Imperial Beach City Council
November 20, 2024

City of Imperial Beach
Notes to Financial Statements
June 30, 2024
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Note 10: Pensions (Continued)
The Plan’s provisions and benefits in effect at June 30, 2024 are summarized as follows:

Miscellaneous Plan
Classic Second Tier PEPRA
On or after
Prior to March 9, 2012 but prior On or after
Hire date March 9, 2012 to January 1, 2013 January 1, 2013 Benefit formula 2.7% @ 55 2.0% @ 60 2.0% @ 62
Benefit vesting schedule 5 years service 5 years service 5 years service Benefit payments monthly for life monthly for life monthly for life Retirement age 50 and up 50 and up 52 and up
Monthly benefits, as a % of eligible compensation 2.0% to 2.7% 1.092% to 2.418% 1.0% to 2.5% Required employer contribution rates 15.950% 10.100% 7.680% Safety Plan
Other Safety
Lifeguard Lifeguard Second Tier PEPRA
On or after
Prior to March 9, 2012 but prior On or after
Hire date March 9, 2012 to January 1, 2013 January 1, 2013 Benefit formula 2.0% @ 50 2.0% @ 50 2.7% @ 57
Benefit vesting schedule 5 years service 5 years service 5 years service Benefit payments monthly for life monthly for life monthly for life Retirement age 50 and up 50 and up 50 and up
Monthly benefits, as a % of eligible compensation 2.0% to 2.7% 2.0% to 2.7% 2.0% to 2.7% Required employer contribution rates 21.150% 19.950% 13.540% Fire Fire PEPRA
Prior to On or after
Hire date March 9, 2012 January 1, 2013
Benefit formula 3.0% @ 50 2.7% @ 57
Benefit vesting schedule 5 years service 5 years service Benefit payments monthly for life monthly for life
Retirement age 50 and up 50 and up
Monthly benefits, as a % of eligible compensation 3.00% 2.0% to 2.7% Required employer contribution rates 27.110% 13.540%

City of Imperial Beach
Notes to Financial Statements
June 30, 2024
-61-
Note 10: Pensions (Continued)
Contributions
Section 20814(c) of the California Public Employees’ Retirement Law (PERL) requires that the employer contribution rates for all public employers are determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through CalPERS’ annual actuarial valuation process. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The employer is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. Employer contribution rates may change if plan contracts are amended. Payments made by the employer to satisfy contribution requirements that are identified by the pension plan terms as plan member contribution requirements are classified as plan member contributions. Employer Contributions to the Plan for the fiscal year ended June 30, 2024 were $1,769,672.

The actual employer payments of $1,697,620 made to CalPERS by the City during the measurement period ended June 30, 2023 differed from the City’s proportionate share of the employer’s contributions of $2,240,305 by $542,685, which is being amortized over the expected average remaining service lifetime in the Public Agency Cost-Sharing Multiple Employer Plan.

Net Pension Liability
The City’s net pension liability for the Plan is measured as the total pension liability, less the pension plan’s fiduciary net position. The net pension liability of the Plan is measured as of June 30, 2023, using an annual actuarial valuation as of June 30, 2022 rolled forward to June 30, 2023 using standard update procedures. A summary of principal assumptions and methods used to determine the net pension liability is as follows.

City of Imperial Beach
Notes to Financial Statements
June 30, 2024
-62-
Note 10: Pensions (Continued)
Actuarial Methods and Assumptions Used to Determine Total Pension Liability The collective total pension liability for the June 30, 2023 measurement period was determined by an actuarial valuation as of June 30, 2022, with update procedures used to roll forward the total pension liability to June 30, 2023. The collective total pension liability was based on the following assumptions:

Valuation Date June 30, 2022
Measurement Date June 30, 2023
Actuarial Cost Method Entry Age Actuarial Cost Method
Asset Valuation Method Fair Value of Assets
Actuarial Assumptions:

Discount Rate 6.90%
Inflation 2.30%
Salary Increases Varies by Entry Age and Service
Mortality Rate Table (1) Derived using CalPERS' membership data for all funds
Post Retirement Benefit
Increase
The lesser of contract COLA or 2.30% until
Purchasing Power Protection Allowance floor on
purchasing power applies, 2.30% thereafter.
(1) The mortality table used was developed based on CalPERS-specific data. The probabilities of mortality are based on the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. Mortality rates incorporate full generational mortality improvement using 80% of Scale MP-2020 published by the Society of Actuaries. For more details on this table, please refer to the 2021 experience study report from November 2021 that can be found on the CalPERS website.

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

In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations. Using historical returns of all of the funds’ asset classes, expected compound (geometric) returns were calculated over the next 20 years using a building-block approach. The expected rate of return was then adjusted to account for assumed administrative expenses of 10 Basis points.

City of Imperial Beach
Notes to Financial Statements
June 30, 2024
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Note 10: Pensions (Continued)
The expected real rates of return by asset class are as follows:

Asset Class
Assumed Asset
Allocation Real Return1 2
Global equity - cap-weighted 30.00% 4.54%
Global equity - non-cap-weighted 12.00% 3.84%
Private equity 13.00% 7.28%
Treasury 5.00% 0.27%
Mortgage-backed securities 5.00% 0.50%
Investment grade corporates 10.00% 1.56%
High yield 5.00% 2.27%
Emerging market debt 5.00% 2.48%
Private debt 5.00% 3.57%
Real assets 15.00% 3.21%
Leverage (5.00%) (0.59%)
2 Figures are based on the 2021 Asset Liability Management study. 1 An expected inflation of 2.30% used for this period.

Change of Assumptions
There were no assumption changes in 2023. Effective with the June 30, 2021 valuation date (June 30, 2022 measurement date), the accounting discount rate was reduced from 7.15% to 6.90%. In determining the long-term expected rate of return, CalPERS took into account long-term market return expectations as well as the expected pension fund cash flows. In addition, demographic assumptions and the price inflation assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. The accounting discount rate was 7.15% for measurement dates June 30, 2017 through June 30, 2021, 7.65% for measurement dates June 30, 2015 through June 30, 2016, and 7.50% for measurement date June 30, 2014.

City of Imperial Beach
Notes to Financial Statements
June 30, 2024
-64-
Note 10: Pensions (Continued)
Discount Rate
The discount rate used to measure the total pension liability for PERF C was 6.90%.

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

Subsequent Events
There were no subsequent events that would materially affect the results presented in this disclosure.

Pension Plan Fiduciary Net Position
Information about the pension plan’s assets, deferred outflows of resources, liabilities, deferred inflows of resources, and fiduciary net position are presented in CalPERS’ audited financial statements, which are publicly available reports that can be obtained at CalPERS’ website, at www.calpers.ca.gov. The plan’s fiduciary net position and additions to/deductions from the plan’s fiduciary net position have been determined on the same basis used by the pension plan, which is the economic resources measurement focus and the accrual basis of accounting. Benefits and refunds are recognized when due and payable in accordance with the terms of the plan.

Investments are reported at fair value.

City of Imperial Beach
Notes to Financial Statements
June 30, 2024
-65-
Note 10: Pensions (Continued)
Proportionate Share of Net Pension Liability
The following table shows the Plan’s proportionate share of the net pension liability over the measurement period.

Plan Total
Pension Liability
Plan Fiduciary
Net Position
Plan Net Pension
Liability
Balance at: 6/30/2022 64,882,223 $ 52,743,474 $ 12,138,749 $ Balance at: 6/30/2023 68,309,084 54,771,148 13,537,936
Net Changes during 2022-23 3,426,861 $ 2,027,674 $ 1,399,187 $ Increase (Decrease)
The City’s proportion of the net pension liability was determined by CalPERS using the output from the Actuarial Valuation System and the fiduciary net position, as provided in the CalPERS Public Agency Cost-Sharing Allocation Methodology Report, which is a publicly available report that can be obtained at CalPERS’ website, at www.calpers.ca.gov. The City’s proportionate share of the net pension liability for the total Plan as of June 30, 2023 and 2024 was as follows:

Proportionate Share - June 30, 2023 0.10509%
Proportionate Share - June 30, 2024 0.10852%
Change - Increase (Decrease) 0.00343%

City of Imperial Beach
Notes to Financial Statements
June 30, 2024
-66-
Note 10: Pensions (Continued)
Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate
The following presents the City’s proportionate share of the net pension liability of the total Plan as of the measurement date, calculated using the discount rate of 6.9 percent, as well as what the net pension liability would be if it were calculated using a discount rate that is 1 percentage-point lower (5.9 percent) or 1 percentage-point higher (7.9 percent) than the current rate:

Discount Rate Current Discount Rate Discount Rate
- 1% (5.90%) (6.90%) + 1% (7.90%)
Net Pension Liability / (Asset) 22,828,756 $ 13,537,936 $ 5,911,228 $ Amortization of Deferred Outflows and Deferred Inflows of Resources Under GASB 68, gains and losses related to changes in total pension liability and fiduciary net position are recognized in pension expense systematically over time.

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

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

Net difference between projected
and actual earnings on pension
plan investments
5-year straight-line amortization
All other amounts Straight-line amortization over the expected average remaining service lives (EARSL) of all
members that are provided with benefits (active,
inactive and retired) as of the beginning of the
measurement period
The expected average remaining service lifetime (EARSL) is calculated by dividing the total future service years by the total number of plan participants (active, inactive, and retired) in the Public Agency Cost-Sharing Multiple-Employer Plan (PERF C).

City of Imperial Beach
Notes to Financial Statements
June 30, 2024
-67-
Note 10: Pensions (Continued)
The EARSL for PERF C for the measurement period ending June 30, 2023 is 3.8 years, which was obtained by dividing the total service years of 600,538 (the sum of remaining service lifetimes of the active employees) by 160,073 (the total number of participants: active, inactive, and retired) in PERF C. Inactive employees and retirees have remaining service lifetimes equal to 0. Total future service is based on the members’ probability of decrementing due to an event other than receiving a cash refund.

Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions
As of the start of the measurement period (July 1, 2022), the City’s net pension liability was $12,138,749. For the measurement period ending June 30, 2023 (the measurement date), the City incurred a pension expense of $3,685,318.

As of June 30, 2024, the City has deferred outflows and deferred inflows of resources related to pensions as follows:

Deferred Outflows Deferred Inflows
of Resources of Resources
Changes of assumptions 805,790 $ - $
Difference between expected and
actual experience 819,791 (97,873)
Difference between projected and
actual investment earnings 2,048,064 -
Differences between employer's
Contributions and Proportionate
share of contributions - (1,345,675)
Change in employer's proportion 2,011,511 -
Pension contributions subsequent
to measurement date 1,769,672 -
Total 7,454,828 $ (1,443,548) $

City of Imperial Beach
Notes to Financial Statements
June 30, 2024
-68-
Note 10: Pensions (Continued)
The amounts above are net of outflows and inflows recognized in the 2022-23 measurement period expense. Contributions subsequent to the measurement date of $1,769,672 reported with deferred outflows of resources will be recognized as a reduction of the net pension liability in the upcoming fiscal year. Other amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recognized in future pension expense as follows:

Year Ended Deferred Outflows/
June 30, (Inflows) of Resources
2025 1,600,495 $
2026 1,057,410
2027 1,525,550
2028 58,153
2029 -
Thereafter -
Payable to the Pension Plan
At June 30, 2024, the City reported a payable of $0 for the outstanding amount of contributions to the pension plan required for the year then ended.

Allocation of the Proportional Share of the Net Pension Liability The allocation of the proportionate share of the net pension liability, pension expense, deferred outflows and inflows of resources are allocated as follows:

Percentage Allocation
Governmental Activities 97.78%
Business-Type Activities 2.22%
The governmental activities portion is allocated to the general fund departments as follows:

Percentage Allocation
General Government 19.33%
Public Safety 65.21%
Public Works 9.86%
Parks, Recreation and Senior Center 5.60%

City of Imperial Beach
Notes to Financial Statements
June 30, 2024
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Note 11: Other Post-Employment Benefits
Plan Description
The City provides other post-employment benefits (OPEB) through a single employer defined benefit healthcare plan by contributing up to a maximum of $157 per month for of all premiums charged under the health benefit plan for all eligible employees and qualified family members. These benefits are provided per contract between the City and the employee associations. A separate financial report is not available for the plan. This plan is not administered through a qualifying trust.

Employees Covered
As of the June 30, 2024 measurement date, the following current and former employees were covered by the benefit terms under the Plan:

Inactive employees benefit payments 83
Inactive employees entitled to but not yet receiving benefit payments - Participating active employees 17
Total 100
Funding Policy
The contribution requirements of plan members and the City are established and may be amended by the City, City Council, and/or employee associations. Currently, contributions are not required from plan members. For the fiscal year ended June 30, 2024, the City’s contributions were $0 in payments to the PARS trust, a contribution of $31,127 was made for the purpose of the contribution was to pay current year premiums for retirees, and the estimated implied subsidy of $39,099 resulting in a total of $70,226. In fiscal year 2023, the City established an irrevocable trust with the Public Agency Retirement Services (PARS).

City of Imperial Beach
Notes to Financial Statements
June 30, 2024
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Note 11: Other Post-Employment Benefits (Continued)
Net OPEB Liability
The City's net OPEB liability was measured as of June 30, 2024 and the total OPEB liability was determined by an actuarial valuation dated June 30, 2024 based on the following actuarial methods and assumptions:

Actuarial Cost Method Entry Age Normal
Actuarial Assumptions
Discount Rate 5.95%
Inflation 2.50%
Salary Increases 2.75%
Investment Rate of Return 5.95%
Mortality Rate 2021 CalPERS Mortality Rates
Pre-Retirement Turnover 2021 CalPERS Rates
Healthcare Trend Rate 4.00%
Discount Rate
The discount rate was 5.95% per year net of expenses. This is based on the Bond Buyer 20 Bond Index. The expected rate of return for the PARS Balanced portfolio is

5.95%.

Change of Assumptions
No changes in assumptions for the measurement date as of June 30, 2024.

City of Imperial Beach
Notes to Financial Statements
June 30, 2024
-71-
Note 11: Other Post-Employment Benefits (Continued)
Changes in the Net OPEB Liability
The changes in the net OPEB liability for the Plan are as follows:

Total OPEB Fiduciary Net OPEB
Liability Net Position Liability
Balance at June 30, 2023 1,618,858 $ 316,217 $ 1,302,641 $ (Valuation Date: June 30, 2024)
Changes recognized for the
measurement period:

Service cost 83,991 - 83,991
Interest 96,732 42,639 54,093
Employer contributions - 70,226 (70,226)
Changes of assumptions 166,089 - 166,089
Benefit payments (70,226) (70,226) -
Experience (gain)/losses (103,280) - (103,280)
Administrative expenses - (1,900) 1,900
Net changes 173,306 40,739 132,567
Balance at June 30, 2024 1,792,164 $ 356,956 $ 1,435,208 $ Sensitivity of the Net OPEB Liability to Changes in the Discount Rate The following presents the total OPEB liability of the City if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 2024:

Current
1% Decrease Discount Rate 1% Increase
Net OPEB Liability 1, $ 1,435,208 645,305 $ 1,257,619 $

City of Imperial Beach
Notes to Financial Statements
June 30, 2024
-72-
Note 11: Other Post-Employment Benefits (Continued)
Sensitivity of the total OPEB Liability to Changes in the Health Care Cost Trend Rates
The following presents the total OPEB liability of the City if it were calculated using health care cost trend rates that are one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 2024:

Current Healthcare
1% Decrease Cost Trend Rates 1% Increase
Net OPEB Liability 1,208,264 $ 1,435,208 $ 1,716,443 $
OPEB Expense and Deferred Outflows and Deferred Inflows of Resources Related to OPEB
As of the start of the measurement period (July 1, 2023), the City’s net OPEB liability was $1,302,641. For the fiscal year ended June 30, 2024, the City recognized OPEB expense of $187,945. As of fiscal year ended June 30, 2024, the City reported deferred outflows of resources related to OPEB from the following sources:

Deferred Outflows Deferred Inflows
of Resources of Resources
Changes between expected and
actual experience 102,371 $ 163,802 $
Changes of assumptions 892,703 759,539
29,262 -
Total 995,074 $ 952,603 $
Differences between projected and
actual return on assets
Amounts reported as deferred inflows of resources related to OPEB will be recognized as expense as follows:

Year Ended Deferred Outflows/
June 30 (Inflows) of Resources
2025 24,080 $
2026 24,080
2027 24,080
2028 27,471
2029 32,244
Thereafter (89,484)

City of Imperial Beach
Notes to Financial Statements
June 30, 2024
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Note 12: Self-Insurance Program
General Liability
Since July 1, 2015, the City of Imperial Beach has been a member of Public Risk Innovation and Management (PRISM), an insurance risk sharing pool. The City's selfinsurance retention is $100,000 per occurrence.

In addition to its coverage through PRISM, effective July 1, 1993, the San Diego Unified Port District agreed to fund an Escrow Reserve Account in the amount of $300,000 for the purpose of reimbursing the City for any claim costs not covered by the insurance risk sharing pool, provided the claim is directly related to services provided to the District and arising from incidents actually occurring on tidelands and/or lands leased by the City to the District.

Workers Compensation
The City is a member of Public Risk Innovation and Management (PRISM). The City is self-insured for the first $125,000 of workers' compensation claims. Claims between $125,000 and $5,000,000 are covered through the City's risk sharing membership in PRISM. Claims between $5,000,000 and $50,000,000 are covered by excess purchased insurance.

The City established a Self-Insurance Fund (an internal service fund) to account for and finance its uninsured risk of loss when it became a member of SANDPIPA, PEPIP and PRISM for liability, property casualty and workers' compensation coverage. All funds of the City participate in the program and make payments to the Self-Insurance Fund based on estimates of the amounts needed to pay prior and current year claims and to establish a reserve for catastrophe losses. The estimated claims liability of $370,000 reported at June 30, 2024, is based on the requirements of Governmental Accounting Standards Board Statement 10, which requires that a liability for claims be reported if information prior to the issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. The above amount includes an estimate for incurred but not reported claims.

City of Imperial Beach
Notes to Financial Statements
June 30, 2024
-74-
Note 12: Self-Insurance Program (Continued)
During the last three fiscal years none of the above programs of protection have had settlements or judgments that exceeded pooled or insured coverage. There have been no significant reductions in pooled or insured liability coverage from coverage in the prior year.

Changes in the reported liability for the last three fiscal years are as follows:
2021-2022 2022-2023 2023-2024
Claims outstanding at beginning of year 792,000 $ 700,000 $ 828,000 $ Claims and changes in estimates (40,582) 141,247 (93,747) Claim payments (51,418) (13,247) (364,253)
Claims outstanding at end of year 700,000 $ 828,000 $ 370,000 $ Note 13: Commitments and Contingencies
THE AFFORDABLE HOUSING COALITION OF SAN DIEGO V. TRACY SASNOVAL, ET AL-. the San Diego County Affordable Housing Coalition of San Diego County (“Petitioner”) filed a petition for a writ of mandate seeking to have unmet affordable housing development obligations, including the projects and /or funds need to meet them, as well as repayment of all deferrals and loans owed to the Low and Moderate Income Housing Fund (“Housing Fund”), to be recognized as “enforceable obligations” under the Dissolution Laws and placed on the Successor Agency’s Recognized Obligation Payment Schedule (“ROPS”) for future payment with the Redevelopment Property Tax Trust Funds (“RPTTF”) (See Health and Safety Code §§34172(c) and (d); 34182(c)(2); 34183). The City is named in the action as a real party in interest. The Successor Agency is named as a respondent and defendant.

On September 27, 2016, Judge Michael Kenny ruled that the Affordable Housing obligations are not enforceable obligations and denied the Petition for Writ of Mandate. The ruling was appealed by Petitioner. After oral argument, on July 20,2020, the Third Appellate District ruled that repayment of all deferrals and loans owed to the Housing Fund were “enforceable obligations” under the Dissolution Laws but denied the remaining claims of Petitioner. On remand to the Trial Court, Judge Shelleyanne W.L. Chang ordered that all respondents file “returns” identifying the status of repayment of deferrals and loans owed to the Housing Fund. The City and the Successor Agency reported that it had no such deferrals or loans. Petitioner never formally challenged the “returns” with a Motion nor did the Petitioner claim that the “return” of Imperial Beach was incorrect. It appears that the case on the claims is over, although there is no statutory provision which limits the time for a challenge to the “returns” by Petitioner.

City of Imperial Beach
Notes to Financial Statements
June 30, 2024
-75-
Note 13: Commitments and Contingencies (Continued)
While it is not anticipated that such a challenge by Petitioner will be filed on Imperial Beach’s “return”, there is no certainty that such a challenge will not occur. Petitioner, however, did file a Motion for Attorneys’ Fees, but did not name the City or the Successor Agency as party against whom a demand for attorneys’ fees was made.

If Petitioner does not dismiss the City and Successor Agency from the action in the near future, a Motion to the Court of Appeal will be filed requesting a Dismissal Order.

As there were no claims for attorneys’ fees against the City or the Successor Agency, the attorneys’ fees claim appears to be concluded as to the City and Successor Agency in this matter.

Note 14: Successor Agency Trust for Assets of the Former Redevelopment Agency On December 29, 2011, the California Supreme Court upheld Assembly Bill 1 X 26 ("the Bill ") that provides for the dissolution of all redevelopment agencies in the State of California. This action impacted the reporting entity of the City of Imperial Beach that previously had reported a redevelopment agency within the reporting entity of the City as a blended component unit.

The Bill provides that upon dissolution of a redevelopment agency, either the city or another unit of local government will agree to serve as the "successor agency" to hold the assets until they are distributed to other units of state and local government. On November 1, 2011, the City Council elected to become the Successor Agency for the former redevelopment agency in accordance with the Bill.

In accordance with the timeline set forth in the Bill (as modified by the California Supreme Court on December 29, 2011,) all redevelopment agencies in the State of California were dissolved and ceased to operate as a legal entity as of February 1, 2012. After the date of dissolution, the assets and activities of the dissolved redevelopment agency are reported in a fiduciary fund (private-purpose trust fund) in the financial statements of the City.
a. Cash and Investments
Cash and investments reported in the accompanying financial statements consisted of the following:

Cash and investments pooled with the City 618,607 $
Cash and investments with fiscal agent 2,093
$ 620,700

City of Imperial Beach
Notes to Financial Statements
June 30, 2024
-76-
Note 14: Successor Agency Trust for Assets of the Former Redevelopment Agency (Continued)
b. Long-Term Debt
A description of long-term debt outstanding (excluding defeased debt) of the Successor Agency as of June 30, 2024, follows:

Beginning Ending Due Within
Balance Additions Deletions Balance One Year
Public Offerings:
2020 Tax Allocation Bonds 13,780,000 $ - $ - $ 13,780,000 $ - $ 2020 Tax Allocation Bonds
Premium 2,334,880 - (140,009) 2,194,871 -
2022 Tax Allocation Bonds 10,915,000 - (910,000) 10,005,000 955,000 2022 Tax Allocation Bonds
Premium 1,356,905 - (140,224) 1,216,681 -
Total Public Offerings 28,386,785 $ - $ (1,190,233) $ 27,196,552 $ 955,000 $ Tax Allocation Bonds, 2020
In March 2020, the Imperial Beach Public Financing Authority issued $14,490,000 Tax Allocation Bonds, 2020. The proceeds of the bonds were to defease the 2010 Tax Allocation Bonds. Interest on the bonds is payable semiannually and principal payments are due annually. Debt service payments occur on June 1, 2021, and then from June 1, 2034, through June 1, 2040.

Interest rates on the bonds is 4% per annum. The balance at June 30, 2024, excluding unamortized original issue premium of $2,194,871 is $13,780,000.

The outstanding 2020 bonds contain a provision that upon the occurrence and during the continuance of any event of default the timing of the principal of the bonds, together with the accrued interest thereon, become due and payable immediately.

The remainder of this page left intentionally blank.

City of Imperial Beach
Notes to Financial Statements
June 30, 2024
-77-
Note 14: Successor Agency Trust for Assets of the Former Redevelopment Agency (Continued)
The following is a schedule by years, of future debt service payments as of June 30, 2024, follows:

Year Ending 2020 Tax Allocation Refunding Bonds
June 30, Principal Interest
2025 - $ 551,200 $
2026 - 551,200
2027 - 551,200
2028 - 551,200
2029 - 551,200
2030-2034 1,535,000 2,756,000
2035-2039 9,860,000 1,736,600
2040 2,385,000 47,700
Totals $ 7,296,300 13,780,000 $
Tax Allocation Bonds, 2022
In March 2022, the Imperial Beach Public Financing Authority issued $11,800,000 Tax Allocation Bonds, 2022. The proceeds of the bonds were to defease the 2013 Tax Allocation Bonds. Interest on the bonds is payable semiannually and principal payments are due annually. Debt service payments occur from June 1, 2022, through June 1, 2033. Interest rates on the bonds is 4% per annum. The balance at June 30, 2024, excluding unamortized original issue premium of $1,216,681 is $10,005,000.

The refunding resulted in a difference between the reacquisition price and the net carrying amount of the old debt of $6,610. This difference is being amortized on a straight-line basis as interest expense (interest on debt). The City refunded the Series 2013 Tax Allocation Bonds to reduce its total debt service payments by $2,144,313 and to obtain an economic gain (difference between the present values of the debt service payments on the old and new debt, less any prior funds on hand) of $1,783,298.

The outstanding 2022 bonds contain a provision that the principal due on the Bonds is subject to acceleration upon the occurrence of an event of default. As a practical matter in the event of a payment default by the Successor Agency, it is unlikely the Successor Agency would have the financial resources to meet accelerated obligations. No real or personal property in the project area is pledged to secure the bonds, and it is not anticipated that the Successor Agency will have available moneys sufficient to redeem all of the Bonds in the event of a default.

City of Imperial Beach
Notes to Financial Statements
June 30, 2024
-78-
Note 14: Successor Agency Trust for Assets of the Former Redevelopment Agency (Continued)
The following is a schedule by years, of future debt service payments as of June 30, 2024, follows:

Year Ending 2022 Tax Allocation Refunding Bonds
June 30, Principal Interest
2025 955,000 $ 400,200 $
2026 985,000 362,000
2027 1,015,000 322,600
2028 1,065,000 282,000
2029 1,105,000 216,000
2030-2033 4,880,000 520,600
Totals $ 2,103,400 10,005,000 $
Pledged Revenue
The City pledged, as security for bonds issued, either directly or through the Financing Authority, a portion of tax increment revenue (including Low- and Moderate-Income Housing set-aside and pass-through allocations) that it receives. The bonds issued were to provide financing for various capital projects, accomplish Low- and Moderate-Income Housing projects and to defease previously issued bonds. Assembly Bill 1 X 26 provided that upon dissolution of the Redevelopment Agency, property taxes allocated to redevelopment agencies no longer are deemed increment but rather property tax revenues and will be allocated first to successor agencies to make payments on the indebtedness incurred by the dissolved redevelopment agency. c. Insurance
The Successor Agency is covered under the City of Imperial Beach's insurance policies. Therefore, the limitation and self-insured retentions applicable to the City also apply to the Successor Agency. Additional information as to coverage and self-insured retentions can be found in Note 12.

City of Imperial Beach
Notes to Financial Statements
June 30, 2024
-79-
Note 15: Restricted Components of Net Position
The restricted component of net position are assets that are subject to constraints either (1) externally imposed by creditors (such as debt covenants), grantors, contributors, or laws or regulations of other governments; or (2) imposed by law through constitutional provisions or enabling legislation. In fiscal year 2024, the City did not have any components of net position restricted by enabling legislation.

The restricted component of net position at June 30, 2024, for governmental activities is as follows:

Restricted for Community Development Projects:

Housing Authority 925,451 $
Total
Restricted for Public Works:

Gas Tax 13,905 $
RMRA 1,465,794
Capital Projects 794,697
Total 2,274,396
Restricted for Parks, Recreation and Senior Center:

Miscellaneous Grants 306,727
Parks Maintenance 1,483,241
Total 1,789,968
Restricted for Pension section 115 trust:

General 862,244
Total Restricted Component of Net Position -
Government Activities 5,852,059 $

City of Imperial Beach
Notes to Financial Statements
June 30, 2024
-80-
Note 16: Tax Abatement
The City entered into an agreement Sudberry-Palm Avenue LLC on June 6, 2018.

The Developer is the owner of certain real property totaling approximately 1.4 acres and located in the City of Imperial Beach on which the Developer operates and maintains a hotel known as “Hampton Inn by Hilton”. In order to induce the Developer to construct and operate the hotel on the property for the Operating Period, and upon the fulfillment of the City Disbursement Conditions, the City agreed provide to the Developer TOT Incentive Payments upon the terms set and as follows:

The City shall pay TOT Incentive Payments to Developer pursuant to and in accordance with the terms of the Agreement in an amount equal to fifty percent (50%) of the Net Transient Occupancy Tax Revenues collected and remitted to the City from the Hotel during the first ten (10) years of operation of the Hotel commencing upon the City's receipt of the Opening Certification from Developer ("Payment Period") provided, however, that the aggregate total of TOT Incentive Payments shall not exceed a total amount of Two Million Five Hundred Thousand Dollars ($2,500,000), subject to the limitations set forth in the definitions of Net Transient Occupancy Tax Collected and TOT Incentive Payments.

Upon commencement of the Payment Period, TOT Incentive Payments shall be made by the City to Developer every six (6) months thereafter no later than sixty (60) Days after the applicable six (6) month period. The amount of the TOT Incentive Payments due on each such payment date shall be calculated and based upon the Net Transient Occupancy Tax Revenues Collected and remitted to the City from the Hotel in the immediate prior six (6) month period, subject to the limitations set forth in the definitions of Net Transient Occupancy Tax Collected and TOT Incentive Payments.

The City's making of TOT Incentive Payments pursuant to the Agreement shall not be deemed to constitute a pledge of any particular funds by the City, but instead an obligation contingent upon the construction and operation of the Hotel and the City's receipt of Transient Occupancy Tax from the Hotel in accordance with the terms of the Agreement.

For the year ended of June 30, 2024, the City abated TOT taxes totaling $271,532 under this agreement.

City of Imperial Beach
Schedule of Proportionate Share of the Net Pension Liability And Related Ratios as of the Measurement Date
As of June 30, for the Last Ten Fiscal Years
See Notes to Required Supplementary Information
-81-
Measurement
Date
Employer's
Proportion of the
Collective Net
Pension Liability1
Employer's
Proportionate
Share of the
Collective Net
Pension Liability
Employer's
Covered Payroll
Employer's
Proportionate
Share of the
Collective Net
Pension Liability
as a
Percentage of
the Employer's
Covered Payroll
Pension Plan
Fiduciary Net
Position as a
Percentage of
the Total
Pension Liability
6/30/2014 0.09955% 6,194,125 $ 4,376,672 $ 141.53% 79.82% 6/30/2015 0.11650% 7,997,144 4,287,307 186.53% 80.86%
6/30/2016 0.12284% 10,629,198 4,984,408 213.25% 75.81%
6/30/2017 0.12522% 12,418,086 5,217,228 238.02% 74.88%
6/30/2018 0.12807% 12,341,076 5,241,053 235.47% 76.23%
6/30/2019 0.08029% 8,227,242 5,670,863 145.08% 85.11%
6/30/2020 0.08736% 9,504,977 5,774,101 164.61% 83.84%
6/30/2021 0.04211% 2,277,672 5,971,175 38.14% 96.28%
6/30/2022 0.10509% 12,138,749 6,625,249 183.22% 81.29%
6/30/2023 0.10852% 13,537,936 7,370,969 183.67% 80.18%
1 Proportion of the collective net pension liability represents the plan's proportion of PERF C, which includes both the Miscellaneous and Safety Risk Pools excluding the 1959 Survivors Risk Pool.

City of Imperial Beach
Schedule of Plan Contributions
As of June 30, for the Last Ten Fiscal Years
See Notes to Required Supplementary Information
-82-
Fiscal Year
Actuarially
Determined
Contribution
Contributions
in Relation to
the Actuarially
Determined
Contribution
Contribution
Deficiency
(Excess)
Employer's
Covered
Payroll
Contributions
as a
Percentage
of Covered
Payroll
6/30/2015 757,141 $ (757,141) $ - $ 4,287,307 $ 17.66%
6/30/2016 928,277 (928,277) - 4,984,408 18.62%
6/30/2017 1,015,261 (1,015,261) - 5,217,228 19.46%
6/30/2018 1,159,776 (1,159,776) - 5,241,053 22.13%
6/30/2019 3,424,387 (8,454,260) (5,029,873) 5,670,863 149.08% 6/30/2020 1,226,832 (1,226,832) - 5,774,101 21.25%
6/30/2021 1,386,331 (1,386,331) - 5,971,175 23.22%
6/30/2022 1,498,066 (1,498,066) - 6,625,249 22.61%
6/30/2023 1,697,620 (1,697,620) - 7,370,969 23.03%
6/30/2024 1,769,672 (1,769,672) - 8,128,064 21.77%
Notes to Schedule:

Changes in Assumptions: Effective with the June 30, 2021 valuation date (2022 measurement date), the accounting discount rate was reduced from 7.15% to 6.90%. In determining the long-term expected rate of return, CalPERS took into account long-term market return expectations as well as the expected pension fund cash flows. Projected returns for all asset classes are estimated, combined with risk estimates, and are used to project compound (geometric) returns over the long term. The discount rate used to discount liabilities was informed by the long-term projected portfolio return. In addition, demographic assumptions and the inflation rate assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. There were no assumption changes for 2021. For 2020, the Plan adopted a new amortization policy effective with the 2019 actuarial valuation.

The new amortization policy shortens the period over which actuarial gains and losses are amortized from 30 years to 20 years with the payments computed as a level dollar amount. In addition, the new policy does not utilize a five-year ramp-up and ramp-down on UAL bases attributable to assumption changes and non-investment gains/losses. The new policy also does not utilize a five-year ramp-down on investment gains/losses. These changes apply only to new UAL bases established on or after June 30, 2019. There were no changes in assumptions in 2019. In 2018, demographic assumptions and inflation rate were changed in accordance to the CalPERS Experience Study and Review of Actuarial Assumptions December 2017. There were no changes in the discount rate in 2019. In 2017, the accounting discount rate was reduced from 7.65 percent to 7.15 percent. In 2016, there were no changes in the discount rate. In 2015, amounts reported reflect an adjustment of the discount rate from 7.5 percent (net of administrative expense) to 7.65 percent (without a reduction for pension plan administrative expense). In 2014, amounts reported were based on the 7.5 percent discount rate.

Changes in Benefit Terms: There were no changes to benefit terms that applied to all members of the Public Agency Pool. Additionally, the figures above do not include any liability impact that may have resulted from Golden Handshakes that occurred after the June 30, 2021 valuation date, unless the liability impact is deemed to be material to the Public Agency Pool.

City of Imperial Beach
Schedule of Changes in the Net OPEB Liability and Related Ratios As of June 30, 2024 for the Last Ten Fiscal Years (1)
See Notes to Required Supplementary Information
-83-
Measurement Date (June 30) 2023 2022 2021 2020 2019 2018 Report Date (June 30) 2024 2023 2022 2021 2020 2019
Total OPEB Liability
Service cost 83,991 $ 132,985 $ 141,432 $ 136,440 $ 42,506 $ 37,920 $ Interest on TOL / Return on FNP 96,732 72,880 52,597 51,105 31,887 28,462 Differences between expected and
actual experience - - (90,018) - 170,621 -
Experian (103,280)
Changes in assumptions 166,089 (546,410) (400,373) 13,465 1,180,019 41,088 Benefit payments (70,226) (65,703) (85,701) (97,152) (23,042) (770) Net change in total OPEB liability (406,248) 173,306 (382,063) 103,858 1,401,991 106,700 Total OPEB liability - beginning 2,025,106 1,618,858 2,407,169 2,303,311 901,320 794,620 Total OPEB liability - ending (a) $ 1,618,858 1,792,164 $ 2,025,106 $ 2,407,169 $ 2,303,311 $ 901,320 $ Plan Fiduciary Net Position
Contribution - employer 70,226 365,703 - - - -
Interest on TOL / Return on FNP 42,639 16,932 - - - -
Benefit payments (70,226) (65,703) - - - -
Administrative expense (1,900) (715) - - - -
Net change in Plan Fiduciary Net Position 316,217 40,739 - - - - Plan Fiduciary Net Position - beginning - 316,217 - - - - Plan Fiduciary Net Position - ending (b) 316,217 356,956 - - - - Net OPEB Liability - ending (a) - (b) $ 1,302,641 1,435,208 $ 2,025,106 $ 2,407,169 $ 2,303,311 $ 901,320 $ Plan fiduciary net position as a percentage
of the total OPEB liability 19.92% 19.53% 0.00% 0.00% 0.00% 0.00% Covered-employee payroll 8,128,064 $ 7,502,746 $ 6,625,249 $ 6,059,385 $ 5,878,059 $ 5,484,385 $ Net OPEB liability as a percentage of
covered-employee payroll 17.66% 17.36% 30.57% 39.73% 39.18% 16.43% Notes to Schedule:

Contributions are fixed and not based on a measure of pay, therefore covered-employee payroll is used in the schedule.

Prior to fiscal year 2023, the City did not accumulate assets in a qualifying trust for future OPEB benefits.

City of Imperial Beach
Schedule of Plan Contributions
As of June 30, 2024 for the Last Ten Fiscal Years (1)
See Notes to Required Supplementary Information
-84-
Fiscal Year Ended June 30, 2024 2023
Contractually Determined Contributions (CDC) $ 29,520 32,130 $ Contributions in relation to the CDC (329,520) (31,127) Contribution deficiency/(excess) $ (300,000) 1,003 $
Covered-employee payroll $ 7,502,746 8,285,467 $
Contribution as a percentage of covered-employee payroll 0.38% 4.39% Notes to schedule:

Valuation date used 6/30/2024
Actuarial cost method Entry Age Normal
Amortization method Level % of pay
Amortization period 12.3 years
Asset valuation method Fair Value
Inflation 2.50%
Healthcare cost trend rates 4.00%
Salary increases 2.75%
Investment rate of return 5.95%
Retirement age From 50 to 62
Mortality 2021 CalPERS Study
1 Historical information is required only for measurement periods for which GASB 75 is applicable.

Future years' information will be displayed up to 10 years as information becomes available.

SCHEDULE OF CONTRIBUTIONS
Prior to fiscal year 2023, the City did not accumulate assets in a qualifying trust for future OPEB benefits, and as such, only information for fiscal year ended June 30, 2023 is presented.

Contributions are fixed and not based on a measure of pay, therefore covered-employee payroll is used in the schedule.

City of Imperial Beach
Budgetary Comparison Schedule by Department
General Fund
Year Ended June 30, 2024
See Notes to Required Supplementary Information
-85-
Budget Amounts Actual Variance with
Original Final Amounts Final Budget
Budgetary Fund Balance, July 1 18,578,766 $ 18,578,766 $ 18,578,766 $ - $ Resources (Inflows):

Taxes 19,315,700 20,633,600 20,624,799 (8,801)
Licenses and permits 737,200 704,700 713,882 9,182
Intergovernmental 215,153 227,553 127,792 (99,761)
Charges for services 6,698,500 6,953,600 6,970,229 16,629 Use of money and property 389,800 362,898 1,136,749 773,851 Fines and forfeitures 223,000 239,100 339,213 100,113
Miscellaneous 982,300 882,900 1,061,701 178,801
Subscription acquisition - 32,696 32,696 -
Transfers in 940,700 900,400 900,444 44
Amounts Available for Appropriations 48,081,119 49,516,213 50,486,271 970,058 Charges to Appropriation (Outflow):

General government
Mayor/City Council 317,200 303,100 292,570 10,530
City Clerk's Office 534,700 529,600 496,684 32,916
City Manager 795,505 803,205 798,983 4,222
Human Resources 417,900 444,000 426,101 17,899
Administrative Services 1,085,693 1,125,193 1,138,323 (13,130) City Attorney 233,000 280,500 280,533 (33)
Facilities Maintenance 644,820 591,020 578,021 12,999
Non-Departmental 2,945,200 2,923,900 2,896,313 27,587
Public safety
Law Enforcement Contract 8,609,500 8,371,800 8,367,260 4,540 Fire Protection 3,266,600 3,387,000 3,385,965 1,035
Ocean/Beach Safety 1,726,498 1,746,998 1,742,229 4,769
Building and Housing Inspection 645,600 626,900 614,424 12,476 Animal Control 381,900 381,900 386,592 (4,692)
Code Enforcement 177,500 189,000 193,521 (4,521)
Community Development 710,875 1,053,175 653,628 399,547 Parks, recreation and senior center
Recreation 1,284,400 1,069,056 1,013,593 55,463
Park Maintenance 799,300 793,300 795,570 (2,270)
Senior Services 98,153 175,153 175,269 (116)
Tideland Maintenance 1,071,527 1,104,210 1,109,224 (5,014) Community and neighborhood services 414,600 303,400 277,590 25,810 Public works
Street Maintenance 1,416,760 1,552,060 1,543,759 8,301
Administration 533,000 445,600 433,221 12,379
Solid Waste Management 147,600 111,900 99,146 12,754
Storm Water 405,900 381,800 378,088 3,712
Tidelands Maintenance - - - -
Debt Service
Principal - 10,710 42,824 (32,114)
Interest - 209 1,178 (969)
Capital outlay 705,864 575,602 472,825 102,777
Transfers out 1,750,200 2,817,970 2,815,755 2,215
Total Charges to Appropriations 31,119,795 32,098,261 31,409,189 689,072 Budgetary Fund Balance, June 30 16, $ 17,417,952 961,324 $ 19,077,082 $ 1,659,130 $

City of Imperial Beach
Budgetary Comparison Schedule
Miscellaneous Grants Fund
Year Ended June 30, 2024
See Notes to Required Supplementary Information
-86-
Budget Amounts Actual Variance with
Original Final Amounts Final Budget
Budgetary Fund Balance, July 1 167,936 $ 167,936 $ 167,936 $ - $ Resources (Inflows):

Intergovernmental 4,875,205 4,875,205 3,905,735 (969,470) Use of money and property - - 181,582 181,582
Amounts Available for Appropriations 5,043,141 5,043,141 4,255,253 (787,888) Charges to Appropriation (Outflows):

Public safety 20,000 20,000 - 20,000
Community development 2,790,714 2,790,714 245,750 2,544,964 Parks and recreation 150,872 150,872 42,709 108,163
Public works 4,364,741 4,364,741 616,951 3,747,790
Capital outlay 6,055,518 6,055,518 3,043,116 3,012,402
Total Charges to Appropriations 13,381,845 13,381,845 3,948,526 9,433,319 Budgetary Fund Balance, June 30 (8,338,704) $ (8,338,704) $ 306,727 $ 8,645,431 $

City of Imperial Beach
Notes to Required Supplementary Information
June 30, 2024
-87-
Note 1: General Budget Policies
The two-year operating budget adopted by the City Council provides for the general operations of the City. It includes proposed expenditures and the means of financing them on a departmental basis. Budgets are legally adopted for the General Fund and the Special Revenue Funds.

The City Council approves total budgeted appropriations and any amendments to appropriations throughout the year. All amendments made during the year are included in the budgetary amounts reported herein. The "appropriated budget" covers all City expenditures, with the exception of debt service on bond issues and capital improvement projects carried forward from prior years, which expenditures constitute the legally authorized "non-appropriated budget." Actual expenditures may not exceed budgeted appropriations at the fund level, which is the legal level of control for the Capital Projects Funds. All other funds use the departmental level as the legal level of control.

Formal budgetary integration is employed as a management control device during the year. Commitments for materials and services, such as purchase orders and contracts, are recorded as encumbrances to assist in controlling expenditures.

Appropriations that are encumbered lapse at year-end and then are added to the following years' budgeted appropriations.

Budgets for the General Fund and Special Revenue Funds are adopted on a basis substantially consistent with generally accepted accounting principles (GAAP).

Accordingly, actual revenues and expenditures can be compared with related budgeted amounts without any significant reconciling items. Appropriations for capital projects authorized but not constructed or completed during the year are carried forward as continuing appropriations into the following year's budget.

Under Article Xlll-B of the California Constitution (the Gann Spending Limitation Initiative), the City is restricted as to the amount of annual appropriations from the proceeds of taxes, and if proceeds of taxes exceed allowed appropriations, the excess must either be refunded to the State Controller or returned to the taxpayers through revised tax rates or revised fee schedules, or an excess in one year may be offset by a deficit in the following year. For the fiscal year ended June 30, 2024, based on calculations by City staff, proceeds of taxes did not exceed appropriations. Further, Section 5 of Article Xlll-B allows the City to designate a portion of fund balance for general contingencies to be used for any purpose.

Appropriations lapse at the end of the fiscal year except for the Capital Projects Funds, which may be carried over to the next fiscal year if not completed at year-end.

Expenditures may not exceed budget appropriations at the department level for the General Fund and at the function level for the Special Revenue Funds.

City of Imperial Beach
Notes to Required Supplementary Information
June 30, 2024
-88-
Note 1: General Budget Policies (Continued)
A project-length budget is adopted for the capital projects funds. The debt service fund is governed by bond covenants; therefore, a formal budget is not adopted. Thus, the City does not show a budget comparison debt service funds. In addition, the Housing Authority did not adopt a budget; therefore, a budget comparison is not shown.
a. Excess of Expenditures Over Appropriations
Excess expenditures over appropriations were as follows:

Expenditures Appropriations Excess
General Fund:

General government
Administrative Services 1,138,323 $ 1,125,193 $ (13,130) $ City Attorney 280,533 280,500 (33)
Public safety
Animal Control 386,592 381,900 (4,692)
Code Enforcement 193,521 189,000 (4,521)
Parks, recreation and
senior center
Park Maintenance 795,570 793,300 (2,270)
Senior Services 175,269 175,153 (116)
Tideland Maintenance 1,109,224 1,104,210 (5,014)
Debt Service
Principal 42,824 10,710 (32,114)
Interest 1,178 209 (969)
b. Basis of Budgeting
Budgets for governmental funds are adopted on a basis consistent with generally accepted accounting principles (GAAP) except that for budgeting purposes only encumbrances are treated as expenditures. A reconciliation has been provided on the applicable schedule when the basis of budgeting differs from GAAP.

City of Imperial Beach
Combining Balance Sheet
Other Governmental Funds
June 30, 2024
-89-
Special Revenue Funds
Supplemental
Law
Gas Tax Prop A Tax CDBG Grant Enforcement
Assets:

Pooled cash and investments - $ - $ - $ 25,990 $
Receivables:

Accounts - - - -
Due from other governments 63,315 - - -
Total Assets 63,315 $ - $ - $ 25,990 $
Liabilities and Fund Balances:

Liabilities:

Accounts payable - $ 133,296 $ - $ 25,990 $
Accrued liabilities - - - -
Due to other funds 49,410 251,146 1 -
Total Liabilities 49,410 384,442 1 25,990
Fund Balances (Deficit):

Restricted for:

Community development projects - - - -
Parks, recreation and senior center - - - -
Public works 13,905 - - -
Unassigned (384,442) - (1) -
Total Fund Balance (Deficit) 13,905 (384,442) (1) -
Total Liabilities, Deferred Inflows of
Resources and Fund Balance (Deficit) 63,315 $ - $ - $ 25,990 $

City of Imperial Beach
Combining Balance Sheet
Other Governmental Funds
June 30, 2024 (Continued)
-90-
Capital Projects Funds
Parks
Housing Maintenance Capital
RMRA Authority CIP Projects
Assets:

Pooled cash and investments 1,418,108 $ 869,092 $ 1,542,664 $ 913,369 $ Receivables:

Accounts - 64,509 - -
Due from other governments 55,179 - - -
Total Assets 1,473,287 $ 933,601 $ 1,542,664 $ 913,369 $ Liabilities and Fund Balances:

Liabilities:

Accounts payable 7,493 $ 8,150 $ 56,469 $ 118,672 $
Accrued liabilities - - 2,954 -
Due to other funds - - - -
Total Liabilities 7,493 8,150 59,423 118,672
Fund Balances (Deficit):

Restricted for:

Community development projects - 925,451 - -
Parks, recreation and senior center - - 1,483,241 -
Public works 1,465,794 - - 794,697
Unassigned - - - -
Total Fund Balance (Deficit) 1,465,794 925,451 1,483,241 794,697 Total Liabilities, Deferred Inflows of
Resources and Fund Balance (Deficit) 1,473,287 $ 933,601 $ 1,542,664 $ 913,369 $ Special Revenue Funds

City of Imperial Beach
Combining Balance Sheet
Other Governmental Funds
June 30, 2024
-91-
Total Other
Governmental
Funds
Assets:

Pooled cash and investments 4,769,223 $
Receivables:

Accounts 64,509
Due from other governments 118,494
Total Assets 4,952,226 $
Liabilities and Fund Balances:

Liabilities:

Accounts payable 350,070 $
Accrued liabilities 2,954
Due to other funds 300,557
Total Liabilities 653,581
Fund Balances (Deficit):

Restricted for:

Community development projects 925,451
Parks, recreation and senior center 1,483,241
Public works 2,274,396
Unassigned (384,443)
Total Fund Balance (Deficit) 4,298,645
Total Liabilities, Deferred Inflows of
Resources and Fund Balance (Deficit) 4,952,226 $

City of Imperial Beach
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Other Governmental Funds
Year Ended June 30, 2024
-92-
Special Revenue Funds
Supplemental
Law
Gas Tax Prop A Tax CDBG Grant Enforcement
Revenues:

Licenses and permits - $ 46,613 $ - $ - $
Intergovernmental 735,744 741,869 118,098 186,159
Use of money and property 9,683 4,670 - -
Total Revenues 745,427 793,152 118,098 186,159
Expenditures:

Current:

Public safety - - - 187,159
Community development - - - -
Parks and recreation - - - -
Debt Service:

Principal - 438,258 - -
Interest - 3,643 - -
Capital outlay - 908,487 1,391 -
Total Expenditures - 1,350,388 1,391 187,159
Excess (Deficiency) of Revenues
Over (Under) Expenditures 745,427 (557,236) 116,707 (1,000) Other Financing Sources (Uses):

Proceeds of commercial paper - 196,000 - -
Transfers in - - - -
Transfers out (735,744) (164,700) (116,708) -
Total Other Financing Sources (Uses) (735,744) 31,300 (116,708) - Net Change in Fund Balances 9,683 (525,936) (1) (1,000) Fund Balances, Beginning of Year 4,222 141,494 - 1,000
Fund Balances (Deficits), End of Year 13,905 $ (384,442) $ (1) $ - $

City of Imperial Beach
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Other Governmental Funds
Year Ended June 30, 2024 (Continued)
-93-
Parks
Housing Maintenance Capital
RMRA Authority CIP Projects
Revenues:

Licenses and permits - $ - $ 33,617 $ - $
Intergovernmental 620,028 - - -
Use of money and property 60,571 103,958 45,467 34,620
Total Revenues 680,599 103,958 79,084 34,620
Expenditures:

Current:

Public safety - - - -
Community development - 15,605 - 181
Parks and recreation - - - 124,778
Debt Service:

Principal - - - -
Interest - - - -
Capital outlay 440,275 - 948,879 404,162
Total Expenditures 440,275 15,605 948,879 529,121
Excess (Deficiency) of Revenues
Over (Under) Expenditures 240,324 88,353 (869,795) (494,501) Other Financing Sources (Uses):

Proceeds of commercial paper - - - -
Transfers in - - 1,256,170 743,300
Transfers out - - - -
Total Other Financing Sources (Uses) - - 1,256,170 743,300 Net Change in Fund Balances 240,324 88,353 386,375 248,799 Fund Balances, Beginning of Year 1,225,470 837,098 1,096,866 545,898 Fund Balances (Deficits), End of Year 1,465,794 $ 925,451 $ 1,483,241 $ 794,697 $ Special Revenue Funds Capital Projects Funds

City of Imperial Beach
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds
Year Ended June 30, 2024
-94-
Total Other
Governmental
Funds
Revenues:

Licenses and permits 80,230 $
Intergovernmental 2,401,898
Use of money and property 258,969
Total Revenues 2,741,097
Expenditures:

Current:

Public safety 187,159
Community development 15,786
Parks and recreation 124,778
Debt Service:

Principal 438,258
Interest 3,643
Capital outlay 2,703,194
Total Expenditures 3,472,818
Excess (Deficiency) of Revenues
Over (Under) Expenditures (731,721)
Other Financing Sources (Uses):

Proceeds of commercial paper 196,000
Transfers in 1,999,470
Transfers out (1,017,152)
Total Other Financing Sources (Uses) 1,178,318
Net Change in Fund Balances 446,597
Fund Balances, Beginning of Year 3,852,048
Fund Balances (Deficits), End of Year 4,298,645 $

City of Imperial Beach
Budgetary Comparison Schedule – Special Revenue Funds
Gas Tax
Year Ended June 30, 2024
-95-
Budget Amounts Actual Variance with
Original Final Amounts Final Budget
Budgetary Fund Balance, July 1 4,222 $ 4,222 $ 4,222 $ - $ Resources (Inflows):

Intergovernmental 767,600 741,700 735,744 (5,956)
Use of money and property - - 9,683 9,683
Amounts Available for Appropriations 771,822 745,922 749,649 3,727 Charges to Appropriation (Outflows):

Transfers out 767,600 735,700 735,744 (44)
Total Charges to Appropriations 767,600 735,700 735,744 (44) Budgetary Fund Balance, June 30 4,222 $ 10,222 $ 13,905 $ 3,683 $

City of Imperial Beach
Budgetary Comparison Schedule – Special Revenue Funds
Prop A Tax
Year Ended June 30, 2024
-96-
Budget Amounts Actual Variance with
Original Final Amounts Final Budget
Budgetary Fund Balance, July 1 141,494 $ 141,494 $ 141,494 $ - $ Resources (Inflows):

Licenses and permits 26,900 46,600 46,613 13
Intergovernmental 888,500 300,000 741,869 441,869
Use of money and property - - 4,670 4,670
Miscellaneous 195,100 195,100 - (195,100)
Commercial paper acquisition - - 196,000 196,000
Amounts Available for Appropriations 1,251,994 683,194 1,130,646 447,452 Charges to Appropriation (Outflows):

Debt Service
Principal - - 438,258 (438,258)
Interest - - 3,643 (3,643)
Capital outlay 992,571 1,057,871 908,487 149,384
Transfers out 164,700 164,700 164,700 -
Total Charges to Appropriations 1,157,271 1,222,571 1,515,088 (292,517) Budgetary Fund Balance (Deficit), June 30 94,723 $ (539,377) $ (384,442) $ 154,935 $

City of Imperial Beach
Budgetary Comparison Schedule – Special Revenue Funds
CDBG Grant
Year Ended June 30, 2024
-97-
Budget Amounts Actual Variance with
Original Final Amounts Final Budget
Budgetary Fund Balance (Deficit), July 1 - $ - $ - $ - $ Resources (Inflows):

Intergovernmental 129,000 128,999 118,098 (10,901)
Amounts Available for Appropriations 129,000 128,997 118,098 (10,899) Charges to Appropriation (Outflows):

Capital outlay 79,527 79,527 1,391 78,136
Transfers out 129,000 129,000 116,708 12,292
Total Charges to Appropriations 208,527 208,527 118,099 90,428 Budgetary Fund Balance (Deficit), June 30 (79,527) $ (79,530) $ (1) $ 79,529 $

City of Imperial Beach
Budgetary Comparison Schedule – Special Revenue Funds
Supplemental Law Enforcement
Year Ended June 30, 2024
-98-
Budget Amounts Actual Variance with
Original Final Amounts Final Budget
Budgetary Fund Balance, July 1 1,000 $ 1,000 $ 1,000 $ - $ Resources (Inflows):

Intergovernmental 125,000 186,200 186,159 (41)
Amounts Available for Appropriations 126,000 187,200 187,159 (41) Charges to Appropriation (Outflows):

Public safety 125,000 187,200 187,159 41
Total Charges to Appropriations 125,000 187,200 187,159 41 Budgetary Fund Balance, June 30 1,000 $ - $ - $ - $

City of Imperial Beach
Budgetary Comparison Schedule – Special Revenue Funds
RMRA
Year Ended June 30, 2024
-99-
Budget Amounts Actual Variance with
Original Final Amounts Final Budget
Budgetary Fund Balance, July 1 1,225,470 $ 1,225,470 $ 1,225,470 $ - $ Resources (Inflows):

Intergovernmental 655,300 620,000 620,028 28
Use of money and property - - 60,571 60,571
Amounts Available for Appropriations 1,880,770 1,845,470 1,906,069 60,599 Charges to Appropriation (Outflows):

Capital outlay 1,627,600 1,627,600 440,275 1,187,325
Total Charges to Appropriations 1,627,600 1,627,600 440,275 1,187,325 Budgetary Fund Balance, June 30 253,170 $ 217,870 $ 1,465,794 $ 1,247,924 $

City of Imperial Beach
Budgetary Comparison Schedule – Special Revenue Funds
Housing Authority
Year Ended June 30, 2024
-100-
Budget Amounts Actual Variance with
Original Final Amounts Final Budget
Budgetary Fund Balance, July 1 837,098 $ 837,098 $ 837,098 $ - $ Resources (Inflows):

Use of money and property - - 103,958 103,958
Amounts Available for Appropriations 837,098 837,098 941,056 103,958 Charges to Appropriation (Outflows):

Community development - 14,700 15,605 (905)
Total Charges to Appropriations - 14,700 15,605 (905)
Budgetary Fund Balance, June 30 837,098 $ 822,398 $ 925,451 $ 103,053 $

City of Imperial Beach
Budgetary Comparison Schedule – Capital Projects Funds
Parks Maintenance CIP
Year Ended June 30, 2024
-101-
Budget Amounts Actual Variance with
Original Final Amounts Final Budget
Budgetary Fund Balance, July 1 1,096,866 $ 1,096,866 $ 1,096,866 $ - $ Resources (Inflows):

Licenses and permits 40,000 40,000 33,617 (6,383)
Use of money and property - - 45,467 45,467
Transfers in 180,000 1,256,170 1,256,170 -
Amounts Available for Appropriations 1,316,866 2,393,036 2,432,120 39,084 Charges to Appropriation (Outflows):

Capital outlay 1,390,413 2,466,583 948,879 1,517,704
Total Charges to Appropriations 1,390,413 2,466,583 948,879 1,517,704 Budgetary Fund Balance (Deficit), June 30 (73,547) $ (73,547) $ 1,483,241 $ 1,556,788 $

City of Imperial Beach
Budgetary Comparison Schedule – Capital Projects Funds
Capital Projects
Year Ended June 30, 2024
-102-
Budget Amounts Actual Variance with
Original Final Amounts Final Budget
Budgetary Fund Balance (Deficit), July 1 545,898 $ 545,898 $ 545,898 $ - $ Resources (Inflows):

Use of money and property - - 34,620 34,620
Transfers in 743,300 743,300 743,300 -
Amounts Available for Appropriations 1,289,198 1,289,198 1,323,818 34,620 Charges to Appropriation (Outflows):

Community development - - 181 (181)
Parks and recreation 343,000 343,000 124,778 218,222
Capital outlay 983,090 983,090 404,162 578,928
Total Charges to Appropriations 1,326,090 1,326,090 529,121 796,969 Budgetary Fund Balance (Deficit), June 30 (36,892) $ (36,892) $ 794,697 $ 831,589 $

City of Imperial Beach
Combining Statement of Net Position
Internal Service Funds
June 30, 2024
-103-
Vehicle Facilities
Replacement & Self- Technology & Repair &
Maintenance Insurance Communication Maintenance Total
Assets:

Current:

Pooled Cash and investments 1,024,000 $ 2,093,455 $ 598,614 $ 279,263 $ 3,995,332 $ Prepaid costs - - 23,198 - 23,198
Due from other governments 32,212 - - - 32,212
Total Current Assets 1,056,212 2,093,455 621,812 279,263 4,050,742 Noncurrent:

Capital assets, not being depreciated 1,009,858 - - - 1,009,858 Capital assets, net of depreciation 323,952 - 230,859 58,873 613,684 Total Noncurrent Assets 1,333,810 - 230,859 58,873 1,623,542 Total Assets 2,390,022 2,093,455 852,671 338,136 5,674,284 Deferred Outflows of Resources:

Deferred pension related items 63,366 39,511 40,256 - 143,133 Deferred OPEB related items 8,458 5,274 5,373 - 19,105
Total Deferred Outflows of Resources 71,824 44,785 45,629 - 162,238 Liabilities:

Current:

Accounts payable 32,611 6,042 17,455 15,740 71,848
Accrued liabilities 28,612 5,898 20,105 - 54,615
Compensated absences due in one year 10,959 9,427 12,577 - 32,963 Claims and judgments due in one year - 77,000 - - 77,000 Long-term liabilities due in one year 96,236 - - - 96,236 Total Current Liabilities 168,418 98,367 50,137 15,740 332,662 Noncurrent:

Compensated absences due in more than one year - 5,882 - - 5,882 Claims and judgments due in more than one year - 293,000 - - 293,000 Long-term liabilities 318,183 - 184,638 - 502,821
Net pension liability 115,072 71,751 73,105 - 259,928
Net OPEB liability 12,199 7,607 7,750 - 27,556
Total Noncurrent Liabilities 445,454 378,240 265,493 - 1,089,187 Total Liabilities 613,872 476,607 315,630 15,740 1,421,849 Deferred Inflows of Resources:

Deferred pension related items 12,270 7,651 7,795 - 27,716 Deferred OPEB related items 8,097 5,049 5,144 - 18,290
Total Deferred Inflows of Resources 20,367 12,700 12,939 - 46,006 Net Position:

Investment in capital assets 919,391 - 46,221 58,873 1,024,485 Unrestricted 908,216 1,648,933 523,510 263,523 3,344,182 Total Net Position 1,827,607 $ 1,648,933 $ 569,731 $ 322,396 $ 4,368,667 $

City of Imperial Beach
Combining Statement of Revenues, Expenses, and Changes in Net Position Internal Service Funds
Year Ended June 30, 2024
-104-
Vehicle Facilities
Replacement & Self- Technology & Repair &
Maintenance Insurance Communication Maintenance Total
Operating Revenues:

Sales and service charges 599,000 $ 867,400 $ 902,800 $ 150,000 $ 2,519,200 $ Miscellaneous 191,892 - - - 191,892
Total Operating Revenues 790,892 867,400 902,800 150,000 2,711,092 Operating Expenses:

Services and supplies 390,444 103,238 381,540 76,146 951,368 Claims expense - 420,000 - - 420,000
Personnel and administrative 259,972 147,224 366,140 3,238 776,574 Depreciation/ Amortization expense 92,162 - 118,400 11,053 221,615 Total Operating Expenses 742,578 670,462 866,080 90,437 2,369,557 Operating Income (Loss) 48,314 196,938 36,720 59,563 341,535 Nonoperating Revenues (Expenses):

Investment income 28,051 71,252 13,391 11,000 123,694
Miscellaneous revenue - 425,066 - - 425,066
Interest expense (21,314) - (4,439) - (25,753)
Gain on sale of capital assets 11,750 - - - 11,750
Total Nonoperating Revenues (Expenses) 18,487 496,318 8,952 11,000 534,757 Income (Loss) Before Transfers 66,801 693,256 45,672 70,563 876,292 Transfers in 451,708 - 481,285 - 932,993
Total Transfers 451,708 - 481,285 - 932,993
Changes in Net Position 518,509 693,256 526,957 70,563 1,809,285 Net Position:

Beginning of Year 1,309,098 955,677 42,774 251,833 2,559,382 End of Year 1,827,607 $ 1,648,933 $ 569,731 $ 322,396 $ 4,368,667 $

City of Imperial Beach
Combining Statement of Cash Flows
Internal Service Funds
Year Ended June 30, 2024
-105-
Vehicle Facilities
Replacement & Self- Technology & Repair &
Maintenance Insurance Communication Maintenance Total
Cash Flows from Operating Activities:

Cash received from/(paid to) interfund service provided 782,932 $ 941,423 $ 902,800 $ 150,000 $ 2,777,155 $ Cash paid to suppliers for goods and services (380,919) (1,000,502) (389,575) (70,246) (1,841,242) Cash paid to employees for services (237,505) (134,339) (345,903) (3,238) (720,985) Net Cash Provided (Used) by
Operating Activities 164,508 (193,418) 167,322 76,516 214,928 Cash Flows from Non-Capital
Financing Activities:

Cost reimbursements - 425,066 - - 425,066
Transfers from other funds 451,708 - 481,285 - 932,993
Net Cash Provided by
Non-Capital Financing Activities 451,708 425,066 481,285 - 1,358,059 Cash Flows from Capital and Related Financing Activities:

Principal Paid on subscription lease (95,439) - (51,361) - (146,800) Interest paid on subscription lease (21,314) - (4,439) - (25,753) Proceeds from sale of capital asset 11,750 - - - 11,750 Acquisition and construction of capital assets - - (197,971) (28,105) (226,076) Net Cash Used by Capital and Related Financing Activities (105,003) - (253,771) (28,105) (386,879) Cash Flows from Investing Activities:

Investment income 28,051 71,252 13,391 11,000 123,694
Net Cash Provided by
Investing Activities 28,051 71,252 13,391 11,000 123,694 Net Increase in Cash and
Cash Equivalents 302,900 539,264 408,227 59,411 1,309,802 Cash and Cash Equivalents, Beginning of Year 484,736 1,790,555 190,387 219,852 2,685,530 Cash and Cash Equivalents, End of Year 1,024,000 $ 2,093,455 $ 598,614 $ 279,263 $ 3,995,332 $ Reconciliation of Operating Income to Net Cash
Provided by Operating Activities:

Operating income 48,314 $ 196,938 $ 36,720 $ 59,563 $ 341,535 $ Adjustments to reconcile operating income
to net cash provided by operating activities:

Depreciation and amortization 92,162 - 118,400 11,053 221,615 (Increase) decrease in prepaid costs - - (20,498) - (20,498) (Increase) decrease in due from other governments (7,960) 74,023 - - 66,063 (Increase) decrease in deferred outflows - pension 9,820 6,123 6,239 - 22,182 (Increase) decrease in deferred outflows - OPEB (344) (214) (218) - (776) Increase (decrease) in accounts payable 9,525 (19,264) 12,463 5,900 8,624 Increase (decrease) in accrued liabilities 5,115 1,808 5,884 - 12,807 Increase (decrease) in compensated absences 69 299 3,372 - 3,740 Increase (decrease) in claims and judgments - (458,000) - - (458,000) Increase (decrease) in net pension liability 11,893 7,416 7,556 - 26,865 Increase (decrease) in net OPEB liability 1,127 703 716 - 2,546 Increase (decrease) in deferred inflows - pension (5,430) (3,386) (3,450) - (12,266) Increase (decrease) in deferred inflows - OPEB 217 136 138 - 491 Total Adjustments 116,194 (390,356) 130,602 16,953 (126,607) Net Cash Provided by
Operating Activities 164,508 $ (193,418) $ 167,322 $ 76,516 $ 214,928 $

City of Imperial Beach
Combining Statement of Fiduciary Net Position
Custodial Funds
June 30, 2024
-106-
Special Assessment Districts
Assessment Assessment Assessment
District #63 District #64 District #66
Assets:

Pooled cash and investments 126,335 $ 32,199 $ 182,186 $ Total Assets 126,335 32,199 182,186
Net Position:

Held in trust for other purposes 126,335 32,199 182,186 Total Net Position 126,335 $ 32,199 $ 182,186 $

City of Imperial Beach
Combining Statement of Fiduciary Net Position
Custodial Funds
June 30, 2024
-107-
Special Assessment Districts
Custodial
Assessment Assessment Funds
District #68 District #71 Total
Assets:

Pooled cash and investments 108,241 $ 17,414 $ 466,375 $ Total Assets 108,241 17,414 466,375
Net Position:

Held in trust for other purposes 108,241 17,414 466,375 Total Net Position 108,241 $ 17,414 $ 466,375 $

City of Imperial Beach
Combining Statement of Changes in Fiduciary Net Position Custodial Funds
Year Ended June 30, 2024
-108-
Special Assessment Districts
Assessment Assessment Assessment
District #63 District #64 District #66
Additions:

Interest and change in fair value of investments 3,762 $ 959 $ 5,425 $ Total Additions 3,762 959 5,425
Changes in Net Position 959 3,762 5,425
Net Position at Beginning of Year 122,573 31,240 176,761 Net Position at End of Year 126,335 $ 32,199 $ 182,186 $

City of Imperial Beach
Combining Statement of Changes in Fiduciary Net Position Custodial Funds
Year Ended June 30, 2024
-109-
Special Assessment Districts
Custodial
Assessment Assessment Funds
District #68 District #71 Total
Additions:

Interest and change in fair value of investments 3,223 $ 519 $ 13,888 $ Total Additions 3,223 519 13,888
Changes in Net Position 519 3,223 13,888
Net Position at Beginning of Year 105,018 16,895 452,487 Net Position at End of Year 108,241 $ 17,414 $ 466,375 $

This Page Intentionally Left Blank

-1-

REPORT ON COMPLIANCE WITH APPLICABLE REQUIREMENT

AND ON INTERNAL CONTROL OVER COMPLIANCE
Independent Auditor’s Report
To the Honorable City Council
City of Imperial Beach, California
Report on Compliance for the Housing Successor
Opinion
We have audited the City of Imperial Beach Housing Successor’s (Housing Successor) compliance with the type of compliance requirements described in the California Health and Safety Code sections applicable to California Housing Successor Agencies for the year ending June 30, 2024.

In our opinion, the Housing Successor complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on its Housing Successor for the year ending June 30, 2024.

Basis for Opinion
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America (GAAS), the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States (Government Auditing Standards), and the audit guidelines issued by the California State Controller’s Office. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the compliance section of our report.

We are required to be independent of the City of Imperial Beach Housing Successor and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit.

We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for the Housing Successor. However, our audit does not provide a legal determination of the Housing Successor’s compliance with those requirements.

ATTACHMENT 2

-2-
Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules, and provisions of contracts or grant agreements applicable to the City of Imperial Beach Housing Successor’s general programs.

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

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

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

-3-
Report on Internal Control Over Compliance
A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a compliance requirement will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.

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

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

The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of California Health and Safety Code sections applicable to California Housing Successor Agencies. Accordingly, this report is not suitable for any other purpose.

Report on Excess/Surplus Calculation
We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Imperial Beach as of the year ended June 30, 2024, and have issued our report thereon dated November 11, 2024, which contained unmodified opinions on those financial statements. Our audit was conducted for the purpose of forming opinions on the financial statements as a whole.

The accompanying report on excess/surplus calculation is presented for purposes of additional analysis only and is not a required part of the financial statements. Such information is the responsibility of management and was derived from the financial statements. The report on excess/surplus calculation has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance.

San Bernardino, California
November 11, 2024

City of Imperial Beach
Computation of Housing Successor Excess/Surplus (HSC 34176.1) For the year ended June 30, 2024
-4-
Opening Fund Balance, as restated 837,148 $ 925,451 $
Available Low & Mod Funds 837,148 925,451
Limitation (Greater of $1,000,000 or four years of deposits) Aggregate amount deposited for last four years:
2023-2024 - $ 103,957 $
2022-2023 135,808 135,808
2021-2022 49,012 49,012
2020-2021 31,606 31,606
2019-2020 23,670 23,670
Total Amounts Deposited for Last 4 Years 240,096 344,053 Base Limitation 1,000,000 1,000,000
Greater Amount 1,000,000 1,000,000
Computed Excess Surplus - $ - $
Low & Moderate
Hosing Funds
All Project Area
July 1, 2023
Low & Moderate
Housing Funds
All Project Area
July 1, 2024

ANNUAL HOUSING SUCCESSOR PROGRESS REPORT
HOUSING AUTHORITY OF THE CITY OF IMPERIAL BEACH – SUCCESSOR HOUSING ENTITY Specified Activity Information in Accordance with HSC Section 34176.1 (f) Year End June 30, 2024
The Imperial Beach Housing Authority serves as the housing successor (Housing Successor) of the former Imperial Beach Redevelopment Agency (Former RDA) designated under state laws governing dissolution of former redevelopment agencies set forth in Health and Safety Code (HSC) Sections 34161 through 34191.6 (referred to herein as the Dissolution Law).

The Dissolution Law imposes detailed reporting requirements on the Housing Successor. Specifically, HSC Section 34176.1(f) provides that the reporting requirements set forth in HSC Section 33080.1 and Government Code Section 12463.3 that previously applied to the Former RDA for affordable housing purposes no longer apply. Instead, the Housing Successor must conduct, and provide to its governing body (i.e. Board of Commissioners of the Housing Authority), an independent financial audit of the Low and Moderate Income Housing Asset Fund within six (6) months after the end of each fiscal year. Such audit may be included in the independent financial audit of the City. In addition, because the Housing Successor is not the City, the Housing Successor must provide to its governing body (i.e. the Board of Commissioners of the Housing Authority) and post on its Internet Website all of the following information for the previous fiscal year:

1. The amount the City received pursuant to subparagraph (A) of paragraph (3) of subdivision (b) of Section 34191.4. [HSC Section 34176.1(f)(1)]
SA Loan Repayment completed in FY2024 $ 0

2. The amount deposited to the Low and Moderate Income Housing Asset Fund, distinguishing between amounts deposited pursuant to subparagraphs (B) and (C) of paragraph (3) of subdivision (b) of Section 34191.4 , amounts deposited for other items listed on the Recognized Obligation Payment Schedule, and other amounts deposited. [HSC Section 34176.1(f)(2)] Interest and other $ 103,958
Recognized Obligation Payment Schedule amounts $ 0
Other amounts (20% of SA Loan Repayment; above) $ 0
TOTAL $ 103,958

3. A statement of the balance in the Low and Moderate Income Housing Asset Fund as of the close of the fiscal year, distinguishing any amounts held for items listed on the Recognized Obligation Payment Schedule from other amounts. [HSC Section 34176.1(f)(3)] Recognized Obligation Payment Schedule amounts $ 0
Other amounts (including SA Loan Repayment) $ 925,451
TOTAL $ 925,451
ATTACHMENT 3

Annual Housing Successor Progress Report
Year End June 30, 2023

4. A description of expenditures from the fund by category, including, but not limited to, expenditures (A) for monitoring and preserving the long-term affordability of units subject to affordability restrictions or covenants entered into by the Former RDA or the Housing Successor and administering the activities described in paragraphs (2) and (3) of subdivision (a) of HSC Section 34176.1, (B) for homeless prevention and rapid rehousing services for the development of housing described in paragraph (2) of subdivision (a) of HSC Section 34176.1, and (C) for the development of housing pursuant to paragraph (3) of subdivision (a) of HSC Section 34176.1. [HSC Section 34176.1(f)(4)]
(A) Monitoring/preserving $ 15,605
(B) Homeless prevention/rapid rehousing $ 0
(C) Housing development $ 0
TOTAL $ 15,605

5. As described in paragraph (1) of subdivision (a) of HSC Section 34176.1, the statutory value of real property owned by the Housing Successor, the value of loans and grants receivable, and the sum of these two amounts. [HSC Section 34176.1(f)(5)] Assets held for disposition $ 0
Loans receivable $ 10,863,904
TOTAL $ 10,863,904

6. A description of any transfers made pursuant to paragraph (2) of subdivision (c) of HSC Section 34176.1 in the previous fiscal year and, if still unencumbered, in earlier fiscal years and a description of and status update on any project for which transferred funds have been or will be expended if that project has not yet been placed in service. [HSC Section 34176.1(f)(6)] Not applicable. No Low and Moderate Income Housing Asset Fund monies were transferred during the fiscal year between the Housing Authority and other housing successors that are located within the County of San Diego or in contiguous jurisdiction.

7. A description of any project that the Housing Successor receives or holds property tax revenue pursuant to the Recognized Obligation Payment Schedule and the status of that project. [HSC Section 34176.1(f)(7)]
Not applicable.

8. For interests in real property acquired by the Former RDA before February 1, 2012, a status update on compliance with HSC Section 33334.16. For interests in real property acquired by the Housing Successor on or after February 1, 2012, a status update on the project. [HSC Section 34176.1(f)(8)]
Not applicable.

Annual Housing Successor Progress Report
Year End June 30, 2023

9. A description of any outstanding obligations pursuant to HSC Section 33413 that remained to transfer to the Housing Successor on February 1, 2012, of the Housing Successor's progress in meeting those obligations, and of the Housing Successor's plans to meet unmet obligations. In addition, the Housing Successor shall include in the report posted on its Internet Web site the implementation plans of the Former RDA. [HSC Section 34176.1(f)(9)] Not applicable.

10. The information required by subparagraph (B) of paragraph (3) of subdivision (a) of HSC Section 34176.1. [HSC Section 34176.1(f)(10)]
Not applicable.

11. The percentage of units of deed-restricted rental housing restricted to seniors and assisted individually or jointly by the Housing Successor, its Former RDA, and the City within the previous 10 years in relation to the aggregate number of units of deed-restricted rental housing assisted individually or jointly by the Housing Successor, its Former RDA, and the City within the same time period. [HSC Section 34176.1(f)(11)] Not applicable.

12. The amount of any excess surplus, the amount of time that the Housing Successor has had excess surplus, and the Housing Successor's plan for eliminating the excess surplus. [HSC Section 34176.1(f)(12)]
The Housing Successor has no excess housing funds as of June 30, 2024.

13. An inventory of homeownership units assisted by the Former RDA or the Housing Successor that are subject to covenants or restrictions or to an adopted program that protects the Former RDA's investment of moneys from the Low and Moderate Income Housing Fund pursuant to subdivision (f) of HSC Section 33334.3. The inventory shall include all of the following information (A) the number of those units, (B) the number of the units lost to the portfolio in the last fiscal year and the reason for those losses, (C) any funds returned to the Housing Successor as part of an adopted program that protects the Former RDA’s investment of moneys from the Low and Moderate Income Housing Fund, and (D) whether the Housing Successor has contracted with any outside entity for the management of the units and, if so, the identity of the entity. [HSC Section 34176.1(f)(13)]

Annual Housing Successor Progress Report
Year End June 30, 2023

Project Name Number of
Units
Units
Lost
Funds
Returned
Contracted
Management by
Developer
Beachwind Court – 624
12th Street
15 None None Beachwind Court LP
Southbay Community
Services – 1260 Calla Ave
8 None None Southbay Community
Services
Southbay Community
Services – 1360 Hemlock
7 None None Southbay Community
Services
American Legion – 1268
Palm Avenue
30 None None American Legion
Habitat for Humanity –
10th and Donax
6 None None Habitat for Humanity

14. In the annual report prepared in 2019 and every five (5) years thereafter (which includes the annual report for 2024), the Housing Successor must demonstrate that the Housing Successor’s expenditures, from January 1, 2014 through the end of the latest fiscal year covered in the annual report, comply with the requirements of subparagraph (A) of subsection (3) of subsection (a) of HSC Section 34176.1, which states in pertinent part: “The housing successor shall expend all funds remaining in the Low and Moderate Income Housing Asset Fund after the expenditures allowed pursuant to paragraphs (1) and (2) for the development of housing affordable to and occupied by households earning 80 percent or less of the area median income, with at least 30 percent of these remaining funds expended for the development of rental housing affordable to and occupied by households earning 30 percent or less of the area median income and no more than 20 percent of these remaining funds expended for the development of housing affordable to and occupied by households earning between 60 percent and 80 percent of the area median income.” [HSC Section 34176.1(a)(3)(A)] The Low and Moderate Income Housing Asset Fund has had minimal expense activity since January 1, 2014. The expenses that have been incurred pertain to professional services related to the Projectslisted under #13 above and to legal services and other professional services related to a new proposed affordable housing project recently approved by the City Council and the Housing Successor on November 6, 2024. For informational purposes only, this new project involves the development of a new 50-unit affordable senior housing and neighborhood center project at 455 Palm Ave., Imperial Beach, CA providing for fifty (50) dwelling units serving Extremely Low Income, Very Low Income, and Low Income Senior Citizen Households. At the future close of escrow, and subject to satisfaction of conditions precedent, the Housing Successor intends on providing the developer with a construction to permanent phase loan of Low and Moderate Income Housing Asset Funds in the amount of $625,000 to assist developer with acquisition and construction costs of the project.

ATTACHMENT 4
RESOLUTION NO. 2024-085

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF IMPERIAL BEACH, CALIFORNIA,

AUTHORIZING THE ALLOCATION OF FUND BALANCE AND AUTHORIZING NECESSARY

ASSIGNMENTS, TRANSFERS, AND BUDGET AMENDMENTS
WHEREAS, the City Council has a fiduciary responsibility to maintain fund balance reserves and allocate adequate funding to protect and plan for the City’s future; and WHEREAS, the City Council has adopted City Council Policy 420, Fund Balance Reserve Policy that identifies provisions of the fund balance standards for the City of Imperial Beach; and WHEREAS, City Council Policy 420 sets a minimum Unassigned Fund Balance of 30% of the annual General Fund expenditures; and
WHEREAS, as of June 30, 2024, the General Fund Unassigned Fund Balance was $12,623,886, which is approximately 40.2% of Fiscal Year 2023-2024 General Fund expenditures; and
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Imperial Beach as follows:

1. The above-listed findings are true and correct.

2. The City Council authorizes the following uses/allocations of General Fund Unassigned Fund Balance:
a) Contribute $200,000 to PARS Sec 115 trust fund for pension obligations b) Transfer $100,000 from the General Fund Unassigned Fund Balance to the Facility Repair and Maintenance Fund (Fund 504) appropriate it to GL 504- 1924-519.2006 for FY25 unanticipated emergency facility repairs and maintenance

3. The City Council hereby authorizes the Finance Director to make the necessary budget amendments.

PASSED, APPROVED, AND ADOPTED by the City Council of the City of Imperial Beach at its meeting held on the 20th day of November 2024, by the following vote:

AYES: COUNCILMEMBERS:

NOES: COUNCILMEMBERS:

ABSENT: COUNCILMEMBERS:

PALOMA AGUIRRE, MAYOR
ATTEST:

JACQUELINE M. KELLY, MMC

CITY CLERK