NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 3 – Cash and Investments (Continued)
Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization.
Minimum Rating as of Year End
Legal Not
Rating Rated
Certificates of deposit $ 5,272,323 N/A $ 5,272,323
Total $ 5,272,323 5,272,323 $
Investment Type
The investment policy of the City contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. There were no investments in any one issuer, other than U.S. Treasury securities, mutual funds, and external investment pools that represent 5% or more of total City-wide investments as of June 30, 2023.
Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The California Government Code and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits, other than the following provision for deposits: The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit).
The market value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits.
The custodial risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for investments. With respect to investments, custodial credit risk generally applies only to direct investments in marketable securities. Custodial credit risk does not apply to a local government’s indirect investment in securities through the use of mutual funds or government investment pools. 999
Section 7, Item A.
26 CITY OF KERMAN
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 4 – Receivables
The following is a summary of receivables at June 30, 2023 for the City’s individual enterprise funds, including the applicable allowances for uncollectible accounts are as follows:
Water Sewer Disposal Storm Drain Internal Service
Enterprise Funds
Accounts $ 212,406 231,686 $ 208,023 $ 18,790 $ 136,599 $ Gross receivables 231,686 212,406 208,023 18,790 136,599 Less: Allowance for
uncollectible accounts (30,520) (26,838) (19,898) (1,574) - $ 181,886 204,848 $ 188,125 $ 17,216 $ 136,599 $
Lease receivables
The following is a summary of lease receivables at June 30, 2023 General Fund
Land Leases:
Valley Health 127,513 $
Generations Dairy 23,028
Tower Leases:
Verizon 430,938
AT&T 72,282
$ 653,761
Valley Heath Team Inc. Land Lease – The City entered into an agreement to lease out a certain property from June 1, 2011 through August 31, 2026 at a monthly rate of $3,312.24. Payment is due the first of the month at .9% interest.
Generations Dairy Land Lease – The City agreed to lease out 39 acres of land from 5/1/21 to 12/31/25 for an annual payment ranging from $11,199 to $12,789 at .9% interest rate.
Verizon Tower Lease – The City entered into an agreement to lease out a cell tower from December 1, 2007 through December 1, 2036 for an annual payment ranging from $25,412 to $39,590. Payment is due December 1 each year at .9% interest.
1000
Section 7, Item A.
27 CITY OF KERMAN
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 4 – Receivables (continued)
AT&T Tower Lease – The City entered into an agreement to lease out a cell tower from December 1, 2007 through December 1, 2036 to for a monthly payment of $1,600. Payment is due December 1 each year at .9% interest.
The annual payment receipt schedule for principal and interest on all lease receivable at June 30, 2023 were as follows:
For the year ended June 30, Principal Interest Total
2024 92,853 $ 5,367 $ 98,220 $
2025 95,011 4,602 99,613
2026 85,806 3,830 89,636
2027 48,164 3,169 51,333
2028 27,480 2,863 30,343
2029-2033 155,616 10,309 165,925
2034-2037 148,831 2,745 151,576
Total 653,761 $ $ 32,885 $ 686,646
The related deferred inflows of resources on the right of use on lease revenue will be amortized on a straightline basis over the term of the agreement as follows:
For the year ended June 30, Principal
2024 98,649 $
2025 91,951
2026 85,253
2027 48,541
2028 30,628
2029-2033 153,139
2034-2037 107,200
Total 615,362 $
During the year ended June 30, 2023, the City recognized $102,522 in lease revenue and $6,130 in related interest income.
1001
Section 7, Item A.
28 CITY OF KERMAN
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 5 – Capital Assets – Capital asset activities for the year ended June 30, 2023 were as follows:
Balance Balance
July 1, 2022 Additions Retirements June 30, 2023
Governmental Activities
Capital assets, not being depreciated
Land 2,523,592 $ - $ - $ 2,523,592 $
Construction in progress 1,722,619 5,077,288 (2,540,190) 4,259,717 Total capital assets, not being depreciated 1,722,619 7,600,880 (2,540,190) 6,783,309 Capital assets, being depreciated
Buildings and improvements 9,854,519 2,654,585 12,509,104 Infrastructure 22,944,405 - - 22,944,405
Machinery and equipment 426,221 3,460,817 - 3,887,038
Total capital assets, being depreciated 3,080,806 36,259,741 - 39,340,547 Less accumulated depreciation for
Buildings and improvements (3,273,806) (279,027) - (3,552,833) Infrastructure (5,403,853) (525,096) - (5,928,949)
Machinery and equipment (282,389) (2,346,752) - (2,629,141) Total accumulated depreciation (1,086,512) (11,024,411) - (12,110,923) Total capital assets, being depreciated, net 1,994,294 25,235,330 - 27,229,624 Governmental activities capital assets, net $ 3,716,913 32,836,210 $ (2,540,190) $ 34,012,933 $ Business-Type Activities
Capital assets, not being depreciated
Land 3,383,589 $ - $ - $ 3,383,589 $
Construction in progress 545,716 3,368,797 - 3,914,513
Total capital assets, not being depreciated 545,716 6,752,386 - 7,298,102 Capital assets, being depreciated
Buildings and improvements 22,781,421 373,876 - 23,155,297 Machinery and equipment 11,550 1,978,658 - 1,990,208
Total capital assets, being depreciated 385,426 24,760,079 - 25,145,505 Less: accumulated depreciation (959,243) (14,812,101) - (15,771,344) Total capital assets, being depreciated, net (573,817) 9,947,978 - 9,374,161 Business-type activities capital assets, net $ (28,101) 16,700,364 $ - $ 16,672,263 $ 1002
Section 7, Item A.
29 CITY OF KERMAN
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 5 – Capital Assets (Continued)
Depreciation expense was charged to the following functions in the Statement of Activities:
Governmental Functions:
General Government 108,853 $
Public Works and Community Development 529,253
Social Services 167,965
Public Safety 38,865
Capital assets held by the government's internal service funds are charged to the various functions based on their usage of the asset 241,576 $ 1,086,512
Business-Type Functions:
Water 336,201 $
Sewer 606,250
Disposal 682
Storm Drain 16,110
$ 959,243
1003
Section 7, Item A.
30 CITY OF KERMAN
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 6 – Long-Term Debt
The City generally incurs long-term debt to finance projects or purchase assets which will have useful lives equal to or greater than the related debt.
Long-term debt payable at June 30, 2023 was comprised of the following individual issues:
Balance Balance Current
July 1, 2022 Additions Retirements June 30, 2023 Portion Governmental Activity Long Term Debt
Direct Borrowings:
Kerman Public Finance Authority Bonds
2020 Lease Revenue Bonds $ - 3,041,000 $ (32,000) $ 3,009,000 $ 173,000 $ Total Governmental Activity Debt $ 3,041,000 - $ (32,000) $ 3,009,000 $ 173,000 $ Business-Type Activity Long Term Debt
Direct Borrowings:
Notes Payable
California Dept. of Water Resources 989,999 $ - $ (165,000) $ 824,999 $ 165,000 $ California Dept. of Water Resources - 2,621,110 (250,531) 2,370,579 253,037 Total Business-Type Activity Debt $ 3,611,109 - $ (415,531) $ 3,195,578 $ 418,037 $ Compensated Absences
Government Activities $ 72,776 411,749 $ - $ 484,525 $
Business-Type Activities $ - 135,869 $ (6,724) $ 129,145 $ Net Pension Liability
Government Activities $ 2,776,755 1,571,599 $ - $ 4,348,354 $ Business-Type Activities $ 489,252 265,005 $ - $ 754,257 $ Kerman Public Financing Authority Bonds - The KPFA was established in 2007 through a Joint Exercise of Powers Agreement between the City and the Agency. The formation of the joint powers authority was approved by the City Council who is also designated as the Board of Directors for the KPFA.
The purpose of the KPFA is solely to provide funds from the sale of revenue bonds to finance or refinance the costs of acquiring, constructing, or improving and equipping capital improvements (projects) for the City and the Agency. The City set up the KPFA to act as a financing/lending type institution only.
In September 2020, the KPFA issued the 2020 Lease Revenue Refunding Bonds in the amount of $3,041,000.
The 2020 Lease Revenue principal payments are made each October 1 beginning in 2022 through 2038.
Interest is to be paid semi-annually on April 1 and October 1 through 2038. The interest rates range from 3.5% to 4.75%.
1004
Section 7, Item A.
31 CITY OF KERMAN
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 6 – Long-Term Debt (Continued)
California Department of Water Resources Construction Loan – The City entered into a contract with the State of California, Department of Water Resources in 2003. The contract provides for a 20 year loan at a zero percent interest rate. Terms of the note call for semi-annual principal payments of $82,500 beginning January 1, 2008 and will mature on January 1, 2028. The outstanding balance on the note at June 30, 2022 was $824,999.
California Department of Water Resources Wastewater Upgrade Loan – The City entered into a revolving loan agreement with the State of California, Department of Water Resources in September 2009. The agreement provides for a loan of up to $4,957,479 for sewer system upgrades. Construction period interest of of $38,241 was combined with the loan amount for a final total loan of $4,995,720. Terms of the loan call for annual payments of $276,743 including interest at 1.00%, which begins September 2012 and will mature in September 2031. The outstanding balance on the note at June 30, 2022 was $2,370,579.
The annual requirement to amortize the principal and interest on all long-term debt at June 30, 2023 were as follows:
Years ending June 30, Principal Interest Principal Interest 2024 173,000 $ 67,510 $ 418,037 $ 23,706 $
2025 177,000 63,467 420,567 21,175
2026 180,000 59,344 423,123 18,620
2027 183,000 55,151 425,704 16,039
2028 186,000 50,889 428,310 13,432
2029-2033 998,000 187,272 1,079,837 27,130
2034-2038 65,398 1,112,000 - -
$ 549,031 3,009,000 $ 3,195,578 $ 120,102 $
Governmental Activities Business-Type Activities
1005
Section 7, Item A.
32 CITY OF KERMAN
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 7 – Fund Balance
Fund Balance and Retained Earnings Deficits - The following is a summary of deficit fund balances and retained earnings as of June 30, 2023:
Special Revenue Funds
Park Development (21,442)
These deficits are expected to be relieved from future revenues or transfers from other funds.
Note 8 – Interfund Receivables, Payables and Transfers
Interfund receivables and payables consist of short-term loans resulting from regular transactions. These loans are expected to be repaid as soon as the borrowing fund has cash.
Individual fund interfund receivables and payables balances as of June 30, 2023 are as follows:
Due From Due To
General Fund 1,173,703 $ - $
Internal Service Fund - 545,298
Senior Center Fund - 6,999
Park Development - 14,267
Housing Grant - 14,103
State Grants - 593,036
$ 1,173,703 1,173,703 $
1006
Section 7, Item A.
33 CITY OF KERMAN
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 8 – Interfund Receivables, Payables and Transfers (Continued) Interfund Transfers
In general, the City uses interfund transfers to (1) move revenues from the funds that collect them to the funds’ that statute or budget requires to expend them, (2) use unrestricted revenues collected in the General Fund to help finance various programs and capital projects accounted for in other funds in accordance with budgetary authorization, and (3) move cash to debt service funds from the funds responsible for payment as debt service payments become due. In general, the effect of the interfund activity has been eliminated from the governmentwide financial statements.
Transfers In Transfers Out
Major Governmental Funds:
General Fund - $ 94,689 $
Maintenance and Construction - 3,357
Proprietary Funds:
Water 148,656 -
Sewer - 98,830
Disposal - 92,393
Storm Drain - 18,583
Internal Service 680,856 -
Nonmajor Governmental Funds:
Measure C - 52,724
Gas Tax 18,345 -
Maintenance District - 24,496
State Grants - 426,172
Local Transportation - 50,262
$ 861,506 861,506 $
1007
Section 7, Item A.
34 CITY OF KERMAN
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 9 – Risk Management
The City participates with other public entities in a joint venture under a joint powers agreement which establishes the Central San Joaquin Valley Risk Management Authority (CSJVRMA). The relationship between the City and CSJVRMA is such that CSJVRMA is not a component unit of the City for financial reporting purposes.
The CSJVRMA is a consortium of 55 cities in San Joaquin Valley, California. It was established under the provisions of California Government Code Section 6500, et. seq. The CSJVRMA is governed by a Board of Directors, which meets three to four times each year, consisting of one member appointed by each member city. The day-to-day business is handled by a management group employed by the CSJVRMA. The financial statements of CSJVRMA can be obtained at 1831 K Street, Sacramento, CA 95814.
Each member government pays a primary deposit to cover estimated losses for a fiscal year (claims year). Six months after the close of a fiscal year, outstanding claims are valued. A retrospective deposit computation is then made for each open claims year. Costs are spread to members as follows: the first $25,000 of each occurrence is charged directly to the member. Each member maintains a $1,000,000 self-insured retention (SIR) amount covered by the Authority pooled investments. The Authority purchases excess liability coverage through the California Affiliated Risk Management Authority for the amount in excess of $1,000,000.
The City maintains a self-insured retention level of $50,000 for workers’ compensation insurance. Coverage between $50,000 and $500,000 is provided through the risk pool. CSJVRMA participates in an excess pool which provides workers’ compensation coverage from $5,000,000 to $200,000,000. Each program year is retrospectively adjusted three years after the end of the program year and annually thereafter.
The City also purchases various property coverage programs. Deductibles and limits per property type can be obtained from the City Manager or directly from the Authority.
The latest audited financial information and the most current information available for CSJVRMA for fiscal year ended June 30, 2023 is as follows:
Total assets 153,984,502 $
Total liabilities 120,022,096
Net position $ 33,962,406
Total revenues $ 73,088,767
Total expenses 71,300,255
Increase/(decrease) in net position $ 1,788,512
Contingent Liabilities
The City participates in a number of Federal and State assisted grant programs which are subject to financial and compliance audits. Audits for these programs and the respective findings are to be determined at a future date, and the City expects the amount, if any, of the expenditures which may be disallowed by the granting agency to be immaterial.
The City is a defendant in various lawsuits and claims. The City attorney anticipates that actual or potential claims against the City, not covered by insurance, would not materially affect the financial position of the City. 1008
Section 7, Item A.
35 CITY OF KERMAN
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 10 – Deferred Outflows and Deferred Inflows of Resources In addition to assets, the statement of net position will sometimes report a separate section for deferred outflows of resources. This separate financial element, deferred outflows of resources, represents a consumption of net position or fund balance that applies to future period(s) and thus, will not be recognized as an outflow of resources (expense/expenditure) until then. The City reports the $2,922,342 in deferred outflows related to net pension liability in the Statement of Net Position. See Note 11 for more details.
In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represent an acquisition of net position or fund balance that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City reports two items related to deferred inflows, totaling $1,004,030:
$388,667 in deferred inflows of resources related to net pension liability, see Note 11 for more details. $615,363 in deferred inflows of resources related to right of use capital lease revenue in the Balance Sheet of the General Fund, see Note 4 for more details.
Note 11 – Pension Plan
Plan Description - The City contributes to the California Public Employees' Retirement System (PERS), an agent multiple-employer public employee defined benefit pension plan. PERS provides retirement and disability benefits, annual cost-of-living adjustments and death benefits to plan members and beneficiaries.
PERS acts as a common investment and administrative agent for participating public entities within the State of California. Benefit provisions and all other requirements are established by state statute and city ordinance.
Copies of PERS' annual financial report may be obtained from their Executive Office - 400 P Street - Sacramento, CA 95814.
Funding Policy – Active plan members in the Plan are required to contribute 7% of their covered salary for both miscellaneous and public safety members. The City contributes 4% of the employee portion.
The City is required to contribute the actuarially determined remaining amounts necessary to fund the benefits for its members. The actuarial methods and assumptions used are those adopted by the CalPERS Board of Administration. The required employer contribution rates for the fiscal year ended June 30, 2023 Miscellaneous Classic, PEPRA Miscellaneous, Safety Classic, and PEPRA Safety were 8.630%, 7.470%,
14.740%, and 10.800%, respectively. The contribution requirements of plan members is established by State statute and the employer contribution is established and may be amended by PERS. 1009
Section 7, Item A.
36 CITY OF KERMAN
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 11 – Pension Plan (Continued)
The Plans’ provisions and benefits in effect at June 30, 2023, are summarized as follows:
Miscellaneous Classic PEPRA Miscellaneous
Hire Date
Prior to
January 1, 2013
On or after
January 1, 2013
Benefit Formula 2.0% at 60;
maximum 2% COLA
2.0% at 62;
maximum 2% COLA
Benefit Vesting Schedule 5 years service 5 years service Benefit Payments monthly for life monthly for life
Retirement Age 60 60
Monthly Benefits, as a % of Eligible Compensation 2.00% 2.00% Required Employee Contribution Rates 8.08% 6.25%
Required Employer Contribution Rates 8.630% 7.470%
Safety Classic PEPRA Safety
Hire Date
Prior to
January 1, 2013
On or after
January 1, 2013
Benefit Formula 2.0% at 55;
maximum 2% COLA
2.0% at 57;
maximum 2% COLA
Benefit Vesting Schedule 5 years service 5 years service Benefit Payments monthly for life monthly for life
Retirement Age 55 55
Monthly Benefits, as a % of Eligible Compensation 2.00% 2.00% Required Employee Contribution Rates 7.00% 9.50%
Required Employer Contribution Rates 14.740% 10.800%
Employees hired July 1, 2012 and thereafter pay the full 7% employee contribution per adopted Memoranda of Understanding if the employee is considered a “Classic” employee under PEPRA.
Contributions – Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on July 1 following the notice of a change in the rate. Funding contributions for both Plans are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The District is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. 1010
Section 7, Item A.
37 CITY OF KERMAN
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 11 – Pension Plan (Continued)
For the year ended June 30, 2023, the contributions recognized $1,045,282 as part of the pension expense.
Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions As of June 30, 2023, the City reported net pension liabilities for its proportionate shares of the net pension liability of each Plan as follows:
Miscellaneous Plan
Safety Police Plan
Total Net Pension Liability
Proportionate Share of Net
Pension Liability
$ 3,258,465
1,844,146
$ 5,102,611
The City’s net pension liability for each Plan is measured as the proportionate share of the net pension liability. The net pension liability of each of the Plans is measured as of June 30, 2022, and the total pension liability for each Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2021 rolled forward to June 30, 2022 using standard update procedures. The City’s proportion of the net pension liability was based on a projection of the City’s long-term share of contributions to the pension plans relative to the projected contributions of all participating employers, actuarially determined. The City’s proportionate share of the net pension liability for each Plan as of June 30, 2022 and 2023 was as follows:
Miscellaneous Safety
Proportion – June 30, 2022 0.06029% 0.01971%
Proportion – June 30, 2023 0.06964% 0.02684%
Change – Increase/(Decrease) 0.00935% 0.00713%
1011
Section 7, Item A.
38 CITY OF KERMAN
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 11 – Pension Plan (Continued)
For the year ended June 30, 2023, the City recognized pension expense of $1,244,696. At June 30, 2023, the City reported deferred outflows of resources and deferred inflows of resources related to pension from the following sources:
Deferred Outflows of
Resources
Deferred Inflows of
Resources
Pension contributions subsequent to
measurement date 777,837 $ - $
Difference between expected and actual experience 141,759 (63,852) Difference in projected and actual contributions 892 (324,815) Change in employer's proportion - 593,929
Changes in assumptions 519,844 -
Net differences between projected and
actual earnings on pension plan investments - 888,081
Total 2,922,342 $ (388,667) $
$777,837 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2024. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:
Year Ended
June 30
2024 538,936 $
2025 438,189
2026 236,002
2027 542,711
Thereafter -
1012
Section 7, Item A.
39 CITY OF KERMAN
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 11 – Pension Plan (Continued)
Actuarial Methods and Assumptions – The collective total pension liability for the June 30, 2022 measurement period was determined by an actuarial valuation as of June 30, 2021, with update procedures used to roll forward the total pension liability to June 30, 2022. The collective total pension liability was based on the following assumptions:
Valuation Date June 30, 2021
Measurement Date June 30, 2022
Actuarial Cost Method Entry-Age Normal Cost Method in
accordance with the requirements of
GASB Statement No. 68
Actuarial Assumptions:
Discount Rate 6.90%
Inflation 2.30%
Payroll Growth 2.30%
Salary Increases Varies by Entry Age and Service
Mortality Rate Table Derived using CalPERS' Membership
Date for all Funds
1 Post Retirement Benefit Increase Contract COLA up to 2.5% until Purchasing Power Protection
Allowance Floor on Purchasing Power
applies
1 The mortality table used was developed based on CalPERS-specific data. The table includes 15 years of mortality improvements using Society of Actuaries Scale 90% of scale MP 2016. For more details on this table, please refer to the December 2017 experience study report (based on CalPERS demographic data from 1997 to 2015) that can be found on the CalPERS website.
All other actuarial assumptions used in the June 30, 2017 valuation was based on the results of a December 2017 experience study report (based on CalPERS demographic data from 1997 to 2015), including updates to salary increase, mortality and retirement rates. The Experience Study can be obtained at CalPERS’ website.
Change of assumptions – No changes in assumptions.
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. 1013
Section 7, Item A.
40 CITY OF KERMAN
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 11 – Pension Plan (Continued)
Long-term Expected Rate of Return
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 and, combined with risk estimates, are used to project compound (geometric) returns over the long term. The discount rate used to discount liabilities was informed by the longterm projected portfolio return.
The long-term expected real rates of return by asset class can be found in CalPERS’ Comprehensive Annual Financial Report for the fiscal year ended June 30, 2022.
The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected rate of returns, net of pension plan investment expense and inflation) are developed for each major asset class.
The table below reflects long-term expected real rates of return by asset class. The rate of return was calculated using the capital market assumptions applied to determine the discount rate and asset allocation.
These geometric rates of return are net of administrative expenses.
Asset Class
Assumed Asset
Allocation
Real Return
Years 1-10
1,
2 Global equity - cap-weighted 30% 4.50%
Global equity - noncap-weighted 12% 3.84%
Private equity 13% 7.28%
Treasury 5% 0.27%
Mortgage-backed securities 5% 0.50%
Investment grade corporates 10% 1.56%
High yield 5% 2.27%
Emerging market debt 5% 2.48%
Private debt 5% 3.57%
Real assets 15% 3.21%
Leverage -5% -0.59%
1 An expected inflation of 2.30% used for this period
2 Figures are based on the 2021-22 Asset Liability Management Study 1014
Section 7, Item A.
41 CITY OF KERMAN
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 11 – Pension Plan (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 for each Plan, calculating using the discount rate of each Plan, as well as what the City’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower (5.90%) or 1-percentage point higher (7.90%) than the current rate:
1% Decrease
(5.90%)
Current
Discount Rate
(6.90%)
1% Increase
(7.90%)
Net Pension Liability:
Miscellaneous Plan 5,273,691 $ 3,258,465 $ 1,600,434 $
Safety Police Plan 3,013,917 $ 1,844,146 $ 888,124 $
Pension Plan Fiduciary Net Position – Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports.
Payable to the Pension Plan – At June 30, 2023, the City has no outstanding amount of contributions to the pension plan required for the year ended June 30, 2023.
Note 12 – Subsequent Events
The City evaluated subsequent events for recognition and disclosure through March 25, 2024, the date which these financial statements were available to be issued. Management concluded that no material subsequent events have occurred since June 30, 2023 that required recognition or disclosure in such financial statements. 1015
Section 7, Item A.
REQUIRED SUPPLEMENTARY INFORMATION
1016
Section 7, Item A.
42 CITY OF KERMAN
BUDGETARY COMPARISON SCHEDULE
GENERAL FUND
YEAR ENDED JUNE 30, 2023
Variance with
Final Budget
Budgeted Amounts Actual Positive/
Original Final Amounts (Negative)
Revenue
Taxes 7,725,436 $ 7,725,436 $ 9,218,980 $ 1,493,544 $
Licenses, permits and impact fees 701,380 701,380 798,919 97,539 Intergovernmental 673,345 673,345 652,435 (20,910)
Charges for services 256,346 256,346 246,419 (9,927)
Fines and forfeitures 31,707 31,707 21,548 (10,159)
Rents 167,445 167,445 100,926 (66,519)
Investment earning, net of unrealized gain/(loss) 68,430 68,430 87,490 19,060 Other 234,058 234,058 216,175 (17,883)
Total revenue 9,858,149 9,858,149 11,342,892 1,484,743
Expenditures
Current
General government 1,136,574 1,136,574 1,092,891 43,683 Public works 1,279,953 1,279,953 1,048,214 231,739
Community development 779,337 779,337 467,290 312,047
Social services 813,706 813,706 667,896 145,810
Public safety 4,604,675 4,604,675 4,013,978 590,697
Capital outlay 807,873 807,873 400,339 407,534
Total expenditures 9,422,119 9,422,119 7,690,608 1,731,511 Revenue over (under) expenditures 436,030 436,030 3,652,284 3,216,254 Other Financing Sources
Lease revenues - - 147,947 147,947
Transfers in (out) - net (985,034) (985,034) (94,689) 890,345 Net Change in Fund Balance $ (549,004) (549,004) $ 3,705,542 $ 4,106,599 Fund Balance
Beginning of year 10,196,237
End of year $ 13,901,779
1017
Section 7, Item A.
43 CITY OF KERMAN
BUDGETARY COMPARISON SCHEDULE
STREET MAINTEANCE AND CONSTRUCTION CAPITAL PROJECT FUND YEAR ENDED JUNE 30, 2023
Variance with
Final Budget
Budgeted Amounts Actual Positive/
Original Final Amounts (Negative)
Revenue
Intergovernmental $ 3,343,091 3,343,091 $ 2,689,721 $ (653,370) $ Total revenue 3,343,091 3,343,091 2,689,721 (653,370)
Expenditures
Capital outlay 1,568,319 1,568,319 858,474 709,845
Total expenditures 1,568,319 1,568,319 858,474 709,845
Revenue over expenditures 1,774,772 1,774,772 1,831,247 56,475 Other Financing Sources/(Uses)
Transfers in/(out) - net - - (3,357) (3,357)
Change in Fund Balance $ 1,774,772 1,774,772 $ 1,827,890 $ 53,118 Fund Balance
Beginning of year 1,827,890
End of year $ 3,655,780
1018
Section 7, Item A.
44 CITY OF KERMAN
BUDGETARY COMPARISON SCHEDULE
STREET PROJECTS & DEVELOPMENT CAPITAL PROJECT FUND
YEAR ENDED JUNE 30, 2023
Variance with
Final Budget
Budgeted Amounts Actual Positive/
Original Final Amounts (Negative)
Revenue
License, permits and impact fees 311,776 $ 311,776 $ 153,138 $ (158,638) $ Interest 5,967 5,967 - 5,967
Total revenue 317,743 317,743 159,105 (158,638)
Expenditures
Public works 126,912 126,912 (84,453) 211,365
Community development 77,000 77,000 (159,214) 236,214
Total expenditures 203,912 203,912 447,579 (243,667)
Revenue over expenditures 113,831 113,831 (288,474) (402,305) Other Financing Sources/(Uses)
Transfers in/(out) - net - - - -
Change in Fund Balance $ 113,831 113,831 $ (288,474) $ (402,305) Fund Balance
Beginning of year 359,288
End of year $ 70,814
1019
Section 7, Item A.
45 CITY OF KERMAN SCHEDULE OF THE CITY’S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY LAST TEN YEARS* YEAR ENDED JUNE 30, 2023 Proportion of the net
pension liability
Proportionate share of
the net pension liability
Covered - employee
payroll
Proportionate share of the net pension
liability as percentage of
covered-employee payroll
Plan's fiduciary net
position
Plan's fiduciary net position as a
percentage of the Total Pension
Liability
2015 0.01281% 797,321 $ 1,144,549 $ 69.66% 4,290,975 $ 81.42% 2016 0.01575% 648,972 $ 1,241,193 $ 52.29% 3,869,632 $ 85.62% 2017 0.01854% 959,979 $ 1,457,400 $ 65.87% 3,916,861 $ 80.32% 2018 0.01899% 1,134,650 $ 1,411,999 $ 80.36% 4,136,749 $ 78.48%2019 0.01968% 1,154,435 $ 1,645,891 $ 70.14% 4,431,768 $ 79.33%2020 0.02088% 1,303,386 $ 1,585,991 $ 82.18% 4,934,602 $ 79.11%2021 0.02259% 1,504,784 $ 1,628,209 $ 92.42% 5,238,533 $ 77.68%2022 0.01971% 691,756 $ 1,558,752 $ 44.38% 6,678,594 $ 90.61% 2023 0.02684% 1,844,146 $ 1,726,380 $ 106.82% 6,626,406 $ 78.23% Proportion of the net
pension liability
Proportionate share of
the net pension liability
Covered - employee
payroll
Proportionate share of the net pension
liability as percentage of
covered-employee payroll
Plan's fiduciary net
position
Plan's fiduciary net position as a
percentage of the Total Pension
Liability
2015 0.02196% 1,366,654 $ 2,046,348 $ 66.79% 6,686,104 $ 83.03%2016 0.04266% 1,170,147 $ 1,858,214 $ 62.97% 7,331,180 $ 86.23%2017 0.04971% 1,726,827 $ 2,065,491 $ 83.60% 7,344,945 $ 80.96%2018 0.05351% 2,109,314 $ 2,138,981 $ 98.61% 8,344,687 $ 79.82%2019 0.05485% 2,067,174 $ 2,009,964 $ 102.85% 8,856,335 $ 81.08%2020 0.05836% 2,337,202 $ 2,297,565 $ 101.73% 9,508,983 $ 80.27%2021 0.06208% 2,618,410 $ 2,571,344 $ 101.83% 10,082,879 $ 79.38%2022 0.06029% 1,144,848 $ 2,360,679 $ 48.50% 12,469,009 $ 91.59%2023 0.06964% 3,258,465 $ 2,326,594 $ 140.05% 11,524,805 $ 104.34% Safety Plan
Miscellaneous Plan
*Fiscal year 2014-15 was the first year of implementation, therefore only nine years are shown. 1020
Section 7, Item A.
46 CITY OF KERMANSCHEDULE OF CONTRIBUTIONS LAST TEN YEARS* YEAR ENDED JUNE 30, 2023 Contractually required
contribution (actuarially
determined)
Contributions in
relation to the actuarially
determined
contributions
Contributions
deficiency (excess) Covered-employee payroll
Contributions as a percentage of coveredemployee payroll 2015 172,707 $ (172,707) $ - $ 1,144,549 $ 15.09%2016 182,432 $ (182,432) $ - $ 1,241,193 $ 14.70%2017 179,871 $ (179,871) $ - $ 1,457,400 $ 12.34%2018 194,771 $ (194,771) $ - $ 1,411,999 $ 13.79%2019 182,432 $ (182,432) $ - $ 1,645,891 $ 11.08%2020 248,979 $ (248,979) $ - $ 1,585,991 $ 15.70%2021 275,389 $ (275,389) $ - $ 1,628,209 $ 16.91%2022 318,886 $ (318,886) $ - $ 1,558,752 $ 20.46%2023 334,035 $ (334,035) $ - $ 1,726,380 $ 19.35% Contractually required
contribution (actuarially
determined)
Contributions in
relation to the actuarially
determined
contributions
Contributions
deficiency (excess) Covered-employee payroll
Contributions as a
percentage of coveredemployee payroll
2015 149,116 $ (149,116) $ - $ 2,046,348 $ 7.29%2016 139,800 $ (139,800) $ - $ 1,858,214 $ 7.52%2017 170,449 $ (170,449) $ - $ 2,065,491 $ 8.25%2018 198,655 $ (198,655) $ - $ 2,138,981 $ 9.29%2019 233,708 $ (233,708) $ - $ 2,009,964 $ 11.63%2020 266,848 $ (266,848) $ - $ 2,297,565 $ 11.61%2021 329,826 $ (329,826) $ - $ 2,571,344 $ 12.83%2022 365,112 $ (365,112) $ - $ 2,360,679 $ 15.47%2023 398,314 $ (398,314) $ - $ 2,326,594 $ 17.12% Miscellaneous
Safety Plan
*Fiscal year 2014-15 was the first year of implementation, therefore only nine years are shown. 1021
Section 7, Item A.
SUPPLEMENTAL ONLY INFORMATION
1022
Section 7, Item A.
47 CITY OF KERMAN COMBINING BALANCE SHEET NON-MAJOR GOVERNMENTAL FUNDS JUNE 30, 2023 Gas Senior Maintenance SB1 Road Park
Measure C Tax Center District Maintenance Grants
ASSETS
Cash and investments 406,181 $ 977,950 $ - $ 194,740 $ 817,196 $ 230 $ Due from other governments 36,391 170,863 7,387 - 65,070 18,551 Total assets $ 1,014,341 577,044 $ 7,387 $ 194,740 $ 882,266 $ 18,781 $ LIABILITIES AND FUND BALANCELiabilities
Accounts payable and accrued expense 8,361 $ 44,433 $ 388 $ 11,049 $ 330 $ 4,448 $ Due to other funds - - 6,999 - - 14,103
Total liabilities 44,433 8,361 7,387 11,049 330 18,551
Fund Balance
Restricted
Circulation improvements 568,683 969,908 - - 881,936 -
Development activities - - - 183,691 - 230
Unassigned - - - - - -
Total fund balance 568,683 969,908 - 183,691 881,936 230 Total liabilities and fund balance 577,044 $ 1,014,341 $ 7,387 $ 194,740 $ 882,266 $ 18,781 $ Special Revenue Funds
1023
Section 7, Item A.
48 CITY OF KERMAN COMBINING BALANCE SHEET NON-MAJOR GOVERNMENTAL FUNDS (CONTINUED) JUNE 30, 2023 Jobs/Housing Public Building Fire Park
Mitigation Facility Facility Development
ASSETS
Cash and investments 67,627 $ 31,779 $ 694,442 $ - $
Due from other governments - - - -
Total assets $ 31,779 67,627 $ 694,442 $ - $
LIABILITIES AND FUND BALANCELiabilities
Accounts payable and accrued expense - $ - $ - $ 7,175 $ Due to other funds - - - 14,267 Total liabilities - - - 21,442
Fund Balance
Restricted
Circulation improvements - - - -Development activities 67,627 31,779 694,442 - Unassigned - - - (21,442)
Total fund balance 67,627 31,779 694,442 (21,442)
Total liabilities and fund balance 67,627 $ 31,779 $ 694,442 $ - $ Capital Projects Funds
1024
Section 7, Item A.
49 CITY OF KERMAN
COMBINING BALANCE SHEET NON-MAJOR GOVERNMENTAL FUNDS (CONTINUED) JUNE 30, 2023 Debt Service Fund Total
Kerman Public Non-major
State Local Financing Governmental
Grants Transportation Authority Funds
ASSETS
Cash and investments - $ 1,913,642 $ - $ 5,103,787 $
Due from other governments 8,379 641,436 - 948,077
Total assets $ 1,922,021 641,436 $ - $ 6,051,864 $
LIABILITIES AND FUND BALANCELiabilities
Accounts payable and accrued expense 48,400 $ 156,213 $ - $ 280,797 $ Due to other funds - 593,036 - 628,405
Total liabilities 156,213 641,436 - 909,202
Fund Balance
Restricted
Circulation improvements - 1,765,808 - 4,186,335
Development activities - - - 977,769
Unassigned - - - (21,442)
Total fund balance - 1,765,808 - 5,142,662
Total liabilities and fund balance 641,436 $ 1,922,021 $ - $ 6,051,864 $ Captial Project Funds
1025
Section 7, Item A.
50 CITY OF KERMAN COMBINING STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE NON-MAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2023 Gas Senior Maintenance SB1 Road Park
Measure C Tax Center District Maintenance Grants
Revenue
Taxes - $ - $ - $ 355,159 $ 371,341 $ - $
Developer impact fees - - - - - -
Intergovernmental 634,095 417,753 13,877 - - 40,278
Charges for services - - 2,094 - - -
Rents - - - - - -
Interest 5,323 12,960 - 2,235 10,069 -
Other - - - - - -
Total revenue 430,713 639,418 15,971 357,394 381,410 40,278 Expenditures
Public works 429,341 142,730 - 322,469 - -
Community development - - - - - -
Social services - - 29,620 - - 40,048
Capital outlay 9,446 238,824 - 1,711 47,158 -
Debt service
Principal - - - - - -
Interest and fiscal charges - - - - - -
Total expenditures 381,554 438,787 29,620 324,180 47,158 40,048 Revenue over (under) expenditures 200,631 49,159 (13,649) 33,214 334,252 230 Other financing sources/(uses)
Loan proceeds - - - - - -
Operating transfers in/(out) - net 18,345 (52,724) 13,649 (24,496) - - (52,724) 18,345 13,649 (24,496) - -
Change in Fund Balance 67,504 147,907 - 8,718 334,252 230 Fund Balance
Beginning of year 420,776 902,404 - 174,973 547,684 -
End of year 568,683 $ 969,908 $ - $ 183,691 $ 881,936 $ 230 $ Special Revenue Funds
1026
Section 7, Item A.
51 CITY OF KERMAN COMBINING STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE NON-MAJOR GOVERNMENTAL FUNDS (CONTINUED) YEAR ENDED JUNE 30, 2023 Jobs/Housing Public Building Fire Park
Mitigation Facility Facility Development
Revenue
Taxes - $ - $ - $ - $
Developer impact fees - 221,610 122,248 167,491Intergovernmental - - - -Rents - - - -Interest 911 208 9,124 3,477Other - - - - Total revenue 221,818 911 131,372 170,968
Expenditures
Public works - - - -Community development - 21,412 - -Social services - - - 81,463Capital outlay - - - 145,091Debt service Principal - - - -Interest and fiscal charges - - - -
Total expenditures 21,412 - - 226,554
Revenue over (under) expenditures 911 200,406 131,372 (55,586) Other financing sources/(uses)
Operating transfers in/(out) - net - - - -
- - - -
Change in Fund Balance 200,406 911 131,372 (55,586)
Fund Balance
Beginning of year 66,716 (168,627) 563,070 34,144
End of year 67,627 $ 31,779 $ 694,442 $ (21,442) $
Capital Projects Funds
1027
Section 7, Item A.
52 CITY OF KERMAN COMBINING STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE NON-MAJOR GOVERNMENTAL FUNDS (CONTINUED) YEAR ENDED JUNE 30, 2023 Debt Service Fund Total
Kerman Public Non-major
State Local Financing Governmental
Grants Transportation Authority Funds
Revenue
Taxes - $ - $ - $ 726,500 $
Developer impact fees - - - 511,349
Intergovernmental 196,515 946,414 - 2,248,932
Rents - - 101,878 101,878
Interest - 24,291 - 68,598
Other 1,000 - - 1,000
Total revenue 971,705 196,515 101,878 3,660,351
Expenditures
Public works 70,343 189,430 - 1,154,313
Community development - - - 21,412
Social services - - - 151,131
Capital outlay - 205,662 - 647,892
Debt service
Principal - - 32,000 32,000Interest and fiscal charges - - 69,878 69,878 Total expenditures 395,092 70,343 101,878 2,076,626
Revenue over (under) expenditures 126,172 576,613 - 1,583,725 Other financing sources/(uses)
Operating transfers in/(out) - net (50,262) (426,172) - (521,660) (426,172) (50,262) - (521,660)
Change in Fund Balance 526,351 (300,000) - 1,062,065Fund Balance Beginning of year 300,000 1,239,457 - 4,080,597
End of year - $ 1,765,808 $ - $ 5,142,662 $
Capital Projects Funds
1028
Section 7, Item A.
BRYANT L. JOLLEY
CERTIFIED PUBLIC ACCOUNTANTS Bryant L. Jolley, C.P.A.
Ryan P. Jolley C.P.A.
Darryl L. Smith C.P.A.
Luis A. Perez C.P.A.
Lan T. Kimoto
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL
OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER
MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS
PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Honorable Mayor and City Council
City of Kerman, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of City of Kerman (the “City”), California, as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated March 25, 2024.
Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements, on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified.
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. 1029
Section 7, Item A.
54 Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
March 25, 2024
1030
Section 7, Item A.
BRYANT L. JOLLEY
CERTIFIED PUBLIC ACCOUNTANTS Bryant L. Jolley, C.P.A.
Ryan P. Jolley C.P.A.
Darryl L. Smith C.P.A.
Luis A. Perez C.P.A.
Lan T. Kimoto
INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR
EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE
REQUIRED BY THE UNIFORM GUIDANCE
To the Honorable Mayor and City Council
City of Kerman, California
Report on Compliance for Each Major Federal Program
Opinion on Each Major Federal Program
We have audited City of Kerman (the “City”), California’s compliance with the types of compliance requirements identified as subject to audit in the OMB Compliance Supplement that could have a direct and material effect on each of the City’s major federal programs for the year ended June 30, 2022. The City’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs.
In our opinion, the City complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2022.
Basis for Opinion on Each Major Federal Program
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Our responsibilities under those standards and the Uniform Guidance are further described in the Auditor’s Responsibilities for the Audit of Compliance section of our report.
We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for each major federal program. Our audit does not provide a legal determination of the City’s compliance with the compliance requirements referred to above.
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’s federal programs. 1031
Section 7, Item A.
56 Auditor’s Responsibilities 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’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 generally accepted auditing standards, Government Auditing Standards, and the Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that 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’s compliance with the requirements of each major federal program as a whole.
In performing an audit in accordance with generally accepted auditing standards, Government Auditing Standards, and the Uniform Guidance, 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’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’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 the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of the City’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 and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit.
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 with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program 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 with a type of compliance requirement of a federal program 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 Responsibilities for the Audit of Compliance section above 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 were not identified. 1032
Section 7, Item A.
57 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 the Uniform Guidance.
Accordingly, this report is not suitable for any other purpose.
March 25, 2024
1033
Section 7, Item A.
58 CITY OF KERMAN
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2023
Assistance Agency or
Federal Grantor/Pass-through Listing Pass-through Federal Grantor/Program Title Number Number Expenditures
U.S. Department of Transportation
Passed through California Department of Transportation
RSTP Regional Surface Transportation Program 20.205 STPL5291(025) 66 Surface Transportation Block Grant Program 20.205 STPL5291(029) 434,175 Surface Transportation Block Grant Program 20.205 STPL5291(030) 238,780 Congestion Mitigation and Air Quality Grant Program 20.205 CML5291(031) 113,806 Surface Transportation Block Grant Program 20.205 STPL5291(033) 27,506 Surface Transportation Block Grant Program 20.205 STPL5291(034) 24,125 Congestion Mitigation and Air Quality Grant Program 20.205 STPL5291(027) 7,802 846,260
U.S. Department of Housing and Urban Development
Passed through County of Fresno
Community Development Block Grant 14.218 09371 39,817
U.S. Department of Homeland Security
Passed through California Department of Finance
Corona Relief Fund 21.019 N/A 16,380
U.S. Department of Justice
Homeland Security Grant Program 97.067 019-00000 7,149
Total Federal Expenditures $ 909,606
1034
Section 7, Item A.
59 CITY OF KERMAN
NOTES SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2023
Note 1 – Significant Accounting Policies
The accompanying Schedule of Expenditures of Federal Awards (SEFA) presents the activity of all federal award programs of the City of Kerman, California (the City). Federal awards received directly from federal agencies as well as federal awards passed through other nonfederal agencies, primarily the State of California, are included in the SEFA. The City’s reporting entity is defined in Note 1 to the City’s basic financial statements.
Note 2 – Basis of Accounting
The accompanying SEFA is presented using the modified accrual basis of accounting for grants accounted for in the governmental fund types and the accrual basis of accounting for grants accounted for in the proprietary fund types, as described in Note 1 to the City’s basic financial statements. The information in the SEFA is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance).
Therefore, some amounts presented in, or used in the preparation of, the SEFA may differ from amounts presented in the basic financial statements.
Note 3 – Relationship to the Financial Statements
Expenditures of federal awards are reported in the City’s basic financial statements as expenditures/expenses in the General Fund, nonmajor special revenue funds, nonmajor capital project funds, and the enterprise funds.
Note 4 – Indirect Cost Rate
The City did not elect to use the 10% de minimus cost rate as covered in 2 CFR §200.414. 1035
Section 7, Item A.
60 CITY OF KERMAN
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2023
A. Summary of Auditor’s Results
Financial Statements
Type of auditor’s report issued: Unmodified
Internal control over financial reporting:
Material weaknesses identified? Yes No
Significant deficiency(ies) identified? Yes None reported Non-compliance material to financial statements
noted? Yes No
Federal Awards
Internal control over major programs:
Material weaknesses identified? Yes No
Significant deficiency(ies) identified? Yes None reported Type of auditor’s report issued on compliance for
major programs: Unmodified
Any audit findings disclosed that are required to
be reported in accordance with 2 CFR
200.516(a)? Yes No
Identification of Major Programs
Assistance Listing Number Name of Federal Program or Cluster
20.205 Highway Planning and Construction
Dollar threshold used to distinguish between
Type A and Type B programs: $750,000
Auditee qualified as low-risk auditee? Yes No
B. Findings – Financial Statements Audit
None noted.
C. Findings and Questioned Costs – Major Federal Award Programs Audit None noted.
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61 CITY OF KERMAN
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
YEAR ENDED JUNE 30, 2023
There were no prior year audit findings.
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CITY OF KERMAN
MANAGEMENT REPORT
FOR THE YEAR ENDED JUNE 30, 2023
'ATTACHMENT B'
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Section 7, Item A.
2 TABLE OF
CONTENTS
Page
Required Communications 1 - 3
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BRYANT L. JOLLEY
CERTIFIED PUBLIC ACCOUNTANTS Bryant L. Jolley C.P.A.
Ryan P. Jolley C.P.A.
Darryl L. Smith C.P.A.
Luis A. Perez C.P.A.
Lan T. Kimoto
901 “N” STREET, SUITE 104 FIREBAUGH, CALIFORNIA 93622 PHONE 559.659.3045 FAX 559.659.0615 To the Honorable Mayor and City Council
City of Kerman, California
We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Kerman for the year ended June 30, 2023. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards and Government Auditing Standards, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated August 1, 2023. Professional standards also require that we communicate to you the following information related to our audit.
Significant Audit Matters
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by City are described in Note 1 to the financial statements.
No new accounting policies were adopted and the application of existing policies was not changed during 2023. We noted no transactions entered into by City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period.
Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the City’s financial statements were:
Management has determined the economic useful lives of fixed assets based on past history of similar types of assets, future plans as to their use, and other factors that impact their economic value to the City. We evaluated the key factors and assumptions used by management in computing depreciation expense and believe that it is reasonable in relation to the financial statements taken as a whole.
Management’s estimate of the allowance for doubtful accounts is based on an evaluation of collectability primarily focused on past due accounts. We evaluated the key factors and assumptions used to develop the allowance for doubtful accounts in determining that it is reasonable in relation to the financial statements as a whole. 1040
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2 Management’s estimate of the net pension liability and related deferrals is based on actuarial valuations which include significant assumptions regarding discount rate, inflation, payroll growth, projected salary increases and investment rate of return. We evaluated the key factors and assumptions used to develop the liability and related deferrals in determining that it is reasonable in relation to the financial statements taken as a whole.
The financial statement disclosures are neutral, consistent, and clear.
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing our audit.
Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. Management has corrected all such misstatements. In addition, none of the misstatements detected as a result of audit procedures and corrected by management were material, either individually or in the aggregate, to each opinion unit’s financial statements taken as a whole.
Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter that could be significant to the financial statements or the auditor's report. We are pleased to report that no such disagreements arose during the course of the audit.
Management Representations
We have requested certain representations from management that are included in the management representation letter date March 25, 2024.
Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to City of Kerman’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants.
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3 Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as City of Kerman’s auditors.
However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention.
Other Matters
We applied certain limited procedures to the Budgetary Comparison Schedules, Proportionate Share of Net Pension Liability, and Schedule of Contributions which are required supplementary information (RSI) that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements.
We did not audit the RSI and do not express an opinion or provide any assurance on the RSI.
We were engaged to report on supplementary information, as listed in the table of contents, which accompany the financial statements but are not RSI. With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves.
Restriction on Use
This information is intended solely for the information and use of the City Council and management of City of Kerman and is not intended to be, and should not be, used by anyone other than these specified parties.
March 25, 2024
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STAFF REPORT
MEETING DATE: April 24, 2024
PRESENTER: John Jansons, City Manager
SUBJECT: Consideration of MOU with County of Fresno City Ordinance Relating to Infectious Materials (JAJ)
RECOMMENDATION: That the Council take action as follows:
(1) Adopt Resolution Approving Memorandum of Understanding (MOU) with County of Fresno to Authorize County to enforce Fresno County Infectious Materials Ordinance in the City of Kerman; and
(2) Waive full reading and Introduce Ordinance Adding Chapter 8.44 to Title 8 of the Kerman Municipal Code Relating to Infectious Materials.
DISCUSSION:
The County of Fresno in collaboration with the City of Reedley managed a significant public health response in addressing issues with an unlicensed laboratory operating within the city limits of Reedley. The County has had significant communication and specific recommendations to Federal and State legislators on how to prevent this from happening in the future while improving our national oversight and surveillance of privately funded laboratories.
Unfortunately, there is no national or state solution at this time. The County Board of Supervisors adopted the Fresno County Infectious Materials Ordinance, a local ordinance that will provide some local oversight and authority to oversee privately funded laboratories that do not fall under the Clinical Laboratory Improvement Amendments (42 USC 263a).
The County ordinance applies only to the unincorporated area of Fresno County. The County has offered an MOU to incorporated cities that will allow the County to enforce the ordinance within cities if executed and if the City delegates authority to County to enforce. The MOU is drafted to reflect that cities maintain their local control, entities are only liable for costs they incur and thus the County would not charge their costs to a city, and County’ communication with the City will be key on a joint response.
Approval of the recommended action will approve an MOU with the County to enforce its Infectious Materials Ordinance and adopt an ordinance relating to Infectious Materials. The Ordinance, if adopted, will incorporate by reference the recent County’s ordinance which will provide the authority for the County to conduct onsite visits on private property and evaluate if laboratories that are not regulated by CLIA, 42 USC 263a and 42 CFR 493 are in compliance 1043
Section 7, Item B.
with Hazardous Materials laws and general applicable clinical laboratory safety requirements (e.g. medical waste, environmental controls, policy, and procedures). This Ordinance will not apply to CLIA operated laboratories which include commercial laboratories (e.g. Quest, Lab Corp), doctors’ offices that obtain a CLIA license or waiver from CLIA, and/or clinics operating under a CLIA license or waiver from CLIA. The Department would operationalize a team from its Hazardous Materials program and its Public Health Laboratory. This team would conduct annual onsite visits to confirm compliance with hazardous materials and laboratory operations.
ATTACHMENT:
A. Resolution
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Section 7, Item B.
Attachment ‘A’
RESOLUTION NO. 24-__
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF KERMAN APPROVING
A MEMORANDUM OF UNDERSTANDING BETWEEN THE COUNTY OF FRESNO AND
THE CITY OF KERMAN TO ENFORCE FRESNO COUNTY INFECTIOUS MATERIALS
ORDINANCE IN THE CITY OF KERMAN
WHEREAS, the Fresno County Board of Supervisors adopted the Fresno County Infectious Materials Ordinance, a local ordinance that will provide some local oversight and authority to oversee privately funded laboratories that do not fall under the Clinical Laboratory Improvement Amendments (42 USC 263a); and
WHEREAS, the County ordinance applies only to the unincorporated area of Fresno County; however, the County has offered a Memorandum of Understanding (MOU) to incorporated cities that will allow the County to enforce the ordinance within cities if executed and if the City delegates authority to County to enforce; and WHEREAS, the City wishes to have the County ordinance enforced in the City of Kerman.
NOW, THEREFORE, the City Council of the City of Kerman resolves as follows:
SECTION 1. The above recitals are true and correct and incorporated herein by reference.
SECTION 2. The Council hereby approves the Memorandum of Understanding between the County of Fresno and the City of Kerman which is attached as Exhibit ‘A’ and incorporated by reference.
SECTION 3. The City Council Authorizes the City Manager to execute the MOU.
SECTION 4. This resolution is effective upon adoption.
[CERTIFICATION ON NEXT PAGE]
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Section 7, Item B.
The foregoing resolution was adopted by the Kerman City Council at a regularly scheduled meeting held on this 24th day of April, 2024, by the following vote.
AYES:
NOES:
ABSENT:
ABSTAIN:
The foregoing resolution is hereby approved.
_______________________
Maria Pacheco
Mayor
ATTEST:
____________________________
Josie Camacho
Interim City Clerk
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Section 7, Item B.
ORDINANCE NO. 24-___
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF KERMAN ADDING CHAPTER 8.44 TO TITLE 8 OF THE KERMAN MUNICIPAL CODE RELATING TO
INFECTIOUS MATERIALS ORDINANCE
The City Council of the City of Kerman does ordain as follows:
SECTION 1. Chapter 8.44 is added to Title 8 the Kerman Municipal Code to read as follow:
8.44.010 This chapter shall be known as the Kerman Infectious Disease Ordinance.
8.44.020 The City of Kerman hereby adopts Fresno County Ordinance Section 1 Chapter 8.52 and delegates enforcement authority to the County of Fresno under said ordinance (Fresno County Ordinance Code Section 8.52.070).
SECTION 2. CEQA. A preliminary environmental assessment has been performed for this project pursuant the California Environmental and Quality Act (CEQA). The City Council finds and determines with certainty that, pursuant to CEQA Guidelines Section 15061(b)(3), there is no possibility that this project may have a significant, adverse, impact on the environment. This is because this project involves purely procedural policies with no impacts on the environment.
Therefore, this project is not subject to CEQA.
SECTION 3. Publication. This ordinance shall be published in accordance with the provisions of Government Code Section 36933.
SECTION 4. Effective Date. This Ordinance shall become effective thirty (30) days after adoption.
The foregoing ordinance was introduced at a regular meeting of the City of Kerman City Council held on this ____ day of ______ , 2024, and was passed and adopted at a regular meeting of the City of Kerman City Council held on ____________________, 2024, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
The foregoing ordinance is hereby approved.
_______________________________
Maria Pacheco, Mayor
ATTEST:
_______________________________
Josie Camacho
Interim City Clerk
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Section 7, Item B.
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25 MEMORANDUM OF UNDERSTANDING BETWEEN
THE COUNTY OF FRESNO AND THE CITY OF KERMAN
This Memorandum of Understanding (“MOU”) is dated ___________________ and is between City of Kerman, a municipal corporation of the State of California (“City”), and the County of Fresno, a political subdivision of the State of California (“County”). County and City are each a “Party” to this MOU and are collectively “the Parties.” Recitals
A. The Parties wish to establish a monitoring and inspection system to oversee privately funded laboratories that handle infectious agents without oversight from an existing permitting public agency.
B. The joint response between the County of Fresno and the City of Reedley in 2023, dealing with an unlicensed laboratory resulted in a successful management of a potential public health issue and provided both entities the ability to retain their local control while being able to consistently advocate for additional state and federal resources. This incident has led the County to pursue a negotiated agreement with municipalities based on the successful 2023 model.
C. The County adopted Section 1. Chapter 8.52 of the Ordinance Code of Fresno County, entitled “FRESNO COUNTY INFECTIOUS MATERIALS ORDINANCE,” that applies to all nonClinical Laboratory Improvement Amendments (CLIA) regulated laboratories and research and development businesses (as that term is defined in 42 USC §263a) located or operating within the geographic area in which the health department enforces state and local statutes, orders, quarantines, rules, regulations and ordinances relating to public health in the unincorporated area of Fresno County or within the incorporated area of any city within the county, to which cities have signed a memorandum of understanding that authorizes the County to conduct oversight of the laboratories.
The Parties therefore agree as follows:
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25 City’s Responsibilities
1.1 In order to authorize the County to enforce the provisions of this public safety “FRESNO COUNTY INFECTIOUS MATERIALS ORDINANCE” in the incorporated area of the City, the City must adopt the provisions of this ordinance delegating enforcement authority to the County and must enter into this MOU with the County.
1.2 The City will retain all jurisdictional authority not pertaining to items contained in the “FRESNO COUNTY INFECTIOUS MATERIALS ORDINANCE.”
1.3 The City will provide the County a list of non-CLIA sites in their jurisdiction that the County will need to follow up on.
1.4 The City will report suspected non-CLIA sites to assess applicability to “FRESNO COUNTY INFECTIOUS MATERIALS ORDINANCE.”
County’s Responsibilities
2.1 Under the provisions of the ordinance, the County will evaluate if appropriate certifications, permits, environmental controls, safety protocols and licenses are in place for the handling of infectious materials and hazardous materials located at the non-CLIA site.
2.2 Any concerns observed by County staff will be communicated to designated City staff and a joint response would be coordinated with the business owner and property owner.
Cost Reimbursement
3.1 The Parties will establish appropriate cost reimbursement methods to support activities in responding to the “FRESNO COUNTY INFECTIOUS MATERIALS ORDINANCE”.
City will be responsible to obtain reimbursement of all costs incurred by the City and not recouped by the fees developed by the City, other funding resources or other recovery actions.
County will be responsible to obtain reimbursement of all costs incurred by the County and not recouped by the fees developed by the County, other funding resources or other recovery actions.
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25 3.2 Incidental Expenses. The Parties are solely responsible for all of its costs and expenses that are not specified as reimbursable under this MOU.
Term of MOU
4.1 Term. This MOU is effective on the date that the Parties sign this MOU and shall remain in effect, except as provided in Article 6, “Termination and Suspension,” below.
Notices
5.1 Contact Information. The persons and their addresses having authority to give and receive notices provided for or permitted under this MOU include the following:
For the County:
County Administrative Officer
County of Fresno
Hall of Records, Room 300
2281 Tulare St
Fresno, CA 93775
For the City:
John Jansons
City of Kerman
850 S. Madera Ave.
Kerman, CA 93630
5.2 Change of Contact Information. Either party may change the information in section
5.1 by giving notice as provided in section 5.3.
5.3 Method of Delivery. Each notice between the County and the City provided for or permitted under this MOU must be in writing, state that it is a notice provided under this MOU, and be delivered either by personal service, by first-class United States mail, by an overnight commercial courier service, or by telephonic facsimile transmission. (A) A notice delivered by personal service is effective upon service to the recipient. (B) A notice delivered by first-class United States mail is effective three County business days after deposit in the United States mail, postage prepaid, addressed to the recipient.
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25 (C) A notice delivered by an overnight commercial courier service is effective one County business day after deposit with the overnight commercial courier service, delivery fees prepaid, with delivery instructions given for next day delivery, addressed to the recipient.
(D) A notice delivered by telephonic facsimile transmission or by PDF document attached to an email is effective when transmission to the recipient is completed (but, if such transmission is completed outside of County business hours, then such delivery is deemed to be effective at the next beginning of a County business day), provided that the sender maintains a machine record of the completed transmission.
5.4 Claims Presentation. For all claims arising from or related to this MOU, nothing in this MOU establishes, waives, or modifies any claims presentation requirements or procedures provided by law, including the Government Claims Act (Government Code, section 810 et seq.).
Termination and Suspension
6.1 Termination without Cause. The Parties may terminate this MOU by giving at least 30 days advance written notice to the other Party.
6.2 No Penalty or Further Obligation. Any termination of this MOU by the County or City under this Article 6 is without penalty to or further obligation of the County or City.
6.3 Termination Due to Additional Federal or State Legislation. Upon approval of Federal or State legislation that regulates non-CLIA laboratories, this MOU would immediately terminate.
Article 7
Indemnity and Defense
7.1 Mutual Indemnity. The City shall indemnify and hold harmless and defend the County (including its officers, agents, employees, and volunteers) against all claims, demands, injuries, damages, costs, expenses (including attorney fees and costs), fines, penalties, and liabilities of any kind to the County, the City, or any third party that arise from or relate to the performance or failure to perform by the City (or any of its officers, agents, subcontractors, or 1051
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25 employees) under this MOU. The County may conduct or participate in its own defense without affecting the City’s obligation to indemnify and hold harmless or defend the County. The County shall indemnify and hold harmless and defend the City (including its officers, agents, employees, and volunteers) against all claims, demands, injuries, damages, costs, expenses (including attorney fees and costs), fines, penalties, and liabilities of any kind to the County, the City, or any third party that arise from or relate to the performance or failure to perform by the County (or any of its officers, agents, subcontractors, or employees) under this MOU. The City may conduct or participate in its own defense without affecting the County’s obligation to indemnify and hold harmless or defend the City.
7.2 Survival. This Article 7 survives the termination of this MOU.
Public Records
8.1 Public Records. The County is not limited in any manner with respect to its public disclosure of this MOU or any record or data that the City may provide to the County. The County’s public disclosure of this MOU or any record or data that the City may provide to the County may include but is not limited to the following:
(A) The County may voluntarily, or upon request by any member of the public or governmental agency, disclose this MOU to the public or such governmental agency. (B) The County may voluntarily, or upon request by any member of the public or governmental agency, disclose to the public or such governmental agency any record or data that the City may provide to the County, unless such disclosure is prohibited by court order.
(C) This MOU, and any record or data that the City may provide to the County, is subject to public disclosure under the Ralph M. Brown Act (California Government Code, section 54950).
(D) This MOU, and any record or data that the City may provide to the County, is subject to public disclosure as a public record under the California Public Records Act (California Government Code, section 7920.000 et seq.) (“CPRA”). 1052
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25 (E) This MOU, and any record or data that the City may provide to the County, is subject to public disclosure as information concerning the conduct of the people’s business of the State of California under California Constitution, Article 1, section 3, subdivision (b).
(F) Any marking of confidentiality or restricted access upon or otherwise made with respect to any record or data that the City may provide to the County shall be disregarded and have no effect on the County’s right or duty to disclose to the public or governmental agency any such record or data.
8.2 Public Records Act Requests. If the County receives a written or oral request under the CPRA to publicly disclose any record that is in the City’s possession or control, and which the County has a right, under any provision of this MOU or applicable law, to possess or control, then the County may demand, in writing, that the City deliver to the County, for purposes of public disclosure, the requested records that may be in the possession or control of the City. Within five business days after the County’s demand, the City shall (a) deliver to the County all of the requested records that are in the City’s possession or control, together with a written statement that the City, after conducting a diligent search, has produced all requested records that are in the City’s possession or control, or (b) provide to the County a written statement that the City, after conducting a diligent search, does not possess or control any of the requested records. The City shall cooperate with the County with respect to any County demand for such records. If the City wishes to assert that any specific record or data is exempt from disclosure under the CPRA or other applicable law, it must deliver the record or data to the County and assert the exemption by citation to specific legal authority within the written statement that it provides to the County under this section. The City’s assertion of any exemption from disclosure is not binding on the County, but the County will give at least 10 days’ advance written notice to the City before disclosing any record subject to the City’s assertion of exemption from disclosure. The City shall indemnify the County for any courtordered award of costs or attorney’s fees under the CPRA that results from the City’s delay, 1053
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25 claim of exemption, failure to produce any such records, or failure to cooperate with the County with respect to any County demand for any such records.
General Terms
9.1 Modification. Except as provided in Article 6, “Termination and Suspension,” this MOU may not be modified, and no waiver is effective, except by written agreement signed by both Parties. The City acknowledges that County employees have no authority to modify this MOU except as expressly provided in this MOU.
9.2 Non-Assignment. Neither Party may assign its rights or delegate its obligations under this MOU without the prior written consent of the other Party.
9.3 Governing Law. The laws of the State of California govern all matters arising from or related to this MOU.
9.4 Jurisdiction and Venue. This MOU is signed and performed in Fresno County, California. City consents to California jurisdiction for actions arising from or related to this MOU, and, subject to the Government Claims Act, all such actions must be brought and maintained in Fresno County.
9.5 Construction. The final form of this MOU is the result of the Parties’ combined efforts. If anything in this MOU is found by a court of competent jurisdiction to be ambiguous, that ambiguity shall not be resolved by construing the terms of this MOU against either Party.
9.6 Days. Unless otherwise specified, “days” means calendar days.
9.7 Headings. The headings and section titles in this MOU are for convenience only and are not part of this MOU.
9.8 Severability. If anything in this MOU is found by a court of competent jurisdiction to be unlawful or otherwise unenforceable, the balance of this MOU remains in effect, and the Parties shall make best efforts to replace the unlawful or unenforceable part of this MOU with lawful and enforceable terms intended to accomplish the Parties’ original intent.
9.9 No Waiver. Payment, waiver, or discharge by the County of any liability or obligation of the City under this MOU on any one or more occasions is not a waiver of performance of any 1054
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25 continuing or other obligation of the City and does not prohibit enforcement by the County of any obligation on any other occasion.
9.10 Entire MOU. This MOU is the entire agreement between the Parties with respect to the subject matter of this MOU, and it supersedes all previous negotiations, proposals, commitments, writings, advertisements, publications, and understandings of any nature unless those things are expressly included in this MOU.
9.11 No Third-Party Beneficiaries. This MOU does not and is not intended to create any rights or obligations for any person or entity except for the Parties.
9.12 Authorized Signature. The City represents and warrants to the County that:
(A) The City is duly authorized and empowered to sign and perform its obligations under this MOU.
(B) The individual signing this MOU on behalf of the City is duly authorized to do so and his or her signature on this MOU legally binds the City to the terms of this MOU.
9.13 Electronic Signatures. The Parties agree that this MOU may be executed by electronic signature as provided in this section.
(A) An “electronic signature” means any symbol or process intended by an individual signing this MOU to represent their signature, including but not limited to (1) a digital signature; (2) a faxed version of an original handwritten signature; or (3) an electronically scanned and transmitted (for example by PDF document) version of an original handwritten signature.
(B) Each electronic signature affixed or attached to this MOU (1) is deemed equivalent to a valid original handwritten signature of the person signing this MOU for all purposes, including but not limited to evidentiary proof in any administrative or judicial proceeding, and (2) has the same force and effect as the valid original handwritten signature of that person.
(C) The provisions of this section satisfy the requirements of Civil Code section 1633.5, subdivision (b), in the Uniform Electronic Transaction Act (Civil Code, section 1633.1 et seq.).
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25 (D) Each Party using a digital signature represents that it has undertaken and satisfied the requirements of Government Code section 16.5, subdivision (a), paragraphs (1) through (5), and agrees that each other Party may rely upon that representation.
(E) This MOU is not conditioned upon the Parties conducting the transactions under it by electronic means and either Party may sign this MOU with an original handwritten signature.
9.14 Counterparts. This MOU may be signed in counterparts, each of which is an original, and all of which together constitute this MOU. [SIGNATURE PAGE FOLLOWS]
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25 The Parties are signing this MOU on the date stated in the introductory clause.
CITY OF KERMAN
_________________________________
John Jansons, City Manager
850 S. Madera Ave.
Kerman, CA 93630
COUNTY OF FRESNO
_____________________________________
Paul Nerland, County Administrative Officer or
designee
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Section 7, Item B.
MEETING DATE: April 24, 2024
PRESENTER: Steve Wilkins, Chief of Police
SUBJECT: Annual Agreement with the Kerman Unified School District for School Resource Officers (SW)
RECOMMENDATION: Council by motion adopt resolution approving agreement with the Kerman Unified School District for School Resource Officers for FY 2024-2025.
EXECUTIVE SUMMARY:
The City of Kerman has entered annual agreements with the Kerman Unified School District to provide School Resource Officer support to the district campuses. Under the annual agreement, Kerman Police personnel respond to requests for law enforcement- related services to district properties. These services are provided 24 hours a day, each day of the year. However, the City provides a specific presence of School Resource Officers during normal school hours and events and the District reimburses the City for the costs associated with providing police services.
DISCUSSION:
Historically, the Kerman Police Department has provided a police response to law enforcement related incidents at KUSD properties. The District has been paying to reimburse the cost of police services for two full-time police officers and will continue to do under the proposed agreement.
The District and the City may agree by mutual written agreement to increase the number of fulltime police officers to three for fiscal year 2024-2025. The City benefits from the additional workforce optionsthese officers provide and utilizesthe officersfor non-school related functions during times when school is not in session. Additionally, having officers dedicated to KUSD, reduces the workload on the police department as without them, the responsibility for calls for service on KUSD properties would fall to the patrol officers patrolling the city.
FISCAL IMPACT:
The City and The District have reviewed the costs of School Resource Officers to include salaries, benefits, and equipment.
The District agrees to pay City a total of $231,995.23 for the two SRO’s to provide specialized police services to the District. Payment will be made in two installments of $115,997.61 to be paid upon being invoiced by the City of Kerman in September 2024 and January 2025. Payments will be made no later than 30 days from the invoice date. The fees paid will be used by the City to cover the cost of the salary, benefits, and equipment needed to perform duties of the SRO’s.
ATTACHMENTS:
A. Resolution w/Exhibits
STAFF REPORT
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Section 7, Item C.
Attachment ‘A’
RESOLUTION NO. 24–
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF KERMAN
APPROVING THE ANNUAL AGREEMENT BETWEEN THE CITY OF KERMAN
AND THE KERMAN UNIFIED SCHOOL DISTRICT FOR SCHOOL RESOURCE OFFICERS FOR FY 2024-2025
WHEREAS, the annual agreement between the City of Kerman (City) and the Kerman Unified School District (District) for law enforcement school resource officer services expires on June 30, 2024; and
WHEREAS, the City would like to enter a new annual agreement for law enforcement school resource officer services.
NOW THEREFORE, the City Council of the City of Kerman resolves as follows:
1. The foregoing recitals are true and correct and incorporated byreference.
2. The Council approves the 2024/2025 annual Agreement for School Resource Officers which is attached as Exhibit ‘A’ and incorporated by reference.
3. The Council authorizes the city manager to sign the agreement on behalf of the City.
4. This resolution is effective upon adoption.
The foregoing resolution was adopted by the Kerman City Council at a regularly scheduled meeting held on the 24th day of April 2024, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
This resolution is hereby adopted.
ATTEST:
Maria Pacheco
Mayor
Josie Camacho
Interim City Clerk
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Section 7, Item C.
Exhibit ‘A’
SCHOOL RESOURCE OFFICER AGREEMENT
BETWEEN THE CITY OF KERMAN AND THE KERMAN UNIFIED SCHOOL DISTRICT FOR POLICE SERVICES FOR FY 2024-2025
This School Resource Officer Agreement (Agreement) is entered into on July 1, 2024, by and between the City of Kerman, a municipal corporation, ("City"), and The Kerman Unified School District ("District").
WHEREAS, District recognizes that the Kerman Police Department's provides necessary public safety and law enforcement services to the City which benefits District; and
WHEREAS, District further recognizes that the Kerman Police Department's assignment of School Resource Officers assigned to the District's schools to perform regular duty law enforcement services is greatly beneficial to District in assisting District in providing its students with campuses which are safe, secure, and peaceful; and WHEREAS, City recognizes that assignment of School Resource Officers to District Schools will make a safer, secure, and peaceful City.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and of the covenants, conditions, and premises hereinafter contained, to be kept and performed by the respective parties, it is mutually agreed as follows:
Section 1. Role and Responsibilities the City agrees to assign (2) two Police Officers to Kerman High School and its feeder elementary and middle schools as School Resource Officers (SRO). The parties may mutually agree in writing to additional SROs based on the District’s funding and the Police Department’s availability. The base of operationsfor each SRO will be Kerman High School, where it is understood that the officer will respond to nonschool calls, as needed, and attend meetings and training, as required by the Kerman Police Department. The scope of work shall be limited to those duties described in the Scope of Work document attached hereto as Exhibit "A" and incorporated by this reference.
Section 2. Compensation District agrees to pay City a total of $231,995.23 for the two SRO's to provide these services. Payment will be made in two installments of $115,997.61 to be paid upon being invoiced by the City of Kerman in September 2024 and January 2025. Payments will be made no later than 30 days from the invoice date. The fees paid will be used by the City to cover the cost of the salary, benefits, and equipment needed to perform duties of the SRO's. 1060
Section 7, Item C.
Section 3. Effectiveness, Duration and Termination This Agreement shall be effective as of the date first written above, and shall remain in effect for an initial term running through June 30, 2025. Either party may at any time terminate this Agreement without cause at the party's convenience by giving not less than 30 days prior written notice to the other party.
Upon such termination, all rights and obligations of each party under this Agreement shall cease as of the Effective Date of Termination, except for those specific obligations that shall survive termination as set forth herein. In the event of early termination, parties agree to pay or reimburse a pro- rated share of the compensation based upon a 12-month timeframe.
Section 4. Indemnification
A. The District shall indemnify, defend, and hold harmless the City, its officers, officials, employees, and volunteers from and against any and all liability, claims, damage, cost, expenses, awards, fines, judgments, and expenses of litigation (including, without limitation, costs, attorney fees, expert witness fees and prevailing party fees and cost) of every nature arising out of or in connection with the assigned officer's performance of work or his or her failure to comply with any of its obligations contained in the Agreement, except such loss or damage which was caused by the active negligence by the City, or the gross or willful misconduct of the assigned officer.
B. The City shall indemnify, defend, and hold harmless the District, its officers, officials, employees, and volunteers from and against any and all liability, claims, damage, cost, expenses, awards, fines, judgments, and expenses of litigation (including, without limitation, costs, attorney fees, expert witness fees and prevailing party fees and cost) of every nature arising out of the active negligence by the City or the gross or willful misconduct of the assigned officer during the performance of work hereunder.
C. If the District rejects a tender of defense by the City and/or the assigned officer underthis Agreement, and it is later determined that the City and/or the officer breached no duty of care and/or was immune from liability, the District shall reimburse the City and/or officer for any and all litigation expenses (including, without limitation, costs, attorney fees, expert witness fees and prevailing party fees and cost). A duty of care orimmunity determination may be made by a jury or a court, including a declaratory relief determination by a court after the City and/or officer settles a liability claim, with or without participation by the District.
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D. The Parties acknowledge that it is not the intent ofthe Agreement to create a duty of care by the City or its assigned officer that they would not owe in the absence of the Agreement. The Agreement does not create an affirmative duty of care (including, without limitation, a duty to protect, a duty to deter and/or a duty to intervene) by the City or the assigned officer and the absence of the assigned officer and/or the patrol vehicle is not a material breach of this Agreement. The Parties further acknowledge that by entering into this Agreement neither the City nor its assigned officer intends to waive any immunities to which they would be entitled in the absence of the Agreement.
E. In the event of concurrent negligence on the part of the District or any of its officers, officials, employees, agents or volunteers, and City or any of its officers, officials, employees, agents or volunteers, the liability for any and all such claims, demands and actions in law or equity for such losses, fines, penalties, forfeitures, costs and damages shall be apportioned under the State of California's theory of comparative negligence as presently established or as may be modified hereafter.
F. The parties' duty to indemnify each other and its officials, officers, employees, agents and volunteers shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as a limitation upon the Agreement of indemnification to be provided by the parties. Approval or purchase of any insurance contracts or policies shall in no way relieve from liability nor limit the liability of the parties or any of its officers, board members, employees, agents, volunteers, invitees, caterers, concessionaires, suppliers, vendors, consultants, contractors or subcontractors.
G. This section shall survive termination or expiration of this Agreement.
Section 5. Entire Agreement This Agreement, including all recitals constitutes the entire agreement of the Parties. This Agreement may be amended or modified only by the mutual written agreement of the Parties. This Agreement is invalid unless approved by the legislative body of each Party, although it may be executed by an authorized agent of each Party. An authorized agent of the City shall be a person specifically authorized by the City Council to execute this Agreement.
Section 6. Insurance It is understood and agreed that District and City maintain insurance policies or self-insurance programs to fund their respective liabilities. Evidence of Insurance, Certificates of Insurance or other similar documentation shall not be required of either party under this Agreement.
Section 7. Nondiscrimination Neither party shall employ discriminatory practices in their respective performance under this Agreement on the basis of race, religious creed, color, 1062 Section 7, Item C.
national origin, ancestry, physical disability, mental disability, medical condition, marital status, sex, age,sexual orientation, ethnicity, status as a disabled veteran or veteran of the Vietnam era.
Section 8. Independent Contractor and Not a Partnership For the purposes of this Agreement, City and District shall act in an independent capacity and not as officers or employees or agents of the other. Nothing in this Agreement establishes, constitute, or will be construed as establishing or constituting a partnership or agency or employment relationship between City andDistrict.Officers providingservices underthisAgreement shall remain the employees of City, and shall not be employees of District.
Section 9. Notices Any notice required or intended to be given to either party under the terms of this Agreement shall be in writing and shall be deemed to be duly given if delivered personally or deposited into the United States mail, with postage prepaid, addressed to the party to which notice is to be given at the party's address set forth on the signature page of this Agreement or at such other address as the parties may from time to time designate by written notice.
Section 10. Binding Once this Agreement is signed by all parties, it shall be binding upon, and shall inure to the benefit of, all parties, and each parties' respective heirs, successors, assigns, transferees, agents, servants, employees and representatives.
Section 11. Assignment Neither party may assign or transfer, by operation of law or otherwise, all or any of its rights or obligations under this Agreement without the prior written consent of the other party.
Section 12. Waiver The waiver by either party of a breach by the other of any provision of this Agreement shall not constitute a continuing waiver or waiver of any subsequent breach of either the same or a different provision of this Agreement. No provisions of this Agreement may be waived unless in writing and signed by all parties to this Agreement.
Waiver of any one provision herein shall not be deemed to be a waiver of any other provision herein.
Section 13. Governing Law and Venue This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of California. Venue for purposes of the filing of any action regarding the enforcement or interpretation of this Agreement and any rights and duties hereunder shall be Fresno County, California.
Section 14. Headings The section headings in this Agreement are for convenience and reference only and shall not be construed or held in any way to explain, modify or add to the interpretation or meaning of the provisions of this Agreement. 1063
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Section 15. Severability The provisions of this Agreement are severable. The invalidity or unenforceability of any one provision in this Agreement shall not affect the other provisions.
Section 16. Interpretation The parties acknowledge that this Agreement in its final formsisthe result of the combined efforts of the parties and that,should any provision of this Agreement be found to be ambiguous in any way, such ambiguity shall not be resolved by construing this Agreement in favor of or against either party, but rather by construingthe terms in accordance with their generally accepted meaning.
Section 17. Attorney's Fees If either party is required to commence any proceeding or legal action to enforce or interpret any term, covenant or condition of this Agreement, the prevailing party in such proceeding or action shall be entitled to recover from the other party its reasonable attorney's fees and legalexpenses.
Section 18. Exhibits Each exhibit and attachment referenced in this Agreement is, by the reference, attached and incorporated into and made a part of this Agreement. [Signatures on Next Page]
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Section 7, Item C.
IN WITNESS THEREOF,the parties have caused their authorized agentsto execute this Agreement as set forth below:
CITY OF KERMAN
By:
John Jansons, City Manager
Date:
APPROVED AS TO FORM
Hilda Cantú Montoy, City Attorney
THE KERMAN UNIFIED SCHOOL DISTRICT
By:
Gordon Pacheco, Superintendent
Date:
1065
Section 7, Item C.
Exhibit ‘A’
(to agreement)
SCOPE OF WORK
SCHOOL RESOURCE OFFICER
A. The SRO is a sworn City police officer assigned to provide the law enforcement expertise and resources to assist school staff in maintaining safety, order, and discipline within their assigned school. The SRO will be maintaining safety, order, and discipline within his/her assignment. Although not an employee of the District, the SRO will be considered an active member of the administrative teams that serve each of the District schools.
B. The SRO's assigned school buildings, grounds, and surroundings will be the SRO's patrol area, and he/she assumes primary responsibility for handling all calls for service and coordinating the response of the other police resources to the school. All criminal activity that comes to the attention of the principal or school staff shall be reported immediately. Information that is not of an emergency nature may be held for action by the SRO upon his/her return to duty.
C. The SRO's duty schedule will be mutually determined by the District Superintendent and the Chief ofPolice.
D. The SRO's schedule will generally be arranged to provide coverage throughout the school day to include peak arrival and departure times before and after school.
Whenever possible, the SRO will be visible patrolling the exterior and interior grounds, particularly during the opening or closing of school and during the lunch periods.
E. The SRO shall wear the regulation police uniform and operate a marked police patrol vehicle while on duty unless otherwise authorized by a supervisor for a specific purpose. The SRO provides a visible deterrent to crime and a positive representative of the Police Department to students and staff.
F. The SRO shall also assist with training for the school administration in law enforcement and related matters. Information about crime trends and changes in laws relevant to schools shall be disseminated to the school administrative staff to assist them in effectively establishing and maintaining safe school environments.
G. The SRO may also become involved, through the school principal, with the school's curriculum and provide instruction that will enhance the students' understanding of the police mission and the responsibilities of citizenship. 1066 Section 7, Item C.
H. The SRO shall be responsible for monitoring the social and cultural environment to identify emerging youth gangs. All information concerning gangs shall be provided to appropriate investigative personnel. Gang prevention and early intervention strategies shall be coordinated with the investigations unit.
I. When it is in the best interest of the City and the school and with the approval of the school principal, the SRO may make formal presentations to, or participate in, school- based community organization meetingssuch asParent Teacher Association and School Advisory Council meetings. Participation in other activities such as panel discussions, mentoring programs, and community coalitions or task forces must be approved, in advance by the Police Chief and the school principal.
J. Programs conducted in schools by other units of the Kerman Police Department shall be coordinated with the SRO and the school principal to avoid redundant services and to ensure equitable distribution of such programs and services.
K. A critical element of the SRO program is an open relationship and strong communication between the school principal and the SROs. The SRO shall meet as needed, with the assigned school principal for the purpose of exchanging information about current crime trends, problem areas, or other areas of concern which have potential for disruption in the school or within the community.
L. Other duties and responsibilities of the SRO includes proper disposal of illegal substances recovered by the school and not needed for criminal prosecution, maintaining familiarity with the school's student rules and regulations, attending and providing testimony at school disciplinary hearings, upon request.
TRAINING AND SUPERVISION
A. The SRO supervisor shall ensure that open lines of communication are in place between all the District schools and the Kerman Police Department. Meetings with the SRO shall be arranged as needed with school administration. The Chief of Police or his/her designee shall meet with the District Administration at least once each semester. The initial SRO/ Administration meeting should be held on the date of the implementation of this agreement and be devoted to reviewing school and City expectations and clarifying any operational procedures. The second meeting should occur mid-year and involve a preliminary evaluation of the SRO's performance as well as the identification and resolution of any developing issues. The Chief of Police shall address any concerns regarding the performance of the SRO. 1067 Section 7, Item C.
B. The City shall be responsible for the cost of any required peace officer update training. The School District will pay for any SRO specific training orschool thatthey electto send the SROto.
C. The City shall retain full authority to direct and control the activities of the police officers and supervise and discipline the officers in accordance with City policies and procedures.
POLICE INVESTIGATION AND QUESTIONING
A.The SRO has been given the authority to stop, question, interview, and take police action without the prior authorization of the principal or contacting parents. With certain exceptions, the investigation and questioning of students during school hours or at school events should be limited to situations where the investigation is related to the school. Investigations and questioning of students for offenses not related to the operation of or occurring at the school would occur in such situations where, for example, delay might result in danger to any person, flee ·from the jurisdiction by the person suspected of a crime or destruction of evidence. All criminal and non-criminal contact with a student or faculty member during school hours by any investigating officers should be coordinated through the SRO.
B. The SRO shall provide information to the appropriate investigative sections of any crimes or leads that come to the attention of the SRO. The SRO should be kept advised of all investigations that involve students from his/her assigned school.
C. The school principal will be notified as soon as practical of any significant enforcement actions taken by an SRO or investigating officer(s).
D. The authority of School Resource Officers ("SRO") extends to all schools in California (Penal Code Section 830). SROs do not need permission to enter school grounds, and school officials must not hinder or resist SROs in carrying out their duties on school grounds (Penal Code Section 148).
E. The School District has designated SROs to be "school officials" who may have a legitimate educational interest in accessing student records. If such access is provided, the SRO must protect the privacy of the student records it receives and may only disclose the student records, orthe information obtained fromthe studentsrecords, in compliance withstate andfederal law.
F. Unless there is a health or safety emergency requiring disclosure of information contained within student records, the information obtained by an SRO from a student's 1068
Section 7, Item C.
records may not be shared with other law enforcement agencies or personnel. For this reason, circumstances where the SRO is provided access to student records should be limited and only when there is a legitimate educational interest in providing such access, or, an emergency situation exists.
G. Access to student records by SROs should only be granted with the approval and supervision of a school administrator. Access shall be duly noted on the Access Log.
Student records should remain in the possession of the school administrator(s) at all times.
ARREST PROCEDURES
A. School Resource Officers are expected to be familiar with school rules and their application with the school. Routinely, rule infractions will not be handled as violations of law, but instead referred to the principal, or his agent, for action. Any questions related to the enforcement of rules versus laws within the school should be discussed with the principal.
B. The following procedures should be adhered to where arrests of students or staff become necessary:
1. The arrest of a student or school staff member with a warrant or petition should be coordinated through the SRO with prior notification to the principal and accomplished after school hours, when practical.
2. Arrests of students or school staff members during school hours or on school grounds shall be reported to the principal as soon as practical.
3. Persons, whose presence on school grounds is in violation of the law, shall be investigated fortrespassing.
4. Discretion and good judgment by an SRO may determine alternative action other than arrest.
SEARCH AND SEIZURE
A. School officials may conduct searches of students' property or person under their jurisdiction when reasonable suspicion exists that the search will reveal evidence that the student has violated or is violating either the law or the rules of the school.
The standard for the search is reasonable suspicion. 1069 Section 7, Item C.
B. The SRO shall not become involved in administrative (school related) searches unless specifically requested by the school to provide security, protection, or for handling of contraband. These searches must be at the direction and control of the school official. At no time shall the SRO request that an administrative search be conducted for law enforcement purposes or have the administrator act as his or her agent.
C. Any search by an officer shall be based upon probable cause and, when required, a search warrant should be obtained. Stop and frisk will remain an option when there is reasonable suspicion that a criminal act has been committed or may be committed, or that the suspect may be armed.
ADMINISTRATIVE HEARINGS
A. The SRO shall attend suspension and/or expulsion hearings upon the request of the school principal. The SRO shall be prepared to provide testimony on any actions that were taken by the officer and any personally observed conduct witnessed by the officer. Any evidencepresented atanyadministrativehearingby anSROisthe responsibilityoftheSRO.
B. The SRO shall not provide any official Police Department juvenile record to the school during an administrative hearing. As a general rule, release of such information is prohibited by law unless such documents are subpoenaed by the school through the appropriate court.
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Section 7, Item C.