City of Menifee Staff Report
Scott Road Widening NEPA Amendment
January 19, 2022
7 8
9 Pursuant to Menifee Municipal Code §3.12.090, any change orders in the amount greater than 10% of the contract amount or that exceeds $25,000 in value, and any time extension of a performance deadline that exceeds 60 days, shall be approved by the City Council. A summary of the agreement amendments is provided in Table 1 below:
Table 1: Agreement Amendment Summary
Amendment
No. Date Approved Services Amount
1 November 4, 2020
Additional services to meet
environmental and design
requirements
$81,980
2 July 7, 2021
Additional environmental
studies and documents
required by jurisdictional
approving environmental
agencies
$52,919
3 Pending Approval NEPA Study $520,900
STRATEGIC PLAN OBJECTIVE
Safe and Attractive Community
FISCAL IMPACT
The total fiscal impact for amendment no. 3 would be $520,900. Existing project funding for the amendment is summarized in Table 2 below:
Table 2: Existing Project Funding
Fund Project Account Number Available
Budget
Amount
Requested
Scott Road
RBBD
Bundy Canyon/Scott
Rd. Widening
410-4555-58083 $521,485 $520,900
Total $521,485 $520,900
ATTACHMENTS
1. Original Agreement
2. Amendment No. 1
3. Amendment No. 2
4. Amendment No. 3
Item Title: 10.23 CivilPros for the Scott/Bundy Canyon Road Widening Project Agreement Amendment Item Page Number: 3
Menifee Mayor and City Council January 19, 2022
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AMENDMENT NO. 1 TO
AGREEMENT BETWEEN CIVILPROS
AND THE CITY OF MENIFEE FOR CIP 20-01: BUNDY CANYON ROAD/SCOTT ROAD
WIDENING PROJECT PROFESSIONAL ENGINEERING SERVICES
This is Amendment No. 1 to that certain AGREEMENT for Professional Services Agreement (“Agreement”) made on September 18, 2019 by and between the City of Menifee (“City”) and CIVILPROS (“Consultant”) for CIP 20-01: BUNDY CANYON ROAD/SCOTT ROAD WIDENING PROJECT PROFESSIONAL ENGIN EERING SERVICES which Amendment is made and entered into on ______________, 2020 to increase the scope of work and compensation amount as indicated below:
1. Section 2, “Compensation” is amended to read as follows, increasing the contract amount by: $81,980.00 (EIGHTY ONE THOUSAND NINE HUNDRED EIGHTY DOLLARS AND
ZERO CENTS)
Section 2. City hereby agrees to pay Consultant a sum not to exceed $2,422,940.00 (TWO MILLION FOUR HUNDRED TWENTY TWO THOUSAND NINE HUNDRED FORTY DOLLARS AND ZERO CENTS ) notwithstanding any contrary indications that may be contained in Consultant's proposal, for se rvices to be performed and reimbursable costs incurred under this Agreement. In the event of a conflict between this Agreement and Exhibit A , regarding the amount of compensation, this Agreement shall prevail. City shall pay Consultant for services rendered pursuant to this Agreement at the time and in the manner set forth herein. The payments specified below shall be the only payments from City to Consultant for services rendered pursuant to this Agreement.
Consultant shall submit all invoices to City in the manner specified herein. Except as specifically authorized in advance by City, Consultant shall not bill City for duplicate services performed by more than one person.
Section 3. Exhibit A, Scope of Services is supplemented to include Amendment No. 1 Scope of Work Additional Work, which supplement is attached as Exhibit A hereto. “Amendment No. 1 Scope of Work Additional Work (Amendment No. 1)” is not intended to replace the original Exhibit A to the Agreement, but instead to augment and increase the scope of work listed in the original Exhibit A to the Agreement.
2. All other terms and conditions of the Agreement remain in full force and effect.
DocuSign Envelope ID: 2048145E-A32C-4931-8A34-C0F2D39CFB55 DocuSign Envelope ID: 72449812-FD1F-456E-9467-C4669A3E8E8B November 4
Item Title: 10.23 CivilPros for the Scott/Bundy Canyon Road Widening Project Agreement Amendment Item Page Number: 45
Menifee Mayor and City Council January 19, 2022
Professional Services Amendment No. 1 with CIVILPROS
CITY OF MENIFEE CIVILPROS
_______________________________ _______________________________ Armando G. Villa, City Manager Robert Morin, Assistant Vice President
Attest: ________________________________
Douglas Sawyer, Vice President
_______________________________
Sarah A. Manwaring, City Clerk
Approved as to Form:
_______________________________
Jeffrey T. Melching, City Attorney
DocuSign Envelope ID: 2048145E-A32C-4931-8A34-C0F2D39CFB55 DocuSign Envelope ID: 72449812-FD1F-456E-9467-C4669A3E8E8B Item Title: 10.23 CivilPros for the Scott/Bundy Canyon Road Widening Project Agreement Amendment Item Page Number: 46
Menifee Mayor and City Council January 19, 2022
Professional Services Amendment No. 1 with CIVILPROS
Amendment No. 1 – Exhibit A: Scope of Work Additional Work
(See following pages for additional detail)
DocuSign Envelope ID: 2048145E-A32C-4931-8A34-C0F2D39CFB55 DocuSign Envelope ID: 72449812-FD1F-456E-9467-C4669A3E8E8B Item Title: 10.23 CivilPros for the Scott/Bundy Canyon Road Widening Project Agreement Amendment Item Page Number: 47
Menifee Mayor and City Council January 19, 2022
Professional Services Amendment No. 1 with CIVILPROS
DocuSign Envelope ID: 2048145E-A32C-4931-8A34-C0F2D39CFB55 DocuSign Envelope ID: 72449812-FD1F-456E-9467-C4669A3E8E8B Item Title: 10.23 CivilPros for the Scott/Bundy Canyon Road Widening Project Agreement Amendment Item Page Number: 48
Menifee Mayor and City Council January 19, 2022
Professional Services Amendment No. 1 with CIVILPROS
DocuSign Envelope ID: 2048145E-A32C-4931-8A34-C0F2D39CFB55 DocuSign Envelope ID: 72449812-FD1F-456E-9467-C4669A3E8E8B Item Title: 10.23 CivilPros for the Scott/Bundy Canyon Road Widening Project Agreement Amendment Item Page Number: 49
Menifee Mayor and City Council January 19, 2022
AMENDMENT NO. 2 TO
AGREEMENT BETWEEN CIVILPROS
AND THE CITY OF MENIFEE FOR CIP 20-01: BUNDY CANYON ROAD/SCOTT ROAD
WIDENING PROJECT PROFESSIONAL ENGINEERING SERVICES
This is Amendment No. 2 to that certain AGREEMENT for Professional Services Agreement (“Agreement”) made on September 18, 2019 between the City of Menifee (“City”) and CIVILPROS (“Consultant”) for CIP 20-01: BUNDY CANYON ROAD/SCOTT ROAD WIDENING PROJECT PROFESSIONAL ENGINEERING SERVICES which Amendment No. 2 is made and entered into on ______________, 2021 to extend the term of the services, increase the scope of work and compensation amount as indicated below:
1. Section 1.1, “Term of Services” is amended to read as follows:
1.1 Term of Services. The term of this Agreement shall begin on the September 18, 2019 and shall end on June 30, 2022 unless the term of the Agreement is otherwise terminated or extended as provided for in Section 8. The time provided to Consultant to complete the services required by this Agreement shall not affect the City's right to terminate the Agreement, as provided for in Section 8.
2. Section 1.6, “Covid-19 Safety” is included to read as follows:
1.6 Covid-19 Safety. If Consultant enters City property or meets in person with City employees during the performance of the Services, Consultant shall comply with all State, County, and local emergency orders, directives, protocols, and best practices related to the COVID-19 pandemic, including, but not limited to: (A) wearing facial coverings, (B) maintaining adequate physical distancing when possible, (C) regular hand washing, and (D) regular hand sanitizing.
3. Section 2, “Compensation” is amended to increase the maximum compensation by $52,919.00 (FIFTY TWO THOUSAND NINE HUNDRED NINETEEN DOLLARS AND ZERO CENTS), and is amended to read as follows:
Section 2. COMPENSATION.
City hereby agrees to pay Consultant a sum not to exceed $2,475,859.00 (TWO MILLION
FOUR HUNDRED SEVENTY FIVE THOUSAND EIGHT HUNDRED FIFTY NINE DOLLARS AND ZERO CENTS ) notwithstanding any contrary indications that may be contained in Consultant's proposal, for services to be performed and reimbursable costs incurred under this Agreement. In the event of a conflict between this Agreement and Exhibit A, regarding the amount of compensation, this Agreement shall prevail. City shall pay Consultant for services rendered pursuant to this Agreement at the time and in the manner set forth herein. The payments specified below shall be the only payments from City to Consultant for services rendered pursuant to this Agreement. Consultant shall submit all invoices to City in the manner specified herein. Except as specifically authorized in advance by City, Consultant shall not bill City for duplicate services performed by more than one person.
DocuSign Envelope ID: 2418D141-70EE-494E-A65A-61192F6B497D DocuSign Envelope ID: 5CE72330-D9D6-4F36-93EE-89923D8FA373 July 7th
Item Title: 10.23 CivilPros for the Scott/Bundy Canyon Road Widening Project Agreement Amendment Item Page Number: 50
Menifee Mayor and City Council January 19, 2022
Professional Services Amendment No. 2 with CIVILPROS
4. Section 3. Exhibit A, Scope of Services is supplemented to include Amendment No. 2 Scope of Work Additional Work, which supplement is attached as Exhibit A hereto. “Amendment No. 2 Scope of Work Additional Work (Amendment No. 2)” is not intended to replace the original Exhibit A to the Agreement, but instead to augment and increase the scope of work listed in the original Exhibit A to the Agreement.
5. All other terms and conditions of the Agreement remain in full force and effect.
DocuSign Envelope ID: 2418D141-70EE-494E-A65A-61192F6B497D DocuSign Envelope ID: 5CE72330-D9D6-4F36-93EE-89923D8FA373 Item Title: 10.23 CivilPros for the Scott/Bundy Canyon Road Widening Project Agreement Amendment Item Page Number: 51
Menifee Mayor and City Council January 19, 2022
Professional Services Amendment No. 2 with CIVILPROS
CITY OF MENIFEE CIVILPROS
_______________________________ _______________________________ Armando G. Villa, City Manager Basem Muallem, PE, IE Area Manager
Attest: ________________________________
Douglas Sawyer, Vice President
_______________________________
Sarah A. Manwaring, City Clerk
Approved as to Form:
_______________________________
Jeffrey T. Melching, City Attorney
DocuSign Envelope ID: 2418D141-70EE-494E-A65A-61192F6B497D DocuSign Envelope ID: 5CE72330-D9D6-4F36-93EE-89923D8FA373 Item Title: 10.23 CivilPros for the Scott/Bundy Canyon Road Widening Project Agreement Amendment Item Page Number: 52
Menifee Mayor and City Council January 19, 2022
Professional Services Amendment No. 2 with CIVILPROS
Amendment No. 2 – Exhibit A: Scope of Work Additional Work
DocuSign Envelope ID: 2418D141-70EE-494E-A65A-61192F6B497D DocuSign Envelope ID: 5CE72330-D9D6-4F36-93EE-89923D8FA373 Item Title: 10.23 CivilPros for the Scott/Bundy Canyon Road Widening Project Agreement Amendment Item Page Number: 53
Menifee Mayor and City Council January 19, 2022
Professional Services Amendment No. 2 with CIVILPROS
DocuSign Envelope ID: 2418D141-70EE-494E-A65A-61192F6B497D DocuSign Envelope ID: 5CE72330-D9D6-4F36-93EE-89923D8FA373 Item Title: 10.23 CivilPros for the Scott/Bundy Canyon Road Widening Project Agreement Amendment Item Page Number: 54
Menifee Mayor and City Council January 19, 2022
Professional Services Amendment No. 2 with CIVILPROS
DocuSign Envelope ID: 2418D141-70EE-494E-A65A-61192F6B497D DocuSign Envelope ID: 5CE72330-D9D6-4F36-93EE-89923D8FA373 Item Title: 10.23 CivilPros for the Scott/Bundy Canyon Road Widening Project Agreement Amendment Item Page Number: 55
Menifee Mayor and City Council January 19, 2022
DocuSign Envelope ID: 2418D141-70EE-494E-A65A-61192F6B497D DocuSign Envelope ID: 5CE72330-D9D6-4F36-93EE-89923D8FA373 Item Title: 10.23 CivilPros for the Scott/Bundy Canyon Road Widening Project Agreement Amendment Item Page Number: 56
Menifee Mayor and City Council January 19, 2022
Professional Services Amendment No. 2 with CIVILPROS
DocuSign Envelope ID: 2418D141-70EE-494E-A65A-61192F6B497D DocuSign Envelope ID: 5CE72330-D9D6-4F36-93EE-89923D8FA373 Item Title: 10.23 CivilPros for the Scott/Bundy Canyon Road Widening Project Agreement Amendment Item Page Number: 57
Menifee Mayor and City Council January 19, 2022
Professional Services Amendment No. 2 with CIVILPROS
DocuSign Envelope ID: 2418D141-70EE-494E-A65A-61192F6B497D DocuSign Envelope ID: 5CE72330-D9D6-4F36-93EE-89923D8FA373 Item Title: 10.23 CivilPros for the Scott/Bundy Canyon Road Widening Project Agreement Amendment Item Page Number: 58
Menifee Mayor and City Council January 19, 2022
Professional Services Amendment No. 2 with CIVILPROS
DocuSign Envelope ID: 2418D141-70EE-494E-A65A-61192F6B497D DocuSign Envelope ID: 5CE72330-D9D6-4F36-93EE-89923D8FA373 Item Title: 10.23 CivilPros for the Scott/Bundy Canyon Road Widening Project Agreement Amendment Item Page Number: 59
Menifee Mayor and City Council January 19, 2022
Professional Services Amendment No. 2 with CIVILPROS
DocuSign Envelope ID: 2418D141-70EE-494E-A65A-61192F6B497D DocuSign Envelope ID: 5CE72330-D9D6-4F36-93EE-89923D8FA373 Item Title: 10.23 CivilPros for the Scott/Bundy Canyon Road Widening Project Agreement Amendment Item Page Number: 60
Menifee Mayor and City Council January 19, 2022
AMENDMENT NO. 3 TO
AGREEMENT BETWEEN CIVILPROS
AND THE CITY OF MENIFEE FOR CIP 20-01: BUNDY CANYON ROAD/SCOTT ROAD
WIDENING PROJECT PROFESSIONAL ENGINEERING SERVICES
This is Amendment No. 3 to that certain AGREEMENT for Professional Services Agreement (“Agreement”) made on September 18, 2019 between the City of Menifee (“City”) and CIVILPROS (“Consultant”) for CIP 20-01: BUNDY CANYON ROAD/SCOTT ROAD WIDENING PROJECT PROFESSIONAL ENGINEERING SERVICES which Amendment No. 3 is made and entered into on ______________, 2022 to increase the scope of work and compensation amount as indicated below:
1. Section 2, “Compensation” is amended to increase the maximum compensation by $520,900.00 (FIVE HUNDRED TWENTY THOUSAND NINE HUNDRED DOLLARS AND ZERO CENTS), and is amended to read as follows:
Section 2. COMPENSATION.
City hereby agrees to pay Consultant a sum not to exceed $2,996,759.00 (TWO MILLION
NINE HUNDRED NINETY SIX THOUSAND SEVEN HUNDRED FIFTY NINE DOLLARS AND ZERO CENTS) notwithstanding any contrary indications that may be contained in Consultant's proposal, for services to be performed and reimbursable costs incurred under this Agreement. In the event of a conflict between this Agreement and Exhibit A, regarding the amount of compensation, this Agreement shall prevail. City shall pay Consultant for services rendered pursuant to this Agreement at the time and in the manner set forth herein. The payments specified below shall be the only payments from City to Consultant for services rendered pursuant to this Agreement. Consultant shall submit all invoices to City in the manner specified herein. Except as specifically authorized in advance by City, Consultant shall not bill City for duplicate services performed by more than one person.
2.Section 3. Exhibit A, Scope of Services is supplemented to include Amendment No. 3 Scope of Work Additional Work, which supplement is attached as Exhibit A hereto. “Amendment No. 3 Scope of Work Additional Work (Amendment No. 3)” is not intended to replace the original Exhibit A to the Agreement, but instead to augment and increase the scope of work listed in the original Exhibit A to the Agreement.
3. All other terms and conditions of the Agreement remain in full force and effect.
Item Title: 10.23 CivilPros for the Scott/Bundy Canyon Road Widening Project Agreement Amendment Item Page Number: 61
Menifee Mayor and City Council January 19, 2022
Professional Services Amendment No. 3 with CIVILPROS
CITY OF MENIFEE CIVILPROS
_______________________________ _______________________________ Armando G. Villa, City Manager Robert Morin, Assistant Vice President Attest: ________________________________
Douglas Sawyer, Vice President
_______________________________
Sarah A. Manwaring, City Clerk
Approved as to Form:
_______________________________
Jeffrey T. Melching, City Attorney
Item Title: 10.23 CivilPros for the Scott/Bundy Canyon Road Widening Project Agreement Amendment Item Page Number: 62
Menifee Mayor and City Council January 19, 2022
Professional Services Amendment No. 3 with CIVILPROS
Amendment No. 3 – Exhibit A: Scope of Work Additional Work (See following pages for additional detail)
Item Title: 10.23 CivilPros for the Scott/Bundy Canyon Road Widening Project Agreement Amendment Item Page Number: 63
Menifee Mayor and City Council January 19, 2022
Professional Services Amendment No. 3 with CIVILPROS
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Menifee Mayor and City Council January 19, 2022
Professional Services Amendment No. 3 with CIVILPROS
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Menifee Mayor and City Council January 19, 2022
Professional Services Amendment No. 3 with CIVILPROS
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Menifee Mayor and City Council January 19, 2022
Professional Services Amendment No. 3 with CIVILPROS
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Menifee Mayor and City Council January 19, 2022
Professional Services Amendment No. 3 with CIVILPROS
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Menifee Mayor and City Council January 19, 2022
Professional Services Amendment No. 3 with CIVILPROS
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Menifee Mayor and City Council January 19, 2022
Professional Services Amendment No. 3 with CIVILPROS
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Menifee Mayor and City Council January 19, 2022
Professional Services Amendment No. 3 with CIVILPROS
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Menifee Mayor and City Council January 19, 2022
Professional Services Amendment No. 3 with CIVILPROS
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Menifee Mayor and City Council January 19, 2022
Professional Services Amendment No. 3 with CIVILPROS
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Menifee Mayor and City Council January 19, 2022
Professional Services Amendment No. 3 with CIVILPROS
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Menifee Mayor and City Council January 19, 2022
Professional Services Amendment No. 3 with CIVILPROS
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Menifee Mayor and City Council January 19, 2022
Professional Services Amendment No. 3 with CIVILPROS
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Menifee Mayor and City Council January 19, 2022
Professional Services Amendment No. 3 with CIVILPROS
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Menifee Mayor and City Council January 19, 2022
Professional Services Amendment No. 3 with CIVILPROS
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Menifee Mayor and City Council January 19, 2022
Professional Services Amendment No. 3 with CIVILPROS
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Menifee Mayor and City Council January 19, 2022
Professional Services Amendment No. 3 with CIVILPROS
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Menifee Mayor and City Council January 19, 2022
Professional Services Amendment No. 3 with CIVILPROS
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Menifee Mayor and City Council January 19, 2022
Professional Services Amendment No. 3 with CIVILPROS
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Menifee Mayor and City Council January 19, 2022
Professional Services Amendment No. 3 with CIVILPROS
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Menifee Mayor and City Council January 19, 2022
Professional Services Amendment No. 3 with CIVILPROS
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Menifee Mayor and City Council January 19, 2022
Professional Services Amendment No. 3 with CIVILPROS
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Menifee Mayor and City Council January 19, 2022
Professional Services Amendment No. 3 with CIVILPROS
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Menifee Mayor and City Council January 19, 2022
Professional Services Amendment No. 3 with CIVILPROS
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Menifee Mayor and City Council January 19, 2022
Professional Services Amendment No. 3 with CIVILPROS
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Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
SUBJECT: Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021
MEETING DATE: January 19, 2022
TO: Mayor and City Council
PREPARED BY: Wendy Preece, Deputy Finance Director
REVIEWED BY: Rochelle Clayton, Assistant City Manager
APPROVED BY: Armando G. Villa, City Manager
-------------------------------------------------------------------------------------------------------------------------------
RECOMMENDED ACTION
1. Receive and file the Annual Comprehensive Financial Report (ACFR) and other audit reports for the fiscal year end June 30, 2021.
DISCUSSION
Pursuant to the California Government Code, the Finance Department is required to present to the City Council the City’s annual financial statement and financial audit for fiscal year ending June 30, 2021. The statements are referred to, collectively, as an Annual Comprehensive Financial Report (ACFR). The format and content requirements for ACFR’s are set forth in guidelines developed by the Government Finance Officers Associations of the United States and Canada and the California Society of Municipal Finance Officers.
The ACFR is divided into three major sections: the introductory section, the financial section, and the statistical section. The introductory section includes the letter of transmittal, a directory of City officials in office as of the report date and an organization chart. The financial section includes the independent auditors’ report, management’s discussion and analysis, and the financial statements, including notes to the financial statements. The statistical section includes financial trend information and demographic information about the City.
The financial statements were audited by the independent public accounting firm of Rogers, Anderson, Malody & Scott, LLP Certified Public Accountants, whose unmodified opinion is included within the financial section of the report. An unmodified opinion indicates that the financial statements present fairly the financial position of the City of Menifee as of June 30, 2021, and that the results of operations are in accordance with generally accepted accounting principles.
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 1
Menifee Mayor and City Council January 19, 2022
City of Menifee Staff Report
Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 January 19, 2022
7 8
0 The audited financial statements are for the City of Menifee, which is the primary government. The City does not have any component units, such as a Redevelopment Agency.
As part of the audit, the audit firm also reviewed and performed tests of the City’s internal accounting control procedures to determine if there are any material weaknesses or instances of non-compliance. Based on the audit, no material weaknesses were noted.
Two other reports are also included in the packet that support these findings: 1) the report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards; and 2) the Communication with those Charged with Governance (also referred to as the SAS-114 letter)
The City’s ACFR for the fiscal year end June 30, 2021 is attached to this staff report and is also available for review in the City Clerk’s Office or Finance Department. In addition, the ACFR will be distributed to the City Council, various federal and state government agencies, rating agencies and financial institutions, and will be made available on the City’s website for interested citizens.
STRATEGIC PLAN OBJECTIVE
Responsive and Transparent Community Government
FISCAL IMPACT
There is no fiscal impact associated with the recommended action.
ATTACHMENTS
1. Annual Comprehensive Financial Report (ACFR)
2. Independent Accountant’s Report
3. Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards
4. Communication with those Charged with Governance (also referred to as the SAS-114 letter)
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 2
Menifee Mayor and City Council January 19, 2022
ANNUAL COMPREHENSIVE
FINANCIAL REPORT
FISCAL YEAR ENDED JUNE 30, 2021
CITY OF MENIFEE
CALIFORNIA
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 3
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE, CALIFORNIA
ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED
JUNE 30, 2021
Prepared by:
Finance Department
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 4
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
TABLE OF CONTENTS
Page
Number
INTRODUCTORY SECTION
Letter of Transmittal ................................................................................................................................ i Listing of Elected Officials .................................................................................................................... vii Organizational Chart ........................................................................................................................... viii GFOA Award of Financial Reporting Achievement ................................................................................ x
FINANCIAL SECTION
INDEPENDENT AUDITOR’S REPORT ................................................................................................ 1
MANAGEMENT’S DISCUSSION AND ANALYSIS .............................................................................. 4
BASIC FINANCIAL STATEMENTS
Government - Wide Financial Statements
Statement of Net Position .......................................................................................................... 13
Statement of Activities ............................................................................................................... 14
Fund Financial Statements
Balance Sheet - Governmental Funds ...................................................................................... 15
Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position .......................................................................................................... 16
Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds ................................................................................................................. 17
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities ................................................................................................................................ 18
Notes to Financial Statements ....................................................................................................... 19 Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 5
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
TABLE OF CONTENTS
Page
Number
REQUIRED SUPPLEMENTARY INFORMATION
Budgetary Comparison Schedule - General Fund .......................................................................... 51
Budgetary Comparison Schedule - Development Impact Fees ...................................................... 52
Budgetary Comparison Schedule - Grants ..................................................................................... 53
Schedule of the City’s Proportionate Share of the Pension Plan’s Net Pension Liability and Related Ratios as of the Measurement Date ......................................................................... 54
Schedule of the Pension Plan’s Contributions .............................................................................. 55
Schedule of Changes in the Net OPEB Liability and Related Ratios ........................................... 56
Schedule of OPEB Contributions .................................................................................................... 57
Notes to the Required Supplementary Information ......................................................................... 58
COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES
Non-major Governmental Funds Descriptions ................................................................................ 59
Combining Balance Sheet - Non-major Governmental Funds ....................................................... 62
Combining Statement of Revenues, Expenditures and Changes .... in Fund Balances - Non-major Governmental Funds ................................................................ 66
Budgetary Comparison Schedules - Special Revenue Funds
Gas Tax ..................................................................................................................................... 70 SB 1 ........................................................................................................................................... 71 Measure A ................................................................................................................................. 72 Air Quality Management District ................................................................................................ 73 Landscape and Lighting Maintenance District .......................................................................... 74 Community Facilities District - Audie Murphy Ranch ................................................................ 75 Community Facilities District - Hidden Hills ............................................................................... 76 Community Facilities District - 2014-1 Town Center ................................................................. 77 Veteran’s Memorial ..................................................................................................................... 78 TUMF Fees ................................................................................................................................. 79 Community Facilities District - 2014-2 Commerce Point ............................................................ 80 Community Facilities District - 2015-2 Citywide ......................................................................... 81 Community Facilities District - 2017-1 Maintenance Services ................................................... 82 Public Education and Governmental Access ............................................................................. 83 County Service Areas (CSA) ...................................................................................................... 84
Budgetary Comparison Schedule - Capital Projects Fund
Capital Projects Fund ................................................................................................................ 85
Budgetary Comparison Schedule - Capital Projects Fund
Debt Service Fund ..................................................................................................................... 86 Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 6
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
TABLE OF CONTENTS
Page
Number
STATISTICAL SECTION
Statistical Section Descriptions ................................................................................................. 87 Net Position ............................................................................................................................... 88 Changes in Net Position ............................................................................................................ 90 Fund Balances of Governmental Funds .................................................................................... 92 Changes in Fund Balances of Governmental Funds ................................................................ 94 Major Revenues by Source - Governmental Funds .................................................................. 96 Assessed Value and Estimated Actual Value of Taxable Property ........................................... 97 Assessed Value and Estimated Actual Value of Taxable Property by Use Category ............... 98 Direct and Overlapping Property Tax Rates ............................................................................. 99 Principal Property Tax Payers ................................................................................................. 100 Property Tax Levies and Collections ....................................................................................... 101 Ratio of Outstanding Debt by Type ......................................................................................... 102 Ratio of General Bonded Debt Outstanding ............................................................................ 103 Direct and Overlapping Bonded Debt ..................................................................................... 104 Legal Debt Margin Information .................................. ..... ........................................................ 105 Demographic and Economic Statistics .................................................................................... 106 Principal Employers ................................................................................................................. 107 Full and Part-time City Employees by Program ...................................................................... 108 Capital Asset Statistics by Function/Program ......................................................................... 109 Operating Indicators by Function/Program ............................................................................. 110 Miscellaneous Statistics .......................................................................................................... 111 Taxable Sales by Category ..................................................................................................... 112 Top 25 Sales Tax Producers ................................................................................................... 113 Measure DD 1% Sales Tax – Revenues and Expenditures History …………………………... 114
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INTRODUCTORY SECTION
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Menifee Mayor and City Council January 19, 2022
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December 10, 2021
Honorable Mayor, Members of the City Council & Citizens of the City of Menifee, California
It is our pleasure to submit the Annual Comprehensive Financial Report (ACFR) for the City of Menifee (City) for the fiscal year ended June 30, 2021. The City annually issues a report on its financial position and activity, audited by an independent firm of certified public accountants. The City’s Finance Department prepared this report in accordance with generally accepted accounting principles (GAAP), as set forth by the Governmental Accounting Standards Board (GASB) and other sources. This CAFR also conforms to GASB Statement No. 34 financial report standards, providing the reader a dual-perspective financial report. The report contains a citywide view of all governmental activities, as well as a focus on the financial position and operating results of the City’s major funds.
Responsibility for the accuracy of the data, and the completeness and fairness of the presentations including disclosures, rests with the City. To provide a reasonable basis for making these presentations, management has established a comprehensive internal control framework that is designed both to protect the City’s assets from loss, theft, or misuse and to compile sufficient reliable information for the presentation of the City’s financial statements in conformity with accounting principles generally accepted in the United States of America.
Because the cost of internal controls should not outweigh their benefits, internal controls have been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, the enclosed data is accurate in all material respects and is reported in a manner designed to present fairly the financial position and results of operations of the various funds of the City. Also, all disclosures necessary to enable the reader to gain an understanding of the City’s financial activities have been included.
Rogers, Anderson, Malody & Scott, LLP, Certified Public Accountants, have issued an unmodified opinion on the City of Menifee’s financial statements for the year ended June 30, 2021. The independent auditor’s report is located at the front of the financial section of this report.
Generally accepted accounting principles requires that management provide a narrative introduction overview and analysis to accompany the basic financial statements in the form of Management’s Discussion and 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.
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Profile of the City of Menifee
The City of Menifee is located approximately 80 miles southeast of Los Angeles in the southwestern portion of Riverside County. The City incorporated on October 1, 2008 as a general law City. The City has more than 100,000 residents and covers an area of over 46 square miles. As a general law city, Menifee is governed by a five-member City Council operating under the Council/Manager form of government. Beginning with the November 2012 election, the Council consists of four Council Members elected by district who serve a four year term on a staggering basis, and a Mayor elected at large who serves a four year term. The City Council is responsible for passing City ordinances, resolutions, adopting the annual budget, appointing commissions and committees, and setting policy. The City Council appoints the City Attorney and City Manager who in turn appoints the heads of the various departments and other city staff.
The City provides a wide range of services including planning, building, public works, engineering, parks and recreation, police and general administrative activities. Services are also provided to the City and its citizens by contract and by the direct services of other government agencies and organizations. These services include animal control through Animal Friends of the Valley, ire protection through a contract with the County of Riverside, library services through the County of Riverside, water and sewer service through the Eastern Municipal Water District, franchise agreements for electricity service through Southern California Edison, natural gas through Sempra Utilities (So.
Cal. Gas), refuse collection through Waste Management, public transit through the Riverside Transit Agency, and cable service through state franchise agreements with Mediacom, Charter and Frontier. On July 1, 2020 the City of Menifee opened it’s own municipal Police Department.
Although the City is distinctively residential in character, the City has the potential for a strong economic base and staff is working diligently to enhance this opportunity.
Currently the major commercial bases are anchored by the Countryside Marketplace, Town Center Marketplace, Menifee Lakes Plaza, Shoppes at the Lakes and other key focal points near the I-215, Newport Road and McCall Blvd. Within the last fiscal year, the City welcomed several new businesses including Fairfield Inn & Suites, WellQuest Living, Little Tokyo Ramen and Paragon Framing. Expectations are high as the City looks to the future and anticipates the openings of new key retailers such as Dave’s Hot Chicken Wings, Wendy’s, Sharetea, Tacos & Tequila Mexican Restaurant, Crumbl Cookies, Poki Bowl, Savage Chef, Sleep Number, Luna Grill, Fishbone Seafood, Urbane Café, Burlington, Starbucks, Better Buzz Coffee Roasters and RV SuperCenter, to name just a few. Other future development projects expected include amenities such as entertainment venues, restaurants and other retail, offices, warehouses and lodging.
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Local Economy
Mirroring the national, state and regional economies, the City of Menifee’s economy has been affected by the worldwide Covid-19 pandemic. This has been evident with the unemployment rate increasing from the prior year from 4.0% to 10.1%. The City and local region have been enjoying a marked increase in new construction, which has led to increased assessed valuations. The number of building permits issued had an increase of 10.27% (from 6,147 to 6,778), while the number of planning applications increased by 12.93% (from 348 to 393).
Retail sales continued to experience strong growth through the second quarter of calendar year 2021 with receipts for local point of sale activity up 21.68% from the same period in the prior year. Bradley Burns Sales tax collections increased from $8,485,225 in fiscal year 2019-20 to $10,751,434 in fiscal year 2020-21, a 26.71% increase primarily due to the additional retail outlets opening and the increase in on-line sales due to the Covid-19 pandemic. Measure DD Sales Tax collections increased from $12,617,232 in fiscal year 2019-20 to $16,724,722 in fiscal year 2020-21, a 32.55% increase. This was the fourth full year of collection of this 1% additional sales tax that was passed by the voters in November 2016.
As part of the State of California’s Fiscal Year 11-12 Budget, the Governor signed Senate Bill 89 (SB 89), which shifted millions of Vehicle License Fee (VLF) revenues to fund state law enforcement grants. This legislation particularly impacted newly incorporated cities such as Menifee, which received a special allocation from VLF revenues. In the State of California budget for fiscal year 2017-18, SB 130 was introduced, signed and made into law. With SB 130 the City of Menifee’s annual VLF revenues were restored. In fiscal year 2019-20 the City received $7,156,803 and fiscal year 2020-21 the City received $7,745,487, an increase of 8.23%.
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Budget Process
The City’s operating budget and five-year capital improvement plan is adopted annually by the City Council no later than the close of the prior fiscal year and serves as the foundation for planning and controlling the City’s finances. The budget process begins early in spring and encompasses budget workshops with the public and City Council in order to promote transparency and to develop goals and objectives with the community’s best interest at heart. As the City of Menifee is still relatively new and growing, the primary goal for the City continues to be maintaining a good balance between augmenting City staff and services, and utilizing existing resources efficiently as well as minimizing costs as much as possible.
During the year, supplemental appropriations are made to the adopted budget and approved by City Council as necessary. The City Manager is authorized to approve operating transfers between departments within a fund without limits and may reduce expenditure appropriations within a fund as a method of fiscal control. The Finance Director may decrease revenue estimates to reflect changes in the economy within the fiscal year. Annually, staff prepares and presents mid-year budget adjustments to City Council for their approval. This process incorporates updating beginning fund balances per the annual audit report and adjusting the budget as dictated by changes in the City’s goals and objectives or due to economic or legislative changes.
Long-term Financial Planning
The City has adopted a fund balance policy in compliance with GASB Statement No. 54, which set the goal of maintaining general fund balance in an amount equal to twenty-five percent (25%) of general fund expenditures. 10% of these reserves are committed or set aside for use specifically in the case of the declaration of a state or federal emergency, or a local emergency as defined in Menifee Municipal Code
1.10.010; 10% of these reserves are assigned or set aside for use specifically for times of economic uncertainty and 5% is designated as unassigned. The City's Finance Committee, made up of two City Councilmembers and Finance staff, has made it a priority to work with staff to develop necessary and appropriate fiscal policies to guide the City's future operations. Early in FY 21/22, a fund balance policy update is going to be presented to the Finance Committee and if approved, then taken to the City Council to increase the required general fund balance to 35%. The Finance Committee and City staff will also be working together on the development of a long-term financial plan for the City.
Annually, during the City’s budget process, the City’s Engineering staff takes a five-year capital project budget to City Council for adoption. For fiscal year 2021-22 in the five- year capital project budget there was a total of 23 projects identified with FY 21/22 requested funding totaling $27,978,359, from various sources. These 23 projects consist of seven transportation projects, two traffic signal projects, one street rehabilitation project, five facility projects and five parks/trails projects. Construction on the Scott Road & I-215 Interchange began in fiscal year 2018-19 and was completed in Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 12
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the spring of 2021. Other future projects of note are the Holland Road Overpass which is fully funded and the construction is set to begin in the summer of 2022, the Bradley Road Bridge and the widening of Scott Road west to Bundy Canyon Road. As the Bradley Road Bridge and the Scott Road widening projects are vital to alleviate traffic congestion and improve safety, the City is aggressively seeking various methods of funding and is also looking into local, regional and state collaborations.
When the City of Menifee incorporated in 2008, the City adopted the County of Riverside’s Development Impact Fee (DIF) schedule and utilized that DIF schedule until FY 17/18. The City conducted its first development impact fee (DIF) study in FY 17/18.
This study was conducted to establish impact fees that are compatible to today’s construction costs and meet the future needs of the City. These fees were imposed on new construction and have brought much needed financial relief to the City by expanding current and future roadways and constructing new public facilities. City Council adopted that schedule of DIF fees on December 20, 2017 to be implemented with a two year phase-in beginning July 1, 2018. The City is currently in the process of updating the DIF study and should have the new fees ready for presentation to the City Council in the spring of 2022 and if adopted, the new fees will be implemented by July 1, 2022.
In April 2015 the City adopted its first city-wide Community Facility District (CFD) for facility maintenance and then adopted its second in 2017. These city-wide CFDs provide maintenance services such as street lighting, street sweeping, landscape maintenance and storm drainage maintenance to those residential and commercial projects that annex into the maintenance CFD. These maintenance CFDs assess only new construction to help minimize the fiscal impact in which expanding development impose on the City. The formation of these new CFDs allows the City to continue to provide quality services that our residents and community expect, and the level of services that make the City of Menifee one of the premier cities in Riverside County.
Awards and Acknowledgements
The Government Finance Officers Association (GFOA) of the United States and Canada awarded the City its Certificate of Achievement for Excellence in Financial Reporting for the Annual Comprehensive Financial Report (ACFR) for the fiscal year ending June 30, 2020. Since incorporation, the City has been bestowed this prestigious award every year that has been submitted for. In order to be awarded the Certificate of Achievement, a government must publish an easily readable and efficiently organized ACFR. This report must satisfy both generally accepted accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. The City believes that the current ACFR continues to meet the high standards associated with the Certificate of Achievement Program and we are submitting it to the GFOA to determine its eligibility for another certificate.
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The City's ACFR was prepared through the combined efforts of City staff. Special recognition is due to the Finance Department. With their support and coordination, the entire department assisted in closing the books for the year and ensuring timely and accurate reporting. Credit must also be given to the Mayor and City Council for their unfailing support for maintaining the highest standards of professionalism in the management of the City's finances.
The City's ACFR was prepared through the combined efforts of City staff. Special recognition is due to the Finance Department. With their support and coordination, the entire department assisted in closing the books for the year and ensuring timely and accurate reporting. Credit must also be given to the Mayor and City Council for their unfailing support for maintaining the highest standards of professionalism in the management of the City's finances.
Respectfully submitted,
Armando G. Villa Rochelle Clayton Wendy Preece
City Manager Deputy City Manager Deputy Finance Director Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 14
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CITY OF MENIFEE
Elected Officials
Bill Zimmerman – Mayor
Lesa A. Sobek – Mayor Pro Tem
Bob Karwin– Councilmember
Matthew Liesemeyer – Councilmember
Dean Deines – Councilmember
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Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 18
Menifee Mayor and City Council January 19, 2022
FINANCIAL SECTION
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Independent Auditor’s Report
To the Honorable Mayor and Members of the City Council
City of Menifee, California
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the governmental activities, each major fund, and the aggregate remaining f und information of the City of Menifee (the City), California, 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.
In our opinion, the accompanying financial statements present fairly, in all material respects, the respective financial position of the governmental 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 thereof for the year then ended in accordance with acc ounting principles generally accepted in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of Amer ica (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further descri bed in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Responsibilities of Management for the Financial Statements
The City’s 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 Amer ica, 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, co nsidered in the aggregate, that raise substantial doubt about the City’s abi lity to continue as a going concern for twelve months beyond the financial st atement date, including any currently known information that may raise substantial doubt shortly thereafter.
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Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS 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 t he override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misst atement of the financial statements, whether due to fraud or error, and design and perform audit proce dures 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 contro l relevant to the audit in order to design audit procedures that are appropriate in the circumst ances, but not for the purpose of expressing an opinion on the effectiveness of the City’s intern al control. Accordingly, no such opinion is expressed.
• Evaluate the appropriateness of accounting polic ies 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 condi tions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those char ged with governance regarding, among other matters, the planned scope and timing of the audit, significant audi t findings, and certain internal control–related matters that we identified during the audit.
Required Supplementary Information
Accounting principles generally accepted in the Unit ed States of America requi re that the required supplementary information, including the management’s discussion and analysis and the schedules listed in the table of contents, be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standar ds 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 procedure s to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of t he 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.
Emphasis of Matter
As discussed in Note 1 of the financial statements, the Town adopted the provisions of Governmental Accounting Standards Board Statement No. 84, Fiduciary Activities . Our opinions are not modified in respect to this matter.
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Supplementary Information
Our audit was conducted for the purpose of forming opi nions on the financial statements that collectively comprise the City’s basic financial statements. The su pplementary information, as listed in the table of contents, are presented for purposes of additional anal ysis and are not a required part of the basic financial statements.
The identified supplementary information is the re sponsibility of management and was derived from and relates 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 a nd other records used to prepare the basic financial statements or to the basic financial statements themselves, and other addi tional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the accompanying supplementary information is fairly st ated, in all material respects, in relation to the basic financial statements as a whole.
Other Information Included in the Annual Report
Management is responsible for the other information included in the annual report. The other information comprises the transmittal letter and statistical inform ation, but does not include the financial statements and our auditor's report thereon. Our opinions on the financial statements do not cover the other information, and we do not express an opinion or any fo rm of assurance thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other info rmation and the financial st atements, or the other information otherwise appears to be materially mi sstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 10, 2021 on our consideration of the City’s internal cont rol over financial reporting and on our tests of its compliance with certain provisions of laws, re gulations, 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 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 the City’s internal control over financial reporting and compliance.
San Bernardino, California
December 10, 2021
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CITY OF MENIFEE
MANAGEMENT’S DISCUSSION AND ANALYSIS
As management of the City of Menifee, California, we offer readers of the City’s financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended June 30, 2021. We encourage readers to consider the information presented here in conjunction with additional information beyond what we have furnished in our letter of transmittal, which can be found in the introductory section of this report, and with the City’s financial statements, which follow this discussion.
Financial Highlights
• The assets and deferred outflows of resources of the City exceeded its liabilities and deferred inflows or resources at June 30, 2021, by $366.1 million ( net position ). Of this amount, $54.9 million is restricted for public works, future capital projects and debt service. • As of June 30, 2021, the City’s governmental funds reported combined ending fund balances of $110.8 million.
• At June 30, 2021, the Unassigned fund balance for the General Fund was $39.34 million, $6.9 million was Committed for use in the event of an emergency, $750,000 was Committed for the construction of a future City Hall, $6.9 million was Assigned for economic uncertainty, as well as an additional and $2.5 million for various other assignments of fund balance. Council action in 2012 set fund balance requirements at Committed of 10%, Assigned of 10% and Unassigned Fund Balance of 5% for a total required Fund Balance of 25% of actual expenditures. The actual ending General Fund balance for fiscal year 2020-21 is 89.82% of fiscal year 2020-21 actual expenditures. The fund balance amounts are reviewed each year as part of the budget process.
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the City’s Basic Financial Statements. The City’s Basic Financial Statements consist of three components: 1) Government-wide Financial Statements, 2) Fund Financial Statements, and 3) Notes to the Basic Financial Statements.
This report also contains other supplementary information in addition to the basic financial statements themselves.
Government-wide Financial Statements
The government wide financial statements are designed to provide readers with a broad overview of the City’s finances, in a manner similar to a private-sector business.
The statement of net position presents information on all of the City’s assets and liabilities, with the difference between the two reported as net position. Over time increases in the net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating.
The statement of activities presents information showing how the government’s net position changed during the most recent fiscal year. All changes 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 (e.g., uncollected taxes and earned but unused vacation leave).
The government-wide financial statements present information about the functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) . The governmental activities of the City include general government, engineering and public works, public safety, and community services.
The Government-wide Financial Statements can be found in the Table of Contents under the heading Basic Financial Statements.
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Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The fund financial statements provide detailed information about the individual funds—not the City as a whole. Some funds are required to be established by State law. However, the City Council establishes many other funds to help it control and manage money for particular purposes or to show that it is meeting legal responsibilities for using certain taxes, grants, and other money. The City of Menifee uses primarily governmental funds and one fiduciary fund for accounting and reporting purposes.
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. Such information may be useful in evaluating a government’s near-term financing requirements.
Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’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 this comparison between governmental funds and governmental activities.
The City maintains various individual governmental funds. Information is presented separately in the Governmental Funds Balance Sheet, and in the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances, for the General Fund and the Development Impact Fees Fund, which are considered to be major funds, and are presented in individual columns in the fund statements. Data from other non-major governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements elsewhere in this report. The Governmental Fund Financial Statements can be found in the Table of Contents under the heading Basic Financial Statements.
Notes to the Basic Financial Statements
The Notes to the Basic Financial Statements provide additional information that is essential for a full understanding of the data provided in the government-wide and fund financial statements. The Notes to the Basic Financial Statements can be found in the Table of Contents under the heading Notes to Financial Statements.
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Government-wide Financial Analysis
The government-wide financial statements provide long-term and short-term information about the City’s overall financial condition. This analysis addresses the financial statements of the City as a whole.
For fiscal year ending June 30, 2021 the City of Menifee’s total net position increased 22.68 percent from $298.4 million for fiscal year ending 2020, to $366.1 million for fiscal year ending 2021. The largest portion of the City’s net position, $259.9 million or 71.00 percent, reflects its investment in capital assets (e.g. land, buildings, improvements other than buildings, equipment, infrastructure and construction in progress); less any related debt used to acquire those assets, which is still outstanding. The City uses these capital assets to provide services to citizens; consequently these assets are not available for future spending. Although the city’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources since the capital assets themselves cannot be used to liquidate these liabilities. Of the remaining total, $54.9 million is restricted to specifically stipulated spending agreements originated by law, contract or other agreements with external parties.
Summary of Net Position
June 30, 2021 and 2020
2020 2021
Assets:
Current and other assets 112,525,209$ 147,600,290$
Restricted assets 1,456,815 100,170
Capital assets 233,462,900 275,976,379
Total assets 347,444,924 423,676,839
Deferred Outflows of Resources:
OPEB related 509,891 832,440
Pension related 2,280,841 3,729,865
Deferrred charge on refunding - 949,608
Total deferred outflows of resources 2,790,732 5,511,913 Liabilities:
Other liabilities 25,604,140 36,360,828
Long-term liabilities 25,914,430 26,539,212
Total liabilities 51,518,570 62,900,040
Deferred Inflows of Resources:
Pension related 308,704 199,680
Total deferred inflows of resources 308,704 199,680
Net Position:
Net investment in capital assets 215,774,004 259,935,987 Restricted 46,249,694 54,935,538
Unrestricted 36,384,684 51,217,507
Total net position 298,408,382$ 366,089,032$
Activities
Governmental
As shown above, the City’s assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $366.1 million at June 30, 2021. Deferred outflows is defined as “a consumption of net assets by the government that is applicable to a future reporting period” and deferred inflows is defined as “an acquisition of net assets by the government that is applicable to a future reporting period”.
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For further information on the deferred outflows and inflows, see Notes 8 and 9 in the Basic Financial Statements section of this report.
Overall, Citywide governmental fund revenues for the fiscal year ending June 30. 2021, totaled $131.06.
This figure compares with the prior year total of $121.8 million, a 7.61 percent increase. o Total program revenues of $73.43 million were 56.03 percent of total revenues o Total general revenues of $57.63 million were 43.97 percent of total revenues.
Total related current year expenses accumulated to $67.8 million, compared with prior year expenses of $69.6 million. Public Safety expenses accounted for 41.07 percent of total current expenses. Engineering and Public Works expenses, which accounts for 23.97 percent of the total expenses, were used primarily for street maintenance costs and design costs. The next largest category, General Government, includes expenses related to the management and administration of the City, such as finances, management, and legal expense services, accounted for 20.92 percent of total expenses.
Summary of Changes in Net Position
For the Years Ended June 30, 2021 and 2020
2020 2021
Revenues
Program revenues:
Charges for services 24,835,036$ 30,631,445$
Operating grants and contributions 5,530,426 8,057,443 Capital grants and contributions 38,642,004 34,739,876 General revenues:
Sales taxes 21,102,457 27,476,156
Property taxes 22,361,021 24,076,949
Other taxes 7,280,734 5,286,956
Motor vehicle in-lieu (unrestricted) 73,963 73,963
Use of money & property 1,805,179 48,592
Other revenues 155,676 665,758
Total revenues 121,786,496 131,057,138
Expenses
General government 9,907,689 14,183,374
Public safety 29,559,843 27,853,563
Community development 5,253,832 5,408,287
Recreation services 5,432,196 3,546,483
Engineering and public works 18,331,483 16,251,977
Interest expense 1,108,218 569,679
Total expenses 69,593,261 67,813,363
Change in Net Position 52,193,235 63,243,775
Net position, beginning of year, restated 246,215,147 302,845,257 Net position, end of year 298,408,382$ 366,089,032$
Activities
Governmental
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Financial Analysis of the Government’s Funds
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance- related legal requirements.
Governmental Funds
The focus of the City’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information may be useful in assessing the City’s financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year.
Below, the Statement of Revenues, Expenditures, and Change in Fund Balances shows the governmental activities fund balances for the two fiscal years ending June 30, 2021 and June 30, 2020. Governmental funds are divided into two categories consisting of major and non-major funds. During the year ending June 30, 2021, four funds were classified as major governmental funds, consisting of the General Fund, the the Development Impact Fees Fund, the Grants Fund and the Debt Service Fund. All other funds were classified as non-major funds. A major fund is any individual fund that meets the criteria of the following combined two tests: 1) a fund is classified as a major fund if the corresponding total revenues, expenses or (expenditures), assets or liability for all funds of that category are at least 10 percent of total aggregate for all funds and; 2) at least 5 percent of the total aggregate for all funds combined. The General Fund is always classified as a major fund while all other funds must meet the qualifications to be a major fund.
Summary of Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds
For the Years Ended June 30, 2021 and 2020
Other Total
Development Grants Debt Service Governmental Governmental General Impact Fees Fund Fund Funds Funds
Total revenues 72,714,713$ 9,586,484$ 3,984,548$ 1,528$ 13,298,365$ 99,585,638$ Total expenditures 55,895,128 4,832,565 3,476,273 3,540,396 9,521,057 77,265,419 Revenues over (under)
expenditures 16,819,585 4,753,919 508,275 (3,538,868) 3,777,308 22,320,219 Total other financing
sources (uses) (2,220,964) - (227,834) 2,522,623 439,168 512,993 Net change in fund balances 14,598,621 4,753,919 280,441 (1,016,245) 4,216,476 22,833,212 Fund balances, beginning, restated 41,714,740 31,434,726 291,293 1,572,272 12,955,676 87,968,707 Fund balances, ending 56,313,361$ 36,188,645$ 571,734$ 556,027$ 17,172,152$ 110,801,919$ Fiscal Year 2020-21
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Other Total
Development Capital Projects Governmental Governmental
General Impact Fees Fund Funds Funds
Total revenues 65,185,364$ 6,170,630$ 1,513,608$ 14,273,825$ 87,143,427$ Total expenditures 58,789,409 7,428,368 12,450,355 15,135,139 93,803,271 Revenues over (under)
expenditures 6,395,955 (1,257,738) (10,936,747) (861,314) (6,659,844) Total other financing
sources (uses) 73,849 - 9,507,597 (9,581,446) -
Net Change in Fund Balances 6,469,804 (1,257,738) (1,429,150) (10,442,760) (6,659,844) Fund balances, beginning 35,136,272 32,692,464 5,554,885 21,131,993 94,515,614 Fund balances, ending 41,606,076$ 31,434,726$ 4,125,735$ 10,689,233$ 87,855,770$ Fiscal Year 2019-20
As of fiscal year ending 2021, the City’s total governmental funds reported a combined ending fund balance of $110.80 million, an increase of $22,833,212 (after $122,937 of the prior period adjustment) from the prior fiscal year. This increase is primarily due to an increase in revenues due to higher sales tax collections, property tax values and an increased level of development throughout the City and. The General Fund, which is the chief operating fund of the City, had a fund balance of $56,313,361 million as of June 30, 2021. This is an increase of $14,598,621 (after $108,664 of the prior period adjustment) over the prior year. This increase is due primarily as a result of an increase in sales tax, increased vehicle license fee revenues, increased franchise fee revenues and the number of development permits processed.
As mentioned earlier, the City’s total governmental funds ending fund balances, is $110.80 million of which $38,874,599 represents unassigned fund balance, which is available for spending at the government’s discretion. The remainder of fund balance, $71.9 million, is either restricted (to indicate that it be spent only for the specific purposes stipulated by constitution, enabling legislation or external providers); committed (can be used only for specific purposes determined by formal action of a government’s legislative body); or assigned (intended to be used for specific purposes but does not meet the higher criteria of restricted or committed).
As of June 30, 2021, unassigned fund balance of the General Fund is $39.32 million (of which $957,168 is for encumbrances for general operations), with an additional $6.9 million committed by Council action for emergencies and $750,000 for a future City Hall; $6.9 million is assigned for economic uncertainty, $285,513 for fire safety, $750,763 for general plan update, $1,345,486 for capital projects, and $75,000 for insurance deductibles.
Overall, General Fund revenues for the fiscal year ending June 30, 2021 totaled $72.7 million, compared to $65.2 million for the previous year. General Fund revenues can be broken down into six major categories shown below. By far, sales tax is the City’s single largest source of revenue. Sales tax revenues have increased 23.2 percent over prior year. Until fiscal year ending June 30, 2017 when the City’s 1% Measure DD sales tax initiative was passed by the voters, property taxes were the City’s largest source of revenue. Now property tax revenue is the City’s second largest source of revenue. Property taxes have increased 12.12 percent from prior year. Both property and sales tax revenues combined represent 60.13 percent of the City’s total General Fund revenues and have increased as a result of the City’s Measure DD 1% sales tax increase and growth in local property values. Development review fees (building, planning, fire and engineering permits and fees) increased by 14.41 percent from the prior year as new construction has regained momentum during fiscal year 2020-21.
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General fund expenditures totaled $55.9 million for the fiscal year ending June 30, 2021, compared to $58.8 million for the previous year. This decrease of $2.89 million was due primarily to fiscal year 2019-20 being a cross-over year with both Riverside County Sheriff charges and City charges for the initial set-up of the City’s own Municipal Police Department. The City of Menifee was still under contract with the County of Riverside for Sheriff services through June 30, 2020 but throughout fiscal year 2019/2020, the City was also hiring staff, purchasing equipment and converting the old city hall building into a police station for their first municipal police department which opened it’s doors as of July 1, 2020.
General Fund Budgetary Highlights
Total General Fund revenues were $5.83 million greater than expected primarily due to the increased Bradley Burns sales tax collections and the fourth year of collections of the City’s Measure DD 1% sales tax increase along with increased development. Interest income was lower than anticipated due to lower investment interest rates. Total General Fund expenditures were approximately $27,196,244 less than the final adopted budget mostly due to unfilled authorized positions.
The budget for capital items that were budgeted but incomplete at year end will be rolled into the subsequent year’s budget, while any operating budget carryovers will require council approval for addition to the next budget.
Capital Asset and Debt Administration
Capital Assets
The City’s investment in capital assets for its governmental activities as of June 30, 2021, totals $275.9 million, net of accumulated depreciation. This investment in capital assets includes land, buildings, system improvements, machinery and equipment, park facilities, roads, highways, and bridges.
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Summary of Changes in Capital Assets
June 30, 2021
Balance Balance
July 1, 2020 Additions Deletions June 30, 2021
Governmental activities:
Capital assets, not being depreciated:
Land 21,257,256$ 2,025,851$ -$ 23,283,107$
Right-of-way 415,800 - - 415,800
Construction in progress 30,818,727 10,043,027 (11,245,589) 29,616,165 Total capital assets, not being
depreciated 52,491,783 12,068,878 (11,245,589) 53,315,072 Capital assets,being depreciated:
Building and improvements 31,591,140 9,351 - 31,600,491 Equipment and furniture 2,841,898 239,720 - 3,081,618 Vehicles 4,635,278 1,777,451 - 6,412,729
Software and website design 662,930 109,309 - 772,239 Infrastructure 232,222,514 48,193,093 - 280,415,607
Total capital assets, being
depreciated 271,953,760 50,328,924 - 322,282,684
Less accumulated depreciation (86,658,705) (12,962,672) - (99,621,377) Total capital assets, being
depreciated, net 185,295,055 37,366,252 - 222,661,307 Governmental Activities Capital
Assets, net 237,786,838$ 49,435,130$ (11,245,589)$ 275,976,379$ Total capital assets increased 16.06 percent from prior year. During the current fiscal year, the City accepted $36.95 million in infrastructure improvements from development projects and had an additional $10.04 million in construction in progress.
During the current year the City also acquired new city vehicles totaling $1,777,451 for the Code Enforcement, Public Works, Police and Fleet Services departments with the largest vehicle purchase being a tractor drawn aerial fire truck for the Fire Department at a cost of $1,305,108.
Additional information on the City’s capital assets can be found within Note 4 – Capital Assets in the notes to the basic financial statements section of this report.
Long-term Debt
At the end of the current fiscal year, the City had total unsecured debt outstanding of $24.57 million.
During Fiscal Year 2011-12, the City issued $20 million in Certificates of Participation through the California Communities Total Road Improvement Program (TRIP). The proceeds from this financing have been used to fund various capital road improvement projects. The City’s TRIP debt was refinanced in September of 2020 at a reduced financing rate of 2.85% from the original rate of 4.99%. The TRIP debt is being repaid from a combination of Gas Tax and Measure “A” revenues. The current outstanding balance is $16,990,000.
In June of 2019 the City entered into a financing agreement between Western Riverside Council of Governments (WRCOG) and Southern California Edison (SCE) to purchase approximately 6,300 streetlights from SCE. The total original debt was $6,550,000 and was financed over a period of fifteen years. The current outstanding balance is $6,120,786.
Other debts include the City’s liabilities arising from employee’s accrued leave, or compensated absences of $1,456,019.
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Summary of Changes in Long-Term Liabilities
June 30, 2021
Balance Balance Long- Due Within
July 1, 2020 Increases Decreases June 30, 2021 Term One Year Transportation Revenues 17,025,000$ -$ (17,025,000) $ -$ -$ -$ COP, 2012B
Transportation Revenues
COP, 2020 - 17,885,000 (895,000) 16,990,000 16,315,000 675,000 663,896 - (663,896) - - -
Distribution Facilities
Financing Agreement 6,499,912 - (379,126) 6,120,786 5,760,610 360,176 Compensated Absences 825,050 1,976,124 (1,345,155) 1,456,019 873,611 582,408 Long-Term Liabilities Total 25,013,858$ 19,861,124$ (20,308,177)$ 24,566,805$ 22,949,221$ 1,617,584$ Unamortized Premium
Additional information on the City’s long-term debt can be found in Note 1 – Summary of Significant Accounting Policies and Note 6 – Long-Term Liabilities in the notes to the basic financial statements section of this report and Note 9 – Post Employment Benefits.
Requests for Information
This financial report is designed to provide a general overview of the City’s finances for all those with an interest in the government’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to Wendy Preece, Deputy Finance Director, City of Menifee, 29844 Haun Road, Menifee, CA 92586 or by telephone to (951) 672-6777. The entire CAFR is also available on the City’s website: www.cityofmenifee.us.
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 32
Menifee Mayor and City Council January 19, 2022
Basic Financial Statements
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 33
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
STATEMENT OF NET POSITION
JUNE 30, 2021
The accompanying notes are an integral part of these financial statements. -13-
Governmental
Activities
Assets:
Cash and investments 137,046,176$
Receivables:
Accounts 10,335,232
Accrued interest 41,423
Prepaid items 174,389
Restricted assets:
Cash with fiscal agent 100,170
Other current assets 3,070
Capital assets, not being depreciated 53,315,072
Capital assets, depreciated, net 222,661,307
Total Assets 423,676,839
Deferred Outflows of Resources:
OPEB related 832,440
Pension related 3,729,865
Deferred charge on refunding 949,608
Total Deferred Outflows of Resources 5,511,913
Liabilities:
Accounts payable 17,827,391
Accrued liabilities 1,338,856
Accrued interest 55,887
Deposits payable 10,593,370
Long-term liabilities, due within one year 1,617,584
Unearned revenue 6,545,324
Noncurrent liabilities:
Total OPEB liability 1,715,699
Net Pension liability 256,708
Long-term liabilities, due beyond one year 22,949,221
Total Liabilities 62,900,040
Deferred Inflows of Resources:
Pension related 199,680
Total Deferred Inflows of Resources 199,680
Net Position:
Net investment in capital assets 259,935,987
Restricted for:
Community development projects 5,239,814
Public works 49,139,697
Debt service 556,027
Unrestricted 51,217,507
Total Net Position 366,089,032$
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 34
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
STATEMENT OF ACTIVITIES
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
The accompanying notes are an integral part of these financial statements. -14-
Net
(Expenses)
Revenues and
Changes in
Net Position
Operating Capital
Charges for Contributions Contributions Governmental
Expenses Services and Grants and Grants Activities
Functions/Programs
Governmental activities:
General government 14,183,374$ 7,334,859$ 1,284,596$ -$ (5,563,919)$ Public safety 27,853,563 1,984,887 641,992 - (25,226,684) Community development 5,408,287 11,461,821 749,925 - 6,803,459 Recreation services 3,546,483 9,422 - - (3,537,061)
Engineering and public works 16,251,977 9,840,456 5,380,930 34,739,876 33,709,285 Interest on long-term debt 569,679 - - - (569,679)
Total governmental activities 67,813,363$ 30,631,445$ 8,057,443$ 34,739,876$ 5,615,401 General Revenues:
Taxes:
Property tax, levied for general purpose 24,076,949
Sales tax 27,476,156
Transient occupancy tax 506,967
Franchise taxes 3,653,129
Other taxes 1,126,860
Unrestricted:
Vehicle license fees 73,963
Use of money and property 48,592
Other 665,758
Total General Revenues 57,628,374
Change in net position 63,243,775
Net Position, beginning of year, as restated 302,845,257 Net Position, end of year 366,089,032$
Program Revenues
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 35
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
BALANCE SHEET – GOVERNMENTAL FUNDS
JUNE 30, 2021
The accompanying notes are an integral part of these financial statements. -15-
Debt Service
Fund Total
Non-Major Total
Development Governmental Governmental
General Impact Fees Grants Debt Service Funds Funds
Assets
Cash and investments 73,205,315$ 37,348,772$ 7,206,727$ 281,389$ 19,003,973$ 137,046,176$ Receivables:
Accounts, grants and taxes 7,872,908 - 513,222 - 1,949,102 10,335,232 Accrued interest 24,347 10,087 - 79 6,910 41,423
Prepaid items - - - 174,389 - 174,389
Other current assets 3,070 - - - - 3,070
Due from other funds 1,498,783 - - - - 1,498,783
Restricted assets:
Cash and investments with fiscal agents - - - 100,170 - 100,170 Total Assets 82,604,423$ 37,358,859$ 7,719,949$ 556,027$ 20,959,985$ 149,199,243$ Liabilities, Deferred Inflows of Resources,
and Fund Balances
Liabilities:
Accounts payable 14,411,924$ 1,170,214$ 573,956$ -$ 1,671,297$ 17,827,391$ Accrued liabilities 1,285,768 - 2,850 - 50,238 1,338,856 Deposits payable 10,593,370 - - - - 10,593,370
Due to other funds - - 26,085 - 1,472,698 1,498,783 Total Liabilities 26,291,062 1,170,214 602,891 - 3,194,233 31,258,400 Deferred Inflows of Resources:
Unavailable revenues - - 6,545,324 - 593,600 7,138,924 Total Deferred Inflows of Resources - - 6,545,324 - 593,600 7,138,924 Fund Balances:
Nonspendable:
Prepaid items - - - 174,389 - 174,389
Restricted for:
Community development projects - - - - 5,839,667 5,839,667 Engineering and public works - 36,188,645 571,734 - 11,779,465 48,539,844 Debt service - - - 381,638 - 381,638
Committed to:
Emergency contingency 6,892,510 - - - - 6,892,510 City hall 750,000 - - - - 750,000
Assigned to:
Economic uncertainty 6,892,510 - - - - 6,892,510 Fire safety 285,513 - - - - 285,513
Insurance 75,000 - - - - 75,000
General plan update 750,763 - - - - 750,763
Capital projects 1,345,486 - - - - 1,345,486
Unassigned 39,321,579 - - - (446,980) 38,874,599 Total Fund Balances 56,313,361 36,188,645 571,734 556,027 17,172,152 110,801,919 Total Liabilities, Deferred Inflows of
Resources and Fund Balances 82,604,423$ 37,358,859$ 7,719,949$ 556,027$ 20,959,985$ 149,199,243$ Special Revenue Funds
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 36
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF NET POSITION
JUNE 30, 2021
The accompanying notes are an integral part of these financial statements. -16-
110,801,919$
275,976,379
Certificates of Participation, 2020 (16,990,000)$
Debt Agreement 2019 (6,120,786)
Net pension liability (256,708)
Total OPEB liability (1,715,699)
Compensated absences (1,456,019) (26,539,212)
(55,887)
3,729,865
832,440
(199,680)
949,608
593,600
366,089,032$
Revenues reported as unavailable and unearned in the governmental funds are recognized in the statement of activities.
Pension related deferred outflows of resources
Deferred charge on refunding
Fund balances of governmental funds
Net position of governmental activities
Long-term liabilities and compensated absences that have not been included in the governmental fund activity:
Accrued interest payable for the current portion of interest due on bonds has not been reported in the governmental funds.
Deferred inflows and outflows of resources not due and payable, or owed and receivable, respectively, in the current period, are not reported in the funds:
OPEB related deferred outflows of resources
Pension related deferred inflows of resources
Amounts reported for governmental activities in the statement of net position are different because:
Capital assets net of depreciation have not been included as financial resources in governmental fund activity.
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 37
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES –
GOVERNMENTAL FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
The accompanying notes are an integral part of these financial statements. -17-
Debt Service
Fund Total
Non-Major Total
Development Governmental Governmental
General Impact Fees Grants Debt Service Funds Funds
Revenues:
Taxes 49,445,591$ -$ -$ -$ 22,946$ 49,468,537$ Licenses and permits 10,914,819 - - - - 10,914,819
Intergovernmental 7,843,701 - 3,984,548 - 7,318,659 19,146,908 Charges for services 3,999,653 - - - 5,431,418 9,431,071 Use of money and property 67,691 (14,450) - 1,528 8,842 63,611 Fines and forfeitures 329,487 - - - - 329,487
Developer participation - 9,600,934 - - - 9,600,934
Miscellaneous 113,771 - - - 516,500 630,271
Total Revenues 72,714,713 9,586,484 3,984,548 1,528 13,298,365 99,585,638 Expenditures:
Current:
General government 12,001,638 49,998 1,786,107 107,559 17,610 13,962,912 Public safety 29,134,252 - 37,899 - 2,143 29,174,294 Community development 5,292,778 - 85,002 - - 5,377,780 Parks and recreation 2,022,847 133,506 233,402 - 2,553,958 4,943,713 Engineering and public works 4,541,463 - 366,891 - 2,132,703 7,041,057 Capital outlay 2,902,150 4,649,061 966,972 - 4,814,643 13,332,826 Debt service:
Principal retirement - - - 2,585,843 - 2,585,843
Interest and fiscal charges - - - 540,059 - 540,059 Bond issuance costs - 306,935 306,935
Total Expenditures 55,895,128 4,832,565 3,476,273 3,540,396 9,521,057 77,265,419 Excess of revenues over(under)
expenditures 16,819,585 4,753,919 508,275 (3,538,868) 3,777,308 22,320,219 Other Financing Sources (Uses):
Transfers in 424,928 - - 2,009,630 3,075,159 5,509,717 Transfers out (2,645,892) - (227,834) - (2,635,991) (5,509,717) Refunding bonds issued - - - 17,885,000 - 17,885,000 Payment to refunded bond escrow agent - - - (17,372,007) - (17,372,007) Total Other Financing Sources
(Uses) (2,220,964) - (227,834) 2,522,623 439,168 512,993 Net Change in Fund Balances 14,598,621 4,753,919 280,441 (1,016,245) 4,216,476 22,833,212 Fund Balances, beginning of year,
as restated 41,714,740 31,434,726 291,293 1,572,272 12,955,676 87,968,707 Fund Balances, end of year 56,313,361$ 36,188,645$ 571,734$ 556,027$ 17,172,152$ 110,801,919$ Special Revenue Funds
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 38
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND
BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE FISCAL YEAR ENDED JUNE 30, 2021
The accompanying notes are an integral part of these financial statements. -18-
Net change in fund balances - total governmental funds 22,833,212$ Amounts reported for governmental activities in the statement of activities are different because:
Capital outlay 13,332,826
Additional costs capitalized 6,347,887
Contributed assets 31,471,500
Depreciation expense (12,962,672)
(17,885,000)
2,585,843$
Amoritzation of deferred charge (45,219)
17,372,007 19,912,631
15,599
(630,969)
1,324,938
(516,177)
Change in net position of governmental activities 63,243,775$ Cost of assets capitalized:
Principal repayments
Proceeds from refunding bonds issued
OPEB related net adjustment
Deferred inflows and outflows of resources not due and payable, or owed and receivable, respectively, in the current period, are not reported in the funds:
Pension related net adjustment
Govermental funds report proceeds from issuances of debt as other financing sources or uses, and do not report the respective long term liabilities. For the Statement of Acitivities these proceeds have been reclassified to long term debt in the Statement of Net Position. This is the amount of the debt procceds for the current year:
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 and reported as depreciation expense or allocated to the appropriate functional expense. The capital assets activity is reconciled as follows:
Repayment of bond principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net position.
Accrued interest for long-term liabilities. This is the change in accrued interest for the current period.
Compensated absences expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. This is the change in compensated absences for the current period.
Payments to refunded bond escrow
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 39
Menifee Mayor and City Council January 19, 2022
THIS PAGE INTENTIONALLY LEFT BLANK
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 40
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
-19-
I. SIGNIFICANT ACCOUNTING POLICIES
Note 1: Summary of Significant Accounting Policies
a. Description of the Reporting Entity
The City of Menifee, California (the City), was incorporated on October 1, 2008, under the laws of the State of California and enjoys all the rights and privileges applicable to a General Law City. The City is governed by an elected five-member board. As required by generally accepted accounting principles, these financial statements present the City (the primary government) and its component units. Component units are legally separate organizations for which the elected officials of the primary government are financially accountable. In addition, component units can be other organizations for which the nature and significance of their relationship with a primary government are such that exclusion would cause the reporting entity's financial statements to be incomplete. Under this definition, it is determined that there are no component units for this reporting entity, and these financial statements present the financial reporting entity that consisted solely of the City as the primary government. b. Government-Wide and Fund Financial Statements
The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Interfund services provided and used are not eliminated in the process of consolidation. Governmental activities are normally supported by taxes and intergovernmental revenues.
The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include: 1) charges to customers or applicants who purchase, use or directly benefit from goods, services or privileges provided by a given function or segment, and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues.
Separate financial statements are provided for governmental funds and fiduciary funds, even though the latter are excluded from the government-wide financial statements.
The fiduciary funds are reported on the accrual basis of accounting. Major individual governmental funds are reported as separate columns in the fund financial statements. c. Measurement Focus, Basis of Accounting and Financial Statement Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. 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.
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 41
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
-20-
Note 1: Summary of Significant Accounting Policies (continued) c. Measurement Focus, Basis of Accounting and Financial Statement Presentation (continued)
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. However, grant revenues are considered available within 6 months of the end of the current fiscal year. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due.
Property 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. All other revenue items are considered to be measurable and available only when cash is received by the government.
Governmental funds with assets and deferred outflows, liabilities and deferred inflows, revenues, or expenditures equal to at least 10% of their fund-type total, and at least 5% of the combined total of governmental funds and enterprise fund, as applicable, are required to be reported as a major fund. A governmental fund may also be presented as a major fund in the basic financial statements, event if it does not meet the size criteria just described, if the City’s officials believe that the fund is particularly important to the financial statement users (because of public interest, reporting consistency, or otherwise). The General Fund is always reported as a major fund.
The City reports the following major governmental funds:
The General Fund is the City’s primary operating fund. All general tax receipts and fee revenue not allocated by law, Council policy, or contractual agreement to other funds are accounted for in the General Fund. General Fund expenditures include operations traditionally associated with activities, which are not required to be accounted for or paid by another fund.
The Development Impact Fees (DIF) Fund – This fund is used to account for 9 separate DIF Funds. Fees are charged to new development to pay for future infrastructure costs such as roads, fire facilities, parks and libraries.
The Grants Fund accounts for all the various miscellaneous grants, in order to properly segregate and track grant funding. Grants are budgeted upon being awarded by a third-party agency and approved by the City Council.
The Debt Service Fund is used to track revenues and expenditures related to repayment of principal and interest costs associated with borrowing money for long-term obligations. In 2020, the City refunded the 2012 Certificates of Participation under the Total Road Improvement Program (TRIP) financing.
Currently, the City has only one outstanding debt accounted for in this fund.
Although this fund does not meet the criteria to be reported as major, due to the refunding in the current year the City determined it necessary for it to be presented as such.
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 42
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
-21-
Note 1: Summary of Significant Accounting Policies (continued)
d. Assets, Liabilities and Net Position or Equity
Cash and Investments
The City’s cash and cash equivalents are considered to be cash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition. For financial statement presentation purposes, cash and cash equivalents are shown as both restricted and unrestricted cash and investments in the governmental funds.
Investments are reported at fair value. The City’s policy is generally to hold investments until maturity or until market values equal or exceed cost. The State Treasurer’s Investment Pool operates in accordance with appropriate state laws and regulations. The reported value of the pool is the same as the fair value of the pool shares.
Receivables and Payables
Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either "due to/from other funds" (i.e., the current portion of interfund loans) or "advances to/from other funds" (i.e., the non-current portion of interfund loans). All other outstanding balances between funds are reported as "due to/from other funds." Advances between funds, as reported in the fund financial statements, are offset by a fund balance reserve account in applicable governmental funds to indicate that they are not available for appropriation and are not expendable available financial resources. All trade and property tax receivables are shown net of an allowance for uncollectable.
Capital Assets
Capital assets are defined by the government as assets with an initial, individual cost of more than $5,000 ($50,000 for infrastructure) and an estimated useful life in excess of two or more years. Assets are generally capitalized as a whole unit or system and not by the individual units that comprise the system. For example, a phone system is capitalized as one entire system and not on the individual components such as the phones, phone server, installation costs, and wiring.
Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at acquisition value at the date of acquisition.
Capital assets, which include property, plant, equipment and infrastructure assets (e.g., roads, bridges, sidewalks and similar items), are reported in the governmental activities column in the government-wide financial statements. In accordance with generally accepted accounting principles, the City has reported all general infrastructure assets.
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.
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 43
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
-22-
Note 1: Summary of Significant Accounting Policies (continued) d. Assets, Liabilities and Net Position or Equity (continued) Property, plant, equipment, and infrastructure of the primary government, as well as its component units, are depreciated using the straight-line method over the following estimated useful lives:
Assets Years $ Threshold
Equipment and furniture 2-10 5,000$
Vehicles 2-10 5,000
Software 2-10 5,000
Infrastructure 20-50 50,000
Compensated Absences
Vacation pay is payable to employees at the time a vacation is taken or upon termination of employment. Normally, an employee cannot accrue more than his regular annual entitlement. Payment for vacation not taken is payable at the end of the cumulative time.
Sick leave is payable when an employee is unable to work because of illness.
Upon termination an employee will not be paid for any unused sick leave, with the exception for the City Manager pursuant to employment contract.
All unpaid vacation and sick leave, if applicable, is recorded as a liability in the government-wide financial statements. Compensated absence liabilities are expected to be liquidated by the General Fund in future periods.
Deferred Outflows/Inflows of Resources
In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a 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 financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The government has only one type of item, which arises only under a modified accrual basis of accounting that qualifies for reporting in this category. Accordingly, the item, unavailable revenue, is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues from taxes and intergovernmental revenues. These amounts are unavailable and recognized as an inflow of resources in the period that the amounts become available.
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 44
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
-23-
Note 1: Summary of Significant Accounting Policies (continued)
d. Assets, Liabilities and Net Position or Equity (continued)
Net Position Flow Assumption
Sometimes the government 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 government’s policy to consider restricted – net position to have been depleted before unrestricted – net position is applied.
Fund Balance
In the fund financial statements, government funds report the following fund balance classification:
Nonspendable include amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact.
Restricted include amounts that are constrained on the use of resources by either (a) external creditors, grantors, contributors, or laws or regulations of other governments or (b) by law through constitutional provisions or enabling legislation.
Committed include amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the government’s highest authority, the City Council. The formal action that is required to be taken to establish, modify, or rescind a fund balance commitment is a resolution.
Assigned include amounts that are constrained by the government’s intent to be used for specific purposes, but are neither restricted nor committed. The City Manager is authorized to assign amounts to a specific purpose, which was established by the governing body in Resolution No. 2011-226 approved on June 21, 2011.
Unassigned include the residual amounts that have not been restricted, committed, or assigned to specific purposes in the General Fund, and deficit fund balances in any other funds.
An Emergency Contingency commitment of fund balance has been established through Resolution 21-1076. This reserve is set at a minimum of 12.5% of General Fund operating expenditures The specified uses include the declaration of a state or federal emergency or a local emergency as defined in Section
1.10.010 of the Menifee Municipal Code. City Council may, by majority vote of the members, change the amount of this commitment and/or the specific uses through adoption of resolution.
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 45
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
-24-
Note 1: Summary of Significant Accounting Policies (continued) d. Assets, Liabilities and Net Position or Equity (continued) An individual governmental fund could include nonspendable resources and amounts that are restricted or unrestricted (committed, assigned, or unassigned) or any combination of those classifications. Restricted amounts are to be considered spent when an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available and committed, assigned, then unassigned amounts are considered to have been spent when an expenditure is incurred for purposes for which amounts in any of those unrestricted fund balance classifications can be used.
The General Fund is the only fund that reports a positive unassigned fund balance amount. In other governmental funds it is not appropriate. However, if expenditures incurred for a specific purpose exceed the amounts that are restricted, committed, or assigned to those purposes, it may be necessary to report a negative unassigned fund balance in that fund.
Fund Balance Flow Assumptions
Sometimes the government 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 government’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.
Property Taxes
Property tax revenue is recognized on the modified accrual basis, that is, in the fiscal year for which the taxes have been levied providing they become available.
Available means then due or past due and receivable within the current period and collected within the current period or expected to be collected soon enough thereafter to be used to pay liabilities of the current period. The County of Riverside collects property taxes for the City. Tax liens attach annually as of 12:01 A.M. on the first day in January proceeding the fiscal year for which the taxes are levied. The tax levy covers the fiscal period July 1 to June 30. All secured personal property taxes and one-half of the taxes on real property are due November 1; the second installment is due February 1. All taxes are delinquent, if unpaid, on December 10 and April 10, respectively.
Unsecured personal property taxes become due on the first of March each year and are delinquent on August 31.
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 46
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
-25-
Note 1: Summary of Significant Accounting Policies (continued) d. Assets, Liabilities and Net Position or Equity (continued) Functional Classifications
Expenditures of the governmental funds are classified by function. Functional classifications are defined as follows:
General Government includes legislative activities, City Clerk, City Attorney, City Manager as well as management or supportive services across more than one functional area.
Public Safety includes those activities which involve police protection, fire protection and animal control services.
Community Development includes those activities which involve planning, building and safety and code enforcement.
Parks and Recreation includes activities which provide recreation, cultural and educational services.
Engineering and Public Works includes all maintenance, engineering and capital improvements which relate to streets and other public facilities. e. Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates. f. Pension Plan
For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Plan and additions to/deductions from the Plan’s fiduciary net position have been determined on the same basis. For this purpose, benefit payments (including refunds of employee contributions) are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value.
Generally accepted accounting principles requires that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used.
Valuation Date (VD) June 30, 2019
Measurement Date (MD) June 30, 2020
Measurement Period (MP) July 1, 2019 to June 30, 2020
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 47
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
-26-
Note 1: Summary of Significant Accounting Policies (continued) g. Other Postemployment Benefits (OPEB)
For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the City’s plan (OPEB Plan) and additions to/deductions from the OPEB Plan’s fiduciary net position have been determined on the same basis.
For this purpose, benefit payments are reported at fair value.
Generally accepted accounting principles require that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used:
Valuation Date (VD) June 30, 2019
Measurement Date (MD) June 30, 2020
Measurement Period (MP) July 1, 2019 to June 30, 2020
h. Implementation of New Pronouncement
Governmental Accounting Standards Board has issued Statement No. 84, Fiduciary Activities. The objective of this statement is to improve guidance regarding the identification of fiduciary activities for accounting and financial reporting purposes and how those activities should be reported. The City implemented this standard during the current year.
The remainder of this page left intentionally blank
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 48
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
-27-
II. STEWARDSHIP
Note 2: Stewardship, Compliance and Accountability
a. Budgetary Data
General Budget Policies
The City Council approves each year's budget prior to the beginning of the new fiscal year. Public hearings are conducted prior to its adoption by the City Council.
Supplemental appropriations, where required during the period, are approved by the City Manager. In most cases, expenditures may not exceed appropriations at the function level. At fiscal year-end, all operating budget appropriations lapse.
Encumbrances
Encumbrances are estimations of costs related to unperformed contracts for goods and services. These commitments are recorded for budgetary control purposes in the General, Special Revenue and similar governmental funds.
Encumbrances represent the estimated amount of the expenditure ultimately to result if unperformed contracts in process at year-end are completed. They do not constitute expenditures or estimated liabilities.
Budget Basis of Accounting
Budgets for all governmental funds are adopted on a basis consistent with generally accepted accounting principles (GAAP).
b. Deficit Fund Balances:
The following Nonmajor Special Revenues fund presents a fund balance deficit as of the year ended June 30, 2021:
Fund Fund Balance DeficitTUMF Fees (446,980)$
c. Excess of Expenditures over Appropriations:
In the fiscal year ended June 30, 2021, all expenditures were within appropriations.
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 49
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
-28-
III. DETAILED NOTES ON ALL FUNDS
Note 3: Cash and Investments
As of June 30, 2021, cash and investments were reported in the accompanying financial statements as follows:
Cash and investments 137,046,176$
Cash with fiscal agent 100,170
Total Cash and Investments 137,146,346$
Cash and investments held by the City consist of the following:
Cash on hand 9,606$
Deposits with financial institutions 35,294,153
Investments 101,842,587
Total Cash and Investments 137,146,346$
The City maintains a cash and investment pool that is available for use for all funds. Each fund type's position in the pool is reported on the combined balance sheet as cash and investments. The City has adopted an investment policy which authorizes it to invest in various investments. Interest income earned on pooled cash and investments is allocated quarterly to the various funds based on average daily cash balances.
Deposits with financial institutions
The California Government Code requires California banks and savings and loan associations to secure a City’s deposits by pledging government securities with a value of 110% of a City’s deposits. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of a City’s total deposits. The City Treasurer may waive the collateral requirement for deposits which are fully insured up to $250,000 by the FDIC. The collateral for deposits in federal and state chartered banks is held in safekeeping by an authorized Agent of Depository recognized by the State of California Department of Banking. The collateral for deposits with savings and loan associations is generally held in safekeeping by the Federal Home Loan Bank in San Francisco, California as an Agent of Depository.
These securities are physically held in an undivided pool for all California public agency depositors. Under Government Code Section 53655, the placement of securities by a bank or savings and loan association with an "Agent of Depository" has the effect of perfecting the security interest in the name of the local governmental agency.
Accordingly, all collateral held by California Agents of Depository are considered to be held for, and in the name of, the local governmental agency.
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 50
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
-29-
Note 3: Cash and Investments (continued)
Investments Authorized by the California Government Code and the Entity’s Investment Policy
The table below identifies the investment types that are authorized by the California Government Code and the City’s investment policy. The table also identifies certain provisions of the California Government Code (or the City’s investment policy, if more restrictive) that address interest rate risk, credit risk, and concentration of credit risk.
This table does not address investments of debt proceeds held by bond trustee that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City’s investment policy. *Maximum
*Maximum Investment
Investment Types *Maximum Percentage of In One
Authorized by State Law Maturity Portfolio Issuer
U.S. Treasury Bills 5 years 60% None
U.S. Treasury Notes 5 years 40% None
Federal Agency Securities 5 years 20% None
Asset Backed Securities 5 years 20% 5%
Negotiable Certificates of Deposit 5 years 20% None
Non-negotiable Certificates of Deposit 5 years None None Commercial Paper 270 days 10% None
Bankers acceptance 180 days 10% None
Local Agency Investment Fund N/A None $75 million
Passbook savings demand deposits 5 years None None
Mutual funds that invest only in State of CA N/A 20% None SEC-registered money market mutual funds N/A 20% None
Corporate Medium Term Notes 5 years 30% 5%
Supranational Obligations 5 years 30% 10%
* Based on state law requirements or investment policy requirements, whichever is more restrictive Investments Authorized by Debt Agreements
The above investments do not address investment of debt proceeds held by a bond trustee. Investments of debt proceeds held by a bond trustee are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the City’s investment policy.
Investments in State Investment Pool
The City is a voluntary 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. LAIF is overseen by the Local Agency Investment Advisory Board, which consists of five members, in accordance with State statute. The State Treasurer’s Office audits the fund annually. The fair value of the position in the investment pool is the same as the value of the pool shares.
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 51
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
-30-
Note 3: Cash and Investments (continued)
Fair Value
Generally Accepted Accounting Principles (GAAP), establishes fair value standards for investments in participating interest earning investment contracts, external investment pools, equity securities, option contracts, stock warrants and stock rights that have readily determinable fair values. Accordingly, the City reports its investments at fair value in the balance sheet. All investment income, including changes in the fair value of investments, is recognized as revenue in the operating statement.
Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. The City’s investment policy does not limit investments in Federal Agency Securities and Treasury Obligations to ratings issued by nationally recognized statistical rating organizations.
The City’s investment policy does restrict investments in Corporate Medium Term Notes (MTN’s) to those rated A or better by a nationally recognized statistical rating organization. Presented below are the City’s investments and the actual rating as of fiscal year end for each investment type:
1 year 1 year 3 years or less to 3 years to 5 years TotalCity investments:State investment pool (LAIF) 31,045,603$ -$ -$ 31,045,603$ Money market funds3,825 - - 3,825 U.S. Treasury Obligations98,980 460,320 21,362,862 21,922,162 Federal agency securities105,972 710,818 46,825,903 47,642,693 Corporate Medium Term Notes131,054 313,125 291,752 735,931 Supranational Obligations- - 149,134 149,134 Asset Backed Securities- 87,763 155,305 243,068 Held by bond trustee and escrow agent:Cash 100,171 - - 100,171 Total investments 31,485,605$ 1,572,026$ 68,784,956$ 101,842,587$ Investments Maturities
Custodial Credit Risk
The 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 deposits 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 to a transaction, a government will not be able to recover the value of investment or collateral securities that are in the possession of an outside party. The City’s investment in LAIF is unrated. As of June 30, 2021, $38,742,050 of the City’s deposits with financial institutions in excess of Federal Depository Insurance Corporation (FDIC) limits were held in collateralized accounts as required by the California Government Code.
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 52
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
-31-
Note 3: Cash and Investments (continued)
Concentration of Credit Risk
The City’s investment policy imposes restrictions on percentages that the City can invest in certain types of investments and with any one issuer for certain types of investments. Generally accepted accounting principles requires a separate disclosure if any single issuer comprises more than 5% of the total investment value. At June 30, 2021, the City’s had no single issuer of more than 5%. Investments guaranteed by the U.S. government and investments in mutual funds and external investment pools are excluded from this requirement.
Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. The City has elected to use the segmented time distribution method of disclosure for its interest rate risk.
As of June 30, 2021, the City had the following investments and remaining maturities:
Investment Type Amount
Minimum
legal rating Aaa Not rated
City investments:
State investment pool (LAIF) 31,045,603$ N/A -$ 31,045,603$ Money market funds 3,825 N/A - 3,825
U.S. Treasury Obligations 21,922,162 N/A 21,922,162 - Federal agency securities 47,642,693 N/A 47,642,693 - Corporate Medium Term Notes 735,931 A 735,931 -
Supranational Obligations 149,134 AA 149,134 -
Asset Backed Securities 243,068 AA 243,068 -
Held by bond trustee and escrow agent:
Cash 100,171 N/A 100,171 -
101,842,587$ 70,793,159$ 31,049,428$
Rating at year end
Fair Value Measurements
Generally accepted accounting principles establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. This hierarchy consists of three broad levels: Level 1 inputs consist of quoted prices (unadjusted) for identical assets and liabilities in active markets that a government can access at the measurement date, Level 2 inputs that are observable for an asset or liability, either directly or indirectly, and Level 3 inputs have the lowest priority and consist of unobservable inputs for an asset or liability.
The valuation technique used for Level 2 investments include "inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly". Level 2 inputs include: quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; interest rates and yield curves observable at commonly quoted intervals; implied volatilities; credit spreads, and market-corroborated inputs.
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 53
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
-32-
Note 3: Cash and Investments (continued)
Fair Value Measurements (continued)
The following table presents the balances of the assets measured at fair value on a recurring basis as of June 30, 2021:
Investments by Fair Value Hierarchy Total Level 1 Level 2 Level 3 City investments:
U.S. Treasury Obligations 21,922,162$ 20,925,644$ 996,518$ -$ Federal agency securities 47,642,693 - 47,642,693 -
Corporate Medium Term Notes 735,931 - 735,931 -
Supranational Obligations 149,134 - 149,134 -
Asset Backed Securities 243,068 - 243,068 -
Total Investments by Fair Value Hierarchy 70,692,988 20,925,644$ 49,767,344$ -$ Investments outside the Fair Value Hierarchy
City investments:
State investment pool (LAIF) 31,045,603
Money market funds 3,825
Held by bond trustee and escrow agent:
Cash 100,171
Total Investments 101,842,587$
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Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 54
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
-33-
Note 4: Capital Assets
Capital asset activity for the year ended June 30, 2021, was as follows:
Beginning Deletions/ Ending
Balance Additions Adjustments Balance
Governmental activities:
Capital assets, not being depreciated:
Land 21,257,256$ 2,025,851$ -$ 23,283,107$
Right-of-way 415,800 - - 415,800
Construction in progress 30,818,727 10,043,027 (11,245,589) 29,616,165 Total Capital Assets, Not Being
Depreciated 52,491,783 12,068,878 (11,245,589) 53,315,072 Capital assets, being depreciated:
Building and improvements 31,591,140 9,351 - 31,600,491 Equipment and furniture 2,841,898 239,720 - 3,081,618 Vehicles 4,635,278 1,777,451 - 6,412,729
Software and website design 662,930 109,309 - 772,239 Infrastructure 232,222,514 48,193,093 - 280,415,607
Total Capital Assets, Being Depreciated 271,953,760 50,328,924 - 322,282,684 Less accumulated depreciation:
Building and improvements (3,460,750) (1,417,202) - (4,877,952) Equipment and furniture (1,193,659) (321,786) - (1,515,445) Vehicles (1,351,268) (767,066) - (2,118,334)
Software and website design (426,237) (41,681) - (467,918) Infrastructure (80,226,791) (10,414,937) - (90,641,728) Total Accumulated Depreciation (86,658,705) (12,962,672) - (99,621,377) Total Capital Assets, Being Depreciated,
Net 185,295,055 37,366,252 - 222,661,307
Governmental Activities Capital Assets,
Net 237,786,838$ 49,435,130$ (11,245,589)$ 275,976,379$ Depreciation expense was charged to the following functions in the statement of activities:
Governmental Activities:
General government 92,691$
Public safety 976,537
Code enforcement 53,994
Recreation services 1,611,597
Engineering and public works 10,227,853
Total Depreciation Expense - Governmental Activities 12,962,672$ Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 55
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
-34-
Note 5: Operating Lease
As of June 2021, the City of Menifee has the following five (5) significant material leases:
- Menifee City Hall - Ten (10) year lease for main City Hall lease, beginning April 2019 through March 2029, subject to pre-negotiated annual increases. - Menifee Police Headquarters Buildings - Fifteen (15) year lease for main Police Headquarters (lease was for previously Menifee City Hall converted into the Menifee Police Headquarters in 2019). The original lease began April 2009 and has been extended through March 2024. The lease agreement calls for an annual rent increase based on the Cost of Living Index (CPI).
- Menifee Police Headquarters Vacant Land - 5-year lease for main City Hall lease, beginning July 1 2019 through March 2029. The lease agreement calls for an annual rent increase based on the Cost of Living Index (CPI).
- Menifee Police Headquarters Modular Buildings- (Women’s/Men’s Locker rooms) 60 month lease for two (2) modular buildings (men and women’s locker rooms), beginning April 2020 and ending March 2025.
- Menifee Police Substation- 60 month lease for commercial storefront site in Sun City used as Menifee PD substation, beginning January 2018 through December 2022, subject to annual rate adjustments.
The total minimum lease payments in aggregate for the year were $1,028,562. The future minimum lease payments until completed lease terms are as follows:
Year Ended June 30, Amount
2022 1,099,289$
2023 1,194,789
2024 1,192,190
2025 903,851
2026 929,238
Thereafter 3,064,816
Additionally, the City of Menifee has a few smaller leases representing eight (8) vehicle leases, and printers/scanners and postage machine equipment.
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Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 56
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
-35-
Note 6: Long-Term Liabilities
The following is a schedule of changes in long-term liabilities for the fiscal year ended June 30, 2021:
Long-term liabilties: Balance Additions Deductions Balance One Year Long-term debt:
17,025,000$ -$ (17,025,000) $ -$ -$
- 17,885,000 (895,000) 16,990,000 675,000
Unamortized Premium/Discount
Premium - TRIP 663,896 - (663,896) - -
Direct Borrowings:
Distribution Facilities Financing Agreement 2019 6,499,912 - (379,126) 6,120,786 360,176 Other long-term liability:
Compensated absences 825,050 1,976,124 (1,345,155) 1,456,019 582,408 Total long-term debt 25,013,858$ 19,861,124$ (20,308,177)$ 24,566,805$ 1,617,584$ Certificates of Participation, Series 2012B (TRIP)
Certificates of Participation, Series 2020 (TRIP)
Transportation Revenue Certificates of Participation Bonds, Series 2012B The 2012B Certificates of Participation Bonds were issued to finance the City’s design, acquisition, and construction roadway improvement projects. The bonds mature annually through 2042, in amounts ranging from $290,000 to $1,240,000. Interest rates vary from
2.0% to a maximum of 5.25% and are payable semiannually on December 1 and June 1.
These bonds were paid in full in the current year by the Transportation Revenue Certificates of Participation Bonds, Series 2020.
Transportation Revenue Certificates of Participation Bonds, Series 2020 The 2020 Certificates of Participation Bonds were issued to refund the 2012B Certificate of Participation Bonds. The bonds mature annually through 2035, in amounts ranging from $1,835,000 to $2,305,000. Interest rates vary from 0.435% to a maximum of 2.769% and are payable semiannually on December 1 and June 1. This transaction resulted in an economic gain of $1.8 million and a net savings in debt service costs of $4.3 million.
Assets irrevocably pledged as collateral for the bonded debt are all of the revenues and all money in the Pledged Tax Fund (the "Gas Tax Account" and the "Measure A Receipts Account”) and in the funds or accounts so specified and provided for in the 2020 Installment Sale Agreement.
In the Event of Default the Trustee may, by notice in writing to the City, declare the entire principal amount of the unpaid 2020 Installment Sale Payments and the accrued interest thereon to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable.
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 57
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
-36-
Note 6: Long-Term Liabilities (continued)
Transportation Revenue Certificates of Participation Bonds, Series 2020 (continued) At June 30, 2021, the outstanding balance of these bonds was $16,990,000.
The annual debt service requirements on these bonds are as follows:
Year Ending
June 30 Principal Interest Total
2022 675,000$ 405,702$ 1,080,702$
2023 675,000 401,754 1,076,754
2024 680,000 397,022 1,077,022
2025 690,000 390,487 1,080,487
2026 700,000 383,166 1,083,166
2027-2031 3,670,000 1,734,531 5,404,531
2032-2036 4,095,000 1,297,884 5,392,884
2037-2041 4,760,000 641,124 5,401,124
2042 1,045,000 33,837 1,078,837
Totals 16,990,000$ 5,685,507$ 22,675,507$
Certificates of Participation, Series 2020 TRIP
Distribution Facilities Financing Agreement 2019 – Direct borrowing:
On July 6, 2018, the City entered into a financing agreement to purchase Certain Southern California Edison Company Street Light Facilities. The agreement calls for the conveyance and sale of 6,310 LS-1 electric streetlights facilities. The term of the agreement is 15 years, expiring on 2034. Interest rate is set at 4.30% and debt payments are payable semiannually on December 1 and June 1.
The Collection Fund and the Rental Payment Subaccount established under the agreement, all securities entitlements, investment property and other financial assets now or hereafter credited to the Collection Fund and the Rental Payment Subaccount, all of Lessee’s and WRCOG’s rights in respect of the Collection Fund and the Rental Payment Subaccount, such securities entitlements, investment property and other financial assets therein, and all products, proceeds and revenues of and from any of the foregoing personal property as considered pledged collateral for the agreement.
In the Event of Default the lessor may, by notice in writing to the City, declare the entire principal amount of the unpaid 2019 Agreement and the accrued interest thereon to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable, lessor may terminate the Escrow Agreement and apply any proceeds in the Escrow Account to the Rental Payments scheduled to be paid hereunder.
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 58
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
-37-
Note 6: Long-Term Liabilities (continued)
Distribution Facilities Financing Agreement 2019 – Direct borrowing (continued):
At June 30, 2021, the outstanding balance of the agreement was $6,120,786.
The annual debt service requirements on these bonds are as follows:
Year Ending
June 30 Principal Interest Total
2022 360,176$ 259,363$ 619,539$
2023 375,830 243,709 619,539
2024 392,165 227,375 619,540
2025 409,209 210,330 619,539
2026 426,994 192,545 619,539
2027-2031 2,430,009 667,687 3,097,696
2032-2036 1,726,403 132,214 1,858,617
Totals 6,120,786$ 1,933,223$ 8,054,009$
Distribution Facilities Financing Agreement 2019
Compensated Absences
The City’s liability for vested and unpaid compensated absences (accrued vacation and sick pay) in the governmental activities has been accrued and amounts to $1,456,019 at June 30, 2021. These liabilities have been described in Note 1.
Note 7: Interfund Receivable, Payable and Transfers
Due to/from other funds balances at June 30, 2021, were as follows:
Grants Nonmajor
Special Revenue Governmental
Funds Fund Funds
Due From Other Funds:
General Fund 26,085$ 1,472,698$
These represent borrowings from other governmental funds to cover temporary cash deficit.
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 59
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
-38-
Note 7: Interfund Receivable, Payable and Transfers (continued) Transfers in and out for the year ended June 30, 2021 were as follows:
Transfers in Transfers out Amount
General Fund Nonmajor Governmental Funds (a) 197,094$
Grants Fund (a) 227,834
Debt Services Fund General Fund (b) 23,619
Nonmajor Governmental Funds (b) 1,986,011
Nonmajor Governmental Funds General Fund (c) 2,622,273
Nonmajor Governmental Funds (c) 452,886
Total transfers 5,509,717$
(a)
(b)
(c)
Transfers made from General and Nonmajor Governmental Funds to the Debt Services Fund were to pay for debt services.
Transfers made from Grants Fund and Nonmajor Governmental Funds to the General Fund were to fund frontline Police services from the COPS Grants and to fund fleet services.
Transfers made to fund Capital Projects throught the City.
Note 8: Pension Plan
A. General Information about the Pension Plan
Plan Description
All qualified permanent and probationary employees are eligible to participate in the Public Agency Cost-Sharing Multiple-Employer Defined Benefit Pension Plan (Plan or PERF C) administered by the California Public Employees’ Retirement System (CalPERS.) The Plan consists of a miscellaneous pool and a safety pool (also referred to as “risk pools”), which are comprised of individual employer miscellaneous and safety rate plans, respectively. Plan assets may be used to pay benefits for any employer rate plan of the safety and miscellaneous pools. Accordingly, rate plans within the safety or miscellaneous pools are not separate plans under generally accepted accounting principles. Individual employers may sponsor more than one rate plan in the miscellaneous or safety risk pools. The City sponsors two rate plans (two miscellaneous). Benefit provisions under the Plan are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plan regarding benefit provisions, assumptions and membership information that can be found on the CalPERS’ website, at www.calpers.ca.gov.
Benefits provided
CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries.
Benefits are based on years of credited service, equal to one year of full-time employment.
Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 5 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost-of-living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law.
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 60
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
-39-
Note 8: Pension Plan (continued)
A. General Information about the Pension Plan (continued)
Benefits provided (continued)
The Plan operates under the provisions of the California Public Employees’ Retirement Law (PERL), the California Public Employees’ Pension Reform Act of 2013 (PEPRA), and the regulations, procedures and policies adopted by the CalPERS Board of Administration. The Plan’s authority to establish and amend the benefit terms are set by the PERL and PEPRA, and may be amended by the California state legislature and in some cases require approval by the CalPERS Board.
The Plans’ provisions and benefits in effect at June 30, 2021 are summarized as follows:
Hire datePrior to January 1, 2013On or after January 1, 2013Benefit formula 2.7% @ 55 2% @ 62Benefit vesting schedule 5 years service 5 years serviceBenefit payments monthly for life monthly for lifeRetirement age 50 - 67 52 - 67Monthly benefits, as a % of eligible compensations 2.0% to 2.7% 1.0% to 2.5%Required employee contribution rates 7.956% 7.250%Required employer contribution rates 15.037% 7.874% Contributions
Section 20814(c) of the California Public Employees’ Retirement Law (PERL) requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through CalPERS’ annual actuarial valuation process.
For public agency cost-sharing plans covered by either the Miscellaneous or Safety risk pools, the Plan’s actuarially determined rate is based on the estimated amount necessary to pay the Plan’s allocated share of the risk pool’s costs of benefits earned by employees during the year, and any unfunded accrued liability. The employer is required to contribute the difference between the actuarially determined rate and the contribution rate of employees.
Employer contribution rates may change if plan contracts are amended. Payments made by the employer to satisfy contribution requirements that are identified by the pension plan terms as plan member contribution requirements are classified as plan member contributions.
Employer Contributions to the Plan for the fiscal year ended June 30, 2021 were $2,053,455.
The actual employer payments of $1,089,277 made to CalPERS by the City during the measurement period ended June 30, 2020 differed from the City’s proportionate share of the employer’s contributions of $460,156 by $629,121, which is being amortized over the expected average remaining service lifetime in the Public Agency Cost-Sharing Multiple Employer Plan.
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 61
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
-40-
Note 8: Pension Plan (continued)
B. Net Pension Liability
The City’s net pension liability for the Plan is measured as the total pension liability, less the pension plan’s fiduciary net position. The net pension liability of the Plan is measured as of June 30, 2020, using an annual actuarial valuation as of June 30, 2019 rolled forward to June 30, 2020 using standard update procedures. A summary of principal assumptions and methods used to determine the net pension liability is as follows.
Actuarial Methods and Assumptions Used to Determine Total Pension Liability Valuation Date June 30, 2019
Measurement Date June 30, 2020
Actuarial Cost Method Entry Age Normal
Asset Valuation Method: Market Value of Assets
Actuarial Assumptions:
Discount Rate 7.15%
Inflation 2.50%
Salary Increase Varies by Entry Age and Service
Mortality Rate Table (1) Derived using CalPERS' membership data for all funds
Post Retirement Benefit Increase The lesser of contract COLA or 2.5% until Purchasing Power Protection Allowance floor on
purchasing power applies, 2.50% thereafter
(1) The mortality table used was developed based on CalPERS’ specific data. The probabilities of mortality are based on the 2017 CalPERS Experience Study for the priod from 1997 to 2015. Pre-retirement and Post- retirement mortality rates include 15 years of projected mortality improvement using 90% of Scale MP-2016 published by the Society of Actuaries. For more details on this table, please refer to the CalPERS Experience Study and Review of Actuarial Assumptions report from December 2017 that can be found on the CalPERS website.
All other actuarial assumptions used in the June 30, 2019 valuation were based on the results of an actuarial experience study for the period from 1997 to 2015, including updates to salary increase, mortality and retirement rates. The Experience Study report can be obtained at CalPERS’ website, at www.calpers.ca.gov.
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 62
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
-41-
Note 8: Pension Plan (continued)
B. Net Pension Liability (continued)
Long-term Expected Rate of Return
The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.
In determining the long-term expected rate of return, CalPERS took into account both short- term and long-term market return expectations as well as the expected pension fund cash flows. Using historical returns of all the funds’ asset classes, expected compound (geometric) returns were calculated over the short-term (first 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 rate of return was then set equal to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses.
The expected real rates of return by asset class are as follows:
Asset Class1New Strategic AllocationReal Return Years 1 - 102Real Return Year 11+3Global 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 Estate 13.0% 3.75% 4.93%Liquidity 1.0% 0.00% (0.92%)Total100.0%1In 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 equity securities and global debt securities.2 An expected inflation of 2.0% used for this period3 An expected inflation of 2.92% used for this period Change of Assumptions
The Plan adopted a new amortization policy effective with the 2019 actuarial valuation. The new amortization policy shortens the period over which actuarial gains and losses are amortized from 30 years to 20 years with the payments computed as a level dollar amount. In addition, the new policy does not utilize a five-year ramp-up and ramp-down on UAL bases attributable to assumption changes and non-investment gains/losses. The new policy also does not utilize a five-year ramp-down on investment gains/losses. These changes apply only to new UAL bases established on or after June 30, 2019.
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 63
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
-42-
Note 8: Pension Plan (continued)
B. Net Pension Liability (continued)
Discount Rate
The discount rate used to measure the total pension liability for PERF C 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.
Pension Plan Fiduciary Net Position
Information about the pension plan’s assets, deferred outflows of resources, liabilities, deferred inflows of resources, and fiduciary net position are presented in CalPERS’ audited financial statements, which are publicly available reports that can be obtained at CalPERS’ website, at www.calpers.ca.gov. The plan’s fiduciary net position and additions to/deductions from the plan’s fiduciary net position have been determined on the same basis used by the pension plan, which is the economic resources measurement focus and the accrual basis of accounting. Benefits and refunds are recognized when due and payable in accordance with the terms of the plan. Investments are reported at fair value.
C. Proportionate Share of Net Pension Liability
The following table shows the Plan’s proportionate share of the net pension liability over the measurement period.
Plan Total
Pension Liability
(a)
Plan Fiduciary Net
Position
(b)
Plan Net Pension
Liability
(c) = (a) - (b)
Balance at: 6/30/2019 (VD) 8,073,102$ 8,049,504$ 23,598$ Balance at: 6/30/2020 (MD) 10,555,712 10,299,004 256,708 Net changes during 2019-2020 2,482,610$ 2,249,500$ 233,110$ Increase (Decrease)
Valuation Date (VD), Measurement Date (MD).
The City’s proportion of the net pension liability was determined by CalPERS using the output from the Actuarial Valuation System and the fiduciary net position, as provided in the CalPERS Public Agency Cost-Sharing Allocation Methodology Report, which is a publicly available report that can be obtained at CalPERS’ website, at www.calpers.ca.gov.
The City’s proportionate share of the net pension liability for the Miscellaneous Plan as of the June 30, 2019 and 2020 measurement dates was as follows:
Proportion - June 30, 2019 0.00059%
Proportion - June 30, 2020 0.00609%
Change - Increase (Decrease) 0.00550%
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 64
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
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Note 8: Pension Plan (continued)
C. Proportionate Share of Net Pension Liability (continued) Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate
The following presents the City’s proportionate share of the net pension liability of the Plan as of the measurement date, calculated using the discount rate of 7.15 percent, as well as what the net pension liability would be if it were calculated using a discount rate that is 1 percentage-point lower (6.15 percent) or 1 percentage-point higher (8.15 percent) than the current rate:
Discount Rate - 1%
(6.15%)
Current Discount
Rate (7.15%)
Discount Rate + 1%
(8.15%)
Net Pension Liability
(Asset) 1,661,416$ 256,708$ (903,958)$
Subsequent Events
There were no subsequent events that would materially affect the results presented in this disclosure.
Amortization of Deferred Outflows and Deferred Inflows of Resources Under GASB 68, gains and losses related to changes in total pension liability and fiduciary net position are recognized in pension expense systematically over time.
The first amortized amounts are recognized in pension expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to pensions and are to be recognized in future pension expense.
The amortization period differs depending on the source of the gain or loss:
Net difference between
projected and actual earnings
on pension plan investments
5 year straight-line amortization
All other amounts Straight-line amortization over the expected average remaining services lives (EARSL) of all members that
are provided with benefits (active, inactive and retired) as of the beginning of the measurement period
The expected average remaining service lifetime (EARSL) is calculated by dividing the total future service years by the total number of plan participants (active, inactive, and retired) in the Public Agency Cost-Sharing Multiple-Employer Plan (PERF C).
The EARSL for PERF C for the measurement period ending June 30, 2020 is 3.8 years, which was obtained by dividing the total service years of 548,581 (the sum of remaining service lifetimes of the active employees) by 145,663 (the total number of participants: active, inactive, and retired) in PERF C. Inactive employees and retirees have remaining service lifetimes equal to 0. Total future service is based on the members’ probability of decrementing due to an event other than receiving a cash refund.
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 65
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
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Note 8: Pension Plan (continued)
D. Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions
As of the start of the measurement period (July 1, 2019), the City’s net pension liability was $23,598. For the measurement period ending June 30, 2020 (the measurement date), the City incurred a pension expense of $1,178,517.
As of June 30, 2021, the City has deferred outflows and deferred inflows of resources related to pensions as follows:
Deferred Outflows of ResourcesDeferred Inflows of ResourcesChanges of Assumptions -$ 1,831$ Differences between expected and actual experience 13,229 - Differences between Projected and Actual Investment Earnings 7,626 - Differences between Employer's Contributionsand Proportionate Share of Contributions 1,014,807 - Change in Employer's Proportion 190,748 197,849 Pension Contributions Made Subsequent toMeasurement Date - Total 3,729,865$ 199,680$ 2,503,455 The amounts above are net of outflows and inflows recognized in the 2019-20 measurement period expense. Contributions subsequent to the measurement date of $2,503,455 reported with deferred outflows of resources will be recognized as a reduction of the net pension liability in the upcoming fiscal year. Other amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recognized in future pension expense as follows:
Fiscal Year Ended June 30:Deferred Outflows/(Inflows) of Resources, Net2022 489,642$ 2023 353,372 2024 180,057 2025 3,659 2026 - Thereafter - E. Payable to the Pension Plan
At June 30, 2021, the City reported a payable of $318,106 for the outstanding amount of contributions to the pension plan required for the year then ended.
F. Upcoming Changes to the City’s Net Pension Liability
As of July 2020, the City has started making payments towards the safety pool for their police force. The liability in the current year is expected to increase in the following years due to this new addition. No proportionate share of the safety pool has been calculated as of June 30, 2021.
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 66
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
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Note 9: Other Post-Employment Benefits
Plan Description
The City has established a single-employer Retiree Healthcare Plan (HC Plan). This coverage is available for employees who satisfy the requirements for retirement under the California Public Employees Retirement System (PERS), which is age 50 or older with at least five years of State or public agency service. The healthcare coverage provided by PERS meets the definition of an Other Post Employment Benefit (OPEB) as described in GASB Statement No. 45. Medical plan benefits are provided through PERS, as permitted by the Public Employees’ Medical and Hospital and Care Act (PEMHCA). A separate financial report is not prepared for the HC Plan.
Employees Covered
As of the June 30, 2019 actuarial valuation, the following current and former employees were covered by the benefit terms under the HC Plan:
Active employees 186
Inactive employees or beneficiaries currently receiving benefits 2 Total 188
Contributions
The HC Plan and its contribution requirements are established by Memoranda of Understanding with the applicable employee bargaining units and may be amended by agreements between the City and the bargaining units. For the fiscal year ended June 30, 2021, the City’s cash contributions were $2,907 in payments for benefits.
Total OPEB Liability
The City’s net OPEB liability was measured as of June 30, 2019 and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation dated June 30, 2019, based on the following actuarial methods and assumptions:
Discount Rate 2.20%
Inflation 2.75%
Salary Increases 2.75% per year
Mortality Rate
2009 and 2017 CalPERS Mortality
for Active Miscellaneous and Safety
Employees, respectively
Pre-Retirement Turnover
Healthcare Trend Rate 4.0% per year
Discount Rate
The discount rate used to measure the total OPEB liability was 2.20% percent.
Change of Assumptions
The discount rate changed from 3.50% to 2.20% for the measurement date June 30, 2020.
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 67
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
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Note 9: Other Post-Employment Benefits (continued)
Changes in OPEB Liability
The changes in the total OPEB liability for the HC Plan are as follows:
Total OPEB
Liability
Balance at June 30, 2020
(Measurement Date June 30, 2019) 876,974$
Changes recognized for the measurement period:
Service Cost 449,840
Interest on the Total OPEB Liability 38,328
Changes of assumptions 364,149
Plan experience differences (1,232)
Contributions - employer -
Net investment income -
Benefit payments (12,360)
Net Changes 838,725
Balance at June 30, 2021
(Measurement Date June 30, 2020) 1,715,699$
Sensitivity of the Total OPEB Liability to Changes in the Discount Rate The following presents the total OPEB liability of the City if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 2020:
1% Decrease
(1.20%)
Current Discount
Rate (2.20%)
1% Increase
(3.20%)
Total OPEB Liability 2,090,175$ 1,715,699$ 1,422,058$ Sensitivity of the Total OPEB Liability to Changes in the Health Care Cost Trend Rates The following presents the total OPEB liability of the City if it were calculated using health care cost trend rates that are one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 2020:
1% Decrease
Current Healthcare
Cost Trend Rates 1% Increase
Total OPEB Liability 1,342,451$ 1,715,699$ 2,291,268$ Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 68
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
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Note 9: Other Post-Employment Benefits (continued)
OPEB Plan Fiduciary Net Position
The City is not prefunding with an OPEB trust. Plan Fiduciary Net Position was $0 at June 30, 2021. The City does not have assets accumulated in a trust that meets the criteria of GASB 75 to pay related benefits.
Recognition of Deferred Outflows and Deferred Inflows of Resources Gains and losses related to changes in total OPEB liability and fiduciary net position are recognized in OPEB expense systematically over time.
Amounts are first recognized in OPEB expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to OPEB and are to be recognized in future OPEB expense. The City determined that it was not reasonable to rerun prior valuations under GASB 75. Therefore, the transition approach was used as provided in GASB 75, Paragraph 244. This means that there are no deferred inflows/outflows in the first year of implementation of GASB 75 with the exception of employer contributions after the measurement date.
OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB For the fiscal year ended June 30, 2021, the City recognized OPEB expense of $529,327.
The City reported deferred outflows of resources related to OPEB from the following sources:
Deferred Deferred
Outflows Inflows
of Resources of Resources
OPEB contributions subsequent to
the measurement date 2,907$ -$
Changes of assumptions 747,970 -
Experience differences 81,563 -
Total 832,440$ -$
The $2,907 reported as deferred outflows of resources related to contributions subsequent to the June 30, 2020 measurement date will be recognized as a reduction of the net OPEB liability during the fiscal year ending June 30, 2022. Other amounts reported as deferred outflows and deferred inflows of resources related to OPEB will be recognized in future OPEB expense as follows:
Fiscal Year Ended
June 30:
Deferred
Outflows/(Inflows)
of Resources
2022 41,159$
2023 41,159
2024 41,159
2025 41,159
2026 41,159
Thereafter 623,738
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 69
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
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Note 10: Risk Management
The City of Menifee (“City”) is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; and natural disasters for which the Member Entity obtains insurance coverage.
The City is a member of the Public Agency Risk Sharing Authority of California-PARSAC (Authority), a joint powers authority, which provides joint protection programs for public entities covering automobile, general liability, errors and omission losses, workers’ compensation, and property claims. Under the program, the City has a $ 25,000 retention limit similar to a deductible with the Authority being responsible for losses above that amount up to $1 million. The Authority has additional coverage of $49 million in excess of its $1 million retention limit through affiliated risk management authorities. The Authority also provides one billion dollars aggregate per occurrence property coverage to its members with such coverage provided by purchased insurance. There were no settlements in excess of the insurance coverage in any of the three fiscal years.
Liabilities of the City are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. Liabilities include an amount for claims that have been incurred but not reported (IBNRs). The result of the process to estimate the claims liability is not an exact amount as it depends on many complex factors, such as inflation, changes in legal doctrines, and damage awards. Accordingly, claims are reevaluated periodically to consider the effects of economic and social factors. The estimate of the claims liability also includes amounts for incremental claim adjustment expenses related to specific claims and other claim adjustment expenses regardless of whether allocated to specific claims. Estimated recoveries, for example from salvage or subrogation, are another component of the claims liability estimate.
The Authority covers workers’ compensation claims up to its self-insurance limit of $500,000.
The Local Agency Workers Compensation Excess Pool provides excess coverage to statutory limits. The City pays an annual premium to the Authority and may share in any surplus revenues or may be required to pay additional assessments based upon the Authority’s operating results. Financial statements of the Public Agency Risk Sharing Authority of California (PARSAC) may be obtained from its administrative office located at 1525 Response Road, Suite One, Sacramento, California, 95815; www.parsac.org or by calling (916) 927-7727.
Note 11: Commitments and Contingencies
Litigation
The City is involved as a defendant in various legal proceedings. While it is not feasible to predict or determine the outcome in these cases, it is the opinion of the City that the outcome will have no material adverse effect on the financial position of the City.
Grants
The City has received State and Federal funds for specific purposes that are subject to audit by the grantor agencies. Although such audits could generate expenditure disallowances under the terms of the grants, it is believed that any required reimbursements will not be material.
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 70
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
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Note 11: Commitments and Contingencies (continued)
Construction Commitments
The following material construction commitments existed at June 30,2021:
Remaining Commitments
Fund as of June 30, 2021
General Fund 558,072$
Development Impact Fees Fund 5,499,686
Grants Fund 963,536
Non-Major Govermental Funds 4,094,880
11,116,174$
COVID-19 considerations
On March 11, 2020, the World Health Organization declared the novel strain of coronavirus (COVID-19) a global pandemic and recommended containment and mitigation measures worldwide. The COVID-19 outbreak in the United States caused business disruption through mandated and voluntary closings of businesses and shelter in place orders. It is possible that this matter will negatively impact the future revenues of the City. However, the ultimate financial impact and duration cannot be estimated at this time, and no adjustments have been made to these financial statements as a result of this uncertainty.
Note 12: Tax Abatement
The City entered into a tax abatement agreement of sales and use tax revenue with a local developer under the authority of the City Council of the City of Menifee. This agreement created a performance-based incentive from sales taxes revenue that is generated from the site operated by the developer for the period from November 6, 2019, to the earliest of (i) November 6, 2024, (ii) when a total of $25,000 tax increment is abated, and (iii) any occurrence of default by the developer. Tax abated each year is a calculation of the product of fifty percent (50%) multiplied by the portion of the Sales Taxes, excluding Measure DD, revenue generated from the site for the period, not to exceed $25,000 in total. For the fiscal year ended June 30, 2021, the City abated $4,596 of tax revenue under this agreement.
The City also entered into a tax abatement agreement of transient occupancy tax with a local developer under the authority of the City Council of the City of Menifee. This agreement created a performance-based incentive from transient occupancy taxes revenue that is generated from the site operated by the developer. The City's payments to the developer are made quarterly, during the payment period from October 1, 2020, to the earliest of (i) October 1, 2030, (ii) when a total of $1,000,000 tax increment is abated, and (iii) any occurrence of default by the developer. The amount of the payment due on each payment date is the product of fifty percent (50%) of the total Transient Occupancy Tax generated and received by the City during the applicable preceding each quarter period, not to exceed 10 years or the sum of one million dollars ($1,000,000), whichever occurs first. For the fiscal year ended June 30, 2021, the City abated tax increment totaling $53,166 under this agreement.
The City has not made any commitments as part of the agreements other than to reduce taxes. The City is not subject to any tax abatement agreements entered into by other governmental entities. The City has chosen to disclose information about some of its tax abatement agreements individually. It established a quantitative threshold of 5 percent of the total dollar amount of taxes abated during the year.
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 71
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
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Note 13: Restatements
Fund Statements
Beginning fund balance on the governmental funds balance sheet for the year ended June 30, 2021 has been restated as follows:
Major Fund Non-Major Fund
General Fund Veteran's Memorial
Beginning fund balance - as previously reported 41,606,076$ -$ Implementation of GASB 84 108,664 4,273
Beginning fund balance - as restated 41,714,740$ 4,273$ Government-wide Statements
Beginning fund balance on the government-wide statement of net position for the year ended June 30, 2021 has been restated as follows:
Governmental Activities
Beginning net position - as previously reported 298,408,382$ Implementation of GASB 84 112,937
Capital assets not previously reported 4,323,938
Beginning net position - as restated 302,845,257$
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 72
Menifee Mayor and City Council January 19, 2022
REQUIRED SUPPLEMENTARY INFORMATION
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 73
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
REQUIRED SUPPLEMENTARY INFORMATION
BUDGETARY COMPARISON SCHEDULE
GENERAL FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
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Actual Variance withOriginal Final Amounts Final BudgetBudgetary Fund Balance, July 141,714,740$ 41,714,740$ 41,714,740$ -$ Resources (Inflows):Taxes 39,080,568 44,854,145 49,445,591 4,591,446 Licenses and permits 8,707,950 9,840,000 10,914,819 1,074,819 Intergovernmental 6,825,404 7,811,177 7,843,701 32,524 Charges for services 3,128,848 3,529,912 3,999,653 469,741 Use of money and property 477,800 437,800 67,691 (370,109) Fines and forfeitures 702,810 384,922 329,487 (55,435) Miscellaneous 112,815 121,315 113,771 (7,544) Transfers in 5,090,410 4,490,410 424,928 (4,065,482) Amounts Available for Appropriation 105,841,345 113,184,421 114,854,381 1,669,960 Charges for Appropriation (Outflows):General government 14,719,954 14,263,689 12,001,638 2,262,051 Public safety 29,935,253 34,102,116 29,134,252 4,967,864 Community development 6,349,990 7,501,557 5,292,778 2,208,779 Parks and recreation 2,135,894 2,712,332 2,022,847 689,485 Engineering and public works 4,923,417 5,978,615 4,541,463 1,437,152 Capital outlay 2,759,400 14,381,380 2,902,150 11,479,230 Transfers out 4,190,263 6,797,575 2,645,892 4,151,683 Total Charges to Appropriations 65,014,171 85,737,264 58,541,020 27,196,244 Budgetary Fund Balance, June 30 40,827,174$ 27,447,157$ 56,313,361$ 28,866,204$ Budgeted Amounts
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 74
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
REQUIRED SUPPLEMENTARY INFORMATION
BUDGETARY COMPARISON SCHEDULE
DEVELOPMENT IMPACT FEES – SPECIAL REVENUE FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
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Actual Variance with
Original Final Amounts Final Budget
Budgetary Fund Balance, July 1 31,434,726$ 31,434,726$ 31,434,726$ -$ Resources (Inflows):
Use of money and property 279,865 123,935 (14,450) (138,385) Developer participation 5,385,456 6,125,085 9,600,934 3,475,849 Amounts Available for Appropriation 37,100,047 37,683,746 41,021,210 3,337,464 Charges for Appropriation (Outflows):
General government 61,000 61,000 49,998 11,002
Parks and recreation 123,000 193,459 133,506 59,953
Capital outlay 7,622,385 30,088,577 4,649,061 25,439,516 Total Charges to Appropriations 7,806,385 30,343,036 4,832,565 25,510,471 Budgetary Fund Balance, June 30 29,293,662$ 7,340,710$ 36,188,645$ 28,847,935$ Budgeted Amounts
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 75
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
REQUIRED SUPPLEMENTARY INFORMATION
BUDGETARY COMPARISON SCHEDULE
GRANTS – SPECIAL REVENUE FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
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Actual Variance withOriginal Final Amounts Final BudgetBudgetary Fund Balance, July 1291,293$ 291,293$ 291,293$ -$ Resources (Inflows):Intergovernmental 662,897 13,504,643 3,984,548 (9,520,095) Use of money and property 1,000 - - - Amounts Available for Appropriation955,190 13,795,936 4,275,841 (9,520,095) Charges for Appropriation (Outflows):General government 521,746 2,793,654 1,786,107 1,007,547 Public safety - 141,895 37,899 103,996 Community development - 625,299 85,002 540,297 Parks and recreation - 235,075 233,402 1,673 Engineering and public works - 483,317 366,891 116,426 Capital outlay- 1,964,305 966,972 997,333 Transfers out 141,630 141,630 227,834 (86,204) Total Charges to Appropriations 663,376 6,385,175 3,704,107 2,681,068 Budgetary Fund Balance, June 30 291,814$ 7,410,761$ 571,734$ (6,839,027)$ Budgeted Amounts
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 76
Menifee Mayor and City Council January 19, 2022
THIS PAGE INTENTIONALLY LEFT BLANK
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 77
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF THE CITY’S PROPORTIONATE SHARE OF THE PENSION PLAN’S NET PENSION
LIABILITY AND RELATED RATIOS AS OF THE MEASUREMENT DATE LAST TEN YEARS*
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Measurement
Date
Employer's
Proportion of
the Collective
Net Pension
Liability1
Employer's
Proportionate
Share of the
Collective Net
Pension Liability
Employer's
Covered Payroll
Employer's
Proportionate
Share of the
Collective Net
Pension Liability
as a Percentage
of the Employer's
Covered Payroll
Pension Plans
Fiduciary Net
Position as a
Percentage of
the Total
Pension Liability
6/30/2014 0.00921% 288,345$ 2,658,666$ 10.85% 83.02% 6/30/2015 0.00368% 252,740 3,376,969 7.48% 89.51%
6/30/2016 0.00420% 363,319 4,222,698 8.60% 89.67%
6/30/2017 0.00556% 551,431 4,350,553 12.67% 88.92%
6/30/2018 0.00519% 499,769 5,130,794 9.74% 91.91%
6/30/2019 0.00023% 23,598 6,773,265 0.35% 99.71%
6/30/2020 0.00236% 256,708 10,202,569 2.52% 97.57%
both the Miscellaneous and Safety Risk pools excluding the 1959 Survivors Risk Pool. * Measurement date 6/30/2014 (fiscal year 2015) was the first year of implementation. Additional years will be presented as information becomes available.
1 Proportion of the collective net pension liability represents the plan's proportion of PERF C, which includes Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 78
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF THE PENSION PLAN’S CONTRIBUTIONS
LAST TEN YEARS*
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Fiscal YearActuarially Determined ContributionsContributions in Relation to the Actuarially Determined ContributionsContribution Deficiency (Excess)Employer's Covered PayrollContributions as a Percentage of Covered Payroll6/30/2015 525,168$ (525,168)$ -$ 3,376,969$ 15.55%6/30/2016 447,484 (447,484) - 4,222,698 10.60%6/30/2017 461,164 (461,164) - 4,350,553 10.60%6/30/2018 524,088 (524,088) - 5,130,794 10.21%6/30/2019 1,360,520 (1,360,520) - 6,773,265 20.09%6/30/2020 1,089,277 (1,089,277) - 10,202,569 10.68%6/30/2021 2,053,455 (2,053,455) - 17,087,839 12.02%Notes to Schedule:Change in Benefit Terms: None* Measurement date 6/30/2014 (fiscal year 2015) was the first year of implementation. Additional yearswill be presented as information becomes available.Changes in Assumptions: For 2020, the Plan adopted a new amortization policy effective with the 2019 actuarialvaluation. The new amortization policy shortens the period over which actuarial gains and losses are amortizedfrom 30 years to 20 years with the payments computed as a level dollar amount. In addition, the new policy doesnot utilize a five-year ramp-up and ramp-down on UAL bases attributable to assumption changes and non-investment gains/losses. The new policy also does not utilize a five-year ramp-down on investment gains/losses.These changes apply only to new UAL bases established on or after June 30, 2019. There were no changes inassumptions in 2019. In 2018, demographic assumptions and inflation rate were changed in accordance to theCalPERS Experience Study and Review of Actuarial Assumptions December 2017. There were no changes inthe discount rate in 2019. In 2017, the accounting discount rate was reduced from 7.65 percent to 7.15 percent.In 2016, there were no changes in the discount rate. In 2015, amounts reported reflect an adjustment of thediscount rate from 7.5 percent (net of administrative expense) to 7.65 percent (without a reduction for pensionplan administrative expense). In 2014, amounts reported were based on the 7.5 percent discount rate.
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 79
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF CHANGES IN THE NET OPEB LIABILITY AND RELATED RATIOS LAST TEN YEARS*
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Measurement Date 2020 2019 2018 2017
Total OPEB Liability
Service Cost 449,840$ 71,218$ 74,816$ 72,814$
Interest on the Total OPEB Liability 38,328 10,868 8,305 4,869 Actual and expected experience difference (1,232) 91,138 - - Changes in assumptions 364,149 453,877 (13,488) -
Changes in benefit terms - - - -
Benefit payments (12,360) (775) (256) (246)
Net change in Total OPEB Liability 838,725 626,326 69,377 77,437 Total OPEB Liability - beginning 876,974 250,648 181,271 103,834 Total OPEB Liability - ending 1,715,699$ 876,974$ 250,648$ 181,271$ Plan fiduciary net position as a percentage of the total OPEB liability 0.00% 0.00% 0.00% 0.00% Covered employee payroll* 10,218,725$ 6,733,193$ 4,941,609$ 4,352,479$ Net OPEB liability as a percentage of covered employee payroll 16.79% 13.02% 5.07% 4.16% Notes to schedule:
The City does not have assets accumulated in a trust that meets the criteria of GASB 75 to pay related benefits Benefits are not based on a measure of pay, therefore covered employee payroll is used.
Changes Since the Prior Valuation:
Fiscal year 2017-18 was the first year of implementation. * Historical information is required only for measurement periods for which GASB 75 is applicable. Future years' information will be displayed up to 10 years as information becomes available.
The discount rate of 2.20% was used in the valuation. The interest rate used in the prior valuation was 3.50%.
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 80
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF OPEB CONTRIBUTIONS
LAST TEN YEARS*
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Fiscal Year Ended June 302021202020192018Contractual Determined Contributions (CDC) 2,907$ 2,116$ 775$ 521$ Contributions in relation to the CDC (2,907) (2,116) (775) (521) Contribution deficiency/(excess)-$ -$ -$ -$ Covered employee payroll 17,203,459$ 10,218,725$ 6,733,193$ 4,941,609$ Contribution as a percentage of covered payroll 0.02% 0.02% 0.01% 0.01%Notes to schedule:Methods and assumptions used to determine contributions:2021 2020 2019 2018Discount Rate2.20%3.50%3.80%3.80%Inflation2.75%2.75%2.75%2.75%Salary Increases2.75% per year2.75% per year2.75% per year2.75% per yearMortality Rate2009 and 2017 CalPERS Mortality for Miscellaneous and Safety Employees, respectively2009 CalPERS Mortality for Active Miscellaneous Employees2009 CalPERS Mortality for Active Miscellaneous Employees2009 CalPERS Mortality for Active Miscellaneous EmployeesPre-Retirement Turnover 4.0% per year 4.0% per year 4.0% per year 4.0% per year
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 81
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
REQUIRED SUPPLEMENTARY INFORMATION
NOTES
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Notes to the Required Supplementary Information:
Budget Basis of Accounting
Budgets for all governmental funds are adopted on a basis consistent with generally accepted accounting principles (GAAP).
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 82
Menifee Mayor and City Council January 19, 2022
SUPPLEMENTAL SCHEDULES
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 83
Menifee Mayor and City Council January 19, 2022
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NON-MAJOR GOVERNMENTAL FUNDS DESCRIPTIONS
SPECIAL REVENUE FUNDS
Gas Tax
Used to account for revenue and expenditures of money apportioned under Street and Highways Code, Sections 2103, 2105, 2106, 2107 and 2107.5 of the State of California. These funds are earmarked for maintenance, rehabilitation or improvement of public streets. Section 2107.5 funds can be used for engineering and gas tax audit costs. In addition, beginning in FY 2010/11, the new excise tax on fuel, which took the place of Traffic Congestion Relief/Proposition 42 funds, is recorded in the Gas Tax Fund.
SB1
Used to account for revenue and expenditures of the Road Maintenance and Rehabilitation Account to address deferred maintenance on the State Highway System and the local streets and road system. A percentage of this new RMRA funding will be apportioned by formula to eligible cities and counties pursuant to Streets and Highways Code section 2032(h) for basic road maintenance, rehabilitation, and critical safety projects on the local streets and roads system.
Measure A
Represents funds apportioned by the Riverside County Transportation Commission (RCTC) and received by the City as a result of the voter-approved initiative that increased sales tax by 1/2 percent in Riverside County to fund transportation projects. Measure "A" funds were originally approved by voters in 1988, and an extension was approved in 2002 which will fund projects through 2039.
Air Quality Management District
This fund was established to account for the City's share of vehicle registration fees collected under Assembly Bill 2766 passed during the 1990 State Legislative session. This fee was levied to fund programs to reduce air pollution from mobile sources such as cars, trucks and buses. Allocations to agencies are made through an apportionment basis and also through a competitive process. The South Coast Air Quality Management District distributes these funds to the City.
Landscape and Lighting Maintenance
Upon incorporation, the City acquired the responsibility of a portion of one LLMD which included both street lighting and traffic signals. In January 2015, the City requested from the County of Riverside to become solely responsible for all LLMDs located exclusively within the City jurisdiction. This resulted in the City acquiring 24 individual LLMD zones. These LLMDs had originally been established by Riverside County prior to the City's incorporation, and maintained responsibility for the maintenance of these zones until January 2015.
CFD Audie Murphy Ranch
In January 2012 the Audie Murphy Ranch Community Facility District (CFD) was formed. This CFD encompasses approximately 1,059.3 gross acres and upon full build out will contain approximately 2,129 residential dwelling units. Each July 1, commencing on July 1, 2013, the maximum special tax for developed property shall be increased based on the percentage change in the Consumer Price Index, with a maximum annual increase of six percent (6%) and a minimum annual increase of two percent (2%) per fiscal year. The assessed fees will be used towards street lighting, landscaping, street sweeping, water quality basin improvements, parks, trails and recreation improvements.
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 84
Menifee Mayor and City Council January 19, 2022
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CFD Hidden Hills
In June 2012 the Hidden Hills Community Facility District (CFD) was formed. This CFD boundary includes approximately 157 gross acres and upon full build out will contain 511 single family homes. Services provided by the CFD include landscape maintenance, park and trails maintenance, as well as incidental costs such as capital replacement and administrative costs. The maximum special tax for developed property shall be increased based on the percentage change in the Consumer Price Index, with a maximum annual increase of six percent (6%) and a minimum annual increase of two percent (2%) per fiscal year.
CFD 2014-1 Town Center
In August 2014 the Menifee Town Center Community Facility District (CFD) was formed. This CFD encompasses approximately 149 gross acres of mix use development consisting of retail, commercial and residential housing units Beginning July 1, 2015 and each year thereafter, the maximum special tax for developed property shall be increased based on the percentage change in the Consumer Price Index with a maximum annual increase of six percent (6%) and a minimum annual increase of two percent (2%) per fiscal year. The assessed fees will be used towards street lighting, landscaping, street sweeping, water quality basin improvements, parks, trails and recreation improvements.
Veteran’s Memorial
In August 2009, the City Council instructed staff to set up the fund to receive donations along with the Riverside County’s donation of $25,000 and the City’s match of $25,000 to construct a Veteran’s Memorial. Construction began in 2010 and the Memorial was completed in 2011. Citizens can purchase personalized bricks that are added to the Memorial.
TUMF Fees
This fund tracks revenues and expenditures associated with the regional transportation mitigation fee program. These funds are generated from impact fees assessed by Western Riverside Council of Governments (WRCOG) on all new residential and commercial development. These funds are later divided among the three (3) zones comprising of the Northern, Central and Southern zones. The City of Menifee is located within the Central zone along with the Cities of Perris, Moreno Valley and Riverside County. The City is eligible to receive TUMF funds on major road and bridge projects located within the City. These projects must first be approved by WRCOG and the Central zone Technical Advisory Committee (TAC). The City uses these funds to supplement capital projects relating to road and bridge improvements and they are treated as grant funding.
CFD 2014-2 Commerce Point
In August 2014 the Commerce Point Community Facility District (CFD) was formed. This CFD boundary includes approximately 46 taxable acres of commercial real estate. Services provided by the CFD include landscape maintenance, street lighting, water quality improvements, graffiti removal, street sweeping, and park and trails maintenance. On July 1 of each year, and commencing July 1, 2016, the maximum special tax for developed properly shall be the greater of the increased based on the percentage change in the Consumer Price Index or two percent (2%) per fiscal year. 2015-2 Citywide CFD
In April 2015 the City-Wide Community Facility District (CFD) was formed under Resolution No. 15- 430.
CFD No. 2015-2 (Maintenance Services) currently consists of one Tax Zone consisting of one residential tract that will include 359 residential units. Services provided by the CFD include landscape maintenance, street lighting, water quality improvements, graffiti removal, public street sweeping, and park and trails maintenance. On July 1 of each year, and commencing July 1, 2016, the maximum special tax for developed property shall be the greater of the increased based on the percentage change in the Consumer Price Index or two percent (2%) per fiscal year.
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 85
Menifee Mayor and City Council January 19, 2022
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2017-1 Maintenance Services CFD
In December 2017 the Community Facilities District (CFD) 2017-1 was formed. This CFD boundary includes approximately 104 acres of vacant commercial and residential property within the City (TR 36299-1 and PM 9504). The improvements proposed to be maintained include items such as landscaping, lighting, storm drains, water quality improvements, graffiti, streets, street lights, traffic signals, street sweeping, and trail maintenance. On July 1 of each year, and commencing July 1, 2019, the maximum special tax for developed property shall be the greater of the increased based on the percentage change in the Consumer Price Index or two percent (2%), whichever is greater, per fiscal year.
Public Education and Government Access
This fund will be used to acquire equipment for and broadcasting on a future City cable channel. Used to account for revenue and expenditures of money pursuant to section 611 of the Communications Act.
Local Franchising authorities (The City) may require cable operations to remit funds and set aside channels for public, educational, or governmental use.
County Service Areas (CSA)
Upon incorporation, the City assumed responsibility for seven (7) County Service Area Districts within the City limits. These districts were established by the County of Riverside to provide a mechanism through special assessments to fund services such as street lighting, street sweeping, park maintenance, road maintenance, and law enforcement services to property owners within each district. Each CSA fund provides a unique set of services to the residents within that individual district.
Capital Projects Fund
This fund is used to account for the project completion of street and highways capital improvements financed through various sources including, but not limited to, developer contributions and grants.
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 86
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
COMBINING BALANCE SHEET
NON-MAJOR GOVERNMENTAL FUNDS
JUNE 30, 2021
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Air Quality
Management
Gas Tax SB1 Measure A District
Assets
Cash and investments 530,009$ 739,492$ 466,994$ 149,369$ Receivables:
Accounts, grants and taxes 152,761 328,005 698,950 32,237 Accrued interest 206 - 376 29
Total Assets 682,976$ 1,067,497$ 1,166,320$ 181,635$ Liabilities:
Accounts payable 289,083$ 56,137$ 28,891$ -$
Accrued liabilities 13,657 - - -
Due to other funds - - - -
Total Liabilities 302,740 56,137 28,891 -
Deferred Inflows of Resources:
Unavailable revenues - - - -
Total Deferred Inflows of Resources - - - -
Fund Balances:
Restricted for:
Community development projects - - - -
Engineering and public works 380,236 1,011,360 1,137,429 181,635 Unassigned (deficit) - - - -
Total Fund Balances 380,236 1,011,360 1,137,429 181,635 682,976$ 1,067,497$ 1,166,320$ 181,635$
Liabilities, Deferred Inflows of Resources
and Fund Balances
Total Liabilities, Deferred Inflows of
Resources, and Fund Balances
Special Revenue Funds
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 87
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
COMBINING BALANCE SHEET
NON-MAJOR GOVERNMENTAL FUNDS (continued)
JUNE 30, 2021
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Landscape CFD CFD CFD
and Lighting Audie Murphy Hidden 2014-1 Town
Maintenance Ranch Hills Center Veteran's Memorial
3,398,525$ 2,442,891$ 510,478$ 151,347$ 4,265$
26,442 9,321 1,181 - -
1,604 1,425 341 47 2
3,426,571$ 2,453,637$ 512,000$ 151,394$ 4,267$
72,585$ 465,138$ 10,157$ 245$ -$
2,135 12,650 762 - -
184,844 - - - -
259,564 477,788 10,919 245 -
- - - - -
- - - - -
- 1,975,849 501,081 151,149 4,267
3,167,007 - - - -
- - - - -
3,167,007 1,975,849 501,081 151,149 4,267
3,426,571$ 2,453,637$ 512,000$ 151,394$ 4,267$
Special Revenue Funds
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 88
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
COMBINING BALANCE SHEET
NON-MAJOR GOVERNMENTAL FUNDS (continued)
JUNE 30, 2021
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CFD CFD
TUMF 2014-2 Commerce 2015-2 2017-1 Maintenance
Fees Point Citywide CFD Services
Assets
Cash and investments -$ 53,225$ 1,664,371$ 358,842$ Receivables:
Accounts, grants and taxes 593,600 - 9,155 367
Accrued interest - 3 - -
Total Assets 593,600$ 53,228$ 1,673,526$ 359,209$ Liabilities:
Accounts payable 170,349$ 1,393$ 64,395$ 5,618$ Accrued liabilities - - 5,088 136
Due to other funds 276,631 - - -
Total Liabilities 446,980 1,393 69,483 5,754
Deferred Inflows of Resources:
Unavailable revenues 593,600 - - -
Total Deferred Inflows of Resources 593,600 - - -
Fund Balances:
Restricted for:
Community development projects - 51,835 1,604,043 353,455 Engineering and public works - - - -
Unassigned (deficit) (446,980) - - -
Total Fund Balances (446,980) 51,835 1,604,043 353,455 593,600$ 53,228$ 1,673,526$ 359,209$
Liabilities, Deferred Inflows of Resources and
Fund Balances
Total Liabilities, Deferred Inflows of
Resources, and Fund Balances
Special Revenue Funds
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 89
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
COMBINING BALANCE SHEET
NON-MAJOR GOVERNMENTAL FUNDS (continued)
JUNE 30, 2021
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Capital Projects
Fund
Total
Public Non-Major
Education and County Governmental
Governmental Acess Service Areas Capital Projects Funds 557,217$ 1,711,641$ 6,265,307$ 19,003,973$
40,918 56,165 - 1,949,102
- 795 2,082 6,910
598,135$ 1,768,601$ 6,267,389$ 20,959,985$
-$ 147,655$ 359,651$ 1,671,297$
- 9,870 5,940 50,238
- 1,011,223 - 1,472,698
- 1,168,748 365,591 3,194,233
- - - 593,600
- - - 593,600
598,135 599,853 - 5,839,667
- - 5,901,798 11,779,465
- - - (446,980)
598,135 599,853 5,901,798 17,172,152
598,135$ 1,768,601$ 6,267,389$ 20,959,985$
Special Revenue Funds
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 90
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
NON-MAJOR GOVERNMENTAL FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
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Air QualityManagementGas Tax SB1 Measure A DistrictRevenuesTaxes -$ -$ -$ -$ Intergovernmental 2,123,538 1,799,963 2,422,869 126,782 Charges for services - - - - Use of money and property (2,061) 1,981 390 (313) Miscellaneous 5,971 - - - Total Revenues 2,127,448 1,801,944 2,423,259 126,469 ExpendituresCurrent:General government - - - - Public safety - - - - Parks and recreation - - - - Engineering and public works 1,457,556 - - - Capital outlay 307,929 1,143,789 667,509 - Total Expenditures 1,765,485 1,143,789 667,509 - Excess (Deficiency) of RevenuesOver (Under) Expenditures 361,963 658,155 1,755,750 126,469 Other Financing Sources (Uses)Transfers in - - - - Transfers out (204,967) - (1,305,546) - Total Other Financing Sources (Uses)(204,967) - (1,305,546) - Net Change in Fund Balances 156,996 658,155 450,204 126,469 Fund Balances, Beginning of Year 223,240 353,205 687,225 55,166 Fund Balances, End of Year 380,236$ 1,011,360$ 1,137,429$ 181,635$ Special Revenue Funds
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 91
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NON-MAJOR GOVERNMENTAL FUNDS (continued)
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
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Landscape CFD CFD CFD
and Lighting Audie Murphy Hidden 2014-1 Town Veteran's
Maintenance Ranch Hills Center Memorial
-$ -$ -$ -$ -$
- - - - -
827,538 1,295,251 166,250 18,031 -
1,537 1,521 341 44 (6)
8,456 10,804 - - -
837,531 1,307,576 166,591 18,075 (6)
- - - - -
- - - - -
605,682 824,116 117,419 1,511 -
49,642 60,931 - - -
- 429,604 - - -
655,324 1,314,651 117,419 1,511 -
182,207 (7,075) 49,172 16,564 (6)
- - - - -
(10,586) (14,241) - - -
(10,586) (14,241) - - -
171,621 (21,316) 49,172 16,564 (6)
2,995,386 1,997,165 451,909 134,585 4,273
3,167,007$ 1,975,849$ 501,081$ 151,149$ 4,267$
Special Revenue Funds
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 92
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NON-MAJOR GOVERNMENTAL FUNDS (continued)
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
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CFD CFD
TUMF 2014-2 Commerce 2015-2 2017-1 Maintenance
Fees Point Citywide CFD Services
Revenues
Taxes -$ -$ -$ -$
Intergovernmental 845,507 - - -
Charges for services - 8,382 880,112 189,213
Use of money and property (9,707) 4 230 -
Miscellaneous - - 316 3,916
Total Revenues 835,800 8,386 880,658 193,129
Expenditures
Current:
General government - - 7,066 -
Public safety - - - -
Parks and recreation - 5,646 297,101 52,541
Engineering and public works - 1,277 48,753 7,290
Capital outlay 1,054,447 - 146,101 -
Total Expenditures 1,054,447 6,923 499,021 59,831
Excess (Deficiency) of Revenues
Over (Under) Expenditures (218,647) 1,463 381,637 133,298 Other Financing Sources (Uses)
Transfers in - - 156,423 -
Transfers out (296,463) - (156,839) (5,162)
Total Other Financing Sources
(Uses) (296,463) - (416) (5,162)
Net Change in Fund Balances (515,110) 1,463 381,221 128,136 Fund Balances, Beginning of Year 68,130 50,372 1,222,822 225,319 Fund Balances, End of Year (446,980)$ 51,835$ 1,604,043$ 353,455$ Special Revenue Funds
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 93
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NON-MAJOR GOVERNMENTAL FUNDS (continued)
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
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Capital Projects
Fund
Total
Public Non-Major
Education and County Governmental
Governmental Acess Service Areas Capital Projects Funds -$ 22,946$ -$ 22,946$
- - - 7,318,659
169,886 1,876,755 - 5,431,418
9,142 (4,928) 10,667 8,842
- 487,037 - 516,500
179,028 2,381,810 10,667 13,298,365
- 10,544 - 17,610
- 2,143 - 2,143
- 649,942 - 2,553,958
- 415,899 91,355 2,132,703
- 3,279 1,061,985 4,814,643
- 1,081,807 1,153,340 9,521,057
179,028 1,300,003 (1,142,673) 3,777,308
- - 2,918,736 3,075,159
- (642,187) - (2,635,991)
- (642,187) 2,918,736 439,168
179,028 657,816 1,776,063 4,216,476
419,107 (57,963) 4,125,735 12,955,676
598,135$ 599,853$ 5,901,798$ 17,172,152$
Special Revenue Funds
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 94
Menifee Mayor and City Council January 19, 2022
THIS PAGE INTENTIONALLY LEFT BLANK
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 95
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
BUDGETARY COMPARISON SCHEDULE
GAS TAX
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
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Actual Variance withOriginal Final Amounts Final BudgetBudgetary Fund Balance, July 1223,240$ 223,240$ 223,240$ -$ Resources (Inflows):Intergovernmental 2,199,173 2,199,173 2,123,538 (75,635) Use of money and property 11,800 4,500 (2,061) (6,561) Miscellaneous 6,137 6,137 5,971 (166) Amounts Available for Appropriation2,440,350 2,433,050 2,350,688 (82,362) Charges for Appropriation (Outflows):Engineering and public works 1,521,355 1,631,263 1,457,556 173,707 Capital outlay 640,849 692,625 307,929 384,696 Transfers out 204,950 204,967 204,967 - Total Charges to Appropriations 2,367,154 2,528,855 1,970,452 558,403 Budgetary Fund Balance, June 30 73,196$ (95,805)$ 380,236$ 476,041$ Budgeted Amounts
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 96
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
BUDGETARY COMPARISON SCHEDULE
SB1
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
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Actual Variance withOriginal Final Amounts Final BudgetBudgetary Fund Balance, July 1353,205$ 353,205$ 353,205$ -$ Resources (Inflows):Intergovernmental 1,606,126 1,606,126 1,799,963 193,837 Use of money and property 150 600 1,981 1,381 Amounts Available for Appropriation1,959,481 1,959,931 2,155,149 195,218 Charges for Appropriation (Outflows):Capital outlay 1,725,569 1,772,057 1,143,789 628,268 Total Charges to Appropriations 1,725,569 1,772,057 1,143,789 628,268 Budgetary Fund Balance, June 30 233,912$ 187,874$ 1,011,360$ 823,486$ Budgeted Amounts
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 97
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
BUDGETARY COMPARISON SCHEDULE
MEASURE A
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
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Actual Variance with
Original Final Amounts Final Budget
Budgetary Fund Balance, July 1 687,225$ 687,225$ 687,225$ -$ Resources (Inflows):
Intergovernmental 1,553,000 1,553,000 2,422,869 869,869 Use of money and property 4,150 2,800 390 (2,410)
Amounts Available for Appropriation 2,244,375 2,243,025 3,110,484 867,459 Charges for Appropriation (Outflows):
Capital outlay 319,286 937,479 667,509 269,970
Transfers out 1,305,546 1,305,546 1,305,546 -
Total Charges to Appropriations 1,624,832 2,243,025 1,973,055 269,970 Budgetary Fund Balance, June 30 619,543$ -$ 1,137,429$ 1,137,429$ Budgeted Amounts
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 98
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
BUDGETARY COMPARISON SCHEDULE
AIR QUALITY MANAGEMENT DISTRICT
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
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Actual Variance with
Original Final Amounts Final Budget
Budgetary Fund Balance, July 1 55,166$ 55,166$ 55,166$ -$ Resources (Inflows):
Intergovernmental 120,400 120,400 126,782 6,382
Use of money and property 1,015 850 (313) (1,163)
Amounts Available for Appropriation 176,581 176,416 181,635 5,219 Charges for Appropriation (Outflows):
Capital outlay 120,000 120,000 - 120,000
Total Charges to Appropriations 120,000 120,000 - 120,000 Budgetary Fund Balance, June 30 56,581$ 56,416$ 181,635$ 125,219$ Budgeted Amounts
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 99
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
BUDGETARY COMPARISON SCHEDULE
LANDSCAPE AND LIGHTING MAINTENANCE DISTRICT
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
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Actual Variance with
Original Final Amounts Final Budget
Budgetary Fund Balance, July 1 2,995,386$ 2,995,386$ 2,995,386$ -$ Resources (Inflows):
Charges for services 825,384 825,084 827,538 2,454
Use of money and property 18,895 15,320 1,537 (13,783) Miscellaneous 9,405 9,405 8,456 (949)
Amounts Available for Appropriation 3,849,070 3,845,195 3,832,917 (12,278) Charges for Appropriation (Outflows):
Parks and recreation 546,428 694,259 605,682 88,577
Engineering and public works 142,900 144,077 49,642 94,435 Transfer out 12,039 11,220 10,586 634
Total Charges to Appropriations 701,367 849,556 665,910 183,646 Budgetary Fund Balance, June 30 3,147,703$ 2,995,639$ 3,167,007$ 171,368$ Budgeted Amounts
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 100
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
BUDGETARY COMPARISON SCHEDULE
COMMUNITY FACILITIES DISTRICT – AUDIE MURPHY RANCH
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
-75-
Actual Variance with
Original Final Amounts Final Budget
Budgetary Fund Balance, July 1 1,997,165$ 1,997,165$ 1,997,165$ -$ Resources (Inflows):
Charges for services 1,101,539 1,284,982 1,295,251 10,269 Use of money and property 10,000 6,000 1,521 (4,479) Miscellaneous 11,104 11,104 10,804 (300)
Amounts Available for Appropriation 3,119,808 3,299,251 3,304,741 5,490 Charges for Appropriation (Outflows):
Parks and recreation 961,473 947,835 824,116 123,719 Engineering and public works 38,000 62,580 60,931 1,649 Capital outlay 840,000 833,000 429,604 403,396
Transfers out 14,215 14,241 14,241 -
Total Charges to Appropriations 1,853,688 1,857,656 1,328,892 528,764 Budgetary Fund Balance, June 30 1,266,120$ 1,441,595$ 1,975,849$ 534,254$ Budgeted Amounts
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 101
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
BUDGETARY COMPARISON SCHEDULE
COMMUNITY FACILITIES DISTRICT – HIDDEN HILLS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
-76-
Actual Variance withOriginal Final Amounts Final BudgetBudgetary Fund Balance, July 1451,909$ 451,909$ 451,909$ -$ Resources (Inflows):Charges for services 143,858 165,748 166,250 502 Use of money and property 2,000 1,000 341 (659) Amounts Available for Appropriation597,767 618,657 618,500 (157) Charges for Appropriation (Outflows):Parks and recreation 120,819 138,889 117,419 21,470 Engineering and public works 10,000 500 - 500 Total Charges to Appropriations130,819 139,389 117,419 21,970 Budgetary Fund Balance, June 30 466,948$ 479,268$ 501,081$ 21,813$ Budgeted Amounts
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 102
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
BUDGETARY COMPARISON SCHEDULE
CFD 2014-1 TOWN CENTER
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
-77-
Actual Variance withOriginal FinalAmountsFinal BudgetBudgetary Fund Balance, July 1134,585$ 134,585$ 134,585$ -$ Resources (Inflows):Charges for services 14,912 14,912 18,031 3,119 Use of money and property 500 300 44 (256) Amounts Available for Appropriation149,997 149,797 152,660 2,863 Charges for Appropriation (Outflows):Parks and recreation 5,632 5,632 1,511 4,121 Engineering and public works 2,500 2,500 - 2,500 Total Charges to Appropriations8,132 8,132 1,511 6,621 Budgetary Fund Balance, June 30 141,865$ 141,665$ 151,149$ 9,484$ Budgeted Amounts
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 103
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
BUDGETARY COMPARISON SCHEDULE
VETERAN’S MEMORIAL
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
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Actual Variance with
Original Final Amounts Final Budget
Budgetary Fund Balance, July 1 4,273$ 4,273$ 4,273$ -$ Resources (Inflows):
Use of money and property 35 20 (6) (26)
Amounts Available for Appropriation 4,308 4,293 4,267 (26) Charges for Appropriation (Outflows)
Parks and recreation - - - -
Total Charges to Appropriations - - - -
Budgetary Fund Balance, June 30 4,308$ 4,293$ 4,267$ (26)$ Budgeted Amounts
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 104
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
BUDGETARY COMPARISON SCHEDULE
TUMF FEES
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
-79-
Actual Variance with
Original Final Amounts Final Budget
Budgetary Fund Balance, July 1 68,130$ 68,130$ 68,130$ -$ Resources (Inflows):
Intergovernmental 2,852,230 2,852,230 845,507 (2,006,723) Use of money and property 39,000 500 (9,707) (10,207) Amounts Available for Appropriation 2,959,360 2,920,860 903,930 (2,016,930) Charges for Appropriation (Outflows)
Capital oultay 700,000 5,001,162 1,054,447 3,946,715 Transfers out 296,463 296,463 296,463 -
Total Charges to Appropriations 996,463 5,297,625 1,350,910 3,946,715 Budgetary Fund Balance, June 30 1,962,897$ (2,376,765)$ (446,980)$ 1,929,785$ Budgeted Amounts
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 105
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
BUDGETARY COMPARISON SCHEDULE
COMMUNITY FACILITIES DISTRICT – 2014-2 COMMERCE POINT
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
-80-
Actual Variance withOriginal Final Amounts Final BudgetBudgetary Fund Balance, July 150,372$ 50,372$ 50,372$ -$ Resources (Inflows):Charges for services 8,382 8,382 8,382 - Use of money and property 50 25 4 (21) Amounts Available for Appropriation58,804 58,779 58,758 (21) Charges for Appropriation (Outflows):Parks and recreation 6,232 7,299 5,646 1,653 Engineering and public works 2,200 2,200 1,277 923 Total Charges to Appropriations 8,432 9,499 6,923 2,576 Budgetary Fund Balance, June 30 50,372$ 49,280$ 51,835$ 2,555$ Budgeted Amounts
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 106
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
BUDGETARY COMPARISON SCHEDULE
COMMUNITY FACILITIES DISTRICT – 2015-2 CITYWIDE
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
-81-
Actual Variance withOriginal Final Amounts Final BudgetBudgetary Fund Balance, July 11,222,822$ 1,222,822$ 1,222,822$ -$ Resources (Inflows):Charges for services 790,684 874,547 880,112 5,565 Use of money and property - 175 230 55 Miscellaneous 325 325 316 (9) Transfers in148,775 156,423 156,423 - Amounts Available for Appropriation2,162,606 2,254,292 2,259,903 5,611 Charges for Appropriation (Outflows):General government 12,124 12,124 7,066 5,058 Parks and recreation 472,536 472,409 297,101 175,308 Engineering and public works 57,986 58,593 48,753 9,840 Capital outlay 35,000 146,101 146,101 - Transfers out 149,191 157,178 156,839 339 Total Charges to Appropriations 726,837 846,405 655,860 190,545 Budgetary Fund Balance, June 30 1,435,769$ 1,407,887$ 1,604,043$ 196,156$ Budgeted Amounts
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 107
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
BUDGETARY COMPARISON SCHEDULE
COMMUNITY FACILITIES DISTRICT – 2017-1 MAINTENANCE SERVICES FOR THE FISCAL YEAR ENDED JUNE 30, 2021
-82-
Actual Variance withOriginal Final Amounts Final BudgetBudgetary Fund Balance, July 1225,319$ 225,319$ 225,319$ -$ Resources (Inflows):Charges for services 177,300 189,439 189,213 (226) Miscellaneous 4,025 4,025 3,916 (109) Amounts Available for Appropriation406,644 418,783 418,448 (335) Charges for Appropriation (Outflows):Parks and recreation 39,861 61,593 52,541 9,052 Engineering and public works 22,728 15,477 7,290 8,187 Transfers out 5,153 5,162 5,162 - Total Charges to Appropriations 67,742 82,232 64,993 17,239 Budgetary Fund Balance, June 30 338,902$ 336,551$ 353,455$ 16,904$ Budgeted Amounts
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 108
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
BUDGETARY COMPARISON SCHEDULE
PUBLIC EDUCATION AND GOVERNMENTAL ACCESS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
-83-
Actual Variance withOriginal Final Amounts Final BudgetBudgetary Fund Balance, July 1419,107$ 419,107$ 419,107$ -$ Resources (Inflows):Charges for services 90,000 90,000 169,886 79,886 Use of money and property - - 9,142 9,142 Amounts Available for Appropriation509,107 509,107 598,135 89,028 Charges for Appropriation (Outflows):Capital outlay 90,000 90,000 - 90,000 Total Charges to Appropriations 90,000 90,000 - 90,000 Budgetary Fund Balance, June 30 419,107$ 419,107$ 598,135$ 179,028$ Budgeted Amounts
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 109
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
BUDGETARY COMPARISON SCHEDULE
COUNTY SERVICE AREAS (CSA)
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
-84-
Actual Variance withOriginal Final Amounts Final BudgetBudgetary Fund Balance (Deficit), July 1(57,963)$ (57,963)$ (57,963)$ -$ Resources (Inflows):Taxes 858,800 - 22,946 22,946 Charges for services 1,851,929 1,851,929 1,876,755 24,826 Use of money and property 11,500 11,500 (4,928) (16,428) Miscellaneous 500,584 500,584 487,037 (13,547) Amounts Available for Appropriation3,164,850 2,306,050 2,323,847 17,797 Charges for Appropriation (Outflows):General government 18,700 18,687 10,544 8,143 Public safety 461,534 13,000 2,143 10,857 Parks and recreation 716,748 766,939 649,942 116,997 Engineering and public works 1,260,453 970,246 415,899 554,347 Capital outlay 50,000 55,000 3,279 51,721 Transfers out 640,825 642,187 642,187 - Total Charges to Appropriations 3,148,260 2,466,059 1,723,994 742,065 Budgetary Fund Balance, June 30 16,590$ (160,009)$ 599,853$ 759,862$ Budgeted Amounts
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 110
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
BUDGETARY COMPARISON SCHEDULE
CAPITAL PROJECTS FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
-85-
Actual Variance withOriginal Final Amounts Final BudgetBudgetary Fund Balance, July 14,125,735$ 4,125,735$ 4,125,735$ -$ Resources (Inflows):Use of money and property 59,795 22,000 10,667 (11,333) Transfers in 311,463 2,918,736 2,918,736 - Amounts Available for Appropriation4,496,993 7,066,471 7,055,138 (11,333) Charges for Appropriation (Outflows):Engineering and public works - 145,000 91,355 53,645 Capital outlay 1,649,506 4,269,929 1,061,985 3,207,944 Total Charges to Appropriations 1,649,506 4,414,929 1,153,340 3,261,589 Budgetary Fund Balance, June 30 2,847,487$ 2,651,542$ 5,901,798$ 3,250,256$ Budgeted Amounts Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 111
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
BUDGETARY COMPARISON SCHEDULE
DEBT SERVICE FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
-86-
Actual Variance withOriginal Final Amounts Final BudgetBudgetary Fund Balance, July 11,572,272$ 1,572,272$ 1,572,272$ -$ Resources (Inflows):Use of money and property 5,000 3,500 1,528 (1,972) Transfers in 2,009,630 2,009,630 2,009,630 - Amounts Available for Appropriation3,586,902 3,585,402 3,583,430 (1,972) Charges for Appropriation (Outflows):General government 84,000 107,559 107,559 - Debt service:Principal retirement 791,987 2,585,843 2,585,843 - Interest and fiscal charges 1,133,644 1,170,806 540,059 630,747 Bond issuance costs - 306,935 306,935 - Refunding bonds issued - 17,885,000 17,885,000 - Payment to refunded bond escrow agent- (17,372,007) (17,372,007) - Total Charges to Appropriations 2,009,631 4,684,136 4,053,389 630,747 Budgetary Fund Balance, June 30 1,577,271$ (1,098,734)$ 556,027$ 628,775$ Budgeted Amounts Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 112
Menifee Mayor and City Council January 19, 2022
THIS PAGE INTENTIONALLY LEFT BLANK
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 113
Menifee Mayor and City Council January 19, 2022
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STATISTICAL SECTION DESCRIPTIONS
This section of the City of Menifee’s Comprehensive Annual Financial Report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City’s overall financial health.
Financial Trends Schedules – These schedules contain trend information to help the reader understand how the City’s financial performance and well-being have changed over time. As a newly incorporated City, information relative to the exact City boundaries prior to incorporation is not readily available in most cases. Therefore, trend information will be developed over time and reported annually.
Net Position
Changes in Net Position
Fund Balances of Governmental Funds
Changes in Fund Balances of Governmental Funds
Major Revenues by Source – Governmental Funds
Revenue Capacity Schedules – These schedules contain information to help the reader assess the factors affecting the City’s ability to generate its property taxes.
Assessed Value and Estimated Actual Value of Taxable Property Direct and Overlapping Property Tax Rates
Principal Property Tax Payers
Property Tax Levies and Collections
Debt Capacity Schedules – These schedules present information to help the reader assess the affordability of the City’s current levels of outstanding debt and the City’s ability to issue additional debt in the future.
Ratio of Outstanding Debt by Type
Ratio of General Bonded Debt Outstanding
Direct and Overlapping Bonded Debt
Legal Debt Margin
Demographic and Economic Information – These schedules offer demographic and economic indicators to help the reader understand the environment within which the City’s financial activities take place and to help make comparisons over time and with other governments.
Demographic and Economic Statistics
Principal Employers
Full-time and Part-time City Employees by Program
Operating Information – These schedules contain information about the City’s operations and resources to help the reader understand how the City’s financial information related to the services the City provides and the activities it performs.
Capital Asset Statistics by Function/Program
Operating Indicators by Function/Program
Miscellaneous Statistics
Taxable Sales by Category
Top 25 Sales Tax Producers
Measure DD 1% Sales Tax – Revenues and Expenditures History
Sources: Unless otherwise noted, the information in these schedules is derived from various internal and other governmental and non-governmental sources where reliability of the data could be ascertained.
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 114
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
NET POSITION
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As of June 30, 2012201320142015GOVERNMENTAL ACTIVITIESNet Investment in Capital Assets 20,562,822$ 18,660,912$ 16,372,388$ 25,425,778$ Restricted for:Community Development Projects - 52,861 785,619 1,182,477 Public Safety - 520,300 166,413 (360,254) Public Works 15,166,078 16,712,925 18,577,377 23,094,019 Capital Projects - 1,305,962 23,541,211 20,022,031 Debt service 20,312,675 6,513,444 1,338,301 1,354,467 Unrestricted (11,559,198) 6,523,468 8,301,753 12,103,855 Total Governmental ActivitiesNet Position44,482,377$ 50,289,872$ 69,083,062$ 82,822,373$ PRIMARY GOVERNMENTNet Investment in Capital Assets 20,562,822$ 18,660,912$ 16,372,388$ 25,425,778$ Restricted for:Community Development Projects - 52,861 785,619 1,182,477 Public Safety - 520,300 166,413 (360,254) Public Works 15,166,078 16,712,925 18,577,377 23,094,019 Capital Projects - 1,305,962 23,541,211 20,022,031 Debt service 20,312,675 6,513,444 1,338,301 1,354,467 Unrestricted (11,559,198) 6,523,468 8,301,753 12,103,855 Total Primary GovernmentNet Position44,482,377$ 50,289,872$ 69,083,062$ 82,822,373$
Source: City Finance Department
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 115
Menifee Mayor and City Council January 19, 2022
(continued)
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20162017201820192020202151,416,214$ 69,469,330$ 110,924,809$ 156,771,192$ 215,774,004$ 259,935,987$ 4,448,198 4,660,916 5,363,977 6,373,715 4,569,409 5,239,814 - - 12,472 191,737 - - 23,908,504 20,471,018 32,360,079 44,929,363 40,108,013 49,139,697 9,619,732 4,772,166 - - - - 1,359,694 1,358,034 1,371,931 7,884,527 1,572,272 556,027 10,903,072 14,504,934 26,052,076 30,064,613 36,384,684 51,217,507 101,655,414$ 115,236,398$ 176,085,344$ 246,215,147$ 298,408,382$ 366,089,032$ 51,416,214$ 69,469,330$ 110,924,809$ 156,771,192$ 215,774,004$ 259,935,987$ 4,448,198 4,660,916 5,363,977 6,373,715 4,569,409 5,239,814 - - 12,472 191,737 - - 23,908,504 20,471,018 32,360,079 44,929,363 40,108,013 49,139,697 9,619,732 4,772,166 - - - - 1,359,694 1,358,034 1,371,931 7,884,527 1,572,272 556,027 10,903,072 14,504,934 26,052,076 30,064,613 36,384,684 51,217,507 101,655,414$ 115,236,398$ 176,085,344$ 246,215,147$ 298,408,382$ 366,089,032$
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 116
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
CHANGES IN NET POSITION
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For the Year Ended June 30,2012201320142015EXPENSESGovernmental Activities:General Government 2,955,539$ 2,966,563$ 3,731,602$ 4,160,012$ Public Safety 16,057,258 16,265,992 17,371,349 19,413,871 Community Development 1,859,077 2,514,802 3,161,672 3,091,768 Recreation Services - 736,915 555,384 1,903,871 Engineering and Public Works 7,034,847 7,785,539 8,198,856 7,292,714 Interest on Long-term Debt 78,433 942,270 885,488 918,204 Total Governmental Activities Expenses 27,985,154 31,212,081 33,904,351 36,780,440 PROGRAM REVENUESGovernmental Activities:Charges for Services 4,094,392 6,788,528 11,776,032 12,407,481 Operating Contributions and Grants 6,299,558 5,044,016 5,536,969 3,777,617 Capital Contributions and Grants 1,143,672 8,235,741 14,267,238 9,151,362 Total Governmental Activities Program Revenues 11,537,622 20,068,285 31,580,239 25,336,460 Total Net Revenues (Expenses)(16,447,532)$ (11,143,796)$ (2,324,112)$ (11,443,980)$ GENERAL REVENUES AND OTHER CHANGES IN NET POSITIONGovernmental Activities:Taxes:Property Tax 8,728,216$ 8,783,126$ 11,945,065$ 14,634,225$ Transient Occupancy Tax 137,116 151,151 166,958 190,972 Sales Taxes 4,802,963 4,892,206 5,386,619 5,924,347 Franchise Tax 2,916,302 2,921,048 2,967,476 3,586,271 Other Taxes 233,947 346,972 387,364 409,003 Motor Vehicle in-lieu tax, unrestricted 47,163 45,443 34,912 34,308 Use of Money and Property 113,444 127,399 154,230 151,450 Other 27,233 64,956 (36,693) 84,370 Total Governmental Activities 17,006,384 17,332,301 21,005,931 25,014,946 Special item - - - - Restatement (7,466) 876,874 (381,010) 111,371 Change in Net Position558,852$ 6,188,505$ 18,681,819$ 13,570,966$
Source: City Finance Department
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 117
Menifee Mayor and City Council January 19, 2022
(continued)
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2016201720182019202020214,236,457$ 5,158,876$ 6,265,963$ 8,177,727$ 9,907,689$ 14,183,374$ 20,927,524 18,129,742 25,497,233 27,595,237 29,559,843 27,853,563 3,255,560 3,403,182 4,925,868 5,347,196 5,253,832 5,408,287 1,145,208 1,664,348 3,034,270 4,082,858 5,432,196 3,546,483 10,361,131 8,281,676 6,082,233 16,979,928 18,331,483 16,251,977 902,716 891,605 917,342 863,713 1,108,218 569,679 40,828,596 37,529,429 46,722,909 63,046,659 69,593,261 67,813,363 12,764,259 19,257,460 27,218,239 33,823,689 24,835,036 30,631,445 3,041,014 3,578,315 4,722,133 5,141,336 5,530,426 8,057,443 16,930,639 3,107,374 33,885,278 46,785,288 38,642,004 34,739,876 32,735,912 25,943,149 65,825,650 85,750,313 69,007,466 73,428,764 (8,092,684)$ (11,586,280)$ 19,102,741$ 22,703,654$ (585,795)$ 5,615,401$ 14,577,983$ 12,369,587$ 18,876,904$ 20,771,353$ 22,361,021$ 24,076,949$ 217,122 225,956 232,117 238,464 189,032 506,967 7,137,168 8,661,218 18,005,117 20,384,878 21,102,457 27,476,156 3,084,175 2,973,633 3,076,719 3,141,174 6,289,806 3,653,129 460,751 582,937 615,333 623,801 801,896 1,126,860 34,451 39,873 47,721 44,113 73,963 73,963 253,336 221,371 613,165 2,011,031 1,805,179 48,592 94,005 92,689 166,682 211,335 155,676 665,758 25,858,991 25,167,264 41,633,758 47,426,149 52,779,030 57,628,374 - 1,066,734 - - - - 168,345 - - - - - 17,766,307$ 13,580,984$ 60,736,499$ 70,129,803$ 52,193,235$ 63,243,775$
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 118
Menifee Mayor and City Council January 19, 2022
CITY OF MENIFEE
FUND BALANCES OF GOVERNMENTAL FUNDS
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As of June 30,2012201320142015GENERAL FUND:Reserved -$ -$ -$ -$ Restricted - - - - Nonspendable - - - 2,173,477 Committed 6,067,533 6,546,700 6,546,700 ₄ 6,546,700 Assigned 36,532 58,429 ₂ 40,836 40,836 Unassigned3,203,538 951,533 2,002,972 (486,600) Total General Fund9,307,603 7,556,662 8,590,508 8,274,413 ALL OTHER GOVERNEMENTAL FUNDSNonspendable - - - - Restricted for Community Development Projects - 520,300 785,619 1,184,687 Restricted for Public Safety - 52,861 166,413 194,826 Restricted for Engineering/Public Works 15,166,078 16,712,925 18,577,229 25,022,383 Restricted for Capital Projects 20,312,675 ₃ 6,513,444 23,541,211 ₆20,022,031 Restricted for Debt Service - 20,620,358 ₅ 1,338,301 1,354,467 Unassigned (214,931) (16,810) (1,655,616) - Total All Other Governmental Funds35,263,822 44,403,078 42,753,157 47,778,394 TOTAL GOVERNMENTAL FUNDS44,571,425$ 51,959,740$ 51,343,665$ 56,052,807$
The City of Menifee was incorporated during fiscal year 2008-2009. No information prior to that date is available.
1 Fund balance classification reflects GASB 54 implementation beginning Fiscal Year 2011. 2 Establish $15,000 self-insurance, retention reserve.
3 Certificates of Participations issued for capital construction. 4 Establish emergency reserve of 20% of General Fund expenditures and $250,000 towards construction of new City Hall.
5 Transferred proceeds from Certificates of Participation to debt service fund. 6 Transferred proceeds from Certificates of Participation to capital project fund.
Source: City Finance Department
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 119
Menifee Mayor and City Council January 19, 2022
(continued)
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201620172018201920202021-$ -$ -$ -$ -$ -$ - - - - - - 1,880,909 64,540 28,073 65,751 13,473 - 6,546,700 3,543,729 3,543,729 3,543,729 5,688,958 7,642,510 226,500 461,890 4,396,969 13,437,218 8,701,430 9,349,272 1,268,621 8,547,350 16,886,664 18,089,574 27,202,215 39,321,579 9,922,730 12,617,509 24,855,435 35,136,272 41,606,076 56,313,361 - - - - - 174,389 4,180,264 4,660,916 5,363,977 6,373,715 4,569,409 5,839,667 267,934 234,782 12,472 191,737 - - 23,908,504 19,781,187 32,360,079 44,929,363 40,165,976 48,539,844 9,619,732 5,461,997 - - - - 1,359,694 1,358,034 1,371,931 7,884,527 1,572,272 381,638 - - (154) - (57,963) (446,980) 39,336,128 31,496,916 39,108,305 59,379,342 46,249,694 54,488,558 49,258,858$ 44,114,425$ 63,963,740$ 94,515,614$ 87,855,770$ 110,801,919$
Item Title: 12.1 Annual Comprehensive Financial Report (ACFR) for Fiscal Year End June 30, 2021 Item Page Number: 120
Menifee Mayor and City Council January 19, 2022