Agenda packet — Hughson City Council, June 13, 2022 (part 1 of 2)

City Council Agenda June 13, 2022
Any documents produced by the City and distributed to a majority of the City Council regarding any item on this Agenda will be made available at the City Clerk’s counter at City Hall located at 7018 Pine Street, Hughson, CA. 1 AGENDA
MONDAY, JUNE 13, 2022 – 6:00 P.M.

CITY OF HUGHSON

CITY COUNCIL MEETING

CITY COUNCIL CHAMBERS
7018 Pine Street, Hughson, CA
How to participate in, or observe the Meeting:
• In person in the City Council Chambers and submit public comment when invited during the meeting.
• Interactively, via WebEx Videoconference, by accessing this link:
https://cityofhughson.my.webex.com/cityofhughson.my/j.php?MTID=md5123cca956bc 6822bbe08e502ebc9fe
Meeting Number: 2551 444 6438 Password: HPmifJfJ833
(47643535 from phones and video systems)
• Observe only via YouTube live, by accessing this link:
https://www.youtube.com/channel/UC-PwkdIrKoMmOJDzBSodu6A?view_as=subscriber Should technology problems cause issues providing access to the meeting via WebEx and/or YouTube, the in-person meeting will proceed as scheduled. • In addition, recorded City Council meetings are posted on the City’s website the first business day following the meeting. Recorded videos can be accessed with the following link:
http://hughson.org/our-government/city-council/#council-agenda City Council Agenda June 13, 2022
Any documents produced by the City and distributed to a majority of the City Council regarding any item on this Agenda will be made available at the City Clerk’s counter at City Hall located at 7018 Pine Street, Hughson, CA. 2 CALL TO ORDER: Mayor George Carr
ROLL CALL: Mayor George Carr
Mayor Pro Tem Harold Hill
Councilmember Ramon Bawanan
Councilmember Samuel Rush
Councilmember Michael Buck
FLAG SALUTE: Mayor George Carr
INVOCATION: Hughson Ministerial Association

1. PUBLIC BUSINESS FROM THE FLOOR (No Action Can Be Taken):

Members of the audience may address the City Council on any item of interest to the public pertaining to the City and may step to the podium, state their name and city of residence for the record (requirement of name and city of residence is optional) and make their presentation. Please limit presentations to five minutes. Since the City Council cannot take action on matters not on the agenda, unless the action is authorized by Section 54954.2 of the Government Code, items of concern, which are not urgent in nature can be resolved more expeditiously by completing and submitting to the City Clerk a “Citizen Request Form” which may be obtained from the City Clerk.

2. PRESENTATIONS:

2.1: Certificate of Recognition - Alex Peralta.

2.2: State of the Hughson Unified School District Address – Brenda Smith, Superintendent of Schools.

3. CONSENT CALENDAR:

All items listed on the Consent Calendar are to be acted upon by a single action of the City Council unless otherwise requested by an individual Councilmember for special consideration. Otherwise, the recommendation of staff will be accepted and acted upon by roll call vote.

3.1: Approve the Minutes of the Regular Meeting of May 23, 2022.

3.2: Approve the Warrants Register.

3.3: Adopt Resolution No. 2022-17, Establishing a Donation and Gift Policy.

3.5: Waive the Second Reading and Adopt Ordinance No. 2022-01, Amending Section 12.24.020 and Section 12.24.150 of the Hughson Municipal Code Concerning Prohibited Acts within Public Places.

3.6: Approval for Mayor Carr and Councilmember Buck to Attend the League of California Cities Annual Conference and Designate Mayor Carr as the Voting Delegate and Councilmember Buck as the Alternate.

3.7: Approve the City of Hughson Treasurer’s Report for March 2022.

3.8: Approve the City of Hughson Treasurer’s Quarterly Investment Portfolio Report for March 2022.

3.9: Approve the Formal Response to the Stanislaus County Civil Grand Jury Measure L – Case # 22-06GJ.

4. UNFINISHED BUSINESS: NONE.

5. PUBLIC HEARING TO CONSIDER THE FOLLOWING: NONE.

6. NEW BUSINESS:

6.1: Accept the Fiscal Year 2020-2021 City of Hughson Financial Audit.

6.2: Accept an Update on the Well 7 Replacement Project Schedule Delay.

6.3: Adopt Resolution 2022-19, Restricting Water Use per the State Water Resources Control Board Emergency Regulations, Cal. Code Regs. Tit. 23, § 996, a Measure Necessary for the Immediate protection of Health and Safety and for Compliance with State Law.

6.4: Adopt Resolution No. 2022-20, Awarding the Sewer and Water Improvements on Tully Road and Sewer Improvements on 2nd Street to United Pavement Maintenance, in the Not to Exceed Amount of $1,247,017.30 and authorizing a 10% Construction Contingency as well as a 10% Set-aside for Construction Testing and Inspections and Authorize the City Manager to Execute the Final Construction Contract.

7. CORRESPONDENCE: NONE.

8.1: Staff Reports and Comments: (Information Only – No Action) City Manager:

Deputy City Clerk:

Community Development Director:

Director of Finance and Administrative Services:

Police Services:

City Attorney:

8.2: Council Comments: (Information Only – No Action)

8.3: Mayor’s Comments: (Information Only – No Action)

9. CLOSED SESSION TO DISCUSS THE FOLLOWING:

9.1: PUBLIC EMPLOYEE PERFORMANCE EVALUATION
Title: City Manager
ADJOURNMENT:

Notice Regarding Non-English Speakers:

Pursuant to California Constitution Article III, Section IV, establishing English as the official language for the State of California, and in accordance with California Code of Civil Procedures Section 185, which requires proceedings before any State Court to be in English, notice is hereby given that all proceedings before the City of Hughson City Council shall be in English and anyone wishing to address the Council is required to have a translator present who will take an oath to make an accurate translation from any language not English into the English language City Council Agenda June 13, 2022
Any documents produced by the City and distributed to a majority of the City Council regarding any item on this Agenda will be made available at the City Clerk’s counter at City Hall located at 7018 Pine Street, Hughson, CA. 5 UPCOMING EVENTS:

June 14  Parks, Recreation and Entertainment Commission Meeting, City Council Chambers, 6:00 PM Cancelled
June 14
 Planning Commission/Parks, Recreation and Entertainment Commission Special Meeting – Joint Workshop, City Council Chambers, 6:00 PM
June 15  Budget and Finance Subcommittee Meeting, City Council Chambers, 3:30 PM
June 21  Planning Commission Meeting, City Council Chambers, 6:00 PM Tentative
June 27  Economic and Development Committee Meeting, Hughson City Hall, 4:30 PM
June 27  City Council Meeting, City Council Chambers/WebEx Videoconference/YouTube Live Stream, 6:00 PM

WAIVER WARNING
If you challenge a decision/direction of the City Council in court, you may be limited to raising only those issues you or someone else raised at a public hearing(s) described in this Agenda, or in written correspondence delivered to the City of Hughson at or prior to, the public hearing(s).

Council Agendas: The City Council agenda is now available for public review at the City’s website at and City Clerk's Office, 7018 Pine Street, Hughson, California on the Friday, prior to the scheduled meeting. Copies and/or subscriptions can be purchased for a nominal fee through the City Clerk’s Office.

Questions: Contact the Deputy City Clerk at (209) 883-4054.

AFFIDAVIT OF POSTING
DATE: June 9, 2022 TIME: 5:00 PM
NAME: Ashton Gose TITLE: Deputy City Clerk

HEREBY AWARDS A CERTIFICATE OF RECOGNITION TO

ALEX PERALTA
For his outstanding citizenship, and
showing great bravery in a time of need.

Dated this 13th day of June 2022
_______________________
George Carr, Mayor
Any documents produced by the City and distributed to a majority of the City Council regarding any item on this Agenda will be made available at the City Clerk’s counter at City Hall located at 7018 Pine Street, Hughson, CA.

Meeting Date: June 13, 2022
Subject: Approval of the City Council Minutes
Presented By: Ashton Gose, Deputy City Clerk
Approved By: ___________________________
City Manager
Staff Recommendation:

Approve the Minutes of the Regular Meeting of May 23, 2022.

Background and Overview:

The draft minutes of the meeting on May 23, 2022 are prepared for the Council’s review.

CITY COUNCIL AGENDA ITEM NO. 3.1
SECTION 3: CONSENT CALENDAR
City Council Minutes May 23, 2022
Any documents produced by the City and distributed to a majority of the City Council regarding any item on this Agenda will be made available at the City Clerk’s counter at City Hall located at 7018 Pine Street, Hughson, CA. 1 MINUTES
MONDAY, MAY 23, 2022 – 6:00 P.M.

CALL TO ORDER: Mayor Pro Tem Harold Hill
ROLL CALL:

Present: Mayor Pro Tem Harold Hill
Councilmember Ramon Bawanan
Councilmember Sam Rush
Councilmember Mike Buck

Absent: Mayor George Carr
Staff Present: Merry Mayhew, City Manager
Ashton Gose, Deputy City Clerk
Eric Nims, Deputy City Attorney
Anna Nicholas, Director of Finance and Admin Services
Rachel Wyse, Community Development Director
Sarah Chavarin, Accounting Manager
Fidel Landeros, Chief of Police
Jose Vasquez, Public Works Superintendent
Jaime Velazquez, Utilities Superintendent

1. PUBLIC BUSINESS FROM THE FLOOR (No Action Can Be Taken):

NONE.

2. PRESENTATIONS: NONE.

3. CONSENT CALENDAR:

CITY OF HUGHSON

CITY COUNCIL MEETING

CITY COUNCIL CHAMBERS
7018 PINE STREET, HUGHSON, CA
City Council Minutes May 23, 2022
Any documents produced by the City and distributed to a majority of the City Council regarding any item on this Agenda will be made available at the City Clerk’s counter at City Hall located at 7018 Pine Street, Hughson, CA. 2 All items listed on the Consent Calendar are to be acted upon by a single action of the City Council unless otherwise requested by an individual Councilmember for special consideration. Otherwise, the recommendation of staff will be accepted and acted upon by roll call vote.

3.1: Approve the Minutes of the Regular Meeting of May 9, 2022.

3.2: Approve the Warrants Register.

3.3: Approval of the Treasurer’s Report for February 2022.

3.4: Approve a Month-to-Month Non-Potable Water Agreement with Hughson Unified School District and Authorization for the City Manager to Execute the Agreement.

HILL/BUCK 4-0-0-1 motion passes to approve the consent calendar as presented, with the following roll call vote:

BAWANAN RUSH BUCK HILL CARR

AYE AYE AYE AYE ABSENT

4. UNFINISHED BUSINESS: NONE.

5. PUBLIC HEARING TO CONSIDER THE FOLLOWING:

5.1: A. Adopt Resolution No. 2022-16, Establishing an Inflatable Amusement Device Policy.

B. Introduce and Waive the First Reading of Ordinance No. 2022-01, Amending Section 12.24.020 and Section 12.24.150 of the Hughson Municipal Code Concerning Prohibited Acts Within Public Parks.

Deputy City Clerk Gose presented the staff report on this item.

Mayor Pro Tem Hill opened the public hearing at 6:04 PM. There was no public comment. Mayor Pro Tem Hill closed the public hearing at 6:08 PM.

HILL/BUCK 4-0-0-1 motion passes to Adopt Resolution No. 2022-16, Establishing an Inflatable Amusement Device Policy and to Introduce and Waive the First Reading of Ordinance No. 2022-01, Amending Section 12.24.020 and Section 12.24.150 of the Hughson Municipal Code Concerning Prohibited Acts Within Public Parks., with the following roll call vote:

BAWANAN RUSH BUCK HILL CARR

AYE AYE AYE AYE ABSENT
City Council Minutes May 23, 2022
Any documents produced by the City and distributed to a majority of the City Council regarding any item on this Agenda will be made available at the City Clerk’s counter at City Hall located at 7018 Pine Street, Hughson, CA. 3 6. NEW BUSINESS:

6.1: Discussion of Options to Minimize Damage from Foul Balls at Lebright Fields and Approval for Staff to Obtain Project Costs and Bring Back to Council for Final Project Approval.

Director Wyse presented the staff report on this item.

Mayor Pro Tem Hill opened public comment at 6:35PM.

Five (5) Hughson residents provided comment on the item.

Mayor Pro Tem Hill closed public comment at 6:48PM.

BUCK/BAWANAN 4-0-0-1 motion passes to set an age limit on Field 1 at Lebright Fields to 10 year old and younger necessitating relocation of 12 year old and older players to Starn Park, and to install a taller backstop, dugouts, and the additional 20 linear feet of extension panels at Lebright Fields reducing the intrusion of foul balls onto neighboring properties, with the following roll call vote:

BAWANAN RUSH BUCK HILL CARR

AYE AYE AYE AYE ABSENT

7. CORRESPONDENCE: NONE.

8. COMMENTS:

8.1: Staff Reports and Comments: (Information Only – No Action) City Manager:

City Manager Mayhew provider a reminder regarding the Laying of the Wreath Ceremony being held at the Deputy Dennis Wallace Soccer Fields on May 30, 2022 at 8AM.

Community Development Director:

Director Wyse provided an update on the Well #7 Replacement Project.

Director of Finance and Administrative Services:

Director Nicholas informed the Council of several trainings that staff have been attending.

She also informed the Council that the 2021 Quarter 4 Sales Tax update is available on the City website.

Police Services:

Chief Landeros provided the City Council with the latest Crime Statistic Report.

City Council Minutes May 23, 2022
Any documents produced by the City and distributed to a majority of the City Council regarding any item on this Agenda will be made available at the City Clerk’s counter at City Hall located at 7018 Pine Street, Hughson, CA. 4 8.2: Council Comments: (Information Only – No Action) Councilmember Bawanan attended a Chamber of Commerce Board of Directors meeting on May 18, 2022. He attended a Fruit and Nut Festival Recap meeting on May 19, 2022. He thanked staff and Hughson Police Services for their continued hard work.

Councilmember Buck attended a West Turlock Subbassin GSA meeting. He attended a Hughson Economic Development Committee meeting on May 23, 2022.

He thanked staff for their continued hard work.

Mayor Pro Tem Hill attended a Hughson Economic Development Committee meeting on May 23, 2022. He thanked staff for their continued hard work.

8.3: Mayor’s Comments: (Information Only – No Action)
NONE.

9. CLOSED SESSION TO DISCUSS THE FOLLOWING: NONE.

ADJOURNMENT:

BUCK/BAWANAN 4-0-0-1 motion passes to adjourn the
regular meeting of May 23, 2022, at 7:09 PM with the following roll call vote:

BAWANAN RUSH BUCK HILL CARR

AYE AYE AYE AYE ABSENT
APPROVED:
____________________________
GEORGE CARR, Mayor
ATTEST:
_____________________________
ASHTON GOSE, Deputy City Clerk
Meeting Date: June 13, 2022
Subject: Approval of Warrants Register
Enclosure: Warrants Register
Presented By: Anna Nicholas, Director of Finance
Approved By: _________________________
Staff Recommendation:

Approve the Warrants Register as presented.

Background and Overview:

The warrants register presented to the City Council is a listing of all expenditures paid from May 17, 2022, through June 7, 2022.

Fiscal Impact:

There are reductions in various funds for payment of expenses.

CITY COUNCIL AGENDA ITEM NO. 3.2
SECTION 3: CONSENT CALENDAR
6/7/2022 4:56:53 PM Page 1 of 5
Check Report
Hughson By Check Number
Date Range: 05/17/2022 - 06/07/2022
Vendor Number Vendor Name Payment Date Payment Type Discount Amount Payment Amount Number Payable # Payable Type Post Date Payable Description Discount Amount Payable Amount Bank Code: Payable Bank-Payable Bank
01420 CALIFORNIA STATE DISBURSEMENT UNIT 05/17/2022 Regular 0.00 224.12 55296 INV0007145 Invoice 05/16/2022 INCOME WITHHOLDING FOR CHILD SUPPORT 0.00 224.12 00016 ABS PRESORT 05/20/2022 Regular 0.00 1,324.10 55297 94715 Invoice 05/10/2022 BILL PRINTING- May 2022 0.00 1,324.10 00049 ALLIED ADMINISTRATORS 05/20/2022 Regular 0.00 2,165.36 55298 INV0007170 Invoice 05/18/2022 DELTA DENTAL - June 2022 0.00 2,165.36 01603 Amazon Capital Services, Inc. 05/20/2022 Regular 0.00 367.57 55299 1739-QXDM-V1WK Invoice 05/13/2022 Cell Phone Cover 0.00 13.74 1TQC-VX4C-F34M Invoice 05/17/2022 code reader and batteries 0.00 353.83 00094 AT&T MOBILITY 05/20/2022 Regular 0.00 398.31 55300 287303621604X0… Invoice 05/02/2022 PHONES 0.00 398.31
00284 CHARTER COMMUNICATION 05/20/2022 Regular 0.00 343.80 55301 0013555050122 Invoice 05/01/2022 IP ADDRESS- PINE ST 0.00 250.91 0054047051022 Invoice 05/10/2022 IP ADDRESS- 1ST 0.00 92.89 00305 CITY OF HUGHSON 05/20/2022 Regular 0.00 4,781.97 55302 INV0007172 Invoice 05/01/2022 LLDS & STARN PARK 0.00 4,781.97 00463 EXPRESS PERSONNEL SERVICE 05/20/2022 Regular 0.00 1,003.20 55303 27141857 Invoice 05/04/2022 Extra Help- PW 0.00 1,003.20 00614 HUGHSON FARM SUPPLY 05/20/2022 Regular 0.00 240.53 55304 H418471 Invoice 05/17/2022 prunners for streets 0.00 240.53 00627 HUGHSON NAPA AUTO & TRUCK 05/20/2022 Regular 0.00 39.29 55305 337628 Invoice 05/17/2022 fittings 0.00 28.00
337645 Invoice 05/17/2022 fittins 0.00 11.29
00623 HUGHSON TIRE 05/20/2022 Regular 0.00 20.00 55306
404838 Invoice 05/17/2022 tire repair 0.00 20.00
00755 MCR ENGINEERING, INC 05/20/2022 Regular 0.00 7,320.00 55307 16981 Invoice 04/07/2022 Well 7 Site Improvements 0.00 7,320.00 00611 Mid Valley Publications 05/20/2022 Regular 0.00 129.50 55308 338869 Invoice 05/10/2022 Public Hearing by City Council 0.00 129.50 01435 North Valley Labor Compliance Services 05/20/2022 Regular 0.00 1,687.50 55309 004890 Invoice 03/30/2022 Well 7 Phase II Tank Construction 0.00 712.50 004903 Invoice 05/01/2022 Well 7 Phase II Tank Construction 0.00 975.00 00837 NORTHSTAR CHEMICAL 05/20/2022 Regular 0.00 2,404.16 55310 223226 Invoice 05/11/2022 Chemicals supply Blanket PO 0.00 2,077.31 223227 Invoice 05/11/2022 Chemicals supply Blanket PO 0.00 326.85 01090 SUTTER HEALTH PLUS 05/20/2022 Regular 0.00 17,045.94 55311 2094043 Invoice 05/02/2022 MEDICAL INSURANCE- June 2022 0.00 17,045.94 01738 Tesla Energy Operations 05/20/2022 Regular 0.00 390.63 55312 INV0007167 Invoice 07/20/2021 Building Permit Refund - Tesla Energy 0.00 390.63 01709 The Lincoln National Life Insurance Company 05/20/2022 Regular 0.00 438.15 55313 INV0007169 Invoice 05/18/2022 Coverage for June 2022 0.00 438.15 Check Report Date Range: 05/17/2022 - 06/07/2022
6/7/2022 4:56:53 PM Page 2 of 5
Vendor Number Vendor Name Payment Date Payment Type Discount Amount Payment Amount Number Payable # Payable Type Post Date Payable Description Discount Amount Payable Amount 01206 WARDEN'S OFFICE 05/20/2022 Regular 0.00 6.85 55314 20777741-0 Invoice 05/12/2022 MISC OFFICE SUPPLIES 0.00 6.85 00886 PIZZA FACTORY 05/23/2022 Regular 0.00 31.28 55315 INV0007174 Invoice 05/23/2022 Food for EDC Meeting 5/23 0.00 31.28 00032 AFLAC 05/27/2022 Regular 0.00 461.01 55316
327643 Invoice 05/12/2022 AFLAC 0.00 461.01
01603 Amazon Capital Services, Inc. 05/27/2022 Regular 0.00 123.87 55317 1DTC-NLM1-NRQD Invoice 05/17/2022 COFFEE 0.00 123.87
01597 Anna Nicholas 05/27/2022 Regular 0.00 90.60 55318 INV0007178 Invoice 05/13/2022 Meal for Management Workshop 5/13/2022 0.00 90.60 01736 Antonio Hidalgo's Tree Service, Inc 05/27/2022 Regular 0.00 7,700.00 55319 0703 Invoice 05/25/2022 tree removal on fox lld 0.00 7,700.00 01601 Colantuono, Highsmith & Whatley, PC 05/27/2022 Regular 0.00 5,915.00 55320 51339 Invoice 04/05/2022 Professional Services 0.00 3,705.00 51676 Invoice 05/16/2022 Professional Services 0.00 2,210.00 01538 Colonial Life 05/27/2022 Regular 0.00 626.54 55321 54059070501896 Invoice 05/01/2022 Colonial Life 0.00 626.54 01741 Derek Stanhope 05/27/2022 Regular 0.00 100.00 55322 INV0007180 Invoice 05/15/2022 Starn Park Rental Deposit Stanhope 0.00 100.00 00463 EXPRESS PERSONNEL SERVICE 05/27/2022 Regular 0.00 1,064.00 55323 27166924 Invoice 05/11/2022 Extra Help- PW 0.00 1,064.00 00522 GEOANALYTICAL LABORATORIE 05/27/2022 Regular 0.00 64.00 55324 I2C2217 Invoice 05/25/2022 lab test 0.00 64.00
00528 GILTON SOLID WASTE MANAGE 05/27/2022 Regular 0.00 68,794.77 55325 INV0007192 Invoice 04/30/2022 GARBAGE SERVICE- MARCH 0.00 68,794.77 01612 GreatAmerica Financial Svcs. 05/27/2022 Regular 0.00 358.92 55326 31547025 Invoice 04/29/2022 LEASE 0.00 358.92
00614 HUGHSON FARM SUPPLY 05/27/2022 Regular 0.00 100.92 55327 H419400 Invoice 05/25/2022 prunners for adrian 0.00 100.92 00677 JORGENSEN & CO. 05/27/2022 Regular 0.00 191.68 55328 5999521 Invoice 05/25/2022 senior center semi annual service 0.00 191.68 01739 Juan Ramirez 05/27/2022 Regular 0.00 100.00 55329 INV0007179 Invoice 05/15/2022 Starn Park Rental Deposit Ramirez 0.00 100.00 01451 Leah Brasher 05/27/2022 Regular 0.00 100.00 55330 INV0007181 Invoice 05/14/2022 Starn Park Rental Deposit Brasher 0.00 100.00 01735 Merced Community College District 05/27/2022 Regular 0.00 92.00 55331 10265129 Invoice 05/13/2022 Emotional Intelligence Training - Gose, Chav… 0.00 46.00 10265131 Invoice 05/13/2022 Emotional Intelegence Traingin - Mayhew, N… 0.00 46.00 00822 NESTLE WATERS 05/27/2022 Regular 0.00 66.98 55332 12E0025664277 Invoice 05/20/2022 water service 0.00 66.98 00824 NEUMILLER & BEARDSLEE 05/27/2022 Regular 0.00 6,283.00 55333 326542 Invoice 05/16/2022 LEGAL SERVICES 0.00 1,600.00
327054 Invoice 05/16/2022 LEGAL SERVICES 0.00 4,683.00
00884 PITNEY BOWES 05/27/2022 Regular 0.00 430.77 55334 INV0007176 Invoice 05/24/2022 LEASE 0.00 430.77
00901 PREFERRED ALLIANCE, INC. 05/27/2022 Regular 0.00 104.49 55335 Check Report Date Range: 05/17/2022 - 06/07/2022
6/7/2022 4:56:53 PM Page 3 of 5
Vendor Number Vendor Name Payment Date Payment Type Discount Amount Payment Amount Number Payable # Payable Type Post Date Payable Description Discount Amount Payable Amount 0174587-IN Invoice 04/30/2022 OFF-SITE PARTICIPANT 0.00 104.49 00902 PRICE FORD 05/27/2022 Regular 0.00 308.10 55336
12677 12673 126… Invoice 05/25/2022 parts for pw21 0.00 308.10 00906 PROVOST & PRITCHARD CONSU 05/27/2022 Regular 0.00 10,963.70 55337 92187 Invoice 05/13/2022 TCP Treatment Design 0.00 10,963.70 01434 State of California Department of Justice 05/27/2022 Regular 0.00 32.00 55338 579052 Invoice 05/04/2022 Fingerprints Rosales 0.00 32.00 01069 STEELEY, JARED WATER & WA 05/27/2022 Regular 0.00 3,659.50 55339 9420 Invoice 05/02/2022 Monthly Professional Services Blanket PO 0.00 3,659.50 01144 TROPHY WORKS 05/27/2022 Regular 0.00 16.18 55340
910825 Invoice 05/24/2022 Name Plate - Eric Nims 0.00 16.18 01149 TURLOCK IRRIGATION DIST. 05/27/2022 Regular 0.00 26,728.16 55341 INV0007182 Invoice 05/16/2022 ELECTRIC 0.00 26,728.16
01192 VISION SERVICE PLAN 05/27/2022 Regular 0.00 514.46 55342 INV0007175 Invoice 05/19/2022 MEDICAL INSURANCE WITHHELD- JUNE 2022 0.00 514.46 01206 WARDEN'S OFFICE 05/27/2022 Regular 0.00 117.37 55343 2078385-0 Invoice 05/24/2022 MISC OFFICE SUPPLIES 0.00 117.37 01220 WESTURF INC. 05/27/2022 Regular 0.00 41,422.92 55344 74543 Invoice 05/05/2022 Lazer 96" Diesel Mower 0.00 41,422.92 01249 WORLD OIL ENVIRONMENTAL SERVICES 05/27/2022 Regular 0.00 95.00 55345 I500-00825799 Invoice 05/25/2022 oil recycling 0.00 95.00 01420 CALIFORNIA STATE DISBURSEMENT UNIT 06/03/2022 Regular 0.00 224.12 55346 INV0007203 Invoice 06/01/2022 INCOME WITHHOLDING FOR CHILD SUPPORT 0.00 224.12 00005 A&A PORTABLES, INC 06/07/2022 Regular 0.00 80.78 55347 114-13141318 Invoice 05/31/2022 Well 7 Fence Rental 0.00 80.78 01742 Alfonso Brajas 06/07/2022 Regular 0.00 560.00 55348 INV0007219 Invoice 06/06/2022 Senior Center Rental Refund Barajas 0.00 560.00 01603 Amazon Capital Services, Inc. 06/07/2022 Regular 0.00 17.96 55349 1WN7-VYGY-RD76 Invoice 05/25/2022 Office Supplies 0.00 17.96 00104 AYERA TECHNOLOGIES INC. 06/07/2022 Regular 0.00 168.00 55350 371344 Invoice 06/01/2022 Net Service 0.00 168.00
00109 BADGER METER, INC 06/07/2022 Regular 0.00 1,903.74 55351 80096376 Invoice 06/06/2022 service badger 0.00 1,903.74 00123 BAY ALARM CO 06/07/2022 Regular 0.00 199.50 55352 2256342220515M Invoice 06/06/2022 monitoring 0.00 199.50 01585 Bay City Equipment Industries Inc 06/07/2022 Regular 0.00 2,906.73 55353 W258215 Invoice 06/06/2022 Genset service well8 0.00 738.15 W258253 Invoice 06/06/2022 Genset service Well3 0.00 2,168.58 00463 EXPRESS PERSONNEL SERVICE 06/07/2022 Regular 0.00 6,189.79 55354 27204550 Invoice 05/18/2022 Extra Help- PW 0.00 2,200.96 27237477 Invoice 05/25/2022 Extra Help- PW 0.00 3,988.83 00464 EZ NETWORK SOLUTIONS 06/07/2022 Regular 0.00 5,253.10 55355 41298 Invoice 05/31/2022 IT SERVICES 0.00 857.00
TS41372 Invoice 06/01/2022 IT SERVICES 0.00 4,396.10
00528 GILTON SOLID WASTE MANAGE 06/07/2022 Regular 0.00 1,895.07 55356 Check Report Date Range: 05/17/2022 - 06/07/2022
6/7/2022 4:56:53 PM Page 4 of 5
Vendor Number Vendor Name Payment Date Payment Type Discount Amount Payment Amount Number Payable # Payable Type Post Date Payable Description Discount Amount Payable Amount HUGHSS-070 Invoice 05/27/2022 STREET SWEEPING May 2022 0.00 1,895.07 00546 GRANITE TELECOMMUNICATION 06/07/2022 Regular 0.00 1,364.12 55357 563103726 Invoice 06/01/2022 PHONES 0.00 1,364.12
01254 HUGHSON AUTOMOTIVE 06/07/2022 Regular 0.00 284.88 55358 5580 Invoice 06/06/2022 pw 21 repairs 0.00 284.88
01583 Hunt & Sons, Inc. 06/07/2022 Regular 0.00 3,347.59 55359 INV0007220 Invoice 05/12/2022 Gasoline Blanket PO 0.00 3,347.59 01398 Jose Vasquez 06/07/2022 Regular 0.00 143.81 55360 22490 Invoice 06/02/2022 Parts for Irrigation 0.00 143.81 01632 Metropolitan Transportation Commission 06/07/2022 Regular 0.00 4,750.00 55361 EST-9126 Invoice 05/26/2022 Street Saver Annual Subcription 0.00 4,750.00 00807 Municipal Maintenance Equipment, Inc 06/07/2022 Regular 0.00 55.19 55362 0163877-CM Credit Memo 09/30/2021 Return of Invoice 0162240 0.00 -1,217.74 0164048-IN Invoice 06/06/2022 vac truck hose reel 0.00 1,272.93 00879 PG & E 06/07/2022 Regular 0.00 51.84 55363
INV0007218 Invoice 05/25/2022 UTILITIES 0.00 51.84
01580 Quincy Compressor LLC 06/07/2022 Regular 0.00 1,644.14 55364 614029 Invoice 06/06/2022 well 8 comp service 0.00 1,644.14 01599 SMILE BUSINESS PRODUCTS, INC 06/07/2022 Regular 0.00 159.67 55365 1040407 Invoice 05/24/2022 COPIES 0.00 159.67
01520 SWRCB-DWOCP 06/07/2022 Regular 0.00 105.00 55366
INV0007234 Invoice 05/25/2022 D1 certs renewal (jose) 0.00 105.00 01161 UNITED RENTALS 06/07/2022 Regular 0.00 2,502.73 55367 205715507-001 Invoice 05/05/2022 Barrier Walll - Fruit and Nut Fetival 0.00 2,502.73 00543 W.W. GRAINGER, INC. 06/07/2022 Regular 0.00 420.58 55368 9314076275 Invoice 06/07/2022 blower motrors 0.00 420.58 01224 WILBUR-ELLIS COMPANY 06/07/2022 Regular 0.00 1,248.87 55369 14799992 Invoice 06/06/2022 weed spray 0.00 1,248.87
01225 WILLDAN ENGINEERING 06/07/2022 Regular 0.00 15,056.50 55370 00336239 Invoice 05/20/2022 City Engineering Services 0.00 1,350.00 00336246 Invoice 05/20/2022 Parkwood 0.00 5,400.00
00623164 Invoice 05/16/2022 WHITMORE AVE SIDEWALK 0.00 8,306.50 Regular Checks
Manual Checks
Voided Checks
Discount
Payment
Payment Type Count
Bank Code Payable Bank Summary
Bank Drafts
EFT's
75 0
0 0
0 0.00

0.00 0.00

0.00 0.00
75 0.00
Payment
267,521.91

0.00 0.00

0.00 0.00
267,521.91
Payable
Count
89 0
0 0
0 89
Check Report Date Range: 05/17/2022 - 06/07/2022
6/7/2022 4:56:53 PM Page 5 of 5
All Bank Codes Check Summary
Payment Type Discount
Payment
Count Payment
Payable
Count
Regular Checks
Manual Checks
Voided Checks
Bank Drafts
EFT's
75 0
0 0
0 0.00

0.00 0.00

0.00 0.00
75 0.00
267,521.91

0.00 0.00

0.00 0.00
267,521.91
89 0
0 0
0 89
Fund Name Period Amount
Fund Summary
999 POOLED CASH/CONSOLIDATED CASH 5/2022 216,988.20
999 POOLED CASH/CONSOLIDATED CASH 6/2022 50,533.71
267,521.91
Meeting Date: June 13, 2022
Subject: Adopt Resolution No. 2022-17, Establishing a Donation and Gift Policy
Enclosure: Draft Donation and Gift Policy
Presented By: Ashton Gose, Management Analyst
Approved By:
___________________________
City Manager
Staff Recommendation:

Adopt Resolution No. 2022-17, Establishing a Donation and Gift Policy.

Background:

A donation is a contribution made without expectation of goods, services, or significant benefit or recognition in return. The City every so often accepts donations from individuals, community groups, and businesses, typically monetary, and designated for a specific purpose, including City sponsored events.

Currently, the City does not have an adopted policy in place which establishes a formal process for the acceptance of donations and gifts made to the City, and/or its employees.

Discussion:

Staff has drafted a policy that will not only establish a formal process for the acceptance and documentation of donations and gifts made to the City, but also establish standards for City employees, and City officials regarding the acceptance of gifts during the performance of City business.

The following is a summary of the main elements of the attached policy. • Donation: a contribution made to the City without expectation of goods, services, or significant benefit or recognition in return. Donations may be offered in the form of money or contributions of real or personal property. A donation may be undesignated, where the donor has placed no limitation on its use, or designated, where the donor has CITY COUNCIL AGENDA ITEM NO. 3.3
SECTION 3: CONSENT CALENDAR
designated its use to a specific purpose (e.g., City sponsored events like National Night Out, Tent or Trunk and Treat, etc.). Donations that, if accepted, would obligate the City to enter into a service, procurement, or other agreement shall not be considered a donation. • Gift: Any payment or other benefit that confers a personal benefit on the recipient for which they have not provided equal or greater consideration to the donor (e.g., holiday gift baskets, etc.). • Donations may only be accepted when they have a purpose consistent with the City’s goals and objectives and are in the best interest of Hughson.
• Donors shall not expect, nor shall the City grant, any extra consideration to the donor in relation to City procurement, regulatory matters, or any other business, services, or operations of the City. • Designated, and undesignated donations of $1,000 or less may be accepted by the City Manager. Designated, and undesignated donations of more than $1,000 must be brought to the City Council for approval and acceptance. The City Manager may only accept or decline any donation after consideration of an immediate or initial expenditure, and consideration of the potential and extent of the City’s obligation to maintain, match or supplement the donation. The City Manager may choose to request City Council consideration of any donation.
• The City Council shall consider proposed donations beyond the authority of the City Manager set forth above. The City Council may accept or decline any donation at its sole discretion.
• Before acceptance of a designated or an undesignated donation valued at more than $1,000, which requires the acceptance of the City Council, the respective obligations of the donor and the City shall be set forth in a donation agreement. A sample donation agreement is attached as Exhibit B. The City Manager or City Council may require donation agreements for donations valued at any amount. • A list of accepted donations shall be forwarded for information on an annual basis to the City Council by the City Clerk’s Office.

Fiscal Impact:

There is no fiscal impact with the adoption of the Donation and Gift Policy.

There could be positive fiscal impacts with future acceptances of donations or gifts should they be made to the City, such as offsets to program expenses or providing additional resources to enhance activities or events.

CITY OF HUGHSON

CITY COUNCIL
RESOLUTION NO. 2022-17

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUGHSON

ESTABLISHING A DONATION AND GIFT POLICY
WHEREAS, the City of Hughson does not have a current policy in place for the acceptance of donations and gifts made to the City; and WHEREAS, from time to time the City accepts donations and gifts from individuals, community groups, and businesses; and
WHEREAS, the City of Hughson City Council desires to adopt a policy which establishes a formal process for acceptance and documentation of donations and gifts made to the City, and also provides guidance when individuals, community groups, and businesses wish to make donations to the City, and also establishes the standards for City employees and City officials regarding the acceptance of gifts during the performance of City business; and
NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Hughson adopts the Donation and Gift Policy (“Policy”) attached hereto as “Attachment A” and directs the City Manager to implement the Policy immediately.

PASSED AND ADOPTED, by the City Council of the City of Hughson at its regular meeting held on this 13th day of June, 2022 by the following roll call votes:

AYES:

NOES:

ABSTENTIONS:

ABSENT:

APPROVED:
___________________
GEORGE CARR, Mayor
ATTEST:
_____________________________
ASHTON GOSE, Deputy City Clerk
Attachment A
Resolution No. ####-## Approved by the Hughson City Council on DATE

CITY OF HUGHSON

DONATION AND GIFT POLICY
A. PURPOSE:

The purpose of this policy is to establish a formal process for acceptance and documentation of donations and gifts made to the City. This policy provides guidance when individuals, community groups, and businesses wish to make donations to the City.

This policy also establishes the standards for City employees and City officials regarding the acceptance of gifts during the performance of City business.

B. DEFINITIONS:

1. Donation: A contribution made to the City without expectation of goods, services, or significant benefit or recognition in return. Donations may be offered in the form of money or contributions of real or personal property. A donation may be undesignated, where the donor has placed no limitation on its use, or designated, where the donor has designated its use to a specific purpose (e.g., City sponsored events like National Night Out, Tent or Trunk and Treat, etc.).

Donations that, if accepted, would obligate the City to enter into a service, procurement, or other agreement shall not be considered a donation.

2. Gift: Any payment or other benefit that confers a personal benefit on the recipient for which they have not provided equal or greater consideration to the donor (e.g., holiday gift baskets, etc.).

3. Donor: Any organization or individual who provides the City with a donation.

4. Donation Agreement: An agreement between the City and the donor that details any restrictions on a donation as well as the respective obligations of the donor and the City.

C. GENERAL PROVISIONS:

1. The City welcomes undesignated donations, and designated donations, that enhance City services, programs, activities, and/or events, reduce costs that the City would incur in the absence of the donation, or that otherwise provide a benefit to the City. The City may decline any donation without comment or cause.

2. Donations may only be accepted when they have a purpose consistent with the City’s goals and objectives and are in the best interest of Hughson. The City must always consider the public trust and comply with all applicable laws when accepting donations. Donations may not be used for personal financial gain of any City elected or appointed official, or employee.

Attachment A
Resolution No. ####-## Approved by the Hughson City Council on DATE

3. Employees and/or elected officials of the City shall follow the provisions listed in City of Hughson Ordinance No. 04-03, Code of Ethics and City of Hughson Resolution No. 04-56, Conflict of Interest Code as they relate to the receipt of gifts.

4. Anonymous gifts shall be delivered to the City Manager for appropriate disposition.

5. Gifts offered for gratuitous purposes (e.g., holiday gift baskets, etc.) to any employee, department or the City shall be made available to benefit all employees.

6. This policy does not prohibit a City official from accepting anything of value by way of a gift when such a gift is made to and accepted on behalf of, the City of Hughson.

All such gifts to the City shall be forwarded to the City Manager for compliance with this policy whenever possible; the City Manager will ensure that all such gifts are shared by all City staff.

7. Under the Political Reform Act, public officials and employees are required to disclose certain personal financial holdings as outlined in California Government Code sections 81000-91014. The Fair Political Practices Commission requires all public officials and employees to file a ‘conflict-of-interest statement,’ known as Form 700. In Schedule D of Form 700, details requirements in reporting gifts of a dollar value and shall be used.

8. Donors shall not expect, nor shall the City grant, any extra consideration to the donor in relation to City procurement, regulatory matters, or any other business, services, or operations of the City.

D. PROCEDURES:

All donations to the City, including offers to employees related to the City, shall immediately be submitted for consideration for acceptance. Based on the value of the donation offered as outlined below, appropriate City staff shall review every donation and determine if the benefits to be derived warrant acceptance of the donation. The following points list the threshold amounts for donation acceptance.

1. Acceptance of Donations:
a. Designated, and undesignated donations of $1,000 or less may be accepted by the City Manager. Designated, and undesignated donations of more than $1,000 must be brought to the City Council for approval and acceptance. The City Manager may only accept or decline any donation after consideration of an immediate or initial expenditure, and consideration of the potential and extent of the City’s obligation to maintain, match or supplement the donation. The City Manager may choose to request City Council consideration of any donation. b. The City Council shall consider proposed donations beyond authority of the City Manager set forth above. The City Council may accept or decline any donation at its sole discretion.
c. Before acceptance of any donation, a Donation Acceptance Form, or other applicable form, is required to be completed by the City Manager’s Office. A sample Donation Acceptance Form is attached as Exhibit A.

Attachment A
Resolution No. ####-## Approved by the Hughson City Council on DATE d. Before acceptance of a designated or an undesignated donation valued at more than $1,000, which requires the acceptance of the City Council, the respective obligations of the donor and the City shall be set forth in a donation agreement. A sample donation agreement is attached as Exhibit B. The City Manager or City Council may require donation agreements for donations valued at any amount. e. When donations with a value more than $100 are accepted, or upon the request of the donor, the City will issue the donor a receipt indicating the amount of the donation within 30 days of receiving the donation. The donation receipt will also include the date of the donation, the name of the donor, the purpose of the donation (if a designated donation) and note that the donor received no goods or services in exchange. The original receipt shall be submitted to the donor and the City shall retain a copy. A sample donation receipt is attached as Exhibit C.

2. Distribution of Donations and Gifts:
a. Tangible items will be distributed to appropriate City departments for use or, at the discretion of the Department Director or City Manager, disposed of in an appropriate manner according to this policy.
b. Donations of cash for designated donations will be deposited into the appropriate revenue account for the designated City service, program, activity, and/or event. c. Donations of cash for undesignated donations under $1,000 will be deposited into the City’s General Fund donation account. Undesignated donations in an amount over $1,000 will be distributed at the direction of City Council.

3. Dissemination of Information:
a. A list of accepted donations shall be forwarded for information on an annual basis to the City Council by the City Clerk’s Office.
b. A copy of each Donation Acceptance Form for accepted donations, and a copy of each donation receipt shall be forwarded for information to the Finance Department.
c. Each original Donation Acceptance Form shall be maintained by the City Clerk’s Office.

Attachment A
Resolution No. ####-## Approved by the Hughson City Council on DATE

CITY OF HUGHSON, CALIFORNIA

DONATION AND GIFT POLICY ACKNOWLEDGEMENT
I have received and read the City of Hughson Donation and Gift Policy and understand its provisions. I further understand that when I sign this acknowledgement form it will be placed in my personnel file.

Employee (PRINT NAME)
Signature
Date
Attachment A
Resolution No. ####-## Approved by the Hughson City Council on DATE Exhibit A

CITY OF HUGHSON

DONATION ACCEPTANCE FORM
Name of Donor:

Address: City: State: Zip:

Description of donation:

Donor estimate of current value:

Potential immediate or initial acquisition or installation cost, any on-going maintenance or replacement cost:
_______________________________________________________________________________ Intended use: __
Conditions of acceptance or donor designation: __
Remarks: _____________________________________________________________________________ Please Circle One: ACCEPTED / DENIED
_______________________ ___________________________
Date City Manager’s Signature
_______________________ ___________________________
Date Submitted to Council Date Approved/Denied by Council _______________________ ____________________________
Date Mayor’s Signature (if applicable)
cc: City Council, Finance Department, City Clerk
Attachment A
Resolution No. ####-## Approved by the Hughson City Council on DATE Exhibit B

CITY OF HUGHSON

STANDARD DONATION AGREEMENT
The undersigned Donor wishes to make a donation to the City of Hughson as described in more detail below.

Donor is (check and complete all that apply):

Donating $ ________________ in a lump sum.

Donating $ ________________ in ___________________ (monthly, quarterly, annually, etc.) payments of $ _________________ in __________ installments.

Donating the following (describe products, services, real property, etc.):
_______________________________________________________________________________ _______________________________________________________________________________ Check the following boxes if applicable:

The City’s acceptance of the donation described above is subject to the conditions specified on Attachment 1.

This donation is designated to the following use(s):
_______________________________________________________________________ _______________________________________________________________________ This donation is being made at the request of Councilmember/City Staff Member.

Name: __________________________________________________________________ In connection with administering this agreement, Donor and City shall work through the following primary representatives:

Primary Representative:

City of Hughson Donor
Address:

Telephone:

Email:

Attachment A
Resolution No. ####-## Approved by the Hughson City Council on DATE In addition to the foregoing, Donor and City understand and agree that:

1. The City will provide Donor with a donation receipt indicating the amount of the donation or estimated value of goods or services donated within 30 days of receiving the donation.

2. Except as provided above, the City may use the donation in any manner at its sole discretion and Donor has no right or obligation to control the City’s use of the donation.

3. Donor has not and will not receive any goods or services in exchange for the donation and the City will not grant any extra consideration to the donor in relation to City procurement, regulatory matters, or any other business, services, or operations of the City.

4. Donor confirms that unless indicated otherwise above this donation is not made at the behest of a City Councilmember, or any City staff member.

IN WHITNESS WHEREOF, The parties hereto have executed this agreement.

Donor City of Hughson
____________________________ _________________________
Merry Mayhew, City Manager
___________ ____________
Name Title
____________________________ _________________________
Date Date
ATTEST:
_________________________
Ashton Gose, Deputy City Clerk
_________________________
Date
AS APPROVED TO FORM:
_________________________
Daniel Schroeder, City Attorney
_________________________
Date
Attachment A
Resolution No. ####-## Approved by the Hughson City Council on DATE Exhibit C
City of Hughson Donation Receipt
Donation Date: ________________________________________________________ Donor Name: _________________________________________________________ Donor Address: _______________________________________________________ a monetary contribution of $ __________________________ a non-monetary contribution consisting of:
[describe goods, services, property, etc.]
_____________________________________________________________________ _____________________________________________________________________ No goods or services were provided by the City of Hughson in return for the contribution.

The City sincerely appreciates your donation.
________________________
City Manager
Meeting Date: June 13, 2022
Subject: Approval to Adopt Resolution No. 2022-18, Making the Required AB 361 Findings for the use of Teleconference
Meetings for the Period June 13, 2022 – July 13, 2022
Presented By: Daniel J. Schroeder, City Attorney
Approved By: ___________________________
City Manager
Staff Recommendation:

Adopt Resolution No. 2022-18, making the required AB 361 findings for the use of teleconference meetings for the period June 13, 2022 – July 13, 2022.

Background:

On March 4, 2020, Governor Gavin Newson issued a Proclamation of a State of Emergency in response to the outbreak of COVID-19, which remains in effect.

Throughout the State of Emergency, the Governor issued a series of Executive Orders to reduce the spread of COVID-19.

On March 12, 2020, the Governor issued Executive Order N-25-20 waiving certain requirements of the Ralph M. Brown Act (Brown Act) making it easier for local agencies to hold public meetings via teleconference. On March 17, 2020, the Governor issued Executive Order N-29-20 which superseded a portion of Executive Order N-25-20 and identified the ability of local agencies to continue with teleconferenced meetings provided certain requirements for public participation were met. On June 11, 2021, the Governor issued Executive Order N-08-21 which continued the waiver of the teleconference provisions in the Brown Act through September 30, 2021.

With the expiration of the Executive Orders, the Legislature introduced Assembly Bill 361 (AB 361), which allows the continued use of teleconferencing if specific requirements are met. On September 16, 2021, the Governor signed AB 361 into law. AB 361 amends section 54953 of the Brown Act and allows a local agency to use teleconferencing without complying with certain provisions of the Brown Act under certain circumstances and if certain findings are made.

CITY COUNCIL AGENDA ITEM NO. 3.4
SECTION 3: CONSENT CALENDAR
Discussion:

AB 361 amends Section 54953 of the Government Code to allow a legislative body of a local agency to meet remotely without complying with the teleconference requirements imposed by the Brown Act such as agenda posting at teleconference locations, physical location access by the public, or establishing a quorum within the boundaries of the agency. The agency may do so if one of three scenarios exists, all of which requires the Governor has proclaimed a State of Emergency pursuant to Government Code section 8625:
(A) State or local officials have imposed or recommended measures to promote social distancing;
(B) The legislative body is holding a meeting for the purpose of determining, whether as a result of the emergency, meeting in person would present imminent risks to the health or safety of attendees;
(C) The legislative body is holding a meeting and has determined, that, as a result of the emergency, meeting in person would present imminent risks to the health or safety of attendees.

Any boards and committees that are required to comply with the Brown Act that holds a meeting under any of the scenarios identified above must continue to post an agenda within the time periods required by the Brown Act and ensure the public is able to address the board or committee directly through teleconference means. If a technological disruption prevents the board or committee from broadcasting the meeting or receiving public comments in real time, the board or committee cannot take further action until the technological function is restored.

If the proclaimed State of Emergency remains in effect, and if Hughson City Council wishes to continue meeting under the modified rules, then the Council must adopt a resolution containing the following findings: (1) the State of Emergency continues to directly impact the ability of the members to meet safely in person; or (2) state or local officials continue to impose or recommend measures to promote social distancing. The Council must reconsider and reconfirm the findings no later than every thirty (30) days.

If consecutive regular meetings fall outside the 30-day window, the Council should hold a special meeting to re-authorize the AB 361 findings. If the Council does not adopt a resolution making the findings required under AB 361, or if the authorization lapses, it will be required to comply with the traditional teleconference rules contained in the Brown Act for future meetings or until the Council utilizes AB 361 at a future date. In that scenario, the Council will be required to post an agenda at each teleconference location, teleconference locations will need to be identified on the agenda and accessible to the public, and a quorum of the Council will need to be established within the boundaries of the agency.

AB 361 allows the Council to hold its first meeting using AB 361 without previously adopting the AB 361 teleconference procedures as long as the Council makes the finding required by AB 361 within 30 days of that meeting. Adopting Resolution No. 2022-18 will make those findings now and allow the Council to continue to hold its meetings remotely effective immediately through July 13, 2022.

Fiscal Impact:

There is no direct fiscal impact in making the required AB 361 findings. 1 1584846-1

CITY OF HUGHSON

CITY COUNCIL
RESOLUTION NO. 2022-18

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUGHSON DETERMINING

TO CONDUCT MEETINGS USING TELECONFERENCING PURSUANT TO
GOVERNMENT CODE 54953 AS AMENDED BY AB 361 FOR THE PERIOD JUNE 13, 2022 TO JULY 13, 2022.

WHEREAS, the City of Hughson (“City”) is committed to preserving and nurturing public access and participation in its meetings; and
WHEREAS, all meetings of the City legislative bodies are open and public, as required by the Ralph M. Brown Act (Cal. Gov. Code 54950 – 54963), so that any member of the public may attend, participate, and watch the City legislative bodies conduct their business; and
WHEREAS, the Brown Act, Government Code section 54953(e), as amended by AB 361 (2021), makes provisions for remote teleconferencing participation in meetings by members of a legislative body, without compliance with the requirements of Government Code section 54953(b)(3), subject to the existence of certain conditions; and WHEREAS, a required condition is that a state of emergency is declared by the Governor pursuant to Government Code section 8625, proclaiming the existence of conditions of disaster or of extreme peril to the safety of persons and property within the state caused by conditions as described in Government Code section 8558; and WHEREAS, it is further required that state or local officials have imposed or recommended measures to promote social distancing, or, the legislative body meeting in person would present imminent risks to the health and safety of attendees; and WHEREAS, on March 4, 2020, the Governor proclaimed a State of Emergency to exist in California as a result of the threat of COVID-19; and WHEREAS, Cal-OSHA adopted emergency regulations (Section 3205) imposing requirements on California employers, including measures to promote social distancing; and
WHEREAS, the California Department of Public Health and the Centers for Disease Control and Prevention (CDC), recommend that all individuals, regardless of vaccination status, wear face coverings in indoor public settings when in close contact with other individuals; and
WHEREAS, currently the dominant strain of COVID-19 in the country is more transmissible than prior variants of the virus, may cause more severe illness, and that even fully vaccinated individuals can spread the virus to others resulting in rapid and alarming rates of COVID-19 cases and hospitalizations, therefore, meeting in person would present imminent risks to the health or safety of attendees.
2 1584846-1
WHEREAS, the City Council desires to allow its members, staff and the public the ability to attend and participate in Council Meetings via remote means; and WHEREAS, on January 24, 2022, the City held its regular meeting remotely by teleconference/video conference for the first time in accordance with Government Code Section 54953(e) and hereby desires to adopt this resolution in order to continue to use remote teleconference/videoconference for the 30 days thereafter.

NOW THEREFORE, BE IT RESOLVED that the City Council of the City of Hughson resolves as follows:

Section 1. Recitals. The Recitals set forth above are true and correct and are incorporated into this Resolution by this reference.

Section 2. Finding of Imminent Risk to Health or Safety of Attendees. The City Council does hereby find that the current dominant strain of COVID-19 in the country is more transmissible than prior variants of the virus, may cause more severe illness, and that even fully vaccinated individuals can spread the virus to others resulting in rapid and alarming rates of COVID-19 cases and hospitalizations has caused, and will continue to cause, conditions of peril to the safety of persons, thereby presenting an imminent risk to health and/or safety to City employees and other representatives, and attendees of City public meetings; and
Section 3. Teleconference Meetings. The City Council do hereby determine as a result of the State of Emergency proclaimed by the Governor, and the recommended measures to promote social distancing made by State and local officials that the City may conduct their meetings without compliance with paragraph (3) of subdivision (b) of Government Code section 54953, as authorized by subdivision (e)(1)(A) and (B) of section 54953, and shall comply with the requirements to provide the public with access to the meetings as prescribed in paragraph (2) of subdivision (e) of section 54953; and Section 4. Direction to Staff. The City Manager and City staff are hereby authorized and directed to take all actions necessary to carry out the intent and purpose of this Resolution including, conducting open and public meetings in accordance with Government Code section 54953(e) and other applicable provisions of the Brown Act.

Section 5. Effective Date of Resolution. This Resolution shall take effect immediately and cover the period through July 13, 2022.

PASSED AND ADOPTED by the Hughson City Council at a regular meeting thereof, held on June 13, 2022, by the following vote:

AYES:

NOES:

ABSTENTIONS:

ABSENT:
3 1584846-1
»
»
APPROVED:
__________________________
GEORGE CARR, Mayor
ATTEST:
_____________________________
ASHTON GOSE, Deputy City Clerk
Meeting Date: June 13, 2022
Subject: Waive the Second Reading and Adopt Ordinance No. 2022-01, Amending Section 12.24.020, and Section

12.24.150 of the Hughson Municipal Code Concerning
Prohibited Acts within Public Places
Presented By: Ashton Gose, Deputy City Clerk
Approved By:
___________________________
City Manager
Staff Recommendation:

Waive the Second Reading and Adopt Ordinance No. 2022-01, Amending Section

12.24.020 and Section 12.24.150 of the Hughson Municipal Code Concerning Prohibited Acts within Public Places.

Background and Overview:

At the May 23, 2022 regular City Council meeting, an inflatable amusement device policy, and permit process was established with the adoption of Resolution No. 2022-16. At this same meeting, the Council unanimously voted to introduce and waive the first reading of Ordinance No. 2022-01, which amends the Hughson Municipal Code (HMC) to add the use of an inflatable amusement device without a permit in a public place, or City owned park as a prohibited act.

If approved by the City Council, this Ordinance will go into effect thirty (30) days after adoption, on July 14, 2022.

Parks, Recreation and Entertainment Commission
At the regularly scheduled May 10, 2022 meeting, the Commission unanimously voted to recommend the adoption of Ordinance No. 2022-01, Amending section

12.24.020 and section 12.24.150 of the Hughson Municipal Code concerning prohibited acts within public places.

CITY COUNCIL AGENDA ITEM NO. 3.5
SECTION 3: CONSENT CALENDAR
Fiscal Impact:

There is no immediate fiscal impact associated with this item. The potential fiscal impact resulting from a violation of the HMC ranges from $100 - $500, depending on the number of violation offenses.
1613840-1 1

CITY OF HUGHSON

CITY COUNCIL
ORDINANCE NO. 2022-01

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF HUGHSON, AMENDING SECTION 12.24.020 AND SECTION 12.24.150 OF THE HUGHSON MUNICIPAL CODE

CONCERNING PROHIBITED ACTS WITHIN PUBLIC PARKS
WHEREAS, the City of Hughson Municipal Code Section 12.24.150 currently lists acts prohibited within any park owned or operated by the City of Hughson; and WHEREAS, the City desires to amend Chapter 12.24 to add among the list of prohibitions the use of inflatable structures, unless otherwise permitted by the City.

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

Section 1 12.24.020.K-P is amended to read in full as follows:

K. “Inflatable Amusement Device” shall mean any stationary inflatable play structure typically designed for recreation activities on or in the structure including, but not limited to, a bounce house, slide, climbing wall, soft mountains, enclosed trampolines, and inflatable obstacle courses. The definition shall not refer to inflatable archways or similar inflatable structures used to mark the start or finish of a race, or moveable inflatables such as Zorb balls, or similar inflatable objects.

L. “Park” shall mean any areas set aside for recreational uses, areas conserved for their scenic interest, playgrounds, recreation centers and any other areas owned or operated by the city of Hughson and which are intended for active or passive recreational purposes. The word “park” shall also include any parking lot adjacent to any park, any buildings, equipment, plants or other facilities located in any park and any landscaped public area and/or right-of-way.

M. “Permit” shall mean a written permit for the exclusive use of a park or building as provided for and defined in this chapter.

N. “Picnicker” shall mean a person on an outing or excursion with food usually provided by such person and eaten in the open.

O. “Sound amplifying equipment” shall mean any electrical or battery-operated machine or device for the amplification of the human voice, music, or any other sound. “Sound amplifying equipment” shall not include standard vehicle radios when used and heard only by the occupants of the vehicle in which the radio is located.
1613840-1 2
P. “Vehicle” shall mean any wheeled conveyance, whether motor-powered, animaldrawn, or self-propelled, including bicycles, skateboards, and any trailer in tow of any size, kind, or description, except baby carriages, wheelchairs, and vehicles in the service of the city parks.

Section 2 Section 12.24.150.C.32 is added to read in full as follows:

32. To set up or use an inflatable amusement device, unless a written permit is obtained in advance from the director. Additionally, prior written approval from the City Council must be obtained for any inflatable amusement device that uses water.

Section 3 If any provision of this Ordinance or application thereof to any person or circumstances is held invalid, such invalidity shall not affect other provisions or applications of the Ordinance which can be given effect without the invalid provision or application, and to this end the provisions of this Ordinance are severable. The City Council hereby declares that it would have adopted this Ordinance irrespective of the validity of any particular portion thereof.

Section 4 This Ordinance is not intended to and shall not be construed or given effect in a manner that imposes upon the City or any officer or employee thereof a mandatory duty of care toward persons and property within or without the city so as to provide a basis of civil liability for damages, except as otherwise imposed by law.

Section 5 Within fifteen (15) days after its final passage, the City Clerk shall cause a summary of this Ordinance to be published in accordance with California Government Code section 36933.

Section 6 This Ordinance shall become effective thirty (30) days from and after its final passage and adoption, provided it is published in a newspaper of general circulation at least fifteen (15) days prior to its effective date.

The foregoing Ordinance was introduced, and the title thereof read at the regular meeting of the City Council of the City of Hughson held on May 23, 2022, and by a vote of the Council members present, further reading was waived.

On motion of Councilperson _________________________, seconded by ___________________________, the foregoing Ordinance was passed by the City Council of the City of Hughson at a regular meeting held on _________ __, 2022, by the following votes:

AYES: _____________
NOES: _____________
ABSTENTIONS: _____________
ABSENT: _____________
1613840-1 3
______________________________
GEORGE CARR, Mayor
ATTEST:
_______________________________
ASHTON GOSE, Deputy City Clerk
Meeting Date: June 13, 2022
Subject: Approval for Mayor Carr and Councilmember Buck to Attend the League of California Cities Annual Conference and Designate Mayor Carr as the Voting Delegate and
Councilmember Buck as the Alternate
Enclosure: Voting Delegate Packet
Presented By: Ashton Gose, Deputy City Clerk
Approved By: _____________________________
City Manager
Staff Recommendations:

1. Approve the Mayor and Councilmember Buck to attend the League of California Cities Annual Conference on September 7-9, in Long Beach, California.

2. Designate Mayor George Carr as the Voting Delegate and Councilmember Buck as the Alternate.

Background and Overview:

The League membership considers and takes action on resolutions that establish policy at the Annual Business Meeting that takes place during the Conference.

Mayor Carr and Councilmember Buck are scheduled to attend the League of California Cities Annual Conference. In order to vote on behalf of the City of Hughson the City Council must designate a voting delegate. Each Member City has the right to cast one vote on matters pertaining to league policy.

Upon approval, City staff will register with the League confirming Mayor George Carr as the voting delegate and Councilmember Buck as the alternate representing the City of Hughson.

Fiscal Impact:

Costs associated with the 2022 League of California Cities Annual Conference and Exposition total approximately $2,200 per attendee (conference, hotel, flight, food) and are included as part of the City’s budget on an annual basis to ensure City representation.

CITY COUNCIL AGENDA ITEM NO. 3.6
SECTION 3: CONSENT CALENDAR
1400 K Street, Suite 400, Sacramento, CA 95814 • 916.658.8200 • calcities.org DATE: June 1, 2022
TO: City Managers and City Clerks
RE: DESIGNATION OF VOTING DELEGATES AND ALTERNATES
League of California Cities Annual Conference & Expo – September 7-9, 2022 Cal Cities 2022 Annual Conference & Expo is scheduled for September 7-9, 2022 in Long Beach. An important part of the Annual Conference is the Annual Business Meeting (during General Assembly) on Friday, September 9. At this meeting, Cal Cities membership considers and acts on resolutions that establish Cal Cities policy.

In order to vote at the Annual Business Meeting, your city council must designate a voting delegate. Your city may also appoint up to two alternate voting delegates, one of whom may vote if the designated voting delegate is unable to serve in that capacity.

Please complete the attached Voting Delegate form and return it to Cal Cities office no later than Friday, September 2. This will allow us time to establish voting delegate/alternate records prior to the conference.

Please view Cal Cities’ event and meeting policy in advance of the conference. • Action by Council Required. Consistent with Cal Cities bylaws, a city’s voting delegate and up to two alternates must be designated by the city council.

When completing the attached Voting Delegate form, please attach either a copy of the council resolution that reflects the council action taken, or have your city clerk or mayor sign the form affirming that the names provided are those selected by the city council. Please note that designating the voting delegate and alternates must be done by city council action and cannot be accomplished by individual action of the mayor or city manager alone. • Conference Registration Required. The voting delegate and alternates must be registered to attend the conference. They need not register for the entire conference; they may register for Friday only. Conference registration will open by June 1 on the Cal Cities website. In order to cast a vote, at least one voter must be present at the Business Meeting and in possession of the voting delegate card. Voting delegates and alternates need to pick up their conference badges before signing in and picking up the voting delegate card at the Voting Delegate Desk. This will enable them to receive the special sticker on their name badges that will admit them into the voting area during the Business Meeting.

Council Action Advised by August 31, 2022
• Transferring Voting Card to Non-Designated Individuals Not Allowed. The voting delegate card may be transferred freely between the voting delegate and alternates, but only between the voting delegate and alternates. If the voting delegate and alternates find themselves unable to attend the Business Meeting, they may not transfer the voting card to another city official. • Seating Protocol during General Assembly. At the Business Meeting, individuals with the voting card will sit in a separate area. Admission to this area will be limited to those individuals with a special sticker on their name badge identifying them as a voting delegate or alternate. If the voting delegate and alternates wish to sit together, they must sign in at the Voting Delegate Desk and obtain the special sticker on their badges.

The Voting Delegate Desk, located in the conference registration area of the Long Beach Convention Center, will be open at the following times: Wednesday, September 7, 8:00 a.m. – 6:00 p.m.; Thursday, September 8, 7:00 a.m. – 4:00 p.m.; and Friday, September 9, 7:30 a.m.–12:30 p.m. The Voting Delegate Desk will also be open at the Business Meeting on Friday, but will be closed during roll calls and voting.

The voting procedures that will be used at the conference are attached to this memo.

Please share these procedures and this memo with your council and especially with the individuals that your council designates as your city’s voting delegate and alternates.

Once again, thank you for completing the voting delegate and alternate form and returning it to Cal Cities office by Friday, September 2. If you have questions, please call Darla Yacub at (916) 658-8254.

Attachments:
• Annual Conference Voting Procedures
• Voting Delegate/Alternate Form
1400 K Street, Suite 400, Sacramento, CA 95814 • 916.658.8200 • calcities.org Annual Conference Voting Procedures

1. One City One Vote. Each member city has a right to cast one vote on matters pertaining to Cal Cities policy.

2. Designating a City Voting Representative. Prior to the Annual Conference, each city council may designate a voting delegate and up to two alternates; these individuals are identified on the Voting Delegate Form provided to the Cal Cities Credentials Committee.

3. Registering with the Credentials Committee. The voting delegate, or alternates, may pick up the city's voting card at the Voting Delegate Desk in the conference registration area. Voting delegates and alternates must sign in at the Voting Delegate Desk. Here they will receive a special sticker on their name badge and thus be admitted to the voting area at the Business Meeting.

4. Signing Initiated Resolution Petitions. Only those individuals who are voting delegates (or alternates), and who have picked up their city’s voting card by providing a signature to the Credentials Committee at the Voting Delegate Desk, may sign petitions to initiate a resolution.

5. Voting. To cast the city's vote, a city official must have in their possession the city's voting card and be registered with the Credentials Committee. The voting card may be transferred freely between the voting delegate and alternates, but may not be transferred to another city official who is neither a voting delegate or alternate.

6. Voting Area at Business Meeting. At the Business Meeting, individuals with a voting card will sit in a designated area. Admission will be limited to those individuals with a special sticker on their name badge identifying them as a voting delegate or alternate.

7. Resolving Disputes. In case of dispute, the Credentials Committee will determine the validity of signatures on petitioned resolutions and the right of a city official to vote at the Business Meeting.

CITY:________________________________________
2022 ANNUAL CONFERENCE

VOTING DELEGATE/ALTERNATE FORM
Please complete this form and return it to Cal Cities office by Friday, September 2, 2022. Forms not sent by this deadline may be submitted to the Voting Delegate Desk located in the Annual Conference Registration Area. Your city council may designate one voting delegate and up to two alternates.

To vote at the Annual Business Meeting (General Assembly), voting delegates and alternates must be designated by your city council. Please attach the council resolution as proof of designation. As an alternative, the Mayor or City Clerk may sign this form, affirming that the designation reflects the action taken by the council.

Please note: Voting delegates and alternates will be seated in a separate area at the Annual Business Meeting. Admission to this designated area will be limited to individuals (voting delegates and alternates) who are identified with a special sticker on their conference badge. This sticker can be obtained only at the Voting Delegate Desk.

1. VOTING DELEGATE
Name:

Title:

2. VOTING DELEGATE - ALTERNATE 3. VOTING DELEGATE - ALTERNATE Name: Name:

Title: Title:

ATTACH COUNCIL RESOLUTION DESIGNATING VOTING DELEGATE AND ALTERNATES OR ATTEST: I affirm that the information provided reflects action by the city council to designate the voting delegate and alternate(s).

Name: ____________________________________ Email_________________________________ Mayor or City Clerk_________________________ Date____________ Phone________________ (circle one) (signature) Please complete and return by Friday, September 2, 2022 to:

Darla Yacub, Assistant to the Administrative Services Director E-mail: [email protected]; Phone: (916) 658-8254
Meeting Date: June 13, 2022
Subject: Approval of the Treasurer’s Report for March 2022 Enclosure: Treasurer Report, March 2022
Presented By: Ashton Gose, Management Analyst
Approved By: _________________________
City Manager
Staff Recommendation:

Review and approve the City of Hughson Treasurer’s Report for March 2022.

Background and Discussion:

The City Treasurer reviews the City’s cash and investment practices and approves the monthly Treasury Reports and a quarterly Investment Portfolio Report. As of March 2022, the City of Hughson has a cash and investment balance total of $28,545,605 with $2,723,410 invested. All investment actions executed since the last report have been made in full compliance of the City of Hughson’s Investment Policy. The City of Hughson will meet its expenditure obligations for the next six months as required by California Government Code Section 53646 (b) (2) and (3) respectively.

The Treasurer report for March 2022 reflects the most current representation of the City’s funds and investments and provides a necessary outlook for both past, and present investment and spending habits. While investments and funds differ from time to time, it is the goal of the City to maintain safety and stability with its funds, while additionally promoting prudence and growth.

Attached is the City of Hughson Treasurer’s Report for March 2022, along with supplementary graphs depicting the percentage of the City’s total funds, a breakdown of the Developer Impact Fees, and an additional line plot graph further demonstrating the Developer Impact Fees. This graph depicts the Developer Impact Fees’ actual balance for the past five years. After review and evaluation of the report, City staff has researched funds with a significant deficit balance and submit the following detailed explanation for March 2022:

CITY COUNCIL AGENDA ITEM NO. 3.7
SECTION 3: CONSENT CALENDAR
Transportation Capital and CDBG Street Project Fund:

The Transportation Capital Project Fund currently reflects a negative balance of ($240,938), which is a negative difference of $5,258 from the previous year. The CDBG Street Project Fund currently reflects a negative balance of ($55,330) reflecting a negative difference of $4,619 from the previous year. As the City continues to produce transportation projects, the transportation fund will likely continue to show a negative balance. City staff will continue to monitor and report the status of these reimbursements as the funds become available.

Fiscal Impact:

As of March 2022, the City’s cash, and investments total $28,545,605. This compares to a March 2021 balance of $25,692,808 and represents an increase of $2,852,797.

MONEY MARKET GENERAL REDEVELOPMENT** TOTAL
Bank Statement Totals $ 25,549,563.63 $ 371,687.21 $ - $ 25,921,250.84 Adjustment $ (123.14) $ 214.94
Outstanding Deposits + $ 122,302.27 $ - $ - $ 122,302.27 Outstanding Checks/transfers - $ (903.31) $ (220,454.55) $ - $ (221,357.86) ADJUSTED TOTAL $ 25,670,839.45 $ 151,447.60 $ - $ 25,822,195.25 Investments: Various $ 1,090,951.02
Multi-Bank WWTP $ 1,547,359.69
Investments: L.A.I.F. $ 42,617.33 $ 42,481.78 $ 85,099.11 General Ledger Adjustments
Wages Payable 0.00
TOTAL CASH & INVESTMENTS $ 28,545,605.07
Books - All Funds March 2021 March 2022 Difference % of Variance 100 GENERAL FUND 3612709.33 3867103.88 254,394.55 7.04% 105 GENERAL FUND CONTINGENCY RESERVE 976860.57 1069121.52 92,260.95 9.44% 110 FIXED ASSESTS 0 0 0.00 n/a
210 SEWER 2289874.03 3383391.6 1,093,517.57 47.75%
215 SEWER FIXED ASSET REPLACEMENT 4902276.08 5121767.59 219,491.51 4.48% 220 SEWER DEV IMPACT FEE -894506.06 8613.12 903,119.18 100.96% 225 WWTP Expansion 2008 1252709.55 320339.71 -932,369.84 -74.43% 240 WATER 265877.81 654137.09 388,259.28 146.03%
245 Water TCP123 2807004.26 3717659.02 910,654.76 32.44% 250 WATER DEV IMPACT FEE 127287.1 380587.32 253,300.22 199.00% 255 Water Fixed Asset Replacement 3550158.6 202345.36 -3,347,813.24 -94.30% 270 COMMUNITY/SENIOR CENTER 9366.8 20960.63 11,593.83 123.78% 280 U.S.F. Resource Com. Center -536.25 -971.66 -435.41 -81.20% 310 Garbage/Refuse 98655.98 122591.84 23,935.86 24.26%
320 GAS TAX 2103 140205.74 181112.34 40,906.60 29.18%
321 GAS TAX 2105 71928.02 87297.26 15,369.24 21.37%
322 GAS TAX 2106 -437.77 -12445.48 -12,007.71 -2742.93% 323 GAS TAX 2107 48247.87 46773.88 -1,473.99 -3.06%
324 GAS TAX 2107.5 2922.14 3922.14 1,000.00 34.22%
325 Measure L SALES TAX-ROADS 628898.57 1068533.01 439,634.44 69.91% 326 SB-1 ROADS MAINTENANCE REHABILITATION 273327.13 415163.88 141,836.75 51.89% 340 LANDSCAPE LIGHTING DISTRICT 0 -1145.75 -1,145.75 #DIV/0! 350 BENEFIT ASSESMENT DISTRICT 0 -126.84 -126.84 #DIV/0! 360 COMMUNITY FACILITIES DISTRICT 7255.15 7255.15 0.00 0.00% 370 COMMUNITY ENHANCEMENT DEV IMPACT FEE 185256.32 243785.71 58,529.39 31.59% 371 TRENCH CUT FUND 3093.6 222093.6 219,000.00 7079.13% 372 IT RESERVE 103896.02 114349.75 10,453.73 10.06%
373 SELF-INSURANCE 73303.49 73303.49 0.00 0.00%
374 DIABILITY ACCESS AND EDUCATION 2709.48 3846.44 1,136.96 41.96% 380 CLAIM ON CASH-CLFRF/ARPA 0 843450.14 843,450.14 #DIV/0! 381 AB109 PUBLIC SAFETY 35722.29 35722.29 0.00 0.00%
382 ASSET FORFEITURE 1660.43 1660.43 0.00 0.00%
383 VEHICLE ABATEMENT 36322.85 30557.68 -5,765.17 -15.87% 384 SUPPLEMENTAL LAW ENFORCEMENT SERVICE F 381169.16 553942.93 172,773.77 45.33% 385 FEDERAL FUNDED OFFICER FUND 6620 6620 0.00 0.00%
390 98-EDBG-605 BUSINESS ASSISTANCE 93595.6 93595.6 0.00 0.00% 391 96-EDBG-438 Grant 403.43 403.43 0.00 0.00%
392 94-STBG-799 HOUSING REHAB 227892.71 229517.26 1,624.55 0.71% 393 HOME Program Grant (FTHB) 35043.29 35043.29 0.00 0.00% 394 96-STBG-1013 Grant 211124.19 210876.72 -247.47 -0.12% 395 CALHOME REHAB 40000 40000 0.00 0.00%
410 LOCAL TRANSPORTATION 51671.34 51671.34 0.00 0.00%
415 LOCAL TRANSPORTATION NON MOTORIZED 13219 13219 0.00 0.00% 420 TRANSPORTATION STREET PROJECTS -235680.14 -240938.15 -5,258.01 -2.23% 425 PUBLIC WORKS STREET PROJECTS-CDBG -50711.4 -55330.1 -4,618.70 -9.11% 450 STORM DRAIN DEV IMPACT FEE 595108.81 774746.07 179,637.26 30.19% 451 PUBLIC FACILITY DEV IMPACT FEE 1490804.23 1681447.93 190,643.70 12.79% 452 PUBLIC FACILITY STREET DEV IMPACT FEE 197867.76 462716.92 264,849.16 133.85% 453 PARK DEV IMPACT FEE 621868.75 780087.97 158,219.22 25.44% 454 PARKLAND IN LIEU 484873.86 610595.39 125,721.53 25.93% City of Hughson
Treasurer's Report
March 2022
510 WATER/SEWER DEPOSIT 86896.02 95528.46 8,632.44 9.93% 520 RDA SUCCESSOR AGENCY 367331.76 441681.57 74,349.81 20.24% 521 RDA FIXED ASSETS 0 0 0.00 n/a
530 LANDSCAPE LIGHTING DISTRICT 7963.23 6133.92 -1,829.31 n/a 531 LANDSCAPE LIGHTING DISTRICT 53449.92 60024.98 6,575.06 n/a 532 LANDSCAPE LIGHTING DISTRICT 29599.17 31181.13 1,581.96 n/a 533 LANDSCAPE LIGHTING DISTRICT 39731.98 47923.16 8,191.18 n/a 534 LANDSCAPE LIGHTING DISTRICT -32953.6 -26973.23 5,980.37 n/a 535 LANDSCAPE LIGHTING DISTRICT 9437.13 10001.69 564.56 n/a 536 LANDSCAPE LIGHTING DISTRICT 21946.13 30268.7 8,322.57 n/a 537 LANDSCAPE LIGHTING DISTRICT -51765.64 -63149.5 -11,383.86 n/a 538 LANDSCAPE LIGHTING DISTRICT -29282.88 -37657.93 -8,375.05 n/a 539 LANDSCAPE LIGHTING DISTRICT 27297.92 29215.99 1,918.07 n/a 540 LANDSCAPE LIGHTING DISTRICT 47308.86 53298.8 5,989.94 n/a 541 LANDSCAPE LIGHTING DISTRICT 30690.98 30925.29 234.31 n/a 542 LANDSCAPE LIGHTING DISTRICT 4053.01 2537.35 -1,515.66 n/a 543 LANDSCAPE LIGHTING DISTRICT 17515.36 23640.89 6,125.53 550 BENEFIT ASSESMENT DISTRICT 69762.03 73522.88 3,760.85 n/a 551 BENEFIT ASSESMENT DISTRICT 12939.7 13915.7 976.00 n/a 552 BENEFIT ASSESMENT DISTRICT 123252.03 140339.99 17,087.96 n/a 553 BENEFIT ASSESMENT DISTRICT 1056.76 -1881.92 -2,938.68 n/a 554 BENEFIT ASSESMENT DISTRICT 48852.55 57304.65 8,452.10 n/a 555 BENEFIT ASSESMENT DISTRICT 14922.41 22610.29 7,687.88 n/a 560 COMMUNITY FACILITIES DISTRICT 15883.46 24240.47 8,357.01 n/a Developer Impact Fees *** 2,323,686.91 4,331,985.04 2,008,298.13 TOTAL ALL FUNDS: 25,692,808.01 28,545,605.07 2,852,797.06 Break Down of Impact Fees ***
220 SEWER DEV IMPACT FEE -894,506.06 $8,613.12 903,119.18 100.96% 250 WATER DEV IMPACT FEE 127,287.10 $380,587.32 253,300.22 199.00% 370 COMMUNITY ENHANCEMENT DEV IMPACT FEE 185,256.32 $243,785.71 58,529.39 31.59% 450 STORM DRAIN DEV IMPACT FEE 595,108.81 $774,746.07 179,637.26 30.19% 451 PUBLIC FACILITY DEV IMPACT FEE 1,490,804.23 $1,681,447.93 190,643.70 12.79% 452 PUBLIC FACILITY STREET DEV IMPACT FEE 197,867.76 $462,716.92 264,849.16 133.85% 453 PARK DEV IMPACT FEE 621,868.75 $780,087.97 158,219.22 25.44% Break Down of Impact Fees *** 2,323,686.91 4,331,985.04 2,008,298.13 86.43% Date
Reviewed By: Anna Nicholas 6/8/2022
I hereby certify that the investment
activity for this reporting period
conforms with the Investment
Policy adopted by the Hughson
City Council, and the California
Government Code Section 53601.

I also certify that there are
adequate funds available to meet
the City of Hughson's budgeted
and actual expenditures for the
next six months.

Treasurer's Report - Charts and Graphs
March 2022
$8,613.12
$380,587.32
$243,785.71
$774,746.07
$1,681,447.93
$462,716.92
$0.00
$200,000.00
$400,000.00
$600,000.00
$800,000.00
$1,000,000.00
$1,200,000.00
$1,400,000.00
$1,600,000.00
$1,800,000.00
March 2022 Breakdown of Developer Impact Fees
220 SEWER DEV IMPACT FEE
250 WATER DEV IMPACT FEE
370 COMMUNITY ENHANCEMENT DEV IMPACT FEE
450 STORM DRAIN DEV IMPACT FEE
451 PUBLIC FACILITY DEV IMPACT FEE
452 PUBLIC FACILITY STREET DEV IMPACT FEE
2018 2019 2020 2021 2022
Storm Drain 388,711.16 409,630.10 484,254.27 595,108.81 774,746.07 Community Enhancement 118,367.06 124,828.26 148,367.68 185,256.32 243,785.71 Public Facilities Development 1,354,542.34 1,283,609.92 1,373,971.35 1,490,804.23 1,681,447.93 Public Facilities Development-Streets -114,046.36 -78,704.23 39,414.47 197,867.76 462,716.92 Parks Development Impact Fees 442,205.08 459,728.96 518,954.07 621,868.75 780,087.97 Sewer Developer Impact Fees 1,452,014.96 1,524,409.82 1,791,998.30 (894,506.06) 8,613.12 Water Developer Impact Fees -142,230.37 -116,728.33 (18,064.25) 127,287.10 380,587.32 -1,500,000.00
-1,000,000.00
-500,000.00

0.00 500,000.00
1,000,000.00
1,500,000.00
2,000,000.00
5 Year Trend for Developer Impact Fees for the Month of March GENERAL FUND, 17.29%
SEWER, 11.85%
SEWER FIXED ASSET REPLACEMENT, 17.94%
PARK DEV IMPACT , 2.73%
STORM DRAIN DEV IMPACT , 2.71%
WATER TCP123, 13.02%
CLAIM ON CASH-CLFRF/ARPA, 2.95%
PUBLIC FACILITY DEV IMPACT FEE, 5.89%
Measure L SALES TAX-ROADS, 3.74%
Percentage of Fund - March 2022

GENERAL FUND
SEWER

SEWER FIXED ASSET REPLACEMENT

PARK DEV IMPACT

STORM DRAIN DEV IMPACT
WATER TCP123

CLAIM ON CASH-CLFRF/ARPA

PUBLIC FACILITY DEV IMPACT FEE
Measure L SALES TAX-ROADS
Note:

Data displayed represents
largest percentage of City funds.

All other funds represent less
than 20% of the City's total Cash
and Investments.

Meeting Date: June 13, 2022
Subject: Approval of the Treasurer’s Investment Portfolio Report for March 2022
Presented By: Ashton Gose, Management Analyst
Enclosure: Portfolio of Investments, March 2022
Approved By: __________________________
City Manager
Staff Recommendation:

Review and approve the City of Hughson Treasurer’s Quarterly Investment Portfolio Report for March 2022.

Summary:

The City Treasurer reviews the City’s investment practices and approves the quarterly Portfolio of Investments Report. As of March 2022, the City of Hughson’s investment total is $2,723,410 and has a total cash and investment balance of $28,545,605. All investment actions executed since the last report have been made in full compliance of the City of Hughson’s Investment Policy. The City of Hughson will meet its expenditure obligations for the next six months as required by California Government Code Section 53646 (b) (2) and (3) respectively.

Discussion:

The Investment Portfolio Report is intended to provide supplementary documentation of the City of Hughson’s investment practices. According to the City of Hughson’s Investment Policy, the City Treasurer shall submit to the City Council a quarterly investment report containing a complete description of the portfolio, the type of investments, the issuers, maturity dates, par and dollar values, and the current market values of each component of the portfolio. As per the City’s Investment Policy, when dealing with investment activities, the City of Hughson’s primary objectives, in order of priority, are safety, liquidity, and return on investments.

The City of Hughson has utilized MBS Account Executive, Michael DeGeeter, as a third- party investor. According to Mr. DeGeeter, a 5-year Certificate of Deposit (CD) CITY COUNCIL AGENDA ITEM NO. 3.8
SECTION 3: CONSENT CALENDAR
laddering approach is utilized for the City’s investment practices. This approach layers various CDs depending on interest rates and timing, which allows for reduced portfolio rates and a continuous stream of maturity dates. Mr. DeGeeter states that this CD approach has always spread positively for the City of Hughson and has had the highest yield of any spread thus far.

Attached is the City of Hughson Treasurer’s Investment Portfolio Report for March 2022 along with supplementary graphs depicting the percentage of the City’s portfolio of investments. City staff submits the following summary of investments:

Certificates of Deposits
The reported investments in CDs reflect the City’s most current balance statement as of March 2022. The two accounts share a combined balance of $2,638,311, comprising 96.88% of the City’s total portfolio of investments. This compares with the balance in December 2021, three months prior, of $2,759,890.

L.A.I.F. Investments
The reported Local Agency Investment Fund (L.A.I.F.) investments reflect the City’s most current balance statement as of March 2022. The two L.A.I.F. accounts share a combined balance of $85,099, comprising of 3.13% of the City’s total portfolio of investments. This compares with the L.A.I.F. accounts balance in December 2021, three months prior, of $85,050.

Fiscal Impact:

As of March 2022, the total investments balance for the City of Hughson is $2,723,410 accounting for 9.54% of the City’s total cash and investments. Of the amounts invested, 3.13% is invested in L.A.I.F. investments, and 96.88% is invested in Certificates of Deposit. City staff will continue to monitor and report on the City of Hughson’s investment practices.

MONEY MARKET GENERAL REDEVELOPMENT** TOTAL
Bank Statement Totals $ 25,549,563.63 $ 371,687.21 $ - $ 25,921,250.84 Adjustment-Direct Deposit Payroll $ (123.14) $ 214.94 $ - Outstanding Deposits + $ 122,302.27 $ - $ - $ 122,302.27 Outstanding Checks/transfers - $ (903.31) $ (220,454.55) $ - $ (221,357.86) ADJUSTED TOTAL $ 25,670,839.45 $ 151,447.60 $ - $ 25,822,195.25 Investments: Various $ 1,090,951.02
Multi-Bank WWTP $ 1,547,359.69
Investments: L.A.I.F. $ 42,617.33 $ 42,481.78 $ 85,099.11 General Ledger Adjustments
Wages Payable 0.00
Total Investments $ 2,723,409.82
Total Cash & Investments $ 28,545,605.07
Breakdown of Investments
Investments: Various - ***850
Description Maturity Dates Quantity Opening Balance Closing Balance Interest Accrued % of
Portfolio
Cash, Money Funds And Bank Deposits: $ 41,292.42 $ 41,662.32 $ - 3.82% Total: $ 1,115,963.68 $ 1,090,951.02 $ -
Fixed Income (Certificate of Deposits) Maturity Dates Quantity Market Price Market Value Interest Accrued Rate of Return % of
Portfolio
SALLIE MAE BK SALT LAKE CITY UT 07/14/21-07/14/26 150,000.00 $93.4860 $ 140,229.00 $ 312.33 1.060% 12.85% American Express Centurion 04/26/17-04/26/2022 100,000.00 $100.1410 $ 100,141.00 $ 1,025.75 2.390% 9.18% BMO HARRIS Chicago 9/28/20-3/28/25 175,000.00 $94.1130 $ 164,697.75 $ 7.19 0.530% 15.10% MEDALLION BK SAL LAKE 11/18/20-11/18/25 70,000.00 $92.9620 $ 65,073.40 $ 13.71 0.590% 5.96% TEXAS EXCHANGE BK CROWLEY 11/25/20-11/25/25 55,000.00 $92.5600 $ 50,908.00 $ 5.42 0.640% 4.67% Corporate Bond 10/30/20-10/30/25 130,000.00 $90.1580 $ 117,205.40 $ 541.67 1.100% 10.74% UBS BK USA SALT LAKE CITY 09/22/21-09/22/26 136,000.00 $92.9350 $ 126,391.60 $ 31.86 1.020% 11.59% JP Morgan Chase BK NA Columbus Ohio 11/10/20-11/10/25 250,000.00 $92.8710 $ 232,177.50 $ 482.88 0.530% 21.28% SALLIE MAE BK SALT LAKE CITY 6/3/2020-6/3/2025 55,000.00 $95.3910 $ 52,465.05 $ 151.14 0.890% 4.81% Total CDs $ 1,049,288.70 $ 2,571.95 96.18%
Total Investments: Various Holdings $ 1,090,951.02 $ 2,571.95 100.00% Total Portfolio Investment 40.06%
Multi-Bank WWTP - ***934
Description Maturity Dates Quantity Opening Balance Closing Balance Interest Accrued % of
Portfolio
Cash, Money Funds, and Bank Deposits: $14,978.37 $ 16,037.93 $ - 1.04% Total: $1,582,111.54 $ 1,547,359.69 $ -
Fixed Income (Certificate of Deposits) Maturity Dates Quantity Market Price Market Value Interest Accrued Rate of Return % of
Portfolio
GOLDMAN SACHS 11/26/21-11/26/24 100,000.00 $95.8210 $ 95,821.00 $ 451.39 1.350% 6.19% STATE BK INDIA Chicago 7/10/20-7/10/25 98,000.00 $95.1090 $ 93,206.82 $ 214.79 1.050% 6.02% STATE BK INDIA New York 06/10/20-06/10/2025 125,000.00 $95.3930 $ 119,241.25 $ 399.14 1.100% 7.71% BMW BK NORTH AMER 8/14/20-08/14/23 55,000.00 $98.2250 $ 54,023.75 $ 20.34 0.300% 3.49% MEDALLION BK SALT LAKE 11/18/20-11/18/25 125,000.00 $92.9620 $ 116,202.50 $ 24.49 0.590% 7.51% GOLDMAN SACHS 05/19/21-05/19/26 90,000.00 $93.3180 $ 83,986.20 $ 26.63 0.960% 5.43% GOLDMAN SACHS 09/09/21-09/08/26 163,000.00 $93.4410 $ 152,308.83 $ 239.14 1.120% 9.84% AMERANT BK 02/14/22-02/16/27 250,000.00 $95.2450 $ 238,112.50 $ 493.15 1.670% 15.39% American Express Centurion Bk CTF DEP 04/26/17 - 04/26/22 67,000.00 $100.1410 $ 67,094.47 $ 687.25 2.390% 4.34% TEXAS EXCHANGE 9/11/20-12/11/24 250,000.00 $94.9900 $ 237,475.00 $ 68.49 0.520% 15.35% SALLIE MAE 7/1/20-7/1/25 98,000.00 $94.5280 $ 92,637.44 $ 191.17 0.840% 5.99% Corporate Bond 11/18/20-11/18/25 200,000.00 $90.6060 $ 181,212.00 $ 738.89 1.100% 11.71% Total CDs . $ 1,531,321.76 $ 3,554.87 98.96%
Total Multi-Bank WWTP Holdings $ 1,547,359.69 $ 3,554.87 100.00% Total Portfolio Investment 56.82%
L.A.I.F. Investments
Account #
Quarter Begin Principal
as of December 2021
Quarterly Interest
Earned as of March
2022 Interest Rate Total
****375 COH $ 42,617.33 $ 33.58 0.026% $ 42,650.91 50.08% ****005 RDA $ 42,481.78 $ 33.48 0.026% $ 42,515.26 49.92% Total L.A.I.F Investments Holdings $ 85,166.17 100.00%
Total Portfolio Investment 3.13%
Prepared By: Ashton Gose, Management Analyst Date
City of Hughson
Portfolio of Investments
March 2022
% of Investment
24-May-22
All investment actions executed since the last report have been made in full compliance with the Investment Policy.

The City of Hughson will meet its expenditure obligations for the next six months as required by California
Governmnet Code Section 53646 (b)(2) and (3)
respectively.

Charts and Graphs
Money Market: $25,670,839.45

90.41%
Investments: Various $1,090,951.02

3.84%
Multi-Bank WWTP $1,547,359.69

5.45% L.A.I.F. coh ****375 $42,617.33
L.A.I.F. RDA ****005 $42,481.78

0.15%
Total Portfolio of Investment (Including Money Market Cash) March 2022 Money Market: $25,670,839.45
Investments: Various $1,090,951.02
Multi-Bank WWTP $1,547,359.69
L.A.I.F. coh ****375 $42,617.33
L.A.I.F. RDA ****005 $42,481.78
Total: $28,394,249.27
SALLIE MAE BK SALT LAKE CITY UT , 12.85%
American Express Centurion, 9.18%
BMO HARRIS Chicago, 15.10%
MEDALLION BK SAL LAKE, 5.96%
TEXAS EXCHANGE BK CROWLEY, 4.67% Corporate Bond, 10.74% UBS BK USA SALT LAKE CITY , 11.59%
JP Morgan Chase BK NA Columbus Ohio, 21.28%
SALLIE MAE BK SALT LAKE CITY, 4.81%
Breakdown of Investments: Various - *** 850 March 2022
GOLDMAN SACHS , 6.19%
STATE BK INDIA Chicago, 6.02%
STATE BK INDIA New York, 7.71%
BMW BK NORTH AMER, 3.49%
MEDALLION BK SALT LAKE, 7.51%
GOLDMAN SACHS , 5.43%
GOLDMAN SACHS , 9.84%
AMERANT BK , 15.39%
American Express Centurion Bk CTF DEP, 4.34%
TEXAS EXCHANGE, 15.35%
SALLIE MAE, 5.99%
Corporate Bond , 11.71%
Breakdown of Multi-Bank WWTP - *** 934 March 2022
Meeting Date: June 13, 2022
Subject: Approval of the Formal Response to the Stanislaus County Civil Grand Jury Measure L – Case # 22-06GJ
Enclosures: Draft Response to Civil Grand Jury
Civil Grand Jury Report
Presented By: Merry Mayhew
Dan Schroeder, City Attorney
Approved By: ___________________________
City Manager
Staff Recommendations:

1. Approve the formal response to the Stanislaus County Civil Grand Jury Measure L – Case 22-06GJ

2. Authorize the City Manager to sign the formal response and submit it on behalf of the City of Hughson.

Background and Overview:

On May 14, 2022, the City of Hughson received a formal correspondence, regarding the Stanislaus County Civil Grand Jury Measure L – Case 22-06GJ. The City of Hughson is requested to respond to Findings (F5 and F6) and Recommendations (R5 and R6).

The California Penal Code §933 (c) specifies both the deadline by which responses shall be made to the Civil Grand Jury Final Report findings and recommendations and the required content of those responses.

All agencies are directed to respond to the Presiding Judge of the Stanislaus County Superior Court,
 Not later than 90 days after the Civil Grand Jury submits a final report on the operations of a public agency, the governing body of that agency shall respond to the findings and recommendations pertaining to the operations of that agency.

CITY COUNCIL AGENDA ITEM NO. 3.9
SECTION 3: CONSENT CALENDAR
 Not later than 60 days after the Civil Grand Jury submits a final report on the operation of a County agency, the elected head governing the agency shall respond to the findings and recommendations pertaining to the operations of their agency.
 Information copies of responses pertaining to matters under the control of a county officer or agency are to be sent to the Board of Supervisors.  A copy of all responses to the Civil Grand Jury reports shall be placed on file with the clerk of the public agency and the Office of the County Clerk, or the city clerk when applicable.
 One copy shall be placed on file with the applicable Civil Grand Jury by, and in the control of, the currently impaneled Grand Jury, where it shall be maintained for a minimum of five years.

Content of Responses
 The respondent agrees with the finding.
 The respondent disagrees wholly or partially with the finding and shall include an explanation.
 The recommendation has been implemented, with a summary regarding the implemented action.
 The recommendation has not been implemented, but will be implemented in the future, with a time frame for implementation.
 The recommendation requires further analysis, with an explanation and the scope and parameters of an analysis or study, and a time frame if it is to be implemented later.
 The recommendation will not be implemented because it is unwarranted or unreasonable, with supportive explanation.

Stanislaus County Civil Grand Jury Measure L - Excerpts The full report is attached for reference. Below are excerpts to share the highlights pertaining to the City of Hughson.

The Stanislaus County Civil Grand Jury’s (SCCGJ) inquiry into Measure L, the local transportation sales tax, was to gauge the transparency between the cities/County and the public regarding the use of public funds. In addition, SCCGJ examined whether the public information requirements of the Master Funding Agreements (MFA) were being followed. The cities of Hughson, Newman, and Oakdale were evaluated, as well as the Stanislaus Council of Governments (StanCOG), which is the administrator of the MFAs.

The following are the key findings and recommendations that pertained to the City of Hughson and require a response.

F5. The information currently on Hughson’s website does not give the public a clear understanding of the program, how Measure L funds have been used, and future city plans for these funds.

F6. Hughson does not have a public awareness program as required by its MFA.

R5. Within three months after adoption by StanCOG of a standard for local websites, Hughson should update its website to be in compliance.

R6. Three months after adoption of a public awareness program by StanCOG, Hughson should implement the program.

The City of Hughson disagrees partially with the above findings and shall include an explanation.

Civil Grand Jury Finding F5:

The information currently on Hughson’s website does not give the public a clear understanding of the program, how Measure L funds have been used, and future City plans for these funds.

Response:

The City of Hughson continuously updates the Measure L website with information as it is received. On the date of receipt of the Grand Jury Report, the website was reviewed (Measure L – Local Roads First – City of Hughson) and the following information was found to be listed on the website:
• General Information regarding Measure L including when the measure was passed.
• A Roadway Maintenance Project Map.
• An Expenditure List that included the first five years of Measure L (2016-2021).
• A list of three projects that had been completed with Measure L funds and a picture.
• Measure L Annual Reports for FY17/18; 18/19; and 19/20.

The Annual Report for FY20/21 was posted as soon as the Final Report was received by the City.
• Annual Financial Reports for FY19/20 and FY20/21.

Consultants are currently assessing the streets in Hughson through a Pavement Condition Index and from the results of this assessment, a project list for FY22/23 will be taken to the City Council for approval and the annual project list will be placed on the Measure L website.

During the review of the City’s website, a separate page was located on the website that had little to no Measure L information listed. This may be the page that led the Grand Jury to the conclusion that the City of Hughson did not have adequate Measure L information listed. That page has been removed to ensure that the public access the correct page.

Civil Grand Jury Finding F6:

Hughson does not have a public awareness program as required by its MFA.

Response:

As mentioned under Finding 5, current and accurate information is listed on Hughson’s website regarding the expenditure of Measure L funds. Signage was posted at each project in excess of $250,000 identifying it as funded in whole or part by Measure L, and the City does participate in a “public awareness program” in partnership with StanCOG to provide public information on Measure L activities by submitting revenue and expenditure reports as well as quarterly milestone reports showing progress on projects, and any other compliance reports requested by StanCOG. StanCOG creates Annual Reports which are then placed on the City’s website for public view.

In addition, the City of Hughson submits all requested information to the independent auditors for the annual audited financial statements and when the audits are completed the audited reports are also placed on the website for public view.

In the future, should additional information be available to add to the website, the City will comply with posting the information for public view.

Civil Grand Jury Recommendations R5 and R6:

R5. Within three months after adoption by StanCOG of a standard for local websites, Hughson should update its website to be in compliance.

R6. Three months after adoption of a public awareness program by StanCOG, Hughson should implement the program.

Response:

The City of Hughson agrees with the above recommendations and shall implement any standard for local websites and any public awareness program adopted by StanCOG.

Fiscal Impact:

There is no fiscal impact associated with the City of Hughson’s formal response to the Stanislaus County Civil Grand Jury.

OFFICE OF THE CITY MANAGER
7018 Pine Street, P.O. Box 9
Hughson, CA 95326 Merry Mayhew
(209) 883-4054 Fax (209) 883-2638 City Manager
www.hughson.org [email protected]
June 14, 2022
Presiding Judge of the Superior Court
Honorable Robert B. Westbrook
PO Box 3488
Modesto, CA 95353
RE: Response to the Stanislaus County Civil Grand Jury Report Case # 22-06GJ Honorable Robert B. Westbrook:

This letter is in response to the correspondence received on May 14, 2022.

City staff has reviewed the sections of the Civil Grand Jury report and presented its findings and recommendations to the Hughson City Council on June 13, 2022, regarding the inquiry into Measure L transparency. The following is the Hughson City Council’s response based on this analysis and submitted as required to the Civil Grand Jury’s Findings (F5 and F6) and Recommendations (R5 and R6).

The City of Hughson disagrees partially with the findings, F5 and F6.

Civil Grand Jury Finding F5:

The information currently on Hughson’s website does not give the public a clear understanding of the program, how Measure L funds have been used, and future City plans for these funds.

Response:

The City of Hughson continuously updates the Measure L website with information as it is received. On the date of receipt of the Grand Jury Report, the website was reviewed (Measure L – Local Roads First – City of Hughson) and the following information was found to be listed on the website:
• General Information regarding Measure L including when the measure was passed.
• A Roadway Maintenance Project Map.
• An Expenditure List that included the first five years of Measure L (2016-2021). • A list of three projects that had been completed with Measure L funds and a picture. • Measure L Annual Reports for FY17/18; 18/19; and 19/20.

The Annual Report for FY20/21 was posted as soon as the Final Report was received by the City.
• Annual Financial Reports for FY19/20 and FY20/21.

During the review of the City’s website, a separate page was located on the website that had little to no Measure L information listed. It is possible that this is the page that led the Grand Jury to the conclusion that the City of Hughson did not have adequate Measure L information listed. That page has been removed to ensure that the public access the correct page.

Civil Grand Jury Finding F6:

Hughson does not have a public awareness program as required by its MFA.

Response:

In the future, should additional information be available to add to the website, the City will comply with posting the information for public view.

Civil Grand Jury Recommendations R5 and R6:

R5. Within three months after adoption by StanCOG of a standard for local websites, Hughson should update its website to be in compliance.

R6. Three months after adoption of a public awareness program by StanCOG, Hughson should implement the program.

Response:

The City of Hughson agrees with the above recommendations and shall implement any standard for local websites and any public awareness program adopted by StanCOG.

Respectfully submitted,
Merry Mayhew
City Manager
City of Hughson
Stmffl fi ST ANISLAUS COUNTY CIVIL GRAND JURY
PO Box 3387 - Modesto, CA 95353 - (209) 525-4252 - Fax (209) 558-8170 Srrlvjng ro be llie Besl
Date: May 11, 2022
Case #: 22-06GJ
CONFmENTIAL - DELIVERY BY Certified Mail- Return Receipt Requested
Name of Paity Being Served Report
Huglison City Council
Mayor George Carr
p.o. Box 9
Huglison, CA 95326
Dear Mayor Carr
Tlie Stanislaus Cormty Civil Grand Jisry lias completed tlie attaclied report. Tlie Civil Grand Jury is providing you witli a copy of this report two days in advance of its public release, as required by California Penal Code §933.05(f). Tlie Penal Code also proliibits you from disclosing any contents of tlie report prior to public release by tlie Civil Grand Jury.

Your response to tlie juiy's findings and recoi'nmendations must be subinitted to tlie Presiding Judge of tlie Superior Court, tlie Honorable Robert B. Westbrook, at PO Box 3488, Modesto, CA 95353. Submit a liard copy of yorir response.

Enclosed are guidelines tliat inay be lielpful as you prepare your response.

Sincerely,
Micliael Herrero, Foreperson
2022-2023 Civil Grand Juiy
Distrituition Information
€ Otlier
Signature
€ In person
Date
Printed Name Time Served
Measure L Transparency
2021-2022 Stanislaus County Civil Grand Jury
Case # 22-06GJ
S2Y
The intent of the Stanislaris County Civil Grand Jury's (SCCGJ) inquiry into Measure L, the local transportation sales tax, was to gauge the transparency between the cities/County aiid the public regarding the use of public funds. In addition, SCCGJ examined whether the public information requirements of the Master Funding Agreements (MFA) were being followed. The cities of Hughson, Newman, and Oakdale were evaluated, as well as the Stanislaus Council of Governments (StanCOG), which is the administrator of the MFAs.

SCCGJ finds that the cities of Newman and Hughson are not meeting the public information requirements of Measure L and changes to their respective websites are needed. The City of Oakdale is meeting the minimum requirements, however, additional information would be beneficial.

SCCGJ also finds that StanCOG is not adequately enforcing the public information requirements of Measure L. Minimum requirements and guidelines should be developed for the cities, County, and StanCOG to use on their respective websites. Furthermore, StanCOG should modify its internal procedures for determining compliance with the public information requirements, as well as adopt the required Public Awareness Program.

GLOSSARY
MFA . Master Funding Agreement
MLOC Measure L Oversight Committee
SCCGJ Stanislaus County Civil Grand Jury
StanCOG Stanislaus Coiu'icil of Governments

BACKGROUND
In November 2016, Stanislaus County voters approved a twenty-five-year, one-half cent sales tax laxown as Measure L: Local Roads First Transportation Funding Measure Ordinance #16-01.

Measure L began in fiscal year 2017-2018 and will remain in effect until 2041. Measure L funds are to be used exclusively for transportation improvements, such as road repair work, stop signs, traffic lights, bike patlis, and sidewalks. Measure L funds may not replace otlier sources of funds previously used for traffic improven"ients, nor be used for new roads. While it was originally projected that the tax would raise $960 million over twenty-five years, or $38 million per year, tlie program has already raised over $166 million, ahead of projections. For example, in FY 2020-2021, over $56 million was collected. Since this is one of the largest voter approved sales taxes in County history, the proper, efficient, and effective administration of these funds is impoitant to foster aiid maintain confidence in our public agencies.

Sixty-five percent of all funds are to be used locally as follows:
* Fi:fty percent to local streets and roads
* Ten percent to traffic management
* Five percent to bike/pedestrian improvements
The remaining thirty-five percent of the :funds are broken down as:
* Twenty-eight percent for regional projects
* Seven percent for transit programs
StanCOG is the local agency which administers Measure L. All nine cities in the county, in addition to Stanislaus County, receive funds. Each of these agencies has an MFA with StanCOG containing requirements for making information about expenditures available to the public, as well as reports that must be filed with StanCOG.

The MFAs for 2020-2025 contain three separate and distinct public information requirements for cities (see Article IV, Sections A(5) through A(7) as follows:
* Provide current and accurate information on its website regarding the expenditure of Measure L funds
* Post signage at each project in excess of $250,000 identifying it as funded in whole or pait by Measure L
* Actively participate in a "public awareness program" in partnership with StanCOG to provide public information on Measure L activities
In addition to these public information requirements, the MFAs also require the cities to provide StanCOG with information which includes, but is not limited to:
* Monthly revenue, expenditure, and cash balance reports * Quarterly "milestone" reports showing progress on projects * Annual program compliance reports
* Independently audited financial statements for the prior fiscal year regarding rise of Measure L funds
During tliis investigation, SCCGJ reviewed who is the responsible party for enforcing compliance with the requirements of Measure L. The primary responsibility for enforcement of the MFAs rests with the StanCOG policy board and the withholding of funds is the tool to enforce compliance. The responsibility of tbe Measure L Oversight Committee (MLOC) is to verify the results of the annual audits. The MLOC is composed of one citizen from each jurisdiction.

This is the third investigation of Measure L by SCCGJ. In 2018 and 2020, the overall implementation and use of funds by Ceres, Patterson, and Turlock were explored. Although regional and transit projects receive Measure L funds, this investigation concentrated on the local project poition of the program.

METHODOI'OGY
While the MFAs contain a number of reporting requirements for cities and StanCog, SCCGJ focused on three requirements:
1) How effectively is StanCOG enforcing the requirements for public information contained in the MFAs?
2) How are the cities of Newman, Hughson, and Oakdale informing their citizens about Measure L through their websites?
3) Are the cities and StanCOG participating in a public awareness program? During the investigation SCCGJ:
* Reviewed Ordinance #16-01, which established Measure L * Reviewed the websites of StanCOG, Hughson, Newman, and Oakdale * Reviewed the 2020-2025 MFA's between StanCOG and the three cities aboye * Interviewed staff from each of the three cities and StanCOG * Reviewed StanCOG Annual Reports
* Reviewed letter from StanCOG Executive Director dated April 8, 2022, regarding public aWareneSS progranlS.

DISCUSSION
StanCOG
StaiiCOG has a responsibility to the public to be transparent about the use of 'Measure L funds.

It is also responsible for the distribution of Measure L funds to the cities and County and to enforce tlie requirements of the MFAs. Failure of a city or tlie County to comply with the requirements can result in the withholding of funds.

Each fiscal year all cities must submit to StanCOG:
* Capital Improvement Program
* Roadway resurfacing map
* Traffic management plan
* Pedestrian and bicycle plan
* Other documents which identify all programs and projects the city intends to fund partially or fully with Measure L funds
A maintenance of effort calculation must also be submitted and verified by an independent audit.

This calculation ensures that Measure L funds have been used to increase, not substitute for existing funds. In addition to the monthly revenue and expendihire reports, the cities and county are also required to submit quarterly milestone reports, detailing their projects' progress.

During the course of this investigation, StanCOG's Measure L website was not operating properly. The current website, which became functional again in February 2022, contains links to an abundance of Measure L information, including annual reports, project updates, and monthly revenue and expenditure reports.

HUGHSON
* Hughson receives 1.26% of the Measure L sales tax from StanCOG * $1,209,193forstreetsandroads
* $241,839 for trific management
@ $120,919 for bike/pedestrian
* TotalfundingreceivedthroughFY2020-2021was$l,571,951
* Duringthesan'ietimeperioditspent$698,291,primarilyforstreetsandroads Hughson has chosen to save some of its revenue over several years in order to have sufficient :tunds for major road projects. Hughson's website contained only general information regarding Measure L, in addition to a press release and annual report from StanCOG for 2017-2018.

NEWMAN
Newman also receives 1.26% of the Measure L funds from StanCOG. Because its percentage is relatively small, Newman opted to borrow money from its general :[und reserves, enabling the city to undertalce projects up front rather than waiting years to accumulate the necessary funds.

Initially, $1.6 million was bonowed from the general fund reserve, wl'iich is to be paid back within five years. The City of Newinan's share of revenue Measure L funds as of June 30, 2021, was :
* $1,209,193 for streets/roads,
* $241,839 for traffic management
* $120,919 for bike/pedestrian improvements.
* TotalfundingreceivedthroughforFY2020-2021was$l,571,951 Once these funds are paid back, the City of Newman anticipates it will borrow from its general fund reserves to finance additional Measure L projects.

When the investigation began, Newman's website contained no information on Measure L.

After interviews with Newman staff, the website was modified to contain:
* General information on Measure L
* AlinktoStanCOG's20l9-2020AnnualReport,whichcontainsinformationon Newman's revenues and expenditures for that fiscal year * The 2019-2020 annual letter from the MLOC reviewing the third-party audit for that fiscal year
* A link to a video at StanCOG which provides an overview of Measure L * A link to StanCOG's MLOC webpage

OAKDALE
Oakdale receives 3.86% of the Measure L funds from StanCOG. As of June 30, 2021, the City of Oalcdale's revenue from Measure L was:
* $3,704,357 for streets/roads
* $740,871 for traffic management
* '3'370,436 for bikes/pedestriaiis
* Total funds received tluaough FY 2020-2021 was $4,815,664 Oakdale's website contained tl'ie following Measure L information:
* A general description of Measure L
* A brief list of current, completed, and future projects * A link to StanCOG's Measure L website
FmDINGS
StanCOG
Fl. The local website requirements of tlie MFAs are very general and don't provide adequate guidance to the cities and County regarding website content.

F2. Despite information that was outdated or missing entirely from the Newman and Hughson websites, StanCOG did not enforce the MFA website posting requirements nor withhold funds from these jurisdictions. '
F3. While it is impractical to enforce the percentage allocations between streets/roads, traffic management, and bike/pedestrian projects on an annual basis, StanCOG does not have a procedure in place to ei'iforce these percentage allocations over the long term.

F4. StanCOG has not adopted a public awareness program with the cities/County as required in the MFAs.

HUGHSON
F5. The infonnation currently on Hughson's website does not give the public a clear understanding of the program, how Measure L funds have been used, and future city plans for these funds.

F6. Hughson does not have a public awareness program as required by its MFA.

NEWMAN
F7. Tlie information currently on Newman's website does not give the public a clear understanding of the program, how tlie Measure L funds have been used, and :future city plans for these funds.

F8. Newman does not have a public awareness program as required by its MFA.

F9. Newman cuirently has no representative on the MLOC.

OAKDALE
FIO. Oakdale's website has general information on Measure L overall, and limited information on current, completed, or fuhire projects.

Fll. Oakdale does not have a public awareness program as required by its MFA.

F12. Oakdale's website has a link to StanCOG which is non-operational.

RECOMMENDATIONS
StanCOG
Rl. StanCOG should develop a minimum standard for the local websites by December 31, 2022, including a requirement that the information be updated bi-annually. Minimum requirements for local websites would include:
* A description of Measure L and the city's plan for these funds * Total revenues and expenditures over the life of the program * Alistofpast,current,andfutureprojectswithenoughdetailforthepublicto understand how the cities prioritize their projects
* A contact number for additional information
* A link to StanCOG for detailed information
R2. StanCOG should develop procedures to verify and enforce compliance with MFA requirements prior to disbursement of funds by December 31, 2022.

R3. StanCOG should discuss how the percentage allocations will be enforced over the long term with the local agencies by December 31, 2022, so that enforcement does not become impossible later in the program.

R4. StanCOG should adopt tlie public awareness program as required by the MFAs by March 31, 2023.

HUGHSON
R5. Within three months after adoption by StanCOG of a standard for local websites, Hughson should update its website to be in compliance.

R6. Three months after adoption of a public awareness program by StanCOG, Huglison should implement the program.

NEWMAN
R7. Within three months a:[ter adoption by StanCOG of a standard for local websites, Newman should update its website to be in compliance.

R8. Tl'iree months after adoption of a priblic awareness program by StanCOG, Newman sl'iorild implement the program.

R9. Newman should appoint a representative to MLOC by October 31, 2022.

OAKDALE
RIO. Within three months after adoption by StanCOG of a standard for local websites, Oakdale should update its website to be in compliance. a
Rll. Three months after adoption of a public awareness program by StanCOG, Oakdale should implement the program.

R12. Oalcdale'swebsitelinktoStanCOGshouldbeconnectedbyDecember31,2022.

REQUEST FOR RESPONSES
The following responses are required pursuant to Penal Code §933 and §933.05. The SCCGJ requests responses from tlie following governing bodies within ninety days:
* City of Hughson City Council: F5, F6, R5, R6
* City of Newman City Council: F7, F8, F9, R7, R8, R9
* City of Oakdale City Council: FIO, Fll, F12, RIO, Rll, R12 The above listed responses are required pursuant to Penal Code §933 and §933.05. The SCCGJ requests response from the following governing body within sixty days:
* StaiiCOG Executive Director: Fl, F2, F3, F4, Rl, R2, R3, R4.

Responses are to be submitted to:

The Honorable Robert B. Westbrook
Presiding Judge, Superior Court of California, County of Stanislaus p.o. Box 3488
Modesto, CA 95353

DISCLAIMER
Case #22-06GJ is issued by the 2021-2022 Stanislaus County Civil Grand Jury with the following exception: a grand jury member recused voluntarily due to a perceived conflict of interest. The recused grand juror was excluded from all phases of the investigation, including interviews, deliberations, voting, and in writing and approval of this repoit. None of the information included in tliis report was obtained from the excluded grand juror as a means of mitigating a potential bias to the integrity of this report.

Reports issued by the Grand Jury do not identify individuals interviewed. Penal Code section 929 requires that reports of the Grand Jury not contain the name of any person or facts leading to the identity of any person who provides information to the Grand Jury.

Meeting Date: June 13, 2022
Subject: Acceptance of the Fiscal Year 2020-21 City of Hughson Audited Annual Financial Report
Enclosures: Annual Financial Report Fiscal Year Ended June 30, 2021 Management Report & Auditor’s Communication Letter
Presented By: Anna Nicholas, Director of Finance & Administrative Svcs.

Approved By: _______________________________
City Manager
Staff Recommendation:

Review and accept the City of Hughson’s Fiscal Year 2020-21 audited Annual Financial Report.

Background and Overview:

Each year, the City’s financial records are audited by an independent Certified Public Accounting firm. The firm of Moss, Levy & Hartzheim, LLP, completed the City’s audit of Fiscal Year 2020-21, and has produced the Annual Financial Report for Fiscal Year End June 30, 2021. The opinion given by the auditors for this audit is an unmodified opinion. An unmodified opinion is given when the auditor expresses an opinion that the financial statements are presented, in all material respects, in accordance with Generally Accepted Accounting Principles (GAAP). This is the highest opinion that auditors can give on the financial statements. Audited Annual Financial Reports are important documents to governmental agencies. They are used by governing boards, members of the public and bond rating agencies.

The Management Discussion and Analysis of the Annual Financial Report provides a detailed analysis of the financial highlights for the fiscal year ending June 30, 2021, some of which are:

1. On the government-wide governmental activities, the City’s total net position equaled $38,486,100, an increase of $2,637,285 over the prior fiscal year.

2. For business type activities (i.e., water, sewer), the City’s total net position equaled $54,667,350, an increase of $7,396,635 over the prior fiscal year.

CITY COUNCIL AGENDA ITEM NO. 6.1
SECTION 6: NEW BUSINESS

3. The General Fund revenues and expenditures were consistent with the previous fiscal year. Revenues increased by $141,785 and expenditures decreased by $114,880. The fund balance increased by $651,817 to $4,715,340. The General Fund reserve is healthy when compared to similar governmental units. With the current reserves and fund balance, the City could operate for approximately two years without additional revenue.

4. The Sewer Fund total net position increased by $811,049 to $35,941,536.

5. The Water Fund total net position increased by $6,605,343 to $18,433,916 due to grant revenue for projects.

6. The Successor Agency continues to carry a negative fund balance due to holding the RDA (Redevelopment Agency) issued debt. Money continues to be collected on the tax roll to pay down the debt.

7. The City’s Net Pension Liability as of June 30, 2021, equaled $3,486,050. a. Miscellaneous: $2,611,642
b. Safety: $874,408
This is a total increase of $195,277 from the prior year.

8. The audit did not produce any internal control findings that would be considered material weaknesses or significant deficiencies. There were no difficulties encountered in performing the audit and no management disagreements to report. Two significant deficiencies were noted the previous year and City management has implemented internal controls to rectify those findings.

9. The audit produced one other finding which has carried over year to year.

This finding pertains to the year-end close process. City management is in agreement with this observation and will continue to work with the auditors on ensuring the best accounting practices for the City while maintaining adequate internal controls.

The City continued to face economic uncertainty during this auditing period due to the COVID-19 Pandemic; however, the City continues to remain in a good financial position. Looking forward, operating expenses continue to rise and will be expected to do so in the near future due to supply chain issues, increasing labor costs, and overall impacts of inflationary economic activity. Sales tax revenues are expected to remain consistent and property tax revenues are expected to increase based on current planned development and the anticipated property tax reallocation sharing agreement with the County.

Fiscal Impact:

There is no fiscal impact for the acceptance of the Annual Financial Report. The cost of the audit is budgeted for in the annual budget process and the completion of the work came in at the budgeted amount.

CITY OF HUGHSON
Annual Financial Report
Fiscal Year Ended June 30, 2021

CITY OF HUGHSON

ANNUAL FINANCIAL REPORT
Fiscal Year Ended June 30, 2021

TABLE OF CONTENTS
I. FINANCIAL SECTION
A. IndependentAuditor'sRepoit..................

B. Management's Discussion and Analysis.....

C. Basic Financial Stateinents:

Government-wide Financial Statei'nents:

Stateinent of Net Position
Stateinei'it of Activities..

Fund Financial Statements:

Goveriuriental Funds:

Balance Sheet...

Reconciliation of tlie Balance Slieet of Governinental Funds to tlie Stateinent of Net Position................. ........................................... ... 21 Stateinent of Revenues, Expenditures, and Cl'ianges in Fund Balai'ices................ 22 Reconciliation of tlie Statement of Revenues, Expenditures, and Clianges in Fund Balances of Governmei'ital Funds to tlie Stateinent of Activities....

Proprietary Funds:

StatementofNetPosition.................... ...................... .................................26 Stateinent of Revenues, Expenses, and Changes in Net Position.......................... 27 . 28 Statement of Casl'i Flows
Fiduciaiy Fund:

Staten'ient of Fiduciary Net Positioi'i................

Statement of Changes in Fiduciary Net Position..

Notes to Basic Financial Statei'nents.
18 25
57 D. Required Supplemei'itaiy {nfoimatioi'i:

General Fund - Scliedule of Revenues, Expenditures, and Clianges in Fund Balance - Budget and Actual.......

Refuse Special Revenue Fund - Scliedule of Revenues, Expenditures, and Cl'ianges in Fund Balance - Budget and Actual ... ... ......... ........................ 58 Schedule of tl'ie City's Proportionate Sliare of the Net Pension Liability......................... 59 Scliedule of Pension Contributions ........... ................... ............ .................................. 60 E. Otlier Supplemental {nforination
Scliedule of Revenues, Expenditures, and Clianges in Fund Balai'ice - Budget and Actual - Other Major Goveriunental Funds:

Public Facilities Capital Projects Fund......... .61

CITY OF HUGHSON

ANNUAL FINANCIAL REPORT
Fiscal Year Ended June 30, 2021

T ABLE OF CONTENTS
I. FINANCIAL SECTION (Continued)
E. Otlier Suppleinental Infoi-ination (Continued)
Noninajor Governinei'ital Funds
Description of Noni'najor Governmental Funds......................

Coinbining Balance Sl'ieet.......

Combining Stateinent of Revenues, Expenditures, ai'id Clianges in Fund Balances..

Schedtdes of Revenues, Expenditures, and Clianges in Fund Balances - Budget and Actual:

Gas Tax Special Revenue Fund........ .

Vehicle Abatement Special Revenue Fund....................................

CDBG Reliab Special Revei'iue Fund...... .... ............

Community Enliancement Special Revenue Fund... ..............

Local Transpoitation Special Revenue Fund........... ..

Storin Drain Special Revenue Fund... ......... ............

SLESF Special Revenue Fund..........

Lighting and Landscaping Special Revenue Fund...............

Benefit Assessment Special Revenue Fund...... ....... ................

Trencli Cut Special Revenue Fund..

IT Reserve Special Revenue Fund..

Measure L Sales Tax Special Revenue Fund.... .. ......

SB-I Roads Special Revenue Fund................

Disability Access and Education Special Revenue Fund ........

Transpoitation Capital Projects Fund...

Municipal Park Capital Projects Fund........

Parks Development Impact Fees Capital Projects Fui'id...... . 70
Noninajor Proprietary 'Funds
Description of Nonmajor Proprietaiy Fui'ids
Combining Stateinent of Net Position
Combining Statement of Revenues, Expenses, and Clianges in Net Position............. 93 Combining Statement of Cash Flows................... .... ...................... .................... ... 94

FINANCIAL SECTION

PARTNERS

RONALD A LEVY CPA

CRAIG A HARTZHEIM, CPA

HADLEY Y HUI, CPA

ALEXANDER C HOM, CPA

ADAM V GUISE, CPA

TRAVIS J HOLE, CPA

MOSS, LEVY & HARTZHEIM LLP
Ca?TIFIED PUBLIC ACCOUNTANTS
COMMERCIAL ACCOuNTING & TAX SERVICES
9465 WILSHIRE BLVD., 3'o FLOOR
BEVERLY HILLS, CA 90212
TEL: 310.670.2745
FAX: 310.670.1689
www.mlhcpas.com

INDEPENDENT AUDITOR'S REPORT
The Members of the City Council of the
City of Hughson
Hughson, California

GOVERNMENTAL ALIDIT SERVICES
5800 HANNUM AVE., SUITE E
CULVER CITY, CA 90230
TEL: 310.670.2745
FAX: 310.670.1689
www.mlhcpas.com
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Hughson, California (City) as of and for the fiscal year ended June 30, 2021, which collectively comprise the City's basic financial statements as listed in the table of contents.

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

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstateinent of the financial statements, whether due to fraud or error. In making those risk assessinents, tl'ie auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in tl'ie circumstances, but riot for the purpose of expressing an opinion on the effectiyeness of the entity's intemal control. Accordingly, we express no such opinion.

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

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the govemmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Hughson, California, as of June 30, 2021, and the respective changes in financial position and, where applicable, cash flows thereof, for the fiscal year then ended in accordance with accounting principles generally accepted in the United States of America. 1 OFFICES: BEVERLY HILLS CULVER CITY SANTA MARIA
MEMBER AMERICAN INSTITUTE OF C.P.A.'3 CALIFORNIA SOCIETY OF MUNICIPAL FINANCE OFFICERS CALIFORNIA ASSOCIATION OF SCHOOL BUSINESS OFFICIALS Einpliasis of Matter
As discussed in Note 14 to the financial stateinents, In Januai'y 2020, the World F-{ealtli Organization has declared COVID-19 to constitute a =Public Health Emergency of International Concern." Gisien the uncertainty of tlie situation. the duration of any financial impact cannot be reasonably estiinated at this time. Our opinion is not modified witli respect to tliis matter.

Other Matters
Required Supplementcuy[nformation
Accounting principles generally accepted in tlie United States of America require that the management's discussion and analysis on pages 3 through 13, Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget to Actual - General Fund, and the Schedule pf Revenues, Expenditures, and Changes in Fund Balance - Budget to Actual - Refuse Special Revenue Fund, Schedule of Cl'ianges in tlie Net Pension Liability and Related Ratios, and Schedule of Pension Contributions on pages 57 through 60 be presented to supplement the basic financial statements. Such information, altliough 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 ol- inqtiiries of management about the methods of preparing the information and comparing the information for consistency with managementas responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on tlie information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Other [nformation
Our audit was conducted for the purpose of forming opinions on tlie financial statements that collectively comprise the City of Hug)ison's basic financial statements. The Budgetary Comparison Schedules for the Public Facilities Capital Projects Fund and Nonmajor Governmental Funds; the Coinbining Financial Statements for the Nonmajor Govet'nmental Funds, and the Nonmajor Enterprise Funds listed in the table of contents are presented for purposes of additional analysis and are not required parts of the basic financial statements.

The Budgetary Comparison Schedules for tlie Public Facilities Capital Projects Fund and Nonmajor Governinental Funds; the Combining Financial Statements for the Nonmajor Governinental Funds, and the Nonmajor Enterprise Funds are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in our audit of the basic financial statements and ceitain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. [n our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole.

Other Reporting Required by Gosiermnent Auditing Standards In accordance with Gorierninent Auditing Standards, we have also issued our report dated April 28, 2022, on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to desct'ibe the scope of our testing of internal control over financial repoiting and compliance and the results of tliat 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 Governinenl.4udiling Standards in considering the Cityas internal control over financial reporting and compliance. 'W%4, << v d-4''
Moss, Levy & Hartzheim, LLP
(:ulver City, California
April 28, 2022
2 CITY OF HUGHSON

MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
This discussion and analysis provides an overview of the City of Hughson's financial performance for the fiscal year ended June 30, 2021. This report has been prepared in accordance with Accounting Principles Generally Accepted in the United States of America (USGAAP) as established by the Governmental Accounting Standard Board (GASB). We encourage our readers to consider this information in conjunction with the information provided in the accompanying basic financial statements and notes. The City's fiscal highlights are presented below:

FINANCIAL HIGHLIGHTS
Financial highlights of fiscal year ended June 30, 2021 include the following:

Government-wide:

The City's total net position was $93,153,450 as of June 30, 2021 0f this total, $38,486100 was governmental net position and $54,667,350 was business-type net position.

Governmental revenues include program revenues of $3,486,828 and general revenues and transfers of $3,400,227, for a total of $6,887,055.

Governmental expenses were $4,249,770.

Business-type program revenues, transfers and interest were $11,215,218 while business-type expenses were $3,818,583.

Fund Level:

Governmental fund balances increased $2,366,707 in fiscal year 2021.

Governmental fund revenues increased $607,638 in fiscal year 2021. Although the functional revenue is largely unchanged from the previous fiscal year, the increase in the current fiscal year can be attributed mainly to intergovernmental revenue but is consistent with previous fiscal years due to the nature of the revenue.

Governmental fund expenditures decreased by $594,559 mainly due to decreased spending on capital projects.

General Fund:

General Fund revenues of $3,266,890 is largely consistent with the previous fiscal year.

General Fund expenditures of $2,703,885 is consistent with the previous fiscal year.

General Fund fund balance of $4,715,340 as of June 30, 2021, increased by $651,817 from 2020 fiscal year's fund balance of $4,063,523.

OVERVIEW OF THE ANNUAL FINANCIAL REPORT
This Annual Financial Report is divided into five parts:

Government-wide financial statements
Fund financial statements
Notes to the financial statements
Required supplementary information
Other supplemental information
Government-wide Financial Statements
The Government-wide financial statements provide a longer-term view of the City's activities as a whole and comprise the Statement of Net Position and the Statement of Activities. The Statement of Net Position provides information about the financial position of the City as a whole, including all of its capital assets and long-term liabilities on the full accrual basis, similar to that used by private industry. 3 CITY OF HUGHSON

MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
The Statement of Activities provides information about all the City's revenues and all of its expenses, also on the full accrual basis, with the emphasis on measuring net revenues or expenses of each of the City's programs. The Statement of Activities explains in detail the change in net positions for the fiscal year.

All of the City's activities are grouped into governmental activities and business-type activities, as explained below.

The amounts in the Statement of Net Position and the Statement of Activities are separated into governmental activities and business-type activities in order to provide a summary of these two activities for the City as a whole.

Government-wide financial statements are prepared on the accrual basis, which mean they measure the flow of all economic resources of the City as a whole.

The Statement of Net Position and the Statement of Activities present information about the following:

Governmental Activities - All of the City's basic services are considered to be governmental activities. These services are supported by the general City revenues such as taxes, and by specific program revenues such as user fees and charges.

Business-type Activities - The City's enterprise activities of water, and wastewater are reported in this area. Unlike governmental services, these services are supported by charges paid by users based on the amount of service they use.

Governmental Fund Financial Statements
The governmental fund financial statements report on the City's operations in more detail than the Government-wide statements and focus primarily on the short-term activities of the City's General Fund and other major funds. The governmental fund financial statements measure only current revenues and expenditures and fund balances: they exclude capital assets, long-term debt, and other long-term amounts.

The governmental fund financial statements provide detailed information about each of the City's most significant funds, called major funds. Major funds account for the major financial activities of the City and are presented individually, while the activities of non-major funds are presented in summary, with subordinate schedules presenting the detail for each of these other funds. The concept of major funds, and the determination of which funds are major, was established by the Governmental Accounting Standards Board (GASB) Statement No. 34 and replaces the concept of combining like funds and presenting them in total. Instead, each major fund is presented individually, with all non-major funds summarized and presented only in a single column. Subordinate schedules present detail of these non-major funds.

Major funds present the major activities of the City for the fiscal year, and may change from year to year as a result of changes in the pattern of the City's activities.

In the City's case, there are three major governmental funds in addition to the General Fund: Home Loan Special Revenue Fund, Refuse Special Revenue Fund, and Public Facilities Capital Projects Fund.

The City reports 2 major and 2 non-major enterprise funds Fund financial statements include governmental and proprietary funds as discussed below.

Governmental fund financial statements are prepared on the modified accrual basis, which means they measure only current financial resources and uses. Capital assets and other long-lived assets, along with long-term liabilities, are not presented in the governmental fund financial statements.

Proprietary fund financial statements are prepared on the full accrual basis and include all of their assets and liabilities, current and long-term.
4 CITY OF HUGHSON

MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021

FINANCIAL ACTMTIES OF THE CITY AS A WHOLE
This analysis focuses on the net positions and changes in net positions of the City as a whole. Tables 1, 2, and 3 focus on the City's Governmental Statement of Net Position and Statement of Activities, while Tables 4, 5, and 6 focus on the City's Business-type Statement of Net Position and Statement of Activities.

Table 1
Gow;rnmental Activities Net Position atJune 30,
Governmental Governmental
Activities Activities
2021 2020
ASsets
Cash and investments $ 11,854,017 $ 9,356,393
Otherassets 2,909,079 1,885,156
Capitalassets, net 26,046,581 26,589,179
Total AssetS 40,809,677 37,830,728
DeferredOutflom ofResources
Pension related
Total Def. Outflom
350,796
350,796
402,437
402,437
Liabilities
Long ten'n liabilities
Other liabilities
1,914,459
699,198
1,801,460
449,212
Total Liabilities 2,613,657 2,250,672
Deferredlnflom ofResources
Pension related
Total Def. mflom
60,716
60,716
133,678
133,678
Net Position
Net investment in capital assets
Restricted
Unrestricted
26,046,581
8,469,926
3,969,593
26,589,179
6,720,693
2,538,943
Total Net Position $ 38,486,100 $ 35,848,815
The City's governmental net position amounted to $38,486;100 as of June 30, 2021, an increase of $2,637,285 over 2020. This increase in the change in net position is reflected in the Governmental Activities column of the Statement of Activities shown in Table 2. The City's net position as of June 30, 2021 comprised the following:

Cash and investments comprised $11,854,017. Substantially all of these amounts were held in short term investments in government securities, as detailed in Note 3 to the financial statements.

Receivables comprised $1,737,516 of current receivables and loans receivable of $1,170,349 that is due over longer periods of time as explained in the Notes.

Capital assets of $26,046,581 net of depreciation charges, which included all the City's capital assets used in governmental activities.

Current liabilities, including accounts payable, claims, and other amounts due currently, totaled $699,198.

Long-term liabilities of $1,914,459 does not include $10,000, which is the current portion. The debt is related to the City's Net Pension Liability and compensated absences. 5 CITY OF HUGHSON

MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE FISCAL YEAR ENDED JUNE 30 2021
Net investment in capital assets of $26,046,581, represents the City's investment in capital assets used in governmental activities, net of accumulated depreciation and amounts borrowed to finance those investments.

Unrestricted net position, the part of net position that can be used to finance day to day operations without constraints established by debt covenants or other legal requirements or restrictions, was $3,969,593 as of June 30, 2021 .
.':)(-)t! I Ce S O f Re V I-i Ll P
Ilse of 111'-}11"'lt
.111(I Ill "llCal li'
0 1 7'
Tqxes
.!l ) ",
(liaiges Toi
S(!l"lrOS
)4'.,.

Op=i ..itmq gi ai:ts
al'CI COIII(:l1llilCll'b
( iputal gi:n-ih
.ThllClcciniiil'uiti.ins
As the Sources of Revenue chart above shows, $2,916,265 or 42% of the City's fiscal year 2021 governmental activities revenue came from taxes, while $1,634,249 or 24% came from charges for services, $1,495,727 or 22%, came from capital grants and contributions, $356,852 or 5% came from operating grants and contributions, and the remainder came from a variety of sources. :-'! i i-'lLl lC)i1(:!i :I:a,l:)t31 .'4Q':,
Pt:l'im '.. oi k %
(iei'u:'i a
Pul.ilic safety
),2 06
The Functional Expenses chart above includes only current fiscal year expenses; it does not include capital outlays, which are added to the City's capital assets. As the chart shows, general government was $1,352,233, or 32%, of total governmental expenses, public safety was $1,381,473, or 32%, public works was $1364,106, or 32%, parks and recreation was $151,958, or 4%.

The Statements of Activities presents program revenues and expenses and general revenues in detail. All of these elements in the changes in governmental net position are summarized below. 6 CITY OF HUGHSON

MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
Table 2
Change in Governmental Net Position
Governmentaf
Activities
2021
Governmental
Activities
2020
Expenses
General govemment
Public safety
Public works
Parks and recreation
Total Expenses
Revenues
Program revenues
Charges forservices
Operating grants and contributions
Capital grants and contributions
Total program revenues
General revenues and transfers
Taxes
Use ofmoney and property
Other revenue
Transfers
Total general revenues and transfers
Total Revenues and Transfers
$ 1,352,233 $
1,381,473
1,364,106
151,958
4,249,770
1,634,249
356,852
1,495,727
3,486,828
2,916,265
11,605
461237
5,120
3,400,227
6,887,055
1,547, 178
1,358,476
1,356,358
128,437
4,390,449
1,055,398
1,085,983
773,554
2,914,935
1,598,099
27,143
829,266
5,120
2,459,628
5,374,563
Change in Net Position $ 2,637,285 $ 984,114
As Table 2 above shows, $3,486,828 or 51 %, of the City's fiscal year 2021 governmental revenue, came from program revenues and $3,400,227, or 49%, came from general revenues such as taxes and interest and transfers. Program revenues were composed of charges for services of $1,634,249, which included permit revenues, fees and charges used to fund expenses incurred in providing services; $356,852 of operating grants and contributions, which included gas tax revenues and housing and police grants; and capital grants and contributions of $1,495,727, that consisted mainly of street project grants and developer impact fees restricted to capital outlay.

General revenues are not allocable to programs. General revenues are used to pay for the net cost of governmental programs.

Table 3 presents the net expense or revenue of each of the City's governmental activities. Net expense is defined as total program cost less the revenues generated by those specific activities. 7 CITY OF HUGHSON

MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE FISCAL YEAR ENDED JUNE 30, 202'l
Table 3
Governmenta} Activities
Net Revenue
(Expense) from
Services 2021
Net Revenue
(Expense) from
Services 2020
General govemi'nent
Public safety
Community development
Public works
Pad<s and recreation
(283,159) $
(1,188,810)
477,43 l
119,460
112,136
(1,398,528)
(1,136,465)
248,897
817,91 i
(7,329)
Total $ (762,942) $ (1,475,514)

BUSINESS-TYPE ACTMTIES
The Statement of Net Position and Statement of Activities present a summary of the City's Business-type activities that are composed of the City's enterprise funds.

Table 4
Business-type Activities Net Position
Business-type Business-type
Activities Activities
2021 2020
ASsets
Cash and investments $ 13,835,298 $ 11,012,390
Otherassets 171463 118,991
Capitalassets,net 54,341,188 53,203,362
Total Assets
Deferred Outflow of Resources
Pension related
Total Def. Outflow
Liabilities
Long tertn liabilities
Other liabilities
Total Liabilities
Deferred Inflom of Resources
Pension related
TotaJ Def. Inflows
Net Position
Net investment in capital assets
Unrestricted
68,353,949
298,696
298,696
12,487,861
1,445,736
13,933,597
51,698
51,698
42,882,319
it,785,031
64,334,743
342,670
342,670
15,317,660
1,975,212
17,292,872
113,826
113,826
37,829,686
9,441,029
Total Net Position $ 54,667,350 $ 47,270,715
The net position of business-type activities increased by $7,396,635 in fiscal year 2021. 8 CITY OF HUGHSON

MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
Table 5
Change in Business-type Net Position
Business-type
Activities
2021
EXoenses
Water $ 1,171,444
Sewer 2,608,825
CommunityFacilities 38,314
Business-type
Activities
2020
$ 1,144,906
2,598,216
49,782
Total Expenses 3,818,583 3,792,904
Revenues
Program revenues
Charges for services
Capital grants and contributions
5,808,857
5,385,894
5,3s3,808
610,796
Total program revenues 11,194,751 5,994,604
General revenues and transfers
Use of money and property
Transfers
25,587
(5,120)
107,175
(5,120)
Total general revenues and transfers 20,467 102,055
Total Revenues andTransfers 11,215,218 6,096,659
Change in Net Position $ 7,396,635 $ 2,303,755
Water
Sewer
Other

ANALYSIS OF MAJOR FUNDS
Governmental Funds
General Fund
Table 6
Business-type Activities
Net Revenue Net Revenue
(Expense) from (Expense) from
Services 2021 Services 2020
6,606,212 $
789,593
(19,637)
1,646,757
571 143
(22,200)
Total $ 7,376,168 $ 2,201,700
General Fund revenues increased $141,785 this fiscal year. Activity has largely remained the same as the prior fiscal year. Actual revenues were greater than budgeted by $424,209. Tax revenues decreased $20,403 during the fiscal year while licenses and permits increased by $120,322.

General Fund expenditures were $2,703,885, a decrease of $114,880 from the prior fiscal year. Capital outlay made up the majority of the decrease. 9 CITY OF HUGHSON

MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE FISCAL YEAR ENDED JUNE 30 2021
As of June 30, 2021 the General Fund's fund balance totaled $4,715,340. The unassigned portion of $4,715,340 of the fund balance represents available liquid resources.

Home Loan Fund
This fund is utilized to track deferred loans receivable. There was no activity during the fiscal year.

Refuse Fund
This fund accounts for the contracted refuse services within the City. There was no significant variance from activities in prior fiscal years.

Public Facilities Capital Projects Fund
This fund accounts for resources and expenditures in construction of public facilities within the City. There were no major projects completed or initiated in this fund during the fiscal year.

Proprietary Funds
Water Fund
Operating revenues increased by $21 0,895 in fiscal year 2021 and expenses remained largely the same resulting in operating income of $1,250,600. There were no significant changes in rates or activity during the fiscal year and as a result, operating results remained largely consistent with the previous fiscal year.

The fund's net position increased by $6,605,343 to $18,433,916, most of this increase is due to intergovernmental revenue from recovery related grant funds. Of this amount, $13,390,788 was net investment in capital assets.

Sewer Fund
Operating revenues and expenditures remained largely the same in the fiscal year 2021 as well as the operating income of $874,354. The fund's net position increased by $811,049 in fiscal year 2021.

As of June 30, 2021, the fund's net position was $35,941,536, of which $29,205,137 was net investment in capital assets and $6,736,399 was unrestricted.

CAPIT AL ASSETS
GASB No. 34 required the City to record all its capital assets including infrastructure, which was not recorded prior to GASB No. 34. Infrastructure includes roads, bridges, signals and similar assets used by the entire population.

In fiscal year 2021, the City reported the cost of all its infrastructure assets and computed the amounts of accumulated depreciation for these assets based on their original acquisition dates. At the end of fiscal year 2021, the cost of infrastructure and other capital assets recorded on the City's financial statements is as shown in Table 7 on the following page.
10 CITY OF HUGHSON

MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
Governmental activities:

Capital assets, not being depreciated:

Land
Riglits of ways
Construction in progress
Total capital assets, not being depreciated
Capital assets, being depreciated:

Buildings
linprovements
Equipment
Macliinery
Rolling stock
}nfrastructure
Total capital assets being depreciated
Less accumulated depreciation for:

Buildings
lmproveinents
Equipinent
Macliinery
Rolling stock
Infrastructure
Total accumtilated depreciation
Total capital assets, being depreciated, net
Goveriunental activities capital aSSeis, net
Btisiness-type activities:

Capital assets, not being depreciated:

Land
Construction in progress
Total capital assets, not being depreciated
Capital assets, being depreciated:

Buildings
lmproveinents
Equipment
Macliinery
Infrastructure
Rolling stock
Total capital assets, being depreciated
Less accumulated depreciation for:

Buildings
Improvements
Equipment
Machinery
Infrastructure
Rolling stock
Total accumulated depreciation
Total capital assets, being depreciated, net
Business-type activities capital assets, net
Table 7
Balance at
June 30, 2020 Additions
S 9,497,612
2,771617
497,684
12,772,9i3
57,290
57,290
919,905
6,95 7,513
622,663
241,902
565,675
13,397,859
22,705,517
(644,365)
(1,724,842)
(476.906)
(24},902)
(511,907)
(5,289,329)
(8,889,251)
13,816,266
$ 26,589,179 $
(15,172)
(236,079)
(42,337)
(26,885)
(279,415)
(599,888)
(599,888)
(542,598) $
Balance at
June 30, 2020 Additions
$ 18,108,769 $
3,241,632
21,350,401
2,395,467
2,395,467
28,068,657
4,288,696
94,425
235,695
19,002,924
242,497
51,932,894
(7,649,768
(3,495,035
(75,540
(235,695
(8,426,821
(197,073
(20,079,932
(926,694)
(42,202)
(7,472)
(265,307)
(15,967)
(1,257,642)
31,852,962 (1,257,642)
$ 53,203,363 $ 1,137,825 $
De3 Transfers
Balance at
June 30, 202 I
(255,276)
(255,276)
23, 107
232, 169
(47,298)
#(47,298) 255,276
$ 9,497,612
2,777,617
299,698
12,574,927
919,905
6,980,620
854,832
241,902
518,377
13,397,859
22,913,495
47,298
(659,537)
(1,960,921)
(519,243)
(241,902)
(491,494)
(5,568,744)
(9,441,841)
255,276 13,471,654
$ 26,046,581
Deletions Transfers
Balance at
June 30, 2021
$ 18,108,769
5,637,099
23,745,868

28.068,657
4,288.696
94,425
235,695
19,002,924
242,497
51,932,894
(8,576,462)
(3,537.237)
(83,012)
(235,695)
(8,692, 128)
(213,040)
(21,337,574)
30,595,320
$ 54,341,188
Details on capital assets, current year additions, and construction in progress can be found in the Notes.

The City depreciates all its capital assets over their estimated useful lives, as required by GASB No. 34. The purpose of depreciation is to spread the cost of a capital asset over the years of its useful life so that an allocable portion of the cost of the asset is borne by all users. Additional information on depreciable lives may be found in the Notes to the financial statements.
11 CITY OF HUGHSON

MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021

DEBT ADMINISTRATION
The City issued no new bonded debt in fiscal year 2021. The City made all scheduled repayments of existing debt.

The City's debt ISSUES are discussed in detail in Note 7 of the financial statements. The City's debt balances as of June 30 were as follows:

Table 8

LONG-TERM LIABILITIES
Governmental activities
Net pension liability
Coinpensated absences
Total governmental activities
Business-type activities
Water
Compensated absences
Net pension liability
Installment Note Payable
Total for water fund
Sewer
Compensated absences
Net pension liability
CSWRCB Revolving Loan
Instal!ment Note Payable
Total for sewer fund
Total business-type activities
2021 2020
$ 1,882,8=I14 $ l,777,373
41,615 34,087
$ 1,924,459 $ 1,811,460
$ 44,070
670,054
792,052
1,506,176
43,987
933,152
10,667,379
$ 44,070
632,520
934,960
1,611,550
43,986
880,880
11,147,045
3,321,671
11,644,518 15.393,582
$ 13,150,694 $ 17,005,132
12 CITY OF HUGHSON

MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021

ECONOMIC CONDITION, OUTLOOK, AND ACTMTY
The City continues to see a mixed economy, with a gradual increase in property tax revencies along with increases in operating expenses and PERS unfunded accrued liabilities. Residential building continues at a steady pace within the community. Hughson's diverse land use has helped to continue a growth pattern that has resulted in economic strength for the City and a stable housing market. Overall, the City continues to be in a Favorable position to attract and maintain jobs, retail establishments, and provide highly desired housing. The City continues to reach out to prospective and current business owners to continue to strengthen the City's tax base.

Overall, the City's financial position remains in good condition. In the upcoming fiscal year, the City estimates the sales tax revenue will remain consistent with the current reporting year, while property taxes will continue to see a gradual increase due to new residential development and the anticipated property tax reallocation sharing agreement with the county. The City also expects increases in operating and personnel costs due to ongoing inflation, supply chain issues and residential growth. The City will continue to analyze the increasing costs with the anticipated revenues. The City continues to maintain a fiscally responsible and conservative approach to its fiscal management and will continue to monitor the economic activity of the City.

CONT ACTING THE CITY'S FINANCIAL MANAGEMENT
This Annual Financial Report is intended to provide citizens, taxpayers, and creditors with a general overview of the City's finances. Questions about this report should be directed to the City of Hughson, at PO Box 9, 7018 Pine Street, Hughson, CA 95326. 13 This page left intentionally blank
14 CITY OF HUGHSON
Statement of Net Position
June 30, 2021
Assets:

Cash and Investments
Accounts Receivable
Notes Receivable
Interest Receivable
Internal Balances
Capital Assets, Not Being Depreciated
Capital Assets, Net of Accumulated Depreciation
Total AsSets
Deferred Outflows of Resources:

Pension related
Total Deferred Outflows of Resources
Liabilities:

Accounts Payable
Interest Payable
Deposits Payable
Noncurrent Liabilities:

Net Pension Liability
Due Within One Year
Due in More Tlian One Year
Total Liabilities
Deferred {nflows of Resources:

Pension related
Total Deferred Inflows of Resources
Net Position:

Net Investment in Capital Assets
Restricted for:

Home LoanS
Community Development
Streets and Roads
Public Safety
Public Facilities
Parks and Recreation
IT Projects
Assessment Districts
Unrestricted
Total Net Position
Governmental
Activities
$ 11,854,017
1,532,338
1,170,349
2 05, 178
1,214
12 ,57 4,927
13 ,471,654
40,809,677
350,796
350,796
364,472
324,726
1,882,844
10,000
31,615
2 ,613,657
60,716
60,716
26,046,581
1,100,392
964,518
2 ,176,447
546,885
1,842,847
1,205,395
106,475
526,967
3,969,593
$ 38,486,100
Business-type
Activities Total
$ 13,835,298
178,677
(1,214)
23,7 45,868
30,595,320
68,353,949
298,696
298,696
709,057
69,062
5,347
1,603,206
662,270
10,884,655
13,933,597
51,698
51,698
42,882,319
$ 25,689,315
1,711,015
1,170,349
2 05,178
36,320,795
44,066,974
109,163,626
649,492
649,492
1,073,529
69,062
330,073
3,486,050
672,270
10,916,270
16,5 47,25 4
112,414
112,414
68,928,900
11,785,031
$ 54,667,350
1,100,392
964,518
2,176,447
546,885
1,842,847
1,205,395
106,475
526,967
15,754,624
$ 93,153,450
The notes to the financial statements are an integral part of this statement. 15 CITY OF HUGHSON
Statement of Activities
For the Fiscal Year Ended June 30, 2021
Functions
Primary Government:

Governmental Activities:

General Government
Public Safety
Cominunity Development
Public Works
Parks and Recreation
Total Governmental Activities
Business-type Activities:

Water
Sewer
Coininunity Facilities
Total Business-type Activities
Total Primary Governinent
Expenses
Charges for
Services
Program Revenues
Operating Capital
Grants and Grants and
Contributions Contributions
13 52,233
1,381,473
1,364,106
151,958
4,249,770
1,171,444
2,608,825
3 8,314
3,818,583
$ 8,068,353
164,220
47143 I
728,504
264,094
1,634,249
2 ,391,762
3 ,398,418
18,677
5,808,857
$ 7,443,106
$ 904,854
192,663
164, 189
356,852
590,873
1,495,727
5,385,894
5,385,894
356,852 $ 6,881,621
General Revenues:

Taxes:

Propeity Taxes
Sales and Use Taxes
Business License Taxes
Other Taxes
Licenses and Perinits
Fines and Forfeitures
Special Assessi'nents
Investment Earnings
Other Revenue
Transfers
Totgl General Revenues and Transfers
Change in net position
Net Position - Beginning of Fiscal Year
Net Position - End of Fiscal Year
The notes to the financial statements are an integral part of this statement. 16 Net (Expenses) Revenues and Changes in Net Position
Governmental
Activities
Businesstype
Activities Total
(283,159)
(1,188,810)
47143 I
119,460
112,136
(762,942)
$ (283,159)
(i,188,810)
477,43 1
119,460
112,136
(762,942)
(762,942)
6,606,212
789,593
(19,637)
7,3 76, 168
1376, 168
6,606,212
789,593
(19,637)
7,3 76, 168
6,613,226
373,550
1,102,903
28, 130
851 137
235,660
39,918
284,967
11,605
467,237
5,120
3,400,227
2,637,285
35,848,815
$ 38,486,100
25,587
(5, 120)
20,467
7,396,635
47,270,7 15
$ 54,667,350
373,550
1,102,903
28, !30
851 137
235,660
39 918
284,967
37,192
467,237
3 420 694
10,033,920
83, 119,530
$ 93,153,450
17 CITY OF HUGHSON
Balance Sheet
Governmental Funds
June 30, 2021
Special Revenue
Assets:

Cash and Investinents
Accounts Receivable
Loans Receivable
Due from Other Funds
Total Assets
General Home Loan
4 ,645,287 $
398,635
289,947
5,333,869 $
75,043 $
1,025,349
1,100,392 $
Liabilities, Deferred Inflows and Fund Balances:

Liabilities:

Accounts Payable
Deposit Payable
Due to Other Funds
Total Liabilities
293,803 $
324,726
618,529
Deferred Inflows of Resources::

Unearned revenue - loans
Total Deferred Inflows of Resources
Total Liabilities and Deferred Inflows of Resources 618,529 Fund Balances:

Restricted for:

Home loans
Parks and recreation
Public Facilities
Public safety
Streets and roads
1,100,392
Community developi'nent
IT Projects
District Assessments
Unassigned 4,715,340
TotalFundBalances 4,715,340 1,100,392
Total Liabilities and Fund Balances $ 5,333,869 $ 1,100,392 $ The notes to the financial statements are an integral part of this stateinent.

Refuse
103,190
25,244
128,434
50,206
50,206
50,206
78,228
78,228
128,434
18 Capital Projects
Public
Facilities
$ 1,843,287 $
$ 1,843,287 $
Nonmajor
Governmental
Funds
Total
Governmental
Funds
5,113,907 $
1,108,459
145,000
6,367,366 $
11,780,714
1,532,338
1,170,349
2 89,947
14,773,348
440 $
440
20,023 $
288,733
308,756
364,472
324,726
288,733
977,931
440
904,854
904,854
1,213,610
904,854
904,854
1,882,785
1,842,847
1,842,847
$ 1,843,287 $
1,205,395
546,885
2,l76,447
886,290
106,475
526,967
(294,703)
5,153,756
6,367,366 $
1,100,392
1,205,395
1,842,847
546,885
2,176,447
964,518
106,475
526,967
4,420,637
12,890,563
14,773,348
19 This page left intentionally blank
20 CITY OF HUGHSON
Reconciliation of the Governmental Funds Balance Sheet
to the Statement of Net Position
June 30, 202l
Total fund balances - governmental fiinds $ !2.890.563
In governinental funds. only current assets are reported. In the stateinent of net position, all assets are reported, including capital assets and accumtilated depreciation.

Capital assets at historical cost
Accumulated depreciation
35,488,422
(9,441,841) 26,046,58l
Deferred outflows and inflows of resources relating to pensions: In governmental funds, deferred outflows and inflows of resources relating to pensions are not reported because they are applicable to future periods. In the statement of net position, deferred outflows and inflows or resources relating to pei'isions are reported.

Deferred outflow related to pension
Deferred inflow related to pension
350,796
(60,716)
In governmental funds, certain receivables are not available to pay for current period expenditures and, therefore, are offset by deferred inflows of resources. 904,854 In governmental funds, only current liabilities are reported. In tlie statement of net position, all liabilities, including long-term liabilities, are reported. Long-term liabilities relating to governmental activities Net pension liability
Coinpensated absences payable
(1,882,844)
(41,615)
Internal service funds are used by inanagement to cliarge tlie costs of certain activities, sucli as self-insurance, to individual funds. The assets and liabilities of the internal service fund i'iiust be added to tlie stateinent or net position. 73.303 In governinental funds, certain accrued interest receivable on notes receivable is not available to pay for current period expenditures and, therefore. is not reported in the governmental f'unds. 205, 178 Total net position - governmental activities $ 38,486,100 The notes to tlie financial statements are an integral part of this statement. 21 CITY OF IIUGHSON
Statement of Revenues, Expenditures, and Changes in Fund Balance Governmental Funds
For the Fiscal Year Ended June 30, 2021
Special Revenue
Revenues
Property Taxes
Sales and Use Ta.yes
Business License Taxes
Other Taxes
Licenses and Permits
Fines and Forfeitures
Interest
Charges for Services
Intergovernmental
Special Assessments
Other
Total Revenues
General F[ome Loan
373,550

1.{02,903
28, i30
il3,9i9
235,660
39,918
5,116
164,220
737,218
466,256
3,266,890
Refuse
148
566,432
566,580
Expenditures
Current:

General Government
Public Safety
Public Works
Parks and Recreation
Capital Outlay
Total Expenditures
Excess (Deficiency) of Revenues over
(under) Expenditures
Other Financing Sources (Uses):

Transfers In
Transfers Out
Total Other Financing Sources (Uses)
Net Cliange in Fund Balances
Fund Balances - July 1, 2020
Fund Balances - June 30, 2021
965, 185
1,371,563
2 68,682
98,455
2,703,885
563,005
101,312
(12,500)
88,812
651,817
4,063,523 1,100,392
4,715,340 $ 1,100,392 $
560,904
560,904
5,676
5,676
72,552
78,228
Tlie notes to the financial statements are an integral part of this statement. 22 Capital Pro.jects
Public
Facilities
1,924
421,602
423,526
Nonmajor
Governmental
Funds

4.417
481,995
947,725
284,967
981
1,720,085
Total
Governmental
Funds
373,550
1102,903
28,130
113,919
235,660
39,918
11,605
i,634,249
1,684,943
2 84,967
461237
5,977,081
23,483
23,483
9,910
253,665
4,277
59,370
327,222
988.668
1,38 1,473
1,083,251
102,732
59,370
3,615,494
400.043 1,392,863 2,361,587
400.043
1,442,804
$ 1,842,847 $
10,000
(93,692)
(83,692)

1.309,171
3,844,585
5,153,756 $
111,312
(106,192)
5,120
2,366,707
10,523,856
12,890,563
This page left intentionally blank
24 CITY OF HUGHSON
Reconciliation of tlie Statement of Revenues, Expenditures, and Clianges in Fund Balances of Governmental Funds to the Statement of Activities For the Fiscal Year Ended June 30, 2021
Amounts reported for governmental activities in tlie stateinent of activities are different because:

Net change in fund balances - total governmental funds 2,366,707 Governmental funds report capital outlays as expenditures. However, in the statement of activities, the costs of those capital assets are allocated over their estimated useful lives as depreciation expense. This is the amount by whicl'i depreciation exceeded capital outlay in the current period.

Capital outlay
Depreciation expense
57,290
(599,888) (542,598)
In goveriirnental funds, certain receivables are not available to pay for current period expenditures and, therefore, are offset by deferred inflows of resources. This is tlie net cliange in deferred inflows. 904,854 Coinpensated absence expenditures reported in tlie statement of activities do not require the use of current financial resources and therefore, are not reported as expenditures in a governmental fund. This is the net change in compensated absences for tlie current period. (7,528)
In governmental funds, pension costs are recognized when employer contributions are made. {n the statement of activities, pension costs are recognized on the accrual basis. This fiscal year, tlie difference between accrual5asis pension costs and actual einployer contributions was:
014,150)
Change in net position of governmental activities 2,637,285 The notes to the financial statements are an integral part of this statement. 25 ASSeU
Current Assets:

Cash and Investments
Accounts Receivable
Total Current AssetS
Noncurrent Assets:

Capital Assets:

Land
Buildings
Macliinery and Equipment
linprovements Otlier Tlian Buildings
[nfrastructure
Construction In Progress
Less:

Accumulated Depreciation
Total Noncurrent Assets
Deferred Outflow of Resources:

Pension related
Total Deferred Outflow of Resources
Total Assets and Deferred Outflows of Resources
Liabilities
Current Liabilities:

Accounts Payable
Interest Payable
Due to Other Funds
Deposits Payable
Total Current Liabilities
Noncurrent Liabilities:

Compensated Absei'ices
Net Pension Liability
Due witliin Oi'ie Year
Due in More Than One Year
Total Noncurrent Liabilities
Deferred Inflows of Resources:

Pension related
Total Deferred {nflows of Resources
Total Liabilities and Deferred mflows of Resources
Net Position
Net [nvestment in Capital Assets
Unrestricted
Total Net Position

CITY OF HUGHSON
Statement of Net Position
Proprietary Funds
June 30, 2021
Sewer
Fuim
Business-type Activities-Enterprise Funds
Nomnajor
Water Eiiterprise
Fuim Fuiids Total
Governmentiil
Activities
Internal
Service
Fund
$ 7,592,187
95,853
7,688,040
15,075,537
25,215,708
478,666
l 14,514
12,900,415
(13,912,323)
39,872,517
171,857
173,857
47,73 4,414
60,680
57,589
118,269
28,986
933, 152
499,462
10,182,918
11,644,518
30,091
30,091
11,792,878
29,205,137
6,736,399
$ 15,941,536
$ 6,230,896 $
81,625
6,312,521
2,928, 159
2,127,666
93,951
4,174,181
6,102,509
5,637,099
(6,881,288)
14, 182,277
124,839
124,839
20,619,637
647,028
il,473
658,501
29,070
670,054
162,808
643,681
1,505,613
21,607
21,607
2,185,721
13,390,788
5,043, 128
$ 18,433,916
12,215 $
1,199
14,613
13,835,298
178,677
14,015,174
73,303
73,103
105,073
725,283
18, 108,769
28,068,657
572,617
4,288,695
19,002,924
5,637,099
(543,962)
286,394
(21,337,573)
54,341, 188
298,696
298,696
301,007 68,655,058 73,303
1,349
1,214
5,347
7,910
709,057
69,062
1,214
5,347
784,680
58,056
1,603,206
662,270
10,826,599
13, 150,131
51,698
51,698
7,910 13,986,509
286,394
5,504
291,898
42,882,319
11,785,031
$ 54,667,350 $
73,303
73,303
Tlie notes to the financial statements are aii integral part of this statement. 26 CITY OF HUGHSON
Statement of Revenues, Expenses, and Changes in Net Position Proprietary Funds
For the Fiscal Year Ended June 30, 2021
Operating Revenues:

Charges for Services
Total Operating Revenues
Operating Expenses:

Personnel
Administrative
Materials and Supplies
Maintenance
Depreciation
Total Operating Expenses
Operating Income (loss)
Business-type Activities - Enterprise funds
Nonmajor
Sewer Water Enterprise
Fund Fund Funds Total
Governmental
Activities
Internal
Service
Fund
$ 3,398,418 $
3,398,418
470,077
238,000
700,952
82,275
1,032,760
2,524,064
874,354
2,391,762 $
2t39 1,762
299,271
164,000
422,881
54,304
200,706
1,141,162
1,250,600
18,677 $
18,677
9,107
5,031
24, 176
38,314
(19,637)
5,808,857 $
5,808,857
769,348
411,107
1,1231833
141,610
1,257,642
3,703,540
2,105,317
Non-operating Revenues (Expenses):

Interest Revenue
Interest Expense
intergovernmental Revenue
Total Non-Operating Revenue (Expenses)
{ncome (Loss) before transfers
Transfers
Transfers [n
Transfers Out
Total Transfers
Change in Net Position
Net Position - Beginning of Fiscal Year
Net Position - End of Fiscal Year
21,456
(84,76i)
(63,305)
811,049
4,131
(30,282)
5,385,894
5,359,743
6,610,3 43
4,015,261 185,484
(4,015,261) (190,484)
(5,000)
811,049 6,605,343
35,130,487 11,828,573
$ 35,941,536 $ 18,433,916 $
25,587
(115,043)
5,385,894
5,296,438
(19,637) 7,401,755
7,500 4,208,245
(7,620) (4,213,365)
(120) (5,120)
(19,757) 7,396,635
311,655 47,270,715
291,898 $ 54,667,350 $
73,303
73,303
The notes to the financial statements are an integral part of this statement. 27 CASH FLOWS FROM OPERATING ACTMTIES
Casli Received from Users
Casli Payinents to Suppliers and Coimactors
Cash Payments to Employees
Net Cash Provided (Used) By Operating Activities
CASH FLOWS FROM NONC APIT AL FINANCrNG ACTMTIES
Transi'ers In
Transfers Out
Interfund Borrowing
Net Casli Provided (Used) By Noncapital Financing Activities CASH FLOWS FROM [NVESTING ACTiV[TIES
Interest Received
Net Casli Provided (Used) in Investing Activities

C ASH FLOWS FROM CAPIT AL AND RELATED FINANCING
ACTMTIES.

Acquisition of Property, Plant, and Equipment
Principal Payments on Debt Borrowings
[merest Paid
Net Casli Provided (Used) In Capital and Related
Financing Activities
NET INCREASE (DECREASE) rN CASH AND CASH

EQUIV ALENTS
CASH AND CASH EQUIVALENTS, BEGINNrNG OF FISCAL YEAR

CASI-I AND CASH EQUIV ALENTS, END OF FISCAL YEAR
Reconciliation to Stateinent of' Net Position:

Cash and Investments
CITY OF HUGltSON

STATEMENT OF CASH FLOWS

PROPRIET ARY FUNDS
For llie Fiscal Year Ended Jrine IO, 2021
Sewer
Fund
Business-typeActivities- Enter1iriseFunds
Nonmiijor
Water Enferprise
Fund Funds Totals
Goverimiental
Activities
Internal Service
Fund
s 1,377,007 $
(I ,021,533)
(428,372)
I ,927, 192
4,015,261
(4,015,261 )
21,456
21,456
(3,801,337)
(84,760)
(3,886,097)
2,355,871 $ 18,978 $ 5,751,946 $
(145,553) (14,738) (1,181,824)
(269,324) (697,696)
1,940,994 4,240 3,872,426
185,484
(190,484)
(5,000)
7,500 4,208,245
(7,620) (4,213,365)
(561) (561)
(681 ) (5,681)
4,131
4,131
25,587
25,587
(2,395,467 )
(142,908)
(30,846)
(2,395,467)
(3,944,245)
(115,606)
2,816,673 (i,069,424)
(1,937,449) 4,756,798 3,559 2,822,')08
9,529,636 1,474,098 8,656 11,012,390
$ 7,592,187 $ 6,230,896 $ 12,215 $ 13,835,298 $
73,301
73,303
7,592,187 $
7,592,1,87 S
6,230,896 $ 12,215 $ 13,835,298 $
6,230,896 S 12,215 $ 13,835,298 $
73,303
73,303
CASH FLOWS FROM OPERATING ACTiVlTIES
Operating Incoine (Loss)
Adjustment to Reconcile Operating {ncome
(Loss) to Net Cash Provided (Used) by Operaiing
Activtties:

Depreciation
Clianges in Assets and Liabilities
(Increase) Decrease in Accounts Receivable
Increase (Decrease) in Accounts Payable
Increase (Decrease) in Net Pension Liability
Increase (Decrease) in Deposits Payable
Total Adjustments
Nei Casli Provided (Used) By Operating Activities
$ 874,354 $ 1,250,600 $ j2q,) S 2,105,317 $
I ,032,760
(21,321)
(306)
41 ,705
200,706
(35,891 )
495,632
29,947
1,052,838 690,394
$ 1,927,192 s 1,940,994
24, 176
(699)
(600)
1,000
2 3,877
$ 4,240 $
1,257,642
(57,911)
494,726
71 ,652
1,000
1,767,109
3,872,426 $
Tlie notes to tlie (inancial statements are an integral part of this statement 28 FIDUCIARY FUNDS
Agency Funds and Private Purpose Trust Funds are used to account for the receipt and disbursement of various taxes, deposits, deductions, and property collected by the City, acting in the capacity of an agent for distribution to other governmental units or other organizations. The private purpose trust fund maintained by the City is presented below.

RDA Successor Agency - Tliis fund accounts for the former redevelopment agency.

This page left intentionally blank
30 CITY OF HUGHSON

FIDUCIARY FUND

ST ATEIVIENT OF NET POSITION
June 30, 2021
ASSETS
Cash and investments
Loans receivable
Capital assets, net of accumulated depreciation
Total Assets
LI ABtLJTIES
Accounts payable
Interest payable
Long-tei-m debt, due within one year
Long-tenn debt, due in more than one year
Total Liabilities

NET POSITION
Held in trust for others
Total Net Position
Private Purpose
Trust Fund
RDA
Successor
Agency
422,869
70,000
519,987
1,012,856
1,893
2 1,738
102,628
2,039,419
2,165,678
(1,152,822)
(l , 152,822)
The notes to tlie financial statements are an integral part of this statement. 31 CiTY OF HUGHSON

FIDUCI ARY FUND
ST ATEMENT OF CH ANGES [N NET POSiTiON
For the Fiscal Year Ended June 30, 2021
Additions:

Intergoverninental
Interest
Total additions
Deductions:

Community Development
Depreciation
Interest Expense
Contribution to City
Total deductions
Change in net position
Net Position - July 1, 2020
Net Position - June 30, 2021
Private Purpose
Trust Fund
RDA
Successor
Agency
319,666
820
320,486
10,250
27,490
83,771
96,000
217,511
102,975
(1,255,797)
(1,152,822)
Tlie notes to the financial statements are an integral part of this statement. 32 NOTES TO BASIC FINANCIAL ST ATEMENTS

CITY OF HUGHSON

NOTES TO BASIC FINANCIAL ST ATEMENTS
June 30, 2021
NOTE l- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity
Tlie City of Huglison (City) was incorporated ii'i Decei'nber 1972. Tlie City is a general law city operating under tlie Council-Manager form of govemment, witli a five ineinber City Council elected for four-year overlapping teri'ns. The City Manager is appointed by tlie City Council to serve as adininistrator of tlie staff ai'id to carry out tlie Council's policies.

As required by accounting principles generally accepted in tlie United States of America (USGAAP), tliese basic financial stateinents present tlie City of Hughson (tlie primary government) and any component units.

Individual Coinponent Unit Disclosures
Tliere are no entities wliich ineet tl'ie Governmental Accounting Standards Board (GASB) Stateinent No.l4 as amended by GASB Statement No.39, GASB Statement No. 61, and GASB Stateinent No. 80 criteria for disclosure witliin these financial statements.

B. Basis of Presentation
Governinent-wide Financial Stateinents
The stateinent of net position and statei'nent of activities display infori'nation about tlie priinary government (tlie City). Tliese statements include tlie financial activities of tlie overall governinent, except for fiduciary activities. Eliminations ltave been tnade to ininimize tlie double counting of internal activities. Tl'iese statei'nents distinguisli between tl'ie governmental and business-type activities of tlie City. Governmental activities, wliicli norinally are supported by taxes and ii'itergovernmental revenues, are reported separately from business-type activities, wl'iich rely, to a significant extent, on fees cliarged to external parties.

Tlie stateinent of activities presents a comparison between direct expenses and prograi'n revenues for each segment of tl'ie business-type activities of tlie City and for eacli function of tlie City's governmental activities. Direct expenses are tliose tliat are specifically associated with a program or function and; therefore, are clearly identifiable to a particular function. Program revenues include l) charges paid by tlie recipients of goods or services offered by tlie programs and 2) grants and coi'itributions that are restricted to i'neeting tlie operational or capital requirements of a particular prograin. Revenues tliat are not classified as program revenues, including all taxes, are presented instead as general revemies.

When both restricted and unrestricted net positions are available, unrestricted resources are used only after the restricted resources are depleted.
33 CITY OF HUGHSON

NOTES TO BASIC FINANCIAL ST ATEMENTS
June 30, 2021
NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) B. Basis of Presentation (Continued)
Fui'id Financial Stateinents
Tlie fund financial statements provide inforination about the City's funds, including fiduciary fitnds.

Separate statei'nents for each fund category - governmental, proprietaiy, and fiduciary - are presei'ited. Tlie empliasis of fund financial stateinents is on inajor governi'nental ai'id enterprise fiunds; eacli displayed in a separate column. All reinaining governmental and enterprise funds are separately aggregated and reported as noninajor funds.

Proprietary funds distinguish operating revenues, such as cliarges for services, and result frotn excliange transactions associated witli tlie principal activity of tlie fund. Exchange transactions are tliose in wliich eacli party receives and gives up essei'itially equal values. Nonoperating revenues, such as subsidies and iiwestinent earnings, result fi'om nonexcliange transactions or ancillary activities.

Tlie City reports four inajor goveri'imental funds:

Tlie General Fund is used to account for all revenues and expenditures i'iecessary to carry out basic governmental activities of tl'ie City tliat are not accounted for tlirougli other funds. For the City, tl'ie General Fund includes activities sucli as pub)ic protection, public works and facilities, parks and recreation, and comi'nunity developi'nent.

Tlie Home Loan Special Revenue Fund was establislied to account for all proceeds of grant revenues froi'n tlie federal governinent under the First Tiine Home Buyer federal grant program and froi'n the State of California's CalHoine grant prograin. Tlie expenditures relate to paytnents inade to eligible recipients for buying lioi'nes subject to fulfillment of conditions.

The Refitse SpecialRevenue Fund was establislied to account for inonies collected on behalfofa frai'ichise garbage collection company.

T]ie Public Facilities Capital Projects Fund was established to account for all proceeds from traffic mitigation fees, wliose purpose is to defray tlie actual costs of constructing improvements to mitigate traffic and circulation ii'npacts resulting froin proposed new developtnent.

Tlie City reports tlie following two i'najor enterprise funds:

The Sewer Fund was established to account for the financial activity for tlie purpose ofoperation and maintenance of the City's sewer systein including the wastewater treati'nent plant. Tlie costs of providing these services to the general public are financed or recovered tlirough user cliarges.

Tlie Water F und was established to account for the financial activity for the purpose ofoperation and maintenance of City's water utility. The costs of providing tliese services to the general public are financed or recovered througli user cliarges. 34 CITY OF HUGHSON

NOTES TO BASIC FINANCIAL ST ATEMENTS
June 30, 2021
NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) B. Basis of Presentation (Continued)
Tlie City repoits tl'ie following additional fund types:

Internal Sersiice Fund account for operations tliat provide services to otlier depaitments or agencies of tlie City, or to otlier governinents, on a cost-reiinbursement basis for insurance.

Fiduciary Funds
Prisiate Puipose Trust Fymd accounts for tlie operations of tlie fori'ner redevelopment agency.

C. Basis of Accounting and Measurement Focus
The governinei'it-wide, proprietary, and fiduciary funds financial statements exceptforAgency Funds (that liave no measurement focus) are reported using tlie econoinic resources measurement focus and tlie accrual basis of accounting. Revei'iues are recorded when earned and expenses are recorded at tlie tii'ne the liabilities are incurred, regardless of wlien tlie related casli flows take place. Nonexcliange transactions, in whicl'i tlie City gives (or receives) value witliout directly receiving (or giving) equal value in exchange, include propeity and sales taxes, grants, entitlements and donations. On tlie accrual basis, revenue from property taxes is recognized in tlie fiscal year for wl'iicli tlie taxes are levied. Revenues from sales tax are recognized wlien the underlying transactioi'is take place.

Revenues from grants, entitleinents, and donations are recognized in the fiscal year in wliicli all eligible requirements liave been satisfied.

Governmental funds are reported using tlie current financial resources i'neasureinent focus and tlie inodifiedaccrualbasisofaccounting. Underthisi'netliod,revenuesarerecognizedwl'iensusceptible to accrual (i.e., wlien tliey are "ineasurable and available"). "Measurable" means the amount of tlie transaction can be deterinined and "available" ineans collectible within tlie current period or soon enough tliereafter to pay liabilities of the current period. Tlie City considers all revenues available if they are collected witliin 60 days after fiscal year-end. Expenditures are recorded wlien tlie related fund liability is incurred, except for debt service expenditures which are recognized when due, and certain compensated absences and claims and judginents wliich are recognized wl'ien tl'ie obligations are expected to be liquidated with expendable available financial resources. Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds from long-term debt and capital leases are reported as otlier financing sources.

Property taxes, transient occupancy taxes, and ii'iterest are susceptible to accrual. Sales taxes collected and held by the state at fiscal year-end on behalf ofthe City are also recognized as revenue.

Other receipts and taxes become measurable and available when casl'i is received by the City and are recognized as revenue at that time.

Entitlements and sliared revenues are recorded at the time of receipt or earlier if the susceptible to accrual criteria are met. Expenditure-driven grants are recognized as revenue wlien tlie qualifying expenditures have been incurred and all other grant requiremei'its have been i'net. 35 CITY OF HUGHSON

NOTES TO BASIC FINANCIAL ST ATEMENTS
June 30, 2021
NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities, and Equity

1. Deposits and Investments
{n order to maxii'nize tlie flexibility ofits investinent program and to aid in cash budgeting, tlie City pools the casli of all funds, except for monies deposited with fiscal agents in accordance witli related bond indentures. Tlie casli and investinents balance in eacli fund represents tl'iat fund's equity sliare of tlie City's cash and investment pool. As tlie City places no restrictions on tlie deposit or witl'idrawal of a particular fund's equity in tlie pool, tlie pool operates like a demand deposit account for tlie paiticipating fiinds.

Interest income earned on pooled casli and investirients is allocated montlily to tl'ie various funds based on i'nontli-end balances and is adjusted at fiscal year-end. Interest incoine on restricted casl'i and investirients witli fiscal agents is credited directly to tl'ie related fui'id.

In accordance with tlie State of California Goveri'iment Code, tlie City adopts an investi'nent policy ai'inually that, among otlier things, autliorizes types and concentrations of investments and maximum investment teri'ns.

The City's ii'ivestments are carried at fair value. Tlie fair value of equity and debt securities is deterinined based on sales prices or bid-and-asked quotations from SEC-registered securities excliangesorNASDAQdealers. LAIFdeterminesthefairvalueofitsportfolioquaiterlyandreports a factor to the City; tlie City applies tliat factor to convert its sliare of LAIF from amortized cost to fair value. Clianges in fair value are allocated to eacli participating fund.

For purposes of tlie statement of cash flows, tlie City has defined casli and casli equivalents to be c)iange and petty casli funds, equity in tl'ie City's cash and investment pool, and restricted non-pooled investments witl'i initial inaturities of three montlis or less.

Investments are stated at fair value in accordance witli GASB Staten'ient No.31, Accounting and Financial Reportin5,for Certain Investinents and for External Imestinent Pools. Short-term investmentsarereportedatcost,whicliapproximatesfairvalue. Thefairvaluesarebasedoi'iquoted inarket prices, if available, or estimated using quoted i'narket prices for siinilar securities. Securities traded on national or international exclianges are valued at tlie last reported sales price at current exchange rates. Interest, dividends, and reaiized and unrealized gains and losses, based on tlie specific identification i'nethod, are included in interest revenue wl'ien earned.

2. Receivables and Payables
Trai'isactions between funds tliat are representative of lending/borrowing arrangei'nents outstanding at the end of tlie fiscal year are referred to as "due to/from otlier funds." Any residual balances outstanding between tlie governmental activities and business-type activities are reported in tlie governinent-wide financial statements as"internal balances." Advances between fiinds, as reported in the fund financial statements, are offset by a fund balance reserve account in applicable governmental funds to indicate tliat tliey are i'iot available for appropriation and are not expendable available financial resources.
36 CITY OF HUGHSON

NOTES TO BASIC FINANCIAL ST ATEMENTS
June 30, 2021
NOTE l- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities, and Equity (Continued)

2. Receivables and Payables (Continued)
Tlie City's propeity taxes are levied on tlie first day of Januaiy by tlie County assessor, and are payable to tlie County tax collector in two installtrients. Tlie first installment is due November l"', and is delinquent after December I O"'; tlie second installinent is due Februaiy l" and is delinquent after April 10"'. Taxes become a lien on tlie property on January l"', and on tlie date oftlie transfer ofthe title, and tlie date ofnew construction. Article 13A ofthe CaliforniaConstitittion states: "The inaximum ai'nount of any ad valorem tax on real property shall not exceed one percent (1%) of tlie full casli value of sucli property. TheonepercenttaxistobecollectedbytlieCountiesandapportionedaccordingtolawtothe districts witliin the coui'ities." Tlie City lias elected under State law (TEETER) to receive all of tlie annual property assessments in tliree ii'istallinents as follows: 55% in December, 40% in April and 5% in June.

3. Inventories and Prepaid Items
Ii'iventoriesarevaluedatcostusingtl'iefirst-in/first-out(FIFO)i'netliod. Tliecostsofgoverni'nental fund-type inventories are recorded as expenditures wlien consumed ratlier tlian wlien purchased.

Certain payinents to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items.

4. Capital ASSetS
Capital assets, which include property, plant, equipinent and infrastructure assets, are reported in tl'ie applicable governinental or business-type activities coluinns in tlie goveriunent-wide financial stateinents. As a pl'iase 3 government under GASB Statei'nent 34, the City has elected to restate its capital assets as of July 1, 2008, to report infrastructure assets acquired prior to June 30, 2003. The City has determined tliat it is preferable to report all City infrastructure to provide for iriore accurate reporting. Such ASSETSare recorded at liistorical cost or estimated liistorical cost if purchased or constructed. Donated assets are valued at tlie fair value of the assets on the date on which tl'iey were contributed. Tlie costs of normal maintenance and repairs tliat do not add to the value of tlie asset or materially extend tlie ASSETS'lives are not capitalized. Tlie City utilizes a capitalization thresliold of $5,000.

Depreciation is charged to operations using tlie straight-line method over the estitnated useful lives of the assets as follows:

Buildings and iinprovements
Vehicles
Macliinery and equipment
Infrastructure

5. Compens'ated Absences
30 years
5 years
5 to 15 years
50 to 80 years
Depending upon lengtli of employment, City employees earn vacation leave, sick leave, accrued holiday and compensated time which may be either used or accumulated until paid upon termination or retirement. Upon termination, tlie City is obligated to compensate employees for all earned but unused vacation days. Unused sick leave may be accui'nulated to 125 days. The earned but unused sick leave benefits are not payable in the event of employee termination but 25% of the unused accumulated sick leave is paid upon retirement of employees with more than twenty years of continued service.
37 CITY OF HUGHSON

NOTES TO BASIC FINANCIAL ST ATEMENTS
June 30, 2021
NOTE l- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, Liabilities, and Equity (Continued)

5. Compensated Absences (Continued)
A liability is accrued for all earned but unused leave benefits in tlie governinent-wide and enterprise fund statements. Tliis liability will be liquidated as eitlier additional casli payi'nents in tlie event of employee teri'nination or as pait of budgeted salary expenditures if used by einployees as compensated leave tiine wliile still ei'nployed by tlie City. In the fund financial statements governi'nental funds accrue currei'it liabilities for material vacation leave benefits due on demand to goveriu'nental fui'id einployees that have ten'ninated prior to fiscal year-end. Non-current ainounts will be recorded as fund expenditures in tlie year in whicli tliey are paid or become due on detnand to terininated ei'nployees.

6. Long-term Obligations
Jn tlie governinent-wide financial statements, ai'id proprietary fund types in tlie fund financial statements, long-terin debt and other long-terin obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statei'nents of net position.

Debt preiniui'ns and discounts are deferred and airiortized over the life of the indebtedness using the straight line i'nethod. Notes payable are reported net of tlie applicable bond preiniutn or discount.

In tlie fund financial statements, governmental fui'id types recognize debt prei'niuins and discounts during tlie current period. Tlie face amount of debt issued is reported as otlier financing sources.

Prei'niuiris received on debt issuai'ices are repoited as other financing sources wliile discounts on debt issuances are reported as otl'ier financing uses. Issuance costs, whether or not withlield from tlie actual debt proceeds received, are reported as debt service expenditures.

GASB Statei'nent No. 88 defines debt for purposes of disclosure in notes to financial statements as a liability tliat arises from a contractual obligation to pay casl'i (or otlier assets tliat may be used in lieu of casl'i) in one or i'nore paymei'its to settle an amount that is fixed at tlie date tlie contractual obligation is establislied. Additioi'ial essential inforination related to debt required to be disclosed includes unused lines of credit; assets pledged as collateral for the debt; and terms specified in debt agreei'nents related to significant events of default witl'i finance-related consequences, significai'it termination events with finance-related consequences, and significant subjective acceleration clauses.

Note 7 provides separate disclosure of the required information for direct borrowings and direct placei'nents of debt.

7. Net Position
Tlie government-wide financial statements utilize a net position presentation. Net position is categorized as net investmei'it in capital assets, restricted, and unrestricted.

Net Investment In Capital Assets - Tliis category groups all capital assets, including infrastructure, into one component of net position. Accumulated depreciation and tl'ie outstanding balances of debt tliat are attributable to tlie acquisition, construction, or improvement of these ASSETSreduce the balance in tliis category.

RestrictedNetPosition -This category presents external restrictions imposed by creditors, grantors, contributors, or laws or regulations of other governinents and restrictions imposed by law tlirough constitutioi'ial provisions or enabling legislation.
38 CITY OF HUGHSON

NOTES TO BASIC FINANCIAL ST ATEMENTS
June 30, 2021
NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued D. Assetsi Liabilities+ and Equity (Continued)

7. Net Position (Continued)
Unrestricted Net Position - Tliis category represents net position of the City, not restricted for any project or otl'ier purpose.

Wlten an expense is incurred for purposes for wliich botli restricted and unrestricted resources are available, the City's policy is to apply restricted resources first.

E. Use of Estimates
Tbe preparation of financial statements in conforinity witl'i accounting principles generally accepted in the United States of America requires management to make estimates and assumptions tliat affect tlie reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dateofthefinancialstatements. Estimatesalsoaffecttliereportedainountsofrevenuesandexpenses during tl'ie reporting period. Actual results could differ froin those estimates.

F. Fund Balance
In tl'ie fund financial statements, governinental funds report fund balance as nonspendable, restricted, coinmitted, assigned, or unassigned based prii'narily on the extent to which the City is bound to lionor constraints on liow specific amounts can be spent.

Nonspendable fund balance - amounts tliat cani'iot be spent because tliey are either (a) not spendable in fori'n or (b) legally or contractually required to be maintained intact.

Restricted fund balance - amounts with constraints placed on their use tbat are either (a) externally iinposed by creditors, grai'itors, contributors, or laws or regulatioi'is of other governi'nents; or (b) iinposed by law througli constitutional provisions or enabling legislation.

Committed fund balance - amounts tliat can only be used for specific purposes determined by forinal action of tlie City's liigliest level of decision-making autl'iority (tlie City Council) and tliat remain binding unless removed in tlie same manner. The underlying action that imposed tlie limitation needs to occur no later tlian the close of tlie reporting period.

Assigned fund balance - ai'nounts tliat are constrained by the City's intent to be used for specific purposes. Tlie intent can be established at eitlier the highest level of decision making, or by a body or an official designated for that purpose.

Unassigned fund balance - the residual classification for the City's funds that include amounts not contained in the other classifications.

The City Council establishes, inodifies or rescinds fund balance commitments and assignments by passage of an ordinance or resolution.
39 CITY OF HUGHSON

NOTES TO BASIC FINANCIAL ST ATEMENTS
June 30, 2021
NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) G. Future Accounting Pronouncements
GASB Statements listed below will be implemented in fuhire financial statements.

Statei'nent No. 87 "Leases"
Statement No. 89 "Accountiiig for Interest Cost
iiicurred before tlie End of a
Constniction Period"
Statement No. 91 "Conduit Debt Obligations"
Statement No. 92 "Oinnibus 2020"
Stateirient No. 93 "Replacement of Interbank Offered
Rates"
Statement No. 94 "Public-Private and Public-Public
Partnerships and Availability
Payment Arrangements"
Statement No. 96 "Subscription-Based Information
Technology An'angements"
Statement No. 97 "Certain Component Unit Criteria,
and Accounting and Financial Reporting
for Internal Revenue Code Section 457
Deferred Compensation Plans"
Tl'ie provisions of tliis statement are
effective for fiscal years begiiming
after June 15, 2021.

The provisions of this statement are
effective for fiscal years beg'nniiig
after December 15, 2020.

The provisions of this statement are
effective for fiscal years beginning
after December 15, 2021.

The provisions of tliis statement are
effective for fiscal years beg'nning
after June 15, 2021.

The provisions of this statement are
effective for fiscal years beg'nning
after December 31, 2021.

The provisions of this statement are
effective for fiscal years beg'nning
after June 15, 2022.

The provisions of this statement are
effective for fiscal years beginning
after June 15, 202].

NOTE 2 - STEWARDPAGESHIP, COMPLIANCE, AND ACCOUNT ABILITY A. Budgetary Information
The City Council adopts an Annual Budget no later than the second meeting of June of each year for the fiscal year commencing the following July 1. The City follows these procedures in establishing the budgetary data reflected in the financial statements:

1. During May of each fiscal year, the City Manager submits to the City Council a proposed operating budget for the next following fiscal year. The operating budget includes proposed revenues and expenditures.

2. After a review by tlie City Council, a public hearing is conducted and further comment is received from the City Council and the general public.

3. Upon completion of the hearings and modifications, if any, to tlie proposed budget, it is adopted by the City Council through passage of an appropriate resolution. 40 CITY OF HUGHSON

NOTES TO BASIC FINANCIAL ST ATEMENTS
June 30, 2021
NOTE 2 - STEWARDSHIP, COMPLIANCE, AND ACCOUNT ABILITY (CONTINUED) A. Budgetary Information (Continued)

4. Generally, tlie budget is amended in tlie i'niddle of tlie year and at tlie end of the fiscal year. All approved additional appropriations are added to tlie adopted budget and an amended budget is presented to tlie City Council, wliicli adopts it after due review.

5. Tlie City Manager is autliorized to make transfers between operational expenditure categories witliin certain departments and funds.

6. City Council approval is required for all fund to fund transfers, department to department transfers, fund reserve to appropriations transfers, transfers for new revenue sources witli offsetting appropriations, and for transfer to/from tlie capital expenditure category.

B. Budget/USGAAP Reconciliation
No funds adopted project-lengt)i or budgetary basis budgets and, tlierefore, no schedule reconciling tlie ainounts on tlie Combined Stateinent of Revenues, Expenditures, and Clianges in Fund BalanceBudget to Actual to tlie ainounts on tlie Coi'nbined Statement of Revenues, Expenditures, and Cl'ianges in Fund Balances has been prepared.

C. Excess of Expenditures over Appropriations
For tlie fiscal year ended June 30, 2021, tlie following fui'ids liad an excess of expenditures over appropriations.

Fund
Nonmajor Govemmental Funds :

Community Enhancement
Storm Drain
Municipal Park
Parks Development Impact Fees
Final
Budget
Actual
Amount
2,139 $
2,139
2,139
2,138
Evces s
2,U9

2.139
2,139
2,138
Tl'ie Hoi'ne Loan, Asset Forfeiture, CDBG Grants, Public Safety Augi'nentation, CFD and Covid Recovery funds did not adopt a budget.

D. Deficit Fund Equity
At June 30, 2021, the following funds had an accumulated deficit:

Fund
Nonmajor Governmental Fund:

Transportation Capital Projects Fund
Nonmajor Proprietary Fund:

USF Community Center Fund
Private Purpose Trust Fund:

RDA Successor Agency
Amount
$ 294,703
274
1,152,822
41 CITY OF HUGHSON

NOTES TO BASIC FINANCIAL ST ATEMENTS
June 30, 2021
NOTE 3 - CASH AND INVESTMENTS
Casli ai'id investinents as of June 30, 2021 are classified in tlie accompanying financial statements as follows:

Statement of net position:

Cash and investments
Fiduciai'y funds:

Cash and investments
Total cash and investments
25,689,315
422,869
26,112,184
Casli and investmei'its as of June 30, 2021 consist of tlie following:

Casli on hand
Deposits with financial institutions
Investments
Total cash and investments
450
631,625
25,480,109
26, 112, 184
A. Investments Autl'iorized by tlie California Government Code and tl'ie City's Iiwestinent Tlie table below idei'itifies tlie investment types tliat are autliorized for the City of Huglison (City) bytlieCalifori'iiaGoveriurientCode(ortlieCity'sinvestinentpolicy,wlierei'norerestrictive). Tlie table also identifies certain provisions of tlie California Goveminent Code (or tlie City's investi'nent policy, wl'iere i'nore restrictive) tl'iat address interest rate risk, credit risk, and coxicentration ofcredit risk. Tliis table does not address investi'nents ofdebt proceeds field by boi'id trustee tliat are governed by tlie provisions of debt agreements of tlie City ratlier tlian tlie general provisions of tlie California Governinent Code or tlie City's investirient policy.

Autliorized Investment Type
Bonds issued by the City
US Treasury Obligations
Federal Agency Issues
Negotiable Certificates ofDeposit
Repurcliase Agreements
Bankers' Acceptances
Medium Term Notes
Money Market Mutual Funds
Commercial Paper
County Pool Investment Funds
Local Agency Investinent Fund (LA[F)
Collateralized Bank Deposits
Mortgage Pass-through Securities
Shares of Beneficial Interest by a JPA
Maximum
Maturity
N/A
5 years
5 years
5 years
lyear
180 days
5 years
N/A
270 days
N/A
N/A
N/A
5 years
N/A
Max'mum
Percentage
ofPoitfolio
None
None
None
30%
None
40%
30%
None
25%
None
None
None
20%
None
Maximuin
Investi'nent
in One Issuer
None
None
None
None
None
30o/o
None
10o/o
None
None
$75 Million
None
None
None
Tl'ie investi'nent policy allows for tl'ie above investments wliid'i liave equal safety and liquidity as all otlier allowed investinents. Maturity depends on the casli needs of the City. 42 CITY OF HUGHSON

NOTES TO BASIC FINANCIAL ST ATEMENTS
June 30, 2021
NOTE 3 - CASH AND INVESTMENTS (Continued)
B. Investinents Authorized by Debt Agreements
Investment of debt proceeds lield by bond trustees are governed by provisions of tlie debt agreei'nents ratlier tlian tlie general provisions of tlie California Governinent Code or tlie City's investment policy. Tlie table below identifies tlie Iiwestinent types tl'iat are autl'iorized for investments lield by bond trustee. The table also identifies ceitaii'i provisions of tliese debt agreei'nents tliat address interest rate risk, credit risk, and concei'itration of credit risk.

Authorized Investment Type
Local Agency Bonds
u.s. Treasury Obligations
State Obligations
u.s. Govemment Agency {Ssues
Money Market Mutual Fund
Bankers Acceptances
Commercial Paper
Certificates of Deposit
Repurchase Agreements
Inveshnent Agreements
Local Agency Investment Fund (LAIF)
Maximum
Maturity
N/A
N/A
N/A
N/A
N/A
N/ A
270 days
N/A
Maximum
Percentage
of Portfolio
None
None
None
None
None
None
None
None
None
None
None
Maximum
Inveshnent
in One Issuer
None
None
None
None
None
None
None
None
None
None
None
Tlie iiwestinent policy allows for tlie above iiwestments wliicli have equal safety and liquidity as all other allowed investments. Maturity depends on tlie cash needs of tlie City.

C. Disclosures Relatii'ig to Interest Rate Risk
Interest rate risk is tlie risk tliat clianges in inarket interest rates will adversely affect tlie fair value of an investment. Generally, tlie longer the maturity of an ii'ivestinent, tlie greater tlie sensitivity of its fair value to clianges in i'narket ii'iterest rates. One of the ways tliat the City inanages its exposure to interest rate risk is by purchasing a coinbination of sliorter term and longer term investments and by timing casli flows from maturities so tliat a portion oftlie portfolio is maturing or coining close to inaturity evenly over time as necessary to provide the caslt flow and liquidity needed for operations.

Informatioi'i about tlie sensitivity of tlie fair values of tlie City's investments (including investments held by bond trustee) to inarket interest rate fluctuatioi'is is provided by the followii'ig table tliat shows the distribution of the City's investinents by i'naturity:

Investi'nent Type Totals
State Investinent Pool (LAIF)
Money Market Funds
Certificates of Deposit
$ 84,929
22,604,585
2,790,595
$ 25,480,109
12 Months
or Less
Remaining maturity (in Months)
13 to 24 25-60
Montlis Montlis
More Thaii 60
Months
$ 84,929
22,604,585
746,602
$ 23,436,116
177,668
$ 177,668
1,866,325
$ 1,866,325 $
43 CITY OF HUGHSON

NOTES TO BASIC FINANCIAL ST ATEMENTS
June 30, 2021
NOTE 3 - CASH AND INVESTMENTS (Continued)
D. Investinents witli Fair Values Higl'ily Sensitive to Interest Rate Fluctuations Tlie City lias no investinents (including ii'ivestments held by bond trustees) tliat are Iiiglily sensitive to interest rate fluctuations (to a greater degree than already indicated in tlie information provided above).

E. Disclosures Relating to Credit Risk
Generally, credit risk is tlie risk tliat an issuer of an iiwestment will not fulfill its obligation to the liolder of the investinei'it. Tliis is measured by tlie assignment of a rating by a nationally recognized statistical rating organization. Presented below is tlie ininimum rating required by (wliere applicable) tlie California Governirient Code, tlie City's iiwestment policy, or debt agreei'nents, and tlie actual rating as of fiscal year end for eacli investment type.

Investinent Type
State Investment Pool
Money Market Funds
Certificates of Deposit
TotaI
Ai'nount
$ 84,929
22,604,585
2,790,595
$ 25,480,109
F. Concentration of Credit Risk
Minimum
Legal
Rating
N/A
N/A
N/A
Rating as of Fiscal Year End
Exei'npt
From
Disclosure AAA AA
$-$-$
Not
Rated
$ 84,929
22,604,585
2,790,595
$ 25,480,109
Tlie investment policy of tlie City contains liinitations on tlie amount that can be invested in any one issuer beyond that stipulated by tlie California Govei'i'u'nent Code. Tliere are no investmei'its in any one issuer (otlier tlian inoney inarket) tliat represent 5% or iriore of total City investinents.

G. Custodial Credit Risk
Custodial credit risk for deposits is tlie risk tl'iat, in tlie event oftlie 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 tlie possession of an outside party. The custodial credit risk for iiwestmei'its is tlie risk tl'iat, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a governi'nent will not be able to recover tlie value of its investinent or collateral securities tliat are in tlie possession of anotlier party. The California Government Code and the City's investment policy do not contain legal or policy requireinents that would limitthe exposure to custodial credit risk for deposits or investments, other than the following provision fordeposits:

The California Government Code requires tliat a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool lield by a depository regulated under state law (unless so waived by tlie govemmental unit). Tlie fairvalue of tlie pledged securities ii'i the collateral pool must equal at leastll 0% of tlie total amount deposited by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed inortgage notes l'iaving a value of 150% of tlie secured public deposits.

As of June 30, 2021, all of the City's deposits witl'i financial institutions in excess of federal depository insurance lii'nits were held in collateralized accounts. 44 CITY OF HUGHSON

NOTES TO BASIC FINANCIAL ST ATEMENTS
June 30, 2021
NOTE 3 - CASH AND INVESTMENTS (Continued)
H. Investment in State Investinent Pool
The City is a voluntary paiticipant in the Local Agency Investment Fund (LAIF) that is regulated by the California Government Code under the oversight of the Treasurer of the State of California. The fair value of the City's investment in this pool is repoited in the accompanying financial statements at amounts based upon the City's pro-rata share of the fair value provided by LAIF t-or the entire LAIF portfolio (in relation to the ainoitized cost of that poitfolio). The balance available for withdrawal is based on the accounting records inaintained by LAIF, which are recorded on an amoitized cost basis.

I. Fair Value Measurements
The City categorizes its fair value ineasurements within the fair value hierarchy establish by generally accepted accounting principles. T)iese principles recognize a three tiered fair value hierarchy as follows: Level l - Investinents reflect prices quoted in active markets; Level2 - Investments reflect prices that are based on similar observable asset either directly or indirectly, which inay include inputs in i'narkets that are not considered active; and Level 3 - Investments reflect prices based upon unobservable sources. The City did not have any investinents applicable to recurring fair value measurements as of June 30, 2021.

NOTE 4 - INTERFUND TRANSACTIONS
A. Interfund Receivables and Payables
During the course of normal operations, numerous transactions occur between individual funds that may result in ainounts owed between funds. Those related to goods and services type transactions are classified as "due to and froin other funds". The following presents a suminary of current interfund balances at June 30, 2021 :

Receivable Fund
Major Govemmental Fund:

General Fund
Totals
B. Transfers between Funds
Amount Payable Fund
Nonmajor Govenimental Fund:
289,947 Transportation Capital Projects Fund
Noninajor Enterprise Fund:

USF Cominunity Center Fund
289,947 Totals
AmouiX
288,733
1,2}4
289,947
Transfers are indicative of funding for capital projects, lease payments or debt service, subsidies of various City operations, and re-allocations of special revenues. All interfund transfers between individual governmental funds have been eliminated on the goveminent-wide statements. The following schedule briefly sui'nmarizes the City's transfer activity for the fiscal year ended June 30, 2021:

Fund
Major Governmental Funds:

General Fund
Major Enterprise Funds:

Water Fund
Sewer Fund
Nonmajor Governmental Funds:

Gas Ta.v Special Revenue Fund
Vehicle Abatement Special Revenue Fund
Lighting and Landscaping Special Revenue Fund
Benefit Assessment Special Revenue Fund
IT Reserve Special Revenue Fund
CFD Special Revenue Fund
Nonmajor Enterprise Funds:

Community Center Operations Fund
USF Community Center Fund
Totals
Transfers-in Transfers-out
101,312 12,500
185,484
4,015,261
190,484
4,015,261
10,000
7,500
46,600
10,000
20,746
14,846
1,500
$ 4,319,557
7,620
$ 4,319,557
45 CITY OF HUGHSON

NOTES TO BASIC FINANCIAL ST ATEMENTS
NOTE 5 - CAPIT AL ASSETS
June 30, 2021
Capital Asset activity for tlie fiscal year ended June 30, 2021 was as follows:

Governinental activities:

Capital assets, not being depreciated:

Land
Rights of ways
Construction in progress
Total capital assets, not being depreciated
Capital assets, being depreciated:

Buildings
linprovements
Equipment
Machinery
Rolling stock
[nrrastructure
Total capital ASSETSbeing depreciated
less accumulated depreciation for:

Buildings
Improvements
Equipment
Machinery
Rolling stock
{nfrastructure
Total accumulated depreciation
Total capital assets, being depreciated, net
Governinental activities capital assets, net
Business-type activities:

Capital assets, not being depreciated:

Land
Construction in progress
Total capital assets. not being depreciated
Capital assets, being depreciated:

Buildings
Iinprovements
Equipment
Macliinery
Infrastructure
Rolling stock
Total capital assets, being depreciated
Less accumulated depreciation for:

Buildings
Improveinents
Equipinent
Machinery
Infrastructure
Rolling stock
Total accumulated depreciation
Total capital assets. being depreciated, net
Business-type activities capital assets. net
Balance at
June 30. 2020 Additions
$ 9,497,6t2
2,777,617
497,684
12,772,913
57,290
57,290
919,905
6,957,513
622,663
241,902
565,675
13,397,859
22,705,517
(644,365)
(1,724,842)
(476,906)
(241,902)
(511,907)
(5,289,329)
(8,889,251)
13,816,266
$ 26,589,179 $
Balance at
(15,172)
(236,079)
(42,337)
(26,885)
(279,415)
(599,888)
(599,888)
(542,598) $
June 30, 2020 Additions
$ 18,108,769 $
3,241,632
21,350,401
2,395,467
2,395,467
28,068,657
4,288,696
94,425
235,695
19,002,924
242,497
51,932,894
(7,649,768)
(3,495,035)
(75,540)
(235,695)
(8,426,821)
(197,073)
(20,079,932)
(926,694)
(42,202)
(7,472)
(265,307)
(15,967)
(1,257,642)
31,852,962 (1,257,642)
$ 53,203,363 $ 1,137,825 $
Deletions Transfers
Balance at
June 30, 2021
(255,276)
(255,276)
23, 107
232, 169
(47,298)
(47,298) 255,276
$ 9,497,612
2,777,617
299,698
)2,57 4,927
919,905
6,980,620
854,832
241,902
518,377
13,397,859
22,913,495
47,298
47,298
(659,537)
(1,960,921)
(519,243)
(241,902)
(491,494)
(5,568,744)
(9,441,841)
255,276 13,471,654
$ 26,046,581
Balance at
Deletions Transfers June 30, 2021
$ 18,108,769
5,637,099
23,7 45,868
28,068,657
4,288,696
94,425
235,695
19,002,924
242,497
51,932,894
(8,576,462)
(3,537,237)
(83,012)
(235,695)
(8,692,128)
(213,040)
(21,337,574)
30,595,320
$ 54,341,188
46 CITY OF HUGHSON

NOTES TO BASIC FINANCIAL ST ATEMENTS
June 30, 2021
NOTE 5 - CAPITAL ASSETS (Continued)
Depreciation
Depreciation expense was cliarged to governinental functions as follows:

General Governinent
Public Works
Parks and Recreation
Total depreciation expense - governinental functions
$ 279,415
271,247
49,226
$ 599.888
Depreciation expense was cliarged to business-type functions as follows:

Sewer
Water
Comi'nunity Facilities
Total depreciation expense - business-type functions
NOTE 6 - NOTES RECEIV ABLE
1,032.760
200.706

24. 176
Tlie City has establislied a number of liousing assistance loan prograi'ns using HOME Investinent Partnersliips Prograi'n grant funds. Tliese loans consist of several loans for first-time hoine buyers assistance and hotne rehabilitation assistance loans for qualified persons. Tlie City also utilizes Community Development Block Grant (CDBG) to provide business assistance loans and lioine rehabilitation loans to qualified persons.

NOTE 7 - LONG-TERM LIABILITIES
Tlie following is a scliedule of loi'ig-terin liabilities for Governi'nental Activities and Business-type Activities for tlie fiscal year ended June 30, 2021:

Balance at
June 30, 2020 Additions
F3alanceat
Repayinents June 30,2021
Due Within
One Year
Gosieminental Activities:

Compensated absences
Total
34,087 $
34,087 $
23,124 $
23,124 $
(15,596) $
(15,596) $
41,615 $
41,615 $
10,C)
10,(XX)
Business-type Activities:

Compensatedabsences $
Debt tmm direct boi'i'owings and dii'ect placeinents
Installment note payable - Water
Installment note payable - Sewer
(.iWRCB Revolving Loan
Total
88,056 $ 45,251 $ (45,251) $ 88,056 $ 30,(XX)
934,9t+0
3,321,671
11,147,045
(142,908)
(3,321,671)
(479,666)
$ 15,491,732 $ 45,251 $ (3,989,496) $
7g052
10,667,379
11,547,487 $
147,808
484,462
662,270
47 CITY OF HUGHSON

NOTES TO BASIC FINANCIAL ST ATEMENTS
June 30, 2021
NOTE 7 - LONG-TERM LIABILITIES (Continued)

1. Business -type Activities - Direct Borrowings and Placements of Debt - Installment Notes Payable
On February 27, 2006 the City executed an installinent note agreet'nent witli Municipal Finance Corporation for tlie acquisition and construction of a 750,000 gallon water storage tank to meet fire flow requirei'nents ai'id pledged tlie City's Water Fund as tlie specific revenue source for the repayment of the note. Tlie note bears interest at3.4%, witli principal payments varying fiaoin $37,010 to $85,287, payable seini-aimually begii'ining Septeinber 29, 2006, and continuing until Marcli 29, 2026. Tlie balance outstanding at June 30, 2021 is $792,052.

On Marcl'i 7, 2008, tlie City executed an installi'nent note agreeinei'it witli Mui'iicipal Finance Corporation for tlie acquisition and coi'istruction for a wastewater treatment plant in tlie ainount of $6,750,000, later ainended to $6,780,000, and pledged tlie City's Sewer Fund as tlie specific revenue source for the repayinent of tl'ie note. The note bears ii'iterest at 3.4%, witli principal payinents varying from $126,472 to $234,873, payable seini-annually beginning September 7, 2008, and continuing until Marcli 7, 2028. Tliis i'iote lias been paid off during the fiscal year ended June 30, 2021.

In tlie event of a default the full outstanding balance of the note ii'ni'nediately becoines due and payable.

Annual debt service requirements for tlie Installment Notes Payable are sl'iown below:

Fiscal Year
Ended June 30,
2022
2023
2024
2025
2026
Principa!
147,808
152,876
158,118
ibi.s=ro
169,710
792,052
Installment Notes Payable - Water
Interest
25,664
20,597
15,355
9,933
4,326
75,875
Total
173,472
173,473
}73,473
173,473
174,036
867,927

2. Business -type Activities - Direct Borrowings and Placements of Debt - California State Water Resources Control Board Revolving Loan
On SeptemberlO, 2009, tlie City entered into a project finance agreement with tlie California State Water Resource Control Board (Water Control Board) and pledged the City's Water Fund as the specific revenue source for tl'ie repayment of the loan. Througli tlie use of ARRA funds, tlie Water Control Board provided funding assistance in tlie ainount of $23,100,000 forthe reliabilitation and upgrade of the wastewater treatmei'it plant. Tlie City must repay the project fiuids at an interest rate of 1% per annum. Tliis Loan was restructured during tlie fiscal year ended Jui'ie 30, 2021, to extendthepaymentperiodby lOyears.Theteri'noftheagreeinentisnowJunel6,2009,toJune7, 2041. The balance outstanding at June 30, 2021 is $10,667,379. 48 CITY OF HUGHSON

NOTES TO BASIC FINANCIAL ST ATEMENTS
June 30, 2021
NOTE 7 - LONG-TERM LIABILITIES (Continued)

2. Business -type Activities - Direct Borrowings and Placements of Debt - California State Water Resources Control Board Revolving Loan (Continued) In tlie event of a default, tlie full outstanding balance of tlie loan imi'nediately becoi'nes due and payable.

Annual debt service requireinents for the CSWRCB Loan are sl'iown below:

Fiscal Year
Ended June 30,
2022
2023
2024
2025
2026
2027-2031
2032-2036
2037-2041
Principal
484,462
489,307
494,200
499, 142
504, 133
2,597,303
2,729,791
2,869,041
10,667,379

3. Compensated Absences
CSWRCB Loan
(nterest
194,683
199,025
188,62i
780,519
499,444
204,033
$ 2,066,325
Total
484,462
489,307
688,883
698, 167
692,754
3,377,822
3,229,235
3,073,074
12,733,704
Tlie City's policy relating to coi'npensated absences is described in Note (l). Cotnpensated absences are liquidated primarily by tlie general fund and proprietary funds. Tlie total ai'nount outstanding at June 30, 2021, was $41,615 for goveriunental activities and $88,056 for businesstype activities.

NOTE 8 - RISK MANAGEMENT
Central San Joaquin Valle)i Risk Ailanagement Autl'iority The City participates witli otlier public entities in a joint exercise of powers agreeinent wliich establisl'ies the Central San Joaquin Valley Risk Management Autliority (CSJVRMA). The relationsliip between tlie City and CSJVRMA is sucli tliat CSJVRMA is not a component unit of the City for financial reporting purposes.The City is covered for the first $1,000,000 of each general liability claim and $500,000 of eacli workers' compensation claim tlirougli tlie CSJVRMA. Tlie City lias tlie right to receive dividends or the obligation to pay assessments based on a forinula wliicli, among otlier expenses, charges tlie City's account for liability losses under $10,000 and worker's compensation losses under $10,000.

The CSJVRMA participates in an excess pool whicli provides general liability coverage froin $1,000,000 to $l0,000,000. Tlie CSJVRMA participates in an excess pool which provides workers' coi'npensation coverage from $350,000 to $500,000 and purchases excess insurance above tlie $500,000 to the statutory limit. The CSJVRMA is a consortiuin of fifty-fi've (55) cities in the San Joaquin Valley of California. It was established under the provisions of California Governinent Code Section 6500 et seq. The CSJVRMA is governed by a Board of Directors, which meets 3-4 times per year, consisting of one member appointed by each member city. The day-to-day business is handled by a management group einployed by the CSJVRMA.
49 CITY OF HUGHSON

NOTES TO BASIC FINANCIAL ST ATEMENTS
June 30, 2021
NOTE 9 - PROPRIET ARY FUNDS INFORMATION
Tlie City i'naintains four enterprise funds. Tlie Water and Sewer funds account for tlie provisioi'i of basic utility services to all citizens. Tlie Cominunity Center Operations fund and USF Cominunity Center fund are utilized to maintain tlie operations and inaintenance of tlie City's community center.

NOTE l0 - CONTINGENT LIABILITIES
Tlie City is subject to litigation arising in tlie norinal course of business. In tlie opinion of tlie City's inanagement, tliere is no pending litigation tliat is likely to liave a material adverse effect on tl'ie financial position of the City.

NOTE l1- OTHER POST EMPLOYMENT BENEFITS
Tlie City does not offer any otlier post-employment benefits.

NOTE l2 - PENSION PLAN
For purposes of ineasuring the net pension liability and deferred outflows/inflows ofresources related to pensions, and pension expense, inforination about the fiduciary net position of tlie Plans and additions to/deductions froi'n tlie Plans' fiduciary net position liave been deterinined on tlie same basis as they are reported by CalPERS Financial Office. For tliis purpose, benefit payi'nents (including refunds of employee contributions) are recognized wlien due and payable in accordance witli tlie benefit teri'ns. Investmei'its are reported at fair value.

A. General Information about tlie Pension Plan
Plan Descriptions - All qualified einployees are eligible to participate in the City's separate Safety (police and fire) and Miscellaneous (all otlier) Plans, cost sliaring defined benefit pensioi'i plans adi'ninistered by tlie California Public Employees' Retireinent System (CalPERS), wliicli acts as a coinmon investinent and administrative agent for its participating member employers. Benefit provisions ui'ider the Plans are establislied by State statute and Local Governinent resolution.

CalPERS issues publicly available repoits tliat include a full description of tlie pension plans regarding benefit provisions, assui'nptions and mei'nbership inforination tliat can be found on tlie CalPERS website.

BenefitsProvided - CalPERSprovides serviceretireinentanddisability benefits,annualcostofliving adjustments and death benefits to plai'i members, who inust be public einployees and beneficiaries.

Benefits are based on years of credited service, equal to one year of full-tiine employment. Meiribers with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 10 years of service. T)ie deatli benefit is one ofthe following: tl'ie Basic Deatl'i Benefit, tlie 1957 Survivor Benefit, orthe Optional Settlement 2W Deatli Benefit. Tlie cost of living adjustments for eacl'i plan are applied as specified by the Public Employees' Retirement Law.
50 CITY OF HUGHSON

NOTES TO BASIC FINANCIAL ST ATEMENTS
June 30, 2021
NOTE l2 - PENSION PLAN (Continued)
A, General Information about tlie Pension Plan (Contiiuiet0 Tlie Plans' provisions and benefits in effect at June 30, 2021, are summarized as follows:

Hire date
Benefit formula
Benefit vesting schedule
Benefit payments
Retirement age
Monthly benefits, as a % of eligible compensation
Required employee contribution rates
Required einployer contribution rates
City Misc Plan
Prior to January On or after Januaiy
1, 2013 1, 2013

2.7% @ 55 2% @ 62
5 years service 5 years service
monthly for life monthly for life
55 62
2% [0 2.7% 2.00%
8% 6.25o/o

11.634% 6.555%
City Safety Plan
Prior to January 1,
2013

3.0%@ 50
5 years service
monthly for life
50 Contributions - Section 20814(c) of the California Public Employees' Retireinent Law requires tliat tlie einployer contribution rates for all public einployers be deteri'nined on an annual basis by tlie actuary and sliall be effective on tlie July l following notice of a cliange in tlie rate. Funding contributions for botli Plans are determined annually on an actuarial basis as of June 30 by CalPERS.

Tl'ie actuarially deterinined rate is tlie estimated amount necessary to finance tlie costs of benefits earned by employees during tlie fiscal year, witl'i an additional ainount to finance any unfunded accrued liability. Tlie City is required to contribute tlie difference betweei'i the actuarially deterinined rate and tlie coi'itribution rate of employees.

E. Pension Liabilities, Pension Expenses, aiidDeferred Outflows/Inflows ofResourcesRelatedto Pensions
As of June 30, 2021, tlie City reported net pension liabilities for its proportionate share of tlie net pension liability of the Plaii as follows:

Proportionate Share of Net Pension
Liability
Misc. Plan Safety Plan
2,611,642 $ 874,408
51 CITY OF HUGHSON

NOTES TO BASIC FINANCIAL ST ATEMENTS
June 30, 2021
NOTE l2 - PENSION PLAN (Continued)
E. Pension Liabilities, Pension Expenses, and Deferred Outflosvsflnflows of ResourcesReltited to Pensions (Contiiuted)
Tlie City's i'iet pension liability for tlie Plan is ineasured as the propoitionate sliare of the net pension liability. Tlie net pension liability of the Plai'i is ineasured as of June 30, 2020, and the tota) pension liability for tlie Plan used to calculate tlie net pension liability was deterinined by an actuarial valuation as of June 30, 2019 rolled forward to June 30, 2020 using standard update procedures. The City's proportion of tlie net pension liability was based on a projection of tlie City's long-term share of contributions to tlie pension plans relative to tl'ie projected contributions of all participating ei'nployers,actuariallydeteri'nined. TlieCity'sproportionatesliareofthenetpensionliabilityforthe Plan as of June 30, 2019 and 2020 was as follows:

Proportion - June 30, 2019
Proportion - June 30, 2020
Cliange - Increase (Decrease)
City Miscellaneous
Plan

0.06110%

0.06192%

0.00082%
City Safety
Plan

0.01352%

0.01312%
-0.00040%
For tlie fiscal year ended June 30, 2021, tlie City recognized pension expense of $345,188. At June 30, 2021, tlie City reported deferred outflows of resources and deferred inflows of resources related to pensions froin the following sources:

Pension contributions subsequent to measurement date
Net differences between projected and actua! earnigs
on pension plan investinents
Differences based on actual experience
Differences based on cliange of assuinptions
Differences between actual vs proportionate contribution Adjustment due to differences in proportions
Total
Deferred
Outflows of
Resources
$ 330,474
96,588
202,392
20,038
$ 649,492
Deferred
Inflows of
Resources
(21,540)
(74,757)
(16,117)
$ (112,414)
!5330,474 reported as deferred outflows of resources related to coi'itributions subsequentto the ineasurei'nent date and will be recognized as a reduction of tlie net pension liability in tbe fiscal year ended June 30, 2022. Otlier amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions and will be recognized as pension expense as follows:

Fiscal Year Ended
June 30,
2022
2023
2024
2025
Ainount
6,805
84,202
68,864
46,733
206,604
52 CITY OF HUGHSON

NOTES TO BASIC FINANCIAL ST ATEMENTS
June 30, 2021
NOTE l2 - PENSION PLAN (Continued)
B. Pensioii Liabilities, Pension Expenses,andDeferred Otdflows/Iiiflows ofResogircesRelatedto Pensions (Continued)
Tlie City's net pension liability for eacli Plan is measured as tlie total pension liability, less tlie pension plan's fiduciary net position. Tlie net pension liability of each of tlie Plans is measured as of June 30, 2020, using an annual actuarial valuation as of June 30, 2019 rolled forward to June 30, 2020 using standard update procedures. A sui'nmary of principal assuinptions ai'id i'netl'iods used to determine the net pension liability is sliown below.

ActuarialAssumptions - Tlie total pension liabilities in tlie June 30, 2019 actuarial valuations were determined using tlie following actuarial assumptions:

Valuation Date
Measurement Date
Actuarial Cost Method
Actuarial Assumptions:

Discount Rate
Inflation
Payroll Growth
Projected Salary Increase
Investment Rate of Retui'n
Mortality
Miscellaneous Safety
June 30, 2019 June 30, 2019
June 30, 2020 June 30, 2020
Entry-Age Normal Cost Method

7. 15% 7. 15%

2.75% 2.75%

3.00% 3.00%

3.30%-14.20% (l) 3.30%-14.20% (l)

7.50% (2) 7.50% (2)
Derived using CalPERS' Membership Data for
all Funds
(1) Depending on age, service and type of employment
(2) Net of pension plai'i investinent expenses, including inflation Tlie underlying mortality assumptions and all otlier actuarial assui'nptioi'is used in the June 30, 2019 valuatioi'i were based on the results of a January 2014 actuarial experience study for tl'ie period 1997 to 2011. Furtlier details of the Experience Study can be found on tlie CalPERS website.

DiscountRate - Tlie discount rate used to i'neasure tlie total pension liability was 7.15% for eacli Plan.

To determine whetlier the i'nunicipal bond rate sl'iould be used in tlie calculation of a discount rate for each plan, CalPERS Stress tested plans tliat would most likely result in a discount rate tliat would be different from the actuarially assuined discount rate. Based on tlie testing, none oftlie tested plai'is run out of assets. Tlierefore, tl'ie current 7.15 percent discount rate is adequate and the use of tlie i'nunicipal bond rate calculation is not i'iecessary. The long terin expected discount rate of 7.15 percent will be applied to all plans in the Public Einployees Retirement Fund (PERF). The Stress test results are presented in a detailed report tl'iat can be obtained from the CalPERS website. 53 CITY OF HUGHSON

NOTES TO BASIC FINANCIAL ST ATEMENTS
June 30, 2021
NOTE l2 - PENSION PLAN (Continued)
B. Pension Liabilities, Pension Expenses, and Deferred Oufflowsfln/Vows ofResogirces Related to Pensions (Continued)
CalPERS is sclieduled to review all actuarial assumptions as part of its regular Asset Liability Management (ALM) review cycle tliat was sclieduled to be completed in February 2018. Any clianges to tlie discount rate will require Board action and proper stake)iolder outreacli. For tliese reasons, CalPERS expects to coi'itinue using a discount rate net of adi'ninistrative expenses for GASB 67 and 68 calculations through at least tlie 2017-18 fiscal year. CalPERS will continue to clieck the i'nateriality of the difference in calculation ui'itil such time as we liave clianged our inetliodology.

Tl'ie long-terin expected rate of return on pension plan investinents was deteri'nined using a buildingblock inetliod in wliicli best-estiinate ranges of expected future real rates of return (expected returns, i'iet of pension plan iiwesti'nent expense and inflation) are developed for eacli inajor asset class.

In determining tlie long-term expected rate of return, CalPERS took into account botli sliort-terin and long-terin market return expectations as well as tlie expected pension fund cash flows. Using liistorical returns of all tlie funds' asset classes, expected compound returns were calculated over tlie slioit-term (first 10 years) and the long-teri'n (it-60 years) using a building-block approacl'i. Using tlie expected noininal returns for botl'i sliort-terin and long-teri'n, tlie present value of benefits was calculated for each fund. Tlie expected rate of return was set by calculating tl'ie single equivalent expected return tliat arrived at tlie saine present value of benefits for cash flows as tlie one calculated using both short-terin and long-terin returns. Tlie expected rate of return was tl'ien set equivalent to the single equivalent rate calculated above and rounded down to tlie i'iearest one quarter of one percent.

T)ie tab]e below reflects tl'ie long-term expected real rate of return by asset class. Tlie rate of return was calculated using the capital i'narket assuinptions applied to deterinine the discount rate and asset allocation. Tliese rates of return are net of administrative expenses.

Asset Class
Global Equity
Fixed Income
Inflation Assets
Private Equity
Real ASsets
Liquidity
Assuined Asset
Allocation

50.00%

28.00%
O.OO%

8.00%

13.00%
l.OO%
Real Retum
Yearl-10(a)

4.80%
l.OO%

0.77%

6.30%

3.75%
O.OO%
Real Retum
Year ll+(b)

5.98%

2.62%

1.81%

7.23%

4.93%
-0.92%
a) An expected inflation of 2% used for this period
b) An expected inflation of 2.92% used for this period
54 CITY OF HUGHSON

NOTES TO BASIC FINANCIAL ST ATEMENTS
June 30, 2021
NOTE l2 - PENSION PLAN (Continued)
B. PensionLiabilities, PensionExpenses,andD<ferred Outflosvs/Iitflows ofResourcesRelatedto Pensioiis (Contiiuted)
Sensitivity qf the Net Pension Liability to Changes in the Discount Rate -Tlie following presents t)ie net pension liability of t)ie Local Government for each Plan, calculated using tlie discount rate for eacli Plan, as well as wliat tlie City's net pension liability would be if it were calculated using a discount rate tliat is I percentage point lower or l percentage point higher tlian the current rate:

Miscellaneous Safety
1% Decrease
Net Pension Liability

6.15o/o
$ 3,869,559 $

6.15%
1,239,234
Current Discount Rate
Net Pension Liability

7.l5%
$ 2,611,642 $

7.15%
874,408
l% increase
Net Pension Liability

8.15%
$ 1,572,265 $

8.15%
575,034
Pension Plan Fiduciai5i Net Position - Detailed inforination about eacli pension plan's fiduciary net position is available in tlie separately issued CalPERS financial reports.

NOTE l3 - SUCCESSOR AGENCY TRUST FOR ASSETS OF FORMER REDEVELOPMENT AGENCY
On December 29, 2011, tlie California Supreme Court upl'ield Assembly Bill IX 26 ("the Bill") tliat provides for tlie dissolution of all redevelopment agencies in tlie State of California.

Tlie Bill providesthat LIPOII dissolution of a redevelopi'nent agency, eitlier the city or otlier unit of local governinei'it will agree to serve as tlie "successor agency" to liold tlie assets units until tliey are distributed to otlier units of state and local governinent. On January 10, 2012, the City Council elected to becoine tlie Successor Agency for the foriner redevelopment agency ii'i accordance with tl'ie Bill as part of the City resolution number 2012-04.

After enacti'nent of tl'ie law, wliicli occurred on June 28, 2011, redevelopment agencies in the State of California cannot enter into new projects, obligations or coininitinents. Subject to tlie control of a newly establislied oversight board, reinaining assets can only be used to pay enforceable obligations in existence as of tlie date of the dissolution (including tlie completion of any unfinished projects that were subject to legally enforceable contractual commitments). Successor agencies will only be allocated revenue in tlie amount that is necessary to pay tlie estimated annual installment payments on enforceable obligations of former redevelopinent agency until all enforceable obligations ofthe prior redevelopment agency liave been paid in full and all assets liave been liquidated.

A. Long-term debt of the Successor Agency as of June 30, 2021, consisted of the following:

Balance
June 30, 2020 Additions Deletions
Balance
June 30, 2021
Due within
Oi
Tax Allocation Bonds
Original [ssuance Discount
$ 2,285,000 $
(40,325)
$ (105,000)
2,372
$ 2,180,000
(37,953)
s 105,000
(2,372)
Totals $ 2,244,675 $ $ (102,628)$ 2,142,047$ =102,628
55 CITY OF HUGHSON

NOTES TO BASIC FINANCIAL ST ATEMENTS
June 30, 2021
NOTE l3 - SUCCESSOR AGENCY TRUST FOR ASSETS OF FORMER REDEVELOPMENT

AGENCY (CONTINUED)
Tax Allocation Bonds - Series 2006
The foriner redevelopmei'it agency issued $3,200,000 of tax allocation refunding bonds on February 1, 2006.

Tlie principal balance outstanding at June 30, 2021 was $2,180,000. Tlie rei'naining aimual debt service requirements as of June 30, 2021 are as follows:

Fiscal Year
Ended June 30,
2022
2023
2024
2025
2026
2027-2031
2032-2036
2037
Principal
105,000
110,000
110,000
115,000
120,000
650,000
790.000
180,000
2,180,000
2006 Tax Allocation Bonds
Interest
78,825
75,600
72,300
68,925
65,400
260,400
117,400
3,600
742,450
Total
183,825
185.600
182.300
183,925
185,400
910,400
907,400
183,600
2,922,450
B. Capital assets of tlie Successor Agency as of June 30, 2021 consisted of tlie following:

Capital assets, being depreciated:

Buildings and Improvements
Infrastructure
Total capital assets, being depreciated
Less accumulated depreciation for:

Buildings and Improvements
Infi'astructure
Total accumulated depreciation, net
Total capital assets, net
July 1, 2020
Balance
795,929 $
47,930
843,859
(283,915)
(12,467)
(296,382)
541477 $
Additions
(26,531)
(959)
(27,490)
(27,490) $
Deletions
June 30, 2021
Balance
795,929
47,930
843,859
(310,446)
(13,426)
(323,872)
519,987
NOTE l4 - SUBSEQUENT EVENT
Subsequent to fiscal year-end, the City inay be negatively impacted by tlie effects of the worldwide coronavirus pandemic. The City is closely inonitoring its operations, liquidity, and reserves and is actively working to ininimize tlie current and future impact oftliis unprecedented situation. As of tlie date ofissuance of tl'iese financial statements, tlie full ii'npact to tlie City's financial position is not known. 56 REQUIRED SUPPLEMENT AL INFORMATION
CITI' OF H[iGIISON
SCI-{ED[iLE OF REVENUES, EXPENDffURES,

AND CHANGES IN FIIND BALANCES
B[IDGET AND ACTUAL

GENERAL FUND
FOR T}-IE FISCAL YEAR ENDED JIINE 30, 2021
Revenues
Property Ta.yes
Sales and Use Taxes
Business License Ta.yes
Other Ta.xes
Licenses and Permits
Fines and Forfeitures
Interest
Charges for Services
Intergovernmental
Other
Total Revenues
Budgeted Ai'nounts
Original Final
$ 422,750
900,161
25,000
121,698
191,380
27,099
3,600
27,883
992,010
423,270
3,134,851
410,317 $
900,161
21368
121,698
167,982
24,966
3,000
37,909
732,010
423,270
2,842,681
Actual
Amounts
373,550 $
1,102,903
2 8,130
113,919
235,660
39,918
5,116
164,220
737,2 r8
466,256
3,266,890
Variance witli
Final Budget
Positive
(Negative)
(36,767)
202,742
6,762
(7,779)
67,678
14,952
2,1 16
126,3!1
5,208
42,986
424,209
Expenditures
Current
General Government
Public Safety
Public Works
Parks aiid Recreation
Total Expenditures
Excess (Deficiency) of Revenues Over
(Under) Expenditures
Other Financing Sources (uses):

Transfers In
Transfers Out
Total Other Financing Sources (Uses)
Net Change in Fund Balance
Fund Balance - July 1, 2020
Fund Balance - June 30, 2021
i,397,760
1,403,747
306,572
110,678
3,218,757
(83,906)
199,492
(5,000)
194,492
) 10,586
4,063,523
$ 4,174,109 $
1,142,760

1.338,437
306,572
110,678
2,898,447
(55,766)
199,492
(5,000)
194,492
138,726
4,063,523
4,202,249 $
965, 185
1,371,563
268,682
98,455
2,703,885
563,005
101,312
(12,500)
88,812
651,817
4,063,523
4,715,340 $
177,575
(33,126)
37,890
12,223
194,562
618,77!
(98, I80)
(7,500)
(105,680)
513,091
513,091
57 CITY OF HUGHSON

SCHEDULE OF REVENUES, EXPENDITURES,

AND CHANGES IN FUND BALANCES

BUDGET AND ACTUAL

REFUSE SPECIAL REVENUE FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
Revenues
[merest
Charges for Services
Total Revenues
Expenditures
Current:

Public Works
Total Expenditures
Net Change in Fund Balance
Fund Balance - July 1, 2020
Fund Balance - June 30, 2021
Budgeted Amounts
Original Final
Variance with
Final Budget
Actual Positive (Negative)
$ - $ - $ 148 $
564,775 564,775 566,432
564,775 564,775 566,580
148
1,657
1,805
564,775 564,775 560,904 3,871
564,775 564,775 560,904 3,871
5,676 5,676
72,552 72,552 72,552
$ 72,552 $ 72,552 $ 78,228 $ 5,676
58 CITY OF HUGHSON

REQUIRED SUPPLEMENT AL INFORMATION
JUNE 30, 2021
Cost Sharing Defined Benefit Pension Plans
Schedule of the City's Proportionate Sliare of tlie Net Pension Liability - Last 10 Years* Proportion of net pension liability
June 30, 2021
0 032040%
June 30, 2020

0.032110o/6
June 30, 2019

0.031 920%
June 30, 2018

0.3 i6500%
June 30, 2017

0.031830%
June 30, 2016

0.032410%
June 30, 2015

0.028550o/o
Proportionate sliare of NPL $ 3,486,050 $ 3,290,773 $ 3,076,140 $ 3,139,177 $ 2,754,347 $ 2,224,103 $ 1,776,561 Covered payroll $ 1,038,083 $ 996,425 $ 905,888 $ 915,771 $ 920,504 $ 826,736 $ 838,193 Proportionate sliare of NPL
as a percentage of covered payroll 335.82% 330.26% 339.57% Plan fiduciary net position as percentage of
total pension liability 71.28% 72.72% 73.29%
Plan's Proportionate Sliare of Aggregate
EmployerContributions $ 345,188 $ 368,005 $ 329,O'kl $
Notes to Scliedule
342.79% 299.22o/o 269.05% 21l.95o/o

73.il% 76.65% 70.45oA 72. I1%
294,112 $ 263,559 $ 246360 $ 204,788
Change in Benefit Tenns: The figures above do not include any liability impact that inay liave resulted from plan changes which occui-red after June 30, 2013 as tliey liave minii'nal cost impact. Tliis applies for voluntat'y benefit changes as well as any offers of Two Years Additional Service Credit (a.k.a Golden Handshakes).

Change in Assumptions: {n 2017, tlie accounting discount rate reduced froin 7.65% to 7.15%. "Fiscal year 2015 was the l"' year of implementation, therefore only seven years are shown. 59 CITY OF HUGHSON

REQUIRED SUPPLEMENT AL INFORMATION
JUNE 30, 2021
Cost Sharing Defined Benefit Pension Plans
Scliedule of Contributions - Last 10 Years*
June 30, 2021 June 30, 2020 Jtine 30, 2019 Jui'ie 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 Contractual required contribution (actuarially
determined)
Contributions in relation to tlie actuarially
deterininedcontributions (345,188) (293,6)7) (270,473) (242,574) (219,201) (179,701) (149,901) Contribution deficiency (excess) $ - $ - $ - $ - $ - $ - $ $ 345.188 $ 293,617 $ 270,473 $ 242,574 $ 219,201 $ 179,701 $ 149,901 Covered payrolJ $ 996,425 $ 905,888 $ 915,771 $ 920,504 $ 826,736 $ 838.193 $ 826.114 Contributions as a percentage of covered
payroll 34.64% 32.41% 29.54% 26.35% 26.51% 21.44% 18. I5% Notes to Scliedide
Actuarial Cost Method
Amortization Metliod/Period
AssetS Valuation Metl'iod
Inflation
Salary Increases
Payroll Growth
Investment Rate of Return
Retirement Age
Mortality
Entiy Age Normal
For detail, see June 30, 2012 Funding Valuation Repoit
Actuarial Value of Assets. For details, see June 30, 2012 Funding Valuation Report.

2.75oA
Varies by Entry Age and Service

3.00%

7.50% Net of Pension Plan Iiwestment and Administrative Expenses; includes Inflation.

The probabilities of Ret#ement are based on the 2010 CalPERS Experience Study for the period from 1997 to 2007.

The probabilities of moitality are based on the 2010 CalPERS Experience Study for the period from 1997 to 2007. Preretirement and Post-retirement mortality rates included 5 years of projected moitality improvement using Scale AA published by the Society of Actuaries.
"Fiscal year 2015 was the l"' year of implementation, therefore only seven years are shown. 60 OTHER SUPPLEMENT AL INFORMATION

CITY OF HUGHSON

PUBLIC FACILITIES C APIT AL PROJECTS FUND

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES

IN FUND BALANCE - BUDGET AND ACTUAL
For the Fiscal Year Ended June 30, 2021
Final
Budget
Actual
Amount
Variance with
Final Budget
Positive (Negative)
Revenues:

Interest
Charges for Services
Total Revenues
$ 1,000 $
193,824
194,824
1,924 $
421,602
423,526
924
227,778
228,702
Expenditures:

Current:

General Governi'nent
Total Expenditures
72,394
72,394
23,483
23,483
48,911
48,911
Net Change in Fund Balance 122,430 400 043 271613
Fund Balance - July 1, 2020 1,442,804 1,442,804
FundBalance-June30,2021 $ 1,565,234 $ 1,842,847 $ 277,613 61 This page left intentionally blank
62 NONMAJOR GOVERNMENT AL FUNDS

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

The Asset Forfeiture Fund was established to account for monies received from asset seizures in the City's jurisdiction. The monies are to be spent on police protection and enforcement.

The Gas Tax Fund was established to account for state gas tax revenues based on population.

The revenues may be expended only for street and road repair, maintenance, design, construction, and traffic signal design and installation.

The Vehicle Abatement Fund was established to account for vehicle abatement fees, revenues, and expenditures.

The CDBG Rehab Fund was established to account for federal grants under the Housing and Community Development Act, to aSSist low and moderate income groups in obtaining loans to rehabilitate or revitalize their homes.

The CDBG Grants Fund was established to account for federal planning grants under the Housing and Community Development Act.

The Community Enhancement Fund was established to bridge the gap between old development and new development where Landscaping and Lighting Districts are not set up.

The Local Transportation Fund was established to account for revenues received and expenditures made for traffic improvements.

The Storm Drain Fund was established to account for storm drain restenues.

The SLESF Fund established to account for revenues received and expenditures made for Special Law Enforcement Services.
63 The Lighting and Landscaping Fund was established to account for the Iighting and landscaping of specified zones in the City.

The Benefit Assessment Fund was established to account for assessments applied to certain districts within the City.

The Trench Cut Fund was established to accorint for trencli cutting costs to be paid with specified charges designed for that specific use.

The Public Safety Realignment Fund was established to account for public safety costs to be paid from a special intergovernrnental funding source.

Tlie IT Reserve Fund was established to accorint for amounts set aside and transferred from all City funds for fiiture IT upgrades.

The M[easure L Sales Tax Fund was established to account for Measure L sales tax revenues and expenditures.

The SB-l Roads Fund was established to account for SB-l roads funds received from the State.

The Disability Access and Education Fund was established to account for fees per SB 1186 tliat are applied to the sale of business licenses and renewals.

The CFD Fund was established to account for various CFDs within the City.

The Covid Recovery Fund was established to account for American Recovery Plan Act funds.

CAPIT AL PROJECTS FUNDS
Capital projects funds are used to account for the acquisition and construction of major capital facilities other than those financed by proprietary funds and trust funds.

The Transportation Fund was established to account for street reconstruction.

The Municipal Park Fund was established to account for future expansion of City parks.

The Parks Development Impact Fees Fund was established to account for developer assessments on new home construction, with the monies to be used for construction of parks. 64 This page left intentionally blank
65 CITY OF HUGHSON
COMB[N[NG BALANCE SHEET

NONM AJOR GOVERNMENT AL FUNDS
June 30, 2021
Assets
Cash and Investments
Accounts Receivable
Loans Receivable
Total Assets
Liabilities
Accounts Payable
Unearned Revenue
Due To Other Funds
Total Liabilities
Deferred Inflows of Resources:

Unavailable Grant Revenue
Total Deferred Inflows of Resources
Total Liabilities and Deferred Inflows
of Resources
Fund Balances (Deficits)
Restricted
Unassigned
Total Fund Balances (Deficits)
Total Liabilities and Fund Balances
Special Revenue Funds
Asset
Forfeiture
Gas
Tax
Vehicle
Abatement
CDBG
Rehab
CDBG
Grants
$ 1,660 $ 297,228 $ 41,034 $ 439,601 $ 93,999
145,000
$ 1,660 $ 297,228 $ 41,034 $ 584,601 $ 93,999
$ 5,306 $
5,306
5,306
1,660 291,922 41,034 584,601 93,999
1,660
$ l ,660
291,922 41,034 584,601 93,999
$ 297,228 $ 41,034 $ 584,601 $ 93,999
66 Community Local
Enhancement Transpoitation
Stori'n
Drain
Special Revenue Funds
Lighting and
SLESF Landscaping
Benefit
Assessment
Trench
Cut
$ 205,009 $ 64,890 $ 656,284 $ 382,411 $ 210,394 $ 290,583 $ 3,094 488 86,220
$ 205,009 $ 64,890 $ 656,772 $ 468,631 $ 210,394 $ 290,583 $ 3,094 $ 220 $ $ 220 $ 162 $ 3,430 $ 409 $
220 220 162 3,430 409
220 220 162 3,430 409
204,789 64,890 656,552 468,469 206,964 290,174 3,094
204,789
5, 205,009 $
64,890 656,552 468,469 206,964 290,174 3,094
64,890 $ 656,772 $ 468,631 $ 210,394 $ 290,583 $ 3,094
Continued
67 CITY OF HUGHSON

COMBINING BALANCE SHEET

NONM AJOR GOVERNMENT AL FUNDS
June30,2021
(CONTINUED)
Assets
Cash and Investments
Accounts Receivable
Loans Receivable
Total Assets
Liabilities
Accounts Payable
Unearned Revenue
Due to Other Funds
Total Liabilities
Deferred Inflows of Resources:

Unavailable Grant Revenue
Total Deferred Inflows of Resources
Total Liabilities and Deferred Inflows
of Resources
Fund Balances (Deficits)
Restricted
Unassigned
Total Fund Balances (Deficits)
Total Liabilities and Fund Balances
Special Revenue Funds
Public Safety
Realignment
IT
Reserve
Measure L
Sales Tax
Disability Access
SB-I Roads and Education
$ 35,722 $ 106,475 $ 740,707 $
103,539
306,377 $
13, 188
2,744
170
$ 35,722 $ 106,475 $ 844,246 $ 319,565 $ 2,914
$ 3,822 $
3,822
3,822
35,722 106,475 840,424 319,565 2,901
35,722 106,475 840,424 319,565
$ 35,722 $ 106,475 $ 844,246 $ 319,565 $
2,901
2,914
68 CFD
Covid
Recovery
Capital Projects Funds
Parks
Municipal Development
Transportation Park Impact Fees
Total
Nonmajor
Govemmental
Funds
$ 29,860 $
904,854
$ 29,860 $ 904,854 $
$ 527,128 $ 678,707 $
$ 527,128 $ 678,707 $
5,113,907
1,108,459
145,000
6,367,366
31 $ 5,970 $ 220 $ 220 $ 20,023
288,733 288,733
294,703 220 220 308,756
904,854
904,854
904,854
904,854
904,854 294,703 220 220 1,213,610
29,829
29,829
$ 29,860 $
526,908
(294,703)
(294,703) 526,908
904,854 $ - $ 527,128
678,487
678,487
$ 678,707 $
5,448,459
(294,703)
5,153,756
6,367,366
69 CITY OF I-{UGHSON
COMBINjNG SarATEMENl" OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES

NONMAJOR GOVERNMENTAL FUNDS
For tlie Fiscal l'ear Ended June 30, 2021
Special Revenue Funds
Asset
Forl'eittire
Gas
Tax
Veliicle
Abateinent
CDBG
Rehab
CDBG
Grants
Revenues:

Interest
Charges for Services
Intergovennmental
Special Assessments
Other
Total Revenues
203 $ 576 $
164,189 21,740
164,392 21,740
981
1,557
Expenditures:

Cunent:

Parks and Recreation
Public Safety
Public Works
Capital Outlay
85,321
Total Expenditures 85,32!
Excess (Deficiency) of Revenues
over (Under) Expenditures 79,07 l 21,740 1,557
Otlier Financing Sources (Uses):

Transfers In
Transf'ers Out
Total Other Financing
Sources (Uses)
(46,600) (10,000)
(46,600) (10,000)
Net Change in Fund Balances 32,471 11,740 1,557
Fund Balances - July 12020 1,660 259,451 29,294 583,044 93,999 Fund Balances - June 30. 202 ! 1,660 $ 291,922 $ 41,034 $ 584.601 $ 93,999 70 Coinintinity
Enlianceinent
$ 264 $
54,386
54,650
Local
Transportation
Fund
Special Revenue Funds
Stoi'n'i Liglitingand Benefit Trencli
Di'ain SLESF Landscaping Assessinent Cut
$ 750 $ 453 $ - $ - $
161,955 117
170,923
178,712 90,138
162,705 171,376 178,712 90,138 117

2.139 2,139
9,910
128,287 34,701
2,139
52,511
2,139 9,910 128,2P,7
160,566 161,466 50,425
34,701
55,437 117
52,511 160,566 161,466
152,278 64,890 495,986 307,003
$ 204,789 $ 64,890 $ 656,552 $ 468,469 $
(20.746)
(20,7 46)
29,679
177,285
206,964 $
(14.846)
(14,846)
40,591117
249,583 2,977
290,174 $ 3,094
Continued
71 CITY OF HtlGHSON
COMBINING STATEMENT OF RE17ENUES, EXPENDITLIRES, AND Cl-IANGES IN FLIND BALANCES

NONMAJOR GOVERNMENTAL FLJNDS
For tM Fiscal laeai' Ended June 30, 2021
(CONTINUED)
Revenues:

Interest
Charges for Services
Intergoveinmental
Special Assessments
Other
Total Revenues
Expenditures:

Cunent:

Parks and Recreation
Public Safety
Public Works
Capital Outlay
Total Expenditures
Excess (Deficiency) of Revenues
over (Under) Expenditures
Other Financing Sources (Uses):

Transfers {n
Transfers Out
l"otal Other Financing
Sources (Uses)
Net Change in Fund Balances
Fund Balances - July 1, 2020
Fund Balances - June 30. 2021
Sliecial RevenueFunds
Public Safety
Realigni'nent
IT
Reserve
Measure L
Sales Tax SB- I Roads
Disability Access
and Education
47 $ 726 $
445,842 145.031
47 446,568 145,031
1,919 6,766 16,342
1,919 6,766 16,342
(1,872) 439,802 128,689
10,000
35,722
35,722
10,000
8,128
9 8,347
10 6,475 $
439.802 128,689
400,622 190,876
840,424 $ 319,565 $
l,443
1,443
1,443
1,443
1,458
2,901
72 CFD
16,117
16,il7
Covid
Recovery
Capital Project Fuiids Total
Parks Nonmajor
Municipal Developincnt Governmental
Transporta(ion Park Iinpact Fees Funds
$ - $ 612 $ 786 $ 4,417
iH,119 )49.975 481.995
947,725
284,967
981
114,731 150,761 1,720,085
1,078
1,078
15,039
34,343
34,343 2,139
2,139 2,138 4,277
9,910
253,665
59,370
2, 138 327,222
(34,343) 112,592 148,623 1,392,863
(1,500)
10,000
(93.692)
(1,500)
13,539
16,290
29,829 $
(83,692)
(34,343) 112,592 148.623 1,309,171
(260,360) 414,316 529,864 3,844,585
$ (294,703) $ 526,908 $ 678,487 $ 5,153,756
73 CITY OF HUGHSON

GAS TAX SPECIAL REVENUE FUND

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES

IN FUND BALANCE - BUDGET AND ACTUAL
For the Fiscal Year Ended June 30, 2021
Revenues:

Interest
Intergovernmental
Total Revenues
Expenditures:

Cui'rent:

Public Works
Total Expenditures
Excess (Deficiency) of Revenues
Over (Under) Expenditures
Other Financing Sources (Uses):

Transfers Out
Total Other Financing
Sources (Uses)
Net Change in Fund Balance
Fund Balance - July 1, 2020
Fund Balance - June 30, 2021
Final
Budget
$ 100
193,211
193,311
Variance with
Actual Final Budget
Amount Positive (Negative)
$ 203 $ 103
164,189 (29,022)
164,392 (28,919)
121,000
121,000
72,311
(46,600)
(46,600)
25,711
259,451
285,162 $
85,321
85,321
35,679
35,679
79,071 6,760
(46,600)
(46,600)
32,471
259,451
291,922 $
6,760
6,760
74 CITY OF HUGHSON

VEHICLE ABATEMENT SPECIAL REVENUE FUND

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES
IN F[JND BALANCE - BUDGET AND ACTUAL
For tlie Fiscal Year Ended June 30, 2021
Final
Budget
Actual
Amount
Variance with
Final Budget
Positive (Negative)
Revenues:

Charges For Services
Total Revenues
15,000 $
15,000
21,740 $
21,740
6,740
6,740
Other Financing Sources (Uses):

Transfers Out (14,400) (10,000) 4,400
Total Other Financing
Sources (Uses) (14,400) (10,000) 4,400
Net Change in Fund Balance 600 11,740 11,140
Fund Balance - July 1, 2020 29,294 29,294
Fund Balance - June 30, 2021 29,894 $ 41,034 $ 11,140
75 CITY OF HUGHSON

CDBG REHAB SPECIAL REVENUE FUND

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES

IN FUND BALANCE - BUDGET AND ACTUAL
For the Fiscal Year Ended June 30, 2021
Final
Budget
Actual
Amount
Variance with
Final Budget
Positive (Negative)
Revenues:

Interest
Other Revenue
Total Revenues
300 $ 576 $
981
276
981
300 1,557 1,257
Net Change in Fund Balance 300 1,557 1,257
Fund Balance - July 1, 2020 583,044 583,044
Fund Balance - June 30, 2021 583,344 $ 584,601 $ 1,257
76 CITY OF HUGHSON

COMMUNITY ENHANCEMENT SPECIAL REVENUE FUND

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES

IN FUND BALANCE - BUDGET AND ACTUAL
For the Fiscal Year Ended June 30, 2021
Final
Budget
Actual
Amount
Variance with
Final Budget
Positive (Negative)
Revenues:

Interest
Charges For Services
Total Revenues
22,176
22,176
264 $
54,386
54,650
264
32,210
32,474
Expenditures:

Public Works
Total Expenditures
2,139
2,139
(2,139)
(2,139)
Net Change in Fund Balance 22,176 52,511 30,335
Fund Balance - July 1, 2020 152,278 152,278
Fund Balance - June 30, 2021 174,454 $ 204,789 $ 30,335 77 CITY OF HUGHSON

LOCAL TRANSPORT ATION SPECIAL REVENUE FUND

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES

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

Current:

Public Works $ 20,000 20,000
Total Expenditures 20,000 20,000
Net Change in Fund Balance (20,000) 20,000
Fund Balance - July 1, 2020 64,890 64,890
Fund Balance - June 30, 2021 $ 44,890 $ 64,890 $ 20,000 78 CITY OF HUGHSON

STORM DRAIN SPECIAL REVENUE FUND

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES

R FUND BALANCE - BUDGET AND ACTUAL
For the Fiscal Year Ended June 30, 2021
Final
Budget
Actual
Amount
Variance with
Final Budget
Positive (Negative)
Revenues:

Interest
Charges for Services
Total Revenues
200 $
67,276
67,476
750 $
161,955
162,705
550
94,679
95 ,229
Expenditures:

Current:

Public Works
Total Expenditures
2,139
2,139
(2,139)
(2,139)
Net Change in Fund Balance 67,476 160,566 93,090
Fund Balance - July 1, 2020 495,986 495,986
Fund Balance - June 30, 2021 563,462 $ 656,552 $ 93,090 79 CITY OF HUGHSON

SLESF SPECIAL REVENUE FUND

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES

IN FUND BALANCE - BUDGET AND ACTUAL
For the Fiscal Year Ended June 30, 2021
Final
Budget
Actual
Amount
Variance with
Final Budget
Positive (Negative)
Revenues:

Interest
Intergoveri'imental
Total Revenues
200 $
150,000
150,200
453 $
170,923
171,376
253
20 ,923
21 ,176
Expenditures:

Current:

Public Safety
Total Expenditures
185,960
185,960
9,910
9,910
176,050
176,050
Net Change in Fund Balance (35,760) 161,466 197,226
Fund Balance - July 1, 2020 307,003 307,003
Fund Balance - June 30, 2021 271,243 $ 468,469 $ 197,226 80 CITY OF HUGHSON

LIGHTING AND LANDSCAPING SPECIAL REVENUE FUND

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES

IN FUND BALANCE - BUDGET AND ACTUAL
For the Fiscal Year Ended June 30, 2021
Revenues:

Special Assessments
Total Revenue
Expenditures:

Current:

Public works
Total Expenditures
Excess (Deficiency) of
Revenues Over (Under)
Expenditures
Other Financing Sorirces (Uses)
Transfers Out
Total Other financing
Sources (Uses)
Net Change in Fund Balance
Fund Balance - July 1, 2020
Fund Balance - June 30, 2021
Variance witli
Final Actual Final Budget
Budget Amount Positive (Negative)
$ 177,657 $ 178,712 $ 1,055
177,657 178,712 1,055
184,047
l 84,047
128,287
128,287
55,760
55,760
(6,390) 50,425 56,815
(21,121) (20,746') 375
(21,121)
(27,511)
177,285
(20,7 46)
29,679
177,285
375
57,190
$ 149,774 $ 206,964 $ 57,190
81 CITY OF HUGHSON

BENEFIT ASSESSMENT SPECIAL REVENUE FUND

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES

IN FUND BALANCE - BUDGET AND ACTUAL
For the Fiscal Year Ended June 30, 2021
Revenues:

Special Assessments
Total Revenue
Final
Budget
$ 101,309
101,309
Expenditures:

Current:

Public Works
Total Expenditures
128,798
128,798
Excess (Deficiency) of
Revenues Over (Under)
Expenditures (27,489)
Other Financing Sources (Uses)
Transfers Out (16,346)
Total Other financing
Sources (Uses) (16,346)
Variance with
Actual Final Budget
Amount Positive (Negative)
$ 90,138 $ (11,171)
90,138 (11,171)
34,701
34,701
94,097
94,097
55,437 82,926
(14,846) 1,500
(14,846) 1,500
Net Change in Fund Balance
Fund Balance - July 1, 2020
Fund Balance - June 30, 2021
(43,835) 40,591
249,583 249,583
$ 205,748 $ 290,174 $
84,426
84,426
82 CITY OF HUGHSON

TRENCH CUT SPECIAL REVENUE FUND

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES

IN FUND BALANCE - BUDGET AND ACTUAL
For the Fiscal Year Ended June 30, 2021
Final
Budget
Actual
Amount
Variance witli
Final Budget
Positive (Negative)
Revenues:

Charges for Services
Total Revenue
115 $
115
117 $
117
Net Cliange in Fund Balance 115 117
Fund Balance - July 1, 2020 2,977 2,977
Fund Balance - June 30, 2021 3,092 $ 3,094 $
83 CITY OF HUGHSON

IT RESERVE SPECIAL REVENUE FUND

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES

IN FUND BALANCE - BUDGET AND ACTUAL
For the Fiscal Year Ended June 30, 2021
Revenues:

Interest
Total Revenue
Expenditures:

Capital Outlay
Total Expenditures
Excess (Deficiency) of
Revenues Over (Under)
Expenditures
Other Financing Sources (Uses)
Transfers In
Total Other financing
Sources (Uses)
Net Change in Fund Balance
Fund Balance - July 1, 2020
Fund Balance - June 30, 2021
Final
Budget
Variance witli
Actual Final Budget
Amount Positive (Negative)
$ 47 $ 47
47 47
10,000
10,000
1,919
1,919
8,081
8,081
(10,000) (1,872) 8,128
15,000 10,000 (5,000 €
15,000
5,000
98,347
$ 103,347 $
10,000 (5,000)
8,128 3,128
9 8,347
10 6,475 $ 3,128
84 CITY OF HUGHSON

MEASURE L SALES TAX SPECIAL REVENUE FUND

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES
IN FtJND BALANCE - BUDGET AND ACTUAL
For tlie Fiscal Year Ended June 30, 2021
Final
Budget
Actual
Amount
Variance with
Final Bridget
Positive (Negative)
Revenues:

Interest
Intergovernmental
Total Revenues
305,798
305,798
726 $
445,842
446,568
726
140,044
140,770
Expenditures:

Capital Outlay
Total Expenditures
7,560
7,560
6,766
6,766
794
794
Net Change in Fund Balance 298,238 439,802 141,564
Fund Balance - July 1, 2020 400,622 400,622
Fund Balance - June 30, 2021 698,860 $ 840,424 $ 141,564 85 CITY OF HUGHSON
SB-1 ROADS SPECIAL REVENUE FUND

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES
IN F[JND BALANCE - BUDGET AND ACTUAL
For the Fiscal Year Ended June 30, 2021
Final
Budget
Actual
Amount
Variance with
Final Budget
Positive (Negative)
Revenues:

Intergovernmental
Total Revenues
127,173 $
127,173
145,031 $
145,031
17,858
17,858
Expenditures:

Capital Outlay
Total Expenditures
116,916
116,916
16,342
16,342
100,574
100,574
Net Change in Fund Balance 10,257 128,689 118,432
Fund Balance - July 1, 2020 190,876 190,876
Fund Balance - June 30, 2021 201,133 $ 319,565 $ 118,432 86 CITY OF HUGHSON

DISABILITY ACCESS AND EDUCATION
SCHEDULE OF RF,VENUES, EXPENDffURES, AND CHANGES
IN F[JND BALANCE - BUDGET AND ACTUAL
For the Fiscal Year Ended June 30, 2021
Final
Budget
Actual
Amount
Variance witli
Final Budget
Positive (Negative)
Revenues:

Charges for Services
Total Revenue
1,050 $
1,050
1,443 $
1,443
Net Change in Fund Balance 1,050 1,443 393
Fund Balance - July 1, 2020 1,458 1,458
Fund Balance - June 30, 2021 2,508 $ 2,901 $ 393
87 CITY OF HUGHSON
TRANSPORTATION CAPITAL PROJECTS F{JND

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES

IN FUND BALANCE - BUDGET AND ACTUAL
For the Fiscal Year Ended June 30, 2021
Revenues:

Intergoverni'nental
Total Revenues
Expenditures:

Capital Outlay
Total Expenditures
Net Change in Fund Balance
Fund Balance (Deficit) - July 1, 2020
Fund Balance (Deficit) - June 30, 2021
Final
Budget
Actual
Amount
Variance with
Final Budget
Positive (Negative)
$ 1,000,042 $
1,000,042
(1,000,042)
(1,000,042)
1,000,042
1,000,042
34,343
34,343
965,699
965,699
(34,343) (34,343)
(260,360) (260,360)
$ (260,360) $ (294,703) $ (34,343)
88 CITY OF HUGHSON

MUNICIP AL PARK CAPIT AL PROJECTS FUND

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES

IN FUND BALANCE - BUDGET AND ACTUAL
For the Fiscal Year Ended June 30, 2021
Final
Budget
Actual
Amount
Variance with
Final Bridget
Positive (Negative)
Revenues:

Interest
Charges for Services
Total Revenues
500 $
43 ,802
44 ,302
612 $
114,119
114,731
112
70,317
70,429
Expenditures:

Current:

Parks and Recreation
Total Expenditures
2,139
2,139
(2,139)
(2,139)
Net Change in Fund Balance 44,302 112,592 68,290
Fund Balance - July 1, 2020 414,316 414,316
Fund Balance - June 30, 2021 458,618 $ 526,908 $ 68,290 89 CITY OF HUGHSON

PARKS DEVELOPMENT IMPACT FEES CAPIT AL PROJECTS FUND

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES

IN FUND BALANCE - BUDGET AND ACTUAL
For the Fiscal Year Ended June 30, 2021
Final
Budget
Actual
Amount
Variance with
Final Budget
Positive (Negative)
Revenues:

Interest
Charges for Services
Total Revenues
500 $
58 ,674
59 ,174
786 $
149,975
150,761
286
91,301
91,587
Expenditures:

Current:

Parks and Recreation
Total Expenditures
2,138
2,138
(2,138)
(2,138)
Net Change in Fund Balance 59,174 148,623 89,449
Fund Balance - July 1, 2020 529,864 529,864
Fund Balance - June 30, 2021 589,038 $ 678,487 $ 89,449 90 NONMAJOR PROPRIET ARY FUNDS

PROPRIET ARY FUNDS
Proprietary funds are used to account for operations that are financed and operated in a manner similar to private business enterprises - for these funds, it is the intent of the City Council that the costs of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges.

Community Center Operations - This fund is used to account for revenues and expenses associated with the maintenance and operations of the City's Community Centers.

USF Community Center - This fund is used to account for funds designated for maintenance and operations of the City's Community Centers.
91 CITY OF HUGHSON

NONMAJOR PROPRIET ARY FUNDS
COMBiNING ST ATEMENT OF NET POSITION
June 30, 2021
Assets
Current Assets:

Cash and Investments
Accounts Receivable
Total Current AsSets
Noncurrent Assets:

Capital Assets:

Land
Buildings
Less:

Accumulated Depreciation
Total Noncurrent Assets
Total Assets
Enterprise Funds
Community USF
Center Community
Operations Center
Fund Fund
12,215 $
12,215
1,199
1,199
105,073
725,283
(543,962)
286,394
298,609 1,199
Total
Nonma3or
Enterprise
Funds
12,215
1,199
13,414
105,073
725,283
(543,962)
286,394
299,808
Liabilities
Current Liabilities'
Accounts Payable
Due to Other Funds
Deposits Payable
Total Current Liabilities
Total Liabilities
Net Position
Net Investment in Capital ASSetS
Unrestricted
Total Net Position
1,090
5,347
6,437
6,437
286,394
5,778
$ 292,172 $
259
1,214
l,473
1,473
(274)
(274) $
1,349
1,214
5,347
7,910
7,910
286,394
5,504
291,898
92 CITY OF I-t[iGHSON
NONMAJOR PROPRlETAR'i" Fl)NDS
COMB{NING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION FOR THE FISC AL YEAR ENDED JUNE 30, 2021
Operating Revenues
C!iarges for Services
Total Operating Revenues
Operating Expenses
Administrative
Maintenance
Depreciation
Total Operating Expenses
Operating Income (Loss)
Income (Loss) Bet'ore Transfers
Transfers
Transfers ln
Transfers Out
Changes in Net Position
Enterprise Funds
Community USF
Center Community
Operations Center
Fuim Fund
4,210 $
4,210
4,526
4,73 i
24,176
33,433
(29,223)
(29,223)
7,500
(21,723)
14,467 S
l4,467
4,581
300
4,881
9,586
9,586
(7,620)
1,966
Total
Nonmajor
Enterprise
Funds
18,677
18,677
9,107
5,031
24,176
38,314
(19,637)
(19,637)
7,500
(7,620)
(tg,757)
Net Position - Beginning of Fiscal Year
Net Position - End of Fiscal Year
313,895 (2,240) 311,655
$ 292,172 $ (274) $ 291,898
93 CITY OF HUGHSON

NONMAJOR PROPRIET ARY FUNDS

COMBINING STATEMENT OF CASH FLOWS
FOR THE FISCAL YEAR ENDED JtlNE 30, 2021
Enterprise Fuims
Cominunity USF
Center Community
Operations Center
Fuim Fund
Total
Nonmajor
Enterprise
Funds
CASH FLOWS FROM OPERATING ACTIWTIES:

Casli Received from Users
Casli Payments to Suppliers and Contractors
Net Cash Provided (Used) By Operating Activities
CASH FLOWS FROM NONCAPIT AL F[NANCING ACTMTIES
$ 5,710 $
(9,651)
(3,941)
Transfers in (out)
Interfund Borrowing
7,500
Net Cas!i Provided (Used) By Noncapital Financing Activities

NET INCREASE (DECREASE) IN CASH AND CASH

EQUIVALENTS
CASH AND CASH EQUIV ALENTS, BEG[NNING OF FISCAL YEAR
CASH AND CASH EQUIV ALENTS, END OF FISCAL YEAR $
7,500
3,559
8,656
12,215 $
13,268 $
(5,087)
8,181
(7,620)
(56})
(8,181)
18,978
(14,738)
4,240
(120)
(561)
(681)
3,559
8,656
$ 12,215
Reconciliation to Statement of Net Position:

Casli and Casli Equivalents
CASH FLOWS FROM OPERAnNG ACnVlnES:

Operating Income (Loss)
Adjustment to Reconcile Operating Income
(Loss) to Net Cash Provided (Used) by Operating
Activities:

Depreciation Expense
Clianges in Assets and Liabilities:
(Increase) Decrease in Accounts Receivable
mcrease (Decrease) in Accounts Payable
mcrease (Decrease) in Deposits Payable
Total Adjustments
Net Cash Provided (Used) By Operating Activities
$ 12,215 $ $ 12,215
$ (29,223) $ 9,586 $ (19,637)
24, 176
500
(394)
1,000
2 5,282
$ (3,941) $
(1,199)
(206)
(1,405)
8,181 $
24,176
(699)
(600)
1,000
23,877
4,240
94 CITY OF :ffUGHSON

MANAGEMENT REPORT
AND

AUDITOR'S COMMUNICATION LETTER
June 30, 2021

CITY OF HUGHSON
June 30, 2021

TABLE OF CONTENTS
Transmittal Letter.

Required Communication
Independent Audttor's Report on Internal Control over Financial Reporting and on Compliance and Ot}ier Matters Based on an Audit of Financial Statements Performed in Accordance with Goveriuneitt Auditing Standards.

Current Year Recommendations:

Other Matters:
2021-1 Lack of control over year end closing.
.1
.3
5 .7
Status of Prior Year Recommendations. .8

PARTNERS

RONALD A LEW, CPA

CRAIG A HARTZHEIM CPA
HADLEY Y Hul, CPA

ALEXANDER C HOM CPA

ADAM V GUISE, CPA

TRAVIS J HOLE, CPA

MOSS, LEVY & HARTZHEIM LLP
CEt?TIFIED PUBLIC ACCOUNTANTS

COMMERCIAL ACCOUNTING & TAX SERVICES
9465 WILSHIRE sivo., 3RDFLOOR
BEVERLY HILLS, CA 90212
TEL: 310.670.2745
FAX: 310.670.1689
www.mlhcpas.com

GOVERNMENTAL AUDIT SERVICES
5800 HANNUM AVE., SUITE E
CLILVER CITY CA 90230
TEL: 310 670.2745
FAX: 310.670.1689
www.mlhcpas.com
April 28, 2022
Members of the City CounciI
City of Hughson
Hughson, California
In planning and performing our audit of the financial statements of the City of Hughson (City), as of and for the fiscal year ended June 30, 2021, 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, we considered tlie City's internal control over financial reporting (internal control) as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control.

Accordingly, we do not express an opinion on the effectiveness of the City's internal control.

Our consideration of internal control was for the limited pui'pose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be significant deficiencies or material weakness and therefore, there can be no assurance that all such deficiencies have been identified. However, as discussed below, we identified certain deficiencies in internal control that we consider to be significant deficiencies.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the not'mal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. We did not identify any deficiencies in intemal control that we consider to be material weaknesses. However, we did identify deficiencies in internal control that we consider to be significant deficiencies.

A significant deficiency is a deficiency, or a combination of deficiencies, in interna) control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. We did not note any deficiencies that we consider to be significant deficiencies in internal control. However, we did note certain other matters that we feel should be brought to the attention of management and the Council.

The City's written responses to the findings identified in our audit are described in the current year recommendations section. We did not audit the City's responses and, accordingly, we express no opinion on them.

In addition, we would be pleased to discuss the recommendations in further detail at your convenience, to perform any additional study of these matters, or to assist you in implementing these recommendations. l
OFFICES: BEVERLY HILLS CULVER CITY SANTA MARIA

MEMBER AMERICAN INSTITUTE OF C P A 'S CALIFORNIA SOCIETY OF MUNICIPAL FINANCE OFFICERS CALIFORNIAASSOCIATION OF SCHOOL BUSINESSOFFICIALS We have included in this letter a summat'y of communication with the members of tlie City Council as required by professional auditing standards. We would like to thank the City's management and staff for the couitesy and cooperation extended to us during the course of our engagement. The accompanying communications and recommendations are intended solely for the information and use of management, the members of the City Council, and others within the City, and is not intended to be and should not be used by anyone other than these specified parties.
q, x,<-7Vd's""

MOSS, LEVY & HARTZHEIM, LLP
Culver City, CA
2 PARTNERS

RONALD A LEW CPA

CRAIG A HARTZHEIM, CPA

HADLEY Y HUI CPA

ALEXANDER C HOM, CPA

ADAM V GUISE, CPA

TRAVIS J HOLE, CPA
April 28, 2022
Members of the City Council
City of Hughson
Hughson, California

MOSS, LEVY & HARTZHEIM LLP

CERTIFIED PUBLIC ACCOUNTANTS

COMMERCIAL ACCOUNTING & TAX SERVICES
9465 WILSHIRE BLVD., 3' FLOOR
BEVERLY HILLS, CA 90212
TEL: 310.670.2745
FAX: 310.670.1689
www.mlhcpas.com

GOVERNMENTALAUDITSERVICES
5800 HANNuM AVE. SUITE E
CULVER CITY CA 90230
TEL: 310.670.2745
FAX: 310.670.1689
www.mlhcpas.com
We liave audited the financial statements of tlie governmental activities, the business type activities, each major fund, and the aggregate remaining information of tlie City of Hughson (City) for the fiscal year ended June 30, 2021.

Professional standards require that we provide you with the information about our responsibilities under auditing standards generally accepted in the United States of America, Government Auditing Standards, and OMB Circular A-133 as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated August 24, 2021. Professional standards also require that we communicate to you the following infonriation related to our audit.

Significant Audit Findings
Qualitative AspectsofAccountingPractices
Accounting estimates are an integral pait of the financial statements prepared by management and are based on manageinent's knowledge and experience about past and cui'rent events and assumptions about fuhire events.

Certain accounting estimates are paiticularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the City's financial statements were:

Management's estimate of the funding progress for CALPERS is based on CALPERS' estimate. The estimated historical cost of capital assets, annual depreciation and the estimated useful life of the capital assets were based on historical data, industry guidelines, and an outside consultant whicl'i was hired by the City in a previous fiscal year.

We evaluated the key factors and assumptions used to develop these estiinates in determining that they are reasonable in relation to the financial statements taken as a whole.

Difficulties Encounteredin Peiforining theAudit
We encountered no significant difficulties in dealing with management in perfotming and completing our audit.

Corrected and Uncorrected Misstaten'ients
Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial, and communicate them to tl'ie appropriate level of management. All adjusting entries that were proposed as a result of audit procedures were corrected by management. These included entries to adjust capital assets, long term debt, fund balance, accounts payable and accounts receiyable. 3 OFFICES: BEVERLY HILLS CULVER CITY SANTA MARIA
MEMBERAMERIC:ANINSTITuTEOFCP.A'S CALIFORNIASOCIETYOFMUNICIPAlFINANCEOFFICERS CALIFORNIAASSOCIATIONOFSCHOOLBUSINESSOFFCIALS Disagreeinents with Management
For purposes of this letter, professional standards define a disagreement with management as a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financia) statements or the auditor's report. We are pleased to report that no such disagreements arose during the course of our audit.

Management Representations
We have requested certain representations from management that are included in tl'ie management representation letter dated April 28, 2022.

Management Consultations with Other IndependentAccovmtants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a "second opinion" on ceitain situations. If a consultation involves application of an accounting principle to t)ie City of Hughson's financial statements or a determination of the type of auditor's opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants.

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

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

This information is intended solely for the information and use of the members of the City Council and Management of the City and is not intended to be and should not be used by anyone other than these specified parties.

Very truly yours,
%'psx, V h&[!"""'

MOSS, LEVY & HARTZHEIM, LLP
Cuiver City, CA
4 PARTNERS

RONALD A LEVY CPA

CRAIG A HARTZHEIM, CPA

HADLEY Y HUI, CPA

ALEXANDER C HOM, CPA

ADAM V GUISE, CPA

TRAVIS J HOLE, CPA

MOSS, LEVY & HARTZHEIM LLP
Ca?TIFIED PUBLIC ACCOUNTANTS

COMMERCIAL ACCOU NTING & TAX SERVICES
9465 WILSHIRE BLVD. 3'D FLOOR
BEVERLY HILLS CA 90212
TEL: 310.670.2745
FAX: 310.670.1689
www.mlhcpas.com

GOVERNMENTALAUDITSERVICES
5800 HANNuM AVE., SUITE E
CULVER CITY CA 90230
TEL: 310.670.2745
FAX: 310.670.1689
www.mlhcpascom

INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANICAL REPORTING

AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL ST ATEMENTS PERFORlViED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Members of the City CounciI
City of Hughson
Hughson, Califomia
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the govemmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Hughson (City), as of and for the fiscal year ended June 30, 2021, and the related notes to the financial statements, which collectively comprise tlie City's basic financial statements, and have issued our report thereon dated April 28, 2022.

Internal Control Over Financial Reporting
In planning and perfomiing our audit of the financial statements, we considered the City's inten'ial control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we do not express an opinion on the effectiveness of t)ie City's internal control.

A deficienc)i in internal control exists when the design or operation of a control doesnot allow managementor employees, in the normal course of perfoi'ming tlieir assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements wil) not be prevented,or detectedand correctedon a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in intemal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of intemal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that inight be material weaknesses or significant deficiencies. We did not note any deficiencies that we consider to be significant deficiencies in inten'ial control.

However, material weaknesses or significant deficiencies may exist that have not been identified. However, we did note certain other matters that we feel should be brought to the attention of management and the Council with regards to internal contro) over financial repoiting.

Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards. 5 OFFICES: BEVERLY HILLS CULVER CITY SANTA MARIA
MEMBERAMERICANINSTITUTEOFCPA'S CALIFORNIASOCIETYOFMUNICIPALFINANCEOFFICERS (.ALIFORNIAASSOCIATIONOFSCHOOLBUSINESSOFFICIALS Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral pait of an audit performed in accordance with Govermnent Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
'V"'t % saJ"aAl r3'5".s
Moss, Levy & Hartzheim, LLP
Culver City, California
April 28, 2022
6 CURRENT YEAR RECOMMENDATIONS
Other Matters
2021-1 Finding-Lackofcontroloveryearendclosing:

During the review of the year end closing process, it was noted that there is a lack of control over the year end closing process that necessitated audit entries to conect material misstatements.

Effect:

A lack of control over the year end closing process can result in material misstatements of the financial statements that could go undetected. Audit entries were necessary to adjust cash, accounts receivable, loans receivable, long term debt, and fund balance accounts to reconcile with supporting documentation.

Recommendation:

We recommend that the City adopt a formal year end closing process that will prevent material inisstatements of the financial statements.

Manazement's response:

Management agrees with this recommendation and a formal year end closing process will be implemented for the fiscal year ended June 30, 2022.
7 ST ATUS OF PRIOR YEAR RECOMMENDATIONS
Significant Deficiencies
2020-1 Finding-Lackofseg,regationofdutiesovercashreceipts:

During the review of internal controls, it was noted that one staff member is responsible for both preparing the bank reconciliations and reconciling daily cash receipts to the general ledger.

Effect:

A lack of segregation of duties increases the risk that errors and irregularities may occur and go undetected. It could adversely affect the City's ability to initiate, authorize, record, process, or report financial data reliably, which could lead to a misappropriation of funds.

Recommendation:

We recommend that the City ensure that the internal conh'ol deficiencies mentioned above are rectified witli increased segregation of duties and establish a centralized purchasing and receiving position.

Stahis:

Implemented
2020-2 Finding - Lack of segregation of duties over payroll:

During the review of intema) controls, it was noted that one staff member is responsible for entering payroll inforination into tlie computer system, preparing payroll checks, distributing payroll checks, reconciling the payroll bank account, and entering payroll changes. It was also noted that multiple users have access to change payroll rates and no log is kept of changes made.

Effect:

A lack of segregation of duties increases the risk that errors and irregularities may occur and go undetected. It could adversely affect the City's ability to initiate, authorize, record, process or report financial data reliably, which could lead to a misappropriation of funds.

Recommendation:

We recommend that the City ensure tliat the interiial control deficiencies mentioned above are rectified witli increased segregation of duties and establisli a cenh'alized purchasing and receiving position. Also, the City should restrict access to the payroll module and ensure that a log is kept for all adjustinents to wage rates.

Status:

Implemented
Other Matters
2020-3 Finding - Lack of control over year end closing:

During the review of the year end closing process, it was noted that there is a lack of control over the year end closing process that necessitated audit entries to correct material misstatements.

Effect:

Recommendation:

We recommend that the City adopt a formal year end closing process that will prevent material misstatements of the financial statements.

Management's response:

Not implemented, see Finding 2021-1.
8 Meeting Date: June 13, 2022
Subject: Update on the Well 7 Replacement Project Schedule Delay Enclosures: Attachment A - Letter from Cort Abney, P.E., Shoreline Environmental Engineering
Attachment B - Letters from various suppliers and
vendors
Presented By: Merry Mayhew
Approved By: _______________________________
City Manager
Staff Recommendation:

Accept an update on the Well 7 Replacement Project schedule delay.

Background and Overview:

The Well 7 Replacement Project (Project) is a four-phase project that includes the construction of a new water well site that will contain a water treatment system, a one-million-gallon concrete storage/blending tank, two wells – wells 9 and 10, and a water distribution pipeline to connect the well sites.

Phase 1 began construction in November 2018 and included improvements to the sewer lift station, underground work, testing, casing, and well drilling/development.

Phase II began construction in August 2019 and included the construction of the one-million-gallon storage tank. Phase III began construction in September 2020 and included the purchase of a water treatment system for the new replacement Well No. 9 and Well No. 10. The vendor will provide professional services with the startup, commissioning, and training of the Hughson operation staff. Phase IV began construction in December 2020 and includes the installation of the water treatment system.

CITY COUNCIL AGENDA ITEM NO. 6.2
SECTION 6: NEW BUSINESS
Discussion:

Phase IV is currently in construction. The original completion date was January 2022; however, with the delays experienced due to the pandemic, the estimated completion date was first extended an additional 5-7 months and is now anticipating further delays to November 2022.

Cort Abney, P.E., is the City of Hughson contracted water engineer who is managing the Project for the City. Mr. Abney stays in close contact with the construction crews, works closely with the State Waterboard to ensure reporting is completed, the project stays on schedule, and reviews and approves necessary change orders.

Attachment A is a letter from Mr. Abney detailing the delay of project completion to November 2022. In this letter, Mr. Abney explains that the new water supply plant is a highly sophisticated water treatment and pumping facility with processes controlled by a central computer that makes decisions based on various sensors found throughout the plant that measure pressure, water levels, chemical concentrations, flows, temperatures and other vital signs necessary to produce and deliver clean drinking water.

The electrical panels are comprised of many electrical components that are scheduled to come from manufacturers from around the world. The control panels cannot be assembled and tested until all of the components have been received and there are a number of electrical components on backorder causing this project disruption.

Attachment B includes letters and emails from the electrical panel fabricator and various suppliers and vendors describing the supply chain challenges they are experiencing.

As stated in Mr. Abney’s letter, he has asked the Contractor to identify any construction items that can be completed before the electrical panels arrive, even if it is less efficient for the Contractor. However, as facility performance, reliability, and longevity are the primary objectives, he remains cautious in urging the Contractor to accelerate work as we do not want to sacrifice the quality or performance of the facility.

Mr. Abney has talked to the State Waterboard regarding these latest delays and the State has agreed this is occurring over a wide variety of projects they oversee and recommended that the City submit a 3-6 month schedule extension request.

Quarterly reports are submitted to the State with the Project status. The latest report available is as of the end of March 2022 and shows that 75% of the construction has been completed for Phase IV and the Contractor has invoiced 65% of the project.

Fiscal Impact:

There is no fiscal impact to accepting the Well 7 Replacement Project schedule update. The estimated cost of the Well 7 Replacement Project totals $12.8 million which will be funded by approximately $9.6 million State grant and $3.2 million in a State loan.

Attachment A
June 2, 2022
Merry Mayhew, City Manager
City of Hughson
7018 Pine Street
Hughson, CA 95326 SHORELINE

ENVIRONMENTALENGINEERING
Subject: Hughson Well #7 Replacement Project Schedule Update Dear Ms. Mayhew:

The latest schedule submitted by the Well #7 Replacement (Phase IV) Project Contractor identifies an additional delay of approximately 3 months, with a final completion date of mid-November. The delay is primarily due to problems associated with fabrication of the Project's electrical control panels. The vendor responsible for building the electrical control panels contends it is having difficulty obtaining a small number of electrical components necessary to complete their work. Until the panels are completed and installed, much of the final site electrical work is on hold.

Discussion: The new water supply plant is a highly sophisticated water treatment and pumping facility.

The water plant's processes are controlled by a central computer. The computer makes decisions (turn on/off pumps, add chemicals, backwash filters, fill tanks, send alarms, turn on backup power, etc.) based on signals it receives from numerous "sensors" found throughout the plant that measure pressure, water levels, chemical concentrations, flows, temperatures, and other "vital signs" necessary to produce and deliver clean drinking water.

All of the treatment plant's control systems are found in electrical panels located in the control building.

Combined, the panels take up about 30 feet of wall space. The panels are designed, assembled, tested, and certified (Underwriters Laboratory) in an off-site factory as a complete unit, then shipped to the plant for installation. Each electrical panel is comprised of countless electrical components (relays, starters, timers, overload protection, switches, indicator lights, etc.), coming from a variety of manufacturers from around the world. Due to the high standards needed to ensure all of the components are reliable and can withstand the rigors of an industrial water plant setting, substitutions are difficult to locate if or when components become unavailable. The control panels cannot be assembled and tested until all components are installed.

Currently there are a small number of electrical components on backorder causing the project schedule ns r ese parts ut success.

According to the electrical panel fabricator, they have three large warehouses full of panels that are 90% to 95% completed, waiting for the final pieces to finish and ship. (Of note, the fabricator does not get paid until the panels are shipped). The panel fabricator has guaranteed the project's general contractor that the panels will take priority once all the parts are on-hand, currently anticipated as early August, 2022.

In response, we have asked the Contractor for additional information to justify the recent schedule delay. Attached are letters and emails from the electrical panel fabricator, Tesco Controls of Sacramento, and various suppliers and vendors describing the supply chain challenges they are experiencing. We have also asked the Contractor to identify any Construction items that can be 4122 Cameron Park Dr, Ste. IOO Cameron Park, Ca 95682 916180613970 completed before the electrical panels arrive, even if it is less efficient for the Contractor. At the same time, we remain cautious while urging the Contractor to accelerate work, should it potentially sacrifice quality or performance ofthe completed facility. Ultimately, facility performance, reliability, and longevity are our primary objectives.

Sincerely,
Cort Abney, P.E.

Shoreline Environmental Engineering
attachments
N!5d!jg' /,,T,,mtoh,,,m
CONTROLS /7
Corporate Office
8440 Florin Road, Sacramento, CA 95828
p.o. Box 299007, Sacramento, CA 95829
PH: 916.395.8800 FX: 916.429.2817
Attachment B
June 1, 2022
Re: Supply Chain Issues
[)ear Gary,
I want to reach out to let you know I am personally working on the iSSues your projects are facing due to supply chain delays. I attend weekly Production meetings where we create a plan for the projects that are affected. Unfortunately, that list of projects currently sits at about 80% of all in-house projects. The biggest issue we are dealing with is the lack of information the suppliers are providing, as our OEM's will no longer provide updated ship dates.

We have brought on a consultant/specialist to help find solutions globally. As the CEO of Tesco I take this issue very seriously and will do all I can to help resolve this.

Sincerely,

TESCO CONTROLS, LLC
Shain Thomas
CEO
[email protected]
File Ref. OultookRSGNGE4AlGalsway Pac!fic Leiler dolx
F4TN
Powering Business Worldwide
Marcli 28, 2022
Todd English
TESCO Controls Inc.
8440 Florin Road
Sacramento CA 95828
Dear Todd,
Eaion Corporation
560 N 541hSt
Suite 1
Chandler, AZ 85226
I'd like to provide yori with an update on Eaton's cui'rent operational status and your order referenced further below. Supply chaiii (electronics, metals, resins, allocations in each area), logistics, and labor disruptions contimie to provide cliallenges for manufacturers across tlie electrical indushy. We expect this to continue for a large part of 2022. Eaton had made and continues to make significant investments to increase capacity, improve throughput and grow our supply chain elasticity. Eaton continues to qualify new suppliers, utilize "spot buys" for critical material, and employ pren'iium freight and expedited shipping laiies to maximize available product for our partners and customers. Tliese inveshnents and actions are helping, but due to the contimiation of challenging conditions and strong market demand, lead times continue to be extended across many Eaton product grorips.

Our cunent efforts are focused on delivering product as efficiently as we can under tlie cui'rent circumstances. Because of this, please be aware that we do riot have the flexibility to support expedite reqtiests. While Eaton will continrie to provide as-accurate-as-possible updates 011 lead times, unexpected clianges are anticipated. We remain committed to providing our customers, cl'iannel partners and sales teams witli tlie most rip-to-date and accurate information available wliile managing expectations tliat lead times may continue to be extended or changed as the market evolves. Several of Eaton's plants, including panelboard and switcliboard sites, are conducting scheduling resets to provide more accurate lead time infomiation. Please note that customer service responses may be delayed temporarily as these updates occur over the next few weeks. We recommend adjusting any project planning timelines you may have to reflect these extended lead times, and that you please remain in close contact with your local Baton sales representative for any updates or clianges.

Due to the current challenges, see below for the cui'ent shipping schedule for listed items:

Baton GO#: MSFOO10759
* Item 014 Pad Mounted Power Transfonner "MT XFMR" witli Mild Steel or Stainless Steel Tank.

Current lead times after release for manufactiire: 63-68 weeks.

We recognize the strain this is placing on your schedule and sincerely apologize for the delay. Please be assured that Eaton's recovery plan is focused in the areas above to improve supply across all sliorted and allocated material. We do sincerely appreciate your business and please know tliat Baton will continue to customers require.

Please feel free to reach orit to me if you have any qriestions or worild like to discuss.

Sincerely,
Carl J, Berry
Carl Berty
Vice President, Sales - West Region
[email protected]
Dear Eaton Channel Partner
As we begin the second month of 2022, I'd like to take this opportunity to provide our valued partners with an update on Eaton's current operational status and what you can expect from us in the coming months,
Supply chain disruptions, logistics, and labor challenges continue to provide challenges for manufacturers across the electrical industry. We expect these challenges to continue for a large part of 2022, which is why we have made significant investments to increase capacity, improve throughput, and grow our supply chain elasticity. Eaton continues to qualify new suppliers, utilize "spot buys" for critical material, and employ premium freight and expedited shipping lanes to maximize available product for our partners and customers. These investments and actions are helping, but due to the continuation of challenging conditions, lead times will continue to be extended across many Eaton product groups.

Our current efforts are focused on delivering product as efficiently as we can under the current circumstances. Because of this, please be aware that we do not have the flexibility to support expedite requests. While Eaton will continue to provide as-accurate-as-possible updates on lead times, unexpected changes are anticipated. We remain committed to providing our customers and channel partners with the most up-to-date and accurate information available while managing expectations that lead times may continue to be extended or changed as the market evolves.

Several of Eaton's plants, including panelboard and switchboard sites, are conducting scheduling resets to provide more accurate lead time information. Please note that customer service responses may be delayed as these updates occur over the next several weeks.

We recommend adjusting any project planning timelines you may have to reflect these extended lead times, and please remain in close contact with your local Eaton sales representative for updates on any changes that may be put in place.

Moving forward, Eaton will be providing additional operational and supply chain updates via Distributor Newsline. This publication is sent every-other-month to our channel partners via email. If you are not currently receiving Distributor Newsline, visit Eaton.com/DNL to opt in.

As always, thank you for your partnership and understanding during these unprecedented times.

Will Green
Vice President, Channel
Email from Eaton Corporation to Tesco Controls - Parts on Backorder (llMay22) RE:[EXTERNAL] RE:TescoJob:W-52186iHughsonlPO:236831i EatonGO#:SSR12538091 05/06/2022i 05/11/2022 Townsley, MaikA <[email protected]
To 0 LesliiEvani
CC OlayBudwaleAndreCtocketleMayVang
ThittenderMa+kATotvniliy@Eaton tomit ftonioutimt youroigatuiation (iClK! hirt io downloxdpicturti.Tohelpptottctyou+privag,Outlookpiivehtedautomatitdownloadol ionii pictutti inthii miiiage.

Hi teslie,
Yes,becausethe supply chain Issuesare sowlde-spreadand ever-changingit isvery difficult to get detailed information on eachitem on eachorder asout plantsjust don't havethe bandwidth to handle all of the requeststhat are comingin. However,I didjust receivea communicaUonfrom Portland on this order that might help you:

BothHughsonrtemshavesomecomponentswrthETA'stothePortlandplantwhrcharewelloutsldetheoriglnalESD.Looklngtoseeif thecustomerwantstodosomeshlpshortsontheseRems.

Quickpnnt oftheorrgrnal orderasenteredrsattachedforyourconvenience.

Onitem 001 we ore mrsslngthefollowrng items wlth ETA'sto the Portlandplant osshown. TheQBHW'sseemlike an easyshipshort, but doesthe customerwant us to shlpshort structure 5, which contarnsthe 45kvaXFMR?
@ C1BHW2030-BREAKER-(2)-8/15
* ostiwzo<o-oshsxrr-(i)-i/zz
@ WFT45EOOOKj-45KVAXFMRCORE-COIL-(1)-7/7
Onitem 002 we rire missingkhp%lowrng items wlth ETA'sto the Portlandplant asshown. * COOO5P7HSESKj-5KVAXFMR240X480W/T-(1)-6/21
Pleaseadviseon the shipshort request for item 001.

Thanks- Mark
@Erg:::on
Jarrod Levine
End User Account Manager
P: 1.925.389.7399
[email protected]
November 3'd, 202'l
Marcy Hutchinson
Senior Buyer
Tesco Controls
B440 Florin Road
Sacramento, CA, 95828
Dear Mrs. Hutchinson
Rockwell has released a few statements regarding the impact of the global supply chain disruption on our ability to meet lead times and manufacture certain product lines. Our Senior VP and Chief Supply Chain Officer, Ernest Nicolas summed up the situation well by stating, "Recent market challenges continue to cause uncertainty in our supply chain, but we remain committed to doing everything we can to support our customers." In researching out the unique component shortage leading to delay on your drives, I was unable to get a specific response from the factory for two reasons:

I ) I believe the factory does not want to detail specific manufacturing issues for competitive reasons.
2) On a standard drives order (as opposed to an Engineered Water Solution), there is no specific project manager or engineering assigned to the order. Therefore, when I speak to the factory, they can only provide me generalities affecting their overall manufacturing ability rather than the unique component affecting your specific order.

Mr. Nicolas further stated, "Lead times have been extended on select product lines to drive improved accuracy in the promise dates provided to our customers. We continue to monitor our inventory levels and will adjust lead times as product availability changes. We will do everything we can to reduce lead times as we stabilize supply in our constrained products." Unfortunately, although we have submitted a Delivery Improvement Request on this project that identifies the critical infrastructure nature, the factory lacks the ability to expedite it any do is apologize and promise we are doing everything we can to navigate through these unprecedented challenges. The best Forecasts expect the global supply chain issues to remain through 2023, however, Rockwell has improved our lead time commitments and will continue to improve both our production capacity and communication to minimize further disruption to valued partners like Tesco and our End User community.

Best regards,
t l(/:;'?{(I-,(A/O!['t'a
expanding human possibilityo'
3000 Executive Parkway, San Ramon, CA @ men-sraaiey @ 36;'Qi6%'4Q FactoryTalk ASCO'7eocwlSrologies- ASCO Power Technologies
Pa Box 689
325 Welcome Center Blvd
Welcome, NC 27374
USA
T (800) 800 2726
TO: Our Customers October 8, 2021
FR: Jack McCauley, VP - Sales
Christopher D. Showers, VP - Manufactiiring
RE: Customer Relations
At ASCO Power, we are dedicated to delivering world class critical power solutions for orir customers. We understand that yorir success is our success, and we are passionate about placing our customers first eacli and evei'y day. To tliat end, we want to provide an updateon the cut'rent state of our supply chain-inc)uding a summary of the macro headwinds that continue to impact orir service level performance and the proactive measures and investments we are making to mitigate future impacts to your business and en'ierge stronger.

As theglobal economy emerges from tlie COVID pandemic, renmants both positive and negative remain across all industries. ASCO Power has been met with unprecedented demand for many of our core offers. Tlie fact tliat tlie markets we serve are once again healthy, and our offers contimae to resonate witli our customers, is very encoriraging. However, tliis historic spike in demand, constrained labor availability and global shortages of certain materials have cliallenged our upstream suppliers. All togetlier, tliese factorshave resulted in extended lead times, low stock levels in select product categories, and delays in sliipping in some of our lines of business.

Since the pandemic started, ASCO has taken integral steps to strengtlien resiliency, increase flexibility, and safeguard our supply chain. Within that time period, we bave made significant investments in increasing our production and wareliouse space & capacity across North America. Ill addition, we have increased raw material inventoi'y levels and strengthened and expanded our workforce.

Beyond these strategic investments, we continue to interact collaboratively with our existing suppliers at the liighest levels, are vetting and approving new suppliers to expand our network of partners and leveraging automation. We have taken the initiative to expand our strategy of sourcing from multiple suppliers and regions for several critical parts as a preventive measure for the future. Iuring this time, we are going to tlie furthest extent to assist our suppliers in solving tlieir issues such as raw material shortage, sub supplier relations, and more.

We aclatowledge that the challenges caused by the pandemic are not completely behind us, but we want to assure you that we understand the importance of tackling thet'n head-on due to tlieir critical nahire. As an organization, ASCO Power Tecbnologies continues to remain fitlly devoted to our customers' success. Our #l focus is always our customer satisfaction and on time delivery.

Due to this comtnitt'nent, we transparently provide yori witli this update on tlie challenges facing orir supply cliain, along with tlie As always, we appreciate yorir brisiness, tnist, and partnership! Jack McCauley Christopher D. Showers
OL
Vice President
Sales
Vice President
Manufacturing
Reslticled
Life Is (!)n Schrieider
pElectric

SIEMENS
Name
Department
Phone
E-Mail
[)ate
Slake Shapiro
Partner Sales - CA, NV, and Hl
(469) 367-1150
[email protected]
€15/02/2022
Jacksonville Electric Authority (JEA)
Buckman UV Disinfection System Replacement
Proiect: W-52343X1
Delivery situation for products of Digital Industries (DI) and Smart Infrastructure (81 EP) Dear Tesco Controls on behalf of Jacksonville Electric Authority (JEA) - Current delivery situation
The impact of a whole series of global events - and at the very center of this, the impact of the corona pandemic - has led to massive disruptions, in some cases, to supply chains worldwide over the past two years.

This applies to many industries. The most important events are:

The global chip shortage, e.g. caused by Corona Lockdown-related production interruptions at chip manufacturers in Asia such as Malaysia.

Shiffing supply priorities from producers of semiconductor products and electronic components to consumer goods industries, with the consequence of spontaneous de-commitments to supply commitments and significantly reduced delivery volumes for industrial customers.

The scarcity of base materials and raw materials such as steel, steel panels and electrical sheets Massive restriction of cargo space in international container and air traffic, caused, among other things, b7
o Prolonged airport closures in China as part of the country's strict zero Covid and lockdown policies
o Significant shortage of cargo personnel in u.s. ports and associated massive delays in loading and unloading cargo ships
Just to name a few examples.

These disruptions, some of which are massive, in the world's production and supply chains, have been leading to restrictions in the procurement of precursors and the associated production at Siemens for some time now.

Another factor that has been contributing to an additional tension in the supply situation for some time is a disproportionate increase in demand. At Siemens, for some products this is significantly above the forecasts of e.g. the machine tool manufacturing and automotive industry. As a consequence, this unfortunately means that we cannot deliver some products at the usual delivery times and to the desired extent.

Not only do we monitor these developments intensively and continuously, but we are also in close contact with our partners along the entire supply chain - from our suppliers to our customers and their customers. With a whole series of measures, we are working on keeping the impact of the above-called events as low as possible.

Measures to improve the delivery situation
Siemens is working hard to minimize the impact on our customers as much as possible. To this end, we are implementing a whole series of measures, which should help to improve the situation:
* Siemens bundles demand for raw materials and components, which secures our position as a relevant partner among more than 1,500 strategic suppliers. To this end, we use our global SCM network in more than 60 countries.

We organize the dynamic changes in the supply situations of various suppliers through a number of task forces whose employees are dedicated exclusively to improving the supply situation, including escalation mechanisms that extend to the Managing Board of Siemens and the management boards of the suppliers, if necessary.

Especially in the case of precursors, we intensively qualify and add new suppliers.

We rely on our own digital technologies for production control to optimize delivery times. This gives us transparency about the inventory in real time and enables us to fully digitally produce and plan capacities.

We purchase additional quantities on the international broker markets, as far as there is an offer there.

SCF 05j2020 V13.06 Page 1 of 2

SIEMENS
With the relevant and critical suppliers, especially from the semiconductor sector, we have placed binding orders based on visible demand for the entire calendar year 2022, and in some cases beyond.

We worked on a large number of re-designs in our development to eliminate bottlenecks.

We link the logistics chains of our suppliers and the suppliers of our customers in order to achieve maximum efficiency in procurement in the sense of a logistics ecosystem. To this end, we use the strengths of the various organizations in the sense of maximum possible production in the entire supply chain, right down to the end customer.
* Siemens uses its entire worldwide network of more than 30 factories and plants to respond flexibly to demand in the best possible way for the benefit of our customers.

Unfortunately, despite all our intensive efforts on the supplier side, it is not yet foreseeable when the tense delivery situation in the direction of customers will improve significantly. We are aware that the current situation can have a significant impact on the maintenance of production and the delivery of machines. We very much regret that.

Our principle is always to treat all our customers fairly. Accordingly, we will not let up, intensively on the abovecalled to work on measures to improve our own supplier situation and to communicate any improvements promptly to our customers and to implement improved delivery times. However, due to the current market situation, especially in the entire supplier market, we expect significantly strained supply chains in the coming quarters, which in some cases will lead to significantly longer delivery times.

Once again, the purpose of this letter is to inform you that Siemens is experiencing as a direct result of several key equipment manufacturers' supply chain issues which are severely impacting Tesco Controls ability to procure, assemble, program, test and ship the subject Industrial Control Cabinets.

Following are the various part numbers and lead times experiencing supply chain iSSues responsible for a majority of the delays.

Manufacturer . OA Ship Date/Lead Time
Siemens 6AGal2062BBOO7 AC2
Qty (1 )
I1/02/2021 06/27/2022/200 Working Days
Siemens 6AG1 2062BBOO7 AC2
Qty (1 )
11 /02/2021 06/20/2022/200 Working Days
With Best Regards,
Blake Shapiro
SCF 05/2020 V13.06
found. 2

Page 2 ends

Hughson City CouncilJune 13, 2022

Hughson City Council
June 13, 2022