CITY OF LOYALTON
OF OrA,
COUNTY OF SIERRA
6OS SCHOOL STREET
P.O. BOX 128
LOYALTON. CALIFORNIA 96118
(530) 993-6750 CALIFORNIA
·1901
cityofloyalton.org
COUN
OFFICE OF THE MAYOR
AGENDA FOR THE REGULAR MEETING OF THE
LOYALTON CITY COUNCIL
6:00 P.M. - CITY HALL AUDITORIUM
605 SCHOOL STREET
SEPTEMBER 15'H
NEXT ORDINANCE #426
NEXT RESOLUTION NO 4-2026
AGENDA & PACKET AVAILABLE ON CITY WEB SITE
cityofloyalton.org
Any person with a disability may submit a request for reasonable odification or accommodation to the above-described means f cessing and offering comment at the meeling to Kathy LeBlanc. Ci Clerk, at [[email protected]] who will swiftly resolve such
1. CALL TO ORDER
2. PLEDGE OF ALLEGIANCE
ROLL CALL
4. APPROVAL OF AGENDA
5. ANNOUNCEMENTS
APPROVAL OF MINUTES
Regular Meeting 8-18-2026 (Altachment)
Special Meeting 8-31-26 (Attachment)
7. STAFF REPORTS/WRITTEN COMMUNICATIONS/UNFINISHED
BUSINESS
8. PUBLIC COMMENT
This is an opportunity for members of the public to address the Council on items which are not on the agenda. Please state your name for the record. Comments are limited to three minutes. Written comments should be submitted to the City Clerk 24 hours prior to the meeting to allow for distribution. Under Goverment Code Section 54954.2 - Brown Act, the Council cannot take action on any item not on the posted agenda
9. FIRE DEPARTMENT REPORT
10. FINANCIAL COMMITTEE REPORTS
1. Financial Committee Report/Update
• Approval of Reconciled Accounts (Attachment)
• Approval of Bill Sheet for August 2026 (Attachment)
• Acknowledgment of Approval of Fund Transfer from General 1956 to Enterprise Loan MM 0559 not to exceed $20,000.
(Attachment)
11. PUBLIC WORKS COMMITTEE REPORTS/PARK AND RECREATION
12. OTHER COMMITTEE REPORTS
13. DISCUSSION AND POSSIBLE ACTION ITEMS
1. Discussion and Possible Action regarding Reaffirming our State of Emergency Water Distribution System.
2. Discussion and Possible Action regarding approval of Draft Audit for 2024-2025.
14. AGENDA INPUT FOR UPCOMING MEETINGS
15. BOARD MEMBER CLOSING REMARKS
16. ADJOURNMENT
August 18, 2026
REGULAR MEETING
The Regular meeting of the Loyalton City Council was called to order by Mayor Markum on August 18, 2026, at 6:00 p.m. Loyalton City Auditorium
COUNCIL MEMBERS' PRESENT: J. Markum, S. Mcllravy, B. Mertton, J. Gerow, S. Moran COUNCIL MEMBERS ABSENT:
STAFF PRESENT
City Clerk- Kathy LeBlanc
GUESTS PRESENT
C. Robles, J. Buck, J. Cameron, M. Foreman, C. Johnson, S. Lopez, T. Pribble, L. Ryan, R. Searls, L. Garza
APPROVAL OF AGENDA
It was moved by S. Mcllravy, seconded by S. Moran to approve the agenda as presented. Motion unanimously carried.
ANNOUNCEMENTS
1. Councilmember Moran reported that the light for downtown is here and they are working on installation.
APPROVAL OF MINUTES
1. It was moved by J. Gerow, seconded by B. Mertton to approve the minutes for the Special meeting of 7-21-26. Motion unanimously carried.
2. It was moved by J. Gerow, seconded by B. Mertton to approve the minutes of the Regular Meeting of 7-21-26. Motion unanimously carried.
STAFF REPORTS/WRITTEN COMMUNICATIONS/UNFINISHED BUSINESS NONE
PUBLIC COMMENT
1. J. Cameron inquired about the contract with the County for the probation building
2. C. Johnson commented on the murals painting for the Rotary Containers.
3. L. Ryan inquired about the Eberhart property.
4. T. Pribble inquired about the abandoned vehicles. Councilmember Mcllravy gave a brief update on the abandoned vehicles.
5. R. Searls reported on a manhole cover on Court and First Street.
FIRE DEPARTMENT REPORT
No report given
FINANCIAL COMMITTEE REPORT/UPDATE
No financial report was given.
1. Reconciled accounts will be added to the next agenda.
2. After a brief discussion it was moved by B. Mertton, seconded by S. Moran to approve the bill sheet for July 2026 not to exceed $121,841.22. Motion unanimously carried.
ACKNOWLEDGEMENT OF APPROVAL OF FUNDS TRANSFERS.
1. It was moved by J. Gerow, seconded by B. Mertton, to approve fund transfer from General 1956 to Enterprise Loan MM not to exceed $25,000. Motion unanimously carried.
PUBLIC WORKS COMMITTEE REPORTS/PARK AND RECREATION
Councilmember Gerow reported that the crew has been working on the potholes and fixing the roof at City Hall office.
OTHER COMMITTEE REPORTS
Mayor Markum announced that the new bid package will go out for engineering and contractors for the water line replacement.
DISCUSSION AND POSSIBLE ACTION ITEMS
1. After a brief discussion It was moved by B. Mertton, seconded by J. Gerow to reaffirm our State of Emergency Water Distribution System. Motion unanimously carried. (This item will be added to the next agenda)
2. It was moved by S. Mcliravy, seconded by S. Moran to approve adoption of Resolution 3-2026 Authorizing the adoption of 2026 Sierra County Multi-Jurisdictional Hazard Mitigation Plan. Roll Call- Mayor Markum-Aye, B. Mertton-Aye, S. Mcllravy-Aye, J. Gerow-Aye, S. Moran-Aye. Motion unanimously
3. It was moved by S. Mcllravy, seconded by J. Gerow to approve Business License for Glen Sandau- Drywall. Motion unanimously carried.
IMPUT FOR UPCOMING MEETING
CLOSING REMARKS
Meeting Adjourned
APPROVED:
Mayor Markum
ATTEST:
Kathy LeBlanc, City Clerk
August 31, 2026
SPECIAL MEETING
The special meeting of the Loyalton City Council was called to order by Mayor Markum on August 31,2026 at 6:00 p.m.
COUNCIL MEMBERS' PRESENT
J. Markum, J. Gerow, S. Mcllravy, S. Moran
COUNCIL MEMBERS ABSENT: B. Mertton
STAFF PRESENT: City Clerk-Kathy LeBlanc
GUESTS PRESENT: None
APPROVAL OF AGENDA
It was moved by S. Mcllravy, seconded by J. Gerow to approve the agenda as presented.
Motion carried.
ANNOUNCEMENTS
None
STAFF REPORTS
None
PUBLIC COMMENT
None
DISCUSSION AND POSSIBLE ACTION
CLOSED SESSION:
1. Mayor Markum adjourned the meeting to go into closed session. Mayor Markum reconvened the meeting and reported the following information: It was decided by consensus of the Council to approve the offer from Sierra County for the rent of the probation building for $1400.00 per month. Mayor Markum also announced that by consensus of the council, to make Leanna Martin a permanent part-time employee. (S.
Mollravy abstained)
AGENDA IMPUT FOR UPCOMMING MEETING
COUNCIL MEMBER CLOSING REMARKS
MEETING ADJOURNED
APPROVED:
Mayor Markum
ATTEST:
Kathy LeBlanc- City Clerk
Acknowledgement of Approval, City of Loyalton
The City of Loyalton acknowledges approval of the below listed reconciled Plumas Bank Accounts
General Account (1956) $260,463.82 Reconciled as of 08/31/2026 Enterprise Loan Savings (0559) $355,512.65 Reconciled as of 08/31/2026 WWTP Settlement (4387) $13,732.54 Reconciled as of 08/31/2026 Fire Department Savings (7243) $81,603.86 Reconciled as of 08/31/2026 FEMA Flood Savings (0059) $45,764.26 Reconciled as of 08/20/2026 CalTRUST Enterprise $373,198.54 Reconciled as of 08/31/2026 CalTRUST Fire Dept Reserve $163,406.29 Reconciled as of 08/31/2026 CalTRUST Roof $18,102.02 Reconciled as of 08/31/2026
CalTRUST Prop 68 $19,820.80 Reconciled as of 08/31/2026 LAIF WWTP Settlement (496) $1,747,405.12 Reconciled as of 08/31/2026 Wildland Fire Checking (4162) $140,049.10 Reconciled as of 08/31/2026 This authorization took place at the council meeting held on 09/15/2026 and will be further reflected in the council minutes of this meeting.
Joy Markum Mayor, Dated 09/15/2026
Authorized Signature Printed Name
10:11 AM City of Loyalton
09/10/26 Bills Paid
Accrual Basis August 18 through September 10, 2026
Date Num Name Memo Amount
General Funds
General Checking 1956- NEW
Liability Check 08/24/2026 E-pay Employment Development Department 69817369 QB Tracking # -1461537474 -281.93 Liability Check 08/24/2026 E-pay US Treasury-941 94-6000364 QB Tracking # -1461529474 -1,995.54 Liability Check 08/24/2026 E-pay Employment Development Department 69817369 QB Tracking # -1461521474 -73.72 Bill Pmt -Check 08/24/2026 10367 Jason Marlow 9.5 Hours Work -237.50 Bill Pmt -Check 08/24/2026 10368 Keith Kaufman 9.5 Hours Work -237.50 Check 08/24/2026 10369 Reimbursement -35.37
08/24/2026 10370 Greg Lonergan inserenent Reimbursement 109.98 Check
Liability Check 08/24/2026 E-pay Employment Development Department 69817369 QB Tracking #-1457509474 -42.08 Liability Check 08/24/2026 E-pay US Treasury-941 94-6000364 QB Tracking # 1457503474 -404.50 Bill Pmt -Check 08/26/2026 10372 Califomia Department of Water Resources 0.9400 -792.00 Bill Pmt -Check 08/26/2026 10373 Collins Accountancy Company May 2020- June 2026 6,982.50 Bill Pmt -Check 08/26/2026 10374 De Nora Water Technologies LLC -29,985.18 Bill Pmt -Check 08/26/2026 HUNT & SONS, INC Heat Pasurance Reinursement -8,887.25 Bill Pmt -Check 08/26/2026 10376 90582 -849.68
Bil Pmt -Check 08/26/2026 10377 Intermountain Disposal, Inc. Garbage Disposal -130.46 Bill Pmt -Check 08/26/2026 Jefferson Supply Company Sprinkler Parts -717.92 Bill Pmt -Check 08/26/2026 10379 Fire Department Gear -624.74 Bil Pmt -Check 08/26/2026 10380 Liney Bowes inc Purchase Power 8000-9000-0953-9911 -253.14 Bill Pmt -Check 08/26/2026 10381 Pitney Bowes Supplies Red Ink Cartridge -363.16 Bil Pmt -Check 08/26/2026 10382 Plumas-Sierra Rural Electric-17386 403 Poole Ln. -7,753.87 Bill Pmt -Check 08/26/2026 10383 Plumas-Sierra Rural Electric-2941 Sewer Plant -94.22 Bill Pmt -Check 08/26/2026 10384 Plumas-Sierra Telecomm. Broadband -124.00 Bill Pmt -Check 08/26/2026 10385 Plumas-Sierra Telecomm.- Fire Broadband -75.00 Bill Pmt -Check 08/26/2026 10386 S.C.O.R.E. Installment -10,056.40 Bill Pmt -Check 08/26/2026 10387 SVHC 1100 -1,729.51
Bill Pmt -Check 08/26/2026 10388 SVHC- Fire Dept SVHC -162.37 Bill Pmt -Check 08/26/2026 10389 Verizon Wireless 370745244-000001 -38.01 Bill Pmt -Check 08/26/2026 10390 Western Nevada Supply 34860 -300.93 Bill Pmt -Check 08/26/2026 10391 Xerox Corporation -273.
Liability Check E-pay US Treasury-941 94-600084 OB Tracking # 1351517474 - 137. 08/26/2026
Paycheck 08/27/2026 10361 LeBlanc, Katherine L -761.
Paycheck 08/27/2026 10362 Lonergan, Greg
Paycheck 08/27/2026 10363 Martin, Leanna M -337.76
Paycheck 08/27/2026 10364 Moran, Andrew B -1,115.71
Paycheck 08/27/2026 10365 Whitley, Kirsten A -81.26
Paycheck 08/27/2026 10366 Wolley, George W. -2,641.69
Paycheck 08/27/2026 10371 -1,477.67
Bill Pmt -Check 08/27/2026 10402 Manner Communications 15439 -918.33 Bill Pmt -Check 08/27/2026 10403 Chicago Embroidery Company Loyalton Fire Department -287.50 Bill Pmt -Check 08/27/2026 10404 Porter Simon Professional Services 92132-13200M -2,856.00 Bill Pmt -Check 08/27/2026 10405 USA Blue Book -508.44
Bill Pmt -Check 08/27/2026 10406 Crescent Towing & Repair Vehicle Tow Flat Rate x2 Paycheck 08/31/2026 10393 LeBlanc, Katherine L
Paycheck 08/31/2026 10395 Mellravy, Susan L
Paycheck 08/31/2026 10396 Mertton, William J
Paycheck 08/31/2026 10392
Paycheck 08/31/2026 10394 Markum, say C
Paycheck 08/31/2026 10397 Moran. Sean M
Check 08/31/2026 10407 USPS Postage
Check 09/01/2026 10398 Patsy Jardin Retiree September 2026 Pension Check 09/01/2026 10399 John Cussins Retiree September 2026 Pension Check 09/01/2026 10400 September 2026 Pension -637.11
Check 09/01/2026 10401 September 2026 Pension -323.92
Liability Check 09/08/2026 E pay Employment Development Department 69817369 QB Tracking #-668905474 -292.21
10:11 AM City of Loyalton
09/10/26 Bills Paid
Accrual Basis August 18 through September 10, 2026
Type Date Num Name Memo Amount
Liability Check 09/08/2026 E-pay US Treasury-941 398196908 Tracking + 1-8902774 -2,132.78 Liability Check 09/08/2026 E-pay Afa File Landline BAN 34 arment -19.65 Bill Pmt -Check 09/09/2026 10414 BAN 9391059343 30.81
Bill Pmt -Check 09/09/2026 10415 AT&T Fire Pager BAN 54523 BAN 9391054523 -28.42 Bill Pmt -Check 09/09/2026 10416 AT&T Sewer BAN 54522 BAN 9391054522 -56.55 Bill Pmt -Check 09/09/2026 10417 Domain Networks sierracountyfireprotectiondistrict1.org -289.00 Bill Pmt -Check 09/09/2026 10418 Jason Marlow City Hall Ceiling Repair -100.00 Bill Pmt -Check 09/09/2026 10419 Keith Kaufman City Hall Ceiling Repair -100.00 Bill Pmt -Check 09/09/2026 10420 Liberty Utities- 2050(206 Front) 206 Front -881.34 Bill Pmt -Check 09/09/2026 Liberty Utilities- 2120 (Park Well) 105 Beckwith Park Well -11,524.96 Bill Pmt -Check 09/09/2026 10422 Liberty Utilities- 2737 (Main St Lights) 511 Main St ST LGHTS -39.61 Bill Pmt -Check 09/09/2026 10423 Liberty Utilities 4602 (3rd St Well) 701 3RD ST. UNIT PMP/N -105.08 Bill Pmt -Check 09/09/2026 Liberty Utilities-7521 (Street Lights) ST LGTS UNIT BC 37 -8,001.20 Bill Pmt -Check 09/09/2026 10425 S.C.O.R.E. Installment - 10,056.40 Bill Pmt -Check 09/09/2026 10426 Silver State Analytical Laboratories, Inc -282.00 Bill Pmt -Check 09/09/2026 Verizon Wireless 370745244-000001 -38.01 Paycheck 09/10/2026 10408 LeBlanc. Katherine L -722.42
Paycheck 09/10/2026 10409 Lonergan, Greg 1,299.75
Paycheck 09/10/2026 10410 Martin, Leanna M 412.35
Paycheck 09/10/2026 10411 McGarity. Billy R -1.561.72
Paycheck 09/10/2026 10412 Whitley, Kirsten A -462.22
Paycheck 09/10/2026 10413 Wolley. George W. -2641.69
Total General Checking 1956- NEW -133,677.99
Total General Funds - 133.677.99
-133,677.99
Acknowledgement of Approval, City of Loyalton
The City of Loyalton acknowledges approval of the below listed Transfer(s) of Funds.
Transfer From Transfer To Date Amount
General Fund Enterprise Loan MM 0559 09/06/2026
Water 1,000.00
Sewer 4,000.00
General Fund Enterprise Loan MM 0559 09/13/2026
Water 1,000.00
Sewer 4,000.00
General Fund Enterprise Loan MM 0559 09/20/2026
Water 1,000.00
Sewer 4,000.00
General Fund Enterprise Loan MM 0559 09/27/2026
Water 1,000.00
Sewer 4,000.00
THIS TOTAL $20,000.00
This authorization took place at the council meeting held on 09/15/2026 and will be further reflected in the council minutes of this meeting
Joy Markum Mayor, Dated 09/15/2026
Authorized Signature Printed Name
CITY OF LOYALTON
FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2025
DRAFT
CITY OF LOYALTON
Table of Contents
Independent Auditor's Report ... 1
Basic Financial Statements:
Government-Wide Financial Statements:
Statement of Net Position.
Statement of Activities.
Fund Financial Statements:
Governmental Funds:
Balance Sheet.... .. 5
Reconciliation of the Governmental Funds Balance Sheet to the Goverment-Wide Statement of Net Position - Governmental Activities.
Statement of Revenues, Expenditures and Changes in Fund Balances. 7 Reconciliation of the Statement of Revenues, Expenditures and Changes In Fund Balances of Governmental Funds to the Government-Wide Statement of Activities - Governmental Activities 8
Proprietary Funds:
Statement of Net Position... 9
Statement of Revenues, Expenses and Changes in Net Position 10 Statement of Cash Flows.... =
Notes to the Financial Statements. 12
LARRY BAIN, CPA
An Accounting Corporation
2148 Frascati Drive, El Dorado Hills, CA 95762 / 916.601-8894 [email protected]
DRAFT
INDEPENDENT AUDITOR'S REPORT
To the City Council
City of Loyalton, California
Qualified Opinion
and the respective changes in financial position and where applicable, cash flows thereof for the fiscal year then ended in conformity with U.S. generally accepted accounting principles.
Basis for Qualified Opinion
The City does not utilize an accounting system with a self-balancing set of accounts for recording transactions to each fund. As a result entries can be posted to the general ledger causing the financial statements to be out of balance by fund and entries posted to funds causing material misstatement without being detected in a timely manner by the finance staff.
The City has not reviewed and adjusted prior year allocations for the enterprise funds debt service reserve transfers.
The net effect of adjustments could result in material misstatements to these financial statements, the amount of which is unknown.
The City has not obtained an actuarial valuation and has not recorded the information in these financial statements in accordance with Governmental Accounting Board Statement No. 68 (GASB 68), for the pension commitment made to certain retirees of the City. As a result of not obtaining an actuarial valuation in accordance with GASB 68, the amount of misstatement to the net pension liability, the deferred outflow of resources, the deferred inflow of resources and pension expense is unknown.
The City did not approve a budget for the fiscal year under audit which is a material noncompliance with laws and a departure from GAAP.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America.
Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City of Loyalton and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about City of Loyalton's ability to continue as a going concern within one year after the date that the financial statements are available to be issued.
Auditor's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements, including omissions, are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with generally accepted auditing standards, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of City of Loyalton's internal control. Accordingly, no such opinion is expressed. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. • Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about City of Loyalton's ability to continue as a going concern for a reasonable period of time. identified during the audit.
Required Supplementary Information
Management has omitted the management's discussion and analysis and the budgetary comparison schedules that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context.
Our opinion on the basic financial statements are not affected by this missing information.
DRAFT
Larry Bain, CPA
An Accounting Corporation
August 22, 2026
2 CITY OF LOYALTON
STATEMENT OF NET POSITION
JUNE 30, 2025
Govermental Business-type
Activities Activities Total
Current Assets
Cash and investments $ 1,154,884 $ 1.590.969 $ 2.745,853 Prepaid expense 19,496 19,496
Inventory 127,400 127.400
Accounts receivable 24,624 123,288 147,912
Restricted receivables for water assessment 12,222 12.222 Grants receivable 139,913 18,541 158.454
Restricted cash and investments 52,543 350.878 403,421
Short term lease receivable 6,464 6.464
Total current assets 1.378.428 2.242.794 3.621.222
Non Current Assets
Interal balances 560,584 (560,584)
398,190 398.190
Long-term lease receivable
Capital assets:
Land 55,293 373,319 428.612
Construction in progress 48,270 48.270
Buildings 609.570 420,320 1,029,890
Site improvements 2.370.286 11.416.391 13,786.677
Equipment 1.050.603 888.514 1.939,117
Less: accumulated depreciation (2.154.449) (7.012.439) (9,166,888) Total capital assets 1.931.303 6.134.375 8.065.678
Total non current assets 2.890.077 5.573,791 8.463,868
Total assets 4.268.505 7.816.585 12.085.090
Liabilities
Current liabilities:
Accounts payable 25,216 38,262 63.478
Accrued wages 50,499 3.236 53,735
Customer deposits 7,378 7,378
Accrued interest payable 51,577 51.577
Uneamed revenue-advance 52.469 52,469
Long-term liabilities-due within one year 155.000 155,000 Total current liabilities 128.184 255.453 383.637
Liabilities-due in more than one year:
Note payable 625,129 625.129
Certificate of participation 3,314,800 3.314,800
Total liabilities due in more than one year 3.939,929 3.939.929 Total liabilities 128,184 4.195,382 4.323,566
Dilerred Inflows of Resources
Deferred inflows-leases 394.069 394,069
Total deferred inflows of resources 394,069 394,069
Net Position
Net investment in capital assets 1.931,303 2,039,446 3.970,749 Restricted 350,878 350,878
Unrestricted 1.814,949 1.230,879 3,045,829
Total net position $ 3.746.252 $ 3,621,203 $ 7,367,455
The accompanying notes are an integral part of these financial statements
CITY OF LOYALTON
STATEMENT OF ACTIVITIES
JUNE 30, 2025
Net (Expense) Revenue and
Program Revenues Changes in Net Position
Charges for Operating Grants Capital Grants Governmental Business-type Functions/programs Services and Contributions and Contributions Governmental Activities:
General government $ 276.195 $ 21,639 S - $ (254,556) - $ (254,556) Public safety 348.180 733,452 385,272 385.272
Public works 1.793 7,859 6,066 6,066
Health and welfare-cemetery 495 2,500 2,005 2,005
Streets and roads 72,846 26,783 22.770 (23,293) (23,293) Community development 28,511 (28.511) (28,511)
Culture/recreation 59,152 6,775 (32.377) (32.377)
Total governmental activities 787,172 799,008 22.770 34,606 34,606 Business-type Activties:
Water 374.012 362.100 122.220 110.308 110,308
Sewer 608,250 405.818 (202,432) (202,432)
Interest on long-term debt 132,997 ((32.997) (132.997)
Total business-type activities 1.115,259 767,918 122,220 (22,121) (225,121) Total Government S1.902431 $1.566.926 22,770 122,220 34,606 (23,121) (190,515) General Revenues:
Taxes:
Property taxes 93.842 93,842
Sales and use tas 76.610 76,610
Franchise tax 12,996 12,996
Motor vehicle in lieu tas 66,612 66.612
Other 2,985 2,985
Investment income 66,672 70,045 136,717
Total general revenues 319,17 70,045 389,762
Change in net position 354,323 (155,076) 199.247
Net position - beginning of fiscal year as previously reported 3,346,118 3,822,090 7,168,208 Adjustment-prior year property tax (note 9) 45,811 (45,811) 45,811 Net position - beginning of fiscal year as restated 3,391,929 7,168,208 Net position - ending $ 3,746,252 $7,367,455
The accompanying notes are an integral part of these financial statements
CITY OF LOYALTON
GOVERNMENTAL FUNDS
BALANCE SHEET
JUNE 30, 2025
Major Special Total
Revenue Fund Governmental
General Gas Tax Funds
Assets
Cash and investments $ 1,121,206 33,678 $ 1,154,884
Restricted cash 52,543 52,543
Receivables
Accounts 15,974 8,650 24,624
Grants 139,913 139,913
Due from other funds 708,517 18,974 727,491
Total assets $ 1,985,610 $ 113,845 $2,099,455
Liabilities
Accounts payable 23,290 $ 1,926 $ 25,216
Accrued wages 50,499 50,499
Unearned revenue -advance 52,469 52,469
Unearned revenue-unavailable 36,000 36,000
Due to other funds 104,225 62,683 166,908
Total liabilities 214,014 117,078 331,092
Fund Balances
Unassigned 1,771,596 (3,233) 1,768,363
Total fund balances 1.771,59 (3,233) 1,768,363
Total liabilities and fund balances $ 1,985,610 $ 113,845 $2,099,455 The accompanying notes are an integral part of these financial statements
CITY OF LOYALTON
RECONCILIATION OF GOVERNMENTAL FUNDS
BALANCE SHEET TO THE STATEMENT OF NET POSITION
JUNE 30, 2025
Fund balances of governmental funds 1,768,363
Amounts reported for governmental activities in the statement of net position are different because:
Capital assets, net of accumulated depreciation, are not current financial resources and are not included in the governmental funds. 1,931,305
The difference between leases receivable and deferred inflows from leases is recognized as revenue in the statement of activities 10,584
Accounts receivable received more than 60 days after fiscal year end are recorded as deferred revenue in the fund financial statements, but is recognized as revenue in the statement of activities. 36,000
Net position of governmental activities $ 3,746,252
The accompanying notes are an integral part of these financial statements
CITY OF LOYALTON
GOVERNMENTAL FUNDS
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE FOR THE FISCAL YEAR ENDED JUNE 30, 2025
Major Special Total
Revenue Fund Governmental
General Gas Tax Funds
Revenues
185,823 - $ 185,823
Licenses and permits 28,355 28,355
320,018 49,553 369,571
738,325 738,325
37,753 37,753
3,185 3,185
Total revenues 1,313,459 49,553 1,363,012
Expenditures
Current:
General government 202,707 202,707
Public safety 290,310 290,310
Health and sanitation 495 495
Highways and streets 72,846 72,846
Community development 28,511 28,511
Culture and recreation 28,286 28,286
Capital outlay
Total expenditures 550,310 72,846 623,154
Revenue over (under) expenditures before
other financing sources (uses) 763,149 (23,293) 739,858 Other Financing Sources (Uses)
Operating transfers in 38,670 38,670
Operating transfers out (38,670) (38,670)
Total other financing sources (uses) (38,670) 38.670
Net change in fund balances 724,479 15,377 739,858
Fund balance - beginning of fiscal year as previously reported 1,001,306 (18,610) 982,696 Adjustment-prior year property tax (note 9) 45,811 45,811 Fund balance - beginning of fiscal year as restated 1,047,117 (18,610) 1,028,507 Fund balance, end of fiscal year $ 1,771,596 (3,233) $ 1,768,365 The accompanying notes are an integral part of these financial statements
CITY OF LOYALTON
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES-GOVERNMENTAL FUNDS TO THE STATEMENT OF
ACTIVITIES-GOVERNMENTAL ACTIVITIES
FOR THE FISCAL YEAR ENDED JUNE 30, 2025
Net change in fund balances - total governmental funds 739,858 Amounts reported for governmental activities in the statement of activities differs from the amounts reported in the statement of revenues, expenditures and changes in fund balances because:
Governmental funds report capital outlays as expenditures. However, in the statement of activities. The costs of those assets is allocated over their estimated useful lives as depreciation expense or are allocated to the appropriate functional expense when the cost is below the capitalization threshold. This activity is reconciled as follows:
Cost of assets capitalized
Depreciation expense (164,019)
The difference between leases receivable and deferred inflows from leases is recognized as revenue in the statement of activities 10,584 Accounts receivable received more than 60 days after fiscal year end is deferred revenue in the fund financial statements, but is recorded as revenue in the statement of activities (232,101)
Change in net position of governmental activities $ 354,323 The accompanying notes are an integral part of these financial statements
CITY OF LOYALTON
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2025
Water Sewer Totals
Current Assets:
Cash and investments 175,916 1,415.053 1,590,969
Restricted cash and investments 61.887 288.991 350,878
Prepaid expense 1.306 18,190 19,496
Inventory 127,400 127,400
Receivables
Accounts (net of allowance for doubtful accounts) 61.241 62.047 123.288 Restricted receivables for water assessment 12.222 12.222 Interest receivable 18.541 18,541
Due from other funds 413.938 413,938
Total current assets 439.972 2.216.760 2.656.732
Capital assets:
Nondepreciable Capital Assets:
Land 373,319 373.319
Construction in progress 48,270 48.270
Depreciable Capital Assets
Building 2,200 418.120 420.320
Site improvements 2.811.890 8.604.501 11.416.391
Equipment 151.243 737,271 888.514
Less accumulated depreciation (L.622.085) (5.390.354) (7.012.439) Total capital assets (net of accumulated depreciation) 1.391,518 4.742.857 6.134.375 Total assets 1,831.490 6.959.617 8.791,107
Liabilities
Current Liabilities:
Accounts payable 14.586 23.676 38.262
Accrued payroll 2,193 1,043 3,236
Customer deposits 3,099 4,279 7,378
Due to other funds 457.459 517,063 974.522
Current portion - long term liabilities 25,800 129,200 155,000 Interest payable 12.147 39.430 51.577
515.284 714.691 1.229,975
Noncurrent Liabilities:
Bonds payable 625,129 625,129
Certificates of participation 784,000 2.530.800 3.314,800 Total noncurrent liabilties 784,000 3.155.929 3.939.929 Total liabilities 1.299.284 3,870,620 5,169.904
Net Position:
Net investment in capital assets 581,718 1,457.728 2,039,446 Restricted for water assessment 12,222 12,222
Restricted for debt service 61,887 288,991 350,878
(123.621) 1,342,278 1.218.657
Total net position 532.206 3.088.997 $ 3,621.203
The accompanying notes are an integral part of these financial statements
CITY OF LOYALTON
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
PROPRIETARY FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2025
Water Sewer Totals
Operating Revenues
Charges for services $ 362,100 405,818 767,918
Total operating revenues 362,100 405,818 767,918
Operating Expenses
102,103 180,381 282,484
198,847 196,012 394,859
73,062 231,857 304,919
Total operating expenses 374,012 608,250 982,262
Operating income (loss) (11,912) (202,432). (214,344)
Non-Operating Revenues (Expenses)
Interest income 2,015 61,030 70,045
Water infrastructure assessment 122,220 122,220
Interest expense (36,655) (96,342) (132,997)
Total non-operating revenues (expenses) 94,580 (35,312) 59,268 Net increase (decrease) in net position 82,668 (237,744) (155,076) Net position - beginning of fiscal year as previously reported 495,349 3,326,741 3,822,090 Adjustment-prior year property tax (note 9) (45,811) (45,811) Net position - beginning of fiscal year as restated 449,538 3.326,741 3,776,279 Net position - ending $ 532,206 $ 3,088,997 $ 3,621,203 The accompanying notes are an integral part of these financial statements
CITY OF LOYALTON
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
JUNE 30, 2025
Water Sewer Totals
Cash Flows from Operating Activities
ash received from customer 332,327 $ 403.676 736,003
ash payments to supplier (242,198) (217.563) (459,761)
Cash payments to employees (102,355) (186.853) (289,208) Net cash provided by (used for) operating activities (12.226) (740) (12.966) Cash Flows from Capital and Related Financing Activities Purchase of fined assets (52.120) (52,120)
Reductions of debt (24,700) (125,200) (149,900)
Interest expense (37,026) (98,056) (135.082)
Water infrastructure assessment 135,003 135,003
Net cash provided by (used for) capital and related
financing activities 73.277 (275.376) (202.099)
Cash Flows from Investing Activities:
Interest income 9.015 65.489 74.504
Net cash provided by investing activities 9,015 65,489 74,504 Net increase (decrease) in cash and cash equivalents 70.066 (210.627) (140.561) Cash and cash equivalents, beginning of fiscal year 167.737 1.914.671 2.082.408 Cash and cash equivalents. end of fiscal year 237,803 $ 1,704.044 $ 1,941,847 Reconciliation of Cash and Cash Equivalents:
Cash and investments $ 175,916 $ 1,415,053 $ 1.590.969
Restricted cash and investments 61,887 288.991 350.878
Total cash and cash equivalents 237,803 $ 1,704,044 1.941.847 Reconciliation of Operating Income to Net Cash
Provided by (used for) operating activities $ (11.912) (202,432) (214,344) Adjustments to operating income:
Depreciation 73,062 231,857 304,919
(Increase) decrease in accounts receivable (29,682) (2.016) (31,698) (Increase) decrease in prepaid expense (983) 4,645 3,662 Increase (decrease) in accounts payable (42,368) (26,196) (68.564) Increase (decrease) in accrued payroll (252) (6,472) (6,724) Increase (decrease) in customer deposits (91) (126) (217) Net cash provided by (used for) operating activities (12,226) (740) ≤ (12.966) The accompanying notes are an integral part of these financial statements
CITY OF LOYALTON
Notes to the Financial Statements
June 30, 2025
Note I: Summary of Significant Accounting Policies
The basic financial statements of City of Loyalton, California, (the "City") have been prepared in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP") as applied to governmental agencies. The Governmental Accounting Standards Board (GASB") is the acceptable standard setting body for establishing governmental accounting and financial reporting principles. The more significant of the City's accounting policies are described below.
A. Reporting Entity
The City was incorporated in 1901, as a municipal corporation operating under the general laws of the State of California. The City operates under a Council-Manager form of government and provides services including general government, public works, public safety, water, sewer, and parks and recreation. Control or dependence is determined on the basis of budget adoption, selection of governing authority and designation of management, outstanding debt secured by revenues or general obligations of the City and ability to significantly influence The financial reporting entity, as defined by the GASB, consists of the primary government, the City, organizations for which the primary government is financially accountable, and any other organization for which the nature and significance of their relationship with the primary government are such that exclusion would cause the reporting entity's financial statements to be misleading or incomplete.
B. Basis of Accounting
The government-wide, proprietary and agency fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when eamed or, for property tax revenues, in the period for which levied. Expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Revenue from sales tax is recognized when the underlying transactions take place. Revenues from grants, entitlements and donations are recognized in the fiscal year in which all eligible requirements have been satisfied.
Govermental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized when both measurable and available. Measurable means the amount of the transaction can be determined and available means collectible in the current period or soon enough thereafter to be used to pay liabilities of the current period. Resources not available to finance expenditures and commitments of the current period are recognized as deferred revenue or as a reservation of fund balance. The City considers property taxes available if they are collected within sixty-days after year-end.
Expenditures are recorded when the related fund liability is incurred. Principal and interest on general long-term debt, as well as compensated absences and claims and judgments are recorded only when payment is due.
General capital acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term debt and capital leases are reported as other financial sources.
When applicable, the City reports deferred revenue on its combined balance sheet. Deferred revenue arises when a potential revenue source does not meet both the measurable and available criteria for recognition in the current period. Deferred revenues also arise when resources are received by the City before it has legal claim to them, as when grant monies are received prior to the occurrences of qualifying expenditures. In subsequent periods, when both revenue recognition criteria are met, or when the City has legal claim to the resources, deferred revenue is removed from the combined balance sheet and revenue is recognized.
Proprietary fund operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially equal values. Non-operating revenues, such as subsidies and investment earnings, result from non- exchange transactions or ancillary activities.
12 CITY OF LOYALTON
Notes to the Financial Statements
June 30, 2025
Note 1: Summary of Significant Accounting Policies (Continued) C. Basis of Presentation
Government-Wide Financial Statements
The statement of net position and statement of activities display information about the primary government (the City. These statements include the financial activities of the overall government. These statements distinguish between the governmental and business-type activities of the City. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees charged to external parties.
The statement of activities demonstrates the degree to which the program expenses of a given function are offset by program revenues. Program expenses include direct expenses, which are clearly identifiable with a specific function. Program revenues include 1) charges paid by the recipient of goods or services offered by the programs and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented instead as general revenues.
When both restricted and unrestricted net position are available, unrestricted resources are used only after the restricted resources are depleted
Fund Financial Statements
The fund financial statements provide information about the City's funds. Separate statements for each fund category - governmental and proprietary - are presented. The emphasis of fund financial statements is on major governmental and enterprise funds, each displayed in separate columns. All remaining governmental and enterprise funds are separately aggregated and reported as non-major funds.
The City reports the following major governmental funds:
General Fund - This fund accounts for all the financial resources not required to be accounted for in another fund. This fund consists primarily of general government type activities.
Gas Tax Fund - This fund is used to account the revenues and expenditures of the State Gas Tax The City reports the following major enterprise funds:
Water and Sewer Funds - account for the operation of the City's water and sewer utilities. Activities of these funds include administration, operation and maintenance of the water and sewer systems and billing and collection activities. The Funds also accumulate resources for, and payment of long-term debt principal anc interest. All costs are financed through charges made to utility customers with rates reviewed regularly and adjusted if necessary to ensure the integrity of the Funds.
D. Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures/expenses during the reporting period. Actual results could differ from those estimates.
13 CITY OF LOYALTON
Notes to the Financial Statements
June 30, 2025
Note 1: Summary of Significant Accounting Policies (Continued) E. Cash Equivalents
For the purpose of the statement of cash flows, the City considers cash and cash equivalents as short term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates.
Restricted cash and unrestricted pooled cash and investments held by the City are considered cash equivalents for purposes of the combined statement of cash flow's because the City's cash management pool and funds invested by the City possess the characteristics of demand deposit accounts.
F. Fixed Assets
Capital assets, recorded at historical cost or estimated historical cost if actual historical cost is not available, are reported in govermental activities column of the government-wide financial statements. Contributed fixed assets are valued at their estimated fair market value. Capital assets include land, buildings and building improvements and equipment. Capital assets are defined by the City as assets with an initial, individual cost of more than $5,000.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Depreciation is reconded in the government-wide financial statements on the straight-line basis over the useful life of the assets as follows:
Assets Useful Life
Building and improvements 40-50 years
Utility Systems 18-50 years
Equipment and machinery 5-15 years
G. Property Tax
Sierra County is responsible for assessing, collecting and distributing property taxes in accordance with enabling legislation. Revenue received is based on an allocation factor calculated by the County under the provisions of Proposition 13 plus a percentage of the increase in market value in specific areas. The City's property tax is levied each July I on the assessed values as of the prior January I for all real and personal property located in the City. Property sold after the assessment date (January 1) is reassessed and the amount of property tax levied is prorated.
Secured property taxes are due in two equal installments; the first is due November 1 and delinquent with penalties after December 10; the second is due February 1 and delinquent with penalties after April 10.
Unsecured property tax is levied on July 1 and due on July 31 and becomes delinquent on August 31.
Based on a policy by the County called the Teeter Plan, 100% of the allocated taxes are transmitted by the County to the City, eliminating the need for an allowance for uncollectable. The County, in return, receives all penalties and interest on the related delinquent taxes.
H. Balance Sheet Classifications
Certain resources are classified as restricted assets as their use is restricted for specific purposes by bond agreements, lease agreements, trust agreements, grant agreements, City Charter provisions, or other requirements. Governmental fund types' restricted assets are for grant advances. Proprietary fund types' restricted assets are for renewal and replacement of equipment and debt service reserves. 14 CITY OF LOYALTON
Notes to the Financial Statements
June 30, 2025
Note 1: Summary of Significant Accounting Policies (Continued) I. Compensated Absences
City employees are granted vacation in varying amounts based on classification and length of service. Upon termination or retirement, the City is to pay 100% of the vacation time accrued and 25-35% of the accrued sick leave depending on the length of employment with the City.
Governmental Funds - Governmental funds record expenditures for compensated absences as they are taken by employees.
Proprietary Funds - Proprietary funds record expenditures for compensated absences as they are taken by employees.
J. Intergovernmental Revenues
Federal and state governments reimburse the City for costs incurred on certain fixed asset construction projects under capital grant agreements. Amounts claimed under such grants are credited to intergovernmental revenues if the project is being administered by a Capital Projects fund or to contributed capital if administered by a Proprietary fund. Additionally, the City receives reimbursement from federal and state governments for other programs, such as streets, housing and rehabilitation. These reimbursements are recorded in the fund administering the program as intergovernmental revenues with related program costs included in expenditures.
The respective grant agreements generally require the City to maintain accounting records and substantiating evidence to determine if all costs incurred and claimed are proper and that the City is in compliance with other terms of the grant agreements. These records are subject to audit by the appropriate government agency. Any amounts disallowed will reduce future claims or be directly recovered from the City.
K. Net Position
The government-wide and proprietary fund financial statements utilize a net position presentation. Net position are categorized as invested in capital assets (net of related debt), restricted, and unrestricted. • Net investment in capital assets - Consists of capital assets including restricted capital assets, net of accumulated depreciation and reduced by the outstanding balances of any bonds, mortgages, notes or other borrowings that are attributable to the acquisition, construction or improvement of those assets. • Restricted net position - Consists of net position with constraints placed on their use either by (1) • Unrestricted net position - All other net position that do not meet the definition of "restricted" or "net investment in capital assets."
15 CITY OF LOYALTON
Notes to the Financial Statements
June 30, 2025
Note 1: Summary of Significant Accounting Policies (Continued) L. Fund Balances
As prescribed by GASB Statement No. 54, governmental funds report fund balance in classifications based primarily on the extent to which the City is bound to honor constraints on the specific purposes for which amounts in the funds can be spent. As of June 30, 2025, fund balances for governmental funds are made up of the following:
• Non-spendable fund balance - includes amounts that are (a) not in spendable form, or (b) legally or contractually required to be maintained intact. The "not in spendable form" criterion includes items that are not expected to be converted to cash, for example: inventories, prepaid, and long-term receivables.
Restricted fund balance - includes amounts that can be spent for specific purposes stipulated by external resource providers, constitutionally or through enabling legislation. Restrictions may effectively be changed or lifted only with the consent of resource providers. • Committed fund balance - includes amounts that can only be used for the specific purposes determined by a formal action of the City's highest level of decision-making authority, the City Council. Commitments may be changed or lifted only by the City taking the same formal action that imposed the constraint originally (for example: resolution and ordinance).
• Assigned fund balance - comprises amounts intended to be used by the City for specific purposes that are neither restricted nor committed. Intent is expressed by (1) the City Council or (b) a body (for example: a budget or finance committee) or official to which City Council has delegated the authority to assign amounts to be used for specific purposes.
• Unassigned fund balance - is the residual classification for the General Fund and includes all amounts not contained in the other classifications. Unassigned amounts are technically available for any purpose. In other governmental funds, if expenditures incurred for specific purposes exceeded the amounts restricted, committed, or assigned to those purposes, that fund would report a negative unassigned fund balance.
M. GASB Statement No. 87-Leases
In June 2017, the Governmental Accounting Standards Board (GASB) issued Statement No. 87, Leases (GASB Statement No. 87), 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 also establishes a single model for lease accounting based on the foundational principle that leases are financings of the right to use an underlying asset. Implementation of this Statement had a significant effect on the City's financial statements starting with the fiscal year ended June 30, 2025.
A. Lessor
The District acts as the lessor for land used for a cell tower. The District recognizes leases receivable and deferred inflows of resources in the financial statements. Variable payments based on future performance of the lessees or usage of the underlying asset are not included in the measurement of the lease receivable.
At the commencement of a lease, the District initially measured the lease receivable at the present value of payments expected to be received during the lease term. Subsequently, the lease receivable is reduced by the principal portion of lease payments received. The deferred inflows of resources are initially measured as the initial amount of the lease receivable, adjusted for lease payments received at or before the lease 16 CITY OF LOYALTON
Notes to the Financial Statements
June 30, 2025
Note 1: Summary of Significant Accounting Policies (Continued) M. GASB Statement No. 87-Leases (Continued)
commencement date. Subsequently, the deferred inflows of resources are recognized as revenue over the life of the lease term in a systematic and rational method.
Key estimates and judgments include how the District determines (1) the discount rate it uses to discount the expected lease receipts to present value, (2) lease term, and (3) lease receipts.
The District uses an estimated incremental borrowing rate as the discount rate for lease. * The lease term includes the noncancellable period of the lease. Lease receipts included in the measurement of the lease receivable is composed of fixed payments from the lessee.
The District will monitor changes in circumstances that would require a remeasurement of its leases and will remeasure the lease receivable and deferred inflows of resources if certain changes occur that are expected to significantly affect the amount of the leases receivable.
Note 2: Cash and Investments
The City maintains a cash and investment pool that is available for use by all funds. Each fund type's portion of this pool is displayed on the combined balance sheet as cash and investments. Unless otherwise dictated by legal or contractual requirements, income earned or losses arising from the investment of pooled cash are allocated on a quarterly basis to the participating funds and component units based on their proportionate shares of the average quarterly cash balance.
The City maintains "restricted cash and investments". Monies restricted are for debt service reserves and legal settlement funds for the wastewater treatment plant.
Cash and investments at June 30, 2025, consisted of the following:
Cash and investments $ 2,745,853
Restricted cash and investments 403,421
Total per statement of activities $ 3,149,274
Checking account $ 518,425
Imprest cash 717
Savings 937,797
LAIF 1.692,335
Total cash and investments $ 3,149,274
17 CITY OF LOYALTON
Notes to the Financial Statements
June 30, 2025
Note 2: Cash and Investments (Continued)
A. Investments Authorized by the California Government Code and the Entity's Investment Policy The table below identifies the investment types that are authorized for the City of Loyalton by the California Government Code (or the City's investment policy, where more restrictive). The table also identifies certain provisions of the California Government Code (or the City's investment policy, where more restrictive) that address interest rate risk, credit risk and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustees that are governed by the provisions of debt agreements of the City, rather than the Maximum Percentage Investment
Authorized Investment Type Maturity of Portfolio in One Issuer Investment pools authorized under CA
Statutes governed by Government Code N/A None $40 million U.S. Treasury Obligations 5 years None None
Bank Savings Accounts N/A 25% None
Federal Agencies 5 years 75% None
Commercial Paper 180 days 20% None
Negotiable Certificates of Deposit 180 days 20% None
Re-Purchase Agreements 180 days 20% None
Corporate Debt 5 years 25% None
B. Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of and investment.
Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. Information about the sensitivity of the fair values of the District's investments to market interest rate fluctuations is provided by the following table that shows the distribution of the District's investment by maturity:
12 Months 13-48
Investment Type Totals or Less Months
CALTRUST Public Agency 537,360 $ 537,360 $
State Investment Pool* 1,692,335 1,692,335
Totals $ 1,692,335 $ 1,692,335 $
*Not subject to categorization
The City's investment in the CalTRUST Liquidity Fund is rated AAAm by Standard and Poor's. The Short-Term and Medium-Term Funds are rated AAf/S1+ and AAf/S2, respectively.
C. Concentrations of Credit Risk
The investment policy of the City contains limitations on the amount that can be invested in any one issuer. There are no investments to one issuer exceeding those limits.
D. Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposit or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g. broker-dealer) to a transaction, a government will not be able to recover the value of its investment of collateral securities that are in the possession of another party. The California Government Code and the City's investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits; The California Government Code requires that a financial institution secured deposits made by state or local govermental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the 18 CITY OF LOYALTON
Notes to the Financial Statements
June 30, 2025
Note 2: Cash and Investments (Continued)
D. Custodial Credit Risk (Continued)
government unit). The fair value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure the City's deposits by pledging first deed mortgage notes having a value of 150% of the secured public deposits.
At June 30, 2025, the City's deposits balance was $1,026,224 and the carrying amount was $918,862. The difference between the bank balance and the carrying amount was due to normal outstanding checks and deposits in transit. Of the bank balance $250,000 was covered by the Federal Depository Insurance.
E. Investment in External Investment Pools
LAIF is included in the State's Pooled Money Investment Account. The total amount invested by all public agencies in the State's Pooled Money Investment Account approximates $179.92 billion. Of the $179.92 billion managed by the State Treasurer, 100% is invested in non-derivative financial products and 3.81% is invested in structured notes and asset-backed securities. The Local Investment Advisory Board (Board) has oversight responsibility for LAIF.
The Board consists of five members as designated by state statute.
Investments in external risk pools are not categorized by custodial credit risk because they are not evidenced by specific securities that exist in physical or book-entry form. Shares are held in the pool's name by its third-party custodian.
Investments are accounted for in accordance with the provisions of GASB Statement No. 31, which requires governmental entities to report certain investments at fair value in the balance sheet and recognize the corresponding change in fair value of investments in the year in which the change occurred. The City reports its investments at fair value based on quoted market information obtained from fiscal agents or other sources if the change is material to the financial statements.
Note 3: Lease Receivable
The City derives a portion of its revenue from the rental of real property based on fixed lease amounts. The leases are treated as finance leases for accounting purposes under Governmental Accounting Board Statement No. 87.
Following are the leases administered by the City.
A. The City leases land for a cell tower operated by Everest Infrastructure Partners with a term from March 1, 2024 to March 1, 2049. The lease can be terminated by the lessee at any time and without cause by giving the City written notice of termination. Early termination is not expected. Rent was $1,500 from June 2024 to March 2025 and then was $1,537.5 from March 2025 to June 2025 and the rent increases by 2.5% each March 1. ease receivables consisting of agreements with the cell tower operator for their right-to-use a portion of lar t City owned property. The calculated interest rate used is based on an assumed 3% borrowing rate. For tr fiscal year ended June 30, 2025, the District recognized $18,185 in lease revenue and $12,315 in interest revenue. The 2024/25 lease revenue included a retro payment of $6,000 from March 2024 to June 2024 and a $3,000 one time lump sum payment.
A summary of changes in lease receivable for the fiscal year ended June 30, 2025 is as follows:
Balance
7/1/2024
Lease receivable
19 CITY OF LOYALTON
Notes to the Financial Statements
June 30, 2025
Note 3: Lease Receivable (Continued)
Leases receivable are due in the upcoming years as follows:
Year Ending
June 30, Principal Interest Total
2026 6,464 12,140 $ 18,604
2027 7,123 11,946 19,069
2028 7,814 11,732 19,546
2029 8,537 11,498 20,034
2030 9,294 11,241 20,535
2031-2035 59,104 51,533 110,637
2036-2040 83,933 41,243 125,176
2041-2045 114,742 26,883 141,625
2046-2049 107,644 7,820 115,463
Total $ 404,654 $ 186,036 $ 590,690
Note 4: Liability. Insured Programs and Workers Compensation Protection The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. In 1986, the City joined together with other cities in the State to form Small Cities Organized Risk Effort (SCORE), a public entity risk pool currently operating as a common risk management and insurance program for member cities. The City pays an annual premium to SCORE for its insurance coverage. The Agreement for Formation of the SCORE provides that SCORE will be self-sustaining through member premiums and will reinsure through commercial companies for claims in excess of self-insured levels. A Board of Directors governs the SCORE, consisting of one member appointed by each Member City. A management group employed by the SCORE handles the day-to-day business. At the termination of the joint power agreement and after all claims been settled, any excess or deficit will be divided among the cities in accordance with its governing documents. Financial statements of SCORE are available at the City. 20 CITY OF LOYALTON
Notes to the Financial Statements
June 30, 2025
Note 5: Capital Assets
Capital asset activity for the year ended June 30, 2025 was as follows:
Balance Retirements/ Balance
Governmental Activities July 1, 2024 Additions Adjustments June 30, 2025 Capital assets, not being depreciated:
Land 55,293 - $ - $ 55,293
Capital assets, being depreciated:
Buildings and improvements 2,112,786 2,112,786
Site improvements 867,070 867,070
Equipment 1,050,603 1,050,603
Total capital assets, being depreciated 4,030,459 4,030,459 Less accumulated depreciation for:
Buildings and improvements (909,362) (76,180) (985,542) Site Improvements (536,879) (28,174) (565,053)
Equipment (544,191) (59,663) (603,854)
Total accumulated depreciation (1,990,432) (164,017) (2,154,449) Total capital assets, being depreciated, net 2,040,027 (164,017) 1,876,010 Governmental activities capital assets, net $ 2,095,320 § (164,017) $ $ 1,931,303 Business-Type Activities
Water
Capital assets, not being depreciated:
Construction in progress 48,270 $ $ 48,270
Capital assets, being depreciated:
Buildings 2,200 2,200
Site improvements 2,811,890 2,811,890
Equipment 151,243 151,243
Total capital assets, being depreciated 2,965,333 2,965,333 Less accumulated depreciation (1,549,023) (73,062) (1,622,085) Total capital assets, being depreciated, net 1,416,310 (73,062) 1,343,248 Water capital assets, net 1,464,580 $ (73,062) $ $ 1,391,518 Sewer
Capital assets, not being depreciated:
Land 373,319 $ - - 373,319
Capital assets, being depreciated:
Buildings 418,120 418,120
Site improvements 8,604,50l 8,604,50l
Equipment 685,151 52,120 737,271
Total capital assets, being depreciated 9,707,772 52,120 9,759,892 Less accumulated depreciation (5,158,497) (231,857) (5,390,354) Total capital assets, being depreciated, net 4,549,275 (179,737) 4,369,538 Sewer capital assets, net $ 4,922,594 $ (179,737) $ 4,742,857 21 CITY OF LOYALTON
Notes to the Financial Statements
June 30, 2025
Note 6: Long-term Liabilities (Continued)
Water Fund - 2004 Certificates of Participation
The City of Loyalton issued $1,144,600 in certificates of participation on March 1, 2004 through Rural USDA to provide funds for the construction of various water system improvements The installment payments are secured by a pledge of the net revenues of the City's water system as provided in the installment purchase contract. The interest rate is 4.5% with payment due dates of March 1 and September 1 and final payment due September 1, 2044.
Future annual requirements to amortize the long-term debt outstanding as of June 30, 2025 are as follows:
Fiscal Year End
June 30, Principal Interest Total
2026 $ 25,800 $ 35,861 $ 61,661
2027 27,000 34,673 61,673
2028 28,200 33,43l 61,631
2029 29,500 32,132 61,632
2030 30,800 30,776 61,576
2031-2035 176,000 131,310 307,310
2036-2040 219,300 87,005 306,305
2041-2045 273,200 31,824 305,024
Totals $ 809,800 $417,011 $1,226,811
Sewer Fund - Series 1995-A Revenue Bond
The City of Loyalton issued $1,256,500 in revenue bonds on February 1, 1995 through Rural Economic and Community Development Service 10 provide funds for the construction of various water system improvements.
The pay ens are the red by ple s 5% it paynes of dacio every and upguid in that payment due August 1, 2034.
Future annual requirements to amortize the long-term debt outstanding as of June 30, 2025 are as follows:
Fiscal Year End
June 30, Principal Interest Total
2026 $ 44,300 $ 23,447 $ 67,747
2027 46,200 21,411 67,611
2028 48,600 19,278 67,878
2029 50,800 17,042 67,842
2030 52,800 14,711 67,511
2031-2035 300,438 34,958 335,396
Totals $ 543,138 $130,847 $ 673.985
23 CITY OF LOYALTON
Notes to the Financial Statements
June 30, 2025
Note 6: Long-term Liabilities (Continued)
Sewer Fund - Series 1995-B Revenue Bond
The City of Loyalton issued $186,200 in revenue bonds on February 1, 1995 through Rural Economic and Community Development Service to provide funds for the construction of various water system improvements.
The payments are secured by a pledge of the net revenues of the City's sewer system as provided in the installment purchase contract. The interest rate is 4.5% with payment due dates of February 1 and August 1 and final payment due August 1, 2034.
Future annual requirements to amortize the long-term debt outstanding as of June 30, 2025 are as follows:
Fiscal Year End
June 30, Principal Interest Total
2026 $ 6,900 $ 3,535 $ 10,435
2027 7,100 3,220 10,320
2028 7,400 2,894 10,294
2029 7,700 2,554 10,254
2030 8,100 2,198 10,298
2031-2035 44,791 5,189 49,980
Totals $ 81,991 $ 19,589 $ 101,580
Sewer Fund - 2009 Certificate of Participation
The City of Loyalton issued $3,569,000 in certificates of participation on February 1, 2010 through Rural USDA to provide funds for the construction of various sewer system improvements.
The installment payments are secured by a pledge of the net revenues of the City's water system as provided in the installment purchase contract. The interest rate is 2.5% with payment due dates of February 1 and August 1 and final payment due August 1, 2049.
Future annual requirements to amortize the long-term debt outstanding as of June 30, 2025 are as follows:
Fiscal Year End
June 30, Principal Interest Total
2026 $ 78,000 $ 65,525 $ 143,525
2027 80,000 63,550 143,550
2028 82,000 61,525 143,525
2029 84,000 59,450 143,450
2030 86,000 57,325 143,325
2031-2035 463,000 252,888 715,888
2036-2040 524,000 191,250 715,250
2041-2045 592,000 121,550 713,550
2046-2050 671,000 42,738 713,738
Totals $2,660,000 $ 915,800 $ 3,575,800
24 CITY OF LOYALTON
Notes to the Financial Statements
June 30, 2025
Note 7: Defined Benefit Pension Plan
On November 16, 2016, the CalPERS Board of Administration declared the city of Loyalton in default of its obligation to CaPERS. Effective January 2018, CalPERS reduced the retirement benefits paid to City of Loyalton retirees', pursuant to Government code section 20577 to 40% of retiree' base pension benefit, as subject to cost of living adjustments as calculated by CaPERS ("Reduced Benefit Amount".) Per a settlement agreement with three City retirees, beginning April 2019, and on a monthly basis thereafter, the City of Loyalton agreed to pay an amount equal to 1.075 times the monthly Reduced Benefit Amount for the three retirees. In no event shall Loyalton's monthly payment, when combined with CaPERS' monthly payment, exceed 83% of the three retirees Base Pension or Survivor Benefit (whichever is applicable). Loyalton's obligations under this Agreement will cease once CaPERS ceases making payments to the retirees or their designated survivors.
The total amount paid by the City of Loyalton to the retirees during the 2024/25 fiscal year was $54,828.
Note 8: Interfund Transactions
Receivables and Payables
Balances representing lending/borrowing transactions between funds outstanding at the fiscal year end are reported as either "due from/due to other funds" (amounts due within one year, "advances to/from other funds" (non-curren portions of interfund lending/borrowing transactions), or "loans to/from other funds" (long-term lending/borrowing transactions evidenced by loan agreements). Advances and loans to other funds are offset by a fund balance reserve in governmental funds to indicate they are not available for appropriation and are not expendable available financial resources. Interfund balances are not expected to be repaid within one year of the balance sheet date.
Interfund transactions for the fiscal year ended June 30, 2025 are summarized as follows:
Due to Due from
Other Funds Other Funds
General fund 104,225 $ 708,518
Special revenue funds 62,683 18,974
Enterprise funds 974,522 413,938
Totals $ 1,141,430 $ 1,141,430
Note 9: Stewardship, Compliance and Accountability
A. Deficit Fund Balances
The gas tax fund had a deficit fund balance of $3,233 at June 30, 2025. The deficit fund balance is expected to be eliminated upon receipt of future funding or transfers from the general fund.
The water fund had an unrestricted negative net position of $123,62l and a $237,803 cash balance of which $457,459 negative cash was reclassified to due to other funds in prior fiscal years resulting in net negative cash of $219,656 at June 30, 2025, which includes restricted cash for debt service.
B. Budgeted Appropriations
No budget was approved for the 2025/25 fiscal year.
C. Prior Period Adjustments
A prior period adjustment was recorded increasing general fund, fund balance $45,811 and reducing water fund net position $45,8l1 to account for an error in distributing the property tax and water infrastructure fee in the prior year. 25 CITY OF LOYALTON
Notes to the Financial Statements
June 30, 2025
Note 10: Revenue Limitations Imposed by California Proposition 218 Proposition 218, which was approved by the voters in November 1996, regulates the City's ability to impose, increase, and extend taxes and assessments. Any new increase or extended taxes and assessments subject to the provisions of Proposition 218, requires voter approval before they can be implemented. Additionally, Proposition 218 provides that these taxes and assessments are subject to voter initiative and may be rescinded in the future years by the voters.
Note 11: Related Party Transactions
The City currently is operating without a City Manager. Members of the City Council have taken on the job duties normally performed by a City Manager. The members of the City Council are not compensated for taking on these duties in excess of the approved stipend per meeting received by all City Council members.
Note 12: Gann Limit
Proceeds subject to the limit for 2024-25 $ 583,749
Amount of limit for 2024-25 1,471,138
Amount (under)/over the limit $ (887,389)
Per Capita Percentage Change 3.62%
Population Change -0.41%
Note 13: Operating Lease
On March 21, 2017 the City entered into an operating lease agreement with the Sierra County Probation Department, whereas the City agreed to lease the 1,334 square foot building at 105 Beckwith Street to the Sierra County Probation Department for $1,000 per month, plus the Probation Department has agreed to pay all utilities or the building. The lease had an initial 5-year lease with an option to renew for a one-year period. As of June 30 2025 the lease was on a month-to-month rental period per the holdover provision of the lease, furthermore the ren was reduced to $900 per month to compensate for utilities used by others in the building.
Note 14: Restatement of Beginning Net Position
Beginning net position in the water fund decreased $$45,811 and beginning fund balance in the general fund ncreased $45,811 to adjust for an error made allocating the prior year property tax year-end accrual to the wate und and allocating the prior year-end water infrastructure fee accrual to the general fun Note 15: Commitments and Contingencies
Grants
Amounts received or receivable from grant agencies are subject to audit and adjustment by grantor agencies. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures that may be disallowed by the grantor cannot be determined at this time, although the City expects such amounts, if any, to be immaterial.
Commitments
The City had ongoing engineering and professional service commitments as of June 30, 2025. At June 30, 2025 the City had an open contract for $399,488 related to the Belli/Vandaam waterline repair project.
The City has been notified of a potential underpayment of $99,591 in 941 taxes by the IRS. The City believes this was an error and no liability has been recorded in these financial statements. 26 CITY OF LOYALTON
Notes to the Financial Statements
June 30, 2025
Note 16: Subsequent Events
Subsequent to fiscal year end the City entered into a $472,553 contract with Farr Construction Corporation for work on the waterline replacement project. This contract will be reimbursed with USDA grant funding.
The City of Loyalton management has evaluated subsequent events through August 22, 2026, the date these financial statements were available to be issued
27