City of Montclair
Annual Financial Report
For the Fiscal Year Ended
June 30, 2021
Certified Public Accountants
Van Lant
Fankhanel LLP
&
,
CITY OF MONTCLAIR
FINANCIAL STATEMENTS
Year Ended June 30, 2021
CITY OF MONTCLAIR
FINANCIAL STATEMENTS
TABLE OF CONTENTS
Page
Independent Auditor’s Report 1 - 3
Basic Financial Statements
Government-wide Financial Statements:
Statement of Net Position 5
Statement of Activities 6 - 7
Fund Financial Statements:
Balance Sheet - Governmental Funds 8 - 9
Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position 10 Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds 12 – 13 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 14 Statement of Net Position - Proprietary Funds 15
Statement of Revenues, Expenses and Changes in Net Position - Proprietary Funds 16 Statement of Cash Flows - Proprietary Funds 17
Statement of Fiduciary Net Position - Fiduciary Funds 18 Statement of Changes in Fiduciary Net Position - Fiduciary Funds 19 Notes to Financial Statements 20 – 44
Required Supplementary Information
Budgetary Comparison Schedules:
General Fund 46 – 47
CARES Act Special Revenue Fund 48
Notes to Required Supplementary Information 49
Schedule of Changes in Total OPEB Liability and Related Ratios 50 Schedule of Changes in the Net Pension Liability and Related Ratios - Agent Multiple-employer Plan 51 Schedule of Contributions - Agent Multiple-employer Plan 52 Schedule of Proportionate Share of the Net Pension Liability – Cost-sharing Plan 53 Schedule of Contributions – Cost-sharing Plan 54
Supplementary Information
Non-Major Governmental Funds:
Combining Balance Sheet 56 – 63
Combining Statement of Revenues, Expenditures and Changes in Fund Balances 64 - 71 Independent Auditor’s Report
The Honorable City Council
City of Montclair, California
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, business-type activities, each major fund, and the aggregate remaining fund information of the City of Montclair (City), as of and for the year ended June 30, 2021, and the related notes to the financial statements which collectively comprise the City’s basic financial statements as listed in the table of contents.
Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
1 Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, business-type activities, each major fund, and the aggregate remaining fund information of the City of Montclair, as of June 30, 2021, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Change in Accounting Principle
As reported in the financial statements, in fiscal year 2020-21, the City adopted new accounting guidance, GASBS No. 84, Fiduciary Activities. Our opinion is not modified with respect to this matter.
Other Matters
Required Supplementary Information
Management has omitted management’s discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a required part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information.
Accounting principles generally accepted in the United States of America require that the required supplementary information, as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming an opinion on the financial statements that collectively comprise the City’s basic financial statements. The schedules listed in the Supplementary Information section of the table of contents, are presented for purposes of additional analysis and are not a required part of the basic financial statements.
The schedules listed in the Supplementary Information section of the table of contents are the responsibility of management and were derived from and relate directly to the underlying accounting and other records 2 used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedules listed in the Supplementary Information section of the table of contents are fairly stated in all material respects in relation to the basic financial statements as a whole.
Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued a report dated March 8, 2022, on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is 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 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.
March 8, 2022
3 BASIC FINANCIAL STATEMENTS
Governmental Business-type
Activities Activities Total
ASSETS
Pooled Cash and Investments 42,523,761 $ 4,575,064 $ 47,098,825 $ Receivables:
Accounts 2,980,307 619,428 3,599,735
Notes and Loans 2,604,461 - 2,604,461
Accrued Interest 27,161 - 27,161
Prepaid Costs 10,123 - 10,123
Due From Other Governments 6,379,837 162,358 6,542,195
Internal Balances 6,865 (6,865) -
Capital Assets Not Being Depreciated 33,694,862 - 33,694,862 Capital Assets, Net of Accumulated Depreciation 80,316,721 2,120,335 82,437,056 Total Assets 168,544,098 7,470,320 176,014,418
DEFERRED OUTFLOWS OF RESOURCES
Deferred Outflow - Bond Refunding 229,499 - 229,499
Deferred Outflows Related to OPEB 2,348,903 94,646 2,443,549 Deferred Outflows Related to Pensions 14,317,307 457,279 14,774,586 Total Deferred Outflows of Resources 16,895,709 551,925 17,447,634
LIABILITIES
Accounts Payable 1,596,377 626,772 2,223,149
Accrued Liabilities 498,601 21,743 520,344
Accrued Interest 409,285 - 409,285
Deposits Payable 242,019 - 242,019
Unearned Revenue 300,000 - 300,000
Due to Other Governments 24,397 - 24,397
Noncurrent Liabilities:
Due Within One Year 2,352,832 13,512 2,366,344
Due in More Than One Year 130,004,890 3,125,790 133,130,680 Total Liabilities 135,428,401 3,787,817 139,216,218
DEFERRED INFLOWS OF RESOURCES
Deferred Inflows Related to OPEB 1,555,209 62,665 1,617,874 Deferred Inflows Related to Pensions 2,256,580 61,498 2,318,078 Total Deferred Inflows of Resources 3,811,789 124,163 3,935,952
NET POSITION
Net Investment in Capital Assets 72,752,321 2,120,335 74,872,656 Restricted for:
Housing 5,410,711 - 5,410,711
Public Safety 1,483,768 - 1,483,768
Transportation 19,777,354 - 19,777,354
Community Development 2,571,646 - 2,571,646
Unrestricted (55,796,183) 1,989,930 (53,806,253)
Total Net Position $ 46,199,617 $ 4,110,265 $ 50,309,882 City of Montclair
Statement of Net Position
June 30, 2021
The accompanying notes are an integral part of this statement. 4 Charges Operating Capital
for Grants and Grants and
Functions/Programs Expenses Services Contributions Contributions Primary Government:
Governmental Activities:
General Government (16,308,390) $ 2,281,637 $ 1,051,566 $ - $ Public Safety (19,065,476) 677,759 315,581 36,864
Community Development (4,095,452) 888,734 1,078,387 187,980 Public Works (4,166,599) 3,725,262 15,174 6,069,728
Interest on Long-Term Debt (1,640,272) - - -
Total Governmental Activities (45,276,189) 7,573,392 2,460,708 6,294,572 Business-type Activities:
Sewer Maintenance (5,169,839) 5,361,513 - -
Total Business-type Activities (5,169,839) 5,361,513 - - Total Primary Government (50,446,028) $ 12,934,905 $ 2,460,708 $ 6,294,572 $ General Revenues:
Taxes:
Property Taxes
Transient Occupancy Taxes
Sales Taxes
Franchise Taxes
Business Licenses Taxes
Utility Users Tax
Other Taxes
Miscellaneous Revenues
Interest Income
Transfers
Total General Revenues and Transfers
Change in Net Position
Net Position - Beginning of Year
Restatement of Net Position
Net Position - End of Year
Program Revenues
City of Montclair
Statement of Activities
Year Ended June 30, 2021
The accompanying notes are an integral part of this statement. 5 Governmental Business-type
Activites Activities Total
$ - (12,975,187) $ (12,975,187) $
- (18,035,272) (18,035,272)
- (1,940,351) (1,940,351)
- 5,643,565 5,643,565
- (1,640,272) (1,640,272)
- (28,947,517) (28,947,517)
191,674 - 191,674
191,674 - 191,674
191,674 (28,947,517) (28,755,843)
- 8,569,171 8,569,171
- 63,269 63,269
- 20,295,259 20,295,259
- 815,202 815,202
- 732,064 732,064
- 1,784,464 1,784,464
- 28,963 28,963
- 296,874 296,874
14,234 73,466 87,700
(83,189) 83,189 -
(68,955) 32,741,921 32,672,966
122,719 3,794,404 3,917,123
3,987,546 42,405,213 46,392,759
- - -
$ 4,110,265 46,199,617 $ 50,309,882 $
Net (Expense) Revenue and Changes in Net Position
The accompanying notes are an integral part of this statement. 6 Special
Revenue
Successor
General Agency Economic
Fund CARES Act Bonds Development
ASSETS
Pooled Cash and Investments $ 10,061,379 $ 38,777 $ 13,021,371 $ 5,705,036 Receivables:
Accounts 2,258,280 22,787 - 76
Notes and Loans 5,000 - - -
Accrued Interest 14,483 - 10,631 -
Prepaid Costs 9,191 - - -
Due from Other Governments 5,500,540 434,661 - -
Due from Other Funds 602,835 - - -
Total Assets $ 18,451,708 $ 496,225 $ 13,032,002 $ 5,705,112
LIABILITIES
Accounts Payable $ 859,963 61,564 $ 13,404 $ 4,150
Accrued Liabilities 422,335 - - 20,299
Deposits Payable 161,949 - - -
Unearned Revenue - - - -
Due to Other Governments 20,423 - - -
Due to Other Funds 36,615 434,661 - -
Total Liabilities 1,501,285 496,225 13,404 24,449
DEFERRED INFLOWS OF RESOURCES
Unavailable Revenues - Grants 180,850 434,661 - -
Total Deferred Inflows of Resources 180,850 434,661 - -
FUND BALANCES (DEFICITS)
Nonspendable 9,191 - - -
Restricted - 13,018,598 - -
Committed - - 5,680,663 -
Assigned 7,558,101 - - -
Unassigned 9,202,281 (434,661) - -
Total Fund Balances (Deficits) 16,769,573 (434,661) 13,018,598 5,680,663 Total Liabilities, Deferred Inflows of
Resources, and Fund Balances $ 18,451,708 $ 496,225 $ 13,032,002 $ 5,705,112 Capital Projects
City of Montclair
Balance Sheet
Governmental Funds
June 30, 2021
The accompanying notes are an integral part of this statement. 7 Other Total
Governmental Governmental
Funds Funds
$ 13,697,198 $ 42,523,761
699,164 2,980,307
2,599,461 2,604,461
2,047 27,161
932 10,123
444,636 6,379,837
674,810 1,277,645
$ 18,118,248 $ 55,803,295
$ 657,296 $ 1,596,377
55,967 498,601
80,070 242,019
300,000 300,000
3,974 24,397
799,504 1,270,780
1,896,811 3,932,174
180,634 796,145
180,634 796,145
932 10,123
16,224,881 29,243,479
5,680,663 -
7,558,101 -
(185,010) 8,582,610
16,040,803 51,074,976
$ 18,118,248 $ 55,803,295
The accompanying notes are an integral part of this statement. 8 Fund Balances of Governmental Funds $ 51,074,976
Amounts reported for Governmental Activities in the Statement of Net Position are different because:
Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. 114,011,583
Long-term debt and compensated absences are not due and payable in the current period and, therefore, are not reported in the funds.
Bonds (41,488,761)
Claims and Judgements (2,146,065)
Compensated Absences (1,549,587)
Net Pension Liability (75,611,443)
Total OPEB Liability (11,561,866)
Accrued interest payable for the current portion of interest due on bonds has not been reported in the governmental funds. (409,285) Amounts for deferred inflows and deferred outflows related to the City's Net Pension Liability and Net OPEB Liability are not reported in the funds.
Deferred Outflows Related to Pensions 14,317,307
Deferred Inflows Related to Pensions (2,256,580)
Deferred Outflows Related to OPEB 2,348,903
Deferred Inflows Related to OPEB (1,555,209)
Amounts for deferred outflows related to the City's defeasance of prior bonds are not reported in the funds. 229,499
Other long-term assets are not available to pay for current period expenditures and, therefore, are not reported as available revenues in the funds. 796,145 Net Position of Governmental Activities $ 46,199,617
City of Montclair
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 this statement. 9 Special
Revenue
Successor
General Agency Economic
Fund CARES Act Bonds Development
REVENUES
Taxes $ 31,684,474 $ - $ - $ -
Licenses and Permits 510,377 - - -
Intergovernmental 192,342 997,963 998,654 -
Charges for Services 4,174,981 - - -
Use of Money and Property 179,347 - 2,646 -
Fines and Forfeitures 334,189 - - -
Miscellaneous 98,776 - - -
Total Revenues 37,174,486 997,963 2,646 998,654
EXPENDITURES
Current:
General Government 10,630,613 975,176 - -
Public Safety 15,281,015 - - -
Community Development 1,614,674 - 652,239 -
Public Works 2,617,293 429,912 - -
Capital Outlay 279 914,897 64,462 -
Debt Service:
Principal Retirement - - - -
Interest and Fiscal Charges - - - -
Total Expenditures 30,143,874 1,890,073 429,912 716,701 Excess (Deficiency) of Revenues
Over Expenditures 7,030,612 (892,110) (427,266) 281,953
OTHER FINANCING SOURCES (USES)
Transfers In 100,000 457,449 - -
Transfers Out (2,937,950) - (457,449) -
Total Other Financing Sources (Uses) (2,837,950) 457,449 (457,449) - Net Change in Fund Balances 4,192,662 (434,661) (427,266) (175,496) Fund Balance, Beginning of Year 12,576,911 13,445,864 - 5,856,159 Fund Balance, End of Year $ (434,661) 16,769,573 $ 13,018,598 $ 5,680,663 $ Capital Projects
Year Ended June 30, 2021
Governmental Funds
Statement of Revenues, Expenditures, and Changes in Fund Balances City of Montclair
The accompanying notes are an integral part of this statement. 10 Other Total
Governmental Governmental
Funds Funds
$ 2,248,801 $ 33,933,275
510,377 -
4,696,108 6,885,067
685,601 4,860,582
1,024,371 1,206,364
164,774 498,963
101,175 199,951
8,920,830 48,094,579
990,890 12,596,679
812,426 16,093,441
1,822,390 4,089,303
3,764,101 6,811,306
2,260,197 3,239,835
885,000 885,000
1,708,969 1,708,969
12,243,973 45,424,533
(3,323,143) 2,670,046
5,215,542 5,772,991
(2,294,403) (5,689,802)
2,921,139 83,189
(402,004) 2,753,235
16,442,807 48,321,741
$ 16,040,803 $ 51,074,976
The accompanying notes are an integral part of this statement. 11 Net Change in Fund Balances - Total Governmental Funds $ 2,753,235 Amounts reported for Governmental Activities in the Statement of Activities are different because:
Governmental funds report capital outlays as an expenditures. However in the Statement of Activities the cost of these assets is allocated over their estimated useful lives as depreciation expense.
Acquisition of Capital Assets 5,975,393
Depreciation Expense (4,555,834)
Donation of Capital Assets 271,680
The issuance of long-term debt (e.g., bonds, leases) provides current financial resources to governmental funds, while the repayment of principal of long-term debt consumes the current financial resources of the governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds report the effect of premiums, discounts, and similar items when debt is first issued, whereas these amounts are amortized in the Statement of Activities.
Amortization of Premium on Refunding Bond 55,573
Principal Repayments 885,000
Amortization of Deferred Outflow on Refunding (9,563)
Claims and judgments 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. (235,607)
Accrued interest payable is not reported in the governmental funds. 22,687 To record the net change in compensated absences in the Statement of Activities. 345,041 Some revenues reported in the Statement of Activities are not considered to be available to finance current expenditures and therefore are not reported as revenues in the governmental funds. 621,145
Some expenses reported in the Statement of Activities relating to pensions and OPEB do not require the use of current financial resources and are not reported as governmental fund expenditures.
Net change in Deferred Outflows Related to Pensions 1,030,060 Net change in Deferred Inflows Related to Pensions 707,705 Net change in Net Pension Liability (4,919,151)
Net change in Deferred Outflows Related to OPEB 1,420,609 Net change in Deferred Inflows Related to OPEB (778,269) Net change in Total OPEB Liability 204,700
Change in Net Position of Governmental Activities $ 3,794,404 City of Montclair
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities
Year Ended June 30, 2021
The accompanying notes are an integral part of this statement. 12 Business-Type
Activities -
Enterprise Funds
Sewer
Maintenance Fund
ASSETS
Current:
Pooled Cash and Investments $ 4,575,064
Receivables:
Accounts (net of allowance) 619,428
Due from Other Governments 162,358
Total Current Assets 5,356,850
Noncurrent:
Capital Assets Not Being Depreciated -
Capital Assets - Net of Accumulated Depreciation 2,120,335 Total Noncurrent Assets 2,120,335
Total Assets 7,477,185
DEFERRED OUTFLOWS OF RESOURCES
Deferred Outflows Related to OPEB 94,646
Deferred Outflows Related to Pensions 457,279
Total Deferred Outflows of Resources 551,925
LIABILITIES
Current:
Accounts Payable 626,772
Accrued Liabilities 21,743
Due to Other Funds 6,865
Accrued Compensated Absences 13,512
Total Current Liabilities 668,892
Noncurrent:
Accrued Compensated Absences 32,009
OPEB Liability 465,870
Net Pension Liability 2,627,911
Total Noncurrent Liabilities 3,125,790
Total Liabilities 3,794,682
DEFERRED INFLOWS OF RESOURCES
Deferred Inflows Related to OPEB 62,665
Deferred Inflows Related to Pensions 61,498
Total Deferred Inflows of Resources 124,163
NET POSITION
Net Investment in Capital Assets 2,120,335
Unrestricted 1,989,930
Total Net Position $ 4,110,265
City of Montclair
Statement of Net Position
Proprietary Funds
June 30, 2021
The accompanying notes are an integral part of this statement. 13 Business-Type
Activities -
Enterprise Funds
Sewer
Maintenance Fund
OPERATING REVENUES
Sales and Service Charges $ 5,361,513
Total Operating Revenues 5,361,513
OPERATING EXPENSES
Salaries and Benefits 1,326,977
Supplies and Services 226,287
Treatment 3,543,019
Depreciation Expense 73,556
Total Operating Expenses 5,169,839
Operating Income (Loss) 191,674
NONOPERATING REVENUES (EXPENSES)
Interest Revenue 14,234
Total Nonoperating Revenues (Expenses) 14,234
Income Before Transfers 205,908
Transfers Out (83,189)
Changes in Net Position 122,719
Net Position, Beginning of Year 3,987,546
Net Position, End of Fiscal Year $ 4,110,265
City of Montclair
Statement of Revenues, Expenses and Changes in Net Position Proprietary Funds
Year Ended June 30, 2021
The accompanying notes are an integral part of this statement. 14 Business-Type
Activities -
Enterprise Funds
Sewer
Maintenance Fund
Cash Flows from Operating Activities
Cash Received from Customers and Users $ 5,255,929
Cash Paid to Suppliers for Goods and Services (3,874,164) Cash Paid to Employees for Services (1,282,228)
Net Cash Provided (Used) by Operating Activities 99,537 Cash Flows from Non-Capital Financing Activities
Cash Received From (Paid to) Other Funds (76,324)
Net Cash Provided (Used) by Non-Capital Financing Activities (76,324) Cash Flows from Capital and Related Financing Activities Acquistion of Capital Assets -
Net Cash Provided (Used) by Capital and Related Financing Activities - Cash Flows from Investing Activities
Interest Received 14,234
Net Cash Provided (Used) by Investing Activities 14,234 Net Increase (Decrease) in Cash and Cash Equivalents 37,447 Cash and Cash Equivalents at Beginning of Year 4,537,617 Cash and Cash Equivalents at End of Year $ 4,575,064
Reconciliation of Operating Income to Net Cash
Provided (Used) by Operating Activities:
Operating Income (Loss) $ 191,674
Adjustments to Reconcile Operating Income (Loss) Net Cash Provided (Used) by Operating Activities:
Depreciation 73,556
(Increase) Decrease in Accounts Receivable (78,660)
(Increase) Decrease in Due from Other Governments (26,924) (Increase) Decrease in Deferred Outflows - OPEB (57,242) (Increase) Decrease in Deferred Outflows - Pensions 4,926 Increase (Decrease) in Accounts Payable (104,858)
Increase (Decrease) in Accrued Liabilities (6,171)
Increase (Decrease) in Compensated Absences (45,008)
Increase (Decrease) in Deferred Inflows - OPEB 31,359
Increase (Decrease) in Deferred Inflows - Pension (26,888) Increase (Decrease) in Total OPEB Liability (8,248)
Increase (Decrease) in Net Pension Liability 152,021
Total Adjustments (92,137)
Net Cash Provided (Used) by Operating Activities $ 99,537 City of Montclair
Statement of Cash Flows
Proprietary Funds
Year Ended June 30, 2021
The accompanying notes are an integral part of this statement. 15 Successor
Agency
Private-purpose Custodial
Trust Fund Fund
ASSETS
Pooled Cash and Investments $ 676,998 $ 2,773,469
Restricted Cash with Fiscal Agent 1,895,374 -
Total Assets 2,572,372 2,773,469
LIABILITIES
Accounts Payable - -
Accrued Liabilities 4,128 -
Due to Other Governments 5,000 -
Interest Payable 269,670 -
Bonds Payable 33,911,103 -
Total Liabilities 34,189,901 -
NET POSITION
Net Position Held for the Benefit of Others 2,773,469 - Net Position Held in Trust for Successor Agency (31,617,529) - Total Net Position $ (31,617,529) $ 2,773,469
City of Montclair
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2021
The accompanying notes are an integral part of this statement. 16 Successor
Agency
Private-purpose Custodial
Trust Fund Fund
ADDITIONS
Taxes and Assessments 20,484,379 $ 129,775 $
Investment Income 32 -
Other Revenue 5 -
Total Additions 20,484,416 129,775
DEDUCTIONS
Administrative Costs 238,495 -
Distributions to other governments - 1,492,677
Pass-through Payments 18,550,405 -
Interest on Bonds 893,726 -
Total Deductions 19,682,626 1,492,677
Change in Net Position 801,790 (1,362,902)
Net Position - Beginning of Year (32,419,319) 4,136,371 Net Position - End of Year $ 2,773,469 (31,617,529) $
City of Montclair
Statement of Changes in Fiduciary Net Position
Fiduciary Funds
Year Ended June 30, 2021
The accompanying notes are an integral part of this statement. 17 City of Montclair
Notes to Financial Statements
June 30, 2021
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A) Description of Entity
The reporting entity is a municipal corporation governed by an elected mayor and a four-member council. As required by accounting principles generally accepted in the United States of America, these financial statements present the City of Montclair (the City), and its component units, entities for which the City is considered financially accountable. Blended component units, although legally separate entities, are in substance, part of the government's operation, so data from these units are combined herein. The following criteria were used in the determination of blended units:
The members of the City Council also act as the governing body of the Montclair Housing Corporation, the Montclair Housing Authority, the Montclair Public Financing Authority (PFA), and the Montclair Community Foundation (Foundation). The City, Housing Corporation, Housing Authority, PFA, and Foundation are financially interdependent. The Housing Corporation, Housing Authority, PFA, and Foundation are managed by employees of the City. A portion of the City's salary and overhead expenses are billed to the Housing Corporation and Housing Authority each year. The City of Montclair was incorporated April 25, 1956, under the general laws of the State of California and enjoys all the rights and privileges pertaining to "General Law" cities.
Blended Component Units
The Montclair Housing Corporation was established in September 1993. The Corporation presently manages 98 residential units which are occupied by over 300 people. Those properties are covered by 55 year deed restrictions for affordability and approximately 80 percent of those deed restrictions are for very low income families.
The Montclair Housing Authority (the Authority) was established on July 18, 2011 to minimize the amount of unsanitary and unsafe inhabited dwelling accommodations and to provide decent, safe, sanitary, and affordable dwelling accommodations to persons of low income. On January 12, 2012, the Authority elected to serve as the Successor Housing Agency of the City of Montclair Redevelopment Agency (former redevelopment agency) and in accordance with that role it has received transferred Low and Moderate Housing assets of the former redevelopment agency as part of the dissolution process.
The Montclair Public Financing Authority was established through a Joint Exercise of Powers Agreement, dated as of September 1, 2014, by and between the City and the Montclair Housing Authority. The Authority is qualified to assist in the financing of certain public improvements and to issue Bonds under the Bond Law.
The Montclair Community Foundation, a separate 501(c)(3) organization, was established to provide various community services, and is funded by contributions from the community.
Separate financial statements are not prepared for the Corporation, the Authority, the PFA, or Foundation.
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. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely, to a significant extent, on fees and charges for support. 18 City of Montclair
Notes to Financial Statements
June 30, 2021
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are 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 property included among program revenues are reported instead as general revenues.
Separate financial statements are provided for governmental funds, proprietary funds and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise 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, as are the proprietary fund and fiduciary fund financial statements.
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 revenue in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.
Governmental 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 period, the government considers revenues to be available if they are collected within 90 days of the end of the current fiscal period, to include revenues received later than 60 days due to delays in processing payments to the City by other levels of government. 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.
Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the government.
The City reports the following major governmental funds:
The General Fund is the City’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund.
The CARES Act Special Revenue Fund accounts for grant monies to fund COVID-19 related services and activities.
The Successor Agency Bonds Capital Projects Fund accounts for bond funds to be expended on various approved projects.
19 City of Montclair
Notes to Financial Statements
June 30, 2021
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued The Economic Development Capital Projects Fund accounts for monies set aside by City Council for the purpose of economic development within the City.
The City reports the following major proprietary fund:
The Sewer Maintenance Fund accounts for sewer service revenues and the corresponding sewer maintenance expenses.
Additionally, the City reports the following fund types:
The Custodial funds are used to account for assets held by a governmental unit as an agent for individual, private organizations and/or other governmental units. The Successor Agency Private-Purpose Trust Fund accounts for the balances and activities relating to the dissolution of the former Redevelopment Agency.
As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are charges between the government's proprietary funds functions and various other functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned.
Amounts reported as program revenues include: 1) charges to customers or applicants for goods, services or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the enterprise funds are charges to customers for sales and services. Operating expenses for enterprise funds include the cost of sales and services, administrative expenses and depreciation on capital assets. All revenues and expenses not meeting this definition are reporting as nonoperating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the government's policy to use restricted resources first, then unrestricted, as they are needed.
D) Assets, Liabilities and Net Position or Equity
Deposits 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 Proprietary funds.
Investments for the City, as well as for its component units, are reported at fair value. The City's policy is generally to hold investments until maturity or until market values equal or exceed costs. 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. 20 City of Montclair
Notes to Financial Statements
June 30, 2021
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued 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." Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as "internal balances."
Advances between funds, if reported in the fund financial statements, are offset by nonspendable fund balance in applicable governmental funds to indicate that they are not available for appropriation.
All trade and property tax receivables are shown net of an allowance for uncollectibles.
Policy for Eliminating Internal Activity in Government-Wide Statement of Activities Administrative overhead charges are made to funds and programs and are thereby included in the direct expenses of those funds and programs.
Property Tax Calendar
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 pass 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 San Bernardino collects property taxes for the City. Tax liens attach annually as of 12:01 A.M. on the first day in January preceding the fiscal year for which the taxes are levied. Taxes are levied on both real and personal property as it exists on that date. The tax levy covers the fiscal period July 1 to June 30. All secured personal property taxes and onehalf 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 January each year and are delinquent, if unpaid, on August 31.
Functional Classifications
Expenditures of the Governmental funds are classified by function. Functional classifications are defined as follows:
General Government includes legislative activities which have a primary objective of providing legal and policy guidelines for the City. Also included in this classification are those activities which provide management or support services across more than one functional area. Public Safety includes those activities which involve the protection of people and property. Community Development includes those activities which involve the enhancing of the general quality of life.
21 City of Montclair
Notes to Financial Statements
June 30, 2021
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued Public Works includes those activities which involve the maintenance and improvement of City streets, roads and park development and maintenance.
Debt Service includes those activities that account for the payment of long-term principal, interest and fiscal charges.
Prepaid Items
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements.
Restricted Assets
Certain proceeds of debt issues, as well as certain resources set aside for their repayment, are classified as restricted assets on the balance sheet because their use is limited by applicable bond covenants. In addition, funds have been restricted for future capital improvements by City resolution.
Capital Assets
Capital assets, which include property, plant, equipment, intangible assets and infrastructure assets (roads, bridges, sidewalks and similar items), are reported in the applicable governmental or business-type activities column in the Government-wide Financial Statements. Capital assets are defined by the City as assets with an initial, individual cost of more than $5,000 for equipment and $50,000 for infrastructure. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets received prior to the implementation of GASB 72 were recorded at fair value on the date of donation. Donated capital assets received subsequent to the implementation of GASB 72 are recorded at acquisition value as of the date received.
The costs of normal maintenance and repairs that do not add to the value of the assets or materially extend assets' lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed.
Property, plant and equipment of the primary government, as well as the component units, are depreciated using the straight-line method over the following estimated useful lives:
Sewer Lines 100 years
Structures and Improvements 20 to 99 years
Furniture and Equipment 5 to 20 years
Infrastructure Assets 5 to 30 years
Compensated Absences
Compensated absences are the City's liabilities for future vacation, sick and other leave benefits. The shortterm portion is determined to be the amount due to employees for future absences which is attributable to services already rendered and which is expected to be paid during the next fiscal year. The total amount of liability for compensated absences is segregated between short-term and long-term as indicated above, with both portions being reflected in the government-wide financial statements. Compensated absences are paid, when matured, out of the general fund.
22 City of Montclair
Notes to Financial Statements
June 30, 2021
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued For Proprietary funds, the total amount of the liability for compensated absences is segregated between shortterm and long-term as indicated above and both portions are reflected in the fund involved.
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 two times his or her regular annual entitlement without approval of the City Manager.
Sick leave is payable when an employee is unable to work because of illness. Sick leave may be accumulated indefinitely or an employee may convert one-half of unused sick leave accrued during the preceding year for cash providing the person has been employed on a full-time basis for two years immediately preceding November 30 of each year. Unused sick leave may be redeemed in the two years prior to retirement at the rate of two days of sick leave for one day of absence leave. All unused sick leave is forfeited upon termination, other than for normal retirement.
Pensions
For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the City’s California Public Employees’ Retirement System (CalPERS) plans (Plans) and additions to/deductions from the Plans’ fiduciary net position have been determined on the same basis as they are reported by CalPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.
Other Postemployment Benefits
For purposes of measuring the total OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, 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: June 30, 2019 Valuation Date, June 30, 2020 Measurement Date, July 1, 2019 through June 30, 2020 Measurement Period.
Long-Term Obligations
In the government-wide financial statements and proprietary fund types in the fund financial statements, longterm debt and other obligations are reported as liabilities in the applicable governmental activities, businesstype activities or proprietary fund type statement of net assets. Bond premiums and discounts, are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount.
In the fund financial statements, governmental funds recognize bond premiums and discounts, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses.
23 City of Montclair
Notes to Financial Statements
June 30, 2021
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued 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 consumption of net position that applies to future period(s) and so will not be recognized as an outflow of resources (expense) until then. The City reports deferred outflows relating to the Total OPEB Liability as well as the Net Pension Liability.
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 City has one type of item, which arises only under a modified accrual basis of accounting, which qualifies for reporting in this category. Accordingly, the item, unavailable revenue, is reported in the governmental funds balance sheet. The governmental funds report unavailable revenues from property taxes, special assessments, grant receivables, and other miscellaneous receivables. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. In addition, the City reports deferred inflows related to the Total OPEB Liability and also the Net Pension Liability.
Net Position
Net Investment in Capital Assets – this category groups all capital assets, including infrastructure, into one component of net position. Accumulated depreciation and the outstanding balances of debt that are attributable to the acquisition, construction or improvement of these assets reduce this category.
Restricted Net Position – this category represents external restrictions imposed by creditors, grantors, contributors, or laws and regulations of other governments and restrictions imposed by law through constitutional provisions or enabling legislation.
Unrestricted Net Position - this category represents the net position of the City that is not externally restricted for any project or other purpose.
Net Position Flow Assumption
Sometimes the City will fund outlays for a particular purpose from both restricted (e.g. restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted net position and unrestricted net position in the statement of net position, a flow assumption must be made about the order in which the resources are considered to be applied. It is the City’s policy to consider restricted net position to have been depleted before unrestricted net position, is applied.
Fund Balances
Fund balances in governmental funds are reported in classifications that comprise a hierarchy based primarily on the extent to which the City is bound to honor constraints on the specific purposes for which amounts in those funds can be spent. Sometimes the City will fund outlays for a particular purpose from both restricted and unrestricted resources (the total of committed, assigned, and unassigned fund balance).
In order to calculate the amounts to report as restricted, committed, assigned, and unassigned fund balance
24 City of Montclair
Notes to Financial Statements
June 30, 2021
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued 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.
The following classifications describe the relative strength of the spending constraints placed on the purposes for which resources can be used:
Nonspendable Fund Balance - Amounts that cannot be spent either because they are in nonspendable form or are required to be maintained intact.
Restricted Fund Balance - Amounts that are constrained to specific purposes by state or federal laws, or externally imposed conditions by grantors or creditors.
Committed Fund Balance - Amounts constrained for a specific purpose by City Council action. It would require the same action by City Council to remove the constraint.
Assigned Fund Balance - Amounts that are constrained by the City Manager with the intent to use specified financial resources for specific purposes, but are neither restricted nor committed as defined by the City’s fund balance policy adopted by Resolution No. 11-2932.
Unassigned Fund Balance - These are either residual positive net resources of fund balance in excess of what can properly be classified in one of the other four categories, or negative balances.
E) Implementation of Governmental Accounting Standards Board (GASB) Pronouncements The Governmental Accounting Standards Board has issued the following Statements, which may affect the City’s financial reporting requirements in the future:
GASB 87 – Leases: This Statement requires recognition of certain lease assets and liabilities for leases that previously were classified as operating leases and recognized as inflows of resources or outflows of resources based on the payment provisions of the contract. It establishes a single model for lease accounting based on the foundational principle that leases are financings of the right to use an underlying asset. The requirements of this Statement are effective for reporting periods beginning after June 15, 2021.
GASB 91 - Conduit Debt Obligations: The primary objectives of this Statement are to provide a single method of reporting conduit debt obligations by issuers and eliminate diversity in practice. The requirements of this Statement are effective for reporting periods beginning after December 15, 2021.
GASB 92 – Omnibus 2020: The requirements of this Statement will enhance comparability in the application of accounting and financial reporting requirements and will improve the consistency of authoritative literature. More comparable reporting will improve the usefulness of information for users of state and local government financial statements. The requirements of this Statement will take effect for financial statements starting with the fiscal year that ends June 30, 2022.
25 City of Montclair
Notes to Financial Statements
June 30, 2021
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued GASB 96 – Subscription-Based Information Technology Arrangements (SBITAs): The requirements of this Statement will improve financial reporting by establishing a definition for SBITAs and providing uniform guidance for accounting and financial reporting for transactions that meet that definition. The requirements of this Statement will take effect for financial statements starting with the fiscal year that ends June 30, 2023.
2) STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
The following deficits in non-major funds at June 30, 2021 will be funded by future revenues:
Special Revenue Funds:
CDBG $ 1,544
Safety Department Grants 2,832
Statewide Park Development 180,634
3) CASH AND INVESTMENTS
As of June 30, 2021, cash and investments were reported in the accompanying financial statements as follows:
The City of Montclair maintains a cash and investment pool that is available for use for all funds. Each fund'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.
Deposits
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 Agency 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 government 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.
Governmental Activities $ 42,523,761
Business-Type Activities 4,575,064
Fiduciary Funds 5,345,841
Total Cash and Investments $ 52,444,666
26 City of Montclair
Notes to Financial Statements
June 30, 2021
3) CASH AND INVESTMENTS – Continued
Investments
Under provisions of the City's investment policy, and in accordance with the California Government Code, the following investments are authorized:
Bonds issued by the local agency
United States Treasury notes, bonds, bills or certificates Registered state warrants or treasury notes or bonds of California Bonds, notes, warrants or other evidences of indebtedness of any local agency of the State of California Federal Agency or Unites States government-sponsored enterprise obligations, participations, or other instruments.
Bankers' Acceptances and commercial paper
Negotiable certificates of deposit
Repurchase Agreements and reverse repurchase agreements Medium-term notes
Money market funds
Notes, bonds, or other obligations that are at all times secured by a valid first priority security interest Mortgage pass-through securities
Local Agency Investment fund
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.
Investment in State Investment Pool
The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by the 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.
GASB Statement No. 31
GASB Statement No. 31 established 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
The City's investment policy limits investments in medium-term notes (MTN's) to those rated "A" or higher by Standard and Poor's (S&P) or by Moody's. As of June 30, 2021, the City has no investment in medium-term notes. All securities were investment grade and were legal under State law. Investments in U.S. treasuries are not considered to have credit risk and, therefore, their credit quality is not disclosed. As of June 30, 2021, the 27 City of Montclair
Notes to Financial Statements
June 30, 2021
3) CASH AND INVESTMENTS – Continued
City's investments in external investment pools and money market mutual funds are unrated.
Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its 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. As of June 30, 2021, none of the City's deposits or investments were exposed to custodial credit risk.
Concentration of Credit Risk
The City's investment policy imposes restrictions for certain types of investments with any one issuer. With respect to concentration risk, as of June 30, 2021, the City is in compliance with the investment policy restrictions.
Investments guaranteed by the U.S. government and investments in mutual funds and external investment pools are excluded from this requirement. In accordance with GASB Statement No. 40, if the City has invested more than 5% of its investments in any one issuer, then they are exposed to credit risk. The City had no investments in any one issuer that exceeded 5% of total investments.
Interest Rate Risk
The City's investment policy limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. The City's investment policy states that at least 15% of the City's portfolio shall mature in one year or less, and 50% in three years or less. The only exception to these maturity limits shall be the investment of the gross proceeds of tax-exempt bonds. As of June 30, 2021, the City had the following investments and original maturities:
Fair Value of Investments
The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. The City has no investments that are subject to the fair value hierarchy.
6 Months 6 Months 1 to 5 Fair
Investment Type Or Less to 1 Year Years Value
Local Agency Investment Fund 32,472,328 $ $ - $ 32,472,328 - $ Money Market Mutual Funds 4,505,582 - 4,505,582 -
Total $ 36,977,910 $ - $ 36,977,910 - $
Remaining Investment Maturities
28 City of Montclair
Notes to Financial Statements
June 30, 2021
4) CAPITAL ASSETS
Capital asset activity for the year ended June 30, 2021 was as follows:
Depreciation expense was charged to functions/programs of the primary government as follows:
Beginning Ending
Balance Increases Decreases Balance
Governmental Activities:
Capital Assets, Not Depreciated:
Land $ 10,917,565 $ - $ 10,917,565 - $
Work in Progress 18,025,954 4,830,498 2,670,300 20,186,152 Land Improvements 2,591,145 - 2,591,145 -
Total Capital Assets Not Depreciated 31,534,664 4,830,498 2,670,300 33,694,862 Capital Assets, Being Depreciated:
Structures and Improvements 21,768,784 227,218 21,996,002 - Furniture and Equipment 7,952,980 917,677 8,870,657 -
Infrastructure 101,078,585 2,941,980 - 104,020,565
Total Capital Assets Being Depreciated 130,800,349 4,086,875 - 134,887,224 Less Accumulated Depreciation:
Structures and Improvements 9,277,424 470,962 9,748,386 - Furniture and Equipment 5,235,749 796,946 6,032,695 -
Infrastructure 35,501,496 3,287,926 38,789,422 -
Total Accumulated Depreciation 50,014,669 4,555,834 54,570,503 - Total Capital Assets Being
Depreciated, Net 80,785,680 (468,959) 80,316,721 -
Governmental Activities
Capital Assets, Net $ 112,320,344 $ 4,361,539 $ 2,670,300 $ 114,011,583 Beginning Ending
Business-Type Activities: Balance Increases Decreases Balance Capital Assets, Not Depreciated:
Work in Progress $ - $ - $ - $ -
Total Capital Assets Not Depreciated - - - -
Capital Assets, Being Depreciated:
Sewer Lines 3,333,838 - 3,333,838 -
Infrastructure 106,985 - - 106,985
Furniture and Equipment 1,143,859 - 1,143,859 -
Total Capital Assets Being Depreciated 4,584,682 - 4,584,682 - Less Accumulated Depreciation:
Sewer Lines 1,575,178 33,338 1,608,516 -
Infrastructure 10,698 36,652 - 47,350
Furniture and Equipment 804,915 3,566 - 808,481
Total Accumulated Depreciation 2,390,791 73,556 2,464,347 - Total Capital Assets Being
Depreciated, Net 2,193,891 (73,556) 2,120,335 -
Business-Type Activities
Capital Assets, Net $ 2,193,891 $ (73,556) $ 2,120,335 - $ 29 City of Montclair
Notes to Financial Statements
June 30, 2021
4) CAPITAL ASSETS – Continued
5) INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS
The composition of interfund balances as of June 30, 2021, was as follows:
Interfund receivables and payables are used for temporary loans between funds, which will be repaid through future tax and grant collections. Interfund transfers for the 2020-21 fiscal year were as follows:
The General Fund received $100,000 from non-major funds in reimbursement for costs incurred applicable to grant funded programs. The Economic Development fund transferred $457,449 to the CARES Act Fund to fund a grant-required matching contribution. The General Fund made transfers of $2,937,950 to non-major funds for debt service costs and to cover deficits in various funds. Significant transfer activity in the non-major funds includes transfers of $1,667,208 and $576,199 into the non-major Infrastructure Capital Projects and the non-major 2014 Refunding Bonds Capital Projects fund to fund capital expenditures.
Governmental Activities:
General Government 3,147,022 $
Public Safety 1,311,812
Community Development 6,149
Public Works 90,851
Total Governmental Activities 4,555,834 $
Business-Type Acitivities: Sewer 73,556 $
General CARES Sewer Non-Major
DUE TO Fund Act Fund Maintenance Funds Total
General Fund - $ $ 6,865 434,661 $ $ 161,309 $ 602,835
Non-Major Funds 36,615 - - 638,195 674,810
Total 36,615 $ $ 6,865 434,661 $ $ 1, 799,504 $ 277,645
DUE FROM
General CARES Act Non-Major
TRANSFERS OUT Fund Fund Funds Total
General Fund - $ - $ 2,937,950 $ 2,937,950 $
Economic Development - 457,449 - 457,449
Sewer Maintenance - - 83,189 83,189
Non-Major Funds 100,000 - 2,194,403 2, 294,403
Total $ 100,000 $ 457,449 $ 5,215,542 $ 5,772,991
TRANSFERS IN
30 City of Montclair
Notes to Financial Statements
June 30, 2021
6) LONG-TERM DEBT
A) Long-Term Debt Activity
2014 Lease Revenue Refunding Bonds
During fiscal year 2014-15, the Montclair Public Financing Authority (Authority) issued $45,000,000 of 2014 Lease Revenue Refunding Bonds. The Bonds were issued to refund the outstanding 2005 Lease Revenue Bonds, and provide funds for various public improvements and infrastructure projects. The City and the Authority have entered into a lease agreement, pursuant to which the City will make lease payments to the Authority. The Bonds are secured by these lease payments. Interest on the Bonds is payable semi-annually on April 1 and October 1 of each year, commencing April 1, 2015. The Bonds carry various interest rates ranging from 3% to 5%. Principal maturities commenced on October 1, 2015, and continue on October 1 of each year through 2049. The outstanding balance at June 30, 2021 is $40,155,000. The annual requirements to amortize the outstanding indebtedness as of June 30, 2021, including interest, are as follows:
Beginning Ending Due Within
Governmental Activities: Balance Additions Deletions Balance One Year Lease Revenue Bonds:
2014 Refunding Bonds 41,040,000 $ $ - $ 885,000 $ 40,155,000 $ 930,000 Premium - 1,389,334 55,573 1, 55,573 333,761
Claims and Judgments 1,910,458 533,053 2, 297,446 146,065 987,190 Total OPEB Liability 11,766,566 - 11, 204,700 - 561,866 Net Pension Liablity 70,692,292 4, - 919,151 75, - 611,443 Compensated Absences 1,894,628 1, 1,557,603 212,562 1,549,587 380,069 Total 128,693,278 $ 6,664,766 $ 3,000,322 $ 132,357,722 $ 2,352,832 $ Business-type Activities:
Compensated Absences 90,529 $ 57,939 $ $ 45,521 102,947 $ 13,512 $ Total OPEB Liability 474,118 - 8,248 - 465,870
Net Pension Liability 2,475,890 - 152,021 2, - 627,911
Total 3,040,537 $ $ 209,960 $ 3, 111,195 $ 13,512 139,302 $ Fiscal Year Ending
June 30, Principal Interest Total
2022 $ 930,000 $ 1,660,388 $ 2,590,388
2023 975,000 1,612,762 2,587,762
2024 1,025,000 1,562,762 2,587,762
2025 1,075,000 1,510,263 2,585,263
2026 1,125,000 1,466,513 2,591,513
2027 - 2031 6,200,000 6,763,918 12,963,918
2032 - 2036 7,645,000 5,228,375 12,873,375
2037 - 2041 9,555,000 3,310,500 12,865,500
2043 - 2046 11,625,000 1,198,900 12,823,900
Totals 40,155,000 $ $ 24,314,381 $ 64,469,381
31 City of Montclair
Notes to Financial Statements
June 30, 2021
6) LONG-TERM DEBT – Continued
Claims and Judgments
The City is self-insured to some extent for general liability and workers' compensation claims. For more detail, see Note 9. The balance of claims payable at June 30, 2021 is $2,146,065.
B) Fiduciary Fund Long-Term Debt Activity
Tax Allocation Bonds
2019 A and B (Taxable) Tax Allocation Refunding Bonds
In December 2019, the Successor Agency to the City of Montclair Redevelopment Agency issued the 2019 Series A and B (Taxable) Tax Allocation Refunding Bonds in the amount of $19,890,000 and $12,660,000.
Proceeds from 2019 Bonds will be applied to: (i) refund bonds (2007A, 2007B, 2006A, 2006B, 2004, 2001 and 1997) incurred by the Former Agency, (ii) pay for the premium for a debt service reserve insurance policy to be issued by Build America Mutual Assurance Company and (iii) pay costs of issuance of the 2019 Bonds.
The prior bonds were issued to finance and refinance the former Redevelopment Agency’s undertakings with respect to four project areas known as Redevelopment Project Area No. 1, Montclair Redevelopment Project Area No. III, Redevelopment Project Area No. IV, and Redevelopment Project Area No. V.
The 2019 Bonds are payable from and secured by a pledge of Tax Revenues derived from the Bond Project Areas. Interest on the bonds is payable semi-annually on April 1 and October 1 commencing on April 1, 2020. The bonds carry interest rates ranging from 3.00% to 4.00% on the Series A Bonds and 1.856% to
2.897% on the Series B Bonds. Bond maturities begin October 1, 2020, and continue annually through October 1, 2035, ranging from $800,000 to $1,705,000 on Series A Bonds and $255,000 to $1,740,000 on Series B Bonds. The future debt service requirements are as follows:
Beginning Ending Due Within
Balance Additions Deletions Balance One Year
Tax Allocation Bonds:
2019A $ 19,890,000 $ 1, - $ 325,000 $ 18,565,000 $ 1,070,000 2019B 12,660,000 - 255,000 12,405,000 285,000
Premium on Bonds 3,137,177 - 196,074 2,941,103 -
Total $ 35,687,177 $ 1, - $ 776,074 $ 33,911,103 $ 1,355,000 Fiscal Year Ending
June 30, Principal Interest Total
2022 1,070,000 $ 704,800 $ 1,774,800 $
2023 1,105,000 672,175 1,777,175
2024 1,140,000 632,800 1,772,800
2025 1,195,000 586,100 1,781,100
2026 1,240,000 537,400 1,777,400
2027 - 2031 7,585,000 1,844,700 9,429,700
2032 - 2036 5,230,000 495,400 5,725,400
Totals 18,565,000 $ 5,473,375 $ 24,038,375 $
2019 A Tax Allocation Bonds
32 City of Montclair
Notes to Financial Statements
June 30, 2021
6) LONG-TERM DEBT – Continued
Dissolution of the former Redevelopment Agency
On December 29, 2011, the California Supreme Court upheld Assembly Bill X126 (the Bill) that provided for the dissolution of all redevelopment agencies in the State of California. The Bill provided that upon dissolution of the City’s former Redevelopment Agency, either the City or another unit of local government were to serve as the “Successor Agency” to hold the assets of the dissolved redevelopment agency until they are distributed to other units of state and local government. The City elected to become the Successor Agency for the former Redevelopment Agency in accordance with the Bill.
After enactment of the law, which occurred on June 28, 2011, redevelopment agencies in the State of California were prohibited from entering into new projects, obligations or commitments. Subject to the control of a newly established oversight board, remaining assets can only be used to pay enforceable obligations in existence at the date of dissolution, including the completion of any unfinished projects that were subject to legally enforceable contractual commitments.
A Redevelopment Property Tax Trust Fund (RPTTF) has been established, in accordance with State law, to allocate revenue to the Successor Agency in the amount that is necessary to pay the estimated annual payments on enforceable obligations of the former Redevelopment Agency until all enforceable obligations have been paid in full and all assets have been liquidated.
The former Redevelopment Agency pledged, as security for bonds it issued, a portion of the tax increment revenue that it would have received. The Successor Agency currently receives distributions from the RPTTF, as described above, to pay the debt service on the outstanding bonds. The Successor Agency appropriates each year, from these resources, amounts sufficient to cover the principal and interest requirements on the debt. Total principal and interest remaining on the debt is $39,708,239 with debt service requirements as indicated above. Below is a summarization, by project area, which shows the gross amount of property taxes, and county and tax entity payments made for the fiscal year:
Fiscal Year Ending
June 30, Principal Interest Total
2022 285,000 $ $ 640,112 355,112 $
2023 445,000 347,975 792,975
2024 450,000 338,829 788,829
2025 675,000 326,679 1,001,679
2026 610,000 312,062 922,062
2027 - 2031 4,270,000 1,246,080 5,516,080
2032 - 2036 5,670,000 338,127 6,008,127
Totals 12,405,000 $ 3,264,864 $ 15,669,864 $
2019 B Tax Allocation Bonds
Project Project Project Project Project Mission Blvd
Items Area I Area II Area III Area IV Area V Project Area Total City of Montclair as Successor Agency
for the City of Montclair
Redevelopment Agency
Allocations to Redevelopment Obligation
Retirement Fund (RORF)
Tax Increment Collections $ 178,321 $ 7,212,912 - $ $ 3,264,888 $ 7,620,055 $ 2,208,203 $ 20,484,379 County Administration Charges (869) (34,530) - (15,712) (36,938) (10,582) (98,631) Payments to Taxing Entities (167,578) (6,190,882) - (3,028,760) (6,975,467) (2,187,719) (18,550,406) Net Tax Increment Available for
Debt Service $ 9,874 $ 987,500 - $ $ 220,416 $ 607,650 $ 9,902 $ 1,835,342 33 City of Montclair
Notes to Financial Statements
June 30, 2021
7) PENSIONS PLANS
General Information about the Pension Plans
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) administered by the California Public Employees’ Retirement System (CalPERS.) The Plan consists of individual rate plans (benefit tiers) within a safety risk pool (police and fire) and a miscellaneous risk pool. 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 GASB Statement No. 68.
Individual employers may sponsor more than one rate plan in the miscellaneous or safety risk pools. The City sponsors nine rate plans (three miscellaneous and six safety). 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.
Benefits Provided – The Plan is a cost-sharing multiple-employer defined benefit pension plan administered by the California Public Employees’ Retirement System (CalPERS). A full description of the pension plan benefit provisions, assumptions for funding purposes but not accounting purposes, and membership information is listed in the June 30, 2019 Annual Actuarial Valuation Report. Details of the benefits provided can be obtained in Appendix B of the June 30, 2019 actuarial valuation report. This report is a publicly available valuation report that can be obtained at CalPERS’ website under Forms and Publications.
The rate plan provisions and benefits in effect at June 30, 2021, are summarized as follows:
Prior to On or after On or after
Hire date June 21, 2010 June 21, 2010 January 1, 2013
Benefit formula 3% @ 60 2% @ 60 2.7% @ 57
Benefit vesting schedule 5 years service 5 years service 5 years service Benefit payments monthly for life monthly for life monthly for life Retirement age 50 50 50
Monthly benefits, as a % of eligible compensation (1) (1) (1) Required employee contribution rates 7.79% 6.92% 6.75%
Required employer contribution rates 12.66% + $2,044,019 11.164% + $17,666 10.878% + $10,142 Prior to On or after On or after
Hire date June 27, 2005 June 27, 2005 January 1, 2013
Benefit formula 3% @ 50 3% @ 55 2.7% @ 57
Benefit vesting schedule 5 years service 5 years service 5 years service Benefit payments monthly for life monthly for life monthly for life Retirement age 50 50 50
Monthly benefits, as a % of eligible compensation (1) (1) (1) Required employee contribution rates 8.99% 8.99% 13%
Required employer contribution rates 23.674% + $1,663,342 21.746% + $57,440 13.044% + $7,872 Safety - Police
Miscellaneous
34 City of Montclair
Notes to Financial Statements
June 30, 2021
7) PENSIONS PLANS – Continued
Contributions – Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. Funding contributions for the Plans are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees.
Beginning in fiscal year 2016, CalPERS collects employer contributions for the Plan as a percentage of payroll for the normal cost portion as noted in the rates above and as a dollar amount for contributions toward the unfunded liability. The dollar amounts are billed on a monthly basis. The City’s required contribution for the unfunded liability was $5,270,342 in fiscal year 2021.
The City’s contributions to the Plan for the year ended June 30, 2021 were $7,002,204.
Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions As of June 30, 2021, the City reported a liability of $78,239,354 for its proportionate share of the net pension liability. The City’s net pension liability for the Plan is measured as the proportionate share of the net pension liability. The net pension liability of the Plan is measured as of June 30, 2020, and the total pension liability for the Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2019 rolled forward to June 30, 2020 using standard update procedures. The City’s proportion of the net pension liability was based on a projection of the City’s long-term share of contributions to the pension plan relative to the projected contributions of all participating employers, actuarially determined.
The City’s proportionate share of the Plan’s net pension liability as of June 30, 2019 and 2020 was as follows:
For the year ended June 30, 2021, the City recognized pension expense of $16,399,213. At June 30, 2021, the City reported deferred outflows of resources and deferred inflows of resources related to the Plan from the following sources:
Prior to On or after On or after
Hire date June 27, 2005 June 27, 2005 January 1, 2013
Benefit formula 3% @ 50 3% @ 55 2.7% @ 57
Benefit vesting schedule 5 years service 5 years service 5 years service Benefit payments monthly for life monthly for life monthly for life Retirement age 50 50 50
Monthly benefits, as a % of eligible compensation (1) (1) (1) Required employee contribution rates 8.99% 8.99% 13.75% Required employer contribution rates 25.540% + $1,481,915 23.558% + $26,450 13.884% + $1,496 (1) - Depending on years of service
Safety - Fire
Proportion - June 30, 2019 0.71404%
Proportion - June 30, 2020 0.71908%
Change - Increase (Decrease) 0.00504%
35 City of Montclair
Notes to Financial Statements
June 30, 2021
7) PENSIONS PLANS – Continued
$7,002,204 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2021. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:
Actuarial Assumptions – The total pension liabilities in the June 30, 2019 actuarial valuations were determined using the following actuarial assumptions:
Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to measurement date 7,002,204 $ - $ Differences between actual and expected experience 5,236,299 - Changes in assumptions - 382,025
Change in employer's proportion 580,992 -
Differences between the employer's contributions and
the employer's proportionate share of contributions - 1, 936,053 Net differences between projected and actual
earnings on plan investments 1,955,091 -
Total 14,774,586 $ 2, $ 318,078
Year Ending
June 30,
2022 651,033 $
2023 2,140,698
2024 1,703,293
2025 959,280
2026 -
Thereafter -
Valuation date June 30, 2019
Measurement date June 30, 2020
Actuarial cost method entry-age normal
Actuarial assumptions:
Discount rate 7.15%
Inflation 2.75%
Projected salary increase (1)
Investment rate of return 7.15%
Mortality (2)
(1) Depending on age, service and type of employment
(2) Derived using CalPERS’ Membership Data for all Funds. 36 City of Montclair
Notes to Financial Statements
June 30, 2021
7) PENSIONS PLANS – Continued
The mortality table used was developed based on CalPERS-specific data. The table includes 15 years of mortality improvements using Society of Actuaries Scale 90% of scale MP 2016. For more details on this table, please refer to the December 2017 experience study report (based on CalPERS demographic data from 1997 to 2015) that can be found on the CalPERS website.
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 best-estimate ranges of 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 returns were calculated over the short-term (first 10 years) and the long-term (11-60 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:
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.
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 for each Plan, calculated using the discount rate for each Plan, as well as what the City’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1–percentage point lower or 1–percentage point higher than the current rate:
New Strategic Real Return Real Return
Asset Class Allocation Years 1 - 10 (1) Years 11+ (2)
Global Equity 50% 4.80% 5.98%
Global Fixed Income 28% 1.00% 2.62%
Inflation Assets - 0.77% 1.81%
Private Equity 8% 6.30% 7.23%
Real Assets 13% 3.75% 4.93%
Liquidity 1% - -0.92%
(1) An expected inflation of 2.0% used for this period. (2) An expected inflation of 2.92% used for this period. 37 City of Montclair
Notes to Financial Statements
June 30, 2021
7) PENSIONS PLANS – Continued
Pension Plan Fiduciary Net Position – Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports.
Payable to the Pension Plan
At June 30, 2021, the City reported a payable of $0 for the outstanding amount of contributions to the pension plan required for the year ended June 30, 2021.
8) OTHER POSTEMPLOYMENT EMPLOYEE BENEFITS
Plan Description – The City’s defined benefit OPEB plan, (the Plan), provides OPEB for all eligible miscellaneous and public safety employees of the City. The plan is a single-employer defined benefit OPEB plan administered by the City. The benefit terms are defined in the applicable Memorandum’s of Understanding for each bargaining unit and may be amended by City Council. No assets are accumulated in a trust that meets the criteria in paragraph 4 of Statement 75.
Benefits Provided – Substantially all of the City's employees may become eligible for those benefits if they retire after 15 years of continuous service to the City under a normal service retirement. Those and similar benefits for active employees are provided through several insurance companies whose premiums are based on the benefits paid during the year. Benefits are provided as shown below:
1% Decrease Discount Rate 1% Increase
(6.15%) (7.15%) (8.15%)
Net Pension Liability 110,434,947 $ 78, $ 51, 239,354 $ 746,436 SBPEA Management(1) Police Fire
Eligibility
- Lesser of: - Lesser of: - Lesser of: - n/a
$200/mo. If
retired < 7/1/13
$551/mo. $200/mo. If
retired <
$230/mo. If
retired > 7/1/13
Act Single Cap $230/mo. If
retired >
Act Single Cap Act Single Cap
- Lesser of: - Lesser of: (4) - Lesser of: - Greater of:
$532.16/mo. $551/mo. $532.16/mo. $300/mo.
Act Single Cap Act Single Cap
or 2-party Cap
Act Single Cap $400/mo. at 30
years
Dental & Vision
if Single Medical
Max
$532.16/mo.
Surviving Spouse Benefit
Medicare Part A & B
- City also contributes toward Part A premiums if hired < 4/1/86 Dental, Vision, & Life - None other than management at 25 years service - Retire directly from City under CalPERS (age 50 and 5 years of service or disability) (2)
Age 50 and 15 Years
Service (3)
Age 50 and 25 Years
Service
- Surviving spouse can elect medical, dental, and vision coverage at own cost
- City Contributes toward Part B premiums subject to caps 38 City of Montclair
Notes to Financial Statements
June 30, 2021
8) OTHER POSTEMPLOYMENT EMPLOYEE BENEFITS
1) 48 consecutive months of City employment in a management position contiguous to retirement date. 2) PEPRA Employees must be age 52 to retire under CalPERS. 3) Hired < 7/1/04, retired < 7/1/20. Active single cap currently $825 for SBPEA and Fire, $875 for Management, and $948.75 for Police (generally unchanged since 2008/09). 4) Cap can be used towards spouse premium. All other caps can only be used toward retiree premium.
Employees Covered by Benefit Terms – As of the June 30, 2020 actuarial valuation, the following current and former employees were covered by the benefit terms under the Plan:
Contributions - The contribution requirements of plan members and the City are established and may be amended by the City Council, and/or the employee associations. Currently, contributions are not required from plan members. The City is currently funding this OPEB liability on a pay-as-you-go basis. This obligation is typically liquidated from the General Fund and responsible Enterprise Funds.
Total OPEB Liability - The City’s Total OPEB liability was measured as of June 30, 2020 and was determined by an actuarial valuation dated June 30, 2020, based on the following actuarial methods and assumptions:
Valuation Date June 30, 2020
Actuarial Cost Method Entry Age Actuarial Cost
Contribution Policy Pay-as-you-go
Mortality Mortality projected fully generational with Scale MP-2021 CalPERS 1997-2015 Experience Study
Age at Retirement 50 (52 for PEPRA)
Health Care Trend Rate 6.75% initial, 3.75% ultimate - Non-Medicare
5.85% initial, 3.75% ultimate - Medicare
Inflation Rate 2.50%
Salary Changes 3.75%
Discount Rate 2.21% - Bond Buyer 20-year Bond index as of 6/30/20
3.50% - Bond Buyer 20-year Bond index as of 6/30/19
3.87% - Bond Buyer 20-year Bond index as of 6/30/18
3.58% - Bond Buyer 20-year Bond Index as of 6/30/17
Retirees or spouses of retirees currently receiving benefits 101 Inactives entitled to but not yet receviging benefits - Active employees 152
Total 253
39 City of Montclair
Notes to Financial Statements
June 30, 2021
8) OTHER POSTEMPLOYMENT BENEFITS - Continued
Changes in the Total OPEB Liability
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 1-percentage-point lower or 1- percentage-point higher than the current discount rate:
Sensitivity of the Total OPEB Liability to changes in the Healthcare Cost Trend Rates - The following presents the total OPEB liability of the City, as well as what the City’s total OPEB would be if it were calculated using a healthcare cost trend rate that is 1-percentage-point lower or 1-percentage-point higher than the current healthcare cost trend rate:
OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB - For the year ended June 30, 2021, the City recognized OPEB expense/(income) of $(398,212). The City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:
Total OPEB
Liability (TOL)
Balance at June 30, 2020 (June 30, 2019 measurement date) 12,240,684 $ Changes in the year:
Service cost 301,328
Interest on the total OPEB liability 428,974
Assumption Changes 1,899,054
Actual vs. Expected Experience (1,176,877)
Changes in benefit terms (1,094,234)
Benefit payments, including refunds (571,193)
Net changes (212,948)
Balance at June 30, 2021 (June 30, 2020 measurement date) $ 12,027,736 1% Decrease Discount Rate 1% Increase
(1.21%) (2.21%) (3.21%)
Total OPEB liability (asset) 13, $ 688,375 $ 10, 12,027,736 $ 655,767 Current
Healthcare
1% Decrease Trend 1% Increase
Total OPEB liability (asset) 11, $ 696,881 $ 12, 12,027,736 $ 333,306 Deferred Outflows Deferred Inflows
of Resources of Resources
OPEB Contributions Subsequent to the Measurement Date 482,959 $ - $ Changes of Assumptions 1,960,590 604,452
Net differences between projected and actual
earnings on plan investments - 1, 013,422
Total 2,443,549 $ 1, $ 617,874
40 City of Montclair
Notes to Financial Statements
June 30, 2021
8) OTHER POSTEMPLOYMENT BENEFITS - Continued
Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows:
The $482,959 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 total OPEB liability during the fiscal year ended June 30, 2022.
9) SELF-INSURANCE PROGRAM
The City is self-insured for workers' compensation claims up to $500,000 for each occurrence and for general liability claims up to $200,000. Excess liability coverage above the self-insurance amounts is provided through the California Insurance Pool Authority (CIPA). CIPA, a public entity risk pool was established to pool resources, share risk, purchase excess insurance and share costs for professional risk management, and claims administration.
Workers' Compensation and Employers Liability Pool Contract is limited per accident at $3,000,000 in excess of the City's self-insurance retention stated above. Portions of general liability exceeding the above-mentioned amounts are covered by CIPA up to a maximum $40,000,000 each occurrence and in the aggregate by Everest National Insurance Company (up to $10,000,000), and American Merchants Casualty Insurance Company (up to $15,000,000), and by Arch Specialty Insurance Company (up to $15,000,000), in that order.
Member cities make payments to CIPA based on underwriting estimates. Additional coverage for general liability claims is maintained through CIPA from a commercial insurer for claims in excess of per claim and annual aggregate amounts. Complete financial statements for CIPA may be obtained from their offices at the following address: CIPA, 240 Newport Center Drive, Suite 210, Newport Beach, CA 92660.
As of June 30, 2021, third party claims administrators estimated $2,146,065 in necessary liability reserves for both general liability and workers' compensation claims. The City has not experienced a significant reduction in insurance coverage from the prior year. Additionally, the amount of settlements has not exceeded budgeted coverage for each of the past three fiscal years.
While the ultimate losses incurred through June 30, 2021 are dependent on future developments, based upon information from the City Attorney, outside counsel, service agents and others involved with the administration of the programs, City management believes that the estimated aggregate amount is adequate to cover such losses. Costs relating to the litigation of claims are charged to expenditures as incurred. Claims liabilities are reported when it is probable that a loss has occurred and the amount of that loss can be reasonably estimated.
These losses include an estimate of claims that have been incurred but not reported.
Claims liabilities at June 30, 2021 represent the City's best estimate, based on available information, as follows:
Year Ending
June 30,
2022 (34,280) $
2023 (34,280)
2024 10,595
2025 131,569
2026 148,753
Thereafter 120,359
Beginning End
of Year Current Year Claim of Year
Fiscal Year Liability Claims Payments Liability
2020-21 $ 1,910,458 $ 533,053 $ 297,446 $ 2,146,065
2019-20 2,049,706 223,156 362,404 1,910,458
41 City of Montclair
Notes to Financial Statements
June 30, 2021
10) FUND BALANCES
The details of the fund balances as of June 30, 2021 are presented below:
11) COMMITMENTS AND CONTINGENCIES
The City participates in several federal and state programs. These programs are subject to examination by the grantors and the amount, if any, of expenditures, which may be disallowed by the granting agencies, cannot be determined at this time.
The estimated amount of remaining construction obligations at year-end is $5,091,850. 12) SUBSEQUENT EVENTS
On October 1, 2021, the City issued the 2021 Taxable Pension Obligation Bonds (the Bonds). The bonds have a principal amount of $62,190,000 and were issued to provide funding for the City to make contributions towards the unfunded pension liabilities with the California Public Employee’s Retirement System.
On October 1, 2021, the Montclair Public Financing Authority issued the Series 2021A Lease Revenue Bonds (the Bonds). The bonds have a principal amount of $45,000,000 and were issued to fund the construction of infrastructure projects.
Other Total
General CARES Successor Economic Governmental Governmental Nonspendable: Fund Act Agency Bonds Development Funds Funds Prepaids 9,191 $ - $ - $ - $ 932 $ 10,123 $
Restricted for:
Housing - - - - 5,410,711 5, 410,711
Public Safety - - - - 1,483,768 1, 483,768
Transportation - - - - 6,758,756 6, 758,756
Comm. Development - - 13, 018,598 2,571,646 - 15,590,244 Committed to:
Comm. Development - - 5, - 680,663 5, - 680,663
Assigned to:
Post-employ. Benefits 2,700,000 - - - 2, - 700,000
Retiree Medical Liab. 900,000 - - - - 900,000
Technology 320,751 - - - - 320,751
Self Insurance 850,000 - - - - 850,000
Equip. Replacement 1,362,067 - - - 1, - 362,067
Unanticipated Pers. 700,000 - - - - 700,000
Building Maintenance 600,000 - - - - 600,000
Contingencies 125,283 - - - - 125,283
Unassigned 9,202,281 (434,661) - (185, - 010) 8,582,610 Total Fund Balance 16,769,573 $ $ (434,661) $ 13,018,598 $ 5,680,663 $ 16,040,803 $ 51,074,976 42 REQUIRED SUPPLEMENTARY INFORMATION
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 12,576,911 $ 12,576,911 $ 12,576,911 $ - Resources (Inflows):
Taxes 21,418,906 23,417,940 31,684,474 8,266,534
Licenses and Permits 514,325 506,825 510,377 3,552
Intergovernmental 564,155 115,000 192,342 77,342
Charges for Services 3,810,200 3,730,900 4,174,981 444,081 Use of Money and Property 377,760 344,010 179,347 (164,663) Fines and Forfeitures 470,400 361,200 334,189 (27,011)
Miscellaneous 293,400 88,000 98,776 10,776
Transfers In - 100,000 100,000 -
Amounts Available for Appropriation 40,026,057 41,140,786 49,851,397 8,710,611 Charges to Appropriation (Outflow):
General Government
City Council 251,218 251,218 341,119 (89,901)
City Manager 276,066 522,178 538,399 (16,221)
Administration 27,064 27,064 40,251 (13,187)
Financial Services 528,488 528,688 638,286 (109,598)
Solid Waste Disposal 2,470,934 2,470,734 2,876,420 (405,686) City Clerk 250,402 280,402 258,880 21,522
Personnel/Risk Assessment 404,409 430,409 426,076 4,333 Information Technology Services 698,398 698,398 808,598 (110,200) Central Services 271,470 271,470 294,101 (22,631)
City Attorney 283,053 283,053 275,743 7,310
Non-Departmental 3,428,465 3,428,465 4,125,875 (697,410) Public Safety
Police Administration 3,374,137 3,376,362 3,367,882 8,480 Police Support Services 726,017 727,805 705,966 21,839
Technical Services 329,789 206,087 220,854 (14,767)
Records Bureau 639,732 644,625 516,356 128,269
Investigations 1,063,139 1,095,354 1,112,880 (17,526)
Uniform Patrol 4,870,076 4,416,878 4,707,111 (290,233)
Communications 631,482 680,764 677,104 3,660
Volunteer Services 53,418 52,871 47,565 5,306
Fire Administration 453,090 453,090 427,377 25,713
Fire Prevention 123,955 123,955 96,055 27,900
Emergency Services 3,266,720 3,102,557 2,929,949 172,608 Personnel Development 4,500 9,175 7,264 1,911
Buildings and Grounds 3,000 3,000 1,748 1,252
Emergency Preparedness 74,132 73,452 72,249 1,203
Code Enforcement 311,895 311,895 390,655 (78,760)
City of Montclair
Budgetary Comparison Schedule
General Fund
Year Ended June 30, 2021
Budgeted Amounts
43 Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Charges to Appropriation (Outflow): - Continued
Community Development
Planning Commission 8,075 $ 8,075 $ 7,054 $ 1,021 $
Community Development Administration 82,627 82,627 87,176 (4,549) Current Planning 190,110 190,110 195,303 (5,193)
Advance Planning 109,108 109,108 115,677 (6,569)
Field Inspection 149,172 149,172 118,597 30,575
Plan Check 75,382 75,382 94,168 (18,786)
Building Operations 150,396 150,396 154,467 (4,071)
Recreation 824,856 898,371 614,457 283,914
Clinic 51,586 51,586 51,856 (270)
Senior Citizens 221 221 31,000 (30,779)
Nutritional Meals 13,170 13,170 102,095 (88,925)
Family and Health Education 57,537 57,537 42,824 14,713 Public Works
Management and Construction 232,387 260,087 340,841 (80,754) Public Works Inspection 88,138 88,138 84,305 3,833
Traffic Safety Engineering 11,934 11,934 94,147 (82,213) Graffiti Abatement 74,964 74,964 3,719 71,245
Street Maintenance 440,323 449,623 688,042 (238,419)
Signing/Painting 24,757 24,757 46,711 (21,954)
Street Sweeping 27,140 27,140 24,636 2,504
Parks Maintenance 365,545 380,545 332,246 48,299
Tree Maintenance 20,617 20,617 16,126 4,491
Vehicle Maintenance 341,822 360,822 383,055 (22,233)
Building Maintenance Services 225,958 246,958 202,339 44,619 Heating and Air Conditioning 107,208 137,738 144,511 (6,773) Janitorial Services 242,698 244,198 256,615 (12,417)
Capital Outlay 10,000 56,612 279 56,333
Transfers Out - - 2,937,950 (2,937,950)
Total Charges to Appropriations 28,740,780 28,639,837 33,074,959 (4,435,122) Budgetary Fund Balance, June 30 $ 12,500,949 11,285,277 $ 16,776,438 $ 4,275,489 $ Year Ended June 30, 2021
Budgeted Amounts
City of Montclair
Budgetary Comparison Schedule - Continued
General Fund
44 Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 - $ - $ - $ - $
Resources (Inflows):
Intergovernmental - 1,462,764 997,963 (464,801)
Transfers In - - 457,449 457,449
Amounts Available for Appropriation - 1,462,764 1,455,412 (7,352) Charges to Appropriation (Outflow):
General Government - 975,176 975,176 -
Capital Outlay - 829,746 914,897 (85,151)
Total Charges to Appropriations - 1,804,922 1,890,073 (85,151) Budgetary Fund Balance, June 30 $ (342,158 - $ ) $ (434,661) $ (92,503) Budgeted Amounts
City of Montclair
Budgetary Comparison Schedule
CARES Act Special Revenue Fund
Year Ended June 30, 2021
45 City of Montclair
Notes to Required Supplementary Information
June 30, 2021
General Budget Policies
The City Council approves each year’s budget submitted by the City Manager prior to the beginning of the new fiscal year. Public hearings are conducted prior to its adoption by the Council. Supplemental appropriations, where required during the period, are also approved by the Council. Intradepartmental budget changes are approved by the City Manager. In most cases, expenditures may not exceed appropriations at the department level. At fiscal year-end, all operating budget appropriations lapse. Budgets for governmental funds are adopted on a basis consistent with generally accepted accounting principles (GAAP).
The following funds did not have an adopted budget:
Justice Assistance Grant
Montclair Community Foundation
Montclair Housing Authority
Homeless Housing Assistance
46 City of Montclair
Required Supplementary Information
June 30, 2021
CHANGES IN TOTAL OPEB LIABILITY AND RELATED RATIOS
Last 10 Years*
*Fiscal year 2018 was the first year of implementation; therefore, 10 years of information are not yet available.
Notes to Schedule:
No assets are accumulated in a trust that meets the criteria in GASBS No. 75, paragraph 4, to pay related benefits.
Benefit Changes: As of the June 30, 2020 Measurement Date, non-management actives who retired from the City will not be able to elect a City medical plan at retirement. Additionally, the City reimbursed cap amount was decreased until the eligible employee reaches the age CalPERS retirement formula.
Changes in Assumptions: As of the June 30, 2020 Measurement Date, the discount rate was decreased from
3.50% to 2.5%, the mortality improvement scale was updated to Scale MP-2021, and general inflation decreased from 2.75% to 2.5%
2020 2019 2018 2017
Total OPEB Liability
Service cost $ 301,328 $ 269,472 $ 279,017 $ 318,968
Interest on total OPEB liability 428,974 449,101 423,080 363,789 Changes in assumptions 722,177 463,716 (363,175) (1,002,248) Changes in benefits (1,094,234) - - -
Benefit payments, including refunds (571,193) (553,563) (531,634) (642,745) Net change in total OPEB liability (212,948) 628,726 (192,712) (962,236) Total OPEB liability - beginning 12,240,684 11,611,958 11,804,670 12,766,906 Total OPEB liability - ending (a) $ 12,027,736 $ 12,240,684 $ 11,611,958 $ 11,804,670 Covered - employee payroll $ 12,337,306 $ 12,201,903 $ 11,361,672 $ 11,850,580 Total OPEB liability as a percentage of
covered-employee payroll 97.49% 100.32% 102.20% 99.61%
Measurement Period
47 City of Montclair
Required Supplementary Information
June 30, 2021
Schedule of Changes in the Net Pension Liability
And Related Ratios – Last 10 Years*
Agent Multiple-employer Plan
*Fiscal Year 2015 was the first year of implementation; therefore, only four years are reported. In addition, the plan was converted to the cost-sharing pool for the measurement period ended June 30, 2018.
Notes to Schedule of Changes in Net Pension Liability and Related Ratios:
Benefit Changes: The figures above do not include any liability impact that may have resulted from plan changes which occurred after the June 30, 2016 valuation date. This applies to voluntary benefit changes as well as any offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes).
Changes in Assumptions: In 2017, the accounting discount rate changed from 7.65% to 7.15%. In 2016, there were no changes. In 2015, amounts reported reflect an adjustment of the discount rate from 7.5 percent (net of administrative expense) to 7.165 percent (without a reduction for pension plan administrative expense). In 2014, amounts reported were based on the 7.5 discount rate. In 2018, the Agent multiple-employer miscellaneous pension plan was converted to the cost-sharing pool with CalPERS.
` 2017 2016 2015 2014
Total Pension Liability
Service cost $ 1,116,309 $ 1,034,296 $ 1,051,926 $ 1,111,086 Interest on total pension liability 5,776,058 5,661,587 5,487,626 5,293,536 Differences between expected and actual experience (422,026) (408,943) (299,514) - Changes in assumptions 4,515,966 (1,247,901) - -
Changes in benefits - - - -
Benefit payments, including refunds (4,197,477) (3,911,463) (3,784,153) (3,564,687) Net change in total pension liability 6,788,830 2,375,477 1,207,984 2,839,935 Total pension liability - beginning 78,230,670 75,855,193 74,647,209 71,807,274 Total pension liability - ending (a) $ 85,019,500 $ 78,230,670 $ 75,855,193 $ 74,647,209 Plan Fiduciary Net Position
Contributions - employer $ 1,693,037 $ 1,526,904 $ 1,316,337 $ 1,139,453 Contributions - employee 511,740 615,134 560,336 471,260 Net investment income 5,990,392 263,579 1,262,238 8,533,869 Benefit payments (4,197,477) (3,911,463) (3,784,153) (3,564,687) Administrative Expense (79,948) (33,940) (62,571) -
Net change in plan fiduciary net position 3,917,744 (1,539,786) (707,813) 6,579,895 Plan fiduciary net position - beginning 54,149,399 55,689,185 56,396,998 49,817,103 Plan fiduciary net position - ending (b) $ 58,067,143 $ 54,149,399 $ 55,689,185 $ 56,396,998 Net pension liability - ending (a) - (b) $ 26,952,357 $ 24,081,271 $ 20,166,008 $ 18,250,211 Plan fiduciary net position as a percentage
of the total pension liability 68.30% 69.22% 73.42% 75.55% Covered payroll $ 6,106,387 $ 6,138,986 $ 6,056,685 $ 5,950,546 Net pension liability as percentage of
covered payroll 441.38% 392.27% 332.95% 306.70%
Measurement Period
48 City of Montclair
Required Supplementary Information
June 30, 2021
Schedule of Contributions – Last 10 Years*
Agent Multiple-employer Plan
*Fiscal year 2015 was the first year of implementation, therefore, only four years are reported. In addition, the plan was converted to the cost-sharing pool for the measurement period ended June 30, 2018.
Valuation Date: 6/30/13, 6/30/14, 6/30/15, and 6/30/16
Contributions in
Relation to the Contributions
Contractually Actuarially Contribution as a % of
Required Determined Deficiency/ Covered Covered
Fiscal Year Contributions Contributions (Excess) Payroll Payroll 2018 1,898,964 $ (1,898,964) $ - $ 6,106,387 $ 31.10%
2017 1,693,037 (1,693,037) - 6,138,986 27.58%
2016 1,526,904 (1,526,904) - 6,056,685 25.21%
2015 1,164,198 (1,164,198) - 5,950,546 19.56%
49 City of Montclair
Required Supplementary Information
June 30, 2021
Schedule of the City’s Proportionate Share
of the Net Pension Liability – Last 10 Years*
Cost-sharing Plan
*Fiscal year 2015 was the first year of implementation; therefore, ten years of information are not yet available.
Notes to Schedule of the City’s Proportionate Share of the Net Pension Liability:
Benefit Changes: The figures above do not include any liability impact that may have resulted from plan changes which occurred after the June 30, 2016 valuation date. This applies to voluntary benefit changes as well as any offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes).
Changes in Assumptions: In 2018, the City’s miscellaneous Agent multiple-employer plan was converted to the risk pools and is now included as part of the risk pool reporting. In 2017, the accounting discount rate changed from 7.65% to 7.15%. In 2016, there were no changes. In 2015, amounts reported reflect an adjustment of the discount rate from 7.5 percent (net of administrative expense) to 7.65 percent (without a reduction for pension plan administrative expense). In 2014, amounts reported were based on the 7.5 discount rate.
Proportionate Plan Fiduciary
Proportion of Proportionate Share of the Net Net Position as the Net Pension Share of Net Covered Pension Liability a % of the Total Measurement Date Liability Pension Liability Payroll as a % of Payroll Pension Liability 2020 0.71908% 78,239,354 $ 12,337,306 $ 634.17% 75.10%
2019 0.71404% 73,168,182 11,799,285 620.11% 68.61%
2018 0.71058% 68,473,398 12,111,468 565.36% 69.53%
2017 0.40340% 40,005,736 5,742,193 696.70% 69.71%
2016 0.40861% 35,357,128 5,706,922 619.55% 70.87%
2015 0.41915% 28,770,251 5,523,210 520.90% 75.56%
2014 0.40976% 25,497,439 5,309,711 480.20% 78.20%
Schedule of the City's Proportionate Share of the Net Pension Liability Last 10 Years*
50 City of Montclair
Required Supplementary Information
June 30, 2021
Schedule of Pension Contributions – Last 10 Years*
Cost-sharing Plan
*Fiscal year 2015 was the first year of implementation; therefore, ten years of information are not yet available.
Valuation Date: 6/30/13, 6/30/14, 6/30/15, 6/30/16, 6/30/17, 6/30/18, and 6/30/19 Contributions in
Relation to the Contributions
Contractually Actuarially Contribution as a % of
Required Determined Deficiency/ Covered Covered
Fiscal Year Contributions Contributions (Excess) Payroll Payroll 2021 7,002,204 $ $ (7,002,204) $ 11,990,558 - $ 58.40%
2020 6,528,038 (6,528,038) 12,337,506 - 52.91%
2019 5,540,282 (5,540,282) 11,799,285 - 46.95%
2018 2,870,221 (2,870,221) 6,005,081 - 47.80%
2017 2,687,316 (2,687,316) 5,742,193 - 46.80%
2016 2,418,705 (2,418,705) 5,706,922 - 42.38%
2015 1,960,293 (1,960,293) 5,523,210 - 35.49%
Schedule of Plan Contributions
Last 10 Years*
51 SUPPLEMENTARY INFORMATION
City of Montclair
Combining Balance Sheet
Non-major Funds
June 30, 2021
Community
Park Development
Gas Tax Measure I Traffic Safety Development Block Grant ASSETS
Pooled Cash and Investments $ 545,541 $ 3,613,223 $ 9,604 $ 1,149,207 $ 530 Receivables:
Accounts 29,707 - - 36,630 -
Notes and Loans - - - - -
Accrued Interest - - - - -
Prepaid Costs - - - - -
Due from Other Governments 181,233 186,871 3,963 - -
Due from Other Funds 223 442,941 35,053 - -
Total Assets $ 4,243,035 756,704 $ 48,620 $ 1,149,207 $ 37,160 $
LIABILITIES
Accounts Payable 108,822 $ 1,062 $ - $ - $ 2,074 $
Accrued Liabilities 11,694 - - - -
Deposits Payable - - - - -
Unearned Revenue - - - - -
Due to Other Governments - - 5,369 - -
Due to Other Funds 277 - - - 36,630
Total Liabilities 120,793 1,062 5,369 - 38,704
DEFERRED INFLOWS OF RESOURCES
Unavailable Revenues - Grants - - - - -
Total Deferred Inflows of Resources - - - - -
FUND BALANCES (DEFICITS)
Nonspendable - - - - -
Restricted 635,911 4,241,973 43,251 1,149,207 -
Unassigned - - - - (1,544)
Total Fund Balances (Deficits) 635,911 4,241,973 43,251 1,149,207 (1,544) Total Liabilities, Deferred Inflows of
Resources, and Fund Balances 756,704 $ 4,243,035 $ 48,620 $ 1,149,207 $ 37,160 $ Special Revenue Funds
52 State Asset Federal Asset
Air Quality Older State Asset Public Forfeiture Forfeiture Forfeiture School Improvement American Act Forfeiture Safety DOJ Section 11489 Treasury District Grant $ 218,033 $ 4,216 $ 111,798 $ 222,733 $ 403,728 $ 52,052 $ 92,631 $ - 37,352 - - - - - - -
- - - - - - - -
- - - - - - - -
- - - - - - - -
13,112 - 39,543 - - - - -
- - - - - - - -
$ 231,145 $ 41,568 $ 111,798 $ 262,276 $ 403,728 $ 52,052 $ 92,631 $ - $ - $ 680 $ 26,976 - $ $ - $ - $ - $ -
3,536 - - - - - - -
- - - - 6,775 - - -
- - - - - - - -
- - - - - - - -
37,352 - - - - - - -
41,568 - 26,976 - 6,775 - - -
- - - - - - - -
- - - - - - - -
- - - - - - - -
231,145 111,798 - 235,300 403,728 45,277 92,631 -
- - - - - - - -
231,145 111,798 235,300 403,728 45,277 92,631 - -
$ 231,145 $ 41,568 $ 111,798 $ 262,276 $ 403,728 $ 52,052 $ 92,631 $ - Continued
Special Revenue Funds
53 City of Montclair
Combining Balance Sheet
Non-major Funds - Continued
June 30, 2021
Justice Crime Recycling After
Assistance Prevention Block School
SSLEF Grant PC 1202.5 Grant Program
ASSETS
Pooled Cash and Investments $ 348,892 $ 2,115 - $ $ 81,110 $ 568,262 Receivables:
Accounts - - - - -
Notes and Loans - - - - -
Accrued Interest - - - - -
Prepaid Costs - - - - -
Due from Other Governments - - 11 - -
Due from Other Funds - - - - -
Total Assets $ - 348,892 $ 2,126 $ 81,110 $ 568,262 $
LIABILITIES
Accounts Payable - $ - $ - $ - $ 13,970 $
Accrued Liabilities - - - - 28,230
Deposits Payable - - - - 225
Unearned Revenue - - - - -
Due to Other Governments - - - - -
Due to Other Funds - - - - -
Total Liabilities - - - - 42,425
DEFERRED INFLOWS OF RESOURCES
Unavailable Revenues - Grants - - - - -
Total Deferred Inflows of Resources - - - - -
FUND BALANCES (DEFICITS)
Nonspendable - - - - -
Restricted 348,892 - 2,126 81,110 525,837
Unassigned - - - - -
Total Fund Balances (Deficits) 348,892 - 2,126 81,110 525,837 Total Liabilities, Deferred Inflows of
Resources, and Fund Balances 348,892 $ - $ 2,126 $ 81,110 $ 568,262 $ Special Revenue Funds
54 Safety Disability Mt. Baldy Montclair Kaiser
Department Immunization E.M.S. Prop 30 Access- United Way Housing Permanente Grants Grant Paramedic SB 109 Bus. License Grant Corporation Grant $ 299,108 $ 516 $ 3,005 $ 122,616 $ 37,267 $ 2,223,922 - $ $ 4,879 3,831 4,748 - - - 113,940 - -
- - - - - - - -
- - - - - 1,396 - -
- - - - - - 932 -
- - - - - - - -
- - - - - - - -
$ 302,939 $ 516 $ 7,753 $ 122,616 $ 37,267 $ 2,340,190 - $ $ 4,879 $ 5,771 $ 6,210 - $ $ - $ 499 $ 17,611 - $ $ 259
- 516 1,543 - - 8,850 - -
- - - - - 73,070 - -
300,000 - - - - - - -
- - - (1,395) - - - -
- - - - - - - -
305,771 516 7,753 - (896) 99,531 - 259
- - - - - - - -
- - - - - - - -
- - - - - - 932 -
- - 122,616 - 38,163 2,239,727 - 4,620
(2,832) - - - - - - -
(2,832) - 122,616 - 38,163 2,240,659 - 4,620
$ 302,939 $ 516 $ 7,753 $ 122,616 $ 37,267 $ 2,340,190 - $ $ 4,879 Continued
Special Revenue Funds
55 City of Montclair
Combining Balance Sheet
Non-major Funds - Continued
June 30, 2021
Resource Title IIIB ASES Hope Thru
Center Sr. Supportive Community Supplemental Housing
Grant Services Foundation Grant Grant
ASSETS
Pooled Cash and Investments $ 17,194 $ 5,532 $ 158,143 $ 17,502 $ - Receivables:
Accounts 20,536 - - - -
Notes and Loans - - - - -
Accrued Interest - - - - -
Prepaid Costs - - - - -
Due from Other Governments - - - - -
Due from Other Funds - - - - -
Total Assets $ 26,068 17,194 $ 158,143 $ 17,502 $ - $
LIABILITIES
Accounts Payable 453 $ - $ - $ 4,049 $ - $
Accrued Liabilities - 1,534 - - -
Deposits Payable - - - - -
Unearned Revenue - - - - -
Due to Other Governments - - - - -
Due to Other Funds - 20,536 - - -
Total Liabilities 453 22,070 - 4,049 -
DEFERRED INFLOWS OF RESOURCES
Unavailable Revenues - Grants - - - - -
Total Deferred Inflows of Resources - - - - -
FUND BALANCES (DEFICITS)
Nonspendable - - - - -
Restricted 16,741 3,998 158,143 13,453 -
Unassigned - - - - -
Total Fund Balances (Deficits) 16,741 3,998 158,143 13,453 - Total Liabilities, Deferred Inflows of
Resources, and Fund Balances 17,194 $ 26,068 $ 158,143 $ 17,502 $ - $ Special Revenue Funds
56 Montclair Public Homeless Healthy
Park CFD 2011-1 CFD 2011-2 Housing Education Emergency Community SB2 Planning Maintenance Paseos Arrow Station Authority Govt. PEG Aid Program Strategic Plan Grant $ 86,476 $ 143,196 $ 90,788 $ 4,471 $ 40,491 $ 17,848 - $ $ - - - - 9,783 - 43,645 - -
- - 2,599,461 - - - - -
- - - - - - - -
- - - - - - - -
- - 446 - - - - -
- - - - - - - -
$ 86,476 $ 143,196 $ 91,234 $ 2,603,932 $ 50,274 $ 43,645 $ 17,848 $ - $ 4,788 $ 1,534 $ 497 $ - $ - $ - $ 912 $ -
- 64 - - - - - -
- - - - - - - -
- - - - - - - -
- - - - - - - -
- 7,500 - - 43,645 - - -
4,788 1,598 7,997 - 43,645 - 912 -
- - - - - - - -
- - - - - - - -
- - - - - - - -
81,688 141,598 83,237 2,603,932 50,274 16,936 - -
- - - - - - - -
81,688 141,598 83,237 2,603,932 50,274 16,936 - -
$ 86,476 $ 143,196 $ 91,234 $ 2,603,932 $ 50,274 $ 43,645 $ 17,848 $ - Continued
Special Revenue Funds
57 City of Montclair
Combining Balance Sheet
Non-major Funds - Continued
June 30, 2021
Homeless Statewide
Housing Park Pavement Underground General Plan
Assistance Development Impact Fees In-lieu Update
ASSETS
Pooled Cash and Investments $ 13,725 $ 231,952 - $ $ 340,517 $ 88,621 Receivables:
Accounts 180,634 - - - -
Notes and Loans - - - - -
Accrued Interest - - - - -
Prepaid Costs - - - - -
Due from Other Governments - 19,457 - - -
Due from Other Funds - - - - -
Total Assets $ 180,634 13,725 $ 251,409 $ 340,517 $ 88,621 $
LIABILITIES
Accounts Payable 2,000 $ - $ - $ - $ - $
Accrued Liabilities - - - - -
Deposits Payable - - - - -
Unearned Revenue - - - - -
Due to Other Governments - - - - -
Due to Other Funds - 180,634 - - -
Total Liabilities 2,000 180,634 - - -
DEFERRED INFLOWS OF RESOURCES
Unavailable Revenues - Grants - 180,634 - - -
Total Deferred Inflows of Resources - 180,634 - - -
FUND BALANCES (DEFICITS)
Nonspendable - - - - -
Restricted 11,725 - 251,409 340,517 88,621
Unassigned - (180,634) - - -
Total Fund Balances (Deficits) 11,725 (180,634) 251,409 340,517 88,621 Total Liabilities, Deferred Inflows of
Resources, and Fund Balances 13,725 $ 180,634 $ 251,409 $ 340,517 $ 88,621 $ Special Revenue Funds Capital Project Funds
58 Debt Service
Fund
2014 2014 Non-Major
Refunding PUC Housing Development Refunding Governmental Bonds Infrastructure Reimbursement Fund Impact Fee Bonds Total $ - 280,568 $ 324,111 $ 555,327 $ 1,162,542 $ 3,206 $ 13,697,198 $ 218,358 - - - - - 699,164
- - - - - - 2,599,461
- 651 - - - - 2,047
- - - - - - 932
- - - - - - 444,636
190,422 6,171 - - - - 674,810
$ 408,780 287,390 $ 324,111 $ 555,327 $ 1,162,542 $ 3,206 $ 18,118,248 $ $ 168,533 287,390 $ - $ - $ - $ 3,206 $ 657,296 $
- - - - - - 55,967
- - - - - - 80,070
- - - - - - 300,000
- - - - - - 3,974
21,540 - - 451,390 - 799,504 -
287,390 190,073 - 451,390 - 3,206 1,896,811
- - - - - 180,634 -
- - - - - 180,634 -
- - - - - - 932
218,707 - 324,111 555,327 711,152 16,224,881 -
- - - - - (185,010) -
218,707 324,111 555,327 711,152 - 16,040,803 -
$ 287,390 $ 408,780 $ 324,111 $ 555,327 $ 1,162,542 $ 3,206 $ 18,118,248 Capital Project Funds
59 City of Montclair
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non-major Funds - Continued
Year Ended June 30, 2021
Community
Park Development
Gas Tax Measure I Traffic Safety Development Block Grant
REVENUES
Taxes 1,650,733 $ - $ - $ - $ - $
Intergovernmental - 897,155 7,556 - 108,776
Charges for Services - - - - -
Use of Money and Property 4,980 10,858 - - -
Fines and Forfeitures - - 94,799 - -
Miscellaneous - - - - -
Total Revenues 1,655,713 908,013 102,355 - 108,776
EXPENDITURES
Current:
General Government 65,581 - - - -
Public Safety - - - - -
Community Development - - 7,401 - 108,775
Public Works 649,124 - - - -
Capital Outlay 52,948 1,062 - - -
Debt Service:
Principal Retirement - - - - -
Interest and Fiscal Charges - - - - -
Total Expenditures 767,653 1,062 7,401 - 108,775
Excess (Deficiency) of Revenues
Over (Under) Expenditures 888,060 906,951 94,954 - 1
OTHER FINANCING SOURCES (USES)
Transfers In - - - - -
Transfers Out (1,118,724) (100,000) - (651,000) -
Total Other Financing Sources (Uses) (1,118,724) (100,000) - (651,000) - Net Change in Fund Balances (230,664) 906,951 (5,046) (651,000) 1 Fund Balance, Beginning of Year 866,575 3,335,022 48,297 1,800,207 (1,545) Fund Balance, End of Year $ 635,911 $ 4,241,973 $ 43,251 $ 1,149,207 $ (1,544) Special Revenue Funds
60 State Asset Federal Asset
Air Quality Older State Asset Public Forfeiture Forfeiture Forfeiture School Improvement American Act Forfeiture Safety DOJ Section 11489 Treasury District Grant $ - $ - $ 416,649 - $ $ - $ - $ - $ -
51,565 205,428 - - - - - -
- - - - - - - -
674 - 346 1,248 - 139 286 -
- - 732 64,336 - 129 4,666 -
57,944 - - - - - - -
52,239 263,372 1,078 416,649 65,584 268 4,952 -
- - - - - - - -
- - 372,699 - 1,078 - - -
279,703 - - - - - - -
- - - - - - - -
- 6,600 - 4,314 - - - -
- - - - - - - -
- - - - - - - -
279,703 - 6,600 372,699 5,392 - - -
52,239 (16,331) (5,522) 43,950 60,192 268 4,952 -
18,169 16,331 - - - - - -
- - - - - - - -
18,169 16,331 - - - - - -
70,408 (5,522) - 43,950 60,192 268 4,952 -
160,737 117,320 191,350 343,536 - 45,009 87,679 -
$ 231,145 $ 111,798 - $ $ 235,300 $ 403,728 $ 45,277 $ 92,631 $ - Continued
Special Revenue Funds
61 City of Montclair
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non-major Funds - Continued
Year Ended June 30, 2021
Justice Crime Recycling After
Assistance Prevention Block School
SSLEF Grant PC 1202.5 Grant Program
REVENUES
Taxes - $ - $ - $ - $ - $
Intergovernmental 156,894 36,864 - 15,174 1,263,539
Charges for Services - - - - -
Use of Money and Property 1,078 - 7 251 -
Fines and Forfeitures - - 112 - -
Miscellaneous - - - - -
Total Revenues 157,972 36,864 119 15,425 1,263,539
EXPENDITURES
Current:
General Government - - - - -
Public Safety 100,000 30,274 - - -
Community Development - - - 9,994 712,555
Public Works - - - - -
Capital Outlay - - - - -
Debt Service:
Principal Retirement - - - - -
Interest and Fiscal Charges - - - - -
Total Expenditures 100,000 30,274 - 9,994 712,555
Excess (Deficiency) of Revenues
Over (Under) Expenditures 57,972 6,590 119 5,431 550,984
OTHER FINANCING SOURCES (USES)
Transfers In - - - - -
Transfers Out (6,590) - - (26,737) -
Total Other Financing Sources (Uses) (6,590) - - (26,737) - Net Change in Fund Balances 57,972 - 119 5,431 524,247
Fund Balance, Beginning of Year 290,920 2,007 75,679 1,590 - Fund Balance, End of Year $ 348,892 $ 2,126 - $ $ 81,110 $ 525,837 Special Revenue Funds
62 Safety Disability Mt. Baldy Montclair Kaiser
Department Immunization E.M.S. Prop 30 Access- United Way Housing Permanente Grants Grant Paramedic SB 109 Bus. License Grant Corporation Grant $ - $ - $ - $ - $ - $ - $ - $ -
145,615 - - - - - - -
- 44,350 - 8,950 - - - -
- - - 379 - 1,003,393 - -
- - - - - - - -
- - - - - - - -
145,615 44,350 - 379 8,950 1,003,393 - -
- - - - - 923,434 - -
161,989 82,451 - - - - - -
16,176 - - - 70 - - 900
- - 17,158 - - - - -
- - - - - - - -
- - - - - - - -
- - - - - - - -
161,989 16,176 82,451 17,158 70 923,434 - 900
(16,374) (16,176) (38,101) (16,779) 8,880 79,959 - (900) 25,547 3,225 35,284 - - - - -
- - - - - - - -
25,547 3,225 35,284 - - - - -
9,173 (12,951) (2,817) (16,779) 8,880 79,959 - (900)
(12,005) 12,951 2,817 139,395 29,283 2,160,700 - 5,520
$ (2,832) $ - $ 122,616 - $ $ 38,163 $ 2,240,659 - $ $ 4,620 Continued
Special Revenue Funds
63 City of Montclair
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non-major Funds - Continued
Year Ended June 30, 2021
Resource Title IIIB ASES Hope Thru
Center Sr. Supportive Community Supplemental Housing
Grant Services Foundation Grant Grant
REVENUES
Taxes $ - $ - $ - $ - $ -
Intergovernmental - - 119,847 - -
Charges for Services 63,100 - - - -
Use of Money and Property - - - - -
Fines and Forfeitures - - - - -
Miscellaneous 28,500 14,731 - - -
Total Revenues 28,500 63,100 14,731 119,847 -
EXPENDITURES
Current:
General Government - - - - -
Public Safety - - - - -
Community Development 22,478 63,100 16,755 106,394 -
Public Works - - - - -
Capital Outlay - - - - -
Debt Service:
Principal Retirement - - - - -
Interest and Fiscal Charges - - - - -
Total Expenditures 22,478 63,100 16,755 106,394 -
Excess (Deficiency) of Revenues
Over (Under) Expenditures 6,022 (2,024) - 13,453 -
OTHER FINANCING SOURCES (USES)
Transfers In - - - - -
Transfers Out - - - - -
Total Other Financing Sources (Uses) - - - - -
Net Change in Fund Balances 6,022 (2,024) - 13,453 -
Fund Balance, Beginning of Year 10,719 3,998 160,167 - - Fund Balance, End of Year $ 16,741 $ 3,998 $ 158,143 $ 13,453 $ - Special Revenue Funds
64 Montclair Public Homeless Healthy
Park CFD 2011-1 CFD 2011-2 Housing Education Emergency Community SB2 Planning Maintenance Paseos Arrow Station Authority Govt. PEG Aid Program Strategic Plan Grant $ 140,573 - $ 40,846 $ - $ - $ - $ - $ - $
- - - - - 348,323 - 86,950
- 38,055 - - 26,700 - - -
443 - 281 - - - - -
- - - - - - - -
- - - - - - - -
141,016 38,055 41,127 - 26,700 348,323 - 86,950
- - 1,875 - - - - -
54,153 - 9,782 - - - - -
- 40,775 - - - 346,515 1,199 86,950
67,299 - 31,828 - - - - -
- - - - - - - -
- - - - - - - -
- - - - - - - -
40,775 121,452 43,485 - 346,515 - 1,199 86,950
(2,720) 19,564 (2,358) 26,700 - 1,808 (1,199) -
- - - - - - - -
- - - - (1,808) - - -
- - - - (1,808) - - -
(2,720) 19,564 (2,358) 26,700 - (1,199) - -
84,408 122,034 85,595 2,603,932 23,574 18,135 - -
$ 81,688 $ 141,598 $ 83,237 $ 2,603,932 $ 50,274 $ 16,936 - $ $ - Continued
Special Revenue Funds
65 City of Montclair
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non-major Funds - Continued
Year Ended June 30, 2021
Homeless Statewide
Housing Park Pavement Underground General Plan
Assistance Development Impact Fees In-lieu Update
REVENUES
Taxes - $ - $ - $ - $ - $
Intergovernmental 14,375 - - - -
Charges for Services - - 74,408 164,870 11,703
Use of Money and Property - - - - -
Fines and Forfeitures - - - - -
Miscellaneous - - - - -
Total Revenues 14,375 - 74,408 164,870 11,703
EXPENDITURES
Current:
General Government - - - - -
Public Safety - - - - -
Community Development 2,650 - - - -
Public Works - - - - 661
Capital Outlay - - - - -
Debt Service:
Principal Retirement - - - - -
Interest and Fiscal Charges - - - - -
Total Expenditures 2,650 - - - 661
Excess (Deficiency) of Revenues
Over (Under) Expenditures 11,725 - 74,408 164,870 11,042
OTHER FINANCING SOURCES (USES)
Transfers In - - - - -
Transfers Out (180,634) - - - -
Total Other Financing Sources (Uses) (180,634) - - - -
Net Change in Fund Balances 11,725 (180,634) 74,408 164,870 11,042 Fund Balance, Beginning of Year - 177,001 - 175,647 77,579 Fund Balance, End of Year $ 11,725 $ (180,634) $ 251,409 $ 340,517 $ 88,621 Special Revenue Funds Capital Project Funds
66 Debt Service
Fund
2014 2014 Non-Major
Refunding PUC Housing Development Refunding Governmental Bonds Infrastructure Reimbursement Fund Impact Fee Bonds Total $ - - $ - $ - $ - $ - $ 2,248,801 $
609,988 628,059 - - - - 4,696,108
- - - - 253,465 - 685,601
- - - - - 8 1,024,371
- - - - - - 164,774
- - - - - - 101,175
609,988 628,059 - - 253,465 8 8,920,830
- - - - - - 990,890
- - - - - - 812,426
- - - - - - 1,822,390
- 2,998,031 - - - - 3,764,101
2,195,273 - - - - - 2,260,197
- - - - - 885,000 885,000
- - - - 1,708,969 - 1,708,969
2,998,031 2,195,273 - - 2,593,969 - 12,243,973
(2,369,972) (1,585,285) - 253,465 - (2,593,961) (3,323,143) 855,817 1,667,208 - - 2,593,961 - 5,215,542
(6,171) - (143,943) (58,796) - (2,294,403) -
855,817 1,661,037 (143,943) (58,796) - 2,593,961 2,921,139 (1,514,155) 75,752 (143,943) 194,669 - (402,004) -
1,514,155 142,955 468,054 555,327 516,483 16,442,807 -
$ 218,707 0 $ $ 324,111 $ 555,327 $ 711,152 $ 16,040,803 - $ Capital Project Funds
67 City of Montclair
Single Audit Report on
Federal Awards Programs
For the Fiscal Year Ended June 30, 2021
Certified Public Accountants
Van Lant
Fankhanel LLP
&
,
CITY OF MONTCLAIR
Single Audit Report on
Federal Award Programs
June 30, 2021
CITY OF MONTCLAIR
SINGLE AUDIT REPORT ON FEDERAL AWARD PROGRAMS
Year Ended June 30, 2021
TABLE OF CONTENTS
Page
Independent Auditor’s 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 1 - 2 Independent Auditor’s Report on Compliance for Each Major Program and on Internal Control Over Compliance Required by Uniform Guidance 3 - 5 Schedule of Expenditures of Federal Awards 6 - 7
Notes to the Schedule of Expenditures of Federal Awards 8 Schedule of Findings and Questioned Costs 9 - 11
Summary Schedule of Prior Audit Findings 12
Independent Auditor’s 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 City Council
City of Montclair
Montclair, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, business-type activities, each major fund and the aggregate remaining fund information of the City of Montclair (City), as of and for the year ended June 30, 2021, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated March 8, 2022.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses may exist that were not identified. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.
1 Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion.
The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
March 8, 2022
2 Independent Auditor’s Report on Compliance for Each Major Program and on Internal Control Over Compliance Required by Uniform Guidance City Council
City of Montclair
Montclair, California
Report on Compliance for Each Major Federal Program
We have audited the City of Montclair’s compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of the City’s major federal programs for the year ended June 30, 2021. The City’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs.
Management’s Responsibility
Management is responsible for compliance with the requirements of laws, regulations, contracts, and the terms and conditions of its grants applicable to its federal program.
Auditor’s Responsibility
Our responsibility is to express an opinion on compliance for each of the City’s major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2, U.S. Code of Federal Regulations, Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the City’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of the City’s compliance. 3 Opinion on Each Major Federal Program
In our opinion, the City of Montclair complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2021.
Report on Internal Control Over Compliance
Management of the City is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the City’s internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.
Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance We have audited the financial statements of the governmental activities, business-type activities, each major fund, and the aggregate remaining fund information, of the City of Montclair, 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. We issued our report thereon dated March 8, 2022, which contained unmodified opinions on those financial statements. Our audit was conducted for the purpose of forming an opinion on the financial statements that collectively comprise the basic financial statements.
4 The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by the Uniform Guidance and is not a required part of the basic financial statements.
Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditures of federal awards is fairly stated in all material respects in relation to the basic financial statements as a whole.
The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.
March 8, 2022
5 CITY OF MONTCLAIR
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
(SUPPLEMENTARY INFORMATION)
Year Ended June 30, 2021
Federal Program Program
Federal Grantor/Pass-Through CFDA Identification ExpendGrantor/Program or Cluster Title Number Number itures Department of Housing and Urban Development
CDBG - Entitlement Grants Cluster
Passed through the County of San Bernardino:
Community Development Block Grant 14.218 MONT-16-1-05Z/0793 33,859 $ Community Development Block Grant 14.218 108-18417/1002 6,865 Community Development Block Grant 14.218 MONT-16-1-05A/2220 10,000 COVID-19 - Community Development Block Grant 14.218 MONT-19CV-1-03T/0206 19,821 COVID-19 - Community Development Block Grant 14.218 MONT-19CV-1-05W/0205 38,230 Total Department of Housing and Urban Development Programs 108,775 Department of Justice
Passed through the County of San Bernardino:
COVID-19 - Coronavirus Emergency Supplemental Funding 16.034 2020-VD-BX-0532 36,864 Total Department of Justice Programs 36,864
Department of the Transportation
Highway Planning and Construction Cluster
Passed through the California Department of Transportation:
Highway Planning and Construction 20.205 BRLS-5326 (018) 609,988 Total Highway Planning and Construction Cluster 609,988 Passed through the California Office of Traffic Safety:
State and Community Highway Safety 20.600 PS20014 7,401 State and Community Highway Safety 20.600 PT-21117 10,273 Subtotal 17,674
Passed through the California Office of Traffic Safety:
Minimum Penalties for Repeat Offenders 20.608 PT-21117 11,309 Total Department of Transportation Programs 638,971
Department of Treasury
Passed through the State of California:
COVID-19 - Coronavirus Relief Fund 21.019 CARES21-ALLC-MON 487,588 Passed through the County of San Bernardino:
COVID-19 - Coronavirus Relief Fund 21.019 CARES21-ALLC-MON 922,249 Total Department of Treasury Programs 1,409,837 *
6 CITY OF MONTCLAIR
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
(SUPPLEMENTARY INFORMATION)
Year Ended June 30, 2021
Federal Program Program
Federal Grantor/Pass-Through CFDA Identification ExpendGrantor/Program or Cluster Title Number Number itures Department of Health and Human Services
Aging Cluster
Passed through the County of San Bernardino:
Special Programs for the Aging Titile III, Part B 93.044 15-41 63,100 Passed through the County of San Bernardino:
Special Programs for the Aging Titile III, Part C 93.045 19-47 175,428 COVID-19 - Special Programs for the Aging Titile III, Part C 93.045 2001CACMC2-00 18,000 Subtotal 193,428
Passed through the County of San Bernardino:
Nutrition Services Incentive Program 93.053 19-47 12,000 Total Department of Health and Human Services Programs 268,528 Department of Homeland Security
Passed through the CA Governor's Office of Emergency Services:
COVID-19 - Disaster Grants - Public Assistance 97.036 FEMA-4482-DR-CA 77,468 Passed through FEMA:
Assistance to Firefighters Grant 97.044 EMW-2019-FG-07929 90,909 Passed through the County of San Bernardino OES:
Homeland Security Grant 97.067 2018-0054 1,278
Homeland Security Grant 97.067 2019-0035 16,500
Subtotal 17,778
Total Department of Homeland Security Programs 186,155
Total Expenditures of Federal Awards 2,649,130$
* = Major Program
7 CITY OF MONTCLAIR
NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Year Ended June 30, 2021
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES APPLICABLE TO THE SCHEDULE
OF FEDERAL AWARDS
A) Scope of Presentation
The accompanying schedule presents only the expenditures incurred (and related awards received) by the City of Montclair that are reimbursable under programs of federal agencies providing financial assistance. For the purpose of this schedule, financial assistance includes both federal financial assistance received directly from a federal agency, as well as federal funds received from pass-through entities by the City of Montclair. Only the portion of program expenditures reimbursable with such federal funds is reported in the accompanying schedule.
Program expenditures in excess of the maximum federal reimbursement authorized or the portion of the program expenditures that were funded with the state, local or other non-federal funds are excluded from the accompanying schedule.
B) Basis of Accounting
The expenditures included in the accompanying schedule were reported on the modified accrual basis of accounting. Under the modified accrual basis of accounting, expenditures are incurred when the City of Montclair becomes obligated for payment as a result of the receipt of the related goods and services. Expenditures reported include any property or equipment acquisitions incurred under the federal program.
C) Major Programs
The City had one major program for the year ended June 30, 2021, consisting of the Coronavirus Relief Fund grant, which had total disbursements of $1,409,837. This amount calculates to 53% of the total disbursements from federal awards.
8 CITY OF MONTCLAIR
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
Year Ended June 30, 2021
SECTION I – SUMMARY OF AUDITOR’S RESULTS
Financial Statements
Type of Auditor’s Report Issued: Unmodified
Internal Control Over Financial Reporting:
Material Weakness(es) Identified? No
Significant Deficiencies Identified not Considered
to be Material Weaknesses? None
Noncompliance Material to Financial Statements Noted? No Federal Awards
Internal Control Over Major Programs:
Material Weakness(es) Identified? No
Significant Deficiencies Identified not Considered
to be Material Weaknesses? None
Type of Auditors’ Report Issued on Compliance for Major Programs: Unmodified Any Audit Findings Disclosed that are Required to be Reported in Accordance With Uniform Guidance? No
Identification of Major Programs:
CFDA Numbers Name of Federal Program or Cluster
U.S. Department of Treasury
21.019 Coronavirus Relief Fund
Dollar Threshold used to Distinguish Between Type A
And Type B Programs: $ 750,000
Auditee Qualified as Low-Risk Auditee? No
9 CITY OF MONTCLAIR
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
Year Ended June 30, 2021
SECTION II – FINANCIAL STATEMENT FINDINGS
There were no auditor’s findings to be reported in accordance with Government Auditing Standards.
10 CITY OF MONTCLAIR
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
Year Ended June 30, 2021
SECTION III – FEDERAL AWARD FINDINGS AND QUESTIONED COSTS There were no auditor’s findings to be reported in accordance with the Uniform Guidance. 11 CITY OF MONTCLAIR
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
Year Ended June 30, 2021
SECTION II – FINANCIAL STATEMENT FINDINGS
There were no auditor’s findings to be reported in accordance with Government Auditing Standards.
SECTION III – FEDERAL AWARD FINDINGS AND QUESTIONED COSTS There were no auditor’s findings required to be reported in accordance with the Uniform Guidance in the prior year.
12 City of Montclair as Successor Agency for
the City of Montclair Redevelopment Agency
(Successor Agency)
Bonding Requirement Financial Disclosure
Financial Statement
Fiscal Year Ended June 30, 2021
Certified Public Accountants
Van Lant
Fankhanel LLP
&
,
City of Montclair as Successor Agency
for the City of Montclair Redevelopment Agency (Successor Agency) Bonding Requirement Financial Disclosure Financial Statement Year Ended June 30, 2021
City of Montclair as Successor Agency
for the City of Montclair Redevelopment Agency (Successor Agency) Bonding Requirement Financial Disclosure Financial Statement Year Ended June 30, 2021
TABLE OF CONTENTS
Page
Independent Auditor's Report ........................................................................................ 1 Bonding Financial Disclosure Basis Financial Statements Combining Project Area Balance Sheet –
All Debt Service Funds ........................................................................................ 3 Combining Project Area Statement of Revenues,
Expenditures and Changes in Fund Balance –
All Debt Service Funds ........................................................................................ 4 Notes to Financial Statements ................................................................................ 5 Independent Auditor’s Report
City of Montclair as Successor Agency for the
City of Montclair Redevelopment Agency
Montclair, California
Report on the Financial Statements
We have audited the accompanying financial statements of the City of Montclair as Successor Agency for the City of Montclair Redevelopment Agency (Successor Agency), which comprise the bonding financial disclosure basis project area balance sheet, all debt services funds as of June 30, 2021, and the bonding financial disclosure basis project area revenues, expenditures and changes in fund balances, all debt service funds for the year then ended, and the related notes to the financial statements.
Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with financial reporting disclosure requirements of bond issues of the Successor Agency. Management is also responsible 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.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. 2 We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the assets and liabilities of the Successor Agency as of June 30, 2021, and its revenues, expenditures and changes in fund balances for the year then ended in accordance with the financial reporting disclosure provisions applicable to its bond issues outstanding.
Basis of Accounting
We draw attention to Note 1 of the financial statements, which describes the basis of accounting and the reporting entity. The financial statements are prepared by the Successor Agency on the basis of the financial reporting provisions of bonding financial disclosure requirements, which is a basis of accounting other than accounting principles generally accepted in the United States of America, to comply with the financial disclosure provisions of the bonding contractual relationships referred to above. Our opinion is not modified with respect to this matter.
Restriction on Use
Our report is intended solely for the information and use of the City of Montclair as Successor Agency for the City of Montclair Redevelopment Agency and organizations assessing compliance with bonding provisions. It is not intended to be and should not be used by anyone other than these specified parties.
Murrieta, California
March 17, 2022
2019 Series A 2019 Series B
Project Area Project Area Project Area Project Area Project Area Mission Blvd. Refunding Refunding No. 1 No. 2 No. 3 No. 4 No. 5 Project Area Bonds Bonds Total ASSETS
Cash and investments $ 14,841 $ - $ 116,489 $ - $ 489,169 $ 231 $ - $ 620,730 - $ Cash and investments with trustee - - - - - 1,431,067 - 464,308 1,895,375 Total Assets $ 14,841 $ - $ 116,489 $ - $ 489,169 $ 1,431,067 231 $ $ 464,308 $ 2,516,105
FUND BALANCES
Fund Balances: Restricted 14,841 $ - $ $ - 116,489 $ $ 231 489,169 $ 1,431,067 $ 464,308 $ 2,516,105 $ Total Fund Balances 14,841 $ - $ $ - 116,489 $ $ 231 489,169 $ 1,431,067 $ 464,308 $ 2,516,105 $
CITY OF MONTCLAIR AS SUCCESSOR AGENCY
FOR THE CITY OF MONTCLAIR REDEVELOPMENT AGENCY
COMBINING BONDING FINANCIAL DISCLOSURE BASIS PROJECT AREA BALANCE SHEET
ALL DEBT SERVICE FUNDS
JUNE 30, 2021
2019 Series A 2019 Series B
Project Area Project Area Project Area Project Area Project Area Mission Blvd. Refunding Refunding Revenues: No. 1 No. 2 No. 3 No. 4 No. 5 Project Area Bonds Bonds Total Taxes and Assessments: Tax Increment $ 178,321 $ - $ 7,212,912 $ 3,264,888 $ 7,620,055 $ 2,208,203 $ - $ 20,484,379 - $ Use of Money and Property: Interest income - - - - - - 642 394 1,036 Total Revenues 178,321 7, - 212,912 3,264,888 7,620,055 2,208,203 642 20,485,415 394 Expenditures: Current: General Government: Administrative costs 869 34,530 - 15,712 36,938 10,582 - 98,631 - Debt Service: Interest - - - - - 740,725 - 360,195 1,100,920 Principal - - - - - 1,325,000 - 255,000 1,580,000
Total Expenditures 869 34,530 - 15,712 36,938 10,582 2,065,725 615,195 2,779,551 Excess of Revenues over (under) Expenditures 177,452 7, - 178,382 3,249,176 7,583,117 2,197,621 (2,065,083) (614,801) 17,705,864 Other Financing Sources (Uses): Transfers in - Debt Service - - - - - - 1,790,850 642,828 2,433,678 Transfers out - Debt Service (12,857) (1, - 327,059) (267,485) (826,277) - - (2,433,678) - Administrative and operational fund payments (852) ( - 28,278) (12,552) (34,646) (9,671) - (85,999) - Pass through and residual taxing entity payments (167,578) (6, - 190,882) (3,028,760) (6,975,467) (2,187,719) - (18,550,406) - Total Other Financing Sources (Uses) (181,287) (7, - 546,219) (3,308,797) (7,836,390) (2,197,390) 1,790,850 642,828 (18,636,405) Net Change in Fund Balances (3,835) ( - 367,837) (59,621) (253,273) (274,233) 231 28,027 (930,541) Fund Balances, Beginning of Year 18,676 - 484,326 59,621 742,442 1,705,300 - 436,281 3,446,646 Fund Balances, End of Year $ 14,841 $ - $ 116,489 $ - $ 489,169 $ 1,431,067 231 $ $ 464,308 2,516,105 FOR THE FISCAL YEAR ENDED JUNE 30, 2021
CITY OF MONTCLAIR AS SUCCESSOR AGENCY
FOR THE CITY OF MONTCLAIR REDEVELOPMENT AGENCY
COMBINING BONDING FINANCIAL DISCLOSURE BASIS PROJECT AREA STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES
ALL DEBT SERVICE FUNDS
City of Montclair as Successor Agency
for the City of Montclair Redevelopment Agency (Successor Agency) Notes to Financial Statements
June 30, 2021
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A) Description of Entity
This reporting entity is for the City of Montclair as Successor Agency for the City of Montclair Redevelopment Agency (Successor Agency).
The City of Montclair Redevelopment Agency (the Agency) was activated June 6, 1977, pursuant to the State of California Health and Safety Code, Section 33000, entitled "Community Development Law." The primary purpose of the Agency was to encourage private redevelopment of property and to rehabilitate areas suffering from economic disuse arising from poor and inadequate planning, inadequate street layout and street access, lack of open space, landscaping and other improvements and facilities necessary to establish and maintain the economic growth of the City. However, the Agency was dissolved as of February 1, 2012 as a result of state legislation and its assets and obligations were transferred to the Successor Agency for disposition.
The City of Montclair as Successor Agency for the City of Montclair Redevelopment Agency became effective on February 1, 2012 because on December 29, 2011, the California Supreme Court upheld Assembly Bill 1X 26 ("the Bill") that provides for the dissolution of all redevelopment agencies in the State of California. The Bill provides that upon dissolution of a redevelopment agency, either the City or another unit of local government will agree to serve as the "successor agency" to hold the assets until they are distributed to other units of state and local government. On January 12, 2012, the City Council of the City of Montclair elected to become the Successor Agency for the former redevelopment agency in accordance with the Bill as part of City Resolution No. 12-2934.
After enactment of the law, which occurred on June 28, 2011, redevelopment agencies in the State of California cannot enter into new projects, obligations or commitments. Subject to the control of a newly established oversight board, remaining assets can only be used to pay enforceable obligations in existence at the date of dissolution (including the completion of any unfinished projects that were subject to legally enforceable contractual commitments).
In future fiscal years, successor agencies will only be allocated revenue in the amount that is necessary to pay the estimated annual installment payments on enforceable obligations of the former redevelopment agency until all enforceable obligations of the prior redevelopment agency have been paid in full and all assets have been liquidated.
The Bill directs the State Controller of the State of California to review the propriety of any transfers of assets between redevelopment agencies and other public bodies that occurred after January 1, 2011.
If the public body that received such transfers is not contractually committed to a third party for the expenditure or encumbrance of those assets, the State Controller is required to order the available assets to be transferred to the public body designated as the successor agency by the Bill. The State Controller’s Office review has been done and the Successor Agency complied with all findings present.
City of Montclair as Successor Agency
for the City of Montclair Redevelopment Agency (Successor Agency) Notes to Financial Statements
June 30, 2021
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued In accordance with the timeline set forth in the Bill (as modified by the California Supreme Court on December 29, 2011) all redevelopment agencies in the State of California were dissolved and ceased to operate as a legal entity as of February 1, 2012. Prior to that date, the final several months of the activity of the redevelopment agency continued to be reported in the governmental funds of the Former Redevelopment Agency. After the date of dissolution, the assets and activities of the dissolved redevelopment agency are maintained in the same accounting structure as previously utilized by the Successor Agency; however, they are reported in a fiduciary fund (private-purpose trust fund) in the financial statements of the City of Montclair.
The Successor Agency is the continuing entity arising from the dissolution of the Former Redevelopment Agency. Therefore, ending balances displayed in the accompanying financial statements represent balances applicable to the Successor Agency only.
B) Government-Wide and Fund Financial Statements
The financial statements (i.e., balance sheet and statement of revenues, expenditures and changes in fund balance – all debit service funds) report information on all of the activities relating to bond financial disclosure requirements of the Successor Agency.
C) Measurement Focus, Basis of Accounting and Financial Statement Presentation The financial statements are prepared by the Successor Agency on the basis of the financial reporting provisions of bonding financial disclosure requirements, which is a basis of accounting other than accounting principles generally accepted in the United States of America. This is done to comply with the financial disclosure provisions of the bonding contractual relationships as explained below.
The Former Redevelopment Agency was a party to various bonding arrangements and those bond issues require financial reporting of the various assets, liabilities, revenues and expenditures segregated by redevelopment project area for pledged revenues and bonding transactions. To demonstrate that reporting, the accompanying financial statements have been prepared which are segregated by the project areas of the Former Redevelopment Agency. The various governmental funds presented are limited to those that involve debt service operations of the Successor Agency.
Since that is only a portion of the total operations of the Successor Agency (surviving entity of the dissolution process), these financial statements do not report the financial position and results of operations of the complete Successor Agency which has been done as part of the City of Montclair's financial reporting.
The accompanying 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.
City of Montclair as Successor Agency
for the City of Montclair Redevelopment Agency (Successor Agency) Notes to Financial Statements
June 30, 2021
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued For this period, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period.
The County of San Bernardino collects property taxes for the entities. Tax liens attach annually as of 12:01 A.M. on the first day in January preceding 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 January each year and are delinquent on August 31. All property taxes are deposited, by the County of San Bernardino, into a Redevelopment Property Tax Trust Fund (RPTTF). Allocations from the RPTTF occur twice during the fiscal year and cover an upcoming sixmonth period. These allocations are based upon Department of Finance (DOF) approved enforceable obligations that are reported, by the Successor Agency, on a Redevelopment Obligation Payment Schedules (ROPS). The County of San Bernardino deducts from the RPTTF administrative charges and pass through obligations that it calculates and if sufficient monies remain the DOF approved amount of enforceable obligations. Any remaining balance in the RPTTF after the enforceable obligation distribution is distributed to the taxing entities, by the County, as residual balances. If insufficient monies are present to accomplish the required allocation for DOF approved enforceable obligations then the subordination of pass through obligations will be considered. Enforceable obligation allocations serve as the resources to accomplish debt service payments. Based upon information received from the County, the RPTTF allocations have been grossed up in the accompanying financial statements to show the total of property taxes received as well as administrative costs, pass through payments and residual balance allocations made.
Expenditures generally are recorded when a liability is incurred, as under accrual accounting.
However, debt service expenditures are recorded only when payment is due. 2) CASH AND INVESTMENTS
As of June 30, 2021, cash and investments were reported in the accompanying financial statements as follows:
Cash and Investments $ 620,730
Cash and Investments with Trustee 1,895,375
Total Cash and Investments $ 2,516,105
The Successor Agency maintains a cash and investment pool that is available for use for all of its funds. The amounts above represent only a portion of that investment pool applicable to its debt service and bond proceeds funds. Monies held by its fiscal agents, under the provisions of bond indentures, are not part of this cash and investment pool and are reported separately as cash and investments with trustees. The Successor Agency has adopted an investment policy, which authorizes it to invest in various investments.
City of Montclair as Successor Agency
for the City of Montclair Redevelopment Agency (Successor Agency) Notes to Financial Statements
June 30, 2021
2) CASH AND INVESTMENTS - Continued
Since the amounts above represent only a portion of the cash and investment pool of the Successor Agency, information on specific investments has not been included here. That information is available in the City of Montclair's financial report where the Successor Agency is reported in a fiduciary fund.
3) INTERFUND TRANSFERS
The accompanying financial statements report debt service funds for the Successor Agency. These funds receive pledged revenue and then transfer those amounts to the funds specified in the applicable bond indentures. Once the pledged revenues exceed the requirements of the bond indentures then the pledge is satisfied and any remaining amounts are available for use in accordance with applicable legal requirements. Transfers In and Out have been broken down on the accompanying financial statements and were as follows:
Transfers In
Debt Service Requirements $ 2,433,678
Transfers Out
Debt Service Requirements $ 2,433,678
Only accounting funds applicable to the debt servicing and bond proceeds operation of the Successor Agency are present in the accompanying financial statements. Administrative allowance and operational fund payments were made from the tax increment operations of the Successor Agency to remove monies from accounting funds handling pledged revenue to accounting funds which would accomplish distributions to taxing entities and pay administrative costs of the Successor Agency. 4) LONG-TERM DEBT
The following is a summary of changes in long-term debt of the Successor Agency for the year ended June 30, 2021:
Beginning Ending Due Within
Balance Additions Deletions Balance One Year
Tax Allocation Refunding Bonds 32,550,000 $ $ 1, - $ 580,000 $ 30,970,000 $ 1,355,000 During Fiscal Year 2019-2020, the Successor Agency issued Tax Allocation Refunding Bonds, 2019 Series A and B to refund bonds incurred by the Former Agency (Prior Bonds), pay for a debt service reserve insurance policy to be established under the Indenture, and pay costs of issuance. This issuance was done to achieve substantial debt service savings over the remaining life of the Prior Bonds. The refunding bond plan was approved by the Successor Agency’s Board of Directors, County Oversight Board and the Department of Finance.
City of Montclair as Successor Agency
for the City of Montclair Redevelopment Agency (Successor Agency) Notes to Financial Statements
June 30, 2021
4) LONG-TERM DEBT - Continued
The Prior Bonds were issued to finance and refinance the Former Agency’s undertakings with respect to four project areas (Project Area No. 1, Project Area No. III, Project Area No. IV, and Project Area No. V). Proceeds of the 2019A Bonds were used to refund a portion of the 2007A Project Area III Bonds, a portion of the 2004 Project Area IV Bonds, a portion of the 2001 Project Area V Bonds and a portion of the 2006 Project Area V Bonds. Proceeds of the 2019B Bonds were used to refund all of remaining balance of the Prior Bonds.
Interest on the 2019 Series A and B Bonds is payable semiannually on April 1 and October 1 of each year, commencing April 1, 2020. The Bonds carry various interest rates from 1.856% to 4%. Principal maturities begin on October 1, 2020, and continue on October 1 of each year through 2035. The outstanding balance at June 30, 2021 is $30,970,000. The debt service requirements to maturity for bonds outstanding as of June 30, 2021, are as follows:
Fiscal Year Principal Interest Principal Interest Principal Interest 2021 - 2022 1,070,000 704,800 285,000 1, 355,112 1, 355,000 059,912 2022 - 2023 1,105,000 672,175 445,000 1, 347,975 1, 550,000 020,150 2023 - 2024 1,140,000 632,800 450,000 1, 338,829 590,000 971,629 2024 - 2025 1,195,000 586,100 675,000 326,679 1,870,000 912,779 2025 - 2030 7,220,000 2,140,800 4,005,000 1,356,768 11,225,000 3,497,568 2030 - 2035 6,035,000 720,700 6,230,000 534,255 12,265,000 1,254,955 2035 - 2040 800,000 16,000 315,000 5,242 1,115,000 21,242 Totals 18,565,000 $ $ 5,473,375 $ 12,405,000 $ 3,264,860 $ 30,970,000 $ 8,738,235 2019 Tax Allocation Refunding
Bonds, Series A
2019 Taxable Tax Allocation
Refunding Bonds, Series B Total
A description of long-term debt outstanding (excluding defeased debt) of the Successor Agency to the Former Redevelopment Agency as of June 30, 2021, follows:
On December 19, 2019, the Agency issued 2019 Series A Tax Allocation Refunding Bonds in the amount of $19,890,000. These bonds were issued to accomplish a refunding of previously issued tax allocation bonds – see discussion above. Interest on the bonds is payable semi-annually on April 1 and October 1, in each year, commencing on April 1, 2020. The bonds carry interest rates ranging from 3.0% to 4.0%. Principal maturities began October 1, 2020 and continue to October 1, 2035. As of June 30, 2021, the outstanding principal amount of these bonds was $18,565,000.
On December 19, 2019, the Agency issued 2019 Series B Taxable Tax Allocation Refunding Bonds in the amount of $12,660,000. These bonds were issued to accomplish a refunding of previously issued tax allocation bonds – see discussion above. Interest on the bonds is payable semi-annually on April 1 and October 1, in each year, commencing on April 1, 2020. The bonds carry interest rates ranging from 1.8560% to 3.3280%. Principal maturities begin October 1, 2020 and continue to October 1, 2035. As of June 30, 2021, the outstanding principal amount of these bonds was $12,405,000.
City of Montclair as Successor Agency
for the City of Montclair Redevelopment Agency (Successor Agency) Notes to Financial Statements
June 30, 2021
5) AVAILABLE RESOURCES OF SUCCESSOR AGENCY
As part of the elimination of the City of Montclair Redevelopment Agency, AB 1484 required that "due diligence" reviews be conducted on the Successor Agency to determine amounts that were to be paid to the county for allocation to taxing entities. Two reviews were required. The first related to Low- and Moderate-Income Housing Funds held by the Successor Agency and the second was for all other funds of the Successor Agency. The Low- and Moderate-Income Housing review was completed, approved by the Department of Finance and resulted in $7,884,597 being paid to the County of San Bernardino for allocation to the respective taxing entities. The Other Funds review has also been completed by the Successor Agency, approved by the Department of Finance and it resulted in $7,876,440 being paid to the County of San Bernardino for allocation to the respective taxing entities. As a result of these payments, the resources available to the Successor Agency to provide monies for debt service, etc. have been substantially depleted. On May 16, 2013, DOF issued a Finding of Completion to the Successor Agency indicating that all required payments specified under the legislation had been met.
eidebailly.com
Financial Statements
June 30, 2021
City of Montclair, California
Measure I Fund
City of Montclair, California
Measure I Fund
Table of Contents
June 30, 2021
Independent Auditor’s Report ............................................................................................................................. 1 Financial Statements
Balance Sheet .................................................................................................................................................. 4 Statement of Revenues, Expenditures, and Changes in Fund Balance .............................................................. 5 Notes to Financial Statements ......................................................................................................................... 6 Required Supplementary Information
Schedule of Revenues, Expenditures and Change in Fund Balance – Budget and Actual ..................................11 Note to Required Supplementary Information ................................................................................................12 Other Information
Program Status: Comparison of 5 Year Plan Project Budget to Current Year Expenditures ..............................13 Maintenance of Effort: Comparison of Base Level Amounts to Annual Expenditures .......................................14 Independent Auditor’s 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 Measure I Compliance Requirements ...........................................................................................15 What inspires you, inspires us. | eidebailly.com
10681 Foothill Blvd., Ste. 300 | Rancho Cucamonga, CA 91730-3831 | T 909.466.4410 | F 909.466.4431 | EOE 1 Independent Auditor’s Report
To the Board of Directors
San Bernardino County Transportation Authority
San Bernardino, California
Report on the Financial Statements
We have audited the accompanying financial statements of the Measure I Fund of the City of Montclair, California (City), as of and for the year ended June 30, 2021, and the related notes to the financial statements, as listed in the table of contents.
Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
2 Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Measure I Fund of the City as of June 30, 2021, and the respective changes in financial position thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Emphasis of Matter
As discussed in Note 1, the financial statements present only the Measure I Fund and do not purport to, and do not, present fairly the financial position of the City as of June 30, 2021, and the changes in its financial position, or where applicable, its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the budgetary comparison information as listed in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Management has omitted the management’s discussion and analysis for the Measure I Fund that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic the financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial for reporting placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information.
Other Information
Our audit was conducted for the purpose of forming an opinion on the financial statements of the Measure I Fund of the City. The program status and maintenance of effort schedules (other information) as listed in the table of contents, are presented for purposes of additional analysis and are not a required part of the financial statements. The other information has not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on it.
3 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 20, 2021, on our consideration of the City’s internal control over financial reporting of the Measure I Fund and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance, as it relates to the Measure I Fund.
Rancho Cucamonga, California
December 20, 2021
See Notes to Financial Statements. 4
City of Montclair, California
Measure I Fund
Balance Sheet
June 30, 2021
Assets
Cash and investments $ 3,613,223
Due from the City of Montclair 442,941
Taxes receivable 186,871
Total assets 4,243,035
Liabilities and Fund Balance
Liabilities
Accounts payable $ 1,062
Fund Balance
Restricted $ 4,241,973
Total liabilities and fund balance $ 4,243,035
See Notes to Financial Statements. 5
City of Montclair, California
Measure I Fund
Statement of Revenues, Expenditures, and Changes in Fund Balance Year Ended June 30, 2021
Revenues
Measure I sales tax $ 897,155
Interest income 10,858
Total revenues 908,013
Expenditures
Capital
Construction 1,062
Net Change in Fund Balance 906,951
Fund Balance, Beginning of Year 3,335,022
Fund Balance, End of Year $ 4,241,973
6 City of Montclair, California
Measure I Fund
Notes to Financial Statements
June 30, 2021
Note 1 - General Information
Reporting Entity
The financial statements are intended to reflect the financial position and changes in financial position of the Measure I Fund of the City of Montclair, California (City) only. Accordingly, the financial statements do not purport to, and do not, present fairly the financial position of the City as of June 30, 2021, and the changes in financial position thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America.
Measure I
Measure I is the half-cent sales tax collected throughout San Bernardino County for transportation improvements. In 2004, San Bernardino County voters approved the extension of the Measure I sales tax through 2040. See Note 4 for a detailed description of the Measure.
Note 2 - Summary of Significant Accounting Policies
The accounting policies of the Measure I Fund of the City conform to accounting policies generally accepted in the United States of America. The following is a summary of significant accounting policies.
A. Basis of Accounting
Governmental Fund Financial Statements
Fund Accounting
The accounts of the City are organized on the basis of funds. A fund is defined as an independent fiscal and accounting entity wherein operations of each fund are accounted for in a separate set of self-balancing accounts that record resources, related benefits, and equity, segregated for the purpose of carrying out specific activities.
The City accounts for the Measure I activities within its Measure I Special Revenue Fund.
Special Revenue Funds are used to account for the proceeds of revenue sources that are restricted or committed to expenditure for specified purposes.
7 City of Montclair, California
Measure I Fund
Notes to Financial Statements
June 30, 2021
Measurement Focus and Basis of Accounting
The Special Revenue Funds of the City are accounted for 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 collected within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, revenues are available if they are collected within 60 days of the end of the fiscal period. Expenditures generally are recorded when a liability is incurred. Operating statements of governmental funds present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current resources.
B. 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 the reported amounts of assets and liabilities and disclosures at the date of the financial statements and the reported amounts of revenues and expenditures during the reporting period. Actual results could differ from those estimates.
C. Fund Balance
Fund balance is reported according to the following classifications: nonspendable, restricted, committed, assigned, and unassigned based on the relative strength of the constraints that control how specific amounts can be spent.
Restricted fund balance represents amounts that can be spent only for specific purposes because of constitutional provisions or enabling legislation or because of constraints that are externally imposed by creditors, grantors, contributors, or the laws or regulations of other governments.
When an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available, the City considers restricted funds to have been spent first.
D. Cash and Investments
Cash and investments are pooled by the City to facilitate cash management and maximize investment opportunities and yields. Investment income resulting from this pooling is allocated to the respective funds including the Measure I Fund based upon the average cash balance. The investment policies and the risks related to cash and investments, applicable to the Measure I Fund, are those of the City and are disclosed in the City’s basic financial statements. The City’s basic financial statements can be obtained at City Hall. 8 City of Montclair, California
Measure I Fund
Notes to Financial Statements
June 30, 2021
The Measure I Fund’s cash and investments are reported at fair value. The fair value measurements are based on the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. The Measure I Fund’s deposits and withdrawals in the City Investment Pool are made on the basis of $1 and not fair value. Accordingly, the Measure I Fund’s investment in the City Investment Pool is measured based on inputs that are uncategorized and not defined as a Level 1, Level 2, or Level 3 input.
E. Maintenance of Effort
In accordance with California Public Utilities Code 190300 and Ordinance No. 04-01 of the San Bernardino County Transportation Authority (SBCTA), Local Street Program funds shall not be used to supplant existing local discretionary funds being used for street and highway purposes. The maintenance of effort (MOE) base year level was determined based upon the discretionary General Fund expenditures for transportation-related construction and maintenance activities in fiscal year 2008/2009. The MOE base year level as approved by the SBCTA Board of Directors shall remain in effect until the expiration of Measure I 2010-2040. General Fund expenditures in excess of the MOE base year level will carry over to subsequent fiscal years and can be applied in a future year to offset the amount the local agency may need to meet the MOE requirement. The City’s determined MOE base level is $894,728.
Note 3 - Taxes Receivable
The taxes receivable represent the Measure I sales tax revenues for the fiscal year received from SBCTA after June 30, 2021.
Note 4 - Measure I Fund
The California State Legislature authorized county transportation authorities to enact local option sales tax measures for transportation improvements in the late 1980s, under provisions of Division 19 (commencing with Section 180000) of the Public Utilities Code. In November 1989, San Bernardino County voters approved passage of Measure I, authorizing SBCTA to impose a half cent retail transactions and use tax applicable in the incorporated and unincorporated areas of the County of San Bernardino for the 20-year period between April 1, 1990 and March 31, 2010. SBCTA was authorized to administer the programs described in the Measure.
Early in the second decade of Measure I, it became apparent that continuation of the half cent sales tax would be critical to maintaining funding for transportation in San Bernardino County. SBCTA member jurisdictions and transportation stakeholders worked to identify transportation needs, and an expenditure plan was developed to serve as a basis for the renewal of Measure I. Ordinance No. 04-01 was placed before voters in November 2004, and Measure I was renewed. The new Measure I extends the half cent sales tax for 30 years, from April 1, 2010 through March 31, 2040. The new Measure is referred to as Measure I 2010-2040 to distinguish it from the first Measure I.
9 City of Montclair, California
Measure I Fund
Notes to Financial Statements
June 30, 2021
Revenue from the tax can only be used for transportation improvement and traffic management programs authorized in the Expenditure Plan.
Measure I 2010-2040 has a return-to-source provision that states that funds shall be allocated to subareas in accordance with the actual revenue collected in each subarea. After deduction of required Board of Equalization fees and authorized administrative costs, revenues generated in each subarea are to be expended on projects of direct benefit to that subarea. Revenues are accounted for separately for each subarea and then allocated to specified project categories in each subarea. These project categories are termed “programs” in the Strategic Plan. Decisions on how revenues are expended within the subareas are made by the SBCTA Board of Directors based upon recommendations of local subarea representatives. Other than the projects identified in the Cajon Pass Expenditure Plan, revenues generated within a subarea can be expended outside of that subarea only upon approval of two-thirds (2/3) of the jurisdictions within the affected subarea. A proportional share of projected state and federal transportation funds is to be reserved for use solely within the Valley subarea and individual Mountain/Desert (Colorado River, Morongo Basin, Mountains, North Desert and Victor Valley) subareas. In the San Bernardino Valley subarea, Measure I 2010-2040 contains the following programs:
• Freeway Program
• Freeway Interchange Program
• Major Street Program
• Local Street Program
• Metrolink/Rail Program
• Express Bus/Bus Rapid Transit Program
• Senior and Disabled Transit Program
• Traffic Management Systems Program
In each of the Mountain/Desert subareas, Measure I 2010-2040 contains the following programs:
• Local Street Program
• Major Local Highway Program
• Senior and Disabled Transit Program
Note 5 - Due from the City of Montclair
Due from the City of Montclair in the amount of $442,941 represents amounts borrowed by the City’s Development Impact Fee – Regional Fund. The provided resources to pay the SBCTA Development Impact Fees (DIF) are associated with the City’s Monte Vista Avenue/Union Pacific Grade Separation Project, as required by the SBCTA Nexus Study. The amount will be repaid to the Measure I Fund as DIF are collected. 10 City of Montclair, California
Measure I Fund
Notes to Financial Statements
June 30, 2021
Note 6 - Agreements
The City has entered into an agreement with SBCTA for the construction of the Monte Vista Avenue/Union Pacific Grade Separation Project. The cooperative agreement was entered into on August 3, 2015 and amended June 6, 2016. The agreement states that the project is identified in the SBCTA Nexus Study and that the project will be carried out in accordance with the policies of the Measure I 2010-2040 Strategic Plan. The agreement specifies responsibilities for both the City and SBCTA. The estimated project cost is $27,404,902 and the City is responsible for a share of the estimated project costs in the amount not to exceed $2,435,131 of which $2,338,074 has been paid through the fiscal year ended June 30, 2021. The agreement also specifies that in the occurrence of any uncured event of default, SBCTA is authorized to withhold Valley Major Street – Arterial SubProgram Funds or Local Street Program pass-through funds equivalent to the loan amount outstanding at the time of default.
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Required Supplementary Information
June 30, 2021
City of Montclair, California
Measure I Fund
See Note to Required Supplementary Information 11
City of Montclair, California
Measure I Fund
Schedule of Revenues, Expenditures and Change in Fund Balance – Budget and Actual Year Ended June 30, 2021
Original Final Actual Variance
Revenues
Measure I sales tax $ 577,287 $ 577,287 $ 897,155 $ 319,868 Interest income 10,000 10,000 10,858 858
Total revenues 587,287 587,287 908,013 320,726
Expenditures
Capital
Construction - - 1,062 (1,062)
Net Change in Fund Balance 587,287 587,287 906,951 319,664 Fund Balance, Beginning of Year 3,335,022 3,335,022 3,335,022 - Fund Balance, End of Year $ 3,922,309 $ 3,922,309 $ 4,241,973 $ 319,664 Budget
12 City of Montclair, California
Measure I Fund
Note to Required Supplementary Information
Year Ended June 30, 2021
Note 1 - Budgetary Data
The City adopts an annual budget on a basis consistent with accounting principles generally accepted in the United States of America.
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Other Information
June 30, 2021
City of Montclair, California
Measure I Fund
13 City of Montclair, California
Measure I Fund
Program Status: Comparison of 5 Year Plan Project Budget to Current Year Expenditures Year Ended June 30, 2021
The Measure I Five Year Capital Improvement Plan for local streets was adopted by Council Resolution No. 20- 3287. Of the funds allocated under the Measure I Five Year Capital Improvement Plan, the following programs were affected during the current fiscal year:
5-Year Plan Current
Project Fiscal Year Under/(Over)
Local Projects Budget Expenditures Estimate
Traffic Safety $ 50,000 $ 1,062 $ 48,938
Total expenditures at June 30, 2021 $ 1,062
14 City of Montclair, California
Measure I Fund
Maintenance of Effort: Comparison of Base Level Amounts to Annual Expenditures Year Ended June 30, 2021
The maintenance of effort base level amount was determined based upon fiscal year 2008/09 spending levels.
Excess/(deficient) amounts are carried forward in accordance with the Measure I Strategic Plan. Actual amounts expended in relation to the base level amount in each year subsequent to the base year are as follows:
General Fund Bond Proceeds Cumulative
Fiscal Year Ending Street and Highway Utilized for Street Base Level Excess/ Excess/ June 30, Funds Utilized Improvements Amount (Deficiency) (Deficiency) 2010 $ 602,490 $ - $ (894,728) $ (292,238) $ (292,238)
2011 610,777 - (894,728) (283,951) (576,189)
2012 326,710 - (894,728) (568,018) (1,144,207)
2013 26,527 - (894,728) (868,201) (2,012,408)
2014 110,894 - (894,728) (783,834) (2,796,242)
2015 180,227 559,529 (894,728) (154,972) (2,951,214)
2016 414,274 1,389,341 (894,728) 908,887 (2,042,327)
2017 679,071 3,616,653 (894,728) 3,400,996 1,358,669
2018 693,366 3,802,868 (894,728) 3,601,506 4,960,175
2019 799,066 5,023,153 (894,728) 4,927,491 9,887,666
2020 583,053 6,814,317 (894,728) 6,502,642 16,390,308
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10681 Foothill Blvd., Ste. 300 | Rancho Cucamonga, CA 91730-3831 | T 909.466.4410 | F 909.466.4431 | EOE 15 Independent Auditor’s 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 Measure I Compliance Requirements To the Board of Directors
San Bernardino County Transportation Authority
San Bernardino, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the Measure I Fund of the City of Montclair, California (City), as of and for the year ended June 30, 2021, and the related notes to the financial statements, and have issued our report thereon dated December 20, 2021. Our report included an emphasis of matter stating that the financial statements of the Measure I Fund do not purport to, and do not, present fairly the financial position of the City as of June 30, 2021.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting of the Measure I Fund (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.
16 Compliance and Other Matters
As part of obtaining reasonable assurance about whether the financial statements of the Measure I Fund of the City are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, including requirements of Measure I as specified in the agreement between the City and San Bernardino County Transportation Authority (SBCTA), noncompliance with which could have a direct and material effect on the financial statements.
However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards, including the Measure I requirements as specified in the agreement between the City and SBCTA.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Rancho Cucamonga, California
December 20, 2021