Agenda packet, regular meeting, first session — King City City Council, August 13, 2024

AGENDA

REGULAR MEETING OF THE

CITY OF KING CITY COUNCIL
AND
Sitting as SUCCESSOR AGENCY OF

THE RDA FOR THE CITY OF KING
TUESDAY AUGUST 13, 2024
6:00 P.M.

CITY HALL
212 S. VANDERHURST AVENUE
KING CITY, CALIFORNIA 93930
The City Council meeting will be conducted in hybrid in-person/virtual format.

To join the meeting virtually, please use the link below to join the Zoom meeting:
https://bit.ly/3e0zvaR
Meeting ID: 881 5287 9536
Or by telephone: 1-669-900-9128
Passcode: 052933
In compliance with the Americans with Disabilities Act, if you need special assistance to participate in a City meeting, Please contact the City Clerk's Office (831-386-5925) at least 48 hours prior to the Meeting to ensure that reasonable arrangements can be made to provide accessibility to the meeting.
* Please submit all correspondence for City Council PRIOR to the meeting with a copy to the City Clerk.

CALL TO ORDER
ROLL CALL:

Coucil Members Oscar Avalos, Carlos DeLeon, Robert Cullen, Mayor Pro Tem Carlos Victoria, and Mayor Mike LeBarre

FLAG SALUTE

CLOSED SESSION ANNOUNCEMENTS

SPECIAL PRESENTATIONS
Swearing In Of Christian Salazar And Ignacio Hernandez, New Police Officers, By Chief Hunt

1. 2.

3. 4.

5. A.

6. Swearing In Of Christian Salazar And Ignacio Hernandez, New Police Officers, By Chief Hunt

PUBLIC COMMENT
Any member of the public may address the Council for a period not to exceed three minutes’ total on any item of interest within the jurisdiction of this Council that is not on the agenda. The Council will listen to all communications; however, in compliance with the Brown Act, the Council cannot act on items not on the agenda. Comments should be directed to the Council as a whole and not to any individual Council Member.

Slanderous, profane or personal remarks against any Council Member, staff member or member of the audience is not permitted.

COUNCIL COMMUNICATIONS & COMMITTEE REPORTS
Individual Council Members may comment on Council business, his or her Council activities, City operations, projects or other items of community interest. Council Members may also request staff to report back at a subsequent meeting on any matter or take action to direct staff to prepare a staff report for a future agenda.

Mayor LeBarre's Meeting Schedule's
MAYOR LEBARRES MARCH. APRIL. MAY. JUNE. JULY 2024 MEETING UPDATE.PDF

STAFF COMMUNICATIONS
Comments presented by the City Manager, City Attorney or other staff on City business and/or announcements.

CONSENT AGENDA
The following items listed below are scheduled for consideration as a group. The recommendations for each item are noted. Members of the audience may speak on any item(s) listed on the Consent Agenda. Any Council Member, the City Manager, or the City Attorney may request that an item be withdrawn from the Consent Agenda to allow for full discussion. The Council may approve the remainder of the Consent Agenda on one motion. Items withdrawn from the Consent Agenda may be considered by separate motions at the conclusion of the discussion of each item.

Consideration: Meeting Minutes Of July 9, 2024 City Council Meeting Recommendation: approve and file.
9(A) JULY 9, 2024 MINUTES_.PDF
Consideration: City Of King Check Register July 1, Through July 31, 2024 Recommendation: receive and file.
9(B) NEW STAFF REPORT CC CITY AP 081324.PDF
Considertation: Mee Memorial Healthcare System Diabetes Month Streetlight Banners Recommendation: approve and authorize staff to hang street banners recognizeing National Diabetes Month in October-November 2024.
9(C) MEE MEMORIAL STREETLIGHT BANNERS.PDF
A.

6. 7.

Documents:

8. 9.

Documents:

Recommendation: approve and authorize staff to hang street banners recognizeing National Diabetes Month in October-November 2024.
9(C) MEE MEMORIAL STREETLIGHT BANNERS.PDF
Consideration: An Ordinance Amending Chapter 7.36 Of Title 7 Of The King City Municipal Code Pertaining To Graffiti Removal
Recommendation: waive second reading by title only and adopt an Ordinance amending provisions of Chapter 7.36 of Title 7 of the King City Municipal Code pertaining to graffiti removal.
9(D) GRAFFITI REMOVAL ORDINANCE.PDF
Consideration: Side Letters Of Agreement With The King City Confidential Employees Association, King City Police Sergeant Association, King City Police Officers Association, And The Service Employees International Union Local 521 Recommendation: approve and authorize the City Manager to execute a Fourth Side Letter of Agreement with the King City Confidential Employees Association (KCCEA), Third Letter of Agreement with the King City Police Sergeants Association (KCPSA), Third Letter of Agreement with the King City Police Officers Association (KCPOA), and the Seventh Letter of Agreement with the Service Employees International Union Local 521 (SEIU) to adjust the effective date for FY 2024-25 cost of living adjustments (COLAS).
9(E) 8.13.24 UNION SIDE LETTERS OF AGREEMENT.PDF
Consideration: City Of King KCCP Payments For The Month Of June 2024 Recommendation: receive and file.
9(F) NEW STAFF REPORT CC CITY AP KCCP 081324.PDF
Consideration: City Of King KCCP Payments For The Month Of July 2024 Recommendation: receive and file.
9(G) STAFF REPORT CC CITY AP KCCP 081324.PDF

PUBLIC HEARINGS
Consideration: An Ordinance Establishing Chapter 7.72, To Title 7, Of The King City Municipal Code Pertaining To Shopping Cart Regulations
Recommendation: introduce to be read by title only an Ordinance establishing Chapter

Documents:

10. A.

Consideration: An Ordinance Establishing Chapter 7.72, To Title 7, Of The King City Municipal Code Pertaining To Shopping Cart Regulations
Recommendation: introduce to be read by title only an Ordinance establishing Chapter

7.72 of Title 7 of the King City Municipal Code pertaining to shopping cart regulations, open the hearing, allow for public testimony, close the hearing waive first reading of the Ordinance, and approve the introduction of the Ordinance. 10(A) SHOPPING CART ORDINANCE.PDF
Consideration: An Ordinance Amending Chapter 17.26 Of Title 17 Of The King City Municipal Code Pertaining To Highway Service District Zoning Recommendation: City Council continue this item to the next regularly scheduled Council meeting on August 27, 2024.
10(B) CC STAFF REPORT HS ZONING DISTRICT .PDF

REGULAR BUSINESS
Consideration: Collaboration With Lawrence Livermore National Lab Regarding Carbon Capture And Storage Project
Recommendation: receive a presentation from Lawrence Livermore National Laboratory and direct staff to proceed with discussions on a potential carbon capture and storage project collaboration.
11(A) LLNL COLLABORATION SR 8-13-24 CLEAN.PDF
Consideration: City And CDA Successor Agency’s Audited Financial Statements For The Fiscal Year 2022-23
Recommendation: City Council and the Board of Directors of the King City CDA Successor Agency accept the City and CDA Successor Agency’s Audited Financial Statements for Fiscal Year Ended June 30, 2023.
11(B) SR FY 2022-23 FINANCIAL STATEMENTS CM COMMENTS.PDF

CITY COUNCIL CLOSED SESSION
Announcement(s) of any reportable action(s) taken in Closed Session will be made in open session and repeated at the beginning of the next Regular City Council meeting as this portion of the meeting is not recorded.

Conference With Legal Counsel - Discussion On Commencing Litigation Pursuant To Government Code Section 54956.9. Cases 1
Conference With Legal Counsel – Anticipated Litigation Pursuant To Government Code Section 54956.9. Cases: 1

ADJOURNMENT
The City of King is an equal opportunity provider and employer.

Documents:

11. A.

Documents:

12. A.

13. Section 54956.9. Cases: 1

ADJOURNMENT
The City of King is an equal opportunity provider and employer.

13. Monthly Schedule, March 2024
Mike LeBarre, Mayor, King City California
MONTHLY MEETINGS:
3-1 Monterey County Water Resource Agency (MCWRA),
Personal and Administration committee, Salinas
3-1 Monterey County Water Resource Agency (MCWRA),
Finance committee, Salinas
3-1 Monterey County Mayors Association (MCMA), Sand City 3-4 Transportation Agency of Monterey County (TAMC), Rail Policy Committee, Chair, Salinas
3-6 Transportation Agency of Monterey County (TAMC),
Executive Committee, Salinas
3-11 Monterey-Salinas Transit (MST) Board of Directors, Monterey
3-12 King City Council, Council Chambers
3-15 California Council of Governments (CalCOG) Board of Directors, Zoom
3-18 Monterey County Water Resource Agency (MCWRA),
Board of Directors, Salinas
3-25 Salinas Valley Mayors and Managers (SVMM), Salinas 3-26 King City Council, Council Chambers
3-27 Transportation Agency of Monterey County (TAMC), Board of Directors, Past Chair, Salinas
LOCAL-STATE-FEDERAL BRIEFINGS:
3-1 District 3 Supervisor Lopez/Mayors Briefing, Zoom
3-7 HUD Briefing, Zoom
3-14 Whitehouse Briefing, Zoom
3-21 HUD Briefing, Zoom
3-28 Whitehouse Briefing, Zoom

ADDITIONAL MEETINGS/EVENTS
3-2 First Tee Dinner, King City
3-7 City Infomercial Filming, City Hall
3-7 KSBW Interview, King City
3-7 Community Prayer Vigil, King City
3-8 Read Across America, Santa Lucia Elementary
3-12 South County Police Chiefs Update, Zoom
3-12 SMCRWF Luncheon/State of the City, King City
3-14 Blue Zones Project Steering/Leadership committee, Salinas 3-20 104.3 SMG Radio Interview w/John Michael, Phone
3-20 Fort Hunter Liggett Community Relations Executive Board (CREB), Soledad
3-26 TAMC Participatory Budget Committee Celebration, King City
3-27 KC High School Soccer Team Parade, King City
7(A)
Monthly Schedule, April 2024
Mike LeBarre, Mayor, King City California
MONTHLY MEETINGS:
4-1 Transportation Agency of Monterey County (TAMC), Rail Policy Committee, Chair, Salinas
4-3 Transportation Agency of Monterey County (TAMC),
Executive Committee, Salinas
4-5 Monterey County Water Resource Agency (MCWRA),
Personal and Administration Committee, Salinas
4-5 Monterey County Water Resource Agency (MCWRA),
Finance Committee, Salinas
4-5 Monterey County Mayors Association (MCMA), Carmel
4-9 King City Council, Council Chambers
4-15 Monterey-Salinas Transit BOPC Committee (MST),
Monterey
4-15 Monterey-Salinas Transit (MST) Board of Directors, Monterey
4-15 Monterey County Water Resource Agency (MCWRA),
Board of Directors, Chair, Salinas
4-17 Monterey Bay Air Resource District (MBARD) Budget, Personnel and Nominating Committee, Monterey
4-17 Monterey Bay Air Resource District (MBARD) Board of Directors, Monterey
4-18 Joint BOD/BOS Leadership meeting Monterey County
Water Resource Agency BOD/BOS (MCWRA), Greenfield
4-18 South Salinas Valley Broadband Authority (SSVBA),
Greenfield
4-22 Salinas Valley Mayors and Managers (SVMM), King City 4-22 Transportation Agency of Monterey County (TAMC), PreMeeting Briefing-Board of Directors, Zoom 4-23 King City Council, Council Chambers
4-24 Transportation Agency of Monterey County (TAMC), Board of Directors, Chair, Salinas
4-24 Leadership Council/Continuum of Care, Zoom
4-25 Special South Salinas Valley Broadband Authority (SSVBA), Greenfield
4-25 See Monterey Board of Directors, Advisor, Zoom
LOCAL-STATE-FEDERAL BRIEFINGS:
4-3 District 3 Supervisor Lopez/Mayors Briefing, Zoom
4-4 HUD Briefing, Zoom
4-11 Whitehouse Briefing, Zoom
4-18 HUD Briefing, Zoom
4-25 Whitehouse Briefing, Zoom

ADDITIONAL MEETINGS/EVENTS
4-11 Marina Planning Commission, Zoom
4-12 DOT/RAISE-MMTC Staff Grant Update, Zoom
4-16 104.3 SMG Radio Interview w/John Michael, Phone
4-22 Blue Zones Project Steering/Leadership committee, Salinas 4-22 City Hall Student Tour, King City
7(A)
Monthly Schedule, May 2024
Mike LeBarre, Mayor, King City California
MONTHLY MEETINGS:
5-1 Transportation Agency of Monterey County (TAMC),
Executive Committee, Salinas
5-1 Joint BOD/BOS Leadership meeting Monterey County Water Resource Agency BOD/BOS (MCWRA), Greenfield
5-3 Monterey County Water Resource Agency (MCWRA),
Personal and Administration committee, Salinas
5-3 Monterey County Water Resource Agency (MCWRA),
Finance committee, Salinas
5-3 Monterey County Mayors Association (MCMA), Soledad
5-6 Transportation Agency of Monterey County (TAMC), Rail Policy Committee, Chair, Salinas
5-10 Leadership Council Governance Committee, Zoom
5-13 Monterey-Salinas Transit (MST) Board of Directors, Monterey
5-14 King City Council, Council Chambers
5-16 Joint BOD/BOS Leadership meeting Monterey County
Water Resource Agency BOD/BOS (MCWRA), Greenfield
5-17 Coast Rail Coordinating Council (CRCC), Oxnard
5-20 Monterey County Water Resource Agency (MCWRA),
Board of Directors, Chair, Salinas
5-22 Transportation Agency of Monterey County (TAMC), Board of Directors, Past Chair, Salinas
5-22 California Council of Governments (CalCOG) Board of Directors, Zoom
5-22 Special Leadership Council/Continuum of Care, Zoom 5-28 King City Council, Council Chambers
LOCAL-STATE-FEDERAL BRIEFINGS:
5-1 District 3 Supervisor Lopez/Mayors Briefing, Zoom
5-2 HUD Briefing, Zoom
5-9 Whitehouse Briefing, Zoom
5-16 HUD Briefing, Zoom
5-23 Whitehouse Briefing, Zoom
5-30 HUD Briefing, Zoom

ADDITIONAL MEETINGS/EVENTS
5-8 South County Water Coalition Luncheon, Greenfield
5-9 Fort Hunter Liggett Ceremony, Fort Hunter Liggett
5-10 Sheriff Press Conference, Salinas
5-10 Congresswoman Lofgren Check Presentation, King City 5-14 KION Interview, Council Chambers
5-15 104.3 SMG Radio Interview w/John Michael, Phone
5-21 Marina City Council, Zoom
5-27 Memorial Day VFW Ceremony, King City
7(A)
Monthly Schedule, June 2024
Mike LeBarre, Mayor, King City California
MONTHLY MEETINGS:
6-3 Transportation Agency of Monterey County (TAMC), Rail Policy Committee, Chair, Salinas
6-5 Transportation Agency of Monterey County (TAMC),
Executive Committee, Salinas
6-7 Monterey County Water Resource Agency (MCWRA),
Personal and Administration committee, Salinas
6-7 Monterey County Water Resource Agency (MCWRA),
Finance committee, Salinas
6-7 Monterey County Mayors Association (MCMA), Carmel
6-10 Monterey-Salinas Transit BOPC Committee (MST),
Monterey
6-10 Monterey-Salinas Transit (MST) Board of Directors, Monterey
6-11 King City Council, Council Chambers
6-17 Monterey County Water Resource Agency (MCWRA),
Board of Directors, Chair, Salinas
6-18 Leadership Council Governance Committee, Zoom
6-19 Monterey Bay Air Resource District (MBARD) Budget, Personnel and Nominating Committee, Monterey
6-19 Monterey Bay Air Resource District (MBARD) Board of Directors, Monterey
6-20 Joint MCWRA/M1W Chair’s Meeting, Salinas
6-20 Special South Salinas Valley Broadband Authority (SSVBA), Greenfield
6-24 California Council of Governments (CalCOG) Board of Directors, Zoom
6-24 Salinas Valley Mayors and Managers (SVMM), Greenfield 6-25 King City Council, Council Chambers
6-26 Transportation Agency of Monterey County (TAMC), Board of Directors, Past Chair, Salinas
6-26 Leadership Council/Continuum of Care, Zoom
6-27 See Monterey Board of Directors, Advisor, Zoom
LOCAL-STATE-FEDERAL BRIEFINGS:
6-5 District 3 Supervisor Lopez/Mayors Briefing, Zoom
6-6 HUD Briefing, Zoom
6-13 Whitehouse Briefing, Zoom
6-20 HUD Briefing, Zoom
6-27 Whitehouse Briefing, Zoom

ADDITIONAL MEETINGS/EVENTS
6-3 KSBW Interview, King City
6-4 104.3 SMG Radio Interview w/John Michael, Phone
6-5 Cohort IV Local Community Advisory Board, Zoom
6-12 King City in Bloom Beautification Luncheon, King City 6-13 Coastal Commission Meeting, Zoom
6-14 Blue Zones Steering Committee, Salinas
6-18 Sup. Lopez South County Young Leaders, Greenfield
6-24 District Block Party, King City
7(A)
Monthly Schedule, July 2024 HAPPY FOURTH of JULY!
Mike LeBarre, Mayor, King City California
MONTHLY MEETINGS:
7-1 Transportation Agency of Monterey County (TAMC), Rail Policy Committee, Chair, Cancelled
7-3 Transportation Agency of Monterey County (TAMC),
Executive Committee, Cancelled
7-5 Monterey County Water Resource Agency (MCWRA),
Personal and Administration committee, Cancelled
7-5 Monterey County Water Resource Agency (MCWRA),
Finance committee, Cancelled
7-8 Monterey-Salinas Transit (MST) Board of Directors,
Monterey
7-9 King City Council, Council Chambers
7-12 Monterey County Mayors Association (MCMA), Del Rey Oaks
7-15 Monterey County Water Resource Agency (MCWRA),
Board of Directors, Chair, Salinas
7-22 Salinas Valley Mayors and Managers (SVMM), Cancelled 7-23 King City Council, Council Chambers
7-24 Transportation Agency of Monterey County (TAMC), Board of Directors, Past Chair, Cancelled
7-31 Leadership Council/Continuum of Care Strategic Plan Update, Zoom
LOCAL-STATE-FEDERAL BRIEFINGS:
7-11 Whitehouse Briefing, Zoom
7-18 HUD Briefing, Zoom
7-25 Whitehouse Briefing, Zoom

ADDITIONAL MEETINGS/EVENTS
7-2 104.3 SMG Radio Interview w/John Michael, Phone
7-4 Fourth of July Parade, King City
7-9 Peace and Dignity Journey Proclamation Presentation, King City
7-15 Speaker Rivas Youth and Government Leadership Program, Salinas
7-16 SPCA/King City Meeting, Zoom
7-25 Supervisor Lopez District Open House, Greenfield
7-30 104.3 SMG Radio Interview w/John Michael, Phone
7(A)

Page 1 of 4 ends

City Council Meeting
July 09, 2024

1.__CALL TO ORDER:

Regular Meeting called to order at 6:00pm by Mayor LeBarre.

2.__ROLL CALL:

City Council: Mayor Mike LeBarre, Council member Carlos DeLeon, Mayor Pro Tem Carlos Victoria, Council member Rob Cullen absent, Council members Oscar Avalos (arrived at 6:09).

City Staff: City Manager Steven Adams; City Attorney Roy Santos; City Clerk, Erica Sonne.

3.__FLAG SALUTE:

The flag salute was led by Mayor LeBarre.

4. CLOSED SESSION ANNOUNCEMENTS:

None

5.__SPECIAL PRESENTATIONS:

A. Small Business Development Center Update - Roger Gilbert, Monterey County Business Council, with a PowerPoint presentation.

6. PUBLIC COMMUNICATIONS:

Karen Jernigan, 206 North Mildred Ave., spoke on clarification of names of streets in King City. She brought a map to share from 1886 when the town was first laid out. She feels unless decisions were made throughout the years to change the original names, she would encourage correcting the errors.

Steve Wilson stated that it is a matter of semantics on the names of streets, such as Broadway. He would like to see us get it right.

Janet Buttgereit thanked the council for the graffiti ordinance update. She feels that there is a need to look at the noise ordinance and would like to see a few citations written.

7. COUNCIL COMMUNICATIONS:

Council Member DeLeon stated he had nothing to report this evening.

Council Member Avalos stated he had nothing to report this evening.

Council Member Cullen stated he had nothing to report this evening.

Mayor Pro Tem Victoria stated he had nothing to report this evening.

Mayor LeBarre read into the record the proclamation for indigenous people on the Peace and Dignity Journey.
9(A)

Page 2 of 4 ends

8. CITY STAFF REPORTS AND COMMENTS:

City Manager Adams stated four citations were handed out for fireworks this year. We continue community walks every Thursday at 6p.m. District 3 Block Party is on Patterson St. Next Tuesday at 5p.m.

Special meeting reminder for July 30th to hear the results of the Golf Course bids that come in.

City Attorney Santos had nothing to report tonight.

9. CONSENT
A. Consideration: Meeting Minutes of June 25, 2024, Council Meeting B. Consideration: City of King Check Register June 16, through June 30, 2024 C. Consideration: Award of Contract for Annual Tree Trimming Services D. Consideration: Amendment 1 to Contract Services Agreement for City Attorney Services E. Consideration: Participation in Additional National Opioid Settlements F. Consideration: Citizen Initiated Local Ballot Measure Process Action: Motion to approve consent agenda items A-F by Cullen seconded by Avalos.

AYES: Council Members: LeBarre, DeLeon, Victoria, Avalos, Cullen NOES: Council Members:

ABSENT: Council Members:

ABSTAIN: Council Members:

10. PUBLIC HEARINGS:

A. Consideration: Community Development Block Grant (CDBG) Application Process and Possible Activities and Projects
City Manager Adams introduced this item.

Lorie Adams, Adams Ashby Group, further introduced this item with a PowerPoint.

Mayor LeBarre opened the Public Hearing, seeing no one come forward, Mayor LeBarre closed the public hearing.

Action: Motion to direct staff to prepare for Council consideration a CDBG application with staff recommendation and the social program by Cullen seconded by Avalos.

AYES: Council Members: LeBarre, DeLeon, Victoria, Avalos, Cullen NOES: Council Members:

ABSENT: Council Members:

ABSTAIN: Council Members:

B. Consideration: A Resolution of the City Council of the City of King, California, Submitting to the Voters at the General Municipal Election to be Consolidated with the Statewide General Election Held on Tuesday, Novembre 5, 2024, an Ordinance Relating to Increasing and Extending the Transaction and Use Tax and Expenditures Therefrom City Manager Adams introduced this item.

Mayor LeBarre opened the Public Hearing, seeing no one come forward, Mayor LeBarre closed the public hearing.

Page 3 of 4 ends

Action: Motion to adopt Resolution No. 2024-5001 and introduce Ordinance 2024-828 by title only and approve Resolution No. 2024-5002 approving the ballot argument in favor of the local sales tax measure by Victoria seconded by DeLeon.

AYES: Council Members: LeBarre, DeLeon, Victoria, Avalos, Cullen NOES: Council Members:

ABSENT: Council Members:

ABSTAIN: Council Members:

C. Consideration: An Ordinance Amending Chapter 7.36 of Title 7 of the King City Municipal Code Pertaining to Graffiti Removal
City Manager Adams introduced this item.

Mayor LeBarre opened the Public Hearing, seeing no one come forward, Mayor LeBarre closed the public hearing.

Action: Motion to approve the introduction of the Ordinance by Victoria seconded by DeLeon.

AYES: Council Members: LeBarre, DeLeon, Victoria, Avalos, Cullen NOES: Council Members:

ABSENT: Council Members:

ABSTAIN: Council Members:

11. REGULAR BUSINESS
A. Consideration: Downtown Plaza Mural
Council Member Cullen recused himself from this item due to a conflict and left the room.

City Manager Adams introduced this item.

Action: Motion to approve the selection of the mural design for the Downtown Plaza Project; and approve and authorize the City Manager to execute an Agreement with La Neta Murals, LLC for creation of the mural in a form approved by the City Attorney by Avalos seconded by Victoria.

AYES: Council Members: LeBarre, DeLeon, Victoria, Avalos, NOES: Council Members:

ABSENT: Council Members: Cullen
ABSTAIN: Council Members:

Council Member Cullen returned to the room.

12. CITY COUNCIL CLOSED SESSION
A. Conference with Legal Counsel – Regarding Commencing Litigation Pursuant to Government Code Section 54956.9. Case: 1
ADJOURNMENT:

Mayor LeBarre adjourned the meeting to closed session at 7:07p.m. There being no further business Mayor LeBarre adjourned the meeting at 7:40p.m.

Page 4 of 4 ends

Approved Signatures:

Mayor Mike LeBarre City Clerk, Erica Sonne
City of King City of King
Item No. 9(B)

REPORT TO THE CITY COUNCIL
DATE: AUGUST 13, 2024
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: MIKE HOWARD, FINANCE DIRECTOR
RE: CONSIDERATION OF CITY OF KING CHECK REGISTER JULY 1 THROUGH JULY 31, 2024
RECOMMENDATION:

It is recommended City Council receive and file.

BACKGROUND:

At least once a month, the City Treasurer shall submit to the City Council, a copy of the invoices paid for the previous month.

DISCUSSION:

The purpose of this item is to provide the Council an opportunity to review and monitor ongoing expenditures. These documents are attached.

COST ANALYSIS:

There is no fiscal impact as a result of this action.

ENVIRONMENTAL REVIEW:

No Environmental Review required for this item.

ALTERNATIVES:

The following alternatives are provided for Council consideration:

1. Receive and file the report; or

2. Provide other direction to staff regarding requests for additional information.

Item No. 9 (C)

REPORT TO THE CITY COUNCIL
DATE: AUGUST 13, 2024
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: STEVEN ADAMS, CITY MANAGER
RE: CONSIDERATION OF MEE MEMORIAL HEALTHCARE SYSTEM

DIABETES MONTH STREETLIGHT BANNERS
RECOMMENDATION:

It is recommended the City Council approve and authorize staff to hang street banners recognizing National Diabetes Month in October-November 2024.

BACKGROUND:

Staff recently received a request from Mee Memorial Healthcare System to install streetlight banners on Broadway Street to promote National Diabetes Month, which occurs in November. The City currently maintains a schedule of streetlight banners that are displayed. The banners are part of the overall City’s streetscape enhancement effort. Currently, the schedule includes fall banners, holiday banners, Historic Route 101 banners, Salinas Valley Fair banners, and American flag banners. This year, for the first time, the City has added Blue Zones Project banners
It requires a significant amount of staff time to install and remove the banners, so staff has tried to limit the variety of banners to the current list and schedule. The Salinas Valley Fair banners are the only ones that are provided by and support an outside organization, although the City displayed King City High School graduate banners during the pandemic for the South Monterey County Joint Union High School District during the pandemic when the graduation ceremony was cancelled. In addition, the Historic Route 101 and fall banners were donated by King City in Bloom, but their organization is not identified on the banners.

Therefore, staff requests City Council authorization for any banner requests from outside organizations.

CITY COUNCIL

CONSIDERATION OF MEE MEMORIAL HEALTHCARE SYSTEM DIABETES

MONTH STREETLIGHT BANNERS
AUGUST 13, 2024
PAGE 2 OF 3
DISCUSSION:

A copy of the design for the new banners is attached. They would include 4 banner design types in English on one side and Spanish on the other. The Mee Memorial Hospital is important to the health and quality of life in the community, so the City has tried to support and partner with Mee Memorial Healthcare System whenever possible. The banners would also promote a health-related message, so staff believe they would compliment the Blue Zones Project banners and support the Blue Zones Project effort.

Hanging the banners in parts of October and November will mean the City would not be able to display the fall banners during this year. Staff notified King City in Bloom of the impact of the proposal on the fall banners, and they did not object.

COST ANALYSIS:

The banners would be paid for and provided by Mee Memorial Healthcare System. The only cost to the City would be the labor, which can take two maintenance workers about 1 ½ days to complete. However, since they will replace the fall banners, it will not constitute any net increase to staff workload.

ENVIRONMENTAL REVIEW:

This action is not a “project” for the purposes of the California Environmental Quality Act (CEQA) as it does not have the potential for resulting in either a direct physical change to the environment or a reasonably foreseeable indirect physical change in the environment. No further action is required under CEQA for City Council action.

ALTERNATIVES:

The following alternatives are provided for City Council consideration:

1. Approve staff’s recommendations;

2. Do not approve installing and displaying the Mee Memorial Healthcare System National Diabetes Month banners; or

3. Provide staff other direction.

Exhibits:

1. Banner Designs

EXHIBIT 1

Item No. 9 (D)

REPORT TO THE CITY COUNCIL
DATE: AUGUST 13, 2024
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: STEVEN ADAMS, CITY MANAGER
RE: CONSIDERATION OF AN ORDINANCE AMENDING CHAPTER

7.36 OF TITLE 7 OF THE KING CITY MUNICIPAL CODE

PERTAINING TO GRAFFITI REMOVAL
RECOMMENDATION:

It is recommended the City Council waive the second reading by title only and adopt an Ordinance amending Chapter 7.36 of Title 7 of the King City Municipal Code pertaining to graffiti removal.

BACKGROUND:

Under the King City Municipal Code, the presence of graffiti constitutes a public nuisance. Graffiti reduces property values, causes blight, is unsightly, and often encourages potential criminal activity by expressing gang-related symbols, colors and messages. Evidence supports that one of the most effective ways to both eliminate and prevent graffiti is to ensure that it is removed as quickly as possible.

The City has maintained an active program of removing graffiti as quickly as possible, particularly when it occurs on public property. It becomes more complicated when it is found on private property. As a result, staff are recommending modifications to the graffiti ordinance to help ensure it is removed as quickly as possible whether on private or public property. The City Council voted to introduce the ordinance at the July 9th meeting.

DISCUSSION:

Currently, the Municipal Code provisions require property owners to remove graffiti on their property within 72 hours. If they do not remove it, the City can then remove it and charge the property owner for reimbursement. The Municipal Code sets forth the process for notifying the property owner and entering the property.

CITY COUNCIL
CONSIDERATION OF AN ORDINANCE AMENDING CHAPTER 7.36 OF TITLE 7 OF THE KING CITY MUNICIPAL CODE PERTAINING TO GRAFFITI

REMOVAL
AUGUST 13, 2024
PAGE 2 OF 3
Staff believe that 72 hours is too long to allow graffiti to be visible. In some cases, this has resulted in the potential for visible graffiti to be present in the downtown area over a weekend period. The process for notifying and billing private property owners is also cumbersome and labor intensive. It can often take more staff time to recoup the costs than the amount of the reimbursement.

It becomes even more difficult when there is a dispute over the work or the cost.

Finally, it increases the work involved when staff are responsible for matching paint and ensuring the work on private property is adequate.

As a result, staff is proposing the following modified process, which is reflected in the proposed ordinance:

1. Staff will notify the property owner to remove graffiti within 24 hours.

2. If the property owner does not respond or cannot remove it that quickly, staff will cover it up immediately with whatever paint is available that most closely matches the surface when the location is accessible from the public right-ofway. The City will not charge the property owner.

3. The property owner will then be notified that they are required to restore the surface within 7 days by painting it with a matching color or completing other repairs necessary to return it to its original condition.

COST ANALYSIS:

The changes to the process will result in some work on private property that will not be reimbursed. However, staff believes the net result will be a reduction in overall staff time involved by simplifying the process.

ENVIRONMENTAL REVIEW:

The proposed changes in regulations are not a “project” for the purposes of the California Environmental Quality Act (CEQA) as it does not have the potential for resulting in either a direct physical change to the environment, or a reasonably foreseeable indirect physical change in the environment. No further action is required under CEQA.

ORDINANCE NO. 2024-829

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
KING, CALIFORNIA, AMENDING CHAPTER 7.36 OF
TITLE 7 OF THE KING CITY MUNICIPAL CODE,

GRAFFITI AND GRAFFITI IMPLEMENTS
WHEREAS, the City of King (“City”) is authorized by the California Constitution, Article XI, Section 7 to make and enforce within its limits all local, police, sanitary, and other ordinances and regulations not in conflict with general laws; and
WHEREAS, the City Council finds and determines that the quality of life in the community is closely related to the character and condition of its neighborhoods; and WHEREAS, the City Council desires to protect the appearance, integrity and character of the community and safeguard property within the community; and WHEREAS, graffiti reduces property values, causes blight, is unsightly, and often encourages potential criminal activity by expressing gang-related symbols, colors and messages; and
WHEREAS, evidence supports that one of the most effective ways to both eliminate and prevent graffiti is to ensure that it is removed as quickly as possible, so the City Council desires to amend its procedures when graffiti occurs on private property to expedite the removal process.

NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF KING FINDS AND ORDAINS AS FOLLOWS:

SECTION 1. The above recitals are all true and correct and are hereby adopted as findings.

SECTION 2. The Ordinance is exempt from the California Environmental Quality Act (“CEQA”) because it can be seen with certainty that there is no possibility that it will have a significant effect on the environment. (CEQA Guidelines § 15061(b)(3).) Further, the adoption and implementation of this Ordinance is not a project, as defined in CEQA Guidelines section 15378, because it has no potential for resulting in physical change to the environment, either directly or indirectly, and is therefore not subject to environmental review under CEQA pursuant to CEQA Guidelines section 15060(c)(3).

SECTION 3. The Sub-Section of Chapter 7.36, Section 7.36.028 of the King City Municipal Code is hereby amended to read as follows; all other portions of Chapter 7.36 remain in full force and effect:

Section 7.36.028 Declared nuisance.

For the reasons stated in Section 7.36.010 the city council finds and determines that the presence of graffiti on public or private property constitutes a public nuisance which may be abated in accordance with the provisions of this chapter, or the provisions of any other applicable law. It shall be the primary responsibility of the owner to abate graffiti and restore 01222.0001/903428.1 -2-
any surface located on private property to an approved state of maintenance and repair within seventy-two hours after receiving notice to restore the property as provided in this chapter. By reason of the findings contained in this chapter the city may expend city funds for the removal of graffiti or other inscribed material.

SECTION 4. The Sub-Section of Chapter 7.36, Section 7.36.070 of the King City Municipal Code is hereby amended to read as follows; all other portions of Chapter 7.36 remain in full force and effect:

Section 7.36.070 Removal of Graffiti.
(a) Use of Public Funds. Whenever the city becomes aware that graffiti is located on public or privately owned property viewable from a public place within the city, or viewable from outside the boundaries of the property on which the graffiti is located, the city manager, or his designee, is authorized to use public funds for the removal of the same, or for the painting or repair of the surface defaced or disfigured by the graffiti.
(b) It shall be the primary responsibility of the owner to abate graffiti located on private property within twenty-four hours. If the owner is unable to abate the graffiti or is unable to be notified within twenty-four hours, the city shall abate the graffiti when it can be accessed from the public right-of-way with available paint in stock or other means readily available. If paint that matches the surface is not readily available in stock by the city, the owner is then required to restore the surface within seven calendar days after receiving notice to restore the property by covering the surface with matching paint or making other repairs necessary to return it to an approved condition.
(c) Entry on Private Property.
(1) Securing Owner Consent. Prior to entering upon private property or property owned by a public entity other than the city for purposes of removing graffiti, the city shall attempt to secure the consent of the property owner or responsible person and a release of the city from liability for damage to the property. (2) Failure to Obtain Owner Consent. If a responsible party fails to remove the offending graffiti within the time specified in the notice, as hereinafter set forth, or if the city shall have requested consent to remove or paint over the offending graffiti, and the responsible party shall have refused consent for entry on terms acceptable to the city consistent with the provisions of this section, the city shall commence abatement. and cost recovery proceedings for the removal of the graffiti as hereinafter provided.
(3) Abatement and Cost Recovery Proceedings.
(A) Due Process Hearing. Not less than seventy-two hours’ notice shall be given to the owner of record of the time and place of a hearing (the “due process hearing”) at which the owner of record shall be entitled to present 01222.0001/903428.1 -3-
evidence and argue regarding the show cause order hereinafter set forth.

The hearing shall take place before the city manager or his designee. The notice shall advise the property owner to remove the graffiti within seventy-two hours of receiving the notice, or appear at the due process hearing and show cause why (a) there is no graffiti on his/her property viewable from outside the boundaries of his/her property; or (b) there is a legally valid reason why he or she should not be required to remove the graffiti. The notice of the due process hearing shall be served in the same manner as summons in a civil action as provided in the California Code of Civil Procedure, the provisions of which are herewith incorporated by reference, including those with regard to substituted service (CCP Sec. 415.20). If a person other than the owner of record is responsible for maintenance of the property, that person shall be served also.

If, after the due process hearing, regardless of whether the owner or other responsible party is in attendance, the hearing officer determines that the property contains graffiti viewable from a public place, the hearing officer shall give written notice (called “eradication order”) which shall state, in effect, that the city may enter upon the property not sooner than five days after the date of the eradication order, and cause the removal or painting over of the graffiti. The city shall provide the owner and responsible party with an accounting of the full cost of such eradication effort, which shall include, without limitation, the cost of the removal materials and the reasonable cost of the city’s employees or other persons retained by the city to remove the graffiti.
(B) On or after the date specified in the eradication order the city manager or his designee may implement the eradication order by causing the removal or painting over of the graffiti.
(C) If the owner or responsible party, following receipt of the accounting for the eradication effort by the city, believes that the amount thereof is excessive, he or she can request a hearing within ten days of receipt by the owner or responsible party of the accounting, and such hearing shall be held before the hearing officer within ten business days after the receipt by the city of a written request for the cost hearing. The hearing officer may make any adjustment of the cost bill that the hearing officer deems warranted. The costs (less adjustment, if any) shall be due and payable to the city by the responsible party within thirty days of receipt by the owner or responsible party of the hearing officer’s decision. (D) Any amount of the costs unpaid within thirty days shall, pursuant to Government Code Sections 38773, and following, shall constitute a lien on the property which is the subject of the eradication effort. A certified copy of a resolution of the lien, passed and adopted by the city council, shall be recorded by the director of public works, with the Monterey County recorder’s office.
01222.0001/903428.1 -4-
SECTION 5: EFFECTIVE DATE.

This Ordinance shall take effect and be in full force and effect from and after thirty (30) calendar days after its final passage and adoption. Within fifteen (15) calendar days after its adoption, the Ordinance, or a summary of the Ordinance, shall be published once in a newspaper of general circulation.

I HEREBY CERTIFY that the foregoing Ordinance was introduced by the City Council after waiving reading, except by Title, at a regular meeting thereof held on the _____ day of _________________ 2024, and adopted the Ordinance after the second reading at a regular meeting held on the ____ day of _______________ 2024, by the following roll call vote:

AYES:

NOES:

ABSTAIN:

ABSENT:

ATTEST
ERICA SONNE, City Clerk

CITY OF KING
By:

MIKE LEBARRE, Mayor
APPROVED AS TO FORM:

By:

ROY C. SANTOS, City Attorney
Aleshire & Wynder, LLP
01222.0001/903428.1 -5-
I, ______________________________, City Clerk of the City of King, California, DO HEREBY CERTIFY that the foregoing is a true and accurate copy of the Ordinance passed and adopted by the City Council of the City of King on the date and by the vote indicated herein.

Item No. 9 (E)

REPORT TO THE CITY COUNCIL
DATE: AUGUST 13, 2024
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: STEVEN ADAMS, CITY MANAGER
RE: CONSIDERATION OF SIDE LETTERS OF AGREEMENT WITH

THE KING CITY CONFIDENTIAL EMPLOYEES ASSOCIATION,

KING CITY POLICE SERGEANTS ASSOCIATION, KING CITY

POLICE OFFICERS ASSOCIATION, AND THE SERVICE
EMPLOYEES INTERNATIONAL UNION LOCAL 521
RECOMMENDATION:

It is recommended the City Council approve and authorize the City Manager to execute a Fourth Side Letter of Agreement with the King City Confidential Employees Association (KCCEA), Third Side Letter of Agreement with the King City Police Sergeants Association (KCPSA), a Third Side Letter of Agreement with the King City Police Officers Association (KCPOA), and a Seventh Side Letter of Agreement with the Service Employees International Union Local 521 (SEIU) to adjust the effective date for FY 2024-25 cost of living adjustments (COLAs).

BACKGROUND:

Each of the existing Memorandums of Understanding (MOUs) with the City’s represented labor groups have cost of living adjustments that were scheduled to take effect on July 6, 2024. Staff normally schedule COLAs to become effective on the first day of a new pay period in the new fiscal year. It would create a substantial amount of staff work to administer salary adjustments for all City employees in the middle of a pay period because a large number of manual calculations and adjustments would be required.

Unfortunately, an error was made because July 6, 2024 falls in the middle of a pay period. Since the error was not discovered until the time pay checks were about to be processed, it became necessary to adjust the COLAs’ effective date to the beginning of the pay period, which was June 29, 2024.

CITY COUNCIL

CONSIDERATION OF SIDE LETTER OF AGREEMENT WITH THE SERVICE EMPLOYEES INTERNATIONAL UNION LOCAL 521
AUGUST 13, 2024
PAGE 2 OF 3
DISCUSSION:

The adjustment to the effective date of the COLAs creates an inconsistency with the terms of the MOUs. Therefore, retroactive amendments with each MOU are needed to ensure all payments made under the MOU are correct and appropriately authorized. A proposed side letter of agreement with each labor group is attached for City Council consideration.

If City Council does not retroactively approve the adjustments, staff will need to make an adjustment to a future paycheck to retrieve the amount of the increased payments. This would once again result in a significant amount of staff work exceeding the cost of the increased payment. While the change slightly increased costs to the City, staff do not consider it to be a true cost impact because it would have been the same if the dates were established correctly in the original MOUs.

COST ANALYSIS:

The estimated cost of the increase in pay checks for the pay period effected is approximately $3,600.

ENVIRONMENTAL REVIEW:

Labor agreements are not a “project” for the purposes of the California Environmental Quality Act (CEQA) as they do not have the potential for resulting in either a direct physical change to the environment or a reasonably foreseeable indirect physical change in the environment. No further action is required under CEQA for City Council action.

ALTERNATIVES:

The following alternatives have been identified for City Council consideration:

1. Approve the Side Letters of Agreement;

2. Do not approved the Side Letters of Agreement and direct staff to make an adjustment to correct the overpayment in the next pay period; or

3. Provide staff other direction.

Exhibits:

1. Fourth Side Letter of Agreement with the King City Confidential Employees Association (KCEA)

FOURTH SIDE LETTER OF AGREEMENT

BETWEEN THE CITY OF KING AND THE
KING CITY CONFIDENTIAL EMPLOYEES’ ASSOCIATION
This side letter is entered into by and between the City of King (“City”) and the King City Confidential Employees’ Association (“KCCEA”).

RECITALS

1. A Memorandum of Understanding (MOU) between the City and KCCEA is in effect for the period of July 1, 2022 to June 30, 2025.

2. An error was identified in the existing Memorandum of Understanding (MOU) regarding the scheduled cost of living adjustment (COLA). The COLA was scheduled to take effect on July 6, 2024 which falls in the middle of a pay period. To avoid the substantial amount of administrative work to administer salary adjustments for all City employees in the middle of a pay period, the COLA was intended to take effect at the beginning of the pay period; June 29, 2024.

AGREEMENT
It is therefore agreed that the City and KCCEA will implement the following changes to the MOU effective June 29, 2024:

1. ARTICLE II, SECTION 1 – SALARY, Subsection 1.3 shall be amended to read as follows:

1.3 Effective June 29, 2024, employees shall receive a five percent (5%) base salary increase.

2. All provisions approved in this Second Side Letter of Agreement amending the existing MOU shall be incorporated herein and remain in effect through the extension of the MOU as provided by this side letter of agreement. All other terms and conditions of employment outlined in the MOU and previous side letters remain unchanged and in full effect.

Agreed to this ___ day of August 2024.

For the City:

Steven Adams, City Manager Date
Exhibit 1
2 Veronica Contreras, Human Resources Manager Date
For the Association:

Andrea Wasson, President Date

THIRD SIDE LETTER OF AGREEMENT

BETWEEN THE CITY OF KING AND THE
KING CITY POLICE SERGEANTS’ ASSOCIATION
This side letter is entered into by and between the City of King (“City”) and the King City Police Sergeants’ Association (“KCPSA”).

RECITALS

1. A Memorandum of Understanding (MOU) between the City and KCPSA is in effect for the period of May 15, 2021 to June 30, 2024.

AGREEMENT
It is therefore agreed that the City and KCPSA will implement the following changes to the MOU effective June 29, 2024:

1. ARTICLE II, SECTION 1 – SALARY, Subsection 1.1.f shall be amended to read as follows:
f. Effective June 29, 2024, employees shall receive a three percent (3%) base salary increase.

2. All provisions approved in this Third Side Letter of Agreement amending the existing MOU shall be incorporated herein and remain in effect through the extension of the MOU as provided by this side letter of agreement. All other terms and conditions of employment outlined in the MOU and previous side letters remain unchanged and in full effect.

It is therefore agreed that the City and KCPSA will implement the following changes to the MOU effective June 29, 2024:

Agreed to this ___ day of August 2024.

For the City:

Steven Adams, City Manager Date
Exhibit 2
2 Veronica Contreras, Human Resources Manager Date
For the Association:

Joshue Partida, President Date
Brennan Lux, Vice President Date

THIRD SIDE LETTER OF AGREEMENT

BETWEEN THE CITY OF KING AND THE
KING CITY POLICE OFFICERS’ ASSOCIATION
This side letter is entered into by and between the City of King (“City”) and the King City Police Officers’ Association (“KCPOA”).

RECITALS

1. A Memorandum of Understanding (MOU) between the City and KCPOA is in effect for the period of May 15, 2021 to June 30, 2025.

AGREEMENT
It is therefore agreed that the City and KCPOA will implement the following changes to the MOU effective June 29, 2024:

1. ARTICLE II, SECTION 1 – SALARY, Subsection 1.1.f. shall be amended to read as follows:
f. Effective June 29, 2024, employees shall receive a three percent (3%) base salary increase.

AGREEMENT
It is therefore agreed that the City and KCPOA will implement the following changes to the MOU effective June 29, 2024:

Agreed to this ___ day of August 2024.

For the City:

Steven Adams, City Manager Date
Exhibit 3
2 Veronica Contreras, Human Resources Manager Date
For the Association:

Daisy Gurley, President Date
Matthew Dillon, Vice President Date

SEVENTH SIDE LETTER OF AGREEMENT

BETWEEN THE CITY OF KING AND THE
SERVICE EMPLOYEES INTERNATIONAL UNION LOCAL 521
This side letter is entered into by and between the City of King (“City”) and the Service Employees International Union Local 521 (“SEIU”).

RECITALS

1. A Memorandum of Understanding (MOU) between the City and SEIU is in effect for the period of July 1, 2022 to June 30, 2025.

AGREEMENT
It is therefore agreed that the City and SEIU will implement the following changes to the MOU effective June 29, 2024:

1. ARTICLE II, SECTION 1 – SALARY, Subsection 1.3 shall be amended to read as follows:

1.3 Effective June 29, 2024, employees shall receive a six percent (6%) base salary increase.

2. All provisions approved in this Fifth Side Letter of Agreement amending the existing MOU shall be incorporated herein and remain in effect through the extension of the MOU as provided by this side letter of agreement. All other terms and conditions of employment outlined in the MOU and previous side letters remain unchanged and in full effect.

Agreed to this ___ day of August 2024.

For the City:

Steven Adams, City Manager Date
Exhibit 4
2 Veronica Contreras, Human Resources Manager Date
For the Union:

Jay Donato, Internal Organizer Date
Josefina Deniz, Steward Date
Item No. 9(F)

REPORT TO THE CITY COUNCIL
DATE: AUGUST 13, 2024
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: MIKE HOWARD, FINANCE DIRECTOR
RE: CONSIDERATION OF CITY OF KING KCCP PAYMENTS FOR
THE MONTH OF JUNE 2024
RECOMMENDATION:

It is recommended City Council receive and file.

BACKGROUND:

At least once a month, the City Treasurer shall submit to the City Council, a copy of the invoices paid for the previous month.

DISCUSSION:

The purpose of this item is to provide the Council an opportunity to review and monitor ongoing expenditures. These documents are attached.

COST ANALYSIS:

There is no fiscal impact as a result of this action.

ENVIRONMENTAL REVIEW:

No Environmental Review required for this item.

ALTERNATIVES:

The following alternatives are provided for Council consideration:

1. Receive and file the report; or

2. Provide other direction to staff regarding requests for additional information.

Item No. 9(G)

It is recommended City Council receive and file.

BACKGROUND:

At least once a month, the City Treasurer shall submit to the City Council, a copy of the invoices paid for the previous month.

DISCUSSION:

The purpose of this item is to provide the Council an opportunity to review and monitor ongoing expenditures. These documents are attached.

COST ANALYSIS:

There is no fiscal impact as a result of this action.

ENVIRONMENTAL REVIEW:

No Environmental Review required for this item.

ALTERNATIVES:

The following alternatives are provided for Council consideration:

1. Receive and file the report; or

2. Provide other direction to staff regarding requests for additional information.

Item No. 10 (A)

REPORT TO THE CITY COUNCIL
DATE: AUGUST 13, 2024
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: STEVEN ADAMS, CITY MANAGER
RE: CONSIDERATION OF AN ORDINANCE ESTABLISHING
CHAPTER 7.72 OF TITLE 7 OF THE KING CITY MUNICIPAL

CODE PERTAINING TO SHOPPING CART REGULATIONS
RECOMMENDATION:

It is recommended City Council introduce to be read by title only an Ordinance establishing Chapter 7.72 of Title 7 of the King City Municipal Code pertaining to shopping cart regulations, open the hearing, allow for public testimony, close the hearing, waive first reading of the Ordinance, and approve the introduction of the Ordinance.

BACKGROUND:

The City has experienced an increasing problem with abandoned shopping carts in the community. They cause blight, create significant pedestrian and vehicle obstacles, and damage the City’s beautification efforts. It has resulted in a significant amount of staff time by the Public Works Department staff to respond to abandoned carts, which involves notifying the business owners and then manually removing and returning the carts if the business does not respond in a timely manner. The majority of carts retrieved come from the City’s largest grocery store. Approximately 10% are from other businesses.

DISCUSSION:

Shopping cart regulations are restricted by the California Business and Professions Code. The proposed ordinance would create the following requirements consistent with State law:
• Removal and abandonment of shopping carts from a business without permission of the owner is prohibited.

CITY COUNCIL
CONSIDERATION OF AN ORDINANCE ESTABLISHING CHAPTER 7.72 OF TITLE 7 OF THE KING CITY MUNICIPAL CODE PERTAINING TO SHOPPING

CART REGULATIONS
AUGUST 13, 2024
PAGE 2 OF 3
• Every shopping cart is required to identify the owner and owner’s contact information.
• Businesses with shopping carts shall include a sign notifying the public that removal of shopping carts is prohibited.
• Shopping carts are required to be locked after business hours. • The City shall impound carts that are found abandoned. • Retrieval of carts by the owner is required within 3 business days. After 3 business days, a fee set by City Council resolution to recover City costs will be charged.
• If over 3 carts are not retrieved within the required 3 business days within a 6-month period, a fine of $50 will also be charged to release the cart. • Abandoned shopping carts can be disposed of after 30 days.

If approved, City staff will notify each business in the City utilizing shopping carts of the new regulations. A public education effort will also be implemented.

COST ANALYSIS:

The intent of the Ordinance is to reduce staff time involved in retrieving shopping carts.

ENVIRONMENTAL REVIEW:

The proposed regulations are not a “project” for the purposes of the California Environmental Quality Act (CEQA) as it does not have the potential for resulting in either a direct physical change to the environment, or a reasonably foreseeable indirect physical change in the environment. No further action is required under CEQA.

ALTERNATIVES:

The following alternatives are provided for Council consideration:

1. Introduce the proposed Ordinance;

2. Direct staff to modify the Ordinance to only charge the fine or to make other changes;

ORDINANCE NO. 2024-830

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF KING ESTABLISHING CHAPTER 7.72 OF TITLE 7 OF THE KING CITY MUNICIPAL CODE PERTAINING

TO SHOPPING CART REGULATIONS
WHEREAS, California Business and Professions Code §§22435 through 22435.8 regulated shopping and laundry cart retrieval services and authorizes a city to retrieve off-premises shopping and laundry carts and fine the shopping cart owner up to $50 if four or more shopping or laundry carts are not retrieved in any six month period; and WHEREAS, Subdivision (d) of Business and Professions Code §22435.7 authorizes cities which impound shopping carts to recover the actual cost of the recovery service; and WHEREAS, the City Council desires to protect the appearance, integrity and character of the community and safeguard property within the community; and WHEREAS, the City Council finds that abandoned shopping carts create blight, serious pedestrian and vehicle safety hazards, and increased costs to the City for abatement services; and WHEREAS, this Ordinance is intended to regulate use of shopping carts provided by commercial businesses in order to reduce the number of shopping carts that are removed from the business site and left abandoned in other public and/or private property locations; and NOW THEREFORE, the City Council of the City of King does hereby ordain as follows:

SECTION 1. The above recitals are all true and correct and are hereby adopted as findings..

SECTION 3. Chapter 7.53, of Title 7, of the King City Municipal Code is hereby established to read in its entirety as follows:

Chapter 7.72

SHOPPING CARTS
Section 7.72.010 Purpose.

The purpose of this chapter is to establish regulations on the use and provision of shopping carts at commercial businesses to reduce the theft and abandonment of shopping carts on public and private property. The regulations are necessary to reduce and prevent blight, pedestrian and vehicle hazards, unsightly trash and garbage, and public expense. It is important for the city to maintain the condition and character of its commercial and residential neighborhoods to protect quality of life in the community. The city council further finds and determines that the presence of abandoned shopping carts anywhere in the city constitutes both a public and private nuisance which may be abated in accordance with the provisions of this chapter.

Section 7.72.020 Definitions.
(a) “Abandoned cart” shall mean any cart that has been removed, without written consent of the owner, from the owner’s business premises and is located on either public or private property.
(b) Agent” shall mean the person or persons designated by the owner of the cart authorized as the person to perform or provide retrieval services on behalf of the owner. The agent may be the owner, store manager, employee or private cart retrieval company.
(c) “Cart” shall mean a shopping cart or basket which is mounted on wheels or a similar device generally used in a retail or commercial establishment by a customer for the purpose of transporting goods of any kind.
(d) “Owner” shall mean any person or entity, who in connection with the conduct of a business, owns, leases, possesses, or makes a cart available to customers or the public. For the purposes of this chapter, owner shall also include the agent. (e) “Premises” shall mean the entire area owned, occupied, and/or utilized by an owner which provides carts for use by customers or other persons, including any parking lot or other property provided on behalf of the owner for customer parking or use.

Section 7.72.030 Unauthorized removal unlawful.

It shall be unlawful for any person, either temporarily or permanently, to remove a cart from a premises or be in possession of a lawfully marked cart that has been removed from a premises without written consent of the owner or for the purpose of repair, maintenance, or disposal.

Section 7.72.040 Abandonment prohibited.

It shall be unlawful for any person to cause or permit any cart to be abandoned on or upon any sidewalk, street or other public area, other than the premises of the owner of such cart.

Section 7.72.050 Cart identification required.

Every cart owned or provided by any owner shall have the sign that includes the owner’s name, address and phone number required by Section 22435.1 of the California Business and Professions Code permanently affixed to the cart.

Section 7.72.060 Cart removal warning signs.

Owners shall prominently display signs notifying the public that removal of carts from the premises is prohibited under Business and Professions Code Section 22435 et seq and this chapter.

Section 7.72.070 Mandatory locking of carts after hours.

Carts stored outdoors shall be locked after business hours in a manner that prevents theft.

Section 7.72.080 City removal.

The city shall remove and impound any cart determined to be abandoned and store it at a designated city facility. The city shall notify the owner or agent to schedule an appointment to retrieve the cart. Such notice may be by telephone, email or text message to the owner or owner’s agent.

Section 7.72.090 Mandatory retrieval required within three business days of notification.

Within three business days of city notification, the owner or agent shall cause the identified cart(s) to be retrieved. If any cart is not retrieved within three business days, commencing on the fourth business day following the date of the notice, the city shall charge a fee set by city council resolution in an amount necessary to recover the actual cost of providing the service prior to releasing the cart to the owner or agent.

Section 7.72.100 Fine for failure to retrieve carts in a timely manner The city shall charge a fine of fifty dollars in addition to the city cost recovery fee for each occurrence in excess of three during a six-month period for failure to retrieve shopping carts within three business days as required pursuant to Section 7.72.090.

Section 7.72.110 Disposal of carts
Any cart not reclaimed within thirty days of receipt of a notice of violation by the owner or agent may be sold or otherwise disposed of by the city.

SECTION 4: EFFECTIVE DATE.

AYES:

NOES:

ABSTAIN:

ABSENT:

ATTEST
ERICA SONNE, City Clerk

CITY OF KING
By:

MIKE LEBARRE, Mayor
APPROVED AS TO FORM:

By:

ROY C. SANTOS, City Attorney
Aleshire & Wynder, LLP
I, ______________________________, City Clerk of the City of King, California, DO HEREBY CERTIFY that the foregoing is a true and accurate copy of the Ordinance passed and adopted by the City Council of the City of King on the date and by the vote indicated herein.

Item No. 10(B)

REPORT TO THE CITY COUNCIL
DATE: AUGUST 13, 2024
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: DOREEN LIBERTO, AICP, COMMUNITY DEVELOPMENT

DIRECTOR
RE: CONSIDERATION OF AN ORDINANCE AMENDING MUNICIPAL
CODE CHAPTER 17.26 (HIGHWAY SERVICE ZONING DISTRICT)

TO EXCLUDE RESIDENTIAL DEVELOPMENT, CHANGE

LANDSCAPING REQUIREMENTS AND OTHER MINOR

CHANGES
RECOMMENDATION:

It is recommended that the City Council continue this item to the next regularly scheduled Council meeting on August 27, 2024.

BACKGROUND:

The City is diligently working on several communitywide programs, including economic development to improve the local economy, updating the General Plan Land Use Element, and updating the Subdivision and Zoning Ordinances. A primary objective is to maintain and expand existing businesses and attract new businesses. Therefore, it is important to include enough commercially designated areas to accommodate business growth. The H-S Zoning District allows residential development, which may detract from commercial development. Staff is recommending that all residential uses be prohibited in the H-S Zoning District to ensure there is sufficient land for commercial development. The Planning Commission considered this item on August 6, 2024 and continued it August 20, 2024.

DISCUSSION:

There were three Planning Commissioners at the August 6, 2024 meeting. The Planning Commission continued this item to the August 20, 2024 meeting so the

01222.0001/979923.1 1
ORDINANCE NO. 2024-831

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF KING AMENDING CHAPTER 17.26 OF TITLE 17 OF THE KING CITY MUNICIPAL CODE PERTAINING

TO THE HIGHWAY SERVICE ZONING DISTRICT
WHEREAS, the City of King (“the City”) has the authority, under its police power, to enact regulations for the public peace, morals, and welfare of the City, California Constitution Article XI, section 7; and
WHEREAS, it is the intent of the City to amend the Highway Service Zoning District; and
WHEREAS, on August 6, 2023, the Planning Commission (Commission) conducted a duly noticed public hearing on the Ordinance and accepted public comments, and public testimony and evidence, both written and oral, after which public testimony was closed and the Commission recommended the City Council adopt the Ordinance; and
WHEREAS, on August 13, 2023, the City Council (Council) conducted a duly noticed public hearing on the Ordinance and accepted public comments, and public testimony and evidence, both written and oral, after which public testimony was closed and the Council conducted the first reading of the Ordinance.

NOW THEREFORE, the City Council of the City of King does hereby ordain as follows:

SECTION 1. The above recitals are incorporated are hereby by reference.

SECTION 2. The Ordinance is exempt from the California Environmental Quality Act (“CEQA”) because it can be seen with certainty that there is no possibility that it will have a significant effect on the environment, and merely provides for ministerial regulations and procedures. (CEQA Guidelines § 15061(b)(3).) It is also exempt because it consists of regulations and restrictions on activities to assure the maintenance, restoration, or enhancement of natural resources and the environment by prohibiting environmentally destructive components of unregulated cannabis cultivation. (CEQA Guidelines §§ 15307 and 15308.)
SECTION 3. Chapter 17.26 of Title 17 of the King City Municipal Code specifically identified below is amended to read as follows:

Chapter 17.26. H-S—HIGHWAY SERVICE DISTRICT
Title 17. Zoning
Chapter 17.26. H-S—HIGHWAY SERVICE DISTRICT
Exhibit 1
01222.0001/979923.1 2
§ 17.26.010. Purpose.

The purpose of the H-S district is to provide a district for vehicular-oriented uses with sufficient architectural and landscaping controls to protect the amenities of the areas.

The following regulations shall apply in all H-S districts and shall be subject to the provisions of Chapters 17.48 through 17.52 of this title. § 17.26.020. Uses permitted without CUP.

If the community development director, or designee, determines that all the following circumstances exist regarding a development proposal, a conditional use permit may not be required; for the uses listed under Chapter 17.26.30 of this chapter; however, the project shall be subject to either architectural review or business license clearance:
(1) The project will be occupying an existing building or will require an addition to an existing structure that will not result in an increase of more than twenty-five percent of the floor area of the structure before the addition, or five hundred square feet, whichever is less;
(2) The proposed use is the same or similar in character to the existing use, as determined by the community development director, or designee. Exceptions may be allowed if the community development director determines that the new use is less intensive than the existing use; and
(3) The project is exempt from CEQA review and there is no possibility of a significant impact on the environment.
§ 17.26.030. Uses permitted subject to obtaining conditional use permit.

Uses subject to conditional use permits are as follows:
(1) Professional office and related uses, including:
(i) General offices and professional offices;
(ii) Financial services and institutions.
(2) Commercial uses, including:
(i) Grocery stores, and convenience stores (convenience stores, which are not limited to stores located on premises of and operated in conjunction with, another use permitted by this section. The term “convenience store,” as used in this section means a store stocking a limited supply of foods, beverages, and related types of goods and merchandise customarily found in grocery stores and occupying a total area of not more than two thousand five hundred square feet. All sales and merchandise displays shall be contained within the building; (ii) Department stores, including furniture stores and clothing stores; (iii) General retail stores;
(iv) Home improvement stores, hardware stores.
(3) Restaurants including:
(i) With and without entertainment and/or serving alcoholic beverages; (ii) Fast food restaurants with and without drive-thru windows. (4) Medical use, including:
(i) Veterinary offices and animal hospitals, excluding exterior kennels, pens or runs;
01222.0001/979923.1 3
(ii) Emergency care centers.
(5) Auto-related service and repair, including:
(i) Gasoline service stations, provided that all operations except the servicing of gasoline, oil or water be carried on within a building and that there be no sales of goods not customarily related to the sale of gasoline;
(ii) Motor vehicle, trailer, farm machinery sales and service and tire recapping. (6) Hotel/motel, including:
(i) Hotels and motels.
(7) Public/quasi-public uses, including:
(i) Churches Religious Institutions;
(ii) Clubs, lodges;
(iii) Community centers;
(iv) Private and public recreation centers;
(v) Public utilities and public service substations, microwave facilities, reservoirs, pumping plants and similar installations.
(8) All residential uses are prohibited. Residential uses including (i) Trailer courts or mobile home courts subject to construction and performance standards set out in Chapter 17.64 of this title.
(9) Unclassified uses, including:
(i) Plant nurseries, car wash and building materials entirely within a building; (ii) Sale of fresh fruits and vegetables to be displayed within a structure or upon a deck or other appurtenance or structure; provided, that any such use shall meet all parking and landscaping requirements of the King City Municipal Code. (10) Drinking establishments.
(11) Other uses similar to, and no more objectionable than the uses identified above, as determined by the planning commission, pursuant to Municipal Code Section 17.02.050. § 17.26.040. Accessory buildings and uses permitted.
(a) Accessory buildings for storage are permitted if constructed simultaneously with or subsequent to the main building on the same lot.
(b) Accessory uses which are incidental to the uses permitted. (c) Permanent non-flashing signs appurtenant to a permitted use when attached to the building. See Chapter 17.54 for performance standards on size and height. § 17.26.050. Maximum building height.

With the exception of hotels and motels, no building shall be more than two stories and thirty feet in height. Hotels and motels shall be no more than four stories and fifty feet in height.
§ 17.26.060. Minimum building site.

Unless optional design standards are used as set out in Section 17.26.110, the following shall apply:
(1) Minimum Building Site.
01222.0001/979923.1 4
Use Minimum Building Site
Motor vehicle, trailers, farm machinery
sales
20,000 square feet
Trailer courts 3 acres
Public and private recreation uses 1 acre
Churches, clubs and lodges 20,000 square feet
Hotels, motels, restaurants and service
stations
2,000 20,000 square feet
All other uses 6,000 square feet
(2) Minimum Lot Width. The minimum lot width shall be one hundred square feet. § 17.26.070. Maximum building site coverage.

The maximum coverage of a lot by all structures shall not exceed fifty percent of the lot area.
§ 17.26.080. Minimum yards required.

Unless otherwise required in Chapters 17.48 through 17.52, establishing plan lines, or unless optional design standards have been used as set out in Section 17.26.110, the following requirements shall apply:
(1) Front Yard. Each lot in the H-S district shall have a front yard extending across the full width of the subject property of not less than ten feet. (2) Side Yard. There shall be a side yard on each side of the lot extending from the front yard to the rear yard of not less than ten feet on an interior lot line. A corner lot shall have side yard abutting the street of not less than twenty feet. (3) Rear Yard. Each lot shall have a rear yard extending across the full width of the lot of not less than twenty feet.

Location Setback
Front Yard 10 feet
Side Yard
Interior Lot
Corner Lot
10 feet
20 feet
Rear Yard 20 feet
§ 17.26.090. Fences—Walls.

Fences and walls are permitted but not required. Such fences and walls shall not exceed six feet in height, and where the same are located adjacent to any access into a public street the same shall not exceed three feet in height.
§ 17.26.100. Alley access.
01222.0001/979923.1 5
Where a building on a lot abuts an alley and has access to such alley, such building shall be located not less than thirty feet from the opposite side of such abutting alley. § 17.26.110. Optional design and improvement standards.

When a development has been approved by the planning commission under the optional design and improvement standards of the subdivision title, such approved building sites, coverage and yards under such plan shall be considered as the requirements of this title. § 17.26.120. Minimum off-street parking.

The provision of Chapter 17.52 shall apply in determining the amount of parking space that must be provided for each use. Parking space shall be improved as set forth in said chapter.
§ 17.26.130. Architectural elevations, site plans and landscaping approval.

Architectural elevations, including a color and materials board, and site plans shall be considered by the planning commission as part of the conditional use permit review. Draft landscaping plans shall be submitted by the applicant and approved by the planning commission as part of the project review.prior to the issuance of any building permit. Final landscaping plans shall be submitted as part of the building permit submittal.

Minimum landscaping required shall be twenty percent of the land area landscaped with suitable plants, trees and shrubs. All parking and service areas, including driveways, when located adjacent to residential districts shall be screened and separated from such property by a solid wall, view-obscuring fence and compact evergreen hedge six feet in height, except as provided elsewhere in the code.

These standards are intended to reduce urban heat islands and provide an attractive landscaping appearance.

Standard Minimum Requirement
Landscaped Area 15%
Plantings
• Trees Canopy trees shall be provided
throughout the parking area and
perimeter at the equivalent of one tree for
every four spaces to provide shade. The
area of the tree canopy shall be counted
as part of the landscaping coverage.

Thirty percent of the total shall be 24-inch
inch container trees and 70% shall be 15-
gallon container trees.
• Shrubs Twenty-five (25%) of the mix of shrubs
should come in 5-gallon containers and
the balance in 1-gallon containers.
01222.0001/979923.1 6
• Groundcover Groundcover should be live plant
material. Bark, colored rock, gravel and
similar materials may be used in
combination with a living ground cover
but be incidental to live plant material.

Parking Areas Ten (10%) percent of the parking areas
shall be landscaped with trees that have
large canopies and ground cover.

Bumper Overhand Areas To increase parking lot landscaping area, a parking stall area may be landscaped
with low-growth, hearty materials in lieu of
paving, allowing a bumper overhand
while maintain the required parking
dimensions.

Plant Material The plants shall be drought tolerate and adaptable to the King City environment.

Maintenance All landscaped areas shall be
permanently always maintained in a
healthy and sound condition, in
compliance with the approved Landscape
Plan. Irrigation systems and their
components shall be maintained in a fully
functional manner consistent with the
originally approved design. The
maintenance required shall include
adjusting, checking, and repairing
irrigation equipment; resetting automatic
controllers; aerating and de-thatching turf
areas; adding/replenishing fertilizer,
mulch, and soil amendments; insect
control; the replacement of dead or
diseased plants; pruning; watering; and
weeding all landscaped areas.

Parking lots shall include trees to provide shade and reduce the temperature. Tree selection, planting approach and irrigation should provide for rapid growth and sustained health of shade trees. Small ornamental trees are appropriate for accent planting but should not be used as shade trees. Trees and landscaping elements shall be used to organize large parking areas into recognizable smaller segments that reflect pedestrian circulation and site organization and scale. All landscaping areas shall meet the requirements of the Municipal Code Chapter 15.50.

SECTION 4: This Ordinance shall take effect and be in full force and effect from and after thirty (30) calendar days after its final passage and adoption. Within fifteen (15) 01222.0001/979923.1 7
calendar days after its adoption, the Ordinance, or a summary of the Ordinance, shall be published once in a newspaper of general circulation.

AYES:

NOES: _____
ABSTAIN:

ABSENT:

ATTEST
ERICA SONNE, City Clerk

CITY OF KING
By:

MIKE LEBARRE, Mayor
I, ______________________________, City Clerk of the City of King, California, DO HEREBY CERTIFY that the foregoing is a true and accurate copy of the Ordinance passed and adopted by the City Council of the City of King on the date and by the vote indicated herein.

Item No. 11(A)

REPORT TO THE CITY COUNCIL
DATE: AUGUST 13, 2024
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: DOREEN LIBERTO, AICP, COMMUNITY DEVELOPMENT

DIRECTOR
RE: CONSIDERATION OF COLLABORATOIN WITH LAWRENCE

LIVERMORE NATIONAL LAB REGARDING CARBON CAPTURE

AND STORAGE PROJECT
RECOMMENDATION:

It is recommended the City Council receive a presentation from Lawrence Livermore National Laboratory and direct staff to proceed with discussions on a potential carbon capture and storage project collaboration.

BACKGROUND:

Lawrence Livermore National Lab (LLNL) contacted staff asking if the City would be interested in collaborating on a new technology capturing carbon dioxide (CO2), turning it into rock and burying it underground. Carbon capture and storage addresses climate change by removing CO2 from the air and storing it underground. Carbon capture and storage is a way to reduce CO2 emissions, which could be a key to help address global warming. One reason LLNL selected King City is due to the mines in the area. Two communities from the State of Washington, the City of Livermore and two communities on the East Coast are also part of the project.

DISCUSSION:

Lawrence Livermore National Laboratory (LLNL) is a federally funded research and development center in Livermore, California. Originally established in 1952, the laboratory now is sponsored by the United States Department of Energy (DOE) and administered privately by Lawrence Livermore National Security, LLC. LLNL's mission is to enable U.S. security and global stability and resilience by empowering

CITY COUNCIL

CONSIDERATION OF COLLABORATOIN WITH LAWRENCE LIVERMORE

NATIONAL LAB REGARDING CARBON CAPTURE AND STORAGE PROJECT AUGUST 13, 2024
PAGE 2 OF 3
multidisciplinary teams to pursue bold and innovative science and technology. Their website address is: www.llnl.gov
LLNL received funding from the DOE to collaborate with stakeholders and create a community partnership to develop measurement, reporting and verification (MRV) protocol for carbon dioxide removal methods based on carbon capture and storage, or carbon dioxide removal (CDR) methods. LLNL would like King City to eventually consider collaborating on this project and return to the community with regular briefings and engage with labor, community, and education leaders. LLNL staff will provide an overview of this project to the City Council and community. A copy of the August 13th presentation is attached.

ENVIRONMENTAL REVIEW:

The presentation is not a project subject to the California Environmental Quality Act (CEQA) because it has no potential to result in either a direct, or reasonably foreseeable indirect, physical change in the environment. (State CEQA Guidelines, §§ 15060, subd. (b)(2)-(3).)
COST ANALYSIS:

There are no costs associated with this action.

ALTERNATIVES:

The following recommendations are provided for Planning Commission consideration:

1. Accept the presentation from LLNL and direct staff to proceed with additional discussion on participation;

2. Do not direct staff to proceed;

3. Request additional information or community outreach; or

4. Provide staff with other direction.

Exhibits:

1. LLNL Staff Presentation

EXHIBIT 1
PRESENTATION FROM COREY MYERS, PhD (Mechanical Engineering)

LAWRENCE LIVERMORE NATIONAL LABS

CARBON CAPTURE AND STORAGE
AUGUST 12, 2024
Background on Lawrence Livermore National Labs (LLNL)
o Mission, history, general information
o Work on climate change
o Projects in the Central California region
Background on the current project
o The industries and opportunities developing in climate change o CO2 removal and CO2 mineralization
o Preparation of ‘best practices’ by LLNL & Pacific Northwest National Laboratory (PNNL)
o Why we have approached King City
Future opportunities and requests
o September meeting at LLNL
o Hearing from King City and testing community economic benefit tools Item No. 11(B)

REPORT TO THE CITY COUNCIL
DATE: AUGUST 13, 2024
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: MIKE HOWARD, FINANCE DIRECTOR
RE: CONSIDERATION OF THE CITY AND CDA SUCCESSOR
AGENCY’S AUDITED FINANCIAL STATEMENTS FOR THE
FISCAL YEAR 2022-2023
RECOMMENDATION:

It is recommended that the City Council and the Board of Directors of the King City CDA Successor Agency accept the City and CDA Successor Agency’s Audited Financial Statements for Fiscal Year Ended June 30, 2023.

BACKGROUND:

The State of California Government code (sections 25250 & 25253) requires all general-purpose local government to issue an annual report on the financial position and activities of that government. The report must be presented in conformance with generally accepted accounting principles (GAAP) and must be audited by an independent firm of certified public accountants (CPA) in conformance with generally accepted auditing standards (GAGAS). The goal of the audit by an independent firm is to provide reasonable assurance that the accounting transactions, practices, and procedures result in fair presentation of the financial position of the organization. In addition, the audit provides the same type of assurance about management’s assertions about the adequacy of internal accounting controls to safeguard the assets of the entities.

DISCUSSION:

The independent auditor has rendered an unqualified audit opinion indicating that the City and Successor Agency are materially in compliance and have accounting records that properly reflect the financial position of those entities.

The final numbers for FY 2022-23 demonstrate continued positive movement for the City, particularly in the General Fund. The General Fund ended the Fiscal Year with a decrease to the Fund Balance of $532,873. This is in line with the

CITY OF KING CITY
INDEPENDENT AUDITOR’S REPORT
AND

FINANCIAL STATEMENTS
JUNE 30, 2023
Exhibit 1

C O N T E N T S
Page
INDEPENDENT AUDITOR’S REPORT 1 – 3
BASIC FINANCIAL STATEMENTS:

Government-Wide Financial Statements
Statement of Net Position 4
Statement of Activities 5
Fund Financial Statements
Balance Sheet – Governmental Funds 6
Reconciliation of Total Governmental Fund Balance to
Net Position of Governmental Activities 7
Statement of Revenue, Expenditures and Changes in
Fund Balance – Governmental Funds 8
Reconciliation of Statement of Revenue, Expenditures
and Changes in Fund Balance of Governmental Funds
to the Statement of Activities 9
Statement of Net Position – Proprietary Funds 10
Statement of Revenue, Expense and Changes in Fund Net
Position – Proprietary Funds 11
Statement of Cash Flow – Proprietary Funds 12 – 13
Statement of Fiduciary Net Position – Private-Purpose
Trust Fund – Successor Agency 14
Statement of Changes in Fiduciary Net Position – Private-Purpose Trust Fund – Successor Agency 15
Notes to Basic Financial Statements 16 – 42
C O N T E N T S (Continued)
Page
Required Supplementary Information
Budgetary Comparison Schedule – General Fund 43
Budgetary Comparison Schedule – American Rescue Plan Act 44 Budgetary Comparison Schedule – CDBG Grant 45
Budgetary Comparison Schedule – Development Impact Fees Fund 46 Budgetary Comparison Schedule – Measure X Fund 47
Schedule of the City’s Proportionate Share of Net Pension Liability 48 Schedule of Contributions 49
Supplemental Only Information
Combining Balance Sheet – Nonmajor
Governmental Funds 50 – 52
Combining Statement of Revenue, Expenditures and
Changes in Fund Balance – Nonmajor
Governmental Funds 53 – 55
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 56 – 57 INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR

EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE 58 – 60
Schedule of Expenditures of Federal Awards 61
Notes to Schedule of Expenditures of Federal Awards 62
Schedule of Findings and Questioned Costs 63
Summary Schedule of Prior Audit Findings 64
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 INDEPENDENT AUDITOR’S REPORT
To the Honorable Mayor and City Council
City of King City, California
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of King City (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 as listed in the table of contents.

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City, as of June 30, 2023, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

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

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

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.
2 Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions.

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

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

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

Required Supplementary Information
Management has omitted the management’s discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information.

Accounting principles generally accepted in the United States of America require that the budgetary comparison information on pages 43–47 and the Schedule of the City’s Proportionate Share of Net Pension Liability and the Schedule of Contributions pages 48 and 49 be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. 3 Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The accompanying combining and individual nonmajor fund financial statements and schedule of expenditures of federal awards, as required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements and the schedule of expenditures of federal awards are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated August 5, 2024, on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering City’s internal control over financial reporting and compliance.

August 5, 2024
See accompanying notes. 4

CITY OF KING CITY

STATEMENT OF NET POSITION
JUNE 30, 2023
Governmental Business-Type
Activities Activities Total
ASSETS
Cash and investments 8,163,846 $ 8,298,813 $ 16,462,659 $ Restricted cash and investments - 4,031 4,031
Accounts receivable 718,169 238,129 956,298
Due from other governments 2,682,560 - 2,682,560
Interest receivable 965,750 33,383 999,133
Notes receivable 3,000,000 - 3,000,000
Capital assets (net of allowance
for depreciation and amortization) 14,186,600 14,645,630 28,832,230 Total assets 22,760,956 30,175,955 52,936,911
DEFERRED OUTFLOW OF RESOURCES 220,240 3,630,713 3,850,953

LIABILITIES
Accounts payable and accrued expenses 1,068,648 579,865 1,648,513 Accrued interest - 25,911 25,911
Deposits 366,735 - 366,735
Noncurrent liabilities
Due within one year 173,016 306,515 479,531
Due in more than one year 671,202 4,376,457 5,047,659
Compensated absences 544,169 - 544,169
Lease liability 42,474 41,003 83,477
Net pension liability 129,495 7,547,191 7,676,686
Total liabilities 5,459,246 10,413,435 15,872,681
DEFERRED INFLOW OF RESOURCES 10,640 622,067 632,707

NET POSITION
Net investment in capital assets 13,801,412 9,503,628 23,305,040 Restricted for debt service - 4,031 4,031
Restricted for capital projects 6,706,731 - 6,706,731
Restricted for long-term notes receivable 3,000,000 - 3,000,000 Restricted for specific projects and programs 452,422 - 452,422 Unrestricted (deficit) 8,003,651 (1,189,399) 6,814,252
Total net position $ 17,511,310 22,771,166 $ 40,282,476 $ See accompanying notes. 5
CITY OF KING CITY STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2023 Operating Capital
Charges for Grants and Grants and Governmental Business-Type Expense Services Contributions Contributions Activities Activities Total Primary Government
Governmental activities
General government $ 303,897 1,215,929 $ 1,778,714 $ 298,564 $ 1,165,246 $ - $ 1,165,246 $ Public safety 5,636,911 132,379 456,085 - (5,048,447) - (5,048,447) Public works 3,537,711 19,895 913,945 51,141 (2,552,730) - (2,552,730) Culture and recreation 946,664 242,986 1,434 - (702,244) - (702,244) Community development 3,134,201 230,943 2,007,209 - (896,049) - (896,049) Debt service
Interest expense - 29,444 - - (29,444) - (29,444)
Total governmental activities 930,100 14,500,850 5,157,387 349,705 (8,063,658) - (8,063,658) Business-type activities
Sewer 1,817,610 3,755,694 - - - 1,938,084 1,938,084
Power 4,405,555 4,435,369 - - - (29,814) (29,814)
Total business-type activities 8,161,249 6,252,979 - - - 1,908,270 1,908,270 Total primary government $ 9,091,349 20,753,829 $ 5,157,387 $ 349,705 $ (8,063,658) 1,908,270 (6,155,388) General Revenue
Property taxes - 1,285,402 1,285,402
Franchise taxes - 1,494,870 1,494,870Sales taxes - 4,956,183 4,956,183Transient occupancy taxes - 592,455 592,455Utility users tax - 446,268 446,268Business licenses - 295,883 295,883Motor vehicle in-lieu - 1,207,801 1,207,801Investment income 234,423 300,235 534,658Gain on sale of property - 151,250 151,250Other revenues 100 117,386 117,486Transfers (210,000) 210,000 - Total general revenue and transfers 24,523 11,057,733 11,082,256 Change in Net Position 1,932,793 2,994,075 4,926,868
Net Position
Beginning of year 15,578,517 19,777,091 35,355,608
End of year $ 17,511,310 22,771,166 $ 40,282,476 $
Program Revenue Primary Government
Net Revenue/(Expense) and Changes in Net Position
Functions/Programs
See accompanying notes. 6
CITY OF KING CITY BALANCE SHEET – GOVERNMENTAL FUNDS JUNE 30, 2023 American Other Total
Rescue Plan CDBG Development Governmental Governmental
General Act HOME Grant Grant Impact Fees Measure X Funds Funds ASSETS
Cash and investments 1,984,171 $ 2,393,493 $ - $ - 2,045,910 $ 621,959 $ 1,118,313 $ 8,163,846 $ Accounts receivable 103,357 - - - - - 614,812 718,169
Due from other governments 983,197 - - 981,922 - 147,400 570,041 2,682,560 Interest receivable 7,754 9,589 930,000 1,728 8,028 2,411 6,240 965,750 Due from other funds 936,605 - - - - - - 936,605
Notes receivable - - 3,000,000 - - - - 3,000,000
Total assets $ 2,403,082 4,015,084 $ 3,930,000 $ 983,650 $ 2,053,938 $ 771,770 $ 2,309,406 $ 16,466,930 $

LIABILITIES, DEFERRED INFLOWS OF RESOURCES,
AND FUND BALANCEAccounts payable and accrued expense 481,734 $ 13,873 $ - $ 46,866 $ 46,065 $ 30,225 $ 449,885 $ 1,068,648 $ Deposits 366,735 - - - - - - 366,735
Due to other funds - - - 170,985 - - 765,620 936,605
Total liabilities 13,873 848,469 - 217,851 46,065 30,225 1,215,505 2,371,988 Deferred inflows of resources
Deferred loans - - 3,930,000 - - - - 3,930,000
Total deferred inflows of resources - - 3,930,000 - - - - 3,930,000

FUND BALANCE
Restricted
Circulation improvements - - - - - - 718,845 718,845
Capital improvement projects - 2,389,209 - 765,799 2,007,873 741,545 83,460 5,987,886 Public safety - - - - - - 432,202 432,202
Unassigned - 3,166,615 - - - - (160,826) 3,005,789
Total fund balance 3,166,615 2,389,209 - 765,799 2,007,873 741,545 1,093,901 10,164,942 Total liabilities, deferred inflows of
resources, and fund balance $ 2,403,082 4,015,084 $ 3,930,000 $ 983,650 $ 2,053,938 $ 771,770 $ 2,309,406 $ 16,466,930 $ See accompanying notes. 7

CITY OF KING CITY

RECONCILIATION OF TOTAL GOVERNMENTAL FUND BALANCE TO NET POSITION

OF GOVERNMENTAL ACTIVITIES
JUNE 30, 2023
Total governmental fund balances $ 10,164,942
Amounts reported for governmental activities in the statement of net position are different because:

Capital assets used in Governmental Activities are not financial resources and, therefore, are not reported in the governmental funds 14,645,630 Certain revenues in Governmental Funds are deferred because they are not collected within the prescribed time period after fiscal year end.

Those revenues are recognized on the accrual basis in Governmental Activities 3,930,000
Net pension liability applicable to Governmental Activities are not due and payable in the current period and accordingly is not reportable in the Governmental Funds (7,547,191)
Deferred inflows/outflows of resources related to net pension liability, represent an acquisition/consumption of net position or fund balance that applies to future period(s) and so will not be recognized as an inflow/outflow of resources (revenue/expenditure) until that time 3,008,646
Governmental long-term liabilities are not due and payable in the current period and, therefore, are not reported in the funds (886,692) Compensated absences are not due and payable in the current period and, therefore, are not reported in the Governmental Funds (544,169) Net position of governmental activities $ 22,771,166
See accompanying notes. 8
CITY OF KING CITY STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE – GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2023 American Other Total
Rescue Plan CDBG Development Governmental Governmental
General Act HOME Grant Grant Impact Fees Measure X Funds Funds Revenue
Taxes 8,289,898 $ - $ - $ - $ - $ 567,199 $ 795,891 $ 9,652,988 $ Intergovernmental 314,762 1,683,759 - 1,831,363 - - 1,426,237 5,256,121 Charges for services 71,007 - - - 21,862 - 117,355 210,224 Licenses, permits and impact fees 1,245,749 - - - 329,493 - - 1,575,242 Fines and forfeitures 25,354 - - - - - - 25,354
Interest and rent 86,579 62,113 - 8,491 46,884 11,913 31,499 247,479 Other - 230,778 - - - - - 230,778
Total revenue 1,745,872 10,264,127 - 1,839,854 398,239 579,112 2,370,982 17,198,186 Expenditures
Current
General government 1,082,390 413,576 - - - - - 1,495,966 Public safety 5,235,122 - - - - - 115,619 5,350,741
Public works 1,180,345 - - - 73,445 480,583 1,328,284 3,062,657 Culture and recreation 897,536 - - - 6,002 - - 903,538
Community development 1,678,616 - - 1,317,224 26,859 - 171,686 3,194,385 Capital outlay 1,138,510 257,108 - - 177,096 - 122,617 1,695,331 Debt Service
Principal 81,027 - - - - - 80,517 161,544
Interest and fiscal charges - 20,460 - - - - 8,984 29,444 Total expenditures 670,684 11,314,006 - 1,317,224 283,402 480,583 1,827,707 15,893,606 Revenue over/(under) expenditures (1,049,879) 1,075,188 - 522,630 114,837 98,529 543,275 1,304,580 Other Financing Sources/(Uses)
Capital lease proceeds 26,953 - - - - - 26,953
Transfers in/(out) - net - 490,053 - 50,000 - - (330,053) 210,000 Total other financing sources/(uses) - 517,006 - 50,000 - - (330,053) 236,953 Change in Fund Balance 1,075,188 (532,873) - 572,630 114,837 98,529 213,222 1,541,533 Fund Balance
Beginning of year 1,314,021 3,699,488 - 193,169 1,893,036 643,016 880,679 8,623,409 End of year $ 2,389,209 3,166,615 $ - $ 765,799 $ 2,007,873 $ 741,545 $ 1,093,901 $ 10,164,942 $ See accompanying notes. 9

CITY OF KING CITY

RECONCILIATION OF STATEMENT OF REVENUE, EXPENDITURES, AND CHANGES IN

FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2023
Net change in fund balance - total governmental funds $ 1,541,533 Amounts reported for governmental activities in the statement of activities are different because:

Repayment of long-term debt and lease liabilities is an expenditure in the Governmental Funds, but the repayment reduces long-term liabilities in the Statement of Net Position 157,950 Revenues in the statement of activities that do no provide current financial resources are not reported as revenues in the funds 90,000
Governmental Funds report capital outlay as expenditures. However, in the Statement of Activities the cost of those assets are capitalized as an asset and depreciated over the period of service 1,695,331 Pension expenses reported in the Statement of Activities do not require the use of current financial resources and, therefore, are not reported as expenditures in the Governmental Funds 660,196
Compensated absence costs in the Statement of Activities does not require the use of current financial resources and, therefore, is not reported as expenditures in Governmental Funds (145,618) Depreciation and amortization expense on capital assets is reported in the Statement of Activities, but they do not require the use of current financial resources. Therefore, depreciation expense is not recorded as expenditures in Governmental Funds (1,005,317)
Change in net position of governmental activities $ 2,994,075 See accompanying notes. 10

CITY OF KING CITY
STATEMENT OF NET POSITION – PROPRIETARY FUND
JUNE 30, 2023
Sewer Community Power Total
ASSETS
Current assets
Cash and investments 7,938,687 $ 360,126 $ 8,298,813 $
Restricted cash and investments 4,031 - 4,031
Accounts receivable 238,129 - 238,129
Interest receivable - 33,383 33,383
Total current assets 360,126 8,214,230 8,574,356
Non-current assets
Property, plant and equipment
(net of allowance for depreciation and amortization) - 14,186,600 14,186,600 Total noncurrent assets - 14,186,600 14,186,600
Total assets 360,126 22,400,830 22,760,956
DEFERRED OUTFLOW OF RESOURCES - 220,240 220,240

LIABILITIES
Current liabilities
Accounts payable and accrued expense 205,017 374,848 579,865 Accrued interest 25,911 - 25,911
Current portion of long-term debt - 306,515 306,515
Total current liabilities 374,848 537,443 912,291
Noncurrent Liabilities
Long-term debt 4,376,457 - 4,376,457
Lease liability 41,003 - 41,003
Net pension liability - 129,495 129,495
Total liabilities 374,848 5,084,398 5,459,246
DEFERRED INFLOW OF RESOURCES - 10,640 10,640

NET POSITION
Net investment in capital assets 9,503,628 - 9,503,628
Restricted for debt service 4,031 - 4,031
Unrestricted (14,722) 8,018,373 8,003,651
Total net position $ (14,722) 17,526,032 $ 17,511,310 $ Business-Type Activities - Enterprise Fund
See accompanying notes. 11

CITY OF KING CITY
STATEMENT OF REVENUE, EXPENSE, AND CHANGES IN FUND NET POSITION –

PROPRIETARY FUND
YEAR ENDED JUNE 30, 2023
Sewer Community Power Total
Operating Revenue
Charges for services $ 4,405,555 3,755,694 $ 8,161,249 $ Total operating revenue 4,405,555 3,755,694 8,161,249
Operating Expense
Contractual services and utilities 468,251 4,385,936 4,854,187 Personnel 311,991 - 311,991
Supplies and materials 562,086 - 562,086
Depreciation and amortization - 343,994 343,994
Total operating expense 4,385,936 1,686,322 6,072,258
Operating income/(loss) 19,619 2,069,372 2,088,991
Nonoperating Revenue/(Expense)
Interest income 234,423 - 234,423
Other income 100 - 100
Interest expense (49,433) (131,288) (180,721)
Total nonoperating revenue/(expense) (49,433) 103,235 53,802 Net income/(loss) before transfers 2,172,607 (29,814) 2,142,793 Operating Transfers In/(Out) - (210,000) (210,000)
Change in Net Position (29,814) 1,962,607 1,932,793
Net Position
Beginning of year 15,092 15,563,425 15,578,517
End of year $ (14,722) 17,526,032 $ 17,511,310 $
Business-Type Activities - Enterprise Fund
See accompanying notes. 12

CITY OF KING CITY

STATEMENT OF CASH FLOW - PROPRIETARY FUND
YEAR ENDED JUNE 30, 2023
Sewer Community Power Total
Operating Activities
Receipts from customers and users 3,782,409 $ 4,405,555 $ 8,187,964 $ Payments for contractual services and utilities (343,507) (4,054,618) (4,398,125) Payments to employees (321,396) - (321,396)
Payments to suppliers - (562,086) (562,086)
Net cash provided by (used in)
operating activities 350,937 2,555,420 2,906,357
Non-capital Financial Activities
Cash received from (paid to) other funds - (210,000) (210,000) Net cash provided by (used in)
noncapital financing activities - (210,000) (210,000)
Capital and Related Financing Activities
Purchase of property, plant, and equipment (5,416,790) - (5,416,790) Principal paid on long-term debt and lease liabilities (307,760) - (307,760) Interest paid on long-term debt (49,433) (132,727) (182,160) Net cash provided by (used in)
capital and related financing activities (49,433) (5,857,277) (5,906,710) Investing Activities
Interest received - 203,902 203,902
Net cash provided by (used in)
investing activities - 203,902 203,902
Net Increase/(Decrease) in Cash 301,504 (3,307,955) (3,006,451) Cash
Beginning of year 58,622 11,250,673 11,309,295
End of year $ 360,126 7,942,718 $ 8,302,844 $
Business-Type Activities - Enterprise Fund
See accompanying notes. 13

CITY OF KING CITY

STATEMENT OF CASH FLOW - PROPRIETARY FUND (CONTINUED)
YEAR ENDED JUNE 30, 2023
Sewer Community Power Total
Reconciliation of Cash to Financial Statements
Cash and investments 7,938,687 $ 360,126 $ 8,298,813 $
Restricted cash and investments - 4,031 4,031
Total cash and investments $ 360,126 7,942,718 $ 8,302,844 $ Cash Flows from Operating Activities
Operating income (loss) 2,069,372 $ 19,619 $ 2,088,991 $ Adjustments to reconcile operating income (loss)
to net cash provided (used) by operating activities:

Depreciation and amortization 343,994 - 343,994
(Increase) Decrease in Deferred Outflow of Resources (25,044) - (25,044) (Increase) Decrease in Accounts Receivable 26,715 - 26,715 Increase (Decrease) in Deferred Inflows of Resources (51,626) - (51,626) Increase (Decrease) in Net Pension Liability 67,265 - 67,265 Increase (Decrease) in Accounts Payable
and Accrued Expense 331,318 124,744 456,062
Net Cash Provided by/(Used in) Operating Activities $ 350,937 2,555,420 $ 2,906,357 $ Business-Type Activities - Enterprise Fund
See accompanying notes. 14

CITY OF KING CITY

STATEMENT OF FIDUCIARY NET POSITION
PRIVATE-PURPOSE TRUST FUND – SUCCESSOR AGENCY
JUNE 30, 2023
Assets
Cash and investments
Cash and investments 1,093,382 $
Cash and investments with fiscal agent 576,876
Interest Receivable 3,239
Total assets 1,673,497
Liabilities
Interest payable 74,658
Long-term debt
Due within one year 860,389
Due in more than one year 4,555,528
Total liabilities 5,490,575
Net Position
Held in trust for other governments (3,817,078) $
See accompanying notes. 15

CITY OF KING CITY

STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
PRIVATE-PURPOSE TRUST FUND – SUCCESSOR AGENCY
JUNE 30, 2023
Additions
Property taxes 1,641,563 $
Investment earnings and other 34,772
Total additions 1,676,335
Deductions
Administrative costs 396,961
Interest and fiscal agency expenses of former redevelopment agency 188,687 Total deductions 585,648
Change In Net Position 1,090,687
Net Position
Beginning of year (4,907,765)
End of year $ (3,817,078)
16 CITY OF KING CITY

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 1 – Summary of Significant Accounting Policies
The financial statements of the City of King City (the City) have been prepared in conformity with Accounting Principles Generally Accepted in the United States of America (GAAP) as applicable to governmental entities. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles.

Reporting Entity
The City of King City, State of California (the "City"), was incorporated as a general law city in 1911. In June 2010, the voters of the City approved a Charter, which gives the City Council greater self-rule. The City is governed by a City Council of five members. The City's major operations include public safety; highways and streets; sewer services; parks and recreation; building inspection; public improvements; planning and zoning, and general administrative services.

Basis of Presentation – Fund Accounting
Government-Wide Financial Statements - The Government-Wide Financial Statements (the Statement of Net Position and the Statement of Activities) report information of all of the nonfiduciary activities of the primary government and its component units. For the most part, eliminations have been made to minimize the double counting of internal activities. These statements distinguish between the governmental and business-type activities of the City and between the City and its discretely presented component unit. Governmental activities, which normally are supported by taxes and inter-governmental revenues, are reported separately from business-type activities, which rely significantly on fees charged to external parties.

The Statement of Activities presents a comparison between direct expenses and program revenues for each segment of the business-type activities of the City and for each function of the City’s governmental activities. Direct expenses are those that are specifically associated with a program or function and are clearly identifiable to a particular function. Program revenues include 1) charges paid by the recipients of goods or services offered by the programs and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.

Net position are restricted when constraints placed on them are either externally imposed or are imposed by constitutional provisions or enabling legislation. Internally imposed designations of resources are not presented as restricted net position. When both restricted and unrestricted resources are available for use, generally, it is the City’s policy to use restricted resources first, then unrestricted resources as they are needed.

Governmental Fund Financial Statements - The Governmental Fund Financial Statements provide information about the City’s funds, including fiduciary funds. Separate statements for each fund category - governmental, proprietary and fiduciary - are presented. The emphasis of fund financial statements is on major governmental and enterprise funds, each displayed in a separate column. All remaining governmental funds are separately aggregated and reported as non-major funds. 17 CITY OF KING CITY

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 1 – Summary of Significant Accounting Policies (Continued) Proprietary fund operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially equal values. Non-operating revenues, such as subsidies and investment earnings, result from non-exchange transactions or ancillary activities.

The City reports the following major governmental funds:
 General Fund – The General Fund is the general operating fund of the City. It is used for all financial resources except those required legally, or by sound financial management to be accounted for in another fund. Generally, the General Fund is used to account for those traditional governmental services of the City, such as police and fire protection, planning and general administrative services.  American Rescue Plan Act – This fund is used to account for American Rescue Plan Act funding received from the State.
 HOME Grant Fund – The fund is used to account for receipts and expenditures for the Home Investment Partnerships Program for the City to fund a wide range of activities including building, buying, and/or rehabilitating affordable housing for rent or homeownership or providing direct rental assistance to low-income people.
 CDBG Grant Fund – The fund is used to account for receipts and expenditures for the Community Block Grant Program for the City to fund a wide range of activities including building, buying, and/or rehabilitating affordable housing for rent or homeownership or providing direct rental assistance to low-income people.
 Development Impact Fees Fund – The fund is used to account for mitigation fees received from new construction which are to be used according to the City’s approved Master Facilities Plan.  Measure X Fund – The fund is used to account for the City’s Transportation Safety and Investment Plan activities, which include transportation safety and mobility projects such as the Bishop Street project and the slurry application project.

The City reports the following major proprietary fund:
 Sewer Fund – The fund accounts for the maintenance, operation and capital improvements of the municipal sewage system. Financing is provided by user fees from residences, businesses, and industries.
 Community Power Fund – The fund provides electricity and special programs with the common goal of utilizing cleaner energy and lower rates to the City.

The City reports the following additional fund types:
 Private-Purpose Trust Fund – The Private-Purpose Trust Fund accounts for assets held by the City as trustee for the Successor Agency.
18 CITY OF KING CITY

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 1 – Summary of Significant Accounting Policies (Continued) Basis of Accounting
The Government-Wide and Proprietary Fund Financial Statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Nonexchange transactions, in which the City gives (or receives) value without directly receiving (or giving) equal value in exchange, include property and sales taxes, grants, entitlements and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenues from sales tax are recognized when the underlying transactions take place.

Revenues from grants, entitlements and donations are recognized in the fiscal year in which all eligible requirements have been satisfied.

Governmental Funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. Property and sales taxes, interest, certain state and federal grants and charges for services are accrued when their receipt occurs within sixty days after the end of the accounting period so as to be both measurable and available. Expenditures are generally recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments are recorded only when payment is due. General capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term debt and capital leases are reported as other financing sources.

Proprietary Funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a Proprietary Fund’s principal ongoing operations. Revenues and expenses not meeting this definition are reported as non-operating.

Financial Statement Amounts
Cash and Investments – Cash and investments represent the City's cash bank accounts including but not limited to certificates of deposit, money market funds and cash management pools for reporting purposes in the Statement of Cash Flows.

The City maintains a cash and investment pool that is available for use by all funds, except for assets held by fiscal agents. Interest earnings as a result of this pooling are distributed to the appropriate funds based on month end cash balances in each fund.

Investments of the pool include only those investments authorized by the California Government Code such as, United States Treasury securities, agencies guaranteed by the United States Government, registered state warrants, and other investments. Investments primarily consist of deposits in the State of California Local Agency Investment Fund and certificates of deposit. Investments are recorded at amortized cost or fair value. Fair value is based upon quoted market prices.

Accounts Receivable – Billed but unpaid services provided to individuals or non-governmental entities are recorded as accounts receivable. The Proprietary Funds include a year end accrual for services through June 30, 2023, which have not yet been billed. Accounts receivable are reported net of an allowance for uncollectibles.
19 CITY OF KING CITY

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 1 – Summary of Significant Accounting Policies (Continued) Monterey County is responsible for the assessment, collection and apportionment of property taxes for all taxing jurisdictions. Property taxes are levied in equal installments on November 1 and February 1. They become delinquent on December 10 and April 10, respectively. The lien date is March 1 of each year.

Property taxes are accounted for in the General Fund. Property tax revenues are recognized when they become measurable and available to finance current liabilities. The City considers property taxes as available if they are collected within 60 days after year end. Property tax on the unsecured roll are due on the March 1 lien date and become delinquent if unpaid on August 31. However, unsecured property taxes are not susceptible to year end accrual.

The City is permitted by Article XIIIA of the State of California Constitution (known as Proposition 13) to levy a maximum tax of $1.00 per $100 of full cash value.

Interfund Receivables/Payables – Items classified as interfund receivable/payable represent short-term lending/borrowing transactions between funds. This classification also includes the current portion of an advance to or from another fund.

Advances To/From Other Funds – This classification represents non-current portions of any long-term lending/borrowing transactions between funds. This amount will be equally offset by a reserve of fund balance which indicates that it does not represent available financial resources and therefore, is not available for appropriation. The current portion of any interfund long-term loan (advance) is included as an interfund receivable/payable.

Restricted Assets – Certain proceeds of the King City Public Financing Authority’s Certificates of Participation, as well as certain resources set aside for their repayment, are classified as restricted assets on the Statement of Net Position because they are maintained in separate bank accounts and their use is limited by debt covenants.

Capital Assets – Capital outlays are recorded as expenditures of the General, Special Revenue, and Capital Projects Funds and as assets in the Government-Wide Financial Statements to the extent the City’s capitalization threshold are met.

Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business-type activities columns in the Government-Wide Financial Statements. Capital assets are defined by the government as assets with an initial, individual cost of more than $5,000 (amount not rounded) and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation.

The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Betterments and major improvements which significantly increase values, change capacities or extend useful lives are capitalized. Upon sale or retirement of fixed assets, the cost and related accumulated depreciation are removed from the respective accounts and any resulting gain or loss is included in the results of operations.
20 CITY OF KING CITY

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 1 – Summary of Significant Accounting Policies (Continued) Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed.

Property, plant, and equipment of the primary government, as well as the component units, are depreciated using the straight line method over the following estimated useful lives:

Years
Infrastructure 20 - 50
Structures and Improvements 10 - 50
Equipment 5 - 30
Compensated Absences – Vacation time may be accumulated up to two years entitlement plus the current years’ leave allowance. Cash compensation for accrued vacations is generally not payable until the employee terminates employment with the City. Cash compensation for unused sick leave is payable to an employee only upon termination of employment with the City. At that time, the employee is compensated at the rate of 50% of their daily rate.

All accumulated vacation leave and applicable sick leave is accrued when incurred in the governmentwide and proprietary fund financial statements. A liability for these amounts is reported in governmental funds only if they have matured; for example, as a result of employee resignations and retirements. Leave benefits are generally liquidated by the general fund.

Leases – The City is a lessee for a noncancellable lease of equipment. The City recognizes a lease liability and an intangible right-to-use lease asset (lease asset) in the government-wide and enterprise fund financial statements. The City recognizes lease liabilities with an initial, individual value of $5,000 or more.

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

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

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

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 1 – Summary of Significant Accounting Policies (Continued) Long-Term Obligations – In the Government-Wide Financial Statements, and Proprietary Fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or Proprietary Fund Type Statement of Net Position. Debt principal payments of both government and business-type activities are reported as decreases in the balance of the liability on the Statement of Net Position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount.

In the fund financial statements, however, debt principal payments of Governmental Funds are recognized as expenditures when paid. Governmental Fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.

Pension – For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the City’s California Public Employee Retirement System (CalPERS) plan and additions to/deduction from the Plan’s fiduciary net position have been determined on the same basis as they are reported by CalPERS.

For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.

Non-Current Governmental Assets/Liabilities – GASB Statement No. 34 eliminates the presentation of account groups, but provides for these records to be maintained and incorporates the information into the Governmental Activities column in the Government-Wide Statement of Net Position.

Net Position – The government-wide and business-type activities fund financial statements utilize a net position presentation. Net position are categorized as net investment in capital assets, restricted and unrestricted.
 Net Investment in Capital Assets - This category groups all capital assets, including infrastructure, into one component of net position. Accumulated depreciation and the outstanding balances of debt that are attributable to the acquisition, construction or improvement of these assets reduce the balance in this category.
 Restricted Net Position - This category presents external restrictions on net position imposed by creditors, grantors, contributors or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabling legislation.  Unrestricted Net Position - This category represents net position of the City, not restricted for any project or other purpose.
22 CITY OF KING CITY

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 1 – Summary of Significant Accounting Policies (Continued) Fund Balance – In the fund financial statements, governmental fund balance is made up of the following components:
 Nonspendable fund balance typically includes inventories, prepaid items, and other items that must be maintained intact pursuant to legal or contractual requirements, such as endowments.  Restricted fund balance category includes amounts that can be spent only for specific purposes imposed by creditors, grantors, contributors, or laws or regulations of other governments or through enabling legislations.
 Committed fund balance classification includes amounts that can be used only for the specific purposes determined by a formal action of the City Council. The City Council has the authority to establish, modify, or rescind a fund balance commitment.  Assigned fund balance are amounts designated by the City Council for specific purposes and do not meet the criteria to be classified as restricted or committed.  Unassigned fund balance is the residual classification that includes all spendable amounts in the General Fund not contained in other classifications.

When expenditures are incurred for purposes for which both restricted and unrestricted (committed, assigned, or unassigned) fund balances are available, the City’s policy is to apply restricted first. When expenditures are incurred for purposes for which committed, assigned, or unassigned fund balances are available, the City’s policy is to apply committed fund balance first, then assigned fund balance, and finally unassigned fund balance.

Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures/expenses during the reporting period. Actual results could differ from those estimates. 23 CITY OF KING CITY

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 2 – Stewardship, Compliance and Accountability
California law authorizes the City to invest in obligations of the United States Treasury, agencies and instrumentalities, certificates of deposit of time deposits in banks and savings and loan associations which are insured by the Federal Deposit Insurance Corporation.

In accordance with applicable sections of the California Government Code and the King City Municipal Code, the City prepares and legally adopts an annual balanced budget on a basis consistent with accounting principles generally accepted in the United States of America. Annual appropriated budgets are adopted for the General Fund, specific Special Revenue Funds, and specific Capital Projects Funds.

Budget plans are adopted for Proprietary Funds. A proposed budget is presented to the City Council during June of each year for review. The Council holds public hearings and may add to, subtract from, or change appropriations within the revenues and reserves estimated as available. Expenditures may not legally exceed budgeted appropriations at the fund level. Supplementary appropriations which alter the total expenditures of any fund, or expenditures in excess of total budgeted fund appropriations, must be approved by the City Council. All annual appropriations lapse at fiscal year end to the extent they have not been expended or encumbered.

Note 3 – Cash and Investments
The City pools all of its cash and investments except those funds required to be held by outside fiscal agents under the provisions of bond indentures. Interest income earned on pooled cash is allocated to the various funds on average cash balances. Interest income from cash investments held with fiscal agents is credited directly to the related funds.

Cash and investments as of June 30, 2023 are classified in the accompanying financial statements as follows:

Statement of Net Position:

Cash and Investments 16,462,659 $
Restricted Cash and Investments 4,031
Fiduciary Funds:

Cash and Investments 1,093,382
Cash and Investments with fiscal agent 576,876
Total Cash and Investments $ 18,136,948
Cash and investments as of June 30, 2023 consist of the following:

Cash on hand $ 905
Deposits with Financial Institutions 15,084,322
Local Agency Investment Fund 2,470,813
Held by Fiscal Agent:

US Government Issues 580,908
Total Cash and Investments $ 18,136,948
24 CITY OF KING CITY

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 3 – Cash and Investments (Continued)
Fair Value Measurements
The framework for measuring fair value provides a fair value hierarchy that categorizes the inputs to valuation techniques used to measure fair value into three levels. The fair value hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described as follows:

Level 1: Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets that a government can access at the measurement date.

Level 2: Inputs to valuation methodology include inputs – other than quoted prices included within Level 1 – that are observable for an asset or liability, either directly or indirectly.

Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The asset’s or liability’s fair value measurement level within a fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. 25 CITY OF KING CITY

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 3 – Cash and Investments (Continued)
Following is a description of the valuation methodologies used for assets measured at fair value.

LAIF is valued based on the City’s pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (Level 2 input).

The City had the following recurring fair value measurements as of June 30, 2023:

Level 1 Level 2 Level 3
June 30, 2023
Balance
Investments by fair value level:

Debt Securities:

U.S. Treasury Obligations - $ $ 580,908 $ - $ 580,908
Total Debt Securities - 580,908 - 580,908
Equity Securities:

LAIF - 2,470,813 - 2,470,813
Total Equity Securities - 2,470,813 - 2,470,813
Cash and cash equivalents carried at amortized cost:

Deposits 15,085,227
Total Investments amortized at cost 15,085,227
Total Cash and Investments 18,136,948 $
Investments Authorized by the California Government Code and the City’s Investment Policy The table below identifies the investment types that are authorized for the City by the California Government Code (or the City’s investment policy, where more restrictive). The table also identifies certain provisions of the California Government Code (or the City’s investment policy, where more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustee that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City’s investment policy.
26 CITY OF KING CITY

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 3 – Cash and Investments (Continued)
Minimum Maximum
Maximum Credit Percentage
Maturity Quality Allowed
U.S. Treasury Obligations None None None
U.S. Agency Securities None AAA None
Banker's Acceptances 1 year None None
Commercial Paper None A-1 None
Money Market Mutual Funds None A None
Investment Contracts None None None
Certificates of Deposits 1 year A-1 None
Repurchase Agreements 30 days None None
Local Agency Investment Fund (LAIF) N/A None None
Municipal Bonds None None None
Authorized Investment Type
Investments Authorized by Debt Agreements
Investments of debt proceeds held by bond trustee are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the City’s investment policy.

The table below identifies the investment types that are authorized for investments held by the bond trustee. The table also identifies certain provisions of these debt agreements that address interest rate risk, credit risk, and concentration of credit risk.

Minimum Maximum
Maximum Percentage Percentage
Maturity of Portfolio of Portfolio
Local Agency Bonds 1 year None None
U.S. Treasury Obligations 1 year A None
U.S. Agency Securities 1 year None None
Banker's Acceptances 180 days None 40%
Commercial Paper 270 days None 25%
Negotiable Certificates of Deposit 1 year None 30%
Repurchase Agreements 90 days None None
Reverse Repurchase Agreements 92 days None 20% of base value Medium-Term Notes 5 years A 30%
Mutual Funds N/A A 20%
Money Market Mutual Funds N/A A 20%
Mortgage Pass-Through Securities 5 years AA 20%
Authorized Investment Type
27 CITY OF KING CITY

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 3 – Cash and Investments (Continued)
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. As of June 30, 2023 the City had the following investments:
12 Months 13 to 24 25 to 84
or less Months Months Total
LAIF 2,470,813 $ - $ - $ 2,470,813 $
US Government Issues - 580,908 - 580,908
Total Investments $ - 3,051,721 $ - $ 3,051,721
Cash in bank and on hand 15,085,227
Total Cash and Investments $ 18,136,948
Investment Type
Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by (where applicable) the California Government Code, the City’s investment policy, or debt agreements, and the actual rating as of year-end for each investment type.

Not rated:

LAIF $ 2,470,813
US Government Issues 580,908
Cash in bank and on hand 15,085,227
Total Cash and Investments $ 18,136,948
Concentration of Credit Risk
The investment policy of the City contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. There are 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 investments.
28 CITY OF KING CITY

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 3 – Cash and Investments (Continued)
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 (such as LAIF).

GASB Statement No. 40 requires that the following disclosures be made with respect to custodial credit risks relating to deposits and investments: The City did not have any deposits with financial institutions in excess of federal depository insurance limits and held in uncollateralized accounts. As of June 30, 2023, the City investments in the following investment types were held by the broker-dealer that was used by the City to buy the securities:

Reported Amount
US Government Issues 580,908 $
Investment Type
Investment in State Investment Pool
The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by the California Government Code under the oversight of the Treasurer of the State of California. The fair value of the City’s investment in this pool is reported in the accompanying financial statements at amounts based upon the City’s pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. 29 CITY OF KING CITY

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 4 – Interfund Receivables and Payables, and Transfers Interfund Receivables and Payables
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, and carry an interest rate equal to the rate earned on pooled cash.

Individual fund interfund receivables and payables balances as of June 30, 2023 are as follows:

Due From Due To
General Fund 936,605 $ - $
CDBG Grant - 170,985
CDBG Pro Youth - 322,081
SB 1 Multimodal Grant - 7,114
SB 2 Planning Land Use Element Grant - 56,689
LEAP Grant - 9,401
Gas Tax - 74,113
Prop 68 Grant - 176,247
FEMA Storm Event Grant - 119,975
$ 936,605 936,605 $
The interfund payable balance due to the General Fund, CDBG Grants, CDBG Pro Youth, SB 2 Planning Land Use Element Grant, Transportation, Gas Tax, SB 1 Multimodal Grant, LEAP Grant, FEMA Storm Event Grant, and Prop 68 Grant is a result of deficits in certain funds and temporary cash flow assistance in others. The balances due will be repaid as funds are available.

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 government-wide financial statements.

Transfers In Transfers Out
Major Governmental Funds:

General Fund 212,635 $ - $
Enterprise Funds:

Sewer Fund - (200,000)
Nonmajor Governmental Funds:

SB 2 Planning Land Use Element Grant 12,080 -
Gas Tax Fund 150,000 -
SB1 Multimodal Grant Fund 199,166 -
Prop 1B - (12,080)
UUT-Public Safety Fund (361,801) -
$ (573,881) 573,881 $
30 CITY OF KING CITY

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 653,060 $ - $ - $ 653,060 $
Construction in progress - - - -
Total capital assets, not being depreciated - 653,060 - 653,060 Capital assets, being depreciated
Buildings and improvements 10,095,608 202,483 - 10,298,091 Infrastructure 18,058,320 1,492,848 - 19,551,168
Machinery and equipment - 4,418,933 (36,500) 4,382,433
Total capital assets, being depreciated 1,695,331 32,572,861 (36,500) 34,231,692 Less accumulated depreciation for:

Buildings and improvements (7,508,433) (229,192) - (7,737,625) Infrastructure (8,587,248) (535,940) - (9,123,188)
Machinery and equipment (186,186) (3,325,322) 33,212 (3,478,296) Total accumulated depreciation (951,318) (19,421,003) 33,212 (20,339,109) Total capital assets, being depreciated, net 744,013 13,151,858 (3,288) 13,892,583 Right of use assets, being amortized
Vehicles 269,960 26,950 - 296,910
Less: accumulated amortization (57,592) (139,331) - (196,923) Total right of use assets, net of amortization (30,642) 130,629 - 99,987 Governmental activities capital assets, net $ 713,371 13,935,547 $ (3,288) $ 14,645,630 $ Business-Type Activities
Capital assets, not being depreciated
Land $ - 764,093 $ - $ 764,093 $
Total capital assets, not being depreciated - 764,093 - 764,093 Capital assets, being depreciated
Building and improvements 14,027,574 5,416,790 - 19,444,364 Plant and equipment - 1,574,179 - 1,574,179
Total capital assets, being depreciated 5,416,790 15,601,753 - 21,018,543 Less: accumulated depreciation (328,604) (7,305,908) - (7,634,512) Total capital assets, being depreciated, net 5,088,186 8,295,845 - 13,384,031 Right of use assets, being amortized
Vehicles 76,951 - - 76,951
Accumulated amortization (15,390) (23,085) - (38,475)
Total right of use assets, net of amortization (15,390) 53,866 - 38,476 Business-type activities capital assets, net $ 5,072,796 9,113,804 $ - $ 14,186,600 $ 31 CITY OF KING CITY

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 5 – Capital Assets (Continued)
Depreciation and amortization expense was charged to the following functions in the Statement of Activities:

Governmental Functions:

General Government 53,230 $
Public Safety 292,734
Public Works 535,138
Culture and Recreation 127,808
$ 1,008,910
Business-Type Functions:

Sewer $ 343,994
Note 6 – Notes Receivables
Notes receivable and deferred loans consisted of the following at June 30, 2023:

King City Pacific Associates, L.P. - The HOME Investment Partnership Grant program approved $3,000,000 of grant funds to be made available for local development of an affordable housing project.

The City entered into an agreement with King City Pacific Associates, L.P. to loan such funds for the construction of the San Antonio Apartments. Funds were provided in the form of a deferred payment loan.

If not paid sooner, the unpaid principal balance of this note, plus any unpaid interest thereon shall be due and payable in full fifty-five years from the date of the note. The note bears 3% interest and the face amount of the note at June 30, 2023 was $3,000,000. Accrued interest receivable at June 30, 2023 was $930,000.

Note 7 – 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. The City’s debt transactions are summarized below and discussed in detail thereafter:

Balance Balance Current
July 1, 2022 Additions Retirements June 30, 2023 Portion Governmental Activities Long Term Debt
Direct Borrowings:
2019 Street Sweeper Financed Purchase 123,606 $ - $ (33,223) $ 90,383 $ 34,857 $ Solar Energy Financed Purchase - 762,397 (70,143) 692,254 76,578 Total Governmental Activities Long-term Debt $ - 886,003 $ (103,366) $ 782,637 $ 111,435 $ 32 CITY OF KING CITY

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 7 – Long-Term Debt (Continued)
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 Business-Type Activities Long Term Debt
Direct Borrowings:

Solar Energy Financed Purchase 1,141,282 $ - $ (105,001) $ 1,036,281 $ 114,635 $ Direct Placements:
2021 Wastewater Revenue Refunding Bonds - 3,834,340 (187,649) 3,646,691 191,880 Total Business-Type Activities Debt $ - 4,975,622 $ (292,650) $ 4,682,972 $ 306,515 $ Compensated Absences
Governmental Activities $ 145,618 398,551 $ - $ 544,169 $ Net Pension Liability
Governmental Activities $ 3,951,959 3,595,232 $ - $ 7,547,191 $ Business-Type Activities $ 67,265 62,230 $ - $ 129,495 $ 2019 Street Sweeper Financed Purchase – On March 15, 2019, the City entered into a purchase agreement for a street sweeper. The lease bears an interest rate of 4.829% and terminates on December 1, 2025.

Solar Energy Financed Purchase – On July 10, 2016, the City started making payments on a solar lease arrangement. The amount financed was $2,644,187. Annual payments are from $94,649 to $156,907 and terminates on January 10, 2030. Interest rate is 3.231%. 2021 WasteWater Revenue Refunding Bonds - In May 2021, the City issued the 2021 WasteWater Revenue Refunding Bonds for the principal amount of $4,012,670. The issuance was to refund the outstanding principal balance of the 2018 Enterprise Revenue Bonds described above. The reacquistion price exceeded the net carrying amount of the old debt by $77,193. The City refunded the above debts to reduce its total debt service over 17 years by $99,551 and to obtain an economic gain (difference between the present values of debt service payments on the old and new debt) of $310,178. The bonds bear interest

2.250% and are payable semi-annually commencing September 2022 through March 2038.

Debt service is secured by a pledge of net revenues of the City’s WasteWater Systems. The City covenants that it shall prescribe, revise and collect such charges for the services and facilities of the wastewater systems which shall produce revenues sufficient in each fiscal year to provide gross revenues which are sufficient to pay all wastewater operation and maintenance costs and all bond installment payments and produce net wastewater revenues equal to at least 1.15 times debt service coming due and payable during such fiscal year. The City is in compliance with those covenants as of June 30, 2023.

Cash basis debt service paid during the fiscal year ended June 30, 2023 totaled $271,812. Total wastewater system net revenues and net revenue available for debt was 9.74 at June 30, 2023. 33 CITY OF KING CITY

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 7 – Long-Term Debt (Continued)
2022 WasteWater Revenue Refunding Bonds (continued)
The annual requirement to amortize the principal and interest on all long-term debt at June 30, 2023 was:

Years ending June 30, Principal Interest Principal Interest 2024 111,435 $ 25,493 $ 306,515 $ 112,456 $
2025 119,954 21,250 321,011 104,304
2026 109,529 16,817 336,196 95,721
2027 98,171 13,485 352,078 86,685
2028 106,194 10,249 368,708 77,173
2029-2033 237,354 9,731 1,476,944 249,953
2034-2038 - - 1,253,620 101,910
2039 - - 267,900 3,013
$ 97,025 782,637 $ 4,682,972 $ 831,215 $
Government-Wide Activities Business-Type Activities
Note 8 – Lease Liability
Balance Balance Current
July 1, 2022 Additions Retirements June 30, 2023 Portion Lease Liabilities:

Governmental Activities 135,283 $ 26,950 $ (58,178) $ 104,055 $ 61,581 $ Business-Type Activities 56,113 - (15,110) 41,003 15,570 $ 26,950 191,396 $ (73,288) $ 145,058 $ 77,151 $
The City entered into several sixty (60) month lease agreements as lessee for the acquisition and use of vehicles. An initial lease liability was recorded in the amount of $346,911 during the year the lease was entered. As of June 30, 2023, the value of the lease liability was $191,396. The City is required to make monthly principal and interest payments of $335 to $857. The lease has an interest rate of 3%. The equipment has a five-year estimated useful life. The value of the right-to-use asset as of the end of the current fiscal year was $138,463 and had accumulated amortization of $235,398.

The future principal and interest lease payments as of June 30, 2023, were as follows:

Years ending June 30, Principal Interest Principal Interest 2024 61,581 $ 2,279 $ 15,570 $ 1,017 $
2025 29,426 725 16,043 544
2026 5,480 316 9,390 94
2027 5,647 150 - -
2028 12 1,921 - -
$ 3,482 104,055 $ 41,003 $ 1,655 $
Government-Wide Activities Business-Type Activities
34 CITY OF KING CITY

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 9 – Deficit Fund Balances
Fund Balance Deficits - The following is a summary of deficit fund balances as of June 30, 2023:

Governmental Funds
Leap Grant (10,549) $
FEMA Storm Event Grant (127,233) $
Prop 68 Grant (176,247) $
Enterprise Fund
Community Power (14,722) $
These deficits are are expected to be relieved from future revenues or transfers from other funds.

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 has two items to report in this category:
 The City has $3,685,111 in pension related items that qualify to be reported in deferred outflows of resources. The pension related deferred outflows of resources are described in Note

10.  The City has $165,842 in unamortized deferred amount of refunding related to the 2023 Wastewater Revenue Refunding Bonds.

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 has one item to report in this category:
 The City has $632,707 in pension related items that qualify to be reported in deferred inflows of resources. The pension related deferred inflows of resources are described in Note 10.

The City also has one type of item, which arises only under a modified accrual basis of accounting that qualifies for reporting as deferred inflows of resources. Accordingly, that item, deferred loans, is reported only in the governmental funds balance sheet. The City reports in the HOME Grant fund, $3,000,000, deferred loans and accrued interest of $930,000.

Note 11 – City Employees’ Retirement Plan (Defined Benefit 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.
35 CITY OF KING CITY

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 11 – City Employees’ Retirement Plan (Defined Benefit Pension Plan) (Continued) Funding Policy – The City pays 7.470% - 18.170% of annual covered salary for active plan members in the City’s defined pension plan. 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 contribution requirements of plan members are established by State statute and the employer contribution is established and may be amended by PERS.

The Plans’ provisions and benefits in effect at June 30, 2023, are summarized as follows:

Miscellaneous Safety
Hire Date
Prior to
January 1, 2013
Prior to
January 1, 2013
Benefit Formula 2.0% at 55;
maximum 2%
COLA

2.0% at 50;
maximum 2%
COLA
Benefit Vesting Schedule 5 years service 5 years service Benefit Payments monthly for life monthly for life
Retirement Age 55 50
Monthly Benefits, as a % of Eligible Compensation 2.00% 2.00% Required Employee Contribution Rates 7.00% 9.00%
Required Employer Contribution Rates 10.320% 18.170%
PEPRA
Miscellaneous PEPRA Safety
Hire Date
On or after
January 1, 2013
On or after
January 1, 2013
Benefit Formula 2.0% at 62;
maximum 2%
COLA

2.7% at 57;
maximum 2%
COLA
Benefit Vesting Schedule 5 years service 5 years service Benefit Payments monthly for life monthly for life
Retirement Age 62 57
Monthly Benefits, as a % of Eligible Compensation 2.00% 2.00% Required Employee Contribution Rates 6.25% 11.50%
Required Employer Contribution Rates 7.470% 12.780%
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 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 City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. 36 CITY OF KING CITY

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 11 – City Employees’ Retirement Plan (Defined Benefit Pension Plan) (Continued) For the year ended June 30, 2023, $803,029 in contributions was recognized 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:

Proportionate Share of
Net Pension Liability
Miscellaneous $4,046,815
Safety $3,629,871
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 Plan is measured as of June 30, 2021, 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 0.10242% 0.04880%
Proportion - June 30, 2023 0.08648% 0.05282%
Change -0.01594% 0.00402%
37 CITY OF KING CITY

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 11 – City Employees’ Retirement Plan (Defined Benefit Pension Plan) (Continued) For the year ended June 30, 2023, the City recognized pension expense of $694,472. 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 $ - 942,927 $
measurement date
Differences in expected and actual experience (93,848) 231,495 Change in employer's proportion (48,252) 415,531
Changes of assumptions - 780,682
Differences between employer's contributions and
proporationate share of contributions (490,607) -
Differences between projected and actual
investment earnings - 1,314,476
Total $ (632,707) 3,685,111 $
The $942,927 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 548,882 $
2025 471,474
2026 286,073
2027 803,048
Total 2,109,477 $
38 CITY OF KING CITY

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 11 – City Employees’ Retirement Plan (Defined Benefit 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
Data for all Funds
1 Post Retirement Benefit Increa 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 an 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 – None.
39 CITY OF KING CITY

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 11 – City Employees’ Retirement Plan (Defined Benefit Pension Plan) (Continued) Discount rate – The discount rate used to measure the total pension liability for PERF C was 6.90%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

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 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. The geometric rates of return are net of administrative expenses.

Asset Class
Assumed
Allocation
Real Return
Years 1-10
1,
2 Global equity - cap-weighted 30% 4.65%
Global equity - cap-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%
Total 100%
1 An expected inflation of 2.30% used for this period.
2 Figures are based on the 2021-22 Asset Management Study. 40 CITY OF KING CITY

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 11 – City Employees’ Retirement Plan (Defined Benefit 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%)
Miscellaneous 6,027,537 $ 4,046,815 $ 2,417,171 $
Safety 5,504,529 $ 3,629,871 $ 2,097,765 $
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 – Risk Management
The City provides for workers' compensation and liability through a self-funded joint powers agency, Monterey Bay Area Self Insurance Authorities. Joint Powers Agreement (JPA) accounts are not separately maintained for each participant.

Description of Self-Insurance Pool Pursuant to Joint Powers Agreement The City is a member of the Monterey Bay Area Self Insurance Authority (MBASIA). MBASIA is composed of 10 California public entities and is organized under a joint powers agreement pursuant to California Government Code 6500 et seq. The purpose of MBASIA is to arrange and administer programs for the pooling of self-insured losses, to purchase excess insurance or reinsurance, and to arrange for group-purchased insurance for property and other coverage.

General Liability: The City has a deductible of $10,000 for each liability claim. Claims above $10,000 up to $1,000,000 are paid by MBASIA. Claims above $1,000,000 up to $29,000,000 are covered by insurance purchased by MBASIA.

Workers’ Compensation: The City does not retain deductible for workers’ compensation claims. Annual premiums for coverage up to statutory levels are paid to MBASIA based on a Board approved Budget methodology. A third party claims administrator is contracted by MBASIA to manage claims activity. 41 CITY OF KING CITY

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 12 – Risk Management (Continued)
Adequacy of Protection

During the past three fiscal (claims) years none of the above programs of protection have had settlements or judgments that exceeded insured coverage. There have been no significant reductions in insured liability coverage from coverage in the prior year. Audited financial statements for MBASIA can be obtained from their management at 100 Pine Street, 11th Floor, San Francisco, CA 94111.

Note 13 – Contingencies
Federal and State Government Programs - The City participates in several federal and state grant programs. These programs have been audited, as needed, in accordance with the provisions of the federal Single Audit Act of 1984 and applicable state requirements. No cost disallowances were proposed as a result of these audits. However, these programs are still subject to further examination by the grantors and the amount, if any, of expenditures, which may be disallowed by the granting agencies, cannot be determined at this time. The City expects such amounts, if any, to be immaterial.

Landfill Postclosure Costs – Since the closure of the City’s landfill in 1976, the City has been incurring postclosure care costs, and annual monitoring tests since 1996. The City is planning to initiate the process with regulators to stop the semi-annual testing and have the former landfill officially declared as closed. The City expects the process to be completed within the next few years.

Note 14 – Excess of Expenditures over Appropriations
The excess of expenditures over appropriations are as follows:

General Fund:

Current:

Public safety $ 618,944
Culture and recreation $ 95,144
Community development $ 206,137
Capital Outlay $ 590,310
Debt Service
Principal $ 3,842

CDBG Grant:

Current:

Community development $ 1,242,224
Development Impact Fees
Current:

Public works $ 23,445
Culture and recreation $ 6,002
Community development $ 26,859
Capital Outlay $ 32,096
The excess of expenditures over appropriations are covered by the available fund balance in the corresponding funds.
42 CITY OF KING CITY

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 15 – Subsequent Events
The City evaluated subsequent events for recognition and disclosure through August 5, 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.

REQUIRED SUPPLEMENTARY INFORMATION
43 CITY OF KING CITY

BUDGETARY COMPARISON SCHEDULE

GENERAL FUND
YEAR ENDED JUNE 30, 2023
Variance with
Final Budget
Budgeted Amounts Actual Positive/
Original Final Amounts (Negative)
Revenue
Taxes 7,488,304 $ 7,488,304 $ 8,289,898 $ 801,594 $
Intergovernmental 204,500 204,500 314,762 110,262
Charges for services 13,500 13,500 71,007 57,507
Licenses and permits 1,383,650 1,383,650 1,245,749 (137,901) Fines and forfeitures 36,000 36,000 25,354 (10,646)
Interest and rents 3,000 3,000 86,579 83,579
Other - - 230,778 230,778
Total revenue 9,128,954 9,128,954 10,264,127 1,135,173
Expenditures
Current
General government 1,239,856 1,219,856 1,082,390 137,466 Public safety 4,616,178 4,616,178 5,235,122 (618,944)
Public works 1,254,704 1,254,704 1,180,345 74,359
Culture and recreation 802,392 572,392 897,536 (95,144) Community development 1,472,479 1,472,479 1,678,616 (206,137) Capital outlay 548,200 548,200 1,138,510 (590,310)
Debt service
Principal 77,185 77,185 81,027 (3,842)
Interest and fiscal charges 20,460 20,460 20,460 -
Total expenditures 10,011,454 9,801,454 11,314,006 (1,302,552) Revenue over (under) expenditures (672,500) (882,500) (1,049,879) (167,379) Other Financing Sources
Loan proceeds - - 26,953 26,953
Transfers in (out), net (738,000) (738,000) 490,053 1,228,053 Total other financing sources/(uses) (738,000) (738,000) 517,006 1,255,006 Net Change in Fund Balance $ (1,620,500) (1,410,500) $ (532,873) $ 1,060,674 Fund Balance
Beginning of year 3,699,488
End of year $ 3,166,615
44 CITY OF KING CITY

BUDGETARY COMPARISON SCHEDULE

AMERICAN RESCUE PLAN ACT
YEAR ENDED JUNE 30, 2023
Variance with
Final Budget
Budgeted Amounts Actual Positive/
Original Final Amounts (Negative)
Revenue
Intergovernmental 1,683,759 $ 1,683,759 $ 1,683,759 $ - $ Interest and rents - - 62,113 62,113
Total revenue 1,683,759 1,683,759 1,745,872 62,113
Expenditures
Current
General government 831,347 831,347 413,576 417,771
Capital outlay 2,476,171 2,476,171 257,108 2,219,063
Total expenditures 3,307,518 3,307,518 670,684 2,636,834 Net Change in Fund Balance $ (1,623,759) (1,623,759) $ 1,075,188 $ 2,698,947 Fund Balance
Beginning of year 1,314,021
End of year $ 2,389,209
45 CITY OF KING CITY

BUDGETARY COMPARISON SCHEDULE

CDBG GRANT
YEAR ENDED JUNE 30, 2023
Variance with
Final Budget
Budgeted Amounts Actual Positive/
Original Final Amounts (Negative)
Revenue
Intergovernmental 75,000 $ 75,000 $ 1,831,363 $ 1,756,363 $ Interest and rents - - 8,491 8,491
Total revenue 75,000 75,000 1,839,854 1,764,854
Expenditures
Current
Community development 75,000 75,000 1,317,224 (1,242,224) Total expenditures 75,000 75,000 1,317,224 (1,242,224)
Revenue over (under) expenditures - - 522,630 522,630
Other Financing Sources
Transfers in (out), net (50,000) (50,000) 50,000 100,000 Total other financing sources/(uses) (50,000) (50,000) 50,000 100,000 Net Change in Fund Balance $ (50,000) (50,000) $ 572,630 $ 622,630 Fund Balance
Beginning of year 193,169
End of year $ 765,799
46 CITY OF KING CITY

BUDGETARY COMPARISON SCHEDULE

DEVELOPMENT IMPACT FEES FUND
YEAR ENDED JUNE 30, 2023
Variance with
Final Budget
Actual Positive/
Original Final Amounts (Negative)
Revenue
Charges for services 25,000 $ 25,000 $ 21,862 $ (3,138) $ Licenses, permits and impact fees 324,000 324,000 329,493 5,493 Interest and rent - - 46,884 46,884
Total revenue 349,000 349,000 398,239 49,239
Expenditures
Current
Public works 50,000 50,000 73,445 (23,445)
Culture and recreation - - 6,002 (6,002)
Community development - - 26,859 (26,859)
Capital outlay 145,000 145,000 177,096 (32,096)
Total expenditures 195,000 195,000 283,402 (88,402)
Revenue over/(under)
expenditures $ 154,000 154,000 $ 114,837 $ (39,163)
Fund Balance
Beginning of year 1,893,036
End of year $ 2,007,873
Budgeted Amounts
47 CITY OF KING CITY

BUDGETARY COMPARISON SCHEDULE

MEASURE X FUND
YEAR ENDED JUNE 30, 2023
Variance with
Final Budget
Budgeted Amounts Actual Positive/
Original Final Amounts (Negative)
Revenue
Taxes $ 526,000 526,000 $ 567,199 $ 41,199 $
Interest and rent - - 11,913 11,913
Total revenue 526,000 526,000 579,112 53,112
Expenditures
Current
Public works 526,000 526,000 480,583 45,417
Total expenditures 526,000 526,000 480,583 45,417
Net Change in Fund Balance $ - - $ 98,529 $ 98,529
Fund Balance
Beginning of year 643,016
End of year $ 741,545
48 CITY OF KING CITY SCHEDULE OF THE CITY’S PROPORTIONATE SHARE OF NET PENSION LIABILITY LAST 10 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 a
percentage of coveredemployee payroll Plan's fiduciary net position Plan's fiduciary net position
as a percentage of the Total
Pension Liability
2015 0.09668% 2,389,457 $ 834,582 $ 286.31% 7,090,204 $ 77.58% 2016 0.08862% 2,431,259 $ 936,886 $ 259.50% 8,223,238 $ 77.18% 2017 0.08541% 2,967,126 $ 978,018 $ 303.38% 7,817,932 $ 72.49% 2018 0.08489% 3,346,536 $ 1,019,404 $ 328.28% 8,822,837 $ 72.50% 2019 0.08484% 3,197,346 $ 763,963 $ 418.52% 9,315,620 $ 74.45% 2020 0.08418% 3,371,043 $ 845,215 $ 398.84% 9,771,801 $ 74.35% 2021 0.08366% 3,528,942 $ 1,077,863 $ 327.40% 10,124,046 $ 74.15% 2022 0.10242% 1,944,690 $ 1,058,867 $ 183.66% 12,310,030 $ 86.36% 2023 0.08648% 4,046,815 $ 1,167,034 $ 346.76% 10,483,347 $ 72.15% Proportion of the net
pension liability
Proportionate share
of the net pension
liability
Covered - employee
payroll
Proportionate share of the net
pension liability as a
percentage of coveredemployee payroll Plan's fiduciary net position Plan's fiduciary net position
as a percentage of the Total
Pension Liability
2015 0.04336% 1,626,559 $ 1,087,897 $ 149.51% 6,567,188 $ 80.15% 2016 0.04014% 1,653,870 $ 939,684 $ 176.00% 6,832,315 $ 80.51% 2017 0.04024% 2,084,204 $ 829,185 $ 251.36% 6,292,887 $ 75.12% 2018 0.04119% 2,461,421 $ 1,262,109 $ 195.02% 7,510,467 $ 75.32% 2019 0.04242% 2,488,981 $ 1,298,268 $ 191.72% 8,149,726 $ 76.60% 2020 0.04381% 2,860,960 $ 1,359,578 $ 210.43% 8,489,785 $ 74.79% 2021 0.04586% 3,055,582 $ 1,346,512 $ 226.93% 8,944,101 $ 74.54% 2022 0.04880% 1,712,772 $ 1,270,072 $ 134.86% 11,028,079 $ 86.56% 2023 0.05282% 3,629,871 $ 1,709,047 $ 212.39% 9,944,910 $ 73.26% Miscellaneous
Safety
*Fiscal year 2014-15 was the first year of implementation, therefore only nine years are shown. Changes of Assumptions: None 49 CITY OF KING CITY SCHEDULE OF CONTRIBUTIONS LAST 10 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 145,093 $ (145,093) $ - $ 834,582 $ 17.39%2016 187,302 $ (187,302) $ - $ 936,886 $ 19.99%2017 257,596 $ (257,596) $ - $ 978,018 $ 26.34%2018 257,638 $ (257,638) $ - $ 1,019,404 $ 25.27%2019 306,385 $ (306,385) $ - $ 763,963 $ 40.10%2020 345,470 $ (345,470) $ - $ 845,215 $ 40.87%2021 402,008 $ (402,008) $ - $ 1,077,863 $ 37.30%2022 309,017 $ (309,017) $ - $ 1,058,867 $ 29.18%2023 353,638 $ (353,638) $ - $ 1,167,034 $ 30.30% 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 279,368 $ (279,368) $ - $ 1,087,897 $ 25.68%2016 213,094 $ (213,094) $ - $ 939,684 $ 22.68%2017 182,185 $ (182,185) $ - $ 829,185 $ 21.97%2018 219,036 $ (219,036) $ - $ 1,262,109 $ 17.35%2019 285,131 $ (285,131) $ - $ 1,298,268 $ 21.96%2020 306,024 $ (306,024) $ - $ 1,359,578 $ 22.51%2021 384,434 $ (384,434) $ - $ 1,346,512 $ 28.55%2022 397,596 $ (397,596) $ - $ 1,270,072 $ 31.30%2023 449,391 $ (449,391) $ - $ 1,709,047 $ 26.29% Safety
Miscellaneous
* Fiscal year 2014-15 was the first year of implementation, therefore only nine years are shown.

SUPPLEMENTAL ONLY INFORMATION
50 CITY OF KING CITY COMBINING BALANCE SHEET NON-MAJOR GOVERNMENTAL FUNDS JUNE 30, 2023 Riverview
SLESF/COPS Asset Gardens Prop SB1 Road Traffic
Grant Seizure Landscape 1B Maintenance Safety
ASSETS
Cash and investments 45,816 $ 11,496 $ 20,606 $ 14 $ 580,486 $ 11,530 $ Accounts receivable - - - - - -
Due from other governments 8,333 - - - 52,317 -
Interest receivable 45 189 79 - 2,259 157
Total assets $ 11,541 54,338 $ 20,685 $ 14 $ 635,062 $ 11,687 $

LIABILITIES
Accounts payable and accrued expense - $ - $ 465 $ - $ - $ 10,066 $ Due to other funds - - - - - - Total liabilities - - 465 - - 10,066

FUND BALANCE
Restricted
Circulation improvements - - - - 635,062 1,621Capital improvement projects - - - 14 - -Public safety 54,338 11,541 - - - -Landscape maintenance - - 20,220 - - - Unassigned - - - - - -
Total fund balance 54,338 11,541 20,220 14 635,062 1,621 Total liabilities, deferred inflows of
resources, and fund balance $ 11,541 54,338 $ 20,685 $ 14 $ 635,062 $ 11,687 $ Special Revenue Funds
51 CITY OF KING CITY COMBINING BALANCE SHEET (CONTINUED) NON-MAJOR GOVERNMENTAL FUNDS JUNE 30, 2023 SB2
Planning
LEAP King City SB1 Land Use Gas
Grant Low Income Housing Multimodal Grant Element Grant Transportation Tax ASSETS
Cash and investments - $ 152,602 $ - $ - $ - $ - $
Accounts receivable - - - - - 560,022
Due from other governments - - 92,553 62,343 - -
Interest receivable 601 - - - - -
Total assets $ 153,203 - $ 92,553 $ 62,343 $ - $ 560,022 $

LIABILITIES
Accounts payable and accrued expense 1,148 $ - $ 1,993 $ 5,654 $ - $ 403,747 $ Due to other funds - 9,401 7,114 56,689 - 74,113
Total liabilities - 10,549 9,107 62,343 - 477,860

FUND BALANCE
Restricted
Circulation improvements - - - - - 82,162
Capital improvement projects - - 83,446 - - -
Public safety - - - - - -
Landscape maintenance - - - - - -
Unassigned 153,203 (10,549) - - - -
Total fund balance (10,549) 153,203 83,446 - - 82,162
Total liabilities, deferred inflows of
resources, and fund balance $ 153,203 - $ 92,553 $ 62,343 $ - $ 560,022 $ Special Revenue Funds
52 CITY OF KING CITY COMBINING BALANCE SHEET (CONTINUED) NON-MAJOR GOVERNMENTAL FUNDS JUNE 30, 2023 Total
Non-major
FEMA CDBG Airport Prop 68 UUT-Public Governmental
Storm Event Pro Youth Operations Grant Safety Funds
ASSETS
Cash and investments - $ - $ 274,708 $ - $ 21,055 $ 1,118,313 $ Accounts receivable - - 53,290 - 1,500 614,812
Due from other governments - 322,081 47 - 32,367 570,041 Interest receivable - - 1,071 - 1,839 6,240
Total assets $ 322,081 - $ 329,116 $ - $ 56,761 $ 2,309,406 $

LIABILITIES
Accounts payable and accrued expense 7,258 $ - $ 19,554 $ - $ - $ 449,885 $ Due to other funds 322,081 119,975 - 176,247 - 765,620
Total liabilities 322,081 127,233 19,554 176,247 - 1,215,505

FUND BALANCE
Restricted
Circulation improvements - - - - - 718,845
Capital improvement projects - - - - - 83,460
Public safety - - 309,562 - 56,761 432,202
Landscape maintenance - - - - - 20,220
Unassigned - (127,233) - (176,247) - (160,826)
Total fund balance (127,233) - 309,562 (176,247) 56,761 1,093,901 Total liabilities, deferred inflows of
resources, and fund balance $ 322,081 - $ 329,116 $ - $ 56,761 $ 2,309,406 $ Special Revenue Funds
53 CITY OF KING CITY COMBINING STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE NON-MAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2023 Riverview
SLESF/COPS Asset Gardens Prop SB1 Traffic
Grant Seizure Landscape 1B Road Maintenace Safety
Revenue
Taxes - $ - $ 19,843 $ - $ - $ - $
Intergovernmental 165,271 - - - 298,564 92,985
Charges for services - - - - - -
Interest and rent 266 1,772 381 - 11,730 942
Total revenue 266 167,043 20,224 - 310,294 93,927
Expenditures
Public safety 78,348 - - - - 37,271
Public works - - 7,421 - - -
Culture and recreation - - - - - -
Community development - - - - - 78,062
Debt service
Principal 54,336 - - - - -Interest - - - - - -
Total expenditures - 255,301 7,421 - - 115,333
Revenue over (under) expenditures (88,258) 266 12,803 - 310,294 (21,406) Other financing sources/(uses)
Transfers in/(out), net - - - - - -
Total other financing sources (uses) - - - - - -
Change in Fund Balance 266 (88,258) 12,803 - 310,294 (21,406) Fund Balance
Beginning of year 142,596 11,275 7,417 14 324,768 23,027 End of year 54,338 $ 11,541 $ 20,220 $ 14 $ 635,062 $ 1,621 $ Special Revenue Funds
54 CITY OF KING CITY COMBINING STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE NON-MAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2023 SB2
Planning
LEAP King City SB1 Land Use Gas
Grants Low Income Housing Multimodal Grant Element Grant Transportation Tax Revenue
Taxes - $ - $ - $ - $ - $ 329,780 $
Intergovernmental - 151,250 51,141 24,435 - 531,280Charges for services - - - - - -Interest and rent 1,953 - - - - - Total revenue 153,203 - 51,141 24,435 - 861,060
Expenditures
Public safety - - - - - -Public works - - 51,141 24,435 - 915,948Culture and recreation - - - - - -Community development 10,763 - - - - -Debt service Principal - - - - - 26,181Interest - - - - - 8,984
Total expenditures - 10,763 51,141 24,435 - 951,113
Revenue over (under) expenditures (10,763) 153,203 - - - (90,053) Other financing sources/(uses)
Transfers in/(out), net - - - - - 125,000
Total other financing sources (uses) - - - - - 125,000
Change in Fund Balance 153,203 (10,763) - - - 34,947Fund Balance Beginning of year 214 - 83,446 - - 47,215
End of year (10,549) $ 153,203 $ 83,446 $ - $ - $ 82,162 $ Special Revenue Funds
55 CITY OF KING CITY COMBINING STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE NON-MAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2023 Total
Non-major
FEMA CDBG Airport Prop 68 UUT-Public Governmental
Storm Event Youth Operations Grant Safety Funds
Revenue
Taxes - $ - $ - $ - $ 446,268 $ 795,891 $
Intergovernmental - 82,861 28,450 - - 1,426,237
Charges for services - - 117,355 - - 117,355
Interest and rent - - 5,671 - 8,784 31,499
Total revenue 82,861 - 151,476 - 455,052 2,370,982
Expenditures
Public safety - - - - - 115,619
Public works 127,233 - 80,580 121,526 - 1,328,284
Community development - 82,861 - - - 171,686
Capital outlay - - - - - 122,617
Debt service
Principal - - - - - 80,517
Interest - - - - - 8,984Total expenditures 82,861 127,233 80,580 121,526 - 1,827,707 Revenue over (under) expenditures (127,233) - 70,896 (121,526) 455,052 543,275 Other financing sources/(uses)
Transfers in/(out), net - - - - (455,053) (330,053)
Total other financing sources (uses) - - - - (455,053) (330,053) Change in Fund Balance - (127,233) 70,896 (121,526) (1) 213,222Fund Balance Beginning of year - - 238,666 (54,721) 56,762 880,679
End of year (127,233) $ - $ 309,562 $ (176,247) $ 56,761 $ 1,093,901 $ Special Revenue Funds
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 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 King City, 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 King City (the “City”), California, as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise City’s basic financial statements, and have issued our report thereon dated August 5, 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.

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.

August 5, 2024
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 King City, California
Report on Compliance for Each Major Federal Program
Opinion on Each Major Federal Program
We have audited City of King City (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, 2023. 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, 2023.

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.
59 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 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, 60 as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified.

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

The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.

August 5, 2024
61 CITY OF KING CITY

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 Housing and Community Development
Passed through State Department of Housing and
Communiy Development

14.228 20-CDBG-12002 1,183,232 $

14.228 17-CDBG-12024 82,861

14.228 20-CDBG-CV2-3-00005 30,095

14.228 20-CDBG-CV2-3-00014 102,023
Total U.S. Department of Housing and Community Development 1,398,211 U.S. Department of the Treasury
Passed through United Way Monterey County
Coronavirus Relief Fund 21.019 N/A 97,651
Passed through California Department of Finance
Coronavirus State and Local Fiscal Recovery Funds
America Rescue Plan Act 21.027 N/A 670,685
Total U.S. Department of the Treasury 768,336
Total Federal Expenditures $ 2,166,547
Community Development Block Grants/ State's Program and Non-Entitlement Grants in Hawaii
62 CITY OF KING CITY

NOTES TO 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 King City, 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. 63 CITY OF KING CITY

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 deficiencies identified that are
not considered to be material weaknesses? 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 deficiencies identified that are
not considered to be material weaknesses? 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 2CFR section
200.516? Yes No
Identification of Major Programs
CFDA Number Name of Federal Program or Cluster

14.228 Community Development Block Grants

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.
64 CITY OF KING CITY

SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
YEAR ENDED JUNE 30, 2023
Summary Schedule of Prior Audit Findings
None reported.

CITY OF KING CITY

MANAGEMENT REPORT
FOR THE YEAR ENDED JUNE 30, 2023
Exhibit 2

TABLE OF

CONTENTS
Page
Required Communications 1 – 3
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 King City, 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 King City (the “City”) 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, if applicable, 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 July 1, 2020.

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 the 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. Accordingly, the cumulative effect of the accounting change as of the beginning of the year is reported in the Government-wide and Sewer Fund financials. We noted no transactions entered into by the City during the year that were both significant and unusual, and of which, under professional standards, we are required to inform you, or transactions for which there is a lack of authoritative guidance and consensus. All significant transactions have been recognized in the financial statements in the proper period.

We noted no transactions entered into by the 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.
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, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, 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 our audit.

Management Representations
We have requested certain representations from management that are included in the management representation letter dated August 5, 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’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. 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 King City’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 the City and is not intended to be, and should not be, used by anyone other than these specified parties.

Very truly yours,
August 5, 2024

King City City CouncilAugust 13, 2024

King City City Council
August 13, 2024