La Mesa City Council
January 11, 2022

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2021

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (continued) E. Cash, Cash Equivalents and Investments, (continued)
In accordance with generally accepted accounting principles, certain disclosure requirements, if applicable for deposit and investment risk are specified for the following areas:
► Interest Rate Risk
► Credit Risk
• Overall
• Custodial Credit Risk
• Concentration of Credit Risk
► Foreign Currency Risk
F. Restricted Cash and Investments
Certain restricted cash and investments are held by fiscal agents for the redemption of bonded debt and for acquisition and construction of capital projects. Cash and investments are also restricted for deposits held for others within the enterprise funds.

G. Inventories
Inventory is valued at the lower of cost (first-in, first-out) or market value and consists of expendable supplies held for consumption. Inventories are recorded using the consumption (capitalization) method.

H. Jnterfund Transactions
Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either "due to/from other funds" (i.e., the current portion of interfund loans) or "advances to/from other funds" (i.e., the noncurrent portion of interfund loans).

Any residual balances outstanding between the governmental activities and business-type activities are reported in the Government-Wide Financial Statements as "internal balances." I. Capital Assets
The City's assets are capitalized at historical cost or estimated historical cost. City policy has set the capitalization threshold for reporting general capital assets at $5,000 and for reporting infrastructure assets at $25,000. Gifts or contributions of capital assets are reported at acquisition value when received. Depreciation is recorded on a straight-line basis over the useful lives of the assets as follows:

Buildings and Improvements
Improvements other than buildings
Machinery and Equipment
Infrastructure
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40 years
12- 50 years
5-20 years
20-60 years

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2021

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (continued) I. Capital Assets, (continued)
The City defines infrastructure as the basic physical assets that allow the City to function. The assets include the streets, sewer collection and treatment system, park and recreation lands and improvement system, storm water conveyance system, and buildings combined with the site amenities, such as parking and landscaped areas used by the City in the conduct of its business.

Each major infrastructure system can be divided into subsystems. For example, the street system can be subdivided into pavement, curb and gutters, sidewalks, medians, streetlights, traffic control devices (signs, signals and pavement markings), landscaping and land. These subsystems were not delineated in the basic financial statements. The appropriate operating department maintains information regarding the subsystems.

Interest accrued during capital assets construction, if any, is capitalized for the business-type and proprietary funds as part of the asset cost.

J. Compensated Absences
The City accounts for compensated absences (unpaid vacation, sick leave and compensatory time) in accordance with generally accepted accounting principles. In governmental fund types, compensated absences are recorded as expenditures in the year paid, as it is the City's policy to liquidate any unpaid vacation or sick leave at June 30 from future resources rather than currently available expendable resources. Accordingly, the entire unpaid liability for the governmental fund types is recorded in the Government-Wide Financial Statements.

K. Long-Term Debt
In the Government-Wide Financial Statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities. Bond premiums and discounts are deferred and amortized over the life of the bonds using the effective interest method. Bond issuance costs are expensed in the period incurred. Bonds payable are reported net of the applicable bond premium or discount.

In the fund financial statements, 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 financial 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.

L. Interest Payable
In the Government-Wide Financial Statements, interest payable on long-term debt is recognized as the liability is incurred for governmental fund types and proprietary fund types.

In the fund financial statements, propriety fund types recognize the interest payable when the liability is incurred.
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CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2021

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (continued) M. Property Taxes
Under California law, property taxes are assessed and collected by the counties at 1 % of assessed value, plus other increases approved by the voters. The property taxes are pooled and are then allocated to the cities based on complex formulas. Accordingly, the City accrues only those taxes which are received within 60 days after year-end.

The City's property taxes are levied and collected by the San Diego County Treasurer. Property taxes (secured and unsecured) are levied on July 1 based on the previous March 1 assessed values as determined by the San Diego County Assessor. Secured taxes are due in two equal installments on November 1 and February 1 following the levy date and become delinquent on December 10 and April 1 O following the levy date. Unsecured taxes are due on July 1 and become delinquent August 31 following the levy date.

N. Pension Plan
For purposes of measuring the net pension liability, deferred outflows and inflows of resources related to pensions, and pension expense, information about the fiduciary net position and additions to/deductions from the fiduciary net position have been determined on the same basis as they are reported by the CalPERS Financial Office. For this purpose, benefit payments (including refunds of employee contributions) are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value. CalPERS audited financial statements are publicly available reports that can be obtained at CalPERS' website.

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

Valuation Date (VD)
Measurement Date (MD)
Measurement Period (MP)
June 30, 2019
June 30, 2020
July 1, 2019 to June 30, 2020
The City additionally reports a PARS Retirement Enhancement Pension Plan for which the following actuarial valuation timeframes are used:

Valuation Date (VD)
Measurement Date (MD)
Measurement Period (MP)
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January 1, 2019
June 30, 2020
July 1, 2019 to June 30, 2020

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2021

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (continued)

0. Other Postemployment Benefits (OPES)
For purposes of measuring the net OPES liability, deferred outflows and inflows of resources related to OPES, and OPEB expense, information about the fiduciary net position of the City's plan (OPES Plan) and additions to/deductions from the OPES Plan's fiduciary net position have been determined on the same basis. For this purpose, benefit payments are reported at fair value.

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

Valuation Date (VD)
Measurement Date (MD)
Measurement Period (MP)
P. Net Position
June 30, 2019
June 30, 2020
July 1, 2019 to June 30, 2020
In the Government-Wide Financial Statements, net position are classified in the following categories:

Net Investment in Capital Assets - This amount consists of capital assets net of accumulated depreciation and reduced by outstanding debt that is attributed to the acquisition, construction, or improvement of the assets.

Restricted Net Position - This amount is restricted by external creditors, grantors, contributors, laws or regulations of other governments.

Unrestricted Net Position - This amount is all net position that do not meet the definition of "net investment in capital assets" or "restricted net position." Q. Fund Balances
In accordance with generally accepted accounting principles, the following classifications describe the relative strength of the spending constraints placed on the purposes for which resources can be used:
• Nonspendable - amounts that are not in a spendable form (such as inventory) or are required to be maintained intact.
• Restricted - amounts constrained to specific purposes by their providers (such as grantors, bondholders and higher levels of government), through constitutional provisions or by enabling legislation.
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CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2021

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (continued) Q. Fund Balances (continued)
• Committed - amounts constrained to specific purposes by a government itself, using the highest level of decision-making authority; to be reported as committed, amounts cannot be used for any other purpose unless the government takes the same highest level action to remove or change the constraint.
• Assigned - amounts a government intends to use for a specific purpose; intent can be expressed by the governing body or by an official or body to which the governing body delegates the authority.
• Unassigned - amounts that are for any purpose; positive amounts are reported only in a general fund.

The City Council, establishes (and modifies or rescinds) fund balance commitments by passage of an ordinance or resolution. The Director of Finance has the authority, granted by the Council, to commit City resources. When both restricted and unrestricted resources are available for use when an expenditure is incurred, it is the City's policy to use restricted resources first, then unrestricted resources as they are needed. It is also the City's policy to consider committed amounts as being reduced first, followed by assigned amounts and then unassigned amounts when expenditures are incurred for purposes for which amounts in any of those unrestricted fund balance classifications could be used.

R. Use of Estimates
The preparation of the basic financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities. In addition, estimates affect the reported amount of expenses. Actual results could differ from these estimates and assumptions.

S. Implementation of New GASB Pronouncement
The Governmental Accounting Standards Board (GASB) has issued Statement No. 84, Fiduciary Activities. The primary objective of this statement is to improve guidance regarding the identification of fiduciary activities for accounting and financial reporting purposes and how those activities should be reported.

As a result, activities previously reported as agency funds (developer deposits and computer loan program) are now grouped with the General Fund. The City no longer has activities that meet the criteria to be reported as a custodial fund.
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CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2021

2. CASH AND INVESTMENTS
The following is a summary of cash and investments at June 30, 2021:

Government-Wide Fiduciary
Statement of Net Position Funds
Governmental Business-Type Statement of
Activities Activities Fiducia!}'. Assets
Cash and investments $ 67,372,520 $ 4,330,515 $ 1,725,984 Restricted:

Cash and investments 267,255 213,494 511,512
Investments in Section 115 Trust 7,983,884
Total $ 75,623,659 $ 4,544,009 $ 2,237,496
Cash, cash equivalents, and investments consisted as follows, at June 30, 2021:

Cash and cash equivalents:
$
$
Petty Cash
Demand Deposit
$ 2,600
Total cash and cash equivalents
Investments:

Local Agency Investment Fund
Investment in Section 115 trust
Negotiable Certificates of Deposit
U.S. Government Obligations
Total Investments
Total cash and investments
A. Cash Deposits
1,754,914
1,757,514
40,766,702
7,983,884
17,378,578
14,518,486
80,647,650
$ 82,405, 164
Total
73,429,019
992,261
7,983,884
82,405,164
As of June 30, 2021, none of the City's cash deposits with financial institutions in excess of federal depository insurance limits was held in uncollateralized accounts.

B. Investments
The City is authorized by State statutes and in accordance with the City's Investment Policy (Policy) to invest in the following:
• Certificates of Deposit • California Local Agency Investment • Negotiable Certificates of Fund (LAIF)
Deposit • Repurchase Agreements
• U.S. Treasury Obligations • Mutual Funds
• U.S. Agency Securities • Commercial Paper
• Bankers Acceptances • Municipal Securities
• Corporate Notes
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CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2021

2. CASH AND INVESTMENTS, (continued)
B. Investments, (continued)
The Policy, in addition to State statutes, establishes that funds on deposit in banks must be federally insured or collateralized and investments shall: (1) have maximum maturity not to exceed five years; (2) be laddered and based on cash flow forecasts; and (3) be subject to limitations to a certain percent of the portfolio for each of the authorized investments.

The City's investments with Local Agency Investment Fund (LAIF) at June 30, 2021 included a portion of the pooled funds invested in Structured Notes and Assets-Backed Securities. These investments included the following:

Structured Notes are debt securities (other than asset-backed securities) whose cash flow characteristics (coupon rate, redemption amount, or stated maturity) depend upon one or more indices and/or that have embedded forwards or options.

Asset-Backed Securities. the bulk of which are mortgage-backed securities, entitle their purchasers to receive a share of the cash flows from a pool of assets such as principal and interest repayments from a pool of mortgages (such as CMO's) or credit card receivables.

As of June 30, 2021, the City had $40,766,702 invested in LAIF. This balance is the fair market value; in accordance with Generally Accepted Accounting Principles. investments should be stated at fair value using the aggregate method.

C. Risk Disclosures
Interest Rate Risk
As a means of limiting its exposure to fair value losses arising from rising interest rates, the City's investment policy requires structuring the portfolio in a way so that securities mature to meet the City's cash requirements for ongoing obligations; investing primarily in shorter term securities; and not paying a premium for any secondary market security which includes a call feature. The City is in compliance with this provision of the Policy.

Credit Risk
The City's Policy limits investments in commercial paper to the highest grade of stand alone or enhanced (prime) commercial paper as rated by Moody's Investor Service, Standard & Poor's Corporation, or Fitch Financial Services and requires that the management company of mutual funds must have attained the highest ranking or the highest letter and numerical rating provided by not less than two nationally recognized statistical rating organizations. -38-

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2021

2. CASH AND INVESTMENTS, (continued)
C. Risk Disclosures, (continued)
The City's investments are rated by the nationally recognized statistical rating organizations as follows:

Investment Pools:

State of California - Local Agency Investment Fund
Investment in Section 115 trust
Negotiable Certificates of Deposit
U.S. Government Agencies:

FNMA
FHLB
FHLMC
Concentration of Credit Risk
Moody's
Not Rated
Not Rated
Aaa
Aaa
Aaa
Aaa
Standard
& Poor's
Not Rated
Not Rated
AAA
AA+
AA+
AA+
The City's Policy states that not more than 30% of the portfolio shall be invested in any one entity or any one instrument to protect the City from concentration of credit risk, with the following exceptions: negotiable certificates of deposit (30%) and money market mutual funds (20%). In addition, purchases of commercial paper must not be greater than 25% of the value of the portfolio at any time and single issuer holdings no more than 3% per issuer. The City is in compliance with these provisions of the Policy.

Custodial Credit Risk
The California Government Code (Code) requires California banks and savings and loan associations to secure the City's cash deposits by pledging securities as collateral. This Code states that collateral pledged in this manner shall have the effect of perfecting a security interest in such collateral superior to those of a general creditor. Thus, collateral for cash deposits is considered to be held in the City's name.

The market value of pledged securities must equal at least 110% of the City's cash deposits.

California law also allows institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the City's total cash deposits. The City has waived collateral requirements for cash deposits, which are fully insured up to $250,000 by the Federal Deposit Insurance Corporation. The City's cash balances held with financial institutions in excess of the FDIC limit are held in collateralized accounts.
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CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2021

2. CASH AND INVESTMENTS, (continued)
C.

D.

Risk Disclosures, (continued)
The following is a chart of City's investment portfolio:

Amount Percentage of
Investments Invested Investments
Local Agency Investment Fund $ 40,766,702 50.55%
Investment in Section 115 trust 7,983,884 9.90%
Negotiable Certificates of Deposit 17,378,578 21.55%
U.S. Government Obligations 14,518,486 18.00%
Total $ 80,647,650 100.00%
Summary of Investments to Maturity
Investments held in the City Treasury grouped by maturity date at June 30, 2021, are shown below:

Maturity
Current to one year
One to two years
Two to three years
Three to four years
Four to five years
Total
$
$
53,265,298
4,865,237
3,951,905
4,113,938
14,451,272
80,647,650
E. Fair Value Measurements
The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs.

The City has the following recurring fair value measurements as of June 30, 2021:

Investments by Fair Value Level
Negotiable Certificates of Deposit
U.S. Government Obligations
Total investments by fair value
Investments not subject to GASB 72:

Investment in Section 115 trust
Local Agency Investment Fund
Total
Total
$ 17,378,578
14,518,486
31,897,064
7,983,884
40,766,702
$ 80,647,650
-40-
Fair Value Measurement Using
Level 1 Level2
$
14,518,486
$ 14,518,486
$ 17,378,578
$ 17,378,578
$
$
Level3

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2021

3. LOANS RECEIVABLE
A. Fund Financial Statements
As of June 30, 2021 the following loans were outstanding:

Computer Loan Program
Housing Rehabilitation Loan Program
Housing Successor loans
Total
Computer Loan Program
Governmental
Funds
$ 25,601
146,998
1,611,574
$ 1,784,173
Zero interest loans were provided to City employees for purchases of personal computers. Loan payments are deducted from bi-weekly paychecks and are secured by the employees' accrued vacation hours. At June 30, 2021, the outstanding amount due to the City was $25,601.

Housing Rehabilitation Loan Program
Low interest loans were provided to qualified borrowers for financial assistance for improvements to low and moderate income housing. The loans, which are secured by trust deeds on the property, are due upon sale of property or death of the homeowner. At June 30, 2021, the outstanding amount due to the City was $146,998.

Housing Successor Loans
Housing Successor loans in the amount of $1,611,574 consist of low and moderate income housing loans totaling $225,000 for three properties located on Lubbock Avenue and deferred housing setaside funds in the amount of $1,386,574 owed to the Housing Asset Fund by the Successor Agency to the former La Mesa Community Redevelopment Agency.

The low and moderate income housing loans are secured by trust deeds on the individual properties and are payable upon sale or transfer of the property by the original property owner. The deferred housing set-aside funds have been approved as an enforceable obligation of the Successor Agency and will be included on future Recognized Obligation payment Schedules according to the approved repayment plan until such time as the balance is paid in full. -41-

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2021

4. INTERFUND TRANSACTIONS
A. Advances From/To Other Governments
As of June 30, 2021, balances of advances from/advances to were as follows:
...
a,
=~ 0 C:
0 a, ..., E
1/) C:
a, ...
g ~ Governmental Activities:
co 0 ~ c:, General Fund
<( Total
Advances From
Other Governments
Successor
Agency
$ 5,300,000
$ 5,300,000
Total
$ 5,300,000
$ 5,300,000
The advance from the Housing Successor Agency to the City represents the amount owed for the sale of the site of the former police station for the purposes of developing low and moderate income housing. At June 30, 2021, the outstanding balance is $5,300,000.

B. Due To/From Other Funds
lnterfund receivable and payable balances at June 30, 2021 were as follows:
ti) E -c
e §
LL LL
(I) ...
:::, (I)
cii
0 General
Transportation
CIP
Due to Other
Funds
Non-Major
Gowmmental
Funds Total
Fund $ 150,171 $ 1,051,202 $1,201,373
The above amounts represent short-term borrowings from the General Fund for temporary cash shortfalls for the funds as listed above.
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CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2021

4. INTERFUND TRANSACTIONS, (continued)
C. Transfers In and Out
Transfers in and out for the year ended June 30, 2021 were as follows:
...
::,
0 11
'ti Governmental Activities: C
~ General Fund
Miscellaneous Grants
Non-Major Governmental Funds
Business-Type Activities:

Wastewater
Total
General
Fund
$
141,028
1,677,808
1,111,100
$ 2,929,936
Transfers In
Governmental Activities
Non-Major Internal
Transportation Governmental Service
CIP Funds Funds
$ $ 505,400 $ 786,030
1,999 50,451
2,792,196 386,476 148,500
570,100
$ 2,792,196 $ 893,875 $ 11555,081
BusinessType
Activities
Wastewater Total
$ $ 1,291,430
8,630 202,108
5,004,980
1,681,200
$ 8 630 $ 81179,718
Throughout the year, transfers are used to move revenues from the fund with collection authority to the fund with spending authority. This is the case with the following significant transfers:
• $492,184, $168,417, $1,310,119, and $821,476 in TRANSNET, Gas Tax funds, grant funds, and RMRA, respectively, were transferred to the Transportation CIP fund to support capital improvement expenditures;
• $558,600 and $570,100 was transferred from the General Fund and Wastewater fund to the Liability fund to fund anticipated claims;
• $442,900 was transferred from the General Fund to Debt Service funds to pay principal and interest payments as they were due;
• $923,705, $100,000 and $150,000 in Gas Tax funds, RMRA and TRANSNETwas transferred to the General Fund to cover street maintenance activity;
• $1,519,614 from various funds was transferred to the General Fund for support services. -43-

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2021

5. CAPITAL ASSETS
A. Government-Wide Financial Statements
At June 30, 2021 the City's capital assets consisted of the following:

Governmental Business-Type
Activities Activities
Non-depreciable assets:

Land $ 11,398,339 $
Right-of-way 15,905,824
Construction in progress 6,829,444 4,085,143
Total non-depreciable assets 34,133,607 4,085,143
Depreciable assets:

Buildings and improvements 47,783,050
Vehicles and equipment 18,408,454 2,325,850
Infrastructure 205,556,431 49,261,818
Total depreciable assets, at cost 271,747,935 51,587,668 Accumulated Depreciation:

Buildings and improvements (14,134,134)
Vehicles and equipment (11,725,404) (934,708)
Infrastructure (113,860,569) (19,854,077)
Total accumulated depreciation (139,720,107) (20,788,785) Total depreciable assets, net 132,027,828 30,798,883
Total capital assets $ 166,161,435 $ 34,884,026
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Total
$ 11,398,339
15,905,824
10,914,587
38,218,750
47,783,050
20,734,304
254,818,249
323,335,603
(14,134,134)
(12,660,112)
(133,714,646)
(160,508,892)
162,826,711
$ 201,045,461

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2021

5. CAPITAL ASSETS, (continued)
A. Government-Wide Financial Statements, (continued)
The following is a summary of capital assets for governmental activities:

Governmental activities: Balance
June 30, 2020 Additions
Non-depreciable assets:

Land $ 11,272,501 $ 125,838 $
Right-of-way 15,905,824
Construction in progress 3,359,369 4,339,212
Total non-depreciable assets 30,537,694 4,465,050
Depreciable assets:

Buildings and improvements 47,786,299 314,524
Vehicles and equipment 17,820,413 914,539
Infrastructure 205,505,502 55,538
Total depreciable assets, at cost 271,112,214 1,284,601 Accumulated Depreciation
Buildings and improvements (13,469,083) (980,536)
Vehicles and equipment (10,958,669) (1,027,698)
Infrastructure (109,685,848) (4,179,330)
Total accumulated depreciation (134,113,600) (6,187,564) Total depreciable assets, net 136,998,614 (4,902,963)
Total governmental activities $ 167,536,308 $ (437,913) $ Balance
Deletions June 30, 2021
$ 11,398,339
15,905,824
(869,137) 6,829,444
(869,137) 34,133,607
(317,773) 47,783,050
(326,498) 18,408,454
(4,609) 205,556,431
(648,880) 271,747,935
315,485 (14,134,134)
260,963 (11,725,404)
4,609 (113,860,569)
581,057 (139,720,107)
(67,823) 132,027,828
(936,960) $166,161,435
Governmental activities depreciation expense for capital assets for the year ended June 30, 2021 was as follows:

General government $ 216,520
Police 917,706
Fire 482,541
Public works 4,375,836
Community services 185,449
Community development 9,512
Total $ 6,187,564
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CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2021

5. CAPITAL ASSETS, (continued)
A. Government-Wide Financial Statements, (continued)
The following is a summary of capital assets for business-type activities:

Business-Type activities: Balance Balance
June 30, 2020 Additions Deletions June 30, 2021
Non-depreciable assets:

Construction in progress $ 773,032 $ 5,200,666 $ (1,888,555) $ 4,085,143 Total non-depreciable assets 773,032 5,200,666 (1,888,555) 4,085,143 Depreciable assets:

Vehicles and equipment 2,422,129 24,070 (120,349) 2,325,850 Infrastructure 47,487,869 1,792,374 (18,425) 49,261,818 Total depreciable assets, at cost 49,909,998 1,816,444 (138,774) 51,587,668 Accumulated Depreciation:

Vehicles and equipment (862,542) (189,568) 117,402 (934,708) Infrastructure (19,208,318) (664,184) 18,425 (19,854,077) Total accumulated depreciation (20,070,860) (853,752) 135,827 (20,788,785) Total depreciable assets, net 29,839,138 962,692 (2,947) 30,798,883 Total business-type activities $ 30,612,170 $ 6,163,358 $ (1,891,502) $ 34,884,026 Business-type activities depreciation expense for capital assets for the year ended June 30, 2021 was as follows:

Wastewater $ 853,752
Total depreciation $ 853,752
B. Fund Financial Statements
The fund financial statements do not present general government capital assets, but capital assets are shown in the Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide Statement of Net Position.
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CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2021

6. LONG-TERM DEBT
A. Governmental Activities Long-Term Debt
The summary of changes in long-term debt for governmental activities for the year ended June 30, 2021 was as follows:

Bonds payable:
2006 Certificates of participation:

Series A
Series B
Balance
June 30, 2020
$ 1,050,000 $
1,650,000
2016 General obligation refunding bonds 19,290,000
Unamortized bond premium 1,087,905
Additions Deletions
$ (115,000)
(190,000)
(775,000)
(63,995)
Balance
June 30, 2021
$ 935,000
1,460,000
18,515,000
1,023,910
$
Classification
Due Within Due in More
One Year Than One Year
125,000 $ 810,000
205,000 1,255,000
810,000 17,705,000
1,023,910
TransNet Commercial Paper - direct borrowir_---'-1,4_99-'-,9_96 _____ ---'---'--~ (500,004) ----'--- 999,992 ------'- 500,000 ----'-- 499,992 Total $ 24,577,901 _$ __ _ $ (1,643,999) $ 22,933,902 $ 1,640,000 $ 21,293,902 Bonds Payable
2006 Certificates of Participation. Series A and B
On July 27, 2006, the La Mesa Public Financing Authority (The Authority) issued Certificates of Participation, Series 2006A in the amount of $1,830,000 and Series 2006B in the amount of $3, 170,000, bearing interest rates of 4.15%-6.32% with maturity dates from August 1, 2007 to 2027.

The purpose of the issuance was to provide funds to construct a building and related site improvements at the City of La Mesa's Civic Center, to acquire a municipal bond debt service reserve insurance policy and a municipal bond insurance policy for the certificates, and to pay the costs of issuance incurred in connection with the execution and delivery of the certificates. Interest is payable on February 1 and August 1 each year, commencing August 1, 2007.

The City has pledged future post office lease revenue to repay the 2006 Certificates of Participation Series A. Total principal and interest remaining on the Certificates of Participation Series A is $1,126,654 payable through 2027. Total principal and interest remaining on the Certificates of Participation Series Bis $1,672,406 payable through 2027.

Whenever any event of default referred to in the lease happens and continues, the Trustee, as the assignee of the Authority, is authorized under the terms of Lease to exercise any and all remedies available pursuant to the law or granted pursuant to the Lease; provided, however, that notwithstanding anything therein or in the Trust Agreement to the contrary, there shall be no right under any circumstances to accelerate the lease payments or otherwise declare any lease payments not then due or past due to be immediately due and payable. Neither the Authority nor its assignee shall have any right to reenter or re-let the leased premises except following a default under the lease. Following an event of default, the Trustee or its assignee of the Authority, may elect either to terminate the Lease and seek to collect damages from the City or to maintain the Lease in effect and seek to collect the Lease Payments as they become due. The lease further provides that so long as an event of default exists under the lease, the trustee may reenter the leased premises for the purpose of taking possession of any portion of the leased premises and to re-let the lease premises, and in addition, at its option, with or without such entry to terminate the lease as described therein.
-47-

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2021

6. LONG-TERM DEBT, (continued)
A. Governmental Activities Long-Term Debt, (continued)
Bonds Payable, (continued)
2006 Certificates of Participation. Series A and B. continued The outstanding principal balances of Series A and B at June 30, 2021 were $935,000 and $1,460,000 respectively, for a combined balance of $2,395,000.

The annual debt service requirements for the Series A and B Certificates outstanding at June 30, 2021 were as follows:

Year Ending
June 30,
2022
2023
2024
2025
2026
2027
Total
Year Ending
June 30,
2022
2023
2024
2025
2026
2027
Total
2006 Certificates of Participation Series A
Principal
$ 125,000 $
135,000
150,000
160,000
175,000
190,000
$ 935,000 $
Interest Total
55,142 $ 180,142
46,926 181,926
37,920 187,920
28,124 188,124
17,538 192,538
6,004 196,004
191,654 $ 1,126,654 =======
2006 Certificates of Participation Series B
Principal Interest Total
$ 205,000 $ 61,550 $ 266,550
220,000 52,145 272,145
235,000 41,963 276,963
250,000 30,988 280,988
265,000 19,205 284,205
285,000 6,555 291,555
$ 1,460,000 $ 212,406 $ 1,672,406
-48-

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2021

6. LONG-TERM DEBT, (continued)
A. Governmental Activities Long-Term Debt, (continued)
Bonds Payable, {continued)
2016 General Obligation Refunding Bonds
On November 30, 2016, the City issued $21,825,000 in 2016 General Obligation Refunding Bonds for the purpose of refunding the outstanding 2004 General Obligation Bonds, Series A and B. The bonds are general obligation bonds of the City, payable solely from ad valorem property taxes levied on behalf of the City and collected by the County of San Diego. The bonds mature annually each August 1, 2017 through 2036 in amounts ranging from $720,000 to $1,565,000. The bonds bear variable interest rates ranging from 2% to 5%, and are payable semi-annually each February 1 and August 1, commencing February 1, 2017.

In the event of a failure of the City to comply with any provision of the disclosure certificate, the holder or beneficial owner of the bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under the disclosure certificate. A default under the disclosure certificate shall not be deemed and event of default under the indenture, and the sole remedy under this disclosure certificate in the event of any failure of the City to comply with the disclosure certificate shall be an action to compel performance.

No holder or beneficial owner of the bonds may institute such action, suit or proceeding to compel performance unless they shall have first delivered to the City satisfactory written evidence of their status as such, and a written notice of and request to cure such failure, and the City shall have refused to comply therewith within a reasonable time.

The annual requirements for the 2016 General Obligation Refunding Bonds outstanding at June 30, 2021 were as follows:

Year Ending
June 30,
2022
2023
2024
2025
2026
2027 - 2031
2032 - 2036
2037
Total
2016 General Obligation Refunding Bonds
Principal
$ 810,000 $
840,000
890,000
945,000
995,000
5,720,000
7,135,000
1,180,000
$ 18,515,000 $
-49-
Interest Total
766,150 $ 1,576,150
728,950 1,568,950
685,700 1,575,700
639,825 1,584,825
591,325 1,586,325
2,345,274 8,065,274
1,105,525 8,240,525
29,500 1,209,500
6,892,249 $ 25,407,249
=======

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2021

6. LONG-TERM DEBT, (continued)
A. Governmental Activities Long-Term Debt, (continued)
TransNet Commercial Paper- Direct Borrowing
On May 4, 2018, the City entered into a loan agreement with San Diego County Regional Transportation Commission for a $2,000,000 loan for the purpose of financing the West La Mesa Improvements project. The proceeds were funded when the City requested reimbursement of valid expenditures related to this project. The repayment of debt is the first priority on the use of the City's annual TransNet revenues, which are received from SANDAG. Total principal and interest remaining on the loan is $1,026,034 payable through 2023.

The annual debt service requirements for the TransNet Commercial Paper outstanding at June 30, 2021 were as follows:

TransNet Commercial Paper
Year Ending
June 30, Principal Interest Total
2022 $ 500,000 $ 19,271 $ 519,271
2023 499,992 6,771 506,763
Total $ 999,992 $ 26,042 $ 1,026,034
B. Business-Type Activities Long-Term Debt
The summary of changes in long-term debt for business-type activities for the year ended June 30, 2021 was as follows:

Notes payable:

State Re\Oiling Fund Loan
Total
State Revolving Fund Loan
Balance
June 30, 2020 Additions Deletions
Balance
June 30, 2021
Classfficalion
Due Within Due in More
One Year Than One Year
$ 10,116,041 $ 325,887 $ (867,865) $ 9,574,063 $ 900,264 $ 8,673,799 $ 10,116,041 $ 325,887 $ (867,865) $ 9,574,063 $ 900,264 $ 8,673,799 On July 25, 2006, the City entered into an agreement to obtain a low interest federal pass-through loan from the State Water Resources Control Board which would allow the City to borrow up to $14,500,000 at 2.4% from January 7, 2006 through February 1, 2028 for sewer system improvements. An additional $5,000,000 and $7,000,000 was approved for borrowing on November 3, 2015 and July 7, 2020, respectively. At June 30, 2021, the City had borrowed $17,693,719, of which $9,574,063 remains outstanding.
-50-

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2021

6. LONG-TERM DEBT, (continued)

7. B. Business-Type Activities Long-Term Debt (continued) The annual debt service requirements for the State Water Fund Loan outstanding at June 30, 2021 were as follows:

State Revolving Fund Loan
Year Ending June 30, Principal Interest Total
2022 $ 900,264 $ 188,673 $ 1,088,937
2023 918,640 170,297 1,088,937
2024 937,421 151,516 1,088,937
2025 956,616 132,321 1,088,937
2026 976,236 112,701 1,088,937
2027-2031 3,508,650 280,314 3,788,964
2032- 2036 1,077,931 81,206 1,159,137
2037-2041 298,305 6,854 305,159
Total $ 9,574,063 $ 1,123,882 $ 10,697,945

CAPITAL LEASE
The summary of changes in long-term lease for governmental activities for the year ended June 30, 2021 was as follows:

Lease payable:

Balance
June 30, 2020
Pinnacle Public Finance - 2013 $ 102,372 $
Municipal Finance Corp - 2016 303,163
San Diego County Next Gen RCS - 2017 809,596
Additions
Total $ 1,215,131 _s __ _
Pinnacle Public Finance, Inc. - 2013
Deletions
Balance
June 30, 2021
Classification
Due Within Due in More
One Year Than One Year
$ (102,372) $ $ $
(98,472) 204,691 101,032 103,659
(125,823) 683,773 129,333 554,440
$ (326,667) $ 888,464 $ 230,365 $ 658,099
On September 15, 2013, the City entered into a purchase agreement with Pinnacle Public Finance, Inc. to finance the purchase of the Police Department's new CAD (Computer Aided Dispatch) system. The CAD system went live on June 10, 2014. The final payment was made during the fiscal year ended June 30, 2021.
-51-

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2021

7. CAPITAL LEASE (continued)
Municipal Finance Corporation - 2016
On January 22, 2016, the City entered into a purchase option lease agreement with Municipal Finance Corporation in order to acquire a fire pumper from Pierce Manufacturing, Inc. The annual payments on the long-term lease payable as of June 30, 2021 were as follows:

Municipal Finance Corporation - 2016
Year Ending
June 30, Principal Interest Total
2022 $ 101,032 $ 5,322 $ 106,354
2023 103,659 2,695 106,354
Total $ 204,691 $ 8,017 $ 212,708
San Diego County Next Gen RCS - 2017
The San Diego-Imperial County Regional Communications System (RCS) is utilized by the Police, Fire and Public Works Departments for their radio communications. The current system has reached end of life, and the RCS has developed plans for a new "next generation system" to meet the region's needs (NextGen RCS).

On July 12, 2016, the City of La Mesa was notified by San Diego County that a contract for the NextGen RCS system was awarded to Motorola Solutions for $70,065,207. The City of La Mesa's share of this amount is $1,279,649. Our shared infrastructure obligation will be financed by the County of San Diego at an annual interest rate of 2. 79% per year, for a period of ten years, with an annual payment of $148,411 beginning in FY 16-17 and continuing for 10 years until the debt is paid. The annual payments on the long-term lease payable as of June 30, 2021 were as follows:

Year Ending
June 30,
2022
2023
2024
2025
2026
Total
San Diego County Next Gen RCS - 2017
Principal
$ 129,333 $
132,942
136,651
140,464
144,383
$ 683,773 $
-52-
Interest Total
19,078 $ 148,411
15,469 148,411
11,760 148,411
7,947 148,411
4,028 148,411
58,282 $ 742,055 =======

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2021

7. CAPITAL LEASE (continued)
Schedule of property under capital leases by major classes at June 30, 2021:

Governmental Business-Type
Activities Activities Total
Equipment $ 3,788,653 $ $ 3,788,653
Less: accumulated depreciation (1,618,072) (1,618,072)
Total $ 2,170,581 $ $ 2,170,581

8. COMPENSATED ABSENCES
The summary of changes in compensated absences for governmental activities for the year ended June 30, 2021 was as follows:

Classification
Balance Balance Due Within Due In More
June 30, 2020 Additions Deletions June 30, 2021 One Year Than One Year Compensated Absences $ 3,660,728 $ 2,850,593 $ (2,626,195) $ 3,885,126 $ 2,630,000 $ 1,255,126 The funds to be used to liquidate this liability include the General Fund, Housing Rehabilitation, Community Development Block Grant, Downtown Parking, Wastewater, Environmental Services, Workers Compensation Fund, Liability Risk Financing Fund and the Low-Moderate Housing Successor Fund. At June 30, 2021, compensated absences balance consisted of the following:

Vacation pay
Holiday pay
Sick leave
Compensatory time
Total
$ 1,887,797
748,132
993,118
256,079
$ 3,885,126

9. OTHER POST- EMPLOYMENT BENEFITS
Plan Description
The City provides the minimum required employer contribution under the CalPERS Health Plan for eligible retirees and surviving spouses in receipt of a pension benefit from CalPERS. An employee is eligible for this employer contribution provided they are vested in their CalPERS pension benefit and commence payment of their pension benefit within 60 days of retirement with the City. Vesting requires at least 5 years of CalPERS total service. The surviving spouse of an eligible retiree who elected spouse coverage under CalPERS is eligible for the employer contribution upon the death of the retiree.

The scheduled minimum required employer contributions for each eligible retiree under the CalPERS Health Plan are $143 per month per employee in 2021. The City does not issue a financial report for the plan. A separate financial report is not prepared for the Plan. -53-

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2021

9. OTHER POST-EMPLOYMENT BENEFITS, (continued)
Employees Covered
As of the June 30, 2020 actuarial valuation, the following current and former employees were covered by the benefit terms under the Plan:

Active employees
Inactive employees or beneficiaries currently receiving benefits Inactive employees entitled to, but not yet receiving benefits 260
146
Total 406
Contributions
By unanimous vote of the City Council on May 12, 2009, the City adopted pre-funding through the California Employers' Retiree Benefit Trust (CERBT), a GASS eligible trust. The CERBT has an investment policy with an expected long-term rate of return equal to approximately 7.00% for employers fully-funding the annual required contribution each year. For the fiscal year ended June 30, 2021, the City's cash contributions were $485,280 in payments to the trust.

Net OPES Liability
The City's net OPEB liability was measured as of June 30, 2019 based on the following actuarial methods and assumptions:

Actuarial Assumptions
Actuarial Valuation Date
Actuarial cost method
Discount Rate
General Inflation
Mortality, Retirement,
Disability, Termination
Salary increases
Medical Trend
Healthcare Participation
June 30, 2020 Measurement Date
June 30, 2020
Entry age normal

7.00%

2.50%
According to the rates under the 2017 experience
study for the CalPERS Pension plan.

2.75%
Actual for 2020, 6.0% for 2021, decreasing to an
ultimate rate of 5.0% in 2023 and later years
50% of eligible active employees are assumed to
elect medical coverage at retirement.
-54-

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2021

9. OTHER POST- EMPLOYMENT BENEFITS, (continued)
Net OPES Liability (continued)
The long-term expected rate of return on OPEB plan investments was determined using a building - block method in which expected future real rates of return (expected returns, net of OPEB plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table:

Discount Rate
Asset Class Component
Global equity
Global debt securities
Inflation assets
Commodities
REITs
Total
Target Allocation
59%
25%
5%
3%
8%
100%
Long-Term
Expected Real
Rate of Return

5.50%

2.35%

1.50%

1.75%

3.65%
A discount rate of 7.00% was used in the valuation. This discount rate assumes the City continues to fully fund for its retiree health benefits through the CERBT under its investment allocation strategy.

Changes in the OPES Liability
The changes in the net OPEB liability for the Plan are as follows:
(a) (b) (a) - (b) = (c)
Plan
Total OPEB Fiduciary Net OPEB
Liabilitl Net Position Liabili~
Balance at June 30, 2019 (measurement date) $7,440,653 $3,846,371 $3,594,282 Changes recognized for the measurement period:

Service cost 210,776 210,776
Interest 516,097 516,097
Differences between expected and
actual experience (1,494,978) (1,494,978)
Changes of assumptions
Contributions - employer 1,046,550 (1,046,550)
Net investment income 155,315 (155,315)
Benefit payments (566,820) (566,820)
Administrative expense {1,959) 1,959
Net changes {1,334,925) 633,086 {1,968,011)
Balance at June 30, 2020 (measurement date) $6,105,728 $4,479,457 $1,626,271 -55-

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2021

9. OTHER POST- EMPLOYMENT BENEFITS, (continued)
Sensitivity of the Net OPES Liability to Changes in the Discount Rate The following presents the net OPES liability of the City if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 2020:

Net OPEB Liability $
1% Decrease
(6.00%)
2,256,726 $
Current Discount
Rate (7.00%)
1,626,271 $
1%Increase
(8.00%)
1,152,520
Sensitivity of the Net OPES Liability to Changes in the Health Care Cost Trend Rates The following presents the net OPES liability of the City if it were calculated using health care cost trend rates that are one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 2020:

Current Healthcare
1% Decrease Cost Trend Rates 1% Increase
Net OPEB Liability $ 1,002,706 $ 1,626,271 $ 2,332,680
OPES Plan Fiduciary Net Position
CalPERS issues a publicly available CERBT financial report that may be obtained from the CalPERS' website at www.calpers.ca.gov.

Recognition of Deferred Outflows and Deferred Inflows of Resources Gains and losses related to changes in total OPEB liability and fiduciary net position are recognized in OPEB expense systematically over time. Amounts are first recognized in OPEB expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to OPEB and are to be recognized in future OPEB expense. The net difference between projected and actual earnings on OPES plan investments is amortized using the straight-line method over 5 years, while all other amounts are amortized over the expected average remaining service lifetime (EARSL) of plan participants. -56-

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2021

9. OTHER POST- EMPLOYMENT BENEFITS, (continued)
OPES Expense and Deferred Outflows/Inflows of Resources Related to OPES A complete breakdown of the OPEB expense is as follows:

Service cost
Interest on total OPES liability
Projected earnings on OPES plan investments
OPEB plan administrative expense
Current period recognition of deferred outflows (inflows) of resources:

Differences between expected and actual experience in
measurement of the total OPEB liability
Changes of assumptions
Differences between projected and actual earnings on OPEB plan investments
Annual OPEB expense
$
$
210,776
516,097
(285,685)
1,959
(63,182)
(35,371)
9,609
354,203
For the fiscal year ended June 30, 2021, the City recognized OPEB expense of $354,203. As of fiscal year ended June 30, 2021, the City reported deferred inflows and outflows of resources related to OPEB from the following sources:

Net difference between projected and actual
earnings on OPES plan in\estments
Changes of assumptions
Difference between expected and actuarial experience
Contributions to OPES plan subsequent to the measurement date Total
Deferred Outflows
of Resources
$ 90,782
308,782
1,011,671
$ 1,411,235
Deferred Inflows of
Resources
$
106,113
1,328,869
$ 1,434,982
Contributions subsequent to the measurement date of $1,011,671, reported as deferred outflows of resources will be recognized as a reduction of the net OPEB liability in the upcoming fiscal year. Other amounts reported as deferred outflows or inflows of resources related to OPEB will be recognized as expense as follows:

Fiscal Year
Ended June 30
2022
2023
2024
2025
2026
Thereafter
-57-
Deferred
Outflows/ (Inflows)
of Resources
$ (88,942)
(72,916)
(69,092)
(140,035)
(166,109)
(498,324)

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2021

10. OTHER REQUIRED DISCLOSURES
Generally accepted accounting principles require disclosure of certain information concerning unrestricted net position (deficit) and fund balance (deficit).

At June 30, 2021, the following funds had the following deficit fund balances:

Governmental Funds
Transportation CIP
Miscellaneous Grants
Non-Major:

Transportation Improvement
Public Safety Grants
$ (299,217)
(77,922)
(208,361)
(56,167)
The negative fund balance amount represents expenditures incurred before June 30, 2021, which as of the financial statement date and accrual period, were not yet reimbursed.

11. RISK MANAGEMENT
The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The City self-insures against tort claims and workers' compensation exposures and purchases health benefits through the Public Employees' Retirement System.

The City is a member of the Public Entity Risk Management Authority (PERMA) for general liability, workers' compensation, and property risk financing.

Currently, the City has a Workers' Compensation Fund (an internal service fund) to account for and finance its uninsured risk of loss. Under this program, the Workers' Compensation Fund provides financing for up to a maximum of $250,000 for each accident (e.g., occurrence) and each claim for catastrophic illness. The City pools the exposure for claims in excess of the Self-Insured Retentions (S.I.R.s) from the Workers' Compensation Fund to statutory limits and for employers' liability to $5,000,000 limit of liability. Settled claims have not exceeded this commercial coverage in any of the past three years.

All funds of the City participate in the Workers' Compensation program and make payments to the Workers' Compensation Fund based on estimates of the amounts needed to pay prior and current year's claims.

The City also maintains an internal service fund for liability risk financing. Under the PERMA pooled program for general liability, the City's S.I.R. is $50,000 of each claim.

Excess liability financing includes layers of pooling and commercial excess liability insurance. Separate deposits are collected from PERMA members to cover claims between the S.I.R. and $1,000,000.

Additional reinsurance raises the limit of liability to $50,000,000 per occurrence. These deposits are subject to retrospective adjustments. Deposits are accrued based on the ultimate cost of the experience to date from members of PERMA.
-58-

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2021

11. RISK MANAGEMENT, (continued)
The City participates in PERMA's All Risks Property Protection Program, which is underwritten by a casualty insurance company. The annual premiums paid by participating member cities are based upon insured values and deductible levels and are not subject to retroactive adjustments. The City's deductible is $5,000 for all risk, $10,000 for fire trucks and $2,500 for electronic and data processing equipment.

The claim liability of $4,828,978 reported in the Government-Wide Statement of Net Position in accordance with generally accepted accounting principles, which require a liability for claims be reported if information prior to issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of loss can be reasonably estimated.

Changes in claims liability amount for fiscal years 2019, 2020 and 2021 were:

Beginning of Current Year Claims
Fiscal Year and Change in Claims Balance at
Liability Estimates Payments Fiscal Year End
2018- 2019 $ 2,658,326 $ 1,231,469 $ (66,870) $ 3,822,925 2019 - 2020 3,822,925 327,560 (164,342) 3,986,143
2020 - 2021 3,986,143 1,064,751 (221,916) 4,828,978

12. DEFINED BENEFIT PENSION PLANS
A summary of pension plans and related deferred inflows and outflows of resources which reconciles to the Statement of Net Position is as follows:

Net Pension Liability / (Asset)
Deferred Outflows - Pension Related
Deferred Inflows - Pension Related
PERS - Misc
$ 38,467,368
5,437,349
A. General Information about the Pension Plans
Plan Description
PERS - Safety
$ 66,247,833
10,200,330
234,263
PARS
$ (83,581)
155,923
Total
$ 104,631,620
15,793,602
234,263
The Plan is an agent multiple-employer defined benefit pension plan administered by the California Public Employees' Retirement System (CalPERS). A full description of the pension plan regarding number of employees covered, benefit provisions, assumptions (for funding, but not accounting purposes), and membership information are listed in the Plan's June 30, 2019 Annual Actuarial Valuation Report (funding valuation). Details of the benefits provided can be obtained in Appendix B of the actuarial valuation report. This report and Cal PERS' audited financial statements are publicly available reports that can be obtained at CalPERS' website, at www.calpers.ca.gov. -59-

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2021

12. DEFINED BENEFIT PENSION PLANS, (continued)
A. General Information about the Pension Plans, (continued) Benefits Provided
CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 5 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees' Retirement Law.

The Plan operates under the provIsIons of the California Public Employees' Retirement Law (PERL), the California Public Employees' Pension Reform Act of 2013 (PEPRA), and the regulations, procedures and policies adopted by the CalPERS Board of Administration. The Plan's authority to establish and amend the benefit terms are set by the PERL and PEPRA, and may be amended by the California state legislature and in some cases require approval by the CalPERS Board.

The Plan's provisions and benefits in effect at June 30, 2021 are summarized as follows:

Hire Date
Benefit formula
Benefit \esting schedule
Benefit payments
Retirement age
Required employer contribution rates
Hire Date
Benefit formula
Benefit \esting schedule
Benefit payments
Retirement age
Required employer contribution rates
Prior to
January 1, 2011

3.0%@60
5 years of seruce
monthly for life
50-60

12.023%
Prior to
January 1, 2011

3.0% @50
5 years of seruce
monthly for life
50 20.685%
-60-
Miscellaneous
On or after
January 1, 2011
And prior to
January 1, 2013

2.5%@55
5 years of seNce
monthly for life
50-55

12.023%
Safety
On or after
January 1, 2011
And prior to
January 1, 2013

3.0%@55
5 years of seNce
monthly for life
50 20.685%
On or after
January 1, 2013

2.0%@62
5 years of seNce
monthly for life
52-62

12.023%
On or after
January 1, 2013

2.7%@57
5 years of seNce
monthly for life
50 20.685%

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2021

12. DEFINED BENEFIT PENSION PLANS, (continued)
A. General Information about the Pension Plans, (continued) Employees Covered
At June 30, 2019, (valuation date) the following employees were covered by the benefit terms:

Inactive employees or beneficiaries
currently receiving benefits
Inactive employees entitled to but
not yet receil,ing benefits
Active employees
Total
Contributions
Miscellaneous
263
191
148
602
Safety
200
63 107
370
Section 20814(c) of the California Public Employees' Retirement Law (PERL) requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through CalPERS' annual actuarial valuation process. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The employer is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. Employer contribution rates may change if plan contracts are amended. Payments made by the employer to satisfy contribution requirements that are identified by the pension plan terms as plan member contribution requirements are classified as plan member contributions. Employer Contributions to the Plan for the fiscal year ended June 30, 2021 for the miscellaneous and safety plans were $4,230,939 and $6,493,777 respectively.

B. Net Pension Liability
The City's net pension liability for each Plan is measured as the total pension liability, less the pension plan's fiduciary net position. The net pension liability of each of the Plans is measured as of June 30, 2020, using an annual actuarial valuation as of June 30, 2019 rolled forward to June 30, 2020 using standard update procedures. A summary of principal assumptions and methods used to determine the net pension liability is as follows.
-61-

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2021

12. DEFINED BENEFIT PENSION PLANS, (continued)
B. Net Pension Liability, (continued)
Actuarial Methods and Assumptions Used to Determine Total Pension Liability Valuation Date
Measurement Date
Actuarial Cost Method
Asset Valuation Method
Actuarial Assumptions
Discount Rate
Inflation
Salary Increases <
1 l
Mortality Rate Table <
2 l
Post Retirement Benefit Increase
Miscellaneous
June 30, 2019
June 30, 2020
Entry Age Normal
Market Value of Assets

7.15%

2.50%
Varies by Entry Age and Seruce
Derived using CALPERS'
membership data for all Funds
The lesser of contract COLA or
Safety
June 30, 2019
June 30, 2020
Entry Age Normal
Actuarial Value of Assets

7.15%

2.50%
Varies by Entry Age and Seruce
Derived using CALPERS'
membership data for all Funds
The lesser of contract COLA or

2.50% until Purchasing Power 2.50% until Purchasing Power Protection Allowance floor on Protection Allowance floor on purchasing power applies, 2.50% purchasing power applies, 2.50% thereafter. thereafter.
(1) The mortality table used was developed based on CalPERS' specific data. The probabilities of mortality are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015. Pre-retirement and Post-retirement mortality rates include 15 years of projected mortality improvement using 90% of Scale MP-2016 published by the Society of Actuaries. For more details on this table, please refer to the CalPERS Experience Study and Review of Actuarial All other actuarial assumptions used in the June 30, 2019 valuation were based on the results of an actuarial experience study for the period from 1997 to 2015, including updates to salary increase, mortality and retirement rates. The Experience Study report can be obtained at CalPERS' website, at www.calpers.ca.gov.

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

In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows. Using historical returns of all the funds' asset classes, expected compound (geometric) returns were calculated over the short-term (first 1 0 years) and the long-term (11 + years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the rounded single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equal to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses.
-62-

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2021

12. DEFINED BENEFIT PENSION PLANS, (continued)
B. Net Pension Liability, (continued)
Long-term Expected Rate of Return (continued)
The expected real rates of return by asset class are as follows:

Current Target Real Return
Asset Class1 Allocation Years 1 - 102
Global equity 50.0% 4.80%
Fixed income 28.0% 1.00%
Inflation assets 0.77%
Private equity 8.0% 6.30%
Real assets 13.0% 3.75%
Liquidity 1.0%
Real Return
Years 11+3

5.98%

2.62%

1.81%

7.23%

4.93%
(0.92%)
1 In the System's CAFR, fixed income is included in global debt securities; liquidity is inclued in short-term in\A9stments; inflation assets are inclued in both global equity securities and global 2 An expected inflation of 2.0% used for this period
3 An expected inflation of 2.92% used for this period
Change of Assumptions
The Plan adopted a new amortization policy effective with the 2019 actuarial valuation. The new amortization policy shortens the period over which actuarial gains and losses are amortized from 30 years to 20 years with the payments computed as a level dollar amount. In addition, the new policy does not utilize a five-year ramp-up and ramp-down on UAL bases attributable to assumption changes and non-investment gains/losses. The new policy also does not utilize a five-year rampdown on investment gains/losses. These changes apply only to new UAL bases established on or after June 30, 2019.

Discount Rate
The discount rate used to measure the total pension liability was 7.15%. 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. -63-

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2021

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

Investments are reported at fair value.

C. Changes in Net Pension Liability
The following tables show the changes in net pension liability recognized over the measurement period for each plan.

Miscellaneous Plan:

Balance at: 6/30/2019 (VD)
Changes Recognized for the
Measurement Period
• Service Cost
• Interest on the Total Pension
Liability
• Differences between Expected and
Actual Experience
• Changes of Assumptions
• Net plan to plan resource mo1.ement
• Contributions from the Employer
• Contributions from the Employee
• Net ln1.estment Income
• Benefit Payments, including
Refunds of Employee Contributions
• Administrath.e Expense
• Other miscellaneous expense
Net Change during 2019-20
Balance at: 6/30/2020 (MD)
$
$
Valuation Date (VD), Measurement Date (MD).

Total Pension
Liability
(a)
116,764,166
1,821,665
8,219,050
507,760
(6,462,046)
4,086,429
120,850,595
-64-
Increases (Decreases)
Plan Fiduciary Net Pension
Net Position Liability
(b) (c)=(a)-(b)
$ 80,264,894 $ 36,499,272
1,821,665
8,219,050
507,760
3,871,245 (3,871,245)
790,692 (790,692)
4,031,596 (4,031,596)
(6,462,046)
(113,154) 113,154
2,118,333 1,968,096
$ 82,383,227 $ 38,467,368

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2021

12. DEFINED BENEFIT PENSION PLANS, (continued)
C. Changes in Net Pension Liability, (continued)
Safety Plan:

Increases (Decreases)
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability
(a) (b) (c)=(a)-(b)
Balance at: 6/30/2019 (VD) $ 189,353,450 $ 127,382,228 $ 61,971,222 Changes Recognized for the
Measurement Period
• Seniice Cost 3,248,296 3,248,296
• Interest on the Total Pension Liability 13,344,226 13,344,226 • Differences between Expected and
Actual Experience 926,691 926,691
• Changes of Assumptions
• Net plan to plan resource mo\ement
• Contributions from the Employer 5,934,636 (5,934,636) • Contributions from the Employee 1,191,676 (1,191,676) • Net ln\estment Income 6,295,868 (6,295,868)
• Benefit Payments, including Refunds
of Employee Contributions (10,543,526) (10,543,526)
• Administrati\e Expense (179,578) 179,578
• Other miscellaneous expense
Net Change during 2019-20 6,975,687 2,699,076 4,276,611 Balance at: 6/30/2020 (MD) $ 196,329,137 $ 130,081,304 $ 66,247,833 Valuation Date (VD), Measurement Date (MD).

Sensitivit"t. of the Net Pension Liabi/it"t_ to Changes in the Discount Rate The following presents the net pension liability for each Plan as of the measurement date, calculated using the discount rate of 7 .15 percent, as well as what the net pension liability would be if it were calculated using a discount rate that is 1 percentage-point lower (6.15 percent) or 1 percentage-point higher (8.15 percent) than the current rate:

Miscellaneous Plan's
Net Pension Liability
Safety Plan's Net
Pension Liability
Discount Rate - 1 %
(6.15%)
$ 53,035,597
92,451,505
-65-
Current Discount
Rate (7.15%)
$ 38,467,368
66,247,833
Discount Rate + 1 %
(8.15%)
$ 26,314,219
44,739,892

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2021

12. DEFINED BENEFIT PENSION PLANS, (continued)
C. Changes in Net Pension Liability, (continued)
Subsequent Events
There were no subsequent events that would materially affect the results presented in this disclosure.

Amortization of Deferred Outflows and Deferred Inflows of Resources Under GASB 68, gains and losses related to changes in total pension liability and fiduciary net position are recognized in pension expense systematically over time.

The first amortized amounts are recognized in pension expense for the year the gain or loss occurs.

The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to pensions and are to be recognized in future pension expense.

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

Difference between projected 5 year straight-line amortization and actual earnings
All other amounts Straight-line amortization over the expected average remaining service lives (EARSL) of all members that
are provided with benefits (active, inactive and retired) as of the beginning of the measurement period
D. Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions
As of the start of the measurement period (July 1, 2019), the net pension liability for the Miscellaneous and Safety Plans is $36,499,272 and $61,971,222, respectively.

For the measurement period ending June 30, 2020 (the measurement date), the City of La Mesa incurred a pension expense of $5,273,297 and $10,761,211 for the Miscellaneous and Safety Plans, respectively. A complete breakdown of the pension expense is as follows:
-66-

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2021

12. DEFINED BENEFIT PENSION PLANS, (continued)
D. Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions, (continued)
Miscellaneous Plan:

Description
Sen.ice Cost
Interest on the Total Pension Liability
Recognized Differences between Expected and Actual Experience Recognized Changes in Assumptions
Net Plan to Plan Resource Movement
Employee Contributions
Projected Earnings on Pension Plan Investments
Recognized Differences between Projected and Actual Earnings on Plan Investments Administrative Expense
Other Miscellaneous Expense
Total Pension Expense
Safety Plan:

Description
Sen.ice Cost
Interest on the Total Pension Liability
Recognized Differences between Expected and Actual Experience Recognized Changes in Assumptions
Net Plan to Plan Resource Movement
Employee Contributions
Projected Earnings on Pension Plan Investments
Recognized Differences between Projected and Actual Earnings on Plan Investments Administrative Expense
Other Miscellaneous Expense
Total Pension Expense
-67-
Amount
$ 1,821,665
8,219,050
1,083,002
(132,237)
(790,692)
(5,661,542)
620,897
113,154
$ 5,273,297
Amount
$ 3,248,296
13,344,226
1,297,978
1,823,903
(1,191,676)
(8,978,555)
1,037,461
179,578
$ 10,761,211

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2021

12. DEFINED BENEFIT PENSION PLANS, (continued)
D. Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions, (continued)
As of June 30, 2021, the City of La Mesa has deferred outflows and deferred inflows of resources related to pensions as follows:

Miscellaneous Plan:

Deferred Outflows Deferred Inflows
of Resources of Resources
Differences between Expected and
Actual Experience $ 626,269 $
Changes of Assumptions
Net Difference between Projected and
Actual Earnings on Pension Plan
ln\estments 580,141
Pension Contributions Subsequent to
Measurement Date 4,230,939
Total $ 5,437,349 $
Safety Plan:

Deferred Outflows Deferred Inflows
of Resources of Resources
Differences between Expected and
Actual Experience $ 2,710,402 $
Changes of Assumptions 234,263
Net Difference between P rejected and
Actual Earnings on Pension Plan
ln\estments 996,151
Pension Contributions Subsequent to
Measurement Date 6,493,777
Total $ 10,200,330 $ 234,263
These amounts above are net of outflows and inflows recognized in the 2019-2020 measurement period expense. Contributions subsequent to the measurement date of $4,230,939 and $6,493,777 for the Miscellaneous and Safety Plans respectively, reported as deferred outflows of resources will be recognized as a reduction of the net pension liability in the upcoming fiscal year. Other amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recognized in future pension expense as follows:
-68-

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2021

12. DEFINED BENEFIT PENSION PLANS, {continued)
D. Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions, (continued)
Miscellaneous Plan:

Safety Plan:

Measurement Period
Ended June 30:
2021
2022
2023
2024
2025
Thereafter
Measurement Period
Ended June 30:
2021
2022
2023
2024
2025
Thereafter
E. Payable to the Pension Plan
Deferred
Outflows/(lnflows) of
Resources
$ 156,075
316,800
407,545
325,990
Deferred
Outflows/(lnflows) of
Resources
$ 931,470
1,056,472
947,809
536,539
At June 30, 2021, the City of La Mesa reported a payable of $0 for the outstanding amount of contributions to the pension plans required for the year ended June 30, 2021.

13. RETIREMENT ENHANCEMENT PLAN
A. PARS Retirement Enhancement Plan
Plan Description
The plan is an enhanced agent pension plan administered, an agent multiple employer plan, by Public Agency Retirement Services (PARS). The plan enhancement was designed to provide a retirement factor of 3.0% at 60. At the time the plan was implemented, the CalPERS benefit only extended to 2.0% at 55. The plan was closed on January 13, 2006 when employees voted to change to the 3.0% at 60 benefit formula through CalPERS. At this time the nature of the plan changed and the participants were divided into three groups, those that were already retired and receiving the defined benefit of the enhancement plan, those that are currently inactive and will not receive a defined benefit payment but do have their contributions set aside and available at retirement, and one active employee.
-69-

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2021

13. RETIREMENT ENHANCEMENT PLAN, (continued)
A. PARS Retirement Enhancement Plan, (continued)
Benefits Provided
The benefit provided by PARS is equal to a percentage of the highest pay multiplied by years of service, with the percentage varying by retirement age based on a modified 3.0% target offset by CalPERS 3.0% at 60 formula for current actives. There is only one active participant and twenty three former employees who retired with PARS or are currently considered inactive. Benefits are increased by a 2% annual COLA after retirement. The plan has been closed to new entrants since January 7, 2006. Employees that elected to change over to the CalPERS 3.0% at 60 formula will receive their contributions made to the plan in a lump sum payment upon retirement.

The Plan's provisions and benefits in effect at June 30, 2020, (measurement date) are summarized as follows:

Hire Date
Benefit fom1ula
Benefit 1estlng schedule
Benefit payments
Retirement age
Monthly benefits, as a % of eligible compensation
combined with CalPERS
Required employee contribution rates
Required employer contribution rates
Employees Covered
Group I
Terminate before
January 13, 2006
Modified 3.0% @ 60
City CalPERS Sen.ice
monthly for life--0ffset by
CalPERS Benefit at Retirement
55-60

2.5%-3.0%
NIA
Closed group-Normal Cost
Group II
lnact11e employees
Not yet retired
Closed Plan
Vested
Accumulated Contributions
55-60
NIA
NIA
Closed Program
Group Ill
Act11e
Employee
Modified 3.0% @ 60
City CaJPERS Sen.ice
monthly for 1ife--0ffset by
CalPERS Benefit at Retirement
55-60

2.7%-3.0%

1.5%
Closed group-Normal Cost
At January 1, 2019 (valuation date), the following employees were covered by the benefit terms:

Contributions
lnacti1.e employees or beneficiaries
currently receh,;ng benefits
lnacti1.e employees entitled to but
not yet recei\.ing benefits
Acti1.e employees
Total
PARS
18 3
0 21
The annual contribution for the PARS plan is determined on an actuarial basis. For the measurement period ended June 30, 2020 (the measurement date), the active employee contribution rate for the plan is 1.5% of annual pay. There are, however, no longer any active employees under this plan. The employer contributes an amount determined by an actuarial study performed at least every two years as long as the Plan exists. This is a closed plan. -70-

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2021

13. RETIREMENT ENHANCEMENT PLAN, (continued)
A. PARS Retirement Enhancement Plan, (continued)
Contributions (continued)
The City's net pension liability for the Plan is measured as the total pension liability, less the pension plan's fiduciary net position. The net pension liability of the Plan is measured as of June 30, 2020, using an annual actuarial valuation as of January 1, 2019 rolled forward to June 30, 2020 using standard update procedures. A summary of principal assumptions and methods used to determine the net pension liability is as follows.

B. Net Pension Liability
Actuarial Methods and Assumptions Used to Determine Total Pension Uabilitv For the measurement period ended June 30, 2020 (the measurement date), the total pension liability was determined by rolling forward the January 1, 2019 total pension liability. The June 30, 2019 and June 30, 2020 total pension liabilities were based on the following actuarial methods and assumptions:

Valuation Date
Measurement Date
Actuarial Cost Method
Asset Valuation Method
Actuarial Assumptions
Discount Rate
Inflation
Mortality Rate Table
Discount Rate
January 1, 2019
June 30, 2020
PARS
Entry Age Normal, Level% of Pay
Investment gains and losses spread over
5-year rolling period

6.00%

2.75%
CalPERS 1997 - 2015 experience study
The discount rate used to measure the total pension liability was 6.00%. There has been no change since the measurement date. The City chose a Moderate Risk Investment Strategy when setting up this plan. The current 6.00% discount rate is adequate and the use of the municipal bond rate calculation is not necessary. The long-term expected discount rate of 6.50% is applied to the plan.

Administrative expenses are expected to be 0.6% of assets, this is added to the discount rate bringing the Expected Long-Term Net Rate of Return to 6.0%.

According to Paragraph 30 of Statement 68, the long-term discount rate should be determined without reduction for pension plan administrative expense. The 6.5% investment return assumption used in this accounting valuation is net of administrative expenses. Administrative expenses are assumed to be 0.6% of assets. An investment return excluding administrative expenses would have been 6.56%. Using this lower discount rate has resulted in a slightly higher total pension liability and net pension liability. This difference was deemed immaterial to the plan. Refer to the sensitivity of the net pension liability to changes in the discount rate section of this note, which provides information on the sensitivity of the net pension liability to changes in the discount rate. -71-

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2021

13. RETIREMENT ENHANCEMENT PLAN, (continued)
B. Net Pension Liability, (continued)
Discount Rate (continued)
The following table reflects long-term expected real rate of return by asset class. Approximate 10- year geometric real rates of return provided by the CalPERS' investment advisors in May 2010.

These geometric rates of return are net of administrative expenses.

PARS Moderate lnwstment Policy
Global Equity
Fixed Income
REITs
Cash
Assumed Long-Term Rate of Inflation
Expected Long-Tern Net Rate of Return, Rounded
Pension Plan Fiduciary Net Position
Target
Allocation
PARSModerate

48.25%

45.00%

1.75%

5.00%
Expected
Real
Return

4.82%

1.47%

3.76%

0.06%

2.75%

6.00%
Information about the pension plan's assets, deferred outflows of resources, liabilities, deferred inflows of resources, and fiduciary net position are presented in the City's GASB 68 Employer Accounting Information report. The plan's fiduciary net position and additions to/deductions from the plan's fiduciary net position have been determined on the same basis used by the pension plan, which is the economic resources measurement focus and the accrual basis of accounting. Benefits and refunds are recognized when due and payable in accordance with the terms of each plan.

Investments are reported at fair value.
-72-

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2021

13. RETIREMENT ENHANCEMENT PLAN, (continued)
C. Changes in the Net Pension Liability
The following table shows the changes in net pension liability recognized over the measurement period.

Increases (Decreases)
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability /(Asset)
(a) (b) (c)=(a)-(b)
Balance at 6/30/2019 (MD) $ 2,466,279 $ 2,468,940 $ (2,661) Changes Recognized for the
Measurement Period
• Service Cost
• Interest on the Total Pension
Liability 142,093 142,093
• Changes of Benefit Terms
• Differences between Expected and
Actual Experience
• Changes of Assumptions
• Contributions from the Employer 125,000 (125,000)
• Contributions from the Employee
• Net Investment Income 106,642 (106,642)
• Benefit Payments, including
Refunds of Employee Contributions. (196,128) (196,128)
• Administrative Expenses (8,629) 8,629
Net Change during 2019-20 (54,035) 26,885 (80,920)
Balance at: 6/30/2020 (MD) $ 2,412,244 $ 2,495,825 $ (83,581) Measurement Date (MD)
Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the net pension liability of the Plan as of the measurement date, calculated using the discount rate of 6.00 percent, as well as what the net pension liability would be if it were calculated using a discount rate that is 1 percentage-point lower (5.00 percent) or 1 percentagepoint higher (7.00 percent) than the current rate:

PARS Plan's Net Pension
Discount Rate - 1 %
(5.00%)
Liability/(Asset) $ 129,083
-73-
Current Discount
Rate (6.00%)
$ (83,581)
Discount Rate + 1 %
(7.00%)
$ (267,627)

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2021

13. RETIREMENT ENHANCEMENT PLAN, (continued)
C. Changes in the Net Pension Liability, (continued)
Subsequent Events
There were no subsequent events that would materially affect the results presented in this disclosure.

Recognition of Gains and Losses
Under GASB 68, gains and losses related to changes in total pension liability and fiduciary net position are recognized in pension expense systematically over time. The first amortized amounts are recognized in pension expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to pensions and are to be recognized in future pension expense.

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

Difference between
projected and
actual earnings
All other amounts
5 year straight-line amortization
Straight-line amortization over the average
expected remaining service lives of all
members that are provided with benefits
(active, inactive and retired) as of the
beginning of the measurement period
The expected average remaining service lifetime (EARSL) is calculated by dividing the total future service years by the total number of plan participants (active, inactive, and retired).

The EARSL for the Plan for the 2017-18 measurement period is 0.0 years, which was obtained by dividing the total service years of 0 (the sum of the remaining service lifetimes of the active employee) by 23 (the total number of participants: active, inactive, and retired). The reason the EARSL is 0 is that this is a closed plan and there are no active employees with no remaining service life. The last active employee left the City in fiscal year 2018. There are 21 total covered employees. Inactive employees and retirees have remaining service lifetimes equal to 0. Total future service is based on the members' probability of decrementing due to an event other than receiving a cash refund.

As of the start of the measurement period (July 1, 2018), the net pension asset is $2,661.

For the measurement period ending June 30, 2020 (the measurement date), the City of La Mesa incurred pension expense of $28,519 for the Plan. A complete breakdown of the pension income is as follows:
-74-

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2021

13. RETIREMENT ENHANCEMENT PLAN, (continued)
D. Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions
Description
Senfoe Cost
Interest on the Total Pension Liability
Projected Earnings on lm.estments
Employee Contributions
Administrati"l.e Expenses
Experience
Assumptions
Asset returns
$
Amount
142,093
(144,190)
8,629
21,987
Total Pension Expense (Income) $ 28,519
As of June 30, 2021, the City of La Mesa has deferred outflows and deferred inflows of resources related to pensions as follows:

Net Difference between Projected and
Actual Earnings on Pension Plan
Investments
Pension Contributions Subsequent to
Measurement Date
Total
Deferred Outflows
of Resources
$ 30,923
125,000
$ 155,923
$
$
Deferred Inflows
of Resources
These amounts above are net of outflows and inflows recognized in the 2019-2020 measurement period expense. Contributions subsequent to the measurement date of $125,000 reported as deferred outflows of resources will be recognized as a reduction of the net pension liability in the upcoming fiscal year. Other amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recognized in future pension expense as follows:

E. Payable to the Pension Plan
Fiscal Year
Ended June 30:
2022
2023
2024
2025
2026
Thereafter
Deferred
Outflows/(lnflows) of
Resources
$ 2,987
11,560
8,868
7,508
At June 30, 2021, the City of La Mesa reported a payable of $0 for the outstanding amount of contributions to the pension plan required for the year ended June 30, 2021. -75-

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2021

14. COMMITMENTS AND CONTINGENCIES
Lawsuits in the Normal Course of Business
The City is presently involved in certain matters of litigation that have arisen in the normal course of conducting City business. City management believes, based upon consultation with the City Attorney, that these cases, in the aggregate, are not expected to result in a material adverse financial impact on the City. Additionally, City management believes that the City's insurance programs are sufficient to cover any potential losses should an unfavorable outcome materialize.

15. RELATED PARTY TRANSACTIONS
On November 25, 2008, the City entered into a Purchase and Sale Agreement with the Redevelopment Agency to sell certain real property located at 8181 Allison Avenue, La Mesa, California at the appraised value of $8,350,000 for the purposes of increasing, improving and preserving the community's supply of housing available at affordable cost to persons and families of low or moderate income. The Agency made an initial payment of $1,000,000 at closing and issued a promissory note to the City for $7,350,000.

The outstanding balance was transferred from the Agency to the Successor Agency on February 1, 2012 as part of the dissolution of redevelopment. At June 30, 2021, the outstanding balance of the advances from the City to the Successor Agency relating to this transaction was $5,300,000.

On August 23, 2012, the City of La Mesa acting as Successor Agency filed the Recognized Obligation Payment Schedule (ROPS Ill) for the January through June 2013 time period. As it had been for all previous ROPS, included on the ROPS Ill was the outstanding loan balance ($5,300,000 at June 30, 2012) for the Police Station Land Sale between the General Fund and the Successor Agency and the related annual debt service ($750,000 per year). The Department of Finance denied the debt on the ROPS Ill as an enforceable obligation, despite approving it on all previous ROPS, stating:

HSC section 34171 (d) defines enforceable obligations. Based on our review and application of the law, Item No.5- a loan agreement between the City of La Mesa (City) and the Agency in the amount of $5.3 million is not an enforceable obligation. The loan was used to purchase the land under the police station. HSC section 34171 (d) (2) states that agreements between the City and the Agency are not enforceable.

The City requested a Meet and Confer with the Department of Finance, which was held on November 21, 2012. On December 19, 2012, the City received a determination from the Department of Finance that upheld the original determination to deny both the outstanding loan balance and related annual debt service as enforceable obligations. However, on December 7, 2017, the Oversight Board for the Successor Agency approved a repayment schedule in accordance with the maximum repayment amounts specified in the Dissolution Law including H&S Code Section 34191.4(b)(3) until the loan is repaid in full. On January 23, 2018, the Department of Finance issued a Determination Letter, approving the loan balance of $5,300,000. Repayments of this loan will begin after other Deferrals listed on the ROPS are repaid.
-76-

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2021

16. SUCCESSOR AGENCY
On December 29, 2011, the California Supreme Court upheld Assembly Bill 1X 26 ("the Bill") that provides for the dissolution of all redevelopment agencies in the State of California. This action impacted the reporting entity of the City of La Mesa that previously had reported a redevelopment agency within the reporting entity of the City as a blended component unit.

In accordance with the Bill, on January 10, 2012, the City Council elected to become the Successor Agency for the former redevelopment agency in accordance with the Bill as part of City resolution. The Successor Agency is subject to the control of the oversight board and remaining assets can only be used to pay enforceable obligations in existence at the date of dissolution of the redevelopment agency (including the completion of any unfinished projects that were subject to legally enforceable contractual commitments).

In future fiscal years, successor agencies will only be allocated revenue in the amount that is necessary to pay the estimated annual installment payments on enforceable obligations of the former redevelopment agency until all enforceable obligations of the prior redevelopment agency have been paid in full and all assets have been liquidated.

17. SUCCESSOR AGENCY LONG-TERM DEBT
In accordance with the provisions of the Bill and the California Supreme Court's decision to uphold the Bill, the obligations of the former redevelopment agency became vested with the funds established for the successor agency upon the date of dissolution, February 1, 2012. Former tax increment revenues pledged to fund the debts of the former redevelopment agency will be distributed to the Successor Agency subject to the reapportionment of such revenues as provided by the Bill.

The debt of the Successor Agency as of June 30, 2021 was as follows:

Bonds payable:
1998-1 AD impro1.ement bonds
Total
Balance
June 30, 2020 Additions
$ 1,810,000 ....,:$ __ _
$ 1,810,000 _$ __ _
1998-1 AD Improvement Bonds
Deletions
Balance
June 30, 2021
Classification
Due Within Due in More
One Year Than One Year
$ (415,000) $ 1,395,000 $ 440,000 $ 955,000
$ (415,000) $ 1,395,000 $ 440,000 $ 955,000
On June 24, 1998, the City issued Assessment District No. 1998-1 Limited Obligation Improvement Bonds in the amount of $6,825,000 bearing interest rates of 4.25-5.60% with maturity dates from September 2, 1999 to 2023. The Bonds were issued to provide funding for the acquisition of certain storm drains, surface improvements, rights-of-way associated with the improvements, to pay the costs of issuance and to establish a Reserve Fund. Interest is payable on March 2 and September 2 each year commencing March 2, 1999. The outstanding balance as of June 30, 2021 was $1,395,000. The Successor Agency has pledged a portion of future property tax increment revenue to repay the Alvarado Creek AD 1998-1 Improvement Bonds. Total principal and interest remaining on the bonds is $1,518,195 payable through 2024. -77-

CITY OF LA MESA
Notes to the Basic Financial Statements
For the Year Ended June 30, 2021

17. SUCCESSOR AGENCY LONG-TERM DEBT, (continued)
The annual debt service requirements for the Bonds outstanding at June 30, 2021 were as follows:
1998-1 AD Improvement Bonds
Year Ending
June 30, Principal
2022 $ 440,000
2023 465,000
2024 490,000
Total $ 1,395,000

18. RISK, UNCERTAINTIES & CONTINGENCIES
Grants
Interest
$ 67,563
41,544
14,088
$ 123,195
Total
$ 507,563
506,544
504,088
$ 1,518,195
Amounts received or receivable from grant agencies are subject to audit and adjustment by granter agencies. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures that may be disallowed by the granter cannot be determined at this time, although the government expects such amounts, if any, to be immaterial.

Successor Agency
Deductions (expenses) incurred by the Successor Agency for the year ended June 30, 2021 (and subsequent years in which the Successor Agency is in operation) are subject to review by various State agencies and the County in which the Successor Agency resides. If any expenses incurred by the Successor Agency are disallowed by the State agencies or County, the City, acting as the Successor Agency could be liable for the repayment of the disallowed costs from either its own funds or by the State withholding remittances normally paid to the City. The amount, if any, of expenses that may be disallowed by the State agencies or County cannot be determined at this time, although the Successor Agency expects such amounts, if any, to be immaterial.

In October 2014, the City received a letter from the State Controller's Office stating that the City's general government received an unallowable transfer of $2,409,056 in assets from the then RDA. The State Controller's Office is requesting that the unallowable transfers be returned to the now Successor Agency.

The City continues to encumber the funds at June 30, 2021 and plans to pay off the demand.

19. SUBSEQUENT EVENT
On March 11, 2021, HR 1319, the American Rescue Plan Act of 2021 (ARPA), was signed into law.

ARPA was designed to provide assistance to individuals, businesses and, state and local governments to assist in the economic recovery from the ongoing COVID-19 pandemic. The City of La Mesa was granted an allocation of $10,826,584, delivered in two tranches of $5,413,292 in June 2021 and June 2022. The qualified use of these funds includes public safety, infrastructure, and restoration of services to pre-pandemic levels.
-78-

REQUIRED SUPPLEMENTARY INFORMATION

CITY OF LA MESA
Required Supplementary Information
Budgetary Information
For the Year Ended June 30, 2021
The City follows these procedures in establishing the budgetary data reflected in the financial statements:
• The biennial budget adopted by the City Council provides for the general operation of the City. It includes proposed expenditures and the means of financing them. • The City Council approves total budgeted appropriations and any amendments to appropriations throughout the year. All transfers between funds, departments and/or activities shall be made by the City Council except that the City Manager may, on his own initiative and without prior approval of the City Council, transfer between budget accounts within a single department or activity to any other account or appropriation, or to the reserve, amounts determined to be in excess of actual requirements.

Budget figures used in the financial statements are the final adjusted amounts. • Formal budgetary integration is employed as a management control device during the year.

Commitments for materials and services, such as purchase orders and contracts, are recorded as encumbrances to assist in controlling expenditures.
• Budgets for the General and Special Revenue Funds are adopted on a basis substantially consistent with generally accepted accounting principles in the United States (GAAP). Accordingly, actual revenues and expenditures can be compared with related budgetary amounts without any significant reconciling items. No budgetary comparisons are presented for the Debt Service and Capital Projects Funds since no "annual" budget is adopted for these funds. No budgetary comparisons are presented for proprietary fund types, as the City is not legally required to adopt a budget for these types of funds. -79-

CITY OF LA MESA
Required Supplementary Information
Budgetary Comparison Schedule - General Fund
For the Year Ended June 30, 2021
The following is a budget comparison schedule for the General Fund.

Budgeted Amounts
Original Final
Fund Balances- Beginning $ 47,744,280 $47,744,280
Resources (inflows):

Property taxes 15,918,670 15,918,670
Other taxes 24,296,540 24,296,540
Licenses and permits 1,359,100 1,359,100
Fines and forfeitures 428,800 428,800
Use of money and property 1,467,600 1,467,600
Intergovernmental 1,037,400 1,037,400
Charges for sen.foes 2,291,350 2,291,350
Other revenues 147,200 147,200
Transfers from other funds
Amount available for appropriations 94,690,940 94,690,940 Charges to appropriations (outflows):

General government 6,517,970 9,466,511
Police 20,617,480 20,991,878
Fire 12,358,800 12,664,000
Public works 9,701,330 10,412,025
Community services 1,856,360 1,879,968
Community development 2,469,250 2,969,562
Transfers to other funds
Total charges to appropriations 53,521,190 58,383,944
Fund Balances - Ending $ 41,169,750 $36,306,996
-80-
Variance
Actual with Final
Amounts Budget
$47,744,280 $
15,979,871 61,201
32,615,152 8,318,612
1,576,687 217,587
288,898 (139,902)
1,814,831 347,231
1,533,165 495,765
1,614,785 (676,565)
197,860 50,660
2,929,936 2,929,936
106,295,465 11,604,525
6,005,880 3,460,631
20,577,688 414,190
12,400,879 263,121
8,763,352 1,648,673
1,683,803 196,165
2,207,760 761,802
1,291,430 (1,291,430)
52,930,792 5,453,152
$53,364,673 $ 17,057,677

CITY OF LA MESA
Required Supplementary Information
Budgetary Comparison Schedule-Housing Asset Fund
For the Year Ended June 30, 2021
The following is a budget comparison schedule for the Housing Asset Fund.

Budgeted Amounts
Original Final
Fund Balances - Beginning $ 9,458,221 $ 9,458,221
Resources (inflows):

Use of money and property 1,210 1,210
lntergo.emmental 748,390 748,390
Other re.enues 50,000 50,000
Amount available for appropriations 10,257,821 10,257,821 Charges to appropriations (outflows):

Community de.elopment 191,080 250,132
Total charges to appropriations 191,080 250,132
Fund Balances - Ending $10,066,741 $10,007,689
Variance
Actual with Final
Amounts Budget
$ 9,458,221 $
90,091 88,881
748,390
84,013 34,013
10,380,715 122,894
178,545 71,587
178,545 71,587
$10,202,170 $ 194,481
Note: Budgeted Fund Balances include only available amounts while Actual Fund Balances include both available and restricted amounts.
-81-

CITY OF LA MESA
Required Supplementary Information
Budgetary Comparison Schedule - Miscellaneous Grants Fund For the Year Ended June 30, 2021
The following is a budget comparison schedule for the Miscellaneous Grants Fund.

Budgeted Amounts Actual
Original Final Amounts
Fund Balances- Beginning $ (72,635) $ (72,635) $ (72,635) Resources (inflows):

Intergovernmental 536,560 2,371,896 2,035,754
Amount available for appropriations 463,925 2,299,261 1,963,119 Charges to appropriations (outflows):

Community development 77,590 2,525,369 1,838,933
Transfers out 202,108
Total charges to appropriations 77,590 2,525,369 2,041,041 Fund Balances- Ending $ 386,335 $ (226,108) $ (77,922)
-82-
Variance
with Final
Budget
$
(336,142)
(336,142)
686,436
(202,108)
484,328
$ 148,186

CITY OF LA MESA
Required Supplementary Information
Schedules of Changes in Net Pension Liability and Related Ratios Last Ten Years*
Miscellaneous Plan

TOTAL PENSION LIABILITY
Service Cost
Interest on Total Pension Liability
Difference Between Expected and Actual Experience
Changes of Assumptions
Benefit Payments, Including Refunds of Employee Contributions Net Change in Total Pension Liability
Total Pension Liability• Beginning
Total Pension Liability - Ending (a)

PLAN FIDUCIARY NET POSITION
Contributions • Employer
Contributions • Employee
Net lmestment income
Benefit Payments, Including Refunds of Employee Contributions Net Plan to P Ian Resource Movement
Administrative Expense
Other Miscellaneous lncome/(Expense)
Net Change in Fiduciary Net Position
Plan Fiduciary Net Position - Beginning
Plan Fiduciary Net Position - Ending (b)
Plan Net Position Liability - Ending (a) - (b)
Plan Fiduciary Net Position as a Percentage of the Total Pension Liability Covered Payroll
Plan Net Pension Liability as a Percentage of Covered Payroll • Measurement period 2013-14 {fiscal year 2015) was the 1st year of implementation.

Notes to Schedule:
$
6/30/2014
1,725,483
6,602,641
$
Measurement date
6/30/2015 6/30/2016 6/30/2017 6/30/2018
1,605,289 $ 1,587,287 $ 1,736,333 $ 1,745,608 $
6,823,080 7,124,332 7,316,806 7,602,090
(1,101,092) 263,533 (5,847) 1,300,541
(1,539,484) 5,617,856 (661,183)
6/30/2019
1,735,047
7,944,529
1,569,003
$
6/30/2020
1,821,665
8,219,050
507,760
(4,351,133) (4,592,998) (4,896,950) (5,490,512) {5,923,785) (6,320,349) (6,462,046) 3,976,991 1,194,795 4,078,202 9,174,636 4,063,271 4,928,230 4,086,429 89,348,041 93,325,032 94,519,827 98,598,029 107,TT2,665 111,835,936 116,764,166 93,325,032 94,519,827 98,598,029 107,772,665 _ 111,835,936 116,764,166 120,850,595 2,018,839
793,357
10,477,342
(4,351,133)
8,938,405
60,856,744
69,795,149
2,233,832
699,783
1,548,306
(4,592,998)
(78,335)
(189,412)
69,795,149
69,605,737
2,553,613
727,594
378,797
(4,896,950)
(42,421)
{1,279,367)
69,6~737
68,326,370
2,693,445
761,773
7,561,152
(5,490,512)
(100,879)
5,424,979
68,326,370
73,751,349
3,000,728
739,434
6,214,843
(5,923,785)
(180)
(114,925)
f218,244)
3,697,871
73,751,349
77,449,220
3,398,605
751,231
5,041,276
(6,320,349)
(55,269)
180
2,815,674
n.~.220
80,264,894
3,871,245
790,692
4,031,596
(6,462,046)
(113,154)
2,118,333
80,264,894
82,383,227
$ 23,529,883 $ 24,914,090 $ 30,271,659 $ 34,021,316 $ 34,386,716 $ 36,499,272 $ 38,467,368

74.79% 73.64% 69.30% 68.43%
$ 9,338,814 $ 9,805,687 $ 10,775,401 $ 10,782,250 $
251.96% 254.08% 280.93% 315.53%

69.25% 68.74%
9,713,133 $ 10,004,158 $
354.02% 364.84%

68.17%
9,TT1,136
393.68%
Benefit Changes: The figures above do not include any liabiltty impact that may haw resulted from plan changes which occurred after the June 30, 2017 v.aluation date. This applies for \Oluntary benefrt changes as well as any offers ofTwo Years Additional Service Credit (a.k.a. Golden Handshakes).

Changes in Assumptions: For 2020, the Plan adopted a new amortization policy effectiw with the 2019 actuarial v.aluation. The new amortization policy shortens the period over which actuarial gains and losses are amortized from 30 years to 20 years with the payments computed as a level dollar amount. In addition, the new policy does not utilize a fiw-year ramp-up and ramp-down on UAL bases attributable to assumption changes and non-investment gains/losses. The new policy also does not utilize a fiw-year ramp-down on investment gains/losses. These changes apply only to new UAL bases established on or alter June 30, 2019. There were no changes in assumptions in 2019. In 2018, demographic assumptions and inflation rate were changed in accordance to the CalPERS Experience Study and Review of Actuarial Assumptions December 2017. There were no changes in the discount rate in 2019. In 2017, the accounting discount rate was reduced from 7.65 percent to 7.15 percent In 2016, there were no changes In the discount rate. In 2015, amounts reported reflect an adjustment of the discount rate from 7.5 percent (net of administrati\.e expense) to 7.65 percent (without a reduction for pension plan administrative expense). In 2014, amounts reported were based on the 7.5 percent discount rate. -83-

CITY OF LA MESA
Required Supplementary Information
Schedules of Changes in Net Pension Liability and Related Ratios Last Ten Years*
Safety Plan

TOTAL PENSION LIABILITY
Service Cost
Interest on Total Pension Liability
Difference Between Expected and Actual Experience
Changes of Assumptions
Benefit Payments, Including Refunds of Employee Contributions Net Change in Total Pension Liability
Total Pension Liability - Beginning
Total Pension Liability - Ending (a)

PLAN FIDUCIARY NET POSITION
Contributions - Employer
Contributions - Employee
Net Investment Income
Benefit Payments, Including Refunds of Employee Contributions Net Plan to Plan Resource Movement
Administrative Expense
Other Miscellaneous lncome/(Expense)
Net Change In Fiduciary Net Position
Plan Fiduciary Net Position - Beginning
Plan Fiduciary Net Position - Ending {b)
6/30/2014
$ 2,511,204
10,771,035
(7,575,744)
5,706,495
146, 146,054
151,852,549
2,864,566
804,337
17,292,426
(7,575,744)
13,385,585
100,973,923
114,359,508
6/30/2015
$ 2,407,587
11,178,436
(161,921)
(2,742,320)
(8,057,546)
2,624,236
151,85~,549
154,476,785
3,238,613
840,213
2,541,555
(8,057,546)
(126,940)
(1,564,105)
114,359,508
112, 795,403
6/30/2016
$ 2,403,285
11,527,490
(697,636)
(8,589,274)
4,643,865
154,!76,785
159,_1_20,650
3,767,485
891,198
564,745
(8,589,274)
(68,743)
(3,434,589)
112, 795,403
109,360,814
Measurement date
6/30/2017
$ 2,727,872
11,719,571
(1,952, 708)
9,776,293
@,796,139}
13,474,889
159,120,650
172,59l;,539
4,477,395
996,668
12,085,214
(8,796,139)
(161,464)
8,601,674
109,360,814
117,962,488
6/30/2018
$ 3,179,247
12,328,071
3,953,305
(937,052)
(9,561,683)
8,961,888
172,595,539
181,551',427
4,559,719
1,045,575
9,928,189
(9,561,683)
(288)
6/30/2019
$ 3,150,403
12,871,590
2,005,205
J.10,231,175)
7,796,023
181,557,427
189J53,450
5,192,920
1,083,318
8,023,831
(10,231,175)
(183,818) (88,062)
(349,074) 288
5,438,620 3,981,120
117,962,488 123,401,108
123,401,108 _ 127,382,228
6/30/2020
$ 3,248,296
13,344,226
926,691
(10,543,526)
6,975,687
189,353,450
196,329,137
5,934,636
1,191,676
6,295,868
(10,543,526)
(179,578)
2,699,076
127,382,228
130,081,304
Plan Net Position Liability - Ending (a) - (b) $ ··~ 37,493,041 $ 41,681,382 $ 49,759,836 $ 54,633,051 $ 58,156,319 $ s1,s11,222 ~24I,833 Plan Fiduciary Net Position as a Percentage of the Total Pension Liability Covered Payroll
Plan Net Pension Liability as a Percentage of Covered Payroll • Measurement period 2013-14 (fiscal year 2015) was the 1st year of implementation.

Notes to Schedule:
$

75.31%
9,120,009 $
411.11%

73.02% 68.73%
9,288,796 $ 9,570,037 $
448.73% 519.95%

68.35% 67.97% 67.27% 66.26%
9,992,870 $ 9,226,022 $ 9,535,932 $ 10,584,174
546.72% 630.35% 649.87% 625.91%
Benefit Changes: The figures above do not include any liability impact that may have resulted from plan changes which occurred after the June 30, 2017 valuation date. This applies for "°luntary benefit changes as well as any offers ofTwo Years Additional Service Credit (a.k.a. Golden Handshakes).

Changes in Assumptions: For 2020, the Plan adopted a new amortization policy effective with the 2019 actuarial valuation. The new amortization policy shortens the period over which actuarial gains and losses are amortized from 30 years to 20 years with the payments computed as a level dollar amount. In addition, the new policy does not utilize a five-year ramp-up and ramJ}-down on UAL bases attributable to assumption changes and non-investment gains/losses. The new policy also does not utilize a five-year ramJ}-down on investment gains/losses. These changes apply only to new UAL bases established on or after June 30, 2019. There were no changes in assumptions in 2019. In 2018, demographic assumptions and inflation rate were changed in accordance to the CalPERS Experience Study and Review of Actuarial Assumptions December 2017. There were no changes in the discount rate in 2019. In 2017, the accounting discount rate was reduced from 7.65 percent to 7.15 percent. In 2016, there were no changes in the discount rate. In 2015, amounts reported reflect an adjustment of the discount rate from 7.5 percent (net of administrative expense) to 7.65 percent (without a reduction for pension plan administrative expense). In 2014, amounts reported were based on the 7.5 percent discount rate. -84-

CITY OF LA MESA
Required Supplementary Information
Schedules of Changes in Net Pension Liability and Related Ratios Last Ten Years*
PARS Retirement Enhancement Plan
Measurement date
6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019 6/30/2020

TOTAL PENSION LIABILITY
Service Cost $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 1,527 $ $ Interest on Total Pension Liability 171,000 171,000 178,000 178,000 159,542 157,449 142,093 Changes of Benefit Terms
Difference Betv.,een Expected and Actual Experience (1,000) (154,000) (215,926) Changes of Assumptions 118,000 77,000 (7,519)
Benefit Payments, Including Refunds of Employee Contributions (174,000) (178,000) (179,000) (187,000) (188,512) (192,282) (196,128) Net Change in Total Pension Liability 113,000 2,000 (83,000) (27,443) (258,278) (54,035) Total Pension Liability - Beginning 2,720,000 2,720,000 2,833,000 2,835,000 2,752,000 2,724,557 2,466,279 Total Pension Liability - Ending (a) 2,720,000 ~833,000 2,~5,000 2,1_ 52, ooo_ ~724,55_1_ ~,466,279 2,412,244

PLAN FIDUCIARY NET POSITION
Contributions - Employer 106,000 105,800 118,000 118,000 125,000 125,000 125,000 Contributions - Employee 1,000 1,000 2,000 1,000 1,127
Net lm,estment Income 275,000 60,000 50,000 187,000 123,563 134,170 106,642 Benefit Payments, Including Refunds of Employee Contributions (174,000) (178,000) (179,000) (187,000) (188,512) (192,282) (196,128) Administrati1.e Expenses (22,000) (22,000) (21,000) (8,000) {8,370) (8,556) (8,629) Other Changes in Fiduciary Net Position
Net Change in Fiduciary Net Position 186,000 (33,200) {30,000) 111,000 52,808 58,332 26,885 Plan Fiduciary Net Position - Beginning 2,124,000 2,310,000 2,276,800 2,246,800 2,357,800 2,410,608 2,468,940 Plan Fiduciary Net Position - Ending (b) 2,311l,000 2,276,800 _2,246,800 2,357,800_ _ 2,410,60!_ 2,468,940 2,495,825 Plan Net Position Liability - Ending (a) - (b) $ 410,000 $ 556,200 $ 588,200 $ 394,200 $ 313,949 $ (2,661) $ (83,581) Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 84.93% 80.37% 79.25% 85.68% 88.48% 100.11% 103.46% Covered Payroll $ 97,932 $ 100,872 $ 103,896 $ 105,972 $ 108,096 $ 108,096 $ 113,544 Plan Net Pension Liability as a Percentage of Covered Payroll 418.66% 551.39% 566.14% 371.99% 290.44% -2.46% -73.61% * Measurement period 2013-14 (fiscal year 2015) was the 1st year of implementation.

Notes to Schedule:

Changes in Assumptions: There were no changes in assumptions. -85-

CITY OF LA MESA
Required Supplementary Information
Schedule of Plan Contributions
Last Ten Years*
Miscellaneous Plan
Actuarially Determined Contribution
Contributions in Relation to the Actuarially Determined Contribution Contribution Deficiency (Excess)
6/30/2015 6/30/2016
$ 2,018,839 $ 2,233,832
(2,018,839) (2,233.8_32)
$ $
6/30/2017
$ 2,553,613
(2,553,613)
$
Fiscal Year
6/30/2018
$ 2,693,445
(2,693,445)
$
6/30/2019
$ 3,000,728
(3,000,728) $ .
6/30/2020
$ 3,398,605
(3,398,605)
$
6/30/2021
$ 3,871,245
(3,871,245)
$
Cosered Payroll $ 9,805,687 $ 10,775,401 $ 10,782,250 $ 9,713,133 $10,004,158 $ 9,771,136 $ 9,799,062 Contributions as a Percentage of Co-ered Payroll 20.59% 20.73% 23.68% * Measurement period 2013-14 (fiscal year 2015) was the 1st year of implementation.

Notes to Schedule:

The actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year 2020-21 were from the June 30, 2019 Funding Valuation Report.

Actuarial Cost Method
Amortization Method/Period
Asset Valuation Method
Actuarial Assumptions:

Discount Rate
Inflation
Salary Increases
Mortality Rate Table
Post Retirement Benefit Increase
Entry Age Normal
For details, see June 30, 2019 Funding Valuation
Market Value of Assets

7.15%

2.50%
Varies by Entry Age and Service
The mortality table used was deseloped based on
The lesser of contract COLA or 2.50% until Purchasing
-86-

27.73% 29.99% 34.78% 39.51%

CITY OF LA MESA
Required Supplementary Information
Schedule of Plan Contributions
Last Ten Years*
Safety Plan
Actuarially Determined Contribution
Contributions in Relation to the Actuarially Determined Contribution Contribution Deficiency (Excess)
6/30/2015 6/30/2016
$ 2,864,566 $ 3,238,613
(2,864,566) (3,238_,_613)
$ $
Fiscal Year
6/30/2017
$ 3,767,485
(3,767,485)
6/30/2018
$4,477,395
(4,477,395)
$ $
6/30/2019
$ 4,559,719
(4,559,719)
$
6/30/2020
$ 5,192,920
(5,192,920)
$
6/30/2021
$ 5,934,636
(5,934,636)
$
Covered Payroll $ 9,288,796 $ 9,570,037 $ 9,992,870 $9,226,022 $ 9,535,932 $10,584,174 $10,463,333 Contributions as a Percentage of Covered Payroll 30.84% 33.84% 37.70% * Measurement period 2013-14 (fiscal year 2015) was the 1st year of implementation.

Notes to Schec:lu/e:

The actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year 2020-21 were from the June 30, 2019 Funding Valuation Report.

Actuarial Cost Method
Amortization Method/Period
Asset Valuation Method
Actuarial Assumptions:

Discount Rate
Inflation
Salary Increases
Mortality Rate Table
Post Retirement Benefit Increase
Entry Age Normal
For details, see June 30, 2019 Funding Valuation
Market Value of Assets

7.15%

2.50%
Varies by Entry Age and Sel'llice
The mortality table used was developed based on
The lesser of contract COLA or 2.50% until Purchasing
-87-

48.53% 47.82% 49.06% 56.72%

CITY OF LA MESA
Required Supplementary Information
Schedule of Plan Contributions
Last Ten Years*
PARS Retirement Enhancement Plan
Actuarially Determined Contribution1
Contributions in Relation to the Actuarially Determined Contribution2 Contribution Deficiency (Excess)
6/30/2015
$ 105,800 $
(105,800)
_! $
Co1.ered Payroll $ 100,872 $
Contributions as a Percentage of Co1.ered Payroll 104.9% • Measurement period 2013-14 (fiscal year 2015) was the 1st year of implementation.

Notes to Schedule:
1 Actuarially Determined Contributions from the employer's financial statements. 2Actual contributions from employer's financial statements. 6/30/2016 6/30/2017
118,300 $ 125,000 $
(118,300) (125,000)
$ $
103,896 $ 105,972 $
113.9% 118.0%
-88-
Fiscal Year
6/30/2018 6/30/2019 6/30/2020
114,700 $ 114,700 $ 22,800 $
(125,000) (125,000) (125,000)
(10,300) $ ___ (10,300) $ __ (102,200) $
108,096 $ 108,096 $ 113,544 $
115.6% 115.6% 110.1%
6/30/2021
22,800
(125,000)
(102,20())_
113.544
110.1%

CITY OF LA MESA
Required Supplementary Information
Schedule of Changes in the Net OPEB Liability and Related Ratios Last Ten Years*
Fiscal Year 2017-18 2018-19
Measurement Period 2016-17 2017-18
Total OPEB Liability
Sen.ice cost $ 177,546 $ 189,976
Interest 450,042 465,322
Differences between expected and
actual experience
Changes of assumptions
Benefit payments (393,258) (450,210)
Net change in total OPEB liability 234,330 205,088
Total OPEB liability· beginning 6,448,258 6,682,588
Total OPEB liability· ending (a) 6,682,588 6,887,676
Plan Fiduciary Net Position
Contributions - employer 673,038 744,210
Net im.estment income 240,564 216,245
Benefit payments (393,258) (450,210)
Administratil.e expense (1,213) (1,484)
Other expense (3,534)
Net change in plan fiduciary net position 519,131 505,227 Plan fiduciary net position - beginning 2,152,522 2,671,653 Plan fiduciary net position - ending (b) 2,671,653 3,176,880 Net OPEB liability - ending (a) - (b) $ 4,010,935 $ 3,710,796 Plan fiduciary net position as a percentage
of the total OPEB liability 40.0% 46.1%
C01.ered payroll $ 20,699,310 $ 21,602,500
Net OPEB liability as a percentage of co1.ered payroll 19.4% 17.2% Notes to Schedule:

Changes in assumptions: none
2019-20 2020-21
2018-19 2019-20
$ 195,675 $ 210,776
479,727 516,097
514,636 (1,494,978)
(176,855)
(460,206) (566,820)
552,977 (1,334,925)
6,887,676 7,440,653
7,440,653 6,105,728
910,206 1,046,550
221,144 155,315
(460,206) (566,820)
(1,653) (1,959)
669,491 633,086
3,176,880 3,846,371
3,846,371 4,479,457
$ 3,594,282 $ 1,626,271

51.7% 73.4%
$ 22,439,700 $ 23,695,500

16.0% 6.9%
*Historical information is required only for measurement periods for which GASB 75 is applicable. Future years' information will be displayed up to 10 years as information becomes available. Fiscal year 2017-18 was the first year of implementation.
-89-

CITY OF LA MESA
Required Supplementary Information
Schedule of OPES Contributions
Last Ten Years*
Fiscal Year
Actuarially Determined Contribution (ADC)
Contributions in relation to the ADC
Contribution deficiency (excess)
Co\ered payroll
Contributions as a percentage of co\ered payroll
2017-18
$ 564,577
673,038
$ (108,461)
$ 20,699,310

3.3%
2018-19 2019-20 2020-21
$ 582,063 $ 588,161 $ 582,847
744,210 719,379 1,046,550
$ (162,147) $ (131,218) $ (463,703)
$ 21,602,500 $ 22,439,700 $ 23,695,500

3.4% 3.2% 4.4%
*Historical information is required only for measurement periods for which GASB 75 is applicable. Future years' information will be displayed up to 10 years as information becomes available. Fiscal year 2017-18 was the first year of implementation.
-90-

SUPPLEMENTARY INFORMATION

This page left intentionally blank.

NON-MAJOR GOVERNMENTAL FUNDS

CITY OF LA MESA
Combining Balance Sheet
Non-Major Governmental Funds
June 30, 2021
Assets
Cash and investments
Restricted:

Cash and investments
Receivables:

Accounts
Loans
Grants
Total assets
Liabilities
Accounts payable
Salaries payable
Due to other funds
Total liabilities
Deferred Inflows of Resources
Unearned revenue - housing rehab loans
Fund Balances
Restricted for:

General government
Public safety
Capital outlays
Community services
Community development
Debt service
Unassigned
Total fund balances (deficit)
Total liabilities, deferred inflows of resources
and fund balances
$
$
$
$

SPECIAL REVENUE FUNDS
Housing
Rehabilitation/
CDBG Transportation Street
Administration Gas Tax Improvement Parking
147,357 $ 386,279 $ $ 460,628
261 527,238 31,509
146,998
89,176
383,792 $ 386,279 $ 527,238 $ 492,137
5,000 $ $ $ 4,597
1,039 5,413
735,599
6,039 735,599 10,010
146,998
386,279
230,755 482,127
(208,361)
230,755 386,279 (208,361) 482,127
383,792 $ 386,279 $ 527,238 $ 492,137
-91-

$
$
$
$
Environmental
Services
401,824 $
28,276
430,100 $
6,972 $
14,990
21,962
408,138
408,138
430,100 $
Community
Service
Improvement
103,258 $
103,258 $
$
103,258
103,258
103,258 $

SPECIAL REVENUE FUNDS
Public
Safety
Augmentation
29,460
$
29,460 $
$
29,460
29,460
29,460 $
County
Housing
555,486 $
555,486 $
$
555,486
555,486
555,486 $
-92-
Drug Asset
Seizure
146,658 $
204
Supplemental
Law
Enforcement
120,189
206
146,862 _$..._ __ 1_2_0,_39_5_
6,528 $
6,528
140,334 120,395
140,334 120,395
146,862 $ 120,395 -----.-"'!!""' (continued)

CITY OF LA MESA
Combining Balance Sheet
Non-Major Governmental Funds, (continued)
June 30, 2021
Community
Service
Grants
Assets
Cash and investments $ 40,064
Restricted:

Cash and investments
Receivables:

Accounts
Loans
Grants
Total assets $ 40,064
Liabilities
Accounts payable $ 968
Salaries payable 2,166
Due to other funds
Total liabilities 3,134
Deferred Inflows of Resources
Unearned revenue - housing rehab loans
Fund Balances
Restricted for:

General government
Public safety
Capital outlays
Community services 36,930
Community development
Debt service
Unassigned
Total fund balances (deficit) 36,930
Total liabilities, deferred inflows of resources
and fund balances $ 40,064

SPECIAL REVENUE FUNDS
Public Safety CIP Donations
Grants Grants Fund
$ $ $ 7,002
33,803 262,711
$ 33,803 $ 262,711 $ 7,002
$ 37,078 $ $
52,892 262,711
89,970 262,711
7,002
(56,167)
(56,167) 7,002
$ 33,803 $ 262,711 $ 7,002
-93-

SPECIAL REVENUE FUNDS
DEBT

SERVICE
FUNDS
$
CASP
Fund
Road Maintenance
Fund
52,258 $ 1,070,240 $
552 204,200
_$===5_2_,a=10= $ 1,274,440 $
$ 404 $ $
404
52,406 1,274,440
52,406 1,274,440
$ 52,810 $ 1,274,440 $
PEG
Fund
Transportation
Fund
2006
Certificates of
Participation
593,799 $ 7,106 $ 3,681
37,466 55,678
631,265 $ 62,784 $
-=-==-= 3 682
3,479 $ $
3,479
627,786 62,784
3,682
627,786 62,784 3,682
631,265 $ 62,784 $ 3,682
( continued)
-94-

CITY OF LA MESA
Combining Balance Sheet
Non-Major Governmental Funds, (continued)
June 30, 2021

DEBT SERVICE
FUNDS
2016
Government Obligation
Refunding Bonds
Assets
Cash and investments $ 3,785,122
Restricted:

Cash and investments
Receivables:

Accounts 14,898
Loans
Grants
Total assets $ 3,800,020
Liabilities
Accounts payable $
Salaries payable
Due to other funds
Total liabilities
Deferred Inflows of Resources
Unearned revenue - housing rehab loans
Fund Balances
Restricted for:

General government
Public safety
Capital outlays
Community services
Community development
Debt service 3,800,020
Unassigned
Total fund balances (deficit) 3,800,020
Total liabilities, deferred inflows of resources
and fund balances $ 3,800,020
-95-

CAPITAL PROJECTS FUNDS
Parks
Public Storm and
Building Drains Recreation
$ 818,896 $ 168,923 $ 962,390
116,731
62,594
$ 818,896 $ 168,923 $ 1,141,715
$ $ 11,391 $ 37,820
11,391 37,820
818,896 157,532 1,103,895
818,896 157,532 1,103,895
$ 818,896 $ 168,923 $ 1,141,715

CITY OF LA MESA
Combining Balance Sheet
Non-Major Governmental Funds, (continued)
June 30, 2021

CAPITAL PROJECTS FUNDS
Total
Msc Capital Asset Non-Major
Civic Capital Management Governmental
Center Improvement Plan Funds
$ 92,599 $ 317,676 $ 889,802 $ 11,131,237
116,732
929,948
146,998
448,284
$ 92,599 $ 317,676 $ 889,802 $ 12,773,199
$ $ $ $ 114,237
23,608
1,051,202
1,189,047
146,998
1,105,710
290,189
92,599 317,676 889,802 3,766,679
1,467,034
1,268,368
3,803,702
{264,528)
92,599 317,676 889,802 11,437,154
$ 92,599 $ 317,676 $ 889,802 $ 12,773,199
(concluded)
-96-

CITY OF LA MESA
Combining Statement of Revenues, Expenditures,
and Changes in Fund Balances
Non-Major Governmental Funds
For the Year Ended June 30, 2021
Housing
Rehabilitation/
CDBG
Administration
Revenues:

Property taxes $
Other taxes
Licenses and permits
Fines and forfeitures
Use of money and property 423
Intergovernmental 127,667
Charges for services
Other revenues 59 565
Total revenues 187 655
Expenditures:

Current:

General government
Police
Public works
Community development 129,651
Community services
Capital outlay
Debt service:

Principal retirement
Interest and fiscal charges
Total expenditures 129 651
Excess (deficiency) of
revenues over (under) expenditures 58004
Other financing sources (uses):

Transfers in
Transfers out
Total other financing sources (uses)
Net change in fund balances 58,004
Fund balances (deficit), beginning of year 172 751
Fund balances (deficit), end of year $ 230 755
-97-

SPECIAL REVENUE FUNDS
Transportation Street
Gas Tax Improvement Parking
$ $ $
11,596
199,916
1,323,781 1,288,158
1 323,781 1,288,158 211,512
14,149
143,612
7,400
115,425
500,004
7,621
515 025 273,186
1323781 773133 (61,674)
{1,365,033) (717,870) (121,300)
{1,365,033) (717,870) (121,300)
(41,252) 55,263 (182,974)
427,531 (263,624) 665,101
$ 3861279 ! (2oa1
361l $ 482127

SPECIAL REVENUE FUNDS
Community Public Supplemental
Environmental Service Safety County Drug klset Law
Services Improvement Augmentation Housing Seizure Enforcement $ $ $ $ $ $
331,498
3,657
263 187 76 277
15,018 156,726
396,981
1 096 5,795 257125
413 358 5 795 331 685 257125 3 733 157 003
492,871
52,431
492 871 52431
(79,513) 5 795 331 685 257125 (48,698) 157,003
(50,000) (322,214) (148,500)
(50,000) (322,214) (148,500)
(129,513) 5,795 9,471 257,125 (48,698) 8,503
537 651 97 463 19 989 298 361 189 032 111 892
$ 408,138 ;ll 103,258 $ 29460 ;ll 555,486 $ 140,334 $ 120 395 (continued)
-98-

CITY OF LA MESA
Combining Statement of Revenues, Expenditures,
and Changes in Fund Balances
Non-Major Governmental Funds, (continued)
For the Year Ended June 30, 2021
Community
Service
Grants
Revenues:

Property taxes $
Other taxes
Licenses and permits
Fines and forfeitures
Use of money and property
lntergovernm ental 312,021
Charges for services 3,514
Other revenues 10,875
Total revenues 326410
Expenditures:

Current:

General government
Police
Public works
Community development 136,345
Community services 111,145
Capital outlay
Debt service:

Principal retirement
Interest and fiscal charges
Total expenditures 247 490
Excess (deficiency) of
revenues over (under) expenditures 78920
Other financing sources (uses):

Transfers in
Transfers out
Total other financing sources (uses)
Net change in fund balances 78,920
Fund balances (deficit), beginning of year (41,990}
Fund balances (deficit), end of year $ 36 930
-99-

SPECIAL REVENUE FUNDS
Public Safety CIP Donations
Grants Grants Fund
$ $ $
1,211
431,689 1,298,404
432 900 1 298404
316,048
316 048
116 852 1 298404
{1,310,119}
{1,310,119}
116,852 (11,715)
(173,019} 11 715 7,002
$ (561
167l $ $ 7 002

DEBT SERVICE

SPECIAL REVENUE FUNDS FUNDS
2006
CASP Road Maintenance PEG Transportation Certificates of Fund Fund Fund Fund Participation
$ $ $ $ $
156,688
5,019 2
1,111,683 55,658
16,078
16078 1 116 702 156 688 55658 2
213,097 4,700
980
305,000
132 919
980 213 097 442,619
15098 1116 702 (56.409) 55658 (442,617)
1,999 442,900
(921,476)
(921,476) 1 999 442 900
15,098 195,226 (54,410) 55,658 283
37 308 1079214 682 196 7126 3399
$ 52.406 $ 1 274440 $ 627,786 $ 62784 § 3,682
( continued)
-100-

CITY OF LA MESA
Combining Statement of Revenues, Expenditures,
and Changes in Fund Balances
Non-Major Governmental Funds, (continued)
For the Year Ended June 30, 2021

DEBT SERVICE
FUNDS
2016
Government Obligation
Refunding Bonds
Revenues:

Property taxes $ 2,032,016
Other taxes
Licenses and permits
Fines and forfeitures
Use of money and property 5,009
Intergovernmental
Charges for services
Other revenues
Total revenues 2,037,025
Expenditures:

Current:

General government 5,946
Police
Public works
Community development
Community services
Capital outlay
Debt service:

Principal retirement 775,000
Interest and fiscal charges 797 850
Total expenditures 1 578,796
Excess (deficiency) of
revenues over (under) expenditures 458 229
Other financing sources (uses):

Transfers in
Transfers out
Total other financing sources (uses)
Net change in fund balances 458,229
Fund balances (deficit), beginning of year 3,341 791
Fund balances (deficit), end of year $ 3,800,020
-101-

CAPITAL PROJECTS FUNDS
Parks
Public Storm and
Building Drains Recreation
$ $ $
1,559
54,114 17,744
65,384
54114 84,687
69,910 358,813 141,959
69,910 358 813 141,959
(15,796) (358,813) (57,272)
348,597
(48,468}
(48,468} 348 597
(64,264) (10,216) (57,272)
883 160 167 748 1,161,167
$ 818,896 $ 157 532 $ 11103,895

CAPITAL PROJECTS FUNDS
Total
Misc Capital Asset Non-Major
Civic Capital Management Governmental
Center Improvement Plan Funds
$ $ $ $ 2,032,016
488,186
1,559
16,464
283,030
6,186,189
416,573
334,456
9,758,473
730,763
512,091
7,400
382,401
111,145
570,682
1,580,004
938,390
4,832,876
4,925,597
100,379 893,875
(5,004,980)
100 379 (4,111,105)
100,379 814,492
92,599 317,676 789423 10,622,662
$ 92,599 $ 317,676 $ 889,802 $ 11,437,154
( concluded)
-102-

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INTERNAL SERVICE FUNDS

CITY OF LA MESA
Combining Statement of Net Position
Internal Service Funds
June 30, 2021
Assets
Current assets:

Cash and investments
Accounts receivable, net
Total current assets
Noncurrent assets:

Restricted cash and investments
Capital assets:

Depreciable, net
Total noncurrent assets
Total assets
Liabilities
Current liabilities:

Accounts payable
Salaries payable
Interest payable
Lease payable - due in one year
Total current liabilities
Noncurrent liabilities:

Lease payable - due in more than one year
Claims payable
Total noncurrent liabilities
Total liabilities
Net Position
Net investment in capital assets
Restricted
Unrestricted
Total net position (deficit)
Employee Workers'
Benefits Compensation
$ 785,967 $ 6,677,614
4291270
785 967 7, 1061884
12,801 115,610
12 801 1151610
798.768 71222A94
1,267,523 145,314
5,545
1,267,523 150,859
4,572,222
4,572,222
1,267,523 4,723,081
12,801 115,610
(481,556) 2,383,803
! <4681
755l ~ 21499,413
-103-
Equipment Liability Risk
Replacement Financing Total
$ 3,371,465 $ 1,195,300 $ 12,030,346
3 741 1,158 434,169
3,375,206 11196A58 12,464,515
22,112 150,523
61470,543 614701543
6A701543 22112 6,621,066
918451749 1.218.570 19,085,581
6,457 60,710 1,480,004
5,545 11,090
4,499 4,499
230,365 2301365
241,321 66,255 1,725,958
658,099 658,099
256,756 4,828,978
658,099 256,756 5,487,077
899,420 323,011 7,213,035
5,582,079 5,582,079
22,112 150,523
3,364,250 873 447 6,139,944
i 8,9461329 i 895,559 i 11,872,546

CITY OF LA MESA
Combining Statement of Activities, and Changes in Net Position Internal Service Funds
For the Year Ended June 30, 2021
Employee Workers' Equipment
Benefits Com~ensation Re~lacement
Operating Revenues:

Charges for services $ 3,743,698 $ 1,097,710 $ 1,584,470 other operating revenues 42986 810688
Total operating revenues 3,786,684 1,908,398 1,584,470
Operating Expenses:

Salaries and payroll 160,495
Professional services 4,255,441 1,632,234 693,960
Supplies and materials 1,477
Insurance premiums and settlements 1,402,123
Depreciation 859,830
Total operating expenses 4,255,441 3,196,329 1,553,790
Operating income (loss) (468,757) (1,287,931) 30680
Nonoperating Revenues:

Interest income 9,900 5,697
Interest expense 33,252
Gain (loss) on disposal of assets (45,138)
Total nonoperating revenues 9900 (6,189)
Income (loss) before transfers (468,757) (1,278,031) 24491 Transfers:

Transfers in 644,540 375,930
Transfers out (644,540)
Total transfers 644,540 (644,540) 375,930
Change in net position 175,783 (1,922,571) 400,421
Net position (deficit), beginning of year (644,538) 4,421,984 8,545,908 Net position (deficit), end of year m (468i755) i 2,499,413 i 8,946,329 -104-
Liability Risk
Financing Total
$ $ 6,425,878
221,857 1,075,531
221,857 7,501,409
165,524 326,019
874,352 7,455,987
321 1,798
851,425 2,253,548
859,830
1,891,622 10,897,182
(1,669,765) (3,395,773)
(250) 15,347
33,252
(45,138)
(250) 3461
(1,670,015) (3,392,312)
1,179,151 2,199,621
(644,540)
1,179,151 1,555,081
(490,864) (1,837,231)
1,386,423 13,709,777
i 895,559 i 11 ,872,546

CITY OF LA MESA
Combining Statement of Cash Flows
Internal Service Funds
For the Year Ended June 30, 2021

CASH FLOWS FROM OPERATING ACTIVITIES
Cash recei1.ed from customers/other funds
Cash payments to suppliers for goods and ser\.ices
Cash payments to employees for sen.ices
Insurance premiums and settlements
Other operating re1.enues
Net Cash Provided (Used) by Operating Activities

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Transfers in
Transfers out
Net Cash Provided Noncapital Financing Acti\ities
Employee
Benefits
$3,743,698
(3,718,749)
42,986
67,935
644,540
644,540

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition of capital assets
Payments on notes/leases payable
Net Cash (Used) for Capital and Related Financing Activities

CASH FLOWS FROM INVESTING ACTIVITIES
ln1.estment income
Net Cash Prm,ided by ln1.esting Activities
Net Increase (Decrease) in Cash and Cash Equivalents 712,475 Cash and Cash Equivalents• beginning of the year 86,293 Cash and Cash Equivalents - end of the year $ 798,768

RECONCILIATION TO STATEMENT OF NET POSITION
Current assets:

Cash and cash equivalents $ 785,967
Cash and cash equivalents - restricted 12,801
Total cash and cash equivalents $ 798,768
Reconciliation of operating income (loss) to net cash provided (used) by operating activities:

Operating income 0oss) $ (468,757)
Adjustments to reconcile operating income Ooss) to net cash provided (used) by operating activities:

Depreciation expense
Change in assets and liabilities:

Accounts receivable
Accounts payable 536,692
Claims payable
Salaries and benefits payable
Net Cash Pro\ided (Used) by Operating Acti\ities $ 67,935 Noncash Financing Activities
None $
-105-
Workers'
Compensation
$ 857,338
(1,556,460)
(158,328)
(451,140)
810,688
(497,902)
(644,540)
(644,540)
9,900
9,900
(1,132,542)
7,925,766
$ 6,793,224
$ 6,677,614
115,610
$ 6,793,224
$ {1,287,931)
(240,372)
77,251
950,983
2,167
$ (497,902)
$
Equipment Liability Risk
Replacement Financing Total
$ 1,589,834 $ $ 6,190,870
(713,740) (882,480) (3,152,680)
(163,357) (321,685)
(959,573) (5,129,462)
225,315 1,078,989
876,094 (1,780,095) (1,333,968)
375,930 1,179,151 2,199,621
(644,540)
375,930 1,179,151 1,555,081
(1,210,615) (1,210,615)
(326,667) (326,667)
(1,504,030) (1,504,030)
5,697 (250) 15,347
5,697 (250) 15,347
(246,309) (601,194) (1,267,570)
3,617,774 1,818,606 13,448,439
$ 3,371,465 $ 1,217,412 $ 12,180,869
$ 3,371,465 $ 1,195,300 $ 12,030,346
22,112 150,523
$ 3,371,465 $ 1,217,412 $ 12,180,869
$ 30,680 $ (1,669,765) $ (3,395,773)
859,830 859,830
5,364 3,458 (231,550)
(19,780) (7,807) 586,356
(108,148) 842,835
2,167 4,334
$ 876,094 $ (1,780,095) $ (1,333,968)
$ $ $

This page left intentionally blank.

735 E. Carnegie Dr. Suite 100
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909 889 0871 T
909 889 5361 F
ramscpa. net
l'ARTNEHS
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Torry P. Sh,;a, CPA
Le,,na Shanbhag, CPA. MST, CGM1\
flradlerd /\ Wclehir. CPA, MBA. CGMA
Jenny W. Liu, CPA, MST

MANAGERS/ STAFF
Charles De Simoni, CPA
Gardcnya Dtff;,n, CPA, CGH/\
Brianna Schult,, CPA
Seong-Hyea Lee, CPA. Mf.lA
Evelyn Morentin-Barcena, CPA
Veronica Hernandez, CPA
La11ra !\1virn, CPA
Xinlu Zoe Zhang, CPA, MSA
John M.ildonado, CPA, MSA
)uli.1 Rodriguez Fuente,. CPA, MSA

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ROGERS, ANDERSON, MALOOY & SCOTT, LLP
CEHTlr'IED PUllLIC /\C:COUN rANTS, SINCE I '),JD
December 17, 2021
To the Honorable City Council
City of La Mesa
La Mesa, California
We have audited the financial statements of City of La Mesa (the City) as of and for the year ended June 30, 2021 and have issued our report thereon dated December 17, 2021. Professional standards require that we advise you of the following matters relating to our audit.

Our Responsibility in Relation to the Financial Statement Audit As communicated in our engagement letter dated May 3, 2021, our responsibility, as described by professional standards, is to form and express opinions about whether the financial statements that have been prepared by management with your oversight are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America and Government Auditing Standards. Our audit of the financial statements does not relieve you or management of your respective responsibilities.

Our responsibility, as prescribed by professional standards, is to plan and perform our audit to obtain reasonable, rather than absolute, assurance about whether the financial statements are free of material misstatement.

An audit of financial statements includes consideration of internal control over financial reporting as a basis for designing 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 over financial reporting. Accordingly, as part of our audit, we considered the internal control of the City solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control.

We are also responsible for communicating significant matters related to the audit that are, in our professional judgment, relevant to your responsibilities in overseeing the financial reporting process. However, we are not required to design procedures for the purpose of identifying other matters to communicate to you.
-1-
STABILITY. ACCURACY. TRUST.

Planned Scope and Timing of the Audit
We conducted our audit consistent with the planned scope and timing we previously communicated to you.

Compliance with All Ethics Requirements Regarding Independence The engagement team has complied with all relevant ethical requirements regarding independence.

Significant Risks Identified
We have identified the possibility of the following significant risks:

Management's override of internal controls over financial reporting: Management override of internal controls is the intervention by management in handling financial information and making decisions contrary to internal control policy.

Revenue recognition: Management's failure to recognize revenue in accordance with generally accepted accounting principles.

These significant risks are presumptive in most audits and merit attention by the auditors due to the direct impact over financial reporting and internal control processes. Although identified as significant risks, we noted no matters of management override of controls or deviations from generally accepted accounting principles which caused us to modify our audit procedures or any related matters which are required to be communicated to those charged with governance due to these identified risks.

Qualitative Aspects of the Entity's Significant Accounting Practices Significant Accounting Policies
Management has the responsibility to select and use of appropriate accounting policies. A summary of the significant accounting policies adopted by the City is included in Note 1 to the financial statements. During the current year, the City adopted GASB No. 84, Fiduciary Activities.

There have been no changes in significant accounting policies or their application during 2021.

No matters have come to our attention that would require us, under professional standards, to inform you about (1) the methods used to account for significant unusual transactions and (2) the effect of significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus.
-2-

Significant Accounting Estimates
Accounting estimates are an integral part of the financial statements prepared by management and are based on management's current judgments. Those judgments are normally based on 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 markedly from management's current judgments. The most sensitive accounting estimates affecting the financial statements are:

Management's estimate of the fair value of investments is based on information provided by financial institutions. We evaluated the key factors and assumptions used to develop the fair value of investments in determining that it is reasonable in relation to the financial statements taken as a whole.

Management's estimate of the depreciation expense is based on historical estimates of each capitalized item's useful life. We evaluated the key factors and assumptions used to develop the estimated useful lives in determining that it is reasonable in relation to the financial statements taken as a whole.

Management's estimate of the net pension liability and related deferred inflows and outflows is based on actuarial reports provided by independent actuaries. We evaluated the key factors and assumptions used to develop the estimate in determining that it is reasonable in relation to the financial statements taken as a whole.

Management's estimate of the net OPEB liability and related deferred inflows and outflows is based on actuarial reports provided by independent actuaries. We evaluated the key factors and assumptions used to develop the estimate in determining that it is reasonable in relation to the financial statements taken as a whole.

Financial Statement Disclosures
Certain financial statement disclosures involve significant judgment and are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting the City's financial statements were:

The disclosure of the fair value of investments in the notes to the financial statements represents amounts susceptible to market fluctuations.

The disclosure of accumulated depreciation in the notes to the financial statements is based on estimated useful lives which could differ from actual useful lives of each capitalized item.

The disclosure of net pension liability and related deferred inflows and outflows in the notes to the financial statements is based on actuarial assumptions. Actual future liabilities may vary from disclosed estimates.
-3-

The disclosure of net OPEB liability and related deferred inflows and outflows in the notes to the financial statements is based on actuarial assumptions. Actual future liabilities may vary from disclosed estimates.

The financial statement disclosures are neutral, consistent, and clear.

Significant Difficulties Encountered during the Audit
We encountered no significant difficulties in dealing with management relating to the performance of the audit.

Uncorrected and Corrected Misstatements
For purposes of this communication, professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that we believe are trivial, and communicate them to the appropriate level of management. Further, professional standards require us to also communicate the effect of uncorrected misstatements related to prior periods on the relevant classes of transactions, account balances or disclosures, and the financial statements as a whole and each applicable opinion unit. None of the misstatements identified by us as a result of our audit procedures and corrected by management were material, either individually or in the aggregate, to the financial statements taken as a whole or applicable opinion units.

Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter, which could be significant to the City's financial statements or the auditor's report. No such disagreements arose during the course of the audit.

Representations Requested from Management
We have requested certain written representations from management, which are included in the attached letter dated December 17, 2021.

Management's Consultations with Other Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting matters. Management informed us that, and to our knowledge, there were no consultations with other accountants regarding auditing and accounting matters.

Other Significant Matters, Findings, or Issues
In the normal course of our professional association with the City, we generally discuss a variety of matters, including the application of accounting principles and auditing standards, operating and regulatory conditions affecting the City, and operational plans and strategies that may affect the risks of material misstatement. None of the matters discussed resulted in a condition to our retention as the City's auditors.
-4-

Other Information Included in Annual Reports
Pursuant to professional standards, our responsibility as auditors for other information, whether financial or nonfinancial, included in the City's annual reports, does not extend beyond the information identified in the audit report, and we are not required to perform any procedures to corroborate such other information. However, in accordance with such standards:

We applied certain limited procedures to the 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 the supplementary information, 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.

Our responsibility also includes communicating to you any information which we believe is a material misstatement of fact. Nothing came to our attention that caused us to believe that such information, or its manner of presentation, is materially inconsistent with the information, or manner of its presentation, appearing in the financial statements.

This report 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.
f7u.s; ,4-~,,._, M~ .R. kit, LLf'.

San Bernardino, California
December 17, 2021
-5-

CITYOF
LAMESA
/£W£L o( the HIL!S FINANCE DEPARTMENT
December 17, 2021
Rogers, Anderson, Malody & Scott, LLP
This representation letter is provided in connection with your audit of the financial statements of governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of La Mesa (the City) as of June 30, 2021 and for the year then ended, and the related notes to the financial statements, for the purpose of expressing opinions on whether the basic financial statements present fairly, in all material respects, the financial position, results of operations, and cash flows, where applicable, of the various opinion units of the City in accordance with accounting principles generally accepted for governments in the United States of America (U.S. GAAP).

Certain representations in this letter are described as being limited to matters that are material.

Items are considered material, regardless of size, if they involve an omission or misstatement of accounting information such that, in the light of surrounding circumstances, 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.

We confirm that, to the best of our knowledge and belief, having made such inquiries as we considered necessary for the purpose of appropriately informing ourselves as of December 17, 2021.

Financial Statements

1. We have fulfilled our responsibilities, as set out in the terms of the audit engagement dated May 3, 2021, for the preparation and fair presentation of the financial statements of the various opinion units referred to above in accordance with U.S.

GAAP.

2. We acknowledge our responsibility 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.

3. We acknowledge our responsibility for the design, implementation, and maintenance of internal control to prevent and detect fraud.

4. We acknowledge our responsibility for compliance with the laws, regulations, and provisions of contracts and grant agreements.

5. We have reviewed, approved, and taken responsibility for the financial statements and related notes.

6. We have a process to track the status of audit findings and recommendations. -1-
8130 ALLISON AVENUE • LA MESA, CA 91942 • TEL: 619.463.6611 FAX: 619.667.1131

Rogers, Anderson, Malady & Scott, LLP

7. We have· identified and communicated to you all previous audits, attestation engagements, and other studies related to the audit objectives and whether related recommendations have been implemented.

8. Significant assumptions used by us in making accounting estimates, including those measured at fair value, are reasonable.

9. Related party relationships and transactions have been appropriately accounted for and disclosed in accordance with the requirements of U.S. GMP.

10. All events subsequent to the date of the financial statements and for which U.S. GMP requires adjustment or disclosure have been adjusted or disclosed.

11. The effects of all known actual or possible litigation and claims have been accounted for and disclosed in accordance with U.S. GMP.

12. All component units, as well as joint ventures with an equity interest, are included and other joint ventures and related organizations are properly disclosed.

13. All funds and activities are properly classified.

14. All funds that meet the quantitative criteria in GASS Statement No. 34, Basic Financial Statements-and Management's Discussion and Analysis-for State and Local Governments, GASS Statement No. 37, Basic Financial Statements-and Management's Discussion and Analysis-for State and Local Governments: Omnibus as amended, and GASS Statement No. 65, Items Previously Reported as Assets and Liabilities, for presentation as major are identified and presented as such and all other funds that are presented as major are considered important to financial statement users.

15. All components of net position, nonspendable fund balance, and restricted, committed, assigned, and unassigned fund balance are properly classified and, if applicable, approved.

16. Our policy regarding whether to first apply restricted or unrestricted resources when an expense is incurred for purposes for which both restricted and unrestricted net position/fund balance are available is appropriately disclosed and net position/fund balance is properly recognized under the policy.

17. All revenues within the statement of activities have been properly classified as program revenues, general revenues, contributions to term or permanent endowments, or contributions to permanent fund principal.

18. All expenses have been properly classified in or allocated to functions and programs in the statement of activities, and allocations, if any, have been made on a reasonable basis.

19. All interfund and intra-City transactions and balances have been properly classified and reported.

20. Special items and extraordinary items have been properly classified and reported. -2-
8130 ALLISON AVENUE • LA MESA, CA 91942 • TEL: 6 I 9.463.6611 FAX: 619.667.1131

Rogers, Anderson, Malady & Scott, LLP

21. Deposit and investment risks have been properly and fully disclosed.

22. Capital assets, including infrastructure assets, are properly capitalized, reported, and if applicable, depreciated.

23. All required supplementary information is measured and presented within the prescribed guidelines.

24. With regard to investments and other instruments reported at fair value:
a. The underlying assumptions are reasonable and they appropriately reflect management's intent and ability to carry out its stated courses of action. b. The measurement methods and related assumptions used in determining fair value are appropriate in the circumstances and have been consistently applied. c. The disclosures related to fair values are complete, adequate, and in accordance with U.S. GAAP.
d. There are no subsequent events that require adjustments to the fair value measurements and disclosures included in the financial statements.

25. With respect to the nonattest services provided, we have performed the following:
a. Made all management decisions and performed all management functions; b. Assigned a competent individual to oversee the services; c. Evaluated the adequacy of the services performed;
d. Evaluated and accepted responsibility for the result of the service performed; and e. Established and maintained internal controls, including monitoring ongoing activities.

Information Provided

1. We have provided you with:
a. Access to all information, of which we are aware that is relevant to the preparation and fair presentation of the financial statements of the various opinion units referred to above, such as records, documentation, meeting minutes, and other matters; b. Additional information that you have requested from us for the purpose of the audit; and
c. Unrestricted access to persons within the City from whom you determined it necessary to obtain audit evidence.

2. All transactions have been recorded in the accounting records and are reflected in the financial statements.
-3-
8130ALLISONAVENUE • LAMESA,CA9l942 • TEL: 619.463.6611 FAX: 619.667.1131

Rogers, Anderson, Malody & Scott, LLP

3. We have disclosed to you the results of our assessment of the risk that the financial statements may be materially misstated as a result of fraud.

4. We have provided to you our analysis of the City's ability to continue as a going concern, including significant conditions and events present, and if necessary, our analysis of management's plans, and our ability to achieve those plans.

5. We have no knowledge of fraud or suspected fraud that affects the City and involves:
a. Management;
b. Employees who have significant roles in internal control; or c. Others where the fraud could have a material effect on the financial statements.

6. We have no knowledge of any allegations of fraud, or suspected fraud, affecting the City's financial statements communicated by employees, former employees, vendors, regulators, or others.

7. We have disclosed to you all known actual or possible litigation, claims, and assessments whose effects should be considered when preparing the financial statements.

8. We have disclosed to you the identity of the City's related parties and all the related party relationships and transactions of which we are aware.

9. There have been no communications from regulatory agencies concerning noncompliance with or deficiencies in accounting, internal control, or financial reporting practices.

10. The City has no plans or intentions that may materially affect the carrying value or classification of assets and liabilities.

11. We have disclosed to you all guarantees, whether written or oral, under which the City is contingently liable.

12. We have disclosed to you all nonexchange financial guarantees, under which we are obligated and have declared liabilities and disclosed properly in accordance with GASB Statement No. 70, Accounting and Financial Reporting for Nonexchange Financial Guarantees, for those guarantees where it is more likely than not that the City will make a payment on any guarantee.

13. For nonexchange financial guarantees where we have declared liabilities, the amount of the liability recognized is the discounted present value of the best estimate of the future outflows expected to be incurred as a result of the guarantee. Where there was no best estimate but a range of estimated future outflows has been established, we have recognized the minimum amount within the range.
-4-
8130 ALLISON AVENUE LA MESA,CA 91942 • TEL: 619.463.6611 FAX: 619.667.1131

Rogers, Anderson, Malady & Scott, LLP

14. We have disclosed to you all significant estimates and material concentrations known to management that are required to be disclosed in accordance with GASB Statement No. 62 (GASB-62), Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and A/CPA Pronouncements. Significant estimates are estimates at the balance sheet date that could change materially within the next year.

Concentrations refer to volumes of business, revenues, available sources of supply, or markets or geographic areas for which events could occur that would significantly disrupt normal finances within the next year.

15. We have identified and disclosed to you the laws, regulations, and provisions of contracts and grant agreements that could have a direct and material effect on financial statement amounts, including legal and contractual provisions for reporting specific activities in separate funds.

16. There are no:
a. Violations or possible violations of laws or regulations, or provisions of contracts or grant agreements whose effects should be considered for disclosure in the financial statements or as a basis for recording a loss contingency, including applicable budget laws and regulations.
b. Unasserted claims or assessments that our lawyer has advised are probable of assertion and must be disclosed in accordance with GASB-62. c. Other liabilities or gain or loss contingencies that are required to be accrued or disclosed by GASB-62
d. Continuing disclosure consent decree agreements or filings with the Securities and Exchange Commission and we have filed updates on a timely basis in accordance with the agreements (Rule 240, 15c2-12).

17. The City has satisfactory title to all owned assets, and there are no liens or encumbrances on such assets nor has any asset or future revenue been pledged as collateral, except as disclosed to you.

18. We have complied with all aspects of grant agreements and other contractual agreements that would have a material effect on the financial statements in the event of noncompliance.

Supplementary Information in Relation to the Financial Statements as a Whole With respect to the supplementary information accompanying the financial statements:
a. We acknowledge our responsibility for the presentation of the supplementary information in accordance with accounting principles generally accepted in the United States of America.
b. We believe the supplementary information, including its form and content, is fairly presented in accordance with accounting principles generally accepted in the United States of America.
-5-
8130ALLISONAVENUE • LAMESA,CA91942 • TEL: 619.463.6611 FAX: 619.667.1131

Rogers, Anderson, Malady & Scott, LLP
c. The methods of measurement or presentation have not changed from those used in the prior period.
d. When the supplementary information is not presented with the audited financial statements, management will make the audited financial statements readily available to the intended users of the supplementary information no later than the date of issuance by the City of the supplementary information and the auditor's report thereon.
e. We acknowledge our responsibility to include the auditor's report on the supplementary information in any document containing the supplementary information and that indicates the auditor reported on such supplementary information.
f. We acl<nowledge our responsibility to present the supplementary information with the audited financial statements or, if the supplementary information will not be presented with the audited financial statements, to make the audited financial statements readily available to the intended users of the supplementary information no later than the date of issuance by the City of the supplementary information and the auditor's report thereon.

Required Supplementary Information
With respect to the required supplementary information accompanying the financial statements:
a. We acknowledge our responsibility for the presentation of the required supplementary information in accordance with accounting principles generally accepted in the United States of America.
b. We believe the required supplementary information, including its form and content, is measured and fairly presented in accordance with accounting principles generally accepted in the United States of America.
c. The methods of measurement or presentation have not changed from those used in the prior period.

Use of a Specialist
We agree with the findings of specialists in evaluating the City's pension and OPEB net liabilities and related deferred amounts and have adequately considered the qualifications of the specialist in determining the amounts and disclosures used in the financial statements and underlying accounting records. We did not give or cause any instructions to be given to specialists with respect to the values or amounts derived in an attempt to bias their work, and we are not otherwise aware of any matters that have had an impact on the independence or objectivity of the specialists.
-6-
8130ALUSONAVENUE • LA MESA,CA 91942 • TEL: 619.463.6611 FAX: 619.667.1131

Rogers, Anderson, Malody & Scott, LLP
Pension and Postretirement Benefits
We believe that the actuarial assumptions and methods used to measure pension and other postemployment benefit liabilities and costs for financial accounting purposes are appropriate in the circumstances.

There have been no changes or updates to legal information disclosed to you by our attorneys since the date of such legal responses and now.

Tammi J. Royales
Director of Finance
8130 ALLISON AVENUE • LA MESA, CA 91942 • TEL: 619.463.6611 FAX: 619.667.1131

735 E. Carnegie Dr. Suite I 00
San Bernardino, CA 92408
909 889 0871 T
909 889 5361 F
ramscpa.net

PARTNEHS
Brenda L Odie, CPA, MST
Tony P. Shea, CPA
Scott W. Manno, CPA, CGM/\
Leena Shanbhag, CPA, MST, CGM1\
Bradford A. Wclcbir, CPA. MllA, CGMA
Jenny W. Liu, CPA, MST

MANAGERS/ STAFF
Charles De Simoni, CPA
Gardcnya Duran, CPA, CGM/\
Brbmia Schult,. 1.P/\
Seong-Hyca Lee, CPA, MBA
Evelyn Morenti11-Barce11a, CPA
Veronica Hernandez, CPA
I aw;i A1virn, CPA
Xinlu Z<>e Zhang, CPA. MSA
John Maldonado, CPA, MSA
Tt,ao Le, CP,\, MBA
Juli,1 Rodriguez Fucntt,s, CPA, MSA

MEMBEHS
American Institute of
CcrtifiNI Public Accountants
/'Cf'S TIie A/CPA i\//ioncc
(<11 CPI\ finm
0·ovemmc11to/ i\wlil
Qua/it,' Cen1c1
£111/1/oyc,• Reneifl /'Ion
i\uJit Q,wlii)' C,mtcr
California St,cir,ty of
Certified 1'11hlic Accountant,
ROGERS, Ai-JDERSON, MALODY & SCOTT, LLP
CERTIFIED PUBLIC ;\CCOUf,JTANTS, SINCE 19,HJ

REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
AND ON COfl/lPLIANCE AND OTHER MATTERS BASED ON AN

AUDIT OF FINANCIAL STATEMENTS PERFORMED IN

ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Independent Auditor's Report
To the Honorable City Council
City of La Mesa
La Mesa, California
We have audited, 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, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of La Mesa (the City) as of and for the year ended June 30, 2021 and the related notes to the financial statements, which collectively comprise the City's basic financial statements, and have issued our report thereon dated December 17, 2021.

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 City's financial statements will not be prevented, or detected and corrected on a timely Proud Member of basis. A significant deficiency is a deficiency, or a combination of AlliottGlobalAlliance'· deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
-1-
STABILITY, ACCURACY. TRUST.

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 may exist that have not been identified Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance 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 City'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 City's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. -f.7u.s, ~ ... , M~ .R. k-u, LLP.

San Bernardino, California
December 17, 2021
-2-

735 E. Carnegie Dr. Suite I 00
San Bernardino, CA 92408
909 889 0871 T
909 889 5361 F
ramscpa.net

PARTNERS
Brenda L. Odle, CPA, MS'1
Tony P. Shea, CPA
ScotL W. Manno, CPA, CGMA
Leena Shanbhag, C:PA. MST. CGMA
Bradferd A Wclcbir, CPA. MBA. CGMA
Jenny W. Liu, CPA, MST

MANAGERS/ STAFF
Cha1fos De Simoni, Cl'A
Gardcnya Duran, CPA. CGMA
Bri.mn;i Sciiult,, CPA
Scong-Hyea Lee, CPA, MBA
Evelyn Morentin-l\a1T011a, er,\
Veronica Hc111andcz, CPA
la11ra /11virn, C:PA
Xinlu Zoe Zhang, CPA. MSA
John Maldonado, CPA, MSA
Tl,ao le, CPI,, MBA
Juli.1 Rodriguez Fucntc,s, CP1\, MSA

MEMBERS
American Institute of
Certified Public Accountants
PCPS Tile A/CPA Alliance
/i>r CP1\ Firms
c:ove111menMI Audir
Q11nlity Ccn1c1
E111ployec Beor.f)t l'ln11
i\I,dit Q11nli()' r:enter
Califr,rnla SociNy of
Certified Public. Accountants
Proud Member of
AlliottGlobalAlliance'"
ROGERS, AI\JDERSON, MALODY & SCOTT, LLP
CERTlflf:D PUBLIC ;\CCOUNTJ>,l,JTS, Sll'-JC:E I 9•Hl
Independent Accountant's Report
To the Honorable City Council
City of La Mesa, California
We have performed the procedures enumerated below on the accompanying Appropriations Limit Worksheet (as presented in the publication entitled Agreedupon Procedures Applied to the Appropriations Limitation Prescribed by Article XIII-B of the California Constitution) for the year ended June 30, 2021. The City of La Mesa's (the City) management is responsible for the accompanying Appropriations Limit Worksheet for the year ended June 30, 2021.

The City has agreed to and acknowledged that the procedures performed are appropriate to meet the intended purpose of assisting the City in meeting the requirements of Section 1.5 of Article Xlll-8 of the California Constitution.

Additionally, the League of California Cities has agreed to and acknowledged that the procedures performed are appropriate to meet for their purposes. This report may not be suitable for any other purpose. The procedures performed may not address all the items of interest to a user of this report and may not meet the needs of all users of this report and, as such, users are responsible for determining whether the procedures performed are appropriate for their purposes.

The procedures and the associated findings are as follows:

1. We obtained the completed worksheets and compared the limit and annual adjustment factors included in those worksheets to the limit and annual adjustment factors that were adopted by resolution of the City Council. We also compared the population and inflation options included in the aforementioned documents to those that were selected by a recorded vote of the City Council.

Finding: No exceptions were noted as a result of our procedures.

2. For the accompanying Appropriations Limit worksheet, we added last year's limit to total adjustments and agreed the resulting amount to this year's limit.

Finding: No exceptions were noted as a result of our procedures.

3. We agreed the current year information presented in the accompanying Appropriations Limit Worksheet to the other documents referenced in number one above.

Finding: No exceptions were noted as a result of our procedures.

STABILITY. ACCURACY. TRUST.

4. We agreed the prior year appropriations limit presented in the accompanying Appropriations Limit Worksheet to the prior year appropriations limit adopted by the City Council during the prior year.

Finding: No exceptions were noted as a result of our procedures.

We were engaged by the City to perform this agreed-upon procedures engagement and conducted our engagement in accordance with attestation standards established by the AICPA. We were not engaged to and did not conduct an examination or review, the objective of which would be the expression of an opinion or conclusion, respectively, on the accompanying Appropriations Limit Worksheet for the year ended June 30, 2021. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.

We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements related to our agreed-upon procedures engagement.

This report is intended solely for the information and use of the City Council and management of the City of La Mesa, California, and is not intended to be and should not be used by anyone other than these specified parties. However, this report is a matter of public record and its distribution is not limited. /.pe.,,..,c/ A-~ ... , M~ ,R. ktt, LLP.

San Bernardino, California
December 17 2021

City of La Mesa
Appropriations Limit Worksheet
2020- 2021
Growth in non-residential assessed values
due to new construction
Change in County Population
Growth in non-residential assessed values
due to new construction - Converted to a ratio
Change in County Population -
Converted to a ratio
Calculation of factor for ratio of change
(1.075 X 1.0027)
2019 - 2020 Limit
2020 - 2021 Limit
($1,119,328,476 X 1.075 X 1.0027)
* allow for rounding
$1,119,328,476
$1,206,526,963 *
2020 - 2021

7.50%

0.27%

1.075

1.0027

1.0779

~ ~- -~-°'
0 -.. ~-H,-L~_S_A _____________ ,N_T_E_R_O_FF_tc_E_M_E_M_o_ DATE: January 11, 2022
TO: Mayor and Members of the City Council
FROM: Megan Wiegelman, CMC,~Y, Clerk \.\,~
Glenn Sabine, City Attorne~
VIA: Greg Humora, City Manager 6fr
SUBJECT: Consideration and Appointment and/or Reappointment of Councilmembers to Outside Boards, Commissions and Committees, and to the Council Ad hoc and Standing Subcommittees
According to Council policy adopted in December 2011, the Council shall review and consider outside appointments during the first regularly scheduled City Council meeting in January of each year. Attached is a list of Council assignments to outside boards, commissions and committees, and to the Council ad hoc and standing subcommittees from 2021.

The Council shall make the appointments and/or reappointments to the Metropolitan Transit System (MTS) and the San Diego Association of Governments (SANDAG). The Mayor shall make all other appointments and/or reappointments with the approval of the City Council.

At the present time the Fair Political Practices Commission (FPPC) authorizes councilmembers to participate and vote on their appointments to outside boards and commissions irrespective of the fact that such appointments may result in income to the councilmember. In order to exercise such authority, a Form 806, as provided by the FPPC, must be completed and made available on the City's website. Following the appointments and/or reappointments at the January 11th Council meeting, a Form 806 will be prepared and posted.

Staff recommends the Mayor and Council appoint and/or reappoint Councilmembers to the outside boards, commissions and committees, as well as the Council ad hoc and standing subcommittees.

Attachments

2021 COUNCIL APPOINTMENTS TO OUTSIDE BOARDS, COMMISSIONS AND COMMITTEES I
Board, Commission or Date of
Committee Meeting Schedule Current Representatives Appointment Appointed By Compensation East County Economic Third Wednesday of each month at Councilmember Baber 1/12/2021 Mayor w/Council No Compensation Development Council 7:30 a.m. Approval
Harry Griffen Park - JPA Meets annually in May Councilmember Shu 5/25/2021 Mayor w/Council No Compensation Chair
I
Approval
Heartland Quarterly on the fourth Thursday at Councilmember Parent 1/12/2021 I Mayor w/Council $100/meeting Communications Facility 4:00 p.m. Approval
(Primary)
Heartland Quarterly on the fourth Thursday at Councilmember Shu 1/12/2021 Mayor w/Council $100/meeting Communications Facility 4:00 p.m. Approval
(Alternate)
Heartland Fire Training Quarterly on the second Thursday at Councilmember Parent 1/12/2021 Mayor w/Council $100/meeting Facility Authority 4:00 p.m.

I
Approval
(Primary)
Heartland Fire Training Quarterly on the second Thursday at Councilmember Baber 1/12/2021 1 Mayor w/Council $100/meeting Facility Authority 4:00 p.m. Approval
(Alternate)
La Mesa-Spring Valley Meets on an as needed basis Mayor Arapostathis and 1/12/2021 Mayor w/Council No Compensation School District/City of La Councilmember Baber Approval Mesa Joint Steering
Committee (Primary)
La Mesa Spring Valley Meets on an as needed basis VACANT 1/12/2021 Mayor w/Council No Compensation School District/City of La Approval
Mesa Joint Steering
I
Committee (Alternate)
I
I
I I

2021 COUNCIL APPOINTMENTS TO OUTSIDE BOARDS, COMMISSIONS AND COMMITTEES I
Date of I
Board, Commission or
Committee Meeting Schedule Current Representatives Appointment Appointed By Compensation League of California Second Monday of each month at Councilmember Baber 1/12/2021 Mayor w/Council No Compensation Cities San Diego County 11 :30 a.m. Approval
Division
i
Metro Wastewater First Thursday of each month at Councilmember Baber 1/12/2021 I Mayor w/Council $150/meeting JPNCommission noon Approval (3 mtgs./mo. max)
(Primary)
Metro Wastewater First Thursday of each month at Councilmember Shu 1/12/2021 Mayor w/Council 1 $150/meeting JPNCommission noon Approval (3 mtgs./mo. max)
(Alternate)
Metropolitan Transit Once a month on various Thursdays Mayor Arapostathis 5/25/2021 Council $150/meeting System (Primary) at 9:00 a.m.

I
Metropolitan Transit Once a month on various Thursdays Councilmember Shu 5/25/2021 I
Council $150/meeting
System (Alternate) at 9:00 a.m. i
Mission Trails Regional Third Thursday of odd numbered i Councilmember Parent 1/12/2021 Mayor w/Council 1 No Compensation Park Task Force months at 10:00 a.m. Approval
Mission Trails Regional First Tuesday of odd numbered Michele Greenburg McClung 1/12/2021 Mayor w/Council No Compensation Park Citizens' Advisory months at 6:30 p.m. (Representative) Approval Committee Carol Lockwood
(Alternate)
SANDAG Twice a month on various Fridays Councilmember Shu 1/12/2021 Council $150/Board meeting; (Primary) and at varing times, depending on
the committee assignment.

I
i
i

2021 COUNCIL APPOINTMENTS TO OUTSIDE BOARDS, COMMISSIONS AND COMMITTEES Board, Commission or I
I i
Date of
Committee Meeting Schedule Current Representatives Appointment Appointed By Compensation SANDAG Twice a month on various Fridays at 1 Mayor Arapostathis 1/12/2021 Council $150/Board meeting; (First Alternate) varing times, depending on the
committee assignment.

I
SANDAG Twice a month on various Fridays at Councilmember Baber 5/25/2021 I Council $150/Board meeting; (Second Alternate) varing times, depending on the
.committee assignment.

San Diego Community Fourth Thursday of each month at Councilmember Baber 1/12/2021 Mayor w/Council No Compensation Power Board of 5:00 p.m. Approval
Directors I I
San Diego Community I Fourth Thursday of each month at City Manager Humora I
1/12/2021 Mayor w/Council No Compensation
Power Board of 5:00 p.m. Approval
Directors (Alternate)
Sweetwater River Meet twice per year Councilmember Shu 1/12/2021 Mayor w/Council No Compensation Watershed Advisory (2 year term) Approval
Panel I i

2021 COUNCIL APPOINTMENTS TO STANDING AND AD HOC SUBCOMMITTEES i
Council Standing Meeting Schedule Current Representatives Date of Appointed By Compensation Subcommittees Appointment Audit Committee Meets twice a year Mayor Arapostathis 1/12/2021 Mayor w/Council No Compensation Councilmember Baber Approval
'
Future of MacArthur Park Meets on an as-needed basis Mayor Arapostathis 1/12/2021 Mayor w/ Council No Compensation Councilmember Shu 05/25/21 Approval
(Appointment
of Mayor)
'
Downtown Events Meets on an as-needed basis Mayor Arapostathis I 1/12/2021 Mayor w/Council No Compensation I Councilmember Parent Approval
I
Council Ad Hoc Meeting Schedule I Current Representatives Date of Appointed By Compensation Subcommittees Appointment I I
Citizen Emergency Mayor Arapostathis 1/12/2021 Mayor w/Council No Compensation Preparedness VACANT Approval
Subcommittee i
;
Civic Center Master Plan 1/12/2021 Mayor w/Council No Compensation 05/25/21 Approval
Mayor Arapostathis (Appointment
Councilmember Parent of Ma~
Review of the Design Councilmember Baber 1/12/2021 Mayor w/ Council No Compensation Review Board Councilmember Parent Approval
Housing Affordability Councilmember Parent 1/12/2021 Mayor w/ Council No Compensation Subcommittee i Councilmember Shu A02roval
Extension of Proposition L ! Councilmember Baber 1/12/2021 Mayor w/ Council No Compensation Subcommittee i Councilmember Parent Approval I

2021 COUNCIL APPOINTMENTS TO STANDING AND AD HOC SUBCOMMITTEES Review of City Streets for
I
1/12/2021 I Mayor w/ Council / No Compensation
Greater Pedestrian Access Mayor Arapostathis Approval
Subcommittee Councilmember Parent
Business Rebound Mayor Arapostathis 1/12/2021 Mayor w/ Council No Compensation Subcommittee I Councilmember Parent Approval
Animal Welfare I Councilmember Baber 1/12/2021 Mayor w/ Council No Compensation Subcommittee Councilmember Shu Approval
Public Comment Policy I Mayor Arapostathis 2/9/2021 Mayor w/ Council No Compensation Subcommittee Councilmember Parent A proval I
Alvarado Specific Plan Councilmember Baber 3/9/2021 Mayor w/ Council ' No Compensation Subcommittee Councilmember Parent Approval
Climate Action Plan Councilmember Shu 8/2/2021 Mayor w/ Council No Compensation Updates Councilmember Baber I Approval
STANDING AND AD HOC SUBCOMMITTEES THAT WERE DISSOLVED IN 2021 Council Ad Hoc !
Subcommittees Notes I
Climate Emergency Dissolved 02/23/21 with the Councilmember Baber 1/12/2021 Mayor w/ Council No Compensation Resolution Subcommittee adoption of the Resolution Councilmember Shu Approval Declaring a Climate Emergency
Community Police Mayor Arapostathis 1/12/2021 Mayor w/ Council No Compensation Oversight Board Dissolved on 4/13/21 with the Councilmember Weber Approval Nominating Subcommittee appointment of two members to
fill two vacancies created shortly
after the appoointment of the
original members 01/26/2021
Dissolved 9/14/21 after the Mayor Arapostathis
I
7/13/2021 Mayor w/ Council No Compensation
CA and CM Contracts approval of the CM and CA Councilmember Baber Approval Review Subcommittee contract amendments I

DATE:

CITY OF
LAMESA
JEWEL of the HILLS STAFF REPORT
REPORT to the MAYOR and MEMBERS of the CITY COUNCIL
From the CITY MANAGER
January 11, 2022
SUBJECT: Community Police Oversight Board Policies and Procedures ISSUING DEPARTMENT: CITY MANAGER'S OFFICE
SUMMARY:

Issue:

Should the City Council adopt the procedures for the City of La Mesa Community Police Oversight Board for complaint intake, audit handling, and reporting? Recommendation:

The City Council should adopt the procedures for the City of La Mesa Community Police Oversight Board for complaint intake, audit handling, and reporting .

Fiscal Impact:

There is no fiscal impact associated with the recommended action.

Strategic Goals:
. • Safe Community
• Continue to Improve High Quality Municipal Services
BACKGROUND:

On September 15, 2020, the City Council adopted Ordinance 2020-2881 establishing the Community Police Oversight Board (CPOB). Since its first meeting in February 2021, staff has worked with the CPOB to complete essential tasks necessary to ensure its effective operation. These activities included adopting Bylaws, drafting an Annual Work Plan, hiring an Independent Police Auditor, and developing Policies and Procedures related to the incidents outlined in the CPOB Ordinance.

Report to Mayor and Council Members
Date: January 11, 2022
Page: 2 of 3
CPOB General Counsel and the Independent Police Auditor (IPA) worked with the CPOB to develop draft Policies and Procedures that outline the process by which complaints alleging misconduct by a La Mesa Police Department sworn officer are filed, audited, and reported. The draft procedures were presented to the CPOB for review and adopted at its November 17, 2021 meeting. On November 23, 2021, staff presented the draft CPOB Policies and Procedures to the City Council for consideration and potential adoption. The City Council requested that staff meet and discuss the draft Policies and Procedures with the La Mesa Police Officers' Association (POA).

DISCUSSION:

Pursuant to City Council direction, staff met with the POA and its legal counsel to discuss the Draft Policies and Procedures. The POA raised two questions during the discussion.

First, the POA requested clarification concerning whether the IPA would investigate routine personnel matters, such as those involving tardiness or similar administrative issues. The second question posed by the POA was regarding ongoing communication between members of the CPOB and a complainant. To address questions posed by the POA, CPOB General Counsel updated the following sections of the document:
• Article IV, Section 1 (a) was updated to clarify that the IPA's review of complaints does not pertain to routine personnel matters, which are addressed through a progressive displinary process administered by LMPD. The proposed edits are intended to better define that the IPA's role is to investigate complaints related to bias, use of force, or corruption as stipulated by the CPOB Ordinance. • Article VI, Section 4(c) of the Policies and Procedures was clarified to state that communication between the CPOB and a complainant would include only periodic status updates regarding an investigation. The CPOB would not engage in ongoing communication with a complainant regarding the audit and does not have access to confidential information pursuant to State law.

The CPOB met to discuss the proposed edits on December 15, 2021. The CPOB provided additional clarification to Article IV, Section (1 )(a) of the Policies and Procedures. Staff shared the updated document, as approved by the CPOB, with the POA on December 20, 2021. Staff is providing a redline and a clean version of the Policies and Procedures for the City Council's information (Attachments A and B). The procedures for complaint intake, audit handling, and reporting are now being presented to the City Council for consideration and formal adoption.

Report to Mayor and Council Members
Date: January 11, 2022
Page: 3 of 3
Reviewed by: Respectfully submitted by:

GregHGmora
City Manager
Attachment A: Redline Policies and Procedures
Attachment B: Clean Policies and Procedures
Manager

PROCEDURES
of the
City of La Mesa
Community Police Oversight Board
for Complaint Intake, Audit Handling, and Reporting

ARTICLE I - DEFINITIONS
Allegation of Misconduct. An accusation against a La Mesa Police Department ("LMPD") sworn officer of a violation of the law or failure to comply with the LMPD's policies and procedures.

CPOB. Community Police Oversight Board.

Complaint. A Complaint is a statement filed by an aggrieved person that alleges misconduct by a sworn officer of the La Mesa Police Department. Complaints may be initiated in writing, in person, by mail, by telephone, by email, or through the CPOB website, and may be submitted to the CPOB, IP A, or LMPD. LMPD or an employee of the LMPD may also file a Complaint alleging misconduct by an officer. These are known as internally generated complaints.

Complainant. A Complainant is any person who files a Complaint with the CPOB, IP A, or LMPD.

Department. The Depaiiment refers to La Mesa Police Depaiiment or "LMPD." IPA. Independent Police Auditor.

ARTICLE II - FILING COMPLAINTS
A community member may file a Complaint regarding alleged misconduct by a Department officer to the CPOB, IPA, or the LMPD.

Section 1. The Complaint Form
(a) The CPOB shall make a complaint form available at City Hall and on its website.
(b) The CPOB shall publish instructions for filing a Complaint on its website. The complaint form itself must also indicate how it may be filed. (c) The CPOB shall establish a secure, accessible public drop box at the City Clerk's Office for receiving Complaints.
1

(d) This procedure shall not be construed as interfering with the LMPD's own procedures for receiving Complaints, with whom a community member may file a Complaint directly.

ARTICLE III -

INTAKE ACTIONS ON COMPLAINTS

RECEIVED DIRECTLY BY THE CPOB OR IPA
Section 1. Receipt of Complaints
The CPOB may directly receive Complaints in one of several ways: by online submission or email, by submission to the CPOB public drop box, or via the IP A. When a Complainant sends a Complaint directly to +the IP A, the IP A shall forward a copy of the Complaint all Complaints he or she recei11es directly to the CPOB complaint email address.

Complaints made to the IP A can be made via email, phone, or in person.

Section 2. Registering of Complaints
(a) The CPOB Chair shall designate, on a rotating annual basis, a CPOB member to ensure all Complaints directly received by the CPOB are delivered to the IP A and Chief of Police.
(b) The IP A shall maintain a Complaint-tracking database that organizes Complaints by category type, by Complainant, and by tracking number. The IPA shall use the Complaint-tracking database to document the receipt, status, and disposition of all Complaints. The LMPD shall provide to the IP A its Internal Affairs Complaint number, for ease of tracking with a common number. ( c) The CPOB shall have access at all times to the Complaint-tracking database. In order to comply with all state laws requiring the confidentiality of police depaiiment records and information as well as the privacy rights of all individuals involved in the process, the IP A shall omit any confidential info1mation that would identify the officer(s) who are the subject of the Complaint.

ARTICLEIVINTAKE ACTIONS ON COMPLAINTS

REFERRED TO THE IPA BY THE LMPD
Section 1. Registering of Complaints
(a) Copies of all Complaints filed directly with the LMPD will be forwarded to the IP A. LMPD generated complaints in vmich the IPA has an investigative interest are those regarding serious misconduct. LMPD-generated complaints concerning routine personnel matters addressed through the LMPD's progressive disciplinary process and unrelated to bias, use of force, or corruption, such as excessive tardiness and other minor personnel infractions, 2

would not be subject to audits by the IPA unless the IPA identifies a clear pattern of minor personnel infractions.
(b) Upon receipt of a Complaint from the LMPD, the IPA shall register the Complaint in the Complaint-tracking database. In order to comply with all state laws requiring the confidentiality of police depaiiment records and info1mation as well as the privacy rights of all individuals involved in the process, the IPA shall omit any confidential information that would identify the officer(s) who are the subject of the Complaint.

ARTICLE V -TRACKING COMPLAINTS AND INVESTIGATIONS
Section 1. Overview
(a) The IPA shall, upon request, receive notifications of progress of pending investigations and be given an opporiunity to review activity in pending investigations. The IP A shall also be notified by the LMPD of any new allegations of misconduct which are developed in the course of the investigation of the original allegations.
(b) When the LMPD completes an investigation of a Complaint, the Chief of Police will notify the IPA and the Complainant as to the disposition, subject to Penal Code Section 832.7(f). LMPD will provide access to the IPA of all investigative steps, interviews, evidence and recordings so as to facilitate IP A's mandate to audit cases, as applicable.
( c) Upon notification by the Chief of Police, the IP A shall update the Complainttracking database with the disposition of the Complaint:

1. Unfounded: the alleged act did not occur.

2. Exonerated: the alleged act occurred but was justified, legal, and proper.

3. Not sustained: the investigation produced insufficient information to prove clearly or disprove the allegations.

4. Sustained: the accused officer committed all or part of the alleged acts of misconduct.
( d) Upon conclusion of the LMPD investigation, the IP A may request all relevant case files for review and a determination the investigation was thorough and complete.

Section 2. Reporting to the CPOB
(a) At least quarterly, the CPOB shall receive reports from the IPA on the number of Complaints filed, the number of open investigations of Complaints, the disposition of and any action taken on filed Complaints, and the number of 3

concluded investigations by LMPD. The report shall summarize all Complaints received by the IP A, the CPOB, and the LMPD.
(b) As for any investigation that has been concluded and audited by the IP A since his or her last repo1i, the repo1i shall include the IPA's dete1mination as to whether the investigation was thorough and complete, whether the IP A agrees or disagrees with the finding(s), and any recommendations as set f01ih in Article VIII section (1 )(b )(2).
( c) The report to the CPOB shall also include the number of cases being audited by the IPA.

ARTICLE VI - AUDITS
Section 1. Automatic Audits
( a) The IP A shall audit the LMPD investigation of an incident of use of force involving accidental discharge of weapons, officer-involved shootings, officerinvolved deaths, or officer-involved interactions resulting in serious bodily lllJury.
(b) The IP A shall have discretion to interview witnesses and shall have access to all LMPD files. All parties who have access to confidential info1mation shall comply with all confidentiality requirements of LMPD, La Mesa, Government Code section 3300 et seq. (the California Public Safety Officers Procedural Bill of Rights), and all other state and federal laws. As part of conducting an audit, the IP A will interview the Chief of Police or the Chiefs designee about the investigation that took place.

Section 2. Discretionary Audits
(a) The IPA shall have the discretion to review any investigation(s) of a Complaint conducted by the LMPD to determine if the investigation was complete, thorough, objective, and fair. The IPA, at their discretion, shall have authority to monitor or recommend follow-up investigation into any citizen Complaint or allegations that is handled by LMPD.
(b) The IP A shall have discretion to interview witnesses and shall have access to all LMPD files. All paiiies who have access to confidential information shall comply with all confidentiality requirements of LMPD, La Mesa, and all state and federal laws.
( c) When the IP A does not exercise their discretion to review an investigation of a Complaint conducted by the LMPD, the CPOB may, in such circumstance, require a rep01i with additional information from the IP A on that matter, and after consultation with the IP A, if necessary, initiate an audit. 4

Section 3. Audits of past incidents
(a) The CPOB may request that the IPA audit the investigation of a past incident of use of force, harassment or discrimination, and make a determination as to whether it was thorough and complete. This review shall not impact the disposition of the investigation but the IPA and the CPOB may make recommendations concerning the investigation.
(b) All materials in the investigative file concerning the past incident shall be made available to the IP A. The IP A shall prepare a case summary for use during the public meeting of the CPOB that protects the confidentiality of the Complainant, witnesses, and the officer(s) involved.
(c) The purpose of the CPO B's review of past incidents includes the following:

1. Identify deficiencies in the complaint system (intake and classification);

2. Develop recommendations for policies, procedures, practices, and training improvements;

3. Make judgments about the quality of the investigation;

4. Increase transparency by analyzing the rationale for the case disposition; and

5. Increase transparency by the public discussion of a Complaint.

Section 4. Communication with Complainant
(a) The LMPD shall inform the Complainant at the conclusion of the Internal Affairs investigation as to the disposition of the Complaint.
(b) The CPOB shall use the IPA's qumierly repo1is to inform Complainants whether an audit has been initiated, when an audit has been completed, and the outcome of the audit. The CPOB shall develop a form for this communication that informs Complainants that the outcome of the IP A audit is advisory and cannot directly change the outcome of the Internal Affairs investigation or the Chief of Police's decision.
(c) Nothing in this section shall prevent the CPOB from having communicatingen with the Complainant during the pendency of the Internal Affairs investigation. This communication shall be for the purpose of providing status updates and would not include any factual or substantive discussion of the investigation.

ARTICLE VII - VO LUNT ARY MEDIATION PROGRAM
The CPOB, with the input of the IP A, shall develop a proposal for a voluntary alternative dispute resolution process for resolving those Complaints which involve conduct 5

which may most appropriately be con-ected or modified through less formal means. The CPOB shall present the proposal to the Chief of Police and City Council.

ARTICLE VIII - PROCEDURES FOR PROVIDING RECOMMENDATIONS

AS TO COMPLAINTS OR SERIOUS INCIDENTS
Section 1. IP A Audit Report and Its Contents
( a) Upon completion of an audit of an investigation, the IP A shall prepare a report of its audit, which will be sent to the CPOB pursuant to the remaining Sections in this Article. In so doing, the IP A shall comply with all state laws requiring the confidentiality of police depaiiment records and infmmation as well as the privacy rights of all individuals involved in the process. To that end, the IPA shall ensure that an audit report contains no confidential identifying information about any officers. The IPA's findings shall be advisory and shall not directly change the outcome of the LMPD investigation or the Chief of Police's decision. No report to the CPOB shall contain the name of any individual police officer, unless permitted by law.
(b) The audit report shall:

1. Indicate and explain whether or not the Complaint disposition was suppmied by the evidence;

2. Recommend that the LMPD reopen the investigation if it finds either:

1. The investigation was materially incomplete or inadequate and the IP A has reason to believe that fmiher investigation is likely to reveal facts that could change the disposition; or

11. The disposition reached by the LMPD is not supported by substantial evidence;

3. State any recommendations regarding the handling of the Complaint and the investigation process; and

4. Identify any other relevant policy, procedural or training issues for further consideration, and offer recommendations as appropriate. (c) Presentation of the audit repmi.

1. The IP A shall meet with the CPOB at least once per quaiier and present any completed audit repmis from the previous quarter.

2. In connection with the presentation of any completed audit reports, the IP A will present to the CPOB his or her formal conclusion regarding further investigation and processes.
6

The CPOB will have an oppmiunity to review and comment on the IPA's fmmal conclusion and any applicable recommendations.

Section 2. Confidentiality Review
The IPA shall provide final audit reports to the CPOB's General Counsel, who shall review the audit repmis to ensure that they do not contain any confidential identifying information. If the CPOB's General Counsel determines that an audit report is not appropriate for public disclosure, the General Counsel shall revise the audit report so that it may properly be publicly disclosed. Any revisions must not alter any findings or recommendations of the audit repmi. Once the CPOB's General Counsel has reviewed or edited an audit repo1i such that it may be publicly disclosed, the General Counsel shall electronically send the publicly disclosable rep01i to the entire CPOB.

Section 3. Delivery of Recommendations
If the CPOB votes to ratify the IP A recommendation with or without additional comment, the IP A shall deliver his or her recommendation to the Chief of Police in writing, in the form of a qumierly report with any additional comment from the CPOB, with copies to the City Manager and City Council.

Section 4. Recording of Recommendations.
(a) The IPA shall retain a record of any recommendation delivered to the Chief of Police.
(b) The IP A shall record in the IP A qumierly repo1i his or her recommendation, as well as any further comment by the CPOB where applicable, and the date of its delivery to the Chief of Police.
( c) The IP A and CPOB shall receive, within thirty days of delivery of any recommendations of any kind, a response in writing from the Chief of Police.

The Chief of Police may request from the City Manager a single 30-day extension to respond to any recommendation upon a showing of good cause. ( d) Upon receipt of a response to the recommendation from the Chief of Police, the IP A shall note the response in the IP A quarterly repmi and retain a record of the response.
( e) The IP A shall also track the number and type of recommendations delivered to the Police Chief, and the number and type of recommendations implemented, and repmi this info1mation to the CPOB. The IP A shall track the number of cases in which its recommendations are rejected and report this information to the CPOB.
7

Section 5. Appropriate Scope of Recommendations
Recommendations to the Chief of Police shall focus on process rather than outcomes, such as whether the LMPD investigation was fair and thorough, whether findings were reasonable and evidence-based, and whether the disposition was supported by substantial evidence. Recommendations can also reflect the IP A's considerations for best practices to help mitigate future instances in similar situations which could lead to misunderstandings or loss of community confidence.

Section 6. Public Disclosure and Discussion of Audit Reports The CPOB may post publicly disclosable reports on its public webpage located on the City's website, and the CPOB may discuss in open session the publicly disclosed report so long as the CPOB does not reveal any confidential information identifying any officer or any other confidential information beyond the information that appears in the public report.

ARTICLE IX - PROCESS FOR PROVIDING RECOMMENDATIONS
AS TO LMPD'S POLICIES AND PROCEDURES.

Section 1. Annual CPOB Repo1is
City of La Mesa Municipal Code section 2.30.100, subdivisions (g) and (h), and section

2.30.110 require the CPOB to draft and issue several public reports annually ("CPOB Annual Reports").
(a) The CPOB shall issue an Annual Repmi on each of the following:

1. LMPD policies, procedures, practices, and training as to regular operations;

2. LMPD policies, procedures, and practices as to hiring and promotions;

3. LMPD policies, procedures, practices, and training as to internal LMPD investigations of misconduct;

4. Initial and in-service LMPD trainings in de-escalation techniques, human relations instruction, and implicit bias training;

5. LMPD policies, procedures, practices, and training as to communityoriented policing; and

6. A repmi that studies, develops, and recommends alternative crimeprevention policies and strategies and assesses and makes recommendations regarding the role in public safety of social services, including, but not limited to, those related to mental health, alcohol and substance abuse, homelessness, juvenile justice, and education. 8

(b) An annual report may be in the form of an update from a previous year's report. ( c) In consultation with the IP A, the CPOB may issue additional public reports on any and all other areas of policing or La Mesa Police Department policies, procedures, practices, and training that the CPOB finds appropriate for review. ( d) The Chairperson shall establish a special ad hoc subcommittee for each CPOB Annual Report comprised of less than a majority of CPOB members. Each special subcommittee shall be responsible for researching, drafting and presenting to the CPOB its assigned CPOB Annual Report. (e) Each special subcommittee shall present a draft CPOB Annual Report to the CPOB at a regular public meeting. The CPOB shall vote either to send the report back to the special subcommittee with specific recommended changes, or to approve the Report as final.
(f) Final, approved CPOB Annual Rep01is shall be sent to the Chief of Police, the City Manager, and the City Council, and shall be publicly posted on the CPOB's webpage.
(g) CPOB Annual Rep01is shall pe1iain to a calendar year, and must be made public and final no later than the end of February of the following calendar year. This deadline may be extended by no more than 60 days by a majority of CPOB voting members.

Section 2. Semi-Annual CPOB Repo1is
City of La Mesa Municipal Code section 2.30.1 lO(b) requires the CPOB to, in conjunction with the Independent Police Auditor, issue a semi-annual public repo1i ("CPOB Semi-Annual Repo1i").
(a) The required CPOB Semi-Annual Rep01i shall present the number and types of Complaints reviewed and the CPOB's responses, investigative findings, analysis of police data, police progress on CPOB recommendations and other updates relevant to the mission of the CPOB.
(b) The Chairperson shall establish a special ad hoc subcommittee to compile and draft these Semi-Annual Reports.
(c) This special subcommittee shall present a draft Semi-Annual Report to the CPOB at a regular public meeting. The CPOB shall vote either to send the repo1i back to the special subcommittee with specific recommended changes, or to approve the Rep01i as final.
(d) Final, approved CPOB Semi-Annual Rep01is shall be sent to the Chief of Police, the City Manager, the Independent Police Auditor, and the City Council, and shall be publicly posted on the CPOB's webpage.
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(e) CPOB Semi-Annual Reports shall pe1iain to January-June and July-December, respectively, of each calendar year, and must be made public and final no later than 30 days after the conclusion of the relevant six-month period, with the CPOB's first Semi-Annual Rep01i due in January 2022. These deadlines may be extended by no more than 60 days by a majority of CPOB voting members.

Section 3. Confidentiality of CPOB Rep01is
In order to comply with all state laws requiring the confidentiality of police depaiiment records and information as well as the privacy rights of all individuals involved in the process, all CPOB Reports shall omit any confidential infom1ation that would identify any officer(s) who are the subject of any Complaint.
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PROCEDURES
of the
City of La Mesa
Community Police Oversight Board
for Complaint Intake, Audit Handling, and Reporting

ARTICLE I - DEFINITIONS
Allegation of Misconduct. An accusation against a La Mesa Police Department ("LMPD") sworn officer of a violation of the law or failure to comply with the LMPD's policies and procedures.

CPOB. Community Police Oversight Board.

Complaint. A Complaint is a statement filed by an aggrieved person that alleges misconduct by a sworn officer of the La Mesa Police Department. Complaints may be initiated in writing, in person, by mail, by telephone, by email, or through the CPOB website, and may be submitted to the CPOB, IP A, or LMPD. LMPD or an employee of the LMPD may also file a Complaint alleging misconduct by an officer. These are known as internally generated complaints.

Complainant. A Complainant is any person who files a Complaint with the CPOB, IP A, or LMPD.

Department. The Department refers to La Mesa Police Department or "LMPD." IPA. Independent Police Auditor.

ARTICLE II - FILING COMPLAINTS
A community member may file a Complaint regarding alleged misconduct by a Department officer to the CPOB, IPA, or the LMPD.

Section 1. The Complaint Form
(a) The CPOB shall make a complaint form available at City Hall and on its website.
(b) The CPOB shall publish instructions for filing a Complaint on its website. The complaint form itself must also indicate how it may be filed. ( c) The CPOB shall establish a secure, accessible public drop box at the City Clerk's Office for receiving Complaints.
1

(d) This procedure shall not be construed as interfering with the LMPD's own procedures for receiving Complaints, with whom a community member may file a Complaint directly.

ARTICLE III -

INTAKE ACTIONS ON COMPLAINTS

RECEIVED DIRECTLY BY THE CPOB OR IPA
Section 1. Receipt of Complaints
The CPOB may directly receive Complaints in one of several ways: by online submission or email, by submission to the CPOB public drop box, or via the IP A. When a Complainant sends a Complaint directly to the IP A, the IP A shall forward a copy of the Complaint to the CPOB complaint email address. Complaints made to the IP A can be made via email, phone, or in person.

Section 2. Registering of Complaints
(a) The CPOB Chair shall designate, on a rotating annual basis, a CPOB member to ensure all Complaints directly received by the CPOB are delivered to the IP A and Chief of Police.
(b) The IPA shall maintain a Complaint-tracking database that organizes Complaints by category type, by Complainant, and by tracking number. The IPA shall use the Complaint-tracking database to document the receipt, status, and disposition of all Complaints. The LMPD shall provide to the IP A its Internal Affairs Complaint number, for ease of tracking with a common number. (c) The CPOB shall have access at all times to the Complaint-tracking database. In order to comply with all state laws requiring the confidentiality of police department records and information as well as the privacy rights of all individuals involved in the process, the IPA shall omit any confidential information that would identify the officer(s) who are the subject of the Complaint.

ARTICLEIVINTAKE ACTIONS ON COMPLAINTS

REFERRED TO THE IPA BY THE LMPD
Section 1. Registering of Complaints
(a) Copies of all Complaints filed directly with the LMPD will be forwarded to the IP A. LMPD-generated complaints concerning routine personnel matters addressed through the LMPD's progressive disciplinary process and umelated to bias, use of force, or c01Tuption, such as excessive tardiness and other minor personnel infractions, would not be subject to audits by the IP A unless the IP A identifies a clear pattern of minor personnel infractions. 2

(b) Upon receipt of a Complaint from the LMPD, the IP A shall register the Complaint in the Complaint-tracking database. In order to comply with all state laws requiring the confidentiality of police department records and information as well as the privacy rights of all individuals involved in the process, the IP A shall omit any confidential info1mation that would identify the officer(s) who are the subject of the Complaint.

ARTICLE V - TRACKING COMPLAINTS AND INVESTIGATIONS
Section 1. Overview
(a) The IPA shall, upon request, receive notifications of progress of pending investigations and be given an opportunity to review activity in pending investigations. The IP A shall also be notified by the LMPD of any new allegations of misconduct which are developed in the course of the investigation of the original allegations.
(b) When the LMPD completes an investigation of a Complaint, the Chief of Police will notify the IP A and the Complainant as to the disposition, subject to Penal Code Section 832.7(£). LMPD will provide access to the IPA of all investigative steps, interviews, evidence and recordings so as to facilitate IPA's mandate to audit cases, as applicable.
( c) Upon notification by the Chief of Police, the IP A shall update the Complainttracking database with the disposition of the Complaint:

1. Unfounded: the alleged act did not occur.

2. Exonerated: the alleged act occurred but was justified, legal, and proper.

3. Not sustained: the investigation produced insufficient information to prove clearly or disprove the allegations.

4. Sustained: the accused officer committed all or part of the alleged acts of misconduct.
(d) Upon conclusion of the LMPD investigation, the IPA may request all relevant case files for review and a dete1mination the investigation was thorough and complete.

Section 2. Reporting to the CPOB
(a) At least quarterly, the CPOB shall receive reports from the IPA on the number of Complaints filed, the number of open investigations of Complaints, the disposition of and any action taken on filed Complaints, and the number of concluded investigations by LMPD. The report shall summarize all Complaints received by the IPA, the CPOB, and the LMPD.
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(b) As for any investigation that has been concluded and audited by the IP A since his or her last report, the report shall include the IP A's dete1mination as to whether the investigation was thorough and complete, whether the IP A agrees or disagrees with the finding(s), and any recommendations as set forth in Article VIII section (1 )(b )(2).
( c) The report to the CPOB shall also include the number of cases being audited by the IPA.

ARTICLE VI - AUDITS
Section 1. Automatic Audits
( a) The IP A shall audit the LMPD investigation of an incident of use of force involving accidental discharge of weapons, officer-involved shootings, officerinvolved deaths, or officer-involved interactions resulting in serious bodily lllJury.
(b) The IP A shall have discretion to interview witnesses and shall have access to all LMPD files. All parties who have access to confidential information shall comply with all confidentiality requirements of LMPD, La Mesa, Government Code section 3300 et seq. (the California Public Safety Officers Procedural Bill of Rights), and all other state and federal laws. As paii of conducting an audit, the IP A will interview the Chief of Police or the Chief's designee about the investigation that took place.

Section 2. Discretionary Audits
(a) The IPA shall have the discretion to review any investigation(s) of a Complaint conducted by the LMPD to dete1mine if the investigation was complete, thorough, objective, and fair. The IP A, at their discretion, shall have authority to monitor or recommend follow-up investigation into any citizen Complaint or allegations that is handled by LMPD.
(b) The IP A shall have discretion to interview witnesses and shall have access to all LMPD files. All paiiies who have access to confidential information shall comply with all confidentiality requirements of LMPD, La Mesa, and all state and federal laws.
( c) When the IP A does not exercise their discretion to review an investigation of a Complaint conducted by the LMPD, the CPOB may, in such circumstance, require a report with additional information from the IP A on that matter, and after consultation with the IP A, if necessary, initiate an audit.

Section 3. Audits of past incidents
4

(a) The CPOB may request that the IPA audit the investigation of a past incident of use of force, harassment or discrimination, and make a determination as to whether it was thorough and complete. This review shall not impact the disposition of the investigation but the IPA and the CPOB may make recommendations concerning the investigation.
(b) All materials in the investigative file concerning the past incident shall be made available to the IP A. The IP A shall prepare a case summary for use during the public meeting of the CPOB that protects the confidentiality of the Complainant, witnesses, and the officer(s) involved.
(c) The purpose of the CPO B's review of past incidents includes the following:

1. Identify deficiencies in the complaint system (intake and classification);

2. Develop recommendations for policies, procedures, practices, and training improvements;

3. Make judgments about the quality of the investigation;

4. Increase transparency by analyzing the rationale for the case disposition; and

5. Increase transparency by the public discussion of a Complaint.

Section 4. Communication with Complainant
(a) The LMPD shall info1m the Complainant at the conclusion of the Internal Affairs investigation as to the disposition of the Complaint.
(b) The CPOB shall use the IPA's quarterly reports to inform Complainants whether an audit has been initiated, when an audit has been completed, and the outcome of the audit. The CPOB shall develop a form for this communication that informs Complainants that the outcome of the IP A audit is advisory and cannot directly change the outcome of the Internal Affairs investigation or the Chief of Police's decision.
(c) Nothing in this section shall prevent the CPOB from communicating with the Complainant during the pendency of the Internal Affairs investigation. This communication shall be for the purpose of providing status updates and would not include any factual or substantive discussion of the investigation.

ARTICLE VII - VOLUNTARY MEDIATION PROGRAM
The CPOB, with the input of the IPA, shall develop a proposal for a voluntary alternative dispute resolution process for resolving those Complaints which involve conduct 5

which may most appropriately be corrected or modified through less formal means. The CPOB shall present the proposal to the Chief of Police and City Council.

ARTICLE VIII - PROCEDURES FOR PROVIDING RECOMMENDATIONS

AS TO COMPLAINTS OR SERIOUS INCIDENTS
Section 1. IP A Audit Repmi and Its Contents
(a) Upon completion of an audit of an investigation, the IPA shall prepare a repmi of its audit, which will be sent to the CPOB pursuant to the remaining Sections in this A1iicle. In so doing, the IP A shall comply with all state laws requiring the confidentiality of police depmiment records and information as well as the privacy rights of all individuals involved in the process. To that end, the IPA shall ensure that an audit report contains no confidential identifying inf01mation about any officers. The IPA's findings shall be advisory and shall not directly change the outcome of the LMPD investigation or the Chief of Police's decision. No repo1i to the CPOB shall contain the name of any individual police officer, unless permitted by law.
(b) The audit repmi shall:

1. Indicate and explain whether or not the Complaint disposition was suppmied by the evidence;

2. Recommend that the LMPD reopen the investigation if it finds either:

1. The investigation was materially incomplete or inadequate and the IP A has reason to believe that further investigation is likely to reveal facts that could change the disposition; or

11. The disposition reached by the LMPD is not supported by substantial evidence;

3. State any recommendations regarding the handling of the Complaint and the investigation process; and

4. Identify any other relevant policy, procedural or training issues for fmiher consideration, and offer recommendations as appropriate. ( c) Presentation of the audit repmi.

1. The IP A shall meet with the CPOB at least once per qumier and present any completed audit reports from the previous qumier.

2. In com1ection with the presentation of any completed audit repo1is, the IP A will present to the CPOB his or her formal conclusion regarding fmiher investigation and processes.
6

The CPOB will have an oppo1iunity to review and comment on the IPA's fo1mal conclusion and any applicable recommendations.

Section 2. Confidentiality Review
The IPA shall provide final audit reports to the CPOB's General Counsel, who shall review the audit rep01is to ensure that they do not contain any confidential identifying information. If the CPOB's General Counsel determines that an audit repo1i is not appropriate for public disclosure, the General Counsel shall revise the audit report so that it may properly be publicly disclosed. Any revisions must not alter any findings or recommendations of the audit rep01i. Once the CPOB's General Counsel has reviewed or edited an audit report such that it may be publicly disclosed, the General Counsel shall electronically send the publicly disclosable report to the entire CPOB.

Section 3. Delivery of Recommendations
If the CPOB votes to ratify the IP A recommendation with or without additional comment, the IP A shall deliver his or her recommendation to the Chief of Police in writing, in the form of a quaiierly rep01i with any additional comment from the CPOB, with copies to the City Manager and City Council.

Section 4. Recording of Recommendations.
(a) The IPA shall retain a record of any recommendation delivered to the Chief of Police.
(b) The IP A shall record in the IP A quarterly repo1i his or her recommendation, as well as any fmiher comment by the CPOB where applicable, and the date of its delivery to the Chief of Police.
( c) The IP A and CPOB shall receive, within thi1iy days of delivery of any recommendations of any kind, a response in writing from the Chief of Police.

The Chief of Police may request from the City Manager a single 30-day extension to respond to any recommendation upon a showing of good cause. (d) Upon receipt of a response to the recommendation from the Chief of Police, the IP A shall note the response in the IP A quaiierly report and retain a record of the response.
( e) The IP A shall also track the number and type of recommendations delivered to the Police Chief, and the number and type of recommendations implemented, and rep01i this info1mation to the CPOB. The IP A shall track the number of cases in which its recommendations are rejected and rep01i this information to the CPOB.
7

Section 5. Appropriate Scope of Recommendations
Recommendations to the Chief of Police shall focus on process rather than outcomes, such as whether the LMPD investigation was fair and thorough, whether findings were reasonable and evidence-based, and whether the disposition was supported by substantial evidence. Recommendations can also reflect the IP A's considerations for best practices to help mitigate future instances in similar situations which could lead to misunderstandings or loss of community confidence.

Section 6. Public Disclosure and Discussion of Audit Reports The CPOB may post publicly disclosable reports on its public webpage located on the City's website, and the CPOB may discuss in open session the publicly disclosed report so long as the CPOB does not reveal any confidential information identifying any officer or any other confidential information beyond the information that appears in the public report.

ARTICLE IX- PROCESS FOR PROVIDING RECOMMENDATIONS
AS TO LMPD'S POLICIES AND PROCEDURES.

Section 1. Annual CPOB Repmis
City of La Mesa Municipal Code section 2.30.100, subdivisions (g) and (h), and section

2.30.110 require the CPOB to draft and issue several public repmis annually ("CPOB Annual Repo1is").
(a) The CPOB shall issue an Annual Repmi on each of the following:

1. LMPD policies, procedures, practices, and training as to regular operations;

2. LMPD policies, procedures, and practices as to hiring and promotions;

3. LMPD policies, procedures, practices, and training as to internal LMPD investigations of misconduct;

4. Initial and in-service LMPD trainings in de-escalation techniques, human relations instruction, and implicit bias training;

5. LMPD policies, procedures, practices, and training as to communityoriented policing; and

6. A repmi that studies, develops, and recommends alternative crimeprevention policies and strategies and assesses and makes recommendations regarding the role in public safety of social services, including, but not limited to, those related to mental health, alcohol and substance abuse, homelessness, juvenile justice, and education. 8

(b) An annual report may be in the f01m of an update from a previous year's report. ( c) In consultation with the IP A, the CPOB may issue additional public reports on any and all other areas of policing or La Mesa Police Department policies, procedures, practices, and training that the CPOB finds appropriate for review. ( d) The Chairperson shall establish a special ad hoc subcommittee for each CPOB Annual Repo1i comprised of less than a majority of CPOB members. Each special subcommittee shall be responsible for researching, drafting and presenting to the CPOB its assigned CPOB Annual Rep01i. (e) Each special subcommittee shall present a draft CPOB Annual Rep01i to the CPOB at a regular public meeting. The CPOB shall vote either to send the rep01i back to the special subcommittee with specific recommended changes, or to approve the Report as final.
(f) Final, approved CPOB Annual Reports shall be sent to the Chief of Police, the City Manager, and the City Council, and shall be publicly posted on the CPOB's webpage.
(g) CPOB Annual Rep01is shall pe1iain to a calendar year, and must be made public and final no later than the end of February of the following calendar year. This deadline may be extended by no more than 60 days by a majority of CPOB voting members.

Section 2. Semi-Annual CPOB Rep01is
City of La Mesa Municipal Code section 2.30.1 lO(b) requires the CPOB to, in conjunction with the Independent Police Auditor, issue a semi-annual public rep01i ("CPOB Semi-Annual Report").
(a) The required CPOB Semi-Annual Report shall present the number and types of Complaints reviewed and the CPOB's responses, investigative findings, analysis of police data, police progress on CPOB recommendations and other updates relevant to the mission of the CPOB.
(b) The Chairperson shall establish a special ad hoc subcommittee to compile and draft these Semi-Annual Reports.
(c) This special subcommittee shall present a draft Semi-Annual Rep01i to the CPOB at a regular public meeting. The CPOB shall vote either to send the rep01i back to the special subcommittee with specific recommended changes, or to approve the Rep01i as final.
(d) Final, approved CPOB Semi-Annual Rep01is shall be sent to the Chief of Police, the City Manager, the Independent Police Auditor, and the City Council, and shall be publicly posted on the CPOB's webpage.
9

(e) CPOB Semi-Annual Repmis shall pe1iain to January-June and July-December, respectively, of each calendar year, and must be made public and final no later than 30 days after the conclusion of the relevant six-month period, with the CPOB's first Semi-Annual Repmi due in January 2022. These deadlines may be extended by no more than 60 days by a majority of CPOB voting members.

Section 3. Confidentiality of CPOB Repmis
In order to comply with all state laws requiring the confidentiality of police department records and information as well as the privacy rights of all individuals involved in the process, all CPOB Reports shall omit any confidential information that would identify any officer(s) who are the subject of any Complaint.
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DATE:

CITY OF
LAMESA
JEWEL of the HILLS STAFF REPORT
REPORT to the MAYOR and MEMBERS of the CITY COUNCIL
From the CITY MANAGER
January 11, 2022
SUBJECT: Public Comment Policy for City Council and Board and Commission Meetings and discussion regarding health and safety protocols related to in-person City Council meetings
ISSUING DEPARTMENT: City Manager/City Clerk
SUMMARY:

Issue:

Consideration and potential adoption of a Public Comment Policy for City Council and Board and Commission meetings and discussion of health and safety protocols related to in-person City Council meetings
Recommendation:

1. Discuss and consider the proposed Public Comment Policy

2. Provide direction to staff regarding in-person City Council meetings Fiscal Impact:

There is no fiscal impact associated with the recommended actions.

Strategic Goals:
• Maintain a financially sound and affordable City government BACKGROUND:

The City's Public Comment Policy describes the process by which members of the public may offer public comments during meetings. Earlier this year, the City Council formed an Ad-Hoc Subcommittee, comprised of Mayor Arapostathis and Councilmember Parent, to discuss a potential City Public Comment Policy for City council and Boards and Commissions. On December 14, 2021, the Public Comment Policy Ad-Hoc Subcommittee provided an update regarding its efforts. As part of that discussion, the City Council requested information

Report to Mayor and Councilmembers
Date: January 11, 2022
Page: 2 of 3
regarding future in-person City Council meetings. This report provides an update regarding recommendations from the City Council Ad-Hoc Subcommittee with respect to the Public Comment Policy and information regarding in-person City Council meetings.

DISCUSSION:

In response to the COVID pandemic, the State of California issued Executive Order N-25-20, which allowed local governments to hold public meetings via teleconference. Consistent with the flexibility provided by the Executive Order, the City began leveraging technology to provide members of the public with opportunities to offer comments during public meetings both virtually and electronically. The City Council Ad-Hoc Subcommittee discussed ways to update the Public Comment Policy to formally incorporate this technology into current and future public meetings. The City Council Ad-Hoc Subcommittee recommends the following proposed changes to the Public Comment Policy which would facilitate public comment prior to and during City Council meetings:
• Live Audio Public Comment: The City would continue the use of live audio public comment through a live-streaming service. The proposed updated Public Comment Policy establishes a procedure for the City Council to receive live audio-comments for both general comment and on specific agenda items. Section 2(1)(f) and (g) of the proposed Public Comment Policy formalize the process currently used to solicit public comments over live stream.
• E-Comments: The City has the ability to accept written comments through its updated agenda management system; comments received in writing prior to the meeting would be incorporated into the public record but would not be read aloud.

E-Comments may be submitted up until 24-hours prior to a regularly noticed public meeting and would be accepted until 2 hours prior to a special meeting. Staff updated Section 3 of the Public Comment Policy to reflect these changes.

The City recently completed technology upgrades in the City Council Chambers. The recently installed equipment enables City Council meetings as well as board and commission meetings to be streamed online and accept live public comment. If approved by the Council, staff is ready to implement the proposed Public Comment Policy for City Council and Board and Commission meetings beginning with the January 25, 2022, City Council meeting.

In-Person Meetings
City Council meetings are currently conducted pursuant to the provIsIons of California Government Code section 54953(e), added by Assembly Bill 361, which allows the City to use teleconferencing and provide the public an opportunity to address the City Council via a call-in option or an internet-based service option. The City Council recently requested an opportunity to discuss how the City would provide members of the public with the option of attending City Council meetings in person while adhering to the public health order. Staff surveyed neighboring cities in San Diego County that have been hosting in-person meetings and found these cities generally implement the following measures to protect public health:

Report to Mayor and Councilmembers
Date: January 11, 2022
Page: 3 of 3
• Reducing the amount of seating in the city council chambers • Recommending wearing of masks regardless of vaccination status • Posting signage with updated guidance from the California Public Health Department Staff did not find cities in the region requiring proof of vaccination to attend a public meeting.

In such cases, members of the public entering a city council chamber without a face covering are self-certifying that they are fully vaccinated.

On December 15, 2021, the California Department of Public Health issued an updated mandate wherein masks are required for indoor public spaces regardless of vaccination status. The current mask mandate would require members of the City Council, staff, and the public to wear a mask during the meeting. There are no other specific regulations for inperson meetings at this time. Since mid-December, the San Diego region experienced an increase in COVID cases with Omicron being the dominant variant. Staff reached out to other San Diego County cities to learn how these cities are managing City Council meetings in response to the recent increase in COVID cases. The City of San Marcos plans to temporarily return to virtual meetings and Solana Beach, Imperial Beach, and Del Mar have postponed plans to return to in-person meetings at this time. Encinitas, Escondido, and Vista will continue to conduct in-person meetings. The State recently made the determination to extend the mask mandate through February 15, 2022. Any further policy direction on this matter is within the discretion of the City Council.

Reviewed by:

Greg Humora
City Manager
Attachment(s):

Respectfully submitted by:

A. Updated City Council Public Comment Policy
B. San Diego County cities in-person meeting protocols matrix

CITY OF
LAMESA
Number
Department City Clerk
Issued
JEWEL of the HILLS Revised
Pages
Signed
Policy & Procedure

PUBLIC COMMENT FOR CITY COUNCIL AND BOARD AND

COMMISSION MEETINGS

1. PURPOSE
The opinions of the citizens of La Mesa are an important factor in helping the Council, Boards, and Commissions make decisions. Public participation in the meetings assures a transparent and accountable local government.

2. POLICY
The public may address the Council, Board, or Commission ("legislative body") during general public comment at the beginning of each meeting and during the public comment portion of each item on the agenda. Each member of the public will have three minutes to address the Council, Board, or Commission, unless the Mayor or Chair publicly requires less time or authorizes additional time in advance. For efficiency purposes, groups or organizations are encouraged to appoint a spokesperson to speak on behalf of a common interest group or organization. Time cannot be combined or yielded to another speaker (e.g. no time donations). Speakers that require a translator will be given double the allotted time.
• General Public Comment: Occurs at the beginning of a meeting. This portion of the meeting is set aside to give the public an opportunity to speak on any City-related item that does not appear on the agenda. State law prohibits the legislative body from taking action or engaging in discussions on items not listed on the agenda. If appropriate, comments may be referred to staff or placed on a future agenda.
• Agenda Item Public Comment: The public is able to provide comments on each item on the agenda. Comments are to pertain to the specific agenda item. The Mayor or Chair will announce when public comment is open for an item and when it has closed. Public Comment for any items on the Consent Calendar will be taken prior to the consideration of the Consent Calendar (the Consent Calendar is a grouping of routine matters to be approved in one motion).

ATTACHMENT A

Administrative Instruction No.

Public Comment for City Council and Board and Commission Meetings Page2
Public comment at meetings of a legislative body may be presented in one of three ways:
1) In-person Public Comment
a) Members of the public wishing to address the legislative body should submit a "Request to Speak" card prior to general public comment or the item they wish to speak on.
i. Public Comment or the number of the agenda item should be written on the upper right hand corner of the "Request to Speak" card. b) If a member of the public would like to comment on an item but would rather write the comment rather than speak aloud, they may complete a "Written Statement" card.
i. "Written Statement" cards are reviewed by the legislative body and will be made a part of the record.

1. The Mayor or Chair may choose to read aloud the submitted "Written Statement" cards.
ii. "Written Statement" cards should be submitted prior to general public comment or the coinciding agenda item.
c) The "Request to Speak" cards and "Written Statement" cards are to be submitted to the staff person running the meeting (e.g., City Clerk or staff liaison).
d) City staff will arrange the "Request to Speak" and "Written Statement" cards in the order received and by agenda item and then provide to the Mayor or Chair.
e) The Mayor or Chair will open public comment and call the name of the first "Request to Speak" card.
f) Following the last "Request to Speak" card, the Mayor or Chair will close inperson public comment and move to live audio comments. g) If there are no in-person comments, following the staff report, the Mayor or Chair will ask if there are any speakers for live audio comment (live audio public comment) for the item.
i. Staff will inform the Chair of any hands raised.
ii. If no hands are raised, the Mayor or Chair will announce that Public Comment is closed for that item.
2) Live Audio Public Comment
a) One staff person may be dedicated to the public comment component. b) Following in-person public comment, the Mayor or Chair will move to live audio public comment.
c) Staff will announce the number of people queued for live audio comment following the in-person public comments;
i. If there are no live audio comments, the Mayor or Chair will announce that Public Comment is closed.
ii. If there are people queued for live audio comment, following the first speaker, the Mayor or Chair will announce that the time to raise hands is now closed.
d) The staff person will allow the first attendee in the queue to speak.

Administrative Instruction No.

Public Comment for City Council and Board and Commission Meetings Page3
i. Staff will announce the name of the person and inform the attendee they may unmute their microphone and will have three minutes (or the allotted time determined by the Mayor or Chair) to address the legislative body.
ii. When the person has completed their comment or the allotted time has expired, the staff person will revoke the attendee's ability to talk.

1. The staff person should also remove the person from the queue or lower the person's hand if raised electronically. e) The public comment portion is over after the last person in the queue has spoken.
3) Electronic Comments (eComments)
a) eComments will be activated once an agenda is published. i. Council agendas are published a minimum of 72 hours prior to the Tuesday Regular meeting. All Board and Commission agendas are posted a minimum of 72 hours prior to their Regular meeting date.

For Special meetings, the agendas are posted no less than 24 hours prior to the meeting.
b) A member of the public who wishes to submit an eComment will need to locate the meeting in "upcoming meetings" and click the comment bubble icon and then the item they wish to comment on.
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All agendas shall provide information on the three ways in which public comment may be presented at a meeting of the legislative body.

NIA NIA
Coronado Yes Yes No Just started limiting capacity to 50% Yes, half our chairs are removed and again spaced out
No (likely will not resume in
Del Mar person meetings until NIA NIA NIA NIA
MarchlAeril 2022)
Encinitas Yes Yes Not at this time Not at this time Not at this time Escondido Yes
No. We only require non-vaccinated No No No individuals to where masks Imperial Beach No, wll continue virtual NIA NIA NIA NIA meetin s Not stated on our agenda but we are
Lemon Grove Yes Yes (stated on our agenda) No limiting the seating that we put out to Yes ensure social distancin
National City No, will continue virtual NIA NIA NIA NIA meetings through Janau Powa Yes No No No No
San Die o No NIA NIA NIA NIA
San Marcos Reverting back to virtual NIA NIA NIA NIA meetings Solana Beach No, will continue virtual NIA NIA NIA NIA meetin s Those that are NOT fully vaccinated are No (this is very seldomly a problem Vista Yes
required to wear masks No for us - on a "busy" night we might No (again, not susually a problem for us) get two or three dozen people

DATE:

CITY OF
LAMESA
JEWEL of the HILLS STAFF Rf PORT
REPORT to the MAYOR and MEMBERS of the CITY COUNCIL
From the CITY MANAGER
January 11, 2022
SUBJECT: Approval of an Agreement for Humane Law Enforcement Services to the San Diego Humane Society, Amend the
Municipal Code Chapter 8.11 Dangerous Dogs via Urgency
Ordinance, Adopt San Diego Humane Society Fees, and
Appropriate $180,000 from General Fund Reserves
ISSUING DEPARTMENT: Police
SUMMARY:

Issues:

1. Should the City Council approve execution of the agreement for Humane Law Enforcement services with the San Diego Humane Society in substantial form subject to final review by the City Attorney?

2. Should the City Council amend the Municipal Code via adoption of an Urgency Ordinance related to certain animal sections to implement item #1?

3. Should the City Council approve amendments to the City fee schedule adopting San Diego Humane Society fees to implement item #1?

4. Should the City Council appropriate a total of $180,000 from General Fund reserves to the Animal Control Division 2106 to fund implementation of item #1 in the amount of $20,000 for the remainder of FY 21-22, and $160,000 for FY 22-23.

Recommendation:

Staff recommends that the City Council:

1. Approve execution of the agreement for Humane Law Enforcement Services to the San Diego Humane Society in substantial form subject to final review by the City Attorney.

Report to Mayor and Councilmembers
Date January 11, 2022

2. Amend the Municipal Code via adoption of an Urgency Ordinance related to certain animal sections to implement item #1.

3. Approve amendments to the City fee schedule adopting San Diego Humane Society fees to implement item #1.

4. Appropriate a total of $180,000 from General Fund reserves to the Animal Control Division 2106 to fund implementation of item #1 in the amount of $20,000 for the remainder of FY 21-22, and $160,000 for FY 22-23.

City's Strategic Goals:
• Safe community
• Continue to improve high-quality municipal services
Fiscal Impact:

The cost for the first year of services by the San Diego Humane Society is $325,000.

Funding in the amount of $180,000 is being requested from General Fund reserves to pay for expanded Animal Control Services for the remainder of FY 21-22 and FY 22-23.

Appropriation of the $180,000 from General Fund reserves plus the currently approved Animal Control budget will fund San Diego Humane Society services. This includes using $20,000 of the reserve funds to cover the remainder of FY 21-22, and $160,000 for FY 22-23 to cover costs and potential increases.

The cost for the second-year contract is unknown, and Finance Department staff will adjust accordingly during the mid-biennium budget review process in 2023.

By contracting with the San Diego Humane Society, the City will increase animal control services from 40 hours per week to 24/7 coverage, allowing for more timely responses and better customer service.

BACKGROUND:

The Police Department has historically employed a single position Animal Control Officer who provides a range of animal control services to the City of La Mesa. With only one officer, there are times of delayed responses due to situations when the officer is unavailable and Police Officers or Community Service Officers are handling other police matters. The City does not maintain its own animal shelter and contracted with the City of El Cajon from the years 2001- 2020 for animal sheltering services. On October 4, 2020, the San Diego Humane Society took over all services at the El Cajon Animal Shelter and all animal control related matters for the City of El Cajon. The current La Mesa agreement for sheltering services with the City of El Cajon was assumed by the San Diego Humane Society.

Report to Mayor and Councilmembers
Date January 11, 2022

The former La Mesa Animal Control Officer accepted a new position within the Police Department, leaving the Animal Control Officer position vacant. Staff took this opportunity to reevaluate our current services and researched various options for providing Animal Control services, to include hiring a replacement Animal Control Officer, or contracting with another vendor to provide these services. In researching animal control services in the region, staff discovered there were alternative options.

Animal Control and Sheltering Services in the Region
Animal Control and sheltering services within San Diego County are handled by the following agencies:

The San Diego Humane Society provides services for most of the incorporated cities within San Diego County, with the exception of the cities of Lemon Grove, Coronado, National City and Chula Vista.

The County of San Diego Department of Animal Services provides Animal Control services and sheltering for unincorporated areas in the County.

Chula Vista provides Animal Control and sheltering services for their own city, as well as sheltering services for the cities of Lemon Grove and National City. Lemon Grove also contracts with Chula Vista for 4-day per week Animal Control Officer coverage.

National City has a single-position Animal Control Officer and shelters their animals under contract with Chula Vista.

Coronado has an Animal Control Officer within the Police Department and an Animal Care Facility operated under contract by the Pacific Animal Welfare Society of Coronado.

Options for La Mesa:

1. Remain with our current Animal Services model, hire a new Animal Control Officer and continue to contract with the San Diego Humane Society for sheltering services only, currently priced at $398 per animal brought to their shelter. This option would continue to be a single employee for 40 hours per week, averaging 960 calls for service per year.

In the absence of the Animal Control Officer, these services would need to be handled by a Community Service Officer or Police Officer as time permits, making them unavailable for other police services during the times they are handling animal issues.

The current Animal Services model also requires Police Department management staff to spend significant hours annually on animal-related issues, including dangerous dog hearings and barking dog disputes. The department averages 3-5 dangerous dog hearings per year. These staff time costs are approximately $90,000 per year, which when added to the current year Animal Control budget, brings the actual cost for administering the Animal Control program to $321,960.

Report to Mayor and Councilmembers
Date January 11, 2022

2. Hire a new Animal Control Officer and contract with the City of Chula Vista for animal sheltering services. A preliminary quote was received from Chula Vista Animal Services to provide sheltering services only at a cost of $150,000 per year, or 6% of their shelter population. Contracting with Chula Vista for animal sheltering services would be a significant inconvenience to La Mesa residents having to travel to Chula Vista to reclaim their impounded animals, look for lost animals, or bring in stray animals. This option would also mean longer out-of-service times for La Mesa staff when transporting and processing animals at the shelter.

3. Contract with the San Diego Humane Society for full animal control and sheltering services.

A quote was obtained from the San Diego Humane Society to provide complete Humane Law Enforcement services and animal sheltering for the City of La Mesa. The quote for the first year of service is $325,000. Future year increases to Humane Society contract cities are based upon a combination of Consumer Price Index (CPI) and historical use of services.

While this amount is greater than the Police Department's current Animal Control budget of $231,960 for FY 21-22 and $235,21 O for FY 22-23, contracting with the San Diego Humane Society would provide several significant benefits to the City, including:
• A team of unarmed Humane Law Enforcement officers that could respond to citizen concerns, reports and investigations rather than a single internal position. • Having a dedicated team of 24-hour Humane Law Enforcement dispatchers and officers to respond to both routine and emergency calls, such as stray animals, injured animals, and animal neglect and abuse concerns, thus freeing Police Department staff from performing these duties. This improves available animal control services by 66%. The San Diego Humane Society has a complete Humane Law Enforcement Division to include management, supervisors, officers and support staff that handle most animal issues, including barking dog, off leash violations and other Municipal Code complaints.

La Mesa would continue to provide for the removal of dead animals from public areas, as that is not a service covered by the San Diego Humane Society. La Mesa would continue to use its current dead animal removal vendor. • In the La Mesa Municipal Code, all dogs residing within La Mesa are required to be licensed. Currently La Mesa finance staff processes and maintains all dog licenses and records. The estimated annual cost for these services is $24,000. By contracting with the San Diego Humane Society, their staff will assume this duty, thus freeing La Mesa finance staff to perform other City services and removing this expenditure. • San Diego Humane Society personnel are experts in dealing with animal related investigations. They have the staff and expertise to handle complex issues such as dangerous dog determinations and animal cruelty investigations, freeing Police Department management staff from these duties.
• San Diego Humane Society already provides increased outreach services to other contract cities that would be offered to La Mesa. The community services provided by

Report to Mayor and Councilmembers
Date January 11, 2022

the San Diego Humane Society include guest resources, behavioral center, food pantry, injured wildlife assistance, and low-cost vaccination and spay/neuter clinics that are outside of the current contract for sheltering services with the Humane Society. • The San Diego Humane Society offers additional options for discretion in resolving dangerous dog declarations.

RECOMMENDATION:

Police Department staff believes the best option for the City would be to contract with the San Diego Humane Society for complete Humane Law Enforcement services due to their programmatic history of providing these services to other cities in the San Diego region, expertise in animal care and welfare, the increased services they are able to provide with a dedicated team of employees, and the new range of benefits to the residents of La Mesa.

Staff discussed this option with the La Mesa Police Officers' Association and they support this recommendation.

With this recommendation, the La Mesa Chief of Police can elect to retain jurisdiction for dangerous dog determinations and declarations if so desired (see Section 1.4 of the Animal Services Agreement).

MUNICIPAL CODE AND FEE SCHEDULE AMENDMENTS:

Following discussions with San Diego Humane Society staff, the City Council sub-committee on Animal Welfare and the City Attorney, it was recommended that Council amend the Municipal Code provisions related to dangerous dogs and stray hold confinements.

The recommendations are to repeal La Mesa Municipal Code Chapter 8.11 - Dangerous Dogs, and adopt San Diego County Code Chapter 6 sections related to the same via adoption of an Urgency Ordinance (attached).
• SEC 62.669.1
• SEC 62.669.5
• SEC 62.674
• SEC 62.675
Public Protection from Dogs
Guard Dogs, Dangerous Dogs or Potentially Dangerous Dogs Proceedings to Declare a Dog a Dangerous Dog
lmpoundment, Abatement and Restrictions on Dangerous Dogs Additionally, amend Municipal Code Section 8.10.050 - Length of Confinement to read "The department shall keep confined as required by this chapter every impounded animal upon which a license or identification tag is found, as required by California Food and Agriculture Section 31108 (dogs) and 31752 (cats)."
An essential difference between La Mesa Municipal Code Chapter 8.11 and the San Diego County Code is that there are additional options to address dangerous dogs contained in the County Code. Adoption of the San Diego County Code sections relating to dangerous dogs is

Report to Mayor and Councilmembers
Date January 11 , 2022

the best option because it allows the San Diego Humane Society additional avenues to address and correct dangerous dog issues as an alternative to destruction.

Staff also recommends that Council adopt San Diego Humane Society fees by reference, as long as they do not substantially exceed current City of La Mesa animal fees. These fees were reviewed and San Diego Humane Society fees are less than La Mesa fees except in one area, the transfer fee. The San Diego Humane Society's transfer fee is $10 and the La Mesa fee is $5. Adoption of San Diego Humane Society fees would ease the transition of services for Humane Society staff and La Mesa residents.

Therefore, staff recommends that Council adopt the San Diego Humane Society fee schedule by reference.

Finally, the La Mesa Police Department has conducted outreach with representatives of the Canine Corners Dog Park to advise them of the recommendation for the City to enter into an agreement with the San Diego Humane Society for Humane Law Enforcement/Animal Control services. Canine Corners supports this recommendation.

Staff Reference: Police Services Manager Christine McMillen Reviewed by:

Greg Humora
City Manager
Attachments:

Respectfully submitted by:

A. San Diego Humane Society Agreement
B. Resolution
C. Resolution - Urgency Ordinance

ANIMAL SERVICES AGREEMENT
This Animal Services Agreement ("Agreement") is entered into effective the XX day of XX by and between the CITY OF LA MESA, a municipal corporation (the "CITY") and the SAN DIEGO HUMANE SOCIETY AND S.P.C.A., a California nonprofit corporation ("SDHS") ( collectively, the "Pmiies"). This Agreement is made with reference to the following recitals.

RECITALS
A. It has been determined to be in the CITY' s best interest to retain specialized, professional services to provide animal control, care and sheltering services.

B. The CITY desires to contract with SDHS as an independent contractor and SDHS desires to provide services to the CITY as an independent contractor.

C. SDHS personnel have demonstrated their competence and professional qualifications necessary for the satisfactory performance of the services designated herein by virtue of their experience, training, education and expertise.

D. The purpose of this Agreement is to ensure the proper, humane and efficient handling, ownership, treatment and disposition of dogs, cats and other domesticated animals, and to ensure the enforcement of laws, ordinances and regulations of the State of California and of the CITY concerning the regulation, licensing, impounding and disposition of dogs, cats and other domestic animals within the CITY.

NOW THEREFORE, in consideration of the covenants, conditions and te1ms set forth herein, the pmiies agree as follows:

1. SCOPE OF SERVICES. SDHS shall provide animal sheltering and animal field services required by and in accordance with the laws, regulations, ordinances and codes of the State of California, the County of San Diego, and the CITY as further specified by this Agreement. The Services to be performed by SDHS pursuant to the terms and conditions of this Agreement shall consist of the Services enumerated below. In addition to those Services identified below, SDHS may routinely provide the CITY with the additional "Community Engagement and Services" outlined in Exhibit A, attached hereto and incorporated by reference, without an additional cost.

Exhibit A is subject to modification at SDHS's discretion based on resources and capacity.

1.1. Animal Sheltering. SDHS shall provide the CITY with animal shelter services consistent with public shelter functions to receive and care for all dogs, cats and other domestic animals seized or impounded by Animal Field Services or delivered by members of the general public, provide humane disposition of animals, euthanizing, if warranted, and disposing of euthanized animals and deceased animals brought in by CITY residents. More specifically, SDHS shall maintain an animal shelter at 1373 N. Marshall Avenue, El Cajon CA 92020 which shall be open for public service and operation during reasonable days and hours of operation similar to other such facilities within the County of San Diego ("County"), and which shall comply with the standards described by the laws of the State of California, and the ordinances of the County and the CITY. Such animal shelter services shall include:

SlVIRH:485643245.9 -1-

a. The housing and care of stray domestic animals for the legal hold period according to the laws of the State of California, and the ordinances of the County and the CITY.
b. The housing and care for domestic animals under rabies quarantine for the legal hold period according to the laws of the State of California and the ordinances of the County and the CITY.
c. Housing and care for police and animal cruelty holds for a minimum of fourteen (14) days.
d. Providing lost and found opportunities for the general public for domestic animals brought to the Shelter.

1.2. Animal Sheltering Criteria. SDHS animal sheltering Services shall include:
a. Feed, care for, and the disposition of all animals coming into the possession of SDHS using safe and humane methods in accordance with the State of California laws and the ordinances of the County and the CITY. b. Assume all expenses to maintain and operate the Shelter and properly care for the animals.
c. Manage the dog license program within the CITY to include:

1. Maintaining files including current and expired dog licenses and the owners who live within the CITY for the past three (3) years.

11. Issuing or causing to be issued new and renewed licenses to dog license applicants within the CITY.
111. Investigate and issue when appropriate Service Dog Licenses within the CITY.
1v. Issuing or causing to be issued Dangerous Dog dete1minations or declarations licenses as directed by SDHS officials, or at the option of the City after the City Manager or his/her designee has made said dete1mination or declaration and all proceedings under La Mesa Municipal Code 8.11 have been concluded or waived.
v. Conducting follow-up enforcement of licensing and rabies vaccinations within the CITY.

1.3. Animal Field Services. SDHS shall humanely and efficiently enforce all applicable animal field service laws, regulations, ordinances and codes of the CITY ( and any County laws, regulations and ordinances as adopted by reference by the CITY) pertaining to animal field services with respect to the scope of work set fo1ih below. SDHS shall provide the CITY with the following animal field services in response to complaints generated by the public, SMRH:485643245.9 -2-

law enforcement and the CITY:
a. Investigation and enforcement of animal cruelty laws and related activities. b. Picking up and caring for injured domestic animals.
c. Addressing dangerous domestic animal situations.
d. Monitoring and responding to bites and enforcing rabies quarantine requirements.
a. SDHS shall.7p~rfaJm the
1 . bl h CITY~;;;f(,>Yffi:f:::,i{fff~/. app 1ca e tot e .·" tf,<'0:if· ''/J:p;J/, all laws and regulations
11•: "ft,~\
b. SDHS shall?P~Rvide d~ijx the number Humane Officer(s) (as defined below) and an animal con{{iil)fle;1t[~his!e(s) ~• .. -.. ?,::"1~' for the performance of animal field services. ·.:.(_\_./~~/;~//"_lfl&i,: ... < iY:~;.f.~.~-~.l_Yl_f f J0?\l~:Z?t~1>\\? v> · • ·. ·:~<::;,:·/:·;v.. · ... ·;:· /,/ ·-<:-· .... :;:_-::;i~- ;;,;• '/ ,,, XJ'0<;':' /;-; pf '.?(?,//'://///• :ff;§/;'SDHS shali7li~ane1~{{~4 efficierlfljffJhforce all laws of the State of California, the County;}~~,the CITY peftij~ing t6i~trnal field services that are within the scope of SDHS's obligation~t(l;lc.l.er this Agreeiv"~\lt. In 'ttit~vent that new laws enacted after the Effective Date of this AgreJfu:(11,twould reqtiit~ltncreas~tl services by SDHS, such additional services shall be added to the Serv(d~.S only upoltfgreement by the Parties (including compensation). ;;:i1;11i}•. IJ/!i
d. SDHS Hun\~~~ Qf!t~ei:s (as defined below) and duly trained license coordinators are authorized to issue criM~ffaifd/or administrative citations for violations of CITY animal field '//?};?/ service laws, and to issue'n6tices as provided by law. SDHS's Humane Officers (as defined below) shall prepare appropriate reports concerning violations, file such reports with the applicable authority when necessary, and stand ready and available to testify in a court or administrative hearing when called upon to do so concerning such violations. e. SDHS shall respond to calls for Animal Field Services during Field Service Hours.

Based on the priority of the call, SDHS will respond within the times included in Exhibit B attached hereto and incorporated herein by reference. Exhibit B is subject to reasonable change at the discretion of SDHS and upon written notice to the CITY.

SMRH:485643245.9 -3-

1.4. Dangerous Dog Hearing Officer. Notwithstanding any rule, regulation, practice or procedure, the City through its Chief of Police, may retain jurisdiction for the Chief of Police or his or her designee, to serve as the hearing officer regarding a dangerous dog determination or declaration, subject to all applicable rules, regulations, practices and procedures.

An after-hours duty Humane Officer shall provide emergency responses to Priority One calls only during non-Field Service Hours upon receipt of such a call from an authorized CITY official. "Priority One" calls are defined as a prompt, essential emergency response for the following:
i. Any law enforcement agency requestinifihmediate emergency assistance. .. An" 1 b" h h d . .~ . . d" 11. 1~a- . 1te "!' ere t e omestI¥j,fJi•~ontmues to po_se an 1mme 1ate threat, bite mJury 1s to the head, or m!'otte rnj~jY can be considered severe. {i!> •• .,.
... ~ . . . . . 111 Any act_ of c:u~lty ~nd/-ilect to ammalslj!,,1s m progress or which places an ammal m 1mmmentJlahger. '
?(:·'.•, '- . . . . .,?." •fr. 02-. . IV Any domestic ammal e1theru:2wn t~l9J§angerous or~i2c~ous by previous determination in an. administrativ'~hearilrgtor one that is t5tfrbeived to be an /;f!.~f:f: ' . "f,,'fP~M:. '~y
immediate threat"<5ftJR~~~.£ing those ii(2b~rduals reporting the event. "v•1'f\ d:1:ur:". ·wfa. %I~-;;':" ,t:;10;:;;::,~;::,,:,. Jf~&- V. Any live domestit:, atlu'n".al};;)Vhich is'~~senting an immediate hazard to <:;;:;:;//\., ,.:((s;:~:::/}-~ ' :;:;~;:':;.;,,.
humans, such as a live116mestic/amillal in traffic lanes of a major thoroughfare "'.,!~hwfYk·~~~\Adlf '~ 9d
vi0){~r domes{~9feanimal tn~fd'lf;sick, injuretl7cr in immediate danger. \ft:l·o;.. IJJJ \ft\

2. SDHS.PERSONNED~"S:Qf1.S.zs$haJ} employf&ppropriate personnel and staff to assist and //'0• '/ •;,,::X·'\/ <;;:-:·· . w/0?:\":."/://{>}.,;/: ·.<": •:~:{)":\ · ,,//.,. . ,: ?.· ;-;::,,,, carry oij!f~1fti~sl~~tbligatt~ftr6f tnis ~~j~;el\t!t\,

2.r~it Humane oifi~~rs. sr5F1S~shall ha:f1tfJau times during the term of this Agreement a ",;:zi-.f::<:~. '/',/•:'.: ;r,.' ·:/.r:X;;:;'.;, reas?nabl~~1ia~mber ~f ~\lJ;ine O:(~':~lrs _qualified under California . Corporations. Code sect10n 1450'.?;.~IJd Cahforma•:e~al Code.J§JCtlon 830.9 capable of performmg and enforcmg the provisions oftn~,~JTY ordina~9~,related to domestic animals. They shall not carry firearms in the performance 6'f\fhtir dutiesJ[~ch Humane Officer shall complete within one (1) year of date ///;//;,, 1/f:;:./,:c'/ of hire or within one'{l~;~ear qntlie Effective Date of this Agreement, a course in training related to the exercise of their pQ~~tfiwhich course shall meet the minimum standards prescribed by the '/,..>J/:::_:-::::,:,tY
Commission on Peace Offi.§ei· Standards and Training and the State Humane Association of California.

2.2. Performance Standards. SDHS agents and employees shall treat the public with courtesy and respect at all times in performing all duties and ob ligations under this Agreement.

2.3. Compliance with Laws. SDHS shall comply with personnel policies and procedures that conform to federal and state laws with respect to hiring and firing practices.

3. OBLIGATIONS OF THE CITY. The CITY shall provide the following to assist SDHS in performing required animal control functions under this Agreement.

SMRH:485643245.9 -4-

3.1. CITY will provide training on specific CITY processes and other municipal techniques that humane officers may be expected to carry out, unique to the CITY, and which are not otherwise part of training for Humane Officers set forth in Section 2.1.

3.2. CITY shall endeavor to work with the SDHS in support of the licensing programs geared towards increased compliance, higher return owner rates, reduction in the number of animals needing housing care, and protecting residents against dangerous and/or vicious dogs and habitual offenders of animal laws.

4. REPORTS AND RECORDS. /%~ II) . 4.1. Quarterly Rep01is. SDHS shall prepare quaiierlieports to the CITY which shall 'd h .c 11 . . .c • (') • 1 h 1 A., . ( . . h prov1 e t e 10 owmg m1ormat10n: 1 amma s e t~-~~l.i~t10ns as 1t pertams to t e A ) greement . 1 d' h b f . 1 . /~,-~-iii d h . d' . . ) ('') 11 , me u mg t e num er o stray amma s 1mgouncteu.J~an t eir 1spos1t10n ; 11 a :!f P "'<r '•i@'Jifii{;;
citations issued; and (iii) animal field service a.ot(yities includitr~the number and type of ~'.?ffffp/ '/,,. incidents or reports investigated. .~ '.'.., .• %SJ?~:c. ;-~ '/if}j/:;;f:J:c '-<~?,&/. 'Y>/4'~W0

4.2. Governmental Rep01is. Should the CEf~ be required to fumislirififormation to any . \%%'.~4}:,,, Af.i. '/<%].,, other government agency, SDHS agrees to timely pfoyide information that the\@l['Y may need c::?>;; . ',;,;~ff%·· /1r~r:01:!~0v '•:~WJ{s
to meet such request as long as the (i51Mi¥~is within tlie'jfi~pe of this Agreemenff? '1~;:~4ft,r;;;],, ½"i's,,

4.3. Annual Rep01i~'. By no latet\tp~n sixty~!§i"Q)days foUC1,;Ving the end of each fiscal year, SDHS shall pr'}~t~tJ(tj}~ual repq~&lo th5ZctJ1);i/~ith 'f~information required by Section 4.1 for the pre~eaing y&arit., 'i!Jit .f:,'tf' ½//~:%'lifri:1t· ,. ,,,'. . . . /''jt t;ilijf C <\,:3/

4.4. Record Retfitfon. All}(~ords and i~~nnation required to be kept by SDHS pursuant to this Ag'Jii?111}J!1all b~fi{~~\Af~J{f1mtn:t~~m o(!)d,east three (3) years unless required by law to be kept{o,ra,longer;penod:1,;;;,7:,/ ,,,,.;fi:fif .. 0.,p~ JtiJIJr \ff!li; ;:I;:;,,/ ,;ictiJYJ~'" ., 5. 0CDJ\1PLIANCffWITH LAWS:• All woi'k by SDHS shall be performed in accordance with appli6~ble city, state arttl'federar1T~\vs, statutes and regulations. 'i'~WJ~1 ... ~{j(" ''fi'!I~

6. LICENSE,,PERMITS,t.ETC. SDHS represents and declares to CITY that it has all licenses, permits;ftjtrc!lification~'T~ind approvals of whatever nature that are legally required to practice its professid:N,~SJ)HS{fl!resents and warrants to CITY that SDHS shall, at its sole cost and expense, keep in eff~~Jt~fr~}Ftimes during the term of this Agreement, any license, permit, or approval which is legallyt6(ft:ihed for SDHS to practice its profession. SDHS shall obtain and maintain a CITY business license during the term of this Agreement.

7. INDEPENDENT CONTRACTOR. At all times during the term of this Agreement, SDHS, any employees of SDHS and any subcontractors employed by SDHS shall be an independent contractor and shall not be an employee of the CITY. The CITY shall have the right to control SDHS only insofar as the results of SDHS's Services rendered pursuant to this Agreement; however, the CITY shall not have the right to control the means by which SDHS accomplishes its Services.

SMRH:485643245.9 -5-

Neither SDHS nor SDHS's employees shall in any event be entitled to any benefits to which CITY employees are entitled, including, but not limited to, overtime, any retirement benefits, workers' compensation benefits, any injury leave or other leave benefits, SDHS being solely responsible for all such matters, as well as compliance with social security and income tax withholding and all other regulations and laws governing such matters.

8. PERS ELIGIBLITY INDEMNIFICATION
In the event that SDHS employee providing services under this Agreement claims or is determined by a court of competent jurisdiction or the California Public Employees Retirement System (PERS) to be eligible for enrollment in PERS of the C:~?DHS shall indemnify, defend and hold harmless City of the payment of any employer a.nf~ployee contributions for PERS ~j{(f" . . benefits on behalf of the employee as well as for paymeht~lxany penalties and mterest on such contributions which would otherwise be the responsibttPtr?o:ff~City.

D Wffe '"r•··
Notwithstandmg . . any other agency, state or fe. ~.~tfJfffohcy, .A. rule, •· reg1M\tion, law or ordmance . to h snHs 1 ·d· @'l?• d h. A Dir,, h n rf £ tb e contrary:
1 d emdp hoyeebs provI mg sefti:1/un er
1 ~ IS greemen;~;¾a n~t qua Idyb or fior
ecome entlt e to, an ere y agree to waivy;1}\PY c aims to, any comp~.psatlon an ene It including but not limited to eligibility to emoll i~\l~S a~t<{f~mployee o:r'1tt:y,and entitlement to any contributions to be paid by c;iij¾tg: employer!"~i»ti5ns and/or empl<5*e contributions £or PERS benefits 1/c::tA~Y(gr:i%~x .. 'i:i;,::'!Jt<m. • ?:,;;:,:;,,,;:; 0/y;;./';:,:, ;, (;;;,;?;,/•: <liJ;t¥{·i~•;, ~%'{(;:,

9. WORKERS' COMPENSATION. Pursuaritffo:;@alifornia Uaqor Code section 1861, SDHS ·,,;:;,:,;;;;,•., <;Sj!f:JiJ!/>, ', '/{1J?f::f;/ hereby ce1iifies that SDij~js ~ware of th~fQrovision~{9J;'.§ection'$iZQP of the California Labor '/:,·:·:·~i'.'.;//<,<;o,,,1/,, ;{//'/!f:· ,a·~://;//:·"/}::.···. '/)f':··?;,· Code which require ev~fy"emplo.y~r to be in~ut°ed aflf111shl1apilityfd'r Workers' Compensation or to undertake self{{[s,lt;nce frtl~£prdancf1iit!}{~f'Pro~Irif[~~of the Labor Code, and SDHS will comply with suclfiptQvisions:'fffid ce1iificati9n of proof of compliance as a part of this A
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g1eement. f{>/::0,,.. ·21Jd·I:;::;
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10. N01/<ZONFLIGT?OF IN'PER.EST. SD11S shallJnot enter into any other contract which cO:~ijfpts with its 6bij1s~tion~'1%£I~r this l@le,in~nt. For the limited purpose of interpreting this s~.~tion, SDHS sli(lt;pe de'fm~.d a "city officer or employee," and this section shall be interprtt~d in accordanc~·~with th?G~lifornia Government Code section 1090. '/•:11:;l:\;. ;;~:~gt.· '\(fjf::~?

11. OWN~'itSHIP OF DO~t3MENTS.
·<\~110~0;>' ~{f 1}1 /:;;fYt> f?0E>Z/ 11.1. Reports ancVdocuments prepared or provided by SDHS under this Agreement shall 0,;f;:C:'./}!//.. /f/4:J:;~;/ be the property of the Cil}¥t~l}Ke CITY agrees to hold SDHS free and harmless from any claim arising from any use, otheftll~n the purpose intended, of the reports and documents, prepared or provided by SDHS. SDHS may retain a copy of all materials produced under this Agreement for the purpose of documenting their participation in this Agreement.

11.2. Animal license information and data, including, but not limited to, animal owner identification and address, animal name, description, license type and expiration date, are the prope1iy of the CITY and must be presented to the CITY in any reasonable document and computer fmmat requested in writing by the CITY. All such information must be provided to the CITY within thi1iy (30) days of the CITY's request.

S!v!RH:485643245.9 -6-

12. COMPENSATION. SDHS shall receive the following compensation for the performance of the Services.

12.1. Payments by the CITY. The CITY shall make payments to SDHS as follows:

For the first twelve (12) month term of this Agreement, "Year 1 Compensation" (insert contract term), compensation shall be $324,000 billed at $27,000 per month for each month.

Start-up costs in the amount of $20,500 will be due within sixty (60) days of contract execution. ,dJI, ,#ip Future Payments by the CITY. AAI
a. SDHS will project the costs required to pr~i;ffftrf~control, licensing and sheltering services to all the cities under contract withz§DHS. SDHSlJ;~ill project costs based on actual historical expenses, adjusted for expect~dlianges in th(1&tqqming contract year. SDHS will track historical statistics by e51,pf under contract ,({!t~SDHS and will use those statistics to ~Hocate the projecte? c-•~ the_CITY. The na~/(t~ie statistics tracked by SDHS ~ay mclu~e, but_are not !tmitedt~J~in:ial I~j~~' Ammal Da~]?eltered by SDHS, vet provided servic~s, hc~~ses is~ued ancl s{li~~,$,~~ided by Human;i~,f w Enforcement Officers. SDHS will als~9;Jf~~l2!' m any addit\$Ji~J~services requested by<tne CITY that are unique to that CITY and r~g'µif:Q§t~dditional cosf;fu SDHS. ''!f,;~~j,~Y>; .. '1~~,~" b. By March 31st of each year, $~};:IS ,villJJ?Jgyide the ~JJllwith a budget packet to include their compensation cost to SDHSh SDHS Will provide fotlie.CITY a breakdown of the total {/1\'{;/<:./.·,f1f:$'?/::,. '~?tf:f:\. -4:;::;//·<PI?::.;:,. . ''<!Jf.:I??· compens~\Jpp,)figqf~]pl the type~S2:1 ex~i¼½~~~Y?({j~/if~d in•prbviding services to the CITY.

SDHS itBtrovide 2xpJf:ir~tions fo(r~i~i,is'in comp~~ytion no~ related to changes in CPI.

The budg~1fe;packet w'iJJ/\mclude a ,t9J7n, for the CITY to sign and return to SDHS, acknowledgingJpe con{p't;Jlsation amdl(~tJor the upcoming year. ,C:iii[;,i / f?tYi:&, .. '.'f!Jlxfr~:21t1',t>s;< . ;~i~J s.~/: /,Jti~~6iJ~9Jthe agf~~W~rit m~yt,n~f~~se :W:-µally, on July 1, by up to the Consumer Price Sitr)f Index (Sai);]l?J~go-Catl~~ad, All Url?f¥JJJs;onsumers) (the "CPI") increase plus 3%. In the :\rt: event SDHS"trt~rmines;t~~t, for efficitnt and effective operations, an annual projected ;t<;M1crease must ekq~;~d 3%>pl~~;.Jhe CPI, SDHS is required to communicate to the CITY the · ;ff projected [email protected] any jil~\}~cation for the added increase by January 31. ')""> ;It; . 12.2. Otherkevenue. SDij,~ shall be entitled to retain as compensation for the Services:
(i) all reasonable us'g'ffees, ser!it~ charges and proceeds collected by SDHS in connection with ;;,;::/ff:;; -:/f:}f}ri;f licensing, impounds, anci~yd~rpption of domestic animals from the Shelter, (ii) any fines received by SDHS or the CITY arhHµgot1t of any administrative citations issued by Humane Officers; and (iii) any other non-citation related revenue generated as a result of this Agreement. All user fees and service charges shall not exceed the reasonable cost of providing the service.

13. DISASTER RELIEF SERVICES. SDHS shall be designated the "Essential Support Function/Official Responder" with respect to any disaster to which the CITY is included within the disaster area designated by a governmental agency. SDHS may invoice the CITY for any costs and expenses, including staff overtime and equipment purchases and rentals, incurred by SDHS with respect to additional services provided by SDHS in connection with any disaster relief effort and which are eligible for reimbursement to Federal Emergency Management Agency ("FEMA") Disaster Assistance Policy 9523 .19 or any successor disaster assistance policy SMRH:485643245.9 -7-