cash Received from User Departments 7,877,693$ 2,208,101 $ 273,690 $ Cash Paid to Suppliers for Goods and Services (3,407,905) (1,042,941) (23,563) Cash Paid to Employees for Services (2,172,830) (125,001) - Cash Payments for Insurance and Claims (806,546) (758) (302,854) Net Cash From Operating Activities 1,490,412 1,039,401 (52,727)
CASH FLOWS FROM NONCAPITAL AND
RELATED FINANCING ACTIVITIES
Cash Paid (to) From Other Funds (70,245) 70,245 - Net Cash From Noncapital and Related
Financing Activities (70,245) 70,245 -
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES
Acquisition and Construction of Capital Assets (35,379) - - Net Cash From Capital and Related
Financing Activities (35,379) - -
CASH FLOWS FROM INVESTING ACTIVITIES
Interest Received - - - Net Cash From Investing Activities - - - Net Increase (Decrease) in Cash and Cash Equivalents 1,384,788 1,109,646 (52,727) Cash and Cash Equivalents, Beginning of the Year 4,615,124 1,149,389 105,461 Cash and Cash Equivalents, End of the Yea 5,999,912 $ 2,259,035 $ 52,734 $ Reconciliation of Operating Income (Loss) to
Net Cash from Operating Activities:
Operating Income (Loss) 1,084,525$ 1,038,550$ (54,978)$ Adjustments to Reconcile Operating Income (Loss) to
Net Cash Provided (Used) by Operating Activities:
Depreciation 146,617 - -
Changes in Operating Assets and Liabilities:
(Increase) Decrease in Accounts Receivable 300,461 - - (Increase) Decrease in Inventory (27,248) - - Increase (Decrease) in Accounts Payable (10,476) 646 4,149 Increase (Decrease) in Accrued Salaries and Benefits (3,467) 205 - Increase (Decrease) in Claims Payable - - (1,898) Net Cash from Operating Activities 1,490,412$ 1,039,401 $ (52,727) $ City of Hemet
Combining Statement of Cashflows
Internal Service Funds
Year Ended June 30, 2021
124
14.A
Liability
Insurance OPEB Total
9,646,242$ 4,657,488 $ 24,663,214 $
(9,608,121) (4,448,227) (18,530,757)
(121,194) (15,185) (2,434,210)
(698,211) 9,102 (1,799,267)
(781,284) 203,178 1,898,980
- - -
- - -
- - (35,379)
- - (35,379)
- - -
- - -
(781,284) 203,178 1,863,601
870,943 721,336 7,462,253
89,659$ 924,514 $ 9,325,854 $
(1,506,185)$ 55,337 $ 617,249 $
- - 146,617
8,155,303 180 8,455,944
- - (27,248)
(8,263,131) 140,141 (8,128,671)
(1,193) (1,582) (6,037)
833,922 9,102 841,126
(781,284)$ 203,178 $ 1,898,980 $
125
14.A
City of Hemet
Custodial Funds
CUSTODIAL FUNDS
McSweeny - Accounts for the McSweeny dev elopment projects administered by the City on behalf of the McSweeny developers.
Pass Thru Fees - Accounts for the developer fees collected by the City on beh alf of the County of Riverside.
Those fees are remitted periodically to the County.
Heartland 1999 - 1 CFD 2006 Refunding Series - Accounts for the financial transacting of a special tax bond issue which is financing the off-site improvements of a housing community and a golf course.
126
14.A
Total
Pass Thru Heartland Custodial
McSweeny Fees CFD 2006 Funds
ASSETS
Cash and Investments (911)$ 1,633,217$ -$ 1,632,306$ Accounts Receivables 2,122,321 - 9,143 2,131,464 Due from Other Funds - - - - Cash and Investments with Fiscal Agent - - 1,304,591 1,304,591 Total Assets 2,121,410$ 1,633,217 $ 1,313,734 $ 5,068,361 $
LIABILITIES
Accounts Payable 1,772,378 162 2,071$ 1,774,611$ Due to City of Hemet 349,943 - 701,388 1,051,331 Deposits - - - - Total Liabilities 2,122,321 162 703,459 2,825,942
NET POSITION
Held for the Benefit of Other Organiztions (911) 1,633,055 610,275 2,242,419 Total Net Position (911)$ 1,633,05 5$ 610,275$ 2,242,419$ City of Hemet
Combining Statement of Changes in Fiduciary Net Position Custodial Funds
June 30, 2021
127
14.A
Total
Pass Thru Heartland Custodial
McSweeny Fees CFD 2006 Funds
ADDITIONS
Contributions:
Taxes and assessments collected for others - 1,958,060$ 2,226,169 $ 4,184,229 $ Developer Contributions 2,122,321 - - 2,122,321 Investment Earnings:
Interest Income 15 - - 15 Total Additions 2,122,336 1,958,060 2,226,169 6,306,565
DEDUCTIONS
Payments on behalf of Others 2,368,399 - - 2,368,399 Payments to Other Agencies
for Service Charges Collected - 325,005 2,222,700 2,547,705 Total Deductions 2,368,399 325,005 2,222,700 4,916,104 Net Increase (decrease) in fiduciary net position (246,063) 1,633,055 3,469 1,390,461 Net Position, beginning of the year - - - - Restatement of Net Position 245,152 - 606,806 851,958 Net Position, end of the year (911)$ 1,633,055$ 610,275 $ 2,242,419 $ City of Hemet
Combining Statement of Changes in Fiduciary Net Position Custodial Funds
June 30, 2021
128
14.A
STATISTICAL SECTION
14.A
THIS PAGE INTENTIONALLY LEFT BLANK
14.A
City of Hemet (unaudited)
Description of Statistical Section Contents
June 30, 2021
This part of the City of Hemet's Annual Comprehensive financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information say about the government's overall financial health.
Contents: Pa ges
Financial Trends theses schedules contain trend information to help the reader understand how the City's financial performance and well-being have changed over time
130
Revenue Capacity these schedules contain information to help th e reader assess the City's most significant local revenue source, the property tax
140
Debt Capacity these schedules present information to help the r eader assess the affordability of the City's current levels of outstanding d ebt and the City's ability to issue additional debt in the future
146
Demographic and Economic Information these schedules offer demo graphic and economic indicators to help the reader understand the envir onment within which the City's financial activities take place
152
Operating Information these schedules contain service and infra structure data to help the reader understand how the information in the City's financial report relates to the services the City provides and the activities it performs
154
129
14.A
City of Hemet
Net Position by Component
Last Ten Fiscal Years
(accrual basis of accounting)
(amounts expressed in thousands)
2012 2013 2014 2015 2016
Governmental activities
Net Investment in Capital Assets 332,523 $ 326,964 $ 325,096 $ 324,343 $ 321,098 $ Restricted 42,003 33,450 36,986 39,006 43,671 Unrestricted 14,792 24,524 20,224 (53,711) (45,551) Total governmental activities net position 389,318$ 384,938 $ 382,307 $ 309,638 $ 319,218 $ Business-type activities
Net Investment in Capital Assets 3,694 $ 4,114 $ 4,171 $ 3,740 $ 3,522 $ Restricted - - - - - Unrestricted 14,171 7,559 7,828 3,606 6,550 Total business-type activities net position 17,865$ 11,673 $ 12,000 $ 7,346$ 10,072 $ Primary government
Net Investment in Capital Assets 336,217$ 331,078 $ 329,267 $ 328,083 $ 324,620 $ Restricted 42,003 33,450 36,986 39,006 43,671 Unrestricted 28,963 32,082 28,053 (50,105) (39,001) Total primary government net position 407,183$ 396,611 $ 394,307 $ 316,984 $ 329,290 $ Source: City of Hemet
Fiscal Year
Statistical Table 1
130
14.A
City of Hemet
Net Position by Component
Last Ten Fiscal Years
(accrual basis of accounting)
(amounts expressed in thousands)
Governmental activities
Net Investment in Capital Assets
Restricted
Unrestricted
Total governmental activities net position
Business-type activities
Net Investment in Capital Assets
Restricted
Unrestricted
Total business-type activities net position
Primary government
Net Investment in Capital Assets
Restricted
Unrestricted
Total primary government net position
Source: City of Hemet
2017 2018 2019 2020 2021
315,946 $ 312,748 $ 309,342 $ 308,639 $ 303,775 $
48,220 55,279 64,207 67,601 53,804 $ (58,471) (95,864) (99,715) (105,649) (78,520)$ 305,695 $ 272,163 $ 273,834 $ 270,591 $ 279,059 $
3,898$ 4,174 $ 3,893 $ 4,532 $ 3,973 $ - - - - - $ 7,068 (845) 1,868 14,760 19,623 $ 10,966 $ 3,329$ 5,761 $ 19,292 $ 23,596 $
319,844 $ 316,922 $ 313,235 $ 313,171 $ 307,748 $
48,220 55,279 64,207 67,601 53,804 (51,403) (96,709) (97,847) (90,889) (58,897) 316,661 $ 275,492 $ 279,595 $ 289,883 $ 302,655 $
Fiscal Year
Statistical Table 1
131
14.A
City of Hemet
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
(amounts expressed in thousands)
2012 2013 2014 2015 2016
Expenses
Governmental activities:
General government 1,870 $ 2,047 $ 3,082 $ 3,053 $ 1,142 $ Public Safety 26,114 25,449 28,308 28,947 21,566 Community development 4,367 5,064 6,627 5,325 3,952 Public Works 11,700 15,807 11,804 12,139 11,652 Sanitation 1,596 1,754 1,921 2,201 2,070 Parks 617 790 906 843 1,015 Libraries 1,689 1,600 1,751 1,855 1,788 Interest and related charges on long-term debt 363 - - - Total governmental activities expenses 48,317 52,510 54,397 54,363 43,186 Business-type activities:
Refuse 5,059 276 - - - Water 8,881 8,918 7,478 7,919 7,643 Total business-type activities expenses 13,940 9,194 7,478 7,919 7,643 Total primary government expenses 62,257$ 61,704 $ 61,875 $ 62,282 $ 50,829$ Program Revenues
Governmental activities:
Charges for services:
General government 1,031$ 1,494 $ 1,606 $ 600 $ 586 $ Public safety 1,185 902 1,069 681 760 Community development 795 602 718 3,197 2,674
Public Works 4,743 4,314 4,810 2,577 2,724 Sanitation 2,788 2,758 2,883 2,876 3,412 Other activities 50 36 35 44 2,764 Operating grants and contributions 3,219 1,981 2,454 2,742 3,349 Capital grants and contributions 6,445 5,321 5,850 7,211 7,658 Total government activities program revenues 20,255 17,409 19,425 19,928 23,928 Business-type activities
Charges for services:
Refuse 4,160 117 - - - Water 7,768 7,549 7,371 7,090 10,306 Operating grants and contributions - - - - - Capital grants and contributions - - - - - Total business-type activities program revenues 11,928 7,666 7,371 7,090 10,306 Total primary government program revenues 32,183 $ 25,076 $ 26,796 $ 27,018 $ 34,234$ Fiscal Year
Statistical Table 2
132
14.A
City of Hemet
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
(amounts expressed in thousands)
Expenses
Governmental activities:
General government
Public Safety
Community development
Public Works
Sanitation
Parks
Libraries
Interest and related charges on long-term debt
Total governmental activities expenses
Business-type activities:
Refuse
Water
Total business-type activities expenses
Total primary government expenses
Program Revenues
Governmental activities:
Charges for services:
General government
Public safety
Community development
Public Works
Sanitation
Other activities
Operating grants and contributions
Capital grants and contributions
Total government activities program revenues
Business-type activities
Charges for services:
Refuse
Water
Operating grants and contributions
Capital grants and contributions
Total business-type activities program revenues
Total primary government program revenues
2017
2018 2019 2020 2021
2,777$ 3,511 $ 6,181 $ 4,142 $ 1,964 $
34,746 43,067 40,916 48,122 46,711
4,874 5,729 5,535 5,056 5,420 11,696 13,766 11,962 12,526 10,728
2,048 2,248 2,167 1,838 2,437 1,176 1,407 1,205 1,433 1,052 2,085 2,125 2,026 1,884 1,892 - - - - - 59,402 71,853 69,992 75,001 70,204
- - - - - 9,966 12,052 9,261 9,845 10,222 9,966 12,052 9,261 9,845 10,222 69,368 $ 83,905 $ 79,253 $ 84,846 $ 80,426$
602$ 759 $ 793 $ 510 $ 2,589 $ 1,207 1,289 1,049 1,134 1,892 2,261 2,824 2,824 2,482 251
3,542 3,912 3,944 4,531 6,926 3,
918 4,003 3,969 4,372 4,339
58 159 141 28 2 2,559 2,719 2,455 2,005 4,039 6,220 6,503 7,962 7,890 7,758 20,367 22,168 23,137 22,952 27,796
- - - - - 11,460 10,602 11,445 11,993 12,114
- - - 10,416 - - - - - - 11,460 10,602 11,445 22,409 12,114
31,827 $ 32,770 $ 34,582 $ 45,361 $ 39,910$
Fiscal Year
Statistical Table 2
133
14.A
City of Hemet
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
(amounts expressed in thousands)
2012 2013 2014 2015 2016
Net (expense)/revenue
Governmental activities (28,061) $ (35,101) $ (34,972)$ (34,972) $ (30,431) $ Business-type activities (2,012) (1,527) (107) (107) 2,410 Total primary government net expense (30,073)$ (36,628) $ (35,079)$ (35,079) $ (28,021) $ General Revenues and Other Changes in
Net Positon
Governmental activities:
Taxes
Property taxes 7,813 7,343 6,207 6,207 6,208 Transient occupancy taxes 586 626 643 643 854 Sales taxes 9,426 10,118 11,043 11,043 12,275 Motor vehicle in lieu taxes 4,783 4,829 4,996 4,996 5,715 Franchise and other taxes 3,354 4,730 4,875 4,875 5,053 Investment income 572 132 565 565 1,415 Miscellaneous 448 264 184 184 765 Transfers (2,185) 2,527 (187) (187) 205 Total governmental activities 24,797 30,568 28,327 28,327 32,490 Business-type activities
Investment income 183 12 71 71 166 Gain (loss) on sale/disposal of assets 1,830 - - - - Miscellaneous 70 59 176 176 84 Transfers 2,185
(4,736) 187 187 (205)
Total business-type activities 4,268 (4,665) 434 434 45 Total primary government 29,065$ 25,903 $ 28,760 $ 28,760 $ 32,535$ Change in Net Position
Governmental activities 7,190$ (4,532)$ (6,646)$ (6,646)$ 2,059 $ Business-type activities 2,256 (6,192) 327 327 2,455 Total primary government 9,446$ (10,725)$ (6,319)$ (6,319)$ 4,514 $ Source: City of Hemet
Fiscal Year
Statistical Table 2
134
14.A
City of Hemet
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
(amounts expressed in thousands)
Net (expense)/revenue
Governmental activities
Business-type activities
Total primary government net expense
General Revenues and Other Changes in
Net Positon
Governmental activities:
Taxes
Property taxes
Transient occupancy taxes
Sales taxes
Motor vehicle in lieu taxes
Franchise and other taxes
Investment income
Miscellaneous
Transfers
Total governmental activities
Business-type activities
Investment income
Gain (loss) on sale/disposal of assets
Miscellaneous
Transfers
Total business-type activities
Total primary government
Change in Net Position
Governmental activities
Business-type activities
Total primary government
Source: City of Hemet
2017 2018 2019 2020 2021
(39,034)$ (49,685) $ (46,855) $ (51,151) $ (42,408) $ 1,495 (1,450) 2,185 12,563 1,892 (37,539)$ (51,135) $ (44,670) $ (38,588) $ (40,516) $ 6,485 7,123 7,718 7,919 8,028 963 1,026 975 770 891 14,175 23,446 24,986 25,352 32,268
6,061 6,393 6,786 7,073 7,394 4,964 5,048 5,117 5,173 5,491 194 403 2,425 957 303 439 649 357 223 42 350 138 163 243 248 33,631 44,226 48,527 47,710 54,665
(25) 21 350 226 (2) - - - - - 45 81 60 16 - (350) (138) (163) (243) (248) (330) (36) 247 (1) (250) 33,301 $ 44,190 $ 48,774 $ 47,709 $ 54,415$
(5,403)$ (5,459)$ 1,672$ (3,441)$ 12,259 $ 1,165 (1,487) 2,432 12,562 1,641 (4,238) $ (6,946)$ 4,104$ 9,121 $ 13,900 $
Fiscal Year
Statistical Table 2
135
14.A
City of Hemet
Fund Balance of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
(amounts expressed in thousands)
2012 2013 2014 2015 2016
General Fund
Nonspendable 3,221 1,020 12 13 7 Restricted - 698 873 1,075 1,253 Committed 7,439 7,888 7,270 7,288 7,727 Assigned 316 4,269 6,362 314 215 Unassigned 6,724 8,163 4,397 8,226 6,084 Total general fund 17,699$ 22,038 $ 18,913 $ 16,916 $ 15,287$ All other governmental funds
Nonspendable 1,354 1,354 1,354 1,000 1,000 Restricted 34,784 32,831 33,741 36,931 41,418 Committed - - - - - Assigned 4,181 4,452 4,554 4,759 6,586 Unassigned, reported in:
Special revenue funds (2,029) (1,225) (174) (276) (297) Capital projects funds - - - - - Total all other governmental funds 38,289$ 37,412 $ 39,476 $ 42,414 $ 48,707$ Source: City of Hemet Fiscal Year
Statistical Table 3
136
14.A
City of Hemet
Fund Balance of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
(amounts expressed in thousands)
General Fund
Nonspendable
Restricted
Committed
Assigned
Unassigned
Total general fund
All other governmental funds
Nonspendable
Restricted
Committed
Assigned
Unassigned, reported in:
Special revenue funds
Capital projects funds
Total all other governmental funds
Source: City of Hemet
2017 2018 2019 2020 2021
7 4 8 660 665 2,469 1,253 12,805 1,316 1,499 8,295 9,303 8,214 20,921 23,776 215 215 134 890 1,945 1,882 5,920 1,086 2,926 11,710 12,868 $ 16,695 $ 22,247 $ 26,713 $ 39,595 $
1,000 1,000 1,000 1,000 1,000 43,536 46,330 50,374 51,884 57,161
- - - - - 6,350 4,081 4,056 3,776 3,906 (81) (180) (191) (264) (102) - - - - - 50,805 $ 51,231 $ 55,239 $ 56,396 $ 61,965 $
Fiscal Year
Statistical Table 3
137
14.A
City of Hemet
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
(amounts expressed in thousands)
2012 2013 2014 2015 2016
Revenues
Taxes 22,502 $ 24,265 $ 24,275$ 30,083$ 31,725$ Licenses and permits 1,536 1,598 1,996 2,119 1,974 Intergovernmental revenues 11,113 9,322 10,033 6,638 6,712 Charges for services 9,924 9,509 10,107 8,966 9,988 Fines and forfeitures 511 404 400 379 412 Investment income 572 132 565 558 1,430 Other contributions - - - - - Miscellaneous 468 337 184 646 3,823 Total revenues 46,625 45,566 47,561 49,389 56,064 Expenditures
General government 1,983 1,949 2,412 2,812 2,307 Public safety 24,610 23,967 26,915 28,017 30,339 Community development 4,617 5,064 6,627 5,248 4,793 Public works 5,501 4,919 5,692 5,562 5,738 Sanitation 1,785 1,754 1,921 2,162 2,035 Parks 647 790 906 850 1,120 Libraries 1,441 1,248 1,399 1,419 1,506 Capital outlay 3,900 6,035 2,422 4,776 3,772
Debt service
Principal 405 - - - - Interest 342 - - - - SERAF Obligation - - - - - Fiscal-administrative charges 3 - - - - Total expenditures 45,234 45,725 48,294 50,846 51,611 Excess (deficiency) of
revenues over expenditures 1,392 (159) (733) (1,457) 4,453 Other financing sources (uses)
Transfers in 6,696 6,933 1,985 1,231 713 Transfers out (8,977) (3,313) (2,313) (1,231) (490) Issuance of debt - - - 8 11 Total other financing sources (2,281) 3,620 (328) 8 234 (uses)
Net change in fund balances (889) $ 3,461$ (1,061)$ (1,449)$ 4,687$ Debt service as a percentage of
noncapital expenditures 1.82% 0.00% 0.00% 0.00% 0.00%
Source: City of Hemet
Fiscal Year
Statistical Table 4
138