Agenda packet — La Mesa City Council, July 11, 2023 (part 3 of 3)

CITY OF LA MESA
Required Supplementary Information Schedules of Changes in Net Pension Liability and Related Ratios Last Ten Years* ‐87-
Safety Plan
6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019 6/30/2020 6/30/2021

TOTAL PENSION LIABILITY
Service Cost $ 2,407,587 2,511,204 $ 2,403,285 $ 2,727,872 $ 3,179,247 $ 3,150,403 $ 3,248,296 $ 3,343,416 $ Interest on Total Pension Liability 10,771,035 11,178,436 11,527,490 11,719,571 12,328,071 12,871,590 13,344,226 13,814,851 Difference Between Expected and Actual Experience - (161,921) (697,636) (1,952,708) 3,953,305 2,005,205 926,691 721,003 Changes of Assumptions (2,742,320) - - 9,776,293 (937,052) - - - Benefit Payments, Including Refunds of Employee Contributions (7,575,744) (8,057,546) (8,589,274) (8,796,139) (9,561,683) (10,231,175) (10,543,526) (11,014,303) Net Change in Total Pension Liability 5,706,495 2,624,236 4,643,865 13,474,889 8,961,888 7,796,023 6,975,687 6,864,967 Total Pension Liability - Beginning 146,146,054 151,852,549 154,476,785 159,120,650 172,595,539 181,557,427 189,353,450 196,329,137 Total Pension Liability - Ending (a) 151,852,549 154,476,785 159,120,650 172,595,539 181,557,427 189,353,450 196,329,137 203,194,104

PLAN FIDUCIARY NET POSITION
Contributions - Employer 3,238,613 2,864,566 3,767,485 4,477,395 4,559,719 5,192,920 5,934,636 6,493,887 Contributions - Employee 840,213 804,337 891,198 996,668 1,045,575 1,083,318 1,191,676 1,350,773 Net Investment Income 2,541,555 17,292,426 564,745 12,085,214 9,928,189 8,023,831 6,295,868 29,372,461 Benefit Payments, Including Refunds of Employee Contributions (7,575,744) (8,057,546) (8,589,274) (8,796,139) (9,561,683) (10,231,175) (10,543,526) (11,014,303) Net Plan to Plan Resource Movement - - - - (288) - - -
Administrative Expense (126,940) - (68,743) (161,464) (183,818) (88,062) (179,578) (129,943) Other Miscellaneous Income/(Expense) - - - - (349,074) 288 - - Net Change in Fiduciary Net Position 13,385,585 (1,564,105) (3,434,589) 8,601,674 5,438,620 3,981,120 2,699,076 26,072,875 Plan Fiduciary Net Position - Beginning 100,973,923 114,359,508 112,795,403 109,360,814 117,962,488 123,401,108 127,382,228 130,081,304 Plan Fiduciary Net Position - Ending (b) 114,359,508 112,795,403 109,360,814 117,962,488 123,401,108 127,382,228 130,081,304 156,154,179 Plan Net Position Liability - Ending (a) - (b) 37,493,041 $ 41,681,382 $ 49,759,836 $ 54,633,051 $ 58,156,319 $ 61,971,222 $ 66,247,833 $ 47,039,925 $ Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 75.31% 73.02% 68.73% 68.35% 67.97% 67.27% 66.26% 76.85%Covered Payroll $ 9,288,796 9,120,009 $ 9,570,037 $ 9,992,870 $ 9,226,022 $ 9,535,932 $ 10,584,174 $ 10,463,333 $ Plan Net Pension Liability as a Percentage of Covered Payroll 411.11% 448.73% 519.95% 546.72% 630.35% 649.87% 625.91% 449.57%Notes to Schedule:* Measurement period 2013-14 (fiscal year 2015) was the 1st year of implementation.

Measurement date
Changes in Assumptions: There were no assumption changes for 2021. For 2020, the Plan adopted a new amortization policy effective with the 2019 actuarial valuation. The new amortization policy shortens the period over which actuarial gains and losses are amortized from 30 years to 20 years with the payments computed as a level dollar amount. In addition, the new policy does not utilize a five-year ramp-up and ramp-down on UAL bases attributable to assumption changes and non-investment gains/losses. The new policy also does not utilize a five-year ramp-down on investment gains/losses. These changes apply only to new UAL bases established on or after June 30, 2019. There were no changes in assumptions in 2019. In 2018, demographic assumptions and inflation rate were changed in accordance to the CalPERS Experience Study and Review of Actuarial Assumptions December 2017. There were no changes in the discount rate in 2019. In 2017, the accounting discount rate was reduced from 7.65 percent to 7.15 percent. In 2016, there were no changes in the discount rate. In 2015, amounts reported reflect an adjustment of the discount rate from 7.5 percent (net of administrative expense) to 7.65 percent (without a reduction for pension plan administrative expense). In 2014, amounts reported were based on the 7.5 percent discount rate.Changes in Benefit Terms: There were no changes to benefit terms that applied to all members of the Public Agency Pool. Additionally, the figures above do not include any liability impact that may have resulted from Golden Handshakes that occurred after the June 30, 2020 valuation date, unless the liability impact is deemed to be material to the Public Agency Pool.

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CITY OF LA MESA
Required Supplementary Information Schedules of Changes in Net Pension Liability and Related Ratios Last Ten Years* ‐88-
PARS Retirement Enhancement Plan
6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019 6/30/2020 6/30/2021

TOTAL PENSION LIABILITY
Service Cost $ 3,000 3,000 $ 3,000 $ 3,000 $ 1,527 $ - $ - $ - $ Interest on Total Pension Liability 171,000 171,000 178,000 178,000 159,542 157,449 142,093 138,733 Changes of Benefit Terms - - - - - - - -
Difference Between Expected and Actual Experience - (1,000) - (154,000) - (215,926) - 17,508 Changes of Assumptions 118,000 - - 77,000 - (7,519) - 60,325 Benefit Payments, Including Refunds of Employee Contributions (174,000) (178,000) (179,000) (187,000) (188,512) (192,282) (196,128) (200,051) Net Change in Total Pension Liability 113,000 - 2,000 (83,000) (27,443) (258,278) (54,035) 16,515 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 2,412,244 Total Pension Liability - Ending (a) 2,720,000 2,833,000 2,835,000 2,752,000 2,724,557 2,466,279 2,412,244 2,428,759

PLAN FIDUCIARY NET POSITION
Contributions - Employer 105,800 106,000 118,000 118,000 125,000 125,000 125,000 125,000 Contributions - Employee 1,000 1,000 2,000 1,000 1,127 - - - Net Investment Income 60,000 275,000 50,000 187,000 123,563 134,170 106,642 472,636 Benefit Payments, Including Refunds of Employee Contributions (174,000) (178,000) (179,000) (187,000) (188,512) (192,282) (196,128) (200,051) Administrative Expenses (22,000) (22,000) (21,000) (8,000) (8,370) (8,556) (8,629) (8,859) Other Changes in Fiduciary Net Position - - - - - - - - Net Change in Fiduciary Net Position 186,000 (33,200) (30,000) 111,000 52,808 58,332 26,885 388,726 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 2,495,825 Plan Fiduciary Net Position - Ending (b) 2,310,000 2,276,800 2,246,800 2,357,800 2,410,608 2,468,940 2,495,825 2,884,551 Plan Net Position Liability / (Asset) - Ending (a) - (b) 410,000 $ 556,200 $ 588,200 $ 394,200 $ 313,949 $ (2,661) $ (83,581) $ (455,792) $ 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% 118.77%Covered Payroll $ 100,872 97,932 $ 103,896 $ 105,972 $ 108,096 $ 108,096 $ 113,544 $ 113,544 $ Plan Net Pension Liability / (Asset) as a Percentage of Covered Payroll 418.66% 551.39% 566.14% 371.99% 290.44% -2.46% -73.61% -401.42%Notes to Schedule:* Measurement period 2013-14 (fiscal year 2015) was the 1st year of implementation.

Measurement date
Changes in Assumptions for Measurement Date June 30, 2021:

Discount rate was updated based on newer capital market assumptions. Mortality improvement scale was updated to Scale MP-2020

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CITY OF LA MESA
Required Supplementary Information Schedule of Plan Contributions Last Ten Years* ‐89-
Miscellaneous Plan
Fiscal Year
Actuarially Determined
Contribution
Contributions in Relation
to the Actuarially
Determined Contribution
Contribution
Deficiency
(Excess) Covered Payroll
Contributions as a
Percentage of
Covered Payroll
6/30/2015 2,018,839 $ (2,018,839) $ - $ 9,805,687 $ 20.59%6/30/2016 2,233,832 (2,233,832) - 10,775,401 20.73%6/30/2017 2,553,613 (2,553,613) - 10,782,250 23.68%6/30/2018 2,693,445 (2,693,445) - 9,713,133 27.73%6/30/2019 3,000,728 (3,000,728) - 10,004,158 29.99%6/30/2020 3,398,605 (3,398,605) - 9,771,136 34.78%6/30/2021 3,871,245 (3,871,245) - 9,799,062 39.51%6/30/2022 4,656,051 (4,656,051) - 10,158,798 45.83% * Measurement period 2013-14 (fiscal year 2015) was the 1st year of implementation.Notes to Schedule:Actuarial Cost MethodAmortization Method/PeriodAsset Valuation MethodActuarial Assumptions:

Discount RateInflationSalary IncreasesMortality Rate TablePost Retirement Benefit Increase

2.50%Varies by Entry Age and ServiceThe 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.The lesser of contract COLA or 2.50% until Purchasing Power Protection Allowance floor on purchasing power applies, 2.50% thereafter.

The actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year 2021-22 were from the June 30, 2020 Funding Valuation Report.

Entry Age NormalFor details, see June 30, 2020 Funding Valuation Report.Market Value of Assets7.15%

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CITY OF LA MESA
Required Supplementary Information Schedule of Plan Contributions Last Ten Years* ‐90-
Safety Plan
Fiscal Year
Actuarially Determined
Contribution
Contributions in Relation
to the Actuarially
Determined Contribution
Contribution
Deficiency
(Excess) Covered Payroll
Contributions as a
Percentage of
Covered Payroll
6/30/2015 6,864,566 $ (6,864,566) $ - $ 9,288,796 $ 73.90%6/30/2016 3,238,613 (3,238,613) - 9,570,037 33.84%6/30/2017 3,767,485 (3,767,485) - 9,992,870 37.70%6/30/2018 4,477,395 (4,477,395) - 9,226,022 48.53%6/30/2019 4,559,719 (4,559,719) - 9,535,932 47.82%6/30/2020 5,192,920 (5,192,920) - 10,584,174 49.06%6/30/2021 5,934,636 (5,934,636) - 10,463,333 56.72%6/30/2022 7,273,122 (7,273,122) - 11,505,777 63.21% * Measurement period 2013-14 (fiscal year 2015) was the 1st year of implementation.Notes to Schedule:Actuarial Cost MethodAmortization Method/PeriodAsset Valuation MethodActuarial Assumptions:

Discount RateInflationSalary IncreasesMortality Rate TablePost Retirement Benefit Increase

The actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year 2021-22 were from the June 30, 2020 Funding Valuation Report.

Entry Age NormalFor details, see June 30, 2020 Funding Valuation Report.Market Value of Assets7.15%

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CITY OF LA MESA
Required Supplementary Information Schedule of Plan Contributions Last Ten Years* ‐91-
PARS Retirement Enhancement Plan
Fiscal Year
Actuarially Determined
Contribution
Contributions in Relation
to the Actuarially
Determined Contribution1
Contribution
Deficiency
(Excess) Covered Payroll
Contributions as a
Percentage of
Covered Payroll
6/30/2015 105,800 $ (105,800) $ - $ 100,872 $ 104.89%
6/30/2016 118,300 (118,300) - 103,896 113.86%
6/30/2017 - - - 105,972 0.00%
6/30/2018 114,700 (125,000) (10,300) 108,096 106.11%
6/30/2019 114,700 (125,000) (10,300) 108,096 106.11%
6/30/2020 22,800 (125,000) (102,200) 113,544 20.08%
6/30/2021 22,800 (125,000) (102,200) 113,544 20.08%
6/30/2022 - (25,689) (25,689) 113,544 0.00%
* Measurement period 2013-14 (fiscal year 2015) was the 1st year of implementation.Notes to Schedule:
1Actual contributions from employer's financial statements.

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CITY OF LA MESA
Required Supplementary Information
Schedule of Changes in the Net OPEB Liability and Related Ratios Last Ten Years*
‐92-

Fiscal Year 2017-18 2018-19 2019-20 2020-21 2021-22
Measurement Period 2016-17 2017-18 2018-19 2019-20 2020-21 Total OPEB Liability
Service cost 177,546 $ 189,976 $ 195,675 $ 210,776 $ 104,011 $ Interest 450,042 465,322 479,727 516,097 415,772
Differences between expected and
actual experience - - 514,636 (1,494,978) 588,094
Changes of assumptions - - (176,855) - 82,245
Benefit payments (393,258) (450,210) (460,206) (566,820) (549,584) Net change in total OPEB liability 205,088 234,330 552,977 (1,334,925) 640,538 Total OPEB liability - beginning 6,448,258 6,682,588 6,887,676 7,440,653 6,105,728 Total OPEB liability - ending (a) 6,682,588 6,887,676 7,440,653 6,105,728 6,746,266 Plan Fiduciary Net Position
Contributions – employer 673,038 744,210 910,206 1,046,550 1,034,864 Net investment income 240,564 216,245 221,144 155,315 1,279,360 Benefit payments (393,258) (450,210) (460,206) (566,820) (549,584) Administrative expense (1,213) (1,484) (1,653) (1,959) (1,763) Other expense - (3,534) - - -
Net change in plan fiduciary net position 519,131 505,227 669,491 633,086 1,762,877 Plan fiduciary net position - beginning 2,152,522 2,671,653 3,176,880 3,846,371 4,479,457 Plan fiduciary net position - ending (b) 2,671,653 3,176,880 3,846,371 4,479,457 6,242,334 Net OPEB liability - ending (a) - (b) 4,010,935 $ 3,710,796 $ 3,594,282 $ 1,626,271 $ 503,932 $ Plan fiduciary net position as a percentage
of the total OPEB liability 40.0% 46.1% 51.7% 73.4% 92.5% Covered payroll 20,699,310 $ 21,602,500 $ 22,439,700 $ 23,695,500 $ 30,502,020 $ Net OPEB liability as a percentage of covered payroll 19.4% 17.2% 16.0% 6.9% 1.7% Notes to Schedule:

Valuation Date June 30, 2021
Actuarial Cost Method Entry age normal, level percentage of payroll Amortization Methodology Straight-line amortization. For assumption changes and experience gains/losses: Expected Average Remaining Service Lifetime of all members that are provided with benefits. For asset gains and losses: 5 years.

Asset Valuation Method Market value
Discount Rate 6.80% as of June 30, 2021 and 7.00% as of July 1, 2020 for accounting disclosure purposes
General Inflation 2.50%
Medical Trend 6.5% for 2022, decreasing to an ultimate rate of 4.5% in 2030 and later years Mortality Employees and retirees: SOA Pub-2010 General Headcount Weighted Mortality Table fully generational using Scale MP-2021.

Surviving Spouses: SOA Pub-2010 Continuing Survivor Headcount Weighted Mortality Table fully generational using Scale MP-2021.

Disabled Retirees: SOA Pub-2010 Safety Headcount Weighted Mortality Table fully generational using Scale MP-2021
Methods and Assumptions for 2021-2022 Actuarially Determined Contribution *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.

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CITY OF LA MESA
Required Supplementary Information
Schedule of OPEB Contributions
Last Ten Years*
‐93-
Fiscal Year 2017-18 2018-19 2019-20 2020-21 2021-2022
Actuarially Determined Contribution (ADC) 564,577 $ 582,063 $ 588,161 $ 582,847 $ 549,584 $ Contributions in relation to the ADC 673,038 744,210 719,379 1,046,550 1,034,864 Contribution deficiency (excess) (108,461) $ (162,147) $ (131,218) $ (463,703) $ (485,280) $ Covered payroll 20,699,310 $ 21,602,500 $ 22,439,700 $ 23,695,500 $ 30,502,020 $ Contributions as a percentage of covered payroll 3.3% 3.4% 3.2% 4.4% 3.4% *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.

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SUPPLEMENTARY INFORMATION

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NON‐MAJOR GOVERNMENTAL FUNDS

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CITY OF LA MESA
Combining Balance Sheet
Non-Major Governmental Funds
June 30, 2022
‐94-
Housing
Rehabilitation/
CDBG Transportation Street
Administration Gas Tax Improvement Parking
Assets
Cash and investments $ 575,976 - $ - $ 436,965 $
Restricted:

Cash and investments - - - -
Receivables:

Accounts 114,385 264 - 38,134
Loans - 139,699 - -
Grants - 450,697 - -
Lease - - - -
Total assets $ 690,361 590,660 $ - $ 475,099 $
Liabilities
Accounts payable $ - 91,972 $ - $ 10,887 $
Salaries payable - - - 9,688
Due to other funds - 211,994 769,787 -
Total liabilities - 303,966 769,787 20,575
Deferred Inflows of Resources
Unearned revenue - housing rehab loans - 139,699 - -
Leases - - - -
Total deferred inflows of resources - 139,699 - -
Fund Balances
Restricted for:

General government - - - -
Public safety - - - -
Capital outlays 690,361 - - -
Community services - - - -
Community development - 146,995 - 454,524
Debt service - - - -
Unassigned - - (769,787) -
Total fund balances (deficit) 690,361 146,995 (769,787) 454,524 Total liabilities, deferred inflows of resources
and fund balances $ 690,361 590,660 $ - $ 475,099 $

SPECIAL REVENUE FUNDS

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‐95-
Community Public Supplemental
Environmental Service Safety County Drug Asset Law
Services Improvement Augmentation Housing Seizure Enforcement $ 107,264 322,351 $ 388,218 $ 555,486 $ 157,374 $ 274,080 $ - - - - - -
- 29,455 32,748 - 157 209
- - - - - -
- - - - - -
- - - - - -
$ 107,264 351,806 $ 420,966 $ 555,486 $ 157,531 $ 274,289 $ $ - 31,623 $ - $ - $ - $ - $
- 4,842 - - - -
- - - - - -
- 36,465 - - - -
- - - - - -
- - - - - -
- - - - - -
- 315,341 - - - -
- - 420,966 - 157,531 274,289
- - - - - -
107,264 - - - - -
- - - 555,486 - -
- - - - - -
- - - - - -
107,264 315,341 420,966 555,486 157,531 274,289
$ 107,264 351,806 $ 420,966 $ 555,486 $ 157,531 $ 274,289 $ (continued)

SPECIAL REVENUE FUNDS

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CITY OF LA MESA
Combining Balance Sheet
Non-Major Governmental Funds, (continued)
June 30, 2022
‐96-
Community
Service Public Safety CIP Donations
Grants Grants Grants Fund
Assets
Cash and investments $ - - $ - $ 7,002 $
Restricted:

Cash and investments - - - -
Receivables:

Accounts - - 46,213 -
Loans - - - -
Grants 91,044 2,897 44,746 -
Lease - - - -
Total assets $ 91,044 2,897 $ 90,959 $ 7,002 $
Liabilities
Accounts payable $ 2,997 2,297 $ - $ - $
Salaries payable 6,322 - - -
Due to other funds 63,599 34,589 28,703 -
Total liabilities 72,918 36,886 28,703 -
Deferred Inflows of Resources
Unearned revenue - housing rehab loans - - - -
Leases - - - -
Total deferred inflows of resources - - - -
Fund Balances
Restricted for:

General government - - - 7,002
Public safety 18,126 - - -
Capital outlays - - 62,256 -
Community services - - - -
Community development - - - -
Debt service - - - -
Unassigned (33,989) - - -
Total fund balances (deficit) 18,126 (33,989) 62,256 7,002 Total liabilities, deferred inflows of resources
and fund balances $ 91,044 2,897 $ 90,959 $ 7,002 $

SPECIAL REVENUE FUNDS

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‐97-

DEBT SERVICE
FUNDS
2006
CASP Road Maintenance PEG Transportation Certificates of Fund Fund Fund Fund Participation
$ 2,105,296 68,565 $ 349,832 $ 6,679 $ - $
- - - - 1
212,668 2,016 3,049 12 -
- - - - -
- - - - -
- - - - -
$ 2,317,964 70,581 $ 352,881 $ 6,691 $ 1 $
$ - 336 $ 12,488 $ - $ - $
- - - - -
- - - - -
- 336 12,488 - -
- - - - -
- - - - -
- - - - -
- - 6,691 340,393 -
- - - - -
- - - - -
2,317,964 70,245 - - -
- - - - -
- - - - 1
- - - - -
2,317,964 70,245 340,393 6,691 1
$ 2,317,964 70,581 $ 352,881 $ 6,691 $ 1 $
(continued)

SPECIAL REVENUE FUNDS

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CITY OF LA MESA
Combining Balance Sheet
Non-Major Governmental Funds, (continued)
June 30, 2022
‐98-

DEBT SERVICE
FUNDS
2016 Parks
Government Obligation Public Storm and
Refunding Bonds Building Drains Recreation
Assets
Cash and investments $ 868,892 3,697,901 $ 157,411 $ 798,916 $ Restricted:

Cash and investments - - - 142,038
Receivables:

Accounts - 14,288 - -
Loans - - - -
Grants - - - 370,485
Lease 367,688 - - -
Total assets $ 1,236,580 3,712,189 $ 157,411 $ 1,311,439 $ Liabilities
Accounts payable $ - - $ 5,421 $ 124,782 $
Salaries payable - - - -
Due to other funds - - - -
Total liabilities - - 5,421 124,782
Deferred Inflows of Resources
Unearned revenue - housing rehab loans - - - -
Leases 324,832 - - -
Total deferred inflows of resources 324,832 - - -
Fund Balances
Restricted for:

General government - - - -
Public safety - - - -
Capital outlays 911,748 - 151,990 1,186,657
Community services - - - -
Community development - - - -
Debt service - 3,712,189 - -
Unassigned - - - -
Total fund balances (deficit) 911,748 3,712,189 151,990 1,186,657 Total liabilities, deferred inflows of resources
and fund balances $ 1,236,580 3,712,189 $ 157,411 $ 1,311,439 $

CAPITAL PROJECTS FUNDS

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‐99-
Total
Misc Capital Asset Non-Major
Civic Capital Management Governmental
Center Improvement Plan Funds
$ 317,676 92,599 $ 881,718 $ $ 12,170,201
- - - 142,039
- - - 493,598
- - - 139,699
- - - 959,869
- - - 367,688
$ 317,676 92,599 $ 881,718 $ 14,273,094 $
$ - - $ - $ $ 282,803
- - - 20,852
- - - 1,108,672
- - - 1,412,327
- - - 139,699
- - - 324,832
- - - 464,531
- - - 669,427
- - - 870,912
317,676 92,599 881,718 4,295,005
- - - 2,495,473
- - - 1,157,005
- - - 3,712,190
- - - (803,776)
317,676 92,599 881,718 12,396,236
$ 317,676 92,599 $ 881,718 $ 14,273,094 $
(concluded)

CAPITAL PROJECTS FUNDS

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CITY OF LA MESA
Combining Statement of Revenues, Expenditures,
and Changes in Fund Balances
Non-Major Governmental Funds
For the Year Ended June 30, 2022
‐100-
Housing
Rehabilitation/
CDBG Transportation Street
Administration Gas Tax Improvement Parking
Revenues:

Property taxes $ - - $ - $ - $
Other taxes - - - -
Licenses and permits - - - -
Fines and forfeitures - - - 84,323
Use of money and property - (9,336) - 318,498
Intergovernmental 1,422,707 450,697 656,990 -
Charges for services - - - -
Other revenues 7,547 - - -
Total revenues 1,422,707 448,908 656,990 402,821
Expenditures:

Current:

General government - - - 12,829
Police - - - 137,055
Fire - - - 245
Community development - 532,668 - 154,795
Community services - - - -
Capital outlay - - - -
Debt service:

Principal retirement - - 500,004 -
Interest and fiscal charges - - 6,986 -
Total expenditures - 532,668 506,990 304,924
Excess (deficiency) of
revenues over (under) expenditures 1,422,707 (83,760) 150,000 97,897 Other financing sources (uses):

Transfers in - - - -
Transfers out - (1,118,625) (711,426) (125,500)
Total other financing sources (uses) - (1,118,625) (711,426) (125,500) Net change in fund balances 304,082 (83,760) (561,426) (27,603) Fund balances (deficit), beginning of year 386,279 230,755 482,127 (208,361) Fund balances (deficit), end of year $ 690,361 146,995 $ $ 454,524 (769,787) $

SPECIAL REVENUE FUNDS

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‐101-
Community Public Supplemental
Environmental Service Safety County Drug Asset Law
Services Improvement Augmentation Housing Seizure Enforcement $ - - $ - $ - $ - $ - $
- - 399,040 - - -
- - - - - -
- - - - 23,166 -
- (11,809) - (7,534) (5,562) (7,391)
- 100,032 - - - 161,285
- 422,904 - - - -
10,006 - - - - -
10,006 511,127 391,506 - 17,604 153,894
- 596,724 - - - -
- - - - 407 -
- - - - - -
- - - - - -
- - - - - -
- - - - - -
- - - - - -
- - - - - -
- 596,724 - - 407 -
10,006 (85,597) 391,506 - 17,197 153,894
- 50,000 - - - -
(57,200) - (6,000) - - -
(7,200) - (6,000) - - -
4,006 (92,797) 391,506 - 17,197 153,894
103,258 408,138 29,460 555,486 140,334 120,395
$ 107,264 315,341 $ 420,966 $ 555,486 $ 157,531 $ 274,289 $ (continued)

SPECIAL REVENUE FUNDS

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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, 2022
‐102-
Community
Service Public Safety CIP Donations
Grants Grants Grants Fund
Revenues:

Property taxes $ - - $ - $ - $
Other taxes - - - -
Licenses and permits - - - -
Fines and forfeitures 1,557 - - -
Use of money and property - - - -
Intergovernmental 623,043 100,384 1,252,326 -
Charges for services - 7,196 - -
Other revenues 12,206 - - -
Total revenues 624,600 119,786 1,252,326 -
Expenditures:

Current:

General government - - - -
Police 550,307 - - -
Fire - - - -
Community development - 67,000 - -
Community services - 123,705 - -
Capital outlay - - - -
Debt service:

Principal retirement - - - -
Interest and fiscal charges - - - -
Total expenditures 550,307 190,705 - -
Excess (deficiency) of
revenues over (under) expenditures 74,293 (70,919) 1,252,326 - Other financing sources (uses):

Transfers in - - - -
Transfers out - - - (1,190,070)
Total other financing sources (uses) - - - (1,190,070)
Net change in fund balances 74,293 (70,919) 62,256 -
Fund balances (deficit), beginning of year (56,167) 36,930 - 7,002 Fund balances (deficit), end of year $ 18,126 (33,989) $ 62,256 $ 7,002 $

SPECIAL REVENUE FUNDS

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‐103-

DEBT SERVICE
FUNDS
2006
CASP Road Maintenance PEG Transportation Certificates of Fund Fund Fund Fund Participation
$ - - $ - $ - $ - $
- - 109,337 - -
- - - - -
- - - - -
- - (61,909) 2 (423)
1,205,433 - - - -
17,839 - - - -
- - - - -
1,143,524 17,839 109,337 (423) 2
- - 396,730 - 4,699
- - - - -
- - - - -
- - - - -
- - - - -
- - - - -
- - - - 330,000
- - - - 116,692
- - 396,730 - 451,391
1,143,524 17,839 (287,393) (423) (451,389)
- - - - 447,708
- - (100,000) - (55,670)
- - (100,000) 447,708 (55,670)
1,043,524 17,839 (287,393) (56,093) (3,681)
1,274,440 52,406 627,786 62,784 3,682
$ 2,317,964 70,245 $ 340,393 $ 6,691 $ 1 $
(continued)

SPECIAL REVENUE FUNDS

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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, 2022
‐104-

DEBT SERVICE
FUNDS
2016 Parks
Government Obligation Public Storm and
Refunding Bonds Building Drains Recreation
Revenues:

Property taxes $ - 1,604,594 $ - $ - $
Other taxes - - - -
Licenses and permits - - - 146,895
Fines and forfeitures - - - -
Use of money and property 134,130 (110,521) - 25,307
Intergovernmental - - - 370,485
Charges for services - - - -
Other revenues - - - -
Total revenues 134,130 1,494,073 - 542,687
Expenditures:

Current:

General government - 5,754 - -
Police - - - -
Fire - - - -
Community development - - - -
Community services - - - -
Capital outlay 49,313 - 368,547 548,065
Debt service:

Principal retirement - 810,000 - -
Interest and fiscal charges - 766,150 - -
Total expenditures 49,313 1,581,904 368,547 548,065
Excess (deficiency) of
revenues over (under) expenditures 84,817 (87,831) (368,547) (5,378) Other financing sources (uses):

Transfers in 150,000 - 363,005 88,140
Transfers out - - (141,965) -
Total other financing sources (uses) 8,035 - 363,005 88,140 Net change in fund balances 92,852 (87,831) (5,542) 82,762 Fund balances (deficit), beginning of year 818,896 3,800,020 157,532 1,103,895 Fund balances (deficit), end of year $ 911,748 3,712,189 $ 151,990 $ 1,186,657 $

CAPITAL PROJECTS FUNDS

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Total
Misc Capital Asset Non-Major
Civic Capital Management Governmental
Center Improvement Plan Funds
$ - - $ - $ $ 1,604,594
- - - 508,377
- - - 146,895
- - - 109,046
- - - 263,452
- - - 6,343,382
- - - 447,939
- - - 29,759
- - - 9,453,444
- - - 1,016,736
- - - 687,769
- - - 245
- - - 754,463
- - - 123,705
- - - 965,925
- - - 1,640,004
- - - 889,828
- - - 6,078,675
- - - 3,374,769
- - 141,916 1,240,769
- - (150,000) (3,656,456)
- - (8,084) (2,415,687)
- - (8,084) 959,082
317,676 92,599 889,802 11,437,154
$ 317,676 92,599 $ 881,718 $ $ 12,396,236
(concluded)

CAPITAL PROJECTS FUNDS

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INTERNAL SERVICE FUNDS

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CITY OF LA MESA
Combining Statement of Net Position
Internal Service Funds
June 30, 2022
-106-
Employee Workers' Equipment Liability Risk
Benefits Compensation Replacement Financing Total
Assets
Current assets:

Cash and investments 496,806 $ 6,404,478 $ 3,064,474 $ 1,116,542 $ 11,082,300 $ Accounts receivable, net - 6,815 3,435 142,758 153,008
Total current assets 496,806 6,411,293 3,067,909 1,259,300 11,235,308 Noncurrent assets:

Restricted cash and investments 12,801 185,621 - 22,112 220,534 Intangible assets - - 3,291,866 - 3,291,866
Intangible assets - right-to-use assets, net - - 459,246 - 459,246 Capital assets:

Depreciable, net - - 3,276,789 - 3,276,789
Total capital assets - - 3,276,789 - 3,276,789
Total noncurrent assets 12,801 185,621 7,027,901 22,112 7,248,435 Total assets 509,607 6,596,914 10,095,810 1,281,412 18,483,743 Liabilities
Current liabilities:

Accounts payable 969,377 71 207,583 420,855 1,597,886
Salaries payable - 2,771 - 2,771 5,542
Interest payable - - 4,499 - 4,499
Long-term liabilities - due in one year - - 284,125 - 284,125 Total current liabilities 969,377 2,842 496,207 423,626 1,892,052 Noncurrent liabilities:

Long-term liabilities - due in more than one year - - 830,105 - 830,105 Claims payable - 4,923,270 - 1,024,664 5,947,934
Total noncurrent liabilities - 4,923,270 830,105 1,024,664 6,778,039 Total liabilities 969,377 4,926,112 1,326,312 1,448,290 8,670,091 Net Position
Net investment in capital assets - - 5,913,671 - 5,913,671 Restricted 12,801 185,621 - 22,112 220,534
Unrestricted (472,571) 1,485,181 2,855,827 (188,990) 3,679,447 Total net position (deficit) (459,770) $ 1,670,802 $ 8,769,498 $ (166,878) $ 9,813,652 $

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CITY OF LA MESA
Combining Statement of Activities, and Changes in Net Position Internal Service Funds
For the Year Ended June 30, 2022
-107-
Employee Workers' Equipment Liability Risk
Benefits Compensation Replacement Financing Total
Operating Revenues:

Charges for services 4,210,560 $ 1,110,110 $ 1,851,630 $ - $ 7,172,300 $ Other operating revenues 44,189 351,976 - 142,295 538,460 Total operating revenues 4,254,749 1,462,086 1,851,630 142,295 7,710,760 Operating Expenses:

Salaries and payroll - 177,312 - 177,312 354,624
Professional services 4,245,764 1,036,968 897,861 682,865 6,863,458 Supplies and materials - 1,856 - 5,157 7,013
Insurance premiums and settlements - 833,596 - 2,211,926 3,045,522 Depreciation - - 631,622 - 631,622
Amortization - - 51,028 - 51,028
Total operating expenses 4,245,764 2,049,732 1,580,511 3,077,260 10,953,267 Operating income (loss) 8,985 271,119 (587,646) (2,934,965) (3,242,507) Nonoperating Revenues (Expenses):

Investment income (loss) - (240,965) (121,445) (16,372) (378,782) Interest expense - - (25,080) - (25,080)
Gain (loss) on disposal of assets - - (301,425) - (301,425) Total nonoperating income (loss) - (240,965) (447,950) (16,372) (705,287) Income (loss) before transfers 8,985 (828,611) (176,831) (2,951,337) (3,947,794) Transfers:

Transfers in - - - 1,888,900 1,888,900
Total transfers - - - 1,888,900 1,888,900
Change in net position 8,985 (828,611) (176,831) (1,062,437) (2,058,894) Net position (deficit), beginning of year 2,499,413 (468,755) 8,946,329 895,559 11,872,546 Net position (deficit), end of year $ 1,670,802 (459,770) $ 8,769,498 $ $ 9,813,652 (166,878) $

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CITY OF LA MESA
Combining Statement of Cash Flows
Internal Service Funds
For the Year Ended June 30, 2022
-108-
Employee Workers' Equipment Liability Risk
Benefits Compensation Replacement Financing Total

CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers/other funds 4,210,560 $ 1,532,565 $ 1,851,936 $ - $ 7,595,061 $ Cash payments to suppliers for goods and services - (1,184,067) (696,735) (327,877) (2,208,679) Cash payments to employees for services - (180,086) - (180,086) (360,172) Insurance premiums and settlements (4,543,910) (482,548) - (1,444,018) (6,470,476) Other operating revenues 44,189 351,976 - 695 396,860
Net Cash Provided (Used) by Operating Activities (289,161) 37,840 1,155,201 (1,951,286) (1,047,406)

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Transfers in - - - 1,888,900 1,888,900
Net Cash Provided Noncapital Financing Activities - - - 1,888,900 1,888,900

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition of capital assets - - (1,031,159) - (1,031,159) Payment of interest - - (25,080) - (25,080)
Payments on notes/leases payable - - (284,508) - (284,508) Net Cash (Used) for Capital and Related Financing Activities - - (1,340,747) - (1,340,747)

CASH FLOWS FROM INVESTING ACTIVITIES
Investment income - (240,965) (121,445) (16,372) (378,782) Net Cash (Used) by Investing Activities - (240,965) (121,445) (16,372) (378,782) Net Increase (Decrease) in Cash and Cash Equivalents (289,161) (203,125) (306,991) (78,758) (878,035) Cash and Cash Equivalents - beginning of the year 6,793,224 798,768 3,371,465 1,217,412 12,180,869 Cash and Cash Equivalents - end of the year $ 6,590,099 509,607 $ 3,064,474 $ 1,138,654 $ 11,302,834 $

RECONCILIATION TO STATEMENT OF NET POSITION
Current assets:

Cash and cash equivalents 496,806 $ 6,404,478 $ 3,064,474 $ 1,116,542 $ 11,082,300 $ Cash and cash equivalents - restricted 12,801 185,621 - 22,112 220,534 Total cash and cash equivalents 509,607 $ 6,590,099 $ 3,064,474 $ 1,138,654 $ 11,302,834 $ Reconciliation of operating income (loss) to net cash provided (used) by operating activities:

Operating income (loss) 8,985 $ (587,646) $ 271,119 $ (2,934,965) $ (3,242,507) $ Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities:

Depreciation expense - - 631,622 - 631,622
Amortization expense - - 51,028 - 51,028
Change in assets and liabilities:

Accounts receivable - 422,455 306 (141,600) 281,161
Accounts payable (298,146) (145,243) 201,126 360,145 117,882 Claims payable - 351,048 - 767,908 1,118,956
Salaries and benefits payable - (2,774) - (2,774) (5,548) Net Cash Provided (Used) by Operating Activities (289,161) $ 37,840 $ 1,155,201 $ (1,951,286) $ (1,047,406) $ Noncash Financing Activities
Acquisition of right to use asset - $ - $ (510,274) $ - $ (510,274) $ Lease liability - - 510,274 - 510,274

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-1-
May 22, 2023
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, 2022 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 May 22, 2023.

Financial Statements

1. We have fulfilled our responsibilities, as set out in the terms of the audit engagement dated May 13, 2022, 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.

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-2-

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. GAAP.

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

11. The effects of uncorrected misstatements summarized in the attached schedule and aggregated by you during the current engagement are immaterial, both individually and in the aggregate, to the applicable opinion units and to the financial statements as a whole.

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

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

14. All funds and activities are properly classified.

15. All funds that meet the quantitative criteria in GASB Statement No. 34, Basic Financial Statements—and Management's Discussion and Analysis—for State and Local Governments, GASB Statement No. 37, Basic Financial Statements—and Management's Discussion and Analysis—for State and Local Governments: Omnibus as amended, and GASB 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.

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

17. 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.

18. 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.

19. 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.

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

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-3-

21. Special items and extraordinary items have been properly classified and reported.

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

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

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

25. 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.

26. 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.

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2. The financial statements and any other information included in the annual report are consistent with one another, and the other information does not contain any material misstatements

3. All transactions have been recorded in the accounting records and are reflected in the financial statements.

4. 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.

5. 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.

6. 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.

7. 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.

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

9. 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.

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

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

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

13. 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.

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14. 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.

15. 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 AICPA 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.

16. 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.

17. 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).

18. 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.

19. 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.

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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.
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 acknowledge 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.

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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 Royales
Director of Finance

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Schedule of Uncorrected Misstatements
-8-
In the current year the City did not post adjustment to cash in order to agree ending balance to the June 2022 Trust statements for General Liability Program.

Amount of
Misstatement
Asset
Over/(Under) Stated
Opinion Unit Account
Classification
$47,663 $(47,663) Aggregate Remaining Asset

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- 1 -
May 22, 2023
To the Honorable City Council
City of La Mesa
La Mesa, California
We have audited the financial statements of the City of La Mesa, California, (the City) as of and for the year ended June 30, 2022, and have issued our report thereon dated May 22, 2023. 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 13, 2022, 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. 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 entity’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.

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- 2 -
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, others in our firm, as appropriate, and our firm, have 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 – Revenue recognition is a generally accepted accounting principle that refers to the conditions under which an entity can recognize a transaction as revenue. Auditing standards indicate that recognizing revenue is a presumed fraud risk and usually classified as a significant risk in most audits.

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 City’s Significant Accounting Practices Significant Accounting Policies
Management has the responsibility to select and use appropriate accounting policies. A summary of the significant accounting policies adopted by the City is included in Note 1 to the financial statements. As described in Note 1 of the financial statements, during the year, the City adopted provisions of Governmental Accounting Standards Board Statement No. 87, Leases. 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.

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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 fair market value of investments based on market values provided by outside sources. We evaluated the key factors and assumptions used to develop the fair market value of investments in determining that it is reasonable in relation to the financial statements taken as a whole.

Management’s estimate of capital asset depreciation 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 as a whole.

Management’s estimate of the net pension liability and related deferred inflows and outflows are 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 liability for other post-employment benefits 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 as a whole.

Management’s estimate of leases receivable, deferred inflows of resources related to leases, and lease amortization is based on present value calculations using certain terms and assumptions in the lease agreements in accordance with generally accepted accounting principles. Management’s estimate of lease liabilities, right-to-use assets, and asset amortization is based on present value calculations using certain terms and assumptions in the lease agreements and estimated useful lives of assets in accordance with generally accepted accounting principles. We evaluated the key factors and assumptions used to develop the lease related estimates 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 relate to:

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

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The disclosure of accumulated depreciation, in notes to the basic 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.

The disclosure of the other post-employment benefits (OPEB) and related deferred inflows and outflows in the notes to the basic financial statements is based on actuarial assumptions.

Actual future liabilities may vary from disclosed estimates.

The disclosure of leases receivable, deferred inflows of resources related to leases, lease amortization, leases liabilities, right-to-use assets, and asset amortization in the basic financial statements is based on certain terms and assumptions in the lease agreements which could differ from actual amounts.

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 relevent classes of transactions, account balances or disclosures, and the financial statements as a whole and each applicable opinion unit. The attached schedule summarizes uncorrected financial statement misstatements whose effects in the current and prior periods, as determined by management, are immaterial, both individually and in the aggregate, to the financial statements taken as a whole. Uncorrected misstatements or matters underlying those uncorrected misstatements could potentially cause future-period financial statements to be materially misstated, even though the uncorrected misstatements are immaterial to the financial statements currently under audit.

In addition, professional standards require us to communicate to you all material, corrected misstatements that were brought to the attention of management as a result of our audit procedures. 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.

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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 May 22, 2023.

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.

Other Information Included in Annual Reports
Pursuant to professional standards, our responsibility as auditors for other information in documents containing the City’s audited financial statements does not extend beyond the financial 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 have 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 Required Supplementary Information (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.

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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.

San Bernardino, California

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Uncorrected Financial Statement Misstatements
In the fiscal year ended June 30, 2022, the City did not post adjustment to cash in order to agree ending balance to the June 2022 Trust statements for General Liability Program.

Amount of
Misstatement
Asset
Over/(Under)
Stated
Opinion Unit Account
Classification
$47,663 $(47,663) Aggregate Remaining Asset

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

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 May 22, 2023.

Financial Statements

GAAP.

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.

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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. GAAP.

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

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

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

14. All funds and activities are properly classified.

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

19. 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.

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

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21. Special items and extraordinary items have been properly classified and reported.

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

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

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

Information Provided

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