CITY COUNCIL
AGENDA
MONDAY, FEBRUARY 28, 2022
VIRTUAL REGULAR MEETING – 7:00 PM
REVISED AGENDA
(New Item 1.3 Closed Session)
CLOSED SESSION - 5:00 pm
TELECONFERENCE:
MEETING PARTICIPATION INFORMATION CAN BE FOUND AT THE END OF THE AGENDA
CITY OF LIVERMORE YOUTUBE CHANNEL:
https://www.youtube.com/c/CityofLivermoreCalifornia
ZOOM WEBINAR:
https://us02web.zoom.us/j/81268545003
Zoom dial in phone number:
1 669 900 6833
Meeting ID: 812 6854 5003
Bob Woerner, Mayor
Regina Bonanno, Vice Mayor
Robert W Carling, Council Member
Brittni Kiick, Council Member
Trish Munro, Council Member
Livermore City Council Agenda February 28, 2022
1 1.
CLOSED SESSION - 5:00 PM
Roll Call
Opportunity for the Public to Address City Council Regarding Closed Session Items Adjourn to Closed Session
Note:
This Closed Session may be continued to the end of the Regular Meeting.
1.1 Conference with Legal Counsel - Existing Litigation. To meet with legal counsel pursuant to Government Code section 54956.9(d)(1) to discuss litigation that has been formally initiated. (Three cases)
D.L. Falk Construction Inc. v. City of Livermore, Alameda County Superior Court Case No.
RG20079788
Save Livermore Downtown v. City of Livermore, et al. Alameda County Superior Court Case No. RG21102761
Deanna Gonzalez v. City of Livermore, David M. Neilson, et al, Alameda County Superior Court Case No. HG20055188
1.2 Conference with Real Property Negotiator. To meet with Paul Spence and Fran Reisner, the City’s negotiators pursuant to Government Code section 54956.8, regarding amendments to the disposition and development and loan agreement authorized by the City Council on September 24, 2018, and the first amendment authorized by the City Council on May 25, 2021, for the sale and disposition of the real property located at 2009-2111 Railroad Avenue (Assessor’s Parcel Number 098-0289-021-00). The City negotiators may negotiate with Jeremy Hoffman and Matt Graves on behalf of the Eden Housing Inc. The instructions will concern amendments to the terms and conditions in the agreement and the performance schedule in response to litigation effects on the project’s timeline.
1.3 Conference with Labor Negotiator, Conference Joint Powers Agency Confidential Information.
To meet with Senior Human Resources Analyst Kristen Hilton and Art Hartinger, the City’s and the Livermore-Pleasanton Fire Department's negotiators, pursuant to Government Code sections 54957.6 and 54956.96, regarding the Livermore-Pleasanton Fire Department Joint Powers Authority’s negotiations with The International Association of Firefighters, Local 1974, AFL-CIO-CLC.
2. CALL TO ORDER
ROLL CALL
Council Member Robert W. Carling
Council Member Brittni Kiick
Council Member Trish Munro
Vice Mayor Regina Bonanno
Mayor Bob Woerner
Livermore City Council Agenda
February 28, 2022
2 3.
PROCLAMATIONS AND PRESENTATIONS
3.1 Library Board of Trustees Annual Update provided by 2021 Library Board of Trustees Chair Art Pontau.
Recommendation:
Staff recommends the City Council receive the presentation.
Staff Report
3.2 Proclamation honoring the 30th Anniversary of Livermore Valley Opera presented to Keith Sawyer, Livermore Valley Opera president, and Raquel Holt, Founder and Board Member.
Recommendation:
Staff recommends City Council honors Livermore Valley Opera on their 30th anniversary.
Staff Report
Attachments:
1. Proclamation
4. CITIZENS FORUM
In conformance with the Brown Act, no City Council action can occur on items presented during Citizens Forum.
Please log into Zoom to provide verbal public comment during the City Council Meeting.
Comments are limited to a maximum of 3 minutes per person, per item. The Mayor may reduce the amount of time based on the number of persons wishing to speak.
Citizens Forum will conclude after 30 minutes; however, if there are additional speakers, Citizens Forum will reconvene before the meeting adjourns.
5. CONSENT CALENDAR
Consent Calendar items are considered routine and are acted upon by the City Council with a single action. Members of the audience wishing to provide public input must use the raise hand feature.
5.1 Approval of draft minutes - February 14, 2022 Regular Meeting.
Recommendation:
Staff recommends the City Council approve the draft minutes.
Staff Report
Attachments:
1. Draft 2022-02-14 Meeting Minutes
5.2 Adoption of an ordinance
amending and restating Chapters 13.26 and 13.27 of the
PLEDGE OF ALLEGIANCE
REPORT OF ACTION TAKEN IN CLOSED SESSION
Livermore City Council Agenda
February 28, 2022
3 Livermore Municipal Code pertaining to water conservation measures.
Recommendation:
Staff recommends that the City Council adopt an ordinance amending and restating Chapters
13.26 and 13.27 of the Livermore Municipal Code pertaining to water conservation.
Staff Report
Attachments:
1. Ordinance
2. Exhibit A - Amended and Restated Chapters 13.26 Water Conservation and 13.27 Mandatory Drought Conservation Measures
5.3 Resolution authorizing an agreement with Kaizen InfoSource, LLC for records management consulting in an amount not-to-exceed $160,000.
Recommendation:
Staff recommends City Council adopt a resolution authorizing an agreement with Kaizen InfoSource, LLC for records management consulting in an amount not-to-exceed $160,000.
Staff Report
Attachments:
1. Resolution
2. Exhibit A - Kaizen InfoSource, LLC Agreement
5.4 Resolution authorizing execution of the agreements with Savant Solutions and Artic Wolf for cybersecurity services in an amount not-to-exceed $294,856.
Recommendation:
Staff recommends City Council authorize execution of the agreements with Savant Solutions, Inc. and Artic Wolf Networks, Inc. for cybersecurity services in an amount not-to-exceed $294,856.
Staff Report
Attachments:
1. Resolution
2. Exhibit A - Savant Solutions Inc Professional Services Agreement
3. Exhibit B - Arctic Wolf Networks Inc Solutions Agreement
5.5 Resolution granting consent to the City of Pleasanton to renew the Tri-Valley Tourism Marketing District
Recommendation:
Staff recommends City Council adopt a resolution granting consent to the City of Pleasanton to renew the Tri-Valley Tourism Marketing District.
Staff Report
Attachments:
1. Management District Plan
Livermore City Council Agenda
February 28, 2022
4 2. Pleasanton City Council Resolution 22-1267
3. Resolution
5.6 Resolution accepting Other Post Employment Benefits (OPEB) 2020 Valuation Report and updates to the OPEB Policy
Recommendation:
Staff recommends that the City Council adopt a resolution in accordance with the City’s OPEB Policy accepting the June 30, 2020, OPEB Actuarial Valuation report and approving updates to the OPEB Policy.
Staff Report
Attachments:
1. OPEB Policy Red Line
2. Resolution
3. Exhibit A - OPEB Actuarial Valuation June 30, 2020
4. Exhibit B - OPEB Policy
5.7 Resolution accepting the Annual Comprehensive Financial Report (ACFR) and Other Audit Reports for the Fiscal Year Ended June 30, 2021
Recommendation:
Staff recommends the City Council adopt a resolution accepting the following reports for Fiscal Year 2020-21 as completed:
Annual Comprehensive Financial Report, and ratify and approve the audited financial statements presented therein in accordance with Government Code §37208; Alameda County Transportation Commission Measure B Program Financial Statements;
Alameda County Transportation Commission Measure BB Program Financial Statements;
Alameda County Transportation Commission Vehicle Registration Fee (VRF) Measure F Program Financial Statements;
Agreed Upon Procedures for Compliance with the Proposition 111 2020-21 Appropriations Limit Increment;
Memorandum of Internal Control;
Required Communications.
Staff Report
Attachments:
1. Resolution
2. Exhibit A - FY 2021 Annual Comprehensive Financial Report (ACFR)
3. Exhibit B - FY 2021 Measure B
4. Exhibit C - FY 2021 Measure BB
5. Exhibit D - FY 2021 Measure F
6. Exhibit E - Appropriations Limit
Livermore City Council Agenda
February 28, 2022
5 7. Exhibit F - Memorandum on Internal Control (MOIC)
8. Exhibit G - Required Communications
5.8 Resolution of a continued local emergency and reauthorizing remote teleconference meetings for City of Livermore's legislative bodies in accordance with Assembly Bill 361
Recommendation:
Staff recommends City Council adopt a resolution of a continued local emergency and reauthorizing remote teleconference meetings for City of Livermore's legislative bodies in accordance with Assembly Bill 361.
Staff Report
Attachments:
1. Resolution
6. PUBLIC HEARINGS
7. MATTERS FOR CONSIDERATION
7.1 Discussion and direction related to the results of a public opinion poll for an Asset Management Revenue Measure
Recommendation:
Staff recommends the City Council receive results of a public opinion poll and direct staff not to proceed with a revenue measure.
Staff Report
Attachments:
1. Poll Results
7.2 Default Local Campaign Contribution Limits.
Recommendation:
Staff recommends City Council receive the report on the State's default campaign contribution limit for elective city offices in Livermore, and provide direction if appropriate.
Staff Report
Attachments:
1. FPPC Fact Sheet
8. COUNCIL COMMITTEE REPORTS AND MATTERS INITIATED BY CITY
MANAGER, CITY ATTORNEY, STAFF, AND COUNCIL MEMBERS
9. ADJOURNMENT
To a Special Closed Session City Council meeting on March 9, 2022 at 9:00 a.m., held virtually using Zoom.
10. SUPPLEMENTAL MATERIALS
Livermore City Council Agenda
February 28, 2022
6 10.1
Supplemental materials received prior to the meeting.
Staff Report
Attachments:
1. Supplemental Materials
HOW TO PARTICIPATE IN YOUR CITY COUNCIL MEETING
You can participate in the meeting in a number of ways:
Citizens Forum
is an opportunity for the public to speak regarding items not listed on the agenda.
Speakers are limited to a maximum of 3 minutes per person. To submit a comment using Zoom, you may use the 'raise hand' feature. You should be aware that the City Council is prohibited by State law from taking action on any items that are not listed on the agenda. However, if your item requires action, the City Council may place it on a future agenda or direct staff to work with you and/or report to the City Council on the issue.
Public Hearings
- The topic of the hearing is typically summarized by staff, followed by questions from the City Council and a presentation by the applicant. The Mayor will then open the hearing to the public and offer an opportunity for public comments. You may use the 'raise hand' feature in Zoom and take 3 minutes to make your comments.
Other Agenda Items
are also open for public input including Consent Calendar or Matters for Consideration items. These comments are also subject to the 3 minute limit.
Special Meetings, Workshops
- The public will have the opportunity to address the City Council regarding the item that is the subject of the special meeting or workshop. Public comments are limited to a maximum of 3 minutes per person.
Platforms to Participate in Virtual Meetings:
Submission of Comments Prior to the Meeting:
Email Comments
may be submitted by the public to the City Clerk’s Office (
[email protected]
). Items received no later than 12:00 pm on the day of the meeting will be provided to the City Council and available on the City website prior to the meeting. These items will NOT be read into the record.
eComments
may be submitted by the public using the eComment link
here
. Comments may be up to
1000 characters in length and will be accepted up until 4PM the day of the meeting. These items will NOT be read into the record and are viewable by the the City Council and the public upon submittal.
Submission of Comments During the Meeting:
Speakers are limited to a maximum of 3 minutes per person. To submit a comment using Zoom, you may use the 'raise hand' feature. You should be aware that the City Council is prohibited by State law from taking action on any items that are not listed on the agenda. However, if your item requires action, the City Council may place it on a future agenda or direct staff to work with you and/or report to the City Council on the issue.
Livermore City Council Agenda
February 28, 2022
7 The City will be using YouTube and TV29 as two tools to provide the public access to view City Council meetings. No public comment will be accepted via YouTube.
TV29:
tv29live.org
YouTube:
h
ttp://youtube.com/c/CityofLivermoreCalifornia
Zoom Webinar:
https://us02web.zoom.us/j/81268545003
Zoom dial in phone number:
1 669 900 6833
Meeting ID: 812 6854 5003
If you would like to deliver written materials to the City Council as part of their electronic comments during a meeting, the speaker must identify that intent in his or her comment submitted and immediately email the materials to the City Clerk at
[email protected]
.
The
City Council Agenda and Agenda Reports
are prepared by City staff and are available for public review on Tuesday evening, six days prior to the City Council meeting in the Civic Center Library, 1188 South Livermore Avenue, Livermore, and at the City Clerk’s Office, 1052 South Livermore Avenue, Livermore. The Agenda is also available on the City’s website, http://cityoflivermore.net/agenda
.
Under Government Code §54957.5, any
supplemental material
distributed to the members of the City
Council after the posting of this agenda will be available for public review in the City Clerk’s Office, 1052 South Livermore Avenue, Livermore, and included in the agenda packet available on the City’s web site at
http://cityoflivermore.net/agenda
.
PURSUANT TO TITLE II OF THE AMERICANS WITH DISABILITIES ACT (CODIFIED AT 42 UNITED STATES CODE SECTION 12101 AND 28 CODE OF FEDERAL REGULATIONS PART 35), AND SECTION 504 OF THE REHABILITATION ACT OF 1973, THE CITY OF LIVERMORE DOES NOT
DISCRIMINATE ON THE BASIS OF RACE, COLOR, RELIGION, NATIONAL ORIGIN, ANCESTRY,
SEX, DISABILITY, AGE OR SEXUAL ORIENTATION IN THE PROVISION OF ANY SERVICES, PROGRAMS, OR ACTIVITIES. TO ARRANGE AN ACCOMMODATION IN ORDER TO PARTICIPATE
IN THIS PUBLIC MEETING, PLEASE CONTACT THE ADA COORDINATOR AT [email protected]
OR CALL (925) 960-4170 (VOICE) OR (925) 960-
4104 (TDD) AT LEAST THREE (3) BUSINESS DAYS IN ADVANCE OF THE MEETING.
Livermore City Council Agenda
February 28, 2022
8 CITY COUNCIL STAFF REPORT
ITEM NO. 3.1
DATE:
February 28, 2022
TO:
Honorable Mayor and City Council
FROM:
Anwan Baker, Library Director
SUBJECT:
Library Board of Trustees Annual Update provided by 2021 Library Board of Trustees Chair Art Pontau.
RECOMMENDED ACTION
Staff recommends the City Council receive the presentation.
SUMMARY
DISCUSSION
ATTACHMENTS
Prepared by: Allen McFarland
Administrative Assistant
Approved by:
____________________________________
Marc Roberts
City Manager
Fiscal Review by:
____________________________________
Bhavna Chaudhary
City Treasurer/Finance Manager
9 CITY COUNCIL STAFF REPORT
ITEM NO. 3.2
DATE:
February 28, 2022
TO:
Honorable Mayor and City Council
FROM:
Marc Roberts, City Manager
SUBJECT:
Proclamation honoring the 30th Anniversary of Livermore Valley Opera presented to Keith Sawyer, Livermore Valley Opera president, and Raquel Holt, Founder and Board Member.
RECOMMENDED ACTION
Staff recommends City Council honors Livermore Valley Opera on their 30th anniversary.
SUMMARY
DISCUSSION
ATTACHMENTS
1. Proclamation
Prepared by: Stephanie Egidio
Management Analyst
Approved by:
____________________________________
Marc Roberts
City Manager
Fiscal Review by:
____________________________________
Bhavna Chaudhary
City Treasurer/Finance Manager
10 f rnrlamafinu
of the
City of Livern1ore
Honoring
30th Anniversary of Livermore Valley Opera
February 2022
WHEREAS, a love of opera and a vision to bring quality opera to the Tri-Valley led a small group, guided by Doug and Raquel Holt, to found the Livermore Valley Opera (LVO) in 1992; and WHEREAS, in three decades, L VO has grown from a small group of devoted volunteers to a professional non-profit arts organization that was selected as the winner of The American Prize in Opera Performance, 2021, in the professional division for "A Florentine Tragedy" and "Gianni Schicchi"; and WHEREAS, Livermore Valley Opera's mission is to enrich the community by producing world class operas and foster the careers of professional singers; and WHEREAS, in support of their mission, L VO has undertaken outreach programs to schools, libraries, senior communities, and service clubs; L VO is also very proud of hiring young professional singers, some of whom have gone on to careers with major opera houses in the United States and in Europe; and WHEREAS, the heart and soul of Livermore Valley Opera is in the group of professionals in all areas who volunteer their time, talents, and expertise; all working together to achieve the L VO mission; NOW THEREFORE, the City Council of the City of Livermore honors Livermore Valley Opera upon the occasion of their 30th Anniversary, recognizes the contributions of LVO to the Livermore community and the greater Bay Area, and wishes them continued success in the future.
Mayor Bob Woerner
Council Member Robert W. Carling
Council Member Brittni Kiick
Council Member Patricia K. Munro
11 CITY COUNCIL STAFF REPORT
ITEM NO. 5.1
DATE:
February 28, 2022
TO:
Honorable Mayor and City Council
FROM:
Marie Weber, Acting Administrative Services Director
SUBJECT:
Approval of draft minutes - February 14, 2022 Regular Meeting.
RECOMMENDED ACTION
Staff recommends the City Council approve the draft minutes.
SUMMARY
DISCUSSION
ATTACHMENTS
1. Draft 2022-02-14 Meeting Minutes
Prepared by: Marie Weber
City Clerk
Approved by:
____________________________________
Marc Roberts
City Manager
Fiscal Review by:
____________________________________
Bhavna Chaudhary
City Treasurer/Finance Manager
12 FEBRUARY 14, 2022 Minutes CM/74/435
DRAFT MINUTES
CITY COUNCIL
FEBRUARY 14, 2022
________________________________________________________________
REGULAR MEETING
1. CLOSED SESSION
2. CALL TO ORDER – The Closed Session of the City Council was called to order by Mayor Bob Woerner at 7:00 pm, held via teleconference using Zoom and YouTube.
ROLL CALL – Present: Mayor Bob Woerner, Vice Mayor Regina Bonanno, and Council Members, Robert W. Carling, Brittni Kiick and Trish Munro.
PLEDGE OF ALLEGIANCE
Mayor Woerner reordered the agenda to hear Item 6.1 first.
6.1 7:05 P.M. - Third Public Hearing to receive an update on redistricting efforts to date, receive public input on the composition of City Council voting district draft maps prepared by the City's demographer, and provide direction to the City's demographer for revisions of the draft maps to be considered at the fourth public hearing
Recommendation: Staff recommended that the City Council:
1. Receive an update regarding the redistricting efforts to date;
2. Conduct the third public hearing to receive input on the composition of voting district draft maps; and
3. Provide direction to the City's demographer for revisions of the draft maps to be considered at the fourth public hearing.
City Clerk Marie Weber presented the staff report.
Mayor Woerner opened the public hearing.
Alan Burhnam provided comment.
Kyoko Takayama provided comment.
Alan Marling provided comment.
There were no more speakers and the hearing was closed. 13 CM/74/436 Minutes FEBRUARY 14, 2022
THE CITY COUNCIL PROVIDED DIRECTION TO REVISE 3 PLANS FOR CONSIDERATION AT THE 4 TH REDISTRICTING PUBLIC HEARING
SCHEDULED ON MARCH 14.
3. PROCLAMATIONS AND PRESENTATIONS
3.1 Confirmation of Advisory Body Appointments to the Beautification Committee, Human Services Commission, and Livermore Area Youth Advisory Commission.
Recommendation: The City Council Subcommittee on Advisory Bodies recommended the City Council confirm the advisory body appointments for the Beautification Committee, Human Services Commission, and the Livermore Area Youth Advisory Commission. The City Clerk was directed to schedule individual meetings with all new members to administer the oath of office.
Beautification Committee
Sucharitha Rallapalli to an unexpired term ending June 1, 2023.
Human Services Commission
Kathleen La Point-Collup to an unexpired term ending November 1, 2022 and one additional regular term ending November 1, 2026.
Ajay Arora to an unexpired term ending November 1, 2023.
Livermore Area Youth Advisory Commission (LAYAC)
Neha Sabharwal (Adult) to an unexpired term ending September 1, 2023.
ON THE MOTION OF CM CARLING, SECONDED BY MAYOR WOERNER AND CARRIED ON A 5-0 VOTE, THE CITY COUNCIL CONFIRMED THE
APPOINTMENTS AND DIRECTED THE CITY CLERK TO GIVE THE OATH OF OFFICE AT A FUTURE DATE.
4. CITIZENS FORUM
Mayor Woerner opened the public comment period.
Alan Marling provided a comment.
Jackie Cota provided a comment.
There were no more more speakers and the public comment period was closed.
5. CONSENT CALENDAR
Mayor Woerner opened the public comment period.
14 FEBRUARY 14, 2022 Minutes CM/74/437
There were no speakers and the public comment period was closed.
ON THE MOTION OF CM MUNRO, SECONDED BY VM BONANNO, AND
CARRIED ON A 5-0 VOTE, THE CITY COUNCIL APPROVED THE CONSENT CALENDAR.
5.1 Approval of draft minutes - January 18, 2022 Closed Session Special Meeting, January 20, 2022 City Council-Planning Commission Joint Meeting, January 24, 2022 Regular Meeting, February 7, 2022 Closed Session Special Meeting.
Recommendation: Staff recommended the City Council approve the draft minutes.
5.2 Resolution 2022-014 authorizing execution of an agreement with Jacobs Engineering Group Inc., for the Water Resources Division’s Supervisory Control and Data Acquisition (SCADA) Server Replacement Project in an amount not-to- exceed $267,012 and authorizing the City Manager to approve equipment procurement in an amount not-to-exceed $330,000
Recommendation: Staff recommended the City Council adopt a resolution:
1. Authorizing the execution of an agreement with Jacobs Engineering Group Inc. (Jacobs), in an amount not-to-exceed $267,012 for Professional Services for the Water Resources Division’s Supervisory Control and Data Acquisition (SCADA) Server Replacement Project, and
2. Authorizing the City Manager to approve all the equipment procurement for this project in an amount of not-to-exceed $330,000.
5.3 Resolution 2022-015 authorizing execution of an agreement with Kier & Wright to provide design, environment, and construction support in an amount not-to-exceed $392,289, for the Collier Canyon Creek Silt Basin, Project No. 201727, DR 4344-0132-040.
Recommendation: Staff recommended the City Council adopt a resolution authorizing the City Manager to execute an agreement with Kier & Wright in the not-to-exceed amount of $392,289 to provide design, environmental, and construction support services for the Collier Canyon Creek Silt Basin, Project No. 201727, DR 4344-0132-040.
5.4 Resolution 2022-016 of a continued local emergency and reauthorizing remote teleconference meetings for City of Livermore's legislative bodies in accordance with Assembly Bill 361
Recommendation: Staff recommended City Council adopt a resolution of a continued local emergency and reauthorizing remote teleconference meetings for City of Livermore's legislative bodies in accordance with Assembly Bill 361. 15 CM/74/438 Minutes FEBRUARY 14, 2022
6. PUBLIC HEARINGS
ITEM 6.1 - Mayor Woerner reordered the agenda to hear Item 6.1 first.
6.2 Hearing to introduce an ordinance amending and restating Chapters
13.26 and 13.27 of the Livermore Municipal Code pertaining to water conservation measures.
Recommendation: Staff recommended that the City Council introduce an ordinance amending and restating Chapters 13.26 and 13.27 of the Livermore Municipal Code pertaining to water conservation.
Management Analyst II Anthony Smith presented the staff report.
Mayor Woerner opened the public hearing.
There were no speakers and the hearing was closed.
ON THE MOTION OF CM CARLING, SECONDED BY CM MUNRO AND
CARRIED ON A 5-0 VOTE, THE CITY COUNCIL INTRODUCED THE
FOLLOWING ORDINANCE.
Ordinance introduced amending and restating Title 13, Chapter 13.26 Water Conservation, and Chapter 13.27 Mandatory Drought Conservation Measures to prohibit Wasteful Water Practices.
7. MATTERS FOR CONSIDERATION
7.1 Oral report from the Director of Emergency Services regarding the COVID-19 emergency, its impacts, and the governmental operations in response to that emergency, as well as discussion and direction regarding the City’s emergency operations in response to that emergency.
Recommendation: An oral report was given at the meeting.
Acting Director of Emergency Services Christine Martin presented the staff report.
Mayor Woerner opened the public comment period.
Jackie Cota provided comment.
Kyoko Takayama provided comment.
Alan Marling provided comment.
There were no more speakers and the public comment period was closed.
THE CITY COUNCIL RECEIVED THE REPORT AND DIRECTED STAFF TO 16 FEBRUARY 14, 2022 Minutes CM/74/439
ADD COVID-19 VACCINATION AND TESTING SITE INFORMATION TO THE NEXT CITY NEWSLETTER.
7.2 Final report on the Livermore Police Department traffic stop and arrest data project as part of the Equity and Inclusion Subcommittee Recommendation: Staff recommended the City Council receive the attached report from Rob Tillyer, Ph.D. and Michael R. Smith, J.D., Ph.D, both researchers and professors at the University of Texas at San Antonio – Department of Criminology & Criminal Justice regarding their research into patterns of racial and/or ethnic disparity during traffic stops and arrests conducted by the Livermore Police Department between January 1, 2019 and April 30, 2021.
Police Lieutenant John Reynolds presented the staff report.
Mayor Woerner opened the public comment period.
Jackie Cota provided comment.
Alan Marling provided comment.
Marilyn Dykstra provided comment.
There were no more speakers and the public comment period was closed.
THE CITY COUNCIL RECEIVED THE REPORT.
8. COUNCIL COMMITTEE REPORTS AND MATTERS INITIATED BY CITY
MANAGER, CITY ATTORNEY, STAFF AND COUNCIL MEMBERS
Tri-Valley Transportation Council Council Member Kiick noted her attendance at the Board Meeting on January 31, 2022.
Advisory Body Interviews Council Member Kiick noted her participation on the interview panel on February 2, 2022.
Livermore-Pleasanton Fire JPA Council Member Kiick noted her attendance at a meeting.
Livermore Amador Valley Transit Authority Council Member Kiick noted her attendance at the Board of Directors Meeting on February 2, 2022.
Tri-Valley-San Joaquin Valley Regional Rail Authority Council Member Kiick noted her attendance at the Board of Directors Meeting on January 12, 2022.
Equity and Inclusion Subcommittee Data Council Member Munro requested a meeting with Assistant City Manager Christine Martin to discuss how to put the data gathered in the final report provided by the police department and the information gathered by the Equity and Inclusion Subcommittee into practice. 17 CM/74/440 Minutes FEBRUARY 14, 2022
8. ADJOURNMENT – at 10:25 pm to a Special Closed Session Meeting on February 22, 2022 regarding the City Manager recruitment and the Regular City Council meeting on February 28, 2022, at 7:00 p.m., both held virtually using Zoom.
APPROVED:
BOB WOERNER, MAYOR
ATTEST:
MARIE WEBER, CITY CLERK
18 CITY COUNCIL STAFF REPORT
ITEM NO. 5.2
DATE:
February 28, 2022
TO:
Honorable Mayor and City Council
FROM:
Scott Lanphier, Public Works Director
SUBJECT:
Adoption of an ordinance
amending and restating Chapters 13.26 and 13.27 of the
Livermore Municipal Code pertaining to water conservation measures.
RECOMMENDED ACTION
Staff recommends that the City Council adopt an ordinance amending and restating Chapters 13.26 and
13.27 of the Livermore Municipal Code pertaining to water conservation.
SUMMARY
DISCUSSION
ATTACHMENTS
1. Ordinance
2. Exhibit A - Amended and Restated Chapters 13.26 Water Conservation and 13.27 Mandatory Drought Conservation Measures
Prepared by: Anthony Smith
Management Analyst II
Approved by:
____________________________________
Marc Roberts
City Manager
Fiscal Review by:
____________________________________
Bhavna Chaudhary
City Treasurer/Finance Manager
19 IN THE CITY COUNCIL OF THE CITY OF LIVERMORE, CALIFORNIA AN ORDINANCE AMENDING AND RESTATING TITLE 13, CHAPTER 13.26 WATER CONSERVATION, AND CHAPTER 13.27 MANDATORY DROUGHT
CONSERVATION MEASURES TO PROHIBIT WASTEFUL WATER PRACTICES On June 14, 2021, the Livermore City Council adopted a new Water Shortage Contingency Plan (“the Plan”) in line with the California Urban Water Management Planning Act, California Water Code section 10610, et seq. (“the Act”).
The recent update to the Plan necessitates an update to Chapters 13.26 and
13.27 of the Livermore Municipal Code to bring the voluntary and mandatory water use restrictions in line with the updated Plan.
On October 19, 2021, the Governor signed a Proclamation of State of Emergency proclaiming that a state of emergency exists in the State due to the current drought and extended the drought state of emergency statewide as a result of severe drought conditions.
To better support Tri-Valley-wide conservation targets, amendments to the City’s conservation ordinance mandating that water conservation practices are required uniformly throughout the City and not just in areas served by Livermore Municipal Water, will help curb excessive water use during droughts.
For customers of the California Water Service Company, water rates, conservation levels, and water system operations would remain within the purview of the California Water Service Company and the California Public Utilities Commission.
The City desires to amend Chapters 13.26 and 13.27 of the Code to include new limited-duration water use restrictions, realign shortage tiers, and simplify enforcement mechanisms.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LIVERMORE DOES ORDAIN AS FOLLOWS:
Section 1. Amendment. Chapters 13.26 Water Conservation and 13.27 Mandatory Drought Conservation Measures in the Livermore Municipal Code are hereby amended and restated as set forth in Exhibit A, attached hereto. In Exhibit A, the deletions are shown using a strikethrough, and the added language is shown with an underline, but the stricken language and underlines themselves shall not be codified in the Municipal Code, which publication shall only reflect the final language.
Section 2. Environmental. The passage of this ordinance is not a project pursuant to the California Environmental Quality Act (“CEQA”) and is exempt under CEQA Guidelines Section 15061(b)(3) (common sense exemption), in that CEQA only 20 applies to projects which have the potential for causing a significant effect on the environment and, therefore, is not subject to the provisions requiring environmental review. Additionally, actions by regulatory agencies as authorized by state law or ordinance to ensure maintenance, restoration, enhancement, or protection of the environment are exempt under CEQA Guidelines Section 15308 as projects which have been determined to not have a significant effect on the environment.
Section 3. Severability. If any part of this ordinance is declared invalid by a court, such invalidity shall not affect any of the remaining parts.
Section 4. Publication. This ordinance shall be published once in a newspaper of general circulation of the City of Livermore within fifteen days after its adoption.
Section 5. Effective date. This Ordinance shall take effect 30 days after its adoption.
The foregoing ordinance was introduced at the meeting of the City Council of the City of Livermore held on February 14, 2022, by the following vote:
AYES: COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
ABSTAIN: COUNCIL MEMBERS:
The ordinance was adopted at the regular meeting of the City Council held on February 28, 2022, by the following vote:
AYES: COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
ABSTAIN: COUNCIL MEMBERS:
Mayor, City of Livermore
ATTEST: APPROVED AS TO FORM:
/s/ Tara M. Mazzanti
Marie Weber Tara M. Mazzanti
City Clerk Assistant City Attorney
Exhibit A – Amended and Restated Chapters 13.26 Water Conservation and 13.27 Mandatory Drought Conservation Measures
21 Chapter 13.26
WATER CONSERVATION MEASURES FOR CITY CUSTOMERS
Sections:
13.26.010 Authority.
13.26.020 Findings – Purpose.
13.26.030 Definitions.
13.26.040 Application.
13.26.050 Water shortage contingency plan.
13.26.060 Water shortage contingency plan activation.
13.26.070 Voluntary conservation measures.Conservation measures – Stage 1 water shortage.
13.26.080 Conservation measures – Stage 1 water shortage.Water emergency.
13.26.090 Conservation measures – Stage 2 water shortage.Use allocations.
13.26.100 Conservation measures – Stage 3 water shortage.Conservation rates.
13.26.110 Conservation measures – Stage 4 water shortage.Exemptions.
13.26.120 Water emergency.Enforcement and penalties.
13.26.130 Use allocations.Additional penalties.
13.26.140 Demand management measures.
13.26.150 Conservation rates.
13.26.160 Exemptions.
13.26.170 Enforcement and penalties.
13.26.180 Additional penalties.
13.26.010 Authority.
In January 2008, the Governor of the state of California declared a drought and requested a voluntary 20 percent reduction in water use by all consumers in the state. Also, the Water Conservation Bill of 2009 was enacted in November 2009, requiring urban water suppliers to reduce water demands a minimum of 20 percent by 2020. California Water Code Section 10608.20 requires urban water suppliers such as the City of Livermore to reduce per capita water consumption by 20 percent by 2020, and to develop water use targets based on 80 percent of historic demands. One of the primary means of achieving the required reduction in water usage will be through the implementation of water conservation measures and demand management measures.
In addition to long-term use reduction goals, the provisions of this chapter will also be used to reduce water demands during water shortage events. California Water Code Section 10632(a) requires urban water
EXHIBIT A
22 suppliers to develop a water shortage contingency plan which indicates the actions the City will take in response to supply shortages in the Livermore municipal water system service area. California Water Code Section 10632(a)(5) allows water suppliers to use any type of consumption reduction methods in its water shortage contingency analysis that would reduce water use and, are appropriate for its area, and have the ability to achieve a water use reduction consistent with up to a 50 percent reduction in water supply.
13.26.020 Findings – Purpose.
The City Council finds that it is in the public interest of the City’s water customers, the City, and the sState to enact water conservation measures and to address the 20 percent reduction in per capita water use required by the Water Conservation Bill of 2009 and to establish voluntary and mandatory water conservation practices to address water supply shortages and required demand reductions.
The purpose of this chapter is to establish voluntary and mandatory water conservation measures, best management practices, and use penalties to encourage wise water use prevent wasteful water practices and to minimize the effect of shortages on the City’s customers. This is accomplished through provisions that will significantly reduce thewater consumption of water over an extended period of time, thereby extending the availability of water for the City’s customers while reducing the hardship to the greatest extent possible on or to the City and on or to the general public.
13.26.030 Definitions.
For the purposes of this chapter, the following definitions shall apply:
“Advisory notice” shall mean a written notice informing a Livermore municipal water customer that they are in violation of one or more provisions of this chapter and that additional violations may result in fines or termination of service.
“City” shall mean the City of Livermore, Alameda County, California. “City water service area” shall mean the City of Livermore municipal water service area, excluding which excludes the portions of the City of Livermore that are served by California Water Service Company (Cal Water).
“Commercial nursery” shall mean the use of land, buildings, or structures for the growing and/or storing of flowers, trees, edible crops, shrubs, and similar vegetation for the purpose of transplanting, stock, or grafting, and includes the retail sale or wholesale distribution of such items directly from the premises/lot.
EXHIBIT A
23 “Conservation measures” shall mean activities or procedures to be used by residential, and commercial, irrigation, and institutional water customers to reduce their potable water consumption. “Conservation water rates” shall mean a water rates adopted and enacted by the City Council to be used during water shortage events to both encourage conservation and to recover the appropriate amount of revenue to fund the City municipal water system operations from a reduced volume of water sold. Conservation rates are therefore higher than normal water rates charged during periods of adequate water supply. Conservation rates are broken down into several “tiers” or levels which correspond to different tiers, levels or stages of water supply reduction.
“Demand management measure” shall mean practices, procedures and methods to reduce water demands, including but not limited to behavior change, installing high-efficiency water fixtures, and financial incentives or penalties to encourage wise water use and discourage water waste. “Effective date” shall mean the date the ordinance adopting this chapter becomes effective. “Essential water use” shall mean water used strictly for firefighting, health and safety purposes, water needed to sustain human and animal life, and water necessary to satisfy federal, state, and/or local public health, safety, or environmental protection requirements.
“Hand-watering” shall mean the irrigation of landscaping or vegetation using a hand-held hose equipped with a positive shut-off nozzle to supply water directly to the area to be irrigated. “Hand-watering from container” shall mean the irrigation of landscaping or vegetation using a watering can, bucket or container to pour water directly on the area to be irrigated. “Impervious surface” shall mean a constructed or modified surface that cannot effectively infiltrate rainfall. Thise term includes, but is not limited to, sidewalks, driveways, gutters and roadways a surface composed in whole or in part of asphalt, concrete, compacted gravel, or other nonporous or semiporous substance or substances. “Nonessential water use” shall mean the application or usage of water for functions or additional activities which do not have any health or safety impacts, are not required by regulation, and are not part of the core function or business process at a site. This would include but not be limited to uses such as the watering of planters and landscape at a car wash, the washing of cars on display at a car dealer, and other activities that a reasonable person would conclude will reduce extra use of water, while not affecting a given enterprise in a fundamental way.
EXHIBIT A
24 “Positive shut-off nozzle” shall mean a device attached to the end of a hose that must be manually squeezed, pressed or otherwise held in place to allow water to flow out of the hose and which automatically shuts off the flow of water when continuous manual pressure is released. “Urban water management plan” shall mean a plan required by California Water Code Section 10621(a) for urban water suppliers to review available water supplies and water demands over a 20 year planning horizon to confirm the adequacy of water supplies.
“Water shortage contingency plan” shall mean a plan developed by the City pursuant to required by California Water Code Section 10632(a) which outlines the steps the City will take to reduce water demands in response to water supply shortages. The plan establishes different stages or levels of water supply shortage corresponding to the expected amount of water supply reduction. “Water shortage event” shall mean anything from a single occurrence as short as twenty-four hours to a multi- year weather condition. Droughts, earthquakes, water system failures, fire, contamination, regional power outages, state restrictions, and other causes can trigger the stages or levels of water supply shortage in the City’s water shortage contingency plan.
“Water waste” shall mean uses of potable water which are prohibited or limited, going beyond the purpose of necessary or intended use, including area runoff, and which could reasonably be prevented.
13.26.040 Application.
This chapter shall apply within the Livermore municipal City water system service area and to all users connected to the Livermore municipal water distribution system. The provisions in this chapter do not apply to essential water uses. Compliance with the provisions of this chapter shall be a condition of continued water service. However, users connected to the Livermore municipal water distribution system that have already implemented equivalent conservation measures or have achieved extremely low levels of per capita water consumption through other means, as determined by the Public Works Director or his/her designee, will not be required to implement additional conservation measures or to further reduce consumption during normal water supply conditions.
13.26.050 Water shortage contingency plan.
The Livermore City Council shall adopt a water shortage contingency plan for the operation of the Livermore mMunicipal wWater utility as required under California Water Code Section 10632(a). The water shortage contingency plan shall be adopted by Council resolution and shall be reviewed and updated periodically as
EXHIBIT A
25 needed, however no less than every five years in years ending in fivesix and zeroone as required by California Water Code Section 10621(a).
The water shortage contingency plan shall specify stages of action corresponding to different levels of water supply shortage and identify voluntary or mandatory water conservation measures to be used by Livermore municipal water customers and as articulated in LMC 13.26.0708 and in 13.27.040 through 13.26.11013.27.080. This chapter and chapter 13.27 provides the legal authority to implement the water conservation measures and best management practices included in the water shortage contingency plan.
13.26.060 Water shortage contingency plan activation.
The water shortage contingency plan will be activated by Livermore City Council resolution following the plan guidelines. Council resolutions to activate the water shortage contingency plan shall establish the stage of action necessary to address the supply shortage as well as estimate the expected duration of the water shortage. When activating the water shortage contingency plan, Council may also enact conservation rates as specified in LMC 13.26.10013.26.150.
13.26.070 Voluntary conservation measures.
Water customers are requested to voluntarily limit the amount of water used to the amount absolutely necessary for health, business, and irrigation, by undertaking the following water conservation measures:
A. Lawn watering and landscape irrigation, including construction meter irrigation, is permitted only between the hours of 6:00 p.m. Pacific Daylight Time (PDT), or 5:00 p.m. Pacific Standard Time (PST), and 9:00 a.m. the following day. Watering is permitted at any hour if a hand-held nozzle is used, a hand-held container is used, or a drip irrigation system is used.
B. Washing of autos, trucks, trailers, boats, airplanes, and other types of mobile equipment may be done at any hour with a bucket and a hose equipped with a positive shut-off nozzle for quick rinses. Washing is permitted at a commercial car wash, or by a mobile car wash or on-site car wash using high-pressure washing equipment.
No wastewater from vehicle washing may enter the storm drain system.
C. The overfilling of swimming pools, spas, ponds, and artificial lakes is prohibited.
D. Irrigation of golf courses, parks, school grounds and recreation fields is permitted only between the hours of 6:00 p.m. PDT (5:00 p.m. PST) and 8:00 a.m. the following day. Tees and greens may be watered at any time.
EXHIBIT A
26 E. The use of water from fire hydrants shall be limited to fire fighting and related activities, approved metered uses or other activities necessary to maintain the health, safety and welfare of the public.
F. Construction operations receiving water from a construction meter or water truck shall not use water unnecessarily for any purposes other than those required by regulatory agencies. The City has the right to inspect all construction sites using water from a city construction meter for the efficient use of water.
G. Restaurants shall not serve water to their customers except when specifically requested.
13.26.070080 Conservation measures – Stage 1 water shortage.
The following voluntary restrictions shall be applicable during a Stage 1 activation of the water shortage contingency plan:
A. Sprinkler irrigation, including construction meter irrigation, is permitted only after 6:00 p.m. and before 9:00 a.m. Watering is permitted at any hour if a hose with a positive shut-off nozzle, a hand-held container, or a drip irrigation system is used.
B. Washing motor vehicles by hand is permitted only with the use of a hose fitted with a positive shut-off nozzle.
A. All of the prohibitions and restrictions set forth in LMC 13.26.070 shall be in effect.
B. Swimming pools, spas and fountains must be leak-proof. Any leak shall be repaired in a timely manner after notification by the City, but in no case after notification in excess of 72 hours for the first violation and then every 72 hours thereafter for the second and third violations.
C. There shall be no hose washing of sidewalks, walkways, driveways, parking areas, patios, porches or verandas, except that flammable or similarly dangerous materials may be washed from such areas by direct hose flushing for the benefit of public health and safety. A bucket and broom may be used to wash paved surfaces if necessary.
D. No potable water may be used for compacting or dust control purposes in construction activities where there is a reasonably available source of recycled or other nonpotable water approved by the California Department of Public Health and appropriate for such use. This condition must be identified and specified on construction drawings submitted to the City for review.
EXHIBIT A
27 E. No person shall cause or allow water to run off or leak from landscaped areas to adjoining streets, sidewalks, or other paved areas due to incorrectly directed or maintained sprinklers or excessive watering.
13.26.090 Conservation measures – Stage 2 water shortage.
The following mandatory restrictions shall be applicable during a Stage 2 activation of the water shortage contingency plan:
A. All of the prohibitions and restrictions set forth in LMC 13.26.070 and 13.26.080 shall be in effect and shall be mandatory prohibitions.
B. Lawn watering and landscape irrigation, including construction meter irrigation, shall be reduced to no more often than three times per week on an odd-even schedule; properties with odd street address numbers are only allowed to water on Mondays, Wednesdays, and Fridays, and properties with even street address numbers are only allowed to water on Tuesdays, Thursdays, and Saturdays, with no watering permitted on Sundays. On each day that lawn watering and landscape irrigation is permitted to occur, it may take place only after 6:00 p.m. and during the subsequent 15 hours, until 9:00 a.m. the next day.
C. Swimming pools and spas shall be covered when not in use.
D. Washing of autos, trucks, trailers, boats, airplanes, and other types of mobile equipment may be done at any hour, but no more frequently than once per month with a bucket and a hose equipped with a positive shut-off nozzle for quick rinses. Washing is permitted at a commercial car wash, or by a mobile car wash or on-site car wash using high-pressure washing equipment. No wastewater from vehicle washing may enter the storm drain system.
E. Restaurant kitchens shall be equipped with low-flow rinse nozzles.
13.26.100 Conservation measures – Stage 3 water shortage.
The following mandatory restrictions shall be applicable during a Stage 3 activation of the water shortage contingency plan:
A. All of the prohibitions and restrictions set forth in LMC 13.26.070, 13.26.080 and 13.26.090 shall be in effect and shall be mandatory prohibitions.
B. All water customers other than commercial nurseries, golf courses, and other water dependent industries shall be limited in the use of outdoor watering for any shrubbery, trees, lawns, grass, ground covers, plants,
EXHIBIT A
28 vines, gardens, vegetables, flowers, or any other landscaped or vegetated areas to hand-watering using a hose with a positive shut-off nozzle on Saturday and Sunday only.
C. No person shall empty and refill a swimming pool except to prevent or repair structural damage or to comply with public health regulations.
D. Potable water shall not be used for street washing or flushing, except to meet public health and safety requirements.
E. Washing of autos, trucks, trailers, boats, airplanes, and other types of mobile equipment is permitted only at commercial car wash facilities that recycle all or part of the water.
F. No potable water may be used for compaction or dust control purposes for construction activities.
13.26.110 Conservation measures – Stage 4 water shortage.
The following mandatory restrictions shall be applicable during a Stage 4 activation of the water shortage contingency plan:
A. All of the prohibitions and restrictions set forth in LMC 13.26.070, 13.26.080, 13.26.090 and 13.26.100 shall be in effect and shall be mandatory prohibitions.
B. The irrigation of turf or lawn using potable water is prohibited. All water customers other than commercial nurseries, golf courses, and other water dependent industries shall be limited in the use of outdoor watering for any shrubbery, trees, plants, vines, gardens, vegetables, flowers, or any other non-turf landscaped or vegetated areas to hand-watering from a container of less than five-gallon capacity on Saturday and Sunday only.
C. Cleaning of Structures. No person shall use water through a hose, including pressure-washing, to clean the exterior of any building or structure.
D. Fountains, Decorative Basins, Ponds, Lakes, Waterways. No person shall use water to operate or maintain levels in decorative fountains, basins, ponds, lakes, and waterways.
E. Public Health and Safety. These regulations shall not be construed to limit water use which is immediately necessary to protect public health and/or safety.
13.26.080120 Water emergency.
EXHIBIT A
29 In the event thatWhen a water emergency is declared pursuant to the City’s water shortage contingency plan, the City Manager or his/hertheir designee may implement additional, mandatory conservation measures, restrictions, or best management practices as may be necessary to reduce water demands to match the available supply or to extend the length of time that current supplies will last.
13.26.090130 Use allocations.
A. During water shortage eventsperiods of mandatory water conservation measures, the Public Works Director or his/hertheir designee shall establish water use allocations for different customer classes. Water use allocations shall be based on a combination of average historical usage, per-capita water use targets, and/or other activity-specific water usage data. Water use allocations will be calculated to achieve a reduction in demand necessary to match the amount of supply available or to maximize the length of time that existing supplies will last. The Public Works Director or his/hertheir designee shall, to the extent possible, establish use allocations at levels that achieve the required demand reduction while minimizing the impacts to users. that have already implemented conservation measures or have by other means achieved extremely low per capita water consumption.
B. In the event thatWhen use allocations are established, all customers shall reduce their consumption to meet the allocation within 30 days of notice by the City.
13.26.140 Demand management measures.
The City shall comply with the demand management measures for urban water conservation provided by the Urban Water Management Planning Act, California Water Code Section 10610 et seq., as that Act exists and as it may be amended.
13.26.100150 Conservation rates.
A. The Livermore City Council shall establish water rates and charges pursuant to LMC 13.20.030 to provide funding for the operation, maintenance and renewal and replacement needs of the cCity municipal water system. In addition to normal water rates and charges, the Livermore City Council shall also adopt water conservation rates to be used in the event of declared water shortages and implementation of the water shortage contingency plan described in LMC 13.26.050. Conservation water rates shall be calculated to recover the necessary revenue to continue to fund budgeted water system expenditures based on anthe expected reduction in water use at each stage of the water shortage contingency plan.
B. Conservation water rates will be implemented by Council resolution at the time of a declared water shortage event and will remain in effect until a subsequent Council resolution returning to normal water rates.
EXHIBIT A
30 C. Conservation water rates may also be implemented by Council resolution to address shortfalls in water system revenues caused by reduced water sales, or as a method to encourage water conservation in the absence of a declared shortage event.
13.26.110160 Exemptions.
A. Any customer in the City water service area who believes that the application of the provisions of this chapter results in unfair treatment or causes undue hardship or the customer’s circumstance applies to any of the circumstances contained in 13.26.110(C) may seek an adjustment in the customer’s use allocation.
B. Such customer in the City water service area shall request the adjustment in writing and shall state with specificity the reasons why the adjustment is warranted.
C. The Public Works Director and the Administrative Services Director shall consider all requests for exemptions and make a recommendation on the request to the City Manager. In formulating a recommendationdeciding, the Public Works Director and Administrative Services Director shall review particular consideration to consider the following:
1. If Tthe reduction in water use would cause conditions threatening to threaten health, sanitation, fire protection, or the safety of the customer, the customer’s dependents or the general public.
2. If theThe reduction would cause unfair economic hardship including, but not limited to, loss of employment, loss of production, or loss of jobs. or be unfair or result in the unnecessary loss of a business.
3. Medical requirements of the customer.
4. Household size of the customer.
5. Other reasons to be judged on individual merit.
13.26.120170 Enforcement and penalties.
A. Any violation of this chapter is a misdemeanor. Upon conviction thereof, such person shall be punished by imprisonment in the county jail for not more than 30 days, or by fine not exceeding $1,000, or both. In addition to any other remedies which the City may have for the enforcement of this chapter, service of water shall be discontinued or appropriately limited to any customer who willfully uses water in violation of any provision of this chapter.
EXHIBIT A
31 B. If a customer exceeds the allotted usage developed under LMC 13.26.09013.26.130 for three consecutive billing periods, the City may increase the billing rate for all water used by that customer to the highest tier conservation rate for a period of three months. At the end of three months, if the customer’s use still exceeds the allotted amount, the City may continue to charge the customer at the highest conservation rate for an additional three months or until the customer’s usage drops to below the allocation.
13.26.130180 Additional penalties.
In addition to the penalties provided by LMC 13.26.12013.26.170, violation of this chapter may result in the imposition of surcharges and/or termination of water service as set forth below:
A. First Violation. Advisory notice accompanied by a copy of this chapter and a cCity conservation information packet delivered to customer by United States mail.
B. Second Violation (within Oone Yyear of the first violation). One- hundred- dollar surcharge.
C. Third Violation (within Oone Yyear of the Ffirst Vviolation). Three- hundred- dollar surcharge.
D. Fourth Violation (within Oone Yyear of the Ffirst Vviolation). Five- hundred- dollar surcharge and termination of water service for such period as the City Council Manager determines to be appropriate under the circumstances, following a hearing regarding said issue. Written notice of the hearing shall be mailed to the customer at least 10 days before the hearing.
E. Any surcharge hereunder shall be in addition to the basic or conservation water rates and other charges of the City for the account. Receipt of payment must be made to the City’s finance directorCity within five business days of the violation. If payment is not received within five business days, the water meter will be locked off and service disconnected until payment is received. In addition to any surcharge, a customer violating this chapterhapter shall be responsible for payment of the City’s charges for disconnecting and/or reconnecting service per the City’s rate resolution then in effect. Nonpayment shall be subject to the same remedies as nonpayment of basic water rates.
F. The Public Works Director shall designate specified employees to act as enforcement officers, who shall have the authority to enforce the provisions of this chapter and to issue administrative citations for violations of this chapter pursuant to Chapter 1.20 LMC.
EXHIBIT A
32 G. In addition to the above, the City Manager or his or her designee is empowered to enact other penalties and restrictive measures including but not limited to the placement of a flow restricting device upon the water service, locking off of a water meter, removal of a water meter, and/or shutting off of a mainline.
EXHIBIT A
33 Chapter 13.27
MANDATORY DROUGHT CONSERVATION MEASURES
Sections:
13.27.010 Purpose.
13.27.020 Application.
13.27.025 Definitions.
13.27.030 General prohibition.
13.27.040 Prohibited wasteful water practices – Stage 2 water shortage.
13.27.050 Prohibited wasteful water practices – Stage 3 water shortage.
13.27.060 Prohibited wasteful water practices – Stage 4 water shortage.
13.27.070 Hardship waiver.Prohibited wasteful water practices – Stage 5 water shortage.
13.27.080 Penalties.Prohibited wasteful water practices – Stage 6 water shortage.
13.27.090 Hardship waiver.
13.27.100 Penalties.
13.27.010 Purpose.
The purpose of this chapter is to establish mandatory drought conservation measures to prohibit wasting potable water during periods of severe water shortage. This is accomplished through provisions intended to reduce the wasting of potable water over an extended period of time, thereby extending the availability of potable water supply for residents and businesses throughout Livermore. Within areas of the City where water service is provided by any other water provider, the provisions of this chapter as to the prohibited uses and waste shall be applicable.
13.27.020 Application.
A. To the extent authorized by law, this chapter shall apply to all water users in the City including water users outside the City water service area. For the purposes of this chapter, a “water user” means any person drawing water delivered to a business or residence in the City via a water system operated by a water retailer, as well as the individual in whose name the account with the water retailer is held.
B. For water users that are also customers of the City of Livermore’s municipal water system, the provisions in this chapter are in addition to the conservation measures set forth in LMC Chapter 13.26. LMC, and the The requirements provisions in this chapter shall control in the event there is a conflict between the regulations.
EXHIBIT A
34 C. The provisions requirements in this chapter do not apply to water uses necessary to protect public health, safety, and welfare, for essential health care, or for government services such as police, fire, and other similar emergency services.
13.27.025 Definitions
The definitions contained in LMC 13.26.030 shall also apply to this chapter.
13.27.030 General prohibition.
No water user shall make, cause, use, or permit the use of potable water in the City in a manner contrary to any provision of this chapter. Each water user violating the requirements provisions in this chapter shall be guilty of a separate offense for each day during which such violation occurred, continued, or was permitted.
13.27.040 Prohibited wasteful water practices – Stage 2 water shortage.
If the City adopts a resolution for a Stage 2 activation of its water shortage contingency plan for customers in the Livermore municipal water system area in accordance with LMC 13.26.090, the wasting of potable water throughout the City shall be prohibited for all water users, and the following restrictions shall apply to all water users:
A. Lawn watering and lLandscape irrigation, including construction meter irrigation, shall be reduced to no more often than three times per week on an odd-even schedule; properties with odd street address numbers are only allowed to water on Mondays, Wednesdays, and Fridays, and properties with even street address numbers are only allowed to water on Tuesdays, Thursdays, and Saturdays, with no watering permitted on Sundays for all addresses. On each day that lawn watering and landscape irrigation is permitted to occur, it may take place only after 6:00 p.m. and during the subsequent 15 hours, until 9:00 a.m. the next day.
B. Washing motor vehicles by hand is permitted only with the use of a hose fitted with a positive shut-off nozzle.
B. Irrigation of golf courses, parks, school grounds, and recreation fields with potable water is permitted only between the hours of 6:00 p.m. and 8:00 a.m. the following day. Tees and greens may be watered at any time.
C. No person shall cause or allow water to run off or leak from landscaped areas to adjoining streets, sidewalks, or other paved areas due to incorrectly directed or maintained sprinklers or excessive watering.
EXHIBIT A
35 D. Washing of autos, trucks, trailers, boats, airplanes, and other types of mobile equipment may be done at any hour, but no more frequently than once per month with a bucket and a hose equipped with a positive shut-off nozzle for quick rinses. Washing is permitted at a commercial car wash, or by a mobile car wash or on-site car wash using high-pressure washing equipment. No wastewater from vehicle washing may enter the storm drain system.
E. There shall be no hose washing of sidewalks, walkways, driveways, parking areas, patios, porches, or verandas, except that flammable or similarly dangerous materials may be washed from such areas by direct hose flushing for the benefit of public health and safety. A bucket and broom may be used to wash paved surfaces if necessary.
F. The overfilling of swimming pools, spas, ponds, and artificial lakes is prohibited.
G. Swimming pools and spas shall be covered when not in use.
H. Swimming pools, spas, and fountains must be leak-proof. Any leak shall be repaired in a timely manner after notification by the City, but in no case after notification in excess of 72 hours for the first violation and then every 72 hours thereafter for the second and third violations.
I. No potable water may be used for compacting or dust control purposes in construction activities where there is a reasonably available source of recycled or other nonpotable water approved by the California Department of Public Health and appropriate for such use. This condition must be identified and specified on construction drawings submitted to the City for review.
J. Restaurant kitchens shall be equipped with low-flow rinse nozzles.
K. Restaurants shall not serve water to their customers unless specifically requested.
13.27.050 Prohibited wasteful water practices – Stage 3 water shortage.
If the City adopts a resolution for a Stage 3 activation of its water shortage contingency plan for customers in the Livermore municipal water system area in accordance with LMC 13.26.100, the wasting of potable water throughout the City shall be prohibited for all water users, and all the restrictions for a Stage 2 activation included in LMC 13.27.040 shall apply to all water users with the following modifications or additions:
A. All swimming pools and spas shall be covered when not in use.
B. No potable water shall be used for compaction or dust control purposes for construction activities.
EXHIBIT A
36 A. All residents and businesses other than commercial nurseries, golf courses, and other water dependent industries shall be limited in the use of outdoor watering using potable water for any shrubbery, trees, lawns, grass, groundcovers, plants, vines, gardens, vegetables, flowers, or any other landscaped or vegetated areas to hand-watering using a hose with a positive shut-off nozzle on Saturday and Sunday only.
B. No person shall empty and refill a swimming pool except to prevent or repair structural damage or to comply with public health regulations.
C. Potable water shall not be used for street washing or flushing, except to meet public health and safety requirements.
D. Washing of autos, trucks, trailers, boats, airplanes, and other types of mobile equipment is permitted only at commercial car wash facilities that recycle all or part of the water.
E. No potable water may be used for compaction or dust control purposes for construction activities.
13.27.060 Prohibited wasteful water practices – Stage 4 water shortage.
If the City adopts a resolution for a Stage 4 activation of its water shortage contingency plan for customers in the Livermore municipal water system area in accordance with LMC 13.26.110, the wasting of potable water throughout the City shall be prohibited for all water users, and all the restrictions for a Stage 2 activation included in LMC 13.27.040 and a Stage 3 activation included in LMC 13.27.050 shall apply to all water users with the following modifications or additions:
A. The irrigation of turf or lawn using potable water is prohibited. All water customersusers other than excluding commercial nurseries, golf courses, and other water- dependent industries, shall be limited in the use of outdoor watering for any shrubbery, trees, plants, vines, gardens, vegetables, flowers, or any other non-turf landscaped or vegetated areas to hand-watering from a container of less than five-gallon capacity on Saturdays and Sundays only.
B. Potable water shall not be used for street washing or flushing, except to meet public health and safety requirements.
C. Washing of autos, trucks, trailers, boats, airplanes, and other types of mobile equipment is permitted only at commercial car wash facilities that use recycled or recirculating water.
D. Food service kitchens must be equipped with low-flow rinse nozzles.
EXHIBIT A
37 E. Swimming pools, spas, and fountains must be leak-proof. Any leak shall be repaired within 72 hours of notification by City.
F. Potable water shall not be used to wash off impervious surfaces unless required for public health and safety.
G. Irrigation water shall not be allowed to run off such that water flows to adjacent properties, non-irrigated areas, or impervious surfaces.
B. Cleaning of Structures. No person shall use water through a hose, including pressure-washing, to clean the exterior of any building or structure.
C. Fountains, Decorative Basins, Ponds, Lakes, Waterways. No person shall use water to operate or maintain levels in decorative fountains, basins, ponds, lakes, and waterways.
13.27.070 Prohibited wasteful water practices – Stage 5 water shortage.
If the City adopts a resolution for a Stage 5 activation of its water shortage contingency plan for customers in the Livermore municipal water system area, the wasting of potable water throughout the City shall be prohibited for all water users, and all the restrictions for a Stage 2 activation included in LMC 13.27.040, a Stage 3 activation included in LMC 13.27.050, and a Stage 4 activation included in LMC 13.27.060 shall apply to all water users with the following modifications or additions:
A. The irrigation of turf/lawn using potable water is prohibited.
B. All water users, excluding commercial nurseries, shall be limited to hand-watering non-turf landscaped areas with a container of less than five-gallon capacity on Saturdays and Sundays only.
C. Potable water shall not be used to operate or maintain water levels in decorative fountains, basins, ponds, lakes, or waterways.
D. Food service establishments shall only serve water to customers upon request.
13.27.080 Prohibited wasteful water practices – Stage 6 water shortage.
If the City adopts a resolution for a Stage 6 activation of its water shortage contingency plan for customers in the Livermore municipal water system area in accordance with LMC 13.26.110, the wasting of potable water throughout the City shall be prohibited for all water users, and all the restrictions for a Stage 2 activation
EXHIBIT A
38 included in LMC 13.27.040, a Stage 3 activation included in LMC 13.27.050, a Stage 4 activation included in LMC 13.27.060, and a Stage 5 activation included in LMC 13.27.070 shall continue to apply to all water users.
13.27.090070 Hardship waiver.
If, due to unique circumstances, the application of a specific provision in this chapter would result in undue hardship to a water user, or to property upon which water is used, that is disproportionate to the impacts to water users generally or to similar property or classes of water users, then the person may apply for a waiver to the requirements as provided in this section.
A. Written Finding. A hardship waiver may be granted or conditionally granted only upon a written finding of fact demonstrating an undue hardship to the water user or to property upon which water is used, that is disproportionate to the impacts to water users generally or to similar property or classes of water use due to specific and unique circumstances of the user or the user’s property.
1. Application. Application for a waiver must be on a form prescribed by the City and accompanied by a nonrefundable processing fee in an amount set by City Council resolution.
2. Supporting Documentation. The application should include photographs, maps, drawings, and other information, including a written statement of the applicant.
3. Required Findings for Waiver. An application for a waiver will be denied unless the City finds, based on the information provided in the application, supporting documents, or such additional information as may be requested, and on water use information for the property as shown by water use records, all of the following:
a. That a waiver does not constitute a grant of special privilege inconsistent with the limitations upon other water users;
b. That because of special circumstances applicable to the property or its use, the strict application of this chapter would have a disproportionate impact on the property or use that exceeds the impacts to residents and businesses generally; and
c. That the authorizing of such waiver will not be of substantial detriment to adjacent properties, and will not materially affect the ability of the City to effectuate the purpose of this chapter and will not be detrimental to the public interest.
EXHIBIT A
39 4. Approval Authority. The Public Works Director must act upon any completed application no later than 14 days after submittal and may approve, conditionally approve, or deny the waiver. The applicant requesting the waiver must be promptly notified in writing of any action taken. Unless specified otherwise at the time a waiver is approved, the waiver will apply to the subject property during the period of the mandatory water supply shortage condition.
13.27.080100 Penalties.
Any person violating or causing the violation of any of the provisions of this chapter shall be guilty of an infraction, unless otherwise specifically stated. Penalties for infractions shall be as set forth in Government Code Section 36900.
Notwithstanding the above, any violation occurring after a third infraction citation has been issued during any 12-month period shall be considered a misdemeanor. Penalties for misdemeanors shall be as set forth in Penal Code Section 19.
Nothing in this chapter shall be deemed to prevent the City Council from ordering the commencement of a civil proceeding to abate a public nuisance pursuant to the applicable law or from pursuing any other remedy available under applicable law.
A. Violations of this chapter may result in the issuance of an administrative citation with maximum fines pursuant to LMC Chapter 1.20.
B. Nothing in this chapter shall be deemed to prevent the City from ordering the commencement of a civil proceeding to abate a public nuisance pursuant to the applicable law or from pursuing any other remedy available under applicable law and pursuant to Title 1 of the LMC.
C. The Community Development Director shall designate specified employees to act as enforcement officers, who shall have the authority to enforce the provisions of this chapter and to issue administrative citations for violations of this chapter pursuant to LMC Chapter 1.20.
EXHIBIT A
40 CITY COUNCIL STAFF REPORT
ITEM NO. 5.3
DATE:
February 28, 2022
TO:
Honorable Mayor and City Council
FROM:
Marie Weber, Acting Administrative Services Director
SUBJECT:
Resolution authorizing an agreement with Kaizen InfoSource, LLC for records management consulting in an amount not-to-exceed $160,000.
RECOMMENDED ACTION
Staff recommends City Council adopt a resolution authorizing an agreement with Kaizen InfoSource, LLC for records management consulting in an amount not-to-exceed $160,000.
SUMMARY
In October 2020, the City contracted with Kaizen InfoSource, LLC (Kaizen) to assist in creating and facilitating a comprehensive Records Management Program. The first agreement with Kaizen was to develop a Records Retention Schedule. The scope of this agreement builds on the Records Retention Schedule to complete the Records Management Program including division File Plans to help ensure proper electronic records retention in Laserfiche and on network drives, relocating paper files from the Records Center in the Police Department to a records storage facility, assisting the Police Department with evaluating and moving paper files, a Records Review day, and staff training.
DISCUSSION
In October 2020, the City hired Kaizen InfoSource, LLC (Kaizen) to assist in creating and implementing a comprehensive Records Management Program. That contract included the creation of a new citywide Records Retention Schedule, facilitating the transfer of paper records currently located in the Records Center at the Police Department to Corodata, an offsite records storage facility, participating in two Records Review Days with staff, and staff training on records.
The Police Department is in need of the space currently occupied by the City Records Center. To make the space available, the City contracted with Corodata, an offsite secure records storage facility. Kaizen has reviewed, indexed, and prepared all non-Police Department boxes in the Records Center for transport to Corodata.
In August 2021, the agreement scope was amended to include the development of File Plans for a pilot 41 group of departments to store final electronic records in Laserfiche, the City's records repository. The File Plans include a folder system that is structured like the retention schedule to help ensure the City is maintaining records for the legally requirement amount of time and make the process of records management easier for staff. The Files Plans will also be used to set up a folder system for department/division network drives so all City records are managed efficiently and consistently.
This proposed agreement will complete the remaining 15 division File Plans, which will be configured by Complete Paperless Solutions, the City's Laserfiche vendor, as well as supporting the City Clerk's Office in implementing Laserfiche as a Trusted System. The agreement also includes preparing records management templates based on the Records Retention Schedule, another Records Review Day, and additional staff training on the new Records Management Program.
In addition to the citywide Records Management Program, this agreement also includes $50,000 to assist the Police Department with the review of current paper files and will provide guidance and assistance with applying retention requirements to the paper records.
FISCAL AND ADMINISTRATIVE IMPACTS
The agreement is in the not-to-exceed amount of $160,000. This includes $110,000 for finalizing the citywide Records Management Program, and $50,000 for assisting the Police Department with review of current paper files. These funds are included in the City Clerk's Division budget under the General Fund for Fiscal Years 2021-22, and 2022-23. The funding for work at the Police Department is also available in the General Fund in the current year's budget. Therefore, no additional appropriation is necessary.
ATTACHMENTS
1. Resolution
2. Exhibit A - Kaizen InfoSource, LLC Agreement
Prepared by: Debbie Elam
Deputy City Clerk
Approved by:
____________________________________
Marc Roberts
City Manager
Fiscal Review by:
____________________________________
Bhavna Chaudhary
City Treasurer/Finance Manager
42 RESOLUTION NO. ________
IN THE CITY COUNCIL OF THE CITY OF LIVERMORE, CALIFORNIA
A RESOLUTION AUTHORIZING THE EXECUTION OF AN
AGREEMENT WITH KAIZEN INFOSOURCE, LLC FOR RECORDS
MANAGEMENT CONSULTING SERVICES IN AN AMOUNT
NOT-TO-EXCEED $160,000
The City of Livermore requires a Records Management Program to ensure safekeeping and proper retention of records including City Council and advisory body legislative meeting records, agreements, and various division records.
In October 2020, the City contracted with Kaizen InfoSource, LLC for work to help create and facilitate a comprehensive Records Management Program. That contract included the creation of a new citywide Records Retention Schedule, facilitating the transfer of paper records to an offsite storage facility, and staff training on records.
In August 2021, the contract’s scope of work was amended to include the development of File Plans for a pilot group of departments to store final electronic records in Laserfiche, the City's records repository. The File Plans include a folder system set up by records retention to help ensure the City is maintaining records for the legally required amount of time. The File Plans will also be used to set up a folder system for department/division network drives for current work in progress.
The proposed agreement with Kaizen is for work to complete the remaining 15 division File Plans that were not part of the pilot group, support the City Clerk's Office in implementing Laserfiche as a Trusted System, prepare a box destruction list based on the Records Retention Schedule, and additional staff training on the new Records Management Program.
The agreement also work to assist the Police Department review current paper files and provide guidance and assistance with applying retention requirements for paper records
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Livermore that the City Manager is authorized to execute an agreement with Kaizen InfoSource, LLC, attached hereto as Exhibit A, in an amount not-to-exceed $160,000, for records management consulting services.
43 RESOLUTION NO. ________
On motion of Council Member ______________________, seconded by Council Member ______________________, the foregoing resolution was passed and adopted on February 28, 2022, by the following vote:
AYES: COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
ABSTAIN: COUNCIL MEMBERS:
ATTEST: APPROVED AS TO FORM:
_____________________________ /s/ Jason R. Alcala
Marie Weber Jason R. Alcala
City Clerk City Attorney
Exhibit A – Kaizen InfoSource, LLC Agreement
44 Professional Services Agreement Page 1
Rev. 09.2021
PROFESSIONAL SERVICES AGREEMENT
THIS AGREEMENT is made and entered into this day of , 20 , by and between the City of Livermore (“City”), a municipal corporation, and Kaizen InfoSource, LLC (“Consultant”), a California Limited Liability Company.
RECITALS
City requires professional services to provide records management consulting.
Consultant warrants it possesses the distinct professional skills, qualifications, experience, and resources necessary to timely perform the services described in this Agreement. Consultant acknowledges City has relied upon these warranties to retain Consultant.
AGREEMENT
NOW, THEREFORE, City and Consultant hereby agree that the aforementioned recitals are true and correct and further agree as follows:
1. Retention as Consultant. City hereby retains Consultant, and Consultant hereby accepts such engagement, to perform the services described in Section 3 below subject to the terms and conditions in this Agreement.
2. Relationship of Parties – Independent Contractors. The relationship of the parties shall be that of independent contractors. Consultant and its employees are not City office rs or employees. Consultant is responsible for the supervision and management of its employees, including any workers compensation i nsurance, withholding taxes, unemployment insurance, and any other employer obligations associated with the delivery of the services contemplated by this Agreement.
3. Description of Services. Consultant shall provide the following professional services as more particularly set forth in Exhibit "A" (collectively “the Services”):
Development of an approved Trusted System – Laserfiche, including division file plans, training, records review. In addition, to provide support to the Police Department f or application of retention requirements.
4. Consultant’s Responsibilities. Consultant shall:
(a) Diligently perform the Services in a manner commensurate with industry, professional, and community standards;
(b) Provide the resources necessary to complete the S ervices in a timely manner;
(c) Obtain a business license from the City of Livermore, and keep it in effect for the term of this Agreement;
2022-039 JRA/JKS
EXHIBIT A
45 Professional Services Agreement Page 2
Rev. 09.2021
(d) Obtain and keep in effect all necessary licenses , permits, qualifications, insurance, and approvals legally and professionally required for Consultant to practice its profession and to provide the Services;
(e) Comply with all laws in effect that are related to Consultant and the Services;
(f) Coordinate the Services with Debbie Elam (“Project Manager”), or such other person designated as the Project Manager by City;
(g) Be available to the Project Manager, and other parties referred to Consultant by the Project Manager, to answer questions or inquiries related to the Services;
(h) Only invoice City for the Services rendered. Consultant’s invoice shall be in writing and describe the Services performed for the payment requested. Consultant shall not submit an invoice to City more frequently than once a calendar month;
(i) Keep and maintain invoices and records related to the Services in an organized manner. At a minimum, the records must be kept for at least 3 years from the date of final payment to Consultant and must include time sheets, work progress reports, and other documentation to adequately explain all the Services invoiced for payment.
Consultant shall make the i nvoices and records immediately available to City upon delivery of a written request to examine, audit, or copy them at City’s place of business during normal business hours. Consultant shall give City 30 calendar-days’ written notice prior to destroy ing the invoices and records and allow City an opportunity to take possession. If City wants them, Consultant and City shall coordinate their delivery to City in the most efficient manner possible;
(j) P repare and submit a written report to the Project Manager, within 3 business-days of the Project Manager’s written request, that identifies the Services completed and in progress, the charges incurred to date, and the anticipated cost to complete the remaining Services;
(k) Consultant shall correct, at its own expense, all errors in the S ervices.
Should Consultant fail to make such correction in a timely manner, City may make the correction and charge the cost thereof to Consultant;
(l) If applicable, Consultant shall ensure that all work for compensation is provided in compliance with the requirements of the California Labor Code including but not limited to hours of labor, nondiscrimination, payroll records, apprentices, worker’ s compensation and prevailing wages. If applicable, Consultant shall comply with all prevailing wage laws, such as sections 1773, 1773.8, 1775, 1776, 1777.5, 1777.6, and 1813 of the California Labor Code and any other applicable wage and hour law. If any violation of prevailing wage law associated with this Agreement is deemed to have occurred by any court or administrative authority, Consultant shall forfeit to the City, as a penalty, the sum of fifty dollars ($50.00) for each calendar day, or portion thereof, for each laborer, worker, or mechanic employed, paid less than the applicable prevailing rates for any work done to accomplish the purposes of this Agreement; and, 2022-039 JRA/JKS
EXHIBIT A
46 Professional Services Agreement Page 3
Rev. 09.2021
(m) Consultant’s services provided pursuant to this Agreement shall comply with the Americans with Disabilities Act (ADA) of 1990, and all amendments thereto, as well as all applicable regulations and guidelines issued pursuant to the ADA.
5. Compensation and Payment.
(a) The total compensation payable by City to Consultant for the Services SHALL NOT EXCEED the sum of $ 160,000 ( "not-to-exceed amount"). City shall compensate Consultant for the Services rendered at the hourly rates, task amounts or travel expenses set forth in Exhibit “A” up to the not -to-exceed amount. Except as provided in the body of this Agreement, the hourly rates, task amounts or travel expenses are intended to be Consultant’s only compensation for the Services and is inclusive of all costs of labor, licensing, permitting, overhead and administrative costs, and any -and-all other costs, expenses, and charges incurred by Consultant, its agents, and employees to provide the Services.
(b) City shall pay Consultant no later than 30 days after City receives a written invoice from Consultant and verifies the Services were performed for the payment requested.
6. Term. The term of this Agreement commences on March 1, 2022, and terminates upon the completion of the Services or December 31, 2023, whichever occurs first.
7. Termination by City. City may terminate any portion or all of the Services by giving Consultant at least 30 calendar-days written notice. Upon receipt of a termination notice, Consultant shall immediately stop all work in progress on the S ervices except where necessary to preserve the benefit of the work, and then assemble the work on the Services for delivery to City on the termination date. All compensation for Services performed prior to the termination date shall be payable to Consultant in accordance with Section 5.
8. Ownership of Documents. All drawings, designs, data, photographs, reports and other items prepared or obtained by Consultant in the performance of the Services are City’s property and Consultant shall deliver them to City upon demand.
9. Copyright and Right of Use. All items created by Consultant for City under this Agreement are works made for hire, and Consultant shall give City the copyright and all intellectual property rights to all items developed, prepared, and delivered as part of the Services. Consultant agrees that all aspects of the Services and items created thereby will be original works of creation and will not use, in whole or in part, any work created by any other party, except when expressly disc losed by Consultant to City and Consultant obtains a license to such items for the benefit of City. All licenses must be perpetual, world-wide, non-exclusive, and royalty free sufficient in scope to permit City’s full use and enjoyment of its ownership rights in the items created by the Services.
10. Confidentiality. Consultant shall not disclose any confidential or proprietary information received from City to anyone except Consultant’s employees who require access to the information to perform the Services. This obligation shall survive 2022-039 JRA/JKS
EXHIBIT A
47 Professional Services Agreement Page 4
Rev. 09.2021
termination and remain in full force and effect until the information, and any copies thereof, are destroyed or returned to City.
11. Defense, Indemnity, and Hold Harmless. To the fullest extent permitted by law, Consultant shall hold harmless, indemnify, and defend with counsel selected by the City or otherwise acceptable to the City, the City and its elected and appointed officials, officers, directors, employees, agents and designated volunteers from and against any and all liability, loss, damage, claims, expenses, and costs (including without limitation, attorney’s fees and costs and fees of litigation) (collectively, “Liability”) of every nature arising out of or in connection with Consultant’s performance of the services contemplated by this Agreement, or in connection with Consultant’s failure to comply with any of its obligations contained in this Agreement, except for such Liability caused by the sole active negligence or willful misconduct of City. Consultant’s obligations to hold harmless, indemnify, and defend shall not be excused because of Consultant’s inability to evaluate Liability or because Consultant evaluates Liability and determines that Consultant is not liable to the claimant. These obligations are independent of, and shall not in any way be limited by, the minimum insurance obligations contained in this Agreement. These obligations shall survive the completion or termination of this Agreement. Consultant must respond within 30 days to the tender of any claim for defense and indemnity by the City.
(a) Modification for Construction Contracts. To the extent this Agreement is a “construction contract” covered by California Civil Code section 2782, then Consultant’s duty to indemnify shall not apply in a manner prohibited by California Civil Code section 2782.
(b) Modification for Design Professional Services. To the extent this Agreement is for “design professional services” defined in California Civil Code section 2782.8, then Consultant’s duties to defend and indemnify shall only apply to the extent provided for in California Civil Code section 2782.8(a), unless section 2782.8(a) is not applicable for one of the reasons set forth in 2782.8(e).
12. Insurance. Consultant shall procure and maintain insurance during the term of this Agreement in the amounts and under the terms set forth in Exhibit “B” against claims that may arise from or in connection with this Agreement and performance of the Services.
Upon reasonable written notice, Consultant shall comply with any changes in the amounts and terms of insurance as may be required from time-to-time by City’s Risk Manager.
13. Acceptance of Final Payment. Consultant’s acceptance of final pay ment will release City from any and all claims and liabilities for compensation under this Agreement.
14. Acceptance of Work. City’s acceptance of, or payment to Consultant for, the Services does not release Consultant from its responsibility for the accuracy , completeness, or competency of the S ervices, nor do the actions constitute an assumption of Consultant’s responsibility or liability by City for any defect or error in the Services.
2022-039 JRA/JKS
EXHIBIT A
48 Professional Services Agreement Page 5
Rev. 09.2021
15. Conflict of Interest. Consultant represents that no City employee or official has a financial interest in Consultant. Consultant shall not offer, encourage, or accept any financial interest in any part of Consultant's business by or from a City employee or official during the term of this Agreement or as a result of being awarded this Agreement. If any of the Services are paid by reimbursement from an agreement between City and a private party, Consultant represents that it has not performed any work for that private party during the 12-month period prior to the execution of this Agreement, and that it shall not negotiate, offer or accept any contract for services from that party during the term of this Agreement.
16. Economic Disclosure. Consultant shall comply with City’s local conflict of interest code and the Political Reform Act, and prepare and file an economic disclosure statement if the S ervices involve making, or participation in making, decisions which may have a material effect on the Consultants’ financial interest. While it is Consultant’s sole responsibility to evaluate its conflict s of interest, the Consultant nevertheless agrees to prepare and file an economic disclosure statement if requested by City.
17. Non-Exclusive Agreement. This is a non- exclusive agreement. City reserves the right to provide, and to retain other consultants to provide, services that are the same or similar to the Services described in this Agreement.
18. No Assignment. Consultant shall not assign or subcontract any of the Services without City’s prior written consent. For the purposes of this section, a change of fifty - percent or more in the ownership or control of Consultant constitutes an assignment.
19. Remedies. All remedies permitted or available under this Agreement, or at law or in equity, are cumulative and alternative, and the invocation of a right or remedy will not be construed to waive or elect a remedy with respect to any other available right o r remedy. As a condition precedent to commencing legal action involving a claim or dispute against City arising from this Agreement, the Consultant must present a written claim to City in accordance with Chapter 3.42 of the Livermore Municipal Code.
20. Construction of Language. T he terms and conditions in this Agreement have been arrived at through negotiation and each party had a full and fair opportunity to review and revise this Agreement with legal counsel. Any ambiguity in this Agreement will not be resolved against either party as the drafting party. In the event of an inconsistency or conflict between the language in the body of the Agreement and an attachment hereto, the language in the body of the Agreement controls.
21. Entire Agreement; Modification. T his Agreement supersedes all other agreements, whether oral or written, between the parties with respect to the Services.
Any modification to this Agreement must be in writing and signed by both parties. In the event the original of this Agreement is lost or destroyed, an archival copy maintained by City can be used in place of the original for all purposes with the same effect as if it was the original.
22. Notice. Notices under this Agreement must be delivered to the addresses below by deposit in the United States mail or by overnight delivery service, with postage prepaid and delivery confirmation:
2022-039 JRA/JKS
EXHIBIT A
49 Professional Services Agreement Page 6
Rev. 09.2021
TO CITY: Attention: City Clerk
City of Livermore
1052 S Livermore Avenue
Livermore, California 94550
TO CONSULTANT: Attention: Helen Streck
Kaizen InfoSource LLC
1541 Stoner Avenue, #4
Los Angeles, CA 90025
23. Waiver. Failure to insist upon the strict performance of any term or conditions in this Agreement, no matter how long the failure continues, is not a waiver of the term or condition and does not bar the right to subsequently demand strict performance. To be effective, a waiver must be in writing and signed by the non-breaching party.
24. Severability. If a court of competent jurisdiction determines a provision in this Agreement is invalid, void, or unenforceable, the remaining provisions will nevertheless continue in full force and effect without being impaired in any way.
25. Survival. The terms, conditions, and obligations in Sections 8, 9, 10, and 11 shall survive the completion or termination of this Agreement.
26. Electronic Signatures. By signing this document, you are agreeing that you have reviewed this disclosure information and consent to transact business using electronic communications, to receive notices and disclosures electronically, and to utilize electronic signatures in lieu of using paper documents. You are not required to receive notices and disclosures or sign documents electronically. If you prefer not to do so, you may request to receive paper copies and withdraw your consent at any time.
27. Counterparts. This Agreement may be executed and delivered in one or more counterparts, each of which will be deemed to be an original copy of this Agreement, and all of which, when taken together, will be deemed to constitute one and the same agreement. The facsimile, email, or other electronically delivered signatures of the Parties shall be deemed to constitute original signatures, and facsimile or electronic copies hereof shall be deemed to constitute duplicate originals and shall be valid and effective for all purposes.
*********************************************************************************************
Signatures and Attachment List on the Next Page
2022-039 JRA/JKS
EXHIBIT A
50 EXHIBIT A
51 SCOPE OF SERVICES
Records Management Consulting
March 2022 through December 2023
1. Scope of Project
The Scope of Services provides the services for development of the governance for the Records Management Program, development of an approved Trusted System and to provide support to the Police Department for application of retention requirements includes following tasks:
A. Develop File Plans for the following departments/divisions to be configured by the software vendor in the City’s Trusted System repository, Laserfiche:
• Public Works
• Airport
• Maintenance
• Water
• Environmental
• Community Development
• Building
• Neighborhood Preservation
• Housing and Human Services
• Engineering
• Planning
• IT
• Cyber Security
• Horizons
• Library
B. Prepare final update to box destruction and/or transfer from the boxes stored in the Police Building
C. Provide training for City staff on how to read and use the new Retention Schedule.
D. Provide support to the City Clerk’s office in implementing Laserfiche as a Trusted System and the system of records for the City.
E. Assist the Police Department with the review of current paper files and provide guidance and assistance with applying retention requirements to the paper records. An estimated 250 hours is estimated for this task.
F. Facilitate and assist onsite for a Records Review day; the schedule to be agreed upon by both parties.
EXHIBIT A
2022-039 JRA/JKS
EXHIBIT A
52 1541 Stoner Avenue, # 4
Los Angeles, CA 90025
805-231-3026
2kaizen.com
Statement of Work for City of Livermore February 2022 through June 2023
2. Deliverables and Timeline
Begin date: March 1, 2022
Completion date: December 31, 2023
3. Project Staffing
A. Consultant Project Manager: Helen Streck and Pilar McAdam B. City Point of Contact: Debbie Elam for City Clerk’s Office and Anna Stoddard for Police
4. Fees
The total investment for this SOW is not-to-exceed $160,000.00.
Task A – 14 Department/Division File Plans for configuration $ 70,000 Task B – Finalize the boxes for destruction or transfer $ 5,000 Task C – Training for City staff $ 7,500
Task D – Implementation Support for Laserfiche System $20,000 Task E – Support for Police Department $50,000
Task F – Facilitate and assist a Records Review Day $ 7,500
KAIZEN CONTACT: Helen Streck
President and CEO
Phone (805) 321-3026
Email [email protected]
PAYMENT INFO: Kaizen InfoSource
513 Piatta Court
Brentwood, CA 94513
EXHIBIT A
2022-039 JRA/JKS
EXHIBIT A
53 Revised 10/28/20 B15 – 2M GL Only (Kaizen)
EXHIBIT B
INSURANCE REQUIREMENTS
Minimum Scope and Limits of Insurance
Consultant/Contractor shall maintain limits no less than:
Commercial General Liability, including operations, products and completed operations, as applicable: $2,000,000/$4,000,000 aggregate per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability or other form of insurance with a general aggregate limit is used, either the general aggregate limit shall apply separately to this project/location or the general aggregate limit shall be twice the required occurrence limit.
Deductibles and Self-Insured Retention
All self-insured retentions (SIR) must be disclosed to Risk Management for approval and shall not reduce the limits of liability. Policies containing any self-insured retention (SIR) provision shall provide, or be endorsed to provide, that the SIR may be satisfied by either the named insured or the City of Livermore. The City of Livermore reserves the right to obtain a full certified copy of any insurance policy and endorsements. Failure to exercise this right shall not constitute a waiver of right to exercise later.
Acceptability of Insurers
Insurance is to be placed with insurers with a current A.M. Best rating of no less than A:
VII and accepted to do business in the State of California, unless otherwise acceptable to the City of Livermore.
Other Insurance Provisions
The general liability policies are to contain, or be endorsed to contain, the following provisions:
1. The City of Livermore, its officers, officials, employees, and designated volunteers are to be covered as additional insureds as respects: liability arising out of activities performed by or on behalf of the Consultant/Contractor. The coverage shall contain no special limitations on the scope of protection afforded to the City of Livermore, its officers, officials, employees, or volunteers.
2. The limits of insurance required in this agreement may be satisfied by a combination of primary and umbrella or excess insurance. The additional insured coverage under the Consultant’s/Contractor’s policy shall be primary and non-contributory and will not seek contribution from the City’s insurance or self-insurance and shall be at least as broad as ISO Form CG 20 10 04 13. Any umbrella or excess insurance shall contain or be endorsed to contain a provision that such coverage shall also apply on a primary and non-contributory basis for the benefit of the City of Livermore before the City’s own insurance or self-insurance shall be called upon to protect it as a named insured.
3. Any failure to comply with reporting or other provisions of the policy, 2022-039 JRA/JKS
EXHIBIT A
54 Revised 10/28/20 B15 – 2M GL Only (Kaizen)
including breaches of warranties, shall not affect coverage provided to the City of Livermore, its officers, officials, employees, or volunteers.
4. The Consultant’s/Contractor's insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability.
5. Each insurance policy required by this clause shall be endorsed to state that coverage shall not be canceled by either party before expiration of the policy unless notice is delivered in accordance with policy provisions.
6. It shall be a requirement under this agreement that any available insurance proceeds broader than, or in excess of, the specified minimum insurance coverage requirements and/or limits shall be available to the additional insured. Furthermore, the requirements for coverage and limits shall be (1) the minimum coverage and limits specified in this agreement; or (2) the broader coverage and maximum limits of coverage of any insurance policy or proceeds available to the named insured; whichever is greater.
7. Certificate Holder section of the insurance certificate should read: City of Livermore, 1052 S. Livermore Avenue, Livermore, CA 94550.
Verification of Coverage
Consultant/Contractor shall furnish certificates of insurance and endorsement(s) effecting coverage to the City of Livermore for approval. The endorsements shall be on forms acceptable to the City of Livermore. All certificates and endorsements are to be received and approved by the City of Livermore before work commences. The City of Livermore reserves the right to require complete and certified copies of all insurance policies required by this Agreement.
2022-039 JRA/JKS
EXHIBIT A
55 CITY COUNCIL STAFF REPORT
ITEM NO. 5.4
DATE:
February 28, 2022
TO:
Honorable Mayor and City Council
FROM:
Marie Weber, Acting Administrative Services Director
SUBJECT:
Resolution authorizing execution of the agreements with Savant Solutions and Artic Wolf for cybersecurity services in an amount not-to-exceed $294,856.
RECOMMENDED ACTION
Staff recommends City Council authorize execution of the agreements with Savant Solutions, Inc. and Artic Wolf Networks, Inc. for cybersecurity services in an amount not-to-exceed $294,856.
SUMMARY
City staff have evaluated the current cybersecurity monitoring services and found significant gaps in coverage leaving the City exposed to cyber risk. Staff evaluated other service providers with a goal to cover identified gaps, leverage current technology investments, and provide a higher level of service.
Staff's evaluation determined the Arctic Wolf services offered the best value for the City providing higher cyber risk mitigation at a competitive price. Services provided by our current Managed Security Services Provider will end on April 30, 2022. Artic Wolf services are proposed to start on April 1, 2022. Execution of these agreements will ensure continued cybersecurity monitoring services for the City, without which the City would be exposed to an unacceptable level of risk with increased vulnerability to cyber threats.
DISCUSSION
The Need
The importance of cybersecurity is growing, yet the City like most organizations lack the time and resources needed to create a mature cybersecurity program internally. In addition, cybersecurity professionals are scarce and expensive to hire, train and retain, which drives many local governments to consider outsourcing cybersecurity monitoring as a solution. Outsourcing cybersecurity monitoring services can improve resource allocation, provide 24/7 coverage, and offer cost savings.
Analysis
Staff performed an analysis of managed cybersecurity services over the past ten months and evaluated the financial implications of outsourcing vs. insourcing. Staff found a few key facts that support outsourcing as the best option. First, with the shortage of qualified security professionals outsourcing is 56 the best option. Second, a Managed Security Services Provider (MSSP) can provide more mature security due to their experience and broad client base. Finally, many MSSPs can leverage Artificial Intelligence (AI) to increase cybersecurity effectiveness.
Staff also reviewed which security responsibilities could be outsourced and which should be outsourced in order to gain cost savings, improve resource allocation, and boost the City's overall security posture.
This helped staff create a list of variables and features needed from an MSSP and allowed staff to rank potential MSSPs to determine which provider would be the best fit for the City.
For service providers, staff queried other agencies to see who they were using as a service including reviews from other members of the Municipal Information Systems Association of California (MISAC). In addition, staff also consulted multiple industry research organizations who specialize in information technology and cybersecurity. Staff evaluated 19 MSSP providers to determine which providers would be able to meet the City requirements.
Selection
Staff have selected Artic Wolf as the MSSP and Savant Solutions as the reseller. Generally, the City would engage with a reseller only and then be subject to the terms and conditions of the services provider. However, in this case, staff was able to negotiate more favorable terms with the service provider. For this reason, there are two agreements in the exhibit, one for the reseller (Savant Solutions) and one for the service provider (Artic Wolf). Each agreement will be executed separately. The term of service will begin on April 1, 2022, and terminate on March 31, 2025.
FISCAL AND ADMINISTRATIVE IMPACTS
There is currently not sufficient budget for this item under the Information Technology and Cybersecurity Internal Service Funds. As part of the budget process, staff will incorporate necessary appropriations for this contract into the Cybersecurity Internal Service Fund for fiscal years 2021-22, and 2022-23.
Appropriations sufficient to cover future year's costs will be incorporated into future budget cycles for approval.
ATTACHMENTS
1. Resolution
2. Exhibit A - Savant Solutions Inc Professional Services Agreement
3. Exhibit B - Arctic Wolf Networks Inc Solutions Agreement
Prepared by: Donald Hester
Cybersecurity Manager
57 Approved by:
____________________________________
Marc Roberts
City Manager
Fiscal Review by:
____________________________________
Bhavna Chaudhary
City Treasurer/Finance Manager
58 RESOLUTION NO. ________
IN THE CITY COUNCIL OF THE CITY OF LIVERMORE, CALIFORNIA
A RESOLUTION TO AUTHORIZE THE EXECUTION OF THE
AGREEMENTS WITH SAVANT SOLUTIONS AND ARCTIC WOLF FOR
CYBERSECURITY MONITORING SERVICES IN AN AMOUNT
NOT-TO-EXCEED $294,856
The current cybersecurity monitoring services provided by Kroll Cyber Security, LLC will expire on April 30, 2022.
The City has selected Arctic Wolf Networks, Inc. to provide cybersecurity monitoring services and Savant Solutions, Inc. as reseller. Cybersecurity monitoring services with Artic Wolf are scheduled to begin April 1, 2022, and end on March 31, 2025.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Livermore as follows:
1. Authorizes the execution of the agreements with Savant Solutions. Inc. and Arctic Wolf Networks, Inc. for cybersecurity monitoring services for three years in an amount not-to-exceed $294,856.
On motion of Council Member ______________________, seconded by Council Member ______________________, the foregoing resolution was passed and adopted on February 28, 2022, by the following vote:
AYES: COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
ABSTAIN: COUNCIL MEMBERS:
ATTEST: APPROVED AS TO FORM:
_____________________________ /s/ Tara Mazzanti
Marie Weber Tara Mazzanti
City Clerk Assistant City Attorney
Exhibit A – Savant Solutions, Inc. Professional Services Agreement Exhibit B – Arctic Wolf Networks, Inc. Solutions Agreement 59 EXHIBIT A
60 EXHIBIT A
61 EXHIBIT A
62 EXHIBIT A
63 EXHIBIT A
64 EXHIBIT A
65 EXHIBIT A
66 EXHIBIT A
67 EXHIBIT A
68 EXHIBIT A
69 EXHIBIT B
70 EXHIBIT B
71 EXHIBIT B
72 EXHIBIT B
73 EXHIBIT B
74 EXHIBIT B
75 EXHIBIT B
76 EXHIBIT B
77 EXHIBIT B
78 CITY COUNCIL STAFF REPORT
ITEM NO. 5.5
DATE:
February 28, 2022
TO:
Honorable Mayor and City Council
FROM:
Brandon Cardwell, Innovation and Economic Development Director SUBJECT:
Resolution granting consent to the City of Pleasanton to renew the Tri-Valley Tourism Marketing District
RECOMMENDED ACTION
Staff recommends City Council adopt a resolution granting consent to the City of Pleasanton to renew the Tri-Valley Tourism Marketing District.
SUMMARY
Since 2006, Visit Tri-Valley (originally branded as the Tri-Valley Convention and Visitors Bureau) has been managing the Tri-Valley Tourism Marketing District (TVTMD), formerly referred to as the Tri-Valley Tourism Business Improvement District. The TVTMD was most recently renewed in 2015, for a seven (7) year term to expire on June 30, 2022. During this period, Visit Tri-Valley has implemented numerous marketing and promotional campaigns, as well as tourism initiatives for the region. To continue to build on this success, the Visit Tri-Valley Board is recommending renewal of the Tri-Valley Tourism Marketing District for a period of 10 years, beginning July 1, 2022.
The proposed annual assessment rate is $3.25 per room per night. The annual assessment rate may be subject to an increase each year starting in the third year, the amount of which shall be determined by the VTV Board, as described in Section V of the TVTMD Management District Plan (Attachment 1). The total assessment rate may not exceed $4.00. This increase is comparable with progressive tourism business improvement districts throughout the region and state. A majority of the hotels in Livermore and the Tri-Valley support the renewal. The proposed renewal will ensure tourism promotion is continued in a comprehensive and self-supporting manner.
If authorized, the proposed renewal would begin on July 1, 2022, or as soon as possible thereafter, and end 10 years from its start date. The renewal involves modifying the following: (1) assessment rate; (2) term, (3) service program; and (4) participating businesses.
DISCUSSION
79 Prior to the establishment of the Tri-Valley Tourism Business Improvement District (TBID) in 2006, the four Tri-Valley cities of Pleasanton, Livermore, Dublin, and San Ramon were the primary means of financial support for what was then called the Tri-Valley Convention and Visitors Bureau and is now known as Visit Tri-Valley (VTV). The Tri-Valley TBID was established to create a sustainable funding source for the organization’s tourism enhancement activities. A TBID is a benefit assessment district focused on tourism, in which covered businesses vote to assess themselves a fee, the proceeds from which are used to fund tourism-related activities that benefit the payors. This approach has been used successfully in other destination areas throughout the state to improve tourism and drive additional room nights to assessed businesses. The Tri-Valley TBID, which was renamed the Tri-Valley Tourism Marketing District (TVTMD) in 2015, assess a fee on paid hotel occupancies and uses the revenue to fund marketing activities that draw visitors to the region. The TVTMD provides more than ninety percent (90%) of VTV's annual revenues, with the remainder coming from membership dues and program income.
The Tri-Valley TBID was originally formed for a five (5) year term and included lodging businesses with 35 rooms or more. The original District included the four Tri-Valley cities of Dublin, Livermore, Pleasanton, and San Ramon. The Town of Danville joined the District in 2009. The District was renewed in 2010 for another five (5) year term, and again in 2015 for a seven (7) year term, including those portions of the unincorporated areas of Alameda and Contra Costa Counties (Counties), which include the communities of Alamo, Blackhawk, and Sunol, the portion of the counties that lies between the cities of Pleasanton and Livermore, but with the exception of the City of San Ramon which declined to participate.
VTV and Tri-Valley area lodging businesses in the District now wish to renew the TVTMD for a 10 year term. The proposed district will include all lodging businesses with five (5) rooms or more located within the boundaries of the Town of Danville (Town), the cities of Dublin, Livermore, and Pleasanton (Cities), and those portions of the unincorporated areas of Alameda and Contra Costa Counties (Counties), which include the communities of Alamo, Blackhawk, and Sunol, the portion of the counties that lies between the cities of Pleasanton and Livermore, and that portion of Alameda County which lies southeast of Interstate 580, as shown on the map in Section IV of the Management District Plan (Attachment 1) and Pleasanton City Council Resolution 22-1267 (Attachment 2).
In mid-2021, in anticipation of the end of the district's term this year, VTV formed a subcommittee of hoteliers representing each city. The subcommittee gathered trends, information, and discussed all options, including percentage-based assessments versus flat rate fee, term lengths, boundaries, and services. A survey from the sub-committee on pricing structures also went before the full VTV Board for consensus. The recommendation for a change in assessment rate and term was made to the full VTV Board for approval and adoption, after which a petition drive was started.
The proposed renewal includes the following modifications:
1 .
Assessment Rate – The assessment rate will be changed to $3.25 per room per night, which may be increased to a maximum of $4 per room per night. The previous assessment rate was $2 per room per night, which may be increased to a maximum of $3.00 per room per night. The current fee is $2.25 per room per night.
2 .
District Term – The term of TVTMD renewal will change from seven (7) to ten (10) years. 3 .
Services – The Annual Service Plan in the proposed Management District Plan includes additional "Destination Development" services and a Film Office.
80 4
.
Participating Businesses – The renewed TVTMD will now apply to lodging businesses with 5 or more rooms, instead of all lodging businesses, regardless of the number of rooms.
The decision to renew the District rests with the lodging businesses with five (5) or more rooms within the city limits of Pleasanton, Livermore, Dublin and the town of Danville, and within designated areas of Alameda and Contra Costa Counties. The lodging business' number of rooms factored by occupancy rate determines the voting strength for each lodging business. Renewal of the District requires a simple majority of lodging businesses that account for at least 50% + $1 of total room revenue within the proposed assessment district boundary. To date, the petition has approximately 75% room revenue approval in favor of renewing the TVTMD.
There are 21 District lodging businesses located in Livermore, comprising 1,604 rooms of the total 3,995 rooms within the proposed District. Eleven of the 21 Livermore lodging businesses totaling 949 rooms have already signed the petition. A list of the lodging establishments that will be affected by the renewed District is included in the attached Management District Plan.
The TVTMD will maintain its existing governance structure with the VTV Board of Directors acting as the Board of Directors for the District. Therefore, more than half of the voting Board members must represent the District lodging businesses. The remaining Board members are comprised of representatives from each of the participating cities, town, and counties. The Management District Plan details the operational specifications and budget of the proposed district.
Pleasanton serves as the lead agency responsible for assessment formation and administration, with participating cities/town/counties responsible for collecting assessments from the lodging businesses in their respective jurisdictions. The cities/town/counties transfer the funds on a quarterly basis to the City of Pleasanton which in turn forwards the funds to VTV.
As part of the TVTMD renewal process, the City of Pleasanton adopted Resolution No. 22-1267 (Attachment 2) on January 18, 2022, which provides a District territory map and establishes the intent to renew the District. In order to move forward with the renewal of the TVTMD, the City of Pleasanton is requesting the Livermore City Council adopt the attached resolution granting consent to renew the TVTMD.
FISCAL AND ADMINISTRATIVE IMPACTS
The promotion efforts of Visit Tri-Valley are designed to generate an increase in hotel room nights and visitor spending on dining, shopping, and entertainment, which had been negatively impacted by the COVID-19 emergency. Their efforts provide economic support for Livermore businesses, which helps with increased sales tax generation. The City's VTV membership will continue at the rate of $2,500 annually, which is budgeted in the General Fund. The City will continue to receive one percent (1%) of the District assessment fees generated by Livermore hotels to offset ancillary administrative costs. The City has received approximately $6,000 in 2021 for the City's administrative costs.
ATTACHMENTS
1. Management District Plan
2. Pleasanton City Council Resolution 22-1267
81 3. Resolution
Prepared by: Theresa De La Vega
Management Analyst
Approved by:
____________________________________
Marc Roberts
City Manager
Fiscal Review by:
____________________________________
Bhavna Chaudhary
City Treasurer/Finance Manager
82 October 19, 2021
Prepared pursuant to the Property and Business Improvement District Law of 1994, Streets and Highways Code section 36600 et seq.
TRI-VALLEY TOURISM MARKETING DISTRICT
MANAGEMENT DISTRICT PLAN
2022- 2032
ATTACHMENT 1
83 CONTENTS
Contents
I. OVERVIEW ........................................................................................................................................ 3 II. ACCOMPLISHMENTS ..................................................................................................................... 5 III. BACKGROUND ................................................................................................................................ 6 IV. BOUNDARY ....................................................................................................................................... 7 V. ASSESSMENT BUDGET AND SERVICES ................................................................................ 8 A. Annual Service Plan ............................................................................................................ 8 Sales & Marketing ........................................................................................................................ 9 Destination Development ............................................................................................................ 9 Administration and Operations .................................................................................................. 10 Contingency & Reserve .............................................................................................................. 10 Collection Fee ............................................................................................................................ 10 B. Annual Budget .................................................................................................................. 10 C. California Constitutional Compliance .............................................................................. 11 D. Assessment ........................................................................................................................ 13 E. Penalties and Interest ........................................................................................................ 14 F. Time and Manner for Collecting Assessments ................................................................. 14
VI. GOVERNANCE ............................................................................................................................... 15 A. Owners’ Association ......................................................................................................... 15 B. Brown Act and California Public Records Act Compliance ............................................ 15 C. Annual Report ................................................................................................................... 15
APPENDIX 1 – LAW .................................................................................................................................... 16 APPENDIX 2 – ASSESSED BUSINESSES ............................................................................................. 27
Prepared by
Civitas
(800)999-7781
www.civitasadvisors.com
ATTACHMENT 1
84 I. OVERVIEW
Developed by Visit Tri-Valley (VTV) and lodging business owners, the Tri-Valley Tourism Marketing District (TVTMD) is an assessment district proposed to provide specific benefits to payors, by funding marketing and sales promotion efforts for assessed businesses. This approach has been used successfully in other destination areas throughout the country to provide the benef it of additional room night sales directly to payors. The TVTMD was formed in 2006 as the Tri-Valley TMD for a five (5) year term and renewed in 2010 , and again in 2015 for a seven (7) year term. VTV and Tri- Valley area lodging businesses now wish to renew the TVTMD for a ten (10) year term. Pursuant to Streets and Highways Code §36620.5, the City of Pleasanton will continue to act as the lead jurisdiction for renewing the TVTMD. The City of Pleasanton will continue to receive TVTMD annual reports.
Location: The TVTMD includes all lodging businesses with five (5) rooms or more located within the boundaries of the Town of Danville (Town), the cities of Dublin, Livermore, and Pleasanton (Cities) and those portions of the unincorporated areas of Contra Costa and Alameda Counties (Counties), which include the communities of Alamo, Blackhawk, and Sunol, the portion of the counties that lies between the cities of Pleasanton and Livermore, and that po rtion of Alameda County which l ies southeast of Interstate 580, as shown on the map in Section IV.
Services: The TVTMD is designed to provide specific benefits directly to payors by increasing awareness and demand for room night sales. S ales & marketing and destination development programs will increase demand for overnight visits and market payors as tourist, meeting and event destination s, thereby increasing demand for room night sales.
Budget: The total TVTMD annual assessment budget for the initial year of its ten (10) year operation is anticipated to be approximately $2,166,000. A similar budget is expected to apply to subsequent years, but this budget is expected to fluctuate as room sales do, and if the assessment rate is increased pu rsuant to this Plan. The budget is based on the most recent revenue reports from 2020.
Cost: The annual assessment rate is three dollars and twenty-five cents ($3.25) of gross short- term room rental revenue. Based on the benefit received, assessments will not be collected on : stays of more than thirty (30) consecutive days, nor on stays by any Federal or State of California officer or employee when on official business who makes a claim that they are exempt, nor on stays by any officer or e mployee of a foreign government who is exempt by reason of express provision of federal law or international treaty. The annual assessment rate may be subject to an increase each year starting in the third year, the amount of which shall be determined by the VTV Board, as described in Section V. The total assessment rate may not exceed four dollars ($4.00).
Collection: Each City, Town and County shall be responsible for collecting the assessment on a quarterly basis (including any delinquencies, penalties and interest) from each lodging business located in their respective jurisdictions within the boundaries of the TVTMD.
Each City, Town and County shall take all reasonable efforts to collect the assessments from each lodging business. On a quarterly basis, each City , Town and County shall ATTACHMENT 1
85 forward the assessment collected to the City of Pleasanton , which shall forward the assessments collected to the Owners’ Association.
Duration: The renewed TVTMD will have a ten (10) year life, beginning July 1, 2022, or as soon as possible thereafter, and end ten (10) years from its start date. Once per year , beginning on the anniversary of TVTMD renewal, there is a thirty (30) day period in which owners paying fifty percent (50%) or more of the assessment may protest and initiate a City Council hearing on TVTMD termination. At the discretion of the Owners’ Association, notification may be sent to lodging busines s owners by the Owners’ Association in advance of the aforementioned thirty (30) day period.
Management: Visit Tri-Valley (VTV) shall continue to serve as the TVTMD’s Owners’ Association.
The Owners’ Association is charged with managing funds and implementing programs in accordance with this Plan, and must provide annual reports to the Pleasanton City Council. The Owners’ Association must provide an annual report to membership and the City of Pleasanton.
ATTACHMENT 1
86 II. ACCOMPLISHMENTS
The TVTMD was initially formed in 2006 and was most recently renewed in 2015 for a seven (7) year term. Over the course of the past seven (7) years, VTV has successfu lly executed hundreds of marketing campaigns, promotions and generated leads through sales events that brought more ‘heads in beds’ and ‘cheeks in seats’ to the region. With a current team of six (6) full time employees, VTV has accomplished the following highlights over the past two (2) years alone:
• Certification by Destination International as a Destination Marketing Accredited Program (DMAP);
• Recipient of the DMA West Best Idea Award 2019: Tri-Valley Ice Cream Trail; • National Finalist for the US Travel Association Destiny Award 2019: Best DMO Website; • Recipient of the Hermes Creative Award 2018 Gold Award: Tri-Valley Ice Cream Trail Video; • New home of Tri-Valley Film Office;
• Delivered twelve (12) advertising campaigns annually; • Produced the Tri -Valley Annual Visitors Guide (print and digital) and monthly consumer/stakeholder newsletters, collateral and branded swag; • Inaugural Taste Tri-Valley Restaurant Week;
• 123k annual referrals to business listings on www.visittrivalley.com; • Hosted 15+ journalists / 20m media impressions annually; • Implemented Cultural Heritage Tourism Initiative across two counties; • International and California Public Relations representation; • Local Recovery Campaign “ToTriValleywithLove.com” with five (5) cities; • Created multiple visitor ‘trails’: beer, wine, caffeine, ice cream; • Collaborated with regional partners and Booking.com for additional hotel revenues; • Booked high profile sporting events annually with significant ROI for members ( i.e.: USA Water Polo, USA Weightlifting and USA Gymnastics);
• Trained front-line staff through “I AM TRI-VALLEY” educational platform; • Provided free membership in California Hotel & Lodging Association for 40 hotels; • Attended dozens of industry tradeshows with event and meeting planners for leads; • Increased social media presence across Instagram, Facebook, Pinterest and Tiktok; • Sponsored local events/ festivals (Scottish Games, Beer Festival, Concerts in the Park); and • Provided essential crisis communications during pandemic and fires.
ATTACHMENT 1
87 III. BACKGROUND
TMDs are an evolution of the traditional Business Improvement District. The first TMD was formed in West Hollywood, California in 1989. Since then, over 100 California destinations have followed suit. In recent years, other states have begun adopting the California model – Montana, South Dakota, Washington, Colorado, Texas and Louisiana have adopted TMD laws. Several other states are in the process of adopting their own legislation. The cities of Wichita, Kansas and Newark, New Jersey used an existing business improvement district law to form a TBID. And, some cities, like Portla nd, Oregon and Memphis, Tennessee have utilized their home rule powers to create TMDs without a state law.
California’s TMDs collectively
raise over $300 million annually
for local destination marketing.
With competitors raising their
budgets, and increasing rivalry
for visitor dollars, it is
important that Tri-Valley
lodging busin esses continue to
invest in stable, lodging-specific
marketing programs.
TMDs utilize the efficiencies of
private sector operation in the
market-based promotion of tourism districts. TMDs allow lodging business owners to organize their efforts to increase demand for room night sales. Lodging business owners within the TMD pay an assessment and those funds are used to provide services that increase demand for room night sales.
In California, most TMDs are formed pursuant to the Property and Business Improvement District Law of 1994. This law allows for the creation of a benefit assessment district to raise funds within a specific geographic area. The key difference between TMDs and other benefit assessment districts is that funds raised are returned to the private non-profit corporation governing the district.
There are many benefits to TMDs:
• Funds must be spent on services and improvements that provide a specific benefit only to those who pay;
• Funds cannot be diverted to general government programs; • They are customized to fit the needs of payors in each destination; • They allow for a wide range of services;
• They are designed, created and governed by those who will pay the assessment; and • They provide a stable, long-term funding source for tourism promotion. 1 2 4 6 9 12 19 25 29 32 38 46
61 64 70 75
88 95 99101104109110
0 20
40 60
80 100
120
1989
1995
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Number of Districts Operating in
California
ATTACHMENT 1
88 IV. BOUNDARY
The proposed TVTMD includes all lodging businesses with five (5) rooms or more located within the boundaries of the Town of Danville, the cities of Dublin, Livermore, and Pleasanton and those portions of the unincorporated areas of Contra Costa and Alameda Counties shown on the map below, which include the communities of Alamo, Blackhawk, and Sunol, the portion of the counties that lies between the cities of Pleasanton and Livermore, and that portion of Alameda County which lies southeast of Interstate 580.
As used herein the term “lodging business” means any structure, or any portion of any structure, which is occupied or intended or designed for occupancy by transients for sleeping purposes. Lodging business includes any hotel, apartment complex, inn, motel, studio hotel, bachelor hotel, lodging house, or rooming house. Lodging business does not include vacation rentals.
The TVTMD’s boundaries shall remain conterminous with each participating jurisdiction’s boundaries. Therefore, future lodging businesses an nexed into the participating jurisdiction’s after the establishment of the TVTMD shall automatically be included within the TVTMD’s boundaries when the responsible jurisdiction’s Financial Officer issues a lodging license to that lodging business.
The TVTMD, as shown below, will initially consist of forty (40) lodging businesses. The boundaries shall be the boundaries as noted above of each jurisdiction as may be amended from time to time. A complete listing of lodging businesses within the TVTMD can be found in Appendix 2.
ATTACHMENT 1
89 V. ASSESSMENT BUDGET AND SERVICES
A. Annual Service Plan
Assessment funds will be spent to provide specific benefits conferred or privileges granted directly to the payors that are not provided to those not charged, and which do not exceed the reasonable cost to the City of conferring the benefits or granting the privileges. The privileges and services provided with the TVTMD funds are sales & marketing and destination development programs available only to assessed businesses.
A service plan assessment budget has been developed to deliver services that benefit the assessed businesses. A detailed annual assessment budget will be developed and approved by VTV. The table below illustrates the initial annual assessment budget allocations. The total initial assessment budget is $2,166,000.
Although actual revenues will fluctuate due to market conditions, the proportional allocations of the budget shall remain the same. However, the City and the VTV board shall have the authority to adjust budget allocations between the categories by no more than fifteen percent (15%) of the total budget per year. A description of the proposed improvements and activities for the initial year of operation is below. The same activities are proposed for subsequent years. In the event of a legal challenge against the TVTMD, any and all assessment funds may be used for the costs of defending the TVTMD.
Each budget category includes all costs related to providing that service. For example, the sales and marketing budget includes the cost of staff time dedicated to overseeing and implementing the sales and marketing program. Staff time dedicated purely to administrative tasks is allocated to the administrative portion of the budget. The costs of an individual staff member may be allocated to multiple budget categories. The staffing levels necessary to provide the services below will be determined by the VTV on an as- needed basis.
Sales & Marketing,
$1,407,900 , 65%
Destination
Development,
$216,600 , 10%
Administration,
$389,880 , 18%
Collection Fee,
$43,320 , 2%
Contingency/Renewal,
$108,300 , 5%
Initial Annual Assessment Budget -
$2,166,000
ATTACHMENT 1
90 Sales & Marketing
A sales, marketing, and communications program will promote assessed lodging businesses as a leisure, meeting, and event destinations. The sales, marketing, and communications program will have a central theme of promoting the Tri-Valley area as a desirable place for overnight visits. The program will have the goal of incre asing overnight visitation and room night sales at assessed lodging businesses, and may include, but is not limited to, the following activities:
• Internet marketing efforts to increase awareness and optimize internet presence to drive overnight visitation and room sales to assessed lodging businesses; Print ads in magazines and newspapers, television ads, and radio ads targeted at potential visitors to drive overnight visitation and room sales to assessed lodging businesses; • Building the Tri-Valley branding and local destination marketing to attract overnight visitation to assessed businesses and the TVTMD;
• Attendance of trade shows to promote assessed lodging businesses; • Sales blitzes or sponsorships for assessed lodging businesses; • Familiarization tours of assessed lodging businesses; • Preparation and production of collateral promotional materials such as brochures, guides, flyers and maps featuring assessed lodging businesses;
• Attendance of professional industry conferences and affiliation events to promote assessed lodging businesses;
• Lead generation activities designed to attract tourists and group events to assessed lodging businesses;
• Director of Sales and General Manager meetings to plan and coordinate tourism promotion efforts for assessed lodging businesses;
• Education of hospitality staff on service and safety (related to alcohol and food) designed to create a visitor experience that will bring repeat visits to assessed lodging businesses; • Education of lodging business management and the Owners’ Association on marketing strategies best suited to meet assessed lodging businesses’ needs; and • Efforts supporting the Tri-Valley Film Office.
Destination Development
The Destination Development program will provide funding to assist in the building or financing of well-vetted capital improvement projects or programs which attract overnight visitors to assessed businesses. These projects may include, but is not limited to, the following activities:
• Comprehensive and integrated wayfinding signage system enhancements including signage to parking decks and lots;
• Art and cultural projects or programs, to attract overnight visitors; • Gateway enhancements to attract overnight visitors;
• Improvements to existing parks and facilities utilized by overnight visitors; • Safe and fun entertainment complex for young teens and adults utilized by overnight visitors;
• Live music venue which attracts overnight visitors;
• Infrastructure improvements that enhance Tri-Valley’s competitive position to attract desirable special events year-round and attract overnight visitors; • Destination product development research and master planning; • Advocacy programs, memberships and partnerships dedicated to provide unified communication, engagement and leadership;
• Welcome center and kiosk development and brand-centric visitor services training program for both public and private sector staff; and
• Infrastructure improvements that enhance Tri-Valley’s competitive position to attract desirable special events year-round and attract overnight visitors.
ATTACHMENT 1
91 Administration and Operations
The administration and operations portion of the budget sh all be utilized for administrative staffing costs, office costs, and other general administrative costs such as insurance, legal and accounting fees.
Contingency & Reserve
The budget includes a contingency line item to account for uncollected assessments , if any. If there are contingency funds collected, they may be held in a reserve fund or utilized for other program, administration or renewal costs at the discretion of the VTV Board. Policies relating to contributions to the reserve fund, the target amount of the reserve fund, and expenditure of monies from the reserve fund shall be set by the VTV Board. Contingency/reserve funds may be spent on District programs or administrative and renewal costs in such proportions as determined by the VTV Board. The reserve fund may be used for the costs of renewing the TVTMD.
Collection Fee
The Town of Danville, the cities of Dublin, Livermore, and Pleasanton, and the counties of Alameda and Contra Costa shall each be paid a fee equal to one percent ( 1%) of the amou nt of assessment collected within their jurisdiction to cover their costs of collection and administration. The City of Pleasanton shall be paid a fee equal to one percent ( 1%) of the amount of assessment collected in within its jurisdiction, plus one percent (1%) of the total assessment collected from all jurisdictions, to cover its costs of collection and administration.
B. Annual Budget
The total ten (10) year improvement and service plan budget is projected at approximately $2,166,000 annually, or $29,546,246 through 2032 if the maximum assessment rates are adopted. A similar budget is expected to apply to subsequent years, but this budget is expected to fluctuate as room sales do, and if the assessment rate is increased. The budget is based on the most recent revenue reports from 2020.
If the maximum annual assessment increases are adopted by the Owners’ Association upon approval from the Pleasanton City Council, the annual budget will increase as illustrated in the table below. The annual assessment rate may be subject to an increase each year starting in the third year, the amount of which shall be determined by the VTV Board. The total assessment rate may not exceed four dollars ($4.00).
The assessment rate shall be three dollars and twenty-five cents ($3.25) in the first year of the renewal, and increases may be implemented in later years at the discretion of the Owners’ Association . The table below demonstrates the maximum with the assumption that the rates will be increased to the maximum possible rate of four dollars ($4.00) in year three; as it is a required disclosure, it is not the anticipated course of action. Alternate courses of action may be taken in regards to implementing the assessment rate increase other than what is demonstrated in the chart below, within the parameters of this Management District Plan. Additionally, a three percent (3%) annual increase in the total budget is shown, to account for estimated increased room night sales as a result of TVTMD efforts. This three percent (3%) annual increase is a conservative estimate based on the effects of similarly sized TMD budgets.
ATTACHMENT 1
92 Estimated Annual Budget If Maximum Assessment Rates
Are Adopted
Year
Sales &
Marketing
Destination
Development Administration Collection Fee Contingency/
Renewal Total
2022/23 $1,407,900 $216,600 $389,880 $43,320 $108,300 $2,166,000 2023/24 $1,450,137 $223,098 $401,576 $44,620 $111,549 $2,230,980 2024/25 $1,838,327 $282,820 $509,075 $56,564 $141,410 $2,828,196 2025/26 $1,893,477 $291,304 $524,347 $58,261 $145,652 $2,913,042 2026/27 $1,950,281 $300,043 $540,078 $60,009 $150,022 $3,000,433 2027/28 $2,008,790 $309,045 $556,280 $61,809 $154,522 $3,090,446 2028/29 $2,069,053 $318,316 $572,969 $63,663 $159,158 $3,183,159 2029/30 $2,131,125 $327,865 $590,158 $65,573 $163,933 $3,278,654 2030/31 $2,195,059 $337,701 $607,862 $67,540 $168,851 $3,377,014 2031/32 $2,260,911 $347,832 $626,098 $69,566 $173,916 $3,478,324 Total $19,205,060 $2,954,625 $5,318,324 $590,925 $1,477,312 $29,546,246
The table below demonstrates the annual improvement and service plan budget with the assumption that the rates will not be increased during the TVTMD’s ten (10) year term. Additionally, a three percent (3%) annual increase in the total budget is shown, to account for estimated increased room night sales as a result of TVTMD efforts.
Estimated Annual Budget If Maximum Assessment Rates
Are Not Adopted
Year Sales &
Marketing
Destination
Development
Administration Collection Fee Contingency
/Renewal
Total
2022/23 $1,407,900 $216,600 $389,880 $43,320 $108,300 $2,166,000 2023/24 $1,450,137 $223,098 $401,576 $44,620 $111,549 $2,230,980 2024/25 $1,493,641 $229,791 $413,624 $45,958 $114,895 $2,297,909 2025/26 $1,538,450 $236,685 $426,032 $47,337 $118,342 $2,366,847 2026/27 $1,584,604 $243,785 $438,813 $48,757 $121,893 $2,437,852 2027/28 $1,632,142 $251,099 $451,978 $50,220 $125,549 $2,510,988 2028/29 $1,681,106 $258,632 $465,537 $51,726 $129,316 $2,586,317 2029/30 $1,731,539 $266,391 $479,503 $53,278 $133,195 $2,663,907 2030/31 $1,783,486 $274,382 $493,888 $54,876 $137,191 $2,743,824 2031/32 $1,836,990 $282,614 $508,705 $56,523 $141,307 $2,826,139 Total $16,139,996 $2,483,076 $4,469,537 $496,615 $1,241,538 $24,830,763
C. California Constitutional Compliance
The TVTMD assessment is not a property-based assessment subject to the requirements of Proposition 218. Courts have found Proposition 218 limited the term ‘assessments’ to levies on real property.1 Rather, the TVTMD assessment is a business -based assessment, and is subject to Proposition 26. Pursuant to Proposition 26 all levies are a tax unless they fit one of seven exceptions. 1 Jarvis v. the City of San Diego 72 Cal App. 4th 230
ATTACHMENT 1
93 Two of these exceptions apply to the TVTMD, a “specific benefit” and a “specific government service.” Both require that the costs of benefits or services do not exceed the reasonable costs to the City of conferring the benefits or providing the services.
1. Specific Benefit
Proposition 26 requires that assessment funds be expe nded on, “ a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of conferring the benefit or granting the privilege.”2 The services in this Plan are designed to provide targeted benefits directly to assessed businesses, and are intended only to provide benefits and services directly to those businesses paying the assessment. These services are tailored not to serve the general public, businesses in general, or parcels of land, but rather to serve the specific businesses within the TVTMD. The activities described in this Plan are specifically targeted to increase demand for room night sales for assessed lodging businesses within the boundaries of the TVTMD, and are narrowly tailored. TVTMD funds will be used exclusively to provide the specific benefit of increased demand for room night sales directly to the assessees. Assessment funds shall not be used to feature non -assessed lodging businesses in TVTMD programs, or to directly generate sales for non -assessed businesses. The activities paid for from assessment revenues are business services constituting and providing specific benefits to the assessed businesses.
The assessment imposed by this TVTMD is for a specific benefit conferred directly to the payors that is not provided to those not charged. The specific benefit conferred directly to the payors is an increase in demand for room night sales. The specific benefit of an increase in demand for room night sales for assessed lodging businesses will be provided only to lodging businesses paying the district assessment, with marketing & sales and destination development programs promoting lodging businesses paying the TVTMD assessment. The marketing & sales and destination development programs will be designed to increase room night sales at each assessed lodging businesses. Because they are necessary to provide the marketing & sales and destination development programs that specifically benefit the assessed lodging businesses, the administration and contingency services also provide the specific benefit of increased demand for room night sales to the assessed lodging businesses.
Although the TVTMD, in providing specific benefits to payors, may produce incidental benefits to non-paying businesses, the incidental benefit does not preclude the services from being considered a specific benefit. The legislature has found that, “A specific benefit is not excluded from classification as a ‘specific benefit’ merely because an indirect benefit to a nonpayor occurs incidentally and without cost to the payor as a consequence of providing the specific benefit to the payor.”3
2. Specific Government Service
The assessment may also be utilized to provide, “a specific government service or product provided directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of providing the service or product.”4 The legislature has recognized that marketing and promotions services like those to be provided by the TVTMD are government services within the meaning of Proposition 26 5. Further, the legislature has determined that “a specific governme nt service is not excluded from classification as a ‘specific government 2 Cal. Const. art XIII C § 1(e)(1)
3 Government Code § 53758(a)
4 Cal. Const. art XIII C § 1(e)(2)
5 Government Code § 53758(b)
ATTACHMENT 1
94 service’ merely because an indirect benefit to a nonpayor occurs incidentally and without cost to the payor as a consequence of providing the specific government service to the payor.”6
3. Reasonable Cost
TVTMD services will be implemented carefully to ensure they do not exceed the reasonable cost of such services. The full amount assessed will be used to provide the services described herein. Funds will be managed by the VTV, and reports submitted on an annual basis to the City. Only assessed lodging businesses will be featured in marketing materials, receive sales leads generated from TVTMD- funded activities, be featured in advertising campaigns, and benefit from other TVTMD-funded services. Non -assessed lodging businesses will not receive these, nor any other, TVTMD-funded services and benefits.
The TVTMD-funded programs are all targeted directly at and feature only assessed businesses. It is, however, possible that there will be a spill over benefit to non -assessed businesses. If non -assessed lodging businesses receive incremental room nights, that portion of the promotion or program generating those room nights shall be paid with non -TVTMD funds. TVTMD funds shall o nly be spent to benefit the assessed businesses, and shall not be spent on that portion of any program which directly generates incidental room nights for non-assessed businesses.
D. Assessment
The annual assessment rate is three dollars and twenty -five cents ($3.25) of gross short -term room rental revenue. Based on the benefit received, assessments will not be collected on: stays of more than thirty (30) consecutive days, nor on stays by any Federal or State of California officer or employee when on offic ial business who makes a claim that they are exempt, nor on stays by any officer or employee of a foreign government who is exempt by reason of express provision of federal law or international treaty. The annual assessment rate may be subject to an increase each year starting in the third year, the amount of which shall be determined by the VTV Board, as described in Section V. The total assessment rate may not exceed four dollars ($4.00).
The term “gross room rental revenue” as used herein means: the consideration charged, whether or not received, for the occupancy of space in a lodging business valued in money, whether to be received in money, goods, labor or otherwise, including all recei pts, cash, credits and property and services of any kind or nature, without any deduction therefrom whatsoever. Gross room rental revenue shall not include any federal, state or local taxes collected, including but not limited to transient occupancy taxes.
The assessment is levied upon and a direct obligation of the assessed lodging business. However, the assessed lodging business may, at its discretion, pass the assessment on to transients. The amount of assessment, if passed on to each transient, shall be disclosed in advance and separately stated from the amount of rent charged and any other applicable taxes , and each transient shall receive a receipt for payment from the business. If the TVTMD assessment is identified separately it shall be disclosed as the “TVTMD Assessment.” As an alternative, the disclosure may include the amount of the TVTMD assessment and the amount of the assessment imposed pursuant to the California Tourism Marketing Act, Government Code §13995 et seq. and shall be disclosed as the “Tourism Assessment.” The assessment is imposed solely upon, and is the sole obligation of the assessed lodging business even if it is passed on to transients. The assessment shall not be considered revenue for any purpose, including calculation of transient occupancy taxes.
6 Government Code § 53758(b)
ATTACHMENT 1
95 Bonds may be issued.
E. Penalties and Interest
The TVTMD shall reimburse the Cities, Town and Counties for any costs associated with collecting unpaid assessments. If sums in excess of the delinquent TVTMD assessment are sought to be recovered in the same collection action by the City, the TVTMD shall bear its pro rata share of such collection costs. Ass essed businesses which are delinquent in paying the assessment shall be responsible for paying:
1. Any business which fails to pay any assessment within the time required shall pay a penalty of ten percent (10%) of the amount of the assessment in addition to the amount of the assessment.
2. Any business which fails to remit any delinquent assessment on or before a period of 30 days following the date on which the assessment first became delinquent shall pay a second delinquency penalty of ten percent (10%) of the amount of the assessment in addition to the amount of the assessment and the ten percent (10%) penalty first imposed.
3. If it is determined that the nonpayment of any assessment is due to fraud, a penalty of twenty-five percent (25%) of the amount of the assessment shall be added thereto in addition to the penalties stated above.
4. In addition to the penalties imposed, any business which fails to remit any assessment shall pay interest at the rate of one-half of one percent (0.5%) per month or fraction thereof on the amount of the assessment, exclusive of penalties, from the date on which the assessment first became delinquent until paid.
5. Every penalty imposed and such interest as accrues shall become a part of the assessment required to be paid.
F. Time and Manner for Collecting Assessments
The TVTMD assessment will be implemented beginning beginning July 1, 2022, or as soon as possible thereafter, and end ten (10) years from its start date. Each City, Town and County will be responsible for collecting the assessment on a quarterly basis (including any delinquencies, penalties and interest) from each lodging business located in the boundaries of the TVTMD. Each City Town and County shall take all reasonable efforts to collect the assessments from each lodging business. On a quarterly basis, each City, Town and County shall forward the assessment collected to the City of Pleasanton.
The City of Pleasanton shall forward the assessments collected to the Owners’ Association.
ATTACHMENT 1
96 VI. GOVERNANCE
A. Owners’ Association
The Pleasanton City Council , through adoption of this Management District Plan, has the right, pursuant to Streets and Highways Code §36651, to identify the body that shall implement the proposed program, which shall be the Owners’ Association of the TVTMD as defined in Streets and Highways Code §36612. The Pleasanton City Council has determined that Visit Tri -Valley will continue to serve as the Owners’ Association for the TVTMD.
More than one-half of the members of the Visit Tri-Valley Board of Directors shall be representatives of assessed lodging businesses.
B. Brown Act and California Public Records Act Compliance An Owners’ Association is a private entity and may not be considered a public entity for any purpose, nor may its board members or staff be considered to be public officials for any purpose. The Owners’ Association is, however, subject to government regulations relating to transparency, namely the Ralph M. Brown Act and the California Public Records Act. These regulations are designed to promote public accountability. The Owners’ Association acts as a legislative body under the Ralph M. Brown Act (Government Code §54950 et seq.). Thus, meetings of the VTV board and certain committees must be held in compliance with the public notice and other requireme nts of the Brown Act. The Owners’ Association is also subject to the record keeping and disclosure requirements of the California Public Records Act. Accordingly, the Owners’ Association shall publicly report any action taken and the vote or abstention on that action of each member present for the action.
C. Annual Report
The VTV shall present an annual report at the end of each year of operation to the City Council pursuant to Streets and Highways Code §36650 (see Appendix 1). The annual report shall include:
• Any proposed changes in the boundaries of the improvement district or in any benefit zones or classification of businesses within the district.
• The improvements and activities to be provided for that fiscal year. • An estimate of the cost of providing the improvements and the activities for that fiscal year. • The method and basis of levying the assessment in sufficient detail to allow each business owner to estimate the amount of the assessment to be levied against his or her business for that fiscal year.
• The estimated amount of any surplus or deficit revenues to be carried over from a previous fiscal year.
• The estimated amount of any contributions to be made from sources other than assessments levied pursuant to this part.
ATTACHMENT 1
97 APPENDIX 1 – LAW
*** THIS DOCUMENT IS CURRENT THROUGH THE 2021 SUPPLEMENT *** (ALL 2020 LEGISLATION)
STREETS AND HIGHWAYS CODE
DIVISION 18. PARKING
PART 7. PROPERTY AND BUSINESS IMPROVEMENT DISTRICT LAW OF 1994
CHAPTER 1. General Provisions
ARTICLE 1. Declarations
36600. Citation of part
This part shall be known and may be cited as the “Property and Business Improvement District Law of 1994.”
36601. Legislative findings and declarations; Legislative guidance
The Legislature finds and declares all of the following:
(a) Businesses located and operating within business districts in some of this state’s communities are economically disadvantaged, are underutilized, and are unable to attract customers due to inadequate facilities, services, and activities in the business districts. (b) It is in the public interest to promote the economic revitalization and physical maintenance of business districts in order to create jobs, attract new businesses, and prevent the erosion of the business districts. (c) It is of particular local benefit to allow business districts to fund business related improvements, maintenance, and activities through the levy of assessments upon the businesses or real property that receive benefits from those improvements.
(d) Assessments levied for the purpose of conferring special benefit upon the real property or a specific benefit upon the businesses in a business district are not taxes for the general benefit of a city, even if property, businesses, or persons not assessed receive incidental or collateral effects that benefit them. (e) Property and business improvement districts formed throughout this state have conferred special benefits upon properties and businesses within their districts and have made those properties and businesses more useful by providing the following benefits:
(1) Crime reduction. A study by the Rand Corporation has confirmed a 12-percent reduction in the incidence of robbery and an 8-percent reduction in the total incidence of violent crimes within the 30 districts studied.
(2) Job creation.
(3) Business attraction.
(4) Business retention.
(5) Economic growth.
(6) New investments.
(f) With the dissolution of redevelopment agencies throughout the state, property and business improvement districts have become even more important tools with which communities can combat blight, promote economic opportunities, and create a clean and safe environment. (g) Since the enactment of this act, the people of California have adopted Proposition 218, which added Article XIII D to the Constitution in order to place certain requirements and restrictions on the formation of, and activities, expenditures, and assessments by property-based districts. Article XIII D of the Constitution provides that property-based districts may only levy assessments for special benefits. (h) The act amending this section is intended to provide the Legislature’s guidance with regard to this act, its interaction with the provisions of Article XIII D of the Constitution, and the determination of special benefits in property-based districts.
(1) The lack of legislative guidance has resulted in uncertainty and inconsistent application of this act, which discourages the use of assessments to fund needed improvements, maintenance, and activities in property-based districts, contributing to blight and other underutilization of property. (2) Activities undertaken for the purpose of conferring special benefits upon property to be assessed inherently produce incidental or collateral effects that benefit property or persons not assessed.
Therefore, for special benefits to exist as a separate and distinct category from general benefits, the ATTACHMENT 1
98 incidental or collateral effects of those special benefits are inherently part of those special benefits.
The mere fact that special benefits produce incidental or collateral effects that benefit property or persons not assessed does not convert any portion of those special benefits or their incidental or collateral effects into general benefits.
(3) It is of the utmost importance that property-based districts created under this act have clarity regarding restrictions on assessments they may levy and the proper determination of special benefits.
Legislative clarity with regard to this act will provide districts with clear instructions and courts with legislative intent regarding restrictions on property-based assessments, and the manner in which special benefits should be determined.
36602. Purpose of part
The purpose of this part is to supplement previously enacted provisions of law that authorize cities to levy assessments within property and business improvement districts, to ensure that those assessments conform to all constitutional requirements and are determined and assessed in accordance with the guidance set forth in this act. This part does not affect or limit any other provisions of law authorizing or providing for the furnishing of improvements or activities or the raising of revenue for these purposes.
36603. Preemption of authority or charter city to adopt ordinances levying assessments
Nothing in this part is intended to preempt the authority of a charter city to adopt ordinances providing for a different method of levying assessments for similar or additional purposes from those set forth in this part. A property and business improvement district created pursuant to this part is expressly exempt from the provisions of the Special Assessment Investigation, Limitation and Majority Protest Act of 1931 (Division 4 (commencing with Section 2800)).
36603.5. Part prevails over conflicting provisions
Any provision of this part that conflicts with any other provision of law shall prevail over the other provision of law, as to districts created under this part.
36604. Severability
This part is intended to be construed liberally and, if any provision is held invalid, the remaining provisions shall remain in full force and effect. Assessments levied under this part are not special taxes.
ARTICLE 2. Definitions
36606. “Activities”
“Activities” means, but is not limited to, all of the following that benefit businesses or real property i n the district:
(a) Promotion of public events.
(b) Furnishing of music in any public place.
(c) Promotion of tourism within the district.
(d) Marketing and economic development, including retail retention and recruitment. (e) Providing security, sanitatio n, graffiti removal, street and sidewalk cleaning, and other municipal services supplemental to those normally provided by the municipality. (f) Other services provided for the purpose of conferring special benefit upon assessed real property or specific benefits upon assessed businesses located in the district.
36606.5. “Assessment”
“Assessment” means a levy for the purpose o f acquiring, constructing, installing, or maintaining improvements and providing activities that will provide certain benefits to properties or businesses located within a property and business improvement district.
36607. “Business”
ATTACHMENT 1
99 “Business” means all types of businesses and includes financial institutions and professions.
36608. “City”
“City” means a city, county, city and county, or an agency or entity created pursuant to Article 1 (commencing with Section 6500) of Chapter 5 of Division 7 of Title 1 of the Government Code, the public member agencies of which includes only cities, counties, or a city and county, or the State of California.
36609. “City council”
“City council” means the city council of a city or the board of supervisors of a county, or the agency, commission, or board created pursuant to a joint powers agreement and which is a city within the meaning of this part.
36609.4. “Clerk”
“Clerk” means the clerk of the legislative body.
36609.5. “General benefit”
“General benefit” means, for purposes of a property-based district, any benefit that is not a “special benefit” as defined in Section 36615.5.
36610. “Improvement”
“Improvement” means the acquisition, construction, installation, or maintenance of any tangible property with an estimated useful life of five years or more including, but not limited to, the following:
(a) Parking facilities.
(b) Benches, booths, kiosks, display cases, pedestrian shelters and signs. (c) Trash receptacles and public restrooms.
(d) Lighting and heating facilities.
(e) Decorations.
(f) Parks.
(g) Fountains.
(h) Planting areas.
(i) Closing, opening, widening, or narrowing of existing streets. (j) Facilities or equipment, or both, to enhance security of persons and property within the district. (k) Ramps, sidewalks, plazas, and pedestrian malls.
(l) Rehabilitation or removal of existing structures.
36611. “Management district plan”; “Plan”
“Management district plan” or “plan” means a proposal as defined in Section 36622.
36612. “Owners’ association”
“Owners’ association” means a private nonprofit entity that is under contract with a city to administer or implement improvements, maintenance, and activities specified in the management district plan. An owners’ association may be an existing nonprofit entity or a newly formed nonprofit entity. An owners’ association is a private entity and may not be considered a public entity for any purpose, nor may its board members or staff be considered to be public officials for any purpose. Notwithstanding this section, an owner s’ association shall comply with the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of Title 5 of the Government Code), at all times when matters within the subject matter of the district are heard, discussed, or deli berated, and with the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code), for all records relating to activities of the district. 36614. “Property”
“Property” means real property situated within a district.
ATTACHMENT 1
100
36614.5. “Property and business improvement district”; “District”
“Property and business improvement district,” or “district,” means a property and business improvement district established pursuant to this part.
36614.6. “Property-based assessment”
“Property-based assessment” means any assessment made pursuant to this part upon real property.
36614.7. “Property-based district”
“Property-based district” means any district in which a city levies a property-based assessment.
36615. “Property owner”; “Business owner”; “Owner”
“Property owner” means any person shown as the owner of land on the last equalized assessment roll or otherwise known to be the owner of land by the city council. “Business owner” means any person recognized by the city as the owner of the business. “Owner” means either a business owner or a property owner. The city council has no obligation to obtain other information as to the ownership of land or businesses, and its determination of ownership shall be final and conclusive for the purposes of this part. Wherever this part requires the signature of the property owner, the signature of the authorized agent of the property owner shall be sufficient. Wherever this par t requires the signature of the business owner, the signature of the authorized agent of the business owner shall be sufficient.
36615.5. “Special benefit”
“Special benefit” means, for purposes of a property -based district, a particular and distinct benefit over and above general benefits conferred on real property located in a district or to the public at large. Special benef it includes incidental or collateral effects that arise from the improvements, maintenance, or activities of property-based districts even if those incidental or collateral effects benefit property or persons not assessed. Special benefit excludes general enhancement of property value.
36616. “Tenant”
“Tenant” means an occupant pursuant to a lease of commercial space or a dwelling unit, other than an owner.
ARTICLE 3. Prior Law
36617. Alternate method of financing certain improvements and activities; Effect on other provisions
This part provides an alternative method of financing certain improvements and activities. The provisions of this part shall not affect or limit any other provisions of law authorizing or providing for the furnishing of improvements or activities or the raising of revenue for these purposes. Every improvement area established pursuant to the Parking and Business Improvement Area Law of 1989 (Part 6 (commencing with Section 36500) of this division) is valid and effective and is unaffected by this part.
CHAPTER 2. Establishment
36620. Establishment of property and business improvement district
A property and business improvement district may be established as provided in this chapter.
36620.5. Requirement of consent of city council
A county may not form a district within the territ orial jurisdiction of a city without the consent of the city council of that city. A city may not form a district within the unincorporated territory of a county without the consent of the board ATTACHMENT 1
101
of supervisors of that county. A city may not form a district within the territorial jurisdiction of another city without the consent of the city council of the other city.
36621. Initiation of proceedings; Petition of property or business owners in proposed district
(a) Upon the submission of a writte n petition, signed by the property or business owners in the proposed district who will pay more than 50 percent of the assessments proposed to be levied, the city council may initiate proceedings to form a district by the adoption of a resolution expressing its intention to form a district.
The amount of assessment attributable to property or a business owned by the same property or business owner that is in excess of 40 percent of the amount of all assessments proposed to be levied, shall not be included in determining whether the petition is signed by property or business owners who will pay more than 50 percent of the total amount of assessments proposed to be levied. (b) The petition of property or business owners required under subdivision (a) shall in clude a summary of the management district plan. That summary shall include all of the following:
(1) A map showing the boundaries of the district.
(2) Information specifying where the complete management district plan can be obtained. (3) Information spec ifying that the complete management district plan shall be furnished upon request.
(c) The resolution of intention described in subdivision (a) shall contain all of the following:
(1) A brief description of the proposed improvements, maintenance, and activ ities, the amount of the proposed assessment, a statement as to whether the assessment will be levied on property or businesses within the district, a statement as to whether bonds will be issued, and a description of the exterior boundaries of the proposed district, which may be made by reference to any plan or map that is on file with the clerk. The descriptions and statements do not need to be detailed and shall be sufficient if they enable an owner to generally identify the nature and extent of the impr ovements, maintenance, and activities, and the location and extent of the proposed district. (2) A time and place for a public hearing on the establishment of the property and business improvement district and the levy of assessments, which shall be consis tent with the requirements of Section 36623.
36622. Contents of management district plan
The management district plan shall include, but is not limited to, all of the following:
(a) If the assessment will be levied on property, a map of the district in sufficient detail to locate each parcel of property and, if businesses are to be assessed, each business within the district. If t he assessment will be levied on businesses, a map that identifies the district boundaries in sufficient detail to allow a business owner to reasonably determine whether a business is located within the district boundaries. If the assessment will be levied on property and businesses, a map of the district in sufficient detail to locate each parcel of property and to allow a business owner to reasonably determine whether a business is located within the district boundaries.
(b) The name of the proposed district.
(c) A description of the boundaries of the district, including the boundaries of benefit zones, proposed for establishment or extension in a manner sufficient to identify the affected property and businesses included, which may be made by reference to any plan or map that is on file with the clerk. The boundaries of a proposed property assessment district shall not overlap with the boundaries of another existing property assessment district created pursuant to this part. This part does not prohibit the boundaries of a district created pursuant to this part to overlap with other assessment districts established pursuant to other provisions of law, including, but not limited to, the Parking and Business Improvement Area Law of 1989 (Part 6 (commencing with Section 36500)). This part does not prohibit the boundaries of a business assessment district created pursuant to this part to overlap with another business assessment district created pursuant to this part. This part does not prohibit the boundaries of a business assessment district created pursuant to this part to overlap with a property assessment district created pursuant to this part. (d) The improvements, maintenance, and activities proposed for each year of operation of the district and the maximum cost thereof. If the improvements, maintenance, and activities proposed for each year of operation are the same, a description of the first year’s proposed improvements, maintenance, and activities and a statement that the same improvements, maintenance, a nd activities are proposed for subsequent years shall satisfy the requirements of this subdivision.
ATTACHMENT 1
102
(e) The total annual amount proposed to be expended for improvements, maintenance, or activities, and debt service in each year of operation of the district. If the assessment is levied on businesses, this amount may be estimated based upon the assessment rate. If the total annual amount proposed to be expended in each year of operation of the district is not significantly different, the amount propos ed to be expended in the initial year and a statement that a similar amount applies to subsequent years shall satisfy the requirements of this subdivision.
(f) The proposed source or sources of financing, including the proposed method and basis of levying the assessment in sufficient detail to allow each property or business owner to calculate the amount of the assessment to be levied against his or her property or business. The plan also shall state whether bonds will be issued to finance improvements.
(g) The time and manner of collecting the assessments.
(h) The specific number of years in which assessments will be levied. In a new district, the maximum number of years shall be five. Upon renewal, a district shall have a term not to exceed 10 years. Notwi thstanding these limitations, a district created pursuant to this part to finance capital improvements with bonds may levy assessments until the maximum maturity of the bonds. The management district plan may set forth specific increases in assessments for each year of operation of the district. (i) The proposed time for implementation and completion of the management district plan. (j) Any proposed rules and regulations to be applicable to the district. (k) (1) A list of the properties or businesses to be assessed, including the assessor’s parcel numbers for properties to be assessed, and a statement of the method or methods by which the expenses of a district will be imposed upon benefited real property or businesses, in proportion to the benefit received by the property or business, to defray the cost thereof. (2) In a property -based district, the proportionate special benefit derived by each identified parcel shall be determined exclusively in relationship to the entirety of the capital cost of a public improvement, the maintenance and operation expenses of a public improvement, or the cost of the activities. An assessment shall not be imposed on any parcel that exceeds the reasonable cost of the proportional special benefit conferred on that parcel. Only special benefits are assessable, and a property-based district shall separate the general benefits, if any, from the special benefits conferred on a parcel. Parcels within a property -based district that are owned or used by any city, public agency, the State of California, or the United States shall not be exempt from assessment unless the governmental entity can demonstrate by clear and convincing evidence that those publicly owned parcels in fact receive no special benefit. The value of any incidental, secondary, or collateral effects that arise from the improvements, maintenance, or activities of a property -based district and that benefit property or persons not assessed shall not be deducted from the entirety of the cost of any special benefit or affect the proportionate special benefit derived by each identified parcel. (l) In a property -based district, the total amount of all special benefits to be conferred upon the properties located within the property-based district.
(m) In a property-based district, the total amount of general benefits, if any. (n) In a property -based district, a detailed engineer’s report prepared by a registered professional engineer certified by the State of California supporting all assessments contemplated by the management district plan. (o) Any other item or matter required to be incorporated therein by the city council.
36623. Procedure to levy assessment
(a) If a city council proposes to levy a new or increased property assessment, the notice and protest and hearing procedure shall comply with Section 53753 of the Government Code. (b) If a city council proposes to levy a new or increased business assessment, the notice and protest and hearing procedure shall comply with Section 54954.6 of the Gover nment Code, except that notice shall be mailed to the owners of the businesses proposed to be assessed. A protest may be made orally or in writing by any interested person. Every written protest shall be filed with the clerk at or before the time fixed for the public hearing. The city council may waive any irregularity in the form or content of any written protest. A written protest may be withdrawn in writing at any time before the conclusion of the public hearing. Each written protest shall contain a desc ription of the business in which the person subscribing the protest is interested sufficient to identify the business and, if a person subscribing is not shown on the official records of the city as the owner of the business, the protest shall contain or be accompanied by written evidence that the person subscribing is the owner of the business or the authorized representative. A written protest that does not comply with this section shall not be counted in determining a majority protest. If written protest s are received from the owners or authorized representatives of businesses in the proposed district that will pay ATTACHMENT 1
103
50 percent or more of the assessments proposed to be levied and protests are not withdrawn so as to reduce the protests to less than 50 percen t, no further proceedings to levy the proposed assessment against such businesses, as contained in the resolution of intention, shall be taken for a period of one year from the date of the finding of a majority protest by the city council. (c) If a city co uncil proposes to conduct a single proceeding to levy both a new or increased property assessment and a new or increased business assessment, the notice and protest and hearing procedure for the property assessment shall comply with subdivision (a), and th e notice and protest and hearing procedure for the business assessment shall comply with subdivision (b). If a majority protest is received from either the property or business owners, that respective portion of the assessment shall not be levied. The rema ining portion of the assessment may be levied unless the improvement or other special benefit was proposed to be funded by assessing both property and business owners.
36624. Changes to proposed assessments
At the conclusion of the public hearing to establish the district, the city council may ado pt, revise, change, reduce, or modify the proposed assessment or the type or types of improvements, maintenance, and activities to be funded with the revenues from the assessments. Proposed assessments may only be revised by reducing any or all of them. At the public hearing, the city council may only make changes in, to, or from the boundaries of the proposed property and business improvement district that will exclude territory that will not benefit from the proposed improvements, maintenance, and activities. Any modifications, revisions, reductions, or changes to the proposed assessment district shall be reflected in the notice and map recorded pursuant to Section 36627.
36625. Resolution of formation
(a) If the city council, following the public hearing, decides to establish a proposed property and business improvement district, the city council shall adopt a resolution of formation that shall include, but is not limited to, all of the following:
(1) A brief description of the proposed improvements, maintenance, and activities, the amount of the proposed assessment, a statement as to whether the assessment will be levied on prope rty, businesses, or both within the district, a statement on whether bonds will be issued, and a description of the exterior boundaries of the proposed district, which may be made by reference to any plan or map that is on file with the clerk. The descriptions and statements need not be detailed and shall be sufficient if they enable an owner to generally identify the nature and extent of the improvements, maintenance, and activities and the location and extent of the proposed district. (2) The number, date of adoption, and title of the resolution of intention. (3) The time and place where the public hearing was held concerning the establishment of the district.
(4) A determination regarding any protests received. The city shall not establish the district or levy assessments if a majority protest was received.
(5) A statement that the properties, businesses, or properties and businesses in the district established by the resolution shall be subject to any amendments to this part. (6) A statement that the impr ovements, maintenance, and activities to be conferred on businesses and properties in the district will be funded by the levy of the assessments. The revenue from the levy of assessments within a district shall not be used to provide improvements, maintena nce, or activities outside the district or for any purpose other than the purposes specified in the resolution of intention, as modified by the city council at the hearing concerning establishment of the district.
Notwithstanding the foregoing, improvement s and activities that must be provided outside the district boundaries to create a special or specific benefit to the assessed parcels or businesses may be provided, but shall be limited to marketing or signage pointing to the district. (7) A finding that the property or businesses within the area of the property and business improvement district will be benefited by the improvements, maintenance, and activities funded by the proposed assessments, and, for a property -based district, that property within the district will receive a special benefit.
(8) In a property -based district, the total amount of all special benefits to be conferred on the properties within the property-based district.
(b) The adoption of the resolution of formation and, if required, rec ordation of the notice and map pursuant to Section 36627 shall constitute the levy of an assessment in each of the fiscal years referred to in the management district plan.
ATTACHMENT 1
104
36627. Notice and assessment diagram
Following adoption of the resolution establishing district assessments on properties pursuant to Section 36625, the clerk shall record a notice and an assessment diagram pursuant to Section 3114. No other provision of Division 4.5 (commencing with Section 3100) applies to an assessment district created pursuant to this part.
36628. Establishment of separate benefit zones within district; Categories of businesses
The city council may establish one or more separate benefit zones within the district based upon the degree of benefit derived fro m the improvements or activities to be provided within the benefit zone and may impose a different assessment within each benefit zone. If the assessment is to be levied on businesses, the city council may also define categories of businesses based upon the degree of benefit that each will derive from the improvements or activities to be provided within the district and may impose a different assessment or rate of assessment on each category of business, or on each category of business within each zone.
36628.5. Assessments on businesses or property owners
The city council may levy assessments on businesses or on property owners, or a combination of the two, pursuant to this part. The city council shall structure the assessments in whatever manner it determines corresponds with the distribution of benefits from the proposed improvements, maintenance, and activities, provided that any property- based assessment conforms with the requirements set forth in paragraph (2) of subdivision (k) of Section 36622.
36629. Provisions and procedures applicable to benefit zones and business categories
All provisions of this part applicable to the establishment, modification, or disestablishment of a property and business improvement district apply to the establishment, modification, or disestablishment of benefit zones or categories of business. The city council shall, to establish, modify, or disestablish a benefit zone or category of business, follow the procedure to establish, modify, or disestablish a property and business improvement district.
36630. Expiration of district; Creation of new district
If a property and business improvement district expires due to the time limit set pursuant to subdivision (h) of Section 36622, a new management district plan may be created and the district may be renewed pursuant to this part.
CHAPTER 3. Assessments
36631. Time and manner of collection of assessments; Delinquent payments
The collection of the assessments levied pursuant to this part shall be made at the time and in the manner set forth by the city council in the resolution levying the assessment. Assessments levied on real property may be collected at the same time and in the same manner as for the ad valorem property tax, and may provide for the same lien priority a nd penalties for delinquent payment. All delinquent payments for assessments levied pursuant to this part may be charged interest and penalties.
36632. Assessments to be based on estimated benefit; Classification of real property and businesses; Exclusion of residential and agricultural property
(a) The assessments levied on real property pursuant to this part shall be levied on th e basis of the estimated benefit to the real property within the property and business improvement district. The city council may classify properties for purposes of determining the benefit to property of the improvements and activities provided pursuant to this part.
(b) Assessments levied on businesses pursuant to this part shall be levied on the basis of the estimated benefit to the businesses within the property and business improvement district. The city council may classify businesses for purposes of determining the benefit to the businesses of the improvements and activities provided pursuant to this part.
ATTACHMENT 1
105
(c) Properties zoned solely for residential use, or that are zoned for agricultural use, are conclusively presumed not to benefit from the improvements and service funded through these assessments, and shall not be subject to any assessment pursuant to this part.
36633. Time for contesting validity of assessment
The validity of an assessment levied under this part shall not be contested in an action or proceeding unless the action or proceeding is commenced within 30 days after the resolution levying the assessment is adopted pursuant to Section 36625. An appeal from a final judgment in an action or proceeding shall be perfected within 30 days after the entry of judgment.
36634. Service contracts authorized to establish levels of city services
The city council may execute baseline service contracts that would establish levels of city services that would continue after a property and business improvement district has been formed.
36635. Request to modify management district plan
The owners’ association may, at any time, request that the city council modify the management district plan. Any modification of the management district plan shall be made pursuant to this chapter.
36636. Modification of plan by resolution after public hearing; Adoption of resolution of intention
(a) Upon the written request of the owners’ association, the city council may modify the management district plan after conducting one public hearing on the proposed modifications. The city council may modify the improvements and activities to be funded with the revenue derived from the levy of the assessments by adopting a resolution determining to make the modifications a fter holding a public hearing on the proposed modifications. If the modification includes the levy of a new or increased assessment, the city council shall comply with Section 36623. Notice of all other public hearings pursuant to this section shall comply with both of the following:
(1) The resolution of intention shall be published in a newspaper of general circulation in the city once at least seven days before the public hearing.
(2) A complete copy of the resolution of intention shall be mailed by first class mail, at least 10 days before the public hearing, to each business owner or property owner affected by the proposed modification.
(b) The city council shall adopt a resolution of intention which states the proposed modification prior to the public hearing required by this section. The public hearing shall be held not more than 90 days after the adoption of the resolution of intention.
36637. Reflection of modification in notices recorded and maps
Any subsequent modification of the resolution shall be reflected in subsequent notices and maps recorded pursuant to Division 4.5 (commencing with Section 3100), in a manner consistent with the provisions of Section 36627.
CHAPTER 3.5. Financing
36640. Bonds authorized; Procedure; Restriction on reduction or termination of assessments
(a)The city council may, by resolution, determine and declare that bonds shall be issued to finance the estimated cost of some or all of the proposed improvements described in the resolution of formation adopted pursuant to Section 36625, if the resolution of formation adopted pursuant to that section provides for the issuance of bonds, under the Improvement Bond Act of 1915 (Division 10 (commencing with Section 8500)) or in conjunction with Marks -Roos Local Bond Pooling Act of 1985 (Article 4 (commencing with Section 6584) of Chapter 5 of Division 7 of Title 1 of the Government Code). E ither act, as the case may be, shall govern the proceedings relating to the issuance of bonds, although proceedings under the Bond Act of 1915 may be modified by the city council as necessary to accommodate assessments levied upon business pursuant to this part.
ATTACHMENT 1
106
(b) The resolution adopted pursuant to subdivision (a) shall generally describe the proposed improvements specified in the resolution of formation adopted pursuant to Section 36625, set forth the estimated cost of those improvements, specify the number of annual installments and the fiscal years during which they are to be collected. The amount of debt service to retire the bonds shall not exceed the amount of revenue estimated to be raised from assessments over 30 years.
(c) Notwithstanding any other provision of this part, assessments levied to pay the principal and interest on any bond issued pursuant to this section shall not be reduced or terminated if doing so would interfere with the timely retirement of the debt.
CHAPTER 4. Governance
36650. Report by owners’ association; Approval or modification by city council
(a) The owners’ association shall cause to be prepared a report for each fiscal year, except the first year, for which assessments are to be levied and collected to pay the costs of the improvements, maintenance, and activities described in the report. The owners’ association’s first report shall be due after the first year of operation of the district. The report may propose changes, including, but not limited to, the boundaries of the property and business improvement district or any benefit zones within the district, the basis and method of levying the asses sments, and any changes in the classification of property, including any categories of business, if a classification is used.
(b) The report shall be filed with the clerk and shall refer to the property and business improvement district by name, specify the fiscal year to which the report applies, and, with respect to that fiscal year, shall contain all of the following information:
(1) Any proposed changes in the boundaries of the property and business improvement district or in any benefit zones or classification of property or businesses within the district. (2) The improvements, maintenance, and activities to be provided for that fiscal year. (3) An estimate of the cost of providing the improvements, maintenance, and activities for that fiscal year.
(4) The method and basis of levying the assessment in sufficient detail to allow each real property or business owner, as appropriate, to estimate the amount of the assessment to be levied against his or her property or business for that fiscal year.
(5) The estimated amount of any surplus or deficit revenues to be carried over from a previous fiscal year.
(6) The estimated amount of any contributions to be made from sources other than assessments levied pursuant to this part.
(c) The city council may approve the report as filed by the owners’ association or may modify any particular contained in the report and approve it as modified. Any modification shall be made pursuant to Sections 36635 and 36636.
The city council shall not approve a change in the basis and method of levying assessments that would impair an authorized or executed contract to be paid from the revenues derived from the levy of assessments, including any commitment to pay principal and interest on any bonds issued on behalf of the dist rict.
36651. Designation of owners’ association to provide improvements, maintenance, and activities
The management district p lan may, but is not required to, state that an owners’ association will provide the improvements, maintenance, and activities described in the management district plan. If the management district plan designates an owners’ association, the city shall contract with the designated nonprofit corporation to provide services.
CHAPTER 5. Renewal
36660. Renewal of district; Transfer or refund of remaining revenues; District term limit
(a) Any district previously established whose term has expired, or will expire, may be renewed by following the procedures for establishment as provided in this chapter. (b) Upon renewal, any remaining revenues derived from the levy of assessments, or any revenues derived from the sale of assets acquired with the revenues, shall be transferred to the renewed district. If the renewed district includes additional parcels or businesses not included in the prior district, the remaining revenues ATTACHMENT 1
107
shall be spent to benefit only the parcels or businesse s in the prior district. If the renewed district does not include parcels or businesses included in the prior district, the remaining revenues attributable to these parcels shall be refunded to the owners of these parcels or businesses. (c) Upon renewal, a district shall have a term not to exceed 10 years, or, if the district is authorized to issue bonds, until the maximum maturity of those bonds. There is no requirement that the boundaries, assessments, improvements, or activities of a renewed district be the same as the original or prior district.
CHAPTER 6. Disestablishment
36670. Circumstances permitting disestablishment of district; Procedure
(a) Any district established or extended pursuant to the provisions of this part, where there is no indebtedness, outstanding and unpaid, incurred to accomplish any of the purposes of the district, may be disestablished by resolution by the city council in either of the following circumstances:
(1) If the city council finds there has been misappropriation of funds, malfeasance, or a violation of law in connection with the management of the district, it shall notice a hearing on disestablishment. (2) During the operation of the district, there shall be a 30 -day period each year in which assessees may request disestablishment of the district. The first such period shall begin one year after the date of establishment of the dist rict and shall continue for 30 days. The next such 30 -day period shall begin two years after the date of the establishment of the district. Each successive year of operation of the district shall have such a 30-day period. Upon the written petition of the owners or authorized representatives of real property or the owners or authorized representatives of businesses in the district who pay 50 percent or more of the assessments levied, the city council shall pass a resolution of intention to disestablish the district. The city council shall notice a hearing on disestablishment. (b) The city council shall adopt a resolution of intention to disestablish the district prior to the public hearing required by this section. The resolution shall state the reason for the disestablishment, shall state the time and place of the public hearing, and shall contain a proposal to dispose of any assets acquired with the revenues of the assessments levied within the property and business improvement district. The notice of the h earing on disestablishment required by this section shall be given by mail to the property owner of each parcel or to the owner of each business subject to assessment in the district, as appropriate. The city shall conduct the public hearing not less than 30 days after mailing the notice to the property or business owners. The public hearing shall be held not more than 60 days after the adoption of the resolution of intention.
36671. Refund of remaining revenues upon disestablishment or expiration without renewal of district; Calculation of refund; Use of outstanding revenue collected after disestablishment of district
(a) Upon the disestablishment or expiration without renewal of a district, any remaining revenues, after all outstanding debts are paid, derived from the levy of assessments, or derived from the sale of assets acquired with the revenues, or from bond reserve or construction funds, shall be refunded to the owners of the property or businesses then located and operating within the district in which assessments were levied by applying the same method and basis that was used to calculate the assessments levied in the fiscal year in which the district is disestablished or expires. All outstanding assessment revenue collected after disestablishment shall be spent on improvements and activities specified in the management district plan. (b) If the disestablishment occurs before an assessment is levied for the fiscal year, the method and basis that was used to calculate the assessments levied in the immediate prior fiscal year shall be used to calculate the amount of any refund.
ATTACHMENT 1
108
APPENDIX 2 – ASSESSED BUSINESSES
HOTEL/MOTEL NAME Address City Zip
Best Western Sycamore Inn 803 Camino Ramon Danville 94526 Aloft 4075 Grafton St. Dublin 94568
Extended Stay America 4500 Dublin Blvd Dublin 94568
Holiday Inn 6680 Regional St Dublin 94568
Hyatt Place 4950 Hacienda Dr Dublin 94568
La Quinta Inn & Suites 6275 Dublin Blvd Dublin 94568
America's Best Value Inn 1421 First St Livermore 94550
Del Valle Lodge 3979 First St Livermore 94551
Extended Stay America 2380 Nissen Dr Livermore 94550
Motel 6 4673 Lassen Rd Livermore 94550
Sands Motel 3787 First St Livermore 94551
Springtown Inn 933 Bluebell Dr Livermore 94550
Studio Inn 1321 Portola Ave Livermore 94551
Home2 Suites 2625 Constitution Dr. Livermore 94551
Residence Inn 5200 Wolf House Drive Livermore 94588
Best Western Plus Vineyard Inn 7600 Southfront Rd Livermore 94551 Courtyard by Marriott 2929 Constitution Dr Livermore 94551 The Good Hotel 720 Las Flores Rd Livermore 94551
Hampton Inn 2850 Constitution Dr Livermore 94551
Hawthorn Suites by Wyndham 1700 N. Livermore Ave Livermore 94551 Hilton Garden Inn 2801 Constitution Dr Livermore 94551 Holiday Inn Express Hotel & Suites 3000 Constitution Dr Livermore 94551 Homewood Suites by Hilton 5400 Wolf House Dr. Livermore 94551 La Quinta Inn 7700 Southfront Rd Livermore 94551
Purple Orchid Wine Country Resort & Spa 4549 Cross Rd Livermore 94550 Quality Inn & Suites 5959 Preston Ave Livermore 94551
SenS Extended-Stay Residence Inn 1000 Airway Blvd Livermore 94551 Best Western Pleasanton Inn 5375 Owens Ct Pleasanton 94588 Extended Stay America Deluxe 4555 Chabot Dr Pleasanton 94588 Motel 6 5102 Hopyard Road Pleasanton 94588
The Rose Hotel 807 Main St Pleasanton 94566
Tri-Valley Inn & Suites 2025 Santa Rita Rd Pleasanton 94566 Courtyard by Marriott 5059 Hopyard Rd Pleasanton 94588 Doubletree by Hilton Pleasanton at the Club 7050 Johnson Dr Pleasanton 94588 Four Points by Sheraton 5115 Hopyard Rd Pleasanton 94588 Hyatt House 4545 Chabot Dr Pleasanton 94588
Larkspur Landing Hotel 5535 Johnson Dr Pleasanton 94588 Marriott Pleasanton 11950 Dublin Canyon Rd Pleasanton 94588 Residence Inn by Marriott 11920 Dublin Canyon Rd Pleasanton 94588 AC Marriott 5990 Stoneridge Mall Rd Pleasanton 94588
ATTACHMENT 1
109
ATTACHMENT 2
110
ATTACHMENT 2
111
ATTACHMENT 2
112
RESOLUTION NO. ________
IN THE CITY COUNCIL OF THE CITY OF LIVERMORE, CALIFORNIA
A RESOLUTION GRANTING CONSENT TO THE CITY OF
PLEASANTON TO RENEW THE
TRI-VALLEY TOURISM MARKETING DISTRICT (TVTMD)
As the lead jurisdiction for renewing the TVTMD, the City of Pleasanton has commenced the renewal process for the Tri-Valley Tourism Marketing District (TVTMD), a special benefit district, pursuant to the Property and Business Improvement District Law of 1994, Streets and Highways Code section 36600, et seq., to promote tourism as well as the lodging businesses in the Tri-Valley. That entity currently operates under the name Visit Tri-Valley (VTV).
In 2006, Tri-Valley Tourism Marketing District was formed for a five-year term and renewed in 2010, and again in 2015 for a seven (7) year term to expire on June 30, 2022. Visit Tri-Valley and the Tri-Valley area lodging businesses have requested the City of Pleasanton to renew the TVTMD for a ten (10) year term. The renewal is proposed to begin July 1, 2022, or as soon as possible thereafter, and end ten (10) years from its start date.
The TVTMD includes the cities of Pleasanton, Livermore, and Dublin, and the Town of Danville, and identified portions of unincorporated areas of Alameda and Contra Costa Counties as shown on the map attached to the City of Pleasanton City Council Resolution No. 22-1267.
As required by Streets and Highways Code section 36620.5, the City of Pleasanton has requested consent to renew the Tri-Valley Tourism Marketing District (TVTMD) in the City of Livermore with adoption of Pleasanton City Council Resolution No. 22-1267.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Livermore consents to the City of Pleasanton renewing the Tri-Valley Tourism Marketing District for ten years, which shall include the City of Livermore, at a rate of three dollars and twenty-five cents ($3.25) per room per night for the first year, and no more than four dollars ($4.00) per room per night, during the ten-year renewal period. The City of Livermore will continue to receive 1% of the District assessment fees generated by Livermore hotels. These funds will be used to offset ancillary administrative costs. 113
RESOLUTION NO. ________
On motion of Council Member ______________________, seconded by Council Member ______________________, the foregoing resolution was passed and adopted on February 28, 2022, by the following vote:
AYES: COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
ABSTAIN: COUNCIL MEMBERS:
ATTEST: APPROVED AS TO FORM:
_____________________________ /s/ Kelly J. Trujillo
Marie Weber Kelly J. Trujillo
City Clerk Assistant City Attorney
114
CITY COUNCIL STAFF REPORT
ITEM NO. 5.6
DATE:
February 28, 2022
TO:
Honorable Mayor and City Council
FROM:
Marie Weber, Acting Administrative Services Director
SUBJECT:
Resolution accepting Other Post Employment Benefits (OPEB) 2020 Valuation Report and updates to the OPEB Policy
RECOMMENDED ACTION
Staff recommends that the City Council adopt a resolution in accordance with the City’s OPEB Policy accepting the June 30, 2020, OPEB Actuarial Valuation report and approving updates to the OPEB Policy.
SUMMARY
At the June 22, 2015, City Council meeting Resolution 2015-089 was adopted approving the City’s Other Post Employment Benefit (OPEB) Policy. The purpose of this policy is to establish practices that promote transparency, ensure appropriate funding, and communicate the investment philosophy for managing the City’s OPEB obligation. In accordance with the policy, staff is presenting the City’s most recent actuarial valuation report for discussion and acceptance, and recommending updates to the OPEB Policy to bring it current with financial reporting requirements.
DISCUSSION
In 2004, Governmental Accounting Standards Board (GASB) Statement 45 was issued to provide more complete, reliable, and decision-useful financial reporting regarding the costs and financial obligations that governments incur when they provide post employment benefits other than pensions as part of the compensation for services rendered by their employees. Post employment healthcare benefits, the most common form of OPEB, are a significant financial commitment for the City of Livermore.
Prior to Statement 45, government typically followed a “pay-as-you-go” accounting approach in which the cost of benefits is not reported until after employees retire. However, this approach only revealed a limited amount of data and failed to account for costs and obligations incurred as governments receive 115
employee services each year for which they have promised future benefit payments in exchange.
The City of Livermore’s primary financial objective is to maintain the fiscal stability of the community.
Properly monitoring, managing, and funding the City’s OPEB obligation is critical to achieving this objective. As a result, the City Council adopted Resolution 2015-089 on June 22, 2015, approving the City’s Other Post Employment Benefit (OPEB) Policy. The purpose of this policy is to establish practices that promote transparency, ensure appropriate funding, and communicate the investment philosophy for managing the City’s OPEB obligation. Since the adoption of the policy, the City has made changes to the plan, changed the investment strategy, and has been fully funding the ARC/ADC each year. As a result, the City's Unfunded Actuarial Accrued Liability (UAAL) has decreased from a high in 2012 of $101.8 million to its 2020 level of $43.7 million and the funded status has increased from its 2012 level of 4.3% to its 2020 level of 42.9%.
In 2015, GASB Statement 75 was issued to replace the previous requirements set forth in GASB Statement 45 to update terminology and provide additional guidelines for both financial reporting and footnote disclosures. GASB 75 significantly altered the measurement and reporting standards that were previously required for OPEB plans under GASB 45. The most notable change was the reflection of the OPEB liability on the balance sheet and adding the annual OPEB expense on the income statement.
Under GASB 45, OPEB related disclosures were reported in the notes to financial statements.
Movement of these items from the notes to both the balance sheet and income statement increased focus on the OPEB liability, annual expense and the deferred inflows and outflows.
While developing GASB 75, the GASB recognized that the Annual Required Contribution (ARC) under GASB 45 was not ideal for plan funding purposes. Consequently, the ARC is no longer used for plan funding. It has been replaced with the Actuarially Determined Contribution (ADC) under GASB 75. The ADC is calculated by the plan actuary. It must be reasonable and based on actuarial principles. It should recognize benefits earned during the present fiscal year and employ reasonable amortization periods for recognition of plan changes, assumption changes and gains or losses associated demographic and investment experience.
Other changes in terminology introduced with GASB 75, includes the following:
Deferred Inflows and Outflows. These are amortization amounts based on differences in demographic experience, assumption changes and variations between actual and expected investment return.
Staff reviewed the existing OPEB policy and proposed several changes related to terminology to make it consistent with current accounting standards as outlined in GASB Statement 75. The changes can be seen in the redline version of the proposed policy, attached.
In accordance with the City’s OPEB Policy, the City had its bi-annual actuarial valuation performed in the fall of 2021. The final report, dated December 2, 2021, is now being presented to Council for discussion and acceptance.
The major highlights of the June 30, 2020, Actuarial Valuation report include:
1 .
A reduction of Unfunded Liability from $48.2 million to $43.7 million 2 .
A reduction of the Actuarial Determined Contribution (ADC) from $5.0 million to $4.7 million 4 .
A change in the Discount Rate from 6.5% to 6.25%
5 .
An increase in Funded Ratio from 34.8% to 42.9%
116
The City’s Retiree Healthcare Trust Fund currently utilizes an Internal Revenue Code (IRC) Section 115 Irrevocable Exclusive Benefit Trust administered by Public Agency Retirement Services (PARS) with the investments managed by HighMark Capital Management, and held in trust with USBank. PARS, through HighMark Capital Management, offers five different investment strategies which are summarized on slide 12 of the actuarial report. The City currently utilizes the “Capital Appreciation” fund option, which results in an actuarial discount rate of 6.25% as presented on slide 13 of the actuarial report.
The primary goal of the Capital Appreciation strategy is growth of principal. The major portion of the trust’s assets will be invested in equity securities and, appropriately, market fluctuations are expected.
Since funds currently deposited into the Retiree Healthcare Trust Fund are not anticipated to be used for more than 20 years, this investment strategy seeks to maximize long term investment returns with less concern for short term volatility. As time passes, and the need to use the funds deposited in the Retiree Healthcare Trust Fund grows nearer, the investment strategy should gradually be altered to value short term stability, providing a consistent level of inflation-protected income instead of growth.
FISCAL AND ADMINISTRATIVE IMPACTS
Total cost of $22,000 for preparation of the valuation report is budgeted under the General Fund for FY 2021-22. There is no direct fiscal or administrative impact associated with accepting the OPEB Actuarial Valuation Report and updating the OPEB Policy.
ATTACHMENTS
1. OPEB Policy Red Line
2. Resolution
3. Exhibit A - OPEB Actuarial Valuation June 30, 2020
4. Exhibit B - OPEB Policy
Prepared by: David
Doyle
Accounting Supervisor
Approved by:
____________________________________
Marc Roberts
City Manager
Fiscal Review by:
____________________________________
Bhavna Chaudhary
City Treasurer/Finance Manager
117
OPEB POLICY
Adopted June 22,
2015February 28, 2022
Resolution No 2015-xx2022-
XX
Prepared By:
Administrative Services Department
ATTACHMENT 1
118
2 City of Livermore
OPEB POLICY
OBJECTIVE
The City of Livermore’s primary financial objective is to maintain the fiscal stability of the community.
Properly monitoring, managing, and funding the C ity’s Other Post Employment Benefits (OPEB) obligationliability, commonly known as retiree medical benefits, is critical to achieving this objective.
PURPOSE
The purpose of this policy is to establish practices that promote transparency, ensure appropriate funding, and communicate the investment philosophy for managing the City’s OPEB liabilityobligation.
PRACTICES
Transparency. Prior to Governmental Accounting Standards Board (GASB) Statement 45 released in 2004, government typically followed a “pay-as-you-go” accounting approach in which the cost of benefits was not reported until after employees retire which h revealed a limited amount of data and failed to account for costs and obligations incurred as governments receive employee services each year for which they have promised future benefit payments in exchange. GASB Statement 75 was released in 2015 and replaced GASB 45 and provided new guidance and terminology for reporting and disclosure requirements for OPEB plans. The important change in terminology was changing the Annual Required Contribution (ARC) to the Actuarial Determined Contribution (ADC). The change requires the calculation to be reasonable and based on actuarial principles.
GASB Statement 475 requires government to report certain information regarding the costs and value of the future obligation Net OPEB Liability (NOL) and related deferred inflows and outflows as part of its annual financial reporting. This requires the City to show the full NOL on the Statement of Net Position and report OPEB expenses on the Statement of Revenues and Expenditures. Additional footnote disclosures are also required and For the City of Livermore this is presented accordinglys a s a footnote in the Comprehensive Annual Comprehensive Financial Report (CACFR). To comply with GASB Statement 745 reporting requirement, the City obtains an Actuarial Valuation Report on a bi- annual basis. This detailed report explains the factors and assumptions that are used in calculating the City’s OPEB OPEB lliability. This includes items such as benefit summary, participant statistics, retirement, mortality, medical trends, and funding policy. It explains the actuarial methods utilized in preparing the report. It provides important information regarding the assets set aside in trust to meet future obligations. It calculates the prudent annual funding level, called Annual Required Contribution (ARC) Actuarial Determined Contribution (ADC), as well as the Actuarial Accrued Liability (AAL), Actuarial Value of Assets (AVA), Unfunded Actuarial Accrued Liability (UALL), and other data necessary to manage this liabilityobligation.
Additionally, each bi-annual Actuarial Valuation Report will be presented to Council in open session for discussion and acceptance to communicate the current funded status of the City’s OPEB obligationliability.
ATTACHMENT 1
119
3 Funding Level. Not making full ADCARC payments each year adversely impacts the City’s long- term financial stability and threatens its future ability to offer programs and adequate service levels.
The City will make full ADCARC payments as prescribed by the bi-annual Actuarial Valuation Report unless the City experiences severe economic di stress. Economic Stress may include, but is not limited to protracted recessionary periods, Stat e raids on local resources, or other impactful unforeseen events which greatly diminish the financ ial ability of the City to deliver core services.
Economic distress is defined further in the City’s Fund Balance Policy and may be determined by one of the following triggers:
• Consumer Price Index exceeds the index for the previous year by more than five percent for two consecutive years
• Local unemployment rate exceeds nine percent for three consecutive quarters
• The rate of inflation exceeds the growth in property tax revenue by five percent for two consecutive fiscal years
• Significant State take-away of revenue tota ling more than five percent of total revenue in a given fiscal year
• Sales Tax revenue falls by ten percent over of the previous quarter for at least three consecutive quarters
• Revenue forecasts for the next fiscal year estimates revenue losses of more than seven percent
Once the City Council or their designee (City Manager) has determined that it is necessary to underfund the ADCARC due to economic stress, a resolution shall be adopted at a City Council meeting accompanied by a formal report explaining the nature of the fiscal crisis. Underfunding this obligation should be considered a short- term strategy with the goal of returning to paying the full ADCARC as soon as possible.
Retiree Healthcare Trust Investment Strategy. The funding that is set aside annually into the City’s Retiree Healthcare Trust Fund is not governed by the City’s adopted investment policy. Since the investment funding is not intended to be used to meet current obligations, restrictions that are important for the City’s treasury do not apply to the money placed in this trust. Resources deposited into the Retiree Healthcare Trust Fund are not anti cipated to be utilized until the year 2038, and therefore investment principles of safety and liquidity relative to the City’s treasury are not necessarily applicable.
A longer investment timeline dictates a strategy of accepting more short - term volatility risk in order to take advantage of long - term investment returns. As the investment timeline shortens, it is important to shift away strategies that maximize re turns to ensure adequate cash flows are available for retiree health benefits.
The Retiree Healthcare Trust Fund will invest consis tently with all applicable laws and regulations.
The investment portfolio will be managed by a pr ofessional fund manager, under the direction of the Administrative Services Director in conformance with City goals and policies. The investment portfolio will consist of an a ppropriate mix of cash, fixed income instruments, and equities which provide a prudent balance between short -term volatility risk and long - term investment return risk as determined by the investment timeline.
ATTACHMENT 1
120
4 Since funds currently deposited into the Retiree Healthcare Trust Fund are not anticipated to be used for more than 20 years, the current investment stra tegy will appropriately seek to maximize long term investment returns with less concern for short term volatility.
Administration. Future policies developed with the goal of managing healthcare obligation should be coordinated and consistent with the purpose and objectives of the City’s OPEB policy.
IMPLEMENTATION
Upon adoption of this policy, the City Council aut horizes the Administrative Services Director or designee to establish standards and procedures to implement the City’s OPEB policy. The City Council will review and approve this policy via resolution at a minimum of every four years to ensure it meets the current and future needs of the City.
ATTACHMENT 1
121
RESOLUTION NO. _______
IN THE CITY COUNCIL OF THE CITY OF LIVERMORE, CALIFORNIA A RESOLUTION ACCEPTING THE RETIREE HEALTHCARE PLAN JUNE 30, 2020
ACTUARIAL VALUATION AND APPROVING UPDATES TO THE OTHER
POST EMPLOYMENT BENEFITS (OPEB) POLICY
At its meeting on February 28, 2022, the June 30, 2020 OPEB Actuarial Valuation report was presented to the City Council in accordance with Livermore’s OPEB Policy and the OPEB Policy was updated for terminology changes.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Livermore receives and accepts the Retiree Healthcare Plan June 30, 2020 Actuarial Valuation report, attached hereto as Exhibit A; and approves the OPEB Policy attached hereto as Exhibit B.
On motion of Council Member _______________________, seconded by Council Member _________________________, the foregoing resolution was passed and adopted on February 28, 2022, by the following vote:
AYES: COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
ABSTAIN: COUNCIL MEMBERS:
ATTEST: APPROVED AS TO FORM:
______________________________ /s/ Jason R. Alcala
Marie Weber Jason R. Alcala
City Clerk City Attorney
Exhibit A - OPEB June 30, 2020 Actuarial Valuation
Exhibit B - OPEB Policy
122
CITY OF LIVERMORE
RETIREE HEALTHCARE PLAN
June 30, 2020 Actuarial Valuation
Plan Funding 2021/22 and 2022/23
Doug Pryor, Vice President
Bianca Lin, Actuary
Daniel Park, Actuarial Analyst
Michelle Shen, Actuarial Analyst
Bartel Associates, LLC
December 2, 2021
O:\Clients\City of Livermore\Projects\OPEB\6-30-20\Report\BA LivermoreCi 21-12-02 OPEB 20-06-30 Valuation Results.docx
CONTENTS
Topic Page
Benefit Summary 1
Participant Statistics 7
Actuarial Assumptions Highlights 13
Actuarial Methods 16
Assets 17
Results 21
Actuarial Certification 36
Exhibits
Premiums E- 1
Data Summary
(includes benefitting and non-benefitting participants) E- 5
Actuarial Assumptions E-14
Definitions E-20
EXHIBIT A
123
December 2, 2021 1
BENEFIT SUMMARY
Executive
Management
Management &
Confidential ALE LPOA
Police
Management
Hired Before 8/1/2014 2/1/2006 4/1/2007 2/1/2007 9/1/2004 Eligibility Retire directly from the City with 10 years CalPERS service (15 years for Police Safety) and a minimum of 5 years City service, or
Industrial disability for Police safety
Benefit1 City reimburses up to a percentage of the minimum of Kaiser Plan A 2-party active premium (early retiree premium for Police Lieutenants retired after 9/1/04 and LPOA) and a cap that varies by bargaining group
City will reimburse Medicare A & B if required for medical coverage City Council no OPEB benefits
Reimbursement percentage based on bargaining group and CalPERS service:
CalPERS
Service
Reimb
%
10 75%
15 80%
20 90%
25+ 100%
CalPERS
Service
Reimb
%2
10 70%
15 80%
20 90%
25+ 100%
CalPERS
Service
Reimb
%
15 75%
20 85%
25+ 100%
1 Retirees < BU specific date receive City reimbursement up to $200/month and do not participate in the City’s healthcare program, except retirees allowed to enroll due to closure of OE#3. 2 Reimbursement %’s are th e same as LPOA for MEAN retirees with DOR < 1/1/06.
December 2, 2021 2
BENEFIT SUMMARY
Executive
Management
Management &
Confidential ALE LPOA
Police
Management
Cap DOR < 10/9/00:
$200 benefit
Original DOH
< 1/
10/05:
No cap
DOH > 1/10/05
Medical Cap
DOH > 8/1/143:
No OPEB
benefits, City
contri
butes 4%
of base pay to
RHSA
DOR < 9/25/00:
$200 benefit
DOH < 2/1/06 &
DOR < 7/1/15:
No cap
DOH < 2/1/06 &
DOR > 7/1/15:
Medi
cal Cap
DOH > 2/1/063:
No OPEB
benefits,
City cont
ributes
4% of base pay
to RHS
A
DOR < 10/3/03:
$200 benefit
DOR < 1/1/06:
No cap
DOH < 4/1/07:
Medi
cal Cap4
DOH > 4/1/07:
No OPEB
benefits, City
contri
butes 4%
of base pay to
RHSA
DOR < 2/1/02:
$200 benefit
DOH < 2/1/075:
Medi
cal cap
DOH > 2/1/07:
No OPEB
benefits, City
contri
butes 5%
of base pay to
RHSA, EE
contri
butes 1%
of base pay to
RHSA
DOR < 4/7/03:
$200 benefit
Promoted <
9/1/
04: No cap
Promoted >
9/1/04 and
eligible for
previ
ous benefit:
Medical Cap
DOH > 9/1/04
No OPEB
benefits, City
contri
butes 5%
of base pay to
RHSA
Medical Cap $1,950/month, no increases expected in the future 3 Employees promoted after this date from other City bargaining units retain previous benefit if eligible. 4 ALE Medical Cap varies by retirement da te. More details provided on slide 6. 5 LPOA DOH < 2/1/07 required to make 1% employee contribution into RHSA.
EXHIBIT A
124
December 2, 2021 3
BENEFIT SUMMARY
Executive
Management
Management &
Confidential ALE LPOA
Police
Management
Surviving
Spouse
Benefit
50% of reimbursement amount in effect at retiree’s death Cap not reduced
Retiree
Health
Savings
Account
(RHSA)6
New employees hired after effective dates which vary by unit Current employees were allowed to opt out of the retiree healthcare program and join the RHSA during a “one-time only” period
Defined contribution program
No OPEB liability
Other No dental, vision or life
Pay-As-
You-Go
Fiscal Year Ending Cash Implied Subsidy
2020 $ 3,363,911 n/a
2019 3,301,582 n/a
2018 2,845,307
$ 264,000
2017 2,621,793 218,000
2016 2,126,758 436,012
6 Currently 204 employees par ticipate in the RHSA program.
December 2, 2021 4
BENEFIT SUMMARY
Executive
Management
Management &
Confidential ALE LPOA
Police
Management
Implied
Subsidy
Definition:
City payment of active premiums that are used to subsidize retiree costs City pays $1,950 to active employee Cafeteria plan:
Full $1,950 paid to employee regardless of medical plan election City is committed to never changing the $1,950
Employee has discretion on how to use the $1,950
Implied Subsidy exists, but is paid by active employees, not City June 30, 2018 and later valuations do not include Implied Subsidy for City
EXHIBIT A
125
December 2, 2021 5
BENEFIT SUMMARY
Maximum Reimbursement for Groups with Medical Cap
Maximum Reimbursement =
Reimb % x Minimum of 1 and 2: 2020 2021
1. Kaiser Plan A 2-Party
Active Rate for all except Police
Management Retired > 9/1/04 & LPOA $1,920.64 $2,121.24
Early Retiree Rate for Police
Management Retired > 9/1/04 & LPOA $2,147.68 $2,371.81
2. Medical Cap7 (excl. dental):
Executive Management $1,950 – $91.70 = 1,858.30 $1,950 – $83.80 = 1,866.20 Management & Confidential $1,950 $1,950
ALE ( 1/1/06 < DOR < 11/9/14) $2,070 – $91.70 = 1,978.30 $2,142 – $83.80 = 2,058.20 ALE (11/10/14 < DOR < 12/31/16)8 $1,978 $2,050
ALE ( DOR > 1/1/17) $1,950 $1,950
LPOA $1,950 – $91.70 = 1,858.30 $1,950 – $83.80 = 1,866.20 Police Management $1,950 – $91.70 = 1,858.30 $1,950 – $83.80 = 1,866.20
7 Applies only to certain reti rees based on hire date. Medical Cap increases each year for ALE employees retired before 1/1/17 by the minimum of (a) increase in Health Net California EOA family premium, and (b) 1% of budgeted monthly base salary.
The Medical Cap for all other retirees is fixed to be $1,950. No increases are expected in the future. 8 Does not exclude dental.
December 2, 2021 6
BENEFIT SUMMARY
Projected Maximum Reimbursement Increase Rates
Groups with Medical Cap
Year
Executive
Mgmt
Mgmt &
Conf
ALE
(1/1/06 <
DOR <
11/9/14)
(1%)
ALE
(11/10/14 <
DOR <
12/31/16)
(1%)
ALE
(DOR >
1/1/17)
LPOA
Police
Mgmt
2018 Actual 2018 Maximum Reimbursement
2019 Actual 2019 Maximum Reimbursement
2020 (0.1)% 0.0% 3.6% 3.8% 0.0% (0.1)% (0.1)%
2021 (0.1)% 0.0% 3.6% 3.8% 0.0% (0.1)% (0.1)%
2022 (0.1)% 0.0% 3.6% 3.7% 0.0% (0.1)% (0.1)%
2025 (0.2)% 0.0% 3.5% 3.7% 0.0% (0.2)% (0.2)%
2030 (0.2)% 0.0% 3.4% 3.5% 0.0% (0.2)% (0.2)%
2035 (0.2)% 0.0% 3.4% 3.4% 0.0% (0.2)% (0.2)%
2040 (0.2)% 0.0% 3.4% 3.4% 0.0% (0.2)% (0.2)%
EXHIBIT A
126
December 2, 2021 7
PARTICIPANT STATISTICS
June 30, 2020
9 Salary provided as of July 1, 2020 for all (non-RHSA and non-benefitting RHSA) employees Miscellaneous Safety Total
Actives:
Non-RHSA 157 42 199
RHSA (no OPEB benefit) 152 52 204
Total Count 309 94 403
Average Age 48.6 39.9 46.6
Average City Service 12.2 11.2 12.0
Avg. CalPERS Service 15.3 14.3 15.1
Average Salary9 $92,000 $134,700 $101,900
Total Salary (000’s) 28,417 12,662 41,079
Retirees:
Count 240 81 321
Average Age 68.9 64.0 67.7
Average Retirement Age
Service Retirement 58.5 53.0 57.6
Disability Retirement 46.2 47.4 47.3
Total 58.3 50.8 56.5
December 2, 2021 8
PARTICIPANT STATISTICS
June 30, 2018
10 Salary provided as of July 1, 2018 for all (non-RHSA and non-benefitting RHSA) employees.
Miscellaneous Safety Total
Actives:
Non-RHSA 184 48 232
RHSA 123 41 164
Total Count 307 89 396
Average Age 48.3 40.7 46.7
Average City Service 12.3 11.5 12.1
Avg. CalPERS Service 14.6 13.9 14.5
Average Salary10 $93,700 $137,100 $103,400
Total Salary (000’s) 28,755 12,199 40,953
Retirees:
Count 222 74 296
Average Age 68.3 63.3 67.1
Average Retirement Age
Service Retirement 58.6 53.4 57.8
Disability Retirement 46.2 47.1 46.9
Total 58.3 50.9 56.5
EXHIBIT A
127
December 2, 2021 9
PARTICIPANT STATISTICS
Participant Statistics
June 30, 2020
11 Salary provided as of July 1, 2020 for all (non-RHSA and non-benefitting RHSA) employees Exec
Mgmt
Mid
Mgmt Conf. ALE LPOA
Police
Mgmt Fire
City
Council Total
A c t i v e s :
Non-RHSA 6 35 4 113 35 6 n/a n/a 199
RHSA 2 32 5 112 52 1 n/a n/a 204
Total Count 8 67 9 225 87 7 n/a n/a 403
Average Age 52.3 50.4 46.6 48.1 39.1 47.7 n/a n/a 46.6 Avg. City Svc. 12.8 12.7 16.0 11.9 10.6 18.9 n/a n/a 12.0 Avg. CalPERS Svc. 19.9 17.2 19.0 14.6 13.4 23.4 n/a n/a 15.1 Average Salary11 $216,600 $127,300 $81,200 $78,200 $127,500 $201,300 n/a n/a $101,900 Total Salary (000’s) 1,732 8,528 730 17,587 11,092 1,409 n/a n/a 41,079 Retirees:
Count 17 61 9 150 54 13 9 8 321
Average Age 70.8 68.44 72.07 68.5 60.83 65.05 79.35 72.72 67.69 Average Ret. Age
Service 58.2 58.2 59.3 58.6 53.1 52.7 51.8 57.6 57.6
Disability n/a 50.0 n/a 46.2 46.7 53.0 51.6 n/a 47.3
All Retirements 58.2 58.0 59.3 58.2 50.0 52.8 51.8 57.6 56.5
December 2, 2021 10
PARTICIPANT STATISTICS
Participant Statistics
June 30, 2018
12 Salary provided as of July 1, 2018 for all (non-RHSA and non-benefitting RHSA) employees Exec
Mgmt
Mid
Mgmt Conf. ALE LPOA
Police
Mgmt Fire
City
Council Total
A c t i v e s :
Non-RHSA 8 35 5 137 41 8 n/a n/a 232
RHSA - 25 5 93 40 1 n/a n/a 164
Total Count 8 60 10 230 81 7 n/a n/a 396
Average Age 51.5 50.4 45.6 47.8 40.0 47.1 n/a n/a 46.7 Avg. City Svc. 16.8 13.1 16.0 11.8 11.0 17.9 n/a n/a 12.1 Avg. CalPERS Svc. 22.0 16.6 18.1 13.8 13.2 21.4 n/a n/a 14.5 Average Salary12 $221,900 $132,300 $78,700 $80,400 $129,800 $207,100 n/a n/a $103,400 Total Salary (000’s) 1,775 7,938 787 18,493 10,511 1,449 n/a n/a 40,953 Retirees:
Count 16 54 9 140 48 12 9 8 296
Average Age 71.4 68.3 70.1 67.7 60.0 63.9 78.3 70.7 67.1 Average Ret. Age
Service 58.7 58.3 59.3 58.6 53.4 52.7 54.8 57.6 57.8
Disability n/a 50.0 n/a 46.2 46.2 53.0 51.6 n/a 46.9
All Retirements 58.7 58.0 59.3 58.3 49.9 52.7 52.5 57.6 56.5
EXHIBIT A
128
December 2, 2021 11
PARTICIPANT STATISTICS
Data Reconciliation
13 Includes 11 retiree deaths and 4 data adjustments.
Actives Retirees Total
June 30, 2018 Count 396 296 692
New Hires 58 - 58
Terminations (19) - (19)
Death or Adjustments13 - (7) (7)
Retirements (32) 32 -
June 30, 2020 Count 403 321 724
December 2, 2021 12
ACTUARIAL ASSUMPTIONS HIGHLIGHTS
PARS Fund Options14
Capital
Appreciation Balanced Moderate
Moderately
Conservative Conservative
Target Allocation
Equity 75% 60% 50% 30% 15%
Fixed Income 20% 35% 45% 65% 80%
Cash 5% 5% 5% 5% 5%
Total 100% 100% 100% 100% 100%
Median Return 6.71% 6.30% 5.97% 5.24% 4.59%
Discount Rate-
Confidence Level
50% 6.75% 6.25% 6.00% 5.25% 4.50%
55% 6.25% 6.00% 5.75% 5.00% 4.50%
60% 6.00% 5.75% 5.50% 4.75% 4.25%
14 City switched from Balanced portfolio to Capital Appreciation portfolio in March 2017.
EXHIBIT A
129
December 2, 2021 13
ACTUARIAL ASSUMPTIONS HIGHLIGHTS
June 30, 2018 Valuation June 30, 2020 Valuation
Valuation Date June 30, 2018
Fiscal Years 2019/20 &
2020/21 ADCs (end of year)
June 30, 2020
Fiscal Years 2021/22 &
2022/23 ADCs (end of year)
Funding Policy Full pre-funding to PARS
trust with Capital
Appreciation portfolio
Same
General
Inflation
2.75% Same
Discount Rate 6.50%
Full Pre-Funding
PARS Capital Appreciation:
52.5% confidence level
6.25%
Full Pre-Funding
PARS Capital Appreciation:
55% confidence level
Retirement,
Mortality,
Termination,
Disability
CalPERS 1997-2015
Experience Study
Mortality improvement
projection Scale MP-2018
CalPERS 1997-2015
Experience Study
Mortality improvement
projection Scale MP-2020
December 2, 2021 14
ACTUARIAL ASSUMPTIONS HIGHLIGHTS
June 30, 2018 Valuation June 30, 2020 Valuation
Participation at
Retirement
Not in RHSA: 95%
In RHSA: not applicable
Not in RHSA: 90%
In RHSA: not applicable
Based on current experience
Medical Trend Increase from Prior Year
Non-Medicare Medicare
Calendar
Year HMO & PPO HMO & PPO
2018 Actual Premiums/Claims
2019 Actual Premiums/Claims
2020 7.50% 6.50%
2021 7.25% 6.30%
2022 7.00% 6.10%
2023 6.75% 5.90%
2024 6.50% 5.70%
2025 6.25% 5.50%
2026 6.00% 5.30%
↓ ↓ ↓
2076+ 4.00% 4.00%
Increase from Prior Year
Calendar
Year
Pre-
Medicare
Post-
Medicare
Kaiser
Post-
Medicare
Other
2018 n/a
2019 n/a
2020 Actual
Premiums/Claims
2021 Actual Premiums/Claims
2022 7.00% 5.00% 6.10%
2023 6.75% 4.85% 5.90%
2024 6.50% 4.70% 5.70%
2025 6.25% 4.60% 5.50%
2026 6.00% 4.50% 5.30%
↓ ↓ ↓ ↓
2076+ 4.00% 4.00% 4.00%
EXHIBIT A
130
December 2, 2021 15
ACTUARIAL ASSUMPTIONS HIGHLIGHTS
June 30, 2018 Valuation June 30, 2020 Valuation
Medical Plan at
Retirement
Current Active:
Medical Plan Pre65 Post65
Kaiser A 20% 30%
Kaiser B 35% 10%
HealthNet B 5% 0%
HealthNet EOA 10% 0%
HealthNet
Senority Plus
0% 15%
Non-City Plans 30% 45%
Pre-65 Retiree – Same as
current election to 65. Same
as above at Medicare
eligibility
Post-65 Retiree – Same as
current election
No-City Plans: weighted
premium of City plans
Current Active:
Medical Plan Pre65 Post65
Kaiser A 20% 35%
Kaiser B 35% 10%
HealthNet B 5% 0%
HealthNet EOA 5% 0%
HealthNet
Senority Plus
0% 15%
Non-City Plans 35% 40%
Pre-65 Retiree – Same as
current election to 65. Same
as above at Medicare
eligibility
Post-65 Retiree – Same as
current election
No-City Plans: weighted
premium of City plans
December 2, 2021 16
ACTUARIAL METHODS
June 30, 2018 Valuation June 30, 2020 Valuation
Cost Method Entry Age Normal Level % of Pay
Unfunded
Liability
Amortization
18 year closed period of
6/30/19 UAAL
16 year closed period of
6/30/21 UAAL
Actuarial
Value of
Assets
Investment gains and losses spread over a 5-year rolling period Not less than 80% nor more than 120% of market value
Implied
Subsidy
Not Included Same
Future New
Entrants
Valuation Results – Closed group, no new hires
Projections – Simplified open group projection:
Actives – Total pay increased in accordance with aggregate payroll assumption
Retirees – No additional retirees from new hires over 10-year projection period
EXHIBIT A
131
December 2, 2021 17
ASSETS
Market Value of Plan Assets
(Amounts in 000’s)
2016/17 2017/18 2018/19 2019/20 2020/21
Market Value
(Beginning of Year) $17,215 $22,164 $ 26,289 $ 30,030 $ 32,251 Contributions 2,908 2,215 1,996 1,536 1,710
Benefit Payments15 - - - - -
Admin. Expenses (42) (49) (111) (121) (141)
Investment Return 2,083 1,959 1,855 806 10,051 Market Value
(End of Year) 22,164 26,289 30,030 32,251 43,870
Approx. Annual Return 11.0% 8.3% 6.4% 2.2% 30.1%
15 Benefit payments paid outside of trust
December 2, 2021 18
ASSETS
Actuarial Value of Plan Assets
(Amounts in 000’s)
2016/17 2017/18 2018/19 2019/20 2020/21
Actuarial Value
(Beginning of Year) $ 17,788 $ 21,982 $ 25,687 $ 29,443 $ 32,814 Employer Contribution 2,908 2,215 1,996 1,536 1,710
Benefit Payment16 - - - - -
Administrative Expenses - - (111) (121) (141)
Expected Inv. Return 1,240 1,490 1,724 1,956 2,090
Expected AVA (End of Year) 21,936 25,687 29,296 32,814 36,473 Preliminary AVA 21,982 n/a 29,443 n/a 37,952
Min AVA (80% of MVA) 17,732 n/a 24,024 n/a 35,096
Max AVA (120% of MVA) 26,597 n/a 36,036 n/a 52,645
Actuarial
(End of Year) 21,982 n/a 29,443 n/a 37,952
Approximate AVA return 6.7% n/a 6.6% n/a 10.3%
16 Benefit payments paid outside of trust
EXHIBIT A
132
December 2, 2021 19
ASSETS
Historical Assets
(Amounts in 000’s)
December 2, 2021 20
ASSETS
Historical Returns
09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19 19/20 20/21 MVA 15.6%23.0% -0.6% 10.9%14.0% 2.2% 1.5% 11.0% 8.3% 6.4% 2.2% 30.1% Expected Return 6.5% 6.5% 6.5% 6.5% 6.5% 6.5% 6.5% 6.5% 6.5% 6.5% 6.5% 6.3% AVA 9.7% 7.4% 6.9% 6.7% 7.0% 10.1%
(5%)
0%
5%
10%
15%
20%
25%
30%
35%
EXHIBIT A
133
December 2, 2021 21
RESULTS
Funded Status
(Amounts in 000’s)
6/30/18 6/30/20
Projected
6/30/21
PVPB
Actives $ 34,654 $ 30,180
Retirees 46,723 52,281
Total 81,377 82,461
AAL
Actives 27,177 24,189
Retirees 46,723 52,281
Total 73,900 76,470 $ 78,538
Assets 25,687 32,814 37,952
Unfunded AAL 48,213 43,656 40,586
Funded Ratio 34.8% 42.9% 48.3%
December 2, 2021 22
RESULTS
Historical Funded Status
(Amounts in 000’s)
3% 3% 4%
14%
26%
35%
43%
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
6/30/08 6/30/10 6/30/12 6/30/ 14 6/30/16 6/30/18 6/30/20 Retiree pay-go Retiree AAL less pay-go Active AAL AVA MVA X% Funded Ratio
EXHIBIT A
134
December 2, 2021 23
RESULTS
Actuarial Gain/Loss
(Amounts in 000’s)
AAL AVA UAAL
Actual 6/30/18 $ 76,423 $ 29,476 $ 46,947
Expected 6/30/21 81,987 36,354 45,633
Assumption Changes
Discount Rate (6.5% → 6.25%) 2,182 - 2,182
Mortality (Scale MP-2020) (564) - (564)
Kaiser Medicare Trend (1,208) - (1,208)
Participation at Retirement (1,459) - (1,459)
Medical Plan Election (395) - (395)
Experience (Gains)/Losses
City Premiums Lower than Expected (3,793) - (3,793) Demographic & Other17 1,788 - 1,788
Asset gains / (losses) - 1,598 1,598
Total Change (3,449) 1,598 (5,047)
Projected 6/30/21 78,538 37,952 40,586
17 Including $1,322 losses due to 11 non Ci ty premium retirees changed from no reimbursement in last valuation to with reimbursement.
December 2, 2021 24
RESULTS
Schedule of Funding Process
(Amounts in 000’s)
Actuarial
Valuation
Date
Actuarial
Value of
Assets
(a)
Entry Age
Actuarial
Accrued
Liability
(b)
Unfunded
Actuarial
Accrued
Liability
(b-a)
Funded
Ratio
(a/b)
Covered
Payroll
(c)
UAAL as
Percentage
of Covered
Payroll
((b-a)/c)
6/30/2008 $ 1,185 $ 43,501 $ 42,316 2.7% $ 37,065 114% 6/30/2010 3,214 95,573 92,359 3.4% 33,196 278%
6/30/2012 4,532 106,364 101,832 4.3% 32,965 309%
6/30/2014 9,459 69,067 59,608 13.7% 35,221 169%
6/30/2016 17,788 68,716 50,928 25.9% 37,875 134%
6/30/2018 25,687 73,900 48,213 34.8% 42,182 114%
6/30/2020 32,814 76,470 43,656 42.9% 42,311 103%
EXHIBIT A
135
December 2, 2021 25
RESULTS
Actuarially Determined Contribution (ADC)
(Amounts in 000’s)
6/30/2018 Valuation 6/30/2020 Valuation
2019/20 2020/21 2021/22 2022/23
ADC - $
Normal Cost18 $ 1,265 $ 1,219 $ 1,288 $ 1,249
UAAL Amortization 19 3,635 3,744 3,368 3,469
ADC (End of Year) 4,900 4,963 4,656 4,718
Projected Total Payroll20 42,182 43,447 42,311 43,581 ADC - %
Normal Cost 3.0% 2.8% 3.0% 2.9%
UAAL Amortization 8.6% 8.6% 8.0% 8.0%
ADC 11.6% 11.4% 11.0% 10.8%
18 Includes administrative expenses allocated by AAL.
19 18 years fresh start beginning 2019/20. 16 years fresh start beginning 2021/22. 20 Includes payroll for RHSA employees with no OPEB benefit.
December 2, 2021 26
RESULTS
Actuarially Determined Contribution (ADC)
(Amounts in 000’s)
EXHIBIT A
136
December 2, 2021 27
RESULTS
Amortization Bases
(Amounts in 000’s)
6/30/2018 Valuation 6/30/2020 Valuation
6/30/19 6/30/20 6/30/21 6/30/22
Outstanding Balance $ 46,947 $ 46,363 $ 40,586 $ 39,755 Total 46,947 46,363 40,586 39,755
December 2, 2021 28
RESULTS
Amortization Payments
(Amounts in 000’s)
6/30/2018 Valuation 6/30/2020 Valuation
2019/20 2020/21 2020/21 2021/22
Amortization Payment $ 3,635 $ 3,744 $ 3,368 $ 3,469 Total 3,635 3,744 3,368 3,469
Amortization Period (years) 18 17 16 15
EXHIBIT A
137
December 2, 2021 29
RESULTS
Actuarial Obligations – June 30, 2020
(Amounts in 000’s)
Miscellaneous Safety Total
Present Value of Benefits
Actives $ 23,264 $ 6,917 $ 30,180
Retirees 37,758 14,523 52,281
Total 61,022 21,440 82,461
Actuarial Accrued Liability
Actives 18,832 5,357 24,189
Retirees 37,758 14,523 52,281
Total 56,590 19,880 76,470
Actuarial Value of Assets21 24,283 8,531 32,814
UAAL 32,307 11,349 43,656
21 Actuarial value of assets are allocated to miscellaneous and safety based on AAL.
December 2, 2021 30
RESULTS
Actuarially Determined Contribution (ADC) – 2021/22 Fiscal Year (Amounts in 000’s)
Miscellaneous Safety Total
ADC - $
Normal Cost22 $ 974 $ 314 $ 1,288
UAAL Amortization 2,496 871 3,368
Total 3,471 1,185 4,656
Projected Payroll23 29,270 13,042 42,311
ADC - %
Normal Cost 3.3% 2.4% 3.0%
UAAL Amortization 8.5% 6.7% 8.0%
Total 11.9% 9.1% 11.0%
22 Includes administrative expenses allocated by AAL.
23 Includes payroll for RHSA employees with no OPEB benefit.
EXHIBIT A
138
December 2, 2021 31
RESULTS
Actuarial Obligations by Bargaining Unit – June 30, 2020 (Amounts in 000’s)
Exec
Mgmt.
Mid.
Mgmt. Conf. ALE LPOA
Police
Mgmt.
City
Council Fire Total
Present
Value of
Benefits
Actives $ 1,337 $ 5,320 $ 650 $16,118 $ 5,717 $ 1,039 $ - $ - $30,180 Retirees 3,354 10,262 990 24,175 10,608 2,785 - 106 52,281 Total 4,691 15,582 1,640 40,293 16,325 3,824 - 106 82,461 Actuarial
Liability
Actives 1,005 4,396 553 12,935 4,464 836 - - 24,189
Retirees 3,354 10,262 990 24,175 10,608 2,785 - 106 52,281 Total 4,359 14,658 1,543 37,110 15,072 3,621 - 106 76,470 AVA24 1,870 6,290 662 15,924 6,467 1,554 - 45 32,814 UAAL 2,489 8,368 881 21,186 8,605 2,067 - 61 43,656
24 AVA - Actuarial value of assets are allocated to bargaining unit based on AAL.
December 2, 2021 32
RESULTS
Actuarially Determined Contribution (ADC)
by Bargaining Unit– 2021/22 Fiscal Year
(Amounts in 000’s)
Exec
Mgmt.
Mid.
Mgmt. Conf. ALE LPOA
Police
Mgmt.
City
Council Fire Total
ADC - $
Normal
Cost
$ 62 $ 227 $ 20 $ 683 $ 251 $ 45 $ - $ - $ 1,288
UAAL
Amort 192 644 68 1,641 662 158 - 3 3,368
Total 254 871 88 2,323 914 203 - 3 4,656
Projected
Payroll25 1,784 8,784 752 18,115 11,425 1,451 - - 42,311 ADC - $
Normal
Cost
3.5% 2.6% 2.7% 3.8% 2.2% 3.1% - - 3.0%
UAAL
Amort 10.7% 7.3% 9.0% 9.1% 5.8% 10.9% - - 8.0% Total 14.2% 9.9% 11.7% 12.8% 8.0% 14.0% - - 11.0%
25 Includes payroll for RHSA employees with no OPEB benefit.
EXHIBIT A
139
December 2, 2021 33
RESULTS
Amortization Bases by Bargaining Unit26
(Amounts in 000’s)
Executive
Mgmt.
Mid.
Mgmt. Conf. ALE LPOA
Outstanding
Balance 6/30/21 $ 2,314 $ 7,761 $ 819 $ 19,775 $ 7,977
Total 2,314 7,761 819 19,775 7,977
Amortization
Payments 2021/22 $ 192
$ 644 $ 68 $ 1,641 $ 662
Total 192 644 68 1,641 662
Amortization Period 16 16 16 16 16
26 Outstanding balance allocated based on AAL. See Actuarial Methods section for details on methods and remaining period.
December 2, 2021 34
RESULTS
Amortization Bases by Bargaining Unit27
(Amounts in 000’s)
Police
Mgmt.
City
Council Fire Total
Outstanding Balance
6/30/21 $ 1,904 $ - $ 48 $ 40,586
Total 1,904 - 48 40,586
Amortization
Payments 2021/22 $ 158
$ - $ 4 3,368
Total 158 - 4 3,368
Amortization Period 16 16 16 16
27 Outstanding balance allocated based on AAL. See Actuarial Methods section for details on methods and remaining period.
EXHIBIT A
140
December 2, 2021 35
RESULTS
10-Year Projection Illustration
(Amounts in 000’s)
FYE
June
30,
Contribution
Payroll28
Contribution
% of Payroll
Cash
Ben
Pmts
Pre-
Funding
Total
Contrib
2022 $ 3,840 $ 816 $ 4,656 $ 42,311 11.0%
2023 4,165 553 4,718 43,581 10.8%
2024 4,456 319 4,775 44,888 10.6%
2025 4,742 91 4,833 46,235 10.5%
2026 5,042 (151) 4,891 47,622 10.3%
2027 5,339 (392) 4,947 49,050 10.1%
2028 5,626 (625) 5,001 50,522 9.9%
2029 5,848 (789) 5,059 52,038 9.7%
2030 6,106 (981) 5,125 53,599 9.6%
2031 6,442 (1,244) 5,198 55,207 9.4%
28 Includes payroll for RHSA employees with no OPEB benefit.
December 2, 2021 36
EXHIBITS
This report presents the City of Livermore Retiree Healthcare Plan (“Plan”) June 30, 2020 actuarial valuation. The purpose of this valuation is to:
Determine the Plan’s June 30, 2020 Benefit Obligations, Determine the Plan’s June 30, 2020 Funded Status, and Calculate the 2021/22 and 2022/23 Actuarially Determined Contributions.
The report provides information intended for funding the City’s Plan, but may not be appropriate for other purposes. Information provided in this report may be useful to the City for the Plan’s financial management. Future valuations may differ significantly if the Plan’s experience differs from our assumptions or if there are changes in Plan design, actuarial methods, or actuarial assumptions. The project scope did not include an analysis of this potential variation.
The valuation is based on Plan provisions, participant data, and asset information provided by the City as summarized in this report, which we relied on and did not audit. We reviewed the participant data for reasonableness.
To the best of our knowledge, this report is complete and accurate and has been conducted using generally accepted actuarial principles and practices. As members of the American Academy of Actuaries meeting the Academy Qualification Standards, we certify the actuarial results and opinions herein.
Respectfully submitted,
Dour Pryor, ASA, EA, MAAA
Vice President
Bartel Associates, LLC
December 2, 2021
Bianca Lin, FSA, EA, MAAA, FCA
Assistant Vice President
Bartel Associates, LLC
December 2, 2021
EXHIBIT A
141
December 2, 2021 E-1
PREMIUMS
2020 Monthly Premiums
Active & Early Retirees
Actives Early Retirees
Plan EE EE+1 Family EE EE+1 Family
Kaiser HMO – A $960.32 $1,920.64 $2,592.86 $1, 073.84 $2,147.68 $2,899.38 Kaiser HMO – B 683.96 1,367.90 1,846.66 906.80 1,813.60 2,448.36 Kaiser HMO – C 484.38 968.78 1,307.84 635.62 1,271.24 1,716.16 Kaiser HMO – OOS n/a n/a n/a 1,017.13 2,034.26 3,051.39 Health Net HMO – B 1,260.04 2,520.08 3,394.98 1,565.04 3,130.08 4,226.82 Health Net HMO –
SmartCare 1,071.62 2,143.16 2,887.26 1,331.02 2,661.92 3,594.66 Health Net CA EOA 1,701.92 3,406.78 4,603.36 1,855.56 3711.10 5,014.08 December 2, 2021 E-2
PREMIUMS
2020 Monthly Premiums
Medicare Eligible Retirees
Plan EE EE+1
Kaiser HMO Senior Advantage – A $ 416.92 $ 833.84
Kaiser HMO Senior Advantage – B 330.80 661.60
Kaiser HMO Senior Advantage - C 285.22 570.44
Kaiser HMO Senior Advantage – OOS 316.14 n/a
Health Net COB – A – Medicare 958.82 1,917.64
Health Net COB – B – Medicare 562.78 1,125.56
Health Net Seniority Plus 882.62 1,765.26
EXHIBIT A
142
December 2, 2021 E- 3
PREMIUMS
2021 Monthly Premiums
Active & Early Retirees
Actives Early Retirees
Plan EE EE+1 Family EE EE+1 Family
Kaiser HMO – A $1,060.62 $2,121.24 $2,863.64 $1,185.86 $2,371.81 $3,201.82 Kaiser HMO – B 760.54 1,521.10 2,053.48 1,007.84 2,015.68 2,271.16 Kaiser HMO – C 551.64 1,103.26 1,489.42 723.86 1,447.74 1,954.44 Kaiser HMO – OOS n/a n/a n/a 1,109.39 2,218.78 3,328.17 Health Net HMO – B 1,199.14 2,398.20 3,230.84 1,751.28 3,502.56 4,729.82 Health Net HMO –
SmartCare 1,409.98 2,819.96 3,798.98 1,489.42 2,978.70 4,022.42 Health Net CA EOA 1,904.46 3,812.20 5,151.16 2,076.38 4,152.72 5,610.76
December 2, 2021 E- 4
PREMIUMS
2021 Monthly Premiums
Medicare Eligible Retirees
Plan EE EE+1
Kaiser HMO Senior Advantage – A $392.02 $784.04
Kaiser HMO Senior Advantage – B 305.94 611.88
Kaiser HMO Senior Advantage – C 260.38 520.76
Kaiser HMO Senior Advantage – OOS 318.43 n/a
Health Net COB – A – Medicare 1,024.70 2,049.40
Health Net COB – B – Medicare 942.10 1,884.20
Health Net Seniority Plus 562.78 1,125.56
EXHIBIT A
143
December 2, 2021 E- 5
DATA SUMMARY
Current Active Medical Coverage
Plan EE EE+1 Family Total
Kaiser HMO – A 5 1 - 6
Kaiser HMO – B 58 23 78 159
Kaiser HMO – C 26 14 28 68
Health Net HMO – B 5 4 2 11
Health Net CA EOA 2 - - 2
Health Net SmartCare 2 2 3 7
None Elected - - - 150
Total 98 44 111 403
December 2, 2021 E- 6
DATA SUMMARY
Current Retiree Medical Coverage
Pre 65
Plan EE EE+1 Family Total
Kaiser HMO – A 14 6 - 20
Kaiser HMO – B 5 25 10 40
Kaiser HMO – C 1 3 3 7
Kaiser HMO – OOS - 1 - 1
Health Net HMO – B 4 - - 4
Health Net CA EOA 2 - - 2
Health Net SmartCare - 3 - 3
Non-City Plan – Cap < $200 - - - -
Non-City Plan – Cap > $200 - - - 46
None Elected - - - 8
Total 26 38 13 131
EXHIBIT A
144
December 2, 2021 E-7
DATA SUMMARY
Current Retiree Medical Coverage
Post 65
Plan EE EE+1 Family Total
Kaiser HMO Senior Advantage – A 28 27 - 55
Kaiser HMO Senior Advantage – B 3 13 2 18
Kaiser HMO Senior Advantage – OOS 1 - - 1
Health Net COB – A – Medicare 5 - - 5
Health Net COB – B – Medicare - 1 - 1
Health Net Seniority Plus 6 14 - 20
Non-City Plan – Cap < $200 - - - 7
Non-City Plan – Cap > $200 - - - 54
None Elected - - - 29
Total 43 55 2 190
December 2, 2021 E-8
DATA SUMMARY
Medical Plan Participation
Non-Waived Participants
Medical Plan Actives
Retirees
< 65 > 65 Total
Kaiser HMO – A 2% 16% 34% 30%
Kaiser HMO – B 63% 33% 11% 24%
Kaiser HMO – C 27% 6% 0% 3%
Kaiser HMO – OOS 0% 1% 1% 1%
Health Net HMO – A 0% 0% 3% 2%
Health Net HMO – B 4% 3% 1% 2%
Health Net CA EOA 1% 2% 0% 1%
Health Net SmartCare 3% 2% 0% 1%
Health Net Sen. Plus 0% 0% 12% 8%
Non-City Plan 0% 37% 39% 28%
Total 100% 100% 100% 100%
EXHIBIT A
145
December 2, 2021 E-9
DATA SUMMARY
Retiree Medical Plan Coverage by Age
Miscellaneous
Medical Coverage
Age EE EE+1 Family Waived Not Eligible Total
Under 50 - - - - - -
50-54 1 1 - 4 - 6
55-59 8 8 2 11 - 29
60-64 12 13 4 24 - 53
65-69 21 21 1 7 - 50
70-74 12 23 1 3 2 41
75-80 10 8 - 9 6 33
80-85 4 3 - 3 9 19
85 & Over 1 1 - - 7 9
Total 69 78 8 61 24 240
Average Age 68.6 68.7 63.2 65.2 82.2 68.9
December 2, 2021 E-10
DATA SUMMARY
Retiree Medical Plan Coverage by Age
Safety
Medical Coverage
Age EE EE+1 Family Waived Not Eligible Total
Under 50 2 2 2 3 - 9
50-54 3 3 1 6 - 13
55-59 - 5 3 3 - 11
60-64 - 7 1 2 - 10
65-69 3 9 1 - 1 14
70-74 1 3 - 1 2 7
75-80 1 3 - 1 6 11
80-85 1 - - - 3 4
85 & Over - - - - 2 2
Total 11 32 8 16 14 81
Average Age 62.7 63.8 56.9 56.0 78.8 64.0
EXHIBIT A
146
December 2, 2021 E-11
DATA SUMMARY
Actives by Age and Service
Miscellaneous
City Service
Age < 1 1-4 5-9 10-14 15-19 20-24 ≥ 25 Total
< 25 1 1 - - - - - 2
25-29 3 6 - - - - - 9
30-34 3 15 6 - - - - 24
35-39 7 18 8 10 2 - - 45
40-44 6 12 2 6 7 1 - 34
45-49 - 10 3 13 13 6 - 45
50-54 1 8 3 10 18 13 4 57
55-59 3 8 1 4 13 8 9 46
60-64 - 2 5 2 15 7 2 33
≥ 65 - - 1 3 4 3 3 14
Total 24 80 29 48 72 38 18 309
December 2, 2021 E-12
DATA SUMMARY
Actives by Age and Service
Safety
City Service
Age < 1 1-4 5-9 10-14 15-19 20-24 ≥ 25 Total
< 25 1 1 - - - - - 2
25-29 5 6 2 - - - - 13
30-34 2 7 8 2 - - - 19
35-39 - 5 2 1 1 1 - 10
40-44 - 3 2 9 3 2 - 19
45-49 - - 2 - 7 7 2 18
50-54 - - 1 - 5 5 - 11
55-59 - - - - - - 1 1
60-64 - - - - - 1 - 1
≥ 65 - - - - - - - -
Total 8 22 17 12 16 16 3 94
EXHIBIT A
147
December 2, 2021 E-13
DATA SUMMARY
Actives by Age and Service
Total
City Service
Age < 1 1-4 5-9 10-14 15-19 20-24 ≥ 25 Total
< 25 2 2 - - - - - 4
25-29 8 12 2 - - - - 22
30-34 5 22 14 2 - - - 43
35-39 7 23 10 11 3 1 - 55
40-44 6 15 4 15 10 3 - 53
45-49 - 10 5 13 20 13 2 63
50-54 1 8 4 10 23 18 4 68
55-59 3 8 1 4 13 8 10 47
60-64 - 2 5 2 15 8 2 34
≥ 65 - - 1 3 4 3 3 14
Total 32 102 46 60 88 54 21 403
December 2, 2021 E-14
DATA SUMMARY
This page intentionally blank
EXHIBIT A
148
December 2, 2021 E-15
ACTUARIAL ASSUMPTIONS
June 30, 2018 Valuation June 30, 2020 Valuation
Valuation Date June 30, 2018
Fiscal Years 2019/20 &
2020/21 ADCs (end of year)
June 30, 2020
Fiscal Years 2021/22 &
2022/23 ADCs (end of year)
Funding Policy Full pre-funding to PARS
trust
PARS portfolio: Capital
Appreciation
Same
General
Inflation
2.75% Same
Discount Rate 6.50%
Full Pre-Funding
PARS Capital Appreciation:
52.5% confidence level
6.25%
Full Pre-Funding
PARS Capital Appreciation:
50% confidence level
December 2, 2021 E-16
ACTUARIAL ASSUMPTIONS
June 30, 2018 Valuation June 30, 2020 Valuation
Payroll
Increases
Aggregate Increases – 3.00%
Merit Increases – CalPERS
1997-2015 Experience Study
Same
Retirement CalPERS 1997-2015
Experience Study
Same
Mortality,
Termination,
Disability
CalPERS 1997-2015
Experience Study
Mortality improvement
projection Scale MP-2016
CalPERS 1997-2015
Experience Study
Mortality improvement
projection Scale MP-2020
EXHIBIT A
149
December 2, 2021 E-17
ACTUARIAL ASSUMPTIONS
June 30, 2018 Valuation June 30, 2020 Valuation
Cap Increase Kaiser Plan A 2-Party
Premiums: HMO Healthcare
Trend
Active Medical Cap –
Minimum of:
HN PPO Family Premium
(increased with PPO
Healthcare Trend)
1% (¾% for Police Lieut.)
of budgeted monthly salary
(increased with aggregate
payroll increase rate)
Same
December 2, 2021 E-18
ACTUARIAL ASSUMPTIONS
June 30, 2018 Valuation June 30, 2020 Valuation
Medicare
Eligible Rate
Hired before 4/1/1986:
Miscellaneous – 80%
Safety – 90%
Hired on or after 4/1/1986 –
100%
Everyone eligible for
Medicare will elect Part B
coverage
Same
Marital Status
at Retirement
Currently covered actives and
eligible retirees – current
marital status
Currently waived actives and
$200/mo. retirees – 80%
married
Same
EXHIBIT A
150
December 2, 2021 E- 19
ACTUARIAL ASSUMPTIONS
June 30, 2018 Valuation June 30, 2020 Valuation
Medicare Part B
Premium
2018 $134.00
2019 $135.50
2020 Medical Trend
2020 $ 144.60
2021 $ 148.50
2022 Medical Trend
CalPERS
Service
Provided by City
½ of prior service from age 30
if missing
Same
Dependents % electing family coverage at
retirement until age 65:
Miscellaneous – 10%
Safety – 30%
Same
Spouse Age Actives – Males 3 years older
than females
Retirees – Males 3 years older
than females if spouse birth
date not available
Same
December 2, 2021 E- 20
ACTUARIAL ASSUMPTIONS
June 30, 2018 Valuation June 30, 2020 Valuation
Surviving
Spouse
Participation
100% Same
Future New
Participants
None – Closed Group Same
EXHIBIT A
151
December 2, 2021 E-21
DEFINITIONS
OPEB
Actuarial
Valuation
Project future employer-provided benefit cash flows for current active employees and current retirees
Discount projected cash flow to valuation date using discount rate (assumed return on assets used to pay benefits) and other actuarial assumptions to determine present value of projected future benefits (PVB) Allocate PVB to past, current, and future periods using the actuarial cost method
Actuarial cost method used for this valuation is the Entry Age Normal Cost method which determines Normal Cost as a level percentage of payroll (same method used by CalPERS)
Normal Cost is amount allocated to current fiscal year Actuarial Accrued Liability (AAL) is amount allocated to prior service with employer
Unfunded AAL (UAAL) is AAL less plan assets pre-funded in a segregated and restricted trust
PayGo Cost Cash subsidy is the pay-as-you-go employer benefit payments for retirees Implied subsidy is the difference between the actual cost of retiree benefits and retiree premiums subsidized by active employee premiums December 2, 2021 E-22
DEFINITIONS
Present Value of Benefits
EXHIBIT A
152
OPEB POLICY
Adopted February 28, 2022
Resolution No 2022-XX
Prepared By:
Administrative Services Department
EXHIBIT B
153
City of Livermore
OPEB POLICY
OBJECTIVE
The City of Livermore’s primary financial objective is to maintain the fiscal stability of the community.
Properly monitoring, managing, and funding the City’s Other Post Employment Benefits (OPEB) liability, commonly known as retiree medical benefits, is critical to achieving this objective.
PURPOSE
The purpose of this policy is to establish practices that promote transparency, ensure appropriate funding, and communicate the investment philosophy for managing the City’s OPEB liability.
PRACTICES
Transparency. Prior to Governmental Accounting Standards Board (GASB) Statement 45 released in 2004, government typically followed a “pay-as-you-go” accounting approach in which the cost of benefits was not reported until after employees retire whic h revealed a limited amount o f data and failed to account for costs and obligations incurred as governments receive employee services each year for which they have promised future benefit payments in exchange. GASB Statement 75 was released in 2015 and replaced GASB 45 and provided new guidance and terminology for reporting and disclosure requirements for OPEB plans. The important change in terminology was changing the Annual Required Contribution (ARC) to the Actuarial Determ ined Contribution (ADC). The change requires the calculation to be reasonable and based on actuarial principles.
GASB Statement 75 requires government to report certain information regarding the Net OPEB Liability (NOL) and related deferred inflows and ou tflows as part of its annual financial reporting.
This requires the City to show the full NOL on the Statement of Net Position and report OPEB expenses on the Statement of Revenues and Expenditures. Additional footnote disclosures are also required and presented a ccordingly in the Annual Comprehensive Financial Report (A CFR). To comply with GASB Statement 75 reporting requirement, the City obtains an Actuarial Valuation Report on a bi- annual basis. This detailed report explains the factors and assumptions that are used in calculating th e City’s OPEB liability. This includes items such as benefit summary, participant statistics, retirement, mortality, medical trends, and funding policy. It explains the actuarial methods utilized in preparing the report. It p rovides important information regarding the assets set aside in trust to meet future obligations. It calculates the prudent annual funding level, called Actuarial Determined Contribution (ADC), as well as the Actuarial Accrued Liability (AAL), Actuarial Value of Assets (AVA), Unfunded Actuarial Accrued Liability (UALL), and other data necessary to manage this liability.
Additionally, each bi-annual Actuarial Valuation Report will be presented to Council in open session for discussion and acceptance to communicate the current funded status of the City’s OPEB liability.
Funding Level. Not making full ADC payments each year adversely impacts the City’s long -term financial stability and threatens its future ability to offer programs and adequ ate service levels. The City will make full ADC payments as prescribed by the bi -annual Actuarial Valuation Report unless
EXHIBIT B
154
the City experiences severe economic distress. Economic Stress may include, but is not limited to protracted recessionary periods, Sta te raids on local resources, or other impactful unforeseen events which greatly diminish the financial ability of the City to deliver core services. Economic distress is defined further in the City’s Fund Balance Policy and may be determined by one of the following triggers:
• Consumer Price Index exceeds the index for the previous year by more than five percent for two consecutive years
• Local unemployment rate exceeds nine percent for three consecutive quarters
• The rate of inflation exceeds the growth in property tax revenue by five percent for two consecutive fiscal years
• Significant State take-away of revenue totaling more than five percent of total revenue in a given fiscal year
• Sales Tax revenue falls by ten percent over of the previous quarter for at least three consecutive quarters
• Revenue forecasts for the next fiscal year estimates revenue losses of more than seven percent
Once the City Council or their designee (City Manager) has determined that it is necessary to underfund the ADC due to economic stress, a resolution shall be adopted at a City Council meeting accompanied by a formal report explaining the nature of the fiscal crisis. Underfunding this obligation should be considered a short -term strategy with the go al of returning to paying the full ADC as soon as possible.
Retiree Healthcare Trust Investment Strategy. The funding that is set aside annually into the City’s Retiree Healthcare Trust Fund is not governed by the City’s adopted investment policy. Since the investment funding is not intended to be used to meet current obligations, restrictions that are important for the City’s treasury do not apply to the money placed in this trust. Resources deposited into the Retiree Healthcare Trust Fund are not anticip ated to be utilized until the year 2038, and therefore investment principles of safety and liquidity relative to the City’s treasury are not necessarily applicable.
A longer investment timeline dictates a strategy of accepting more short-term volatility risk in order to take advantage of long-term investment returns. As the investment timeline shortens, it is important to shift away strategies that maximize returns to ensure adequate cash flows are available for retiree health benefits.
The Retiree Healthcare Trust Fund will invest consistently with all applicable laws and regulations.
The investment portfolio will be managed by a professional fund manager, under the direction of the Administrative Services Director in conforma nce with City goals and policies. The investment portfolio will consist of an appropriate mix of cash, fixed income instruments, and equities which provide a prudent balance between short -term volatility risk and long -term investment return risk as determined by the investment timeline.
Since funds currently deposited into the Retiree Healthcare Trust Fund are not anticipated to be used for more than 20 years, the current investment strategy will appropriately seek to maximize long term investment returns with less concern for short term volatility.
EXHIBIT B
155
Administration. Future policies developed with the goal of managing healthcare obligation should be coordinated and consistent with the purpose and objectives of the City’s OPEB policy.
IMPLEMENTATION
Upon adoption of this policy, the City Council authorizes the Administrative Services Director or designee to establish standards and procedures to implement the City’s OPEB policy. The City Council will review and approve this policy via resolution at a minimum of every four years to ensure it meets the current and future needs of the City.
EXHIBIT B
156
CITY COUNCIL STAFF REPORT
ITEM NO. 5.7
DATE:
February 28, 2022
TO:
Honorable Mayor and City Council
FROM:
Marie Weber, Acting Administrative Services Director
SUBJECT:
Resolution accepting the Annual Comprehensive Financial Report (ACFR) and Other Audit Reports for the Fiscal Year Ended June 30, 2021
RECOMMENDED ACTION
Staff recommends the City Council adopt a resolution accepting the following reports for Fiscal Year 2020-21 as completed:
Annual Comprehensive Financial Report, and ratify and approve the audited financial statements presented therein in accordance with Government Code §37208; Alameda County Transportation Commission Measure B Program Financial Statements; Alameda County Transportation Commission Measure BB Program Financial Statements; Alameda County Transportation Commission Vehicle Registration Fee (VRF) Measure F Program Financial Statements;
Agreed Upon Procedures for Compliance with the Proposition 111 2020-21 Appropriations Limit Increment;
Memorandum of Internal Control;
Required Communications.
SUMMARY
The Annual Comprehensive Financial Report (ACFR), which contains the Auditor’s Opinion, for the fiscal year ending June 30, 2021, is complete and ready for City Council acceptance. In addition to the ACFR, there are six other audit compliance reports being presented for acceptance.
DISCUSSION
The audited ACFR and other required audit compliance reports are being presented to the City Council in accordance with the Livermore Municipal Code §2.28.020 and Government Code §37208. This year’s audits were performed by the City’s independent auditors, Eide Bailly LLP. The auditors have given the City an unmodified, or “clean”, opinion on the ACFR. Auditors have added emphasis of matter 157
paragraphs to their opinion for the implementation of Government Accounting Standards Board (GASB) Statement No. 84, Fiduciary Activities. Their opinions were not modified with respect to these matters.
This is shown as the Independent Auditors’ Opinion letter in the audit report (page 22). This is the 40th consecutive year the City has received an unmodified opinion.
Government Code §37208 provides that a city council is not required to approve payroll and other budgeted demands prior to issuing payment, they may be presented to the City Council for ratification and approval, in the form of an ACFR.
The City has submitted the FY 2020-21 ACFR for the Government Finance Officers Association (GFOA) Certificate of Achievement for Excellence in Financial Reporting award program. In the past, the City has received the GFOA award and believes that the recent ACFR meets the stringent requirements to again merit GFOA recognition.
In addition to the ACFR, there are six other reports for review:
Alameda County Transportation Commission Measure B Program Financial Statements is
required by the Master Program Funding Agreement with the Alameda County Transportation Commission (ACTC) and confirms that the City has complied with the provisions of Measure B.
Alameda County voters approved the half-cent transportation sales tax in November 2000. The sales tax collection began on April 1, 2002, and will extend through March 31, 2022. ACTC administers Measure B funds to deliver essential transportation improvements and services.
Alameda County Transportation Commission Measure BB Program Financial Statements is
required by the Master Program Funding Agreement with the Alameda County Transportation Commission (ACTC) and confirms that the City has complied with the provisions of Measure BB.
Alameda County voters approved Measure BB in November 2014, and collection of the half-cent transportation sales tax by the Board of Equalization began on April 1, 2015, and will extend through March 31, 2022. The full one-cent sales tax authorized by Measure BB will begin April 1, 2022, and will extend through March 31, 2045. Local jurisdictions began to receive the flow of funds in July 2015. ACTC administers Measure BB funds for essential transportation improvements in every city throughout Alameda County.
Alameda County Transportation Commission Vehicle Registration Fee Measure F Program Financial Statements
is required by the Master Programs Funding Agreement between the City and Alameda County Transportation Commission and confirms that the City has complied with the laws, regulations, contracts, and grant agreements as specified and applicable to Measure F.
Measure F is the Alameda County Vehicle Registration Fee Program which was approved by voters November of 2010, and generates $10 per vehicle each year. The collection of these funds began in May 2011, and will continue to be imposed annually unless repealed. The revenue generated is used for local road improvement and repair, transit congestion relief, local transportation technology, and pedestrian and bicyclist access and safety programs.
Agreed Upon Procedures for Compliance with the Proposition 111 2020-21 Appropriation Limit Increment
is required by Section 1.5 of Article XIIIB of the California Constitution. This report shows the auditors applied specific procedures, which were suggested by the League of California Cities and presented in their Article XIIIB Appropriation Limitation Uniform Guidelines, to validate the City’s calculation of the Appropriations Limit. No exceptions were noted.
158
Memorandum on Internal Control:
In planning and performing the audit of the financial statements, Eide Bailly LLP considered the City’s internal control over financial reporting (internal control) as a basis for designing the auditing procedures for the purpose of expressing opinions on the financial statements. The auditors are required to communicate to the City Council any internal control matters that come to their attention during the audit. The City’s auditors, Eide Bailly LLP, have provided such a report in their Memorandum on Internal Control (MOIC) for the fiscal year ended June 30, 2021.
Required Communications:
Under generally accepted auditing standards, the City’s external auditors are required to formally communicate with the governing body to convey audit matters, the scope of work, difficulties, adjustments to financial statements, or any possible disagreements with management. No exceptions were noted in the report.
The City would normally also include the Single Audit report with the other annual financial reports. The U.S. Department of Treasury did not release its Final Rule until January 6, 2022, regarding the eligible expenses and uses of the American Rescue Plan Act (ARPA) funding. Due to the timing of the release of the Final Rule, the reporting deadline for the Single Audit has been extended for six months, and is now due on September 30, 2022. The City is working with the City's external auditors to complete the Single Audit report before the deadline.
The City also prepared FY 2020-21 Popular Annual Financial Report (PAFR). The City is not required to prepare this report. However, it does meet an important need, presenting the highlights of the City’s ACFR as well as an overview of economic, demographic, and other trends in the local economy in a user-friendly format that simplifies complex data and enhances transparency. The PAFR is specifically designed to be easily understandable to the general public and other interested parties without a background in public finance. The City has received the GFOA award for Outstanding Achievement in Popular Annual Financial Reporting for its FY 2019-20 PAFR. To receive this award, the PAFR’s contents should conform to the standards of creativity, presentation, understandability and reader appeal. The City will be submitting the FY 2020-21 PAFR for the GFOA Award and believes this PAFR meets the stringent requirements to again merit GFOA recognition.
FISCAL AND ADMINISTRATIVE IMPACTS
There is no direct fiscal impact in accepting the FY 2020-21 audit reports. Total audit and report preparation costs of $115,900 are within budget and are allocated to the General Fund, Enterprise Funds, Measure B funds, Measure BB funds and Measure F funds as the audit and reports are completed. The total fee also includes preparation costs of certain reports not requiring City Council acceptance that are transmitted directly to the California State Controller, including the the Cities Financial Transactions Report for the City of Livermore, and the Livermore Annual Streets and Roads Report.
ATTACHMENTS
1. Resolution
2. Exhibit A - FY 2021 Annual Comprehensive Financial Report (ACFR)
3. Exhibit B - FY 2021 Measure B
4. Exhibit C - FY 2021 Measure BB
159
5. Exhibit D - FY 2021 Measure F
6. Exhibit E - Appropriations Limit
7. Exhibit F - Memorandum on Internal Control (MOIC)
8. Exhibit G - Required Communications
Prepared by: David
Doyle
Accounting Supervisor
Approved by:
____________________________________
Marc Roberts
City Manager
Fiscal Review by:
____________________________________
Bhavna Chaudhary
City Treasurer/Finance Manager
160
RESOLUTION NO. ________
IN THE CITY COUNCIL OF THE CITY OF LIVERMORE, CALIFORNIA A RESOLUTION ACCEPTING FY 2020-21 ANNUAL COMPREHENSIVE
FINANCIAL REPORT AND OTHER ANNUAL REPORTS
At its meeting on February 28, 2022, the audited Annual Comprehensive Financial Report and other required audit compliance reports for the fiscal year ended June 30, 2021, were presented to the City Council in accordance with Livermore Municipal Code §2.28.020.
California Government Code §37208(c) provides that budgeted payrolls and demands paid by warrants or checks may be presented to the legislative body for ratification and approval in the form of an audited annual comprehensive financial report.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Livermore receives and accepts the following financial statements and annual reports attached hereto as completed:
1. Annual Comprehensive Financial Report Fiscal Year Ended June 30, 2021, attached as Exhibit A;
2. Alameda County Transportation Commission Measure B Funds Financial Statements for the Fiscal Year Ended June 30, 2021, attached as Exhibit B;
3. Alameda County Transportation Commission Measure BB Funds Financial Statements for the Fiscal Year Ended June 30, 2021, attached as Exhibit C;
4. Alameda County Transportation Commission Vehicle Registration Fee Program (VRF) Measure Financial Statements for the Fiscal Year Ended June 30, 2021, attached as Exhibit D;
5. Independent Accountant’s Report on Applying Agreed Upon Procedures Related to the Article XIII-B Appropriations Limit Calculation for the Fiscal Year Ended June 30, 2021, attached as Exhibit E;
6. Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance with Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards, attached as Exhibit F;
7. Required Communications, attached as Exhibit G.
161
RESOLUTION NO. ________
On motion of Council Member _________________________, seconded by Council Member ________________________, the foregoing resolution was passed and adopted on February 28, 2022, by the following vote:
AYES: COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
ABSTAIN: COUNCIL MEMBERS
ATTEST: APPROVED AS TO FORM:
____________________________ /s/ Jason R. Alcala
Marie Weber Jason R. Alcala
City Clerk City Attorney
Exhibit A - FY 2021 Annual Comprehensive Financial Report (ACFR) Exhibit B - FY 2021 Measure B
Exhibit C - FY 2021 Measure BB
Exhibit D - FY 2021 Measure F
Exhibit E - Appropriations Limit
Exhibit F - Memorandum on Internal Control (MOIC)
Exhibit G - Required Communications
162
GAS
ANNUAL COMPREHENSIVE
FISCAL YEAR ENDED JUNE 30, 2021
C ALIFORNIA
City of
LIVERMORE
163
Annual Comprehensive
Cover Photograph
Jason Richard/Unsplash
EXHIBIT A
164
Annual Comprehensive Financial Report
For the Year Ended June 30, 2021
Pr
epared By
Finance Division
Bhavna Chaudhary
Finance Manager/ Acting Administrative Service Director Ann Furtado Erik Peterson
Accounting Supervisor Accounting Supervisor
Dav
id Doyle Ki Lam
Accounting Supervisor Management Analyst
Lauri
e Ong Natalia Gilina
Administrative Specialist Division Clerk
EXHIBIT A
165
EXHIBIT A
166
A n n u a l C o m p r e h e n s i v e F i n a n c i a l R e p o r t FY 2020-21 Page | 1
Table of Contents
INTRODUCTORY SECTION
Letter of Transmittal ........................................................................................................................................................ 7 Directory of City Officials .............................................................................................................................................. 17 City of Livermore Organization Chart ......................................................................................................................... 18
FINANCIAL SECTION
Independent Auditor’s Report ...................................................................................................................................... 21 Management’s Discussion and Analysis .................................................................................................................. 27 Basic Financial Statements:
Statements
Statement of Net Position ...................................................................................................................................... 46 Statement of Activities ........................................................................................................................................... 47 Fund Financial Statements
Governmental Fund Statements
Balance Sheet .................................................................................................................................................... 50 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position .................... 51 Statement of Revenues, Expenditures, and Changes in Fund Balances ........................................................ 52 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities ........................................................ 53 Proprietary Funds
Statement of Net Position-Proprietary Funds .................................................................................................... 56 Statement of Revenues, Expenses and Changes in Net Position–Proprietary Funds .................................... 57 Statement of Cash Flows–Proprietary Funds ................................................................................................... 58 Fiduciary Funds
Statement of Net Position–Fiduciary Funds ...................................................................................................... 60 Statement of Changes in Fiduciary Net Position–Fiduciary Funds. ................................................................. 61 Notes to Basic Financial Statements
Note 1- Significant Accounting Policies ................................................................................................................ 65 A. Reporting Entity.......................................................................................................................................... 65 B. Basis of Presentation ................................................................................................................................. 65 C. Major Funds ............................................................................................................................................... 66 D. Basis of Accounting ................................................................................................................................... 67 E. Inventories and Prepaid Items ................................................................................................................... 68 F. Deferred Outflows/Inflows of Resources ................................................................................................... 68 G. Pensions .................................................................................................................................................... 68 H. Property Tax Levy, Collection and Maximum Rates ................................................................................ 69 I. Revenue Recognition for Sewer and Operations ..................................................................................... 69 J. Land Held for Redevelopment ................................................................................................................... 69 K. Use of Estimates ........................................................................................................................................ 69 L. Adoption of New Accounting Pronouncements ........................................................................................ 69 M. Future Accounting Pronouncements ......................................................................................................... 70 Note 2- Stewardship, Compliance, and Accountability ........................................................................................ 72 Note 3- Cash and Investments .............................................................................................................................. 73
EXHIBIT A
167
A n n u a l C o m p r e h e n s i v e F i n a n c i a l R e p o r t FY 2020-21
Page | 2
Note 4- Interfund Transactions .............................................................................................................................. 79 Note 5- Notes Receivable ...................................................................................................................................... 80 Note 6- Capital Assets ........................................................................................................................................... 82 Note 7- Long Term Liabilities................................................................................................................................. 85 Note 8- Special Assessment District Debt with No City Commitment ................................................................. 88 Note 9- Net Position and Fund Balances .............................................................................................................. 89 Note 10- Pension Plans ......................................................................................................................................... 93 Note 11- Other Post-Employment Benefits ......................................................................................................... 102 Note 12- Deferred Compensation Plan ............................................................................................................... 108 Note 13- Joint Ventures ....................................................................................................................................... 108 Note 14- General Liability and Workers Compensation Coverage .................................................................... 111 Note 15- Economic Development Incentives – Tax Abatements....................................................................... 111 Note 16- Commitments and Contingencies ........................................................................................................ 112 Note 17- Successor Agency Activities ................................................................................................................ 114
Required Supplementary Information
Notes to Required Supplementary Information ...................................................................................................... 119 Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual:
General Fund ....................................................................................................................................................... 122 Low Income Housing Special Revenue Fund ..................................................................................................... 123 Schedule of Changes in the Net Pension Liability and Related Ratios Agent Multiple-Employer Defined Benefit Pension Plan .................................................................................... 124 Schedule of the Plan’s Proportionate Share of the Net Pension Liability and Related Ratios Cost Sharing Defined Benefit Pension Plan ....................................................................................................... 125 Schedule of Contributions
Agent Multiple-Employer Defined Benefit Pension Plan .................................................................................... 126 Cost Sharing Defined Benefit Pension Plan ....................................................................................................... 127 Other Post-Employment Benefits Plan
Schedule of Changes in the City’s Net OPEB Liability and Related Ratios ...................................................... 128 Schedule of Contributions ................................................................................................................................... 129
Supplementary Information
Non-major Governmental Funds
Combining Balance Sheet ................................................................................................................................... 136 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ....................................... 140 Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual .......................................................................................................................................... 144
Internal Service Funds
Combining Statement of Net Position ................................................................................................................. 154 Combining Statement of Revenues, Expenses and Changes in Net Position .................................................. 156 Combining Statement of Cash Flows ................................................................................................................. 158
Custodial Funds
Combining Statement of Fiduciary Net Position ................................................................................................ 162 Combining Statement of Changes in Fiduciary Net Position ............................................................................ 163
EXHIBIT A
168
A n n u a l C o m p r e h e n s i v e F i n a n c i a l R e p o r t FY 2020-21 Page | 3
STATISTICAL SECTION
Financial Trends
Net Position by Component ................................................................................................................................ 168 Changes in Net Position ...................................................................................................................................... 169 Fund Balances of Governmental Funds ............................................................................................................. 172 Changes in Fund Balances of Governmental Funds ......................................................................................... 173 Revenue Capacity
Taxable Sales by Category ................................................................................................................................. 175 Direct and Overlapping Sales Tax Rates ........................................................................................................... 176 Principal Sales Tax Payers ................................................................................................................................. 177 Assessed Value and Estimated Actual Value of Taxable Property ................................................................... 178 Direct and Overlapping Governments Property Tax Rates ............................................................................... 179 Principal Property Taxpayers .............................................................................................................................. 180 Property Tax Levies and Collections .................................................................................................................. 181 Debt Capacity
Ratios of Outstanding Debt by Type-Last Ten Fiscal Years .............................................................................. 182 Direct and Overlapping Governmental Activities Debt as of June 30, 2020 ..................................................... 183 Legal Debt Margin Information-Last Ten Fiscal Years ....................................................................................... 184 Demographic and Economic Information
Demographic and Economic Statistics ............................................................................................................... 185 Population Demographics ................................................................................................................................... 186 Principal Employers-Current Year and Nine Years Ago .................................................................................... 187 Operating Information
Full-Time Equivalent City Government Employees by Function/Program-Last Ten Fiscal Years ................... 188 Capital Asset Statistics by Function/Program-Last Ten Fiscal Years ............................................................... 189 Operating Indicators by Function/Program-Last Ten Fiscal Years .................................................................... 190 Water and Sewer Rates ...................................................................................................................................... 191 Sewer System – Revenues by Class of User ..................................................................................................... 192 Sewer Connection Fees ...................................................................................................................................... 193 Sewer System – Number of Dwelling Unit Equivalents and Connections by Classification of User................................................................................................................................ 193 Sewer System – Summary of Historical Operating Results ............................................................................... 194 Schedule of Insurance ......................................................................................................................................... 195 Livermore Successor Agency
Redevelopment Project – Historical Tax Revenues ........................................................................................... 197 Redevelopment Project – Ten Largest Taxable Property Owners .................................................................... 198 Redevelopment Project – Assessment Appeals ................................................................................................ 198 Redevelopment Project – Actual and Projected Tax Revenues and Debt Service Coverage ......................... 199
EXHIBIT A
169
EXHIBIT A
170
EXHIBIT A
171
EXHIBIT A
172
Dec
ember 30, 2021
Honorable Mayor and Members of the City Council:
I
am pleased to present the City's Annual Comprehensive Financial Report ( ACFR) for the fiscal year ended June 30, 2021. State law requires that every general -purpose local government publish, within six months of the close of each fiscal year, a complete set of audited financial statements. This report fulfills that requirement for the fiscal year ended June 30, 2021.
Management assumes full responsibility for the completeness and reliability of the information contained in this report, based upon a comprehensive framework of internal control that it has established for this purpose.
Because the cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements.
The data in this report is presented in a manner that is designed to fairly set forth the financial position and results of operations of the City of Livermore (the City). It contains the disclosures necessary to promote in - depth understanding of the City's financial affairs and evaluate its financial condition.
The City’s financial statements have been audited by Eide Bailley LLP located in Menlo Park, California. The independent auditors concluded, based on their audit, that there was a reasonable basis for rendering an unmodified (or “clean”) opinion that the City of Livermore’s financial statements for the fiscal year (FY) ended June 3 0, 2021 are fairly presented in conformity with generally accepted accounting principles. The independent auditor’s report is the first item presented in the financial section of this r eport.
In addition to the financial audit, each year the City is required to undergo an audit of federal grant expenditures.
That report is commonly referred to as a Single Audit report and is issued as a separate document and is not included herein. The Single Audit report includes the Schedule of Expenditures of Federal Awards, Findings and Recommendations, and an auditor's report on the internal control structure and compliance with applicable laws and regulations.
The provisions of Government al Accounting Standards Board (GASB) Statement 34, “Basic Financial Statements—and Management’s Discussion & Analysis —for State and Local Governments” requires that management provide a narrative introduction, overview and analysis to accompany the basic financial statements entitled, “Management Discussion & Analysis” (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with the MD&A, which can be found immediately following the report of the independent auditors in the financial section of the ACFR.
The
City of Livermore, incorporated on April 1, 1876, is located on the southeasterly boundary of Al ameda County. The City of Livermore is a General Law city and has the power to make and enforce ordinances and regulations with respect to municipal affairs to the extent expressly permitted or implied by the California constitution or specific legislatio n. The City is organized as a council- manager form of local municipal government. The five-member City Council is elected at large for overlapping four-year terms. The City Council includes an elected Mayor whose term of office is two years.
EXHIBIT A
173
INTRODUCTORY SECTION
Transmittal Letter
CITY OF LIVERMORE
Page | 8
On November 26, 2018, the City adopted an ordinance to transition from an at -large to district-based election system to comply with the California Voting Rights Act (California Government Code Section 34886 and 34871(c)). The City Council selected a district map dividing the City into four single member districts. Starting with the general municipal election in November 2020, City Council members are elected in City Council districts 3 and 4. Council members will be elected in City Council districts 1 and 2 beginning at the general municipal election in November 2022. The Mayor will continue to be elected on an at large basis.
The City Council appoints the City Manager and City Attorney to carry out its adopted policies. In addition, the City Council appoints members of advisory Commissions, Committees, and Boards.
The City Council sets priorities and adopts the biennial budget on or before June 30 for each of the ensuing two fiscal years, which serves as the foundation for the City’s financial planning and control. The level of budgetary control (that is, the level at which expenditures cannot legally exceed the appropriated amount) is maintained at the fund level. The City Manager may transfer resources within a fund. Supplemental appropriations and budget transfers between funds and projects, however, need approval from the City Council.
The City's budgetary procedures are further discussed in Note 2 of the notes to the basic financial statements.
The City, with 415.10 full -time equivalent employees, provides a wide range of services to a residential population of 91,216. These services include public safety (police, fire, building inspection, water, and se wer); street and landscape maintenance; street lighting; planning and public improvements; public libraries; general administrative services, and municipal airport services. Fire safety services are provided by a Joint Powers Authority, Livermore Pleasanton Fire Department (LPFD). Recreational services are provided to residents by the Livermore Area Recreation and Park District (LARPD), a special district governed by a separately elected board.
The City is also financially accountable for a legally separate Livermore Capital Projects Financing Authority (LCPFA), which is reported within the City’s financial statements as a blended component unit. Additional information on this legally separate entity can be found in the notes to the financial statements (see Note 1A).
T
he information presented in the financial statements is perhaps better understood when it is considered from the broader perspective of the specific environment within which the City operates.
The City is the easternmost city in the San Francisco Bay Area situated in the growing Tri -Valley area which contains the cities of Pleasanton, Livermore, Dublin, and San Ramon. Livermore is conveniently located near two major freeways, I -580 and I -680, and is close to the metropolitan areas of San Francisco, Oakland, and San Jose. In addition to its proximity to the Oakland, San Francisco and San Jose International Airports, the City of Livermore owns and operates the Livermore Municipal Airport. This general aviation airport services private and corporate customers, and records more than 155,000 takeoffs and landings annually.
Livermore Valley Wine Country is one of the oldest wine regions in California. The Livermore Valley area boasts over 50 wineries. Livermore is surrounded by award- winning wineries, farmlands, and ranches that mirror the valley’s history. Less than an hour east of San Francisco, Livermore Valley Wine Country’s picturesque canyons and ridges welcome locals and visitors to the valley’s vineyards and tasting rooms, which are an integral part of Livermore’s quality of life. Popular wine bars, tasting rooms and boutique wine shops thrive in downtown Livermore as well.
Livermore is the home of two world- renowned national laboratories: Lawrence Livermore National Laboratory (LLNL) and Sandia National Laboratories (SNL). The laboratories are premier science and technology research facilities, which conduct some of the nation’s most innovative research related to several national programs, including security, combustion and renewable energy, water resources and biosciences. The presence of the
EXHIBIT A
174
INTRODUCTORY SECTION
Transmittal Letter
CITY OF LIVERMORE
Page | 9
laboratories attract other technology and industrial companies as well as professional services businesses . In addition, one of the largest retail outlet malls in California is located in Livermore and is home to over 170 leading designer and name brand outlet stores.
The longest economic expansion in US history came abruptly to an end in March 2020 with emergence of the COVID-19 global pandemic. Once thriving businesses have seen their ability to generate revenue disappear overnight as the simple act of gathering with others has become a threat to public health. The State of California and the Alameda County issued Shelter in place directives to slow the spread of COVID -19 pandemic which continued in the current fiscal year.
Unemployment rate increased sharply with the closures of businesses, schools, and public buildings .
Livermore’s unemployment jumped to 13.6% in April 2020 exceeding the peak rate of 8.1% in January 2010 during the Great Recession. The unemployment rate has declined since the peak in April 2020 and was 5.9 percent in June 2021 compared to 11.2 percent in June 2020.
The City’s unemployment rate continued to rank below the average unemployment rates of the county ( 6.6%) and state (7.6%). Employment in Livermore has historically been less volatile due to the presence of major public sector employers and their contractors. Besides the City itself, two national laboratories, a school district, a community college, and a park and recreation district are major employers in the City. The following chart shows a 15-year comparison of unemployment rates in the state and local areas as well as the U.S. by fiscal year:
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 JUNE 30,
Unemployment Rate
U.S. State
County Livermore
Source: Bureau of Labor Statistics
A k
ey indicator of the local economy is retail sales. Sales tax revenues are highly sensitive to economic conditions such as levels of unemployment, job growth, consumer confidence, per-capita income, and tourism.
It is important to be aware that the City derives 2 0% of all sales tax revenue received from a very small geographic area which focuses upon retailing high- end consumer goods. Many shoppers are tourists visiting the San Francisco Bay area. The second quarter of 2020 was the most adversely impacted sales tax period due to the Covid-19 pandemic related restrictions on travel, indoor dining, and non- essential businesses. The City’s taxable sales (at point of sale) had dropped almost 40% in second quarter of 2020 compared to that of the 2019.
With the easing of restrictions, the local economy exhibited signs of improvement during the fiscal year ended June 30, 2021. Livermore’s taxable sales in second quarter of 2021 were 52% higher than the same quarter in 2020 with majority of gains coming from general consumer category. Online sales activity increased w ith the
EXHIBIT A
175
INTRODUCTORY SECTION
Transmittal Letter
CITY OF LIVERMORE
Page | 10
shift in consumer spending habits due to the pandemic, which boosted the City’s pool allocation by over 18 % from the previous fiscal year. While consumer spending may shift back to brick -and-mortar stores to some degree, the long-term trend indicates that online shopping will continue to grow. The chart below illustrates the City’s sales tax revenue for current fiscal year by major industry group.
Local
real estate market and property value assessment are key indicators of the local economy. Property tax is less volatile compared to sales tax. While the pandemic had adverse impacts on the City’s other revenue categories, so far property tax has not been significantly impacted from the pandemic. The City’s assessed property valuation increased by 5% to $21.6 billion in current fiscal year compared to 6% increase in last fiscal year.
Livermore’s real estate market has continued to strengthen during the current fiscal year. As reported by the East Bay Association of Realtors, the median sales price for a single-family residence in Livermore has surged 31 percent to $1,145,500 in June 2021 from $875,000 in June 2020 largely due to housing shortage combined with low interest rates.
Chapman University forecasters predict mortgage rates to rise to 3.9% and U.S. house prices to drop 3% by the fourth quarter of 2022 from the same quarter in 2021. Recently California passed the Senate Bill 9, which compels local governments to allo w high -density housing. This law will help ease the housing shortage in coming years.
State and
County Pools
23%
General Consumer
Goods
22%
Business and
Industry
20%
Autos and
Transportation
14%
Building and
Construction
9%
Restaurants
and Hotels
5%
Fuel and
Service Stations
5%
Food and
Drugs
2%
Source: HdL
EXHIBIT A
176
INTRODUCTORY SECTION
Transmittal Letter
CITY OF LIVERMORE
Page | 11
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
$900,000
$1,000,000
$1,100,000
$1,200,000
$1,300,000
Median Single family Home Prices
S
ource: East Bay Association of Realtors
T
he Conference Board forecasts that the US economy is set to grow 3.5% in 2022, after expanding by 5.6% in 2021, fueled by pent-up demand for consumer spending and business investment. However, emergence of the Delta and Omicron variant across the nation indicates that COVID-19 will continue to have a severe impact on people’s lives and livelihoods in 2022. In addition, high inflation fueled by strong consumer demand, supply - chain bottlenecks, and ongoing labor shortages have potential to become a major economic challenge.
A
lthough Livermore’s current financial picture is positive, there are plenty of reasons for concern when we look out further on the financial horizon. The City is on a steady financial course, but still strives to achieve lo ng- term financial stability, which is linked to adequately funding its long- term liabilities. While General Fund reserves are currently fully funded, COVID-19 impacts, future liabilities, investment in downtown development, homelessness crisis, increasing employee costs, and deferred infrastructure maintenance temper the City’s progress.
The single largest unaddressed financial challenge the City faces is the maintenance and replacement of its infrastructure. The City is in the process of developing a comprehensive infrastructure repair and replacement plan so that adequate resources are available when needed. In the meantime, Council directed staff to establish an Infrastructure Repair and Replacement Reserve to begin accumulating the resources necessary to address the City’s aging infrastructure as part of the Council goal and priority of Asset Management.
One of the City’s strategies to contain costs and leverage the buying power was to save, while the economy was doing well, so that resources are available during the economic downturn in order to take advantage of better pricing which typically occurs in this part of the cycle. The City will need approximately two billion dollars to replace general government infrastructure in addition to another billion dollars to replace infrastructure maintained by the enterprise funds. Staff currently estimates that the City (like many local governmental agencies in the nation) is underfunding infrastructure maintenance by several million dollars per year. The City has started funding a reserve with $2.0 million annually from General Fund. The City has accumulated $12.0 million in this reserve as of June 30, 2021.
EXHIBIT A
177
INTRODUCTORY SECTION
Transmittal Letter CITY OF LIVERMORE
Page | 12
Rising pension costs will continue to be a challenge for most public agencies. The City contributes t o the California Public Employees’ Retirement System (CalPERS) for its Miscellaneous and Safety Police retirement plans. Recently CalPERS changed its actuarial assumptions related to mortality rates as well as rate “smoothing assumptions”, with the effect of further increasing employer contribution rates. CalPERS has implemented a 20-year rate amortization and a five-year phase-in effective from fiscal year 2016-17. The City’s “second tier” pension plan (2% at 60) coupled with the Public Employee Pension Reform Act (PEPRA) will reduce employee pension costs in the long-term. The City staff will continue to monitor CalPERS changes and suggest prudent strategies to address these increases as the opportunities arise.
The FY 2021 -23 Financial Plan allocates approximately $13.5 million for General Fund resources for capital improvements, representing a significant investment in the Downtown in order to address the adopted City Council Goals and Priorities. With the Speedee Lube demolition and Veterans Way construction now complete, the remaining Downtown Development Plan projects contemplated as part of the General Fund include construction of the I Street parking structure, and Downtown surface parking. Other, non-Downtown related General Fund projects include decorative wall replacement, and Civic Center Meeting Hall.
The City of Livermore, along with the San Francisco Bay Area and much of California, is in the middle of a homelessness crisis. The prolonged economic expansion, low interest rates, and housing shortage has led to median home values skyrocketing throughout the Bay Area. As mentioned above, median home price for a single-family home is $ 1,145,500 on June 30, 202 1. To purchase a median priced home with 10% down requires approximately $114,550 for down payment, $34,365 for closing costs, and approximately $200,000 in annual household income. The average rent in Livermore for a two-bedroom apartment is approximately $2,500 per month. A household will need an annual average income of $100,000 to afford this level of rent.
A five-year Financial Plan for General Fund is included in the City’s adopted budget. This is a valuable financial planning management tool, especially in challenging financial times, which assists the City Council in setting priorities and educati ng the community on the long -term state of the City’s finances. Inflation and historical growth rates are used to predict levels of expenditures. The expenditure base and revenue base are then adjusted for discrete changes that may occur within the five -year forecast period such as the completion of a major project, addition of a major employer or retail center, or the loss of revenues due to State take -aways.
Perhaps the best measure of the City’s ability to withstand an economic downturn while maintaini ng current service levels and building sustained growth for the future is its level of fund balance reserves. In general, a city should maintain sufficient reserves to mitigate potential emergency scenarios. The City had committed to building and maintain ing General Fund reserves equal to at least 30% of annual General Fund budgeted expenditures and transfers related to debt service.
47%
44%
37%
34% 35%
29%
37%
38%
42%
50%
56%
60%
56%
60%
64%
FISCAL YEAR ENDING ON JUNE 30,
Ratio of Fund Balance to Total Expenditure s and Transfers -out
EXHIBIT A
178
INTRODUCTORY SECTION
Transmittal Letter
CITY OF LIVERMORE
Page | 13
As
part of the biennial budget process, the City Council sets goals and priorities for the two-year budget cycle.
Council goals comprise of high-priority tasks or programs that the City Council intends to address during the budget plan cycle, though attainment of these goals may take several years. The key initiatives included in the adopted biennial budget for FY 2021-23 are as follows:
1. Asset Management and Stormwater: Establish a comprehensive Asset Management Program with a focus on stormwater, ensuring the community continues to receive vital services through a sustainable infrastructure strategy.
2. Downtown: Enhance the City’s vibrancy by completing critical projects downtown, ensuring the right balance of local amenities to support quality of life.
3. General Plan Update: Comprehensively Update the Livermore General Plan, including the Housing Element and Programmatic Environmental Impact Report (EIR), to address changes in regional and state policy, market trends, and community preferences, to plan for growth and conservation for the next 25 years to support and enhance Livermore’s quality of life.
4. Homelessness and Affordable Housing: Establish a homelessness strategy, engaging local partners to develop a coordinated response, and expand diversity of affordable housing opportunities.
5. Modernization, Training and Workplace Enhancements: Develop a systematic approach to modernizing the City’s aging business systems, reviewing processes for alignment with industry best practices, and providing the City’s workforce with the tools and training necessary to effectively and efficiently de liver services to the community.
Three of the above priorities, Downtown, Asset Management, and Homeless and Affordable Housing are returning priorities from the previous budget cycle. The City has made extensive progress towards each of these priorities. Some of the achievements realized during the current fiscal year are as follows:
• The Stockmen’s park in the downtown area has been completed. • Construction of I Street Parking Garage has begun in April 2021. Project is scheduled for completion in Spring 2022.
• As of September 2021, $462,330 in federal COVID -19 rent relief funds have been disbursed to Livermore tenants.
• Construction for Chestnut Square Family Apartments, located at 1665 Chestnut Street, is a 42- unit affordable rental project is completed. Ten units will have a preference for homeless households. The project also has 8 units reserved for people with disabilities.
EXHIBIT A
179
INTRODUCTORY SECTION
Transmittal Letter
CITY OF LIVERMORE
Page | 14
• Coordinated with Alameda County and Cross Winds Church on the Goodness Village Project providing 28 tiny home units as well as wrap -around services to local community members experiencing homelessness.
Other
major developments projects include the following:
• Phase 1 of a hydrogen gas filling hub including liquid hydrogen offloading areas, a hydrogen holding tank, compressor equipment, filling stalls, parking, and a temporary office trailer on two vacant lots totaling approximately 178,500 square feet, west of National Drive. • 30,100 square foot automobile dealership (Subaru), including a service department, north side of Las Positas Rd next to Target.
• 186 townhome units ranging from two and three- stories on Lassen Road, northwest of I -580 and the First Street overpass.
• Pacific Avenue Affordable Housing Project consisting of 140 affordable senior housing rental units at the end of Pacific Avenue.
• A 128-unit, 112,195 square foot senior assisted living and memory care health facility located on the northern portion of the Sunset Office Plaza.
• Eden Housing in the Downtown Core, which consists of 130 affordable residential units in two four - story buildings with underground parking, Southeast corner of Railroad Avenue and South L Street. • 25,000 square foot warehouse building consisting of approximately 1,800 square feet of office space at 6776 Patterson Pass Road.
• A 6,600 square foot two- story residence, 3,880 square foot winery, 1,200 square foot accessory dwelling unit, and a 1,340 square foot cabana, in a building envelope within a 20-acre vineyard property at 247 East Vallecitos Road.
Fund Bala nce Policy: In June 2016, the City Council adopted a resolution updating the Livermore Fund Balance Policy to maintain the fiscal stability of the organization, to help maintain the City’s credit worthiness, and to provide funds for economic uncertainties, contingencies and cash flow requirements. The General Fund Financial Stabilization Operating Reserve is set at 15 percent of budgeted operating expenditures plus debt service transfers to be used in a catastrophic event or in a major emergency or in periods of severe fiscal crisis.
The General Fund Economic Uncertainty Reserve is set at 13.5 percent of budgeted operating expendit ures plus debt service transfers to be used during times of severe economic distress such as protracted recessionary periods, State raids on local resources, or other impactful unforeseen events which greatly diminish the financial
EXHIBIT A
180
INTRODUCTORY SECTION
Transmittal Letter
CITY OF LIVERMORE
Page | 15
ability of the City to deliver core services. Minimum unassigned fund balance is set at 1.5 percent of the budgeted operating expenditures plus transfers for debt service.
Infrastructure Repair and Replacement Funding : Beginning with the 2015- 16 fiscal year, the Council established an informal Infrastructure Repair and Replacement Reserve to begin accumulating the resources necessary to address the City’s aging infrastructure and facilities. The City has started to set aside $2 million annually of general fund discretionary resources towards Infrastructure Repair and Replacement Reserve.
Debt Management and Disclosure policy: The City’s Debt Management and Disclosure Policy is intended to ensure compliance by the City with all applicable federal and state securities laws and regulations; to achieve the highest practical credit ratings within the context of the City’s financing needs and financing capabili ties; and to establish maximum limits on the amounts of debt outstanding and the amount of annual debt service the City will consider. This policy sets a ceiling for the cumulative annual payments related to debt from the General Fund at 7.5 percent of the previous fiscal year's General Fund revenue.
Timeliness of Financial Reporting Practices: The City believes that time is of the essence in the publication of Budget and Annual Comprehensive Financial Report documents. The budget is adopted before June 30 and loaded into the financial system on the first day of the new fiscal year. The ACFR publication date is generally within 100 days of the close of the fiscal year. The City’s major financial documents are available on the web at www.cityoflivermore.net.
GFOA Financial Reporting Certificate of Achievement
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of
Achievement for Excellence in Financial Reporting to the City of Livermore for its annual comprehensive financial report for the fiscal year ended June 30, 2020 . This was the 32nd consecutive year that the City of Livermore has achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized annual comprehensive financial report. This report must satisfy both generally accepted accounting principles (GAAP) and applicable legal
requirements.
A C
ertificate of Achievement is valid for a period of one year only. We believe that our current annual comprehensive financial report continues to meet the Certificate of
Achievement Program’s requirements, and we are submitting it to GFOA to determine its eligibility for another certificate.
GFOA Popular Annual Financial Reporting Award
The City summarizes and presents key financial information contained in the City’s ACFR and other information, in an easy to read and understandable manner that includes multi- year graphs to show annual changes and trends in its Popular
EXHIBIT A
181
INTRODUCTORY SECTION
Transmittal Letter
CITY OF LIVERMORE
Page | 16
Annual Financial Report (PAFR). The City received the GFOA’s Award for Outstanding Achievement in Popular Annual Financial Reporting for its PAFR for the fiscal year ended on June 30, 2020 . This prestigious national award recognizes conformance with the highest standards for preparation of a state and local government popular reports. In order to receive this award, a government must publish a PAFR, whose contents conform to program standards of creativity, presentation, understandability, and reader appeal. An award for Outstanding Achievement in Popular Annual Financial Reporting is valid for a period of one year only.
Thi
s report represents the culmination of dedicated efforts by City staff both inside and outside of the Finance Division. The preparation of this report on a timely basis could not have been accomplished without the hard work and team effort of the entire financial reporting team. I wish to thank all departments for their assistance in providing t he data necessary to prepare this report. I would like to express my appreciation and thanks to Ahmad Gharaibeh and his staff at Eide Bailly LLP. Credit is also due to the mayor and the City Council members for their unfailing support for maintaining the highest standards of professionalism in the management of the City’s finances.
Very truly yours,
Bhav
na Chaudhary
Acting Administrative Services Director
EXHIBIT A
182
INTRODUCTORY SECTION
Directory of City Officials
CITY OF LIVERMORE
Annual Comprehensive Financial Report FY 2020-21
Page | 17
Directory of City Officials
As of June 30, 2021
Elected Officials
Executive Team
Marc Roberts Jason Alcala
City Manager City Attorney
Director of Administrative Services Douglas Alessio Director of Community Development Paul Spence
Director of Innovation & Economic Development Adam Van de Water Director of Library Services Anwan Baker
Director of Public Works Scott Lanphier
Interim Fire Chief Joe Testa
Police Chief Jeramy Young
`
EXHIBIT A 183
INTRODUCTORY SECTION
Organization Chart
CITY OF LIVERMORE
Annual Comprehensive Financial Report FY 2020-21
Page | 18
Organization Chart
As of June 30, 2021
Residents of
Livermore
Mayor/ City
Council
City Manager
Administrative
Services
City Clerk
Cybersecurity
Finance
Human
Resources
Information
Technology
Community
Development
Building &
Safety
Engineering
Housing &
Human Services
Planning
Fire Department
Administration &
Fire Protection
Emergency
Operations
Innovation and
Economic
Development
Library Services Police
Department
Horizons
Public Works
Airport
Maintenance
Water Resources
City Attorney
Risk
Management
EXHIBIT A
184
EXHIBIT A
185
EXHIBIT A
186
What inspires you, inspires us. | eidebailly.com
4040 Campbell Ave., Ste. 200 | Menlo Park, CA 94025-1053 | T 650.522.3400 | F 650.645.7393 | EOE
Independent Auditor’s Report
To Honorable Mayor and Members
of the City Council of the City of Livermore
Livermore, California
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business‐ type activities, each major fund, and the aggregate remaining fund information of the City of Livermore, California (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 as listed in the table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes 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.
Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whe ther the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the aud itor’s judgment, in cluding the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the City’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we express no such opinion. An audit al so includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
EXHIBIT A
187
Annual Comprehensive Financial Report FY 2020-21
Page | 22
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business‐type activities, each major fund, and the aggregate remaining fund information of the City, as of June 30, 2021, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Emphasis of Matter
As discussed in Note 1L and Note 9D to the financial statements, the City adopted Governmental Accounting Standards Bo ard (GASB) Statement No. 84, Fiduciary Activities, effective July 1, 2020. The adoption resulted in a restatement of the net position of Governmental Activities, the Custodial and Other Postemployment Benefits Trust Funds and a restatement of fund balance of the nonmajor governmental funds. Our opinions are not modified with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis o n pages 27 through 42, Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual for the General Fund and Low Income Housing Special Revenue Fund, schedule of the agent multiple employer plan’s changes in net pension liability and related ratios, schedule of the cost sharing plan’s proportionate share of the net pension liability, schedule of contributions for the agent multiple employer and cost sharing plans, schedule of changes in the net OPEB liability and related ratios, and schedule of OPEB contributions on pages 122 through 129, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s re sponses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
EXHIBIT A
188
Annual Comprehensive Financial Report FY 2020-21
Page | 23
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s financial statements. The introductory section, combining and individual fund financial statements and schedules, and statistical section are presented for purposes of additional analysis and are not a required part of the financial statements.
The combining and individual fund fina ncial statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual fund financial statements and schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole.
The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 30, 2021 on our consi deration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering City’s internal control over financial reporting and compliance.
Menlo Park, California
December 30, 2021
EXHIBIT A
189
EXHIBIT A
190
EXHIBIT A
191
EXHIBIT A
192
FINANCIAL SECTION
Management’s Discussion & Analysis
CITY OF LIVERMORE
Annual Comprehensive Financial Report FY 2020-21
Page | 27
MANAGEMENT’S DISCUSSION AND ANALYSIS
The purpose of the Management’s Discussion and Analysis is to offer to the reader of the City’s financial statements a narrative overview and analysis of the financial activities of the City of Livermore for the fiscal year ended June 30, 2021. The reader is encouraged to consider the information presented here in conjunction with the additional information furnished in the letter of transmittal, which can be found on pages 7-16 of this report.
(A) Financial Highlights
• The City implemented the GASB Statement No. 84, Fiduciary Activities which became effective during the current fiscal year. The implementation of the Statement required the City to record prior period adjustments. As a result, the beginning net positions of Custodial Funds were restated and increased by $5,681,919, and Governmental Funds and Governmental Activities were restated and increased by $3,232,769. In addition, the City removed the Private Purpose OPEB Trust Fund to be consistent with the treatment of plans held by agent multiple employer plans which resulted in a decrease of $32,250,629 in fiduciary net position. See Note 9D to the Financial Statements for more information.
• The assets and deferred outflows of resources of the City of Livermore exceeded it s liabilities and deferred inflows of resources at the close of the fiscal year 2021 by $641.0 million (net position). Of this amount, $34.0 million represents unrestricted net position, which may be used to meet the City’s ongoing obligations to citizens and creditors.
• The City’s net position increased 1.8 percent (or $11.5 million) for the current fiscal year to $641.0 million from a restated net position balance of $ 629.5 million in the prior fiscal year of which $10.0 million was generated by governmental activities and approximately $1.5 million was generated by business-type activities.
• The City’s Net OPEB liability dropped $12 million from $46.9 million in prior year to $34.9 million in current fiscal year, largely due to net investment income of $10 million.
• At the close of the current fiscal year, the City’s governmental funds reported combined fund balances of $196.0 million, an increase of $13.3 million from the prior fiscal year’s restated fund balance of $182.7 million. Approxi mately 12.5 percent of this amount ($2 4.5 million) is available for spending at the government’s discretion (unassigned fund balance).
• At the end of the current fiscal year, unrestricted fund balance (the total of the committed, assigned, and unassigned components of fund balance) for the general fund was $71.6 million, or approximately
60.7 percent of total general fund expenditures, and transfers out. (B) Overview of the Financial Statements
This discussion and analysis are intended to serve as an introduction to the City’s basic financial statements.
The City’s basic financial statements are comprised of three components: government -wide financial statements, fund financial statements , and notes to the basic financial statements. This report also c ontains supplementary information in addition to the basic financial statements.
Government-wide Financial Statements
The government-wide financial statements are designed to provide the reader with a broad overview of the City’s finances, in a manner similar to a private-sector business.
EXHIBIT A
193
FINANCIAL SECTION
Management’s Discussion & Analysis
CITY OF LIVERMORE
Annual Comprehensive Financial Report FY 2020-21
Page | 28
The Statement of Net Position presents information on all the City’s assets, deferred outflows, liabilities, and deferred inflows with the difference reported as Net Position. Over time, increases or decreases in Net Position may serve as a useful indicator of whether the financial position of the City is improving or declining.
The Statement of Activities presents information showing how the City’s Net Position changed during the most recent fiscal year. All chang es in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods. This is known as the full accrual basis of accounting.
Both of the government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues ( governmental activities) from other functions that are intended to recover all or most of their costs through user fees and charges ( business-type activities). The governmental activities of the City include the following functions: General Government ( city council, city manager, city attorney, city clerk, finance, human resources), fire, police, public services, community development, economic development, and library. The business-type activities of the City include airport, water, sewer, and stormwater.
The government-wide financial statements include not only the City itself (known as the primary government) but also the activities of its legally separate component unit, the Livermore Capital Projects Financing Authority (LCPFA). Since the City Council acts as the governing board for LCPFA and because this component unit functions as part of the City government, its activities are blended with those of the primary government. The government-wide financial statements can be found on pages 46-47 of this report.
Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been designated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All the funds of the City can be divided into three categories: governmental funds, proprietary funds and fiduciary funds.
Governmental Funds
Governmental funds are used to account for essentially the same functions reported as governmental activities in the government -wide financial statements. However, unlike the government -wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources , as well as on balances of spendable resources available at the end of the fiscal year. This information may be useful in evaluating the City’s near-term financial requirements. The basis of accounting in governmental funds is known as the modified accrual basis.
The focus of fund financial statements is narrower than that of government-wide financial statements. It is useful to compare the information presented for governmental funds with similar information pres ented for governmental activities in the government -wide financial statements. By doing so, the reader may better understand the long-term impact of the City’s near-term financing decisions.
Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures and changes in fund balances provide a reconciliation to facilitate the comparison between governmental funds and governmental activities. This is required because the government -wide statements are prepared on the full accrual basis of accounting while the fund statements are prepared on the modified accrual basis of accounting.
The governmental fund financial statements provide separate information for all major funds, while non- major funds are combined in a single column. In the FY 2020-21, the City identified two major governmental funds, which are the General Fund, and the Low-Income Housing Fund.
EXHIBIT A
194
FINANCIAL SECTION
Management’s Discussion & Analysis
CITY OF LIVERMORE
Annual Comprehensive Financial Report FY 2020-21
Page | 29
Proprietary Funds
The City maintains two different types of proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the government -wide financial statements. The City uses enterprise funds to account for its airport, water, sewer, and stormwater activities. Internal service funds are used to accumulate and allocate costs internally among the City’s various functi ons. The City uses internal service funds to account for the management of its retained risk for general liability and workers’ compensation, and for its fleet and equipment services, information technology, cybersecurity, and facilities rehabilitation.
Proprietary funds provide the same type of information as the government -wide financial statements, onl y in more detail. The proprietary fund financial statements provide separate information for all four of the City’s enterprise funds. These funds are Airport, Water, Sewer, and Stormwater. All of the City’s internal service funds are combined into a single, aggregated presentation in the propriety fund financial statements. Individual fund data for the internal service funds is provided in the Supplemental Information section of this report.
Fiduciary Statements
Fiduciary funds are used to account for resources held for the benefit of parties outside the government.
Fiduciary funds activities are excluded from the Cit y’s government-wide financial statements because the City cannot use these assets to finance its own operations.
The City maintains t wo different types of fiduciary funds. The Private- Purpose Trust Fund is used to account for the assets and liabilities held in trust for the Successor Agency to the former Redevelopment Agency; and Custodial Funds are used to account for monies collected and disbursed in a custodial capacity for the Livermore Pleasanton Fire District JPA and other agencies. The fiduciary fund financial statements can be found on pages 60-61.
Notes to the Basic Financial Statements
The notes to the basic financial statements provide important additional information that is essential to a full understanding of the data reported in the gov ernment-wide and fund financial stat ements. The notes to the basic financial Statements are found on pages 65-116.
Other Information
In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information related to the City’s changes in net pension liability, employer’s contribution to the pension plans, the Schedule of Changes in the City’s OPEB Liability, the Schedule of Contributions for other post-employment benefits, and the budgetary comparison schedules for major governmental funds. Required supplementary information can be found on pages 119-130.
Individual fund data for non- major governmental funds, internal services funds, and fiduciary funds are presented immediately following the required supplementary information beginning on pages 133-164 of this report.
EXHIBIT A
195
FINANCIAL SECTION
Management’s Discussion & Analysis
CITY OF LIVERMORE
Annual Comprehensive Financial Report FY 2020-21
Page | 30
(C) Government-wide Financial Analysis
As noted earlier, the City’s net position may serve over time as a useful indicator of whether the City’s financial position is improving or deteriorating. Other factors, such as market conditions, should be considered when measuring the City’s overall financial position. This analysis focuses on the net position and changes in net position of the City as a whole. In the case of the City, total government-wide assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $ 641.0 million, at the close of the most recent fiscal year.
Long‐term liabilities, which consist of claims, debt, compensated absences, pension, and postemployment benefit obligations, de creased by $2.3 million from the previous year for governmental and business ‐type activities combined. The City’s debt decreased by $1.4 million primarily due to the scheduled principal payments, as discussed later under Debt Administration section. The claims liability decreased $1. 2 million due to reduction in actuarially determined claims liability . The increase in the City’s total pension liability of $10.1 million was offset by a decline of $10.3 million in net OPEB liability.
2021 2020 2021 2020 2021 2020
Asse ts:
Current and other assets 229.1$ 216.6$ * 141.4$ 141.1$ 370.5$ 357.7$ Capital assets 375.2 375.7 152.5 152.6 527.7 528.3 Total as s ets 604.3 592.3 293.9 293.7 898.2 886.0 Total Deferred outflows of resources 25.2 24.0 3.5 3.2 28.7 27.2 Liabilities:
Long-term liabilities outstanding 220.6 223.2 33.3 33.0 253.9 256.2 Other liabilities 17.0 14.8 4.4 6.2 21.4 21.0 Total liabilities 237.6 238.0 37.7 39.2 275.3 277.2 Total Deferred inflows of resources 9.3 5.7 1.3 0.8 10.6 6.5 Net position:
Net investment in capital assets 316.6 316.4 144.5 144.5 461.1 460.9 Restricted 145.9 139.9 * - - 145.9 139.9 Unrestricted (79.9) (83.7) * 113.9 112.4 34.0 28.7 Total net position 382.6$ 372.6$ * 258.4$ 256.9$ 641.0$ 629.5$ * restated
Business-type activities Total
City of Livermore Net Position
(in Millions)
Governmental actitivies
By far, the largest portion of the City’s net position ($461.1 million or 71.9 percent) reflects its investment in capital assets (e.g., land, buildings, machinery, equipment, vehicles, and infrastructure), less any related outstanding debt that was used to acquire those assets. The City uses these capital assets to provide a variety of services to its citizens. Accordingly, these assets are not available for future spending. Although the City’s investment in capital assets is reported net of related debt, it should be noted that the resources used to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.
An additional portion of the City’s net position ( $145.9 million or 22.8 percent) represents resources that may be used only for specified capital projects, special revenue programs , or landscape and maintenance. The restrictions on these funds were placed there by outside agencies and are not subject to change by the City.
The remaining balance of $34.0 million or 5.3 percent is unrestricted and may be used to finance day -to-day operations without constraints established by debt covenants or other legal requirements or restrictions.
At the end of the current fiscal year, except for unrestricted net position, the City is able to report positive balances in all reported categories of net position, both for the government as a whole, as well as for its separate business-type activities. The unrestricted category for governmental activities had a deficit balance of $79.9 million as of the end of the current fiscal year. The deficit is caused primarily by the approximately $98.6 million
EXHIBIT A
196
FINANCIAL SECTION
Management’s Discussion & Analysis
CITY OF LIVERMORE
Annual Comprehensive Financial Report FY 2020-21
Page | 31
for the unfunded pension liabilities and $36.7 million in postemployment liabilities including the related deferred inflows and outflows of resources. The unfunded net pension liabilities and net OPEB liabilities will be funded annually in accordance with actuarially determined contribution rates. The positive component of the governmental unrestricted net position, excluding the effects of pension and OPEB liabilities, is $ 55.4 million and may be used to meet the City’s ongoing obligations to citizens and creditors.
Overall, the City’s net position increased by $11.5 million to $641.0 million in the current fiscal year from $629.5 million for the prior fiscal year. The reasons for this overall increase are discussed in the following sections for governmental activities and business-type activities.
2021 2020 2021 2020 2021 2020
Revenues
Program revenues:
Charges for services 13.3$ 17.0$ 48.1$ 46.4$ 61.4$ 63.4$ Operating contributions and grants 19.8 16.3 0.4 0.4 20.2 16.7 Capital grants and contributions 9.5 12.4 3.0 7.4 12.5 19.8 Total program revenues 42.6 45.7 51.5 54.2 94.1 99.9 General revenues:
Property taxes 38.9 37.8 - - 38.9 37.8 Sales taxes 35.4 32.9 - - 35.4 32.9 Other taxes 16.2 16.2 - - 16.2 16.2 Intergovernmental 9.4 9.0 - - 9.4 9.0 Investment income 1.6 8.5 0.4 3.3 2.0 11.8 Miscellaneous 6.4 6.0 - - 6.4 6.0 Change in value of investment in JPA - - - - - T otal general revenues 107.9 110.4 0.4 3.3 108.3 113.7 Total Revenues 150.5 156.1 51.9 57.5 202.4 213.6 Expens es
General Government 15.6 25.1 - - 15.6 25.1 Fire 24.4 22.0 - - 24.4 22.0 Police 40.4 37.3 - - 40.4 37.3 Public Works 21.7 19.7 - - 21.7 19.7 Community Development 24.8 32.6 - - 24.8 32.6 Economic Development 4.4 2.8 - - 4.4 2.8 Library 6.3 6.4 - - 6.3 6.4 Interest on long term debt 1.2 1.7 - - 1.2 1.7 Airport - - 4.0 4.2 4.0 4.2 Water - - 18.8 15.6 18.8 15.6 Sewer - - 24.0 24.0 24.0 24.0 Stormwater - - 5.3 5.2 5.3 5.2 Total expenses 138.8 147.6 52.1 49.0 190.9 196.6 Increase (Decrease) in Net Position
before transfers 11.7 8.5 (0.2) 8.5 11.5 17.0 Transfers, net (1.7) (0.3) 1.7 0.3 - - Changes in net position 10.0 8.2 1.5 8.8 11.5 17.0 Net Position-Beginning, as restated 372.6 * 361.2 256.9 248.1 629.5 609.3 Net Position-Ending 382.6 369.4 258.4 256.9 641.0 626.3 Net position adjustment - 3.2 - - - 3.2 Net position - Ending, as restated 382.6$ 372.6$ 258.4$ 256.9$ 641.0$ 629.5$ * restated
Governmental Activities Business-Type Activities Total
Changes in Net Position
(in Millions)
EXHIBIT A
197
FINANCIAL SECTION
Management’s Discussion & Analysis CITY OF LIVERMORE
A n n u a l C o m p r e h e n s i v e F i n a n c i a l R e p o r t FY 2020-21 Page | 32 Governmental Activities
The Statement of Activities presents program revenues and expenses, and general revenues in detail. The City’s governmental Net Position was $ 382.6 million on June 30, 202 1, an increase of $ 10.0 million over the restated 2020 balance of $372.6 million. During the current fiscal year, the City made a prior period adjustment in the Governmental Net position as required by the GASB Statement No. 84, Fiduciary Activities. See Note 9D to the Financial Statements for more information.
Total revenues of governmental activities were $150.5 million. The largest component of total revenue is taxes at $90.5 million, making up 60.1 percent of total revenues. As shown in table on the previous page, $42.6 million, or 28.3 percent, of the City’s Governmental revenue in the current year cam e from program revenues out of which charges for services accounted for 8.8 percent of total governmental revenues while Operating and Capital Grants made up 19.5 percent of the total governmental revenues.
Program revenues for governmental activities decreased by $ 3.1 million during the year mainly due to a reduction of $3.7 million and $2.9 million for charges of services and capital grants and contribution respectively, General revenues also experienced a decline of $2.5 million in the current year primarily due to a decline of $6.9 million in investment income. This loss was offset by gain in other categories which are discussed in further detail under the Fund Financial Statements Analysis.
The sources of the revenues shown previously are portrayed in the chart below by percentage for the Governmental Activities. The City’s reliance upon tax revenues is evident from the sources of revenue chart, indicating that more than half of the City’s total governmental activities revenue comes from general tax revenues. This is consistent with the nature and purpose of governmental funds, particularly in the General Fund, where programs are largely supported by general taxes.
Citywide Governmental Activities
Total expenses were $138.8 million in the current fiscal year, a decrease of $8.7 million from the prior year.
The largest increase was in public safety for Police and Fire of $5.5 million followed by reductions in General Government and Community Development of $8.0 and $7.8 million, respectively.
The Functional Expenses chart above shows Police and Fire accounted for 46.2 percent of total governmental expenses while Community Development accounted for 17.6 percent, Public Works 15.4 percent and other governmental programs 20.8 percent.
EXHIBIT A
198
FINANCIAL SECTION
Management’s Discussion & Analysis CITY OF LIVERMORE
A n n u a l C o m p r e h e n s i v e F i n a n c i a l R e p o r t FY 2020-21 Page | 33 As shown in the graph below, during the current fiscal year, the cost of all activitie s except for Community Development exceeded the revenue generated by those programs. This is to be expected as other general sources of revenues such as property taxes, sales taxes, other taxes, and investment income are used to subsidize the gap between program expenditures and program revenues. $3.9 $1.2 $2.9 $4.4
$30.1
$0.0 $0.2 $0.0
$15.6
$24.4
$40.4
$21.7 $24.8
$4.4 $6.3
$1.2
$0
$10
$20
$30
$40
$50
General
Government
Fire Police Public Works Community
Development
Economic
Development
Library Interest on
long-
term debt
MILLIONS
Program Revenues and Expenses -
Governmental Activities
Revenues
Expenses
Business-type Activities
For the City’s business-type activities, the results for the current fiscal year were positive in that the overall net position increased to reach an ending balance of $258.4 million. The total increase in net position for business- type activities was $1.5 million or 0.6 percent from the prior fiscal year. Overall business type program revenues decreased by $ 2.7 million from the prior year level of $ 54.2 million to $ 51.5 million in the current fiscal year.
The decrease was mostly due to a decline of $4.4 million in capital grants and contributions partially offset by increase of $1.7 million in charges for services associated with increase in annual water and sewer rates as well as a increase in water consumption.
Program expenses increased by $3.1 million to a total of $ 52.2 million in the current year. The reason for increase is related to higher costs of water, and repair of the HVAC system and roof of occupied buildings at the Water Reclamation Plant.
$4.0
$18.8
$24.0
$5.3 $4.1
$17.7
$27.9
$1.5
$0
$5
$10
$15
$20
$25
$30
Airport Water Sewer Stormwater
MILLIONS
Program Revenues & Expenses - Business Actitivitie s
Expenses
Program Revenues
EXHIBIT A
199
FINANCIAL SECTION
Management’s Discussion & Analysis
CITY OF LIVERMORE
Annual Comprehensive Financial Report FY 2020-21
Page | 34
(D) Analysis of the Fund Statements
The table below summarizes the activities and balances of governmental funds. As of June 30, 2021, the City’s governmental funds reported combined fund balances of $196.0 million, an increase of $13.3 million from the prior year restated ending fund balance of $182.7 million. Approximately 12.5 percent of this amount ($24.5 million) is available for spending at the government’s discretion (unassigned fund balance). See Note 9 for detailed classifications of the City’s governmental fund balances.
During the current fiscal year, the City experienced an overall decrease of $ 0.4 million in revenues for the governmental funds primarily due to the rise in the property tax and sales tax offset by the decline in charges for services and interest income revenues.
Governmental Funds 2021 2020
Total assets 245.5$ 230. 4$ *
Total liabilities 19.8 17. 9
Total deferred inflows 29.7 29.8
Total fund balances 196.0 182.7 *
Total revenues 149.8 150.2
Total expenditures 134.7 144.5
Total other financing sources (uses) (1.8) (0.8) * restated
Financial Highlights at Fund Level at June 30
(in Millions)
The following are contributing factors affecting the revenues this fiscal year:
• Property tax revenues grew $1.9 million in the current fiscal year primarily from assessed valuation growth.
• Overall sales tax revenues increased approximately $2.5 million compared to the prior fiscal year because businesses started to reopen, and the City received the sales tax payments from small businesses that were deferred due to the COVID-19 pandemic.
• Charges of services decreased by $7.6 million mainly due to a decrease in Park Fee Special Revenue Fund and Traffic Impact Fee Capital Projects Fund by $3.1 million and $3.0 million, respectively. General Fund also decreased by approximately $0.7 million due to decrease in cost recovery fees.
• Development related revenues contributions from outside sources increased by $2.5 million mainly due to receiving the contribution from Alameda County for the Tiny Homes Project.
In fiscal year 2020 -21 expenditures for governmental funds totaled $134.7 million, a decrease of $9.8 million (or 6.8%) from the fiscal year 2019-20 total of $144.5 million. A major contributor of this decline was a decrease in community development expenditures and debt service payments . Community development expenditures decreased by approximately $8.6 million mainly due to the COVID-19 sheltering in place measures. Most of the decreases were realized in expenditures associated with to temporary staff, overtime, contractual services, issuance of new housing loans, and deferment of several project s. Community development expenditures in Park Fee special revenue fund were at $0.2 million for the current fiscal year compared to $4.0 million in the prior year, a decrease of $3.8 million, due to the completion of certain projects in the prior fiscal year.
Debt service payments decreased by $3.5 million since there was no principal due in the current year on the 2020 Certificates of Participations issued at the end of prior fiscal year.
EXHIBIT A
200
FINANCIAL SECTION
Management’s Discussion & Analysis
CITY OF LIVERMORE
A n n u a l C o m p r e h e n s i v e F i n a n c i a l R e p o r t FY 2020-21
Page | 35
Analyses of Major Governmental Funds
General Fund
The General Fund is the chief operating fund of the City of Livermore. At the end of the current fiscal year, the total fund balance of the General Fund was $77.2 million, out of which $24.5 million was unassigned.
As a measure of the general fund liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total general fund expenditures and transfers-out. The unassigned fund balance of $24.5 million represents approximately 20.8 percent of total general fund expenditures and transfers out, while the total fund balance of $77.2 million represents approximately 65.5 percent of the same amount.
The non-spendable fund balance of $5.6 million represents balances set aside to indicate items do not represent available, spendable resources. The Committed Fund Balance of $ 17.4 million represents Financial Stabilization Operating Reserve which only to be used in a catastrophic event, major emergency, or in periods of severe fiscal crisis. The Assigned General Fund Balance of $ 29.7 million represents the Economic Uncertainty Reserve and Infrastructure Replacement reserve. The Economic Uncertainty Reserve will be used during times of protracted recessionary periods. See Note 9 for further information.
Fund Balance Categories- General Fund
$-
$5
$10
$15
$20
$25
$30
$35
Nonspendable Committed Assigned Unassigned
MILLIONS
2021
2020
Local taxes, including property tax, sales taxes, transient occupancy tax, and business license taxes are the primary revenue source for the General Fund, constituting 72.6 percent of revenues in the fiscal year 2020-21.
These revenue sources are highly susceptible to economic fluctuations.
The General Fund revenues were $1 24.6 million in the fiscal year 202 0-21, a $6.2 million increase from the prior fiscal year amount of $118.4 million. As discussed in detail under “The City’s Fund Financial Statements”, increase mainly came from property tax, sales tax, contribution from outside sources, and intergovernmental revenue categories while use of money and property and charges for services decreased from the prior year.
The increase in intergovernmental revenues is largely associated with the American Rescue Plan Act (ARPA) funding of $4.2 million recognized as revenue in current fiscal year.
EXHIBIT A
201
FINANCIAL SECTION
Management’s Discussion & Analysis
CITY OF LIVERMORE
Annual Comprehensive Financial Report FY 2020-21
Page | 36
2021 2020
REVENUES
Property taxes and special assessments $38.9 $37. 4
Sales Taxes 35.4 32.9
Other taxes 16.2 16.3
Licenses and permits 2.6 2.4
Intergovernmental 15.3 10.3
Contributions from outside sources 3.0 0.0
Fines and forfeitures 0.4 0.5
Charges for current services 8.0 8.6
Use of money and property 4.4 9.7
Miscellaneous 0.4 0.4
Total Revenues 124.6 118.5
EXPENDITURES
Current:
General Government: 13.8 16.6
Fire 22.7 22. 0
Police 38.1 36.2
Public Works 7.9 7.3
Community Development 17.8 15.2
Economic Development 4.4 2.8
Library 5.5 5.8
Capital Outlay 3.5 3. 3
Total Expenditures 113.7 109.2
EX CESS (DEFICIENCY) OF REVENUES
OVER EX PENDITURES 10.9 9.3
OTHER FINANCING SOURCES (USES)
Transfers in 0.5 0.7
Transfers (out) -4.2 -5.0
Total Other Financing Sources (Uses) -3.7 -4.3
NET CHANGE IN FUND BALANCES 7.2 5.0
FUND BALANCES- BEGINNING 70.0 65.0
FUND BALANCES- ENDING $77.2 $70.0
General Fund
Statement of Revenues, Expenditures And Changes In Fund Balances (in Millions)
T
he table on the following page shows the original budget, final amended budget, and the actual results for the current fiscal year. The original budget was amended to reflect the change in economic expectations between the adoption of the original and final budget. The variances computed are between the final budget and actual results.
G
eneral Fund sales tax revenues were $4.1 million higher than the budgeted amounts. This was primarily due to businesses being able to reopen and receipts of deferred tax amounts from the prior year sales which helped businesses to mitigate cash flow issues arising from the pandemic: Other taxes had an increase of $2.1 million in revenues, $1.0 million can be attributed to the growth in Business License tax from new additions to the tax base, $0.5 million from an increase in real property transfer tax, and $0.3 million increase in franchise fees for the fiscal year.
EXHIBIT A
202
FINANCIAL SECTION
Management’s Discussion & Analysis
CITY OF LIVERMORE
Annual Comprehensive Financial Report FY 2020-21
Page | 37
From an expenditure perspective, total expenditures and transfers out came under budget. Expenditures for all departments were under budget for the fiscal year primarily due to vacant position as well as reduction in temporary employee expenses, and overtime costs as an impact of the COVID -19 sheltering at home measures. The General Government, capital projects, Police department expenditures, and transfers out accounted for $4.7 million of the total $6.4 million under budget.
Original Budget Final Budget A ctual
Variance Final
Budget to Actual
P
ositive/
(Negative)
Variance
Final
B
udget to
Actual (%)
R evenues and transfers in:
Property taxes $37. 0 $39.3 $38.9 -$0.4 -1.0%
Sales taxes 30.9 31.3 35.4 4.1 13.10%
Other taxes 15.3 14.1 16.2 2.1 14.89%
Licenses and permits 2.2 2.7 2.6 -0.1 -3.70%
Intergovernmental 10.8 15.7 15.3 -0.4 -2.55%
Contritbutions from outside sources 0.0 3.0 3.0 0.0 0.00% Fines and forfeitures 0.4 0.3 0.4 0.1 33.33%
Charges for current services 7.5 8.0 8.0 0.0 0.00%
Use of money and property 5.7 3.8 4.4 0.6 15.79%
Miscellaneous 0.4 0.4 0.4 0.0 0.00%
Total revenues 110.2 118.6 124.6 6.0 5.1%-
Transfers in 2.1 2. 8 0.5 -2.3 -82.14%
Total revenues and transfers in $112.3 $121.4 $125.1 $3.7 3.05% E xpenditures and transfers out:
General Government: $14.0 $15.3 $13.8 $1.5 9.8%
City Council 0.2 0.4 0.3 0.1 25.0%
City Manager 2.1 2.1 2.1 0.0 0.0%
City Attorney 2.0 2.1 1.9 0.2 9.5%
Adminstrative Services 6.4 6.9 6.5 0.4 5.8%
General Services 3.3 3.8 3.0 0.8 21.1%
Fire 23.2 23.1 22.8 0.3 1.3%
Police 40.0 39.0 38.1 0.9 2.3%
Public Works 9.5 8.1 7.9 0.2 2.5%
Community Development 17.0 18.5 17.8 0.7 3.8%
Economic Development 3.4 4.5 4.4 0.1 2.2%
Library 6.3 5.9 5.5 0.4 6.8%
Capital projects 7.5 5.0 3.5 1.5 30.0%
Total expenditures 120.9 119.4 113.8 5.6 4.7%
Transfers out 4.7 5.0 4.2 0.8 16.0%
Total expenditures and transfers out $125.6 $124.4 $118.0 $6.4 5.14% General Fund Budgetary and Actual Variance Analysis
(in Millions)
EXHIBIT A
203
FINANCIAL SECTION
Management’s Discussion & Analysis
CITY OF LIVERMORE
Annual Comprehensive Financial Report FY 2020-21
Page | 38
Low Income Housing Fund
This fund is established to account for the receipt and disbursement of in- lieu low-income housing impact fees collected from developers and used to finance affordable housing developed offsite. In the current year revenues and expenditures decreased by $1.1 million and $2.1 million, respectively, over the prior year. Use of money and property revenues were down by $1. 1 million in the current fiscal year; the variance is mainly due to not having any gains from sale of properties in the current year, whereas in the prior year, the gain on sale of properties totaled to $0.8 million. Additionally, investment income in the current year was down $0.2 million due to lower market yields. The decrease in expenditures is cyclical in nature; in the prior year, higher level of new housing development loans was issued which was not the case in the current year.
Analysis of Major Enterprise Funds
Airport Fund
The Livermore Municipal Airport is a General Aviation Reliever Airport, which serves private, business, and corporate tenants and customers. Airport revenues are primarily comprised of short-and medium-term hangar and tie-down space rents as well as Fixed Base Operator (FBO) and approved non-aeronautical ground rents.
The Airport leases 393 hangar units and has approximately 150 aircraft tie-down spaces. Approximately 500 aircraft are currently based at the Airport and all hangar units are occupied.
Overall total revenues and expenses were consistent with those in prior fiscal year.
Water Fund
The Water Enterprise purchases potable water from water wholesaler Zone 7 Water Agency, and t hen distributes the water to customers in the Livermore Municipal Water service area. The City’s municipal water service area has a combined residential and commercial customer base of approximately 10,600 water accounts. Each water bill consists of a flat rate City meter service charge based on the size of meter that is located at the property (fixed charge), a City consumption charge for water used at the property (variable charge), and pass-through of wholesale water charges. Effective January 1, 2017, the wholesale rate structure was changed by Zone 7 to include fixed and volume-based rates.
Water revenues increased slightly by $0.8 million in the current fiscal year to $17.6 million from $16.8 million in the prior fiscal year. This variance resulted from a combination of increased water consumption and annual rate increases. Operating expenses were $2.9 million higher compared to prior year expenses, primarily due to increases in personnel and water purchase costs. Personnel related costs were higher in the current fiscal year due to reallocation of employees among the Water, Sewer, and Stormwater Enterprise Funds. Capital contributions (conveyed property) declined by $1.9 million which was related to acceptance of water public improvements in prior fiscal year when Shea and Ponderosa Homes development projects were completed.
Connection fees revenue stayed depressed which was likely due to a slowdown in construction related to the COVID-19 pandemic.
Sewer Fund
The Sewer Enterprise is responsible for the operation, maintenance, and periodic replacement of the City’s sewer, collection system, wastewater treatment and recycled water production systems. It operates and maintains the Livermore Water Reclamation Plant, which provides wastewater treatment and disposal, and produces recycled water for landscape irrigation and other uses. The Plant currently treats approximately 5.5 million gallons of wastewater each day from throughout the Livermore area.
The Sewer Fund’s net operating income amounted to $1.9 million in the current fiscal year compared to $0.1 million in fiscal year 2019-20. Operating revenues were $1.1 million higher in the current year, primarily due to
EXHIBIT A
204
FINANCIAL SECTION
Management’s Discussion & Analysis
CITY OF LIVERMORE
Annual Comprehensive Financial Report FY 2020-21
Page | 39
an increase in sewer rates. Revenue is expected to continue to rise as the City Council has approved rate increases in each of the next four fiscal years. Operating expenses of $23.6 million experienced a slight decrease of $0.7 million from $24.3 million in the prior year. A decrease in cost of sales, salaries, and benefits of $2.5 million was partially offset by an increase of $1.7 million of repairs and maintenance expense. Personnel related costs were lower in the current fiscal year due to existing vacancies and reallocation of employees among the Water, Sewer, and Stormwater Enterprise Funds. Repairs and maintenance expenses were higher in the current fiscal year as the aeration tank and emergency generator projects were completed, and the remodel of the reverse osmosis building was started.
Sewer connection fees revenue experienced a slight increase of $0.6 million while contribution revenue for conveyed properties dropped $0.4 million compared to prior year. These changes are likely due to timing of issuance of permits and completion of residential and commercial development projects.
Stormwater Fund
The Stormwater Enterprise is responsible for costs associated with the implementation of the City’s stormwater management and discharge control program along with the operation and periodic replacement of the stormwater conveyance system. Operating revenues of $1.1 million remained flat while capital contributions and capital grants dropped by $1.3 million each. Capital contributions in the prior fiscal year were related to storm drain public improvements conveyed to the City upon completion of new development projects from Shea and Ponderosa Homes. The reduction in capital grants revenue was due to delay in the Storm Damage project because of COVID-19 pandemic related constraints.
Operational expenses of $5.3 million was comparable to those in the previous fiscal year. Cost of sales, salaries, and benefits increased $1.1 million which was offset by decreases in expenses related to materials, depreciation, and repairs and maintenance. Decreases in material costs, and repairs and maintenance expense were due to a deferral of the Storm Drain Trash Capture Device and 2017 Storm Damage Repair projects into future years. Personnel related expenses in the current fiscal year were higher due to reallocation of employees among the Water, Sewer, and Stormwater Enterprise Funds.
(E) Capital Assets
GASB 34 requires the City to record all its capital assets including infrastructure. Infrastructure includes roads, bridges, signals, and similar assets used by the entire population. The City depreciates all its capital assets over their estimated useful lives, as required by GASB 34. The purpose of depreciation is to spread the cost of a capital asset over the years of its useful life so that an allocable portion of the cost of the asset is borne by all users.
The City’s investment in capital assets for its governmental and business -type activities as of June 30, 20 21, amounts to $526.7 million (net of accumulated depreciation). This investment in capital assets includes land, buildings, machinery, equipment, vehicles, roads, highways, and the water reclamation plant. At the end of fiscal years 2020-21 and 2019-20, the cost of capital assets recorded on the City’s financial statements was as shown in the table as following:
EXHIBIT A
205
FINANCIAL SECTION
Management’s Discussion & Analysis
CITY OF LIVERMORE
Annual Comprehensive Financial Report FY 2020-21
Page | 40
2021 2020 2021 2020 2021 2020
Land and Land I
mprovements 39.0$ 39.0$ 14.0$ 14.0$ 53.0$ 53.0$ Intangible Assets 4.5 4.5 - - 4.5 4.5 Construction in progress 97.2 86.5 36.1 29.4 133.3 115.9 Buildings 118.1 118.1 22.7 22.7 140.8 140.8 Equipment and vehicles 41.2 40.5 4.6 4.6 45.8 45.1 Infrastructure 340.8 339.9 - - 340.8 339.9 Airport Infrastructure - - 11.6 11.6 11.6 11.6 Water Infrastructure - - 50.9 50.9 50.9 50.9 Sewer Infrastructure - - 133.3 133.0 133.3 133.0 Stormwater Infrastructure - - 106.6 106.5 106.6 106.5 Less accumulated depreciation (265.6) (252.8) (227.3) (220.1) (492.9) (472.9) Totals 375.2$ 375.7$ 152.5$ 152.6$ 527.7$ 528.3$ Governmental actitivies Business-type activities Total
Capital As s ets at Year-end
(in Millions)
The total capital assets for the current fiscal year decreased approximately $0.6 million (or 0.1 percent) due to depreciation being greater than new assets added. Major capital asset events during the current fiscal year included the following:
• C onstruction in progress for governmental activities grew $10.5 million which included $2.7 million for the I Street Garage and Land Acquisition project, $1.8 million for the 2018 Arterial Street Rehab Project, and $1.2 million for the Livermorium and Stockmen’s Parks.
• The addition of $6.8 million in construction in progress within business-type activities included approximately $3.6 million for the Phase II of Sewer Treatment Plant Aeration Tank Modifications.
Additional information on capital assets may be found in Note 6 on pages 82-84 of this report.
(F) Debt Administration
Each of the City’s debt issues is discussed in detail in Note 7 to the financial statements. As of June 30, 2021, and 2020, the City’s debt comprised the following:
2021 2020 2021 2020 2021 2020
Certificates of Participation 50.3$ 50.9$ 7.7$ 7.8$ 58.0$ 58.7$ Notes payable 1.4 1.5 - - 1.4 1.5 Capital Leases 6.9 7.6 0.3 0.3 7.2 7.9 Totals 58.6$ 60.0$ 8.0$ 8.1$ 66.6$ 68.1$ Governmental actitivies Business-type activities Total
Outstanding Debt
(in Millions)
The outstanding debt in the current fiscal year decreased $1.4 million and $0.1 million for the governmental activities and business type activities respectively. This decrease is primarily due to the amortization of the premium for the 2020 Certificates of Participation (COP), and scheduled principal payments for the notes payable and capital lease. There was no principal payment due in the current year for the 2020 COP. Refer to Footnote 7 for further information.
In June 2020, the S&P global rating services reaffirmed the City’s bond ratings at AA despite t he risk of recessionary impact of COVID -19 on the City’s revenues. The credit reports highlighted the City’s consistent positive financial performance, strong reserves, and unassigned fund balance, as well as strong management throughout economic cycles.
EXHIBIT A
206
FINANCIAL SECTION
Management’s Discussion & Analysis
CITY OF LIVERMORE
Annual Comprehensive Financial Report FY 2020-21
Page | 41
(G) Economic Factors and Next Year’s Budget
The economic factors affecting the City and long-term financial plan are discussed in detail in the accompanying Transmittal Letter.
As the COVID -19 pandemic event unfolds, the potential long- term fiscal impacts to the City cannot yet be accurately projected. The City will reevaluate these forecasts as the progression of COVID -19 related events evolve. The FY 2021 -22 and FY 2022- 23 Budget reflects a slow recovery with cautious optimism about emerging from the worst of the COVID-19 pandemic event. However, a wide variety of programs and initiatives are supported by the City’s healthy fund balance. The importance of a healthy reserves and fund balance has been stressed even more by the COVID-19 pandemic.
The total appropriation for FY 2021-22 is $285.5 million for all City activities, including funding for fund balance reserves. The FY 2020-21 budget continues to provide resources for the City’s long-term obligations, including fleet and information technology replacement needs, capital improvements, and other post -employment benefits.
Property tax revenue in FY 2021- 22 is projected to be $41.4 million, an increase of 6%, or $2.5 million, compared to current year’s actual revenue as property values are expected to continue to rise because of housing shortage and additional development. Sales tax is projected to be $34.1 million, an increase of 9%, or $2.9 million, for the next fiscal year compared to the current year’s budgeted revenue. Actual sales tax revenue for the current fiscal year exceeded the budgeted amount partially due to receipts of deferred tax amounts in previous fiscal year . The City will e valuate the local economic conditions as well as the City’s portfolio of the sales tax producers, and revise the sales tax forecast in next budget cycle, as appropriate. Transient occupancy tax is expected to grow from $1. 9 million of actual revenue in fiscal year 2020- 21 to $2.65 for the next fiscal year. Other revenues have also been projected slightly upwards to reflect anticipated increase in demand for services.
The General Fund budget for FY 2020-21 provides $126.7 million in resources, including $4.85 million from the American Rescue Plan Act of 2021 (ARPA), and $137 .2 million in uses, including $13.4 million for the Capital Improvement Plan (CIP). The Proposed Financial Plan Update shows a General Fund budget shortfall of $10.4 million in FY 2021-22 that will require use of the accumulated fund balance. This shortfall reflects the short-term impacts of COVID-19 and the additional resources needed for large- scale capital infrastructure improvements related to the development of t he City -owned catalyst sites in Downtown, as well as contribution to the Stormwater Enterprise Fund for unfunded mandates imposed by the State.
The General Fund’s operating expenditures are projected to grow $3.3 million to $117.0 million from FY 2020- 21 actual expenditures of $113.7 million with anticipated increas es in employment-related costs, consulting services and other costs associated with the downtown development process, as well as the undertaking of other important projects such as the General Plan Update, Housing Plan Update, and asset management - related efforts.
The fund balance for the General Fund at the end of operations for FY 2021-22 is estimated at $ 56.6 million with $52.1 million in reserves and $4.5 million in spendable fund balance available for appropriations.
(H) Requests for Information
The Annual Comprehensive Financial Report is intended to provide a general overview of the City’s finances for readers of the financial statements. Questions concerning any of the information in this report or requests for additional financial information should be addressed to the Administrative Services Director, 1052 South Livermore Avenue, Livermore, CA 94550-4899.
EXHIBIT A
207
EXHIBIT A
208
EXHIBIT A
209
EXHIBIT A
210
FINANCIAL SECTION
Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensive Financial Report FY 2020-21
Page | 45
Government-Wide Financial Statements
Statement of Net Position and Activities
The Statement of Net Position and the Statement of Activities summarize the entire City’s financial activities and financial position. They are prepared on the same basis as is used by most businesses, which means they include all the City’s assets, deferred outflows, liabilities, and deferred inflows as well as all its revenues and expenses.
This is known as the full accrual basis—the effect of all the City’s transactions is considered, regardless of whether or when cash changes hands, but all material internal transactions between City funds have been eliminated.
The Statement of Net Position reports the City’s total assets, liabilities, and deferred inflows/outflows of resources including all the City’s capital assets and all its long-term debt. The Statement of Net Position presents similar information in a way that focuses the reader on the composition of the City’s Net Position, by subtracting total liabilities and deferred inflows of resources from total assets and deferred outflows of resources.
The Statement of Net Position summarizes the financial position of the entire City’s Governmental Activities in a single column and the financial position of the entire City’s Business-Type Activities in a single column. These columns are followed by a Total column that presents the financial position of the entire City.
The City’s Governmental Activities include the activities of its General Fund, along with all its Special Revenue, Capital Projects, and Debt Service Funds. Since the City’s Internal Service Funds service these Funds, their activities are consolidated with Governmental Activities, after eliminating inter -fund transactions and balances.
The City’s Business-Type Activities include all its Enterprise Fund activities.
The Statement of Activities reports increases and decreases in the City’s Net Position. It is also prepared on the full accrual basis, which means it includes all the City’s revenues and all its expenses, regardless of when cash changes hands. This differs from the “modified accrual” basis used in the governmental Fund financial statements, which reflect only current assets, current liabilities, measurable and available revenues , and measurable expenditures.
The format of the Statement of Activities presents the City’s expenses first, listed by program, and follows these with the expenses of its business -type activities. Program revenues —that is, revenues which are generated directly by these programs —are then deducted from program expenses to arrive at the net expense of each governmental and business-type program. The City’s general revenues are then listed in the Governmental Activities or Business-type Activities column, as appropriate, and the Change in Net Position is computed and reconciled with the Statement of Net Position.
Both these Statements include the financial activities of the City as well as the Livermore Capital Projects Financing Authority, which is a legally separate but is a component unit of the City because it is controlled by the City, which is financially accountable for its activities.
These financial statements along with the fund financial statements and footnotes are called Basic Financial Statements.
EXHIBIT A
211
FINANCIAL SECTION
Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensive Financial Report FY 2020-21
Page | 46
Governmental Business-Type
Activities Activities Total
ASSETS
Cash and investments in City Treasury (Note 3) 215,386,234$ 115,001,812$ 330,388,046$ Cash and investments with Trustees (Note 3) 692,717 - 692,717 Accounts receivables, net 14,089,200 7,125,032 21,214,232 I
nterest receivable 1,278,834 - 1,278,834 Inventory 315,693 - 315,693 Internal balances (Note 4D) (32,986) 32,986 - Prepaids, deposits and supplies 153,247 88,668 241,915 Notes receivable (Note 5) 30,210,677 - 30,210,677 Investment (Deficit) in JPA Equity (Note 13A and 13D) (44,265,779) 19,187,078 (25,078,701) Land held for investment (Note 1J) 11,321,586 - 11,321,586 Land, easements and construction in progress (Note 6) 140,739,890 50,168,661 190,908,551 Capital assets, net of accumulated depreciation (Note 6) 234,448,957 102,344,623 336,793,580 Total Assets 604,338,270 293,948,860 898,287,130
DEFERRED OUTFLOWS OF RESOURCES
Related to pension (Notes 10) 24,611,892 3,384,112 27,996,004 Related to OPEB (Notes 11) 613,347 105,160 718,507 Total Deferred Outflows of Resources 25,225,239 3,489,272 28,714,511
LIABILITIES
Accounts payable and other accruals 6,465,151 3,235,546 9,700,697 Accrued payroll 1,739,964 307,790 2,047,754 Interest payable 450,144 65,676 515,820 Deposit payable and unearned revenue 8,426,807 809,977 9,236,784 Non-current liabilities:
Due within one year:
Claims payable (Note 14B) 1,310,000 - 1,310,000 Accrued compensated absences (Note 7D) 1,266,330 237,378 1,503,708 Long-term debt (Note 7) 4,133,755 512,637 4,646,392 Due in more than one year:
Claims payable (Note 14B) 5,365,491 - 5,365,491 Accrued compensated absences (Note 7D) 2,923,336 427,431 3,350,767 Long-term debt (Note 7) 54,438,570 7,454,849 61,893,419 Net pension liability (Note 10) 121,388,109 19,576,732 140,964,841 Net OPEB liabilities (Note 11) 29,777,480 5,105,470 34,882,950 Total Liabilities 237,685,137 37,733,486 275,418,623
DEFERRED INFLOWS OF RESOURCES
Related to pension (Notes 10) 1,803,939 - 1,803,939 Related to OPEB (Notes 11) 7,499,499 1,285,820 8,785,319 Total Deferred Inflows of Resources 9,303,438 1,285,820 10,589,258 NET POSITION (Note 9)
Net investment in capital assets 316,616,522 144,545,798 461,162,320 Restricted:
Capital improvement programs 45,537,255 - 45,537,255 Landscape and Maintenance 12,314,954 - 12,314,954 Affordable Housing 51,221,030 - 51,221,030 Park fee 8,500,942 - 8,500,942 Art programs 2,363,818 - 2,363,818 Grant programs 6,384,510 - 6, 384,510 Gas tax and other transportation programs 16,094,748 - 16,094,748 Community services 2,984,059 - 2,984,059 Nonexpendable endowment fund 506,524 - 506,524 Unrestricted (79,949,428) 113,873,028 33,923,600 Total Net Position 382,574,934$ 258,418,826$ 640,993,760$ See accompanying notes to financial statements
STATEMENT OF NET POSITION
JUNE 30, 2021
EXHIBIT A
212
FINANCIAL SECTION
Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensive Financial Report FY 2020-21
Page | 47
Net (Expense) Revenue and
Program Revenues Changes in Net Position
Operating Capital
Charges for Grants and Grants and Governmental Business-type Functions/Programs Expenses Services Contributions Contributions Activities Activities Total Governmental Activities:
General Government 15,550,878$ 1,203,282$ 2,739,469$ -$ (11,608,127)$ -$ (11,608,127)$ Fire 24,427,677 1,150,341 - - (23,277,336) - (23,277,336) Police 40,395,532 1,664,591 1,148,461 46,508 (37,535,972) - (37,535,972) Public Works 21,662,957 237,986 4,114,618 - (17,310,353) - (17,310,353) 24,802,552 9,082,146 11,586,436 9,432,282 5,298,312 - 5,298,312 4,418,752 - - - (4,418,752) - (4,418,752) Library 6,303,545 935 195,533 - (6,107,077) - (6,107,077) Interest on long term debt 1,219,276 - - - (1,219,276) - (1,219,276) Total Governmental Activities 138,781,169 13,339,281 19,784,517 9,478,790 (96,178,581) - (96,178,581) Business-type Activities:
Airport 4,022,246 3,807,332 - 280,335 - 65,421 65,421 Water 18,821,642 17,610,383 - 124,054 - (1,087,205) (1,087,205) Sewer 24,026,163 25,604,994 374,245 2,254,829 - 4,207,905 4,207,905 Stormwater 5,341,864 1,134,233 281 329,561 - (3,877,789) (3,877,789) Total Business-type Activities 52,211,915 48,156,942 374,526 2,988,779 - (691,668) (691,668) Total 190,993,084$ 61,496,223$ 20,159,043$ 12,467,569$ (96,178,581) (691,668) (96,870,249) General revenues:
Property taxes 38,874,958 - 38,874,958 Sales taxes 35,441,550 - 35,441,550 Business license taxes 7,360,758 - 7,360,758 Transient occupancy and franchise taxes 8,789,444 - 8,789,444 Intergovernmental, unrestricted 9,417,844 - 9,417,844 Investment income 1,573,776 371,163 1,944,939 Miscellaneous 6,442,577 34,203 6,476,780 Transfers, net (Note 4B) (1,767,363) 1,767,363 - Total general revenues and transfers 106,133,544 2,172,729 108,306,273 Change in Net Position 9,954,963 1,481,061 11,436,024 Net Position-Beginning 369,387,202 256,937,765 626,324,967 Beginning Net Position Adjustments (Note 9D) 3,232,769 - 3,232,769 Net Position-Beginning, as restated 372,619,971 256,937,765 629,557,736 Net Position-Ending 382,574,934$ 258,418,826$ 640,993,760$ See accompanying notes to financial statements
Community Development
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2021
Economic Development
EXHIBIT A
213
EXHIBIT A
214
FINANCIAL SECTION
Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensive Financial Report FY 2020-21
Page | 49
Fund Financial Statements
Only individual major funds are presented in the Fund Financial Statements, while non- major funds are combined in a single column. Major funds are defined generally as having significant activities or balances in the current year.
The City has identified the funds below as major governmental funds in fiscal year 2020-21:
GENERAL FUND
The General Fund is used for all the general revenues of the City not specifically levied or collected for other City funds and related expenditures.
LOW INCOME HOUSING SPECIAL REVENUE FUND
Established to account for the receipt and di sbursement of in-lieu low-income housing impact fees collected from developers.
EXHIBIT A
215
FINANCIAL SECTION
Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensive Financial Report FY 2020-21
Page | 50
Low Income Other Total
Housing Special Governmental Governmental
General Fund R evenue Fund Funds Funds
ASSETS
Cash and investments in City Treasury (Note 3) 68,899,712$ 9,901,920$ 105,480,765$ 184,282,397$ Cash and investments with Trustees (Note 3) - - 692,717 692,717 Accounts receivables (net of applicable allowable
for uncollectibles) 11,000,416 7,221 2,817,526 13,825,163 Interest receivable 1,278,834 - - 1,278,834 Advances to other funds (Note 4C) 3,874,396 - - 3,874,396 Prepaids and deposits 8,000 14,958 - 22,958 Notes receivable (Note 5) - 21,243,630 8,967,047 30,210,677 Land held for redevelopment (Note 1J) 1,727,437 9,594,149 - 11,321,586 Total Assets 86,788,795$ 40,761,878$ 117,958,055$ 245,508,728$
LIABILITIES
Accounts payable and other accrued liabilities 3,992,870$ 147,793$ 1,746,151$ 5,886,814$ Accrued payroll and benefits 1,556,050 - 69,732 1,625,782 Deposit payable 2,805,547 7,537 2,101,070 4,914,154 Advance from other funds (Note 4C) - - 3,874,396 3,874,396 Unearned rents and revenue 1,256,835 - 2,252,513 3,509,348 Total Liabilities 9,611,302 155,330 10,043,862 19,810,494
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - 21,243,630 8, 499,849 29,743,479 Total deferred inflows of resources - 21,243,630 8, 499,849 29,743,479 FUND BALANCES (Note 9)
Nonspendable 5,609,833 14,958 506, 524 6,131,315 Restricted - 19,347,960 96,309,877 115,657,837 Committed 17,419,222 - 2,597,943 20,017,165 Assigned 29,677,300 - - 29,677,300 Unassigned 24,471,138 - - 24,471,138 Total fund balances (deficits) 77,177,493 19,362,918 99, 414,344 195,954,755 Total Liabilities, deferred inflows of resources,
and fund balances 86,788,795$ 40,761,878$ 117, 958,055$ 245,508,728$
GOVERNMENTAL FUNDS
BALANCE SHEET
JUNE 30, 2021
See accompanying notes to financial statements
EXHIBIT A
216
FINANCIAL SECTION
Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensive Financial Report FY 2020-21
Page | 51
Amounts reported for Governmental Activities in the Statement of Net Position are different from those reported in the Governmental Funds above because of the following:
Amount reported in the Governmental Balance Sheet as Fund Balance 195,954,755$
CAPITAL ASSETS
Capital assets used in Governmental Activities are not current assets or financial resources and therefore are not reported in the Governmental Funds. $357,895,627
ALLOCATION OF INTERNAL SERVICE FUND NET POSITION
Internal service funds are not governmental funds. However, they are used by management to charge the costs of certain activities, such as insurance and central services and maintenance, to individual governmental funds. The assets and liabilities of the Internal Service Funds are therefore included in Governmental Activities in the following line items in the Statement of Net Postion.
Cash and investments 31,103,837
Accounts receivable 264,037
Inventory 315,693
Internal balances (32,986)
Prepaids, deposits and supplies 130,289
Capital assets 17,293,220
Deferred pension outflows 1,255,532
Deferred outflow of resources related to OPEB 36,805
Accounts payable and other accruals (578,337)
Accrued payroll (114,182)
Deposits payable ($3,305)
Claims payable (6,675,491)
Net pension liability (7,262,184)
Net OPEB liabilities (1,786,841)
Long term debt (6,883,846)
Deferred inflow for resources related to OPEB (450,018)
ACCRUAL OF NON-CURRENT REVENUES AND EXPENSES
Revenues which are reported as deferred inflows on the Fund Balance Sheets because they are not available currently are taken into revenue in the Statement of Activities. 29,743,479
LONG-TERM ASSETS AND LIABILITIES
The assets and liabilities below are not due and payable in the current period and therefore are not reported in the Funds:
Investment (Deficit) in JPA Equity (44,265,779)
Compensated absences (4,189,666)
Long-term debt (51,688,479)
Interest payable (450,144)
Net OPEB liabilities (27,990,639)
Deferred outflow of resources related to OPEB 576,542
Deferred inflow of resources related to OPEB (7,049,481) Net pension liability (114,125,925)
Deferred outflow of resources related to pension 23,356,360 Deferred inflow of resources related to pension (1,803,939) NET POSITION OF GOVERNMENTAL ACTIVITIES 382,574,934
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF NET POSITION
JUNE 30, 2021
See accompanying notes to financial statements
EXHIBIT A
217
FINANCIAL SECTION
Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensive Financial Report FY 2020-21
Page | 52
Low Income Other Total
Housing-Special Governmental Governmental
General Fund R evenue Fund Funds Funds
REVENUES
Property taxes and special assessments 38,874,958$ -$ 3,802,774$ 42,677,732$ Sales Taxes 35,441,550 - - 35,441,550 Other taxes 16,150,202 - - 16,150,202 Licenses and permits 2,587,449 - - 2,587,449 Intergovernmental 15,307,657 - 12,516,923 27,824,580 Fines and forfeitures 395,011 - - 395,011 Charges for current services 7,954,985 194,406 4,687,737 12,837,128 Use of money and property 4,407,874 159,155 755,209 5,322,238 Contributions from outside sources 3,024,939 84,688 1,112,846 4,222,473 Miscellaneous 413,965 762,839 1,134,808 2,311,612 Total Revenues 124,558,590 1,201,088 24,010,297 149,769,975
EXPENDITURES
Current:
General Government:
City Council 292,587 - - 292,587 City Manager 2,115,420 - 44,739 2,160,159 City Attorney 1,874,129 - - 1,874,129 Administrative Services 6,459,231 - - 6,459,231 General Services 3,040,213 - - 3,040,213 Fire 22,758,011 - 7,653 22,765,664 Police 38,135,545 - 1,448,772 39,584,317 Public Works 7,886,134 - 5,207,860 13,093,994 Community Development 17,784,727 1,302,945 4,182,252 23,269,924 Economic Development 4,401,048 - 34,552 4,435,600 Library 5,517,721 - 108,459 5,626,180 Capital Outlay:
Capital projects 3,462,289 13,689 7,153,101 10,629,079 Debt service:
Principal - - 122,607 122,607 Interest and fiscal charges - - 1,375,594 1,375,594 Total Expenditures 113,727,055 1,316,634 19, 685,589 134,729,278
EX CESS (DEFICIENCY) OF REVENUES
OVER EX PENDITURES 10,831,535 (115,546) 4,324,708 15,040,697
OTHER FINANCING SOURCES (USES)
Transfers in (Note 4B) 537,023 - 2,675,111 3,212,134 Transfers (out) (Note 4B) (4,189,578) (273,167) (516,752) (4,979,497) Total Other Financing Sources (Uses) (3,652,555) (273,167) 2,158,359 (1,767,363) NET CHANGE IN FUND BALANCES 7,178,980 (388,713) 6,483,067 13,273,334 FUND BALANCES- BEGINNING 69,998,513 19,751,631 89,698,508 179,448,652 Beginning Fund Balance Adjustment (Note 9D) - - 3,232,769 3,232,769 Fund Balance-Beginning, as restated 69,998,513 19,751,631 92,931,277 182,681,421 FUND BALANCES- ENDING 77,177,493$ 19,362,918$ 99,414,344$ 195,954,755$
GOVERNMENTAL FUNDS
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED JUNE 30, 2021
See accompanying notes to financial statements
EXHIBIT A
218
FINANCIAL SECTION
Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensive Financial Report FY 2020-21
Page | 53
NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS 13,273,334$ Amounts reported for governmental activities in the Statement of Activities are different because of the following:
CAPITAL ASSETS TRANSACTIONS
Governmental Funds report capital outlays as expenditures. However, in the Statement of Activities the cost of those assets is capitalized and allocated over their estimated useful lives and reported as depreciation expense.
The capital outlay asset addition expenditures are therefore added back to fund balance 10,629,079 Depreciation expense is deducted from the fund balance
(Depreciation expense is net of internal service fund depreciation of $2,343,294 which has already been allocated to internal service funds.) (11,074,119) Contributions of infrastructure and improvements by developers are capitalized in the Statement of Net Position, but are not recorded in the Fund Statements because no cash changed hands. 830,292
LONG TERM DEBT PROCEEDS AND PAYMENTS
Bond proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the Statement of Net Position. Repayment of bond principal is an expenditure in the governmental funds, but in the Statement of Net Position the repayment reduces long-term liabilities.
Repayment of debt principal is added back to fund balance 122,607 Amortization of premium on long-term debt 584,174
ACCRUAL OF NON-CURRENT ITEMS
The amounts below included in the Statement of Activities do not provide or (require) the use of current financial resources and therefore are not reported as revenue or expenditures in governmental funds (net change):
Long-term compensated absences (163,504)
Interest payable (427,857)
Unavailable revenue (96,774)
Change in equity in JPA (1,567,107)
CONTRIBUTIONS TO PENSION and OPEB PLAN
Governmental funds report City pension and OPEB contributions as expenditures. However in the Statement of Activities, the cost of pension and OPEB benefits earned net of employee contributions is reported as pension expense and OPEB expense.
Deferred outflow of resources related to pension 2,614,865 Deferred inflow of resources related to pension 1,773,834 Change in net pension liability (9,188,833)
Deferred outflow of resources related to OPEB (1,513,192) Deferred inflow of resources related to OPEB (5,165,820) Change in net OPEB liability 9,673,992
ALLOCATION OF INTERNAL SERVICE FUND ACTIVITY
Internal Service Funds are used by management to charge the costs of certain activities, such as equipment acquisition, maintenance, and insurance to individual funds. The portion of the net revenue (expense) of these Internal Service Funds arising out of their transactions with governmental funds is reported with governmental activities, because they service those activities.
Change in Net Position - All Internal Service Funds (929,800) Change in Net Position of Internal Service Funds reported with Business-Type Activities 579,792 CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES 9,954,963$ See accompanying notes to financial statements
The schedule below reconciles the Net Changes in Fund Balances reported on the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balance, which measures only changes in current assets and current liabilities on the modified accrual basis, with the Change in Net Position of Governmental Activities reported in the Statement of Activities, which is prepared on the full accrual basis.
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2021
EXHIBIT A
219
EXHIBIT A
220
FINANCIAL SECTION
Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensive Financial Report FY 2020-21
Page | 55
Major Proprietary Funds
Proprietary funds account for City operations financed and operated in a manner similar to a private business enterprise. The intent of the City is that the cost of providing goods and services be financed primarily through user charges.
The City has identified the funds below as major proprietary funds in fiscal year 2020-21.
AIRPORT FUND
Established to account for the operations of the Livermore Municipal Airport.
WATER FUND
Established to account for the operations of the self-supporting municipal water service. Services are rendered on a user charge basis and impact fees are collected for future water storage needs.
SEWER FUND
Established to account for operations of the self -supporting wastewater disposal plant, the export pipeline, impact fees collected for sewer connections, and urban runoff fees.
STORMWATER FUND
Established to account for operations of the self -supporting storm water operations and impact fees collected for storm drain infrastructure.
INTERNAL SERVICE FUNDS
Internal service funds, which are used to accumulate and allocate costs internally among the City’s various functions. The City uses internal service funds to account for its fleet of vehicles, maintenance of buildings, risk management services, and information technology services. The internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements.
EXHIBIT A
221
FINANCIAL SECTION
Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensive Financial Report FY 2020-21
Page | 56
Governmental
Activities-
Internal Service
Airport Water Sewer Stormwater Totals Funds
ASSETS
Current Assets:
Cash and investments in City Treasury (Note 3) 5,579,223$ 33,190,418$ 69,779,284$ 6,452,887$ 115,001,812$ 31,103,837$ Accounts receivables (net of allowable for uncollectibles) 534,891 2,359,733 676,910 3,553,498 7,125,032 264,037 Inventory - - - - - 315,693 Prepaids, deposits and supplies - 87,560 1,108 - 88,668 130,289 Total current assets 6,114,114 35,637,711 70,457,302 10,006,385 122,215,512 31,813,856 Noncurrent Assets:
Investment in JPA-LAVWMA (Note 13A) - - 19,187,078 - 19,187,078 - Land and construction in progress (Note 6) 14,857,743 9,103,994 20,404,912 5,802,012 50,168,661 892,488 Capital assets, net of accumulated depreciation (Note 6) 7,326,825 25,507,402 50,304,070 19,206,326 102,344,623 16,400,732 Total noncurrent assets 22,184,568 34,611,396 89,896,060 25,008,338 171,700,362 17,293,220 Total assets 28,298,682 70,249,107 160,353,362 35,014,723 293,915,874 49,107,076
DEFERRED OUTFLOWS OF RESOURCES
Related to pension (Note 10) 398,172 749,363 2,017,808 218,769 3,384,112 1,255,532 Related to OPEB (Note 11) 12,597 19,235 70,345 2,983 105,160 36,805 Total deferred outflows of resources 410,769 768,598 2,088,153 221,752 3,489,272 1,292,337
LIABILITIES
Current Liabilities:
Accounts payable and other accruals 352,862 2,087,438 608,327 186,919 3,235,546 578,337 Accrued payroll and benefits 33,267 72,396 181,692 20,435 307,790 114,182 Interest payable 37,261 28,415 - - 65,676 - Accrued compensated absences (Note 7D) 23,255 54,302 144,036 15,785 237,378 - Claims payable (Note 14B) - - - - - 1,310,000 Deposit payable 232,898 128,220 448,859 - 809,977 3,305 Long-term debt (Note 7):
Due within one year 230,093 282,544 - - 512,637 735,353 Total current liabilities 909,636 2,653,315 1, 382,914 223,139 5,169,004 2,741,177 Noncurrent Liabilities:
Accrued compensated absences (Note 7D) 40,650 86,448 269,282 31,051 427,431 - Claims payable (Note 14B) - - - - - 5,365,491 Net pension liability (Note 10) 2,285,369 4,296,871 11,710,153 1,284,339 19,576,732 7,262,184 Net OPEB liabilities (Note 11) 611,583 933,860 3,415,185 144,842 5,105,470 1,786,841 Long-term debt (Note 7):
Due in more than one year 4,427,055 3,027,794 - - 7,454,849 6,148,493 Total non-current liabilities 7,364,657
8,344,973 15,394,620 1,460,232 32,564,482 20,563,009 Total liabilities 8,274,293 10,998,288 16,777,534 1,683,371 37,733,486 23,304,186
DEFERRED INFLOWS OF RESOURCES
Related to OPEB (Note 11) 154,028 235,194 860,119 36,479 1,285,820 450,018 Total deferred inflows of resources 154,028 235,194 860,119 36,479 1,285,820 450,018 NET POSITION (Note 9)
Net investment in capital assets 17,527,420 31,301,058 70,708,982 25,008,338 144,545,798 10,409,374 Unrestricted 2,753,710 28,483,165 74,094,880 8,508,287 113,840,042 16,235,835 Total net position 20,281,130$ 59,784,223$ 144,803,862$ 33,516,625$ 258,385,840 26,645,209$ Some amounts reported for business-type activities in the Statement of Net Position are different because certain internal service fund assets and liabilities are included with business-type activities. 32,986 Net position business-type activities 258,418,826$
See accompanying notes to financial statements
PROPRIETARY FUNDS
STATEMENT OF NET POSITION
JUNE 30, 2021
Business-Type Activities-Enterprise Funds
EXHIBIT A
222
FINANCIAL SECTION
Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensive Financial Report FY 2020-21
Page | 57
Governmental
Activities-
Internal Service
Airport Water Sewer Stormwater Totals Funds
OPERATING REVENUES
Charges for services 2,898,488$ -$ 25,500,934$ 1,132,050$ 29,531,472$ 13,928,812$ Sales 385,345 17,584,570 - - 17,969,915 - Miscellaneous 14,885 25,813 98,543 7,701 146,942 442,070 Total Operating Revenues 3,298,718 17,610,383 25,599,477 1,139,751 47,648,329 14,370,882
OPERATING EX PENSES
Cost of sales, salaries and benefits 1,971,661 15,289,471 9,293,539 2,367,058 28,921,729 4,801,271 Contracted services 411,388 877,284 5,075,042 854,012 7,217,726 2,015,172 Insurance premiums 79,803 294,899 462,902 65,411 903,015 1,600,429 Materials, supplies and other 49,259 104,198 1,093,057 190,471 1,436,985 2,090,486 Utilities 195,914 337,362 1,027,376 4,889 1,565,541 538,740 Depreciation 305,997 1,521,016 3,637,404 1,814,492 7,278,909 2,343,294 Repairs and maintenance 811,554 216,368 3,054,769 10,916 4,093,607 1,807,755 Total Operating Expenses 3,825,576 18,640,598 23,644,089 5,307,249 51,417,512 15,197,147 Operating Income (Loss) (526,858) (1,030,215) 1,955,388 (4,167,498) (3,769,183) (826,265)
NONOPERATING REVENUES (EX PENSES)
Investment income (loss) 13,934 115,558 234,858 20,746 385,096 - Interest and fiscal charges (expense) (120,080) (69,029) - - (189,109) (187,955) Change of value from investment in JPA - LAVWMA - - 374,245 - 374,245 - Other nonoperating revenues 494,680 34,203 - - 528,883 84,420 Gain (loss) on disposal of surplus property - - (25,502) - (25,502) - Net Nonoperating Revenues (Expenses) 388,534 80,732 583,601 20,746 1,073,613 (103,535) Income (Loss) Before Contributed Assets
and Transfers (138,324) (949,483) 2,538,989 (4,146,752) (2,695,570) (929,800) Capital contributions - Conveyed Property - - 288,500 133,730 422,230 - Capital contributions - Connection fees - 124,054 1,966,329 156,414 2,246,797 - Capital Grants 280,335 - - 39,698 320,033 - Transfers in (Note 4B) - - - 1,767,363 1,767,363 - Change in net position 142,011 (825,429) 4,793,818 (2,049,547) 2,060,853 (929,800) Total net position (deficit)-beginning 20,139,119$ 60,609,652$ 140,010,044$ 35,566,172$ 27,575,009$ Total net position(deficit)-ending 20,281,130$ 59,784,223$ 144,803,862$ 33,516,625$ 26,645,209$ Some amounts reported for business-type activities in the Statement of Activities are different because the portion of the net income of certain internal service funds is reported with the business-type activities (579,792) which those funds service.
Net business-type activities reported on the Statement of Activities 1,481,061$
PROPRIETARY FUNDS
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION FOR THE YEAR ENDED JUNE 30, 2021
Business-Type Activities-Enterprise Funds
See accompanying notes to financial statements
EXHIBIT A
223
FINANCIAL SECTION
Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensive Financial Report FY 2020-21
Page | 58
Governmental
Activities-
Internal Service
Airport Water S ewer Stormwater Totals Funds
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 3,117,535$ 17,793,769$ 25,803,426$ 1,136,321$ 47,851,051$ 14,209,006$ Payments to suppliers (2,016,091) (13,800,272) (12,596,223) (2,686,651) (31,099,237) (8,255,728) Payments to employees (1,443,103) (2,647,645) (7,146,594) (810,576) (12,047,918) (4,413,367) Claims paid - - - - - (1,223,237) Net cash provided by (used for) operating activities (341,659) 1,345,852 6,060,609 (2,360,906) 4,703,896 316,674
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Transfers in - - - 1,767,363 1,767,363 - Net cash provided by (used for) noncapital financing activities - - - 1,767,363 1,767,363 -
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Capital Grants 280,335 - - 39,698 320,033 - Capital contributions - 124,054 2,254,829 290,144 2,669,027 - Capital asset additions (33,800) (694,597) (5,667,967) (850,185) (7,246,549) (1,415,212) Long term debt:
Repayment of principal (26,687) - - - (26,687) (679,300) Interest paid (122,149) (87,502) - - (209,651) (187,955) Net cash provided by (used for) capital and related
financing activities 97,699 (658,045) (3,413,138) (520,343) (4,493,827) (2,282,467)
CASH FLOWS FROM INVESTING ACTIVITIES
Investment Income 508,614 149,761 234,858 20,746 913,979 84,420 Net cash provided by (used for) investing activities 508,614 149,761 234,858 20,746 913,979 84,420 Net increase (decrease) in cash and cash equivalents 264,654 837,568 2,882,329 (1,093,140) 2,891,411 (1,881,373) Cash and investments at beginning of period 5,314,569 32,352,850 66,896,955 7,546,027 112,110,401 32,985,210 Cash and investments at end of period 5,579,223$ 33,190,418$ 69,779,284$ 6,452,887$ 115,001,812$ 31,103,837$ Reconciliation of operating income (loss) to net cash
provided by operating activities:
Operating income (loss) (526,858)$ (1,030,215)$ 1,955,388$ (4,167,498)$ (3,769,183)$ (826,265)$ Adjustments to reconcile operating income (loss) to net cash provided by operating activities:
Depreciation 305,997 1,521,016 3,637,404 1,814,492 7,278,909 2,343,294 Pension and OPEB Expense (40,739) 1,096,410 (954,766) 485,843 586,748 366,808 Change in assets and liabilities:
Accounts receivable (164,146) 159,801 (30,982) 12,234 (23,093) (65,280) Prepaids, deposits and supplies - 6,523 2,394,539 - 2,401,062 (207,314) Accounts payable and other accruals 127,766 (506,724) (1,162,332) (530,292) (2,071,582) (76,066) Accrued payroll (204) 26,128 5,320 9,661 40,905 4,734 Accrued compensated absences (26,438) 49,328 (18,893) 30,318 34,315 - Deposits payable (17,037) 23,585 234,931 (15,664) 225,815 - Claims Payable - - - - - (1,223,237) Net Cash provided by (Used for) operating activities (341,659)$ 1,345,852$ 6,060,609$ (2,360,906)$ 4,703,896$ 316,674$ Non-cash transactions:
Investment in LAVWMA JPA equity -$ -$ 374,245$ -$ 374,245$ -$ Loss on disposal (2,000) - - - (2,000) - Amortization of premium (39,330) (46,888) - - (86,218) - Capital assets contributed - - 288,500 133,730 422,230 - (41,330)$ (46,888)$ 662,745$ 133,730$ 708,257$ -$ Business-Type Activities-Enterprise Funds
PROPRIETARY FUNDS
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2021
See accompanying notes to financial statements
EXHIBIT A
224
FINANCIAL SECTION
Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensive Financial Report FY 2020-21
Page | 59
Fiduciary Funds
Fiduciary funds account for assets held by the City acting as an agent for various functions. The City has the following fiduciary funds:
SUCCESSOR AGENCY TO THE LIVERMORE REDEVELOPMENT AGENCY PRIVATE PURPOSE TRUST FUND
Established for the assets received from the City’s former redevelopment agency in order to liquidate its enforceable obligations, pursuant to Assembly Bill X1 26 which dissolved redevelopment agencies in California.
CUSTODIAL FUNDS
Established to account for assets held by the City in a fiduciary capacity for special assessment districts, Livermore Pleasanton Fire Department, and agency pass through fees.
EXHIBIT A
225
FINANCIAL SECTION
Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensive Financial Report FY 2020-21
Page | 60
Successor Agency
to the Livermore
Redevelopment
Agency
Private-Purpose Custodial
Trust Fund Funds
ASSETS
Cash and investments in City Treasury (Note 3B) 4,144,497$ 14, 431,255$
Cash and investments with Trustees (Note 3B) 5 2,269,253 Accounts receivable - 320,935
T ot
al Assets 4,144,502 17,021,443
LIABILITIES
Accrued liabilities - 4,357,015
Accrued interest 304,571 -
Deposits payable - 6,359,971
Loans payable to City of Livermore:
Due in more than one year (Note 5 and 17B) 643,438 -
Long-term debt (Note 17A):
Due within one year 1,437,490 -
Due in more than one year 18,030,256 -
Total Liabilities 20,415,755 10,716,986$
NET POSITION
Restricted for other organizations and governments (16,271,253) $
6,304,457$
FIDUCIARY FUNDS
STATEMENT OF NET POSITION
JUNE 30, 2021
See accompanying notes to financial statements
EXHIBIT A
226
FINANCIAL SECTION
Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensive Financial Report FY 2020-21
Page | 61
Successor Agency
to the
Redevelopment
Agency
Private-Purpose Custodial
Trust Fund Funds
ADDITIONS
Property taxes and special assessment 2,212,369$ -$ Investment income 6
Charges for services 44,687,093
Total Additions 2,212,375 44,687,093
DEDUCTIONS
Administrative Fee 15,748
Recipient Payments 13,252 44,064,555 Debt service:
Interest and fiscal charges 643,813 - Total Deductions 672,813 44,064,555 Net Change in Net Position 1,539,562 622,538
NET POSITION
Beginning of year (17,810,815) -
Beginning Net Position Adjustments (Note 9D) - 5,681,919 Net Position-Beginning, as restated (Note 9D) (17,810,815) 5,681,919 End of year (16,271,253)$ 6,304,457$
FIDUCIARY FUNDS
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
FOR THE YEAR ENDED ON JUNE 30, 2021
See accompanying notes to financial statements
EXHIBIT A
227
EXHIBIT A
228
EXHIBIT A
229
EXHIBIT A
230
FINANCIAL SECTION
Notes to Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensiv e Financial Report FY 2020-21
Page | 65
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
The
City of Livermore w as incorporated on April 1, 1876. The City operates under the Council -Manager form of government and provides the following services: public safety (police and fire), highways and streets, sewer, water, public improvements, planning and zoning, general administration services and housing services.
The
accounting policies of the City conform with generally accepted accounting principles in the United States of America as applicable to governments. The following is a summary of these policies:
A. Re
porting Entity
The
accompanying basic financial statements present the financial activity of the City, which is the primary government presented, along with the financial activities of its component units, which are entities for which the City is financially accountable. Although they are separate legal entities, blended component units are in substance part of the City’s operations and are reported as an integral part of the City’s financial statements. The City’s blended component unit is described below.
COM
PONENT UNITS INCLUDED IN THE REPORTING ENTITY:
The
Livermore Capital Projects Financing Authority (LCPFA) provides financing assistance to the City . The Authority is controlled by the City and has the same governing body as the City, which also performs all accounting and administrative functions for the Authority. Separate financial statements are not issued for the LCPFA.
B. Ba
sis of Presentation
The
City’s basic financial statements are prepared in conformity with account ing principles generally accepted in the United States of America. The Governmental Accounting Standards Board is the acknowledged standard setting body for establishing accounting and financial reporting standards followed by governmental entities in the United States of America.
Thes
e Standards require that the financial statements described below be presented.
Go
vernment-wide Statements: The Statement of Net Position and the Statement of Activities display information about the primary government (the City) and its component units. These statements include the financial activities of the overall City government, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. These statements distinguish between the governmental and business-type activities of the City. Governmental activities generally are financed through taxes, intergovernmental revenues, and other non-exchange transactions. Business-type activities are financed in whole or in part by fees charged to external parties.
The S
tatement of Activities presents a comparison between direct expenses and program revenues for each segment of the business-type activities of the City and for each function of the City’s governmental activiti es.
Di
rect expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Certain indirect costs are included in program expenses reported for individual functions and activities.
Pr
ogram revenues include (a) charges paid by the recipients of goods or services offered by the programs, (b) grants and contributions that are restricted to meeting the operational needs of a particular program and (c) fees, grants and contributions that are restricted to financing the acquisition or construction of capital assets. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.
EXHIBIT A 231
FINANCIAL SECTION
Notes to Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensiv e Financial Report FY 2020-21
Page | 66
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (Continued)
B. Basis of Presentation (Continued)
Fund Financial Statements: The fund financial statements provide information about the City's funds, including fiduciary funds and blended component units. Separate statements for each fund category —governmental, proprietary, and fiduciary—are presented. The emphasis of fund financial statements is on major individual governmental and enterprise funds, each of which is displayed in a separate column. All remaining governmental and enterprise funds are aggregated and reported as non-major funds.
Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from exchange transactions associated with a proprietary fund’s principal ongoing operations. Exchange transactions are those in which each party receives and gives up essentially equal values.
The principal operating revenues of the City’s enterprise funds, and internal service funds are charges to customers for sales and services. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation of capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. Non-operating revenues, such as subsidies and investment earnings, result from non-exchange transactions or ancillary activities.
C. Major Funds
The City’s major governmental and business-type funds are identified and presented separately in the fund financial statements. All other funds, called non-major funds, are combined, and reported in a single column, regardless of their fund-type.
Major funds are defined as funds that have either assets, liabilities, revenues, or expenditures/expenses equal to ten percent of their fund-type total and five percent of the grand total. The General Fund is always a major fund. The City may also select other funds it believes should be presented as major funds.
The City reported the following major governmental funds in the accompanying financial statements:
General Fund – The general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund.
Low Income Housing Special Revenue Fund – Established to account for the receipt and disbursement of in- lieu low-income housing impact fees collected from developers.
The City reported the following business-type funds as major funds in the accompanying financial statements.
Airport Fund – Established to account for the operations of the Livermore Municipal Airport.
Water Fund - Established to account for the operations of the municipal water service. Services are rendered on a user charge basis and impact fees are collected for future water storage needs.
Sewer Fund – Established to account for operations of the wastewater disposal plant, the export pipeline, impact fees collected for sewer connections, and urban runoff fees.
Stormwater Fund – Established to account for operations of the storm water operations and impact fees collected for storm drain infrastructure.
EXHIBIT A
232
FINANCIAL SECTION
Notes to Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensiv e Financial Report FY 2020-21
Page | 67
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (Continued)
C. Major Funds (Continued)
The City also reports the following fund types:
Internal Service Funds – These funds are used to account for the financing of services and supplies provided by one City department to another on a cost-reimbursement basis. The City operates the Liability Insurance Reserve Fund, Workers Compensation Fund, Fleet and Equipment Services Fund, Information Technology Fund, and Facilities Rehabilitation Projects Fund.
Fiduciary Funds – These funds are used to account for assets held by the City as an agent for various functions.
The financial activities of these funds are excluded from the City-wide financial statements but are presented in separate Fiduciary Fund financial statements. The City has the following three types of fiduciary funds:
Successor Agency to the Livermore Redevelopment Agency Private Purpose Trust Fund – Established for the assets received from the City’s former redevelopment agency in order to liquidate its enforceable obligations, pursuant to Assembly Bill X1 26 which dissolved redevelopment agencies in California as of January 31, 2012.
Funds received from the county to pay off enforceable obligations are held in this fund.
Custodial Funds – Established to account for assets held by the City in a purely custodial capacity. Custodial funds typically involve only the receipt, temporary investment, and remittance of fiduciary resources to individuals, private organizations, or other governments. Custodial Funds account for activities carried out exclusively for the benefit of that outside of the City but not administered through other fiduciary trusts or equivalent arrangements such as assessments for payments of certain conduit debt and other custodial activities as well as custodial activities related to the Livermore Pleasanton Fire District, JPA
Permanent Fund – The permanent fund is used to report resources that are legally restricted to the extent that only earnings, not principal, may be used for purposes that support the government’s programs. Doolan Canyon Endowment Fund accounts for an endowment restricted for items related to mitigation of the burrowing owl habitat.
The Doolan Canyon fund has $692,717 in fund balance, $506,524 is the non- spendable portion of the original endowment and $186,193 is the total interest earned that can be spent for the mitigation efforts.
D. Basis of Accounting
The accounting and financial reporting treatment is determined by the applicable measurement focus and basis of accounting. Measurement focus indicates the type of resources being measured such as current financial resources or economic resources. The basis of accounting indicates the timing of transactions or events for recognition in the financial statements.
The government-wide financial statements are reported using the economic resources measurement focus and the full accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.
Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. Measurable means the amount of the transaction can be determined and available means the amount is collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. The City’s accrual period is sixty days after year end. Expenditures are generally recognized under the modified accrual basis of accounting when the related fund liability has incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences, pension and other postemployment benefits liabilities, and claims
EXHIBIT A
233
FINANCIAL SECTION
Notes to Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensiv e Financial Report FY 2020-21
Page | 68
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. Basis of Accounting (continued)
and judgments, are recorded only when payment is due. Thus, such amounts are not current liabilities as their settlement will not require expenditures of existing fund assets.
Financial resources usually are appropriated in other funds for transfer to a debt service fund in the period in which maturing debt principal and interest must be paid. General capital asset acquisitions are reported as expenditures in governmental funds. Issuance of long-term debt and acquisitions under capital leases are reported as other financing sources.
Property taxes, sales taxes, franchise taxes, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period.
Entitlements are recorded as revenues when all eligibility requirements are met, including any time requirements, and the amount is received during the period or within the availability period for this revenue source. Expenditure-driven grants are recognized as revenue when the qualifying expenditures have been incurred and all other eligibility requirements have been met, and the amount is received during the period or within the availability period for this revenue source. All other revenue items including fines, license, and permits are considered to be measurable and available only when cash is received by the government.
The proprietary and fiduciary funds are reported using the economic resources measurement focus and accrual basis of accounting.
E. Inventories and Prepaid items
Inventories are valued at cost on an average cost basis and consist of expendable supplies, fuel, and vehicle repair parts. The cost of such inventories is recorded as expenditures/expenses when consumed rather than when purchased.
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both the government -wide and fund financial statements. The cost of prepaid items is recorded as expenditures/expenses when consumed rather than when purchased.
F. Deferred Outflows/Inflows of Resources
In addition to assets, the statement of net position reports a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position or fund balance that applies to future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then.
In addition to liabilities, the statement of net position or governmental fund balance sheet reports a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position or fund balance that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time.
G. Pensions and Other Postemployment Benefits
For purposes of measuring the net pension and OPEB liabilities and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the City of Livermore’s California Public Employees’ Retirement System (CalPERS) pension and Public Agency Retirement System (PARS) plans (Plans) and additions to/deductions from the Plans’ fiduciary net position have been determined on the same basis as they are reported by CalP ERS and PARS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms.
EXHIBIT A
234
FINANCIAL SECTION
Notes to Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensiv e Financial Report FY 2020-21
Page | 69
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (Continued)
H. Property Tax Levy, Collection and Maximum Rates
The State of California Constitution Article XIII(A) provides that the combined maximum property tax rate on any given property may not exceed one percent of its assessed value unless an additional amount for general obligation debt has been approved by voters. Assessed value is calculated at 100 percent of market value as defin ed by Article XIII(A), generally equivalent to the latest sale price, and may be increased by no more than two percent per year unless the property is sold or transferred. Assessed values may be reduced because of taxpayer-initiated re- assessments or declining sales prices. The State Legislature has determined the method of distribution of receipts from this tax levy among the counties, cities, school districts and other districts.
Secured property tax is due in two installments, on November 1 and February 1, and becomes a lien on those dates.
It becomes delinquent on December 10 and April 10, respectively. Unsecured property tax is due on July 1 and become delinquent on August 31.
The term "unsecured" refers to taxes on personal property other than real estate, land, and buildings, such as airplanes, boats, etc. These taxes are secured by liens on the property being taxed.
I. Revenue Recognition for Water and Sewer Operations
Revenues from residential sewer customers are based on annual billings collected on the tax rolls by Alameda County.
Revenues for sewer services provided but not billed at the end of the fiscal year are estimated and accrued.
J. Land Held for Redevelopment
Land held for redevelopment includes land parcels used to develop or redevelop blighted properties and are accounted for as investments on the balance sheet at the lower of cost or net realizable value or agreed- upon sales price if a disposition agreement has been made with a developer. Individual parcels which have experienced a market value decline are written down to estimated current market value. No appreciation is recorded if the current market value of an individual parcel exceeds cost.
K. Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
L. Adoption of New Accounting Pronouncements
During the fiscal year ended June 30, 2021, the City implemented the following GASB Pronouncements:
GASB Statement No. 84, Fiduciary Activities. This statement was issued January 2017 to establish criteria for identifying fiduciary activities of all state and local governments. GASB 84 was implemented for the City during the current fiscal year. The City’s Private Purpose Trust Funds were not impacted by this statement. The City’s Agency Funds are now reported as custodial funds. In addition, certain programs previously reported under this category are no longer classified as a fiduciary activity. Accordingly, this activity which no longer qualifies as a fiduciary activity, is reported in the appropriate operating funds of the City. The City’s previously reported OPEB Plan’s Trust fund is no longer reported on the financial statements because the plan is considered an agent multiple employer plan handled by PARS. Consequently, the City made a beginning fund balance or net position adjustment as discussed in Note 9D. Additionally, throughout this report any references to the term “Agency Fund” has been updated to “Custodial Fund”. The format of the fiduciary fund financial statements has also been updated to comply with the new requirements given by this statement.
EXHIBIT A
235
FINANCIAL SECTION
Notes to Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensiv e Financial Report FY 2020-21
Page | 70
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (Continued)
L. Adoption of New Accounting Pronouncements (Continued)
GASB Statement No. 90, Majority Equity Interests – In August 2018, GASB issued Statement No. 90, Majority Equity Interests – an amendment of GASB Statements No. 14 and No. 61. The primary objectives of this Statement are to improve the consistency and comparability of reporting a government’s majority eq uity interest in a legally separate organization and to improve the relevance of financial statement information for certain component units.
It defines a majority equity interest and specifies that a majority equity interest in a legally separate organiz ation should be reported as an investment if a government’s holding of the equity interest meets the definition of an investment. The City has implemented provisions of this statement in current fiscal year without any impact on its financial statements.
GASB Statement No. 92, Omnibus 2020 – In January 2020, GASB issued GASB Statement No. 92, Omnibus 2020. The objectives of this Statement are to enhance comparability in accounting and financial reporting and to improve the consistency of authoritative l iterature by addressing practice issues that have been identified during implementation and application of certain GASB Statements. This Statement is effective for reporting periods beginning after June 15, 2020 except that the effective date of Statement 87 and Implementation Guide 2019- 3, reinsurance recoveries, and terminology used to refer to derivative instruments are effective upon issuance. The City has implemented provisions of this statement in current fiscal year. This Statement did not have any impact on the Financial Statements,
GASB Statement No. 98, The Annual Comprehensive Financial Report – In October 2021, GASB issued Statement No. 98, T he Annual Comprehensive Financial Report. This Statement establishes the term annual comprehensive financial report and its acronym ACFR. That new term and acronym replace instances of comprehensive annual financial report and its acronym in generally accepted accounting principles for state and local governments. The requirements of this Statement are effective for reporting periods beginning after December 15, 2021. Earlier implementation is encouraged. The City early implemented the provisions of this statement in the current fiscal year.
This Statement was developed in response to concerns raised by stakeholders that the common pronunciation of the acronym for comprehensive annual financial report sounds like a profoundly objectionable racial slur. This Statement’s introduction of the new term is founded on a commitment to promoting inclusiveness
M. Future Accounting Pronouncements
The following GASB pronouncements have been issued, but are not effective as of June 30, 2021:
GASB Statement No. 87, Leases – In June 2017, GASB issued Statement No. 87, Leases . The objective of this Statement is to better meet the information needs of financial statement users by improving accounting and financial reporting for leases by governments. This Statement increases the usefulness of governments’ financial statements by requiring recognition of certain lease assets and liabilities for leases that previously were classified as operating leases and recognized as inflows of resources or outflows of resources based on the payment provisions of the contract. It establishes a single model for lease accounting based on the foundational principle that leases are financings of the right to use an underlying asset. This statement is effective for reporting periods beginning after December 15, 2019. The effective date of this pronouncement has been postponed by 18 months in accordance with the GASB statement No. 95. The City has not yet determined its effect on the financial statements.
EXHIBIT A
236
FINANCIAL SECTION
Notes to Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensiv e Financial Report FY 2020-21
Page | 71
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (Continued)
M. Future Accounting Pronouncements (Continued)
GASB Statement No. 89, Accounting for Interest Cost Incurred before the End of a Construction Period – In June 2018, GASB issued Statement No. 89, Accounting for Interest Cost Incurred before the End of a Construction Period. The objectives of this Statement are (1) to enhance the relevance and comparability of information about capital assets and the cost of borrowing for a reporting period and (2) to simplify accounting for interest cost incurred before the end of a construction period. This Statement requires that interest cost incurred before the end of a construction period be recognized as an expense in the period in which the cost is
incurred for financial statements prepared using the economic resources measurement focus. As a result, interest cost incurred before the end of a construction period will not be included in the historical cost of a capital asset reported in a business -type activity or enterprise fund. This statement is originally effective for reporting periods beginning after December 15, 2019. Per GASB Statement No. 95, the effective date is postponed for one year.
The City has not yet determined its effect on the financial statements.
GASB Statement No. 91, Conduit Debt Obligation – In May 2019, GASB Issued Statement No. 91, Conduit Debt Obligation. The primary objectives of this Statement are to provide a single method of reporting conduit debt obligations by issuers and eliminate diversity in practice associated with (1) commitments extended by issuers, (2) arrangements associated with conduit debt obligations, and (3) related note disclosures. This Statement clarifies the existing definition of a conduit debt obligation; establishing that a conduit debt obligation is not a liability of the issuer; establishing standards for accounting and financial reporting of additional commitments and voluntary commitments extended by issuers and arrangements associated with conduit debt obligations; and improving required note disclosures. This Statement also addresses arrangements—often characterized as leases—that are associated with conduit debt obligations. This Statement is effective for reporting periods beginning after December 15, 2020. Per GASB St atement No. 95, the effective date is postponed for one year. The City has not yet determined its effect on the financial statements.
GASB Statement No. 93, Replacement of Interbank Offered Rates – In March 2020, GASB issued Statement N0. 93, Replacement of Interbank Offered Rates. The objective of this Statement is to address those and other accounting and financial reporting implications that result from the replacement of an interbank offered rate (IBOR).
Providing an exception to the lease modifications guidance in Statement 87, as amended, for certain lease contracts that are amended solely to replace an IBOR as the rate upon which variable payments depend. The Statement is effective for reporting periods beginning after June 15, 2020, except the removal of LIBOR as an appropriate benchmark interest rate is effective for reporting periods ending after December 31, 2021. The City has not yet determined its effect on the financial statements.
GASB Statement No. 94 , Public-Private and Public-Public Partnerships and Availability Payment Arrangements – In March 2 020, GASB issued GASB Statement No. 94 Public-Private and Public -Public Partnerships and Availability Payment Arrangements. The primary objective of this Statement is to improve financial reporting by addressing issues related to public -private and public-public partnership arrangements (PPPs). This Statement also provides guidance for accounting and financial reporting for availability payment arrangements (APAs). This Statement also provides specific guidance in financial statements prepared using the economic resources measurement focus for a government that is an operator in a PPP that either (1) meets the definition of an SCA or (2) is not within the scope of Statement 87, as amended (as clarified in this Statement) . This Statement also requires a government to account for PPP and non- PPP components of a PPP as separate contracts. This Statement also requires an amendment to a PPP to be considered a PPP modification, unless the operator’s right to use the underlying PPP asset decreases, in which case it should be considered a partial or full PPP termination.
This Statement is effective for fiscal years beginning after June 15, 2022, and all reporting periods thereafter. The City has not yet determined its effect on the financial statements.
EXHIBIT A
237
FINANCIAL SECTION
Notes to Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensiv e Financial Report FY 2020-21
Page | 72
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (Continued)
M. Future Accounting Pronouncements (Continued)
GASB Statement No. 96 , Subscription-Based Information Technology Arrangements – In May 2020, GASB issued GASB Statement No. 96, Subscription-Based Information Technology Arrangements. The objectives of this Statement are to provide guidance on the accounting and financial reporting for subscription- based information technology arrangements (SBITAs) for government end users (governments). This Statement (1) defines a SBITA; (2) establishes that a SBITA results in a right-to-use subscription asset—an intangible asset—and a corresponding subscription liability; (3) provides the capitalization criteria for outlays other than subscription payments, including implementation costs of a SBITA; and (4) requires note disclosures regarding a SBITA. This Statement is effective for fiscal year beginning after June 15, 2022, and all reporting periods thereafter. The City has not yet determined its effect on the financial statements.
GASB Statement No. 97 , Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans – an amendment of GASB Statements No. 14 and No. 84, and a supersession of GASB Statement No. 32 – In June 2020, GASB issued GASB Statement No. 97 Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans—an amendment of GASB Statements No. 14 and No. 84, and a supersession of GASB Statement No. 32. The guidance will reduce the costs associated with reporting on certain employee benefit plans as well as improve the reporting of IRS Section 457 deferred compensation plans that meet the definition of a pension plan, and for benefits provided through those plans. The requirements of this Statement as it applies to component unit criteria for defined contribution pension plans, defined contribution OPEB plans and other employee benefit plans are effective immediately. All other requirements of this statement that is related to the accounting and financial reporting for Section 457 plans are effective for fiscal years beginning after June 15, 2021. The City has not yet determined its effect on its financial statements.
NOTE 2- STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
A. Budgeting Procedures
The City, in general, adopts a biennial operating budget on or before June 30 for each of the ensuing two fiscal years for all funds except the Fiduciary Funds. The operating budget takes the form of a two- year financial plan which is adopted in its entirety by the City Council by a resolution. A mid-period review is conducted in the off-year and appropriations are adjusted accordingly. The fiscal year begins on July 1 and ends on June 30 of the following year. As Livermore is a general law city, it is not subject to a budgetary process prescribed by statute or charter.
The operating budget is subject to supplemental appropriations throughout its term to provide flexibility to meet changing needs and conditions. A resolution approving a supplemental appropriation is necessary when the original total appropriations for that fund would be exceeded. Similarly, supplemental appropriations and budget transfers between funds and projects need approval from the City Council. Budget adjustments within the same fund may be approved by the City Manager if the total appropriation does not exceed the total approved limit for that fund.
All appropriations and encumbrances lapse at year-end. Valid outstanding encumbrances (those for which performance under executory contract is expected in the next fiscal year) are re-appropriated and become part of the subsequent year’s budget.
The operating budget is on a program basis; however, the legal level of budgetary control is at the fund level. For governmental funds, the budget is prepared on a modified accrual basis consistent with generally accepted accounting principles (GAAP), except that land held for redevelopment is treated as an expenditure when purchased, proceeds from the disposition of this land is treated as revenue when measurable and available, and transfers (to) or from different fund categories are treated as budgetary resources (uses). Organizational priorities which have been developed by City Council and City staff are implemented at the program level.
EXHIBIT A
238
FINANCIAL SECTION
Notes to Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensiv e Financial Report FY 2020-21
Page | 73
NOTE 2- STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY (continued)
B. Expenditures in Excess of Appropriations
The funds below incurred expenditures in excess of appropriations in the amounts below. These funds had sufficient fund balances or expected future revenues to finance these expenditures.
Fund
Excess of Expenditures
Over Appropriations
Housing Successor Fund 374$
City Street Sweeping 3,705
Host Community Impact Fee Fund 30,428
TVTC 20% Fee Fund 14,534
C. Fund Balance Deficits / Net Position Deficits
As of June 30, 2021, none of the funds had fund balance/net position deficits.
NOTE 3 – CASH AND INVESTMENTS
The City pools cash from all sources and all funds, except Cash and Investments held by Trustees, so that it can be invested at the maximum yield consistent with safety and liquidity, while individual funds can make expenditures at any time.
A. Policies
California Law requires banks and savings and loan institutions to pledge government securities with a market value of 110% of the City’s cash on deposit, or first trust deed mortgage notes with a market value of 150% of the deposit, as collateral for these deposits. Under California Law this collateral is held in a separate investment pool by another institution in the City’s name and the City is placed ahead of general creditors of the institution.
The City invests in individual investments and in investment pools. Individual investments are evidenced by specific identifiable securities instruments, or by an electronic entry registering the owner in the rec ords of the institution issuing the security, called the book entry system. In order to increase security, the City employs the Trust Department of a bank as the custodian of certain City managed investments, regardless of their form.
The City’s investments are carried at fair value, as required by generally accepted accounting principles. The City adjusts the carrying value of its investments to reflect their fair value at each fiscal year end, and it includes the effects of these adjustments in income for that fiscal year.
EXHIBIT A
239
FINANCIAL SECTION
Notes to Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensiv e Financial Report FY 2020-21
Page | 74
NOTE 3 – CASH AND INVESTMENTS (continued)
B. Classification
Cash and investments are classified in the financial statements as shown below, based on whether or not their use is restricted under the terms of City debt instruments or Agency agreements.
Cash and investments in City Treasury 330,388,046$
C
ash and investments with Trustees 692,717
Total City cash and investments 331,080,763
Cash and investments in Fiduciary Funds (Separate Statement) In City Treasury 18,575,752
With Trustees 2,269,258
Total Fiduciary cash and investments 20,845,010
Total cash and investments 351,925,773$
Cash and investments available for operations is used in preparing proprietary fund statements of cash flows because these assets are highly liquid and are expended to liquidate liabilities arising during the year.
C. Investments Authorized by the California Government Code and the City’s Investment Policy
The City’s Investment Policy and the California Government Code allow the City to invest in the following Investment types, provided the credit ratings of the issuers are acceptable to the City and the approved percentages and maturities are not exceeded. The table below also identifies certain provisions of the California Government Code, or the City’s Investment Policy where the City’s Investment Policy is more restrictive.
Authorized Investment Type Maxim um Maturity Minimum Credit Quality Maximum Percentage of
Portfolio
Maximum Investment in
One Issuer
California Local Agency Bonds* 5 years A None N one U.S. Treasury Bills and Notes 5 years N/A None N one Obligations issued by United States Government
Agencies
5 years N/A None None
Bankers Acceptances 180 days A 40% 30%
Commercial Paper 270 days A1/P1 10% 10%
Negotiable Certificates of Deposit 5 years None 30% N one Repurchase Agreements 1 year None 20% N one
Reverse Repurchase Agreements 92 days None 20% N one
Medium Term Corporate Notes 5 years A 30% N one
Money Market Mutual Funds 5 years Top rating category 15% 10% Collateralized Notes, Bonds, or Other Obligations
Secured by First Priority Security Interest
5 years N/A None None
Certificates of Deposit 5 years N/A 30% N one
California Local Agency Investment Fund 5 years N/A $75 million per account $75 m illion per account Passbook Savings Account N/A N/A N/A N/A
Supranationals 5 Years AA 30% None
* No Maximum Maturity or minimum rating on Bonds issued by the City of Livermore.
EXHIBIT A
240
FINANCIAL SECTION
Notes to Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensiv e Financial Report FY 2020-21
Page | 75
NOTE 3 – CASH AND INVESTMENTS (Continued)
Under the City’s Investment Policy, investments not described above are ineligible investments. In addition, the City may not invest any funds in inverse floaters, range notes, or interest only strips that are derived from a pool of mortgages in accordance with the California Government Code. Except for callable federal agency securities, any security that derives its value from another asset or index is prohibited. In addition, the City may not invest any funds in any security that could result in zero interest accrual if held to maturity.
D. Investments Authorized by Debt and Trust Agreements
The City and the Successor Agency to the former Redevelopment Agency must maintain required amounts of cash and investments with trustees or fiscal agents under the terms of certain debt issues. These funds are unexpended bond proceeds or are pledged reserves to be used if the City and/or the Successor Agency fail to meet their obligations under these debt issues. The California Government Code requires these funds to be invested in accordance with the City resolutions, bond indentures or State statutes. The table below identifies the investment types that are authorized for investments held by fiscal agents.
Authorized Investment Type Maxim um Maturity Minimum Credit Quality Maximum % Allowed U.S. Treasury Bills and Notes No Limit NA No Limit
Federal and Local Agency Obligations No Limit NA No Limit Federal funds, unsecured certificates of deposit, time
deposits & bankers acceptances Not more than 360 days A-1 or A-1+ by S&P and P-1 by Moody No Limit Commercial Paper Not more than 270 days A-1+ by S&P and P-1 by Moody No Limit Money Market Mutual Funds No Limit AAAm or AAAm-G or better by S&P No Limit Municipal Bonds No Limit Aaa or AAA or general obligations of states with a rating of A2/A or high by Moody, S&P, or Fitch No Limit California Local Agency Investment Fund (LAIF) NA NA $75 million per account Repurchase Agreements 6 mo. or less Equal to or better than existing Certificates by Moody’s No Limit
Investment Agreements No Limit Equal to or better than existing Certificates by Moody’s No Limit
Pre-refunded municipal obligations No Limit Aaa by Moody’s & AAA by S&P; if no Moody’s rating, then must have been pre-refunded with cash. No Limit
EXHIBIT A
241
FINANCIAL SECTION
Notes to Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensiv e Financial Report FY 2020-21
Page | 76
NOTE 3 – CASH AND INVESTMENTS (Continued)
E. Interest Rate Risk
Interest rate risk represents how changes in market interest rates will adversely affect the fair value of an investment.
Normally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. The City generally manages its interest rate risk by holding investments to maturity. Information about the sensitivity of the fair values of the City’s investments (including investments held by bond trustees) to market interest rate fluctuations is provided by the following table that shows the distribution of the City’s investments by maturity:
12 Months 13 to 24 25 to 60 More than
Investment Type or less Months Months 60 Months Total
U.S. Government-Sponsored Enterprise Agencies -
Callable 64,808,520$ 6,693,705$ 4,318,317$ -$ 75,820,542$ Non-callable 11,291,480 11,281,730 61,636,467 - 84,209,677 California Local Agency Investment Fund 73,575,830 - - - 73,575,830 Money Market Mutual Funds 6,223,218 - - - 6,223,218 Negotiable Certificates of Deposit 3,235,060 1,264,649 12,408,493 - 16,908,202 Medium Term Corporate Notes 10,075,591 18,336,613 45,966,325 - 74,378,529 Municipal Bonds - 1,792,595 524,683 919,537 3,236,815 Total Investments 169,209,699$ 39,369,292$ 124,854,285$ 919,537$ 334,352,813 Cash Equivalent 17,572,960
Total Cash and Investments 351,925,773$
F. Credit Risk
Credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized st atistical rating organization. Presented below is the actual rating as of June 30, 2021 for each investment type as provided by Standard and Poor ’s investment rating service.
Investment Type AAA AA A BBB Not Rated Total
Rated:
U.S. Government-Sponsored Enterprise Agencies -
Callable 40,561,745$ 29,298,007$ -$ -$ 5,960,790$ 75,820,542$ Non-callable 70,009,487 11,136,440 - - 3,063,750 84,209,677 California Local Agency Investment Fund - - - - 73,575,830 73,575,830 Money Market Mutual Funds 5,002,429 - - - 1,220,789 6,223,218 Negotiable Certificates of Deposit - - - - 16,908,202 16,908,202 Medium Term Corporate Notes - 1,558,968 70,794,230 2,025,331 - 74,378,529 Municipal Bonds - 524,683 - - 2,712,132 3,236,815 Total Investments 115,573,661$ 42,518,098$ 70,794,230$ 2,025,331$ 103,441,493$ 334,352,813 Cash Equivalent (Overdraft) 17,572,960
Total Cash and Investments 351,925,773$
EXHIBIT A
242
FINANCIAL SECTION
Notes to Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensiv e Financial Report FY 2020-21
Page | 77
NOTE 3 – CASH AND INVESTMENTS (Continued)
G. Local Agency Investment Fund
The City is a participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The City reports its investment in LAIF at the fair value amount provided by LAIF, which is the same as the value of the pool share. The balance is available for withdrawal on demand and is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. Included in LAIF’s investment portfolio are collateralized mortgage obligations, mortgage-backed securities, other asset -backed securities, loans to certain state funds, and floating rate securities issued by federal agencies, government -sponsored enterprises, United States Treasury Notes and Bills, and corporations. These investments matured in an average of 291 days.
Money Market funds were available for withdrawal on demand at June 30, 20 21 with an average maturity of 30 days or less.
H. Concentration of Credit Risk
Investments in the securities of any individual issuer, other than U. S. Treasury securities, mutual funds, and external investment funds that represent 5% or more of total investments are as follows on June 30, 2021:
Issuer Type of Investments A mount
Entity-wide:
Federal Home Loan Bank U.S. Agency Securities 77,418,077$ Federal Farm Credit Bank U.S. Agency Securities 30,249,910 Federal National Mortgage Association U.S. Agency Securities 23,906,090 Federal Home Loan Mortgage Association U.S. Agency Securities 18,368,625
I. Fair Value Measurement of Investments
The City categorizes the fair value measurements of its investments based on the hierarchy established by generally accepted accounting principles. The fair value hierarchy, which has three levels, is based on the valuation inputs used to measure an asset's fair value. The following provides a summary of the hierarchy used to measure fair value:
Level 1 - Quoted prices in active markets for identical assets that the City has the ability to access at the measurement date. Level 1 assets may include debt and equity securities that are traded in an active exchange market and that are highly liquid and are actively traded in over-the-counter markets.
Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets in active markets, quoted prices for identical or similar assets in markets that are not active, or other inputs that are observable, such as interest rates and curves observable at commonly quoted intervals, implied volatilities, and credit spreads. For financial reporting purposes, if an asset has a specified term, a Level 2 input is required to be observable for substantially the full term of the asset.
Level 3 - Unobservable inputs should be developed using the best information available under the circumstances, which might include the City's own data. The City should adjust that data if reasonable available information indicates that other market participants would use different data or certain circumstances specific to the City are not available to other market participants.
EXHIBIT A
243
FINANCIAL SECTION
Notes to Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensiv e Financial Report FY 2020-21
Page | 78
NOTE 3 – CASH AND INVESTMENTS (Continued)
I. Fair Value Measurement of Investments (Continued)
The City's fair value measurements are as follows at June 30, 2021:
Level 2 Level 3
U.S. Government-Sponsored Enterprise Agencies
Callable 75,820,542$ -$ 75,820,542$
Non-callable 84,209,677 - 84,209,677 Medium Term Corporate Notes 74,378,529 - 74,378,529 Municipal Bonds 2,317,278 919,537 3,236,815 Negotiable Certificates of Deposit 16,908,202 - 16,908,202 Total inves tments meas ured at fair value 253,634,228$ 919,537$ 254,553,765 Investments Measured at Amortized Cost:
Money Market Mutual Funds 6,223,218
Investments Exempt from Fair Value Hierarchy:
California Local Agency Investment Fund 73,575,830
Cash Equivalent 17,572,960
Total Cash and Investments 351,925,773$
June 30, 2021
Fair Value
Meas urements
Using Levels
The California Local Agency Investmen t Fund (LAIF) is valued using a factor provided in the Pooled Money Investment Account (PMIA) Performance Report by the State Treasurer's Office. I nvestments classified in Level 2, were valued using prices provided by the City’s custodian bank. Fair value is defined as quoted market value on the last day of the period.
The City issued Pleasant View Limited Obligation Improvement Bonds, Series 2018 for and on behalf of Assessment District No.2016-2 in the amount of $967,537 on June 14, 2018 as a direct placement debt. The City then purchased these bonds as an investment. These investments are not traded in the open market and, therefore, measured at Level 3 as per GASB Statement No. 72 since the valuation inputs for this bond are unobservable. As of June 30, 2021, the balance outstanding for these bonds is $919,537. Additional information is provided in Note 8.
EXHIBIT A
244
FINANCIAL SECTION
Notes to Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensiv e Financial Report FY 2020-21
Page | 79
NOTE 4 - INTERFUND TRANSACTIONS
A. Current Interfund Balances
Current interfund balances arise in the normal course of business and represe nt short-term borrowings occurring as a result of expenditures which are paid prior to the receipt of revenues. These balances are expected to be repaid shortly after the end of the fiscal year when revenues are received. There were no current amounts due from one fund to another at June 30, 2021.
B. Transfers between Funds
With Council approval, resources may be transferred from one City fund to another. The purpose of the majority of transfers is to subsidize operations of programs and funds which are not self-sustaining. Less often, a transfer may be made to open or close a fund. Interfund transfers for the year ended June 30, 2021 are summarized below.
Fund Receiving Transfers Fund Making Transfers
Amount
Transferred
General Fund Low Income Housing Fund 273,167$ A
Non-Major Governmental Funds 263,856 A
Non-Major Governmental Funds General Fund 2,422,215 B Non-Major Governmental Funds 252,896 B
Stormwater Enterprise Fund General Fund 1,767,363 C Total Interfund Transfers 4,979,497$
A - Transfer for reimbursement for administrative costs B - Transfers of approximately $1.1 million for the 2020 COP debt service payments and remaining for operating subsidies and expenses.
C - Operating subsidy
C. Long-Term Interfund Advances
The City’s General Fund made an advance of $4,720,000 to the Other Impact Fees Special Revenue Fund for downtown revitalization and the loan will be repaid to the General Fund as the fees are collected. A payment of $5,849 was made during fiscal year 2020-2021. The balance as of June 30, 2021 is $3,874,396.
D. Internal Balances
As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements.
Exceptions to this general rule are payments in lieu of taxes where the amounts are reasonably equivalent in value to the interfund services provided and other charges between the government’s airport, water, stormwater, and sewer functions and various other functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned.
Internal balances are presented in the City-wide financial statements only. They represent the net interfund receivables and payables remaining after the elimination of all such balances within governmental and business-type activities.
EXHIBIT A
245
FINANCIAL SECTION
Notes to Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensiv e Financial Report FY 2020-21
Page | 80
NOTE 5 - NOTES RECEIVABLE
As of June 30, 2021, Notes Receivables balances are as follows:
Housing
Successor
Low Income
Housing
Housing &
Community
A ssistance
Other Local,
State and
Federal
Grants
Other Special
Revenue
Funds Total
Deferred Second Mortgage Program -$ 20,133,561$ 806,454$ 1,656,166$ -$ 22,596,181$ Rehabilitation Loan Program - 310,069 955,755 196,291 - 1,462,115 Valley Care Senior Housing Project - 800,000 - - - 800,000 Livermore Housing Authority - - - 510,000 - 510,000 Loans to Successor Agency of the former
Redevelopment Agency 643,438 - - - - 643,438 Eden Housing Project 1,386,622 - - - - 1,386,622 Livermore Independent Living Associates Project 2,556,133 - - - - 2,556,133 Affordable Housing Loans 171,760 - - - - 171,760 California Water Service Agreement(s) - - - - 84,428 84,428 Totals 4,757,953$ 21,243,630$ 1,762,209$ 2,362,457$ 84,428$ 30,210,677$
The City administers the Deferred Second Mortgage Program using Low Income Housing Fund revenues and a Rehabilitation Loan Program using Community Development Block Grants. Under these Programs, individuals with incomes below a certain level are eligibl e to receive low interest loans, secured by second deeds of trust, to help purchase their home or rehabilitate it. Upon approval of loans, the City disburses the funds, arranges for, and collects repayments.
As part of the Valley Care Senior Housing Project, Agency funds transferred to the City’s Housing and Community Assistance Fund in fiscal year 2001- 2002 were used to finance the Developer Loan in the amount of $800,000 which was used to partially finance City and County Development Fees. The loan bear s interest at ten percent, is due in fifty -seven years and is secured by a subordinated deed of trust. If the project maintains affordability covenants through maturity the interest rate will drop to five percent and eventually the five percent interest accrued will be forgiven.
In fiscal year 2005-2006, the City loaned Livermore Housing Authority $510,000 from the Housing Trust Fund to be used for the acquisition of six units for low-income individuals located at 2276-2280 Chestnut Street. The loan bears interest at 3.00% per annum on the outstanding principal from the date of the closing of the permanent loan. The principal and all the interest will be due and payable on the earlier of the date the property is sold or when the permanent loan is refinanced. In the event of residual receipts, payments of principal and interest will commence on July 1, 2008 until the loan is paid in full or terminated.
The former Redevelopment Agency (RDA) engaged in programs designed to encourage construction of or improvement to low -to-moderate income housing. Under these programs, grants or loans are provided under favorable terms to homeowners or developers who agree to expend these funds in accordance with the Agency’s terms. With the dissolution of the former Rede velopment Agency the City became the Successor to the former Redevelopment Agency’s housing activities and as a result, the Housing Successor Fund assumed the notes receivable of the former Redevelopment Agency’s Low- and Moderate-Income Housing Fund. The balances of the notes receivable in the Housing Successor Fund at June 30, 2021 are set forth below:
During the fiscal year ended June 30, 2010, the former RDA approved an interfund advance of $1,561,803 from the Low and Moderate Income Housing fund to t he former Agency’s Capital Projects Fund to make the required payment to the Supplemental Education Revenue Augmentation Fund (SERAF). During the fiscal year ended June 30, 2011, the former Agency approved a second interfund advance in the amount of $32 1,548 for a total of $1,883,351. As of June 30, 2021, the outstanding balance is $643,438.
EXHIBIT A
246
FINANCIAL SECTION
Notes to Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensiv e Financial Report FY 2020-21
Page | 81
NOTE 5 - NOTES RECEIVABLE (Continued)
During fiscal year 1992, the former RDA loaned a developer $1,520,605 as part of the Eden Housing Project agreement, the proceeds of which were used for land acquisition and development of low - and moderate-income housing. As of June 30, 2021, the loans had an outstanding balance of $1,386,622. The land loan bears interest at 3% and the predevelopment loan bears interest at 9% which is due in 2049 and is subordinated to permanent bank loans.
In 2009, the former RDA agreed to a property tax loan, extended to the Livermore Senior Associates LLC, which bears interest at 4%. Annual repayments begin after the project is complete commencing in year eight from available cash flows of the project. In fiscal year 2017-18, loan advances have ceased, and the loan repayment period commenced.
The principal balance was adjusted to match the repayment schedule. As of June 30, 2021 , the outstanding loan balance was $2,556,133.
In April 2011, the former RDA loaned an individual $199,032 from Low- and Moderate-Income Housing Funds to be used for the purchase of an affordable housing unit. To assist in the refinancing of a below market rate unit, the City originally loaned the borrower $61,000. To further assist, the City increased that loan to $184,652 (original loan of $61,000 included). The balance of the two loans as of June 30, 2021 is $171,760.
In July 1990 and September 1992, the City and California Water Service Company (“Calwater”) entered into agreements to make annual payments for a term of 40 years to the City of Livermore for water lines sold to Calwater under Consolidated Refunding District 2002, College Avenue. The balance outstanding on this loan on June 30, 2021 is $84,428.
EXHIBIT A
247
FINANCIAL SECTION
Notes to Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensiv e Financial Report FY 2020-21
Page | 82
NOTE 6 – CAPITAL ASSETS
All capital assets are valued at historical cost or estimated historical cost if actual historical cost is not available.
Donated capital assets, donated works of art and similar items, and capital assets received in a service concession arrangement are valued at acquisition cost . Some capital assets may be acquired using Federal and State grant funds, or they may be contributed by developers or other governments. GASB 34 requires that these contributions be accounted for as revenues at the time the capital assets are contributed.
The City’s policy is to capitalize infrastructure with a cost exceeding $100,000 and other capital assets with a cost exceeding $5,000 and with useful lives exceeding one year.
The City has recorded all its public domain (infrastructure) capital assets, which include roads, bridges, curbs and gutters, streets and sidewalks, drainage systems and lighting systems in its government–wide financial statements.
All capital assets with limited useful lives are depreciated over their estimated useful lives. The purpose of depreciation is to spread the cost of capital assets equitably among all users over the life of the assets. The amount charged to depreciation expense each year represents that year’s pro rata share of the cost of capital assets.
Depreciation of all capital assets is charged as an expense against operations each year and the total amount of depreciation taken over the years, called accumulated depreciation, is reported on statement of Net Position as a reduction in the book value of the capital assets.
Depreciation of capital assets in service is provided using the straight-line method which means the cost of the asset is divided by its expected useful life in years and the result is charged to expense each year until the asset is fully depreciated. The City has assigned the useful lives listed below to capital assets.
Buildings 25-50 years
Improvements 20-50 years
Equipment 3-20 years
Library books 3-20 years
Licensed Vehicles 3-20 years
Infrastructure 25-50 years
EXHIBIT A
248
FINANCIAL SECTION
Notes to Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensiv e Financial Report FY 2020-21
Page | 83
NOTE 6 – CAPITAL ASSETS (Continued)
A. Capital Asset Additions and Retirements
Capital asset activity for the year ended June 30, 2021 comprises the following:
Balance Retirements Transfers/ Balance at
June 30, 2020 Additions and adjustments Reclassification June 30, 2021 Governmental activities
Governmental Fund Capital Assets
Capital assets not being depreciated:
Land 39,008,811$ -$ -$ -$ 39,008,811$ Intangible asset - easement 4,517,994 24,939 - - 4,542,933 Construction in progress 85,840,810 10,454,848 - - 96,295,658 Subtotal 129,367,615 10,479,787 - - 139,847,402 Capital assets being depreciated, cost:
Office equipment 8,696,143 71,499 - - 8,767,642 Other equipment 7,881,666 77,793 - - 7,959,459 Library books 2,062,340 - - - 2,062,340 Licensed vehicles 261,992 - - - 261,992 Infrastructure 327,549,444 830,292 - - 328,379,736 Buildings 118,050,206 - - - 118,050,206 Subtotal 464,501,791 979,584 - - 465,481,375 Accumulated Depreciation:
Office equipment (8,332,638) (83,727) - - (8,416,365) Other equipment (7,237,240) (210,938) - - (7,448,178) Library books (2,062,340) - - - (2,062,340) Licensed vehicles (78,120) (105,750) - - (183,870) Infrastructure (177,317,158) (8,296,193) - - (185,613,351) Buildings (41,331,535) (2,377,511) - - (43,709,046) Subtotal (236,359,031) (11,074,119) - - (247,433,150) Net Governmental Funds
capital assets being depreciated 228,142,760 (10,094,535) - - 218,048,225 Total Governmental Funds
capital assets 357,510,375$ 385,252$ -$ -$ 357,895,627$ Balance at Retirements Transfers/ Balance at
June 30, 2020 Additions and Adjustments
Reclassification June 30, 2021
Internal Service Fund Capital Assets
Capital assets not being depreciated:
Construction in progress 674,502$ 499,442$ -$ (281,456)$ 892,488$ Subtotal 674,502 499,442 - (281,456) 892,488 Capital assets being depreciated, cost:
Office equipment 2,552,873 82,694 - - 2,635,567 Other equipment 796,353 52,677 - - 849,030 Infrastructure 12,388,178 18,409 - - 12,406,587 Licensed vehicles 18,273,690 779,490 (670,972) 281,456 18,663,664 Subtotal 34,011,094 933,270 (670,972) 281,456 34,554,848 Accumulated Depreciation:
Office equipment (2,030,530) (268,258) - - (2,298,788) Other equipment (569,601) (51,932) - - (621,533) Infrastructure (2,675,988) (430,958) - - (3,106,946) Licensed vehicles (11,188,175) (1,592,146) 653,472 - (12,126,849) Subtotal (16,464,294) (2,343,294) 653,472 - (18,154,116) Net Internal Service Fund
capital assets being depreciated 17,546,800 (1,410,024) (17,500) 281,456 16,400,732 Total Internal Service Funds 18,221,302 (910,582) (17,500) - 17,293,220 Governmental activity capital assets, net 375,731,677$ (525,330)$ (17,500)$ -$ 375,188,847$
EXHIBIT A
249
FINANCIAL SECTION
Notes to Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensiv e Financial Report FY 2020-21
Page | 84
NOTE 6 – CAPITAL ASSETS (Continued)
A. Capital Asset Additions and Retirements (Continued)
Balance Retirements Transfers/ Balance at
June 30, 2020 Additions and adjustments Reclassification June 30, 2021 Business-type activities
Capital assets not being depreciated:
Land 13,380,924$ -$ -$ -$ 13,380,924$ Land improvements 634,433 - - - 634,433 Construction in progress 29,393,416 6,759,888 - - 36,153,304 Subtotal 43,408,773 6,759,888 - - 50,168,661 Capital assets being depreciated:
Office equipment 844,864 - - - 844,864 Other equipment 2,789,841 73,425 (57,804) - 2,805,462 Licensed Vehicles 971,102 - (25,024) - 946,078 Airport infrastructure 11,601,545 - - - 11,601,545 Water infrastructure 50,923,942 - - - 50,923,942 Sewer infrastructure 132,995,006 288,492 - - 133,283,498 Storm Drain infrastructure 105,433,718 133,730 - - 105,567,448 Stormwater infrastructure 1,011,473 - - - 1,011,473 Buildings 22,674,452 - - - 22,674,452 Subtotal 329,245,943 495,647 (82,828) - 329,658,762 Accumulated Depreciation:
Office equipment (416,812) (60,079) - - (476,891) Other equipment (1,931,873) (150,278) 23,318 - (2,058,833) Licensed Vehicles (473,021) (34,178) 25,022 - (482,177) Airport infrastructure (10,942,947) (71,939) - - (11,014,886) Water infrastructure (25,446,006) (1,455,245) - - (26,901,251) Sewer infrastructure (84,924,451) (3,244,639) - - (88,169,090) Storm Drain infrastructure (85,462,445) (1,766,931) - - (87,229,376) Stormwater infrastructure (109,552) (44,651) - - (154,203) Buildings (10,376,463) (450,969) - - (10,827,432) Subtotal (220,083,570) (7,278,909) 48,340 - (227,314,139) Net capital assets being depreciated 109,162,373 (6,783,262) (34,488) - 102,344,623 Business-type activity capital assets, net 152,571,146$ (23,374)$ (34,488)$ -$ 152,513,284$
B. Depreciation Allocation
Depreciation expense was charged to functions and programs based on their usage of the related assets. The amount allocated to each function or program was as follows:
Governmental
Activities
Business-Type
Activities
General Government 2,344,220$ -$
Fire 266,329 -
Police 303,127 -
Public Works 8,566,781 -
Community Development 1,328,045 -
Library 608,911 -
Airport - 305,997
Water - 1,521,016
Sewer - 3,637,404
Storm Water - 1,814,492
Total Depreciation Expense 13,417,413$ 7,278,909$
Depreciation Expense
EXHIBIT A
250
FINANCIAL SECTION
Notes to Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensiv e Financial Report FY 2020-21
Page | 85
NOTE 7 – LONG-TERM LIABILITIES
A. Long-Term Debt Schedule:
The City’s debt comprises bonds, loans, notes, certificates of participation (COP), and refunding certificates of participation. Certificates of participation are similar to debt; they allow investors to participate in a share of guaranteed payments, which are made by the City. Because they are similar to debt, the present value of the total of the payments to be made by the City is recorded as long-term debt. Details of the individual debt issues and transactions are set forth below:
Balance at Balance at C urrent
June 30, 2020 Retirements June 30, 2021 Portion
Governmental Activities
Certificates of Participation:
2020A, 4%, 2042 7,465,000$ -$ 7,465,000$ 180,000$ Unamortized Premium 1,413,613 64,255 1,349,358 64,255 2020B, 4%, 2030 35,467,418 - 35,467,418 2,507,470 Unamortized Premium 6,508,667 519,919 5,988,748 519,919 Housing & Urban Development Loan, varies, 2030 1,540,562 122,607 1,417,955 126,758 Internal Service Funds:
Capital Lease Obligations:
Banc of America Equipment Lease/Purchase Loan 7,563,146 679,300 6,883,846 735,353 Total governmental activities debt 59,958,406$ 1,386,081$ 58,572,325$ 4,133,755$ Business-type Activities
Airport
Certificates of Participation:
2020B, 4%, 2030 3,726,130$ -$ 3,726,130$ 161,875$ Unamortized Premium 700,333 39,330 661,003 39,330 Capital Lease Obligations:
Banc of America Equipment Lease/Purchase Loan 296,702 26,687 270,015 28,888 Water
Certificates of Participation:
2020B, 4%, 2030 2,841,453 - 2,841,453 235,656 Unamortized Premium 515,773 46,888 468,885 46,888 Total business-type activities debt 8,080,391$ 112,905$ 7,967,486$ 512,637$
B. Long Term Debt
CERTIFICATES OF PARTICIPATION:
2020 Certificates of Participation
On June 25, 2020, the City issued tax-exempt 2020 Certificates of Participation (2020 COP) to refinance the 2011 COP, 2014 COP Series A and 2014 COP Series B. There are two semi‐annual debt service payments, consisting of principal payments due annually on April 1 and interest payments due on November 1 and April 1, which are payable solely from and secured by the lease payments made by the City to the Public Property Financing Corporation of California. Lease payments will be made by the City pursuant to the Lease Agreement for the use and occupancy of the Leased Property, which comprises of t he City’s police facility and civic center library located in the City’s Civic Center.
EXHIBIT A
251
FINANCIAL SECTION
Notes to Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensiv e Financial Report FY 2020-21
Page | 86
NOTE 7 – LONG-TERM LIABILITIES (Continued)
B. Long Term Debt (Continued)
CERTIFICATES OF PARTICIPATION (Continued)
The 2020 Certificates of Participation Series A (2020 COP Series A) are qualified 501(c)(3) certificates and are issued in the principal amount $7,465,000 to refund the 2014 COP Series A (Livermore Valley Performing Arts Center Refunding) and to pay certain costs of executing and delivering the 2020 Series A Certificates.
Lease payments for 2020 COP Series A will be made by the pledged revenue of the Host Community Impact Fee Special Revenue Fund.
The City issued $42,035,000 principal amount of 2020 Certificates of Participation Series B, (2020 COP Series B) to refund the outstanding principal balance of $14,945,000 for the 2011 COP and $35,530,000 for the 2014 COP Series B as well as to fund certain costs of executing and delivery of the Certificates. Lease payments for 2020 COP Series B will be made by the General fund, Airport Enterprise Fund, and Water Enterprise Fund.
HUD SECTION 108 LOANS – DIRECT BORROWING:
In fiscal year 2010, the City received a Section 108 loan in the amount of $1,320,000 from the Department of Housing and Urban Development to purchase the Hagemann Farms. The principal payments are due annually from 2012 through 2030. As of June 30, 2021, the outstanding loan balance was $620,000.
In fiscal year 2015, the City received a Section 108 loan in the amount of $725,000 from the Department of Housing and Urban Development to purchase the building located at 141- 145 North Livermore Avenue and the adjacent commercial units at 147-149 North Livermore Avenue. The principal payments are due annually from August 1, 2015 through 2030. As of June 30, 2021, the outstanding loan balance was $509,000.
In May 2014, the City entered into a Public Participation Jurisdiction (PPJ) agreement with Alameda County and the Cities of Dublin and Pleasanton to jointly repay a $1,250,000 Section 108 loan guarantee from the US Department of Housing and Urban Development (HUD). This loan was obtained to renovate a building owned by Axis Community Health at 5925 West Las Positas Boulevard, Pleasanton, to expand medical and mental health services throughout the Tri-Valley region. The City of Pleasanton drew $950,000 only since Alameda County paid its share of $300,000 in cash. The City of Livermore has committed to pay $387,505 or approximately 41% of the total loan amount of $950,000. As of June 30, 2021, the outstanding loan balance was $288,955. Payment of the loan is made out of the Other State, Federal, and Local Grants Fund.
CAPITAL LEASE OBLIGATIONS:
Banc of America Equipment Lease/Purchase Loan
On October 24, 2012, the City entered into an equipment lease/purchase agreement with Banc of America Public Capital Corp to install photovoltaic panels and streetlights throughout the City. This lease agreement qualifies as a capital lease for accounting purposes and, therefore, has been recorded at the present value of minimum lease payments in the amount of $12,538,957. Rental payments are due in 180 uneven monthly payments ranging from $69,892 to $115,868 and include interest at the rate of 2.59%. Monthly lease payments began on November 24, 2013 and end on October 24, 2028. Because loan payments did not begin until construction was completed in November 2013, the accrued interest of $110,494 for July through October was capitalized and added to the principal balance.
Lease payments are being made by the Facilities Rehabilitation Internal Service Fund and the Airport Enterprise Fund.
EXHIBIT A
252
FINANCIAL SECTION
Notes to Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensiv e Financial Report FY 2020-21
Page | 87
NOTE 7 – LONG-TERM LIABILITIES (Continued)
C. Debt Service Requirements
Debt service requirements are shown below for all long-term debt, including capital lease obligations.
For the Year
Ending June 30 Principal Interest Principal Interest
2022 3,549,581$ 1,881,222$ 426,419$ 261,419$ 2023 3,737,208 1,747,370 445,004 244,417 2024 3,931,537 1,606,578 464,973 226,678 2025 4,134,636 1,458,580 484,391 208,186 2026 4,349,782 1,303,051 505,124 188,928 2027-2031 21,324,769 4,040,284 2,738,021 629,942 2032-2036 4,482,792 1,599,604 797,580 277,507 2037-2041 5,198,914 641,002 976,086 100,698 2042 525,000 10,500 - - Total 51,234,219$ 14,288,191$ 6,837,598$ 2,137,775$ Premium, net of amortization 7,338,106 1,129,888
58,572,325$ 7,967,486$
Governmental Activities Business-type Activities
D. Compensated Absences
Compensated absences are comprised of unused vacation leave and certain compensated time off and are accrued as earned. Compensated absences are liquidated by the fund that has recorded the liability. The long-term portion of governmental activities compensated absences is liquidated primari ly by the General Fund. The liability for compensated absences is determined annually. For all governmental funds, amounts expected to be paid out for permanent liquidations due to terminations and retirements are recorded as fund liabilities; the long-t erm portion is recorded in the Statement of Net Position. Sick pay does not vest and is not accrued.
The change in compensated absences for the fiscal year 2020-21 was as follows:
Governmental Business Type
A
ctivities Activities Total
Beginning balance 4,026,162$ 630,494$ 4,656,656$ Additions 1,905,470 292,469 2,197,939
Payments (1,741,966) (258,154) (2,000,120) Ending balance 4,189,666$ 664,809$ 4,854,475$ Current portion 1,266,330$ 237,378$ 1,503,708$
EXHIBIT A
253
FINANCIAL SECTION
Notes to Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensiv e Financial Report FY 2020-21
Page | 88
NOTE 8 - SPECIAL ASSESSMENT DISTRICT DEBT WITH NO CITY COMMITMENT
Special assessment districts, including Mello Roos Districts, exist in various parts of the City to provide improvements to properties located in those districts. Properties are assessed for the cost of improvements; these assessments are payable over the term of the debt issued to finance the improvements and must be sufficient to repay this debt. The City acts solely as the collecting and paying agent for the special assessment district debt issues below, but it has no direct or contingent liability or moral obligation for the payment of this debt. This debt is not included in the general debt of the City. The outstanding balance of each of these issues as of June 30, 2021 is as follows:
District
Balance at
June 30, 2020 Retirements
Balance at
June 30, 2021
Current
Portion
Community F acilities District No. 2009-1 (El Charro)
2015 Refunding Special Tax Note 17,747,352$ 440,092$ 17,307,260$ 463,809$ 2016 Special Tax Bonds 4,517,343 97,366 4,419,977 101,162 2017 Special Tax Note 2,794,623 110,529 2,684,094 115,779 Community F acilities District No. 1999-1 (Tri-Valley Technology Park) Special Tax Bonds Series 2015 12,225,000 945,000 11,280,000 985,000 Community F acilites District No. 2016-2 (Shea Properties) Special Tax Refunding Bonds, Series 2016 9,110,000 295,000 8,815,000 315,000 Assessment District 2016-2 (Pleasant View)
Improverment Bonds, Series 2018 919,537 - 919,537 19,537 Total 47,313,855$ 1,887,987$ 45,425,868$ 2,000,287$
Community Facilities District (CFD) No. 2009-1 (El Charro)
2015 Refunding Special Tax Note – On June 1, 2015, the City on behalf of El Charro CFD No. 2009-1 entered into a special tax loan agreement with Livermore Premium Outlets, LLC. This loan was issued to refund the remaining principal amounts of the 2012 and 2014 loans.
2016 Special Tax Bonds – On September 1, 2016 the City on behalf of El Charro CFD No. 2009-1 entered into a special tax loan agreement with Crosswinds Church. The Bonds were issued to fund certain public infrastructure improvements within the CFD.
2017 Special Tax Note – On July 14, 2017 the City on behalf of El Charro CFD No. 2009-1 entered into a special tax loan agreement with Livermore Investments, LLC. This loan was issued to fund certain public infrastructure improvements within the CFD.
Community Facilities District No. 1999-1 (Tri-valley Technology Park) Special Tax Bonds, Series 2015
On May 28, 2015, the City sponsored the issuance of the Community Facilities District No. 1999- 1 (Tri -valley Technology Park) Special Tax Bonds, Series 2015. The Bonds were issued to defease and refund remaining principal amount of Community Facilities District No. 1999-1 (Tri-valley Technology Park) Special Tax Bonds, Series 2000.
Community Facilities District No. 2016-2 (Shea Properties) Special Tax Refunding Bonds, Series 2016
On December 22, 2016, the City sponsored the issuance of Community Facilities District No. 2016-2 (Shea Properties) Special Tax Refunding Bonds, Series 2016. The bonds were issued to defease and refund the remaining principal amount of the Community Facilities District No 2006-1 (Shea Properties) Special Tax Bonds, Series 2006.
Assessment District No. 2016-2 (Pleasant View) Limited Obligation Improvement Bonds, Series 2018
On June 14, 2018, the City issued bonds to fund certain public infrastructure improvements within the assessment district. The improvements included connections to the sanitary sewer service system, installation of streetlights, fire hydrants, provide for emergency vehicle access, and the addition of sidewalk curb and gutters to the required standards of the City. For additional information, see Note 3(I).
EXHIBIT A
254
FINANCIAL SECTION
Notes to Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensiv e Financial Report FY 2020-21
Page | 89
NOTE 9 – NET POSITION AND FUND BALANCES
Net Position is measured on the full accrual basis, while Fund Balance is measured on the modified accrual basis.
A. Net Position
Net Position is the excess of all the City’s assets and deferred outflows of resources over all its liabilities and deferred inflows of resources, regardless of fund. Net Position is divided into three captions. These captions apply only to Net Position, which is determined only at the Government-wide level, and are described below:
Net Investment in Capital Assets describes the portion of Net Position which is represented by the current net book value of the City’s capital assets, less the outstanding balance of any debt issued to finance these assets.
Restricted describes the portion of Net Position which is restricted as to use by the terms and conditions of agreements with outside parties, governmental regulations, laws, or other restrictions which the City cannot unilaterally alter. These restrictions principally include developer fees received for use on capital projects and debt service requirements.
Unrestricted describes the portion of Net Position which is not restricted as to use.
Sometimes the City will fund outlays for a particular purpose from both restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted- net position and unrestricted-net position in the government-wide and proprietary fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the City’s policy to consider restricted-net position to have been depleted before unrestricted-net position is applied.
B. Fund Balances
Governmental fund balances represent the net current assets of each fund. Net current assets generally represent a fund’s ca sh and recei vables, less its liabilities. The City’s fund balances are classified in accordance with Governmental Accounting Standards Board Statement Number 54 (GASB 54), Fund Balance Reporting and Governmental Fund Type Definitions, which requires the City to classify its fund balances based on spending constraints imposed on the use of resources.
Each category in the following hierarchy is ranked according to the degree of spending constraint:
Non-spendables represents balances set aside to indicate items do not represent available, spendable resources even though they are a component of assets. Fund balances required to be maintained intact, such as Permanent Funds, and assets not expected to be converted to cash, such as prepaids, notes receivable, and land held for redevelopment are included. However, if proceeds realized from the sale or collection of non-spendable assets are restricted, committed or assigned, then non-spendable amounts are required to be presented as a component of the applicable category.
Restricted fund balances have external restrictions imposed by creditors, grantors, contributors, laws, regulations, or enabling legislation which requires the resources to be used only for a specific purpose.
Committed fund balances have constraints imposed by formal action of the City’s highest level of decision- making authority. The City Council is the highest level of decision- making authority for the City that can, by adoption of a resolution prior to the end of the fiscal year, commit fund balance. Once adopted, the limitation imposed by the resolution remains in place until a similar action is taken to remove or revise the limitation.
EXHIBIT A
255
FINANCIAL SECTION
Notes to Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensiv e Financial Report FY 2020-21
Page | 90
NOTE 9 – NET POSITION AND FUND BALANCES (Continued)
B. Fund Balances (Continued)
Assigned fund balances are amounts constrained by the City’s intent to be used for a specific purpose but are neither restricted nor committed. Intent is expressed through Council resolution and/or budget document or its designee (City Manager) and may be changed at the discretion of the City Council or its designee. This category includes Non- spendables, when it is the City’s intent to use proceeds or collections for a specific purpose, and residual fund balances, if any, of Special Revenue, Capital Projects and Debt Service Funds which have not been restricted or committed.
Unassigned fund balance represents residual amounts that have not been restricted, committed, or assigned. This includes the residual general fund balance and residual fund deficits, if any, of other governmental funds.
The City’s permanent fund reported a fund balance amount of $692,717 of which $183,193 represents the cumulative net appreciation on investments available for expenditure and a permanent amount of $506,524 reported as restricted fund balance. The investment income can only be spent on Doolan Canyon projects.
Sometimes the City will fund outlays for a particular purpose from both restricted and unrestricted resources (the total of committed, assigned, and unassigned fund balance). In order to calculate the amounts to report as restricted, committed, assigned, and unassigned fund balance in the governmental fund financial statements a flow assumption must be made about the order in which the resources are considered to be applied. It is the City’s policy to consider restricted fund balance to have been depleted before using any of the components of unrestricted fund balance.
Further, when the components of unrestricted fund balance can be used for the same purpose, committed fund balance is depleted first, followed by assigned fund balance. Unassigned fund balance is applied last.
EXHIBIT A
256
FINANCIAL SECTION
Notes to Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensiv e Financial Report FY 2020-21
Page | 91
NOTE 9 – NET POSITION AND FUND BALANCES (Continued)
B. Fund Balances (Continued)
Detailed classification of the City’s fund balances as of June 30, 2021 are below
Low Income Other
General Housing-Special G overnmental
Fund Balance Classifications Fund Revenue Fund Funds Total Nonspendable:
Items not in spendable form:
Prepaids and deposits 8,000$ 14,958$ 506,524$ 529,482$ Advances 3,874,396 - - 3,874,396 Land held for redevelopment 1,727,437 - - 1,727,437 Total Nonspendable Fund Balances 5,609,833 14,958 506,524 6,131,315 Restricted for:
Alameda County Transportation programs - - 6,587,813 6,587,813 Gas tax program - - 9,506,935 9,506,935 Grant Programs - - 3,845,813 3,845,813 Host Community Impact program - - 1,345,373 1,345,373 Housing and human services programs - 19,347,960 4,752,716 24,100,676 Maintenance Program - - 12,314,954 12,314,954 Capital improvements programs - - 45,452,827 45,452,827 Park program - - 8,500,942 8,500,942 PEG program - - 1,065,783 1,065,783 Art programs - - 2,363,818 2,363,818 Solid waste and recycling program - - 471,070 471,070 Street sweeping program - - 101,833 101,833 Total Restricted Fund Balances - 19,347,960 96,309,877 115,657,837 Committed for:
Financial stabilization arrangement 17,419,222 - - 17,419,222 Open space acquisition and management - - 2,597,943 2,597,943 Total Committed Fund Balance 17,419,222 - 2,597,943 20,017,165 Assigned for:
Economic uncertainty reserve 15,677,300 - - 15,677,300 Infrastructure replacement reserve 12,000,000 - - 12,000,000 ERP System replacement 2,000,000 - - 2,000,000 Total Assigned Fund Balances 29,677,300 - - 29,677,300 Unassigned:
General Fund 24,471,138 - - 24,471,138 Total Unassigned Fund Balances 24,471,138 - - 24,471,138 Total Fund Balances 77,177,493$ 19,362,918$ 99,414,344$ 195,954,755$
EXHIBIT A
257
FINANCIAL SECTION
Notes to Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensiv e Financial Report FY 2020-21
Page | 92
NOTE 9 – NET POSITION AND FUND BALANCES (Continued)
C. Minimum Operating Reserve Policy
On June 13, 2016 the City adopted a resolution to update the City’s Fund Balance Policy. Special Revenue, Debt Service and Capital Projects Funds have no minimum funding levels due to the nature of the funds. The minimum funding levels of the policy are highlighted below.
General Fund
The Committed General Fund Financial Stabilization Operating Reserve minimum funding level is 15% of operating expenditures plus debt service transfers to be used in a catastrophic event or in a major emergency or in periods of severe fiscal crisis. The Assigned General Fund Economic Uncertainty Reserve minimum funding level is 13.5% of operating expenditures plus debt service transfers to be used during times of severe economic distress such as protracted recessionary periods. State raids on local resources, or other impactful unforeseen events which greatly diminish the financial ability of the City to deliver core services. The Unassigned General Fund balance minimum funding level is 1.5% of operating expenditures plus outgoing debt service transfers.
Enterprise Funds
The Airport and Water Funds’ unrestricted net position minimum balance is 12.5% (or 45 days’ worth of working capital) and 33% (or 120 days’ worth of working capital) of operating expenditures plus debt service requirements respectively. The Sewer Fund is recommended to maintain an unrestricted Net Position minimum balance of 50% of their operating budget plus debt service requirements.
Internal Service Funds
Liability Insurance and Workers Compensation Funds are recommended to fully fund actuarially determined claim obligations at a minimum at the seventy percent (70%) confidence level. The City will strive to fully fund actuarially determined claim obligations at the 90% confidence level.
The Fleet Services, Information Technology and Facilities Rehabilitation Funds are recommended to keep 12.5% of operating expenses as minimum unrestricted net position balance.
D. Restatement of Net Position/ Fund Balances
During the current fiscal the City made prior period adjustments of $3,232,769 in its government wide financial statements for governmental type-activities and fund-level statements for the Maintenance Districts Special Revenue Fund. The City also removed the OPEB Trust Fund from the financial statements which is consistent with the treatment of the City’s pension plans held by agent multiple employer plans. The City also reclassified its Passthroughs and LPFD Agency Funds to Custodial Funds. These changes were required by GASB Statement No. 84, Fiduciary Activities.
EXHIBIT A
258
FINANCIAL SECTION
Notes to Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensiv e Financial Report FY 2020-21
Page | 93
NOTE 9 – NET POSITION AND FUND BALANCES (Continued)
Beginning Fund
Balance/Net
Position,
as previously
reported
Prior Period
Adjustment-
Change in
Accounting
Principle
Beginning Fund
Balance/Net
Position, as
restated
Government-wide Net Position
Governmental Activities - Reclassification of the
Maintenance Fund 369,387,202$ 3,232,769$ 372,619,971$ Fund Balance- Governmental Funds
Other Governmental Funds - Reclassification of the
Maintenance Fund 89,698,508 3,232,769 92,931,277 Fiduciary Net Position:
OPEB Trust Fund - Reclassification to an
Agent Mulitple Employer Plan 32,250,629 (32,250,629) - Custodial Fund - Reclassification from Agency Fund - 5, 681,919 5,681,919
NOTE 10 – PENSION PLANS
A. Social Security/ Public Agency Retirement Systems (PARS)
The Omnibus Budget Reconciliation Act of 1990 (OBRA) mandates that public sector employees who are not members of their employer’s existing retirement system as of January 1, 1992 be covered by either Social Security or an alternative plan. The City’s part -time, seasonal, and temporary employees are not covered under Social Security. The City has an agreement with the Public Agency Retirement System (PARS) to provide an alternative retirement system for employees not eligible for the California Public Employees’ Retirement System (CalPERS) Pension Plan and adopted the PARS 457 Trust including the PARS Section 457 FICA Alternative Retirement Plan.
B. California Public Employees’ Retirement System (CalPERS) Pension Plans
All public employees meeting Cal PERS membership requirements must participate in pension plans offered by California Public Employees Retirement System (CalPERS).
For the fiscal year ended June 30, 2021, the City reported its net pension liabilities, deferred outflows of resources, deferred inflows of resources, and pension expense for each of the above plans as follows:
Net Pension
Liability
Deferred
Outflows of
Resources
Deferred Inflows
of Resources
Pension
Expense
Miscellaneous Plan 94,436,719$ 5,549,151$ -$ 14,131,156$ Safety Plan 46,528,122 6,260,064 1,803,939 9,827,063 Total 140,964,841$ 11,809,215$ 1,803,939$ 23,958,219$
1. General Information about the Pension Plans
Plan Descriptions – All qualified permanent and probationary employees are eligible to participate in the City’s separate Safety (P olice) cost-sharing and Miscellaneous (all other) agent multiple- employer defined benefit plans (Plans), administered by the CalPERS. The Miscellaneous Plans are an agent multiple employer defined benefit pension plans administered by CalPERS, which acts as a common investment and administrative agent for its participating member employers. Benefit provisions under the Plans are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.
EXHIBIT A
259
FINANCIAL SECTION
Notes to Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensiv e Financial Report FY 2020-21
Page | 94
NOTE 10 – PENSION PLANS (Continued)
B. California Public Employees’ Retirement System (CalPERS) Pension Plans (Continued)
1. General Information about the Pension Plans (Continued)
The City’s Safety Plans became part of a cost -sharing multiple employer defined benefit pension plan administered by CalPERS, commonly referred to as a risk pool, as of the actuarial valuation date of June 30, 2003. Risk pools exist for employers with less than 100 active plan members.
The City has three retirement benefit tiers in the Plans. Membership in the first tier of the retirement system is closed to new employees hired on or after December 31, 2012. The second tier was adopted by the City in November 2012 for all employees hired December 31, 2012. The third tier was adopted by the City effective January 1, 2013 pursuant to State Assembly Bill 340.
2. Benefits Provided and Actuarial Assumptions
CalPERS provides service and disability retirement benefits, cost of living adjustments, and death benefit s to plan members and beneficiaries. Benefits are based on years of credited service, equal to one year of full-time employment. Members with five years of total credited service are eligible to retire at age 50 with statutorily reduced benefits. Members may apply for a non- duty disability retirement benefit after 5 years of service. The death benefit is one of the following: T he Basic Death Benefit, the 1959 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.
EXHIBIT A
260
FINANCIAL SECTION
Notes to Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensiv e Financial Report FY 2020-21
Page | 95
NOTE 10 – PENSION PLANS (Continued)
B. California Public Employees’ Retirement System (CalPERS) Pension Plans (Continued)
2. Benefits Provided and Actuarial Assumptions (Continued)
The Plans’ provisions and benefits in effect at June 30, 2021, are summarized as follows:
Miscellaneous Safety
B
enefit vesting schedule 5 years service 5 years service Benefit payments monthly for life monthly for life
Minimum retirement age 50/52 50
Employees hired prior to December 30, 2012 Tier 1 Tier 1 Monthly benefits, as a % of annual salary 2.7% at 55 3% at 50 Required member contribution rates 8% 9%
% paid by employee 8% 9% 1
% paid by employer 0% 0% 1
Required employer contribution rates (Normal cost) 11.854% 23.674% Employer payment of unfunded liability 7,272,015$ 4 2,916,644$
Employees hired December 31, 2012 Tier 2 T ier 2
Monthly benefits, as a % of annual salary 2% at 60 2 3% at 55 3 Required member (employee) contribution rates 7% 9%
Required employer contribution rates (Normal cost) 11.854% 20.585% Employer payment of unfunded liability -$ 8,081$ Employees hired after December 31, 2012 Tier 3 Tier 3
Monthly benefits, as a % of annual salary 2% at 62 2 2.7% at 57 3 Required member (employee) contribution rates: 6.25% 12.0% Required employer contribution rates (Normal cost) 11.854% 13.044% Employer payment of unfunded liability -$ 3,696$ 2 New ly hired Misc Employees w ill be enrolled in the 2% at 60 or 2% at 62 formula, dependent on the individual's eligibility, as per AB340. 3 New ly hired S afety Employees w ill be enrolled in the 3% at 55 or 2.7% at 57 formula, dependent on the individual's eligibility, as per AB340. 1 Rates presented in the table above were effective 7/1/2016. 4 Balance mentioned above is a combined amount for all Miscellaneous plans. As a percentage of projected payroll the UAL contribution for Fiscal Year 2020-21 is 23.858% for an estimated total employer contribution rate of 35.712%.
EXHIBIT A
261
FINANCIAL SECTION
Notes to Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensiv e Financial Report FY 2020-21
Page | 96
NOTE 10 – PENSION PLANS (Continued)
B. California Public Employees’ Retirement System (CalPERS) Pension Plans (Continued)
2. Benefits Provided and Actuarial Assumptions (Continued) Employees Covered – A t June 30, 20 21, the following employees were covered by the benefit terms of the Miscellaneous Plans, however, information for the Safety Police Plans was not provided from CalPERS for cost-sharing multiple employer defined benefit pension plans.
Miscellaneous1
Inactive employees or beneficiaries currently receiving benefits 460 I
nactive employees entitled to but not yet receiving benefits 293 Active employees 320
Total 1,073
1 All Tiers of the Miscellaneous plans w ere reported together in the Census data report by CalPERS.
Contributions – Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. Funding contributions for both Plans are determined annually on an actuarial basis as of June 30 by CalPERS. The City must contribute these amounts.
The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees.
For the year ended June 30, 2021, the contributions recognized as part of pension expense for the Plans were as follows:
Miscellaneous1 Safety Police1 Total
Contributions - employer 10,729,567$ 5, 457,222$ 16,186,789 1 All Tiers of the Miscellaneous and Safety Police plans w ere combined together on GASB 68 report by CalPERS.
EXHIBIT A
262
FINANCIAL SECTION
Notes to Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensiv e Financial Report FY 2020-21
Page | 97
NOTE 10 – PENSION PLANS (Continued)
B. California Public Employees’ Retirement System (CalPERS) Pension Plans (Continued)
2. Benefits Provided and Actuarial Assumptions (Continued)
Actuarial Assumptions – The total pension liabilities in the June 30, 2021 actuarial valuations were determined using the following actuarial assumptions:
All Plans (5)
Valuation Date June 30, 2019
Measurement Date June 30, 2020
Actuarial Cost Method Entry-Age Normal Cost
Actuarial Assumptions:
Discount Rate 7.15%
Inflation 2.500%
Payroll Growth 2.875%
Projected Salary Increase 2.75% - 4.5% (1)
Investment Rate of Return 7.25% (2)
Mortality (4) 36.1 to 17.0 (3)
(1) Depending on age, service and type of employment
(2) Net of pension plan investment expenses, including inflation (3)
(4)
(5) All of the City's plans for miscellaneous and safety police employed the same assumptions.
Represents life expectancy over the age ranging from 50 to 70 years. Assumptions include 20 years of mortality improvement.
2017 CalPERS Experience Study for the period from 1997-2015, Recipients with attained age of 50
The underlying mortality assumptions and all other actuarial assumptions used in the June 30, 2020 valuation were based on the results of the 2017 CalPERS Experience Study for the period 1997 to 2015. Further details of the Experience Study can be found on the CalPERS website.
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.
The long-term expected rate of return on pension plan investments was de termined 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 considered both short -term and long- term market return expectations as well as the expected pension fund cash flows. Using historical returns of all of the funds’ asset classes, expected compound (geometric) returns were calculated over the short -term (first 10 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
EXHIBIT A
263
FINANCIAL SECTION
Notes to Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensiv e Financial Report FY 2020-21
Page | 98
NOTE 10 – PENSION PLANS (Continued)
B. California Public Employees’ Retirement System (CalPERS) Pension Plans (Continued)
2. Benefits Provided and Actuarial Assumptions (Continued)
rate of return was then set equal to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses. The table below reflects long- term expected real rate of return by asset class.
Current
Target Real Return Real Return
Asset Class (1) Allocation Years 1-10 (2) Years 11+ (3) Global Equity 50.0% 4.80% 5.98%
Fixed Income 28.0% 1.00% 2.62%
Inflation Assets 0.0% 0.77% 1.81%
Private Equity 8.0% 6.30% 7.23%
Real Assets 13.0% 3.75% 4.93%
Liquidity 1.0% 0.00% -0.92%
Total 100.0%
(2) An expected inflation of 2.0% used for this period. (3) An expected inflation of 2.92% used for this period.
Note - All of the City's plans for miscellaneous and safety police employed the same strategies. (1) In the System's ACFR, Fixed Income is included in Global Debt Securities; Liquidity is included in Short-term Investments; Inflation Assets are included in both Global EquitySecurities and Global Debt Securities.
3. Miscellaneous Agent Multiple-Employer Defined Benefit Pension Plan (Miscellaneous)
The changes in the Net Pension Liability for the Miscellaneous Plan during the measurement year were as follows:
Miscellaneous Plan 1:
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability/(Asset)
Balance at June 30, 2019 2 305,130,906$ 218,675,375$ 86,455,531$ Changes in the year:
Service cost 5,542,184 - 5,542,184 Interest on the total pension liability 21,754,166 - 21,754,166 Changes of assumptions - - - Difference between expected and actual experience 3,404,399 - 3,404,399 Net plan to plan resource movement - - - Contribution - employer - 9,778,161 (9,778,161) Contribution - employees - 2,349,388 (2,349,388) Net investment income - 10,900,291 (10,900,291) Benefit payments, including refunds of - - - employee contributions (14,104,669) (14,104,669) - Administrative expenses - (308,279) 308,279 Net changes 16,596,080 8,614,892 7,981,188 Balance at June 30, 2020 2 321,726,986$ 227,290,267$ 94,436,719$ 1 All Tiers of the Miscellaneous plan w ere combined together on GASB 68 report by CalPERS. 2 Represent measurement dates used in the GASB 68 valuation report.
Increase (Decrease)
EXHIBIT A
264
FINANCIAL SECTION
Notes to Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensiv e Financial Report FY 2020-21
Page | 99
NOTE 10 – PENSION PLANS (Continued)
B. California Public Employees’ Retirement System (CalPERS) Pension Plans (Continued)
3. Benefits Provided and Actuarial Assumptions (Continued)
Pension Plan Fiduciary Net Position – Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports.
4. Safety Police Cost-Sharing Multiple-Employer Defined Benefit Plan (Police Safety)
As of June 30, 2021, the City reported net pension liabilities for its proportionate share of the net pension liability of the Police Safety Plan as follows:
Proportionate Share of
Net Pension Liability 1
Safety Police Plan 46,528,122$
1 All Tiers of the Safety Police plan w ere combined together on GASB 68 report by CalPERS.
The City’s net pension liability for the Plans is measured as the proportionate share of the net pension liability.
The net pension liability of the Plans are measured as of June 30, 2020 , and the total pension liability for the Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2019 rolled forward to June 30, 2020 using standard update procedures. The City’s proportion of the net pension liability was based on a projection of the City’s long- term share of contributions to the pension plan relative to the projected contributions of all participating employers, actuarially determined. The City’s proportionate share of the net pension liability for the Plan as of the measurements dates of June 30, 2019 and 2020 was as follows:
Safety Police
Proportion - June 30, 2019 0. 67581%
Proportion - June 30, 2020 0.69837%
Change - Increase (Decrease) 0.02256%
1 All Tiers of the Safety Police plan w ere combined together on GASB 68 report by CalPERS.
Pension Plan Fiduciary Net Position – Detailed information about the pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports.
EXHIBIT A
265
FINANCIAL SECTION
Notes to Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensiv e Financial Report FY 2020-21
Page | 100
NOTE 10 – PENSION PLANS (Continued)
B. California Public Employees’ Retirement System (CalPERS) Pension Plans (Continued)
5. Sensitivity of the Net Pension Liability to Changes in the Discount Rate
The following presents the net pension liability of the City’s Miscellaneous Plan and the City’s proportionate share of the net pension liability for the Safety Police Plan, calculated using the discount r ate for the Plan, as well as what the City’s net pension liability would be if it were calculated using a discount rate that is 1 - percentage point lower or 1-percentage point higher than the current rate:
1% Decrease Current 1% Increase
Net Pension Liability (6.15%) (7.15%) (8.15%)
Miscellaneous Plan1 $135,786,647 $94,436,719 $60,051,796 Police Safety Plan1 69,899,542 46,528,122 27,349,660 Discount Rate
1 All Tiers of the Miscellaneous plan and Safety Police plan w ere combined together into on GASB 68 report by CalPERS.
6. Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions For the fiscal year ended June 30, 2021 , the City recognized pension expense of $ 14,131,156 for the Miscellaneous Plan and $9,827,063 for the Police Safety Plan for a total pension expense of $23,958,219. At June 30, 2021, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
Deferred Outflows Deferred Inflows Deferred Outflows Deferred Inflows Deferred Outflows Deferred Inflows of Resources of Resources of Resources of Resources of Resources of Resources Differences between actual and expected
experience 3,762,430$ -$ 3,608,020$ -$ 7,370,450$ -$ Changes in assumptions - - - (154,986) - (154,986) Net differences between projected and
actual earnings on plan investments 1,786,721 - 1,011,252 - 2,797,973 - Change in proportion and differences
between actual contributions and
proportionate share of contributions - - 1,640,792 (1,648,953) 1,640,792 (1,648,953) Total 5,549,151 - 6,260,064 (1,803,939) 11,809,215 (1,803,939) Miscellaneous Plan Safety Police Plan Total
EXHIBIT A
266
FINANCIAL SECTION
Notes to Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensiv e Financial Report FY 2020-21
Page | 101
NOTE 10 – PENSION PLANS (Continued)
B. California Public Employees’ Retirement System (CalPERS) Pension Plans (Continued)
7. Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
Pension contributions subsequent to
measurement date
Deferred Outflows
of Resources
Deferred Inflows
of Resources Total
Miscellaneous Plan1 10,729,567$ -$ 10,729,567$ Safety Police Plan1 5,457,222 - 5,457,222 Total 16,186,789$ -$ 16,186,789$ 1 All Tiers of the Miscellaneous and Police Safety plan w ere combined together on GASB 68 report by CalPERS.
In the table above amounts reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2022. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:
Miscellaneous Plan Safety Police Plan Total
Fiscal Year Deferred Deferred Deferred
Ended Outflows/(inflows) Outflows/(inflows) Outflows/(inflows) June 30 of Resources of Resources of Resources
2022 2,031,869$ 1,128,762$ 3,160,631$ 2023 1,464,109 1,668,023 3,132,132
2024 1,128,077 1,152,647 2,280,724
2025 925,096 506,693 1,431,789 5,549,151 4,456,125 10,005,276
EXHIBIT A
267
FINANCIAL SECTION
Notes to Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensiv e Financial Report FY 2020-21
Page | 102
NOTE 11 – OTHER POST EMPLOYMENT BENEFITS
The City has two types of retirement health benefits as determined by Council resolution and through agreements with its labor units. One plan is a Defined Benefit Plan (Other Post Employment Benefit “OPEB”) which provides health care benefits for retired employees under third party insurance plans. The second plan is a Defined Contribution Plan in which the City contributes a fixed amount to a retirement health savings account on behalf of employees who are not eligible for OPEB. The City’s Defined Benefit OPEB plan is closed to new entrants; all new employees are enrolled into the City’s Defined Contribution plan.
Executive
Management
Mid-Mgmt & Confidential
LPOA
Police
Management
Hired Before • 8/1/2014 • 2/1/2006 • 2/1/2007 • 9/1/2004 Eligibility •
•
Benefit •
• City will reimburse Medicare A & B if required for Medical coverage • Reimbursement percentage based on bargaining group and CalPERS service:
PERS
Service
Reimb
%
PERS
Service
Reimb
%
PERS
Service
Reimb
%
10 75% 10 70% 15 75%
15 80% 15 80% 20 85%
20 90% 20 90% 25+ 100%
25+ 100% 25+ 100%
• DOR < 10/9/01: $200 • DOR < 9/25/00: $200 • DOR < 2/1/02: $200 • DOR < 4/7/03: $200 Cap • DOR < 10/9/01 and • DOR between 9/25/00 • DOH < 2/1/07: • Tier 1 (PL/Cpt):
DOH < 1/10/05: and 7/1/15: $2,121.24 1 $2,121.24 $1,866.20 2 (DOR < 9/1/04) $2,121.24 $2,121.24 1
• DOH ≥ 1/10/05: • DOR ≥ 7/1/15 and • DOR > 1/1/06: • DOH > 2/1/07: • Tier 2 (Actively With a current benefit DOH < 2/1/06: With a current benefit No benefits, City employed as of maximum of With a current benefit maximum of $2,058.20 1 contributes 5% 8/30/04): $2,371.81 2 maximum of $1,950 1 of base pay to
RHSA, EE • Tier 3 (promoted
• DOH ≥ 2/1/06: • DOR > 11/9/14: contributes 1% after 9/1/04): $1,866.20 2 No benefits, City No benefit, City With a current benefit of base pay to contributes 4% contributes 4% of maximum of $2,050 RHSA • Promoted EE's stay of base pay to base pay to RHSA with RHSA if RHSA RHSA • DOR > 1/1/17: $1,950 was prior benefit
• DOH ≥ 4/1/07: • DOH ≥ 9/1/04:
No benefits, City No benefits; City
contributes 4% contributes 5%
of base pay to of base pay to
RHSA RHSA
1: Will be matched to Kaiser A tw o party rate for an active employee 2: Will be matched to Pre 65 Retireee Kaiser A tw o party rate • DOH ≥ 8/1/14:
ALE
Retire directly from the City with 10 years CalPERS service (15 years for Police safety) and a minimum of 5 years City service, or
Industrial disability, for police safety (except for employees enrolled in retirement health savings account) • DOR < 10/3/03: $200
• DOR > 10/3/03:
City reimburses up to a percentage subject to a cap that varies by bargaining group • 4/1/2007
EXHIBIT A
268
FINANCIAL SECTION
Notes to Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensiv e Financial Report FY 2020-21
Page | 103
NOTE 11 – OTHER POST EMPLOYMENT BENEFITS (Continued)
A. Funding Policy and Actuarial Assumptions
The actuarially determined contribution (ADC) to the OPEB plan was determined as part of a June 30, 2018 actuarial valuation using the entry age normal actuarial cost method. This is a projected benefit cost method, which takes into account those benefits that are expected to be earned in the future as well as those already accrued. The actuarial assumptions included (a) 6.5% investment rate of return, (b) 3. 0% projected annual salary increase, and (c) 2.75% general inflation rate and (d) health inflation decreases ranging from 4.0%-7.5%. The actuarial methods and assumptions used include techniques that smooth the effects of short -term volatility in actuarial accrued liabilities and the actuarial value of assets. Actuarial calculations reflect a long -term perspective and actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future. Actuarially determined amounts are subject to revision at least biannually as results are compared to past expectations and new estimates are made about the future.
In accordance with the City’s budget, the actuarially determined contribution (ADC) is to be funded throughout the year as a percentage of payroll. During fiscal year ended June 30, 2010, the City joined the Public Agencies Post- Retirement Health Care Plan, a multiple employer trust administered by Public Agency Retirement Services (PARS). During current fiscal year, the City contributed $5,163,000 to an irrevocable trust administrated by PARS, managed by an appointed board not under the control of City Council. This trust is not considered a component unit by the City and has been excluded from these financial statements. Separately issued financial statements for PARS may be obtained from PARS at 4350 Von Karman Ave., Suite 200, Newport Beach, CA 92660.
B. OPEB Trust Fund
i. Plan Administration
The City is the plan administrator. The Public Agency Retirement Services (PARS) administers the trust for the City’s retiree healthcare benefit plan – a n agent multiple-employer defined benefit OPEB plan that provides healthcare benefits for eligible general and public safety employees of the City .
Fiscal Year ended
6/30/21
Plan Type Agent Multiple Employer
OPEB Trust No
S
pecial Funding Situation No
Nonemployer Contributing Entity No
ii. Plan Membership
As of June 30, 2021, membership in the plan consisted of the following:
Number of
Covered Employees
Retirees and beneficiaries receivng benefits 320
T
erminated plan members entitled to 17
but not yet receiving benefits
Active plan members 174
511
EXHIBIT A
269
FINANCIAL SECTION
Notes to Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensiv e Financial Report FY 2020-21
Page | 104
NOTE 11 – OTHER POST EMPLOYMENT BENEFITS (Continued)
B. OPEB Trust Fund (Continued)
iii. Benefits Provided
Post-employment healthcare and similar benefit allowances are provided to eligible employees who retire from the City or to their surviving spouses. As noted in the table above in Note 11B(ii), there were 320 participants receiving these healthcare benefi ts as of June 30, 2021 . Refer to the table on the previous page for the contractual maximum contribution rates for the eligible employees depending upon their association with specific bargaining groups.
iv. Contribution Information
PARS establish rates for each employer based on an actuarially determined rate for each employer. For the year ended June 30, 2021, the City’s average contribution rate was 19.5 percent of covered-employee payroll. Plan members are not required to contribute to the plan.
For the year ended June 30, 2021, the City contributed $5,163,000 in relation to the actuarially determined contribution.
v. Investment Policy
PARS offer different investment portfolios as part of the investment vehicle. The City invests in “Capital Appreciation” portfolio; the primary goal of the Capital Appreciation objective is growth of principal. The major portions of the assets are invested in the equity securities and market fluctuations are expected. The portfolio is constructed to control risk through four layers of diversification – asset classes (cash, fixed income, equity), investment styles (large cap, small cap, international, value, growth), managers and securities. Disciplined mutual fund selections and monitoring helps to drive return potential while reducing portfolio risk.
The following is the City adopted asset allocation policy as of June 30, 2021.
Target Expected Real
Asset Class Component: Allocation Rate of Return
Global Equity 73.00% 4.82%
Fixed Income 20.00% 1.47%
REITs 2.00% 3.76%
Cash 5.00% 0.06%
Assumed Long Term Rate of Inflation 2.75%
Discount Rate 6.25%
EXHIBIT A
270
FINANCIAL SECTION
Notes to Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensiv e Financial Report FY 2020-21
Page | 105
NOTE 11 – OTHER POST EMPLOYMENT BENEFITS (Continued)
B. OPEB Trust Fund (Continued)
vi. Changes in Net OPEB Liability
The changes in the Net OPEB Liability are as follows
Total OPEB Plan Fiduciary Net OPEB
Liability Net Position Liability/(Asset)
Balance at June 30, 2020 1 79,199,184$ 32,250,629$ 46,948,555$ Changes in the year:
Service cost 1,223,662 - 1,223,662 Interest on the total pension liability 5,115,274 - 5,115,274 Differences between actual and -
expected experience -
Changes in assumptions -
Changes in benefit terms -
Changes of assumptions (1,463,176) - (1,463,176) Difference between expected and actual experience (1,868,874) - (1,868,874) Contribution - employer - 5,163,000 (5,163,000) Contribution - employee (paid by employer) -
Contribution - employees - - - Net investment income - 10,050,944 (10,050,944) Administrative expenses -
Benefit payments, including refunds of
employee contributions (3,452,661) (3,452,661) - Administrative expenses - (141,453) 141,453 Net changes (445,775) 11,619,830 (12,065,605) Balance at June 30, 2021 1 78,753,409$ 43,870,459$ 34,882,950$ 1 Represent measurement dates used in the GASB 75 valuation report.
Increase (Decrease)
Detailed information about the OPEB plan’s fiduciary net position is available in the separately issued plan financial report that may be obtained from PARS.
EXHIBIT A
271
FINANCIAL SECTION
Notes to Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensiv e Financial Report FY 2020-21
Page | 106
NOTE 11 – OTHER POST EMPLOYMENT BENEFITS (Continued)
B. OPEB Trust Fund (Continued)
vii. Actuarial Methods and Assumptions
The City’s net OPEB liability was measured as of June 30, 2021 and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation dated June 30, 20 20, based on the following actuarial methods and assumptions:
Measurement Date June 30, 2021
Valuation Date June 30, 2020
Funding Policy City Contributes full ADC
PARS portfolio: Capital Appreciation
Medical Trend Non-Medicare - 7.00% for 2022, decreasing to
4.0% in 2076
Medicare (Non-Kaiser) - 6.1% for 2022, decreasing to
an ultimate rate of 4.0% in 2076
Medicare (Kaiser) - 5.0% for 2022, decreasing to
an ultimate rate of 4.0% in 2076
Healthcare participation for future Retirees Not in RHSA: 90%; In RHSA: not applicable Cap Increases Kaiser plan A 2-party premium: Medical trend Active medical cap - Minimum of: Healthnet PPO
family premium (increase with medical trend); 1% (3/4%
for Police Lieut.) of budgeted monthly salary (increased Actuarial Assumptions:
Discount Rate 6.25%
Salary Increase Aggregate:-3% annually
Merit- CalPERS 1997-2015 Experience Study
Inflation 2.75%
Investment Rate of Return 6.50%
Mortality , Retirement, Disability, Termination CalPERS 1997-2015 Experience Study Mortality Improvement Mortality projected fully generational with Scale MP-2020
viii. Discount rate
The discount rates used to measure the total OPEB liability were 6.25% as of June 30, 2021. The projection of cash flows used to determine the discount rate assumed that City contributions will be made at rates equal to the actuarially determined contribution rates . Based on those assumptions, the OPEB 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 OPEB plan investments was applied to all periods of projected benefit payments to determine the total OPEB liability.
EXHIBIT A
272
FINANCIAL SECTION
Notes to Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensiv e Financial Report FY 2020-21
Page | 107
NOTE 11 – OTHER POST EMPLOYMENT BENEFITS (Continued)
B. OPEB Trust Fund (Continued)
ix. Sensitivity of the Net OPEB Liability to Changes in the Discount Rate
In accordance with GASB 75, regarding the disclosure of the sensitivity of the net OPEB liability to changes in the discount rate, the following table presents the net OPEB liability of the Plan as of June 30, 2021 , calculated using the discount rate of 6.25%, as well as what the Plan’s net OPEB liability would be if it were calculated using a discount rate that is 1- percentage-point lower or 1- percentage point higher than the current rate:
1% Decrease Current 1% Increase
(5.25%) (6.25%) (7.25%)
Net OPEB Liability 44,687,919$ 34,882,950$ 26,712,746$ Discount Rate
x. Sensitivity of the Net OPEB Liability to Changes in the Healthcare Cost Trend Rates
The following presents the net OPEB liability of the City, as well as what the City’s net OPEB liability would be if it were calculated using healthcare cost trend rates that are 1-percentage-point lower or 1-percentage- point higher than the current healthcare cost trend rates:
1% Decrease Current 1% Increase
Net OPEB Liability 30,439,325$ 34, 882,950$ 38,826,362$ Healthcare Trend Rate
xi. OPEB Expenses and Deferred Outflows/Inflows of Resources Related to OPEB
For the year ended June 30, 20 21, the City recognized OPEB Expense of $1,421,075. As of fiscal year, ended June 30, 2021 , the City reported deferred outflows and inflows of resources related to OPEB from the following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Differences between actual and expected experience -$ (2,081,906)$ Changes in assumptions 718,507 (940,613)
Net differences between projected and actual earnings
on plan investments* - (5,762,800) Change in proportion and differences between actual
contributions and proportionate share of contributions - - Total 718,507$ (8,785,319)$
* Deferred Inflows and Outflows combined for footnote disclosure.
EXHIBIT A
273
FINANCIAL SECTION
Notes to Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensiv e Financial Report FY 2020-21
Page | 108
NOTE 11 – OTHER POST EMPLOYMENT BENEFITS (Continued)
B. OPEB Trust Fund (Continued)
The difference between projected OPEB plan investment earnings and actual earnings is amortized over a five-year period. The remaining gains and losses are amortized over th e expected average remaining service life.
Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized as future OPEB expense as follows:
Deferred
Year Ended O utflows/(inflows)
June 30 of Resources
2022 (2,818,497)$
2023 (2,317,886)
2024 (1,346,805)
2025 (1,583,624)
(8,066,812)$
xii. Payable to OPEB Plan
The City did not report any payables for the outstanding amount of contributions to the OPEB plan required for the year ended June 30, 2021.
NOTE 12 – DEFERRED COMPENSATION PLAN
City employees may defer a portion of their compensation under a City sponsored Deferred Compensation Plan created in accordance with Internal Revenue Code Section 457. Under this plan, participants are not taxed on the deferred portion of their compensation until distributed to them; distributions may be made only at termination, retirement, death or in an emergency as defined by the plan.
The laws governing deferred compensation plan assets require plan assets to be held by a Trust for the exclusive benefit of plan participants and their beneficiaries. Since the assets held under these plans are not the City’s property and are not subject to City control, they have been excluded from these financial statements.
NOTE 13 – JOINT VENTURES
The City participates in the joint venture activities described below through formally organized and separate entities established under the Joint Exercise of Powers Act of the State of California. As separate legal entities, these organizations exercise full powers and authorities within the scope of the related Joint Powers Agreements including the preparation of annual budgets, accountability for all funds, the power to make and execute contracts and the right to sue and be sued. Each joint venture is governed by a board consisting of representatives from member municipalities. Each board controls the operations of the respective joint venture, including selection of management and approval of operating budgets, independent of any influence by member municipalities beyond their representation on the Board. Assets and liabilities of the separate entities are not those of the City. The City’s sole financial responsibility is to fund annual contributions to each entity which are used along with other member contributions to finance each joint venture’s annual operations.
EXHIBIT A
274
FINANCIAL SECTION
Notes to Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensiv e Financial Report FY 2020-21
Page | 109
NOTE 13 – JOINT VENTURES (Continued)
A. Livermore-Amador Valley Water Management Agency (LAVWMA)
Livermore-Amador Valley Water Management Agency (LAVWMA) was formed in 1974. LAVWMA operates the export pipeline connecting with the East Bay Discharges Authority’s systems and discharges treated wastewater into San Francisco Bay. The current members of the Agency are Dublin San Ramon Services District, City of Livermore, and City of Pleasanton. Sewer revenue bonds issued by LAVWMA are being repaid with user charges assessed to member agencies.
The City accounts for its investment in LAVWMA by the equity method in the Sewer Enterprise Fund. The City records its share of earnings (losses) in the Proprietary Funds Statement of Revenues, Expenses and Changes in Net Position as "Change in value in investment in JPA - LAVWMA," and the carrying value of the City's investment in LAVWMA is recorded in the Proprietary Funds Statement of Net Position as "Investment in JPA - LAVWMA."
On August 1, 2011, LAVWMA issued $105,345,000 principal amount of 2011 Sewer Revenue Refunding B onds.
Proceeds of the issuance were used to refund and retire the Series A Sewer Revenue Bonds and to pay costs of issuance. Under an Amended and Restated Sewer Service Contract dated October 1, 2011 between LAVWMA and the Members, the Members pledged and created, in favor of LAVWMA and the Trustee for the 2011 Bonds, a lien on the Net Revenues of their respective wastewater systems to pay to LAVWMA the amounts owed in order for LAVWMA to pay the debt service on the 2011 bonds. The City’s share is 27.83% of the total debt service. The City’s equity interest in LAVWMA was $19,187,078 as of June 30, 20 21. Financial statements for LAVWMA may be obtained from DSRSD at 7051 Dublin Boulevard, Dublin, California 94568.
B. Livermore-Amador Valley Transit Authority (LAVTA)
This Authority was formed in May 1985 by a joint exercise of powers agreement between the County of Alameda and the Cities of Livermore, Pleasanton, and Dublin for the purpose of providing general public transportation under the business name "Wheels". Financial statements may be obtained from LAVTA, 1362 Rutan Court, Suite 100, Livermore, CA 94551.
C. Tri-Valley Transportation Council (TVTC)
The Tri-Valley Transportation Council was formed in 1991 by a joint exercise of powers agreement between the cities of Dublin, Livermore, Pleasanton, and San Ramon, the Town of Danville and the Counties of Alameda and Contra Costa for the purposes of preparing a transportation plan and providing transportation facilities within the Tri-Valley area. Financial statements may be obtained from Franklin Management Systems, Inc., Attn: Mr. Jack Harrington, 3037 Hopyard Road, Suite M, Pleasanton, CA 94588.
D. Livermore - Pleasanton Fire Department Joint Powers Agreement (LPFD)
On December 3, 1996, the cities of Livermore and Pleasanton signed a joint powers agreement to form a joint Fire Department covering both cities. The LPFD may own physical assets and can enter into contracts with the approval of the governing board, where applicable. Fire protection services are provided by the City of Pleasanton employees under the joint power agreement. The LPFD prepares its budget including contributions required from each City to fund operating and capital needs for the year. In January 2013, the City of Livermore began functioning as Treasurer for LPFD. The City of Livermore has 50% equity share (or deficit, when applicable) in LPFD and share all the costs at approximately 50%. The deficit net position of the LPFD is reported on the governmental activities statement of net position because the City has an ongoing financial responsibility. During the year ended June 30, 20 21, the City contributed $22,194,755 to LPFD representing its share of costs. The City’s deficit interest in LPFD was $44,265,779 as of June 30, 2021, based on LPFD audited financial statements for the fiscal year ended June 30, 2021. Financial statements for L PFD may be obtained from the City of Livermore at 1052 South Livermore Avenue, Livermore, California 94550.
EXHIBIT A
275
FINANCIAL SECTION
Notes to Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensiv e Financial Report FY 2020-21
Page | 110
NOTE 13 - JOINT VENTURES (Continued)
E. California Public Finance Authority (CalPFA)
California Public Finance Authority (CalPFA) is a political subdivision of the State of California established under the Joint Exercise of Powers Act for the purpose of issuing tax-exempt and taxable conduit bonds for public and private entities throughout California. CalPFA is empowered to promote economic, cultural, and community development opportunities that create temporary and permanent jobs, affordable housing, community infrastructure and improve the overall quality of life in local communities.
The City joined a Joint Exercise of Powers Agreement with CalPFA to issue bonds or other debt that constitute “qualified residential rental project bonds” under Section 142 (a)(7) and Section 142 (d) of the Internal Revenue Code in an amount not-to-exceed $55,000,000 for the purpose of financing or refinancing the acquisition and construction of Ageno Apartments. CalPFA is responsible for all the reporting and monitoring components and the City has no post issuance obligations. The City’s name does not appear on any legal documents. Since the JPA is a separate legal entity, the City has no liability exposure. Additionally, the City has no ongoing obligation to the JPA, unless the City wishes to issue bonds for another development project through the JPA.
Financial st atements may be obtained from the California Public Finance Authority website, http://www.calpfa.org/general-information/audits-transaction-reports or from California Public Finance Authority, 2999 Oak Road Suite 710, Walnut Creek, CA 94597.
F. East Bay Community Energy (EBCE)
This authority formed in October 2016 by a joint exercise of power agreement between the County of Alameda and the Cities of Livermore, Pleasanton and Dublin for the purpose of purchasing energy on a community-wide basis by pooling the buying power of the individuals within their jurisdictions. Involvement in the JPA gives opportunities to the City for gaining greater local involvement over the provision of electricity supply services, competitive electric rates, the development of local renewable energy projects, reduced greenhous e gas emissions, and the wider implementation of energy conservation and efficiency projects and programs.
G. Stopwaste
This authority formed in 1976 by a joint exercise of power agreement between the County of Alameda, all fourteen cities located within the County along with two sanitary districts for the purpose of reducing waste in Alameda county.
A representative from each Member Agency serves on the Alameda County Waste Management Authority Board.
The Alameda County Waste Management Authority provides solid waste planning, projects and initiatives to increase recycling and reduce waste by residents, businesses and schools. Funding is provided by waste-related fees. Some projects for reduction of waste include the Green Building in Alameda County program, curbside residential food scrap recycling and the reusable bag ordinance. These programs have reduced construction wast e, increased use of recycled building materials, produced food scrap composting and reduced the number of plastic bags in the County landfills. For more information visit www.stopwaste.org.
EXHIBIT A
276
FINANCIAL SECTION
Notes to Basic Financial Statements
CITY OF LIVERMORE
Annual Comprehensiv e Financial Report FY 2020-21
Page | 111
NOTE 14 - GENERAL LIABILITY AND WORKERS COMPENSATION COVERAGE
A. Risk Management
The City of Livermore is self-insured for general liability claims up to a self -insured retention (SIR) of $750,000 per occurrence. It is a member of California Joint Powers Risk Management Authority (CJPRMA), an excess insurance pool that provides coverage for each occurrence that exceeds the SIR. CJPRMA provides coverage up to $40,000,000 per occurrence. The first $5,000,000 layer is retained by CJPRMA and the second and third layers totaling $35,000,000 are covered by reinsurance, purchased through their broker of record, Aon. The City of Livermore contributed $513,314 to CJPRMA for liability coverage for the fiscal year ending June 30, 2021. The City of Livermore purchases a variety of insurance products from Aon, both through the CJPRMA pooled programs and directly. The City paid $249,497 directly to Aon, $396,479 to Alliant through CJPRMA for property insurance, and $56,876 for auto physical damage insurance to Aon through CJPRMA.
The Local Agency Workers Compensation Excess Joint Powers Authority (LAWCX) covers workers compensation up to statutory limits. The City has a deductible or uninsured liability of up to $500,000 per claim. During the fiscal year ended June 30, 2021, the City contributed $401,931 for program year coverage.
Each risk pool is governed by a Board consisting of representatives from member municipalities. The Board controls the operations of each risk pool, including selection of management and approval of operating budgets, independent of any influence by member municipalities beyond their representation on the Board. The City's contribution to each risk pool equals the ratio of the City's payroll to the total payrolls of all entities participating in the same layer of each program, in each program year. Actual surpluses or losses are shared according to a formula developed from overall loss costs and spread to member entities on a percentage basis after a retrospective rating. CJPRMA’s financial statements may be obt ained by contacting CJPRMA at (925) 837- 0667. LAWCX’s financial statements may be obtained by contacting LAWCX at (800) 541-4591.