Agenda packet — Hollister City Council, January 5, 2026 (part 1 of 2)

CITY OF HOLLISTER

CITY COUNCIL AGENDA

REGULAR MEETING

Monday, January 5, 2026, 5:00 p.m.

City Council Chamber, City Hall
375 Fifth Street, Hollister, CA 95023

Roxanne Stephens, Mayor Jim Pia, Interim City Manager Rudy Picha, Council Member, District 1 Jennifer P. Thompson, City Attorney Rolan Resendiz, Council Member, District 2
Dolores Morales, Council Member, District 3
Priscilla de Anda, Council Member, District 4

Gordon Machado, City Treasurer

Special and Regular Meeting of the Hollister City Council 5:00 PM Special Meeting- Closed Session
6:30 PM Regular Meeting

As of January 1, 2023, the Levine Act (Government Code Section 84308) applies to City Council proceedings involving a license, permit, or other entitlement for use.

Pursuant to Government Code Section 84308, no Council Member shall accept, solicit, or direct a contribution of more than $500 from any party or their agent, or from any participant or their agent, while a proceeding involving a license, permit, or other entitlement for use is pending before the City or for 12 months after a final decision is rendered in that proceeding. Any Council Member who has received a contribution of more than $500 within the preceding 12 months from a party or their agent, or from a participant or their agent, shall disclose that fact on the record of the proceeding and shall not make, participate in making, or in any way attempt to use their official position to influence the decision.

Pursuant to Government Code Section 84308(d), any party to a covered proceeding before the Council is required, and any participant to such a proceeding is strongly urged, to disclose on the record of the proceeding any contribution, including aggregated contributions, of more than $500 made within the preceding 12 months by them or their agent to any Council Member. The disclosure must include the name of the party or participant and any other person making the contribution, if any; the name of the recipient; the amount of the contribution; and the date the contribution was made.

The disclosure shall occur in the manner required under Government Code Section 84308 and any applicable state or local regulations, opinions, or policies. No party or their agent, and no participant or their agent, shall make a contribution of more than $500 to any Council Member during the proceeding or for 12 months after a final decision is rendered in that proceeding.

The foregoing statements do not constitute legal advice, and parties and participants are urged to consult with their own legal counsel regarding the requirements of the law.

NOTICE TO PUBLIC
Persons who wish to address the City Council are asked to complete a speaker’s card and give it to

the City Clerk before addressing the City Council. Those who wish to address the City Council on an agenda item will be heard when the presiding officer calls for comments from the audience. City related items not on the agenda will be heard under the Public Input section of the agenda. Following recognition, persons desiring to speak are requested to advance to the podium and state their name and address. If you are joining us by Zoom, please click on the bottom of your screen to raise your hand. If you are joining us by Zoom using a cell phone, please press *9. After hearing audience comments, the public portion of the meeting will be closed, and the matter brought to the City Council for discussion.

Materials related to an item on this agenda submitted to the City Council after distribution of the agenda packet are available for public inspection in the City Clerk’s Office at City Hall, 375 Fifth Street, Hollister, Monday through Friday, 8:30 a.m. to noon, 1:00 p.m. to 4:30 p.m. (City Hall is closed between 12:00 and 1:00 p.m.)

Requests to make presentations to the City Council should be submitted to the City Clerk’s Office at least ten days before the City Council meeting. It is customary for City staff members to review such matters before the formal presentation so that the City Council may have the benefit of all available data. PowerPoint presentations must be presented to the City Clerk by noon on the day of the City Council meeting.

The public may watch the meeting via live stream at:

City of Hollister Website
https://pub-hollister.escribemeetings.com/

Community Media Access Partnership (CMAP):
http://cmaptv.com/government/

City of Hollister YouTube Channel:
https://www.youtube.com/@cityofhollistercalifornia1489

Public Participation:

The public may attend meetings.

NOTICE: The City Council will hold its public meetings in person, with a virtual option for public participation based on availability. The City of Hollister utilizes Zoom teleconferencing technology for virtual public participation; however, we make no representation or warranty of any kind, regarding the adequacy, reliability, or availability of the use of this platform in this manner. Participation by members of the public through this means is at their own risk. (Zoom teleconferencing may not be available at all meetings.)

If you wish to make a public comment remotely during the meeting, please use the zoom registration link below:
https://us02web.zoom.us/webinar/register/WN_MNOr95ZCQrWzERqd5zRuwQ

In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact the City Clerk’s Office at (831) 636-4300. Notification of 48 hours prior to the meeting will enable the City to attempt to make reasonable arrangements to ensure accessibility to this meeting [28 CFR 35.102-35.104 ADA Title II].

City of Hollister City Council Meeting

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Notice to anyone attending any public meeting: The meeting may be broadcast live on Cable Channel 17 and/or recorded or photographed. Recent City Council meetings may also be viewed at www.CMAP.com and periodically on Cable Channel 17.

To access written translation during the meeting, please click this link:

Para acceder a la traducción durante la reunión, por favor haga clic en el enlace:

https://attend.wordly.ai/join/NLJC-7137
City of Hollister City Council Meeting

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1.CALL TO ORDER

2.ROLL CALL

3.CLOSED SESSION

3.1 CONFERENCE WITH LEGAL COUNSEL- ANTICIPATED LITIGATION PURSUANT TO GOVERNMENT CODE SECTION 54956.9
Significant exposure to litigation pursuant to paragraph (2) or (3) of subdivision (d) of section 54956.9 of the Government Code (3 cases)

3.2 PUBLIC EMPLOYEE APPOINTMENT/EMPLOYMENT PURSUANT TO
GOVERNMENT CODE SECTION 54957
Title: City Manager

3.3 CONFERENCE WITH REAL PROPERTY NEGOTIATORS PURSUANT TO GOVERNMENT CODE SECTION 54956.8
Property: 190 Maple Ave., Hollister, CA 95023
Agency Negotiator: Jim Pia, Interim City Manager
Under Negotiation: Purchase Terms and Conditions

3.4 CONFERENCE WITH LEGAL COUNSEL- EXISTING LITIGATION PURSUANT TO GOVERNMENT CODE SECTION 54956.9(d)(1)
Name of Case: Cain, Robert et al vs. City of Hollister et al, San Benito County Superior Court Case CU-22-00087

4.PLEDGE OF ALLEGIANCE

5.CLOSED SESSION REPORT

6.SPECIAL ORDERS OF THE DAY

7.PUBLIC INPUT FOR ITEMS NOT ON THE AGENDA
This is the time for anyone in the audience to speak on any item not on the agenda and within the subject matter jurisdiction of the council. Speaker cards are available in the lobby, and are to be completed and given to the City Clerk before speaking. When the City Clerk calls your name, please come to the podium, state your name and city for the record, and speak to the City Council. If you are joining us by Zoom, please click on the bottom of your screen to raise your hand. If you are joining us by Zoom using a cell phone, please press *9.

Each speaker will be limited to three (3) minutes with a maximum of 30 minutes per subject.

Please note that state law prohibits the City Council from discussing or taking action on any item not on the agenda.

8.CONSENT ITEMS
All items listed under consent agenda will be enacted by one motion authorizing actions indicated for those items so designated. There will be no separate discussion of these items unless requested by a member of the City Council, a staff member, or a member of the public. There will be one public comment period for all items on the Consent Agenda.

8.1 APPROVE DECEMBER 8, 2025 SPECIAL MEETING MINUTES

8.2 APPROVE DECEMBER 12, 2025 SPECIAL MEETING MINUTES
City of Hollister City Council Meeting

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8.3 APPROVE DECEMBER 13, 2025 SPECIAL MEETING MINUTES

8.4 APPROVE DECEMBER 15, 2025 REGULAR MEETING MINUTES

8.5 WARRANT REGISTER JANUARY 05, 2026
RECOMMENDED ACTION:

Ratify and approve the Warrant Registers for the General-Special-Enterprise- Assessments funds attached.

8.6 AN ORDINANCE REPEALING CHAPTER 16.64 GROWTH MANAGEMENT

PROGRAM IN ITS ENTIRETY
RECOMMENDED ACTION:

Adopt an ordinance repealing Chapter 16.64 Growth Management Program from the Municipal Code.

8.7 RATIFICATION OF APPOINTMENT TO FILL VACANCIES ON THE BUSINESS

ADVISORY COMMISSION AND PARKS, ARTS, RECREATION, AND CULTURE

COMMISSION
RECOMMENDED ACTION:

Ratify the appointments of Peter Hernandez to fill a vacancy on the Business Advisory Commission and Francisco Rodriguez to fill a vacancy on the Parks, Arts, Recreation, and Culture Commission.

8.8 A RESOLUTION APPROVING THE REORGANIZATION OF THE HUMAN

RESOURCES DIVISION, RECLASSIFYING THE HUMAN RESOURCES

TECHNICIAN II TO HUMAN RESOURCES OFFICER, AND RECLASSIFYING THE

PUBLIC WORKS ENVIRONMENTAL PROGRAMS MANAGER TO MANAGEMENT

ANALYST
RECOMMENDED ACTION:

Adopt a resolution approving the reorganization of the Human Resources Division by transferring the Division from the Administrative Services Department to the City Manager’s Office and establishing a new classification titled Human Resources Officer and authorizing a Management Analyst position to the Public Works Department to replace an existing classification.

8.9 A RESOLUTION APPROVING A RESIDENTIAL TAX SHARING AGREEMENT WITH THE COUNTY OF SAN BENITO FOR LAFCo ANNEXATION REQUEST 2024- 549
RECOMMENDED ACTION:

Adopt a resolution authorizing the Mayor to execute a required Residential Tax Sharing Agreement with the County of San Benito to allow for an owner-initiated annexation of seven parcels included in LAFCo Annexation Request 2024-549.

8.10 A RESOLUTION RENEWING A REGULATORY PERMIT FOR EUPHORIC LIFE INC. TO OPERATE A CANNABIS MANUFACTURING FACILITY AT 807 INDUSTRIAL DRIVE (APN 056-270-012-000)
RECOMMENDED ACTION:

Adopt a resolution approving the renewal of a regulatory permit for Euphoric Life Inc. to operate a cannabis manufacturing facility located at 807 Industrial Drive for the 2026/2027 period.

8.11 A RESOLUTION RENEWING A REGULATORY PERMIT FOR EUPHORIC LIFE City of Hollister City Council Meeting

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INC. TO OPERATE A CANNABIS DISTRIBUTION FACILITY AT 807 INDUSTRIAL DRIVE (APN 056-270-012-000)
RECOMMENDED ACTION:

Adopt a resolution approving the renewal of a regulatory permit for Euphoric Life Inc. to operate a cannabis distribution facility located at 807 Industrial Drive for the 2026/2027 period.

8.12 FORMALLY RECEIVE AND ACCEPT THE FINAL DRAFT OF THE FISCAL YEAR (FY) 2021-22 ANNUAL AUDIT
RECOMMENDED ACTION:

Formally receive and accept the final draft of the FY 2021-22 annual audit, including the Annual Comprehensive Financial Report (ACFR) and Single Audit.

8.13 A RESOLUTION AUTHORIZING THE POLICE DEPARTMENT TO DISPOSE OF

EXPIRED AND OBSOLETE BALLISTIC VESTS
RECOMMENDED ACTION:

Adopt a resolution authoring the police department to dispose of the obsolete ballistic vests.

9.COUNCIL BUSINESS

9.1 A RESOLUTION APPROVING A CITY MANAGER EMPLOYMENT AGREEMENT

WITH ANA CORTEZ
RECOMMENDED ACTION:

Adopt a resolution approving the City Manager Employment Agreement with Ana Cortez.

9.2 UPDATE ON GENERAL PLAN AND HOUSING ELEMENT
RECOMMENDED ACTION:

Receive an update from staff on the General Plan and Housing Element.

9.3 A RESOLUTION DIRECTING CITY STAFF TO BRING BACK OPTIONS,

INCLUDING POLICIES AND A POSSIBLE ORDINANCE THAT CAN ADDRESS

COMMERCIAL BUILDINGS THAT ARE VACANT
RECOMMENDED ACTION:

Discuss options for addressing the effects of closed commercial buildings, and authorize staff to work to bring back options, including policies and a possible ordinance that can address commercial buildings that have been closed.

9.4 DISCUSSION OF SPECIAL EVENT AND BANNER PERMIT FEES
RECOMMENDED ACTION:

Discuss and provide direction regarding the City’s current and proposed fees for special events and banners. Staff recommends an update to the City’s fee schedule to include reimbursement of actual costs related to special event and banner permit fees with a 50% discount for non-profit organizations and governmental agencies.

Fees are recommended to be implemented on a phased approach with a 10% increase per year until the fee reaches the City’s actual costs.

10.INFORMATIONAL REPORTS
Reports on compensable meetings attended. Brief reports or announcements concerning activities of members of the City Council and staff; opportunity to refer public or Council City of Hollister City Council Meeting

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questions to staff for information; request staff to report to the Council on a matter at a future meeting; or direct staff to place a matter on a future agenda. Items in this category are for discussion and direction to staff only. No final policy action will be taken by the Council.

10.1 COMMITTEE ASSIGNMENTS
Receive oral reports from members regarding the activities of various Ad Hoc and Standing City Council Committees.

10.2 COUNCIL REPORTS
Receive informational reports from the City Council

1.CITY COUNCIL REQUESTS FOR FUTURE AGENDA ITEMS
Councilmember Morales - City Council Meeting Date Change

10.3 CITY MANAGER REPORT

1.UPDATED CITY COUNCIL PROJECTS

11.ADJOURNMENT

12.VERIFICATION OF AGENDA POSTING
The agenda for the City Council of the City of Hollister regular meeting of January 5, 2026 was posted on the bulletin board at City Hall on January 2, 2026 per Government Code Section 54954.2.

City of Hollister City Council Meeting

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PUBLIC PARTICIPATION NOTICE
The public may attend meetings in person or watch meetings via live stream at:

City of Hollister Website:
https://hollister.ca.gov/government/agendas___minutes.php

Community Media Access Partnership (CMAP):
http://cmaptv.com/government/

City of Hollister YouTube Channel:
https://www.youtube.com/@cityofhollistercalifornia1489

If you wish to make a public comment remotely during the meeting, please use the Zoom registration link below:

https://us02web.zoom.us/webinar/register/WN_MNOr95ZCQrWzERqd5zRuwQ

In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact the City Clerk’s Office at (831) 636-4300. Notification 48 hours prior to the meeting will enable the City to attempt to make reasonable arrangements to ensure accessibility to this meeting [28 CFR 35.102-35.104 ADA Title II].

Notice to anyone attending any public meeting: The meeting may be broadcast live on Cable Channel 17 and/or videotaped or photographed. Recent City Council meetings may also be viewed at www.CMAP.com and periodically on Cable Channel 17.

To access written translation during the meeting, please scan the QR Code or click this link | Para acceder a la traducción durante la reunión, por favor escanee el código QR o haga clic en el enlace:
https://attend.wordly.ai/join/NLJC-7137
Choose Language and Click Attend | Seleccione su lenguaje y haga clic en asistir

Use a headset on your phone for audio or read the transcript on your device. | Use sus auriculares para escuchar el audio o leer la transcripción en el dispositivo.

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1 City Council of the City of Hollister
Minutes of the Special Meeting

December 8, 2025, 4:00 p.m.

City Council Chamber, City Hall
375 Fifth Street, Hollister, CA 95023

Members Present: Roxanne Stephens, Mayor
Rudy Picha, District 1
Rolan Resendiz, District 2
Dolores Morales, District 3
Priscilla de Anda, District 4

_____________________________________________________________________

1. CALL TO ORDER
Mayor Stephens called the special meeting of the City Council of the City of Hollister to order at 4:04 p.m.

2. PLEDGE OF ALLEGIANCE
Councilmember Morales led the Pledge of Allegiance.

3. ROLL CALL

4. CLOSED SESSION
Closed Session will be held by the City Council of the City of Hollister to discuss the following matters:

Interim City Manager Jim Pia read the closed session item title.

Mayor Stephens opened public comment at 4:05 p.m.

There were no speakers for the closed session agenda items.

Mayor Stephens closed public comment at 4:05 p.m.

Mayor Stephens convened the meeting into closed session at 4:05 p.m.

4.1 PUBLIC EMPLOYEE APPOINTMENT/EMPLOYMENT PURSUANT TO
GOVERNMENT CODE SECTION 54957
Title: City Manager

5. ADJOURNMENT
Mayor Stephens adjourned the meeting at 7:23 p.m.

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2 Jennifer Woodworth, City Clerk

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1 City Council of the City of Hollister
Minutes of the Special Meeting

December 12, 2025, 4:00 p.m.

City Council Chamber, City Hall
375 Fifth Street, Hollister, CA 95023

Members Present: Roxanne Stephens, Mayor
Rudy Picha, District 1
Rolan Resendiz, District 2
Dolores Morales, District 3
Priscilla de Anda, District 4

_____________________________________________________________________

1. CALL TO ORDER
Mayor Stephens called the special meeting of the City Council of the City of Hollister to order at 4:01 p.m.

2. PLEDGE OF ALLEGIANCE
Councilmember Resendiz led the Pledge of Allegiance.

3. ROLL CALL

4. CLOSED SESSION
City Attorney Jennifer Thompson read the closed session item titles.

Mayor Stephens opened public comment at 4:03 p.m.

There were no speakers for the closed session agenda items.

Mayor Stephens closed public comment at 4:03 p.m.

Mayor Stephens convened the meeting into closed session at 4:03 p.m.

4.1 PUBLIC EMPLOYEE APPOINTMENT/EMPLOYMENT PURSUANT TO
GOVERNMENT CODE SECTION 54957
Title: City Manager

5. ADJOURNMENT
Mayor Stephens adjourned the meeting at 7:53 p.m.

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2 Jennifer Woodworth, City Clerk

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1 City Council of the City of Hollister
Minutes of the Special Meeting

December 13, 2025, 9:00 a.m.

City Council Chamber, City Hall
375 Fifth Street, Hollister, CA 95023

Members Present: Roxanne Stephens, Mayor
Rudy Picha, District 1
Rolan Resendiz, District 2
Dolores Morales, District 3
Priscilla de Anda, District 4

_____________________________________________________________________

1. CALL TO ORDER
Mayor Stephens called the special meeting of the City Council of the City of Hollister to order at 9:02 a.m.

2. PLEDGE OF ALLEGIANCE
Councilmember Morales led the Pledge of Allegiance.

3. ROLL CALL

4. CLOSED SESSION
Closed Session will be held by the City Council of the City of Hollister to discuss the following matters:

Councilmember de Anda arrived at 9:03 a.m.

City Attorney Jennifer Thompson read the closed session it em title.

Mayor Stephens opened public comment at 9:03 a.m.

There were no speakers for the closed session agenda items.

Mayor Stephens closed public comment at 9:03 a.m.

4.1 PUBLIC EMPLOYEE APPOINTMENT/EMPLOYMENT PURSUANT TO
GOVERNMENT CODE SECTION 54957
Title: City Manager

5. ADJOURNMENT
Mayor Stephens adjourned the meeting at 12:07 p.m.

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2 Jennifer Woodworth, City Clerk

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1 City Council of the City of Hollister
Minutes of the Regular Meeting

December 15, 2025, 5:30 p.m.

City Council Chamber, City Hall
375 Fifth Street, Hollister, CA 95023

Members Present: Roxanne Stephens, Mayor
Rudy Picha, District 1
Rolan Resendiz, District 2
Dolores Morales, District 3
Priscilla de Anda, District 4

_____________________________________________________________________

1. CALL TO ORDER
Mayor Stephens called the regular meeting of the City Council of the City of Hollister to order at 5:30 p.m.

2. ROLL CALL

3. CLOSED SESSION
City Attorney Jennifer Thompson read the closed session item titles.

Mayor Stephens opened public comment at 5:31 p.m.

There were no speakers for the closed session agenda items.

Mayor Stephens closed public comment at 5:31 p.m.

Mayor Stephens convened the meeting into closed session at 5:31 p.m.

3.1 PUBLIC EMPLOYEE APPOINTMENT/EMPLOYMENT PURSUANT TO
GOVERNMENT CODE SECTION 54957
Title: City Manager

3.2 CONFERENCE WITH LEGAL COUNSEL – ANTICIPATED LITIGATION Significant Exposure to Litigation Pursuant to paragraph (2) of subdivision (d) of section 54956.9 of the Government Code.
1 case – Notice of Violation from the Department of Housing and Community Development

3.3 CONFERENCE WITH REAL PROPERTY NEGOTIATORS PURSUANT
TO GOVERNMENT CODE SECTION 54956.8

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2 Property: 190 Maple Ave., Hollister, CA 95023
Agency Negotiator: Jim Pia, Interim City Manager
Under Negotiation: Purchase Terms and Conditions
The closed session ended at 6:26 p.m.

Mayor Stephens convened the regular meeting at 6:30 p.m.

4. PLEDGE OF ALLEGIANCE
Councilmember Resendiz led the Pledge of Allegiance.

5. CLOSED SESSION REPORT
City Attorney Jennifer Thompson stated no reportable action was taken in closed session.

6. PUBLIC INPUT FOR ITEMS NOT ON THE AGENDA
No speakers present.

7. CONSENT ITEMS
Councilmember Morales pulled Item 7.1 from the consent calendar.

Mayor Stephens opened public comment at 6:32 p.m.

There were no speakers for the consent agenda items.

Mayor Stephens closed public comment at 6:32 p.m.

Moved by: Council Member Resendiz
Seconded by: Council Member Picha
The consent calendar items are approved as presented, except for Item 7.1.

Ayes (5): Mayor Stephens, Council Member Picha, Council Member Resendiz, Council Member Morales, and Council Member de Anda
Carried (5 to 0)

7.2 WARRANT REGISTER DECEMBER 15, 2025
Moved by: Council Member Resendiz
Seconded by: Council Member Picha
Ratify and approve the Warrant Registers for the General-Special- Enterprise-Assessments funds attached.

Carried

7.3 AN ORDINANCE AUTHORIZING AN AMENDMENT TO THE
CONTRACT WITH THE CALIFORNIA PUBLIC EMPLOYEES’

RETIREMENT SYSTEM

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3 Moved by: Council Member Resendiz
Seconded by: Council Member Picha
Adopt an ordinance authorizing an amendment to the contract between the City of Hollister and the Board of Administration of the Public Employees’ Retirement System.

Carried

7.4 A RESOLUTION APPROVING THE CITY OF HOLLISTER

PARTICIPATION IN THE AMERICAN AIR ADVANTAGE CONSORTIUM
FOR A SUBMISSION TO THE FAA eVTOL INTEGRATION PILOT

PROGRAM
Moved by: Council Member Resendiz
Seconded by: Council Member Picha
Adopt a resolution:

1. Approving the City of Hollister participation in the American Air Advantage (A3) Consortium and in the December 19, 2025, Federal Aviation Administration (FAA) eVTOL Integration Pilot Program (eIPP) submission; and

2. Authorizing the Airport Director to execute a non-binding Letter of Commitment (LOC) on behalf of the Hollister Municipal Airport; and

3. Authorizing the Interim City Manager to execute a non-binding Memorandum of Understanding (MOU) on behalf of the City of Hollister; and

4. Directing staff to continue engagement with the Monterey Bay Tech Hub and the (A3) consortium and return to Council with periodic updates as the FAA evaluation process advances.

Carried

7.5 A RESOLUTION APPROVING COMMUNITY FACILITIES DISTRICT NO. 2 (POLICE AND FIRE SERVICES) FISCAL YEAR 2024/25 ANNUAL

ACCOUNTABILITY REPORT
Moved by: Council Member Resendiz
Seconded by: Council Member Picha
Adopt a resolution approving the CFD 2 Accountability Report for Fiscal Year 2024/25.

Carried

7.6 A RESOLUTION APPROVING COMMUNITY FACILITIES DISTRICT NO. 4 (PUBLIC FACILITIES SERVICES) FISCAL YEAR 2024/25 ANNUAL

ACCOUNTABILITY REPORT

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4 Moved by: Council Member Resendiz
Seconded by: Council Member Picha
Adopt a resolution approving the CFD 4 Accountability Report for Fiscal Year 2024/25.

Carried

7.7 A RESOLUTION APPROVING COMMUNITY FACILITIES DISTRICT NO. 5 (POLICE AND FIRE SERVICES) FISCAL YEAR 2024/25 ANNUAL

ACCOUNTABILITY REPORT
Moved by: Council Member Resendiz
Seconded by: Council Member Picha
Adopt a resolution approving the CFD 5 Accountability Report for Fiscal Year 2024/25.

Carried

7.8 A RESOLUTION ALLOCATING FUNDS FROM FIRE IMPACT FEES TO

MAKE FULL PAYMENT FOR INCOMING TILLER TRUCK
Moved by: Council Member Resendiz
Seconded by: Council Member Picha
Adopt a resolution authorizing a budget adjustment to appropriate the full contract cost for the Rosenbauer Tiller Truck from Fund 713 (CFD #5), consistent with Council direction in Resolution 2024 -76.

Carried

7.9 A RESOLUTION ACKNOWLEDGING HOLLISTER FIRE DEPARTMENT

PERFORMED ANNUAL INSPECTIONS PURSUANT TO SECTION
13146.4 OF THE CALIFORNIA HE ALTH AND SAFETY CODE AND

ACCEPTING THE COMPLIANCE REPORTING FOR STATE
MANDATED LOCAL PROGRAMS FOR SENATE BILL NO. 1205
Moved by: Council Member Resendiz
Seconded by: Council Member Picha
Adopt a resolution accepting the compliance reporting for state -mandated local programs for Senate Bill No. 1205 pursuant to Section 13146.4 of the Health and Safety Code, relating to fire protection regarding certain occupancies annual inspections.

Carried

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5 7.10 A RESOLUTION ACCEPTING ASSET FORFEITURE DISTRIBUTION

FROM UNIFIED NARCOTICS ENFORCEMENT TEAM (UNET) OF
$34,934.84 AND BUDGET ADJUSTMENT REQUEST FOR THE

PURCHASE OF A MOBILE SURVEILLANCE SYSTEM FOR THE

POLICE DEPARTMENT
Moved by: Council Member Resendiz
Seconded by: Council Member Picha
Adopt a resolution authorizing the acceptance of $34,934.84 from asset forfeiture cases from prior UNET investigations for the purchase in this fiscal year (25-26) of a mobile surveillance system for the police department.

Carried

7.1 APPROVE THE DECEMBER 1, 2025 SPECIAL/REGULAR MEETING

MINUTES
Moved by: Council Member Morales
Seconded by: Council Member Resendiz
Ayes (5): Mayor Stephens, Council Member Picha, Council Member Resendiz, Council Member Morales, and Council Member de Anda Carried (5 to 0)

8. PUBLIC HEARINGS

8.1 AN ORDINANCE REPEALING CHAPTER 16.64 GROWTH

MANAGEMENT PROGRAM IN ITS ENTIRETY
Planning Manager Eva Kelly provided the staff presentation.

Mayor Stephens opened the public hearing at 6:36 p.m.

There were no speakers for this item.

Mayor Stephens closed the public hearing at 6:36 p.m.

Moved by: Council Member Morales
Seconded by: Council Member Resendiz
Introduce an Ordinance repealing Chapter 16.64 Growth Management Program from the Municipal Code and schedule a second reading and adoption for the January 5, 2026, City Council meeting.

Ayes (5): Mayor Stephens, Council Member Picha, Council Member Resendiz, Council Member Morales, and Council Member de Anda Carried (5 to 0)

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6 9. COUNCIL BUSINESS

9.1 A RESOLUTION APPROVING AN AGREEMENT WITH ROADSHOWS
INC. FOR OPERATIONAL MANAGEMENT SERVICES FOR THE 2026

HOLLISTER INDEPENDENCE RALLY
Parks and Recreation Director Charles Wall provided the staff report.

Councilmember Resendiz suggested entering into a multi-year agreement with Roadshows, Inc., such as a three to five year agreement.

Interim City Manager Jim Pia suggested a future agreement with Roadshows, Inc. could be multi-year, but recommended approval of the proposed agreement for the 2026 Independence Rally.

Mayor Stephens opened public comment at 6:55 p.m.

There were no speakers for this item.

Mayor Stephens closed public comment at 6:55 p.m.

Moved by: Council Member Resendiz
Seconded by: Council Member de Anda
Adopt a resolution approving an agreement with Roadshows Inc. for operational management services for the 2026 Hollister Independence Rally and authorize the City Manager to finalize and execute the agreement.

Ayes (4): Mayor Stephens, Council Member Picha, Council Member Resendiz, and Council Member de Anda
Noes (1): Council Member Morales
Carried (4 to 1)

9.2 A RESOLUTION APPROVING AN AGREEMENT WITH TJKM FOR THE

DEVELOPMENT OF A SAFETY ACTION PLAN AND GRANT
ADMINISTRATION FOR THE SAFE STREETS FOR ALL (SS4A)
GRANT
This item was continued to future meeting.

9.3 A RESOLUTION APPROVING THE CITY COUNCIL MEETING
CALENDAR FOR 2026
Interim City Manager Jim Pia provided the staff report.

Councilmember Morales suggested changing the Council regular meetings to the second and fourth Mondays by ordinance.

Mayor Stephens opened public comment at 7:05 p.m.

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7 There were no speakers for this item.

Mayor Stephens closed public comment at 7:05 p.m.

Moved by: Council Member Resendiz
Seconded by: Council Member Picha
Adopt a resolution approving the 2026 City Council meeting calendar to assist with the scheduling of City Council meetings.

Ayes (5): Mayor Stephens, Council Member Picha, Council Member Resendiz, Council Member Morales, and Council Member de Anda Carried (5 to 0)

9.4 A RESOLUTION AUTHORIZING CITY STAFF TO WORK WITH THE

PLANNING COMMISSION TO REVISIT THE PROCESS AND BYLAWS

OF THE PLANNING COMMISSION AND BRING BACK PROPOSED

CHANGES FOR COUNCIL ACTION
Interim City Manager Jim Pia provided the staff report.

Councilmember Morales suggested postponing the item until later in 2026, such as late spring or early summer.

Mayor Stephens opened public comment at 7:32 p.m.

Peter Hernandez, member of the Hollister Planning Commission, supported changes to the Planning Commission's bylaws to give it more authority.

Mayor Stephens closed public comment at 7:35 p.m.

By consensus, the City Council directed staff to return with a mendments to the Planning Commission Bylaws to allow the Planning Commission Chair to have input on the Planning Commission agenda and to have the authority to place items on the the Planning Commission agenda for City Council consideration. Additionally staff is directed to provide the Planning Commission with updates on proposed development projects.

10. INFORMATIONAL REPORTS

10.1 COMMITTEE ASSIGNMENTS
Councilmember Picha reported the Fire Protection Advisory Committee met on December 11, 2025 and provided direction regarding meeting time and received information related to the fire district feasibility study and a proposed cost recovery ordinance.

Mayor Stephens reported the San Benito County Tourism Advisory Committee met and proclaimed San Benito County "The Home of Pinnacles National Park" and discussed possible funding options for public

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8 art projects. Mayor Stephens reported the San Benito Council of Governments met and discussed the draft Regional Transportation Plan, which will also be discussed on January 15, 2026 and received a year in review report. Mayor Stephens reported the San Benito County Local Area Formation Committee met.

10.2 COUNCIL REPORTS

1. CITY COUNCIL REQUESTS FOR FUTURE AGENDA ITEMS

10.3 CITY MANAGER REPORT
Interim City Manager Jim Pia thanked the Council, staff, and the City Attorney for their work in 2025.

1. UPDATED CITY COUNCIL PROJECTS

11. ADJOURNMENT
Mayor Stephens adjourned the meeting at 7:53 p.m.

Jennifer Woodworth, City Clerk

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STAFF REPORT

HOLLISTER CITY COUNCIL
MEETING DATE: January 5, 2026
REPORT # Will auto populate once assigned

AGENDA ITEM: WARRANT REGISTER JANUARY 05, 2026

DEPARTMENT: Adminstrative Services
DEPARTMENT HEAD: Grizelle Gonzalez, Management Analyst
STAFF CONTACT: Maricela Romero, Accounting Tech II

RECOMMENDED ACTION: Ratify and approve the Warrant Registers for the General-Special-Enterprise-Assessments funds attached.

FISCAL IMPACT: 25/26

ATTACHMENTS:

1. Expense Approval Register AP 11-20-25 (2)

2. Expense Approval Register DP 11-20-25

3. Expense Approval Register DP 11-20-25 (2)

4. Expense Approval Register PYR 12-03-25

5. Expense Approval Register DP 12-03-25

6. Expense Approval Register AP 12-05-25

7. Expense Approval Register AP 12-05-25 (2)

8. Expense Approval Register AP 12-10-25

9. Expense Approval Register AP 12-11-25

10. Expense Approval Register DP 12-17-25

11. Expense Approval Register DP 12-17-25 (2)

12. Expense Approval Register AP 12-17-25

13. Expense Approval Register PYR 12-17-25

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STAFF REPORT

HOLLISTER CITY COUNCIL
MEETING DATE: January 5, 2026
REPORT # Community Development-2026-01

AGENDA ITEM: AN ORDINANCE REPEALING CHAPTER 16.64 GROWTH

MANAGEMENT PROGRAM IN ITS ENTIRETY

DEPARTMENT: Community Development
DEPARTMENT HEAD: Rod Powell, Assistant City Manager
STAFF CONTACT: Eva Kelly, Planning Manager

RECOMMENDED ACTION: : Adopt an Ordinance repealing Chapter 16.64 Growth Management Program from the Municipal Code.

DISCUSSION: On December 15, 2025, the City Council introduced an ordinance repealing Chapter 16.64 Growth Management Program from the Municipal Code by the following vote: Ayes: Councilmembers Picha, Morales, Resendiz, de Anda, and Mayor Stephens; Noes: None; Absent: None; Abstained: None.

A second reading and adoption of the ordinance is required.

FISCAL IMPACT: None. However, denial of the repeal may have indirect fiscal consequences related to the necessary certification of the City’s 6th Cycle Housing Element, as the repeal of Ordinance 1183 has been identified as a requirement by HCD for inclusion in the City’s Housing Element as part of achieving certified compliance.

PREVIOUS COUNCIL OR COMMISSION ACTION:

October 21, 2019 – Adoption of Ordinance 1183.

On December 15, 2025, the City Council introduced the ordinance.

CEQA: Exempt pursuant to Section 15061(b)(3) as there is no potential for the repeal of this ordinance to have any significant effect on the environment.

ATTACHMENTS:

1. Ordinance

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Page 1 of 2 ends

ORDINANCE NO. 1270

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
HOLLISTER REPEALING CHAPTER 16.64 GROWTH MANAGEMENT

PROGRAM IN ITS ENTIRETY

WHEREAS, on October 21, 2019, the City of Hollister adopted Ordinance 1183, which repealed and replaced Chapter 16.64, Growth Management Program, of the City of Hollister Municipal Code; and

WHEREAS, in response to both a May 12, 2020, and July 29, 2020 notification from the California Department of Housing and Community Development (HCD), it was determined that enforcement of Chapter 16.64 was inconsistent with the Housing Crisis Act of 2019 (SB 330, 2019); and

WHEREAS, following the determination that the Ordinance was inconsistent with the Housing Crisis Act of 2019, the City has not enforced Chapter 16.64 for any housing development projects since its adoption, as directed by HCD; and

WHEREAS, the repeal of Chapter 16.64 will bring the City’s Municipal Code into formal compliance with state law; is included as Policy Action H1.2 of the City’s Draft 6 th Cycle Housing Element and will be required to achieve housing element certification; and will have no effect on current practice due to the ordinance never having been enforced; and

WHEREAS, the repeal of Chapter 16.64 of the Hollister Municipal Code is exempt from the California Environmental Quality Act pursuant to Section 15061(b)(3), as there is no potential for this action to cause a significant effect on the environment.

NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF HOLLISTER DOES ORDAIN AS FOLLOWS:

SECTION 1. Chapter 16.64, Growth Management Program, of Title 16, Subdivisions, as adopted by Ordinance 1183 is hereby repealed in its entirety from the Municipal Code.

SECTION 2. SEVERABILITY. If any part of this Ordinance is held invalid for any reason by a court of competent jurisdiction, such decision shall not affect the validity of the remaining portion of this Ordinance, and the City Council hereby declares that it would have passed the remainder of the Ordinance if such invalid portion thereof had been deleted.

SECTION 3. EFFECTIVE DATE. This ordinance shall take effect and be in force thirty (30) days from and after its final passage.

SECTION 4. PUBLICATION. Within fifteen (15) days after passage, the City Clerk shall cause this ordinance to be published in a newspaper of general circulation.

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Ordinance No. 1270

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INTRODUCED at a regular City Council meeting on December 15, 2025, and ADOPTED as an ordinance of the City of Hollister at a regular City Council meeting January 5, 2025 by the following vote:

AYES:

NOES:

ABSTAINED:

ABSENT:

________________________________
Roxanne Stephens, Mayor

ATTEST: APPROVED AS TO FORM:

Lozano Smith Attorneys at Law

______________________________ _______________________________ Jennifer Woodworth, MMC, City Clerk Jennifer Thompson, City Attorney

I, JENNIFER WOODWORTH, MMC, City Clerk of the City of Hollister, do hereby certify that the attached Ordinance No. 1270 is an original ordinance, or true and correct copy of a City ordinance, duly adopted by the Council of the City of Hollister at a regular meeting of said Council held on January 5, 2025, at which meeting a quorum was present.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of Hollister on January 5, 2025.

Jennifer Woodworth, MMC
City Clerk of the City of Hollister

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STAFF REPORT

HOLLISTER CITY COUNCIL
MEETING DATE: January 5, 2026
REPORT # City Clerk-2026-01

AGENDA ITEM: RATIFICATION OF APPOINTMENT TO FILL VACANCIES ON THE

BUSINESS ADVISORY COMMISSION AND PARKS, ARTS, RECREATION, AND

CULTURE COMMISSION

DEPARTMENT: City Clerk
DEPARTMENT HEAD: Jennifer Woodworth, City Clerk
STAFF CONTACT: Angie Gonzalez, Deputy City Clerk

RECOMMENDED ACTION: Ratify the appointments of Peter Hernandez to fill a vacancy on the Business Advisory Commission and Francisco Rodriguez to fill a vacancy on the Parks, Arts, Recreation, and Culture Commission.

DISCUSSION: The Business Advisory Commission (BAC) was established by Resolution 2025-115 on August 18, 2025. The commission currently has five vacancies.

Appointments to City commissions require ratification by the City Council.

The City Clerk has received one application for the Business Advisory Commission. The Mayor has recommended the appointment of Peter Hernandez to fill a vacant seat.

The Parks, Arts, Recreation, and Culture Commission (PARC) was established by Resolution 2025-135 on October 6, 2025. The commission currently has six vacancies, including two youth members. Appointments to City commissions require ratification by the City Council.

The City Clerk has received one application for the Parks, Arts, Recreation, and Culture Commission. Councilmember Morales has recommended the appointment of Francisco Rodriguez to fill a vacant seat.

The recruitment will remain open for vacancies on all other Hollister advisory bodies.

FISCAL IMPACT: N/A

PREVIOUS COUNCIL OR COMMISSION ACTION: N/A

CEQA: Not a project under CEQA.

ATTACHMENTS:

1. Redacted Commissioner Application for Peter Hernandez

2. Redacted Commissioner Application for Francisco Rodriguez

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STAFF REPORT

HOLLISTER CITY COUNCIL
MEETING DATE: January 5, 2026
REPORT # City Manager-2026-03

AGENDA ITEM: A RESOLUTION APPROVING THE REORGANIZATION OF THE

HUMAN RESOURCES DIVISION, RECLASSIFYING THE HUMAN RESOURCES

TECHNICIAN II TO HUMAN RESOURCES OFFICER, AND RECLASSIFYING THE

PUBLIC WORKS ENVIRONMENTAL PROGRAMS MANAGER TO MANAGEMENT

ANALYST

DEPARTMENT: City Manager
DEPARTMENT HEAD: Jim Pia, Interim City Manager
STAFF CONTACT: Jim Pia, Interim City Manager

RECOMMENDED ACTION: Adopt a resolution approving the reorganization of the Human Resources Division by transferring the Division from the Administrative Services Department to the City Manager’s Office and establishing a new classification titled Human Resources Officer and authorizing a Management Analyst position to the Public Works Department to replace an existing classification.

DISCUSSION: City staff regularly monitor the organization’s operational needs, including evaluating how changes in demands for service and/or changes in job classifications may impact on staff’s job duties and associated job descriptions. To that end, staff have identified gaps within the City’s Human Resources and Public Works operations, including the need to reclassify the Human Resources Technician II to Human Resources Officer and the Environmental Programs Manager to Management Analyst.

In making these determinations in this process, it is noted that Council created a Finance Director position as the chosen alternative to the Administrative Services Director on November 3, 2025. This position is currently in the recruitment process.

Human Resources plays a critical role in supporting the City’s operations, compliance obligations, workforce stability and organizational culture. Placing the Human Resources Division under the City Manager’s Office aligns with best practices in municipal governance and reinforces the division’s role as a strategic partner to executive leadership in all City departments.

Under general administrative direction, the Human Resources Officer will plan, organize and direct all phases of the City’s Human Resources Division including labor relations, recruitment and selection, classification and salary administration, workers compensation, benefits and retirement plans, training and employee development and Equal Employment Opportunity Commission. The Human Resources Officer classification may exercise direct supervision over professional, technical, and clerical staff, and will report directly to the Assistant City Manager.

The Public Works Department has experienced a significant increase in administrative, regulatory, and compliance-related responsibilities in recent years. These responsibilities extend beyond traditional operational functions and require specialized

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expertise in contract administration, regulatory compliance, reporting, and interdepartmental coordination. Currently, the department relies on a single Management Analyst to support a broad range of administrative and analytical functions. As the scope and complexity of Public Works operations continue to expand, the existing capacity is insufficient to ensure timely, consistent, and compliant execution of high-level administrative responsibilities.

In making the determination for a need for a second Management Analyst classification in the Public Works Department, staff have found that comparable agencies have increasingly added or expanded upper-level management capacity within Public Works departments to address growing administrative and compliance demands. Reclassifying the Environmental Programs Manager to the Management Analyst position aligns the City’s organizational structure with best practices and supports sustainable operations as the department continues to manage complex programs and funding sources.

The Management Analyst classification is part of the Confidential Employee group with a salary range of C-72 as set in the City’s current Salary Schedule.

FISCAL IMPACT: There will be no fiscal impact associated with the transfer of the Human Resources Division to the City Manager’s Office. Further, the reclassification of these two positions will be cost neutral to the Departments for the FY 2025-2026 budget year.

CEQA: N/A

ATTACHMENTS:

1. Resolution

2. City of Hollister Salary Schedule for Fiscal Year 2025-2026

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Page 1 of 2 ends

RESOLUTION NO. 2026-XX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HOLLISTER

APPROVING THE REORGANIZATION OF THE HUMAN RESOURCES DIVISION BY

TRANSFERING THE DIVISION FROM ADMINISTRATIVE SERVICES TO THE CITY MANAGER’S OFFICE, RECLASSIFYING THE HUMAN RESOURCES TECHNICIAN II

TO HUMAN RESOURCES OFFICER, AND WITHIN THE PUBLIC WORKS

DEPARTMENT, RECLASSIFYING THE ENVIRONMENTAL PROGRAMS MANAGER

TO MANAGEMENT ANALYST

WHEREAS, the Finance Director position was created on November 3, 2025, to oversee the Finance functions of the City; and

WHEREAS, it is proposed that the Human Resources Division transfer from the Administrative Services Department to the City Manager’s Office; and

WHEREAS, the Human Resources Technician II and the Environmental Programs Manager positions have been reviewed and need reclassification to be included on the attached City of Hollister salary schedule.

NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Hollister as follows:

The City Council hereby approves the transfer of the Human Resources Division from Administrative Services to the City Manager’s Office and further authorizes the reclassifications of the Human Resources Technician II to Human Resources Officer and the Environmental Programs Manager to Management Analyst. The Human Resources Officer Classification is now included on the attached salary schedule and said salary schedule is adopted by the Hollister City Council.

PASSED AND ADOPTED, by the City Council of the City of Hollister at a regular meeting held on January 5, 2026, by the following vote:

AYES:

NOES:

ABSTAINED:

ABSENT:

Roxanne Stephens, Mayor

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Resolution No. 2025-XX

ATTEST: APPROVED AS TO FORM:

Lozano Smith Attorneys at Law

____
Jennifer Woodworth, MMC, City Clerk Jennifer P. Thompson, City Attorney

I, Jennifer Woodworth, MMC, City Clerk of the City of Hollister, do hereby certify that the attached Resolution No. 2026-XX is an original resolution, or true and correct copy of a City resolution, duly adopted by the Council of the City of Hollister at a regular meeting held on January 5, 2026 at which meeting a quorum was present.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of Hollister on January 5, 2026.

Jennifer Woodworth, MMC
City Clerk of the City of Hollister

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As of 1/5/26

BARGAINING BI-WEEKLY BI-WEEKLY BI-WEEKLY BI-WEEKLY BI-WEEKLY UNIT RANGE POSITION STEP 1 STEP 2 STEP 3 STEP 4 STEP 5
SEIU
E11 ACCOUNTING ASSISTANT 2,071.27 2,174.83 2,283.58 2,397.75 2,517.64 ASSISTANT EQUIPMENT MECHANIC 2,071.27 2,174.83 2,283.58 2,397.75 2,517.64 SUPPORT SERVICES ASSISTANT I 2,071.27 2,174.83 2,283.58 2,397.75 2,517.64 E19 ACCOUNTING TECHNICIAN I 2,235.33 2,347.10 2,464.45 2,587.67 2,717.06 E20 JR. WATER MAINTENANCE OPERATOR 2,255.84 2,368.63 2,487.06 2,611.42 2,741.99 E21 MAINTENANCE WORKER I 2,278.39 2,392.31 2,511.92 2,637.52 2,769.40 FACILITIES ASSISTANT - VETERAN'S BUILDING 2,278.39 2,392.31 2,511.92 2,637.52 2,769.40 E25 SUPPORT SERVICES ASSISTANT II 2,368.62 2,487.05 2,611.40 2,741.97 2,879.07 E28 RECREATION COORDINATOR 2,436.30 2,558.11 2,686.02 2,820.32 2,961.33 E29 ACCOUNTING TECHNICIAN II 2,458.85 2,581.80 2,710.89 2,846.43 2,988.75 E31 SENIOR SUPPORT SERVICES ASSISTANT 2,506.22 2,631.53 2,763.11 2,901.26 3,046.33 E32 MAINTENANCE WORKER II 2,531.04 2,657.59 2,790.47 2,929.99 3,076.49 E35 TREE TRIMMER 2,605.48 2,735.75 2,872.54 3,016.17 3,166.97 DEVELOPMENT SERVICES TECHNICIAN 2,605.48 2,735.75 2,872.54 3,016.17 3,166.97 E36 WASTE WATER TREATMENT PLANT OPERATOR 2,630.29 2,761.81 2,899.90 3,044.89 3,197.14 E37 AIRPORT MAINTENANCE & OPERATIONS SPECIALIST 2,655.11 2,787.86 2,927.25 3,073.62 3,227.30 EQUIPMENT MECHANIC 2,655.11 2,787.86 2,927.25 3,073.62 3,227.30 FACILITY COORDINATOR - VETERAN'S BUILDING 2,655.11 2,787.86 2,927.25 3,073.62 3,227.30 STREET SWEEPER OPERATOR 2,655.11 2,787.86 2,927.25 3,073.62 3,227.30 E39 SENIOR ACCOUNTING TECHNICIAN 2,704.73 2,839.97 2,981.97 3,131.07 3,287.62 WATER MAINTENANCE OPERATOR I 2,704.73 2,839.97 2,981.97 3,131.07 3,287.62 E40 WASTE WATER TREATMENT PLANT OPERATOR II 2,729.55 2,866.02 3,009.32 3,159.79 3,317.78 E41 ADMINISTRATIVE ASSISTANT 2,756.84 2,894.68 3,039.42 3,191.39 3,350.96 E42 SENIOR MAINTENANCE WORKER 2,784.41 2,923.63 3,069.81 3,223.30 3,384.47 E44 ENGINEERING TECHNICIAN 2,838.73 2,980.66 3,129.70 3,286.18 3,450.49 E46 CODE ENFORCEMENT OFFICER 2,893.31 3,037.98 3,189.88 3,349.37 3,516.84 E48 WATER MAINTENANCE OPERATOR II 2,951.47 3,099.04 3,254.00 3,416.69 3,587.53 E55 ASSISTANT PLANNER 3,152.63 3,310.26 3,475.77 3,649.56 3,832.04 HOUSING PROGRAMS COORDINATOR 3,152.63 3,310.26 3,475.77 3,649.56 3,832.04 SENIOR WATER MAINTENANCE OPERATOR 3,152.63 3,310.26 3,475.77 3,649.56 3,832.04 E59 UTILITY TECHNICIAN 3,272.73 3,436.37 3,608.18 3,788.59 3,978.02 PUBLIC WORKS INSPECTOR 3,272.73 3,436.37 3,608.18 3,788.59 3,978.02 E60 JUNIOR ENGINEER 3,302.75 3,467.89 3,641.29 3,823.35 4,014.52 E61 BUILDING INSPECTOR 3,335.78 3,502.57 3,677.70 3,861.58 4,054.66 E69 ASSOCIATE PLANNER 3,600.00 3,780.00 3,969.00 4,167.45 4,375.82 SENIOR BUILDING INSPECTOR 3,600.00 3,780.00 3,969.00 4,167.45 4,375.82 E74 ASSISTANT ENGINEER 3,778.35 3,967.26 4,165.63 4,373.91 4,592.60 E79 ASSISTANT CIVIL ENGINEER 3,960.00 4,158.00 4,365.90 4,584.19 4,813.40 UTILITY ENGINEER 3,960.00 4,158.00 4,365.90 4,584.19 4,813.40 E84 UTILITY ENGINEER - CIVIL 4,156.19 4,363.99 4,582.19 4,811.30 5,051.87

BARGAINING BI-WEEKLY BI-WEEKLY BI-WEEKLY BI-WEEKLY BI-WEEKLY UNIT RANGE POSITION STEP 1 STEP 2 STEP 3 STEP 4 STEP 5

EXECUTIVE

MANAGEMENT
X19 AIRPORT MANAGER 3,792.25 3,981.87 4,180.96 4,390.01 4,609.51 X39 PROGRAM MANAGER 4,550.70 4,778.24 5,017.15 5,268.01 5,531.41 X44 HUMAN RESOURCES MANAGER 4,778.24 5,017.15 5,268.01 5,531.41 5,807.98 HUMAN RESOURCES OFFICER 4,778.24 5,017.15 5,268.01 5,531.41 5,807.98 X47 BUILDING OFFICIAL 4,921.59 5,167.67 5,426.05 5,697.35 5,982.22 X48 CITY CLERK 5,100.97 5,356.02 5,623.82 5,905.01 6,200.26 X53 AIRPORT DIRECTOR 5,398.14 5,668.05 5,951.45 6,249.02 6,561.48 UTILITY MANAGER 5,398.14 5,668.05 5,951.45 6,249.03 6,561.48 X62 INFORMATION SYSTEMS MANAGER 5,643.55 5,925.73 6,222.02 6,533.12 6,859.78 XF62 DIVISION FIRE CHIEF/FIRE MARSHALL 5,643.55 5,925.73 6,222.02 6,533.12 6,859.78 X67 ASSISTANT IT DIRECTOR 5,957.20 6,255.06 6,567.81 6,896.20 7,241.01 XP75 POLICE CAPTAIN 5,918.85 6,214.79 6,525.53 6,851.81 7,194.40 X85 CITY ENGINEER 6,525.30 6,851.57 7,194.14 7,553.85 7,931.54 X89 COMMUNITY DEVELOPMENT DIRECTOR 6,736.70 7,073.54 7,427.21 7,798.57 8,188.50 PARKS & RECREATION DIRECTOR 6,736.70 7,073.54 7,427.21 7,798.57 8,188.50 X91 ADMIN SERVICES DIRECTOR 6,851.56 7,194.14 7,553.84 7,931.54 8,328.11 FINANCE DIRECTOR 6,851.56 7,194.14 7,553.84 7,931.54 8,328.11 X93 FIRE CHIEF 7,014.60 7,365.33 7,733.60 8,120.28 8,526.29 X98 ASSISTANT CITY MANAGER 7,336.24 7,703.05 8,088.20 8,492.61 8,917.25 X100 IT DIRECTOR 7,446.49 7,818.81 8,209.76 8,620.24 9,051.26 X101 PUBLIC WORKS DIRECTOR 7,445.93 7,818.23 8,209.14 8,619.59 9,050.57 X107 POLICE CHIEF 7,958.78 8,356.72 8,774.55 9,213.28 9,673.95

NEGOTIABLE CONTRACT SALARIES
CITY MANAGER Min:9,615.38 Max:10,788.46

CITY OF HOLLISTER

SALARY SCHEDULES BY BARGAINING UNIT
FISCAL YEAR '25-26

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CONFIDENTIAL
C07 SUPPORT SERVICES ASSISTANT II (CONFIDENTIAL)2,414.17 2,534.88 2,661.62 2,794.71 2,934.44 C13 SENIOR SUPPORT SERVICES ASSISTANT 2,554.42 2,682.14 2,816.25 2,957.06 3,104.91 C24 EXECUTIVE ASSISTANT TO THE CITY MANAGER 2,846.45 2,988.77 3,138.21 3,295.12 3,459.88 C26 HUMAN RESOURCES TECHNICIAN I 2,901.19 3,046.25 3,198.56 3,358.49 3,526.42 LEGAL ADMINISTRATIVE ASSISTANT 2,901.19 3,046.25 3,198.56 3,358.49 3,526.42 C34 PAYROLL MANAGER 3,131.09 3,287.65 3,452.03 3,624.63 3,805.86 C38 HUMAN RESOURCES TECHNICIAN II 3,251.52 3,414.10 3,584.80 3,764.04 3,952.24 INFORMATION SYSTEMS TECHNICIAN 3,251.52 3,414.10 3,584.80 3,764.04 3,952.24 C45 HUMAN RESOURCES ANALYST 3,477.32 3,651.19 3,833.75 4,025.43 4,226.71 ACCOUNTANT 3,477.32 3,651.19 3,833.75 4,025.43 4,226.71 ADMINISTRATIVE ANALYST 3,477.32 3,651.19 3,833.75 4,025.43 4,226.71 C67 INFORMATION SYSTEMS ANALYST 4,279.53 4,493.51 4,718.18 4,954.09 5,201.79 DEPUTY CITY CLERK 4,279.53 4,493.51 4,718.18 4,954.09 5,201.79 C72 ACCOUNTING MANAGER 4,495.22 4,719.98 4,955.98 5,203.78 5,463.97 MANAGEMENT ANALYST 4,495.22 4,719.98 4,955.98 5,203.78 5,463.97

BARGAINING BI-WEEKLY BI-WEEKLY BI-WEEKLY BI-WEEKLY BI-WEEKLY UNIT RANGE POSITION STEP 1 STEP 2 STEP 3 STEP 4 STEP 5

HOLLISTER POLICE

OFFICER'S ASSOC
SWORN O58 POLICE OFFICER 3,985.65 4,184.93 4,394.18 4,613.89 4,844.58 O73 POLICE SERGEANT 4,584.25 4,813.46 5,054.14 5,306.84 5,572.18 O93 POLICE LIEUTENANT 5,542.81 5,819.95 6,110.95 6,416.50 6,737.32 NON-SWORN Q16 ANIMAL CONTROL OFFICER ASSISTANT 2,114.40 2,220.12 2,331.13 2,447.69 2,570.07 Q25 ANIMAL CONTROL OFFICER 2,304.70 2,419.94 2,540.93 2,667.98 2,801.38 Q36 POLICE OFFICER TRAINEE 2,560.52 2,688.54 2,822.97 2,964.12 3,112.32 Q43 COMMUNITY SERVICES OFFICER 2,737.99 2,874.89 3,018.63 3,169.56 3,328.04 POLICE SERVICES OFFICER 2,737.99 2,874.89 3,018.63 3,169.56 3,328.04 MULTI SERVICES OFFICER 2,737.99 2,874.89 3,018.63 3,169.56 3,328.04 Q49 POLICE SERVICES SUPERVISOR 2,900.24 3,045.25 3,197.52 3,357.39 3,525.26 Q57 COMMUNITY SERVICES OFFICER II 3,132.26 3,288.87 3,453.32 3,625.98 3,807.28 Q71 ANIMAL CONTROL SUPERVISOR 3,570.78 3,749.32 3,936.78 4,133.62 4,340.30

BARGAINING BI-WEEKLY BI-WEEKLY BI-WEEKLY BI-WEEKLY BI-WEEKLY UNIT RANGE POSITION STEP 1 STEP 2 STEP 3 STEP 4 STEP 5

MID-MANAGEMENT
M30 PARKS MAINTENANCE SUPERVISOR 3,352.39 3,520.01 3,696.01 3,880.81 4,074.86 STREETS MAINTENANCE SUPERVISOR 3,352.39 3,520.01 3,696.01 3,880.81 4,074.86 RECREATION SUPERVISOR 3,352.39 3,520.01 3,696.01 3,880.81 4,074.86 M39 ADMINISTRATIVE SUPERVISOR 3,654.11 3,836.81 4,028.66 4,230.09 4,441.59 CODE ENFORCEMENT SUPERVISOR 3,654.11 3,836.81 4,028.66 4,230.09 4,441.59 FLEET MAINTENANCE SUPERVISOR 3,654.11 3,836.81 4,028.66 4,230.09 4,441.59 PROJECTS COORDINATOR 3,654.11 3,836.81 4,028.66 4,230.09 4,441.59 M44 ENVIRONMENTAL PROGRAMS MANAGER 3,835.14 4,026.90 4,228.25 4,439.66 4,661.64 RECREATION MANAGER 3,835.14 4,026.90 4,228.25 4,439.66 4,661.64 SR. WASTEWATER TREATMENT PLANT OPTR.3,835.14 4,026.90 4,228.25 4,439.66 4,661.64 SR. PUBLIC WORKS INSPECTOR 3,835.14 4,026.90 4,228.25 4,439.66 4,661.64 M55 ASSOCIATE ENGINEER 4,259.23 4,472.19 4,695.80 4,930.59 5,177.12 CAPITAL IMPROVEMENT PROJECT MANAGER 4,259.23 4,472.19 4,695.80 4,930.59 5,177.12 PERMIT CENTER MANAGER 4,259.23 4,472.19 4,695.80 4,930.59 5,177.12 PUBLIC WORKS SUPERINTENDENT 4,259.23 4,472.19 4,695.80 4,930.59 5,177.12 SENIOR PLANNER 4,259.23 4,472.19 4,695.80 4,930.59 5,177.12 UTILITY SUPERVISOR 4,259.23 4,472.19 4,695.80 4,930.59 5,177.12 M61 PLANNING MANAGER 4,502.61 4,727.74 4,964.12 5,212.33 5,472.95 SENIOR CIVIL ENGINEER 4,502.61 4,727.74 4,964.12 5,212.33 5,472.95 ECONOMIC DEVELOPMENT MANAGER 4,502.61 4,727.74 4,964.12 5,212.33 5,472.95 ASSOCIATE ENGINEER - TRAFFIC 4,502.61 4,727.74 4,964.12 5,212.33 5,472.95 ASSOCIATE ENGINEER-UTILITIES 4,502.61 4,727.74 4,964.12 5,212.33 5,472.95 CANNABIS AFFAIRS MANAGER 4,502.61 4,727.74 4,964.12 5,212.33 5,472.95

BARGAINING BI-WEEKLY BI-WEEKLY BI-WEEKLY BI-WEEKLY BI-WEEKLY UNIT RANGE POSITION STEP 1 STEP 2 STEP 3 STEP 4 STEP 5

HOLLISTER

FIREFIGHTERS
F43 FIRE FIGHTER 3642.05 3824.15 4015.36 4216.13 4426.94 F58 FIRE ENGINEER 4188.36 4397.78 4617.67 4848.55 5090.98 F73 FIRE CAPTAIN 4816.61 5057.44 5310.32 5575.83 5854.62 FIRE INSPECTOR 4816.61 5057.44 5310.32 5575.83 5854.62
F76 FIRE CAPTAIN (TRAINING)5250.11 5512.62 5788.25 6077.66 6381.54 F88 BATTALION CHIEF 5539.10 5816.06 6106.86 6412.21 6732.82 DEPUTY FIRE MARSHAL 5539.10 5816.06 6106.86 6412.21 6732.82

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STAFF REPORT

HOLLISTER CITY COUNCIL
MEETING DATE: January 5, 2026
REPORT # City Manager-2026-01

AGENDA ITEM: A RESOLUTION APPROVING A RESIDENTIAL TAX SHARING AGREEMENT WITH THE COUNTY OF SAN BENITO FOR LAFCo ANNEXATION REQUEST 2024-549

DEPARTMENT: City Manager
DEPARTMENT HEAD: Jim Pia, Interim City Manager
STAFF CONTACT: Rod Powell, Assistant City Manager

RECOMMENDED ACTION: Adopt a resolution authorizing the Mayor to execute a required Residential Tax Sharing Agreement with the County of San Benito to allow for an owner-initiated annexation of seven parcels included in LAFCo Annexation Request 2024-549.

DISCUSSION: Revenue and Taxation (R&T) Code §99 provides the state law that governs the processing of the tax exchange agreements for annexations. The R&T Code allows for a Residential Tax Sharing Agreement (Agreement) to be negotiated and used by the affected jurisdictions as required by such actions.

In December 2019, the City and County approved a new Master Residential Tax Sharing Agreement setting forth how property taxes shall be divided between the jurisdictions in the event of a property annexation to the City of Hollister. This agreement specified that the City and County would each receive 50% of the County’s base tax following any annexation initiated by the City, but failed to account for owner-initiated annexation requests.

In order to consider an owner-initiated annexation request, the Local Area Formation Commission (LAFCo) requires impacted jurisdictions to enter into a post-annexation tax sharing agreement. The proposed Agreement was developed in partnership with the County and will also be brought forward to the Board of Supervisors for consideration and finalization at a future date. The Agreement is ap plicable only to the seven parcels identified in LAFCo Annexation Request 2024 -549.

FISCAL IMPACT: Exact fiscal impacts are unknown and depend on the number and timing of annexations. The intent of this agreement is to allow for the orderly development of the community while mitigating any negative fiscal impacts to either the City or County.

PREVIOUS COUNCIL OR COMMISSION ACTION: The Council last considered and approved a Master Residential Agreement for Tax Transfer upon Annexation with San Benito County on December 16, 2019.

CEQA: The proposed action is administrative in nature and does not constitute a project under CEQA Guidelines Section 15378.

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ATTACHMENTS:

1. Resolution

2. Residential Tax Sharing Agreement with the County of San Benito for LAFCo Annexation Request 2024-549

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RESOLUTION NO. 2026-XX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HOLLISTER

APPROVING A RESIDENTIAL TAX SHARING AGREEMENT WITH THE
COUNTY OF SAN BENITO FOR LAFCo ANNEXATION REQUEST 2024-549

WHEREAS, California Revenue and Taxation Code Section 99 requires that each city or county included in a governmental reorganization or jurisdictional change accept a negotiated exchange of property tax revenues; and

WHEREAS, in 2019, the City and County approved a Master Residential Tax Sharing Agreement specifying that each would receive 50% of the County’s base tax following any annexation initiated by the City, but failed to account for owner-initiated annexation requests; and

WHEREAS, LAFCo has received owner-initiated Annexation Request 2024-549 for seven parcels adjacent to Chappell Road; and

WHEREAS, the City of Hollister and County of San Benito have jointly developed an individual Residential Tax Sharing Agreement for LAFCo Annexation Request 2024 -549 and agree to accept the negotiated exchange of re sidential tax revenue for the seven parcels identified in LAFCo Annexation Request 2024-549.

NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Hollister authorizes the Mayor to execute the attached Residential Tax Sharing Agreement for LAFCo Annexation Request 2024-549 with the County of San Benito.

PASSED AND ADOPTED, by the City Council of the City of Hollister at a regular meeting held on January 5, 2026, by the following vote:

AYES:

NOES:

ABSTAINED:

ABSENT:

Roxanne Stephens, Mayor

ATTEST: APPROVED AS TO FORM:

Lozano Smith Attorneys at Law

____
Jennifer Woodworth, MMC, City Clerk Jennifer P. Thompson, City Attorney

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Resolution No. 2026-XX

I, Jennifer Woodworth, MMC, City Clerk of the City of Hollister, do hereby cert ify that the attached Resolution No. 2026-XX is an original resolution, or true and correct copy of a City resolution, duly adopted by the Council of the City of Hollister at a regular meeting held on January 5, 2026, at which meeting a quorum was present.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of Hollister on January 5, 2026.

Jennifer Woodworth, MMC
City Clerk of the City of Hollister

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STAFF REPORT

HOLLISTER CITY COUNCIL
MEETING DATE: January 5, 2026
REPORT # Community Development-2026-02

AGENDA ITEM: A RESOLUTION RENEWING A REGULATORY PERMIT FOR EUPHORIC LIFE INC. TO OPERATE A CANNABIS MANUFACTURING FACILITY AT 807 INDUSTRIAL DRIVE (APN 056-270-012-000)

DEPARTMENT: Community Development
DEPARTMENT HEAD: Rod Powell, Assistant City Manager
STAFF CONTACT: Maria C. Mendez, Cannabis Affairs Program Manager

RECOMMENDED ACTION: Adopt a resolution approving the renewal of a regulatory permit for Euphoric Life Inc. to operate a cannabis manufacturing facility located at 807 Industrial Drive for the 2026/2027 period.

DISCUSSION: On December 18, 2017, the Hollister City Council approved a Cannabis Use Permit/Development Agreement for Euphoric Life, Inc. to operate a cannabis manufacturing facility (Resolution No. 2017-331). Following this, on March 19, 2018, the City Council granted a regulatory permit (Resolution No. 2018 -60) for the company to operate at 807 Industrial Drive.

On February 18, 2025, during its regular meeting, the City Council renewed Euphoric Life Inc.’s regulatory permit for the 2025/2026 period.

According to Section 5.42.050 of the City of Hollister Municipal Code, the renewal of a regulatory permit is subject to approval by the City Council. Under HMC § 5.42.070(A), the City Council may only reject the renewal if any specific findings are made. Euphoric Life Inc. has consistently adhered to all operational requirements and has pa id all necessary fees. Staff have not identified any grounds that would justify rejecting the renewal.

Approving the renewal of this regulatory permit will enable Euphoric Life Inc. to continue its operations into the 2026/2027 period, ensuring the business’s continued contribution to the local economy and industry. Given the applicant’s compliance history, staff recommend approval of the permit renewal.

FISCAL IMPACT: As a regulatory permittee, Euphoric Life Inc. is required to pay quarterly taxes to the city. Non-approval of an applicable regulatory permit would result in a loss of current tax revenue.

PREVIOUS COUNCIL OR COMMISSION ACTION: On February 18, 2025, the City Council renewed Euphoric Life Inc.’s regulatory permit for the 2025–2026 period, granting a late renewal after the permit expired on January 10, 2025.

CEQA: Exempt: Section 15301. The proposed action is exempt from the California Environmental Quality Act (CEQA) under Section 15301, which applies to the operation and maintenance of existing facilities. This exemption is appropriate as the project

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involves the renewal of a regulatory permit for an established cannabis cultivation facility, with no significant changes or expansion of operations anticipated. Therefore, no further environmental review is required.

ATTACHMENTS:

1. Resolution

2. Regulatory Permit Application

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RESOLUTION NO. 2026-XX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HOLLISTER

RENEWING A REGULATORY PERMIT FOR EUPHORIC LIFE INC TO
OPERATE A CANNABIS MANUFACTURING FACILITY AT 807
INDUSTRIAL DRIVE (APN 056-270-012-000)

WHEREAS, the City Council has adopted Ordinance 1179 permitting cannabis facilities; and

WHEREAS, the City Council at its regular meeting of December 18, 2017, approved a Cannabis Use Permit/ Development Agreement for Euphoric Life Inc. located at 807 Industrial Drive; and

WHEREAS, the City Council at its regular meeting of March 19, 2018 issued a cannabis manufacturing regulatory permit; and

WHEREAS, the City Council at its regular meeting of February 18, 2025 the City Council renewed a manufacturing regulatory permit for 2025 to 2026; and

WHEREAS, under the provisions of Section 5.42.040 of the Hollister Municipal Code, the renewal of a regulatory permit is subject to review and approval by the City Council; and

WHEREAS, Euphoric Life Inc. has completed the regulatory permit application for 2026 to 2027, and it has been deemed complete; and

WHEREAS, at its regular meeting of January 5, 2026 the City Council considered the applicant’s request, reviewed the staff report, and received written and oral testimony for and against the proposal; and

WHEREAS, under the provisions of Section 5.42.070 A of the Hollister Municipal Code, the City Council may reject a permit. After review, the Council did not make any of the specified findings required to deny Euphoric Life Inc. a regulatory permit; and

WHEREAS, under the provisions of Section 5.42.14 The City Council may, however, place conditions upon Euphoric Life Inc.’s regulatory permit.

NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Hollister hereby makes the following findings and determinations regarding the proposed cannabis regulatory permit:

Grounds for Denial

The City Council may reject a regulatory permit upon making any of the following findings, none of the following required findings were made to warrant the rejection of a regulatory permit:

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Resolution No. 2026-XX

1. Any applicant made one or more false or misleading statements or omissions on the registration application or during the application process;

2. If applicable, the applicant is not a primary caregiver, qualified patient, or the legal representative of the cannabis facility;

3. The applicant fails to meet the requirements of this Chapter or any regulation adopted pursuant to this Chapter;

4. The cannabis facility or its location is in violation of any building, zoning, health, safety, or other provision of this code, or of any state or local law which substantially affects the public health, welfare, safety, or morals, or the facility or its location is not permitted in the proposed area, or the issuing or continuation of a regulatory permit would be contrary to the public health,
welfare, safety, or morals;

5. Any applicant, manager, or employee of the cannabis facility is under eighteen (18) years of age;

6. Any applicant has been convicted of an offense that is substantially related to the qualifications, functions, or duties of the business or profession for which the application is made, except that if the licensing authority determines that the applicant is otherwise suitable to be issued a permit and granting the permit would not compromise public safety, the licensing authority shall conduct a thorough review of the nature of the crime, conviction, circumstances, and evidence of rehabilitation of the applicant, and shall evaluate the suitability of the applicant to be issued a permit based on the evidence found through the review process. In determining which offenses are substantially related to the qualifications, functions, or duties of the business or profession for which the application is made, the licensing authority shall include, but not be limited to, the following:

a. A felony conviction for the illegal possession for sale, manufacture, transportation, or cultivation of a controlled substance.

b. A violent felony conviction, as specified in subdivision (c) of Section 667.5 of the Penal Code.

c. A serious felony conviction, as specified in subdivision (c) of Section 1192.7 of the Penal Code.

d. A felony conviction involving fraud, deceit, or embezzlement.

7. Any applicant or manager of the medical cannabis facility is a licensed physician making patient recommendations for medical cannabis.

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Resolution No. 2026-XX

8. Any applicant or manager has been sanctioned by a licensing authority or a city, county, or city and county for unlicensed operation of a medical cannabis facility or has had a license revoked under this Chapter in the three years immediately preceding the date the application is filed with the licensing authority.

9. The applicant did not pay the City the required application and processing fees as set forth in Section 5.42.080

BE IT FURTHER RESOLVED that the City Council of the City of Hollister hereby approves and authorizes staff to renew the regulatory permit for Euphoric Life Inc. located at 807 Industrial Drive to continue to operate a cannabis manufacturing facility.

PASSED AND ADOPTED, by the City Council of the City of Hollister at a regular meeting held on January 5, 2026, by the following vote:

AYES:

NOES:

ABSTAINED:

ABSENT:

Roxanne Stephens, Mayor

ATTEST: APPROVED AS TO FORM:

Lozano Smith Attorneys at Law

____
Jennifer Woodworth, MMC, City Clerk Jennifer P. Thompson, City Attorney

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Resolution No. 2026-XX

held on January 5, 2026 at which meeting a quorum was present.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of Hollister on.

Jennifer Woodworth, MMC
City Clerk of the City of Hollister

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STAFF REPORT

HOLLISTER CITY COUNCIL
MEETING DATE: January 5, 2026
REPORT # Community Development-2026-03

AGENDA ITEM: A RESOLUTION RENEWING A REGULATORY PERMIT FOR EUPHORIC LIFE INC. TO OPERATE A CANNABIS DISTRIBUTION FACILITY AT 807 INDUSTRIAL DRIVE (APN 056-270-012-000)

DEPARTMENT: Community Development
DEPARTMENT HEAD: Rod Powell, Assistant City Manager
STAFF CONTACT: Maria C Mendez

RECOMMENDED ACTION: Adopt a resolution approving the renewal of a regulatory permit for Euphoric Life Inc. to operate a cannabis distribution facility located at 807 Industrial Drive for the 2026/2027 period.

On February 18, 2025, during its regular meeting, the City Council renewed Euphoric Life Inc.’s regulatory permit for the 2025/2026 period.

According to Section 5.42.050 of the City of Hollister Municipal Code, the renewal of a regulatory permit is subject to approval by the City Council. Under HMC § 5.42.070(A), the City Council may only reject the renewal if any specific findings are made. Euphoric Life Inc. has consistently adhered to all operational requirements and has paid all necessary fees. Staff have not identified any grounds that would justify rejecting the renewal.

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ATTACHMENTS:

1. Resolution

2. Regulatory Permit Application

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RESOLUTION NO. 2026-XX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HOLLISTER

RENEWING A REGULATORY PERMIT FOR EUPHORIC LIFE INC TO
OPERATE A CANNABIS DISTRIBUTION FACILITY AT 807 INDUSTRIAL DRIVE (APN 056-270-012-000)

WHEREAS, the City Council has adopted Ordinance 1179 permitting cannabis facilities; and

WHEREAS, the City Council at its regular meeting of June 18, 2018, approved a Cannabis Use Permit/ Development Agreement for Euphoric Life Inc. located at 807 Industrial Drive; and

WHEREAS, the City Council at its regular meeting of November 19, 2018 issued a cannabis distribution regulatory permit; and

WHEREAS, the City Council at its regular meeting of February 18, 2025 renewed a distribution regulatory permit for 2025 to 2026; and

WHEREAS, under the provisions of Section 5.42.040 of the Hollister Municipal Code, the renewal of a regulatory permit is subject to review and approval by the City Council; and

WHEREAS, Euphoric Life Inc. has completed the regulatory permit application for 2026 to 2027, and it has been deemed complete; and

WHEREAS, under the provisions of Section 5.42.14 The City Council may, however, place conditions upon Euphoric Life Inc.’s regulatory permit.

NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Hollister hereby makes the following findings and determinations regarding the proposed cannabis regulatory permit:

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Resolution No. 2026-XX

Grounds for Denial

The City Council may reject a regulatory permit upon making any of the following findings, none of the following required findings were made to warrant the rejection of a regulatory permit:

1. Any applicant made one or more false or misleading statements or omissions on the registration application or during the application process;

2. If applicable, the applicant is not a primary caregiver, qualified patient, o r the legal representative of the cannabis facility;

3. The applicant fails to meet the requirements of this Chapter or any regulation adopted pursuant to this Chapter;

5. Any applicant, manager, or employee of the cannabis facility is under eighteen (18) years of age;

a. A felony conviction for the illegal possession for sale, manufacture, transportation, or cultivation of a controlled substance.

b. A violent felony conviction, as specified in subdivision (c) of Section 667.5 of the Penal Code.

c. A serious felony conviction, as specified in subdivision (c) of Section 1192.7 of the Penal Code.

d. A felony conviction involving fraud, deceit, or embezzlement.

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Resolution No. 2026-XX

7. Any applicant or manager of the medical cannabis facility is a licensed physician making patient recommendations for medical cannabis.

9. The applicant did not pay the City the required application and processing fees as set forth in Section 5.42.080

PASSED AND ADOPTED, by the City Council of the City of Hollister at a regular meeting held on January 5, 2026, by the following vote:

AYES:

NOES:

ABSTAINED:

ABSENT:

Roxanne Stephens, Mayor

ATTEST: APPROVED AS TO FORM:

Lozano Smith Attorneys at Law

____
Jennifer Woodworth, MMC, City Clerk Jennifer P. Thompson, City Attorney

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Resolution No. 2026-XX

held on January 5, 2026 at which meeting a quorum was present.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of Hollister on January 5, 2026.

Jennifer Woodworth, MMC
City Clerk of the City of Hollister

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STAFF REPORT

HOLLISTER CITY COUNCIL
MEETING DATE: January 5, 2026
REPORT # Finance-2026-02

AGENDA ITEM: FORMALLY RECEIVE AND ACCEPT THE FINAL DRAFT OF THE FISCAL YEAR (FY) 2021-22 ANNUAL AUDIT

DEPARTMENT: Adminstrative Services
DEPARTMENT HEAD: Jim Pia, Interim City Manager
STAFF CONTACT: Delia Pichardo, Accounting Manager

RECOMMENDED ACTION: Formally receive and accept the final draft of the FY 2021-22 annual audit, including the Annual Comprehensive Financial Report (ACFR) and Single Audit.

DISCUSSION: The City of Hollister prepares an Annual Comprehensive Financial Report (ACFR) covering a twelve-month period from July 1 through June 30, commonly referred to as the City’s fiscal year. The ACFR presents the City’s financial position and results of operations in accordance with generally accepted accounting principles and applicable governmental accounting standards. Unfortunately, the City is behind in the completion of the audits, which are done one year at a time. It is important that the City catch up in this process as audits help to ensure transparency and accountability in managing financial resources and provide information on the city’s financial picture.

Being up to date in the audit process ensures that resources are effectively allocated and the process can help to identify potential risks in city finances or shortfalls in certain revenue sources. Having completed audits are also vital for grant applications and maintaining good credit ratings.

The City’s financial statements are audited annually by an independent firm of Certified Public Accountants (CPAs) to provide an objective opinion on whether the financial statements are presented fairly, in all material respects. For Fiscal Year 2021 –22, the city engaged MUN CPAs as its external auditor to conduct the audit.

The scope of the annual audit includes the City’s basic financial statements, which consist of government-wide financial statements, fund financial statements, and the accompanying notes to the financial statements. The auditors plan and perform the audit to obtain reasonable assurance that the financial statements are free from material misstatement, whether caused by error or fraud, and to express an independent opinion on the City’s financial reporting.

The City Council is being asked to formally receive and accept the annual audit for Fiscal Year 2021–22. Acceptance of the audit signifies that the Council has received the report and acknowledges the auditor’s opinion and findings.

City staff worked collaboratively with the external auditors to complete the Fiscal Year 2021–22 audit. The audit identifies certain deficiencies and areas for improvement in internal controls and financial processes. Copies of the audit report will be pro vided to all department heads, and under the leadership of the City Manager’s Office and the

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Administrative Services Department, the City has begun implementing corrective actions to address the identified findings and strengthen internal controls and financial reporting practices.

One of the audit findings relates to delays in completing the City’s annual audits. Staff has initiated corrective measures to improve timeliness and bring the city back into compliance with expected audit schedules, including commencing work on the next outstanding audit for Fiscal Year 2022–23.

In addition, the city is in the process of sourcing a new external auditing firm to begin the Fiscal Year 2022–23 audit as quickly as possible. Staff intend to establish a clear and robust audit timeline with the new firm to address past delays, complete outstanding audits, and restore the City to a current and sustainable annual audit cycle moving forward.

FISCAL IMPACT: There is no fiscal impact associated with receiving and accepting the Fiscal Year 2021–22 Annual Comprehensive Financial Report.

PREVIOUS COUNCIL OR COMMISSION ACTION: The City Council received the FY 2021 audit at the May 21, 2024, Council Meeting.

CEQA: N/A – Not a project.

ATTACHMENTS:

1. FY 2021-22 ACFR

2. FY 2021-22 Audit Conclusion Letter

3. FY 2021-22 Gann Report

4. FY 2021-22 Management Letter

5. FY 2021-22 Single Audit and Related Reports

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CITY OF HOLLISTER

CALIFORNIA

ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2022

PREPARED BY

FINANCE DEPARTMENT

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CITY OF HOLLISTER
FOR THE YEAR ENDED JUNE 30, 2022

TABLE OF CONTENTS
Page
Independent Auditor's Report on Basic Financial Statements 1- 3 Management's Discussion and Analysis 4 - 17
Basic Financial Statements:

Government-wide Financial Statements
Statement of Net Position 18
Statement of Activities 19
Fund Financial Statements
Balance Sheet - Governmental Funds 20
Reconciliation of the Governmental Funds Balance Sheet to the Government-wide Statement of Net Position 21
Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds 22
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances to the Statement of Activities - Governmental Funds 23 Statement of Net Position - Proprietary Funds 24 - 25
Statement of Revenues, Expenses and Changes in Net Position - Proprietary Funds 26 - 27 Statement of Cash Flows - Proprietary Funds 28 - 31
Statement of Fiduciary Net Position - Fiduciary Funds 32 Statement of Changes in Fiduciary Net Position - Fiduciary Funds 33 Notes to Basic Financial Statements 34 - 79
Required Supplemental Information:

Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual - General Fund 80 - 83
Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual - Housing Successor Agency 84
Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual - CIP Traffic Impact Fees 85
Notes to Required Supplemental Information 86
Schedule of the City's Proportionate Share of the Net Pension Liability 87 - 88 Schedule of Pension Contributions to the Defined Benefit Pension Plan 89 - 90 Schedule of Changes in the Total OPEB Liability and Related Ratios 91 Schedule of Contributions to the OPEB Plan 92

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CITY OF HOLLISTER
FOR THE YEAR ENDED JUNE 30, 2022

TABLE OF CONTENTS
Combining Financial Statements and Other Supplemental Information:Page Non-Major Governmental Funds:

Non-Major Fund Descriptions 93 - 94
Combining Balance Sheets 95 - 100
Combining Statements of Revenues, Expenditures and Changes in Fund Balance 101 - 106 Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual CDBG Low Income Housing Rehab 107
Gas Tax 108
Park Dedication 109
Local Transportation 110
Road Repair & Accountability 111
Federal Aviation Admin Grant 112
4th of July Rally 113
Safer Grant 114
Transportation Development Act 115
Spay/Neuter Education 116
Mello-Roos CFD-001 117
Police Special Law Enforcement Safety 118
Office of Traffic Safety 119
Animal W elfare 120
SB1186 121
Offstreet Parking 122
2013 CDBG 123
2017 CDBG 124
2020 CDBG 125
FEMA- COVID 19 126
CARES Act 127
ARPA 128

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CITY OF HOLLISTER
FOR THE YEAR ENDED JUNE 30, 2022

TABLE OF CONTENTS
Combining Financial Statements and Other Supplemental Information (continued):Page Signal Improvement on Flynn 129
Traffic Impact Fees 130
AFG Grant 131
Home Program Revolving Loans 132
Fire Impact Fees 133
Police Impact Fees 134
Storm Drain Fees 135
Storm Drain Impact Fees 136
AB 1600 Santa Ana Storm Drain 137
Jail Juvenile Hall 138
City Hall/City Yard Impact Fees 139
Custodial Funds:

Custodial Fund Descriptions 140
Combining Statement of Fiduciary Net Position 141 - 143 Statement of Changes in Fiduciary Net Position 144 - 146 Sewer Funds:

Sewer Fund Descriptions 147
Combining Schedule of Net Position 148
Combining Schedule of Revenues, Expenses and Changes in Net Position 149 Combining Schedule of Cash Flows 150 - 151

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INDEPENDENT AUDITOR'S REPORT
To the Hollister City Council
Hollister, California
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Hollister (the City) as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.

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

Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. W e believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Change in Accounting Principle
As described in Note 1 to the financial statements, in 2022, the City of Hollister adopted new accounting guidance, GASB Statement No. 87, Leases. Our opinion is not modified with respect to this matter.

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

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City of Hollister’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.

U
MUN CPAs, LLP 1760 Creekside Oaks Drive, Suite 160, Sacramento, CA 95833 www.muncpas.com GLENDALE•ROSEVILLE•SACRAMENTO•ZEPHYR COVE•KAUAI

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Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinions.

Reasonable assurance is a high level of assurance, but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards, we:
Exercise professional judgment and maintain professional skepticism throughout the audit. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, no such opinion is expressed. Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, the budgetary comparison information, pension related schedules, and other post-employment benefit schedules as listed in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. W e do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

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

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 10, 2025, on our consideration of the City of Hollister’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance.

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

Sacramento, California
December 10, 2025
MUN CPAsLLP

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CITY OF HOLLISTER

MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2022
The information in this section is not covered by the Independent Auditor’s Report. It is presented as required supplementary information for the benefit of the readers of the Annual Financial Report.

We offer those interested in the City of Hollister’s financial statements this narrative overview and analysis of the financial activities of the City of Hollister for the fiscal year ended June 30, 2022.

FINANCIAL HIGHLIGHTS
The assets and deferred outflows of resources of the City of Hollister exceeded its liabilities and deferred inflows of resources at the close of the most recent fiscal year by $196,584,326 (net position). Of this amount, $64,730,346 represents unrestricted net position, which may be used to meet the government’s ongoing obligations to citizens and creditors.
City of Hollister’s total net position increased $23,718,961. At the close of the current fiscal year, the City of Hollister’s governmental funds reported combined fund balances of $70,469,389, an increase of $16,433,423 in comparison with the prior year. Approximately less than 16% of this amount ($11,091,665) is available for spending at the government’s discretion (unassigned fund balance). At the end of the current fiscal year, unrestricted fund balance (the total of the assigned and unassigned components of fund balance) for the general fund was $14,204,224, or approximately 38% of total general fund expenditures.
The City of Hollister’s total outstanding long-term debt decreased by $14,600,614 during the current fiscal year as a result of normal debt service payment and a bond call of the City's wastewater bonds.

OVERVIEW OF THE FINANCIAL STATEMENTS
The discussion and analysis provided here are intended to serve as an introduction to the City of Hollister’s basic financial statements. The City of Hollister’s basic financial statements consist of three components: 1) government- wide financial statements, 2) fund financial statements, and 3) the notes to financial statements. This report also includes supplementary information intended to furnish additional details to support the basic financial statements themselves.

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

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

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

Both of these government wide financial statements distinguish functions of the City of Hollister that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business type activities). The governmental activities of the City include general government, public protection, public works, and recreation. The business type activities of the City include the Airport, Water, Wastewater, Street Sweeping, and Briggs Building funds.
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CITY OF HOLLISTER

MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
FOR THE YEAR ENDED JUNE 30, 2022
Fund Financial Statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City of Hollister, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance related legal requirements.

All of the funds of the City of Hollister can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds.

Governmental funds are used to account for essentially the same functions reported as governmental activities in the government wide financial statements. However, unlike the government wide financial statements, governmental fund financial statements focus on near term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near term financing requirements.

Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.

The City maintains 36 individual governmental funds. On the financial statements for governmental funds, information is presented separately for three major funds: the General Fund, the Housing Successor Agency Fund, and the CIP Traffic Impact Fees Fund. Data from the other governmental funds are aggregated into a single column.

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

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

Proprietary funds are of two types. Enterprise funds are used to report the same functions presented as business- type activities in the government-wide financial statements. The City uses enterprise funds to account for its Airport, Water, Wastewater, Street Sweeping, and Briggs Building operations. Internal service funds are used to accumulate and allocate costs internally among the City’s various functions. The City does not use internal service funds.

Proprietary funds statements provide the same type of information as the part of government-wide financial statements pertaining to business-type activities, only in more detail.

Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statement because the resources of those funds are not available to support the City’s programs.

The City of Hollister maintains two different types of fiduciary funds. The Private Purpose Trust Fund is used to report resources held in trust for the activity of the Oversight Board and the Department of Finance to dissolve the former Redevelopment Agency. Custodial funds report resources held by the City of Hollister in a custodial capacity for individuals, private organizations and other governments.

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

Other Information. In addition to the basic financial statements, this report presents Required Supplementary Information. The required supplementary information presents the City’s progress in funding its obligation to provide pension and health benefits to its employees as well as the City's General Fund and major special revenue fund's budgetary comparison schedules.

The combining and individual fund statements and schedules referred to earlier provide information for nonmajor governmental funds and fiduciary funds, and are presented immediately following the required supplementary information.
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CITY OF HOLLISTER

MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
FOR THE YEAR ENDED JUNE 30, 2022

GOVERNMENT-WIDE OVERALL FINANCIAL ANALYSIS
As noted earlier, net position over time, may serve as a useful indicator of a government’s financial position. In the case of the City of Hollister, assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $196,584,326, at the close of the most recent fiscal year.

City of Hollister's Net Position
This analysis focuses on net position and the changes in net position of the City as a whole:

TABLE 1
GOVERNMENT-WIDE NET POSITION JUNE 30, 2022 and 2021
Governmental Activities Business-type Activities Total Government 2022
(Restated)
2021 2022
(Restated)
2021 2022
(Restated)
2021
ASSETS
Current and other assets $94,603,837 $75,804,835 $41,581,163 $28,024,057 $136,185,000 $103,828,892 Capital assets 55,873,565 50,586,235 127,321,481 132,292,606 183,195,046 182,878,841 Total Assets 150,477,402 126,391,070 168,902,644 160,316,663 319,380,046 286,707,733

DEFERRED OUTFLOW S
Deferred Outflows 9,967,413 8,764,651 1,435,470 1,339,576 11,402,883 10,104,227

LIABILITIES
Current and other liabilities 8,690,656 7,570,490 2,835,327 2,029,327 11,525,983 9,599,817 Long-term liabilities 28,441,607 39,077,957 68,396,882 72,361,146 96,838,489 111,439,103 Total Liabilities 37,132,263 46,648,447 71,232,209 74,390,473 108,364,472 121,038,920

DEFERRED INFLOW S
Deferred Inflows 18,884,602 2,388,760 6,949,529 518,915 25,834,131 2,907,675

NET POSITION
Net investment in capital
assets 52,697,929 49,574,304 61,914,087 63,685,218 114,612,016 113,259,522 Restricted for debt service --407 34 407 34
Restricted for community
improvement 410,343 249,657 --410,343 249,657
Restricted for public safety 9,004,786 208,744 --9,004,786 208,744 Restricted for capital projects 6,486,421 5,267,442 --6,486,421 5,267,442 Restricted for housing 1,340,007 1,313,162 --1,340,007 1,313,162 Unrestricted 34,488,464 29,505,205 30,241,882 23,061,599 64,730,346 52,566,804 Total Net Position $104,427,950 $86,118,514 $92,156,376 $86,746,851 $196,584,326 $172,865,365 6

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CITY OF HOLLISTER

MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
FOR THE YEAR ENDED JUNE 30, 2022
The City's total government-wide net position amounted to $196,584,326 as of June 30, 2022. This represented an increase of $23,718,961 over fiscal year 2021. The increase in the change in net position is reflected in the Statement of Activities shown in Table 2 for governmental funds and Table 3 for business-type activities.

By far, the largest portion of the City of Hollister’s net position (58.3%) reflects its investment in capital assets (e.g., land, buildings, machinery, equipment, vehicles, and infrastructure), less any related outstanding debt that was used to acquire those assets. The City of Hollister uses these capital assets to provide a variety of services to its citizens.

Accordingly, these assets are not available for future spending. Although the City of Hollister's investment in capital assets is reported net of related debt, it should be noted that the resources used to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.

An additional portion of the City of Hollister’s net position (8.8%) represents resources that are subject to external restrictions on how they may be used. The remaining balance of $64,730,346 is unrestricted and may be used to meet the government’s ongoing obligations to its citizens and creditors.

However, the City of Hollister’s overall net position increased $23,718,961 from the prior fiscal year. The reasons for this overall increase are discussed in the following sections for governmental activities and business-type activities.

Governmental Activities. During the current fiscal year, net position for governmental activities increased $18,309,436 from the prior fiscal year for an ending balance of $104,427,950. The increase in net position was primarily driven by higher revenues across several major categories. Governmental revenues increased by $7,988,884 for the prior year. With growth in taxes, charges for services, operating grants and contributions, investment earnings, and other revenues.
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CITY OF HOLLISTER

MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
FOR THE YEAR ENDED JUNE 30, 2022
The City's net position as of June 30, 2022 consisted of the following:

TABLE 2
GOVERNMENTAL ACTIVITIES CHANGES IN NET POSITION AS OF JUNE 30, 2022
(Restated)
2021

REVENUES
Charges for services $27,074,257 $19,743,403
Operating grants and contributions 5,442,945 4,077,276
Capital grants and contributions 1,493,782 2,408,478
Taxes 29,794,602 30,489,582
Motor vehicle in lieu 47,811 29,811
Investment earnings 869,104 418,827
Other revenues 1,434,350 1,000,590
Total Revenue 66,156,851 58,167,967

EXPENSES
General government 14,892,463 12,037,399
Public safety 22,010,532 23,652,679
Public works 7,717,656 5,844,121
Recreation 3,283,808 2,948,633
Interest and fiscal charges 81,597 35,155
Total Expenses 47,986,056 44,517,987
Increase in net position before transfers 18,170,795 13,649,980 Transfers 138,641 256,062
Change in net position 18,309,436 13,906,042
Net position - beginning 86,118,514 72,377,016
Net position - ending $104,427,950 $86,118,514
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CITY OF HOLLISTER

MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
FOR THE YEAR ENDED JUNE 30, 2022

As reflected above, forty-five (45%) or $29,794,602 of the City's governmental activities revenues as of June 30, 2022 were comprised of tax increments. Program revenues were fifty-one percent (51%) of governmental activities. Of this amount, eight percent (8%) or $5,442,945 were derived from operating grants and contributions, two (2%) or $1,493,782 were derived from capital grants and contributions, and forty-one percent (41%) or $27,074,257 were derived from charges for services. The remaining sources of revenue include one percent or $869,104 of investment earnings, and three percent (2%) or $1,434,350 of other revenues. The City's total governmental revenues increased $7,988,884 from the prior year.

Taxes
Sales and use tax revenues decreased by 2% due to the decline in Measure G revenues, while the City's property tax revenues increased by 8% as a result of continued growth within the City.

Charges for Services
The City's overall charges for services increased mainly primarily due to higher revenues from building permits, engineering inspection charges, park impact fees, and other development-related impact fees generated from increased construction activity within the City's boundaries.

Operating Grants and Contributions
The City's operating grants and contributions increased primarily due to the availability of ARPA funding, which totaled $4,872,937 in FY 2022.
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CITY OF HOLLISTER

MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
FOR THE YEAR ENDED JUNE 30, 2022
As identified in the functional expenses chart, forty-six percent (46% or $22,010,532 of the City's expenses were for public safety. thirty-one percent (31%) or $14,892,463 was for general government expenses. The remaining functional expenses included sixteen (16%) or $7,717,656 for public works, seven percent (7%) or $3,283,808 in recreation, and less than one percent or $81,597 in interest and fiscal charges. The City's total governmental expenses increased $3,468,069 from the prior fiscal year.

The change in expenses from prior year is attributable to various factors:

General Government Expenses
General government expenses increased $2,855,064 or 24%. The increase was primarily due to higher inspection and building services activity, reflecting increased construction levels and overall growth in the City.

Public Safety Expenses
Public safety expenses decreased 7% or $1,642,147. The main decrease was due to reduced fire activity, resulting in lower overtime costs.

Public W orks Expenses
Public works expenses increased 32% or $1,873,535 from the prior year. This increase was primarily attributable to higher consulting and engineering service costs resulting from elevated construction activity and continued growth within the City.

Recreation Expenses
Recreation expenses increased 11% or $335,175. This increase was primarily attributable to higher parks maintenance costs, as well as expanded outdoor programs and community events. 10

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CITY OF HOLLISTER

MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
FOR THE YEAR ENDED JUNE 30, 2022
TABLE 3
BUSINESS-TYPE ACTIVITIES CHANGES IN NET POSITION AS OF JUNE 30, 2022
(Restated)
2021

REVENUES
Charges for services $31,818,245 $33,468,624
Investment earnings 125,036 86,319
Operating grants and contributions 53,000 -
Capital grants and contributions 94,377 2,472,547
Other revenues 45,543 55,079
Total Revenue 32,136,201 36,082,569

EXPENSES
Airport 2,181,444 2,104,374
Water 7,798,030 7,950,941
Sewer 15,419,910 19,803,214
Street sweeping 963,219 827,576
Briggs Building 225,432 174,870
Total Expenses 26,588,035 30,860,975
Increase in net position before transfers 5,548,166 5,221,594 Transfers (138,641)(256,062)
Change in net position 5,409,525 4,965,532
Net position - beginning 86,746,851 81,781,319
Net position - ending $92,156,376 $86,746,851
In the fiscal year ended June 30, 2022, business-type activities increased the City's net position by $5,409,525.

Charges for Services
Charges for services decreased $1,650,379 or 5% from the prior fiscal year. This decrease was primarily due to lower water meter charges, reduced water usage charges, and a decline in water connection fees. These decreases were partially offset by an increase in wastewater usage charges and higher sewer treatment connection fees associated with new development.

Investment Earnings
Investment earnings increased $38,717 or 45% primarily due to the implementation of GASB 87, which requires the recognition of interest revenue on lease receivables. This new reporting standard resulted in additional interest earnings recorded during the fiscal year.

Capital grants and contributions
Capital grants and contributions decreased $2,378,170 or 96% this decline is attributatble to the absence of FAA- funded capital project activity in the current fiscal year, whereas the prior year included substantial FAA grant funding.
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CITY OF HOLLISTER

MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
FOR THE YEAR ENDED JUNE 30, 2022
Expenses under the City's water and wastewater enterprise funds were directly attributable to the normal operation costs associated with the operation of both systems. The decrease in Wastewater expenses was primarily due to reduced sludge removal activity, totaling $1,880,140. In addition, the prior-year bad debt expense of $2,891,421 related to San Benito Foods was reversed, as the outstanding balance was fully collected by the issuance date of this financial report.

FINANCIAL ANALYSIS OF FUNDS
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with budgetary and legal requirements.

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

At June 30, 2022, the City’s governmental funds reported combined ending fund balances of $70,469,389.

Approximately 15.7% of this total amount ($11,091,665) constitutes the unassigned fund balance, which may be used to meet the City’s ongoing general obligations to citizens and creditors. The remainder of the fund balance is nonspendable, restricted, or committed to indicate that it is not available for general obligations because it has been committed in the form of inventories, debt service reserves, or the funds have statutory restrictions.

The General Fund is the main operating fund of the City. At June 30, 2022, the unassigned fund balance of the general fund was $14,204,224 while the total fund balance amounted to $15,953,340. As measures of the general fund’s liquidity, it is useful to note that the unassigned fund balance represents 38.2% percent of total fund expenditures, while the total fund balance represents 42.9% percent of that same amount. The general fund’s fund balance increased by $6,925,683 during the current fiscal year. The City's increase of $6,925,683 from the prior fiscal year was due to the significant rise in charges for services, mainly related to construction activity and building and engineering inspection services.

The Housing Successor Agency Fund had a total fund balance of $1,340,007 which is restricted. The overall fund balance increased by $26,845.

The Transportation Development Act fund had a total fund balance of $8,539,950 which is restricted. The overall fund balance increased by $2,744,392 due to Measure G taxes.

The CIP Traffic Impact Fees fund had a total fund balance of $28,495,763 which is restricted. The overall fund balance increased by $4,768,060 due to increases of traffic lane fees from new developments and decrease of payments for road reimbursements.

The following table presents revenues from various sources as well as reflecting increases or decreases from the prior fiscal year in the governmental funds.
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CITY OF HOLLISTER

MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
FOR THE YEAR ENDED JUNE 30, 2022
TABLE 4
REVENUES IN THE GOVERNMENTAL FUNDS (in thousands)
FY 2022 FY 2021 Change
Revenue Sources Amount % of Total Amount % of Total Amount % of Change Taxes $29,842 %44.4 $30,519 %50.4 $(677)%(2.2)
Licenses and permits 14,967 %22.3 10,224 %16.9 4,743 %46.4 Intergovernmental 7,842 %11.7 8,867 %14.6 (1,025)%(11.6) Charges for services 11,935 %17.8 9,366 %15.5 2,569 %27.4 Fines and forfeitures 172 %0.3 153 %0.3 19 %12.4
Investment earnings 593 %0.9 144 %0.2 449 %311.8
Other revenues 1,837 %2.7 1,265 %2.1 572 %45.2
Total $67,188 %100 $60,538 %100 $6,650 %11.0
Significant changes for major revenue sources are explained below:
Taxes – Tax revenues include sales taxes and property taxes. Overall tax revenues decreased, primarily due to a decline in Measure G revenues; however, this was partially offset by an increase in property tax collections. Licenses and permits – Revenues increased significantly due to higher building permit activity and increased traffic impact fees, reflecting overall growth in construction and development. Intergovernmental – The decrease in this source was due to a decrease in transportation funding and decrease in CDBG grant funding.
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CITY OF HOLLISTER

MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
FOR THE YEAR ENDED JUNE 30, 2022
Charges for services – Charges for services increased significantly due to higher park impact fees, engineering inspection charges, plan check fees, and technology and General Plan update fees, reflecting elevated development activity within the City.
Fines and forfeitures – The increase in fines and forfeitures was primarily due to higher collections from vehicle- related fines
Investment earnings – The increase in investment earnings was primarily due to the implementation of GASB 87, which requires the recognition of interest revenue on lease receivables. This new reporting standard resulted in additional interest earnings recorded during the fiscal year. Other revenues – Other revenues increased primarily due to reimbursements during the fiscal year.

The following table presents expenditures by function compared to prior fiscal year's amounts in the governmental funds.

TABLE 5
EXPENDITURES IN THE GOVERNMENTAL FUNDS (in thousands)
FY 2022 FY 2021 Change
Function Amount % of Total Amount % of Total Amount % of Change General government $12,073 %22.7 $8,828 %20.1 $3,245 %36.8 Public safety 22,943 %43.1 20,707 %47.2 2,236 %10.8
Public works 5,958 %11.2 4,403 %10.0 1,555 %35.3
Recreation 2,502 %4.7 2,272 %5.2 230 %10.1
Capital outlay 9,255 %17.4 7,435 %17.0 1,820 %24.5
Debt service 559 %1.0 215 %0.5 344 %160.0
Total $53,290 %100 $43,860 %100 $9,430 %21.5
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CITY OF HOLLISTER

MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
FOR THE YEAR ENDED JUNE 30, 2022
Significant changes for major functions are explained below:
General government – The slight increase in this function was associated with increased expenditures related to regular operations.
Public safety – The increase in this function was driven by the addition of new Fire Department positions, compensation increases from labor negotiations, and a retention bonus in the Police Department. Higher unfunded liability costs and additional Fire Department staffing also contributed to the overall increase. Public works – The increase in this function was primarily attributable to higher consulting engineering costs and an overall increase in professional services.
Recreation – The increase in this function was associated with the increase of programs and community events. Capital outlay – The increase in this function was primarily attributable to improvements along North Street and the acquisition of Fire Department vehicles.

Proprietary funds - The City’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. The funds include the enterprise funds: Airport, Water, Wastewater, Street Sweeping, and Briggs Building operations.
15

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CITY OF HOLLISTER

MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
FOR THE YEAR ENDED JUNE 30, 2022
Unrestricted net position of the Airport fund at the end of the year was $(484,693); Water operations was $3,630,328; Sewer operations was $29,101,251; Street Sweeping operations was $(2,346,801); and for the Briggs Building operation was $341,797. The total change in net position for the five funds was as follows: Airport fund was $(669,195); Water operations was $407,548; Sewer operations was $6,215,641; Street Sweeping operations was $(461,704); and for the Briggs Building operation was $(82,765). The decrease in net position for Street Sweeping and Briggs Building operations was due to collected fees not being sufficient to cover operating costs. The net position for the Airport fund decreased due to a reduction in capital contributions. The net position for the W ater fund increased due to usage increase and new service accounts. The net position for the Sewer fund increased due to increased service accounts for new developments.

GENERAL FUND BUDGETARY HIGHLIGHTS
During the fiscal year, actual revenues were more than budgetary estimates by $9,751,934. This increase was due to the City's increase in property tax, water and sewer usage increase due to new developments, and Measure G taxes. Actual expenditures were more than budgetary estimates by $5,182,641. The increase in expenditures were directly attributable to the increase in services and normal operations costs associated with new developments.

CAPITAL ASSETS AND DEBT ADMINISTRATION
A. Capital Assets
The City’s investment in capital assets for its governmental and business-type activities as of June 30, 2022, amounted to $55,873,565 (net of accumulated depreciation). This investment in capital assets included land, structures and improvements, equipment, right-to-use assets, construction-in-progress, and infrastructure. The total increase in the City’s net investment in capital assets for the current period was 3.3%. The increase resulted from capital grant projects.

Additional information on the City’s capital assets can be found in the Notes to the Financial Statements section of this report in Note 6 – Capital Assets.

Key events affecting capital assets during the fiscal year included the following:
Construction in progress capital assets being constructed for the Airport Fund for runway improvements. For government-wide financial statement presentation, all depreciable capital assets were depreciated from acquisition date to the end of the current fiscal year. Fund financial statements record capital asset purchases as expenditures.

TABLE 6
CAPITAL ASSETS (NET OF DEPRECIATION) (in thousands)
Governmental Activities Business-type Activities Total
2022 2021 2022 2021 2022 2021
Land $750 $750 $5,244 $5,244 $5,994 $5,994
Air rights --1,385 1,385 1,385 1,385
Construction in Progress 3,160 2,354 694 404 3,854 2,758 Buildings 13,130 16,743 3,323 3,593 16,453 20,336
Equipment 3,998 4,725 3,243 3,586 7,241 8,311
Improvements 8,916 8,408 104,540 108,516 113,456 116,924 Infrastructure 25,629 21,867 --25,629 21,867
Right-to-use lease asset 290 246 --290 246
Water rights 290 246 8,894 9,565 9,184 9,811
Total $56,163 $55,339 $127,323 $132,293 $183,486 $187,632 16

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CITY OF HOLLISTER

MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
FOR THE YEAR ENDED JUNE 30, 2022
B. Long-Term Obligations
At June 30, 2022, the City had total long-term obligations outstanding of $70,520,234 consisting of $50,465,000 in bonds, and financed purchase obligations of $3,222,809, and contract payable of $8,978,069. Additional long-term liabilities include bond issuance premium of $5,917,152 and compensated absences payable of $1,937,204.

Additional information on the City’s long-term liabilities can be found in the Notes to the Financial Statements section of this report in Note 7 – Long-Term Liabilities.

ECONOMIC CONDITION, OUTLOOK, AND ACTIVITY
The following economic factors were considered in developing the 2021-2022 annual budget. The Hollister economy, much like the regional and state economies, continued to experience instability due to the ongoing effects of the COVID-19 pandemic. This directly impacted variable revenue sources such as sales taxes, use taxes, and Transient Occupancy Taxes. Any increases in these revenues were considered “one-time” in nature, as they did not necessarily align with typical economic cycles. Sales tax receipts had originally been expected to decline, but with many residents working from home, more purchases were made locally, resulting in stronger-than-expected performance. However, because these increases may not represent long-term trends, a 4% decrease in sales tax collections was budgeted to maintain a conservative outlook.
Potential increases in water and wastewater rates were anticipated, driven by ongoing state and federal regulatory requirements and long-term infrastructure needs. The City planned to undertake a comprehensive rate study to evaluate future adjustments.
The City of Hollister’s property tax revenues continued to stabilize, supported by steady development activity and rising property valuations throughout San Benito County and surrounding communities. Projections assumed modest 2% annual increases, consistent with recent trends. Interest rates remained at historically low levels, which placed downward pressure on the City’s investment earnings. At the same time, lower borrowing costs continued to support discretionary activities such as construction, home renovations, and consumer purchases, providing positive impacts to sales taxes, use taxes, and development-related fees.
The City’s 1% Transaction and Use Tax (Measure W), extended by voters for an additional 20 years, continued to provide a stable and essential revenue stream.
On the expenditure side, increases were expected in health insurance premiums, pension obligations, and other employee benefit costs, particularly as CalPERS projected contribution increases of approximately 4% of payroll to address prior investment losses.
Tourism-related revenues, including Transient Occupancy Tax, remained uncertain due to statewide and regional declines in travel during the pandemic. Activity at newer hotel properties helped stabilize this revenue source, but conservative estimates were maintained given broader economic conditions.

CONTACTING THE CITY'S FINANCIAL MANAGEMENT
These basic financial statements have been prepared in order to provide the citizens, taxpayers, investors, and creditors with financial report which is designed to demonstrate accountability of the City of Hollister government by providing both long-term and near-term views of the City’s finances for the year ended June 30, 2022. Any questions pertaining to this report shall be directed to the City's City Manager at 327 Fifth Street, Hollister, CA 95023. 17

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CITY OF HOLLISTER

STATEMENT OF NET POSITION
JUNE 30, 2022
Governmental
Activities
Business-type
Activities Total
ASSETS
Cash and investments (Note 2)$72,880,268 $34,073,966 $106,954,234 Accounts receivable, net 5,826,026 4,674,328 10,500,354 Interest receivable 40,702 25,021 65,723
Notes receivable, net of allowance (Note 3)11,544,428 -11,544,428 Leases receivable (Note 4)672,891 5,483,353 6,156,244
Internal balances 2,803,966 (2,803,966)-
Prepaid items 83,970 -83,970
Deferred charges, net (Note 7)-128,054 128,054
Restricted cash and investments (Note 2)751,586 407 751,993 Capital assets, net
Non-depreciable (Note 6)3,910,637 7,322,118 11,232,755
Depreciable, net of accumulated depreciation (Note 6)51,962,928 119,999,363 171,962,291 Total Assets 150,477,402 168,902,644 319,380,046

DEFERRED OUTFLOWS OF RESOURCES
2022 Pension contributions (Note 10)4,280,884 562,576 4,843,460 Changes in the net pension liability (Note 10)3,600,895 537,263 4,138,158 Changes in the total OPEB liability (Note 11)2,085,634 335,631 2,421,265 Total Deferred Outflows of Resources 9,967,413 1,435,470 11,402,883

LIABILITIES
Accounts payable 4,338,390 1,108,599 5,446,989
Accrued payroll and benefits 1,023,797 197,670 1,221,467 Interest payable -182,871 182,871
Unearned revenue 139,451 -139,451
Deposits 3,189,018 1,346,187 4,535,205
Long-term liabilities (Note 7)
Due within one year 2,092,365 3,596,803 5,689,168
Due in more than one year 2,712,380 62,118,686 64,831,066 Net pension liability (Note 10)
Due in more than one year 17,466,095 1,616,104 19,082,199 Other postemployment benefits (Note 11)
Due in more than one year 6,170,767 1,065,289 7,236,056 Total Liabilities 37,132,263 71,232,209 108,364,472

DEFERRED INFLOWS OF RESOURCES
Changes in the net pension liability (Note 10)14,230,828 1,350,482 15,581,310 Changes in the total OPEB liability (Note 11)1,080,698 182,981 1,263,679 Leases (Note 4)3,573,076 5,416,066 8,989,142
Total Deferred Inflows of Resources 18,884,602 6,949,529 25,834,131

NET POSITION
Net investment in capital assets 52,697,929 61,914,087 114,612,016 Restricted for:

Debt service -407 407
Community Improvement 410,343 -410,343
Grant programs 9,004,786 -9,004,786
Capital projects 6,486,421 -6,486,421
Housing 1,340,007 -1,340,007
Unrestricted 34,488,464 30,241,882 64,730,346
Total Net Position $104,427,950 $92,156,376 $196,584,326 The accompanying notes are an integral part of these financial statements. 18

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CITY OF HOLLISTER

STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2022
Program Revenues Net (Expense) Revenue and Changes in Net Position Primary Government
Functions/Programs Expenses
Charges for
Services
Operating
Grants and
Contributions
Capital
Grants and
Contributions
Governmental
Activities
Business-
type
Activities Total

PRIMARY GOVERNMENT
Governmental activities:

General government $14,892,463 $8,926,533 $1,092,469 $72,291 $(4,801,170)$-$(4,801,170) Public safety 22,010,532 4,155,123 4,227,717 1,421,491 (12,206,201)-(12,206,201) Public works 7,717,656 11,256,244 122,759 -3,661,347 -3,661,347 Recreation 3,283,808 2,736,357 --(547,451)-(547,451)
Interest and fiscal charges 81,597 ---(81,597)-(81,597) Total governmental activities 47,986,056 27,074,257 5,442,945 1,493,782 (13,975,072)-(13,975,072) Business-type activities:

Airport 2,181,444 1,248,705 53,000 94,377 -(785,362)(785,362) Water 7,798,030 8,207,807 ---409,777 409,777
Sewer 15,419,910 21,728,079 ---6,308,169 6,308,169
Street sweeping 963,219 501,515 ---(461,704)(461,704)
Briggs building 225,432 132,139 ---(93,293)(93,293)
Total business-type activities 26,588,035 31,818,245 53,000 94,377 -5,377,587 5,377,587 Total primary government $74,574,091 $58,892,502 $5,495,945 $1,588,159 $(13,975,072)$5,377,587 $(8,597,485) General revenues:

Property taxes $8,519,501 $44,543 $8,564,044
Sales and use taxes 15,547,574 -15,547,574
Gas taxes 1,808,438 -1,808,438
Other taxes 3,919,089 -3,919,089
Motor vehicle in lieu 47,811 -47,811
Use of money and property 869,104 125,036 994,140
Other revenues 1,434,350 1,000 1,435,350
Transfers 138,641 (138,641)-
Total general revenues and transfers 32,284,508 31,938 32,316,446 Change in net position 18,309,436 5,409,525 23,718,961
Net position - July 1, 2021 86,297,896 86,517,230 172,815,126 Prior period restatement (Note 18)(179,382)229,621 50,239 Net position - July 1, 2021, restated 86,118,514 86,746,851 172,865,365 Net position - June 30, 2022 $104,427,950 $92,156,376 $196,584,326 The accompanying notes are an integral part of these financial statements. 19

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CITY OF HOLLISTER

BALANCE SHEET

GOVERNMENTAL FUNDS
JUNE 30, 2022
General
Fund
Housing
Successor
Agency
CIP Traffic
Impact Fees
Other
Governmental
Funds
Total
Governmental
Funds
ASSETS
Cash and investments $15,026,162 $1,341,516 $28,488,464 $28,024,126 $72,880,268 Restricted cash and investments 751,586 ---751,586
Accounts receivable 4,232,520 1,426 -1,592,080 5,826,026 Interest receivable 9,779 737 15,710 14,476 40,702
Notes receivable, net 563,750 14,992,648 -2,938,454 18,494,852 Leases receivable 672,891 ---672,891
Due from other funds 5,913,733 ---5,913,733
Prepaid items 83,410 560 --83,970
Total Assets $27,253,831 $16,336,887 $28,504,174 $32,569,136 $104,664,028

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES
LIABILITIES:

Accounts payable $3,177,616 $481 $8,411 $1,151,882 $4,338,390 Accrued payroll and benefits 976,490 3,746 -43,561 1,023,797 Deposits payable 3,008,986 --180,032 3,189,018
Due to other funds ---3,109,767 3,109,767
Unearned revenue ---139,451 139,451
Total Liabilities 7,163,092 4,227 8,411 4,624,693 11,800,423

DEFERRED INFLOW S OF
RESOURCES:

Unavailable revenues 564,323 14,992,653 -3,264,164 18,821,140 Leases 3,573,076 ---3,573,076
Total Deferred Inflows of Resources 4,137,399 14,992,653 -3,264,164 22,394,216 FUND BALANCES (DEFICITS):

Nonspendable 83,410 ---83,410
Restricted -1,340,007 28,495,763 27,792,838 57,628,608
Committed 1,665,706 ---1,665,706
Unassigned 14,204,224 --(3,112,559)11,091,665
Total Fund Balances (Deficits)15,953,340 1,340,007 28,495,763 24,680,279 70,469,389 Total Liabilities, Deferred Inflow of
Resources, and Fund Balances $27,253,831 $16,336,887 $28,504,174 $32,569,136 $104,664,028 The accompanying notes are an integral part of these financial statements. 20

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CITY OF HOLLISTER

RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET

TO THE GOVERNMENT-WIDE STATEMENT OF NET POSITION
JUNE 30, 2022
Fund balances - total governmental funds $70,469,389
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 governmental funds.

Governmental capital assets 101,384,601
Less: accumulated depreciation (45,511,036)
Certain notes, loans, and interest receivables are not available to pay for current period expenditures and therefore are offset by deferred inflows of resources in the governmental funds. 11,544,428
Other long-term assets are not available to pay for current period expenditures and therefore are reported as unavailable revenues in the governmental funds. 326,288 Deferred outflows of resources related to 2022 pension contributions were made subsequent to the measurement date. 4,280,884
Deferred outflows of resources related to changes in the net pension liability are not reported in the governmental funds. 3,600,895
Deferred outflows of resources related to changes in the total OPEB liability are not reported in the governmental funds. 2,085,634
Long-term liabilities applicable to the City's governmental activities are not due and payable in the current period and accordingly are not reported in the governmental funds.

Loan and leases payable (3,175,636)
Compensated absences (1,629,109)
Total OPEB liability (6,170,767)
Net pension liability (17,466,095)
Deferred inflows of resources related to changes in the net pension liability (14,230,828) Deferred inflows of resources related to changes in the total OPEB liability (1,080,698) Net position of governmental activities $104,427,950
The accompanying notes are an integral part of these financial statements. 21

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CITY OF HOLLISTER

STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES

GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
General
Fund
Housing
Successor
Agency
CIP Traffic
Impact Fees
Other
Governmental
Funds
Total
Governmental
Funds

REVENUES
Taxes $23,303,905 $-$-$6,538,508 $29,842,413
Licenses and permits 7,334,609 -6,640,442 992,267 14,967,318 Intergovernmental 1,245,412 --6,596,329 7,841,741
Charges for services 8,002,095 --3,933,119 11,935,214
Fines and forfeitures 171,725 ---171,725
Use of money and property 473,731 49,118 35,145 34,732 592,726 Other revenues 676,532 148,382 -1,012,044 1,836,958
Total Revenues 41,208,009 197,500 6,675,587 19,106,999 67,188,095

EXPENDITURES
Current:

General government 11,104,084 149,344 1,746 817,947 12,073,121 Public safety 15,945,893 --6,997,175 22,943,068
Public works 3,989,445 -132,162 1,836,036 5,957,643
Recreation 2,501,968 ---2,501,968
Capital outlay 3,102,137 14,197 1,541,243 4,596,970 9,254,547 Debt service:

Principal 470,514 7,091 --477,605
Interest 81,574 23 --81,597
Total Expenditures 37,195,615 170,655 1,675,151 14,248,128 53,289,549 Excess (deficiency) of revenues over
expenditures 4,012,394 26,845 5,000,436 4,858,871 13,898,546

OTHER FINANCING SOURCES (USES)
Proceeds from financed purchase 2,396,236 ---2,396,236
Transfers in 517,053 ---517,053
Transfers out --(232,376)(146,036)(378,412)
Total Other Financing Sources (Uses)2,913,289 -(232,376)(146,036)2,534,877 Net change in fund balances 6,925,683 26,845 4,768,060 4,712,835 16,433,423 Fund balances - July 1, 2021 9,027,657 1,313,162 23,727,703 19,674,840 53,743,362 Prior period adjustment (Note 18)---292,604 292,604
Fund balances - July 1, 2021 (restated)9,027,657 1,313,162 23,727,703 19,967,444 54,035,966 Fund balances - June 30, 2022 $15,953,340 $1,340,007 $28,495,763 $24,680,279 $70,469,389 The accompanying notes are an integral part of these financial statements. 22

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CITY OF HOLLISTER

RECONCILIATION OF THE

STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES

TO THE STATEMENT OF ACTIVITIES - GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
The schedule below reconciles the net changes in fund balances reported on the governmental funds statement of revenues, expenditures, and changes in fund balances, which measure only changes in current assets and current liabilities on the modified accrual basis, with the changes in net position of governmental activities reported in the statement of activities, which is prepared on the full accrual basis.

Net change in fund balances - total governmental funds $16,433,423 Amounts reported for governmental activities in the statement of activities are different because:

Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of those assets is capitalized and allocated over their estimated useful lives and reported as depreciation expense.

Capital outlay expenditures are therefore added back to fund balances 8,892,614 Depreciation expense not reported in governmental funds (3,755,981) Capital contributions to the City Airport fund (94,377) Debt proceeds provide current financial resources to governmental funds; however issuing debt increases long-term liabilities in the statement of net position. Repayment of debt principal is an expenditure in the governmental funds, but in the statement of net position, the repayment reduces long-term liabilities.

Proceeds from lease liability (135,639)
Proceeds from financed purchase (2,260,597)
Principal payments 477,605
Receipts of payments and disbursements of funds related to notes and loans receivable are reported as revenue and expenditures, respectively, in governmental funds, but an increase and decrease, respectively, in notes receivable in the statement of Net position
Loan program receipts (402,614)
Loans made during the year 268,217
Accrued interest 276,378
Under the modified accrual basis of accounting used in the governmental funds, expenditures are not recognized for transactions that are normally paid with expendable available financial resources. In the statement of activities, however, which is presented on the accrual basis, expenses and liabilities are reported regardless of when financial resources are available (net change).

Compensated absences 243,056
Allowance for notes receivable (1,564,636)
OPEB expense related to changes in the total OPEB liability (430,882) Pension expense related to changes in the net pension liability 1,267,877 Some revenues reported in the statement of activities will not be collected for several months after the City's year-end and do not provide current financial resources and therefore are not reported as revenue in the governmental funds. Some revenues reported in the prior year statement of activities were recognized in the governmental funds in the current year. This is the net change in revenues. (905,008) Change in net position of governmental activities $18,309,436 The accompanying notes are an integral part of these financial statements. 23

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CITY OF HOLLISTER

STATEMENT OF NET POSITION

PROPRIETARY FUNDS
JUNE 30, 2022
Airport Water Sewer
ASSETS
Current Assets
Cash and investments $-$5,659,785 $28,079,072
Accounts receivable, net of allowance 62,896 1,122,080 3,419,548 Interest receivable 5,472 3,115 15,504
Leases receivable, current 586,854 --
Deferred charges, net --128,054
Total Current Assets 655,222 6,784,980 31,642,178
Non-Current Assets
Restricted cash and investments --407
Leases receivable, noncurrent 4,478,689 --
Capital assets, net
Nondepreciable 1,510,584 374,731 5,300,970
Depreciable, net of accumulated depreciation 16,130,971 12,835,821 88,574,785 Total Non-Current Assets 22,120,244 13,210,552 93,876,162 Total Assets 22,775,466 19,995,532 125,518,340

DEFERRED OUTFLOWS OF RESOURCES
2022 Pension contributions -267,786 294,790
Changes in the net pension liability -277,881 259,382
Changes in the total OPEB liability -167,888 167,743
Total Deferred Outflows of Resources -713,555 721,915

LIABILITIES
Current Liabilities
Accounts payable 19,526 654,598 421,293
Accrued payroll and benefits 17,239 64,966 84,338
Interest payable --182,871
Due to other funds 474,924 --
Deposits 45,755 998,986 301,446
Compensated absences - current portion 41,246 66,810 109,882 Long-term liabilities - current portion 1,940 499,188 2,833,570 Total Current Liabilities 600,630 2,284,548 3,933,400
Non-Current Liabilities
Compensated absences - noncurrent portion 7,237 11,723 19,280 Long-term liabilities - noncurrent portion 498 8,501,248 53,570,950 Total OPEB liability -509,526 555,763
Net pension liability -834,950 781,154
Total Non-Current Liabilities 7,735 9,857,447 54,927,147 Total Liabilities 608,365 12,141,995 58,860,547

DEFERRED INFLOWS OF RESOURCES
Changes in the net pension liability -636,705 713,777
Changes in the total OPEB liability -89,943 93,038
Leases 5,012,677 --
Total Deferred Inflows of Resources 5,012,677 726,648 806,815

NET POSITION
Net investment in capital assets 17,639,117 4,210,116 37,471,235 Restricted for debt services --407
Unrestricted (484,693)3,630,328 29,101,251
Total Net Position $17,154,424 $7,840,444 $66,572,893
The accompanying notes are an integral part of these financial statements. 24

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CITY OF HOLLISTER

STATEMENT OF NET POSITION (CONTINUED)

PROPRIETARY FUNDS
JUNE 30, 2022
Street
Sweeping
Briggs
Building Total
ASSETS
Current Assets
Cash and investments $-$335,109 $34,073,966
Accounts receivable, net of allowance 69,804 -4,674,328 Interest receivable -930 25,021
Leases receivable, current -123,654 710,508
Deferred charges, net --128,054
Total Current Assets 69,804 459,693 39,611,877
Non-Current Assets
Restricted cash and investments --407
Leases receivable, noncurrent -294,156 4,772,845
Capital assets, net
Nondepreciable -135,833 7,322,118
Depreciable, net of accumulated depreciation -2,457,786 119,999,363 Total Non-Current Assets -2,887,775 132,094,733
Total Assets 69,804 3,347,468 171,706,610

DEFERRED OUTFLOWS OF RESOURCES
2022 Pension contributions --562,576
Changes in the net pension liability --537,263
Changes in the total OPEB liability --335,631
Total Deferred Outflows of Resources --1,435,470

LIABILITIES
Current Liabilities
Accounts payable 4,519 8,663 1,108,599
Accrued payroll and benefits 31,127 -197,670
Interest payable --182,871
Due to other funds 2,329,042 -2,803,966
Deposits --1,346,187
Compensated absences - current portion 44,167 -262,105
Long-term liabilities - current portion --3,334,698
Total Current Liabilities 2,408,855 8,663 9,236,096
Non-Current Liabilities
Compensated absences - noncurrent portion 7,750 -45,990 Long-term liabilities - noncurrent portion --62,072,696 Total OPEB liability --1,065,289
Net pension liability --1,616,104
Total Non-Current Liabilities 7,750 -64,800,079
Total Liabilities 2,416,605 8,663 74,036,175

DEFERRED INFLOWS OF RESOURCES
Changes in the net pension liability --1,350,482
Changes in the total OPEB liability --182,981
Leases -403,389 5,416,066
Total Deferred Inflows of Resources -403,389 6,949,529

NET POSITION
Net investment in capital assets -2,593,619 61,914,087
Restricted for debt services --407
Unrestricted (2,346,801)341,797 30,241,882
Total Net Position $(2,346,801)$2,935,416 $92,156,376
The accompanying notes are an integral part of these financial statements. 25

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CITY OF HOLLISTER

STATEMENT OF REVENUE, EXPENSES AND CHANGES IN NET POSITION

PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
Airport Water Sewer

OPERATING REVENUES
Charges for services $1,248,705 $8,207,807 $21,728,079
Grant revenues 53,000 --
Other revenues 1,000 --
Total Operating Revenue 1,302,705 8,207,807 21,728,079

OPERATING EXPENSES
Personnel services 537,518 1,899,226 2,198,461
Contractual and professional services 120,815 3,498,617 2,524,264 Supplies and operating costs 299,078 901,818 3,201,107
Utilities 68,588 221,879 1,706,240
Depreciation 1,155,301 897,271 3,876,666
Total Operating Expenses 2,181,300 7,418,811 13,506,738 Operating Income (Loss)(878,595)788,996 8,221,341

NON-OPERATING REVENUES (EXPENSES)
Taxes 44,543 --
Investment income 70,624 7,152 36,732
Interest expense (144)(379,219)(1,913,172)
Total Non-Operating Revenues (Expenses)115,023 (372,067)(1,876,440) Income (Loss) Before Transfers & Capital Contributions (763,572)416,929 6,344,901

TRANSFERS & CAPITAL CONTRIBUTIONS
Transfers out -(9,381)(129,260)
Capital contributions 94,377 --
Total Transfers & Capital Contributions 94,377 (9,381)(129,260) Change in Net Position (669,195)407,548 6,215,641
Total Net Position - July 1, 2021 17,823,619 7,203,275 60,357,252 Prior Period Adjustment (Note 18) -229,621 -
Total Net Position - July 1, 2021 Restated 17,823,619 7,432,896 60,357,252 Total Net Position - June 30, 2022 $17,154,424 $7,840,444 $66,572,893 The accompanying notes are an integral part of these financial statements. 26

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CITY OF HOLLISTER

STATEMENT OF REVENUE, EXPENSES AND CHANGES IN NET POSITION (CONTINUED)

PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
Street
Sweeping
Briggs
Building Total

OPERATING REVENUES
Charges for services $501,515 $132,139 $31,818,245
Grant revenues --53,000
Other revenues --1,000
Total Operating Revenue 501,515 132,139 31,872,245

OPERATING EXPENSES
Personnel services 750,598 489 5,386,292
Contractual and professional services 56,505 29,158 6,229,359 Supplies and operating costs 152,432 53,937 4,608,372
Utilities 3,684 22,249 2,022,640
Depreciation -119,599 6,048,837
Total Operating Expenses 963,219 225,432 24,295,500
Operating Income (Loss)(461,704)(93,293)7,576,745

NON-OPERATING REVENUES (EXPENSES)
Taxes --44,543
Investment income -10,528 125,036
Interest expense --(2,292,535)
Total Non-Operating Revenues (Expenses)-10,528 (2,122,956) Income (Loss) Before Transfers & Capital Contributions (461,704)(82,765)5,453,789

TRANSFERS & CAPITAL CONTRIBUTIONS
Transfers out --(138,641)
Capital contributions --94,377
Total Transfers & Capital Contributions --(44,264)
Change in Net Position (461,704)(82,765)5,409,525
Total Net Position - July 1, 2021 (1,885,097)3,018,181 86,517,230 Prior Period Adjustment (Note 18) --229,621
Total Net Position - July 1, 2021 Restated (1,885,097)3,018,181 86,746,851 Total Net Position - June 30, 2022 $(2,346,801)$2,935,416 $92,156,376 The accompanying notes are an integral part of these financial statements. 27

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CITY OF HOLLISTER

STATEMENT OF CASH FLOWS

PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
Airport Water Sewer

CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts from customers $1,164,916 $8,807,356 $19,801,163 Cash receipts from operating grants 53,000 --
Cash paid to suppliers for goods and services (490,364)(4,350,788)(7,721,576) Cash paid to employees (593,592)(1,766,353)(2,020,269)
Net Cash Provided by (Used for) Operating
Activities 133,960 2,690,215 10,059,318

CASH FLOWS FROM NONCAPITAL FINANCING

ACTIVITIES
Transfers out -(9,381)(129,260)
Interfund loan payments received --1,356,010
Interfund loan payments made (208,258)-(1,356,010)
Taxes 44,543 --
Net Cash Provided by (Used for) Noncapital
Financing Activities (163,715)(9,381)(129,260)

CASH FLOWS FROM CAPITAL AND RELATED

FINANCING ACTIVITIES
Principal paid on capital debt (1,861)(480,184)(2,321,269) Interest paid on capital debt (144)(379,219)(1,922,776) Bond issuance costs --(388,095)
Acquisition and construction of capital assets (33,076)(228,962)(703,064) Net Cash Used for Capital and Related Financing
Activities (35,081)(1,088,365)(5,335,204)

CASH FLOWS FROM INVESTING ACTIVITIES
Interest and dividends received 64,836 5,493 29,619
Net Cash Provided by Investing Activities 64,836 5,493 29,619 Net Increase in Cash and Cash Equivalents -1,597,962 4,624,473 Cash and Cash Equivalents - July 1, 2021 -4,061,823 23,455,006 Cash and Cash Equivalents - June 30, 2022 $-$5,659,785 $28,079,479

RECONCILIATION OF CASH AND CASH EQUIVALENTS

TO THE STATEMENT OF NET POSITION
Cash and investments $-$5,659,785 $28,079,072
Restricted cash and investments --407
Total Cash and Investments $-$5,659,785 $28,079,479
Non-Cash Investing and Financing Activities
Capital contributions $94,377 $-$-
The accompanying notes are an integral part of these financial statements. 28

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CITY OF HOLLISTER

STATEMENT OF CASH FLOWS (CONTINUED)

PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
Airport Water Sewer

RECONCILIATION OF OPERATING INCOME (LOSS)

TO NET CASH PROVIDED BY (USED FOR)
OPERATING ACTIVITIES:

Operating Income (Loss)$(878,595)$788,996 $8,221,341
Adjustments to reconcile operating income (loss)
to net cash provided by (used for) operating activities:

Depreciation expense 1,155,301 897,271 3,876,666
Amortization of lease receivable 409,700 --
Deferred inflows - leases (462,566)--
Pension and OPEB expense -134,909 151,551
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (44,896)(60,850)(1,962,907) Increase (decrease) in accounts payable (1,883)271,526 (289,965) Increase in deposits payable 12,973 660,399 35,991
Increase in accrued wages 7,520 46,685 50,074
Decrease in compensated absences (63,594)(48,721)(23,433) Net Cash Provided by (Used for) Operating Activities $133,960 $2,690,215 $10,059,318 The accompanying notes are an integral part of these financial statements. 29

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CITY OF HOLLISTER

STATEMENT OF CASH FLOWS (CONTINUED)

PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
Street
Sweeping
Briggs
Building Total

CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts from customers $497,964 $117,718 $30,389,117 Cash receipts from operating grants --53,000
Cash paid to suppliers for goods and services (214,550)(100,139)(12,877,417) Cash paid to employees (727,918)(489)(5,108,621)
Net Cash Provided by (Used for) Operating
Activities (444,504)17,090 12,456,079

CASH FLOWS FROM NONCAPITAL FINANCING

ACTIVITIES
Transfers out --(138,641)
Interfund loan payments received 444,504 -1,800,514
Interfund loan payments made --(1,564,268)
Taxes --44,543
Net Cash Provided by (Used for) Noncapital
Financing Activities 444,504 -142,148

CASH FLOWS FROM CAPITAL AND RELATED

FINANCING ACTIVITIES
Principal paid on capital debt --(2,803,314)
Interest paid on capital debt --(2,302,139)
Bond issuance costs --(388,095)
Acquisition and construction of capital assets -(18,233)(983,335) Net Cash Used for Capital and Related Financing
Activities -(18,233)(6,476,883)

CASH FLOWS FROM INVESTING ACTIVITIES
Interest and dividends received -9,714 109,662
Net Cash Provided by Investing Activities -9,714 109,662 Net Increase in Cash and Cash Equivalents -8,571 6,231,006 Cash and Cash Equivalents - July 1, 2021 -326,538 27,843,367 Cash and Cash Equivalents - June 30, 2022 $-$335,109 $34,074,373

RECONCILIATION OF CASH AND CASH EQUIVALENTS

TO THE STATEMENT OF NET POSITION
Cash and investments $-$335,109 $34,073,966
Restricted cash and investments --407
Total Cash and Investments $-$335,109 $34,074,373
Non-Cash Investing and Financing Activities
Capital contributions $-$-$94,377
The accompanying notes are an integral part of these financial statements. 30

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CITY OF HOLLISTER

STATEMENT OF CASH FLOWS (CONTINUED)

PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
Street
Sweeping
Briggs
Building Total

RECONCILIATION OF OPERATING INCOME (LOSS)

TO NET CASH PROVIDED BY (USED FOR)
OPERATING ACTIVITIES:

Operating Income (Loss)$(461,704)$(93,293)$7,576,745
Adjustments to reconcile operating income (loss)
to net cash provided by (used for) operating activities:

Depreciation expense -119,599 6,048,837
Amortization of lease receivable -117,718 527,418
Deferred inflows - leases -(132,139)(594,705)
Pension and OPEB expense --286,460
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (3,551)-(2,072,204) Increase (decrease) in accounts payable (1,929)5,205 (17,046) Increase in deposits payable --709,363
Increase in accrued wages 19,008 -123,287
Decrease in compensated absences 3,672 -(132,076)
Net Cash Provided by (Used for) Operating Activities $(444,504)$17,090 $12,456,079 The accompanying notes are an integral part of these financial statements. 31

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CITY OF HOLLISTER

STATEMENT OF FIDUCIARY NET POSITION

FIDUCIARY FUNDS
JUNE 30, 2022
Private-
Purpose Trust
Fund
Custodial
Funds
ASSETS
Cash and investments (Note 2)$2,431,193 $2,543,229
Restricted cash and investments (Note 2)2,169,757 198,374 Accounts receivable -13,573
Interest receivable 1,338 1,395
Notes receivable, net 1,796,637 -
Land held for resale 4,120,864 -
Total Assets 10,519,789 2,756,571

LIABILITIES
Accounts payable -71,982
Accrued liabilities -2,547
Interest payable 273,361 -
Long-term liabilities, net of premium/discount 26,978,519 - Total Liabilities 27,251,880 74,529

NET POSITION
Held in trust for private purposes (16,732,091)-
Restricted for:

Individuals, organizations, and other governments -2,682,042 Total Net Position $(16,732,091)$2,682,042
The accompanying notes are an integral part of these financial statements. 32

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CITY OF HOLLISTER

STATEMENT OF CHANGES IN FIDUCIARY NET POSITION

FIDUCIARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
Private-
Purpose Trust
Fund
Custodial
Funds

ADDITIONS
Property taxes $3,165,146 $1,542,280
Investment earnings 28,306 2,801
Other revenues -19,561
Total Additions 3,193,452 1,564,642

DEDUCTIONS
Contractual services 14,506 5,048
Operating costs 250,049 617,262
Debt service:

Principal -170,000
Interest 881,671 19,238
Total Deductions 1,146,226 811,548
Change in Fiduciary Net Position 2,047,226 753,094
Fiduciary Net Position - July 1, 2021 (18,779,317)1,928,948 Fiduciary Net Position - June 30, 2022 $(16,732,091)$2,682,042 The accompanying notes are an integral part of these financial statements. 33

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CITY OF HOLLISTER

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City of Hollister was incorporated in 1872. The City is a general law City located in San Benito County, located 100 miles southeast of San Francisco and 40 miles east of Monterey. The City provides the following services: public safety (police and fire), highways and streets, health and social services, culture recreation, public improvements, planning and zoning, and general administrative services. The City’s powers are exercised through a City Council under a Council Manager form of government with five elected Council members served by a full time City Manager and staff, which, as the governing body of the City, is responsible for the legislative and executive control of the City.

The financial statements and accounting policies of the City conform with generally accepted accounting principles applicable to governments. The Governmental Accounting Standards Board (GASB) is the accepted standard- setting body for establishing governmental accounting and financial reporting principles. Significant accounting policies are summarized below:

A. The Reporting Entity
The accompanying financial statements present the financial activities of the City along with the financial activities of its blended component unit, which is an entity for which the City is financially accountable. Together, these entities comprise the primary government for reporting purposes. Although they are separate legal entities, blended component units are in substance part of the City's operations and are reported as an integral part of the City's financial statements. The City's component unit, which is described below, is blended.

Hollister Joint Powers Financing Authority
The Hollister Joint Powers Financing Authority (the "Authority") was created by a joint exercise powers agreement dated as of December 1, 1989 by and between the City and the former Redevelopment Agency of the City of Hollister. The Authority was created for the purpose of facilitating the financing of public capital improvements and facilities for the City and former Redevelopment Agency. The joint exercise of powers agreement has been amended and restated as of October 1, 2015, by and among the City, the Successor Agency to the Redevelopment Agency, and the Hollister Industrial Development Authority. The City Council acts as the governing board in a concurrent session, as necessary. No separate financial statements are issued for the Authority.

B. Basis of Presentation
The City's basic financial statements are prepared in conformity with accounting principles generally accepted in the United States of America. The Government Accounting Standards Board is the acknowledged standard setting body for establishing accounting and financial reporting standards followed by governmental entities in the United States of America. These standards require that the financial statements described below be presented.

Government-wide Financial Statements
The Statement of Net Position and Statement of Activities display information about the primary government (the City). These statements include the financial activities of the overall City government except for fiduciary activities.

Eliminations have been made to minimize the double counting of internal activities. These statements distinguish between the governmental and business-type activities of the City. The City's net position is reported in three parts - net investment in capital assets; restricted net position; and unrestricted net position. The City first utilizes restricted resources to finance qualifying activities. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange revenues. Business-type activities are financed in whole or in part by fees charged to external parties for goods or services.

The Statement of Activities presents a comparison between direct expenses and program revenues for each segment of the business-type activities of the City and for each function of the City's governmental activities. Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Program revenues include (a) fees, fines, and charges paid by the recipients of goods or services offered by the programs, (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program and (c) fees, grants and contributions that are restricted to financing the acquisition or construction of capital assets. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues. Interfund services provided and used are not eliminated in consolidation. 34

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CITY OF HOLLISTER

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fund Financial Statements
The fund financial statements provide information about the City’s funds, including fiduciary funds and its blended component units. Each fund is accounted for by providing a separate set of self-balancing accounts that constitute its assets, deferred outflows of resources, liabilities, deferred inflows of resources, fund equity, revenues and expenditure/expenses. Funds are organized into three major categories: governmental, proprietary, and fiduciary. An emphasis is placed on major funds within the governmental and proprietary categories with each major fund displayed in a separate column. All remaining governmental funds are separately aggregated and reported as other governmental funds.

Proprietary fund operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially equal values. Nonoperating revenues, such as subsidies and investment earnings, result from nonexchange transactions or ancillary activities.

GASB Statement No. 34 defines major funds and requires that the City’s major governmental and proprietary funds are identified and presented separately in the fund financial statements. All other funds, called nonmajor funds, are combined and reported in a single column, regardless of their fund-type.

Major funds are defined as funds that have assets and deferred outflows of resources, liabilities and deferred inflows of resources, revenues, or expenditures/expenses equal to or greater than ten percent of their fund-type total and five percent of all fund-type totals. The General Fund is always a major fund. The City may also select other funds it believes should be presented as major funds.

The City reports the following major governmental funds in the accompanying financial statements:
The General Fund is used to account for all revenues and expenditures necessary to carry out basic governmental activities of the City that are not accounted for through other funds. For the City, the General Fund includes such activities as general government, public safety, public works, and recreation. The Housing Successor Agency Fund was created as a result of the dissolution of the Redevelopment Agency of the City of Hollister and the City of Hollister's election to serve as the Housing Successor Agency. The major source of revenue for the fund is from program revenue received from the repayment of housing loans. The CIP Traffic Impact Fees Fund was established as depositories for traffic development impact fees. The fees are levied against all new development in the City in order to pay for traffic construction or improvements as a result of City growth.

The City reports the following major enterprise funds:
The Airport Fund was established to account for the City’s costs of providing airport services to the citizens of the City of Hollister.
The Water Fund was established to account for the City’s costs of providing water services to the citizens of the City of Hollister.
The Sewer Fund was established to account for the City’s costs of providing sewer services to the citizens of the City of Hollister. See pages 147 for combining sewer fund financial statements. The Street Sweeping Fund was established to account for the City’s costs of providing street sweeping services to the citizens of the City of Hollister.
The Briggs Building Fund was established to account for the City’s costs of running the Briggs Building. 35

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CITY OF HOLLISTER

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) The City reports the following additional fund types:
The Private Purpose Trust Fund is a fund used to report all other trust arrangements under which principal and interest benefit individuals, private organizations, or other governments. This fund was created as a result of the State order to dissolve California Redevelopment Agencies. As the Successor Agency, this fund is used to track the activity by the Oversight Board and the Department of Finance to dissolve the Agency. The Custodial Funds are custodial in nature and used to report fiduciary activities that are not required to be reported in pension (and other employee benefit) trust funds, investment trust funds, or private-purpose trust funds. These funds account for resources held by the City as an agent for the Tricentennial, Veterans, Helen Ross Memorial, and local assessment districts.

C. Measurement Focus and Basis of Accounting
Measurement focus is a term used to describe "which" transactions are recorded within the various financial statements. Basis of accounting refers to "when" revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements regardless of the measurement focus applied.

Measurement Focus
On the government-wide Statement of Net Position and the Statement of Activities, both governmental and business-type activities are presented using the economic resources measurement focus as defined in item "b" below. In the fund financial statements, the "current financial resources" measurement focus or the "economic resources" measurement focus is used as appropriate:
a. All governmental funds are accounted for using a "current financial resources" measurement focus. With this measurement focus, only current assets and current liabilities generally are included on their balance sheets.

Their operating statements present sources and uses of available spendable financial resources during a given period. These funds use fund balance as their measure of available spendable financial resources at the end of the period.
b. All proprietary funds utilize an "economic resources" measurement focus. The accounting objectives of this measurement focus are the determination of operating income, changes in net position (or cost recovery), financial position, and cash flows. All assets and deferred outflows of resources and all liabilities and deferred inflows of resources (whether current or noncurrent) associated with the operation of these funds are reported. Proprietary fund equity is classified as net position. c. Custodial funds use the "economic resources" measurement focus and the accrual basis of accounting.

Basis of Accounting
In the government-wide Statement of Net Position and Statement of Activities, both governmental and business-type activities are presented using the accrual basis of accounting. In addition, all fiduciary funds use the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred or economic asset is used. Revenues, expenses, gains, losses, assets and liabilities resulting from exchange and exchange-like transactions are recognized when the exchange takes place.

In the fund financial statements, governmental funds are presented on the modified accrual basis of accounting.

Under the modified accrual basis of accounting, revenues are recognized when "measurable and available." Measurable means knowing or being able to reasonably estimate the amount. Available means collectible within the current period or soon enough thereafter to pay current liabilities. The City defines available to be within 60 days of year-end. Expenditures (including capital outlay) are recorded when the related fund liability is incurred, except for general obligation bond principal and interest which are reported when due. Governmental capital asset acquisitions are reported as expenditures in governmental funds. Proceeds for governmental long-term liabilities and acquisitions under capital leases are reported as other financing sources. 36

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CITY OF HOLLISTER

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Those revenues susceptible to accrual include taxes, intergovernmental revenues, interest and charges for services.

Certain indirect costs are included in program expenses reported for individual functions and activities.

Grant revenues are recognized in the fiscal year in which all eligibility requirements are met. Under the terms of grant agreements, the City may fund certain programs with a combination of cost-reimbursement grants, categorical block grants, and general revenues. Thus, both restricted and unrestricted net position are available to finance program expenditures. The City's policy is to first apply restricted grant resources to such programs, followed by general revenues if necessary.

All proprietary funds utilize the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred or economic asset is used.

Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary funds' principal operations. The principal operating revenues of the enterprise funds are charges to customers for sales and services. Operating expenses for enterprise funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the City's policy to use restricted resources first, then unrestricted resources as they are needed.

D. Property Taxes
Property taxes in the State of California (State) are administered for all local agencies at the county level, and consist of secured, unsecured and utility tax rolls. The following is a summary of major policies and practices relating to property taxes:

Property Valuation: Valuations are established by the Assessor of the County of San Benito (County) for the secured and unsecured property tax rolls; the utility property tax roll is valued by the State Board of Equalization.

Under the provisions of Article XIIIA of the State Constitution (Proposition 13 adopted by the voters on June 6, 1978), properties are assessed at 100% of full value. Proposition 13 also modified the value of taxable real property for fiscal 1979 by rolling back values to fiscal 1976 levels. From this base of assessment, subsequent annual increases in valuation are limited to a maximum of 2%. However, increases to full value are allowed for property improvements or upon change in ownership. Personal property is excluded from these limitations and is subject to annual reappraisal.

Tax Levies: Under the provisions of Proposition 13, the County-wide tax levy for general revenue purposes is limited to 1% of full market value, which results in a tax rate of $1.00 per $100 assessed valuation. Tax rates for voter- approved indebtedness are excluded from this limitation.

Tax Levy Dates: All lien dates attach annually on January 1 proceeding the fiscal year for which the taxes are levied. The fiscal year begins July 1 and ends June 30 of the following year. Taxes are levied on both real and unsecured personal property as it exists at that time. The lien against real estate as well as the tax on personal property is not relieved by subsequent renewal or change in ownership.

Tax Collections: The County Treasurer/Tax Collector is responsible for all property tax collections. Taxes and assessments on the secured and utility rolls, which constitute a lien against the property, may be paid in two installments: the first installment is due on November 1 of the fiscal year and is delinquent if not paid by December 10; and the second installment is due on March 1 of the fiscal year and is delinquent if not paid by April 10.

Unsecured personal property taxes do not constitute a lien against real property. However, if the taxes become delinquent the lien is attached against anything the individual owns, which could include real property. Payment must be made in one installment, which is delinquent if not paid by August 31 of the fiscal year. Significant penalties are imposed by the County for late payments.
37

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CITY OF HOLLISTER

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Teeter Plan: In 1993-94, the City elected to receive property tax revenue in accordance with the alternative method of distribution prescribed by Sections 4701-4717 of the California Revenue and Taxation Code, which is commonly known as the “Teeter Plan” whereby the County remits 100% of taxes levied without regard to delinquencies. The County then pursues collection, retaining any delinquent taxes and related penalties and interest.

Tax Levy Apportionments: Due to the nature of the County-wide maximum levy, it is not possible to identify general purpose tax rates for specific entities. Under State legislation adopted subsequent to the passage of Proposition 13, apportionments to local agencies are made by the County Auditor-Controller based primarily on two factors: the ratio that each agency represented of the total County-wide levy for the three years prior to fiscal 1979; and subsequent adjustments to these apportionments and transfers to the “Educational Revenue Augmentation Fund” (ERAF) as determined by the State.

City Property Tax Distribution Policy: Property taxes are recorded in the General Fund as general purpose revenue. Transfers are made from the General Fund as needed to support expenditures in the Capital Outlay and Debt Service Funds. Property taxes receivable at June 30, 2022 are generally insignificant but have been accrued since they will be collected within 60 days subsequent to year-end.

E. Cash and Investments
The City maintains a cash and investment pool that is available for use by all funds. Each fund's portion of this pool is displayed on the combined balance sheet as cash and investments. Investments held at June 30, 2022 with original maturities greater than one year are stated at fair value. Fair value is estimated based on quoted market prices at year end. All investments not required to be stated at fair value are stated at cost or amortized cost.

For purposes of the statement of cash flows, the proprietary funds consider all highly liquid investments with a maturity of three months or less and pooled cash when purchased to be cash equivalents.

F. Accounts and Interest Receivable
In the government-wide statements, receivables consist of all revenues earned at year-end and not yet received.

Receivables are recorded in the financial statements net of any allowance for doubtful accounts. Major receivable balances for the governmental activities include sales and use taxes, franchise taxes, grants, police fines and other fees. Business-type activities report rental fees, charges for services, and interest earnings as their major receivables.

In the fund financial statements, material receivables in governmental funds include revenue accruals such as sales tax, franchise tax, and grants and other similar intergovernmental revenues since they are usually both measurable and available. Nonexchange transactions collectible but not available are recorded as deferred inflows of resources in the fund financial statements in accordance with modified accrual, but are not deferred in the government-wide financial statements in accordance with the accrual basis. Interest and investment earnings are recorded when earned only if paid within 60 days since they would be considered both measurable and available. Long-term notes in governmental funds are treated as expenditures in the year advanced and as revenues in the year repayment is measurable and available. Notes receivable are recorded in the fund statements, but are offset by deferred inflows of resources to indicate they do not represent current financial resources. Proprietary fund material receivables consist of all revenues earned at year-end and not yet received. Rental fees, charges for services, and interest earnings compose the majority of proprietary fund receivables.

G. Prepaid Items and Inventory
Inventories are stated at cost (average cost per unit) for governmental and proprietary funds. The cost is recorded as an expenditure/expense in the funds at the time individual inventory items are consumed, rather than purchased.

Inventories of governmental funds are offset by nonspendable fund balance to indicate they do not constitute resources available for future appropriation.

Prepaid items are also recognized under the consumption method. Payments to vendors that reflect costs applicable to future accounting periods are recorded as prepaid items in both government-wide and fund financial statements. 38

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CITY OF HOLLISTER

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) H. Capital Assets
Capital assets (including infrastructure) are recorded at historical cost or estimated historical cost if actual historical cost is not available. Donated capital assets, donated works of art and similar items, and capital assets received in a service concession arrangement are reported at acquisition value rather than fair value. Capital assets include public domain (infrastructure) general capital assets consisting of certain improvements including roads, bridges, water/sewer, lighting system, drainage systems, and flood control. The City defines capital assets excluding infrastructure as assets with an initial, individual cost of more than $20,000 and an estimated useful life in excess of one year. Infrastructure assets with a historical cost of $250,000 or more are accounted for as capital assets. Capital assets used in operations are depreciated or amortized (assets under capital leases) using the straight-line method over the lesser of the capital lease period or their estimated useful lives in the government-wide statements and the proprietary funds.

The range of estimated useful lives by type of asset is as follows:

Buildings 20 - 50 years
Water and Sewer System 30 - 50 years
Infrastructure 20 - 35 years
Machinery and Equipment 5 - 10 years
Improvements 20 years
Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during construction phase of debt financed capital assets is included as part of the capitalized value of the asset constructed.

I. Compensated Absences
The liability for compensated absences is comprised of unused vacation leave and compensatory time off, which are accrued as earned. In addition, those employees with 10 years of service may cash out sick leave up to a City maximum upon termination. The liability has been calculated using the vesting method, in which leave amounts for both employees who currently are eligible to receive termination payments and other employees who are expected to become eligible in the future to receive such payments upon termination are included.

J. Long-Term Liabilities
In the government-wide financial statements and the proprietary fund financial statements, long-term liabilities, and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund statement of net position. Initial issue bond premiums and discounts, are deferred and amortized over the life of the bonds using the straight-line method. The difference between the reacquisition price of refunding bonds and the net carrying amount of refunded debt (deferred amount on refunding) is amortized over the shorter of the lives of the refunding debt or remaining life of the refunded debt. Bond issuance costs, except for insurance, are expensed in the period incurred. Amortization of bond premiums or discounts, insurance costs, and deferred amounts on refunding are included in interest expense.

In the fund financial statements, governmental funds recognize bond premiums, discounts, and issuance costs during the period issued. The face amount of debt issued is reported as other financing sources. Premiums received are reported as other financing sources, while discounts are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. 39

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NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) K. Leases
Lessee
The City is a lessee for several noncancellable leases for land and buildings. The City recognizes a lease liability and an intangible right-to-use lease asset (lease asset) in the financial statements.

At the commencement of a lease, the City initially measures the lease liability at the present value of payments expected to be made during the lease term. Subsequently, the lease liability is reduced by the principal portion of lease payments made. The lease asset is initially measured as the initial amount of the lease liability, adjusted for lease payments made at or before the lease commencement date, plus certain initial direct costs. Subsequently, the lease asset is amortized on a straight-line basis over its useful life.

Key estimates and judgments related to leases include how the City determines (1) the discount rate it uses to discount the expected lease payments to present value, (2) lease term, and (3) lease payments. The City uses the interest rate charged by the lessor as the discount rate. W hen the interest rate charged by the lessor is not provided, the City generally uses its estimated incremental borrowing rate as the discount rate for leases.
The lease term includes the noncancellable period of the lease. Lease payments included in the measurement of the lease liability are composed of fixed payments and purchase option price that the City is reasonable certain to exercise.

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

Lease assets are reported with other capital assets and lease liabilities are reported with long-term liabilities on the statement of net position.

Lessor
The City is a lessor for noncancellable leases for land, buildings, and, cell tower sites. The City recognizes a lease receivable and a deferred inflow of resources in the government-wide, governmental fund and proprietary fund financial statements.

At the commencement of a lease, the City initially measures the lease receivable at the present value of payments expected to be received during the lease term. Subsequently, the lease receivable is reduced by the principal portion of lease payments received. The deferred inflow of resources is initially measured as the initial amount of the lease receivable, adjusted for lease payments received at or before the lease commencement date. Subsequently, the deferred inflow of resources is recognized as revenue over the life of the lease term.

Key estimate and judgments include how the City determines (1) the discount rate it uses to discount the expected lease receipts to present value, (2) lease term, and (3) lease receipts. The City uses its estimated incremental borrowing rate as the discount rate for leases. The lease term includes the noncancellable period of the lease. Lease receipts included in the measurement of the lease receivable is composed of fixed payments from the lessee.

The City monitors changes in circumstances that would require a remeasurement of its lease, and will remeasure the lease receivable and deferred inflows of resources if certain changes occur that are expected to significantly affect the amount of the lease receivable.
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NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) L. Deferred Outflows/Inflows of Resources
In addition to assets, the statement of net position or balance sheet, will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net assets or fund balance that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then.

In addition to liabilities, the statement of net position or balance sheet, 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 assets or fund balance that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time.

M. Pensions
For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the City’s California Public Employees’ Retirement System (CalPERS) plan (the Plan) and additions to/deductions from the Plans’ fiduciary net position have been determined on the same basis as they are reported by CalPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.

N. Other Postemployment Benefits (OPEB)
The City provides health care, life insurance, dental insurance, and disability income to eligible retirees, terminated employees, and their dependents. The benefits are provided in accordance with City ordinances, collective bargaining agreements, and the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). The criteria to determine eligibility include: years of service, employee age, disability due to line of duty, and whether the employee has vested in the respective retirement plan. Currently, the City funds the benefits on a pay-as-you-go basis. Eligible employees are required to pay set premiums for a portion of the cost with the City subsidizing the remaining costs.

See Note 11 for further information.

For the purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the City's plan (OPEB Plan) and additions to/deductions from the OPEB Plan's fiduciary net position have been determined on the same basis. For this purpose, benefit payments are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value.

Generally accepted accounting principles require that the reported results must pertain to liabilities and asset information with certain defined timeframes. For this report, the following timeframes are used:

Valuation Date June 30, 2021
Measurement Date June 30, 2021
Measurement Period July 1, 2020 to June 30, 2021
O. Interfund Transactions
Interfund transactions are reflected as either loans, services provided, reimbursements, or transfers. Loans are reported as receivables and payables as appropriate, are subject to elimination upon consolidation and 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 noncurrent portion of interfund loans). Any residual balances outstanding between the governmental activities and the business-type 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 fund balance reserve account in applicable governmental funds to indicate that they are not available for appropriation and are not available financial resources.
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JUNE 30, 2022
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Services provided, deemed to be at market or near market rates, are treated as revenues and expenditures/expenses. Reimbursements are when one fund incurs a cost, charges the appropriate benefiting fund, and reduces its related cost as a reimbursement. All other interfund transactions are treated as transfers. Transfers between governmental or proprietary funds are netted as part of the reconciliation to the government-wide presentation.

P. Equity Classifications
Government-wide Statements
Net position is the excess of all the City's assets and deferred outflows of resources over all its liabilities and deferred inflows of resources, regardless of fund. Net position is divided into three categories. These categories apply only to net position, which is determined at the government-wide level, and are described below:
Net Investment in Capital Assets – Consists of capital assets including restricted capital assets, net of accumulated depreciation and reduced by the outstanding balances of any bonds, mortgages, notes or other borrowings that are attributable to the acquisition, construction, or improvement of those assets. Restricted Net Position – Consists of net position with constraints place on the use either by (1) external groups such as creditors, grantors, contributors, or laws or regulations of other governments; or (2) law through constitutional provisions or enabling legislation.
Unrestricted Net Position – All other net position that do not meet the definition of "restricted" or "net investment in capital assets."
Fund Statements
The governmental fund financial statements present fund balances based on classifications that comprise a hierarchy that is based primarily on the extent to which the City is bound to honor constraints on the specific purposes for which amounts in the respective governmental funds can be spent. The classifications used in the governmental fund financial statements are as follows:
Nonspendable - Amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact.
Restricted - Amounts that are restricted for specific purposes when constraints placed on the use of resources are either (a) externally imposed by creditors, grantors, contributors, laws, or regulations of other governments; or (b) imposed by law through constitutional provisions or enabling legislation. Committed - Amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the government's highest level of decision-making authority. Assigned - Amounts that are constrained by the government's intent to be used for specific purposes, but are neither restricted or committed.
Unassigned - Amounts representing the residual classification for the general fund and residual negative fund balance of special revenue and capital project funds.

Further detail about the City's fund balance classification is described in Note 9. 42

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JUNE 30, 2022
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Q. Budgets and Budgetary Accounting
Budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America. Annual appropriated budgets are adopted for all departments at the major object level within the general, special revenue, capital project, and debt service funds.

During the period December through February of each fiscal year, department heads prepare estimates of required appropriations for the following fiscal year. These estimates are compiled into a proposed operating budget that includes a summary of proposed expenditures and financial resources and historical data for the preceding fiscal year. The operating budget is presented by the City Manager to the City Council for review. Public hearings are conducted to obtain citizen comments. The City Council generally adopts the budget during one of its June meetings. The City Manager is legally authorized to transfer budgeted amounts between divisions and accounts within the same department. Transfer of appropriations between departments or funds and increased appropriations must be authorized by the City Council. Expenditures may not legally exceed budgeted appropriations at the departmental level within a fund. All appropriations shall lapse at the end of the fiscal year to the extent they have not been expended or lawfully encumbered.

R. Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

S. Implementation of Government Accounting Standards Board Statements Effective July 1, 2021, the City implemented the following accounting and financial reporting standards:

Government Accounting Standards Board Statement No. 87
In June 2017, GASB issued Statement No. 87, Leases. The objective of this statement is to better meet the information needs of financial statement users by improving accounting and financial reporting for leases by governments. This statement requires recognition 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 establishes a single model for lease accounting based on the foundational principle that leases are financings of the right to use an underlying asset. Under this statement, a lessee is required to recognize a lease liability and an intangible right-to-use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources, thereby enhancing the relevance and consistency of information about governments' leasing activities. The City adopted this accounting guidance for its June 30, 2022 year-end. See notes 4 and 7 for additional details.

Government Accounting Standards Board Statement No. 89
In June 2018, GASB issued Statement No. 89, Accounting for Interest Cost Incurred before the End of a Construction Period. This Statement establishes accounting requirements for interest cost incurred before the end of a construction period. This Statement requires that interest cost incurred before the end of a construction period be recognized as an expense in the period in which the cost is incurred for financial statements prepared using the economic resources measurement focus. As a result, interest cost incurred before the end of a construction period will not be included in the historical cost of a capital asset reported in a business-type activity or enterprise fund. The City adopted this accounting guidance for its June 30, 2022 year-end. There was no impact to the financial statements as a result of this statement.
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JUNE 30, 2022
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Government Accounting Standards Board Statement No. 92
In January 2020, GASB issued Statement No. 92, Omnibus 2020. The primary objectives of this Statement are to enhance comparability in accounting and financial reporting and to improve the consistency of authoritative literature by addressing practice issues that have been identified during implementation and application of certain GASB Statements. The City adopted this accounting guidance for its June 30, 2022 year-end. There was no impact to the financial statements as a result of this statement.

Government Accounting Standards Board Statement No. 93
In March 2020, GASB issued Statement No. 93, Replacement of Interbank Offered Rates. The primary objective of this Statement is to address accounting and financial reporting implications that result from the replacement of an interbank offered rate (IBOR). The removal of LIBOR as an appropriate benchmark interest rate is effective for the City's fiscal year ending June 30, 2022. The City adopted this accounting guidance for its June 30, 2022 year-end.

There was no impact to the financial statements as a result of this statement.

Government Accounting Standards Board Statement No. 97
In June 2020, GASB issued Statement No. 97, Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans an Amendment of GASB Statements No. 14 and No. 84, and a Supersession of GASB Statement No. 32. The primary objectives of this Statement are to (1) increase consistency and comparability related to the reporting of fiduciary component units in circumstances in which a partial component unit does not have a governing board and the primary government performs the duties that a governing board typically would perform; (2) mitigate costs associated with the reporting of certain defined contribution pension plans, defined contribution other postemployment benefit (OPEB) plans, and employee benefit plans other than pension plans or OPEB plans (other employee benefit plans) as fiduciary component units in fiduciary fund financial statements; and (3) enhance the relevance, consistency, and comparability of the accounting and financial reporting for Internal Revenue Code (IRC) Section 457 deferred compensation plans (Section 457 plans) that meet the definition of a pension plan and for benefits provided through those plans. The City adopted this accounting guidance for its June 30, 2022 year-end. There was no impact to the financial statements as a result of this statement.

T. Future Government Accounting Standards Board Statements These statements are not effective until July 1, 2022 or later. The City has not determined the effects on the financial statements.

Government Accounting Standards Board Statement No. 91
In May 2019, GASB issued Statement No. 91, Conduit Debt Obligations. The primary objectives of this Statement are to provide a single method of reporting conduit debt obligations by issuers and eliminate diversity in practice associated with (1) commitments extended by issuers, (2) arrangements associated with conduit debt obligations, and (3) related note disclosures. This Statement achieves those objectives by clarifying the existing definition of a conduit debt obligation; establishing that a conduit debt obligation is not a liability of the issuer; establishing standards for accounting and financial reporting of additional commitments and voluntary commitments extended by issuers and arrangements associated with conduit debt obligations; and improving required note disclosures.

Application of this statement is effective for the City's fiscal year ending June 30, 2023. 44

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JUNE 30, 2022
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Government Accounting Standards Board Statement No. 94
In March 2020, GASB issued Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements. The primary objective of this Statement is to improve financial reporting by addressing issues related to public-private and public-public partnership arrangements (PPPs). A PPP is an arrangement in which a government (the transferor) contracts with an operator (a governmental or nongovernmental entity) to provide public services by conveying control of the right to operate or use a nonfinancial assets, such as infrastructure or other capital asset (the underlying PPP asset), for a period of time in an exchange or exchange-like transaction. This Statement also provides guidance for accounting and financial reporting for availability payment arrangements (APAs). An APA is an arrangement in which a government compensates an operator for services that my include designing, constructing, financing, maintaining, or operating an underlying nonfinancial asset for a period of time in an exchange or exchange-like transaction. The requirements of this statement are effective for the City's fiscal year ending June 30, 2023.

Government Accounting Standards Board Statement No. 96
In May 2020, GASB issued Statement No. 96, Subscription-Based Information Technology Arrangements. This Statement provides guidance on the accounting and financial reporting for subscription-based information technology arrangements (SBITAs) for governments, defines a SBITA, establishes that a SBITA results in a right-to- use subscription asset-an intangible asset-and a corresponding liability, provides the capitalization criteria for outlays other than subscription payments, including implementation costs of a SBITA, and requires note disclosures regarding a SBITA. The requirements of this statement are effective for the City's fiscal year ending June 30, 2023.

Government Accounting Standards Board Statement No. 99
In April 2022, GASB issued Statement No. 99, Omnibus 2022. This primary objectives of this Statement are to enhance comparability in accounting and financial reporting and to improve consistency of authoritative literature by addressing (1) practice issues that have been identified during implementation and application of certain GASB Statements and (2) accounting and financial reporting for guarantees. The requirements of this statement related to leases, PPPs and SBITAs are effective for the City's fiscal year ending June 30, 2023 and the requirements related to financial guarantees and the classification and reporting of derivative instruments within the scope of Statement 53 are effective for the City's fiscal year ending June 30, 2024.

Government Accounting Standards Board Statement No. 100 In June 2022, GASB issued Statement No. 100, Accounting Changes and Error Corrections - An Amendment of GASB Statement No. 62. This primary objective of this Statement is to enhance accounting and financial reporting requirements for accounting changes and error corrections to provide more understandable, reliable, relevant, consistent, and comparable information for making decisions or assessing accountability. The requirements of this statement are effective for the City's fiscal year ending June 30, 2024.

Government Accounting Standards Board Statement No. 101 In June 2022, GASB issued Statement No. 101, Compensated Absences. This primary objective of this Statement is to better meet the information needs of financial statement users by updating the recognition and measurement guidance for compensated absences by aligning the recognition and measurement guidance under a unified model and amending certain previously required disclosures. The requirements of this statement are effective for the City's fiscal year ending June 30, 2025.
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JUNE 30, 2022
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Government Accounting Standards Board Statement No. 102 In December 2023, GASB issued Statement No. 102, Certain Risk Disclosures. The primary objective of this Statement is to provide users of government financial statements with essential information about risks related to a government's vulnerabilities due to certain concentrations or constraints. A concentration is defined as a lack of diversity related to an aspect of a significant inflow of resources or outflow of resources. A constraint is a limitation imposed on a government by an external party or by formal action of the government's highest level of decision- making authority. The requirements of this statement are effective for the City's fiscal year ending June 30, 2025.

Government Accounting Standards Board Statement No. 103 In April 2024, GASB issued Statement No. 103, Financial Reporting Model Improvements. The objective of this Statement is to improve key components of the financial reporting model to enhance it effectiveness in providing information that is essential for decision making and assessing a government's accountability. This Statement also addresses certain application issues. The requirements of this statement are effective for the City's fiscal year ending June 30, 2026.

Government Accounting Standards Board Statement No. 104 In September 2024, GASB issued Statement No. 104, Disclosure of Certain Capital Assets. The objective of this Statement is to provide users of government financial statements with essential information about certain types of capital assets. This Statement requires certain types of capital assets to be disclosed separately in the capital assets note disclosures required by Statement 34 and also requires additional disclosures for capital assets held for sale.

The requirements of this statement are effective for the City's fiscal year ending June 30, 2026.

NOTE 2: CASH AND INVESTMENTS
Cash and investments as of June 30, 2022 were classified in the accompanying financial statements as follows:

Cash and
investments
Restricted cash
and investments Total
Governmental activities $72,880,268 $751,586 $73,631,854 Business-type activities 34,073,966 407 34,074,373
Total government-wide cash and investments 106,954,234 751,993 107,706,227 Fiduciary activities 4,974,422 2,368,131 7,342,553
Total cash and investments $111,928,656 $3,120,124 $115,048,780 Cash and investments as of June 30, 2022 consisted of the following:

Local Area Investment Fund (LAIF)$31,803,404
Money market funds - held by bond trustee 2,368,538
Deposits with financial institutions 68,594,374
Bonds/Certificates of deposit 2,697,812
Money market mutual fund 8,831,156
Certificates of deposit 751,586
Cash on hand 1,910
Total cash and investments $115,048,780
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JUNE 30, 2022
NOTE 2: CASH AND INVESTMENTS (CONTINUED)
Investments Authorized by the California Government Code and the City's Investment Policy The table below identifies the investment types that are authorized for the City by the California Government Code (or the City’s investment policy, where more restrictive). The table also identifies certain provisions of the California Government Code (or the City’s investment policy, where more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustee that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City’s investment policy.

Authorized Investment Type
Maximum
Maturity
Maximum
Percentage of
Portfolio
Maximum
Investment in
one Issuer
Local Agency Investment Fund (LAIF)5 years 50%50%
U.S. Treasury Bills and Notes 5 years 50%50%
Other Local California Agency Debt 5 years 50%50%
U.S. Agency Securities or Government -Sponsored
Enterprises 5 years 50%50%
Certificates of Deposit 5 years 50%50%
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 or the City's investment policy. The table below identifies the investment types that are authorized for investments held by bond trustee. The table also identifies certain provisions of these debt agreements that address interest rate risk, credit risk, and concentration of credit risk.

Authorized Investment Type
Maximum
Maturity
Maximum
Percentage of
Portfolio
Maximum
Investment in
one Issuer
Governmental Funds:

U.S. Treasury Obligations None None None
U.S. Agency Securities None None None
Money Market Funds rated "AAA-m" or better None None None Certificates of Deposit 365 days None None
Commercial Paper rated "AAA" or better 365 days None None Business Enterprise Funds:

Defeasance Securities None None None
Obligations issued by:

Resolution Funding Corporation None None None
Loan marketing Association None None None
Government National Mortgage Association None None None Bankers Acceptances rated "AAA" or better 180 days None None Commercial Paper (not to represent more than 10% of the outstanding commercial paper of an issuing
corporation)270 days None None
Non-negotiable Certificates of Deposit 365 days None None Deposit accounts fully insured by the F.D.I.C.None None None State or Municipal Bonds or Notes rated "A" or better None None None Money Market Funds rated "AAA-m" or better composed
of obligations of the United States or its Agencies None None None Guaranteed Investment Contracts rated "AA" or better None None None Local Agency Investment Fund (LAIF)None None None
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JUNE 30, 2022
NOTE 2: CASH AND INVESTMENTS (CONTINUED)
Investment Valuation
Investments 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 at 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 significant other observable inputs; Level 3 inputs are significant unobservable inputs. Investments’ fair value measurements are as follows at June 30, 2022:

Fair Value Measurements Using
Investments Level 1 Inputs Level 2 Inputs Level 3 Inputs Total Fair
Value
Bonds/Certificates of deposit $-$2,697,812 $-$2,697,812 Certificates of deposit - bank -751,586 -751,586
Money market mutual fund -8,831,156 -8,831,156
Held by bond trustee:

Money market funds -2,368,538 -2,368,538
Total $-$14,649,092 $-$14,649,092
Those investments measured using Level 2 are based on methodologies including: quoted prices for identical or similar assets in active markets, inputs other than quoted prices that are observable for assets or liabilities (such as interest rates, yield curves, credit risks, and default rates), or other market corroborated inputs.

Disclosure Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment.

Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the City's interest rate risk is mitigated 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 trustee) to market rate fluctuations is provided by the following table that shows the distribution of the City's investments by maturity as of June 30, 2022:

Remaining Maturity
Investment Type
12 months or
less 1-5 years Fair Value
Local Area Investment Pool (LAIF)$31,803,404 $-$31,803,404 Bonds/Certificates of deposit 2,697,812 -2,697,812
Certificates of deposit - bank 751,586 -751,586
Money market mutual fund 8,831,156 -8,831,156
Held by bond trustee:

Money market funds 2,368,538 -2,368,538
$46,452,496 $-$46,452,496
Investments with Fair Values Highly Sensitive to Interest Rate Fluctuations The City had no investments (including investments held by bond trustees) that were highly sensitive to interest rate fluctuations as of June 30, 2022.
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JUNE 30, 2022
NOTE 2: CASH AND INVESTMENTS (CONTINUED)
Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization.

Presented below is the minimum rating required by (where applicable) the California Government Code, the City's investment policy, or debt agreements, and the actual rating as of the fiscal year for each investment type.

Minimum
Legal Rating as of Fiscal Year End
Total Rating S&P N/A
Local Area Investment Pool (LAIF)$31,803,404 N/A Not rated Bonds/Certificates of deposit 2,697,812 N/A Not rated
Certificates of deposit - bank 751,586 N/A Not rated
Money market mutual funds 8,831,156 N/A Not rated
Held by bond trustee:

Money market funds 2,368,538 N/A AAA
$46,452,496
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. The City did not have any Investments in any one issuer (other than U.S. Treasury securities, mutual funds, and external investment pools) that represented 5% or more of total City investments as of June 30, 2022.

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

Investment in State Investment Pool
The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by the California Government Code under the oversight of the Treasurer of the State of California. This fund is not registered with the Securities and Exchange Commission as an investment company, but is required to invest according to California State Code. Participants in the pool include voluntary and involuntary participants, such as special districts and school districts for which there are legal provisions regarding their investments. The Local Investment Advisory Board (Board) has oversight responsibility for LAIF. The Board consists of five members as designated by State Statute. The fair value of the City's investment in this pool is reported in the accompanying financial statements at amounts based upon the City's pro rata share of the fair value provided by LAIF for the entire portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which is recorded on an amortized cost basis. 49

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JUNE 30, 2022
NOTE 2: CASH AND INVESTMENTS (CONTINUED)
Allocation of Interest Income Among Funds
Interest income from pooled investments is allocated to those funds which are required by law or administrative action to receive interest. Interest is allocated monthly based on the ending cash balances of the previous month in each fund receiving interest.

NOTE 3: NOTES RECEIVABLE
The City has made various business loans to qualifying businesses through programs designed to encourage construction or improvement in low-to-moderate income housing or other projects. In addition, the City has made various loans under the Community Development Block Grant (CDBG) revolving loan program and the Home Investment Partnership Program (HOME). Under these programs, grants or loans are provided under favorable terms to homeowners or developers who agree to spend these funds in accordance with the City's terms.

The balance of the notes receivable, net of allowance, has been offset in the fund financial statements by deferred inflows of resources as they are not deemed measurable and available (within 60 days). In the government-wide financial statements, the City has provided a 100% allowance for all notes receivable subject to long-term deferral and/or payment from future refinancing except those accounts that have current payment and activity and are not delinquent. Individual loans range from $3,000 to $3,000,000. Total notes receivable as of June 30, 2022 was as follows:

Balance
Notes Receivable $18,979,854
Allowance for Doubtful Notes (7,435,426)
Notes Receivable, net $11,544,428
Promissory Notes on Shared Appreciation Loans
Certain housing units in the former redevelopment area are part of an affordable housing program designed to create, preserve, maintain, and protect housing for persons of low or moderate income. Qualified persons ("buyer") are able to purchase the housing units at below fair market value, as a result of the City's investment in the project.

The City has a promissory note with the buyer for the amount of the difference between the fair market value and the purchase price of the unit, which is considered the City's initial equity contribution. No payments are due under the promissory note, unless the buyer re-sells the unit to a non-eligible buyer or otherwise defaults on the promissory note, as defined in the agreement. The promissory note is cancelled if the buyer sells the unit to another eligible buyer. If the buyer sells to a non-eligible buyer, the City will receive a pro-rate share (based on the City's and buyer's respective equity) of the appreciation of the unit. As of June 30, 2022, no amounts have been recorded related to these loans as any payment is contingent on sales of units to non-eligible buyers in the future. 50

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CITY OF HOLLISTER

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
NOTE 4: LEASES RECEIVABLE
The City is reporting leases receivable of $6,156,244 at June 30, 2022. The leases have terms that range from 36 to 353 months and interest rates that range from 0.2000% to 3.1057%. For the year ended June 30, 2022, the City reported lease revenue of $808,622 and interest revenue of $151,981 related to lease payments received for the following agreements:

Description
Monthly
Payment
Receivable
Balance
Deferred
Inflow Revenue
Governmental Activities:

Crown Castle $-$-$1,237,029 $26,331
Tower Point --1,667,704 2,296
Brown Alley - PGE 401 38,551 38,346 5,022
Waste Solutions Group 1,674 634,340 629,997 24,426
Total Governmental Activities 2,075 672,891 3,573,076 58,075 Business-type Activities:
155 Skylane Drive, #16 1,894 133,120 132,478 23,363
210 Skylane Drive, #5 5,140 515,891 513,398 64,175
234 Skylane Drive, Heli 4,179 160,183 159,848 50,478
234 Skylane Drive, #4 1,155 4,626 4,622 13,867
365 Fourth Street 9,810 417,810 403,390 132,139
50 Skylane Dr, Unit C 1,722 43,229 43,167 20,720
90 Airport Drive 3,033 76,160 76,051 36,504
90 Skylane #101, Suite 1 4,390 218,050 216,617 54,117
90 Skylane #101, Suite 2 2,456 121,954 121,152 30,267
90 Skylane #101, Suite 3 2,457 119,497 119,181 29,795
90 Skylane #101, Suite 4 1,637 81,303 80,768 20,178
90 Skylane #101, Suite 5 1,637 81,303 80,768 20,178
Hollister Elks Lodge 462 28,264 28,174 5,635
200 Aerostar W y, #20 4,035 1,730,720 1,718,829 60,310
220 Skylane Drive 2,850 1,125,477 1,117,761 41,916
2300 San Felipe Road 10,083 625,766 599,862 146,905
Total Business-type Activities 56,940 5,483,353 5,416,066 750,547 Total $59,015 $6,156,244 $8,989,142 $808,622
Future payments due to the City under the non-cancelable agreements are as follows:

Governmental Activities
For the Year Ending June 30,Principal Interest Total
2023 $24,269 $11,995 $36,264
2024 24,687 11,576 36,263
2025 25,113 11,150 36,263
2026 25,546 10,717 36,263
2027 25,987 10,276 36,263
2028 - 2032 124,386 44,649 169,035
2033 - 2037 121,232 33,768 155,000
2038 - 2042 132,913 22,087 155,000
2043 - 2047 145,720 9,280 155,000
2048 - 2052 23,038 213 23,251
Total $672,891 $165,711 $838,602
51

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CITY OF HOLLISTER

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
NOTE 4: LEASES RECEIVABLE (CONTINUED)
Business-type Activities
For the Year Ending June 30,Principal Interest Total
2023 $710,508 $74,763 $785,271
2024 727,793 67,136 794,929
2025 691,711 59,278 750,989
2026 520,332 52,629 572,961
2027 190,442 48,821 239,263
2028 - 2032 651,972 209,073 861,045
2033 - 2037 496,504 161,651 658,155
2038 - 2042 544,486 113,669 658,155
2043 - 2047 597,105 61,050 658,155
2048 - 2052 352,500 10,310 362,810
Total $5,483,353 $858,380 $6,341,733
NOTE 5: INTERFUND TRANSACTIONS
The composition of interfund balances as of June 30, 2022 was as follows:

Due to/from Other Funds
Receivable Fund Payable Fund Description Amount
Governmental Funds
General Fund Road Repair & Accountability Act Deficit cash balance $1,199,075 4th of July Rally Deficit cash balance 260,614
SAFER Grant Deficit cash balance 548,371
Mello Roos CFD-001 Deficit cash balance 18,556
2017 CDBG Grant Deficit cash balance 235,132
FEMA - COVID 19 Deficit cash balance 741,715
2020 CDBG Deficit cash balance 106,304
Business-Type Funds
General Fund Airport Fund Deficit cash balance 474,924
Street Sweeping Fund Deficit cash balance 2,329,042
Total Governmental and Business-type Funds $5,913,733
Intra-fund receivables and payables are not presented on the Governmental Funds Balance Sheet and the Proprietary Funds Statement of Net Position as they are presented on a net basis. Proprietary intra-fund balances consisted of $3,826,564 due to the Sewer Enterprise Fund from the Sewer Industrial Fund as shown on the Combining Schedule of Net Position for the Sewer funds on page 148. Intra-fund receivables/payables were a result of deficit cash balances in the payable fund.
52

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CITY OF HOLLISTER

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
NOTE 5: INTERFUND TRANSACTIONS (CONTINUED)
Interfund Transfers to/from Other Funds
Transfers are indicative of funding for capital projects, debt service, subsidies of various City operations and re- allocations of special revenue. The following schedule briefly summarizes the City’s transfer activity:

Transfer from Transfer to Description of Transfer
Amount
Transferred
Major Governmental Fund
CIP Traffic Impact Fees General Fund Grant matching funds $232,376 Non-Major Governmental
Funds
Park Dedication General Fund Administrative fees 117,374 Mello Roos CFD-001 General Fund Administrative fees 18,809 Fire Impact Fees General Fund Administrative fees 4,309 Police Impact Fees General Fund Administrative fees 3,727 City Hall/City Yard Impact Fees General Fund Administrative fees 1,817 Total Governmental Interfund Transfers $378,412
Proprietary Funds
Water General Fund Administrative fees $9,381
Sewer General Fund Administrative fees 129,260
Total Proprietary Interfund Transfers $138,641
53

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CITY OF HOLLISTER

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
NOTE 6: CAPITAL ASSETS
The following is a summary of capital asset transactions related to governmental activities of the City for the year ended June 30, 2022:

Balance
July 1, 2021 Additions Retirements Transfers
Balance
June 30, 2022
Governmental Activities:

Capital assets not being depreciated
Land $750,252 $-$-$-$750,252
Construction-in-progress 754,211 5,807,485 -(3,401,311)3,160,385 Total capital assets not being
depreciated 1,504,463 5,807,485 -(3,401,311)3,910,637
Capital assets being depreciated
Buildings 32,081,361 ---32,081,361
Equipment 14,945,056 398,394 --15,343,450
Improvements 10,197,197 1,027,208 (94,377)86,492 11,216,520 Infrastructure 33,613,213 1,523,888 -3,314,819 38,451,920 Right-to-use lease assets 245,074 135,639 --380,713
Total capital assets being
depreciated 91,081,901 3,085,129 (94,377)3,401,311 97,473,964 Less accumulated depreciation
Buildings (17,998,785)(952,821)--(18,951,606)
Equipment (10,220,043)(1,125,774)--(11,345,817)
Improvements (1,789,258)(511,009)--(2,300,267)
Infrastructure (11,746,969)(1,076,060)--(12,823,029)
Right-to-use lease assets -(90,317)--(90,317)
Total accumulated depreciation (41,755,055)(3,755,981)--(45,511,036) Governmental activities capital assets,
net $50,831,309 $5,136,633 $(94,377)$-$55,873,565
Depreciation and amortization were charged to functions based on their usage of the related assets as follows:

Governmental Activities:

General government $546,653
Public safety 1,413,877
Public works 1,275,372
Recreation 520,079
Total governmental activities depreciation and amortization expense $3,755,981 54

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CITY OF HOLLISTER

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
NOTE 6: CAPITAL ASSETS (CONTINUED)
The following is a summary of capital asset transactions related to business-type activities of the City for the year ended June 30, 2022:
(Restated)
Balance at
July 1, 2021 Additions Retirements Transfers
Balance at
June 30, 2022
Business-type Activities:

Capital assets not being depreciated
Land $5,243,600 $-$-$-$5,243,600
Air rights 1,384,584 ---1,384,584
Construction-in-progress 403,617 747,923 -(457,606)693,934 Total capital assets not being
depreciated 7,031,801 747,923 -(457,606)7,322,118
Capital assets being depreciated
Buildings 13,138,348 ---13,138,348
Equipment 7,896,577 235,412 --8,131,989
Improvements and infrastructure 163,081,153 94,377 -457,606 163,633,136 Water rights 13,700,000 ---13,700,000
Total capital assets being
depreciated 197,816,078 329,789 -457,606 198,603,473
Less accumulated depreciation
Buildings (9,545,632)(269,876)--(9,815,508)
Equipment (4,310,206)(578,654)--(4,888,860)
Improvements and infrastructure (54,564,696)(4,528,638)--(59,093,334) Water rights (4,134,739)(671,669)--(4,806,408)
Total accumulated depreciation (72,555,273)(6,048,837)--(78,604,110) Business-type capital assets, net $132,292,606 $(4,971,125)$-$-$127,321,481 Depreciation was charged to functions/programs of the City's business-type activities as follows:

Business-type Activities:

Airport $1,155,301
Water 897,271
Sewer 3,876,666
Briggs Building 119,599
Total business-type activities depreciation expense $6,048,837 55

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CITY OF HOLLISTER

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
NOTE 7: LONG-TERM LIABILITIES
Governmental Activities
Long-term obligations of the City consist of bonds, and other liabilities, which are payable from the general, capital projects, and enterprise funds. The following is a summary of long-term liabilities transactions related to governmental activities of the City for the year ended June 30, 2022:

Balance
July 1, 2021 Additions Reductions
Balance
June 30, 2022
Current
Portion
CA Energy Commission Loan $6,749 $-$(2,798)$3,951 $2,825 Tractor Financed Purchase 98,374 -(42,090)56,284 43,721 Fire Trucks Financed Purchase 906,808 2,260,597 (345,377)2,822,028 353,894 Lease liabilities 245,074 135,639 (87,340)293,373 102,408 Total 1,257,005 2,396,236 (477,605)3,175,636 502,848
Other liabilities:

Compensated absences 1,872,165 1,822,486 (2,065,542)1,629,109 1,589,517 Total Long-term Liabilities $3,129,170 $4,218,722 $(2,543,147)$4,804,745 $2,092,365 A description of the long-term liabilities related to governmental activities at June 30, 2022 follows:

A. California Energy Commission Loan
In February 2012, the City entered into a loan agreement with the California Energy Commission for their energy conservation project. The loan bears interest at 1%. Principal payments are due semi-annually beginning on December 22, 2012. Future payments are as follows:

For the Year
Ending, June 30 Principal Interest
2023 $2,825 $35
2024 1,126 7
Total $3,951 $42
B. Tractor Financed Purchased
During fiscal year 2019, the City entered into the following capital lease agreements:

John Deere Lease #1
The City entered into an agreement to lease a four wheel drive loader for the City. The lease requires 60 monthly installments of $3,510 with an interest rate of 3.75%. The total lease payments of the lease is for $192,371. Principal payments are due monthly beginning in November 2018 through November 2023. 56

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CITY OF HOLLISTER

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
NOTE 7: LONG-TERM LIABILITIES (CONTINUED)
John Deere Lease #2
The City entered into an agreement to lease a compact track loader for the City. The lease requires 60 monthly installments of $1,375 with an interest rate of 4.75%. The total lease payments of the lease is for $73,572. Principal payments are due monthly beginning in October 2018 through October 2023.

John Deere Lease #3
The City entered into an agreement to lease a scrap grapple for the City. The lease requires 60 monthly installments of $1,375 with an interest rate of 3.75%. The total lease payments of the lease is for $107,778. Principal payments are due monthly beginning in October 2018 through October 2023.

The financed purchase balances have been divided amongst governmental and business-type activities. The outstanding balance included in governmental activities as of June 30, 2022 was $56,284. The assets acquired through the financed purchases have been recorded with a net book value of $130,058. Amortization totaling $20,536 for the year-ended June 30, 2022 is included with depreciation expense. Future payments allocated to governmental activities is as follows:

For the Year
Ending, June 30 Principal Interest
2023 $43,721 $1,456
2024 12,563 98
Total $56,284 $1,554
C. Fire Trucks Financed Purchase
In April 2017, the City entered into a financed purchase agreement for four fire trucks. The lease bears interest at

2.848% with monthly payments of principal and interest due beginning July 1, 2017. The assets acquired through the financed purchase were put into service in 2019. In 2022, the City entered into a financed purchase agreement for an additional four fire trucks. The agreement bears interest at 2.176% with monthly payments of principal and interest due beginning February 25, 2022. The assets acquired through the financed purchase were not placed into service and are included in construction-in-progress as of June 30, 2022. The assets have been recorded with a net book value of $2,872,417 as of June 30, 2022. Amortization totaling $244,728 for the year-ended June 30, 2022 is included with depreciation expense. Future annual payments on the financed purchase obligation are as follows:

For the Year
Ending, June 30 Principal Interest
2023 $353,894 $66,875
2024 362,626 58,143
2025 371,578 49,191
2026 380,756 40,013
2027 390,164 30,605
2028 - 2032 963,010 52,962
Total $2,822,028 $297,789
57

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CITY OF HOLLISTER

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
NOTE 7: LONG-TERM LIABILITIES (CONTINUED)
D. Lease liabilities
The City, as a lessee, has lease agreements for land and buildings. The leases bear interest that range from 0.239% to 0.704%. The total of the City's right-to-use lease assets are recorded at cost of $380,713, less accumulated amortization of $90,317. Amortization totaling $90,317 for the year-ended June 30, 2022 is included with depreciation expense. Future annual payments on the lease liabilities are as follows:

For the Year
Ending, June 30 Principal Interest
2023 $102,408 $1,567
2024 67,325 1,075
2025 67,774 626
2026 44,387 213
2027 11,479 20
Total $293,373 $3,501
E. Debt Service Requirements
Total debt service requirements for governmental activities:

For the Year
Ending, June 30 Principal Interest
2023 $502,848 $69,933
2024 443,640 59,323
2025 439,352 49,817
2026 425,143 40,226
2027 401,643 30,625
2028 - 2032 963,010 52,962
Total $3,175,636 $302,886
F. Compensated Absences
Compensated absences comprise unused vacation leave and compensatory time off, which are accrued as earned.

The liability for compensated absences is determined annually. The City does not accrue for compensated absences in its governmental fund statements and recognizes liabilities for compensated absences only if they are due and payable in an event such as termination. However, in the Statement of Activities the expenditure is allocated to each function based on usage. The compensated absences liability attributable to the governmental activities was liquidated as follows: general fund 95% and nonmajor funds 5%. 58

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CITY OF HOLLISTER

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
NOTE 7: LONG-TERM LIABILITIES (CONTINUED)
Business-type Activities
The following is a summary of long-term liabilities transactions related to business-type activities of the City for the year ended June 30, 2022:
(Restated)
Balance
July 1, 2021
Additions Reductions
Balance
June 30, 2022
Current
Portion
2016 W astewater refunding bonds $52,770,000 $-$(2,305,000)$50,465,000 $2,420,000 Tractor Financed Purchase 81,572 -(34,399)47,173 35,720 Bond issuance premium 6,313,832 -(396,680)5,917,152 396,680 Contract payable 9,441,984 -(463,915)8,978,069 482,298
Total 59,165,404 -(3,199,994)65,407,394 3,334,698
Other liabilities:

Compensated absences 440,171 384,872 (516,948)308,095 262,105 Total Long-Term Liabilities $59,605,575 $384,872 $(3,716,942)$65,715,489 $3,596,803 A description of the long-term liabilities related to business-type activities at June 30, 2022 is as follows:

A. 2016 Wastewater Revenue Refunding Bonds
In March 2016, the Hollister Joint Powers Financing Authority authorized the issuance of $67,975,000 of limited obligation bonds to (i) refund all of the Authority's outstanding Wastewater Revenue Bonds, Series 2006; (ii) refund all of the Authority's outstanding Wastewater Revenue Bonds, Series 2007; (iii) fund a reserve fund for the bonds, and (iv) pay costs of issuing the bonds. The net present value refunding savings were approximately $ 0.7 million or over 12% of the refunded bonds, net of all issuance costs. Annual debt service savings were approximately over $1 million. Interest payments on the bonds are due and payable on June 1 and December 1 of each year, commencing December 1, 2016. Principal payments are made annually, on June 1. Payments are made payable from and secured by a pledge of lien and lien on net revenues of the City's wastewater system. Interest on the bonds range from 2.00% - 5.00%. Future payments are as follows:

For the Year
Ending, June 30 Principal Interest
2023 $2,420,000 $2,194,450
2024 2,540,000 2,073,450
2025 2,665,000 1,946,450
2026 2,750,000 1,861,400
2027 2,890,000 1,723,900
2028 - 2032 16,740,000 6,313,750
2033 - 2037 20,460,000 2,601,700
Total $50,465,000 $18,715,100
59

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CITY OF HOLLISTER

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
NOTE 7: LONG-TERM LIABILITIES (CONTINUED)
Bond Issuance Insurance Costs
Capitalized bond insurance costs related to the above issuance have been recorded as deferred charges, net of accumulated amortization, in the amount of $128,054. The balance is amortized using the straight line method over the bond term. Net amortization for bond insurance costs for the year ended June 30, 2022 totaled $8,585.

B. John Deere Equipment Lease
As described in the governmental activities section, during fiscal year 2019, the City entered into three financed purchase agreements for John Deere equipment. The financed purchase balance has been divided amongst governmental and business-type activities. The outstanding balance included in business-type activities as of June 30, 2022 was $47,173. The assets acquired through the financed purchases have been recorded with a net book value of $105,305. Amortization totaling $16,837 for the year ended June 30, 2022 is included with depreciation expense. Future payments allocated to business-type activities is as follows:

For the Year
Ending, June 30 Principal Interest
2023 $35,720 $1,194
2024 11,453 80
Total $47,173 $1,274
C. Contract Payable
In August 2013, the City, Sunnyslope County Water District (SSCW D) and the San Benito County Water District (SBCW D) each approved the Hollister Urban Water Supply and Treatment Agreement. The agreement defined the roles and terms of financing for the project which included the upgrade of Lessalt W ater Treatment Plant, the design and construction of the West Hills Water Treatment Plant and associated pipelines. SBCW D was to finance, build, own and operate the upgraded Lessalt W ater Treatment Plant and the new W est Hills W ater Treatment Plant.

SBCW D committed to finance up to $30 million of the project costs to upgrade the surface water treatment process at the Lessalt Water Treatment Plant to meet current water quality regulations, and to construct a second surface water treatment plant called the West Hills Water Treatment Plant. These funds were committed in two tranches.

The first trance of $13 million was made available on the effective date of the agreement, September 1, 2013. The second trance of $17 million was made available effective May 1, 2015, the start of the construction phase of the West Hills W ater Treatment Plant.

The actual project cost exceeded $30 million by $11.6 million, and these additional project costs were financed with a combination of $4.2 million in Proposition 84 Grant Funds, $3.4 million from reserves of the City and SSCW D, and a $4 million loan procured by SBCW D. The City paid it's $1.7 million share from reserves during fiscal year 2017, which was capitalized as water rights and is being amortized accordingly. The $4 million loan became tranche 3 and was made available on January 1, 2016. The City and the SSCW D are committed to share equally in the costs associated with these two surface water treatment plants and share in the rights to receive the treated water produced.

SBCW D contributed $10 million in non-reimbursable funds, of which $4 million was made available for the first tranche of financing and $6 million was made available for the second tranche of financing. The City opted to use their share of the non-reimbursable funds to buy down the capital component. The City's share of the first tranche capital cost is $4.5 million and is spread in equal monthly payments over 30 years at an interest rate of 4.5%. The City's share of the second tranche capital cost is $5.5 million and is spread in equal monthly payments over 20 years at an interest rate of 4.0%. The City's share of the third tranche capital cost is $2 million, which is being repaid quarterly over a 15 year period at an interest rate of 3.45%, with the City's monthly payments based on one-third of its share of the quarterly payment.
60

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CITY OF HOLLISTER

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
NOTE 7: LONG-TERM LIABILITIES (CONTINUED)
In accordance with financial covenants of the agreement, the City shall pledge net water revenues, defined as gross revenues received during any period less the amount required by the City to pay for all operation and maintenance costs during such period. Operation and maitenance costs shall mean the reasonable and necessary costs and expenses for maintaining and operating the water system, excluding depreciation, replacement and obsolescence charges or reserves, amortization of intangibles, payments of principal and interest on all outstanding paity debt or other obligations of teh CIty and costs of capital additions, replacements or improvements chargable to a capital account.

In the event of default, the City will be required to pay all direct damages including the City's respective share of all remaining capital costs incurred for development and construction of facilities, including interest, in addition to any obligations that remain unpaid as of the date of default.

For the Year
Ending, June 30 Principal Interest
2023 $482,298 $359,665
2024 490,011 337,918
2025 532,719 323,278
2026 542,003 299,960
2027 563,528 278,435
2028 - 2032 2,899,734 1,043,439
2033 - 2037 1,996,781 504,453
2038 - 2042 1,160,584 207,466
2033 - 2047 310,411 8,801
Total $8,978,069 $3,363,415
D. Debt Service Requirements
Total debt service requirements for business-type activities:

For the Year
Ending, June 30 Principal Interest
2023 $2,938,018 $2,555,309
2024 3,041,464 2,411,448
2025 3,197,719 2,269,728
2026 3,292,003 2,161,360
2027 3,453,528 2,002,335
2028 - 2032 19,639,734 7,357,189
2033 - 2037 22,456,781 3,106,153
2038 - 2042 1,160,584 207,466
2033 - 2047 310,411 8,801
Total $59,490,242 $22,079,789
E. Limitations and Restrictions
There are a number of limitations and restrictions contained in the various debt indentures. The City’s management believes that the City is in compliance with all significant limitations and restrictions. 61

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CITY OF HOLLISTER

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
NOTE 7: LONG-TERM LIABILITIES (CONTINUED)
F. Rebatable Arbitrage Earnings
The Tax Reform Act of 1986 instituted certain arbitrage restrictions with respect to the issuance of tax-exempt bonds after August 31, 1986. Arbitrage regulations deal with the investment of all tax-exempt bond proceeds at an interest yield greater than the interest yield paid to bondholders. Generally, all interest paid to bondholders can be retroactively rendered taxable if applicable rebates are not reported and paid to the Internal Revenue Service at least every five years. During the current year, the City performed calculations of excess investment earnings on various bonds and financings and at June 30, 2022 does not expect to incur a liability.

NOTE 8: DEBT WITHOUT CITY COMMITMENT
Special assessment bonds and related interest costs are payable solely from assessments and interest collected from the property owners benefited by the respective improvements. The City has no liability for payment of the bonds should assessments be insufficient to cover bond principal and interest; however due to the City's oversight relationship with the Special Assessment Districts, they are included in the City's reporting entity as Special Assessment Debt in the Agency Funds. As of June 30, 2022, the outstanding principal amount of the bonds were:

Original
Principal
Origination
Date Maturity
Balance at
June 30, 2022
Meridian Street District $355,000 3/2/1994 9/2/2022 $185,000 NOTE 9: FUND BALANCES AND NET POSITION
Fund Balances
As prescribed by GASB Statement No. 54, "Fund Balance Reporting and Governmental Fund Type Definitions" governmental funds report fund balance in classifications based primarily on the extent to which the City is bound to honor constraints on the specific purposes for which amounts in the funds can be spent. This statement provides more clearly defined fund balance categories to make the nature and extent of the constraints placed on a government's fund balances more transparent. The City established the following fund balance policies:

Nonspendable: This classification includes amounts that cannot be spent because they are either (a) not in spendable form or (b) are legally or contractually required to be maintained intact. The City has classified inventories and prepaid items as being nonspendable as these items are not expected to be converted to cash or are not expected to be converted to cash within the next year.

Restricted: This classification includes amounts for which constraints have been placed on the use of the resources either (a) externally imposed by creditors (such as through a debt covenant), grantors, contributors, or laws and regulations of other governments, or (b) imposed by law through constitutional provisions or enabling legislation. The City has classified debt service resources are to be used for future servicing of the revenue note and are restricted through debt covenants. Infrastructure projects are restricted by State statute and County laws are legally segregated for funding of infrastructure improvements.

Committed: This classification includes amounts that can be used for specific purposes determined by formal action of the City's highest level of decision-making authority. The City Council is the City's highest level of decision-making authority, and the formal action that is required to be taken to establish, modify, or rescind a fund balance commitment is a resolution approved by the City Council. Once adopted, the limitation imposed remains in place until a similar action is taken to remove or revise the limitation. The underlying action that imposed the limitation needs to occur no later than the close of the reporting period. 62

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CITY OF HOLLISTER

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
NOTE 9: FUND BALANCES AND NET POSITION (CONTINUED)
Assigned: This classification includes amounts that are constrained by the City's intent to be used for a specific purpose but are neither restricted nor committed. This intent can be expressed by the City Council or though City Council delegating this responsibility to the City Manager through the budgetary process. This classification also includes the remaining positive fund balance for all governmental funds except for the General Fund. The City did not have any assigned fund balances as of June 30, 2022.

Unassigned: This classification includes the residual fund balance for the General Fund. The unassigned classification also includes negative residual fund balance of any other governmental fund that cannot be eliminated by offsetting of assigned fund balance amounts.

The accounting policies of the City consider restricted fund balance to have been spent first when an expenditure is incurred for the purposes for which both restricted and unrestricted fund balance is available. Similarly, when an expenditure is incurred for purposes for which amounts in any of the unrestricted classifications of fund balance could be used, the City considers committed amounts to be reduced first, followed by assigned amounts, as appropriate opportunities arise, but reserves the right to selectively spend unassigned resources first to defer the use of these other classified funds.

As of June 30, 2022, fund balances consisted of the following:

Major Funds
General Fund
Housing
Successor
Agency
CIP Traffic
Impact Fees
Other
Governmental
Funds
Total
Governmental
Funds
Nonspendable:

Prepaid items $83,410 $-$-$-$83,410
Total Nonspendable 83,410 ---83,410
Restricted:

Grants ---9,004,786 9,004,786
Housing -1,340,007 --1,340,007
Taxes & assessments --28,495,763 11,891,288 40,387,051
Loan programs ---410,343 410,343
Capital projects ---6,486,421 6,486,421
Total Restricted -1,340,007 28,495,763 27,792,838 57,628,608 Committed:

Economic development 1,065,706 ---1,065,706
Reserves 300,000 ---300,000
Equipment replacement 300,000 ---300,000
Total Committed 1,665,706 ---1,665,706
Unassigned 14,204,224 --(3,112,559)11,091,665
Total fund balances $15,953,340 $1,340,007 $28,495,763 $24,680,279 $70,469,389 Net Position
The government-wide Statement of Net Position reports net position totaling $196,584,326, of which $114,612,016 is the net investment in capital assets; $407 is restricted by debt covenants; $410,343 is restricted for community improvement; $9,004,786 is restricted for grant programs; $1,340,007 is restricted for housing; and $6,486,421 is restricted for capital projects. $64,730,346 represents unrestricted net position. 63

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CITY OF HOLLISTER

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
NOTE 10: DEFINED BENEFIT PENSION PLAN
A. General Information about the Pension Plan
Plan Description
All qualified permanent and probationary employees are eligible to participate in the Public Agency Cost-Sharing Multiple-Employer Defined Benefit Pension Plan (Plan) administered by the California Public Employees’ Retirement System (CalPERS.) The Plan consists of individual rate plans (benefit tiers) within a safety risk pool (police and fire) and a miscellaneous risk pool (all other). Plan assets may be used to pay benefits for any employer rate plan of the safety and miscellaneous pools. Accordingly, rate plans within the safety or miscellaneous pools are not separate plans under GASB Statement No. 68. Individual employers may sponsor more than one rate plan in the miscellaneous or safety risk pools. The City sponsors nine plans (three miscellaneous and six safety). Benefit provisions under the Plan are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plan regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.

Benefits Provided
CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligible to retire at age 50 (age 62 for Miscellaneous Plan members if membership date is on or after January 1, 2013) with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit.

The cost of living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law.

The rate plan's provisions and benefits in effect at June 30, 2022 are summarized as follows:

Miscellaneous
Hire Date
Tier I
Prior to November 14,
2011
Tier II
Hired Between
November 14, 2011
and January 1, 2013
Tier III (PEPRA)
On or After
January 1, 2013
Benefit Formula 2.5% @ 55 2.0% @ 60 2.0% @ 62
Benefit Vesting Schedule 5 years service 5 years service 5 years service Benefit Payments monthly for life monthly for life monthly for life Retirement Age 55 and up 60 and up 62 and up
Monthly Benefits, as a % of
Eligible Compensation 2.50%2.00%2.00%
Required Employee Contribution
Rates 8.00%7.00%6.75%
Required Employer Contribution
Rates*44.57%10.15%8.24%
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CITY OF HOLLISTER

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
NOTE 10: PENSION PLAN (CONTINUED)
Safety - Police
Hire Date
Tier I
Prior to November 14,
2011
Tier II
Hired Between
November 14, 2011
and January 1, 2013
Tier III (PEPRA)
On or After
January 1, 2013
Benefit Formula 3.0% @ 50 3.0% @ 55 2.7% @ 57
Benefit Vesting Schedule 5 years service 5 years service 5 years service Benefit Payments monthly for life monthly for life monthly for life Retirement Age 50 and up 55 and up 57 and up
Monthly Benefits, as a % of
Eligible Compensation 3.00%3.00%2.70%
Required Employee Contribution
Rates 9.00%9.00%13.00%
Required Employer Contribution
Rates*64.82%23.17%13.87%
Safety - Fire
Hire Date Tier I
Prior to November 14,
2011
Tier II
Hired Between
November 14, 2011
and January 1, 2013
Tier III (PEPRA)
On or After
January 1, 2013
Benefit Formula 3.0% @ 50 3.0% @ 55 2.7% @ 57
Benefit Vesting Schedule 5 years service 5 years service 5 years service Benefit Payments monthly for life monthly for life monthly for life Retirement Age 50 and up 55 and up 57 and up
Monthly Benefits, as a % of
Eligible Compensation 3.00%3.00%2.70%
Required Employee Contribution
Rates 9.00%9.00%13.00%
Required Employer Contribution
Rates*41.88%23.31%14.06%
*The employer contribution rate is the sum of the plans' employer normal cost rate plus the employer unfunded accrued liability.

Contributions
Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. Funding contributions for the Plan are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. The City's contributions to the Plan for the year ending June 30, 2022 were $4,843,460. 65

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CITY OF HOLLISTER

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
NOTE 10: PENSION PLAN (CONTINUED)
B. Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions As of June 30, 2022, the City reported a net pension liability for its proportionate share of the net pension liability of the Plan of $19,082,199. $17,466,095 of the liability is reported in governmental activities, while $1,616,104 of the liability is reported in business-type activities.

The City's net pension liability for the Plan is measured as the proportionate share of the net pension liability. The net pension liability of the Plan is measured as of June 30, 2021, and the total pension liability for the Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2020 rolled forward to June 30, 2021 using standard update procedures. The City's proportion of the net pension liability was based on a projection of the City's long-term share of contributions to the pension plan relative to the projected contributions of all participating employers, actuarially determined. The City's proportionate share of the net pension liability for the Plan as of June 30, 2020 and 2021 was as follows:

Proportion - June 30, 2020 0.31306%
Proportion - June 30, 2021 0.35283%
Change - Increase (Decrease)0.03978%
For the year ended June 30, 2022, the City recognized pension expense of $3,791,900. At June 30, 2022, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Pension contributions subsequent to the measurement date $4,843,460 $- Difference between actual contributions made by employer and the employer's proportionate share of the risk pool's total contribution -1,613,022 Differences between actual and expected experience 2,708,340 - Adjustment due to differences in proportions 1,429,818 - Net differences between projected and actual earnings on plan investments -13,968,288
Total $8,981,618 $15,581,310
$4,843,460 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2023. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:

For the Fiscal Year Ended
June 30,
Net Deferred Outflows
(Inflows) of Resources
2023 $(2,144,018)
2024 (2,428,429)
2025 (3,017,286)
2026 (3,853,419)
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CITY OF HOLLISTER

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
NOTE 10: PENSION PLAN (CONTINUED)
Actuarial Assumptions
The total pension liabilities in the June 30, 2020 actuarial valuations were determined using the following actuarial assumptions:

Cost-Sharing Miscellaneous & Safety Plans
Valuation Date June 30, 2020
Measurement Date June 30, 2021
Actuarial Cost Method Entry-Age Normal Cost Method
Actuarial Assumptions:

Discount Rate 7.15%
Inflation 2.50%
Salary Increases Varies by Entry Age and Service
Investment Rate of Return 7.15% net of pension plan investment expenses; includes inflation
Mortality (1)Derived using CalPERS membership data for all funds Post Retirement Benefit Increase Contract COLA up to 2.50% until purchasing power protection allowance floor on purchasing power applies,

2.50% thereafter
(1) The mortality table used was developed based on CalPERS' specific data. The table includes 15 years of mortality improvements using Society of Actuaries 90 percent Scale MP 2016. For more details on this table, please refer to the December 2017 experience study report (based on CalPERS demographic data from 1997 to 2015) available on CalPERS website.

All other actuarial assumptions used in the June 30, 2020 valuation were based on the results of an actuarial experience study for the fiscal years 1997 to 2015, including updates to salary increases, mortality and retirement rates. The Experience Study report can be obtained at the CalPERS' website under Forms and Publications.

Changes in Assumptions
For the measurement period June 30, 2021, there were no changes in assumptions.

Discount Rate
The discount rate used to measure the total pension liability was 7.15 percent. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

Long-term Expected Rate of Return
The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.
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CITY OF HOLLISTER

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
NOTE 10: PENSION PLAN (CONTINUED)
In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations as well as the expected pension fund (PERF) cash flows. Using historical returns of all of the funds’ asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11+ years) using a building-block approach. Using the expected nominal returns for both short- term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set to equal to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses.

The table below reflects long-term expected real rate of return by asset class.

Asset Class
Assumed Asset
Allocation
Real Return
Years 1-10 (a)
Real Return
Years 11+ (b)
Public Equity 50.0%4.80%5.98%
Fixed Income 28.0%1.00%2.62%
Inflation Assets 0.0%0.77%1.81%
Private Equity 8.0%6.30%7.23%
Real Estate 13.0%3.75%4.93%
Liquidity 1.0%0.00%(0.92%)
(a) An expected inflation of 2.00% used for this period (b) An expected inflation of 2.92% used for this period Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate The following presents the City's proportionate share of the net pension liability for the Plan, as of the measurement date, calculated using the discount rate for the Plan, as well as what the City's proportionate share of the net pension liability would be if it were calculated using a discount rate that is one-percentage point lower or one-percentage point higher than the current rate:

Discount Rate -1%
(6.15%)
Current Discount Rate
(7.15%)
Discount Rate +1%
(8.15%)
Net Pension Liability $38,173,270 $19,082,199 $3,354,656 Pension Plan Fiduciary Net Position
Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports.
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CITY OF HOLLISTER

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
NOTE 11: OTHER POST EMPLOYMENT BENEFITS (OPEB)
Plan Description
The City sponsors and administers a single-employer health care plan for its employees. Medical coverage is provided through CalPERS under the Public Employees' Medical and Hospital Care Act (PEMHCA), also referred to as PERS Health. The City sets its monthly contribution rates for health insurance on behalf of active employees according to PEMHCA statutory minimum. These amounts are indexed in all future years according to the rate of medical inflation. The excess of the designated City contribution for healthcare over PEMHCA statutory minimum is contributed to a Cafeteria Plan and employees may elect to have some or all of this excess contributed on their behalf to CalPERS as an employee contribution towards healthcare benefits. The City has the authority to establish and amend the plan's benefit terms and financing requirements to the city council. No assets are accumulated in a trust that meets all of the criteria in GASB statement No. 75 paragraph 4. The City's plan does not issue a stand- alone financial report and it is not included in the report of another public entity.

Employees Covered
As of the June 30, 2021 actuarial valuation, the following current and former employees were covered by the benefit terms under the Health Plan:

Active employees 185
Inactive plan members currently receiving benefits 30
Inactive plan members entitled to but not receiving benefits 76 Total 197
Contributions
The City makes contributions based on an actuarially determined rate. For the year ended June 30, 2022, the City paid $50,963 on behalf of retirees and the estimated implicit subsidy was $67,713, for a total contribution of $118,676. The City does not have a trust.
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CITY OF HOLLISTER

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
NOTE 11: OTHER POST EMPLOYMENT BENEFITS (OPEB) (CONTINUED) Total OPEB Liability
The City's total net OPEB liability ("NOL") 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 dated June 30, 2021 based on the following actuarial methods and assumptions:

Valuation Date June 30, 2021
Funding Method Entry Age Normal Cost, level percent pay Asset Valuation Method Market value of assets
Municipal Bond Index Bond buyer general obligation 20-bond municipal bond index Discount Rate 2.16%
Participants Valued Only current active employees and retired participants and covered dependents are valued. No future entrants are considered in this valuation.

Salary Increase 3.0% per year
General Inflation Rate 2.5% per annum
Mortality Improvement MacLeod W atts Scale 2022 applied generationally from 2015.

Healthcare Trend 5.6% in 2022, fluctuates until ultimate rate of 3.9% in 2076 Service Retirement Rates:

Miscellaneous
Police & Fire
For Classic employees hired before 11/14/2011: 2.5% @ 55 For Classic employees hired on/after 11/14/2011: 2.0% @ 60 For PEPRA employees: 2.0% @ 62
For Classic employees hired before 11/14/2011: 3.0% @ 50 For Classic employees hired on/after 11/14/2011: 3.0% @ 55 For PEPRA employees: 2.7% @ 57
Spouse Coverage:

Active employees
Retired participants
65% of employees are assumed to be married and to elect coverage for their spouse in retirement. Surviving spouses are assumed to keep coverage until their death. Husbands are assumed to be 3 years older than their wives.

Existing elections for spouse coverage are assumed to continue until the spouse's death. Actual spouse ages are used, where known; if not, husbands are assumed to be 3 years older than their wives.

Changes in Assumptions
For the measurement period ended June 30, 2020, the discount rate changed from 3.51% to 2.21%. For the measurement period ended June 30, 2019, the discount rate changed from 3.87% at June 30, 2018 to 3.51%.

Assumed mortality, termination, and retirement rates were updated to the rates in the most recent available experience study (2017) of the CalPERS program. Future rates of mortality were projected to improve on a generational basis using MacLeod Watts Scale 2018, rather than SOA MP-2017. The salary scale decreased from

3.25% per year to 3.0% per year. The general inflation rate decreased from 2.75% to 2.5% per year.

Discount Rate
The discount rate used to measure the total OPEB liability was 2.16%. The City's OPEB plan is an unfunded plan, therefore the discount rate was set to the rate of tax-exempt, high-quality 20-year municipal bonds, as of the valuation date.
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CITY OF HOLLISTER

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
NOTE 11: OTHER POST EMPLOYMENT BENEFITS (OPEB) (CONTINUED) Changes in the OPEB Liability
The changes in the total OPEB liability for the Plan are as follows:

Total OPEB
Liability
Beginning Balance $5,445,496
Service cost 430,746
Interest cost 128,130
Benefit payments (156,978)
Assumption changes 1,739,530
Plan experience (350,868)
Net change 1,790,560
Ending Balance $7,236,056
Sensitivity of the total OPEB Liability to Changes in the Discount Rate The following represents the total OPEB liability of the City, as well as what the total OPEB liability would be if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate, for the measurement period ended June 30, 2021:
1% Decrease
(1.16%)
Current Discount
Rate
(2.16%)
1% Increase
(3.16%)
Total OPEB Liability $8,617,854 $7,236,056 $6,151,396
Sensitivity of the total OPEB Liability to Changes in the Health Care Cost Trent Rates The following represents the total OPEB liability of the City, as well as what the total OPEB liability would be if it were calculated using healthcare cost trend rates that are one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 2021:
1% Decrease
Current Healthcare
Cost Trend Rate 1% Increase
Total OPEB Liability $5,993,205 $7,236,056 $8,900,487
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CITY OF HOLLISTER

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
NOTE 11: OTHER POST EMPLOYMENT BENEFITS (OPEB) (CONTINUED) Recognition of Deferred Outflows and Deferred Inflows of Resources Gains and losses related to changes in total OPEB liability and fiduciary net position are recognized in OPEB expense systematically over time.

Amounts are first recognized in OPEB expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to OPEB and are to be recognized in future OPEB expense.

The recognition period differs depending on the source of the gain or loss:

Net difference between projected and actual earnings
on OPEB plan investments
5 year straight line recognition
All other amounts Straight-line recognition over the expected average remaining service lifetime (EARSL) of all members that
are provided with benefits, determined as of the
beginning of the Measurement Period. In determining
the EARSL, all active, retired and inactive (vested)
members are counted, with the latter two groups having
0 remaining service year.

OPEB Expenses and Deferred Outflows/Inflows of Resources Related to OPEB For the fiscal year ended June 30, 2022, the City recognized OPEB expense of $619,701. As of fiscal year ended June 30, 2022, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
OPEB contributions subsequent to measurement date $118,676 $- Changes in assumptions 2,302,589 462,224
Difference between expected and actual experience -801,455 Total $2,421,265 $1,263,679
$118,676 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net OPEB liability in the subsequent fiscal period. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized as follows:

For the Fiscal Year
Ending June 30,
Recognized Net
Deferred Outflows
(Inflows) of
Resources
2023 $60,825
2024 60,825
2025 60,825
2026 60,825
2027 63,449
Thereafter 732,161
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Hollister City CouncilJanuary 5, 2026

Hollister City Council
January 5, 2026